TITLE economic-regulation

Part I. Railroad Commission of Texas

Chapter 7. Gas Utilities Division

Substantive Rules

16 TAC §7.74

The Railroad Commission of Texas adopts new §7.74, relating to school piping testing, to implement the requirements of House Bill 1611 (H.B. 1611), enacted by the 75th Legislature, Regular Session, and effective June 20, 1997. H.B. 1611 added Texas Civil Statutes, Article 6053-2a. The commission adopts the rule without changes to the version published in the November 7, 1997, issue of the Texas Register (22 TexReg 10874).

The new rule is identical to the version of §7.74 in effect from June 24, 1997, through December 21, 1997. The commission initially adopted §7.74 on an emergency basis on June 24, 1997, and extended its effectiveness for an additional 60 days on October 21, 1997.

H.B. 1611 requires that at least every two years school districts pressure test the natural gas piping system in each school district facility. The proposed rule implements the various provisions of H.B. 1611.

Paragraph (1) of the new rule provides that the testing must be a pressure test or shut-in test to determine if the school piping in each school building where students may be present will hold at least normal operating pressure over a time interval of no less than two hours. A test performed under a municipal code will satisfy the pressure testing requirement.

Paragraph (2) of the rule provides that the testing may be performed on a two-year cycle under which each district pressure tests the natural gas piping system in approximately one-half of its facilities each year. If a school district operates one or more school district facilities on a year-round calendar, then the pressure test in each of those facilities must be conducted and reported not later than July 1 of the year in which the pressure test is performed.

Paragraph (3) requires operators to develop procedures for receiving notification from the school districts regarding the location of facilities supplied with natural gas; for terminating service in the event that testing is not completed in the two- year time interval, or a hazardous leak is reported by the person conducting the testing or by the school board of trustees; for providing for special circumstances for receiving written notification from the school or school district that the school or school district is not able to perform tests before the beginning of the designated school year; and for receiving notification from the commission regarding non-interruption of service.

Paragraph (4) requires all operators to maintain a listing of the schools that are supplied natural gas and the results of each test for at least two years.

The proposed rule implements the underlying objectives of H.B. 1611. The rule will insure the safety of schools where students will be present by requiring schools and school districts to test school natural gas piping and by requiring operators to insure that the tests have been performed and to terminate service if the tests are not performed or if a leak is found (except where the operator is notified that the school district is unable to perform the tests before the beginning of the designated school year or where the operator is notified by the commission that service should not be interrupted). The rule also implements the administrative objectives of the bill by requiring operators to receive notice of school facilities served by natural gas, maintain lists of the schools that are supplied natural gas, and maintain records of the results of tests.

The commission received one comment on the proposal, a letter filed jointly by Energas, Entex, Lone Star Gas Company, and Southern Union Gas Company (operators). The operators' filing did not comment directly on the provisions of the proposed rule but, instead, proposed a substantially different rule. Because the operators' proposed rule is substantially different from the published proposed rule, it is beyond the scope of the notice given in publishing the commission's proposed rule and would, therefore, require republication and opportunity for comment prior to commission adoption. Republication would delay the adoption of a school piping rule for an additional period.

The commission cannot adopt the operators' proposed rule at this time; however, the operators' proposed rule merits future consideration by the commission. The commission finds that it is in the public interest to adopt a school piping rule as expeditiously as possible and, accordingly, it is in the public interest to proceed with adoption of the rule as published on November 7. The commission may consider the operators' proposed rule, as well as any rule proposed by any other person, after new §7.74 becomes effective.

The commission adopts the new section under Texas Utilities Code, §§121.201-121.205, which authorize the commission to adopt safety standards and practices applicable to the transportation of gas and to all gas pipeline facilities within Texas to the maximum degree permissible under, and to take any other requisite action in accordance with, 49 U.S.C. §§60101, et seq. (West 1997), and under Texas Civil Statutes, Article 6053-2a, which directs the Railroad Commission of Texas to enforce the article.

Texas Utilities Code, §§121.201-121.210, and Texas Civil Statutes, Article 6053-2a, are affected by the new section.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on December 16, 1997.

TRD-9716834

Mary Ross McDonald

Deputy General Counsel, Office of General Counsel

Railroad Commission of Texas

Effective date: January 5, 1998

Proposal publication date: November 7, 1997

For further information, please call: (512) 463-7008

Chapter 15. Alternative Fuels Research and Education Division

Subchapter B. Propane Consumer Rebate Program

16 TAC §§15.101, 15.105, 15.115, 15.120, 15.125, 15.135, 15.140, §15.152, 15.160, 15.165,

The Railroad Commission of Texas adopts amendments to §§15.101, 15.105, 15.115, 15.120, 15.125, 15.135, 15.140, 15.160, 15.165, and adopts new §15.152, relating to the Alternative Fuels Research and Education Division's consumer rebate program for propane-fueled appliances and equipment, without changes to the text as published in the October 17, 1997, issue of the Texas Register (22 TexReg 10219). The commission adopts these amendments and new section to implement legislation increasing consumer rebate program spending to 50 percent of available funds, to indicate changes in organizational nomenclature at the commission, and to broaden the water heater rebate program to include other propane-fueled appliances and equipment for the purpose of achieving energy conservation and efficiency or improving the quality of air in this state. The amendments and new rule expand on the existing and continuing water heater rebate program. Pending applications for the water heater rebate under the current rules are not affected by these amendments. New §15.152 implements the requirements of Senate Bill 925, 75th Legislature, Regular Session (S.B. 925) prohibiting the use of the commission name and seal on advertising for water heater rebates.

One of the amendments, which changes "LP-Gas Division" to "Gas Services Division, LP-Gas Section," conforms the rules to the commission's new organizational nomenclature. The former LP-Gas Division has been incorporated as a section within the new Gas Services Division of the commission. Other amendments implement statutory changes. Changing the available funds to 50 percent of funds available in Alternative Fuels Research and Education Fund Account 101, General Revenue-Dedicated, for purposes of consumer incentive or rebate programs implements the requirements of S.B. 925. Finally, broadening the definition of eligible equipment enables the commission to expand eligibility for rebates beyond water heaters to other appliances and equipment that use LPG (liquefied petroleum gas or propane), as long as the equipment promotes energy conservation and efficiency or improves air quality. New §15.152 implements S.B. 925's restriction on the use of the commission's name of seal on advertising that promotes the water heater rebate program.

For the first year that the proposed amended and new sections are in effect, the commission expects to set the water heater rebate level at $150 for each eligible installation. The commission also expects to expand the list of eligible equipment to include propane clothes dryers and to set the clothes dryer rebate level at $75 for each eligible installation.

The commission received no comments on the proposed amendments and new rule.

The commission adopts the amendments and new section under Texas Natural Resources Code, §113.243(b), which authorizes the commission to adopt rules relating to the establishment of consumer rebate programs for purchasers of appliances and equipment fueled by LPG or other environmentally beneficial fuels for the purpose of achieving energy conservation and efficiency or improving air quality in this state; and Texas Natural Resources Code, §113.243(c)(6), which authorizes the commission to use money in the Alternative Fuels Research and Education Fund, now Alternative Fuels Research and Education Fund Account 101, General Revenue-Dedicated, to pay the direct and indirect costs of such programs.

Texas Natural Resources Code, §§113.243(c)(6), 113.2435(b), 113.2435(c)(5&6), and 113.246(b) are affected by the amendments and new rule.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on December 16, 1997.

TRD-9716823

Mary Ross McDonald

Deputy General Counsel, Office of General Counsel

Railroad Commission of Texas

Effective date: January 5, 1998

Proposal publication date: October 17, 1997

For further information, please call: (512) 463-7008

Part VI. Texas Motor Vehicle Commission

Chapter 101. Practice and Procedure

General Rules

16 TAC §101.6, §101.16

The Texas Motor Vehicle Board of the Texas Department of Transportation adopts amendments to §101.6, concerning appearances and new §101.16, concerning expenses of witness or deponent without changes to the proposed text as published in the September 5, 1997, issue of the Texas Register (22 TexReg 8823).

The amendments to §101.6 add language allowing the Board to require agreements between a party in interest and an attorney or other authorized representative concerning any pending proceeding to be in writing, signed by the party in interest, and filed as a part of the record of the proceeding.

New §101.16 allows mileage reimbursement for non-party witnesses and deponents equivalent to the current state employee rate for going to and returning from the place of the hearing or deposition, if the place is more than 25 miles from the person's place of residence and the person uses a personally owned or leased motor vehicle for the travel.

The effect of the amendments to §101.6 will be to relax the existing rule. As amended, the requirement of evidence of representation is discretionary, rather than mandatory and will conserve the time and resources of the agency and entities appearing before it. The effect of §101.16 will entitle non-party witnesses and deponents to the same rate of reimbursement as state employees rather than limiting them to ten cents a mile, as provided in the Texas Government Code, §2001.103 which allows reimbursement at ten cents per mile or a greater amount prescribed by agency rule.

Written and oral comments regarding §101.6 state that the proposed rule is too broad and may open the door to requiring production of engagement letters protected by attorney-client privilege. Commenters recommend that an attorney only be required to show authority in response to challenge or limiting the filing be generic without seeking privileged material. No comments were filed concerning proposed §101.16.

Written comments on the proposed amendments to §101.6 were filed by the American Automobile Manufacturers Association (AAMA). Oral comments were received from Mr. Merritt Spencer, attorney, representing AAMA. No written or oral comments on proposed amendments to §101.16 were filed.

The amendment and new section are adopted under §3.06 of the Texas Motor Vehicle Commission Code, Article 4413(36) and (36a), Texas Revised Civil Statutes, which provides the Board with the authority to adopt rules necessary and convenient to effectuate the provisions of the Code and to govern practice and procedure before the agency.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on December 19, 1997.

TRD-9717007

Brett Bray

Director

Texas Motor Vehicle Commission

Effective date: January 8, 1998

Proposal publication date: September 5, 1997

For further information, please call: (512) 416-4800

Chapter 107. Warranty Performance Obligations

16 TAC §107.8, §107.10

The Texas Motor Vehicle Board of the Texas Department of Transportation adopts amendments to §107.8, concerning decisions and §107.10, concerning compliance with changes to the proposed text as published in the September 5, 1997, issue of the Texas Register (22 TexReg 8826).

The amendments to §107.8 are necessary pursuant to action taken by the 75th Legislature, House Bill 2382, which, effective September 1, 1997, mandates regulation of towable recreational vehicle (TRV) manufacturers, distributors, and dealers by the Motor Vehicle Board. These amendments formally address the requirement of a reasonable allowance for the owner's or lessee's use of a towable recreational vehicle included in the Texas Motor Vehicle Commission, Code, Texas Civil Statutes, Article 4413(36), §6.07(c), pertaining to the Lemon Law, and develop a formula for calculating the allowance in cases where no evidence or insufficient evidence is presented by the parties on that issue. The Board considered the comments to §107.8 and determined that the proposed amendments, including changing the word "repurchase" to "purchase" for a typographical error in Section 107.8(5), will greatly expedite lemon law hearings by simplifying the proof requirements relating to the reasonable allowance for use (RAFU) deduction or offset used in calculating the repurchase price of a lemon TRV. This fact alone outweighs the concerns expressed against the amendments. In addition, the Board considers that a minimum RAFU and a reduced useful life for full time occupancy are reasonable for TRVs, especially in view of the provision in the amendments permitting a party to increase or decrease the RAFU by showing the vehicle has a longer or shorter expected useful life.

The amendments to §107.10 add a requirement for a manufacturer, distributor, or converter to affix a disclosure label, in addition to providing a disclosure statement, to an approved location in or on the vehicle of vehicles replaced or repurchased pursuant to a board order, or to an approved location in or on the vehicle of vehicles reacquired under the lemon law of another jurisdiction and transferred to this state for the purpose of resale. In addition, on the transfer of the vehicle, a manufacturer, distributor, or converter is required to provide the board, in writing, the name, address and telephone number of the transferee within 60 days of the transfer. The Board considered the comments to §107.10 and determined that the proposed amendments will eliminate strict liability for manufacturers, converters, or distributors for non-disclosure of lemon vehicles and, at the same time, will ensure the first retail purchaser of a lemon vehicle is informed that it was reacquired by the manufacturer, distributor, or converter under a state lemon law program. In addition, the Board agrees with the safety concerns expressed regarding the location of the disclosure label on the front window and revised the amendments to §107.10(4) and (5) to provide that the director is authorized, on behalf of the Board, to approve the format of the disclosure label, including its location in or on the vehicle.

The effect of the amendments to §107.8 will be to expedite lemon law hearings by simplifying the proof requirements relating to the reasonable allowance for use deduction or offset used in calculating the repurchase price of a lemon vehicle. The effect of the amendments to §107.10 will be to ensure the first retail purchaser of a lemon vehicle is informed that it was reacquired by the manufacturer, distributor, or converter under a state lemon law program.

Comments generally in favor of the amendments to §107.8 expressed concern that the reasonable allowance for use (RAFU) should not be less than 10% of the purchase price because the living facility of a towable recreational vehicle (TRV) could have significant more wear and tear than an automobile, and that TRVs occupied on a full time basis should not be subject to the lemon law because they become more like a permanent dwelling. Comments generally against the adoption of the proposed amendments expressed concern with a RAFU of at least 10%, especially when the owner has not been able to use the vehicle as intended; with the useful life being reduced for TRVs occupied full time, despite the fact most concerns show up during the first 6 months; and with any attempt to eliminate those occupied full time from the lemon law because they are usually occupied, in this situation, by retired couples.

Comments generally in favor of the amendments to §107.10 expressed concern as to the location of the disclosure label; the use of only Motor Vehicle Board issued or approved disclosure labels; the need to eliminate strict liability of manufacturers, distributors, or converters for failing to ensure the disclosure statements and labels accompany or are affixed to the vehicle; the need to add the provision that each subsequent transferee, through the first retail sale, be required to provide the disclosure statement; the need to require that dealers bringing reacquired vehicles into Texas issue a disclosure statement and affix a label to the vehicle; and the need to add a provision requiring that the Motor Vehicle Board use the disclosure statement as a means for manufacturers, distributors, or converters to provide the Board with the name, address and telephone number of each transferee. Other comments in favor of the amendments expressed concern with dealers being held responsible for providing disclosure information on vehicles transferred into Texas when they lack knowledge of vehicle's status.

Written comments supporting the proposed amendments to §107.8 were received from the Texas Recreational Vehicle Association, the Recreational Vehicle Industry Association and the Recreational Vehicle Dealers Association of North America. Written comments generally against the proposed amendments were received from the Escapees RV Club. Oral comments were received at the public hearing on November 6, 1997, from Mr. Joe Peterson, President, Escapees RV Club.

Written comments supporting the proposed amendments to §107.10 were received from Attorney Richard H. Gateley, McLean & Sanders, the Association of International Automobile Manufacturers, General Motors Corporation and the American Automobile Manufacturers Association. Oral comments supporting the proposed amendments were received at the public hearing on November 6, 1997, from Attorney Richard H. Gateley, Ms. Karen Coffey, Chief Counsel of the Texas Automobile Dealers Association, and from Mr. Merritt Spencer, attorney for the American Automobile Manufacturers Association.

The amendments to §107.8 and §107.10 are adopted under §3.06 of the Texas Motor Vehicle Commission Code, and Texas Civil Statutes, Article 4413(36) and (36a), which provides the Board with the authority to adopt rules necessary and convenient to effectuate the provisions of the Code and to govern practice and procedure before the agency.

§107.8.Decisions.

Any decisions by the board and recommended decision by a hearing officer shall give effect to the presumptions provided the Texas Motor Vehicle Commission Code, §6.07(d), where applicable.

(1) - (4)

(No change.)

(5)

Except in cases where clear and convincing evidence shows that the vehicle has a longer or shorter expected useful life than 120 months, the reasonable allowance for the owner's use of the towable recreational vehicle shall be the greater of 10% of the purchase price, as defined in paragraph (3) of this section, or that amount obtained by adding the following:

(A)

The product obtained by multiplying the purchase price of the towable recreational vehicle, as defined in paragraph (3) of this section, by a fraction having as its denominator 120 months , except the denominator shall be 60 months, if the towable recreational vehicle is occupied on a full time basis, and having as its numerator the number of months from the time of delivery to the owner to the first report of the defect or condition forming the basis of the repurchase order; and

(B)

50% of the product obtained by multiplying the purchase price by a fraction having as its denominator 120 months, except the denominator shall be 60 months, if the towable recreational vehicle is occupied on a full time basis, and having as its numerator the number of months of ownership after the first report of the defect or condition forming the basis of the repurchase order. The number of months during the period covered in this paragraph shall be determined from the date of the first report of the defect or condition forming the basis of the repurchase order through the date of the board hearing.

(6)

Except in cases involving unusual and extenuating circumstances, supported by a preponderance of the evidence, where refund of the purchase price of a leased vehicle is ordered, the purchase price shall be allocated and paid to the lessee and the lessor, respectively as follows.

(A)

The lessee shall receive the total of:

(i)

all lease payments previously paid by him to the lessor under the terms of the lease; and

(ii)

all sums previously paid by him to the lessor in connection with the entering into the lease agreement, including, but not limited to, any capitalized cost reduction, down payment, trade-in, or similar cost, plus sales tax, license and registration fees, and other documentary fees, if applicable.

(B)

The lessor shall receive the total of:

(i)

the actual price paid by the lessor for the vehicle, including tax, title, license, and documentary fees, if paid by lessor, and as evidenced in a bill of sale, bank draft demand, tax collector's receipt, or similar instrument; plus

(ii)

an additional 5.0% of such purchase price plus any amount or fee, if any, paid by lessor to secure the lease or interest in the lease;

(iii)

provided, however, that a credit, reflecting all of the payments made by the lessee, shall be deducted from the actual purchase price which the manufacturer is required to pay the lessor, as specified in causes (i) and (ii) of this subparagraph.

(C)

When the commission orders a manufacturer to refund the purchase price in a lease vehicle transaction, the vehicle shall be returned to the manufacturer with clear title upon payment of the sums indicated in subparagraphs (A) and (B) of this paragraph. The lessor shall transfer title of the vehicle to the manufacturer, as necessary in order to effectuate the lessee's rights under this rule. In addition, the lease shall be terminated without any penalty to the lessee.

(D)

Refunds shall be made to the lessee, lessor, and any lienholders as their interest may appear. The refund to the lessee under subparagraph (A) of this paragraph shall be reduced by a reasonable allowance for the lessee's use of the vehicle. A reasonable allowance for use shall be computed according to the formula in paragraph (4) or (5) of this section, using the amount in subparagraph (B) (i) of this paragraph as the applicable purchase price.

§107.10.Compliance.

Compliance with the board's order will be monitored by the board.

(1) - (3)

(No change.)

(4)

If complainant's vehicle is replaced or repurchased pursuant to a board order, the manufacturer, distributor, or converter shall, prior to resale of such vehicle, issue a disclosure statement in the format of Attachment 1 or on a form approved by the board. In addition, the manufacturer, distributor, or converter repurchasing or replacing the vehicle shall affix a disclosure label provided by or approved by the board through its director on an approved location in or on the vehicle. Both the disclosure statement and the disclosure label shall accompany the vehicle through the first retail purchase after the board order. Neither the manufacturer, distributor, converter nor any person holding a license or general distinguishing number issued by the board under the Code or Chapter 503, Transportation Code, shall remove or cause the removal of the disclosure label until delivery of the vehicle to the first retail purchaser. A manufacturer, distributor or converter shall provide the board, in writing, the name, address and telephone number of the transferee to whom the manufacturer, distributor or converter, as the case may be, transfers the vehicle within 60 days of each transfer. Any manufacturer, distributor, converter, or holder of a general distinguishing number who violates this section is liable for a civil penalty or other sanctions prescribed by the Code. In addition, the manufacturer, distributor, or converter must repair the defect or condition in the vehicle that resulted in the repurchase or replacement and issue, at a minimum, a basic warranty (12 months/12,000 mile, whichever comes first) on a form provided by or approved by the board, which warranty shall be provided to the first retail purchaser of the vehicle following the board order.

(5)

If a manufacturer, distributor, or converter brings a vehicle into this state, which has been reacquired under the lemon law of another jurisdiction, the manufacturer, distributor, or converter shall, prior to the first retail sale, issue a disclosure statement on a form provided by or approved by the board. In addition, the manufacturer, distributor, or converter repurchasing or replacing the vehicle shall affix a disclosure label provided by or approved by the board through its director on an approved location in or on the vehicle. Both the disclosure statement and the disclosure label shall accompany the vehicle through the first retail purchase. Neither the manufacturer, distributor, converter nor any person holding a license or general distinguishing number issued by the board under the Code or Chapter 503, Transportation Code, shall remove or cause the removal of the disclosure label until delivery to the first retail purchaser. Any manufacturer, distributor, converter, or holder of a general distinguishing number who violates this section is liable for a civil penalty or other sanction prescribed by the Code.

(6)

In the event of any conflict between this rule and the terms contained in a cease and desist order, the terms of the cease and desist order shall prevail.

(7)

The failure of any manufacturer, distributor, converter, or dealer to comply with a decision and order of the board within the time period prescribed in the order may subject the manufacturer, distributor, converter, or dealer to formal action by the board and the assessment of civil penalties or other sanctions prescribed by the Texas Motor Vehicle Commission Code for the failure to comply with an order of the board.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Issued in Austin, Texas, on December 19, 1997.

TRD-9717008

Brett Bray

Director

Texas Motor Vehicle Commission

Effective date: January 8, 1998

Proposal publication date: September 5, 1997

For further information, please call: (512) 416-4800