TITLE 40. SOCIAL SERVICES AND ASSISTANCE

PART 20. TEXAS WORKFORCE COMMISSION

CHAPTER 853. INDEPENDENT LIVING SERVICES FOR OLDER INDIVIDUALS WHO ARE BLIND

The Texas Workforce Commission (TWC) proposes amendments to the following sections of Chapter 853, relating to Independent Living Services for Older Individuals Who Are Blind:

Subchapter A. Independent Living Services for Older Individuals Who Are Blind, §853.2 and §853.4

Subchapter B. Services, §853.10 and §853.11

Subchapter C. Customer Financial Participation, §853.20 and §853.21

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

The purpose of the proposed Chapter 853 rule change is to ensure alignment with the recently updated Older Individuals Who Are Blind (OIB) Policy Manual (OIB policy manual), as well as applicable state and federal regulations. Following a comprehensive review, discrepancies were identified between the current Chapter 853 and updated program policy. The proposed rule amendments address those inconsistencies and incorporate minor revisions to improve clarity, consistency, and overall readability. The updates support accurate implementation of the OIB program, reinforce compliance with governing authority under 34 Code of Federal Regulations, Part 367, and align rules with the requirements outlined in the OIB policy manual.

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 A. Independent Living Services for Older Individuals Who Are Blind

TWC proposes amendments to Subchapter A, as follows:

§853.2. Referral

Section 853.2 is amended to clarify the definition and scope of minimal services by specifying examples of services included and incorporating independent living skills training that can be effectively delivered with no more than one or two face-to-face visits by OIB program staff to an individual receiving services. The revision ensures consistency with current program practices and provides clear guidance to staff for appropriate service delivery.

§853.4. Application

Section 853.4 is amended to replace electronic "PIN" with electronic "signature" to align the rule with the OIB program's practices.

SUBCHAPTER B. Services

TWC proposes amendments to Subchapter B, as follows:

§853.10. Independent Living Plan

Section 853.10 is amended to remove the reference to form 5154, which has been retired, and updates the section to reflect the current process. The revision ensures accuracy, eliminates outdated information, and provides clear guidance aligned with current program procedures.

§853.11. Scope of Services

Section 853.11 is amended to clarify that training in using technology and independent living skills may be provided to OIB customers.

SUBCHAPTER C. Customer Financial Participation

TWC proposes amendments to Subchapter C, as follows:

§853.20. Individuals Who Receive Social Security Income or Social Security Disability Insurance

Section 853.20 is amended to clarify that customers receiving certain types of Social Security benefits are exempt from cost participation for OIB services. The revision ensures consistency with program policy and provides clear guidance regarding eligibility for services at no cost.

§853.21. Customer Participation in the Cost of Services

Section 853.21 is amended to remove subsection (c) due to an inaccurate reference to §853.11 regarding cost participation. Current §853.21(c) does not clearly specify which services are exempt from customer participation. Removing this subsection eliminates potential confusion and ensures the rule accurately reflects program policy.

PART III. IMPACT STATEMENTS

Chris Nelson, Chief Financial Officer, has determined that for each year of the first five years the proposed 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 proposed rules.

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

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

There is no anticipated adverse economic impact on small businesses, microbusinesses, or rural communities as a result of enforcing or administering the proposed 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 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 US 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. TWC completed a Takings Impact Assessment for the proposed rulemaking under Texas Government Code, §2007.043. The primary purpose of this proposed rulemaking, as discussed elsewhere in this preamble, is to align with the requirements outlined in the OIB policy manual.

The proposed rulemaking will not create any additional burden on private real property or 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 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 the proposed rules will be in effect, they:

--will not create or eliminate a government program;

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

--will not require an increase or decrease in future legislative appropriations to TWC;

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

--will not create a new regulation;

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

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

--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 the proposed rules place no requirements on small businesses or rural communities.

Mariana Vega, Director, Labor Market Information, has determined that there is not a significant negative impact upon employment conditions in the state as a result of the proposed rules.

Tammy Ames, Director, Vocational Rehabilitation Division, has determined that for each year of the first five years the proposed rules are in effect, the public benefit anticipated as a result of enforcing the proposed rules will be to ensure alignment with OIB policy and ensures clear OIB program rules.

PART IV. REQUEST FOR IMPACT INFORMATION

TWC requests, from any person required to comply with the proposed rules or any other interested person, information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research, or analysis. Please submit the requested information to TWCPolicyComments@twc.texas.gov no later than August 10, 2026.

PART V. PUBLIC COMMENTS

Comments on the proposed rules may be submitted to TWCPolicyComments@twc.texas.gov and must be received no later than August 10, 2026.

SUBCHAPTER A. INDEPENDENT LIVING SERVICES FOR OLDER INDIVIDUALS WHO ARE BLIND

PART VI. STATUTORY AUTHORITY

The rules are proposed under:

--Texas Labor Code, §352.103(a), which provides TWC with the authority to establish rules for providing vocational rehabilitation services; and

--Texas Labor Code, §301.0015(a)(6), which provides 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 relate to Title 4, Texas Labor Code, particularly Chapter 352.

§853.2. Referral.

(a) An individual may be referred for OIB services in a variety of ways, including, but not limited to:

(1) a physician's office;

(2) a community organization;

(3) the Center for Independent Living (CIL);

(4) a senior community organization;

(5) family members, customer representatives [representative], or [and] friends;

(6) contract providers; or

(7) an online self-referral portal.

(b) A referral shall include the name of the individual seeking services, the address where the individual resides, and an email address and telephone number, if available.

(c) During the referral process, OIB staff may determine the level of services needed by the customer, provide minimal services, or verify the customer's eligibility criteria. Minimal services [may] include, but are not limited to [information and referral], a guide to independent living, bump dots for kitchen appliances, [and] low-cost magnifiers, and independent living skills training that does not require more than two visits. If minimal services are all that a customer requires, the case may be closed as a minimal services successful closure.

(d) For service delivery to begin, an individual shall submit a complete application and OIB staff shall document that all eligibility requirements are met.

§853.4. Application.

An individual is considered to have completed the application process when:

(1) the individual or the individual's representative has completed and signed the OIB application form and an OIB staff member has entered the electronic signature [PIN] into the case management system;

(2) the individual or the individual's representative has provided the information necessary to initiate an assessment to determine eligibility and service delivery; and

(3) the individual or the individual's representative is available to complete the assessment process to determine eligibility.

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 June 23, 2026.

TRD-202602579

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: August 9, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER B. SERVICES

The rules are proposed under:

--Texas Labor Code, §352.103(a), which provides TWC with the authority to establish rules for providing vocational rehabilitation services; and

--Texas Labor Code, §301.0015(a)(6), which provides 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 relate to Title 4, Texas Labor Code, particularly Chapter 352.

§853.10. Independent Living Plan.

(a) Once an individual is determined eligible, OIB staff must develop the ILP [is developed] within 90 days of the eligibility date. If the ILP cannot be completed within 90 days, then OIB staff must document the reason for the delay in a case note.

(b) OIB staff must jointly develop the ILP and all subsequent amendments in writing, through consultation with the customer or the customer's representative, as appropriate.

(c) A customer may waive receipt of the written plan by signing the signature form for OIB program applicants [Agency Waiver of Independent Living Plan (VR 5154)].

(d) Through consultation, OIB staff and the customer, or the customer's representative, as appropriate, determine how services shall be delivered and OIB staff must document and maintain service delivery methods in the electronic record of the ILP[, which OIB staff must maintain].

(e) OIB staff [The Agency] shall ensure that the customer or the customer's representative, as appropriate, is advised of procedures and requirements affecting the development and review of the ILP.

(f) To receive a copy of the ILP and its amendments in a medium other than print, the customer must inform OIB staff of the preferred medium.

(g) OIB staff shall review the ILP at least annually with the customer or the customer's representative, as appropriate, to assess the customer's progress in meeting the objectives identified in the ILP.

(h) OIB staff shall incorporate any revisions to the ILP that are necessary to reflect changes in the customer's goals, intermediate objectives, or needs.

(i) The customer must inform OIB staff [the Agency] in a timely manner of changes that will affect the provision of services, including, but not limited to, the customer's unavailability to receive services.

§853.11. Scope of Services.

(a) All services provided under this section shall be subject to budget constraints of the program.

(b) OIB staff shall provide each service in accordance with a customer's ILP.

(c) OIB staff may directly provide the following services under this chapter:

(1) Information and referral services;

(2) Independent living skills training;

(3) Peer counseling (including cross-disability peer counseling);

(4) Individual and systems advocacy;

(5) Orientation and mobility training;

(6) Diabetes education;

(7) Braille training; and

(8) Transition services.

(d) OIB staff may purchase goods or services with an approved provider as identified and agreed upon with the customer in the ILP, including:

(1) counseling services, to include psychological and psychotherapeutic services;

(2) orientation and mobility training;

(3) diabetes awareness training;

(4) rehabilitation technology (for example, a video magnifier) and training to use technology; [and]

(5) related visual aid tools, such as magnifiers and low vision eyeglasses; and [.]

(e) OIB staff may refer customers to other services to meet their needs. Such other services may include, but are not limited to:

(1) CIL services;

(2) housing services, including supportive living;

(3) accessible transportation services;

(4) medical services;

(5) personal assistance services, including attendant care and the training of individuals to provide such services;

(6) education and training necessary for living in a community and participating in community activities; and

(7) social and recreational services.

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 June 23, 2026.

TRD-202602580

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: August 9, 2026

For further information, please call: (737) 301-9662

SUBCHAPTER C. CUSTOMER FINANCIAL PARTICIPATION

The rules are proposed under:

--Texas Labor Code, §352.103(a), which provides TWC with the authority to establish rules for providing vocational rehabilitation services; and

--Texas Labor Code, §301.0015(a)(6), which provides 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 relate to Title 4, Texas Labor Code, particularly Chapter 352.

§853.20. Individuals Who Receive Social Security Income or Social Security Disability Insurance.

(a) Customers who have been determined eligible for Social Security benefits under Titles II and XVI of the Social Security Act, relating to Supplemental Security Income and Social Security Disability Insurance, shall not be charged any cost to receive OIB services under the OIB program. This includes customers who are receiving Title II benefits related to Social Security retirement who meet the requirements to obtain old-age and survivors insurance benefit payments (for more information, please refer to SSA.gov). [Customers who are recipients of either Social Security Income (SSI) or Social Security Disability Insurance (SSDI) are not required to participate in the cost of services.]

(b) OIB staff shall ensure that each customer or the customer's representative, as appropriate, is informed of the services that require customer participation in the cost of services and the services that do not require customer participation.

§853.21. Customer Participation in the Cost of Services.

(a) Some independent living services, as set forth in §853.11 of [or] this chapter [(relating to Scope of Services)], may be subject to customer participation in cost of service as defined in OIB policy.

(b) OIB staff shall administer the customer participation system in accordance with [the rules in] this chapter, the OIB policy manual, and 34 CFR §367.67(b)(1).

(c) [(d)] OIB staff shall determine the customer's adjusted gross income and the percentage of the Federal Poverty Guidelines at https://aspe.hhs.gov/poverty-guidelines for that income, based on documentation provided by the customer.

(d) [(e)] OIB staff is required to apply the Federal Poverty Guidelines at https://aspe.hhs.gov/poverty-guidelines to determine customer participation.

(e) [(f)] The customer or customer's representative shall sign an ILP acknowledging the customer's contribution for services and providing written agreement that:

(1) the information provided by the customer or the customer's representative about the customer's household size, annual gross income, allowable deductions, and comparable services or benefits is true and accurate; or

(2) the customer or the customer's representative chooses not to provide information about the customer's household size, annual gross income, allowable deductions, and comparable services or benefits.

(f) [(g)] If the customer or the customer's representative, as appropriate, chooses not to provide information on the customer's household size, annual gross income, allowable deductions, and comparable services or benefits, the customer shall pay the entire cost of applicable services.

(g) [(h)] The customer shall report to OIB staff as soon as possible all changes to household size, annual gross income, allowable deductions, and comparable services or benefits and sign an amended ILP.

(h) [(i)] When the customer amends the ILP, the new customer's contribution for services takes effect the beginning of the following month. The new contribution shall not be applied retroactively.

(i) [(j)] OIB staff shall develop a process to reconsider and adjust the customer's contribution for services based on circumstances that are both extraordinary and documented. This may include assessing the customer's ability to pay the customer's participation amount. Extraordinary circumstances include:

(1) an increase or decrease in income;

(2) unexpected medical expenses;

(3) unanticipated disability-related expenses;

(4) a change in family size;

(5) catastrophic loss, such as fire, flood, or tornado;

(6) short-term financial hardship, such as a major repair to the customer's home or personally owned vehicle; or

(7) other extenuating circumstances for which the customer makes a request and provides supporting documentation.

(j) [(k)] The customer's contribution for services remains in effect during the reconsideration and adjustment process.

(k) [(l)] OIB staff shall:

(1) use program income that is received from the customer only to provide services outlined in §853.11 of this chapter; and

(2) report fees collected as program income.

(l) [(m)] The Agency may not use program income received from the customer to supplant any other fund sources.

(m) [(n)] The Agency may not pay any portion of the customer's contribution.

(n) [(o)] The customer's ILP and all financial information collected by OIB staff are subject to subpoena.

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 June 23, 2026.

TRD-202602581

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: August 9, 2026

For further information, please call: (737) 301-9662

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

The Texas Workforce Commission (TWC) proposes the following new sections to Chapter 858, relating to Procurement and Contract Management Requirements for Purchase of Goods and Services for Vocational Rehabilitation Services:

§858.10 and §858.11

TWC proposes amendments to the following sections of Chapter 858, relating to Procurement and Contract Management Requirements for Purchase of Goods and Services for Vocational Rehabilitation Services:

§§858.1, 858.3, 858.7 - 858.9, 858.15, and 858.16

TWC proposes the repeal of the following sections of Chapter 858, relating to Procurement and Contract Management Requirements for Purchase of Goods and Services for Vocational Rehabilitation Services:

§§858.10 - 858.14

PART I. PURPOSE, BACKGROUND, AND AUTHORITY

The purpose of the proposed Chapter 858 rule change is to update rule language to improve understanding and consistency with current TWC Vocational Rehabilitation (VR) Division and contract management practices, and to establish guidelines for a fair and consistent recoupment system for VR and contractors. Substantial changes include the addition of definitions; expansion of the Adverse Actions rules under §858.9, and the repeal of §§858.10 - 858.14, and adding new §858.10 (Suspension of Contractors) and §858.11 (Debarment of Contractors) to consolidate information on suspension and debarment.

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.)

§858.1. Definitions

Section 858.1 is amended to add new definitions and update existing ones for clarity. A definition for "Improper payment" is added to provide a comprehensive list of conditions that result in payments a contractor is not entitled to receive. New definitions for "Fraud," "Overpayment," and "Service authorization" were also added.

§858.3. General Requirements for Contracting

Section 858.3 is amended to add new subparagraph (a)(1)(E) requiring a contractor to ensure that no staff members are excluded by TWC, the state, or federal government from participating in contracts or providing services. New subparagraph (a)(1)(F) requires contractors to complete and maintain criminal background checks on all applicable staff. New subsection (j) requires contractors to coordinate with VR staff to ensure all communications with a customer are in the customer's preferred or native language. New subsection (l) requires valid and signed authorization before a contractor may provide goods or services to a customer.

§858.7. Contract Monitoring

Section 858.7 is amended to reflect modern monitoring practices, such as desk reviews and video conferences. A new subsection (c) is added to provide details on which documents and other information the contractor must make available to the Agency.

§858.8. Corrective Action Plan

Section 858.8 is amended to define timelines for preparing and implementing corrective action plans. A new provision is added that allows the Agency to issue a "directed corrective action plan" if a contractor fails to submit an acceptable plan.

§858.9. Adverse Actions

Section 858.9 is amended and reorganized to establish a clearer and more structured framework for imposing adverse actions. The amendments add new subsections that outline factors the Agency will use to assess the severity of noncompliance (subsection (c)) and governing principles for the application of adverse actions, such as Agency discretion and consideration of mitigating factors (subsection (d)). New subsection (e) requires the Agency to develop a matrix to support the application of adverse actions.

§858.10. Debarment and Suspension of Contractors

Section 858.10 is repealed. Its content has been separated, significantly expanded, and moved into two new, more detailed sections: §858.10 (Suspension of Contractors) and §858.11 (Debarment of Contractors).

§858.10. Suspension of Contractors

New §858.10 is added to consolidate all rules regarding the temporary suspension of a contractor. This section clearly defines what a suspension is, its scope, the potential results (such as withholding payments and ceasing referrals), the process for resolving a suspension, and the specific information that must be included in a formal Notice of Suspension.

§858.11. Causes and Conditions of Debarment

Section 858.11 is repealed. Its content has been revised and consolidated into the new §858.11 (Debarment of Contractors) to create a single, comprehensive rule on the subject.

§858.11. Debarment of Contractors

New §858.11 is added to create a single, comprehensive section governing debarment. This section consolidates and clarifies the causes for debarment, the period and scope, and the results of being debarred. It also adds subsection (e) detailing types of evidence the Agency may consider when making a debarment decision, making the process more transparent and defensible.

§858.12. Causes and Results of Suspension

Section 858.12 is repealed. Its content has been revised and consolidated into the new §858.10 (Suspension of Contractors).

§858.13. Evidence for Debarment

Section 858.13 is repealed. Its content has been significantly expanded upon and incorporated into the new §858.11(e) (Debarment of Contractors).

§858.14. Notice for Debarment or Suspension

Section 858.14 is repealed. The notice requirements have been updated and incorporated directly into new §858.10(e) for suspensions and new §858.11(f) for debarments.

§858.15. Appeals

Section 858.15 is amended to clarify that contractors do not have the right to appeal against escalating adverse actions that are imposed due to a contractor's failure to remedy an initial adverse action in subsection (a) and adds that a contractor may be represented by an attorney or designated representative in new subsection (e). The subsections following have been re-lettered.

§858.16. Request for Reconsideration

Section 858.16 is amended to remove the Contractor Notice of Rights form number, as form numbers sometimes change, so as not to inadvertently outdate the rules if that happens.

PART III. IMPACT STATEMENTS

Chris Nelson, Chief Financial Officer, has determined that for each year of the first five years the proposed 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 proposed rules.

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

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

There is no anticipated adverse economic impact on small businesses, microbusinesses, or rural communities as a result of enforcing or administering the proposed 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 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 US 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. TWC completed a Takings Impact Assessment for the proposed rulemaking under Texas Government Code, §2007.043. The primary purpose of this proposed rulemaking, as discussed elsewhere in this preamble, is to improve understanding and consistency with current TWC VR and contract management practices.

The proposed rulemaking will not create any additional burden on private real property or 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 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 the proposed rules will be in effect, they:

--will not create or eliminate a government program;

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

--will not require an increase or decrease in future legislative appropriations to TWC;

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

--will not create a new regulation;

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

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

--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 the proposed rules place no requirements on small businesses or rural communities.

Mariana Vega, Director, Labor Market Information, has determined that there is not a significant negative impact upon employment conditions in the state as a result of the proposed rules.

Tammy Ames, Director, Vocational Rehabilitation Division, has determined that for each year of the first five years the proposed rules are in effect, the public benefit anticipated as a result of enforcing the proposed rules will be to improve understanding and consistency with current TWC VR and contract management practices.

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. REQUEST FOR IMPACT INFORMATION

TWC requests, from any person required to comply with the proposed rule or any other interested person, information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research, or analysis. Please submit the requested information to TWCPolicyComments@twc.texas.gov no later than August 10, 2026.

PART V. PUBLIC COMMENTS

Comments on the proposed rules may be submitted to TWCPolicyComments@twc.texas.gov and must be received no later than August 10, 2026.

PART VI. STATUTORY AUTHORITY

The rules are proposed under:

--Texas Labor Code, §352.103, which provides TWC with the authority to adopt rules for the provision of VR services; and

--Texas Labor Code, §301.0015, which provides 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 relate to Title 4, Texas Labor Code, particularly Chapters 301 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--An [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 or service authorization.

(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.

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

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

(14) [(11)] Respondent--An individual against whom the Agency has initiated an adverse [a debarment or suspension] action.

(16) [(12)] Subcontract--An [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.

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

§858.3. General Requirements for Contracting.

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

(1) ensure that:

(A) staff members meet all qualification requirements established by Agency policy and regulations;

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

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

(D) staff credentials are made available to Agency staff upon request;

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

(3) certify on or before the effective date of the contract that the contractor has and will maintain adequate operating funds for conducting business;

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

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

(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) report any suspected violation of rules or laws to the appropriate investigative authority. This includes reporting to the Agency any abuse, neglect, or exploitation.

(b) A contractor may not offer, give, or agree to give an Agency employee anything of value.

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

(e) The Agency may choose not to enter into a contract:

(1) when, in the Agency's opinion, the contractor or a controlling party has a documented, unsatisfactory history in contracting with the Agency or with another state agency; or

(2) if the contractor:

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

(B) assigns or transfers the contract without the Agency's prior written approval.

(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.

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

(i) A contractor shall participate in orientation relating to Agency contract requirements before providing goods or services under a contract for the first time.

(k) Contractors shall take affirmative action to employ and advance in employment qualified individuals with disabilities.

§858.7. Contract Monitoring.

(a) Any good or service purchased or reimbursed by the Agency may be monitored at the discretion of the Agency.

(b) The Agency 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. The Agency may conduct a desk review of documents, speak to the contractor's staff by telephone or video conference, or meet in person at the contractor's place of business, at a Workforce Solutions Office location, or at some other physical location. [These reviews are conducted at the location where the contractor is providing the services unless the Agency specifies a different location.] The Agency shall assess contractor performance based on contract standards.

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

(e) [(d)] The Agency 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 considers necessary.

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

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

§858.8. Corrective Action Plan.

(a) If requested by the Agency, the contractor shall prepare and submit [implement] a corrective action plan to address and remedy all deficiencies or violations within 20 business days of the issuance of [in a timely manner in response to] findings of deficiencies by the Agency or other federal or state oversight authorities. The corrective action plan must be acceptable to the Agency and must be implemented by the contractor consistent with the corrective action plan timeline or as defined in the corrective action plan. The Agency may subsequently monitor and document the contractor's compliance with the corrective action plan as accepted.

§858.9. Adverse Actions.

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

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

(3) [(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 corrective action plan];

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

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

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

(9) [(6)] the contractor's failure to maintain a current required license or professional certification or the contractor allowing the expiration of any required license or professional certification if applicable;

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

(12) [(8) the contractor's exclusion from contracting with the Agency or any health and human services program;

(13) [(9)] debarment or exclusion from a federal program;

(14) [(10)] a validated report or reports of abuse, neglect, or exploitation where 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;

(c) [(b)] The Agency may take the following adverse actions:

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

(2) Place a vendor hold on one or all the contractor's contracts, which must be released when the Agency determines that the contractor has resolved the issue or issues causing the hold;

(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 that the Agency determines necessary to ensure the contractor's compliance with the underlying contract, after considering the circumstances of a particular case.

§858.15. Appeals.

(a) A contractor may appeal an initial adverse action rendered by the Agency under §858.9 of this chapter in writing by hand delivery, mail, common carrier, facsimile (fax) transmission, electronic mail (email), or other method approved by the Agency, [in writing. 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. A contractor cannot appeal escalating adverse actions taken by the Agency based on a contractor's failure to correct or remedy an initial adverse action.

(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 in [at 40 TAC] 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.

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

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

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

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

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

(5) All evidence and documentation the contractor intends to rely on to support the appeal; and [Copies of evidence or documentation supporting the appeal; and]

(6) The action requested.

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

(f) [(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.

(g) [(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, the appeal will be denied, and the initial adverse action will be the Agency's final decision.

(h) [(g)] An Agency appeal decision becomes final 14 days after the date the appeal decision is mailed, unless the contractor files a written request for reconsideration before that date.

§858.16. Request for Reconsideration.

(a) The contractor may submit a request for reconsideration in writing 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 contractor's request for reconsideration shall be submitted to the Agency by hand delivery, mail, common carrier, facsimile (fax) transmission, electronic mail (email), or other method approved by the Agency, [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 in [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) A request for reconsideration shall not be granted unless each of the following three criteria are met:

(1) There [there] is an offering of new evidence, which was not presented as part of the original appeal pursuant to §858.15 of this chapter;

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

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

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

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 June 23, 2026.

TRD-202602582

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: August 9, 2026

For further information, please call: (737) 301-9662

The rules are repealed under:

--Texas Labor Code, §352.103, which provides TWC with the authority to adopt rules for the provision of VR services; and

--Texas Labor Code, §301.0015, which provides 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 relate to Title 4, Texas Labor Code, particularly Chapters 301 and 352.

§858.10. Debarment and Suspension of Contractors.

§858.11. Causes and Conditions of Debarment.

§858.12. Causes and Results of Suspension.

§858.13. Evidence for Debarment.

§858.14. Notice for Debarment or Suspension.

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 June 23, 2026.

TRD-202602583

Les Trobman

General Counsel

Texas Workforce Commission

Earliest possible date of adoption: August 9, 2026

For further information, please call: (737) 301-9662