Section 854.41 - Set-Aside Fees(a) The Agency requires managers to pay a set-aside fee based on the monthly net proceeds of their BET facilities. The purposes of requiring this payment are: (1) to promote to the greatest possible extent the concept of a manager being an independent business individual;(2) to cause BET to be to the greatest extent possible, self-supporting;(3) to encourage and stimulate growth in BET; and(4) to provide incentives for the increased employment opportunities for blind individuals physically present in Texas.(b) Use of funds. To the extent permitted or required by applicable laws, rules, and regulations, the funds collected as set-aside fees shall be used by the Agency for the following purposes:(1) maintenance and replacement of equipment for use in BET;(2) purchase of new equipment for use in BET;(4) ensuring a fair minimum return to managers; and(5) the establishment and maintenance of retirement or pension funds, health insurance contributions, and provision for paid sick leave and vacation time if it is so determined by a majority vote of licensed managers, after the Agency provides to each such manager information on all matters relevant to these proposed purposes.(c) Method of computing net proceeds.(1) Net proceeds are the amount remaining from the sale of merchandise of a BET facility, all vending machine income, and other income accruing to the manager from the facility after deducting the reasonable and necessary cost of such sale, but excluding set-aside charges required to be paid by the manager. The manager shall not remove any items from the inventory or other stock items of the facility unless the manager pays for those items at the actual cost.(2) Costs of sales that may be deducted from net sales to calculate net proceeds in a reporting period shall be limited to:(A) cost of merchandise sold;(B) wages paid to employees;(D) the following reasonable miscellaneous operating expenses that are directly related to the operation of the BET facility. Discretionary expenses, not to exceed 1.5 percent of the monthly net sales, or $150, whichever is greater. Expenses must be verifiable, invoiced, and directly related to the operation of the facility. Acceptable expenses include:(i) rent and utilities authorized in the permit or contract;(ii) business taxes, licenses, and permits;(iii) telecommunication services;(iv) liability, property damage, and fire insurance;(v) worker's compensation insurance;(vi) employee group hospitalization or health insurance;(vii) employee retirement contributions (the plans must be IRS-approved and not for the manager);(viii) janitorial services, supplies, and equipment;(ix) bookkeeping and accounting services;(x) trash removal and disposal services;(xi) service contracts on file with the Agency;(xii) legal fees directly related to the operation of the facility (legal fees directly or indirectly related to actions against governmental entities are not deductible);(xiii) medical expenses directly related to accidents that occur to employees at the facility, not to exceed $500;(xiv) purchase of personally owned or leased equipment that has been approved by the Agency for placement in the facility;(xv) repairs and maintenance to personally owned or leased equipment that has been approved by the Agency to be placed in the facility;(xvi) consumable office supplies;(xvii) exterminator or pest control services; and(xviii) mileage expenses for vehicles required for the direct operation of vending facilities at the rate and method allowed by the Internal Revenue Service at the time the expenses are incurred.(3) All reports by managers shall be accompanied by supporting documents required by the Agency.(d) Method of computing monthly set-aside fee. The monthly set-aside fee of each manager shall be a percentage of the net proceeds of the facility as determined in accordance with this section. The provisions relative to the percentage required to be paid as set-aside fees shall be reviewed by the BET director with the active participation of ECM at least annually each state fiscal year. The purpose of the review shall be to determine whether the percentage needs to be adjusted in order to meet the financial needs of the program. The percentage assessed against the net proceeds of facilities may be lowered or raised to meet the needs of the program. ECM shall be provided with all relevant financial and other information concerning the financial requirements of the program no fewer than 60 days before a review by the BET director in which the percentage is to be considered. For the period from the effective date of this amended rule until BET director undertakes his or her first annual review of the set-aside fee, the percentage shall be 5 percent.(e) If ECM disagrees with the action taken to establish a new set-aside fee rate after the annual review, then ECM may choose to use the appeal process.(f) Payment of set-aside fee. The set-aside fee shall be submitted with the manager's monthly statement of facility operations. The manager shall use BET Monthly Facility Report, BE-117, to report monthly activities.(g) Adjustments to monthly set-aside fee. (1) To encourage managers to hire individuals with disabilities, managers shall deduct from their set-aside payment up to 50 percent of the wages or salary paid to an employee who is blind or who has another disability or disabilities (as defined by the Americans with Disabilities Act) during any month up to an amount not to exceed 5 percent of the set-aside payment amount for that month, or $250, whichever is less. A manager may make this deduction for any number of employees who are blind or have another disability as long as that deduction from the set-aside payment amount does not exceed 25 percent of the total set-aside payment that is due, or $1,250, whichever is less. The manager shall provide documentation to BET as required by the Agency to verify such employment and the right to the reduction in set-aside fees. For the purposes of this paragraph, "who is blind or who has another disability" does not include:(B) an individual who is blind or who has another disability at the first degree of consanguinity or affinity to the manager; or(C) an individual who is blind or who has another disability claimed as a dependent, either in whole or in part, on the manager's federal income tax return.(2) Adjustments provided for in paragraph (1) of this subsection shall not apply for any month in which the set-aside fee is not paid in a timely manner.(3) To encourage managers to file their monthly statement of facility operations and pay their monthly set-aside fee promptly, managers shall have their monthly set-aside fee increased by 5 percent of the total amount due if either their monthly statement or the monthly set-aside fee is not received in a timely manner, pursuant to these rules. None of the terms of this rule shall be construed to create a contract to pay interest, as consideration for the use, forbearance, or detention of money, at a rate more than the maximum rate permitted by applicable laws and rules. This adjustment to the set-aside fee is not imposed as interest.40 Tex. Admin. Code § 854.41
Adopted by Texas Register, Volume 44, Number 26, June 28, 2019, TexReg 3299, eff. 9/1/2019; Amended by Texas Register, Volume 47, Number 26, July 1, 2022, TexReg 3825, eff. 7/4/2022