1. (a) Complaints. An official complaint alleging a violation of the Texas Education Code, §31.151, must be filed with the commissioner of education. The commissioner may hold a formal or informal hearing in the case of an apparent violation of statute. Upon determining that a violation has occurred, the commissioner shall report his or her findings to the State Board of Education (SBOE).
2. (b) Administrative penalties. Under the Texas Education Code, §31.151(b), the SBOE may impose a reasonable administrative penalty against a publisher or manufacturer found in violation of a provision of §31.151(a). An administrative penalty shall be assessed only after the SBOE has granted the publisher or manufacturer a hearing in accordance with the Texas Education Code, §31.151, and the Administrative Procedure Act.

3. (c) Penalties for failure to correct factual errors.

   1. (1) A factual error shall be defined as a verified error of fact or any error that would interfere with student learning. The context, including the intended student audience and grade level appropriateness, shall be considered.
   2. (2) A factual error repeated in a single item or contained in both the student and teacher components of instructional material shall be counted once for the purpose of determining penalties.
   3. (3) A penalty may be assessed for failure to correct a factual error identified in the list of editorial corrections submitted by a publisher under §66.54(g) of this title (relating to Samples) or for failure to correct a factual error identified in the report of the commissioner of education under §66.63(d) of this title (relating to Report of the Commissioner of Education) and required by the SBOE. The publisher shall provide an errata sheet approved by the commissioner of education with each teacher component of an adopted title.
   4. (4) A penalty not to exceed $3,000 may be assessed for each factual error identified after the deadline established in the proclamation by which publishers must have submitted corrected samples of adopted instructional materials.

4. (d) Categories of factual errors.

   1. (1) Category 1. A factual error in a student component that interferes with student learning.
   2. (2) Category 2. A factual error in a teacher component only.
   3. (3) Category 3. A factual error in either a student or teacher component that reviewers do not consider serious.

5. (e) First-year penalties. The base and per-book penalties shall be assessed as follows for failure to correct factual errors described in subsections (c) and (d) of this section.

   1. (1) Category 1 error. $25,000 base plus 1% of sales.
   2. (2) Category 2 error. $15,000 base plus 1% of sales.
   3. (3) Category 3 error. $5,000 base plus 1% of sales.

6. (f) Second-year penalties. The base and per-book penalties shall be assessed as follows if a publisher, after being penalized for failure to correct factual errors described in subsections (c) and (d) of this section, repeats the violation in the subsequent adoption.

   1. (1) Category 1 error. $30,000 base plus 1% of sales.
   2. (2) Category 2 error. $20,000 base plus 1% of sales.
   3. (3) Category 3 error. $10,000 base plus 1% of sales.
7. (g) Penalties for failure to deliver adopted instructional materials in a timely manner. The SBOE may assess administrative penalties against publishers who fail to deliver adopted instructional materials in accordance with provisions in the contracts.
8. (h) Penalties for selling textbooks with factual errors. The SBOE may assess administrative penalties in accordance with the Texas Education Code, §31.151, against a seller of textbooks who knowingly sells textbooks with factual errors.
9. (i) State Board of Education discretion regarding penalties. The SBOE may, if circumstances warrant, waive or vary penalties contained in this section for first or subsequent violations based on the seriousness of the violation, any history of a previous violation or violations, the amount necessary to deter a future violation, any effort to correct the violation, and any other matter justice requires.
10. (j) Payment of fines. Each affected publisher shall issue credit to the Texas Education Agency (TEA) in the amount of any penalty imposed under the provisions of this section. When circumstances warrant it, TEA is authorized to require payment of penalties in cash within ten days. Each affected publisher who pays a fine for failure to deliver adopted instructional materials in a timely manner will not be subject to the liquidated damages provision in the publisher's contract for the same failure to deliver adopted instructional materials in a timely manner.

Source Note:The provisions of this §66.10 adopted to be effective September 1, 1996, 21 TexReg 7236; amended to be effective August 15, 1999, 24 TexReg 5699; amended to be effective March 4, 2001, 26 TexReg 1706; amended to be effective February 7, 2002, 27 TexReg 746.