TITLE 40. SOCIAL SERVICES AND ASSISTANCE

PART 20. TEXAS WORKFORCE COMMISSION

CHAPTER 809. CHILD CARE SERVICES

The Texas Workforce Commission (TWC) proposes amendments to the following sections of Chapter 809, relating to Child Care Services:

Subchapter B. General Management, §809.15 and §809.20

Subchapter D. Parent Rights and Responsibilities, §809.71

Subchapter E. Requirements to Provide Child Care, §§809.91, 809.93, and 809.94

Subchapter G. Texas Rising Star Program, §809.132

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

Senate Bill (SB) 781, 86th Texas Legislature, Regular Session (2019), amended §42.071 of the Human Resources Code to discontinue evaluation as a corrective action for the Texas Health and Human Services Commission's (HHSC) Child Care Licensing (CCL) staff to impose on a licensed child care facility or family home. Effective September 1, 2019, CCL will either recommend a voluntary plan of action or place a facility on probation as corrective action when needed.

The amendments to TWC Chapter 809 Child Care Services rules remove references to evaluation as a corrective action to align with Chapter 42 of the Human Resources Code as amended by SB 781.

Additionally, House Bill (HB) 5, 85th Texas Legislature, Regular Session (2017), reorganized several functions within the HHSC umbrella. Included in this reorganization was the transfer of CCL from the Texas Department of Family and Protective Services (DFPS) to HHSC. These rule amendments change references throughout Chapter 809 to reflect the transfer of CCL from DFPS to HHSC.

Finally, §658E(c)(4) of the Child Care and Development Block Grant Act (2014) and 45 Code of Federal Regulations (CFR) §98.45 require state Child Care and Development Fund (CCDF) lead agencies to conduct a market rate survey (MRS) of child care rates and to use market rate data to set direct care reimbursement rates. States must ensure equal access to child care services for children participating in child care subsidies by setting direct care reimbursement rates that are sufficient to provide comparable services to those received by families that do not receive assistance.

As the CCDF lead agency for Texas, TWC conducts an annual MRS to analyze and summarize child care market rate data for the state and for the 28 Local Workforce Development Boards (Boards). Section 809.20, Maximum Provider Reimbursement Rates, authorizes Boards to set reimbursement rates for their local workforce development areas (workforce areas) based on local factors, including the MRS, and to ensure that the rates provide equal access to child care.

The US Department of Health and Human Services Office of Inspector General (OIG) recently released a report--States' Payment Rates Under the Child Care and Development Fund Program Could Limit Access to Child Care Providers--in which OIG found that many states were not setting their child care reimbursement rates at a level sufficient to ensure that eligible children have equal access to child care services that are comparable to services available to children whose parents are not eligible to receive child care assistance. OIG recommended that Office of Child Care (OCC) evaluate whether states are ensuring equal access for families in the CCDF program, as required by statute.

OCC concurred with OIG's recommendation and prioritized review of equal access requirements in its review of CCDF State Plans. Based on the review, OCC placed 33 states on Corrective Action Plans (CAPs) for not achieving equal access requirements, with 21 of those based specifically on inadequate rates.

OCC notified states at the 2019 State and Territories Administrators Meeting that CAPs were implemented for states whose rates were at or below the 25th percentile of the market rate, as determined by a statistically valid MRS. OCC also notified states that it would be reevaluating the 25th percentile "floor" on an ongoing basis, and states can expect OCC to raise the floor over time to improve equal access to child care services.

Based on OCC's actions to place states on CAPs for equal access if they fail to meet a minimum floor for their rates, on September 24, 2019, TWC's three-member Commission (Commission) took action to ensure that Boards' maximum reimbursement rates are set at a level adequate to ensure equal access as set forth in the CCDF regulations at 45 CFR §98.45 Equal Access. Specifically, the Commission directed staff to develop guidance--subsequently issued through Workforce Development Letter 23-19, issued on October 15, 2019, and titled "Child Care Provider Maximum Reimbursement Rate Increases"--requiring Boards to set their maximum reimbursement rate at or above the 30th percentile of the 2019 MRS, in compliance with §809.20(a), which requires that rates provide equal access to child care.

Section 809.20 authorizes Boards to establish maximum provider reimbursement rates and to ensure that the rates provide equal access to child care. To further support the federal requirement of equal access, §809.20 is amended to require Boards to establish maximum reimbursement rates at or above a level established by the Commission.

PART II. EXPLANATION OF INDIVIDUAL PROVISIONS

(Note: Minor editorial changes are made that do not change the meaning of the rules and, therefore, are not discussed in the Explanation of Individual Provisions.)

SUBCHAPTER B. GENERAL MANAGEMENT

TWC proposes the following amendments to Subchapter B:

§809.15. Promoting Consumer Education

Section 809.15 is amended to change "DFPS" to "CCL" to reflect the transfer of CCL from DFPS to HHSC.

§809.20. Maximum Provider Reimbursement Rates

Section 809.20(a) is amended to require Boards to establish maximum reimbursement rates for child care subsidies at or above a level established by the Commission. The purpose of the rule amendment is to ensure that Boards' maximum reimbursement rates are set at a level adequate to enable equal access to subsidized child care services as set forth in the CCDF regulations at 45 CFR §98.45 Equal Access.

Section 809.20 is also amended to change "DFPS" to "CCL" to reflect the transfer of CCL from DFPS to HHSC.

SUBCHAPTER D. PARENT RIGHTS AND RESPONSIBILITIES

TWC proposes the following amendments to Subchapter D:

§809.71. Parent Rights

Section 809.71 is amended to change "DFPS" to "CCL" to reflect the transfer of CCL from DFPS to HHSC.

SUBCHAPTER E. REQUIREMENTS TO PROVIDE CHILD CARE

TWC proposes the following amendments to Subchapter E:

§809.91. Minimum Requirements for Providers

Section 809.91 is amended to change "DFPS" to "CCL" to reflect the transfer of CCL from DFPS to HHSC.

§809.93. Provider Reimbursement

Section 809.93 is amended to change "DFPS" to "CCL" to reflect the transfer of CCL from DFPS to HHSC.

§809.94. Providers Placed on Corrective or Adverse Action by the Texas Department of Family and Protective Services

Section 809.94 is amended to remove references to evaluation as a corrective action to align with Chapter 42 of the Human Resources Code as amended by SB 781. Specifically, §809.94(a), regarding providers placed on evaluation by CCL, is removed and subsequent subsections are relettered accordingly.

Section 809.94 is also amended to change "DFPS" to "CCL" to reflect the transfer of CCL from DFPS to HHSC.

SUBCHAPTER G. TEXAS RISING STAR PROGRAM

TWC proposes the following amendments to Subchapter G:

§809.132. Impact of Certain Deficiencies on TRS Certification

Section 809.132 is amended to change "DFPS" to "CCL" to reflect the transfer of CCL from DFPS to HHSC.

PART III. IMPACT STATEMENTS

Chris Nelson, Chief Financial Officer, has determined that for each year of the first five years that the rules will be in effect, the following statements will apply:

There are no additional estimated costs to the state and to local governments expected as a result of enforcing or administering the rules.

There are no estimated cost reductions to the state and to local governments as a result of enforcing or administering the rules.

There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rules.

There are no foreseeable implications relating to costs or revenue of the state or local governments as a result of enforcing or administering the rules.

There are no anticipated economic costs to individuals required to comply with the rules.

There is no anticipated adverse economic impact on small businesses, microbusinesses, or rural communities as a result of enforcing or administering the rules.

Based on the analyses required by Texas Government Code §2001.024, TWC has determined that the requirement to repeal or amend a rule, as required by House Bill 1290, 85th Texas Legislature, Regular Session (2017)--to be codified at Texas Government Code §2001.0045--does not apply to this rulemaking.

Takings Impact Assessment

Under Texas Government Code, §2007.002(5), "taking" means a governmental action that affects private real property, in whole or in part or temporarily or permanently, in a manner that requires the governmental entity to compensate the private real property owner as provided by the Fifth and Fourteenth Amendments to the United States Constitution or the Texas Constitution, §17 or §19, Article I, or restricts or limits the owner's right to the property that would otherwise exist in the absence of the governmental action, and is the producing cause of a reduction of at least 25 percent in the market value of the affected private real property, determined by comparing the market value of the property as if the governmental action is not in effect and the market value of the property determined as if the governmental action is in effect. The Commission completed a Takings Impact Analysis for the proposed rulemaking action under Texas Government Code, §2007.043. The primary purpose of this proposed rulemaking action, as discussed elsewhere in this preamble, is to:

--ensure that Boards' maximum reimbursement rates are set at a level adequate to enable equal access to subsidized child care services as set forth in the CCDF regulations at 45 CFR §98.45 Equal Access;

--remove references to evaluation as a corrective action to align with Chapter 42 of the Human Resources Code as amended by SB 781; and

--change references throughout Chapter 809 to reflect the transfer of CCL from DFPS to HHSC.

The proposed rulemaking action will not create any additional burden on private real property. The proposed rulemaking action will not affect private real property in a manner that would require compensation to private real property owners under the United States Constitution or the Texas Constitution. The proposal also will not affect private real property in a manner that restricts or limits an owner's right to the property that would otherwise exist in the absence of the governmental action. Therefore, the proposed rulemaking will not cause a taking under Texas Government Code, Chapter 2007.

Government Growth Impact Statement

TWC has determined that during the first five years that the proposed amendments will be in effect:

--the proposed amendments will not create or eliminate a government program;

--implementation of the proposed amendments will not require the creation or elimination of employee positions;

--implementation of the proposed amendments will not require an increase or decrease in future legislative appropriations to TWC;

--the proposed amendments will not require an increase or decrease in fees paid to TWC;

--the proposed amendments will not create a new regulation;

--the proposed amendments will not expand, limit, or eliminate an existing regulation;

--the proposed amendments will not change the number of individuals subject to the rules; and

--the proposed amendments will not positively or adversely affect the state's economy.

Economic Impact Statement and Regulatory Flexibility Analysis

TWC has determined that the proposed rule will not have an adverse economic impact on small businesses or rural communities, as these proposed rules place no requirements on small businesses or rural communities.

Mariana Vega, Director of Labor Market and Career Information, has determined that there is no significant negative impact upon employment conditions in the state as a result of the rules.

Reagan Miller, Director, Division of Child Care & Early Learning, has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the proposed rules will be to ensure that Boards' maximum child care reimbursement rates are set at a level adequate to enable equal access to subsidized child care services as set forth in the CCDF regulations at 45 CFR §98.45 Equal Access.

TWC hereby certifies that the proposal has been reviewed by legal counsel and found to be within TWC's legal authority to adopt.

PART IV. COORDINATION ACTIVITIES

In the development of these rules for publication and public comment, TWC sought the involvement of Texas' 28 Boards. TWC provided the concept paper regarding these rule amendments to the Boards for consideration and review on October 30, 2019. During the rulemaking process, TWC considered all information gathered in order to develop rules that provide clear and concise direction to all parties involved.

Comments on the proposed rules may be submitted to TWC Policy Comments, Workforce Program Policy, Attn.: Workforce Editing, 101 East 15th Street, Room 459T, Austin, Texas 78778; faxed to (512) 475-3577; or emailed to TWCPolicyComments@twc.state.tx.us. Comments must be received or postmarked no later than 30 days from the date this proposal is published in the Texas Register.

SUBCHAPTER B. GENERAL MANAGEMENT

40 TAC §809.15, §809.20

The rules are proposed under Texas Labor Code §301.0015 and §302.002(d), which provide TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rules affect Texas Labor Code, Title 4, particularly Chapters 301 and 302, as well as Texas Government Code, Chapter 2308.

§809.15.Promoting Consumer Education.

(a) A Board shall promote informed child care choices by providing consumer education information to:

(1) parents who are eligible for child care services;

(2) parents who are placed on a Board's waiting list;

(3) parents who are no longer eligible for child care services; and

(4) applicants who are not eligible for child care services.

(b) The consumer education information, including consumer education information provided through a Board's website, shall contain, at a minimum:

(1) information about the Texas Information and Referral Network/2-1-1 Texas (2-1-1 Texas) information and referral system;

(2) the website and telephone number of CCL [DFPS,] so parents may obtain health and safety requirements including information on:

(A) the prevention and control of infectious diseases (including immunizations);

(B) building and physical premises safety;

(C) minimum health and safety training appropriate to the provider setting; and

(D) the regulatory compliance history of child care providers;

(3) a description of the full range of eligible child care providers set forth in §809.91; and

(4) a description of programs available in the workforce area relating to school readiness and quality rating systems, including:

(A) Texas Rising Star (TRS) Provider criteria, pursuant to Texas Government Code §2308.315; and

(B) integrated school readiness models, pursuant to Texas Education Code §29.160;

(5) a list of child care providers that meet quality indicators, pursuant to Texas Government Code §2308.3171;

(6) information on existing resources and services available in the workforce area for conducting developmental screenings and providing referrals to services when appropriate for children eligible for child care services, including the use of:

(A) the Early and Periodic Screening, Diagnosis, and Treatment program under 42 USC [U.S.C.] 1396 et seq.; and

(B) developmental screening services available under Part B and Part C of the Individuals with Disabilities Education Act (20 USC [U.S.C.] 1419, 1431 et seq.; and

(7) a link to the Agency's designated child care consumer education website.

(c) A Board shall cooperate with [the Texas Health and Human Services Commission ( HHSC[)] to provide 2-1-1 Texas with information, as determined by HHSC, for inclusion in the statewide information and referral network.

§809.20.Maximum Provider Reimbursement Rates.

(a) Based on local factors, including a market rate survey provided by the Commission, a Board shall establish maximum reimbursement rates for child care subsidies at or above a level established by the Commission to ensure that the rates provide equal access to child care in the local market and in a manner consistent with state and federal statutes and regulations governing child care. At a minimum, Boards shall establish reimbursement rates for full-day and part-day units of service, as described in §809.93(f), for the following:

(1) Provider types:

(A) Licensed child care centers, including before- or after-school programs and school-age programs, as defined by CCL [DFPS];

(B) Licensed child care homes as defined by CCL [DFPS];

(C) Registered child care homes as defined by CCL [DFPS]; and

(D) Relative child care providers as defined in §809.2.

(2) Age groups in each provider type:

(A) Infants age 0 to 17 months;

(B) Toddlers age 18 to 35 months;

(C) Preschool age children from 36 to 71 months; and

(D) School-age [School age] children 72 months and over.

(b) A Board shall establish enhanced reimbursement rates:

(1) for all age groups at TRS provider facilities; and

(2) only for preschool-age children at child care providers that participate in integrated school readiness models pursuant to Texas Education Code §29.160.

(c) The minimum enhanced reimbursement rates established under subsection (b) of this section shall be greater than the maximum rate established for providers not meeting the requirements of subsection (b) of this section for the same category of care up to, but not to exceed, the provider's published rate. The maximum rate must be at least:

(1) 5 percent greater for a:

(A) 2-Star Program Provider; or

(B) child care provider meeting the requirements of subsection (b)(2) of this section;

(2) 7 percent greater for a 3-Star Program Provider; and

(3) 9 percent greater for a 4-Star Program Provider.

(d) Boards may establish a higher enhanced reimbursement rate than those specified in subsection (c) of this section for TRS providers, as long as there is a minimum 2 percentage point difference between each star level.

(e) A Board or its child care contractor shall ensure that providers that are reimbursed for additional staff or equipment needed to assist in the care of a child with disabilities are paid a rate up to 190 percent of the provider's reimbursement rate for a child of that same age. The higher rate shall take into consideration the estimated cost of the additional staff or equipment needed by a child with disabilities. The Board shall ensure that a professional, who is familiar with assessing the needs of children with disabilities, certifies the need for the higher reimbursement rate described in this subsection.

(f) The Board shall determine whether to reimburse providers that offer transportation as long as the combined total of the provider's published rate, plus the transportation rate, is subject to the maximum reimbursement rate established in subsection (a) of this section.

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

Filed with the Office of the Secretary of State on February 7, 2020.

TRD-202000465

Jason Vaden

Director, Workforce Program Policy

Texas Workforce Commission

Earliest possible date of adoption: March 22, 2020

For further information, please call: (512) 689-9855


SUBCHAPTER D. PARENT RIGHTS AND RESPONSIBILITIES

40 TAC §809.71

The rule is proposed under Texas Labor Code §301.0015 and §302.002(d), which provide TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rule affects Texas Labor Code, Title 4, particularly Chapters 301 and 302, as well as Texas Government Code, Chapter 2308.

§809.71.Parent Rights.

A Board shall ensure that the Board's child care contractor informs the parent in writing that the parent has the right to:

(1) choose the type of child care provider that best suits their needs and to be informed of all child care options available to them as included in the consumer education information described in §809.15;

(2) visit available child care providers before making their choice of a child care option;

(3) receive assistance in choosing initial or additional child care referrals including information about the Board's policies regarding transferring children from one provider to another;

(4) be informed of the Commission rules and Board policies related to providers charging parents the difference between the Board's reimbursement and the provider's published rate as described in §809.92(c) - (d);

(5) be represented when applying for child care services;

(6) be notified of their eligibility to receive child care services within 20 calendar days from the day the Board's child care contractor receives all necessary documentation required to initially determine eligibility for child care;

(7) receive child care services regardless of race, color, national origin, age, sex, disability, political beliefs, or religion;

(8) have the Board and the Board's child care contractor treat information used to determine eligibility for child care services as confidential;

(9) receive written notification at least 15 calendar days before termination of child care services;

(10) reject an offer of child care services or voluntarily withdraw their child from child care, unless the child is in protective services;

(11) be informed of the possible consequences of rejecting or ending the child care that is offered;

(12) be informed of the eligibility documentation and reporting requirements described in §809.72 and §809.73;

(13) be informed of the parent appeal rights described in §809.74;

(14) be informed of required background and criminal history checks for relative child care providers through the listing process with CCL [DFPS,] as described in §809.91(e)[,] before the parent or guardian selects the relative child care provider;

(15) receive written notification pursuant to §809.78(d) of the possible termination of child care services for excessive absences, as described in §809.78(a)(1); and

(16) receive written notification of possible termination of child care services for failure to pay the parent share of cost, pursuant to §809.19(d).

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

Filed with the Office of the Secretary of State on February 7, 2020.

TRD-202000466

Jason Vaden

Director, Workforce Program Policy

Texas Workforce Commission

Earliest possible date of adoption: March 22, 2020

For further information, please call: (512) 689-9855


SUBCHAPTER E. REQUIREMENTS TO PROVIDE CHILD CARE

40 TAC §§809.91, 809.93, 809.94

The rules are proposed under Texas Labor Code §301.0015 and §302.002(d), which provide TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rules affect Texas Labor Code, Title 4, particularly Chapters 301 and 302, as well as Texas Government Code, Chapter 2308.

§809.91.Minimum Requirements for Providers.

(a) A Board shall ensure that child care subsidies are paid only to:

(1) regulated child care providers as described in §809.2;

(2) relative child care providers as described in §809.2, subject to the requirements in subsection (e) of this section; or

(3) at the Board's option, child care providers licensed in a neighboring state, subject to the following requirements:

(A) Boards shall ensure that the Board's child care contractor reviews the licensing status of the out-of-state provider every month, at a minimum, to confirm the provider is meeting the minimum licensing standards of the state;

(B) Boards shall ensure that the out-of-state provider meets the requirements of the neighboring state to serve CCDF-subsidized children; and

(C) The provider shall agree to comply with the requirements of this chapter and all Board policies and Board child care contractor procedures.

(b) A Board shall not prohibit a relative child care provider who is listed with CCL [DFPS] and who meets the minimum requirements of this section from being an eligible relative child care provider.

(c) Except as provided by the criteria for TRS Provider certification, a Board or the Board's child care contractor shall not place requirements on regulated providers that:

(1) exceed the state licensing requirements stipulated in Texas Human Resources Code, Chapter 42; or

(2) have the effect of monitoring the provider for compliance with state licensing requirements stipulated in Texas Human Resources Code, Chapter 42.

(d) When a Board or the Board's child care contractor, in the course of fulfilling its responsibilities, gains knowledge of any possible violation regarding regulatory standards, the Board or its child care contractor shall report the information to the appropriate regulatory agency.

(e) For relative child care providers to be eligible for reimbursement for Commission-funded child care services, the following applies:

(1) Relative child care providers shall list with CCL [DFPS]; however, pursuant to 45 CFR §98.41(e), relative child care providers listed with CCL [DFPS] shall be exempt from the health and safety requirements of 45 CFR §98.41(a).

(2) A Board shall allow relative child care providers to care for a child in the child's home (in-home child care) only for the following:

(A) A child with disabilities as defined in §809.2, and his or her siblings;

(B) A child under 18 months of age, and his or her siblings;

(C) A child of a teen parent; and

(D) When the parent's work schedule requires evening, overnight, or weekend child care in which taking the child outside of the child's home would be disruptive to the child.

(3) A Board may allow relative in-home child care for circumstances in which the Board's child care contractor determines and documents that other child care provider arrangements are not available in the community.

(f) Boards shall ensure that subsidies are not paid for a child at the following child care providers:

(1) Except for foster parents authorized by DFPS pursuant to §809.49, licensed child care centers, including before- or after-school programs and school-age programs, in which the parent or his or her spouse, including the child's parent or stepparent, is the director or assistant director, or has an ownership interest; or

(2) Licensed, registered, or listed child care homes where the parent also works during the hours his or her child is in care.

§809.93.Provider Reimbursement.

(a) A Board shall ensure that reimbursement for child care is paid only to the provider.

(b) A Board or its child care contractor shall reimburse a regulated provider based on a child's monthly enrollment authorization, excluding periods of suspension at the concurrence of the parent as described in §809.51(d).

(c) A Board shall ensure that a relative child care provider is not reimbursed for days on which the child is absent.

(d) A relative child care provider shall not be reimbursed for more children than permitted by the CCL [DFPS] minimum regulatory standards for Registered Child Care Homes. A Board may permit more children to be cared for by a relative child care provider on a case-by-case basis as determined by the Board.

(e) A Board shall not reimburse providers that are debarred from other state or federal programs unless and until the debarment is removed.

(f) Unless otherwise determined by the Board and approved by the Commission for automated reporting purposes, the monthly enrollment authorization described in subsection (b) of this section is based on the unit of service authorized, as follows:

(1) A full-day unit of service is 6 to 12 hours of care provided within a 24-hour period; and

(2) A part-day unit of service is fewer than 6 hours of care provided within a 24-hour period.

(g) A Board or its child care contractor shall ensure that providers are not paid for holding spaces open.

(h) A Board or the Board's child care contractor shall not pay providers:

(1) less, when a child enrolled full time occasionally attends for a part day; or

(2) more, when a child enrolled part time occasionally attends for a full day.

(i) The Board or its child care contractor shall not reimburse a provider retroactively for new Board maximum reimbursement rates or new provider published rates.

(j) A Board or its child care contractor shall ensure that the parent's travel time to and from the child care facility and the parent's work, school, or job training site is included in determining whether to authorize reimbursement for full-day or part-day care under subsection (f) of this section.

§809.94.Providers Placed on Corrective or Adverse Action by the Texas Department of Family and Protective Services.

[(a) For a provider placed on evaluation corrective action (evaluation status) by DFPS, Boards shall ensure that:]

[(1) parents with children enrolled in Commission-funded child care are notified in writing of the provider's evaluation status no later than five business days after receiving notification from the Agency of DFPS' decision to place the provider on evaluation status; and]

[(2) parents choosing to enroll children in Commission-funded child care with the provider are notified in writing of the provider's evaluation status prior to enrolling the children with the provider.]

(a) [(b)] For a provider placed on probation corrective action (probationary status) by CCL [DFPS], Boards shall ensure that:

(1) parents with children in Commission-funded child care are notified in writing of the provider's probationary status no later than five business days after receiving notification from the Agency of CCL's [DFPS'] decision to place the provider on probationary status; and

(2) no new referrals are made to the provider while on probationary status.

(b) [(c)] A parent receiving notification of a provider's [evaluation or] probationary status with CCL [DFPS] pursuant to subsection [subsections] (a) [and (b)] of this section may transfer the child to another eligible provider without being subject to the Board transfer policies described in §809.71(3) if the parent requests the transfer within 14 calendar days of receiving such notification.

(c) [(d)] For a provider placed on [evaluation or] probationary status by CCL [DFPS], Boards shall ensure that the provider is not reimbursed at the Boards' enhanced reimbursement rates described in §809.20 while on [evaluation or] probationary status.

(d) [(e)] For a provider against whom CCL [DFPS] is taking adverse action, Boards shall ensure that:

(1) parents with children enrolled in Commission-funded child care are notified no later than two business days after receiving notification from the Agency that CCL [DFPS] intends to take adverse action against the provider;

(2) children enrolled in Commission-funded child care with the provider are transferred to another eligible provider no later than five business days after receiving notification from the Agency that CCL [DFPS] intends to take adverse action against the provider; and

(3) no new referrals for Commission-funded child care are made to the provider while CCL [DFPS] is taking adverse action.

(e) [(f)] For adverse actions in which CCL [DFPS] has determined that the provider poses an immediate risk to the health or safety of children and cannot operate pending appeal of the adverse action, but for which there is a valid court order that overturns CCL's [DFPS'] determination and allows the provider to operate pending administrative review or appeal, Boards shall take action consistent with subsection (d) [(e)] of this section.

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

Filed with the Office of the Secretary of State on February 7, 2020.

TRD-202000467

Jason Vaden

Director, Workforce Program Policy

Texas Workforce Commission

Earliest possible date of adoption: March 22, 2020

For further information, please call: (512) 689-9855


SUBCHAPTER G. TEXAS RISING STAR PROGRAM

40 TAC §809.132

The rule is proposed under Texas Labor Code §301.0015 and §302.002(d), which provide TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rule affects Texas Labor Code, Title 4, particularly Chapters 301 and 302, as well as Texas Government Code, Chapter 2308.

§809.132.Impact of Certain Deficiencies on TRS Certification.

(a) A TRS provider shall lose TRS certification if the provider:

(1) is placed on corrective action with a Board pursuant to Subchapter F of this chapter;

(2) is under a "Notice of Freeze" with the Commission pursuant to Chapter 213 of the Texas Labor Code (Enforcement of the Texas Unemployment Compensation Act) or Chapter 61 of the Texas Labor Code (Payment of Wages);

(3) is placed on corrective or adverse action by CCL; or

(4) had 15 or more total licensing deficiencies of any type during the most recent 12-month licensing history.

(b) TRS providers with any of the critical licensing deficiencies listed in the TRS guidelines during the most recent 12-month CCL licensing history shall have the following consequences:

(1) reduction of one-star level, so a 4-Star Program Provider is reduced to a 3-Star Program Provider, a 3-Star Program Provider is reduced to a 2-Star Program Provider; or

(2) a 2-Star Program Provider loses certification.

(c) TRS providers with five or more of the high or medium-high deficiencies listed in the TRS guidelines during the most recent 12-month CCL licensing history shall lose a star level with a 2-Star Program Provider losing certification.

(d) TRS providers with 10 to 14 total licensing deficiencies of any type during the most recent 12-month CCL licensing history shall be placed on a six-month TRS program probationary period. Further:

(1) TRS providers on a six-month probationary period that are re-cited by CCL within the probationary period for any of the same deficiencies shall lose a star level with a 2-Star Program Provider losing certification;

(2) if any new deficiencies--not to exceed 14 total deficiencies--are cited by CCL during the first probationary period, a second six-month probationary period shall be established effective upon the date of final CCL [DFPS] determination of the deficiencies; and

(3) if any new deficiencies--not to exceed 14 total deficiencies--are cited by CCL during the second six-month probationary period, a provider shall lose TRS certification.

(e) Providers losing a star level due to licensing deficiencies shall be reinstated at the former star level if no citations described in §809.132(b) - (d) occur within the six-month reduction time frame.

(f) Providers losing TRS certification shall be eligible to reapply for certification after six months following the loss of the certification, as long as no current deficiencies are re-cited and no additional licensing deficiencies are cited during the disqualification 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 February 7, 2020.

TRD-202000468

Jason Vaden

Director, Workforce Program Policy

Texas Workforce Commission

Earliest possible date of adoption: March 22, 2020

For further information, please call: (512) 689-9855


CHAPTER 857. PURCHASE OF GOODS AND SERVICES FOR VOCATIONAL REHABILITATION SERVICES BY TEXAS WORKFORCE COMMISSION

40 TAC §857.1

The Texas Workforce Commission (TWC) proposes the repeal of Chapter 857 in its entirety, relating to the Purchase of Goods and Services for Vocational Rehabilitation Services by Texas Workforce Commission.

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

The purpose of the proposed chapter repeal is to streamline TWC rules by incorporating the relevant portions of this chapter into Chapter 858, Vocational Rehabilitation Services Contract Management, which is being amended and renamed in a separate proposed rulemaking.

Effective September 1, 2016, pursuant to Texas Labor Code §351.002, the administration of vocational rehabilitation (VR) services was transferred from the Texas Department of Assistive and Rehabilitative Services (DARS) to TWC. To ensure continuity and avoid any impact on customers, the administrative rules shared by all DARS programs were duplicated into Chapters 850, 857, and 858 of TWC's rules upon transfer of the programs. Because the rules established DARS' administrative framework and served all DARS programs, they overlap certain existing TWC administrative rules and contain numerous references to programs that were not transferred to TWC.

Chapter 857 consists of one section, §857.1, which authorizes the use of open-enrollment solicitation and interagency contracting, in addition to other noncompetitive procurement methods. To streamline TWC rules and preserve the relevant subsections of §857.1, the chapter should be repealed and its relevant content should be amended and moved to Chapter 858, which will be renamed "Vocational Rehabilitation Purchases and Contracts" to reflect the additional content.

PART II. IMPACT STATEMENTS

Chris Nelson, Chief Financial Officer, has determined that for each year of the first five years the repeal is in effect, the following statements will apply:

There are no additional estimated costs to the state and to local governments expected as a result of the repeal.

There are no estimated cost reductions to the state and to local governments as a result of the repeal.

There are no estimated losses or increases in revenue to the state or to local governments as a result of the repeal.

There are no foreseeable implications relating to costs or revenue of the state or local governments as a result of the repeal.

There are no anticipated economic costs to individuals required to comply with the rules.

There is no anticipated adverse economic impact on small businesses, microbusinesses, or rural communities as a result of enforcing or administering the rules.

Based on the analyses required by Texas Government Code §2001.024, TWC has determined that the requirement to repeal or amend a rule, as required by House Bill 1290, 85th Texas Legislature, Regular Session, 2017 (to be codified at Texas Government Code §2001.0045), does not apply to this rulemaking. Additionally, Texas Labor Code §352.101 requires TWC's three-member Commission to adopt rules necessary to integrate the vocational rehabilitation programs, including recommending adopting rules to implement the integration. Therefore, the exception identified in §2001.0045(c)(9) also applies.

Takings Impact Assessment

Under Texas Government Code, §2007.002(5), "taking" means a governmental action that affects private real property, in whole or in part or temporarily or permanently, in a manner that requires the governmental entity to compensate the private real property owner as provided by the Fifth and Fourteenth Amendments to the US Constitution or the Texas Constitution, §17 or §19, Article I; or an action that restricts or limits the owner's right to the property that would otherwise exist in the absence of the governmental action, and is the producing cause of a reduction of at least 25 percent in the market value of the affected private real property, determined by comparing the market value of the property as if the governmental action is not in effect with the market value of the property as if the governmental action is in effect. The Commission completed a Takings Impact Analysis for the proposed rulemaking action under Texas Government Code, §2007.043. The primary purpose of this proposed rulemaking action, as discussed elsewhere in this preamble, is to streamline TWC rules by incorporating the relevant portions of Chapter 857 into Chapter 858, Vocational Rehabilitation Services Contract Management, which is being amended and renamed in a separate proposed rulemaking.

The proposed rulemaking action will not create any additional burden on private real property. The proposed rulemaking action will not affect private real property in a manner that would require compensation to private real property owners under the US Constitution or the Texas Constitution. The proposed rulemaking also will not affect private real property in a manner that restricts or limits an owner's right to the property that would otherwise exist in the absence of the governmental action. Therefore, the proposed rulemaking will not cause a taking under Texas Government Code, Chapter 2007.

Government Growth Impact Statement

TWC has determined that during the first five years the proposed repeal will be in effect:

--the proposed repeal will not create or eliminate a government program;

--implementation of the proposed repeal will not require the creation or elimination of employee positions;

--implementation of the proposed repeal will not require an increase or decrease in future legislative appropriations to TWC;

--the proposed repeal will not require an increase or decrease in fees paid to TWC;

--the proposed repeal will not create a new regulation;

--the proposed repeal will not expand, limit, or eliminate an existing regulation;

--the proposed repeal will not change the number of individuals subject to the rules; and

--the proposed repeal will not positively or adversely affect the state's economy.

Economic Impact Statement and Regulatory Flexibility Analysis

TWC has determined that the proposed repeal will not have an adverse economic impact on small businesses or rural communities, as the proposed repeal places no requirements on small businesses or rural communities.

Mariana Vega, Director, Labor Market and Career Information, has determined that there is no significant negative impact upon employment conditions in the state as a result of the repeal.

Cheryl Fuller, Director, Vocational Rehabilitation Division, has determined that for each year of the first five years the repeal is in effect, the public benefit will be to streamline TWC rules.

PART III. COORDINATION ACTIVITIES

In the development of these rules for publication and public comment, TWC sought the involvement of the 28 Local Workforce Development Boards (Boards) in Texas. TWC provided the concept paper regarding the repeal to the Boards for consideration and review on June 14, 2018. TWC also conducted a conference call with Board executive directors and Board staff on June 22, 2018, to discuss the concept paper. During the rulemaking process, TWC considered all information gathered in order to develop rules that provide clear and concise direction to all parties involved.

Comments on the proposed repeal may be submitted to TWC Policy Comments, Workforce Program Policy, Attn: Workforce Editing, 101 East 15th Street, Room 459T, Austin, Texas 78778; faxed to (512) 475-3577; or emailed to TWCPolicyComments@twc.state.tx.us. Comments must be received or postmarked no later than 30 days from the date this proposal is published in the Texas Register.

The repeal is proposed under Texas Labor Code §301.0015 and §302.002(d), which provide TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The repeal affects Title 4, Texas Labor Code, particularly Chapters 351 and 352.

§857.1.Noncompetitive Procurement.

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 February 7, 2020.

TRD-202000469

Jason Vaden

Director, Workforce Program Policy

Texas Workforce Commission

Earliest possible date of adoption: March 22, 2020

For further information, please call: (512) 689-9855


CHAPTER 858. PROCUREMENT AND CONTRACT MANAGEMENT REQUIREMENTS FOR PURCHASE OF GOODS AND SERVICES FOR VOCATIONAL REHABILITATION SERVICES [CONTRACT MANAGEMENT REQUIREMENT]

SUBCHAPTER D. VOCATIONAL REHABILITATION SERVICES CONTRACT MANAGEMENT REQUIREMENT

The Texas Workforce Commission (TWC) proposes the following new sections to Chapter 858, relating to Vocational Rehabilitation Services Contract Management Requirement:

§858.1 and §858.2

TWC proposes amendments to the following sections of Chapter 858, relating to Vocational Rehabilitation Services Contract Management Requirement:

§§858.3, 858.4, and 858.7 - 858.16

TWC proposes the repeal of the following sections of Chapter 858, relating to Vocational Rehabilitation Services Contract Management Requirement:

§§858.1, 858.2, 858.5, and 858.6

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

The purpose of the proposed Chapter 858 rule change is to align the chapter with TWC's operation of the Vocational Rehabilitation (VR) services program. Texas Labor Code §351.002 transferred the administration of VR services from the Texas Department of Assistive and Rehabilitative Services (DARS) to TWC, effective September 1, 2016.

To ensure continuity and avoid any impact on customers, the administrative rules shared by all DARS programs were duplicated into Chapters 850, 857, and 858 of TWC's rules upon transfer of the programs. Because the rules established DARS' administrative framework and served all DARS programs, they overlap certain existing TWC administrative rules and contain references to programs that were not transferred to TWC.

To streamline TWC rules and accurately reflect TWC's program administration, several amendments are needed to integrate and align overlapping sections and update outdated terms and procedures to align with TWC's current program operation. This will help to ensure the health and safety of VR customers, as well as help to ensure that Texans receive the best value for the expenditure of available public funds for VR services.

In keeping with the goal of protecting the health and safety of VR customers and ensuring that Texas receives the best value for the expenditure of available public funds for VR services, TWC understands that the VR services program is a recognized health and human services entity and the express authority for procuring goods and services through a noncompetitive process, referred to as an enrollment contract, transferred to TWC with the VR services function. The definition of an enrollment contract is found in Texas Administrative Code (TAC) 1 TAC §391.103(8).

PART II. EXPLANATION OF INDIVIDUAL PROVISIONS

(Note: Minor editorial changes are made that do not change the meaning of the rules and, therefore, are not discussed in the Explanation of Individual Provisions.)

TWC proposes the following amendments to Chapter 858:

§858.1. Purpose and Applicability

Section 858.1 is repealed because the language on purpose and applicability is unnecessary and inconsistent with TWC's current rulemaking framework.

§858.1. Definitions

New §858.1 updates and retains the applicable definitions from §858.2, which is currently proposed for repeal, to reflect TWC's current operation of the VR program.

§858.2. Definitions

Section 858.2 is repealed to accommodate reorganization of the subchapter.

§858.2. Noncompetitive Open Enrollment Solicitation

New §858.2 adds new language from the proposed repeal of Chapter 857, that authorizes the use of open enrollment solicitations.

§858.3. General Requirements for Contracting

Section 858.3 is amended to remove, update, combine, or add language and provisions accounted for in the standard terms and conditions of VR services contracts, the VR Standards for Providers on TWC's website, and TWC's contracting policies and procedures.

§858.4. Complaints

Section 858.4 is amended to add language specifying that TWC is the administrative agency for directing complaints and requiring contractors to verify that the information they provide to customers for directing complaints is current and accurate.

§858.5. Record Requirements

Section 858.5 is repealed; retention and production of contractor records is required and covered by TWC's Financial Manual for Grants & Contracts Appendix K: Record Retention & Access Requirements.

§858.6. Access to Contractor Facilities and Records

Section 858.6 is repealed. Access to contractor records is required and covered by the Financial Manual for Grants & Contracts Appendix K: Record Retention & Access Requirements.

§858.7. Contract Monitoring

Section 858.7 is amended to update terminology and to highlight contractor responsibility regarding the monitoring and review of contracts under this chapter.

§858.8. Corrective Action Plan

Section 858.8 is amended to update terminology and to highlight contractor responsibility regarding a corrective action plan. Language has been added to require that the corrective action plan be acceptable to TWC and that contractors remedy all deficiencies or violations in a timely manner.

§858.9. Adverse Actions

Section 858.9 is amended to update terminology and to add language that includes substantiated claims of fraud against a contractor and failure to submit a corrective action plan as reasons for which TWC may impose adverse actions against a contractor. Language has been modified for clarity and consistency and to reflect TWC's current operation of the VR services program.

§858.10. Debarment and Suspension of Contractors

Section 858.10 is amended to update terminology and clarify the general length of debarment. Subsection (d) has been modified to clarify when TWC may suspend contracts.

§858.11. Causes and Conditions of Debarment

Section 858.11 is amended to remove language stating that paragraph (3)(B) applies only to actions occurring after the effective date of these rules. Additionally, language has been updated for clarity and consistency with existing contract language and to reflect TWC's current operation of the VR services program.

§858.12. Causes and Results of Suspension

Section 858.12(b) is amended to update terminology and to clarify the possible results of suspension. Additionally, language has been updated to reflect TWC's current operation of the VR services program.

§858.13. Evidence for Debarment

Section 858.13 is amended to update terminology to reflect TWC's current operation of the VR services program.

§858.14. Notice for Debarment or Suspension

Section 858.14 is amended to update terminology to reflect TWC's current operation of the VR services program.

§858.15. Appeals

Section 858.15(b) is amended to update terminology and to clarify that a notice of adverse action rendered by TWC is final for all purposes unless the contractor files an appeal not later than 28 calendar days after the date the initial adverse action is sent to the contractor. Additionally, language has been added giving TWC the discretion to grant a contractor's request for an extension of the period in which to file a notice of appeal of an adverse action upon showing of good cause. The term "appellant" has been replaced with the term "contractor."

§858.16. Request for Reconsideration

Section 858.16 is amended to update terminology and be consistent with changes in §858.15. The term "appellant" has been replaced with the term "contractor."

PART III. IMPACT STATEMENTS

Chris Nelson, Chief Financial Officer, has determined that for each year of the first five years the rules will be in effect, the following statements will apply:

There are no additional estimated costs to the state and to local governments expected as a result of enforcing or administering the rules.

There are no estimated cost reductions to the state and to local governments as a result of enforcing or administering the rules.

There are no estimated losses or increases in revenue to the state or to local governments as a result of enforcing or administering the rules.

There are no foreseeable implications relating to costs or revenue of the state or local governments as a result of enforcing or administering the rules.

There are no anticipated economic costs to individuals required to comply with the rules.

There is no anticipated adverse economic impact on small businesses, microbusinesses, or rural communities as a result of enforcing or administering the rules.

Based on the analyses required by Texas Government Code §2001.024, TWC has determined that the requirement to repeal or amend a rule, as set forth by Texas Government Code §2001.0045, does not apply to this rulemaking. Additionally, Texas Labor Code §352.101 requires TWC's three-member Commission (Commission) to adopt rules necessary to integrate the VR programs, including recommending adopting rules to implement the integration. Therefore, the exception identified in §2001.0045(c)(9) also applies.

Takings Impact Assessment

Under Texas Government Code, §2007.002(5), "taking" means a governmental action that affects private real property, in whole or in part or temporarily or permanently, in a manner that requires the governmental entity to compensate the private real property owner as provided by the Fifth and Fourteenth Amendments to the US Constitution or the Texas Constitution, §17 or §19, Article I; or an action that restricts or limits the owner's right to the property that would otherwise exist in the absence of the governmental action, and is the producing cause of a reduction of at least 25 percent in the market value of the affected private real property, determined by comparing the market value of the property as if the governmental action is not in effect with the market value of the property as if the governmental action is in effect. The Commission completed a Takings Impact Analysis for the proposed rulemaking action under Texas Government Code §2007.043. The primary purpose of this proposed rulemaking action, as discussed elsewhere in this preamble, is to align Chapter 858 with TWC's operation of the VR services program.

The proposed rulemaking action will not create any additional burden on private real property. The proposed rulemaking action will not affect private real property in a manner that would require compensation to private real property owners under the US Constitution or the Texas Constitution. The proposed rulemaking also will not affect private real property in a manner that restricts or limits an owner's right to the property that would otherwise exist in the absence of the governmental action. Therefore, the proposed rulemaking will not cause a taking under Texas Government Code, Chapter 2007.

Government Growth Impact Statement

TWC has determined that during the first five years the proposed amendments will be in effect:

--the proposed amendments will not create or eliminate a government program;

--implementation of the proposed amendments will not require the creation or elimination of employee positions;

--implementation of the proposed amendments will not require an increase or decrease in future legislative appropriations to TWC;

--the proposed amendments will not require an increase or decrease in fees paid to TWC;

--the proposed amendments will not create a new regulation;

--the proposed amendments will not expand, limit, or eliminate an existing regulation;

--the proposed amendments will not change the number of individuals subject to the rules; and

--the proposed amendments will not positively or adversely affect the state's economy.

Economic Impact Statement and Regulatory Flexibility Analysis

TWC has determined that the proposed rules will not have an adverse economic impact on small businesses or rural communities, as these proposed rules place no requirements on small businesses or rural communities.

Mariana Vega, Director, Labor Market and Career Information, has determined that there is no significant negative impact upon employment conditions in the state as a result of the rules.

Cheryl Fuller, Director, Vocational Rehabilitation Division, has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the proposed rules will be to update outdated terms and procedures to align with TWC's current VR services program operation; to ensure the health and safety of VR customers; and to help ensure that Texans receive the best value for the expenditure of available public funds for VR services.

TWC hereby certifies that the proposal has been reviewed by legal counsel and found to be within TWC's legal authority to adopt.

PART IV. COORDINATION ACTIVITIES

In the development of these rules for publication and public comment, TWC sought the involvement of the 28 Local Workforce Development Boards (Boards) in Texas. TWC provided the concept paper regarding these rule amendments to the Boards for consideration and review on June 14, 2018. TWC also conducted a conference call with Board executive directors and Board staff on June 22, 2018, to discuss the concept paper. During the rulemaking process, TWC considered all information gathered in order to develop rules that provide clear and concise direction to all parties involved.

Comments on the proposed rules may be submitted to TWC Policy Comments, Workforce Program Policy, Attn: Workforce Editing, 101 East 15th Street, Room 459T, Austin, Texas 78778; faxed to (512) 475-3577; or emailed to TWCPolicyComments@twc.state.tx.us. Comments must be received or postmarked no later than 30 days from the date this proposal is published in the Texas Register.

40 TAC §858.1, §858.2

The repeals are proposed under Texas Labor Code §301.0015 and §302.002(d), which provide TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed repeals affect Title 4, Texas Labor Code, particularly Chapters 301, 302, 351, and 352.

§858.1.Purpose and Applicability.

§858.2.Definitions.

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 February 7, 2020.

TRD-202000470

Jason Vaden

Director, Workforce Program Policy

Texas Workforce Commission

Earliest possible date of adoption: March 22, 2020

For further information, please call: (512) 689-9855


40 TAC §§858.1 - 858.4

The rules are proposed under Texas Labor Code §301.0015 and §302.002(d), which provide TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rules affect Title 4, Texas Labor Code, particularly Chapters 301, 302, 351, and 352.

§858.1.Definitions.

In addition to the definitions contained in §800.2 of this title, the following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) Amendment--A formal revision or addition to a contract.

(2) Bid--An offer to contract with the state submitted in response to a bid invitation.

(3) Contract--A written agreement between the Agency and a contractor by the terms of which the contractor agrees to provide goods or services, by sale or lease to or for the Agency for Vocational Rehabilitation (VR) customers.

(4) Contract records--All financial and programmatic records, supporting documents, papers, statistical data, or any other written or electronic materials that are pertinent to each specific contract instrument.

(5) Contractor--An individual holding a written contract.

(6) Corrective action plan--Specific steps to be taken by a contractor to resolve identified deficiencies and/or to address concerns that the contracting agency has regarding the contractor's compliance with contract terms or other applicable laws, rules, or regulations. The corrective action plan may also focus on improving contractor performance (as it relates to service delivery, reporting, and/or financial stability).

(7) Debarment--The termination of the ability to continue an existing contract, to receive a new contract, to participate as a contractor or subcontractor, to provide goods or services to Agency Vocational Rehabilitation (VR) customers either directly or indirectly while working for an Agency contractor, or to make a bid, offer, application, or proposal for an Agency contract.

(8) Effective date--The date of complete execution of the contract or the date upon which the parties agree that the contract takes effect.

(9) Individual--Any individual, corporation, partnership, association, unit of government, or legal entity, however organized, or any portion thereof.

(10) Program--Agency activities that are designed to deliver services or benefits provided by statute.

(11) Respondent--An individual against whom the Agency has initiated a debarment or suspension action.

(12) Subcontract--A written agreement between the original contractor and a third party to provide all or a specified part of the goods, services, work, and/or materials required in the original contract.

(13) Suspension--The temporary discontinuance of a contractor's authorization to conduct business with the Agency.

§858.2.Noncompetitive Open Enrollment Solicitation.

General. The Agency may acquire goods or services through a noncompetitive open enrollment solicitation and enter into enrollment contracts with qualified contractors.

(1) An open enrollment solicitation must be conducted in an open and fair manner that reasonably provides interested, qualified contractors with an equal opportunity to obtain a contract or do business with the Agency.

(2) The Agency may consider past performance when determining whether to award a contract to an applicant.

§858.3.General Requirements for Contracting.

(a) To contract with the Agency for VR goods and services [DARS], the contractor must:

[(1) meet eligibility requirements for contracting;]

[(2) if applicable, have and maintain the appropriate license(s);]

[(3) submit all documents and information required by DARS;]

[(4) comply with all applicable DARS and Texas Health and Human Services Commission rules and policies and terms of the contract with DARS;]

[(5) comply with all local, state, and federal regulations that apply to the contract;]

[(6) be authorized by law or the Secretary of State to conduct business in the state of Texas;]

[(7) certify in writing that the contractor's taxes due to the state of Texas are current;]

(1) [(8)] ensure that:

(A) staff members [providing services are competent, professionally ethical, and qualified for positions held. Qualifications of staff members must] meet all qualification requirements established by Agency [state] policy and regulations;[. The contractor must ensure that]

(B) all staff members meet minimum qualifications at application and throughout the term of the contract;

(C) staff credentials supporting [those] qualifications are [must be] on file at the time of hire and maintained throughout the term of the contract; and

(D) staff credentials are [must be] made available to Agency [DARS] staff [members] upon request;

(2) [(9)] provide for such fiscal control and fund accounting as may be necessary to ensure proper disbursement and accounting of funds provided by the Agency [DARS and] in accordance with Agency [DARS] policies and maintain financial and other contract records according to recognized fiscal and accounting practices such as the Generally Accepted Accounting Principles (GAAP);

(3) [(10)] certify on or before [maintain accurate and complete records and prepare and distribute reports according to] the effective date [terms] of the contract that the contractor has and will maintain adequate operating funds for conducting business;

[11) ensure that any contractor facility in which services are provided is:

[(A) such that the safety and health of the staff and consumers is protected; and]

[(B) accessible to individuals receiving services and complies with the requirements of the Architectural Barriers Act of 1968, the Uniform Federal Accessibility Standards, the Americans with Disabilities Act of 1990, and Section 504 of the Rehabilitation Act;]

[(12) have adequate operating funds available for conducting business on the effective date of the contract;]

(4) [(13)] have and maintain [an] adequate staff to provide services on the effective date of the contract;

(5) [(14)] notify the Agency [DARS and HHSC] in writing of changes to contact [contract ] information according to the requirements of the contract. Unless otherwise specified in the contract, the contractor must notify the Agency [DARS and HHSC]:

(A) within 10 calendar days after any address change, including of the location of the contractor's office, physical address, or mailing address;

(B) immediately of any change in administrator or director; and

(C) within seven working days of any change in the contact telephone number designated in the contract; [and]

(6) [(15)] report any suspected violation of rules or laws to the appropriate investigative authority. This includes reporting to the Agency any abuse, neglect, or exploitation [abuse, neglect, and exploitation issues to the Texas Department of Family and Protective Services (DFPS) or to the appropriate Texas Department of Aging and Disability Services (DADS) licensing staff].

[(b) To provide services, a contractor must maintain adequate:]

[(1) funding for provision of services; and]

[(2) staff for the provision of services.]

(b) [(c)] A contractor [or potential contractor] may not offer, give, or agree to give an Agency [a DARS] employee anything of value.

(c) [(d)] A contractor or applicant [potential contractor] may not engage in any activity that presents a real or apparent conflict of interest and must provide written attestation that no real or apparent conflicts of interest exist before execution of a contract with the Agency.

(d) [(e)] Pursuant to Texas Government Code §572.054(b), certain Agency employees [A former DARS employee] may not represent or receive compensation from any individual [person] concerning any contractual matter in which the former employee participated during his or her employment with the state.

(e) [(f)] The Agency [DARS] may choose not to enter into a contract:

(1) when, in the Agency's [DARS'] opinion, the contractor[, potential contractor,] or a controlling party has a documented, unsatisfactory history in contracting with the Agency [DARS] or with another state [health and human services] agency;

(2) if the contractor [or potential contractor]:

(A) subcontracts any direct care services without specific authorization from the Agency [DARS and HHSC]; and/or

(B) assigns or transfers the contract without the Agency's prior written approval [of DARS and HHSC].

(f) The Agency may obtain criminal history information from the Texas Department of Public Safety and may use this information in awarding and administering Agency contracts. When the Agency uses the information, the terms and conditions of use are included in the affected contracts

(g) Goods or services purchased or reimbursed by the Agency may be inspected or monitored at the discretion of the Agency.

[(g) DARS or HHSC assigns the effective date of a contract.]

[(h) Goods or services purchased or reimbursed by DARS may be inspected or monitored at the discretion of DARS or HHSC.]

(h) [(i)] The Agency [DARS or HHSC] may require corrective action, remove or reassign active customers to other contractors for services [suspend consumer referrals,] and/or impose an adverse action against a contractor for failure to comply with the terms of the contract and/or Agency [DARS or HHSC] rules, policies, and procedures.

(i) [(j)] A contractor must participate in orientation relating to Agency [DARS and HHSC] contract requirements before providing goods or services under a contract for the first time.

(j) [(k)] A contractor shall ensure that any facility in which services are provided includes individuals [among the staff members, or shall obtain the services of, people] able to communicate in the native language of applicants, recipients of service, and other eligible individuals [and consumers] who have limited English proficiency [speaking ability and ensure that appropriate modes of communication are used for all consumers].

(k) [(l)] Contractors [that provide vocational rehabilitation services] shall take affirmative action to employ and advance in employment qualified individuals with disabilities.

§858.4.Complaints.

Upon request from a customer [the consumer], the contractor must provide [notify] the customer with [consumer of] the appropriate name, mailing address, and telephone number to direct [of DARS for the purpose of directing] complaints to the Agency. The contractor must verify that the name, mailing address, and telephone number it provides to the customer are current and correct.

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 February 7, 2020.

TRD-202000471

Jason Vaden

Director, Workforce Program Policy

Texas Workforce Commission

Earliest possible date of adoption: March 22, 2020

For further information, please call: (512) 689-9855


40 TAC §858.5, §858.6

The repeals are proposed under Texas Labor Code §301.0015 and §302.002(d), which provide TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed repeals affect Title 4, Texas Labor Code, particularly Chapters 301, 302, 351, and 352.

§858.5.Record Requirements.

§858.6.Access to Contractor Facilities and Records.

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 February 7, 2020.

TRD-202000472

Jason Vaden

Director, Workforce Program Policy

Texas Workforce Commission

Earliest possible date of adoption: March 22, 2020

For further information, please call: (512) 689-9855


40 TAC §§858.7 - 858.16

The rules are proposed under Texas Labor Code §301.0015 and §302.002(d), which provide TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities.

The proposed rules affect Title 4, Texas Labor Code, particularly Chapters 301, 302, 351, and 352.

§858.7.Contract Monitoring.

(a) Any service purchased or reimbursed by the Agency [DARS] may be monitored at the discretion of the Agency [DARS or HHSC].

(b) The Agency [DARS and HHSC] may conduct compliance monitoring reviews of the contractor's services to determine if the contractor is in compliance with the contract and with program rules and requirements. These reviews are conducted at the location where the contractor is providing the services unless the Agency [DARS or HHSC] specifies a different location. The Agency shall [DARS and HHSC] assess contractor performance based on contract standards.

(c) The Agency may expand a compliance monitoring review period or any requested review sample at any time.

[(c) During the monitoring review, the contractor must provide:]

[(1) adequate working space for reviewing the records;]

[(2) every record DARS or HHSC requests for review; and]

[(3) copies, or access for DARS and HHSC staff to make needed copies, of documents.]

[(d) During the monitoring review, DARS or HHSC may:]

[(1) review a sample of consumer records to determine the contractor's compliance with contract requirements;]

[(2) interview consumers and staff members;]

[(3) observe consumers and staff members;]

[(4) consult with others, as appropriate; and]

[(5) conduct other activities, as appropriate.]

[(e) DARS or HHSC may expand a compliance monitoring review period or the review sample at any time.]

[(f) DARS and HHSC also conduct fiscal monitoring, which is the review of documentation that supports the contractor's billing, as it exists at the time the DARS or HHSC staff reviews the billing documentation. DARS or HHSC may recoup payment if the service delivery documentation does not support the contractor's billing.]

(d) [(g)] The Agency [DARS and HHSC] may conduct a fiscal monitoring review:

(1) in conjunction with a compliance monitoring review;

(2) independent of a compliance monitoring review;

(3) when a contract is terminated;

(4) as a result of a complaint; or

(5) at other times, as the Agency [DARS or HHSC] considers necessary.

[(h) Fiscal monitoring is designed to ensure that:]

[(1) DARS received the goods or services paid for;]

[(2) The total amount paid by DARS was allowable under the contract; and]

[(3) The contractor maintained the financial records and internal controls necessary to adequately account for claims under the contract.]

(e) [(i)] The Agency [DARS and HHSC] may use sampling methods in monitoring and auditing contracts.

(f) [(j)] The contractor has the burden of proof in establishing entitlement to payments made under the contract.

[(k) The contractor must provide the same accommodations for fiscal monitoring as related to compliance monitoring.]

§858.8.Corrective Action Plan.

If requested by the Agency, the [The] contractor must prepare and implement a corrective action plan to address and remedy all deficiencies or violations in a timely manner in response to findings of deficiencies by the Agency [DARS or HHSC] or other federal or state oversight authorities. The corrective action plan must be acceptable to the Agency. The Agency [negotiated to the satisfaction of DARS and HHSC. DARS or HHSC] may subsequently monitor and document the contractor's compliance with the corrective action plan as accepted.

§858.9.Adverse Actions.

(a) The Agency [DARS or HHSC] may impose an adverse action when the contractor fails to follow the terms of the contract or fails to comply with Agency [DARS or HHSC] rules, policies, and procedures. The Agency [DARS or HHSC] may impose adverse actions for reasons including, but not limited to:

(1) the Agency's [DARS' or HHSC's] determination that one or more customers' [consumer] health and safety has been or is jeopardized;

(2) the contractor's failure to submit an acceptable written corrective action plan as requested by the Agency or failure to comply with an accepted [its] corrective action plan;

(3) the contractor's failure to follow an agreed-upon audit resolution payment plan;

(4) the contractor's failure to submit an acceptable cost report, if applicable;

(5) the contractor's failure to comply with the contract [or program] requirements;

(6) the contractor's failure to maintain a current required license or the contractor allowing the expiration of any required license, if applicable;

(7) the contractor's relocation to a new facility address that does not have the appropriate license, if applicable;

(8) the contractor's exclusion from contracting with the Agency or [DARS] any health and human services program;[, or the federal government; or]

(9) debarment or exclusion from a federal program;

(10) [(9)] a validated or reports [report(s)] of abuse, neglect, or exploitation where [when the perpetrator is] an owner, employee, or volunteer who has direct access to customers is the perpetrator of, or enables, the abuse, neglect, or exploitation of a customer; [consumers.]

(11) substantiated claims of fraud against a contractor; and

(12) any other cause of so serious or compelling a nature that it affects the contractor's ability to perform under the contract or presents an imminent risk of harm to or liability for the Agency.

(b) The Agency may take the following [Types of] adverse actions [may include]:

(1) Recoup money that the contractor owes as a result of overpayments or other billing irregularities;

[(1) Recoupment. DARS or HHSC collects money the contractor owes as the result of overpayments or other billing irregularities.]

(2) Place a vendor hold on [Vendor hold. DARS or HHSC withholds the contractor's contract payments. DARS or HHSC may put] one or all [of] the contractor's contracts, which must be [on vendor hold. The vendor hold is] released when the Agency [DARS or HHSC] determines that the contractor has resolved the issue or issues causing the hold; [reason(s) for the hold. In addition to the reasons listed in subsection (a) of this section, DARS or HHSC may place a vendor hold on the contractor's contract(s):]

[(A) to recoup overpayments made to the contractor; or]

[(B) to recover any audit exceptions assessed against the contractor.]

(3) Deny all or part of a claim;

(4) Direct the contractor to suspend or terminate a subcontractor's participation in the provision of goods or services;

(5) Terminate a contract for cause before its expiration date;

(6) Suspend the contractor's right to conduct business with the Agency;

(7) Debar the contractor's right to contract or conduct business with the Agency, in any capacity, for a specified period of time; or

(8) Take any other less severe action or actions, which the Agency determines necessary to ensure the contractor's compliance with the underlying contract, after considering the circumstances of a particular case.

[(3) Denial of claim. DARS or HHSC denies payment in whole or part for a claim filed within program time limits.]

[(4) Suspension of subcontractor's participation or payments; termination of subcontract. DARS or HHSC directs a contractor to suspend a subcontractor's participation, suspend a subcontractor's payments, or terminate a subcontract.]

[(5) Involuntary contract termination. DARS or HHSC may terminate a contract for cause by citing the contractor's failure to comply with the terms of the contract or with DARS or HHSC rules, policies, and procedures.]

[(6) Suspension. DARS or HHSC temporarily suspends the contractor's right to conduct business with DARS. The causes for and conditions of suspension are described in §392.323 of this subchapter (relating to Causes and Conditions of Suspension).]

[(7) Debarment. DARS or HHSC does not allow a contractor to conduct business with DARS, in any capacity, for a certain period of time. The causes for and conditions of debarment are described in §392.321 of this subchapter (relating to Causes and Conditions of Debarment).]

§858.10.Debarment and Suspension of Contractors [Current and Potential Contractor Rights].

(a) Debarment and suspension apply to contracts.

[(a) Requirements in this section apply to all types of contracts with DARS.]

(b) Debarment shall be imposed for a period commensurate with the seriousness of the cause(s). Generally, debarment should not exceed three years, except for violations of 41 USC Chapter 81 Drug Free Workplace. If a suspension precedes a debarment, the suspension period shall be considered in determining the debarment period. The Agency may extend the debarment for an additional period, if the Agency determines that an extension is necessary to protect the Agency's interest. However, a debarment may not be extended solely upon the facts and circumstances upon which the initial debarment action was based. If debarment for an additional period is determined to be necessary, the same procedures to impose an initial debarment shall be followed to extend the debarment.

[(b) Debarment is the termination of rights to continue an existing contract, to receive a new contract, to participate as a contractor or manager, to provide goods or services to DARS consumers either directly or indirectly while working for a DARS or HHSC contractor, or to make a bid, offer, application, or proposal for a DARS or HHSC contract. The debarment is for a specified time commensurate with the seriousness of the violation, the extent of the violation, prior impositions of sanctions or penalties, willingness to comply with program rules and directives, and other pertinent information. Generally, debarment does not exceed six years. Where conditions warrant, a longer period may be imposed.]

(c) A suspension is in effect until an investigation, hearing or trial is concluded and the Agency determines the contractor's future ability to contract or subcontract with the Agency.

[(c) Suspension is the temporary suspension of a contractor's or potential contractor's rights to conduct business with DARS or HHSC. A suspension is in effect until an investigation, hearing, or trial is concluded and DARS can make a determination about:]

[(1) the contractor's future right to contract or subcontract; or]

[(2) a potential contractor's future right to have DARS or HHSC consider its offer, bid, proposal, or application.]

(d) The Agency may suspend a contractor's contract if the Agency suspects that grounds may exist for debarment.

(e) [(d)] For purposes of both debarment and suspension of a contract, the Agency [contractual rights, DARS or HHSC] may impute the conduct of an individual even [an individual, corporation, partnership, or other association to the contractor, potential contractor, or the responsible entity of the contractor or potential contractor with whom the individual, corporation, partnership, or other association is employed or otherwise associated. Even] though the underlying conduct may have occurred while the respondent [an individual, corporation, partnership, or other association] was not associated with the contractor [or potential contractor, suspension of contractual rights or debarment may be imposed. Remedial actions taken by the responsible officials of the contractor or potential contractor are considered in determining whether either suspension of contractual rights or debarment is warranted].

§858.11.Causes and Conditions of Debarment.

(a) The Agency may debar [DARS or HHSC may remove contractual rights from an individual, a corporation, a partnership, or a division of] a contractor [or legal entity] for reasons [causes] including the following:

(1) Being adjudicated as [being found] guilty, pleading guilty, pleading nolo contendere, or receiving a deferred adjudication in a criminal court relating to:

(A) Obtaining, [obtaining] attempting to obtain, or performing a public or private contract or [contractor] subcontract;

(B) Engaging [engaging] in embezzlement, theft, forgery, bribery, falsification or destruction of records, fraud, receipt of stolen property, making false statements or claims, tax evasion, or any other offense indicating moral turpitude or a lack of business integrity or honesty;

(C) Use or possession of [being involved with dangerous drugs,] controlled or illegal substances, or other drug-related offense;

(D) Violating [violating] federal antitrust statutes arising from submitting bids or proposals;

(E) Committing [committing] an offense involving physical or sexual abuse or neglect; or

(F) Committing an offense involving the direct support or promotion of human trafficking.

(2) Being [being] debarred from contracting by any unit of the federal or [government or any unit of a] state government;

(3) Violating Agency [violating DARS or HHSC] contract provisions, including failing to perform according to the terms, conditions, and specifications, or within the time [limit(s)] specified, in an Agency [a DARS or HHSC] contract, including, but not limited to, the following:

(A) Failing [failing] to abide by applicable federal and state statutes, rules, regulations, policies, and procedures, such as those regarding individuals [persons] with disabilities and those regarding civil rights;

(B) Having [having] a record of failure to perform or of unsatisfactory performance according to the terms of one or more contracts or subcontracts, if that failure or unsatisfactory performance has occurred within five years preceding the determination to debar. [This subparagraph applies only for actions occurring after the effective date of these rules.] Failure to perform and unsatisfactory performance include, but are not limited to, [includes] the following:

(i) Failing [failing] to correct contract performance deficiencies after receiving written notice about them from the Agency [DARS, HHSC,] or its [their] authorized agents;

(ii) Failing [failing] to repay or make and complete [follow through with] arrangements satisfactory to the Agency [DARS or HHSC] to repay identified overpayments or other erroneous payments, or assessed liquidated damages or penalties;

(iii) Failing [failing] to meet standards that are required for licensure or certification, or that are required by state or federal law, Agency [DARS or HHSC] rules, or Agency policy [or standards incorporated in contracts] concerning contractors [DARS contracts];

(iv) Failing [failing] to execute contract amendments required by the Agency [DARS or HHSC];

(v) Billing [billing] for services or goods [merchandise] not provided to the customer [consumer];

[(vi) submitting cost reports containing costs not associated with or not covered by the contract or DARS rules and instructions. Intent to increase individual or statewide rates or fees by submitting unallowable costs must be shown for a single cost report, but intent may be inferred when a pattern of submitting cost reports with unallowable costs is shown;]

(vi) [(vii)] Submitting [submitting] a false report or misrepresentation which, if used, may increase individual or statewide rates or fees;

(vii) [(viii)] Charging customers [charging consumer or patient] fees contrary to Agency [DARS or HHSC] rules or policy;

(viii) [(ix)] Failing [failing] to notify and reimburse the Agency [DARS] or its agents for services that the Agency [DARS] paid for when the contractor received reimbursement from a liable third party;

(ix) [(x)] Failing [failing] to disclose or make available[,] upon demand[,] to the Agency [DARS] or its representatives (including appropriate federal and state agencies) records that the contractor is required to maintain;

(x) [(xi)] Failing [failing] to provide and maintain services within standards required by statute, regulations [regulation], or contract; or

(xi) [(xii)] Violating [violating] the Texas Human Resources, Government, or Labor Code provisions applicable to the contractor [contract] or any rule or regulation issued under the referenced Codes [Code];

(4) Submitting [submitting] an offer, bid, proposal, or application that contains a false statement or misrepresentation or omits pertinent facts or documents that are material to the procurement;

(5) Engaging [engaging] in an abusive or neglectful practice that results in or could result in death or injury to the customer [consumer] served by the contractor; [or]

(6) Knowingly [knowingly] and willfully using a debarred individual [person or legal entity] as an employee, independent contractor, or agent associated with any service provided in performance of [to perform] a contract with the Agency; [DARS or HHSC.]

(7) Failure to pay a substantial debt or debts, including disallowed costs and overpayments, owed to any federal or state agency instrumentality, provided the debt is uncontested by the debtor or, if contested, provided that the debtor's legal and administrative remedies have been exhausted; or

(8) Any other cause of a serious or compelling nature that affects a contractor's present or future ability to perform under the contract or that presents an imminent risk of harm to or liability for the Agency;

(b) In accordance with terms specified by the Agency, an individual [DARS or HHSC, individuals, parts of entities, and entities] that has [have] been debarred may not:

(1) receive a contract;

(2) be allowed to retain a contract that has been awarded before debarment;

[(3) bid or otherwise make offers to receive a contract or subcontract;]

(3) [(4)] participate as a vendor in Agency [DARS] programs that do not require the individual [contractor] to sign a contract or agreement;

(4) provide goods or services to Agency customers either directly or indirectly while working for an Agency contractor; or

(5) either directly or through an intermediary, bill to or receive payment from the Agency for any services or supplies provided by the debarred individual on or after the effective date of the debarment. The Agency will not pay for any services ordered, prescribed, or delivered by the debarred individual to Agency customers after the date of debarment. No costs associated with a debarred individual, including the salary, fringe benefits, overhead, payments to, or any other costs associated with an individual who was debarred may be included in an Agency cost report or any other document that will be used to determine an individual payment rate, a statewide payment rate, or a fee. Nothing in this provision shall be construed in a manner that would prevent a debarred individual, who is also a VR customer, from receiving VR services as a VR customer.

[(5) either personally or through a clinic, group, corporation, or other association, bill to or receive payment from DARS for any services or supplies provided by the debarred entity on or after the effective date of the debarment. Additionally, DARS will not pay for any services ordered, prescribed, or delivered by the debarred entity for DARS recipients after the date of debarment. No costs associated with a debarred entity, including the salary, fringe, overhead, payments to, or any other costs associated with an employee, owner, officer, director, board member, independent contractor, manager, or agent who was debarred may be included in a DARS cost report or any other document that will be used to determine an individual payment rate, a statewide payment rate, or a fee; or]

[(6) provide goods or services to DARS consumers either directly or indirectly while working for a DARS contractor.]

(c) A single occurrence of a violation may result in debarment or suspension.

[(c) Debarment may be applied against an individual, a corporation, a partnership, a division of a contractor, or an entire legal entity, or a specified part of a legal entity.]

[(d) Even a single occurrence of a violation may result in debarment or suspension if it is severe. Other adverse actions may be taken if the violation is isolated or less severe.]

§858.12.Causes and Results [Conditions] of Suspension.

(a) The Agency [DARS or HHSC] may suspend a contract [contractor's or potential contractor's contractual rights] whenever [DARS or HHSC finds that there is a reasonable basis to believe that] grounds for debarment exist.

(b) Suspension will result in one or more of the [may be imposed immediately] following: [DARS' or HHSC's notification to a contractor or potential contractor. In addition, suspension may be imposed on a potential contractor if the contractor has an outstanding indictment or DARS or HHSC has information about an offense that is grounds for indictment.]

[(b)] [The conditions of suspension are:]

(1) The Agency [DARS or HHSC] may withhold payments, wholly or partly, to the [affected] contractor during the period of suspension.

(2) The Agency [DARS or HHSC] may refuse to accept a bid, offer, application, or proposal from, or to award a contract to, the affected [potential] contractor during the period of suspension.

(3) The Agency [DARS or HHSC] may remove existing customers referred from or cease referring customers [referrals of additional consumers] to a [the] suspended contractor [entity] and may transfer existing customers [consumers] to other contractors.

(c) If the Agency [DARS or HHSC] determines that the underlying reasons for suspension have been resolved in favor of the respondent, the Agency [contractor, DARS or HHSC] must, if applicable:

(1) pay the withheld payments for [any] services that were provided during the suspension and that met the terms of an existing contract; and

(2) resume contract payments and customer [consumer] referrals.

(d) If the Agency [DARS or HHSC] determines that the underlying reasons for [the] suspension are [have] not [been] resolved in favor of the respondent, the Agency shall institute [contractor, DARS or HHSC institutes] debarment proceedings.

(e) In accordance with terms specified by the Agency, an individual [DARS or HHSC, individuals and entities] whose contract has [contractual rights have] been placed in suspension may not:

(1) receive a contract;

(2) submit an offer, bid, application, or proposal for a contract; or

(3) provide goods or services to Agency customers [DARS or HHSC consumers] either directly or indirectly while working for an Agency [a DARS] contractor.

(f) A suspension may be applied against an individual, an entire legal entity, or a specified part of a legal entity.

§858.13.Evidence for Debarment [or Suspension].

In making a debarment decision, the Agency may consider the following factors:

(1) The actual or potential harm or impact that results or may result from the wrongdoing.

(2) The frequency of incidents and/or duration of the wrongdoing.

(3) Whether there is a pattern or history of wrongdoing.

(4) Whether an individual is or has been disqualified by an agency of the federal government or has not been allowed to participate in state or local contracts or assistance agreements based on conduct similar to one or more of the causes for debarment specified in this part.

(5) Whether and to what extent the individual planned, initiated, or carried out the wrongdoing.

(6) Whether the individual accepted responsibility for the wrongdoing and recognized the seriousness of the misconduct that led to the cause for debarment.

(7) Whether the individual paid or agreed to pay all criminal, civil and administrative liabilities for the improper activity, including any investigative or administrative costs incurred by the government, and has made or agreed to make full restitution.

(8) Whether the individual cooperated fully with the government agencies during the investigation and with any court or administrative action. In determining the extent of cooperation, the Agency may consider when the cooperation began and whether the individual disclosed all pertinent information known to the individual.

(9) Whether the wrongdoing was pervasive within the individual's organization.

(10) The types of positions held by the individuals involved in the wrongdoing.

(11) Whether the individual's organization took appropriate corrective action or remedial measures.

(12) Whether the individual's principals tolerated the offense.

(13) Whether the individual brought the activity cited as a basis for the debarment to the attention of the appropriate Agency representative in a timely manner.

(14) Whether the individual fully investigated the circumstances surrounding the cause for debarment and, if so, made the result of the investigation available to the Agency.

(15) Whether the individual had effective standards of conduct and internal control systems in place at the time the questioned conduct occurred.

(16) Whether the individual took appropriate disciplinary action against the individuals responsible for the activity that constitutes the cause for debarment.

(17) Whether the individual had adequate time to eliminate the circumstances within the individual's organization that led to the cause for the debarment.

(18) Other factors related to the contractor's required performance under the contract that the Agency determines are appropriate to the circumstances of a particular case.

The sufficiency of evidence required depends on the cause of the suspension or debarment.]

[(1) If there is evidence that the contractor or potential contractor has been found guilty, pleaded guilty, pleaded no contest, or received a deferred adjudication in criminal court relating to an activity prohibited in this chapter, that is sufficient evidence to suspend or debar. If the decision that caused debarment is reversed on appeal, the contractor must provide written proof of the reversal to have its contract rights restored. DARS or HHSC restores contract rights unless the contractor is also debarred or suspended on other grounds.]

[(2) If the cause is debarment from contracting by any unit of the federal government or any unit of a state government, it is sufficient to offer official notice from the other state or federal agency that the entity has been debarred. The notice may be addressed to either DARS or HHSC.]

[(3) Other causes of debarment or suspension may be established by evidence of failure to meet contracting terms or standards, including evidence of the severity or recurrence of violations of performance requirements.]

§858.14.Notice for Debarment or Suspension.

Written notices of suspension or debarment must include the following, as applicable:

(1) the grounds for the action;

(2) the length of the debarment;

(3) the conditions that might cause a suspension to be released;

(4) a statement explaining the effect of the suspension or debarment; and

(5) a statement as to [of] whether the suspension or debarment is in effect for all Agency contracts [throughout DARS] or just for [in] a particular Agency contract [DARS program].

§858.15.Appeals.

(a) A contractor may [has the right to] appeal an initial [any] adverse action rendered [imposed] by the Agency under §858.9 of this chapter by hand delivery, mail, common carrier, facsimile (fax) transmission, or other method approved by the Agency in writing [DARS]. A contractor shall only submit an appeal by hand delivery, mail, or common carrier to the Agency as directed on the Contractor Notice of Appeal Rights (VR 1309). An appeal sent by unapproved methods or to a different address will not be considered by the Agency as a valid appeal.

(b) The Agency's initial adverse action is final for all purposes unless the contractor files an appeal not later than 28 calendar days after the date on which the initial adverse action is mailed, sent by electronic mail, or sent by facsimile to the contractor. The timeliness of an appeal is subject to the rules and procedures set out in the Unemployment Insurance rules at 40 TAC Chapter 815, except to the extent that such sections are clearly inapplicable or contrary to provisions set out under these Chapter 858 rules or the contract between the parties. [To appeal an adverse action, the contractor, referred to in this subchapter as the appellant, must ensure that DARS receives a written request for an appeal within 30 days of the contractor's receipt of the notice of adverse action.]

[(c) The appellant must ensure that the request for an appeal:]

[(1) clearly states that the purpose of the letter is to appeal DARS' adverse action;]

[(2) is received by DARS at the address provided in the notice of adverse action letter;]

[(3) is received by DARS according to time frames provided in this section; and]

[(4) includes all required information and documentation as outlined in this section.]

(c) [(d)] To be considered, the appeal must include the following:

(1) A statement of facts describing how an Agency [a] decision, action, or inaction [by DARS] deviated from contract terms, published policy, or state or federal laws or regulations;

(2) The contractor's [appellant's] claim, including pertinent contract sections;

(3) A statement of the issue or issues [issue(s) ] in dispute;

(4) A brief statement about why the Agency's initial adverse action [DARS' decision] is wrong;

(5) Copies of evidence or documentation supporting the appeal; and

(6) The action requested.

(d) The contractor may supplement its appeal after being perfected but before the Agency rendering a decision on the merits.

(e) As part of the appeal, the contractor may also request a meeting with the Agency. Whether a meeting will be granted is at the Agency's discretion. The meeting request should include a description of any special accommodations needed for the contractor, witnesses, or representatives. At the meeting, the contractor may:

(1) be represented by an individual of the contractor's selection; and

(2) present evidence and information to support the contractor's position.

[(e) In the request for an appeal letter, the appellant may also request a meeting with DARS. This request should include a description of any special accommodations needed for the appellant, witnesses, or representatives. At the meeting, the appellant:]

[(1) may be represented by a person of his or her selection; and]

[(2) will be provided with an opportunity to present evidence and information to support his or her position.]

(f) The Agency will notify the contractor whether its appeal has been perfected and has met the requirements in subsection (c) of this section for consideration on its merits. If the appeal does not meet the requirements, [of this chapter, DARS will notify] the [appellant that their request for an] appeal will be [is] denied, and the initial adverse action will be the Agency's final decision [because it did not meet requirements].

(g) An Agency appeal decision becomes final 14 [DARS provides a written decision to the appellant within 30 days after conclusion of the meeting, or if no meeting is held, within 45] days after the date [DARS receives] the appeal decision is mailed, [appeal,] unless the contractor files a written request for reconsideration before that date [the appropriate DARS representative extends the time].

§858.16.Request for Reconsideration.

(a) The contractor [After DARS issues a decision on an appeal, the appellant] may submit [in writing] a request for reconsideration following the Agency's issuance of the appeal decision by hand delivery, mail, common carrier, facsimile (fax) transmission, or other method approved by the Agency in writing:

(1) A request for reconsideration shall only be hand delivered, mailed, or sent by common carrier to the Agency as directed on the Contractor Notice of Rights (VR 1309). A request for reconsideration sent by unapproved methods or to a different address will not be considered a valid request for reconsideration by the Agency.

(2) The timeliness of a request for reconsideration is subject to the rules and procedures set out in the Unemployment Insurance rules at Chapter 815 of this title, except to the extent that such sections are clearly inapplicable or contrary to provisions set out under these Chapter 858 rules or the contract between the parties.

[(b) An appellant may submit a request for reconsideration only if the appellant's request for an appeal met the requirements set out in §392.329 of this subchapter (relating to Appeals).]

[(c) Requests for reconsideration must be addressed to the DARS commissioner and must be received by DARS within 20 days after the date DARS issues the decision on the appeal.]

[(d) The DARS commissioner may designate a representative(s) to receive the request for reconsideration and issue a decision on behalf of DARS.]

(b) [(e)] A [The] request for reconsideration shall not be granted unless each of the following three criteria are met [must]:

(1) there is an offering of new evidence, which was not presented as part of the original [clearly state that the purpose of the letter is to request reconsideration of DARS' decision on an] appeal pursuant to §858.15 of this chapter;

(2) there is a compelling reason why the evidence was not presented earlier; and

(3) there is a specific explanation of how consideration of the evidence would change the outcome of the decision.

[(2) specifically point out any errors in the appeal decision;]

[(3) specify all relief requested; and]

[(4) state all reasons why the relief should be granted.]

(c) The Agency's decision on the request for reconsideration is the final decision of the Agency.

[(f) DARS issues a decision on the request for reconsideration no later than 45 days after receipt of the request for reconsideration. The decision may affirm, reverse, or modify the adverse action previously imposed by DARS.]

[(g) The decision on the request for reconsideration is the final decision of DARS. However, if the contractor believes DARS breached the contract, the contractor may pursue further action according to Government Code, Chapter 2260.]

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 February 7, 2020.

TRD-202000473

Jason Vaden

Director, Workforce Program Policy

Texas Workforce Commission

Earliest possible date of adoption: March 22, 2020

For further information, please call: (512) 689-9855