FEBRUARY 1998, VOLUME 1, ISSUE 8 PAGES 993 - 1255

The Delaware Register of Regulations is an official State publication established by authority of 69 Del. Laws, c. 107 and is published on the first of each month throughout the year.

The Delaware Register will publish any regulations that are proposed to be adopted, amended or repealed and any emergency regulations promulgated.

The Register will also publish some or all of the following information:

• Governor's Executive Orders

• Governor's Appointments

• Attorney General's Opinions in full text

• Agency Hearing and Meeting Notices

• Other documents considered to be in the public interest.

CITATION TO THE DELAWARE REGISTER

The Delaware Register of Regulations is cited by volume, issue, page number and date. An example would be:

1:1 Del. R. 35 - 37 (July 1, 1997) refers to Volume 1, Issue 1, pages 35 - 37 of the Delaware Register issued on July 1, 1997.

CITIZEN PARTICIPATION IN THE REGULATORY PROCESS

Delaware citizens and other interested parties may participate in the process by which administrative regulations are adopted, amended or repealed, and may initiate the process by which the validity and applicability of regulations is determined.

Under 29 Del.C. §10115 whenever an agency proposes to formulate, adopt, amend or repeal a regulation, it shall file notice and full text of such proposals, together with copies of the existing regulation being adopted, amended or repealed, with the Registrar for publication in the Register of Regulations pursuant to §1134 of this title. The notice shall describe the nature of the proceedings including a brief synopsis of the subject, substance, issues, possible terms of the agency action, a reference to the legal authority of the agency to act, and reference to any other regulations that may be impacted or affected by the proposal, and shall state the manner in which persons may present their views; if in writing, of the place to which and the final date by which such views may be submitted; or if at a public hearing, the date, time and place of the hearing. If a public hearing is to be held, such public hearing shall not be scheduled less than 20 days following publication of notice of the proposal in the Register of Regulations. If a public hearing will be held on the proposal, notice of the time, date, place and a summary of the nature of the proposal shall also be published in at least 2 Delaware newspapers of general circulation; The notice shall also be mailed to all persons who have made timely written requests of the agency for advance notice of its regulation-making proceedings.

The effective date of an order which adopts, amends or repeals a regulation shall be not less than 10 days from the date the order adopting, amending or repealing a regulation has been published in its final form in the Register of Regulations, unless such adoption, amendment or repeal qualifies as an emergency under §10119.

Any person aggrieved by and claiming the unlawfulness of any regulation may bring an action in the Court for declaratory relief.

No action of an agency with respect to the making or consideration of a proposed adoption, amendment or repeal of a regulation shall be subject to review until final agency action on the proposal has been taken.

When any regulation is the subject of an enforcement action in the Court, the lawfulness of such regulation may be reviewed by the Court as a defense in the action.

ISSUE DATE CLOSING DATE CLOSING

TIME

February 1 January 15 4:30 p.m.

March 1 February 15 4:30 p.m.

April 1 March 15 4:30 p.m.

May 1 April 15 4:30 p.m.

June 1 May 15 4:30 p.m.

William S. Montgomery, Director, Division of Research; McDonald T. Coker, Deputy Director; Kathleen K. Amalfitano, Secretary; Walter G. Feindt, Legislative Attorney; Jeffrey W. Hague, Registrar of Regulations; Marlynn H. Hedgecock, Administrative Officer; Maryanne McGonegal, Research Analyst; Ruth Ann Melson, Legislative Librarian; Deborah J. Messina, Graphics Specialist; Deborah A. Porter, Administrative Secretary; Virginia L. Potts, Bill Service Clerk; Thom Shiels, Legislative Attorney; Marguerite P. Smith, Public Information Clerk; Mary Jane Starkey, Senior Secretary; Marvin L. Stayton, Printer; Rochelle Yerkes, Senior Secretary.

The regulations are listed alphabetically by the promulgating agency, followed by a citation to that issue of the Register in which the regulation was published. Proposed regulations are designated with (Prop.); final regulations are designated with (Final); Emergency regulations are designated with (Emer.); and regulations that have been repealed are designated with (Rep.).
Attorney General's Office

Opinion No. 97I-B01, FOIA Complaint against the Town of Laurel 1:1 Del.R. 74

Opinion No. 97I-B02, FOIA Inquiry 1:1 Del.R. 75

Opinion No. 97I-B03, FOIA Complaint against Woodbridge

School District 1:1 Del.R. 76

Opinion No. 97I-B04, Access to DELJIS 1:1 Del.R. 77

Opinion No. 97I-B05, FOIA Complaint against the Town of Laurel 1:1 Del.R. 79

Delaware State Fire Prevention Commission

1997 State Fire Prevention Regulations 1:2 Del.R. 197 (Final)

Ambulance Service Regulations 1:1 Del.R. 35 (Prop.)

Department of Administrative Services

Division of Professional Regulation

Board of Chiropractic 1:1 Del.R. 45 (Final)

Board of Dental Examiners 1:5 Del.R. 543 (Prop.)

1:7 Del.R. 852 (Final)

Board of Electrical Examiners 1:7 Del.R. 795 (Prop.)

Board of Examiners in Optometry 1:7 Del.R. 820 (Prop.)

Board of Nursing, Advanced Practice Nurse 1:1 Del.R. 15 (Prop.)

Board of Nursing 1:2 Del.R. 146 (Final)

Board of Pharmacy 1:4 Del.R. 428 (Prop.)

Board of Physical Therapy 1:2 Del.R. 101 (Prop.)

1:6 Del.R. 714 (Final)

Board of Veterinary Medicine 1:7 Del.R. 805 (Prop.)

Nursing Home Administrators 1:2 Del.R. 141 (Final)

Department of Agriculture

Aquaculture Regulations 1:4 Del.R. 309 (Prop.)

Delaware Harness Racing Commission 1:2 Del.R. 92 (Prop.)

1:5 Del.R. 498 (Final)

1:5 Del.R. 541 (Prop.)

Whips & Blood Gases 1:7 Del.R. 921 (Final)

1:3 Del.R. 248 (Prop.)

1:5 Del.R. 508 (Final)

1:6 Del.R. 649 (Prop.)

1:6 Del.R. 713 (Final)

Department of Education

Agriscience Education Framework 1:2 Del.R. 154 (Final)

Delaware Administrator Standards 1:6 Del.R. 650 (Prop.)

Delaware Teaching Standards 1:6 Del.R. 654 (Prop.)

Driver Education 1:5 Del.R. 559 (Prop.)

1:7 Del.R. 964 (Final)

DSSAA Requirements 1:2 Del.R. 172 (Final)

Education of Homeless Children & Youth 1:5 Del.R. 556 (Prop.)

1:7 Del.R. 962 (Final)

Foreign Language Content Standards 1:2 Del.R. 156 (Final)

Glossary of Terms, Manual for Certification of Professional

School Personnel 1:2 Del.R. 158 (Final)

Guidelines for Approval of School Improvement Grants 1:7 Del.R. 815 (Prop.)

High School Diploma & the Record of Performance 1:5 Del.R. 554 (Prop.)

1:7 Del.R. 960 (Final)

Interscholastic Athletics 1:4 Del.R. 361 (Prop.)

1:6 Del.R. 724 (Final)

Manual for Certification of Professional School Personnel 1:2 Del.R. 163 (Final)

Membership in Fraternities & Sororities 1:4 Del.R. 363 (Prop.)

1:6 Del.R. 723 (Final)

Regulations on School/Police Relations 1:3 Del.R. 256 (Prop.)

1:5 Del.R. 510 (Final)

Repeal of certain parts of section V, Vocational Technical

Education Programs 1:6 Del.R. 664 (Prop.)

Repeal of certain regulations concerning Student Activities 1:4 Del.R. 365 (Prop.)

1:6 Del.R. 726 (Final)

Repeal of Minimum-Maximum Program Assignment, Experimentation

and Modification 1:7 Del.R. 817 (Prop.)

Repeal of six Regulations that are in the Delaware Code 1:7 Del.R. 817 (Prop.)

Repeal of Section B.1.a, Discipline Powers & Responsibilities

of Superintendents 1:3 Del.R. 263 (Prop.)

1:5 Del.R. 517 (Final)

Requirements for Vocational Technical Education Programs 1:6 Del.R. 662 (Prop.)

Satellite School Agreements 1:2 Del.R. 170 (Final)

School Bus Regulations 1:2 Del.R. 87 (Prop.)

1:5 Del.R. 473 (Final)

State Content Standards 1:2 Del.R. 151 (Final)

Visual & Performing Arts Content Standards 1:2 Del.R. 90 (Prop.)

Visual & Performing Arts Graduation Requirements 1:2 Del.R. 88 (Prop.)

Department of Finance

Div. of Revenue, Delaware State Lottery Office,

Video Lottery Employee Organization and Lottery Employee

Regulations 1:3 Del.R. 243 (Prop.)

Regulations dealing with Americans with Disabilities Act 1:7 Del.R. 826 (Prop.)

Technical Information Memo. 97-6 1:6 Del.R. 712 (Prop.)

Department of Health & Social Services

Adult Abuse Registry 1:7 Del.R. 803 (Prop.)

Ambulance Provider Policy Manual, Criteria for Non-Emergency

Ambulance Transportation for Medicaid Clients in a

Nursing Facility 1:4 Del.R. 394 (Prop.)

Assisted Living Agencies, Regulations for 1:4 Del.R. 300 (Prop.)

1:7 Del.R. 951 (Final)

DHS revision of Public Law 104-193, the Personal Responsibility

and Work Opportunity Reconciliation Act, Se. 403, 8 USC 1613,

the 1993 Mickey Leland Childhood Hunger Relief Act, the Food,

Agriculture, Conservation and Trade Act Amendments of 1991

Public Law 104-203, Title 38, USC, and DSSM Sec. 4006 & 4012 1:4 Del.R. 313 (Prop.)

Division of Public Health,

Licensing & Registration of Operators of Public Water

Supply Systems 1:1 Del.R. 28 (Prop.)

1:7 Del.R. 932 (Final)

Plumbing Code Regulations 1:7 Del.R. 830 (Final)

Public Pools 1:2 Del.R. 174 (Final)

Trauma System Rules 1:2 Del.R. 110 (Prop.)

1:7 Del.R. 891 (Final)

Prehospital Trauma Triage Scheme, ALS & BLS (Errata) 1:3 Del.R. 213 (Prop.)

DMAP Sec. 410.15, Vehicles 1:4 Del.R. 368 (Prop.)

DMAP Sec. 420 Personal Needs Allowance 1:4 Del.R. 369 (Prop.)

1:7 Del.R. 921 (Final)

DSSM Section 8000, A Better Chance Program 1:4 Del.R. 297 (Prop.)

Durable Medical Equipment Manual 1:5 Del.R. 563 (Prop.)

Inpatient Hospital Provider Manual 1:4 Del.R. 370 (Prop.)

Long-Term Care Provider Manual, Billing of Third Party Payer 1:4 Del.R. 394 (Prop.)

Long-Term Care Provider Manual, Criteria for Non-Emergency

Ambulance Transportation for Medicaid Clients in a

Nursing Facility 1:4 Del.R. 394 (Prop.)

Outpatient Hospital Provider Manual 1:4 Del.R. 383 (Prop.)

Revision of Regulation of the Medicaid/Medical Assistance Program

Contained in DMAP Sec. 420 1:3 Del.R. 214 (Emer.)

1:7 Del.R. 858 (Final)

1:6 Del.R. 711 (Prop.)

Revision of Regulation Contained in DSSM 8301.3 1:3 Del.R. 215 (Emer.)

Revision of Regulation DSSM 8205.2, 8304 & 8305 1:6 Del.R. 709 (Prop.)

Department of Labor

Div. of Employment & Training, Apprenticeship Programs 1:1 Del.R. 21 (Prop.)

Div. of Industrial Affairs

Prevailing Wage Regulations 1:5 Del.R. 519 (Prop.)

Procedures of Equal Employment Review Board 1:5 Del.R. 537 (Prop.)

Special Employment Practices relating to Health Care & Child Care

Facilities & Adult Abuse Registry Check 1:5 Del.R. 533 (Prop.)

Department of Natural Resources & Environmental Control

Div. of Air & Waste Management, Air Quality Management Section,

NO_x Budget Program 1:5 Del.R. 564 (Prop.)

Regulation No. 2 1:1 Del.R. 48 (Final)

Reg. No. 20, Sec. No. 28, Standards for Performance for

Municipal Solid Waste Landfills 1:4 Del.R. 330 (Prop.)

Div. of Air & Waste Management, Regulations Governing

Hazardous Waste 1:3 Del.R. 278 (Final)

Div. of Fish & Wildlife,

Atlantic Sturgeon Regulations 1:7 Del.R. 787 (Prop.)

Horseshoe Crab 1:7 Del.R. 807 (Prop.)

Shellfish Reg. No. S-41, Growing Areas Closed to Harvesting

Clams, Mussels & Oysters 1:4 Del.R. 354 (Prop.)

1:7 Del.R. 835 (Final)

Shellfish Regulation No. S-48. Conch Minimum Size Limits 1:3 Del.R. 250 (Prop.)

1:7 Del.R. 835 (Final)

Shellfish Reg. No. 55, Crab Trotlines & S-56, Crab Traps 1:4 Del.R. 354 (Prop.)

1:7 Del.R. 837 (Final)

Tidal Finfish Regulation No. 8 1:3 Del.R. 270 (Final)

Tidal Finfish Regulation No. 25 for Atlantic Shark 1:4 Del.R. 345 (Prop.)

1:7 Del.R. 844 (Final)

Div. of Water Resources, Regulations for Licensing Operators

of Wastewater Facilities 1:4 Del.R. 323 (Prop.)

1:7 Del.R. 924 (Final)

Regulations Governing the Control of Water Pollution 1:4 Del.R. 395 (Prop.)

Department of Services for Children, Youth and Their Families

Division of Family Services

Licensing Requirements for Residential Child Care Facilities

and Day Treatment Programs 1:6 Del.R. 668 (Prop.)

Office of Child Care Licensing, Child Abuse Registry 1:7 Del.R. 801 (Prop.)

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

Regulation No. 5.1101(f).0001, Election to be treated for tax purposes as a

"Subsidiary corporation" of a Delaware chartered banking organization or

trust company, national bank having its principal office in Delaware, or

out-of-state bank that operates a resulting branch in Delaware 1:3 Del.R. 219 (Prop.)

1:5 Del.R. 474 (Final)

Regulation No. 5.1101etal.0002, Instructions for preparation of Franchise

Tax Report 1:3 Del.R. 221 (Prop.)

1:5 Del.R. 476 (Final)

Regulation No. 5.1101etal.0003, Estimated Franchise Tax Report 1:3 Del.R. 224 (Prop.)

1:5 Del.R. 479 (Final)

Regulation No. 5.1101etal.0004, Final Franchise Tax Report 1:3 Del.R. 226 (Prop.)

maintaining branches in this state 1:3 Del.R. 228 (Prop.)

1:5 Del.R. 481 (Final)

Regulation No. 5.1101etal.0005, Instructions for preparation of

Franchise Tax for Federal Savings Banks not headquartered in this

state but maintaining branches in this state 1:3 Del.R. 228 (Prop.) 1:5 Del.R. 483 (Final)

Regulation No. 5.1101etal.0006, Estimated Franchise Tax Report Federal

Savings Banks not headquartered in Delaware 1:3 Del.R. 231 (Prop.)

1:5 Del.R. 486 (Final)

Regulation No. 5.1101etal.0007, Final Franchise Tax Report Federal

Savings Banks not headquartered in Delaware 1:3 Del.R. 232 (Prop.)

1:5 Del.R. 487 (Final)

Regulation No. 5.1101.etal.0008, Instructions for calculation of

Employment Tax Credits 1:3 Del.R. 233 (Prop.)

1:5 Del.R. 488 (Final)

Regulation No. 5.1101etal.0009, Instructions for preparation of

Franchise Tax for Resulting Branches in this state of out-of-state

banks 1:3 Del.R. 235 (Prop.)

1:5 Del.R. 490 (Final)

Regulation No. 5.1101etal.0010, Estimated Franchise Tax Report for

Resulting Branches in this state of out-of-state banks 1:3 Del.R. 239 (Prop.)

1:5 Del.R. 494 (Final)

Regulation No. 5.1101etal.0011, Final Franchise Tax Report for Resulting

Branches in this state for out-of-state banks 1:3 Del.R. 241 (Prop.)

1:5 Del.R. 496 (Final)

Regulation No. 5.131.0002, Procedures Governing the Creation &

Existence of an Interim Bank 1:5 Del.R. 592 (Prop.)

Regulation No. 5.2111(b).0005, Report of Delaware Loan Volume 1:7 Del.R. 812 (Prop.)

Regulation No. 5.2111/2210/2906.0006, Report of Delaware Assests 1:7 Del.R. 815 (Prop.)

Regulation No. 5.2210(e).0005, Report of Delaware Loan Volume 1:7 Del.R. 813 (Prop.)

Regulation No. 5.2318.0001, Report of Delaware Sale of Checks, Drafts,

and Money Orders Volume 1:7 Del.R. 813 (Prop.)

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

Motor Vehicle Installment Contracts 1:7 Del.R. 814 (Prop.)

Regulation No. 5.701/774.0001, Procedures for applications to form a

bank, bank & trust company or limited purpose trust company

pursuant to Chapter 7 of Title 5 of the Delaware Code 1:5 Del.R. 595 (Prop.)

1:7 Del.R. 862 (Final)

Regulation No. 5.761.0017, Incidental Powers 1:5 Del.R. 597 (Prop.)

1:7 Del.R. 865 (Final)

Regulation No. 5.770.0009, establishment of a branch office by a bank

or trust company 1:5 Del.R. 598 (Prop.)

1:7 Del.R. 866 (Final)

Regulation No. 5.771.0005, Procedures governing applications to open

branch offices outside the State of Delaware 1:5 Del.R. 599 (Prop.)

1:7 Del.R. 867 (Final)

Regulation No. 5.795etal.0016, Merger with out-of-state banks 1:5 Del.R. 601 (Prop.)

1:7 Del.R. 869 (Final)

Regulation No. 5.833.0004, Application by an out-of-state savings

institution, out-of-state savings & loan holding company or out-of-

state bank holding company to acquire a Delaware savings bank or

Delaware savings & loan holding company 1:5 Del.R. 602 (Prop.)

1:7 Del.R. 870 (Final)

Regulation No. 5.844.0009, Application by an out-of-state bank holding

company to acquire a Delaware bank or bank holding company 1:5 Del.R. 605 (Prop.)

1:7 Del.R. 873 (Final)

Regulation No. 5.777.0002, Application for a certificate of public

convenience & advantage for a limited purpose trust company pursuant

to subchapter V of Chapter 7 of Title 5 of the Delaware Code 1:5 Del.R. 609 (Prop.)

1:7 Del.R. 877 (Final)

Governor's Office

Amendment to Executive Order No. 46 1:3 Del.R. 279

Appointments & Nominations 1:1 Del.R. 68

1:2 Del.R. 200

1:3 Del.R. 281

1:4 Del.R. 438

1:5 Del.R. 623

1:6 Del.R. 740

1:7 Del.R. 970

Executive Order No. 45, Employee & Labor - Management Relations

in State Government 1:1 Del.R. 63

Executive Order No. 46, Governor's Task Force on Violent Crime 1:1 Del.R. 64

Amendment to Executive Order No. 46 1:3 Del.R. 279

Executive Order No. 47, Executive Committee of the Workforce

Development Council 1:1 Del.R. 65

Industrial Accident Board 1:5 Del.R. 548 (Prop.)

1:7 Del.R. 938 (Final)

Payment of Third Party Claims 1:5 Del.R. 591 (Prop.)

Public Service Commission

Regulation Docket No. 12, Notice of Investigation & Formulation of

Rules Concerning Pay Phone Services 1:1 Del.R. 5 (Prop.)

Regulation Docket No. 12, Investigation & Adoption of Rules to

Govern Payphone Services within the State of Delaware 1:3 Del.R. 263 (Prop.)

1:6 Del.R. 730 (Final)

Regulation Docket No. 47, Notice of Proposed Rule making Concerning

Intrastate Discounts for Schools & Libraries 1:1 Del.R. 9 (Prop.)

Regulation Docket No. 47, Notice of Proposed Rule making Concerning

Intrastate Discounts for Schools & Libraries 1:2 Del.R. 139 (Final)

Regulation Docket No. 47, Promulgation of Rules Regarding the Discounts

for Intrastate Telecommunications & Information Services Provided

to Schools & Libraries 1:5 Del.R. 462 (Final)

State Personnel Commission

Merit Employee Relations Board Regulations 1:3 Del.R. 274 (Final)

FINDINGS OF FACT

Legislation (H.B. 169), recently enacted by the 139th General Assembly, authorizes the Department of Natural Resources and Environmental Control to promulgate regulations for species of finfish that are consistent with management plans approved by the U.S. Secretary of Commerce. The Secretary of Commerce has approved Amendment One to the Fishery Management Plan for Atlantic sharks and federal regulations for Atlantic sharks (50 CFR Part 678).

Sharks comprise a valuable marine resource to U.S. Atlantic States. Unfortunately, Atlantic sharks have been seriously overfished in the past two decades leading to declines of as much as 80% in some stocks. The Delaware regulations would bring state fishery management in line with the current federal fishery management plan for sharks of the Atlantic Ocean. This would assist greatly the effort to stop overfishing and help rebuild critical stocks of sharks.

Because sharks reproduce very slowly, giving live birth in most cases to a very few young per year in a way much more like land mammals than the other fishes, the protection of the young sharks in their nursery areas is of paramount importance. Delaware state waters contain some shark nurseries, including an important one in Delaware Bay for the sand tiger shark, a popular aquarium animal and a species that has been decimated by overfishing. Delaware Bay also is an important pupping and nursing area for the sandbar shark. Measures to protect the young sharks in their nurseries in state waters, therefore, will help conserve these biologically limited stocks and rebuild populations along the Mid-Atlantic coast.

The Advisory Council on Tidal Finfisheries discussed the proposed shark regulation at their September 16, 1997 meeting. They supported the regulations provided the no finning and no filleting sections were reworded to not contradict each other.

With the evidence and information received regarding Atlantic sharks, the Department finds the attached Tidal Finfish Regulation No. 25, ATLANTIC SHARKS, should be adopted in the public interest for the conservation of certain Atlantic sharks in Delaware.

ORDER

It is hereby ordered, this 25^th day of November, 1997 that the above referenced Tidal Finfish Regulation No. 25, a copy of which is attached hereto, is adopted
The following order adopting a regulation and the final regulation are being published again due to changes that were made in the regulation as a result of the public hearing process. The correct final regulation was not published in issue 7. The original regulation as proposed and the final regulation as adopted follow

Departement of Natural

Resources & Environmental Control

Division of Fish & Wildlife

Statutory Authority: 7 Delaware Code,

Section 902(e)(3) ( 7 Del.C. 902(e)(3))

In Re: Adoption of a new Tidal Finfish

Regulation No. 25 in accordance

with the approved Fishery Management

Plan for Atlantic sharks.

Order No. 97-F-0038

ORDER

SUMMARY OF THE EVIDENCE AND INFORMATION

Pursuant to due notice, the Department of Natural Resources and Environmental Control proposes to add a new Tidal Finfish Regulation No. 25, ATLANTIC SHARKS, to be consistent with the Fishery Management Plan for Sharks of the Atlantic Ocean, as amended, and final rules approved by the Secretary of Commerce ( 50 CFR Part 678).

This regulation will make it illegal to possess certain sharks in the management unit after a federal semi-annual commercial quota is landed for large pelagic sharks, small coastal sharks or pelagic sharks; implement a recreational creel limit; prohibit directed commercial fishing for, landing of, or sale of five species of sharks; prohibit filleting of sharks at sea and prohibit the removal of any fins from a shark in the management unit and discarding the remainder at sea. These regulations are intended to reduce effective fishing mortalities, stabilize the large coastal shark population, facilitate enforcement and improve management of Atlantic shark resources. Sharks in the management unit are currently at very low populations due to recent increases in their harvest.

A public hearing was held on, October 27, 1997, in Dover, Delaware, in front of Charles A. Lesser, Fisheries

Christophe A.G. Tulou, Secretary

Department of Natural Resources

and Environmental Control

* Proposed Regulation 25.

TIDAL FINFISH REGULATION 25. ATLANTIC SHARKS;

A) Definitions

1) Fillet means to remove slices of fish flesh, of irregular size and shape, from the carcass by cuts made parallel to the backbone.

2) Large coastal sharks species means any of the species, or a part thereof, listed in paragraph (a) of the definition of management unit.

3) Land or Landing shall mean to put or cause to go on shore from a vessel.

4) Management Unit means any of the following species in the Western Atlantic Ocean, Delaware's Territorial Sea or tidal waters of Delaware:

(a) Large coastal species:

Hammerhead sharks-- Sphyrnidae

Great hammerhead, Sphyrna mokarran

Scalloped hammerhead, Sphyrna lewini

Smooth hammerhead, Sphyrna zyqaena

Mackerel sharks--Lamnidae

White shark, Carcharodon carcharias

Nurse sharks--Ginglymostomatidae

Nurse shark, Ginglymostoma cirratum

Requiem sharks--Carcharhinidae

Bignose shark, Carcharhinus altimus

Blacktip shark, Carcharhinus limbatus

Bull shark, Carcharhinus leucas

Caribbean reef shark, Carcharhinus perezi

Dusky shark, Carcharhinus obscurus

Galapagos shark, Carcharhinus galapaqensis

Lemon shark, Neqaprion brevirostris

Narrowtooth shark, Carcharhinus brachyurus

Night shark, Carcharhinus siqnatus

Sandbar shark, Carcharhinus plumbeus

Silky shark, Carcharhinus falciformis

Spinner shark, Carcharhinus brevipinna

Tiger shark, Galeocerdo cuvieri

(b) Small coastal species:

Angel sharks--Squatinidae

Atlantic angel shark, Squatina dumerili

Hammerhead sharks--Sphyrnidae

Bonnethead, Sphyrna tiburo

Requiem sharks--Carcharhinidae

Atlantic sharpnose shark, Rhizoprionodon
terraenovae

Blacknose shark, Carcharhinus acronotus

Caribbean sharpnose shark, Rhizoprionodon porosus

Finetooth shark, Carcharhinus isodon

Smalltail shark, Carcharhinus porosus

(c) Pelagic species:

Cow sharks--Hexanchidae

Bigeye sixgill shark, Hexanchus vitulus

Sevengill shark, Heptranchias perlo

Sixgill shark, Hexanchus griseus

Mackerel sharks--Lamnidae

Longfin mako, Isurus paucus

Porbeagle shark, Lamna nasus Shortfin mako, Isurus oxyrinchus

Requiem sharks--Carcharhinidae

Blue shark, Prionace qlauca

Oceanic whitetip shark, Carcharhinus longimanus

Thresher sharks--Alopiidae

Bigeye thresher, Alopias superciliosus

Thresher shark, Alopias vulpinus

(d) Prohibited species:

Basking sharks--Cetorhinidae

Basking shark, Cetorhinidae maximus

Mackerel sharks--Lamnidae

White shark, Carcharodon carcharias

Sand tiger sharks--Odontaspididae

Bigeye sand tiger, Odontaspis noronhai

Sand tiger, Odontaspis taurus

Whale sharks--Rhincodontidae

Whale shark, Rhincodon typus

(5) Pelagic species means any of the species, or a part thereof, listed in paragraph (c) of the definition of management unit.

(6) Prohibited species means any of the species, or a part thereof, listed in paragraph (d) of the definition of management unit.

(7) Small coastal species means any of the species, or part thereof, listed in paragraph (b) of the definition of management unit.

(B) Prohibitions

1) It shall be unlawful for any person to fish for, purchase, trade, barter, or possess or attempt to fish for, purchase, trade, barter, or possess a prohibited species.

2) It shall be unlawful for any person to remove the fins from any shark in the management unit and discard the remainder prior to landing said shark.

3) It shall be unlawful for any person to fillet a shark in the management unit except that a shark may be eviscerated and the head and fins removed prior to landing said shark.

4) It shall be unlawful to release any shark in the management unit in a manner that will not ensure maximum probability of survival.

6) It shall be unlawful for any person who has been issued a valid commercial food fishing license while on board any vessel to possess any large coastal shark, any small coastal shark or any pelagic shark in the management unit during the remainder of any period after the effective date a commercial quota for that group of sharks has been reached in said period or is projected to be reached in said period by the National Marine Fisheries Service, National Oceanic and Atmospheric Administration, U.S. Department of Commerce and published in the Federal Register.

Bonnethead, Sphyrna tiburo

Atlantic sharpnose shark, Rhizoprionodon terraenovae

Blacknose shark, Carcharhinus acronotus

Caribbean sharpnose shark, Rhizoprionodon porosus

Finetooth shark, Carcharhinus isodon

Smalltail shark, Carcharhinus porosus

(6) Pelagic species shall mean any of the following species of sharks or parts thereof:

Bigeye sixgill shark, Hexanchus vitulus

Sevengill shark, Heptranchias perlo

Sixgill shark, Hexanchus griseus

Longfin mako, Isurus paucus

Porbeagle shark, Lamna nasus

Shortfin mako, Isurus oxyrinchus

Blue shark, Prionace qlauca

Oceanic whitetip shark, Carcharhinus longimanus

Bigeye thresher, Alopias superciliosus

Thresher shark, Alopias vulpinus

(7) Prohibited species shall mean any of the following species of sharks or parts thereof:

Basking shark, Cetorhinidae maximus

White shark, Carcharodon carcharias

Bigeye sand tiger, Odontaspis noronhai

Sand tiger, Odontaspis taurus

Whale shark, Rhincodon typus

(b) It shall be unlawful for any person to land, purchase, trade, barter, or possess or attempt to land, purchase, trade, barter, or possess a prohibited species.

(c) It shall be unlawful for any person to possess the fins from any shark in the management unit prior to landing sand shark unless said fins are naturally attached to the body of said shark.

(d) It shall be unlawful for any person to fillet a shark in the management unit prior to landing said shark. A shark may be eviscerated and the head removed prior to landing said shark.

(e) It shall be unlawful to release any shark in the management unit in a manner that will not ensure said sharks maximum probability of survival.

(f) It shall be unlawful for the operator of any vessel without a commercial food fishing license to have on board said vessel more than two sharks in the management unit except that two Atlantic sharpnose sharks also may be on board.

(g) It shall be unlawful for any person who has been issued a valid commercial food fishing license while on board any vessel to possess any large coastal shark, any small coastal shark or any pelagic shark in the management unit during the remainder of any period after the effective date a commercial quota for that group of sharks has been reached in said period or is projected to be reached in said period by the National Marine Fisheries

TIDAL FINFISH REGULATION 25. ATLANTIC SHARKS

(a) Definitions:

(1) Fillet shall mean to remove slices of fish flesh, of irregular size and shape, from the carcass by cuts made parallel to the backbone.

(2) Land or Landing shall mean to put or cause to go on shore from a vessel.

(3) Management Unit shall mean any of the large coastal species, small coastal species, pelagic species and prohibited species of sharks or parts thereof defined in this regulation.

(4) Large coastal species shall mean any of the following species of sharks or parts thereof:

Great hammerhead, Sphyrna mokarran

Scalloped hammerhead, Sphyrna lewini

Smooth hammerhead, Sphyrna zyqaena

White shark, Carcharodon carcharias

Nurse shark, Ginglymostoma cirratum

Bignose shark, Carcharhinus altimus

Blacktip shark, Carcharhinus limbatus

Bull shark, Carcharhinus leucas

Caribbean reef shark, Carcharhinus perezi

Dusky shark, Carcharhinus obscurus

Galapagos shark, Carcharhinus galapaqensis

Lemon shark, Neqaprion brevirostris

Narrowtooth shark, Carcharhinus brachyurus

Night shark, Carcharhinus siqnatus

Sandbar shark, Carcharhinus plumbeus

Silky shark, Carcharhinus falciformis

Spinner shark, Carcharhinus brevipinna

Tiger shark, Galeocerdo cuvieri

(5) Small coastal species shall mean any of the following species of sharks or parts thereof:

Atlantic angel shark, Squatina dumerili

(h) It shall be unlawful for any person to engage in a directed commercial fishery for a prohibited species.

Section 2. CONSERVATION STATEMENT

This Tidal Finfish Regulation No. 25 will have a significant impact on the conservation of Atlantic Sharks.

Section 3. This Tidal Finfish Regulation No. 25 shall become effective on January 31, 1998.

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

Roman type indicates the text existing prior to the regulation being promulgated. Underlined text indicates new text. Language which is striken through indicates text being deleted.

Proposed Regulations

Under 29 Del.C. §10115 whenever an agency proposes to formulate, adopt, amend or repeal a regulation, it shall file notice and full text of such proposals, together with copies of the existing regulation being adopted, amended or repealed, with the Registrar for publication in the Register of Regulations pursuant to §1134 of this title. The notice shall describe the nature of the proceedings including a brief synopsis of the subject, substance, issues, possible terms of the agency action, a reference to the legal authority of the agency to act, and reference to any other regulations that may be impacted or affected by the proposal, and shall state the manner in which persons may present their views; if in writing, of the place to which and the final date by which such views may be submitted; or if at a public hearing, the date, time and place of the hearing. If a public hearing is to be held, such public hearing shall not be scheduled less than 20 days following publication of notice of the proposal in the Register of Regulations. If a public hearing will be held on the proposal, notice of the time, date, place and a summary of the nature of the proposal shall also be published in at least 2 Delaware newspapers of general circulation; The notice shall also be mailed to all persons who have made timely written requests of the agency for advance notice of its regulation-making proceedings.

DEPARTMENT OF ADMINISTRATIVE SERVICES

DIVISION OF PROFESSIONAL REGULATION

BOARD OF EXAMINERS OF PSYCHOLOGISTS

PROPOSED RULES AND REGULATIONS

Statutory Authority: Title 24, Section 3506 (a)(1) of the Delaware Code (24 Del. C. Section 3506(a)(1))

department of administrative services

Division of Professional Regulation

Delaware Board of Examiners of Psychologists

Statutory Authority: 24 Delaware Code,

Section 3506(a)(1) (24 Del.C. 3506(a)(1))

DELAWARE BOARD OF EXAMINERS OF PSYCHOLOGISTS

NOTICE OF PUBLIC HEARING

PLEASE TAKE NOTICE, pursuant to 29 Del. C. Chapter 101 and 24 Del. C. Section 3506(a)(1), the Delaware Board of Examiners of Psychologists proposes to repeal the existing Rules and Regulations and adopt the new Rules and Regulations. The regulations will define the official board office, meetings of the board, officers of the board, procedures for licensure, evaluation of credentials, supervised experience, failure to pass examination, psychological assistants, continuing education, professional conduct, complaint procedures, license renewal and procedures for licensure applicable to full-time faculty members in a nationally accredited doctoral level clinical training program in the State of Delaware.

A public hearing will be held on the proposed Rules and Regulations on March 9, 1998 at 9:30 a.m. in the Second Floor Conference Room A of the Cannon Building, 861 Silver Lake Boulevard, Dover, Delaware. The Board will receive and consider input from interested persons on the proposed rules and regulations, and individuals are urged to submit their comments in writing. Anyone wishing to obtain a copy of the proposed regulations, or to make comments at the public hearing, should contact the Board's Administrative Assistant Gayle Franzolino by calling (302) 739-4522 Ext. 220, or write to the Delaware Board of Examiners of Psychologists, P. O. Box 1401, Cannon Building, Suite 203, Dover, DE 19903.

The Board of Examiners of Psychologists has been established under the Delaware law, Title 24, Chapter 35, and current amendments to that Law. Within the framework of the Law, the Board has the responsibility for interpreting and implementing the legal provisions and requirements of the Law through the establishment of operating Rules and Regulations. The Board and the public may propose changes in the Rules and Regulations in accordance with the Administrative Procedures Act, Del.C., Title 29, Chapter 101.

SECTION 02 - OFFICIAL BOARD OFFICE

The official office of the Board of Examiners shall be in Dover in the Division of Professional Regulation and all correspondence must be addressed to this office in written form before official action can be taken. In addition, the Division of Professional Regulation will provide an Administrative Assistant who will take notes at Board meetings, keep the records for the Board, and serve as a liaison between the Board and members of the public who have questions for the Board. The Division of Professional Regulation will also set fees to defray the cost of regulation.

SECTION 03 - MEETINGS OF THE BOARD

The Board will hold such meetings during the year as it may deem necessary to review licensure applications and psychological assistant applications, evaluate continuing education, hold disciplinary hearings, or conduct other Board business. Either the President, or the majority of the Board may call a Board meeting. The Division of Professional Regulation Board members, and the public shall be notified of the meeting agenda, time and location in accordance with the Freedom of Information Act.

SECTION 04 - OFFICERS OF THE BOARD

The Board elects its own officers at the first meeting of each calendar year. The President of the Board sets the agendas of the meetings, chairs meetings, and represents the Board at state regulatory meetings, the American Association of State and Provincial Psychology Boards, and other organizations that may interface with the Board unless someone else is designated to attend in place of the President. The Vice President or Secretary acts for the President in the President's absence. The Secretary of the Board, in conjunction with the Administrative Assistant from the Division of Professional Regulation, is responsible for taking care of Board correspondence.

SECTION 05 - PROCEDURES FOR LICENSURE

APPLICATION - INITIAL LICENSURE

An applicant who is applying for licensure as a psychologist shall submit evidence showing that he/she meets the requirements of 24 Del. C. Section 3508. The applicant must submit the following:

1. An application for licensure, which shall include: a) Academic credentials documented by official transcripts showing completion of an educational program meeting the requirements of 24 Del. C. Section 3508(a)(1).

b) Supervised experience documented by having each supervisor complete a Supervisory Reference Form.

c) Evidence that the applicant passed the written "Examination for Professional Practice in Psychology", developed by the Association of State and Provincial Psychology Boards (ASPPB), by achieving the passing score recommended by the ASPPB at the time of the application for licensure. Candidates who are not licensed in any other state must have passed the written examination within five (5) years of application for licensure in Delaware.

d) Verification that the applicant has no past or pending disciplinary proceedings. [24 Del. C. Section 3508(a)(4)]

The application shall not be considered complete until all materials are received by the Board for review at an officially scheduled meeting. The applicant will have twelve (12) months from the date of initial submission of the application and fee to complete the application process.

2.Completed certification form. The applicant will be notified, once his/her application is complete and available for the Board's review. The certification form must be submitted before any further action can be taken.

APPLICATION - BY RECIPROCITY

An applicant who is applying for licensure as a psychologist by reciprocity, as defined in 24 Del. C. Section 3511, shall submit evidence that he/she meets the following requirements:

1. An application for licensure, which shall include:

a) Evidence that the applicant is licensed or certified in another state and that the applicant has practiced continuously, as a doctoral-level psychologist, in good standing in that jurisdiction for two (2) years.

b) Evidence that the applicant passed the written Examination for Professional Practice of Psychology (EPPP) by achieving the passing

2. Completed certification form. The applicant will be notified once his/her application is complete and available for the Board's review. The certification form must be submitted before any further action can be taken.

SECTION 06 - EVALUATION OF CREDENTIALS

Candidates for licensure as psychologists in the State of Delaware shall:

1. Have received a doctoral degree based on a program of studies, which is psychological in content and specifically designed to train and prepare psychologists. The doctoral degree must be from a college or university, accredited as required by 24 Del. C. Section 3508(a)(1), having a graduate program which states its purpose to be the training and preparation of psychologists. Candidates holding degrees from programs outside the United States or its territories are responsible for providing verification from an agency recognized by the Board that their training and degree are equivalent to US accredited programs; and

2. Have had, after receiving the doctoral degree, at least 2 years of supervised professional experience in psychological work satisfactory to the Board; and

3. Have achieved the passing score on the written standardized Examination for Professional Practice in Psychology (EPPP) developed by the Association of State and Provincial Psychology Boards (ASPPB), or its successor, or

4. The Board will qualify for licensing without examination any person who applied for licensure and who is a diplomate of the American Board of Professional Psychology. All such applicants must meet all other requirements for licensure.

SECTION 07 - SUPERVISED EXPERIENCE

The types of supervision pertinent to licensure as a psychologist or registration as a psychological assistant comprises of three types of supervisory experiences:

1. Predoctoral internship supervision as required by doctoral programs in psychology. The predoctoral internship consists of a minimum of 1,500 hours of actual work experience completed in not less than 48 weeks, nor more than 104 weeks. At least 50% of the predoctoral supervised experience must be in clinical services such as treatment, consultation, assessment, report writing, with at least 25% of that time devoted to face-to-face direct patient/client contact. No more than 25% of time shall be allocated for research.

2. Postdoctoral supervision is required for initial licensure as a psychologist. Post doctoral experience must consist of 3,000 hours of actual work experience.
This experience is to be completed in not less than two years and not more than three calendar years, save for those covered under Section 3519(e). For those individuals the accrual of 3,000 hours of supervised postdoctoral experience must take place within six calendar years from the time of hire. There is to be one hour of face-to-face supervision for every 1-10 hours of clinical work. This experience shall consist of at least twenty five percent and not more than sixty percent of the time devoted to direct service per week in the area of the applicant's academic training. Not more than 25% of this supervision can be done by other licensed mental health professionals besides psychologists.

3. Supervision of psychological assistants is required at the frequency of one hour of face-to-face supervision for every 1-10 hours of clinical work by the psychological assistants, as required by Section 9 of the Rules and Regulations.

A psychologist providing either postdoctoral supervision or supervision of psychological assistants must have been in practice for two years post licensure in this or any other state without having been subject to any disciplinary actions.

A supervising psychologist of the postdoctoral experience of psychological assistant must provide 24 hour availability to both supervisee and the supervisee's clients, or adequate coverage is provided in supervisor's absence.

This supervising psychologist shall have sufficient knowledge of all clients including face-to-face contact when necessary.

The supervising psychologist must be employed or under contract in the setting where the clinical service takes place and that the supervision must occur within that setting.

SECTION 08 - FAILURE TO PASS EXAMINATION

Applicants may take the Examination for the Professional Practice in Psychology as many times as they choose. Intervals between testing will be determined by the testing agency and the ASPPB.

SECTION 09 - PSYCHOLOGICAL ASSISTANTS

A psychological assistant is an individual who meets the requirements of 24 Del. C. Section 3509(2a-2e). Psychological assistants are supervised, directed, and evaluated by a Delaware licensed psychologist who assumes professional and legal responsibility for the

The Delaware licensed psychologist is identified as the legally and ethically responsible party in all advertising, public announcements, and billings. In addition, billings and advertisements will clearly indicate that the service is being provided by a psychological assistant. All treatment and evaluation reports prepared by the psychological assistant must be signed by the psychologist and the psychological assistant.

The Delaware licensed psychologist who accepts the responsibility of using a psychological assistant shall develop and maintain a current, written job description delineating the range and type of duties, educational practicum and clinical experience to be assigned to the psychological assistant, limits of independent action, emergency procedures for contacting the supervising psychologist, and the amount and type of supervision to be provided. This job description must be signed by the psychologist and the psychologist assistant and will be filed in the Division of Professional Regulation, along with an official copy of the psychological assistant's college transcript, and proof of a 450-hour clinical practicum supervised by a licensed psychologist or by a faculty member in a nationally accredited doctoral level clinical training program in the State of Delaware who is
actively pursuing licensure. The psychological assistant will also provide a statement under oath as outlined in 24 Del. C. Section 3509 (b1- b3).

The Board will then review credentials, job description and supervisory arrangements, and if the arrangements are acceptable, will inform the psychologist in writing that the psychological assistant can begin work. No psychological assistant shall begin work until the Board has approved the application. Registration for psychological assistants expire biennially and continued performance of the duties of a psychological assistant requires proof of twenty (20) hours of continuing education and payment of the renewal fee.

Supervision of the psychological assistant by the Delaware licensed psychologist is to be a regular and formal process. It is required that the licensed psychologist and the psychological assistant have weekly one-on-one, face-to-face supervision with review of each case served by the psychological assistant. The supervising psychologist should be familiar with each patient/client seen by the psychological assistant and with the ongoing progress of treatment. One hour of supervision for every ten hours, or fraction thereof, of direct clinical work by the psychological assistant is required as a minimum. For example, if a psychological assistant provides eight (8) hours of direct clinical service, he or she must receive a minimum of one (1) hour of supervision. Likewise, a psychological assistant, who has fifteen (15) hours of direct clinical contact, must receive at least two (2) hours of supervision. This supervision must be documented in writing on patient records. In addition, the supervising psychologist shall submit at the time of relicensure and at the termination of the supervision relationship a supervision report on a form provided by the Board which will become a part of the public record. It will contain information describing the date and amount of supervision and any unscheduled supervisory contact, as well as a brief assessment of the psychological assistant's functioning.

Psychological assistants are to work in the office of the licensed psychologist so as to have regular and continued supervision. When the licensed psychologist is not in the office , he or she is expected to provide clear contingency plans for consultation for the psychological assistant. It is assumed that the psychologist will be available to the psychological assistant under most circumstances; therefore, arrangements in which the supervising psychologist is employed full-time elsewhere will not be approved, unless it can be demonstrated that there will be adequate supervision and contingency coverage of the psychological assistant. Supervising

Psychological assistants who work for agencies must be supervised by a psychologist employed by or under contract to the agency. Supervision must occur on site, and the agency must have clearly spelled out plans for providing consultation and backup when the supervising psychologist is not on site. A psychological assistant who provides services that are under the direction of different psychologists, must register as a psychological assistant with all of the psychologists who are directly supervising the clinical work.

When there is a complaint of incompetent, improper, or unethical behavior on the part of the psychological assistant, in addition to the disciplinary action against the psychological assistant, disciplinary action may be taken against the supervising psychologist for failing to provide adequate supervision of the psychological assistant. The Board reserves the right to suspend or revoke the Delaware licensed psychologist's privilege of hiring a psychological assistant when just cause has been established through a formal hearing. Violation of this regulation may constitute cause for suspending or revoking the privilege of hiring a psychological assistant.

Patients/clients are always the responsibility of the supervising psychologist. Termination or transfer plans must be worked out with the approval of the supervising psychologist. A psychological assistant will be considered to be working for the supervising psychologist until the Board of Examiners is notified in writing of the change in arrangements. The letter terminating a psychological assistant arrangement must also specify if the supervising psychologist is terminating the arrangement because of concerns about the ethical or professional behavior of the psychological assistant.

SECTION 10 - CONTINUING EDUCATION

1. Psychologists must obtain 40 hours of continuing education every two years in order to be eligible for renewal of license. Psychologists will be notified in January that he/she may submit their documentation beginning March 1st. Continuing education credit must be submitted for the period of August 1st of the year of renewal to July 31st of the second year. Individuals licensed within the two year period will be notified by the Board of the prorated amount to submit.

2. Psychological assistants must obtain 20 hours of continuing education every two years for re-registration.
Psychological assistants may submit their documentation beginning March 1st. The appropriate period for credits to be accrued is from August 1st of the year of renewal to July 31st of the second year. Psychological assistants registered within the two year period will be notified by the Board of the prorated amount to submit.

3. Psychologists or psychological assistants who have not submitted their material by July 31st will be allowed, to reapply for licensure or registration, until August 31st. In the situation where the appropriate amount of documentation has been submitted in a timely fashion and in good faith and with reasonable expectation of renewal, but has been found to be inadequate, the practitioner has 30 days from the notification of inadequacy to submit valid continuing education credit in the amount specified, or until August 31st of that year, whichever is later.

4. It is the responsibility of the psychologist or psychological assistant to file a record of his/her continuing education. Documentation of continuing education will consist of letters/certificates of attendance from the sponsoring entity.

5. The subject of the continuing education must contribute directly to the professional competency of a person licensed to practice as a psychologist or registered as a psychological assistant. The activity must have significant intellectual or practical content and deal with psychological techniques, issues or ethical standards relevant to the practice of psychology.

6. Activities from APA-approved continuing education sponsors will be automatically accepted. The following may be eligible:

a. Other programs which are not APA-approved sponsors but where the material is relevant to professional practice and provides the equivalent of APA-defined credit. An applicant must provide a brochure or other documentation that supports the following criteria: relevance, stated objectives, faculty and educational objectives, faculty and educational objectives. To document attendance and completion, a certificate of attendance is required. In these circumstances, hours will be accrued on the basis of clock hours involved in the training.

b. Graduate courses relevant to professional practice taken for educational credit offered by a regionally accredited academic institution of higher education. Each credit hour of a course is equivalent to 5 CE hours.

c. Teaching an undergraduate or graduate level course in applied psychology at an accredited institution. Teaching a 3 hour semester or quarter course is considered the equivalent of 5 CE credit. No more than 5 CE credits may be completed in this manner for any renewal period and can be submitted only for the first time that a course is

d. Teaching of a workshop or conduction of a seminar on a topic of pertinence to the practice of psychology. Credit earned for one day is a maximum of 2 credits, two days is a maximum of 3 credits, and three days or more is a maximum of 5 credits. However, credit can be earned only once for teaching a particular seminar or workshop and not be eligible for re-submission at any time. Appropriate documentation is considered to be the brochure and demonstration of the workshop being held by the sponsoring entity.

e. Authorship, editing or reviewing of a publication. Credit may be earned only in the year of the publication and is limited to the following:

1) Author of a book (maximum of 40 CE hours)

2) Author of a book chapter or journal article (maximum of 15 CE hours)

3) Editor of a book (maximum of 25 CE hours)

4) Editor of or reviewer for a scientific or professional journal recognized by the Board (maximum 25 CE hours)

Proof of the above must include the submission of the work or documentation of authorship by copy of title pages.

f. Preparing and presenting a scientific or professional paper or poster at a meeting of a professional or scientific or professional organization. Up to 2 hours may be claimed for a poster presentation. Up to 3 hours of credit may be claimed for each hour of paper presentation, with a maximum of 8 CE hours per paper. Listing within the program and certificate letters of attendance at the meeting is appropriate documentation for both a paper or poster presentation.

7. The Board reserves the right to reject any CE program, if it is outside the scope of the practice of psychology.

8. The following will not be considered for credit: service to organizations; attending business meetings of professional organizations; business management or office administration courses; group supervision; or case conferences.

SECTION 11 - PROFESSIONAL CONDUCT

Psychologists and psychological assistants may be disciplined for violations of provisions of 24 Del. C. Section 3514.

SECTION 12 - COMPLAINT PROCEDURES

Complaints against psychologists and psychological assistants will be investigated as provided by 29 Del. C. Section 8807 and all hearings shall be conducted in accordance with the Administrative Procedures Act, 29 Del. C. Chapter 101.

Complaints must be filed, in writing, with the Division of Professional Regulation.

SECTION 13 - LICENSE RENEWAL

Renewal notices will be mailed in a timely fashion to all psychologists and psychological assistants who are currently licensed or registered. Continuing education requirements must be fulfilled as detailed in Section 10 of the Rules and Regulations and submitted along with the established fee for renewal to be approved. Should any psychologist fail to renew and continue to make representation as a licensed psychologist beyond July 31st, that individual is practicing without a license. Should any psychological assistant fail to renew and continue to make representation as a registered psychological assistant beyond July 31st, that individual is considered no longer to be registered, and his/her supervising psychologist is in violation of the law.

SECTION 14 - PROCEDURES FOR LICENSURE APPLICABLE TO FULL-TIME FACULTY MEMBERS IN A NATIONALLY ACCREDITED DOCTORAL LEVEL CLINICAL TRAINING PROGRAM IN THE STATE OF DELAWARE

University faculty employed full-time in a nationally accredited doctoral level clinical training program in the State of Delaware, as specified in 24 Del. C. Section 3519(e), who are not licensed, are subject to the following rules and regulations:

1. Active Pursuit of Licensure. Such individuals are required to be in active pursuit of licensure for a period not to exceed six years.

2. Professional Activities. These individuals may participate in and may supervise matriculated graduate students in activities defined as the practice of psychology within the context of a clinical training program, and may conduct any research and teaching activities related to the activities of such a program.

3. Registration. Such individuals must register with the Board of Examiners of Psychologists no later than thirty days after the commencement of employment, indicating employer, position, and dates.

The six-year time frame for the completion of licensure requirements commences with the initial date of

The six-year time frame for individuals employed as of June 12, 1995, commenced on this date. These individuals must register with the Board no later than thirty days after the enactment of these Rules and Regulations.

4. Education. Such individuals must have completed the doctoral degree at the time employment commences, to be considered eligible to perform the duties, as outlined in 24 Del. C. Section 3519(e).

5. Supervision. Such individuals must register a supervision plan with the Board of Examiners of Psychologists which includes the nature of work and the name of the supervisor. His/her plan must be acceptable to the Board, as outlined in Section 07 of the Rules and Regulations, if not, the plan must be revised accordingly. An affidavit signed by the supervisor must be submitted in fulfillment of requirements for licensure.
Department of Administrative Services

Division of Professional Regulation

Delaware Real Estate Commission

Statutory Authority: 24 Delaware Code,

Section 2905 (24 Del.C. 2905)

DELAWARE REAL ESTATE COMMISSION

RULES AND REGULATIONS

TABLE OF CONTENTS

Section II

SECTIONS: PAGE

Introduction 1

Requirements for Obtaining

a Salesperson's License 3

Requirements for Obtaining a Real

Estate Broker's License 4

Reciprocal Licenses 6

Escrow Accounts 7

Transfer of Broker or Salesperson 8

Discipline of a Real Estate

Broker or Salesperson 9

Refund of Fees 10

Business Transactions and Practices 11

Renewal of Licenses 13

Inactive Status 14

Availability of Rules and Regulations 15

Disclosure 16

Hearings 18

Inducements 19

Necessity of License 20

Out of State Land Sales Applications

* Please note that the above page numbers refer to the original document, not to pages in the Register.

For Revision Effective March 2, 1996

Table of Contents to be Revised to Reflect Revised Rules upon Adoption by Commission

DELAWARE REAL ESTATE COMMISSION RULES AND REGULATIONS

I. INTRODUCTION

A. Authority

1. Pursuant to 24 Del. C. Section 2905, the Delaware Real Estate Commission is authorized and empowered and hereby adopts the rules and regulations contained herein.

2. The Commission reserves the right to make any amendments, modifications or additions hereto, that, in its discretion are necessary or desirable.

3. The Commission reserves the right to grant exceptions to the requirements of the rules and regulations contained herein upon a showing of good cause by the party requesting such exception, provided such exception is not inconsistent with the requirements of 24 Del. C. Chapter 29.

B. Applicability

The rules and regulations contained herein, and any amendments, modifications or additions hereto are applicable to all persons presently licensed as real estate brokers or real estate salespersons, and to all persons who apply for such licenses.

C. Responsibility

1. It is the responsibility of the employing broker to insure that the rules and regulations of the Commission are complied with by licensees.

2. Each office location shall be under the direction of a broker of record, who shall provide complete and adequate supervision of that office. A broker serving as broker of record for more than one office location within the State shall apply for and obtain an additional license in his name at each branch office. The application for such additional license shall state the location of the branch office and the name of a real estate broker or salesperson licensed in this State who shall be in charge of managing the branch office on a full time basis.

A broker shall not serve as broker of record unless said broker has been actively engaged in the practice of real es
tate, either as a licensed salesperson or a licensed broker, for the preceding three (3) years.

Where an unforeseen event, such as a resignation or termination from employment, death, emergency, illness, call to military service or training, or a sanction imposed by the Commission causes or necessitates the removal of the sole licensed broker in an office, arrangements may be made with the Commission for another broker to serve as broker of record for said office on a temporary basis.

The employment of a sales manager, administrative manager, trainer, or other similar administrator shall not relieve the broker of record of the responsibilities contained and defined herein.

3. The failure of any licensee to comply with the Real Estate Licensing Act and the rules and regulations of the Commission may result in disciplinary action in the form of a reprimand, civil penalty, suspension or revocation of the broker's the and/or salesperson's individual's license.

II. REQUIREMENTS FOR OBTAINING A SALESPERSON'S LICENSE

The Commission shall consider any applicant who has successfully completed the following:

A. Course

1. The Commission shall consider any applicant who has successfully completed an accredited course in Real Estate Practice.

2. Effective May 1, 1978, all real estate courses shall be limited to thirty-five (35) students in each class. This applies to both day and night courses. All other regulations regarding real estate courses are issued under "Guidelines for Fulfilling the Delaware Real Estate Continuing Education Requirements Schools ". The Commission reserves the right to grant exception to this limitation.

B. Examination

1. Within twelve (12) months of completing an accredited course, the applicant must make application to the Commission by submitting a score report showing successful completion of the examination required by the Commission. The applicant must and forward all necessary documentation to the Commission to be considered for licensure.

2. An applicant may sit for the examination a maximum of three (3) times after successful completion of an approved course in real estate practice. If an applicant fails to pass the examination after three (3) attempts at such, the applicant shall be required to retake and successfully complete an approved course in real estate practice before being permitted to sit for the examination again.

C. Ability to conduct business

1. The Commission reserves the right to reject
an applicant based on his or her inability to transact real estate business in a competent manner or if it determines that the applicant lacks a reputation for honesty, truthfulness and fair dealings.

2. The minimum age at which a salesperson's license can be issued is eighteen (18).

D. Fees

The Commission shall not consider an application for a salesperson's license unless such application is submitted with evidence of payment of the following fees:

1. Salesperson's application license fee established by the Division of Professional Regulation pursuant to 29 Del. C. Section 8807(d)10(d) .

2. Processing fee established by the Division of Professional Regulation pursuant to 29 Del. C. Section 8810(d).

3. Guaranty Fund fee established pursuant to 24 Del. C. Sec. 2921(b).

III. REQUIREMENTS FOR OBTAINING A REAL ESTATE BROKER'S LICENSE

The Commission shall consider the application of any person for a broker's license upon completion of the following:

A. Course

1. The Commission shall consider the application of any person for a license after said applicant has successfully completed an accredited course.

2. Effective May 1, 1978, all courses shall be limited to thirty-five (35) students in each class.

BA . Experience

1. A salesperson must hold an active license be actively working in the real estate profession for five (5) continuous years immediately preceding application continuously before he or she can apply for a broker's license.

2. The applicant shall submit to the Commission a list of at least thirty (30) sales or other qualified transactions, showing dates, location, purchaser's name and seller's name. Transactions involving time-shares, leases, or property management are not qualified transactions for purposes of obtaining a real estate broker's license . These sales must have been made by the applicant within the previous five (5) years through the general brokerage business and not as a representative of a builder, developer, and/or subdivider. Transactions involving time-shares, leases, or property management are not qualified transactions for purposes of obtaining a real estate broker's license. The Commission reserves the right to waive any of the above requirements, upon evidence that the applicant possesses sufficient experience in the real estate business or demonstrates collateral experience to the Commission.

3. The list of thirty (30) sales or other qualified transactions and/or the variety of the licensee's experience must be approved by the Commission.

2. Effective May 1, 1978, all courses shall be limited to thirty-five (35) students in each class.

C. Examination

Within twelve (12) months of completing an accredited course, the applicant must submit a score report showing successful completion of the examination required by the Commission and submit all necessary documentation including the credit report required by Paragraph E of this rule to the Commission to be considered for licensure.

D. Ability to conduct business

1. The Commission reserves the right to reject an applicant based on his or her ability to transact real estate business in a competent manner or if it determines that the applicant lacks experience, a reputation for honesty, truthfulness and fair dealings.

2. The minimum age at which a person can be issued a broker's license is twenty-three (23).

E. Credit Report

Each applicant shall submit a credit report from an approved credit reporting agency, which report shall be made directly to the Commission.

F. Fees

The Commission shall not consider an application for a broker's license unless such application is submitted with evidence of payment of the following fees:

1. Broker's application license fee established by the Division of Professional Regulation pursuant to 29 Del. C. Sec. 880710(d) .

2. Processing fee established by the Division of Professional Regulation pursuant to 29 Del. C. Sec. 8810(d).

3. Guaranty Fund fee unless paid previously pursuant to 24 Del. C. Sec. 2921(b).

IV. RECIPROCAL LICENSES

A. Requirements

1. A non-resident of this State who is duly licensed as a broker in another state and who is actually engaged in the business of real estate in the other state may be issued a non-resident broker's license under 24 Del. C. Sec. 2909(a).

2. A non- resident salesperson who is duly licensed as a salesperson in another state and who is actually engaged in the business of real estate in the other state may be issued a non-resident salesperson's license provided such non-resident salesperson is employed by a broker holding a broker's license issued by the Commission.

3. The Commission, at its discretion, may issue a non-resident broker's or salesperson's license without the course and examination required by Rules II.B. or III.C. provided the non-resident broker or salesperson
passed an equivalent course and examination in his/her resident state and provided that such other state extends the same privilege to Delaware real estate licensees.

V. ESCROW ACCOUNTS

A. All moneys received by a broker as agent for his principal in a real estate transaction shall be deposited within three (3) banking days after a contract of sale or lease has been signed by both parties, in a separate escrow account so designated, and remain there until settlement or termination of the transaction at which time the broker shall make a full accounting thereof to his or her principal.

B. All moneys received by a salesperson in connection with a real estate transaction shall be immediately delivered to the appropriate broker.

C. A broker shall not co-mingle money or any other property entrusted to him with his money or property, except that a broker may maintain up to $100.00 of his/her own funds in a specific amount of his own funds from $25.00 to $100.00 in the escrow account to cover bank service charges and to maintain the minimum balance necessary to avoid the account being closed.

D. A broker shall maintain in his office a complete record of all moneys received or escrowed on real estate transactions, including the sources of the money, the date of receipt, depository, and date of deposit; and when a transaction has been completed, the final disposition of the moneys. The records shall clearly show the amount of the broker's personal funds in escrow at all times.

E. An escrow account must be opened by the broker in a Delaware bank with an office located in Delaware in order to receive, maintain or renew a valid license.

F. The Commission may summarily suspend (upon hearing) the license of any broker who fails to comply with Paragraph D, who fails to promptly account for any funds held in escrow, or who fails to produce all records, books, and accounts of such funds upon demand. The suspension may be immediate and shall continue until such time as the licensee appears for a hearing and furnishes evidence of compliance with the Rules and Regulations of the Commission.

G. Interest accruing on money held in escrow belongs to the owner of the funds unless otherwise stated in the contract of sale or lease.

VI. TRANSFER OF BROKER OR SALESPERSON

A. All licensees who transfer to another office, or brokers who open their own offices, but who were associated previously with another broker or company, must present a completed transfer form to the Commission signed by the individual broker or company with whom they were formerly associated, before the broker's or salesperson's license will be transferred. In addition all brokers who are non-resident licensees must also provide a current certificate of licensure.

C. All brokers of record who move the physical location of their office shall notify the Commission in writing at least 30 days, or as soon as practical, prior to such move by filing a new office application.

VII. DISCIPLINE OF A REAL ESTATE BROKER OR SALESPERSON

A. In such circumstances, when it becomes necessary to discipline a licensee, the Commission shall follow the procedures set forth in these Rules and Regulations and the Administrative Procedures Act under Title 29, Section 6401-6434.

VIII. REFUND OF FEES

No refund of fees shall be made to any applicant who fails to qualify for a license or who requests a change in status after a renewal has been issued.

IX. BUSINESS TRANSACTIONS AND PRACTICES

A. Written Listing Agreements

Listing Agreements for the rental, sale, lease or exchange ofr real property, whether exclusive, co-exclusive or open shall be in writing and shall be signed by the seller or owner.

B. Copy of agreements

Every party to a listing agreement, agreement of purchase and sale, or lease shall be furnished with an executed copy of such contract or contracts. It shall be the responsibility of the licensee to deliver an executed copy of the agreements to the principals within a reasonable length of time after execution.

C. Advertising

1. Any licensee who advertises, on signs, newspapers or any other media, property personally owned and/or property in which a licensee has any ownership interest, and said property is not listed with a broker, must include in the advertisement that he/she is the owner of said property and that he/she is a real estate licensee.

2. Any licensee who advertises in newspapers or any other media, property personally owned and/or property in which the licensee has any ownership interest, and said property is listed with a broker, must include in the advertisement the name of the broker under whom he/she is licensed, that he/she is the owner of said property, and that he/she is a real estate licensee. This subsection does not apply to signs.

3. Any licensee who advertises, by signs, newspaper, or any other media, any property for sale, lease, exchange, or transfer that is listed with a broker must include in the advertisement the name of the broker under whom the licensee he/she is licensed.

4. All advertisements for personal promotion of
licensees must include the name of the cC ompany under whom the licensee is licensed.

5. Size, dimension, proportion, and prominence of licensee's name and company's and/or broker's name referred to in paragraph 2, 3, and 4 of this subsection shall be subject to the Broker-of-Record approval.

D. Separate Office

1. Applicants for broker's licenses and those presently licensed must maintain separate offices in which to conduct the real estate business. Nothing contained herein, however, shall preclude said persons from sharing facilities with such other businesses as insurance, banking, or others that the Commission shall deem compatible.

2. Where the office is located in a private home, said office must have a separate entrance and must be approved by the Commission. The broker must place a permanent sign indicating the name under which the office is licensed, in a conspicuous location.

E. Compensation

1. Licensees shall not accept compensation from more than one party to a transaction, even if permitted by law, without timely disclosure to all parties to the transaction.

2. When acting as agent, a licensee shall not accept any commission, rebate, or profit on expenditures made for his principal-owner without the principal's knowledge and informed consent.

F. Duty to Cooperate

Brokers and salespersons shall cooperate with all other brokers and salespersons involved in a transaction except when cooperation is not in the client's best interest. The obligation to cooperate does not include the obligation to share commissions or to otherwise compensate another broker or salesperson.

X. RENEWAL OF LICENSES

A. Renewal Required by Expiration Date on License July 1

In order to qualify for license renewal as a real estate salesperson or broker in Delaware, a licensee shall have completed 15 hours of continuing education within the two year period immediately preceding the renewal. The broker of record for the licensee seeking renewal shall certify to the Commission, on a form supplied by the Commission, that the licensee has complied with the necessary continuing education requirements. This certification form shall be submitted by the licensee together with his/her renewal application and renewal fee. The broker of record shall retain for a period of one (1) year, the documents supporting his/her certification that the licensee has complied with the continuing education requirement. A licensee who has not paid the fees and/or met the requirements for the renewal of his or her license by the expiration date shown thereon July 1 , shall not list, sell, lease or negotiate for oth

B. Delinquency Fee

1. If a licensee fails to renew his or her license prior to the expiration date shown thereon July 1 , he or she shall be required to pay the full license fee and an additional delinquency fee (amount equal to one half of the yearly license fee) delinquency fee . If a licensee fails to renew his or her license within 60 days of the expiration date shown thereon before September 1 , the license shall be cancelled.

2. Failure to receive notice of renewal by a licensee shall not constitute a reason for reinstatement.

C. Reinstatement of License

1. A cancelled license shall be reinstated only after the licensee pays the necessary fees, including the delinquency fee, and passes any examinations required by the Commission. If the licensee fails to apply for renewal within 6 months of the cancellation date by March 1 of the next year , the licensee shall be required to take the state portion of the examination. to be reinstated. If the licensee fails to apply for renewal before the next renewal period commences (two years), the licensee shall be required to pass both the state and the national portions of the examination.

2. No person whose license has been revoked will be considered for the issuance of a new license for a period of at least two (2) years from the date of the revocation of the license. Such person shall then fulfill the following requirements: he or she shall attend and pass the real estate course for salespersons; take and pass the Commission's examination for salespersons; and any other criteria established by the Commission., including the submission of three (3) letters of character reference, stating that such individual is of good moral character. Nothing above shall be construed to allow anyone to take the course for the purpose of licensing until after the waiting period of two (2) years. Nothing contained herein shall require the Commission to issue a new license upon completion of the above mentioned requirements, as the Commission retains the right to deny any such application.

D. Certification of Continuing Education

The broker of record shall certify to the Commission, on a form supplied by the Commission, at the time of license renewal that all licensees in his/her office have complied with the necessary continuing education requirements. This certification form shall be submitted by the licensee together with their renewal application and fee. The broker of record shall retain for a period of one (1) year, the documents supporting his/her certification that the licensee has complied with the continuing education requirement.

XI. INACTIVE STATUS

Upon the payment of a fee established by the Division of Professional Regulation, the Commission may place any licensee on inactive status for a period not to exceed two
(2) years.

XII. AVAILABILITY OF RULES AND REGULATIONS

A. Fee Charge for Primers

Since licensees are required to conform to the Commission's Rules and Regulations and the Laws of the State of Delaware, these Rules and Regulations shall be made available to licensees without charge. However, in order to help defray the cost of printing, students in the real estate courses and other interested parties may shall be required to pay such fee as stipulated by the Division of Professional Regulation for the booklet or printed material. or such fee as stipulated by the Commission.

XIII. DISCLOSURE

A. A licensee who is the owner, the prospective purchaser, lessor or lessee or who has any personal interest in a transaction, must disclose his or her status as a licensee to ALL persons with whom he or she is transacting such business, prior previous to the execution of any agreements and shall include on the agreement such status. as a licensee on the agreement.

B. Buy-In-Disclosure

Any licensee advertising real estate for sale stating in such advertisement, "If we cannot sell your home, we will BUY your home", or words to that effect, shall disclose in the original listing contract at the time he or she obtains the signature on the listing contract, the price he will pay for the property if no sales contract is executed during the term of the listing. Said licensee shall have no more than sixty (60) days to purchase and settle for the subject property upon expiration of the original listing or any extension thereof.

C. A licensee who has direct contact with a potential purchaser or seller shall disclose in writing whom he/she represents in any real estate negotiation or transaction. The Such disclosure as to whom the licensee represents should shall be made at the 1st substantive contact to each party to the negotiation or transaction. In all cases such disclosure must be made whom licensee does not represent, but, in any event , prior to the presentation of an offer to purchase. A written confirmation of disclosure shall also be included in the contract for the real estate transaction.

The written confirmation of disclosure in the contract shall be worded as follows:

With respect to agent for seller: "This broker, any cooperating broker, and any salesperson working with either, are representing the seller's interest and have fiduciary responsibilities to the seller, but are obligated to treat all parties with honesty. The broker, any cooperating broker, and any salesperson working with either, without breaching the fiduciary responsibilities to the seller, may, among other services, provide a potential purchaser with information

With respect to agent for buyer: "This broker, and any salesperson working for this broker, is representing the buyer's interests and has fiduciary responsibilities to the buyer, but is obligated to treat all parties with honesty. The broker, and any salesperson working for the broker, without breaching the fiduciary responsibilities to the buyer, may, among other services, provide a seller with information about the transaction. The broker, and any salesperson working for the broker, also has the duty to respond accurately and honestly to a seller's questions and disclose material facts about the transaction, submit promptly all offers to purchase through proper procedures, and serve without unlawful discrimination."

In the case of a transaction involving a lease in excess of 120 days, substitute the term "lessor" for the term "seller", substitute the term "lessee" for the terms "buyer" and "purchaser", and substitute the term "lease" for "purchase" as they appear above.

D. If a property is the subject of an agreement of sale but being left on the market for backup offers, or is the subject of an agreement of sale which contains a right of first refusal clause, the existence of such agreement must be disclosed by the listing broker to any individual who makes an appointment to see such property at the time such appointment is made.

XIV. HEARINGS

A. When If a complaint is filed with the Commission against a licensee, the status of the broker of record in that office shall not cannot change. the status of his or her license until the pending case is settled .

B. There shall be a maximum of one (1) postponement for each side allowed on any hearing which has been scheduled by the Commission. If any of the parties are absent from a scheduled hearing, the Commission reserves the right to act based upon the evidence presented.

XV. INDUCEMENTS

A. Real Estate licensees cannot use commissions or income received from commissions as rebates or compensation paid to or given to NON-LICENSED PERSONS, partnerships or corporations as inducements to do or secure business, or as a finder's fee.

B. No licensee shall knowingly pay a commission, or other compensation to a licensed person knowing that licensee will in turn pay a portion or all of that which is re
ceived to a person who does not hold a real estate license.

XVI. NECESSITY OF LICENSE

A. For any property listed with a broker for sale, lease or exchange, only a licensee shall be permitted to host or staff an open house or otherwise show a listed property. That licensee may be assisted by non-licensed persons provided a licensee is on site. This subsection shall not prohibit a seller from showing their own house.

B. For new construction, subdivision, or development listed with a broker for sale, lease or exchange, a licensee shall always be on site when the site is open to the general public, except where a builder and/or developer has hired a non-licensed person who is under the direct supervision of said builder and/or developer for the purpose of staffing said project.

Add New Rule # OUT OF STATE LAND SALES APPLICATIONS

A. All applications for registration of an out of state land sale must include the following:

1. A completed license application on the form provided by the Commission.

2. A $100 filing fee made payable to the State of Delaware.

3. A valid Business License issued by the State of Delaware, Division of Revenue.

4. A signed Appointment and Agreement designating the Delaware Secretary of State as the applicant's registered agent for service of process. The form of Appointment and Agreement shall be provided by the Commission. In the case of an applicant which is a Delaware corporation, the Commission may, in lieu of the foregoing Appointment and Agreement, accept a current certificate of good standing from the Delaware Secretary of State and a letter identifying the applicant's registered agent in the State of Delaware.

5. The name and address of the applicant's resident broker in Delaware and a completed Consent of Broker form provided by the Commission. Designation of a resident broker is required for all registrations regardless of whether sales will occur in Delaware.

6. A bond on the form provided by the Commission in an amount equal to ten (10) times the amount of the required deposit.

7. Copies of any agreements or contracts to be utilized in transactions completed pursuant to the registration.

B. Each registration of an out of state land sale must be renewed on an annual basis. Each application for renewal must include the items identified in sub-sections 2 through 4 of Section A above and a statement indicating whether there are any material changes to information provided in the initial registration. Material changes may

C. If, subsequent to the approval of an out of state land sales registration, the applicant adds any new lots or units or the like to the development, then the applicant must, within thirty days, amend its registration to include this material change. A new registration statement is not required, and the amount of the bond will remain the same.

Summary of Changes to the Rules and Regulations

I.C.3. - reworded to include "civil penalty" in the list of possible disciplinary actions which may be taken by the Commission and to clarify that brokers as well as salespersons may be held responsible for violations by a salesperson.

II. - non substantive revision to clarify the application process for the salesperson and to update reference to the statute in II.D.1.

III. - non substantive revision to clarify the application process for the broker and to update reference to the statute in III.F.1.

V.C. - revised to clarify the language regarding the amount of the broker's own funds which may be maintained in the escrow account to $ 100 maximum in order to avoid the account being closed

V.E. - previous wording required that broker open an escrow account in a "Delaware bank" now states "a bank with an office in Delaware"

V.F. - reword for clarity

VI.A. - revised to include the requirement that a current certificate of licensure be provided by all nonresident brokers who are transferring a license.

VI.C. - Added to require that a broker moving an office report the move to the Commission in writing by filing a new office application 30 days prior to opening the new office.

VII. was struck in its entirety.

VIII. was struck in its entirety.

IX.A. - Non substantive correction to "Listing Agreements for the rental, sale, lease or exchange of real property,
whether exclusive, co-exclusive or open shall be in writing and shall be signed by the seller or owner."

IX.B. - Non Substantive correction adding the word "the" to the last sentence which now reads: "It shall be the responsibility of the licensee to deliver an executed copy of the agreements to the principals within a reasonable length of time after execution."

IX.C.3. - Non Substantive correction, was revised to replace "he/she" with "the licensee".

IX.C.4. - Non Substantive revision to replace the capital "C" in "Company" with a lower case "c" and to add the word "the" for readability as follows: "All advertisements for personal promotion of licensees must include the name of the company under whom the licensee is licensed.

IX.C.5 was struck in its entirety.

IX.D.2. - revised by adding the word "permanent" to enforce the requirement of the statute regarding office signs in private home offices: "Where the office is located in a private home, said office must have a separate entrance and must be approved by the Commission. The broker must place a permanent sign indicating the name under which the office is licensed, in a conspicious location."

Add New Rule IX.E. - Clarifies the need for the licensee to disclose to all parties any compensation from more than one party to a transaction that the licensee intends to accept, and prohibits the licensee from accepting any commission, rebate or profit on expenditures made for his principal-owner without the principal's knowledge and informed consent.

Add New Rule IX.F. - Identifies the need for licensees to cooperate with other licensees involved in a transaction except when such cooperation is not in the best interest of a client. Further this obligation does not imply any obligation to share commissions or otherwise compensate another licensee.

X.A. - revised to include credit certification procedure for renewal, add 15 hours as the number of required continuing education credits for the license renewal, and to accomodate change of expiration date.

X.B.1. - Revised to accommodate a change of expiration date and to clarify the late fee payment process

X.C.1. - Revised for readibility and to accommodate a change of expiration date.

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

X.D. - Rewritten into Rule X.A.

XI. - Deleted in its entirety.

XII.A. - Reword to clarify that the Division of Professional Regulation sets fee for Primer.

XIII.A. - Revised for readibility.

XIII.C. - was revised for clarity.

XIV.A. - was revised for clarity.

XV. - Add language to prohibit payment of commission by a licensee to another licensed person with the knowledge that all or a portion of the payment will in turn be paid out or given to an unlicensed person.

XVI. - Non substantive change

XVI.B. - Non substantive change

Add New Rule Regarding Out of State Land Sales Applications - Outlines requirements for initial applications and subsequent addition of units, lots, etc.

Renumber all Rules and Subsections as necessary.

Department of Administrative Services

Division of Professional Regulation

Delaware Board of Medical Practice

Respiratory Care Practice

Adivsory Council

Statutory Authority: 24 Delaware Code,

Section 1770B(c)(5) (24 Del.C. 1770B(c)(5))

BEFORE THE RESPIRATORY CARE PRACTICE ADVISORY COUNCIL OF THE DELAWARE BOARD OF MEDICAL PRACTICE

IN THE MATTER OF THE

ADOPTION OF RULES | RESPIRATORY CARE

AND REGULATIONS TO | PRACTICE ADVISORY

REGULATE THE | COUNCIL

PRACTICE OF | REGULATION

RESPIRATORY CARE | DOCKET NUMBER 1

PLEASE TAKE NOTICE that the Respiratory Care Practice Advisory Council to the Delaware Board of Medical Practice, pursuant to the authority of Title 24, Delaware Code, § 1770B(c)(5), has developed and proposes to promulgate Rules and Regulations governing all aspects of the practice of Respiratory Care by licensed respiratory care practitioners in the State of Delaware.

A public hearing will be held on the proposed Rules and Regulations on Thursday, March 5, 1998, at 2:30 p.m., at the Cannon Building, 861 Silver Lake Boulevard, conference room B, Dover, Delaware, 19901. The Council will receive and consider input in writing from interested persons on the proposed new Rules and Regulations. Final date to submit written comments shall be at the above scheduled public hearing. Anyone wishing to obtain a copy of the proposed Rules and Regulations or to make comments at the public hearing should notify Rosey Vanderhoogt at the above address or by calling (302) 739-4522 extension 203.

This notice will be published in two newspapers of general circulation not less than twenty (20) days prior to the date of the hearing.

PROPOSED RULES AND REGULATIONS FOR THE PRACTICE OF RESPIRATORY CARE

Proposed by the Respiratory Care Practice Advisory Council of the Delaware Board of Medical Practice

TABLE OF CONTENTS

SECTION 1 DEFINITIONS 1

SECTION 2 PURPOSE 1

SECTION 3 STANDARDS OF PRACTICE

FOR THE RESPIRATORY PRACTITIONER 2

SECTION 4 STANDARDS RELATED

TO THE RESPIRATORY CARE

PRACTITIONER'S COMPETENCE

AND RESPONSIBILITIES 2

SECTION 5 ADMINISTRATION OF

MEDICATIONS 3

SECTION 6 DISCIPLINARY PROCEEDINGS 4

SECTION 7 WORKING STUDENT

RESPIRATORY CARE PRACTITIONER 6

SECTION 8 CONTINUING EDUCATION 7

8.1 Contact hours required for renewal 7

8.2 Exemptions 7

8.3 Criteria for Qualification of

Continuing Education 8

8.3.1 Definition of Contact Hours 8

8.3.2 Learner Objectives 8

8.3.3 Subject Matter 8

8.3.4 Description 9

8.3.5 Types of Activities/Programs 9

8.4 Educational Providers 10

8.5 Accumulation of Continuing Education 10

8.6 Review/Approval of Continuing

Education Contact Hours 11

SECTION 9 RENEWAL OF LICENSE 11

SECTION 10 APPLICATION FOR A LICENSE 12

* Please note that the above page numbers refer to the original document, not to pages in the Register.

STANDARDS OF RESPIRATORY CARE PRACTICE

SECTION 1: DEFINITIONS

1.1 "Board" - means Delaware Board of Medical Practice.

1.2 "Certified Respiratory Therapy Technician (CRTT)" - means the credential awarded by the NBRC to individuals who pass the certification examination for entry level respiratory therapy practitioners.

1.3 "Council" - means the Respiratory Care Practice Advisory Council of the Board of Medical Practice.

1.4 "NBRC" means the National Board for Respiratory Care, Inc.

1.5 "Programs Approved by the Board" - means programs accredited by the Joint Review Committee for Respiratory Therapy Education (JRCRTE) or its successor organization which have been approved by the Board.

1.6 "Registered Respiratory Therapist (RRT)" - means the credential awarded by the NBRC to individuals who pass the registry examination for advanced respiratory therapy practitioners.

1.7 "Respiratory Care" - means treatment, management, diagnostic testing, control and care of patients with deficiencies and abnormalities associated with the cardiopulmonary system under the direction of a physician. Respiratory care includes inhalation therapy and respiratory therapy under Title 24, Delaware Code, Chapter 17. Medical Practices Act, § 1770B(a)(2).

1.8 "Respiratory Care Practitioner (RCP)" - means an individual who practices respiratory care under Title 24, Delaware Code, Chapter 17. Medical Practices Act, § 1770B(a)(1) and (7).

1.9 "Student Respiratory Care Practitioner (Student-RCP)" - means an individual enrolled in an accredited Respiratory Care Program recognized and approved by
the Board.

1.10 "Working Student Respiratory Care Practitioner" - means a student respiratory care practitioner who is employed to perform respiratory care under a limited scope of practice established by the Board.

1.11 "General Supervision" - means whether by direct observation and monitoring, protocols approved by physicians, or orders written or verbally given by physicians.

1.12 "Direct Supervision" - means supervising licensee or supervising physician will be present and immediately available within the treatment area.

SECTION 2: PURPOSE

2.1 The purpose of the standards is to establish minimal acceptable levels of safe practice to protect the general public and to serve as a guide for the Board to evaluate safe and effective practice of respiratory care.

SECTION 3: STANDARDS OF PRACTICE FOR THE RESPIRATORY CARE PRACTITIONER

3.1:a. The respiratory care practitioner shall conduct and document respiratory care assessments of individuals and groups by various appropriate means including but not limited to the following:

1. Collecting objective and subjective data from observations, examinations, physiologic tests, interviews and written records in an accurate and timely manner. 2. Sorting, selecting, reporting, and recording the data.

3. Analyzing data.

4. Validating, refining and modifying the data by using available resources including interactions with the patient, family, and health team members.

5. Evaluating data.

6. Respiratory care practitioners shall establish and document data that serves as the basis for the strategy of care.

3.1:b. Respiratory care practitioners may develop strategies of care such as a treatment plan.

3.1:c. Respiratory care practitioners may participate under the direction and supervision of a physician in the implementation of patient care.

SECTION 4: STANDARDS RELATED TO THE RESPIRATORY CARE PRACTITIONER'S COMPETENCE AND RESPONSIBILITIES

a. Have knowledge of the statutes and regulations governing the practice of respiratory care.

b. Accept responsibility for competent practice of respiratory care.

c. Obtain instructions and supervision from physicians.

d. Function as a member of a health care team by collaborating with other members of the team to provide appropriate care.

e. Consult with respiratory care practitioners and others and seek guidance as necessary.

f. Obtain instruction and supervision as necessary when implementing respiratory care techniques.

g. Contribute to the formulation, interpretation, implementation and evaluation of objectives and policies related to the practice of respiratory care within the

employment setting.

h. Report unsafe respiratory care practice and conditions to the Respiratory Care

Practice Advisory Council, (Council), or other authorities as appropriate.

i. Practice without unlawful discrimination as to age, race, religion, sex, national

origin or disability.

j. Respect the dignity and rights of patients regardless of social or economic status,

personal attributes or nature of health problems.

k. Respect patients' right-to-privacy by protecting confidentiality unless obligated

by law to disclose the information.

l. Respect the property of patients and their families.

m. Teach safe respiratory care practice to other health care workers as appropriate.

SECTION 5: ADMINISTRATION OF MEDICATIONS

5.1 Respiratory care practitioners may administer pharmacological agents, aerosols, or medical gases via the respiratory route. Administration of medication by routes other than the respiratory route require the direct supervision of a physician.

5.2 A respiratory care practitioner shall not deliver any medication unless the order, written or oral by a physician or other person authorized by the Board of Medical Practice, to prescribe that class of medication includes:

a. Patient identification

b. Date of the order

c. Time of the order

d. Name of medication

e. Dosage

f. Frequency of administration

g. Route of administration

h. Method of administration

No respiratory care practitioner holding a permit or a license in the state of Delaware may administer medications for the testing or treatment of cardiopulmonary impairment for which the respiratory care provider is untrained or incompetent.

5.3 Respiratory care practitioners must be able to document appropriate training and proficiency on the route of medication delivery, drug pharmacology, and dosage calculations for any cardiopulmonary medications for which they are responsible to administer. Appropriate training includes but is not limited to the following components:

a. Pharmacology. Subject matter shall include terminology, drug standards, applicable laws and legal aspects, identification of drugs by name and classification, and the principles of pharmacodynamics of medications used in the treatment and testing of cardiopulmonary impairment.

b. Techniques of drug administration. Subject matter shall include principles of asepsis, safety and accuracy in drug administration, applicable anatomy and physiology, and techniques of administration and any route of administration for cardiopulmonary medications that fall within the legal scope of practice of a respiratory care practitioner.

c. Dosage calculations. Subject matter shall include a review of arithmetic and methods of calculation required in the administration of drug dosages.

d. Clinical experience. Subject matter shall include clinical experience in administration of the cardiopulmonary medication(s), planned under the direction of a qualified respiratory care practitioner or other qualified health care provider responsible for teaching cardiopulmonary medication administration.

e. Role of the respiratory care practitioner in administration of cardio-pulmonary medications. Subject matter shall include constraints of medication administration under the legal scope of practice for respiratory care practitioners, the rationale for specific respiratory care in relation to drug administration; observations and actions associated with desired drug effects, side effects and toxic effects; communication between respiratory care practitioners and other health care teams; respiratory care practitioner - client interactions; and the documentation of cardiopulmonary medication administration.

5.4 Each respiratory care practitioner shall maintain a record that documents training and proficiency and medications that each practitioner is authorized to

5.5 Documentation of medication administration by the respiratory care practitioner shall include at a minimum:

a. Patient identification

b. Date of the order

c. Time of the order

d. Name of medication

e. Dosage

f. Frequency of administration

g. Route of administration

h. Method of administration

i. Respiratory care practitioner's name

j. Date and time of administration

k. Documentation of effectiveness

l. Documentation of adverse reactions and notifications if any

SECTION 6: DISCIPLINARY PROCEEDINGS

6.1:a. The license or permit of a respiratory care practitioner or student found to have committed unprofessional conduct may be subject to revocation, suspension, or non-renewal. The practitioner or student may be placed on probation subject to reasonable terms and conditions, or reprimanded.

6.1:b. Any licensed respiratory care practitioner found, after notice and hearing, to have engaged in behavior in his or her professional activity which is likely to endanger the public health, safety or welfare or who is unable to render respiratory care services with reasonable skill or safety to patients because of mental illness or mental incompetence, physical illness or excessive use of drugs including alcohol may have his or her license revoked, suspended, not renewed or may be placed on probation.

6.2 Unprofessional Conduct

Unprofessional conduct includes any act of fraud, deceit, incompetence, negligence, or dishonesty and shall include, without limitation, the following:

a. Performing acts beyond the scope of authorized practice by a respiratory care practitioner to include violations of Title 24, Delaware Code, § 1770B or of these regulations.

b. Assuming duties and responsibilities within the practice of respiratory care without adequate preparation or supervision or when competency has not been maintained.

c. Performing new respiratory care techniques and/or procedures without adequate education and practice or without proper supervision.

d. Failing to take appropriate action or follow
policies and procedures in to practice situation designed to safeguard the patient from incompetent, unethical or illegal health care practices.

e. Inaccurately recording on, falsifying or altering a patient or agency record.

f. Committing verbal, physical or sexual abuse or harassment of patients or co- employees.

g. Assigning unqualified persons to perform the practice of licensed respiratory care practitioners.

h. Delegating respiratory care responsibilities to unqualified persons.

i. Failing to supervise persons to whom respiratory care responsibilities have been properly delegated.

j. Leaving a patient assignment in circumstances which endangers the patient except in documented emergency situations.

k. Failing to safeguard a patient's dignity and right to privacy in providing respiratory care services which shall be provided without regard to race, color, creed or status.

l. Violating the confidentiality of information concerning a patient except where disclosure is required by law.

m. Practicing respiratory care when unfit to perform procedures and make decisions when physically, psychologically, or mentally impaired.

n. Diverting drugs, supplies, or property of a patient or agency or attempting to do so.

o. Diverting, possessing, obtaining, supplying or administering prescription drugs to any person, including self, except as directed by a person authorized by law to prescribe drugs or attempting to do so.

p. Providing respiratory care in this state without a currently valid license or permit and without other lawful authority to do so.

q. Allowing another person to use his/her license or temporary permit to provide respiratory care for any purpose.

r. Aiding, abetting and/or assisting an individual to violate or circumvent any law or duly promulgated rule or regulation intended to guide the conduct of a respiratory care practitioner or other health care provider.

s. Resorting to, or aiding in any fraud, misrepresentation or deceit directly or indirectly in connection with acquiring or maintaining a license to practice respiratory care.

t. Failing to report unprofessional conduct by another respiratory care practitioner licensee or permit holder or as specified in 4.1:h.

u. Failing to provide respiratory care to a patient in accordance with the orders of the responsible physician without just cause.

6.3 Disciplinary Investigations And Hearings

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

6.3:b. Where feasible, within sixty (60) days of receiving a complaint from the Attorney General's Office after an investigation pursuant to Title 29, Delaware Code. § 8807(h), the Council shall conduct an evidentiary hearing upon notice to the licensee. Written findings of fact and conclusions of law shall be sent to the Board of Medical Practice along with any recommendation to revoke, to suspend, to refuse to renew a license, to place a licensee on probation, or to otherwise reprimand a licensee found guilty of unprofessional conduct in the licensee's professional activity which is likely to endanger the public health, safety or welfare, or the inability to render respiratory care services with reasonable skill or safety to patients because of mental illness or mental incompetence, physical illness or excessive use of drugs including alcohol.

SECTION 7: WORKING STUDENT RESPIRATORY CARE PRACTITIONER

7.1 A working student respiratory care practitioner may only practice under the direct supervision of a licensed respiratory care practitioner. The scope of practice is limited to those activities for which there is documented evidence of competency.

7.2 Direct supervision means that a licensed respiratory care practitioner will be personally present and immediately available within the treatment area to provide aid, direction, and instruction when procedures are performed. All evaluations, progress notes, and/or chart entries must be co-signed by a licensed respiratory care practitioner.

7.3 A student may apply for a student temporary permit. If approved by the Board, such permit may be issued by the Division of Professional Regulation and may not be renewed. An application will be considered by the Council provided that the applicant meets the following criteria:

a. Applicant is matriculated in an approved Respiratory Care Program.

b. Application is submitted no more than 20 weeks prior to the program's announced graduation date.

c. Applicant shall submit to the Council a certified list of respiratory care services

which have been successfully completed as a part of the respiratory care curriculum.

7.4 A student temporary permit shall automatically cease upon graduation or on the date that the holder is no longer matriculated in and not a graduate of a Respiratory Care Program. Any holder of a temporary student permit which ceases for any of the reasons stated above shall within five (5) working days surrender the permit to the Division of Professional Regulation.

7.5 Subject to Rule 7.4, a student temporary permit shall be valid for 16 weeks.

7.6 Respiratory care services which may be performed by the holder of a student temporary permit are limited to only those services which have been successfully completed by the student as part of a respiratory care program. Successful completion of these services must be certified by the program director on the Verification of Respiratory Care Education Form and submitted to the Council along with an attached competency check list. The holder of the student temporary permit must also meet the employer's standards for those procedures in specified patient care situations.

SECTION 8: CONTINUING EDUCATION

8.1 Contact Hours Required for Renewal

8.1:a. The respiratory care practitioner shall be required to complete (20) twenty contact hours biennially and to retain all certificates and other documented evidence of participation in an approved/accredited continuing education program for a period of at least (3) three years. Upon request, such documentation shall be made available to the Council for random audit and verification purposes. All contact hours must be completed at least sixty (60) days prior to the end of the renewal year.

8.1:b. Contact hours shall be prorated for new licensees in accordance with the following schedule:

Two years remaining in the licensing

cycle requires - 20 hours

One year remaining in the licensing

cycle requires - 10 hours

Less than one year remaining in the

licensing cycle - exempt

8.2 Exemptions

8.2:a. A licensee who because of a physical or mental illness during the license period could not complete the

8.2:b. A request for a waiver must be submitted sixty (60) days prior to the license renewal date.

8.3 Criteria for Qualification of Continuing Education Program Offerings

The following criteria are given to guide respiratory care practitioners in selecting an appropriate activity/program and to guide the provider in planning and implementing continuing education activities/programs. The overriding consideration in determining whether a specific activity/program qualifies as acceptable continuing education shall be that it is a planned program of learning which contributes directly to the professional competence of the respiratory care practitioner.

8.3.1 Definition of Contact Hours

8.3.1:a. Fifty consecutive minutes of academic course work, correspondence course, or seminar/workshop shall be equivalent to one (1) contact hour. A fraction of a contact hour may be computed by dividing the minutes of an activity by 50 and expressed as a decimal.

8.3.1:b. Recredentialing examination for certified espiratory therapy technician, (CRTT), and registered respiratory therapist, (RRT), shall be equivalent to five (5) contact hours.

8.3.1:c. Successful completion of advanced specialty exams administered by the

National Board for Respiratory Care, (NBRC), shall be equal to five (5) contact hours for each exam.

8.3.1:d. One (1) semester hour shall be equal to fifteen (15) contact hours.

8.3.1:e. One (1) quarter hour shall be equal to ten (10) contact hours.

8.3.1:f. Two (2) hours (120 minutes) of clinical educational experience shall be

equal to one (1) contact hour.

8.3.1:g. Fifty (50) consecutive minutes of presentation of lectures, seminars or

workshops in respiratory care or health care subjects shall be equivalent to one (1) contact hour.

8.3.1:h. Preparing original lectures, seminars, or workshops in respiratory care or health care subjects shall be granted no more than two (2) contact hours for each contact hour of presentation.

8.3.1:i. Performing clinical or laboratory research in health care shall be reviewed

and may be granted an appropriate number of contact hour(s) at the Council's discretion.

8.3.2 Learner Objectives

8.3.2:a. Objectives shall be written and be the basis for determining

content, learning experience, teaching methodologies, and evaluation.

8.3.2:b. Objectives shall be specific, attainable, measurable, and describe expected outcomes for the learner.

8.3.3 Subject Matter

Appropriate subject matter for continuing education shall include the following:

8.3.3:a. Respiratory care science and practice and other scientific topics

related thereto

8.3.3:b. Respiratory care education

8.3.3:c. Research in respiratory care and health care

8.3.3:d. Management, administration and supervision in health care delivery

8.3.3:e. Social, economic, political, legal aspects of health care

8.3.3:f. Teaching health care and consumer health education

8.3.3:g. Professional requirements for a formal respiratory care program or a related field beyond those that were completed for the issuance of the original license

8.3.4 Description

Subject matter shall be described in outline form and shall include learner objectives, content, time allotment, teaching methods, faculty, and evaluation format.

8.3.5 Types of Activities/Programs

8.3.5:a. An academic course shall be an activity that is approved and presented by an accredited post-secondary educational institution which carries academic credit. The course may be within the framework of a curriculum that leads to an academic degree in respiratory care beyond that required for the original license, or relevant to respiratory care, or any course that shall be necessary to a respiratory care practitioner's professional growth and development.

8.3.5:b. A correspondence course contains the following elements:

1. developed by a professional group, such s an education corporation or professional association.

2. follows a logical sequence.

3. involves the learner by requiring active response to module materials and provides feedback.

4. contains a test to indicate progress and to verify completion of module.

5. supplies a bibliography for continued study.

8.3.5:c. A workshop contains the following elements:

1. developed by a knowledgeable individual or

2. follows a logical sequence.

3. involves the learner by requiring active response, demonstration and feedback.

4. requires hands-on experience.

5. supplies a bibliography for continued study.

8.3.5:d. Advanced and specialty examinations offered by the NBRC or other examinations as approved by the Council including:

1. Recredential exam.

2. Pediatric/perinatal specialty exam.

3. Pulmonary function credentialing exams

4. Advanced practitioner exam

8.3.5:e. Course preparation

8.3.5:f. Clinical education experience must be:

1. Planned and supervised.

2. Extended beyond the basic level of preparation of the individual who is licensed.

3. Based on a planned program of study.

4. Instructed and supervised by individual(s) who possess the appropriate credentials related to the discipline being taught.

5. Conducted in a clinical setting.

8.4 Educational Providers

8.4:a. Continuing education contact hours awarded for activities/programs approved by the following are appropriate for fulfilling the continuing education requirements pursuant to these regulations:

1. American Association for Respiratory Care.

2. American Medical Association under Physician Category I.

3. American Thoracic Society

4. American Association of Cardiovascular and Pulmonary Rehabilitation

5. American Heart Association

6. American Nurses Association

7. American College of Chest Physicians 8. American Society of Anesthesiologists 9. American Sleep Disorders Association

10. Other professional or educational organizations as approved periodically by the Council.

8.5 Accumulation of Continuing Education

8.5:a. When a licensee applies for license renewal, a minimum of twenty (20) contact hours in activities that update skills and knowledge levels in respiratory care theory, practice and science is required. The total of twenty (20) contact hours biennially shall include the following categories:

8.5:a.1. A minimum of 12 contact hours of required continuing education contact hours required for renewal must be acquired in a field related to the science and practice of respiratory care as set forth in Subsection 8.3.3, Subject Matter, a, b, or c.

8.5:a.2. The remaining 8 contact hours of the required
continuing education contact hours required for renewal may be selected from Subsection 8.3.3, Subject Matter.

8.5:b. Contact hours, accumulated through preparation for, presentation of, or participation in activities/programs as defined are limited to application in meeting the required number of contact hours a year as follows:

1. Presentation of respiratory care education programs, including preparation time, to a maximum of four contact hours.

2. Presentation of a new respiratory care curriculum, including preparation, to a respiratory care education program, to a maximum of four contact hours.

3. Preparation and publication of respiratory care theory, practice or science, to a maximum of four contact hours.

4. Research projects in health care, respiratory care theory, practice or science, to a maximum of four contact hours.

5. Infection control programs from facility or agency to a maximum of one

contact hour.

6. Correspondence courses that are not within the curriculum that leads to an academic degree beyond that required for the original license to a maximum of four contact hours.

7. Presentation or participation in review or recertification in American Heart Association or Red Cross provider or instructor programs, such as Advanced Cardiac Life Support, Basic Life Support, Pediatric Advanced Life Support, or CPR, to a maximum of two contact hours per program.

8. Academic course work, related to health care or health care administration, to a maximum of four contact hours.

8.6 Review/Approval of Continuing Education Contact Hours

8.6:a. The Council may review the documentation of any respiratory care practitioner's continuing education.

8.6:b. The Council may determine whether the activity/program documentation submitted meets all criteria for continuing education as specified in these regulations.

8.6:c. Any continuing education not meeting all provisions of these rules shall be rejected in part or in whole by the Council.

8.6:d. Any incomplete or inaccurate documentation of continuing education may be rejected in part or in whole by the Council.

8.6:e. Any continuing education that is rejected must be replaced by acceptable continuing education within a reasonable period of time established by the Council. This continuing education will not be counted

8.6:f. Each license not renewed in accordance with this section shall expire, but may within a period of three years thereafter be reinstated upon payment of all fees as set by the Division of Professional Regulation of the State of Delaware.

8.6:g. An applicant wishing to reinstate an expired license shall provide documentation establishing completion of the required 20 hours of continuing education during the two-year period preceding the application for renewal.

SECTION 9. RENEWAL OF LICENSE

9.1:a To renew a license to practice respiratory care, a licensee must complete a renewal form provided by the Division of Professional Regulation certifying completion of continuing education.

9.2:b Renewal notices will be mailed by the Division of Professional Regulation sixty (60) days prior to the expiration of the license.

SECTION 10. APPLICATION FOR A LICENSE

10.1 Application

10.1:a An application for a license to practice respiratory care must be completed on a form provided by the Board of Medical Practice and returned to the Board Office with the required, non-refundable fee.

10.2 Completed Application

10.2:a An application for a license to practice respiratory care shall be considered completed when the Board has received the following documentation:

a. Non-refundable application fee

b. Completed application for licensure

c. Verification of education form

d. Verification of national examination score

e. Letter(s) of good standing from other states where the applicant may hold a license, if applicable.

f. Any other information requested in the application.

10.3 Appeals Process

10.3:a When the Council determines that an applicant does not meet the qualifications for licensure as prescribed under Title 24, Delaware Code, § 1770B and the Rules and Regulations governing the practice of respiratory care, the Council shall make such recommendation to the Board proposing to deny the application. The Council shall notify the applicant of its intended action and reasons thereof. The Council shall inform the applicant of an appeals process prescribed under Title 29, Delaware Code, § 10131.

Department of Education

Statutory Authority: 14 Delaware Code,

Section 122(d) (14 Del.C. §122(d))

EDUCATIONAL IMPACT ANALYSIS PURSUANT

TO 14 DEL. C., SECTION 122(d)

SMOKING REGULATIONS

A. TYPE OF REGULATORY ACTION REQUESTED

Reauthorization of Existing Regulation

B. SYNOPSIS OF SUBJECT MATTER OF REGULATION

The Smoking Regulation found in the Handbook for K-12 Education section I.M.11., page A-53 was made a regulation in 1987. It forbids the use, dispensing and sale of tobacco products by students K-12 during school hours in school buildings, on school grounds or on school buses. This regulation did away with "smoking courts" in high schools and generally put students on notice that smoking in or around schools was totally forbidden. Since this state regulation was passed a federal law entitled the Pro-Children Act of 1994, has also been enacted which says "no person shall permit smoking within any indoor facility owned or leased or contracted for and utilized by such person for provision of routine or regular kindergarten, elementary or secondary education or library services to children." Children are defined as "individuals who have not attained the age of 18." This law applies to agencies and organizations that receive federal funds and it covers public schools and numerous other agencies serving children. This federal law effects adult behavior concerning smoking which the state regulation did not address. The federal law does not mention tobacco products such as snuff and chewing tobacco and does not cover the school grounds and the school buses which are both part of the Department of Education regulation. The regulation is recommended for readoption because in concert with the federal statute, most aspects of the problem are covered and the important emphasis on student behavior is sustained.

C. IMPACT CRITERIA

1. Will the regulation help improve student achievement as measured against state achievement standards?

This regulation addresses health and safety, not curriculum issues.

2. Will the regulation help ensure that all students

This regulation addresses health and safety issues, not equity.

3. Will the regulation help to ensure that all students' health and safety are adequately protected?

This regulation will at least protect students from tobacco and its ill effects while they are in school or on school grounds.

4. Will the regulation help to ensure that all students' legal rights are respected?

This regulation does have the aspect of protecting non smoking students from the ill effects of smoking by fellow students.

5. Will the regulation preserve the necessary authority and flexibility of decision makers at the local board and school level?

Readopting this regulation will not change the necessary authority and flexibility of decision makers at the local board and school level.

6. Will the regulation place unnecessary reporting or administrative requirements or mandates upon decision makers at the local board and school levels?

This regulation does not add any unnecessary reporting or administrative requirements for decision makers at the local board and school level.

7. Will decision making authority and accountability for addressing the subject to be regulated be placed in the same entity?

The readopted regulation still gives local decision making authority through the development of a local policy.

8. Will the regulation be consistent with and not an impediment to the implementation of other state educational policies, in particular to state educational policies addressing achievement in the core academic subjects of mathematics, science, language arts and social studies?

This regulation addresses health and safety issues and will not be an impediment to any policies in the curriculum area.

9. Is there a less burdensome method for addressing the purpose of the regulation?

The regulation has been in place and readoption of the regulation is the most effective way to continue to address this concern.

10. What is the cost to the state and local school
boards of compliance with the regulation?

The regulation had been in place for ten years and readoption will not generate any new costs to the school districts.

I.M.11. SMOKING REGULATIONS

Each school district in Delaware is required to have a policy which, at a minimum, prohibits smoking and the use, dispensing or selling of tobacco products such as snuff and chewing tobacco by students in kindergarten through grade 12 during school hours in school buildings, on school grounds, or on school buses.

The above regulatory change will be presented to the State Board of Education at its meeting on February 19, 1998

Department of Education

Statutory Authority: 14 Delaware Code,

Section 122(d) (14 Del.C. §122(d))

The following three (3) regulations are proposed to be repealed by the Department of Education.

The Handbook for K-12 Education contains a section entitled Fire and Emergency Preparedness, I.M.12, page A-54. This regulation should be repealed because the first part of the regulation beginning with the word "All", through the word "session", is from Del. C., Section 4104. The second part beginning with the word "During", and ending with the word "Year", is from the State Fire Prevention Regulations, Part V, Section 1-3, Fire Drills in Educational and Institutional Occupancies. Since this section is simply a restating of the Delaware Code and from another regulation, this does not need to be regulated again by the Department, and thus should be repealed as a regulation of the Department of Education.

I.M.12. FIRE AND EMERGENCY PREPAREDNESS

a. All Delaware schools are subject to Delaware Code and to State Fire Prevention Regulations which require that every school be equipped with an adequate number of fire extinguishers and shall hold a fire drill at least once every month while the school is in session. (14 Del. C. ¤4109) Fire drills shall include complete

The Handbook for K-12 Education contains a section entitled Title I Complaint Process, Section I.F.2., pages A-15 and A-16. This regulation needs to be repealed as a Department of Education regulation because the requirement for the process and the procedures for filing the complaint are all part of existing federal regulations.

I.F.2. TITLE I COMPLAINT PROCEDURES

a. An organization or an individual may file a written, signed complaint with the Title I Office of the Delaware Department of Public Instruction (Title I Office) concerning an alleged violation by a Local Education Agency (LEA) or the State Education Agency (SEA) of a Federal statute or regulations that apply to the Title I LEA Program, in accordance with 200.73-75 of the Title I regulations and the following procedures:

(1) The complaint must include (a) a statement that the SEA or an LEA has violated a requirement of a Federal statute or regulations that apply to the Title I LEA Program; and (b) the facts on which the statement is based.

(2) The Title I Office shall resolve the complaint and issue a written report including findings of fact and a decision to the parties included in the complaint within sixty calendar days of the receipt of the complaint. An extension of the time limit may be made by the Title I Office only if exceptional circumstances exist with respect to a particular complaint.

(3) The Title I Office may conduct an independent on-site investigation of a complaint, if it determines that an on-site investigation is necessary.

b. An organization or an individual may file a written, signed complaint with the LEA, in lieu of the Title I Office, concerning an alleged violation by the LEA of a Federal statute or regulations that apply to the Title I LEA Program.

(1) The complaint must include (a) a statement that the LEA has violated a requirement of a Federal statute or regulations that apply to the Title I LEA
Program and (b) the facts on which the statement is based.

(2) The superintendent or the agency head of the LEA shall resolve the complaint and issue a written report including findings of fact and a decision to the parties involved in the complaint within thirty calendar days of the receipt of the complaint.

(3) An appeal of the LEA decision may be made by the complainant to the Title I Office of the Department of Public Instruction. The appeal shall be in writing and signed by the individual making the appeal. The Title I Office shall resolve the appeal in the same manner as a complaint, as indicated in A.1. through 3.

c. Any party to the complaint has the right to request the Secretary, U. S. Department of Education, to review the final decision of the Title I Office. The request for an appeal of the decision to the Secretary shall be made in writing to the Title I Office within sixty days of the receipt of the decision.

d. Complaints and appeals to the Title I Office shall be mailed to the following address:

Title I Office

Department of Public Instruction

P. O. Box 1402

Dover, Delaware 19903

(State Board Approved February 1990)

The Handbook for K-12 Education contains a section entitled Title IX of the Educational Amendments of 1972 Concerning Physical Education, I.C.2., pages A-3 and A-4. This regulation needs to be repealed because it simply presents information for technical assistance purposes from the federal regulations for Title IX and is not a Department of Education regulation.

I.C.2. TITLE IX OF EDUCATIONAL AMENDMENTS OF 1972 CONCERNING PHYSICAL EDUCATION

In 1976 and 1978 "girls physical education" and "boys physical education" became "student physical education" under Title IX of the Educational Amendments of 1972.

a. Section 86.34 of Title IX states that

(1) Physical education units of instruction required for one sex must be required for everyone.

(2) Elective units must be scheduled on an open enrollment basis.

(3) Grouping by ability is permitted as long as objective standards of individual performance related to the unit studies are applied without regard to

b. Section 86.33 of Title IX states that

(1) Students may be separated by sex for participation in contact sports.

(2) Evaluation outcomes may not adversely affect members of one sex.

(3) Students may be separated for instruction which deals exclusively with human sexuality.

competence, honesty, and integrity of the applicant or registrant as required by title 29 of the Delaware Code;

(12) A list of any known litigation involving the emploee organization within the last five years.

2. Regulations 4.2(10)(ii), (13), (15), (17)

4.2 The key employee shall register with the Agency on registration forms supplied by the Agency. Registration forms shall require the key employee to provide the following without limitation:

(10)(ii) Excluding minor traffic offenses, a detailed description of the following areas of criminal conduct, if any, including whether the crime involved is denominated a felony or misdemeanor;

(ii) Any criminal offenses, that occurred within ten years of the application or registration, for which the applicant or registrant was arrested, charged, indicted or summoned to answer, which are pending ir for which he was not convicted;

(13) Whether he has ever been subpoenaed as a witness before any grand jury, legislative body, administrative body, or crime commission on matters pertaining to the operation or performance in any labor organizaion, which shall include all details relating thereto.

(15) Any other information the Director determines is needed to determine the competence, honesty, and integrity of the applicant or registrant as required by title 29 od the Delaware Code.

(17) A Release Authorization directing all courts, probation departments, employers, educational institutions, financial and other institutions and all governmental agencies to release any and all information pertaining to the applicant or registrant as requested by the Agency or the Delaware State Police that bears on and is necessay and reasonably related to the statutory standards of competence, honesty, or integrity as specified by 29 Del.C. section 4805(a)(24)(c)(ii).

3. Regulation 6.1

6.2 The Director shall conduct employment investigations for any person seeking employment with the Agency for compensation for a position which has direct access to lottery ticket saales agents, video lottery agents, or vendors. Those new employee applicants who do not meet the requirements of these Regulations and 29 Del.C. chapter 48 may not be permitted to be employed by the Lottery.
The above regulatory changes will be presented to the State Board of Education at its meeting on February 19, 1998

Office of the State Lottery

Statutory Authority: 29 Delaware Code,

Section 4805(a), (a)(24)(f), (25) (29 Del.C. §§ 4805(a), (a)(24)(f), (25)

The Lottery proposes these rules pursuant to 29 Del.C. §§ 4805(a), 4805(a)(24)(f), 4805(25) and 29 Del.C. § 10115. Proposed rules 3.2(4), 3.2(9), 3.2(12), 4.2(10)(ii, 4.2(13), 4.2(15), and 4.2(17) would clarify the background investigation requirements for employee organizations and key employees. Proposed rule 6.1 would clarify the background investigation requirements for Lottery employees. Copies of the proposed rules may be obtained from the Lottery Office. Comments may be submitted in writing to Donald Johnson, at the Lottery Office on or before 4:00 p.m. on March 3, 1998. The Lottery Office is located at 1575 KcKee roa, Suite 102, Dover, DE 19901 and the phone number is (302) 739-5291.

PROPOSED REGULATIONS

1. Regulations 3.2(4), (9), (12)

3.2 The employee organization shall register with the Agency on registration forms supplied by the Agency. Registration forms shall require the employee organization to provide the followin, without limitation:

(4) The name and address of all afiliates which are either a parent body or any superior organization with any right or ability to control, supervise, discipline or set policy for this organization.

(9) Any other information the Director determines is needed, necessary, and reasonably related to the

Division of Revenue

Statutory Authority: 30 Delaware Code, Section 563 (30 Del.C. § 563)

PROPOSED TECHNICAL INFORMATION MEMORANDUM 98-1

SUBJECT: "CHECK THE BOX" REGULATIONS

Public Comment shall run from February 1, 1998 through March 3, 1998 and comments must be received by March 3, 1998. Comments shall be made in writing to John Maciejeski, whose address appears at the conclusion of this Memorandum.

Purpose of Regulation -- The purpose of this regulation is to explain the relationship between the classification of organizations for federal and state tax purposes and the procedures for electing entity classification.

Authority to make regulations; general information --

(i) The Director of Revenue is charged with the administration and enforcement of all state tax laws unless such duties are expressly conferred upon another agency. Title 30 Delaware Code §563

(ii) Published regulations are made and promulgated pursuant to authority vested in the Director. 30 Del. C. §563

(iii) As used in published regulations, references to a section (§) number refer to a section of the Delaware Code. References to a section (§) number preceded by a "1", as in §1.1900-1, refer to sections of regulations published by the Division of Revenue of this State.

REGULATION:

§1.1900-1 In general; Classification of organizations for federal and state tax purposes; election of entity classification.

(a) Meaning of terms -- Any term used in these regulations shall have the same meaning as when used in a comparable context in the laws and income tax regulations of the United States referring to federal income taxes, unless a different meaning is clearly required. Any reference to the laws of the United States or to the Internal Revenue Code shall mean the Internal Revenue Code of 1986 [26 U.S.C. § 1 et seq.] as amended
and regulations and amendments thereto and other laws of the United States relating to federal income taxes, as the same may be or become effective, for the taxable year.

(b) Classification of entities -- The classification of entities for Delaware tax purposes shall be as prescribed for federal tax purposes. Unless inconsistent with Delaware law, the provisions of Sections 301.7701-1; 301.7701-2; and 301.7701-3 of the Regulations to the Internal Revenue Code of 1986 are hereby adopted for Delaware purposes.

(c) Election of corporation classification by certain business entities -- A business entity that is not classified as a corporation for federal tax purposes but which elects to be classified as a corporation pursuant to §301.7701-3 of the Regulations to the Internal Revenue Code of 1986 shall be classified as a corporation for Delaware tax purposes.

(d) Notice of election to be classified as a corporation -- Business entities electing to be classified as a corporation for federal tax purposes shall attach a copy of Internal Revenue Service Form 8832, "Entity Classification Election" to their Delaware Corporate Income Tax Return, Form 1100.

(e) Tax return requirements --

(1) In general -- Members or partners of a business entity which has not elected to be classified as a corporation and which does business in this State shall file income tax returns for all such tax years.

(2) Special rules for non-electing, single member limited liability companies doing business in Delaware and their corporate members -- Notwithstanding other provisions of these regulations or regulations of the Internal Revenue Code to the contrary,

(A) a limited liability company (LLC) that has only a single, individual member and (i) does not elect to be classified as a corporation pursuant to these rules, and (ii) derives any income from sources in this State (determined in accordance with Title 30 Delaware Code §1124 as in the case of a nonresident individual), or (iii) has a member residing in this State, shall file partnership income tax information and business license and gross receipts tax returns for all such tax years.

(B) A corporation which is a single member of a non-electing limited liability company (LLC) and which is not exempt under Title 30 Delaware Code §1902(b), shall file corporation income tax and business license and gross receipts tax returns for all such tax years.

(3) The attached flow charts illustrate these principles.

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

(g) Effective date of this regulation -- This regulation is effective as of January 1, 1997.

(h) Contact Person -- For more information about these regulations or the classification of entities, contact John J. Maciejeski, Jr., Assistant Director, Office of Business Taxes, State of Delaware Division of Revenue, 820 N. French Street, Wilmington, Delaware 19801 or phone (302) 577-8450.

SYNOPSIS

Under Internal Revenue Service regulations, a per se corporation is required to be classified and taxable as a corporation.

Any organization that is not a corporation is taxable as a partnership if it has at least two members or a sole proprietorship if it has a single owner. Both partnerships and sole proprietorships are "eligible entities".

Existing entities are classified as they were prior to the effective date of the regulations. Newly organized eligible entities are, by default, partnerships if they have at least two members or sole proprietorships if they have a single owner. A single owner entity may not be a partnership or pass-through entity.

Under the federal "check the box" regulations, eligible entities may elect to be classified as associations taxable as a corporations. Corporations and certain foreign, insurance, banking and other listed associations may only be taxable as corporations.

Limited Liability Companies, except single owner LLC's, are by default taxable as partnerships. An LLC is an eligible entity which may make the election to be taxable as a corporation.

SPECIAL NOTE: The 1997 Delaware Corporate Income Tax Returns and instructions were prepared and mailed erroneously identifying the "Check the Box" regulations as Technical Information Memorandum 97-9. The correct number is Technical Information Memorandum 98-1.

William M. Remington

Director of Revenue

"Check the Box" Diagram

Non-Electing

Single Member LLC

Non-Electing LLC conducts

LLC an active trade/

business in

Delaware

Corporate Single Member Individual Single Member

Entity Entity

Disregarded Disregrded

LLC is considered LLC is considered

a Division of Corporation. a Sole Proprietor

Nexus created for the - Schedule C

corporate single

"Check the Box" Diagram

Non-Electing

Multiple Member LLC

Non-Electing

LLC

Taxed as a

Partnership

Partnership attributes flow

through to Corporate and

Individual partners

Nexus created for Corporate

and Individual Partners

"Check the Box" Diagram

Electing Single/Multiple

Member LLC

LLC

Entity Elects

Taxed as a Taxed as a

Corporation Partnership

Corporate attributes Partnership attributes

do not flow through flow through to

Corporate and Individual

Nexus not created Nexus created for

for member Corporate and

Individual Partners

LLC conducts an active trade/business in Delaware

Department of Health &

Social Services

Division of Social Services

Statutory Authority:

PUBLIC NOTICE

Medicaid / Medical Assistance Program

In compliance with the State's Administrative Procedures Act (APA - Title 29, Chapter 101 of the Delaware Code) and with 42CFR §447.205, the Delaware Department of Health and Social Services (DHSS) Division of Social Services/Medical Assistance Program (DMAP) hereby publishes notice of proposed policy amendments several Medicaid provider manuals including the General Policy Manual, the Long-Term Care Provider Manual, the Non-Emergency Transportation Provide Manual, the Home and Community-Based Services Provider Manual, the Hospice Provider Manual, the Practitioner Provider Manual, and the Independent Laboratory Provider Manual. The proposed policy changes are as follows:

GENERAL POLICY

Licensure/Certification

All providers who are enrolled with the DMAP must be professionally and properly licensed and/or certified in accordance with the federal and state laws in the state in which they are located. The provider type must match the State licensing category.

In addition, the following providers must meet the requirements for participation in Medicare (Title XVIII) as evidenced by certification from the Division of Public Health Office of Health Facilities Licensure and Certification: Long Term Care facilities, Inpatient and Outpatient hospitals, Rehabilitation agencies, Independent laboratories, Hospice organizations, Home Health agencies, Certified Physical Rehabilitation units of an Acute Care hospital, Ambulatory Surgical Centers/Free Standing Surgical Centers, and Renal Care Centers.

With the exception of behavioral health services provided through a Managed Care Organization (MCO), mental health clinic services shall be rendered only by providers which have been certified by the Division of Alcoholism, Drug Abuse and Mental Health (DADAMH) of the Department of Health and Social Services (DHSS).

Ambulance companies located in Delaware must be certified in accordance with the State Fire Prevention Commission (Title 16, Del. Code, Chapter 67). Ambulance companies located outside of Delaware must be properly licensed and certified by the State in which they are located.

Failure to be certified and properly licensed at the time service was provided may result in penalties and denial of payment by the DMAP.

Family Planning and Related Services

Who is Eligible

Females of childbearing years whose Medicaid (categorically or expanded population) is terminated for a non-fraudulent reason are eligible for family planning and related services for 24 months. Family planning services are defined as those services provided to females of childbearing age to temporarily or permanently prevent or delay pregnancy.

What Services Are Covered

Effective for dates of service 1/1/96 and after, the Family Planning and Related Services Benefit Package includes:

· contraceptive management; including non-systemic drugs and devices (excluding condoms), and oral contraceptives systemic drugs ,and related surgical procedures (for example, ligation of fallopian tubes).

· diagnosis and treatment of sexually transmitted diseases (STDs) when provided or prescribed during the family planning visit.

· HIV screening, diagnosis, and counseling ONLY when provided during a family planning visit.

Effective for dates of service 3/1/96 and after, coverage of pharmaceuticals prescribed during the family planning visit to eradicate the causative organism of a covered STD will be added to the Family Planning and Related Services Benefit Package. Those pharmaceuticals covered for a diagnosis of STD will be limited to the following four therapeutic classes: antibiotic, anti viral, anti fungal, anti protozoan. Pharmaceuticals prescribed to treat an STD outside of a family planning visit are not covered.

Non-Qualified Non-Citizens (Aliens) Aliens

Illegally Residing, Non-Qualified

Effective for dates of service 7/1/97 and after, illegally residing, non-qualified Non-Citizens ( aliens are eligible ONLY for coverage of emergency and labor/delivery services. These services must be rendered in an acute care hospital emergency room or in an acute care inpatient

The DMAP defines an emergency as:

· a sudden serious medical situation that is life threatening; OR

· a severe acute illness or accidental injury that demands immediate medical attention or surgical attention; AND

· without the treatment a person's life could be threatened or he/she could suffer serious long lasting disability.

Medically necessary physician (surgeon, pathologist, anesthesiologist, emergency room physician, internist, etc.) or midwife services rendered during an emergency service that meets the above criteria are covered.

Ancillary services (lab, x-ray, pharmacy, etc.) rendered during an emergency service that meets the above criteria are covered.

Emergency ambulance services to transport these individuals to and from the services defined above are also covered.

Services not covered for illegally residing, non-qualified Non-Citizens aliens include, but are not limited to:

· ANY service delivered in a setting other than an acute care hospital emergency room or an acute care inpatient hospital.

· ANY service (pharmacy, transportation, office visit, lab, x-ray, or home health, etc.) that precedes or is subsequent to a covered emergency service (except that emergency ambulance transportation directly related to the emergency service IS covered).

· Organ transplants.

· Long term care or rehabilitation care.

· Routine prenatal care and post partum care.

Legally Residing, Qualified and Non-Qualified

Legally residing, qualified and non-qualified aliens may be found eligible for full Medicaid benefits.

Medicaid/Medicare Recipients

Medicaid "Buys-in" Part A and/or Part B Medicare for certain eligible recipients. Some of these recipients are eligible for the whole range of Medicaid services and some, such as QMBs and SLIMBs, are not. All are eligible
for the full range of Medicare services.

For these dual eligibles, DMAP will pay an amount equal to, part, or all of the incurred Part B deductible or coinsurance remaining after Medicare has paid. Medicare Part A deductible and coinsurance amounts will be paid in full by DMAP. The specific payment methodology is as follows:

For services that the DMAP normally covers, the amount paid for the Part B co-insurance and deductible will be limited to either: 1) the maximum Medicaid rate for the service minus the actual Medicare payment or, 2) the deductible/coinsurance, whichever is less. Zero payment will be made when the Medicare payment is equal to or higher than the Medicaid rate.

Effective September 1, 1996, Medicaid will reimburse the full co-insurance and deductible amounts for QMBs after Medicare payment.

For services that are not normally covered by the DMAP program, the provider will be reimbursed the full Part B coinsurance and/or deductible amount identified by Medicare.

If a dual eligible also carries other health insurance coverage in addition to Medicare and Medicaid, that resource must be billed before Medicaid.

Participating providers agree to accept the final DMAP payment disposition as payment in full. Therefore, recipients eligible for both Medicaid and Medicare should not be billed for any non-covered charges or remaining portions of the Medicare deductible and coinsurance. Exceptions to the DMAP policy prohibiting the billing of recipients can be referenced in the Billing DMAP Recipients section of this General Policy.

LONG-TERM CARE PROVIDER MANUAL

VII. NURSING FACILITY ANCILLARY CHARGES

The DMAP will reimburse private nursing facility providers for some ancillary charges that are separate from the facility's per diem rates as follows:

· Physical therapy, by RPT only.

· Occupational therapy.

· Speech therapy.

· Oxygen.

Facilities will be paid at the median cost for each service (cap) or their actual cost, whichever is lower. Facilities

Oxygen

Oxygen H size Tank. (Maximum fee = $30.50 per tank).

Oxygen must be ordered by a physician. For date of service, use first day the oxygen tanks were actually used by patient. Claims will pend for review if more than four (4) tanks per month are billed. Use of more than four (4) tanks may indicate need for more cost effective system. Supportive documentation must be attached to the claim justifying need for this method if patient used more than four (4) tanks in a month.

Oxygen per hour on monthly basis. (Maximum fee = $1.25 per hour).

Oxygen must be ordered by physician. Claim will pend for review if facility bills for more than two hundred forty-eight (248) hours in a month. If after first month patient requires more than two hundred forty-eight (248) hours of oxygen, facility should switch to concentrator system for patient's future use.

Oxygen concentrator per day per month. (Maximum fee = $8.00 per day).

Oxygen must be physician ordered. Facility must specify which days of the month the concentrator was used. Facility can only bill for maximum of thirty-one (31) days. If facility bills for more than thirty-one (31) days on a claim form, the claim will reject and will be returned for correction. After facility bills for more than three (3) months worth of oxygen, supportive documentation must be attached to the claim to justify need for continuous oxygen.

If more than one type of oxygen is used in a month, provide an explanation.

Physical Therapy

Physical Therapy Evaluation. (Maximum fee = $45.00 evaluation).

The DMAP will reimburse for the initial evaluation performed by Registered Physical Therapist. The DMAP will pay for one (1) evaluation per treatment course. Date of service is the actual day evaluation was performed. If facility bills for more than one (1) evaluation in six (6) months, supporting documentation must be attached to the claim to justify the need for the new evaluation and new course of treatment.

Physical Therapy Treatment. (Maximum fee = $31.00 per treatment).

The DMAP will reimburse for one treatment per session provided by Registered Therapist only. The DMAP will not reimburse for physical therapy treatment delivered on the same day as a physical therapy evaluation. The DMAP will reimburse for maintenance as well as restorative therapy if doctor ordered and if monthly progress notes are completed by the therapist indicating what treatment was rendered at each session and the progress of the patient.

The DMAP will reimburse for up to twenty-three (23) sessions in a month. If more than twenty-three (23) sessions are required in a month, prior authorization must be requested of the Long-Term Care Coordinator. Payment will not be made for more than twenty-three (23) sessions if they have not been prior authorized.

If therapy continues for longer than ninety (90) days, claims must have supporting documentation attached justifying need for therapy after ninety (90) days. Supporting documentation would include a copy of the physician's order for therapy and copies of the therapist's progress notes indicating that the resident is still making progress.

Speech Therapy

Speech Therapy Evaluation (Maximum fee = $55.00 per evaluation)

The DMAP will reimburse for the initial evaluation for a course of treatment. The evaluation must be performed by a MSCCCSLP (Master of Science Certification Clinical Competency Speech Language Pathologist). The facility should bill for actual date of service. If the facility bills for more than one (1) evaluation in a year, supporting documentation must be attached to the claim to justify the need.

Speech Therapy Treatment (Maximum fee = $35.00 per treatment)

The DMAP will reimburse for one (1) treatment per session. Therapy must be provided by a MSCCCSLP. Monthly progress notes must be written by MSCCCSLP. Reimbursement will not be made for speech therapy treatment delivered on the same day as a speech therapy evaluation.

The DMAP will reimburse for a maximum of twenty-three (23) sessions per month. If more than twenty-three (23) sessions are required in a month, prior authorization must be requested of the Long-Term Care Coordinator.

If therapy continues for more than ninety (90) days, the facility must attach supporting documentation to the claim to justify continuing need. Supporting documentation would include copies of the physician order for therapy and the therapist's progress notes. Notes must indicate what treatment was rendered in each session and progress or outcome of the session.

Occupational Therapy

Occupational Therapy Evaluation. (Maximum fee = $60.00 per evaluation.

The DMAP will reimburse for one (1) evaluation per treatment course. Evaluation must be performed by a Registered Occupational Therapist (ROT). The facility should bill actual date evaluation was completed. If the facility bills for more than one (1) occupational therapy evaluation in a year, supporting documentation must be attached to the claims to justify the need for a new evaluation and new course of treatment.

Occupational Therapy Treatment. (Maximum fee = $38.00 per treatment).

The DMAP will reimburse for one (1) treatment per session performed by a Registered Occupational Therapist or by an Certified Occupational Therapy Aide under the direct supervision of a Registered Occupational Therapist. The therapy must be ordered by a physician. Monthly progress notes must be completed by the therapist indicating what treatment was rendered at each session and progress made by the patient. Reimbursement will not be made for therapy treatments provided on the same day as an occupation therapy evaluation.

The DMAP will reimburse for up to twenty-three (23) sessions per month. If more than twenty-three (23) sessions are required in a month, prior authorization must be requested of the Long-Term Care Coordinator. Reimbursement will not be made for more than twenty-three (23) sessions if they have not been prior authorized.

If therapy continues for longer than ninety (90) days, claims must have supporting documentation attached justifying need for therapy after ninety (90) days. Supporting documentation would include copies of the physician's order for therapy and the therapist's progress notes.

NON-EMERGENCY MEDICAL TRANSPORTATION PROVIDER POLICY

I. GENERAL INFORMATION

In accordance with Federal Regulation 42 CFR 431.53 the Delaware Medical Assistance Program (DMAP) will assure transportation for eligible Medicaid recipients who need to secure necessary medical care that is covered by the DMAP and who have no other means of transportation. The DMAP is designed to assist eligible Medicaid recipients in obtaining medical care within the guidelines specified in this policy.

The DMAP defines non-emergency medical transportation services as transportation to or from medical care for the purpose of receiving treatment and/or medical evaluation. The DMAP will determine the transportation provider to be in compliance with this policy as long as the transport is to or from a medical service.

The DMAP assigns a unique provider number ending with "15" to each non-emergency transportation provider enrolled with the DMAP.

Scope of Service

Transportation services are available through the DMAP when provided by an enrolled Medical Transportation provider to an eligible Medicaid recipient when:

· The recipient is transported to or from a medical provider to receive a medical service that is covered by the DMAP.

· The transport is the least expensive available means suitable to the recipient's medical needs.

· The transport used to get a Medicaid recipient to a medical provider of their choice is generally available and used by other residents of the community.

The DMAP covers transportation is covered for eligible Medicaid clients from the point of pickup to the medical provider location or from the medical provider location to the point of delivery. If an individual only goes to a medical appointment and does not return to the original pick up designation, the DMAP will only be charged one way and not a round trip fare. The service will include all vehicles, drivers, dispatch, vehicle maintenance, fuel, lubricants, and any and all other components necessary to provide a transportation service for the needs of the DMAP client.

The DMAP covers transportation for an individual who is responsible for the care of a Medicaid client. Transportation shall be provided to the individual to receive medical instructions in the care of the Medicaid client or to visit the Medicaid client when they are

Transportation services provided to Medicaid recipients are reimbursable by the DMAP only when the medical service received by the recipient is a service that is covered by the DMAP at the time the transportation service is provided or is a service provided by a Managed Care Organization (MCO) which is not normally covered by the DMAP (except routine eye care for adults). Transportation services provided to non-Medicaid recipients cannot be claimed for DMAP reimbursement.

Definitions

Non-emergency medical transportation services are defined as transportation to or from any DMAP covered medical service for the purpose of receiving treatment and/or medical evaluation. Whenever possible, medical transportation funded by the DMAP shall be integrated with transportation services provided by other departments of Health and Social Services. Transportation services available without cost to the general public must also be made available without cost to Medicaid recipients. Volunteer groups and non-profit agencies should be used to the extent possible, including, but not limited to, senior citizen organizations, agencies on aging, etc. If neighbors, friends, relatives or voluntary organizations have been providing transportation services to a Medicaid recipient, it is reasonable to expect them to continue.

The following definitions pertain to non-emergency medical transportation only.

Appropriate Method of Transportation is the least expensive type of transportation that best meets the physical and medical circumstances of a recipient requiring transportation to a medical service.

Assistance is when a recipient must be physically helped from within or into a building and/or from within or into the medical provider's site. Without such assistance, it would be unsafe or impossible for the recipient to reach the vehicle or the medical provider's site. The assistance
is included as part of the transportation rate.

Attendant is an employee of a transportation provider, who in addition to the driver, is required to assist in the transport of the recipient due to his/her physical, mental or developmental status.

Available Transportation is public transportation, an enrolled Medicaid provider, organization, or agency who offers appropriate transportation services to a recipient who requires medical transportation to a medical service.

Cancel Call is notification to the transportation provider ,prior to the time the vehicle is enroute to the pickup point, not to provide services to a recipient.

Escort is an interested individual that must accompany a recipient due to recipient's physical/mental/developmental capacity. Examples of an escort include, but are not limited to, a parent, guardian, or an individual who assumes parental like responsibility, or a child of a geriatric parent. The escort's presence is required to ensure that the recipient receives proper medical service/treatment. Refer to Appendix A, modifier Y1 for billing information.

Loaded Mileage is the distance traveled by a motor vehicle while transporting a recipient from a pickup point to a drop-off point.

Night Call Charge is an additional fee that may be paid when transportation service is dispatched between the hours of 6:00 p.m. and 6:00 a.m. inclusive.

No-Show is when a recipient fails to cancel a scheduled transportation service.

Prior Authorization is the approval for a service by the DMAP or the DMAP's agent before the provider actually renders the service. In order to receive reimbursement from the DMAP, a provider must comply with all prior authorization requirements. The DMAP in its sole discretion determines what information is necessary in order to approve a prior authorization request.

Provider Agreement is the signed written contractual agreement between the DMAP and the provider of services or goods.

Provider Headquarters is the provider's base of operations closest to the pickup point. A provider may have more than one (1) headquarters.

Recipient/Client is a person eligible for services under the DMAP.

Trip - One Way and Round Trip A one way trip is the dispatching of a vehicle to the recipient(s)' pickup point and transporting the recipient(s) to a medical provider, or from a medical provider to the drop-off point. A round trip is the dispatching of a vehicle to the recipient(s)' pickup point, transporting the recipient(s) to a medical provider and transporting the recipient(s) back to the pickup point.

Unloaded Mileage is the distance traveled by the motor vehicle carrying no passengers, enroute to the point of pickup or enroute from the point of drop-off.

Waiting Time is the time a vehicle is waiting at a medical provider's facility, to which the transportation provider transported the recipient, in order to transport the recipient to another destination, during the same trip.

Covered Medical Services

The DMAP will reimburse non-emergency transportation providers for transporting eligible Medicaid recipients to or from one of the following a medical services covered by the DMAP: Examples of medical services are found in the General Policy section of the manual.

· Acute care inpatient general hospital services (other than services in institutions for tuberculosis or mental diseases)

· Outpatient hospital services

· Rural health clinic services and Federally-qualified health center services

· Laboratory and X-ray services

· Early and periodic screening, diagnosis, treatment (including routine eye care, dental services, and other medically necessary services that are not covered for the general population) for individuals under age 21

· Family planning services (including voluntary sterilization)

· Physician services

· Durable medical equipment (see Limitations and Exclusions)

· Nurse-midwife services

· Services furnished by a certified nurse practitioner

· Podiatry services for routine foot care only for recipients who are diagnosed as having diabetes or circulatory/vascular disorders

· Clinic services, including mental health clinics, ambulatory surgical centers (ASCs) or free-standing surgical centers (FSSCs)

· Extended/enhanced services for high risk pregnant women (Smart Start Program)

· Rehabilitative services, including Community Support Services (CSS) and personal care services for individuals active with the Division of Alcohol, Drug Abuse and Mental Health determined to need intervention due to alcoholism, drug abuse or mental illness, & Day Health and Rehabilitation Services for individuals with mental retardation

· HMO's

· Physical, Occupational, Speech and Hearing Therapies for adults when provided by an authorized rehabilitative agency, home health agency or outpatient hospital.

Non-emergency transportation providers who believe that they are furnishing transportation for a Medicaid recipient on the same day as another transportation company may wish to submit a paper claim to EDS with documentation attached that will verify the transport.

Non-Covered Medical Services

Examples of medical services that are not covered by the DMAP include, but are not limited to, those list below. If any of the medically-related services listed below are provided to a Medicaid recipient who is enrolled with an MCO as part of that MCO's benefit package, Medicaid reimbursement is available.

· Chiropractic Services

· Routine dental, vision, prosthetics, orthotics and psychological services for adults (age 21 and over)

· Cosmetic surgery

· Psychologist services for adults

· Social Services

· Educational Services

· Reversal of sterilization or fertility related services

· Autopsies

· Inter-Hospital transportation

· Vocational Training

· Day Care

· Supplies in a non-emergency ambulance incident to the patient's condition, i.e., oxygen, intravenous.

Limitations and Exclusions

Reimbursement for medical transportation will be made subject to the limitations and exclusions that apply to these services. The limitation and exclusions are, but not limited to:

Limitations

· The DMAP reserves the right to make the

· The DMAP may pay for only the least expensive appropriate method of transportation, depending on the availability of the service and the physical and medical circumstances of the patient (recipient).

· The DMAP reserves the right to limit its payment of transportation to the nearest appropriate provider of medical services when it has made a determination that traveling further distances provides no medical benefit to the recipient.

· The DMAP may pay for transportation to procure Durable Medical Equipment (DME) which requires individualized fittings or measurements when the service cannot be provided in the home.

Exclusions

· The DMAP will not provide transportation to receive services not covered by the Program.

· The DMAP will not reimburse for services in which prior approval is required but was not obtained.

· The DMAP will not be reimburse for services that are not medically necessary or which are not provided in compliance with the provisions of the Program.

· The DMAP will not reimburse for any travel when the Medicaid recipient is not an occupant of the vehicle.

· The DMAP will not transport a recipient to a medical facility for reasons other than a medical examination and/or treatment.

· The DMAP will not reimburse for transportation provided by relatives or individuals living in the same household with the recipient.

· The DMAP will not reimburse for transportation provided in the recipient's vehicle, driven by the recipient or another person.

The DMAP will not provide transportation to a medical facility when the visit is for the sole purpose of the recipient picking up a prescription or written prescription order.

· The DMAP will not reimburse for unloaded mileage, waiting time, or no-shows. The following definitions apply:

* Unloaded mileage is the distance traveled by the vehicle carrying no passengers, enroute to the point of pick-up or enroute from the point of drop-off.

* Waiting time is the time a vehicle is waiting at a pick-up point in order to transport the recipient.

* A no-show is when a recipient fails to cancel a scheduled transportation service and the transport arrives a the pick-up point.

Services Which Require Prior Approval

As a condition of reimbursement, the DMAP requires that certain services be approved prior to the time they are rendered. In order to be reimbursed for prior approved services, the recipient must be Medicaid eligible at the time the services are rendered.

Prior approval, when required, must be obtained before non-emergency transportation services are rendered and, if possible, at least forty-eight (48) hours in advance. When the recipient receives health care services from more than one provider and requires approved transportation to each, a separate prior approval must be obtained for transportation to each health care provider.

A non-emergency transportation provider must obtain prior approval from the DMAP before providing the following transport services. listed below:

· Any transportation by commercial bus, train, or air service;

· Any transportation involving lodging and/or meals (reimbursement for meals is limited to the amount authorized for State employees or less);

· All transportation services outside the region (the region is D.C., PA. NJ and MD).

Requests for approval must be submitted in writing and mailed or faxed to the Medicaid Out-of-State Coordinator at:

Division of Social Services

Medicaid Unit, Lewis Building

P.O. Box 906

New Castle, DE 19720

FAX #: 302-577-4899

If possible, approval must be obtained at least forty-eight (48) hours before non-emergency transportation services are rendered. When the recipient receives health care services from more than one provider and requires approved transportation to each, a separate prior approval must be obtained for transportation to each health care provider.

Failure to secure approval from the Out-of-State Coordinator can result in non-payment from the DMAP.

Insurance Co-Payments

DMAP recipients may also be covered by plans such as BC/BS's Total Health Plus, CIGNA's Healthplan of Delaware, and Healthcare of Delaware, as well as other HMOs. etc. Under these kinds of plans, the patients choose a primary care physician who provides total care. The

In those instances where a Medicaid recipient is also covered by a plan for which payment of the above mentioned co-pays is required, the DMAP will cover the applicable co-pay amounts. (co-pays are differentiated from amounts are not to be confused with "non-covered" or "non-allowed" charges.)

Any person who is a member of an accessible managed care organization must use the services of the accessible managed care organization. Refer to the Accessible Managed Care Insurance Carriers section of the General Policy.

There is a specific Level III HCPCS procedure codes that is used when billing the DMAP for co-pay amounts. See APPENDIX A for the Level III HCPCS procedure code for transportation co-pay.

When billing the DMAP for co-pay amounts, refer to Appendix A for the Specific Level III HCPCS procedure code for transportation co-pay.

When billing the DMAP for co-pay the transportation provider must complete the HCFA 1500 as instructed in the Billing Section with the following exceptions:

· Enter the appropriate HCPCS co-pay procedure code in block 24D rather than the HCPCS procedure code for the actual service provided.

· Enter only the co-pay amount in block 24F. Do not enter your usual and customary charge nor add in any non-allowed charges.

· Leave block 29 blank. Do not enter the capitation amount, do not carry over the co-pay amount as a balance due, and do not enter a percentage of the capitation payment in an effort to apply it to the service provided.

· A copy of the payment voucher MUST be attached to the HCFA 1500.

II. PROVIDER PARTICIPATION SPONSIBILITIES

The DMAP provides reimbursement for non-emergency transportation for Medicaid recipients to obtain necessary medical services. As a The provider of non-emergency transportation services, it is the responsibility of the provider must to abide by the following policies and procedures. of the DMAP. This includes, but is not limited to:

· Providers may bill only for transportation services rendered to Medicaid recipients (and escorts, as required) to receive necessary medical care that is covered by DMAP.

· The providers must is responsible for maintaining all state-and/or locally required insurance coverage for the protection of its fleet, clients, and personnel, and upon request, furnish the DMAP with proof of this coverage.

· Providers must install seat belts and/or shoulder straps, to be worn by Medicaid recipients. The vehicle operators shall be instructed to refuse to operate the vehicle as long as any occupant is not wearing seat belts and/or shoulder straps.

· The providers must is responsible for maintaining current licenses, permits, or certifications as required by all levels of government in Delaware for operation of a vehicle(s). This includes, but is not limited to, vehicle license, driver's license, and business license.

· The providers will is responsible to provide door-to-door service, and when necessary, the operator or attendant must provide will assistance to those recipients in boarding and/or alighting from the vehicle. An attendant is an employee of the transportation provider who in addition to the driver is required to assist I the transport of the recipient due to his/her physical, mental or developmental status. Providing assistance is necessary when a recipient must be physically helped into or out of the vehicle, residence, or the medical provider's site. Without such assistance it would be unsafe or impossible for the recipient to reach the destination. If it is the policy of a transportation provider not to provide an attendant to assist recipients, it is their responsibility to inform the recipient when completing the Mobility Limitations" line on the Transportation Scheduling Form (see Appendix B.)

· Provider will render transportation services in late model vehicles which will be maintained and kept in good condition at all times.

· fully disclose the extent of services provided and when required to furnish the Department DMAP and Federal or State representatives with information regarding transportation services. For example, Records must include:, but, are not limited to the following:

- recipient's name, address and DMAP number;

- recipient's point of origin and destination;

- date of transportation service;

- escort's name, address, and relationship;

- number of miles traveled and mode of transportation;

- service provider's name, address and DMAP provider number;

- a copy of a properly signed approval form, when required.

· The providers may is responsible for billing the DMAP only for actual loaded miles provided.

· The provider is obligated to responsible for arranging and providing transportation services for DMAP recipients as follows:

* receive request from recipient and complete screening form . At the time of request for transportation the provider shall complete a Transportation Scheduling Form (see Appendix B) to accurately reflect the reason for the transport and to detail all information received from the recipient regarding the transport. The completion of the Transportation Scheduling Form will assist the transportation provider with a profile of the recipient and will help in determining the recipient's needs (if any);

- determine that the transportation is to or from a covered service;

* Verify individual's DMAP eligibility. The provider may contact Confirm to verify an individual's eligibility;

* Obtain prior authorization if required. (see "Services Which Require Prior Approval section of this manual);

* Schedule transportation and confirm the transport with the recipient;

* Arrive at the location timely;

* Always provide prompt and courteous service; and

* - provide service and submit claim.

* Submit a claim to the DMAP for only those services that were rendered.

The provider must maintain records to verify the services provided to Medicaid recipients as required in the General Policy and Provider Specific Policy.

III. MINIMUM VEHICLE STANDARDS

Client transportation vehicle safety is of primary importance during operation of vehicles utilized by providers enrolled non-emergency transportation providers in the DMAP. Providers of non-emergency transportation services must adhere to these minimum standards unless the vehicles used to transport clients are emergency ambulance vehicles. The DMAP places particular emphasis is placed on the safety of Medicaid clients while being transported in Medicaid reimbursed vehicles. the vehicles transporting Medicaid clients.
Providers of non-emergency transportation services must adhere to the following standards and must ensure that:

· A basic first aid kit is on each vehicle operated by DMAP providers.

· Providers have A regulation size Class B chemical type fire extinguisher is on each vehicle. Extinguisher must have a visible gauge or inspection tag reflecting annual inspections and be placed in easy reach of the driver. The extinguisher must be mounted in a bracket located in the driver's compartment and be readily accessible to the driver and passenger(s). A The extinguisher's pressure gauge shall must be mounted on the extinguisher so as to be easily read without moving the extinguisher from its mounted position. The operating mechanism shall be sealed with a type of seal which that will not interfere with the use of the fire extinguisher.

· Passengers will wear Seat belts and/or shoulder straps are installed in all vehicles .at all times with only one passenger per belt where applicable. For children, see, "Vehicles Transporting Children".

· Passengers will be seated while vehicle is in motion.

· Passengers unable to care for themselves will not be left unattended in the vehicle.

· Passenger occupancy for adults will not exceed the vehicle manufacturer's approved seating occupancy.

· Vehicle will be parked or stopped so that passengers will not have to cross the street to get their destination or pickup point.

· Vehicle interior and exterior will be free of hazardous debris or unsecured items.

· Interior vehicle equipment will be secured at all times.

· Vehicles will be operated by driver's who possess appropriate licenses and current training.

· Vehicles will be operated within manufacturer's safe operating standards at all times.

· There will be no smoking by drivers or passengers.

· Vehicles will display a Company Identification when transporting DMAP clients.

· Non-Emergency ambulance vehicles will meet or exceed standards required by the appropriate state licensing authority.

· Vehicles used to provide service shall be licensed, registered and insured according to State regulations.

· Transportation services are rendered in vehicles that are maintained and kept in good condition at all times.

Vehicles Transporting Mobility Impaired Clients

Additional policies for these clients are: In addition to the vehicle standards previously mentioned, providers of non-emergency transportation services who transport mobility impaired clients must provide the following:

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

· Vehicles are handicap accessible, for example:

* Ramps must be available to provide easy access for a wheelchair to enter and exit the vehicle; and

* Doors of the vehicle must be wide enough to accommodate a wheelchair.

Vehicles Transporting Children

Additional policies for these clients are: The following are additional policies for non-emergency transportation providers who transport children:

· An approved infant or child car seat or other specially adapted seating appropriate to age and size of child must be utilized for transporting children. The provider shall must exercise reasonable care that its infant or child car seats or other specially adapted seating are safe.

· The provider shall must assume responsibility for children transported without an escort from time and place of pickup until delivered to parents, guardians or responsible person(s) designated by parents or guardians.

· Passenger windows will not be opened more than 50% when children are in transport.

IV. MINIMUM DRIVER STANDARDS

General Safety

The first responsibility is the safety need of the client. Immediately evacuate passengers from vehicles in case of fire. Prior to evacuation, in case of an accident, evaluate injuries carefully.

Driver Qualifications

Driver's must be qualified by the minimum standards listed below as applicable:

Drivers of medical transportation vehicles are responsible for the following general safety standards:

· Drivers will possess a current state license and appropriate training. All drivers who transport clients in vehicles designed to carry sixteen (16) or more passengers including the driver are required to have a Class C driver's license and adhere to the Delaware transportation code. The capacity of the vehicle, not the number of persons carried is the controlling factor.

· Drivers must have a pre-employment health screening and a physical examination by a physician within six weeks of initial employment, or date of assignment to a driver's
position, with an annual review of health status. Providers must use all appropriate means to assure that all drivers employed are drug and alcohol free while transporting DMAP clients.

· Valid documentation of a driver's previous training record must be obtained prior to employment to assist in assuring that the applicant has a safe and competent driving history. For three years prior to employment, drivers must not have D.U.I. (driving under influence) convictions or license revocation. Valid documentation of driving record must be obtained annually thereafter.

· Drivers must receive training in the operation of all vehicle equipment, first aid, CPR, emergency exits, fire extinguishers, wheelchair lifts, stretchers, lockdowns, etc. This certification shall include training in passenger handling techniques, e.g., wheelchair movement and securement; stretcher loading; boarding assistance; etc. Training must also be given on patient confidentiality. Documentation of this training must be kept in the provider's files with proof of annual review.

· Drivers must complete training such as defensive driving within six months of initial employment with review as set by State of Delaware Safety Council.

· All drivers must practice safe driving, observe all Public Safety traffic laws and driving courtesy.

· Drivers and passengers must wear seat belts at all times as required by Delaware law. For children, see "Vehicles Transporting Children".

· Drivers must maintain a professional manner with all DMAP clients at all times.

· Drivers should present valid Provider issued identification to DMAP passengers at the time service is rendered.

· The driver must refuse to operate the vehicle as long as any occupant is not wearing a seat belt and/or a shoulder strap as required by Delaware law. Passengers must wear a seat belt at all times with only one passenger per belt where applicable. For children, see "Vehicles Transporting Children" section of this manual.

· The driver must insist that all passengers be seated while the vehicle is in motion.

· The driver must park or stop the vehicle so that passenger will not have to cross the street to get to their destination or pickup point.

· The driver must not permit smoking by passengers. The driver is also expected to refrain from smoking while transporting DMAP recipients.

· The driver must not leave passengers who are unable to care for themselves unattended in the vehicle.

Driver Qualifications

Enrolled transportation providers who employ drivers and/or sub-contract with drivers are responsible for the

At the time transportation services are rendered, drivers (employed or sub-contracted) drivers should present a valid "provider issued" identification to DMAP passengers. A current picture of the driver must appear on the identification.

V. OPERATIONAL REQUIREMENTS

Providers must maintain office records which address the operational requirements

listed below:

· Service Policies:

* Hours/days of service

* Booking/dispatch procedures

* Conditions for denial of service

* Complaint procedures

* Incident reports

* Waiting time provisions

* Attendant/escort provisions

* Miscellaneous operating regulations (e.g., smoking aboard vehicles)

* Entering client homes

* Stopping enroute for client's convenience

* Emergency procedures

* Passenger handling (wheelchair, stretcher, number of attendants, seat belts, weight restrictions, etc.

· Personnel Policy:

* Discipline procedures for safety violations, passenger mishandling and training programs.

* Provider must maintain and enforce policy regarding employee drug and alcohol use.

· Equipment Policies:

* Specifications (vehicle type, auxiliary equipment);

* Maintenance procedures;

* Replacement policy.

· Vehicle Maintenance:

* Maintenance records must be kept on all vehicle.

* Vehicle maintenance and safety checks must be done monthly.

* Maintenance and records must comply with Delaware Department of Motor Vehicle (DMV) standards and inspections.

Providers must have documentation of vehicles modified to adapt to alternate modes of service, e.g., passenger van converted to non-emergency ambulance, wheelchair lifts added, etc., and remain within the codes and regulations of the State of Delaware's DMV.

VI. REIMBURSEMENT

Non-emergency medical transportation providers, except taxi providers, are reimbursed a prospective rate per mile based on reported historic costs (cost reports).

Non-emergency medical transportation by taxi is reimbursed at the metered rate.

Reimbursement includes all vehicles, drivers, dispatch, vehicle maintenance, fuel, lubricants, and all components necessary to provide medical transportation services.

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

Health care services are provided to the majority of Medicaid clients through a Managed Care Organization (MCO). This manual reflects the policies as they relate to Medicaid clients who are exempt from managed care coverage or who may require practitioner orders to receive services outside the MCO package (see list of those exempt from managed care coverage in the Managed Care section of the General Policy). However, Home and Community-Based Services (HCBS) waiver clients are exempt from managed care coverage. Services provided to clients eligible for HCBS waiver services will be reimbursed on a "fee-for-service" basis.

I. DEFINITION AND OVERVIEW

The waiver to provide home and community based services to mentally retarded adults was developed by the Divisions of Mental Retardation (DMR)and Social Services (DSS) in 1982 and received approval from the Health Care Financing Administration (HCFA) and became effective on July 1, 1983. The waiver includes support services necessary to maintain individuals in the community as an alternative to institutionalization. The cost of the Home and Community-Based Services Waiver for the Mentally Retarded (HCBS/MR) shall not exceed the cost of care of the Intermediate Care Facility for the Mentally Retarded (ICF/MR).

VI. CONTENT/DESCRIPTION OF SERVICES

When billing the DMAP for HCBS/MR services, the provider must use their unique MR provider ID number that ends with "56". The procedure codes to be used for billing services under the Home and Community-Based Waiver for the Mentally Retarded are listed in Appendix A.

Services provided under the HCBS/MR waiver include:

Case Management Services

Case management services include responsibility for locating, managing, coordinating and monitoring:

· All proposed waiver services;

· Other State Plan services;

· Needed medical, social, educational and other publicly-funded services (regardless of funding source); and,

· Informal community supports needed by eligible persons.

The intent of case management services is to enable waiver participants to receive a full range of appropriate services in a planned, coordinated, efficient and effective manner.

Case management services consist of the following activities:

· Arranging for the provision of services;

· Initiation and oversight of the process of assessment and reassessment of program participant level of care and yearly review of plans of care;

· Determination and monitoring the cost-effectiveness of the provision of home and community services;

· Monitoring and review of waiver participant's services;

· Service coordination;

· Crisis intervention;

· Case planning;

· Assessment and referral; and,

· Follow-along to ensure quality of care and case reviews when focus on the individual's progress in meeting goals and objectives established through the care plan.

Case Management is administered by qualified mental retardation professional staff who meet the minimum requirements for job specifications as set forth by the State of Delaware Personnel Commission and outlined in the Merit System Procedure Manual.

Clinical Support

Clinical support includes physician services, home health care services, physical therapy services, occupational therapy services, speech, hearing and language services and prescribed drugs.

Clinical evaluation and consultation is administered by staff meeting the minimum requirements for job specifications as set forth by the State of Delaware Personnel Commission and outlined in the Merit System Procedure Manual.

Day Habilitation

Day habitation includes assistance with acquisition, retention, or improvement in self-help, socialization and adaptive skills which takes place in a non-residential setting, separate from the home or facility in which the recipient resides. Services shall normally be furnished four (4) or more hours per day on a regularly scheduled basis for one (1) or more days per week, unless provided as an adjunct to other day activities included in the recipient's plan of care. Day habilitation services shall focus on enabling the individual to attain his or her

Residential Habilitation

Residential Habilitation (State definition) is a continuum of settings where specialized training and supervision is provided within the following community residential settings:

· neighborhood group homes;

· specialized foster care programs;

· foster training homes

· staffed apartments; and,

· supervised apartments.

Training services in these settings are provided in accordance with an IPP which has been designed in the client assessment. The objectives of the residential habilitation services are to:

· address functional needs by modifying inappropriate behavior and enhancing beneficiary competence;

· address physical needs by promoting proper diet, exercise and health care by taking the necessary action to remedy an impairment as soon as possible after it occurs, and by assisting the beneficiary to adapt to an impairment;

· address emotional needs by strengthening the client's self-image, by the development of constructive relationships and by counseling supports if necessary;

HOSPICE PROVIDER SPECIFIC POLICY MANUAL

II. HOSPICE SERVICES

Hospice services will be provided in accordance with Sections 4305 through 4307 of the State Medicaid Manual. This part of the State Medicaid Manual is reproduced in its entirety in APPENDIX A of this manual.

An individual may elect to receive hospice care during one or more of the following election periods:

· An initial 90 day period.

· A subsequent 90 day period.

· A subsequent 30 day period.

· A subsequent extension period of unlimited duration during the individual's lifetime.

· Unlimited number of subsequent 60 day periods.

The periods of care are available in the order listed and may be elected separately at different times.

PRACTITIONER PROVIDER SPECIFIC POLICY

Practitioner Laboratories

General Information

The DMAP reimburses enrolled providers for properly ordered, medically necessary, non-experimental, non-investigational, Clinical Laboratory Improvement Amendments (CLIA) certified laboratory services when properly performed, documented, and billed.

All tests performed by a practitioner in his/her laboratory must be documented by a written order from the ordering practitioner. The signing of the practitioner's name by another individual or the use of facsimiles are not acceptable. Any telephone order for laboratory testing must be supported by a signed order from the practitioner.

As a result of Public Law 98-369, the DMAP prohibits practitioners from billing for clinical diagnostic laboratory tests that are not personally performed or supervised by the practitioner start-to-finish in his/her office. The following policies apply:

· Practitioners may only bill the program for those laboratory procedures which they personally perform or supervise start-to-finish in their office.

· Laboratory procedures which the practitioner refers to an outside laboratory must be billed by the laboratory.

· Interpretation of laboratory results or the taking of blood or other specimens is considered part of the visit and may not be charged as a separate procedure by the practitioner.

CLIA

The Clinical Laboratory Improvement Amendments of 1988 were enacted by Congress to improve the quality and reliability of clinical laboratory testing. CLIA applies to any provider who performs any laboratory test used for health purposes, no matter how simple or routine.

CLIA Certificate of Waiver Tests

The following Clinical diagnostic laboratory tests are considered to be CLIA Certificate of Waiver tests are listed in Appendix H. These are the only HCPCS procedure codes that may be billed to the DMAP by a provider who holds a CLIA Certificate of Waiver. If there is a specific product name or manufacturer listed, a provider who holds a CLIA Certificate of Waiver may only bill if the test is done USING THE SPECIFIC PRODUCT AND MANUFACTURER AS LISTED.

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

84830 Ovulation tests, by visual color comparison methods for human luteinizing hormone

CLIA Certificate for Provider-Performed Microscopy Procedures (PPMP)

The following Clinical diagnostic laboratory tests are considered CLIA provider-performed microscopy procedures are listed in Appendix I. A provider who holds a CLIA Certificate for Provider-Performed Microscopy may bill the DMAP for the following procedures in addition to the Certificate of Waiver tests.

81000 Urinalysis, by dipstick or tablet reagent for bilirubin, glucose, hemoglobin, ketones, leukocytes, nitrite, pH, protein, specific gravity, urobilinogen, any number of these constituents; non-automated, with microscopy

81015 Urinalysis; microscopic only

89190 Nasal smear for eosinophils

G0026 Fecal leukocyte examination

NOTE: The DMAP considers the following provider-performed microscopy procedures to be part of the physician evaluation and management service. Therefore, the following are not separately reimbursable by DMAP:

Q0111 Wet mounts, including preparations of vaginal, cervical or skin specimen

Q0112 All potassium hydroxide (KOH) preparations

Q0113 Pinworm examinations

NOTE: The DMAP does not cover any services relating solely to the treatment of infertility. Therefore, the following provider-performed microscopy procedures are not reimbursable by DMAP:

Q0114 Fern test

Q0115 Post-coital direct, qualitative examinations of vaginal or cervical mucous

G0027 Semen analysis; presence and/or motility of sperm excluding Huhner test

CLIA Certificate of Registration Tests that DO NOT Require Additional Certification by the DMAP

A practitioner who holds a CLIA Certificate of Registration may bill the DMAP for the following some routinely performed clinical diagnostic laboratory tests in addition to both the Certificate of Waiver tests and the Provider-Performed Microscopy procedures without These tests do not require additional certification by the DMAP. Refer to Appendix J for a list of appropriate HCPCS procedure codes.

NOTE: Skin tests (86485-86586) are not considered to be clinical diagnostic laboratory tests and are, therefore, not monitored by CLIA.

80002 Automated multichannel test; 1 or 2 clinical chemistry tests

80003 Automated multichannel test; 3 clinical chemistry tests

80004 Automated multichannel test; 4 clinical chemistry tests

80005 Automated multichannel test; 5 clinical chemistry tests

80006 Automated multichannel test; 6 clinical chemistry tests

80007 Automated multichannel test; 7 clinical chemistry tests

80008 Automated multichannel test; 8 clinical chemistry tests

80009 Automated multichannel test; 9 clinical chemistry tests

80010 Automated multichannel test; 10 clinical chemistry tests

80011 Automated multichannel test; 11 clinical chemistry tests

80012 Automated multichannel test; 12 clinical chemistry tests

81001 Urinalysis, by dip stick or tablet reagent for bilirubin, glucose, hemoglobin, ketones, leukocytes, nitrite, pH, protein, specific gravity, urobilinogen, any number of these constituents; automated, with microscopy

81003 Urinalysis, by dip stick or tablet reagent for bilirubin, glucose, hemoglobin, ketones, leukocytes, nitrite, pH, protein, specific gravity, urobilinogen, any number of these constituents; automated, without microscopy

81005 Urinalysis; qualitative or semiquantitative, except immunoassays

82044 Albumin; urine, microalbumin, semiquantiative (eg, reagent strip assay)

82273 Blood, occult; other sources, qualitative

82948 Glucose; blood, reagent strip

82950 Glucose; post glucose dose (includes glucose)

82951 Glucose; tolerance test (GTT), three specimens (includes glucose)

82952 Glucose; tolerance test, each additional beyond three specimens

83718 Lipoprotein, direct measurement; high density cholesterol (HDL cholesterol)

83986 pH, body fluid, except blood

84525 Urea nitrogen; semiquantitative (eg, reagent strip test)

84703 Gonadotropin, chorionic (hCG); qualitative

85014 Blood count; other than spun hematocrit

85018 Blood count; hemoglobin

85021 Blood count; hemogram, automated (RBC, WBC, Hgb, Hct and indices only)

85022 Blood count: hemogram, automated, and manual differential

89060 Crystal identification by light microscopy with or without polarizing lens analysis, any body fluid (except urine)

CLIA Certificate of Registration Tests that DO Require Additional Certification by the DMAP

Any other clinical diagnostic laboratory tests performed start-to-finish in a practitioner's office require BOTH a CLIA Certificate of Registration and certification by the Medicaid Laboratory Consultant.

To request this certification, submit a letter to:

Medicaid Laboratory Consultant

Division of Social Services

P.O. Box 906

Lewis Building

New Castle, DE 19720

with the following information:

· Describe the office procedure from start to finish in detail. You may enclose a copy of the package insert for commercial kits.

· Enclose a sample of how your test results will be recorded in your office record.

· Indicate your CLIA Certificate of Registration Number.

· Indicate the name of the physician(s) who will personally perform or supervise the laboratory procedure and include the DMAP provider ID number(s) which will be used for billing.

This information should not be submitted with a claim. When the laboratory consultant has certified your practice to perform the procedure, you will receive a certification letter.

If a claim is submitted for a HCPCS procedure code that requires certification and the practitioner has not followed the above outlined procedure, the claim will be denied with the message "Provider Not Specified to Provide Service." Once a particular HCPCS procedure code has been denied with this message, do not resubmit additional claims for this procedure code until the above noted procedure is complete.

Refer to Appendix K for specific billing instructions for:

· Multiple Units Of Service

· Pregnancy Tests

· Panels and Profiles

· Drug Testing

· Therapeutic Drug Assays

· Urinalysis

· Chemistry and Toxicology

· Hematology

· Immunology

· Microbiology

Multiple Units of Service

The following restrictions apply when billing for multiple units of service:

· Repetition of the same test on the same specimen must

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

· HCPCS procedure code 87088 is described as a culture, bacterial, urine; identification, in addition to quantitative or commercial kit. It is not to be used in conjunction with procedure code 87086 (Culture, bacterial, urine; quantitative, colony count) or with procedure code 87087 (Culture, bacterial, urine; commercial kit). They are considered to be part of procedure code 87088 when performed on the same specimen.

Laboratory Codes

HCPCS procedure codes 80002 - 80019 and G0058 - G0060 have been deleted in the CPT book but Delaware Medicaid will continue to use this coding series for automated multichannel testing.

The newly added 1998 CPT codes for organ or disease oriented panels will not be used. Use the appropriate automated multichannel test in the 80002 - 80019 series. For 80049, use 80007. For 80051, use 80004. For 80054, use 80012.

INDEPENDENT LABORATORY PROVIDER MANUAL

IV. BILLING FOR SPECIFIC LABORATORY SERVICES

HCPCS procedure codes 80002-80019 and G0058-G0060 have been deleted in the CPT book but Delaware Medicaid will continue to use this coding series for automated multichannel testing.

The newly added 1998 CPT codes for organ or disease oriented panels will not be used. Use the appropriate authomated multichannel test in the 8002-80019 series. For 80049, use 80007. For 80051, use 80004. For 80054, use 80012.

CLIA Certificate of Waiver Tests

The following Clinical diagnostic laboratory tests are considered to be CLIA Certificate of Waiver tests are listed in Appendix A. These are the only HCPCS procedure codes that may be billed to the DMAP by a provider who holds a CLIA Certificate of Waiver. If there is a specific product name or manufacturer listed, a provider who holds a CLIA Certificate of Waiver may only bill if the test is done USING THE SPECIFIC PRODUCT AND MANUFACTURER AS LISTED.

CODE DEFINITION PRODUCT MANUFACTURER

NAME

*80002 Glucose; Cholestech LDX Cholestech

effective quantitative

1/23/96

*80002 Triglycerides Cholestech LDX Cholestech

effective

1/23/96

*80002 Cholesterol, 1. Chemtraka 1. Chemtrak

effective total Accumeter 2. Johnson &

1/1/97 2. Advanced Care 3. Boehringer

(replaces 3. Boehringer Mannheim

G0054) Mannheim

AccuChek Instant

Plus Cholesterol 4. Cholestech

4. Cholestech LDX

81002 Urinalysis,

by dipstick Various Various or tablet reagent

for bilirubin,

glucose,

hemoglobin,

ketones,

leukocytes,

nitrite, pH,

protein, specific

84830 Ovulation tests, by visual color comparison methods for human luteinizing hormone

CLIA Certificate for Provider-Performed Microscopy Procedures (PPMP)

The following Clinical diagnostic laboratory tests are considered CLIA provider-performed microscopy procedures are listed in Appendix B. A provider who holds a CLIA Certificate for Provider-Performed Microscopy may bill the DMAP for the following procedures in addition to the Certificate of Waiver tests.

81000 Urinalysis, by dipstick or tablet reagent for bilirubin, glucose, hemoglobin, ketones, leukocytes, nitrite, pH,

G0027 Semen analysis; presence and/or motility of sperm excluding Huhner test

CLIA Certificate of Registration Tests

An independent laboratory who holds a CLIA Certificate of Registration may bill the DMAP for any clinical diagnostic laboratory test for which they have received CLIA certification.

Refer to Appendix C for specific billing instructions for:

· Multiple Units of Service

· Pregnancy Tests

· Panels and Profiles

· Drug Testing

· Therapeutic Drug Assays

· Urinalysis

· Chemistry and Toxicology

· Hematology

· Immunology

· Microbiology

Multiple Units of Service

The following restrictions apply when billing for multiple units of service:

· Repetition of the same test on the same specimen must
not be billed.

· When the same test is performed on separate specimens collected on the same day from the same patient, bill for multiple units of the appropriate HCPCS procedure code. In block 19 of the HCFA 1500 which is used to explain unusual services or circumstances, note the times that the specimens were collected.

EXAMPLE: If a glucose is drawn at 8 AM and again at 2 PM on the same day, bill for two units of 80002. In block 19 of the HCFA 1500, note that the specimens were collected at 8 AM and 2 PM.

· When different procedures are described by one HCPCS procedure code, bill for multiple units of service. In block 19 of the HCFA 1500 which is used to explain unusual services or circumstances, identify the procedures performed.

EXAMPLE: When both a wound culture and an eye culture are performed on the same day, bill for two units of 87070. In block 19 of the HCFA 1500, state that one wound culture and one eye culture were performed.

Pregnancy Tests

The following restrictions apply:

· HCPCS procedure code 81025 (Urine pregnancy test, by visual color comparison methods) should be used for pregnancy tests performed on urine samples that are reported as positive or negative by a visual color comparison.

· HCPCS procedure code 84703 [Gonadotropin, chorionic (hCG); qualitative] should be used for pregnancy tests reported as positive or negative.

· HCPCS procedure code 84702 [Gonadotropin, chorionic (hCG); quantitative) should be used when determining the range of values of the beta sub-unit of the chorionic gonadotropin. DO NOT USE THIS CODE FOR ROUTINE PREGNANCY TESTS.

Panels and Profiles (80002-G0060)

Panels or profiles are groups of laboratory tests that are performed and billed as a single unit. Practitioners must use the appropriate single procedure code that describes the group of tests being performed.

The individual HCPCS procedure codes for the 22 tests listed below are NOT used by the DMAP.

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

When billing for any specific chemistry test that is noted under the list of automated, multichannel tests, do not use the individual HCPCS procedure codes regardless of whether the tests are performed using manual methods or automated, multichannel equipment. The practitioner should bill using the appropriate profile code.

Hematology (85000 - 85999)

When billing codes for a complete blood count (CBC) or hemogram, identified as HCPCS procedure codes 85021, 85022, 85023, 85024, 85025, 85027, or 85031, do not bill for any code that is a component of a CBC for the same specimen. The following are the HCPCS procedure codes for components: 85007, 85008, 85013, 85014, 85018, 85041, 85048, 85585, 85590, and 85595.

Providers are reminded not to use multiple procedure codes when a single procedure code accurately describes the service rendered.

Immunology (86000 - 86999)

When there is no specific code for an immunology procedure, the code for the methodology is to be used. Certain codes can be used to describe many different tests. When two or more different tests are described by the same code and are performed on the same patient on the same day, bill on a single line using multiple units of service.

Identify the procedures performed in Block 19 of the HCFA 1500, which is used to explain unusual services or circumstances.

Microbiology (87001 - 87999)

The following policies apply:

· A definitive culture is one in which ALL probable pathogens are isolated and identified. Commercial kits are not considered to be definitive culture methods.

EXAMPLE: When billing code 87060 (Culture, bacterial, definitive; throat or nose), the practitioner is expected to be able to isolate and identify Haemophilus, gram negative rods, staphylococci, pneumococci, and other probable naso-pharyngeal pathogens in addition to beta hemolytic streptococci.

· A presumptive or screening culture is one in which a single pathogen is isolated but may or may not be definitively identified.

EXAMPLE: When a throat culture is screened for the presence or absence of group A beta streptococci using a low concentration bacitracin disc, bill for one unit of 87081. Identification aids such as bacitracin and neomycin discs are considered part of the screen and should not be billed in addition to the 87081.

EXAMPLE: When a genital culture is screened for the presence or absence of Neisseria gonorrhea (GC), bill for one unit of 87081.

· Commercial kits are self-contained microbiology systems that offer screening information on one or more probable pathogens. HCPCS procedure codes for commercial kits are found in the microbiology section of the CPT book. Cultures performed using commercial kits are not considered definitive. In block 19 of the HCFA 1500 which is used to explain unusual services or circumstances, identify the commercial kit used.

EXAMPLE: When a culture of the urethra for Neisseria gonorrhea (GC) is performed using the Isocult commercial kit for gonorrhea, bill for one unit of HCPCS procedure code 87082. In block 19 of the HCFA 1500, note that Isocult was the commercial kit used.

· Direct sensitivities are not reimbursable. A direct sensitivity is inoculated directly from the specimen at the time of the initial culture. DO NOT use HCPCS procedure codes 87181, 87184, 87186, or 87188 to describe direct sensitivities. Sensitivities will only be reimbursed after a pathogen has been isolated and set up for sensitivities.

· HCPCS procedure code 87088 is described as a culture, bacterial, urine; identification, in addition to quantitative or commercial kit. It is not to be used in conjunction with procedure code 87086 (Culture, bacterial, urine; quantitative, colony count) or with procedure code 87087 (Culture, bacterial, urine; commercial kit). They are considered to be part of procedure code 87088 when performed on the same specimen.

—END OF MANUALS—

Comments or requests for copies of proposed changes or relevant materials may be made in writing to: Medicaid Administrative Offices, Division of Social Service, P.O. Box 906, New Castle, DE 19720, attention: Thelma G. Mayer, or by calling (302) 577-4880, extension 131, or may be viewed at the following locations: New Castle County: Medicaid Office, Lewis Bldg., Herman M. Holloway, Sr. Health & Social Services Campus, 1901 N. DuPont Hwy., New Castle, DE, 19720; Kent County: Medicaid Unit, Division of Social Services, Williams State

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193) enacted on August 22, 1996, significantly changed Medicaid eligibility for individuals who are not citizens of the United States. The legislation revised the categories of noncitizens who may be determined eligible for Medicaid. The legislation identifies noncitizens as qualified aliens or nonqualified aliens. The term qualified refers to groups of aliens whose members may establish Medicaid eligibility under certain circumstances and subject to certain limitations. For specific groups of aliens identified as nonqualified, eligibility is limited to the treatment of an emergency medical condition as defined in this section.

In State Fiscal Year 1998, (SFY 98), the Delaware legislature appropriated state only funds to restore coverage of full Medicaid benefits to legally residing noncitizens who lost eligibility for full Medicaid benefits because of PRWORA. Coverage for these aliens will be provided on a fee for service basis and is subject to the availability of state funding. In the event state funding is exhausted, the benefits will be reduced to coverage of emergency services and labor and deliver only.

Aliens who may be found eligible for full Medicaid coverage using the state funds include legally residing nonqualified aliens and qualified aliens subject to the 5 year bar. Illegally residing aliens and ineligible aliens are not eligible for full Medicaid coverage, but remain eligible for emergency services and labor and delivery only.

All applicants, whether aliens or citizens, must meet the technical and financial eligibility criteria of a specific eligibility group such as SSI related group, AFDC related group, or poverty level related group. Not every alien, qualified or nonqualified, will be eligible for Medicaid. For example, enrollment in a managed care organization is a technical eligibility requirement for adults in the expanded population under the Diamond State Health Plan demonstration waiver. A nonqualified alien or a qualified alien who is subject to the 5 year PRWORA bar cannot be found eligible in the expanded population. This is because the state funded benefits are provided on a fee for service basis. An individual cannot be found eligible under the expanded population for emergency services only because those benefits are provided on a fee for service basis. Adults in the expanded population are required to enroll in managed care to receive benefits.

I. United States Citizens

An individual qualifies as a U.S. citizen if the person was

department of health &

social services

Division of Social Services

Statutory Authority:

PUBLIC NOTICE

Medicaid / Medical Assistance Program

In compliance with the State's Administrative Procedures Act (APA - Title 29, Chapter 101 of the Delaware Code) and with 42CFR §447.205, the Delaware Department of Health and Social Services (DHSS) Division of Social Services/Medical Assistance Program (DMAP) hereby publishes notice of proposed policy amendments to the Medicaid eligibility policy manual reflecting changes made to the program as a result of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193 (PRWORA) and changes to coverage for aliens mandated by PRWORA and new coverage for some aliens funded by the State. The proposed policy changes are as follows:

240.10 CITIZENSHIP AND ALIENAGE

Overview

A. Medicaid Eligibility for U.S. citizens

Medicaid must be provided to eligible citizens or nationals of the United States.

II. Noncitizens or Aliens

The word "alien" is a technical, legal term for a person who is not a U.S. citizen. Common immigration terms are listed at the end of this section. Medicaid eligibility for aliens is based on whether the alien is a qualified or nonqualified alien. The previous category of lawful permanent resident becomes a subcategory of the new term qualified alien. The category known as permanently residing in the United States under color of law (PRUCOL) no longer applies and is no longer an eligibility classification. Individuals who were formerly PRUCOL are now considered nonqualified aliens.

III. Qualified Aliens

A qualified alien is:

a) an alien who is lawfully admitted for permanent residence under the Immigration and Nationality Act (INA). An American Indian born in Canada is included in this designation provided he or she is of at least one-half American Indian blood. This does not include a spouse or child of the Indian or a non citizen whose membership in an Indian tribe or family is created by adoption, unless the person is of at least 50% or more Indian blood.

b) a refugee who is admitted to the United States under §207 of the INA

c) an alien who is granted asylum under §208 of the INA

d) an alien whose deportation is being withheld under §243(h) of the INA or §241(b)(3) of the INA

e) an alien who is paroled into the United States under §212(d)(5) of the INA for a period of at least 1 year

f) an alien granted conditional entry pursuant to §203(a)(7) of the INA as in effect before April 1, 1980

g) honorably discharged veterans and aliens on active duty in the U.S. armed forces and the spouse or unmarried dependent children of a veteran or active duty serviceman. The discharge must not be due to alien status and the active duty status must not be for training. For example, the 2 weeks of active duty training usually required of members of the National Guard does not meet the definition of active duty. Hmong and other Highland
Lao veterans who fought on behalf of the Armed Forces of the U.S. during the Vietnam conflict and who have lawfully been admitted for permanent residence are considered veterans.

h) an alien granted status as a Cuban and Haitian entrant (as defined in Section 501(e) of the Refugee Education Assistance Act of 1980)

i) an alien admitted to the U.S. as an Amerasian immigrant pursuant to Section 584 of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 1988

j) aliens who have been subjected to battery or extreme cruelty and who meet certain criteria, including an alien whose child has been battered or an alien child whose parent has been battered

k) an American Indian born in Canada who is at least one-half American Indian blood and to whom the provisions of §289 of the INA apply or who is a member of an Indian tribe under section 4(e) of the Indian Self-Determination and Education Assistance Act

A. Medicaid Eligibility for Qualified Aliens

Effective January 1, 1998, all qualified aliens, regardless of the date of entry into the U.S., may be found eligible for full Medicaid benefits, including long term care services.

The Delaware legislature appropriated state only funds to restore full Medicaid benefits to legally residing noncitizens who lost eligibility for full Medicaid because of PRWORA. Under PRWORA, certain qualified aliens entering the U.S. on or after 8/22/96 were subject to a 5 year bar on eligibility. Coverage for full Medicaid benefits for the qualified aliens who are under the 5 year PRWORA bar, is subject to the availability of state funds.

The PRWORA policy (as amended by the Balanced Budget Act) which follows describes the eligibility for qualified aliens prior to the appropriation of state funds. In

the event such state funding is exhausted, eligibility for qualified aliens will be determined using the PRWORA policy described below.

Under PRWORA, there are both mandatory and optional coverage groups for qualified aliens depending upon the alien's date of entry into the U.S. Delaware has decided to cover both the mandatory and optional groups.

The date of entry is significant for the aliens listed as a), e), f), j). These aliens who enter the U.S. on or after 8/22/96 are not eligible for full Medicaid benefits for 5 years after date of entry. These aliens are eligible only for emergency services and labor and delivery services during

The following qualified aliens may be found eligible for Medicaid regardless of their date of entry into the U.S.:

· Refugees (§207 of INA)

· Asylees (§208 of INA)

· Aliens who have had deportation withheld under §243(h) or §241(b)(3) of the INA

· Honorably discharged veterans and aliens on active duty in the U.S. armed forces and the spouse or unmarried dependent children of a veteran or active duty serviceman.

· Cuban and Haitian entrants

· Amerasians

· American Indian born in Canada or who is a member of an Indian tribe under section 4(e) of the Indian Self-Determination and Education Assistance Act

In addition, title IVE Foster Children and Adoption Assistance children may be found eligible for Medicaid regardless of date of entry provided the foster or adoptive parent of the child is also a qualified alien or a citizen. The IVE agency is responsible for making that determination about the parent. If a IVE payment is being made on behalf of the child, then the child is deemed eligible for Medicaid.

For the following qualified aliens, eligibility under PRWORA is determined based upon the date of entry into the U.S.:

· Lawful permanent residents

· Aliens granted parole (parolees)

· Aliens granted conditional entry (conditional entrants)

· battered immigrants

If these aliens (lawful permanent residents, parolees, conditional entrants, battered immigrants) were living in the U.S. before August 22, 1996, they may be found eligible for Medicaid. If these aliens entered the U.S. on or after August 22, 1996, they are not eligible for full Medicaid benefits for 5 years from the date of entry into the U.S. They may be found eligible for emergency services only during the first 5 years after entering the U.S. Once these aliens have been in the U.S. for 5 years, they may be found eligible for full Medicaid.

IV. Legally Residing Nonqualified Aliens

These are aliens who do not meet the above definition of qualified aliens. Individuals formerly known as PRUCOL are now considered nonqualified aliens. Nonqualified aliens have to provide a Social Security Number (SSN) if
one is available, or apply for a SSN if the applicant does not have one.

Legally residing nonqualified aliens include the following:

· aliens granted permission to remain and work in the U.S.

· individuals who have been paroled into the U.S. for less than 1 year

· applicants for immigration status such as applicants for asylum, adjustment to lawful permanent resident status, suspension of deportation

· aliens in Temporary Protected Status (TPS)

· aliens in temporary resident status

· Family unity beneficiaries

· aliens under deferred enforced departure

· aliens in deferred action status

· aliens who are the spouses or children of U.S. citizens with approved visa petitions and pending adjustment of status application.

A. Medicaid Eligibility for Legally Residing Nonqualified Aliens

Effective January 1, 1998, legally residing nonqualified aliens, regardless of the date of entry into the U.S., may be found eligible for full Medicaid benefits, including long term care services.

The Delaware legislature appropriated state only funds to restore full coverage of Medicaid benefits to legally residing noncitizens who lost eligibility for full Medicaid benefits because of PRWORA. Coverage for full Medicaid benefits for these legally residing nonqualified aliens is subject to the availability of state funds.

The PRWORA policy (as amended by the Balanced Budget Act) which follows describes the eligibility for legally residing nonqualified aliens prior to the appropriation of state funds. In the event such state funding is exhausted, eligibility for legally residing nonqualified aliens will be determined using the PRWORA policy described below.

Under PRWORA, legally residing nonqualified aliens, who meet the technical and financial requirements of a specific Medicaid eligibility group, are only eligible for the treatment of an emergency medical condition, as defined in this section, and labor and delivery services. Under PRWORA, legally residing nonqualified aliens are not eligible for any long term care Medicaid program.

V. Illegally Residing Nonqualified Aliens

The term nonqualified aliens also includes aliens who are

United States when the period of time expired. Unlike other nonqualified aliens, they are not issued SSNs. Aliens who are illegally residing in the U.S. do not have to provide a SSN.

Legal nonimmigrants are not included in the group of nonqualified aliens. Legal nonimmigrants are included with the group known as ineligible aliens.

A. Medicaid Eligibility for Illegally Residing Nonqualified Aliens

Illegally residing nonqualified aliens, who meet the technical and financial requirements of a specific Medicaid eligibility group, are only eligible for the treatment of an emergency medical condition, as defined in this section, and labor and delivery services. Illegally residing nonqualified aliens are not eligible for any long term care Medicaid program.

VI. Ineligible Aliens

Some aliens may be lawfully admitted to the United States but only for a temporary or specified period of time as legal nonimmigrants. They are known as ineligible aliens. These aliens do not have to provide a Social Security Number. The following categories of individuals are known as ineligible aliens:

· Foreign government representative on official business and their families and servants

· Visitors for business or pleasure, including exchange visitors

· Aliens in travel status while traveling directly through the U.S.

· Crewmen on shore leave

· Treaty traders and investors and their families

· Foreign students

· International organization representation and personnel and their families and servants

· Temporary workers including agricultural contract workers

· Members of foreign press, radio, film, or other information media and their families.

Ineligible aliens may present the following documentation:

· Form I-94 Arrival-Departure Record with codes other than those listed for qualified aliens, such as a
nonimmigrant code

· Form I-185, Canadian Border Crossing Card

· Form I-186, Mexican Border Crossing Card

· Form I-95A, Crewman's Landing Permit.

A. Medicaid Eligibility for Ineligible Aliens

In some cases an alien in a currently valid nonimmigrant classification may meet State residence rules. When this is the case, the alien may be found eligible for Medicaid.

Ineligible aliens, who meet the technical and financial requirements of a specific Medicaid eligibility group (including State residency), are only eligible for the treatment of an emergency medical condition, as defined in this section, and labor and delivery services. Ineligible aliens are not eligible for any long term care Medicaid program.

VII. Treatment of an Emergency Medical Condition

To be eligible for coverage of labor and delivery and emergency services, the alien must meet all eligibility requirements for a specific Medicaid eligibility group such as in the SSI related groups, poverty level related groups, or AFDC related groups. The alien does not have to meet the requirement concerning declaration of satisfactory immigration status and verification of that status.

Under PRWORA, nonqualified noncitizens (aliens) are eligible ONLY for coverage of emergency services and labor and delivery services. As noted previously, legally residing nonqualified aliens may be found eligible for full Medicaid benefits effective January 1, 1998. Illegally residing aliens and ineligible aliens are eligible ONLY for coverage of emergency services and labor and delivery services. These services must be rendered in an acute care hospital emergency room or in an acute care inpatient hospital. In addition, emergency services must be rendered for diagnoses designated by the Delaware Medical Assistance Program (DMAP) as an emergency. A comprehensive list of the covered diagnoses is available in Appendix G of the DMAP Provider General Policy Manual.

The DMAP defines an emergency as:

· a sudden serious medical situation that is life threatening; OR

· a severe acute illness or accidental injury that demands immediate medical attention or surgical attention; AND

· without the treatment a person's life could be threatened or he or she could suffer serious long lasting

Medically necessary physician (surgeon, pathologist, anesthesiologist, emergency room physician, internist, etc.) or midwife services rendered during an emergency service that meets the above criteria are covered. Ancillary services (lab, x-ray, pharmacy, etc.) rendered during an emergency service that meets the above criteria are also covered. Emergency ambulance services to transport these individuals to and from the services defined above are also covered.

Services not covered for nonqualified noncitizens who are determned to be eligible for emergency service and labor and delivery only include but are not limited to:

· any service delivered in a setting other than an acute care hospital emergency room or an acute care inpatient hospital.

· any service (such as pharmacy, transportation, office visit, lab or x-ray, home health) that precedes or is subsequent to a covered emergency service. Exception: ambulance transportation that is directly related to the emergency is covered.

· organ transplants

· long term care or rehabilitation care

· routine prenatal and post partum care

VIII. Documentation and Verification of Citizenship or Alien Status

A. Declaration of Satisfactory Immigration Status

As a condition of eligibility, applicants must sign a written declaration under penalty of perjury stating if he or she is a citizen, national of the United States or an alien in satisfactory immigration status. (qualified alien or alien in lawful status) This declaration is obtained on the Affidavit of Citizenship or Lawful Immigration Status form as part of the application for Medicaid. In the case of a child or incompetent applicant, an adult must sign on the applicant's behalf. The applicant must also sign the Consent of Disclosure (Form SAVE 2), which allows the Immigration and Naturalization Service (INS) to provide verification of the individual's alien status.

If the applicant is not a citizen, national of the United States, qualified aliens or an alien in lawful status, the declaration of citizenship or satisfactory immigration status and verification of such status is not required. If the applicant will not sign the declaration, he or she may be found eligible for coverage for labor and delivery and emergency services only.

B. Documentation of Citizenship or Alien Status

Applicants must provide documentation of citizenship, qualified alien status, or lawful alien status. All noncitizens who declare they are qualified aliens or in lawful alien status, must provide INS documents to establish immigration status. Examples of acceptable documentation for U.S. citizens, qualified aliens, and lawful alien status are given in this section.

If the applicant will not provide evidence of citizenship or alien status and does not allege qualified or lawful alien status, the application is not denied, but an eligibility determination is completed for coverage of labor and delivery and emergency services only.

As required by §1137(d)(4) of the Social Security Act, Medicaid will be provided to individuals who meet all other nonimmigration Medicaid eligibility requirements, pending verification of immigration status. We will provide Medicaid to an otherwise eligible individual who has presented INS documents showing qualified or lawful alien status, pending verification of the document.

For noncitizen applicants who declare they are qualified or lawful aliens or for individuals who declare citizenship but have no documentation, we must allow the individual a reasonable opportunity to produce evidence of immigration or citizenship status. We will give the individual 30 days from the date of the receipt of application to produce an INS document or documentation of citizenship. If the individual meets all other eligibility requirements except for this documentation, we will provide Medicaid during this 30 day period.

If the applicant provides an expired INS document or has no documentation regarding his or her immigration status, refer the individual to the local INS district office to obtain evidence of status. As noted previously, Medicaid coverage is provided for a 30 day period pending verification of alien status. If the applicant can provide an alien registration number, follow the secondary verification procedures outlined below under Section "C. Verification of Immigration Alien Status".

C. Verification of Immigration Alien Status

States are required to verify alien status with the INS. Delaware Medicaid will verify alien status through the Systematic Alien Verification for Entitlements (SAVE) mechanism in operation in the Division of Social Services. Verification must be completed at initial application and at redetermination.

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

G-845S. A separate G-845S must be completed for each applicant and must include copies of the documents for that person only. If a family has applied for benefits, each member will require a separate G-845S. The local INS office will complete the G-845S and return it to the State Office SAVE point-of-contact person, who will forward the response to the eligibility worker.

INS verification requests and responses (both primary and secondary) must be dated and filed in the case record.

An alien registration number is required for both primary and secondary verifications. If the applicant provides an alien registration number but does not have the INS document, complete Form G-845S including the alien registration number. If an applicant provides a receipt indicating that he or she has applied to INS for a replacement document, use a Form G-845S attaching a copy of the receipt.

D. Documentation of U.S. Citizenship

The following are examples of acceptable documentation of U.S. citizenship for Medicaid applicants:

· Birth certificate

· Religious record of birth recorded in the U.S. or its territories within 3 months of birth, which indicates a U.S. place of birth. The document must show either the date of birth or individual's age at the time the record was made.

· Hospital record of birth in one of the 50 States, the District of Columbia, Puerto Rico (on or after January 13, 1941), Guam (on or after April 10, 1899), the U.S. Virgin Islands (on or after January 17, 1917), American Somoa, Swain's Island or the Northern Mariana Islands (unless the person was born to foreign diplomats residing in such a jurisdiction)

· U.S. passport (not time limited passports, which are issued for periods of less than 5 years)

· Report of Birth Abroad of a Citizen of the U.S. (INS Form FS-240)

· TPQY from Social Security Administration showing citizen code "A" or "C"

· Certification of Birth (INS Form FS-545)

· U. S. Citizen I.D. Card (INS Form I-197)

· Naturalization Certificate (INS Form N-550 or N-570)

· Certificate of Citizenship (INS Form N-560 or N-561)

· Northern Mariana Identification Card (issued by the INS to a collectively naturalized citizen of the U.S. who was born in the Northern Mariana Islands before November 3, 1986)

· American Indian Card with a classification code "KIC" and a statement on the back (issued by the INS to identify U.S. citizen members of the Texas Band of Kickapoos living near the U.S./Mexican border)

· Other alternative documentation that is determined to be acceptable by the State

E. Documentation of Qualified Aliens

Acceptable documentation of qualified alien status is listed below. The card should show the date of admission or date of entry into the United States.

1. Lawful Permanent Residents

INS Form I-551, or for recent arrivals, a temporary I-551 stamp in a foreign passport or on Form I-94.

NOTE: INS has replaced Forms I-151, AR-3 and AR-3a. If a lawful permanent resident presents one of these old INS forms as evidence of status, contact INS using a G-845S and attach the old card.

An American Indian Born in Canada is considered to be lawfully admitted for permanent residence if he or she is of at least one-half American Indian blood. Documentation to be used includes birth or baptismal certificate issued on a reservation, tribal records, letter from the Canadian Department of Indian Affairs or school records.

2. Refugees

INS Form I-94 annotated with stamp showing entry as refugee under §207 of the Immigration and Naturalization Act (INA) and date of entry to the United States; INS Form I-688B annotated 274a.12(a)(3); I-766 annotated A3; or

3. Asylees

INS Form I-94 annotated with stamp showing grant of asylum under §208 of the INA; a grant letter from the Asylum Office of the INS; Form I-688B annotated 274a.12(a)(5); I-766 annotated A5; or an order of an Immigration Judge granting asylum. If the applicant provides a court order contact INS using a G-845S and attach a copy of the court order.

4. Alien who has had deportation withheld under §243(h) of the INA

Order of an Immigration Judge showing deportation withheld under §243(h) or §241(b)(3) and date of the grant; Form I-688B annotated 274a.12(a)(10); or I-766 annotated A10. If applicant provides a court order contact INS using G-845S and attach copy of court order.

5. Parolees

INS Form I-94 annotated with stamp showing grant of parole under §212(d)(5) of the INA and a date showing granting of parole for at least 1 year. INS Form I-688B annotated 274a.12(a)(4) or 274a.12(c)(11) or I-766 annotated A4 or C11 indicates status as a parolee but does not reflect the length of the parole period.

6. Conditional Entrant

INS Form I-94 annotated with stamp showing admission under §203(a)(7) of the INA, refugee-conditional entry; Forms I-688B annotated 274a.12(a)(3); or I-766 annotated A-3.

7. Evidence of Honorable Discharge or Active Duty Status

· Discharge - a copy of the veteran's discharge papers issued by the branch of service in which the applicant was a member. (Department of Defense Form 214)

· Active Duty Military - a copy of the applicant's current orders showing the individual is on full-time duty in the U.S. Army, Navy, Air Force, Marine Corps, or Coast Guard or an active military identification card, DD Form 2. Full time National Guard duty is excluded.

· A self declaration under penalty may be accepted pending receipt of acceptable documentation. The individual is given 30 days to produce evidence; and, if the individual is otherwise eligible, Medicaid is provided during this 30 day period.

8. Cuban and Haitian entrants

I-551 annotated CH6, CNP, CU6, CU7; I-688B annotated 274a.12(a)(4); I-94 annotated 212(d)(5)

9. Amerasian

I-94 annotated AM1, AM2, AM3; I-551 annotated AM1, AM2, AM3.

10. Battered Immigrant

In order to be a qualified alien based on battery or extreme cruelty, the alien must meet the requirements of 10.1. through 10.4 below:

10.1 the alien must not now be residing in the same household as the individual responsible for the battery or extreme cruelty

10.2 the alien or the alien's child has been battered or subjected to extreme cruelty in the U.S. by a spouse or parent of the alien, or by a member of the spouse's or parent's family residing in the same household as the alien, but only if the spouse or parent consents to or acquiesces in such battery or cruelty and, in the case of a battered child, the alien did not actively participate in the battery or cruelty

10.3. there is a substantial connection between the battery or extreme cruelty and the need for the public benefit sought. There is a substantial connection under any one or more of the following circumstances:

a) Where the benefits are needed to enable the alien and/or the alien's child to become self-sufficient following separation from the abuser;

b) Where the benefits are needed to enable the alien and/or the alien's child to escape the abuser and/or the community in which the abuser lives, or to ensure the safety of the alien and/or his or her child from the abuser;

c) Where the benefits are needed due to a loss of financial support resulting from the alien's and/or his or her child's separation from the abuser;

d) Where the benefits are needed because the battery or cruelty, separation from the abuser, or work absence or lower job performance resulting from the battery or extreme cruelty or from legal proceedings relating to the

INS Form I-551 with the code S13; unexpired temporary I-551 stamp with code S13 in a Canadian passport or on Form I-94; satisfactory evidence of birth in Canada and a document that indicates the percentage of American Indian blood in the form of a birth certificate issued by the Canadian reservation or a record issued by the tribe; a membership card or other tribal document showing membership in the tribe that is on the list of recognized Indian tribes published annually by the Bureau of Indian Affairs in the Federal Register.

IX. Common Immigration Terms

1. Immigrant

A general term for new arrivals, this includes legal immigrants, refugees, asylees, parolees, and others. Legal immigrants are granted admission to the U.S. on the basis
of family relation or job skill.

2. Nonimmigrant

An alien allowed to enter the U.S. for a specific purpose and for a limited period of time such as a student, visitor, or tourist.

3. Refugee

A person who flees his or her country due to persecution or a well-founded fear of persecution because of race, religion, nationality, political opinion, or membership in a social group.

4. Asylee

Similar to a refugee, this is a person who seeks asylum and is already present in the U.S. when he or she requests permission to stay.

5. Parolee

The Justice Department has discretionary authority to permit certain persons or groups to enter the U.S. in an emergency or because it serves an overriding public interest. Parole may be granted for humanitarian, legal, or medical reasons. Some persons who fear persecution are "paroled" into the U.S. as refugees when the number of refugees allowed to enter that year has been exceeded.

6. Alien not lawfully present in the U.S.

Also known as an undocumented immigrant, this is someone who enters or lives in the U.S. without official authorization, either by entering without inspection by the INS, overstaying their visa, or violating the terms of their visa.

7. Cuban/Haitian entrants

This category was created for the Cuban and Haitian arrivals in 1980, who were allowed to obtain work permits.

8. PRUCOL

Permanently residing under color of law is not a method for entering the country, but indicates that an individual is legally present under statutory authority and may remain under administrative discretion. PRUCOL is no longer an eligibility classification under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. (PRWORA)

Some legal immigrants come to the U.S. with the aid of citizens who serve as their sponsors. That sponsor signs an affidavit of support agreeing to help support and sustain the immigrant. Deeming means that the income and resources of the sponsor and his or her spouse are deemed or considered available when determining the sponsored alien's eligibility.

10. Affidavit of Support

An affidavit of support is the contract that an immigrant's sponsor signs, agreeing to financially assist the immigrant to prevent him or her from becoming a public charge. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 make affidavits of support legally binding documents and are enforceable until the immigrant naturalizes.

11. Public Charge

Immigrants who become dependent upon public assistance, fail to find employment, and are unlikely to be self-supporting in the future may be deported on the grounds that they have become a "public charge."

12. Naturalization

Naturalization is the process by which a foreign-born individual becomes a citizen of the U.S. Naturalization requires that the person be over 18 years old, lawfully admitted to the U.S., reside in the country continuously for five years, and have a basic knowledge of English, American government, and U.S. history. There is an exemption from the English and civics requirements for certain disabled immigrants.

301.10 Aid to Families with Dependent Children (AFDC)

A BETTER CHANCE

Any family who is determined eligible, by the Public Assistance Units, for Aid to Families with Dependent Children (AFDC) or Aid to the Unemployed (AU) is also eligible for Medicaid coverage.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193, amended title IV-A of the Social Security Act to repeal the Aid to Families with Dependent Children (AFDC) program. The AFDC program provided an entitlement to cash assistance for eligible families with dependent children. The Personal
Responsibility and Work Opportunity Reconciliation Act (PRWORA) replaces AFDC with a program of block grants to States for Temporary Assistance for Needy Families (TANF). Under TANF, States have broad flexibility to provide assistance to needy families. Delaware implemented its TANF program, A Better Chance, on March 10, 1997.

Before the passage of PRWORA, anyone receiving cash assistance under AFDC was automatically entitled to Medicaid. Under the new law, families receiving assistance under the block grant (TANF) are not automatically entitled to Medicaid. A new Medicaid eligibility group for low income families with children is established by Section 1931 of the Social Security Act as added by section 114 of PRWORA. These families will receive Medicaid if they meet the AFDC eligibility criteria in effect as of 7/16/96. The eligibility criteria for this new group is described in Section 301.15.

Section 1931 also gives States more flexibility in determining Medicaid eligibility. Delaware has used the authority in Section 1931 to keep the rules for A Better Chance and for Medicaid consistent and use a single application form to determine eligibility. This means that any family eligible for and receiving cash assistance under A Better Chance is also eligible for Medicaid under Section 1931 without having to complete a separate Medicaid eligibility determination.

The beginning date for Medicaid eligibility is generally the same as for the AFDC ABC case with the following exceptions:

1. In cases where the cash assistance payment is prorated from the date of eligibility, the Medicaid effective date will be the first of that prorated month. The Medicaid state plan provides for full month eligibility.

2. Effective January 1, 1991, any infant born to a mother receiving Medicaid is also eligible for Medicaid effective the date of birth. The baby remains continuously eligible for one year provided the infant remains in the mother's household and the woman remains eligible or would be eligible if she were pregnant.

3. In cases where the family has unpaid medical bills in any of the three months prior to their month of application for cash assistance and would have been eligible if they had applied in that month, Medicaid may be provided for that month. Effective January 1, 1996, retroactive coverage is not available if, in the month of application, the family is eligible for enrollment into managed care. (see Section 306.40).

Transitional Medicaid

If a family becomes ineligible for Medicaid under this eligibility group because of either employment reasons or child support payments, determine if the family is eligible for extended Medicaid coverage under Section 301.55 or 301.60.

301.15 LOW INCOME FAMILIES WITH CHILDREN

UNDER SECTION 1931

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193, added Section 1931 of the Social Security Act. Section 1931 establishes a new Medicaid eligibility group for low income families with children. Coverage for this mandatory categorically needy group of families with children is effective March 10, 1997, the date that Delaware's TANF plan was approved.

Section 1931 defines the basic criteria for determining Medicaid eligibility based upon AFDC eligibility criteria. The criteria includes income and resource standards and methodologies as in effect on July 16, 1996, and deprivation and specified relative rules that were in effect on that date. Section 1931 gives states flexibility to change these criteria. Delaware has amended its Medicaid state plan to provide that the rules used to determine eligibility under this group are the same as the rules used to determine eligibility under ABC.

Families who are eligible for Medicaid under Section 1931 may be receiving ABC cash assistance or may be Medicaid only families.

Technical Eligibility

Applicants must meet general technical eligibility criteria such as state residency, citizenship or qualified alien status, Social Security number, assignment of rights, etc., as described in Section 200.

In addition to the general technical eligibility requirements, the family composition rules of the ABC cash assistance program must be met. The family must include a child who is living with a parent or specified
relative. A child is an individual under the age of 18 or under age 19 and who is still a full-time student in high school, GED, or equivalent program and will graduate prior to his or her 19th birthday.

To be eligible for Medicaid under Section 1931, a child must be living in the home of a relative by blood, marriage, or adoption who is within the fifth degree of kinship to the child. The degree of relationship is as follows:

· parent (1st degree)

· grandparent (2nd degree)

· sibling (2nd degree)

· great-grandparent (3rd degree)

· uncle or aunt (3rd degree)

· nephew or niece (3rd degree)

· great-great-grandparent (4th degree)

· great-uncle or aunt (4th degree)

· first cousin (4th degree)

· great-great-great-grandparent (5th degree)

· great-great-uncle or aunt (5th degree)

· first cousin once removed (5th degree)

Any other persons named in the above groups whose relationship is one of the child's parents is established by legal adoption; the spouse of any person named in the above groups even though the marriage terminated by death or divorce.

The child must be living in the home of a parent or specified relative. The home is defined as the family setting where the child and the caretaker relative reside. The home exists as long as the relative is the responsible caretaker even if the child or the relative is temporarily absent. The rules of A Better Chance are used to determine if the child is living in the home of a parent or specified relative.

NOTE: Deprivation is not an eligibility requirement for this group. If the child is deprived of parental support, a referral to the Division of Child Support Enforcement must be made.

Financial Eligibility

Follow ABC income and resource standards and methodologies (disregards, exclusions, allocations).

Extended Medicaid

If a family becomes ineligible for Medicaid under this eligibility group because of either employment reasons or child support payments, determine if the family is eligible for extended Medicaid under Section 301.55 or 301.60.

Federal Regulation 42CFR 435.115(b)

Effective October 1, 1981, the Federal Government has declared that "no payment of aid shall be made ... for any month if the amount of such payment ... would be less than $10.00, but an individual ... to whom a payment of aid ... is denied solely by reason of this ... is deemed to be a recipient of aid..."

Therefore, anyone who would otherwise be eligible for an AFDC grant, or any person under age 18 who would otherwise be eligible for a GA grant, but who does not receive a grant because their need for assistance is less than $10.00, is eligible for Medicaid.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193, amended title IV-A of the Social Security Act to repeal the Aid to Families with Dependent Children (AFDC) program. The AFDC program provided an entitlement to cash assistance for eligible families with dependent children. The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) replaces AFDC with a program of block grants to States for Temporary Assistance for Needy Families (TANF). Under TANF, States have broad flexibility to provide assistance to needy families. Delaware implemented its TANF program, A Better Chance, on March 10, 1997.

Before the passage of PRWORA, anyone receiving cash assistance under AFDC was automatically entitled to Medicaid. Under the new law, persons receiving assistance under the block grant (TANF) are not automatically entitled to Medicaid. A new Medicaid eligibility group for low income families with children is established by Section 1931 of the Social Security Act as added by section 114 of PRWORA. These families will receive Medicaid if they meet the AFDC eligibility criteria in effect as of 7/16/96. The eligibility criteria for this new group is described in Section 301.15.

Section 1931 also gives States more flexibility in determining Medicaid eligibility. Delaware has used the authority in Section 1931 to keep the rules for A Better Chance and for Medicaid consistent and use a single application form to determine eligibility. This means that any family eligible for and receiving cash assistance under A Better Chance is also eligible for Medicaid without having to complete a separate Medicaid eligibility determination.

Anyone who is otherwise eligible for ABC cash assistance
but does not receive cash because their need for assistance is less than $10.00 is still eligible for Medicaid under Section 1931.

301.40 Deeming Cases

Federal Regulation 42 CFR 435.113, 435.122, 435.602

Any individual who is denied or loses AFDC benefits solely based on the budgeting of stepparent, grandparent, sibling, or alien sponsor income or resources may be eligible for Medicaid. An individual who is denied SSI benefits soley based on the budgeting of alien sponsor income or resources may be eligible for Medicaid.

Application Process

For AFDC deeming cases, the DSS application is used for the eligibility determination. A Medicaid application must be completed for SSI sponsor cases.

AFDC Deeming Cases

Following all AFDC rules and procedures, except for the deeming of income or resources from grandparents, stepparents, siblings, or alien sponsors, to determine Medicaid eligibility.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193, amended title IV-A of the Social Security Act to repeal the Aid to Families with Dependent Children (AFDC) program. The AFDC program provided an entitlement to cash assistance for eligible families with dependent children. The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) replaces AFDC with a program of block grants to States for Temporary Assistance for Needy Families (TANF). Under TANF, States have broad flexibility to provide assistance to needy families. Delaware implemented its TANF program, A Better Chance, on March 10, 1997.

Before the passage of PRWORA, anyone receiving cash assistance under AFDC was automatically entitled to Medicaid. Under the new law, families receiving assistance under the block grant (TANF) are not automatically entitled to Medicaid. A new Medicaid eligibility group for low income families with children is established by Section 1931 of the Social Security Act as added by section 114 of PRWORA. These families will receive Medicaid if they meet the AFDC eligibility criteria in effect as of 7/16/96. The eligibility criteria for this new group is described in Section 301.15.

Follow all rules for Medicaid under Section 1931 (same as ABC rules) except for the deeming of income or resources from grandparents, stepparents, or siblings.

Alien Sponsor cases

Many aliens with little or no income who want to become lawful permanent residents have "sponsors" who pledge to support them. A sponsor is someone who completes an affidavit of support with the Immigration and Naturalization Service (INS) to help the alien friend or relative obtain lawful permanent resident status. The sponsor's income and resources are "deemed" or considered available when determining if the alien is eligible for certain assistance programs.

An alien who files an application and is determined ineligible for cash assistance under AFDC or SSI due to sponsor deeming, may be found eligible for Medicaid. The individual must meet all technical and financial requirements of either the AFDC or SSI program without the application of sponsor deeming. The alien must be determined ineligible for AFDC or SSI solely due to sponsor deeming.

A. AFDC alien sponsor

For AFDC alien sponsor deeming cases, follow all the AFDC rules published in the Division of Social Services Policy Manual.

B. SSI alien sponsor

For SSI alien sponsor deeming cases, follow the rules of the SSI program. The alien must be aged (65 or older), blind, or disabled. If the alien is not aged, a Comprehensive Medical Report must be sent to the Medical Review Team for the disability determination. A
social summary is not required. The eligibility worker will send the medical report with a cover memo stating that the individual is claiming to be disabled under the SSI definition of disability.

Use the income and resource rules, including income disregards, described in the QMB section of this manual. (Section 307) Use the income standards of the SSI program. Effective 1/1/97, the SSI income limit is $484.00 for an individual and $726.00 for a couple. The resource limits are $2,000 for an individual and $3000 for a couple.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 requires Medicaid deeming for family sponsored immigrants who enter the U.S. on or after August 22, 1996. The deeming rules apply only to sponsors and immigrants who have signed the legally binding affidavits of support that are promulgated by the Attorney General. Sponsor deeming is required until the naturalization of the immigrant or until the sponsored immigrant can be credited with 40 qualifying quarters of work. Since family sponsored immigrants are subject to the 5 year bar on receiving benefits, there will be no new sponsor deeming for approximately 5 years.

For SSI-related Medicaid eligibility groups, use the rules of the SSI program. For AFDC-related Medicaid eligibility groups, use the rules of the ABC program.

301.55 Transitional Medicaid Coverage

The Family Support Act of 1988, PL 100-485, mandated that effective April 1, 1990, states provide health care coverage known as Transitional Medical Assistance for up to twelve months for families who become ineligible for AFDC due to increased earnings, increased hours of employment, or loss of earned income disregards. It replaces the previous four and nine month extensions. Transitional Medicaid begins with the month of ineligibility for AFDC. The month of ineligibility is defined as the month following the last month AFDC was correctly received under the State's AFDC plan. Transitional Medicaid is divided into two discrete periods that have different eligibility requirements.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), P.L. 104-193, repealed the AFDC program and replaced it with a program of block grants to states for Temporary Assistance for Needy Families (TANF). Delaware implemented its TANF program, A Better Chance (ABC), on March 10, 1997.

Prior to PRWORA, a family's eligibility for Transitional Medicaid was linked to receipt of AFDC. Under

The eligibility group described in Section 301.15, "Low Income Families with Children under Section 1931", will be referred to as "receiving Medicaid under Section 1931" throughout this section. Any family eligible for and receiving ABC benefits is also eligible for Medicaid under Section 1931 and may be found eligible for Transitional Medicaid. This means references to "Medicaid under Section 1931" also refers to families receiving ABC.

Delaware's welfare reform waiver, "A Better Chance" (ABC) includes a modification to the length of the Transitional Medicaid period. The ABC waiver extends Transitional Medicaid benefits for up to 24 months.

Families must meet the initial eligibility requirements described in this section to receive the first 12 months of coverage. Families can be eligible when their income exceeds either 185% of the standard of need or the standard of need. The standard of need used is the same as the ABC standard of need.

To continue to receive Medicaid for the second 12 months, the family's gross earned income less child care costs must be at or below 185% FPL. Family income will be budgeted prospectively.

Initial Eligibility for First Six Months

NOTE: All references to "Medicaid under Section 1931" includes families determined eligible under Section 301.15 "Low Income Families with Children under Section 1931" and families who receive ABC benefits. ABC families are also eligible for Medicaid under Section 1931.

At the time a family becomes ineligible for AFDC Medicaid under Section 1931 determine whether the family meets the following three requirements.

1. The family must have received AFDC Medicaid under Section 1931 in three of the six months immediately preceding the month the family became ineligible for AFDC Medicaid under Section 1931 .

A family is considered to have received AFDC Medicaid under Section 1931 in any month payments were correctly paid Medicaid assistance was correctly provided. This does not include payments made Medicaid assistance provided in error; payments made Medicaid assistance provided pending a hearing if the family loses the hearing and the payments Medicaid assistance provided is
recoverable as an overpayment; or payments made Medicaid assistance provided for a month of ineligibility because of administrative notice requirements. Recipients are obligated to report changes promptly. When a change is reported, the worker must review eligibility. If the change will result in ineligibility, the worker must take action to close the case. This can affect the month of ineligibility.

1. The family must have received AFDC Medicaid under Section 1931 in Delaware for three of the six months. Families who move into Delaware and who have not received three months of AFDC Medicaid under Section 1931 here are not eligible for transitional Medicaid. Transitional Medicaid benefits are not transferable from one state to another. If a family is entitled to and receives six months of transitional Medicaid benefits in another state and then moves into Delaware, they are not eligible for transitional Medicaid here.

2. The family must become ineligible for AFDC Medicaid under Section 1931 because of an increase in the hours of or increased income from the employment of the caretaker relative or because a member of the family loses the $30 and 1/3 earned income disregard or the $30 disregard.

This happens when:

· an increase in earned income (or countable earned income because of loss of disregard) makes the family ineligible or

· an increase in other income when combined with an increase in earned income (or countable earned income because of loss of disregard) makes the family ineligible.

It is assumed in a two-parent family, both parents are "caretakers" and therefore the principal wage earner would be a caretaker relative.

The following examples illustrate this requirement for a family of 4. The standard of need is $1004.

Example 1

A family has recurring monthly unearned income of $500. The mother becomes employed on June 6 and has countable earned income of $600 in June. The family is no longer eligible for

AFDC Medicaid under Section 1931 in June due to excess income that is both earned and unearned. Without the increase in earned income, the family would have remained

Example 2

The mother becomes employed on June 6 and has countable earned income of $400. At the same time, she reports that beginning in June the family will receive monthly unearned income of $1200. The family is no longer eligible for AFDC Medicaid under Section 1931 in June due to excess income that is both earned and unearned.

Since the $1200 increase in unearned income alone was sufficient to make the family ineligible for AFDC Medicaid under Section 1931, but the $400 earned income was not sufficient on its own to make the family ineligible, the family did not lose AFDC Medicaid because of the increase in earned income. The family is not eligible for transitional Medicaid.

Example 3

The family has no income. The mother becomes employed on June 6 and reports countable earned income of $900 in June. In July, one child leaves the household. As a result, the income limit for the family in July is reduced to $833. The family is no longer eligible for AFDC Medicaid under Section 1931 in July due to excess income, all of which is earned. However, the family is not eligible for transitional Medicaid because the earnings did not increase in July, the month of ineligibility for AFDC Medicaid under Section 1931.

Example 4

The mother is employed and has monthly countable earned income of $900. She reports that she no longer has to pay for day care in June because free care is available. Without child care expenses, her countable earned income increases to $1200 in June. The family is no longer eligible for AFDC Medicaid under Section 1931 in June because of excess income. The earnings did not increase in June. Her countable income increased because of the loss of a child care deduction. The family is not eligible for transitional Medicaid.

3. The family must continue to have a child living in the home.

The family must continue to have a child living in the home that meets the age requirement for AFDC Medicaid under Section 1931 ; that is, an individual under age 18, or under age 19, and and who is still a full-time student in
high school, GED, or equivalent program and will graduate prior to his or her 19th birthday. The earned income of a child that meets the age requirement is excluded. The child does not have to meet the former AFDC definition of dependent child. For AFDC purposes, a child must be both needy and deprived of parental care and support because of the absence, disability, unemployment, etc., of the parent. This means that for transitional Medicaid there is no deprivation requirement.

When the only child in the family no longer meets the age requirement, the family is no longer eligible for transitional Medicaid because there is no longer a child in the family. When one child turns age 18 or 19, but there is another child in the family, the child who turns age 18 or 19 is no longer considered a member of the transitional family unit. The rest of the family remains eligible.

Transitional Family Unit

Transitional Medicaid provides eligibility for families rather than individual eligibility. Transitional Medicaid coverage is provided to all individuals who were included in the AFDC family unit at the time the family lost AFDC became ineligible for Medicaid under Section 1931. In addition, family members who enter the household or family members who were absent but return may be found eligible.

An individual who enters the family unit (including a child born to the family during the transitional period) may be eligible for transitional Medicaid if that individual would have been included in the caretaker relative's assistance unit if the family were now applying for AFDC Medicaid under Section 1931. The rules for the composition of the assistance unit for Medicaid under Section 1931 are the same as the rules for the composition of the assistance unit for ABC. These rules are found in ABC policy at Section 3015 of the Division of Social Services Manual. The individual who enters the family must be one who could be found eligible for AFDC Medicaid under Section 1931 in their own right.

The transitional family includes:

· family members who were in the AFDC Medicaid under Section 1931 assistance unit when the AFDC Medicaid under Section 1931 was terminated, and

· family members who have since entered the household and who would be included in the assistance unit if the family were applying for AFDC Medicaid under Section 1931 in the current month.

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

Example

A grandmother is payee for her two grandchildren. They have been receiving AFDC Medicaid under Section 1931 for two years. The children's mother has been in prison during this period. She is released from prison and returns to the home. She becomes payee for the children and herself. Within two months, she becomes employed and her earnings cause AFDC Medicaid ineligibility. Is the family eligible for transitional Medicaid?

No. The family (Mom and two children) did not receive AFDC Medicaid in three of the six preceding months.

Example

A mother and her child are receiving transitional Medicaid. The father of the child returns to the home in the second 12 month period. How does his return to the home affect the family's continued eligibility for transitional Medicaid?

Since AFDC policy requires that a natural father be included in the assistance unit, the father is considered to be a member of the family unit for transitional Medicaid. We must use the family composition rules for Medicaid under Section 1931. The family composition rules for Medicaid under Section 1931 are the same as the family composition rules for ABC. The natural father must be included in the assistance unit .His earnings are considered in determining if the family's earned income exceeds 185% of the federal poverty level (FPL). If the family remains eligible, the father is also eligible for transitional Medicaid.

Example

A mother receiving transitional Medicaid gives birth and the baby is deemed eligible. Is the baby counted when establishing family size for purposes of the 185% FPL test?

Yes.

Sanctioned Individuals

Individuals who are under any AFDC sanction may be included as part of the transitional family during both the
first and second 12-month periods. This includes:

· individuals who have not received 3 out of 6 months prior to the month of ineligibility (i.e., were not included on the grant) because of a sanction, and

· sanctioned individuals who are not on the grant in the month of ineligibility for AFDC.

Individuals who are under any ABC sanction are eligible for Medicaid under Section 1931. These individuals are included in the transitional family.

Eligibility Determination

Families who lose AFDC Medicaid under Section 1931 because of earnings or loss of earned income disregards are eligible for transitional Medicaid when their income exceeds either 185% of the standard of need OR the standard of need. The standard of need is the same as the ABC standard of need.

NUMBER OF 185% OF THE STANDARD OF

PEOPLE IN STANDARD OF NEED (75% FPL)**

BUDGET NEED*

1 $ 912 $ 493

2 1,228 664

3 1,541 833

4 1,857 1,004

5 2,170 1,173

6 2,484 1,343

7 2,800 1,514

8 3,115 1,684

* Add $318 per person above eight in the family

** Add $170 per person above eight in the family

Example

185% Standard of Need $1,541 Standard of Need $833

Mrs. Johnson receives AFDC Medicaid under Section 1931. She earns $7.00 per hour and works 40 hours per week. Her monthly income is $1212.40 ($7.00 x 40 x 4.33). She has been receiving the 30 and 1/3 disregard. Budget follows:

$1212.40 monthly earned income

- 90.00 earned income deduction

1122.40

- 30.00 $30 disregard

1092.40

- 364.13 1/3 disregard

Her income does not change but she will lose 1/3 disregard effective December. Without the 1/3 disregard her countable income is $1092.40. This exceeds the standard of need of $833 and the family is ineligible for Medicaid under Section 1931 because of earnings. The family is eligible for transitional Medicaid beginning December 1.

Month of Ineligibility for AFDC Medicaid under Section 1931

Transitional Medicaid begins with the month following the last month in which AFDC was correctly received. An AFDC payment is not correctly received when it is recoverable as an overpayment.

If ineligibility results because of an increase in income, the worker determines if income received in the month it began was enough to make the family unit totally ineligible. If so, the payment must be recovered in an overpayment. Anytime ineligibility occurs after the first day of the month because of increased income, the case must be closed effective the following month. When the change is reported too late in the month to allow advance notice, the case is closed effective the next month.

Transitional Medicaid begins with the month of ineligibility for Medicaid under Section 1931 due to an increase in income or loss of earned income disregards. The month of ineligibility for Medicaid is the month in which the family's income exceeds either 185% of the standard of need or the standard of need. The standard of need for Medicaid under Section 1931 is the same as the ABC standard of need.

Example: Ms. Smith reports a new job on November 3 and is determined prospectively ineligible. She is also ineligible for November. The family income exceeds the standard of need. Transitional Medicaid begins in November because that is the month AFDC the family income exceeds the standard of need for Medicaid under Section 1931 .

Example: Ms. Little begin working November 27 and reports to her worker promptly. The family is determined prospectively ineligible for ABC and Medicaid under Section 1931 for December. Because of advance notice requirements, the case is closed on December 31. The transitional Medicaid period begins in December because December is the month of ineligibility for AFDC the family income exceeds the standard of need.

Someone who is not timely in reporting the start of
employment or increased wages could have their family's transitional benefits reduced so that they only receive the 24 months of transitional coverage from when they should have been closed. But, we will not totally disqualify a family.

Example: Mrs. Thomas begins working on April 15, 1996. She does not report her job until she receives her first pay on May 25. Because of advance notice requirements, her case is not closed until June 30, 1996. She should have reported April 15 and her AFDC case would have been closed April 30, 1996. The family income exceeds the standard of need in May. The transitional Medicaid should begin on May 1, 1996, and finish April 30, 1998.

Eligibility During the First 12-Month Period

The family will receive Transitional Medicaid without any reapplication for the first 12 months. The family must be notified at the time of the termination of AFDC when they lose eligibility for Medicaid under Section 1931 that they are eligible for transitional Medicaid and the reasons why the benefits could be terminated. DCIS will automatically notify AFDC transitional Medicaid families and issue a card for the AFDC family members. The notice will include this information about termination of benefits.

To continue to receive Medicaid throughout the first 12-month period the following conditions must be met in addition to the initial eligibility requirements:

there is a child living in the home.

The rules of ABC are used to determine if a child is living in the home. When it is determined that a family no longer has a child living in the home, the family is no longer eligible under this program. The case must be reviewed to determine if the family members are eligible for Medicaid under another program.

Eligibility During Second 12-Month Period

A redetermination of eligibility must be completed at the end of the first 12-month period. To continue to receive Medicaid during the second 12-month period, the following conditions must be met in addition to the initial eligibility requirements:

1. there is a child living in the home, and

2. the caretaker relative is employed during each month unless good cause exists, and

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

There are no limits on necessary child care costs. Prospective budgeting is used to determine family income. Do not add unearned income to earned income. Count the earned income of all family members (except the earned income of a dependent child, regardless of student status) living in the home who were members of the family unit the month the family became ineligible for AFDC Medicaid under Section 1931 and any individual who would be included in the caretaker relative's assistance unit if the family were now applying for AFDC Medicaid under Section 1931.

Income Limits for Second 12 Months

Family Size Income Limit $

1 1,217

2 1,636

3 2,056

4 2,475

5 2,894

6 3,314

7 3,733

8 4,152

9 4,572

10 4,991

Good cause for terminating employment is:

1. Circumstances beyond the individual's control such as but not limited to illness, illness of another family member requiring the wage earner's presence, a household emergency, the unavailability of transportation, and the lack of adequate child care.

2. Instances in which employment was unsuitable such as:

· wages offered less than the Federal minimum wage,

· employment on a piece-rate basis and the average hourly yield the employee receives is less than the Federal minimum wage,

· unreasonable degree of risk to one's health and safety,

· the individual is physically or mentally unfit to perform the employment as documented by medical evidence or reliable information from other sources,

· the distance from the individual's house to place of employment is unreasonable considering the expected wage and the time and cost of commuting,

· the working hours or nature of employment interferes
with the members religious observance, convictions or beliefs.

3. Discrimination by an employer based on age, race, sex, disability, religious belief, national origin, or political belief.

4. Work demands or conditions that are unreasonable such as working without being paid on schedule.

5. Acceptance of other employment or enrollment at least half-time in a school, training program, or college.

6. Resignations by persons under the age of 60 that are recognized by the employer as retirement.

7. Leaving a job in connection with patterns of employment in which workers move from one employer to another as in migrant farm labor or construction work.

24-month Period of Eligibility

A family gets 24 months of transitional Medicaid from the month of ineligibility for AFDC Medicaid under Section 1931, even if they become eligible again for AFDC Medicaid under Section 1931. The clock on the 24-month period does not stop running when AFDC eligibility for Medicaid under Section 1931 is reestablished. The 24 months of transitional Medicaid run concurrently with months of AFDC eligibility for Medicaid under Section 1931.

If the family is again loses eligibility for AFDC Medicaid under Section 1931 for non-work reasons, the transitional benefit period is unaffected. If the family is terminated again for earned income reasons, a new transitional period may begin.

Example 1

A mother and her children have received AFDC Medicaid under Section 1931 continuously since April 1997. Mom becomes employed and loses AFDC eligibility for Medicaid under Section 1931 effective October 1997 due to earned income. The family is determined eligible for transitional Medicaid effective October. In December she loses her job and applies for AFDC ABC. She is approved for AFDC ABC effective January 1998. She is also eligible for Medicaid under Section 1931. She becomes employed again in February and her earned income causes her to be ineligible for AFDC Medicaid under Section 1931 in February. Does the family continue with the original transitional period?

DELAWARE REGISTER OF REGULATIONS, VOL. 1, ISSUE 8, SUNDAY, FEBRUARY 1, 1998

Example 2

A family is determined eligible for transitional Medicaid from 11/1/96 to 10/31/98. The mother is employed for the entire period. The family becomes eligible for AFDC Medicaid under Section 1931 during May and June 1997. The family becomes ineligible for AFDC Medicaid under Section 1931 due to wages effective July. Does the family continue with the original transitional period?

Yes. The family is not eligible for a new transitional Medicaid period because the family did not receive Medicaid under Section 1931 in the six months preceding the month of ineligibility (July). The family continues to be eligible for the original transitional Medicaid period.

Example 3

A family has been receiving AFDC Medicaid under Section 1931 from June 1997 to October 1997. The AFDC Medicaid under Section 1931 is closed for earned income and transitional Medicaid begins November 1997. In December Mom loses her job and the family is opened in AFDC ABC. The family is also eligible for Medicaid under Section 1931. In January 1998 Mom is approved for Social Security and the AFDC ABC case and Medicaid under Section 1931 are closed 1/31/98. Is the family eligible for transitional Medicaid?

Yes. The family continues with the transitional Medicaid period that began in November 1997.

Reporting Requirements

The Social Security Act at §1925 describes the reporting requirements under Transitional Medicaid.

Effective 11/1/95 Delaware's welfare reform program "A Better Chance" eliminated monthly reporting requirements for AFDC families and the Section 1115 Medicaid Demonstration Waiver, "Diamond State Health Plan" eliminated the quarterly reporting requirements for Transitional Medicaid. Instead, families are required to report significant changes in circumstances. A significant
change in circumstances is as follows:

· change in household size

· a new job

· a change from full-time to part-time employment

· loss of employment

· an increase or decrease of forty hours in employment per month

· a new unearned income

· unearned income goes up or down more than $50.00 per month

NOTE: Changes in unearned income do not affect continued eligibility for transitional Medicaid.

The eligibility requirements for transitional Medicaid remain the same; however, the family does not have to meet the reporting requirements described at §1925 of the Social Security Act.

Termination of Benefits

First 12-month period

Medicaid benefits will be terminated if:

1. The family no longer has a child living in the home. Use the definition for child as defined under AFDC Section 1931 Medicaid. A child is under age 18 or is under age 19 and who is still a full-time student in high school, GED, or equivalent program and will graduate prior to his or her 19th birthday.

2. The family is found to have received AFDC Medicaid under Section 1931 "fraudulently" in the preceding six months. Fraud is defined at the end of this section.

Second 12 month period

Medicaid benefits will be terminated if:

1. The famly no longer has a child (defined above) living in the home.

2. The caretaker relative is no longer employed and good cause does not apply.

3. The family's monthly gross earned income minus child care costs exceeds 185% FPL.

We must explore eligibility for any other Medicaid program before transitional Medicaid is terminated.

Notices

Fraud

Section 1925(d) of the Social Security Act specifies that extended Medicaid must not be granted to any individual who has committed fraud during the last 6 months in which the family was receiving aid before otherwise being provided extended Medicaid eligibility. been legally determined by the Medicaid agency to be ineligible for Medicaid under Section 1931 because of fraud at any time during the last prior six months in which the family received Medicaid under Section 1931. The fraud determinations are subject to the fraud and program abuse provisions under Sections 1128, 1128A, and 1128B of the Social Security Act.

Under the AFDC program, a determination of fraud must be made following a hearing. Under Medicaid, a conviction for fraud must be made by a court of competent jurisdiction.

For purposes of the exclusion from transitional Medicaid, an individual is considered to have been convicted of a criminal offense:

when a judgment of conviction has been entered against the individual by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the judgment of conviction or other record relating to criminal conduct has been expunged;

when there has been a finding of guilt against the individual by a Federal, State, or local court;

when a plea of guilty or nolo contendere by the individual has been accepted by a Federal, State, or local court; or

when the individual has entered into participation in a first offender or other program where judgment of conviction has been withheld.

301.60 Prospective Program (Child Support)

42 CFR 435.115(f),(g),(h)

Section 406(h) of the Social Security Act

An individual will be deemed to be receiving AFDC if a
new collection or increased collection of child or spousal support under title IV-D of the Social Security Act results in the termination of AFDC eligibility according to section 406(h) of the Social Security Act. This regulation also covers families that do not receive a grant because their need is below $10.00. Medicaid will be continued for four consecutive calendar months, beginning with the first month of AFDC ineligibility, to each dependent child and each relative with whom such a child is living (including the eligible spouse of such relative) who:

· becomes ineligible for AFDC on or after August 16, 1984; and

· has received AFDC for at least three of the six months immediately preceding the month in which the individual becomes ineligible for AFDC; and

· becomes ineligible for AFDC wholly or partly as a result of new or increased child or spousal support collections under title IV-D.

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), P.L. 104-193, repealed the AFDC program and replaced it with a program of block grants to states for Temporary Assistance for Needy Families (TANF). Prior to PRWORA, a family's eligibility for Prospective Medicaid was linked to receipt of AFDC. Under PRWORA, a family's eligibility for Prospective Medicaid is linked to receipt of Medicaid under Section 301.15, "Low Income Families with Children under Section 1931.

NOTE: All references to Medicaid under Section 1931 also include families who receive ABC benefits. ABC families are also eligible for Medicaid under Section 1931.

Medicaid eligibility is extended for four consecutive months to families who become ineligible for Medicaid under Section 1931 because of a new or increased collection of child or spousal support under title IV-D of the Social Security Act.

Collection of Support

Regulations require that the collection of support made by absent parents and spouses be paid directly to the IV-D agency; the Division of Child Support Enforcement (DCSE). AFDC Medicaid recipients occasionally receive child or spousal support directly. Extended Medicaid coverage will be provided when collections of child or spousal support that are received by the assistance unit are turned over to the DCSE. Support payments that are not forwarded to the DCSE do not constitute a "collection" under title IV-D; therefore, the family would not be eligible for prospective Medicaid. The amount of support ordered

Eligibility Determination

The family is eligible if the collected support exceeds 185% of the standard of need or the standard of need. The collection of support must actually

cause or actively contribute to ineligibility for AFDC, even if there are other factors that also contribute to ineligibility or could simultaneously cause it.

At the time the family becomes ineligible for Medicaid under Section 1931,

determine whether the family meets the following three requirements:

1. The family has received Medicaid under Section 1931 in three of the six months immediately preceding the month the family became ineligible for Medicaid under Section 1931.

2. The family lost eligibility for Medicaid under Section 1931 wholly or partly as a result of new or increased child or spousal support collections under title IV-D. The family is eligible if the collected support exceeds 185% of the ABC standard of need or the ABC standard of need. The collection of support must actually cause or actively contribute to ineligibility for Medicaid under Section 1931, even if there are other factors that also contribute to ineligibility or could simultaneously cause it.

Example

An family receives $300 in countable child support collections and $400 in Social Security benefits. The standard of need is $833. In the next month both the child support collection and the Social Security benefit increase by $150, for a total increase of $300 a month. The family is ineligible for AFDC Medicaid under Section 1931 due to the child support collection because the change in support by itself, when added to the unchanged Social Security would cause ineligibility for AFDC Medicaid under Section 1931. The family is eligible for extended Medicaid.

Example

An family receives $750 in countable child support collections and the standard of need is $1004. In the next month, the countable child support collection increases to $900 and at the same time one of the older children leaves home. As a result, the standard of need is reduced to $833. The countable child support collection of $900 exceeds
the new standard of need of $833. The family is eligible for extended Medicaid, since the collection of child support increased and contributed to the ineligibility for AFDC Medicaid under Section 1931. The reduction in the standard of need worked in combination with the increased support collection to cause the ineligibility. Thus, the support collection contributed to the family's ineligibility for AFDC Medicaid under Section 1931. Neither change would have caused ineligibility by itself.

However, suppose that in this example the $750 in support collection was raised to $900 and the $1004 standard of need was reduced to $664. In this case, the increase in support collection would have no effect on eligibility for AFDC Medicaid under Section 1931. That is because the change in the standard of need would have caused ineligibility for AFDC Medicaid under Section 1931 even before the child support collection was raised from $750 to $900. Because the change in the support collection did not cause or contribute to ineligibility for AFDC Medicaid under Section 1931, the family would not be eligible for prospective Medicaid.

3. The family must continue to have a dependent child living in the home.

The family must continue to have a child living in the home that meets the age requirement for Medicaid under Section 1931; that is, an individual under age 18 or under age 19, and who is still a full-time student in high school, GED, or equivalent program and will graduate prior to his or her 19^th birthday.

Month of Ineligibility for AFDC Medicaid under Section 1931

Families are eligible for prospective Medicaid beginning with the month of ineligibility for Medicaid under Section 1931 due to a new or increased collection of support. The month of ineligibility for Medicaid under Section 1931 is the month in which the family's income exceeds either 185% of the standard of need or the standard of need. The standard of need for Medicaid under Section 1931 is the same as the ABC standard of need.

If a family's ineligibility for an AFDC grant Medicaid under Section 1931 is a result of the collection or increased collection of support and employment or increased earnings, review the file to determine which factor caused the ineligibility. If the collection of support was the determining factor the family will qualify for four months of continued coverage. If it is determined that earnings caused the ineligibility, the family will qualify for up to 24 months of continued coverage under transitional

Family Unit

All members of the family unit who were eligible for AFDC Medicaid under Section 1931 are eligible for the four months continued coverage. In addition, family members who enter or return to the household are eligible for prospective Medicaid if that individual would have been included in the assistance unit if the family were now applying for AFDC Medicaid under Section 1931. Individuals under an ABC sanction are eligible for Medicaid under Section 1931 any may be found eligible for the four month extension. If a member of the family is added to an existing AFDC assistance unit that is receiving Medicaid under Section 1931 and the mother receives an increase in support the same month the member is added, that member is entitled to four months of continued Medicaid. A child born to the family during the fourmonth period will also be covered through the end of the four month period. Remember a child born to a Medicaid mother is deemed eligible for one year.

A person or family who becomes ineligible during the fourmonth period for reasons other than the collection or increased collection of support (such as a child who attains age 18 or a family member who leaves the household) will not be entitled to continued coverage beyond the date of ineligibility.

Prospective Medicaid ends for any individual family member who moves to another state. Coverage ends the month following the month the individual moves to the new state. Eligibility can be reinstated if the individual returns during the four-month period. For example, if the family moved to another state in March, the first month of prospective Medicaid, and moved back in May, the family would again be eligible for prospective coverage in May and June.

There is no requirement that a member of the family be employed throughout the fourmonth period.

—END OF MANUALS—

Comments or requests for copies of proposed changes or relevant materials may be made in writing to: Medicaid Administrative Offices, Division of Social Service, P.O.
Box 906, New Castle, DE 19720, attention: Thelma G. Mayer, or by calling (302) 577-4880, extension 131, or may be viewed at the following locations: New Castle County: Medicaid Office, Lewis Bldg., Herman M. Holloway, Sr. Health & Social Services Campus, 1901 N. DuPont Hwy., New Castle, DE, 19720; Kent County: Medicaid Unit, Division of Social Services, Williams State Service Center, 805 River Rd., Dover, DE 19901; Sussex County: Medicaid Unit, Division of Social Services, Georgetown State Service Center, 546 S. Bedford St., Georgetown, DE, 19947. Comments, written suggestions, compilations of data, testimony, briefs or other written materials concerning the proposed change must be received by mail no later than March 1, 1998, at the Medicaid Administrative Office, Lewis Bldg., Herman M. Holloway, Sr. Health & Social Services Campus, 1901 N. DuPont Hwy., New Castle, DE 19720, attention Thelma Mayer. Materials filed thereafter will not be considered except where good cause for lateness is demonstrated. Copies of all written submissions filed with the Medicaid office will be available for public inspection in the Medicaid Administrative Office at the address given above. Please call (302) 577-4800, ext.131 for an appointment if you wish to review the materials. Individuals with disabilities who wish to participate in these proceedings, or review the materials submitted, should contact the Division to discuss auxiliary aids or services needed to facilitate such review or participation. Such contact may be in person, in writing or by telephone by using the Telecommunications Relay Service, or otherwise.

Delaware Securities Act

Statutory Authority: 6 Delaware Code,

Sections 7306(a)(17), 7307, 7309(b)(2), 7309(b)(9), 7309(c), 7309A(f), 7312, 7314(b)(4), 7317(c), 7325(b) (6 Del.C. §§7306(a)(17); 7307; 7309(b)(2), (b)(9), (c); 7309A(f); 7312, 7314(b)(4), 7317(c), 7325(b))

NOTICE OF ISSUANCE OF

PROPOSED RULES AND REGULATIONS

PURSUANT TO THE DELAWARE SECURITIES ACT

The Securities Commissioner is issuing for notice and comment proposed rules and regulations pursuant to the Delaware Securities Act. The proposed rules and regulations are intended to replace the current regulations and cover the following subject areas:

B. Practice and Procedure in Administrative Hearings

C. Investigations

D. Securities Registration and Notice Filings

E. Exemptions from Registration

F. Broker-Dealers, Broker-Dealer Agents and Issuer Agents

G. Investment Advisers and Investment Adviser Representatives

The proposed rules and regulations are issued pursuant to the authority granted in 6 Del. C. §§7306(a)(17), 7307, 7309(b)(2), 7309(b)(9), 7309(c), 7309A(f), 7312, 7314(b)(4), 7317(c) and 7325(b).

Comments may be presented in writing to the attention of Charles F. Walker, Securities Commissioner, State of Delaware Department of Justice, 820 N. French Street, Wilmington, Delaware, 19801. Comments must be received no later than 5:00 p.m. on March 5, 1998, for consideration.

Attachments:

Index to Proposed Rules and Regulations

Text of Proposed Rules and Regulations

Cross-reference to Existing Regulations

INDEX TO PROPOSED RULES AND REGULATIONS

PROPOSED RULES AND REGULATIONS PURSUANT TO THE DELAWARE SECURITIES ACT

Part A. Organization and Functions of the Securities Division

100 General Statement and Statutory Authority

101 Regulatory Functions

102 General Organization

103 Administrative Hearing Officers

Part B. Practice and Procedure in Administrative Hearings

General Rules

200 Construction of Rules of Practice and Procedure

201 Appearance and Practice in Administrative Proceedings

202 Business Hours

203 Delegated Authority of Administrative Hearing Officer

204 Disqualification and Recusal of Administrative Hearing Officer

205 Ex Parte Communications

206 Orders and Decisions of Administrative Hearing Officer

Service and Filing of Papers

210 Service of Papers by Parties

211 Filing of Papers with the Commissioner: Procedure

212 Filing of Papers: Form

213 Filing of Papers: Signature Requirement and Effect

214 Computation of Time

Pleadings and Prehearing Practice

220 Complaints: General

221 Complaints: Form and Content

222 Complaints: Amendment and Withdrawal

223 Order Delegating Authority to Hearing Officer

224 Answers to Complaints

225 Request for Hearing

226 Prehearing Conferences

227 Prehearing Submissions

228 Disclosure of Evidence by the Parties

229 Production of Witness Statements

230 Motions

231 Motions for Summary Disposition

232 Default; Motion to Set Aside Default

Administrative Hearings

240 Hearings

241 Hearings Open to the Public

242 Continuance of Hearing

243 Procedure

244 Testimony

245 Evidence: Admissibility

246 Evidence: Objections and Offers of Proof

247 Evidence: Reference to Delaware Uniform Rules of Evidence

248 Proposed Findings of Fact, Conclusions of Law and Post-Hearing Briefs

249 Record of Hearings

250 Supplementation of Record

251 Decision of Administrative Hearing Officer

252 Failure to Appear at Hearing: Default

253 Contemptuous Conduct

Practice and Procedure Regarding Summary Orders Issued Pursuant to Sections 7308(c), 7309(c), 7316(c) and Section 7325(c) of the Act

260 Basis for Issuance of Summary Order Postponing or Suspending the Effectiveness of a Registration

Statement Pursuant to Section 7308(c)

261 Basis for Issuance of Summary Order Denying or Revoking Exemption Pursuant to Section 7309(c)

262 Basis for Issuance of Summary Order Postponing or Suspending the Registration of a Broker-Dealer,

To Section 7316(c)

263 Basis for Issuance of Summary Cease and Desist Order Pursuant to Section 7325(c)

264 Application for Issuance of Summary Order

265 Procedure After Issuance of Order

266 Violation of Cease and Desist Order

Appeal to the Court of Chancery

270 Right to Judicial Review

271 Procedure

272 Application to the Court for Leave to Adduce Additional Material Evidence

Part C. Investigations

300 Scope of Rules Regarding Investigations

301 Nature and Purpose of Investigations

302 Information Obtained in Investigations

303 Rights of Witnesses

304 Subpoenas

305 Testimony Under Oath

306 Production of Things and Documents

307 Written Submissions by Interested Persons

Part D. Securities Registration and Notice Filings

400 Registration by Coordination

401 Registration by Qualification

402 Small Company Offering Registration

403 Notice Filings for Offerings of Investment Company Securities

404 Fees

405 Quarterly Reports on Registered Securities

406 Filing of Sales Literature

407 Notice Filings for SEC Regulation D Offerings

Part E. Exemptions from Registration

500 Exemptions for Federal Covered Securities

501 Designated Exchange Exemption

502 Limited Offering Exemption

503 Accredited Investor Exemption

504 World Class Issuer Exemption

505 Offers of Securities through the Internet

506 Claim of Exemption by Persons Organized Not for Private Profit but Exclusively for

Religious Purposes

507 Claim of Exemption for Nine-Month Commercial Paper

508 Recognized Securities Manuals

509 Unsolicited Sales

510 Transactional Exemption for Certain Institutional
Buyers

511 Confirmation of Availability of Exemption

Part F. Broker-Dealers, Broker-Dealer Agents and Issuer Agents

600 Registration of Broker-Dealers

601 Registration of Broker-Dealer Agents

602 Registration of Issuer Agents

603 Continuing Obligation of Registrants to Keep Information Current

604 Minimum Financial Requirements and Financial Reporting Requirements of Broker-Dealers

605 Bonding Requirements of Intrastate Broker-Dealers

606 Recordkeeping Requirements of Broker-Dealers

607 Use of the Internet for General Dissemination of Information on Products and Services

608 Registration Exemption for Certain Canadian Broker-Dealers

609 Prohibited Practices

Part G. Investment Advisers and Investment Adviser Representatives

700 Registration of Investment Advisers

701 Registration of Investment Adviser Representatives

702 Notice Filing Requirements for Federal Covered Advisers

703 Continuing Obligation of Registrants to Keep Information Current

704 Minimum Financial Requirements for Investment Advisers

705 Bonding Requirements of Certain Investment Advisers

706 Recordkeeping Requirements of Investment Advisers

707 Use of the Internet for General Dissemination of Information on Products and Services

708 Custody of Client Funds or Securities

709 Prohibited Practices

* Please note that the above page numbers refer to the original document, not to pages in the Register.

PROPOSED RULES AND REGULATIONS PURSUANT TO THE DELAWARE SECURITIES ACT

Part A. Organization and Functions of the Securities Division

§100 General Statement and Statutory Authority

(a) Public disclosure of pertinent facts concerning public offerings of securities to Delaware investors, and protection of the interests of those investors in connection with the offer and sale of securities.

(b) Investigation of securities frauds, manipulations and other violations, and the imposition and enforcement of legal sanctions therefor.

(c) Registration and the regulation of certain activities of broker-dealers, broker-dealer agents and issuer agents.

(d) Registration and the regulation of certain activities of state-registered investment advisers and investment adviser representatives.

(e) Administrative sanctions, injunctive and other equitable remedies, and criminal prosecution. There are also private rights of action for investors injured by violations of the Act.

§101 Regulatory Functions

Following is a brief description of the Securities Division's regulatory functions under the Delaware Securities Act:

(a) Securities Registration and Notice Filings. (1) It is unlawful for any person to sell a security in Delaware unless that security is registered; or the security or transaction is exempt under Section 7309 of the Act; or the security is a federal covered security for which a notice filing has been made pursuant to Section 7309A of the Act. Securities for which a federal registration statement has been filed under the Securities Act of 1933 may be registered by coordination under Section 7305. Any security may be registered by qualification under Section 7306. Notice filings are required for federal covered securities offered or sold to Delaware investors. A stop order prohibiting the offering of a security, or suspending or revoking the effectiveness of a registration statement, may be issued where the offeror has made a material misstatement or omission in connection with that offer, or otherwise where the public interest so dictates and the
statutory criteria of Section 7308 are met. Any registrant or offeror subject to such an order is entitled to a hearing under the Act. Registration or the filing of a notice filing is not a finding by the Commissioner as to the accuracy of the facts disclosed; and it is unlawful to so represent. Moreover, registration of securities or the filing of a notice filing does not imply approval of the issue by the Commissioner or insure investors against loss in their investment, but serves rather to provide information upon which investors may make an informed and realistic evaluation of the worth of the securities.

(2) Persons responsible for filing false information with the Commissioner or otherwise disseminating false and misleading information in connection with the purchase or sale of securities subject themselves to the risk of fine or imprisonment or both; and the issuing company, its directors, officers, and the underwriters and dealers and others may be liable in damages to purchasers of registered securities if disclosures are materially defective. In addition, the statute contains antifraud provisions which apply generally to the sale of securities, whether or not registered.

(b) Registration and Licensing of Broker-Dealers, Broker-Dealer Agents and Issuer Agents. The Act provides for registration with, and regulation by, the Commissioner of broker-dealers, broker-dealer agents and issuer agents. Registrations must be renewed annually. The activities of broker-dealers, broker-dealer agents and issuer agents in the conduct of their business are subject to the standards of the Act, which include a prohibition on dishonest or unethical practices within or outside the State, and which make unlawful those practices which would constitute fraud or deceit. Applications for registration may be denied, and registration may be suspended or revoked, where the public interest so dictates and the statutory criteria of Section 7316 are met. Any registrant subject to such an order is entitled to a hearing under the Act. Respondents in disciplinary hearings under Section 7316 may also be subject to fines, costs, orders requiring restitution and/or disgorgement, and other orders in the public interest, as well as criminal prosecution under Section 7322.

(c) Registration and Licensing of Investment Advisers and Investment Adviser Representatives; Notice Filings for Federal Covered Advisers. The Act provides that persons who, for compensation, engage in the business of advising others with respect to securities transactions must register with the Commissioner unless they are registered with the Securities and Exchange Commission ("SEC") or otherwise exempted from registration under the Act. Federal covered advisers (those registered with the SEC) who have a place of business in Delaware or who had more than five Delaware

§102 General Organization

(a) The Securities Division is part of the Fraud Division of the State Department of Justice. In addition to the Securities Commissioner, the Securities Division has a staff which includes lawyers, a securities analyst, investigators and examiners, as well as administrative and clerical employees. The Securities Commissioner and other staff members shall perform, in addition to their duties under the Securities Act, such additional duties as the Attorney General may assign from time to time.

(b) The Securities Division is a statewide office with authority over all three counties in Delaware. The Securities Commissioner is located at 820 North French Street, Wilmington, Delaware, 19801. The telephone number is (302) 577-8424. The Securities Division's Kent County mailing address is 45 The Green, Dover, Delaware, 19901.

(c) Enforcement activities are conducted and supervised by Deputy Attorneys General assigned to the Division with the assistance of staff securities investigators. Administrative and injunctive actions may be instituted and prosecuted by a Deputy Attorney General after review and determination that there exists sufficient evidence to support the allegations in any proposed complaint. Criminal charges may be presented to the Grand Jury for indictment after review by the Director of the Fraud Division and/or the State Prosecutor.

(d) Registration and renewal of securities filings are reviewed by the Securities Division for adherence to standards of reporting and financial disclosure under the Securities Act, as well as substantive business requirements
of the Act. The staff also reviews exempt securities filings for compliance with the exemptive provisions of Section 7309 and the disclosure requirements of the Act.

(e) Registration of broker-dealers, broker-dealer agents, issuer agents, investment advisers and investment adviser representatives is conducted by staff members in the Division's Firm/Agent Registration Section, with review and oversight by the Securities Commissioner and other Deputy Attorneys General.

(f) Compliance audits and examinations of state-registered investment advisers are undertaken by the Division's investment adviser examiners on a periodic basis. Special examinations of both broker-dealers and investment advisers may also be undertaken by the staff. Access to all books and records is required in any examination pursuant to Section 7315 of the Act. The Securities Division may cooperate, by joint examination or otherwise, with the securities administrators of other states, the SEC, and any other national securities exchange or national securities association registered under the Securities Exchange Act of 1934.

(g) The Securities Division is also responsible for the Attorney General's investor education program. The Program includes, but is not limited to:

(1) Presenting seminars and instructional programs to educate investors about the securities markets and their rights as investors; preparing and distributing to the public materials describing the operations of the securities markets, prudent investor behavior, and the rights of investors in disputes they may have with individuals and entities regulated by the Commissioner; and increasing public knowledge of the functions of the Securities Division.

(2) Providing information to investors who inquire about individuals and entities regulated by the Commissioner, the operation of the securities markets, or the functions of the Securities Division.

(h) The Securities Division provides written interpretative opinions under the Act in response to written requests. Requests for interpretative opinions should be addressed to the Commissioner and accompanied by a fee of $75.00 payable to the State of Delaware. Interpretations may be requested regarding any section of the Act or any rule or regulation adopted thereunder.

§103 Administrative Hearing Officers

(a) Pursuant to Section 7325(b) of the Act, the Securities Commissioner hereby delegates to an administrative hearing officer the authority to preside in any administrative proceeding brought under the Securities Act. The administrative hearing officer shall have, with respect to any such proceeding, all powers and duties as are possessed by the Securities Commissioner when presiding over a proceeding under the Delaware

(b) The administrative hearing officer shall be designated by the Attorney General or Chief Deputy Attorney General. The administrative hearing officer may be a Deputy Attorney General (other than a Deputy Attorney General assigned to the Securities Division) or any other attorney admitted to practice law in the State of Delaware.

(c) The Rules of Practice and Procedure in Administrative Hearings (Sections 200-272) shall govern all proceedings by and before the administrative hearing officer.

Part B. Practice and Procedure in Administrative Hearings

General Rules

§200 Construction of Rules of Practice and Procedure

(a) Unless otherwise provided, these Rules of Practice govern proceedings before administrative hearing officers under the Delaware Securities Act. These rules do not apply to investigations by the Securities Division, which are governed by Part C of the Rules and Regulations.

(b) The Rules of Practice shall be construed and administered to secure the just, speedy, and inexpensive determination of every proceeding.

(c) In any particular proceeding, to the extent that there is a conflict between these rules and a procedural requirement contained in any statute, the latter shall control.

(d) For purposes of these rules: (1) any term in the singular includes the plural, and any term in the plural includes the singular, if such use would be appropriate; (2) any use of a masculine, feminine, or neuter gender encompasses such other genders as would be appropriate; and (3) unless the context requires otherwise, counsel for a party may take any action required or permitted to be taken by such party.

§201 Appearance and Practice in Administrative Proceedings

A person shall not be represented before a hearing officer except as stated in paragraphs (a) and (b) of this section or as otherwise permitted by the hearing officer:

(a) Representing oneself. In any proceeding, an individual may appear on his or her own behalf.

(b) Representing others. In any proceeding, a person may be represented by an attorney at law admitted to practice before the Supreme Court of the State of
Delaware. Attorneys who are not members of the Delaware Bar may be admitted pro hac vice pursuant to Rule 72 of the Rules of the Supreme Court of the State of Delaware.

(c) Requirement of Delaware Counsel. Pursuant to Rule 72(a) of the Delaware Supreme Court Rules, attorneys who are not members of the Delaware Bar may be admitted pro hac vice in a proceeding in the discretion of the administrative hearing officer upon written motion by a member of the Delaware Bar who maintains an office in this State for the practice of law ("Delaware Counsel"). Pursuant to Delaware Supreme Court Rule 72(c), Delaware Counsel for any party shall appear in the matter for which admission pro hac vice is filed and shall sign or receive service of all notices, orders, pleadings or other papers filed in the matter and shall attend all proceedings before the administrative hearing officer, unless excused by that hearing officer.

(d) Designation of address for service; notice of appearance; power of attorney; withdrawal.

(1) Representing oneself. When an individual first makes any filing or otherwise appears on his or her own behalf before a hearing officer in a proceeding, he or she shall file with the Commissioner or otherwise state on the record, and keep current, an address at which any notice or other written communication required to be served upon him or her or furnished to him or her may be sent and a telephone number where he or she may be reached during business hours.

(2) Representing others. When a person first makes any filing or otherwise appears in a representative capacity before a hearing officer in a proceeding, that person shall file with the Commissioner, and keep current, a written notice stating the name of the proceeding; the representative's name, business address and telephone number; and the name and address of the person or persons represented.

(3) Power of attorney. Any individual appearing or practicing before a hearing officer in a representative capacity may be required to file a power of attorney with the Commissioner showing his or her authority to act in such capacity.

(4) Withdrawal. Withdrawal by any individual appearing in a representative capacity shall be permitted only by written order of the hearing officer. A motion seeking leave to withdraw shall state with specificity the reasons for such withdrawal.

(e) Public Hearings. All hearings shall be public unless otherwise ordered by the hearing officer on his own motion or after considering the motion of a party.

§202 Business Hours

The office of the Securities Division, at 820 North French Street, Wilmington, Delaware, 19801, is open

§203 Delegated Authority of Administrative Hearing Officer

The administrative hearing officer, as designated by the Attorney General or Chief Deputy Attorney General under §103 of these Rules, holds delegated authority to preside in any administrative proceeding brought under the Securities Act and shall have in any such proceeding all powers and duties as are possessed by the Securities Commissioner when presiding over a proceeding under the Delaware Securities Act, and any order issued by the administrative hearing officer shall constitute an order of the Commissioner for purposes of judicial review under Section 7324 of the Act.

§204 Disqualification and Recusal of Administrative Hearing Officer

(a) Notice of disqualification. At any time a hearing officer believes himself or herself to be disqualified from considering a matter, the hearing officer shall issue a notice stating that he or she is withdrawing from the matter and setting forth the reasons therefor.

(b) Motion for Withdrawal. Any party who has a reasonable, good faith basis to believe that a hearing officer has a personal bias, or is otherwise disqualified from hearing a case, may make a motion to the hearing officer that the hearing officer withdraw. The motion shall be accompanied by an affidavit setting forth in detail the facts alleged to constitute grounds for disqualification. If the hearing officer finds himself or herself not disqualified, he or she shall so rule and shall continue to preside over the proceeding.

§205 Ex Parte Communications

Unless on notice and opportunity for all parties to participate, or to the extent required for the disposition of ex parte matters as authorized by Sections 7308(c), 7309(c), 7316(c) and/or 7325(c) of the Act:

(a) No party, or counsel to or representative of a party, shall make or knowingly cause to be made an ex parte communication relevant to the merits of a proceeding to the administrative hearing officer with respect to that proceeding.

(b) No administrative hearing officer with respect
to a proceeding shall make or knowingly cause to be made to a party, or counsel to or representative of a party, an ex parte communication relevant to the merits of that proceeding.

§206 Orders and Decisions of Administrative Hearing Officer

(a) Availability for inspection. Each order and decision shall be available for inspection by the public from the date of entry, unless the order or decision is nonpublic. A nonpublic order or decision shall be available for inspection by any person entitled to inspect it from the date of entry.

(b) Date of entry of orders. The date of entry of an order shall be the date the order is signed. Such date shall be reflected in the caption of the order, or if there is no caption, in the order itself.

Service and Filing of Papers

§210 Service of Papers by Parties

(a) When required. In every administrative proceeding, each paper, including each notice of appearance, written motion, brief, or other written communication, shall be served upon each party in the proceeding in accordance with the provisions of this section; provided, however, that absent an order to the contrary, no service shall be required for motions which may be heard ex parte.

(b) Upon a person represented by counsel. Whenever service is required to be made upon a person represented by counsel who has filed a notice of appearance pursuant to §201, service shall be made pursuant to paragraph (c) of this section upon counsel, unless service upon the person represented is ordered by the hearing officer.

(c) How made. Service shall be made by delivering a copy of the filing. Delivery means:

(1) Personal service by handing a copy to the person required to be served; or leaving a copy at the person's office with a clerk or other person in charge thereof, or, if there is no one in charge, leaving it in a conspicuous place therein; or, if the office is closed, or the person to be served has no office, leaving it at the person's dwelling house or usual place of abode with some person of suitable age and discretion then residing therein;

(2) Mailing the papers through the U.S. Postal Service by first class, registered, or certified mail or Express Mail delivery addressed to the person;

(3) Sending the papers through a commercial courier service or express delivery service; or

(4) Transmitting the papers by facsimile machine where the following conditions are met:

(i) The persons serving each other by

(ii) Receipt of each document served by facsimile is confirmed by a manually signed receipt delivered by facsimile machine or other means agreed to by the parties.

(d) When service is complete. Personal service, service by U.S. Postal Express Mail or service by commercial courier or express delivery service is complete upon delivery. Service by mail is complete upon mailing. Service by facsimile is complete upon confirmation of transmission by delivery of a manually signed receipt.

§211 Filing of Papers With the Commissioner: Procedures

(a) When to file. All papers required to be served by a party upon any person shall be filed with the Commissioner at the time of service or promptly thereafter. Papers required to be filed with the Commissioner must be received within the time limit, if any, for such filings.

(b) Where to file. Filing of papers with the Commissioner shall be made by filing the original papers with the Commissioner and one (1) copy with the hearing officer.

(c) To whom to direct the filing. All motions, objections, applications or other filings made during a proceeding shall be directed to and decided by the hearing officer.

(d) Certificate of Service. Papers filed with the Commissioner and the hearing officer shall be accompanied by a certificate stating the name of the person or persons served, the date of service, the method of service and the mailing address or facsimile telephone number to which service was made, if not made in person.

§212 Filing of Papers: Form

(a) Specifications. Papers filed in connection with any administrative proceeding shall:

(1) Be on one grade of unglazed white paper measuring 8-1/2 x 11 inches, except that, to the extent that the reduction of larger documents would render them illegible, such documents may be filed on larger paper;

(2) Be typewritten or printed in either ten or twelve-point typeface or otherwise reproduced by a process that produces permanent and plainly legible copies;

(3) Include at the head of the paper, or on a title page, the title of the proceeding, the names of the parties,
the subject of the particular paper or pleading, and the file number assigned to the proceeding;

(4) Be paginated with left hand margins at least one inch wide, and other margins of at least one inch;

(5) Be double-spaced, with single-spaced footnotes and single-spaced indented quotations; and

(6) Be stapled, clipped or otherwise fastened in the upper left corner.

(b) Signature required. All papers must be dated and signed as provided in §213.

(c) Suitability for recordkeeping. Documents which, in the opinion of the Commissioner, are not suitable for computer scanning or microfilming may be rejected.

(d) Form of briefs. All briefs containing more than ten pages shall include a table of contents, an alphabetized table of cases, a table of statutes, and a table of other authorities cited, with references to the pages of the brief wherein they are cited.

(e) Scandalous or impertinent matter. Any scandalous or impertinent matter contained in any brief or pleading or in connection with any oral presentation in a proceeding may be stricken on order of the hearing officer.

§213 Filing of Papers: Signature Requirement and Effect

(a) General requirements. Every filing of a party represented by counsel shall be signed by Delaware Counsel of record in his or her name and shall state that counsel's business address and telephone number. A party who acts as his or her own counsel shall sign his or her individual name and state his or her address and telephone number on every filing.

(b) Effect of signature. (1) The signature of a counsel or party shall constitute a certification that:

(i) the person signing the filing has read the filing;

(ii) to the best of his or her knowledge, information and belief, formed after reasonable inquiry, the filing is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and

(iii) the filing is not made for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of adjudication.

(2) If a filing is not signed, the hearing officer shall strike the filing, unless it is signed promptly after the omission is called to the attention of the person making the filing.

§214 Computation of Time

(a) Computation. In computing any period of time prescribed in or allowed by these Rules of Practice or by order of the hearing officer, the day of the act, event or

(b) Additional time for service by mail. If service is made by mail, three days shall be added to the prescribed period for response.

Pleadings and Prehearing Practice

§220 Complaints: General

If the Securities Division believes that any person is violating or has violated any provision of the Delaware Securities Act or any rule or regulation thereunder, it may issue a complaint as set forth in Rule 221. The complaint shall be served on each party as provided in Rule 210 and filed at the time of service with the Securities Commissioner pursuant to Rule 211. The service and filing of the complaint constitutes the commencement of the administrative proceeding.

§221 Complaints: Form and Content

Each complaint shall be in writing and signed by a Deputy Attorney General . The complaint shall specify in reasonable detail the conduct alleged to constitute the violative activity and the statutory provision, rule or regulation the respondent is alleged to be violating or to have violated. If the complaint consists of several causes of action, each cause shall be stated separately.

§222 Complaints: Amendment and Withdrawal

(a) At any time prior to the filing of a responsive pleading or the commencement of a hearing (whichever is earlier), the Securities Division may amend a complaint to include new matters of fact or law. After the filing of a responsive pleading or the commencement of a hearing, upon motion by the Securities Division, the hearing officer may permit amendment of a complaint to include new matters of fact or law.

(b) At any time prior to the filing of a responsive pleading or the commencement of a hearing (whichever is earlier), the Securities Division may withdraw its complaint. Such withdrawal shall be without prejudice to
refiling, and the Securities Division shall be permitted to file a complaint based on allegations concerning the same facts and circumstances that are set forth in the withdrawn complaint. The Securities Division may withdraw its complaint after the filing of a responsive pleading or commencement of a hearing; however, upon motion of the respondent, the hearing officer, after considering the facts and circumstances of the withdrawal, shall determine whether the withdrawal shall be with prejudice.

§223 Order Delegating Authority to Hearing Officer

In each case in which a complaint is filed pursuant to Rule 211, the Securities Commissioner shall promptly file and serve on the parties an order delegating authority to an administrative hearing officer pursuant to Rule 103.

§224 Answers to Complaints

(a) Form, Service, Notice. Each respondent named in a complaint shall answer and serve an answer to the complaint on the Securities Division and all other parties within 25 days after service of the complaint on such respondent pursuant to Rule 210 and at the time of service file such answer with the hearing officer pursuant to Rules 211, 212 and 213. The hearing officer may extend such period for good cause.

(b) Content, Affirmative Defenses. Unless otherwise ordered by the hearing officer, an answer shall specifically admit, deny, or state that the respondent does not have and is unable to obtain sufficient information to admit or deny each allegation in the complaint. When a respondent intends to deny only part of an allegation, the respondent shall specify so much of it as is admitted and deny only the remainder. A statement of lack of information shall be deemed a denial. Any allegation not denied shall be deemed admitted. Any affirmative defense shall be asserted in the answer.

(c) Amendments to Answer. Upon motion by a respondent, the hearing officer may permit an answer to be amended.

(d) Extension of Time to Answer Amended Complaint. If a complaint is amended pursuant to Rule 222, the time for filing an answer or amended answer shall be extended to 10 days after service of the amended complaint. If any respondent has already filed an answer, such respondent shall have 15 days after service of the amended complaint, unless otherwise ordered by the hearing officer, within which to file an amended answer.

(e) Failure to Answer, Default. If the respondent does not file an answer within the time required, the hearing officer shall order the Securities Division to send a second notice to such respondent requiring an answer within 10 days after service of the second notice, or within such longer period as the hearing officer in his or her discretion may order. The second notice shall state that

(1) treat as admitted by the respondent the allegations in the complaint; and

(2) enter a default decision against the respondent pursuant to Rule 232(a). If no answer is filed with the hearing officer within the time required by the second notice, the allegations of the complaint may be considered admitted by such respondent and a default decision may be issued by the hearing officer. A respondent may, for good cause shown, move to set aside a default pursuant to Rule 232(b).

§225 Request for Hearing

(a) Securities Division Request for Hearing. With the filing of its complaint or at any time later, the Securities Division may request a hearing. The Securities Division may request that the hearing be convened within a specified time after the filing of the complaint, but in no event shall that hearing be required to be held earlier than 30 days after service and filing of the complaint other than in summary proceedings under Sections 7308(c), 7309(c), 7316(c) or 7325(c) of the Act.

(b) Respondent Request for Hearing. With the filing of respondent's answer such respondent may request a hearing. If a respondent requests a hearing, a hearing shall be granted. A respondent who fails to request a hearing with the filing of his or her answer waives the right to a hearing unless the hearing officer grants, for good cause shown, a later filed motion by such respondent requesting a hearing.

(c) Hearing Officer Order Requiring Hearing. Any complaint may be set down for a hearing upon order of the hearing officer. The hearing officer may set a complaint for hearing in the absence of a request for hearing by any party.

(d) Notice of Hearing. The hearing officer shall issue a notice stating the date, time and place of the hearing, and shall serve such notice on the parties at least 28 days before the hearing, unless (1) in the discretion of the hearing officer, he or she determines that extraordinary circumstances require a shorter notice period; or (2) the parties waive the notice period.

§226 Prehearing Conferences

(a) Purpose of conferences. The purpose of prehearing conferences include, but are not limited to:

(1) Expediting the disposition of the proceeding;

(2) Establishing early and continuing control of the proceeding by the hearing officer; and

(3) Improving the quality of the hearing through more thorough preparation.

(b) Procedure. On his or her own motion or at the
request of a party, the hearing officer may, in his or her discretion, direct counsel or any party to meet for an initial, final or other prehearing conference. Such conferences may be held with or without the hearing officer present as the hearing officer deems appropriate. Where such a conference is held outside the presence of the hearing officer, the hearing officer shall be advised promptly by the parties of any agreements reached. Such conferences also may be held with one or more persons participating by telephone or other remote means.

(c) Subjects to be discussed. At a prehearing conference consideration may be given and action taken with respect to any and all of the following:

(1) Simplification and clarification of the issues;

(2) Exchange of witness and exhibit lists and copies of exhibits;

(3) Stipulations, admissions of fact, and stipulations concerning the contents, authenticity or admissibility into evidence of documents;

(4) Matters of which official notice may be taken;

(5) The schedule for exchanging prehearing motions or briefs, if any;

(6) The method of service for papers;

(7) Summary disposition of any or all issues;

(8) Settlement of any or all issues;

(9) Determination of hearing dates;

(10) Amendments to the complaint or answers thereto;

(11) Disclosure of evidence by the parties as set forth in Rule 228 and production of witness statements as set forth in Rule 229; and

(12) Such other matters as may aid in the orderly and expeditious disposition of the proceeding.

(d) Prehearing orders. At or following the conclusion of any conference held pursuant to this section, the hearing officer shall enter a ruling or order which recites the agreements reached and any procedural determinations made by the hearing officer.

(e) Failure to appear: default. Any person who is named as a respondent in a complaint and who fails to appear, in person or through a representative, at a prehearing conference of which he or she has been duly notified may be deemed in default pursuant to Rule 232(a). A party may make a motion to set aside a default pursuant to Rule 232(b).

§227 Prehearing Submissions

(a) Submissions generally. The hearing officer, on his or her own motion, or at the request of a party or other participant, may order any party, including the Securities Division, to furnish such information as deemed appropriate, including any or all of the following:

(1) An outline or narrative summary of its case or

(2) The legal theories upon which it will rely;

(3) Copies and a list of documents that it intends to introduce at the hearing; and

(4) A list of witnesses who will testify on its behalf, including the witnesses' names, occupations, addresses and a brief summary of their expected testimony.

(b) Expert witnesses. Each party who intends to call an expert witness shall submit, in addition to the information required by paragraph (a)(4) of this section, a statement of the expert's qualifications, a listing of other proceedings in which the expert has given expert testimony, and a list of publications authored or co-authored by the expert.

§228 Disclosure of Evidence by the Parties

(a) Disclosure of Evidence by the Securities Division. Upon request of a respondent, the Securities Division shall disclose to respondent and make available for inspection, copying or photographing:

(1) Any relevant written or recorded statements made by the respondent or co-respondent, or copies thereof, within the possession, custody or control of the Securities Division, the existence of which is known, or by the exercise of due diligence may become known, to the Securities Division; and that portion of any written record containing the substance of any relevant oral statement made by the respondent in response to interrogation by any person then known to the respondent to be a state agent. Where the respondent is a corporation, partnership or association, the Securities Division shall disclose any written or recorded statements of any witness who (i) was, at the time of that testimony, so situated as an officer or employee as to have been able legally to bind the respondent in respect to conduct constituting the offense, or (ii) was, at the time of the offense, personally involved in the alleged conduct constituting the offense and so situated as an officer or employee as to have been able legally to bind the respondent in respect to that alleged conduct in which the witness was involved.

(2) Documents and tangible objects. Upon request of the respondent the Securities Division shall permit the respondent to inspect and copy or photograph books, papers, documents, photographs, tangible objects, buildings or places, or copies or portions thereof, which are within the possession, custody or control of the Securities Division, and which are intended for use by the Securities Division as evidence in chief at the hearing, or were obtained from or belong to the respondent.

(3) Reports of examinations and tests. Upon request of a respondent, the Securities Division shall permit respondent to inspect and copy or photograph any results or reports of physical or mental examinations, and
of scientific tests or experiments, or copies thereof, which are within the possession, custody or control of the Securities Division, the existence of which is known, or by the exercise of due diligence may become known, to the Securities Division, and which are intended for use by the Securities Division as evidence in chief at the hearing.

(4) Expert witnesses. Upon request of a respondent, the Securities Division shall disclose to the respondent any evidence which the Division may present at the hearing, which if presented at a court proceeding would be submitted pursuant to Rules 702, 703, or 705 of the Delaware Uniform Rules of Evidence. This disclosure shall be in the form of a written response that includes the identity of the witness and the substance of the opinions to be expressed.

(5) Information not subject to disclosure. Except as provided in Rule 228(a)(1), (2) and (3), this rule does not authorize the discovery or inspection of reports, memoranda, or other internal documents made by the Securities Division or its agents in connection with the investigation or prosecution of the case, or of statements by Division witnesses or prospective Division witnesses.

(b) Disclosure of evidence by the respondent.

(1) Documents and tangible objects. Upon request of the Securities Division, the respondent shall permit the Division to inspect and copy or photograph books, papers, documents, photographs, tangible objects, or copies or portions thereof, which are within the possession, custody or control of the respondent and which the respondent intends to introduce as evidence in chief at the hearing.

(2) Reports of examination and tests. The respondent, on request of the Securities Division, shall permit the Division to inspect and copy or photograph any results or reports of physical or mental examinations and of scientific tests or experiments made in connection with the particular case, or copies thereof, within the possession or control of the respondent, which the respondent intends to introduce as evidence in chief at the hearing or which were prepared by a witness whom the respondent intends to call at the hearing when the results or reports relate to that witness' testimony.

(3) Expert witnesses. The respondent, on request of the Securities Division, shall disclose to the Division any evidence the respondent may present at the hearing, which if presented at a court proceeding would be submitted pursuant to Rules 702, 703 or 705 of the Delaware Uniform Rules of Evidence. This disclosure shall be in the form of a written response that includes the identity of the witnesses and the substance of the opinions to be expressed.

(4) Information not subject to disclosure. Except as to scientific or medical reports, this subdivision does not authorize the discovery or inspection of reports,

(c) Procedure. Any party may serve a request for discovery after filing of respondent's answer or, if no answer has been filed, after expiration of the period for filing an answer. The request shall set forth the items sought with reasonable particularity and shall specify a reasonable time, place and manner of compliance with the request. The party upon whom the request is served shall serve a response within 20 days after service of the request or at such other time as ordered by the hearing officer. The response shall comply with the request or specify any objection to it. The response may specify a reasonable alternative time, place and manner of compliance.

(d) Continuing duty to disclose. If, prior to or during an administrative hearing, a party discovers additional evidence or material previously requested or ordered, which is subject to discovery or inspection under this rule, such party shall promptly notify the other party or that other party's attorney or the hearing officer of the existence of the additional evidence or material.

(e) Regulation of disclosure.

(1) Protective and modifying orders. Upon a sufficient showing the hearing officer may at any time order that the disclosure or inspection be denied, restricted or deferred, or make such other order as is appropriate. Upon motion by a party, the hearing officer may permit the party to make such showing, in whole or in part, in the form of a written statement to be inspected by the hearing officer alone. If the hearing officer enters an order granting relief following such an ex parte showing, the entire text of the party's statement shall be sealed and preserved in the records of the hearing officer to be made available to the Chancery Court in the event of an appeal.

(2) Failure to comply with a request. If at any time during the course of the proceedings it is brought to the attention of the hearing officer that a party has failed to comply with this rule, the hearing officer may order such party to permit the disclosure or inspection, grant a continuance, or prohibit the party from introducing evidence not disclosed, or he may enter such other order as he deems just under the circumstances. The hearing officer may specify the time, place and manner of making the disclosure and inspection and may prescribe such terms and conditions as are just.

§229 Production of Witness Statements

Any party may file a motion requesting that any other party produce for inspection and copying a statement in its
possession, custody or control of any person called or to be called as a witness that pertain, or is expected to pertain, to his or her direct testimony, including statements that would be required to be produced pursuant to Rule 26.2 of the Delaware Superior Court Criminal Rules. The production shall be made at a time and place fixed by the hearing officer and shall be made available to all parties.

§230 Motions

(a) Generally. Unless made during a hearing or conference, a motion shall be in writing, shall state with particularity the grounds therefor, shall set forth the relief or order sought, and shall be accompanied by a written brief of the points and authorities relied upon. All written motions shall be served in accordance with Rule 210, be filed in accordance with Rule 211, meet the requirements of Rule 212, and be signed in accordance with Rule 213. The hearing officer may order that an oral motion be submitted in writing. Unless otherwise ordered by the hearing officer, if a motion is properly made, the proceeding before the hearing officer shall continue pending the determination of the motion. No oral argument shall be heard on any motion unless the hearing officer otherwise directs.

(b) Opposing and reply briefs. Briefs in opposition to a motion shall be filed within ten days after service of the motion. Reply briefs shall be filed within three days after service of the opposition.

(c) Length limitation. A brief in support of or opposition to a motion shall not exceed ten pages, exclusive of pages containing any table of contents, table of authorities, and/or addendum. Requests for leave to file briefs in excess of ten pages are disfavored.

§231 Motion for Summary Disposition

(a) After a respondent's answer has been filed and documents have been made available to that respondent for inspection and copying pursuant to Rule 228, the respondent or the Division may make a motion for summary disposition of any or all allegations of the complaint with respect to that respondent. Any motion for summary disposition shall be filed within 30 days after the filing of the respondent's answer or at such other time as ordered by the hearing officer. Notwithstanding the provisions of Rule 230, any opposition or response to a motion for summary disposition shall be filed within 14 days after service of the motion. Reply briefs shall be filed within five days after service of the opposition or response.

(b) A motion for summary disposition pursuant to paragraph (a) shall be accompanied by the following: a statement of undisputed facts; a supporting memorandum of points and authorities; and affidavits or declarations

(c) The hearing officer shall promptly grant or deny the motion for summary disposition or shall defer decision on the motion. The hearing officer may grant the motion for summary disposition if there is no genuine issue with regard to any material fact and the party making the motion is entitled to a summary disposition as a matter of law. If it appears that a party, for good cause shown, cannot present by affidavit prior to hearing facts essential to justify opposition to the motion, the hearing officer shall deny or defer the motion.

§232 Default; Motion to Set Aside Default

(a) A party to a proceeding may be deemed to be in default and the hearing officer may determine the proceeding against that party upon consideration of the record, including the complaint, the allegations of which may be deemed to be true, if that party fails:

(1) To appear, in person or through a representative, at a hearing or conference of which that party has been notified;

(2) To answer, to respond to a dispositive motion within the time provided, or otherwise to defend the proceeding; or

(3) To cure a deficient filing within the time specified by the hearing officer.

(b) A motion to set aside a default shall be made within a reasonable time, state the reasons for the failure to appear or defend, and specify the nature of the proposed defense in the proceeding. In order to prevent injustice and on such conditions as may be appropriate, the hearing officer may for good cause shown set aside a default.

Administrative Hearings

§240 Hearings

Hearings for the purpose of taking evidence shall be held upon order of the hearing officer. All hearings shall be conducted in a fair, impartial, expeditious and orderly manner.

§241 Hearings to be public

All hearings, except hearings on ex parte applications for a summary order under Sections 7308(c), 7309(c), 7316(c) or 7325(c) of the Act, shall be public unless otherwise ordered by the hearing officer on his or her own motion or the motion of a party. No hearing shall be nonpublic where all respondents request that the hearing be made public.

§242 Continuance of Hearing

Any motion for a continuance of the hearing date shall be filed as far in advance of the hearing date as practicable. Motions should state with specificity the reason for the continuance request.

§243 Procedure

(a) Unless otherwise ordered by the hearing officer, no later than three days prior to the hearing each party shall submit to all other parties and to the hearing officer copies of all documentary evidence and the names of the witnesses each party intends to present in its case-in-chief at the hearing.

(b) In the administrative hearing, each party is entitled to present its case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as, in the discretion of the hearing officer, may be required for a full and true disclosure of the facts.

§244 Testimony

Witnesses shall testify under oath or affirmation. The oath or affirmation may be administered by a Deputy Attorney General, notary public or any other officer authorized to administer oaths and affirmations under Delaware law.

§245 Evidence: Admissibility

The hearing officer shall receive relevant evidence and may exclude all evidence that is irrelevant, immaterial or unduly repetitious.

§246 Evidence: Objections and Offers of Proof

(a) Objections. Objections to the admission or exclusion of evidence must be made on the record and shall be in short form, stating the grounds relied upon. Exceptions to any ruling thereon by the hearing officer need not be noted at the time of the ruling. Such exceptions will be deemed waived on appeal to the Court of Chancery, however, unless raised in a proposed finding or conclusion filed pursuant to Rule 248.

(b) Offers of proof. Whenever evidence is excluded from the record, the party offering such evidence may make an offer of proof, which shall be included in the record. Excluded material shall be retained pursuant to Rule 249.

§247 Evidence: Reference to Delaware Uniform Rules of Evidence

The hearing officer may make reference to and be guided by the Delaware Uniform Rules of Evidence in receiving relevant evidence under Rule 245 and ruling on

§248 Proposed Findings of Fact, Conclusions of Law, and Post-Hearing Briefs

(a) At the discretion of the hearing officer, the parties may be ordered to file proposed findings of fact and conclusions of law, or post-hearing briefs, or both. The hearing officer may order that such proposed findings and conclusions be filed together with, or as part of, post-hearing briefs.

(b) Proposed findings of fact or other statements of fact in briefs shall be supported by specific references to the record.

(c) In any case in which the hearing officer has ordered the filing of proposed findings of fact and conclusions of law, or post-hearing briefs, the hearing officer shall, after consultation with the parties, prescribe the period within which proposed findings of fact and conclusions of law or post-hearing briefs are to be filed. Such period shall be reasonable under all the circumstances but the total period allowed for the filing of post-hearing submissions shall not exceed 60 days after the conclusion of the hearing unless the hearing officer, for good cause shown, permits a different period and sets forth in an order the reasons why a longer period is necessary.

(d) Unless the hearing officer orders otherwise, each post-hearing submission shall not exceed 25 pages, exclusive of cover sheets, tables of contents and tables of authorities.

§249 Record of Hearings

(a) Contents of the record. The record shall consist of:

(1) The complaint and answers thereto; the notice of hearing; and any amendments to those documents;

(2) Each application, motion, submission or other paper, and any amendments, motions, objections, and exceptions to or regarding them;

(3) Each stipulation, transcript of testimony and document or other item admitted into evidence;

(4) With respect to a request to disqualify a hearing officer or to allow the hearing officer's withdrawal under Rule 204, each affidavit or transcript of testimony taken and the decision made in connection with the request;

(5) All proposed findings and conclusions;

(6) Each written order issued by the hearing
officer; and

(7) Any other document or item accepted into the record by the hearing officer.

(b) Retention of documents not admitted. Any document offered in evidence but excluded, and any document marked for identification but not offered as an exhibit, shall not be considered a part of the record but shall be retained until the later of the date upon which an order ending the proceeding becomes final, or the conclusion of any judicial review of the hearing officer's order.

(c) Substitution of copies. A true copy of a document may be substituted for any document in the record or any document retained pursuant to paragraph (b) of this section.

§250 Supplementation of Record

Upon motion filed within ten days of the conclusion of the hearing, any party may seek leave from the hearing officer to supplement the record with additional relevant material evidence. Where the party shows to the satisfaction of the hearing officer that there were reasonable grounds for failure to adduce the evidence in the hearing, the hearing officer may allow the evidence to be heard in such manner and upon such conditions as the hearing officer considers proper.

§251 Decision of Administrative Hearing Officer

In any administrative proceeding in which a hearing is held, the hearing officer shall issue a decision. The decision shall include: (i) findings of fact and conclusions of law, and the reasons or basis therefor, as to all material issues of fact, law or discretion presented on the record; (ii) the appropriate order, sanction or relief, or denial thereof; (iii) a statement that the decision constitutes a final order for purposes of judicial review under Section 7324 of the Act; and (iv) the date on which sanctions, if any, take effect.

§252 Failure to Appear at Hearing: Default

Any respondent who fails to appear at a hearing of which he or she has been duly notified may be deemed to be in default pursuant to Rule 232(a). A party may make a motion to set aside a default pursuant to Rule 232(b).

§253 Contemptuous Conduct

If a party, counsel to a party or witness engages in conduct in violation of an order of the hearing officer, or other contemptuous conduct during an administrative proceeding, the hearing officer may impose sanctions therefor, including the issuance of an order: (i) excluding the party and/or his or her counsel from any further participation in the proceeding; (ii) striking pleadings or evidence from the record; (iii) providing that certain facts

Practice and Procedure Regarding Summary Orders Issued Pursuant to Sections 7308(c), 7309(c), 7316(c) and 7325(c) of the Act

§260 Basis for Issuance of Summary Order Postponing or Suspending the Effectiveness of a Registration Statement Pursuant to Section 7308(c)

The Securities Division may make application for, and an Administrative Hearing Officer may issue, a summary order postponing or suspending the effectiveness of any registration statement, if such an order is in the public interest and any of the following criteria are met:

(a) The registration statement as of its effective date or as of any earlier date in the case of an order denying effectiveness, or any amendment or report is incomplete in any material respect or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact;

(b) Any provision of the Act or any rule, order, or condition lawfully imposed under the Act has been violated, in connection with the offering, by (i) the person filing the registration statement, (ii) the issuer, any partner, officer, or director of the issuer, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling or controlled by the issuer, but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer, or (iii) any underwriter;

(c) The security registered or sought to be registered is the subject of an administrative stop order or similar order or permanent or temporary injunction of any court of competent jurisdiction entered under any federal or state act applicable to the offering;

(d) The issuer's enterprise or method of business includes or would include activities which are illegal where performed;

(e) The offering has worked or tended to work a fraud upon purchasers or would so operate;

(f) The offering has been or would be made with unreasonable amounts of underwriters' and sellers' discounts, commissions, or other compensation, or promoters' profits or participation, or unreasonable amounts or kinds of options;

(g) The applicant or registrant has failed to pay the proper filing fee; but the hearing officer shall vacate any such order when the deficiency has been corrected;

(h) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by Section 7305(b)(4) of the Act.

§261 Basis for Issuance of Summary Order Denying or Revoking Exemption Pursuant to Section 7309(c)

The Securities Division may make application for, and an Administrative Hearing Officer may issue, a summary order denying or revoking any exemption claimed under Sections 7309(a)(9), (a)(11), or (b)(1)-(13) of the Act, whenever it appears that such exemption is inapplicable, either generally or with respect to a specific security or transaction.

§262 Basis for Issuance of Summary Order Postponing or Suspending the Registration of a Broker-Dealer, Broker-Dealer Agent, Investment Adviser or Investment Adviser Representative Pursuant to Section 7316(c)

The Securities Division may make application for, and an Administrative Hearing Officer may issue, a summary order postponing or suspending the registration of a broker-dealer, broker-dealer agent, investment adviser or investment adviser representative if such an order is in the public interest and the applicant or registrant or, in the case of a broker-dealer or investment adviser, any partner, officer, director, or any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer or investment adviser:

(a) Has filed an application for registration which as of its effective date, or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact; or

(b) Has wilfully violated or wilfully failed to comply with any provision of the Act; or

(c) Has been convicted of a felony, infamous crime, or other crime involving moral turpitude; or

(d) Is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the securities business; or

(e) Is the subject of a cease and desist order or of an order denying, suspending, or revoking registration as a broker-dealer, broker-dealer agent, investment adviser or investment adviser representative; or

(f) Is the subject of an order entered within the past ten years by the securities administrator of any other state or by the Securities and Exchange Commission either ordering the person to cease and desist from engaging in or continuing any conduct or practice involving any aspect of the securities business, or suspending, denying or revoking registration as a broker-dealer, broker-dealer agent, investment adviser or investment adviser

(g) Has engaged in dishonest or unethical practices within or outside this State; or

(h) Is insolvent, either in the sense that his liabilities exceed his assets or in the sense that he cannot meet his obligations as they mature; or

(i) Is not qualified on the basis of such factors as training, experience, and knowledge of the securities business; or

(j) Has failed reasonably to supervise (1) his agents or employees, if he is a broker-dealer or broker-dealer agent with supervisory responsibilities; or (2) his adviser representatives or employees if he is an investment adviser or investment adviser representative with supervisory responsibilities, and such failure may be inferred from an agent's, investment adviser representative's, or employee's violations;

(k) Has failed to pay the proper filing fee, but the hearing officer shall vacate any denial or suspension order when the deficiency has been corrected; or

(l) Has violated or failed to comply with any lawful order issued by the Commissioner or by an Administrative Hearing Officer acting pursuant to delegated authority under Rule 103; or

(m) Has within the past ten years been a partner, officer, director, controlling person or any person occupying a similar status or performing similar functions in a broker-dealer or investment adviser whose registration in this State or any state, or with the SEC, has been revoked for disciplinary reasons, or whose membership in a national securities exchange or national securities association has been terminated for disciplinary reasons.

§263 Basis for Issuance of Summary Cease and Desist Order

Whenever it appears that a person has violated the Delaware Securities Act by failing to register or engaging in fraud or other prohibited conduct, an Administrative Hearing Officer may summarily issue a cease and desist order against that person under Section 7325(c) of the Act.

§264 Application for Issuance of Summary Order

(a) Procedure. A request for entry of a summary order shall be made by application filed by the Division.
The application shall set forth the statutory provision or rule that each respondent is alleged to have violated; the temporary relief sought against each respondent; and whether the relief is sought ex parte.

(b) Accompanying documents. The application shall be accompanied by a declaration of facts signed by a person with knowledge of the facts contained therein, a memorandum of points and authorities, a proposed order imposing the temporary relief sought, and, unless relief is sought ex parte, a proposed notice of hearing and order to show cause whether the temporary relief should be imposed. If a proceeding for a permanent order has not already been commenced, a complaint instituting proceedings to determine whether a permanent order should be imposed shall also be filed with the application or as soon thereafter as practicable.

(c) Record of proceedings. A record from which a verbatim transcript can be prepared shall be made of all hearings, including ex parte presentations made by the Division.

§265 Procedure After Issuance of Order

(a) Notice. Any person who is the subject of a summary order shall promptly be given notice of that order and of the reasons therefor. Notice shall be given by means reasonably calculated to give actual notice of issuance of the order, including telephone notification and service of the order pursuant to Rule 210. Such notice shall include notification that the subject of the order may request a hearing and that if such a request is made in writing the hearing shall be scheduled within 15 days from the date the written request is received.

(b) Request for hearing. Any person who is the subject of a summary order may request a hearing before an administrative hearing officer on an application to set aside, limit or suspend the summary order. That hearing shall be scheduled within 15 days from the date the written request is received.

(c) Procedure at hearing. The procedure at a hearing on a summary order shall be determined by the hearing officer, with the understanding that each party shall be entitled to be heard in person or through counsel. The hearing officer shall rule on the admissibility of evidence and other matters, including, but not limited to whether oral testimony will be heard; the time allowed each party for the submission of evidence or argument; and whether post-hearing submission of briefs and/or proposed findings of fact and conclusions of law will be permitted and if so, the procedures for submissions.

(d) Decision of Hearing Officer. After hearing evidence pursuant to subsection (c) of this Rule, the hearing officer shall issue a decision on respondent's application to set aside, limit or suspend the order, and may grant or deny that application; modify or vacate the

(e) Duration. Unless set aside, limited or suspended, either by the hearing officer or a court of competent jurisdiction, a summary order shall remain in effect until the completion of the proceedings on whether a permanent order shall be entered or, if no such proceedings occur, until otherwise modified or vacated by the hearing officer.

§266 Violation of Cease and Desist Orders

If any person who is the subject of a cease and desist order, or any agent or employee of such person, subsequent to the issuance of the order engages in the prohibited conduct, the Commissioner may certify the facts and apply for a contempt order to any Judge of the Superior Court, who shall upon such application hear the evidence as to the acts complained of. If the evidence warrants, the Judge shall punish such person, in the same manner and to the same extent as for a contempt committed before the Superior Court, or shall commit such person upon the same conditions as if the doing of the forbidden act had occurred with reference to the process of, or in the presence of, the Superior Court.

Appeal to the Court of Chancery

§270 Right to Judicial Review

Any person aggrieved by an order of the administrative hearing officer may obtain a review of the order in the Court of Chancery. Upon review, the Court of Chancery has the authority to determine questions of law de novo. The factual findings of the hearing officer, if supported by material and substantial evidence, shall be conclusive on the Court of Chancery. The filing of a complaint seeking review does not operate as a stay of the hearing officer's order unless specifically ordered by the Court.

§271 Procedure

A party seeking review must file a written complaint with the Court of Chancery within 60 days of entry of the hearing officer's order. The complaint shall be forthwith served on the hearing officer and the other parties to the administrative proceeding. The party seeking review must pay the costs of transcribing the record. Upon completion of the record transcription, the hearing officer shall certify and file with the Court of Chancery a copy of the record transcription; all evidence upon which the order was entered; and any documents or other proffered evidence retained pursuant to Rule 249(b) relevant to the complaint (together, the "Administrative Record"). If the
Administrative Record is not filed with the Chancery Court within 20 days of the filing of the complaint, the hearing officer shall notify the Court and receive additional time in which to file and certify the record. A continued failure by the party seeking review to pay the costs of transcription shall result in dismissal of the complaint without any need for the administrative hearing officer to file the record in Court.

§272 Application to the Court for Leave to Adduce Additional Material Evidence

If, within 20 days of the filing of the record with the Court, either party applies to the Court for leave to adduce additional material evidence, and shows to the satisfaction of the Court that there were reasonable grounds for failure to adduce the evidence in the administrative hearing, the Court may order the additional evidence to be taken before the administrative hearing officer and to be adduced upon the hearing in such manner and upon such conditions as the Court considers proper.

Part C. Investigations

§300 Scope of Rules Regarding Investigations

The rules of this part apply only to investigations conducted by the Securities Division. They do not apply to administrative proceedings under the Act.

§301 Nature and Purpose of Investigations

(a) The Commissioner may in his or her discretion make such public or private investigations within or outside the State as he or she deems necessary to determine whether any person has violated, is violating, or is about to violate any provision of the Act or the rules or regulations thereunder or otherwise to aid in the enforcement of the Act. Where, from complaints received from members of the public, communications from Federal or State agencies, examination of filings made with the Division, or otherwise, it appears that there may be violations of the Securities Act, or the rules or regulations thereunder, a preliminary investigation is generally made. Unless otherwise ordered by the Division, all investigations are non-public and the reports thereon are for Division use only.

(b) After investigation or otherwise, the Division may in its discretion take one or more of the following actions: Institution of administrative proceedings looking to the imposition of remedial sanctions, initiation of injunctive proceedings in the courts, and, in the case of a willful violation, criminal prosecution. The Division may also, in an appropriate case, refer the matter to, or grant requests for access to its files made by, domestic and foreign governmental authorities or foreign securities authorities, self-regulatory organizations (such as stock

§302 Information Obtained in Investigations

(a) Information or documents obtained by the Division in the course of any investigation or examination, unless made a matter of public record, shall be deemed non-public.

(b) The Commissioner may in his discretion and upon a showing that such information is needed, provide nonpublic information in his possession to any of the following persons if the person receiving such nonpublic information provides such assurances of confidentiality as the Commissioner deems appropriate:

(1) A federal, state, local or foreign government or any political subdivision, authority, agency or instrumentality of such government;

(2) A self-regulatory organization as defined in Section 3(a)(26) of the Securities Exchange Act of 1934 (15 U.S.C. 78, et seq.) (the "Exchange Act"), or any similar organization empowered with self-regulatory responsibilities under the federal securities laws (as defined in Section 3(a)(47) of the Exchange Act), the Commodity Exchange Act (7 U.S.C. 1, et seq.) or any substantially equivalent foreign statute or regulation;

(3) A foreign financial regulatory authority as defined in Section 3(a)(51) of the Exchange Act;

(4) The Securities Investor Protection Corporation or any trustee or counsel for a trustee appointed pursuant to Section 5(b) of the Securities Investor Protection Act of 1970;

(5) A trustee in bankruptcy;

(6) A bar association, state accountancy board or other federal, state, local or foreign licensing or oversight authority, or a professional association or self-regulatory authority to the extent that it performs similar functions; or

(7) A duly authorized agent, employee or representative of any of the above persons.

(c) Nothing contained in this section shall affect:

(1) The Commissioner's authority or discretion to provide or refuse to provide access to, or copies of, nonpublic information in the Division's possession in accordance with such other authority or discretion as the Commissioner possesses by statute, rule or regulation; or

(2) The Commissioner's responsibilities under the Freedom of Information Act, 29 Del. C. §10001 et seq.

§303 Rights of Witnesses

(a) Any person compelled to appear, or who appears by request or permission of the Division, in person in any investigative proceeding may be accompanied, represented and advised by counsel, provided, however, that all witnesses shall be sequestered, and unless permitted in the discretion of the Division, no
witness or counsel accompanying any such witness shall be permitted to be present during the examination of any other witness called in such proceeding.

(b) The right to be accompanied, represented and advised by counsel shall mean the right of a person testifying to have an attorney present with him during any investigative proceeding and to have this attorney (1) advise such person before, during and after the conclusion of such examination, (2) question such person briefly at the conclusion of the examination to clarify any of the answers such person has given, and (3) make summary notes during such examination solely for the use of such person.

§304 Subpoenas

(a) For the purpose of any investigation or proceeding under the Act, the Commissioner or any officer designated by him may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the Commissioner deems relevant or material to the inquiry. The Commissioner's authority to subpoena witnesses and documents outside the State shall exist to the maximum extent permissible under federal constitutional law.

(b) Subpoenas may be issued to any person and may require that person, among other things, to:

(1) Testify under oath;

(2) Answer written interrogatories under oath;

(3) Produce documents and tangible things; and

(4) Permit inspection and copying of documents.

(c) Content of subpoena. A subpoena shall:

(1) Describe generally the nature of the investigation;

(2) If the subpoena requires testimony under oath, specify the date, time and place for the taking of testimony;

(3) If the subpoena requires answers to written interrogatories, contain a copy of the written interrogatories;

(4) If the subpoena requires the production of tangible things or documents: (a) describe the things and documents to be produced with reasonable specificity, and (b) specify a date, time, and place at which the things and documents are to be produced;

(5) Notify the person to whom the subpoena is directed of the obligation to supplement responses under Rule 306;

(6) Advise the person to whom the subpoena is directed that the person may be represented by counsel; and

(7) Identify a member of the Securities Division who may be contacted in reference to the subpoena.

(1) A subpoena directed to a corporation, partnership, or other entity that requires testimony under oath shall describe with reasonable particularity the subject matter of the testimony.

(2) An entity that receives a subpoena to answer written interrogatories or to testify under oath shall designate one or more of its officers, agents, employees, or other authorized persons familiar with the subject matter specified in the subpoena to respond to the subpoena on its behalf.

(3) The persons designated by an entity to respond to a subpoena on its behalf shall answer the interrogatories or testify as to all matters known or reasonably available to the entity.

(4) A subpoena directed to an entity that requires testimony under oath or answers to written interrogatories shall advise the entity of its obligations under this regulation.

(e) Service of subpoena.

(1) A subpoena may be served by personal service or by mail.

(2) The person who serves a subpoena shall complete a certificate of service attesting to the method and date of service.

(f) Effect of other proceedings. The pendency or beginning of administrative or judicial proceedings against a person by the Commissioner does not relieve the person of his obligation to respond to a subpoena issued under this regulation.

(g) Refusal to testify or produce documents. (1) No person is excused from attending and testifying or from producing any document or record before the Commissioner, or in obedience to the subpoena of the Commissioner or any officer designated by him or in any proceeding instituted by the Commissioner, on the ground that the testimony or evidence (documentary or otherwise) required of him may tend to incriminate him or subject him to penalty or forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after claiming his privilege against self-incrimination, to testify or produce evidence (documentary or otherwise), except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying.

(2) In case of contumacy by, or refusal to obey a subpoena issued to, any person registered under Section 7313 of the Act, the Commissioner may suspend or revoke that registrant's license pursuant to the provisions of Section 7316 of the Act.

(h) Petition to modify or quash subpoena.

(1) A person served with a subpoena under this
regulation may request that the subpoena be modified or quashed.

(2) A petition to modify or quash a subpoena issued under this regulation shall be filed with the administrative hearing officer within ten days of service of the subpoena or by the date specified for compliance with the subpoena, whichever is earlier. The petition shall set forth good cause why the subpoena should be modified or quashed.

(i) Application to Court of Chancery upon refusal to obey subpoena. In case of contumacy by, or refusal to obey a subpoena issued to, any person, the Court of Chancery, upon application by the Commissioner, may issue to the person an order requiring him to appear before the Court of Chancery or the officer designated by him, there to produce documentary evidence if so ordered or to give evidence touching the matter under investigation or in question. Failure to obey the order of the Court may be punished by the court as a contempt of court.

§305 Testimony Under Oath

A witness may be required to provide testimony under oath as part of an investigation under the Act. A witness who provides testimony under oath may be accompanied and represented by counsel as provided for in Rule 303. Testimony shall be recorded by tape recorder, stenographer or other device. The recording of the testimony shall be maintained in the custody of the Division.

§306 Production of Things and Documents

(a) Any person may be required to produce things or documents in response to a subpoena under the Act.

(b) If a person responding to a subpoena for production of things or documents withholds a record or document on the basis of a privilege, the person shall state, with respect to each document:

(1) The name and title of the author of the document;

(2) The names and titles of all persons to whom the document was addressed;

(3) The names and titles of all persons to whom copies of the document were sent;

(4) The date on which the document was written or otherwise produced and the date on which it was mailed, sent, or delivered to its addressee;

(5) The number of pages in the document;

(6) A brief description of the nature or subject matter of the document;

(7) The basis on which the document is being withheld; and

(8) The paragraph number of the subpoena to which the document is responsive.

(c) Obligation to supplement responses. If a person has responded to a subpoena under this regulation and

§307 Written Submissions by Interested Persons

(a) Persons who become involved in an investigation may, on their own initiative, submit a written statement to the Commissioner setting forth their interests and position in regard to the subject matter of the investigation. Upon request, the Division, in its discretion, may advise such persons of the general nature of the investigation, including the indicated violations as they pertain to them, and the amount of time that may be available for preparing and submitting a statement prior to the presentation of a Division recommendation to the Commissioner for the commencement of an administrative or injunction proceeding. Submissions by interested persons should be forwarded to the Securities Commissioner with a copy to the staff members conducting the investigation and should be clearly referenced to the specific investigation to which they relate. In the event a recommendation for the commencement of an enforcement proceeding is presented by the Division, any submissions by interested persons will be considered prior to commencement of any proceeding.

(b) Regardless of any voluntary written submission provided under Rule 307(a), the Commissioner may, pursuant to Section 7319(a) of the Act, require any person to file a statement in writing, under oath or otherwise as the Commissioner determines, as to any or all of the facts and circumstances concerning the matter under investigation.

Part D. Securities Registration and Notice Filings

§400 Registration by Coordination

(a) Any security for which a registration statement has been filed under the Securities Act of 1933 in connection with the same offering may be registered by coordination.

(b) A person who seeks to register a security by coordination shall file with the Division the following documents and information:

(1) A completed application Form U-1, Uniform Application to Register Securities;

(2) An irrevocable consent appointing the Securities Commissioner agent for service of process, executed by the issuer on Form U-2, Uniform Consent to Service of Process;

(3) One copy of the registration statement, as amended, filed with the SEC, which shall include (or which information shall otherwise be provided): a specification of the amount of the securities offered in Delaware; the states in which the offering has been or is
being made; and any adverse order, judgment or decree entered in connection with the offering by any regulatory authority, court or the SEC;

(4) One copy of the prospectus in the latest form on file with the SEC;

(5) The appropriate filing fee as determined under Rule 404; and

(6) Any other document or information requested by the Division.

(c) An application for registration by coordination shall become effective in Delaware simultaneously with the registration statement filed with the SEC provided the following conditions have been met:

(1) All documents and information required by (d) above have been filed with the Division;

(2) No stop order is in effect and no proceeding is pending under Section 7308 of the Act;

(3) The registration statement has been on file with the Division for at least ten days; and

(4) A statement of the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions have been on file for at least two business days and the offering is made within those limitations.

§401 Registration by Qualification

(a) Any security may be registered by qualification. A person who seeks to register a security by qualification shall file with the Division the following documents and information:

(1) A completed application Form U-1, Uniform Application to Register Securities;

(2) An irrevocable consent appointing the Securities Commissioner agent for the service of process, executed by the issuer on Form U-2, Uniform Consent to Service of Process;

(3) One copy of an executed registration statement which complies with SEC Form S-1, together with all exhibits, which shall include all information required under Sections 7306(b)(1)-(16) and 7307(b) of the Act.

(4) One copy of the Prospectus which is to be provided to offerees under Section 7306(d) of the Act;

(5) The appropriate filing fee as determined under Rule 404; and

(6) Any other document or information requested by the Division.

(b) Unless otherwise ordered by the Commissioner, the prospectus which is sent or given to each person to whom an offer is made shall contain all the information contained in the registration statement filed with the Division under subsection (a) of this Rule. The prospectus shall be written in plain English and presented in a format that is clear and easy to understand, with

(c) An application for registration by qualification shall become effective in Delaware when so ordered by the Securities Commissioner provided no order has been issued pursuant to Section 7308 of the Act.

§402 Small Company Offering Registrations

(a) Availability of Small Company Offering Registration ("SCOR").

(1) An issuer may register securities by qualification under Section 7306 of the Act by using the Form U-7 (Small Company Offerings Registration Form) if the conditions set forth in this regulation and in the instructions to Form U-7 are satisfied.

(2) In general, a company may do a SCOR offering if it is relying upon an exemption from registration with the SEC under the Federal Securities Act of 1933 provided by SEC Regulation A (17 C.F.R. §§230.251-263); Rule 504 of SEC Regulation D (17 C.F.R. §230.504); or by Section 3(a)(11) of the Securities Act of 1933 and Rule 147 promulgated thereunder (17 C.F.R. §230.147).

(3) Under SEC Regulation A, the aggregate amount of the offering cannot exceed $5,000,000.00. Under Rule 504 of SEC Regulation D, the aggregate offering amount cannot be more than $1,000,000.00. An offering under Section 3(a)(11) of the Securities Act of 1933 and SEC Rule 147 may be in any amount but, among other requirements, all securities must be offered and sold only to Delaware residents. The company also must be resident and doing business in Delaware and eighty percent of the net proceeds of the offering must be used in the operation of the company's business in Delaware.

(b) Prospectus. A completed Form U-7 that has been declared effective by the Commissioner shall serve as the prospectus for an offering registered under this regulation.

(c) Eligibility of Issuer. To be eligible to register securities under this regulation, the issuer must satisfy the following conditions:

(1) The issuer is a corporation or centrally managed limited liability company organized under the law of the United States or Canada, or any state, province, or territory or possession thereof, or the District of Columbia and have its principal place of business in one of the foregoing;

(2) The issuer is not subject to the reporting requirements of Sections13 or 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. §§78m, 78o(d);

(3) The issuer is not an investment company registered or required to be registered under the Investment Company Act of 1940, 15 U.S.C. §§80a-1 to 80a-52;

(4) The issuer is not engaged in and does not
propose to be engaged in petroleum exploration and production, mining, or other extractive industries;

(5) The issuer is not a development stage company that either has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies or other entity or person; and

(6) The issuer is not disqualified under subsection (i) of this regulation.

(d) Minimum price. The offering price for common stock or common ownership interests (hereinafter, collectively referred to as common stock), the exercise price for options, warrants, or rights to common stock, or the conversion price for securities convertible into common stock, must be greater or equal to $5.00 per share or unit of interest. The issuer must agree with the administrator that it will not split its common stock, or declare a stock dividend for two years after the effective date of the registration if such action has the effect of lowering the price below $5.00.

(e) Commissions, fees or other remuneration for soliciting any prospective purchaser in connection with the offering in the state are only paid to persons who, if required to be registered or licensed, the issuer believes, and has reason to believe, are appropriately registered or licensed in the state.

(f) Financial statements shall be prepared in accordance with either U.S. or Canadian generally accepted accounting principles. If appropriate, a reconciliation note should be provided. If the company has not conducted significant operations, statements of receipts and disbursements shall be included in lieu of statements of income. Interim financial statements may be unaudited. All other financial statements shall be audited by independent certified public accountants; provided, however, that if each of the following four conditions are met, such financial statements in lieu of being audited may be reviewed by independent certified public accountants in accordance with the Accounting and Review Service Standards promulgated by the American Institute of Certified Public Accountants or the Canadian equivalent:

(1) the company shall not have previously sold securities through an offering involving the general solicitation of prospective investors by means of advertising, mass mailing, public meetings, "cold call" telephone solicitation, or any other method directed toward the public;

(2) the company has not been previously required under federal, state, provincial or territorial securities laws to provide audited financial statements in connection with any sale of its securities;

(3) the aggregate amount of all previous sales of securities by the company (exclusive of debt financing

(4) the amount of the present offering does not exceed $1,000,000.00.

(g) The offering shall be made in compliance with Rule 504 of Regulation D, Regulation A, or Section 3(a)(11) of the Securities Act of 1933.

(h) Filing Requirements and Fees. The issuer shall file an executed Form U-1, Form U-2, Form U-2A, Form U-7 with exhibits, and shall include the fee required by Rule 404. In addition, if the offering is made pursuant to Rule 504 of Regulation D, the issuer shall file a copy of its Form D as part of its SCOR application; if the offering is made pursuant to Regulation A, the issuer shall file a copy of its Form 1-A as part of its SCOR application. That filing shall be made with the Commissioner at the same time it is filed with the SEC.

(i) Disqualification. Unless the Commissioner determines that it is not necessary under the circumstances that the disqualification under this section be applied, application for registrations under this regulation shall be denied if the issuer, any of its officers, directors, ten percent or greater stockholders, promoters, or selling agents, or, any officer, director or partner of any selling agent:

(1) has filed an application for registration which is subject to a currently effective stop order entered pursuant to any state or provincial securities laws within ten years prior to the filing of the registration statement;

(2) has been convicted, within ten years prior to the filing of the current application for registration, of any felony or misdemeanor in connection with the offer, purchase, or sale of securities, or of any felony involving fraud or deceit, including, but not limited to, forgery, embezzlement, obtaining money under false pretenses, larceny, or conspiracy to defraud;

(3) is currently subject to any state or provincial administrative enforcement order or judgment entered by that state's or province's securities administrator within ten years prior to the filing of the current application for registration;

(4) is subject to any state or provincial administrative enforcement order or judgment in which fraud or deceit, including, but not limited to, making untrue statements of material facts and omitting to state material facts, was found, and the order or judgment was entered within ten years prior to the filing of the current application for registration;

(5) is subject to any state or provincial administrative enforcement order or judgment which prohibits, denies, or revokes the use of any exemption from registration in connection with the offer, purchase or sale of securities;

(6) is currently subject to any order, judgment, or
decree of any court of competent jurisdiction that temporarily, preliminarily, or permanently restrains or enjoins such party from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security, or involving the making of any false filing with the state, entered within ten years prior to the filing of the current application for registration; or

(7) has violated the law of a foreign jurisdiction governing or regulating any aspect of the business of securities or banking or, within the past ten years, has been the subject of an action of a securities regulator of a foreign jurisdiction denying, revoking or suspending the right to engage in the business of securities as a broker-dealer, agent, investment adviser or investment adviser representative, or is the subject of an action of any securities exchange or self-regulatory organization operating under the authority of the securities regulator of a foreign jurisdiction suspending or expelling such person from membership in such exchange or self-regulatory organization.

(j) Waiver of disqualifications. Any of the disqualifications listed in subsection (i) of this Rule may be waived if the Commissioner in the exercise of his discretion should find good cause for such waiver.

§403 Notice Filings for Offerings of Investment Company Securities

(a) Except as provided in subsection (b) hereof, no investment company that is registered under the Investment Company Act of 1940 or that has currently filed a registration statement under the Securities Act of 1933 is required to file with the Commissioner, either prior to the initial offer or after the initial offer in this state of a security which is a covered security under Section 18(b)(2) of the Securities Act of 1933, a copy of any document which is part of a federal registration statement filed with the SEC or is part of an amendment to such federal registration statement; provided, however, that such an investment company shall, prior to the initial offer of such a covered security, file with the Commissioner a Form NF for such security, together with a consent to service of process signed by the issuer and a filing fee equal to one half of one percent of the maximum aggregate offering price of securities to be offered in Delaware in the initial offering, but not less than $200.00 or more than $1,000.00.

(b) An investment company that is registered under the Investment Company Act of 1940 or that has filed a registration statement under the Securities Act of 1933 shall file, upon written request of the Commissioner and within the time period set forth in the request, a copy of any document identified in the request that is part of the federal registration statement filed with the SEC or part of an amendment of such federal registration statement.

(d) The initial filing of a Form NF by an investment company pursuant to subsection (a) hereof is effective for one year. The investment company must renew its notice filing (or notice filings, where multiple filings were made for multiple series or portfolios) annually by filing with the Commissioner a Form NF and a filing fee in accordance with subsection (a) hereof.

§404 Fees

(a) Fees for registering securities by coordination or by qualification shall be one half of one percent of the maximum aggregate offering price of securities to be offered in Delaware during the initial registration period, but not less than $200.00 or more than $1,000.00.

(b) The amount of securities to be registered in Delaware shall be specifically stated in the Form U-1. However, if the applicant pays the maximum filing fee of $1,000.00, the amount to be registered in Delaware may be stated in the Form U-1 as "indefinite" or "unlimited."

(c) All filing fees are due at the time of the initial application. No application fee is refundable even though an application may be withdrawn or denied.

§405 Quarterly Reports on Registered Securities

Quarterly reports shall be filed by a person who filed the registration statement as long as the registration is effective in order to keep reasonably current all information contained in the registration statement and to disclose the progress of the offering.

§406 Filing of Sales Literature

Any prospectus, pamphlet, circular, form letter, advertisement, or other sales literature or advertising communication addressed or intended for distribution to prospective investors, including clients or prospective clients of an investment adviser must be filed with the Securities Commissioner unless the security or transaction is exempted by Section 7309 of the Act or the security is a federal covered security under Section 7309A of the Act.

§407 Notice Filings for SEC Regulation D Filings

(a) An issuer offering a security that is a covered security under section 18(b)(4)(D) of the Securities Act of 1933 shall file with the Commissioner a notice on SEC
Form D and a consent to service of process on a Form U-2, Uniform Consent to Service of Process, no later than 15 days after the first sale of such federal covered security in this state.

(b) For purposes of this section, "SEC Form D" is defined as the document adopted by the SEC and in effect on September 1, 1996 (and as may be amended by the SEC from time to time), entitled "FORM D; Notice of Sale of Securities pursuant to Regulation D, Section 4(6), and/or Uniform Limited Offering Exemption", including Part E and the Appendix.

Part E. Exemptions from Registration

§500 Exemptions for Federal Covered Securities

Federal covered securities, as defined in Section 7302(a)(17) of the Act, are exempt from registration under Section 7304 of the Act. Notice filings are required for registered investment company offerings under Rule 403; for limited offerings of securities under Rule 502; and for offers or sales of securities in Delaware pursuant to SEC Rule 506, 17 C.F.R. §230.506.

§501 Designated Exchange Exemptions

Any security listed or approved for listing upon notice of issuance on the Boston Stock Exchange or the Chicago Board Options Exchange is exempted from Sections 7304, 7309A and 7312 of the Act pursuant to Section 7309(a)(8) of the Act.

§502 Limited Offering Exemptions

(a) Any offer or sale of securities made in compliance with SEC Rule 505, 17 C.F.R. §230.505 (Exemption for Limited Offers and Sales of Securities Not Exceeding $5,000,000) of Regulation D under the Securities Act of 1933 and the provisions of this Rule is exempt from registration under the Act.

(b) To qualify for the limited offering exemption, the following conditions and limitations must be met:

(1) No commission, fee or other remuneration shall be paid or given, directly or indirectly, to any person for soliciting any prospective purchaser in this state unless such person is appropriately registered under the Act. It is a defense to a violation of this subsection if the issuer sustains the burden of proof to establish that he or she did not know and in the exercise of reasonable care could not have known that the person who received a commission, fee or other remuneration was not appropriately registered under the Act.

(2) The limited offering exemption is not available if the issuer, any of its directors, officers, general partners, trustees, beneficial owners of ten percent or more of a class of its equity interests, promoters currently connected with it in any capacity, or any person

(i) within ten years before the first sale of securities in an offering under this exemption has filed a registration statement or application for exemption from registration that is currently subject to a stop order under any state's securities laws;

(ii) within ten years before the first sale of securities in an offering under this exemption has been convicted of or has pleaded nolo contendere to a felony or misdemeanor in connection with the offer, purchase, or sale of a security or in connection with the making of a false filing with the SEC or with a state securities administrator, or a felony involving fraud or deceit, including, but not limited to, forgery, embezzlement, obtaining money under false pretenses, larceny, conspiracy to defraud, or theft;

(iii) is subject to an order, judgment or decree of a court of competent jurisdiction temporarily or preliminarily restraining or enjoining, or is subject to an order, judgment, or decree of a court of competent jurisdiction entered within ten years before the first sale of securities in an offering under this exemption permanently restraining or enjoining, that person from engaging in or continuing any conduct or practice in connection with the offer, purchase, or sale of a security or in connection with the making of a false filing with the SEC or a state securities administrator;

(iv) is the subject of any order or judgment which prohibits, denies or revokes the use of any exemption from registration in connection with the offer, purchase or sale of securities;

(v) is subject to a state administrative order entered by a state securities administrator in which fraud or deceit was found, if the final order was entered within ten years before the first sale of securities in an offering under this exemption.

(3) Not later than 15 days after the first sale of securities under this regulation, the issuer shall file with the Commissioner a manually signed notice on a completed SEC Form D (Notice of Sale of Securities Pursuant to Regulation D, Section 4(6), and/or Uniform Limited Offering Exemption), as filed with the SEC and as that form may be amended from time to time. That filing shall constitute an affirmation by the issuer that it has complied with SEC Rule 505 and that upon written request the issuer shall furnish to the Commissioner any and all information furnished by the issuer or its agents to the offerees.

(4) In all sales to nonaccredited investors in Delaware, one of the following conditions must be
satisfied or the issuer and any person acting on its behalf shall have reasonable grounds to believe and after making reasonable inquiry shall believe that one of the following conditions is satisfied:

(i) The investment is suitable for the purchaser upon the basis of the facts, if any, disclosed by the purchaser as to the purchaser's other security holdings, financial situation and needs.

(ii) The purchaser either alone or with his or her purchaser representative(s) has such knowledge and experience in financial and business matters that he or she is or they are capable of evaluating the merits and risks of the prospective investment.

(c) Neither this regulation nor the Act provide an exemption from the provisions of Section 7303 of the Act.

(d) The burden of proving an exemption under this regulation is on the person claiming the exemption.

(e) The Commissioner may, by rule or order, increase the number of purchasers or waive any other condition of this exemption.

§503 Accredited Investor Exemption

Any offer or sale of a security by an issuer in a transaction that meets the following requirements of this rule is exempted from the securities registration requirements of the Act.

(a) Sales of securities shall be made only to persons who are or the issuer reasonably believes are "accredited investors" as that term is defined in SEC Rule 501(a) of Regulation D.

(b) The exemption is not available to an issuer that is in the development stage that either has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, or other entity or person.

(c) The issuer reasonably believes that all purchasers are purchasing for investment and not with the view to or for sale in connection with a distribution of the security. Any resale of a security sold in reliance on this exemption within 12 months of sale shall be presumed to be with a view to distribution and not for investment, except a resale pursuant to a registration statement effective under the securities registration requirements of the Act or to an accredited investor pursuant to another applicable exemption under the Act.

(d) Disqualification.

(1) This exemption is not available to an issuer if the issuer, any of the issuer's predecessors, any affiliated issuer, any of the issuer's directors, officers, general partners, beneficial owners of ten percent or more of any class of its equity securities, any of the issuer's promoters presently connected with the issuer in any capacity, any underwriter of the securities to be offered, or any partner,

(i) within the last ten years, has filed a registration statement that is the subject of a currently effective registration stop order entered by any state securities administrator or the SEC;

(ii) within the last ten years, has been convicted of any criminal offense in connection with the offer, purchase or sale of any security, or involving fraud or deceit;

(iii) is currently subject to any order, judgment or decree of any court of competent jurisdiction, entered within the last ten years, temporarily, preliminarily or permanently restraining or enjoining such party from engaging in or continuing to engage in any conduct or practice involving fraud or deceit in connection with the purchase or sale of any security.

(e) General Announcement.

(1) A general announcement of the proposed offering may be made by any means.

(2) The general announcement shall include only the following information, unless additional information is specifically permitted by the Commissioner:

(i) The name, address and telephone number of the issuer of the securities;

(ii) The name, a brief description and price (if known) of any security to be issued;

(iii) A brief description of the business of the issuer in 25 words or less;

(iv) The type, number and aggregate amount of securities being offered;

(v) The name, address and telephone number of the person to contact for additional information; and

(vi) A statement that:

1. sales will only be made to accredited investors;

2. no money or other consideration is being solicited or will be accepted by way of this general announcement; and

3. the securities have not been registered with or approved by any state securities agency or the SEC and are being offered and sold pursuant to an exemption from registration.

(f) The issuer, in connection with an offer, may provide information in addition to the general announcement under paragraph (f), if such information:

(1) is delivered through an electronic database that is restricted to persons who have been prequalified as accredited investors; or

(2) is delivered after the issuer reasonably believes that the prospective purchaser is an accredited investor.

(g) No telephone solicitation shall be permitted unless prior to placing the call, the issuer reasonably
believes that the prospective purchaser to be solicited is an accredited investor.

(h) Dissemination of the general announcement of the proposed offering to persons who are not accredited investors shall not disqualify the issuer from claiming the exemption under this rule.

(i) The issuer must file or cause to be filed with the Commissioner a notice of exemption in the form prescribed by the Commissioner and a copy of any general announcement, within 15 days after the first sale in this state.

§504 World Class Foreign Issuer Exemptions

Any security that meets all of the following conditions shall be exempt from the securities registration requirements of the Act:

(a) (1) Equity securities, except options, warrants, preferred stock, subscription rights, securities convertible into equity securities or any right to subscribe to or purchase such options, warrants, convertible securities or preferred stock;

(2) Units consisting of equity securities permitted under subparagraph (1) and warrants to purchase the same equity security being offered in the unit;

(3) Non-convertible debt securities rated in one of the four highest rating categories of Standard and Poor's, Moody's, Dominion Bond Rating Services of Canadian Bond Rating Services or such other rating organization the Commissioner by rule or order may designate. For purpose of this subparagraph (2), the term "non-convertible debt securities" means securities that cannot be converted for at least one year from the date of issuance and then, only into equity shares of the issuer or its parent; or

(4) American Depository Receipts representing securities described in subparagraphs (1) and (2) above;

(b) The issuer is not organized under the laws of the United States, or of any state, territory or possession of the United States, or of the District of Columbia or Puerto Rico;

(c) The issuer, at the time an offer or sale is made in reliance on the securities exemption embodied in this rule, has been a going concern engaged in continuous business operations for the immediate past five years and during that period has not been the subject of a proceeding relating to insolvency, bankruptcy, involuntary administration, receivership or similar proceeding. For purposes of this paragraph, the operating history of any predecessor that represented more than 50 percent of the value of the assets of the issuer that otherwise would have met the conditions of this rule may be used toward the five year requirement;

(d) The issuer, at the time an offer or sale is made

(1) The term "public float" means the market value of all outstanding equity shares owned by non-affiliates;

(2) The term "equity shares" means common shares, non-voting equity shares and subordinate or restricted voting equity shares, but does not include preferred shares; and

(3) An "affiliate" is anyone who owns beneficially, directly or indirectly, or exercises control or direction over, more than ten percent of the outstanding equity shares of such person;

(e) The market value of the issuer's equity shares, at the time an offer or sale is made in reliance on the securities exemption embodied in this rule, is US $3 billion or more. For purposes of this paragraph, the term "equity shares" means common shares, non-voting equity shares and subordinate or restricted voting equity shares, but does not include preferred shares; and

(f) The issuer, at the time an offer or sale is made in reliance on the securities exemption embodied in this rule, has a class of equity securities listed for trading on or through the facilities of a foreign securities market included in SEC Rule 902(a)(1) or designated by the SEC under SEC Rule 902(a)(2).

§505 Offers of Securities Through the Internet

(a) A communication that is placed on the Internet by or on behalf of an issuer that is designed to raise capital and/or to distribute information on available products or services and that is directed generally to anyone having access to the Internet, whether through postings on "Bulletin Boards," displays on "Home Pages," or otherwise (an "Internet Communication") shall not constitute an offer within the meaning of Section 7302(11)(a) of the Act, and shall therefore constitute an exempt transaction under the Act, provided that :

(1) The Internet Communication indicates by a prominent legend at the beginning of the Internet Communication that the securities are not being offered to any person in Delaware;

(2) An offer of the issuer's securities is not otherwise directed to any person in Delaware by, or on behalf of, the issuer; and

(3) Unless otherwise exempt under the Act, no sale of the issuer's securities is made in Delaware, as a result of the Internet Communication.

(b) Reliance on the exemption provided by this rule does not preclude an issuer from relying on other available exemptions for offers provided under the Act.

(c) The term "Internet" for the purposes of this rule includes the Internet, the World Wide Web and similar
proprietary and common carrier electronic systems.

§506 Claim of Exemption by Persons Organized and Operated Not for Private Profit but Exclusively for Religious Purposes

Any security issued by a person organized and operated not for private profit but exclusively for religious, educational, benevolent or charitable purposes shall be exempt from the securities registration requirement of the Act provided as follows:

(a) The issuer is (1) a religious organization affiliated with, associated with, or authorized by a religious denomination or denominations; or (2) a religious organization that consists of or acts on behalf of individual or local churches or local or regional church organizations.

(b) The issuer is an organization that qualifies and operates under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended;

(c) The issuer, alone or through its predecessor organization:

(1) Has been in existence for over ten years;

(2) Has received audited financial statements with an unqualified opinion from a certified public accountant for its most recent three fiscal years; and

(3) Has experienced no defaults on any outstanding obligations to investors for the period that it has issued securities.

(d) The issuer's:

(1) Cash, cash equivalents and readily marketable assets have had a market value of at least five percent of the principal balance of its total outstanding debt securities for the last three fiscal years or 36 months prior to the issue; or

(2) Net worth, as that term is used in Generally Accepted Accounting Principles, has been at least equal to three percent of its total assets for the last three fiscal years or 36 months prior to the issue.

(e) Prior to any sale of the securities, the issuer provides an investor with a disclosure document reflecting financial and other information concerning the issuer and relevant risks involved in the investment.

(f) The issuer makes loans to or otherwise utilizes the net proceeds of the offering in support of:

(1) Local churches, or other religious organizations affiliated or associated with such churches; or

(2) Related religious organizations.

(g) The issuer:

(1) Has a net worth, as that term is used in Generally Accepted Accounting Principles, of $5,000,000.00 or more which includes all church owned property; or

(2) Makes loans, secured by either real property

§507 Claim of Exemption for Nine-Month Commercial Paper

Section 7309(a)(10) of the Act exempts from registration any commercial paper which arises out of a current transaction (or the proceeds of which have been or are to be used for current transactions), and which evidences an obligation to pay cash within nine months of the date of issuance, exclusive of days of grace, or any renewal of such paper which is likewise limited, or any guarantee of such paper or of any such renewal. This exemption is a narrow and specialized one. It applies only to prime quality negotiable commercial paper of a type not ordinarily purchased by the general public, that is, paper issued to facilitate well recognized types of current operational business requirements and of a type eligible for discounting by Federal Reserve Banks. The exemption is not available for the unregistered public offering of promissory or collateral trust notes or similar evidences of debt of any issuer directly to public investors through solicitation or otherwise. Pursuant to Section 7304 of the Act, any such offering must be registered or exempt from registration under an exemption other than that provided by Section 7309(a)(10) of the Act.

§508 Recognized Securities Manuals

(a) Each of the following manuals shall be deemed a "Recognized Securities Manual" for the purposes of 6 Del. C. §7309(b)(2):

(1) Moody's Industrial Manual

(2) Moody's Transportation Manual

(3) Moody's Public Utility Manual

(4) Moody's Bank and Finance Manual

(5) Standard & Poor's Standard Corporation Descriptions

(6) Fitch's Individual Stock Bulletin

(7) Moody's OTC Industrial Manual

(b) The term "manual" for purposes of this rule includes all commonly recognized formats of publications, including CD-ROM and electronic dissemination over the Internet.

§509 Unsolicited Sales

Acknowledgment by letter from a customer that a sale was unsolicited is a prerequisite to the application of the exemption set forth at 6 Del. C. §7309(b)(3).

§510 Transactional Exemption for Certain Institutional Buyers

(a) Pursuant to Section 7309(b)(8) of the Act, offers or sales to institutional buyers are exempted from Sections 7304, 7309A and 7312 of the Act. For purposes of this exemption, "institutional buyers" include the following:

(1) an "accredited investor" as defined in SEC Rule 501(a)(1)-(4), (7) and (8), 17 C.F.R. §230.501(a)(1)-(4), (7), (8), excluding, however, any self-directed employee benefit plan with investment decisions made solely by persons that are "accredited investors" as defined in Rule 501(a)(5)-(6);

(2) any "qualified institutional buyer" as that term is defined in SEC Rule 144A(a)(1), 17 C.F.R. §230.144A(a)(1); and

(3) a corporation, partnership, trust, estate, or other entity (excluding individuals) having a net worth of not less than $5 million or a wholly-owned subsidiary of such entity, as long as the entity was not formed for the purpose of acquiring the specific securities.

(b) For purposes of determining a purchaser's total assets or net worth under this section, the issuer and the seller may rely upon the entity's most recent annual balance sheet or other financial statement which shall have been audited by an independent accountant or which shall have been verified by a principal of the purchaser.

(c) The offer or sale of securities is not exempt under Section 7309(b)(8) or this rule if the institutional buyer is in fact acting only as an agent for another purchaser that is not an institutional buyer or financial institution listed in Section 7309(b)(8).

§511 Confirmation of Availability of Exemption

No oral communication with the Securities Division may be relied upon as proving the availability of any exemption or any exclusion from a definition. Such confirmation may only be obtained by a written opinion from the Securities Division. A written opinion may be obtained by submitting the fee set forth in Rule 102(h) along with a full description of the subject matter, copies of any relevant documents and the identity of the section or sections of the Delaware Securities Act on which the exemption or exclusion is based.

Part F. Broker-Dealers, Broker-Dealer Agents, and Issuer Agents

§600 Registration of Broker-Dealers

(a) A person applying for a license as a broker-dealer in Delaware shall make application for such license on Form BD (Uniform Application for Broker-Dealer

(b) An applicant who is registered or registering under the Securities Exchange Act of 1934 shall file its application, together with the fee required by Section 7314 of the Act, with the NASD Central Registration Depository ("CRD") and shall file with the Commissioner such other information as the Commissioner may reasonably require.

(c) An applicant who is not registered or registering under the Securities Exchange Act of 1934 shall file its application; the fee required by Section 7314 of the Act; and an audited financial statement prepared in accordance with 17 C.F.R. §240.17a-5(d) with the Commissioner, together with such other information as the Commissioner may reasonably require.

(d) Any applicant for a broker-dealer license must also file a Form U-2 (Uniform Consent to Service of Process) with the Commissioner.

(e) A broker-dealer registered with the Commissioner shall register at least one agent with the Commissioner.

(f) Registration expires at the end of the calendar year. Any broker-dealer may renew its registration by filing with the NASD CRD, or with the Commissioner in the case of a broker-dealer not registered under the Securities Exchange Act of 1934, such information as is required by the NASD, together with the fee required by Section 7314 of the Act.

§601 Registration of Broker-Dealer Agents

(a) A person applying for a license as a broker-dealer agent in Delaware shall make application for such license on Form U-4 (Uniform Application for Securities Industry Registration or Transfer). Amendments to such application shall also be made on Form U-4.

(b) An applicant for registration as an agent for a broker-dealer that is a member of the NASD shall file his or her application, together with the fee required by Section 7314 of the Act, with the NASD CRD and shall file with the Commissioner such other information as the Commissioner may reasonably require.

(c) Any applicant for registration as an agent for a broker-dealer that is not an NASD member shall file his or her application, together with the fee required by Section 7314 of the Act, with the Commissioner, together with such other information as the Commissioner may reasonably require.

(d) Any applicant for a broker-dealer agent license must also file a Form U-2 (Uniform Consent to Service of Process) with the Commissioner and successfully complete the Uniform Securities Agent State Law Examination (Series 63 or 66) administered by the NASD. The Commissioner may waive the exam requirement upon
good cause shown.

(e) Registration expires at the end of the calendar year. Any broker-dealer agent may renew its registration by filing with the NASD CRD, or with the Commissioner in the case of a broker-dealer agent employed by a broker-dealer not registered under the Securities Exchange Act of 1934, such information as is required by the NASD, together with the fee required by Section 7314 of the Act.

§602 Registration of Issuer Agents

(a) A person applying for a license as an issuer agent in Delaware shall make application for such license on Form U-4 (Uniform Application for Securities Industry Registration or Transfer). Amendments to such application shall also be made on Form U-4.

(b) An applicant for registration as an issuer agent shall file his or her application and the fee required by Section 7314 of the Act with the Commissioner, together with such further information as the Commissioner may reasonably require.

(c) Any applicant for an issuer agent license must also file a Form U-2 (Uniform Consent to Service of Process) with the Commissioner and successfully complete the Uniform Securities Agent State Law Examination (Series 63 or 66) administered by the NASD. The Commissioner may waive the exam requirement upon good cause shown.

§603 Continuing Obligation of Registrants to Keep Information Current

(a) Persons registering as broker-dealers, broker-dealer agents or issuer agents are required to keep reasonably current the information set forth in their applications for registration and to notify the Commissioner of any material change to any information reported in their application for registration.

(b) Failure to keep current the information set forth in an application or to notify the Commissioner of any material change to any information reported in the application shall constitute a waiver of any objection to or claim regarding any action taken by the Commissioner in reliance on information currently on file with the Commissioner.

§604 Minimum Financial Requirements and Financial Reporting Requirements of Broker-Dealers

(a) Each broker-dealer registered or required to be registered under the Act shall comply with SEC Rules 15c3-1 (17 C.F.R. §240.15c3-1), 15c3-2 (17 C.F.R. §240.15c3-2), and 15c3-3 (17 C.F.R. §240.15c3-3).

(b) Each broker-dealer registered or to be registered under the Delaware Securities Act shall comply with SEC Rule 17a-11 (17 C.F.R. §240.17a-11) and shall file with the Commissioner, upon request, copies of

(c) To the extent that the SEC promulgates changes to the above-referenced rules, broker-dealers in compliance with such rules as amended shall not be subject to enforcement action by the Securities Division for violation of this section to the extent that the violation results solely from the broker-dealer's compliance with the amended rule.

§605 Bonding Requirements of Intrastate Broker-Dealers

Every broker-dealer registered or required to be registered under the Act whose business is exclusively intrastate, who does not make use of any facility of a national securities exchange, and who is not registered under Section 15 of the Securities Exchange Act of 1934 shall be bonded in an amount of not less than $100,000 by a bonding company qualified to do business in this state.

§606 Recordkeeping Requirements of Broker-Dealers

(a) Unless otherwise provided by order of the SEC, each broker-dealer registered or required to be registered under the Act shall make, maintain, and preserve books and records in compliance with SEC Rules 17a-3 (17 C.F.R. §240.17a-3), 17a-4 (17 C.F.R. §240.17a-4), 15c2-6 (17 C.F.R. §240.15c2-6) and 15c2-11 (17 C.F.R. §240.15c2-11).

(b) To the extent that the SEC promulgates changes to the above-referenced rules, broker-dealers in compliance with such rules as amended shall not be subject to enforcement action by the Securities Division for violation of this section to the extent that the violation results solely from the broker-dealer's compliance with the amended rule.

§607 Use of the Internet for General Dissemination of Information on Products and Services

(a) Broker-dealers and broker-dealer agents who use the Internet to distribute information on available products and services through communications made on the Internet directed generally to anyone having access to the Internet, and transmitted through postings on Bulletin Boards, displays on "Home Pages" or otherwise (an "Internet Communication") shall not be deemed to be "transacting business" in Delaware for purposes of Section 7313 of the Act based solely on the Internet Communication if the following conditions are met:

(1) The Internet Communication contains a legend in which it is clearly stated that:

(i) the broker-dealer or agent in question may only transact business in Delaware if first registered, excluded or exempted from state broker-dealer or agent
registration requirements, as the case may be; and

(ii) follow-up, individual responses to persons in Delaware by such broker-dealer, or agent that involve either the effecting or attempting to effect transactions in securities, will not be made absent compliance with state broker-dealer or agent registration requirements, or an applicable exemption or exclusion; (2) The Internet Communication contains a mechanism, including and without limitations, technical "firewalls" or other implemented policies and procedures, designed reasonably to ensure that prior to any subsequent, direct communication with prospective customers or clients in Delaware, said broker-dealer or agent is first registered in Delaware or qualifies for an exemption or exclusion from such requirement. Nothing in this paragraph shall be construed to relieve a state registered broker-dealer or agent from any applicable securities registration requirement in Delaware;

(3) The Internet Communication does not involve either effecting or attempting to effect transactions in securities in Delaware over the Internet, but is limited to the dissemination of general information on products and services; and

(4) In the case of an agent:

(i) the affiliation with the broker-dealer is prominently disclosed within the Internet Communication;

(ii) the broker-dealer with whom the agent is associated retains responsibility for reviewing and approving the content of any Internet Communication by the agent;

(iii) the broker-dealer or investment adviser with whom the agent is associated first authorizes the distribution of information on the particular products and services through the Internet Communication; and

(iv) in disseminating information through the Internet Communication, the agent acts within the scope of the authority granted by the broker-dealer;

(b) The position expressed in this rule extends to state broker-dealer and agent registration requirements only, and does not excuse compliance with applicable securities registration, antifraud or related provisions;

(c) Nothing in this rule shall be construed to affect the activities of any broker-dealer and agent engaged in business in this state that is not subject to the jurisdiction of the Commissioner as a result of the National Securities Markets Improvement Act of 1996, as amended.

§608 Registration Exemption for Certain Canadian Broker-Dealers

(a) A Canadian broker-dealer which meets the conditions of this rule as set

forth below shall be exempt from the registration requirement of Section 7313 of the Act.

(b) To be eligible for this exemption, the broker-

(1) Only effects or attempts to effect transactions in securities with, or for, one or more of the following;

(i) A person from Canada who is temporarily present in Delaware, with whom the Canadian broker-dealer had a bona fide business-client relationship before the person entered Delaware;

(ii) A person from Canada who is present in Delaware, whose transactions are in a self-directed tax advantaged retirement plan in Canada of which the person is the holder or contributor; or

(iii) A "U.S. institutional investor" or a "major U.S. institutional investor" to the extent permitted by SEC Reg. §240.15a-6 (17 CFR §240.15a-6); and

(2) Is registered in its home province or territory, and a member in good standing of a self-regulatory organization or stock exchange in Canada;

(3) Files with the Securities Commissioner a notice in the form of the current application required by the jurisdiction in which its head office is located;

(4) Files with the Securities Commissioner a consent to service of process in a form which complies with the requirements of Section 7327 of the Act.

(5) Discloses to its clients in Delaware that it is not subject to the full regulatory requirements of the Act; and

(6) Is not in violation of Sections 7303 or 7316 of the Act or any rules promulgated thereunder.

(c) Exempt transactions. Offers or sales of any security effected by a broker-dealer who is exempt from registration under this Regulation are exempt from the registration requirements of Section 7304 of the Act.

§609 Prohibited Practices

(a) Each broker-dealer and broker-dealer agent registered in Delaware is required to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business. The acts and practices described below in this rule, among others, are considered contrary to such standards and may constitute grounds for denial, suspension or revocation of registration or such other action authorized by the Act.

(b) Broker-Dealers. For the purposes of 6 Del. C. §7316(a)(7), unethical practices by a broker-dealer shall include, but not be limited to, the following conduct:

(1) Engaging in an unreasonable and unjustifiable delay in the delivery of securities purchased by any of its customers or in the payment, upon request, of free credit balances reflecting completed transactions of any of its customers, or failing to notify customers of their right to receive possession of any certificate of ownership
to which they are entitled;

(2) Inducing trading in a customer's account that is excessive in size or frequency in view of the customer's investment objective, level of sophistication in investments, and financial situation and needs;

(3) Recommending a transaction without reasonable grounds to believe that such transaction is suitable for the customer in light of the customer's investment objective, level of sophistication in investments, financial situation and needs, and any other information material to the investment;

(4) Executing a transaction on behalf of a customer without prior authorization to do so;

(5) Exercising any discretionary power in effecting a transaction for a customer's account without first obtaining written discretionary authority from the customer, unless the discretionary power relates solely to the time and/or price for the execution of orders;

(6) Executing any transaction in a margin account without securing from the customer a properly executed written margin agreement promptly after the initial transaction in the account;

(7) Failing to segregate and identify customer's free securities or securities held in safekeeping;

(8) Hypothecating a customer's securities without having a lien thereon unless the broker-dealer secures from the customer a properly executed written consent promptly after the initial transaction, except as permitted by SEC regulations;

(9) Entering into a transaction with or for a customer at a price not reasonably related to the current market price of the security or receiving an unreasonable commission or profit (commissions or profits equal to 10% or more of the price of a security are presumed to be unreasonable);

(10) Failing to furnish to a customer purchasing securities in an offering, no later than the date of confirmation of the transaction, either a final prospectus or a preliminary prospectus and an additional document, which, together with the preliminary prospectus, includes all information set forth in the final prospectus;

(11) Charging unreasonable and inequitable fees for services performed, including miscellaneous services such as collection of monies due for principal, dividends or interest, exchange or transfer of securities, appraisals, safekeeping, or custody of securities and other services related to its securities business;

(12) Charging any fee for which no notice is given to the customer, and consent obtained, prior to the event incurring the fee;

(13) Offering to buy from or sell to any person any security at a stated price, unless such broker-dealer is prepared to purchase or sell, as the case may be, at such price and under such conditions as are stated at the time of

(14) Representing that a security is being offered to a customer "at the market" or a price relevant to the market price, unless such broker-dealer knows or has reasonable grounds to believe that a market for such security exists other than that made, created or controlled by such broker-dealer, or by any person for whom he is acting or with whom he is associated in such distribution, or any person controlled by, controlling or under common control with such broker-dealer;

(15) Effecting any transaction in, or inducing the purchase or sale of, any security by means of any manipulative or deceptive device, practice, plan, program, design or contrivance, that may include but not be limited to:

(i) Effecting any transaction in a security that involves no change in the beneficial ownership thereof;

(ii) Entering an order or orders for the purchase or sale of any security with the knowledge that an order or orders of substantially the same size, at substantially the same time and substantially the same price, for the sale of any such security, has been or will be entered by or for the same or different parties for the purpose of creating a false or misleading appearance of active trading in the security or false or misleading appearance with respect to the market for the security; provided, however, nothing in this subparagraph shall prohibit a broker-dealer from entering bona fide agency cross transactions for its customers; or

(iii) Effecting, alone or with one or more other persons, a series of transactions in any security creating actual or apparent active trading in such security or raising or depressing the price of such security for the purpose of inducing the purchase or sale of such security by others;

(16) Guaranteeing a customer against loss in any securities account of such customer carried by the broker-dealer or in any securities transaction effected by the broker-dealer with or for such customer;

(17) Publishing or circulating or causing to be published or circulated, any notice, circular, advertisement, newspaper article, investment service, or communication of any kind that purports to report any transaction as a purchase or sale of any security, unless such broker-dealer believes that such transaction was a bona fide purchase or sale of such security; or that purports to quote the bid price or asked price for any security, unless such broker-dealer believes that such quotation represents a bona-fide bid for, or offer of, such security;

(18) Using any advertising or sales presentation in such a fashion as to be deceptive or misleading. An example of such practice would be a distribution of any nonfactual data, material, or presentation based on
conjecture, unfounded or unrealistic claims or assertions in a brochure, flyer, or display by words, pictures, graphs or otherwise designed to supplement, detract from, supersede or defeat the purpose or effect of any prospectus or disclosure;

(19) Failing to disclose that the broker-dealer is controlled by, controlling, affiliated with or under common control with the issuer of any security before entering into any contract with or for a customer for the purchase or sale of such security, and, if such disclosure is not made in writing, it shall be supplemented by the giving or sending of written disclosure at or before the completion of the transaction;

(20) Failing to make a bona fide public offering of all the securities allotted to a broker-dealer for distribution, whether acquired as an underwriter or a selling group member, or from a member participating in the distribution as an underwriter or selling group member;

(21) Failing or refusing to furnish a customer, upon reasonable request, information to which he is entitled, including:

(i) with respect to a security recommended by the broker-dealer, material information that is reasonably available; and

(ii) a written response to any written request or complaint;

(22) Making a recommendation that one customer buy a particular security and that another customer sell that security, where the broker-dealer acts as a principal and such recommendations are made within a reasonably contemporaneous time period, unless individual suitability considerations or preferences justify the different recommendations;

(23) Where the broker-dealer holds itself out as a market maker in a particular security, or publicly quotes bid prices in a particular security, failing to buy that security from a customer promptly upon the customer's request to sell;

(24) Recommending a security to its customers without conducting a reasonable inquiry into the risks of that investment or communicating those risks to its agents and its customers in a reasonably detailed manner and with such emphasis as is necessary to make the disclosure meaningful;

(25) Representing itself as a financial or investment planner, consultant, or adviser, when the representation does not fairly describe the nature of the services offered, the qualifications of the person offering the services, and the method of compensation for the services;

(26) Falsifying any record or document or failing to create or maintain any required record or documents;

(27) Violating any ethical standard in the

(28) Aiding or abetting any of the conduct listed above.

(c) Broker-Dealer Agents and Issuer Agents. For the purposes of 6 Del. C. §7316(a)(7), unethical practices by a broker-dealer agent or an issuer agent shall include, but not be limited to, the following conduct:

(1) Engaging in the practice of lending or borrowing money or securities from a customer, or acting as a custodian for money, securities or an executed stock power of a customer;

(2) Effecting securities transactions not recorded on the regular books or records of the broker-dealer that the agent represents, unless the transactions are authorized in writing by the broker-dealer prior to execution of the transaction;

(3) Establishing or maintaining an account containing fictitious information in order to execute transactions that would otherwise be prohibited;

(4) Sharing directly or indirectly in profits or losses in the account of any customer without the written authorization of the customer and the broker-dealer that the agent represents;

(5) Dividing or otherwise splitting the agent's commissions, profits or other compensation from the purchase or sale of securities with any person not also registered as an agent for the same broker-dealer or for a broker-dealer under direct or indirect common control;

(6) Where a recommendation is made that an unsophisticated customer purchase an over-the-counter security that (A) trades sporadically or in small volume, and (B) is not traded on any United States securities exchange (excluding the Spokane Exchange) or on the NASDAQ National Market System, failing to inform the customer that he may not be able to find a buyer if the customer would subsequently want to sell the security;

(7) Where a recommendation is made to purchase an over-the-counter security in which the asked price is greater than the bid by 25 percent or more, failing to inform the customer of the bid and the asked prices and of the significance of the spread between them should the customer wish to resell the security;

(8) Using excessively aggressive or high pressure sales tactics, such as repeatedly telephoning and offering securities to individuals who have expressed disinterest and have requested that the calls cease, or using profane or abusive language, or calling prospective customers at home at an unreasonable hour at night or in the morning;

(9) Conducting or facilitating securities transactions outside the scope of the agent's relationship with his broker-dealer employer unless he has provided prompt written notice to his employer;

(10) Acting or registering as an agent of more than one broker-dealer without giving written notification to and receiving written permission from all such broker-dealers; or

(11) Holding himself out as an objective investment adviser or financial consultant without fully disclosing his financial interest in a recommended securities transaction at the time the recommendation is made;

(12) Engaging in any of the conduct specified in subparagraph (b) above; or

(13) Aiding or abetting any of the conduct listed above.

(d) Prohibited practices in connection with investment company shares. For purposes of 6 Del. C. §7316(a)(7), unethical practices by a broker-dealer, broker-dealer agent or issuer agent shall include, but not be limited to, the following conduct:

(1) In connection with the offer or sale of investment company shares, failing to adequately disclose to a customer all sales charges, including asset based and contingent deferred sales charges, which may be imposed with respect to the purchase, retention or redemption of such shares;

(2) In connection with the offer or sale of investment company shares, stating or implying to a customer, either orally or in writing, that the shares are sold without a commission, are "no load" or have "no sales charge" if there is associated with the purchase of the shares a front-end loan, a contingent deferred sales load, a SEC Rule 12B-1 fee or a service fee which exceeds .25 percent of average net fund assets per year, or in the case of closed-end investment company shares, underwriting fees, commissions or other offering expenses;

(3) In connection with the offer or sale of investment company shares, failing to disclose to a customer any available sales charge discount on the purchase of shares in dollar amounts at or above a breakpoint or the availability of a letter of intent feature which will reduce the sales charges to the customer;

(4) In connection with the offer or sale of investment company shares, recommending to a customer the purchase of a specific class of investment company shares in connection with a multi-class sales charge or fee arrangement without reasonable grounds to believe that the sales charge or fee arrangement associated with such class of shares is suitable and appropriate based on the customer's investment objectives, financial situation and other securities holdings, and the associated transaction or other fees;

(5) In connection with the offer or sale of investment company shares, recommending to a customer the purchase of investment company shares which results in the customer simultaneously holding shares in different

(6) In connection with the offer or sale of investment company shares, recommending to a customer the liquidation or redemption of investment company shares for the purpose of purchasing shares in a different investment company portfolio having similar investment objectives and policies without reasonable grounds to believe that such recommendation is suitable and appropriate based on the customer's investment objectives, financial situation and other securities holdings and any associated transaction charges or other fees;

(7) In connection with the offer or sale of investment company shares, stating or implying to a customer, either orally or in writing, the fund's current yield or income without disclosing the fund's most recent average annual total return, calculated in a manner prescribed in SEC Form N-1A, for one, five and ten year periods and fully explaining the difference between current yield and total return; provided, however, that if the fund's registration statement under the Securities Act of 1933 has been in effect for less than one, five, or ten years, the time during which the registration statement was in effect shall be substituted for the periods otherwise prescribed;

(8) In connection with the offer or sale of investment company shares, stating or implying to a customer, either orally or in writing, that the investment performance of an investment company portfolio is comparable to that of a savings account, certificate of deposit or other bank deposit account without disclosing to the customer that the shares are not insured or otherwise guaranteed by the FDIC or any other government agency and the relevant differences regarding risk, guarantees, fluctuation of principal and/or return, and any other factors which are necessary to ensure that such comparisons are fair, complete and not misleading;

(9) In connection with the offer or sale of investment company shares, stating or implying to a customer, either orally or in writing, the existence of insurance, credit quality, guarantees or similar features regarding securities held, or proposed to be held, in the investment company's portfolio without disclosing to the customer other kinds of relevant investment risks, including but not limited to, interest rate, market, political, liquidity, or currency exchange risks, which may adversely affect investment performance and result in loss and/or fluctuation of principal notwithstanding the creditworthiness of such portfolio securities;

(10) In connection with the offer or sale of
investment company shares, stating or implying to a customer, either orally or in writing, (i) that the purchase of such shares shortly before an ex-dividend date is advantageous to such customer unless there are specific, clearly described tax or other advantages to the customer, or (ii) that a distribution of long-term capital gains by an investment company is part of the income yield from an investment in such shares;

(11) In connection with the offer or sale of investment company shares, making representations to a customer, either orally or in writing, that the broker-dealer or agent knows or has reason to know are based in whole or in part on information contained in dealer-use-only material which has not been approved for public distribution; or

(12) Aiding or abetting any of the conduct listed above.

(13) In connection with the offer or sale of investment company shares, the delivery of a prospectus shall not be dispositive that the broker-dealer or agent has fulfilled the duties set forth in the subparagraphs of this rule.

(e) The conduct set forth above is not exclusive. Engaging in other conduct such as forgery, embezzlement, theft, exploitation, nondisclosure, incomplete disclosure or misstatement of material facts, manipulative or deceptive practices, or aiding or abetting any unethical practice, shall be deemed an unethical business practice and shall also be grounds for denial, suspension or revocation of registration.

Part G. Investment Advisers and Investment Adviser Representatives

§700 Registration of Investment Advisors

(a) A person applying for a license as an investment adviser in Delaware shall make application for such license on Form ADV (Uniform Application for Investment Adviser Registration under the Investment Advisers Act of 1940). Amendments to such application shall also be made on Form ADV.

(b) The applicant shall file the following items with the Commissioner: (i) the application on Form ADV; (ii) the fee required by Section 7314 of the Act; (iii) a balance sheet prepared in accordance with Schedule G of Form ADV; (iv) a form U-2 (Uniform Consent to Service of Process); (v) a list of all investment adviser representatives employed by the investment adviser; and (vi) such other information as the Commissioner may reasonably require.

(c) Registration expires at the end of the calendar year. Any investment adviser may renew its registration by filing with the Commissioner an updated Form ADV, together with the fee required by Section 7314 of the Act and a list of all investment adviser representatives

(d) At least one investment adviser representative must be registered with any investment adviser to obtain or to maintain its license as an investment adviser.

§701 Registration of Investment Adviser Representatives

(a) A person applying for a license as an investment adviser representative in Delaware shall make application for such license on Form U-4 (Uniform Application for Securities Industry Registration or Transfer). Amendments to such application shall also be made on Form U-4.

(b) The applicant shall file the following items with the Commissioner: (i) the application on Form U-4; (ii) the fee required by Section 7314 of the Act; (iii) a certification that the applicant has successfully completed the Uniform Investment Adviser Law Examination (Series 65 or 66) administered by the NASD; (iv) a Form U-2 (Uniform Consent to Service of Process); and (v) such other information as the Commissioner may reasonably require. The Commissioner may waive the exam requirement upon good cause shown.

(c) Registration expires at the end of the calendar year. Any investment adviser representative may renew his or her registration by filing with the Commissioner a letter of intent to renew and the fee required by Section 7314 of the Act.

§702 Notice Filing Requirements for Federal Covered Advisers

(a) The notice filing for a federal covered adviser pursuant to 6 Del. C. §7314 shall be filed with the Commissioner on an executed Form ADV (Uniform Application for Investment Adviser Registration (17 C.F.R. §279)) and shall include: (i) the consent to service of process required by 6 Del. C. §7327, and (ii) the fee required by Section 7314 of the Act.

(b) The renewal of the notice filing for a federal covered adviser pursuant to Section 7314(b) of the Act shall be filed upon Form ADV-S (or Schedule 1, if adopted by the SEC) and shall contain the fee required by Section 7314(c) of the Act.

§703 Continuing Obligation of Registrants to Keep Information Correct

(a) Persons registering as investment advisers or investment adviser representatives are required to keep reasonably current the information set forth in their applications for registration and to notify the Commissioner of any material change to any information reported in their applications for registration.

(b) Failure to keep current the information set forth in an application or to notify the Commissioner of any material change to any information reported in the
application shall constitute a waiver of any objection to or claim regarding any action taken by the Commissioner in reliance on information currently on file with the Commissioner.

§704 Minimum Financial Requirements for Investment Advisers

(a) All investment advisers registered or required to be registered under the Act shall maintain at all times, regardless of any bond permitted under this Rule, a minimum net worth of $1.00. The amount of required minimum net worth for certain investment advisers shall be increased subject to subparagraphs (1) and (2) below. "Assets under management" for purposes of this rule shall mean the assets under management as disclosed on the adviser's current Form ADV or any schedule or supplement thereto filed with the Commissioner.

(1) An investment adviser registered or required to be registered under the Act who has custody of client funds or securities shall maintain at all times a minimum net worth of $35,000.00 or one percent of such adviser's assets under management, whichever is greater. Such investment adviser who is registered or required to be registered under the Act and has custody of client funds or securities and fails to meet the foregoing minimum net worth standard shall supplement the bond required in Rule 705 by increasing the bond value by the amount of net worth deficiency, rounded up to the nearest $5,000.00.

(2) An investment adviser registered or required to be registered under the Act who has discretionary authority over client funds or securities but does not have custody of client funds or securities, shall maintain at all times a minimum net worth of $10,000.00 or one-fifth of one percent of such adviser's assets under management, whichever is greater, unless such adviser posts a bond pursuant to Rule 705.

(b) Unless otherwise exempted, as a condition of the right to continue to transact business in this state, every investment adviser registered or required to be registered under the Act shall, by the close of business on the next business day, notify the Commissioner if such investment adviser's total net worth falls below the minimum required. After transmitting such notice, each investment adviser shall, by the close of business on the next business day, file a report with the Commissioner of its financial condition, including the following:

(1) A trial balance of all ledger accounts;

(2) A statement of all client funds, securities or assets which are not segregated;

(3) A computation of the aggregate amount of client ledger debit balances; and

(4) A statement as to the number of client accounts.

(c) For purposes of this Rule, the term "net worth"

(d) The Commissioner may require that a current appraisal be submitted in order to establish the worth of any asset.

(e) Every investment adviser that has its principal place of business in a state other than this state shall maintain such minimum capital as required by the state in which the investment adviser maintains its principal place of business, provided the investment adviser is licensed in such state and is in compliance with such state's minimum capital requirements.

§705 Bonding Requirements of Certain Investment Advisers

(a) Any bond required by this rule shall be issued by a company qualified to do business in this state in the form determined by the Commissioner and shall be subject to the claims of all clients of the investment adviser regardless of the clients' state of residence. "Assets under management" for purposes of this rule shall mean the assets under management as disclosed on the adviser's current Form ADV or any schedule or supplement thereto filed with the Commissioner.

(1) Every investment adviser registered or required to be registered under the Act having custody of client funds or securities shall be bonded in an amount equal to one percent of such adviser's assets under management, rounded up to the nearest $5000.00, up to a maximum bond of $100,000.00, exclusive of any supplemental bond required by Rule 704(d)(1)(a)(1). If an investment adviser having custody of client funds or securities fails to meet the minimum net worth requirement of Rule 704(a)(1), the adviser shall supplement the required bond pursuant to Rule 704(a)(1).

(2) Every investment adviser registered or required to be registered under the Act having discretionary authority over client funds or securities but not having custody of client funds or securities that fails to
meet the net worth requirements of Rule 704(a)(2) shall be bonded in an amount equal to the adviser's required net worth as determined under 704(a)(2), rounded up to the nearest $5000.00.

(b) An investment adviser that has its principal place of business in a state other than Delaware shall be exempt from the requirements of subsection (a) of this section, provided that the investment adviser is registered as an investment adviser in the state where it has its principal place of business and is in compliance with such state's requirements relating to bonding.

§706 Recordkeeping Requirements of Investment Advisers

(a) Every investment adviser registered or required to be registered under this Act shall make and keep true, accurate and current the following books, ledgers and records:

(1) Those books and records required to be maintained and preserved in compliance with Rule 204-2 of the Investment Advisers Act of 1940 (17 C.F.R. 275.204-2 (1996)), notwithstanding the fact that the investment adviser is not registered or required to be registered under the Investment Advisers Act of 1940.

(2) All trial balances, financial statements prepared in accordance with generally accepted accounting principles, and internal audit working papers relating to the investment adviser's business as an investment adviser. For purposes of this subsection, "financial statements" means balance sheets, income statements, cash flow statements and net worth computations as required by Rule 202(d)-1.

(3) A list or other record of all accounts with respect to the funds, securities, or transactions of any client.

(4) A copy in writing of each agreement entered into by the investment adviser with any client.

(5) A file containing a copy of each record required by Rule 204-2(11) of the Investment Advisers Act of 1940 including any communication by electronic media that the investment adviser circulates or distributes, directly or indirectly, to two or more persons (other than persons connected with the investment adviser).

(6) A copy of each written statement and each amendment or revision given or sent to any client or prospective client of the investment adviser in accordance with the provisions of Rule 706(b)(1) and a record of the dates that each written statement, and each amendment or revision was given or offered to be given to any client or prospective client who subsequently becomes a client.

(7) For each client that was obtained by the adviser by means of a solicitor to whom a cash fee was paid by the adviser, records required by Rule 206(4)-3 of the Investment Advisers Act of 1940, notwithstanding the

(8) All records required by Rule 204-2(16) of the Investment Advisers Act of 1940 including but not limited to electronic media that the investment adviser circulates or distributes, directly or indirectly, to two or more persons (other than persons connected with the investment adviser).

(9) A file containing a copy of all communications received or sent regarding any litigation involving the investment adviser or any investment adviser representative or employee, and regarding any customer or client complaint.

(10) Written information about each investment advisory client that is the basis for making any recommendation or providing any investment advice to such client.

(11) Written procedures to supervise the activities of employees and investment adviser representatives that are reasonably designed to achieve compliance with applicable securities laws and regulations.

(12) A file containing a copy of each document (other than any notices of general dissemination) that was filed with or received from any state or federal agency or self regulatory organization and that pertains to the registrant or its investment adviser representatives which file should contain, but is not limited to, all applications, amendments, renewal filings, and correspondence.

(b) (1) Books and records required to be made under the provisions of paragraph (a)(1) of this Rule shall be maintained and preserved in an easily accessible place for a period of not less than five years from the end of the fiscal year during which the last entry was made on such record, the first two years in the principal office of the investment adviser.

(2) Books and records required to be made under the provisions of paragraphs (a)(2)-(12), inclusive, of this Rule shall be maintained and preserved in an easily accessible place for a period of not less than five years from the end of the fiscal year during which the last entry was made on such record, the first two years in the principal office of the investment adviser, or for the time period during which the investment adviser was registered or required to be registered in the state, if less.

(3) Each investment adviser representative who is registered or required to be registered in this state and who has a business location in this state shall maintain at such business location (A) the records or copies required under the provisions of paragraphs(a)(3), (a)(7)-(10), (a)(14)-(15), (b), and (c), inclusive, of Rule 204-2 of the Investment Advisers Act of 1940; (B) the records or copies required under the provisions of paragraphs (a)(2)-(11), inclusive, of this Rule related to customers or clients
for whom the investment adviser representative provides or has provided investment advisory services; and (C) the records or copies required under the provision of paragraph (a)(11) and (a)(16) of Rule 204-2 of the Investment Advisers Act of 1940 which records or related records identify the name of the investment adviser representative or which identify the business location's physical address, mailing address, electronic mailing address, or telephone number. The records will be maintained for the period described in subsections (d) and (e) of Rule 204-2 of the Investment Advisers Act of 1940. The investment adviser shall be responsible for ensuring compliance with the provisions of this subsection.

(c) To the extent that the SEC promulgates changes to the above-referenced rules of the Investment Advisers Act of 1940, investment advisers in compliance with such rules as amended shall not be subject to enforcement action by the Commissioner for violation of this Rule to the extent that the violation results solely from the investment adviser's compliance with the amended rule.

(d) Every investment adviser that has its principal place of business in a state other than Delaware shall be exempt from the requirements of this section, provided the investment adviser is licensed in such state and is in compliance with the state's recordkeeping requirements.

§707 Use of the Internet for General Dissemination of Information on Products and Services

(a) Investment advisers and investment adviser representatives who use the Internet to distribute information on available products and services through communications made on the Internet directed generally to anyone having access to the Internet, and transmitted through postings on Bulletin Boards, displays on "Home Pages" or otherwise (an "Internet Communication") shall not be deemed to be "transacting business" in Delaware for purposes of Section 7313 of the Act based solely on the Internet Communication if the following conditions are met:

(1) The Internet Communication contains a legend in which it is clearly stated that:

(i) The investment adviser or representative in question may only transact business in this state if first registered, excluded or exempted from state investment adviser or representative registration requirement, as the case may be; and

(ii) follow-up individualized responses to persons in Delaware by such investment adviser or representative that involve the rendering of personalized investment advice for compensation will not be made absent compliance with state investment adviser or representative registration requirements, or an applicable exemption or exclusion;

(2) The Internet Communication contains a

(3) The Internet Communication does not involve the rendering of personalized advice for compensation in Delaware over the Internet, but is limited to the dissemination of general information on products and services; and

(4) In the case of a representative:

(i) the affiliation with the investment adviser is prominently disclosed within the Internet Communication;

(ii) the investment adviser with whom the representative is associated retains responsibility for reviewing and approving the content of any Internet Communication by the representative;

(iii) the investment adviser with whom the representative is associated first authorizes the distribution of information on the particular products and services through the Internet Communication; and

(iv) in disseminating information through the Internet Communication, the representative acts within the scope of the authority granted by the investment adviser;

(b) The position expressed in this rule extends to state investment adviser and

representative registration requirements only, and does not excuse compliance with applicable securities registration, antifraud or related provisions;

(c) Nothing in this rule shall be construed to affect the activities of any investment adviser and representative engaged in business in Delaware that is not subject to the jurisdiction of the Commissioner as a result of the National Securities Markets Improvements Act of 1996, as amended.

§708 Custody of Client Funds or Securities

It is unlawful for an investment adviser to take or have custody of any securities or funds of any client unless:

(a) The investment adviser notifies the Commissioner in writing that the investment adviser has or may have custody;

(b) The securities of each client are segregated, marked to identify the particular client having the beneficial interest in those securities, and held in safekeeping in a place reasonably free from risk of
destruction or other loss;

(c) All client funds are deposited as follows:

(1) In one or more bank accounts containing only clients' funds;

(2) The account or accounts are maintained in the name of the investment adviser as agent or trustee for the clients; and

(3) The investment adviser maintains a separate record for each account showing the name and address of the bank where the account is maintained, the dates and amounts of deposits in and withdrawals from the account, and the exact amount of each client's beneficial interest in the account;

(d) Immediately after accepting custody or possession of funds or securities from any client, the investment adviser notifies the client in writing of the place and manner in which the funds and securities will be maintained and subsequently, if or when there is a change in the place or the manner in which the funds or securities are maintained, the investment adviser gives written notice to the client;

(e) At least once every 3 months, the investment adviser sends to each client an itemized statement showing the client's funds and securities in the investment adviser's custody at the end of the period, and all debits, credits and transactions in the client's account during that period; and

(f) At least once every calendar year, an independent certified public accountant or public accountant verifies all client funds and securities by an actual examination, which shall be made at a time chosen by the accountant without prior notice to the investment adviser. A report stating that the accountant has made an examination of the client funds and securities in the custody of the investment adviser, and describing the nature and extent of the examination, shall be filed with the Commissioner within 30 days after each examination.

§709 Prohibited Practices

(a) A person who is an investment adviser, a federal covered adviser, or an investment adviser representative is a fiduciary and has a duty to act primarily for the benefit of the client. While the extent and nature of this duty varies according to the nature of the relationship with the client and the circumstances of each case, no investment adviser, federal covered adviser or representative shall engage in any unethical business practice including but not limited to the following:

(1) Recommending to a client, to whom investment supervisory, management or consulting services are provided, the purchase, sale, or exchange of any security without reasonable grounds to believe that the recommendation is suitable for the client on the basis of information furnished by the client after reasonable

(2) Exercising any discretionary power in placing an order for the purchase or sale of securities for a client without obtaining written discretionary authority from the client within ten business days after the date of the first transaction placed pursuant to oral discretionary authority, unless the discretionary power relates solely to the price at which, or the time when, an order involving a definite amount of a specific security that shall be executed, or both.

(3) Inducing trading in a client's account that is excessive in size or frequency in view of the client's financial resources and investment objectives and the character of the account.

(4) Placing an order to purchase or sell a security for the account of a client without authority to do so.

(5) Placing an order to purchase or sell a security for the account of a client upon instruction of a third party without first having obtained a written third party trading authorization from the client.

(6) Borrowing money or securities from a client, unless the client is a broker-dealer, an affiliate of the investment adviser, or a financial institution engaged in the business of loaning funds.

(7) Loaning money to a client, unless the investment adviser is a financial institution engaged in the business of loaning funds or the client is an affiliate of the investment adviser.

(8) To misrepresent to any advisory client, or prospective advisory client, the qualifications of the investment adviser or any employee of the investment adviser, or to misrepresent the nature of the advisory services being offered or fees to be charged for such service, or to omit to state a material fact necessary to make the statements made regarding qualifications, services, or fees, in light of the circumstances under which they are made, not misleading.

(9) Providing a report or recommendation to any advisory client prepared by someone other than the adviser without disclosing the fact; provided, however, that this prohibition does not apply to a situation where the adviser uses published research reports or statistical analyses to render advice or where an adviser orders such a report in the normal course of providing service.

(10) Charging a client an unreasonable advisory fee.

(11) Failing to disclose to clients, in writing, before any advice is rendered, any material conflict of interest relating to the adviser or any of its employees which could reasonably be expected to impair the rendering of unbiased and objective advice, including:

(i) Compensation arrangements connected
with advisory services which are in addition to compensation from such clients for such services; and

(ii) Charging a client an advisory fee for rendering advice when a commission for executing securities transactions pursuant to such advice will be received by the adviser or its employees.

(12) Guaranteeing a client that a specific result will be achieved (gain or no loss) with advice to be rendered.

(13) Publishing, circulating, or distributing any advertisement which does not comply with Rule 206(4)-1 under the Investment Advisers Act of 1940.

(14) Disclosing the identity, affairs, or investments of any client, unless required by law to do so, or unless consented to by the client.

(15) Taking any action, directly or indirectly, with respect to those securities or funds in which any client has any beneficial interest, where the investment adviser has custody or possession of such securities or funds when the adviser's action is subject to and does not comply with the requirements of Rule 206(4)-2 under the Investment Advisers Act of 1940.

(16) Entering into, extending, or renewing any investment advisory contract, unless such contract is in writing and discloses, in substance, the services to be provided, the term of the contract, the advisory fee, the formula for computing the fee, the amount of prepaid fee to be returned in the event of contract termination or non-performance, whether the contract grants discretionary power to the adviser, and that no assignment of such contract shall be made by the investment adviser without the consent of the other party to the contract.

(17) Failing to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information in violation of Section 204A of the Investment Advisors Act of 1940

(18) Entering into, extending, or renewing any advisory contract which would violate Section 205 of the Investment Advisers Act of 1940. This provision shall apply to all advisers registered or required to be registered under the Delaware Securities Act, notwithstanding whether such adviser would be exempt from federal registration pursuant to Section 203(b) of the Investment Advisers Act of 1940.

(19) To include in an advisory contract any condition, stipulation, or provision binding any person to waive compliance with any provision of the Delaware Securities Act, any rule promulgated thereunder, the Investment Advisers Act of 1940, or any rule promulgated thereunder, or to engage in any other practice that would violate Section 215 of the Investment Advisers Act of 1940.

(20) Engaging in any act, practice, or course of

(21) Engaging in any conduct, indirectly or through or by any other person, which would be unlawful for such person to do directly under the provisions of the Delaware Securities Act or any rule thereunder.

(22) Aiding or abetting any of the conduct listed above.

(b) The conduct set forth in subparagraph (a) of this Rule is not exclusive. Engaging in other conduct such as forgery, embezzlement, theft, exploitation, non-disclosure, incomplete disclosure or misstatement of material facts, manipulative or deceptive practices, or aiding or abetting any unethical practice, shall be deemed an unethical business practice and shall also be grounds for denial, suspension or revocation of registration. The federal statutory and regulatory provisions referenced herein shall apply to all investment adviser representatives and federal covered advisers, to the extent permitted by the National Securities Markets Improvement Act of 1996 (Pub. L. No. 104-290).

CROSS-REFERENCE TO EXISTING REGULATIONS

Cross-Reference to Existing Rules and Regulations

Existing Rule Proposed

5 Registration by Coordination Repealed New Rule 400

5(a) Registration of Regulation A

offerings Repealed New Rule 402

5(c)(2) Time for Filing Repealed New Rule 400

5(c)(2)(A) Filing date Repealed

6 Registration by Qualification Repealed New Rule 401

6(A) Prospectus Repealed New Rule 401

6(b)(17) Additional information Repealed New Rule 401

6(e) Fees for registration by

qualification Revised New Rule 404

6(e)(A) Requests for rulings Revised New Rule 102(h)

7(c) Omissions Repealed

7(e) Reports during effectiveness Repealed

7(f) Investment companies' filings Repealed New Rule 403

7(g) Post-registration reports Repealed New Rule 405

8 Stop orders Repealed New Rules 260,

264, 265

9(a)(8) Exchange - Listing Revised New Rule 501

9(a)(13) NASDAQ listings Repealed

9(a)(13)(A) NASDAQ/National

Market System exemption Repealed New Rule 500

9(b)(2)(i) Recognized securities manuals Revised New Rule 508

9(b)(2)(ii) Removal of exemptions Repealed

9(b)(3) Unsolicited sales Renumbered New Rule 509

9(b)(9)(I) Private offering exemptions Repealed New Rule 502

9(b)(9)(II) Regulation D offerings Repealed New Rule 500

9(d) Exemption confirmation Revised New Rule 51012 Sales literature Repealed New Rule 406

14(a) Application for registration as

A broker-dealer or an agent Revised New Rules 600,

601, 602

14(a)(A) Registration of investment

advisers Revised New Rules 700,

701

14(a)(2) Current information Revised New Rule 603

14(B) Examination Repealed New Rules 601,

602, 701

14(d) Net capital and aggregate

indebtedness Repealed New Rule 604

14(e) Surety bonds Repealed New Rule 605.

14(f) Registration under Section 7314(f) Repealed

14(f)(A) Registration of applicants for

Membership in NYSE,

ASE or in NASD Repealed

15(a)(A) Records of broker-dealers Repealed New Rule 606

15(a)(B) Records of broker-dealers Repealed New Rule 606

15(b) Financial reports required of

broker-dealers Repealed New Rule 605

18(a) Meaning of regulations under

Section 7318(a) Repealed

21 Escrow requirements Repealed

25(c) Publication of rules Repealed New Rule 102(g)

26(a) Central Registration Depository

System - Broker-dealer and

agent applicants Repealed New Rules 600,

601, 602

26(b) Administrative files Repealed New Rule 102(g)

73(l)(1) Hearing practices and

procedures Repealed New Rules 200-

272

DEPARTMENT OF LABOR

Division of Employment & Training

Governor's Advisory Council on Apprenticeship and Training

Statutory Authority: 19 Delaware Code, Section 202 (a) (19 Del.C. §202(a))

Notice of Proposed Rule Changes:

Summary:

The Governor's Council on Apprenticeship and Training proposes to recommend rule changes at its regular meeting on March 10, 1998 at Buena Vista Conference Center 661 South Dupont Highway, New Castle, DE 19720. Changes are proposed to certain definitions in Sec. 106.2 including Administrator, Apprentice, Full time, Apprenticeship Standards, Council, Delaware resident contractor, On-site visit, Registrant or sponsor, and Registration Supervisory inspection. In addition, changes are proposed to Sec. 106.3, 106.5, 106.6, 106.7

Comments:

Copies of the proposed rules are published in the Delaware Register of Regulation and are on file at the Department of Labor, Division of Employment and

Public Hearing:

A public hearing on the changes will be held during the regular meeting of the Council at 10:00 a.m. on March 10, 1998 at Buena Vista Conference Center, 661 South Dupont Highway, New Castle, DE where interested persons can present their views.

APPRENTICESHIP PROGRAMS

REGULATIONS AND STANDARDS

OF DELAWARE DEPARTMENT OF LABOR

DIVISION OF EMPLOYMENT AND TRAINING

OFFICE OF APPRENTICESHIP AND TRAINING

In cooperation with:

U.S. Department of Labor

Bureau of Apprenticeship & Training

INDEX

SECTION

NUMBER SECTION PAGE

106.1 Purpose and Scope 1

Declaration of Policy 2

106.2 Definitions 3

106.3 Eligibility and Procedure

for State Registration 8

106.4 Criteria For Apprenticeable

Occupations 12

106.5 Standards of Apprenticeship 13

106.6 Apprenticeship Agreement 23

106.7 Deregistration of State Registered

Program 25

106.8 Complaints 30

106.9 Hearing 30

106.10 Reinstatement of Program Registration 32

106.11 Program Registration Denial 33

106.12 Amendment to the Regulations

In This Part

* Please note that the above page numbers refer to the original document, not to pages in the Register.

PURPOSE AND SCOPE

(A) Section 204, Chapter 2, Title 19, Delaware Code authorizes and directs the Department of Labor to
formulate regulations to promote the furtherance of labor standards necessary to safeguard the welfare of Apprentices and to extend the applications of such standards by requiring their inclusion in apprenticeship contracts.

(B) The purpose of this chapter is to set forth labor standards to safeguard the welfare of Apprentices and to extend the application of such standards by prescribing policies and procedures concerning the registration of acceptable Apprenticeship Programs with the Delaware Department of Labor.

(C) These labor standards and procedures cover the Registration and Cancellation of Apprenticeship Agreements and of Apprenticeship Programs; and matters relating thereto. Any questions [and/or] to request a copy of Delaware's Prevailing Wage Regulations regarding the employment of apprentices on state-funded construction projects must be referred to:

Delaware Department of Labor

Office of Labor Law Enforcement

4425 North Market Street

Wilmington, DE 19802

(302) 761-8200

DECLARATION OF POLICY

It is declared to be the policy of this State to:

(A) encourage the development of an apprenticeship and training system through the voluntary cooperation of management and workers and interested State agencies and in cooperation with other states and the federal government;

(B) provide for the establishment and furtherance of Standards of Apprenticeship and Training to safeguard the welfare of Apprentices and trainees;

(C) aid in providing maximum opportunities for unemployed and employed persons to improve and modernize their work skills; and

(D) contribute to a healthy economy by aiding in the development and maintenance of a skilled labor force sufficient in numbers and quality to meet the expanding needs of industry and to attract new industry.

SEC. 106.2 DEFINITIONS

As used in this part:

(A) "ADMINISTRATOR" refers to the Administrator of the Apprenticeship and Training Section for the State Department of Labor.

"ADMINISTRATOR" refers to the Administrator of the Office of Apprenticeship and Training for the State Department of Labor.

(B) "AGREEMENT" refers to a written agreement between an Apprentice and either his/her employer or an Apprenticeship Committee acting as agent for the

(C) "APPRENTICE" refers to a person at least sixteen years of age who is engaged "FULL TIME" in learning a recognized skilled trade through actual work experience under the supervision of Journeypersons. This person must have entered into a written Apprenticeship Agreement with a registered apprenticeship Sponsor. The training must be supplemented with properly coordinated studies of related technical instruction.

"FULL TIME" refers to a position which is employed a minimum of forty (40) hours per week, eight (8) hours per day in the classifications as stated in the Apprenticeship Agreement under which the Apprentice is Registered. At no time shall the Apprentice be employed at a job classification other than those to which the Apprentice is Registered.

(D) "APPRENTICESHIP STANDARDS" refers to the document which embodies the procedure for the selection and the training of apprentices, setting forth the terms of the training, including wages, hours, conditions of employment, training on the job, and related instruction. The duties and responsibilities of the Sponsor, including administrative procedures, are set forth in their company's policies.

(E) "BAT" refers to the U.S. Department of Labor, Bureau of Apprenticeship and Training.

(F) "CANCELLATION" refers to the deregistration of a Program or the Termination of an Agreement.

(G) "COMMITTEE" refers to those persons designated by the Sponsor to act on its behalf in the administration of the Apprenticeship Program. A Committee may be "joint" i.e., it is composed of an equal number of representatives of the employer(s) and of the employee(s) represented by a bona fide collective bargaining agent(s) and has been established to conduct, operate or administer a Program and enter into Agreements with Apprentices. A Committee may be "unilateral" or "non-joint" and shall mean a Program Sponsor in which a bona fide collective bargaining agent is not a participant.

(H) "COUNCIL" refers to the State's Governor's Advisory Council On Apprenticeship and Training.

(I) "DELAWARE RESIDENT CONTRACTOR" includes any general contractor, prime contractor, construction manager, subcontractor or other type of construction contractor who regularly maintains a place of business in Delaware. Regularly maintaining a place of business in Delaware does not include site trailers, temporary structures associated with one contract or set of related contracts, nor the holding, nor the maintaining of a post office box within this State. The specific intention of this definition is to maintain consistency with Title 30, Delaware Code, "Resident Contractor".

(J) "DIRECTOR" refers to the Director of the Division of Employment and Training.

(K) "DIVISION" refers to the Division of Employment and Training, Department of Labor, state of Delaware.

(L) "EMPLOYER" refers to any person or organization employing an Apprentice, whether or not such person or organization is a party to an Apprenticeship Agreement.

(M) "JOURNEYPERSON" refers to a worker who is fully qualified as a skilled worker in a given craft or trade.

(N) "ON-SITE VISIT" refers to a visit from a representative of the State of Delaware, Department of Labor, Division of Employment and Training to the office and/or the actual field job-site of the Sponsor, for the purposes of inspecting and/or monitoring the progress and training of the Registered Apprentice. This monitoring may include but is not limited to interviewing the Apprentice and the auditing of pertinent documents relative to the maintenance and enforcement of the terms of the Apprenticeship Agreement.

(O) "PROGRAM" refers to an executed apprenticeship plan which contains all terms and conditions for the qualifications, recruitment, selection, employment and training of Apprentices, including such matters as the requirements for a written Apprenticeship Agreement.

(P) "REGISTRANT OR SPONSOR" refers to any person, association, committee or organization in whose name or title the Program is (or is to be) registered or approved regardless of whether or not such entity is an Employer. To be eligible, the Registrant or Sponsor must be a "Delaware Resident Contractor" or hold and maintain a "Delaware Resident Business License". The Registrant or Sponsor must hold and maintain a permanent place of business, not to include site trailers or other facilities serving only one contract or related set of contracts. To be eligible to be a Registrant or Sponsor, Employer/Business, association, committee or organization must have the training program and an adequate number of Journey persons to meet the ratio requirements as stated for that particular apprenticeable occupation.

(Q) "REGISTRATION" refers to the acceptance and recording of an Apprenticeship Program by the Delaware Department of Labor, Office of Apprenticeship & Training, as meeting the basic standards and requirements of the Division for approval of such Program. Approval is evidenced by a Certificate or other written indicia documentation. Registration also refers to the acceptance and recording of Apprenticeship Agreements thereof, by the Delaware Department of Labor, Office of Apprenticeship & Training as evidence of the participation of the Apprentice in a particular Registered apprenticeship Program.

(S) "SECRETARY" refers to the Secretary of Labor.

(T) "STATE" refers to the state of Delaware

(U) "SUPERVISORY INSPECTION" shall mean the same as "ON SITE VISIT".

SEC. 106.3 ELIGIBILITY AND PROCEDURE FOR STATE REGISTRATION

(A) No Program or Agreement shall be eligible for State Registration unless it is in conformity with the requirements of this chapter, and the training is in an apprenticeable occupation having the characteristics set forth in SEC. 106.4 herein.

(B) Apprentices must be individually registered under a Registered Program with the State of Delaware, Department of Labor, Division of Employment and Training. Such Registration shall be effected by filing copies of each Agreement with the State. Sponsors registered with states other than the State of Delaware shall not be construed as being registered for State of Delaware Apprenticeship Program Registration purposes.

(C) The State must be properly notified through the proper office Department of Labor, Division of Employment & Training, Office of Apprenticeship & Training of cancellation, suspension or termination of any Agreements, (with cause for same) and of apprenticeship completions. The State will attempt, where applicable, to verify the cause of apprenticeship termination.

(D) Approved Programs shall be accorded Registration, evidenced by a Certificate of Registration. The Certificate of Registration for an approved Program will be made in the name of the Program Sponsor and must be renewed every four (4) years.

(E) Any modification(s) or change(s) to registered standards shall be promptly submitted to the State through the appropriate office no later than thirty (30) days and, if approved, shall be recorded and acknowledged as an amendment to such standards.

(F) The request for registration and all documents and data required by this chapter shall be submitted in triplicate. Individual Agreements shall be submitted to the State Apprenticeship and Training Office for Registration no later than thirty (30) calendar days after the trainee has started work in the registered Program. Agreements submitted after said time shall be considered a violation of the rules and regulations and will not be honored.

(G) Under a Program proposed for Registration by an Employer or Employer's Association, where the standards, collective bargaining agreement or other instrument provides for participation by a union in any
way in the operation of the Program, and such participation is exercised, written acknowledgment of a union agreement or "no objection" to the Registration is required. Where no such participation is evidenced and practiced, the Employer shall simultaneously furnish to the union a copy of its Program application. In addition, upon receipt of the application for the Program, the State shall promptly send by certified mail to such local union another copy of the Program application and together with a notice that union comments will be accepted for thirty (30) days after the date of the agency transmittal.

(H) Where the employees to be trained have no collective bargaining agent, a program plan may be proposed for Registration by an Employer or groups of Employers.

(I) A Program may be Registered Sponsor may register Programs in one or more occupations simultaneously or individually with the provision that the Program Sponsor shall, within sixty (60) days of Registration, be actively training Apprentices on the job, and related study must begin within twelve (12) months for in each occupation for which Registration is granted. At no time shall an individual Apprentice be employed in more than one (1) occupation, nor signed to more than one (1) Apprenticeship Agreement at any given time.

(J) Each occupation for which a Program Sponsor holds Registration shall be subject to Cancellation if no active training of Apprentices on the job has occurred within a consecutive one hundred eighty (180) day period, or if no Related Instruction has begun within a twelve (12) month period from the date of Registration or in any twelve (12) month period during the duration of that Agreement.

(K)Each Sponsor of a Program shall submit to an on-site inspection or supervisory visit and shall make all documents pertaining to the Registered Program available to appropriate representatives of the Apprenticeship and Training Office or designated service personnel upon request.

(L) Each Sponsor shall be so routinely examined , by the Office of Apprenticeship and Training, at least annually, but not more than every six (6) months, unless a specific violation is suspected or a specific document is being investigated.

(M) The Sponsor shall notify the State Registration Agency of termination or lay-off from employment of a Registered Apprentice or of the completion of the terms of the Apprenticeship Agreement within thirty (30) calendar days of such occurrence.

(N) The Sponsor shall notify the State of failure to obtain and register the Apprentice in an approved course of Related Instruction as stated and detailed on the Apprenticeship Agreement within (30) calendar days of such occurence.

SEC.106.4 CRITERIA FOR APPRENTICEABLE OCCUPATIONS

An APPRENTICEABLE occupation is a skilled trade which possesses all of the following characteristics:

(A) It is customarily learned in a practical way through training and work on the job.

(B) It is clearly identified and commonly recognized throughout the industry, or recognized with a positive view towards changing technology or approved by the Delaware Department of Labor, Office of Apprenticeship & Training.

(C) It involves manual, technical or mechanical skills and knowledge which require a minimum of two thousand (2,000) hours of on-the-job training, not including the time spent in Related Instruction.

(D) It customarily requires Related Instruction to supplement the on-the-job training.

(E) It involves the development of skills sufficiently broad enough to be applicable in similar occupations throughout the industry, rather than a restricted application to the products or services of any one company.

SEC. 106.5 STANDARDS OF APPRENTICESHIP

The following standards are prescribed for a Program.

(A) The Program must include an organized, written plan delineating the terms and conditions of employment. The training and supervision of one or more Apprentices in an apprenticeable occupation must become the responsibility of the Sponsor who has undertaken to carry out the Apprentice's training program.

(B) The standards must contain provisions concerning the following:

(1) The employment and training of the Apprentice in a skilled occupation;

(2) an equal opportunity pledge stating the recruitment, selection, employment and training of Apprentices during their apprenticeships shall be without discrimination based on: race, color, religion, national origin or sex. When applicable, an affirmative action plan in accordance with the State's requirements for federal purposes must be instituted;

(3) the existence of a term of apprenticeship, not less than one year or two thousand (2,000) hours consistent with training requirements as established by industry practice;

(4) an outline of the work processes in which the Apprentice will receive supervised work experience and
on-the-job training, and the allocation of the approximate time to be spent in each major process;

(5) provision for organized related and supplemental instruction in technical subjects related to the trade. A minimum of one hundred forty-four (144) hours for each year of apprenticeship is required. Such instruction may be given in a classroom, through trade, industrial or approved correspondence courses of equivalent value or in other forms approved by the State Department of Labor; Office of Apprenticeship & Training

(6) a progressively increasing schedule of wage rates to be paid the Apprentice, consistent with the skill acquired which shall be expressed in percentages of the established Journeyperson's hourly wage;

(7) Minimum Wage Progression for 1 through 7 year Apprentice Program as follows:

1) 1 to 7 year programs

2) starting pay must be at least minimum wage

3) final period must be at least 85%

1 YEAR [OR] 2,000 HOUR APPRENTICESHIP PROGRAM:

1st 1,000 hours: 40%

2nd 1,000 hours: 85%

2 YEAR [OR] 4,000 HOUR APPRENTICESHIP PROGRAM:

1st 1,000 hours: 40%

2nd 1,000 hours: 51%

3rd 1,000 hours: 63%

4th 1,000 hours: 85%

3 YEAR [OR] 6,000 HOUR APPRENTICESHIP PROGRAM:

1st 1,000 hours: 40%

2nd 1,000 hours: 48%

3rd 1,000 hours: 57%

4th 1,000 hours: 65%

5th 1,000 hours: 74%

6th 1,000 hours: 85%

4 YEAR [OR] 8,000 HOUR APPRENTICESHIP PROGRAM:

1st 1,000 hours: 40%

2nd 1,000 hours: 46%

3rd 1,000 hours: 53%

4th 1,000 hours: 59%

5th 1,000 hours: 65%

6th 1,000 hours: 71%

7TH 1,000 hours: 78%

8th 1,000 hours: 85%

5 YEAR [OR] 10,000 HOUR APPRENTICESHIP PROGRAM:

1st 1,000 hours: 40%

2nd 1,000 hours: 45%

3rd 1,000 hours: 50%

4th 1,000 hours: 55%

6th 1,000 hours: 65%

7TH 1,000 hours: 70%

8th 1,000 hours: 74%

9th 1,000 hours: 79%

10th 1,000 hours: 85%

6 YEAR [OR] 10,000 HOUR APPRENTICESHIP PROGRAM:

1st 1,000 hours: 40%

2nd 1,000 hours: 44%

3rd 1,000 hours: 48%

4th 1,000 hours: 52%

5th 1,000 hours: 56%

6th 1,000 hours: 60%

7TH 1,000 hours: 64%

8th 1,000 hours: 68%

9th 1,000 hours: 72%

10th 1,000 hours: 76%

11th 1,000 hours: 81%

12th 1,000 hours: 85%

7 YEAR [OR] 10,000 HOUR APPRENTICESHIP PROGRAM:

1st 1,000 hours: 40%

2nd 1,000 hours: 43%

3rd 1,000 hours: 47%

4th 1,000 hours: 50%

5th 1,000 hours: 54%

6th 1,000 hours: 57%

7TH 1,000 hours: 61%

8th 1,000 hours: 64%

9th 1,000 hours: 68%

10th 1,000 hours: 71%

11th 1,000 hours: 74%

12th 1,000 hours: 78%

13th 1,000 hours: 81%

14th 1,000 hours: 85%

(8) that the entry Apprentice wage rate shall not be less than the minimum prescribed by State statute or by the Fair Labor Standards Act, where applicable;

(9) That the established Journeyperson's hourly rate applicable among all participating Employers be stated in dollars and cents. No Apprentice shall receive an hourly rate less than the percentage for the period in which he/she is serving applied to the established Journeyperson's rate unless the Sponsor has documented the reason for same in the individual Apprentice's progress report and has explained the reason for said action to the Apprentice and Registration Agency.

In no case other than sickness or injury on the part of the Apprentice, shall a Sponsor hold back an Apprentice's progression more than one period or wage increment
without the written consent of the Administrator;

(10) That the established Journeyperson's rate provided for by the Standards be reviewed and/or adjusted annually. Sponsors of Programs shall be required to give proof that all employees used in determining ratios of Apprentices to Journeypersons shall be receiving wages at least in the amount set for Journeypersons in their individual program standards, or are qualified to perform as Journey persons and must be paid at least the minimum journeyperson rate;

(11) that the minimum hourly Apprentice wage rate paid during the last period of apprenticeship not be less than eighty-five (85) percent of the established Journeyperson wage rate. Wages covered by a collective bargaining agreement takes precedent over this section. However, wages may not be below the State's required minimum progression.

(C) The Program must include a periodic review and evaluation of the Apprentice's progress in job performance and related instruction, and the maintenance of appropriate progress records.

(D) The ratio of Apprentices to Journeypersons should be consistent with proper supervision, training and continuity of employment or applicable provisions in collective bargaining agreements. The ratio of Apprentices to Journeypersons shall be one Apprentice to each five (5) Journeypersons employed by the prospective Sponsor. More restrictive ratios will be granted upon request. More liberal ratios may be granted only after the requesting Sponsor has demonstrated that the number of Apprentices to be trained shall be in relation to:

(1) the needs of the plant and/or trade in the community with consideration for growth and expansion;

(2) the facilities and personnel available for training are adequate; and

(3) a reasonable opportunity that employment of skilled workers on completion exists.

The following ratios will be recognized as standard for the trades of:

Apprentice up to Journeyperson

Carpenter 1 5

Plumber/Pipefitter 1 5

Sheet Metal Worker 1 4

Insulation Worker 1 4

Electrician 1 3

If a "collective bargaining agreement" exists and stipulates a ratio of Apprentices to Journey persons, it shall prevail. Provided the Bargaining Ratio is not lower than the State standard.

(E) At least forty (40) percent of all Apprentices registered must complete training. Apprentices who voluntarily terminate their apprenticeships or employment shall not be counted in reference to this section. Programs

(F) A probationary period shall be in relation to the full apprenticeship term with full credit toward completion of apprenticeship.

(G) Adequate and safe equipment facilities for training and supervision and safety training for Apprentices on the job and in Related Instruction are required.

(H) The required minimum qualifications for persons entering an Apprentice Program as defined n Section 106.2(C) must be met.

(I) Apprentices must sign an Agreement. The Agreement shall directly, or by reference, incorporate the standards of the Program as part of the Agreement.

(J) Advance standing or credit up to one quarter 25% OJT hours of the particular trade term in question for previously acquired experience, training skills, or aptitude for all applicants equally, with commensurate wages for any accorded progression step may be granted. The granting of a greater amount of credit shall be set at the discretion of the Administrator based on supportive documentation submitted by the Sponsor. In no case shall more than one half of the particular trade term in question be granted unless the time in question has been spent in an approved State or Federally Registered Program.

(K) Transfer of Employer's training obligation through the sponsoring Committee if one exists and as warranted, to another Employer with consent of the Apprentice and the Committee or Program Sponsors, with full credit to the Apprentice for satisfactory time and training earned, may be afforded with written notice to, and approval of, the Registration Agency.

(L) These Standards shall contain a statement of assurance of qualified training personnel.

(M) There will be recognition for successful completion of apprenticeship evidenced by an appropriate certificate.

(N) These Standards shall contain proper identification of the Registration Agency, being the Department of Labor, Division of Employment & Training, Office of Apprenticeship & Training.

(O) There will be a provision for the Registration, Cancellation and Deregistration of the Program, and a requirement for the prompt submission of any modification or amendment thereto.

(P) There will be provisions for Registration of Agreements, modifications and amendments, notice to the Division of persons who have successfully completed Programs, and notice of Cancellations, suspensions and terminations of Agreements an causes therefore.

(Q) There will be a provision giving authority for the termination of an Agreement during the probationary period by either party without stated cause.

(R) There will be provisions for not less than five (5) days notice to Apprentices of any proposed adverse action and cause therefore with stated opportunity to Apprentices during such period for corrective action. unless other acceptable procedures are provided for in a collective bargaining agreement.

(S) There will be provisions for a grievance procedure, and the name and address of the appropriate authority under the program to receive, process and make disposition of complaints.

(T) There will be provisions for recording and maintaining all records concerning apprenticeships as may be required by the State or Federal law.

(U) There will be provisions for a participating Employer's Agreement.

(V) There will be funding formula providing for the equitable participation of each participating Employer in funding of a group Program where applicable.

(W) All Apprenticeship Standards must contain articles necessary to comply with federal laws, regulations and rules pertaining to apprenticeship.

(X) Programs and Standards of Employers and unions in other than the building and construction industry which jointly form a sponsoring entity on a multi-state basis and are registered pursuant to all requirements of this part by any recognized State apprenticeship agency shall be accorded Registration of approval reciprocity by the Delaware Department of Labor if such reciprocity is requested by the sponsoring entity. However, reciprocity will not be granted in the Building and Construction industry based on Title 29 CFR 29 Section 12(b) unless a "memorandum of understanding" has been signed by individual state and the state of Delaware.

SEC. 106.6 APPRENTICESHIP AGREEMENT

The Apprenticeship Agreement shall contain:

(A) the names and signatures of the contracting parties (Apprentice and the program Sponsor or Employer), and the signature of a parent or guardian if the Apprentice is a minor;

(B) the date of birth of the Apprentice;

(C) the name and address of the program Sponsor and the Registrant;

(D) the Apprentice's social security number;

(E) a statement of the trade or craft which the Apprentice is to be taught, and the beginning date and term (duration) of apprenticeship;

(F) the number of hours to be spent by the Apprentice in work on the job;

(G) the number of hours to be spent in Related and Supplemental Instruction is recommended to be not less than one hundred forty-four (144) hours per year;

(H) provisions relating to a specific period of probation during which the Apprenticeship Agreement

(I) provisions that, after the probationary period, the Agreement may be suspended, canceled or terminated for good cause, with due notice to the Apprentice and a reasonable opportunity for corrective action, and with written notice to the Apprentice and the Registrant of the final action taken;

(J) a reference incorporating, as part of the Agreement, the standards of the Apprenticeship Program as it exists on the date of the Agreement or as it may be amended during the period of the Agreement;

(K) a statement that the Apprentice will be accorded equal opportunity in all phases of apprenticeship employment and training without discrimination based on race, color, religion, national origin, marital status, or sex, or disability;

(L) a statement that, if an Employer is unable to fulfill his obligation under his Agreement, the Agreement may, with consent of the Apprentice and Committee, if one exists, be transferred to another Employer under a Registered Program with written notice of the transfer to the Registrant, and with full credit to the Apprentice for satisfactory time and training earned;

(M) the name and address of the appropriate authority, if any, designated under the program to receive, process and make disposition of controversies or differences which cannot be adjusted locally or resolved in accordance with the established trade procedure or applicable collective bargaining provisions;

(N) a statement setting forth a schedule of work processes in the trade or industry in which the Apprentice is to be trained and the approximate time to be spent at each process;

(O) a statement of the graduated scale of wages to be paid the Apprentice and whether or not the required school time shall be compensated;

(P) a statement that in the event the Registration of the Program has been Canceled or revoked, the Apprentice will be notified within fifteen (15) days of the event.

SEC. 106.7 DEREGISTRATION BY STATE

(A) Deregistration proceedings may shall be undertaken when the Program is not conducted, operated or administered in accordance with the Registration standards and the requirements of this chapter;

(B) Where it appears the Program is not being operated in accordance with the Registered standards or with the requirements of the chapter, the Administrator shall so notify the Program Registrant in writing;

(C) The notice shall be sent by registered or certified mail, return receipt requested, and shall state the deficiency(s) or violation(s);

(D) It is declared to be the policy of this State to:

(1) deny the privilege of operation of a Program to persons who, by their conduct and record, have demonstrated their indifference to the aforementioned policies; and

(2) discourage repetition of violations of rules and regulations governing the operation of Registered Apprenticeship Programs by individuals, Sponsors, or Committees against the prescribed policies of the State, and its political subdivisions, and to impose increased and added deprivation of the privilege to operate Programs against those who have been found in violation of these rules and regulations;

(3) deregister a Program either upon the voluntary action of the Registrant by a request for cancellation of the Registration, or upon notice by the State to the Registrant stating cause, and instituting formal deregistration proceedings in accordance with the provisions of this chapter;

(4) at the request of Sponsor, permit the Administrator to cancel the Registration of a Program by a written acknowledgment of such request stating, but not limited to, the following:

(a) the Registration is canceled at Sponsor's request and giving the effective date of such cancellation.

(b) that, within fifteen (15) working days of the date of the acknowledgment, the Registrant must notify all Apprentices of such Cancellation and the effective date that such Cancellation automatically deprives the Apprentice of his/her individual Registration.

(E) Any Sponsor who violates major provisions of the rules repeatedly, as determined by the Administrator of Apprenticeship and Training (three or more violations in any given twelve month period), shall be sent a notice which shall contain the violations and will inform the Sponsor that the Program will be placed in a probationary status for the next six (6) month period. Any new major violations in this period shall constitute cause for deregistration. In such a case, the Administrator shall notify the chairman of the Apprenticeship and Training Council, who shall convene the Council.

The Sponsor in question will be notified of said meeting and may present whatever facts, witnesses, etc., that the Sponsor deems appropriate. After said hearing, the Council shall make a recommendation based on the facts presented to the Secretary, as to whether the Program should be deregistered. The Secretary's decision shall be final and binding on the matter.

(F) Sponsors with fewer than three (3) violations shall be sent a notice by registered or certified mail, return receipt requested, stating the deficiencies found and the remedy required and shall state that the Program will be deregistered for cause unless corrective action is taken within thirty (30) days. Upon request by Registrant, the thirty (30) day period may be extended for up to an

(G) If the required action is not taken within the allotted time, the Administrator shall send a notice to the Registrant by registered or certified mail, return receipt requested, stating the following:

(1) this notice is sent pursuant to this subsection;