TITLE 22. EXAMINING BOARDS

PART 17. TEXAS STATE BOARD OF PLUMBING EXAMINERS

CHAPTER 361. ADMINISTRATION

22 TAC §§361.1 - 361.3, 361.5 - 361.8, 361.10, 361.12 - 361.14

The Texas State Board of Plumbing Examiners (Board) proposes amendments to 22 TAC §§361.1 - 361.3, 361.5 - 361.8, 361.10, 361.12 - 361.14.

The amendments to §361.1, concerning Definitions, update selected definitions to reflect current staff structure and Board policy, eliminate redundancies with existing statutes and rules, ensure consistency across all Board rules, correct punctuation, and improve clarity. The definition of "Act" is deleted and replaced with a new definition for "Plumbing License Law or PLL." The definition of "Administrative Act" is changed to "APA." The definition of "Administrator" is deleted and replaced with a new definition for "Executive Director." The definitions of "Adopted Plumbing Code," "Field Representative," "Maintenance Man or Maintenance Engineer," "Person," "Plumbing Company," and "Responsible Master Plumber" are streamlined. The definition of "Chief Field Representative" is deleted and replaced with a new definition for "Director of Enforcement." The definitions of "Contested Case" and "Party" are amended to more-closely mirror the definitions of these terms found in the Administrative Procedure Act. The definitions of "Control Valve," "Drain Cleaner," "Drain Cleaner-Restricted Registrant," "Plumber's Apprentice," and "Residential Utilities Installer," are deleted, and a new subsection (b) is added to clarify that any term not defined in Chapter 361 has the definition provided by the Plumbing License Law. The definition of "Endorsement" is amended to include a Drain Cleaner Registration, a Drain Cleaner-Restricted Registration, and a Residential Utilities Installer Registration. The definitions of "Medical Gas Piping Endorsement" and "Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement" are updated to be consistent with the proposed changes to the definition of "Endorsement." The definition of "Petitioner" is streamlined and updated to reflect the proposed changes to §361.14. New language is added to the definition of "Plumbing" to clarify that cleaning a drain or sewer line using a cable or pressurized fluid constitutes plumbing. The definition of "Pocket Card" is amended to conform with the proposed changes to the definition of "Endorsement." The definitions of "Regularly Employed" and "Work as a Master Plumber" are deleted. A new definition for "Registration" is added. The definitions of "Supervision" and "Tradesman Plumber-Limited Licensee" are updated.

The amendments to §361.2, concerning Purpose, conform with the proposed changes to the definitions of "Act" and "Administrative Act," and clarify the existing rule.

The amendments to §361.3, concerning Scope, conform with the proposed changes to the definition of "Act" and clarify the existing rule.

The amendments to §361.5, concerning Administration, conform with the proposed changes to the definitions of "Administrator" and "Executive Director."

The amendments to §361.6, concerning Fees, improve the uniformity of the existing rule and conform to the proposed renumbering of 22 Tex. Admin. Code Chapter 363.

The amendments to §361.7, concerning Employee Training and Education, conform with the proposed changes to the definitions of "Administrator" and "Executive Director" and add new subsection (f), which provides that the Executive Director is eligible to receive agency-supported training and education subject to the approval of the Board's Chair.

The amendments to §361.8, concerning Forms and Materials, add the Responsible Master Plumber Application and Military Service Member, Veteran, or Military Spouse Supplemental Information Form to the list of forms encompassed by the rule and add the word "and" to make the rule grammatically correct.

The amendments to §361.10, concerning the Historically Underutilized Business (HUB) Program, replace "Texas General Services Commission" with "Texas Facilities Commission" to reflect the change in the agency's name and reformat the reference to 1 Texas Administrative Code §§111.20 - 111.33.

The amendments to §361.12, concerning Advisory Committees, reformat the references to the Plumbing License Law and Texas Government Code.

The amendments to §361.13, concerning Board Committees and Enforcement Committee, conform with the proposed changes to the definition of "Administrative Act" and the proposed renumbering of 22 Tex. Admin. Code Chapter 363. New language is added to specify that the Enforcement Committee may designate an employee of the Board to investigate complaints, review complaint investigations to determine whether a violation of the Plumbing License Law or Board Rules has occurred, and recommend the imposition of administrative penalties and issue notices of alleged violations.

The amendments to §361.14, concerning Petition for Adoption of Rules, add language to clarify that a person may petition for the repeal or amendment of an existing rule in addition to the adoption of a new rule. Additions are also made to specify how the information that must be included in the petition will vary depending on whether a new rule, amendment, or repeal is requested. New subsection (b) is added to require the Board to deny the petition or initiate a rulemaking proceeding within 60 days of receipt of a petition.

The proposed revisions were identified during the rule review for Chapter 361 published in the November 25, 2016, issue of the Texas Register.

Lisa G. Hill, Executive Director of the Texas State Board of Plumbing Examiners, has determined that for the first five-year period the amendments are in effect, there will be no fiscal impact on state or local government as a result of enforcing the amendments as proposed. Because the Board licenses only individuals and not businesses, there should be no significant fiscal impact on small or micro-businesses.

Ms. Hill has also determined that for each of the first five years the amendments as proposed are in effect the public benefit anticipated as a result of enforcing this proposal will be to have rules that are clearer, more consistent, and free of confusing redundancies with other statutes and rules. The amendments will also update the existing rules so they more accurately reflect existing Board policy, thereby protecting the health, safety, and welfare of the public.

Written comments regarding the proposed amendments to Chapter 361 may be submitted by mail to Lisa G. Hill at P.O. Box 4200, Austin, Texas 78765-4200; or by email to info@tsbpe.texas.gov with the subject line "Chapter 361." All comments must be received within 30 days.

The amendments to 22 TAC Chapter 361 are proposed under the authority of Chapter 1301 of the Texas Occupations Code, which requires the Board to adopt and enforce rules necessary to administer and enforce this chapter.

No other statute, article, or code is affected by these proposed amendments.

§361.1.Definitions.

(a) The following words and terms, when used in this part, have the following meanings, unless the context clearly indicates otherwise:

[(1) Act--The Plumbing License Law, Title 8, Chapter 1301, Occupations Code, as amended.]

(1) [(2)] APA [Administrative Act]--The Administrative Procedure Act, Chapter 2001 of the Texas Government Code. [Code, §2001.001, et seq, as amended.]

[(3) Administrator--The Board-appointed executive director of all Board staff.]

(2) [(4)] Adopted Plumbing Code--A plumbing code, including a fuel gas code, adopted by the Board or a political subdivision [subdivision, including any city, town, village, municipality, public water system, municipal utility district,] in compliance with §1301.255 and §1301.551 of the Plumbing License Law.

(3) [(5)] Advisory Committee--A Board appointed committee subject to §1301.258 of the Plumbing License Law, §361.12 of the Board Rules and Chapter 2110 of the Texas Government Code, of which the primary function is to advise the Board.

(4) [(6)] Appliance Connection--An appliance connection procedure using only a code-approved [code approved] appliance connector that does not require cutting into or altering the existing plumbing system.

(5) [(7)] Applicant--An individual seeking to obtain a license, registration or endorsement issued by the Board. [License, Registration or Endorsement.]

(6) [(8)] Board--The Texas State Board of Plumbing Examiners.

(7) [(9)] Board Member--An individual appointed by the governor and confirmed by the senate to serve on the Board.

(8) [(10)] Building Sewer--The part of the sanitary drainage system outside of the building, which extends from the end of the building drain to a public sewer, private sewer, private sewage disposal system, or other point of sewage disposal.

(9) [(11)] Certificate of Insurance--A form submitted to the Board certifying that the Responsible Master Plumber carries insurance coverage as specified in §1301.522 of the Plumbing License Law and §367.3 of the Board Rules.

(10) [(12)] Chief Examiner--An employee of the Board who, under the direction of the Executive Director, [Administrator,] coordinates and supervises the activities of the Board examinations and registrations.

[(13) Chief Field Representative--The Director of Enforcement who is an employee of the Board who meets the definition of "Field Representative" and, under the direction of the Executive Director, coordinates and supervises the activities of the Field Representatives.]

(11) [(14)] Cleanout--A fitting, other than a p-trap, approved by the adopted plumbing code and designed to be installed in a sanitary drainage system to allow easy access for cleaning the sanitary drainage system.

(12) [(15)] Code-Approved Appliance Connector--A semi-rigid or flexible assembly of tube and fittings approved by the adopted plumbing code and designed for connecting an appliance to the existing plumbing system without cutting into or altering the existing plumbing system.

(13) [(16)] Code-Approved [Code Approved] Existing Opening--For the purposes of drain cleaning activities described in §1301.002(3) of the Plumbing License Law, a code-approved [code approved] existing opening is any existing cleanout fitting, inlet of any p-trap or fixture, or vent terminating into the atmosphere that has been approved and installed in accordance with the adopted plumbing code.

(14) [(17)] Complaint--A written charge alleging a violation of state law, Board rules or orders, local codes or ordinances, or standards of competency; or the presence of fraud, false information, or error in the attempt to obtain a license, registration or endorsement. [License, Registration or Endorsement.]

(15) [(18)] Contested Case--A proceeding [proceeding, including but not limited to rulemaking, licensing and registering,] in which [the agency determines] the legal rights, [right,] duties, or [and] privileges of a party are to be determined by the Board after [allowing] an opportunity for adjudicative hearing. [hearing of the case.]

(16) [(19)] Continuing Professional Education or CPE--Board-approved courses/programs required for a licensee, or registrant with an endorsement, to renew his or her license, registration and/or endorsement. [License, Registration and/or Endorsement.]

[(20) Control Valve--A valve that operates each time water is supplied to, or shut off from, a receptacle or plumbing fixture. The term does not include a stop valve that may be installed in the water supply branch to the control valve.]

(17) Director of Enforcement--An employee of the Board who meets the definition of "Field Representative" and, under the direction of the Executive Director, coordinates and supervises the activities of the Field Representatives.

(18) [(21)] Direct Supervision--

(A) The on-the-job oversight and direction of a registered [Registered] Plumber's Apprentice performing plumbing work by a licensed plumber who is fulfilling his or her responsibility to the client and employer by ensuring the following:

(i) that the plumbing materials for the job are properly prepared prior to assembly according to the material manufacturers recommendations and the requirements of the adopted plumbing code; and

(ii) that the plumbing work for the job is properly installed to protect health and safety by meeting the requirements of the adopted plumbing code and all requirements of local and state ordinances, regulations and laws.

(B) The on-the-job oversight and direction by a licensed Plumbing Inspector of an individual training to qualify for the Plumbing Inspector Examination.

(C) For plumbing work performed only in the construction of a new one-family or two-family dwelling in an unincorporated area of the state, a Responsible Master Plumber is not required to provide for the continuous or uninterrupted on-the-job oversight of a [Registered ] Plumber's Apprentice's work by a licensed plumber, however, the Responsible Master Plumber must:

(i) provide for the training and management of the [Registered] Plumber's Apprentice by a licensed plumber;

(ii) provide for the review and inspection of the [Registered ] Plumber's Apprentice's work by a licensed plumber to ensure compliance with subparagraph (A)(i) and (ii) of this paragraph; and

(iii) upon request by the Board, provide the name and plumber's license number of the licensed plumber who is providing on-the-job training and management of the [Registered] Plumber's Apprentice and who is reviewing and inspecting the [Registered ] Plumber's Apprentice's work on the job, or the name and plumber's license number of the licensed plumber who trained and managed the [Registered] Plumber's Apprentice and who reviewed and inspected the [Registered] Plumber's Apprentice's work on a job.

[(22) Drain Cleaner--An individual who has completed at least 4,000 hours working under the supervision of a Responsible Master Plumber as a registered Drain Cleaner-Restricted Registrant, who has fulfilled the requirements of and is registered with the Board, and who installs cleanouts and removes and resets p-traps to eliminate obstructions in building drains and sewers.]

[(23) Drain Cleaner-Restricted Registrant--An individual who has worked as a registered Plumber's Apprentice under the supervision of a Responsible Master Plumber, who has fulfilled the requirements of and is registered with the Board, and who clears obstructions in sewer and drain lines through any code-approved existing opening.]

(19) [(24)] Endorsement--A certification issued by the Board as an [in] addition to a Master Plumber, [the Master,] Plumbing Inspector, or Journeyman Plumber License or a Plumber's Apprentice Registration, including a Drain Cleaner Registration, a Drain Cleaner-Restricted Registration, and a Residential Utilities Installer Registration.

(20) Executive Director--The executive director of the Texas State Board of Plumbing Examiners who is employed by the Board as the executive head of the agency.

(21) [(25)] Field Representative--An [For the purposes of the Board Rules:

[(A)] "Field Representative" means a] employee of the Board who is:

(A) [(i)] knowledgeable of the Plumbing License Law [this Act] and of municipal ordinances relating to plumbing;

(B) [(ii)] qualified by experience and training in good plumbing practice and compliance with the Plumbing License Law; [this Act;]

(C) [(iii)] designated by the Board to assist in the enforcement of the Plumbing License Law [this Act] and Board rules; [rules adopted under this Act; and]

(D) [(iv)] licensed by the Board as a plumber; and [plumber.]

(E) hired to:

[(B) A field representative may:]

(i) make on-site license and registration checks to determine compliance with the Plumbing License Law; [this Act;]

(ii) investigate consumer complaints filed under §1301.303 of the Plumbing License Law;

(iii) assist municipal plumbing inspectors in cooperative enforcement of the Plumbing License Law; [this Act;] and

(iv) issue citations as provided by §1301.502 of the Plumbing License Law.

(22) [(26)] Journeyman Plumber--An individual licensed under the Plumbing License Law [this Act] who has met the qualifications for registration as a Plumber's Apprentice or for licensure as a Tradesman Plumber-Limited [Licensee ], who has completed at least 8,000 hours working under the supervision of a Responsible Master Plumber, who supervises, engages in, or works at the actual installation, alteration, repair, service and renovating of plumbing, and who has successfully fulfilled the examinations and requirements of the Board.

(23) [(27)] License--A document issued by the Board to certify that the named individual fulfilled the requirements of the Plumbing License Law [Act] and of the Board Rules to hold a license issued by the Board.

(24) [(28)] Licensing and Registering--The process of granting, denying, renewing, reinstating, revoking, or suspending a license, registration or endorsement. [License, Registration or Endorsement.]

(25) [(29)] Maintenance Man or Maintenance Engineer--An individual who:

(A) is an employee, and not [as opposed to] an independent contractor or subcontractor; [contractor,]

(B) [who] performs plumbing maintenance work incidental to and in connection with other employment-related duties; and

(C) does not engage in plumbing work for the general public. [duties.]

(D) For the purposes of paragraph 25(B), "incidental ["Incidental] to and in connection with" includes the repair, maintenance and replacement of existing potable water piping, existing sanitary waste and vent piping, existing plumbing fixtures and existing water heaters. ["Incidental to and in connection with" does not include cutting into fuel gas plumbing systems and the installation of gas fueled water heaters.]

(E) An individual who erects, builds, or installs plumbing not already in existence may not be classified as a maintenance man or maintenance engineer. Plumbing work performed by a maintenance man or maintenance engineer is not exempt from state law and municipal rules and ordinances regarding plumbing codes, plumbing permits and plumbing inspections. [Such maintenance individuals shall not engage in plumbing work for the general public.]

(26) [(30)] Master Plumber--An individual licensed under the Plumbing License Law [this Act] who is skilled in the design, planning, superintending, and the practical installation, repair, and service of plumbing, who is knowledgeable about the codes, ordinances, or rules and regulations governing those matters, who alone, or through an individual or individuals under his supervision, performs plumbing work, and who has successfully fulfilled the examinations and requirements of the Board.

(27) [(31)] Medical Gas Piping Installation Endorsement--

(A) A certification [document] entitling the holder of a Master or Journeyman Plumber License to install piping that is used solely to transport gases used for medical purposes including, but not limited to oxygen, nitrous oxide, medical air, nitrogen, medical vacuum.

(B) A certification [document] entitling the holder of a Plumbing Inspector License to inspect medical gas and vacuum system installations.

(28) [(32)] Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement--

(A) A certification [document] entitling the holder of a Master or Journeyman Plumber License to install a multipurpose residential fire protection sprinkler system in a one or two family dwelling.

(B) A certification [document] entitling the holder of a Plumbing Inspector License to inspect a multipurpose residential fire protection sprinkler system.

(29) [(33)] Military service member--A person who is currently serving in the armed forces of the United States, in a reserve component of the armed forces of the United States, including the National Guard, or in the state military service of any state.

(30) [(34)] Military spouse--A person who is married to a military service member who is currently on active duty.

(31) [(35)] Military veteran--A person who has served in the army, navy, air force, marine corps, or coast guard of the United States, or in an auxiliary service of one of those branches of the armed forces.

(32) [(36)] One-Family [One Family] Dwelling--A detached structure designed for the residence of a single family that does not have the characteristics of a multiple family dwelling, and is not primarily designed for transient guests or for providing services for rehabilitative, medical, or assisted living in connection with the occupancy of the structure.

(33) [(37)] Party--A [Each] person or state agency named or admitted [in association with an action] as a party to a contested case. [party.]

(34) [(38)] Paid Directly--As related to §1301.255(e) of the Plumbing License Law, "paid" and "directly" have the common meanings and "paid directly" means that compensation for plumbing inspections must be paid by the political subdivision to the individual Licensed Plumbing Inspector who performed the plumbing inspections or the plumbing inspection business which utilized the plumbing inspector to perform the inspections.

(35) [(39)] Person--An [For the purposes of the Board Rules only, a person means a] individual, partnership, corporation, limited liability company, association, governmental subdivision or public or private organization of any character other than an agency.

(36) [(40)] Petitioner--A person requesting [asking] the Board to adopt, amend or repeal [adopt] a rule pursuant to §2001.021 of the Texas Government Code and §361.14 of the Board Rules. [rule.]

[(41) Plumber's Apprentice--Any individual other than a Master Plumber, Journeyman Plumber, or Tradesman Plumber-Limited Licensee who, as his or her principal occupation, is engaged in learning and assisting in the installation of plumbing, is registered by the Board, and works under the supervision of a licensed Responsible Master Plumber and the direct supervision of a licensed plumber.]

(37) [(42)] Plumbing--

(A) All piping, fixtures, appurtenances, and appliances, including disposal systems, drain or waste pipes, multipurpose residential fire protection sprinkler systems or any combination of these that: supply, distribute, circulate, recirculate, drain, or eliminate water, gas, medical gasses and vacuum, liquids, and sewage for all personal or domestic purposes in and about buildings where persons live, work, or assemble; connect the building on its outside with the source of water, gas, or other liquid supply, or combinations of these, on the premises, or the water main on public property; and carry waste water or sewage from or within a building to the sewer service lateral on public property or the disposal or septic terminal that holds private or domestic sewage.

(B) The installation, repair, service, maintenance, alteration, or renovation of all piping, fixtures, appurtenances, and appliances on premises where persons live, work, or assemble that supply gas, medical gasses and vacuum, water, liquids, or any combination of these, or dispose of waste water or sewage. Plumbing includes the treatment of rainwater to supply a plumbing fixture or appliance. The term "service" includes, but is not limited to, cleaning a drain or sewer line using a cable or pressurized fluid, or performing a camera inspection through a code-approved existing opening.

(38) [(43)] Plumbing Company--A person [person, as defined in the Board Rules,] who engages in the plumbing business.

(39) [(44)] Plumbing Inspection--Any of the inspections required in §1301.255 and §1301.551 of the Plumbing License Law, including any check of multipurpose residential fire protection sprinkler systems, pipes, faucets, tanks, valves, water heaters, plumbing fixtures and appliances by and through which a supply of water, gas, medical gasses or vacuum, or sewage is used or carried that is performed on behalf of any political subdivision, public water supply, municipal utility district, town, city or municipality to ensure compliance with the adopted plumbing and gas codes and ordinances regulating plumbing.

(40) [(45)] Plumbing Inspector--Any individual who is employed by a political subdivision or state agency, or who contracts as an independent contractor with a political subdivision or state agency, for the purpose of inspecting plumbing work and installations in connection with health and safety laws, ordinances, and plumbing and gas codes, who has no financial or advisory interests in any plumbing company, and who has successfully fulfilled the examinations and requirements of the Board.

(41) Plumbing License Law or PLL--Chapter 1301 of the Texas Occupations Code.

(42) [(46)] Pocket Card--A card issued by the Board which:

(A) certifies that the holder has a Responsible Master Plumber License, Master Plumber License, Journeyman Plumber License, Tradesman Plumber-Limited License, Plumbing Inspector License, [Residential Utilities Installer Registration, Drain Cleaner Registration, Drain Cleaner-Restricted Registration] or a Plumber's Apprentice Registration; and

(B) lists any Endorsements obtained by the holder. [Registration.]

(43) [(47)] Political Subdivision--A political subdivision of the State of Texas that includes a:

(A) city;

(B) county;

(C) school district;

(D) junior college district;

(E) municipal utility district;

(F) levee improvement district;

(G) drainage district;

(H) irrigation district;

(I) water improvement district;

(J) water control improvement district;

(K) water control preservation district;

(L) freshwater supply district;

(M) navigation district;

(N) conservation and reclamation district;

(O) soil conservation district;

(P) communication district;

(Q) public health district;

(R) river authority; and

(S) any other governmental entity that:

(i) embraces a geographical area with a defined boundary;

(ii) exists for the purpose of discharging functions of government; and

(iii) possesses authority for subordinate self-government [self government] through officers selected by it.

(44) [(48)] P-Trap--A fitting connected to the sanitary drainage system for the purpose of preventing the escape of sewer gasses from the sanitary drainage system and designed to be removed to allow for cleaning of the sanitary drainage system. For the purposes of drain cleaning activities described in §1301.002(2) of the Plumbing License Law, a p-trap includes any integral trap of a water closet, bidet, or urinal.

(45) [(49)] Public Water System--A system for the provision to the public of water for human consumption through pipes or other constructed conveyances. Such a system must have at least 15 service connections or serve at least 25 individuals at least 60 days out of the year. Two or more systems with each having a potential to serve less than 15 connections or less than 25 individuals, but owned by the same person, firm, or corporation and located on adjacent land will be considered a public water system when the total potential service connections in the combined systems are 15 or greater or if the total number of individuals served by the combined systems total 25 or greater, at least 60 days out of the year. Without excluding other meanings of the terms "individual" or "served," an individual shall be deemed to be served by a water system if the individual lives in, uses as the individual's place of employment, or works in a place to which drinking water is supplied from the water system.

[(50) Regularly Employed--Steadily, uniformly, or habitually working in an employer-employee relationship with a view of earning a livelihood, as opposed to working casually or occasionally.]

[(51) Residential Utilities Installer--An individual who has completed at least 2,000 hours working under the supervision of a Responsible Master Plumber as a registered Plumber's Apprentice, who has fulfilled the requirements of and is registered with the Board, and who constructs and installs yard water service piping for one family or two family dwellings and building sewers.]

(46) [(52)] Respondent--A person charged in a complaint filed with the Board.

(47) [(53)] Responsible Master Plumber or RMP--A [person] licensed [as a] Master Plumber who:

(A) allows the person's Master Plumber License [license] to be used by only one plumbing company for the purpose of offering and performing plumbing work [under the person's Master Plumber license];

(B) is authorized to obtain permits for plumbing work;

(C) assumes responsibility for plumbing work performed under the person's license;

(D) [(C)] has submitted a certificate of insurance as required by §1301.3576 of the Plumbing License Law and §367.3 of the Board Rules; and

(E) [(D)] has completed and submitted a certificate of completion of a training program as required by §1301.3576 of the Plumbing License Law and §363.26 [§363.13] of the Board Rules; [Rules.]

(F) When used in Board forms, applications or other communications by the Board, the abbreviation "RMP" shall mean Responsible Master Plumber.

(48) Registration--A document issued by the Board to certify that the named individual fulfilled the requirements of the PLL and Board Rules to register as a Plumber's Apprentice.

(49) [(54)] Rule--An agency statement of general applicability that implements, interprets, or prescribes law or policy, or describes the procedure or practice requirements of the agency. The term includes the amendment or repeal of a prior rule but does not include statements concerning only the internal management or organization of the agency and not affecting private rights or procedures.

(50) [(55)] Supervision--The general [on-the-job or off-the-job] oversight, direction and management of plumbing work and individuals performing plumbing work by a Responsible Master Plumber, or a licensed plumber designated by the RMP. [Plumber who is fulfilling his or her responsibility to the client and employer by ensuring the following:]

[(A) that the operations of the plumbing company that has secured his or her services meets the requirements of all applicable local and state ordinances, regulations and laws; and]

[(B) that the plumbing work performed under his or her License will protect health and safety by meeting the requirements of the adopted plumbing code and all requirements of local and state ordinances, regulations and laws.]

(51) [(56)] System--An interconnection between one or more public or private end users of water, gas, sewer, or disposal systems that could endanger public health if improperly installed.

(52) [(57)] Tradesman Plumber-Limited Licensee--An individual who has completed at least 4,000 hours working under the direct supervision of a Journeyman or Master Plumber as a registered Plumber's Apprentice, who has passed the required examination and fulfilled the other requirements of the Board, who constructs, installs, changes, repairs, services, or renovates [constructs and installs] plumbing for one-family [one family] or two-family [two family] dwellings under the supervision of a Responsible Master Plumber, and who has not met or attempted to meet the qualifications for a Journeyman Plumber License.

(53) [(58)] Two-Family [Two Family] Dwelling--A detached structure with separate means of egress designed for the residence of two families ("duplex") that does not have the characteristics of a multiple family dwelling and is not primarily designed for transient guests or for providing services for rehabilitative, medical, or assisted living in connection with the occupancy of the structure.

(54) [(59)] Water Supply Protection Specialist--A Master or Journeyman Plumber who holds the Water Supply Protection Specialist Endorsement issued by the Board to engage in customer service inspections, as defined by rule of the Texas Commission on Environmental Quality, and the installation, service, and repair of plumbing associated with the treatment, use, and distribution of rainwater to supply a plumbing fixture or appliance.

(55) [(60)] Water Treatment--A business conducted under contract that requires experience in the analysis of water, including the ability to determine how to treat influent and effluent water, to alter or purify water, and to add or remove a mineral, chemical, or bacterial content or substance. The term also includes the installation and service of potable water treatment equipment in public or private water systems and making connections necessary to complete installation of a water treatment system. The term does not include treatment of rainwater or the repair of systems for rainwater harvesting.

[(61) Work as a Master Plumber--To act as and assume the responsibilities of a Responsible Master Plumber, as defined in this section.]

(56) [(62)] Yard Water Service Piping--The building supply piping carrying potable water from the water meter or other source of water supply to the point of connection to the water distribution system at the building.

(b) Any term not defined in this section shall have the definition set out in §1301.002 of the Plumbing License Law.

§361.2.Purpose.

The purpose of these sections is to provide standards and procedures to implement and enforce the provisions of the PLL, APA, [Act, of the Administrative Act,] and [of] all other laws applicable to [applicable laws for] the examination and licensing of plumbers and plumbing inspectors in Texas.

§361.3.Scope.

The Board [board] shall apply [the provisions] these sections to all individuals engaged in plumbing work [activities] and plumbing inspection in Texas, with the exceptions noted in the PLL [Act] and Board Rules. [in these sections.]

§361.5.Administration.

The Board [board] shall delegate to its employees, [the administrative staff,] under the direction of the Executive Director, [its administrator,] those functions appropriate to the daily conduct of the Board's [board's] business of carrying out the purposes of all applicable laws and of these rules.

§361.6.Fees.

(a) The Board shall waive the initial license, application and examination fees for military service members, military veterans and military spouses who substantially meet all of the requirements for licensure or examination by the Board.

(b) The Board has established the followingfees:

(1) Initial Licenses, Endorsements and Registrations

(A) Responsible Master Plumber License--$420;

(B) Master Plumber License [license]--$75;

(C) Journeyman Plumber License [license]--$40;

(D) Medical Gas Installation Endorsement [gas installation endorsement] (Master)--$55;

(E) Medical Gas Installation Endorsement [gas installation endorsement] (Journeyman)--$14;

(F) Medical Gas Installation Endorsement [gas installation endorsement] (Inspector)--$27.50;

(G) Plumbing Inspector License [inspector license]--$55;

(H) Water Supply Protection Specialist Endorsement [supply protection specialist endorsement] (Journeyman)--$14;

(I) Water Supply Protection Specialist Endorsement [supply protection specialist endorsement] (Master)--$55;

(J) Water Supply Protection Specialist Endorsement [supply protection specialist endorsement] (Inspector)--$27.50;

(K) Tradesman Plumber-Limited License--$35;

(L) Plumber's Apprentice Registration/Application--$15;

(M) Residential Utilities Installer Registration/Application--$18;

(N) Drain Cleaner Registration/Application--$18;

(O) Drain Cleaner-Restricted Registration/Application--$18;

(P) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Master)--$55;

(Q) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Journeyman)--$14;

(R) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Inspector)--$27.50.

(2) Examinations

(A) Master Plumber [examination]--$175;

(B) Journeyman Plumber [examination]--$40;

(C) Medical Gas Installation Endorsement [gas installation endorsement] (Master)--$80;

(D) Medical Gas Installation Endorsement [gas installation endorsement] (Journeyman)--$27;

(E) Medical Gas Installation Endorsement [installation endorsement] (Inspector)--$40;

(F) Plumbing Inspector [inspector examination]--$55;

(G) Water Supply Protection Specialist Endorsement [supply protection specialist endorsement] (Journeyman)--$27;

(H) Water Supply Protection Specialist Endorsement [supply protection specialist endorsement] (Master)--$80;

(I) Water Supply Protection Specialist Endorsement [supply protection specialist endorsement] (Inspector)--$40;

(J) Tradesman Plumber-Limited License [Licensee]--$36;

(K) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Master)--$80;

(L) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Journeyman)--$27;

(M) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Inspector)--$40.

(3) Renewals

(A) Responsible Master Plumber License--$420;

(B) Master Plumber License [license]--$75;

(C) Journeyman Plumber License [license]--$40;

(D) Medical Gas Installation Endorsement [gas installation endorsement] (Master)--$55;

(E) Medical Gas Installation Endorsement [gas installation endorsement] (Journeyman)--$14;

(F) Medical Gas Installation Endorsement [gas installation endorsement] (Inspector)--$27.50;

(G) Plumbing Inspector License [inspector license]--$55;

(H) Water Supply Protection Specialist Endorsement [supply protection specialist endorsement] (Journeyman)--$14;

(I) Water Supply Protection Specialist Endorsement [supply protection specialist endorsement] (Master)--$55;

(J) Water Supply Protection Specialist Endorsement [supply protection specialist endorsement] (Inspector)--$27.50;

(K) Plumbing Inspector with a Master and/or JourneymanLicense--$55;

(L) Master Plumber with Journeyman Plumber License--$75;

(M) Tradesman Plumber-Limited License--$35;

(N) Plumber's Apprentice Registration--$15;

(O) Residential Utilities Installer Registration--$18;

(P) Drain Cleaner Registration--$18;

(Q) Drain Cleaner-Restricted Registration--$18;

(R) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Master)--$55;

(S) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Journeyman)--$14;

(T) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Inspector)--$27.50.

(4) Other fees

(A) Late renewal

(i) Responsible Master Plumber License:

(I) less than 90 days--one-half renewal fee--$210;

(II) more than 90 days--renewal fee--$420;

(ii) Master Plumber License:

(I) less than 90 days--one-half renewal fee--$37.50;

(II) more than 90 days--renewal fee--$75;

(iii) Medical Gas Installation Endorsement [gas installation endorsement] (Master):

(I) less than 90 days--one half renewal fee--$27.50;

(II) more than 90 days--renewal fee--$55;

(iv) Medical Gas Installation Endorsement [gas installation endorsement] (Journeyman):

(I) less than 90 days--one half renewal fee--$7;

(II) more than 90 days--renewal fee--$14;

(v) Medical Gas Installation Endorsement [gas installation endorsement] (Inspector):

(I) less than 90 days--one half renewal fee--$13.75;

(II) more than 90 days--renewal fee--$27.50;

(vi) Journeyman Plumber License:

(I) less than 90 days--one-half renewal fee--$20;

(II) more than 90 days--renewal fee--$40;

(vii) Water Supply Protection Specialist Endorsement [supply protection specialist] (Journeyman):

(I) less than 90 days--one half renewal fee--$7;

(II) more than 90 days--renewal fee--$14;

(viii) Water Supply Protection Specialist Endorsement [supply protection specialist] (Master):

(I) less than 90 days--one half renewal fee--$27.50;

(II) more than 90 days--renewal fee--$55;

(ix) Water Supply Protection Specialist Endorsement [supply protection specialist] (Inspector):

(I) less than 90 days--one half renewal fee--$13.75;

(II) more than 90 days--renewal fee--$27.50;

(x) Plumbing Inspector License:

(I) less than 90 days--one half renewal fee--$27.50;

(II) more than 90 days--renewal fee--$55;

(xi) Master Plumber License with Journeyman Plumber License:

(I) less than 90 days--one half renewal fee--$37.50;

(II) more than 90 days--renewal fee--$75;

(xii) Plumbing Inspector License with Master and/or Journeyman Plumber License:

(I) less than 90 days--one half renewal fee--$27.50;

(II) more than 90 days--renewal fee--$55;

(xiii) Tradesman Plumber-Limited License:

(I) less than 90 days--one half renewal fee--$17.50;

(II) more than 90 days--renewal fee--$35;

(xiv) Plumber's Apprentice Registration:

(I) less than 90 days--one half renewal fee--$7.50;

(II) more than 90 days--renewal fee--$15;

(xv) Residential Utilities Installer Registration:

(I) less than 90 days--one half renewal fee--$9;

(II) more than 90 days--renewal fee--$18;

(xvi) Drain Cleaner Registration:

(I) less than 90 days--one half renewal fee--$9;

(II) more than 90 days--renewal fee--$18;

(xvii) Drain Cleaner-Restricted Registration:

(I) less than 90 days--one half renewal fee--$9;

(II) more than 90 days--renewal fee--$18;

(xviii) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Master):

(I) less than 90 days--one half renewal fee--$27.50;

(II) more than 90 days--renewal fee--$55;

(xix) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Journeyman):

(I) less than 90 days--one half renewal fee--$7;

(II) more than 90 days--renewal fee--$14;

(xx) Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement [endorsement] (Inspector):

(I) less than 90 days--one half renewal fee--$13.75;

(II) more than 90 days--renewal fee--$27.50.

(B) Instructor Certification Training (Per Day)--$100.

(C) Duplicate license or registration--$10.

(D) Returned check--$25.

(E) Fees for provisional licenses issued under §1301.358 of the Plumbing License Law are equal to the initial license fees established in paragraph (1) of this subsection.

(F) Transfer of License Fee--$500.

(c) [(b)] Methods of payment

(1) Fees paid electronically through the Texas Online website, which may be accessed from the Texas State Board of Plumbing Examiners' website, may be made in the form of credit card or check.

(2) Fees paid by mail or in person may be made in the form of money order, cashier's check, personal check, business check, or the exact amount of cash (cash payments by mail are not recommended).

(3) An individual shall pay the appropriate examination fee prior to the time of examination, or, the appropriate initial licensure or renewal fee [fee. For License, Registration, Endorsement, and renewal, the appropriate fee shall be paid] prior to issuance of a license, registration, endorsement [the License, Registration, Endorsement,] or renewal.

(4) The Board, under any special circumstances it finds appropriate, may:

(A) waive any requirements concerning the method or timing of payment of any fee;

(B) refund any fee; or

(C) waive payment of any fee not required by statute.

(5) Any fee paid for a license, endorsement or registration, which has been denied or revoked due to a criminal conviction under §363.15 of the Board Rules [§363.2 of this title (relating to Consequences to the Applicant With Criminal Conviction)] or any violation of the Plumbing License Law or Board Rules shall not be refunded.

§361.7.Employee Training and Education.

(a) With the approval of the Executive Director, the Board may make available to its [administrators and] employees funds for training and education in accordance with the Employee Training Act, §§656.041 - 656.049 of the Texas Government Code. [Government Code Chapter 656, Subchapter C, §§656.041 - 656.049.]

(b) In order to be eligible for agency-supported [agency supported] training and education, the [administrator or] employee must demonstrate in writing, to the satisfaction of the Executive Director, that the training or education is related to the duties or prospective duties of the [administrator or] employee.

(c) Eligible training and education expenses that are approved by the Executive Director may include, as appropriate, salary, tuition [tuition,] and other fees, travel and living expenses, training stipend, expense of training materials, and other necessary expenses of an instructor, student, or other participant in a training or education program.

(d) The Executive Director may determine to pay all or part of the expenses related to training on a reimbursement basis to the employee [or administrator], upon successful completion of the training.

(e) An employee who completes training and education to obtain a degree or certification for which the Board has provided all or part of the required fees must agree in writing to fully repay the Board any amounts paid for educational assistance if the employee voluntarily terminates employment with the agency within one year of course completion.

(f) The Executive Director is eligible to receive agency-supported training and education in accordance with this section subject to the approval of the Chairman of the Board.

§361.8.Forms and Materials.

The Board incorporates by reference any rules that may be contained in the following forms and requires the use of these forms in doing business with the agency:

(1) Applications for Examination, Registration andEndorsements;

(2) Application for Responsible Master Plumber;

(3) [(2)] Employer's Certification;

(4) [(3)] General Complaint;

(5) [(4)] Applications for renewals of Licenses, Registrations and Endorsements;

(6) Military Service Member, Veteran, or Military Spouse Supplemental Information;

(7) [(5)] Supplemental Criminal History Information;

(8) [(6)] Application for Nonstandard Testing Accommodations including the Physician or Licensed Health Care Provider;

(9) [(7)] Certificate of Insurance; and

(10) [(8)] Transfer of License Affidavit.

§361.10.Historically Underutilized Business (HUB) Program.

The Texas State Board of Plumbing Examiners adopts the rules of the Texas Facilities Commission [General Services Commission] relating to the Historically Underutilized Business (HUB) Program and codified at 1 Texas Administrative Code §§111.20 - 111.33. [1 Texas Administrative Code, Part V, Subchapter B, Chapter 111, §§111.11 - 111.16.]

§361.12.Advisory Committees.

(a) The Board may appoint Advisory Committees as it considers necessary for the primary function of advising the Board.

(b) Advisory Committees are subject to §1301.258 of the Plumbing License Law [§1301.258] and Chapter 2110 [§2110.008] of the Texas Government Code and shall:

(1) be composed of a reasonable number of members not to exceed twenty-four (24) [24] members who provide a balanced representation between:

(A) individuals regulated or directed affected by the Board; and

(B) consumers of services provided by the Board or the plumbing industry; and

(2) select from among its members a presiding officer who shall preside over the advisory committee and report to the Board; and

(3) serve without compensation or reimbursement.

(c) If the board appoints an advisory committee, it shall adopt rules that:

(1) state the purpose of the committee;

(2) describe the task of the committee and the manner in which the committee will report to the Board; and

(3) the date on which the committee will automatically be abolished (not to exceed four years from its creation) unless the Board votes to continue the committee in existence.

(d) If the Board appoints an advisory committee it shall evaluate annually:

(1) the committee's work;

(2) the committee's usefulness; and

(3) the costs related to the committee's existence, including the cost of Board staff time spent in support of the committee's activities.

(e) The Board shall report to the Legislative Budget Board the information developed in the evaluation required in subsection (d) of this section. The Board shall file the report biennially in connection with the agency's request for appropriations.

§361.13.Board Committees and Enforcement Committee.

(a) The Board may create committees to assist the Board in exercising its powers and duties.

(b) The presiding officer of the Board shall appoint the members of the committees. Except as provided by subsection [Subsection] (c) of this section, [Section,] each committee member must be a member of the Board.

(c) The presiding officer may appoint only members of the agency staff to the Enforcement Committee whose duties will include following the requirements of the APA, [Administrative Procedure Act,] the Plumbing License Law and the policies, guidelines and rules established by the Board and:

(1) investigating [review and investigate ] complaints or designating an employee of the Board to investigate complaints;

(2) reviewing complaint investigations to determine whether a violation of the Plumbing License Law or Board Rules has occurred;

(3) recommending the imposition of administrative penalties and issue notices of alleged violations;

(4) [(2)] conducting [conduct] informal conferences;

(5) [(3)] negotiating [negotiate] proposed settlements;

(6) [(4)] overseeing [oversee] the preparation for contested cases;

[(5) pursue cases at the State Office of Administrative Hearings;]

(7) [(6)] overseeing [oversee] the issuance of cease and desist orders, [administrative penalties,] criminal citations and the filing of injunctions;and

(8) [(7)] reviewing [review] applicants for examination, registration and licensing who have a criminal conviction history affected by §363.15 of the Board Rules. [Board Rule §363.2.]

§361.14.Petition for Adoption of Rules.

(a) Any person who petitions the board in writing to request the adoption, amendment or repeal [adoption ] of rules shall:

(1) include a brief statement summarizing the proposed action and detailing its desired effect;

(2) include a full justification of the proposed action in narrative form, citing all pertinent facts and circumstances;

(3) if proposing an amendment, refer to each [an] existing rule to be amended [under consideration] by title and code number and preface the text to indicate words and punctuation to be added, changed, or deleted;

(4) if proposing a new rule, prepare the text of the [a] new rule in the exact form that is desired to be adopted;

(5) if proposing a repeal, refer to each existing rule to be repealed by title and code number; and [include a suggested effective date;]

(6) include the petitioner's full name, complete mailing address, and telephone number. [number;]

[(7) include the signature of the petitioner and of the petitioner's representative, if any; and]

[(8) file 10 copies (one for the administrator and one for each board member) at least 30 days before the meeting at which the petition is to be considered.]

(b) Within 60 days of receipt, the Board will either deny the petition in writing, stating its reasons therefore, or will initiate rulemaking proceedings in accordance with Chapter 2001 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 January 19, 2017.

TRD-201700267

Lisa G. Hill

Executive Director

Texas State Board of Plumbing Examiners

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 936-5239


CHAPTER 363. EXAMINATION AND REGISTRATION

22 TAC §§363.1 - 363.14

The Texas State Board of Plumbing Examiners (Board) proposes the repeal of 22 TAC Chapter 363. The Board proposes this repeal concurrently with the proposal of a new Chapter 363.

The proposed repeal was identified during the rule review for Chapter 363 published in the November 25, 2016, issue of the Texas Register.

Lisa G. Hill, Executive Director of the Texas State Board of Plumbing Examiners, has determined that for the first five-year period the proposed repeal is in effect, there will be no fiscal impact on state or local government, individuals who must comply with the repeal, or small or micro-businesses.

Ms. Hill has also determined that for each of the first five years the proposed repeal is in effect the public will benefit from the new, better-organized version of Chapter 363 the Board has proposed to replace the repealed version.

Written comments regarding the proposed repeal of 22 TAC Chapter 363 may be submitted by mail to Lisa G. Hill at P.O. Box 4200, Austin, Texas 78765-4200; or by email to info@tsbpe.texas.gov with the subject line "363 Repeal." All comments must be received within 30 days.

The repeal is authorized by Chapter 1301 of the Texas Occupations Code, which requires the Board to adopt and enforce rules necessary to administer and enforce this chapter; Chapter 53 pf the Occupations Code, which Chapter 53 of the Occupations Code, which requires a licensing authority to issue guidelines relating to the practices of the licensing authority for determining whether a criminal conviction directly relates to an occupation; and Chapter 55 of the Occupations Code, which requires a state agency that issues licenses to adopt rules regarding the licensure of military service member, military veterans, or military spouses.

No other statute, article, or code is affected by the proposedrepeal.

§363.1.Qualifications.

§363.2.Consequences to Applicants with Criminal.

§363.3.Examination Schedule.

§363.4.Reporting for Examination.

§363.5.Description of Examination.

§363.6.Non-Standard Examination Accommodations.

§363.7.Test Score Requirements.

§363.8.Notification.

§363.9.Reexamination.

§363.10.Disqualification.

§363.11.Endorsement Training Programs.

§363.12.Training Programs for Journeyman Plumber and Tradesman Plumber-Limited License Applicants.

§363.13.Training Program for Responsible Master Plumber Applicants.

§363.14.Criminal Conviction Guidelines.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 19, 2017.

TRD-201700272

Lisa G. Hill

Executive Director

Texas State Board of Plumbing Examiners

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 936-5239


22 TAC §§363.1 - 363.25

The Texas State Board of Plumbing Examiners (Board) proposes a new 22 TAC Chapter 363, concerning Examination and Registration. The Board proposes this new chapter concurrently with the proposed repeal of the existing Chapter 363. The proposed new chapter largely retains the requirements set forth in the existing chapter, but restructures it to create a separate section for each type of license, registration, and endorsement issued by the Board. The individual, substantive changes made to each section of Chapter 363 as they existed prior to the repeal are explained below.

Proposed §363.1, concerning Definitions, creates new definitions for "Application" and "Directly Related to Plumbing."

The existing §363.1, concerning Qualifications, is replaced with thirteen separate rules.

Proposed §363.2, concerning General Qualifications, includes the provisions from subsections (a) and (b) of the existing §363.1 as well as new language that explains exactly which endorsements each type of license or registration may contain. Provisions from subsections (c)(3), (d)(1)(B), (e)(1)(A), (f)(1), (j)(1), (k)(1), (l)(1), and (m)(1) of the existing §363.1 that prescribe the work status qualifications an applicant must satisfy for each license and registration are also added to proposed §363.2 and deleted throughout the rest of the chapter. New language requiring an employer to automatically provide a completed Employer Certification Form to a Plumber's Apprentice or Tradesman-Limited Licensee upon separation of employment or the end of a contract is added.

Proposed §363.3, concerning Qualifications for Applicants with Military Experience, includes the provisions from subsection (n) of the existing §363.1 as well new language to clarify that the Board will credit verified military service, training, or education toward the apprenticeship requirements for a license despite the provisions of the Plumbing License Law and Board Rules that prohibit an individual from receiving credit for work experience in the trade unless the individual is a registered Plumber's Apprentice or Tradesman Plumber-Limited Licensee. New language to allow the Board to consider an applicant's discharge status from the military when evaluating the competency of a military service member or military veteran for a particular license or registration is also added. Language from the existing §363.1 requiring the Board to expedite the issuance of a license by endorsement or reciprocity to a military service member or military veteran is deleted because the Board does not issue licenses in this manner.

Proposed §363.4, concerning Master Plumber License, reorganizes and rewords the provisions contained in subsection (c) of the existing §363.1 to improve clarity.

Proposed §363.5, concerning Journeyman Plumber License, consolidates all of the provisions related to the eligibility requirements for a Journeyman Plumber License into a single rule. Specifically, proposed §363.5 reorganizes and rewords the provisions contained in subsection (d) of the existing §363.1 to improve clarity and adds new language to exempt applicants for a Journeyman examination who have completed the classroom portion of a training program provided by a person approved by the Board and based on course materials approved by the Board, or hold a current Journeyman Plumber License issued in another state, from the required 48 hours of classroom training. Proposed §363.5 also incorporates the provisions from subsections (b)(2), (c), (d), and (e) of the existing §363.12 that describe the training an applicant must complete to be eligible to take the Journeyman Plumber examination. The reference to "Construction Mandatory Topics Review" in subsection (c) of the existing §363.12 is changed to "Construction Industry Practices" to reflect the current name of the 10-Hour Outreach Training Program offered by the Occupational Safety and Health Administration.

Proposed §363.6, concerning Tradesman Plumber-Limited License, consolidates all of the provisions related to the eligibility requirements for a Tradesman Plumber-Limited License into a single rule. Specifically, proposed §363.6 reorganizes and rewords the provisions contained in subsection (e) of the existing §363.1 to improve clarity and adds new language to exempt applicants for a Tradesman Plumber-Limited examination who have completed the classroom portion of a training program provided by a person approved by the Board and based on course materials approved by the Board, or hold a current Master or Journeyman Plumber License issued in another state, from the required 24 hours of classroom training. New language is also added to describe the training an applicant must complete to be eligible to take the Tradesman Plumber-Limited examination.

Proposed §363.7, concerning Plumber's Apprentice Registration, includes the provisions from subsection (m) of the existing §363.1.

Proposed §363.8, concerning Plumbing Inspector License, reorganizes and rewords the provisions contained in subsection (f) of the existing §363.1 to improve clarity.

Proposed §363.9, concerning Medical Gas Piping Installation Endorsement, consolidates all of the provisions related to the eligibility requirements for the Medical Gas Piping Installation Endorsement into a single rule. Specifically, it includes the provisions contained in subsection (g) of the existing §363.1 and also incorporates the provisions from subsection (b) of the existing §363.11 that describe the training an applicant must complete to be eligible to take the Medical Gas Piping Installation Endorsement examination.

Proposed §363.10, concerning Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement, consolidates all of the provisions related to the eligibility requirements for the Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement into a single rule. Specifically, it includes the provisions contained in subsection (h) of the existing §363.1 and also incorporates the provisions from subsection (d) of the existing §363.11 that describe the training an applicant must complete to be eligible to take the Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement examination.

Proposed §363.11, concerning Water Supply Protection Specialist Endorsement, consolidates all of the provisions related to the eligibility requirements for the Water Supply Protection Specialist Endorsement into a single rule. Specifically, it includes the provisions contained in subsection (i) of the existing §363.1 and also incorporates the provisions from subsection (c) of the existing §363.11 that describe the training an applicant must complete to be eligible to take the Water Supply Protection Specialist Endorsement examination.

Proposed §363.12, concerning Residential Utilities Installer Registration, includes the provisions from subsection (j) of the existing §363.1.

Proposed §363.13, concerning Drain Cleaner Registration, includes the provisions from subsection (k) of the existing §363.1.

Proposed §363.14, concerning Drain Cleaner-Restricted Registration, includes the provisions from subsection (l) of the existing §363.1.

Proposed §363.15, concerning Consequences to an Applicant With Criminal Convictions, rewords and restructures the provisions from the existing §363.2 to improve clarity and changes the title to correct omissions. Subsections (a), (f), (g), and (i) of the existing §363.2 are deleted to eliminate redundancies with Chapter 53 of the Texas Occupations Code and other subsections of this rule.

Proposed §363.16, concerning Examination Schedule, rewords and restructures the provisions from the existing §363.3 to improve clarity and adds new subsections (b) and (c) to specify the order in which exam applications will be processed and require the Board to provide an applicant with a written notice of the date, time, and place of examination.

Proposed §363.17, concerning Reporting for Examination, rewords and restructures the provisions from the existing §363.4 to improve clarity.

Proposed §363.18, concerning Description of Examination, rewords and restructures the provisions from the existing §363.5 to improve clarity and adds new language requiring the Board to make information about the scope of each examination available on its website to reflect existing Board policy and procedures.

Proposed §363.19, concerning Non-Standard Examination Accommodations, rewords and restructures the provisions from the existing §363.6 to improve clarity.

Proposed §363.20, concerning Reexamination, rewords and restructures the provisions from the existing §363.9 to improve clarity.

Proposed §363.21, concerning Disqualification, rewords and restructures the provisions from the existing §363.10 to improve clarity and changes the word "may" to "shall" to require, rather than permit, the Board to deny an applicant who furnishes false information on an application or uses fraudulent means of establishing his or her qualifications the right to receive a registration or the opportunity to take an examination.

Proposed §363.22, concerning Providers and Instructors of Endorsement Training Programs, changes the title of the existing §363.11 and replaces subsection (a) with new subsections (a) through (h), which reword the existing provisions and add new language. Specifically, new subsections (a) and (b) prescribe that only a Course Provider or Instructor who is approved to provide or instruct Continuing Professional Education may provide or instruct a training program for an endorsement issued by the Board; new subsection (d) prohibits a Course Provider or Instructor whose approval to provide or instruct Continuing Professional Education is revoked or suspended from providing or instructing a training program for an endorsement; new subsection (f) requires a Course Provider to keep an electronic or paper copy, rather than a "record," of each certificate of completion issued under this section; new subsection (g) requires a Course Provider to submit a course outline for an endorsement training program to the Board for approval; and new subsection (i) allows the Board to require a Course Provider to resubmit a previously-approved course outline for an endorsement training program at any time. As explained above, subsections (b), (c), and (d) of the existing 363.11 are deleted and moved to proposed §363.9, §363.11, and §363.10 respectively.

Proposed §363.23, concerning Providers and Instructors of Training Programs for Journeyman Plumber and Tradesman Plumber-Limited License Applicants, changes the title and rewords and restructures subsections (f) through (j) of the existing §363.12. New language is added to require the presence of an approved Course Instructor if a Course Provider utilizes a person who is OSHA-certified, but not Board-approved, to instruct the OSHA 10-Hour Outreach Training Program and to require a Course Provider to keep an electronic or paper copy, rather than a "record," of each certificate of completion issued under this section. As explained above, subsections (b)(2), (c), (d), and (e) of the existing §363.12 are deleted and moved to proposed §363.5 and subsection (b)(1) is deleted and moved to proposed §363.6. As a result of this reorganization, subsection (a) of the existing §363.12 is deleted as redundant.

Proposed §363.24, concerning Training Program for Responsible Master Plumber Applicants, rewords and restructures the provisions from the existing §363.13 to improve clarity and adds new language to require that an approved Course Instructor, governmental entity, educational entity, or individual utilized by a Course Provider to instruct a portion of the Responsible Master Plumber training program have expertise in the subject it will teach. New language is also added to require the presence of an approved Course Instructor if the Course Provider utilizes a governmental entity, educational entity, or individual who is not an approved Course Instructor to provide instruction and to require a Course Provider to keep an electronic or paper copy, rather than a "record," of each certificate of completion issued under this section.

Proposed §363.25, concerning Criminal Conviction Guidelines, deletes subsection (a) from the existing §363.14 because it is redundant and reorganizes and rewords the remaining provisions to improve clarity. The word "felony" is deleted from subsections (c)(15-17) and (c)(22) of the existing §363.14 to align the rule with §53.021(a) of the Texas Occupations Code, which allows a licensing agency to consider both felony and misdemeanor convictions when reviewing an application for a license, exam, renewal, etc. A new subsection (e) is also added to require that applicants with convictions that place them in more than one level of risk are classified using the highest applicable level.

In addition to the specific changes noted above, non-substantive changes to punctuation, capitalization, and grammar appear throughout the proposed amendments to ensure uniformity across all Board Rules.

The proposed revisions were identified during the rule review for Chapter 363 published in the November 25, 2016, issue of the Texas Register.

Lisa G. Hill, Executive Director of the Texas State Board of Plumbing Examiners, has determined that for the first five-year period the new Chapter 363 is in effect, there will be no fiscal impact on state or local government as a result of enforcing this chapter as proposed. Because the Board licenses only individuals and not businesses, there should be no significant fiscal impact on small or micro-businesses.

Ms. Hill has also determined that for each of the first five years the new Chapter 363 is in effect, the public benefit anticipated as a result of enforcing this chapter as proposed will be to have rules that are better-organized, clearer, more consistent, and free of confusing redundancies with other statutes and rules. This new chapter will also update the rules so they more accurately reflect existing Board policy, thereby protecting the health, safety, and welfare of the public.

Written comments regarding the proposed Chapter 363 may be submitted by mail to Lisa G. Hill at P.O. Box 4200, Austin, Texas 78765-4200; or by email to info@tsbpe.texas.gov with the subject line "Chapter 363." All comments must be received within 30 days.

The new rules set forth in 22 TAC Chapter 363 are proposed under the authority of Chapter 1301 of the Texas Occupations Code, which requires the Board to adopt and enforce rules necessary to administer and enforce this chapter; Chapter 53 of the Occupations Code, which requires a licensing authority to issue guidelines relating to the practices of the licensing authority for determining whether a criminal conviction directly relates to an occupation; and Chapter 55 of the Occupations Code, which requires a state agency that issues licenses to adopt rules regarding the licensure of military service member, military veterans, or military spouses.

No other statute, article, or code is affected by the proposal.

§363.1.Definitions.

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

(1) Application--the information submitted by an individual seeking Board approval to:

(A) obtain a license, registration, or endorsement; or

(B) take a licensing or endorsement examination administered by the Board.

(2) Directly Related to Plumbing--directly related to the duties and responsibilities of the occupation of registered and licensed individuals performing plumbing work and plumbing inspections.

§363.2.General Qualifications.

(a) To be eligible to receive any license or registration issued by the Board an applicant must be:

(1) a citizen or national of the United States; or

(2) an alien or non-immigrant eligible for licensure by the State of Texas.

(b) In order to qualify for any license, registration, or endorsement, an applicant must:

(1) meet all of the requirements of the Board;

(2) remit the appropriate fee; and

(3) successfully complete the appropriate examination (if any).

(c) An applicant may qualify for a Master Plumber License, Journeyman Plumber License, Tradesman Plumber-Limited License, Plumbing Inspector License, or Plumber's Apprentice Registration.

(1) A licensed Plumbing Inspector, Master Plumber or Journeyman Plumber may obtain a Medical Gas Piping Installation Endorsement, Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement, or Water Supply Protection Specialist Endorsement.

(2) A Tradesman Plumber-Limited may obtain a Drain Cleaner Registration.

(3) A registered Plumber's Apprentice may obtain a Residential Utilities Installer Registration, a Drain Cleaner-Restricted Registration or a Drain Cleaner Registration.

(d) A Plumber's Apprentice or Tradesman Plumber-Limited Licensee applying to take an examination must submit an Employer's Certification Form (ECF) showing that the applicant has accrued the required hours of experience working in the trade.

(1) If the applicant accrued the hours through employment with multiple employers, the ECF must be submitted by each employer the applicant worked for.

(2) The ECF shall be completed by the licensed plumber or plumbers who supervised the applicant.

(3) If currently employed, the applicant shall furnish the ECF to the licensed plumber or plumbers responsible for supervising the applicant. The licensed plumber or plumbers shall submit the completed ECF to the Board within thirty (30) days of receiving it from the applicant.

(4) Upon separation of employment or the end of a contract, an employer shall automatically provide a completed ECF to a Plumber's Apprentice or Tradesman Plumber Limited Licensee.

(e) To receive credit for experience working in the trade, the applicant must hold either a valid Plumber's Apprentice Registration or Tradesman Plumber-Limited License at the time the hours were worked.

§363.3.Qualifications for Applicants with Military Experience.

(a) Notwithstanding §363.2(e) of this chapter, the Board shall credit verified military service, training, or education toward the requirements, other than examination requirements, for a license or registration issued by the Board.

(b) In lieu of the standard method(s) of qualifying for a particular license, and based on the applicant's circumstances, the Board may use an alternative method that takes into consideration any combination of the following:

(1) education;

(2) continuing education;

(3) examinations (written and/or practical);

(4) letters of good standing;

(5) letters of recommendation;

(6) work experience; or

(7) discharge status from the military.

(c) This section does not apply to an applicant who:

(1) holds a restricted license issued by another jurisdiction; or

(2) has an unacceptable criminal history according to Chapter 53 of the Texas Occupations Code and §363.15 and §363.25 of this chapter.

(d) The Board shall expedite the issuance of a provisional license under this chapter to an applicant who:

(1) has verified military experience; and

(2) holds a current license issued by another jurisdiction that has license requirements that are substantially equivalent to the license requirements of the Board.

§363.4.Master Plumber License.

(a) To be eligible for a Master Plumber License an applicant must:

(1) have obtained a high school diploma, or the equivalent of a high school diploma; and

(2) have held a Journeyman Plumber License issued in Texas or another state:

(A) for at least four years; or

(B) for at least one year if the applicant has successfully completed a training program approved by the United States Department of Labor, Office of Apprenticeship or another nationally-recognized apprentice training program accepted by the Board.

(b) An applicant who is licensed as a Master Plumber in another state must meet the requirements set forth in subsection (a) of this section.

§363.5.Journeyman Plumber License.

(a) To be eligible for a Journeyman Plumber License an applicant must:

(1) have obtained a high school diploma, or the equivalent of a high school diploma; and

(2) have completed forty-eight (48) hours of classroom training provided by a Board-approved instructor in a Board-approved training program in the areas of health and safety, the latest version of all plumbing codes adopted by the Board, and water conservation.

(b) In addition to the requirements in subsection (a) of this section an applicant must:

(1) have at least 8,000 hours of experience working at the trade under the supervision of a RMP or a Master Plumber licensed in another state; and

(2) hold one of the following:

(A) a current Plumber's Apprentice Registration;

(B) a current Tradesman Plumber-Limited License; or

(C) a current Journeyman Plumber License issued in another state.

(c) Upon written request by the applicant, the Board may credit an applicant with up to 1,000 hours of the work experience required to take the Journeyman Plumber examination if the applicant has completed the classroom portion of a training program that is:

(1) approved by the United States Department of Labor, Office of Apprenticeship; or

(2) provided by a person approved by the Board and based on course materials approved by the Board.

(d) Notwithstanding the training required by subsection (a)(2) of this section, a registered Plumber's Apprentice may apply for and take the Journeyman Plumber examination if the apprentice has received an associate of applied science degree from a plumbing technology program that:

(1) includes a combination of classroom and on-the-job training; and

(2) is approved by the Board and the Texas Higher Education Coordinating Board.

(e) An applicant is exempt from the training required by subsection (a)(2) of this section if the applicant:

(1) has completed the classroom portion of a training program provided by a person approved by the Board and based on course materials approved by the Board;

(2) is a Plumber's Apprentice who is enrolled in good standing in a training program approved by the United States Department of Labor, Office of Apprenticeship; or

(3) holds a current Journeyman Plumber License issued in another state.

(f) The training program required by subsection (a)(2) of this section shall include:

(1) two (2) six-hour Continuing Professional Education (CPE) classes as required by §365.14(c) of the Board Rules; and

(2) the Occupational Safety and Health Administration (OSHA) 10-Hour Outreach Training class on Construction Industry Procedures, including:

(A) Introduction to OSHA;

(B) OSHA Focus on Four Hazards--fall protection, electrical, caught in between, and struck by;

(C) Personal Protective and Life Saving Equipment;

(D) Health Hazards in Construction, including hazard communication and silica;

(E) Tools, including hand tools and power tools;

(F) Excavations;

(G) Stairways and Ladders;

(H) Hazardous Materials; and

(I) Introduction to Industrial Hygiene and Blood Borne Pathogens.

(g) In addition to the classes described in subsection (f) of this section, the training required by subsection (a)(2) of this section shall include:

(1) eight (8) hours of classroom training, as follows:

(A) two (2) hours, to include:

(i) reading and understanding residential construction drawings;

(ii) learning the basics of math for plumbing; and

(iii) drawing rough in and riser diagrams;

(B) one (1) hour to review the International Residential Code chapter on Fuel Gas, including:

(i) definitions;

(ii) pipe sizing and layout; and

(iii) testing and inspections;

(C) one (1) hour to review the International Residential Code chapter on General Plumbing Requirements, including:

(i) individual water supply and sewage disposal;

(ii) structural and piping protection, including notching and boring;

(iii) trenching and backfilling;

(iv) workmanship and waterproofing penetrations; and

(v) listed, labeled and approved materials;

(D) one (1) hour to review the International Residential Code chapters on Plumbing Fixtures and Water Heaters, including:

(i) the installation of plumbing fixtures and accessories;

(ii) water heater installation and replacement, including hazards of improper installations; and

(iii) water heater safety devices and alternative methods of existing installations not to code;

(E) one (1) hour to review the International Residential Code chapter on Water Supply and Distribution, including:

(i) understanding and principals of backflow protection for potable water systems;

(ii) water supply systems, including thermal expansion control and water hammer arrestors;

(iii) water conservation and maximum flow for plumbing fixtures;

(iv) sizing and pressures of potable water systems from the meter throughout distribution to fixture connections;

(v) materials and installation of potable water piping;

(vi) demonstration of soldering and brazing according to B-828 standards;

(vii) hangers, anchors and supports; and

(viii) drinking water treatment units;

(F) one (1) hour to review the International Residential Code chapters on Sanitary Drainage and Vents, including:

(i) materials and installation of drainage systems, including proper grade and changes in direction of fittings;

(ii) preparation of piping;

(iii) standards for solvent cementing of pipe and fittings;

(iv) cast iron piping and fittings;

(v) location and installation of cleanouts;

(vi) sumps and ejectors sizing and installation;

(vii) understanding the principals and physics of proper venting;

(viii) installation of different types of venting systems; and

(ix) improper connections and prohibited venting applications;

(G) one (1) hour to review the International Residential Code chapter on Traps, including:

(i) design and prohibited traps;

(ii) sizing and installation of traps and trap arms;and

(iii) trap protection; and

(2) eighteen (18) hours of classroom training in certain chapters of the Uniform Plumbing Code, International Plumbing Code, and International Fuel Gas Code (as appropriate); the Texas Accessibility Standards, the Americans with Disabilities Act; and water conservation, as follows:

(A) one (1) hour to review the chapters on General Regulations;

(B) one (1) hour to review the chapters on Plumbing Fixtures and Fixture Fittings, including:

(i) general requirements and water conservation information for plumbing fixtures;

(ii) commercial plumbing fixtures; and

(iii) location and installation requirements for fixtures and fixture fittings;

(C) two (2) hours to review the chapters on Water Heaters, including:

(i) general regulations for water heater installation and replacement, including hazards of improper installations;

(ii) safety requirements for commercial water heaters;

(iii) different types of water heaters available, including installations; and

(iv) safety devices and alternative methods to bring existing installations into compliance with plumbing codes;

(D) two (2) hours to review the chapters on Water Supply and Distribution, including:

(i) installation of potable water systems; and

(ii) pipe sizing for water supply and distribution;

(E) two (2) hours to review the chapters on Sanitary Drainage, including:

(i) understanding commercial plumbing; and

(ii) pipe sizing for sanitary waste;

(F) one (1) hour to review the chapters on Indirect Wastes, including:

(i) applications accepted for indirect waste systems, both air-gap and air-break; and

(ii) understanding the reason for indirect waste systems;

(G) two (2) hours to review the chapters on Vents, including:

(i) physics and importance of proper venting;

(ii) different venting methods, including vent termination;

(iii) special venting for island fixtures, and combination waste and vent systems; and

(iv) pipe sizing of vents;

(H) one (1) hour to review the chapters on Traps and Interceptors, including:

(i) physics and importance of trap protection;

(ii) grease interceptor design, installation and maintenance according to the Plumbing Drainage Institute; and

(iii) different types of interceptors and applications according to code;

(I) one (1) hour to review the chapters on Storm Drainage, including:

(i) basic design, materials and installation of storm water systems;

(ii) hazards of improper installations; and

(iii) testing procedures for storm drainage systems;

(J) two (2) hours to review the chapters on Fuel Gas Piping, including:

(i) hazards of improperly designed or installed fuel gas piping and appliances;

(ii) approved materials and methods, including pipe and fittings; and

(iii) combustion air requirements;

(K) one (1) hour to review the basic installation of handicapped plumbing fixtures for commercial projects, as required by the Texas Accessibility Standards and the Americans with Disabilities Act; and

(L) two (2) hours to review new technology that promotes water and energy conservation including, rain water harvesting, solar energy, and water smart applications.

§363.6.Tradesman Plumber-Limited License.

(a) To be eligible for a Tradesman Plumber-Limited License an applicant must:

(1) have completed twenty-four (24) hours of classroom training provided by a Board-approved instructor in a Board-approved training program in the areas of health and safety, the latest version of all plumbing codes adopted by the Board, and water conservation;

(2) have at least 4,000 hours of experience working at the trade under the supervision of a RMP or a Master Plumber licensed in another state; and

(3) hold one of the following:

(A) a current Plumber's Apprentice Registration;

(B) a current Journeyman Plumber License issued in another state; or

(C) a current Master Plumber License issued in another state.

(b) Upon written request by the applicant, the Board may credit an applicant with up to 1,000 hours of the work experience required to take the Tradesman Plumber-Limited examination if the applicant has completed the classroom portion of a training program that is:

(1) approved by the United States Department of Labor, Office of Apprenticeship; or

(2) provided by a person approved by the Board and based on course materials approved by the Board.

(c) Notwithstanding the training required by subsection (a)(1) of this section, a registered Plumber's Apprentice may apply for and take the Tradesman Plumber-Limited examination if the apprentice has received an associate of applied science degree from a plumbing technology program that:

(1) includes a combination of classroom and on-the-job training; and

(2) is approved by the Board and the Texas Higher Education Coordinating Board.

(d) An applicant is exempt from the training required by subsection (a)(1) of this section if the applicant:

(1) has completed the classroom portion of a training program provided by a person approved by the Board and based on course materials approved by the Board;

(2) is a registered Plumber's Apprentice who is enrolled in good standing in a training program approved by the United States Department of Labor, Office of Apprenticeship; or

(3) holds a current Master or Journeyman Plumber License issued in another state.

(e) The training program required by subsection (a)(1) of this section shall include:

(1) one (1) six-hour CPE class as required by §365.14(c) of the Board Rules;

(2) the OSHA 10-Hour Outreach Training class described in §363.5(f)(2) of this chapter; and

(3) the eight (8) hours of classroom training described in §363.5(g)(1) of this chapter.

§363.7.Plumber's Apprentice Registration.

To be eligible for a Plumber's Apprentice Registration an applicant must be at least sixteen (16) years of age.

§363.8.Plumbing Inspector License.

(a) To be eligible for a Plumbing Inspector License an applicant must:

(1) have obtained a high school diploma, or the equivalent of a high school diploma; and

(2) hold one of the following:

(A) a current Journeyman or Master Plumber License issued in Texas or another state;

(B) a current Plumbing Inspector license issued in another state with licensing requirements substantially equivalent to the licensing requirements of the Board; or

(C) a current professional engineer or a professional architect license issued in Texas.

(b) In addition to meeting the requirements in subsection (a) of this section, an applicant who holds a Journeyman or Master Plumber License issued in another state must take and pass the Journeyman examination developed by the Board.

(c) An applicant is exempt from the licensure requirement listed in subsection (a)(2) of this section if the applicant has completed a total of 500 hours of training or experience in the plumbing industry. An applicant may receive credit toward the 500 hours as follows:

(1) 100 hours of credit for successful completion of a certification in the Uniform Plumbing Code or the International Plumbing Code, issued by the International Association of Plumbing and Mechanical Officials or the International Code Council plumbing code certification;

(2) 100 hours of credit for successful completion of a Board-approved Medical Gas Piping Installation Endorsement training program;

(3) 100 hours of credit for successful completion of a Board-approved Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement training program;

(4) 100 of hours credit for successful completion of a Board-approved Water Supply Protection Specialist Endorsement training program;

(5) 100 hours of credit for successful completion of an approved Backflow Tester Certification program;

(6) six (6) hours of credit for successful completion of any of the Board-approved CPE for Licensed Plumbers and Plumbing Inspectors courses;

(7) up to 100 hours of credit for hours attending approved, documented and verified plumbing-related training academy or educational sessions;

(8) up to 200 hours of credit for hours working in the trade or an approved, similar plumbing-related trade, as verified by former employers; or

(9) up to 200 hours of credit for documented and verified on-the-job training in the enforcement of plumbing codes under the direct supervision of a licensed Plumbing Inspector.

§363.9.Medical Gas Piping Installation Endorsement.

(a) To be eligible for a Medical Gas Piping Installation Endorsement an applicant must:

(1) hold a current Journeyman Plumber, Master Plumber or Plumbing Inspector License; and

(2) have successfully completed a Board-approved training program in medical gas piping installation, which is based on the standards contained in the latest edition of the National Fire Protection Association 99 Health Care Facilities Code (NFPA 99).

(b) At a minimum, the training program required by subsection (a)(2) of this section shall:

(1) consist of at least twenty-four (24) hours dedicated to classroom presentation, shop demonstration and testing of the enrollee's comprehension of the course material;

(2) address the responsibilities of an endorsement-holder as outlined in the current edition of the NFPA 99, Plumbing License Law and Board Rules;

(3) address the proper installation and testing requirements for medical gas and vacuum piping systems, as outlined in the current edition of the NFPA 99; and

(4) include at least four (4) hours of shop demonstration covering the proper assembly, purging and brazing procedures for horizontal and vertical joints.

§363.10.Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement.

(a) To be eligible for a Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement an applicant must:

(1) hold a current Journeyman Plumber, Master Plumber or Plumbing Inspector License; and

(2) have successfully completed a Board-approved training program that provides the training necessary for the proper installation of a multipurpose residential fire protection sprinkler system as required by the National Fire Protection Association Standard 13D and any other applicable codes and standards recognized by the state.

(b) The training program required by subsection (a)(2) of this section shall be at least twenty-four (24) hours in length, incorporate the training criteria included in the American Society of Sanitary Engineering Series 7000 as it relates to plumbing-based residential fire protection systems installers for one and two-family dwellings, and include:

(1) one (1) hour to review applicable standards, codes, and laws, including the Plumbing License Law, Board Rules and the fire sprinkler rules set forth in 28 Tex. Admin. Code §§34.701 et seq., and their integration and identifying the enforcing authorities;

(2) four (4) hours to study definitions, to identify at a minimum the various types, specific parts, specific terminology and concepts of the system;

(3) four (4) hours to learn the acceptable type, material, location, limitation and correct installation of equipment, including but not limited to: pipe, fittings, valves, types of sprinkler heads, supports, drains, test connections, automatic by-pass valve, smoke alarm devices, and other appurtenances;

(4) two (2) hours to learn the acceptable type, configuration, and material--which may or may not be required for a water supply--including but not limited to: backflow preventers, shut off valves, water meters, water flow detectors, tamper switches, test connections, pressure gages, minimum pipe sizes, storage tanks, and wells including the ability to perform a water flow test of a city water supply;

(5) eight (8) hours to learn which rooms require sprinklers and the correct positioning of a sprinkler head based on its type, listing, temperature rating, and the building structure, including but not limited to: understanding the concepts of the area of coverage, spacing, distance from walls and ceilings, listing limitations, dead air pockets, manufacturer's requirements and obtaining knowledge of how structural features such as flat, sloped, pocket, or open joist ceilings, close proximity to heat sources and other obstructions such as ceiling fans, surface mounted lights, beams, and soffits may adversely influence the location of a sprinkler head;

(6) three (3) hours to learn critical hydraulic concepts for the installer that may adversely affect the original design plan due to field construction changes, including but not limited to: remote area sprinkler operation, flow versus pressure, elevation pressure loss, sprinkler K-factors, fixture units, minimum pipe diameters, additional pipe lengths and understand which household water appliances affect or do not affect the sprinkler hydraulics/performance; and

(7) two (2) hours to learn the required testing, maintenance and documentation, including but not limited to: the final inspection and tests normally required by the local fire official, when permits, working plans, as-built plans or hydraulic calculations are required and who provides for the system maintenance and instructions.

(c) An applicant who holds a current Master or Journeyman Plumber License issued by the Board and a current RME-General or RME-Dwelling License issued by the State Fire Marshal's Office, Texas Department of Insurance, is exempted from completing the training program required by subsection (a)(2) of this section prior to taking the Multipurpose Residential Fire Protection Sprinkler Specialist Endorsement examination.

§363.11.Water Supply Protection Specialist Endorsement.

(a) To be eligible for a Water Supply Protection Specialist Endorsement an applicant must:

(1) hold a current Journeyman Plumber, Master Plumber License or Plumbing Inspector License; and

(2) complete a Board-approved training program based on the Federal Safe Drinking Water Act and the Federal Clean Water Act, on-site wastewater and site evaluations and graywater re-use, water quality training and water treatment, water utilities systems and regulations, water conservation, rainwater harvesting systems, xeriscape irrigation, fire protection systems, backflow prevention, and state laws regulating lead contamination in drinking water.

(b) At a minimum the training program required by subsection (a)(2) of this section shall be at least twenty-four (24) hours with a maximum of eight (8) hours of instruction per day and include:

(1) a six (6) hour review of the significance of cross-connections, the principles of back pressure and back siphonage, thermal expansion, the acceptable devices and/or requirements for a public water supply system including, but not limited to, approved backflow protection devices, shut-off valves, water meters, and containment vessels;

(2) a two (2) hour review of the applicable standards, codes, and laws, including but not limited to: the Plumbing License Law, Board rules, the Texas Commission on Environmental Quality rules relating to a public water supply and water reuse, as described in the Texas Water Development Board's Rainwater Harvesting Manual, and the Texas A&M AgriLife Extension Service recommendations;

(3) a four (4) hour review of the specific parts and terminology, and the concepts and components of a rainwater harvesting system, including proper sizing for all water reuse systems;

(4) an eight (8) hour review of the acceptable type, material, location, limitation, and correct installation of equipment related to the treatment and reuse of water;

(5) four (4) hours devoted to the elements of a proper customer service inspection as required by the Texas Commission on Environmental Quality; and

(6) information specific to rainwater harvesting as outlined in the latest edition of the Texas Water Development Board's Rainwater Harvesting Manual.

(c) In addition to the information described in subsection (b)(6) of this section, a training program may include the latest edition of the Uniform Plumbing Code Rainwater Harvesting Seminar Manual, or the latest edition of the International Plumbing Code or the International Green Construction Code.

§363.12.Residential Utilities Installer Registration.

To be eligible for a Residential Utilities Installer Registration an applicant must:

(1) hold a current Plumber's Apprentice Registration;

(2) have completed at least 2,000 hours working at the trade under the direct supervision of a Tradesman Plumber-Limited, Journeyman Plumber, or Master Plumber, and the supervision of a RMP, as verified by employers; and

(3) complete a Board-approved training program.

§363.13.Drain Cleaner Registration.

To be eligible for a Drain Cleaner Registration an applicant must:

(1) hold a current Plumber's Apprentice Registration;

(2) have completed at least 4,000 hours working at the trade as a Drain Cleaner-Restricted Registrant under the supervision of a RMP, as verified by employers; and

(3) complete a Board-approved training program.

§363.14.Drain Cleaner-Restricted Registration.

To be eligible for a Drain Cleaner-Restricted Registration an applicant must:

(1) hold a current Plumber's Apprentice Registration; and

(2) complete a Board-approved training program.

§363.15.Consequences to an Applicant With Criminal Convictions.

(a) The Board shall revoke any and all registrations, licenses, or endorsements held by an individual if the individual is incarcerated due to a felony conviction, felony community supervision revocation, revocation of parole, or revocation of mandatory supervision. The Board shall automatically deny an application submitted by an individual who, at the time the application is submitted, is incarcerated because of a felony conviction, felony community supervision revocation, revocation of parole, or revocation of mandatory supervision.

(b) The Board shall review the application of an individual that has been convicted of a felony or misdemeanor directly related to plumbing to determine whether to disqualify a person from receiving a registration, license or endorsement, or deny a person the opportunity to take an examination.

(c) In determining whether a criminal offense is directly related to plumbing, the Board shall consider:

(1) the nature and seriousness of the crime;

(2) the relationship of the crime to the purposes for requiring a license or registration to engage in plumbing or plumbing inspections;

(3) the extent to which a license or registration might offer an opportunity to engage in further criminal activity of the same type as that in which the person previously had been involved; and

(4) the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the responsibilities of registered and licensed individuals performing plumbing or plumbing inspections.

(d) In addition to the factors listed in subsection (c) of this section, the Board, in determining whether a person who has been convicted of a crime is fit for licensure, shall consider:

(1) the extent and nature of the person's past criminal activity;

(2) the age of the person when the crime was committed;

(3) the amount of time that has elapsed since the person's last criminal activity;

(4) the amount of time that has elapsed since the person's release from incarceration;

(5) the conduct and work activity of the person before and after the criminal activity;

(6) evidence of the person's rehabilitation or rehabilitative effort while incarcerated or after release;

(7) letters of recommendation signed and dated by a current employer, if the applicant is employed, or a previous employer, stating that the employer has specific and complete knowledge of the applicant's criminal history and stating the reasons that the employer is recommending that the applicant be considered fit and not a threat to the public's health, safety and welfare; and

(8) letters of recommendation signed and dated by any other person in contact with the convicted person.

(e) An applicant who has been convicted of a felony or misdemeanor shall obtain and submit to the Board:

(1) a fully-completed Supplemental Criminal History Information Form signed by the applicant;

(2) the letters of recommendation described in subsection (d)(7) and (8) of this section; and

(3) proof, in the form required by the Board, that the applicant has:

(A) maintained a record of steady employment;

(B) supported the applicant's dependents, if any;

(C) maintained a record of good conduct;

(D) paid all outstanding court costs, supervision fees, fines, and restitution ordered in any criminal case in which the applicant has been convicted; and

(E) successfully completed all court-ordered or voluntary rehabilitation classes, courses or programs.

(f) In addition to the information listed in subsection (e) of this section, an applicant with a conviction of a sexual nature shall obtain and provide to the Board the written results of a standard, nationally-recognized testing and evaluation of the applicant, recently-performed by a licensed professional therapist or counselor who is certified as a Registered Sex Offender Treatment Provider in the State of Texas, to determine the level of likelihood for the applicant to commit future crimes of a sexual nature.

(g) If required by the Board, the applicant shall meet all requirements necessary for the Board to access the applicant's criminal history record information maintained by the Department of Public Safety and the Federal Bureau of Investigation, including submitting fingerprint information and paying the required fees.

(h) The Enforcement Committee may approve, without Board approval, the application for a license, endorsement, or registration of a person who has a criminal conviction, if the Enforcement Committee finds that the criminal conviction is not directly related to plumbing.

(1) The Enforcement Committee may request an applicant with a criminal conviction to appear before the committee and present information relating to the applicant's criminal conviction.

(2) If the Enforcement Committee determines that an applicant is ineligible for a license, endorsement, or registration based on the applicant's criminal conviction, the Enforcement Committee shall give timely notice of the denial to the applicant at the applicant's last known address on file with the Board. The notice shall inform the denied applicant of the applicant's right to request in writing, within twenty (20) days of the mailing of the notice of denial, a hearing before an administrative law judge of the State Office of Administrative Hearings to review the Enforcement Committee's determination.

(3) If a denied applicant fails to submit a timely request for a hearing under paragraph (2) of this subsection, the Enforcement Committee's decision is rendered final. A denied applicant may not apply for a new registration, license or endorsement before the first anniversary of the date the denial becomes final.

(4) If a denied applicant requests a hearing under paragraph (2) of this subsection, the Board shall determine the applicant's eligibility after reviewing the Proposal for Decision issued by the administrative law judge, and provide the denied applicant a written statement containing:

(A) the reason for the suspension, revocation, denial, or disqualification;

(B) the judicial review procedure provided by §53.052 of the Texas Occupations Code; and

(C) the earliest date the person may appeal the action of the licensing authority.

(5) An applicant who is denied after a hearing held under paragraph (2) of this subsection may not apply for a new registration, license or endorsement before the first anniversary of the date the denial becomes final.

§363.16.Examination Schedule.

(a) The Board shall conduct examinations on a regular basis according to demand.

(b) Applications will be processed and exams will be scheduled on a first-come, first served basis, unless an application is subject to review under Chapter 53 of the Texas Occupations Code and §363.15 of this chapter. The Board will not process incomplete applications.

(c) Once an applicant is scheduled for an exam, the Board shall provide the applicant with written notification of the time, date, and place of examination.

§363.17.Reporting for Examination.

(a) An applicant shall report promptly at the place of the examination.

(b) If an applicant is scheduled for an examination and cannot appear, the applicant must notify the Chief Examiner in writing, postmarked no later than ten (10) business days before the scheduled examination date. An applicant who fails to appear or does not give the required notice shall forfeit the examination fee and must submit a new exam application and fee.

(c) An applicant who fails to appear for an exam due to an excused emergency may reschedule once without having to submit a new exam application and fee.

(1) An applicant must submit a written request to reschedule an exam to the Chief Examiner, postmarked no later than five (5) business days after the original examination date, that includes an explanation of the emergency that caused the applicant’s failure to appear.

(2) An applicant who does not submit a request to reschedule within the required time period must submit a new exam application and fee.

(d) The following are considered excused emergencies:

(1) a death in the applicant's family;

(2) illness or hospitalization of the applicant or a member of the applicant's immediate family;

(3) an automobile accident on the day of the examination;

(4) any other unplanned event that is serious enough to prevent the applicant from appearing for the exam if approved by the Chief Examiner.

(e) Emergencies will be subject to verification by the Chief Examiner. Scheduling conflicts due to work will not be considered an excused emergency.

§363.18.Description of Examination.

(a) For each license and endorsement, the Board shall design and conduct a uniform, reasonable examination that includes written questions and practical applications, when appropriate.

(b) In addition to the information described in §363.16(c) of this chapter, the Board shall furnish an applicant with written information explaining the scope of the examination. The Board shall also make the information about the scope of each examination it administers accessible on its website.

§363.19.Non-Standard Examination Accommodations.

(a) An applicant seeking to take an examination with non-standard accommodations shall submit an Applicant Request for Non-Standard Examination Accommodations Form and a Physician or Qualified Licensed Professional Recommendation for Non-Standard Examination Accommodations Form to be used by the Chief Examiner to determine whether an applicant qualifies for non-standard examination accommodations.

(b) Due to the duties and responsibilities of registrants and licensees to protect the health and safety of the public, the Board shall not allow Examiners to provide oral versions of the written components of examinations.

(1) Examiners may give oral instructions and explanations to individuals taking an examination.

(2) An applicant who has been diagnosed by a physician or other qualified licensed professional as having a specific learning or reading disability, such as dyslexia, may request additional time to complete an examination, a separate examination area, or other reasonable accommodation.

(c) The Board shall reserve the right to make all final decisions regarding reasonable examination accommodations and it may require a consultation by experts for a second opinion, if it determines that it is necessary for a particular applicant.

§363.20.Reexamination.

(a) An applicant that fails a single part of a multiple part examination may retake the part that was failed, without having to retake the entire examination.

(1) A failing score on a single part of an examination is a score of 69.9 points or less.

(2) A time limit of three (3) hours is allotted for reexamination of the part that was failed.

(3) The applicant must submit a new exam application and fee in order to retake the part that was failed.

(b) An applicant that fails more than a single part of a multiple part examination must retake the entire examination.

(c) An applicant who fails any part or parts of an examination shall complete a training period before the applicant may retake the examination. The length of the required training period is determined by the number of times the applicant has failed as follows:

(1) First failure: 30-day training period,

(2) Second failure: 60-day training period,

(3) Third and subsequent failures: 90-day training period.

§363.21.Disqualification.

(a) The Board shall disqualify an applicant from receiving a registration or deny an applicant the opportunity to be examined for a license if it discovers that the applicant furnished false information on an application or used any fraudulent means of establishing the applicant's qualifications.

(b) The Board may initiate disciplinary action against any applicant, registrant or licensee who furnishes false information on any certifications, other forms, or renewals distributed by the Board.

§363.22.Providers and Instructors of Endorsement Training Programs.

(a) Only a Course Provider who is approved to provide CPE courses, under §365.16 of the Board rules may provide or instruct a training program required by §§363.9 - 363.11 of this chapter.

(1) Once approved under §365.16 of the Board Rules, a Course Provider is automatically approved to provide the training required by §§363.9 - 363.11 of this chapter and is not required to submit a separate application to the Board.

(2) An approved Course Provider may utilize another governmental or industry-recognized entity to provide a portion of the course instruction so long as an approved Course Instructor is also present.

(b) Only a Course Instructor who is approved to instruct CPE courses, under §365.17 of the Board rules may instruct a training program required by §§363.9 - 363.11 of this chapter provided that the Instructor:

(1) is licensed as:

(A) a Master Plumber or Journeyman Plumber and holds the endorsement that corresponds to the training program the Instructor will teach; or

(B) a Plumbing Inspector and has completed the training and examination requirements necessary to obtain the endorsement that corresponds to the training program the Instructor will teach; and

(2) has successfully completed a Board-approved instructor training program consisting of 160 hours broken down into units as follows:

(A) forty (40) hours covering the basic educational techniques and instructional strategies necessary to plan and conduct effective training programs;

(B) forty (40) hours covering the basic techniques and strategies necessary to analyze, select, develop, and organize instructional material for effective training programs;

(C) forty (40) hours covering the basic principles, techniques, theories, and strategies for establishing and maintaining effective relationships with students, co-workers, and other personnel in the classroom, industry, and community; and

(D) forty (40) covering the basic principles, techniques, theories, and strategies for communicating effectively using instructional media.

(c) To maintain status as an approved Course Instructor under subsection (b) of this section, an Instructor shall complete one of the 40-hour training units described in subsection (b)(2) of this section every twelve (12) months such that all four (4) units (160 hours) are completed within a four-year period.

(d) A Course Provider or Instructor whose approval under §365.16 or §365.17 of the Board Rules is suspended or revoked for any reason, may not provide or instruct the training required by §§363.9 - 363.11 of this chapter.

(e) All Course Providers and Instructors shall:

(1) adhere to the instruction criteria approved by the Board in this section; and

(2) ensure that only students who receive the specified number of contact hours of instruction (excluding any time spent on breaks from instruction) receive credit for completing the training required by §§363.9 - 363.11 of this chapter.

(f) The training required by §§363.9 - 363.11 of this chapter may be provided in increments, as appropriate.

(1) A Course Provider or Instructor shall provide a certificate of completion to a student upon completion of the training.

(2) The certificate of completion shall state:

(A) the title of the endorsement training program;

(B) the names of the Course Provider and Course Instructor;

(C) the name and license number of the student; and

(D) the date that the instruction was completed.

(3) A Course Provider shall maintain an electronic copy of each certificate of completion for at least two (2) years after the date the certificate was issued.

(g) A Course Provider shall:

(1) notify the Board at least seven (7) days before conducting training programs or post electronic notice of the class schedule, including the date(s), time(s), and place(s) class(es) will be held, on the provider's website at least seven (7) days before conducting a class;

(2) perform self-monitoring to ensure compliance with this section and reporting as required by the Board; and

(3) submit a course outline that includes the number of hours of instruction on each topic included in the outline to the Board for approval.

(h) The Board may monitor endorsement training programs to ensure compliance with all applicable laws and Board rules and may deny, suspend, or revoke approval of a Course Provider or Instructor who fails to comply.

(i) The Board may require a Course Provider to resubmit a previously-approved course outline for an endorsement training program at any time in order to ensure the program meets the current requirements of the plumbing codes, laws, and administrative rules applicable to the specific training program.

§363.23.Providers and Instructors of Training Programs for Journeyman Plumber and Tradesman Plumber-Limited License Applicants.

(a) Only a Course Provider or Course Instructor who is approved to provide or instruct CPE courses, under §365.16 or §365.17 of the Board rules may provide or instruct the classroom training required by §363.5(a)(2) and §363.6(a)(1) of this chapter.

(1) Once approved under §365.16 or §365.17 of the Board rules, a Course Provider or Instructor is automatically approved to provide or instruct the training required by §363.5(a)(2) and §363.6(a)(1) of this chapter and is not required to submit a separate application to the Board.

(2) A Course Provider or Instructor whose approval under §365.16 or §365.17 of the Board Rules is suspended or revoked for any reason, may not provide or instruct the training required by §363.5(a)(2) and §363.6(a)(1) of this chapter.

(b) In addition to the meeting the requirements of subsection (a) of this section, a Course Instructor must be approved by the Occupational Safety and Health Administration to provide the training described in §363.5(f)(2) of this chapter. A person who is approved by the Occupational Safety and Health Administration but is not approved under §365.17 of the Board Rules, may teach the training described in §363.5(f)(2) of this chapter through an approved Course Provider so long as an approved Course Instructor is also present.

(c) Course Providers and Instructors approved to provide or instruct the training required by §363.5(a)(2) and §363.6(a)(1) of this chapter shall:

(1) adhere to the instruction criteria described in §363.5(f) and (g) and §363.6(e) of this chapter and ensure that only students who complete the specified number of contact hours of instruction (excluding any time spent on breaks from instruction) receive credit for completing the training required by §363.5(a)(2) and §363.6(a)(1) of this chapter;

(2) provide notice of intent to conduct training required by §363.5(a)(2) and §363.6(a)(1) of this chapter in the same manner required by §365.19(h) of the Board rules; and

(3) abide by the same standards of conduct described in §365.20 of the Board rules when providing the training required by §363.5(a)(2) and §363.6(a)(1) of this chapter.

(d) The training required by §363.5(a)(2) and §363.6(a)(1) of this chapter may be provided in increments, as appropriate.

(1) The Course Provider or Instructor shall provide a certificate of completion to the student for each increment completed.

(2) The certificate of completion shall state:

(A) the names of the Course Provider and Course Instructor;

(B) the name and registration or license number of the student;

(C) the specific instruction and number of hours completed; and

(D) the date that the increment of instruction was completed.

(3) The Course Provider shall maintain an electronic copy of each certificate of completion for at least six (6) years after the date the certificate was issued.

(e) An applicant for examination is responsible for the safekeeping of each original certificate of completion earned by the applicant, until such time that the applicant:

(1) has completed the training required §363.5(a)(2) and §363.6(a)(1) of this chapter;

(2) has met all other requirements under §363.5 and §363.6 of this chapter qualify to take the Tradesman Plumber-Limited or Journeyman Plumber examination; and

(3) has submitted the original certificates of completion along with the appropriate examination application and other required documentation to the Board.

(f) Providing false certificates of completion or any other false information related to the training required by §363.5(a)(2) and §363.6(a)(1) of this chapter to the Board may result in:

(1) the denial of the applicant's examination application;

(2) disciplinary action, as provided by the Plumbing License Law, Board Rules or other laws of this state; or

(3) both.

§363.24.Training Program for Responsible Master Plumber Applicants.

(a) Before a Master Plumber acts as a Responsible Master Plumber (RMP), the Master Plumber must complete a Board-approved training program that includes instruction on the laws and rules applicable to the operation of a plumbing business in this state. The requirements of this section do not apply to a RMP who, on or before January 1, 2012, provides the Board with a Certificate of Insurance that meets the requirements of §367.3 of the Board Rules; and is effective on January 1, 2012.

(b) The training program required under subsection (a) of this section must be a minimum of twenty-four (24) hours in length and include instruction in the following subjects applicable to the operation of a plumbing business in this state:

(1) finance;

(2) legal;

(3) local, state and federal rules and regulations;

(4) insurance/bonds, including workman's compensation insurance;

(5) Occupational Safety and Health Administration requirements awareness; and

(6) customer service.

(c) Only a Course Provider who is approved to provide CPE courses under §365.16 of the Board Rules may provide the classroom training required by this section.

(1) To provide the training required by this section, an approved Course Provider may utilize:

(A) a Course Instructor who is approved to instruct CPE under §365.17 of the Board Rules and has expertise in the subject described in subsection (b) of this section that the Instructor will teach;

(B) a governmental entity, educational entity, or individual with expertise in the subject described in subsection (b) of this section that the entity or individual will teach so long as an approved Course Instructor is also present; or

(C) a combination thereof.

(2) Once approved under §365.16 or §365.17 of the Board Rules, a Course Provider or Instructor is automatically approved to provide or instruct the training required by this section and is not required to submit a separate application to the Board.

(3) A Course Provider or Instructor whose approval under §365.16 or §365.17 of the Board Rules is suspended or revoked for any reason, may not provide or instruct the training required by this section.

(d) Course Providers and Instructors approved to provide or instruct the training required by this section shall:

(1) adhere to the instruction criteria in subsections (a) and (b) of this section, and ensure that only students who complete the specified number of contact hours of instruction (excluding any time spent on breaks from instruction) receive credit for completing the training required by this section;

(2) provide notice of intent to conduct training required by this section, in the same manner required by §365.19(h) of the Board Rules;

(3) abide by the standards of conduct described in §365.20 of the Board Rules; and

(4) adhere to the class size limitations set forth in §365.19(e) of the Board Rules.

(e) The training required by this section may be provided in increments, as appropriate.

(1) The Course Provider or Instructor shall provide a certificate of completion to the individual for each increment completed.

(2) The certificate of completion shall state:

(A) the names of the Course Provider and Course Instructor;

(B) the name and license number of the individual;

(C) the specific instruction and number of hours completed; and

(D) the date that the increment of instruction was completed.

(3) The Course Provider shall maintain an electronic copy of each certificate of completion for at least six (6) years after the date the certificate was issued.

(f) Prior to the date that the Master Plumber begins acting as a RMP, the Master Plumber shall submit to the Board:

(1) a certificate or certificates of completion of the training required by this section; and

(2) a Certificate of Insurance as required by §367.3 of the Board Rules.

(g) Providing false certificates of completion or any other false information related to the training required by this section to the Board may result in disciplinary action, as provided by the Plumbing License Law, Board Rules or other laws of this state.

§363.25.Criminal Conviction Guidelines.

(a) Licensed individuals are required to exercise independent judgment and carry out their duties and responsibilities without risking the health, safety, welfare and property of the public. It is estimated that the majority of Plumber's Apprentices are working toward licensure; therefore, the Board has determined that the duties and responsibilities listed in subsection (b) of this section apply to both licensees and registrants.

(b) After considering the factors set forth in §53.022 of the Texas Occupations Code, the Board has identified the following, non-exhaustive list of duties and responsibilities of individuals performing plumbing or plumbing inspections:

(1) entering a consumer's home or a place of business including, but not limited to:

(A) private residences;

(B) apartment complexes;

(C) schools;

(D) child care facilities;

(E) elder care facilities;

(F) medical care facilities;

(G) financial institutions; and

(H) businesses where valuable merchandise is stored and sold;

(2) making personal contact with consumers and their families, including elderly persons and minor children;

(3) engaging in contractual and financial transactions with consumers;

(4) representing the employer and taking responsibility for vehicles and tools provided by the employer;

(5) ensuring safety when working with hazardous, explosive or volatile materials;

(6) complying with laws, rules, ordinances and codes that regulate plumbing; and

(7) working with officials who are carrying out their duties to enforce laws, rules, ordinances and codes that regulate plumbing, including:

(A) Field Representatives of the Board;

(B) Plumbing Inspectors; and

(C) other law enforcement officers.

(c) Due to the nature of the duties and responsibilities stated in subsection (b)(1) - (7) of this section, the Board has determined that the following offenses are directly related to plumbing (list is not exhaustive):

(1) Any crime of a sexual nature that requires the convicted person to be registered as a sex offender under Chapter 62 of the Texas Code of Criminal Procedure, including:

(A) Aggravated Sexual Assault;

(B) Aggravated Rape;

(C) Sexual Assault;

(D) Rape;

(E) Statutory Rape;

(F) Indecency with a Child (including exposure);

(G) Prohibited Sexual Conduct;

(H) Sexual Performance by a Child;

(I) Possession or Promotion of Child Pornography;

(J) Aggravated Kidnapping (with the intent to commit an illegal act of a sexual nature);

(K) Kidnapping (with the intent to commit an illegal act of a sexual nature);

(L) Unlawful Restraint (with the intent to commit an illegal act of a sexual nature);

(M) Burglary (with the intent to commit an illegal act of a sexual nature);

(N) Indecent Exposure;

(O) Public Lewdness; or

(P) Improper Photography or Visual Recording.

(2) Any crime of a sexual nature regardless of whether the convicted person is required to be registered as a sex offender under Chapter 62 of the Texas Code of Criminal Procedure;

(3) Capital Murder;

(4) Murder;

(5) Criminal Negligent Homicide;

(6) Manslaughter;

(7) Aggravated Kidnapping;

(8) Kidnapping;

(9) Unlawful Restraint;

(10) Injury to a Child, Elderly Individual or Disabled Individual;

(11) Burglary of a Habitation;

(12) Burglary of a Building;

(13) Burglary of an Automobile;

(14) Robbery;

(15) Theft;

(16) Fraud;

(17) Forgery;

(18) Arson;

(19) Aggravated Assault of a Police Officer (or other public official);

(20) Aggravated Assault;

(21) Assault;

(22) Illegal Drug Related Crimes;

(23) Terroristic Threat; or

(24) Any criminal violation of laws or ordinances that regulate plumbing or the practice of plumbing.

(d) The Enforcement Committee shall use the following levels of risk in determining the fitness of a person who has been convicted of a crime to perform the duties and discharge the responsibilities of registered and licensed individuals performing plumbing or plumbing inspections. The levels of risk are listed in order from highest to lowest. The Enforcement Committee shall consider those applicants with convictions of a sexual nature or first degree felony to be the highest risk and those applicants who have a conviction other than that of a sexual nature or first degree felony, and who have completed all required consequences of the conviction more than five years prior to the date of application to be the lowest risk.

(1) Level One - Applicants who have:

(A) a conviction of a sexual nature listed in subsection (c)(1) and (2) of this section; or

(B) a conviction for a first-degree felony.

(2) Level Two - Applicants who have a conviction for a second-degree felony.

(3) Level Three - Applicants who have a conviction other than specified in Level One or Level Two, whose conviction, incarceration, probation, parole, mandatory supervision, court costs or any other fees (including restitution) were completed less than five years prior to the date of application, or are still being completed.

(4) Level Four - Applicants who have convictions other than specified in Level One and Level Two, whose conviction, incarceration, probation, parole, mandatory supervision, court costs or any other fees (including restitution) were completed more than five (5) years prior to the date of application. Written proof of completion from the court, probation or parole officer must be submitted by the applicant.

(e) Applicants with convictions that place them in more than one level of risk, shall be classified using the highest applicable level of risk.

(f) Applicants with multiple convictions will be considered an increased risk, depending on the number and types of convictions.

(g) The Enforcement Committee shall use these guidelines and follow the requirements of §363.15 of this chapter when reviewing applications for registration, examination, and renewal of registrations, licenses and endorsements, to determine the fitness of applicants for licensure.

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 January 19, 2017.

TRD-201700273

Lisa G. Hill

Executive Director

Texas State Board of Plumbing Examiners

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 936-5239


PART 22. TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY

CHAPTER 511. ELIGIBILITY

SUBCHAPTER F. EXPERIENCE REQUIREMENTS

22 TAC §511.123

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.123, concerning Reporting Work Experience.

Background, Justification and Summary

The amendment to §511.123 is a clarification of full-time and part-time work experience needed for the issuance of the CPA certificate.

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 work experience needed for the issuance of the CPA certificate.

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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§511.123.Reporting Work Experience.

(a) The board requires a minimum of one year of work experience as [One year of experience shall consist of full or part-time employment that extends over a period of not less than one year and not more than three years and includes not fewer than 2000 hours of performance of services] described in §511.122 of this chapter (relating to Acceptable Work Experience) which shall be obtained in one of the following ways:[.]

(1) full time employment consisting of 40 or more hours per week completed in no less than 12 months; or

(2) part time employment consisting of a minimum of 20 hours per week until 2000 hours of accounting work experience have been completed. Part-time work experience must be completed in no more than 24 months from the date the work begins.

[(b) Work experience must be reported in years and months.]

(b) [(c)] All work experience presented to the board for consideration shall be accompanied by the following items:

[(1) the applicant's detailed job description;]

(1) [(2)] a statement from the supervising CPA describing the non-routine work performed by the applicant and a description of the important accounting matters requiring the applicant's independent thought and judgment; and

(2) [(3)] a statement from the supervising CPA describing the type of experience that the CPA possesses which qualifies the CPA to supervise the applicant.

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 January 20, 2017.

TRD-201700284

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


SUBCHAPTER H. CERTIFICATION

22 TAC §511.163

The Texas State Board of Public Accountancy (Board) proposes an amendment to §511.163, concerning Board-Approved Ethics Requirement and Examination on the Rules of Professional Conduct.

Background, Justification, and Summary

The amendment to §511.163 clarifies when an ethics course needs to be completed for the issuance of the CPA certificate.

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 ethics course requirement for the issuance of the CPA certificate.

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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§511.163.Board-Approved Ethics Requirement and Examination on the Rules of Professional Conduct.

(a) An applicant applying for the issuance of the CPA certificate [who has not completed a board-approved ethics course within the past two years to meet the education requirements to take the UCPAE,] must successfully complete a board-approved four-hour ethics course of comprehensive study on the board's Rules of Professional Conduct offered through a board-approved and registered provider of CPE.

(b) An applicant is not required to comply with subsection (a) of this section if the applicant has completed an ethics course from a board recognized institution of higher education within two years of the date the board receives the applicant’s application for issuance of the CPA certificate. [An applicant applying for the issuance of the CPA certificate who completed a board-approved ethics course to meet the education requirements to take the UCPAE more than two years prior to the date of submitting the application for issuance of the CPA certificate must successfully complete a board-approved four-hour ethics course of comprehensive study on the board's Rules of Professional Conduct offered through a board-approved and registered provider of CPE.]

(c) An applicant applying for the issuance of the CPA certificate must also pass an examination on the board's Rules of Professional Conduct.

(1) The examination on the Rules of Professional Conduct must be completed not more than six months prior to the issuance of the CPA certificate.

(2) A grade of 85% on the exam is considered passing.

[(3) If a grade of 85% is not scored on the exam, the applicant will be sent another exam to study and complete.]

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 January 20, 2017.

TRD-201700285

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


CHAPTER 523. CONTINUING PROFESSIONAL EDUCATION

SUBCHAPTER A. CONTINUING PROFESSIONAL EDUCATION PURPOSE AND DEFINITIONS

22 TAC §523.102

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.102, concerning CPE Purpose and Definitions.

Background, Justification, and Summary

The amendment to §523.102 incorporates most of the recent changes to the Statement on Standards for Continuing Professional Education Programs (Standards) published jointly by the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA).

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 are consistent with national standards.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§523.102.CPE Purpose and Definitions.

(a) CPAs' fields of employment do not limit the need for continuing professional education. CPAs performing professional services need to have a broad range of knowledge, skills, and abilities. Continuing Professional Education will be referred to herein as CPE.

(b) The fundamental purpose of CPE is to help ensure that licensees participate in learning activities that maintain and improve their professional competence to serve in a competent manner. Courses the board regards as improving the licensee's professional competence include:

(1) "Technical Courses" are those courses pertaining to the profession of accounting. These courses include but are not limited to accounting, attest, tax, management advisory services, economics, finance, information technology, regulatory ethics, and other technical areas of benefit to a licensee and/or a licensee's employer; and

(2) "Non-Technical Courses" are those courses not meeting the definition of "technical courses" that increase the licensee's ability to serve in a competent manner, such as but not limited to communications, computer software and applications, behavioral ethics, behavioral science, business management and organization, [practice management] and advanced courses in foreign languages, all of which must relate and must benefit a licensee and/or a licensee's employer. Refer to §523.118 of this chapter (relating to Limitations of [Limitation for Non-Technical] Courses).

(c) Licensees may participate in a variety of sponsored learning programs [activities], such as live, self-study, nano learning, or blended learning programs ["live programs," or "self-study programs"].

(1) "Live programs" are those educational processes that are designed to permit a participant to learn a given subject through interaction with an instructor/facilitator and other participants either in a classroom or conference setting or by using the internet, which includes the following:

(A) Workshops, seminars, and conferences with substantial interaction by a qualified instructor/facilitator. [A sponsor will issue certificates of completion at the end of the class for licensees and attendees who participated in the program.]

(B) "Group self-study" programs that are based on self-study materials presented in a group format with substantial interaction from a qualified instructor/facilitator who is responsible for answering participants' questions or who leads the discussion of individual topics presented in the materials.

(C) "Webinars" are ["Webinar" is a] live online educational presentations [presentation] during which participating viewers can submit questions and comments.

(2) "Self-study programs" are those educational processes that are designed to permit a participant to learn a given subject by oneself using books and/or electronic media (internet and DVDs/CDs, for example) without [substantial] interaction with an instructor/facilitator. This type of program clearly defines learning objectives and manages the participant through the learning processes by requiring frequent response to questions that test for understanding of the material presented, providing evaluative feedback to incorrectly answered questions and correctly answered questions, and requiring the participant to pass a final exam that tests the participant's comprehension of the course materials. Refer to §523.140(e) of this chapter (relating to Program Standards).

(3) "Nano learning programs" are tutorial programs designed to permit a participant to learn a given subject in a 10-minute time frame through the use of electronic media (including technology applications and processes and computer-based or web-based technology) and without interaction with a real-time instructor. A nano learning program differs from a self-study program in that it is typically focused on a single learning objective and is not paper-based.

(4) "Blended programs" are programs incorporating multiple learning formats.

(d) "CPE credit" is 50 minutes of participation in a program of learning.

(e) Courses completed at an institution of higher education using semester credit hours shall earn 15 CPE credits for each passing semester credit hour and those institutions using quarter credit hours shall earn 10 CPE credits for each passing quarter credit hour, toward the requirement.

[(d) "Contact hour" means 50 minutes of continuous participation in a program. After the first contact hour has been earned in a given learning activity, one-half CPE credit increments (equal to 25 minutes) are permitted.]

[(e) "Credit hour" means the actual program length, with one 50-minute period equal to one contact hour. Credit hours for:]

[(1) continuous conferences and conventions, when individuals segments are less than 50 minutes, should be combined and counted as one total program. For example, five 30-minute presentations would equal 150 minutes and should be counted as three contact hours; and]

[(2) courses at an institution of higher education using semester hour credits equals 15 CPE hours and those institutions using quarter hour credits equals 10 CPE hours, toward the requirement.]

(f) "Sponsor" means an individual or organization offering programs to participants. The sponsor may or may not have developed the program materials. However, the sponsor is responsible for insuring the presentation of the learning objectives, through the program materials and maintaining the documentation required by these program standards.

(g) Staff meetings and other settings cannot be claimed for CPE credit if the programs do not meet program standards.

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 January 20, 2017.

TRD-201700286

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


SUBCHAPTER B. CONTINUING PROFESSIONAL EDUCATION RULES FOR INDIVIDUALS

22 TAC §523.110

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.110, concerning Establishment of Required CPE Program Standards.

Background, Justification, and Summary

The amendment to §523.110 deletes the phrase "credit hours" and replaces it with "credits" and revises the title of §523.118 to more accurately reflect the regulation.

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 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.

§523.110.Establishment of Required CPE Program Standards.

A licensee shall be responsible for ensuring that CPE credits [credit hours] claimed conform to the board's standards as outlined in:

(1) §523.111 regarding Required CPE Reporting;

(2) §523.112 regarding Required CPE Participation;

(3) §523.115 regarding Credits for Instructors and Discussion Leaders;

(4) §523.116 regarding Authors of Published Articles and Books;

(5) §523.118 regarding Limitations of [Limitation for Non-Technical] Courses;

(6) §523.119 regarding Alternative Sources of CPE; and

(7) §523.130 regarding Ethics Course Requirements.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 20, 2017.

TRD-201700287

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.111

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.111, concerning Required CPE Reporting.

Background, Justification and Summary

The amendment to §523.111 deletes the phrase "credit hours" and replaces it with "credits" and adds "or electronic record" in order to have a clearer understanding of acceptable evidence of CPE completion.

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§523.111.Required CPE Reporting.

(a) To receive or retain a license, a licensee shall earn and is responsible for the accurate reporting of the required CPE credits [credit hours] for the reporting period under §523.112 of this chapter (relating to Required CPE Participation) and §523.130 of this chapter (relating to Ethics Course Requirements).

(b) Licensees reporting CPE must document their participation and retain evidence of that documentation for the five most recent reporting periods, including:

(1) sponsor name and identification number;

(2) title or description of content, or both;

(3) date(s) of completion;

(4) location; and

(5) number of CPE credits [credit hours].

(c) Evidence of completion is the certificate or electronic record supplied by the sponsor. The board may verify CPE reported by licensees and licensees shall submit the supporting evidence to the board within a reasonable amount of time, if such data is requested.

(d) CPE credits [Credit hours] earned from sources other than registered sponsors should be submitted on the appropriate form, "Claiming Continuing Professional Education Credits from a Non-Registered Sponsor," justifying the reason the CPE credits [credit hours] are being claimed and the benefit to the licensee or the licensee's employer.

(e) A licensee who fails to report the minimum required CPE credits [credit hours] completed during the accrual period will be subject to suspension and his certificate may be revoked for failing to report the minimum required CPE credits [credit hours] for three consecutive 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 January 20, 2017.

TRD-201700288

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.112

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.112, concerning Required CPE Participation.

Background, Justification and Summary

The amendment to §523.112 deletes the word "hours" and replaces it with "CPE credits" or "credits" and makes other minor grammatical revisions.

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§523.112.Required CPE Participation.

(a) A licensee shall complete at least 120 CPE credits [hours of CPE] in each three-year period, and a minimum of 20 CPE credits [hours] in each one-year period.

(b) CPE, except as provided by board rule, shall be offered by board-contracted CPE sponsors.

(c) CPE requirements for the issuance or renewal of a license are as follows:

(1) Licensees who have been certified or registered for less than 12 months do not have a CPE credit [hour] requirement. The first license period begins on the date of certification and ends with the last day of the licensee's birth month.

(2) To be issued a license for the first full 12-month license period, the licensee does not have a CPE requirement [and can report zero hours]. CPE earned prior to the first 12-month license period will not be applied toward the three-year requirement.

(3) To be issued a license for the second full 12-month period, the licensee shall report a minimum of 20 CPE credits [hours]. The CPE credits [hours] shall be completed in the 12 months preceding the second year of licensing.

(4) To be issued a license for the third full 12-month license period, the licensee shall report a total of at least 60 CPE credits [hours] that were completed in the 24 months preceding the license period. At least 20 CPE credits [hours ] of the requirement shall be completed in the 12 months preceding the third year of licensing.

(5) To be issued a license for the fourth full 12-month period, the licensee shall report a total of at least 100 CPE credits [hours] that were completed in the 36 months preceding the license period. At least 20 CPE credits [hours] of the requirement shall be completed in the 12 months preceding the fourth year of licensing.

(6) To be issued a license for the fifth and subsequent license periods, the licensee shall report a total of at least 120 CPE credits [hours] that were completed in the 36 months preceding the license period, and at least 20 CPE credits [hours] of the requirement shall be completed in the 12 months preceding the fifth year of licensing.

(d) A former licensee whose certificate or registration has been revoked for failure to pay the license fee and who makes application for reinstatement shall pay the required fees and applicable late fees [penalties] and must report [complete ] the minimum CPE credits [credit hours] missed.

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 January 20, 2017.

TRD-201700289

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.113

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.113, concerning Exemptions from CPE.

Background, Justification and Summary

The amendment to §523.113 incorporates most of the recent changes to the Statement on Standards for Continuing Professional Education Programs (Standards) published jointly by the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA).

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 are consistent with national standards.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§523.113.Exemptions from CPE.

The board shall not issue or renew a license to an individual who has not earned the required CPE credits [credit hours] unless an exemption has been granted by the board.

(1) The board may consider granting an exemption from the CPE requirement during the period for which the exemption is requested on a case-by-case basis if:

(A) a licensee completes and forwards to the board an [a sworn] affidavit indicating that the licensee is [will] not [be] employed; or [during the period for which the exemption is requested;]

(B) a licensee completes and forwards to the board an [a sworn] affidavit indicating no association with accounting [work]. The affidavit shall include, as a minimum, a brief description of the duties performed, job title, and verification by the licensee's immediate supervisor. For purposes of this section, the term "association with accounting" shall include the following: [if applicable;]

[(i) For purposes of this section, the term "association with accounting work" shall include the following:]

(i) [(I)] working, providing oversight of accounting, or supervising work performed in the areas of financial accounting and reporting; tax compliance, planning or advice; management advisory services; accounting information systems; treasury, finance, or audit; or

(ii) [(II)] representing to the public, including an employer, that the licensee is a CPA or public accountant in connection with the sale of any services or products involving professional accounting services as defined in the Rules of Professional Conduct, §501.52(22) of this title (relating to Definitions), including such designation on a business card, letterhead, proxy statement, promotional brochure, advertisement, or office; or

(iii) [(III)] offering testimony in a court of law purporting to have expertise in accounting and reporting, auditing, tax, or management services; or

(iv) providing instruction in accounting courses; or

(v) [(IV)] for purposes of making a determination as to whether the licensee fits one of the categories listed in this clause [subclause] and clauses (i) - (iv) [subclauses (I) - (III)] of this subparagraph [clause], the questions shall be resolved in favor of including the work as having an association with accounting [professional accounting services].

[(ii) Prior to providing professional accounting services, a licensee who has been granted exemptions under paragraph (1)(A), (B), (C), (D), (E) and (F) of this section and the exemption is no longer applicable or has been granted retired or disability status under §515.8 of this title (relating to Retired or Disability Status) and no longer qualifies for retired or disability status shall be required to report CPE hours earned in the technical area as described in §523.102 of this chapter (relating to CPE Purpose and Definitions) and §523.130 of this chapter (relating to Ethics Course Requirements). Based on the CPE hours previously reported, the licensee must report the minimum number of required CPE hours as described in this section.]

(C) a licensee not residing in Texas, who submits an affidavit [a sworn statement] to the board that the licensee does not serve Texas clients from out of state;

(D) a licensee shows reasons of health, certified by a medical doctor, that prevent compliance with the CPE requirement. A licensee must petition the board for the exemption and provide documentation that clearly establishes the period of disability and the resulting physical limitations;

(E) a licensee is on active military duty during the period for which the exemption is requested, and files a copy of orders to active military duty with the board; or

(F) a licensee shows reason which prevents compliance that is acceptable to the board.

(2) A licensee who has been granted the retired or disability status under §515.8 of this title (relating to Retired or Disability Status) is not required to report any CPE credits [hours].

(3) A licensee who no longer meets the eligibility requirements for an exemption under this section or no longer qualifies for retired or disability status under §515.8 of this title shall be required to report sufficient CPE credits to be in compliance with §523.112 of this chapter (relating to Required CPE Participation). CPE credits shall be earned in the technical area as described in §523.102 of this chapter (relating to CPE Purpose and Definitions) and §523.130 of this chapter (relating to Ethics Course Requirements).

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 20, 2017.

TRD-201700290

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.114

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.114, concerning Disciplinary Actions Relating to CPE.

Background, Justification and Summary

The amendment to §523.114 deletes the phrase "credit hours" and replaces it with "credits."

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 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.

§523.114.Disciplinary Actions Relating to CPE.

(a) A licensee who fails to comply with the provisions of §523.130 of this chapter (relating to Ethics Course Requirements), §523.111 of this chapter (relating to Required CPE Reporting) or §523.112 of this chapter (relating to Required CPE Participation) may be subject to disciplinary action under the Act, for a violation of the Rules of Professional Conduct, §501.94 of this title (relating to Mandatory Continuing Professional Education), which requires compliance with §523.130 of this chapter, §523.111 of this chapter, and §523.112 of this chapter.

(b) A licensee who fails to report the minimum required CPE credits [credit hours completed during the accrual period] will be subject to suspension and his certificate may be revoked for failing to report the minimum required CPE credits [credit hours] for three consecutive years.

(c) The board may initiate disciplinary action as authorized in the Act if it finds evidence of falsification, fraud, or deceit in CPE documentation.

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 January 20, 2017.

TRD-201700291

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.115

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.115, concerning Credits for Instructors and Discussion Leaders.

Background, Justification and Summary

The amendment to §523.115 clarifies that multiple instructors shall receive proportional CPE credit when serving at a program and deletes the phrase "credit hours" and replaces it with "CPE credits."

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 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.

§523.115.Credits for Instructors and Discussion Leaders.

(a) When an instructor or discussion leader serves at a program for which participants receive credit and at a level that increases the instructor's or discussion leader's professional competence, credit may be given for preparation and presentation time measured in terms of CPE credits [credit hours].

(b) For the first time a program is presented, an instructor may receive up to three times the number of CPE credits [credit hours] approved for the program.

(c) For repetitious presentations, the instructor may receive credit only if it can be demonstrated that the subject matter involved was changed sufficiently to require significant additional study or research.

(d) The maximum credit for preparation and presentation in any one-year reporting period cannot exceed 20 CPE credits [hours].

(e) Multiple instructors shall receive proportional CPE credit.

(f) [(e)] An instructor cannot claim credit for teaching courses which are determined introductory level by the college or university.

(g) [(f)] If claiming CPE credit under this section, 50 percent of the CPE credits [credit hours] reported must be as a participant in a qualified CPE program in any three-year reporting period.

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 January 20, 2017.

TRD-201700292

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.116

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.116, concerning Authors of Published Articles and Books.

Background, Justification and Summary

The amendment to §523.116 clarifies that reviewers of published articles and books may receive CPE credits, deletes the phrase "credit hours" and replaces it with "CPE credits" or "credits," and deletes subsection (c) so it can be relocated to a more appropriate rule.

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 who may receive CPE credit and a clearer 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 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.

§523.116.Authors of Published Articles and Books.

(a) Authors and reviewers of published articles and books may claim CPE credits [credit hours] provided they increase the professional competence of the author or reviewer.

(b) Up to 10 CPE credits [credit hours] in any one-year reporting period may be claimed for preparation or review of such publications.

[(c) If claiming CPE credit under this section, 50 percent of the credit hours reported must be as a participant in a qualified CPE program in any three-year reporting period.]

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 January 20, 2017.

TRD-201700293

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.118

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.118, concerning Limitations of Courses.

Background, Justification and Summary

The amendment to §523.118 adds subsections (b) and (c) to clarify how many CPE credits can be awarded upon the completion of certain programs, revises the rule title and deletes the phrase "credit hours" and replaces it with "credits."

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 CPE credit awards and a clearer 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 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.

§523.118.Limitations of [Limitation for Non-Technical] Courses.

(a) A licensee may not claim more than 50 percent of the total CPE credits [credit hours] required from the non-technical area in a three-year reporting period.

(b) A licensee may not claim more than 50 percent of the total CPE credits required in a three-year reporting period from nano-learning programs.

(c) A licensee may not claim more than 50 percent of the total CPE credits required in a three-year reporting period from the successful completion of certification programs, such as a Certified Financial Planner, Certified Internal Auditor, Certified Fraud Examiner, other related financial certifications, and/or related financial securities licenses.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 20, 2017.

TRD-201700294

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.119

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.119, concerning Alternative Sources of CPE

Background, Justification and Summary

The amendment to §523.119 deletes the phrase "credit hours" and replaces it with "CPE credits" or "credits" and clarifies reporting of those credits.

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§523.119.Alternative Sources of CPE.

(a) CPE credits [Credit hours] earned from sources other than registered sponsors should be reported [claimed at the time the license renewal is submitted] on the appropriate form, "Claiming Continuing Professional Education Credit from a Non-Registered Sponsor," justifying the reason the CPE credits [credit hours] are being claimed.

(b) Licensees may not claim more than 50 percent of the total CPE credits [credit hours] from non-registered sponsors in any three-year reporting period.

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 January 20, 2017.

TRD-201700295

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.121

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.121, concerning CPE for Non-CPA Owners.

Background, Justification and Summary

The amendment to §523.121 deletes the word "hours" and replaces it with "CPE credits" or "credits."

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§523.121.CPE for Non-CPA Owners.

(a) This section applies only to non-CPA owners who are residents of this state.

(b) Each non-CPA owner of a licensed CPA firm shall complete 120 CPE credits [hours of CPE] in each three-year period with a minimum of 20 CPE credits [hours ] in each one-year period. These CPE credits [hours ] shall be reported on the required board forms. The failure of any non-CPA owner of a licensed CPA firm to complete and report such CPE shall be grounds for revoking the firm's license on the grounds that the owner is not qualified.

(c) The board will accept CPE that is offered or accepted by organizations or regulatory bodies issuing professional designation used by the non-CPA owner. All other CPE must be provided by board-accepted CPE sponsors or be otherwise approved by the board, provided however, that the board reserves the right to reject any claimed CPE.

(d) Each non-CPA owner, prior to, or within 60 days of, acquiring any ownership interest in a licensed CPA firm, shall complete an exam on the board's Rules of Professional Conduct and complete a board-approved ethics course in accordance with §523.130 of this chapter (relating to Ethics Course Requirements).

(e) Each non-CPA owner must take a four CPE credit [hour] ethics course that has been approved by the board pursuant to §523.131 of this chapter (relating to Board Approval of Ethics Course Content) every two years. The non-CPA owner shall report completion of the course on the required board forms at least every second year.

(f) The board has the right to verify any CPE credits [hours] reported. A firm shall provide the board all information required for this verification in accordance with §501.93 of this title (relating to Responses), and the firm shall be responsible for its non-CPA owner's cooperation with the verification.

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 January 20, 2017.

TRD-201700296

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


SUBCHAPTER C. ETHICS RULES: INDIVIDUALS AND SPONSORS

22 TAC §523.130

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.130, concerning Ethics Course Requirements.

Background, Justification and Summary

The amendment to §523.130 deletes the word "hour" and replaces it with "CPE credit" and deletes the phrase "if due" in subsection (c).

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§523.130.Ethics Course Requirements.

(a) An applicant for certification or registration must complete a board-approved four CPE credit [hour] ethics course designed to thoroughly familiarize the applicant with the board's Rules of Professional Conduct no more than two years prior to submission of the application. Proof of completion of this course must be submitted with the application.

(b) A licensee must take a four CPE credit [hour] ethics course that has been approved by the board pursuant to §523.131 of this chapter (relating to Board Approval of Ethics Course Content) every two years. The licensee shall report completion of the course on the annual license renewal notice at least every second year.

(c) A licensee granted retired, permanent disability, or other exempt status is not required to complete the ethics course during the licensee's exempt status. If the exempt status is no longer applicable, the licensee must complete an ethics course approved by the board and report it on the annual license renewal notice [if due].

(d) A licensee must take the ethics course in a program as defined in §523.102 of this chapter (relating to CPE Purpose and Definitions).

(e) A person who does not reside in the state of Texas, who has no clients within this state, and who is current with the ethics course requirements of his state of residence is not required to take the ethics course mandated. A person meeting these requirements may claim an exemption pursuant to §523.113 of this chapter (relating to Exemptions from CPE).

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 January 20, 2017.

TRD-201700297

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.131

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.131, concerning Board Approval of Ethics Course Content.

Background, Justification, and Summary

The amendment to §523.131 deletes the word "hour" and replaces it with "CPE credit" and makes a grammatical change in subsection (b)(3).

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§523.131.Board Approval of Ethics Course Content.

(a) The content of an ethics course designed to satisfy the four CPE credit [hour] ethics CPE requirements of §523.130 of this chapter (relating to Ethics Course Requirements) must be submitted to the CPE committee of the board for initial approval and upon request thereafter. The primary objectives of the ethics course shall be to:

(1) encourage the licensee to become educated in the ethics of the profession;

(2) convey the intent of the board's Rules of Professional Conduct in the licensee's performance of professional accounting services, and not mere technical compliance;

(3) apply ethical judgment in interpreting the rules and provide for a clear understanding of the public interest. The public interest shall be placed ahead of self-interest, even if it means a loss of job or client;

(4) emphasize the ethical standards of the profession, as described in this section; and

(5) review and discuss the board's Rules of Professional Conduct and their implications for persons in a variety of practices, including at least one example from subparagraph (A) of this paragraph and at least one example from either subparagraph (B) or (C) of this paragraph:

(A) a licensee engaged in the client practice of public accountancy who performs attest and non-attest services, as defined in §501.52 of this title (relating to Definitions); and

(B) a licensee employed in industry who provides internal accounting and auditing services; or

(C) a licensee employed in education or in government accounting or auditing.

(b) To meet the objectives of subsection (a) of this section, a course must be four hours in length and its components should be approximately:

(1) 25% on ethical principles and values;

(2) 25% on ethical reasoning and dilemmas;

(3) 15% on the board's Rules of Professional Conduct with special focus on recent changes in those rules and including information on the peer assistance available to Texas CPAs, CPA candidates and accounting students with alcohol or other[,] substance abuse, depression, stress or other mental health issues through the Accountants Confidential Assistance Network (ACAN); and

(4) 35% on case studies that require application of ethical principles, values, and ethical reasoning within the context of the board's Rules of Professional Conduct.

(c) Course content shall be approved only after demonstrating, either in a live instructor format, a blended program format, or interactive (computer based) format, as defined in §523.102(c)(1) of this chapter (relating to CPE Purpose and Definitions), that the course contains the underlying intent established in the following criteria:

(1) the course shall be designed to teach CPAs to achieve and maintain the highest standards of ethical conduct through ethical reasoning and the core values of the profession: integrity, objectivity, and independence, as ethical principles in addition to rules of conduct;

(2) the course shall address ethical considerations and the application of the board's Rules of Professional Conduct to all aspects of the professional accounting work whether performed by CPAs in client practice or CPAs who are not in client practice; and

(3) the course shall convey the spirit and intent of the board's Rules of Professional Conduct in the licensee's performance of accounting services, and not mere technical compliance.

(d) Ethics courses must be taught in one single four-hour session, including one 10-minute break each hour or its equivalent.

(e) Ethics courses may be reevaluated every three years or as required by the CPE committee. Updated versions of the course and any other course materials, such as course evaluations, shall be provided when requested by the committee for the course to be continued as an approved course.

(f) At the conclusion of each course, the sponsor shall administer a test to determine whether the program participants have obtained a basic understanding of the course content, including the need for a high level of ethical standards in the accounting profession.

(g) A sponsor of an ethics course approved by the board pursuant to this section shall comply with the board's rules concerning sponsors of CPE and shall provide its advertising materials to the board's CPE committee for approval. Such advertisements shall:

(1) avoid commercial exploitation;

(2) identify the primary focus of the course; and

(3) be professionally presented and consistent with the intent of §501.82 of this title (relating to Advertising).

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 January 20, 2017.

TRD-201700298

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.132

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.132, concerning Board Contracted Ethics Instructors.

Background, Justification and Summary

The amendment to §523.132 eliminates the requirement for ethics training for instructors and a minor clerical change in subsection (b)(1).

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 on the required training of instructors.

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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 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.

§523.132.Board Contracted Ethics Instructors.

(a) The board may contract with any instructor wishing to offer an ethics course approved by the board pursuant to §523.131 of this chapter (relating to Board Approval of Ethics Course Content) who can demonstrate that:

(1) the instructor is a CPA licensed in Texas or that the instructor is team teaching with a CPA licensed in Texas [and has completed the board's ethics training program as required by the board];

(2) the instructor has never been disciplined for a violation of the board's Rules of Professional Conduct unless waived by the board; and

(3) the instructor is qualified to teach ethical reasoning because he has:

(A) experience in the study and teaching of ethical reasoning; and

(B) formal training in organizational or ethical behavior instruction.

(b) An instructor demonstrates that he is qualified to teach ethical reasoning upon evidence that he has:

(1) at the time of his application obtained sufficient education in ethics substantially equivalent to a minimum of six [6] hours of credit from a university, college or community college, of which at least three credit hours must be in organizational ethics or other education as approved by the board;

(2) teaching experience that is substantially equivalent to two or more full time semesters teaching experience at a university, college or community college, or other experience as approved by the board;

(3) spent at least 10 years performing accountancy related activities as a licensed CPA;

(4) no record of discipline for violation of the rules of professional conduct of the AICPA, the TSCPA or other national or state accountancy organization recognized by the board; and

(5) goals and interests consistent with the board's purpose of protecting the public interest pursuant to the provisions of the Act.

(c) An instructor must renew the contract with the board every three years.

(d) The board may refuse to contract, refuse to renew a contract or cancel the contract of any instructor who has engaged in conduct rendering that instructor unsuitable for teaching ethics.

(e) An instructor must submit a current resume with the contract.

(f) Interpretive comments: To have goals and interests consistent with the board's purpose of protecting the public interest pursuant to the provisions of the Act, an instructor must refrain from using the instruction of an ethics course as a marketing tool for other products and services offered by the instructor. An instructor must be free from conflicts of interest with the board in both fact and appearance. Representation of a respondent or a complainant in a disciplinary proceeding pending before the board creates the appearance of a conflict of interest.

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 January 20, 2017.

TRD-201700299

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


SUBCHAPTER D. STANDARDS FOR CONTINUING PROFESSIONAL EDUCATION PROGRAMS AND RULES FOR SPONSORS

22 TAC §523.140

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.140, concerning Program Standards.

Background, Justification and Summary

The amendment to §523.140 incorporates recent changes made to the Statement on Standards for Continuing Professional Education Programs (Standards) published jointly by the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA).

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 are consistent with national standards.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 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.

§523.140.Program Standards.

(a) Potential participants [Participants] should be informed in advance of course content, learning objectives, prerequisites, and recommended credits [credit hours] so they [potential participants] 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 [prerequisite is necessary], 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 §523.143(b) of this chapter (relating to Sponsor's Record). The final program must contain sufficient documentation to support the number of CPE credits [credit hours] granted. [The stated learning objectives should clearly communicate the specific concepts and/or outcomes of the program.] 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 §523.141 of this chapter (relating to Evaluation).

(e) Self-study programs must conform to the requirements outlined in §523.102(c)(2) of this chapter (relating to CPE Purpose and Definitions). [and shall include at least five questions after each learning objective (section/chapter). The final exam shall have at least five questions per hour of CPE credit granted. No more than 25% of final exam questions may be "true/false" in nature.]

(1) Program must include at least five review questions, 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 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. [Sponsors are responsible for ensuring the participants register their attendance during the program. Sponsors are responsible for assigning the appropriate number of credit hours for participants, including reduced hours for those participants who arrive late or leave early. Refer to §523.142 of this chapter (relating to Program Time Credit Measurement for Sponsors).]

(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. [Sponsors must comply with all CPE rules including §523.143 of this chapter.]

(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 (ie. 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 §523.142 of this chapter (relating to Program Time Credit Measurement for Sponsors).

(i) Sponsors must comply with all CPE rules including §523.143 of this chapter.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 20, 2017.

TRD-201700300

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.141

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.141, concerning Evaluation.

Background, Justification and Summary

The amendment to §523.141 incorporates changes recently made to the Statement on Standards for Continuing Professional Education Programs (Standards) published jointly by the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA).

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 are consistent with national standards.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 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.

§523.141.Evaluation.

(a) All programs shall include a process for evaluating quality by [both] participants [and instructors] to determine whether:

(1) objectives have been met;

(2) prerequisites were necessary or desirable;

(3) facilities were satisfactory;

(4) the instructor(s) was effective. If multiple instructors taught the course each must be evaluated for effectiveness; [and]

(5) the program content was timely and effective; and[.]

(6) time allotted to the program was adequate.

(b) Evaluations shall consist of evaluation forms or questionnaires upon completion of the program.

(c) Instructors shall be informed of their performance, and sponsors should systematically review the evaluation process to ensure its effectiveness.

(d) Sponsors are responsible for collecting evaluation forms from CPA participants.

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 January 20, 2017.

TRD-201700301

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.142

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.142, concerning Program Time Credit Measurement for Sponsors.

Background, Justification, and Summary

The amendment to §523.142 incorporates recent changes to the Statement on Standards for Continuing Professional Education Programs (Standards) published jointly by the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA).

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 are consistent with national standards.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§523.142.Program Time Credit Measurement for Sponsors.

(a) Sponsored learning activities are measured by actual program length, with one 50-minute period equal to one CPE credit. Sponsors may recommend CPE credits under the following scenarios: [All programs shall be measured in terms of 50-minute contact hours. A contact hour is 50 minutes of continuous participation in a program. One-half CPE credit increments (equal to 25 minutes) are permitted after the first contact hour has been earned in a given learning activity.]

(1) Live and blended learning programs--A minimum of one full credit must be awarded initially, but after the first credit has been earned, credits may be awarded in one-fifth increments or in one-half increments (1.0, x.2, x.4, x.5, x.6, x.8, and so on).

(2) Self- study--A minimum of one-half credit must be awarded initially, but after the first full credit has been earned, credits may be awarded in one-fifth increments or in one-half increments (0.5, 1.0, x.2, x.4, x.5, x.6, x.8, and so on).

(3) Nano learning--Credits must be awarded only as one-fifth credit (0.2 credit). A 20-minute program would have to be produced as two stand-alone nano learning programs.

(b) Self-study programs shall be pre-tested to determine average completion time. A minimum of three pre-testers must be used to determine the CPE credits for the course. [For continuous conferences and conventions, when individual segments are less than 50 minutes, the sum of the segments shall be considered one total program. For example, five 30-minute presentations would equal 150 minutes and shall be counted as three contact hours.]

(c) The total CPE credits for a continuous program cannot exceed the actual time spent in the program. Continuous conferences and conventions, when individual segments are less than 50 minutes, should be combined and counted as one total program. For example, five 30-minute presentations would equal 150 minutes and should be counted as three CPE credits. [For university or college courses, each semester hour credit shall equal 15 CPE hours toward the requirement. A quarter hour credit shall equal 10 CPE hours.]

(d) Sponsors may round down CPE credits awarded to the nearest one-fifth, one-half, or whole credit at their discretion and as appropriate for the instructional delivery method. [Sponsors are responsible for assigning the appropriate number of CPE credits earned.]

(e) Only learning content portions of programs (including pre-program, post-program, and homework assignments, when incorporated into a blended learning program) qualify toward eligible credit amounts. Time for activities outside of actual learning content, including, for example, excessive welcome and introductions, housekeeping instructions, and breaks are not accepted toward credit. [Self-study programs shall be pre-tested to determine average completion time. A minimum of three pre-testers must be used to determine the CPE credit hours for the course.]

(f) For programs with individual segments that are less than 50 minutes, the sum of the segments would be considered one total program. For example, five 30-minute presentations would equal 150 minutes and would be counted as three CPE credits. When the total minutes of a sponsored program are greater than 50, but not equally divisible by 50, the CPE credits granted must be rounded down to the nearest credit basis depending on the instructional delivery method of the program. For example, a group live program must be rounded down to the nearest one-fifth, one-half, or whole credit. Thus, programs with segments totaling 140 minutes would be granted two and four-fifths CPE credits if using one-fifth increments and two and one-half credits if using one-half increments. [The total CPE credit hours for a continuous program cannot exceed the actual time spent in the program.]

(g) The CPE sponsor is responsible for monitoring attendance. While it is the participant's responsibility to report the appropriate number of credits earned, CPE program sponsors must maintain a process to monitor individual attendance at group programs to assign the correct number of CPE credits. A participant's self-certification of attendance alone is not sufficient.

(h) Monitoring mechanism for group Internet based programs. In addition to meeting all other applicable group program standards and requirements, group Internet based programs must employ some type of real time monitoring mechanism to verify that participants are participating during the course. The monitoring mechanism must be of sufficient frequency and lack predictability to ensure that participants have been engaged throughout the program. The monitoring mechanism must employ at least three instances of interactivity completed by the participant per CPE credit.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 20, 2017.

TRD-201700302

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.143

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.143, concerning Sponsor's Record.

Background, Justification, and Summary

The amendment to §523.143 incorporates recent changes to the Statement on Standards for Continuing Professional Education Programs (Standards) published jointly by the American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA).

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 are consistent with national standards.

There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy.

Small Business and Micro-Business Impact Analysis

Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required.

Public Comment

Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151, 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.

§523.143.Sponsor's Record.

(a) In order to support the reports required of participants, the sponsor of group live, or self-study, nano, or blended programs [programs,] shall retain the following records:

(1) record of participation, e.g., sign-in sheet reflecting the CPE credits [credit hours] earned by each participant including those who arrive late or leave early;

(2) course program, including electronic media [recommended credit hours], as required by §523.140(b) of this chapter (relating to Program Standards);

(3) all promotional materials, including date(s) and location; [documentation as required by §523.140 of this chapter and:]

[(A) all promotional materials;]

[(B) date(s); and]

[(C) location.]

(4) instructor's [instructor, including] resume or biography;

(5) evaluation of program as directed in §523.141(b) of this chapter (relating to Evaluation);

(6) pre-test data for self-study courses; and

(7) all final exams completed by participants for self-study courses.

(b) Documentation shall be retained for five years from the date the program is completed.

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 January 20, 2017.

TRD-201700303

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.144

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.144, concerning Board Registered CPE Sponsors.

Background, Justification and Summary

The amendment to §523.144 makes a minor grammatical change in subsection (b).

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 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.

§523.144.Board Registered CPE Sponsors.

(a) The board may enter into an agreement with any sponsor of CPE programs to become a board registered CPE sponsor where the sponsor, in the opinion of the board, demonstrates that it will comply with its obligations to the board and that its programs will conform to the board's standards as outlined in:

(1) §523.115 of this chapter (relating to Credits for Instructors and Discussion Leaders);

(2) §523.130 of this chapter (relating to Ethics Course Requirements), (if applicable);

(3) §523.140 of this chapter (relating to Program Standards);

(4) §523.141 of this chapter (relating to Evaluation); and

(5) §523.142 of this chapter (relating to Program Time Credit Measurement for Sponsors).

(b) The board will also require that each organization applying to become a board registered CPE sponsor agrees [agree] that in the conduct of its business it will:

(1) Not commit fraud, deceit or engage in fiscal dishonesty of any kind;

(2) Not misrepresent facts or make false or misleading statements;

(3) Not make false statements to the board or to the board's agents; and

(4) Comply with the laws of the United States and the State of Texas.

(c) Each organization applying to become a board registered CPE sponsor must submit an application on registration forms provided by the board. The application must be complete in all respects and must be accompanied with payment of a non-refundable registration fee unless the sponsor is exempt from paying the fee in accordance with this rule. Sponsors that offer regularly scheduled course titles that are at least one hour and up to four hours in length may accumulate these course titles into an eight-hour course block when determining fees. A maximum of 24 hours may be accumulated into three eight-hour course blocks. Refer to interpretative comment in subsection (j) of this section for explanation. The registration fee is based on the number of course titles offered and is identified in the following chart:

Figure: 22 TAC §523.144(c) (No change.)

(d) To qualify for an exemption from the annual registration fee a sponsor must be:

(1) a state, federal or other governmental agency that provides CPE for its employees and others at no charge;

(2) a sponsor registered and in good standing with NASBA's National Registry of CPE Sponsors;

(3) an institution of higher education whose courses are accepted for transfer credit by the reporting institution in the State of Texas. Other than courses acceptable for transfer credit, continuing education does not qualify for the exemption whether offered through an institute of higher education or through an educational foundation operating within such an institution; or

(4) subject to the board's discretion, sponsors' courses that are subject to review by another entity may apply for an exemption from fees.

(e) Sponsors that are exempt from paying the registration fee shall annually register with the board.

(f) The board will not prorate the registration payment for an organization for less than one year. Upon renewal in the second and succeeding years, the registration amount may be increased to cover the costs of review of sponsors and individual courses.

(g) Board staff will review each application and notify the sponsor of its acceptance or rejection. Accepted sponsors will be assigned a sponsor number and can represent that they are a board registered CPE sponsor. An acceptance in any given year shall not bind the board to accept a sponsor in any future year.

(h) After the registration has been accepted, the board, in its sole and exclusive discretion, may determine that a registered sponsor is not in compliance with the registration requirements, CPE standards or applicable board rules. The board will provide the registered sponsor reasonable notice of such a determination and shall provide the registered sponsor a reasonable opportunity to become compliant. If the board determines the sponsor is not in compliance, the board may request that the sponsor make changes or the board may terminate the sponsor's registration. A sponsor that has had its registration terminated or has voluntarily surrendered its registration may apply for reinstatement after the first anniversary of the date of termination. The registration fee shall not be prorated or refunded if the registration is terminated.

(i) A sponsor that requests reinstatement may do so by submitting a completed application and paying the fee provided for in subsection (c) of this section. The application for reinstatement must be accompanied with a list of the course(s) proposed to be offered. From that list the board will select one or more courses that must successfully pass the review pursuant to §523.147 of this chapter (relating to Sponsor Review Program), before any course can be offered.

(j) A CPE sponsor registration is renewable annually by submitting a renewal application and paying the registration fee unless stated in subsection (d) of this section.

(k) Interpretive Comment: In applying the fee structure to courses, it is deemed that small practice groups and sponsors that provide lectures and seminars on a regular basis are allowed to accumulate course titles that are at least one hour and up to four hours in length into one eight-hour course block. The maximum number of groupings of courses is limited to three eight-hour course blocks of 24 hours of qualified courses.

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 January 20, 2017.

TRD-201700304

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842


22 TAC §523.145

The Texas State Board of Public Accountancy (Board) proposes an amendment to §523.145, concerning Obligations of the Sponsor.

Background, Justification and Summary

The amendment to §523.145 deletes the phrase "credit hours" and replaces it with "CPE credits."

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 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 78701 or faxed to his attention at (512) 305-7854, no later than noon on March 3, 2017.

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, §2006.002(c).

Statutory Authority

The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, §901.151 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.

§523.145.Obligations of the Sponsor.

(a) Sponsors shall comply with the program standards as stated in §523.140 of this chapter (relating to Program Standards).

(b) In consideration for registering as a CPE sponsor each organization shall certify in writing, to the following:

(1) "We understand that after acceptance of the application or reapplication for a registration by the board we may advise prospective attendees of the program sponsor registration, our sponsor number, and the number of CPE credits [credit hours] recommended. We further agree that if we notify licensees of this registration we shall do so by use of the following language, 'We are registered with the Texas State Board of Public Accountancy as a CPE sponsor. This registration does not constitute an endorsement by the board as to the quality of our CPE program.'"

(2) "We understand that our advertising shall not be false or misleading, nor will our conduct in an effort to promote our services be coercive, overreaching, vexatious or harassing. We understand it is a violation of these rules for us to persist in contacting a licensee when the licensee has made known to us, or we should have known, the licensee's desire not to be contacted by us or our representative."

(3) "We agree that parties designated by the board may inspect our facilities, examine our records, attend our courses or seminars at no charge, and review our program to determine compliance with the sponsor registration requirements, CPE standards and applicable board rules."

(4) "We understand and agree that if we fail to comply with the registration requirements or fail to meet acceptable standards in our programs, the sponsor registration may be terminated at any time by the board, the sponsor registration or renewal application may be denied, and notice of such termination or denial may be provided to licensees by the board."

(c) Every board registered CPE sponsor shall cooperate fully with the board's sponsor review program. At least every three years a sponsor shall undergo a sponsor review. This cooperation shall include, but not be limited to providing information, records and access to programs and instructors as requested. Failure to cooperate with the program shall be grounds for terminating the registration.

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 January 20, 2017.

TRD-201700305

J. Randel (Jerry) Hill

General Counsel

Texas State Board of Public Accountancy

Earliest possible date of adoption: March 5, 2017

For further information, please call: (512) 305-7842