TITLE 25. HEALTH SERVICES

PART 1. DEPARTMENT OF STATE HEALTH SERVICES

CHAPTER 229. FOOD AND DRUG

SUBCHAPTER X. LICENSING OF DEVICE DISTRIBUTORS AND MANUFACTURERS

The executive commissioner of the Texas Health and Human Services Commission (HHSC), on behalf of the Department of State Health Services (DSHS), proposes amendments to §§229.432 - 229.437, 229.439 - 229.443, concerning Licensing of Device Distributors and Manufacturers, and the repeal of §229.444, concerning Device Distributors and Manufacturers Advisory Committee.

BACKGROUND AND PURPOSE

The purpose of the proposal is to continue adherence with applicable federal laws pertaining to medical devices. The proposed amendments align the minimum standards in the Texas Administrative Code with new device Good Manufacturing Practice requirements under 21 Code of Federal Regulations (CFR) Part 820, which take effect on February 2, 2026. The proposal repeals §229.444 because the advisory committee no longer exists. The proposed amendment to §229.443 adds language relating to enforcement and penalties. The proposed amendments update the licensure fees based on a licensee's gross sales. The proposed amendments update definitions to clarify intent and improve compliance by harmonizing state and federal regulations. Lastly, the proposed amendments update the rules with plain language requirements to improve readability.

SECTION-BY-SECTION SUMMARY

The proposed amendment to §229.432 replaces wording for consistency throughout this section. The proposed amendment updates the link to the DSHS website. The proposed amendment updates a federal reference.

The proposed amendment to §229.433 adds definitions to comply with CFR updates and replaces wording for consistency throughout this section. The proposed amendment provides deleted, revised, and new definitions. The proposed amendment adds clarity to the rule language and ensures consistency in interpretation of the rule. The proposed amendment updates federal reference citations.

The proposed amendment to §229.434 provides revised language to add clarity to the rule language.

The proposed amendment to §229.435 updates wording for clarity and updates DSHS contact information.

The proposed amendment to §229.436 updates the link to the DSHS website and replaces wording for consistency throughout this section.

The proposed amendment to §229.437 replaces wording for consistency throughout this section and adds clarity to rule language.

The proposed amendment to §229.439 replaces wording for consistency throughout this section and adds clarity to rule language. The proposed amendments update the licensure fees based on a licensee's gross sales. The proposed amendment updates the link to the DSHS website.

The proposed amendment to §229.440 replaces wording for consistency throughout this section.

The proposed amendment to §229.441 replaces wording for consistency throughout this section and adds clarity to rule language. The proposed amendment updates federal and state citations throughout this section. The proposed amendment expands on definitions to add clarity to rule interpretation. The proposed amendment corrects grammatical errors.

The proposed amendment to §229.442 replaces wording for consistency throughout this section.

The proposed amendment to §229.443 adds new language on general enforcement actions and penalties, and replaces wording for consistency throughout this section.

The proposed repeal of §229.444 is required because the advisory committee no longer exists.

FISCAL NOTE

Christy Havel-Burton, DSHS Chief Financial Officer, has determined that for each year of the first five years that the rules will be in effect, there will be an increase in revenue to state government because of enforcing or administering the rules as proposed. Enforcing or administering the rules does not have foreseeable implications relating to costs or revenues of local governments.

The effect on state government for each year of the first five years the proposed rules are in effect is an estimated increase in revenue of $224,884 in fiscal year (FY) 2026, $224,884 in FY 2027, $224,884 in FY 2028, $224,884 in FY 2029, and $224,884 in FY 2030.

GOVERNMENT GROWTH IMPACT STATEMENT

DSHS has determined that during the first five years that the proposed rules and the repeal will be in effect:

(1) the proposed rules will not create or eliminate a government program;

(2) implementation of the proposed rules will not affect the number of DSHS employee positions;

(3) implementation of the proposed rules will result in no assumed change in future legislative appropriations;

(4) the proposed rules will require an increase in fees paid to DSHS;

(5) the proposed rules will not create a new regulation;

(6) the proposed rules will expand and repeal existing regulations;

(7) the proposed rules will not change the number of individuals subject to the rules; and

(8) the proposed rules will not affect the state's economy.

SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COMMUNITY IMPACT ANALYSIS

Christy Havel-Burton has also determined that there will be adverse economic effect on small businesses, micro-businesses, or rural communities because the rules do impose additional costs that are required to comply with the rules. DSHS estimates that the number of small businesses, micro-businesses, and rural communities subject to the proposed rules are approximately 2,480 businesses. The projected economic impact for small businesses, micro-businesses, and rural communities are a 15%-20% increase in licensure fees based on gross annual sales.

LOCAL EMPLOYMENT IMPACT

The proposed rules will not affect a local economy.

COSTS TO REGULATED PERSONS

Texas Government Code §2001.0045 does not apply to these rules because the rules are necessary to protect the health, safety, and welfare of the residents of Texas and are necessary to receive a source of federal funds or comply with federal law.

PUBLIC BENEFIT AND COSTS

Timothy Stevenson, Deputy Commissioner, Consumer Protection Division, has determined that for each year of the first five years the rules and repeal are in effect, the public benefit will be improved rule clarity and greater compliance with updated Good Manufacturing Practices, which help ensure that medical devices produced in the state are safe and effective for their intended use.

Christy Havel Burton, Chief Financial Officer, has also determined that for the first five years the rules and repeal are in effect, there are anticipated economic costs to persons who are required to comply with the proposed repeal or the proposed amendments.

TAKINGS IMPACT ASSESSMENT

DSHS has determined that the proposal does not restrict or limit an owner's right to the owner's property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code §2007.043.

PUBLIC COMMENT

Written comments on the proposal may be submitted to Rules Coordination Office, P.O. Box 13247, Mail Code 4102, Austin, Texas 78711-3247, or street address 4601 West Guadalupe Street, Austin, Texas 78751; or emailed to HHSRulesCoordinationOffice@hhs.texas.gov.

To be considered, comments must be submitted no later than 31 days after the date of this issue of the Texas Register. Comments must be (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered before 5:00 p.m. on the last working day of the comment period; or (3) emailed before midnight on the last day of the comment period. If the last day to submit comments falls on a holiday, comments must be postmarked, shipped, or emailed before midnight on the following business day to be accepted. When emailing comments, please indicate "Comments on Proposed Rules 25R022" in the subject line.

STATUTORY AUTHORITY

The amendments are authorized by Texas Government Code §524.0151 and Texas Health and Safety Code §1001.075, which authorize the executive commissioner of HHSC to adopt rules and policies for the operation and provision of health and human services by DSHS and the administration of Texas Health and Safety Code Chapter 1001, and by Texas Health and Safety Code §431.241.

The amendments affect Texas Government Code §524.0151 and Texas Health and Safety Code Chapters 1001 and 431.

§229.432. Applicable Laws and Regulations.

(a) The department adopts by reference the following laws and regulations:

(1) Federal Food, Drug, and Cosmetic Act, 21 United States Code, et seq., as amended;

(2) 21 Code of Federal Regulations (CFR)[,] Part 801, Labeling, as amended;

(3) 21 CFR[,] Part 803, Medical Device Reporting, as amended;

(4) 21 CFR[,] Part 807, Establishment Registration and Device Listing for Manufacturers and Initial Importers of Devices, as amended;

(5) 21 CFR[,] Part 814, Premarket Approval of Medical Devices, as amended;

(6) 21 CFR[,] Part 820, Quality Management System Regulation, as amended; and

(7) 21 CFR[,] Subchapter J--Radiological Health, as amended.

(b) Copies of these laws and regulations are indexed and filed at the department, 1100 West 49th Street, Austin, Texas 78756, and are available for inspection during normal working hours. Electronic copies of these laws and regulations are available online at https://www.dshs.texas.gov [http://www.dshs.state.tx.us/license.shtm].

(c) Nothing in these sections relieves [shall relieve] any person of the responsibility for compliance with other applicable Texas and federal laws and regulations.

§229.433. Definitions.

The following words and terms, when used in these sections, [shall] have the following meanings, unless the context clearly indicates otherwise.

(1) Act--The Texas Food, Drug, and Cosmetic Act, Texas Health and Safety Code (HSC)[,] Chapter 431.

(2) Adulterated Device--Has the meaning specified in the Texas Food, Drug, and Cosmetic Act, HSC [Health and Safety Code, Chapter 431,] §431.111.

(3) Advertising--All representations disseminated in any manner or by any means, other than by labeling, for the purpose of inducing, or that are likely to induce, directly or indirectly, the purchase of food, drugs, devices, or cosmetics.

(4) Authorized agent--An employee of the department who is designated by the commissioner to enforce the provisions of this chapter.

(5) Commissioner--The commissioner of the Department of State Health Services, [Commissioner of Health] or the commissioner's [his] successor or designee.

(7) [(6)] Department--The Department of State Health Services.

(8) [(7)] Device--An instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory[, that is]:

(A) recognized in the official United States Pharmacopoeia National Formulary or any supplement to it;

(B) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease in man or other animals; or

(C) intended to affect the structure or any function of the body of man or other animals and that does not achieve any of its principal intended purposes through chemical action within or on the body of man or other animals and is not dependent on metabolization for the achievement of any of its principal intended purposes. The term "device" does not include software functions excluded by the Federal Food, Drug, and Cosmetic Act, 21 United States Code §360j(o).

(9) [(8)] Distributor--A person who furthers the marketing of a finished domestic or imported device from the original place of manufacture to the person who makes final delivery or sale to the ultimate user. The term includes an importer or an own-label distributor. The term does not include a person who repackages a finished device or who otherwise changes the container, wrapper, or labeling of the finished device or the finished device package.

(10) [(9)] Electronic product radiation--Any ionizing or nonionizing electromagnetic or particulate radiation, or any sonic, infrasonic, or ultrasonic wave, that [which] is emitted from an electronic product as the result of the operation of an electronic circuit in such product.

(11) [(10)] Finished device--A device, or any accessory to a device, that [which] is suitable for use, whether or not packaged or labeled for commercial distribution.

(12) Health authority--A physician designated to administer state and local laws relating to public health.

(13) Importer--Any person who initially distributes a device imported into the United States.

(14) Ionizing radiation--Any electromagnetic or particulate radiation capable of producing ions, directly or indirectly, in its passage through matter. Ionizing radiation includes gamma rays and x-rays, alpha and beta particles, high speed electrons, neutrons, and other nuclear particles.

(15) Labeling--All labels and other written, printed, or graphic matter:

(A) upon any article or any of its containers or wrappers; or

(B) accompanying such article.

(16) Manufacture--The making by chemical, physical, biological, or other procedures of any article that meets the definition of device. The term includes the following activities:

(A) repackaging or otherwise changing the container, wrapper, or labeling of any device package in furtherance of the distribution of the device from the original place of manufacture to the person who makes final delivery or sale to the ultimate consumer; [or]

(B) initiation of specifications for devices that are manufactured by a second party for subsequent commercial distribution by the person initiating specifications; or[.]

(17) Manufacturer--A person who manufactures, fabricates, assembles, or processes a finished device. The term includes a person who repackages or relabels a finished device. The term does not include a person who only distributes a finished device.

(18) Misbranded Device--Has the meaning specified in the Texas Food, Drug, and Cosmetic Act, HSC [Health and Safety Code, Chapter 431,] §431.112.

(19) Person--Includes individual, partnership, corporation, and association.

(20) Place of business--Each location at which a device is manufactured or held for distribution.

(21) Practitioner--As defined in HSC §483.001(12) [Means a person licensed by the Texas State Board of Medical Examiners, State Board of Dental Examiners, Texas State Board of Podiatric Medical Examiners, Texas Optometry Board, or State Board of Veterinary Medical Examiners to prescribe and administer prescription devices].

(22) Prescription device--A restricted device that [which], because of any potentiality for harmful effect, or the method of its use, or the collateral measures necessary to its use is not safe except under the supervision of a practitioner licensed by law to direct the use of such device, and hence for which adequate directions for use cannot be prepared.

(23) Radiation machine--Any device capable of producing ionizing radiation except those devices with radioactive material as the only source of radiation.

(24) Radioactive material--Any material (solid, liquid, or gas) that emits radiation spontaneously.

(25) Reconditioning--Any appropriate process or procedure by which distressed merchandise can be brought into compliance with departmental standards as specified in the Texas Food, Drug, Device, and Cosmetic Salvage Act, HSC [Health and Safety Code, Chapter 432,] §432.003, as defined [interpreted] in the rules in §229.603 [§229.192] of this chapter [title] (relating to Definitions).

(26) Restricted device--A device subject to certain controls related to sale, distribution, or use as specified in the Federal Food, Drug, and Cosmetic Act, 21 United States Code §360(j) [as amended, §520(e)(1)].

§229.434. Exemptions.

(a) A person is exempt from licensing under §229.435 of this subchapter [title] (relating to Licensure Requirements) if the person engages only in the following types of device distribution:

(1) intracompany sales;

(2) distribution from a place of business located outside the State of Texas; or

(3) the sale, purchase, or trade of a distressed or reconditioned device by a salvage broker or a salvage operator licensed under §229.605 of this chapter [title] (relating to Licensing Requirements and Procedures).

(b) A person is exempt from licensing under §229.435 of this subchapter [title] if the person holds a registration certificate issued under Texas Occupations Code[,] Chapter 266[,] and engages only in conduct within the scope of that registration.

(d) [(c)] This section does not exempt a person from other applicable provisions of the Texas Food, Drug, and Cosmetic Act, HSC [Health and Safety Code,] Chapter 431; the Texas Dangerous Drug Act, HSC [Health and Safety Code,] Chapter 483; or the rules adopted to administer and enforce those chapters.

§229.435. Licensure Requirements.

(a) General. A [Except as provided by §229.434 of this title (relating to Exemptions), a] person may not distribute [engage in the distribution] or manufacture [of] devices in Texas unless the person has a valid license from the commissioner [Commissioner of the Department of State Health Services (commissioner)] for each place of business, unless exempted by §229.434 of this subchapter (relating to Exemptions).

(b) Proof [Display] of licensure [license]. The license holder must show proof of licensure in a format readily available to the [shall be displayed in an open] public [area at each place of business].

(c) Existing place of business. Each person distributing or manufacturing [involved in the distribution or manufacture of] devices in Texas on the effective date of these sections must apply for a device distributor or manufacturer license no later than 60 days following the effective date [of these sections].

(d) New place of business. Each person who acquires or establishes [acquiring or establishing] a place of business to distribute or manufacture devices must [for the purpose of device distribution or manufacturing after the effective date of these sections shall] apply to the department [Department of State Health Services (department)] for a license before [of such business prior to] beginning operations [operation].

(e) Two or more places of business. If the device distributor or manufacturer operates more than one place of business, the device distributor or manufacturer must [shall] license each place of business separately.

(f) Issuance of license. Under [In accordance with] §229.281 of this chapter [title] (relating to Processing License/Permit Applications Relating to Food and Drug Operations), the department may issue a license to a device distributor or manufacturer [of devices] who meets all applicable [the] requirements [of these sections,] and pays all fees as required by [in compliance with] §229.439 of this subchapter (relating to Licensure Fees) [title (relating to Licensing Fees)].

(g) Transfer of license. A person may not transfer a license to another person or to a different place of business [Licenses shall not be transferable from one person to another or from one place of business to another].

(h) License term. A license remains valid for two years unless it [Unless the license] is amended under [as provided in] subsection (j) of this section or revoked or suspended under [as provided in] §229.440 of this subchapter (relating to Refusal, Cancellation, Suspension, or Revocation of License [title (relating to Refusal, Cancellation, Suspension, or Revocation of a License), the license is valid for two years].

(i) Renewal of license.

(1) A person must submit the [The] license application [as] outlined in §229.436(b) of this subchapter [title] (relating to Licensing Procedures) and must pay the nonrefundable license fee [licensing fees as outlined in §229.439 of this title (relating to Licensing Fees)] for each place of business as outlined in §229.439 of this subchapter before [shall be submitted to the department prior to the expiration date of] the current license expires. A person who submits [files] a renewal application after the expiration date must pay a [an additional] $100 [as a] delinquency fee.

(2) A licensee who fails to submit a renewal application before the license [prior to the current licensure] expiration date and continues to operate [operations] may be subject to [the] enforcement and penalties under [penalty provisions in] §229.443 of this subchapter [title] (relating to Enforcement and Penalties) and to[, and/or the] revocation or [and] suspension of the license under [provisions in] §229.440 of this subchapter [title].

(3) The department must issue a renewal license only after receiving [A renewal license shall only be issued when] all past due fees [and delinquency fees are paid].

(j) Amendment of license. To amend a license, including a name change, or a change in the location of a licensed business, a person must submit [A license that is amended, including a change of name, ownership, or a notification of a change in the location of a licensed place of business will require submission of] an application as outlined in §229.436 of this subchapter and pay the applicable [title (relating to Licensing Procedures) and submission of] fees as outlined in §229.439 of this subchapter [title (relating to Licensing Fees)].

(k) Notification of change of location of place of business. [Not fewer than 30 days in advance of the change, the licensee shall notify the commissioner or the commissioner's designee in writing of the licensee's intent to change the location of a licensed place of business. The notice shall include the address of the new location, and the name and residence address of the individual in charge of the business at the new location. Not more than ten days after the completion of the change of location, the licensee shall notify the commissioner or the commissioner's designee in writing to verify the change of location, the specific date of change, the new location, the address of the new location, and the name and residence address of the individual in charge of the business at the new address. Notice will be deemed adequate if the licensee provides the intent and verification notices to the commissioner or the commissioner's designee by certified mail, return receipt requested, mailed to the department, 1100 West 49th Street, Austin, Texas.]

(l) Combination products. If the United States Food and Drug Administration determines that a combination product's [, with respect to a product that is a combination of a drug and a device, that the] primary mode of action [of the product] is that of [as] a device, a distributor or manufacturer of the product is subject to licensure as described in this section.

(m) Texas.gov [Texas Online]. Applicants may submit initial and renewal license applications electronically at www.texas.gov [under these sections electronically by the Internet through Texas Online at www.texasonline.state.tx.us]. The department is authorized to collect fees, in amounts determined by the Texas Online Authority, to recover costs of processing applications and renewals through the website [associated with application and renewal application processing through Texas Online].

§229.436. Licensing Procedures.

(a) License application forms. Applicants may obtain application forms online at www.texas.gov or from the department at [License application forms may be obtained from the department,] 1100 West 49th Street, Austin, Texas, 78756 [or online at http://dshs.state.tx.us/license.shtm].

(b) Contents of license application. The applicant must complete and submit a license application form provided by the department. The application must be signed, verified, and include [The application for licensure as a device distributor or manufacturer shall be signed and verified, submitted on a license application form furnished by the department, and contain the following information]:

(1) the name of the legal entity being [to be] licensed, including the name under which the business operates [is conducted];

(2) the address of each licensed place of business [that is licensed];

(4) the individual details, including the name, residence address, and valid driver license number for each individual in an [actual] administrative role: [capacity which,]

(A) for proprietorships, [in the case of proprietorship, shall be] the managing proprietor;

(B) for partnerships [partnership], the managing partner;

(C) for corporations [corporation], the officers and directors; or

(D) for any other type of association, those in a managerial capacity [in any other type of association];

(5) [for each place of business,] the residence address of the individual in charge at each place of business [thereof];

(6) selection [a list] of categories for calculation [which must be marked and adhered to in the determination] and payment of [the] fee; and

(7) a signature of verification by the applicant [statement verified by the applicant's signature] that acknowledges the applicant has read, understood, and agrees to abide by the provisions of these sections and those of the Texas Food, Drug, and Cosmetic Act, HSC [Health and Safety Code,] Chapter 431.

(c) Renewal license application. The renewal application for licensure as a device distributor or manufacturer must [shall] be made on a license application form furnished by the department.

§229.437. Report of Changes.

The license holder must [shall] notify the department in writing within 10 [ten] days of any change that [which] would render the information contained in the application for the license, as outlined in [reported pursuant to] §229.436 of this subchapter [title] (relating to Licensing Procedures), no longer accurate. Failure to notify [inform] the department within 10 days [no later than ten days of a change in the information required in the application for a license] may result in administrative penalties [a suspension or revocation of the license].

§229.439. Licensure Fees.

(a) License fee.

(1) A person must obtain a license from the department before operating or conducting business as a device distributor. [No person may operate or conduct business as a device distributor without first obtaining a license from the department.] All applicants for a device distributor license or a renewal license must [shall] pay a non-refundable licensing fee. The department issues licenses for [All fees are nonrefundable. Licenses are issued for] two-year terms and will [. A license shall] only issue a license [be issued] when all past due [fees and delinquency] fees are paid. License fees are based on gross annual device sales.

(A) For a distributor with gross annual device sales of $0 - $499,999.99, the fees are:

(i) $552 [$480] for a two-year license;

(ii) $552 [$480] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $276 [$240] for a license [that is] amended during the current licensure period for [due to] minor changes.

(B) For a distributor with gross annual device sales of $500,000 - $9,999,999.99, the fees are:

(i) $1,296 [$1,080] for a two-year license;

(ii) $1,296 [$1,080] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $648 [$540] for a license [that is] amended during the current licensure period for [due to] minor changes.

(C) For a distributor with gross annual device sales greater than or equal to $10 million, the fees are:

(i) $2,016 [$1,680] for a two-year license;

(ii) $2,016 [$1,680] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $1,008 [$840] for a license [that is] amended during the current licensure period for [due to] minor changes.

(2) If a [A] person who is required to be licensed as a device distributor under this section [and who] is also required to be licensed as a wholesale drug distributor under §229.246(a) of this chapter (relating to Licensure Requirements) [§229.252(a)(1) of this title (relating to Licensing Fee and Procedures)] or [as] a wholesale food distributor under §229.182(a)(3) of this chapter (relating to Licensing/Registration Fee and Procedures), the person must [title (relating to Licensing Fee and Procedures) shall] pay a combined non-refundable [licensure] fee for each place of business. The department issues licenses for two-year terms and will only issue a license [All fees are nonrefundable. Licenses are issued for two-year terms. A license shall only be issued] when all past due [fees and delinquency] fees are paid. License fees are based on [the combined] gross annual device sales [of these regulated products (foods, drugs, and/or devices)].

(A) For each place of business having combined gross annual sales of $0 - $199,999.99, the fees are:

(i) $598 [$520] for a two-year license;

(ii) $598 [$520] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $299 [$260] for a license [that is] amended during the current licensure period for [due to] minor changes.

(B) For each place of business having combined gross annual sales of $200,000 - $499,999.99, the fees are:

(i) $897 [$780] for a two-year license;

(ii) $897 [$780] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $449 [$390] for a license [that is] amended during the current licensure period for [due to] minor changes.

(C) For each place of business having combined gross annual sales of $500,000 - $999,999.99, the fees are:

(i) $1,248 [$1,040] for a two-year license;

(ii) $1,248 [$1,040] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $624 [$520] for a license [that is] amended during the current licensure period for [due to] minor changes.

(D) For each place of business having combined gross annual sales of $1 million - $9,999,999.99, the fees are:

(i) $1,560 [$1,300] for a two-year license;

(ii) $1,560 [$1,300] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $780 [$650] for a license [that is] amended during the current licensure period for [due to] minor changes.

(E) For each place of business having combined gross annual sales greater than or equal to $10 million, the fees are:

(i) $2,340 [$1,950] for a two-year license;

(ii) $2,340 [$1,950] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $1,170 [$975] for a license [that is] amended during the current licensure period for [due to] minor changes.

(3) A person must first obtain a license from the department to operate and conduct business as a device manufacturer in Texas [No person may operate or conduct business as a device manufacturer in this state without first obtaining a license from the department]. All applicants for a device manufacturer license or renewal license must [shall] pay a nonrefundable licensing fee. The department issues licenses [All fees are nonrefundable. Licenses are issued] for two-year terms and will [. A license shall] only issue a license [be issued] when all past due [ fees and delinquency] fees are paid. License fees are based on gross annual device sales.

(A) For a manufacturer with gross annual device sales of $0 - $499,999.99, the fees are:

(i) $552 [$480] for a two-year license;

(ii) $552 [$480] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $276 [$240] for a license [that is] amended during the current licensure period for [due to] minor changes.

(B) For a manufacturer with gross annual device sales of $500,000 - $9,999,999.99, the fees are:

(i) $2,592 [$2,160] for a two-year license;

(ii) $2,592 [$2,160] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $1,296 [$1,080] for a license [that is] amended during the current licensure period for [due to] minor changes.

(C) For a manufacturer with gross annual device sales greater than or equal to $10 million, the fees are:

(i) $4,320 [$3,600] for a two-year license;

(ii) $4,320 [$3,600] for a two-year license for [that is amended due to] a change of ownership; and

(iii) $2,160 [$1,800] for a license [that is] amended during the current licensure period for [due to] minor changes.

(b) Texas.gov [Texas Online]. Applicants may submit initial [applications] and renewal license applications [for a license under these sections] electronically through www.texas.gov [by the Internet through Texas Online at www.texasonline.state.tx.us]. The department is authorized to collect fees, in amounts determined by the Texas Online Authority, to recover costs of [associated with application and renewal application] processing applications and renewals through the website [through Texas Online].

(c) Exemption from licensing fees. A person is exempt from the licensing fees required by this section if the person [is]:

(1) is licensed under §289.252 of this title (relating to Licensing of Radioactive Material) or registered under §289.226 of this title (relating to Registration of Radiation Machine Use and Services) and engages only in the following activities [types of device distribution or manufacturing]:

(A) manufacturing [the manufacture] or distributing [distribution] of radiation machines that [which] are devices; or

(B) manufacturing [the manufacture] or distributing [distribution] of devices that [which] contain radioactive materials; or

(2) is a charitable organization, as described in the Internal Revenue Code of 1986[,] §501(c)(3), or a nonprofit affiliate of one, where [the organization, to the extent otherwise] permitted by law.

(d) Sale of food, drugs, or devices. This section includes the manufacture, production, processing, packaging, exposure, offer, possession, and holding of any of the regulated articles for sale; the sale, dispensing, and giving of any regulated article; and supplying or applying of any regulated articles in the operation of any food, drug, or device place of business.

§229.440. Refusal, Cancellation, Suspension, or Revocation of License.

(a) The commissioner may refuse an application or may suspend or revoke a license if the applicant or licensee:

(1) has been convicted of a felony or misdemeanor that involves moral turpitude;

(2) is an association, partnership, or corporation and the managing officer has been convicted of a felony or misdemeanor that involves moral turpitude;

(3) has been convicted in a state or federal court of the illegal use, sale, or transportation of intoxicating liquors, narcotic drugs, barbiturates, amphetamines, desoxyephedrine, their compounds or derivatives, or any other dangerous or habit-forming drugs;

(4) is an association, partnership, or corporation and the managing officer has been convicted in state or federal court of the illegal use, sale, or transportation of intoxicating liquors, narcotic drugs, barbiturates, amphetamines, desoxyephedrine, their compounds or derivatives, or any other dangerous or habit-forming drugs;

(5) has violated any of the provisions of the Texas Food, Drug, and Cosmetic Act, HSC [Health and Safety Code,] Chapter 431 (Act) or these sections;

(6) has failed to pay any fees for licensing [a license fee] or [a] renewal [fee for a license]; [or]

(8) [(7)] has obtained or attempted to obtain a license by fraud or deception.

(b) The commissioner may refuse an application for a license or may suspend or revoke a license if the commissioner determines from evidence presented during a hearing that the applicant or licensee:

(1) has violated HSC [the Health and Safety Code,] §431.021(l)(3), concerning the counterfeiting of a drug or the sale or holding for sale of a counterfeit drug;

(2) has violated HSC Chapter 481 (Texas Controlled Substances Act) [the Health and Safety Code, Chapter 481 (Texas Controlled Substance Act)], or HSC Chapter 483 (Texas Dangerous Drug Act) [the Health and Safety Code, Chapter 483 (Dangerous Drugs Act)]; or

(3) has violated [the] rules established by [of] the director of the Department of Public Safety, including being responsible for a significant discrepancy in [the] records the applicant or licensee is required to maintain under state law [that state law requires the applicant or licensee to maintain].

(c) After [The department may, after] providing an opportunity for a hearing, the department may refuse, suspend, or revoke a license for a device distributor or manufacturer if the applicant violates any [refuse to license a distributor or manufacturer of devices, or may suspend or revoke a license for violations of the] requirements in these sections or for any [of the] reasons described in the Act.

(d) Any hearings for the refusal, revocation, or suspension of a license are governed by §§1.21, 1.23, 1.25, and 1.27 of this title (relating to Formal Hearing Procedures).

(e) A license issued under these sections must [shall] be returned to the department if the device distributor's or manufacturer's place of business:

(1) ceases business or otherwise ceases operation on a permanent basis;

(2) relocates; or

(3) changes name or ownership. A corporation transferring 5.0% or more of the share of stock from one person to another is considered to have had an ownership change and must return the license to the department [For a corporation, an ownership change is deemed to have occurred, resulting in the necessity to return the license to the department, when 5.0% or more of the share of stock of a corporation is transferred from one person to another].

§229.441. Minimum Standards for Licensure.

(a) Minimum requirements. All device distributors or manufacturers [of devices] engaged in the design, manufacture, packaging, labeling, storage, installation, and servicing of devices must comply with the minimum standards of this section, in addition to the statutory requirements contained in the Texas Food, Drug, and Cosmetic Act, HSC [Health and Safety Code,] Chapter 431 (Act). For the purpose of this section, the department adopts the policies described in the United States Food and Drug Administration's (FDA's) Compliance Policy Guides relating [as they apply] to devices [shall be the policies of the Department of State Health Services (department)].

(b) Federal establishment registration and device listing. All persons who operate as device distributors or manufacturers in Texas must [shall] meet the applicable requirements in 21 Code of Federal Regulations (CFR)[,] Part 807, relating to Establishment Registration and Device Listing for Manufacturers and Initial Importers of Devices. [titled "Establishment Registration and Device Listing for Manufacturers and Initial Importers of Devices."] Devices distributed by device distributors or manufacturers must [shall] have met, if applicable, the premarket notification requirements of 21 CFR[,] Part 807 or the premarket approval provisions of 21 CFR[,] Part 814, relating to Premarket Approval of Medical Devices. [titled "Premarket Approval of Medical Devices."]

(c) Good manufacturing practices. Device distributors or manufacturers engaged in the design, manufacture, packaging, labeling, storage, installation, and servicing of finished devices must comply [shall be in compliance] with the applicable requirements of 21 CFR[,] Part 820, relating to Quality Management System Regulation. [titled "Quality System Regulation."] The requirements in this part govern the methods, facilities, and controls used to [in, and the facilities and controls used for, the] design, manufacture, package, label, store, install, and service [packaging, labeling, storage, installation, and servicing of] all finished devices intended for human use.

(d) Buildings and facilities.

(1) Manufacturers must conduct all [All] manufacturing, assembling, packaging, packing, holding, testing, or labeling of devices [by manufacturers shall take place] in buildings and facilities described in 21 CFR §820.45, relating to Device Labeling and Packaging Controls. [21 CFR, Part 820, Subpart L, titled "Handling, Storage, Distribution, and Installation."]

(2) Manufacturers and distributors must not conduct any [No] manufacturing, assembling, packaging, packing, holding, testing, or labeling operations of devices [by manufacturers or distributors shall be conducted] in any personal residence or any room used as a living area. Manufacturers and distributors must not manufacture or hold devices in any room used as living or sleeping quarters. All device manufacturing and storage must be completely separated from any living or sleeping quarters by a full partition.

(3) Any place of business used by a distributor to store, warehouse, hold, offer, transport, or display devices must [shall]:

(A) be of suitable size and construction to facilitate cleaning, maintenance, and proper operations;

(B) have storage areas designed to provide adequate lighting, ventilation, temperature, sanitation, humidity, and space;

(C) have a designated quarantine area, physically separate from other devices, for storing [storage of devices that are] outdated, damaged, deteriorated, misbranded, or adulterated devices until the quarantined devices are destroyed or returned to the supplier;

(D) be maintained in a clean and orderly condition, including keeping walls, ceilings, windows, doors, and floors clean, in good repair, and properly maintained; and

(E) be free from infestation by insects, rodents, birds, or vermin of any kind.

(e) Storage of devices. All devices stored by distributors must [shall] be in-date, not damaged, and held at appropriate temperatures and in [under] appropriate conditions under any labeling [in accordance with] requirements[, if any, in the labeling] of such devices.

(f) Device labeling. Devices distributed by device distributors or manufacturers must [shall] meet the labeling requirements of the Act and 21 CFR[,] Part 801, relating to Labeling. [titled "Labeling."]

(g) Device labeling exemptions. Exemptions of [Device] labeling or packaging of devices [exemptions] adopted under the Federal Food, Drug, and Cosmetic Act must [, as amended, shall] apply to devices in Texas, unless [except insofar as] modified or rejected by rules of the executive commissioner [Executive Commissioner] of the Health and Human Services Commission.

(h) Reconditioned devices. Reconditioned devices must comply with the provisions of the Act and these sections and are subject to the provisions of the Texas Food, Drug, Device, and Cosmetic Salvage Act, HSC [Health and Safety Code,] Chapter 432.

(i) Medical device reporting. Device distributors or manufacturers must [shall] meet the applicable medical device reporting requirements of 21 CFR[,] Part 803, relating to Medical Device Reporting [titled "Medical Device Reporting"].

(j) Radiation emitting devices. Device distributors or manufacturers that distribute devices emitting [Devices which emit] electronic product radiation must [and are distributed by device distributors or manufacturers shall] meet the applicable requirements of the Act and 21 CFR[,] Subchapter J, relating to Radiological Health. [titled "Radiological Health."]

(k) Distribution of prescription devices.

(1) A prescription device in the possession of a device distributor or manufacturer licensed under these sections of this subchapter is exempt from HSC §431.112(e)(1) [Health and Safety Code, §431.112 (f)(1)], relating to labeling bearing adequate directions for use, providing it meets the requirements of 21 CFR §801.109, Prescription Devices, and §801.110, Retail Exemption for Prescription Devices [21 CFR, §801.109, titled "Prescription devices" and 801.110, titled "Retail exemption for prescription devices"].

(2) Each device distributor or manufacturer who distributes prescription devices must [shall] maintain a record for every prescription device. The records kept must include the identity of the device, the quantity received or manufactured, and the disposition of each device [, showing the identity and quantity received or manufactured and the disposition of each device].

(3) Each device distributor or manufacturer who delivers a prescription device to the ultimate user must [shall] maintain a record of any prescription [or other order lawfully issued by a practitioner in connection with the device].

(l) Sale of contact lenses at flea markets. Contact lenses may not be sold by persons at flea markets unless:

(1) the person selling the contact lenses has complied with the requirements of Texas Business and Commerce Code[,] §35.55; and

(2) the person selling the contact lenses has complied with the requirements of the Texas Occupations Code Chapter 353 [Texas Contact Lens Prescription Act, Texas Civil Statutes, Article 4552-A].

§229.442. Advertising.

(a) An advertisement of a device is [shall be] deemed [to be] false if it is false or misleading in any way [particular].

(b) An advertisement of a device is false if the advertisement represents that the device affects:

(1) infectious and parasitic diseases;

(2) neoplasms;

(3) endocrine, nutritional, and metabolic diseases and immunity disorders;

(4) diseases of blood and blood-forming organs;

(5) mental disorders;

(6) diseases of the nervous system and sense organs;

(7) diseases of the circulatory system;

(8) diseases of the respiratory system;

(9) diseases of the digestive system;

(10) diseases of the genitourinary system;

(11) complications of pregnancy, childbirth, and the puerperium;

(12) diseases of the skin and subcutaneous tissue;

(13) diseases of the musculoskeletal system and connective tissue;

(14) congenital anomalies;

(15) certain conditions originating in the perinatal period;

(16) symptoms, signs, and ill-defined conditions; or

(17) injury and poisoning.

(c) Subsection (b) of this section does not apply to an advertisement of a device if the advertisement does not violate the Act[,] §431.182(a), and is disseminated:

(1) to the public for self-medication and is consistent with the labeling claims permitted by the United States Food and Drug Administration (FDA);

(2) only to members of the medical, dental, and veterinary professions and appears only in the scientific periodicals of those professions; or

(3) only for the purpose of public health education by a person not commercially interested, directly or indirectly, in the sale of the device.

(d) This section does not indicate that self-medication for a disease, other than a disease listed under subsection (b) of this section, is safe and effective.

§229.443. Enforcement and Penalties.

(d) [(a)] Inspection.

(1) To enforce these sections or the Act [Texas Food, Drug, and Cosmetic Act, Health and Safety Code, Chapter 431 (Act)], the department or [Commissioner of the Department of State Health Services (commissioner), an] authorized agent[, or a health authority] may, on presenting appropriate credentials to the owner, operator, or agent in charge of a place of business:

(A) enter, at reasonable times, a place of business, including a factory or warehouse, where [in which] a device is manufactured, assembled, packed, or held for introduction into commerce or held after the introduction;

(B) enter a vehicle being used to transport or hold a device in commerce; or

(C) inspect, at reasonable times, within reasonable limits, and in a reasonable manner, the place of business or vehicle, including [and] all equipment, finished and unfinished materials, containers, and labeling of any item and obtain samples necessary for the enforcement of these sections or the Act.

(2) The inspection of a place of business, including a factory, warehouse, or consulting laboratory, where [in which] a restricted device is manufactured, assembled, packed, or held for introduction into commerce may include [extends to] any place or item, such as [thing, including] a record, file, paper, process, control, or facility, needed [in order] to determine whether the device:

(A) is adulterated or misbranded;

(B) is prohibited from being [may not be] manufactured, introduced into commerce, sold, or offered for sale under the Act; or

(C) is [otherwise] in violation of these sections or the Act.

(3) An inspection under paragraph (2) of this subsection may not extend to:

(A) financial data;

(B) sales data, except for [other than] shipment data;

(C) pricing data;

(D) personnel data, except for [other than] data relating to the qualifications of technical and professional personnel performing functions under the Act; or

(E) research data, except [other than] data that:

(i) relates [relating] to devices; and

(ii) is subject to reporting and inspection under regulations issued under [§519 or §520(g) of] the Federal Food, Drug, and Cosmetic Act, 21 United States Code §360(i) or §360(j), as amended.

(4) An inspection under paragraph (2) of this subsection must [shall] be started and completed with reasonable promptness.

(e) [(b)] Receipt for samples. An authorized agent or health authority who inspects [makes an inspection of] a place of business, including a factory or warehouse, and obtains a sample during [or on completion of] the inspection must [and before leaving the place of business, shall] give to the owner, operator, or the owner's or operator's agent a receipt describing the sample before leaving the place of business.

(f) [(c)] Access to records.

(1) A person who is required to maintain records referenced in these sections, [or under] the Act, [Texas Food, Drug, and Cosmetic Act, Health and Safety Code, Chapter 431 (Act)] or [§519 or §520(g) of] the Federal Food, Drug, and Cosmetic Act , 21 United States Code §360(i), or a person who is in charge or custody of those records must, upon [shall, at the] request by [of] an authorized agent or health authority, provide access to the records, [permit the authorized agent or health authority] at all reasonable times, for copying and verification of [access to and to copy and verify] the records.

(2) A person who is subject to licensure under these sections of this subchapter must [shall], at the request of an authorized agent or health authority, provide access to the records, [permit the authorized agent or health authority] at all reasonable times, for copying and verification of [access to and to copy and verify] all records showing:

(A) the movement in commerce of any device;

(B) the holding of any device after movement in commerce; and

(C) the quantity, shipper, and consignee of any device.

(g) [(d)] Retention of records. Records required by these sections of this subchapter must [shall] be maintained at the place of business or another reasonably accessible [other] location [that is reasonably accessible] for a period of at least two [2] years following disposition of the device, unless a longer retention [greater] period [of time] is required by laws and regulations adopted in §229.432 of this subchapter [title] (relating to Applicable Laws and Regulations).

(h) [(e)] Adulterated and misbranded device. If the department [Department of State Health Services (department)] identifies an adulterated or misbranded device, the department may impose the applicable provisions of Subchapter C of the Act, including[, but not limited to:] detention, emergency order, recall, condemnation, destruction, injunction, civil penalties, criminal penalties, and [and/or] administrative and civil penalties. Administrative [and civil] penalties will be assessed using the severity levels [Severity Levels] contained in §229.261 of this chapter [title] (relating to Assessment of Administrative [or Civil] Penalties).

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

Filed with the Office of the Secretary of State on September 19, 2025.

TRD-202503316

Cynthia Hernandez

General Counsel

Department of State Health Services

Earliest possible date of adoption: November 2, 2025

For further information, please call: (512) 834-6755

STATUTORY AUTHORITY

The repeal is authorized by Texas Government Code §524.0151 and Texas Health and Safety Code §1001.075, which authorize the executive commissioner of HHSC to adopt rules and policies for the operation and provision of health and human services by DSHS and the administration of Texas Health and Safety Code Chapter 1001, and by Texas Health and Safety Code §431.241.

The repeal affects Texas Government Code §524.0151 and Texas Health and Safety Code Chapters 1001 and 431.

§229.444. Device Distributors and Manufacturers Advisory Committee.

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

Filed with the Office of the Secretary of State on September 19, 2025.

TRD-202503317

Cynthia Hernandez

General Counsel

Department of State Health Services

Earliest possible date of adoption: November 2, 2025

For further information, please call: (512) 834-6755