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1 Volume 42 Number 22 June 2, 2017 Pages

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

3 ATTORNEY GENERAL Opinions TEXAS ETHICS COMMISSION Ethics Advisory Opinion EMERGENCY RULES TEXAS PARKS AND WILDLIFE DEPARTMENT WILDLIFE 31 TAC 65.81, PROPOSED RULES STATE PRESERVATION BOARD RULES AND REGULATIONS OF THE BOARD 13 TAC TEXAS EDUCATION AGENCY PLANNING AND ACCOUNTABILITY 19 TAC TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY EMPLOYEES OF THE BOARD 22 TAC TAC TAC TAC TAC RULEMAKING PROCEDURES 22 TAC TAC REGISTRATION 22 TAC FEE SCHEDULE 22 TAC TAC TAC TAC TAC TAC CONTINUING PROFESSIONAL EDUCATION 22 TAC CRIMINAL BACKGROUND INVESTIGATIONS 22 TAC BOARD OPINIONS 22 TAC ADOPTED RULES PUBLIC UTILITY COMMISSION OF TEXAS PROCEDURAL RULES 16 TAC TEXAS EDUCATION AGENCY SCHOOL DISTRICTS 19 TAC CHARTERS 19 TAC TEXAS STATE BOARD OF PHARMACY ADMINISTRATIVE PRACTICE AND PROCEDURES 22 TAC TAC PHARMACIES 22 TAC TAC CONTROLLED SUBSTANCES 22 TAC TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY RULES OF PROFESSIONAL CONDUCT 22 TAC ELIGIBILITY 22 TAC CERTIFICATION BY RECIPROCITY 22 TAC TAC TAC TAC REGISTRATION 22 TAC TAC TAC TAC TAC TAC CERTIFICATION AS A CPA 22 TAC LICENSES 22 TAC TABLE OF CONTENTS 42 TexReg 2887

4 22 TAC TAC CANCER PREVENTION AND RESEARCH INSTITUTE OF TEXAS POLICIES AND PROCEDURES 25 TAC GRANTS FOR CANCER PREVENTION AND RESEARCH 25 TAC 703.5, 703.6, , COMPTROLLER OF PUBLIC ACCOUNTS TAX ADMINISTRATION 34 TAC IN ADDITION Texas Department of Agriculture Requests for Applications for the National Organic Certification Cost Share Program Office of the Attorney General Settlement of Claims for Clean Air Act, Texas Clean Air Act, and Texas Water Code Violations Office of Consumer Credit Commissioner Notice of Rate Ceilings Court of Criminal Appeals Availability of Grant Funds Texas Commission on Environmental Quality Agreed Orders Enforcement Orders Notice of Hearing Notice of Opportunity to Comment on Agreed Orders of Administrative Enforcement Actions Notice of Water Rights Application Proposal for Decision Texas Ethics Commission List of Late Filers Texas Facilities Commission Award for Financial Consulting Services Request for Proposals # Texas Department of Insurance Company Licensing Texas Lottery Commission Scratch Ticket Game Number 1848 "25X the Money" Scratch Ticket Game Number 1860 "Big Play Cashword" Scratch Ticket Game Number 1883 "Wild 10's" North Central Texas Council of Governments Request for Proposals for Cooperative Transit Vehicle Security Camera Systems (Re-Solicitation) Public Utility Commission of Texas Announcement of Application for Amendment to a State-Issued Certificate of Franchise Authority Notice of Application for a Service Provider Certificate of Operating Authority Notice of Application for Sale, Transfer, or Merger Notice of Application for Service Area Exception Notice of Application to Amend a Sewer Certificate of Convenience and Necessity Notice of Application to Amend a Sewer Certificate of Convenience and Necessity Notice of Application to Amend a Sewer Certificate of Convenience and Necessity Notice of Application to Amend a Sewer Certificate of Convenience and Necessity Notice of Application to Amend a Water Certificate of Convenience and Necessity Notice of Application to Amend Water Certificates of Convenience and Necessity and for Approval of a Service Area Contract Notice of Application to Determine Whether Certain Markets with Populations Less Than 100,000 Should Remain Regulated Notice of Application to Relinquish Designation as an Eligible Telecommunications Carrier Notice of Request for a Cease and Desist Order Texas Department of Transportation Public Notice - Aviation Texas Workforce Commission Request for Comment Regarding the Services performed by TIBH Industries Inc. FY TABLE OF CONTENTS 42 TexReg 2888

5 Opinions Opinion No. KP-0149 The Honorable Scott A. Say Lamb County Attorney 100 6th Drive, Room 111 Littlefield, Texas Re: Whether individuals civilly committed pursuant to chapter 841 of the Health and Safety Code are eligible to vote by mail under section of the Election Code (RQ-0142-KP) S U M M A R Y A court would likely conclude that a qualified voter civilly committed pursuant to chapter 841 of the Health and Safety Code and residing at the Texas Civil Commitment Center is eligible to vote by mail under subsection (a) of the Election Code. For further information, please access the website at or call the Opinion Committee at (512) TRD Amanda Crawford General Counsel Office of the Attorney General Filed: May 23, 2017 ATTORNEY GENERAL June 2, TexReg 2889

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7 Ethics Advisory Opinion EAO-543. Whether reimbursements for certain travel expenses to the executive director of a state agency are prohibited honoraria or benefits under chapter 36 of the Penal Code, and whether the reimbursements are required to be reported on a personal financial statement. (AOR- 621). SUMMARY Based on the requestor's facts described in this opinion, the executive director of a state agency would not receive an "honorarium" for purposes of section 36.07(a) of the Penal Code or a "benefit" for purposes of section of the Penal Code by accepting a reimbursement of certain travel expenses that are payable by the state agency. The executive director would not be required to report the reimbursement on a personal financial statement. The Texas Ethics Commission is authorized by section of the Government Code to issue advisory opinions in regard to the following statutes: (1) Chapter 572, Government Code; (2) Chapter 302, Government Code; (3) Chapter 303, Government Code; (4) Chapter 305, Government Code; (5) Chapter 2004, Government Code; (6) Title 15, Election Code; (7) Chapter 159, Local Government Code; (8) Chapter 36, Penal Code; (9) Chapter 39, Penal Code; (10) Section , Government Code; and (11) Section , Government Code. Questions on particular submissions should be addressed to the Texas Ethics Commission, P.O. Box 12070, Capitol Station, Austin, Texas , (512) TRD Seana Willing Executive Director Texas Ethics Commission Filed: May 19, 2017 TEXAS ETHICS COMMISSION June 2, TexReg 2891

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9 TITLE 31. NATURAL RESOURCES AND CONSERVATION PART 2. TEXAS PARKS AND WILDLIFE DEPARTMENT CHAPTER 65. WILDLIFE SUBCHAPTER B. DISEASE DETECTION AND RESPONSE DIVISION 1. CHRONIC WASTING DISEASE (CWD) 31 TAC 65.81, Pursuant to Parks and Wildlife Code, , and Government Code, , the executive director of the Texas Parks and Wildlife Department (the department) adopts, on an emergency basis, a 60-day extension of the effectiveness of amendments to and 65.82, concerning Disease Detection and Response, adopted on an emergency basis on January 26, 2017, and published in the February 10, 2017, issue of the Texas Register (42 TexReg 531). Introduction. Pursuant to Government Code, (the Texas Administrative Procedure Act), the initial effectiveness of an emergency rule can be no more than 120 days, but may be extended for an additional 60 days. In the notice of adoption of the emergency rules, the department stated its intent to also publish proposed rules pursuant to the Administrative Procedure Act's notice and comment rulemaking process. Those rules were published in the April 21, 2017, issue of the Texas Register (42 TexReg 2135) and will be deliberated for adoption by the Texas Parks and Wildlife Commission (Commission) on May 24-25, The extension of the emergency rules is necessary to enable their effectiveness to continue until the proposed rules can be deliberated by the Commission, which will take place prior to the expiration of the 60-day extension. The proposed rules, if adopted, will replace the emergency rules and the emergency rules will be withdrawn simultaneously upon the effectiveness of the proposed rules, if adopted. Therefore, the entirety of the 60-day extension may not be necessary. The department notes that the proposed rules are not identical to the emergency rules. The proposed rules differ from the emergency rules by refining the boundary of Containment Zone 3 (CZ 3) in portions of Bandera, Medina, and Uvalde counties, by establishing Surveillance Zone 3 (SZ 3) in portions of Bandera, Medina, and Uvalde counties, and by liberalizing restrictions on the movement of breeder deer within CZs and SZs generally; however, the extension of the emergency adoption will continue the boundaries and associated rules of CZ 3 as defined in the emergency rulemaking. The department's executive director has determined that the nature of CWD and its recent detection in a free-range white-tailed deer in Medina County pose an immediate danger to white-tailed deer, which is a species authorized to be regulated by the department, and that the adoption of the amendment on an emergency basis with fewer than 30 days' notice is necessary to address this immediate danger. The emergency action is necessary to protect the state's white-tailed deer populations, as well as associated industries. Justification for the Rules. CWD is a fatal neurodegenerative disorder that affects some cervid species, including white-tailed deer, mule deer, elk, red deer, sika, and their hybrids (susceptible species). It is classified as a TSE (transmissible spongiform encephalopathy), a family of diseases that includes scrapie (found in sheep), bovine spongiform encephalopathy (BSE, found in cattle and commonly known as "Mad Cow Disease"), and variant Creutzfeldt-Jakob Disease (vcjd) in humans. Although CWD remains under study, it is known that CWD is invariably fatal to certain species of cervids, and it is transmitted both directly (through animal-to-animal contact) and indirectly (through environmental contamination). Moreover, a high prevalence of the disease in wild populations correlates with deer population declines, and human dimensions research indicates that hunters will avoid areas of high CWD prevalence. If CWD is not contained and controlled, the implications of the disease for Texas and its multi-billion dollar ranching, hunting, wildlife management, and real estate economies could be significant. There is no scientific evidence to indicate that CWD is transmissible to humans. The department has engaged in several rulemakings over the years to address the threat posed by CWD. In 2005, the department closed the Texas border to the entry of out-of-state captive white-tailed and mule deer and increased regulatory requirements regarding disease monitoring and record keeping. (The closing of the Texas border to entry of out-of-state captive white-tailed and mule deer was updated, effective in January 2010, to address other disease threats to white-tailed and mule deer (35 TexReg 252).) On July 10, 2012, the department confirmed that two mule deer sampled in the Texas portion of the Hueco Mountains tested positive for CWD. In response, the department adopted new rules in 2012 (37 TexReg 10231) to implement a CWD containment strategy in far West Texas. The rules established a system of concentric zones within which the movement of live deer under department permits (Deer Breeder Permits, Triple T Permits, and Deer Management Permits) is restricted, and required deer harvested in specific geographical areas to be presented at check EMERGENCY RULES June 2, TexReg 2893

10 stations to be tested for CWD. In 2016, those rules were modified (41 TexReg 7501) in response to additional CWD discoveries in the Texas Panhandle and Medina County, creating additional SZs and CZs. In June of 2015 the department received confirmation that a two-year-old white-tailed deer held in a deer breeding facility in Medina County ("index facility") had tested positive for CWD, which was followed by positive test results for white-tailed deer in four additional deer breeding facilities. Subsequent testing confirmed the presence of CWD in additional white-tailed deer at the index facility. The source of the CWD at the index facility has not been determined. In response, the department first adopted emergency rules (40 TexReg 5566) to respond immediately to the threat, then developed interim rules (41 TexReg 815) intended to function through the hunting season until permanent rules could be implemented. Working closely with the Texas Animal Health Commission (TAHC), the regulated community, and key stakeholders, and with the assistance of the Center for Public Policy Dispute Resolution of the University of Texas School of Law, the department developed comprehensive CWD management rules (Subchapter B, Division 2), adopted in 2016 (41 TexReg 5726). The comprehensive CWD management rules address the movement and consequences of movement of live deer under various department-issued permits (Deer Breeder Permits, Triple T Permits, and Deer Management Permits). Concurrently, the department engaged in rulemaking affecting Subchapter B, Division 1 (41 TexReg 7501) to create additional SZs and CZs, including SZ 3, which affects portions of Bandera, Medina, and Uvalde counties. The rules imposed restrictions on the movement to, from, and within SZs and CZs of live deer under various permits issued by the department, but exempted SZ 3 from the applicability of 65.85, concerning Mandatory Check Stations, and 65.88, concerning Deer Carcass Movement Restrictions, which imposes certain restrictions on the movement of dead deer and parts of dead deer from SZs. The department was approached by concerned county officials and landowners in Medina County who committed to organizing a volunteer hunter and landowner effort to provide the department with a sufficient number of valid "not detected" CWD test results, which would allow the department to make an epidemiologically sound determination about the prevalence (if any) of CWD within SZ 3. On January 24, 2017, the department received confirmation that a 1.5-year-old male white-tailed deer harvested by a hunter within SZ 3 in Medina County during the hunting season had tested positive for CWD. The deer was free-ranging and was harvested on a low-fenced property. Prior to the recent detection in a free-ranging white-tailed deer, the CWD discovery in this part of the state occurred in deer breeding facilities and associated release sites, which are required by law to be designed and built to both prevent the free movement of deer and contact with free-ranging deer, which facilitate the control and management of CWD. In addition, the breeding facilities and release sites where CWD was previously discovered have been issued quarantines and/or hold orders by TAHC, which restrict deer movement and require CWD testing at a level equal to or greater than that required in a CZ. The discovery of CWD in free-ranging populations in this part of the state alters risk-management assessments and requires increased restrictions on the movement of live deer and deer carcasses. The department has undertaken an extensive outreach effort to inform the public with respect to the emergency rules and the proposed rules. The rules are adopted on an emergency basis under Parks and Wildlife Code, , which authorizes the department's executive director to adopt emergency rules if there is an immediate danger to a species authorized to be regulated by the department, and under Government Code , which authorizes a state agency to adopt such emergency rules without prior notice or hearing Containment Zones; Restrictions. The areas described in paragraph (1) of this section are CZs. (1) Containment Zones. (A) Containment Zone 1: That portion of the state within the boundaries of a line beginning in Culberson County where U.S. Highway (U.S.) enters from the State of New Mexico; thence southwest along U.S to F.M in Hudspeth County; thence south on F.M to I.H. 10; thence west along I.H. 10 to S.H. 20; thence northwest along S.H. 20 to Farm-to Market Road (F.M.) 1088; thence south along F.M to the Rio Grande; thence northwest along the Rio Grande to the Texas-New Mexico border. (B) Containment Zone 2: That portion of the state within the boundaries of a line beginning where I.H. 40 enters from the State of New Mexico in Deaf Smith County; thence east along I.H. 40 to U.S. 385 in Oldham County; thence north along U.S. 385 to the Oklahoma state line. (C) Containment Zone 3. That portion of the state lying within a line beginning at U. S. 90 in Hondo in Medina County; thence west along U.S. Highway 90 to F.M. 187 in Uvalde County; thence north along F.M. 187 to F. M. 470 in Bandera County; thence east along F.M. 470 to Tarpley in Bandera County; thence south along F.M. 462 to U.S. 90 in Hondo. (D) [(C)] Existing CZs may be modified and additional CZs may be designated as necessary by the executive director as provided in of this title (relating to Powers and Duties of the Executive Director). (2) Restrictions. (A) Except as provided in this section or of this title (relating to Exception), no person within a CZ shall conduct, authorize or cause any activity involving the movement of a susceptible species under a permit issued pursuant to Parks and Wildlife Code, Chapter 43, Subchapter C, E, L, R, or R-1. Such prohibited activity, includes, but is not limited to transportation, introduction, removal, authorizing the transportation, introduction or removal of, or causing the transportation, introduction or removal of a live susceptible species into, out of, or within a CZ. (B) If the department receives an application for a deer breeder permit for a new facility that is to be located within an area designated as a CZ, the department will issue the permit but will not authorize the possession of susceptible species within the facility so long as the CZ designation exists. (C) Deer that escape from a deer breeding facility within a CZ may not be recaptured unless specifically authorized under a hold order or herd plan issued by the Texas Animal Health Commission. (D) A TC 1 deer breeding facility located in a CZ may release breeder deer to immediately adjoining acreage if the release site and the breeding facility share the same ownership, but may not transfer 42 TexReg 2894 June 2, 2017 Texas Register

11 deer to or from any other location. Breeder deer may not be transferred to or from a TC 2 or TC 3 deer breeding facility located within a CZ Surveillance Zones; Restrictions. The areas described in paragraph (1) of this section are SZs. (1) Surveillance Zones. (A) Surveillance Zone 1: That portion of the state lying within a line beginning where U.S. 285 enters from the State of New Mexico in Reeves County; thence southeast along U.S. 285 to R.M. 652; thence west along R.M. 652 to Rustler Springs Rd./FM 3541 in Culberson County; thence south along Rustler Springs Rd./F.M to F.M. 2185; thence south along F.M to Nevel Road; thence west along Nevel Road to County Road 501; thence south along County Road 501 to Weatherby Road; thence south along Weatherby Road to F.M. 2185; thence southwest along to F.M to S.H. 54; thence south on S.H. 54 to U.S. 90; thence south along U.S. 90 to the Culberson County line; thence southwest along the Culberson County line to the Rio Grande River in Hudspeth County; thence north along the Rio Grande to F.M. 1088; thence northeast along F.M to S.H. 20; thence southeast along S.H. 20 to I.H. 10; thence southeast along I.H. 10 to F.M. 1111; thence north on F.M to U.S. 62/180; thence east and north along U.S. 62/180 to the New Mexico state line in Culberson County. (B) Surveillance Zone 2. That portion of the state lying within a line beginning at the New Mexico state line where U.S. 60 enters Texas; thence northeast along U.S. 60 to U.S. 87 in Randall County; thence north along U.S. 87 to I.H. 27; thence north along U.S. 87/I.H. 27 to U.S. 287 in Moore County; thence north along US 287 to the Oklahoma state line. [(C) Surveillance Zone 3. That portion of the state lying within a line beginning at U. S. 90 in Hondo in Medina County; thence west along U.S. Highway 90 to F.M. 187 in Uvalde County; thence north along F.M. 187 to F. M. 470 in Bandera County; thence east along F.M. 470 to Tarpley in Bandera County; thence south along F.M. 462 to U.S. 90 in Hondo.] (C) [(D)] Existing SZs may be modified and additional SZs may be designated as necessary by the executive director as provided in of this title (relating to Powers and Duties of the Executive Director). (2) Restrictions. (A) Except as provided in of this title (relating to Exception) and subparagraph (B) of this paragraph, no person within a SZ may conduct, authorize or cause any activity involving the movement of a susceptible species, into, out of, or within a SZ under a permit issued pursuant to Parks and Wildlife Code, Chapter 43, Subchapter C, E, L, R, or R-1. Such prohibited activity, includes, but is not limited to transportation, introduction, removal, authorizing the transportation, introduction or removal, or causing the transportation, introduction or removal of a live susceptible species into, out of, or within a SZ. (B) Breeder Deer. (i) Except as provided in Division 2 of this subchapter, a breeding facility that is within a SZ and designated as a: (I) TC 1 breeding facility may: (-a-) transfer to or receive breeder deer from any other deer breeding facility in this state; and (-b-) transfer breeder deer in this state for purposes of liberation, including to release sites within the SZ. (II) TC 2 breeding facility: (-a-) may receive deer from any facility in the state that is authorized to transfer deer; (-b-) may transfer deer to a breeding facility or release site that is within the same SZ; and (-c-) is prohibited from transferring deer to any facility outside of the SZ. (ii) Deer that escape from a breeding facility within a SZ may not be recaptured unless specifically authorized under a hold order or herd plan issued by the Texas Animal Health Commission. (C) Permits to Transplant Game Animals and Game Birds (Triple T permit). The department may authorize the release of susceptible species in a SZ under the provisions of a Triple T permit issued by the department under the authority of Parks and Wildlife Code, Chapter 43, Subchapter E and the provisions of Subchapter C of this chapter, but the department will not authorize the trapping of deer within a SZ for purposes of a Triple T permit. (D) Deer Management Permit (DMP). The department may issue a DMP for a facility in a SZ; however, any breeder deer introduced to a DMP facility must be released and may not be transferred to any deer breeding facility. The agency certifies that legal counsel has reviewed the emergency adoption and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 22, TRD Robert D. Sweeney, Jr. Acting General Counsel Texas Parks and Wildlife Department Effective date: May 22, 2017 Expiration date: July 24, 2017 For further information, please call: (512) EMERGENCY RULES June 2, TexReg 2895

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13 TITLE 13. CULTURAL RESOURCES PART 7. STATE PRESERVATION BOARD CHAPTER 111. RULES AND REGULATIONS OF THE BOARD 13 TAC The State Preservation Board (hereinafter referred to as the "Board") proposes new of Title 13, Part 7, Chapter 111 of the Texas Administrative Code concerning procedures for contracts requiring enhanced contract or performance monitoring. Senate Bill 20 (84th Legislature, Regular Session, 2015) created new Government Code (c) which requires the Board by rule establish a procedure to identify each contract that requires enhanced contract or performance monitoring and submit information on the contract to the agency's governing body. New describes the contracts that will be reported to the Board members. Cynthia Provine, Chief Financial Officer, has determined that for the first five-year period the new rule is in effect there will be no fiscal implications for state or local government as a result of administering this rule. Rod Welsh, Executive Director, State Preservation Board, has determined that for each year of the first five year period the rule is in effect there will be no effect on small or micro businesses and there is no anticipated economic cost to persons who are required to comply with the proposed sections. Anticipated public benefit will be enhanced focus and accountability for monitoring and management of agency's contracts. Comments on the proposed new rule may be submitted in writing to Chris Currens, Director of Special Projects, P.O. Box 13286, Austin, Texas Comments may also be submitted electronically to Chris.Currens@tspb.texas.gov or faxed to (512) Comments must be submitted no later than 30 days from the date these proposed rules are published in the Texas Register. The new rule is proposed under Texas Government Code (b) which authorizes the board to adopt rules concerning the buildings, their contents, and their grounds. No other statutes, articles or codes are affected by the proposal Procedure for Contracts Requiring Enhanced Contract or Performance Monitoring. (a) Contracts for the purchase or 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 reported to the Board. (c) Contracts will be monitored in accordance with policies and procedures in the SPB contract management handbook. (d) The Board will be notified, as appropriate, of any serious issue or risk that is identified with respect to a contract monitored under this rule. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD Rod Welsh Executive Director State Preservation Board Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TITLE 19. EDUCATION PART 2. TEXAS EDUCATION AGENCY CHAPTER 97. PLANNING AND ACCOUNTABILITY SUBCHAPTER AA. ACCOUNTABILITY AND PERFORMANCE MONITORING 19 TAC (Editor's note: In accordance with Texas Government Code, , which permits the omission of material which is "cumbersome, expensive, or otherwise inexpedient," the figure in 19 TAC is not included in the print version of the Texas Register. The figure is available in the on-line version of the June 2, 2017, issue of the Texas Register.) The Texas Education Agency (TEA) proposes an amendment to , concerning accountability and performance monitoring. The proposed amendment would adopt the 2017 Performance-Based Monitoring Analysis System (PBMAS) Manual. Earlier versions of the manual will remain in effect with respect to the school years for which they were developed. House Bill 3459, 78th Texas Legislature, 2003, added the TEC, 7.027, limiting and redirecting monitoring done by the TEA to that required to ensure school district and charter school compliance with federal law and regulations; financial accountability, PROPOSED RULES June 2, TexReg 2897

14 including compliance with grant requirements; and data integrity for purposes of the Public Education Information Management System and accountability under Texas Education Code (TEC), Chapter 39. Legislation passed in 2005 renumbered TEC, 7.027, to TEC, To meet this monitoring requirement, the agency developed the PBMAS, which is used in conjunction with other evaluation systems, to monitor performance and program effectiveness of special programs in school districts and charter schools. The TEA has adopted its PBMAS Manual in rule since The PBMAS is a dynamic system that evolves over time, so the specific criteria and calculations for monitoring performance and program effectiveness may differ from year to year. The intent is to update 19 TAC annually to refer to the most recently published PBMAS Manual. The proposed amendment to 19 TAC would update the current rule by adopting the 2017 PBMAS Manual, which describes the specific criteria and calculations that will be used to assign 2017 PBMAS performance levels (PLs). The 2017 PBMAS includes several key changes from the 2016 system. Revisions to the State of Texas Assessments of Academic Readiness (STAAR ) are reflected in the 2017 PBMAS with the final administrations of the STAAR A and STAAR L in December In addition, the availability of an additional year's data enables the Special Analysis component to be reinstated for many of the STAAR performance indicators and for Required Improvement (RI) to be available for the English language arts (ELA) end-of-course (EOC) indicators. RI is also available for BE/ESL Indicator #7 (LEP Graduation Rate). This graduation rate indicator was revised in the 2016 PBMAS to reflect graduation rates based on students identified as English language learners (ELLs) at any time while attending Grades 9-12 in a Texas public school rather than determined only based on students identified as ELLs in their last year in a Texas public school. Additionally, the PL cut points for the two Texas English Language Proficiency Assessment System (TELPAS) indicators are aligned through minor adjustments to BE/ESL Indicator #8 (TELPAS Reading Beginning Proficiency Level Rate). A PL 4 designation will be added to CTE Indicator #2(iv) (CTE LEP STAAR EOC Passing Rate - ELA) and CTE Indicator #4(iv) (CTE SPED STAAR EOC Passing Rate - ELA). These changes align the CTE LEP and CTE SPED STAAR EOC ELA indicators with the BE/ESL and SPED STAAR EOC ELA indicators that already include a PL 4 designation. For the 2017 PBMAS, each course listed in Appendix A of the 2016 PBMAS Manual was evaluated based on information from the Office of Career, Technical, and Adult Education and the National Alliance for Partnerships in Equity to determine if the course should still be considered nontraditional for males or females. Based on that information, approximately 30 courses were deleted from the list and 40 courses were added. Appendix A in this manual reflects the updated course lists for males and females. Because the changes are significant, CTE Indicator #7 (CTE Nontraditional Course Completion Rate - Males) and CTE Indicator #8 (CTE Nontraditional Course Completion Rate - Females) are assigned PLs of Report Only for the 2017 PBMAS. Since 2013, TEA has been implementing a transition plan for the PBMAS SPED program area in anticipation of new federal regulations under 34 Code of Federal Regulations Part 300, which were finalized and issued on December 19, These regulations require 98 separate indicators to evaluate districts' data regarding (a) special education representation [49 indicators]; (b) disciplinary removals [35 indicators]; and (c) educational placements [14 indicators]. These indicators will be used to assign PLs of significant disproportionality based on seven racial/ethnic groups and six disability categories, as required. The federal regulations also require thresholds be set to determine which districts will be identified for significant disproportionality. As with all PBMAS PL cut points, the 2017 PBMAS thresholds for these new indicators were set with advice from stakeholder groups. Because the PBMAS representation and educational placements indicators were already well aligned with federal requirements and had included preliminary calculations of disproportionality, the expanded federal requirements pertaining to those two components can immediately be incorporated into SPED Indicator #11 (SPED Representation - Ages 3-21), SPED Indicator #7 (SPED Regular Class <40% Rate - Ages 6-21), and a new SPED Indicator #8 (SPED Separate Settings Rate - Ages 6-21). The three PBMAS discipline indicators, however, will need to be replaced with the 35 discipline indicators required to implement the new federal regulations. There is insufficient time for those indicators to be developed and included with the 2017 PBMAS. Therefore, the discipline indicators will be integrated into the 2018 PBMAS. The proposed amendment would establish in rule the PBMAS procedures for assigning the 2017 PBMAS PLs. Applicable procedures will be adopted each year as annual versions of the PB- MAS Manual are published. The proposed amendment would have no locally maintained paperwork requirements. FISCAL NOTE. Penny Schwinn, associate commissioner for academics, has determined that for the first five-year period the amendment is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the amendment. There is no effect on local economy for the first five years that the proposed amendment is in effect; therefore, no local employment impact statement is required under Texas Government Code, PUBLIC BENEFIT/COST NOTE. Ms. Schwinn has determined that for each year of the first five years the amendment is in effect the public benefit anticipated as a result of enforcing the amendment will be continuing to inform the public of the existence of annual manuals specifying PBMAS procedures by including this rule in the Texas Administrative Code. There is no anticipated economic cost to persons who are required to comply with the proposed amendment. ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS FOR SMALL BUSINESSES AND MICROBUSINESSES. There is no direct adverse economic impact for small businesses and microbusinesses; therefore, no regulatory flexibility analysis, specified in Texas Government Code, , is required. REQUEST FOR PUBLIC COMMENT. The public comment period on the proposal begins June 2, 2017, and ends July 3, Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas Comments may also be submitted electronically to rules@tea.texas.gov. A public hearing on the proposed amendment will be held from 8:30 a.m. until the conclusion of testimony or not later than 11:30 a.m. on June 16, 2017, in Room 1-111, William B. Travis Building, TexReg 2898 June 2, 2017 Texas Register

15 North Congress Avenue, Austin, Texas Questions about the hearing should be directed to the Division of Performance Reporting at (512) STATUTORY AUTHORITY. The amendment is proposed under the Texas Education Code (TEC), 7.028, which authorizes the agency to monitor as necessary to ensure school district and charter school compliance with state and federal law and regulations; TEC, (5), which authorizes the agency to effectively monitor all local educational agencies (LEAs) to ensure that rules relating to the delivery of services to children with disabilities are applied in a consistent and uniform manner, to ensure that LEAs are complying with those rules, and to ensure that specific reports filed by LEAs are accurate and complete; TEC, (a), which authorizes the agency to adopt and implement a comprehensive system for monitoring LEA compliance with federal and state laws relating to special education, including ongoing analysis of LEA special education data; TEC, , which authorizes the agency to monitor the effectiveness of LEA programs concerning students with limited English proficiency; TEC, and , which authorize the commissioner to determine criteria for accreditation statuses and to determine the accreditation status of each school district and open-enrollment charter school; TEC, (b-1), which authorizes the agency to consider the effectiveness of district programs for special populations, including career and technical education programs, when determining accreditation statuses; TEC, , which authorize the commissioner to adopt procedures relating to onsite and special accreditation investigations; and TEC, and , which authorize the commissioner to implement procedures to impose interventions and sanctions for school districts and open-enrollment charter schools. CROSS REFERENCE TO STATUTE. The amendment implements the Texas Education Code, 7.028, (5), (a), , , , (b-1), , , and Performance-Based Monitoring Analysis System. (a) In accordance with Texas Education Code, 7.028(a), the purpose of the Performance-Based Monitoring Analysis System (PB- MAS) is to report annually on the performance of school districts and charter schools in selected program areas: bilingual education/english as a Second Language, career and technical education, special education, and certain Title programs under federal law. The performance of a school district or charter school is reported through indicators of student performance and program effectiveness and corresponding performance levels established by the commissioner of education. (b) The assignment of performance levels for school districts and charter schools in the 2017 [2016] PBMAS is based on specific criteria and calculations, which are described in the 2017 [2016] PBMAS Manual provided in this subsection. Figure: 19 TAC (b) [Figure: 19 TAC (b)] (c) The specific criteria and calculations used in the PBMAS are established annually by the commissioner of education and communicated to all school districts and charter schools. (d) The specific criteria and calculations used in the annual PBMAS manual adopted for prior school years remain in effect for all purposes, including accountability and performance monitoring, data standards, and audits, with respect to those school years. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 22, TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TITLE 22. EXAMINING BOARDS PART 22. TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY CHAPTER 507. EMPLOYEES OF THE BOARD 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 507.2, concerning Staff. Background, Justification and Summary The amendment to has the rule more closely track the language in Chapter 901 of the Occupations Code. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a rule that tracks the statutory language found in the Act. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, PROPOSED RULES June 2, TexReg 2899

16 The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Staff. (a) The executive director shall employ such staff as is authorized and necessary for the conduct of the board's affairs. Applications for employment by the board shall notify prospective employees that no employee of the board may be employed in an executive, administrative or professional capacity, as that phrase is used for purposes of establishing an exemption to the overtime provisions of the Fair Labor Standards Act, and its subsequent amendments, if: (1) the prospective employee is acting in the capacity of an officer, executive board or executive committee member, employee, or paid consultant of a Texas trade association in the field of public accountancy; or (2) the prospective employee's spouse is acting in the capacity of an officer, executive board or executive committee member, manager or paid consultant of a Texas trade association in the field of public accountancy; or (3) be related within the second degree of affinity or within the second degree of consanguinity to a person who is an officer, employee, or paid consultant of a trade association in [of] the field [profession] of public accountancy. (b) Each employee shall be hired without regard to race, color, handicap, sex, religion, age, or national origin. The executive director shall report at least annually to the board on compliance with this policy. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 507.3, concerning Independent Contractors. Background, Justification and Summary The amendment to adds "consultants" to those that the Board may employ to perform services for the Board and adds references to the statutes that give the Board the authority to do so. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be clarification of the rule's application. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment. 42 TexReg 2900 June 2, 2017 Texas Register

17 Independent Contractors. The board may, pursuant to (c) of the Act (relating to General Powers and Duties of Board) and of the Texas Government Code, [from time to time] employ independent contractors, including investigators and consultants, to perform services prescribed by the board. The basis for compensation of independent contractors shall be stated in the contract of employment. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 507.4, concerning Confidentiality. Background, Justification and Summary The amendment to notices that advisory committee members are required to not disclose confidential information and cites the relevant section of the Texas Public Accountancy Act. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be clarification of the rule's application. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Confidentiality. (a) Members of the board, advisory committee members, the executive director, members of board staff, [and] independent contractors and consultants retained by the board shall not disclose any confidential information which comes to their attention, except as may be required by law. (b) All complaints, investigation files, investigation reports, and other investigative information in the possession of, received or gathered by the board is confidential and any employee, agent, or member of the board may not disclose the information contained in these files except to another governmental, regulatory or law enforcement agency engaged in an enforcement action and as provided for in of the Act (relating to Availability and Confidentiality of Certain Board Files). The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 507.7, concerning Eligibility. Background, Justification and Summary The amendment to deletes subsection (g) so that it may be relocated to Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no PROPOSED RULES June 2, TexReg 2901

18 estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will greater accessibility to the applicable rule. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Eligibility. (a) To be eligible for consideration for training and education assistance, an employee must: (1) be in good standing with the board; (2) meet and continue to meet all performance expectations; (3) have at least 12 months of service with the board; and (4) seek enrollment and participation in a field of study that relates to assigned or prospective job duties, a professional development requirement, a GED program or a higher education degree plan. (b) To maintain eligibility in a degree program an employee must be enrolled in an institution of higher education in a course of instruction leading toward a degree and maintain a passing grade point average. (c) To maintain eligibility in a GED program an employee must be enrolled each semester in a GED program and maintain a passing grade point average. (d) The employee must attend and satisfactorily complete the education and training, including passing tests or other types of performance measures where required. (e) Each semester an employee must provide grade reports to verify that full credit was received for courses taken. (f) An employee must provide fee receipts for courses to be taken and must promptly report outside funds such as grants, scholarships or other financial aid received. The executive director may adjust the assistance provided to the employee at any time for any reason. [(g) Any employee who has received assistance under this program shall repay the entire amount of the assistance received if the employee voluntarily leaves the board's employ within six months of concluding an educational program for which assistance was granted.] The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 507.8, concerning Procedures. Background, Justification and Summary The amendment to adds language relocated from and adds failure to regularly attend classes as a reason for possible termination of financial assistance including repayment of all funds. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to notify beneficiaries of the program of the need to repay benefits should they voluntarily leave agency employment within six months of the completion of the training. 42 TexReg 2902 June 2, 2017 Texas Register

19 There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Procedures. (a) The executive director may require a written agreement between the board and the employee describing the terms and conditions of the education or training assistance to be provided by the board. The board may impose such terms and conditions as may be reasonable and appropriate, including but not limited to, specifying the circumstances under which the assistance may be terminated and the employee may be required to repay the amount of assistance. (b) The executive director will reconsider each employee's participation in the Education Assistance Program each semester. (c) Assistance may be terminated and the employee may be required to repay all funds received from the institution if the employee: (1) withdraws from the institution or fails to regularly attend the classes; (2) is removed or prohibited from attending the institution; (3) fails to comply with one or more terms of the assistance agreement, including but not limited to, additional terms concerning termination and repayment of assistance; or (4) is terminated by the board during the duration of the assistance agreement. (d) Any employee who has received assistance under this program shall repay the entire amount of the assistance received if the employee voluntarily leaves the board's employ within six months of concluding an educational program for which assistance was granted. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) CHAPTER 509. RULEMAKING PROCEDURES 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 509.2, concerning Suspension of Rules. Background, Justification and Summary The amendment to clarifies the Board s emergency rulemaking procedures. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a better understanding of the board s emergency rulemaking authority. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, PROPOSED RULES June 2, TexReg 2903

20 The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Emergency Rulemaking [Suspension of Rules]. If a state or federal law so requires the board to do so or if there is [In any case in which] an imminent peril to the public health, safety or welfare [or a requirement of a state or federal law so requires], the board may adopt, revise, or repeal board rules pursuant to of the Texas Government Code [suspend the operation of these sections to the extent authorized by law, stating its reasons therefore in writing]. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 509.6, concerning Rulemaking Procedures. Background, Justification and Summary The amendment to clarifies the Board's rulemaking process to emphasize the Board's intent for the process to be a public process. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a better understanding of the Board's public rulemaking process. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Rulemaking Procedures. (a) Notice of a proposed new rule or amendment of any existing rule shall be made in accordance with the provisions of and of the Administrative Procedure Act. (b) A request for a public hearing to provide comments on a proposed new rule or amendment to an existing rule must be received in the offices of the board no later than 5:00 p.m. of the thirtieth calendar day prior to the board meeting scheduled to consider the adoption of the proposed rule unless the board announces a different filing date. (c) A person wishing to testify at a public hearing to provide comments on a proposed new rule or amendment to an existing rule must file a written copy of the proposed testimony in the offices of the board by no later than 5:00 p.m. of the fifth calendar day prior to the public hearing unless the board announces a different filing date. 42 TexReg 2904 June 2, 2017 Texas Register

21 (d) The [It is the] board's policy is to promote a public rulemaking process but the board may employ [utilize] negotiated rulemaking pursuant to the Negotiated Rulemaking Act when appropriate. (e) The executive director shall designate a board employee as the board's negotiated rulemaking director to implement the provisions of the Negotiated Rulemaking Act, Chapter 2008 of the Texas Government Code, and perform the following functions: (1) maintain necessary agency records of negotiated rulemaking procedures while maintaining the confidentiality of participants; (2) establish a method of choosing conveners and facilitators as defined by the Negotiated Rulemaking Act, Chapter 2008 of the Texas Government Code; (3) establish a method of convening negotiated rules committees; (4) provide information about the negotiated rulemaking process to agency employees, potential users, and users of the negotiated rulemaking program; (5) arrange training or education necessary to implement the negotiated rulemaking process; and (6) establish a system to evaluate the negotiated rulemaking program, conveners, facilitators, and committees. (f) The board or the rules committee may request the negotiated rulemaking director to institute negotiated rulemaking proceedings on a specified subject. Upon receipt of such a request, the negotiated rulemaking director shall institute the negotiated rulemaking process pursuant to Chapter 2008 of the Texas Government Code. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) CHAPTER 513. REGISTRATION SUBCHAPTER B. REGISTRATION OF CPA FIRMS 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to , concerning Death of a Sole Proprietor. Background, Justification and Summary The amendment to adds "incapacitation" of a sole proprietor as a justification for the Executive Director to authorize the continued operation of a sole proprietorship, as well as adding "or Incapacitation" to the rule title. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to provide for the survivability of a CPA firm on an interim basis. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Death or Incapacitation of a Sole Proprietor. Upon written authorization from the executive director, a sole proprietorship may continue to operate for a period of up to 15 months following the death or incapacitation of the sole proprietor. The executive director, subject to ratification at the next board meeting, may permit the continued operation of the sole proprietorship when he has been provided with: (1) In the event of the death of the sole proprietor: PROPOSED RULES June 2, TexReg 2905

22 (A) a certified copy of the sole proprietor's death certificate; (B) a copy of the power of attorney from the sole proprietor's executor, administrator, or heir along with a document from the executor, administrator or heir designating a Texas CPA in good standing with the board with the authority and intention to manage the sole proprietorship; and (C) written evidence that a disruption in the continuation of the sole proprietorship would jeopardize the survivability of the firm. (2) In the event of the incapacitation of the sole proprietor: (A) a notarized affidavit from the sole proprietor's physician stating that the sole proprietor, because of a severe ongoing physical, mental impairment or medical condition is not able to perform the day-to-day tasks necessary for the continued operation of the firm; (B) a copy of a power of attorney or a court ordered guardianship along with a document from the holder of the power of attorney or the guardian designating a Texas CPA in good standing with the board with the authority and intention to manage the sole proprietorship; and (C) written evidence that a disruption of the continuation of the sole proprietorship would jeopardize the survivability of the firm. [(1) a certified copy of the sole proprietor's death certificate;] [(2) a copy of the power of attorney from the sole proprietor's executor, administrator, or heir designating a certificate or registration holder in good standing with the board to manage the sole proprietorship on behalf of such party. When such party is not a certificate or registration holder, the power of attorney must authorize a certificate or registration holder to manage the sole proprietorship on behalf of such party; and] [(3) written evidence that a disruption in the continuation of the sole proprietorship would jeopardize the survivability of the firm.] The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) CHAPTER 521. FEE SCHEDULE 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 521.1, concerning Individual License Fees. Background, Justification and Summary The amendment to adds the word "annual" in subsection (a) as well as in the title. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be clarification that the Board's fees will be annually established by the Board. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Annual Individual License Fees. (a) The annual fee for a license issued to an individual not in retired or disabled status shall be established by the board on an annual basis. The initial license fee will be prorated for those months during which the license is valid. 42 TexReg 2906 June 2, 2017 Texas Register

23 (b) The legislature has directed the board to collect from each licensee who is neither retired nor disabled a $10.00 annual fee for the benefit of the Scholarship Trust Fund for fifth-year accounting students. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 521.3, concerning Fee For Certification by Reciprocity. Background, Justification and Summary The amendment to no longer lists a specific dollar amount but clarifies that the fees will be established by the Board. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be clarification that the Board's fees will be regularly established by the Board. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Fee for Certification by Reciprocity. (a) The fee for processing the issuance of a certificate as a CPA by reciprocity will be established by the board [is $100.00]. (b) If the application is not approved, the processing fee paid will not be refunded. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy (Board) proposes the repeal of 521.4, concerning Registration Fee for Foreign Accountants. Background, Justification and Summary The repeal of is necessary because the rule is no longer applicable. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed repeal is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the repeal. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the repeal is in effect the public benefits expected as a result of adoption of the proposed repeal will be an understanding that foreign PROPOSED RULES June 2, TexReg 2907

24 applicants may be licensed under the board's reciprocity rules and not board rule There will be no probable economic cost to persons required to comply with the repeal and a Local Employment Impact Statement is not required because the proposed repeal will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed repeal will not have an adverse economic effect on small businesses or micro-businesses because the repeal does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed repeal will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The repeal is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed repeal Registration Fee for Foreign Accountants. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 521.6, concerning Duplication and Other Charges and Refund of Board Fees. Background, Justification and Summary The amendment to clarifies that statutes by which the Board follows in charging fees for reproducing Board records will be in accordance with the Public Information Act and the rules promulgated by the Office of Attorney General. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a clearer understanding of the fees associated with reproducing Board records. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Duplication and Other Charges and Refund of Board Fees. 42 TexReg 2908 June 2, 2017 Texas Register

25 (a) The board's charges for its costs of the reproduction of requested board records will be in accordance with of the Texas Government Code (Public Information Act) and calculated pursuant to the rules of the Office of the Attorney General (Title 1, Part 3, Chapter 70 of the Texas Administrative Code). [Any costs incurred by the board upon application for or demand of any document, record, or action of the board which the board is required to provide by law or by these rules shall be recovered by the board from the individual or entity making the request or demand. The costs for the staff time incurred in locating, compiling, manipulating data and reproducing public information as well as redacting or obscuring confidential information requested shall be based upon the actual salary of the agency staff responding to the request. Any matter deemed confidential by statute, attorney general opinion, or court order is not subject to release. The charge for requesting photocopied reproductions of any public record of the board will be the charges established by the Office of the Attorney General. The following guidelines will apply for the cost of providing mailing lists.] [(1) Personnel charges will be the actual salary rate of attributable staff plus fringe benefits.] [(2) Overhead charges will be determined on an actual cost recovery basis.] (b) The board may waive these charges if there is a public benefit. The executive director is authorized to determine whether a public benefit exists on a case by case basis. (c) Sales tax, if required, will be charged on publications including, but not limited to, publications containing information on the UCPAE and requirements for certification and licensure. (d) Payment will be made by cash, check, or money order. No refund of any charges or fees paid to the board will be made for less than $5.00 of monies paid by mistake in excess of the correct fee, unless specifically requested in writing. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call:(512) TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to , concerning Fee for a Replacement Certificate. Background, Justification and Summary The amendment to no longer lists a specific dollar amount but clarifies that the fees will be established by the Board. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be clarification that the Board s fees will be established by the Board. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Fee for a Replacement Certificate. The fee for the replacement of a certificate will be established by the board [not exceed $50.00]. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD PROPOSED RULES June 2, TexReg 2909

26 J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to , concerning Firm License Fees. Background, Justification and Summary The amendment to replaces the word "penalty" with "late fee." Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to clarify that the statute establishes that it is a late fee and not a penalty. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Firm License Fees. (a) The fee for a firm license shall be established by the board on an annual basis for each office of the firm registered in Texas plus the fee required by subsection (b) of this section. (b) A firm will pay an additional fee, established by the board on an annual basis, based on the number of CPAs employed at the firm office registered in Texas plus the number of non-cpa owners of the firm office registered in Texas. (c) The firm license fees provided for in subsections (a) and (b) of this section will be prescribed in the board's firm registration and renewal form. (d) A firm "employs" a CPA within the meaning of this rule when: (1) a CPA is a partner, owner, member, shareholder, or employee of the firm; (2) a CPA works at the firm, either temporarily or long term, under a lease agreement or contract with any other entity, including but not limited to personnel staffing agencies or service companies affiliated with the firm; (3) a CPA works at the firm on anything less than a full time basis; (4) a CPA has any of the relationships described in paragraphs (1) - (3) of this subsection with an entity that is a partner, owner, member, or shareholder of the firm; or (5) a CPA has any of the relationships described in paragraphs (1) - (3) of this subsection with an entity affiliated with the firm and that CPA participates in performing professional services for clients of the firm. (e) Each firm shall certify to the board the highest number of CPAs it employs within the meaning of this section during the 30 days prior to filing its application. Each CPA should be counted only once, even if he or she has more than one relationship as described in subsection (d)(1) - (5) of this section. (f) Firm license fees will not be prorated or refunded. (g) A firm whose license has been expired for 90 days or less may renew the license by paying the board a late fee [penalty] established by the board on an annual basis in addition to the license fee required to be paid under subsections (a) and (b) of this section. (h) A firm whose license has been expired for more than 90 days may renew the license by paying the board a late fee [penalty] established by the board on an annual basis in addition to the license fee required to be paid under subsections (a) and (b) of this section. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD TexReg 2910 June 2, 2017 Texas Register

27 J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) CHAPTER 523. CONTINUING PROFES- SIONAL EDUCATION SUBCHAPTER D. STANDARDS FOR CONTINUING PROFESSIONAL EDUCATION PROGRAMS AND RULES FOR SPONSORS 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to , concerning Program Standards. Background, Justification and Summary The amendment to changes the requirement from five review questions for each CPE credit to three review questions for each CPE credit, to mirror the Uniform Accountancy Act and its Model Rules. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be rules that more closely align with the rules of the Uniform Accountancy Act and its Model Rules. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Program Standards. (a) Potential participants should be informed in advance of course content, learning objectives, prerequisites, and recommended credits so they can determine whether they are qualified to participate in and benefit from the program. The stated learning objectives should clearly communicate the specific areas of knowledge that will be covered. If there are no prerequisites for the course, a statement to this effect must be made. (b) The program developer must organize the program around the stated learning objectives and must retain a copy of the final program, including electronic media, in accordance with (b) of this chapter (relating to Sponsor's Record). The final program must contain sufficient documentation to support the number of CPE credits granted. The course materials must be periodically reviewed to assure that they are accurate and consistent with currently accepted standards relating to the program's subject matter. The program developer should provide the instructor with separate materials that emphasize sections of the course that need reinforcement, if appropriate. (c) Instructors must be qualified both with respect to program content and teaching methods used. Sponsors shall evaluate the performance of instructors at the conclusion of each program to determine their suitability for continuing to serve as instructors. (d) All programs must provide for some means to evaluate both the competence of the instructor and the course material. Refer to of this chapter (relating to Evaluation). (e) Self-study programs must conform to the requirements outlined in (c)(2) of this chapter (relating to CPE Purpose and Definitions). (1) Program must include at least three [five] review questions for each CPE credit, or two review questions if the program is marketed for one-half CPE credits[, at the end of each learning objective (section/chapter)] to allow the participant the opportunity to understand the material. Evaluative feedback must be provided for each incorrect response. [At least five review questions per CPE credit must be included.] (2) To provide evidence of satisfactory completion of the course, CPE sponsors must require participants to successfully complete a final exam with a passing grade of at least 70%. The final exam must have at least five questions for each CPE credit granted and no more than 25% of the questions be "true/false" in nature. (3) Program or course expiration date. Course documentation must include an expiration date (the time by which the participant PROPOSED RULES June 2, TexReg 2911

28 must complete the final exam). The expiration date should be no longer than one year from the date of purchase. (f) Nano programs must use instructional methods that clearly define a minimum of one learning objective, guide the participant through a program of learning, and provide evidence of a participant's satisfactory completion of the program. Satisfactory completion of the program must be confirmed at the conclusion of the program by passing a final exam. (1) To provide evidence of satisfactory completion of the course, CPE sponsors must require participants to successfully complete a final exam with a passing grade of 100 percent before issuing CPE credit for the course. The final exam may contain questions of varying format (for example, multiple choice, rank order, and matching). Only two questions must be included on the final exam. "True or false" questions are not permissible on the final exam. If the participant fails the final exam CPE credit will not be granted. The participant may re-take the program and the number of re-takes permitted is at the sponsor's discretion. (2) Program or course expiration date. Course documentation must include an expiration date. The expiration date is no longer than one year from the date of purchase. (3) Based on materials developed for instructional use, Nano programs must be based on materials specifically developed for instructional use and not on third-party materials. Nano learning programs requiring only the reading of general professional literature, IRS publications, or reference manuals followed by an assessment will not be acceptable. (g) Blended programs must use instructional methods that clearly define learning objectives and guide the participant through a program of learning. Pre-program, post-program, and homework assignments should enhance the learning program experience and must relate to the defined learning objectives of the program. (1) Blended programs include different learning or instructional methods (for example, lectures, discussion, guided practice, reading, games, case studies, and simulation); different delivery methods (group live, group Internet based, nano learning, or self study); and/or different levels of guidance (for example, individual, instructor or subject matter expert led, or group and social learning). To guide participants through the learning process, CPE program sponsors must provide clear instructions and information to participants that summarize the different components of the program and what must be completed or achieved during each component in order to qualify for CPE credits. The CPE program sponsor must document the process and components of the course progression and completion of components by the participants. (2) To provide evidence of satisfactory completion of sections of the course that are not "live" (such as nano or self-study) CPE sponsors must require participants to successfully complete an exam with a passing grade appropriate to the delivery method (i.e. 70% for self-study, 100% for nano). (h) Sponsors are responsible for ensuring the participants register their attendance during the program. Sponsors are responsible for assigning the appropriate number of CPE credits for participants, including reduced CPE credits for those participants who arrive late or leave early. Refer to of this chapter (relating to Program Time Credit Measurement for Sponsors). (i) Sponsors must comply with all CPE rules including of this chapter. (j) Sponsors awarding CPE credit for a board-approved ethics course defined in of this chapter (relating to Board Approval of Ethics Course Content) must do so through a board contracted instructor as defined in of this chapter (relating to Board Contracted Ethics Instructors). The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) CHAPTER 525. CRIMINAL BACKGROUND INVESTIGATIONS 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 525.3, concerning Criminal Background Checks. Background, Justification, and Summary The amendment to adds a confidentiality statement regarding criminal history record information and makes a grammatical correction. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a better understanding of the Board's confidential record keeping guidelines. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to 42 TexReg 2912 June 2, 2017 Texas Register

29 his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, , which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Criminal Background Checks. (a) The board may require a Federal Bureau of Investigation criminal history records background check on [all] applicants to become licensed, registered, or certified in Texas at any stage in the application process. (b) Applicants required to provide the Federal Bureau of Investigation criminal history records background check will be responsible for the cost of searching the database. (c) Applicants will be provided with information on how to obtain the Federal Bureau of Investigation criminal history records background check through the Texas Department of Public Safety, and the Texas Department of Public Safety will provide the records directly to the board. (d) Criminal history record information obtained from the Texas Department of Public Safety and/or the Federal Bureau of Investigation will be maintained pursuant to of the Texas Government Code in order to protect the confidentiality of the information. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on May 19, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) CHAPTER 526. BOARD OPINIONS 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 526.1, concerning Issuance of Opinions. Background, Justification and Summary The amendment to clarifies that the Board will determine whether an opinion will be issued or not. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a better understanding of the issuance of Board opinions. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on July 3, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, , which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Issuance of Opinions. PROPOSED RULES June 2, TexReg 2913

30 The board may issue opinions upon the written request of any person. These opinions shall be based on actual facts specific to the situation and submitted in accordance with board instructions and shall be limited to areas within the board's jurisdiction. The board may determine not to issue an opinion. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: July 2, 2017 For further information, please call: (512) Filed with the Office of the Secretary of State on May 19, TexReg 2914 June 2, 2017 Texas Register

31 TITLE 16. ECONOMIC REGULATION PART 2. PUBLIC UTILITY COMMISSION OF TEXAS CHAPTER 22. PROCEDURAL RULES SUBCHAPTER D. NOTICE 16 TAC The Public Utility Commission of Texas (commission) adopts amendments to 22.52, relating to notice in licensing proceedings without changes to the proposed text as published in the February 24, 2017, issue of the Texas Register (42 TexReg 737). These amendments add the United States Department of Defense as an entity that is required to be notified of electric licensing proceedings under These amendments are adopted under Project Number The commission received comments on the proposed amendments from CenterPoint Energy Houston Electric, LLC (Center- Point). The commission received no reply comments. No public hearing was requested. CenterPoint expressed support for the proposed amendments to the notice provisions of 22.52(a)(2) and (4). Commission response The commission appreciates CenterPoint's support for the proposed amendments, and adopts the amendments as proposed. These amendments are adopted under the Public Utility Regulatory Act, Tex. Util. Code Ann and (West 2016) (PURA), which provide the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules of practice and procedure; and specifically, PURA (a)(1), which requires the commission to give interested parties notice of applications for certificates of convenience and necessity. Cross reference to statutes: Public Utility Regulatory Act , , and (a)(1). The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 19, TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Effective date: June 8, 2017 Proposal publication date: February 24, 2017 For further information, please call: (512) TITLE 19. EDUCATION PART 2. TEXAS EDUCATION AGENCY CHAPTER 61. SCHOOL DISTRICTS SUBCHAPTER BB. COMMISSIONER'S RULES ON REPORTING REQUIREMENTS 19 TAC The Texas Education Agency (TEA) adopts an amendment to , concerning community and student engagement. The amendment is adopted with changes to the proposed text as published in the March 31, 2017, issue of the Texas Register (42 TexReg 1699). The adopted amendment addresses the inclusion of community and student engagement ratings in the state academic accountability system as required by the Texas Education Code (TEC), , added by House Bill (HB) 2804, 84th Texas Legislature, REASONED JUSTIFICATION. HB 5, 83rd Texas Legislature, 2013, added the TEC, , which establishes community and student engagement ratings and requires districts to report to TEA self-assigned district and campus ratings in eight specific categories. The TEA adopted 19 TAC effective June 25, 2014, to provide instructions for reporting these ratings and the record of compliance with statutory reporting and policy to the TEA. HB 2804, 84th Texas Legislature, 2015, added the TEC, , which requires that community and student engagement ratings be part of the state academic accountability system. The adopted amendment to 19 TAC implements the requirements of the TEC, , by adding new subsections (j) and (k) to provide guidance to districts regarding including community and student engagement ratings in the state academic accountability system. Other technical edits have also been made throughout the section. In response to public comment, new subsection (l) was added at adoption to clarify that the community and student engagement reporting requirements specified in subsections (j) and (k) do not apply to districts and campuses with certain characteristics because they would not have applicable data. ADOPTED RULES June 2, TexReg 2915

32 SUMMARY OF COMMENTS AND AGENCY RESPONSES. The public comment period on the proposal began March 31, 2017, and ended May 1, Following is a summary of the public comments received and corresponding agency responses. Comment: Two district personnel asked if the overall rating applied to the eight Community and Student Engagement (CaSE) categories, to the three CaSE categories for accountability, or to both. Agency Response: The agency provides the following clarification. The overall rating of A, B, C, D, or F applies to only the three CaSE categories discussed in the TEC, The overall rating of Exemplary, Recognized, Acceptable, and Unacceptable applies to the entire set of eight CaSE categories discussed in the TEC, Comment: An individual expressed concern about the additional work the CaSE ratings for accountability would create for district staff. Agency Response: The agency disagrees that the development of locally determined CaSE ratings required in the amendment adds significant additional time and effort by district and campus staff. While the TEA cannot prescribe the method and criteria that districts and campuses use to determine CaSE ratings, it is within the law for districts and campuses to use the same criteria for assigning ratings of A, B, C, D, or F that is used currently to assign ratings of Exemplary, Recognized, Acceptable, and Unacceptable. Comment: The Texas School Alliance (TSA) expressed concern that the additional data collection and staff time for committee meetings may create additional costs for districts. TSA proposed acknowledging and appropriating funds to districts and the agency to process and issue ratings for two sets of data. An individual submitted a similar concern. Agency Response: The agency disagrees that the development of locally determined CaSE ratings required in the amendment adds significant additional time and effort by district and campus staff. While the TEA cannot prescribe the method and criteria that districts and campuses use to determine CaSE ratings, it is within the law for districts and campuses to use the same criteria for assigning ratings of A, B, C, D, or F that is used currently to assign ratings of Exemplary, Recognized, Acceptable, and Unacceptable. Comment: The TSA expressed concern about the duplication of effort required under the TEC, and , and the lack of statutory guidance distinguishing D's and F's. TSA proposed the agency seek clarification from the legislature about whether the "translation" provided in the TEC, (b), was intended to supersede, rather than to compound, the ratings/labels contained in the TEC, An education service center personnel and Sabinal Independent School District (ISD) submitted similar concerns. Agency Response: The agency disagrees that further clarification is needed from the Texas Legislature. When the 84th Texas Legislature passed House Bill 2804 (adding CaSE ratings to academic accountability), it did not strike the TEC, While the TEA cannot prescribe the method and criteria that districts and campuses use to determine CaSE ratings, it is within the law for districts and campuses to use the same criteria for assigning ratings of A, B, C, D, or F that are used currently to assign ratings of Exemplary, Recognized, Acceptable, and Unacceptable. Comment: One district staff member expressed concern that CaSE criteria are dependent on end-of-year data. The commenter stated that if districts are to submit evaluation results in May, they will not have data for programs such as dropout prevention unless it is a lagging indicator. Agency Response: The agency agrees that the reporting timeline for the locally assigned CaSE ratings of A, B, C, D, or F for use in the current year in the accountability system is problematic for indicators based on current year data that are not available until the end of the school year. However, the timeline is necessary to ensure that the locally assigned CaSE ratings are available for use in the state accountability ratings that must be assigned by the statutory deadline of August 15. While the TEA cannot prescribe the method and criteria that districts and campuses use to determine CaSE ratings, there is nothing in law or administrative rule that would prevent a district from using a lagging indicator. The TEA uses several lagging indicators to assign academic accountability ratings. Comment: Two district personnel sought clarification on whether the district assigns performance ratings or whether the campuses assign performance ratings for CaSE. The commenters cited the discrepancy in wording between the TEC, (b), where the district assigns ratings and the TEC, (a)(2), where each campus assigns ratings. One commenter proposed a change to the TEC, , to align the assignment of ratings. Agency Response: The agency provides the following clarification. There is no discrepancy in statute; the statutes refer to two separate programs with two separate purposes. The TEC, , requires each district to assign a rating of Exemplary, Recognized, Acceptable, and Unacceptable to itself and each of its campuses for each of the eight categories in community and student engagement. This requirement is addressed in (a) - (i). The TEC, , requires each district to choose three CaSE categories for the purpose of academic accountability and assign itself an overall rating and a rating for each category. It also requires each campus to do the same. This requirement is addressed in (j) - (k). The language of statute has districts assigning Exemplary, Recognized, Acceptable, and Unacceptable ratings and district and campuses assigning A, B, C, D, and F ratings. While the TEA cannot prescribe the method and criteria that districts and campuses use to determine CaSE ratings, it is within the law for districts and campuses to use the same criteria for assigning ratings of A, B, C, D, or F that is used currently to assign ratings of Exemplary, Recognized, Acceptable, and Unacceptable. Comment: Sabinal ISD inquired how to upload a link for the CaSE criteria. Agency Response: The agency provides the following clarification. The link will be submitted through the Texas Student Data System Public Education Information Management System (TSDS PEIMS) Element ID E1578. Appendix K of the Texas Education Data Standards describes this information as well as other reporting details associated with CaSE ratings. Comment: Sabinal ISD expressed concern that it had not been provided recent guidance prior to the April 18, 2017, To the Administrator Addressed letter notifying districts of the upcoming CaSE collections. Agency Response: The agency disagrees that notification of CaSE requirements was not provided prior to April 18, TEA staff have made several presentations over the past sev- 42 TexReg 2916 June 2, 2017 Texas Register

33 eral months that included a discussion of the new CaSE reporting requirements. These include several presentations on the Texas Education Telecommunications Network (TETN), an accountability presentation for education service center (ESC) staff, and an accountability presentation at the Texas Assessment Conference. In addition, the TSDS PEIMS staff at TEA have provided training and notifications on this data collection to ESC staff responsible for TSDS PEIMS data submissions for their respective regions. The April 18, 2017, letter, however, was the first written notification in the form of a To The Administrator Addressed letter to districts and campuses regarding the new reporting requirements for CaSE ratings. Comment: Sabinal ISD asked if districts start a new evaluation process for the three CaSE categories to be used in accountability. Agency Response: The agency provides the following clarification. It is a local decision whether to use a new evaluation process for CaSE ratings. While the TEA cannot prescribe the method and criteria that districts and campuses use to determine CaSE ratings, it is within the law for districts and campuses to use the same criteria for assigning ratings of A, B, C, D, or F that is used currently to assign ratings of Exemplary, Recognized, Acceptable, and Unacceptable. Comment: One district staff member asked if it was acceptable to extrapolate the A - F rating from staff, student, and community surveys. Agency Response: The agency provides the following clarification. While the TEA cannot prescribe the method and criteria that districts and campuses use to determine CaSE ratings, it is within the law for districts and campuses to use the same criteria for assigning ratings of A, B, C, D, or F that is used currently to assign ratings of Exemplary, Recognized, Acceptable, and Unacceptable. Comment: One district staff member asked if districts were to assign letter grades in the summer of 2017 or just to report the three CaSE areas and evaluation criteria. Agency Response: The agency provides the following clarification. In June, 2017 districts will submit the three chosen CaSE categories to be included in 2018 accountability as well as the evaluation criteria. Districts must also submit CaSE ratings (Exemplary, Recognized, Acceptable, and Unacceptable) for all eight categories as required in prior years. Letter grades for the three chosen CaSE categories and the overall Domain V grade will be collected in May, Comment: One district staff member inquired why districts must submit performance using two different systems to measure the same indicators when the TSDS PEIMS reporting does not distinguish between Exemplary and A, Recognized and B, etc. Agency Response: The agency provides the following clarification. Section addresses two separate statutory requirements. The TEC, , requires districts to report all eight categories, and the TEC, , requires reporting three categories for each district and campus for use in academic accountability. Comment: One district staff member asked whether the new CaSE reporting requirements apply to charter schools. Agency Response: The agency provides the following clarification. Yes, the CaSE reporting requirements apply to charter schools. However, the CaSE reporting requirements do not apply to districts and campuses with certain characteristics because they would not have applicable data. The agency has added new subsection (l) to the rule at adoption for clarification. Comment: Sabinal ISD inquired if the CaSE components described in the April 18, 2017, To the Administrator addressed letter were a new description for the CaSE rating categories. Agency Response. The agency provides the following clarification. No, the term components as used in the April 18, 2017, letter refers to the existing CaSE categories. Comment: An individual proposed amendments to the rule that would require districts to use research-based surveys to measure CaSE. The commenter stated that the surveys would be transparent and understandable and would ensure parents and families are active members in determining CaSE indicators for their campuses and districts. Agency Response: The agency disagrees. Statute does not give the TEA authority to provide policy guidance to districts regarding the criteria that are used for CaSE evaluations. Comment: An individual commented that academic accountability places too much weight on the State of Texas Assessments of Academic Readiness (STAAR ) examination but stated support for the inclusion of other indicators. The individual asked whether the CaSE rating would be based on the school's plan and action or parent attendance and participation. The individual also added that an A - F rating scale carries a negative connotation and that an alternative rating scale is needed. Hudson ISD also objected to the A-F rating scale. Agency Response: The agency disagrees. The CaSE ratings will be based on locally determined criteria. Whether it is based on a school's plan and action or parent participation is a local decision. The A - F rating scale is required by the TEC, , and the TEA does not have the legal authority to develop an alternative rating scale. STATUTORY AUTHORITY. The amendment is adopted under the Texas Education Code (TEC), , which requires each school district to annually evaluate its performance and the performance of each of its campuses in the area of community and student engagement using eight specific categories and also requires each district to report to the TEA the rating of Exemplary, Recognized, Acceptable, or Unacceptable that it has assigned to itself and to each of its campuses for overall performance in community and student engagement and for each of the eight categories; and TEC, , which requires each school district and campus to annually select three of the eight categories in community and student engagement on which it will rate itself for the purpose of academic accountability ratings and also requires each district and campus to report to TEA the rating of A, B, C, D, or F that it has assigned to itself for overall performance in community and student engagement and for each of the three categories. CROSS REFERENCE TO STATUTE. The amendment implements the Texas Education Code, and Community and Student Engagement. (a) Each school district shall assign performance ratings to itself and to each of its campuses for community and student engagement (CaSE) indicators based on locally determined criteria. (b) Each school district shall designate a local committee(s) to determine criteria that districts shall use to evaluate and assign a rating of Exemplary, Recognized, Acceptable, or Unacceptable for the fol- ADOPTED RULES June 2, TexReg 2917

34 lowing programs or specific categories of performance for the district and each campus: (1) fine arts; (2) wellness and physical education; (3) community and parental involvement; (4) the 21st Century Workforce Development program; (5) the second language acquisition program; (6) the digital learning environment; (7) dropout prevention strategies; and (8) educational programs for gifted and talented students. (c) A school district may assign a rating of Not Applicable to a program or performance category in subsection (b) of this section only if it determines that the program or performance category is not applicable to the district or a campus. A district may not assign a rating of Not Applicable to all of the program or performance categories in subsection (b) of this section for the district or any campus. (d) Each school district shall require the local committee(s) to determine the criteria that the district shall use to evaluate and assign an overall performance rating of Exemplary, Recognized, Acceptable, or Unacceptable to each campus and the district. A district may not assign a rating of Not Applicable for this indicator for the district or any campus. (e) Each school district shall require the local committee(s) to determine the criteria that the district shall use to evaluate and assign a status of "Yes" or "No" on the record of the district and each campus regarding compliance with statutory reporting and policy requirements under the Texas Education Code, A district may not assign a rating of Not Applicable to this indicator for the district or for any campus. (f) Each school district shall assign performance ratings for the CaSE indicators and compliance status as defined in subsections (b)-(e) of this section to the district and to each campus in the district, except for budgeted campuses, disciplinary alternative education program campuses, and juvenile justice alternative education program campuses. Districts are not required to assign performance ratings for the CaSE indicators and compliance status to facilities operated by the Texas Juvenile Justice Department. (g) Each school district shall report the locally determined performance ratings and compliance status to the Texas Education Agency (TEA) in accordance with the reporting requirements and timelines specified in the Texas Student Data System Public Education Information Management System (TSDS PEIMS) Texas Education Data Standards (TEDS) applicable for that school year. (h) Each school district shall post the locally determined performance ratings and compliance status for the district and each campus on the school district internet website no later than August 8 of each year. Districts shall post the locally determined performance ratings and compliance status for campuses that operate on a year-round calendar on the school district internet website no later than the last day of August of each year. (i) The TEA shall report the performance ratings and compliance status for CaSE indicators reported by school districts on the TEA website no later than October 1. (j) For the purpose of including CaSE ratings in the state academic accountability system, each school district must report to the TEA, in accordance with reporting requirements and timelines specified in subsection (g) of this section: (1) the three CaSE indicators it has selected to be used in the state academic accountability system; (2) the criteria that it will use to evaluate and assign ratings for its performance in the three indicators reported in paragraph (1) of this subsection and post these criteria on the district internet website; (3) the three CaSE indicators selected by each campus to be used in the state academic accountability system; (4) the criteria that it will use to evaluate and assign ratings for its performance in the three indicators reported in paragraph (3) of this subsection and post these criteria on each campus internet website; (5) the rating of A, B, C, D, or F that the district has assigned to itself for both overall performance and for each of the three indicators reported in paragraph (1) of this subsection; and (6) the rating of A, B, C, D, or F that each campus has assigned to itself for both overall performance and for each of the three indicators reported in paragraph (3) of this subsection. (k) For the purpose of including CaSE ratings in the state academic accountability system, a school district or campus shall not assign to itself a rating of Not Applicable for any of the three indicators reported in subsection (j) of this section. (l) A school district or campus with the following characteristics is not subject to subsections (j) and (k) of this section. (1) The district or campus serves only students enrolled in early education. (2) The district or campus has no data in the accountability subset. (3) The district or campus has insufficient data to assign a CaSE rating. (4) The district or campus is a residential facility or operates only residential facilities. (5) The district or campus is a juvenile justice alternative education program. (6) The district or campus is a disciplinary alternative education program. (7) The district or campus is operated by the Texas Juvenile Justice Department. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 19, TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Effective date: June 8, 2017 Proposal publication date: March 31, 2017 For further information, please call: (512) CHAPTER 100. CHARTERS 42 TexReg 2918 June 2, 2017 Texas Register

35 SUBCHAPTER AA. COMMISSIONER'S RULES CONCERNING OPEN-ENROLLMENT CHARTER SCHOOLS DIVISION 2. COMMISSIONER ACTION AND INTERVENTION 19 TAC The Texas Education Agency (TEA) adopts an amendment to , concerning open-enrollment charter schools. The amendment is adopted with changes to the proposed text as published in the November 25, 2016, issue of the Texas Register (41 TexReg 9220). The adopted amendment modifies the rule to comply with statutory provisions implemented as a result of House Bill (HB) 1842, 84th Texas Legislature, 2015, and to more closely match other existing statutory provisions, including the reauthorization of the No Child Left Behind Act as the Every Student Succeeds Act (ESSA). REASONED JUSTIFICATION. Section was established to allow for changes to a charter holder's contract, including the growth or expansion of an existing charter school. The rule was last amended effective September 18, 2014, to make changes to the charter amendment process and the types of amendments available. The adopted amendment to 19 TAC provides clarity and aligns the section with provisions in the Texas Education Code (TEC) as well as ESSA. The changes provide clarity around the consideration of three distinct categories of charter school expansions and their corresponding criteria: regular expansions, expedited expansions, and high-quality campus designations. The amendment was modified at adoption as follows. In response to public comment, (b)(9)(A)(ii) was amended to provide that an additional year for implementation of an expansion may be granted if the requestor demonstrates a need for the additional year. In response to public comment, (b)(9)(A)(vi) was deleted. In response to public comment, (b)(9)(A)(vii), renumbered as subsection (b)(9)(a)(vi), was amended to clarify the meaning of "prudent" as used in the section. Subclause (XI) under clause (vi) was also amended to clarify the meaning of "prudent" and to clarify that the statement described by the subclause is a required component of a charter school's business plan. Section (b)(10)(C) was amended to remove the requirement for mailing the letters of notification of impact. Evidence of letters of notification to the relevant districts may be electronic. In response to public comment, (b)(10)(D)(ii) was amended to clarify that the charter school under which a proposed new campus would be assigned must currently have at least 50% of students in tested grades. In response to public comment, (b)(10)(D)(ii) and (E)(i) were amended to provide for special consideration for charter schools serving students in prekindergarten. Section (b)(10)(D)(iii) was amended to add language requiring charter holders seeking to expand to provide notification to affected school districts. In response to public comment, (b)(11)(A)(ii)(II) was amended to provide that an additional year for implementation of an expedited expansion may be granted if the requestor demonstrates a need for the additional year. In response to public comment, (b)(11)(A)(ii)(III)(-a-) was amended to remove language requiring charter holders seeking an expedited expansion to notify superintendents of school districts affected by the expedited expansion. In response to public comment, (b)(11)(A)(ii)(IV) was amended to clarify the meaning of "prudent" as used in the section. In response to public comment, (b)(12) was amended to restore "new school designation" as an expansion amendment under the rule and align current alternative education accountability thresholds. Due to the restoration of "new school designation" as (b)(12), high-quality campus designation provisions were adopted as new (b)(13). In response to public comment, new (b)(13)(B)(ii) was amended to replace the phrase "new facility" with "separate facility." SUMMARY OF COMMENTS AND AGENCY RESPONSES. The public comment period on the proposal began November 25, 2016, and ended December 27, Following is a summary of public comments received and corresponding agency responses. Comment: Concerning (b)(6), Texas Charter School Association (TCSA) commented that the limitation to relocate a campus within 25 miles of the existing campus is arbitrary and inconsistent with TEC, Chapter 12, and 19 TAC Chapter 100, citing that there is no statutory language limiting relocation except that the charter must be within the charter school's approved geographic boundary. Agency Response: The agency disagrees. The rule's stated purpose for a relocation amendment is to serve "the same students and grade levels without a significant disruption to the delivery of the educational services." Therefore, a limitation to relocate a campus within 25 miles of the existing campus is not arbitrary. A revision to a charter is made solely through the approval of the commissioner of education. Allowing a campus to relocate beyond a distance of 25 miles may not ensure the opportunity for currently enrolled students to attend the campus at its new location. The consequence of a relocation where a majority of students in tested grades changes would be an accountability rating that is no longer reflective of the students in attendance at that campus. A distance beyond 25 miles is prohibitive to families and may not be in the best interest of students electing to go to the original campus location. Any inconsistency in 19 TAC (3)(D) will be addressed and aligned to reflect the change. Comment: Concerning (b)(6), Ki Charter commented that any rule setting a limit on how far a charter may expand would stifle charters who serve underrepresented populations and would hinder residential treatment facilities from soliciting a charter school that they determine would best fit their needs. Agency Response: The agency disagrees and provides the following clarification. Section (b)(6) refers solely to the ADOPTED RULES June 2, TexReg 2919

36 relocation of a campus and not the expansion of a campus. As such, the limitation to relocate a campus within 25 miles of the existing campus is not arbitrary. A revision to a charter is made solely through the approval of the commissioner of education. Allowing a campus to relocate beyond a distance of 25 miles may not ensure the opportunity for currently enrolled students to attend the campus at its new location. The consequence of a relocation where a majority of students in tested grades changes would be an accountability rating that is no longer reflective of the students in attendance at that campus. A distance beyond 25 miles is prohibitive to families and may not be in the best interest of students electing to go to the original campus location. Comment: Concerning (b)(6), ResponsiveEd Solutions (RES) stated that a 25-mile limit on relocation would be inconsistent with the TEC, Chapter 12, because there is no statutory limit on relocation. RES recommended that the geographic limit for relocation be removed. RES also suggested that the 25-mile limit on site expansion in (b)(6) should be replaced with 50 miles. Agency Response: The agency disagrees and provides the following clarification. The explicit purpose of (b)(6) is to ensure that relocated charter schools serve "the same students and grade levels without a significant disruption to the delivery of the educational services." A 25-mile limitation on relocation of a campus is consistent with that purpose as well as the TEC, Chapter 12. Further, (b)(6) is concerned with relocation, not site expansion, so the commenter's recommendation regarding extending site expansion to 50 miles is not applicable to this section. Comment: Concerning (b)(6), Texas College Preparatory Academies (TCPA) stated that (b)(6) restricts a campus relocation to 25 miles from the existing campus and that the proposed limitation is inconsistent with the TEC, Chapter 12. TCPA stated that other than the requirement that a charter school be within the geographic boundary approved by the open-enrollment charter, there is no statutory limit on the relocation of a charter campus. TCPA recommended that TEA remove the 25-mile limitation for relocating a charter school campus. TCPA also recommended that in order to be consistent with the current rule, the proposed standard for a site expansion in (b)(6) be replaced with 50 miles to be consistent with the TEC, Chapter 12, and 19 TAC (3)(D). Agency Response: The agency disagrees. The limitation to relocate a campus within 25 miles of the existing campus is not arbitrary. A revision to a charter is made solely through the approval of the commissioner of education. Allowing a campus to relocate beyond a distance of 25 miles may not ensure the opportunity for currently enrolled students to attend the campus at its new location. The consequence of a relocation where a majority of students in tested grades changes would be an accountability rating that is no longer reflective of the students in attendance at that campus. A distance beyond 25 miles is prohibitive to families and may not be in the best interest of students electing to go to the original campus location. Any inconsistency in 19 TAC (3)(D) will be addressed and aligned to reflect the change. Comment: Concerning (b)(9)(A)(ii), IDEA Public Schools; Uplift Education; RES; Texas League of Community Charter Schools; Austin Achieve; International Leadership of Texas; KIPP Houston; Schulman, Lopez & Hoffer; and TCSA commented that limiting the expansion amendment approval period to the year preceding the school year in which the expansion will be effective is inadequate given the timeline needed to locate appropriate facilities for a school campus, complete renovation, or construct a suitable facility. Agency Response: The agency agrees and has amended the language at adoption to allow for an additional year (if requested) for charter schools applying to add additional campuses. Comment: Concerning (b)(9)(A)(iii), Raise Your Hand Texas (RYHT) expressed support for maintaining the language that allows the commissioner to approve an expansion amendment if 90% of the campuses for a given charter school are rated academically acceptable or higher for the most recent year of ratings. RYHT stated that it supports this standard as an important control on the quality of charter programs. However, RYHT expressed concern that only considering campuses and not the number of students at those campuses could mask a performance issue that should be addressed prior to expansion. RYHT recommended that the current 90% standard be supplemented by a requirement that campuses enrolling 90% of the charter's students also have an acceptable rating to qualify for expansion. Agency Response: The agency appreciates the support of RYHT's efforts to ensure the educational quality offered to students in charter schools and agrees on the priority of providing high-quality education. The agency disagrees that the supplemental requirement is needed. The 90% provision ensures the academic ratings for charter schools seeking to expand and allows for growth without placing an undue burden on charter operators and agency staff. Comment: Concerning (b)(9)(A)(iii), RES commented that requiring 90% of the campuses operated under the charter school to be academically acceptable in order to expand restricts innovation and discourages charters from serving challenging populations. RES suggested applying the 90% standard to campuses that have been in operation for more than three years to allow charter holders to continue expanding without being penalized for opening new campuses in harder-to-serve communities. Agency Response: The agency disagrees. Focusing on providing quality education for all students requires the campuses to reflect an acceptable rating on an annual basis whether the campus is a new campus or an established campus. Comment: Concerning (b)(9)(A)(vi), RES suggested that TEA remove the requirement for charter holders to notify the superintendent separate from the board of trustees of a school district. RES stated that this requirement is additional to the statutory requirement and is an unnecessary requirement as the TEC, , already requires a charter holder to notify the board of trustees for each school district and each member of the legislature that represents the geographic area to be served by the proposed campus. Agency Response: The agency agrees that there is no requirement to notify both the boards of trustees and superintendents and has removed the requirement that affected school districts be notified. The agency recommends that the boards of trustees and superintendents be notified collectively and will reflect that recommendation in the instructions for notification and associated templates. Comment: Concerning proposed (b)(9)(A)(vii), TCSA and Texas League of Community Charter Schools stated that the proposed amendment requires the governing board of a charter school to provide a statement that the growth proposed is prudent. TCSA stated that the proposed "prudent" standard 42 TexReg 2920 June 2, 2017 Texas Register

37 is vague, not supported by statute or law, and unnecessary. TCSA suggested that if the "prudent" standard is adopted, language should be added to clarify how a board of directors demonstrates satisfaction of this subjective standard other than by board action and vote. TCSA provided similar comments regarding (b)(9)(A)(vii)(XI). Agency Response: The agency partially agrees. The term "prudent" may be confusing for charter schools seeking to comply with the rule. By requiring a charter school's governing board to determine that an expansion amendment request is prudent, the agency is requiring the governing board to determine the appropriateness of the expansion request in light of that charter school's business plan. To clarify this point, the agency has amended the language in (b)(9)(A)(vi) and (b)(9)(A)(vi)(XI) at adoption. The agency has also amended similar language in (b)(11)(A)(ii)(IV). Comment: Concerning (b)(10)(D)(ii) and (E)(i), TCSA expressed approval of the addition of subparagraph (E) outlining additional site expansions. However, TCSA recommended adding "currently" to (b)(10)(D)(ii) so that it reads "the charter school currently has at least 50% of the student population in tested grades," to be consistent with (b)(10)(E)(i) and (b)(11)(A)(i)(I). Agency Response: The agency agrees and has added "currently" in (b)(10)(D)(ii). Comment: Concerning (b)(10)(D)(ii) and (E)(i), TCSA recommended that language be amended to include the phrase, "or has had at least 50% of the students in the grades assessed enrolled in the school for at least three years." TCSA supported its recommendation by comparing expansion amendments described in (b)(10)(D)(ii) and (E)(i) to requirements for expedited expansion pursuant to (b)(11)(A)(i) and TEC, (b-4). Addition of such language, TCSA maintained, would enable early childhood education charter schools entering their fourth year to serve more students in need in the lower grades and prekindergarten. Agency Response: The agency partially agrees. Neither (b)(11)(A)(i) nor TEC, (b-4), are applicable because they relate to special rules reserved for campuses that qualify for the streamlined process contemplated for expedited expansion. Nevertheless, the agency does agree that special consideration may be made for schools serving students in prekindergarten. To that end, the agency may permit campus and site expansion under (b)(10)(D)(ii) and (E)(i) when a prekindergarten charter school has demonstrated acceptable performance on a commissioner-approved prekindergarten monitoring tool as determined under 19 TAC , High-Quality Prekindergarten Grant Program. The agency has amended (b)(10)(D)(ii) and (E)(i) at adoption to include such language. Comment: Concerning (b)(10)(D) and (E), Wayside Schools commented that clarifying language was needed to indicate that campus expansions and site expansions may be permitted only under pre-existing campuses with pre-existing campus district numbers. Agency Response: The agency disagrees and provides the following clarification. A charter school campus, as used in (b)(10)(D), refers to an organizational unit administered by a charter school and is assigned a county district campus number (CDCN). A charter school site, as used in (b)(10)(E), refers to an organizational unit tied to or associated with a pre-existing campus. The site is assigned a site number under the campus, with administrative personnel and street address that are separate from, but associated with, the particular campus. Comment: Concerning (b)(10)(E)(i), TCSA commented in support of the addition of subparagraph (E) but recommended subparagraph (E)(i) be amended to read, "the charter school campus under which the proposed new site will be assigned currently has at least 50% of the student population in tested grades, or has had at least 50% of the students in the grades assessed enrolled in the school for at least three years." TCSA further stated that by adding the same requirements as currently stated for quality expansion under (b)(11)(A)(i) and in TEC, (b-4), early childhood education charter schools entering at least their fourth year will be able to serve more students in need in the lower grades and prekindergarten through a site expansion amendment. Agency Response: The agency partially agrees. The use of sites permits a charter school that has enrollment increases beyond current facility capacity to accommodate students. This type of expansion is limited and not the same as expedited expansion. As such, the language is not similar. Comment: Concerning (b)(10)(E)(ii), TCSA noted that the 25-mile limitation is arbitrary and inconsistent with the TEC, Chapter 12, and 19 TAC Chapter 100. TCSA stated that 19 TAC (3)(D) also defines a charter site as "an organizational unit of a charter school with administrative personnel identified by a separate street address within 50 miles of the campus with which it is associated and fully described in the open-enrollment charter." TCSA further stated that the 25-mile limitation for a new site bars charter schools operating at residential treatment centers from expanding to a new site since residential treatment centers are often separated by more than 25 miles. TCSA recommended that TEA replace the 25-mile limitation for a site expansion with 50 miles to be consistent with the TEC, Chapter 12, and 19 TAC (3)(D). Finally, TCSA recommended that charters operating at residential treatment centers be exempt from the 50-mile limitation for relocation and site expansion amendments to ensure they can access site expansions. Agency Response: The agency disagrees. The 25-mile limitation is necessary to ensure adequate administrative support and management. An additional consideration is that it allows for parents with students at two locations more accessibility. Any inconsistency in 19 TAC (3)(D) will be addressed and aligned to reflect the change. Comment: Concerning (b)(10)(E)(ii), Uplift Education noted confusion on the limitation of an expansion amendment for a new site to a site located within 25 miles of the campus with which it is associated. Uplift Education asked if the 25 miles would be measured from the central office or the nearest campus. Uplift Education stated that the reason for the change is not entirely clear and further stated that 19 TAC (3)(D) refers to a site as an organizational unit of a charter school with administrative personnel within 50 miles of the campus with which it is associated. Uplift Education supported the comments made by TCSA to the proposed changes. Agency Response: The agency offers the following clarification. Sites are educational units associated with a charter campus. The provision for sites had previously been removed and is being reintroduced based on demonstrated need. Any inconsistency in ADOPTED RULES June 2, TexReg 2921

38 19 TAC (3)(D) will be addressed and aligned to reflect the change. Comment: Concerning (b)(10)(E), RYHT commented that the agency should take care to ensure that the addition of sites not be used as a mechanism to circumvent the charter amendment process or to avoid accountability. RYHT stated that for sites to be considered part of the same campus, they should be within close enough proximity to allow the sites to share administrative staff and serve as feeder schools for one another. RYHT suggested amending 19 TAC (B)(10)(E) to require that new sites be within 10 miles of the campus with which they are associated rather than 25 miles because a common administrative staff cannot be expected to deal with sudden issues at a location 25 miles from their office. Agency Response: The agency agrees that the closer the site is to its associated campus, the more likely adequate administrative support would be available, the student demographics would be similar or the same, and parents would have greater accessibility. The provision for sites is not for stand-alone educational units but rather a need to address facility restrictions. The 25-mile limitation is a median distance. Comment: Concerning (b)(10)(E)(ii), RES stated that the provision restricts a campus site expansion to 25 miles from the existing campus and that the proposed limitation is inconsistent with the TEC, Chapter 12. RES recommended that the proposed standard for a site expansion be replaced with 50 miles to be consistent with the TEC, Chapter 12, and 19 TAC (3)(D). Agency Response: The agency disagrees. The 25-mile limitation is a median distance. Allowing a campus to add a new site beyond a distance of 25 miles may not ensure the opportunity for currently enrolled students to attend the new site. The consequence of a new site where a majority of students in tested grades changes would be an accountability rating that is no longer reflective of the students in attendance at that campus overall. A distance beyond 25 miles is prohibitive to families and may not be in the best interest of students who had elected to go to the original campus location. Any inconsistency in 19 TAC (3)(D) will be addressed and aligned to reflect this change. Comment: Concerning (b)(11)(A)(ii)(II), RES and TCSA commented that under the proposed changes that limit the expedited expansion amendment approval period to the year preceding the school year in which the expansion will be effective is inadequate given the timeline needed to locate appropriate facilities for a school campus, complete renovation, or construct a suitable facility. Agency Response: The agency agrees and has amended the language at adoption to allow for an additional year (if requested) for charter schools applying to add additional campuses. Comment: Concerning (b)(11)(A)(ii)(III), TCSA suggested that TEA remove the requirement for charter holders seeking an expedited expansion to notify the superintendent separate from the board of trustees of a school district. TCSA stated that this requirement is additional to the statutory requirement and is unnecessary as the TEC, , already requires a charter holder to notify the board of trustees for each school district and each member of the legislature that represents the geographic area to be served by the proposed campus. Agency Response: The agency agrees that the provisions in statute for notification apply to charter applicants (TEC, ) and notice to the commissioner for expedited charter amendments (TEC, (b-4)). The statutory requirements do not apply to notice to district superintendents pursuant to expedited charter amendments. The agency has removed the language at adoption requiring charter schools to notify superintendents as it is not statutorily required. Comment: Concerning (b)(11)(A)(ii), RYHT suggested requiring charter schools seeking an expansion amendment to submit evidence that they notified all affected school districts no later than one year prior to the proposed opening of a new campus. RYHT further stated that notice to the school district should include the name of the charter operator requesting expansion; street map indicating a radius no greater than 10 miles inside which the new campus will be located; the grade levels to be served; the anticipated maximum enrollment of the new campus; the anticipated opening date for the new campus; and a statement of the educational mission of the new campus. RYHT further requested that upon receipt of a charter amendment, TEA notify affected school districts that they have the opportunity to provide the commissioner with written feedback about the potential impact of the proposed expansion and that TEA should also promptly notify all affected school districts when it approves an expansion amendment and provide a copy of the amendment, including the street address of any additional campus or site. Agency Response: The agency disagrees. The measures proposed by RYHT are not required by statute. However, the agency will examine the current impact statement template to ensure notification is more transparent. Comment: Concerning (b)(11)(B), the TCSA recommended the language be changed to read, "Not later than the 60th day after the date the charter holder completes an expedited expansion amendment, the commissioner will provide written notice to the charter holder if the charter holder does not satisfy the requirements of TEC, (b-4)." Agency Response: The agency disagrees. The rule contemplates that charter schools applying for an expedited expansion amendment must affirmatively prove they have met each criterion for the amendment, and (b)(11)(B) is written to reflect this requirement. Comment: Concerning (b)(12), TCSA, KIPP Houston, RES, and Ki Charter commented that the proposed language eliminates the availability of the charter school program (CSP) grant to schools evaluated under the alternative education accountability (AEA) procedures and are not in line with the ESSA requirements. TCSA also asserted that the proposed language changes (b)(12)(A)(ii) to require a charter holder to receive the highest or second highest district rating for three of the last five years with all of the campuses instead of 75% of the campuses operated under the charter receiving the highest or second highest rating. TCSA commented that this change is inconsistent with the language requiring charter holders to meet all requirements applicable to an expansion amendment, as the expansion amendment only requires at least 90% of the campuses operated under the charter school to be academically acceptable. Agency Response: The agency provides the following clarification. The existing Charter School Start-Up grant was issued under the No Child Left Behind Act. At adoption, the agency has 42 TexReg 2922 June 2, 2017 Texas Register

39 reinstated the language relating to new school designation with one change, reflected in the AEA threshold. The state's threshold for AEA is currently at 35%, and the amended language reflects this minimum threshold. A new subsection (b)(13) relating to high-quality campus designation addresses the changes to the federal law under ESSA and the new Expanding Opportunity through Quality Charter Schools provision. Comment: Concerning proposed (b)(12)(B)(ii), TCSA recommended that TEA remove the phrase "new facility." TCSA stated that with charter schools not receiving facilities funding, it is not appropriate to expect charter schools to build or obtain new facilities in order to qualify for the high-quality campus designation. Additionally, TCSA commented that a "new facility" is an unnecessary requirement since (b)(12)(D) outlines what the commissioner will consider to determine whether a separate and distinct campus exists. Agency Response: The agency partially agrees. The expectation for charter schools receiving the CSP grant is for separate and distinct campuses. The collocation of two campuses presents challenges for the maintenance of "separate and distinct." At adoption, the agency has replaced the term "new facility" with "separate facility" and will continue to use the outline requirements in (b)(12)(D) to make determinations. This language is necessary and included in the rule to require a separate and distinct campus, tracking the ESSA's definition of what it means to "replicate" an existing high-quality charter school: " a new charter school, or a new campus of a high-quality charter school, based on the educational model of an existing high-quality charter school, under an existing charter or an additional charter, if permitted or required by State law." (ESSA 4305(c)(9).) Comment: Concerning (b)(12), Texas League of Community Charter Schools stated that if the rule is adopted as proposed, it will increase the annual audit costs for all charter holders seeking a high-quality campus designation, as additional services will be required of a charter's independent auditor. To the degree that the audit requirement is attributable to a federal requirement, the commenter suggested that the proposed rule be amended to note that the separate school campus audit should be paid from federal grant funds. If the separate campus audit is not to be paid from federal grant funds, the commenter suggested that the proposed rule be amended to require only a separate financial statement in the charter holder's annual audit report for each campus seeking a high-quality campus designation and that the requirement for a separate financial audit of the school campus be removed. The commenter stated this would allow for the charter holder to better spend its funding in furtherance of the school's educational mission. Agency Response: The agency disagrees. This language is necessary and included in the rule to require a separate and distinct performance agreement for each high-quality campus. This is consistent with the requirements of ESSA, 4304(h), concerning financial audits of grant-receiving entities, as well as allowable costs associated with this federal funding. Comment: Concerning (b)(13)(C)(vi) and (D), renumbered as subsection (b)(14)(c)(vi) and (D), TCSA stated that "the additional language referring to the superintendent or, as applicable, the administrator serving as the educational leader and" chief executive officer creates confusion regarding which position or positions the board of directors of the charter holder must retain for initial or final authority regarding employment decisions. TCSA recommended that for clarification the language be limited to "chief executive officer as defined by (17) of this title" in order to simplify the rule and make clear who the board oversees and what powers and duties must be retained by the board and superintendent. Agency Response: The agency disagrees. 19 TAC (17) addresses the term "chief executive officer" but is deliberately expansive to include other personnel that might occupy a similar role, such as a superintendent or the administrator serving as the educational leader of a charter school. The language of (b)(14)(C)(vi) and (D) is consistent with that rule. STATUTORY AUTHORITY. The amendment is adopted under the Texas Education Code (TEC), (b-4), as amended by House Bill 1842, 84th Texas Legislature, 2015, which provides autonomy for a charter holder to establish an expedited campus if the charter school meets the criteria outlined in the statute and the commissioner of education does not determine the charter school does not satisfy the requirements; and TEC, , which provides for the growth or revision of a charter through the amendment process and stipulates that a revision or amendment to the charter school contract may only be made with the approval of the commissioner of education not later than 60 days following the request. CROSS REFERENCE TO STATUTE. The amendment implements the Texas Education Code, (b-4) and Charter Amendment. (a) Amendments in writing. Subject to the requirements of this section, the terms of an open-enrollment charter may be revised with the consent of the charter holder by written amendment approved by the commissioner of education in writing. (b) Types of amendments. An amendment includes any change to the terms of an open-enrollment charter, including the following: maximum enrollment, grade levels, geographic boundaries, approved campus(es), approved sites, relocation of campus, charter holder name, charter school (district) name, charter campus name, charter holder governance, articles of incorporation, corporate bylaws, management company, admission policy, or the educational program of the school. An amendment must be approved by the commissioner under this subsection. Expanding prior to receiving the commissioner's approval will have financial consequences as outlined in (d)(1) of this title (relating to State Funding). (1) Charter amendment request. Prior to implementation, the charter holder shall file a request, in the form prescribed, with the Texas Education Agency (TEA) division responsible for charter schools. As applicable, the request shall set forth the text and page references, or a photocopy, of the current open-enrollment charter language to be changed, and the text proposed as the new open-enrollment charter language. The request must be attached to a written resolution adopted by the governing body of the charter holder and signed by a majority of the members indicating approval of the requested amendment. (2) Timeline. All charter amendment requests, with the exception of expansion amendments, may be filed with the commissioner at any time. (3) Relevant information considered. As directed by the commissioner, a charter holder requesting a substantive amendment shall submit current information required by the prescribed amendment form, as well as any other information requested by the commissioner. In considering the amendment request, the commissioner may consider any relevant information concerning the charter holder, including its ADOPTED RULES June 2, TexReg 2923

40 student and other performance; compliance, staff, financial, and organizational data; and other information. (4) Best interest of students. The commissioner may approve an amendment only if the charter holder meets all applicable requirements, and only if the commissioner determines that the amendment is in the best interest of the students enrolled in the charter school. The commissioner may consider the performance of all charters operated by the same charter holder in the decision to finally grant or deny an amendment. (5) Conditional approval. The commissioner may grant the amendment without condition, or may require compliance with such conditions and/or requirements as may be in the best interest of the students enrolled in the charter school. An amendment receiving conditional approval shall not be effective until a written resolution accepting all conditions and/or requirements, adopted by the governing body of the charter holder and signed by the members voting in favor, is filed with the TEA division responsible for charter schools. (6) Relocation amendment. An amendment to relocate an existing campus or site with the same administration and staff while still serving the same students and grade levels is not an expansion amendment subject to paragraphs (9)(A) and (10)(D) of this subsection. An amendment to relocate solely permits a charter holder to relocate an existing campus or site to an alternate address while serving the same students and grade levels without a significant disruption to the delivery of the educational services. The alternate address in the relocation request shall not be in excess of 25 miles from the existing campus address. (7) Ineligibility. The commissioner will not consider any amendment that is submitted by a charter holder that has been notified by the commissioner of the intent to revoke or nonrenew the charter. Nothing in this subsection limits the commissioner's authority to accept the surrender of a charter. (8) Amendment determination. The commissioner's decision on an amendment request shall be final and may not be appealed. The same amendment request may not be submitted prior to the first anniversary of the original submitted amendment. (9) Expansion amendment standards. An expansion amendment is an amendment that permits a charter school to increase its maximum allowable enrollment, extend the grade levels it serves, change its geographic boundaries, or add a campus or site. (A) In addition to the requirements of this subsection, the commissioner may approve an expansion amendment only if: (i) the expansion will be effective no earlier than the start of the fourth full school year at the affected charter school. This restriction does not apply if the affected charter school has a rating of "academically acceptable" as defined by (26) of this title (relating to Definitions) as its most recent rating and is operated by a charter holder that operates multiple charter campuses and all of that charter holder's most recent campus ratings are "academically acceptable" as defined by (26) of this title; (ii) the amendment request under paragraph (1) of this subsection is received no earlier than the first day of February and no later than the first day of April preceding the school year in which the expansion will be effective. An additional year to implement the expansion may be granted if the expansion amendment requestor demonstrates a need for the additional year; (iii) the most recent district rating for the charter school is "academically acceptable" and the most recent campus rating for at least 90% of the campuses operated under the charter school is "academically acceptable" as defined by (26) of this title; (iv) the most recent district financial accountability rating for the charter school in the Financial Integrity Rating System of Texas (FIRST) for Charter Schools is "satisfactory" as defined by (27) of this title; (v) the charter school has an accreditation status of Accredited; (vi) before voting to request an expansion amendment, the charter holder governing board has considered a business plan, has determined by majority vote of the board that the growth proposed is financially prudent relative to the financial and operational strength of the charter school, and includes such a statement in the board resolution. Upon request by the TEA, the business plan must be filed within ten business days. The business plan must be comprised of the following components: (I) a statement discussing the need for the expansion; (II) a statement discussing the current and projected financial condition of the charter holder and charter school; (III) an unaudited statement of financial position for the current fiscal year; (IV) an unaudited statement of financial activities for the current fiscal year; (V) an unaudited statement of cash flows for the current fiscal year; (VI) a pro forma budget that includes the costs of operating the charter school, including the implementation of the expansion amendment; (VII) a statement or schedule that identifies the assumptions used to calculate the charter school's estimated Foundation School Program revenues; (VIII) a statement discussing the use of debt instruments to finance part or all of the charter school's incremental costs; (IX) a statement discussing the incremental cost of acquiring additional facilities, furniture, and equipment to accommodate the anticipated increase in student enrollment; (X) a statement discussing the incremental cost of additional on-site personnel and identifying the additional number of full-time equivalents that will be employed; and (XI) the required statement that the growth proposed is financially prudent relative to the financial and operational strength of the charter school; (vii) the charter holder submits, for the most recent year of operation, copies of the compliance information relating to of this title (relating to Compliance Records on Nepotism, Conflicts of Interest, and Restrictions on Serving) to include documents such as affidavits identifying a board member's substantial interest in a business entity or in real property, documentation of a board member's abstention from voting in the case of potential conflicts of interest, and affidavits or other documents identifying other family members within the third degree of affinity or consanguinity who serve as board members and/or employees; (viii) the commissioner determines that the amendment is in the best interest of the students of Texas; and 42 TexReg 2924 June 2, 2017 Texas Register

41 (ix) the charter holder meets all other requirements applicable to expansion amendment requests and other amendments. (B) Notice of the approval or disapproval of expansion amendments will be made by the commissioner within 60 days of the date the charter holder submits a completed expansion amendment request. The commissioner may provide notice electronically. The commissioner shall specify the earliest effective date for implementation of the expansion. In addition, the commissioner may require compliance with such conditions and/or requirements that may be in the best interest of the students of Texas. (10) Expansion amendments. (A) Maximum enrollment. In addition to the requirements of paragraph (9)(A) of this subsection, the commissioner may approve an expansion amendment request seeking to increase maximum allowable enrollment only if within the calendar year preceding the request, the charter holder has not requested another expansion amendment seeking to increase maximum allowable enrollment. (B) Grade span. In addition to the requirements of paragraph (9)(A) of this subsection, the commissioner may approve an expansion amendment request seeking to extend the grade levels it serves only if it is accompanied by appropriate educational plans for the additional grade levels in accordance with Chapter 74, Subchapter A, of this title (relating to Required Curriculum), and such plan has been reviewed and approved by the charter governing board. (C) Geographic boundary. In addition to the requirements of paragraph (9)(A) of this subsection, the commissioner may approve an expansion amendment request seeking to expand the geographic boundaries of the charter school only if it is accompanied by evidence of notification, electronic or otherwise, to the relevant district(s). (D) Additional campus. In addition to the requirements of paragraph (9)(A) of this subsection, the commissioner may approve an expansion amendment request seeking to add a new campus only if it meets the following criteria: (i) the charter holder has operated at least one charter school campus in Texas for a minimum of three consecutive years; (ii) the charter school under which the proposed new campus will be assigned currently has at least 50% of the student population in tested grades. For charter schools serving students in prekindergarten, the charter school may include the students in prekindergarten to count toward the 50% requirement if the charter school can demonstrate acceptable performance on a commissioner-approved prekindergarten assessment or monitoring tool as determined under of this title (relating to High-Quality Prekindergarten Grant Program) and the addition of the prekindergarten students meets the 50% threshold; and (iii) the charter holder has provided evidence, via certified mail documented by return receipt, that each school district affected by the expansion was sent a notice to the district's central office of the proposed location and address of any new campuses or sites, including proposed grade levels and likely maximum enrollment. (E) Additional site. In addition to the requirements of paragraph (9)(A) of this subsection, the commissioner may approve an expansion amendment request seeking to add a new site only if it meets the following criteria: (i) the charter school campus under which the proposed new site will be assigned currently has at least 50% of the student population in tested grades. For charter school campuses serving students in prekindergarten, the charter school may include the students in prekindergarten to count toward the 50% requirement if the charter school can demonstrate acceptable performance on a commissioner-approved prekindergarten assessment or monitoring tool as determined under of this title and the addition of the prekindergarten students meets the 50% threshold; and (ii) the site will be located within 25 miles of the campus with which it is associated. (11) Expedited expansion. An expedited expansion amendment allows for the establishment of a new charter campus under TEC, (b-4). (A) In order to submit an expedited expansion amendment, the charter school must meet the following requirements. (i) The charter school must have an accreditation status of Accredited and meet the following criteria: (I) currently has at least 50% of its student population in grades assessed under TEC, Chapter 39, Subchapter B, or has had at least 50% of the students in the grades assessed enrolled in the school for at least three years; and (II) is currently evaluated under the standard accountability procedures for evaluation under TEC, Chapter 39, and received a district rating in the highest or second highest performance rating category under TEC, Chapter 39, Subchapter C, for three of the last five years with: (-a-) at least 75% of the campuses rated under the charter school also receiving a rating in the highest or second highest performance rating category in the most recent ratings; and (-b-) no campus receiving a rating in the lowest performance rating category in the most recent ratings. (ii) The charter holder must submit an expedited expansion amendment request in the time, manner, and form prescribed to the TEA division responsible for charter schools. The expansion amendment request will be: (I) effective no earlier than the start of the fourth full school year at the affected charter school; (II) received no earlier than the first day of February and no later than the first day of April preceding the school year in which the expansion will be effective. An additional year to implement the expansion may be granted if the expansion amendment requestor demonstrates a need for the additional year; (III) communicated via certified mail with a return receipt to the following entities: (-a-) the board of trustees of each school district affected by the expedited expansion as described in the amendment request form; and (-b-) the members of the legislature who represent the geographic area affected by the expedited expansion as described in the amendment request form, noting that each entity has an opportunity to submit a statement regarding the impact of the amendment to the TEA division responsible for charter schools; (IV) voted on by the charter holder governing body after consideration of a business plan determined by majority vote of the board affirming the growth proposed in the business plan is financially prudent relative to the financial and operational strength of the charter school. Such a statement must be included in the board resolution. Upon request by the TEA, the business plan must be filed within ten business days; and (V) submitted with copies of the most recent compliance information relating to of this title to include ADOPTED RULES June 2, TexReg 2925

42 documents such as affidavits identifying a board member's substantial interest in a business entity or in real property, documentation of a board member's abstention from voting in the case of potential conflicts of interest, and affidavits or other documents identifying other family members within the third degree of affinity or consanguinity who serve as board members and/or employees. (B) Notice of eligibility to establish an expedited campus under this section will be made by the commissioner within 60 days of the date the charter holder submits a completed expedited expansion amendment. (12) New school designation. A new school designation is an expansion amendment that permits a charter holder to establish an additional charter school campus under an existing open-enrollment charter school pursuant to federal non-regulatory guidance in the Elementary and Secondary Education Act (ESEA), Section 5202(d)(1), as amended. Charter holders of charter schools that receive new school designations from the commissioner will be eligible to participate in the charter school program competitive grant process when federal funding for the Texas charter school program is available. (A) The commissioner may approve a new school designation for a charter only if: (i) the charter holder meets all requirements applicable to an expansion amendment set forth in this section and has operated at least one charter school campus in Texas for a minimum of five consecutive years; (ii) the charter school has been evaluated under the accountability rating system established in of this title (relating to Accountability Rating System) currently with at least 50% of the student population in grades assessed by the state accountability system, has an accreditation status of Accredited, and meets the following: (I) is currently evaluated under the standard accountability procedures and received the highest or second highest district rating for three of the last five years with at least 75% of the campuses operated under the charter also receiving the highest or second highest rating and no campus with an "academically unacceptable" rating, as defined by (26) of this title, in the most recent state accountability ratings. A rating that does not meet the criteria for "academically acceptable" as defined in (26) of this title shall not be considered the highest or second highest academic performance rating for purposes of this section; or (II) is currently evaluated under the alternative education accountability (AEA) procedures and received the highest or second highest AEA district rating for five of the last five years with: (-a-) in the most recent applicable state accountability ratings, all rated campuses under the charter receiving an "academically acceptable" or higher rating, as defined by (26) of this title; and (-b-) if evaluated using AEA procedures, the district-level assessment data corresponding to the most recent accountability ratings demonstrate that at least 35% of the students in each of the following student groups (if evaluated) met the standard as reported by the sum of all grades tested on the standard accountability indicator in each subject area assessed: African American, Hispanic, white, special education, economically disadvantaged, limited English proficient, and at risk; (iii) no charter campus has been identified for federal interventions in the most current report; (iv) the charter school is not under any sanction imposed by TEA authorized under TEC, Chapter 39; Chapter 97, Subchapter EE, of this title (relating to Accreditation Status, Standards, and Sanctions); or federal requirements; (v) the charter holder completes an application approved by the commissioner; (vi) the new charter school campus will serve at least 100 students in its first year of operation; (vii) the amendment complies with all requirements of this paragraph; and (viii) the commissioner determines that the designation is in the best interest of the students of Texas. (B) In addition to the requirements of subparagraph (A) of this paragraph, the commissioner may approve a new school designation only on making the following written findings: (i) the proposed school satisfies each element of the definition of a public charter school as set forth in federal law; (ii) the proposed school is not merely an extension of an existing charter school; (iii) the proposed school campus is separate and distinct from the existing charter school campus(es) established under the open-enrollment charter school with a new facility and county-district-campus number; and (iv) the open-enrollment charter school, as amended, includes a separate written performance agreement for the proposed school campus that meets the requirements of federal law and TEC, (a)(3) and (4). (C) In making the findings required by subparagraph (B)(i) and (iii) of this paragraph, the commissioner shall consider: (i) the terms of the open-enrollment charter school as a whole, as modified by the new school designation; and (ii) whether the proposed school campus shall be established and recognized as a separate school under Texas law. (D) In making the findings required by subparagraph (B)(ii) and (iii) of this paragraph, the commissioner shall consider whether the proposed school campus and the existing charter school campus(es) have separate sites, employees, student populations, and governing bodies and whether their day-to-day operations are carried out by different officers. The presence or absence of any one of these elements, by itself, does not determine whether the proposed school campus will be found to be separate or part of an existing school. However, the presence or absence of several elements will inform the commissioner's decision. (E) In making the finding required by subparagraph (B)(iv) of this paragraph, the commissioner shall consider: (i) whether the proposed school campus and the existing charter school campus(es) have distinctly different requirements in their respective written performance agreements; and (ii) the extent to which the performance agreement for the proposed school campus imposes higher standards than those imposed by TEC, (b)(2)(L). (F) Failure to meet any standard or requirement outlined in this paragraph or agreed to in a performance agreement under subparagraph (B)(iv) of this paragraph shall mean the immediate termination of any federal charter school program grant and/or any waiver exempting a charter from some of the expansion amendment requirements that may have been granted to a charter holder as a result of the new school designation. 42 TexReg 2926 June 2, 2017 Texas Register

43 (13) High-Quality Campus Designation. A High-Quality Campus Designation is a separate designation and must be paired with an expansion amendment. If approved by the commissioner, this designation permits a charter holder to establish an additional charter school campus under an existing open-enrollment charter school pursuant to federal non-regulatory guidance. Charter holders of charter schools that receive High-Quality Campus Designation from the commissioner will be eligible to participate in the charter school program competitive grant process when federal funding for the Texas charter school program is available. (A) The commissioner may approve a High-Quality Campus Designation for a charter only if: (i) the charter holder meets all requirements applicable to an expansion amendment set forth in this section and has operated at least one charter school campus in Texas for a minimum of five consecutive years; (ii) the charter school has been evaluated under the accountability rating system established in of this title currently with at least 50% of the student population in grades assessed by the state accountability system, has an accreditation status of Accredited, and is currently evaluated under the standard accountability procedures and received the highest or second highest district rating for three of the last five years with all of the campuses operated under the charter also receiving the highest or second highest rating as defined by (26) of this title in the most recent state accountability ratings; (iii) no charter campus has been identified for federal interventions in the most current report; (iv) the charter school is not under any sanction imposed by TEA authorized under TEC, Chapter 39; Chapter 97, Subchapter EE, of this title (relating to Accreditation Status, Standards, and Sanctions); or federal requirements; (v) the charter holder completes an application approved by the commissioner; (vi) the new charter school campus will serve at least 100 students in its first year of operation; (vii) the amendment complies with all requirements of this paragraph; and (viii) the commissioner determines that the designation is in the best interest of the students of Texas. (B) In addition to the requirements of subparagraph (A) of this paragraph, the commissioner may approve a High-Quality Campus Designation only on making the following written findings: (i) the proposed school satisfies each element of the definition of a public charter school as set forth in federal law; (ii) the proposed school campus is separate and distinct from the existing charter school campus(es) established under the open-enrollment charter school with a separate facility and county-district-campus number; and (iii) the open-enrollment charter school, as amended, includes a separate written performance agreement for the proposed school campus that meets the requirements of federal law and TEC, (a)(3) and (4). (C) In making the findings required by subparagraph (B)(i) and (iii) of this paragraph, the commissioner shall consider: (i) the terms of the open-enrollment charter school as a whole, as modified by the High-Quality Campus Designation; and (ii) whether the proposed school campus shall be established and recognized as a separate school under Texas law. (D) In making the findings required by subparagraph (B)(ii) of this paragraph, the commissioner shall consider whether the proposed school campus and the existing charter school campus(es) have separate sites, employees, student populations, and governing bodies and whether their day-to-day operations are carried out by different officers. The presence or absence of any one of these elements, by itself, does not determine whether the proposed school campus will be found to be separate or part of an existing school. However, the presence or absence of several elements will inform the commissioner's decision. (E) In making the finding required by subparagraph (B)(iii) of this paragraph, the commissioner shall consider: (i) whether the proposed school campus and the existing charter school campus(es) have distinctly different requirements in their respective written performance agreements; (ii) whether an annual independent financial audit of the proposed school campus is to be conducted. The high-quality campus must have a plan for a separate audit schedule apart from the open-enrollment charter school audit; and (iii) the extent to which the performance agreement for the proposed school campus imposes higher standards than those imposed by TEC, (b)(2)(L). (F) Failure to meet any standard or requirement outlined in this paragraph or agreed to in a performance agreement under subparagraph (B)(iii) of this paragraph shall mean the immediate termination of any federal charter school program grant and/or any waiver exempting a charter from some of the expansion amendment requirements that may have been granted to a charter holder as a result of the High-Quality Campus Designation. (14) Delegation amendment. A delegation amendment is an amendment that permits a charter holder to delegate, pursuant to (c) of this title (relating to Delegation of Powers and Duties), the powers or duties of the governing body of the charter holder to any other person or entity. (A) The commissioner may approve a delegation amendment only if: (i) the charter holder meets all requirements applicable to delegation amendments and amendments generally; (ii) the amendment complies with all requirements of Chapter 100, Subchapter AA, Division 5, of this title (relating to Charter School Governance); and (iii) the commissioner determines that the amendment is in the best interest of the students enrolled in the charter school. (B) The commissioner may grant the amendment without condition or may require compliance with such conditions and/or requirements as may be in the best interest of the students enrolled in the charter school. (C) The following powers and duties must generally be exercised by the governing body of the charter holder itself, acting as a body corporate in meetings posted in compliance with Texas Government Code, Chapter 551. Absent a specific written exception of this subparagraph, setting forth good cause why a specific function listed in clauses (i)-(vi) of this subparagraph cannot reasonably be carried out by the charter holder governing body, the commissioner may not grant an amendment delegating such functions to any person or entity through a contract for management services or otherwise. An amend- ADOPTED RULES June 2, TexReg 2927

44 ment that is not authorized by such a specific written exception is not effective for any purpose. Absent such exception, the governing body of the charter holder shall not delegate: (i) final authority to hear or decide employee grievances, citizen complaints, or parental concerns; (ii) final authority to adopt or amend the budget of the charter holder or the charter school, or to authorize the expenditure or obligation of state funds or the use of public property; (iii) final authority to direct the disposition or safekeeping of public records, except that the governing body may delegate this function to any person, subject to the governing body's superior right of immediate access to, control over, and possession of such records; (iv) final authority to adopt policies governing charter school operations; (v) final authority to approve audit reports under TEC, (d); or (vi) initial or final authority to select, employ, direct, evaluate, renew, non-renew, terminate, or set compensation for the superintendent or, as applicable, the administrator serving as the educational leader and chief executive officer. (D) The following powers and duties must be exercised by the superintendent or, as applicable, the administrator serving as the educational leader and chief executive officer of the charter school. Absent a specific written exception of this subparagraph, setting forth good cause why a specific function listed in clauses (i)-(iii) of this subparagraph cannot reasonably be carried out by the superintendent or, as applicable, the administrator serving as the educational leader and chief executive officer of the charter school, the commissioner may not grant an amendment permitting the superintendent/chief executive officer to delegate such function through a contract for management services or otherwise. An amendment that is not authorized by such a specific written exception is not effective for any purpose. Absent such exception, the superintendent/chief executive officer of the charter school shall not delegate final authority: (i) to organize the charter school's central administration; by law; or (iii) to select and terminate charter school employees or officers. (ii) to approve reports or data submissions required (c) Required forms and formats. The TEA division responsible for charter schools may develop and promulgate, from time to time, forms or formats for requesting charter amendments under this section. If a form or format is promulgated for a particular type of amendment, it must be used to request an amendment of that type. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 19, TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Effective date: June 8, 2017 Proposal publication date: November 25, 2016 For further information, please call: (512) TITLE 22. EXAMINING BOARDS PART 15. TEXAS STATE BOARD OF PHARMACY CHAPTER 281. ADMINISTRATIVE PRACTICE AND PROCEDURES SUBCHAPTER C. DISCIPLINARY GUIDELINES 22 TAC The Texas State Board of Pharmacy adopts amendments to , concerning Definitions of Discipline Authorized. These amendments are adopted without changes to the proposed text as published in the March 10, 2017, issue of the Texas Register (42 TexReg 1078). The amendments update the definition of probation and revocation. No comments were received. The amendments are adopted under , , , and of the Texas Pharmacy Act (Chapters , Texas Occupations Code). The Board interprets as authorizing the agency to protect the public through the effective control and regulation of the practice of pharmacy. The Board interprets (a) as authorizing the agency to adopt rules for the proper administration and enforcement of the Act. The Board interprets and as authorizing the agency to discipline a license or registration. The statutes affected by these amendments: Texas Pharmacy Act, Chapters , Texas Occupations Code. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 22, TRD Gay Dodson, R.Ph. Executive Director Texas State Board of Pharmacy Effective date: June 11, 2017 Proposal publication date: March 10, 2017 For further information, please call: (512) TAC The Texas State Board of Pharmacy adopts amendments to concerning Schedule of Administrative Penalties. These amendments are adopted with changes to the proposed text as published in the March 10, 2017, issue of the Texas 42 TexReg 2928 June 2, 2017 Texas Register

45 Register (42 TexReg 1078). The changes are grammatical and formatting corrections. The amendments add an administrative penalty for operating a Class E or Class E-S pharmacy without a Texas licensed pharmacist and accessing information submitted to the Prescription Monitoring Program in violation of the Texas Controlled Substances Act. No comments were received. The amendments are adopted under and of the Texas Pharmacy Act (Chapters , Texas Occupations Code). The Board interprets as authorizing the agency to protect the public through the effective control and regulation of the practice of pharmacy. The Board interprets (a) as authorizing the agency to adopt rules for the proper administration and enforcement of the Act. The statutes affected by these amendments: Texas Pharmacy Act, Chapters , Texas Occupations Code Schedule of Administrative Penalties. The board has determined that the assessment of an administrative penalty promotes the intent of of the Act. In disciplinary matters, the board may assess an administrative penalty in addition to any other disciplinary action in the circumstances and amounts as follows: (1) The following violations by a pharmacist may be appropriate for disposition with an administrative penalty with or without additional sanctions or restrictions: (A) failing to provide patient counseling: $1,000; (B) failing to conduct a drug regimen review or inappropriate drug regimen reviews provided by (c)(2)(A): $1,000; $1,000; (C) failing to clarify a prescription with the prescriber: (D) failing to properly supervise or improperly delegating a duty to a pharmacy technician: $1,000; (E) failing to identify the dispensing pharmacist on required pharmacy records: $500; (F) failing to maintain records of prescriptions: $500; (G) failing to respond or failing to provide all requested records within the time specified in a board audit of continuing education records: $100 per hour of continuing education credit not provided; (H) failing to provide or providing false or fraudulent information on any application, notification, or other document required under this Act, the Dangerous Drug Act, or Controlled Substances Act, or rules adopted pursuant to those Acts: $1,000; (I) following an accountability audit, shortages of prescription drugs: up to $5,000; (J) dispensing a prescription drug pursuant to a forged, altered, or fraudulent prescription: up to $5,000; $5,000; (K) dispensing unauthorized prescriptions: up to (L) dispensing controlled substances or dangerous drugs to an individual or individuals in quantities, dosages, or for periods of time which grossly exceed standards of practice, approved labeling of the federal Food and Drug Administration, or the guidelines published in professional literature: up to $5,000; (M) violating a disciplinary order of the Board or a contract under the program to aid impaired pharmacists or pharmacy students under Chapter 564 of the Act: $500 - $1,000; (N) failing to report or to assure the report of a malpractice claim: up to $1,000; (O) failing to respond within the time specified on a warning notice to such warning notice issued as a result of a compliance inspection or responding to a warning notice as a result of a compliance inspection in a manner that is false or misleading: up to $1,000; (P) $250 - $1,000; practicing pharmacy with a delinquent license: (Q) operating a pharmacy with a delinquent license: $1,000 - $5, 000; (R) allowing an individual to perform the duties of a pharmacy technician without a valid registration: $500 - $2,000; (S) failing to comply with the requirements of the Official Prescription Program: up to $1,000; (T) aiding and abetting the unlicensed practice of pharmacy, if the pharmacist knew or reasonably should have known that the person was unlicensed at the time: up to $5,000; (U) receiving a conviction or deferred adjudication for a misdemeanor or felony, which serves as a ground for discipline under the Act: up to $5,000; (V) unauthorized substitutions: $1,000; (W) submitting false or fraudulent claims to third parties for reimbursement of pharmacy services: up to $5,000; (X) selling, purchasing, or trading, or offering to sell, purchase, or trade of misbranded prescription drugs or prescription drugs beyond the manufacturer's expiration date: up to $1,000; (Y) selling, purchasing, or trading, or offering to sell, purchase, or trade of prescription drug samples as provided by 281.7(a)(27) of this title (relating to Grounds for Discipline for a Pharmacist License): up to $1,000; (Z) failing to keep, maintain or furnish an annual inventory as required by : $1,000; (AA) failing to obtain training on the preparation of sterile pharmaceutical compounding: $1,000; (BB) failing to maintain the confidentiality of prescription records: $1,000 - $5,000; (CC) failing to inform the board of any notification or information required to be reported by the Act or rules: $250 - $500; (DD) failing to operate a pharmacy as provided by of this title (relating to Operation of a Pharmacy): $2,000; and (EE) accessing information submitted to the Prescription Monitoring Program in violation of of the Controlled Substances Act: $1,000 - $5,000. (2) The following violations by a pharmacy may be appropriate for disposition with an administrative penalty with or without additional sanctions or restrictions: (A) failing to provide patient counseling: $1,500; (B) failing to conduct a drug regimen review or inappropriate drug regimen reviews provided by (c)(2)(A) of this title (relating to Operational Standards): $1,500; ADOPTED RULES June 2, TexReg 2929

46 $1,500; (C) failing to clarify a prescription with the prescriber: (D) failing to properly supervise or improperly delegating a duty to a pharmacy technician: $1,500; (E) failing to identify the dispensing pharmacist on required pharmacy records: $500; (F) failing to maintain records of prescriptions: $500; (G) failing to provide or providing false or fraudulent information on any application, notification, or other document required under this Act, the Dangerous Drug Act, or Controlled Substances Act, or rules adopted pursuant to those Acts: $1,000; (H) following an accountability audit, shortages of prescription drugs: up to $5,000; (I) dispensing a prescription drug pursuant to a forged, altered, or fraudulent prescription: up to $5,000; $5,000; (J) dispensing unauthorized prescriptions: up to (K) dispensing controlled substances or dangerous drugs to an individual or individuals in quantities, dosages, or for periods of time which grossly exceed standards of practice, approved labeling of the federal Food and Drug Administration, or the guidelines published in professional literature: up to $5,000; - $5,000; (L) violating a disciplinary order of the Board: $1,000 (M) failing to report or to assure the report of a malpractice claim: up to $1,000; (N) failing to respond within the time specified on a warning notice to such warning notice issued as a result of a compliance inspection or responding to a warning notice as a result of a compliance inspection in a manner that is false or misleading: up to $1,000; (O) allowing a pharmacist to practice pharmacy with a delinquent license: $250 - $1,000; (P) operating a pharmacy with a delinquent license: $1,000 - $5,000; (Q) allowing an individual to perform the duties of a pharmacy technician without a valid registration: $500 - $3,000; (R) failing to comply with the requirements of the Official Prescription Program: up to $1,000; (S) aiding and abetting the unlicensed practice of pharmacy, if an employee of the pharmacy knew or reasonably should have known that the person engaging in the practice of pharmacy was unlicensed at the time: up to $5,000; (T) receiving a conviction or deferred adjudication for a misdemeanor or felony which serves as a ground for discipline under the Act: up to $5,000; (U) unauthorized substitutions: $1,000; (V) submitting false or fraudulent claims to third parties for reimbursement of pharmacy services: up to $5,000; (W) possessing or engaging in the sale, purchase, or trade or the offer to sell, purchase, or trade of misbranded prescription drugs or prescription drugs beyond the manufacturer's expiration date: up to $1,000; (X) possessing or engaging in the sale, purchase, or trade or the offer to sell, purchase, or trade of prescription drug samples as provided by 281.8(b)(2) of this title (relating to Grounds for Discipline for a Pharmacy License): up to $1,000; (Y) failing to keep, maintain or furnish an annual inventory as required by of this title (relating to Inventory Requirements): $1,000; (Z) failing to obtain training on the preparation of sterile pharmaceutical compounding: $1,500; (AA) failing to maintain the confidentiality of prescription records: $1,000 - $5,000; (BB) failing to inform the board of any notification or information required to be reported by the Act or rules: $250 - $500; (CC) failing to operate a pharmacy as specified in of this title (relating to Operation of a Pharmacy): $3,000; and (DD) operating a Class E or Class E-S pharmacy without a Texas licensed pharmacist-in-charge: $1,000 - $5,000. (3) The following violations by a pharmacy technician may be appropriate for disposition with an administrative penalty with or without additional sanctions or restrictions: (A) failing to respond or failing to provide all requested records within the time specified in a board audit of continuing education records: $30 per hour of continuing education credit not provided; (B) failing to provide or providing false or fraudulent information on any application, notification, or other document required under this Act, the Dangerous Drug Act, or Controlled Substances Act, or rules adopted pursuant to those Acts: $500; (C) following an accountability audit, shortages of prescription drugs: up to $5,000; $500; (D) violating a disciplinary Order of the Board: $250 - (E) failing to report or to assure the report of a malpractice claim: up to $500; (F) performing the duties of a pharmacy technician without a valid registration: $250 - $1,000; (G) receiving a conviction or deferred adjudication for a misdemeanor or felony, which serves as a ground for discipline under the Act: up to $5,000; (H) submitting false or fraudulent claims to third parties for reimbursement of pharmacy services: up to $5,000; (I) failing to obtain training on the preparation of sterile pharmaceutical compounding: $1,000; (J) failing to maintain the confidentiality of prescription records: $1,000 - $5,000; (K) failing to inform the board of any notification or information required to be reported by the Act or rules: $100 - $250; and (L) accessing information submitted to the Prescription Monitoring Program in violation of of the Controlled Substances Act: $1,000 - $5,000. (4) Any of the violations listed in this section may be appropriate for disposition by the administrative penalties in this section in conjunction with any other penalties in of this chapter. (5) Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty or fine. 42 TexReg 2930 June 2, 2017 Texas Register

47 (6) The amount, to the extent possible, shall be based on: (A) the seriousness of the violation, including the nature, circumstances, extent, and gravity of any prohibited act, and the hazard or potential hazard created to the health, safety, or economic welfare of the public; (B) the economic harm to property or the environment caused by the violation; (C) the history of previous violations; (D) the amount necessary to deter a future violation; (E) efforts to correct the violation; and (F) and other matter that justice may require. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 22, TRD Gay Dodson, R.Ph. Executive Director Texas State Board of Pharmacy Effective date: June 11, 2017 Proposal publication date: March 10, 2017 For further information, please call: (512) CHAPTER 291. PHARMACIES SUBCHAPTER A. ALL CLASSES OF PHARMACIES 22 TAC The Texas State Board of Pharmacy adopts amendments to concerning Required Notification. These amendments are adopted without changes to the proposed text as published in the March 10, 2017, issue of the Texas Register at (42 TexReg 1080). The amendments update the requirements for a change of name for a pharmacy; update the notification requirements for internet sites verified by NABP; add a requirement for pharmacies and pharmacists to report disciplinary action by another state to TSBP as required by of the Act; and clarify requirements to be consistent with other sections of the rules. CVSHeatlh submitted a comment in support of the rule amendments requiring non-resident pharmacies and pharmacists to notify the Board of any final order taken by another state. The Board agrees with the comment. The amendments are adopted under and of the Texas Pharmacy Act (Chapters , Texas Occupations Code). The Board interprets as authorizing the agency to protect the public through the effective control and regulation of the practice of pharmacy. The Board interprets (a) as authorizing the agency to adopt rules for the proper administration and enforcement of the Act. The statutes affected by these amendments: Texas Pharmacy Act, Chapters , Texas Occupations Code. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 22, TRD Gay Dodson, R. Ph. Executive Director Texas State Board of Pharmacy Effective date: June 11, 2017 Proposal publication date: March 10, 2017 For further information, please call: (512) SUBCHAPTER C. NUCLEAR PHARMACY (CLASS B) 22 TAC The Texas State Board of Pharmacy adopts amendments to concerning Definitions. These amendments are adopted without changes to the proposed text as published in the March 10, 2017, issue of the Texas Register (42 TexReg 1083). The amendments add the definition of a full-time pharmacist to the Nuclear (Class B) pharmacy rules. No comments were received. The amendments are adopted under and of the Texas Pharmacy Act (Chapters , Texas Occupations Code). The Board interprets as authorizing the agency to protect the public through the effective control and regulation of the practice of pharmacy. The Board interprets (a) as authorizing the agency to adopt rules for the proper administration and enforcement of the Act. The statutes affected by these amendments: Texas Pharmacy Act, Chapters , Texas Occupations Code. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 22, TRD Gay Dodson, R. Ph. Executive Director Texas State Board of Pharmacy Effective date: June 11, 2017 Proposal publication date: March 10, 2017 For further information, please call: (512) CHAPTER 315. CONTROLLED SUBSTANCES 22 TAC The Texas State Board of Pharmacy adopts amendments to 315.3, concerning Definitions. These amendments are adopted with changes to the proposed text as published in the March 10, 2017, issue of the Texas Register (42 TexReg 1085). ADOPTED RULES June 2, TexReg 2931

48 The amendments clarify the requirements for dispensing schedule II prescriptions when issued as a multiple set. The board made changes to clarify the language regarding the requirements to dispense a prescription no later than 21 days after the date of issuance. No comments were received. The amendments are adopted under and of the Texas Pharmacy Act (Chapters , Texas Occupations Code). The Board interprets as authorizing the agency to protect the public through the effective control and regulation of the practice of pharmacy. The Board interprets (a) as authorizing the agency to adopt rules for the proper administration and enforcement of the Act. The statutes affected by these amendments: Texas Pharmacy Act, Chapters , Texas Occupations Code Prescriptions - Effective September 1, (a) Schedule II Prescriptions. (1) Except as provided by subsection (e) of this section, a practitioner, as defined in the TCSA, (39)(A), must issue a written prescription for a Schedule II controlled substance only on an official Texas prescription form or through an electronic prescription that meets all requirements of the TCSA. This subsection also applies to a prescription issued in an emergency situation. (2) A practitioner who issues a written prescription for any quantity of a Schedule II controlled substance must complete an official prescription form. (3) A practitioner may issue multiple written prescriptions authorizing a patient to receive up to a 90-day supply of a Schedule II controlled substance provided: (A) each prescription is issued for a legitimate medical purpose by a practitioner acting in the usual course of professional practice; (B) the practitioner provides written instructions on each prescription, other than the first prescription if the practitioner intends for that prescription to be filled immediately, indicating the earliest date on which a pharmacy may dispense each prescription; and (C) the practitioner concludes that providing the patient with multiple prescriptions in this manner does not create an undue risk of diversion or abuse. (4) A schedule II prescription must be dispensed no later than 21 days after the date of issuance or, if the prescription is part of a multiple set of prescriptions, issued on the same day, no later than 21 days after the earliest date on which a pharmacy may dispense the prescription as indicated on each prescription. (b) Schedules III through V Prescriptions. (1) A practitioner, as defined in the TCSA, (39)(A), (C), (D), may use prescription forms and order forms through individual sources. A practitioner may issue, or allow to be issued by a person under the practitioner's direction or supervision, a Schedule III through V controlled substance on a prescription form for a valid medical purpose and in the course of medical practice. (2) Schedule III through V prescriptions may be refilled up to five times within six months after date of issuance. (c) Electronic prescription. A practitioner is permitted to issue and to dispense an electronic controlled substance prescription only in accordance with the requirements of the Code of Federal Regulations, Title 21, Part (d) Controlled substance prescriptions may not be postdated. (e) Advanced practice registered nurses or physician assistants may only use the official prescription forms issued with their name, address, phone number, and DEA numbers, and the delegating physician's name and DEA number. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 22, TRD Gay Dodson, R. Ph. Executive Director Texas State Board of Pharmacy Effective date: June 11, 2017 Proposal publication date: March 10, 2017 For further information, please call: (512) PART 22. TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY CHAPTER 501. RULES OF PROFESSIONAL CONDUCT SUBCHAPTER C. RESPONSIBILITIES TO CLIENTS 22 TAC The Texas State Board of Public Accountancy adopts an amendment to , concerning Confidential Client Communications, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1319) and will not be republished. The amendment to has the rule more closely track the language in Chapter 901 of the Occupations Code, requires the licensee to take measures to maintain the confidentiality of client records and to notify the client of a loss or loss of control over client records. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD TexReg 2932 June 2, 2017 Texas Register

49 J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) CHAPTER 511. ELIGIBILITY SUBCHAPTER D. CPA EXAMINATION 22 TAC The Texas State Board of Public Accountancy adopts an amendment to , concerning Granting of Credit, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1321) and will not be republished. The amendment to will allow a three month extension to the normal 18 months that an applicant for the CPA certificate may retain their exam grade to address the delay caused by the exam restructure. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) CHAPTER 512. CERTIFICATION BY RECIPROCITY 22 TAC The Texas State Board of Public Accountancy adopts an amendment to 512.1, concerning Certification as a Certified Public Accountant by Reciprocity, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1322) and will not be republished. The amendment to adds a provision for good moral character as a basis for reciprocity for the CPA certificate in Texas. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy adopts an amendment to 512.2, concerning NASBA Verified Substantially Equivalent Jurisdictions, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1323) and will not be republished. The amendment to adds a comma in subsection (a). No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy adopts an amendment to 512.4, concerning Application for Certification by Reciprocity, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1324) and will not be republished. The amendment to mirrors the new language found in and ADOPTED RULES June 2, TexReg 2933

50 No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy adopts an amendment to 512.5, concerning Examination Authorization, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1325) and will not be republished. The amendment to clarifies that an applicant needs a passing score. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) CHAPTER 513. REGISTRATION SUBCHAPTER A. REGISTRATION OF CPAS AND PERSONS HOLDING SIMILAR TITLES IN FOREIGN COUNTRIES 22 TAC The Texas State Board of Public Accountancy adopts an amendment to 513.1, concerning Registration of Foreign Practitioners with Substantially Equivalent Qualifications, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1326) and will not be republished. The amendment to incorporates language from proposed repealed rules and No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) SUBCHAPTER A. REGISTRATION OF CPAS OF OTHER STATES AND PERSONS HOLDING SIMILAR TITLES IN FOREIGN COUNTRIES 22 TAC The Texas State Board of Public Accountancy adopts the repeal of 513.2, concerning Application for Registration of Foreign Practitioners, without changes to the proposed text as published in the March 24, 2017 issue of the Texas Register (42 TexReg 1327) and will not be republished. The repeal of is necessary because the rule is no longer applicable as foreign applicants will be considered under the board's reciprocity rules. No comments were received regarding adoption of the repeal. The repeal is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD TexReg 2934 June 2, 2017 Texas Register

51 J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy adopts the repeal of 513.3, concerning Board Approval of Foreign Practitioner Registration, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1327). The adopted rule will not be republished. The repeal of is necessary because the rule is no longer applicable as foreign applications will be considered under the board s reciprocity rules. No comments were received regarding adoption of the repeal. The repeal is adopted under the Public Accountancy Act (Act), Texas Occupations Code, , which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) SUBCHAPTER B. REGISTRATION OF CPA FIRMS 22 TAC The Texas State Board of Public Accountancy adopts an amendment to , concerning Firm License, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1328). The amended rule text will not be republished. The amendment to deletes an unnecessary rule reference and clarifies who within a firm must supervise attest services. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy adopts an amendment to , concerning Certification of Corporate Franchise Tax Status, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1329) and will not be republished. The amendment to revises language in subsection (b) to track language in subsection (a). No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy adopts an amendment to , concerning Firm Offices, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1330) and will not be republished. The amendment to clarifies the exemption requirement of Texas residency for resident managers. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. ADOPTED RULES June 2, TexReg 2935

52 No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) CHAPTER 514. CERTIFICATION AS A CPA 22 TAC The Texas State Board of Public Accountancy adopts an amendment to 514.3, concerning Replacement Certificates, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1330) and will not be republished. The amendment to deletes unnecessary language. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) CHAPTER 515. LICENSES 22 TAC The Texas State Board of Public Accountancy adopts an amendment to 515.3, concerning License Renewals for Individuals and Firm Offices, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1331) and will not be republished. The amendment to deletes the unnecessary word "toll". No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy adopts an amendment to 515.4, concerning License Expiration, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1332) and will not be republished. The amendment to replaces the word "will" with "shall" to clarify that it is required. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy adopts an amendment to 515.5, concerning Reinstatement of a Certificate or License in the Absence of a Violation of the Board's Rules of Professional Conduct, without changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1333) and will not be republished. 42 TexReg 2936 June 2, 2017 Texas Register

53 The amendment to clarifies the process by which an individual, in the absence of a violation of a Rules of Professional Conduct, can reinstate their license. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 18, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: June 7, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TITLE 25. HEALTH SERVICES PART 11. CANCER PREVENTION AND RESEARCH INSTITUTE OF TEXAS CHAPTER 701. POLICIES AND PROCEDURES 25 TAC The Cancer Prevention and Research Institute of Texas ("CPRIT" or "the Institute") adopts an amendment to clarify the definition of relative without changes to the text as published in the March 3, 2017, issue of the Texas Register (42 TexReg 997). Reasoned Justification The proposed amendment removes "uncle, aunt, niece, or nephew," which the Institute listed inaccurately as examples of relatives related within the second degree by consanguinity or affinity. Texas Government Code characterizes uncles, aunts, nieces, and nephews as relatives within the third degree of consanguinity. Summary of Public Comments and Staff Recommendation CPRIT received one comment in response to this proposed rulemaking. Dr. Richard Luduena from University of Texas Health San Antonio requested that the definition of "relative" be "expanded to include sons-in law, daughters-in law, brothers-in-law, sisters-in-law, fathers-in-law, mothers-in-law, uncles, aunts, nephews, nieces and first cousins...a compromise might be to allow conflicts in this degree (uncles, aunts, in-laws, etc.), but to make certain that they are disclosed and perhaps the degree of the relationship described." According to the statutory descriptions of consanguinity and affinity in Texas Government Code , CPRIT's rule already includes some of the relationships identified by Dr. Luduena (sons-in law, daughters-in law, brothers-in-law, sisters-in-law, fathers-in-law, and mothers-in-law) within the first or second degree of consanguinity or affinity; therefore no change is necessary. However, CPRIT declines to make the requested change to include uncles, aunts, nephews, nieces, and cousins. The amendment as proposed is consistent with Texas Health & Safety Code Annotated , which establishes the second degree of consanguinity and affinity civil standard for determining prohibited conflicts of interest. Uncles, aunts, nieces, nephews, and cousins are related via third or fourth degrees of consanguinity and outside the statutory direction in Texas Health & Safety Code The Institute adopts the amendment under the authority of the Texas Health and Safety Code Annotated, and , which provides the Institute with broad rule-making authority to administer the chapter, including rules for awarding grants. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 19, TRD Heidi McConnell Chief Operating Officer Cancer Prevention and Research Institute of Texas Effective date: June 8, 2017 Proposal publication date: March 3, 2017 For further information, please call: (512) CHAPTER 703. GRANTS FOR CANCER PREVENTION AND RESEARCH 25 TAC 703.5, 703.6, , The Cancer Prevention and Research Institute of Texas ("CPRIT" or "the Institute") adopts the amendments 703.5, 703.6, , and without changes to the proposed text as published in the March 3, 2017, issue of the Texas Register (42 TexReg 1001). The proposed changes affect conflicts of interest prohibitions of Scientific Research and Prevention Program Committee Members, Product Development Review Council role in due diligence, the matching fund requirements of Academic Research and Product Development Research grantees, and disapproval of Financial Status Reports for untimely supporting documentation. Reasoned Justification The proposed amendment to 703.5(g) prohibits a Scientific Research and Prevention Programs Committee Member from providing professional services to a grant applicant that results in compensation of more than $5,000. The restriction would be in place for one year beginning from the due date of the Grant Application or the effective date of the Grant Award, whichever is later. The proposed amendment to 703.6(c)(4)(B) reflects that the Product Development Review Council decides the applications moving forward in the review process for due diligence. The Review Council's bases their decision on the Grant Applications recommended by the Peer Review Panel(s). ADOPTED RULES June 2, TexReg 2937

54 The proposed amendment to (a) clarifies that the Institute may require a research grant recipient to demonstrate a matching funds obligation greater than one-half of the grant award amount. In the event that the Institute increases the matching funds obligation, the proposed language requires the Institute to include the obligation in the Request for Applications. Texas Health and Safety Code requires research grant recipients to dedicate an amount of matching funds equal to one-half of the grant award. The proposed amendment to allows the Institute to disapprove a Financial Status Report (FSR) if a Grant Recipient does not timely respond to a written request by the Institute for more information or backup documentation. If the Institute submits a request in writing for more information or backup documentation regarding an FSR, the Grant Recipient has 21 days to respond to the request. If there is no response by the Grant Recipient within that timeframe, the Institute will disapprove the FSR. The proposed amendment is not intended to restrict the Institute's ability to disapprove an FSR or to extend the Grant Recipient's FSR due date. Summary of Public Comments and Staff Recommendation CPRIT received no public comments regarding the proposed amendments. The amendments are adopted under the authority of the Texas Health and Safety Code Annotated, and , which provides the Institute with broad rule-making authority to administer the chapter, including rules for awarding grants. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 19, TRD Heidi McConnell Chief Operating Officer Cancer Prevention and Research Institute of Texas Effective date: June 8, 2017 Proposal publication date: March 3, 2017 For further information, please call: (512) TITLE 34. PUBLIC FINANCE PART 1. COMPTROLLER OF PUBLIC ACCOUNTS CHAPTER 3. TAX ADMINISTRATION SUBCHAPTER O. STATE AND LOCAL SALES AND USE TAXES 34 TAC The Comptroller of Public Accounts adopts amendments to 3.293, concerning food; food products; meals; food service, with changes to the proposed text as published in the December 16, 2016, issue of the Texas Register (41 TexReg 9881). The section is amended to reflect the changes made to Tax Code, (Food and Food Products) by the following legislation: Senate Bill 1151, 83rd Legislature, 2013, effective September 1, 2013; House Bill 697, 83rd Legislature, 2013, effective September 1, 2013; House Bill 1905, 84th Legislature, 2015, effective September 1, 2015; and House Bill 2313, 84th Legislature, 2015, effective September 1, Subsection (a) provides definitions. Paragraph (1), defining "bakery items," is amended to delete examples of snack items. This amendment implements Senate Bill 1151, which made "snack items" a defined term by adding subsection (b-1) to Tax Code, In addition, to eliminate possible confusion regarding the use of the term "bars," the paragraph is amended to refer to lemon squares. Paragraph (3), defining "candy," is amended to use the term "candy bars" to avoid confusion regarding the use of the term "bars." Other edits are included to clarify that nuts, raisins, and other fruits that have been coated with chocolate, yogurt, or caramel or have been candied, crystalized, or glazed are considered to be candy. Additional minor edits are adopted to make the paragraph easier to read. Comments on the proposed amendments to the definition of "candy" were received from Mr. James Plamondon, a Senior Tax Analyst with CVS Health. Mr. Plamadon requested that the comptroller define the term "natural or artificial sweeteners." He further requested that the comptroller amend the definition of "candy" to provide examples of candied, crystallized, or glazed nuts and fruits to clarify whether products like honey-roasted nuts fall within the definition of candy. We decline to define the term "natural or artificial sweeteners" at this time. We appreciate the questions Mr. Plamadon has raised regarding the taxability of honey-roasted nuts, and we have revised the definition of "candy" to address them. Guidance provided to taxpayers in a 1989 letter advised: "... honey-roasted peanuts and other honey-roasted nuts, unlike the chocolate covered peanuts and other candy-coated nuts, are exempt food products." See STAR Accession No. 8904L0931B05 (April 25, 1989). However, other letters have found similar products to be candy. See STAR Accession No L (Feb. 11, 2003) (advising that cinnamon-roasted nuts are candy). To promote consistency in the administration of this section, the comptroller is revising the definition of "candy" proposed in the Texas Register to add that nuts roasted with a sweetener are candy. This new policy will be applied on a prospective basis, in accordance with Tax Code, (Retroactive Effect of Rules), from the effective date of the section to give affected sellers time to change their tax collection systems and practices. The 1989 letter on the STAR system will be superseded. In addition, the comptroller is adopting corresponding amendments to the definition of "snack item" in subsection (a)(13), which state that nuts meeting the definition of "candy" are not snack items. Paragraph (4), defining "combine," is amended to replace the word "combine" with the word "join" and amends the definition to be more consistent with the statutory use of the term. Paragraph (5), which defined "eating facilities," is deleted as the term does not appear in the amended section. Subsequent paragraphs are renumbered accordingly. Renumbered paragraph (6), defining "food and food ingredients," is amended to add "snack items" to the representative list of foods and food ingredients. This change implements Senate Bill 1151, which amended the definition of "food products" in Tax Code, (b) to include "snack items." Paragraph (6)(A) 42 TexReg 2938 June 2, 2017 Texas Register

55 is also amended to add oleomargarine and poultry to conform to the statute. Renumbered paragraph (7) is amended to add "delis" and "mobile vendors" to the list of businesses that are like restaurants, lunch counters, and cafeterias, and to describe when a grocery store or convenience store is like a restaurant, lunch counter, or cafeteria. This change implements House Bill 1905 and Tax Code, as amended. Existing paragraph (10) is deleted. The information contained in this paragraph is relocated to new subsection (c)(9). Subsequent paragraphs are renumbered accordingly. New paragraph (13) is added to define "snack items" to implement Senate Bill 1151, which amended Tax Code, to add a definition of the term "snack items," and House Bill 1905, which amended the definition. The definition is taken from the statute without change. Subsection (b) is amended to add "delis" to the list of businesses that are required to collect sales tax on bakery items sold in conjunction with taxable meals. This change implements House Bill 1905, which amended Tax Code, (c-2) to add "delis" as an example of a business selling prepared food. Additional minor edits are adopted to make the subsection easier to read. Subsection (c) is amended by amending paragraph (7) and adding paragraph (9). Paragraph (7) is amended to correct the cross-reference. Paragraph (7)(A) is amended to add the term deli and to make the paragraph easier to read. Paragraph (7)(C), addressing ice cream sundries, is deleted because ice cream and similar items now appear in the definition of "snack items." Paragraph (7)(D) is also deleted because it relies upon the presence or absence of eating facilities to determine when certain ready-to-eat foods are taxable as prepared foods. Because the taxability of sales at these locations is now addressed in the definition of food ready for immediate consumption, a separate subsection addressing the taxability of sales at eating facilities is no longer necessary. All of these changes are made to implement House Bill New paragraph (9) is added to implement Senate Bill 1151, which defined "individual-sized portions" in Tax Code, (h), and added snack items sold in individual-sized portions to the list of food items that are subject to Texas sales tax, and House Bill 1905 which amended that definition. Subsection (d) is amended to alert readers to exemptions from tax on sales made through certain vending machines as provided by subsection (e). Subsection (d)(2) is amended to replace the examples given for "chips, crackers, pretzels" with "snack items" as these products are now included in the definition of "snack items." Subsection (d)(4) is amended to change "his" sales tax return to "the" sales tax return for gender neutral language. Subsection (e) is amended to implement House Bill The title of the subsection is changed from "Bulk vending machine sales" to "Exempt vending machine sales." The language in subsection (e) relating to bulk vending machine sales becomes paragraph (1). New paragraph (2) is added to include the exemption for sales made through vending machines operated by certain nonprofits as provided by House Bill Subsection (f) is amended to include snack items in the list of items exempt when purchased with food stamps if the item can be legally purchased with food stamps. Subsection (g) is amended to implement House Bill 697, which created a sales tax exemption for certain food products sold by booster clubs and similar school support organizations. Paragraphs within the subsection are amended to add snack items to the list of tax-free sales. In addition, paragraph (2) is amended by adding booster clubs and other school support organizations to the list of organizations that may sell prepared food, candy, snack items, and soft drinks tax-free, if the items are sold or served during a regular school day pursuant to an agreement with the proper school authorities. New paragraph (5) is added to include an exemption for sales of food, prepared food, soft drinks, snack items, or candy sold during an event sponsored or sanctioned by an elementary or secondary school or school district at a concession stand operated by a booster club or other school support organization formed to support the school or school district, provided the proceeds from the sales benefit the school or school district. Subsequent paragraphs are renumbered accordingly. Changes are made in subsections (h) and (k) to reflect current rule titles referenced and to correct typographical errors. New subsection (m) is added to clarify taxable food and drink sales of grocery stores and convenience stores. The amendment is adopted under Tax Code, (Comptroller's Rules; Compliance; Forfeiture), which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of Tax Code, Title 2. The amendment implements Tax Code, (Food and Food Products) Food; Food Products; Meals; Food Service. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Bakery items--baked goods typically made by bakeries including bread, rolls, buns, biscuits, bagels, croissants, pastries, doughnuts, Danishes, cakes, tortes, pies, tarts, muffins, lemon squares, cookies, large pretzels, and tortillas. The term does not include candy, snack items, sandwiches, tacos, or pizzas. (2) Bulk vending machine--a device that contains unsorted items and randomly dispenses goods in approximately equal amounts without selection of a particular item or type of item by the customer. (3) Candy--A confection made with natural or artificial sweeteners. Examples include: candy bars; gum; drops; taffy; nuts, raisins, and fruits that have been candied, crystalized, glazed, or coated with chocolate, yogurt, or caramel; and nuts roasted with a sweetener. The term does not include products used exclusively for cooking, such as chocolate bits and cake sprinkles. (4) Combine--To join two or more food products into a single item. (5) Eating utensils--eating utensils include trays, plates, knives, forks, spoons, glasses, cups, or straws. (6) Food and food ingredients--substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for taste, aroma, or nutritional value. ADOPTED RULES June 2, TexReg 2939

56 (A) Food and food ingredients include food products intended for human consumption, such as the following: cereal and cereal products; milk and milk products, butter, and yogurt; oleomargarine; meat and meat products; poultry and poultry products; fish and fish products; eggs and egg products; vegetables and vegetable products; fruit and fruit products; spices, condiments, and salt; sugar products; coffee and coffee substitutes; tea; juice (if more than 50% fruit or vegetable juice by volume); cocoa and cocoa products; canned foods; snack items; or any combination of these. (B) Food products do not include: (i) alcoholic beverages; (ii) cigarettes, tobacco, or tobacco products; (iii) candy; (iv) ice; (v) water; or (vi) drugs, medicines, tonics, vitamins, dietary supplements, and medicinal preparations in any form. For further information about drugs, medicines, and dietary supplements, see of this title (relating to Drugs, Medicines, Medical Equipment and Devices). (7) Food ready for immediate consumption--food, drinks, or meals prepared, served, or sold by restaurants, lunch counters, hotels, cafeterias, delis, mobile vendors, or other like places of business, that, when sold, require no further preparation by the purchaser prior to consumption; and food sold through vending machines. A grocery store or convenience store that contains a restaurant, lunch counter, deli, or other similar location is a like place of business selling food ready for immediate consumption, but only for items sold at that location. (8) Food sold through vending machines--food dispensed from a machine or other mechanical device that accepts payment. (9) Mix--To blend two or more food items together into a single item that is more or less a uniform whole, but each ingredient may or may not retain its identity (e.g., potato salad, coleslaw or seafood salad). (10) Mobile vendor--a person who sells food from a motor vehicle, push cart, or any other form of vehicle. or (11) Prepared food--prepared food means: (A) food ready for immediate consumption; (B) food sold in a heated state or heated by the seller; (C) food sold with eating utensils provided by the seller; (D) two or more food ingredients mixed or combined by the seller for sale as a single item, including items that are sold by weight or volume as a single item, but does not include food that is prepared at an off-site location, refrigerated food that is typically reheated prior to eating, or food that is only cut, repackaged, or pasteurized by the seller. (12) Retirement facility--a facility that provides permanent housing and residence to individuals, a majority of whom are 60 years of age or older. (13) Snack items--snack items means: (A) breakfast bars, granola bars, nutrition bars, sports bars, protein bars, and yogurt bars, unless they are labeled and marketed as candy; (B) snack mix and trail mix; (C) nuts, but not including pine nuts or nuts that have been candied, crystalized, glazed, coated with chocolate, yogurt, or caramel, or roasted with a sweetener; nuts; (D) (E) (F) (G) popcorn; chips, crackers, hard pretzels, pork rinds, and corn sunflower seeds and pumpkin seeds; ice cream, sherbert, and frozen yogurt; and (H) ice pops, juice pops, sorbet, and other frozen fruit items containing not more than 50 percent fruit juice by volume. (14) Soft drinks--carbonated and non-carbonated non-alcoholic beverages that contain natural or artificial sweeteners. The term does not include beverages that contain milk or milk products, soy, rice, or similar milk substitutes, or juices that contain more than 50% vegetable or fruit juice by volume. (b) Sales of exempt food products or water. Food and food ingredients are exempt from sales tax unless otherwise taxable under subsection (c) of this section. Water is exempt as explained in of this title (relating to Water-Related Exemptions). Heated and unheated bakery items are exempt regardless of size or quantity unless sold with plates or other eating utensils provided by the seller. Separately stated charges for bakery items sold by caterers, mobile vendors, or restaurants, fast food outlets, lunch counters, cafeterias, delis, hotels, and other like places of business, are taxable if sold in conjunction with taxable meals for which plates or other eating utensils are provided. For example, a roll served in a restaurant with a meal is taxable even if the roll is served rolled up in a napkin rather than directly on the plate. The restaurant is not required to collect sales tax on bakery items purchased without eating utensils from its bakery. (c) Taxable sales. The following are subject to sales tax: (1) sales of soft drinks; (2) sales of candy; (3) sales of ice; (4) sales of beer, wine, and other alcoholic beverages unless subject to mixed beverage gross receipts tax and mixed beverage sales tax under Tax Code, Chapter 183; (5) sales of cigarettes and other tobacco products; (6) vending machine sales of food, soft drinks, and candy as explained in subsection (d) of this section; (7) sales of prepared food as defined in subsection (a)(11) of this section, including: (A) all food ready for immediate consumption, except bakery items, sold by caterers, mobile vendors, or restaurants, fast food outlets, lunch counters, cafeterias, delis, hotels, and other like places of businesses; and (B) all sandwiches ready for immediate consumption, including refrigerated triangle-type sandwiches such as ham, cheese, tuna, egg salad, or chicken salad, but not sales of sandwiches that are frozen or partially frozen and that require thawing or heating by the customer prior to consumption; (8) sales of bakery items sold with plates or other eating utensils provided by the seller; and (9) sales of snack items sold in individual-sized portions. 42 TexReg 2940 June 2, 2017 Texas Register

57 (A) A snack item is sold in an individual sized-portion if the snack item: or (i) is labeled as having not more than one serving; (ii) contains less than 2.5 ounces. (B) Snack items do not include items sold in prepackaged units containing more than one package. For example, a box containing 6 prepacked, single-serving bags of nuts is not a snack item. (d) Vending machine sales. Except as provided in subsection (e) of this section, food, candy, and soft drinks sold through vending machines are taxable. The sales tax is determined as follows: (1) Soft drink and candy vending machine sales. The vending machine operator must remit sales tax on the total gross receipts from sales of soft drinks and candy without any deduction for spoilage, waste, or other losses. (2) Food product vending machine sales. The vending machine operator must remit sales tax on 50% of the total gross receipts from sales of food products without any deduction for spoilage, waste, or other losses. Examples of food products include snack items, milk, tea, coffee, and juice if more than 50% vegetable or fruit juice by volume. (3) Water, including bottled water, spring water, sparkling water, or mineral water, is exempt from sales tax. A vending machine operator is not required to remit sales tax on the receipts from sales of water. Flavored water (carbonated or non-carbonated) is a soft drink and a vending machine operator must remit tax on the total gross receipts for vending machines sales of flavored water. (4) A vending machine operator must place a sign on the vending machine stating that the vended price includes sales tax. If sales tax is included in the price of the taxable item, the vending machine operator may back out the amount of the tax before reporting the taxable sales on the sales tax return. See of this title (relating to Optional Reporting Methods for Grocers and Other Vendors). (e) Exempt vending machine sales. (1) Bulk vending machine sales. Food, gum, candy, and toys sold for $0.50 or less from a bulk vending machine, as defined in subsection (a)(2) of this section, are exempt from sales tax. A bulk vending machine operator that has only exempt bulk vending machine sales may choose to obtain a sales tax permit and file sales tax returns so that the operator is able to purchase the gum, candy, or toys tax free for resale by giving the supplier a properly completed resale certificate. If a vending machine operator has both taxable vending machine receipts as explained in subsection (d) of this section, and exempt bulk vending machine sales as explained in this subsection, the operator must keep detailed records showing which items are dispensed from the bulk vending machines. (2) Sales through vending machines operated by certain non-profit organizations. (A) The sale of tangible personal property through a vending machine is exempt from the taxes imposed by this chapter if: (i) the sale is made by a nonprofit organization that is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, by being listed as an exempt organization in Section 501(c)(3) of that code; (ii) the machine is owned by the nonprofit organization; and (iii) the machine is stocked and maintained by individuals with special needs as part of an independent life skills and education program operated by the nonprofit organization. (B) A nonprofit organization that makes a sale exempt from taxation under this section must maintain records demonstrating that the sale is eligible for the exemption. (f) Food stamp purchases. Food, candy, snack items, and soft drinks are exempt if purchased with food stamps (including a Texas Lone Star debit card) under the food stamp program (7 U.S.C. Chapter 51) if the item can legally be purchased with food stamps. A seller should apply the amount of food stamps against the purchase of qualifying taxable items first so that the individual receives the best possible benefit from the food stamp exemption. (g) Food sale exemptions. Certain organizations may sell prepared food, candy, snack items, and soft drinks tax-free. These tax-free sales are not counted against the two one-day, tax-free sales allowed to certain exempt nonprofit organizations under of this title (relating to Exempt Organizations). Tax is due on sales of alcoholic beverages. (1) Sales of food, prepared food, soft drinks, snack items, or candy by a church or at a function of the church are exempt. (2) Sales of food, prepared food, soft drinks, snack items, or candy sold or served by public or private elementary or secondary schools, school districts, bona fide student organizations, booster club or other school support organization, or parent-teacher organizations and associations are exempt if the items are sold or served during a regular school day pursuant to an agreement with the proper school authorities. This exemption includes food, soft drinks, snack items, and candy sold through vending machines. (3) Sales of food, prepared food, soft drinks, snack items, or candy by a parent-teacher organization or association during a fundraising sale are exempt if the proceeds do not go to the benefit of an individual. (4) Sales of food, prepared food, soft drinks, snack items, or candy by a group associated with a private or public elementary or secondary school are exempt if the sale is part of a fund-raising drive sponsored by the organization for its exclusive use. (5) Sales of food, prepared food, soft drinks, snack items, or candy during an event sponsored or sanctioned by an elementary or secondary school or school district at a concession stand operated by a booster club or other school support organization formed to support the school or school district are exempt, but only if the proceeds from the sales benefit the school or school district. (6) Sales of food, prepared food, soft drinks, snack items, or candy by a member or volunteer for a nonprofit organization devoted to the exclusive purpose of education or religious or physical training of persons under 19 years of age are exempt if the sale is part of a fund-raising drive sponsored by the organization for its exclusive use. (7) Sales of food, prepared food, soft drinks, snack items, or candy served by hospitals, day care centers, summer camps, or other institutions licensed by the state for the care of humans are exempt if sold or served to the patients, children, students, or residents of the facility. Sales of prepared food, soft drinks, snack items sold in individual-sized portions, and candy to visitors or employees of the facility are taxable. Persons confined in correctional facilities operated under the authority, jurisdiction, or under a contract with the State of Texas or its political subdivisions are not exempt and must pay sales tax when they purchase taxable items such as prepared food, candy, snack items in individual-sized portions, soft drinks, and taxable items sold from ADOPTED RULES June 2, TexReg 2941

58 vending machines. Meals and beverages served without charge to inmates confined in correctional facilities are not taxable. (8) Food, prepared food, soft drinks, snack items, or candy sold or served by a retirement facility to its permanent residents are exempt. Sales of taxable items to visitors or employees of the facility are taxable. (h) Responsibilities of sellers of taxable food and beverages. (1) A seller must collect sales tax on all taxable sales. The seller is required to obtain a sales tax permit, file sales tax returns and remit the tax to the comptroller. See of this title (relating to Seller's and Purchaser's Responsibilities, including Nexus, Permits, Returns and Reporting Periods, and Collection and Exemption Rules). (2) A seller must collect sales tax on the total sales price of taxable items, including separately stated charges for preparing, serving, or delivering taxable items, charges for the room or facility in which the meals and beverages are served, and charges for the cost or expense of items such as reusable tables, chairs, tableware, and tablecloths used by the seller in providing the food service. Reusable items that are used by the food service provider (not rented to the customer) may not be purchased tax free for resale. (A) A cash discount (including a discount coupon) allowed by a seller reduces the sales price of a taxable item, and the seller should collect sales tax on the actual amount paid by the customer for the discounted meals or beverages. For example, a seller should charge sales tax on the price of the single meal when accepting a discount coupon that allows the customer to purchase two meals for the price of one. (B) Separately stated charges for mandatory tips or gratuities may be excluded from the sales price if the charges meet the criteria for exclusion as explained in of this title (relating to Gratuities). Voluntary tips or gratuities left by customers for food service employees are not subject to sales tax. (3) A seller of taxable items must keep accurate records that clearly identify sales of exempt items and sales of taxable items. The records must separately state charges for the exempt items from the charges for taxable items. Examples of records include sales invoices, receipts, and cash register coding records. If a seller's records do not clearly identify exempt sales from taxable sales, all sales are presumed taxable. (4) A seller must pay sales or use tax on the purchase, lease, or rental of all taxable items unless otherwise exempt under the law. Examples of equipment and supply items taxable to a food service business include, but are not limited to, tables, chairs, reusable place mats, tablecloths, cloth napkins, silverware, dishes, dispensers such as salt and pepper shakers and glass creamers, garbage cans and garbage can liners, janitorial items such as mops and mop holders, grill bricks, aprons, menus and menu inserts, and hand tools such as cooking utensils, cutting knives, and lime squeezers. (5) A seller may give a resale certificate to a supplier for the tax-free purchase of items that are transferred to the customer with the food or beverages. Such items must not be reusable by the seller to qualify for the sale for resale exemption. See of this title (relating to Resale Certificates; Sales for Resale). Persons who process food for sale qualify for an exemption on the wrapping and packaging used to package the food for sale and may give an exemption certificate to a supplier. See of this title (relating to Wrapping, Packing, Packaging Supplies, Containers, Labels, Tags, Export Packers, and Stevedoring Materials and Supplies). Examples of items qualifying for exemption include disposable paper products, wooden, plastic, and aluminum products that are transferred to the customer. Other examples include cake boxes, lunch boxes, disposable cups, paper and plastic containers, bottle wraps, butter chip trays, disposable paper or plastic plates, plastic knives, forks, and spoons, paper napkins, soda straws, toothpicks, french fry boxes, stir sticks, ice cream sticks, disposable souffle cups, hot dog trays, and other types of disposable trays. (6) A person processing food for sale is a manufacturer and may claim a sales or use tax exemption on purchases of equipment and other taxable items that qualify for exemption under Tax Code, For example, a restaurant may claim an exemption on the purchase of an oven or a mixer directly used in baking or mixing. See of this title (relating to Manufacturing; Custom Manufacturing; Fabricating; Processing) for further information regarding these exemptions. The exemption in Tax Code, for natural gas and electricity used in manufacturing is not applicable when the gas or electricity is used to prepare or store prepared food. (7) As a matter of convenience, a food service business, such as a restaurant selling prepared food, may sell prepared food tax free to a food service employee immediately before, during, or immediately after the employee's shift. This provision applies to employees involved in preparing or serving food at the food service location. (i) Universities, colleges, junior colleges, or other institutions of higher learning. Universities and colleges are required to collect sales tax on taxable sales as explained in subsection (c) of this section. If a charge for meals is not separately stated and is included in a lumpsum price to a student for room and board, sales tax is due on the portion of the lump-sum charge attributable to the taxable meals. (j) Hotels and other places that provide sleeping accommodations. Persons that provide sleeping accommodations to the public, including motels, tourist houses, lodging houses, inns, rooming houses, bed and breakfast places, must collect hotel occupancy tax under Tax Code, Chapter 156. (1) A hotel must collect tax on prepared food. (2) If the charges for prepared food are not separately stated and are billed with the lodging as a lump-sum price, then hotel occupancy tax, not sales tax, is due on the lump-sum charge. See of this title (relating to Hotel Occupancy Tax Base and Collection of the Tax). (3) A hotel is not required to collect sales tax on a separately stated charge for use of a hotel meeting room if the charge is unrelated to the sale, provision, or service of prepared food or the sale of other taxable items such as an admission charge for a taxable amusement service. See of this title (relating to Amusement Services). The charge for the meeting room is subject to hotel occupancy tax if the meeting room is located in the hotel building where sleeping accommodations are provided. (4) A hotel is required to pay sales tax on its purchase of taxable items (e.g., prepared food purchased from a caterer, soft drinks, candy, ice) provided to guests free of charge as complimentary items. However, a hotel is not required to accrue and pay sales tax on its purchase of exempt food products (loaves of bread, milk, cereal, fruit) even if provided to guests as free complimentary items. (k) Caterers. (1) Caterers are persons engaged in the business of preparing and serving meals, drinks, or other food products at locations designated by customers. A caterer is a seller of prepared food and beverages and must collect sales tax on all charges billed in connection with the sale of taxable meals. (2) A caterer owes tax on the purchase, lease, or rental of such items as tables, chairs, tablecloths, steam tables, and table decora- 42 TexReg 2942 June 2, 2017 Texas Register

59 tions used in providing catered meals. A caterer may claim a resale exemption on the purchase of nonreusable items transferred to customers and a manufacturing exemption on qualifying equipment, such as mixers, used to prepare the food. See of this title for information on qualifying equipment. (3) If a caterer uses a room or facility in a hotel that is subject to hotel occupancy tax, the caterer is required to pay the occupancy tax to the hotel. There is no resale exemption for hotel occupancy tax. In addition, a caterer must collect sales tax on a separately stated charge passed on to the customer for the cost or expense of the room (including the occupancy tax) when billed to a customer as part of the taxable sale of catered meals. (l) For information on the responsibilities of persons who sell and serve mixed alcoholic beverages, see of this title (relating to Alcoholic Beverage Exemptions). (m) Grocery stores and convenience stores. Subject to the exemptions described in subsection (b) of this section, grocery stores and convenience stores should collect sales tax on the items listed in subsection (c) of this section. Taxable items include ice, candy, packaged soft drinks, and prepared food. Food and drinks sold in a heated state, fountain drinks, and food sold with eating utensils are considered to be prepared food ready for immediate consumption regardless of the location in the store from which the food is sold. Other food or drinks that can be immediately consumed and that are sold by a restaurant, lunch counter, deli, or other similar location within the store are also considered to be taxable prepared food. For example, a bottle of unsweetened iced tea sold at a grocery store deli is considered to be ready for immediate consumption and is taxable. However, a bottle of unsweetened iced tea sold at the checkout lane of a grocery store is not considered to be food ready for immediate consumption and is not taxable. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on May 16, TRD Lita Gonzalez General Counsel Comptroller of Public Accounts Effective date: June 5, 2017 Proposal publication date: December 16, 2016 For further information, please call: (512) ADOPTED RULES June 2, TexReg 2943

60

61 Texas Department of Agriculture Requests for Applications for the National Organic Certification Cost Share Program Statement of Purpose: Pursuant to Texas Agriculture Code, and , the Texas Department of Agriculture (TDA) hereby requests applications for the National Organic Certification Cost Share Program (NOCCSP) designed to assist Texas producers with the cost of organic certification. Program Authority: The NOCCSP is authorized under section 10606(d) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 6523(d)), as amended by section 10004(c) of the Agriculture Act of 2014P. L ). Eligibility: The applicant must be a Texas-based business that produces organic crops. Operations must possess current USDA organic certification to be eligible to receive reimbursements. This means operations either must have successfully received their initial USDA organic certification from a USDA-accredited certifying agent, or must have incurred expenses related to the renewal of their USDA organic certification from a USDA-accredited certifying agent between October 1, 2016, and September 30, Operations with suspended, revoked, or withdrawn certifications are ineligible for cost share reimbursement. The applicable NOP regulations and resources for certification are available on the NOP website at Organic operations, certified to the scopes of crops, wild crops, and/or livestock; and/or handlers are eligible to participate in the NOCCSP. WARNING: The Farm Service Agency (FSA) is also offering this National Organic Certification Cost Share Program (NOCCSP). Eligible entities described above may only receive ONE cost-share per organic certificate or category of certification from TDA or FSA, not both. TDA will work with FSA to ensure duplicate awards are not made. If a duplicate award is made, FSA will be the agency to seek collections. Collections may include repayment from the applicant, a reduction in other FSA payments, or a reduction in federal tax payments. Funding Parameters: Applications must be complete and have all required documentation to be considered. Applications missing documentation or otherwise deemed incomplete will not be considered for funding until sufficient information has been received by TDA. Information not received by the application deadline will not be considered. Payments are limited to 75% (seventy-five percent) of an individual producer's certification costs, up to a maximum of $750 (seven hundred and fifty dollars) per certificate or category of certification, per year. Eligible operations may receive one reimbursement per year per certificate or certification scope (if one certificate includes multiple scope certifications). Each certificate may be reimbursed separately. Likewise, each category of certification may be reimbursed separately. Application Requirements and Deadline: Applications will be accepted beginning May 2017, and must be submitted on the form provided by TDA. The application (GTBD-167) is available on TDA's website at TexasAgriculture.gov, or available upon request from TDA by calling (512) The application packet must be received by TDA before close of business (5:00 p.m. CT) on October 31, It is the applicant's responsibility to submit all materials necessary early enough to ensure timely delivery. Applications may be submitted electronically, hand-delivered or mailed. Late or incomplete applications will not be accepted. For questions regarding submission of the proposal and/or TDA requirements, please contact TDA's Grants Office, at (512) , or by at Grants@TexasAgriculture.gov. Texas Public Information Act. Once submitted, all proposals shall be deemed to be the property of the TDA and are subject to the Texas Public Information Act, Texas Government Code, Chapter 552 (PIA). TRD Jessica Escobar Assistant General Counsel Texas Department of Agriculture Filed: May 22, 2017 Office of the Attorney General Settlement of Claims for Clean Air Act, Texas Clean Air Act, and Texas Water Code Violations Notice is hereby given by the State of Texas of the proposed resolution of claims under the Clean Air Act, the Texas Air Act, and the Texas Water Code. The Attorney General will consider any written comments and may withdraw or withhold consent to the proposed agreed judgment if the comments disclose facts or considerations that indicate that the consent is inappropriate, improper, inadequate, or inconsistent with the requirements of applicable laws. Case Title and Court: United States and State of Texas v. Vopak Terminal Deer Park Inc. and Vopak Logistics Services USA Inc., Cause No. 4:17-cv in the United States District Court for the Southern District of Texas. Nature of Defendants Operations: Defendants own and operate a bulk chemical storage tank facility located on the Houston Ship Channel. In the joint Complaint, the United States and the State of Texas allege violations of (1) the New Source Performance Standards ("NSPS") requirements under Section 111 of the Clean Air Act ("CAA") and the implementing regulations, promulgated at 40 C.F.R. Part 60, Subparts A, Ka, and Kb; (2) the National Emission Standards for Hazardous Air Pollutants requirements under Section 112 of the CAA, 42 U.S.C. 7412, and the implementing regulations promulgated at 40 C.F.R. Part 63, Subparts A, DD, and EEEE; (3) the operating permit requirements of Title V of the CAA, and the implementing regulations; (4) the federally enforceable Texas State Implementation Plan; and (5) the facility s operating permit, issued by the Texas Commission on Environmental Quality. IN ADDITION June 2, TexReg 2945

62 Nature of Settlement: The lawsuit will be settled by a consent decree in federal court. Proposed Settlement: The proposed settlement agreement orders Defendants to pay $1,250,000 in civil penalties and $40,000 in attorneys fees to the State of Texas. In addition, the settlement requires Defendants to implement a range of injunctive relief measures, including: (1) constructing and operating a flare and other emission controls at its wastewater treatment system; (2) implementing an advanced tank inspection program at its tank terminal; (3) engaging a third party auditor to review Defendants waste minimization practices and to monitor Defendants compliance with the settlement; and (4) undertaking various other measures to bring the facility into compliance with the Clean Air Act. For a complete description of the proposed settlement, the complete proposed consent decree should be reviewed. Requests for copies of the consent decree and written comments on the proposed settlement should be directed to Ekaterina DeAngelo, Assistant Attorney General, Office of the Texas Attorney General, P.O. Box 12548, Austin, Texas , (512) , facsimile (512) Written comments must be received within 30 days of publication of this notice to be considered. TRD Amanda Crawford General Counsel Office of the Attorney General Filed: May 18, 2017 Office of Consumer Credit Commissioner Notice of Rate Ceilings The Consumer Credit Commissioner of Texas has ascertained the following rate ceilings by use of the formulas and methods described in , , and , Texas Finance Code. The weekly ceiling as prescribed by and for the period of 05/29/17-06/04/17 is 18% for Consumer 1 /Agricultural/Commercial 2 credit through $250,000. The weekly ceiling as prescribed by and for the period of 05/29/17-06/04/17 is 18% for Commercial over $250,000. The judgment ceiling as prescribed by for the period of 06/01/17-06/30/17 is 5.00% for Consumer/Agricultural/Commercial credit through $250,000. The judgment ceiling as prescribed by for the period of 06/01/17-06/30/17 is 5.00% for commercial over $250, Credit for personal, family or household use. 2 Credit for business, commercial, investment or other similar purpose. TRD Leslie Pettijohn Commissioner Office of Consumer Credit Commissioner Filed: May 23, 2017 Court of Criminal Appeals Availability of Grant Funds The Court of Criminal Appeals announces the availability of funds to be provided in the form of grants to entities for the purpose of providing continuing legal education courses, programs, and technical assistance projects for prosecutors, prosecutor office personnel, criminal defense attorneys who regularly represent indigent defendants in criminal matters, clerks, judges, and other court personnel of the appellate courts, district courts, county courts at law, county courts, justice courts and municipal courts of this State, or other persons as provided by statute. The Court of Criminal Appeals also announces the availability of funds to be provided in the form of grants to entities for the purpose of providing continuing legal education courses, programs, and technical assistance projects on actual innocence for law enforcement officers, law students, criminal defense attorneys, prosecuting attorneys, judges, or other persons as provided by statute. Funds are subject to the provisions of Chapter 56 of the Texas Government Code and the General Appropriations Act. The grant period is September 1, 2017 through August 31, The deadline for applications is July 3, Applicants may request an application packet by contacting the Judicial Education Section of the Texas Court of Criminal Appeals: 201 West 14th Street, Suite 103, Austin, TX 78701, (512) , judicialeducation@txcourts.gov. TRD Abel Acosta Clerk of the Court Court of Criminal Appeals Filed: May 17, 2017 Texas Commission on Environmental Quality Agreed Orders The Texas Commission on Environmental Quality (TCEQ, agency, or commission) staff is providing an opportunity for written public comment on the listed Agreed Orders (AOs) in accordance with Texas Water Code (TWC), TWC, requires that before the commission may approve the AOs, the commission shall allow the public an opportunity to submit written comments on the proposed AOs. TWC, requires that notice of the proposed orders and the opportunity to comment must be published in the Texas Register no later than the 30th day before the date on which the public comment period closes, which in this case is July 3, TWC, also requires that the commission promptly consider any written comments received and that the commission may withdraw or withhold approval of an AO if a comment discloses facts or considerations that indicate that consent is inappropriate, improper, inadequate, or inconsistent with the requirements of the statutes and rules within the commission's jurisdiction or the commission's orders and permits issued in accordance with the commission's regulatory authority. Additional notice of changes to a proposed AO is not required to be published if those changes are made in response to written comments. A copy of each proposed AO is available for public inspection at both the commission's central office, located at Park 35 Circle, Building C, 1st Floor, Austin, Texas 78753, (512) and at the applicable regional office listed as follows. Written comments about an AO should be sent to the enforcement coordinator designated for each AO at the commission's central office at P.O. Box 13087, Austin, Texas and must be received by 5:00 p.m. on July 3, Written comments may also be sent by facsimile machine to the enforcement coordinator at (512) The commission's enforcement coordinators are available to discuss the AOs and/or the comment procedure at the listed phone numbers; however, TWC, provides that comments on the AOs shall be submitted to the commission in writing. 42 TexReg 2946 June 2, 2017 Texas Register

63 (1) COMPANY: 82L, LLC dba Tega Kid's Superplex; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LO- CATION: Lubbock, Lubbock County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (e)(4)(A) and (f)(3) and (c)(2)(A) and (f), by failing to submit a Disinfectant Level Quarterly Operating Report (DLQOR) to the executive director (ED) each quarter by the tenth day of the month following the end of the quarter, and failing to timely issue public notification and submit a copy of the notification to the ED regarding the failure to submit a DLQOR; 30 TAC (d)(4)(B) (formerly (c)(4)(B)) and (c)(2)(A) and (f), by failing to collect a raw groundwater source Escherichia coli (E.coli) sample from the facility's one active source within 24 hours of notification of a distribution total coliform-positive result on a routine sample, and failing to timely issue public notification and submit a copy of the notification to the ED regarding the failure to collect a raw groundwater source E.coli sample; 30 TAC (c)(2)(A), (h), and (i)(1), by failing to collect lead and copper tap samples at the required ten sample sites, have the samples analyzed, and report the results to the ED; and 30 TAC (i)(6) and (j), by failing to issue a consumer notification of lead tap water monitoring results to persons served at the sites that were tested, and failing to mail a copy of the consumer notification of tap results to the ED along with certification that the consumer notification has been issued; PENALTY: $1,375; ENFORCEMENT COORDINATOR: Steven Hall, (512) ; REGIONAL OF- FICE: th Street, Suite 100, Lubbock, Texas , (806) (2) COMPANY: 82L, LLC dba Tega Kid's Superplex; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LO- CATION: Lubbock, Lubbock County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (f)(3) and Texas Health and Safety Code (THSC), (c), by failing to comply with the maximum contaminant level (MCL) of milligrams per liter (mg/l) for arsenic based on a running annual average; and 30 TAC (f)(3) and THSC, (c), by failing to comply with the MCL of 4.0 mg/l for fluoride based on a running annual average; PENALTY: $450; ENFORCEMENT COORDINATOR: Steven Hall, (512) ; REGIONAL OFFICE: th Street, Suite 100, Lubbock, Texas , (806) (3) COMPANY: Alorica; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Beaumont, Jefferson County; TYPE OF FACILITY: call center with a emergency generator; RULES VIOLATED: 30 TAC (a)(1) and TWC, (d), by failing to provide corrosion protection for the underground storage tank system; PENALTY: $3,000; ENFORCEMENT COORDINA- TOR: James Boyle, (512) ; REGIONAL OFFICE: 3870 Eastex Freeway, Beaumont, Texas , (409) (4) COMPANY: City of Austin; DOCKET NUMBER: MWD-E; IDENTIFIER: RN ; LOCATION: Austin, Travis County; TYPE OF FACILITY: wastewater treatment facility; RULES VIOLATED: TWC, (a)(1), 30 TAC (1), and Texas Pollutant Discharge Elimination System (TPDES) Permit Number WQ , Permit Conditions Number 2.g, by failing to prevent the discharge of wastewater into or adjacent to water in the state; 30 TAC (1) and (5), and TPDES Permit Number WQ , Operational Requirements Number 1, by failing to ensure that the facility and all its systems of collection, treatment, and disposal are properly operated and maintained; and 30 TAC (1) and TPDES Permit Number WQ , Permit Conditions Number 2.e, by failing to obtain authorization from the commission prior to beginning any change in the permitted facility or activity that may result in noncompliance with any permit requirements; PENALTY: $12,938; Supplemental Environmental Project offset amount of $10,351; ENFORCEMENT COORDINATOR: Melissa Castro, (512) ; REGIONAL OFFICE: Park 35 Circle, Building A, Austin, Texas 78753, (512) (5) COMPANY: City of Melvin; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Melvin, McCulloch County; TYPE OF FACILITY: public water supply; RULES VI- OLATED: 30 TAC (e)(4)(A) and (f)(3), by failing to submit a Disinfectant Level Quarterly Operating Report to the executive director (ED) each quarter by the tenth day of the month following the end of each quarter; 30 TAC (c)(2)(C), (h), and (i)(1), and (c)(2)(A) and (f), by failing to collect lead and copper tap samples, have the samples analyzed, and report the results to the ED, and failing to provide public notification and submit a copy of the public notification to the ED regarding the failure to collect lead and copper tap samples; 30 TAC (c)(2)(B), (h), and (i)(1), by failing to collect lead and copper tap samples, have the samples analyzed, and report the results to the ED; and 30 TAC (b) and (a) and (c), by failing to mail or directly deliver one copy of the Consumer Confidence Report (CCR) to each bill paying customer by July 1st of each year, and failing to submit a copy of the annual CCR and certification that the CCR has been distributed to the customers of the facility and that the information in the CCR is correct and consistent with compliance monitoring data; PENALTY: $762; Supplemental Environmental Project offset amount of $762; ENFORCEMENT COOR- DINATOR: Caleb Olson, (512) ; REGIONAL OFFICE: 622 South Oakes, Suite K, San Angelo, Texas , (325) (6) COMPANY: City of Rhome; DOCKET NUMBER: MWD-E; IDENTIFIER: RN ; LOCATION: Rhome, Wise County; TYPE OF FACILITY: wastewater treatment facility; RULES VIOLATED: TWC, (a)(1), 30 TAC (1), and Texas Pollutant Discharge Elimination System Permit Number WQ , Effluent Limitations and Monitoring Requirements Numbers 1, 2, and 3, by failing to comply with permitted effluent limitations; PENALTY: $8,500; Supplemental Environmental Project offset amount of $6,800; ENFORCEMENT COORDINATOR: Caleb Olson, (512) ; REGIONAL OFFICE: 2309 Gravel Drive Fort Worth, Texas , (817) (7) COMPANY: City of University Park; DOCKET NUMBER: WQ-E; IDENTIFIER: RN ; LOCATION: Dallas, Dallas County; TYPE OF FACILITY: public water supply; RULES VIO- LATED: TWC, (a)(2), by failing to prevent the unauthorized discharge of pollutants into or adjacent to any water of the state; and TWC, (b), by failing to provide notification to the TCEQ of an accidental discharge which caused pollution as soon as possible and no later than 24 hours after the occurrence; PENALTY: $6,000; Supplemental Environmental Project offset amount of $6,000; ENFORCE- MENT COORDINATOR: Caleb Olson, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (8) COMPANY: Comfort Retail, Incorporated dba Comfort Food Mart; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Comfort, Kendall County; TYPE OF FACILITY: convenience store with retail sales of gasoline; RULES VIOLATED: 30 TAC (b)(2) and TWC, (a), by failing to provide release detection for the pressurized piping associated with the underground storage tank system; PENALTY: $7,255; EN- FORCEMENT COORDINATOR: Rajesh Acharya, (512) ; REGIONAL OFFICE: Judson Road, San Antonio, Texas , (210) (9) COMPANY: CtgTx Incorporated dba Valley Ranch Shell; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Irving, Dallas County; TYPE OF IN ADDITION June 2, TexReg 2947

64 FACILITY: convenience store with retail sales of gasoline; RULES VIOLATED: 30 TAC (b)(1)(A) and TWC, (c)(1), by failing to monitor the underground storage tanks for releases at a frequency of at least once every month; PENALTY: $3,375; ENFORCEMENT COORDINATOR: Epifanio Villarreal, (361) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (10) COMPANY: FIRST TEXAS CATTLE COMPANY; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LO- CATION: Hudspeth County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (b)(1) and (e)(3), by failing to provide disinfection facilities for the groundwater supply for the purpose of microbiological control and distribution protection; 30 TAC (j), by failing to use an approved chemical or media for the disinfection of potable water that conforms to the American National Standards Institute/National Sanitation Foundation Standard 60; 30 TAC (e) and Texas Health and Safety Code, (a), by failing to operate the water system under the direct supervision of a water works operator who holds an applicable, valid license; 30 TAC (f)(3)(A)(i)(III), (ii)(iii), and (V), by failing to make water works operation and maintenance records available for review by commission personnel during the investigation; and 30 TAC (s)(2)(C)(i), by failing to verify the accuracy of the manual disinfectant residual analyzer at least once every 90 days using chlorine solutions of known concentrations; PENALTY: $506; ENFORCEMENT COORDINATOR: Ryan Byer, (512) ; REGIONAL OFFICE: 401 East Franklin Avenue, Suite 560, El Paso, Texas , (915) (11) COMPANY: FLAT FORK WATER SUPPLY CORPORA- TION; DOCKET NUMBER: MLM-E; IDENTIFIER: RN ; LOCATION: Center, Shelby County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (c), by failing to update, as appropriate, the drought contingency plan, at least every five years, based on new or updated information, such as the adoption or revision of the regional water plan; 30 TAC (b)(1)(D)(i) and Texas Health and Safety Code (THSC), (c), by failing to provide two or more wells having a total capacity of 0.6 gallons per minute (gpm) per connection for pressure plane 1; 30 TAC (b)(1)(D)(iv) and THSC, (c), by failing to provide an elevated storage capacity of 100 gallons per connection or a pressure tank capacity of 20 gallons per connection for pressure plane 1; 30 TAC (b)(1)(D)(iii) and THSC, (c), by failing to provide two or more pumps that have a total capacity of 2.0 gpm per connection, or that have a total capacity of at least 1,000 gpm and the ability to meet peak hourly demands with the largest pump out of service, whichever is less, at each pump station or pressure plane for pressure plane 1; 30 TAC (m), by failing to initiate maintenance and housekeeping practices to ensure the good working condition and general appearance of the system's facilities and equipment; 30 TAC (c)(3), by failing to maintain the facility's storage tanks in strict accordance with current American Water Works Association Standards with a discharge opening cover that closes automatically and fits tightly with no gap over 1/16 inch; 30 TAC (c)(3)(K), by failing to provide the well with a casing vent that has an opening that is covered with 16-mesh or finer corrosion-resistant screen, facing downward, elevated, and located so as to minimize the drawing of contaminants into the well; 30 TAC (b)(1)(D)(ii) and THSC, (c), by failing to provide a total storage capacity of 200 gallons per connection in pressure plane 1; 30 TAC (z), by failing to create a Nitrification Action Plan for systems distributing chloraminated water; 30 TAC (a) and (b), by failing to develop and maintain an up-to-date chemical and microbiological monitoring plan that identifies all sampling locations, describes the sampling frequency, and specifies the analytical procedures and laboratories that the facility will use to comply with the monitoring requirements; 30 TAC (f)(1), (2), and (3), by failing to provide a purchase water contract for pressure plane 2 which authorizes the purchase of enough water to meet the monthly or annual needs of the purchaser, and establishes the maximum rate at which water may be drafted on a daily and hourly basis; 30 TAC (n)(2), by failing to make available an accurate and up-to-date map of the distribution system so that valves and mains can be easily located during emergencies; 30 TAC (d)(2)(B) and (b)(4), and THSC, (c), by failing to operate the disinfection equipment to maintain a minimum disinfectant residual of 0.5 milligrams per liter total chlorine throughout the distribution system at all times; 30 TAC (f)(2), (3)(B)(iv), (v), and (D)(ii), by failing to maintain water works operation and maintenance records and make them readily available for review by the executive director (ED) upon request; 30 TAC (j), by failing to obtain ED approval prior to using a customer service inspection certificate form which varies from the format found in TCEQ Form 20699; and 30 TAC (i), by failing to adopt an adequate plumbing ordinance, regulations, or service agreement with provisions for proper enforcement to ensure that neither cross-connections nor other unacceptable plumbing practices are permitted; PENALTY: $1,038; ENFORCEMENT COORDINATOR: Michaelle Garza, (210) ; REGIONAL OFFICE: 3870 Eastex Freeway, Beaumont, Texas , (409) (12) COMPANY: Greenbelt Municipal and Industrial Water Authority; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Clarendon, Donley County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (e)(1) and (f)(2), by failing to submit a Total Organic Carbon Monthly Operating Report with the required total organic carbon and alkalinity sampling data to the executive director (ED) each month by the tenth day of the month following the end of the reporting period for the second quarter of 2014 through the first quarter of 2016; and 30 TAC (c)(2)(A) and (f), by failing to provide public notification and submit a copy of the public notification to the ED regarding the failure to submit the Surface Water Monthly Operating Report with the required turbidity and disinfectant residual data for the month of February 2015; PENALTY: $1,417; ENFORCEMENT COORDINATOR: Jim Fisher, (512) ; REGIONAL OFFICE: 3918 Canyon Drive, Amarillo, Texas , (806) (13) COMPANY: Karen Risler dba One Stop Tire Shop; DOCKET NUMBER: MSW-E; IDENTIFIER: RN ; LOCATION: Trinity, Trinity County; TYPE OF FACILITY: maintenance facility for passenger vehicles; RULES VIOLATED: 30 TAC 324.4(1) and 324.6, and 40 Code of Federal Regulations (d), by failing to clean up and properly manage released used oil and other materials; PENALTY: $250; ENFORCEMENT COORDINATOR: Epifanio Villarreal, (361) ; REGIONAL OFFICE: 3870 Eastex Freeway, Beaumont, Texas , (409) (14) COMPANY: Kevin Enterprises Incorporated dba E Z Buy; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: San Antonio, Bexar County; TYPE OF FACILITY: convenience store with retail sales of gasoline; RULES VIOLATED: 30 TAC (b)(1)(A) and TWC, (c)(1), by failing to monitor the underground storage tanks for releases at a frequency of at least once every month; PENALTY: $2,438; ENFORCEMENT COORDINATOR: Carlos Molina, (512) ; REGIONAL OFFICE: Judson Road, San Antonio, Texas , (210) TexReg 2948 June 2, 2017 Texas Register

65 (15) COMPANY: MCDONALD TRANSIT, INCORPORATED; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Austin, Travis County; TYPE OF FACILITY: fleet refueling facility; RULES VIOLATED: 30 TAC (b)(2)(B)(i)(I) and (c)(3)(b), and TWC, (b) and (c)(1), by failing to provide release detection for the gravity or suction piping associated with the underground storage tank (UST) system, and failing to provide release detection capable of monitoring the space between the primary piping walls and the secondary containment wall or barrier for the piping associated with the hazardous UST system; and 30 TAC 334.7(d)(3), by failing to notify the agency of any change or additional information regarding the USTs within 30 days of the occurrence of the change or addition; PENALTY: $9,892; ENFORCEMENT COORDINATOR: Steven Stump, (512) ; REGIONAL OFFICE: Park 35 Circle, Building A, Austin, Texas 78753, (512) (16) COMPANY: MINSA CORPORATION; DOCKET NUMBER: MLM-E; IDENTIFIER: RN ; LOCATION: Mulshoe, Bailey County; TYPE OF FACILITY: masa (corn) flour manufacturing facility; RULES VIOLATED: TWC, (a)(1), 30 TAC (1) and (5), and TCEQ Permit Number WQ , Permit Conditions Number 2.g, by failing to prevent an unauthorized discharge of wastewater into or adjacent to water in the state; 30 TAC (1) and (9)(A), TWC, (b), and TCEQ Permit Number WQ , Monitoring Requirements Number 7.a and 7.b, by failing to report any noncompliance which may endanger human health or safety, or the environment within 24 hours of becoming aware of the noncompliance to the TCEQ Lubbock Regional Office, and provide a written notification within five days of becoming aware of the noncompliance to the TCEQ Lubbock Regional Office and the TCEQ Enforcement Division; 30 TAC (1) and TCEQ Permit Number WQ , Monitoring Requirements Number 5, by failing to calibrate all automatic flow measuring or recording devices and all totalizing meters for measuring flows by a trained person at plant start-up and as often thereafter as necessary to ensure accuracy, but not less often than annually unless authorized by the executive director (ED); 30 TAC (1) and (b), and TCEQ Permit Number WQ , Monitoring Requirements Number 2.a, by failing to comply with test procedures for the analysis of pollutants; 30 TAC (1) and TCEQ Permit Number WQ , Operational Requirement Number 1, by failing to ensure that the facility and all of its systems of collection, treatment, and disposal are properly operated and maintained; 30 TAC (1) and TCEQ Permit Number WQ , Special Provision O.3, by failing to maintain a minimum two-foot freeboard for all wastewater ponds; 30 TAC (1) and TCEQ Permit Number WQ , Special Provision K, by failing to notify the ED prior to removing irrigation facilities; 30 TAC (1) and TCEQ Permit Number WQ , Special Provision N, by failing to maintain onsite, make available for review, comply with, and implement the Groundwater Quality Assessment Plan; 30 TAC (1) and TCEQ Permit Number WQ , Operational Requirement Number 10.f, by failing to maintain records for all sludge removed from any wastewater treatment process; 30 TAC (1) and TCEQ Permit Number WQ , Special Provision Q, by failing to submit a cropping plan annually with the required information to the Water Quality Assessment Team and the TCEQ Lubbock Regional Office; 30 TAC 317.7(e), by failing to provide lockable gates at all access points into the facility; 30 TAC (a)(4), 40 Code of Federal Regulations (c), and Texas Pollutant Discharge Elimination System Multi-Sector General Permit Number TXRNEY446, Part II, Section C.1, by failing to meet qualifications to maintain a No Exposure Exclusion; 30 TAC (f)(1)(A)(ii) and (i)(7), and (b)(2)(B) and (f), by failing to perform and submit a corrosion control study to identify optimal corrosion control treatment for the system within 12 months after the end of the January 1, December 31, 2014, monitoring period in which the system first exceeded the lead action level, and failing to issue public notification and submit a copy of the public notification to the ED regarding the failure to perform and conduct a corrosion control study; PENALTY: $53,629; ENFORCEMENT COORDINATOR: Cheryl Thompson, (817) ; REGIONAL OFFICE: th Street, Suite 100, Lubbock, Texas , (806) (17) COMPANY: Monarch Utilities I L.P.; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Pottsboro, Grayson County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (f)(1) and Texas Health and Safety Code, (c), by failing to comply with the maximum contaminant level of milligrams per liter for total trihalomethanes, based on the locational running annual average; PENALTY: $840; ENFORCEMENT COORDINATOR: James Fisher, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (18) COMPANY: Rogelio B. Ibarra; DOCKET NUMBER: WOC-E; IDENTIFIER: ; LOCATION: Junction, Kimble County; TYPE OF FACILITY: public water supply; RULE VIOLATED: 30 TAC 30.5(a), by failing to obtain a required occupational license; PENALTY: $175; ENFORCEMENT COOR- DINATOR: Rajesh Acharya, (512) ; REGIONAL OFFICE: 622 South Oakes, Suite K, San Angelo, Texas , (325) (19) COMPANY: Sneha Enterprises, Incorporated dba Circle S Food Stop 1; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Irving, Dallas County; TYPE OF FA- CILITY: convenience store with retail sales of gasoline; RULES VIOLATED: 30 TAC (b)(1)(A) and TWC, (c)(1), by failing to monitor the underground storage tanks for releases at a frequency of at least once every month; PENALTY: $3,750; ENFORCEMENT COORDINATOR: Stephanie McCurley, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (20) COMPANY: Stripes LLC dba Stripes 5259; DOCKET NUM- BER: PST-E; IDENTIFIER: RN ; LOCATION: Brenham, Washington County; TYPE OF FACILITY: convenience store with retail sales of gasoline; RULES VIOLATED: 30 TAC (a)(1) and TWC, (d), by failing to provide corrosion protection for the underground storage tank system; PENALTY: $7,500; ENFORCEMENT COORDINATOR: Steven Stump, (512) ; REGIONAL OFFICE: 6801 Sanger Avenue, Suite 2500, Waco, Texas , (254) (21) COMPANY: Town and Country Food Stores, Incorporated; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Lubbock, Lubbock County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (f)(2), (a)(2) and (f), and Texas Health and Safety Code, (a), by failing to comply with the acute maximum contaminant level (MCL) of 10 milligrams per liter for nitrate, and failing to issue public notification and submit a copy of the public notification to the executive director regarding the failure to comply with the acute MCL for nitrate; PENALTY: $396; ENFORCEMENT COORDINATOR: Sandra Douglas, (512) ; REGIONAL OFFICE: th Street, Suite 100, Lubbock, Texas , (806) (22) COMPANY: Town and Country Food Stores, Incorporated; DOCKET NUMBER: PWS-E; IDENTIFIER: IN ADDITION June 2, TexReg 2949

66 RN ; LOCATION: Lubbock, Lubbock County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (d)(2)(A) and (b)(4), and Texas Health and Safety Code, (c), by failing to operate the disinfection equipment to continuously maintain a disinfectant residual of at least 0.2 milligrams per liter of free chlorine throughout the distribution system at all times; PENALTY: $326; ENFORCEMENT COORDINATOR: Sandra Douglas, (512) ; REGIONAL OFFICE: th Street, Suite 100, Lubbock, Texas , (806) (23) COMPANY: TXBR Ramblewood MHP, LLC; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LO- CATION: Bryan, Brazos County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (j) and Texas Health and Safety Code (THSC), , by failing to notify the executive director prior to making any significant change or addition to the system's production, treatment, storage, pressure maintenance, or distribution facilities; and 30 TAC (f)(1), (4), and (5), and THSC, (c), by failing to provide a purchase water contract that authorizes a maximum daily purchase rate or a uniform purchase rate to meet a minimum production capacity of 0.6 gallons per minute (gpm) per connection, and that authorizes a maximum hourly purchase rate plus the actual service pump capacity of at least 2.0 gpm per connection or at least 1,000 gpm and able to meet peak hourly demands, whichever is less for systems which purchase water under direct pressure; PENALTY: $326; ENFORCEMENT COORDINATOR: Ryan Byer, (512) ; REGIONAL OFFICE: 6801 Sanger Avenue, Suite 2500, Waco, Texas , (409) (24) COMPANY: United States Department of Agriculture; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCA- TION: Edinburg, Hidalgo County; TYPE OF FACILITY: fleet refueling facility; RULES VIOLATED: 30 TAC (b)(1)(A) and (2), and TWC, (a) and (c)(1), by failing to monitor the underground storage tanks (USTs) for releases at a frequency of at least once every month, and failing to provide release detection for the pressurized piping associated with the UST system; PENALTY: $3,375; EN- FORCEMENT COORDINATOR: Ronica Rodriguez, (512) ; REGIONAL OFFICE: 1804 West Jefferson Avenue, Harlingen, Texas , (956) (25) COMPANY: William D. Avery; DOCKET NUMBER: WOC-E; IDENTIFIER: RN ; LOCATION: Barnhart, Irion County; TYPE OF FACILITY: public water system; RULE VIOLATED: 30 TAC 30.5(a), by failing to obtain a required occupational license; PENALTY: $175; ENFORCEMENT COOR- DINATOR: Rajesh Acharya, (512) ; REGIONAL OFFICE: 622 South Oakes, Suite K, San Angelo, Texas , (325) TRD Kathleen C. Decker Director, Litigation Division Texas Commission on Environmental Quality Filed: May 23, 2017 Enforcement Orders An agreed order was adopted regarding Parker County, Docket No WQ-E on May 23, 2017 assessing $938 in administrative penalties with $187 deferred. Information concerning any aspect of this order may be obtained by contacting Had Darling, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Duran Apartment Management Inc dba Evetts Apartments, Docket No PWS-E on May 23, 2017 assessing $2,767 in administrative penalties with $553 deferred. Information concerning any aspect of this order may be obtained by contacting Yuliya Dunaway, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding LION GATE GAS SERVICES INC, Docket No PST-E on May 23, 2017 assessing $6,396 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Audrey Liter, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Neptune International Inc., Docket No PST-E on May 23, 2017 assessing $4,687 in administrative penalties with $937 deferred. Information concerning any aspect of this order may be obtained by contacting Raime Hayes- Falero, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding EXPRESSWAY, INC. dba Mainland Express, Docket No PST-E on May 23, 2017 assessing $6,188 in administrative penalties with $1,237 deferred. Information concerning any aspect of this order may be obtained by contacting Katy Montgomery, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Coastway Inc. dba Kwick Stop 1, Docket No PST-E on May 23, 2017 assessing $2,813 in administrative penalties with $562 deferred. Information concerning any aspect of this order may be obtained by contacting Cheryl Thompson, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding H2Go, LLC d/b/a Speedy Bee Car Wash & Detail, Docket No PST-E on May 23, 2017 assessing $2,015 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Adam Taylor, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding SEVERN TRENT ENVI- RONMENTAL SERVICES, INC., Docket No PST-E on May 23, 2017 assessing $5,859 in administrative penalties with $1,171 deferred. Information concerning any aspect of this order may be obtained by contacting Keith Frank, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding ExxonMobil Oil Corporation, Docket No AIR-E on May 23, 2017 assessing $7,001 in administrative penalties with $1,400 deferred. Information concerning any aspect of this order may be obtained by contacting Shelby Orme, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding SEGUIN BUSINESS, L.L.C. dba Park Place 1, Docket No PST-E on May 23, 2017 assessing $3,000 in administrative penalties with $600 deferred. Information concerning any aspect of this order may be obtained by contacting John Fennell, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas TexReg 2950 June 2, 2017 Texas Register

67 An agreed order was adopted regarding Jaswinder Singh and Rafiq Ebrahim dba M & M Discount Market, Docket No PST-E on May 23, 2017 assessing $4,500 in administrative penalties with $900 deferred. Information concerning any aspect of this order may be obtained by contacting Caleb Olson, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Brady, Docket No MWD-E on May 23, 2017 assessing $5,437 in administrative penalties with $1,087 deferred. Information concerning any aspect of this order may be obtained by contacting Cheryl Thompson, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Terra Verde Utility Company, LLC, Docket No MWD-E on May 23, 2017 assessing $7,000 in administrative penalties with $1,400 deferred. Information concerning any aspect of this order may be obtained by contacting James Boyle, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding JPM Business Inc dba Grab N Go Foodmart 6, Docket No PST-E on May 23, 2017 assessing $6,000 in administrative penalties with $1,200 deferred. Information concerning any aspect of this order may be obtained by contacting Ken Moller, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Brookshire Brothers, Inc. dba Polk Pick It Up 3, Docket No PST-E on May 23, 2017 assessing $6,750 in administrative penalties with $1,350 deferred. Information concerning any aspect of this order may be obtained by contacting Stephanie McCurley, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Fahmina Pervaiz dba SMZ Food Mart, Docket No PST-E on May 23, 2017 assessing $6,750 in administrative penalties with $1,350 deferred. Information concerning any aspect of this order may be obtained by contacting Stephanie McCurley, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Pioneer Natural Resources USA, Inc., Docket No PWS-E on May 23, 2017 assessing $60 in administrative penalties with $12 deferred. Information concerning any aspect of this order may be obtained by contacting Steven Hall, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding DUNCANVILLE CAMP WISDOM INVESTMENT INC dba Beer and Wine Stop 2, Docket No PST-E on May 23, 2017 assessing $3,375 in administrative penalties with $675 deferred. Information concerning any aspect of this order may be obtained by contacting Ken Moller, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Huntsman Petrochemical LLC, Docket No AIR-E on May 23, 2017 assessing $7,500 in administrative penalties with $1,500 deferred. Information concerning any aspect of this order may be obtained by contacting Carol McGrath, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Formosa Plastics Corporation, Texas, Docket No IHW-E on May 24, 2017 assessing $209,251 in administrative penalties with $41,850 deferred. Information concerning any aspect of this order may be obtained by contacting Abigail Lindsey, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Calvert, Docket No MWD-E on May 24, 2017 assessing $12,838 in administrative penalties with $2,567 deferred. Information concerning any aspect of this order may be obtained by contacting Had Darling, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Liberty Trails, LP, Docket No MLM-E on May 24, 2017 assessing $9,001 in administrative penalties with $1,799 deferred. Information concerning any aspect of this order may be obtained by contacting Cheryl Thompson, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding East Texas Precast Co., Ltd., Docket No MLM-E on May 24, 2017 assessing $14,335 in administrative penalties with $2,867 deferred. Information concerning any aspect of this order may be obtained by contacting Danielle Porras, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Diana Special Utility District, Docket No MWD-E on May 24, 2017 assessing $105,125 in administrative penalties with $105,125 deferred. Information concerning any aspect of this order may be obtained by contacting Cheryl Thompson, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Nasser Farahnakian dba Sunrise Food Mart, Docket No PST-E on May 24, 2017 assessing $27,000 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Audrey Liter, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Beeville, Docket No MLM-E on May 24, 2017 assessing $24,687 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Michaelle Garza, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Town of Windom, Docket No MWD-E on May 24, 2017 assessing $12,025 in administrative penalties with $2,405 deferred. Information concerning any aspect of this order may be obtained by contacting Cheryl Thompson, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Arlington, Docket No WQ-E on May 24, 2017 assessing $42,750 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Melissa Castro, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Farmers Transport, Inc., Docket No MWD-E on May 24, 2017 assessing $9,375 in administrative penalties with $1,875 deferred. Information concerning any aspect of this order may be obtained by contacting Melissa Castro, IN ADDITION June 2, TexReg 2951

68 Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Bassam Zahra dba Saveway FS, Docket No PST-E on May 24, 2017 assessing $9,015 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Ian Groetsch, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Carolyn Bush dba Paradise Ranch RV Park and Wayne Bush dba Paradise Ranch RV Park, Docket No PWS-E on May 24, 2017 assessing $2,408 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Michaelle Garza, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A default order was adopted regarding David P. Dey dba Wildwood Mobile Home Village, Docket No PWS-E on May 24, 2017 assessing $2,691 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Lena Roberts, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Txi Operations, LP, Docket No AIR-E on May 24, 2017 assessing $115,050 in administrative penalties with $23,010 deferred. Information concerning any aspect of this order may be obtained by contacting Abigail Lindsey, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A default order was adopted regarding Suha Enterprises Inc dba Diamond Food Mart, Docket No PST-E on May 24, 2017 assessing $10,629 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Clayton Smith, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Kiewit Offshore Services, Ltd., Docket No AIR-E on May 24, 2017 assessing $16,577 in administrative penalties with $3,315 deferred. Information concerning any aspect of this order may be obtained by contacting David Carney, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Txi Operations, LP, Docket No IWD-E on May 24, 2017 assessing $8,151 in administrative penalties with $1,630 deferred. Information concerning any aspect of this order may be obtained by contacting Alejandro Laje, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A default and shutdown order was adopted regarding Robin Annette Wiley and Kenneth D. Wiley dba Wileys Food Store, Docket No PST-E on May 24, 2017 assessing $28,606 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Isaac Ta, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Western Refining Wholesale, LLC, Docket No PST-E on May 24, 2017 assessing $14,745 in administrative penalties with $2,949 deferred. Information concerning any aspect of this order may be obtained by contacting Steven Stump, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Jzv, Inc. dba Star Mart, Docket No PST-E on May 24, 2017 assessing $10,580 in administrative penalties with $2,116 deferred. Information concerning any aspect of this order may be obtained by contacting John Fennell, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Etc Field Services LLC, Docket No AIR-E on May 24, 2017 assessing $20,475 in administrative penalties with $4,095 deferred. Information concerning any aspect of this order may be obtained by contacting Abigail Lindsey, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Total Petrochemicals Usa, Inc., Docket No IWD-E on May 24, 2017 assessing $30,000 in administrative penalties with $6,000 deferred. Information concerning any aspect of this order may be obtained by contacting Caleb Olson, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Jadidi Corporation dba Friendswood Shell Station, Docket No PST-E on May 24, 2017 assessing $8,695 in administrative penalties with $1,739 deferred. Information concerning any aspect of this order may be obtained by contacting Jonathan Nguyen, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Pranav & Daisy Group LLC dba Newway Food Mart, Docket No PST-E on May 24, 2017 assessing $8,625 in administrative penalties with $1,725 deferred. Information concerning any aspect of this order may be obtained by contacting John Fennell, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Ranch Utilities, L.P., Docket No MWD-E on May 24, 2017 assessing $8,276 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Alejandro Laje, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Staff Water Supply Corporation, Docket No PWS-E on May 24, 2017 assessing $172 in administrative penalties with $172 deferred. Information concerning any aspect of this order may be obtained by contacting Michaelle Garza, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: May 24, 2017 Notice of Hearing JAGOE-PUBLIC COMPANY SOAH Docket No TCEQ Docket No AIR Proposed Permit No APPLICATION. 42 TexReg 2952 June 2, 2017 Texas Register

69 Jagoe-Public Company, P.O. Box 250, Denton, Texas , has applied to the Texas Commission on Environmental Quality (TCEQ) for issuance of Proposed Air Quality Permit Number , which would authorize a Hot Mix Asphalt Plant located at 3020 Fort Worth Drive, Denton, Denton County, Texas This application was processed in an expedited manner, as allowed by the commission's rules in 30 Texas Administrative Code, Chapter 101, Subchapter J. This application was submitted to the TCEQ on April 4, The existing facility will emit the following contaminants: organic compounds, nitrogen oxides, sulfur dioxide, carbon monoxide, particulate matter including particulate matter with diameters of 10 microns or less and 2.5 microns or less. The TCEQ Executive Director has prepared a draft permit which, if approved, would establish the conditions under which the facility must operate. The Executive Director has made a preliminary decision to issue the permit because it meets all rules and regulations. The permit application, Executive Director's preliminary decision, and draft permit are available for viewing and copying at the TCEQ central office, the TCEQ Dallas/Fort Worth regional office, and at the Denton Public Library South Branch, 3228 Teasley Lane, Denton, Denton County, Texas. The facility's compliance file, if any exists, is available for public review at the TCEQ Dallas/Fort Worth Regional Office, 2309 Gravel Drive, Fort Worth, Texas. As a public courtesy, we have provided the following Web page to an online map of the site or the facility's general location. The online map is not part of the application or the notice: < For the exact location, refer to the application. CONTESTED CASE HEARING. The State Office of Administrative Hearings (SOAH) will conduct a preliminary hearing at: 10:00 a.m. - July 10, 2017 William P. Clements Building 300 West 15th Street, 4th Floor Austin, Texas The purpose of a preliminary hearing is to establish jurisdiction, name the parties, establish a procedural schedule for the remainder of the proceeding, allow an opportunity for settlement discussions, and to address other matters as determined by the judge. The evidentiary hearing phase of the proceeding will be similar to a civil trial in state district court. The hearing will address the disputed issue of fact identified in the TCEQ order concerning this application issued on May 4, In addition to this issue, the judge may consider additional issues if certain factors are met. The hearing will be conducted in accordance with the Chapter 2001, Texas Government Code; Chapter 382, Texas Health and Safety Code; TCEQ rules including 30 Texas Administrative Code (TAC) Chapter 116, Subchapters A and B; and the procedural rules of the TCEQ and SOAH, including 30 TAC Chapter 80 and 1 TAC Chapter 155. The hearing will be held unless all timely hearing requests have been withdrawn or denied. To request to be a party, you must attend the hearing and show you would be affected by the application in a way not common to the general public. Any person may attend the hearing and request to be a party. Only persons named as parties may participate at the hearing. MAILING LIST. You may ask to be placed on a mailing list to obtain additional information on this application by sending a request to the Office of the Chief Clerk at the address below. AGENCY CONTACTS AND INFORMATION. Public comments and requests must be submitted either electronically at or in writing to the Texas Commission on Environmental Quality, Office of the Chief Clerk, MC-105, P.O. Box 13087, Austin, Texas If you communicate with the TCEQ electronically, please be aware that your address, like your physical mailing address, will become part of the agency's public record. For more information about this permit application, the permitting process, or the contested case hearing process, please call the Public Education Program toll free at (800) Si desea información en español, puede llamar al (800) General information regarding the TCEQ may be obtained electronically at In accordance with 1 Texas Admin. Code (a), Notice of Hearing, "Parties that are not represented by an attorney may obtain information regarding contested case hearings on the public website of the State Office of Administrative Hearings at or in printed format upon request to SOAH." INFORMATION. If you need more information about the hearing process for this application, please call the Public Education Program, toll free, at (800) General information regarding the TCEQ can be found at Persons with disabilities who need special accommodations at the hearing should call the SOAH Docketing Department at (512) , at least one week prior to the hearing. Further information may also be obtained from Jagoe-Public Company at the address stated above or by calling Lisa Dyar at (512) TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: May 24, 2017 Notice of Opportunity to Comment on Agreed Orders of Administrative Enforcement Actions The Texas Commission on Environmental Quality (TCEQ, agency, or commission) staff is providing an opportunity for written public comment on the listed Agreed Orders (AOs) in accordance with Texas Water Code (TWC), TWC, requires that before the commission may approve the AOs, the commission shall allow the public an opportunity to submit written comments on the proposed AOs. TWC, requires that notice of the opportunity to comment must be published in the Texas Register no later than the 30th day before the date on which the public comment period closes, which in this case is July 3, TWC, also requires that the commission promptly consider any written comments received and that the commission may withdraw or withhold approval of an AO if a comment discloses facts or considerations that indicate that consent is inappropriate, improper, inadequate, or inconsistent with the requirements of the statutes and rules within the commission's jurisdiction or the commission's orders and permits issued in accordance with the commission's regulatory authority. Additional notice of changes to a proposed AO is not required to be published if those changes are made in response to written comments. A copy of each proposed AO is available for public inspection at both the commission's central office, located at Park 35 Circle, Building A, 3rd Floor, Austin, Texas 78753, (512) and at the applicable regional office listed as follows. Written comments about an AO IN ADDITION June 2, TexReg 2953

70 should be sent to the attorney designated for the AO at the commission's central office at P.O. Box 13087, MC 175, Austin, Texas and must be received by 5:00 p.m. on July 3, Comments may also be sent by facsimile machine to the attorney at (512) The designated attorney is available to discuss the AO and/or the comment procedure at the listed phone number; however, TWC, provides that comments on an AO shall be submitted to the commission in writing. (1) COMPANY: DHP Sales & Service Inc dba Champs Food Mart; DOCKET NUMBER: PST-E; TCEQ ID NUMBER: RN ; LOCATION: 3374 Frick Road, Houston, Harris County; TYPE OF FACILITY: underground storage tank (UST) system and a convenience store with retail sales of gasoline; RULES VIOLATED: Texas Health and Safety Code (THSC), (b) and 30 TAC (b)(2), by failing to maintain Stage II records at the station and make them immediately available for review upon request by agency personnel; THSC, (b) and 30 TAC (1) and (3), by failing to conduct daily and monthly inspections of the Stage II vapor recovery system; THSC, (b) and 30 TAC (2), by failing to verify proper operation of the Stage II equipment at least once every 12 months, and the Stage II vapor space manifolding and dynamic back pressure at least once every 36 months or upon major system replacement or modification, whichever occurs first; TWC, (d) and 30 TAC (a)(2), by failing to ensure that the corrosion protection system is operated and maintained in a manner that will provide continuous protection to all underground metal components of the UST system; TWC, (d) and 30 TAC (c)(4)(C), by failing to test the cathodic protection system for performance and operability at a frequency of at least once every three years; TWC, (c)(1) and 30 TAC (b)(1)(A), by failing to monitor the USTs for releases at a frequency of at least once every month (not to exceed 35 days between each monitoring); TWC, (a) and 30 TAC (b)(2), by failing to provide release detection for the pressurized piping associated with the UST system; and TWC, (c)(2) and 30 TAC (i), by failing to inspect all sumps, manways, overspill containers, or catchment basins associated with a UST system at least once every 60 days to assure that their sides, bottoms, and any penetration points are maintained liquid-tight, and free from liquid or debris; PENALTY: $15,598; STAFF ATTORNEY: Adam Taylor, Litigation Division, MC 175, (512) ; REGIONAL OFFICE: Houston Regional Office, 5425 Polk Street, Suite H, Houston, Texas , (713) (2) COMPANY: St. Mina Investments, LLC dba Texas Food Mart; DOCKET NUMBER: PST-E; TCEQ ID NUMBER: RN ; LOCATION: 1101 California Lane, Arlington, Tarrant County; TYPE OF FACILITY: underground storage tank (UST) system and a convenience store with retail sales of gasoline; RULES VIOLATED: TWC, (a) and 30 TAC 334.8(c)(5)(A)(i), by failing to make available to a common carrier a valid, current TCEQ delivery certificate before accepting delivery of a regulated substance into the UST; TWC, (a) and 30 TAC (b)(2), by failing to provide release detection for the pressurized piping associated with the UST system; and 30 TAC 334.8(c)(4)(C) and (5)(A), by failing to obtain a UST delivery certificate by submitting a properly completed UST registration and self-certification form; PENALTY: $11,526; STAFF ATTORNEY: Jake Marx, Litigation Division, MC 175, (512) ; REGIONAL OFFICE: Dallas-Fort Worth Regional Office, 2309 Gravel Drive, Fort Worth, Texas , (817) TRD Kathleen C. Decker Director, Litigation Division Texas Commission on Environmental Quality Filed: May 23, 2017 Notice of Water Rights Application Notice issued May 19, 2017 APPLICATION NO ; Enterprise Products Operating LLC, P.O. Box 4324, Houston, Texas 77210, Applicant, seeks a water use permit to divert and use not to exceed 500 acre-feet of water per year from the Houston Ship Channel (Buffalo Bayou), San Jacinto River Basin for industrial purposes (fire protection) in Harris County. The application and partial fees were received on November 12, Additional information and fees were received on September 20, The application was declared administratively complete and filed with the Office of the Chief Clerk on October 14, The Executive Director has completed the technical review of the application and prepared a draft water use permit. The draft permit, if granted, would contain special conditions, including, but not limited to, installing a measurement device. The application, technical memoranda, and Executive Director's draft permit are available for viewing and copying at the Office of the Chief Clerk, Park 35 Circle, Bldg. F., Austin, Texas Written public comments and requests for a public meeting should be submitted to the Office of Chief Clerk, at the address provided below, within 30 days of the date of newspaper publication of the notice. To view the complete issued notice, view the notice on our web site at or call the Office of the Chief Clerk at (512) to obtain a copy of the complete notice. When searching the web site, type in the issued date range shown at the top of this document to obtain search results. A public meeting is intended for the taking of public comment, and is not a contested case hearing. The Executive Director can consider approval of an application unless a written request for a contested case hearing is filed. To request a contested case hearing, you must submit the following: (1) your name (or for a group or association, an official representative), mailing address, daytime phone number, and fax number, if any; (2) applicant's name and permit number; (3) the statement (I/we) request a contested case hearing; and (4) a brief and specific description of how you would be affected by the application in a way not common to the general public. You may also submit any proposed conditions to the requested application which would satisfy your concerns. Requests for a contested case hearing must be submitted in writing to the TCEQ Office of the Chief Clerk at the address provided below. If a hearing request is filed, the Executive Director will not issue the requested permit and may forward the application and hearing request to the TCEQ Commissioners for their consideration at a scheduled Commission meeting. Written hearing requests, public comments or requests for a public meeting should be submitted to the Office of the Chief Clerk, MC 105, TCEQ, P.O. Box 13087, Austin, Texas For information concerning the hearing process, please contact the Public Interest Counsel, MC 103, at the same address. For additional information, individual members of the general public may contact the Public Education Program at (800) General information regarding the TCEQ can be found at our web site at Si desea información en español, puede llamar al (800) TRD TexReg 2954 June 2, 2017 Texas Register

71 Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: May 24, 2017 Proposal for Decision The State Office of Administrative Hearings issued a Proposal for Decision and Order to the Texas Commission on Environmental Quality on May 23, 2017, in the matter of the Executive Director of the Texas Commission on Environmental Quality v. Pradhan and Company, Inc. dba Express Food; SOAH Docket No ; TCEQ Docket No PST-E. The commission will consider the Administrative Law Judge's Proposal for Decision and Order regarding the enforcement action against Pradhan and Company, Inc. dba Express Food on a date and time to be determined by the Office of the Chief Clerk in Room 201S of Building E, N. Interstate 35, Austin, Texas. This posting is Notice of Opportunity to Comment on the Proposal for Decision and Order. The comment period will end 30 days from date of this publication. Written public comments should be submitted to the Office of the Chief Clerk, MC-105, TCEQ, P.O. Box 13087, Austin, Texas If you have any questions or need assistance, please contact Mehgan Taack, Office of the Chief Clerk, (512) TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: May 24, 2017 Texas Ethics Commission List of Late Filers Below is a list from the Texas Ethics Commission naming the filers who failed to pay the penalty fine for failure to file the report, or filing a late report, in reference to the specified filing deadline. If you have any questions, you may contact Michelle Gonzales at (512) Deadline: Semiannual Report due July 15, 2015, for Committees Todd Smith, Lone Star Patriot PAC, 2204 Hazeltine Ln., Austin, Texas Deadline: Lobby Activities Report due February 10, 2017 Jose E. Camacho, 5900 Southwest Pkwy., Bldg. 3, Austin, Texas TRD Seana Willing Executive Director Texas Ethics Commission Filed: May 23, 2017 Texas Facilities Commission Award for Financial Consulting Services RFP Number Award was made at the meeting of the Texas Facilities Commission on May 17, 2017, for a bench of financial advisory consultants to assist the Center for Alternative Finance and Procurement for possible Public-Private Partnership projects brought to the Commission as per Chapters 2267 and 2268 of Texas Government Code. The bench selected is composed of the following Financial Advisor Consultants: Alvarez & Marsal Public Sector Services, LLC 1001 G Street NW, Suite 1100 West Washington, DC Arup Advisory Inc. 77 Water Street, Floor 5 New York, NY BMO Capital Markets Corp. 115 South LaSalle Street, 35W Chicago, IL Ernst & Young Infrastructure Advisors, LLC 2005 Market Street, Suite 700 Philadelphia, PA Jones Lang LaSalle Americas, Inc K Street NW Washington, DC KPMG, LLP 111 Congress Avenue, Suite 1900 Austin, TX P3point Consortium 5123 Kingston Way San Jose, CA PFM Financial Advisors, LLC 221 West 6th Street Suite 900 Austin, TX Each resulting contract will begin on the date signed by both parties and will terminate on August 31, Each contract may be renewed for one additional two-year period. Each contract is issued for $0 with a not-to-exceed amount of $400,000 per term. Designated projects shall be delegated to the bench of advisors as per agency policies to assist with financial feasibility studies and related services within the designated limits. TRD Kay Molina General Counsel Texas Facilities Commission Filed: May 19, 2017 Request for Proposals # The Texas Facilities Commission (TFC), on behalf of the Comptroller of Public Accounts-Enforcement (CPA), announces the issuance of Request for Proposals (RFP) # TFC seeks a five (5) or ten (10) year lease of approximately 3,715 square feet of office space in Laredo, Webb County, Texas. The deadline for questions is June 13, 2017, and the deadline for proposals is June 22, 2017, at 3:00 p.m. The award date is July 19, IN ADDITION June 2, TexReg 2955

72 TFC reserves the right to accept or reject any or all proposals submitted. TFC is under no legal or other obligation to execute a lease on the basis of this notice or the distribution of an RFP. Neither this notice nor the RFP commits TFC to pay for any costs incurred prior to the award of a grant. Parties interested in submitting a proposal may obtain information by contacting the Program Specialist, Evelyn Esquivel, at (512) A copy of the RFP may be downloaded from the Electronic State Business Daily at TRD Kay Molina General Counsel Texas Facilities Commission Filed: May 22, 2017 Texas Department of Insurance Company Licensing Application to do business in the state of Texas for ROOT INSUR- ANCE COMPANY, a foreign fire and/or casualty company. The home office is in Columbus, Ohio. Application for GRAND LODGE OF THE ORDER OF THE SONS OF HERMANN IN THE STATE OF TEXAS, a domestic life, accident and/or health company, to change its name to HERMANN SONS LIFE. The home office is in San Antonio, Texas. Any objections must be filed with the Texas Department of Insurance, within twenty (20) calendar days from the date of the Texas Register publication, addressed to the attention of Jeff Hunt, 333 Guadalupe Street, MC 305-2C, Austin, Texas TRD Norma Garcia General Counsel Texas Department of Insurance Filed: May 24, 2017 Texas Lottery Commission Scratch Ticket Game Number 1848 "25X the Money" 1.0 Name and Style of Scratch Ticket Game. A. The name of Scratch Ticket Game No is "25X THE MONEY". The play style is "key number match". 1.1 Price of Scratch Ticket Game. A. The price for Scratch Ticket Game No shall be $5.00 per Scratch Ticket. 1.2 Definitions in Scratch Ticket Game No A. Display Printing - That area of the Scratch Ticket outside of the area where the overprint and Play Symbols appear. B. Latex Overprint - The removable scratch-off covering over the Play Symbols on the front of the Scratch Ticket. C. Play Symbol - The printed data under the latex on the front of the Scratch Ticket that is used to determine eligibility for a prize. Each Play Symbol is printed in Symbol font in black ink in positive except for dual-image games. The possible black Play Symbols are: 01, 02, 03, 04, 05, 06, 07, 08, 09, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 10X SYM- BOL, 25X SYMBOL, $5.00, $10.00, $15.00, $25.00, $50.00, $75.00, $125, $250, $500, $1,000, $10,000 and $100,000. D. Play Symbol Caption - The printed material appearing below each Play Symbol which explains the Play Symbol. One caption appears under each Play Symbol and is printed in caption font in black ink in positive. The Play Symbol Caption which corresponds with and verifies each Play Symbol is as follows: 42 TexReg 2956 June 2, 2017 Texas Register

73 IN ADDITION June 2, TexReg 2957

74 E. Serial Number - A unique 13 (thirteen) digit number appearing under the latex scratch-off covering on the front of the Scratch Ticket. The Serial Number is for validation purposes and cannot be used to play the game. The format will be: F. Bar Code - A 24 (twenty-four) character interleaved two (2) of five (5) Bar Code which will include a four (4) digit game ID, the seven (7) digit Pack number, the three (3) digit Scratch Ticket number and the ten (10) digit Validation Number. The Bar Code appears on the back of the Scratch Ticket. G. Pack-Scratch Ticket Number - A 14 (fourteen) digit number consisting of the four (4) digit game number (1848), a seven (7) digit Pack number, and a three (3) digit Scratch Ticket number. Scratch Ticket numbers start with 001 and end with 075 within each Pack. The format will be: H. Pack - A Pack of the "25X THE MONEY" Scratch Ticket Game contains 075 Tickets, packed in plastic shrink-wrapping and fanfolded in pages of one (1). Ticket 001 will be shown on the front of the Pack; the back of Ticket 075 will be revealed on the back of the Pack. All Packs will be tightly shrink-wrapped. There will be no breaks between the Tickets in a Pack. Every other Pack will reverse i.e., reverse order will be: the back of Ticket 001 will be shown on the front of the Pack and the front of Ticket 075 will be shown on the back of the Pack. I. Non-Winning Scratch Ticket - A Scratch Ticket which is not programmed to be a winning Scratch Ticket or a Scratch Ticket that does not meet all of the requirements of these Game Procedures, the State Lottery Act (Texas Government Code, Chapter 466), and applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401. J. Scratch Ticket Game, Scratch Ticket or Ticket - Texas Lottery "25X THE MONEY" Scratch Ticket Game No Determination of Prize Winners. The determination of prize winners is subject to the general Scratch Ticket validation requirements set forth in Texas Lottery Rule , Instant Game Rules, these Game Procedures, and the requirements set out on the back of each Scratch Ticket. A prize winner in the "25X THE MONEY" Scratch Ticket Game is determined once the latex on the Scratch Ticket is scratched off to expose 45 (forty-five) Play Symbols. If a player matches any of YOUR NUMBERS Play Symbols to any of the WINNING NUM- BERS Play Symbols, the player wins the prize for that number. If a player reveals a "10X" Play Symbol, the player wins 10 (ten) TIMES the prize for that symbol! If a player reveals a "25X" Play Symbol, the player wins 25 (twenty-five) TIMES the prize for that symbol! No portion of the Display Printing nor any extraneous matter whatsoever shall be usable or playable as part of the Scratch Ticket. 2.1 Scratch Ticket Validation Requirements. A. To be a valid Scratch Ticket, all of the following requirements must be met: 1. Exactly 45 (forty-five) Play Symbols must appear under the Latex Overprint on the front portion of the Scratch Ticket; 2. Each of the Play Symbols must have a Play Symbol Caption underneath, unless specified, and each Play Symbol must agree with its Play Symbol Caption; 3. Each of the Play Symbols must be present in its entirety and be fully legible; 4. Each of the Play Symbols must be printed in black ink except for dual image games; 5. The Scratch Ticket shall be intact; 6. The Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be present in their entirety and be fully legible; 7. The Serial Number must correspond, using the Texas Lottery's codes, to the Play Symbols on the Scratch Ticket; 8. The Scratch Ticket must not have a hole punched through it, be mutilated, altered, unreadable, reconstituted or tampered with in any manner; 9. The Scratch Ticket must not be counterfeit in whole or in part; 42 TexReg 2958 June 2, 2017 Texas Register

75 10. The Scratch Ticket must have been issued by the Texas Lottery in an authorized manner; 11. The Scratch Ticket must not have been stolen, nor appear on any list of omitted Scratch Tickets or non-activated Scratch Tickets on file at the Texas Lottery; 12. The Play Symbols, Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be right side up and not reversed in any manner; 13. The Scratch Ticket must be complete and not miscut, and have exactly 45 (forty-five) Play Symbols under the Latex Overprint on the front portion of the Scratch Ticket, exactly one Serial Number, exactly one Retailer Validation Code, and exactly one Pack-Scratch Ticket Number on the Scratch Ticket; 14. The Serial Number of an apparent winning Scratch Ticket shall correspond with the Texas Lottery's Serial Numbers for winning Scratch Tickets, and a Scratch Ticket with that Serial Number shall not have been paid previously; 15. The Scratch Ticket must not be blank or partially blank, misregistered, defective or printed or produced in error; 16. Each of the 45 (forty-five) Play Symbols must be exactly one of those described in Section 1.2.C of these Game Procedures; 17. Each of the 45 (forty-five) Play Symbols on the Scratch Ticket must be printed in the Symbol font and must correspond precisely to the artwork on file at the Texas Lottery; the Scratch Ticket Serial Numbers must be printed in the Serial font and must correspond precisely to the artwork on file at the Texas Lottery; and the Pack-Scratch Ticket Number must be printed in the Pack-Scratch Ticket Number font and must correspond precisely to the artwork on file at the Texas Lottery; 18. The Display Printing on the Scratch Ticket must be regular in every respect and correspond precisely to the artwork on file at the Texas Lottery; and 19. The Scratch Ticket must have been received by the Texas Lottery by applicable deadlines. B. The Scratch Ticket must pass all additional validation tests provided for in these Game Procedures, the Texas Lottery's Rules governing the award of prizes of the amount to be validated, and any confidential validation and security tests of the Texas Lottery. C. Any Scratch Ticket not passing all of the validation requirements is void and ineligible for any prize and shall not be paid. However, the Executive Director may, solely at the Executive Director's discretion, refund the retail sales price of the Scratch Ticket. In the event a defective Scratch Ticket is purchased, the only responsibility or liability of the Texas Lottery shall be to replace the defective Scratch Ticket with another unplayed Scratch Ticket in that Scratch Ticket Game (or a Scratch Ticket of equivalent sales price from any other current Texas Lottery Scratch Ticket Game) or refund the retail sales price of the Scratch Ticket, solely at the Executive Director's discretion. Programmed Game Parameters. A.Consecutive Non-Winning Tickets in a Pack will not have matching play data, spot for spot. B. The top Prize Symbol will appear on every Ticket unless restricted by other parameters, play action or prize structure. C. No prize amount in a non-winning spot will correspond with the "YOUR NUMBERS" Play Symbol (i.e., 5 and $5) with the exception of the $10 Prize Symbol and the "10X" (WINX10) Play Symbol. D. No matching non-winning "YOUR NUMBERS" Play Symbols on a Ticket. E. No matching "WINNING NUMBERS" Play Symbols on a Ticket. F. A non-winning Prize Symbol will never match a winning Prize Symbol. G. A Ticket may have up to four (4) matching non-winning Prize Symbols, unless restricted by other parameters, play action or prize structure. H. The "10X" (WINX10) Play Symbol will only appear on intended winning Tickets as dictated by the prize structure. I. The "25X" (WINX25) Play Symbol will only appear on intended winning Tickets as dictated by the prize structure. 2.3 Procedure for Claiming Prizes. A. To claim a "25X THE MONEY" Scratch Ticket Game prize of $5.00, $10.00, $15.00, $25.00, $50.00, $75.00, $125, $250 or $500, a claimant shall sign the back of the Scratch Ticket in the space designated on the Scratch Ticket and present the winning Scratch Ticket to any Texas Lottery Retailer. The Texas Lottery Retailer shall verify the claim and, if valid, and upon presentation of proper identification, if appropriate, make payment of the amount due the claimant and physically void the Scratch Ticket; provided that the Texas Lottery Retailer may, but is not required, to pay a $25.00, $50.00, $75.00, $125, $250 or $500 Scratch Ticket Game. In the event the Texas Lottery Retailer cannot verify the claim, the Texas Lottery Retailer shall provide the claimant with a claim form and instruct the claimant on how to file a claim with the Texas Lottery. If the claim is validated by the Texas Lottery, a check shall be forwarded to the claimant in the amount due. In the event the claim is not validated, the claim shall be denied and the claimant shall be notified promptly. A claimant may also claim any of the above prizes under the procedure described in Section 2.3.B and Section 2.3.C of these Game Procedures. B. To claim a "25X THE MONEY" Scratch Ticket Game prize of $1,000, $10,000 or $100,000, the claimant must sign the winning Scratch Ticket and present it at one of the Texas Lottery s Claim Centers. If the claim is validated by the Texas Lottery, payment will be made to the bearer of the validated winning Scratch Ticket for that prize upon presentation of proper identification. When paying a prize of $600 or more, the Texas Lottery shall file the appropriate income reporting form with the Internal Revenue Service (IRS) and shall withhold federal income tax at a rate set by the IRS if required. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. C. As an alternative method of claiming a "25X THE MONEY" Scratch Ticket Game prize, the claimant must sign the winning Scratch Ticket, thoroughly complete a claim form, and mail both to: Texas Lottery Commission, P.O. Box 16600, Austin, Texas The Texas Lottery is not responsible for Scratch Tickets lost in the mail. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. D. Prior to payment by the Texas Lottery of any prize, the Texas Lottery shall deduct: 1. A sufficient amount from the winnings of a prize winner who has been finally determined to be: a. delinquent in the payment of a tax or other money to a state agency and that delinquency is reported to the Comptroller under Government Code ; b. in default on a loan made under Chapter 52, Education Code; or IN ADDITION June 2, TexReg 2959

76 c. in default on a loan guaranteed under Chapter 57, Education Code; and 2. delinquent child support payments from the winnings of a prize winner in the amount of the delinquency as determined by a court or a Title IV-D agency under Chapter 231, Family Code. E. If a person is indebted or owes delinquent taxes to the State, other than those specified in the preceding paragraph, the winnings of a person shall be withheld until the debt or taxes are paid. 2.4 Allowance for Delay of Payment. The Texas Lottery may delay payment of the prize pending a final determination by the Executive Director, under any of the following circumstances: A. if a dispute occurs, or it appears likely that a dispute may occur, regarding the prize; B. if there is any question regarding the identity of the claimant; C. if there is any question regarding the validity of the Scratch Ticket presented for payment; or D. if the claim is subject to any deduction from the payment otherwise due, as described in Section 2.3.D of these Game Procedures. No liability for interest for any delay shall accrue to the benefit of the claimant pending payment of the claim. 2.5 Payment of Prizes to Persons Under 18. If a person under the age of 18 years is entitled to a cash prize under $600 from the "25X THE MONEY" Scratch Ticket Game, the Texas Lottery shall deliver to an adult member of the minor's family or the minor's guardian a check or warrant in the amount of the prize payable to the order of the minor. 2.6 If a person under the age of 18 years is entitled to a cash prize of $600 or more from the "25X THE MONEY" Scratch Ticket Game, the Texas Lottery shall deposit the amount of the prize in a custodial bank account, with an adult member of the minor's family or the minor's guardian serving as custodian for the minor. 2.7 Scratch Ticket Claim Period. All Scratch Ticket prizes must be claimed within 180 days following the end of the Scratch Ticket Game or within the applicable time period for certain eligible military personnel as set forth in Texas Government Code Any rights to a prize that is not claimed within that period, and in the manner specified in these Game Procedures and on the back of each Scratch Ticket, shall be forfeited. 2.8 Disclaimer. The number of prizes in a game is approximate based on the number of Scratch Tickets ordered. The number of actual prizes available in a game may vary based on number of Scratch Tickets manufactured, testing, distribution, sales and number of prizes claimed. A Scratch Ticket Game may continue to be sold even when all the top prizes have been claimed. 3.0 Scratch Ticket Ownership. A. Until such time as a signature is placed upon the back portion of a Scratch Ticket in the space designated, a Scratch Ticket shall be owned by the physical possessor of said Scratch Ticket. When a signature is placed on the back of the Scratch Ticket in the space designated, the player whose signature appears in that area shall be the owner of the Scratch Ticket and shall be entitled to any prize attributable thereto. Notwithstanding any name or names submitted on a claim form, the Executive Director shall make payment to the player whose signature appears on the back of the Scratch Ticket in the space designated. If more than one name appears on the back of the Scratch Ticket, the Executive Director will require that one of those players whose name appears thereon be designated by such players to receive payment. B. The Texas Lottery shall not be responsible for lost or stolen Scratch Tickets and shall not be required to pay on a lost or stolen Scratch Ticket. 4.0 Number and Value of Scratch Ticket Prizes. There will be approximately 8,040,000 Scratch Tickets in Scratch Ticket Game No The approximate number and value of prizes in the game are as follows: 42 TexReg 2960 June 2, 2017 Texas Register

77 A. The actual number of Scratch Tickets in the game may be increased or decreased at the sole discretion of the Texas Lottery Commission. 5.0 End of the Scratch Ticket Game. The Executive Director may, at any time, announce a closing date (end date) for the Scratch Ticket Game No without advance notice, at which point no further Scratch Tickets in that game may be sold. The determination of the closing date and reasons for closing will be made in accordance with the Scratch Ticket closing procedures and the Instant Game Rules. See 16 TAC (j). 6.0 Governing Law. In purchasing a Scratch Ticket, the player agrees to comply with, and abide by, these Game Procedures for Scratch Ticket Game No. 1848, the State Lottery Act (Texas Government Code, Chapter 466), applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401, and all final decisions of the Executive Director. TRD Bob Biard General Counsel Texas Lottery Commission Filed: May 23, 2017 Scratch Ticket Game Number 1860 "Big Play Cashword" 1.0 Name and Style of Scratch Ticket Game. A. The name of Scratch Ticket Game No is "BIG PLAY CASH- WORD". The play style is "crossword". 1.1 Price of Scratch Ticket Game. A. The price for Scratch Ticket Game No shall be $10.00 per Scratch Ticket. 1.2 Definitions in Scratch Ticket Game No A. Display Printing - That area of the Scratch Ticket outside of the area where the overprint and Play Symbols appear. B. Latex Overprint - The removable scratch-off covering over the Play Symbols on the front of the Scratch Ticket. C. Play Symbol - The printed data under the latex on the front of the Scratch Ticket that is used to determine eligibility for a prize. Each Play Symbol is printed in Symbol font in black ink in positive except for dual-image games. The possible black Play Symbols are: A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z, BLACKENED SQUARE SYMBOL, $5.00, $10.00, $20.00, $50.00 and $100. D. Play Symbol Caption - The printed material appearing below each Play Symbol which explains the Play Symbol. One caption appears under each Play Symbol and is printed in caption font in black ink in positive. Crossword and Bingo style games do not typically have Play Symbol Captions. The Play Symbol Caption which corresponds with and verifies each Play Symbol is as follows: IN ADDITION June 2, TexReg 2961

78 E. Serial Number - A unique 13 (thirteen) digit number appearing under the latex scratch-off covering on the front of the Scratch Ticket. The Serial Number is for validation purposes and cannot be used to play the game. The format will be: F. Bar Code - A 24 (twenty-four) character interleaved two (2) of five (5) Bar Code which will include a four (4) digit game ID, the seven (7) digit Pack number, the three (3) digit Scratch Ticket number and the ten (10) digit Validation Number. The Bar Code appears on the back of the Scratch Ticket. G. Pack-Scratch Ticket Number - A 14 (fourteen) digit number consisting of the four (4) digit game number (1860), a seven (7) digit Pack number, and a three (3) digit Scratch Ticket number. Scratch Ticket numbers start with 001 and end with 050 within each Pack. The format will be: H. Pack - A Pack of "BIG PLAY CASHWORD" Scratch Ticket Game contains 050 Tickets, packed in plastic shrink-wrapping and fanfolded in pages of one (1). The back of Ticket 001 will be shown on the front of the Pack; the back of Ticket 050 will be revealed on the back of the Pack. All Packs will be tightly shrink-wrapped. There will be no breaks between the Tickets in a Pack. I. Non-Winning Scratch Ticket - A Scratch Ticket which is not programmed to be a winning Scratch Ticket or a Scratch Ticket that does not meet all of the requirements of these Game Procedures, the State Lottery Act (Texas Government Code, Chapter 466), and applicable 42 TexReg 2962 June 2, 2017 Texas Register

79 rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401. J. Scratch Ticket Game, Scratch Ticket, or Ticket - Texas Lottery "BIG PLAY CASHWORD" Scratch Ticket Game No Determination of Prize Winners. The determination of prize winners is subject to the general Scratch Ticket validation requirements set forth in Texas Lottery Rule , Instant Game Rules, these Game Procedures, and the requirements set out on the back of each Scratch Ticket. A prize winner in the "BIG PLAY CASHWORD" Scratch Ticket Game is determined once the latex on the Scratch Ticket is scratched off to expose 397 (three hundred ninety-seven) Play Symbols. The player must scratch the 20 YOUR LETTERS. The player then scratches all the letters found in PUZZLE 1, PUZZLE 2 and PUZZLE 3 that exactly match the YOUR LETTERS. If the player has scratched at least 3 complete WORDS within a PUZZLE, the player wins the prize found in the corresponding PRIZE LEG- END. Each PUZZLE is played separately. WORDS revealed in one PUZZLE cannot be combined with WORDS revealed from another PUZZLE. Only one prize paid per PUZZLE. Only letters within the same PUZZLE that are matched with the YOUR LETTERS can be used to form a complete WORD. In each PUZZLE, every lettered square within an unbroken horizontal (left to right) or vertical (top to bottom) sequence must be matched with the YOUR LETTERS to be considered a complete WORD. Words revealed in a diagonal sequence are not considered valid WORDS. Words within WORDS are not eligible for a prize. IN THIS EXAMPLE: Winning WORDS: SPY, STONE, LET. Non-Winning words: TON or ONE. A complete WORD must contain at least three letters. PUZZLE 1 and PUZZLE 2 can win by revealing 3 to 10 complete WORDS on each PUZZLE. PUZZLE 3 can win by revealing 3 to 9 complete WORDS. BONUS WORD 1 & 2: Scratch each letter in BONUS WORD 1 and BONUS WORD 2 that exactly match the YOUR LETTERS. If the player scratches a complete BONUS WORD, the player wins the prize for that BONUS WORD. A completed BONUS WORD cannot be used to win in PUZZLE 1, PUZZLE 2 or PUZZLE 3. No portion of the Display Printing nor any extraneous matter whatsoever shall be usable or playable as a part of the Instant Game. 2.1 Scratch Ticket Validation Requirements. A. To be a valid Scratch Ticket, all of the following requirements must be met: 1. Exactly 397 (three hundred ninety-seven) Play Symbols must appear under the Latex Overprint on the front portion of the Scratch Ticket; 2. Each of the Play Symbols must have a Play Symbol Caption underneath, unless specified, and each Play Symbol must agree with its Play Symbol Caption; Crossword and Bingo games do not typical have Play Symbol Captions; 3. Each of the Play Symbols must be present in its entirety and be fully legible; 4. Each of the Play Symbols must be printed in black ink except for dual image games; 5. The Scratch Ticket shall be intact; 6. The Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be present in their entirety and be fully legible; 7. The Serial Number must correspond, using the Texas Lottery's codes, to the Play Symbols on the Scratch Ticket; 8. The Scratch Ticket must not have a hole punched through it, be mutilated, altered, unreadable, reconstituted or tampered with in any manner; 9. The Scratch Ticket must not be counterfeit in whole or in part; 10. The Scratch Ticket must have been issued by the Texas Lottery in an authorized manner; 11. The Scratch Ticket must not have been stolen, nor appear on any list of omitted Scratch Tickets or non-activated Scratch Tickets on file at the Texas Lottery; 12. The Play Symbols, Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be right side up and not reversed in any manner; 13. The Scratch Ticket must be complete and not miscut, and have exactly 397 (three hundred ninety-seven) Play Symbols under the Latex Overprint on the front portion of the Scratch Ticket, exactly one Serial Number, exactly one Retailer Validation Code, and exactly one Pack- Scratch Ticket Number on the Scratch Ticket; 14. The Serial Number of an apparent winning Scratch Ticket shall correspond with the Texas Lottery's Serial Numbers for winning Scratch Tickets, and a Scratch Ticket with that Serial Number shall not have been paid previously; 15. The Scratch Ticket must not be blank or partially blank, misregistered, defective or printed or produced in error; 16. Each of the 397 (three hundred ninety-seven) Play Symbols must be exactly one of those described in Section 1.2.C of these Game Procedures; 17. Each of the 397 (three hundred ninety-seven) Play Symbols on the Scratch Ticket must be printed in the Symbol font and must correspond precisely to the artwork on file at the Texas Lottery; the Scratch Ticket Serial Numbers must be printed in the Serial font and must correspond precisely to the artwork on file at the Texas Lottery; and the Pack-Scratch Ticket Number must be printed in the Pack-Scratch Ticket Number font and must correspond precisely to the artwork on file at the Texas Lottery; 18. The Display Printing on the Scratch Ticket must be regular in every respect and correspond precisely to the artwork on file at the Texas Lottery; and 19. The Scratch Ticket must have been received by the Texas Lottery by applicable deadlines. B. The Scratch Ticket must pass all additional validation tests provided for in these Game Procedures, the Texas Lottery's Rules governing the award of prizes of the amount to be validated, and any confidential validation and security tests of the Texas Lottery. C. Any Scratch Ticket not passing all of the validation requirements is void and ineligible for any prize and shall not be paid. However, the Executive Director may, solely at the Executive Director's discretion, refund the retail sales price of the Scratch Ticket. In the event a defective Scratch Ticket is purchased, the only responsibility or liability of the Texas Lottery shall be to replace the defective Scratch Ticket with another unplayed Scratch Ticket in that Scratch Ticket Game (or a Scratch Ticket of equivalent sales price from any other current Texas Lottery Scratch Ticket Game) or refund the retail sales price of the Scratch Ticket, solely at the Executive Director's discretion. 2.2 Programmed Game Parameters. A. Consecutive Non-Winning Tickets within a Pack will not have matching patterns of either Play Symbols or Prize Symbols. B. A Ticket will win as indicated by the prize structure. IN ADDITION June 2, TexReg 2963

80 C. Each Ticket consists of a YOUR LETTERS play area, two (2) BONUS WORD play areas, two (2) BONUS WORD prizes and three (3) BIG PLAY CASHWORD PUZZLE grids. D. The BIG PLAY CASHWORD PUZZLE grids will be formatted with at least one thousand (1,000) configurations (i.e., PUZZLE layouts not including words). E. All BIG PLAY CASHWORD PUZZLE grid configurations will be formatted within a grid that contains eleven (11) spaces (height) by eleven (11) spaces (width). F. There will be no matching BIG PLAY CASHWORD PUZZLE grids on the same Ticket. G. Each word will appear only once per Ticket on all BIG PLAY CASHWORD PUZZLE grids and BONUS WORDS. H. Each letter will only appear once per Ticket in the YOUR LETTER play area. I. Each BIG PLAY CASHWORD PUZZLE grid will contain the following: a) 4 sets of 3 - letter words b) 5 sets of 4 - letter words c) 3 sets of 5 - letter words d) 3 sets of 6 - letter words e) 1 set of 7 - letter words f) 2 sets of 8 - letter words g) 1 set of 9 - letter words J. All BIG PLAY CASHWORD PUZZLE grids will have an equal chance of winning a prize. K. There will be a minimum of three (3) vowels in the YOUR LET- TERS play area. A vowel is defined as the letters A, E, I, O and U. L. The length of words found in the BIG PLAY CASHWORD PUZ- ZLE grids will range from three (3) to nine (9) letters. M. Only words from the approved word list will appear in the BIG PLAY CASHWORD PUZZLE grids and BONUS WORDS. (Texas_Bonus_v2_2July2015.doc) N. None of the prohibited words (Texas _Prohibited_v3_2July2015.doc) will appear horizontally (in either direction), vertically (in either direction) or diagonally (in either direction) in the YOUR LETTERS play area. In addition, when all rows of the YOUR LETTERS are joined together into a single continuous row of letters (first row, followed by second row, etc.), none of the prohibited words will appear in either the forward or reverse direction. O. A player will never find a word horizontally (in either direction), vertically (in either direction) or diagonally (in either direction) in the YOUR LETTERS play area that matches a word in any of the BIG PLAY CASHWORD PUZZLE grids. P. Each BIG PLAY CASHWORD PUZZLE grid will have a maximum number of different grid formations with respect to other constraints. That is, for identically formatted BIG PLAY CASHWORD PUZZLES (i.e., the same grid), all "approved words" will appear in every logical (i.e., 3 letter word = 3 letter space) position, with regards to limitations caused by the actual letters contained in each word (i.e., this will not place the word "ZOO" in a position that causes an intersecting word to require the second letter to be "Z", when in fact, there are no approved words with a "Z" in the second letter position). Q. Each letter, with the exception of vowels, will appear no more than nine (9) times in a BIG PLAY CASHWORD PUZZLE grid. R. No Ticket will match eleven (11) words or more on a BIG PLAY CASHWORD PUZZLE grid. S. Each Ticket may only win one (1) prize per BIG PLAY CASH- WORD PUZZLE grid as per the prize structure. T. Three (3) to ten (10) completed words will be revealed as per the prize structure. U. If players reveal a complete BONUS WORD, they win the prize above for that BONUS WORD. V. BIG PLAY CASHWORD PUZZLE grid 3 will only win on Tickets that win two (2) or more times. W. Sixteen (16) to twenty (20) YOUR LETTERS will open at least one (1) letter in a BIG PLAY CASHWORD PUZZLE grid. X. Each BONUS WORD will be exactly six (6) letters long and each of those letters will be different. Y. Each BONUS WORD will have at least one (1) letter matching a YOUR LETTERS. Z. Tickets will not contain matching BONUS WORD Prize Symbols. 2.3 Procedure for Claiming Prizes. A. To claim a "BIG PLAY CASHWORD" Scratch Ticket Game prize of $10.00, $20.00, $30.00, $50.00, $100, $200 or $500, a claimant shall sign the back of the Scratch Ticket in the space designated on the Scratch Ticket and present the winning Scratch Ticket to any Texas Lottery Retailer. The Texas Lottery Retailer shall verify the claim and, if valid, and upon presentation of proper identification, if appropriate, make payment of the amount due the claimant and physically void the Scratch Ticket; provided that the Texas Lottery Retailer may, but is not required, to pay a $100, $200 or $500 Scratch Ticket Game. In the event the Texas Lottery Retailer cannot verify the claim, the Texas Lottery Retailer shall provide the claimant with a claim form and instruct the claimant on how to file a claim with the Texas Lottery. If the claim is validated by the Texas Lottery, a check shall be forwarded to the claimant in the amount due. In the event the claim is not validated, the claim shall be denied and the claimant shall be notified promptly. A claimant may also claim any of the above prizes under the procedure described in Section 2.3.B and Section 2.3.C of these Game Procedures. B. To claim a "BIG PLAY CASHWORD" Scratch Ticket Game prize of $1,000, $5,000, $10,000, $15,000 or $250,000, the claimant must sign the winning Scratch Ticket and present it at one of the Texas Lottery's Claim Centers. If the claim is validated by the Texas Lottery, payment will be made to the bearer of the validated winning Scratch Ticket for that prize upon presentation of proper identification. When paying a prize of $600 or more, the Texas Lottery shall file the appropriate income reporting form with the Internal Revenue Service (IRS) and shall withhold federal income tax at a rate set by the IRS if required. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. C. As an alternative method of claiming a "BIG PLAY CASHWORD" Scratch Ticket Game prize, the claimant must sign the winning Scratch Ticket, thoroughly complete a claim form, and mail both to: Texas Lottery Commission, P.O. Box 16600, Austin, Texas The Texas Lottery is not responsible for Scratch Tickets lost in the mail. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. D. Prior to payment by the Texas Lottery of any prize, the Texas Lottery shall deduct: 42 TexReg 2964 June 2, 2017 Texas Register

81 1. A sufficient amount from the winnings of a prize winner who has been finally determined to be: a. delinquent in the payment of a tax or other money to a state agency and that delinquency is reported to the Comptroller under Government Code ; b. in default on a loan made under Chapter 52, Education Code; or c. in default on a loan guaranteed under Chapter 57, Education Code; and 2. delinquent child support payments from the winnings of a prize winner in the amount of the delinquency as determined by a court or a Title IV-D agency under Chapter 231, Family Code. E. If a person is indebted or owes delinquent taxes to the State, other than those specified in the preceding paragraph, the winnings of a person shall be withheld until the debt or taxes are paid. 2.4 Allowance for Delay of Payment. The Texas Lottery may delay payment of the prize pending a final determination by the Executive Director, under any of the following circumstances: A. if a dispute occurs, or it appears likely that a dispute may occur, regarding the prize; B. if there is any question regarding the identity of the claimant; C. if there is any question regarding the validity of the Scratch Ticket presented for payment; or D. if the claim is subject to any deduction from the payment otherwise due, as described in Section 2.3.D of these Game Procedures. No liability for interest for any delay shall accrue to the benefit of the claimant pending payment of the claim. 2.5 Payment of Prizes to Persons Under 18. If a person under the age of 18 years is entitled to a cash prize under $600 from the "BIG PLAY CASHWORD" Scratch Ticket Game, the Texas Lottery shall deliver to an adult member of the minor's family or the minor's guardian a check or warrant in the amount of the prize payable to the order of the minor. 2.6 If a person under the age of 18 years is entitled to a cash prize of $600 or more from the "BIG PLAY CASHWORD" Scratch Ticket Game, the Texas Lottery shall deposit the amount of the prize in a custodial bank account, with an adult member of the minor's family or the minor's guardian serving as custodian for the minor. 2.7 Scratch Ticket Claim Period. All Scratch Ticket prizes must be claimed within 180 days following the end of the Scratch Ticket Game or within the applicable time period for certain eligible military personnel as set forth in Texas Government Code Any rights to a prize that is not claimed within that period, and in the manner specified in these Game Procedures and on the back of each Scratch Ticket, shall be forfeited. 2.8 Disclaimer. The number of prizes in a game is approximate based on the number of Scratch Tickets ordered. The number of actual prizes available in a game may vary based on number of Scratch Tickets manufactured, testing, distribution, sales and number of prizes claimed. A Scratch Ticket Game may continue to be sold even when all the top prizes have been claimed. 3.0 Scratch Ticket Ownership. A. Until such time as a signature is placed upon the back portion of a Scratch Ticket in the space designated, a Scratch Ticket shall be owned by the physical possessor of said Scratch Ticket. When a signature is placed on the back of the Scratch Ticket in the space designated, the player whose signature appears in that area shall be the owner of the Scratch Ticket and shall be entitled to any prize attributable thereto. Notwithstanding any name or names submitted on a claim form, the Executive Director shall make payment to the player whose signature appears on the back of the Scratch Ticket in the space designated. If more than one name appears on the back of the Scratch Ticket, the Executive Director will require that one of those players whose name appears thereon be designated by such players to receive payment. B. The Texas Lottery shall not be responsible for lost or stolen Scratch Tickets and shall not be required to pay on a lost or stolen Scratch Ticket. 4.0 Number and Value of Scratch Ticket Prizes. There will be approximately 13,080,000 Scratch Tickets in Scratch Ticket Game No The approximate number and value of prizes in the game are as follows: IN ADDITION June 2, TexReg 2965

82 A. The actual number of Scratch Tickets in the game may be increased or decreased at the sole discretion of the Texas Lottery Commission. 5.0 End of the Scratch Ticket Game. The Executive Director may, at any time, announce a closing date (end date) for the Scratch Ticket Game No without advance notice, at which point no further Scratch Tickets in that game may be sold. The determination of the closing date and reasons for closing will be made in accordance with the Scratch Ticket closing procedures and the Instant Game Rules. See 16 TAC (j). 6.0 Governing Law. In purchasing a Scratch Ticket, the player agrees to comply with, and abide by, these Game Procedures for Scratch Ticket Game No. 1860, the State Lottery Act (Texas Government Code, Chapter 466), applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401, and all final decisions of the Executive Director. TRD Bob Biard General Counsel Texas Lottery Commission Filed: May 22, 2017 Scratch Ticket Game Number 1883 "Wild 10's" 1.0 Name and Style of Scratch Ticket Game. A. The name of Scratch Ticket Game No is "WILD 10'S". The play style is "other". 1.1 Price of Scratch Ticket Game. A. The price for Scratch Ticket Game No shall be $2.00 per Scratch Ticket. 1.2 Definitions in Scratch Ticket Game No A. Display Printing - That area of the Scratch Ticket outside of the area where the overprint and Play Symbols appear. B. Latex Overprint - The removable scratch-off covering over the Play Symbols on the front of the Scratch Ticket. C. Play Symbol - The printed data under the latex on the front of the Scratch Ticket that is used to determine eligibility for a prize. Each Play Symbol is printed in Symbol font in black ink in positive except for dual-image games. The possible black Play Symbols are: 01, 02, 03, 04, 05, 06, 07, 08, 09, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 10 SYMBOL, $2.00, $5.00, $20.00, $30.00, $50.00, $100, $1,000 and $30,000. D. Play Symbol Caption - The printed material appearing below each Play Symbol which explains the Play Symbol. One caption appears under each Play Symbol and is printed in caption font in black ink in positive. The Play Symbol Caption which corresponds with and verifies each Play Symbol is as follows: 42 TexReg 2966 June 2, 2017 Texas Register

83 IN ADDITION June 2, TexReg 2967

84 E. Serial Number - A unique 13 (thirteen) digit number appearing under the latex scratch-off covering on the front of the Scratch Ticket. The Serial Number is for validation purposes and cannot be used to play the game. The format will be: F. Bar Code - A 24 (twenty-four) character interleaved two (2) of five (5) Bar Code which will include a four (4) digit game ID, the seven (7) digit Pack number, the three (3) digit Scratch Ticket number and the ten (10) digit Validation Number. The Bar Code appears on the back of the Scratch Ticket. G. Pack-Scratch Ticket Number - A 14 (fourteen) digit number consisting of the four (4) digit game number (1883), a seven (7) digit Pack number, and a three (3) digit Scratch Ticket number. Scratch Ticket numbers start with 001 and end with 125 within each Pack. The format will be: H. Pack - A Pack of the "WILD 10'S" Scratch Ticket Game contains 125 Tickets, packed in plastic shrink-wrapping and fanfolded in pages of two (2). One (1) Ticket will be folded over to expose a front and back of one (1) Ticket on each Pack. All Packs will be tightly shrinkwrapped. There will be no breaks between the Tickets in a Pack. I. Non-Winning Scratch Ticket - A Scratch Ticket which is not programmed to be a winning Scratch Ticket or a Scratch Ticket that does not meet all of the requirements of these Game Procedures, the State Lottery Act (Texas Government Code, Chapter 466), and applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401. J. Scratch Ticket Game, Scratch Ticket or Ticket - Texas Lottery "WILD 10'S" Scratch Ticket Game No Determination of Prize Winners. The determination of prize winners is subject to the general Scratch Ticket validation requirements set forth in Texas Lottery Rule , Instant Game Rules, these Game Procedures, and the requirements set out on the back of each Scratch Ticket. A prize winner in the "WILD 10'S" Scratch Ticket Game is determined once the latex on the Scratch Ticket is scratched off to expose 32 (thirty-two) Play Symbols. If a player reveals one (1) "10" Play Symbol, the player wins the PRIZE for that GAME. If a player reveals two (2) "10" Play Symbols in the same GAME, the player wins DOU- BLE the PRIZE for that GAME. If a player reveals three (3) "10" Play Symbols in the same GAME, the player wins 10 TIMES the PRIZE for that GAME. EACH GAME PLAYED SEPARATELY. No portion of the Display Printing nor any extraneous matter whatsoever shall be usable or playable as a part of the Scratch Ticket. 2.1 Scratch Ticket Validation Requirements. A. To be a valid Scratch Ticket, all of the following requirements must be met: 1. Exactly 32 (thirty-two) Play Symbols must appear under the Latex Overprint on the front portion of the Scratch Ticket; 2. Each of the Play Symbols must have a Play Symbol Caption underneath, unless specified, and each Play Symbol must agree with its Play Symbol Caption; 42 TexReg 2968 June 2, 2017 Texas Register

85 3. Each of the Play Symbols must be present in its entirety and be fully legible; 4. Each of the Play Symbols must be printed in black ink except for dual image games; 5. The Scratch Ticket shall be intact; 6. The Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be present in their entirety and be fully legible; 7. The Serial Number must correspond, using the Texas Lottery's codes, to the Play Symbols on the Scratch Ticket; 8. The Scratch Ticket must not have a hole punched through it, be mutilated, altered, unreadable, reconstituted or tampered with in any manner; 9. The Scratch Ticket must not be counterfeit in whole or in part; 10. The Scratch Ticket must have been issued by the Texas Lottery in an authorized manner; 11. The Scratch Ticket must not have been stolen, nor appear on any list of omitted Scratch Tickets or non-activated Scratch Tickets on file at the Texas Lottery; 12. The Play Symbols, Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be right side up and not reversed in any manner; 13. The Scratch Ticket must be complete and not miscut, and have exactly 32 (thirty-two) Play Symbols under the Latex Overprint on the front portion of the Scratch Ticket, exactly one Serial Number, exactly one Retailer Validation Code, and exactly one Pack-Scratch Ticket Number on the Scratch Ticket; 14. The Serial Number of an apparent winning Scratch Ticket shall correspond with the Texas Lottery's Serial Numbers for winning Scratch Tickets, and a Scratch Ticket with that Serial Number shall not have been paid previously; 15. The Scratch Ticket must not be blank or partially blank, misregistered, defective or printed or produced in error; 16. Each of the 32 (thirty-two) Play Symbols must be exactly one of those described in Section 1.2.C of these Game Procedures; 17. Each of the 32 (thirty-two) Play Symbols on the Scratch Ticket must be printed in the Symbol font and must correspond precisely to the artwork on file at the Texas Lottery; the Scratch Ticket Serial Numbers must be printed in the Serial font and must correspond precisely to the artwork on file at the Texas Lottery; and the Pack-Scratch Ticket Number must be printed in the Pack-Scratch Ticket Number font and must correspond precisely to the artwork on file at the Texas Lottery; 18. The Display Printing on the Scratch Ticket must be regular in every respect and correspond precisely to the artwork on file at the Texas Lottery; and 19. The Scratch Ticket must have been received by the Texas Lottery by applicable deadlines. B. The Scratch Ticket must pass all additional validation tests provided for in these Game Procedures, the Texas Lottery's Rules governing the award of prizes of the amount to be validated, and any confidential validation and security tests of the Texas Lottery. C. Any Scratch Ticket not passing all of the validation requirements is void and ineligible for any prize and shall not be paid. However, the Executive Director may, solely at the Executive Director's discretion, refund the retail sales price of the Scratch Ticket. In the event a defective Scratch Ticket is purchased, the only responsibility or liability of the Texas Lottery shall be to replace the defective Scratch Ticket with another unplayed Scratch Ticket in that Scratch Ticket Game (or a Scratch Ticket of equivalent sales price from any other current Texas Lottery Scratch Ticket Game) or refund the retail sales price of the Scratch Ticket, solely at the Executive Director's discretion. Programmed Game Parameters. A. Consecutive Non-Winning Tickets within a Pack will not have matching patterns of either Play Symbols or Prize Symbols. B. A Ticket will win as indicated by the prize structure. C. On winning and Non-Winning Tickets, the top cash prizes of $30,000 and $1,000 will each appear at least once, except on Tickets winning eight (8) times. D. A Ticket can win up to eight (8) times: once in each GAME. E. On winning Tickets, a non-winning prize amount will not match a winning prize amount. F. On all Tickets, a prize amount will not appear more than three (3) times, except as required by the prize structure to create multiple wins. G. The play area consists of twenty-four (24) Play Symbols and eight (8) Prize Symbols. H. Non-winning Play Symbols within a GAME will be different. I. Consecutive Non-Winning Tickets within a Pack will not have matching GAMES. For instance if the first Ticket contains a 05 Play Symbol, 08 Play Symbol and a 12 Play Symbol in any GAME, then the next Ticket may not contain a 05 Play Symbol, 08 Play Symbol and 12 Play Symbol, in any GAME in any order. J. Non-Winning Tickets will not have matching GAMES. For example if GAME 1 is the 05 Play Symbol, 08 Play Symbol and 12 Play Symbol, then GAME 2 through GAME 8 will not contain the 05 Play Symbol, 08 Play Symbol and 12 Play Symbol in any order. K. The "10" (WIN) Play Symbol will not appear on Non-Winning Tickets. L. Winning Tickets will contain one (1) "10" (WIN) Play Symbol in a GAME, two (2) "10" (WIN) Play Symbols in the same GAME and/or three (3) "10" (WIN) Play Symbols in the same GAME. M. One (1) "10" (WIN) Play Symbol will win the PRIZE for that GAME and will win as per the prize structure. N. Two (2) "10" (WIN) Play Symbols in the same GAME will win DOUBLE the PRIZE for that GAME and will win as per the prize structure. O. Three (3) "10" (WIN) Play Symbols in the same GAME will win 10 TIMES the PRIZE for that GAME and will win as per the prize structure. 2.3 Procedure for Claiming Prizes. A. To claim a "WILD 10'S" Scratch Ticket Game prize of $2.00, $4.00, $5.00, $20.00, $30.00, $50.00 or $100 a claimant shall sign the back of the Scratch Ticket in the space designated on the Scratch Ticket and present the winning Scratch Ticket to any Texas Lottery Retailer. The Texas Lottery Retailer shall verify the claim and, if valid, and upon presentation of proper identification, if appropriate, make payment of the amount due the claimant and physically void the Scratch Ticket; provided that the Texas Lottery Retailer may, but is not required, to pay a $30.00, $50.00 or $100, Scratch Ticket Game. In the event the Texas Lottery Retailer cannot verify the claim, the Texas Lottery Retailer shall provide the claimant with a claim form and instruct the claimant on how to file a claim with the Texas Lottery. If the claim is validated IN ADDITION June 2, TexReg 2969

86 by the Texas Lottery, a check shall be forwarded to the claimant in the amount due. In the event the claim is not validated, the claim shall be denied and the claimant shall be notified promptly. A claimant may also claim any of the above prizes under the procedure described in Section 2.3.B and Section 2.3.C of these Game Procedures. B. To claim a "WILD 10'S" Scratch Ticket Game prize of $1,000 or $30,000 the claimant must sign the winning Scratch Ticket and present it at one of the Texas Lottery's Claim Centers. If the claim is validated by the Texas Lottery, payment will be made to the bearer of the validated winning Scratch Ticket for that prize upon presentation of proper identification. When paying a prize of $600 or more, the Texas Lottery shall file the appropriate income reporting form with the Internal Revenue Service (IRS) and shall withhold federal income tax at a rate set by the IRS if required. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. C. As an alternative method of claiming a "WILD 10'S" Scratch Ticket Game prize, the claimant must sign the winning Scratch Ticket, thoroughly complete a claim form, and mail both to: Texas Lottery Commission, P.O. Box 16600, Austin, Texas The Texas Lottery is not responsible for Scratch Tickets lost in the mail. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. D. Prior to payment by the Texas Lottery of any prize, the Texas Lottery shall deduct: 1. A sufficient amount from the winnings of a prize winner who has been finally determined to be: a. delinquent in the payment of a tax or other money to a state agency and that delinquency is reported to the Comptroller under Government Code ; b. in default on a loan made under Chapter 52, Education Code; or c. in default on a loan guaranteed under Chapter 57, Education Code; and 2. delinquent child support payments from the winnings of a prize winner in the amount of the delinquency as determined by a court or a Title IV-D agency under Chapter 231, Family Code. E. If a person is indebted or owes delinquent taxes to the State, other than those specified in the preceding paragraph, the winnings of a person shall be withheld until the debt or taxes are paid. 2.4 Allowance for Delay of Payment. The Texas Lottery may delay payment of the prize pending a final determination by the Executive Director, under any of the following circumstances: A. if a dispute occurs, or it appears likely that a dispute may occur, regarding the prize; B. if there is any question regarding the identity of the claimant; C. if there is any question regarding the validity of the Scratch Ticket presented for payment; or D. if the claim is subject to any deduction from the payment otherwise due, as described in Section 2.3.D of these Game Procedures. No liability for interest for any delay shall accrue to the benefit of the claimant pending payment of the claim. 2.5 Payment of Prizes to Persons Under 18. If a person under the age of 18 years is entitled to a cash prize under $600 from the "WILD 10'S" Scratch Ticket Game, the Texas Lottery shall deliver to an adult member of the minor's family or the minor's guardian a check or warrant in the amount of the prize payable to the order of the minor. 2.6 If a person under the age of 18 years is entitled to a cash prize of $600 or more from the "WILD 10'S" Scratch Ticket Game, the Texas Lottery shall deposit the amount of the prize in a custodial bank account, with an adult member of the minor's family or the minor's guardian serving as custodian for the minor. 2.7 Scratch Ticket Claim Period. All Scratch Ticket prizes must be claimed within 180 days following the end of the Scratch Ticket Game or within the applicable time period for certain eligible military personnel as set forth in Texas Government Code Any rights to a prize that is not claimed within that period, and in the manner specified in these Game Procedures and on the back of each Scratch Ticket, shall be forfeited. 2.8 Disclaimer. The number of prizes in a game is approximate based on the number of Scratch Tickets ordered. The number of actual prizes available in a game may vary based on number of Scratch Tickets manufactured, testing, distribution, sales and number of prizes claimed. A Scratch Ticket Game may continue to be sold even when all the top prizes have been claimed. 3.0 Scratch Ticket Ownership. A. Until such time as a signature is placed upon the back portion of a Scratch Ticket in the space designated, a Scratch Ticket shall be owned by the physical possessor of said Scratch Ticket. When a signature is placed on the back of the Scratch Ticket in the space designated, the player whose signature appears in that area shall be the owner of the Scratch Ticket and shall be entitled to any prize attributable thereto. Notwithstanding any name or names submitted on a claim form, the Executive Director shall make payment to the player whose signature appears on the back of the Scratch Ticket in the space designated. If more than one name appears on the back of the Scratch Ticket, the Executive Director will require that one of those players whose name appears thereon be designated by such players to receive payment. B. The Texas Lottery shall not be responsible for lost or stolen Scratch Tickets and shall not be required to pay on a lost or stolen Scratch Ticket. 4.0 Number and Value of Scratch Ticket Prizes. There will be approximately 7,200,000 Scratch Tickets in Scratch Ticket Game No The approximate number and value of prizes in the game are as follows: 42 TexReg 2970 June 2, 2017 Texas Register

87 A. The actual number of Scratch Tickets in the game may be increased or decreased at the sole discretion of the Texas Lottery Commission. 5.0 End of the Scratch Ticket Game. The Executive Director may, at any time, announce a closing date (end date) for the Scratch Ticket Game No without advance notice, at which point no further Scratch Tickets in that game may be sold. The determination of the closing date and reasons for closing will be made in accordance with the Scratch Ticket closing procedures and the Instant Game Rules. See 16 TAC (j). 6.0 Governing Law. In purchasing a Scratch Ticket, the player agrees to comply with, and abide by, these Game Procedures for Scratch Ticket Game No. 1883, the State Lottery Act (Texas Government Code, Chapter 466), applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401, and all final decisions of the Executive Director. TRD Bob Biard General Counsel Texas Lottery Commission Filed: May 23, 2017 North Central Texas Council of Governments Request for Proposals for Cooperative Transit Vehicle Security Camera Systems (Re-Solicitation) The North Central Texas Council of Governments (NCTCOG) is requesting written proposals from qualified vendor(s) to deliver and install camera systems to support onboard transit vehicle security for various sub-recipients of Federal Transit Administration (FTA) grant funding. NCTCOG is resoliciting proposals for a cooperative procurement from qualified vendors with experience in providing and installing video surveillance camera systems on three transit vehicle types: Small Transit Vehicles, Light-Duty Transit Buses, and Medium-Duty Transit Buses. The project is a regional effort to provide uniform security technology upgrades to sub-grantees receiving federal funds through NCTCOG. Vendor(s) must submit proposals for all three of the vehicle types listed above. NCTCOG reserves the right not to make an award under this RFP if it is in the best interest of NCTCOG or NCTCOG's sub-grantees. Proposals must be received no later than 5:00 p.m., on Friday, July 14, 2017, to Karina Maldonado, Transportation Planner III, North Central Texas Council of Governments, 616 Six Flags Drive, Arlington, Texas Copies of the Request for Proposals will be available at by the close of business on Friday, June 2, NCTCOG encourages participation by disadvantaged business enterprises and does not discriminate on the basis of age, race, color, religion, sex, national origin, or disability. TRD R. Michael Eastland Executive Director North Central Texas Council of Governments Filed: May 24, 2017 Public Utility Commission of Texas Announcement of Application for Amendment to a State-Issued Certificate of Franchise Authority The Public Utility Commission of Texas (commission) received an application on May 19, 2017, to amend a state-issued certificate of franchise authority, under Public Utility Regulatory Act IN ADDITION June 2, TexReg 2971

88 Project Title and Number: Application of CommZoom, LLC for Amendment to a State-Issued Certificate of Franchise Authority, Project Number The requested amendment is to expand the service area footprint to include the municipal boundaries of the Cities of Jourdanton, Poteet, and Three Rivers, Texas. Information on the application may be obtained by contacting the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll free at (888) Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All inquiries should reference Project Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 23, 2017 Notice of Application for a Service Provider Certificate of Operating Authority Notice is given to the public of the filing with the Public Utility Commission of Texas (commission) of an application on May 16, 2017, for a service provider certificate of operating authority, pursuant to the Public Utility Regulatory Act. Applicant intends to provide facilities-based, data and resale services throughout the entire state of Texas. Docket Title and Number: Application of SQF, LLC d/b/a Tilson for a Service Provider Certificate of Operating Authority, Docket Number Persons who wish to comment upon the action sought should contact the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll free at (888) no later than June 9, Hearing and speech impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 19, 2017 Notice of Application for Sale, Transfer, or Merger Notice is given to the public of an application filed with the Public Utility Commission of Texas (Commission) on May 15, 2017, pursuant to the Public Utility Regulatory Act, Tex. Util. Code Ann , , and Docket Style and Number: Application of East Texas Electric Cooperative, Inc. for Approval of Transaction with Sam Rayburn G&T Electric Cooperative, Inc. and Tex-La Electric Cooperative of Texas, Inc., Docket Number The Application: On May 15, 2017, East Texas Electric Cooperative, Inc. filed an application for approval of the merger and/or consolidation of Sam Rayburn G&T Electric Cooperative, Inc., Tex-La Electric Cooperative of Texas, Inc. with and into East Texas Electric Cooperative, Inc. Persons wishing to intervene or comment on the action sought should contact the Public Utility Commission of Texas as soon as possible as an intervention deadline will be imposed. A comment or request to intervene should be mailed to by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 22, 2017 Notice of Application for Service Area Exception Notice is given to the public of the filing with the Public Utility Commission of Texas (commission) of an application on May 16, 2017, to amend a certificate of convenience and necessity for a service area exception within Dallas County, Texas. Docket Style and Number: Application of Garland Power & Light to Amend a Certificate of Convenience and Necessity for a Service Area Exception in Dallas County. Docket Number The Application: Garland Power & Light (GP&L) filed an application for a service area boundary exception to allow GP&L to provide service to a specific customer located within the certificated service area of Oncor Electric Delivery Company, LLC. Oncor has provided an affidavit of relinquishment for the proposed change. Persons wishing to comment on the action sought or intervene should contact the commission no later than June 9, 2017 by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 18, 2017 Notice of Application to Amend a Sewer Certificate of Convenience and Necessity Notice is given to the public of the filing of an application to amend a sewer certificate of convenience and necessity in Smith County. Docket Style and Number: Application of Liberty Utilities (Tall Timbers Sewer) Corp. to Amend a Sewer Certificate of Convenience and Necessity in Smith County (Acadia Place), Docket Number The Application: Liberty Utilities (Tall Timbers Sewer) Corp. filed an application to amend its sewer certificate of convenience and necessity number in Smith County. The total service area being requested includes approximately 37 acres and 97 current customers. Persons wishing to intervene or comment on the action sought should contact the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TexReg 2972 June 2, 2017 Texas Register

89 TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 19, 2017 Notice of Application to Amend a Sewer Certificate of Convenience and Necessity Notice is given to the public of the filing of an application to amend a sewer certificate of convenience and necessity in Smith County. Docket Style and Number: Application of Liberty Utilities (Woodmark) Corp. to Amend a Sewer Certificate of Convenience and Necessity in Smith County (Cooks Ranch), Docket Number The Application: Liberty Utilities (Woodmark) Corp. filed an application to amend its sewer certificate of convenience and necessity number in Smith County. The total service area being requested includes approximately 38 acres and 48 current customers. Persons wishing to intervene or comment on the action sought should contact the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 19, 2017 Notice of Application to Amend a Sewer Certificate of Convenience and Necessity Notice is given to the public of the filing of an application to amend a sewer certificate of convenience and necessity in Smith County. Docket Style and Number: Application of Liberty Utilities (Woodmark) Corp. to Amend a Sewer Certificate of Convenience and Necessity in Smith County (Baker Plantation), Docket Number The Application: Liberty Utilities (Woodmark) Corp. filed an application to amend its sewer certificate of convenience and necessity number in Smith County. The total service area being requested includes approximately 51 acres and 0 current customers. Persons wishing to intervene or comment on the action sought should contact the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 19, 2017 Notice of Application to Amend a Sewer Certificate of Convenience and Necessity Notice is given to the public of the filing of an application to amend a sewer certificate of convenience and necessity in Smith County. Docket Style and Number: Application of Liberty Utilities (Woodmark) Corp. to Amend a Sewer Certificate of Convenience and Necessity in Smith County (Vanderbilt Estates), Docket Number The Application: Liberty Utilities (Woodmark) Corp. filed an application to amend its sewer certificate of convenience and necessity number in Smith County. The total service area being requested includes approximately 65 acres and 18 current customers. Persons wishing to intervene or comment on the action sought should contact the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 19, 2017 Notice of Application to Amend a Water Certificate of Convenience and Necessity Notice is given to the public of an application filed with the Public Utility Commission of Texas to amend a water certificate of convenience and necessity (CCN) in Collin, Hunt and Fannin Counties. Docket Style and Number: Application of Frognot Water Supply Corporation to Amend a Water Certificate of Convenience and Necessity for Dual Certification of Certain Areas in Collin, Hunt and Fannin Counties, Docket Number The Application: Frognot Water Supply Corporation filed an application to amend its water CCN No in Collin, Hunt and Fannin Counties. Frognot requests to transfer existing customers and facilities from the North Farmersville Water Supply Corporation to Frognot, and for dual certification in certain areas with North Farmersville WSC, Caddo Basin SUD, and West Leonard WSC. The total service area being requested includes approximately 1,331 acres and 41 current customers. Persons wishing to intervene or comment on the action sought should contact the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 22, 2017 IN ADDITION June 2, TexReg 2973

90 Notice of Application to Amend Water Certificates of Convenience and Necessity and for Approval of a Service Area Contract Notice is given to the public of the filing with the Public Utility Commission of Texas (commission) of an application to amend water certificates of convenience and necessity (CCN) in Bastrop County. Docket Style and Number: Application of Aqua Water Supply Corporation and City of Smithville for Approval of a Service Area Contract Under Texas Water Code and to Amend Certificates of Convenience and Necessity in Bastrop County, Docket Number The Application: Aqua Water Supply Corporation and the City of Smithville seek approval of an agreement that would amend their water CCN in Bastrop County pursuant to Texas Water Code Aqua holds water CCN No and the City holds water CCN No Aqua and the City have agreed to amend their respective water CCNs to transfer certain certificated service areas from Aqua's CCN No to the City's CCN No The total area being requested includes approximately 907 acres. Aqua agrees to decertification of the proposed water service transfer area as described in the application. The application includes a map depicting the existing certificated areas of applicants, the proposed transfer area, and copy of the service agreement between the parties. Persons wishing to intervene or comment on the action sought should contact the commission by mail at P. O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 19, 2017 Notice of Application to Determine Whether Certain Markets with Populations Less Than 100,000 Should Remain Regulated Notice is given to the public of the filing with the Public Utility Commission of Texas of a petition filed on May 19, 2017, seeking to determine whether certain markets of the company with populations of less than 100,000 in Texas should remain regulated. Docket Style and Number: Petition of Frontier Communications to Deregulate Certain Markets, Docket Number The Application: Frontier claims that 107 of its local exchange markets meet the criteria for deregulation. The affected exchanges are listed in the application as Attachment 1 to the affidavit of Carl E. Erhart. The Commission has jurisdiction over the petition pursuant to of the Public Utility Regulatory Act (PURA). In making a determination, PURA (b)(2) provides that the Commission may not determine that a market should remain regulated if the population in the area included in the market is less than 100,000 and, in addition to the incumbent local exchange company (ILEC), there are at least two competitors operating in all or part of the market that are unaffiliated with the ILEC and provide voice communications service without regard to the delivery technology. Under PURA (a) the Commission shall issue a final order no later than 90 days after the petition is filed. The 90th day in this case is August 17, Persons wishing to intervene or comment on the action sought should contact the Public Utility Commission of Texas by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) as soon as possible as a deadline to intervene will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 23, 2017 Notice of Application to Relinquish Designation as an Eligible Telecommunications Carrier Notice is given to the public of an application filed with the Public Utility Commission of Texas (commission) on May 16, 2017, to relinquish designation as an eligible telecommunications carrier. Docket Title and Number: Application Budget PrePay, Inc. to Relinquish Designation as an Eligible Telecommunications Carrier for Wireless Service, Docket Number The Application: Budget PrePay, Inc. notified the commission that the company seeks to relinquish its Lifeline-only eligible telecommunications carrier (ETC) designation. Budget plans to discontinue its wireless service in Texas. Budget informed the commission that the company plans to discontinue wireless service to its approximately 6,600 current subscribers effective August 15, Budget proposes to provide notice to its customers via text message on three separate occasions beginning in June Budget stated that the company is not the sole ETC in the service area for which it received wireless ETC designation. Persons who wish to intervene in the proceeding or comment upon the action sought should notify the commission as a deadline to intervene will be established. Requests for further information should be mailed to the Public Utility Commission of Texas, P.O. Box 13326, Austin, Texas , or you may call the commission's Office of Customer Protection at (512) or (888) Hearing and speech-impaired individuals with text telephones (TTY) may contact the commission through Relay Texas by dialing All correspondence should refer to Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 19, 2017 Notice of Request for a Cease and Desist Order Notice is given to the public of a request for a cease and desist order filed with the Public Utility Commission of Texas on May 17, Docket Style and Number: Application of Rio Grande Electric Cooperative, Inc. for a Cease and Desist Order against AEP Texas, Inc., Docket Number The Application: Rio Grande Electric Cooperative, Inc. filed a request for a cease and desist order regarding electric service to an area within its singly-certificated service area. Rio Grande stated that AEP Texas, Inc. is currently providing retail electric service to over one hundred residences located in the Uvalde Estate Subdivision, which is located 42 TexReg 2974 June 2, 2017 Texas Register

91 in Rio Grande's singly-certificated service area. Rio Grande contends that AEP's provision of retail electric service to the residences within its singly-certificated service area is not lawful and that AEP should be ordered to cease providing such service. Persons who wish to intervene in the proceeding or comment upon the action sought should contact the Public Utility Commission of Texas, P.O. Box 13326, Austin, Texas , or call the Commission's Customer Protection Division at (512) or (888) Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All correspondence should refer to Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: May 22, 2017 Texas Department of Transportation Public Notice - Aviation Pursuant to Transportation Code, , and Title 43, Texas Administrative Code, , the Texas Department of Transportation conducts public hearings to receive comments from interested parties concerning proposed approval of various aviation projects. For information regarding actions and times for aviation public hearings, please go to the following website: Or visit and under How Do I, choose Find Hearings and Meetings, then choose Hearings and Meetings, and then choose Schedule. Or contact Texas Department of Transportation, Aviation Division, 150 East Riverside, Austin, Texas 78704, (512) or PI- LOT. TRD Joanne Wright Deputy General Counsel Texas Department of Transportation Filed: May 18, 2017 Texas Workforce Commission Request for Comment Regarding the Services performed by TIBH Industries Inc. FY 17 Notice is hereby given that the Texas Workforce Commission (the Commission) intends to review the services provided by the central nonprofit agency, TIBH Industries Inc., for Fiscal Year 2017 as required by (c) of the Texas Human Resources Code. As required by that section, the Commission will review the performance of TIBH to determine whether that agency's performance complies with the Commission's contractual specifications. This review will be considered by the Commission no earlier than Tuesday, August 22, 2017, in a duly posted Open Meeting. The Commission's meeting will be held at the Texas Workforce Commission Building, 101 East 15th Street, Room 265, Austin, Texas. The Commission requests that interested parties submit comments regarding the services of TIBH Industries Inc., in its operation of the State Use Program, under (a) - (b) of the Texas Human Resources Code no later than Friday, July 21, Comments shall be submitted to Kelvin Moore, Program Manager, 101 E. 15th St., Room 651-T, Austin, Texas 78701, or via to: PurchasingfromPeoplewithDisabilities@twc.state.tx.us. For all other questions or comments, contact the Texas Workforce Commission at (512) In addition, persons with disabilities who plan to attend this meeting and who may need auxiliary aids, services, or special accommodations should contact Conference and Media Services at (512) or conferenceplanning.media@twc.state.tx.us two (2) working days prior to the meeting, so that appropriate arrangements can be made. Hearing and speech-impaired individuals with text telephones (TTY) may also contact Purchasing from People with Disabilities at (512) TRD Diane Parker Counsel Texas Workforce Commission Filed: May 24, 2017 IN ADDITION June 2, TexReg 2975

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

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

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