Adopted Sections An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 1. ADMINISTRATION Part V. General Services Commission Chapter 113. Central Purchasing Division Purchasing 1 TAC sec.sec.113.2, 113,13, 113.16 The General Services Commission adopts amendments to sec.113.2, sec.113.13, and new sec.113.16, concerning definitions and central purchasing, without changes to the proposed text as published in the February 7, 1992, issue of the Texas Register (17 TexReg 981). The amendment will allow for a more efficient reporting system of school bus purchases, enhanced statutory compliance, and improved efficiency in acquiring unique, necessary goods or services. Section 113.13 deletes a requirement for reporting school bus purchase information to the Texas Education Agency, and new sec.113.16 provides guidelines for processing unsolicited proposals. No comments were received regarding adoption of the amendments. The amendments are adopted under Texas Civil Statutes, Article 601b, sec.3.01, which provide the General Services Commission with the authority to promulgate rules to accomplish the purpose of Article 3. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205819 Judith M. Porras General Counsel General Services Commission Effective date: May 18, 1992 Proposal publication date: February 7, 1992 For further information, please call: (512) 463-3446 1 TAC sec.113.73 The General Services Commission adopts an amendment to sec.113.73, which allows state agencies to maintain all files associated with the delegation of authority to sell surplus or salvage property, without changes to the proposed text as published in the February 7, 1992, issue of the Texas Register (17 TexReg 981). The amendment will allow for a reduction in duplication of file maintenance resulting in a more efficient and economical process. The section allows state agencies to maintain files associated with their disposition of surplus or salvage property under delegated authority. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 601b, sec.3.01, which provide the General Services Commission with the authority to promulgate rules to accomplish the purpose of Article 3. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205820 Judith M. Porras General Counsel General Services Commission Effective date: May 18, 1992 Proposal publication date: February 7, 1992 For further information, please call: (512) 463-3446 Chapter 115. Building and Property Services Division State Leased Property 1 TAC sec.115.35, sec.115.36 The General Services Commission adopts amendments to sec.115.35 and sec.115. 36, concerning evaluation of competitive bids for lease space and competitive sealed proposals for lease space, without changes to the proposed text as published in the March 10, 1992, issue of the Texas Register (17 TexReg 1797). The sections are adopted to clarify bid evaluation procedures and to improve the efficiency in obtaining space leases. The amendment to sec.115.35 sets forth the method for evaluation of bids in regard to cost, including the evaluation of escalation factors in such bids. The amendment to sec.115.36 sets forth circumstances and procedures for competitive sealed proposals and competitive negotiation for lease space. No comments were received regarding adoption of the amendments. The amendments are adopted under Texas Civil Statutes, Article 601b, sec.5.15, which authorizes the General Services Commission to promulgate rules to necessary to accomplish the purposes of Article 5. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205818 Judith M. Porras General Counsel General Services Commission Effective date: May 18, 1992 Proposal publication date: March 10, 1992 For further information, please call: (512) 463-3446 Chapter 121. Telecommunications Services Division Telecommunications Services 1 TAC sec.121.6 The General Services Commission adopts the repeal of sec.121.6, concerning usage of the statewide telecommunications system and requests for additional services on the system, without changes to the proposed text as published in the February 7, 1992, issue of the Texas Register (17 TexReg 982). Repeal of this section as is will improve efficiency in implementing the mandatory use of TEX-AN by state agencies. The section requires the use of TEX-AN except when granted a waiver by DIR and TSD. The section also sets forth procedures for requesting waivers and the criteria for evaluating the requests. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 601b, Article 10, which provide the General Services Commission with the authority to promulgate rules to accomplish the purpose of Article 10. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205815 Judith M. Porras General Counsel General Services Commission Effective date: May 18, 1992 Proposal publication date: February 7, 1992 For further information, please call: (512) 463-3446 1 TAC sec.121.6 The General Services Commission adopts new sec.121.6, which clarifies and expands the procedures state agencies as defined in Texas Civil Statutes, Article 601b, sec.1.02(2) must use in order to obtain a waiver from mandatory use of the state telecommunications system (TEX-AN). The section also reorganizes and clarifies the remaining subsections of sec.121.6 without making substantive changes. The section is adopted without changes to the proposed text as published in the February 7, 1992, issue of the Texas Register (17 TexReg 982). The section is necessary to implement the establishment of orderly procedures by which state agencies subject to the mandatory use of TEX-AN may obtain a waiver from the Telecommunications Services Division of the General Services Commission. The section requires the use of TEX-AN except when granted a waiver by DIR and TSD. The section also sets forth procedures for requesting waivers and the criteria for evaluating the requests. No comments were received regarding adoption of the new section. The new section is adopted under Texas Civil Statutes, Article 601b, Article 10, which provide the General Services Commission with the authority to promulgate rules to accomplish the purpose of Article 10. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205816 Judith M. Porras General Counsel General Services Commission Effective date: May 18, 1992 Proposal publication date: February 7, 1992 For further information, please call: (512) 463-3446 1 TAC sec.121.11 The General Services Commission adopts new sec.121.11, concerning acquisition, installation, and maintenance of terminal telephone equipment for the Capitol Complex Telephone System (CCTS), without changes to the proposed text as published in the February 7, 1992, issue of the Texas Register (17 TexReg 984). The section will establish orderly procedures by which the CCTS user community can obtain and maintain terminal telephone equipment. The section defines new equipment and refurbished equipment and offers agencies a choice of selecting new or refurbished equipment. No comments were received regarding adoption of the new section. The new section is adopted under Texas Civil Statutes, Article 601b, Article 10, which provide the General Services Commission with the authority to promulgate rules to accomplish the purpose of Article 10. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205817 Judith M. Porras General Counsel General Services Commission Effective date: May 18, 1992 Proposal publication date: February 7, 1992 For further information, please call: (512) 463-3446 TITLE 10. COMMUNITY DEVELOPMENT Part I. Texas Department of Housing and Community Affairs Chapter 9. Texas Community Development Program Subchapter A. Allocation of Program Funds 10 TAC sec.9.9 The Texas Department of Housing and Community Affairs (TDHCA) adopts new sec.9.9, concerning the allocation of program funds under the Texas Community Development Program, without changes to the proposed text as published in the February 25, 1992, issue of the Texas Register (17 TexReg 1494). The new section establishes the application requirements, selection procedures, and scoring criteria for the Colonia fund under the Texas Community Development Program. The new section contains the procedures applicable to the second 1991 competition. No comments were received regarding adoption of the new section. The new section is adopted under Texas Civil Statutes, Article 4413(501), sec.2.07, which provides TDHCA with the authority to allocate community development block grant nonentitlement area funds to eligible counties and municipalities according to department rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 28, 1992. TRD-9205904 Anne O. Paddock Assistant General Counsel Texas Department of Housing Community Affairs Effective date: May 20, 1992 Proposal publication date: February 25, 1992 For further information, please call: (512) 320-9539 TITLE 16. ECONOMIC REGULATION Part I. Railroad Commission of Texas Chapter 3. Oil and Gas Division Conservation Rules and Regulations The Railroad Commission of Texas adopts the repeal of 16 T.A.C. 3.30 and amendments to 16 T.A.C. sec. 3.31, 3.34, and 3.45 regarding gas nominations required, gas well allowables, gas to be produced and purchased ratably, and gas-oil ratio. Sections 3.31, 3.34, and 3.49 are adopted with changes to the proposed text as published in the February 11, 1992, issue of the Texas Register (17 TexReg 1163). Section 3.30 is adopted without changes and will not be republished. The Railroad Commission has made changes to sec.sec.3.31(c)-(k), 3.34(f) and (g), and 3.49(b) in response to comments received. These changes to the proposal eliminate the decline factor, replace necessary adjustments with operator forecasts, simplify the process of determining monthly lawful market demand, more accurately determine well capability, allow automatic assignment of special allowables, eliminate the regular @, and allow limited wells to accrue underproduction. The first change was in sec.3.31 and sec.3.34 to change "commission representative" to "commission designee." The second change was in sec. 3.31(d)(1) to change the last sentence from "The lawful market demand is the first prior year's allowable month's production multiplied by the calculated decline factor plus inactive well production plus necessary adjustments." to "The lawful reservoir market demand for prorated reservoirs shall be equal to the adjusted reservoir market demand forecast adjusted by a forecast correction adjustment, a supplemental change adjustment, and a commission adjustment." Both the published and adopted versions base the market demand determination on prior production and both eliminate purchaser nominations. However, the adopted version will allow operators to file optional forecasts instead of the proposed requests for necessary adjustments which comments indicated were burdensome. The third change was to combine and modify published sec.3.31(d)(1)(B) and (D) into adopted sec.3.31(d)(1)(C). The fourth change was to delete proposed sec.3.31(d)(1)(C) and (d)(3) to eliminate the "calculated decline factor. The fifth change was to clarify and combine published sec.3.31(d)(1)(E) and (d) (2)(D)-(E) concerning "commission adjustments" into adopted sec.3.31(d)(1)(G). The sixth change was to delete published sec.3.31(d)(1)(E), (d)(2)(A)-(C), and (d)(2)(E) concerning operator requested adjustments, and replace them with adopted sec.3.31(d)(1)(B), (d)(l)(D)-(F), and (d)(2). This change replaces the "necessary adjustment" provisions with the much simpler operator forecast. The seventh change was in sec.3.31(e). Both the published and adopted versions eliminate the "U", "L", and "0*" allowable codes which adjusted allowables downward. The published version limited a well's allowable to the latest deliverability test on file. The adopted version will limit a well's allowable to capability unless the operator files a substitute capability determination. Also, the adopted version eliminates the "regular @" allowable code in sec.3.31(i) (4)(C). Issues regarding the "immediate @" are discussed later in this preamble. The eighth change was in sec.3.31(f) and sec.3.34(f)(1) to add the word "test" after "deliverability." This change merely clarifies that deliverability is referring to "deliverability test" not "capability." Also in sec.3.31(f) changes were made to clarify that the reservoir factor and initial allowable allocation will be by deliverability, but allowables will be limited by capability. The ninth change was in sec.3.31(g) for clarification to add definitions for "prorated field" and "non-prorated field". The current rules do not define prorated and non-prorated fields although those terms are used in other provisions. Also, the definition of "limited well" was changed by adding that a limited well is a nonprorated well "in a prorated field (other than a special or administrative special allowable well)" and by changing the end of the definition from "as determined by the most recent deliverability test on file with the commission" to "as determined by subsection (e) of this section." A limited well will be limited on the basis of its capability, not deliverability. The 10th change was to add the definition of "maximum allowable" as sec.3. 31(g)(9). "Maximum allowable" is used in several places in the current rules relating to supplementation of nonprorated allowables. This change consolidates the term's applicability to various well types. Section 3.31(h)(2) and (4) and sec.3.49 were revised to utilize the defined term "maximum allowable." The 11th change was to add a provision in sec.3.31(h)(1) and (i)(4) to allow a limited well to accumulate underage. The 12th change was to delete sec.3.31(h)(3) in response to the change that would allow limited wells to accrue underproduction. This subsection addressed reinstatement of limited well underproduction when those wells shifted from prorated to nonprorated status. The 13th change was in sec.3.31(h)(4) and sec.3.49(b)(3) for clarification, providing for the adjustment of allowables for certain non-prorated wells to capability instead of by "deliverability test." The 14th change was in sec.3.31(j)(1)(A) and (3)(A) to clarify that deliverability tests will be used to determine when the allocation formula will be suspended. The 15th change was in sec.3.31(k). The adopted version will expedite the process for administrative special allowable status by automatically setting a well to special allowable status if its capability drops below 100 mcf/day and will also give the operator the opportunity to request that the automatic adjustment not apply to its well. The last change was in sec.3.34 to correct references to sec.3.31. These amendments are being adopted to reform the current gas prorationing system administered by the commission under state law. This reform effort was initiated in 1983 in response to criticism regarding the fairness and complexity of the current system. The reform efforts have continued since that time and seven proposals have been published in the Texas Register. Additionally, "Blue Ribbon Committees" were formed in 1983, 1986, and 1988. These amendments are based on the expertise of the commission and the cumulative knowledge the commission has obtained in part from the comments to and study of all of the proposals. Changes to the published version of this proposal are substantially, if not all, in response to comments received on this proposal. The commission held hearings for this docket on October 9 and 10, 1991 and February 26, 1992. These dockets have an official record containing 495 pages of transcript, over 268 appearance slips, over 1,000 pages of written comments, and 84 oral comments. Changes to the published version were presented to the commission at its regular meeting on March 30, 1992. At that time, the commission directed the staff to informally circulate the amended version to the commission's rulemaking notice list and to all persons expressing an interest in this rulemaking. Also, the commission directed the staff to hold a public question and answer meeting for interested persons. The revised version was circulated and a meeting was held. Over 50 persons attended this meeting, which lasted approximately five hours. Subsequently, 18 persons filed written comments on the changes. These written comments contain over 220 pages of text, graphs, and exhibits. The primary goals of these amendments are simplification of the present system by removal of complex mechanisms involving alphabet allowables, increased protection of correlative rights in a changing marketplace, more accurate determination of lawful market demand and a more accurate determination of well capability. The ancillary result of achieving these goals is better protection of correlative rights and statutory compliance. Additionally, the commission has strived to achieve these goals while making the system simpler. These amendments change the way the commission determines the lawful reservoir market demand and the framework for the allocation of the reservoir allowable to the wells in the reservoir; eliminate the requirement of filing nominations; establish a procedure for determining lawful market demand for each reservoir based on prior production and other relevant information; establish an enhanced well capability determination routine; eliminate the "U", "L", "@" and "O*" allowable routines; and establish an allowable determination routine for nonprorated and associated wells. The following is an explanation of the effect of these rules as adopted: The rules as published and adopted will eliminate purchaser nominations as the starting point for determining the lawful reservoir market demand. Commission records show that purchaser nominations frequently substantially exceed production. Many purchasers do not even participate in the nominations process. This rulemaking adopts the repeal of sec.3.30, which primarily contains provisions relating to the filing of purchaser nominations. Section 3.30 also contained provisions that related to the commission's ratable purchasing and production requirements in sec.3.34. These provisions have been moved into sec.3. 34. The amendments to sec.3.34 are not intended to effect any substantive changes. Reservoir market demand, for prorated fields only, will be initially determined on the basis of prior production and optional operator forecasts. The commission will generate a market demand forecast for each prorated and limited well that is equal to its production during the same month last year and for special or administrative special allowable wells that is equal to the well's production during the most recently reported production month. This will be totaled by operator in the reservoir. For example, if the commission is determining the allowable for September 1992 and the operator's two wells produced 10,000 and 5,000 mcf respectively during September 1991, the commission will generate a September 1992 "operator reservoir market demand forecast" of 15, 000 mcf for the operator. However, operators can file their own "optional operator forecast" for their wells in the reservoir. The forecast cannot exceed the total capability of their wells or be less than zero. Prior production in the same month last year is a good indicator of the current market demand. The process of generating market demand forecasts on the basis of prior production should eliminate a significant number of optional operator forecast filings because operators will only need to file a forecast when their conditions have changed. Moreover, prior production provides a reasonable estimate if the operator does not file a forecast. Both the proposed and adopted versions shifted the source of market information from the purchasers to the producers. Producers are more likely to know the market demand for their gas production because the nature of the gas pipeline industry has changed significantly in recent years. The majority of all produced gas is now transported by pipelines as a transporter rather than as a merchant. The forecasts will be subject to four adjustments: a capability adjustment, a reservoir forecast correction adjustment, a supplemental change adjustment, and a commission adjustment by reservoir. The "operator reservoir market demand forecasts" will be adjusted in a manner similar to the way the commission currently works with the purchaser nominations in the "A-Sheet." First, each "operator reservoir market demand forecast" will be adjusted to ensure that the forecasts (both those generated by the commission and those filed by the operators) do not exceed the total capability of the operator's wells. The sum of the forecasts for operators in the field that have been adjusted to capability is the "adjusted reservoir market demand forecast." This will be subject to an adjustment similar to the current adjustment reflected in columns 2, 4, and 5 of the A-Sheet. This "forecast correction adjustment" is the difference between the reservoir production and the "adjusted reservoir market demand forecast" adjusted by the "supplemental change adjustment" and the "commission adjustment" three months ago. This adjustment keeps reservoir forecasts in balance with production and eliminates most problems associated with under or over forecasting. The supplemental change adjustment will be used for the same purposes as column 3 on the current A-Sheet ("Total Supplemental Changes-3rd Month Previous") . Examples of such adjustments include reservoir allowable adjustment for the upward revision of allowables to cover overproduction from a nonprorated well, a change of well or well test status during a prior month, or implementing the provisions of a final order that call for the modification of field or well production status. These adjustments are ministerial in nature. The adjustment calculated in columns 6, 7, and 8 of the current A-Sheet, which put limited well underage back into the reservoir, will be eliminated. Additionally, the extra adjustment (column 10) will be eliminated. The ability of the commission to make further adjustments to the reservoir market demand determination with a "commission adjustment" is based on the principle that the commission is not bound by the mathematical total of the producer forecasts for a reservoir. If relevant facts indicate the initial market demand determination for a reservoir is incorrect, the commission may make an adjustment to correct the inaccuracy. Finally, the commission may reject or modify an optional operator forecast if the forecasts are consistently inaccurate or being used to manipulate the allocation of gas rather than to determine the correct market demand. For individual well allowable determinations, these amendments will eliminate all of the "alphabet allowables." The "U", "L", "0*", and "Regular @" will be replaced by an enhanced capability determination routine. A well's capability will be determined as the lesser of the G-10 deliverability or the highest monthly production during the last six months. Alternatively, an operator may submit a "substitute capability determination" that has been determined by a registered professional engineer based on a well test or other acceptable information using generally accepted engineering practices or by an independent tester on the basis of a well test. The substitute capability may be used for a six month period, unless it is rejected by the commission for good cause. This capability determination routine will do a better job than the current system of addressing concerns that allowables are assigned to wells that are not capable of producing the allowable. Because the enhanced capability routine is so stringent, wells limited by their capability will be allowed to accumulate underage. Allowables for wells in one-well fields, wells in nonprorated fields except special allowable wells, and sec.3.49(b) gas wells will have their allowables determined as the lesser of: the maximum allowable under applicable rules; capability; or for wells with reported production within any of the last three months, the highest production during those months. The allowable for special allowable wells shall be its amount of production during the most recently reported production month. As a practical matter, any limitation on these wells below the maximum allowable will not be significant because allowables will be revised up to the maximum allowable to cover any overproduction. Amendments to sec.3.31(k) will expedite the process for administrative special allowable status by automatically setting a well to special allowable status if its capability drops below 100 mcf/day. These amendments will generally eliminate the need, if any, for "immediate @s". Most "immediate @s" were acquired to prevent excess underproduction that caused the field to receive a "O*" allowable. Because the "O*" has been eliminated and underproduction will no longer have an adverse effect, it appears that many "immediate @s" are no longer necessary. Additionally, if "immediate @s" were implemented because of concerns that allowables were assigned to incapable wells, the new enhanced capability routine should alleviate these concerns. The following is a summary of the comments. Some commenters suggested that the commission should not change its current system of gas prorationing. The commission disagrees. Those suggesting that the commission retain its current system point to evidence that l991's production was 85% of the allowables actually assigned. That statistic indicates that the current system assigned allowables by as much as 15% above market demand. That amount of error is nearly as large as the total production from some of the largest gas producing states. The commission believes that the aspects of the current system that cause this error are unacceptable and erode the ability of the commission to protect correlative rights. Other reasons support the commission's efforts to reform the current gas proration system as well. The current system is very complex. These amendments are designed to simplify the system to the greatest degree possible so that more operators will be able to predict how and understand the way the system works. Changes in the nature of the pipeline industry also support the commission's efforts to use information other than purchaser nominations as the starting point of a market demand determination. Additionally, concerns about assignment of allowables to incapable wells justify changes in the way the commission determines a well's capability. Finally, concerns regarding protection of correlative rights justify the commission's examination of the way it allocates reservoir allowables. Some commenters commended the commission for using prior production as the starting point for market demand determinations, while other commenters stated that prior production is unreliable as an indicator of future market demand. Most commenters agreed that purchaser nominations are unreliable. In the commission's opinion, a system using a combination of prior production and producer forecasts will provide the most accurate data to begin its process of determining reservoir market demand. Section 3.31(d) has been revised in response to these comments. The revision calls for a forecast to be determined by the commission for each operator in a reservoir. The forecast would be determined on the basis of the operator's well's prior production. However, each operator would be allowed to file an optional forecast if the operator determined that the forecast based on prior production was inaccurate. Several commenters were critical of the proposals methodology and use of a calculated decline factor to revise prior production in the market demand determination. The commission agrees that the calculated decline factor is problematic. Therefore, the decline factor has been removed. Declines and increases in reservoir market demand will be adequately reflected in the optional forecasts and prior production without the addition of a decline factor. Many commenters complained that the "necessary adjustment" process is overly burdensome and complex. The commission agrees. The objectives the "necessary adjustment" provisions were intended to accomplish will be achieved with a simpler system of optional operator forecasts, calculated forecast correction, and the commission adjustment. Several commenters stated that the commission should not use a "statewide adjustment." Under its broad statutory authority to regulate gas production and determine lawful market demand, the commission may consider facts other than the producer forecasts and prior production when determining lawful reservoir market demand. Some commenters, also suggested, that the commission's proposed procedure is illegal. The commission disagrees. As long as the end result is to determine an accurate market demand determination for the reservoir, the statutory mandate has been satisfied. Several commenters expressed concern that allowables should not be assigned to incapable wells. The commission agrees. Under the existing system, deliverability tests served as the primary means of preventing allowable assignment to incapable wells. A complex set of routines ("@", "U", and "L") also served to limit allowables to the highest production within the last 12 months. The nature of the deliverability test precludes it from being a totally accurate assessment of a well's capability to produce over an entire month. Section 3.31(e) was revised in response to these concerns. A more stringent, yet simpler "capability routine" will replace the "@", "U", and "L" routine. The routine uses the lesser of the well's deliverability test or the highest monthly production within the last six months as the well's capability. The commission will be willing to consider revisions to the "look back" period for specific fields in field rule proceedings. Unique reservoir characteristics, such as low permeability and high decline rates, may justify reviewing fewer months of production when determining well capabilities. Longer review periods may be feasible for mature fields with lower decline rates. Revisions to the "look back" period for specific fields may also address the concerns that might otherwise justify the retention of "immediate @s" after the adoption of these rules. No well will be assigned an allowable in excess of its capability. Because there are some situations where the six month "look back" period might result in an inaccurate capability determination, an operator may submit a substitute capability determination. To balance the stringency of this capability routine, wells limited by this routine will be allowed to accrue underage to the extent the well does not produce the limited allowable. Additionally, the prior practice of returning underage from these wells to the reservoir will be discontinued. Several commenters opposed the restriction that required the production review routine to consider at least seven months of prior production and the effect that restriction would have on "immediate @s". The capability routine discussed above obviates the need for this restriction; however, the commission has concerns that "immediate @s" may no longer be necessary. The commission will reconsider all "immediate @s". First, "immediate @s" will no longer be established by an administrative process. Second, any new "immediate @s" will only be permitted if established by a field rules proceeding with evidence shown that the "immediate @" is needed for some lawful purpose. Third, all "immediate @s" established administratively will be canceled. Any reinstatement of an administratively granted "immediate @" will only be permitted if established by a field rules proceeding with evidence shown that the "immediate @" is needed for some lawful purpose. Fourth, fields that have an "immediate @" established by final order will have a field rule review proceeding called pursuant to sec.1. 47 of the commission's General Rules of Practice and Procedure. Those proceedings will be called to require the operators in the field to show cause why the "immediate @" rule for the field should not be removed. Several commenters suggested that the commission should make administrative special allowables automatic. The commission agrees. Section 3.30(k) will automatically establish an administrative special allowable for a well when its capability drops to 100 mcf. An operator may request that the commission refrain from automatic action. A few commenters stated that the commission should revise sec.3.34 to eliminate all ratable purchasing requirements for purchasers. The commission disagrees. First, no substantive changes to sec.3.34 are intended to be addressed by this rulemaking. Second, current requirements of sec.3.34 are necessary to enforce the provisions of the Common Purchaser Act. Finally, several commenters stated that the commission should not use gas prorationing as a means of restricting gas production below market demand. The commission has never intended and does not intend to use this regulation to affect prices or to restrict gas allowables below lawful market demand. These rules are intended to enable the commission to fulfill its statutory mandate to accurately determine lawful market demand and set the reservoir allowables to lawful market demand, and to protect correlative rights. The following groups and associations generally supported the proposal but filed comments recommending changes in the sections as published: Anadarko Petroleum Corporation, Apache Corporation, Association of Texas Intrastate Natural Gas Pipelines, East Texas Producers and Royalty Owners Association, Enron Oil and Gas Company, Forest Oil Corporation, Houston Lighting and Power, Mesa Limited Partnership, North Texas Oil and Gas Association, Panhandle Producers and Royalty Owners Association, Plains Resources, Texas Gas Association, Texas Independent Producers and Royalty Owners Association, Texas Utilities Fuel Company, Valero Transmission, L.P., West Central Texas Oil and Gas Association. The following groups and associations generally opposed the proposal and filed comments recommending changes in the sections as published: Arco Oil and Gas Company, Associated Gas Distributors, Chevron U.S.A. Inc., Colorado Interstate Gas Company, Conoco Inc., Copano Company, Exxon Company, U.S.A., Floyd Oil Company, Harrison Interests, Ltd., Hoechst Celanese Corporation, Kerr-McGee Corporation, Lonesome Dove Oil Corporation, Longhorn Royalty Company, Marathon Oil Company, Maxus Exploration Company, New England Power Company, Oryx Energy Company, OxyChem-Occidental Chemical Corporation, Pennzoil Exploration and Production Company, Permian Basin Petroleum Association, Phillips Petroleum Company, Process Gas Consumers Groups, Shell Western E&P Inc., E. N. Smith, III Energy Corporation, Sonat Exploration Company, Texaco Exploration and Production Inc., Texas Chemical Council, Texas Independents for Natural Gas, Texas Mid- Continent Oil & Gas Association, Transamerican Natural Gas Corporation, Union Pacific Resources Company, United Distribution Companies, Verado Energy Inc., Winchester Oil and Gas Operations. 16 TAC sec.sec.3.30 This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 28, 1992. TRD-9205902 Lena Guerrero Chairman Railroad Commission of Texas Effective date: July 1, 1992 Proposal publication date: February 11, 1992 For further information, please call: (512) 463-6941 16 TAC sec.sec.3.31, 3.34, 3.49 The amendments are adopted under the Texas Natural Resources Code, sec.81. 051, 81.052, 85.046, 85.053, 85.055, 85.201-85.203, 86.011, 86.012, 86.041, 86. 042, 86.081, 86.083-86.090, 86.094, 111.083, 111.090, and 111.133, which provides the Railroad Commission of Texas with the authority to adopt rules for the following purposes: to govern and regulate persons and their operations under the jurisdiction of the Railroad Commission; to prevent waste of oil and gas in drilling and producing operations; to determine the status of gas production from all gas reservoirs; to distribute, prorate and apportion allowable production; to determine the lawful market demand for gas to be produced from each reservoir; to adjust correlative rights and opportunities; to determine the daily allowable production for each gas well; to effectuate the provisions and purposes of Chapter 86 of the Natural Resources Code; to conserve and prevent waste of gas; to prevent discrimination in the production and purchasing of gas; to prevent monopolistic practices which may be injurious to the general public; and to regulate common purchasers of gas to achieve the prior purposes. sec.3.31. Gas Well Allowables. (a)-(b) (No change.) (c) Requirements for gas wells in a field for which an allocation formula has been adopted. (1) If acreage is a factor in the allocation formula, a certified plat showing the acreage assigned to the well for proration purposes shall be submitted. The plat must be accompanied by a statement that all of the acreage claimed can reasonably be considered productive of gas and that the distance limitations of the field rules have not been exceeded. If all of the acreage claimed is not contained in a single lease, a certificate of pooling authority must be submitted, on the appropriate commission form. If the distance limitations of the field rules are shown to have been exceeded, the plat must show the number of acres within and beyond the distance limitations. An operator may request an exception to the distance limitations which may be administratively approved by the commission or a commission designee if all the acreage can be considered productive. If approval of the request is declined or protest is received, the request may be set for hearing. If all of the acreage cannot be considered productive, the plat must also show the productive limit of the acreage. If a plat shows acreage in the unit in excess of the maximum number of acres permitted by the field rules, it will not be accepted. (2)-(3) (No change.) (d) Determining prorated reservoir allowables and lawful market demand. (1) On or before the 20th day of the preceding month, the commission will determine the lawful market demand for gas to be produced from each reservoir during the upcoming allowable month. The monthly reservoir allowable shall be equal to the lawful market demand for that reservoir. The lawful reservoir market demand for prorated reservoirs shall be equal to the adjusted reservoir market demand forecast adjusted by a forecast correction adjustment, a supplemental change adjustment, and a commission adjustment. (A) Allowable month-the month during which allowables determined pursuant to this section will be effective. (B) Adjusted reservoir market demand forecast-the sum of each operator reservoir market demand forecast that has been adjusted downward in order not to exceed the total capability of the operator's wells for each reservoir during the allowable month. (C) Operator reservoir market demand forecast-the sum of the operator's well forecasts determined by the commission pursuant to this subparagraph. The commission will determine a forecast for each well that will be active during the allowable month that for prorated and limited wells is equal to the well's production during the same allowable month in the prior year and for special or administrative special allowable wells is equal to the well's production during the most recently reported production month. If the well had no reported production during the allowable month in the prior year, the forecast shall be equal to the well's capability, unless the well has reported production during any of the three most recently reported production months, then the largest monthly production during those months will be used instead. Alternatively, the operator reservoir market demand forecast may be determined by an optional operator forecast. (D) Optional operator forecast-the commission designated operator may file an optional market demand forecast for all of the operator's wells in the reservoir that is equal to the anticipated market demand for the production from the operator's wells in the field during the allowable month. The optional operator forecast for the operator's wells in the reservoir can be no greater than the total capability of the operator's wells or less than zero. An optional operator forecast must be filed by the fifth day of the month preceding the allowable month. (E) Forecast correction adjustment-the difference between the reservoir production and the adjusted reservoir market demand forecast adjusted by the supplemental change adjustment and commission adjustment during the most recently reported production month. (F) Supplemental change adjustment-any adjustment to the reservoir allowable that is necessary to account for an automatic allowable revision in a prior month, a change of well or well test status during a prior month, the provisions of a final order modifying field or well production status, or any other ministerial change. (G) Commission adjustment-any other adjustments to the adjusted reservoir market demand forecast that the commission determines are necessary. (2) The commission may reject or modify any optional operator forecast if it determines that the forecast is inaccurate or being used to manipulate the allocation of gas rather than to determine the reasonable market demand. (e) Well capability. (1) No gas well shall be given an allowable in excess of its capability, which is the lesser of the well's latest deliverability test on file with the commission or the well's highest monthly production during any of the six most recently reported production months. The capability for a well that is new to the reservoir and has been active for less than nine months shall be determined by the well's latest deliverability test on file with the commission. (2) An operator may submit a substitute capability determination for a well that represents the maximum monthly production capability of the well under normal operating conditions for a specific six month period. (A) The determination may be made on the basis of a well test or other acceptable information by a registered professional engineer who certifies that the determination was made by the engineer or under the supervision of the engineer, and that the capability has been determined in accordance with generally accepted engineering practices. Alternatively, the substitute capability determination may be made by an independent tester on the basis of a well test conducted in accordance with sec.3.28(c) of this title (relating to Potential and Deliverability of Gas Wells to be Ascertained and Reported)(Statewide Rule 28). The request for a substitute capability must be submitted on the appropriate form. (B) The commission or a commission designee may reject any substitute capability determination for good cause. (C) The capability determined pursuant to this paragraph shall be used as the well's capability for a period of six months from the effective date of the determination, unless an affected person files a protest alleging, with specificity, the inaccuracy or invalidity of the determination. If a protest is filed, the commission may set the matter for hearing. A protested substitute capability determination shall be effective on the intended effective date, unless the commission orders otherwise. If the commission determines that the protested substitute capability was incorrect, appropriate allowable or status adjustments will be made for the affected well. (f) Fields operating under statewide rules. (1) A statewide prorated field is any gas field in which no special field rules have been adopted and in which at least one well in the field has a current reported deliverability test of greater than 200 Mcf a day. Daily allowable production of gas from individual wells in a statewide prorated field shall be determined by allocating the allowable production among the individual wells in the proportion that each well's deliverability (based on the latest deliverability test of record) bears to the summation of the most recent reported deliverability tests of all wells producing from the same field. Allocated allowables shall be subject to the well capability provisions of this section. (2) A statewide exempt field is any gas field in which no special field rules have been adopted and in which no well in the field has a current reported deliverability test of greater than 200 Mcf a day. Wells in statewide exempt fields shall be assigned allowables equal to their capacity to produce. (g) Definitions of prorated and nonprorated wells and fields. (1) A prorated well is a well for which an allowable is determined by an allocation formula. (2) A nonprorated well is a well for which an allowable is not determined by an allocation formula. (3) A prorated field is a field that has two or more wells one of which is a prorated well. (4) A nonprorated field is any field that is not a prorated field. (5) A limited well is a nonprorated well in a prorated field (other than a special or administrative special allowable well) with an allowable set below the maximum allowable it would receive under the allocation formula. A limited well shall be assigned an allowable at the rate that the well is capable of producing as determined by subsection (e) of this section. (6) A special allowable well is a nonprorated well granted a fixed allowable by the commission after notice and hearing. (7) An administrative special allowable well is a nonprorated well that has been granted a fixed allowable pursuant to subsection (k) of this section. (8) Exempt allowable (X) wells are nonprorated wells in an exempt field and are assigned an allowable on a field-wide basis that allows wells to produce at capacity. (9) The maximum allowable for a well is the largest allowable that can be assigned under applicable rules. For a limited well, the maximum allowable is the allowable the well would receive under the allocation formula. For a special allowable well, the maximum allowable is the allowable assigned pursuant to subsection (g)(6). For an administrative special allowable well, the maximum allowable is the lesser of 100 Mcf/day or the allowable the well would receive under the allocation formula. For a well in a one well field, the maximum allowable is the well's deliverability based on the latest deliverability test of record. For an associated gas well, the maximum allowable is the gas well allowable calculated by sec.3.49(b)(1) or (2) of this title (relating to gas-oil ratio) (Statewide Rule 49). (h) Allowable adjustments and balancing provisions for nonprorated wells. (1) A nonprorated well shall not be allowed to accumulate underproduction. However, a limited well shall be entitled to accumulate underage up to the well's capability each month. (2) If the most recent production figures reported to the commission show a nonprorated well to be overproduced, the allowable will be revised to cover overproduction up to the maximum allowable. If the indicated capability of a nonprorated well to produce, plus its latest recorded overproduction, is less than its maximum allowable, sufficient allowable will be assigned to balance the allowable with production. (3) The allowable for wells in nonprorated fields, except for special and administrative special allowable wells, shall be limited to the lesser of: (A) the well's maximum allowable; (B) the well's capability as determined by subsection (e) of this section; or (C) the highest monthly production during those months averaged to a daily amount for wells that reported production during any of the three most recently reported production months. (4) The allowable for special and administrative special allowable wells shall be its amount of production during the most recently reported production month. (i) Balancing provisions for overproduction and underproduction of gas for wells completed in prorated gas fields. (1) Balancing provisions for prorated fields. Except as provided in subsection (h) of this section or as necessary to prevent waste or protect correlative rights, balancing provisions will be applied for wells completed in prorated gas fields. (2)-(3) (No change.) (4) Underproduction. (A) If during the balancing period a prorated gas well or a limited well does not produce as much gas as is allocated to it by the commission, the operator of the well shall be permitted to carry such underproduction forward to the next succeeding balancing period as future allowable credit to be produced during that period. (B) The amount of underproduction to be carried forward into any new balancing period as allowed production during such new balancing period shall consist of the actual underproduction that accrued in the balancing period immediately preceding such new balancing period; and the accumulative well status as to underproduction, will be adjusted on each balancing date accordingly. An operator may request that underproduction not balanced during a second balancing period be carried forward to subsequent balancing periods. The operator's request must include evidence of increased market demand that will allow underproduction to be produced in the subsequent balancing period. The request may be granted administratively by the commission or a commission designee if the request was filed no later than the last day of the balancing period following the date the underproduction is canceled, the operator has given at least 21 days notice to all other operators in the field and the first purchaser of gas from the subject well, and no protest to the request has been filed. The request may also be approved administratively if the operator provides written waivers of objection from all to whom notice would be given as an alternative to notice and absence of protest. If the commission or a commission designee declines to grant administratively the request, the operator may request a hearing. (5) Overproduction. (A) (No change.) (B) A well overproduced as of a balancing date, which was also overproduced on the balancing date immediately preceding and remained overproduced for the entire period between the two balancing dates, shall be shut-in until the overproduction, existent as of the later of such two balancing dates, is made up. Upon request by an operator, the commission may grant authority to produce such a well at a fractional part of its monthly allowable (reduced rate) until its production and allowable are in balance. The commission or a commission designee may determine the permissible rate. (C) If a protest is received or the commission declines to approve a request to produce at a reduced rate, the operator of a well which under the provisions of subparagraph (B) of this paragraph is required to be shut-in, may request a hearing before the commission to determine whether shutting-in the well would damage it. Notice of the hearing will be given to all operators in the field and the first purchaser of the subject well. If, after consideration of the evidence submitted at the hearing, the commission finds that the well would be damaged if shut-in, the commission may allow the overproduction charged against it to be made up at a lesser rate than it would be made up if the well were shut-in. The commission or a commission designee may determine the permissible rate pending the result of the hearing. (D) (No change.) (j) Suspension of allocation formula. (1) The commission or a commission designee may administratively suspend the allocation formula for a particular gas field if: (A) each first purchaser from that field has a market for 100% of the deliverability as determined by the deliverability tests available to that purchaser from the field; (B)-(C) (No change.) (2) Suspension of the allocation formula may be initiated by the commission or a commission designee, by one of the operators in the field, or by one of the first purchasers in the field. (A) The commission or a commission designee will determine which fields are appropriate for suspension utilizing the criteria of paragraph (1) of this subsection. The allocation formula may be suspended administratively by the commission or a commission designee if the applicant has given at least 21 days notice of intent to suspend the allocation formula for a particular field to each of the operators and first purchasers in the field and no protest has been made. (B) If it is anticipated that suspension of the allocation formula will cause a pipeline limitation in a field, first purchasers in the field for which suspension of the allocation formula is requested shall notify the commission or a commission designee within 21 days of the mailing date of the notice of intent to suspend the allocation formula. (C) The allocation formula may also be suspended administratively if the applicant provides written waivers of objection from all to whom notice would be given. If the commission or a commission designee declines to suspend administratively the allocation formula, the applicant may request a hearing as provided for in paragraph (4) of this subsection. (3) Reinstatement of the allocation formula may be initiated by the commission or a commission designee, by one of the operators in the field, or by one of the first purchasers in the field. (A) If the market demand for gas from a field with a suspended allocation drops below 100% of deliverability as determined by the deliverability tests at any time, the operators and/or first purchasers for the field shall immediately notify the commission or a commission designee and give an explanation of the reduction in demand. The commission or a commission designee will then make a determination of whether the allocation formula should be reinstated and may immediately reinstate the allocation formula. (B) If a pipeline limitation occurs after suspension of the allocation formula, first purchasers in the field shall immediately notify the commission or a commission designee. The commission or a commission designee will then make a determination of whether the allocation formula should be reinstated and may immediately reinstate the allocation formula. (C) An operator or first purchaser may request that the allocation formula for a field be reinstated administratively. The request may be approved administratively by the commission or a commission designee if the applicant provides to the commission written waivers of objection from all operators and first purchasers for a field. If the applicant fails to secure all necessary waivers or if the commission or a commission designee declines to approve the request, the operator may request a hearing as provided for in paragraph (4) of this subsection. If the matter is set for hearing, the allocation formula may be reinstated administratively by the commission or a commission designee pending the result of the hearing. The notice of request for reinstatement shall specify the date on which allocation again becomes effective. (4) If the commission or a commission designee denies administratively a request to suspend or reinstate the allocation formula in a particular field, the applicant may request a hearing. In addition to the criteria set forth in paragraph (1) of this subsection, the commission will consider whether suspension or reinstatement is necessary to prevent waste or protect correlative rights. (5) (No change.) (k) Administrative special allowable. A well which has a capability of 100 mcf or less will be assigned an administrative special allowable pursuant to subsection (h) of this section, unless the operator requests otherwise. sec.3.34. Gas to be Produced and Purchased Ratably. (a) Definitions. The following words and terms, when used in this section and in sec.3.31 of this title (relating to Gas Well Allowables) (Statewide Rule 31) shall have the following meanings, unless the context clearly indicates otherwise. (1) Affiliate-A person or entity that owns, is owned by, or is under common ownership with another person or entity to the extent of 50% or more or that otherwise controls or is controlled by another person or entity. Affiliates of a common entity are also affiliates of each other. A person or entity that purchases gas solely for purposes other than resale shall not be considered an affiliate, and an interstate pipeline, as defined in the Natural Gas Policy Act of 1978, sec.2(15) (15 United States Code sec.3301 et seq), shall not be considered an affiliate of an intrastate pipeline. (2) Commission designee-A Railroad Commission employee authorized to act for the commission. Any authority given to a commission designee is also retained by the commission. Any action taken by the commission designee is subject to review by the commission. (3) Downstream purchaser-One that purchases natural gas for resale and is not a first purchaser. (4) First purchaser or initial purchaser-The first purchaser of natural gas produced from a well. A first purchaser and any affiliate of the purchaser that transports any natural gas it purchases from a well by use of the same pipeline system used by the first purchaser of which it is an affiliate shall be treated as a single first purchaser for purposes of ratability requirements; provided, however, that an affiliate that is purchasing and accepting deliveries pursuant to a special marketing program that is in compliance with this section, shall be treated as a separate first purchaser; and, provided further that the designation of such affiliate as a separate first purchaser is reviewable by the commission and may be disallowed upon a showing that the designation was for purposes of circumventing this section. Any affiliate may file forms in its own name. (5) Pipeline system-A network of physically connected pipelines that are operated as a single unit under normal conditions. (A) A first purchaser's pipeline system is that portion of a physical segment of a pipeline that the first purchaser owns. (B) If a first purchaser does not own the pipeline it uses to transport its gas, the first purchaser's pipeline system shall include all the wells from which it purchases that are on the pipeline system of the transport pipeline. (C) A first purchaser may not segregate its purchases from any one field into two or more pipeline systems by transporting on another pipeline gas that it purchases as a first purchaser if the first purchaser is also purchasing as a first purchaser from the same field and transporting on a pipeline that it owns. (D) A first purchaser may not segregate its purchases from any one field into two or more pipeline systems by executing gas exchange agreements. (E) Any of a first purchaser's pipeline systems which serve a common customer or common customers in a common geographic location shall be operated in a manner to avoid unjust or unreasonable discrimination in takes as between those systems. (F) A first purchaser shall not segregate its physically connected pipelines that are capable of being operated as a single unit under normal conditions into two or more pipeline systems or designate a gathering system as a separate system for purposes of circumventing this section. (6) Prorated gas field-A reservoir or field in which an allocation formula is in effect. (b) General provisions. This section is promulgated to promote and maintain ratable production of natural gas and to require production in compliance with priority categories established by the commission for the purposes of preventing waste, including production in excess of market demand, protecting correlative rights, preventing discrimination, and conserving the natural resources of this state. An operator shall not produce in excess of its ratable share of the market demand as determined by this section and sec.3.28 and sec.3.31 of this title (relating to Potential and Deliverability of Gas wells to be Ascertained and Reported and Gas Well Allowables) (Statewide Rules 28 and 31). An operator shall produce ratably as 25 set out in subsection (e) of this section and shall produce in compliance with subsection (i) of this section which establishes priority categories of natural gas. Because production is dictated by pipeline capacity and market demand, pipelines are an integral part of production regulation. The requirements imposed on pipelines by this section and sec.3.28 and sec.3.31 of this title (relating to Potential and Deliverability of Gas Wells to be Ascertained and Reported and Gas Well Allowables) (Statewide Rules 28 and 31) are enforced to assist in the regulation of production and provide the only method by which such production regulation can be enforced and market demand met as required by statutory law. A first purchaser shall not discriminate between different wells from which it purchases in the same field, nor shall it discriminate unjustly or unreasonably between separate fields. The provisions of this section requiring ratable production and purchasing of gas apply to purchase and production from wells from which a first purchaser is purchasing on its pipeline system. (c) Designation of pipeline system. A first purchaser shall, on or before a date designated by the commission or a commission designee, designate its pipeline system(s) and shall identify its affiliates that use the same pipeline system, including an affiliate operating a special marketing program that is in compliance with subsection (k) of this section. A pipeline system designation must identify the physical segment of pipeline that constitutes the pipeline system and identify by Railroad Commission of Texas lease and/or identification number and field the wells on that pipeline system from which the first purchaser is purchasing. A change in pipeline system designation is not required to add or delete well connections. The designation of a pipeline system cannot be changed by a first purchaser without prior approval by the commission or a commission designee. Approval of a change in pipeline system designation cannot be given without prior notice of the requested designation given by the first purchaser to affected operators of wells on the system(s) for which a change in designation is sought. A hearing to determine the proper designation of a first purchasers pipeline system may be called by the commission, or may be requested by a first purchaser or by an operator filing a complaint. The burden of proof in the hearing shall be on the first purchaser. (d) Operators who use produced gas. Any person who purchases natural gas at the wellhead, at a common point within a field or fields or at the outlet of a processing or treating plant must determine if it is the initial purchase. (e) Production guidelines. An operator shall produce without discrimination between its wells in the same field on the same first purchaser's pipeline system and without unjust or unreasonable discrimination between its wells in separate fields on the same first purchaser's pipeline system. An operator shall apportion a first purchaser's delivery requests ratably to its wells in each field on the same first purchaser's pipeline system without discrimination in the same manner as provided in this section and sec.3.28 and sec.3.31 of this title (relating to Potential and Deliverability of Gas Wells to be Ascertained and Reported and Gas Well Allowables) (Statewide Rules 28 and 31) and shall not produce in excess of its ratable share of the market demand as its share is determined by those rules. An operator shall produce in compliance with the priority categories of gas production established by the commission in subsection (i) of this section. (f) Purchases from different fields. (1) In making purchases and accepting deliveries between fields, a first purchaser of natural gas that purchases and accepts delivery of gas from more than one field on its same pipeline system must accept from each field a consistent percentage of the portion of the aggregate deliverability as determined by the deliverability tests and total gas limits that it is entitled to purchase from all wells from which it purchases on its pipeline system, unless the purchaser can demonstrate a just and reasonable basis for discriminating between fields. (2) Natural gas purchases from a well by a first purchaser that uses another first purchaser's pipeline system to transport its gas and sells the gas purchased on that pipeline system solely to the first purchaser that owns the transport pipeline must be treated as first purchases of gas by the first purchaser that owns the transport pipeline. (g) Purchases within a field. (1) In making purchases and accepting deliveries within fields, a first purchaser of natural gas that purchases and accepts delivery of gas from different gas wells in the same priority category (see subsection (i) of this section) in the same field on its same pipeline system shall purchase and accept from the wells from which it purchases in the field a consistent percentage of the portion that it is entitled to purchase of the maximum allowable that a well is entitled to under the field's allocation formula. If purchases and deliveries from different wells in the same field become nonratable, the first purchaser shall consider commission-assigned underproduction and overproduction to establish an appropriate pattern of purchases or acceptance of deliveries to restore ratability. (2) Natural gas purchases from a well by a first purchaser that uses another first purchaser's pipeline system to transport its gas and sells the gas purchased on that pipeline system solely to the first purchaser that owns the transport pipeline must be treated as first purchases of gas by the first purchaser that owns the transport pipeline. (3) Purchases and deliveries of casinghead gas shall be based on the well's gas limit (see sec.3.49 of this title (relating to Gas-Oil Ratio)) (Statewide Rule 49) as provided in subsection (h) of this section. Overproduction and underproduction of gas is administered by the provisions of sec.3.31 of this title (relating to Gas Well Allowables) (Statewide Rule 31). A first purchaser shall not reduce purchases from a limited well (see sec.3.31(g)(5) of this title (relating to Gas Well Allowables)) until all prorated gas wells from which it purchases in the field connected to its same pipeline system are ratably reduced to the assigned allowable of the limited well. Below that point, purchases from all prorated wells and limited wells should be reduced ratably by purchasing and accepting delivery of the same percentage of the portion that it is entitled to purchase of the maximum allowable established for the well by the field's allocation formula. If purchases and deliveries from different wells in the same field become nonratable, the first purchaser shall consider commission-assigned underproduction and overproduction in establishing an appropriate pattern of purchases or acceptances of deliveries to restore ratability. When purchases of gas described in subsection (i)(2) or (5) of this section are to be reduced, they shall be reduced ratably within each priority category. (h) Casinghead gas reductions. When purchases and deliveries of casinghead gas described in subsection (i)(1) or (3) of this section are to be reduced, each well's share of the reduction shall be calculated by multiplying the total reduction by the fractional share that each well's gas limit bears to the arithmetic sum of the aggregate gas limits of all wells in the field from which the first purchaser has been purchasing on its same pipeline system. In calculating its reduction of a well, a first purchaser shall use that portion of the gas limits that it is entitled to purchase. A well operating under net gas/oil ratio authority shall produce no more gas than its gas limit as it would be reduced by the previously mentioned procedure absent the net gas/oil ratio authority. (i) Priority categories. First purchasers of gas shall satisfy their pipeline system demand for gas by purchasing and accepting delivery of gas from the following priority categories in ascending numerical order. Lower priority category gas is gas from a higher numerical category. A first purchaser shall not within its pipeline system curtail gas from a priority category if the purchaser is purchasing and accepting delivery of lower priority category gas as a first purchaser on its same pipeline system. A first purchaser's purchases and acceptance of delivery of first, second, or third priority category gas under an obligation to purchase and accept delivery from the tailgate of a plant processing gas to extract liquids, or from a gathering system that purchases from wells and is required by contract or by its physical connections to sell its gas entirely to the purchaser, whether or not these purchases are made as a first purchaser, shall not be curtailed if the first purchaser is purchasing and accepting delivery of lower priority category gas as a first purchaser on its same pipeline system. If curtailed, the curtailment must be ratable with like priority category gas which the first purchaser is purchasing and accepting delivery of from wells on its same pipeline system. (1) (No change.) (2) Second priority shall be given to gas from special allowable wells as defined in sec.3.31(g)(6) of this title (relating to Gas Well Allowables) (Statewide Rule 31) granted special allowable status after the effective date of this section to prevent physical waste. Wells classified as special allowable wells pursuant to notice and hearing prior to the effective date of this section shall be given second priority unless a new determination is made that the special allowable status is not necessary to prevent physical waste. (3) (No change.) (4) Fourth priority shall be given to gas from wells classified under sec.3.49(b) of this title (relating to Gas-Oil Ratio) (Statewide Rule 49(b)), but only to the extent of one full allowable for multiple 49(b) wells. (5) Fifth priority shall be given to gas from administrative special allowable wells as defined in sec.3.31(g)(7) of this title (relating to Gas Well Allowables) (Statewide Rule 31), to gas from special allowable wells (see sec.3.31(g)(6) of this title (relating to Gas Well Allowables)) granted that status prior to the effective date of this section (see paragraph (2) of this subsection) without notice and hearing, and to gas from special allowable wells granted that status by the commission subsequent to the effective date of this section after notice and hearing for other reasons than to prevent physical waste. (6) Sixth priority shall be given to the remainder of gas well gas, including limited wells (see subsection (g) of this section). (j) Prohibition against discriminating in favor of purchaser's own production. A first purchaser of natural gas may not discriminate between or against natural gas of a similar kind or quality in favor of its own production or production in which it may be directly or indirectly interested in whole or in part. (k) Special marketing programs. If a first purchaser elects to qualify an affiliate as a separate first purchaser, the first purchaser may designate the affiliate as a special marketing program. The special marketing program must comply with the following with respect to the purchase and acceptance of delivery of natural gas. (1) -(4) (No change.) (5) The affiliated first purchaser must continue in compliance with this section to purchase and accept delivery from the wells for which the offer was made and not accepted. (6) With respect to the purchase of gas from those that accept an offer made pursuant to this subsection, the special marketing program purchaser must comply with this section and sec.3. 28 and sec.3.31 of this title (relating to Potential and Deliverability of Gas Wells To Be Ascertained and Reported and Gas Well Allowables) (Statewide Rules 28 and 31) as a separate first purchaser. (7) (No change.) (1) Sellers' complaint procedure. Any operator or nonoperator that is denied by the first purchaser in violation of this section or sec.3.28 or sec.3.31 of this title (relating to Potential and Deliverability of Gas Wells to be Ascertained and Reported and Gas Well Allowables) (Statewide Rules 28 and 31) the opportunity to produce a well's ratable share of gas or opportunity for a well to participate in a special marketing program may file a complaint with the commission and request the commission to direct the first purchaser to end the discriminatory practices. A complainant may request a hearing regarding alleged discriminatory practices or to determine whether a first purchaser is or has, through gas exchange agreements or through actions of its affiliate(s), denied an operator a reasonable opportunity to market its gas. (m) Purchasers' complaint procedure. If after reasonable notice by the purchaser, an operator fails to comply with a first purchaser's request to reduce production ratably in compliance with this section and sec.3.28 and sec.3.31 of this title (relating to Potential and Deliverability of Gas Wells to be Ascertained and Reported and Gas Well Allowables) (Statewide Rules 28 and 31) the purchaser may file a complaint with the commission and request the commission to direct the operator to comply with the purchaser's requests to reduce production ratably. The complainant or the operator may request the commission to take further action, including setting the issue for hearing. (n) Hardship exceptions. If the operation of this section or sec.3.28 or sec.3.31 of this title (relating to Potential and Deliverability of Gas Wells to be Ascertained and Reported and Gas Well Allowables) (Statewide Rules 28 and 31) causes undue hardship, the commission may, after proper notice and hearing, grant an exception or take appropriate action, including action to prevent waste or protect correlative rights. (o) Severability provisions. If any provision of this section or its application to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of the section which can be given effect without the invalid provisions or appreciation, and the provisions of the section are declared to be severable. sec.3.49. Gas-Oil Ratio. (a) (No change.) (b) Any gas well producing from the same reservoir in which oil wells are completed and producing shall be allowed to produce daily only that amount of gas which is the volumetric equivalent in reservoir displacement of the gas and oil produced from the oil well in the reservoir that withdraws the maximum amount of gas in the production of its daily oil allowable. (1)-(2) (No change.) (3) The allowable for an associated gas well as determined by this subsection shall be limited to the lesser of: (A) the gas well allowable as calculated by paragraph (1) or (2) of this subsection; (B) the well's capability as determined by sec.3.31(e) of this title (relating to gas well allowables) (Statewide Rule 31); or (C) the highest monthly production during those months averaged to a daily amount for wells that reported production during any of the three most recently reported production months. (c)-(i) (No change.) This agency hereby certifies that the rules as adopted have been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas on April 28, 1992. TRD-9205903 Lena Guerrero Chairman Railroad Commission of Texas Effective date: July 1, 1992 Proposal publication date: February 11, 1992 For further information, please call: (512) 463-6941 TITLE 22. EXAMINING BOARDS Part I. Texas Board of Architectural Examiners Chapter 3. Landscape Architects Subchapter B. Registration 22 TAC sec.3.21 The Texas Board of Architectural Examiners adopts an amendment to sec.3.21, concerning eligibility of applicants for examination, with changes to the proposed text as published in the February 18, 1992, issue of the Texas Register (17 TexReg 1377). This amendment will further clarify the professional degree required of examination applicants by the board. Subsection (b) was added which states: "Full time students enrolled as of April 24, 1992, in nonaccredited programs of study in landscape architecture previously approved by the board will be eligible for admittance to the examination after receiving a degree from that program." The amendment will provide guidelines for examination applicants with regard to board acceptance of applicant's professional degree. No comments were received regarding adoption of the amendments. The amendment is adopted under Texas Civil Statutes, Article 249c, which provide the Texas Board of Architectural Examiners with the authority to promulgate rules. sec.3.21. Eligibility. (a) An applicant for registration by examination as a landscape architect in Texas shall have received a professional degree from a recognized school whose study of landscape architecture is accredited by the Landscape Architectural Accreditation Board (LAAB) prior to submittal of an application, or shall have had not less than seven years' actual experience in the office of a licensed landscape architect. (b) Full time students enrolled as of April 24, 1992, in nonaccredited programs of study in landscape architecture previously approved by the board will be eligible for admittance to the examination after receiving a degree from that program. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 24, 1992. TRD-9205785 Robert H. Norris Executive Director Texas Board of Architectural Examiners Effective date: May 18, 1992 Proposal publication date: February 18, 1992 For further information, please call: (512) 458-4126 Part XXI. Texas State Board of Examiners of Psychologists Chapter 463. Applications 22 TAC sec.463.5 The Texas State Board of Examiners of Psychologists adopts an amendment to sec.463.5, concerning application file requirements, without changes to the proposed text as published in the March 17, 1992, issue of the Texas Register (17 TexReg 1972). The rule, as amended, will establish criteria for licensure by reciprocity, as required by legislation passed by the 72nd Legislature. The rule will attach requirements for licensure by reciprocity. Also, the rule will allow psychologists from other states to be considered for licensure. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4512c which provide the Texas State Board of Examiners of Psychologists with the authority to make all rules not inconsistent with the Constitution and laws of this state, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 22, 1992. TRD-9205794 Patricia S. Brizzell Tweedy Executive Director Texas State Board of Examiners of Psychologists Effective date: May 18, 1992 Proposal publication date: March 17, 1992 For further information, please call: (512) 835-2036 Chapter 465. Rules of Practice 22 TAC sec.465.26 The Texas State Board of Examiners of Psychologists adopts an amendment to sec.465.26, concerning temporary permit to practice, without changes to the proposed text as published in the March 17, 1992, issue of the Texas Register (17 TexReg 1972). To clarify that applicants for a temporary permit must be either applicants for licensure or applicants for licensure by reciprocity. The public will be able to receive psychological services from a person licensed in another jurisdiction while he/she is applying in Texas. The public benefits because a person can receive services from an experienced professional. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4512c, which provide the Texas State Board of Examiners of Psychologists with the authority to make all rules not inconsistent with the Constitution and laws of this state, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 22, 1992. TRD-9205798 Patricia S. Brizzell Tweedy Executive Director Texas State Board of Examiners of Psychologists Effective date: May 18, 1992 Proposal publication date: March 17, 1992 For further information, please call: (512) 835-2036 Chapter 471. Renewals 22 TAC sec.471.1 The Texas State Board of Examiners of Psychologists adopts an amendment to sec.471.1, concerning notification of renewal, without changes to the proposed text as published in the March 20, 1992, issue of the Texas Register (17 TexReg 2089). The rule, as amended, will reflect the requirements of the board's staggered renewal system. Renewals will be processed more timely because the work load of the board's staff will be distributed more evenly throughout the year. Consequently, the public will receive more current information about the status of a psychologist's license, or psychological associate's certificate. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4512c, which provide the Texas State Board of Examiners of Psychologists with the authority to make all rules not inconsistent with the Constitution and laws of this state, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 22, 1992. TRD-9205795 Patricia S. Brizzell Tweedy Executive Director Texas State Board of Examiners of Psychologists Effective date: May 18, 1992 Proposal publication date: March 20, 1992 For further information, please call: (512) 835-2036 Chapter 473. Fees 22 TAC sec.473.1 The Texas State Board of Examiners of Psychologists adopts an amendment to sec.473.1, concerning application fees, without changes to the proposed text as published in the March 17, 1992, issue of the Texas Register (17 TexReg 1974). The board determined that the cost of a reciprocity applicant is the same as the combined cost of the certification and licensure applicant. The public will receive information about fee requirements for reciprocity. The application fee for licensure by reciprocity will more realistically reflect processing costs. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4512c, which provide the Texas State Board of Examiners of Psychologists with the authority to make all rules not inconsistent with the Constitution and laws of this state, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 22, 1992. TRD-9205797 Patricia S. Brizzell Tweedy Executive Director Texas State Board of Examiners of Psychologists Effective date: May 18, 1992 Proposal publication date: March 17, 1992 For further information, please call: (512) 835-2036 22 TAC sec.473.6 The Texas State Board of Examiners of Psychologists adopts an amendment to sec.473.6, concerning reciprocity fee, without changes to the proposed text as published in the March 20, 1992, issue of the Texas Register (17 TexReg 2089). The board determined that the cost of a reciprocity applicant is the same as the combined cost of the certification and licensure applicant. The public will receive information about fee requirements for reciprocity. The application fee for licensure by reciprocity will more realistically reflect processing costs. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4512c, which provide the Texas State Board of Examiners of Psychologists with the authority to make all rules not inconsistent with the Constitution and laws of this state, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 22, 1992. TRD-9205796 Patricia S. Brizzell Tweedy Executive Director Texas State Board of Examiners of Psychologists Effective date: May 18, 1992 Proposal publication date: March 20, 1992 For further information, please call: (512) 835-2036 TITLE 28. INSURANCE Part II. Texas Workers' Compensation Commission Chapter 110. Required Notices of Coverage Subchapter B. Employer Notices 28 TAC sec.110.102 The Texas Workers' Compensation Commission adopts an amendment sec.110.102, concerning employer notices, without changes to the proposed text as published in the February 4, 1992 issue of the Texas Register (17 TexReg 930). This section is adopted as required by Texas Civil Statutes, Articles 8308-3. 24(e) and 5.41(c), to clarify what the employer must post in and about the workplace. Section 110.102 requires the employer to post notices to tell employees whether the employer is covered by workers' compensation insurance and to inform employees about the workers' compensation Ombudsman program. The only public comment on sec.110.102 was the following: Providing the injured worker with the information about the Ombudsman program as required is more timely than posting it. Also, the posting suggests that the employer may not respond to the needs and concerns of the injured worker and that there may be some cost for help not provided by the Ombudsman. Also, the rule should address self-insured employers as a source for workers' compensation insurance coverage. The commission disagrees. The posting will provide an opportunity for more people to be made aware of the program and will serve to insure that the injured worker is aware of the assistance available. Emphasizing that the Ombudsman provides free information does not suggest that the employer or others will charge for it. Including self-insured employers before private employers become eligible to participate would confuse the issue unnecessarily. While political subdivisions may become self-insured at this time, they are not subject to the posting notices found in Article 8308-Chapter B, though they are subject to the posting requirement for the Ombudsman program found in Article 8308-5.41(c). This comment, supporting changes to the rule as proposed, was received from the Cypress-Fairbanks Independent School District. The amendment is adopted under Texas Civil Statutes, Article 8308-3.24(e), which requires the commission to adopt rules prescribing the required notice an employer must post to inform employees of coverage status; Article 8308-5.41(c), which require the commission to prescribe the manner by which an employer must notify employees of the Ombudsman program; and Article 8308-2.09(a), authorizing the commission to adopt rules necessary to implement and enforce the Texas Workers' Compensation Act. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205755 Susan Cory General Counsel Texas Workers' Compensation Commission Effective date: June 1, 1992 Proposal publication date: February 4, 1992 For further information, please call: (512) 440-3592 Chapter 126. General Provisions Applicable to all Benefits 28 TAC sec.126.7 The Texas Workers' Compensation Commission adopts an amendment sec.126.7, concerning the injured employees choice of doctor, with changes to the proposed text as published in the January 21, 1992, issue of the Texas Register (17 TexReg 461). This section is necessary to accomplish the requirements of Article 8308-4.62 and to establish the circumstances under which an employee has made a selection of doctor and to specify when a visit to a doctor does not constitute the employee's choice. One change is in subsection (c)where the text "known as" replaced the proposed text "presumed to be," and the other change is in subsection (f) where the following text was added at the beginning of the subsection: "Except as provided in subsection (e) of this section,...." This section requires that the commission provide information to the injured employee regarding his or her right to choose a doctor. It also establishes the fact that initial treatment will usually be by the employee's choice of doctor except for those special circumstances involving the employer's salaried or contract doctors, emergency treatment doctors, or doctors selected by the employer or carrier. Changing doctors is described along with the employee's responsibility to notify the commission when such action is taken. Public comment regarding this section includes the following. Comment: the current rule specifies that the first doctor "shall be known as the employee's treating doctor." The proposed amendment changes the language to "shall be presumed to be." TAB objects to changing this to a mere presumption because the first doctor that treats a worker is clearly the worker's choice of doctor, unless exempt as provided by the Act. Comment: 60 days is too long. The injured employee should be able to decide who he or she wants to have treat them in 30 days. Also, the language of the rule should require the choice be made. Recommend replacing the word "should" with the word "must" in the second sentence and replacing 60 with 30 in the last sentence of subsection (f). Response: the commission disagrees. 60 days was a compromise agreement between the employer and employee members of the commission and there is no evidence to suggest that this time frame creates an undue hardship on anyone within the system. Comments were filed by the following in support of change to the rule as proposed: Texas Workers' Compensation Commission Medical Advisory Committee and Texas Association of Business. The amendment is adopted under Texas Civil Statutes, Article 8308-4.62, which give the injured employee the right to select a doctor, and Article 8308-2. 09(a), authorizing the commission to adopt rules necessary to implement and enforce the Texas Workers' Compensation Act. sec.126.7. Injured Employee's Choice of Doctor. (a)-(b)(No change. ) (c) Except as provided in subsections (d), (e), and (f) of this section, the first doctor, as defined in the Act, sec.1.03 (17), who provides health care to an injured employee shall be known as the injured employee's initial choice of treating doctor. (d)-(e)(No change.) (f) Except as provided in subsection (e) of this section, the receipt of health care from a doctor selected by the employer or carrier does not, by itself, constitute the injured employee's initial choice of treating doctor. The employee should choose a treating doctor and notify the commission of that choice as soon as possible. However, if this doctor continues to treat the injured employee for a period of 60 days, the doctor is then deemed to be the injured employee's first choice of treating doctor. (g)-(k)(No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205756 Susan Cory General Counsel Texas Workers' Compensation Commission Effective date: June 1, 1992 Proposal publication date: April 27, 1992 For further information, please call: (512) 440-3592 Chapter 133. General Medical Provisions Subchapter B. Required Reports 28 TAC sec.133.101 The Texas Workers' Compensation Commission adopts man amendment to sec.133. 101, concerning required reports, with changes to the proposed text as published in the January 21, 1992, issue of the Texas Register (17 TexReg 462). This section is necessary to accomplish the requirements of Article 8308-4.66 and to establish the circumstances under which the doctor must file an initial report of treatment. The changes involve inserting "more than" before "one full shift" in subsections (a), (b)(1) and (b)(2). This section requires that the doctor submit a report only when the worker has lost or will lose time from work. The doctor will be required to determine whether the nature of the injury will require more than one full day or one full shift away from the job. The only public comment regarding this section was as follows. Comment: in subsections (a) and (b)(1) and (2) insert the words "more than" before "one full shift" to eliminate a possible ambiguity. The amendment is adopted under Texas Civil Statutes, Article 8308-4.66(a), which requires the commission to adopt rules to specify the requirements for reports and records to be filed with the commission and Article 8308-2.09(a), authorizing the commission to adopt rules necessary to implement and enforce the Texas Workers' Compensation Act. sec.133.101. Initial Medical Report. (a) The treating doctor shall complete Form TWCC-61, Initial Medical Report, for every occupational disease, and every accidental injury resulting in loss of more than one full day or more than one full shift from work, and submit it to the carrier, the commission, and the injured employee or his/her representative within 10 days of the initial visit. (b) The treating doctor is not required to complete and submit Form TWCC-61, Initial Medical Report, for an accidental injury if, at the time of the initial visit, the treating doctor: (1) knows that the injured employee has not lost more than one full day or more than one full shift of work prior to the visit; (2) does not anticipate that the employee will lose more than one full day or more than one full shift of work after the visit; and (3) releases the injured worker to return to work with no restrictions. (c) A treating doctor exempted from the reporting requirement by subsection (b) of this section must complete and submit Form TWCC-61, Initial Medical Report, upon receipt of a request from the carrier, the commission, or the injured worker or representative. Accordingly, the doctor's clinical notes from the initial visit must be adequate for this purpose. (d) Nothing in this rule relieves a doctor from the requirement of filing Form TWCC-69, Report of Medical Evaluation, as provided by sec.130.1 of this title (relating to Reports of Medical Evaluation: Maximum Medical Improvement and Permanent Impairment), when certifying maximum medical improvement or assigning an impairment rating. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205757 Susan Cory General Counsel Texas Workers' Compensation Commission Effective date: June 1, 1992 Proposal publication date: January 21, 1992 For further information, please call: (512) 440-3592 Subchapter E. Compelling Production of Documents 28 TAC sec.133.401 The Texas Workers' Compensation Commission adopts new sec. sec.133.401-133.403. Section 133.402 is adopted with changes to the proposed text as published in the February 4, 1992, issue of the Texas Register (17 TexReg 932). Section 133.401 and sec.133.403 are adopted without changes and will not be republished. The changes made to the text of sec.133.402 were limited to the substitution of the word "providing" for the word "producing" in the first sentence of subsection (b), and dropping the phrase "for the convenience of the person served" from the last sentence of subsection (b). These sections are necessary to establish the mechanism for issuing an order to require production of documents considered by the commission as necessary to meet the information needs of the Medical Review Division and to describe for the public the effects of the order and the possible outcome for failure to comply. These sections allow the commission to issue an order for the production of documents and require whoever receives the order to produce the documents requested. Use of an order as contemplated by these sections allows the commission to apply penalties and sanctions provided in the Texas Workers' Compensation Act. No comments were received regarding adoption of the new sections. The new sections are adopted under Texas Civil Statutes, Article 8308-8.21(b) (7), which require the commission to promulgate rules necessary to enable the commission to compel the production of documents, Article 8308-10.21(b)(3), which establishe a penalty for violating an order of the commission, and Article 8308 -2.09(a), authorizing the commission to adopt rules necessary to implement and enforce the Texas Workers' Compensation Act. sec.133.402. Delivery of Order; Compliance. (a) Service shall be completed by delivery of a copy of the order to the individual named in the order, in person or by certified mail, return receipt requested. (b) The individual served shall comply with the order on or before the time and date stated in the order by providing the described documents to the designated agency employee. Copies of such documents may be substituted for originals. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205758 Susan Cory General Counsel Texas Workers' Compensation Commission Effective date: June 1, 1992 Proposal publication date: February 4, 1992 For further information, please call: (512) 440-3592 Chapter 134. Guidelines for Medical Services, Charges, and Payments Subchapter I. Provider Billing Procedures 28 TAC sec.sec.134.800-134.802 The Texas Workers' Compensation Commission adopts amendments to sec.sec.134. 800-134.802, concerning health care provider billing. Section 134.801 and sec.134. 802 are adopted with changes to the proposed text as published in the December 20, 1991, issue of the Texas Register (16 TexReg 7441). Section 134.800 is adopted without changes and will not be republished. The changes to sec.134.801 include adding the following to the end of subsection (a): "If the employer is billed, a copy of the bill submitted to the carrier shall state the following in bold type: 'THIS IS ONLY AN INFORMATION COPY, IT IS NOT A REQUEST FOR PAYMENT.'"; removing the words "less than" from the first sentence of subsection (b) and adding "or less" to the end of that sentence; deleting the words "the employer" from the second sentence of subsection (e); and inserting the following sentence after the second sentence of subsection (e): "Upon request the provider shall also submit a copy of the bill, as submitted for payment to the employer, and may charge the employer the fee for copies of reports as described in sec.133.106(f)(3) of this title (relating to Fair and Reasonable Fees for Required Reports and Records)." The only change to sec.134.802 is the addition of the phrase "if not paid in full" to the end of subsection (d)(10). These sections are necessary to accomplish the requirements of Article 8308-8. 21 and to establish when a health care provider is to submit a bill, what information they must include, and the form of their submission. These sections require that the health care provider submit bills on forms prescribed by the commission and that they include information which the commission will describe in the instructions for the completion of the forms. These sections provide specific controls over what health care providers need to include to notify of "rebillings" and what they have to do when billing an employer for medical services. It should be noted that the "election period" specified in sec.134.801 continues from the time the health care provider bills the employer until the health care provider requests payment of bills from the insurance carrier. Public comments regarding these sections included the following: Comment: support adoption of sec.134.800 as published in the December 20, 1991, issue of the Texas Register. Comment: the way sec.134.801 is set up, it allows providers to deny employers the right to initiate compensation as provided by the Act. The rule should be changed to require employers to comply with the Act and rules regarding promptness, interest, and dispute resolution when they choose to pay provider bills. Response: the commission disagrees. The Act, sec.4.68 and sec.8.01(b), place responsibility for appropriate payment of charges for health care with the insurance carrier and contain no mention of the employer. Section 8.27(a) sets the trigger date for interest at 60 days after the health care provider submits the bill to the insurance carrier. Section 8.26(a) provides that "a party" may request dispute resolution. Employers are not defined as "a party" either in the Act or in commission rules. Comment: the right to prompt payment and interest on delayed payment should only apply if the provider billed promptly and properly. Response: the commission disagrees. Providers are entitled to timely payment of bills and they are entitled to interest on late payments as provided in the Act, sec.8.27. Timely payment of the bill is based on the date it is submitted, not whether it was submitted timely by the provider. Comment: providers should not have to waive rights in order to allow a willing employer to pay medical benefits. The employer has the right to initiate those payments and the fee guidelines were based on a balance of fair and reasonable against increased security of payment. Response: the commission disagrees. While it is true that the guidelines set fees based in part on the reasonable expectation of payment, it is also true that the Act did not bind the employer to the same standards as the carrier was bound in the payment of medical bills. It appears health care providers never had the right to prompt payment, interest on delayed payment, and administrative dispute resolution when it comes to payment by an employer, so the act of choosing to bill the employer is the same as electing to waive rights that would have existed by billing the carrier. Comments in support of these sections were received from the Alliance of American Insurers. Comments in support of changes to the rules as proposed were received from: TUElectric; American Rehabilitation Center; and Care Clinic. The amendments are adopted under Texas Civil Statutes, Article 8308-8.21(a), which requires the commission to promulgate rules to regulate the provision of medical services and the fees charged for those services and Article 8308 2.09(a) , authorizing the commission to adopt rules necessary to implement and enforce the Texas Workers' Compensation Act. sec.134.801. Submitting Bills for Payment: Information Copies. (a) Submitting bills for payment. The health care provider shall submit all medical bills to the insurance carrier. The provider may elect to submit bills to an employer who has indicated a willingness to pay them. If the employer is billed, a copy of the bill submitted to the carrier shall state the following in bold type: "THIS IS ONLY AN INFORMATION COPY, IT IS NOT A REQUEST FOR PAYMENT." (b) Waiver of rights. A provider who elects to submit bills to an employer waives, for the duration of the election period, the rights to: (1) prompt payment, as provided by the Texas Workers' Compensation Commission Act (the Act), Article 8308-4.68; (2) interest for delayed payment as provided by the Act, Article 8308-8.27; and (3) commission-provided medical dispute resolution as provided by the Act, Article 8308-8.26. (c) Time for submission-health care practitioners. Health care practitioners (as defined in the Act, sec.1.03(22)) shall submit to the carrier a properly completed bill within 15 days after the initial service or treatment date. Subsequent billing shall be at least monthly for services and treatments rendered. (d) Time for submission-health care facilities. For inpatient services, health care facilities (as defined in the Act, sec.1. 03(21)) shall submit bills to the insurance carrier within 10 days after discharge, if the confinement is 30 days or less. If the confinement is greater than 30 days, the facilities shall submit an interim bill within 45 days of admission and then at least every 30 days until discharge. The final bill shall be submitted within 10 days of discharge. For outpatient services, bills shall be submitted at least monthly to the insurance carrier. (e) Providing information copies of bills. Upon request the provider shall send, at no cost, a copy of the bill, as submitted for payment, to the employee, the employee's representative, or the commission. Upon request the provider shall also submit a copy of the bill, as submitted for payment to the employer, and may charge the employer the fee for copies of reports as described in sec.133.106(f)(3) of this title (relating to Fair and Reasonable Fees for Required Reports and Records). Information copies shall state the following in bold type: "THIS IS ONLY AN INFORMATION COPY, IT IS NOT A REQUEST FOR PAYMENT." sec.134.802. Insurance Carrier's Submission of Medical Bills to the Commission. (a) Within 15 days after final payment of an original bill from a health care provider, or reimbursement to any person who has paid a health care provider's bill, insurance carriers shall submit a copy of the bill with the information described in subsections (c) and (d) of this section to the commission in Austin. Upon written approval by the commission, the insurance carrier may submit the information described in this rule electronically, in a form and format prescribed by the commission. (b)-(c) (No change.) (d) In addition to the information in subsection (c) of this section, the insurance carrier shall include the following information for each service, treatment, or medication charged by the provider: (1)-(6) (No change.) (7) the charge; (8) the date of reimbursement; (9) amount paid; and (10) exception code, if not paid in full. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205759 Susan Cory General Counsel Texas Workers' Compensation Comission Effective date: June 1, 1992 Proposal publication date: December 20, 1991 For further information, please call: (512) 440-3592 Chapter 152. Attorneys' Fees 28 TAC sec.152.3 The Texas Workers' Compensation Commission adopts an amendment to sec.152.3, concerning approval of fee by commission, with changes to the proposed text as published in the February 4, 1992, issue of the Texas Register (17 TexReg 933). The change made was in subsection (e) and involved returning the time limit to 14 days rather than five. This section is necessary to establish the process by which attorneys get commission review and approval of fees subject to Article 8308-4.09 and Article 8308-4.091. This section requires attorneys to complete a form and provide specific information about their time and expenses involved in a case. The only public comments regarding this section stated the following: Comment: opposed to the change in subsection (e) which reduces carrier's time to comply with a fee order. Five days is unreasonable, burdensome, and would serve no useful purpose. The amendment is adopted under Texas Civil Statutes, Article 8308-4.09 and 4. 091, authorizing the commission to adopt rules regarding payment of attorneys, and Texas Civil Statutes, Article 8308-2.09(a), authorizing the commission to adopt rules necessary to implement and enforce the Texas Workers' Compensation Act. sec.152.3. Approval of Fee by Commission. (a) To claim a fee, an attorney representing any party shall submit written evidence of the attorney's time and expenses on Form TWCC-152, Application and Order for Attorney's Fees. (b)-(d) (No change.) (e) The carrier shall pay, pursuant to the order of the commission, an attorney's fee no later than 14 days after receipt of approval by the commission. For purposes of this section, the date of payment is the date that the initial check for the attorney's fee is mailed, unless the order is contested by any party. (f) Except as provided in subsection (g) of this section, an attorney, claimant, or carrier who contests the fee fixed and approved by the commission shall request a benefit contested case hearing by certified mail, return receipt requested, no later than seven days after the date of the commission's order. The contesting party shall send a copy of the request, by certified mail, return receipt requested, to the carrier and, by regular mail to the other parties, including the claimant. Notice of a contest shall relieve the carrier of the obligation to pay, according to the commission's order, until such time that the commission enters a subsequent order. (g) An attorney, claimant, or carrier who contests the fee ordered by a hearing officer after a benefit contested case hearing shall request review by the appeals panel pursuant to the provisions of sec.143.3 of this title (relating to Requesting the Appeals Panel to review the Decision of the Hearing Officer). This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205760 Susan Cory General Counsel Texas Workers' Compensation Commission Effective date: June 1, 1992 Proposal publication date: February 14, 1992 For further information, please call: (512) 440-3592 Chapter 160. General Provisions 28 TAC sec.160.2 The Texas Workers' Compensation Commission adopts new sec.160.2, without changes to the text as published in the January 21, 1992, issue of the Texas Register (17 TexReg 463). This section is necessary to accomplish the requirements of Article 8308-7. 03(b) and to establish that nonsubscribing employers must report injuries to the commission and that the report must be as prescribed by the commission. This section requires that the nonsubscribing employer keep a record of all injuries and report those that involve occupational disease or loss of more than one day from work. This report will be in the form of a log of injuries and will be required monthly based on the commission form and instructions. There were a few public comments regarding this section as follows: Comment: To conform with the requirements for subscribing employers, suggest adding the words "by an employee" after the words "occupational disease" in subsection (a). Response: Disagree. The requirement for employers reporting occupational diseases as found in the Act, sec.7.03(b) includes any "occupational disease of which the employer has knowledge." Comment: The rule should provide that injury information from nonsubscribers be confidential, as it is for subscribers. Response: Disagree. Government records cannot be made confidential by rule. Public access to information is governed by the Open Records Act. However, Article 8308-7.03 does make the identity of the employee confidential. Comment: The rule should make it clear that injury information provided by a nonsubscriber is no more an admission that the injury occurred than it is for the subscribers. Response: Disagree. Article 8308-5.05(b), states that any report submitted under sec.7.03(b) may not be considered admissions or evidence against the employer or the insurance carrier in any proceeding before the commission or a court. There is no need to restate that statutory provision in this rule. Comment: Subsection (a) of the rule seems to require a report of each injury at the time of injury, while subsection (c) requires a second report cumulating all injuries on a monthly basis. The rule needs to be clarified to establish whether the commission requires one or two reports. Response: Disagree. Subsection (b) specifies that the report of injury be on a form prescribed by the commission. The form prescribed by the commission for nonsubscribing employers requires only a cumulative report of injuries. Comments were received from the following in support of changes to the rule as proposed: Texas Association of Business; Texas Association of Responsible Nonsubscribers (TXANS); and Rollins Burdick Hunter Agency of Texas, Inc. This section is adopted under Texas Civil Statutes, Article 8308-7.03(b) which requires the commission to promulgate rules and prescribe the form and manner of employer's injury reports and Article 8308-2.09(a), authorizing the commission to adopt rules necessary to implement and enforce the Texas Workers' Compensation Act. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205761 Susan Cory General Counsel Texas Workers' Compensation Commission Effective date: June 1, 1992 Proposal publication date: January 21, 1992 For further information, please call: (512) 440-3592 TITLE 31. NATURAL RESOURCES AND CONSERVATION Part XVII. Texas State Soil and Water Conservation Board Chapter 519. Technical Assistance Subchapter A. Technical Assistance Program 31 TAC sec.519.8 The Texas State Soil and Water Conservation Board adopts an amendment to sec.519.8, concerning eligible pay rates, without changes to the proposed text as published in the January 17, 1992, issue of the Texas Register (17 TexReg 389). The amendment establishes eligible pay rates for the Technical Assistance Program. The amendment sets the maximum hourly pay rate and annual amount that districts may pay for technicians wages or salaries in order to be eligible for reimbursement and procedures for exceptions to the rule. No comments were received regarding adoption of the amendment. The amendment is adopted under the Agriculture Code, Chapter 201.020, which provides the Texas State Soil and Water Conservation Board with the authority to adopt rules as necessary for the performance of its functions under the Agriculture Code. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Temple, Texas on April 24, 1992. TRD-9205764 Robert G. Buckley Executive Director Texas State Soil and Water Conservation Board Effective date: May 18, 1992 Proposal publication date: January 17, 1992 For further information, please call: (817) 773-2250 TITLE 34. PUBLIC FINANCE Part IV. Employees Retirement System of Texas Chapter 81. Insurance 34 TAC sec.sec.81.1, 81.3, 81.5, 81.7, 81.11 The Employees Retirement System of Texas adopts amendments to sec.sec.81.1, 81. 3, 81.5, 81.7, and 81.11, concerning insurance, without changes to the proposed text as published in the February 21, 1992, issue of the Texas Register (17 TexReg 13). House Bill 2, as passed by the 72nd Legislature, requires the enrollment of employees and retirees of certain institutions of higher education into the Uniform Group Insurance Program beginning September 1, 1992. Senate Bill 1331 amends the minimum number of years to be eligible for service retirement but continues to require a minimum of 10 years' service for a retiree to be eligible for the Uniform Group Insurance Program. The adopted amendments reflect these legislative changes. Senate Bill 1331 provides coverage for grandchildren. Technical corrections were also made to certain sections. These amendments will allow the ERS to administer the Uniform Group Insurance Program in accordance with the intent of the Texas Legislature. Employees and retirees of applicable institutions of higher education will be defined as employees in the Trustee Rules and eligible for participation. Also, the amendments will clarify the retirees who are eligible to participate in the Uniform Group Insurance Program. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Insurance Code, Article 3.50-2, sec.4, which provides the Employees Retirement System of Texas with the authority to promulgate all rules, regulations, plans, procedures, and orders reasonably necessary to implement and carry out the purposes and provisions of the Texas Employees Group Insurance Benefits Act. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on April 27, 1992. TRD-9205858 Charles D. Travis Executive Director Employees Retirement System of Texas Effective date: May 19, 1992 Proposal publication date: February 21, 1992 For further information, please call: (512) 867-3336