(a) Survey. When a BET facility becomes available for assignment, Agency staff shall conduct a survey of the site to determine the fixtures, furnishings, and equipment required to allow the facility to operate in accordance with projections by Agency staff of the potential business model for the facility. When the facility is an existing one, the survey shall consider the need for replacement or repair of fixtures, furnishings, and equipment.
(b) Facility plan. Agency staff shall prepare a detailed listing of the requirements for fixtures, furnishings, and equipment for the facility, including specifications for each item required and a site plan of the facility depicting the placement of the fixtures, furnishings, and equipment within the facility. The facility shall be consistent with local ordinances as well as state and federal requirements.
(c) Acquisition, placement, and installation. When satisfied with the plan for the fixtures, furnishings, and equipment required for the facility, Agency staff shall procure the necessary fixtures, furnishings, and equipment to be placed or installed in the facility in accordance with the approved plans. The Agency may also purchase necessary fixtures, furnishings, and equipment for placement away from the facility for off-site storage.
(d) Ownership.
  (1) All state fixtures, furnishings, and equipment within the facility shall at all times remain the property of the State of Texas. The facility manager's use of all such fixtures, furnishings, and equipment shall be as a licensee only and in accordance with the BET Equipment Loan Agreement.
  (2) The Agency shall have the sole authority to direct, control, transfer, and dispose of the fixtures, furnishings, and equipment.
(e) Modifications. No modifications or alterations shall be made to state-owned fixtures, furnishings, or equipment by any individual, firm, or entity without the express prior written approval of the Agency.
(f) Upkeep and maintenance.
  (1) The manager assigned to a facility shall be provided with manuals, instructions, and guides electronically or in a format requested by the manager. These documents for state-owned fixtures, furnishings, and equipment within the facility should be in an accessible format.
  (2) It shall be the responsibility of the manager to keep fixtures, furnishings, and equipment clean and sanitary and to perform maintenance required or recommended by the manufacturers or vendors of the fixtures, furnishings, and equipment. This must be in accordance with the BET instructions and equipment manuals.
  (3) The Agency has the right to perform required maintenance and require the manager to reimburse the Agency for that maintenance.
  (4) The manager shall keep and maintain accurate records of all maintenance performed on fixtures, furnishings, and equipment. Any failure or refusal of the manager to perform the maintenance referred to in this section shall result in the manager being required to reimburse the Agency for the cost or expense resulting from the failure or refusal and may result in further administrative action.
(g) Repairs and replacements.
  (1) Upon notification, the Agency shall be responsible for all necessary repairs of any of the state-owned fixtures, furnishings, and equipment located within the facility except for repairs necessitated by the negligence, abuse, or misuse of the fixtures, furnishings, or equipment by the manager or the manager's employees. Failure to comply with manufacturer's or BET's maintenance and preventive care requirements shall be considered negligence, abuse, or misuse. The cost of repairs necessitated by negligence, abuse, or misuse by the manager or the manager's employees shall be the sole responsibility of the manager. Failure to make such repairs may result in administrative action under §854.81 of this title (relating to Administrative Action Based on Unsatisfactory Performance).
  (2) The manager shall follow the instructions as established by BET to facilitate the timely necessary repairs and for the payment for such services. The instructions provide specific procedures for initiating repairs by the manager and a list of approved vendors for repairs. The instructions provided to each manager are published revised from time to time.
  (3) Under no circumstances is a manager authorized to have the cost of repairs charged to the Agency or to have repairs made by anyone other than approved vendors unless Agency staff has given the manager authority to do so in writing. Each vendor included in the approved list of vendors for repairs shall be informed by Agency staff of this prohibition and of the procedures for authorized repairs.
  (4) Agency staff members on their own initiative or upon request shall determine the need for replacement of any fixtures, furnishings, or equipment, and they shall report it to the BET director. If the BET director authorizes the expense, the replacement fixtures, furnishings, and/or equipment shall be purchased, contingent upon availability of BET funds.
  (5) Fixtures, furnishings, and equipment shall not include sanitation and cleaning supplies. Each manager of a facility shall be responsible for replacing all such items with items of a quality comparable to those being replaced and originally furnished by the Agency.
(h) Initial inventory of merchandise and expendables for newly licensed managers. The Agency shall furnish without charge the initial inventory of merchandise and expendables for the initial assignment of a newly licensed licensee. The initial inventory of merchandise and expendables shall be sufficient to assist the manager with starting the business.
(i) Subsequent inventory of merchandise, sanitation and cleaning supplies, and expendables.
  (1) The manager shall maintain an inventory of merchandise, sanitation and cleaning supplies, and expendables in the same quantities as were transferred to the manager upon assignment to the facility. If the Agency determines that changed circumstances require different quantities of merchandise, sanitation and cleaning supplies, and expendables, the Agency shall communicate in writing to the manager the new quantities required. If the new quantities of merchandise, sanitation and cleaning supplies, and expendables are necessary to provide for the satisfactory operation of the facility, those new quantities of inventory must be maintained by the manager.
  (2) Managers assigned to any facility other than their initial assignment in Texas shall acquire the merchandise, sanitation and cleaning supplies, and expendables as determined by the Agency to be sufficient to satisfactorily operate the facility. To effectively expedite the changeover in facilities, when a facility is already stocked with merchandise, sanitation and cleaning supplies, and expendables, the existing stock shall become part of the required inventory stock level of the incoming manager. The amount owed by the incoming manager for the existing stock shall be the amount agreed to by the affected parties. If the existing inventory is the property of the state, the amount owed by the incoming manager shall be the amount paid with state funds.
(j) Purchases on credit. During the first three years of being in the program, managers must notify the Agency in advance of any purchase on credit of merchandise, sanitation and cleaning supplies, and expendables.
(k) Obtaining an advance from the Agency for initial inventory. A manager may apply to the Agency for an advance to purchase an initial inventory of merchandise, sanitation and cleaning supplies, and expendables. The manager must satisfy an advance received from the Agency to purchase merchandise on subsequent assignments within a 12-month period and must make monthly payments in the amount established by the Agency. The granting of an advance is discretionary and may be done only under the following conditions:
  (1) The manager shall justify to the Agency, in writing, the need for the advance and why the funds are not available from other sources.
  (2) The manager shall submit evidence satisfactory to the Agency that the financing has been sought from at least two commercial financial institutions.
  (3) The manager shall demonstrate to the Agency his or her ability to repay the advance within 12 months.
  (4) Managers with outstanding balances on advances are not eligible for transfer to another assignment.
(l) Transfer of fixtures, furnishings, equipment, and inventory of merchandise, sanitation and cleaning supplies, and expendable items. When a manager is assigned to an existing BET facility, the responsibility for the fixtures, furnishings, and equipment of that facility as well as its inventory of merchandise, sanitation and cleaning supplies, and expendable items shall be transferred to the incoming manager. The BET director shall follow the procedures for transferring the equipment between the incoming and outgoing managers to ensure that the managers have full knowledge of the nature and condition of the items being transferred.

Source Note: The provisions of this §854.40 adopted to be effective September 1, 2019, 44 TexReg 3294; amended to be effective July 4, 2022, 47 TexReg 3823