Adopted Rules Title 30

TITLE 30. ENVIRONMENTAL QUALITY

PART 1. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

CHAPTER 19. ELECTRONIC REPORTING

SUBCHAPTER C. USE OF ELECTRONIC REPORTING

30 TAC §19.21

The Texas Commission on Environmental Quality (commission or agency) adopts new §19.21. Section 19.21 is adopted without changes to the proposed text as published in the February 29, 2008, issue of the Texas Register (33 TexReg 1739) and will not be republished.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULE

The purpose of the adopted rule is to implement House Bill (HB) 1254 of the 80th Legislature, 2007. The bill, which became effective September 1, 2007, authorizes the commission to adjust fees as necessary to encourage electronic reporting and the use of the commission's electronic document receiving system. The adopted new rule implements HB 1254.

SECTION DISCUSSION

Adopted new §19.21 will implement HB 1254 by stating that the commission may adjust fees as necessary to encourage electronic reporting and the use of the commission's electronic document receiving system. Although the adopted section does not change specific fees, the inclusion of this section will serve as an advance notice that the commission may consider fee changes in the future for this purpose.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the adopted rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the adopted rulemaking is not subject to §2001.0225 because it does not meet the definition of a "major environmental rule" as defined in the Texas Government Code. A "major environmental rule" is a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The specific intent of this adopted rulemaking action is to implement HB 1254 of the 80th Legislature, 2007. The bill, which became effective September 1, 2007, authorizes the commission to adjust fees as necessary to encourage electronic reporting and the use of the commission's electronic document receiving system. The adopted rulemaking is procedural in nature and does not address environmental risks or exposures. Therefore, the adopted rulemaking does not constitute a major environmental rule, and is not subject to a formal regulatory analysis.

Additionally, the rulemaking does not meet any of the four applicability criteria for requiring a regulatory impact analysis for a major environmental rule, which are listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225 applies only to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law.

This rulemaking does not meet any of the four applicability requirements in Texas Government Code, §2001.0225(a). Since there is no federal law establishing a standard for the commission's adjustment of fees to encourage electronic reporting, this rulemaking does not exceed a standard set by federal law. HB 1254 grants the commission authority to adjust fees as necessary to encourage electronic reporting and use of the commission's document receiving system, but states nothing further to establish a particular standard as to the manner in which the commission may do so. Since this rulemaking implements the bill consistent with the legislation, it does not exceed the requirements of state law. This rulemaking does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to assess fees, but is instead is consistent with state statute. This rulemaking is not adopted solely under the general powers of the agency because it is to implement Texas Water Code (TWC), §5.128(a), which authorizes the commission to adjust fees. The commission invited public comment regarding the draft regulatory impact analysis determination and no comments were received.

TAKINGS IMPACT ASSESSMENT

The commission completed a takings impact analysis for the adopted rulemaking action under Texas Government Code, §2007.043. The specific purpose of this adopted rulemaking is to implement HB 1254, which authorizes the commission to adjust fees to encourage electronic reporting and the use of the commission's electronic document receiving system. The adopted rule would substantially advance these purposes by giving notice to those who use the commission's electronic document receiving system that fees may be adjusted.

Promulgation and enforcement of the adopted rule would constitute neither a constitutional nor a statutory taking of private real property. There are no burdens imposed on private real property under this rule because the adopted rule neither relates to, nor has any impact on the use or enjoyment of private real property. Also, the rule does not result in a reduction in property value. The rule is only procedural in nature. Therefore, the adopted rule would not constitute a taking under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the adopted rulemaking and found that the proposal is neither identified in the Coastal Coordination Act Implementation Rules, 31 TAC §505.11, nor will it affect any action/authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11. Therefore, the adopted rule is not subject to the Texas Coastal Management Program.

The commission invited comments regarding the consistency of this rulemaking and no comments were received.

PUBLIC COMMENT

The proposal was published in the February 29, 2008, issue of the Texas Register (33 TexReg 1739). The commission held a public hearing on March 27, 2008. The comment period closed on March 31, 2008. The commission did not receive any comments.

STATUTORY AUTHORITY

The new section is adopted under TWC, §5.013, which establishes the commission's general jurisdiction; §5.102, which establishes the commission's general authority necessary to carry out its jurisdiction; §5.103, which allows the commission to adopt any rules necessary to carry out the powers and duties under the provisions of the TWC and other laws of this state; §5.105, which requires the commission to, by rule, establish and approve all general policy of the commission; HB 1254, which authorizes the commission to encourage the use of electronic reporting; and to adjust fees as necessary to encourage electronic reporting and use of the commission's document receiving system.

The adopted new rule implements TWC, §§5.013, 5.102, 5.103, 5.105, and 5.128 and HB 1254.

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803195

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: February 29, 2008

For further information, please call: (512) 239-0177

CHAPTER 50. ACTION ON APPLICATIONS AND OTHER AUTHORIZATIONS

SUBCHAPTER F. ACTION BY THE COMMISSION

30 TAC §50.113

The Texas Commission on Environmental Quality (commission or agency) adopts an amendment to §50.113 without changes to the proposed text as published in the March 14, 2008, issue of the Texas Register (33 TexReg 2118) and will not be republished.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULE

This rulemaking implements House Bill (HB) 2654, 80th Legislature, 2007. HB 2654 amended Texas Water Code (TWC), §27.021 and added new TWC, §27.023 to allow the commission to issue a general permit authorizing the use of a Class I injection well to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals. These legislative changes are intended to promote desalination technology and address the need for public water supply systems to dispose of drinking water treatment residuals. To implement HB 2654, this rulemaking amends §50.113(d).

The amended rule adds two new types of applications and actions to a listing of applications that the commission may act on without holding a contested case hearing. This listing is in §50.113(d). There are two paragraphs under §50.113(d) that are affected by the amendment.

First, the amendment to §50.113(d)(5) updates the list of applications that are not subject to a contested case hearing by adding an application for a Class I injection well used only for the disposal of nonhazardous drinking water treatment residuals. This exception is in addition to the exception for applications for disposal of desalination brine which was added by a previous rulemaking in the September 10, 2004, issue of the Texas Register (29 TexReg 8814). Amendment of §50.113(d)(5) also includes updates to reflect use of the term "nonhazardous brine from a desalination operation" instead of "desalination brine," and inserts the word "injection" into the phrase "Class I injection wells," to achieve consistency with the title of TWC, §27.021 as amended by HB 2654.

Second, a new paragraph has been inserted as §50.113(d)(6) with renumbering of subsequent paragraphs. The new paragraph implements part of TWC, §27.023 in HB 2654 that allows the commission to issue a general permit authorizing a Class I injection well to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals, without providing the opportunity for a contested case hearing, as long as all requirements for a Class I injection well permit are met. Public notice of, and the opportunity to comment on, a permit application is not affected by this rulemaking. Removing the opportunity for a contested case hearing may expedite the approval of Class I injection well permits for the disposal of nonhazardous desalination brine and nonhazardous drinking water treatment residuals. The commission's ability to hold a discretionary hearing under the provisions of TWC, §5.102(b) was not amended by HB 2654.

Amendments to 30 TAC Chapters 55, 305 and 331 are also adopted in this issue of the Texas Register to implement HB 2654 and to incorporate other changes to facilitate disposal of nonhazardous desalination brine and nonhazardous drinking water treatment residuals.

SECTION DISCUSSION

§50.113. Applicability and Action on Application.

The commission amends §50.113(d)(5) by adding a permit application for a Class I injection well used only for the disposal of nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals to the list of applications upon which the commission may act without holding a contested case hearing. The commission adopts §50.113(d)(6) to include the issuance, amendment, renewal, suspension, revocation or cancellation of a general permit, or the authorization for the use of an injection well under a general permit in the list of items upon which the commission may act without holding a contested case hearing. Current paragraphs (6) - (8) are renumbered as paragraphs (7) - (9), respectively.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed this rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the rulemaking does not meet the definition of a "major environmental rule" as defined by that statute. A "major environmental rule" means a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. This rulemaking does not meet the statutory definition of a "major environmental rule" because it is not intended to reduce risks to human health from environmental exposure, nor does it adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The intent of this rulemaking is to implement HB 2654, passed during the 80th Legislature, 2007, and to revise criteria for authorizing Class I nonhazardous wells injecting desalination concentrate and other water treatment residuals from public water systems so that the state's rules are no more stringent than federal Class I nonhazardous injection well regulations. The specific intent of the amendment to Chapter 50 is to address the authority of the commission to take actions regarding the general permit and authorizations under the general permit. The rule substantially advances this purpose by adding notices of intent submitted under §331.203 to the applicability of Chapter 50, Subchapter F. Further, applications for a Class I injection well permit used only for the disposal of drinking water treatment residuals and the issuance, amendment, renewal, suspension, revocation or cancellation of a general permit or authorization under a general permit for a Class I injection well used only for the disposal of nonhazardous brine from desalination operations or drinking water treatment residuals are added to the list of items upon which the commission may act without holding a contested case hearing.

This rulemaking does not meet the statutory definition of a "major environmental rule" because the amendment would not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or public health and safety of the state or a sector of the state. It is not anticipated that the cost of complying with the amendment will be significant with respect to the economy; therefore, the amendment will not adversely affect in a material way the economy, a sector of the economy, competition, or jobs.

Additionally, this rulemaking does not meet any of the four applicability requirements listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability requirements because this rulemaking does not exceed any standard set by federal law but rather amends the rules so that they are no more stringent or restrictive than the federal regulations. The adopted rule does not exceed the requirements of state law under the TWC, Chapter 27. Further, the adopted rule does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement any state and federal program. Finally, the rule is not adopted solely under the general powers of the agency, but rather specifically under TWC, §27.023(m), which allows the commission to adopt rules to implement the general permit authorizing use of a Class I injection well to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals and TWC, §27.109, which authorizes the commission to adopt rules to implement TWC, Chapter 27 (regarding Injection Wells), as well as the other general powers of the agency.

The commission invited public comment regarding the regulatory impact analysis determination during the public comment period. No comments were received.

TAKINGS IMPACT ASSESSMENT

The commission evaluated the amendment to Chapter 50 and performed a preliminary assessment of whether the amendment would constitute a taking under Texas Government Code, Chapter 2007. The primary purpose of the amendment is to implement HB 2654, authorizing use of a general permit for Class I injection wells injecting only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. The amendment would substantially advance this purpose by amending §50.113 to add to the list of actions upon which the commission may act without first holding a contested case hearing applications for a Class I injection well permit used only for the disposal of drinking water treatment residuals and the issuance, amendment, renewal, suspension, revocation or cancellation of a general permit or authorization under a general permit for a Class I injection well permit used only for the disposal of nonhazardous brine from desalination operations or drinking water treatment residuals.

Promulgation and enforcement of the amendment would constitute neither a statutory nor a constitutional taking of private real property. There are no burdens imposed on private real property under this rule because the amendments neither relate to, nor have any impact on the use or enjoyment of private real property, and there would be no reduction in property value as a result of this rule. Therefore, the adopted rule would not constitute a taking under Texas Government Code, Chapter 2007.

The commission has no reasonable alternative that could accomplish the specific purpose of addressing the commission's authority to act other than by amending Chapter 50.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the rule and found that it is neither identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(2) or (4), nor will it affect any action/authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11(a)(6). Therefore, the rule is not subject to the Texas Coastal Management Program.

PUBLIC COMMENT

The proposal was published in the March 14, 2008, issue of the Texas Register (33 TexReg 2118). The commission held a public hearing in Austin on April 8, 2008. The comment period closed on April 14, 2008. No comments pertaining to the proposed amendment to Chapter 50 were received.

STATUTORY AUTHORITY

The amendment is adopted under TWC, §5.103, which provides the commission with the authority to adopt any rules necessary to carry out its powers and duties under this code and other laws of this state and to adopt rules repealing any statement of general applicability that interprets law or policy; §5.105, which authorizes the commission to establish and approve all general policy of the commission by rule; §27.019, which requires the commission to adopt rules reasonably required for the regulation of injection wells; and §27.023, which allows the commission to adopt rules as necessary to implement and administer a general permit authorizing the use of Class I injection wells to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals.

The amendment implements TWC, §27.023, relating to General Permit Authorizing Use of Class I Injection Wells to Inject Nonhazardous Brine from Desalination Operations or Nonhazardous Drinking Water Treatment Residuals, and TWC, Chapter 27.

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803196

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: March 14, 2008

For further information, please call: (512) 239-0177

CHAPTER 55. REQUESTS FOR RECONSIDERATION AND CONTESTED CASE HEARINGS; PUBLIC COMMENT

The Texas Commission on Environmental Quality (commission or agency) adopts amendments to §55.101 and §55.201 without changes to the proposed text as published in the March 14, 2008, issue of the Texas Register (33 TexReg 2122) and will not be republished.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULES

The amended rules add two new types of applications and actions to a listing of applications that the commission may act on without holding a contested case hearing. This listing is in §55.101(f). There are two paragraphs under §55.101(f) that are affected by the adopted amendments. First, the amendment to §55.101(f)(4) updates the list of applications that are not subject to a contested case hearing by adding an application for a Class I injection well used only for the disposal of nonhazardous drinking water treatment residuals. This exception is in addition to the exception for applications for disposal of desalination brine which was added by a previous rulemaking in the September 10, 2004, issue of the Texas Register (29 TexReg 8817). Amendment of §55.101(f)(4) also includes updates to reflect use of the term "nonhazardous brine from a desalination operation" instead of "desalination brine," and inserts the word "injection" into the phrase "Class I injection wells," to achieve consistency with the title of TWC, §27.021 as amended by HB 2654.

Second, a new paragraph has been inserted as §55.101(f)(5) with renumbering of the subsequent paragraph. The new paragraph implements part of TWC, §27.023 in HB 2654 that allows the commission to issue a general permit authorizing a Class I injection well to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals, without providing the opportunity for a contested case hearing, as long as all requirements for a Class I injection well permit are met. Public notice of, and the opportunity to comment on, a permit application will not be affected by this rulemaking. Removing the opportunity for a contested case hearing may expedite the approval of Class I injection well permits for the disposal of nonhazardous desalination brine and nonhazardous drinking water treatment residuals. The commission's ability to hold a discretionary hearing under the provisions of TWC, §5.102(b) was not amended by HB 2654.

Amendments to 30 TAC Chapters 50, 305 and 331 are also adopted in this issue of the Texas Register to implement HB 2654 and to incorporate other changes to facilitate disposal of nonhazardous desalination brine and nonhazardous drinking water treatment residuals.

SECTION BY SECTION DISCUSSION

Subchapter D. Applicability and Definitions

§55.101. Applicability.

The adopted rules amend §55.101(f)(4) by adding a permit application for a Class I injection well used only for the disposal of nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals to the list of applications upon which the commission may act without holding a contested case hearing. The rules add §55.101(f)(5) to include the issuance, amendment, renewal, suspension, revocation or cancellation of a general permit, or the authorization for the use of an injection well under a general permit in the list of items upon which the commission may act without holding a contested case hearing. Current paragraph §55.101(f)(5) is renumbered as paragraph (6). Adopted §55.101(f)(5) implements part of TWC, §27.023 in HB 2654 that allows the commission to issue a general permit authorizing a Class I injection well to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals, without providing the opportunity for a contested case hearing.

Subchapter F. Requests for Reconsideration or Contested Case Hearing

§55.201. Requests for Reconsideration or Contested Case Hearing.

The adopted rules amend §55.201(i)(6) by adding a permit application for a Class I injection well used only for the disposal of nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals to the list of applications for which there is no right to a contested case hearing. The adopted rule adds §55.201(i)(7) to include the issuance, amendment, renewal, suspension, revocation or cancellation of a general permit, or the authorization for the use of an injection well under a general permit in the list of items for which there is no right to a contested case hearing. Current paragraphs (7) - (9) are renumbered as paragraphs (8) - (10), respectively.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The intent of this rulemaking is to implement HB 2654, passed during the 80th Legislature, 2007, and to revise criteria for authorizing Class I nonhazardous wells injecting desalination concentrate and other water treatment residuals from public water systems so that the state's rules are no more stringent than federal Class I nonhazardous injection well regulations. The specific intent of the amendments to Chapter 55 is to address certain procedural rights regarding applications for Class I injection well permits used only for the disposal of drinking water treatment residuals and the issuance, amendment, renewal, suspension, revocation or cancellation of a general permit or authorization under a general permit for a Class I injection well authorized to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals. The rule substantially advances this purpose by adding notices of intent submitted under §331.203 to the applicability of Chapter 55, Subchapters D - G and by adding to the list of actions for which there is no right to a contested case hearing applications for a Class I injection well permit used only for the disposal of drinking water treatment residuals and the issuance, amendment, renewal, suspension, revocation or cancellation of a general permit or authorization under a general permit for a Class I injection well used only for the disposal of nonhazardous brine from desalination operations or drinking water treatment residuals.

This rulemaking does not meet the statutory definition of a "major environmental rule" because the amendments would not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or public health and safety of the state or a sector of the state. It is not anticipated that the cost of complying with the amendment will be significant with respect to the economy; therefore, the amendments will not adversely affect in a material way the economy, a sector of the economy, competition, or jobs.

Additionally, this rulemaking does not meet any of the four applicability requirements listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability requirements because this rulemaking does not exceed any standard set by federal law but rather amends the rules so that they are no more stringent or restrictive than the federal regulations. The rules adopted do not exceed the requirements of state law under TWC, Chapter 27. Further, the rules adopted do not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement any state and federal program. Finally, the rule is not adopted solely under the general powers of the agency, but rather specifically under TWC, §27.023(m), which allows the commission to adopt rules to implement the general permit authorizing use of a Class I injection well to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals and TWC, §27.109, which authorizes the commission to adopt rules to implement TWC, Chapter 27, as well as the other general powers of the agency.

The commission invited public comment regarding the Regulatory Impact Analysis determination during the public comment period. No comments were received.

TAKINGS IMPACT ASSESSMENT

The commission evaluated the amendments to Chapter 55 and performed an assessment of whether the amendments would constitute a taking under Texas Government Code, Chapter 2007. The primary purpose of the amendments is to implement HB 2654, authorizing use of a general permit for Class I injection wells injecting only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. The amendments substantially advance this purpose by amending §55.201 to add to the list of actions for which there is no right to a contested case hearing applications for a Class I injection well permit used only for the disposal of drinking water treatment residuals and the issuance, amendment, renewal, suspension, revocation or cancellation of a general permit or authorization under a general permit for a Class I injection well used only for the disposal of nonhazardous brine from desalination operations or drinking water treatment residuals.

Promulgation and enforcement of the amendments constitute neither a statutory nor a constitutional taking of private real property. There are no burdens imposed on private real property under this rulemaking because the amendments neither relate to, nor have any impact on the use or enjoyment of private real property, and there would be no reduction in property value as a result of this rulemaking. Therefore, the adopted rules would not constitute a taking under Texas Government Code, Chapter 2007.

The commission has no reasonable alternative that could accomplish the specific purpose of addressing certain procedural rights regarding applications for Class I injection well permits used only for the disposal of nonhazardous desalination concentrate or drinking water treatment residuals and the issuance, amendment, renewal, suspension, revocation or cancellation of a general permit or authorization under a general permit for a Class I injection well authorized to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals. These procedural issues regarding permit applications and notices of intent can only be affected through amendments to the commission's rules.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the rules and found that they are neither identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(2) or (4), nor will they affect any action/authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11(a)(6). Therefore, the rules are not subject to the Texas Coastal Management Program.

PUBLIC COMMENT

The proposal was published in the March 14, 2008, issue of the Texas Register (33 TexReg 2122). The commission held a public hearing in Austin on April 8, 2008. The comment period closed on April 14, 2008. No comments pertaining to the proposed amendments to Chapter 55 were received.

SUBCHAPTER D. APPLICABILITY AND DEFINITIONS

30 TAC §55.101

STATUTORY AUTHORITY

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803197

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: March 14, 2008

For further information, please call: (512) 239-0177

SUBCHAPTER F. REQUESTS FOR RECONSIDERATION OR CONTESTED CASE HEARING

30 TAC §55.201

STATUTORY AUTHORITY

The amendment is adopted under Texas Water Code (TWC), §5.103, which provides the commission with the authority to adopt any rules necessary to carry out its powers and duties under this code and other laws of this state and to adopt rules repealing any statement of general applicability that interprets law or policy; §5.105, which authorizes the commission to establish and approve all general policy of the commission by rule; §27.019, which requires the commission to adopt rules reasonably required for the regulation of injection wells; and §27.023, which allows the commission to adopt rules as necessary to implement and administer a general permit authorizing the use of Class I injection wells to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals.

The adopted amendment implements TWC, §27.023, relating to General Permit Authorizing Use of Class I Injection Wells to Inject Nonhazardous Brine from Desalination Operations or Nonhazardous Drinking Water Treatment Residuals, and TWC, Chapter 27.

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803198

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: March 14, 2008

For further information, please call: (512) 239-0177

CHAPTER 291. UTILITY REGULATIONS

The Texas Commission on Environmental Quality (TCEQ or commission) adopts amendments to §§291.3, 291.21, 291.41, 291.87, 291.88, 291.101, 291.105, and 291.113.

Sections 291.41, 291.87, 291.88, 291.101, 291.105, and 291.113 are adopted without changes as published in the February 1, 2008, issue of the Texas Register (33 TexReg 871) and will not be republished. Section 291.3 and §291.21 are adopted with changes to the proposed text.

The commission withdraws the proposal of §291.14 and §291.144 as published in the February 1, 2008, issue of the Texas Register (33 TexReg 871).

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULES

In 2007, the 80th Legislature passed Senate Bill (SB) 3 and House Bill (HB) 3475. Sections 2.05, Definitions; 2.06, Consolidated Billing; 2.07, Rates; 2.08, Certificates of Convenience and Necessity (CCNs); 2.32, Duties of Water Service Providers; 2.39, CCNs; and 7.01, Rates, of SB 3 and HB 3475 relate to retail public utilities.

SB 3, §2.05 amended Texas Water Code (TWC), §13.002(1-a) to alter the definition of "landowner" or "owner of a tract of land" to denote that the owner or multiple owners of a single deeded tract of land are as shown on the appraisal roll of the appraisal district established for each county in which the property is located. This section of SB 3 also amended other definitions not addressed in this rulemaking.

SB 3, §2.06 amended TWC, Chapter 13, Subchapter E, by adding §13.147, Consolidated Billing and Collection Contracts, to allow a retail public utility providing water service to contract with a retail public utility providing sewer service for the billing and collection of the sewer service provider's fees and payments as part of a consolidated process. This service may only be provided by the water provider for customers that are served by both providers in an area covered by both providers' CCNs. If the water provider refuses to enter into a contract with the sewer provider, or if they cannot agree on the terms of the contract, the sewer service provider may petition the commission to issue an order requiring the water provider to provide that service.

SB 3, §2.07 amended TWC, Chapter 13, Subchapter F by adding §13.188, Adjustment for Change in Energy Costs. This section allows the commission to adopt a procedure through which a utility can file an application for an adjustment in the utility's rates to reflect an increase or decrease in documented energy costs through the use of a pass through clause. The pass through, whether an increase or a decrease, shall be implemented no later than an annual basis, unless the commission determines a special circumstance applies.

SB 3, §2.08 and §2.39 amended TWC, Subchapter F, §13.2451, to allow a municipality to extend a CCN to area outside the municipality's extraterritorial jurisdiction (ETJ) so long as the municipality meets the criteria outlined in §13.241 for granting of a CCN. TWC, §13.2451(c) was also added to allow the commission, after notice to the municipality and the opportunity for a hearing, to decertify an area outside the municipality's ETJ if the municipality does not provide service to the area on or before the fifth anniversary of the date the CCN was granted for the area. This section does not apply for an area that was transferred to a municipality on approval of the commission or in relation to which the municipality has spent public funds. TWC, §13.2451(d) was added to stipulate that if a conflict between this section and §13.245 arise, then §13.245 prevails. SB 3, §2.39, also amended TWC, Subchapter F, §13.2451, to specify that this section applies only to: 1) an application to obtain or amend a CCN submitted to the TCEQ on or after the effective date of this Act; 2) a proceeding to amend or revoke a CCN initiated on or after the effective date of this Act; 3) a CCN issued to a municipality regardless of the date the certificate was issued; 4) an application filed by a municipality to obtain or amend a CCN, regardless of the date the application was filed; and, 5) a proceeding to amend or revoke a CCN held by a municipality or by a utility owned by a municipality, regardless of the date the proceeding was initiated.

SB 3, §2.32, added Local Government Code, Subchapter Z, §402.911, to require a water service provider that meets specific criteria to provide a municipality or district with relevant customer information so the municipality or district may bill the customer directly for sewer service and verify water consumption. Relevant customer information includes name, address, phone number, monthly meter readings, monthly consumption information, billing adjustments, and specifics about the meter such as brand, model, age, and location. The legislation also requires a municipality or district to reimburse the water provider for its reasonable and actual costs for providing this service to the municipality or district. The municipality or district may also provide a notice to customers delinquent for more than 90 days for sewer service. This notice must include the past due amount and the deadline by which the past due notice must be paid before water service is disconnected. After such a notice is provided, the municipality or district may notify the water service provider of a customer who fails to make timely payment. On receipt of this notice, the water service provider must discontinue water service to the municipality or district's sewer customer. This section applies to a water provider that is located in a county with a population greater than 1.3 million and in which a customer's sewer service is provided by a municipality or conservation and reclamation district for the same area, except for a nonprofit water supply or sewer service corporation created under TWC, Chapter 67, or a district created under TWC, Chapter 65.

SB 3, §7.01, amended TWC, Chapter 49, Subchapter H, by adding §49.2122, which allows a district to establish different charges, fees, rentals, or deposits among classes of customers that are based on any factor the district considers appropriate. These factors include the similarity of the type of customer to other customers; the type of service provided; the cost of facilities and operations including additional costs for security, recreational facilities, or fire protection; and/or the total revenue, including ad valorem tax revenues and connection fees received from a particular class of customers.

HB 3475 amended Local Government Code, §421.017 and applies to counties adjacent to an international border and in which a military installation and national recreational area are located. This bill affects these specific counties by allowing them to acquire, construct, operate, or maintain a water supply or sewage system to serve the unincorporated areas of the county.

SECTION BY SECTION DISCUSSION

Subchapter A: General Provisions

§291.3, Definition of Terms

The commission amends the definition of "landowner" in §291.3(19) to add the phrase "as shown on the appraisal roll of the appraisal district established for each county in which the property is located" to match the language of TWC, §13.002(1-a), as amended by SB 3, §2.05, 80th Legislative Session, 2007.

The commission withdraws the proposed definition of "nonfunctioning system" in §291.3(28) in response to comment and will address the implementation of TWC, §13.046, as added by HB 149, 80th Legislative Session, 2007, in a subsequent rulemaking.

§291.14, Emergency Orders

The commission withdraws the proposed amendment to §291.14(b)(2) in response to comment and will address the implementation of TWC, §13.046, as added by HB 149, 80th Legislative Session, 2007, in a subsequent rulemaking.

Subchapter B: Rates, Rate making, and Rates/Tariff Changes

§291.21, Form and Filing of Tariffs

The commission amends §291.21, to add a reference in §291.21(b)(2)(A)(vi) to allow for minor tariff changes for consolidated billing between a separate retail public water and sewer provider, as defined in §291.3(39), for the same service area under TWC, §13.147, as added by SB 3, §2.06, 80th Legislative Session, 2007. A retail public water and sewer provider is defined in §291.3(39) as "any person, corporation, public utility, water supply or sewer service corporation, municipality, political subdivision or agency operating, maintaining, or controlling in this state facilities for providing potable water service or sewer service, or both, for compensation." This amendment is consistent with other minor tariff provisions regarding billing for sewer service.

The commission adopts new §291.21(b)(2)(A)(ix) to clarify that the implementation of an energy cost adjustment clause is a minor tariff change. The commission adopts this change in response to comment and to implement TWC, §13.046, as added by SB 3, §2.07, 80th Legislative Session, 2007.

The commission withdraws proposed new §291.21(k)(2)(E) in response to comment and will address the implementation of TWC, §13.046, as added by HB 149, 80th Legislative Session, 2007, in a subsequent rulemaking.

The commission withdraws proposed new §291.21(k)(4) in response to comment.

The commission adopts new §291.21(p) to allow the executive director to authorize a utility to timely adjust the utility's rates to reflect an increase or decrease in documented energy costs with a pass through clause. This addition includes an approval and implementation procedure. The commission adopts this change in response to comment and to implement TWC, §13.188, as amended by SB 3, §2.07, 80th Legislative Session, 2007.

The commission adopts new §291.21(p)(1) to allow a utility to request the inclusion of an energy cost adjustment clause in its tariff. The commission adopts this change in response to comment and to implement TWC, §13.188, as amended by SB 3, §2.07, 80th Legislative Session, 2007.

The commission adopts new §291.21(p)(2) to require a utility to file an application and provide notice to its affected customers to adopt an energy cost adjustment clause. The commission adopts this change in response to comment and to implement TWC, §13.188, as amended by SB 3, §2.07, 80th Legislative Session, 2007.

The commission adopts new §291.21(p)(3) to clarify that the executive director's review of energy cost adjustment clause application is not subject to a contested case hearing but that the executive director will hold an uncontested public meeting upon request by a legislator who represents that area served by the utility or if the executive director determines that there is substantial public interest in the matter. The commission adopts this change in response to comment and to implement TWC, §13.188, as amended by SB 3, §2.07, 80th Legislative Session, 2007.

The commission adopts new §291.21(p)(4) to require that increases or decreases in documented energy costs must be passed through to the utility's customers on at least an annual basis and that notice of the implementation must be provided. The commission adopts this change in response to comment and to implement TWC, §13.188, as amended by SB 3, §2.07, 80th Legislative Session, 2007.

The commission adopts new §291.21(p)(5) to outline the requirements for providing notice to the executive director and the utility's customers when a utility implements or changes its energy cost adjustment clause. The commission adopts this change in response to comment and to implement TWC, §13.188, as amended by SB 3, §2.07, 80th Legislative Session, 2007.

The commission adopts new §291.21(p)(6) to specify under what conditions the executive director may suspend the adoption or implementation of an energy cost adjustment clause and that the suspension will continue until the utility provides additional documentation requested by the executive director. The commission adopts this change in response to comment and to implement TWC, §13.188, as amended by SB 3, §2.07, 80th Legislative Session, 2007.

The commission adopts new §291.21(p)(7) to provide that energy cost adjustment clauses may not apply to contracts or transactions between affiliated interests. The commission adopts this change in response to comment and to implement TWC, §13.188, as amended by SB 3, §2.07, 80th Legislative Session, 2007.

The commission adopts new §291.21(p)(8) to provide that a proceeding under §291.21(p) is not a rate case, and TWC, §13.187 does not apply. The commission adopts this change in response to comment and to implement TWC, §13.188, as amended by SB 3, §2.07, 80th Legislative Session, 2007.

Subchapter C: Rate-Making Appeals

§291.41, Appeal of Rate-making Pursuant to the Texas Water Code, §13.043

The commission amends §291.41 to add a phrase in §291.41(i) to clarify that to the extent of a conflict between this subsection and TWC, §49.2122, TWC, §49.2122 prevails. The commission adopts this change because TWC, §49.2122, as amended by SB 3, §7.01, 80th Legislative Session, 2007, allows a district to establish different charges, fees, rentals, or deposits among classes of customers based on any factor the district considers appropriate, including the factors listed in TWC, §49.2122(a), unless the district has acted arbitrarily or capriciously.

Subchapter E: Customer Service and Protection

§291.87, Billing

The commission adopts new §291.87(g) to allow for a consolidated billing process between separate retail public water and sewer providers for the same service area to implement TWC, §13.147, as added by SB 3, §2.06, 80th Legislative Session, 2007.

The commission adopts §291.87(g)(1) to clarify that this subsection applies to all retail public utilities. The commission adopts this change to implement TWC, §13.147, as added by SB 3, §2.06, 80th Legislative Session, 2007.

The commission adopts §291.87(g)(2) to allow a retail public sewer utility to enter into a contract for consolidated billing, or seek a commission order requiring consolidated billing, from a retail public water utility service for the same service area. The commission adopts this change to implement TWC, §13.147(a), as added by SB 3, §2.06, 80th Legislative Session, 2007.

The commission adopts §291.87(g)(3) to require that a contract or order between a retail public water and sewer provider for the same service area under this subsection must provide procedures and deadlines for submitting filing and customer information to the water service provider and for the delivery of collected fees and payments to the sewer service provider. The commission adopts this change to implement TWC, §13.147(b), as added by SB 3, §2.06, 80th Legislative Session, 2007.

The commission adopts §291.87(g)(4) to require or allow a retail public water service provider that provides consolidated billing and collection of fees and payments to terminate the water services of a person whose sewage services account is in arrears for nonpayment and charge a customer a reconnection fee if the customer's water service is terminated for nonpayment of the customer's sewage services account. The commission adopts this change to implement TWC, §13.147(c), as added by SB 3, §2.06, 80th Legislative Session, 2007.

The commission adopts §291.87(g)(5) to allow a retail public water service provider that provides consolidated billing and collection of fees and payments to impose on each customer of the retail public sewer service provider a reasonable fee to recover costs associated with providing consolidated billing and collection of fees and payments for sewage services. The commission adopts this change to implement TWC, §13.147(d), as added by SB 3, §2.06, 80th Legislative Session, 2007.

The commission has relettered the subsequent subsections based on the addition of adopted new §291.87(g).

§291.88, Discontinuance of Service

The commission amends §291.88(e) to outline the duties of a water service provider to an area served by a sewer service provider in a county with a population of more than 1.3 million and in which a customer's sewer service is provided by a municipality or conservation and reclamation district that also provides water service to other customers and the same customer's water service is provided by another entity, but not including a nonprofit water supply and/or sewer service corporation created under TWC, Chapter 67, or a water district created under TWC, Chapter 65. The commission adopts this change to implement Local Government Code, §402.911, as added by SB 3, §2.32, 80th Legislative Session, 2007.

The commission amends §291.88(e)(3)(A) to specify which political subdivisions this subsection applies. This section applies only to an area that is located in a county that has a population of more than 1.3 million; and in which a customer's sewer service is provided by a municipality or conservation and reclamation district that also provides water service to other customers and the same customer's water service is provided by another entity. The commission adopts this change to implement Local Government Code, §402.911(a), as added by SB 3, §2.32, 80th Legislative Session, 2007.

The commission amends §291.88(e)(3)(B) to require the water service provider to provide the municipality or district with any relevant customer information so that the municipality or district may bill users of the sewer service directly and verify the water consumption of users. Relevant customer information provided under this section includes the name, address, and telephone number of the customer of the water service provider, the monthly meter readings of the customer, monthly consumption information, including any billing adjustments, and certain meter information, such as brand, model, age, and location. The commission adopts this change to implement Local Government Code, §402.911(b), as added by SB 3, §2.32, 80th Legislative Session, 2007.

The commission amends §291.88(e)(3)(C) to require the municipality or district to reimburse the water service provider for its reasonable and actual incremental costs for providing services to the municipality or district under this section. The commission also adopts a definition of "incremental costs" and adopts the circumstances under which the water service provider must provide the municipality or district with documentation certified by a certified public accountant. The commission adopts this change to implement Local Government Code, §402.911(c), as added by SB 3, §2.32, 80th Legislative Session, 2007.

The commission amends §291.88(e)(3)(D) to allow for written notice to persons to whom the municipality's or district's sewer service system provides service if the person has failed to pay for the service for more than 90 days and specifies the content and delivery format of the notice. The commission adopts this change to implement Local Government Code, §402.911(d), as added by SB 3, §2.32, 80th Legislative Session, 2007.

The commission amends §291.88(e)(3)(E) to allow for a notification to the water service provider for the failure of timely payment of sewer charges by a person and allow the sewer service provider to request that the water service provider discontinue service to the person. The commission adopts this change to implement Local Government Code, §402.911(e), as added by SB 3, §2.32, 80th Legislative Session, 2007.

The commission amends §291.88(e)(3)(F) to clarify that this subsection does not apply to a nonprofit water supply or sewer service corporation created under TWC, Chapter 67, or a district created under TWC, Chapter 65. The commission adopts this change to implement Local Government Code, §402.911(f), as added by SB 3, §2.32, 80th Legislative Session, 2007.

Subchapter G: Certificates of Convenience and Necessity

§291.101, Certificate Required

The commission amends §291.101(a) to reflect the legislature's intent to treat affected counties, adjacent to an international border in which a military installation and a national recreation area are located, in the same manner as a municipality. Municipalities are not required to obtain a CCN to provide service to an uncertificated area. The commission adopts this change to implement Local Government Code, §412.017, as amended by HB 3475, 80th Legislative Session, 2007.

§291.105, Contents of Certificate of Convenience and Necessity Applications

The commission amends §291.105(c)(1) by deleting the phrase "except as provided by paragraph (2) of this subsection, if." The language in existing paragraph (2) was deleted by the legislative amendments to corresponding language in TWC, §13.2451 by SB 3, §2.08, 80th Legislative Session, 2007.

The commission adopts new §291.105(c)(2) to require a municipality that seeks to extend a certificate of public convenience and necessity beyond the municipality's ETJ to comply with TWC, §13.241. The commission adopts this change to implement TWC, §13.2451, as amended by SB 3, §2.08, 80th Legislative Session. Under SB 3, §2.39(4), 80th Legislative Session, this adopted amendment applies to any application filed by a municipality or by a utility owned by a municipality for a certificate of public convenience and necessity or for an amendment to a certificate, regardless of the date the application was filed.

The commission deletes existing §291.105(c)(2) because the corresponding language in TWC, §13.2451 was deleted from TWC, §13.2451 by SB 3, §2.08, 80th Legislative Session, 2007.

The commission adopts new §291.105(c)(3), to clarify that if a conflict exists between TWC, §13.245 and this subsection, TWC, §13.245 prevails.

§291.113, Revocation or Amendment of Certificate

The commission adopts new §291.113(a)(5) to provide for the revocation or amendment of an area certificated to a municipality outside the municipality's ETJ when the municipality has not provided service to the area on or before the fifth anniversary of the date the certificate of public convenience and necessity was granted for the area, except that an area that was transferred to a municipality on approval of the commission or the executive director and in which the municipality has spent public funds may not be revoked or amended under this paragraph. The commission adopts this change to implement TWC, §13.2451(c), as added by SB 3, §2.08, 80th Legislative Session, 2007. Pursuant to SB 3, §2.39(3) and (5), 80th Legislative Session, 2007, this adopted amendment applies to a proceeding to amend or revoke a certificate of public convenience and necessity held by a municipality or by a municipally owned utility regardless of the date the proceeding was initiated and regardless of the date the certificate was issued.

Subchapter J: Enforcement, Supervision, and Receivership

§291.144, Fines and Penalties

The commission withdraws proposed new §291.144(b) in response to comment and will implement TWC, §13.046, as added by HB 149, 80th Legislative Session, 2007, in a subsequent rulemaking. With the withdrawal of proposed new §291.144(b), the current implied subsection (a) and its catchline remains unchanged.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the adopted rules in light of the regulatory analysis requirements of Texas Government Code, §2001.0225 and determined that the rulemaking is not subject to §2001.0225 because it does not meet the definition of a "major environmental rule" as defined in the Texas Administrative Procedures Act. A "major environmental rule" means a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The specific intent of the adopted rules is to implement provisions enacted in SB 3 and HB 3475 of the 80th Legislature, 2007. Generally, these amendments are intended to impact only the economic regulation of water and sewer providers. More specifically, the provisions amend the definition of a landowner for the purpose of CCN regulation, allow for consolidated billing and collection contracts between retail public water and sewer providers; allow for adjustments to utility rates to account for increases or decreases in documented energy costs; revise the rules relating to obtaining, amending, and decertifying a municipality's CCN for water and sewer service; create new duties of a water service provider to certain political subdivisions that provide sewer service to the same area; allow a district to establish different utility rates among classes of customers; and allow certain counties to operate a utility in the same manner as a municipality under Local Government Code, Chapter 402. The adopted rules are not intended to have any impact on environmental regulations. Furthermore, the adopted rulemaking does not meet any of the four applicability requirements listed in Texas Government Code, §2001.0225(a).

This rulemaking does not qualify as a major environmental rule because it does not have as its specific intent the protection of the environment or the reduction of risk to human health from environmental exposure, nor will it have an adverse economic effect. Additionally, this rulemaking does not meet the definition of a major environmental rule because it does not meet any of the four applicability requirements listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225, only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or, 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability requirements because the adopted rules: 1) are specifically required by state law, namely the TWC and Local Government Code, and do not exceed a standard set by federal law; 2) do not exceed the express requirements of the TWC or Local Government Code; 3) do not exceed a requirement of federal delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; and 4) the adopted rules will not be adopted solely under the general powers of the commission.

Based on the foregoing, the adopted rulemaking does not constitute a major environmental rule and thus is not subject to the regulatory analysis provisions of Texas Government Code, §2001.0225.

The commission invited public comment regarding the draft regulatory impact analysis determination during the public comment period and no comments were received.

TAKINGS IMPACT ASSESSMENT

The commission evaluated these adopted amendments to Chapter 291 and performed an analysis of whether these adopted rules constitute a taking under Texas Government Code, Chapter 2007. The intent of the adopted rules is to implement amendments enacted in SB 3 and HB 3475, 80th Legislature, 2007.

The adopted rules would substantially advance the intent of the rulemaking by amending the definition of a landowner for the purpose of CCN regulation; allowing for consolidated billing and collection contracts between retail public water and sewer providers; allowing for adjustments to utility rates to account for increases or decreases in documented energy costs; revising the rules relating to obtaining, amending, and decertifying a municipality's CCN for water and sewer service; creating new duties of a water service provider to certain political subdivisions that provide sewer service to the same area; allowing a district to establish different utility rates among classes of customers; and allowing certain counties to operate a utility in the same manner as a municipality under Local Government Code, Chapter 402.

Promulgation and enforcement of these adopted rules will constitute neither a statutory nor a constitutional taking of private real property. The adopted regulations do not adversely affect a landowner's rights in private real property, in whole or in part, temporarily or permanently, because this rulemaking does not burden nor restrict or limit the owner's right to property. More specifically, these rules implement CCN regulations, water and sewer utility rate regulations, and other related regulations of water and sewer service providers, none of which imposes any burdens or restrictions on private real property. Therefore, the adopted amendments do not constitute a taking under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the adopted rules and found that they are neither identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11(b)(2) or (4), nor will they affect any action/authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11(a)(6). Therefore, the adopted rules are not subject to the Texas Coastal Management Program.

The commission invited public comment regarding the consistency with the coastal management program during the public comment period and no comments were received.

PUBLIC COMMENT

The commission held a public hearing for this rule on February 26, 2008, in Austin, Texas. The public comment period for this rulemaking closed on March 3, 2008. The commission received comments from Representative Callegari; Aqua Texas, Inc. (Aqua); Russell & Rodriguez LLP on behalf of the Cities' Coalition on CCNs (Cities' Coalition); and Texas Rural Water Association (TRWA).

RESPONSE TO COMMENTS

Representative Callegari and Aqua commented that the proposed rules did not include a procedure for water and sewer utilities to file an application with the commission to adjust their rates to reflect changing energy costs. In its comments, Aqua provided a recommended procedure. Aqua's procedure included a requirement that the utility provide energy cost information in its annual report, or the utility would not be able to implement an increase in energy costs. The procedure also included a provision under which decreases in energy costs of $0.50 or less would be implemented within 90 days of the decrease, or the executive director could order the utility to implement the change. Additionally, Representative Callegari and Aqua commented that the proposed rules did not provide a proper mechanism for utilities to pass through documented increases and decreases in energy costs within a reasonable time.

The commission responds that it had intended to develop the procedure for adopting and implementing energy cost adjustment clauses in a regulatory guidance document but acknowledges that the procedure can be placed in the rules. Regarding the pass through, the proposed rules allowed a utility to adjust its rates to reflect changing energy costs via a surcharge. However, the commission acknowledges that this can be done via a pass through clause. Therefore, the commission withdraws proposed §291.21(k)(4) and adds §291.21(b)(2)(A)(ix) and §291.21(p). These provisions clarify that the implementation of this clause is processed by the executive director as a minor tariff change and include the procedure for the approval and implementation of the clause. The commission incorporated some of the procedures recommended by Aqua into §291.21(b)(2)(A)(ix) and §291.21(p) but did not adopt the annual report provision or the $0.50 decrease provision. The commission may alter its annual report form so that utilities will have to provide their documented energy costs within the report; however, the commission will not make the implementation of increases in document energy costs dependent on providing such information as utilities already have to provide this information when they provide notice of the implementation. Furthermore, the utility must implement increases and decreases on at least an annual basis and the executive director can suspend the implementation if it finds the provided information insufficient. The commission also did not adopt the $0.50 decrease provision because all decreases in documented energy costs must be implemented within a reasonable time and on at least an annual basis. TWC, §13.188, does not distinguish between decreases that are more than $0.50 and decreases that are equal to or less than $0.50, and the commission does not find any reason to create such a distinction.

Aqua commented that §291.21(h)(4)(B) should be amended to apply to affected customers only.

The commission declines to make this change as that change is outside the scope of this rulemaking.

Cities' Coalition commented that they are in support of the proposed change to the definition of "landowner" in §291.3(19).

The commission acknowledges this comment in support of the proposed rule.

Cities' Coalition commented that they are in support of the proposed change to §291.105(c)(2) and (3) which address the ability to extend a CCN beyond a municipality's ETJ.

The commission acknowledges this comment in support of the proposed rule.

Cities' Coalition commented that proposed §291.113(a)(5) provides that if an area is certificated to a municipality outside of its ETJ, the municipality must be serving that area on or before the fifth anniversary of the date the CCN was granted or the CCN can be revoked. Cities' Coalition stated that the clear intent of this language is to apply the five-year provision to all extensions of CCNs that are granted after September 1, 2007.

The commission responds that SB 3, §2.39, specifies the instances in which TWC, §13.2451, applies. Under §2.39(3), TWC, §13.2451 applies to "a certificate of public convenience and necessity issued to a municipality, regardless of the date the certificate was issued (emphasis added)." Therefore, §291.113(a)(5) applies to a municipality's CCN no matter when the CCN was issued. The commission has made no change in response to this comment.

Cities' Coalition commented that the opportunity for a hearing should detail that a contested case hearing should be allowed.

The commission responds that under §291.113(a), the opportunity for a contested case hearing already exists. No change has been made in response to this comment.

TRWA commented that the definition of "nonfunctioning system" in proposed §291.3(28) improperly applies only to utilities. Under TWC, §13.046(a), TRWA proposed to broaden the definition of "nonfunctioning system" to include a retail public utility that is failing to maintain adequate water or wastewater capacity; is failing to maintain facilities capable of providing continuous and adequate service; or is failing to provide service adequate for the protection of public health and welfare or the environment. TRWA also commented that proposed §291.21(k)(2)(E) failed to accurately implement the procedure contemplated by TWC, §13.046(a), and as proposed, this subparagraph does not protect cities, districts, or nonprofit water supply companies from expensive and time-consuming appeals by customers of a nonfunctioning system.

The commission responds that in light of TRWA's comment regarding the definition of "nonfunctioning system," the commission will need to reconsider whether the definition applies to retail public utilities or only to utilities. Even if the commission did expand the definition at this time to include all retail public utilities, retail public utilities that are not utilities would not have had received proper notice that the proposed rules regarding nonfunctioning systems will apply to them. Therefore, the proposed definition of "nonfunctioning system" and other proposed rules regarding nonfunctioning systems will be withdrawn. The commission will not adopt §291.3(28) and §291.21(k)(2)(E) as proposed and withdraws proposed §291.14 and §291.144. The commission will address the implementation of TWC, §13.046, as added by HB 149, 80th Legislative Session, 2007, in a subsequent rulemaking.

SUBCHAPTER A. GENERAL PROVISIONS

30 TAC §291.3

STATUTORY AUTHORITY

The amendment is adopted under Texas Water Code (TWC), §5.102, which provides the commission the general powers to carry out its duties under the TWC, and TWC, §5.103, which provides the commission with the authority to adopt any rules necessary to carry out its powers and duties under the provisions of the TWC and other laws of this state. In addition, TWC, §13.041 states that the commission may regulate and supervise the business of every water and sewer utility within its jurisdiction and may do all things, whether specifically designated in TWC, Chapter 13 or implied in TWC, Chapter 13, necessary and convenient to the exercise of this power and jurisdiction. Further, TWC, §13.041 also states that the commission shall adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules governing practice and procedure before the commission.

The adopted amendment implements TWC, §13.002.

§291.3.Definitions of Terms.

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise.

(1) Acquisition adjustment--

(A) The difference between:

(i) the lesser of the purchase price paid by an acquiring utility or the current depreciated replacement cost of the plant, property, and equipment comparable in size, quantity, and quality to that being acquired, excluding customer contributed property; and

(ii) the original cost of the plant, property, and equipment being acquired, excluding customer contributed property, less accumulated depreciation.

(B) A positive acquisition adjustment results when subparagraph (A)(i) of this paragraph is greater than subparagraph (A)(ii) of this paragraph.

(C) A negative acquisition adjustment results when subparagraph (A)(ii) of this paragraph is greater than subparagraph (A)(i) of this paragraph.

(2) Affected county--A county to which Local Government Code, Chapter 232, Subchapter B, applies.

(3) Affected person--Any landowner within an area for which an application for a new or amended certificate of public convenience and necessity is filed; any retail public utility affected by any action of the regulatory authority; any person or corporation, whose utility service or rates are affected by any proceeding before the regulatory authority; or any person or corporation that is a competitor of a retail public utility with respect to any service performed by the retail public utility or that desires to enter into competition.

(4) Affiliated interest or affiliate--

(A) any person or corporation owning or holding directly or indirectly 5.0% or more of the voting securities of a utility;

(B) any person or corporation in any chain of successive ownership of 5.0% or more of the voting securities of a utility;

(C) any corporation 5.0% or more of the voting securities of which is owned or controlled directly or indirectly by a utility;

(D) any corporation 5.0% or more of the voting securities of which is owned or controlled directly or indirectly by any person or corporation that owns or controls directly or indirectly 5.0% or more of the voting securities of any utility or by any person or corporation in any chain of successive ownership of 5.0% of those utility securities;

(E) any person who is an officer or director of a utility or of any corporation in any chain of successive ownership of 5.0% or more of voting securities of a public utility;

(F) any person or corporation that the commission, after notice and hearing, determines actually exercises any substantial influence or control over the policies and actions of a utility or over which a utility exercises such control or that is under common control with a utility, such control being the possession directly or indirectly of the power to direct or cause the direction of the management and policies of another, whether that power is established through ownership or voting of securities or by any other direct or indirect means; or

(G) any person or corporation that the commission, after notice and hearing, determines is exercising substantial influence over the policies and action of the utility in conjunction with one or more persons or corporations with which they are related by ownership or blood relationship, or by action in concert, that together they are affiliated within the meaning of this section, even though no one of them alone is so affiliated.

(5) Agency--Any state board, commission, department, or officer having statewide jurisdiction (other than an agency wholly financed by federal funds, the legislature, the courts, the Workers' Compensation Commission, and institutions for higher education) which makes rules or determines contested cases.

(6) Allocations--For all retail public utilities, the division of plant, revenues, expenses, taxes, and reserves between municipalities, or between municipalities and unincorporated areas, where such items are used for providing water or sewer utility service in a municipality or for a municipality and unincorporated areas.

(7) Base rate--The portion of a consumer's utility bill which is paid for the opportunity of receiving utility service, excluding stand-by fees, which does not vary due to changes in utility service consumption patterns.

(8) Billing period--The usage period between meter reading dates for which a bill is issued or in nonmetered situations, the period between bill issuance dates.

(9) Certificate--The definition of certificate is that definition given to certificate of convenience and necessity in this subchapter.

(10) Certificate of Convenience and Necessity--A permit issued by the commission which authorizes and obligates a retail public utility to furnish, make available, render, or extend continuous and adequate retail water or sewer utility service to a specified geographic area.

(11) Certificate of Public Convenience and Necessity--The definition of certificate of public convenience and necessity is that definition given to certificate of convenience and necessity in this subchapter.

(12) Class of service or customer class--A description of utility service provided to a customer which denotes such characteristics as nature of use or type of rate.

(13) Code--The Texas Water Code.

(14) Corporation--Any corporation, joint-stock company, or association, domestic or foreign, and its lessees, assignees, trustees, receivers, or other successors in interest, having any of the powers and privileges of corporations not possessed by individuals or partnerships, but shall not include municipal corporations unless expressly provided otherwise in the Texas Water Code.

(15) Customer--Any person, firm, partnership, corporation, municipality, cooperative, organization, or governmental agency provided with services by any retail public utility.

(16) Customer service line or pipe--The pipe connecting the water meter to the customer's point of consumption or the pipe which conveys sewage from the customer's premises to the service provider's service line.

(17) Facilities--All the plant and equipment of a retail public utility, including all tangible and intangible real and personal property without limitation, and any and all means and instrumentalities in any manner owned, operated, leased, licensed, used, controlled, furnished, or supplied for, by, or in connection with the business of any retail public utility.

(18) Incident of tenancy--Water or sewer service, provided to tenants of rental property, for which no separate or additional service fee is charged other than the rental payment.

(19) Landowner--An owner or owners of a tract of land including multiple owners of a single deeded tract of land as shown on the appraisal roll of the appraisal district established for each county in which the property is located.

(20) License--The whole or part of any commission permit, certificate, registration, or similar form of permission required by law.

(21) Licensing--The commission process respecting the granting, denial, renewal, revocation, suspension, annulment, withdrawal, or amendment of a license, certificates of convenience and necessity, or any other authorization granted by the commission in accordance with its authority under the Texas Water Code.

(22) Main--A pipe operated by a utility service provider that is used for transmission or distribution of water or to collect or transport sewage.

(23) Mandatory water use reduction--The temporary reduction in the use of water imposed by court order, government agency, or other authority with appropriate jurisdiction. This does not include water conservation measures that seek to reduce the loss or waste of water, improve the efficiency in the use of water, or increase the recycling or reuse of water so that a water supply is made available for future or alternative uses.

(24) Member--A person who holds a membership in a water supply or sewer service corporation and who is a record owner of a fee simple title to property in an area served by a water supply or sewer service corporation, or a person who is granted a membership and who either currently receives or will be eligible to receive water or sewer utility service from the corporation. In determining member control of a water supply or sewer service corporation, a person is entitled to only one vote regardless of the number of memberships the person owns.

(25) Membership fee--A fee assessed each water supply or sewer service corporation service applicant that entitles the applicant to one connection to the water or sewer main of the corporation. The amount of the fee is generally defined in the corporation's bylaws and payment of the fee provides for issuance of one membership certificate in the name of the applicant, for which certain rights, privileges, and obligations are allowed under said bylaws. For purposes of Texas Water Code, §13.043(g), a membership fee is a fee not exceeding approximately 12 times the monthly base rate for water or sewer service or an amount that does not include any materials, labor, or services required for or provided by the installation of a metering device for the delivery of service, capital recovery, extension fees, buy-in fees, impact fees, or contributions in aid of construction.

(26) Municipality--A city, existing, created, or organized under the general, home rule, or special laws of this state.

(27) Municipally owned utility--Any retail public utility owned, operated, and controlled by a municipality or by a nonprofit corporation whose directors are appointed by one or more municipalities.

(28) Person--Any natural person, partnership, cooperative corporation, association, or public or private organization of any character other than an agency or municipality.

(29) Physician--Any public health official, including, but not limited to, medical doctors, doctors of osteopathy, nurse practitioners, registered nurses, and any other similar public health official.

(30) Point of use or point of ultimate use--The primary location where water is used or sewage is generated; for example, a residence or commercial or industrial facility.

(31) Potable water--Water that is used for or intended to be used for human consumption or household use.

(32) Premises--A tract of land or real estate including buildings and other appurtenances thereon.

(33) Public utility--The definition of public utility is that definition given to water and sewer utility in this subchapter.

(34) Purchased sewage treatment--Sewage treatment purchased from a source outside the retail public utility's system to meet system requirements.

(35) Purchased water--Raw or treated water purchased from a source outside the retail public utility's system to meet system demand requirements.

(36) Rate--Includes every compensation, tariff, charge, fare, toll, rental, and classification or any of them demanded, observed, charged, or collected, whether directly or indirectly, by any retail public utility, or water or sewer service supplier, for any service, product, or commodity described in Texas Water Code, §13.002(23), and any rules, regulations, practices, or contracts affecting any such compensation, tariff, charge, fare, toll, rental, or classification.

(37) Ratepayer--Each person receiving a separate bill shall be considered as a ratepayer, but no person shall be considered as being more than one ratepayer notwithstanding the number of bills received. A complaint or a petition for review of a rate change shall be considered properly signed if signed by any person, or spouse of any such person, in whose name utility service is carried.

(38) Reconnect fee--A fee charged for restoration of service where service has previously been provided. It may be charged to restore service after disconnection for reasons listed in §291.88 of this title (relating to Discontinuance of Service) or to restore service after disconnection at the customer's request.

(39) Retail public utility--Any person, corporation, public utility, water supply or sewer service corporation, municipality, political subdivision or agency operating, maintaining, or controlling in this state facilities for providing potable water service or sewer service, or both, for compensation.

(40) Retail water or sewer utility service--Potable water service or sewer service, or both, provided by a retail public utility to the ultimate consumer for compensation.

(41) Safe drinking water revolving fund--The fund established by the Texas Water Development Board to provide financial assistance in accordance with the federal program established under the provisions of the Safe Drinking Water Act and as defined in Texas Water Code, §15.602.

(42) Service--Any act performed, anything furnished or supplied, and any facilities or lines committed or used by a retail public utility in the performance of its duties under the Texas Water Code to its patrons, employees, other retail public utilities, and the public, as well as the interchange of facilities between two or more retail public utilities.

(43) Service line or pipe--A pipe connecting the utility service provider's main and the water meter or for sewage, connecting the main and the point at which the customer's service line is connected, generally at the customer's property line.

(44) Sewage--Ground garbage, human and animal, and all other waterborne type waste normally disposed of through the sanitary drainage system.

(45) Standby fee--A charge imposed on unimproved property for the availability of water or sewer service when service is not being provided.

(46) Tap fee--A tap fee is the charge to new customers for initiation of service where no service previously existed. A tap fee for water service may include the cost of physically tapping the water main and installing meters, meter boxes, fittings, and other materials and labor. A tap fee for sewer service may include the cost of physically tapping the main and installing the utility's service line to the customer's property line, fittings, and other material and labor. Water or sewer taps may include setting up the new customer's account, and allowances for equipment and tools used. Extraordinary expenses such as road bores and street crossings and grinder pumps may be added if noted on the utility's approved tariff. Other charges, such as extension fees, buy-in fees, impact fees, or contributions in aid of construction (CIAC) are not to be included in a tap fee.

(47) Tariff--The schedule of a retail public utility containing all rates, tolls, and charges stated separately by type or kind of service and the customer class, and the rules and regulations of the retail public utility stated separately by type or kind of service and the customer class.

(48) Temporary water rate provision--A provision in a utility's tariff that allows a utility to adjust its rates in response to mandatory water use reduction.

(49) Test year--The most recent 12-month period for which representative operating data for a retail public utility are available. A utility rate filing must be based on a test year that ended less than 12 months before the date on which the utility made the rate filing.

(50) Utility--The definition of utility is that definition given to water and sewer utility in this subchapter.

(51) Water and sewer utility--Any person, corporation, cooperative corporation, affected county, or any combination of those persons or entities, other than a municipal corporation, water supply or sewer service corporation, or a political subdivision of the state, except an affected county, or their lessees, trustees, and receivers, owning or operating for compensation in this state equipment or facilities for the production, transmission, storage, distribution, sale, or provision of potable water to the public or for the resale of potable water to the public for any use or for the collection, transportation, treatment, or disposal of sewage or other operation of a sewage disposal service for the public, other than equipment or facilities owned and operated for either purpose by a municipality or other political subdivision of this state or a water supply or sewer service corporation, but does not include any person or corporation not otherwise a public utility that furnishes the services or commodity only to itself or its employees or tenants as an incident of that employee service or tenancy when that service or commodity is not resold to or used by others.

(52) Water use restrictions--Restrictions implemented to reduce the amount of water that may be consumed by customers of the system due to emergency conditions or drought.

(53) Water supply or sewer service corporation--Any nonprofit corporation organized and operating under Texas Water Code, Chapter 67, that provides potable water or sewer service for compensation and that has adopted and is operating in accordance with by-laws or articles of incorporation which ensure that it is member-owned and member-controlled. The term does not include a corporation that provides retail water or sewer service to a person who is not a member, except that the corporation may provide retail water or sewer service to a person who is not a member if the person only builds on or develops property to sell to another and the service is provided on an interim basis before the property is sold. For purposes of this chapter, to qualify as member-owned, member-controlled a water supply or sewer service corporation must also meet the following conditions.

(A) All members of the corporation meet the definition of "member" under this section, and all members are eligible to vote in those matters specified in the articles and bylaws of the corporation. Payment of a membership fee in addition to other conditions of service may be required provided that all members have paid or are required to pay the membership fee effective at the time service is requested.

(B) Each member is entitled to only one vote regardless of the number of memberships owned by that member.

(D) The corporation's by-laws include language indicating that the factors specified in subparagraphs (A) - (C) of this paragraph are in effect.

(54) Wholesale water or sewer service--Potable water or sewer service, or both, provided to a person, political subdivision, or municipality who is not the ultimate consumer of the service.

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803188

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: February 1, 2008

For further information, please call: (512) 239-2548

SUBCHAPTER B. RATES, RATE MAKING, AND RATES/TARIFF CHANGES

30 TAC §291.21

STATUTORY AUTHORITY

The amendment is adopted under Texas Water Code (TWC), §5.102, which provides the commission the general powers to carry out its duties under the TWC, and §5.103, which provides the commission with the authority to adopt any rules necessary to carry out its powers and duties under the provisions of the TWC and other laws of this state. In addition, TWC, §13.041 states that the commission may regulate and supervise the business of every water and sewer utility within its jurisdiction and may do all things, whether specifically designated in TWC, Chapter 13 or implied in TWC, Chapter 13, necessary and convenient to the exercise of this power and jurisdiction. Further, TWC, §13.041 also states that the commission shall adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules governing practice and procedure before the commission. Finally, TWC, §13.188 mandates that the commission shall adopt a procedure allowing a utility to file an application with the commission to timely adjust the utility's rates to reflect an increase or decrease in documented energy costs.

The adopted amendment implements TWC, §13.147 and §13.188.

§291.21.Form and Filing of Tariffs.

(a) Approved tariff. A utility may not directly or indirectly demand, charge, or collect any rate or charge, or impose any classifications, practices, rules, or regulations different from those prescribed in its approved tariff filed with the commission or with the municipality exercising original jurisdiction over the utility, except as noted in this subsection. A utility may charge the rates proposed under Texas Water Code (TWC), §13.187(a) (relating to Statement of Intent to Change Rates) after the proposed effective date, unless the rates are suspended or the commission or a judge sets interim rates. The regulatory assessment required in TWC, §5.235(n) does not have to be listed on the utility's approved tariff to be charged and collected but must be included in the tariff at the earliest opportunity. A person who possesses facilities used to provide water utility service or a utility that holds a certificate of public convenience and necessity to provide water service that enters into an agreement in accordance with TWC, §13.250(b)(2), may collect charges for wastewater services on behalf of another retail public utility on the same bill with its water charges and shall at the earliest opportunity include a notation on its tariff that it has entered into such an agreement. A utility may enter into a contract with a county to collect solid waste disposal fees and include those fees on the same bill with its water charges and shall at the earliest opportunity include a notation on its tariff that it has entered into such an agreement.

(b) Requirements as to size, form, identification, minor changes, and filing of tariffs.

(1) Tariffs filed with applications for certificates of convenience and necessity.

(A) Every public utility shall file with the commission the number of copies of its tariff required in the application form containing schedules of all its rates, tolls, charges, rules, and regulations pertaining to all of its utility service when it applies for a certificate of convenience and necessity to operate as a public utility. The tariff must be on the form the commission prescribes or another form acceptable to the commission.

(B) Every water supply or sewer service corporation shall file with the commission the number of copies of its tariff required in the application form containing schedules of all its rates, tolls, charges, rules, and regulations pertaining to all of its utility service when it applies for a certificate of convenience and necessity to operate as a retail public utility.

(2) Minor tariff changes. Except for an affected county, a public utility's approved tariff may not be changed or amended without commission approval. An affected county may change rates for water or wastewater service without commission approval but shall file a copy of the revised tariff with the commission within 30 days after the effective date of the rate change.

(A) The executive director may approve the following minor changes to tariffs:

(i) service rules and policies;

(ii) changes in fees for customer deposits, meter tests, return check charges, and late charges, provided they do not exceed the maximum allowed by the applicable sections;

(iii) implementation of a purchased water or sewage treatment provision, a temporary water rate provision in response to mandatory reductions in water use imposed by a court, government agency, or other authority, or water use fee provision previously approved by the commission;

(iv) surcharges over a time period determined by the executive director to reflect the change in the actual cost to the utility for sampling costs, commission inspection fees, or at the discretion of the executive director, other governmental requirements beyond the utility's control;

(v) addition of the regulatory assessment as a separate item or to be included in the currently authorized rate;

(vi) addition of a provision allowing a utility to collect wastewater charges in accordance with TWC, §13.250(b)(2) or §13.147(d);

(vii) rate adjustments to implement authorized phased or multi-step rates or downward rate adjustments to reconcile rates with actual costs;

(viii) addition of a production fee charged by a groundwater conservation district as a separate item calculated by multiplying the customer's total consumption, including the number of gallons in the base bill, by the actual production fee per thousand gallons; or

(ix) implementation of an energy cost adjustment clause.

(B) The addition of an extension policy to a tariff or a change to an existing extension policy does not qualify as a minor tariff change because it must be approved or amended in a rate change application.

(3) Tariff revisions and tariffs filed with rate changes. The utility shall file three copies of each revision or in the case of a rate change, the number required in the application form. Each revision must be accompanied by a cover page that contains a list of pages being revised, a statement describing each change, its effect if it is a change in an existing rate, and a statement as to impact on rates of the change by customer class, if any. If a proposed tariff revision constitutes an increase in existing rates of a particular customer class or classes, then the commission may require that notice be given.

(4) Rate schedule. Each rate schedule must clearly state the territory, subdivision, city, or county in which the schedule is applicable.

(5) Tariff sheets. Tariff sheets must be numbered consecutively. Each sheet must show an effective date, a revision number, section number, sheet number, name of the utility, the name of the tariff, and title of the section in a consistent manner. Sheets issued under new numbers must be designated as original sheets. Sheets being revised must show the number of the revision, and the sheet numbers must be the same.

(c) Composition of tariffs. A utility's tariff, including those utilities operating within the corporate limits of a municipality, must contain sections setting forth:

(1) a table of contents;

(2) a list of the cities and counties, and subdivisions or systems, in which service is provided;

(3) the certificate of convenience and necessity number under which service is provided;

(4) the rate schedules;

(5) the service rules and regulations, including forms of the service agreements, if any, and customer service inspection forms required to be completed under §290.46(j) of this title (relating to Minimum Acceptable Operating Practices for Public Drinking Water Systems) if the form used deviates from that specified in §290.47(d) of this title (relating to Appendices);

(6) the extension policy;

(7) an approved drought contingency plan as required by §288.20 of this title (relating to Drought Contingency Plans for Municipal Uses by Public Water Suppliers); and

(8) the form of payment to be accepted for utility services.

(d) Tariff filings in response to commission orders. Tariff filings made in response to an order issued by the commission must include a transmittal letter stating that the tariffs attached are in compliance with the order, giving the application number, date of the order, a list of tariff sheets filed, and any other necessary information. Any service rules proposed in addition to those listed on the commission's model tariff or any modifications of a rule in the model tariff must be clearly noted. All tariff sheets must comply with all other sections in this chapter and must include only changes ordered. The effective date and/or wording of the tariffs must comply with the provisions of the order.

(e) Availability of tariffs. Each utility shall make available to the public at each of its business offices and designated sales offices within Texas all of its tariffs currently on file with the commission or regulatory authority, and its employees shall lend assistance to persons requesting information and afford these persons an opportunity to examine any of such tariffs upon request. The utility also shall provide copies of any portion of the tariffs at a reasonable cost to reproduce such tariff for a requesting party.

(f) Rejection. Any tariff filed with the commission and found not to be in compliance with this section must be so marked and returned to the utility with a brief explanation of the reasons for rejection.

(g) Change by other regulatory authorities. Tariffs must be filed to reflect changes in rates or regulations set by other regulatory authorities and must include a copy of the order or ordinance authorizing the change. Each utility operating within the corporate limits of a municipality exercising original jurisdiction shall file with the commission a copy of its current tariff that has been authorized by the municipality.

(h) Purchased water or sewage treatment provision.

(1) A utility that purchases water or sewage treatment may include a provision in its tariff to pass through to its customers changes in such costs. The provision must specify how it is calculated and affects customer billings.

(2) This provision must be approved by the commission in a rate proceeding. A proposed change in the method of calculation of the provision must be approved in a rate proceeding.

(3) Once the provision is approved, any revision of a utility's billings to its customers to allow for the recovery of additional costs under the provision may be made only upon issuing notice as required by paragraph (4) of this subsection. The executive director's review of a proposed revision is an informal proceeding. Only the commission, the executive director, or the utility may request a hearing on the proposed revision. The recovery of additional costs is defined as an increase in water use fees or in costs of purchased water or sewage treatment.

(4) A utility that wishes to revise utility billings to its customers pursuant to an approved purchased water or sewer treatment or water use fee provision to allow for the recovery of additional costs shall take the following actions prior to the beginning of the billing period in which the revision takes effect:

(A) submit a written notice to the executive director; and

(B) mail notice to the utility's customers. Notice may be in the form of a billing insert and must contain the effective date of the change, the present calculation of customer billings, the new calculation of customer billings, and the change in charges to the utility for purchased water or sewage treatment or water use fees. The notice must include the following language: "This tariff change is being implemented in accordance with the utility's approved (purchased water) (purchased sewer) (water use fee) adjustment clause to recognize (increases) (decreases) in the (water use fee) (cost of purchased) (water) (sewage treatment). The cost of these charges to customers will not exceed the (increased) (decreased) cost of (the water use fee) (purchased) (water) (sewage treatment)."

(5) Notice to the commission must include a copy of the notice sent to the customers, proof that the cost of purchased water or sewage treatment has changed by the stated amount, and the calculations and assumptions used to determine the new rates.

(6) Purchased water or sewage treatment provisions may not apply to contracts or transactions between affiliated interests.

(i) Effective date. The effective date of a tariff change is the date of approval by the executive director unless otherwise stated in the letter transmitting the approval or the date of approval by the commission, unless otherwise specified in a commission order or rule. The effective date of a proposed rate increase under TWC, §13.187 is the proposed date on the notice to customers and the commission, unless suspended and must comply with the requirements of §291.8(b) of this title (relating to Administrative Completeness).

(j) Tariffs filed by water supply or sewer service corporations. Every water supply or sewer service corporation shall file, for informational purposes only, one copy of its tariff showing all rates that are subject to the appellate jurisdiction of the commission and that are in force for any utility service, product, or commodity offered. The tariff must include all rules and regulations relating to or affecting the rates, utility service or extension of service or product, or commodity furnished and shall specify the certificate of convenience and necessity number and in which counties or cities it is effective.

(k) Surcharge.

(1) A surcharge is an authorized rate to collect revenues over and above the usual cost of service.

(2) If specifically authorized for the utility in writing by the executive director or the municipality exercising original jurisdiction over the utility, a surcharge to recover the actual increase in costs to the utility may be collected over a specifically authorized time period without being listed on the approved tariff for:

(A) sampling fees not already included in rates;

(B) inspection fees not already included in rates;

(D) other governmental requirements beyond the control of the utility.

(3) A utility shall use the revenues collected pursuant to a surcharge only for the purposes noted and handle the funds in the manner specified according to the notice or application submitted by the utility to the commission, unless otherwise directed by the executive director. The utility may redirect or use the revenues for other purposes only after first obtaining the approval of the executive director.

(l) Temporary water rate.

(1) A utility's tariff may include a temporary water rate provision that will allow the utility to increase its retail customer rates during periods when a court, government agency, or other authority orders mandatory water use reduction measures that affect the utility customer' use of water service and the utility's water revenues. Implementation of the temporary water rate provision will allow the utility to recover from customers revenues that the utility would otherwise have lost due to mandatory water use reductions in accordance with the temporary water rate provision approved by the commission. If a utility obtains a portion of its water supply from another unrestricted water source or water supplier during the time the temporary water rate is in effect, the rate resulting from implementation of the temporary water rate provision must be adjusted to account for the supplemental water supply and to limit over-recovery of revenues from customers. A temporary water rate provision may not be implemented by a utility if there exists an available, unrestricted, alternative water supply that the utility can use to immediately replace, without additional cost, the water made unavailable because of the action requiring a mandatory reduction of use of the affected water supply.

(2) The temporary water rate provision must be approved by the commission in a rate proceeding before it may be included in the utility's approved tariff or implemented as provided in this subsection. A proposed change in the temporary water rate must be approved in a rate proceeding. A utility that has filed a rate change within the last 12 months may file a request for the limited purpose of obtaining a temporary water rate provision.

(3) A utility may request a temporary water rate provision using the formula in this paragraph to recover 50% or less of the revenues that would otherwise have been lost due to mandatory water use reductions through a limited rate proceeding. The formula for a temporary water rate provision under this paragraph is:

Figure: 30 TAC §291.21(l)(3) (No change.)

(A) The utility shall file a temporary water rate application prescribed by the executive director and provide customer notice as required in the application, but is not required to provide complete financial data to support its existing rates. Notice must include a statement of when the temporary water rate provision would be implemented, the classes of customers affected, the rates affected, information on how to protest the rate change, the required number of protests to ensure a hearing, the address of the commission, the time frame for protests, and any other information that is required by the executive director in the temporary water rate application. The utility's existing rates are not subject to review in the proceeding and the utility is only required to support the need for the temporary rate. A request for a temporary water rate provision under this paragraph is not considered a statement of intent to increase rates subject to the 12-month limitation in §291.23 of this title (relating to Time between Filings).

(4) A utility may request a temporary water rate provision using the formula in paragraph (3) of this subsection or any other method acceptable to the commission to recover up to 100% of the revenues that would otherwise have been lost due to mandatory water use reductions.

(A) If the utility requests authorization to recover more than 50% of lost revenues, it shall submit financial data to support its existing rates as well as the temporary water rate provision even if no other rates are proposed to be changed. The utility shall complete a rate application and provide notice in accordance with the requirements of §291.22 of this title (relating to Notice of Intent To Change Rates). The utility's existing rates are subject to review in addition to the temporary water rate provision.

(B) The utility shall establish that the projected revenues that will be generated by the temporary water rate provision are required by the utility to pay reasonable and necessary expenses that will be incurred by the utility during the time mandatory water use reductions are in effect; that the rate of return granted by the commission in the utility's last rate case does not adequately compensate the utility for the foreseeable risk that mandatory water use reductions will be ordered; and that revenues generated by existing rates do not exceed reasonable cost of service.

(5) The utility may place the temporary water rate into effect only after:

(A) the temporary water provision has been approved by the commission and included in the utility's approved tariff in a prior rate proceeding;

(B) there is an action by a court, government agency, or other authority requiring mandatory water use reduction measures that affect the utility's customers' use of utility services; and

(6) The utility may readjust its rates using the temporary water rate provision as necessary to respond to modifications or changes to the original order requiring mandatory water use reductions by reissuing notice as required by paragraph (7) of this subsection. The executive director's review of the proposed implementation of an approved temporary water rate provision is an informal proceeding. Only the commission, the executive director, or the utility may request a hearing on the proposed implementation.

(7) A utility that wishes to place a temporary water rate into effect shall take the following actions prior to the beginning of the billing period in which the temporary water rate takes effect:

(A) submit a written notice, including a copy of the notice received from the court, government agency, or other authority requiring the reduction in water use, to the executive director; and

(B) mail notice to the utility's customers. Notice may be in the form of a billing insert and must contain the effective date of the implementation and the new rate the customers will pay after the temporary water rate is implemented. The notice must include the following language: "This rate change is being implemented in accordance with the temporary water rate provision approved by the Texas Commission on Environmental Quality to recognize the loss of revenues due to mandatory water use reduction ordered by (name of entity issuing order). The new rates will be effective on (date) and will remain in effect until the mandatory water use reductions are lifted or expired. The purpose of the rate is to ensure the financial integrity of the utility. The utility will recover through the rate (the percentage authorized by the temporary rate) % of the revenues the utility would otherwise have lost due to mandatory water use reduction by increasing the volume charge from ($ per 1,000 gallons to $ per 1,000 gallons)."

(8) A utility shall stop charging a temporary water rate as soon as is practical after the order that required mandatory water use reduction is ended, but in no case later than the end of the billing period that was in effect when the order was ended. The utility shall notify its customers of the date that the temporary water rate ends and that its rates will return to the level authorized before the temporary water rate was implemented.

(9) If the commission initiates an inquiry into the appropriateness or the continuation of a temporary water rate, it may establish the effective date of its decision on or after the date the inquiry is filed.

(m) Multiple system consolidation. Except as otherwise provided in subsection (o) of this section, a utility may consolidate its tariff and rate design for more than one system if:

(1) the systems included in the tariff are substantially similar in terms of facilities, quality of service, and cost of service; and

(2) the tariff provides for rates that promote water conservation for single-family residences and landscape irrigation.

(n) Regional rates. The commission, where practicable, shall consolidate the rates by region for applications submitted with a consolidated tariff and rate design for more than one system.

(o) Exemption. Subsection (m) of this section does not apply to a utility that provided service in only 24 counties on January 1, 2003.

(p) Energy cost adjustment clause.

(1) A utility that purchases energy (electricity or natural gas) that is necessary for the provision of water or sewer service may request the inclusion of an energy cost adjustment clause in its tariff to allow the utility to adjust its rates to reflect increases and decreases in documented energy costs.

(2) A utility that requests the inclusion of an energy cost adjustment clause in its tariff shall file an application with the executive director. The utility shall also give notice of the proposed energy cost adjustment clause by mail, either separately or accompanying customer billings, or by hand delivery to all affected utility customers at least 60 days prior to the proposed effective date. Proof of notice in the form of an affidavit stating that proper notice was mailed to affected customers and stating the dates of such mailing shall be filed with the commission by the applicant utility as part of the application. Notice must be provided on the notice form included in the commission's application package and must contain the following information:

(A) the utility name and address, a description of how the increase or decrease in energy costs will be calculated, the effective date of the proposed change, and the classes of utility customers affected. The effective date of the proposed energy cost adjustment clause must be the first day of a billing period, which should correspond to the day of the month when meters are typically read, and the clause may not apply to service received before the effective date of the clause;

(B) information on how to submit comments regarding the energy cost adjustment clause, the address of the commission, and the time frame for comments; and

(3) The executive director's review of the utility's application is an uncontested matter not subject to a contested case hearing. However, the executive director shall hold an uncontested public meeting on the application if requested by a member of the legislature who represents the area served by the utility or if the executive director determines that there is substantial public interest in the matter.

(4) Once an energy cost adjustment clause has been approved, documented changes in energy costs must be passed through to the utility's customers within a reasonable time. The pass through, whether an increase or decrease, shall be implemented on at least an annual basis, unless the executive director determines a special circumstance applies. Anytime changes are being made using this provision, notice shall be provided as required by paragraph (5) of this subsection.

(5) Before a utility implements a change in its energy cost adjustment clause as required by paragraph (4) of this subsection, the utility shall take the following actions prior to the beginning of the billing period in which the implementation takes effect:

(A) submit written notice to the executive director, which must include a copy of the notice sent to the customers, proof that the documented energy costs have changed by the stated amount; and

(B) mail either separately or accompanying customer billings, or hand deliver notice to the utility's affected customers. Notice must contain the effective date of change and the increase or decrease in charges to the utility for documented energy costs. The notice must include the following language: "This tariff change is being implemented in accordance with the utility's approved energy cost adjustment clause to recognize (increases) (decreases) in the documented energy costs. The cost of these charges to customers will not exceed the (increase) (decrease) in documented energy costs."

(6) The executive director may suspend the adoption or implementation of an energy cost adjustment clause if the utility has failed to properly complete the application or has failed to comply with the notice requirements or proof of notice requirements. If the utility cannot clearly demonstrate how the clause is calculated, the increase or decrease in documented energy costs or how the increase or decrease in documented energy costs will affect rates, the executive director may suspend the adoption or implementation of the clause until the utility provides additional documentation requested by the executive director. If the executive director suspends the adoption or implementation of the clause, the adoption or implementation will be effective on the date specified by the executive director.

(7) Energy cost adjustment clauses may not apply to contracts or transactions between affiliated interests.

(8) A proceeding under this subsection is not a rate case, and TWC, §13.187 does not apply.

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803189

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: February 1, 2008

For further information, please call: (512) 239-2548

SUBCHAPTER C. RATE-MAKING APPEALS

30 TAC §291.41

STATUTORY AUTHORITY

The adopted amendment implements TWC, §49.2122.

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803190

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: February 1, 2008

For further information, please call: (512) 239-2548

SUBCHAPTER E. CUSTOMER SERVICE AND PROTECTION

30 TAC §291.87, §291.88

STATUTORY AUTHORITY

The amendments are adopted under Texas Water Code (TWC), §5.102, which provides the commission the general powers to carry out its duties under the TWC, and §5.103, which provides the commission with the authority to adopt any rules necessary to carry out its powers and duties under the provisions of the TWC and other laws of this state. In addition, TWC, §13.041 states that the commission may regulate and supervise the business of every water and sewer utility within its jurisdiction and may do all things, whether specifically designated in TWC, Chapter 13 or implied in TWC, Chapter 13, necessary and convenient to the exercise of this power and jurisdiction. Further, TWC, §13.041 also states that the commission shall adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules governing practice and procedure before the commission.

The adopted amendments implement TWC, §13.147 and Local Government Code, §402.911.

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803191

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: February 1, 2008

For further information, please call: (512) 239-2548

SUBCHAPTER G. CERTIFICATES OF CONVENIENCE AND NECESSITY

30 TAC §§291.101, 291.105, 291.113

STATUTORY AUTHORITY

The adopted amendments implement TWC, §13.2451 and Local Government Code, §402.017.

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803192

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: February 1, 2008

For further information, please call: (512) 239-2548

CHAPTER 305. CONSOLIDATED PERMITS

SUBCHAPTER D. AMENDMENTS, RENEWALS, TRANSFERS, CORRECTIONS, REVOCATION, AND SUSPENSION OF PERMITS

30 TAC §305.72

The Texas Commission on Environmental Quality (commission or agency) adopts an amendment to §305.72 without changes to the proposed text as published in the March 14, 2008, issue of the Texas Register (33 TexReg 2230) and will not be republished.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULE

This rulemaking amends §305.72 in order to implement House Bill (HB) 2654, 80th Legislature, 2007, and its amendments to Texas Water Code (TWC), §27.021. HB 2654 removed the requirement for a contested case hearing under the provisions of TWC, §27.018 for Class I injection wells that dispose of nonhazardous brine produced by a desalination operation or of nonhazardous drinking water treatment residuals. HB 2654 does not exclude Class I injection wells for the disposal of any other waste streams from the requirement to provide an opportunity for a contested case hearing.

The purpose of this rulemaking is to subject permit amendments to the opportunity for a contested case hearing when the amendment is to a Class I injection well permit authorizing only disposal of nonhazardous brine produced by a desalination operation or of nonhazardous drinking water treatment residuals and the amendment requests authority to dispose of other types of wastes. The rulemaking specifies that a permit for a Class I injection well used only for the disposal of nonhazardous brine produced by a desalination operation or of nonhazardous drinking water treatment residuals may not be administratively modified, under §305.72(b)(4), in order to add waste streams disposed in the Class I injection well other than nonhazardous brine produced by a desalination operation or nonhazardous drinking water treatment residuals. A permit change to dispose of other types of wastes will require a major amendment under §305.62(c)(1)(A), which provides an opportunity for a contested case hearing. This rulemaking ensures that the hearing requirements of TWC, §27.018 for conventional Class I injection well permits will be retained after a permit is issued under the provisions of HB 2654.

Amendments to 30 TAC Chapters 50, 55 and 331 are also adopted in this issue of the Texas Register to implement HB 2654 and to incorporate other changes to facilitate disposal of nonhazardous desalination brine and nonhazardous drinking water treatment residuals.

SECTION DISCUSSION

§305.72. Underground Injection Control (UIC) Permit Modifications at the Request of the Permittee.

This rulemaking amends §305.72(b)(4) to specify that the kind of permit modification allowed to a conventional Class I injection well permit by this paragraph shall not include modifying a Class I injection well permit used only for the disposal of nonhazardous brine produced by a desalination operation or of nonhazardous drinking water treatment residuals to a conventional Class I injection well permit. This amendment effectively precludes a permit holder for this type of Class I injection well (used only for the disposal of nonhazardous brine produced by a desalination operation or of nonhazardous drinking water treatment residuals) from adding other types of waste streams without providing the opportunity for a contested case hearing.

The commission adopts an administrative change in §305.72(b)(4) to correct the spelling of "judgement" to "judgment."

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the rulemaking does not meet the definition of a "major environmental rule" as defined by that statute. A "major environmental rule" means a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. This rulemaking does not meet the statutory definition of a "major environmental rule" because it is not intended to reduce risks to human health from environmental exposure, nor does it adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state.

The commission invited public comment regarding the regulatory impact analysis determination during the public comment period. No comments were received.

TAKINGS IMPACT ASSESSMENT

The commission evaluated the amendment to Chapter 305 and performed a preliminary assessment of whether the amendment would constitute a taking under Texas Government Code, Chapter 2007. The primary purposes of the amendment are to implement HB 2654 and correct a misspelling identified during review of the rule language. The amendment would substantially advance these purposes by amending §305.72 to ensure that additional waste streams shall not be added as minor modifications to a Class I injection well permitted in such a manner that no opportunity exists for a contested case hearing, and by changing the spelling of "judgement" to "judgment."

Promulgation and enforcement of the amendment would constitute neither a statutory nor a constitutional taking of private real property. There are no burdens imposed on private real property under this rule because the amendment neither relates to, nor has any impact on the use or enjoyment of private real property, and there would be no reduction in property value as a result of this rule. Therefore, the adopted rule would not constitute a taking under Texas Government Code, Chapter 2007.

The commission has no reasonable alternative that could accomplish the specific purpose of ensuring that additional waste streams are not added as minor modifications to a Class I injection well permitted in such a manner that no opportunity exists for a contested case hearing. Without the amendment, a Class I injection well for disposal of only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals could be permitted under an individual permit or other authorization not requiring a contested case hearing, then add another waste stream as a minor modification without the public ever having an opportunity to contest the additional waste stream through the contested case hearing process.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

PUBLIC COMMENT

The proposal was published in the March 14, 2008, issue of the Texas Register (33 TexReg 2230). The commission held a public hearing in Austin on April 8, 2008. The comment period closed on April 14, 2008. No comments pertaining to the proposed amendment to Chapter 305 were received.

STATUTORY AUTHORITY

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803199

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: March 14, 2008

For further information, please call: (512) 239-0177

CHAPTER 331. UNDERGROUND INJECTION CONTROL

The Texas Commission on Environmental Quality (TCEQ, agency or commission) adopts amendments to §§331.2, 331.7, 331.17, 331.42, 331.45, 331.46, 331.62 - 331.66, and 331.121 and new §§331.201 - 331.206 without changes to the proposed text as published in the March 14, 2008, issue of the Texas Register (33 TexReg 2236) and will not be republished.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED RULES

This rulemaking supports the commission's role in promoting desalination projects and is intended to facilitate permitting of Class I wells to be used for disposal of nonhazardous desalination concentrate and other nonhazardous water treatment residuals from public water systems and to reduce operating costs for these wells. This project is in response to initiatives by the Governor's Office and the Texas Water Development Board to promote desalination technology in Texas and to address the need for public water supply systems to dispose of drinking water treatment residuals.

This rulemaking implements House Bill (HB) 2654, 80th Legislature, 2007 and amends technical standards to expand disposal options for the special case of nonhazardous brine from a desalination operation (desalination concentrate) and nonhazardous drinking water treatment residuals. HB 2654 allows the commission to issue a general permit to authorize the use of a Class I injection well to dispose of nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. A single statewide general permit covering all qualifying Class I injection wells that meet the permit's performance standards for injection of nonhazardous desalination concentrate and other nonhazardous drinking water treatment residuals will expedite the processing of authorizations for wells used for these purposes. The general permit will require safeguards to protect groundwater and surface water.

The use of a general permit to authorize Class I wells for disposal of desalination concentrate and other water treatment residuals from public water systems will reduce commission staff time required to perform detailed administrative and technical reviews of individual permit applications. For projects that do not meet the criteria for the general permit, the commission will be able to conduct streamlined reviews of applications for Class I nonhazardous wells for the disposal of desalination concentrate and other water treatment residuals from public water systems. Under current rules, injection of nonhazardous desalination concentrate and other nonhazardous water treatment residuals from public water systems is limited to individually-permitted Class I wells, Class II wells dually permitted as Class I wells, or under special conditions, rule-authorized Class V wells. Other options for disposal of nonhazardous desalination brine and nonhazardous drinking water treatment residuals include evaporation ponds and surface discharge under a Texas Pollutant Discharge Elimination System permit.

Entities disposing of desalination concentrate and other water treatment residuals from public water systems in Class I nonhazardous waste disposal wells and Class I/Class II dually permitted wells will be the primary beneficiaries of this rulemaking. This rulemaking will benefit the public by facilitating the production of public water supplies via desalination. Public water systems that must treat water to meet standards for constituent levels and dispose of the residuals will also benefit. Residents and property owners adjacent to disposal sites may be affected by this rule. This rulemaking may require submittal of an Underground Injection Control (UIC) Program revision to the United States Environmental Protection Agency in order to explain new processes under the adopted rules and future general permit.

HB 2654 also authorizes the use of nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals as an injection fluid for enhanced recovery purposes without first obtaining a permit from the commission (consistent with federal regulations). Prior to this legislation, enhanced oil recovery wells needed permits from both the commission and the Railroad Commission of Texas (Class II wells).

In addition to implementing HB 2654, this rulemaking amends Chapter 331 to create a set of criteria closely analogous to federal Class I nonhazardous injection well regulations for the special case of wells injecting nonhazardous desalination concentrate and other nonhazardous water treatment residuals from public water systems. Currently in Texas the technical standards for Class I hazardous and nonhazardous wells are substantially the same; however, federal Class I standards for nonhazardous waste wells are less stringent. In conjunction with HB 2654, the revised technical standards will facilitate the use of injection wells for these purposes while meeting federal standards.

To implement HB 2654, this rulemaking amends §§331.2, 331.7 and 331.17 and adds new Subchapter L, General Permit Authorizing Use of a Class I Injection Well to Inject Nonhazardous Desalination Concentrate or Nonhazardous Drinking Water Treatment Residuals. To create a set of criteria closely analogous to federal Class I nonhazardous injection well regulations for the special case of wells injecting nonhazardous desalination concentrate and other nonhazardous water treatment residuals from public water systems, §§331.42, 331.45, 331.46, 331.62 - 331.66 and 331.121 are amended. To allow an injection well, authorized by the Railroad Commission of Texas to use nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals as an injection fluid for enhanced recovery purposes without a permit from the commission, §331.7 is amended. The amendment to §331.7 also stipulates that, in this context, radioactive material is subject to the applicable requirements of 30 TAC Chapter 336.

Amendments to 30 TAC Chapters 50, 55, and 305 are also adopted in this issue of the Texas Register to implement HB 2654.

SECTION BY SECTION DISCUSSION

The commission amends §331.2, Definitions, to add the following eight definitions. These definitions are necessary to characterize new terminology used in HB 2654 that does not currently appear in connection with Class I wells in Chapter 331. Desalination concentrate, is added as new paragraph (30). Drinking water treatment residuals, is added as new paragraph (35). Enhanced oil recovery project (EOR), is added as new paragraph (37). General permit, is added as new paragraph (44). Individual permit, is added as new paragraph (49). Notice of change (NOC), and Notice of intent (NOI), are added as new paragraphs (71) and (72), respectively. Public water system, is added as new paragraph (84). The commission is renumbering the definitions in §331.2 as a result of the added definitions. Current paragraph (34) is renumbered as paragraph (36); current paragraphs (35) - (40) are renumbered as paragraphs (38) - (43), respectively; current paragraphs (41) - (44) are renumbered as paragraphs (45) - (48), respectively; current paragraphs (45) - (65) are renumbered as paragraphs (50) - (70), respectively; current paragraphs (66) - (76) are renumbered as paragraphs (73) - (83), respectively; current paragraphs (77) - (104) are renumbered as paragraphs (85) - (112), respectively.

Section 331.7, Permit Required, is amended as follows: subsection (a) is amended to include subsections (e) and (f) as exceptions to the requirement that all injection wells and activities must be authorized by an individual permit. The word "permit" is changed to "individual permit" to clarify that §331.7(a) pertains to an individual permit versus the general permit. Subsection (d) is revised to exclude pre-injection units for Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals from the option to be authorized by registration. HB 2654 does not explicitly mention pre-injection units, and the commission plans to address pre-injection units in the general permit. Consistent with federal requirements, no special authorization for pre-injection units associated with these wells will be required. Pre-injection units may also be authorized under an individual permit, such as a Class I UIC permit, or under 30 TAC Chapter 290. Chapter 290 addresses the construction of facilities associated with water treatment. Adopted subsection (e) is added to authorize the commission to issue a general permit for the use of a Class I injection well to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. If the commission determines that the general permit will not protect ground and surface fresh water from pollution, the commission may require that an injection well and the injection activities be regulated under an individual permit. Adopted subsection (f) is added to stipulate that an injection well authorized by the Railroad Commission of Texas to use nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals as an injection fluid for enhanced recovery purposes does not require a permit from the commission.

Section 331.17(a), Pre-injection Units Registration, is amended to exclude pre-injection units for Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals from the option to be authorized by registration. HB 2654 does not explicitly mention pre-injection units, and the commission plans to address pre-injection units in the general permit. Consistent with federal requirements, no special authorization for pre-injection units will be required for units associated with these wells. This change is made in conjunction with the amendment of §331.7(d).

The amendment to §331.42, Area of Review, substantively affects subsections (a) - (c). The purpose of these changes is to specify standards for the extent of the area of review that are substantially equivalent to federal standards for Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals.

In §331.42(a), the contents of existing §331.42(b)(1) - (4) are incorporated as new paragraphs (1) and (3) - (5). This reformatting groups the area of review requirements for different types and classes of wells under existing §331.42(a). Existing §331.42(b) is relabeled as §331.42(a)(1) and amended to exclude wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals from the area of review requirement for other types of Class I wells. Adopted §331.42(a)(2) is added to specify that the area of review for wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals is a radius of 1/4 mile from the proposed or existing wellbore, or the area within the cone of influence, whichever is greater. This new paragraph further stipulates that the radius of an area of review determined by the mathematical model stated in §331.42(b) is permissible even if it is less than 1/4 mile. The contents of existing §331.42(b)(2) - (4) are incorporated under §331.42(a) as paragraphs (3) - (5). Existing subsection (c), which contains a mathematical equation, is relabeled as subsection (b), and editorial changes are made at two places in the equation to replace an erroneous paragraph symbol (¶) with the Greek letter pi (&pgr;). Existing subsection (d) is relabeled as subsection (c) and amended to exclude wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals from the requirement for a minimum radius of 2-1/2 miles for the area of review. Existing subsection (e) is relabeled as subsection (d).

The commission amends §331.45(1) to exclude wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals from certain standards for construction and completion of the well that exceed federal standards for Class I nonhazardous waste wells. New language has been added to §331.45(2) to stipulate standards substantially equivalent to federal standards for construction and completion of Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Paragraphs (2) and (3) have been renumbered as paragraphs (3) and (4).

Section 331.46, Closure Standards, is amended to add new subsection (a), stating which of current subsections (a) - (p) of §331.46 apply to Class I wells, salt cavern disposal wells, and Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. The purpose of these changes is to specify closure standards that are substantially equivalent to federal standards for Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Subsection (a) has been relabeled as subsection (b), and subsequent subsections (b) - (p) have been relabeled as subsections (c) - (q), respectively. In subsection (c), the hyphenated word "non-hazardous" is corrected to "nonhazardous."

The commission amends §331.62, Construction Standards, by adding subsection (a) to state that those construction standards for Class I nonhazardous waste wells which exceed federal standards for Class I wells do not apply to Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Adopted subsection (b) is added to stipulate construction standards substantially equivalent to federal standards for Class I nonhazardous waste wells that are authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals.

Section 331.63, Operating Requirements, is amended to add subsection (a), stating which of current subsections (a) - (l) of §331.63 apply to Class I wells in general and which apply to the special case of Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. The purpose of these changes is to specify operating requirements that are substantially equivalent to federal standards for Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Subsection (a) has been relabeled as subsection (b), and subsequent subsections (b) - (l) have been relabeled as subsection (c) - (m), respectively. In subsection (j), the hyphenated word "non-hazardous" is corrected to "nonhazardous" consistent with editorial standards. Subsection (n) is added to stipulate requirements consistent with federal standards for the fluid and pressure in the annulus between the tubing and long string casing.

Section 331.64, Monitoring and Testing Requirements, is amended to add subsection (a) stating that current subsections (a) - (i) of §331.64 apply to all Class I wells except Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Subsection (k) is added to specify monitoring and testing requirements that are substantially equivalent to federal standards for Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Subsection (a) has been relabeled as subsection (b), and subsequent subsections (b) - (i) have been relabeled as subsections (c) - (j), respectively.

Section 331.65, Reporting Requirements, is amended to add subsection (a), stating that current subsections (a) - (c) of §331.64 apply to all Class I wells except Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Subsection (e) is added to specify reporting requirements that are substantially equivalent to federal standards for Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Subsection (a) has been relabeled as subsection (b), and subsequent subsections (b) and (c) have been relabeled as subsections (c) and (d), respectively.

Section 331.66, Additional Requirements and Conditions, is amended to state that this section applies to all Class I wells except Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. The requirements in §331.66 exceed federal requirements for Class I nonhazardous waste wells and will not apply to Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals.

Section 331.121(a)(2), Class I Wells, is amended to state that §331.121(a)(2)(A) - (R) apply to all Class I wells except Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Adopted §331.121(a)(3) is added to stipulate the information, consistent with federal requirements for Class I nonhazardous waste wells, to be considered by the commission before issuing a Class I permit for a well authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Subsection (c) is amended to state that all paragraphs apply to all Class I wells except wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Subsection (c) is also amended to specify that, consistent with federal requirements for Class I nonhazardous waste wells, only §331.121(c)(1) applies to Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. This change eliminates more stringent siting criteria that are not consistent with federal requirements for nonhazardous waste wells.

Adopted §331.201 is titled, Purpose and Applicability. Subsection (a) authorizes the commission to issue a permit to dispose of nonhazardous brine produced by a desalination operation or of nonhazardous drinking water treatment residuals in a Class I well if the facility meets statutory and regulatory requirements. Subsection (b) states that the commission may issue a general permit authorizing the use of a Class I well to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Subsection (c) stipulates that authorization for the use of an injection well under a general permit does not confer a vested right. Subsection (d) refers to the requirements of Chapter 336 for the use or disposal of radioactive material under new Subchapter L of Chapter 331.

Adopted §331.202 is titled, Public Notice, Public Meetings, and Public Comment. Subsection (a) states that the requirements of this section apply to processing a new general permit and amendment, renewal, revocation or cancellation of a general permit. Subsection (b) includes requirements for publishing notice of a draft general permit. Subsection (c) stipulates the contents of a public notice of a draft general permit. Subsection (d) includes requirements for public meetings for the draft general permit. Subsection (e) specifies requirements for the executive director's response to public comments on the general permit.

Adopted §331.203 is entitled, Authorizations and Notices of Intent. Subsection (a) requires submission of a Notice of Intent for a person to obtain authorization to use a Class I injection well to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals. Subsection (b) stipulates that the content of the Notice of Intent shall be specified in the general permit. Subsection (c) states requirements for denial of an authorization or Notice of Intent. Subsection (d) covers suspension of authorization and Notices of Intent under a general permit. The executive director is required to provide written notice to a permittee if he intends to suspend the permittee's authority to inject waste under the general permit. Subsection (e) specifies use of a permittee's compliance history in denying or suspending a permittee's authority to inject waste under the general permit.

Adopted §331.204 is entitled, Permit Duration, Amendment and Renewal. Subsection (a) stipulates a ten-year term for the general permit. Subsection (b) specifies conditions for renewal of the general permit. Subsection (c) states that, upon issuance of a renewed or amended general permit, owners or operators covered under the general permit shall submit a Notice of Intent in accordance with the requirements of the new permit. Subsection (d) requires permittees authorized under the general permit to submit an application for an individual permit before the general permit expires if the commission has not proposed to renew the general permit at least 90 days before its expiration date. Subsection (e) states that, through renewal or amendment, the commission may add or delete requirements or limitations to the general permit. Existing permittees covered by the general permit are to be provided a reasonable time to make changes necessary to comply with substantive additional requirements. Subsection (f) states that the commission must find that the general permit is consistent with the goals and policies of the Texas Coastal Management Plan.

Adopted §331.205 is titled, Fees for Notice of Intent and Notice of Change. New subsections (a) and (b) specify that a person must submit a $100 fee along with each Notice of Intent or Notice of Change, respectively, for each disposal well.

Adopted §331.206, titled Annual Fee Assessments, stipulates that annual facility and waste management fees must be paid by a person authorized by the general permit.

FINAL REGULATORY IMPACT ANALYSIS DETERMINATION

The intent of the rulemaking is to implement HB 2654, passed during the 80th Legislature, 2007, and to revise technical standards for Class I nonhazardous wells injecting desalination concentrate and other water treatment residuals from public water systems so that the state's rules are no more stringent than federal Class I nonhazardous injection well regulations. The rulemaking substantially advances this purpose by: (1) amending §§331.2, 331.7, and 331.17 and adding new Subchapter L to provide for a new general permit authorizing the use of Class I injection wells to inject nonhazardous desalination concentrate or other nonhazardous drinking water treatment residuals, to implement HB 2654; (2) amending §§331.42, 331.45, 331.46, 331.62 - 331.66 and 331.121 to create a set of criteria no more stringent than the federal regulations regarding Class I nonhazardous injection wells; and (3) amending §331.7 to provide that a permit is not required from the commission for an injection well authorized by the Railroad Commission of Texas to use nonhazardous desalination concentrate or drinking water treatment residuals for enhanced recovery purposes.

This rulemaking does not meet the statutory definition of a "major environmental rule" because the rules would not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or public health and safety of the state or a sector of the state. It is not anticipated that the cost of complying with the rules will be significant with respect to the economy; therefore, the rules will not adversely affect in a material way the economy, a sector of the economy, competition, or jobs.

Additionally, this rulemaking does not meet any of the four applicability requirements listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: (1) exceed a standard set by federal law, unless the rule is specifically required by state law; (2) exceed an express requirement of state law, unless the rule is specifically required by federal law; (3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or (4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability requirements because this rulemaking does not exceed any standard set by federal law but rather amends the rules so that they are no more stringent or restrictive than the federal regulations. The rules do not exceed the requirements of state law under the TWC, Chapter 27. Further, the rules do not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement any state and federal program. Finally, the rulemaking is not adopted solely under the general powers of the agency, but rather specifically under TWC, §27.023(m), which allows the commission to adopt rules to implement the general permit authorizing use of a Class I injection well to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals and TWC, §27.109, which authorizes the commission to adopt rules to implement TWC, Chapter 27, as well as the other general powers of the agency.

The commission invited public comment regarding the regulatory impact analysis determination during the public comment period. No comments were received.

TAKINGS IMPACT ASSESSMENT

The commission evaluated these rules and performed a preliminary assessment of whether the rules would constitute a taking under Texas Government Code, Chapter 2007. The primary purposes of the adopted rules are to implement HB 2654 and to revise the technical standards for Class I wells injecting nonhazardous desalination concentrate or drinking water treatment residuals to be no more stringent than the federal regulations. The adopted rules would substantially advance these purposes by amending various sections of Chapter 331 to conform technical standards for Class I wells injecting nonhazardous desalination concentrate or drinking water treatment residuals to the federal standards and by amending various sections of Chapter 331 and adding Subchapter L to implement the general permit provided by HB 2654.

Promulgation and enforcement of the adopted rules would constitute neither a statutory nor a constitutional taking of private real property. There are no burdens imposed on private real property under this rulemaking because the adopted rules neither relate to, nor have any impact on the use or enjoyment of private real property, and there would be no reduction in property value as a result of this rulemaking. Therefore, the adopted rules would not constitute a taking under Texas Government Code, Chapter 2007.

The commission has no reasonable alternative to rule adoption that could accomplish the specific purpose of implementing HB 2654 and revising technical standards to conform to federal standards.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

PUBLIC COMMENT

The proposal was published in the March 14, 2008, issue of the Texas Register (33 TexReg 2236). The commission held a public hearing in Austin on April 8, 2008. The comment period closed on April 14, 2008. Written comments expressing general support for the project were received from San Antonio Water System (SAWS) and the Water Environment Association of Texas (WEAT).

RESPONSE TO COMMENTS

SAWS requested that the final rules define or reference within state or federal code, the maximum contaminant levels (MCL's) and chemical constituents that allow an entity to qualify under the general permit for the nonhazardous desalination concentrate outlined in HB 2654.

The commission did not make any changes to the rules in response to this comment. As stated in TWC, §27.023, the general permit applies to Class I injection wells injecting nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals. In order for waste, including brine from a desalination operation, to be classified as nonhazardous, the brine must not meet any of the criteria for hazardous waste as specified in 40 Code of Federal Regulations (CFR) Part 261 (relating to Identification and Listing of Hazardous Waste) and 30 TAC Chapter 335 Subchapter R. If the waste is not classified as hazardous according to state and federal rules, it is considered nonhazardous. A desalination operation is defined in adopted §331.2(31) as "a process which produces water of usable quality by desalination." These are the criteria for characterization of nonhazardous desalination brine that would qualify for disposal under the general permit.

SAWS encouraged that no authorization be required for pre-injection units. However, if it is concluded that authorization under the UIC program is appropriate, SAWS asked that it be included within the general permit without additional registration and technical review. SAWS requested identification of any permitting requirements for pipelines conveying the nonhazardous desalination concentrate from the treatment plant facilities to the injection facilities.

The commission did not make any changes to the rules in response to these comments. Authorization of pre-injection units is addressed in adopted §331.7(d) which states that pre-injection units for Class I wells authorized to inject only nonhazardous desalination concentrate or nonhazardous drinking water treatment residuals are not subject to authorization by registration but are subject to authorization by an individual permit or under the general permit issued under Subchapter L.

Pipelines that convey waste to the injection well are pre-injection units as defined in §331.2(80). Standards for pre-injection units authorized by an individual permit are covered in §331.5(c) and §331.121(a)(2)(R). When the UIC general permit is implemented, it is anticipated that these same standards will apply to pre-injection units authorized under the general permit.

SAWS asked whether there is an anticipated date when an application can be filed under the new general permit structure. SAWS requested that the rules specify the TCEQ goals for the review period under the general permit. SAWS further commented that the information required in the Notice of Intent for the general permit should be identified.

The commission did not make any changes to the rules in response to these comments. The comments relate to implementation of the general permit, and the implementation process will be addressed after these adopted rules become effective. The issuance date of the general permit and TCEQ goals for the review period will be available after the general permit has been approved by the commission. The schedule for implementation is not known but will proceed as soon as possible. The implementation process for the general permit will include a public comment period, and SAWS may resubmit these comments for consideration as part of that process.

Regarding identification of information required in the Notice of Intent (NOI) for the general permit, adopted §331.203(b) provides that the general permit shall describe the content of the NOI. The specific content required for the NOI will be identified during the general permit implementation process, and there will be an opportunity to comment on the notice requirements.

SAWS commented that the general permit should cover a well field comprised of multiple injection wells and that, if authorization under the general permit is denied, the commission's executive director should specify the reasons for denial. SAWS also stated that criteria for approval under the general permit should be no more stringent than the requirements of federal rules.

The commission did not make any changes to the rules in response to these comments. The permitting of multiple injection wells at a facility is consistent with current permitting practice for Class I wells and will be accommodated under the general permit.

With respect to denial of authorization under the general permit, adopted §331.203(c)(1) states that the executive director shall provide written notice to a facility if the executive director denies the facility's authorization to inject waste under a general permit, including a brief statement of the basis for this decision.

Regarding the consistency of criteria for approval under the general permit with federal rules, adopted §§331.42, 331.45, 331.46, 331.62 - 331.66 and 331.121 create a set of criteria closely analogous to federal Class I nonhazardous injection well regulations for the special case of wells injecting nonhazardous desalination concentrate and other nonhazardous water treatment residuals from public water systems.

SAWS requested definition of the procedures that will allow permitting, design, and construction of Class I injection wells for nonhazardous desalination concentrate under design-build as defined under HB 1886, 80th Legislature, 2007.

The commission did not make any changes to the rules in response to this comment. This comment refers to revisions to Chapter 293, relating to Water Districts, which are currently under development in TCEQ Rule Project Number 2007-047-293-PR, Docket Number 2007-0996-RUL. If adopted, the rule package would implement HB 1886, enabling water districts to use design-build procedures, a procurement method, for certain civil works. Desalination projects are specifically listed as eligible for this procurement method.

It may become necessary for the TCEQ to ensure that requirements for obtaining and operating under the general permit do not conflict with certain portions of the design-build process related to phased project planning. These adopted rules authorize the issuance of a general permit, but do not specify requirements to obtain or operate under such a permit; therefore, SAWs' comment is outside the scope of this rulemaking. The TCEQ encourages the commenter to re-submit this concern during the development of the general permit to ensure its consideration at that time.

SAWS commented that the general permit should specify a mechanism for transitioning a pending conventional Class I permit application to processing under the new general permit.

The commission did not make any changes to the rules in response to this comment. After the general permit has been issued, we anticipate that pending Class I permit applications for disposal of only desalination concentrate or drinking water treatment residuals may be authorized under the general permit by submittal of a Notice of Intent for coverage under the general permit and withdrawal of the conventional Class I injection well application(s).

SAWS commented that the adoption of revised rules is urgent and should remain a critical focus of TCEQ.

The commission did not make any changes to the rules in response to this comment. The commission notes that this rulemaking has been processed under an expedited schedule that will result in timely implementation of HB 2654.

SUBCHAPTER A. GENERAL PROVISIONS

30 TAC §§331.2, 331.7, 331.17

STATUTORY AUTHORITY

The amendments are adopted under Texas Water Code (TWC), §5.103, which provides the commission with the authority to adopt any rules necessary to carry out its powers and duties under this code and other laws of this state and to adopt rules repealing any statement of general applicability that interprets law or policy; §5.105, which authorizes the commission to establish and approve all general policy of the commission by rule; §27.019, which requires the commission to adopt rules reasonably required for the regulation of injection wells; and §27.023, which allows the commission to adopt rules as necessary to implement and administer a general permit authorizing the use of Class I injection wells to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals.

The amendments implement TWC, §27.023, relating to General Permit Authorizing Use of Class I Injection Wells to Inject Nonhazardous Brine from Desalination Operations or Nonhazardous Drinking Water Treatment Residuals, and TWC, Chapter 27.

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803200

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: March 14, 2008

For further information, please call: (512) 239-0177

SUBCHAPTER C. GENERAL STANDARDS AND METHODS

30 TAC §§331.42, 331.45, 331.46

STATUTORY AUTHORITY

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803201

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: March 14, 2008

For further information, please call: (512) 239-0177

SUBCHAPTER D. STANDARDS FOR CLASS I WELLS OTHER THAN SALT CAVERN SOLID WASTE DISPOSAL WELLS

30 TAC §§331.62 - 331.66

STATUTORY AUTHORITY

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803202

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: March 14, 2008

For further information, please call: (512) 239-0177

SUBCHAPTER G. CONSIDERATION PRIOR TO PERMIT ISSUANCE

30 TAC §331.121

STATUTORY AUTHORITY

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803203

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: March 14, 2008

For further information, please call: (512) 239-0177

SUBCHAPTER L. GENERAL PERMIT AUTHORIZING USE OF A CLASS I INJECTION WELL TO INJECT NONHAZARDOUS DESALINATION CONCENTRATE OR NONHAZARDOUS DRINKING WATER TREATMENT RESIDUALS

30 TAC §§331.201 - 331.206

STATUTORY AUTHORITY

The new sections are adopted under Texas Water Code (TWC), §5.103, which provides the commission with the authority to adopt any rules necessary to carry out its powers and duties under this code and other laws of this state and to adopt rules repealing any statement of general applicability that interprets law or policy; §5.105, which authorizes the commission to establish and approve all general policy of the commission by rule; §27.019, which requires the commission to adopt rules reasonably required for the regulation of injection wells; and §27.023, which allows the commission to adopt rules as necessary to implement and administer a general permit authorizing the use of Class I injection wells to inject nonhazardous brine from desalination operations or nonhazardous drinking water treatment residuals.

The adopted new sections implement TWC, §27.023, relating to General Permit Authorizing Use of Class I Injection Wells to Inject Nonhazardous Brine from Desalination Operations or Nonhazardous Drinking Water Treatment Residuals, and TWC, Chapter 27.

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.

Filed with the Office of the Secretary of State on June 20, 2008.

TRD-200803204

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Effective date: July 10, 2008

Proposal publication date: March 14, 2008

For further information, please call: (512) 239-0177