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 IV. Office of the Secretary of State Chapter 81. Elections Voting Systems 1 TAC sec.81.60 The Office of the Secretary of State adopts new sec.81.60 concerning voting system certification procedures, with changes to the proposed text as published in the July 28, 1992, issue of the Texas Register (17 TexReg 5261). The Texas Election Code is silent concerning some of the specific procedures necessary to conduct a certification examination of voting systems. In paragraph (2), the word "vendor" was changed to "applicant" in order to better define who may apply for certification. The words "six codes" was changed to "six copies" to correct a typographical error. Paragraph (3) was changed in its entirety to better define the certification fee for a new voting system, and the certification fee for a modification to a voting system. In paragraph (4), the words "unless extenuating circumstances provide otherwise" were added to allow different examination dates for special circumstances. Paragraph (7) was changed in its entirety, and no longer concerns confidentiality statements. Paragraph (7) now provides that applicants must furnish sample ballots, which will facilitate the examination procedure. The secretary of state is required to obtain and maintain uniformity in the application, operation, and interpretation of the Election Code and of the election laws outside the Election Code (Texas Election Code, sec.31.003 (Vernon 1986)). To perform this duty, the secretary is required to prepare detailed and comprehensive written directives and instructions relating to and based on the Election Code and the election laws outside the Election Code. Id. This directive is submitted to facilitate the certification of voting systems. No comments were received regarding adoption of the new section. The new section is adopted under the Texas Election Code, sec.31.003, which provides the secretary of state with authority to obtain and maintain uniformity in the application, operation, and interpretation of election laws, and prepare detailed and comprehensive written directives and instructions relating to election laws. sec.81.60. Voting System Certification Procedures. In addition to the procedures prescribed by Chapter 122 of the Texas Election Code, compliance with the following procedures is required for certification of a voting system. (1) The entity applying for certification must complete Forms 100 and 101 prescribed by the secretary of state, and deliver them to the secretary of state no later than 45 days prior to examination. (2) The applicant must deliver four copies of all relevant software and source codes and six copies of any user and/or reference manuals to the office of the secretary of state no later than 45 days prior to the examination. (3) The certification fee for a new system is $3,000 and must be received by the secretary of state 45 days prior to examination. The certification fee for a modification of a voting system shall be determined by the secretary of state according to the complexity of the modification and must be received by the secretary of state 45 days prior to the examination. (4) Certification examinations will be scheduled by the secretary of state three times a year during the months of January, May, and September, unless extenuating circumstances provide otherwise. (5) The time and date of each examination will not be scheduled until after the entity applying for certification has delivered all forms, software, source codes, user and/or reference manuals, and fees to the secretary of state. (6) All physical examinations of voting systems will take place at the Office of Secretary of State, Elections Division, in Austin, unless extenuating circumstances require otherwise. (7) The applicant shall furnish sample ballots at the time of examination, which will allow the examiners to test the voting system(s) using all ballot styles permitted under Texas law. (8) All examinations must be videotaped by the secretary of state. (9) Each examiner must submit a written report to the secretary of state stating his or her findings for each voting system no later than the 45th day after examination. (10) An examiner appointed by the secretary of state will be compensated after he or she files his or her written report. (11) The secretary of state must approve or disapprove the voting system(s) within 30 days of receipt of all the examiners' reports. 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 October 2, 1992. TRD-9213382 Tom Harrison Deputy Assistant Secretary of State Office of the Secretary of State Effective date: October 23, 1992 Proposal publication date: July 28, 1992 For further information, please call: (512) 463-5650 TITLE 10. COMMUNITY DEVELOPMENT Part I. Texas Department of Housing and Community Affairs (Editor's Note: House Bill 7, 72nd Legislature, First Called Session, (Texas Civil Statutes, Article 4413, Chapter 15, sec.1.15) provides for the transfer of the Low Income Home Energy Assistance Program and the Emergency Nutrition and Temporary Emergency Relief Program from the Texas Department of Human Services to the Texas Department of Housing and Community Affairs effective September 1, 1992. The Texas Register is administratively transferring the following rules listed in the table below from Title 40. Part I. Texas Department of Human Resources to Title 10. Part I. Texas Department of Housing and Community Affairs. The table lists the new section number and the old section number that correspond to them. Copies of the rules may be obtain from the offices of the Texas Register by calling (512) 463-5561.) Chapter 9. Texas Community Development Program Subchapter A. Allocation of Program Funds 10 TAC sec.9.7 The Texas Department of Housing and Community Affairs (TDHCA) adopts the repeal of sec.9.7, concerning governor's special assistance fund for small and minority businesses, without changes to the proposed text as published in the July 14, 1992, issue of the Texas Register (17 TexReg 5003). The repeal deletes the requirements for the governor's special assistance fund for small and minority businesses which has been discontinued as a separate program. The activities formerly available for funding under this section are now part of the small and minority businesses loan program of the Texas Capital Fund. (See 10 TAC sec.9.3). No comments were received regarding adoption of the repeal. The repeal 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 September 29, 1992. TRD-9213296 Susan J. Leigh Executive Director Texas Department of Housing and Community Affairs Effective date: October 22, 1992 Proposal publication date: July 14, 1992 For further information, please call: (512) 475-9516 TITLE 16. ECONOMIC REGULATION Part II. Public Utility Commission of Texas Chapter 23. Substantive Rules Rates 16 TAC sec.23.23 The Public Utility Commission (PUC) adopts an amendment to sec.23.23, concerning rates, with changes to the proposed text published in the March 31, 1992, issue of the Texas Register, (17 TexReg 2323). The amendment being adopted allows utilities to request certification of long- term fuel contracts. Under the amendment, certification will be granted if the commission finds the contract to be reasonable as a whole. The amendment specifies the procedures and standards to be used in the certification process, as well as, the effect of certification. The original proposal was more extensive and made changes to the manner in which the commission regulates fuel costs. Given the comments, the commission is adopting only the contract certification portion of the rule. The commission solicited comments and replies to comments on the original proposal. Parties filing comments were Arco Oil and Gas Company and Arco Natural Gas Marketing (Arco), Association of Texas Intrastate Natural Gas Pipelines, Brazos Electric Power Cooperative (Brazos), Central and South West Services (CSW), Coastal States Management Corporation (Coastal), Consumers Union and Public Citizen (Consumers Union), City of El Paso (El Paso), El Paso Electric Company (EPEC), Environmental Defense Fund (EDF), Guadalupe Valley Electric Cooperative (GVEC), Gulf States Utilities Company (GSU), Houston Lighting & Power Company (HL&P), Lower Colorado River Authority (LCRA), an individual, a state representative, Office of Public Utility Counsel (OPC), San Miguel Electric Cooperative, Inc. (San Miguel), Southwestern Public Service Company (SPS), Tex-La Electric Cooperative of Texas, Inc. and Northeast Texas Electric Cooperative, Inc. (Tex-La), Texas Cotton Ginners' Association and Texas Agriculture Cooperative Council (Cotton Ginners), Texas Gas Association, Texas Electric Cooperatives, Inc. (Coops), Texas Utilities Electric Company (TU Electric), and Texas Industrial Energy Consumers (TIEC). In addition to requesting comments and replies to comments, the commission held a one-day forum to discuss the proposal, and the commission's general counsel conducted four days of workshop discussions between the parties expressing an interest in the proposed amendments. The changes to the original proposal are a result of the comments, the discussions, and agreements made at the workshops, and the points made at the forum. Some parties opposed the amendments as a whole. Brazos Electric Power Cooperative, (Brazos) contended that because of the additional burden placed on staff and the utilities, the proposed rule would be costly to taxpayers and ratepayers. Brazos saw no significant benefit to the rule and requested that costs be further quantified before the rule is adopted. Consumers Union and Public Citizen (Consumers Union) opposed the proposal. They commented that both parts of the proposal, certification and semi-annual setting of the fuel factor, had been considered and rejected by the legislature in the last session. Consumers Union further commented that the proposal would interfere with Integrated Resource Planning by locking utilities into long-term contracts and thus remove any incentive to conserve. Consumers Union commented that the proposal will put a substantial additional burden on an already burdened commission staff and OPC. Also, the rule should provide for reimbursement of municipal expenses. Consumers Union commented that the time lines were too short and notice inadequate. LCRA commented that the deadlines for filing comments on the proposal gave insufficient time to fairly analyze the rule proposal and that a committee of interested persons should be established. Tex-La Electric Cooperative of Texas, Inc. and Northeast Texas Electric Cooperative, Inc., (Tex-La) opposed the rule proposal and recommended its denial. Tex-La commented that the existing fuel rule has worked reasonably well. Tex-La commented that Enron has underestimated the demands the rule would place on the commission. Texas Cotton Ginners' Association and Texas Agriculture Cooperative Council (Cotton Ginners) commented that the rule had two parts, certification and the faster pass-through of costs, and both parts had been considered and rejected by the legislature. The commission believes there is some merit to these comments to the original proposal. However, the proposal being adopted is substantially changed from that originally proposed. It is different from the proposal considered by the legislature and presents much less of a burden on the commission and the utilities. In addition, the commission is adopting only a portion of the original proposal. The changes that were made are discussed in the following. Others parties supported the amendments as a whole and recommended only minor changes. HL&P was supportive of the proposal and recommended some minor modifications. HL&P commented that the rule provided for more timely changes in the fuel factor so it could better track cost and reduce refunds. HL&P also supported the requirement that reconciliations occur every two years. TU Electric supported the rule and recommended some relatively minor changes. However, TU Electric cautioned that the commission should not engage in micro- managing a utility via the contract certification process. A number of parties filed comments in support of the proposed amendments concerning the certification of long-term natural gas contracts. Arco commented that they generally supported the proposed amendments. Arco suggested that the commission should set guidelines for the purchase of natural gas that would allow the utilities great flexibility in creating a portfolio of spot, intermediate, and long-term contracts. Arco commented that long-term contracts offer distinct advantages by creating price stability, reducing transaction costs associated with a large number of spot contracts, and providing reliability through a security of supply. Arco noted that security of supply requires a premium to allow producers to explore for new gas. Arco commented that the certification proposal gives the utilities security and stability. Arco also commented that there are big picture benefits to long-term contracting for natural gas, including a stable gas market, Texas jobs, national energy security and balance of payment benefits, and impressive environmental benefits. Association Of Texas Intrastate Natural Gas Pipelines (the Association), commented in support of the rule. The Association noted the benefits of natural gas, including the effect on state tax revenues. The Association commented that they believed that utilities were hesitant to enter long-term contracts for fear of regulatory treatment if there were unforeseeable changes in market conditions. The Association noted that utilities have increased their reliance on spot gas, putting at risk their customers to the hazards of wide market swings. The Association commented that there is substantial risk to long term purchases of gas unless the commission reviews the purchases on a timely basis. CSW supported the certification of long-term natural gas contracts but did express some concern that the commission's role would be overly intrusive and dampen a utility's ability to negotiate and renegotiate contracts. Coastal States Management Corporation supported the rule, stating that certification of long-term gas contracts would support new pipeline construction, increase gas demand, benefit consumers by assuring supply and price stability, and provide producers with a stable cash flow. Coastal, however, had some concerns, those being that the rule did not limit certification to new contracts, that the rule should specify that inaction by the commission on an application for certification means the contract is deemed certified, that the commission should exercise restraint in the information requested in a certification proceeding, that the confidentiality of contracts used for comparison should be ensured, and that the commission should not become a negotiator of contracts under the rule. EPEC supported the concept of certification of long-term natural gas contracts, but expressed some reservations: the possible hindrance of negotiation by delays in getting contracts certified; the commission may be put in the role of negotiator; the utility still faces risks in the administration of the contract; and it is questionable whether the commission has authority to certify such contracts. An individual supported the rule. He commented on the severe plight of the natural gas industry in Texas and noted that long-term contracts are seen as one of the best solutions to the current uncertainty in the market. He urged the building of bridges between the gas industry and electric utilities in order to work together. He encouraged the commission to adopt whatever rule is most appropriate to encourage long-term contracting. A state representative supported the proposal. He commented that he had sponsored House Bill 2853, which was intended to create incentives for natural gas, during the last legislative session. He noted that natural gas is considered to be one of the cleanest burning and least costly fuel alternatives. Texas Gas Association supported the rule. They commented that the current reliance on short-term supplies was ill advised, as was displacing clean burning natural gas with other fuels. Texas Gas commented it was in the economic interest of Texas and its citizens to allow utilities to certify long-term gas contracts rather than have utilities take the risks of the current system of reviewing fuel costs. Texas Electric Cooperatives, Inc. (Coops) supported the concept of certifying long-term contracts. On the other side, several parties filed comments opposing the amendments concerning the certification of long-term natural gas contracts. Brazos commented the certification of long-term contracts was not good public policy because the cost of implementing would exceed the benefit to be derived. Brazos viewed the proposal for certification to invite an overly intrusive role in the management prerogatives and into areas better suited for the Railroad Commission which could see the full picture of the natural gas industry. Brazos believed that the additional cost caused by the certification of long- term natural gas costs would be substantial for both the commission and the utilities. Brazos also stated that if the certifications are not mandatory, the natural gas sellers will oppose subjecting their contracts to the process and thus emasculate the rule. Brazos suggested that the benefits of certification may be illusory because the commission may be inclined to generally deny certification because there is no consequence to doing so and administration of the contract is still subject to review. Consumers Union commented that certification forwarded no public policy and would not result in lower costs to ratepayers if the contracts provided for automatic adjustments in price. The City of El Paso commented that certification of long-term natural gas contracts may benefit gas suppliers and utility management, but it would not benefit ratepayers because of the risk a certified contract may result in unreasonable price. El Paso stated that the commission has not been granted the authority to certify long-term natural gas contracts. The Environmental Defense Fund (EDF) opposed the rule. EDF commented that the proposal will undermine IRP efforts, may lead to over-consumption of natural gas, and overburden the resources of the public and PUC. In regard to the conflict with IRP efforts, EDF maintained that the proposal provides a piecemeal approach rather than a broad review of the fuel purchase planning process. EDF commented that by locking into long term contracts, utilities may be forced to burn gas they otherwise would not have and this could discourage DSM initiatives and the use of renewables. GSU commented that making contracts subject to certification may result in the supplier demanding a premium. GSU commented that certification proceedings could develop into full blown hearings and would not reduce the work required in reconciliation because of the need to review the administration of the contract and utility operations. GSU stated that the end result of the certification rule may be that the gas suppliers are given an advantage in negotiation. OPC commented that the proposed rule should be rejected. OPC commented that the proposed rule is inconsistent with integrated resource planning. OPC maintained that the certification of long-term natural gas contracts approaches the problem from the wrong way; instead, a fuel procurement policy should be approved with the integrated resource plan. The utility would then know what fuel it needs rather than the piecemeal approach by the certification rule. OPC commented that the proposed rule certification is unnecessary because the commission already has the authority to encourage utilities to increase the use of natural gas. It can encourage the use of natural gas by favoring the construction of generating units fuel by natural gas over units powered by other sources of fuel. OPC commented that the proposed rule cannot be justified because of a failure of regulation. Comparing the situation to the treatment afforded utilities in regard to nuclear power plants, OPC pointed out that the wails regarding unfair treatment is not determinative of whether unfair treatment really occurred. OPC commented that the proposed rule would intrude upon management prerogatives, and that traditional regulation does not involve the regulator with the day-to-day decisions of the utility. The commission should not carve out this exception. OPC commented that the utility may already face a greater risk of disallowance with a coal or nuclear plant, and thus, there already is a reason for utilities to favor gas. OPC expressed suspicion that the utilities were feeding Enron a line when the utilities represented that the reason that they were not buying gas was fear of disallowance and that the real reason may be the utilities already have all the gas they can use. OPC commented that the proposed rule may fail to encourage the use of natural gas by utilities outside of Texas because certification of gas contracts would most likely be opposed, would be seen as a parochial effort by Texas to help Texas, and would be contrary to integrated resource plans already in place in the other states. OPC commented that the proposed rule is overbroad in that partial certification would work as well. Enron's concern is the pricing, so the certification should be limited to pricing. OPC commented that the proposed rule will create a proliferation of cases and thus stretch the commission's and OPC's resources. The Cotton Ginners also suggested that the commission does not have the resources, particularly the fuel staff, to effectively review long-term contracts as would be required by this rule. Southwestern Public Service Company (SPS) opposed the certification portion of the rule because it invited an overly intrusive role into negotiation of contracts by the commission. SPS requested that a waiver provision be put into the rule to allow waiver from specific provisions upon the showing of special circumstances. Texas Industrial Energy Consumers (TIEC) opposed the contract certification portion of the rule. TIEC questioned the legality of the rule and noted that there is no specific authorization of certification of contracts in the Public Utility Regulatory Act (PURA). TIEC commented that the provision of the rule that prevents further review of a contract after certification violates the requirements of PURA that a hearing be held on changes in fuel costs and that there be no automatic pass-through of costs. TIEC commented that certification of long-term gas contracts is not good public policy, is contrary to the interests of ratepayers, and shifts risks that there may be changes in fuel prices from the utility to the ratepayer. TIEC commented that the rule removes any incentive a utility has to remove itself from a bad contract. TIEC noted that it would be extremely difficult for the commission and the ratepayers to judge the reasonableness of a contract at the time it is entered. TIEC commented that it is the responsibility of the utility to prudently manage its business, and under the regulatory compact, the commission must be able to review utility actions. TIEC commented that the utility is expected to shoulder certain risks and the utility is compensated in its return for this risk. If the risk is removed, the cost of equity should be reduced. TIEC commented that the certification proposal may negate the ratepayer benefits occurring as a result of the restructuring of the natural gas industry- certification of long-term gas contracts may impede the flowthrough of the reduced prices resulting from the increased competition occurring in the gas industry as a result of the ongoing restructuring. The commission believes that the potential benefits of the rule outweigh the problems that may exist, and many of the problems suggested by the comments do not exist. The standard for review of the prudence of a decision is the same whether it is made at the same time as the utility or at a later date. There is not a shifting of risk as suggested by the comments. This part of the proposal will eliminate the risk that the commission could years later find the original contract to be imprudent. The certification process allows contemporaneous review based on timely market information. The proposal being adopted will allow the commission to take a proactive approach to reviewing fuel issues, rather than an after-the-fact look, where the sole remedy is to disallow costs already incurred. This gives the commission a vehicle to communicate to utilities the need to manage their resource portfolio prudently before they get in trouble. These benefits are worth the additional burden it may impose on the commission. The commission disagrees with the suggestion that the commission lacks authority to certify contracts. The commission is given broad discretion under PURA, sec.43(g). This is a legitimate exercise of that authority. A number of the comments focused in on specific provisions of the contract certification portion of the proposal. The commission believes many of these comments have merit and changes have been made in response to those comments. Furthermore, changes were made in response to discussions at the workshops. These changes, as discussed following, ameliorate many of the problems with the original proposal. Arco commented that certification should be not be limited to "non- interruptible" contracts. By limiting certification to "non-interruptible" supplies, Arco believes that the commission will be showing a preference for the most firm and thus most costly supplies. Arco submitted that utilities should be able to negotiate with more flexibility. Tex-La commented that if the rule is adopted it should not limit the type of long-term contract that could be certified, i.e.. interruptible contracts should be certifiable. The commission agrees. This change has been made. Brazos commented that if the commission was going to adopt a certification rule, the rule should be extended to all types of fuel. CSW, HL&P, the Coops, and TU Electric recommended that all types of fuel contracts be eligible for certification in order to not create an improper preference for gas at the expense of a proper fuel mix. This change has been made. Brazos commented that the requirement of comparison with "identified" contracts would require a larger staff and force investigation of areas beyond the commission's jurisdiction. GSU commented there may be confidentiality problems with the requirement that contracts be compared to other contracts or bids, subsection (a)(3)(A). OPC commented that there is a practical problem for all of the parties in getting comparable contracts and consequently being able to ascertain the lowest reasonable price. The Cotton Ginners noted that there is no provision requiring utilities to file all of their contracts with the commission so that all the contracts may be used to determine the reasonableness of the contract for which certification is requested. The Coops commented that the provision for comparison of the contract in question to proposals that the utility "could reasonably have obtained" is not workable because what could have been obtained is not provable. The commission recognizes that there are some problems inherent with comparing a contract to "identified contracts." Although this reference remains in the adopted version, the language has been changed to make it clear other, equally valid considerations may be made. The Coops commented that the commission should not be limited to considering proposals for comparable supply, processing, or storage, because some other combination of contracts may serve the same end even better but not provide a comparable supply, processing, or storage. With the language of the proposal being adopted, other packages of services, as suggested by the Coops, may be considered. Brazos stated that whether an economic out clause is reasonable depends on the particular facts of each contract. OPC commented that the existence of market- out clauses makes the concept of long-term contracts illusory. Tex-La commented that price adjustment clauses should be mandatory, should not track other utilities' gas supply costs, and should keep prices market sensitive. TIEC commented that economic-out clauses should be required. The commission agrees with Brazos's comment. Whether an economic-out or price adjustment clause is reasonable is dependent on the particular circumstances of the contract. Brazos stated that many of the other terms should be identified, including the term "reasonable." The commission believes that there is not a need to provide additional definitions. Brazos agreed any review should be "as of the time of" the execution of the contract. Brazos raised the question of how certification would be handled in proceedings other than a strictly certification proceeding. The commission does not see a need to clarify this; the same standards would apply except for the timelines. Brazos requested that the criteria listed in the rule be clarified by spelling out the weight to be given and whether the factors are positive or negative. CSW commented that the criteria for certification should be based on the "unique set of circumstances, on the whole existing at the time of execution" and not on just specific contract provisions. Otherwise, a utility's ability to obtain the most favorable contract will be hindered. EPEC commented that the wording of subsection (a)(4)(D) be clarified to make it clear that the additional considerations listed there are not required in every contract. GSU commented that the criteria for consideration of the reasonableness of a contract are overly constrained and questioned why options such as purchased power or demand side management are not included. GSU also was concerned whether the same criteria would be applied to non-certified contracts in reconciliation proceedings. GSU also commented that flexibility may be diminished by specific criteria on fuel mix and that the focus of the rule appears to be on new contracts. GSU recommended that the criteria refer to conditions at the time the contract was entered. GSU also stated that the criteria should not be specific standards, otherwise there will be strict terms for certified contracts, and the result will be, the utility's flexibility will be impaired and suppliers will be in an advantageous position in negotiation. OPC commented that the criteria for certification should be open ended and not limited by the rule. The Coops commented that the criteria for certification should not be limited, particularly because the list in the proposal does not require comparison to alternate fuels, and should include the criteria of reasonable, necessary, and in the public interest. The criteria have been changed to answer many of these concerns. The criteria in the amendment require specific items that the commission believes are necessary, yet is open-ended to allow parties to raise other issues. The commission believes this provides a proper balance between the competing concerns. The commission does not see a need to further clarify the criteria. Brazos suggested clarification is needed as to: what is meant by "other affected parties" in the notice provision; and what is meant by the phrase "as a whole" in regard to the commission's consideration of the contract. The notice provisions have been changed. The commission does not believe the phrase "as a whole" needs clarification. CSW and EPEC commented that all fuel contracts with a term greater than one year should be eligible for certification. The commission believes five years is more appropriate, particularly because of the time necessary to process a request for certification. EPEC commented that the wording of subsection (a)(2) be changed to prevent hindsight from still being used to judge a contract that is not immediately filed for review after execution. The commission believes that this change is unnecessary. The prohibition against hindsight is well understood. EPEC recommended that a deadline of 20 days be set for the review of a contract resubmitted for certification that was previously denied certification. The commission believes that this would be far too short. Gulf States Utilities Company (GSU) commented that despite the statement in subsection (a), long-term contracts have not been determined to be per se in the public interest. This phrase has been eliminated. GSU suggested that subsection (a)(1) be clarified as to whether a contract with less than five years remaining would be considered a long-term contract. The commission believes that this question is best addressed on a case-by-case basis. HL&P commented that the phrase "in light of the price under the contract" in subsection (a)(3)(D) should be eliminated because all of the terms of the contract should be considered in certifying a contract. The commission agrees. This phrase has been eliminated. HL&P suggested that subsection (a)(5)(C) should be clarified so that when the utility does not file the contract but requests a protective order, its filing will still be considered complete for purposes of receiving expedited treatment. The commission disagrees. Until the contract is filed, the timelines for expedited treatment should not be imposed. HL&P recommended that the rule provide that payments under a certified contract are reasonable and necessary operating expenses and that in considering whether a certified contract was prudently administered in a later reconciliation, the utility's action will not be found to be imprudent if in the "reasonable judgment of the utility" the prudent action proposed by an intervenor or general counsel would constitute an actionable breach of the contract. HL&P also proposes the rule clearly place the burden of proof on the party alleging imprudent conduct. The effect of certification provision has been clarified, but the commission disagrees with these changes proposed by HL&P. The utility has the burden of proof, including the burden of showing it has properly administered its contracts. HL&P recommended that the rule provide that if the commission denies certification to a contract, it should be required to give a detailed explanation of why the contract was denied certification. The commission believes this is unnecessary. LCRA commented that the language in subsection (a) should be changed from "failure to seek certification" to "choosing not to seek certification" in order to remove an inference regarding a utility's decision not to seek certification. This change has been made. LCRA recommended that the rule specify which respected forecasts will be used by the commission to predict gas prices. The commission believes that this is better done on a case-by-case basis. LCRA commented that the rule should define "affected person" as used in the notice section of the certification part of the rule. The notice provisions have been changed and the result is that this comment is no longer applicable. LCRA maintained that allowing the commission to later review a utility's exercise of discretion under the contract will undermine the potential benefits of the rule and cause utilities to avoid having discretion under the contracts. The commission believes it must retain the authority to review the reasonableness of the administration of a contract. OPC commented that the proposed rule should be limited to the certification of natural gas contracts because no supplier of other types of fuel has claimed that the lack of certification has created an impediment to the selling of their product and because expanding the rule would take away any advantage the rule gives to gas. However, if lack of certification prevented utilities from making otherwise rational choices, OPC saw little justification for distinguishing gas. As mentioned previously, the rule has been expanded to all fuels given some of the comments. OPC commented that it is unclear how the rule would treat contract extensions. The commission believes that this is better addressed on a case-by case-basis. OPC, TIEC, and the Cotton Ginners commented that the schedules in the rule do not provide adequate time. The proposal has been changed to extend the time. OPC and the Cotton Ginners commented that better notice should be required. The Coops recommended that notice in contract certification cases should be clarified and at a minimum be mailed to each of the parties to the utility's last case. The proposal has been changed to strengthen the notice requirements. OPC commented that the proposal provides no protection against material deficiencies. The proposal has been changed to clarify what is required of the utility for a filing to be considered adequate. OPC commented that the protective order provisions improperly place the burden on the intervenors to move for disclosure. The commission disagrees. The protective order provisions provide a balance to allow for administrative efficiency. OPC stated that given the market-out clauses, the commission should not be precluded from reviewing the contract in a reconciliation proceeding. To the extent this comment means that the commission may review the utility's actions in regard to the contract, the commission agrees. OPC commented that the staff should conduct workshops which would allow for greater and fairer public input. OPC maintained that written comments are insufficient to fully address the matter at hand. Workshops were conducted. Tex-La commented that to properly review a contract, the utility's entire fuel strategy would have to be reviewed and the proposal does not provide for such a depth of review. The timelines for certification have been extended to allow for a greater review. Tex-La commented that the rule puts a large responsibility on the commission and to meet that responsibility the commission will have to carefully investigate the supplier. The commission believes that whether the supplier needs to be "investigated" will have to be determined on a case-by case-basis. The Cotton Ginners commented that municipal intervenors may have difficulty participating because they would not be reimbursed under PURA, sec.24. The commission does not believe it would be appropriate to address the question of municipal reimbursement in this rulemaking proceeding. That question should be addressed in a separate rulemaking. Texas Electric Cooperatives, Inc. (Coops) recommended that to provide assurances of the reasonableness of the contract, guidelines should be established for competitive bidding for fuel supplies. The commission disagrees. The manner by which a utility obtains a reasonable contract should not be limited to competitive bidding. The Coops commented that to prevent self-dealing, contracts with affiliates should not be eligible for certification. The commission disagrees, but believes such contracts will need to be carefully considered. The Coops suggested that to insure thorough scrutiny, certification should always be done in a separate proceeding. The commission disagrees. In a rate case or a reconciliation proceeding, much of the information necessary to judge a contract will already be available. The Coops commented that contracts should be certified only is they are reasonable, necessary, and in the public interest, not just if the terms and conditions are reasonable as a whole. The commission believes that the Coops are drawing artificial semantical distinctions. Whether a contract is necessary or in the public interest is a consideration in determining whether it is reasonable as a whole. TIEC commented that if the proposed contract certification rule is adopted, the flexibility the contract provides should be considered and toward such end, the utility should be required to submit a sensitivity analysis. Furthermore, the utility should be required to provide documentation of comparative analysis of alternative fuel over the life of the contract. The commission believes such analyses are valid and should normally be done. The amendment has been changed to add these requirements. TIEC commented that the utility should be required to provide a narrative explanation of its fuel purchase strategy which would be approved as part of the certification process. The commission agrees that an explanation of the fuel purchase strategy should be provided, but believes that approval of the strategy is unnecessary. The amendment has been changed to require a narrative explanation of the fuel procurement strategy. TIEC commented that any affected person should be able to request a hearing. The commission agrees, but does not believe it is necessary to spell this out in the rule. TIEC maintained that no contract that is tendered for certification should be treated as confidential because to keep such contracts secret is unfair and contrary to the policy of open government. The commission believes that under the law of this state, whether a document should be treated as confidential has to be determined on a case-by-case basis. TU Electric recommended clarification of subsection (a)(2), which prevents the reconsideration of a contract that has been certified, by adding language that makes it clear that if the reasonableness of a contract has been considered in a previous reconciliation, its terms cannot be revisited by the commission in a later reconciliation. The commission believes that the law is what the law is regarding the re-trying of issues and that it is unnecessary to state it in the rule. The amendment is adopted under Texas Civil Statutes, Article 1446c, sec.16 and sec.43(g), which provide the PUC with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction. sec.23.23. Rate Design. (a) Guidelines for certifying long-term fuel contracts. The commission will certify long-term fuel contracts in accordance with the guidelines in this subsection for determining the reasonableness of the terms and conditions of such contracts. This subsection does not require long-term fuel contracts to be submitted for certification, and no adverse inference will result from a utility's decision not to seek certification. (1) Definition. A long-term fuel contract is a contract, or an amendment to a contract, with a specified term of at least five years for the supply, transportation, processing, and/or storage of fuel for the generation of electricity. (2) Initiation of review. Upon the petition of a utility, the commission will review the reasonableness of the terms and conditions of one, or more if entered within a 60-day period, long-term fuel contracts as of the time of execution. A petition for certification may be filed separately, with a petition to reconcile fuel expenses, or with a statement of intent to change rates; however, a utility may not have more than one separately filed petition for certification pending before the commission at one time. The commission may consolidate a certification proceeding with, or sever it from, another proceeding. (3) Criteria. The commission will consider the following factors in determining whether to certify a long-term fuel contract: (A) the pricing provisions and other terms, in light of, among other factors, identified contracts, offers, or proposals, if any, that the utility could reasonably have obtained for comparable supply, transportation, processing, and/or storage of fuel when the contract was executed; (B) the quantity deliverable under the contract, in light of the utility's long-term load forecast, mix of fuel purchases, and the most recent commission approved integrated resource plan, if any; (C) current and projected fuel prices when the contract was executed; (D) the reliability of the supply; (E) provisions allowing for variation in the purchase and receipt or supply and delivery of fuel; and (F) any other appropriate factors, which may include, but are not limited to, environmental, health, and safety protection, and economic impacts. (4) Additional considerations. Other matters relating to long-term fuel contracts will be handled as follows. (A) A price-adjustment clause, if any, in a long-term fuel contract must either provide for specified or determinable adjustments or tie the price adjustments to appropriate market indexes. (B) A long-term fuel contract may be contingent on certification, approval by other appropriate regulatory authorities, and other reasonable contingencies, but otherwise must be fully executed. (C) A long-term fuel contract may provide for prepayments by the utility in return for dedicated long-term fuel supply. (D) The reasonableness of any price premiums in a long-term fuel contract over short-term prices will be determined in light of all the benefits obtained under the contract as a whole. (5) Procedural matters. Matters relating to procedural schedules and notice will be handled as follows. (A) Upon motion by a utility for an expedited certification in a proceeding in which certification is the sole issue, the presiding officer shall determine within 35 days whether the utility has complied with the requirements of subparagraph (B) of this paragraph, and if so, set a procedural schedule that will enable the commission to issue a final order in the proceeding as follows: (i) within 120 days after the contract is submitted to the commission, if no hearing is requested within 60 days after the contract is submitted; and (ii) within 180 days after the contract is submitted to the commission, if a hearing is requested within 60 days after the contract is submitted, except that this deadline is extended two days for each day in excess of five days on which the commission conducts a hearing on the merits of the case. (B) Commission approval of a request for expedited certification is contingent on the utility's filing its entire direct case at the time it submits its contract to the commission. The direct case must include: (i) testimony addressing each factor listed in paragraph (3)(A)-(E) of this subsection; (ii) a sensitivity analysis showing the utility's economic dispatch of its generating units, and incorporating the corollary energy requirements over a reasonable range of load growth scenarios and a reasonable range of fuel price variations; (iii) documentation of the comparative analyses performed on the alternative fuel supplies, initially and throughout the life of the contract; and (iv) a narrative explanation of the utility's strategy for long-term versus short-term fuel purchases. (C) A utility may file a petition for certification without submitting a contract if at the time of filing it requests entry of a protective order making the contract available while protecting its confidentiality. The presiding officer shall promptly issue a protective order subject to any party's right to challenge the confidential designation of information in a contract. Issues involving the confidentiality of information will be resolved under subsection (b)(5) of this section. (D) In any proceeding in which certification of a long-term fuel contract is requested, the utility shall provide a copy of the filing to the Office of Public Utility Counsel and the General Counsel and provide written individual notice of the proceeding to all other parties to the contract and each of the utility's customers. (6) Certification. After considering the factors set forth in paragraph (3) of this subsection, the commission shall certify a long-term gas contract if it determines that the terms and conditions of the contract are reasonable as a whole; otherwise, the commission shall deny certification. (7) Effect of certification. Certification of a long-term fuel contract establishes that the original prices, terms, and conditions of the contract were reasonable at the time the contract was entered and that it was reasonable to enter the contract and does not preclude commission review of the reasonableness of the utility's actions with respect to the contract. Denial of certification establishes that the contract is not eligible for certification, and precludes relitigation of the reasonableness of the contract as a whole. To the extent other ultimate issues of fact are actually litigated and are essential to the commission's decision not to certify the contract, relitigation of such issues is also precluded. (b) Electric. (1) Rates shall not be unreasonably preferential, prejudicial, or discriminatory, but shall be sufficient, equitable, and consistent in application to each class of customers, taking into consideration the need to conserve energy and resources. (2) The provisions of this paragraph apply to all generating electric utilities. (A) The commission shall monitor the utility's actual and projected fuel- related costs and revenues on a monthly basis. The utility shall maintain and provide to the commission in a format specified by the commission, monthly reports containing all information required to monitor monthly fuel-related costs and revenues. This information includes, but is not limited to, generation mix, fuel consumption, fuel costs, purchased power quantities and costs, and off-system sales revenues. (B) Known or reasonably predictable fuel costs shall be determined at the time of the utility's general rate case, fuel reconciliation proceeding, or interim fuel proceeding under subparagraphs (D) and (E) of this paragraph. (i) In determining known or reasonably predictable fuel costs, the commission shall consider all conditions or events which will impact the utility's fuel- related cost of supplying electricity to its ratepayers during the period that the rates will be in effect. These conditions or events include generation mix and efficiency, the cost of fuel used to produce the utility's generation, purchased power costs, wheeling costs, hydro generation, and other costs or revenues associated with generated or purchased power as approved by the commission. (ii) Purchased power capacity costs, fuel handling costs, costs associated with the disposal of fuel combustion residuals, railcar maintenance costs, railcar taxes, and coal brokerage fees will not be included as known or reasonably predictable fuel costs to be recovered through the fixed fuel factor as defined in subparagraph (C) of this paragraph, unless the utility demonstrates that such treatment is justified by special circumstances. (C) The utility shall recover its known and reasonably predictable fuel costs through a fixed fuel factor. The utility's fixed fuel factor shall be established during a general rate case, fuel reconciliation proceeding, or interim fuel proceeding as designated in subparagraphs (D) and (E) of this paragraph, and shall be determined by dividing the utility's known or reasonably predictable fuel cost, as defined in subparagraph (B) of this paragraph, by the corresponding kilowatt-hour sales during the period in which the factor will be in effect. If, due to unique circumstances, such a calculation is not appropriate for a particular utility, a different method of calculation may be used. When approved by the commission, the utility's fixed fuel factor: (i) may be designed to account for seasonal differentiation of fuel costs; and (ii) shall be designed to account for system losses and for differences in line losses corresponding to the voltage level of service. (D) Unless requested by a party to the proceeding, petitions to lower a utility's fuel factor may be approved by the commission without an evidentiary hearing. A lower interim fuel factor may be established and placed in effect in the first full billing cycle beginning no earlier than five days after the tariff is approved. An initial prehearing conference shall be conducted in all such proceedings no later than the 21st day following the filing of the petition and any person who fails to attend such prehearing conference may be dismissed as a party or refused party status. (i) An interim fuel proceeding, to lower a utility's fixed fuel factor shall be conducted when either: (I) the utility has materially over-recovered and projects to materially over- recover its known or reasonably predictable fuel costs. In such instance, the utility shall file a petition with the commission to lower its existing fuel factor and establish a new interim fuel factor. The petition shall clearly state all of the reasons for lowering the utility's existing fuel factor, and provide support for the new interim fuel factor. The commission may establish standards for the information and format that shall be contained in such petitions; or (II) upon information and belief, the commission's general counsel, or any affected person, avers that the utility has materially over-recovered and projects that the utility will materially over-recover its known or reasonably predictable fuel costs, and files a petition with the commission to lower the utility's existing fuel factor and establish a new interim fuel factor. (ii) For the purposes of determining whether a utility has materially over- recovered or projects that the utility will materially over-recover its known or reasonably predictable fuel costs, fuel costs associated with a nuclear generation plant subject to a deferred accounting order of the commission, or which is not recognized as plant-in-service in rates by the commission, are not considered known or reasonably predictable fuel costs, and the recovery of fuel costs incurred in connection with such generation plant shall not be included in the utility's fuel factors, but shall be treated separately as the commission may order. (iii) Materially or material as used in this paragraph shall mean that the cumulative amount of over- or under-recovery, including interest, is the lesser of $40 million or 4.0% of the annual known or reasonably predictable fuel cost figure most recently adopted by the commission, as shown by the utility's fuel filings with the commission. (E) If fuel curtailments, equipment failure, strikes, embargoes, sanctions, or other reasonably unforeseeable circumstances have resulted in a material under- recovery of known or reasonably predictable fuel costs, the utility may file a petition with the commission requesting an emergency interim fuel factor. Such emergency requests shall state the nature of the emergency, the magnitude of change in fuel costs resulting from the emergency circumstances, and other information required to support the emergency interim fuel factor. The commission shall issue an interim order within 30 days after such petition is filed to establish an interim emergency fuel factor. If within 120 days after implementation, the emergency interim factor is found by the commission to have been excessive, the utility shall refund all excessive collections with interest at the utility's composite cost of capital as established in the utility's most recent rate proceeding before the commission. Such interest shall be calculated on the cumulative monthly over-recovery balance. If, after full investigation, the commission determines that no emergency condition existed, a penalty of up to 10% of such over-collections may also be imposed on investor-owned utilities. (F) All refunds shall be made by the utility pursuant to the methods outlined in subparagraph (G) of this paragraph. (i) A utility may petition for interim refunds at any time. Such refund petitions may be approved by the commission without a hearing. (ii) Any petition filed under subparagraph (D)(i)(II) may include a petition for interim refunds. Such refund petitions may be approved by the commission without a hearing, upon agreement of the parties. (iii) If, at the conclusion of a general rate case, reconciliation proceeding, or interim fuel proceeding, the commission determines that, sometime since the utility's last general rate case, reconciliation proceeding, or interim fuel proceeding, a material over-recovery of known or reasonably predictable fuel costs had occurred and was concurrently projected to continue to occur, and the utility failed to file a petition pursuant to subparagraph (F)(i) of this paragraph, the refunds to be made may include a penalty of up to 10% of the amount that should have been refunded at that time. (G) All refunds shall be made using the following methods. (i) Interest shall be paid by the utility at its composite cost of capital, as established by the commission, during the period the rates were in effect. Such interest shall be calculated on the cumulative monthly over- or under-recovery balance. (ii) Rate class as used in this subparagraph shall mean all customers taking service under the same tariffed rate schedule, or a group of seasonal agricultural customers as identified by the utility. (iii) Interclass allocations of refunds including associated interest shall be developed on a month-by-month basis and shall be based on the historical kilowatt-hour usage of each rate class for each month during the period in which the cumulative over-recovery occurred, adjusted for line losses using the same commission approved loss factors that were used in the utility's applicable fixed or interim fuel factor. (iv) Intraclass allocations of refunds shall depend on the voltage level at which the customer receives service from the utility. Retail customers who receive service at transmission voltage levels, all wholesale customers, and any groups of seasonal agricultural customers as identified by the utility shall be given refunds based on their individual actual historical usage recorded during each month of the period in which the cumulative over-recovery occurred, adjusted for line losses if necessary. All other customers shall be given refunds based on the historical kilowatt-hour usage of their rate class. (v) All refunds shall be made through a one-time bill credit unless it can be shown that this method would provide an incentive for customers to benefit from excessive usage of electricity. However, refunds may be made by check to municipally-owned utility systems if so requested. Retail customers who receive service at transmission voltage levels, all wholesale customers, and any groups of seasonal agricultural customers as identified by the utility shall be given a lump sum credit. All other customers shall be given a credit based on a refund factor which will be applied to their kilowatt-hour usage over a one-month period. This refund factor will be determined by dividing the amount of refund allocated to each rate class, by forecasted kilowatt-hour usage for the class during the month in which the refund will be made. (H) Final reconciliation of fuel costs shall be made at the time of the utility's general rate case or reconciliation proceeding, and shall cover all months following the utility's last final reconciliation through the most current month for which records are available. Any affected person, or the commission's general counsel, may file a petition for a reconciliation proceeding, provided such petition may only be filed if it has either been over one year since that utility's last final reconciliation or the utility has materially under-recovered its known or reasonably predictable fuel costs. In reconciliation of fuel costs the utility shall have the burden of proving that: (i) it has generated electricity efficiently; (ii) it has maintained effective cost controls; (iii) for all nonaffiliated fuel and fuel-related contracts, its contract negotiations have produced the lowest reasonable cost of fuel to ratepayers. To the extent that the utility does not meet its burden of proof, the commission shall disallow the portion of fuel costs that it finds to be reasonable; (iv) for all fuels acquired from or provided by affiliates of the utility, all fuel-related affiliate expenses are reasonable and necessary, and that the prices charged to the utility are no higher than prices charged by the supplying affiliate to its other affiliates or divisions or to unaffiliated persons or corporations for the same item or class of items. (I) The affiliate fuel price shall be at cost; no return on equity or equity profit may be included in the affiliate fuel price. The commission may consider the inclusion of affiliate equity return in rate of return and rate base during the utility's general rate case; however, affiliate equity return or profit shall not be considered part of fuel cost. (II) Operational investigations of all affiliate fuel suppliers and fuel supply services shall be performed at the discretion of the commission. The commission may use the results of such investigations during succeeding general rate cases, fuel cost reconciliation proceedings, emergency request proceedings, and elsewhere as it deems appropriate. (III) The affiliated companies shall establish, maintain, and provide for commission audit, all books and records related to the cost of fuel. These records shall explicitly identify all salaries, contract expenses, or other expenses paid or received among any affiliated companies, their employees, or contract employees. Under-recovery reconciliation shall be granted only for that portion of fuel costs increased by conditions or events beyond the control of the utility. (I) Upon final reconciliation, in determining the final over- or under- recovery amount, interest shall be paid by the utility or to the utility in reconciliation of any over- or under-recovery of fuel costs at the utility's composite cost of capital as established by the commission in connection with the utility's base rates in effect during the periods the over- or under- recovery occurred. Such interest shall be calculated on the cumulative monthly over- or under-recovery balance. Upon final reconciliation, if refunds are owed to the utility's ratepayers, they shall be made in accordance with the provisions of subparagraph (G)(ii)-(v) of this paragraph. (3) The provisions of this paragraph apply to all investor-owned electric distribution utilities, river authorities and cooperative-owned electric utilities. (A) An electric utility which purchases electricity at wholesale pursuant to rate schedules approved, promulgated, or accepted by a federal or state authority, or from qualifying facilities may be allowed to include within its tariff a purchased power cost recovery factor (PCRF) clause which authorizes the utility to charge or credit its customer for the cost of power and energy purchased to the extent that such costs varies from the purchased power cost utilized to fix the base rates of the utility. Purchased electricity cost includes all amounts chargeable for electricity under the wholesale tariffs pursuant to which the electricity is purchased and amounts paid to qualifying facilities for the purchase of capacity and/or energy. The terms and conditions of such PCRF clause, which may include the method in which any refund or surcharge from the utility's wholesale supplier will be passed on to its customers, shall be approved by an order of the commission. (B) Any difference between the actual costs to be covered through the PCRF and the actual PCRF revenues recovered shall be credited or charged to the utility's ratepayers in the second succeeding billing month unless otherwise approved by the commission. (C) If the utility purchases power from an unregulated entity, such as a political subdivision of the State of Texas, the utility shall submit the purchased power contract to the commission for approval of the terms, conditions, and price. If the commission issues an order approving the purchase, a PCRF may be applied to such purchases. (D) If PCRF revenue collections exceed PCRF costs by 10% in any given month and the total PCRF revenues have exceeded total PCRF costs by 5.0% or more for the most recent 12-month period: (i) investor-owned electric distribution utilities shall be subject to a 10% penalty on excess collection, (ii) cooperative-owned electric utilities shall report to the commission the justification for excess collection. (E) The utility shall maintain and provide to the commission, monthly reports containing all information required to monitor the costs recovered through the PCRF clause. This information includes, but is not limited to, the total estimated PCRF cost for the month, the actual PCRF cost on a cumulative basis, total revenues resulting from the PCRF, and the calculation of the PCRF. (4) The provisions of this paragraph apply to all investor-owned generating electric utilities and river authorities. (A) An electric utility which purchases electricity from qualifying facilities may be allowed to include within its tariff a PCRF clause which authorizes the utility to charge or credit its customers for the costs of capacity purchased from cogenerators and small power producers. These costs shall be included in the PCRF only to the extent that such costs vary from the costs utilized to fix the base rates of the utility and to the extent that they comply with sec.23.66(h) of this title (relating to Arrangements between Qualifying Facilities and Electric Utilities). The terms and conditions of such PCRF shall be approved by an order of the commission. (B) Purchased power costs that are recovered through the PCRF shall be excluded in calculating the utility's fixed fuel factor as defined in paragraph (2)(C) of this subsection. (C) Costs recovered through a PCRF shall be allocated to the various rate classes in the same manner as the embedded costs of the utility's generation facilities allocated in the utility's last rate case, unless otherwise ordered by the commission. Once allocated, these costs shall be collected from ratepayers through a demand or energy charge. (D) Any difference between the actual costs to be recovered through the PCRF and the PCRF revenues recovered shall be credited or charged to the customers in the second succeeding billing month. (E) If PCRF revenue collections exceed PCRF costs by 10% in any given month and the total PCRF revenues have exceeded total PCRF costs by 5.0% or more for the most recent 12-month period, the electric utility shall be subject to a 10% penalty on excess collections. (F) The utility shall maintain and provide to the commission, monthly reports containing all information required to monitor costs recovered through the PCRF. This information includes, but is not limited to, total estimated PCRF cost for the month, the actual PCRF cost, total revenue resulting from the PCRF and the calculation of the PCRF clause. (c)-(d) (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 September 30, 1992. TRD-9213273 John W. Renfrow Secretary of the Commission Public Utility Commission of Texas Effective date: October 21, 1992 Proposal publication date: March 31, 1992 For further information, please call: (512) 458-0100 TITLE 22. EXAMINING BOARDS Part XI. Board of Nurse Examiners Chapter 213. Practice and Procedure 22 TAC sec.sec.213.1-213.3, 213.5, 213.7-213.13, 213.15-213.18, 213.21 The Board of Nurse Examiners adopts amendments to sec. sec.213.1-213.3, 213.5, 213.7-213.13, 213.15-213.18, and 213.21, concerning practice and procedure, without changes to the proposed text as published in the August 7, 1992, issue of the Texas Register (17 TexReg 5500). The amendments are being adopted for the purpose of bringing the board's rules in alignment with the new hearings process through the State Office of Administrative Hearings (SOAH), established by Senate Bill 884. Any Registered Nurse required to appear for a proceeding will have a clearer understanding of the process. Section 213.1. Definitions. Comment. ... We support the use of the title "executive director" over that of "executive secretary" ... However, to change the statutorily created position should be done overly and formally rather than by simply changing a definition. Response. The board does not agree. Functional titles are permitted and routinely used by other agencies. The term, executive director, is used in the Appropriations Act. Comment. Your definition of "contested case" is inconsistent with that in the Administrative Procedure and Texas Register Act. ... We suggest the term "administrative hearing". ... Response. The board does not feel that its definition of contested case conflicts with the definition in the APTRA. Under the NPA the opportunity for settlement takes place after charges are filed. Section 213.5. Motion for Continuance. Comment. With the administrative hearings being held before the SOAH, we do not understand why the executive director, the party bringing the charges, should be involved in deciding whether continuance should be granted. Will this process not create confusion with the SOAH? ... Response. The board does not agree. The ALJ may grant continuances after the cases come under the jurisdiction of SOAH. However, prior to that time and up to three days before the hearing, the executive director can make that determination. Section 213.7. Preliminary Notice to Respondent. Comment. While we do not object to the proposed amendment, we would point out that the actual practice of the staff is not to follow this rule. The staff's letters sent out under this section, as required by APTRA, sec.18(c), do not give respondents 10 days from the date that the notice is served, but require a response within 10 days of the date of the letter. And, in some instances, the date on the letter is earlier than the date on that the letter is mailed as marked on the agency's envelope. We would urge you to personally investigate the form letter that the staff uses in sending out these sec.18(c) letters. Response. The licensee is given an opportunity to show compliance with the law in accordance with APTRA, sec.18(c). No request for extension of time to respond to an investigatory letter has ever been denied. Therefore, the board believes that no changes are necessary in the proposed text. Section 213.8. Commencement of Disciplinary Proceedings and Filing of Charges. Comment. Subsection (d) as it exists and as proposed to be amended is violative of APTRA, sec.18(c). The staff may not amend its charges to add additional charges because sec.18(c) prohibits the institution of formal proceedings without providing the respondent the opportunity to respond to the conduct alleged to warrant the agency's intended action. Simply allowing the staff to add new charges without notice and an opportunity to respond prior to the filing of formal charges would allow any respondent to have those additional charges stricken by an ALJ or overturned on appeal. Therefore, this subsection should be stricken from your rules. If the staff wants to file additional charges, then it will have to comply with APTRA, sec.18(c), as well as sec.213.7 and sec.213.8 of your rules. Consolidating such separately filed charges into a subsequent docket would not be a problem. Response. The board believes no changes are necessary because sec.213.8(d) does allow the respondent an opportunity to respond to amended charges in accordance with APTRA, sec.18(c). Section 213.9. Respondent's Answer. Comment. Allowing only 10 days from the date of receiving formal charges to file an answer is not reasonable. A reasonable amount of time is the Monday after 20 days after service is accomplished as the Texas Supreme Court, based upon many years of experience, has set in the Texas Rules of Civil Procedure. . .. Response. The board believes no change is necessary in sec.213.9 as proposed as it does comply with APTRA. Furthermore, the ALJ's of the SOAH have consistently determined that staff have met the notice requirements of APTRA. No request for an extension to file an answer has ever been denied by this agency. Furthermore, the investigatory letter is sent to the nurse giving the nurse preliminary notice of allegations as soon as a complaint comes to staff's attention. Section 213.10. Depositions and sec.213.11. Subpoenas. Comment. The ALJ should make a decision of whether a commission should issue rather than a party to a proceeding, i.e., the executive director who is the head of the staff. Section 213.11(a) Again, the ALJ rather than the executive director should make the decision on the issuance of subpoenas. Response. APTRA requires that the agency issue the commission and any subpoena to take depositions. No request for a commission or subpoena to take deposition has ever been denied by this agency. Therefore, no changes in the proposed text is necessary. Section 213.12. Hearing Procedure. Comment. Subsection (b)(2). The following language should be added to this paragraph so that if the respondent is exonerated on appeal, the respondent will not have to bear the cost of the record unjustly: "If a party appeals the final decision of the board and prevails on appeal, then the non-prevailing party on appeal shall reimburse the prevailing party for the cost it paid for the preparation of the original and any certified copy of the record of the agency proceeding that was required to be transmitted to the reviewing court." Response. The board disagrees with this recommendation since it is not required by APTRA or the NPA. Section 213.13. Decision of the Board Comment. Subsection (a). The term Administrative Law Judge has already been defined as an acronym in sec.213.1, why spell it out again? Response. The board agrees, however, the acronym was spelled out by the Texas Register. Comment. Subsection (c). A copy of an order that finds that the charges have not been substantiated should not be sent to the respondent's last known employer as a professional nurse! ... Response. No order is issued if the charges have not been substantiated. Section 213.15. Hearings Before the Executive Director. Comment. Subsection (d). The language "governing the same manner" is confusing and should be changed to "regarding this complaint" and inserted between "formal disciplinary proceeding" and "pursuant to." Also, should not the second time the word "board" is used be replaced by "staff"? Response. The board would make the determination that charges would be filed if a consent order is not ratified. Section 213.16. Prehearing Conference. Comment. Commenter addressed concern over sec.213.16(c). As there is no sec.23.16(c), we believe he was referring to sec.213.18(c). "As is the case with agreed orders entered into without prehearing conferences, should not the language in this subsection include a statement that the agreed orders proposed as a result of a prehearing conference are not final and effective until approved by the board, so that this section is consistent with sec.213.17. " Response. There are no agreed orders without prehearing conferences. Section 213.17. Agreed Orders. Comment. Again, because the term Administrative Law Judge has been defined as an acronym in sec.213.1, it should be used as an acronym not both as a term and an acronym. Response. We submitted it as an acronym, the Texas Register changed it. Section 213.18. Reinstatement Process. Comment. Subsection (e). Again, ALJ can be used alone without being restated because it was defined as an acronym. The punctuation at the end of each paragraph under subsection (g) needs to be a semicolon rather than colon. Response. Both changes were made by the Texas Register. Comment. With respect to paragraph (5) in subsection (g), the requirement that the sworn notarized statements be sent directly to the board from qualified people seems to be an onerous burden placed upon a petitioner. ... Why not allow the petitioner to have some control over the ability to present a case rather than leaving it in the hands of people while good intention, may be forgetful and overlook "direct mailing" these statements to the board? Response. The board disagrees with the commenter and because of prior problems with falsified notarizations, have made no changes in this provision. The only comment received was from the law firm of Scanlan and Buckle, P.C. offering suggested changes. The amendments are adopted under Texas Civil Statutes, Article 4514, sec.1, which provides the Board of Nurse Examiners with the authority to make and enforce and rules and regulations necessary for the performance of its duties and 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 September 30, 1992. TRD-9213252 Louise Waddill, Ph.D., R.N. Executive Director Board of Nurse Examiners Effective date: October 21, 1992 Proposal publication date: August 7, 1992 For further information, please call: (512) 835-8650 TITLE 25. HEALTH SERVICES Part I. Texas Department of Health Chapter 157. Emergency Medical Care Emergency Medical Services-Part A The Texas Department of Health (department) adopts amendments to sec.sec.157.3, 157.11-157.15, 157.31, 157.41, 157.44, 157.45, and 157.61-157.63; the repeal of existing sec.sec.157.19, 157.51, 157.64, 157.65, 157.77, and 157. 79; and new sec. sec.157.19, 157.21, 157.22, 157.32-157.35, 157.51, and 157.64, concerning emergency medical care. New sec.sec.157.32-157.35 are adopted with changes to the proposed text as published in the June 5, 1992, issue of the Texas Register . The remaining sections as well as the repeals are adopted without changes and and the rules will not be republished. Most of these amendments and new rules are a result of legislative changes made by the 72nd Legislature. This legislation added administrative penalties; a first responder organization registry; confidentiality of patient records; and criminal history investigation. The remaining rules are house keeping for training requirements; criteria for emergency suspension and revocation of a provider license; and automated external defibrillation. A summary of comments received are as follows. Concerning sec.157.11(a)(1)(F)(iv)(IV), quality assessment, one commenter felt a service should be allowed to develop the objectives and how they are measured. The department disagrees in that the itemized list delineates minimum standards. A provider may adopt objectives above and beyond these. Concerning sec.157.11(a)(1)(F)(iv)(VI)(-d-), one commenter said that response data to be collected by the providers would be redundant to that already provided to the state. The department disagrees, because response data is to be collected for internal use by provider quality management staff and may be more comprehensive than data required by the state. Concerning sec.157.12(c), one commenter felt a certain number of isolation kits should be added to requirements. The department disagrees in that this would be a substantive change. Concerning sec.157.19(c)(1), a commenter felt the wording should be changed so the employer is not totally responsible for the actions of employees. The department disagrees, because even though a provider cannot be totally responsible for an employee's actions, it cannot absolve themselves from responsibility to the consumer. Concerning sec.157.19(c)(1)(P), obtaining any fee by fraud, one commenter felt it would give the bureau broadbased discretionary power and should be withdrawn. The department disagrees in that fraud or misrepresentation by a licensed provider is a consumer protection issue. Further, the provider has the right to a hearing and appeal by administrative rule. Concerning sec.157.19(c)(1)(S), warning devices, one commenter questioned who would determine unnecessary use and felt the section should be withdrawn. The department disagrees in that any issue which impacts patient or public safety is a relevant concern. Concerning sec.157.19(c)(1)(U), violating any rule or standard that jeopardizes the safety of a patient, one commenter felt the rule should be withdrawn because it would give discretionary power to the bureau. The department disagrees in that the provider has the right to a hearing and appeal by administrative rule. Concerning sec.157.31(b) regarding automated external defibrillator (AED), a commenter felt the words EMS medical director should be deleted in favor of course medical director. The department disagrees because subsection (b) specifically speaks to delegation of the AED skill and delegation is the responsibility of the EMS medical director. Concerning sec.157.32(a)(1) and sec.157.33(a)(1), a commenter felt hazardous material should be expanded and the OSHA rules about blood borne pathogens should be added to both rules. The department disagrees in that this is to be addressed by the division of occupational health. Concerning sec.157.32(a)(4) and sec.157.33(a)(3), a commenter felt the wording should read "course medical director" rather than "EMS service medical director." The department agrees, and "course medical director" will be added to the rule. Concerning sec.157.41(i), certification and wallet size certificate, one commenter felt the requirement should be deleted and the requirement to carry a wallet card while on duty should be dropped. The department disagrees in that this would be a substantive change. Concerning sec.157.41(m)(1)-(3), certifying at a lower level if you are an EMT- I or EMT-P, a commenter felt it was degrading to retest and felt it could be handled administratively. The department disagrees, because certification can only be obtained through a formal testing. Concerning sec.157.45(e)(2), a commenter felt the wording needed changing when describing certification retests because it doesn't mention skills testing in the last part of the section.. The department disagrees that a wording change is needed, since the retest fee applies only to the written exam. In addition, the department made minor editorial changes. The commenters were Cooke County EMS, Richland Hills Fire Department, East Texas EMS Medical Center, and Amoco Chemical Company. The commenters were neither for or against the section in its entirety; however, they did express concerns as earlier mentioned. 25 TAC sec.157.3 The amendment is adopted under Health and Safety Code, Chapter 773, which provides the Board of Health with authority to adopt rules concerning emergency medical services. 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 September 30, 1992. TRD-9213298 Robert A. MacLean, M.D. Deputy Commissioner Texas Department of Health Effective date: October 21, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 458-7550 Emergency Medical Services-Provider Licenses 25 TAC sec.sec.157.11-157.15, 157.19, 157.21, 157.22 The amendments and new sections are adopted under Health and Safety Code, Chapter 773, which provides the Board of Health with authority to adopt rules concerning emergency medical services. 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 September 30, 1992. TRD-9213265 Robert A. MacLean, M.D. Deputy Commissioner Texas Department of Health Effective date: October 21, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 458-7550 Emergency Medical Services Provider Licenses 25 TAC sec.157.19 The repeal is adopted under Health and Safety Code, Chapter 773, which provides the Board of Health with authority to adopt rules concerning emergency medical services. 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 September 30, 1992. TRD-9213274 Robert A. MacLean, M.D. Deputy Commissioner Texas Department of Health Effective date: October 21, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 458-7550 Emergency Medical Services Training and Course Approval 25 TAC sec.sec.157.31, 157.32, 157.33-157.35 The amendment and new sections are adopted under Health and Safety Code, Chapter 773, which provides the Board of Health with authority to adopt rules concerning emergency medical services. sec.157.32. Emergency Care Attendant Training Course. (a) Course curricula. (1) The minimum curricula shall be the Department of Transportation (DOT) Emergency Medical Services (EMS) First Responder Training Course and the current Federal Emergency Management Agency document entitled "Recognizing and Identifying Hazardous Materials" which are adopted by reference. Copies may be reviewed during normal working hours in the Texas Department of Health, Bureau of Emergency Management Offices, 1100 West 49th Street, Austin, Texas 78756. (2) In addition to the minimum curricula in paragraph (1) of this subsection, the course shall include curricula on the following subjects: (A) "Aids to Resuscitation"; (B) blood pressure by palpation and auscultation in the unit containing "Diagnostic Signs and Patient Examination" and the unit containing "Shock, Bleeding, and Primary Patient Survey"; (C) oral suctioning in the unit containing "Aids to Resuscitation"; (D) spinal immobilization; (E) patient assessment; and (F) adult, child, and infant cardiopulmonary resuscitation. (3) The course shall include a minimum of 40 hours of didactic instruction on the approved curricula. (4) The automated external defibrillator curriculum as adopted by reference in sec.157.31 of this title (relating to Automated External Defibrillator Training Course) shall be optional. This curriculum shall be taught only with the approval of an EMS medical director or course medical director and shall be in addition to the 40 hours of instruction in paragraph (3) of this subsection. (5) A student shall successfully complete all course requirements including course written and course skills examinations prior to being placed on a course completion certificate and becoming eligible for state certification skills and written examinations. (b) Application procedures are outlined in the EMS Education and Training Manual which is adopted by reference. The manual is available for review during normal working hours in the Texas Department of Health, Bureau of Emergency Management offices, 1100 West 49th Street, Austin, Texas 78756. (c) Course approval criteria. (1) Criteria for course approval shall be outlined in the EMS Education and Training Manual which is adopted by reference in subsection (b) of this section. (2) Approval of an emergency care attendant (ECA) training course application shall be dependent upon: (A) meeting the requirements in subsections (a) and (b) of this section; and (B) meeting all the requirements in the EMS Education and Training Manual relating to ECA training courses. (3) If the application meets the criteria in this section, the training program shall receive a letter of approval from the department with an assigned course number. (d) Criteria for course denial. (1) A course may be denied for, but not limited to, the following reasons. If the applicant: (A) submits an incomplete application; (B) fails to submit an application in accordance with requirement in subsection (b) of this section; (C) has a history of a high failure rates of students in previous courses on certification examinations; (D) has a history of poor course evaluations from students in previous courses; (E) fails to meet standards for training facilities as defined in the EMS Education and Training Manual based on a site evaluation; and/or (F) submits names of instructors who are not certified to the appropriate level for the training course as required in sec.157.61 of this title (relating to Certification of Course Coordinator, Program Instructor, and Examiner) and who are not listed as guest lecturers. (2) If an application is denied, a letter will be forwarded to the applicant detailing specific reasons for the denial. sec.157.33. Emergency Medical Technician Training Course. (a) Course curricula. (1) The minimum curricula for the emergency medical technician (EMT) training course shall be the Department of Transportation (DOT) Basic Training Program for EMT-Ambulance and the current Federal Emergency Management Agency document titled "Recognizing and Identifying Hazardous Materials" which are adopted by reference. Copies may be reviewed during normal working hours in the Texas Department of Health, Bureau of Emergency Management Offices, 1100 West 49th Street, Austin, Texas 78756. (2) Objectives pertaining to the use of the pneumatic antishock garment (PASG) shall be optional. Teaching of this optional skill shall be at the discretion of the course coordinator. (3) The automated external defibrillator (AED) curriculum as adopted by reference in sec.157.31 of this title (relating to Automated External Defibrillator Training Course) is optional and shall be taught only with the approval of an emergency medical services (EMS) medical director or course medical director and shall be in addition to the 100 hours of instruction in paragraph (4) of this subsection and in addition to the clinical and field internship requirements in paragraphs (5) and (6) of this subsection. (4) The course shall include a minimum of 100 hours of didactic instruction on the approved curricula. (5) In addition to the 100 hours of instruction in paragraph (4) of this subsection, the student shall be required to complete a minimum of 20 hours of clinical, in-hospital training. A minimum of eight hours are required in the emergency department. The remaining hours may be completed in other clinical areas of the hospital. (6) Twelve hours of clinical, in-hospital training may be completed in a primary care facility which is accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or the Accreditation Association Ambulatory Health Care (AAAHC), such as a minor emergency health care facility, if an exception to paragraph (5) of this subsection is requested from the department. (7) The student shall be required to complete a minimum of three supervised ambulance runs on an authorized EMS vehicle. The supervision of these runs shall be provided by an individual certified as at least an EMT or by an appropriately qualified program instructor as determined by the course coordinator. An ambulance run is one in which a patient is transported from the scene to a primary care facility because the patient's condition requires care or one in which the student observes or assists with care at the scene, but the patient is transported by a helicopter, advanced life support (ALS), or mobile intensive care unit (MICU) vehicle. (8) A student shall successfully complete all course requirements including course written, course skills examinations, clinical training, and EMS field internship prior to being placed on a course completion certificate and becoming eligible for state certification skills and written examinations. (b) Application procedures are outlined in the EMS Education and Training Manual which is adopted by reference. The manual is available for review during normal working hours in the Texas Department of Health, Bureau of Emergency Management Offices, 1100 West 49th Street, Austin, Texas 78756. (c) Course approval criteria. (1) Criteria for course approval shall be outlined in the EMS Education and Training Manual which is adopted by reference in subsection (b) of this section. (2) Approval of an EMT training course application shall be dependent upon: (A) meeting the requirements in subsections (a) and (b) of this section; and (B) meeting all the requirements in the EMS Education and Training Manual relating to basic emergency medical technician training courses. (3) If the application meets the criteria in this section, the training program shall receive a letter of approval from the department with an assigned course school number. (d) Criteria for course denial. (1) A course may be denied for, but not limited to, the following reasons. If the applicant: (A) submits an incomplete application; (B) fails to submit an application in accordance with requirement in subsection (b) of this section; (C) has a history of high failure rates of students in previous courses on certification examinations; (D) has a history of poor course evaluations from students in previous courses; (E) fails to meet standards for training facilities as defined in the EMS Education and Training Manual based on a site evaluation; (F) fails to meet standards for clinical training as defined in the EMS Education and Training Manual based on a site evaluation; (G) fails to meet standards for EMS field internship as defined in the EMS Education and Training Manual based on a site evaluation; and/or (H) submits names of instructors who are not certified to the appropriate level for the training course as required in sec.157.61 of this title (relating to Certification of Course Coordinator, Program Instructor, and Examiner) and who are not listed as guest lecturers. (2) If an application is denied, a letter will be forwarded to the applicant detailing specific reasons for the denial. (e) EMT completion course. (1) Eligibility for the EMT Completion Training Course shall be current certification as an emergency care attendant (ECA). (2) The minimum curriculum for the EMT Completion Training Course shall be the Texas Department of Health EMT Completion Training Course which is adopted by reference. Copies of this curricula may be reviewed during normal working hours in the Texas Department of Health, Bureau of Emergency Management Offices, 1100 West 49th Street, Austin, Texas 78756. (3) Objectives pertaining to the use of the pneumatic antishock garment (PASG) shall be optional. Teaching of this optional skill shall be at the discretion of the course coordinator. (4) The AED curriculum as adopted by reference in sec.157.31 of this title (relating to Automated External Defibrillator Training Course) is optional and shall be taught only with the approval of an EMS medical director and shall be in addition to the 60 hours of instruction in paragraph (5) of this subsection and in addition to the clinical and field internship requirements in paragraphs (6) and (7) of this subsection. (5) The course shall include a minimum of 60 hours of didactic instruction on the approved curriculum. (6) In addition to the 60 hours of instruction in paragraph (5) of this subsection, the student shall be required to complete a minimum of 20 hours of clinical, in-hospital training. A minimum of eight hours are required in the emergency department. The remaining hours may be completed in other clinical areas of the hospital. (7) Twelve hours of clinical, in-hospital training may be completed in a Joint Commission on Accreditation of Healthcare Organizations (JCAHO) or Accreditation Association Ambulatory Health Care (AAAHC) accredited primary care facility, such as a minor emergency health care facility, if an exception to paragraph (5) of this subsection is requested from the department. (8) The student shall be required to complete a minimum of three supervised ambulance runs on an authorized EMS vehicle. The supervision of these runs shall be provided by an individual certified as at least an EMT or by an appropriately qualified program instructor as determined by the course coordinator. An ambulance run is one in which a patient is transported from the scene to a primary care facility because the patient's condition requires care or one in which the student observes or assists with care at the scene, but the patient is transported by a helicopter, ALS, or MICU vehicle. (9) Application procedure for an EMT Completion course shall be as outlined in subsection (b) of this section. (10) Approval or denial of an EMT Completion Training Course shall be in accordance with this subsection as well as subsections (c) and (d) of this section. (11) A student shall successfully complete all course requirements including course written, course skills examinations, clinical training, and EMS field internship prior to being placed on a course completion certificate and becoming eligible for state certification skills and written examinations. sec.157.34. EMT-Intermediate Training Course. (a) Course curricula. (1) The minimum curricula for the Emergency Medical Technician-Intermediate (EMT-I) training course shall be the Department of Transportation (DOT) EMT-I training curriculum adopted by reference. Copies may be reviewed during normal working hours in the Texas Department of Health, Bureau of Emergency Management Offices, 1100 West 49th Street, Austin, Texas 78756. (2) The curriculum shall include objectives pertaining to endotracheal intubation. (3) Objectives related to manual defibrillation shall be optional and may be included only at the discretion of the course medical director. (4) The automated external defibrillator (AED) curriculum described in sec.157.31 of this title (relating to Automated External Defibrillator Training Course) may be included as an optional skill at the discretion of the course medical director. (5) If the course medical director includes optional skills in paragraph(s) (3) and/or (4) of this section, the instruction shall be in addition to the 60 hours in paragraph (6) of this section. (6) The course shall include a minimum of 60 hours of didactic instruction on the approved curriculum. (7) In addition to the 60 hours of instruction in paragraph (6) of this subsection, the student shall be required to complete a minimum of 50 hours of clinical, in-hospital training. A minimum of 24 hours shall be required in the emergency department. (8) The student shall be required to complete a minimum of 50 hours of supervised experience on an authorized EMS vehicle operating as at least an advanced life support vehicle. (9) At least three runs shall be completed during which the patient receives ALS care. The supervision of this experience shall be provided by an individual certified as at least an EMT-I or an appropriately qualified program instructor as determined by the course coordinator. (10) During the clinical and/or EMS field internship the student shall be required to successfully demonstrate proficiency in endotracheal intubation and peripheral intravenous needle or catheter insertion to the satisfaction of the course medical director and course coordinator. (11) A student shall successfully complete all course requirements including course written examination, course skills examination, clinical training, and EMS field internship prior to being placed on a course completion certificate and becoming eligible for state certification skills and written examinations. (b) Enrollment. (1) Students enrolling in an EMT-I training course shall be currently certified as an EMT, or may be enrolled in an EMT training course and shall have completed the classroom portion of the course. (2) The student shall successfully complete the EMT training course and be certified at the EMT level before certification at the EMT-I level. (3) An EMT whose certification expires while enrolled in an EMT-I course is not certified at any level until: (A) successfully completing the recertification requirements for EMT certification; or (B) successfully completing the certification requirements for EMT-I certification. (4) An EMT who is enrolled in an EMT-I course and whose EMT certification expires before the end of the EMT-I course shall have a period not to exceed 90 days to complete recertification requirements for the EMT certificate if: (A) an application and fee for the EMT recertification is received before the expiration date of the EMT certificate; or (B) an application and fee for the EMT-I certification is received before the expiration date of the EMT certificate. (c) Application procedures are outlined in the EMS Education and Training Manual which is adopted by reference. The manual is available for review during normal working hours in the Texas Department of Health, Bureau of Emergency Management Offices, 1100 West 49th Street, Austin, Texas 78756. (d) Course approval criteria. (1) Criteria for course approval shall be outlined in the EMS Education and Training Manual which is adopted by reference in subsection (c) of this section. (2) Approval of an EMT-I Training course application shall be dependent upon: (A) meeting the requirements in subsections (a), (b), and (c) of this section; and (B) meeting all the requirements in the EMS Education and Training Manual relating to emergency medical technician-intermediate training courses. (3) If the application meets the criteria in this subsection or this section, the training program shall receive a letter of approval from the department with an assigned course number. (e) Criteria for course denial. (1) A course may be denied for, but not limited to, the following reasons. If the applicant: (A) submits an incomplete application; (B) fails to submit an application in accordance with requirement in subsection (c) of this section; (C) has a history of high failure rates of students in previous courses on certification examinations; (D) has a history of poor course evaluations from students in previous courses; (E) fails to meet standards for training facilities as defined in the EMS Education and Training Manual based on a site evaluation; (F) fails to meet standards for clinical training as defined in the EMS Education and Training Manual based on a site evaluation; (G) fails to meet standards for EMS field internship as defined in the EMS Education and Training Manual based on a site evaluation; and/or (H) submits names of instructors or examiners who are not certified to the appropriate level for the training course as required in sec.157.61 of this title (relating to Certification of Course Coordinator, Program Instructor, and Examiner) and who are not listed as guest lecturers. (2) If an application is denied, a letter will be forwarded to the applicant detailing specific reasons for the denial. sec.157.35. EMT-Paramedic Training Course. (a) Course curricula. (1) The minimum curricula for the Emergency Medical Technician-Paramedic (EMT- P) training course shall be the Department of Transportation (DOT) EMT-P adopted by reference. Copies may be reviewed during normal working hours in the Texas Department of Health, Bureau of Emergency Management Offices, 1100 West 49th Street, Austin, Texas 78756. (2) Objectives pertaining to the use of rotating tourniquets may be included as an optional skill at the discretion of the course medical director and shall be in addition to the 160 hours in paragraph (3) of this subsection. (3) The course shall include a minimum of 160 hours of didactic instruction on the approved curriculum. (4) In addition to the didactic instruction in paragraph (3) of this subsection, the student shall be required to complete a minimum of 140 hours of clinical training in a facility which has patient and staff resources to support the number of students assigned to a clinical area. A minimum of 40 hours shall be required in the emergency department. (5) The student shall be required to complete a minimum of 100 hours of supervised experience on an authorized emergency medical services (EMS) vehicle operating as an mobile intensive care unit (MICU) which has capabilities of voice telecommunication with on-line medical direction. (6) At least five runs shall be completed during which the patient receives advanced life support (ALS) care. The supervision of this experience shall be provided by an individual certified as at least an EMT-P or an appropriately qualified program instructor as determined by the course coordinator. (7) During the clinical and/or EMS field internship, the student shall be required to successfully demonstrate proficiency in endotracheal intubations, peripheral intravenous needle or catheter insertions, and patient assessments, to include cardiac monitoring, to the satisfaction of the course medical director and course coordinator. (8) A student shall successfully complete all course requirements including course written examinations, course skills examinations, clinical training, and EMS field internship prior to being placed on a course completion certificate and becoming eligible for state certification skills and written examinations. (b) Enrollment. (1) Students enrolling in an EMT-P training course shall be currently certified as an EMT, or may be enrolled in an EMT training course and shall have completed the classroom portion of the course. (2) The student shall successfully complete the EMT training course and be certified at the EMT level before certification at the EMT-P level. (3) An EMT whose certification expires while enrolled in an EMT-P course is not certified at any level until: (A) successfully completing the recertification requirements for EMT certification; or (B) successfully completing the certification requirements for EMT-P certification. (4) An EMT who is enrolled in an EMT-P course and whose EMT certification expires before the end of the EMT-P course shall have a period not to exceed 90 days to complete recertification requirements for the EMT certificate if: (A) an application and fee for the EMT recertification is received before the expiration date of the EMT certificate; or (B) an application and fee for the EMT-P certification is received before the expiration date of the EMT certificate. (c) Application procedures are outlined in the EMS Education and Training Manual which is adopted by reference. The manual is available for review during normal working hours in the Texas Department of Health, Bureau of Emergency Management Offices, 1100 West 49th Street, Austin, Texas 78756. (1) EMS training entities without accreditation from the Committee on Allied Health Education Accreditation (CAHEA) may obtain an application for course approval from the Texas Department of Health (department) or the public health region EMS offices. (2) The completed course approval application must be signed by a certified coordinator and the course medical director and shall be submitted to the department a minimum of six weeks before the starting date of the course. (3) An EMS training entity which has been accredited by CAHEA shall submit to the department a copy of the self study for accreditation and a copy of the formal accreditation approval from CAHEA. The EMS training entity shall submit to the department: (A) copies of updates submitted to CAHEA as well as any correspondence from CAHEA affecting the EMS training entity's accreditation; and (B) a semester or quarter plan and schedule for EMS training courses to be taught during that period. (d) Course approval criteria. (1) Criteria for course approval shall be outlined in the EMS Education and Training Manual which is adopted by reference in subsection (c) of this section. (2) Approval of an EMT-P training course application shall be dependent upon: (A) meeting the requirements in subsections (a), (b), and (c) of this section; and (B) meeting all the requirements in the EMS Education and Training Manual relating to EMT-P training courses and/or CAHEA accredited programs. (3) If the application meets the criteria in this subsection, the training program shall receive a letter of approval from the department with an assigned course number. (e) Criteria for course denial. (1) A course may be denied for, but not limited to, the following reasons. If the applicant: (A) submits an incomplete application; (B) fails to submit an application in accordance with requirement in subsection (c) of this section; (C) has a history of a high failure rate of students in previous courses on certification examinations; (D) has a history of poor course evaluations from students in previous courses; (E) fails to meet standards for training facilities as defined in the EMS Education and Training Manual based on a site evaluation; (F) fails to meet standards for clinical training as defined in the EMS Education and Training Manual based on a site evaluation; (G) fails to meet standards for EMS field internship as defined in the EMS Education and Training Manual based on a site evaluation; and/or (H) submits names of instructors or examiners who are not certified to the appropriate level for the training course as required in sec.157.61 of this title (relating to Certification of Course Coordinator, Program Instructor, and Examiner) and who are not listed as guest lecturers. (2) If an application is denied, a letter will be forwarded to the applicant detailing specific reasons for the denial. (f) EMT-P completion course. (1) Enrollment. (A) Students enrolling in an EMT-P completion course shall be currently certified as an EMT-I; or may be enrolled in an EMT-I training course and shall have completed the classroom portion of the course. (B) The student shall successfully complete the EMT-I training course and be certified at the EMT-I level before certification at the EMT-P level. (C) An EMT-I whose certification expires while enrolled in an EMT-P completion course is not certified at any level until: (i) successfully completing the recertification requirements for EMT-I certification; or (ii) successfully completing the certification requirements for EMT-P certification. (D) An EMT-I who is enrolled in an EMT-P completion course and whose EMT-I certification expires before the end of the EMT-P course shall have a period not to exceed 90 days to complete recertification requirements for the EMT-I certificate if: (i) an application and fee for the EMT-I recertification is received before the expiration date of the EMT-I certificate; or (ii) an application and fee for the EMT-P certification is received before the expiration date of the EMT-I certificate. (2) Course curricula. (A) The minimum curriculum for the EMT-P Completion Training course shall be the following divisions of the Department of Transportation (DOT) national training course Emergency Medical Technician-Paramedic as adopted by reference: (i) Division 1 to include 1.4.3, 1.4.4, 1.4.7-1.4.14, SL.4.29b, 1.5.1-1.5.11, 1.6.1-1.6.13, and 1.7.1-1.7.13; (ii) Division 2 to include 2.2.5, 2.2.9, 2.2.12, 2. 2.22, 2.3.9, 2.4.2, 2.4.8, 2.4.28-2.4.30, S2.4.42, 2.5.1-2.5.40, and S2.5. 41-S2.5.44; and (iii) Divisions 3-6 to include all sections. (B) Objectives pertaining to the use of rotating tourniquets may be included at the discretion of the course medical director, but if taught shall be in addition to the 100 hours in subparagraph (E) of this paragraph. (C) The course shall include a minimum of 100 hours of didactic instruction on the approved curriculum. (D) The student shall be required to complete a minimum of 90 hours of clinical in-hospital training. (E) A minimum of 24 hours shall be required in the emergency department. (F) The student shall be required to complete a minimum of 50 hours of supervised experience on an authorized EMS vehicle operating as an MICU which has capabilities of voice telecommunication with on-line medical direction. (G) At least five runs shall be completed during which the patient receives ALS care. The supervision of this experience shall be provided by an individual certified as an EMT-P or by an appropriately qualified program instructor as determined by the course coordinator. An ambulance run is one in which a patient is transported from the scene to a primary care facility because the patient's condition requires care or one in which the student observes or assists with care at the scene, but the patient is transported by a helicopter or other MICU vehicle. (H) During the clinical and/or EMS field internship, the student shall be required to successfully demonstrate proficiency in endotracheal intubations, peripheral intravenous needle or catheter insertions, and patient assessments, including cardiac monitoring, to the satisfaction of the course medical director and course coordinator. (I) A student shall successfully complete all course requirements including course written examination, course skills examinations, clinical training, and EMS field internship prior to being placed on a course completion certificate and becoming eligible for state certification skills and written examinations. (3) Application procedure for an EMT-P completion course shall be as outlined in subsection (c) of this section. (4) Approval or denial of an EMT-P completion course shall be as outlined in this subsection and in subsections (d) and (e) of this section. 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 September 30, 1992. TRD-9213275 Robert A. MacLean, M.D. Deputy Commissioner Texas Department of Health Effective date: October 21, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 458-7550 Emergency Medical Services Personnel Certification 25 TAC sec.sec.157.41, 157.44, 157.45, 157.51 The amendments and new section are adopted under Health and Safety Code, Chapter 773, which provides the Board of Health with authority to adopt rules concerning emergency medical services. Issued in Austin, Texas, on September 30, 1992. TRD-9213276 Robert A. MacLean, M.D. Deputy Commissioner Texas Department of Health Effective date: October 21, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 458-7550 Emergency Medical Services Personnel Certification 25 TAC sec.157.51 The repeal is adopted under Health and Safety Code, Chapter 773, which provides the Board of Health with authority to adopt rules concerning emergency medical services. The proposal will affect the Code, Chapter 773. 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 September 30, 1992. TRD-9213277 Robert A. MacLean, M.D. Deputy Commissioner Texas Department of Health Effective date: October 21, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 458-7550 Emergency Medical Services Course Coordinator, Program Instructor, and Examiner Certification 25 TAC sec.sec.157. 61-157.63, 157.64 The amendments and new section are adopted under Health and Safety Code, Chapter 773, which provides the Board of Health with authority to adopt rules concerning emergency medical services. 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 September 30, 1992. TRD-9213278 Robert A. MacLean, M.D. Deputy Commissioner Texas Department of Health Effective date: October 21, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 458-7550 25 TAC sec.157.64, sec.157.65 The repeals are adopted under Health and Safety Code, Chapter 773, which provides the Board of Health with authority to adopt rules concerning emergency medical services. The proposal will affect the Code, Chapter 773. 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 September 30, 1992. TRD-9213279 Robert A. MacLean, M.D. Deputy Commissioner Texas Department of Health Effective date: October 21, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 458-7550 Emergency Medical Services-Part B. 25 TAC sec.157.77, sec.157.79 The repeals are adopted under Health and Safety Code, Chapter 773, which provides the Board of Health with authority to adopt rules concerning emergency medical services. The proposal will affect the Code, Chapter 773. 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 September 30, 1992. TRD-9213280 Robert A. MacLean, M.D. Deputy Commissioner Texas Department of Health Effective date: October 21, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 458-7550 TITLE 28. INSURANCE Part I. Texas Department Of Insurance Chapter 21. Trade Practices Subchapter H. Unfair Discrimination 28 TAC sec.21.702 The State Board of Insurance of the Texas Department of Insurance adopts an amendment to sec.21.702, concerning the use of actual or reasonably anticipated experience in setting life and health insurance rates, without changes to the proposed text as published in the April 24, 1992, issue of the Texas Register (17 TexReg 2925). The amendment is necessary to clarify the use of actual or reasonably anticipated experience in setting life and health insurance rates for physical and mental impairment based on sound actuarial principles. The amendment will clarify that actual or reasonably anticipated experience used in setting life and health insurance rates for physical or mental impairment must be based on sound actuarial principles. This amendment clarifies the existing regulation and industry practices. The amendment is adopted as part of Title 28, Part I. Chapter 21, Subchapter H, relating to identification of specific acts or practices which are prohibited by the Insurance Code. A comment was received from an insurance carrier which stated that the rule treated experience as entirely contained within actuarial principles and noted that while some underwriters would agree with that, more cautious underwriters would regard the two elements as separate and co-equal in importance. The commenter noted that actual experience had led underwriters to know that AIDS was a fatal disease prior to actuarial analysis of the data relating to AIDS deaths. That commenter also objected to the use of the phrase "without exception" in the proposed regulation, stating that the use of that phrase might delete the regulatory history which included NAIC drafting notes which the commenter believed was crucial to the understanding of what the NAIC was attempting to do with the regulations with respect to blindness. The commenter asked that these drafting notes be included in the regulation. A second comment was received which stated that the rule was believed to be intended to apply to risk classification and not to mandate the inclusion of any particular coverages and believed that this was in accord with the NAIC Model Regulation on which sec.21.702(a)(1) was initially based. The comment included as an attachment a copy of Actuarial Standard of Practice Number 12 which the commenter stated was relevant to this regulation. The commenter also stated that it believed there was a conflict between the regulation and Insurance Code, Article 21.21-3 which prohibits discrimination against handicapped individuals, and which uses the disjunctive when referring to "actuarial principles or actual or reasonably anticipated experience." The department responds to the comments as follows. The rule is proposed under Article 21.21, sec.13 as that is the statute which allows the State Board of Insurance broad authority to promulgate rules to accomplish the purposes of Article 21.21, and which specifically provides that petitions may be submitted to the board for such regulations. A petition was filed with the board requesting that the board prohibit discrimination against the mentally ill without adequate basis. The board believed this petition to be meritorious and directed agency staff to draft the proposed rule to make it clear that any rate differentials must be based upon sound actuarial principles including actual or reasonably anticipated experience because the board is of the opinion that the actual or reasonably related experience must be utilized in connection with and supported by sound actuarial principles. The department is of the opinion that this rule is in accord with Article 21.21-5 which forbids discrimination on the grounds of disability in setting of rates, rating manuals or the nonrenewal of policies unless such discrimination is justified by sound actuarial principles. To the extent that Article 21.21-3 might be read to be in conflict with Article 21.21-5, assuming for the sake of argument only that it could not be harmonized with that statute, it would be impliedly overruled by Article 21.21-5 which was passed by the 72nd Legislature during the Second Called Session in 1991. Article 21.21-3 was passed during the 1983 legislative session. The department, therefore, is of the opinion that the rule as proposed is authorized by the Insurance Code, Article 21.21, sec.13 and is in accord with Insurance Code, Article 21.21-5 and furthers the legislative intent of both statutes. The department is of the opinion that the phrase "without exception" was added to allow the paragraph to be written in a clearer, more easily understood manner and does not substantively change the prior regulation. The department does not believe that the drafting notes of the NAIC should be made a part of this regulation. The department also notes that regardless of the prior regulatory history or the drafting notes of the NAIC, any actions taken by an insurer or an HMO which fall within the scope of Article 21.21-5 must meet the criteria set forth in that statute. FOR: No comments were received for the sections during the comment period. AGAINST: Comments were received against the sections from the American Council of Life Insurance (ACLI) and Health Insurance Association of America (HIAA), and from one insurance carrier. The amendment is adopted under the Insurance Code, Articles 21.21 and 1.04, and Texas Civil Statutes, Article 6252-13a, sec.sec.4 and 5. Article 21.21, sec.13 authorizes the State Board of Insurance to promulgate and enforce reasonable rules and regulations as are necessary to accomplish the purposes of Article 21.21. Article 1.04 authorizes the board to determine rules in accordance with the laws of this state. Texas Civil Statutes, Article 6252-13a, sec.4 authorize and require each state agency to adopt rules of practice setting forth the nature and requirement of available procedures. Section 5 prescribes the procedures for adoption of rules by a state administrative agency. 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 October 2, 1992. TRD-9213361 Linda K. von Quintus-Dorn Chief Clerk Texas Department of Insurance Effective date: October 23, 1992 Proposal publication date: April 24, 1992 For further information, please call: (512) 463-6327 TITLE 31. NATURAL RESOURCES AND CONSERVATION Part III. Texas Air Control Board Chapter 111. Control of Air Pollution from Visible Emissions and Particulate Matter Visible Emissions 31 TAC sec.111.111 The Texas Air Control Board (TACB) adopts an amendment to sec.111.111, concerning visible emissions, with changes to the proposed text as published in the April 24, 1992, issue of the Texas Register (17 TexReg 2934). The amendments to sec.111.111 include requirements to install and operate continuous emissions monitoring systems (CEMS) in response to federal guidance. Public hearings were held in Houston on May 21, 1992, and in Beaumont on May 22, 1992. A total of seven commenters submitted testimony on the proposal during the comment period which was extended until July 9, 1992. All of the commenters opposed the proposal. Submitting testimony on the proposal were: Eastman Kodak Company (Kodak), ASARCO, Inc. (ASARCO), United States Environmental Protection Agency (EPA), Fina Oil and Chemical Company (Fina), Witco Corporation (Witco), Aluminum Company of America (ALCOA), and an individual. EPA commented that language should be added in subsection (a)(1) that would achieve consistency in the compliance methods stated in subparagraphs (D) and (F) of the paragraph and include all approved test methods. Specifically, EPA wanted Test Method 9 added to the methods in subparagraph (D) and CEMS and Alternate Method 1 to Method 9 added in subparagraph (F). EPA also commented that the rule should state that the highest opacity reading obtained using the specified test methods will be used to determine compliance with the standard. The final comment by EPA on paragraph (1) concerned incomplete references to the Code of Federal Regulations (CFR) in subparagraph (F). Kodak and ALCOA also mentioned this incomplete reference. The staff agrees with EPA's suggestion and has added language concerning compliance and test methods. This adds the flexibility of enforcing opacity standards by several methods, including visual observation and clarifies the fact that CEMS are optional in vents of less than 100,000 actual cubic feet per minute (acfm). In order to achieve consistency in the rule regarding compliance methods, the staff has moved opacity compliance requirements from subparagraph (D) to subparagraph (F). An individual stated that CEMS should be required on all facilities regardless of whether they maintain 15% opacity or less and that CEMS performance records should be retained for five years to be consistent with the TACB compliance history requirements and to document compliance trends. This same individual requested that language be added specifying that local, state, and federal enforcement agencies have access to these records. ALCOA and ASARCO commented that language in subparagraph (D) could be misinterpreted as removing the option to use CEMS in vents having flow rates of less than 100, 000 acfm. The TACB staff believes that requiring CEMS on sources maintaining less than 15% opacity, with a flow rate of less than 100,000 acfm, is not justifiable when considering cost and benefit. These sources contribute relatively little particulate matter due to their generally clean exhaust streams and remain subject to enforcement from visual observation of emissions. The retention of CEMS performance records for two years is consistent with federal policy and will not affect source compliance record retention, which must be held for five years. A requirement that records be available for inspection by federal, state, and local air pollution agencies would be consistent with a similar requirement in TACB Regulation II, concerning control of air pollution from sulfur compounds, and the staff has included appropriate wording in paragraph (1)(D). Witco testified that CEMS are a new source performance standard (NSPS) requirement, that the carbon black industry is not defined under NSPS, and that their facilities are "grandfathered" under the Federal Clean Air Act. They also stated that CEMS will be subject to particulate and water fouling if installed in carbon black plants. Witco acknowledged that the TACB regulations allow the substitution of opacity readers for determining opacity, but stated that the training of these readers is a redundant expense and an ineffective use of skilled personnel. While some carbon black plants may be "grandfathered" or exempted from permitting requirements, they are not exempt from Regulation I, concerning control of air pollution from visible emissions and particulate matter, opacity requirements. The TACB and federal regulations allow for alternative methods of opacity determination from sources where the vent gases have characteristics that would not allow accurate CEMS readings or would damage the equipment. In these instances, the staff believes that the training of personnel to perform visible emission observations (EPA Method 9) is a reasonable and economical method for a facility to verify and track compliance. Kodak objected to language in subparagraph (D) that would require sources subject to CEMS requirements under NSPS to also comply with 40 CFR 51, Appendix P, CEMS requirements. They stated that this does not coincide with EPA's intent to exempt NSPS sources from the Appendix P requirements. The staff agrees that the subparagraph, as written, would require sources regulated under this section to comply with both sets of federal standards. Language referring to 40 CFR 51, Appendix P, requirements has been deleted from subsection (a)(1)(D) and added to subsection (a)(2). Witco commented that the March 1, 1994, deadline for CEMS installation and operation provides insufficient lead time for operating companies to acquire and calibrate the equipment. The adopted deadline is a federal mandate representing a period of 18 months from the adoption of the proposal. It applies to three categories of sources: solid fossil fuel steam generators with a heat input of greater than 250 million British thermal units per hour, steam generators burning oil or a mixture of oil and gas that require particulate collection equipment to meet opacity standards, and catalyst regenerators for fluid bed catalytic cracking units of greater than 20,000 barrels per day total feed capacity. This limits the number of sources required to install CEMS, and the staff believes the deadline is timely and reasonable. An individual testified that the public should be consulted prior to the TACB approval of an alternate method of determining opacity other than an opacity monitor. Fina commented that language in subsection (a)(3) would eliminate consideration of alternative opacity monitoring methods where a CEMS cannot be used due to uncombined water in the gas stream. Fina was particularly concerned about the use of alternative methods on fluid catalytic cracking units. Southwestern Public Service Company suggested that the requirements of this paragraph be modified to allow the use of CEMS in sources where occasional interference by condensed water vapor occurs. Under 40 CFR 51, Appendix P, a state does have the option of substituting alternative monitoring methods where an opacity CEMS cannot be used. Any proposed alternative method must receive EPA approval prior to use. The staff has modified the rule language of subsection (a)(3) to allow this option for affected sources. The review of an alternate monitoring method will involve an analysis of its technical merits. Only systems that are proven accurate and reliable will be approved. A public hearing to approve an alternative method would unnecessarily prolong the process. The staff retained language allowing the approval process to remain with the TACB executive director and EPA. The use of CEMS in stacks that occasionally contain condensed water vapor is not excluded. The executive director will determine if the occurrence of condensed water vapor is of such a frequency as to render CEMS data unreliable. EPA commented that the frequency of compliance surveillance should be specified. EPA also stated that Method 9, identified in 40 CFR 60, Appendix A, should be added to the proposed methods of determining compliance. These additions will improve the enforceability of the rule and have been included in subsection (a)(3) with a specification that compliance be determined daily. In compliance with the Americans With Disabilities Act, this document may be requested in alternate formats by contacting Air Quality Planning Program staff at (512) 908-1457, (512) 908-1500 FAX, or 1-800-RELAY-TX (TDD), or by writing or visiting at 12124 Park 35 Circle, Austin, Texas 78753. The amendment is adopted under the Texas Clean Air Act (TCAA), sec.382.017, Texas Health and Safety Code (Vernon 1990), which provides TACB with the authority to adopt rules consistent with the policy and purposes of the TCAA. sec.111.111. Requirements for Specified Sources. (a) Visible emissions. No person may cause, suffer, allow, or permit visible emissions from any source, except as follows. (1) Stationary vents. Visible emissions from any vent shall not exceed the following opacities and must meet the following requirements. (A)-(B) (No change.) (C) Opacity shall not exceed 15% averaged over a six-minute period for any source having a total flow rate greater than or equal to 100,000 actual cubic feet per minute, unless an optical instrument capable of measuring the opacity of emissions is installed in the vent in accordance with subparagraph (D) of this paragraph. Facilities utilizing such instruments shall meet opacity limits outlined in subparagraph (A) or (B) of this paragraph as applicable. Records of all such measurements shall be retained as provided for in sec.101.8 of this title (relating to Sampling). (D) Any opacity monitoring system installed as provided for in subparagraph (C) of this paragraph must satisfy the new source performance standards requirement for opacity continuous emissions monitoring systems (CEMS) as contained in 40 Code of Federal Regulations (CFR) Part 60, Appendix B, Performance Specification 1. In order to demonstrate compliance with Performance Specification 1, the system shall undergo performance specification testing as outlined in 40 CFR 60.13. The facility will maintain records of all such testing for a period of not less than two years which shall be available for inspection by federal, state, and local air pollution control agencies. Compliance with this provision shall be accomplished within one year of the effective date of this rule, except as specified in paragraph (2) of this subsection. (E) (No change.) (F) Compliance with subparagraphs (A), (B), and (C) of this paragraph shall be determined by applying the following test methods, as appropriate. The highest reading obtained shall determine compliance with the appropriate visible emission limit: (i) CEMS as described in subparagraph (D) of this paragraph; (ii) Test Method 9 (40 CFR 60, Appendix A); (iii) Alternate Method 1 to Method 9, Light Detection and Ranging (40 CFR 60, Appendix A); or (iv) equivalent test method approved by the executive director of the Texas Air Control Board (TACB) and United States Environmental Protection Agency (EPA). (G) Current certification of opacity readers for determining opacities under 40 CFR 60, Appendix A, Method 9, shall be accomplished by the successful completion of a TACB visible emissions evaluator's course by opacity readers no more than 180 days before the opacity reading. (2) Sources requiring continuous emissions monitoring. Beginning March 1, 1994, all stationary vents located at the sources specified in this paragraph shall be equipped with a calibrated and properly operating CEMS for opacity. The system shall be calibrated, installed, operated, and maintained as specified in 40 CFR 51, Appendix P, hereby incorporated by reference: (A) steam generators fired by solid fossil fuel with an annual average capacity factor of greater than 30%, as reported to the Federal Power Commission for calendar year 1974, and with a heat input of greater than 250 million British thermal unit per hour; (B) steam generators that burn oil or a mixture of oil and gas and are not able to comply with the applicable particulate matter and opacity regulations without the use of particulate matter collection equipment, and have been found to be in violation of any visible emission standard contained in a state implementation plan; (C) catalyst regenerators for fluid bed catalytic cracking units of greater than 20,000 barrels per day of total feed capacity. (3) Exemptions from continuous emissions monitoring requirements. Opacity monitors shall not be installed or used to determine opacity from any gas stream or portion of a gas stream containing condensed water vapor which could interfere with proper instrument operation, as determined by the executive director. Opacity monitoring techniques as listed in subsection (a)(1)(F) of this section may be substituted with the approval of the executive director and EPA, the highest reading of which will be used to determine compliance with the appropriate opacity standard. If opacity is determined through 40 CFR 60, Appendix A, Method 9, readings shall be made daily, unless weather or other conditions prevent visual observation. (4) Gas flares. (A) Visible emissions from a gas flare shall not be permitted for more than five minutes in any two-hour period, except as provided in sec.101.11(a) of this title (relating to Exemptions from Rules and Regulations). Acid gas flares, as defined in sec.101.1 of this title (relating to Definitions), are subject only to the provisions of subsection (a)(1) of this section. (B) Compliance with subparagraph (A) of this paragraph shall be determined daily by applying the following test methods, as appropriate: (i) (No change.) (ii) Test Method 9, 40 CFR 60, Appendix A; or (iii) equivalent test method approved by the executive director and EPA. (5) Motor vehicles. Motor vehicles shall not have visible exhaust emissions for more than 10 consecutive seconds. Compliance shall be determined as specified in 40 CFR 60, Appendix A, Method 22. (6) Railroad locomotives or ships. (A) (No change.) (B) Compliance with subparagraph (A) of this paragraph shall be determined by applying the following test methods, as appropriate: (i) (No change.) (ii) equivalent test method approved by the executive director and EPA. (7) Structures. (A) (No change.) (B) Compliance with subparagraph (A) of this paragraph shall be determined by applying the following test methods, as appropriate: (i) (No change.) (ii) equivalent test method approved by the executive director and EPA. (8) Other sources. (A) (No change.) (B) Compliance with subparagraph (A) of this paragraph shall be determined by applying the following test methods, as appropriate: (i) (No change.) (ii) equivalent test method approved by the executive director and EPA. (b)-(c) (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 October 2, 1992. TRD-9213370 Lane Hartsock Deputy Director, Air Quality Planning Texas Air Control Board Effective date: October 23, 1992 Proposal publication date: April 24, 1992 For further information, please call: (512) 908-1451 Chapter 112. Control of Air Pollution from Sulfur Compounds Control of Sulfur Dioxide 31 TAC sec.sec.112.1-112.14, 112.16-112.20 The Texas Air Control Board (TACB) adopts the repeal of sec.sec.112.1-112.14 and sec.sec.112.16-112.20, concerning control of sulfur dioxide, without changes to the proposed text as published in the April 24, 1992, issue of the Texas Register (17 TexReg 2934). In concurrent action, TACB adopts sec.sec.112.1-112.9 and sec.sec.112.14-112.21, concerning control of sulfur dioxide. The repeals delete provisions which are obsolete or incompatible with new federal requirements. The concurrently adopted new sections contain substantial changes to the texts of some existing sections and include some renumbering of sections. The provisions of the new sections simplify allowable emissions calculations, combine similar requirements of the repealed sections, and meet federal requirements for continuous emissions monitoring and rule enforceability. In some cases, the content of a new section may be similar or identical to a section being repealed. Public hearings were held in Houston on May 21, 1992, and in Beaumont on May 22, 1992, to consider the proposed repeals. No one commented on the repeals. In compliance with the Americans With Disabilities Act, this document may be requested in alternate formats by contacting Air Quality Planning Program staff at (512) 908-1457, (512) 908-1500 FAX, or 1-800-RELAY-TX (TDD), or by writing or visiting at 12124 Park 35 Circle, Austin, Texas 78753. The repeals are adopted under the Texas Clean Air Act (TCAA), sec.382.017, Texas Health and Safety Code (Vernon 1990), which provides the TACB with the authority to adopt rules consistent with the policy and purposes of the TCAA. 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 October 2, 1992. TRD-9213369 Lane Hartsock Deputy Director, Air Quality Planning Texas Air Control Board Effective date: October 23, 1992 Proposal publication date: April 24, 1992 For further information, please call: (512) 908-1451 Control of Sulfur Dioxide 31 TAC sec.sec.112.1-112.9, 112.14-112.21 The Texas Air Control Board (TACB) adopts new sec.sec.112.1-112.9 and 112. 14- 112.21, concerning control of sulfer dioxide, with changes to the proposed text as published in the April 24, 1992, issue of the Texas Register (17 TexReg 2934). The new sections represent a reorganization of the existing sulfur dioxide (SO [sub]2) rules to include combinations of similar requirements, the removal of obsolete language, and an overall simplification of this undesignated head. The sections also satisfy federal requirements for the installation and use of continuous emission monitoring systems (CEMS) for SO [sub]2 and rule enforceability. Public hearings were held in Houston on May 21, 1992, and in Beaumont on May 22, 1992. A total of 20 commenters submitted testimony on the proposal during the comment period which was extended until July 9, 1992. All of the commenters opposed the proposal. The emission limits and standards proposed for SO [sub]2 were drafted initially to address exceedances of the SO [sub]2 standard in the Houston/Galveston and Beaumont/Port Arthur areas. However, the proposals were very stringent and were anticipated to be quite costly. The staff believes that, under developing circumstances, it would be preferable to conduct workshops and form working groups to reach a consensus on appropriate controls. Since the exceedances in the Beaumont/Port Arthur area were attributable to source upset conditions and since EPA has expressed a willingness to reconsider the nonattainment status of the Houston/Galveston area, the immediate need for these stringent measures has diminished. Industry within the area is offering voluntary reductions which the staff believes will be sufficient to demonstrate attainment. Additionally, there have been no monitored SO [sub]2 exceedances in the area for eight consecutive quarters. The TACB staff, United States Environmental Protection Agency (EPA), and a private contractor have developed a modeling protocol for the attainment demonstration. For these reasons, the staff has withdrawn all provisions within the proposal not associated with federal CEMS requirements and enforceability improvements. The Greater Houston Partnership (GHP) commented extensively on the Houston SO [sub]2 modeling activity. GHP also stated that the four new industrial categories added to the rule, fluid catalytic cracking units (sec.112.10), catalyst reclamation plants (sec.112.11), carbon black plants (sec.112.12), and refinery fuel gas combustion units (sec.112.13), were not mentioned in the preamble, nor did they contain a compliance schedule. GHP also stated that new SO [sub]2 standards proposed in sec.112.3(a) and sec.112.7(c) were not identified in the preamble. Additionally, GHP commented that these proposed sections contained provisions not required by EPA, the Federal Clean Air Act (FCAA), or the Texas Clean Air Act (TCAA). GHP asked for the withdrawal of these sections and all other changes not required by EPA guidance and expressed their willingness to meet with TACB and help develop alternative proposals. GHP objected that no consultation with affected industry occurred prior to this proposal to determine if the change was necessary to address a particular problem. GHP also stated that a more extensive analysis of the costs to meet the proposal should have been included and requested a 60-day extension of the public comment period. GHP stated that the resources of the regulated community in Texas should be conserved to meet the pending regulations on volatile organic compounds and oxides of nitrogen which are required under the new amendments to the FCAA. GHP commented that the expensive SO [sub]2 controls required under the proposal would place Texas industry at a competitive disadvantage in relation to domestic and foreign competitors. The sections referenced by GHP were mentioned in the preamble. However, given the extent of the proposal, the staff agrees that a greater emphasis should have been made. The staff further agrees that there was an unfortunate and inadvertent element of surprise associated with this complex proposal. The proposed change in SO [sub]2 standards and the addition of new industrial categories to the coverage of the rule were initially drafted on the anticipated classification of the Houston/Galveston and Beaumont/Port Arthur areas as nonattainment for SO [sub]2. Subsequent actions and developments, as mentioned previously, have indicated that the Houston/Galveston area will likely remain in attainment. The staff believes that these developments make the proposed revisions unnecessary at this time. All proposed new SO [sub]2 limits and industrial categories as proposed in sec.sec.112. 10-112.13 have been withdrawn. In a separate written comment, GHP identified two other instances where allowable SO [sub]2 limits were lowered and applied to a wider geographical area in response to an anticipated nonattainment classification. Section 112.9 would have extended limitations on sulfur content of liquid fuel to Galveston and Orange Counties and within 30 miles of Harris, Galveston, Jefferson, and Orange Counties. The section would also lower the allowable limits to 50 parts per million by volume (ppmv) beginning in 1996. Section 112. 7 would have extended emission limits for sulfur recovery plants in a similar manner. These proposed revisions are also unnecessary due to industry voluntary reductions and additional air quality modeling. The proposed new limits in sec.112.7 and sec.112.9 have been withdrawn. The comments of GHP were endorsed and emphasized by Texas Mid-Continent Oil and Gas Association, Exxon Company, U.S.A., Amoco Oil Company, Lyondell Petrochemical Company, and Phibro Energy USA, Inc. Gulf States Utilities Company (GSU) stated that utilities should be exempt from SO [sub]2 standards contained in this regulation. They cited the 1990 FCAA amendments which will limit emissions under the Acid Rain Program. Additionally, GSU quoted EPA statistics that show utilities in Texas emitting SO [sub]2 at a rate of less than a third of the national average and stated that there is no public health or welfare threat posed by exceedances of the national ambient air quality standard (NAAQS). The staff acknowledges the effort of the Texas utility industry to control SO [sub]2 emissions and the fact that the FCAA will impose strict limits on these emissions. However, the FCAA is principally implemented through state regulations and an exemption from those regulations is clearly inappropriate. The staff disagrees that the health and welfare of the public is not threatened by exceedances of the NAAQS. In fact, the NAAQS is based on health effects studies. The regulations controlling SO [sub]2 emissions are designed to protect the NAAQS, and no exemptions for utilities are to be granted. A substantial amount of testimony related to the proposed revisions which have been withdrawn. In many cases, the testimony covered topics already discussed. In others, the comments related to effects of the proposal on individual companies and their operations. This analysis does not address each of these comments individually. However, the comments are a part of the public record and were considered in reaching the adopted rule language. These comments will be considered in developing any future rule revisions as needed. The additional commenters included: Electric Reliability Council of Texas (ERCOT), Aluminum Company of America (ALCOA), J.M. Huber Corporation (Huber), Environmental Health Association of the Carbon Black Industry, Fina Oil and Chemical Company, Olin Chemicals, Marathon Oil Company (Marathon), Witco Corporation (Witco), GSU, ASARCO, Inc. (ASARCO), Southwestern Public Service Company (SPS), Texas Utilities Services, Inc. (TU), and Houston Lighting and Power (HLP). The comments that follow address issues in those portions of the proposal where sections were adopted with changes to the proposed language. It should be noted also that language was added to some section titles to achieve consistency in wording. EPA requested that a specific citation of the TCAA be added in the opening paragraph of sec.112.1. TU commented that the definition for "continuous monitoring" should specify "continuous emissions monitoring" to differentiate from fuel sampling and other monitoring systems. TU also stated that the definition for "in-stack concentration" should refer to pollutant concentration. Additionally, TU observed that the equation for "in-stack concentration" was missing a division symbol. The staff agrees that these changes make the definitions more precise and has added the appropriate language. The equation for "in-stack concentration" has been corrected. The designation for the term "Cx" has been changed to read "measured pollutant concentration" to clarify terms used in the definition. Huber commented that language should be added to sec.112.2 to include raw material feedstock in sulfur content sampling procedures since this is the primary source of SO [sub]2 in carbon black plants. ASARCO suggested that the monitoring requirements of this section be transferred to a section dealing with the particular source category required to have CEMS under federal requirements. Marathon stated that facilities complying with sec.112.13, concerning allowable rates-refinery fuel gas combustion units, not be required to install CEMS. GSU, ERCOT, and TU commented that the deadline for installing CEMS should be January 1, 1995, to be consistent with the FCAA. An individual stated that the general public should be allowed a comment period prior to the executive director making a determination to substitute fuel analysis for CEMS. The staff has added language that would specify the sampling of raw material feedstock as an additional testing requirement since this is a source of SO [sub]2 emissions in carbon black plants. Additionally, federally mandated monitoring requirements, along with any options allowed under 40 CFR 51, Appendix P, have been transferred to the section covering the specific source category. Refinery fuel gas combustion units are not included under the federal mandate and, therefore, are not required to install CEMS. There is no provision in the adopted rule that will require CEMS installation in these units. The staff has made the deadline for CEMS installation consistent with the FCAA where appropriate. For the purposes of this revision, a date consistent with 40 CFR 51, Appendix P, is usually required instead of the Title IV, FCAA requirements. The determination of the use of a fuel analysis system in place of CEMS is based solely on technical requirements. Some sources are configured or have substances in the effluent stream which render CEMS ineffective in monitoring emissions. The staff believes a public comment period on substitution of a fuel analysis system would unnecessarily delay the review process and has retained the language as proposed. ASARCO, SPS, HLP, ERCOT, TU, and GSU objected to language in sec.112.3 prohibiting emissions that would cause or contribute to an exceedance of the NAAQS for SO [sub]2. They stated that such a linking of stack emissions and NAAQS could only be related through dispersion modeling. As a result, each source would be responsible for modeling to establish emission limitations, and each source in an area where the NAAQS was exceeded would be individually responsible for the exceedance. The commenters stated that this linking of NAAQS and source emissions is the responsibility of the state. The responsible agency can set individual source limitations through the state implementation plan and permitting processes to protect NAAQS. The staff agrees that a number of complexities would arise in emissions determination, compliance demonstrations, modeling, and enforcement. These proposed revisions to sec.112.3 have been withdrawn. Witco commented that there is no scientific basis for the lower maximum ground level concentrations of 0.28 ppm of SO point=4.02p [sub]2 specified for Harris and Galveston Counties as opposed to the rest of the state. The lower concentrations in Harris and Galveston Counties are specified to protect NAAQS due to the number of SO [sub]2 sources in these counties. This requirement existed in Regulation II prior to the proposal, and the staff does not support any relaxation of the standard. GHP commented that the specification of an "ambient" ground level concentration in sec.112.3(a), as opposed to a "net" level is a new concept and is unnecessary, given the current SO [sub]2 attainment status within the state. The staff agrees that the concept of an individual source protecting an ambient standard should not be adopted. The reasons for this recommendation were stated in the discussion on the linking of individual source emissions and NAAQS. ALCOA commented that there should be flexibility in sec.112.3(e) monitoring requirements that would consider multiple stacks on one baghouse unit or multiple baghouses for one unit. The staff has deleted monitoring requirements from this section, including the requirement under specific source categories. The adopted monitoring requirements do not include monitoring baghouses for SO [sub]2. An individual commented that source compliance records should be made available for public view. The staff does not agree that public inspection of source compliance records be included in this section. However, these records are available to the public upon request under the TCAA, sec.381.020. New language that was proposed for sec.112.4 would apply exemptions from net ground level concentrations (NGLC) only in El Paso County. This would reverse the current situation where exemptions are allowed statewide, except for the Houston/Galveston and Beaumont/Port Arthur areas, and El Paso County. GSU commented that the proposed language removes the previous exemption for sources utilizing best available control technology (BACT) which do not contribute to an exceedance of NAAQS. They further stated that there is no EPA requirement to remove the exemption. ASARCO stated that the proposed language was unnecessary as exemptions are currently available for El Paso County under approved area control plans. They mentioned their own plant which currently operates under such a plan. ASARCO stated that the proposed change would upset the current legal structure. The staff has considered these comments in conjunction with the SO [sub]2 attainment status of affected areas of the state and agrees that the current exemption conditions and areas of applicability should be retained along with the option of using an approved area control plan. It should be noted that one of the conditions under which an exemption may be granted is that NAAQS not be exceeded. The staff believes the language change is not needed and places an unnecessary burden on industries outside of El Paso County and the Houston/Galveston and Beaumont/Port Arthur areas. The language as adopted preserves the original intent of this section. An individual expressed his objection to exemption of El Paso County sources from established NGLC of SO [sub]2. As previously discussed, an exemption for El Paso County sources is not to be included in this section. Any exemptions to NGLC will be granted only after a source meets the requirements of BACT and demonstrates its emissions will not cause a violation of NAAQS. These exemptions are available under sec.112.19, Application for Area Control Plan, for all areas of the state except Harris, Galveston, Jefferson, and Orange Counties. Sections 112.5, 112.6, and 112.7 each contained proposed revisions requiring reduction in SO [sub]2 allowable emissions and compliance demonstrations. The allowable emissions reductions which applied only in Harris, Galveston, Jefferson, and Orange Counties and within a 30-mile radius of Harris, Galveston, Jefferson, and Orange Counties are not needed at this time since an enforceable voluntary reduction program is being developed. These reductions will need to be sufficient to demonstrate attainment, and necessary compliance demonstrations will be required under sec.112.2. Therefore, the compliance demonstration requirements identified in sec.sec.112.5, 112.6, and 112.7 are not necessary, and have been withdrawn. The current SO [sub]2 emission limitations required under these sections has been retained. During a meeting held on July 1, 1992, between EPA, the TACB staff, and affected industries, two issues concerning sec.112.8 were discussed. EPA requires that SO [sub]2 emission standards be averaged over a three-hour period. The affected industries commented that source monitoring requirements under 40 CFR Part 51, Appendix P, would be best located in the sections concerning that particular source category. Solid fossil fuel-fired steam generators of greater than 250 million British thermal unit heat input per hour have such a monitoring requirement. The staff has added averaging times to the section to meet EPA enforcement requirements. For reasons of rule clarity, the required monitoring proposed in sec.112.2 has been transferred to sec.112.8. As stated previously, the staff has transferred source monitoring requirements to the section concerning a specific source category. Additionally, compliance dates for the monitoring requirements have been set by agreement between TACB, EPA, and the affected industries. A private citizen opposed to the TACB/TU joint study of SO point=4.02p [sub]2 and the "white haze" phenomenon in the Dallas/Fort Worth area. The referenced study is a past amendment to this rule and was not an issue in this proposal. No changes for the existing section language were included in this proposal. TU commented that the amendment to sec.112.9, lowering SO point=4.02p [sub]2 standards from 440 ppm to 350 ppm, is not necessary since all parts of the state are in attainment for this pollutant. They also stated that this revision would eliminate the use of Number 5 or 6 fuel oils for alternative fuels. HLP and GSU commented that it will be impossible to meet the retroactive compliance date in subsection (b) for the lowering of SO [sub]2 standards to 150 ppm as averaged over three hours. HLP objected to the linking of source emission standards and NAAQS and to the necessity of a compliance demonstration. GSU commented that ambient SO [sub]2 levels in Jefferson, Orange, Harris, and Galveston Counties do not warrant the lowering of the emission standards to 50 ppm in 1996. After review of available monitoring data, the staff agrees that a new statewide standard of 350 ppm is not necessary and has deleted that provision. As mentioned previously in this discussion, industries in Harris, Galveston, Jefferson, and Orange Counties have voluntarily reduced their allowable SO [sub]2 emissions. Considering this and the fact that the counties are in attainment of the NAAQS, subsection (b) has been deleted. For reasons stated earlier, the staff has withdrawn all language linking point source emissions and NAAQS. Also, the staff has added an averaging time to the emission limits in subsection (c) to comply with EPA enforceability requirements. Section 112.10, concerning allowable rates-fluid catalytic cracking units, sec.112.11, concerning allowable rates-catalyst recovery and catalyst metal reclamation plants, sec.112.12, concerning allowable rates-carbon black plants, and sec.112.13, concerning allowable rates-refinery fuel gas combustion units were intended to provide additional SO [sub]2 controls for specific source categories in the Houston/Galveston and Beaumont/Port Arthur areas due to an anticipated reclassification of the areas to nonattainment for SO [sub]2. As discussed previously, the staff believes this reclassification will not occur, and the new standards are not necessary. The language in these sections has been deleted and the sections are held in reserve. ASARCO questioned the revision of sec.112.14 since there are no SO [sub]2 nonattainment problems associated with nonferrous smelters in Texas. ASARCO pointed out that current modifications to their facility include the application of BACT and compliance demonstrations. ASARCO also objected to lowering the emission standard for reverberatory furnaces to 650 ppmv during the current modification of their facility. While ASARCO will have no trouble in meeting a much lower standard once the plant modifications are complete, the TACB proposal would require immediate compliance. After completion of the reverberatory furnace modification, ASARCO's source permit will allow emissions of 500 ppmv. ASARCO believes that, regardless of their ability to meet a lower standard, there is no reason to lower the current reverberatory furnace limit of 6,000 ppmv. ASARCO also stated that it is inappropriate to impose new source performance standard and compliance demonstrations on sulfuric acid plants used for emission control at smelters. In further comment on this section, an individual stated that language requiring the control of SO [sub]2 emissions from gas collection systems such that leakage will be "prevented to the maximum extent possible" is insufficient and should provide exact limits. EPA suggested language to clarify the equations in this section. The staff is aware of ASARCO's initiative in updating the emissions control technology at their El Paso plant and applauds this effort. An effective date has been included in this section that will allow current emission levels and a six-hour averaging time until a permit modification is complete. EPA requires the compliance test for sulfuric acid plants. Regardless of the primary purpose of the acid plant, it has SO [sub]2 emissions and should be subject to control. The proposed language of sec.112.14(e) has been adopted as proposed. Prevention of all SO [sub]2 leaks from smelting processes is not practicable due to the nature of the operation. Field inspectors can make an accurate determination on whether a facility is controlling these leaks to the maximum extent possible. The language concerning control of leakage in sec.112.14(f)(2) has been adopted as proposed, and the EPA suggested language to clarify the equations has been added. Commenting on sec.112.15, Witco asked for a definition of "fuel" as it would apply to the filing of a fuel shortage plan. Witco questioned whether the definition of fuel applies to raw material used in the production of saleable products, as is the case with carbon black plants, or only to the production of heat. Witco challenged the need for statements concerning the availability and price of lower sulfur fuels. An individual objected to the allowance of any exemptions from ground level concentration standards in this section and sec.112.16. EPA commented that a clear basis for the executive director's approval of a fuel shortage plan should be stated. Specification has been added to require that fuel oil used as raw material feed stock be included in the filing requirements of this section since this is the primary source of SO [sub]2 in carbon black plants. While carbon black plants are not included under specific SO [sub]2 source limits, knowledge of the sulfur content of raw materials used in the production process is important for accurate emission inventories. Statements concerning the availability and price of low sulfur fuels are important in accurately evaluating a fuel shortage plan. Such statements are reasonable and the requirement has been retained in the adopted rule. Temporary fuel shortages do occur and industries need the flexibility to continue operation during such periods. Fuel shortage plans may exempt sources from complying with NGLC; however, they are still required to comply with NAAQS. The staff has retained the option for fuel shortage operating plans based on economic necessity, and has added language stating the basis on which the executive director will approve a fuel shortage plan. Sections 112.19, 112.20, and 112.21 concern the implementation of area control plans to grant exemptions from NGLC of SO point=4.02p [sub]2. ASARCO commented that there is no reason presented for revising the area control plan requirements and that the revisions appear to provide relief from the NAAQS. ASARCO also stated that the revision to sec.112.21 would allow a NGLC of 0.4 ppm which is the same as the generally applicable NGLC. This would mean an area control plan would have no effect. An individual objected to the concept of an area control plan and the exemptions it would provide from NGLC. The staff has reviewed the situation concerning area control plans, particularly with regard to El Paso County, and has determined that no substantive change need be made to the procedures. The staff has made changes in section references to coincide with other changes made in this proposal. Sources operating under area control plans must not contribute to a violation of NAAQS. The staff believes these plans offer flexibility to the shifting operational requirements of industry and TACB is retaining this option in these sections. TU commented that the March 1, 1994, compliance date in sec.112.22 should be changed to January 1, 1995, to be consistent with the FCAA amendment. HLP and GSU stated that deadlines contained in this section conflict with schedules in sec.112.9(b) and would require retroactive compliance. Section 112.9(b) is not being adopted as its lower SO point=4.02p [sub]2 limits are not necessary, and compliance schedules, consistent with federal requirements, are contained in the section concerning the category of source to which they apply. Therefore, sec.112.22 is not needed and has been withdrawn. In compliance with the Americans With Disabilities Act, this document may be requested in alternate formats by contacting Air Quality Planning Program staff at (512) 908-1457, (512) 908-1500 FAX, or 1-800-RELAY-TX (TDD), or by writing or visiting at 12124 Park 35 Circle, Austin, Texas 78753. The new sections are adopted under the TCAA, sec.382.017, Texas Health and Safety Code (Vernon 1990), which provides the TACB with the authority to adopt rules consistent with the policy and purposes of the TCAA. sec.112.1. Definitions. Unless specifically defined in the Texas Clean Air Act (TCAA), sec.382.003 or in the rules of the board, the terms used by the board have the meanings commonly ascribed to them in the field of air pollution control. In addition to the terms which are defined by the TCAA, the following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Continuous emissions monitoring-Sampling, analyzing, and recording at least one measurement of sulfur dioxide concentration in each 15-minute period from the effluent of each affected process or the emission control system serving each affected process. Effective stack height-A value in feet calculated by the following equation: [graphic] In-stack concentration -The concentration of a pollutant inside the stack measured in parts per million by volume (ppmv) referenced at 0% stack gas oxygen on a dry basis averaged over a period of one hour with oxygen determined by the equation: [graphic] Secondary metal recovery facility-A facility which recovers metals and alloys from new and used scrap and dross. It does not mean assembling, sorting, and breaking up scrap metal, without smelting and refining. Short-stack reduction factor-The factor by which the allowable emission rate must be multiplied if the source has an effective stack height less than the standard effective stack height. The short-stack reduction factor is calculated by the following equation: [graphic] sec.112.2. Compliance, Reporting, and Recordkeeping. (a) When requested under sec.101.8(a) of this title (relating to Sampling), a facility that is subject to the sulfur dioxide (SO [sub]2) limits of this chapter shall demonstrate compliance by Method 6, 6A, or 6C as described in 40 Code of Federal Regulations (CFR), Part 60, Appendix A. Any person affected by this subsection may request approval by the executive director of the Texas Air Control Board (TACB) and by the United States Environmental Protection Agency of alternative test methods, including sampling and analysis of fuel or raw material feedstock, as described in Method 19 of 40 CFR, Part 60, Appendix A, to determine compliance. (b) A facility that is required to demonstrate compliance with SO [sub]2 emission limits under this chapter shall report the results so obtained, when requested, to the appropriate regional office of TACB within a reasonable time specified by and on forms furnished by the executive director. (c) A facility that is required to demonstrate compliance with SO [sub]2 emission limits under this chapter shall maintain records on site of any SO [sub]2 emissions data, fuel sampling data, or sampling data of fuel oil used as raw material for two years. These records shall be available for inspection by federal, state, or local air pollution control agencies. sec.112.3. Net Ground Level Concentrations. (a) Except as specified in subsections (b) or (c) of this section or sec.112.4 of this title (relating to Net Ground Level Concentration-Exemption Conditions), no person in the State of Texas may cause, suffer, allow, or permit emissions of sulfur dioxide (SO [sub]2) from a source or sources operated on a property or multiple sources operated on contiguous properties to exceed a net ground level concentration of 0.4 part per million by volume (ppmv) averaged over any 30- minute period. (b) No person in Galveston or Harris County may cause, suffer, allow, or permit emissions of SO [sub]2 from a source or sources operated on a property or multiple sources operated on contiguous properties to exceed a net ground level concentration of 0.28 ppmv averaged over any 30-minute period. (c) No person in Jefferson or Orange County may cause, suffer, allow, or permit emissions of SO [sub]2 from a source or sources operated on a property or multiple sources operated on contiguous properties to exceed a net ground level concentration of 0.32 ppmv averaged over any 30-minute period. sec.112.4. Net Ground Level Concentration-Exemption Conditions. The executive director, in consideration of a request from an affected party, may find that, except in El Paso County, a property or contiguous properties are exempt from the requirements of sec.112.3(a) of this title (relating to Net Ground Level Concentrations), if the new or modified emission source is constructed and operated on such property or properties under all the following conditions. (1) The construction and operation of the new or modified emission source meets all applicable federal new source performance standards and uses best available control technology, with consideration to the technical practicability and economic reasonableness of reducing or eliminating the emissions from the facility. (2) The permit application contains a demonstration using appropriate diffusion modeling, as approved by the United States Environmental Protection Agency and the Texas Air Control Board Modeling Division, that the construction and operation of the new or modified emission source does not cause or contribute to a condition such that either the primary or the secondary sulfur dioxide national ambient air quality standards are exceeded in the area. (3) Those sources proposed for an exempt property and those sources existing on an exempt property prior to the effective date of this section shall be in compliance with this section or with an area control plan obtained pursuant to sec.112.19 of this title (relating to Application for Area Control Plan). sec.112.5. Allowable Emission Rates-Sulfuric Acid Plant Burning Elemental Sulfur. (a) No person may cause, suffer, allow, or permit emissions of sulfur dioxide (SO [sub]2) from any sulfuric acid plant burning elemental sulfur to exceed the emission limits specified by the equation: [graphic] (b) If a source has an effective stack height less than the standard effective stack height determined by the equation: [graphic] (c) Beginning September 30, 1994, sulfuric acid plants of greater than 300 tons per day production capacity, with production being expressed as 100% acid, and to which this section applies, shall be equipped with a continuous emissions monitoring system (CEMS) for SO [sub]2. The CEMS shall be installed, calibrated, and operated as specified in 40 Code of Federal Regulations Part 51, Appendix P, hereby incorporated by reference. sec.112.6. Allowable Emission Rates-Sulfuric Acid Plant. (a) Except as provided in sec.112.5 of this title (relating to Allowable Emission Rates-Sulfuric Acid Plant Burning Elemental Sulfur), and in sec.112.14 of this title (relating to Allowable Emission Rates-Nonferrous Smelter Processes), no person may cause, suffer, allow, or permit emissions of sulfur dioxide (SO [sub]2) from any sulfuric acid plant to exceed the emission limits specified by the equation: [graphic] (b) If a source has an effective stack height less than the standard effective stack height determined by the equation: [graphic] (c) Beginning September 30, 1994, sulfuric acid plants of greater than 300 tons per day production capacity, with production expressed as 100% acid, and to which this section applies, shall be equipped with a continuous emissions monitoring system (CEMS) for SO [sub]2. The CEMS shall be installed, calibrated, and operated as specified in 40 Code of Federal Regulations Part 51, Appendix P, hereby incorporated by reference. sec.112.7. Allowable Emission Rates-Sulfur Recovery Plant. (a) No person may cause, suffer, allow, or permit emissions of sulfur dioxide (SO [sub]2) from any sulfur recovery plant to exceed the emission limits specified for stack effluent flow rates less than or equal to 4,000 standard cubic feet per minute (scfm) as determined by the equation: [graphic] (b) If a source has an effective stack height less than the standard effective stack height determined for stack effluent rates less than or equal to 4,000 scfm by the equation: [graphic] sec.112.8. Allowable Emission Rates From Solid Fossil Fuel-Fired Steam Generators. (a) Except as provided in subsection (b) of this section, no person may cause, suffer, allow, or permit emissions of sulfur dioxide (SO [sub]2) from any solid fossil fuel-fired steam generator to exceed 3. 0 pounds per million Btu (MMBtu) heat input averaged over a three-hour period. (b) No person may cause, suffer, allow, or permit emissions of SO [sub]2 from any solid fossil fuel-fired steam generator located in Milam County, which began operation prior to January 1, 1955, to exceed 4.0 pounds per MMBtu heat input averaged over a three-hour period. (c) Units having a design heat input of greater than 1,500 MMBtu per hour and, which on January 1, 1991, were not subject to new source performance standards, shall meet one of the following requirements: (1) after July 31, 1996, no person may cause, suffer, allow, or permit emissions of SO [sub]2 from any solid fossil fuel-fired steam generator to exceed 1.2 pounds per MMBtu heat input averaged over a three-hour period or an equivalent in total allowable annual site emissions; or (2) the owner/operator of the unit(s) shall fund and support a research study of winter atmospheric haze, also known as "white haze," in the Dallas/Fort Worth (DFW) area, to be completed by July 31, 1996. Within 90 days from the effective date of this rule, the owner/operator shall submit a formal proposal for this study designed to allow successful completion of this study by the date specified previously. The proposal shall include milestone dates, the study's general approach and objectives, and shall include minimum and maximum financial responsibilities on the part of the owner/operator. The Texas Air Control Board (TACB) executive director shall approve or reject the study within 120 days from date of the proposal submittal. The TACB shall base its approval or rejection on the technical merits and adequacy of approach to the research study. Should the proposal be rejected, an extension not to exceed 60 days for renegotiation may be granted at the discretion of the executive director. Should this extension expire without proposal approval, then paragraph (1) of this subsection shall apply. Following such approval, the study shall be directed by a steering committee selected by TACB in consultation with the owner/operator of the unit(s) and shall be controlled, comprehensive, state-of-the-art, and quality- assured. The steering committee shall define the scope of the study and establish appropriate milestones to assure completion of the study by July 31, 1996. The study shall be designed to demonstrate conclusively whether or not a reduction of SO [sub]2 emissions from the affected unit(s) to 1.2 pounds per MMBtu will significantly improve winter visibility in the DFW area. No later than October 31, 1996, TACB shall make a finding based on the study as follows, either: (A) that reductions of SO [sub]2 emissions from the affected unit(s), as defined in subsection (c) of this section, will significantly improve winter visibility in the DFW area. If such finding is made, then the affected unit(s) shall achieve compliance with a SO [sub]2 emission limit of 1.2 pounds per MMBtu or an equivalent in total allowable annual site emissions by July 31, 2000; or (B) that reductions of SO [sub]2 emissions from the affected unit(s), as defined in subsection (c) of this section, will not significantly improve winter visibility in the DFW area. If such a finding is made or if TACB cannot make a finding on the basis of the study by October 31, 1996, then the affected unit(s) shall maintain compliance with subsection (a) of this section. (d) Except as provided in subsection (e) of this section, beginning September 30, 1994, solid fossil fuel-fired steam generators of greater than 250 MMBtu heat input per hour which are equipped with SO [sub]2 control equipment shall be equipped with a continuous emissions monitoring system (CEMS) for SO [sub]2. The CEMS shall be installed, calibrated, and operated as specified in 40 Code of Federal Regulations Part 51, Appendix P, hereby incorporated by reference. (e) In lieu of the requirements of subsection (d) of this section, beginning September 30, 1994, sources subject to the Federal Clean Air Act, sec.412(c), as amended in 1990 shall meet the requirements of sec.412(c) and the regulations promulgated there-under. sec.112.9. Allowable Emission Rates-Combustion of Liquid Fuel. (a) No person may cause, suffer, allow, or permit emissions of sulfur dioxide (SO [sub]2) from any liquid fuel-fired steam generator, furnace, or heater to exceed 440 parts per million by volume (ppmv) at actual stack conditions and averaged over a three-hour period. (b) If a source has an effective stack height less than the standard effective stack height as determined from the equation: [graphic] (c) No later than July 31, 1993, no person in Harris or Jefferson County may cause, suffer, allow, or permit the use of liquid fuel for combustion from any stationary liquid fuel-fired steam generator, furnace, or heater with a sulfur content greater than 0.3% by weight or emissions of SO [sub]2 from any liquid fuel-fired steam generator, furnace, or heater to exceed 150 ppmv, as calculated based on 20% excess air and as averaged over a three-hour period. The requirements of this subsection are not intended to apply to sulfuric acid plants. (d) Except as provided in subsection (e) of this section, beginning September 30, 1994, liquid fossil fuel-fired steam generators of greater than 250 MMBtu heat input per hour which are equipped with SO [sub]2 control equipment shall be equipped with a continuous emissions monitoring system (CEMS) for SO [sub]2. The CEMS shall be installed, calibrated, and operated as specified in 40 Code of Federal Regulation Part 51, Appendix P, hereby incorporated by reference. (e) In lieu of the requirements of subsection (d) of this section, beginning September 30, 1994, sources subject to the Federal Clean Air Act, sec.412(c), as amended in 1990 shall meet the requirements of sec.412(c) and the regulations promulgated there-under. sec.112.14. Allowable Emission Rates-Nonferrous Smelter Processes. (a) This section is applicable to all processes in nonferrous smelters, including, but not limited to, roasters, smelting furnaces, converters, sintering machines, blast furnaces, fuming furnaces, retorts, slag treatment plants, and sulfuric acid plants. (b) No person may cause, suffer, allow, or permit emissions of sulfur dioxide (SO [sub]2) to the atmosphere from any process as specified in this section to exceed the applicable concentration of SO [sub]2 as follows: (c) Each stack or emission point in a primary smelter or secondary metal recovery facility shall have a standard effective stack height not less than that determined by the equation: or more gas streams either wholly or in part are discharged through a single stack, the combined flow rate of all streams shall be used to determine the required standard effective stack height. If streams with different SO [sub]2 as determined in subsection (b) of this section, are combined into a single stream, the required effective stack height is determined as follows. (1) Calculate a total combined stream SO [sub]2 concentration allowable as follows: [grapic] (2) Calculate interpolation constant (Kt) for the total combined stream as follows: [graphic] (3) Calculate standard effective stack height for total combined stream as follows: [graphic] (d) If a stack or emission point has an effective stack height less than the standard effective stack height as determined in subsection (c) of this section, the allowable concentration of SO [sub]2 must be reduced by multiplying it by the short-stack reduction factor. (e) The owner or operator of a nonferrous smelter shall utilize best engineering techniques to capture and vent fugitive SO [sub]2 emissions through a stack or stacks. Such techniques shall include, but not be limited to, the following: (1) operating and maintaining all ducts, flues, and stacks in a leak-free condition; (2) operating and maintaining all process equipment and gas collection systems in such a fashion that leakage of SO point=4.52p [sub]2 gases will be prevented to the maximum extent possible; (3) collecting SO [sub]2 emissions through the tallest stack or stacks serving the facility, whenever possible, using gas collection systems and/or ducting. (f) The owner or operator of any primary smelter subject to the provisions of this section shall install, calibrate, maintain, and operate a measurement system or systems approved by the executive director for continuously monitoring SO [sub]2 emissions in the effluent of each process subject to subsection (a) of this section. The executive director shall not require continuous monitoring for sources emitting less than 25 tons per year of SO [sub]2 into the atmosphere. sec.112.15. Temporary Fuel Shortage Plan Filing Requirements. (a) Any person may file with the Texas Air Control Board (TACB) a temporary fuel shortage control plan if unable to comply with sec.112.3 of this title (relating to Net Ground Level Concentration), sec.112.9 of this title (relating to Allowable Emission Rates-Combustion of Liquid Fuel), or with any permit requirements, other than those required under the Federal Clean Air Act, sec.111, which limit sulfur dioxide emissions from any combustion unit solely because of the nonavailability of low sulfur fuels. The plan shall include all of the following: (1) evidence of the nonavailability of low sulfur fuels, including, but not limited to, statements from fuel suppliers which address the availability and prices of lower sulfur fuels and the expected duration of any period of non- availability of particular fuels. The person filing the plan must annually request and receive an extension from the executive director or the plan will automatically expire one year after receipt of the plan by TACB; (2) a statement that all emissions inventory data required by TACB are complete, accurate, and on file with TACB; (3) data for each source within the entire plant that uses the higher sulfur fuel. The data shall include the type, quantity, and sulfur content of all the fuels to be burned, excess air to be used, and the associated sulfur abatement procedure to be used, if any; (4) any other information as specified by the executive director. The executive director may require more frequent and extensive monitoring for persons affected by this section than would normally be required for persons affected by sec.112.3 of this title and sec.112.9 of this title. (b) The executive director may make an independent determination of a need to operate under the temporary fuel shortage control plan based on the evidence of the nonavailability of low sulfur fuel. This determination/approval shall be effective on the date specified in the executive director's written notification of such determination. (c) The requirements of this section and sec.sec.112.16, 112.17, and 112.18 of this title (relating to Temporary Fuel Shortage Plan Operating Requirements; Temporary Fuel Shortage Plan Notification Procedures; and Temporary Fuel Shortage Plan Reporting Requirements) shall also apply to shortages of low sulfur fuel oils where those oils are used as raw material in the production of a saleable product. sec.112.16. Temporary Fuel Shortage Plan Operating Requirements. (a) Following the approval of a temporary fuel shortage plan filed pursuant to sec.112.15 of this title (relating to Temporary Fuel Shortage Plan Filing Requirements), the provisions of a plan will govern the operation of the source with regard to emissions of sulfur dioxide (SO [sub]2) during the periods of low sulfur fuel shortages. (1) During operation under an approved fuel shortage plan, the source shall continue to comply with the following: (A) permit conditions required under the Federal Clean Air Act (FCAA), sec.111; (B) the national ambient air quality standard (NAAQS) for SO [sub]2 or an SO [sub]2 increment for prevention of significant deterioration (PSD) of air quality; (C) sec.112.17 of this title (relating to Temporary Fuel Shortage Plan Notification Procedures). (2) During operation under an approved fuel shortage plan, the source will be exempt from the following: (A) sec.112.3 of this title (relating to Net Ground Level Concentrations); (B) sec.112.9 of this title (relating to Allowable Emission Rates-Combustion of Liquid Fuel); (C) existing permit conditions regulating emissions of SO [sub]2, except as specified in paragraph (1)(A) of this subsection. (b) An evaluation of the plan will be made by the applicant using appropriate diffusion modeling, as approved by the United States Environmental Protection Agency and the Texas Air Control Board Modeling Section, and following a signed modeling protocol agreement. If the plan cannot adequately demonstrate that the burning of higher sulfur fuels will not cause or contribute to a violation of any NAAQS and/or any PSD increment for SO point=4.52p [sub]2, then the person filing the plan shall request that the governor file a petition for relief under the FCAA, sec.110(f) with the president of the United States. sec.112.17. Temporary Fuel Shortage Plan Notification Procedures. Any person who operates a source under a temporary fuel shortage control plan filed pursuant to sec.112.15 of this title (relating to Temporary Fuel Shortage Plan Filing Requirements), shall comply with the following notification procedures. (1) The executive director and the appropriate local air pollution control agency shall be notified in writing as soon as practicable of a fuel shortage or impending fuel shortage which causes or may cause an excessive emission that contravenes sec.112.3 of this title (relating to Net Ground Level Concentration) and sec.112.9 of this title (relating to Allowable Emission Rates-Combustion of Liquid Fuel), or any permit requirements. The notification shall include an estimate of the expected duration of the fuel shortage. (2) The executive director of the Texas Air Control Board and the appropriate local air pollution control agency shall be notified in writing as soon as practicable of the termination of a fuel shortage which would allow the resumption of operations in compliance with sec.112.3 of this title, sec.112.9 of this title, and any permit requirements. sec.112.18. Temporary Fuel Shortage Plan Reporting Requirements. Any person who files a temporary fuel shortage control plan under sec.112.15 of this title (relating to Temporary Fuel Shortage Plan Filing Requirements), and operates a source under that plan pursuant to sec.112.16 of this title (relating to Temporary Fuel Shortage Plan Operating Requirements) and sec.112.17 of this title (relating to Temporary Fuel Shortage Plan Notification Procedures), must submit to the Texas Air Control Board, on a semi-annual basis, a written report detailing the types, quantity, and sulfur content of fuels burned during the previous six months, the sources at which these fuels were burned, and the dates on which the higher sulfur fuels were burned. sec.112.19. Application for Area Control Plan. The owner or operator a source which emits sulfur dioxide (SO [sub]2) may petition the Texas Air Control Board for relief from the requirements of sec.112.3(a) of this title (relating to Net Ground Level Concentrations), by filing with the Executive Director, an application for an area control plan. An application for an area control plan shall include, but is not limited to, a combination of evidence that best available control technology is being employed at all the affected sources, having due regard for the technical practicability and the economic reasonableness of reducing or eliminating the emissions of SO [sub]2 from the affected source, and an ambient air sampling system to record SO [sub]2 levels in the affected area. Any person who files an application for an area control plan shall demonstrate the capability of all sources in the affected area of the state to maintain all promulgated SO [sub]2 ambient air quality standards. sec.112.20. Exemption Procedure. Upon recommendation by the executive director, the Texas Air Control Board may enter a board order exempting a source from the requirements of sec.112.3(a) of this title (relating to Net Ground Level Concentrations), if the owner/operator has filed an application pursuant to sec.112.19 of this title (relating to Application for Area Control Plan), contingent upon the continued compliance by the owner/operator with the remaining terms of the board order. sec.112.21. Allowable Emission Rates Under Area Control Plan. No person or persons who have been issued a board order establishing an area control plan pursuant to sec.112.20 of this title (relating to Exemption Procedure), may cause or contribute to a condition in which the ambient air quality in the affected areas of the state will exceed 0.5 parts per million by volume of sulfur dioxide averaged over a one-hour period. 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 October 2, 1992. TRD-9213360 Lane Hartsock Deputy Director, Air Quality Planning Texas Air Control Board Effective date: October 23, 1992 Proposal publication date: April 24, 1992 For further information, please call: (512) 908-1451 Part IX. Texas Water Commission Chapter 292. River Authorities The Texas Water Commission adopts new sec.sec.292.1-292.3 and 292.11-292.13, concerning general provisions, and administrative policies for water districts and river authorities, without changes to the proposed text as published in the August 14, 1992, issue of the Texas Register (17 TexReg 5671). These new rules are adopted in order to provide guidelines for supervision of certain districts and river authorities. Subchapter A of Chapter 292 (relating to General Provisions) is comprised of sec.sec.292.1-292.3. Section 292.1 (relating to Objective and Scope of Rules) delineates the objective and scope of the rules. Section 292.2 (relating to Meaning of Certain Words) defines terms and phrases to be used in the rules. Section 292.3 (relating to Texas Water Commission Report to the Legislature) dictates that the executive director is to submit a report of findings made during the supervision of districts and authorities to the governor, lieutenant governor, and speaker of the house. This section also describes the contents of the report. Subchapter B of Chapter 292 (relating to Administrative Policies) is comprised of sec.sec.292.11-292.13. Section 292.11 (relating to Administrative Policies to be Adopted by the Board) states that the provisions set forth in sec.292.13 (relating to Minimum Provisions) are to be considered the minimum standards by which the conduct of the board of a district or an authority is to be measured. Section 292.12 (relating to the Right of Executive Director to Review Policies and Other Documents) provides a basis for the executive director to determine if administrative policies comply with these rules and documents comply with the administrative policies. Section 292.13 (relating to Minimum Provisions) dictates that certain provisions are to be incorporated into the administrative policies adopted by the districts and authorities that are subject to this chapter. The provisions in this section include a code of ethics for river authority or district officials and employees, a travel expenditures policy, an investment policy for the funds of river authorities or districts, a policy for the selection of professional services, and a management policy. During the 30-day comment period, which closed on September 14, 1992, we received one comment regarding these rules. The comment was received from a director of the Sabine River Authority, requesting clarification and direction in addressing the following administrative policies of river authorities paying for the preparation of wills for river authority employees; paying 25% of gross pay to employees' retirement benefit in addition to Social Security benefits; providing hospitalization insurance for directors, and paying $100 per diem to directors to read and review newspaper articles and authority correspondence. In general, the comment letter received brings forth issues which may need clarification for each authority. However, the commenter did not express concerns on any specific section of this chapter. The commission believes that those issues identified should be processed as a complaint and addressed within the context of the operation of the authority. To the extent that these issues require additional legislative guidance, such issues will be incorporated into the report required pursuant to the Texas Water Code, sec.12. 081. Subchapter A. General Provisions 31 TAC sec.sec.292.1-292.3 The new sections are adopted under the Texas Water Code, sec.sec.5.013, 5.103, 5.105, and 12.081, which provides the Texas Water Commission with the authority to adopt any rules necessary to carry out its powers and duties under the Texas Water Code and other laws of the State of Texas, to establish and approve all general policies of the commission, and to issue rules necessary to supervise districts and authorities. 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 September 30, 1992. TRD-9213322 Mary Ruth Holder Director, Legal Division Texas Water Commission Effective date: October 22, 1992 Proposal publication date: August 14, 1992 For further information, please call: (512) 463-8069 Subchapter B. Administrative Policies 31 TAC sec.sec.292.11-292.13 The new sections are adopted under the Texas Water Code, sec.sec.5.103, 5.105, and 12.081, which provides the Texas Water Commission with the authority to adopt any rules necessary to carry out its powers and duties under the Texas Water Code and other laws of the State of Texas, to establish and approve all general policy of the commission, and to issue rules necessary to supervise districts and authorities. 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 September 30, 1992. TRD-9213323 Mary Ruth Holder Director, Legal Division Texas Water Commission Effective date: October 22, 1992 Proposal publication date: August 14, 1992 For further information, please call: (512) 463-8069 TITLE 34. PUBLIC FINANCE Part I. Comptroller of Public Accounts Chapter 3. Tax Administration Subchapter Q. Franchise Tax 34 TAC sec.3.413 The Comptroller of Public Accounts adopts the repeal of sec.3.413, concerning franchise tax reports and payments, without changes to the proposed text as published in the June 19, 1992, issue of the Texas Register (17 TexReg 4432). This section is being repealed in order that it can be adopted under the Texas Administrative Code, Title 34, Part I, Chapter 3, Subchapter V. The section will be replaced with a new 34 TAC sec.3.544, concerning Reports and Payments. No comments were received regarding adoption of the repeal. The repeal is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. 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 September 30, 1992. TRD-9213246 Martin E. Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: October 21, 1992 Proposal publication date: June 19, 1992 For further information, please call: (512) 463-4028 Subchapter V. Franchise Tax 34 TAC sec.3.544 The Comptroller of Public Accounts adopts new sec.3.544, concerning reports and payments, with changes to the proposed text as published in the May 26, 1992, issue of the Texas Register (17 TexReg 3824). This new section replaces 34 TAC sec.3.413, concerning the same subject matter, which is being repealed in order that it can be adopted under the Texas Administrative Code, Title 34, Part I, Chapter 3, Subchapter V. This new section contains information concerning franchise tax reports and payments and the calculation of both the taxable capital and earned surplus components of the tax. Paragraphs were added to clarify that a report must be filed, even if no tax is due, and to indicate that this new section applies to reports originally due on or after January 1, 1992. No comments were received regarding adoption of the new section. The new section is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. sec.3.544. Reports and Payments. (a) Reports and due dates. (1) Except as provided in subsection (f) of this section, each domestic and foreign corporation subject to the franchise tax levied by the Tax Code, sec.171.001, must file an initial franchise tax report, and thereafter an annual franchise tax report, and at the same time must pay the franchise tax and any applicable penalties and interest due by the corporation. It is the responsibility of a receiver to file franchise tax reports and pay the franchise tax of a corporation in receivership. A debtor in possession or the appointed trustee or receiver of a corporation in reorganization or arrangement proceedings under the Bankruptcy Act is responsible for filing franchise tax reports and paying the franchise tax prior to confirming and consummating the plan of reorganization or arrangement. (A) "Beginning date" means: (i) for a Texas corporation, the charter date; and (ii) for a foreign corporation, the earlier of: (I) the certificate of authority date; or (II) the date the corporation begins doing business in Texas. (B) Both the initial report and payment of the tax due, if any, are due no later than 89 days after the first anniversary date of the beginning date. The initial franchise tax report and payment are for the privilege periods beginning on the beginning date and ending on December 31 following the first anniversary of the beginning date. For example, if a Texas corporation is chartered on June 1, 1992, the payment due with the initial report will be for the privilege periods from June 1, 1992-December 31, 1993. In addition, when the first anniversary occurs during the period from October 4 through December 31, there must also be computed and paid with the initial report an additional year's tax for the privilege period beginning on January 1 following the first anniversary and ending on the following December 31. For example, if a Texas corporation is chartered on November 1992, the payment due with the initial report will be for the tax periods from November 1, 1992-December 31, 1994. The taxable capital component of the tax computed on the initial report is based on the financial condition as of the last accounting period ending date that is at least six months after the beginning date and at least 60 days before the original due date. If there is no such ending date, then the initial report is based on the financial condition on the last day of the calendar month nearest to the end of the corporation's first year of business. The earned surplus component of the tax computed on the initial report is based on the business done during the period beginning on the beginning date and ending on the last accounting period ending date for federal income tax purposes that is at least 60 days before the original due date of the initial report, or, if there is no such ending date, then ending on the day that is the last day of the calendar month nearest to the end of the corporation's first year of business. (C) The annual franchise tax report must be filed and the tax paid no later than May 15 of each year. The annual tax is paid for the privilege period of the calendar year in which the report is due. The taxable capital component of the tax computed on an annual report is based on the financial condition as of the last day of the last accounting period ending in the calendar year before the calendar year in which the tax is originally due. The earned surplus component of the tax computed on an annual report is based on the business done during the period beginning with the day after the last date upon which the earned surplus component was based on a previous report, and ending with its last accounting period ending date for federal income tax purposes ending in the calendar year before the calendar year in which the report is originally due. For the 1992 annual report, the earned surplus component is based on the business done during the period beginning with the day after the date upon which the previous report was based, and ending with its last accounting period ending date for federal income tax purposes ending in 1991. (D) See sec.3.565 of this title (relating to Survivors of Mergers) for special rules concerning corporations which are survivors of mergers. (E) See sec.3.545 of this title (relating to Extensions for Annual Reports) for extensions of time to file an annual report. (F) See sec.3.567 of this title (relating to Additional Tax on Earned Surplus) for information concerning the additional tax imposed by the Tax Code, sec.171.0011. (G) See sec.3.572 of this title (relating to 1992 Transition) for special rules concerning mergers, reorganizations, and transfers of assets occurring after August 13, 1991, and before January 1, 1992. (2) The postmark date (or meter-mark if there is no postmark) on the envelope in which the report or payment is received determines the date of filing. (3) An information report must be filed, even if no tax is due. A corporation must file an initial report as the information report for the privilege periods covered by an initial report. A corporation must file an annual report as an information report for a regular annual privilege period not covered by an initial report. (b) Penalty and interest. (1) The Tax Code, sec.171.362, imposes a 5.0% penalty on the amount of franchise tax due by a corporation which fails to report or pay the tax when due. If any part of the tax is not reported or paid within 30 days after the due date, an additional 5.0% penalty is imposed on the amount of tax unpaid. There is a minimum penalty of $1.00. Delinquent taxes accrue interest beginning 60 days after the due date. For example, if payment is made on the 61st day after the due date, one day's interest is due. Simple interest accrues at an annual rate of 6.0% through March 31, 1980; at an annual rate of 7.0% from April 1, 1980-December 31, 1981; and, beginning January 1, 1982, at 10% per annum, for taxes due before September 1, 1991. For taxes due on or after September 1, 1991, the yearly interest rate on all delinquent taxes is 12%, compounded monthly. (2) When a corporation is issued an audit assessment or other underpayment notice based on a deficiency, penalties under the Tax Code, sec.171.362, and interest are applied as of the date that the underpaid tax was originally due, including any extensions, not from the date of the deficiency determination or date the deficiency determination is final. (3) A deficiency determination is final 30 days after the date on which the service of the notice of the determination is completed. Service by mail is complete when the notice is deposited with the United States Postal Service. (A) The amount of a determination is due and payable 10 days after it becomes final. If the amount of the determination is not paid within 10 days after the day it became final, a penalty under the Tax Code, sec.111.0081, of 10% of the tax assessed will be added. For example, if a deficiency determination is made in the amount of $1,000 tax, $100 penalty and $15 interest (assume interest accrues $1.00 per day), then on the 41st day after the deficiency notice is served, $1,256 would be due (i.e., $1,000 tax, $100 initial penalty for not paying when originally due, $100 penalty for not paying deficiency determination within 10 days after it became final, and $56 interest). (B) A petition for redetermination must be filed within 30 days after the date on which the service of the notice of determination is completed, or the redetermination is barred. (C) A decision of the comptroller on a petition for redetermination becomes final 20 days after service on the petitioner of the notice of the decision. The amount of a determination is due and payable 20 days after a comptroller's decision is final. If the amount of the determination is not paid within 20 days after the day the decision becomes final, a penalty under sec.111.0081 of 10% of the tax assessed will be added. Using the previous example, on the 41st day after service of the comptroller's decision, $1,251 would be due (i.e., $1,000 tax, $100 initial penalty, $100 additional penalty and $51 interest). (4) A jeopardy determination is final 20 days after the date on which the service of the notice is completed unless a petition for redetermination is filed before the determination becomes final. Service by mail is complete when the notice is deposited with the United States Postal Service. The amount of the determination is due and payable immediately. If the amount determined is not paid within 20 days from the date of service, a penalty, under the Tax Code, sec.111.022, of 10% of the amount of tax and interest assessed will be added. (5) If the comptroller determines that a corporation exercised reasonable diligence to comply with the statutory filing or payment requirements, the comptroller may waive penalties or interest for the late filing of a report or for a late payment. The corporation requesting waiver must furnish a detailed description of the circumstances which caused the late filing or late payment and the diligence exercised by the corporation in attempting to comply with the statutory requirements. (c) Consolidated reporting. A consolidated or combined report, reflecting the financial data of a parent corporation and its subsidiaries or the financial data of other separate corporations as though they were a single economic entity, is not allowed. (d) Amended reports. A corporation may file an amended report for the purpose of correcting a mathematical or other error in a report or for the purpose of supporting a claim for refund. Applicable penalties and interest must be reported and paid on any additional amount of tax shown to be due on the amended report. In filing an amended report, the corporation must type or print on the report, immediately above the corporation name, the phrase "Amended Report." The report should be forwarded with a cover letter of explanation, with enclosures necessary to support the amendment. (e) Comptroller. During the course of an audit or other examination of a corporation's franchise tax account, the comptroller may examine financial statements, working papers, registers, memoranda, contracts, corporate minutes, and any other business papers used in connection with its accounting system. In connection with his examination, the comptroller may also examine any of the corporation's officers or employees under oath. (f) Jeopardy determination. If a jeopardy determination is issued to a corporation for an estimated tax liability on an annual reporting period, payment of the estimated liability, plus applicable penalty and interest, shall satisfy the reporting requirements set forth in the Tax Code, sec.171.202. (g) Rate. An annual tax rate of $6.70 per $1,000 of net taxable capital and an annual minimum tax of $150 applies to May 1, 1988-April 30, 1990, of any tax period. (h) Effective date. This section applies to reports originally due on or after January 1, 1992, unless otherwise specified. 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 September 30, 1992. TRD-9213245 Martin E. Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: October 21, 1992 Proposal publication date: May 26, 1992 For further information, please call: (512) 463-4028 Part X. Texas Public Finance Authority Chapter 223. Master Equipment Lease Purchase Program 34 TAC sec.sec.223.1, 223.3, 223.5, 223.7 The Texas Public Finance Authority adopts new sec.sec.223.1, 223.3, 223.5, and 223.7, concerning the master equipment lease purchase program, without changes to the proposed text as published in the June 23, 1992, issue of the Texas Register (17 TexReg 4513). The Texas Public Finance Authority is adopting these sections to set forth the perameters by which the Master Equipment Lease Purchase Program will operate. These sections define certain terms pertaining to the operation of the program, identifies the responsibilities of various parties in administering the program, and establishes basic procedures under which equipment users may participate in the program. No comments were received regarding adoption of the new sections. The new sections are adopted under Texas Civil Statutes, Article 601d, sec.9A, which provide the Texas Public Finance Authority with the authority to issue and sell obligations for a lease or other agreement concerning equipment and to promulgate rules for establishing the requirements for agencies wishing to use the 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 June 24, 1992. TRD-9213254 Glen Hartman Executive Director Texas Public Finance Authority Effective date: October 21, 1992 Proposal publication date: June 23, 1992 For further information, please call: (512) 463-5544 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part VI. Texas Department of Criminal Justice Chapter 165. State Aid Distribution and Monitoring Subchapter E. Performance Reward Program 37 TAC sec.sec.165.60-165.65, 165.68 The Texas Department of Criminal Justice adopts amendments sec.sec.165.60-165. 65 and sec.165.68, concerning the performance reward program. Section 165.62 is adopted with changes to the proposed text as published in the August 4, 1992, issue of the Texas Register (17 TexReg 5431). Sections 165.60, 165.61, 165.63, 165.64, 165.65, and 165.68 are adopted without changes and will not be republished. The purpose of the performance reward program is to provide a financial reward to those counties that divert offenders from incarceration in the Institutional Division of the Texas Department of Criminal Justice. These rules are promulgated to ensure the equitable distribution of funds in conformity with legislative intent. These rules govern the following aspects of the performance reward program data collection, applications for funding, computation of funding, and record keeping: sec.165.60-Performance Reward Program-General; sec.165. 61-Performance Ranking Process; sec.165.62-Formula for Computation of Performance Reward Rankings; sec.165.63-Data Collection; sec.165.64 -County Plan Submission Requirements; sec.165.65-Rules Governing Program Accountability and Audits; sec.165.68-Dispute Resolution Process. The revised funding formula will limit program participation to approximately one-half of the counties in Texas, assuming a minimum of 127 counties submit data. Bonus funding based on the number of individuals impacted by the diversionary measures will making bonus funding proportional to the impact of each county's diversions on the criminal justice system. The division received comments from five county officials concerning the proposed rules. Three of the five letters included suggestions as to needed clarifications of definitions on the proposed data gathering instruments. One commented that the revised computational formula will have a negative impact on small counties, but representatives of other small counties indicated that they did not take issue with the revised data collection forms and instructions. One county indicated that it would not compete in the program. Some of the officials who submitted written comments on the proposed rules were affiliated with more than one county. The counties represented by those submitting comments included Lampasas, Walker, Grimes, Madison, Jasper, Newton, Sabine, San Augustine, Culberson, Hudspeth, El Paso, and Harris. Lampasas County indicated an opposition to the philosophical basis for the program, while the other counties suggested needed clarifications in the definitions of data to be used for computing the awards formula. The comments concerning needed clarifications in definitions are being addressed by staff in the written explanations which will be sent out with the data collection instruments. The amendments are adopted under the Texas Code of Criminal Procedure, Article 41.13, sec.13, which provides the Texas Department of Criminal Justice with authority to develop and implement a performance rewards program. sec.165.62. Formula For Computation of Performance Reward Rankings and Distribution of Funds. It was the intent of the legislature in establishing the performance reward program to provide financial incentives to those counties which successfully divert offenders from confinement. In conformity with that intent, the board hereby adopts the following formula for computation of performance reward rankings and distribution of funds. (1) County rates for each factor are calculated based on data collected from each county of the state and from state data systems. For the personal bond utilization rate, the pretrial diversion rate, the deferred adjudication rate, the probation rate, the probation revocation rates, and the utilization rate of residential and non-residential diversion programs, separate rates and scores will be calculated for felons and misdemeanants. (2) For all factors except the probation revocation rates, the Institutional Division commitment rate, and the admissions per index crime rates, counties shall be ranked from 254 downward beginning with the county with the highest rate. If two or more counties have exactly the same rates for a given factor, the rank assigned to each of the counties shall equal the mean of the ranks that would have been assigned if the rates had not been equal. A county's rank on each rate shall be their score for that rate. Counties that do not supply the data needed to calculate a specific rate or the source of the information shall receive a score of zero for the rate. (3) For the probation revocation rates, the Institutional Division commitment rates, and the admissions per index crime rate, counties shall be ranked from 254 downward beginning with the county with the lowest rate. If two or more counties have exactly the same rates for a given factor, the rank assigned to each of the counties shall equal the mean of the ranks that would have been assigned if the rates had not been equal. A county's rank on each rate shall be their score for that rate. Counties that do not supply the data needed to calculate a specific rate or the source of the information shall receive a score of zero for the rate. (4) The scores for the technical and non-technical revocation rates shall be multiplied by 0.5 and summed to obtain a singe score for the misdemeanor and felony probation revocation rates. Scores for all felony and misdeameanor rates within a single factor shall be multiplied by 0.5 and summed to obtain a single score for each factor. (5) The scores for each factor are summed to obtain the total score for the county. (6) The 127 counties with the highest total scores are eligible for performance rewards funding. (7) The number of eligible counties is multiplied by $50,000 to obtain the amount of funds required to comply with the statutory $50,000 minimum per eligible county. This amount is subtracted from the total amount of annual funds for the program to obtain the remainder to be allocated based on performance (bonus funding). (8) Bonus funding shall be based on the county's proportion of the state total of eligible counties for each of the following variables: (A) total number of individuals released on personal bond; (B) total number of individuals placed on pretrial diversion; (C) total number of individuals placed on deferred adjudication probation; (D) total number of individuals receiving probated sentences; (E) total number of individuals placed in residential/non-residential diversions programs. (9) The county's proportion of the state total of the eligible counties shall be calculated for each variable in the following manner: (A) The county totals for each variable are summed across eligible counties to obtain a state total. (B) Each eligible county's total is divided by the statewide total to determine the county's proportion of the state total. (10) The county's proportions for each variable are averaged to determine the overall proportion for the county. (11) Each eligible county's overall proportion is multiplied by the total bonus funding amount to obtain the bonus funding for the county. (12) The minimum $50,000 plus the bonus funding equals the total performance rewards funding to the county. 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 October 2, 1992. TRD-9213385 Jackee Cox General Counsel Texas Department of Criminal Justice Effective date: January 1, 1993 Proposal publication date: August 4, 1992 For further information, please call: (512) 463-9988 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 52. Emergency Response Services Definitions The Texas Department of Human Services (DHS) adopts amendments to sec.sec.52.101, 52.201, 52.202, 52.401, 52.402, 52.501, 52.503, and 52.601, in its Emergency Response Services chapter. The amendments to sec.52.401 and sec.52. 501 are adopted with changes to the proposed text as published in the August 25, 1992, issue of the Texas Register (17 TexReg 5788). The amendments to sec. sec.52.101, 52.201, 52.202, 52.402, 52.503, and 52.601 are adopted without changes to the proposed text and will not be republished. The justification for the amendments is to implement provider enrollment, add state licensure requirements, and delete references to DHS-purchased equipment. The amendments will function by offering clients a choice of providers and assuring provider compliance with state licensure requirements. No comments were received regarding adoption of the amendments. DHS, however, has initiated a change to the text of sec.52.401 to correct an error. DHS has replaced the word "manual" with the word "chapter." Also, the amendment to sec.52.501 is adopted with a minor editorial correction. 40 TAC sec.52.101 The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs. 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 October 5, 1992. TRD-9213395 Nancy Murphy Agency Liaison, Policy and Document Support Texas Department of Human Services Effective date: November 15, 1992 Proposal publication date: August 25, 1992 For further information, please call: (512) 450-3765 Contracting for Emergency Response Services 40 TAC sec.52.201, sec.52.202 The amendments are adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs. 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 October 5, 1992. TRD-9213396 Nancy Murphy Agency Liaison, Policy and Document Support Texas Department of Human Services Effective date: November 15, 1992 Proposal publication date: August 25, 1992 For further information, please call: (512) 450-3765 Service Delivery Requirements 40 TAC sec.52.401, sec.52.402 The amendments are adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs. sec.52.401. Initiation of and Referral for Services. (a) The provider agency must begin services within 14 days from the date on the approval for Community Care for Aged and Disabled (CCAD) services-referral response form unless the referral is verbal. For verbal referrals, the provider agency must begin services on the date verbally negotiated with the caseworker. (b) If the client is not in the home during the first 14 days from the date on the approval for CCAD services-referral response form, the provider agency begins services as soon as possible after the client returns home. (c) If services do not begin on the date verbally negotiated, the coordinator telephones the caseworker on or before the day services were scheduled to begin and explains why services were not begun. (d) If the caseworker and the coordinator disagree about the appropriateness of a referral or about service delivery issues involving the client, supervisory staff of the two agencies resolve the differences. The CCAD program manager is responsible for resolving differences among caseworker and provider agency staff. If they disagree about the appropriateness of a referral, the coordinator may request that the caseworker approve a delay in beginning services. The request to delay service initiation is documented on the case information form. (e) The provider agency must secure two responders for each client on or before the date services begin, unless the provider agency is able to document that the client has no available responders and that only one resource is available that can respond to emergencies. (f) To initiate services, the provider agency must conduct a home visit. During the home visit, the installer: (1)-(4) (No change.) (g) The provider agency completes the client's card file after the home visit. The client's card file must include: (1)-(4) (No change.) (h) The provider agency must notify the caseworker of the status of all referrals within 21 days from the referral date. (i) The Texas Department of Human Services will encourage the client to choose the most economical alternative for service provision. (j) If a provider agency is delivering services according to the requirements in this chapter, a client may not change provider agencies within the first six months of authorization, unless the client and the provider agency mutually agree. 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 October 5, 1992. TRD-9213397 Nancy Murphy Agency Liaison, Policy and Document Support Texas Department of Human Services Effective date: November 15, 1992 Proposal publication date: August 25, 1992 For further information, please call: (512) 450-3765 Claims 40 TAC sec.52.501, sec.52.503 The amendments are adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs. sec.52.501. Billing and Claims Payment. (a)-(e) (No change.) (f) The Texas Department of Human Services (DHS) may negotiate a single unit rate that combines local and long distance service delivery. The single rate must not exceed the highest ceiling. The rate should be approximately proportional to the projected number of local and long distance clients. (g)-(i) (No change.) (j) DHS may withhold a provider agency's vendor payments for reasons including, but not limited to, the following: (1) (No change.) (2) failure to comply with rules in the provider manual; (3) failure to comply with licensure requirements; or (4) termination of the contract (voluntary or involuntary). (k) (No change.) (l) DHS renegotiates rates annually with existing provider agencies based on the unit rate ceilings in effect. 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 October 5, 1992. TRD-9213398 Nancy Murphy Agency Liaison, Policy and Document Support Texas Department of Human Services Effective date: November 15, 1992 Proposal publication date: August 25, 1992 For further information, please call: (512) 450-3765 Reviews and Audits of Provider Agency Records 40 TAC sec.52.601 The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs. 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 October 5, 1992. TRD-9213399 Nancy Murphy Agency Liaison, Policy and Document Support Texas Department of Human Services Effective date: November 15, 1992 Proposal publication date: August 25, 1992 For further information, please call: (512) 450-3765 TITLE 43. TRANSPORTATION Part I. Texas Department of Transportation Chapter 25. Maintenance and Operations Division Specific Information Logo Sign Program 43 TAC sec.sec.25.400-25.408 The Texas Department of Transportation (TxDOT) adopts new sec.sec.25.400- 25.408. Section 25.402 and sec.sec.25.405-25.407 are adopted with changes to the proposed text as published in the June 9, 1992, issue of the Texas Register (17 TexReg 4160). Sections 25.400, 25.401, 25.403, 25.404, and 25.408 are adopted without changes and will not be republished. Senate Bill 518, 72nd Legislature, 1991, amended Texas Civil Statutes, Article 4477-9a, by requiring the Texas Transportation Commission to contract with a person, firm, group, or association in the State of Texas to erect and maintain signs that give specific information of interest to the traveling public including specific brand names at appropriate locations along interstate highways in each county with a population of less than 20,000. Article 4477-9a further requires the commission to adopt rules necessary to administer and enforce this signing program, and to regulate the content, composition, placement, erection, and maintenance of specific information logo signs and supports within interstate highway right-of-way. In order to comply with the legislative intent these new sections are adopted on a permanent basis. Section 25.400 outlines the purpose of the sign program. Section 25.401 prescribes the definitions used in this new undesignated head. Section 25.402 authorizes the department to award a contract to develop, operate, and maintain specific information logo signs and prescribes certain terms and conditions of the contract relating to marketing, a market study and construction plans, as- built plans, sign erection in the first year, annual reports, installation, department review, additional signing and sign maintenance, fees, bonding, permits, licenses and taxes, records, termination, and the sale, transfer, and assignment of the contract. Section 25.403 describes the procedures by which a contractor who desires to bid on a contract may become prequalified, including the submission of a statement of interest containing information relating to staffing, capability, project understanding and approach, scheduling, and financial condition. Section 25. 404 provides that the commission will award a contract to the lowest bidder and describes the procedure for awarding the contract. Section 25.405 describes the specifications for specific information logo signs, business logos and ramp logos relating to design, placement, and content. Section 25. 406 provides that in order to participate in the program a commercial establishment must meet specified eligibility requirements relating to motorist services, establishment location, compliance with existing law, and posting of hours of operation, requires a commercial establishment to provide minimal services and facilities to the public to be eligible to have a business logo for a specific service, and provides conditions under which a commercial establishment may display more than one primary motorist service on a sign. Section 25.407 describes how a commercial establishment applies for participation in the program, provides that establishments will be selected to participate through a random drawing, describes certain rights and responsibilities of a commercial establishment, and describes how a logo may be covered or removed. Section 25.408 describes how a contractor may appeal an adverse decision by the department, and how a commercial establishment may appeal an adverse decision by the contractor through the department's administrative hearing process under 43 TAC sec.sec.1.21-1.63. Pursuant to the Administrative Procedure and Texas Register Act, Texas Civil Statutes, Article 6252-13a, sec.5, the department conducted a public hearing on July 1, 1992, to seek comments concerning the proposed specific information logo sign program for Texas interstate highways within those counties with a population of less than 20,000. Representatives of Logo Signs of America, Norwood Outdoor, Inc., Suburban Advertising Company, Reynolds Outdoor, and Interstate Logos were in attendance and indicated they were in favor of the new rules. No comments were received against the rules. Three commenters gave oral testimony at this hearing. The department also received seven written responses by mail. The following addresses the comments received and the department's responses. In sec.25.401 and sec.25.405(a)(2)(A), one commenter suggested that the definition of primary service be revised to include the words "alternative fuels," and the definition of a specific information logo sign be revised to include the words "ALTERNATIVE FUELS." The department cannot concur with the suggestions. The enabling legislation does not authorize the Texas Transportation Commission to add another primary motorist service or to erect additional signs for "alternative fuels" in the logo sign program. In sec.25.402(a), three commenters suggested that the initial contract be greater than the stated five year term. The department does not concur with the suggestion. The initial contract will be for five years; however, the wording of sec.25.402 does not restrict the department from renewing this contract for additional periods as it deems necessary. The contract documents will contain wording that requires the initial contract to be five years with the option of extending the contract for a period of an additional five years. In sec.25.402(a), two commenters suggested the Texas Transportation Commission expand the logo sign program to counties with populations greater than 20,000. The enabling legislation limits the Transportation Commission's authority to erect and maintain logo signs to those counties with populations of less than 20,000. In sec.25.402(a), one commenter asked how the department would handle a situation where an eligible county's population increased enough to exceed 20, 000 during the term of the contract. Would the contractor be required to remove existing logo signs? Conversely, if an ineligible county's population decreased to less than the 20,000 during the term of the contract, could logo signs be erected in these counties? The department uses the latest official federal census (1990) as the basis for determining county eligibility. Since the next federal census will be in the year 2000, only those counties with less than a population of 20,000 as recorded in the latest federal census are and will remain eligible until the next census. To clarify the matter, sec.25. 402(a) is revised to read, "The department may award a contract to a person, firm, group, or association in the State of Texas, for an initial period not to exceed five years, to develop, operate, and maintain specific information logo signs at appropriate locations along interstate highway in each county with a population of less than 20,000 according to the latest federal census, subject to the following terms and conditions." Section 25.402(c), as proposed and published contains language that is unclear and is inconsistent with terminology used in existing department standard specifications. In order to more clearly state what was intended while using language that is consistent with department terminology, sec.25. 402(c) is revised to read, "Market study and site plans. Prior to construction of a specific information logo sign at an approved location, the contractor must submit to the department a market study and site plan. Upon written approval of the site plan, the contractor may begin work at the location described." In sec.25.402(d), one commenter suggested that the as-built plans be provided to the department within 90 days upon completion of the installation of specific information business logo signs. It was not the intent of the wording to require the contractor to provide as-built plans immediately after the installation of the specific information business logo signs. The department believes that 45 days is a reasonable amount of time for the contractor to provide the as-built plans. Ninety days would not provide the department with current information for these sign locations. The department partially concurs with this request. Section 25.402(d) is revised to read, "The contractor shall submit as-built plans to the department within 45 calendar days upon completion of the installation of specific information business logo signs." In sec.25.402(e), one commenter suggested that the department require the contractor to erect specific information logo signs along the interstate highways, or portions of such interstate highways, in a particular order or schedule. The department does not concur with the suggestion. Since the contractor cannot receive payment from a commercial establishment until the business logo is erected, it is to the contractor's benefit to erect the logo signs as soon as possible. The department does not believe this suggested requirement would benefit the operation of the contractor or the commercial establishments. This suggestion would cause the contractor undue hardship and additional expense, and this additional expense would subsequently be charged to the commercial establishments. In sec.25.402(k)(1), several commenters suggested that the 5.0% remittance to the department be paid monthly or quarterly, rather than weekly on the first Monday following receipt by the contractor. Monthly payments to the department reflect the commercial establishment's option of a monthly payment schedule for the annual rental fees. Quarterly payments would not be considered a prompt payment to the department. The department partially concurs with the request. Section 25.402(k)(1) is revised to read, "The contractor shall assess the following non-refundable fees and shall remit to the department an amount equal to 5.0% of all such fees no later than the seventh business day following the last day of the month such fees are received by the contractor." In sec.25.402(k)(1), one commenter suggested an additional fee for permanent removal of the commercial establishment's business logo. The department does not concur with the suggestion. If a business logo is removed due to lack of payment of the annual rental fee by the commercial establishment, then it is reasonable to assume the commercial establishment has no intent of paying any additional fees. The department believes this fee would be difficult, if not impossible, to collect and should not be considered as an expected source of income to the contractor. In sec.25.402(k)(1)(C), one commenter suggested that a clarification be made as to the covering fee. The commenter expressed concern that the present wording could imply the $100 fee is the total contractor fee for both the covering and uncovering operations. The department concurs with the suggestion. A clarification will be made to explain the department's intent, that a $100 fee is assessed for the covering of the business logo and an additional $100 fee is assessed for the uncovering of the business logo. Section 25.402(k) (1)(C) is revised to read, "A fee of $100 for covering a business logo and the ramp business logo and a fee of $100 for uncovering a business logo and the ramp business logo pursuant to sec.25.407 of this title (relating to Program Operation)." In sec.25.402(k)(1)(D), one commenter suggested that a clarification be made as to the replacement fee. The commenter said that a commercial establishment may misunderstand this fee, thinking that the contractor will provide the replacement business logo and the labor for the replacement fee. The department does not concur with the suggestion. Section 25.407(c)(1) requires the commercial establishment to provide a business logo to the contractor; therefore, the business logo is the responsibility of the commercial establishment. In sec.25.402(k)(2)(B), one commenter suggested that the word "consecutive" be added to the text to clarify the conditions under which the contractor shall reduce the annual rental fee by a prorated amount for each calendar day. The department concurs with the suggestion. Section 25.402(k)(2)(B) is revised to read, "a previously erected business or ramp business logo is obscured from view of the motorists for a period of time exceeding 10 consecutive calendar days." In sec.25.402(1), one commenter suggested that the amount of the required bonds be specified. The department does not concur with the suggestion. The department will specify the bonding requirements in the proposal and contract documents. In sec.25.402(o), one commenter suggested that the reasons for a cortractor's default be specified. The department does not concur with the suggestion. The department will specify reasons for default of the contractor and notification in the proposal and contract documents. In sec.25.402(o)(2), several commenters suggested that the percentages and reimbursement of "fair market value" be further clarified. Several commenters also suggested that the percentages be increased to coincide with the logo sign program contracts of other states. The department concurs with the suggestion. Section 25.402(o)(2) is revised to read, "If the department terminates the contract for reasons other than default of the contractor, the contractor will be paid a percentage of the fair market value, as established by the department, for each of the specific information logo signs erected. The percentages are as follows: elapsed time since sign installation: 0-one year-90%; one-two years- 75%; two-three years-50%; three-four years-25%; four years or greater-0%." In sec.25.404(b)(2), one commenter suggested that the award of the contract be based on a combination of the lowest bid submitted and other factors including experience of the contractor and financial ability. The department does not concur with the suggestion. The department believes the prequalification process as stated in sec.25.403 will better protect the public interest and will ensure that only those contractors capable of operating the logo program will be eligible to participate. In sec.25.404(b)(2), one commenter suggested that the contractor bid formula be revised to reflect a "discount" or "reduced annual rental fee" provided by the contractor to the commercial establishment as an incentive for pre-payment of a multi-year contract. The commenter also suggested the contractor bid formula be revised to include a higher annual rental fee if the commercial establishment chooses to remit payment to the contractor on a monthly basis. The department does not concur with the suggestion. The department feels that the incorporation of such "discounts," "reduced annual rental fees," or different annual rental fees based on method of periodic payment by the commercial establishment would not be fair and equitable to all participants. In sec.25.404(b)(3), one commenter suggested that parameters of the contractor's annual rental rates for ramp business logos are too low, that the construction cost of a ramp business logo sign is approximately 50 to 60% of the cost of the main-lane logo sign. The department established these parameters after reviewing the annual rental fees collected in other states for ramp business logo signs. The parameters were created to ensure equitable annual rental fees for ramp business logos. Note that sec.25.05(c)(2) allows a ramp business logo only if the commercial establishment's building or on-premise signing is not visible from the ramp, the access road, or the intersection of the crossroad with the ramp or access road. It is reasonable to assume that the majority of participating commercial establishments will not have ramp business logos. Ramp signs will be independently mounted with only one ramp business logo per sign, not a large background sign with multiple ramp business logo attached. The department does not concur with the suggestion. Section 25.405(a)(1)(F), as proposed and published, contained an obvious typographical error. We will clarify the section in order to state what was intended. Section 25.405(a)(1)(F) is revised to read, "provide not more than eight inches vertical spacing and not more than 12 inches horizontal spacing between business logos." In sec.25.405(a)(2)(D), one commenter suggested that the text be modified to clarify the meaning of "qualified" businesses. The department does not concur with the suggestion. The proposed rules reflect the qualifications of the commercial establishments as prescribed by the statute and provides a selection process. We believe that the word "qualified" as used in this section clearly refers to commercial establishments that meet the minimum requirements for the primary service and have been chosen through the election process. In sec.25.405(a)(3)(H), two commenters suggested that the requirement that logo signs be placed only in areas where a 30-foot offset from the edge of the pavement be modified so that logo signs may be placed in areas where special conditions exist, such as restricted right-of-way. The 30-foot offset is the current American Association of State Highway and Transportation Officials guideline for clear zones on freeway facilities. These guidelines may be subject to change in the future; therefore, the department concurs with the suggestion. Since the department is responsible for approving all logo sign locations, the wording of sec.25.405(a)(3)(H) is unnecessary and will be deleted. In sec.25.405(a)(4), one commenter suggested that existing signs could be relocated to accommodate logo signs, if the experse for the relocation is the responsibility of the contractor. The department concurs with the suggestion. Section 25.404(a)(4) will read, "Existing regulatory, warning, destination, guide, recreation, and cultural interest signs will not be removed; provided, however, that subject to the written approval of the department, such existing signs may be relocated by special permission of the department at the sole expense and responsibility of the contractor and only to the extent necessary to accommodate logo signs." In sec.25.405(b)(2)(B), one commenter suggested that the words "ALTERNATIVE FUELS" be allowed as supplemental information on a gas business logo. The department does not concur with the suggestion. Since an alternative fuel may be one of nine possible types of fuel, it would be difficult for the motorists to determine if the particular fuel needed would be available at the commercial establishment. In sec.25.406(a)(2), one commenter suggested that the definition of "directly adjacent to the interstate" be clarified. The department concurs with the suggestion. Section 25.406(a)(2) is revised to read, "be located with driveway access to the intestate access road (frontage road), ramp, or intersecting crossroad." In sec.25.406(a)(4), one commenter suggested the American Disabilities Act (ADA) be added as a provision of public accommodation. The department does not concur with the suggestion. Any application of ADA is by force of federal law. It is not necessary for the department to include ADA in its regulations. In sec.25.406, two commenters suggested the requirement for gas, food, and lodging businesses be changed so as not to require the commercial establishment to provide a telephone accessible to the public 24 hours a day. The department concurs with the suggestion. The department believes that the public access to a telephone is a valuable and necessary service; however, access for 24 hours a day may cause an inequitable additional expense to smaller participating commercial establishments. Therefore, sec.25.406(b)(1)(E), (2)(E), and (3)(C) are revised to read, "a telephone accessible to the public." In sec.25.406(b)(3), one commenter suggested development of "standards established by the department with respect to the facilities which generally can qualify under your rules but which may be an embarrassment for people traveling through Texas." The commenter also suggested the additional requirement of a 24 hour front desk and that "Bed and Breakfast," or other type lodging facilities with less than 10 rooms be allowed to qualify for logo signing. The department does not concur with the suggestions. The statute prescribes the minimum requirements for the commercial establishments. It is neither the function nor within the ability of the department to rate the quality of establishments or to add to the legislature's minimal requirements. In sec.25.407(b)(1), one commenter suggested that the order of relative placement of the business logos be listed. The department concurs with the suggestion. Therefore, the following sentence is added to sec.25.407(b)(1): "The relative placement of business logos in available space(s), in order of selection, is upper left, upper right, lower left, and lower right." In sec.25.407(c)(2), one commenter suggests a clarification of the terms "agreement," "contract," and "participation agreement." The department concurs with the suggestion and all corresponding sections mentioning the participation agreement between the commercial establishment and the contractor will be revised. Section 25.407(b)(5) is revised to read, "The contractor shall notify the commercial establishment by certified mail of the award of specific information business logo sign space within 10 calendar days of the date of award. To accept the award, the commercial establishment must execute a written participation agreement with the contractor within 30 calendar days of the date of the award. The participation agreement shall be in a form as prescribed by the department and shall, at a minimum, contain all applicable provisions prescribed by this undesignated head." Section 25.402(e) is revised to read, "Sign erection in first year. In the first year of the contract between the department and contractor, the contractor shall erect specific information logo signs and business logos at a minimum of 40% of the interchanges where participation agreements have been completed between the commercial establishments...." Section 25.402(f) is revised to read, "Annual report. The contractor shall furnish an annual report to the department. The annual report will include the contractor's financial statement as provided in Section 25.402 of this title (relating to Prequalification), summary of eligible interchanges, business logos erected, and number of participation agreements competed. Other reports may also be required throughout the year as determined by the department." Section 25.407(c)(2) is revised to road, "A commercial establishment may renew its participation agreement with the contractor on an annual basis no later than July 31 of the last year of the agreement. If the commercial establishment does not renew the agreement with the contractor, the contractor will remove the business logo at the end of the agreement, and will make the vacated space available to other commercial establishments pursuant to subsection (b) of this section." In sec.25.407, one commenter suggested a clarification for rights of a participating commercial establishment with respect to the business logo space if the commercial establishment is sold to a new owner. A question was presented: Is the commercial establishment's business logo allowed to remain on the logo sign or should it be removed? The department has determined that a clarification is unnecessary and does not concur with the suggestion. When the commercial establishment's new owner assumes the assets and debts of the previous owner, the department believes it is the prerogative of the new owner to decide if continued participation in the logo sign program is warranted. Rights of contracting parties are governed by applicable law. Section 25. 407(e)(1)(E) allows the contractor to remove the business logo if the commercial establishment is sold, and the new commercial establishment does not continue the original primary motorist service or does not meet the minimum requirements for the primary motorist service. In sec.25.407(b)(5), one commenter suggested additional wording to allow multi- year participation agreements between the contractor and the commercial establishments. The department believes additional wording is unnecessary and does not concur with the suggestion. This section does not, nor do other sections, prohibit multi-year participation agreements; however, sec.25.407(c) (2) requires that a renewal of a participation agreement be on an annual basis. To further clarify the matter the word "annual" is deleted from sec.25.407(e) (3) and is revised to read "When the business logo is removed, the participation agreement is terminated between the commercial establishment and the contractor." The new sections are adopted under Texas Civil Statutes, Article 6666 and Article 4477-9a, which provide the Texas Transportation Commission with the authority to promulgate rules and regulations for the conduct of the work of the Texas Department of Transportation, and specifically for the adoption of rules necessary to administer and enforce the specific information logo sign program. sec.25.402. Specific Information Logo Sign Program. (a) Program. The department may award a contract to a person, firm, group, or association in the State of Texas, for an initial period not to exceed five years, to develop, operate, and maintain specific information logo signs at appropriate locations along interstate highways in each county with a population of less than 20,000 according to the latest federal census, subject to the following terms and conditions. (b) Marketing. In marketing the specific information logo sign program, the contractor shall: (1) develop an inventory of potential eligible commercial establishments; (2) send letters explaining the program to potential eligible commercial establishments; and (3) advertise the program in local papers and post notices at appropriate locations at the county seats. (c) Market study and site plans. Prior to construction of a specific information logo sign at an approved location, the contractor must submit to the department a market study and site plan. Upon approval of the site plan, the contractor may begin work at the location described. (d) As-built plans. The contractor shall submit as-built plans to the department within 45 calendar days upon completion of the installation of specific information business logo signs. (e) Sign erection in first year. In the first year of the contract between the department and contractor, the contractor shall erect specific information logo signs and business logos at a minimum of 40 of the interchanges where participation agreements have been completed between the commercial establishments and the contractor. Specific information logo signs and business logos shall be erected within two years of the execution date of an agreement between the commercial establishments and the contractor pursuant to sec.25.407 of this title (relating to Program Operation). (f) Annual report. The contractor shall furnish an annual report to the department. The annual report will include the contractor's financial statement as provided in sec.25.403 of this title (relating to Prequalification) , summary of eligible interchanges, business logos erected, and number of participation agreements completed. Other reports may also be required throughout the year as determined by the department. (g) Installation by contractor. Installation of specific information and business logo signs may only be performed by the contractor, a subcontractor approved by the department, or, in emergency situations, by the department. In the event that the department undertakes installation or other duties of the contractor, the contractor shall immediately remit to the department the specified fee or cost of such work. (h) Department review. Prior to installation, the design and location of business logo signs must be submitted to the department for review. The department shall inspect installation and monitor maintenance. (i) Additional signing. If the department determines that additional regulatory, warning, or guide signing is needed at an interchange, existing or planned specific information logo signs shall be removed or relocated by the contractor as directed by the department and at the sole expense of the contractor. (j) Sign maintenance. The specific information logo signs shall be maintained by the contractor in a manner and condition that is a distinct benefit to the safety of the public, benefit to the commercial establishments, and to the satisfaction of the department. (k) Fees. (1) The contractor shall assess the following non-refundable fees and shall remit to the department an amount equal to 5.0% of all such fees no later than the seventh business day following the last day of the month such fees are received by the contractor. (A) Installation fee. A one-time fee in the amount specified in the contractor's bid proposal under sec.25.404 of this title (relating to Contract Award Procedures) for the installation of the commercial establishment's business logo and, if necessary, ramp business logo. (B) Annual rental fee. An annual fee for each business logo and for each ramp business logo (for ramp signs) in the respective amounts specified in the contractor's bid proposal under sec.25.404 of this title (relating to Contract Award Procedures). (C) Covering fee. A fee of $100 for covering a business logo and the ramp business logo and a fee of $100 for uncovering a business logo and the ramp business logo pursuant to sec.25. 407 of this title (relating to Program Operation). (D) Replacement fee. A $100 fee for each business logo and ramp business logo replaced at the request of the commercial establishment. (2) The contractor shall reduce the annual rental fee a prorated amount for each calendar day when: (A) the business or ramp business logo(s) has not been erected; or (B) a previously erected business or ramp business logo is obscured from view of the motorists for a period of time exceeding 10 consecutive calendar days. (3) A contractor may not reduce the annual fee for the period a business logo or ramp business logo is covered at the request of the commercial establishment. (l) Bonding. The contractor shall satisfy all requirements of Texas Civil Statutes, Article 5160, relating to bonds. (m) Permits, licenses, and taxes. The contractor shall procure all permits and licenses; pay all charges, fees, and taxes; and give all notices necessary and incidental to the due and lawful prosecution of the work. When requested, the contractor shall furnish the department with evidence of compliance with the permit, license, and tax requirements. (n) Records. The contractor shall, consistent with generally accepted accounting principles, maintain all books, documents, paper, advertising contracts, accounting records, and other evidence pertaining to the contract with the department and shall, upon request of the department, make available such documents, records, and information for examination by the department, its designee, or the State Auditor. (o) Termination. The department or the contractor may terminate the contract upon default of the other party. (1) If the contractor terminates the contract or defaults prior to the conclusion date of any five-year term, ownership of the contract rights and any rights in the business logo signs constructed at the various interchanges and intersections shall immediately pass to and vest in the department on the effective date of termination, and the contractor shall not be entitled to any compensation. (2) If the department terminates the contract for reasons other than default of the contractor, the contractor will be paid for a percentage of the fair market value, as established by the department, for each of the specific information logo signs erected. The percentages are as follows: elapsed time since sign installation: zero-one year-90%; one-two years-75%; two-three years- 50%; three-four years-25%; four years or greater-0% (p) Sale, transfer, and assignment of contract. The contractor shall not sell, transfer, assign, or otherwise dispose of the contract or any portion thereof, or of its right, title, or interest therein, without the prior written consent of the department. sec.25.405. Specifications. (a) Specific information logo signs. (1) Design. A specific information logo sign shall: (A) have a blue background with a white reflective border; (B) contain a principal legend equal in height to the directional legend; (C) meet the applicable provisions of the Texas MUTCD; (D) have background material which conforms with department specifications for reflective sheeting; (E) be fabricated, erected, and maintained in conformance with department specifications and fabrication details; (F) provide not more than eight inches vertical spacing and not more than 12 inches horizontal spacing between business logos. (2) Content. A specific information logo sign shall contain: (A) word legends for the following services, GAS, FOOD, LODGING, or CAMPING; (B) the exit number; (C) no more than four business logos on one sign panel; and (D) no more than one type of service on a sign panel, or, in an area having fewer than three qualified commercial establishments available for that service, no more than two types of services on that sign panel. (3) Placement. Subject to approval of the department, a specific information logo sign shall be installed or placed: (A) to conform to the following order of placement along the direction of travel: CAMPING, LODGING, FOOD, GAS; (B) according to the following priorities where available space is limited: GAS, FOOD, LODGING, and CAMPING; (C) to take advantage of natural terrain; (D) to have the least impact on the scenic environment; (E) to avoid visual conflict with other signs within the highway right-of-way; (F) with a lateral offset equal to or greater than existing guide signs; (G) at least 800 feet from the previous interchange and at least 800 feet from the exit direction sign at the interchange from which the services are available; (H) without blocking motorists' visibility of existing traffic control and guide signs; (I) in locations that are not overhead; (J) where a motorist, after following the sign(s), can conveniently re-enter the highway and continue in the original direction of travel; and (K) at least 800 feet, but not excessively spaced, from another sign having the same legend. (4) Existing regulatory, warning, destination, guide, recreation, and cultural interest signs will not be removed; provided, however, that subject to the written approval of the department, such existing signs may be relocated by special permission of the department at the sole expense and responsibility of the contractor and only to the extent necessary to accommodate logo signs. (b) Business logos. (1) Design. A business logo: (A) may not exceed 48 inches in width or 36 inches in height; (B) may be any color or combination of colors; and (C) may only be fabricated, erected, and maintained in conformance with current department specifications for aluminum signs and reflective sheeting. (2) Content. A business logo may: (A) consist of a registered trademark or a legend message identifying the name or abbreviation of the commercial establishment; (B) contain supplemental information, limited to the word "DIESEL" on a gas logo or the words "24 HOURS" on a gas or a food logo, the words "DIESEL" and "24 HOURS" not to exceed 6 inches in height; (C) contain a message, symbol, or trademark only if the message, symbol, or trademark does not resemble an official traffic control device; and (D) contain text, symbols, or advertising only if the text, symbols, or advertising are related to the primary service of the specific information logo sign. (c) Ramp signs. (1) Design. A ramp sign shall: (A) meet the applicable provisions of the Texas MUTCD; (B) have a blue background with a white reflective border; (C) conform with the latest department specifications for reflective sheeting for the background material of the sign; and (D) be fabricated, erected, and maintained in conformance with the current department specifications for aluminum signs and roadside signs. (2) Placement. Subject to approval of the department, a ramp sign may be placed along an exit ramp or access road, or at an intersection of an access road and crossroad when a commercial establishment's building or on-premise signing is not visible from that exit ramp, access road, or intersection. (3) Content. A ramp business logo shall: (A) be no larger than 24 inches in width and 18 inches in height; (B) contain directional arrows and distances; and (C) be a duplicate of the business logo erected on a specific information logo sign. sec.25.406. Commercial Establishment Eligibility. (a) General requirements for eligibility. To be eligible to have a business logo placed on a specific information logo sign, a commercial establishment must: (1) offer at least one primary motorist service; (2) be located with driveway access to the interstate access road (frontage road), ramp, or intersecting crossroad; (3) be located within three miles from an interchange on an interstate highway, or, if no other eligible service of the same kind is located within that distance, be located within 15 miles of the interchange and be issued a permit by the department; (4) comply with all applicable laws concerning the provisions of public accommodations without regard to race, religion, color, sex, or national origin; and (5) post its hours of operation on or near the main entrance so that they are visible to the public during open and closed hours. (b) Specific services eligibility. In addition to the general requirements for eligibility to have a business logo placed on a specific information logo sign, a commercial establishment must meet the requirements for at least one of the following primary motorist services. (1) Gas. To be eligible to have a business logo placed on a specific information logo sign carrying the legend "GAS," a commercial establishment must provide: (A) vehicle services, including fuel, oil, and water; (B) tire repair, if the establishment is not a self-service station; (C) restroom facilities and drinking water; (D) continuous operation for at least 12 hours per day, seven days a week; and (E) a telephone accessible to the public. (2) Food. To be eligible to have a business logo placed on a specific information logo sign carrying the legend "FOOD," a commercial establishment must provide: (A) a license or other evidence of compliance with public health or sanitation laws, if required by applicable other law; (B) continuous operation at least 12 hours a day to serve three meals a day; (C) seating capacity for at least 16 people; (D) public restrooms; and (E) a telephone accessible to the public. (3) Lodging. To be eligible to have a business logo placed on a specific information logo sign carrying the legend "LODGING," a commercial establishment must provide: (A) a license or other evidence of compliance with laws regulating facilities providing lodging, if required by applicable other law; (B) at least 10 rooms; and (C) a telephone accessible to the public. (4) Camping. To be eligible to have a business logo placed on a specific information logo sign carrying the legend "CAMPING," a commercial establishment must provide: (A) a license or other evidence of compliance with laws regulating camping facilities, if required by applicable other law; (B) adequate parking accommodations; and (C) modern sanitary facilities and drinking water. (c) Multiple services eligibility. If a commercial establishment offers more than one primary motorist service, it will be eligible to display a business logo for each of those services on the appropriate specific information logo sign, provided that: (1) minimum criteria for the service as described in sec.25.405 of this title (relating to Specifications) are met; (2) the additional business logo(s) would not prevent participation by another eligible commercial establishment whose sole service would be displaced; and (3) a business logo space is available. sec.25.407. Program Operation. (a) Commercial establishment application. (1) Applications for commercial establishments desiring to participate in the specific information logo sign program are available upon request from the Texas Department of Transportation, Division of Maintenance and Operations, 125 East 11th Street, Austin, Texas 78701-2483. (2) A commercial establishment desiring to participate in the specific information logo sign program must submit an application to the contractor and verify that all requirements are met. Applications must be submitted to the location as stated on the application form. The contractor will verify the eligibility of each applicant. (3) A separate application is required for each primary motorist service per interchange per direction of travel. Only one application per commercial establishment per primary motorist service per direction of travel per interchange will be accepted. (4) Applications will be reviewed by the contractor and applicants notified in writing of being qualified or rejected. Rejected applications will be returned and deficiencies noted. (5) Rejected applicants may resubmit their application when the noted deficiencies have been corrected. (6) To be eligible for the selection process for the available business logo space(s), available first alternate position, or available second alternate position, a commercial establishment must have submitted a qualified application before the commercial establishment application deadline. (7) The commercial establishment application deadline for the annual random drawing in the following calendar year is 5 p.m. of the second Tuesday in August, received at the location as stated on the application. The commercial establishment application deadline for an emergency random drawing is 14 calendar days after the business logo space(s), the first alternate position, or the second alternate position becomes available. If no qualified applications are on file or received, the contractor may postpone the commercial establishment application deadline until 14 calendar days after a qualified application is received. (8) Qualified applications received after the commercial establishment application deadline will be placed on file and considered eligible for future annual and emergency random drawings. (b) Commercial establishment selection. (1) Available business logo space(s) and relative placement of business logos on the specific information logo sign, available first alternate position, and available second alternate position for each primary motorist service for each direction of travel at an interchange will be awarded by the annual or emergency random drawing of the qualified applications received before the commercial establishment application deadline. The relative placement of business logos in available space(s), in order of selection, is upper left, upper right, lower left, and lower right. (2) The annual random drawing will be held publicly by the contractor on the second Tuesday of September in the presence of two or more department employees. Emergency random drawings will be held publicly as needed in the presence of two or more department employees. Emergency random drawings of qualified applicants will be held no earlier than 20 days nor later than 45 days after the commercial establishment application deadline. Emergency random drawings will not be held within 45 days prior to the annual random drawings. (3) When a business logo space(s) becomes available, the first and second alternates have first right of refusal, respectively, for the available business logo space. If the first alternate accepts an available business logo space, the second alternate then becomes the first alternate with first right of refusal for any existing or future available business logo space. Any remaining available business logo space(s), available first alternate position, or available second alternate position are awarded by the annual or emergency random drawings. (4) If the number of qualified applicants is less than or equal to the number of available business logo space(s) at the time of the commercial application deadline, the available space(s) will be awarded to the qualified applicants. The random drawing will determine only the relative placement of the business logo signs in the available space(s). (5) The contractor shall notify the commercial establishment by certified mail of the award of specific information business logo sign space within 10 calendar days of the date of the award. To accept the award, the commercial establishment must execute a written participation agreement with the contractor within 30 calendar days of the date of the award. The participation agreement shall be in a form as prescribed by the department and shall, at a minimum, contain all applicable provisions prescribed by this undesignated head. (c) Responsibilities and rights of commercial establishment. (1) The commercial establishment must provide a business logo and, if necessary, ramp business logo(s) within 60 days of notification by the contractor of the contractor's intent to erect the specific information logo signs or ramp signs. (2) A commercial establishment may renew its participation agreement with the contractor on an annual basis no later than July 31 of the last year of the contract. If the commercial establishment does not renew the agreement with the contractor, the contractor will remove the business logo at the end of the participation agreement, and will make the vacated space(s) available to other commercial establishments pursuant to subsection (b) of this section. (d) Covering of business logo. A business logo and the ramp business logo(s) of a commercial establishment may be covered by the contractor if the commercial establishment is temporarily closed for a period not exceeding 30 calendar days. Unless removed pursuant to subsection (e) of this section, the business logo and ramp business logo(s) will remain covered until the commercial establishment reopens. (e) Removal of business logo. (1) A business logo of a participating commercial establishment shall be removed by the contractor if the commercial establishment: (A) ceases to exist; (B) fails to pay the annual rental fee or other fees within 30 calendar days of the due date as specified on the agreement; (C) is temporarily closed for more than 30 calendar days; (D) does not meet the minimum requirements as stated herein, and all corrections are not made within 30 calendar days of written notification; (E) is sold, and the new commercial establishment does not continue the original primary motorist service or does not meet the minimum requirements for the primary motorist service; or (F) has not provided a replacement business logo sign within 60 calendar days of written notification that the business logo is missing, damaged, broken, or faded. (2) Removal of a business logo by the contractor will include the removal of the commercial establishment's ramp business logo sign(s). (3) When the business logo is removed, the participation agreement is terminated between the commercial establishment and the contractor. All funds paid to the contractor by the commercial establishment are forfeited. Upon removal of a business logo, the vacated space becomes available pursuant to subsection (b) of this section. A replacement commercial business is selected, as stated in the commercial establishment selection process. 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 September 30, 1992. TRD-9213253 Robert E. Shaddock General Counsel Texas Department of Transportation Effective date: October 21, 1992 Proposal publication date: June 9, 1992 For further information, please call: (512) 463-8630 Texas Department of Insurance Exempt Filing Notification Pursuant to the Insurance Code, Chapter 5, Subchapter L (Editor's Note: As required by the Insurance Code, Article 5.96 and 5. 97, the Texas Register publishes notices of actions taken by the State Board of Insurance pursuant to Chapter 5, Subchapter L, of the Code. Board action taken under these articles is not subject to the Administrative Procedure and Texas Register Act. These actions become effective 15 days after the date of publication or on a later specified date. The text of the material being adopted will not be published, but may be examined in the offices of the State Board of Insurance, 333 Guadalupe, Austin. ) The State Board of Insurance on September 30, 1992, adopted amendments to Endorsements 593 and TE 00 39A in the Texas Automobile Rules and Rating Manual (the Manual) and the Texas Standard Provisions for Automobile Insurance Policies (the Standard Provisions). One amendment to Endorsement 593 allows the insurer to require the policyholder to submit a sworn proof of loss and to submit to examination under oath as currently required by the Personal Auto Policy. All other amendments are editorial in nature. The amendments are adopted to be effective for policies issued on and after 12:01 a.m., December 1, 1992. For further information or to request copies of the Board Order, please contact Angie Arizpe at (512) 322-4147, (refer to Reference Number O-0892-48-I). This notification is made pursuant to the Insurance Code, Article 5.96, which exempts it from the requirements of the Administrative Procedure and Texas Register 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 October 2, 1992. TRD-9213363 Linda K. von Quintus-Dorn Chief Clerk Texas Department of Insurance Effective date:December 1, 1992 For further information, please call: (512) 463-6327