Proposed Sections
Before an agency may permanently adopt a new or amended section, or repeal an 
existing section, a proposal detailing the action must be published in the Texas 
Register at least 30 days before any action may be taken. The 30-day time period 
gives interested persons an opportunity to review and make oral or written 
comments on the section. Also, in the case of substantive sections, a public 
hearing must be granted if requested by at least 25 persons, a governmental 
subdivision or agency, or an association having at least 25 members.
Symbology in proposed amendments. New language added to an existing section is 
indicated by the use of bold text. [Brackets] indicate deletion of existing 
material within a section.
TITLE 22. EXAMINING BOARDS
Part XV. Texas State Board of Pharmacy
Chapter 281. General Provisions
22 TAC sec.281.24, sec.281.25
The Texas State Board of Pharmacy proposes amendments to  s281.24 and sec.281.25 
concerning grounds for discipline for a pharmacist license and grounds for 
discipline for a pharmacy license.
The amendments if adopted will: bring TSBP's rules in line with the language 
used in the Federal Prescription Drug Marketing Act of 1987; and prohibit a 
pharmacy from the sale, purchase, trade, or possession of prescription drug 
samples, unless the pharmacy is owned by a charitable organization; is part of a 
health care entity which primarily provides health care services to indigent or 
low income patients; and dispenses or provides the samples to patients at no 
charge.
The amendments are consistent with the intent of Prescription Drug Marketing Act 
to prevent prescription drug samples from entering the "diversion market" while 
allowing the provision of drug samples to indigent or low income patients by 
pharmacies of health care entities owned by charitable organizations.
Fred S. Brinkley, Jr., R.Ph., M.B.A., executive director/secretary has 
determined that for the first five-year period the proposed section will be in 
effect there will be no fiscal implications for local or state government as a 
result of enforcing or administering the section.
Mr. Brinkley also has determined that for each year of the first five years the 
section as proposed is in effect the public benefit anticipated as a result of 
enforcing the section as proposed will be the protection of the health of the 
citizens of the state of Texas through control of sample prescription drugs in 
compliance with the Federal Prescription Marketing Act of 1989. There will be no 
effect on small businesses. There will be no economic cost to persons who are 
required to comply with the section as proposed.
Comments on the proposal may be submitted to Fred S. Brinkley, Jr., R.Ph., M. 
B.A., Executive Director/Secretary, Texas State Board of Pharmacy, 8505 Cross 
Park Drive, Suite 110, Austin, Texas, 78754-4594.
The amendments are proposed under the Texas Pharmacy Act (Texas Civil Statutes, 
Article 4542a-1) sec.16 and sec.26 which provide the Texas State Board of 
Pharmacy the authority to adopt rules for the proper administration and 
enforcement of the Act and the authority to define acts which constitute 
unprofessional conduct.
sec.281.24. Grounds for Discipline for a Pharmacist License.
(a)  For the purposes of the Act, sec.26(a), "unprofessional conduct" shall 
include, but not be limited to:
(1)-(26) (No change.)
(27) <nl>the sale, purchase, or trade or the offer to sell, purchase, or 
trade:<ol> [buying, selling, trading, bartering, or exchanging:]
(A)  prescription drug samples; provided however, this <nl>subparagraph<ol> 
[subdivision] does not apply to:
(i) prescription drugs provided by a manufacturer as starter prescriptions or as 
replacement for such manufacturer's out-dated drugs;
(ii) prescription drugs provided by a manufacturer in replacement for such 
manufacturer's drugs that were dispensed pursuant to written starter 
prescriptions; or
(iii) prescription drug samples possessed by a pharmacy <nl>of a health care 
entity which provides health care primarily to indigent or low income patients 
at no or reduced cost and if:
<nl>(I) the samples are possessed in compliance with the Prescription Drug 
Marketing Act of 1987;
<nl>(II) the pharmacy is owned by a charitable organization described in the 
Internal Revenue Code of 1954, sec.501(c)(3); and
<nl>(III) the samples are <ol> for dispensing or provision from the pharmacy at 
no charge to patients of such <nl>health care entity.<ol> [pharmacy.]
(B) prescription drugs<nl>:
<nl>(i) <nl>sold for export use only;
<nl>(ii)<nl> purchased by a public or private hospital or other health care 
entity; or
<nl>(iii) <nl> donated or supplied at a reduced price to a charitable 
organization described in the Internal Revenue Code of 1954, sec.501(c)(3);
(C)  <nl>subparagraph (B) of this paragraph does not apply to:
<nl>(i)<nl> the purchase or other acquisition by a hospital or other health care 
entity which is a member of a group purchasing organization or from other 
hospitals or health care entities which are members of such organization;
<nl>(ii)<nl> the sale, purchase, or trade of a drug or an offer to sell, 
purchase, or trade a drug by an organization described in subparagraph (B) (iii) 
of this paragraph to a nonprofit affiliate of the organization to the extent 
otherwise permitted by law;
<nl>(iii)<nl> the sale, purchase or trade of a drug or an offer to sell, 
purchase, or trade a drug among hospitals or other health care entities which 
are under common control;
<nl>(iv)<nl> the sale, purchase, or trade of a drug or an offer to sell, 
purchase, or trade a drug for emergency medical reasons including the transfer 
of a drug between pharmacies to alleviate temporary shortages of the drug 
arising from delays in or interruptions of regular distribution schedules;<ol> 
[pharmaceuticals purchased by hospitals, clinics, or other health care 
facilities, including agencies of state and local governments, for the exclusive 
use of those institutions and not intended for resale, with the following 
exceptions:
[(i) provided however, this subdivision does not apply to the sale of 
prescription drugs otherwise permitted by law to affiliated corporations in 
furtherance of a planned, integrated approach to the delivery of health care 
within a health care corporate structure, and sales by bona fide group 
purchasing arrangement to members; and
[(ii) provided however, nothing here is intended to apply to the incidental 
buying, selling, trading, bartering, or exchanging of prescription drugs in the 
normal course of pharmacy practice for the immediate needs of a patient(s).
[(D) prescription drugs donated or supplied at reduced prices to charitable 
institutions in the United States or abroad for their own institutional use;
<nl>(D)<ol>[(E)]  misbranded prescription drugs; or
<nl>(E)<ol>[(F)] prescription drugs beyond the manufacturer's expiration date; 
or (28) failure to repay a guaranteed student loan, as provided in the Texas 
Education Code, sec.57.491.
(b)-(c) (No change.)
sec.281.25. Grounds for Discipline for a Pharmacy License. For the purposes of 
subdivision (9) of subsection (b) of 26 of the Act, a pharmacy fails to 
establish and maintain effective controls against diversion of prescription 
drugs when:
(1)-(3) (No change.)
(4) the pharmacy <nl>possesses or <ol> engages in <nl>the sale, purchase, or 
trade or the offer to sell, purchase, or trade: <ol>[buying, selling, trading, 
bartering, or exchanging:]
(A) prescription drug samples; provided however, this <nl>subparagraph<ol> 
[subdivision] does not apply to:
(i)  prescription drugs provided by a manufacturer as starter prescriptions or 
as replacement for such manufacturer's out-dated drugs;
(ii)  prescription drugs provided by a manufacturer in replacement for such 
manufacturer's drugs that were dispensed pursuant to written starter 
prescriptions; or
(iii) prescription drug samples possessed by a pharmacy <nl>of a health care 
entity which provides health care primarily to indigent or low income patients 
at no or reduced cost and if:
(I) the samples are possessed in compliance with the Prescription Drug Marketing 
Act of 1987;
(II) the pharmacy is owned by a charitable organization described in the 
Internal Revenue Code of 1954, sec.501(c)(3); and
(III) <nl>the samples are <ol> for dispensing or provision from the pharmacy at 
no charge to patients of such <nl>health care entity.<ol> [pharmacy]
(B)  prescription drugs<nl>:
<nl>(i)<nl> sold for export use only;
<nl>(ii)<nl> purchased by a public or private hospital or other health care 
entity and possessed by a pharmacy other than one in or affiliated with the 
public or private hospital or other health care entity; or
<nl>(iii)<nl> donated or supplied at a reduced price to a charitable 
organization described in  s501(c)(3) of the Internal Revenue Code of 1954 and 
possessed by a pharmacy other than one owned by the charitable organization;
(C) subparagraph (B) of this paragraph does not apply to:
(i)  the purchase or other acquisition by a hospital or other health care entity 
which is a member of a group purchasing organization or from other hospitals or 
health care entities which are members of such organization;
(ii) the sale, purchase, or trade of a drug or an offer to sell, purchase, or 
trade a drug by an organization described in subparagraph (B)(iii) of this 
paragraph to a nonprofit affiliate of the organization to the extent otherwise 
permitted by law;
(iii) the sale, purchase, or trade of a drug or an offer to sell, purchase, or 
trade a drug among hospitals or other health care entities which are under 
common control;
(iv)<nl> the sale, purchase, or trade of a drug or an offer to sell, purchase, 
or trade a drug for emergency medical reasons including the transfer of a drug 
between pharmacies to alleviate temporary shortages of the drug arising from 
delays in or interruptions of regular distribution schedules; <ol> 
[pharmaceuticals purchased by hospitals, clinics, or other health care 
facilities, including agencies of state and local governments, for the exclusive 
use of those institutions and not intended for resale, with the following 
exceptions:
[(i) provided however, this subdivision does not apply to the sale of 
prescription drugs otherwise permitted by law to affiliated corporations in 
furtherance of a planned, integrated approach to the delivery of health care 
within a health care corporate structure, and sales by bona fide group 
purchasing arrangement to members; and
[(ii) provided however, nothing here is intended to apply to the incidental 
buying, selling, trading, bartering, or exchanging of prescription drugs in the 
normal course of pharmacy practice for the immediate needs of a patient(s).]
(D) [prescription drugs donated or supplied at reduced prices to charitable 
institutions in the United States or abroad for their own institutional use;] 
misbranded prescription drugs; or
<nl>(E) <ol>[(F)] prescription drugs beyond the manufacturer's expiration date 
unless removed from dispensing stock and quarantined.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on January 8, 1992.
TRD-9200241
Fred S. Brinkley, Jr., R.Ph., M.B.A.
Executive Director/Secretary
Texas State Board of Pharmacy
Earliest possible date of adoption: February 14, 1992
For further information, please call: (512) 832-0661
       
TITLE 28. INSURANCE
Part I. Texas Department of Insurance
Chapter 1. General Administration
Subchapter C. Maintenance Taxes
28 TAC sec.1.410
The State Board of Insurance of the Texas Department of Insurance proposes new 
sec.1.410, concerning assessment of maintenance taxes for payment for 1992. The 
section is proposed to provide a method of assessment and record the rates of 
assessment for maintenance taxes for 1992 on the basis of gross premium receipts 
for calendar year 1991 or on some other statutorily designated basis. Section 
1.410 sets rates of assessment and applies those rates to life, accident, and 
health insurance; motor vehicle insurance; casualty and fidelity insurance and 
guaranty and surety bonds; fire and allied lines insurance, including inland 
marine; workers' compensation insurance; title insurance; health maintenance 
organizations; third party administrators; and corporations issuing prepaid 
legal services contracts.
Kenneth J. Ramoin, director of accounting, has determined that for the first 
five-year period the proposed section will be in effect there will be no fiscal 
implications for local government as a result of enforcing or administering the 
proposed new section. The fiscal impact on state government will be income 
estimated at $46,145,730 to the department's fund 036. The anticipated cost to 
small businesses required to comly with this section is the amount each business 
will pay based on the rates provided in the section. There is no difference in 
the rate of assessment between large and small businesses.
Mr. Ramoin also has determined that for each year of the first five years the 
proposed new section will be in effect the public benefit anticipated as a 
result of enforcing the section will be facilitation in the collection of a 
maintenance tax assessments. There is no anticipated economic cost to persons as 
the assessment is imposed on business entities.
Comments may be submitted to Kenneth J. Ramoin, director of accounting, Mail 
Code #108-3A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 
78714-9104.
The new section is proposed under the Texas Insurance Code, Articles 4.17, 5. 
12, 5.24, 5.49, 5.68, 9.46, 21.07-6 sec.21, and 23.08; and the Texas Health 
Maintenance Organization Act, Article 20A.33, which provides authorization for 
the Texas Department of Insurance to assess maintenance taxes for the lines of 
insurance and related activities specified in new sec.1.410.
sec.1.410. Assessment of Maintenance Tax, 1992.
(a) The following rates for maintenance taxes are assessed on gross premiums of 
insurers as delineated in this section for the calendar year 1991 for the lines 
of insurance specified:
(1) for motor vehicle insurance, pursuant to the Texas Insurance Code, Article 
5.12, the rate is .070 of 1.0%;
(2) for casualty and fidelity insurance and guaranty and surety bonds, pursuant 
to the Texas Insurance Code, Article 5.24, the rate is .210 of 1.0%;
(3) for fire insurance and allied lines, including inland marine, pursuant to 
the Texas Insurance Code, Article 5.49, the rate is .574 of 1.0%;
(4) for workers' compensation insurance, pursuant to the Texas Insurance Code, 
Article 5.68, the rate is .217 of 1.0%;
(5) for title insurance, pursuant to the Texas Insurance Code, Article 9. 46, 
the rate is .178 of 1.0%.
(b) The rate for the maintenance tax to be assessed on gross premiums for the 
calendar year 1991 for life, accident, and health insurance, pursuant to the 
Texas Insurance Code, Article 4.17, is .040 of 1.0%.
(c) The following rates for maintenance taxes are assessed for the calendar year 
1991 for the entities specified:
(1) for health maintenance organizations, pursuant to the Texas Health 
Maintenance Organization Act, Article 20A.33, the rate is $.62 per enrollee for 
single service health maintenance organizations and $1.25 per enrollee for 
multi-service health maintenance organizations;
(2) for third party administrators, pursuant to the Texas Insurance Code, 
Article 21.07-6 sec.21, the rate is .800 of 1.0% of the correctly reported gross 
amount of administrative or service fees;
(3) for corporations issuing prepaid legal service contracts, pursuant to the 
Texas Insurance Code, Article 23.08, the rate is 1.0% of correctly reported 
gross revenues.
(d) The taxes assessed under subsections (a), (b), (c)(1), and (c)(3) of this 
section shall be due and payable to the Texas Department of Insurance as 
follows: 50% on March 1, 1992, or on the date upon which the annual statement 
for such insurer is required to be filed during 1992; and 50% on September 15, 
1992. Insurers whose maintenance tax liability for the previous tax year was 
less than $2,000 on each of the lines of insurance specified in the Texas 
Insurance Code, Articles 5.12, 5.24, 5.49, 5.68, 4.17, 9.46, 20A.33, and 23.08 
shall remit 100% of such taxes on March 1, 1992, or on the date upon which the 
annual statement for such insurer is required to be filed during 1992.
(e) Taxes assessed under subsection (c)(2) of this section shall be due and 
payable to the Texas Department of Insurance as follows: 50% on March 1, 1992, 
or the date upon which the annual statement for such insurer is required to be 
filed during 1992; and 50% on September 15, 1992.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on January 6, 1992.
TRD-9200174
Linda K. von Quintus-Dorn
Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 14, 1992
For further information, please call: (512) 463-6327
       
Subchapter D. Maintenance Tax for the Texas Workers' Compensation Commission and 
the Maintenance Tax Surcharge for the Texas Workers' Compensation Insurance 
Fund, 1992
28 TAC sec.1.411
The State Board of Insurance of the Texas Department of Insurance proposes new 
sec.1.411, concerning assessment of a maintenance tax for the Texas Workers' 
Compensation Commision and a maintenance tax surcharge which will be used to 
establish funding for the Texas Workers' Compensation Insurance Fund. The 
section is proposed to provide a method of assessment and record the rate of 
assessment for a maintenance tax surcharge assessed in 1992 on the basis of 
gross premium receipts for calendar year 1991. Section 1.411 sets a rate of 
assessment which applies to workers' compensation insurance companies.
Kenneth J. Ramoin, director of accounting, has determined that for the first 
five-year period the proposed section will be in effect, there will be no fiscal 
implications for local government as a result of enforcing or administering the 
proposed new section. The anticipated cost to small businesses required to 
comply with this section is the amount each business will pay based on the rates 
provided in the section. There is no difference in the rate of assessment 
between large and small businesses. The anticipated fiscal impact on state 
government will be an estimated $34,546,200 which is generated from the Texas 
Workers' Compensation Commission maintenance tax, and an estimated income of 
$73, 986,175, generated from the maintenance tax surcharge, which will be used 
to pay bond debt service for the $300 million in bonds issued by the Texas 
Public Finance Authority on behalf of the Texas Workers' Compensation Insurance 
Fund.
Mr. Ramoin also has determined that for each year of the first five-years the 
proposed new section is in effect, the public benefit anticipated as a result of 
enforcing the section is facilitation in the collection of a maintenance tax 
surcharge assessment for the Texas Workers' Compensation Insurance Fund. There 
is no anticipated economic cost to persons as the assessment is imposed on 
business entities.
Comments may be submitted to Kenneth J. Ramoin, director of accounting, Mail 
Code #108-3A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 
78714-9104.
The new section is proposed under the Texas Insurance Code, Article 5.76-5, 
which establishes the maintenance tax surcharge, Article 5.76-3 which 
establishes the Texas Workers' Compensation Insurance Fund, Texas Civil 
Statutes, Article 8308, sec.2.22 and sec.2.23, which establishes the maintenance 
tax for workers' compensation insurance companies, and the Texas Insurance Code, 
Article 5.68, which establishes a maintenance tax based on premiums for workers' 
compensation coverage.
sec.1.411. Assessment of Maintenance Tax for the Texas Workers' Compensation 
Commission and the Maintenance Tax Surcharge for Texas Workers' Compensation 
Insurance Fund, 1992.
(a) The maintenance tax and the maintenance tax surcharge are assessed against 
each insurance company writing workers' compensation insurance in this state in 
the following manner:
(1) the maintenance tax at the rate of .860% of the correctly reported gross 
workers' compensation insurance premiums for the calendar year 1991 as set by 
the Texas Workers' Compensation Commission;
(2) the maintenance tax surcharge at the rate of 1.140% of the correctly 
reported gross workers' compensation insurance premiums for the calendar year 
1991 to cover debt service for bonds issued on behalf of the Texas Workers' 
Compensation Insurance Fund; and
(3) an additional maintenance tax surcharge at the rate of .702% of the 
correctly reported gross workers' compensation insurance premiums for the 
calendar year 1991 to cover all additional debt service for bonds issued on 
behalf of the Texas Workers' Compensation Insurance Fund.
(b) The maintenance tax and surcharges established under subsection (a) of this 
section are due and payable to the Texas Department of Insurance on April 15, 
1992.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on January 7, 1992.
TRD-9200194
Linda K. von Quintus-Dorn
Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 14, 1992
For further information, please call: (512) 463-6327
       
Subchapter E. Notice of Policyholder Complaint Procedure
28 TAC sec.1.601
The State Board of Insurance of the Texas Department of Insurance proposes an 
amendment to sec.1.601, concerning notice to policyholders of Texas Department 
of Insurance toll free telephone number. The amendment will require a notice be 
given to all policyholders which will advise them of the information available 
on insurance companies, insurance agents, and other services available by 
calling the number. The amendment requires all companies to use the new notice 
by no later than January 31, 1992.
Bill Maschal, acting associate commissioner for consumer services, Texas 
Department of Insurance, has determined that for the first five-year period the 
proposed amendment will be in effect there will not be fiscal implications as a 
result of enforcing or administering the amendment.
Mr. Maschal also has determined that for each year of the first five years the 
amendment is in effect the public benefit anticipated as a result of enforcing 
the amendment will be the availability of information on how to obtain 
information about insurance, insurance companies, and complaint procedures. 
There will be no effect on small businesses. There is no anticipated economic 
cost to persons who are required to comply with the proposed amendment.
Comments on the proposal may be submitted to Bill Maschal, Acting Associate 
Commissioner for Consumer Services, Mail Code 111-1A, Texas Department of 
Insurance, P.O. Box 149091, Austin, Texas 78714-9091.
The amendment is proposed under the Insurance Code, Article 1.04, which provides 
the State Board of Insurance with the authority to determine policy and rules in 
accordance with the laws of this state; and under the Insurance Code, Article 
1.35, which provides the State Board of Insurance with the authority to 
promulgate the wording for the notice of policyholder complaint procedures.
sec.1.601. Complaint Notice.
(a) All new and renewal policies, bonds, and annuity contracts [delivered or] 
issued for delivery in this state on or after <nl>January 31, 1992 <ol> 
[September 1, 1984], and all certificates evidencing new or renewal coverage 
[delivered or] issued for delivery in this state on or after <nl>January 31, 
1992<ol> [September 1, 1984], shall [include in or] be accompanied by [one of] 
the following <nl>notice-in English and in Spanish-<ol>[notices] in no less than 
10-point type. <nl>TOLL-FREE NUMBER: As a service to consumers, the Texas 
Department of Insurance (TDI) operates a toll-free information and complaint 
telephone number. You can call 1-800-252-3439 to obtain:
<nl>(1) information on whether an insurance company or agent is licensed to do 
business in Texas;
<nl>(2) information collected or maintained by TDI regarding complaints received 
against an insurance company or agent;
<nl>(3) the rating of an insurance company, if any, as published by a nationally 
recognized rating service, and information on how to obtain company ratings from 
other rating services;
<nl>(4) the types of coverages available to you through any insurer writing 
insurance in Texas;
<nl>(5) general information concerning policyholder rights under Texas insurance 
laws, rules, and regulations;
<nl>(6) information about Medicare supplement insurance laws, rules, and 
regulations;
<nl>(7) a list of consumer publications and services available through TDI; and
<nl>(8) information and assistance on how to file a complaint against an 
insurance company or agent.
COMPLAINT NOTICE: Should any dispute arise about your premium or about a claim 
that you have filed, contact the <nl>insurance company or<ol> agent [or write to 
the company] that issued the *____________. If the problem is not resolved, you 
may <nl>call the Texas Department of Insurance's toll-free number-1-800-252-3439 
-for assistance in filing a complaint or mail your written complaint to the 
Texas Department of Insurance, <ol> [also write the State Board of Insurance] 
P.O. Box 149091, Austin, Texas 78714-9091, Fax #(512) 475-1771. This notice of 
complaint procedure is for information only and does not become a part or 
condition of this *_____________.
 * insert: policy, bond, annuity contract, or certificate, as is appropriate.
[COMPLAINT NOTICE: Should any dispute arise about your premium or about a claim 
that you have filed, write to the company that issued the *________________. If 
the problem is not resolved, you may also write to the State Board of Insurance, 
P.O. Box 149091, Austin, Texas 78714-9091, Fax #475-1771. This notice of 
complaint procedure is for information only and does not become a part or 
condition of this **_____________.
**insert: policy, bond, annuity, contract, or certificate, as is appropriate].
(b) The words <nl>"toll-free number" and<ol> "complaint notice" <nl>where 
capitalized in this regulation must be capitalized in the notice <ol> [at the 
first of the quoted portion must be in capital letters]. The written notice may 
contain such additional information as the company issuing the policy deems 
appropriate, provided such information is not misleading and does not violate 
any statute of the State of Texas or any rule or regulation promulgated by Texas 
Department of Insurance [State Board of Insurance].
(c) <nl>Previously approved notice of complaint procedure language adopted by 
the department as of January 1, 1990, may continue to be used until current 
supplies of policy forms are exhausted, but not later than January 30, 1991.<ol> 
[Notwithstanding any other rule of this board, policies, bonds, annuity 
contracts, and certificates requiring prior approval that were approved or filed 
prior to September 1, 1984, may include or be accompanied by the complaint 
notice in subsection (a) of this section without refiling for approval.
[(d) Previously approved notice of complaint procedure language that has been 
adopted by the board pursuant to the Insurance Code, Article 1.35, for auto, 
title, and workers' compensation insurance may continue to be used until current 
supplies of policy forms are exhausted, but no later than September 1, 1985.
[(e) Previously approved notice of complaint procedure language that has been 
adopted by the board as of January 1, 1990, may continue to be used until 
current supplies of policy forms are exhausted, but not later than September 30, 
1990.]
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on January 6, 1992.
TRD-9200173
Linda K. von Quintus-Dorn
Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 14, 1992
For further information, please call: (512) 463-6327
       
TITLE 31. NATURAL RESOURCES AND CONSERVATION
Part IX. Texas Water Commission
Chapter 335. Industrial Solid Waste and Municipal Hazardous Waste
 The Texas Water Commission proposes amendments to sec. s335.321-335.324, the 
repeal of sec.sec.335.325-335.333 and new sec.sec.335.325-335.332, concerning 
industrial solid waste and hazardous waste fee system. The Health and Safety 
Code, Chapter 361, Subchapter D authorizes the commission to establish a 
hazardous waste fee system related to the generation and disposition of 
hazardous waste and the operation of hazardous waste facilities subject to 
permits. House Bill 1986, Acts of the 72nd Legislature, 1991, amended the Health 
and Safety Code, Chapter 361, Subchapter D, to restructure and expand the 
hazardous waste fee program. The commission adopted rules on an emergency basis 
effective September 3, 1991 (16 TexReg 4780) to implement the provisions of 
House Bill 1986 and restructure the existing hazardous waste fee program. These 
emergency rules are proposed to be withdrawn on the effective date of permanent 
rules adopted under this proposal.
The funds established under the Health and Safety Code, Chapter 361, Subchapter 
D, the hazardous waste generation and facility fees fund and the hazardous waste 
disposal fee fund are renamed as the hazardous and solid waste fees fund and the 
hazardous and solid waste remediation fee fund, respectively. House Bill 1986 
requires that non-hazardous waste be included in the fee system and authorizes 
the assessment of generation and facility fees on Class I nonhazardous waste and 
permitted waste management facilities, respectively. The maximum annual 
generation fee on hazardous waste is increased from $15,000 to $25,000 and a 
maximum annual generation fee for nonhazardous waste is set at $1, 000. 
Exemptions from generation fee assessment are authorized where the wastes are 
generated from remedial activities paid from state funds and for certain 
wastewaters which are characteristically hazardous and treated to be rendered 
nonhazardous. The maximum amount of generation and facility fees that may be 
collected each year is increased from $4.5 million to $6 million.
House Bill 1986 also provides for the replacement of on-site hazardous waste 
land disposal fees with a broader fee to be assessed on all noncommercial 
hazardous waste management activities. This change will result in the assessment 
of fees on noncommercial hazardous waste management similar to the commercial 
management fees currently authorized under the Health and Safety Code. The 
management of hazardous waste generated from remedial activities paid from state 
funds is exempt from the assessment of a waste management fee. Twenty-five 
percent of the revenues from fees on commercial hazardous waste management are 
to be paid to the county within which commercial facilities are located. The 
balance of commercial fees and all noncommercial fees are to be divided equally 
between the hazardous and solid waste fees fund and the hazardous and solid 
waste remediation fee fund. The commission is authorized to establish fee rates 
for hazardous waste management which will result in the collection of between 
$12 million and $16 million annually, after payments to local county 
governments. In addition to changes related to waste generation and disposition, 
House Bill 1986 authorizes the assessment of fees on permit applications for 
industrial solid waste and hazardous waste facilities and the deposit of these 
fees to the hazardous and solid waste fees fund. Under this proposal, existing 
sec.sec.335. 321-335.324 are amended. Section 335.325 is repealed. Existing 
sec.sec.335.326-335. 333 are also repealed but are proposed with certain 
amendments as new sec.sec.335. 325-335.332.
The heading of TAC Chapter 335, Subchapter J is amended to reflect the 
incorporation of nonhazardous waste in the fee system and the expansion of the 
system to include additional and broader types of fee assessments as authorized 
by House Bill 1986, 72nd Legislature, 1991.
Section 335.321, relating to Purpose, is amended to refer to a fee system 
related to both industrial solid waste and hazardous waste. Under 
sec.335.321(a), the types of fees authorized are changed to indicate the 
addition of generation and facility fees for Class I nonhazardous waste and 
permit application fees and the replacement of on-site hazardous waste land 
disposal fees with broader fees for all types of noncommercial hazardous waste 
management. A heading is added to sec.335.321(b), relating to Hazardous and 
Solid Waste Fees Fund, and reference included to the use of the fund for the 
purpose of regulating industrial solid waste as well as hazardous waste 
activities. A reference to the Texas Solid Waste Disposal Act is changed to the 
Health and Safety Code, Chapter 361. The sources of revenue to the fund are 
specified as generation fees, facility fees, waste management fees and interest 
penalties for late payment assessed under this subchapter and permit application 
fees assessed under sec.305.53 of this title (relating to Application Fees). A 
heading is added to sec.335.321(c), relating to Hazardous and Solid Waste 
Remediation Fee Fund, and reference included to the broader use of the fund for 
the additional purposes of regulation and management of household and other 
hazardous substances, and the cleanup or removal of spills or releases of 
hazardous substances. New sec.335. 321(c)(2) specifies the sources of revenue 
for the hazardous and solid waste remediation fee fund to include hazardous 
waste management fees and interest and penalties assessed under this subchapter, 
money paid by liable parties for cleanup of contaminated facilities, the 
interest received from the investment of the fund, and any payments received 
from other agencies or persons authorized to deposit funds for the purpose of 
remediation of contaminated facilities, including fees on lead-acid batteries 
under the Health and Safety Code, sec.361. 138. Section 335.321(d) is amended to 
reflect the distribution of hazardous waste management fees assessed under 
sec.335.325 of this title (relating to Hazardous Waste Management Fee 
Assessment). Twenty-five percent of commercial management fees are to be paid to 
the county in which a facility making payment is located. The balance of 
commercial fees and all noncommercial fees are to be divided equally between the 
hazardous and solid waste fees fund and the hazardous and solid waste 
remediation fee fund.
Section 335.322, relating to Definitions, is changed to include new or amended 
definitions of key terms. Definitions of industrial solid waste, Class I waste 
and Class I nonhazardous waste are incorporated by reference to existing 
definitions in other sections of this title. The definition of hazardous waste 
is changed to conform to the appropriate and controlling definition found in 
sec.335.1 of this title (relating to Definitions). Definitions of captured 
facility and commercial hazardous waste storage, processing and disposal 
facility are amended to incorporate references to industrial solid waste and to 
reflect the distinction between commercial and noncommercial waste management 
activity. A definition of noncommercial waste storage, processing or disposal 
facility is added. The definition of generator is changed to incorporate a 
reference to industrial solid waste for the purpose of fee assessment. The 
definition of land disposal facility is changed to include land treatment as a 
type of land disposal and to delete a reference to exclusion of disposal of 
hazardous wastes retrieved or created due to remediation of inactive disposal 
facilities.
Section 335.323, relating to Generation Fee Assessment, is changed by deleting 
"Hazardous Waste" from the section heading. Section 335.323(a) is changed by 
adding Class I nonhazardous waste to wastes subject to a generation fee. The 
maximum annual generation fee for hazardous waste is increased from $15, 000 to 
$25,000 and a maximum annual fee for nonhazardous waste of $1,000 is 
incorporated. Section 335.323(c) is changed to clarify that characteristically 
hazardous wastewaters qualifying for exemption from fee assessment must be 
rendered nonhazardous as a result of any qualified treatment or neutralization 
process. Existing sec.335.323(d), which relates to the exemption from generation 
fee assessment of certain hazardous wastes burned for energy recovery and which 
are obtained from off-site sources, is deleted. This change is consistent with 
other changes to this section clarifying the assessment of generation fees for 
wastes which are not produced by the generator but received from other sources. 
New sec.335.323(d) is added to exempt from generation fee assessment those 
wastes which are produced in the course of remedial actions paid from state 
funds. Section 335.323(e) is amended to establish a new rate schedule for 
hazardous and nonhazardous waste generation fees.
Section 335.324, relating to Facility Fee Assessment, is changed to include 
Class I nonhazardous waste facilities among those subject to an assessment and 
to simplify and clarify the determination of a facility fee. Section 335.324(b) 
is amended by the addition of a specific reference to the appropriate section 
regarding penalties for late payment. In sec.335.324(d), a minimum fee of $500 
and a maximum fee of $5,000 are established for a nonhazardous waste facility. 
New sec.335.324(e)-(g) are inserted and the existing facility fee rate schedule 
is deleted. New sec.335.324(e) specifies the exemption from facility fee 
assessment for certain wastewater treatment units, new sec.335.324(f) defines 
other unit' for the purposes of facility fee assessment and new  s335.324(g) 
specifies the conditions under which closed facilities are subject to a facility 
fee. Existing sec.335.324(e) is redesignated as sec.335.324(h) and amended to 
new sec.335.324(i), which contains the amended facility fee schedule. New 
sec.335. 324(i) is added to the section to establish a revised and simplified 
facility fee schedule.
New sec.335.325, relating to Hazardous Waste Management Fee Assessment, provides 
for the assessment of a fee for the management of hazardous waste at both 
commercial and noncommercial treatment, storage, and disposal facilities. This 
section incorporates the provisions of repealed sec.335.326, relating to 
Commercial Fee Assessment, with changes to incorporate the broader assessment of 
both commercial and noncommercial hazardous waste management activity. The 
heading is amended to relate to hazardous waste management fee assessment. 
Generally, references to "commercial hazardous waste fee" are changed to 
hazardous waste management fee. References to a facility operator in this 
section are changed to refer also to the facility owner to clarify that either 
party may be liable for the payment of an assessed fee. Section  s335.325(b) 
authorizes a commercial facility to pay the same fee as a noncommercial facility 
for wastes generated in the state and received from a wholly-owned subsidiary, 
affiliate or captured facility. Section 335.325(c) exempts from the assessment 
of a waste management fee those wastes generated in the course of a remedial 
action paid for by state funds. Section 335.325(d) provides that a fee is 
assessed for storage of hazardous waste after 90 days. Section 335.325(e) 
exempts from the assessment of a waste management fee certain facilities 
permitted under Chapter 26 of the Water Code. Section 335.325(f) provides that 
management fees are based on the total weight of a waste stream unless they are 
disposed in an underground injection well, in which case the fee is based on the 
dry weight. The maximum fee assessed under this section for wastes from in 
state, under provisions of sec.335.325>(g), is $20 per ton for wastes which are 
landfilled. Section 335.325(h) provides that a higher fee may be assessed for 
wastes from out of state for certain types of disposition. This incremental fee 
is generally 50% greater than the fee for wastes from in state and is assessed 
for the purpose of deriving from out-of-state generators an amount of revenue to 
support state regulatory programs commensurate to that paid by in-state 
generators in the form of other fees and taxes. Section 335.325(i) distinguishes 
between the burning of a hazardous waste fuel and the storage or processing of a 
hazardous waste fuel for the purposes of assessment of a waste management fee. 
The fee schedule for commercial and noncommercial waste management is 
incorporated in sec.335.325(j). Commercial fees range from $20 per ton for 
landfilling to $2 per ton for recycling. Noncommercial fees are generally one 
half of the commercial rates, ranging from $10 per ton for landfilling to $1 per 
ton for recycling. Rates for imported waste, where applicable, are higher than 
for in-state waste by 50%. Under sec.335.325(k), no additional fee is levied for 
imported wastes which are burned for energy recovery or legitimately reclaimed, 
reused or recycled. Section 335.325(1) provides that only one fee is paid for 
management of a waste at a facility. Where more than one fee could be assessed, 
the higher of the fees is applied. Section 335.325(m) specifies that a storage 
fee is assessed for waste which is stored for more than 90 days and that a fee 
of one-half the initial fee is assessed for each additional 90-day period of 
storage. Under provisions of sec.335.325(n), any facility which receives a waste 
from another facility will pay whatever management fee is applicable to the 
disposition of the waste after receipt. Section 335.325(o) provides that the fee 
rate for incineration of aqueous wastes containing one percent or less of 
organic carbon is ten percent of the fee rate for incineration under sec.335. 
325(j).
New sec.335.326, relating to Dry Weight Determination, provides methods and 
technical references for determination of the dry weight of a hazardous waste 
stream for the purpose of calculation of a fee assessed for underground 
injection. Except for changes to references to new section numbers, this new 
section is identical to the repealed sec.335.327, relating to Dry Weight 
Determination.
New sec.335.327, relating to Alternate Methods of Dry Weight Determination, 
provides the opportunity for generators to use alternate methods of 
determination of dry weight where the methods specified in sec.335.326, relating 
to Dry Weight Determination, are not applicable or do not yield accurate 
results. Alternate methods are subject to the approval of the executive director 
and must be supported by adequate technical demonstration. Generators may elect 
to declare the total weight of a waste as the dry weight. Except for changes to 
references to new section numbers, this section is identical to the repealed 
sec.335.328, relating to Alternate Methods of Dry Weight Determination.
New sec.335.328, relating to Fees Payment, includes procedures and requirements 
for making payment of fees assessed under this subchapter. Generation and 
facility fees are due annually on dates to be determined by the commission. 
Waste management fees are due monthly.
New sec.335.329, relating to Records and Reports, provides for specific 
reporting and recordkeeping requirements in order to document the amount of fees 
to be assessed. Generators are required, under sec.335.329(a), to keep records 
of all waste management activities, including the quantities generated, stored, 
processed or disposed in accordance with the provisions of  s335.9 of this title 
(relating to Recordkeeping and Annual Reporting Procedures Applicable to 
Generators). In addition, generators must provide the operator of an underground 
injection well with a certificate of computation of the dry weight of any 
hazardous waste to be disposed in an injection well. Documentation of the basis 
for the assessment of any waste management fee must also be maintained, 
including the rationale for any adjustment to or exemption from an assessment. 
Under sec.335.329(b), generators are required to submit reports prepared under 
the provisions of sec.335.13(b) of this title (relating to Recordkeeping and 
Reporting Procedures Applicable to Generators Shipping Hazardous Waste or Class 
I Waste and Primary Exporters of Hazardous Waste). Section 335.329(c) provides 
that owners or operators of hazardous waste storage, processing or disposal are 
required to keep records of the amount of each hazardous waste stored, processed 
or disposed, including the dry weight amount of each hazardous waste disposed in 
an underground injection well and documentation of the basis for the asset 
adjustment or exemption of any waste management fee assessed under sec.335.325, 
relating to Hazardous Waste Management Fee Assessment. Section 335.329(d) 
requires that owners and operators of hazardous waste storage, processing, and 
disposal facilities submit the reports required under sec.335.15(2) of this 
title (relating to Recordkeeping and Reporting Requirements Applicable to Owners 
or Operators of Storage, Processing, or Disposal Facilities). Section 335.329(e) 
requires owners or operators of hazardous waste storage, processing, or disposal 
facilities to retain the records required by sec.335.329(c) of this section for 
a minimum of three years from the date of reporting in  s335.323 of this title 
(relating to Hazardous Waste Generation Fee Assessment), and submit a monthly 
on-site hazardous waste management summary containing such information for each 
month of the fiscal year as is specified in sec.335.329(c) of this section to 
the Texas Water Commission for the purpose of assessment of fees under 
sec.335.325 of this title (relating to Hazardous Waste Management Fee 
Assessment). This summary report shall be due by the 25th day following the end 
of the month for which a report is made. An owner or operator must keep a copy 
of each summary for a period of at least three years from the due date of the 
summary. Under sec.335. 329(f) the periods of record retention required are 
automatically extended during the course of any unresolved enforcement action 
regarding the regulated activity.
New sec.335.330, relating to Cancellation, Revocation, and Transfer, provides 
that cancellation, transfer or other change in permit status during a fiscal 
year will not constitute grounds for a refund of any fee paid under this 
subchapter. Transfer of ownership of a facility will not relieve an owner or 
operator from liability for any fee accrued during his ownership.
New sec.335.331, relating to Failure to Make Payment or Report, provides for 
certain penalties for failure to pay a fee assessed under this subchapter or 
report activities subject to an assessment. Section 335.331(b) provides for a 
15% annual interest penalty for delinquent payments. Section 335.331(c) provides 
for a penalty of $100 per day for late reports of hazardous waste disposition.
New sec.335.332, relating to Appendices I and II, provides an outline of the 
procedures to be followed in making the determination of dry weight under the 
provisions of proposed sec.335.326 of this title, relating to Dry Weight 
Determination. With the exception of changes to references to new section 
numbers, the provisions are the same as those of existing sec.335.327, relating 
to Dry Weight Determination, which is repealed under this proposal.
Karen P. Phillips, director of budget and planning, has determined that for the 
first five years these sections as proposed are in effect there will be fiscal 
implications as a result of enforcement of or compliance with the sections. The 
effect on state government will be an increase in costs of administration of 
approximately $110,000 in fiscal year 1992 and $94,000 in each of the fiscal 
years 1993-1996. There are no anticipated costs to local governments or changes 
in revenues. Costs to industrial solid waste and hazardous waste facilities as a 
group are anticipated to increase by $4.5 million to $6.5 million annually 
during the next five-year period. Generators of Class I nonhazardous waste will 
pay annual generation fees ranging from $50 to $1,000. The average fee will be 
$208 and the median fee $50. Hazardous waste generators will pay annual fees 
between $100 and $25,000. These fees represent a $50 increase in the minimum fee 
and a $10,000 increase in the maximum fee. Actual fees paid by the majority of 
small generators are anticipated to decrease under the proposed rate structure, 
while fees for the larger generators are anticipated to increase, in some cases 
by as much as $10,000. The average hazardous waste generation fee will be 
approximately $950 and the median fee $100. Under the proposed facility fee 
schedule, Class I nonhazardous waste facilities will pay annual facility fees of 
between $500 and $5,000. Hazardous waste facility fees will change somewhat 
under the simplified rate schedule, but these changes are not anticipated to be 
significant.
Under the proposal for hazardous waste management fees, those operators using 
the services of commercial treatment, storage or disposal facilities will 
realize only small changes in costs related to fee assessments, as only minor 
changes to commercial fee rates are proposed. Commercial landfill fees will 
increase by $2.00 per ton for in-state and $3.00 per ton for out-of-state 
wastes, respectively. The fee for storage is increased by approximately one-
third, but the initial time period to which the fee is applied is increased 
proportionately. Costs for burning of waste fuels are unchanged, but the cost of 
blending fuels is reduced by one-third, from $6.00 per ton to $4.00. Fees for 
commercial recycling are reduced 50%, from $4.00 per ton to $2.00.
New fees to be assessed noncommercial hazardous waste facilities will vary with 
the type of waste management method and will range from $1 per ton for wastes 
recycled on site to $10 per ton for wastes from in state which are landfilled. 
Incremental fees for noncommercial management of imported wastes will be 
approximately 50% of the in-state fee, where applicable.
Ms. Nance also has determined that for each year of the first five years these 
sections are in effect the public benefit anticipated as a result of enforcing 
the sections will be improvements in: enforcement of the provisions of the 
Health and Safety Code and the regulations of the Texas Water Commission 
regarding the generation and management of industrial solid wastes and hazardous 
wastes; the protection of the quality of the water resources of the state and 
human health and the environment; the equity of assessments under the revenue 
programs supporting the commission's regulatory activities; and the ability of 
these assessments to provide adequate resources to support these regulatory 
activities. There will be no effect on small businesses.
Comments on this proposal may be submitted to Stephen Minick, Office of Budget, 
Planning and Evaluation, P.O. Box 13087, Austin, Texas 78711. The deadline for 
submission of written comments will be 30 days after the date of publication of 
this proposal in the Texas Register.
Subchapter J. Industrial Solid Waste and Hazardous Waste Fee System
278>31 TAC sec.sec.335.321-335.332
The amendments and new sections are proposed under the Health and Safety Code, 
Chapter 361, as amended by House Bill 1986, Acts of the 72nd Legislature, 1991, 
which provides the Texas Water Commission with the authority to establish an 
industrial solid waste and hazardous waste fee program and implement fee 
assessments for industrial solid waste and hazardous waste generators, 
facilities and permit applicants, and the commercial and noncommercial 
management of hazardous waste.
sec.335.321. Purpose.
(a) It is the purpose of this subchapter to establish <nl>an industrial solid 
waste and<ol> [a] hazardous waste fee program. Under this program the following 
fees are imposed:
(1) an annual fee on each [hazardous waste] generator <nl>of Class I industrial 
solid waste or hazardous waste;
(2) an annual fee on each facility which either holds a <nl>Class I industrial 
solid waste or<ol> hazardous waste permit or operates <nl>Class I industrial 
solid waste or<ol> hazardous waste management units subject to permit 
authorization;
[(3) a quarterly fee on each operator of an on-site land disposal facility for 
each dry weight ton of hazardous waste deposited in a land disposal unit;]
<nl>(3)<ol>[(4)] a fee on the operator of a [commercial] hazardous waste 
storage, processing or disposal facility for hazardous waste which is 
<nl>managed on site <ol> [generated by off-site generators and received] by 
<nl>the<ol> [such commercial] facility;
[(5) The commercial hazardous waste facility fee is assessed in addition to any 
other fee authorized under this subchapter.]
<nl>(4)  A fee on each application for a permit for an industrial solid waste or 
hazardous waste facility assessed under sec.305.53 of this title (relating to 
Application Fees).
(b) <nl>Hazardous and solid waste fees fund.
<nl>(1) The<ol> [Hazardous waste generation and facility fees will be deposited 
in a] hazardous <nl>and solid<ol> waste [generation and facility] fees fund 
<nl>shall be used<ol> for the purpose of regulation <nl>of industrial solid 
waste and<ol> hazardous waste, including payment to other state agencies for 
services provided under contract relating to enforcement of the <nl>Health and 
Safety Code, Chapter 361<ol> [Texas Solid Waste Disposal Act].
<nl>(2) The fund shall consist of:
<nl>(A) generation fees assessed under sec.335.323 of this title (relating to 
Generation Fee Assessment);
<nl>(B) facility fees assessed under sec.335.324 of this title (relating to 
Facility Fee Assessment);
<nl>(C) hazardous waste management fees assessed and apportioned under 
sec.335.325 of this title (relating to Hazardous Waste Management Fee 
Assessment) ; and
<nl>(D) application fees assessed under sec.305.53 of this title (relating to 
Application Fees).
<nl>(E) interest penalties for late payment of industrial solid waste and 
hazardous waste fees imposed by sec.335. 331 of this title (relating to Failure 
to Make Payment or Report);
(c)  <nl>Hazardous and solid waste remediation fee fund.
<nl>(1)  The<ol> [All disposal fees will be deposited in a] hazardous <nl>and 
solid<ol> waste <nl>remediation<ol> [disposal] fee fund <nl>shall be used for 
the purpose of the following:
<nl>(A)<ol>[(1)] necessary and appropriate removal and remedial action at sites 
at which <nl>solid<ol> [hazardous] waste or hazardous [waste] substances have 
been disposed if funds from a liable party, independent third party, or the 
federal government are not sufficient for the removal or remedial action;
<nl>(B)<ol>[(2)] necessary and appropriate maintenance of removal and remedial 
actions for the expected life of those actions if funds from a liable party have 
been collected and deposited in the fund for that purpose or if funds from a 
liable party, independent third party, or the federal government are not 
sufficient for the maintenance; [and]
<nl>(C)<ol>[(3)] expenses related to complying with the federal Comprehensive 
Environmental Response, Compensation and Liability Act of 1980 (42 United States 
Code sec.9601 et seq.) <nl>as amended<ol>, the federal Superfund Amendments and 
Reauthorization Act of 1986 <nl>(10 United States Code sec.2701 et seq.) <ol>, 
and the <nl>Health and Safety Code, Chapter 361 Subchapters F and I;<ol> [Solid 
Waste Disposal Act, Texas Civil Statutes, sec.8(g) and sec.13.]
<nl>(D) expenses concerning the regulation and management of household hazardous 
substances and the prevention of pollution of the water resources of the state 
from the uncontrolled release of hazardous substances; and
<nl>(E) expenses concerning the cleanup or removal of a spill release or 
potential threat of release of a hazardous substance where immediate action is 
appropriate to protect human health and the environment.
<nl>(2) The fund shall consist of:
<nl>(A) hazardous waste management fees assessed and apportioned under 
sec.335.325 of this title (relating to Hazardous Waste Management Fee 
Assessment);
<nl>(B) interest and penalties imposed under sec.335.331 of this title (relating 
to Failure to Make Payment or Report);
<nl>(C) money paid by a person liable for facility cleanup and maintenance under 
provisions of the Health and Safety Code sec.361.197;
<nl>(D) interest received from the investment of the fund in accounts under the 
charge of the treasurer; and
<nl>(E) monies collected on behalf of the commission or transferred from other 
agencies under any applicable provisions of the Health and Safety Code, 
including sec.361.138 relating to fees on lead-acid batteries, or grants from 
any person made for the purpose of remediation of facilities under the Health 
and Safety Code Chapter 361.
(d)  <nl>Hazardous<ol> [Commercial hazardous] waste <nl>management <ol> fees 
collected under <nl>sec.335.325 of this title (relating to Hazardous Waste 
Management Fee Assessment) <ol> [this subchapter] shall be credited to the funds 
of the state as follows:
[(1) One quarter, or 25%, of the commercial hazardous waste facility fee shall 
be credited to the hazardous waste generation and facility fees fund.]
<nl>(1)<ol>[(2)] One quarter, or 25%, of the [commercial] hazardous waste 
<nl>management <ol> [facility] fee <nl>collected from a commercial waste 
storage, processing or disposal facility<ol> shall be credited to the hazardous 
<nl>and solid<ol> waste [generation and facility] fees fund to be distributed to 
the county in which the facility paying the fee is located. Funds due the 
affected county shall be paid by the commission within 60 days of the receipt 
and verification of payments from a commercial hazardous waste facility in the 
county.
<nl>(2) The remaining amount of commercial hazardous waste management fees and 
the total amount of noncommercial hazardous waste fees shall be deposited as 
follows:
<nl>(A)<ol>[(3)] One half, or 50%, of <nl>each amount<ol> [the commercial 
hazardous waste fee] shall be credited to the hazardous and solid waste 
<nl>remediation <ol> [disposal] fee fund.
<nl>(B) One half, or 50%, of each amount shall be credited to the hazardous and 
solid waste fees fund.
sec.335.322. Definitions.  The following words and terms, when used in this 
subchapter shall have the following meanings, unless the context clearly 
indicates otherwise.
 Captured facility -A manufacturing or production facility which generates  
<nl>an industrial solid waste or<ol> hazardous waste which is routinely stored, 
processed or disposed, on a shared basis, in an integrated waste management unit 
owned and operated by and located within a contiguous manufacturing facility.
<nl>   Class I waste -Any industrial solid waste or mixture of industrial solid 
wastes meeting the definition of Class I waste under sec.335.1 of this title 
(relating to Definitions).
<nl>   Class I nonhazardous waste-Any Class I waste which is not a hazardous 
waste as defined in this section.
 Commercial [hazardous] waste storage, processing, and disposal facility-Any 
facility which accepts <nl>an industrial solid waste or<ol> a hazardous waste 
for storage, processing (including incineration) or disposal [from an off-site 
generator] for a charge.
 Generator [of hazardous waste or generator] -Any person whose act or process 
produces <nl>industrial solid waste or<ol> hazardous waste or whose act first 
causes <nl>an industrial solid waste or a<ol> hazardous waste to become subject 
to regulation by the commission.
 Hazardous waste -Those solid wastes not otherwise exempted which have been 
identified or listed as hazardous wastes by the administrator of the United 
States Environmental Protection Agency pursuant to the federal Solid Waste 
Disposal Act, 42 United States Code sec.6901 et seq., as amended[, as of 
September 1, 1985].
 Industrial solid waste-A solid waste meeting the definition of industrial solid 
waste under sec.335.1 of this title (relating to Definitions).
 Land disposal facility-Any landfill, surface impoundment (excluding an 
impoundment treating, processing, or storing waste that is disposed pursuant to 
Texas Water Code, Chapter 26 or Chapter 27), waste pile, facility at which land 
farming <nl>, land treatment,<ol> or a land application process is used, or an 
injection well. Land disposal does not include the normal application of 
agricultural chemicals or fertilizers[, nor does it include disposal of 
hazardous waste retrieved or created due to remediation of an inactive hazardous 
waste disposal facility for which no federal or state permit was issued after 
September 1, 1985].
<nl>   Noncommercial waste storage, processing or disposal facility-Any facility 
that accepts an industrial solid waste or a hazardous waste for storage 
processing (including incineration) or disposal for no charge or that stores, 
processes or disposes of wastes generated on site by the facility.
sec.335.323. [Hazardous Waste] Generation Fee Assessment.
(a)  An annual [hazardous waste] generation fee is hereby assessed each 
generator which generates [or possesses] <nl>Class I industrial solid waste 
or<ol> hazardous waste or whose act first causes <nl>such<ol> [a hazardous] 
waste to become subject to regulation under Subchapter B of this chapter on or 
after September 1, 1985. These fees shall be deposited in the hazardous <nl>and 
solid<ol> waste [generation and facility] fee fund. The amount <nl>of a 
generation fee<ol> [assessed each generator] is determined by the <nl>total 
amount of Class I nonhazardous waste or<ol> [annual] hazardous waste 
<nl>generated <ol> [generation rate calculated] during the previous calendar 
year. [A generator who produces less than 100 kilograms of hazardous waste per 
month is not subject to the assessment of a generation fee. The 100 kilograms 
shall be measured as the total of all hazardous wastes generated by a facility 
in any calendar month.] <nl>The annual generation fee may not be less than $50. 
The annual generation fee for hazardous waste shall not be more than $25,000 and 
for nonhazardous waste not more than $1,000.
(b) Hazardous wastes subject to the provisions of  s335.78 of this title 
(relating to Special Requirements for Hazardous Waste Generated by Conditionally 
Exempt Small Quantity Generators) and precluded from the quantity determinations 
of such section shall be considered for the purposes of this subchapter in the 
total volume of hazardous waste generated and subject to fee assessment.
(c) Wastewaters containing hazardous wastes which are designated as hazardous 
solely because they exhibit a hazardous characteristic as defined in 40 Code of 
Federal Regulations, Part 261, Subpart C, relating to characteristics of 
hazardous waste<nl>,<ol> and are <nl>rendered nonhazardous by neutralization<ol> 
[neutralized] or <nl>other treatment <ol> [otherwise treated] on-site in totally 
enclosed treatment facilities or wastewater treatment units for which no permit 
is required under sec.335.2 of this title (relating to Permit Required) or 
sec.335.41 of this title (relating to Purpose, Scope, and Applicability) are 
exempt from the assessment of hazardous waste generation fees. This exemption 
from fee assessment in no way limits a generator's obligation to report such 
waste generation or waste management activity under any applicable provision of 
this chapter.
[(d) A facility which blends hazardous wastes to formulate fuels to be burned 
for energy recovery is not subject to the assessment of generation fees for that 
portion of a hazardous waste fuel which is derived from wastes received from 
off-site sources and which is otherwise subject to the assessment of generation 
fees at the original point of generation or shipment. This exemption from fee 
assessment applies only to wastes burned for energy recovery which are regulated 
under Subchapter H of this chapter (relating to Standards for the Management of 
Specific Wastes and Specific Types of Facilities). This exemption does not apply 
to wastes generated on-site which may be blended to form a hazardous waste fuel 
and in no way limits a generator's obligation to report such waste generation, 
management, or transportation activity under any applicable provision of this 
chapter.]
<nl>(d) Wastes generated in a removal or remedial action accomplished through 
the expenditure of public funds from the hazardous and solid waste remediation 
fee fund shall be exempt from any generation fee assessed under this section.
(e) <nl>Generation<ol> [Hazardous waste generation] fees are to be assessed 
according to the following schedule:
<nl>(1) Hazardous Waste:
<nl>(A) waste reported (tons) -annual fee;
<nl>(B) less than one ton-no charge;
<nl>(C) from one to 50 tons-$100;
<nl>(D) greater than 50 tons-$2 per ton.
<nl>(2) Nonhazardous Waste:
<nl>(A) waste reported (tons) -annual fee;
<nl>(B) less than one ton-no charge;
<nl>(C) from one-100 tons -$50;
<nl>(D) greater than 100 tons-$.50 per ton.
[graphic]
sec.335.324. Facility Fee Assessment.
(a) An annual facility fee is hereby assessed on each permittee who holds one or 
more <nl>Class I industrial solid waste or <ol> hazardous waste permits and each 
facility operating a <nl>Class I industrial solid waste or<ol> hazardous waste 
management unit subject to permit authorization. These fees shall be deposited 
in the hazardous <nl>and solid<ol> waste [generation and facility] fees fund. 
The fee for each year is assessed on each facility for which a permit or the 
requirement to comply with permit authorization is in effect during any part of 
the fiscal year.
(b) An applicant who has, prior to September 1, 1985, submitted an affidavit of 
exclusion from permit requirements, shall not be subject to the annual facility 
fee, pending a decision by the commission on the affidavit of exclusion. If the 
commission determines that the facility is subject to the permit requirement, 
the applicant shall pay the fee within 30 days or is subject to the penalties 
for late payment established under <nl>335. 331 of this title (relating to 
Failure to Make Payment or Report)<ol> [herein].
(c) (No change.)
(d) The annual facility fee assessed is the cumulative total of fees for all 
<nl>Class I industrial solid waste or<ol> hazardous waste management units at 
the facility which are authorized by permit or subject to authorization on 
September 1, <nl>1991<ol> [1985], and September 1 of each year thereafter. The 
minimum fee for each <nl>hazardous waste<ol> facility shall be $2,500. The 
maximum fee for each <nl>hazardous waste<ol> facility shall be $25,000. <nl>The 
minimum fee for each facility authorized to manage only nonhazardous waste shall 
be $500 and the maximum fee $5,000.
<nl>(e) A fee under this section for storage or processing in tanks or 
containers will not be assessed against the owner or operator of an elementary 
neutralization unit or wastewater treatment unit exempt from the requirement of 
a permit under  s335.41(d) of this title (relating to Purpose, Scope, and 
Applicability).
<nl>(f) An "other unit," for the purposes of subsection (i) of this section is 
an incinerator thermal processing unit, or other processing unit not otherwise 
listed in subsection (i) of this section used for waste reduction recycling or 
hazard reduction and subject to compliance with permit requirements.
<nl>(g) For facilities which require post-closure care permits [as described in 
paragraph (8) of this subsection], the fee for a closed unit shall apply. <nl>A 
fee is assessed for each unit which received waste after January 26, 1983, and 
which has been closed pursuant to an approved closure plan and which is subject 
to the post-closure care permit requirements. Disposal units which are closed in 
a manner such that all hazardous wastes and hazardous constituents are removed 
pursuant to an approved closure plan are not subject to the fee. <ol> [Fees 
shall be assessed as follows:
[(1) Storage or processing in tanks and containers -$0.02 per gallon of storage 
capacity, except the minimum fee for this category shall be $2,500. This fee 
shall not be assessed against the owner or operator of an elementary 
neutralization unit or wastewater treatment unit exempt from the requirement of 
a permit under sec.335. 41(d) of this title (relating to Purpose, Scope, and 
Applicability).
[(2)  Land treatment units-$4,000 per surface acre, except that the minimum fee 
for this category shall be $4,000.
[(3) Waste piles-$4,000 per surface acre, except that the minimum fee for this 
category shall be $4,000.
[(4) Storage or processing in surface impoundments -$5,000 per surface acre, 
except that the minimum fee for this category shall be $5,000.
[(5)  Landfills-$5,000 per surface acre, except that the minimum fee for this 
category shall be $5,000.
(6) Injection wells-$10,000 for each injection well authorized for the disposal 
of hazardous waste.
[(7) Other Units-$2,500 for each incinerator, thermal processing unit and 
processing unit (other than those listed in paragraphs (1)-(6) of this 
subsection) used for waste reduction, recycling, and hazard reduction. A 
facility fee assessment is applicable only to a unit required to comply with 
interim status or permitting requirements.
[(8) Closed disposal units-$2,500 for each unit which received waste after 
January 26, 1983, and which has been closed pursuant to an approved closure plan 
and which is subject to the post-closure care permit requirements. Disposal 
units which are closed in a manner such that all hazardous wastes and hazardous 
constituents are removed pursuant to an approved closure plan are not subject to 
the fee.]
<nl>(h) <ol>[(e)] The facility fee assessment in subsections <nl>(i)(2)-(5)<ol> 
[(d) (2)-(5)] of this section shall be based on the surface area of the 
[hazardous] waste  <nl>management<ol> unit  <nl>in<ol> [on] which the 
storage<nl>, treatment<ol> or disposal of [hazardous] waste has been authorized.
<nl>(i) Facility fees shall be assessed according to the following schedule:
[graphic]
sec.335.325. Hazardous Waste Management Fee Assessment.
(a) A fee is hereby assessed on each owner or operator of a commercial or 
noncommercial hazardous waste storage, processing or disposal facility, except 
as provided in subsections (b)-(e) of this section, for hazardous wastes which 
are stored, processed, disposed, or otherwise managed on or after October 1, 
1991.
(b) A fee imposed on the owner or operator of a commercial hazardous waste 
storage, processing or disposal facility for hazardous wastes which are 
generated in this state and received from an affiliate or wholly owned 
subsidiary of the commercial facility, or from a captured facility, shall be the 
same fee imposed on a noncommercial facility. For the purpose of this section, 
an affiliate of a commercial hazardous waste facility must have a controlling 
interest in common with that facility.
(c) The storage, processing, or disposal of hazardous wastes generated in a 
removal or remedial action accomplished through the expenditure of public funds 
from the hazardous and solid waste remediation fee fund shall be exempt from the 
assessment of a waste management fee under this section.
(d) A fee shall not be imposed on the owner or operator of a waste storage, 
processing, or disposal facility for the storage of hazardous wastes, provided 
that such wastes are stored for less than 90 days.
(e) A fee may not be imposed under this section on the operation of a facility 
permitted under the Water Code, Chapter 26, or the federal national pollutant 
discharge elimination system program for wastes treated, processed, or disposed 
of in a wastewater treatment system that discharges into surface waters of the 
state.
(f) The hazardous waste management fee authorized under this section shall be 
based on the total weight or volume of a hazardous waste except for wastes which 
are disposed of in an underground injection well in which case the fee shall be 
based on the dry weight of the waste, measured in dry weight tons (dwt), as 
defined in sec.335.322 of this title (relating to Definitions) and sec.335.326 
of this title (relating to Dry Weight Determination).
(g) The hazardous waste management fee for wastes generated in this state shall 
not exceed $20 per ton for wastes which are landfilled.
(h) The operator of a hazardous waste storage, processing or disposal facility 
receiving hazardous waste from out-of-state generators shall be assessed the fee 
amount required on wastes generated in state plus an additional increment to be 
established by rule, except as provided in subsection (k) of this section.
(i) For the purposes of subsection (j) of this section, energy recovery means 
the burning or incineration of a hazardous waste fuel and fuel processing means 
the handling of a waste fuel, including storage and blending, prior to its 
disposal by burning.
(j)  Except as provided in subsections (k)-(o) of this section, hazardous waste 
fees shall be assessed according to the following schedule:
[graphic]
(k) For hazardous wastes which are generated out of state, the fee will be that 
specified in subsection (j) of this section, except that the fee for hazardous 
wastes which are legitimately reclaimed, reused or recycled and the fee for the 
storage, processing, incineration and disposal of hazardous waste fuels shall be 
the same for wastes generated out of state and in state.
(l)  Except as provided in subsection (m) of this section, only one hazardous 
waste management fee shall be paid for a hazardous waste managed at a facility. 
In any instance where more than one fee could be applied under this section to a 
specific volume of waste, the higher of the applicable fees will be assessed.
(m) A fee for storage of hazardous waste shall be assessed in addition to any 
fee for other waste management methods at a facility. No fee shall be assessed 
under this section for the storage of a hazardous waste for a period of less 
than 90 days as determined from the date of receipt or generation of the waste 
(or the effective date of this section). The fee rate specified in the schedule 
under subsection (j) of this section shall apply to the storage of waste from 90 
to 180 days. A fee of one-half of the amount specified in subsection (j) of this 
section shall be assessed for each subsequent 90-day period, or part of such 
period, beyond the initial 180 days of storage.
(n)  A facility which receives waste transferred from another facility shall pay 
any waste management fee applicable under this section and shall not receive 
credit for any fee applied to the management of the hazardous waste at the 
facility of origin.
(o) The fee rate for incineration of aqueous wastes containing 1.0% or less of 
total organic carbon will be 10% of the fee for incineration under the schedule 
in subsection (j) of this section.
sec.335.326. Dry Weight Determination.
(a) The method of calculating the dry weight of each hazardous waste stream 
shall be determined initially and at any time the waste stream undergoes a 
significant change in water content using the appropriate method(s) as specified 
in this section. Determinations shall be made from a representative sample 
collected by grab or composite. Collection methods and sample preservation shall 
be by methods to minimize volatilization.
(1) Hazardous wastes which contain suspended solids greater than or equal to 15% 
of the sample on a weight basis shall have the dry weight determination 
calculated using the method specified in Appendix I in sec.335.332 of this title 
(relating to Appendices I and II).
(2)  Aqueous based hazardous wastes which contain suspended solids less than 15% 
of the sample by weight basis and which contain a single liquid phase shall have 
the dry weight determination calculated using Standard Methods for the 
Examination of Water and Wastewater, 15th Edition; Method 209A; pages 92-93 or 
equivalent method in later editions.
(3) Organic based hazardous wastes which contain suspended solids less than 15% 
of the sample by weight and which contain a single liquid phase shall have the 
dry weight determination calculated using:
(A) 1981 Annual Book of ASTM Standards, Part 30; Method E203, pages 803-812 or 
equivalent method in later editions; or
(B) the method specified in Appendix II in sec.335.332 of this title (relating 
to Appendices I and II).
(4) Hazardous wastes which do not meet any of the criteria specified in 
paragraphs (1)-(3) of this subsection shall have the dry weight determination 
calculated using:
(A) the 1981 Annual Book of ASTM Standards, Part 23; Method D96, pages 64-81 or 
equivalent method in later editions; or
(B) the method specified in Appendix II in sec.335.332 of this title (relating 
to Appendices I and II); or
(C) the 1981 Annual Book of ASTM Standards, Part 23; Method D95, pages 59-63 or 
equivalent method in later editions. Method D96 determines the water and 
sediment content of the sample. The calculations shall be modified to determine 
only the water content.
(5) The method for calculating the dry weight shall be that method specified in 
Appendix I in sec.335.332 of this title (relating to Appendices I and II) or an 
alternate method selected by the generator pursuant to sec.335.327 of this title 
(relating to Alternate Methods of Dry Weight Determination), if the hazardous 
waste cannot be analyzed by one of the other required methods of this section 
due to interfering constituents. Documentation identifying the method of 
analysis and describing the interference shall be maintained by the generator.
(b) Hazardous wastes containing free liquids which are designated for disposal 
in a landfill and must be solidified prior to disposal shall have the dry weight 
determination made on the hazardous waste, prior to the addition of the 
solidification agent.
sec.335.327. Alternate Methods of Dry Weight Determination.
(a)  Generators may select other test methods for the purpose of calculating the 
dry weight of their hazardous waste where one of the methods provided in 
sec.335. 326 of this title (relating to Dry Weight Determination) is not 
applicable. Technical justification must be sent to the executive director, 
demonstrating that the proposed method will produce an accurate determination of 
the dry weight ratio of the waste unless the executive director has provided 
written approval for use of the alternate method. Use of an evaporation 
temperature above 75 degrees Celsius will be allowed only on demonstration that 
the waste stream contains appreciable volatile compounds that exhibit higher 
evaporation temperatures. Where practicable, results from the proposed test 
methods and the required method should be compared. Applicability of this item 
to such dry weight determinations is subject to review by the executive 
director.
(b)  Generators may elect to declare the total wet weight of the hazardous waste 
as the dry weight.
sec.335.328. Fees Payment.
(a) Generation and facility fees are payable each year for all Class I 
industrial solid waste and hazardous waste generators, permittees, and 
facilities. Fees must be paid by check, certified check, or money order payable 
to Texas Water Commission. Annual facility fees are payable by permittees, 
owners, or operators regardless of whether the facility is in actual operation. 
All annual generation and facility fees shall be due by a date to be established 
by the Texas Water Commission at the time payment is requested.
(b) Hazardous waste management fees are to be paid monthly by each operator of a 
hazardous waste storage, processing or disposal facility for wastes managed 
subject to the provisions of sec.335.325 of this title Texas Water Commission 
Industrial Solid Waste and Municipal Hazardous Waste (relating to Hazardous 
Waste Management Fee Assessment) in that month. Fees must be paid by check, 
certified check, or money order to Texas Water Commission and shall be due by 
the 25th day following the end of the month for which payment is due.
sec.335.329. Records and Reports.
(a) Generators are required to:
(1) keep records of all hazardous waste and industrial solid waste activities 
regarding the quantities generated, stored, processed and disposed on site or 
shipped off site for storage, processing or disposal in accordance with the 
requirements of sec.335.9 of this title (relating to Recordkeeping and Annual 
Reporting Procedures Applicable to Generators);
(2) keep records of the dry weight amount of each hazardous waste designated for 
disposal in an underground injection well;
(3) provide each operator of a hazardous waste underground injection well a 
certificate of computation of the dry weight of a hazardous waste to be 
disposed. For each off-site shipment, the dry weight amount of each hazardous 
waste to be disposed in an underground injection well is to be recorded in Item 
J of the Uniform Hazardous Waste Manifest as required under  s335.30 of this 
title (relating to Appendix I);
(4) submit the appropriate reports required under  s335.13(b) of this title 
(relating to Recordkeeping and Reporting Procedures Applicable to Generators 
Shipping Hazardous Waste or Class I Waste and Primary Exporters of Hazardous 
Waste) on forms furnished or approved by the executive director.
(b) Owners or operators of hazardous waste storage, processing or disposal 
facilities are required to:
(1) for on-site facilities, keep records of all hazardous waste and industrial 
solid waste activities regarding the quantities stored, processed and disposed 
on site or shipped off site for storage, processing or disposal in accordance 
with the requirements of sec.335.9 of this title (relating to Recordkeeping and 
Annual Reporting Procedures Applicable to Generators);
(2) for off-site facilities, submit the appropriate reports required under 
sec.335.15(2) of this title (relating to Recordkeeping and Reporting 
Requirements Applicable to Owners or Operators of Storage, Processing or 
Disposal Facilities);
(3) record the dry-weight amount of each hazardous waste disposed in an 
underground injection well at the facility;
(4) document the basis for the assessment of any applicable fee as determined 
under sec.335.325 of this title (relating to Hazardous Waste Management Fee 
Assessment), including any adjustment to or exemption from assessment; and
(5) submit a monthly summary of on-site hazardous waste management activities 
subject to the assessment of fees under sec.335.325 of this title (relating to 
Hazardous Waste Management Fee Assessment) on forms furnished or approved by the 
executive director. This summary report shall be due by the 25th day following 
the end of the month for which a report is made. An owner or operator required 
to comply with this subsection shall continue to prepare and submit monthly 
summaries, regardless of whether any storage, processing, or disposal was made 
during a particular month, by preparing and submitting a summary indicating that 
no hazardous waste was managed during that month.
(c) Records or reports required to be kept under this section shall be retained 
for a minimum of three years after the date the record or report is made.
(d) The periods of record retention required by this section are automatically 
extended during the course of any unresolved enforcement action regarding the 
regulated activity.
sec.335.330. Cancellation, Revocation, and Transfer.
(a)  Cancellation or revocation of a permit, or termination of interim status, 
whether by voluntary action on the part of the applicant or permittee or as a 
result of involuntary proceedings initiated by the commission, will not 
constitute grounds for refund, in whole or in part, of any fee paid by the 
permittee or applicant.
(b) Transfer of facility ownership will not entitle the transferring permittee, 
applicant, or generator to a refund, in whole or in part of any fee already paid 
by the permittee, applicant, or generator. The transferring permittee, applicant 
or generator remains liable for any unpaid portion of fee assessed which accrued 
during his ownership. Any permittee, applicant, or generator to whom facility 
ownership or a permit is transferred shall be liable for any of the fees 
assessed after date of transfer. Payment by either the transferring permittee, 
applicant, or generator, or by the permittee, applicant, or generator to whom 
the ownership was transferred shall constitute full payment for any fees 
assessed.
(c) A generator who ceases generation of industrial solid waste or hazardous 
waste due to a change of process or closing of operations shall not be eligible 
for a refund, in whole or in part, of any fee paid.
sec.335.331. Failure to Make Payment or Report.
(a) Failure to make payment in accordance with this subchapter constitutes a 
violation subject to enforcement pursuant to the Health and Safety Code, 
sec.361.137 and sec.361.252.
(b) Generators and owners or operators of a facility failing to make payment of 
the fees imposed under the Health and Safety Code, Chapter 361 shall be assessed 
interest at an annual rate of 15% of the amount of the fee due accruing from the 
date on which the fee is due.
(c) Operators of hazardous waste management facilities submitting late reports 
concerning the management of hazardous waste under the Health and Safety Code, 
sec.361.136 are subject to a civil penalty of $100 for each day the violation 
continues.
(d) Any interest or penalties collected by the commission shall be deposited in 
the appropriate fund.
sec.335.332. Appendices I and II. The following appendices will be used for the 
purposes of this subchapter. (Appendix I-Dry Weight Determination for Solids 
Based Hazardous Waste; Appendix II-Dry Weight Determination for Oil and Organic 
Based Hazardous Waste).

[graphic]
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on January 8, 1992.
TRD-9200247
Claire Arenson
Chief Hearings Examiner
Texas Water Commission
Earliest possible date of adoption: February 14, 1992
For further information, please call: (512) 463-8069
       
Subchapter J. Hazardous Waste Generation, Facility and Disposal Fees System
31 TAC sec.sec.335.325-335.333
(Editor's note: The text of the following sections proposed for repeal will not 
be published. The sections may be examined in the offices of the Texas Water 
Commission or in the Texas Register office, Room 245, James Earl Rudder 
Building, 1019 Brazos Street, Austin.)
The sections are repealed under the Health and Safety Code, Chapter 361, 
Subchapter D as amended by House Bill 1986, Acts of the 72nd Legislature, 1991, 
which authorizes the commission to establish an industrial solid waste and 
hazardous waste fee program and to implement fee assessments for the commercial 
and noncommercial management of hazardous wastes. Senate Bill 2, Article 1.100, 
Acts of the 72nd Legislature, First Called Session, 1991, authorizes the 
commission to adopt rules on an emergency basis, to be effective September 1, 
1991, implementing any changes in fee revenue authority provided by legislation 
enacted by the 72nd Legislature.
sec.335.325. Disposal Fee Assessment.
sec.335.326. Commercial Fee Assessment.
sec.335.327. Dry Weight Determination.
sec.335.328. Alternate Methods of Dry Weight Determination.
sec.335.329. Fees Payment.
sec.335.330. Records and Reports.
sec.335.331. Cancellation, Revocation and Transfer.
sec.335.332. Failure to Make Payment or Report.
sec.335.333. Appendices I and II.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on January 8, 1992.
TRD-9200246
Claire Arenson
Chief, Hearings Examiner
Texas Water Commission
Earliest possible date of adoption: February 14, 1992
For further information, please call: (512) 463-8069
       
TITLE 40. SOCIAL SERVICES AND ASSISTANCE
Part I. Texas Department of Human Services
Chapter 48. Community Care for the Aged and Disabled
Program for All-Inclusive Care for the Elderly (PACE)
40 TAC sec.48.2811
The Texas Department of Human Services (DHS) proposes new sec.48.2811, 
concerning reimbursement methodology for the Program for All-Inclusive Care for 
the Elderly (PACE), in its Community Care for the Aged and Disabled chapter. The 
purpose of the new section is to establish the reimbursement methodology to be 
used to set the rate for the Bienvivir Waiver program. Bienvivir Senior Health 
Services will provide comprehensive health care services to frail elderly 
persons who are eligible for institutional care.
Burton F. Raiford, chief financial officer, has determined that for the first 
five-year period the proposed section will be in effect there will be fiscal 
implications for state government as a result of enforcing or administering the 
section. The effect on state government for the first five-year period the 
section will be in effect is an estimated additional cost of $13,766 in fiscal 
year (FY) 1992; $29,900 in FY 1993; $40,252 in FY 1994; $46,952 in FY 1995; and 
$48,920 in FY 1996. There will be no effect on local government as a result of 
enforcing or administering the section.
Mr. Raiford also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be that the public will have a clear understanding of the Beinvivir 
Waiver Program reimbursement methodology. There will be no effect on small 
businesses. There is no anticipated economic cost to persons who are required to 
comply with the proposed section.
Questions about the content of this proposal may be directed to Kathy Hall at 
(512) 450-3702 in DHS's Provider Reimbursement Section. Comments on the proposal 
may be submitted to Nancy Murphy, Policy and Document Support-366, Texas 
Department of Human Services E-503, P.O. Box 149030, Austin, Texas 78714-9030, 
within 30 days of publication in the Texas Register .
The new section is proposed under the Human Resources Code, Title 2, Chapters 22 
and 32, which authorizes the department to administer public and medical 
assistance programs.
sec.48.2811. Reimbursement Methodology for Program for All-Inclusive Care for 
the Elderly (PACE).
(a) General specifications. The Texas Department of Human Services (DHS) 
determines the reimbursement rate for the provider, Bienvivir, under a three-
year, Medicaid 1115 waiver program to provide care to recipients. The effective 
date of this reimbursement methodology is the same date as implementation of the 
waiver, contingent upon Health Care Financing Administration (HCFA) approval of 
the waiver. If the waiver is extended through a fourth year, this reimbursement 
methodology will continue to be in effect through the end of that year. 
Provisions of year three will be in effect for year four, unless otherwise 
noted.
(b) Frequency of rate determination. DHS determines rates for the provider at 
least annually. Rates are revised each time the rates for the Nursing Facility 
Program are revised. Rates may be determined more often if the DHS board 
determines it to be necessary.
(c) Rate determination. To determine the cost savings to the Nursing Facility 
Program, the average cost of a nursing home recipient is calculated, including 
the cost of nursing home care; support services (Hepatitis B, Goal Directed 
Therapy, and emergency dental); prescribed drugs; and in years two and three of 
the waiver, acute care services. The calculated cost of care for an average 
nursing home recipient is multiplied by a factor of 0.95 to ensure a savings to 
the state for implementing this alternative to nursing home care.
(1) Year one of the waiver. The following rate is calculated on a per diem 
basis:
(A) the average nursing facility rates weighted by the case mix Texas Index for 
Level of Effort (TILE) distribution for El Paso county clients;
(B) plus the cost of support services (goal-directed therapy, Hepatitis B, and 
emergency dental);
(C) minus the average statewide applied income;
(D) plus the average cost of prescribed drugs for nursing home recipients;
(E) the resulting calculation from applying subparagraphs (A)-(D) of this 
paragraph is multiplied by 0.95;
(F) the resulting calculation from applying subparagraph (E) of this paragraph 
is multiplied by the number of days in the year, and the product of the 
multiplication is divided by 12 months to convert the per diem amount from 
subparagraph (E) of this paragraph to a monthly rate.
(2) Years two and three of the waiver. The following rate is calculated on a per 
diem basis:
(A) the result of the calculation from paragraphs (1)(A)-(D) of this subsection;
(B) plus the DHS acute care premium, less the fee for administrative claims 
processing, for nursing home recipients;
(C) the resulting calculation from applying subparagraphs (A) and (B) of this 
paragraph is multiplied by 0.95;
(D) the resulting calculation from applying subparagraph (C) of this paragraph 
is multiplied by the number of days in the year, and the resulting product is 
divided by 12 months to convert the per diem amount from that determined by 
applying subparagraph (C) of this paragraph to a monthly rate.
(d) Risk sharing. DHS participates in a risk sharing mechanism of waiver 
participants designed to distribute risk between the users of the program. The 
users of the program are defined as Medicare, DHS and the provider. The 
mechanism is as follows.
(1)  DHS and HCFA determine whether the provider has incurred savings or losses 
by comparing the provider's incurred costs of providing covered services to 
waiver participants from the cost report to the provider's revenues for waiver 
participants. Incurred costs are the direct and indirect costs that are 
reasonable and necessary for efficient delivery of health services by the 
provider as determined by applying the principles of reimbursement as specified 
in 42 Code of Federal Regulation 417.536-417.550.
(2) If savings result, the provider must deposit them in an interest-bearing 
asset account called a "risk reserve." The purpose of the risk reserve is to 
accumulate savings from the provider's operation during the three years of the 
waiver. Any allowable loss must first be paid from the risk reserve regardless 
of the waiver period or fiscal year.
(3) The provider may also make voluntary contributions to the risk reserve, but 
the department does not recognize the charge posted to the account from such 
contributions as an incurred cost.
(4) After determination of any final liability of the provider by DHS and HCFA, 
any savings accumulated in the risk reserve remains an asset of the provider 
should they, voluntarily or involuntarily, cease participation during the three 
years of the waiver, or at the end of the third year of the waiver.
(5) If a loss occurs, the following formula must be used to determine the amount 
of loss that is the responsibility of the provider, Medicare, and DHS in the 
risk sharing arrangement.
(A) Determining allowable loss. The following calculations are used to determine 
allowable loss.
(i) Service revenue. Service revenue consists of revenue received for the 
provision of waiver services. Revenue sources include Medicare, Medicaid, and 
private pay including insurance.
(ii) Administrative expenses. Administrative expenses are expenses incurred in 
the operation of the waiver which are not related to the direct provision of 
waiver services. Administrative and general cost guidelines are found in 42 Code 
of Federal Regulation 417.564.
(iii)  Administrative expense caps. Allowable incurred administrative expenses 
are capped as a percentage of certain service revenues. The percentage of the 
cap varies based on the waiver year. Administrative expenses are capped at 25% 
in waiver year one, 20% in waiver year two, and 15% in waiver year three.
(iv) Service expenses. Service expenses are expenses incurred in the operation 
of the waiver which are related to the direct provision of waiver services. 
Service expenses are reduced by the amount of non-service revenue the provider 
had available for use in the program for the time period. Non-service revenue 
includes, but is not limited to, revenue from foundations, other grants, and 
interest income.
(v) Allowable losses. Allowable losses are determined if a negative amount 
results by subtracting the total allowable expenses as calculated by applying 
clauses (iii) and (iv) of this subparagraph from the service revenue as 
described in clause (i) of this subparagraph.
(vi) Savings. If a positive amount results from the calculation in clause (v) of 
this subparagraph, that amount is determined to be a savings and must be 
deposited by the provider in a risk reserve account, as specified in subsection 
(d)(2) of this section.
(B) Reduction of allowable loss. If the provider incurs a loss, the allowable 
loss, calculated in subparagraph (A)(v) of this paragraph, is reduced by any 
savings in the risk reserve and the percentage of private pay, including 
insurance, revenue in relation to total service revenue. The balance is the 
amount eligible for risk sharing.
(C)  Determination of participation amounts. Any remaining allowable loss after 
applying subparagraph (B) of this paragraph is shared by the provider, Medicare, 
and DHS. During year one of the waiver, DHS assumes the loss not assigned to the 
provider. During years two and three, DHS and Medicare share in the loss not 
assigned to the provider. The loss is allocated pro rata, based on the revenues 
accrued by the provider from Medicare and DHS for the specified period. The loss 
sharing participation formula consists of a series of tiers within each waiver 
year each tier specifying an assignment of responsibility for losses at that 
tier. Calculation at each tier results in an amount of allowable loss covered in 
that tier. Any loss not covered in that tier is carried forward to the next 
tier. The loss sharing is calculated as follows for each year of the waiver:
(i)  Waiver year one.
(I) Tier 1. This tier is equal to 0.5% of revenues. The provider participates in 
100% and DHS participates in zero percent of the loss.
(II) Tier 2. This tier is equal to 5.0% of revenue. The provider participates in 
10% and DHS participates in 90% of the loss.
(III)  Tier 3. This tier is equal to 10% of revenues. The provider participates 
in 5.0% and DHS participates in 95% of the loss.
(IV) Tier 4. This tier is equal to 10% of revenues. The provider participates in 
zero percent and DHS participates in 100% of the loss.
(V) Tier 5. This tier is equal to an amount greater than 25.5% of revenues. The 
provider participates in 100% and DHS in zero percent of loss.
(ii) Waiver year two. The percent of revenue in each tier is equal to the 
percent of revenue in each corresponding tier in waiver year one.
(I) Tier 1. The provider participates in 100% and DHS and Medicare participate 
in zero percent of the loss.
(II) Tier 2. The provider participates in 20% and DHS and Medicare participate 
in 80% of the loss.
(III) Tier 3. The provider participates in 10% and DHS and Medicare participate 
in 90% of the loss.
(IV) Tier 4. The provider participates in zero percent and DHS and Medicare 
participate in 100% of the loss.
(V) Tier 5. The provider participates in 100% and DHS and Medicare participate 
in zero percent of the loss.
(iii) Waiver year three.
(I) Tier 1. This tier is equal to 0.5% of revenues. The provider participates in 
100% and DHS and Medicare participate in zero percent of the loss.
(II) Tier 2. This tier is equal to 5.0% of revenues. The provider participates 
in 20% and DHS and Medicare participate in 80% of the loss.
(III) Tier 3. This tier is equal to 10% of revenues. The provider participates 
in 15% and DHS and Medicare participate in 85% of the loss.
(IV) Tier 4. This tier is equal to 5.0% of revenues. The provider participates 
in 10% and DHS and Medicare participate in 90% of loss.
(V)  Tier 5. This tier is equal to an amount greater than 20.5% of revenues. The 
provider participates in 100% and DHS and Medicare participate in zero percent 
of the loss.
(iv) Waiver year four (Contingent on waiver extension).
(I) Tier 1. This tier is equal to 0.5% of revenues. The provider participates in 
100% and DHS and Medicare participate in zero percent of the loss.
(II) Tier 2. This tier is equal to 5.0% of revenues. The provider participates 
in 40% and DHS and Medicare participate in 60% of the loss.
(III) Tier 3. This tier is equal to 10% of revenues. The provider participates 
in 20% and DHS and Medicare participate in 80% of the loss.
(IV) Tier 4. This tier is equal to an amount greater than 15.5% of revenues. The 
provider is responsible for any loss in this tier.
(D)  Loss reconciliation. DHS conducts quarterly and annual reconciliations of 
losses.
(i) Quarterly interim loss reimbursement. After the receipt of the quarterly 
cost report, DHS makes an interim determination of the estimated amount of risk 
sharing participation amount to be reimbursed by DHS to the provider. DHS may 
make interim payments to the provider for losses during the waiver year.
(ii) Annual reconciliation. After receipt and acceptance of the annual waiver 
year cost report, DHS will determine the amount of reconciliation required to be 
paid by DHS or the provider as determined from the amounts calculated on the 
quarterly interim loss reimbursement. The reconciliation amount is the 
difference between the quarterly interim loss reimbursement amounts and the 
calculated annual reconciliation.
(iii)  Any amount due to DHS by the provider, as calculated in the annual 
reconciliation in paragraph (2) of this subsection, must be paid in full to DHS 
within 90 days from receipt of notice of the finding.
(e) Reporting of cost. The provider must submit a cumulative quarterly cost 
report, and an independently certified annual cost report, both in the form and 
detail prescribed by HCFA. DHS reserves the right to require submittal of 
financial and statistical information on a cost report or in a survey format 
designated by DHS.
(1) Cost report due date. The provider must submit the quarterly cost reports to 
DHS no later than 45 days after the end of each fiscal quarter. The annual cost 
report must be submitted to DHS no later than 180 days after the end of the 
fiscal year.
(2) Reporting periods. The provider must prepare the quarterly cost report to 
reflect the activities of each quarter of the provider's fiscal year, and 
prepare the full-year cost report covering the provider's entire fiscal year. 
Cost reports may be required for other periods at the discretion of DHS. Should 
the provider agency terminate its contract (provider agreement) with the 
department, a cost report must be submitted for that period beginning with the 
first day of the provider's fiscal year and ending with the effective date of 
termination of its contract.
(3)  Allowable and unallowable costs. The provider must complete the cost report 
according to Medicare guidelines regarding allowable and unallowable costs as 
specified in 42 Code of Federal Regulation 417.536-417.550, and the chart of 
accounts as specified by HCFA.
(4) Failure to file an acceptable cost report. If the provider fails to file a 
cost report or cost report supplement according to all applicable rules and 
instructions, the department may withhold all provider payments until the 
provider agency submits an acceptable cost report.
(5) Accounting requirements. The provider must ensure that financial and 
statistical information submitted in cost reports is based upon the accrual 
method of accounting. The provider agency's treatment of any financial or 
statistical item must reflect the application of the generally accepted 
accounting principles (GAAP) approved by the American Institute of Certified 
Public Accountants.
(6) Allocation method. If allocation of cost is necessary, the provider must use 
reasonable methods of allocation. DHS adjusts allocated costs if the department 
considers the allocation method to be unreasonable. The provider agency must 
retain work papers supporting allocations.
(7) Cost report certification. The provider must certify in the format specified 
by HCFA the accuracy of the cost report submitted to DHS. The provider agency 
may be liable for civil and/or criminal penalties in the case of misrepresented 
or falsified information.
(8) Cost report supplements. The department may at times require additional 
financial and statistical information other than the information contained in 
the cost report.
(9)  Review of the cost report. DHS staff review the cost report to ensure that 
all financial and statistical information submitted conforms to all applicable 
rules and instructions. The review of the cost report includes a desk audit. DHS 
reviews cost reports according to the criteria in sec.24.201 of this title 
(relating to Basic Objectives and Criteria for Desk Review of Cost Reports). If 
the provider agency fails to complete cost reports according to instructions or 
rules, the department returns the cost reports to the provider agency for proper 
completion. The department may require information other than that contained in 
the cost report to substantiate reported information.
(10) On-site audits. The department may perform on-site audits of the provider 
agencies that participate in the program. DHS determines the frequency and 
nature of audits but ensures that they are not less than that required by 
federal regulations related to the administration of the program.
(11) Notification of exclusions and adjustments. DHS notifies the provider of 
exclusions and adjustments to reported expenses made during desk reviews and on-
site audits of cost reports as specified in sec.24.401 of this title (relating 
to Notification).
(12) Reviews of cost report disallowances. A provider who disagrees with the 
determination of risk sharing losses and savings may request an informal review 
and, when necessary, an administrative hearing as specified in sec.24.601 of 
this title (relating to Reviews and Administrative Hearings).
(13) Access to records. The provider and its designated agent(s) must allow 
access to all records necessary to verify information submitted to DHS on cost 
reports. This requirement includes records pertaining to related-party 
transactions and other business activities engaged in by the provider agency. If 
the provider agency does not allow inspection of pertinent records within 30 
days following written notice from DHS, a hold is placed on vendor payments 
until access to the records is allowed. If the provider agency continues to deny 
access to records, DHS may cancel the provider agency's contract.
(14)  Record-keeping requirements. The provider agency must maintain records 
according to the requirements of 42 Code of Federal Regulation 417.480. Records 
must be retained for five years from the end of the fiscal period to which they 
apply.
(15) Failure to maintain adequate records. If the provider agency fails to 
maintain adequate records to support the financial and statistical information 
reported in cost reports, the department allows 90 days for the provider agency 
to bring record-keeping into compliance. If the provider agency fails to correct 
deficiencies within 90 days from the date of notification of the deficiency, the 
department may cancel the provider agency's contract for services.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on January 8, 1992.
TRD-9200235
Nancy Murphy
Agency liaison, Policy and Document Support
Texas Department of Human Services
Proposed date of adoption: March 1, 1992
For further information, please call: (512) 450-3765