ADOPTED RULES 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 4. AGRICULTURE Part I. Texas Department of Agriculture Chapter 1. General Procedures Subchapter G. Interagency Agreements 4 TAC sec.1.300 The Texas Department of Agriculture adopts new sec.1.300, concerning the Memorandum of Agreement with the Texas Department of Commerce, without changes to the proposed text as published in the August 12, 1994, issue of the Texas Register (19 TexReg 6325). The amendment is adopted in order to ensure compliance with sec.481.028 of the Texas Government Code, enacted by the 73rd Legislature, which requires that the Texas Department of Commerce and the Texas Department of Agriculture enter into a memorandum of understanding regarding each agency's international marketing efforts and business finance programs and that such memorandum be adopted as a rule by the agencies. The amendment will function by providing increased coordination and communication between the Texas Department of Agriculture and the Texas Department of Commerce with regard to program planning and budgeting related to economic development. The new section is adopted under the Texas Agriculture Code, sec.12.016, which provides the Texas Department of Agriculture with general rulemaking authority; the Texas Government Code, sec.481.028(d), which directs that the memorandum of understanding between the Texas Department of Agriculture and the Texas Department of Commerce be adopted as a rule by both agencies; and Subchapter B of Title 10, Chapter 2001 of the Texas Government Code, which prescribes the standard for rulemaking by state agencies. 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 26, 1994. TRD-9448648 Dolores Alvarado Hibbs Chief Administrative Law Judge Texas Department of Agriculture Effective date: October 17, 1994 Proposal publication date: August 12, 1994 For further information, please call: (512) 463-7583 TITLE 16. ECONOMIC REGULATIONS Part I. Railroad Commission of Texas Chapter 5. Transportation Division Subchapter L. Insurance Requirements 16 TAC sec.5.183 The Railroad Commission of Texas adopts an amendment to sec.5.183, concerning minimum limits, with changes to the proposed text as published in the August 12, 1994, issue of the Texas Register (19 TexReg 6328). The amendment brings the commission's insurance requirements for transporters of hazardous materials, hazardous waste, and hazardous substances consistent with existing federal regulations for motor carriers transporting such commodities in bulk, in tank vehicles, and for commercial vehicles requiring hazardous materials placarding. One change is to eliminate the words "in bulk, in tank vehicles" from paragraph 4 of the proposed text, so that the rule will cover all transportation of hazardous materials, waste, and substances, as required by federal law. Another change is to add the word "motor" between "commercial" and "vehicles" in subparagraph (a)(4) so that the terminology will be consistent with sec.5.501(a) of this title (relating to definitions). Another change is to add the term "cargo" before the term "damage" in subparagraph (b) to clarify that it is applicable to cargo insurance only. The amendment will promote compliance with insurance requirements by transporters of hazardous materials, hazardous wastes, and hazardous substances by making the commission's requirements consistent with federal requirements. Two comments were received, both of which were in favor of the proposed rule. Comments stated that all federal insurance minimum limits should be adopted for use in Texas, by language that would reference and adopt the applicable federal code provisions as amended from time to time. A comment also suggested amending the definition of "commercial motor vehicle" as a vehicle with a gross vehicle weight rating of 10,000 pounds or more. Groups or associations commenting in favor of adoption of the proposed rule were Texas Tank Truck Carriers Association, Inc., and Texas Motor Transportation Association, Inc. No comments were received opposing adoption of the rule. The commission does not agree that the rule's language should be changed to prospectively adopt for intrastate commerce the minimum insurance coverages in federal regulations applicable only to interstate commerce. The commission will review the differences between the amounts required for interstate and intrastate transportation to ascertain if any changes need to be made to its rules. The commission does agree that the rule should reflect the federal requirements for transportation of hazardous waste, materials, and substances, without a limitation to transportation of those commodities in bulk, in tank vehicles. Accordingly, this change has been made to the proposed text. The commission does not agree that the definition of "commercial motor vehicle" in sec.5.501(a) of this title (relating to definitions) should be changed at this time without further opportunity for public comment. The commission will review its definition of "commercial motor vehicle" in a proposed rulemaking scheduled for later this year on registration, insurance, and safety requirements for motor carriers and commercial motor vehicles. sec.5.183. Minimum Limits. (a) The minimum amounts referred to in sec.5.181 of this title (relating to evidence of insurance required) are hereby prescribed as follows: (1) Combined single limit for bodily injuries to or death of all persons injured or killed in any accident, and loss or damage in any one accident to property of others (excluding cargo) -$500,000. These minimums do not apply to certain transporters of hazardous waste, hazardous materials, and hazardous substances, as described in paragraph (4) of this subsection. (2)-(3) (No change.) (4) For all transporters which hold a certificate of public convenience and necessity from the commission and which transport hazardous waste, hazardous materials, and hazardous substances, and for all commercial motor vehicles of 10,000 pounds gross vehicular weight or more which are required to utilize hazardous materials placarding for transportation of a commodity specified in subparagraphs (A) or (B) of this paragraph, the following combined single limits apply to bodily injuries to or death of all persons injured or killed in any accident, and also apply to loss or damage in any one accident to property of others: (A) Hazardous substances, as defined in 49 Code of Federal Regulations sec.171.8, transported in cargo tanks, portable tanks, or hopper-type vehicles with capacities in excess of 3,500 water gallons; or in bulk Classes A or B explosives, poison gas (Poison A), liquified compressed gas or compressed gas; or highway route controlled quantity radioactive materials as defined in 49 Code of Federal Regulations sec.173.403 (excluding cargo) -$5,000,000. (B) Oil listed in 49 Code of Federal Regulations sec.172.101; hazardous waste, hazardous materials and hazardous substances defined in 49 Code of Federal Regulations sec.171.8 and listed in 49 Code of Federal Regulations sec.172.101, but not mentioned in paragraphs (A) or (C) of this subsection (excluding cargo) -$1,000,000. (C) Any quantity of Classes A or B explosives; any quantity of poison gas (Poison A); or highway route controlled quantity radioactive materials as defined in 49 Code of Federal Regulations sec.173.403 (excluding cargo)- $5,000,000. (b) In cases where multiple shippers sustain damage and the aggregate amount of cargo damage is greater than the cargo insurance in force, the insurance company shall prorate the benefits among the shippers in relationship to the damage incurred by each shipper. 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 27, 1994. TRD-9448751 Mary Ross McDonald Assistant Director, Legal Division, Gas Utilities/LP Gas Railroad Commission of Texas Effective date: October 18, 1994 Proposal publication date: August 12, 1994 For further information, please call: (512) 463-6989 Subchapter W. Registration of Commercial Carriers 16 TAC sec.5.503 The Railroad Commission of Texas adopts an amendment to sec.5.503 concerning liability insurance for commercial carriers, without changes to the proposed text as published in the August 12, 1994, issue of the Texas Register (19 TexReg 6329). The amendment makes the commission's minimum limits for commercial carrier transporters of hazardous materials, hazardous waste, and hazardous substances consistent with existing federal regulations and with sec.5.183, (relating to minimum limits). The amendment will promote compliance with insurance requirements by transporters of hazardous materials, hazardous wastes, and hazardous substances by making the commission's requirements consistent with federal requirements. Two comments were received, both of which were in favor of the proposed rule. Comments stated that all federal insurance minimum limits should be adopted for use in Texas, by language that would reference and adopt the applicable federal code provisions as amended from time to time. A comment also suggested amending the definition of "commercial motor vehicle" as a vehicle with a gross vehicle weight rating of 10,000 pounds or more. Groups or associations commenting in favor of adoption of the proposed rule were Texas Tank Truck Carriers Association, Inc., and Texas Motor Transportation Association, Inc. No comments were received opposing adoption of the rule. The commission does not agree that the rule's language should be changed to prospectively adopt for intrastate commerce the minimum insurance coverages in federal regulations applicable only to interstate commerce. The commission will review the differences between the amounts required for interstate and intrastate transportation to ascertain if any changes need to be made to its rules. The commission does agree that the rule should reflect the federal requirements for transportation of hazardous waste, materials, and substances, without a limitation to transportation of those commodities in bulk, in tank vehicles. Accordingly, this change has been made to the proposed text. The commission does not agree that the definition of "commercial motor vehicle" in sec.5.501(a) of this title (relating to definitions) should be changed at this time without further opportunity for public comment. The commission will review its definition of "commercial motor vehicle" in a proposed rulemaking scheduled for later this year on registration, insurance, and safety requirements for motor carriers and commercial motor vehicles. 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 27, 1994. TRD-9448752 Mary Ross McDonald Assistant Director, Legal Division, Gas Utilities/LP Gas Railroad Commission of Texas Effective date: October 18, 1994 Proposal publication date: August 12, 1994 For further information, please call: (512) 463-6989 Chapter 9. Liquefied Petroleum Gas Division Subchapter A. General Applicability and Requirements 16 TAC sec.9.32 The Railroad Commission of Texas adopts new sec.9.32, relating to the LP-gas advisory committee, with changes to the proposed text as published in the July 26, 1994, issue of the Texas Register (19 TexReg 5680). Implementing Senate Bill 383, 73rd legislature, 1993, the new section creates the LP-gas advisory committee of the commission and establishes its duration; sets forth the purpose and duties of the committee; prescribes the composition of the committee, the nomination the membership terms of the committee; and sets forth the mechanisms by which the committee meets, performs its work, and is evaluated. No comments were received from any groups or associations. One comment was received from an individual who suggested that the definition of consumer representative be expanded to allow individuals who represent the interest and welfare of the consuming public, but who are not necessarily LP-gas end users or industry representatives, to be named to the advisory committee. The commission agrees with this comment and has revised the definition of consumer representative to include representatives from governmental agencies such as the Texas Department of Public Safety which have an interest in LP-gas usage and safety. In addition, the commission makes four other changes as follows: deleting the duplicate word "services" from subsection (a)(3); deleting the duplicate word "voting" in subsection (d); specifying that the term of office for all committee members is two years in subsection (d); and correcting the date for making nominations in subsection (e). These changes are made to clarify the language and to correct the typographical error in the nomination date. The new section is adopted under Texas Natural Resources Code, sec.113.051, which authorizes the commission to adopt rules relating to any and all aspects or phases of the LP-gas industry that will protect or tend to protect the health, welfare, and safety of the general public. The new section implements the provisions of Senate Bill 383, 73rd Legislature, 1993, which mandates that state agency advisory committees conform to specific requirements set forth in the act. sec.9.32. LP-Gas Advisory Committee. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Commission-The Railroad Commission of Texas. (2) Committee-The LP-Gas Advisory Committee of the Railroad Commission of Texas. (3) Consumer representative-A member of the committee who is not engaged in the business of producing, distributing or retailing LP-gas and who is not engaged in the business of designing, manufacturing, distributing or retailing LP-gas equipment or performing LP-gas-related research or other services, but who is either an end user of LP-gas fuel, including but not limited to a consumer of odorized LP-gas as a residential or commercial heating or water- heating fuel, as an automotive or other transportation fuel, or as an agricultural or industrial fuel, or a representative from a governmental agency with a direct interest in LP-gas usage and safety. (4) Division-The Liquefied Petroleum Gas Division of the Railroad Commission of Texas. (5) Fiscal year-September 1 of a year through August 31 of the following year. (6) Industry representative-A member of the committee who is engaged in the business of producing, distributing or retailing LP-gas or who is engaged in the business of designing, manufacturing, distributing or retailing LP-gas equipment or performing LP-gas-related research or other services. (7) Local government representative-A member of the committee who is a fire marshall for a city or county. (8) LP-gas-Liquefied petroleum gas (LPG), as that term is defined in Texas Natural Resources Code, Chapter 113. (9) Member-An industry representative, a consumer representative, or a representative of local government who serves on the LP-Gas Advisory Committee of the Railroad Commission of Texas. (10) Presiding officer-The chairman of the LP-Gas Advisory Committee of the Railroad Commission of Texas. (b) Establishment; Duration. The LP-Gas Advisory Committee of the Railroad Commission of Texas is hereby established effective January 1, 1995. The committee is abolished on December 1, 1998, unless the commission amends this subsection to establish a different date. (c) Purpose and Duties. The purpose of the committee is to give the commission the benefit of the members' collective business, environmental, and technical expertise and experience to help the commission regulate the safe use of LP-gas. The committee's sole duty is to advise the commission. The committee has no executive or administrative powers or duties with respect to the operation of the division. All such powers and duties rest solely with the commission. (d) Composition of Committee; Membership Terms. The committee shall be composed of 12 members, 11 of whom shall be voting members. The 11 voting members shall include five LP-gas consumers, five members of the LP-gas industry, and one representative from local government, all of whom serve at the pleasure of the commission, for a period of two years. The director of the Liquefied Petroleum Gas Division shall serve as an ex officio, non-voting member of the committee. (e) Nominations for Committee Membership. Any person may nominate a candidate or candidates for membership on the committee. Nominations shall be made in writing and submitted by November 15, 1994, for the initial committee, and by January 1 of each odd-numbered year thereafter. Nominations may be submitted to the commission, a commissioner, or the director of the division for transmission to the commission. (f) Appointment of Members. All members of the committee are appointed by and serve at the pleasure of the commission. The commission shall appoint members of the first committee by January 1, 1995, and by August 31 of each odd-numbered year thereafter, such that the composition of the committee meets the requirements of subsection (d) of this section. If a member resigns or otherwise vacates his or her position prior to the end of his or her term, the commission shall appoint a replacement who shall serve the remainder of the unexpired term. (g) Reimbursement of Members' Expenses. The commission shall not reimburse members for travel or other expenses related to service on the committee. (h) Presiding Officer; Other Officers. The committee shall elect from its members a presiding officer who shall report the committee's advice and attendance in writing to the commission. The committee may elect other officers at its pleasure. (i) Subcommittees. The committee may organize itself into subcommittees. One member of each subcommittee shall serve as the chair of that subcommittee. The subcommittee chairs shall make written reports regarding their subcommittee's work to the presiding officer. (j) Meetings. The committee shall meet at the call of the presiding officer or the commission. Committee and subcommittee meetings are open to the public. (k) Committee Records. The division staff shall record and maintain the originals of the minutes of each committee and subcommittee meeting. The division shall maintain a record of actions taken by the committee and shall distribute copies of approved minutes and other committee documents to the commission and the committee members. (l) Evaluation of Committee Costs and Benefits. By October 1 of each year, the division director shall evaluate for the previous fiscal year and report to the commission: (A) the committee's work; (B) the committee's usefulness; and (C) the costs related to the committee's existence, including the cost of commission staff time spent in support of the committee's activities. (m) Report to Legislative Budget Board. The commission shall biennially report to the Legislative Budget Board the information developed under subsection (l) of this section in evaluating the committee's costs and benefits. 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 27, 1994. TRD-9448753 Mary Ross McDonald Assistant Director, Legal Division, Gas Utilities/LP Gas Railroad Commission of Texas Effective date: October 18, 1994 Proposal publication date: July 26, 1994 For further information, please call: (512) 463-7008 16 TAC sec.9.33 The Railroad Commission of Texas adopts new sec.9.33, relating to the U.S. Department of Labor (DOL) Defense Conversion Adjustment Grant Advisory Committee, with changes to the proposed text as published in the July 26, 1994, issue of the Texas Register (19 TexReg 5682). Implementing Senate Bill 383, 73rd legislature, 1993, the new section creates the U.S. Department of Labor (DOL) Defense Conversion Adjustment Grant Advisory Committee of the commission and establishes its duration; sets forth the purpose and duties of the committee; prescribes the composition of process, and the membership terms of the committee; and sets forth the mechanisms by which the committee meets, performs its work, and is evaluated. No comments were received regarding adoption of the new section. The commission makes one change to clarify the wording in subsection (d) regarding the term of office of the committee members. The new section is adopted under Texas Natural Resources Code, sec.113.051, which authorizes the commission to adopt rules relating to any and all aspects or phases of the LP-gas industry that will protect or tend to protect the health, welfare, and safety of the general public. The new section implements the provisions of Senate Bill 383, 73rd Legislature, 1993, which mandates that state agency advisory committees conform to specific requirements set forth in the act. sec.9.33. U.S. Department of Labor (DOL) Defense Conversion Adjustment Grant Advisory Committee. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Alternative fuel-liquefied petroleum gas (LP-gas or LPG), as that term is defined in Texas Natural Resources Code, Chapter 113; compressed natural gas (CNG), and liquefied natural gas (LNG), as those terms are defined in Texas Natural Resources Code, Chapter 116. (2) Commission-the Railroad Commission of Texas. (3) Committee-the U.S. Department of Labor Defense Conversion Adjustment Grant Advisory Committee of the Railroad Commission of Texas. (4) Division-the Liquefied Petroleum Gas Division of the Railroad Commission of Texas. (5) Educational representative-a member of the committee who is employed as an administrator or instructor at a public post-secondary educational institution. (6) Industry representative-a member of the committee who is engaged in the business of producing, distributing or retailing LP-gas or CNG, or who is engaged in the business of designing, manufacturing, distributing or retailing LP-gas or CNG equipment or performing LP-gas or CNG related research or other services. (7) Member-an educational representative, an industry representative, an organized labor representative, a private sector or consumer representative, a Texas Employment Commission representative, a Texas Department of Commerce representative, a Texas Education Agency representative, a Texas Higher Education Coordinating Board representative, or a service delivery area representative who serves on the U.S. Department of Labor (DOL) Defense Conversion Adjustment Grant Advisory Committee of the Railroad Commission of Texas. (8) Organized labor representative-a member of the committee who is affiliated with the Texas AFL/CIO. (9) Presiding officer-the chairman of the U.S. Department of Labor (DOL) Defense Conversion Adjustment Grant Advisory Committee of the Railroad Commission of Texas. (10) Private sector or consumer representative-a member of the committee who is an end user of an alternative fuel as an automotive or other transportation fuel. (11) Service delivery area representative-a member of the committee who is the chairman of a private industry council, or program director of a service delivery area under the Job Training Partnership Act (JTPA) in the Dallas, Fort Worth, or surrounding areas. (12) Texas Department of Commerce representative-a member of the committee who is the executive director of the Texas Department of Commerce, or that executive director's designee. (13) Texas Education Agency representative-a member of the committee who is the commissioner of the Texas Education Agency, or that commissioner's designee. (14) Texas Employment Commission representative-a member of the committee who is a member of the Texas Employment Commission, or that commission's designee. (15) Texas Higher Education Coordinating Board representative -a member of the committee who is the commissioner of the Higher Education Coordinating Board, or that commissioner's designee. (16) United States (U.S.) Department of Labor (DOL) Defense Conversion Adjustment Grant-a grant in the amount of $480,979 to the Railroad Commission of Texas from the U.S. DOL for retraining displaced defense workers in the Dallas/Fort Worth area in alternative fuels technology. The term of the grant is from December 17, 1993, to June 17, 1995. (b) Establishment; Duration. The U.S. Department of Labor (DOL) Defense Conversion Adjustment Grant Advisory Committee of the Railroad Commission of Texas is hereby established effective November 1, 1994. The committee is abolished on July 1, 1995, unless the commission amends this subsection to establish a different date. (c) Purpose and Duties. The purpose of the committee is to give the commission the benefit of the members' collective business, environmental, and technical expertise and experience to help the commission implement the alternative fuels training program under the U.S. DOL grant; to advise the commission on the development of curriculum; to assist the commission in identifying and securing additional funds for alternative fuels training; and to serve on the evaluation team to measure the success of the program. The committee's sole duty is to advise the commission. The committee has no executive or administrative powers or duties with respect to the operation of the division or administration of the grant. All such powers and duties rest solely with the commission. (d) Composition of Committee; Membership Terms. The committee shall be composed of 17 voting members, who shall include three private industry or consumer representatives, one for each alternative fuel; two industry representatives; three educational representatives; one representative of organized labor; one Texas Employment Commission representative; one Texas Department of Commerce representative; one Texas Education Agency representative; one Texas Higher Education Coordinating Board representative; and four service delivery area representatives; all of whom serve at the pleasure of the commission until July 1, 1995. (e) Appointment of Members. All members of the committee are appointed by and serve at the pleasure of the commission. The commission shall appoint members of the committee by November 1, 1994, such that the composition of the committee meets the requirements of subsection (d) of this section. If a member resigns or otherwise vacates his or her position prior to the end of his or her term, the commission shall appoint a replacement who shall serve the remainder of the unexpired term. (f) Reimbursement of Members' Expenses. The commission shall not reimburse members for travel or other expenses related to service on the committee. (g) Presiding Officer; Other Officers. The committee shall elect from its members a presiding officer who shall report the committee's advice and attendance in writing to the commission. The committee may elect other officers at its pleasure. (h) Meetings. The committee shall meet at the call of the presiding officer or the commission. Committee and subcommittee meetings are open to the public. (i) Committee Records. The division staff shall record and maintain the originals of the minutes of each committee and subcommittee meeting. The division shall maintain a record of actions taken by the committee and shall distribute copies of approved minutes and other committee documents to the commission and the committee members. (j) Evaluation of Committee Costs and Benefits. By July 15, 1995, the division director shall evaluate for the period of November 1, 1994, to July 1, 1995, and report to the commission: (A) the committee's work; (B) the committee's usefulness; and (C) the costs related to the committee's existence, including the cost of commission staff time spent in support of the committee's activities. (k) Report to Legislative Budget Board. The commission shall report to the Legislative Budget Board in October 1995 the information developed under subsection (j) of this section in evaluating the committee's costs and benefits. 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 27, 1994. TRD-9448754 Mary Ross McDonald Assistant Director, Legal Division, Gas Utilities/LP Gas Railroad Commission of Texas Effective date: October 18, 1994 Proposal publication date: July 26, 1994 For further information, please call: (512) 463-7008 Chapter 13. Regulations for Compressed Natural Gas (CNG) Fuel Systems Liquefied Natural Gas 16 TAC sec.13.2001 The Railroad Commission of Texas adopts new sec.13.2001, relating to the liquefied natural gas (LNG) advisory committee, with changes to the proposed text as published in the July 26, 1994, issue of the Texas Register (19 TexReg 5683). Implementing Senate Bill 383, 73rd legislature, 1993, the new section creates the LNG advisory committee of the commission and establishes its duration; sets forth the purpose and duties of the committee; prescribes the composition of the committee, the nomination and membership terms of the committee; and sets forth the mechanisms by which the committee meets, performs its work, and is evaluated. No comments were received from any groups or associations. One comment suggested that one of the industry representatives be a registered professional engineer. The commission agrees with this comment and has added this language to subsection (d). One comment noted that the year during which nominations must be made, as stated in subsection (3), should be 1994, instead of 1995. The commission agrees with this comment and has made this revision. In addition, the commission makes two other clarifying changes: deleting the duplicate word "services" from subsection (a)(3), and specifying that the term of office for all committee members is two years in subsection (d). The new section is adopted under Texas Natural Resources Code, sec.116.012, which authorizes the commission to adopt rules relating to any and all aspects or phases of the LNG industry that will protect or tend to protect the health, welfare, and safety of the general public. The new section implements the provisions of Senate Bill 383, 73rd Legislature, 1993, which mandates that state agency advisory committees conform to specific requirements set forth in the act. sec.13.2001. LNG Advisory Committee. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Commission-the Railroad Commission of Texas. (2) Committee-the LNG Advisory Committee of the Railroad Commission of Texas. (3) Consumer representative-a member of the committee who is not engaged in the business of producing, distributing or retailing LNG and who is not engaged in the business of designing, manufacturing, distributing or retailing LNG equipment or performing LNG related research or other services, but who is an end user of LNG fuel, including but not limited to a consumer of LNG as an automotive or other transportation fuel. (4) Division-the Liquefied Petroleum Gas Division of the Railroad Commission of Texas. (5) Fiscal year-September 1 of a year through August 31 of the following year. (6) Industry representative-a member of the committee who is engaged in the business of producing, distributing or retailing LNG or who is engaged in the business of designing, manufacturing, distributing or retailing LNG equipment or performing LNG related research or other services. (7) Local government representative-a member of the committee who is a fire marshall for a city or county. (8) LNG-liquefied natural gas, as that term is defined in Texas Natural Resources Code, Chapter 116. (9) Member-an industry representative, a consumer representative, or a representative of local government who serves on the LNG Advisory Committee of the Railroad Commission of Texas. (10) Presiding officer-the chairman of the LNG Advisory Committee of the Railroad Commission of Texas. (b) Establishment; Duration. The LNG Advisory Committee of the Railroad Commission of Texas is hereby established effective January 1, 1995. The committee is abolished on December 1, 1998, unless the commission amends this subsection to establish a different date. (c) Purpose and Duties. The purpose of the committee is to give the commission the benefit of the members' collective business, environmental, and technical expertise and experience to help the commission develop and implement rules for the safe use of LNG. The committee's sole duty is to advise the commission. The committee has no executive or administrative powers or duties with respect to the operation of the division. All such powers and duties rest solely with the commission. (d) Composition of Committee; Membership Terms. The committee shall be composed of eight members, seven of whom are voting members. The seven voting members shall include three LNG consumers, three members of the LNG industry, and one representative from local government; one industry representative shall be a registered professional engineer licensed to practice in the State of Texas. All members serve at the pleasure of the commission, for a period of two years. The director of the Liquefied Petroleum Gas Division shall serve as an ex officio, non-voting member of the committee. (e) Nominations for Committee Membership. Any person may nominate a candidate or candidates for membership on the committee. Nominations shall be in writing and submitted by November 15, 1994, for the initial committee, and by January 1 of each odd-numbered year thereafter. Nominations may be submitted to the commission, a commissioner, or the director of the division for transmission to the commission. (f) Appointment of Members. All members of the committee are appointed by and serve at the pleasure of the commission. The commission shall appoint members of the first committee by January 1, 1995, and by August 31 of each odd-numbered year thereafter, such that the composition of the committee meets the requirements of subsection (d) of this section. If a member resigns or otherwise vacates his or her position prior to the end of his or her term, the commission shall appoint a replacement who shall serve the remainder of the unexpired term. (g) Reimbursement of Members' Expenses. The commission shall not reimburse members for travel or other expenses related to service on the committee. (h) Presiding Officer; Other Officers. The committee shall elect from its members a presiding officer who shall report the committee's advice and attendance in writing to the commission. The committee may elect other officers at its pleasure. (i) Subcommittees. The committee may organize itself into subcommittees. One member of each subcommittee shall serve as the chair of that subcommittee. The subcommittee chairs shall make written reports regarding their subcommittee's work to the presiding officer. (j) Meetings. The committee shall meet at the call of the presiding officer or the commission. Committee and subcommittee meetings are open to the public. (k) Committee Records. The division staff shall record and maintain the originals of the minutes of each committee and subcommittee meeting. The division shall maintain a record of actions taken by the committee and shall distribute copies of approved minutes and other committee documents to the commission and the committee members. (l) Evaluation of Committee Costs and Benefits. By October 1 of each year, the division director shall evaluate for the previous fiscal year and report to the commission: (A) the committee's work; (B) the committee's usefulness; and (C) the costs related to the committee's existence, including the cost of commission staff time spent in support of the committee's activities. (m) Report to Legislative Budget Board. The commission shall biennially report to the Legislative Budget Board the information developed under subsection (l) of this section in evaluating the committee's costs and benefits. 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 27, 1994. TRD-9448755 Mary Ross McDonald Assistant Director, Legal Division, Gas Utilities/LP Gas Railroad Commission of Texas Effective date: October 18, 1994 Proposal publication date: July 26, 1994 For further information, please call: (512) 463-7008 Part II. Public Utility Commission of Texas Chapter 23. Substantive Rules Rates 16 TAC sec.23.23 The Public Utility Commission of Texas adopts an amendment to sec.23.23, with changes to the proposed text as published in the April 8, 1994, issue of the Texas Register (19 TexReg 2460). The proposed amendment addresses the Commission's concerns regarding expedited approval of changes in existing rates. The amendment is intended to resolve problems with the rule that have arisen in the context of proceedings utilizing this provision during the three years it has been in effect. Additionally, the Commission is restructuring the rule so that it is easier to read and understand. Finally, the Commission is providing electric cooperatives greater flexibility in proposing changes to their rates and tariffs within the context of an expedited proceeding. Specifically, the amendment allows cooperatives to make significant rate design changes in an expedited rate case. The following parties filed comments to the proposed rule: Texas Industrial Energy Consumers (TIEC); Texas Electric Cooperatives, Inc. (TEC); Central and South West Corporation (CSW), Texas-Lehigh Cement Company (Texas-Lehigh); Structural Metals, Inc. (SMI); and South Texas Electric Cooperative and its member cooperatives (STEC). SMI, Texas-Lehigh, TIEC, and CSW filed comments generally supporting the proposed rule changes. TEC and STEC filed comments urging that there be no limitation on the number of times a utility can file under the expedited rule. If a limitation is established, STEC favored one based on the percentage increase in revenue obtained. TEC stated that the ability of the General Counsel or any intervening party to veto an expedited rate case makes any limitation unnecessary. STEC asserted that a request for a rate reduction or for a revenue neutral rate design change should not affect the number of filings the utility could make under the expedited rule if the limitation were based on a percentage increase in revenue obtained. The Commission agrees that basing the limitation on a percentage increase in revenue is reasonable. Appropriate language has been inserted into the rule. STEC also submitted comments regarding the limitation on the revenue change and concerning the utility's income statement. These modifications have been made. The remainder of STEC's comments were supportive of the amendment. TEC filed comments requesting a limitation of the notice requirements to those contained in the rule. Where the notice provisions of this subsection conflicts with other notice provisions it is appropriate that the notice provisions in this subsection apply. Appropriate language has been inserted into the rule. Several commenters proposed typographical changes and clarifications which have been made. TEC requested changing the time for mailing notice to all affected customers from 15 days after public notice is filed with the Commission to 30 days. This comment was adopted. TEC filed comments requesting the inclusion of language in the rule stating that motions to intervene filed after the intervention deadline will automatically be denied. The adopted rule does not contain such language. There may be circumstances where an individual is unable to request intervention prior to the deadline but, nevertheless, should be granted intervention. The presiding officer appropriately will consider these cases on an individual basis. TEC's comments sought to change the rule to where a utility could extend its effective date without approval from the presiding officer. This comment was adopted to the extent that the utility is requesting an increase in total revenue. To the extent the utility or the General Counsel recommends proposing to decrease the utility's total revenue the utility would have to request an extension. TEC suggested that the utility have the right to determine which final order meeting the Commission considers the utility's application. Where the parties have reached an agreement on the rate change the Hearings Officer is directed to set the application on the first Commission agenda that is at least ten days after the proposed order is issued. This language addresses the concerns of the commenters. The amendment is adopted under Texas Civil Statutes, Article 1446c, sec.16(a) , which provide the Public Utility Commission of Texas with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction. sec.23.23. Rate Design. (a)-(b) (No change.) (c) Expedited Approval of Changes in Rates. An electric distribution cooperative may request expedited review and approval of rate changes pursuant to the procedures and limitations of this subsection. (1) Filing public notice and other information. (A) Documents to be filed. The utility may initiate a proceeding under this subsection by filing with the Commission the following information: (i) a copy of public notice; (ii) the proposed customer, demand, and energy charges applicable to each class of service; (iii) the estimated effects on total customer class revenue by customer class; (iv) the estimated effects on base revenues (revenues minus power cost and excluding other operating revenues) for the system and by customer class; (v) a request that the matter be assigned a docket number pursuant to subsection (c) of this section; and (vi) a brief description of the applicability and type of service for any new class of service proposed by the utility; (vii) if the utility desires to make changes in its service rules and regulations, the proposed service rules and regulations. (B) Documents to be provided to others. Concurrent with the utility's filing of information as provided in paragraph (1)(A) of this subsection, the utility shall mail or deliver a copy of the public notice and other information to the office of public counsel, the general counsel's office of the Commission, the utility's ten largest customer accounts (as measured by annual kilowatt-hour consumption) addressed to each customer's billing address or an alternative address previously specified by the customer, the appropriate officer of each affected municipality, and any other utility certified to provide retail electric utility service in the service area of the applicant utility. (C) Receipt of information. Upon receipt of the utility's public notice and other information provided in paragraph (1)(A) of this subsection, the hearings division shall docket the matter as a request for rate change pursuant to subsection (c) of this section. (2) Public notice. The utility shall provide public notice in compliance with the requirements of this subsection. In the event of a conflict between the provisions of this Rule and Procedural Rule 22.51, the provisions of this Rule shall apply. (A) Contents of notice. Public notice shall be entitled "Notice of Rate Change Request" and shall contain the following: (i) the effect the proposed change is expected to have on the total revenues of the utility, expressed as an annual dollar amount over or under adjusted test year revenues and as a percent of adjusted test year revenues; (ii) the proposed effective date of the proposed rate change; (iii) the classes and numbers of utility customers affected by the rate change; (iv) the following language: "Information concerning the proposed rate changes, including the proposed customer, demand, and energy charges applicable to each class of service, the estimated effect on revenue by customer class, and a brief description of the applicability and type of service for any new class of service which is proposed by the utility, is available at the general office of the utility, located at __(utility address) ____, or will be provided upon request to any customer by mail without charge. The utility has filed a copy of this Notice of Rate Change Request with the Public Utility Commission of Texas. Persons who wish to intervene in or comment upon these proceedings should notify the Commission as soon as possible. A request to intervene or for further information should be mailed to the Public Utility Commission of Texas, 7800 Shoal Creek Boulevard, Austin, Texas 78757. Further information may also be obtained by calling the Public Utility Commission's Public Information Office at (512) 458-0256, or (512) 458-0221 for text telephone. The deadline for intervening will be ______(45 days after the filing of Notice). (B) Issuance of Notice. The utility shall provide notice of the proposed rate changes in the following manner: (i) by publication in conspicuous form and place once a week for four consecutive weeks in a newspaper having general circulation in each county containing territory affected by the proposed rate change. However, no publication of public notice in any newspaper is required when the utility is seeking to reduce rates for all affected customers. Publication of public notice shall be requested no later than the date public notice is filed with the Commission (the notice filing date); (ii) by mailing public notice to all affected customers other than the utility's ten largest customer accounts no later than 30 days after public notice is filed as provided in paragraph (1)(A) of this subsection; (3) Application. No later than 15 days after public notice is filed with the Commission as provided in paragraph (1)(A) of this subsection, the utility shall file an application requesting Commission review in accordance with the expedited procedures of subsection (c) of this section. (A) Limitations. The utility's request shall be limited as follows: (i) Revenue change. The total revenue of the utility shall not change by more than 5.0% of the adjusted test-year level of total revenues as provided in paragraph (3)(B)(ii) of this subsection; (ii) Class allocation of revenues. The percentage change in adjusted base revenue collected from any customer class shall be no more than two times the percentage change in total system annual adjusted base revenues (revenues minus power cost) from all customer classes (not including other operating revenues, accounts 450 to 456) unless adjusted system revenues would not change, in which case no one class may receive a base revenue change greater than 10%. (iii) Rate design. The utility's proposed rate design shall be within the following guidelines. (I) If the utility's application includes a cost-of-service study, the utility may propose any changes in the design of existing customer class rate schedules, billing adjustments, and service fees. (II) If the utility's application does not include a cost of service study, the utility may only propose changes in the level of charges in existing customer class rate schedules and service fees. No changes shall be proposed in billing adjustments, including adjustments for the recovery of purchased electricity costs. (III) The utility may propose a new rate class if its application includes a cost of service study showing that the revenues allocated to the class are equal to or greater than the cost of providing service to the class. The utility may propose a rate class be established solely for a new customer if the estimated annual cost of providing service to the class is less than the estimated annual revenues for the class. (iv) Prior rate change. The utility shall not have changed any rate pursuant to this subsection during the preceding 12 months. (v) The sum of the percent rate changes, both positive and negative, calculated in accordance with subsection (c)(3)(A)(i) shall not exceed 10% since the utility's last full rate case. (B) Contents of application. The utility's application shall contain the following: (i) A Statement of Intent to change rates proposing rate revisions to be effective not less than 90 days after public notice is filed with the Commission as provided in paragraph (1) (A) of this subsection. (ii) An Income statement showing actual test-year revenues and expenses, adjustments to revenues and expenses as provided in this paragraph, the adjusted test-year, the proposed revenue change, and the adjusted test year with proposed revenue change. Adjustments to operating revenue shall be made for annualization of changes in the recovery of purchased electricity costs, and annualization of rate changes previously approved by a regulatory authority, if applicable. No other adjustments shall be made in calculating adjusted test-year operating revenues. Adjustments to operating expenses shall be made for the annualization of changes in purchased electricity costs, if applicable, and for removal of expenses not allowed to be included in the utility's cost of service by statute or Commission rule. No other adjustments to the operating expenses shall be made. (iii) Board resolution. A resolution of the utility's board of directors approving the proposed change in rates and authorizing the filing of the statement of intent with the Commission. (iv) Affidavits affirming that notice has been issued in accordance with paragraph (2)(B) of this subsection, and that affidavits of newspaper publishers will be filed as soon as they are available. (v) Cost-of-service study. The utility shall include a cost of service study in its application if the revenues collected from the customer classes would not all change in the same direction, the percentage change in total revenues collected from any customer class would be less than one-half the percentage change in total revenue, or it has been more than five years since the Commission last entered a final order setting the utility's rates in a full rate case. (vi) Affidavits supporting any exhibits or cost-of-service study filed with the statement of intent and affirming that the proposed rate changes are within the limitations of the subsection. (vii) A statement for each proposed rate design change, explaining in detail the estimated effect on total revenue and on base revenue by customer classes and stating the class and number of customers affected. (viii) A statement showing operating and maintenance expenses listed by FERC account on a monthly basis. (ix) Justification for rate design. The utility shall include in its application a statement of the reasons for each change in rate design proposed by the utility and testimony or affidavits supporting any exhibits or cost of service study filed with the statement of intent. (x) Other information. Any other information required in an official form that may be promulgated by the Commission for filing with statements of intent to change rates pursuant to this subsection. (C) Application to be provided to others. Concurrent with the filing of the utility's application with the Commission, the utility should mail or deliver a copy of its application to the Office of Public Counsel and the General Counsel's office of the Commission. (D) Failure to file application. If the utility fails to timely file an application, the proceeding shall be dismissed without prejudice. (4) Intervention. Any affected person may intervene by showing a justiciable interest related to the proposed change in rates. Concurrently with the filing of its request for intervention, the prospective intervenor should mail a copy of its request for intervention to the utility. (A) Deadline. Requests to intervene must be made in writing and filed with the Commission no later than 45 days after the filing of public notice with the Commission as provided in paragraph (1)(A) of this subsection. (B) Action upon receipt. Upon receipt of a request for intervention the Hearings Officer shall: (i) if requested or if deemed advisable, mail a copy of the request for intervention to the utility; and (ii) if requested or if deemed advisable, mail a copy of this subsection to the person requesting intervention. (C) The utility has seven days from receipt of the notice to object to the request for intervention. (D) Ruling on intervention request. The Hearings Officer shall as expeditiously as practicable enter a ruling on requests to intervene based upon the request for intervention and any objection. (5) Staff review. The Commission's staff shall review the application for compliance with the Act and this subsection. (A) Review of application and notice. The Hearings Officer shall determine whether the utility's public notice and application substantially comply with the following: (i) Paragraph (1)(A), (B) and (2) of this subsection concerning contents and issuance of public notice; and (ii) Paragraph (3)(A) concerning limitations on the utility's application; (B) Review of rate design. Additionally, the Commission's staff shall review whether the proposed rate design changes are reasonable, including whether any of the changes create unreasonably discriminatory rates. (6) General counsel recommendation. The General Counsel shall file a recommendation and written testimony which may be in the form of a memorandum setting forth its recommendations and the reasons for such recommendations or in the form of a proposed order. The General Counsel's recommendation and testimony shall be filed 60 days after the utility files its public notice with the Commission as provided in paragraph (1)(A) of this subsection. (7) Extension of effective date. If the utility has proposed to increase its total revenue, the utility may extend the proposed effective date for implementation of revised rates by filing a written notice of extension with the Commission. If the utility or the General Counsel's recommendation would propose to decrease the utility's total revenue, the utility may request extending the proposed effective date for implementation of revised rates by filing a written request for extension with the Commission. Where all parties are in agreement to the extension of the effective date, no request for extension shall be necessary. The extension shall be for a period not more than 30 days. The utility's extension of the effective date shall operate to extend all subsequent procedural deadlines set forth in this subsection for the same number of days as the effective date is extended. (8) Agreement of the parties. At any time within 70 days after public notice has been filed with the Commission as provided in paragraph (1)(A) of this subsection or any extension thereof, the parties may unanimously agree to a resolution of all issues in the case. The agreement of the parties may be in any appropriate pleading, including separate consents or non-objections to the Commission's approval of a draft proposed order that may be submitted by any of the parties. (9) Conversion to full rate proceeding. At any time within 73 days after the utility files public notice with the Commission as provided in paragraph (1)(A) of this subsection or any extension thereof, the utility may elect to convert its request for expedited approval of rates to a full rate proceeding by filing its election with the Commission and serving a copy on all parties. A utility which elects to convert an expedited proceeding to a full proceeding shall file an application in compliance with the Commission's filing requirements for a major rate case within 100 days after filing its election and shall serve a copy on all parties. The application shall be based on the same test-year used as the basis for the utility's expedited filing. The utility shall include in the application, as proposed rates, the same rates proposed by the utility in its expedited proceeding under this subsection. If public notice given by the utility in connection with the expedited proceeding complies with the Commission's requirements for such notice, no additional public notice shall be required. Discovery shall commence when the utility's full application is filed. Except as provided herein, the merits of the utility's full application shall be considered de novo, as if the utility's expedited proceeding has never been filed and the utility's proposed effective date for the implementation of revised rates shall be 35 days after the date the utility's full application is filed. (10) Action when case is not agreed or converted. In any case where there is neither an agreement of the parties, no filing of an election to convert the expedited proceeding to a full rate proceeding within the time prescribed or withdrawal of the application, the application shall be deemed denied and the Hearings Officer shall issue an order denying the utility's application without prejudice. (11) Proposed order. Where there is an agreement of the parties, the Hearings Officer shall prepare a proposed order. (A) Deadline. The proposed order shall be filed within 75 days after the utility files public notice with the Commission pursuant to paragraph (1) (A) of this subsection unless the effective date has been extended in accordance with paragraph (7) of this subsection. In such case, the deadline for filing the proposed order shall be extended by the number of days the proceeding is extended. (B) Contents. The proposed order shall contain proposed findings of fact and conclusions of law. (C) Evidence. There shall be included in the evidence the utility's public notice and all other documents filed pursuant to paragraph (1)(A) of this subsection, any affidavits concerning public notice filed by the utility; the utility's application including supporting testimony, affidavits and schedules, staff's testimony, findings of fact and conclusions of law filed by any party, and the agreements of the parties, if any. Objections to testimony and cross- examination shall be waived. (12) Setting on the commission's agenda/rate approval. If the parties have reached an agreement on the rate change, the Hearings Officer shall set the utility's application on the first Commission agenda that is at least ten days after the proposed order is issued. The utility shall extend its proposed effective date as necessary. If rate changes are authorized by the Commission, the utility may implement revised rates on the date of the Commission's final order or at such later date as may be requested by the utility and approved by the Commission. (13) Utility withdrawal. The utility may withdraw its application without prejudice to refiling at any time before a final order is issued by the Commission. (d)-(e) (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 22, 1994. TRD-9448471 John M. Renfrow Secretary of the Commission Public Utility Commission of Texas Effective date: October 13, 1994 Proposal publication date: April 8, 1994 For further information, please call: (512) 458-0100 TITLE 22. EXAMINING BOARDS Part IX. Texas State Board of Medical Examiners Chapter 165. Administration of Examinations 22 TAC sec.165.1 The Texas State Board of Medical Examiners adopts the repeal of sec.165.1, without changes, to the proposed text as published in the August 2, 1994, issue of the Texas Register (19 TexReg 5923). This issue has been addressed in a different section of the board rules. The section will function through the deletion of obsolete rules. No comments were received regarding the adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 4495b, which provide the Texas State board of Medical Examiners with the authority to make rules, regulations and bylaws not inconsistent with this act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this 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 authority. Issued in Austin, Texas, on September 26, 1994. TRD-9448625 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: October 17, 1994 Proposal publication date: August 2, 1994 For further information, please call: (512) 834-7728 Chapter 175. Schedule of Fees and Penalties 22 TAC sec.175.1, sec.175.4 The Texas State Board of Medical Examiners adopts amendments to sec.175.1 and sec.175.4, without changes, to the proposed text as published in the August 2, 1994, issue of the Texas Register (19 TexReg 5923). The Federation Licensing Examination (FLEX) is no longer being administered in Texas; therefore, the adoption of this amendment will clarify that the United States Medical Licensing Examination (USMLE) is the current examination being administered. The sections as adopted will function by clarification of the rules. No comments were received regarding adoption of the amendments. The amendments are adopted under Texas Civil Statutes, Article 4495b, which provide the Texas State Board of Medical Examiners with the authority to make rules, regulations and bylaws not inconsistent with this act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this 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 authority. Issued in Austin, Texas, on September 26, 1994. TRD-9448624 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: October 17, 1994 Proposal publication date: August 2, 1994 For further information, please call: (512) 834-7728 Chapter 183. Acupuncture 22 TAC sec.183.17 The Texas State Board of Medical Examiners adopts new sec.183.17, without changes, to the proposed text as published in the August 2, 1994, issue of the Texas Register (19 TexReg 5923). The new section will provide a limited exemption for those individuals practicing auricular acupuncture in order to allow the Board time to gather documentation and results of studies related to this area of practice. The new section as adopted will function by establishing an orderly system of licensing those persons practicing auricular acupuncture in the state of Texas in a manner which protects the health, safety, and welfare of the public. No comments were received regarding adoption of the new section. The new section is adopted under Texas Civil Statutes, Article 4495b, which provide the Texas State Board of Medical Examiners with the authority to make rules, regulations and bylaws not inconsistent with this act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this 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 authority. Issued in Austin, Texas, on September 26, 1994. TRD-9448626 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: October 17, 1994 Proposal publication date: August 2, 1994 For further information, please call: (512) 834-7728 Chapter 185. Physician Assistants 22 TAC sec.sec.185.1-185.16 The Texas State Board of Medical Examiners adopts the repeal of sec.sec.185. 1-185.16, without changes, to the proposed text as published in the July 8, 1994, issue of the Texas Register (19 TexReg 5304). The repeal as adopted complies with the mandates of the 73rd Legislature through House Bill 2498. The section will function by deleting obsolete rules. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 4495b, which provides the Texas State Board of Medical Examiners with the authority to make rules, regulations and bylaws not inconsistent with this act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this 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 authority. Issued in Austin, Texas, on September 26, 1994. TRD-9448622 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: October 17, 1994 Proposal publication date: July 8, 1994 For further information, please call: (512) 834-7728 278>22 TAC sec.sec.185.1-185.29 The Texas State Board of Medical Examiners adopts new sec. sec.185.1-185. 29, without changes to the proposed text as published in the July 8, 1994, issue of the Texas Register (19 TexReg 5304). The section as adopted will comply with mandates of the 73rd Legislature through House Bill 2498. The section will function by establishing an orderly system of licensing and disciplining those persons practicing as physician assistants in the state of Texas in a manner which protects the health, safety, and welfare of the public. Two comments were received, one from Texas Hospital Association and one from the Texas State Board of Pharmacy. The Texas Hospital Association was concerned that sec.185.17(c) would not allow physician assistants to be employed by health care facilities. Section sec.185.17(c) involves physician assistants in office practice settings only. Therefore, a physician assistant could be employed by a hospital with an onsite clinic and be supervised by a physician with a separate office setting. Communication with the Texas State Board of Pharmacy and clarification of the rules through a memo to all physician assistants have alleviated the concerns addressed in the comments from the Texas State Board of Pharmacy related to requesting drug samples. The new sections are adopted under Texas Civil Statutes, Article 4495b, which provide the Texas State Board of Medical Examiners with the authority to make rules, regulations and bylaws not inconsistent with this act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this 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 September 26, 1994. TRD-9448621 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: October 17, 1994 Proposal publication date: July 8, 1994 For further information, please call: (512) 834-7728 Chapter 199. Public Information 22 TAC sec.199.4 The Texas State Board of Medical Examiners adopts new sec.199.4, without changes to the proposed text as published in the August 2, 1994, issue of the Texas Register (19 TexReg 5924). As required by House Bill 1009 of the 73rd Legislature, the new section as adopted will outline charges for copies of records, computer tapes, mailing lists, and other documents available to the public. The new section as adopted will define specific costs for providing copies of records. No comments were received regarding adoption of the new section. The new section is adopted under Texas Civil Statutes, Article 4495b, which provide the Texas State Board of Medical Examiners with the authority to make rules, regulations and bylaws not inconsistent with this act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this 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 authority. Issued in Austin, Texas, on September 26, 1994. TRD-9448623 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: October 17, 1994 Proposal publication date: August 2, 1994 For further information, please call: (512) 834-7728 Part XXII. Texas State Board of Public Accountancy Chapter 513. Registration Registration of Sole Proprietorships 22 TAC sec.513.86 The Texas State Board of Public Accountancy adopts new sec.513.86 with changes to the proposed text as published in the August 2, 1994, issue of the Texas Register , (19 TexReg 5924). The change is the addition of the word "written" before the word "evidence" in item (3). The new section allows a sole proprietorship to continue operating for up to one year after the death of the sole proprietor. The new section will function by requiring proof of death of the sole proprietor, proof that a certificate or registration holder is managing the practice, and proof that the sole proprietor practice's survivability would be jeopardized by disruption of its continuation. Two comments were received by the board, one from Mark Troutman of Austin and one from Richard Forrest of Houston. The comments were made available to the board at the time of its consideration of this proposed section. Mr. Forrest suggested proposed subsection (3) containing the reason why a sole proprietorship would be allowed to continue to practice be broadened to include: (a) a "winding down" period so clients of the deceased certificate holder would not suffer a disruption of services and a possible hardship; (b) allowing the practice to continue because sale of the practice would be easier and more likely if the practice was a going concern; and (c) allowing the practice to continue to avoid diminishing the practice's value to the deceased practice holder's estate. Comment (a) apparently presumes the practice will be closed, and not sold. In response to comment (a) staff suggests it is unlikely clients would require services from the winding down practice for up to twelve months before engaging another CPA's services. Staff suggests that the occasions when a practice is closed and not sold are unusual, that these few instances can be handled by the executive director on an individual basis, and that 90 days may be a more reasonable "winding down" time period. Comments (b) and (c) are essentially the same: maintain the practice's value pending sale. In response to comments (b) and (c) staff suggests proposed subsection (3) addresses these concerns and is in agreement with comments (b) and (c). Some of the board's reasons for ensuring the survivability for up to twelve months of a sole proprietorship after the certificate holder's death are to maintain the value of the practice pending sale of the practice, to allow the estate adequate time to market the practice and to select a qualified purchaser, and to minimize client inconvenience. Mr. Troutman agreed with the proposed rule and suggested a few improvements. He suggested the board also require documents such as Letters Testamentary or a court Order under Section 238 of the Probate Code, either of which would judicially authorize a person to act on behalf of the sole proprietor's estate. Staff suggested that Letters Testamentary and Section 238 Orders may take anywhere from a few weeks to several months to obtain in addition to the board's processing time, that some of the practices' clients may be unable to forego a CPA's services for that long, and that some clients may be forced to retain another CPA, thus eroding the value of the sole proprietor's estate and negating the intent of this proposed section. On the issue of who is authorized to speak for the estate, staff suggested this is a Probate Court issue, is not within the board's jurisdiction, and that an attempt by the board to resolve this issue might place the practice in temporary limbo which would devalue the practice. Mr. Troutman pointed out that the proposed section did not address incapacity of the sole proprietor. Board staff agreed incapacity should be addressed. Staff suggested the board might want more time to consider incapacity and to study any proposed language. Adding new language on incapacity to the proposed section would be a substantive change requiring re-publication and delaying adoption of the section as published. Staff suggested adoption of the section as published with later amendments for incapacity. sec.513.86. Death of a Sole Proprietor. Upon written authorization from the executive director, a sole proprietorship may continue to operate for a period of up to 12 months following the death of the sole proprietor. The executive director, subject to ratification by the board at the next board meeting, may permit the continued operation of the sole proprietorship when he has been provided with: (1) a certified copy of the sole proprietor's death certificate; (2) a copy of the power of attorney from the sole proprietor's executor, administrator, or heir designating a certificate or registration holder in good standing with the board to manage the sole proprietorship on behalf of such party. When such party is not a certificate or registration holder, the power of attorney must authorize a certificate or registration holder to manage the sole proprietorship on behalf of such party; and (3) written evidence that a disruption in the continuation of the sole proprietorship would jeopardize the survivability of the firm. 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 19, 1994. TRD-9448718 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: October 18, 1994 Proposal publication date: August 2, 1994 For further information, please call: (512) 505-5566 Chapter 521. Fee Schedule Duplication and Other Charges and Refund of Board Fees 22 TAC sec.521.6 The Texas State Board of Public Accountancy adopts an amendment to sec.521. 6 without changes to the proposed text as published in the August 2, 1994, issue of the Texas Register , (19 TexReg 5925). The amendment allows implementation of House Bill 1009, 73rd Legislature, 1993, requiring state agencies to set fees for duplication. The amendment will function by pegging photocopying charges to the General Services Commission's charges and defining personnel and overhead charges. No comments were received concerning adoption of the rule. The amendment is adopted under Texas Civil Statutes, Article 41a-1, Section 6, which provides the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; and House Bill 1009, 73rd Legislature, 1993. 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 19, 1994. TRD-9448720 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: October 18, 1994 Proposal publication date: August 2, 1994 For further information, please call: (512) 505-5566 TITLE 25. HEALTH SERVICES Part I. Texas Department of Health Chapter 37. Maternal and Child Health Services The Texas Department of Health (department) adopts repeal of sec.37.47 and new sec.37.47, concerning the Children's Speech-Language and Hearing Advisory Committee. New sec.37.47 is adopted with changes to the proposed text as published in the July 5, 1994, issue of the Texas Register (19 TexReg 5148). The repeal is adopted without changes. The new section is adopted for the following reasons. In compliance with Texas Civil Statutes, Article 6252-33, the department must evaluate each of its advisory committees to determine whether the committee should be continued, modified, consolidated with other committees, or abolished. The present advisory committee, the Children's Speech-Language and Hearing Advisory Committee, was established in 1983. Upon review by the department, the committee's name and structure have been revised to create a better balance between professional and public members. The new section covers applicable law, purpose, tasks, abolishment, terms of office, officers, meetings, attendance, staff, procedures, subcommittees, statements by members, reports to the board, reimbursement of members' expenses, and the section's effective date. No comments from outside the department were received regarding adoption of the proposal. However, sec.37.47(d)(2) was amended as a result of staff comments. Comment: The committee's task listed at sec.37.47(d) include review of proposed legislation, which is outside the scope of this advisory committee. Department staff should continue to perform this function. Response: The department agrees, and sec.37.47(d)(2) has been amended accordingly. Special Senses and Communication Disorders 25 TAC sec.37.47 The repeal is adopted under Texas Civil Statutes, Article 6252-33, which set standards for the evaluation of advisory committees by the agencies for which they function, and under Health and Safety Code, sec.12.001, which provides the board with authority to adopt rules for the performance of every duty imposed by law upon the board, the department, and the commissioner of health. 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 26, 1994. TRD-9448673 Susan K. Steeg General Counsel, Office of General Counsel Texas Department of Health Effective date: January 1, 1995 Proposal publication date: July 5, 1994 For further information, please call: (512) 458-7236 The new section is adopted under Texas Civil Statutes, Article 6252-33, which set standards for the evaluation of advisory committees by the agencies for which they function, and under Health and Safety Code, sec.12.001, which provides the board with authority to adopt rules for the performance of every duty imposed by law upon the board, the department, and the commissioner of health. sec.37.47. Children's Speech-Language and Hearing Advisory Committee. (a) The committee. The Children's Speech-Language and Hearing Advisory Committee shall be appointed under and governed by this section. (b) Applicable law. The committee is subject to Texas Civil Statutes, Article 6252-33, relating to state agency advisory committees. (c) Purpose. The purpose of the committee is to provide advice to the board concerning appropriate techniques, tools, and training for screening hearing and speech/language in schools, child care and Head Start settings, and public health clinics; improvement of systems for early identification of hearing or speech/language delayed children; and improvement of systems to connect children who fail screening with diagnostic and remedial services. (d) Tasks. (1) The committee shall advise the board concerning rules relating to age groups mandated to be screened, periodicity of screening, qualifications and training of screeners, appropriate screening techniques and equipment, reporting requirements for screening, maintenance of records of screening, and operation of the Program for Amplification for Children of Texas. (2) The committee shall also review proposed rules to determine their impact on the quality of screening and access of identified children to quality diagnostic and remedial services, and shall advise staff of the department's Bureau of Women and Children in matters pertaining to the identification and care of children with hearing or speech-language disorders. (3) The committee shall carry out any other tasks given to the committee by the board. (e) Committee abolished. The committee shall be automatically abolished on January 1, 1999. (f) Composition. The committee shall be composed of 11 members appointed by the board as follows: (1) five consumer members; and (2) six nonconsumer members, which shall include: (A) two audiologists, one from private practice and one from the public sector; (B) two speech-language pathologists, one from private practice and one from the public sector; (C) one school nurse; and (D) one physician with expertise in caring for hearing and speech-language impaired children. (g) Terms of office. The term of office of each member shall be six years. (1) Members shall be appointed for staggered terms so that the terms of a substantially equivalent number of members will expire on December 31 of each even-numbered year, beginning in 1996. (A) The following members shall be appointed initially for two-year terms: (i) audiologist in the private sector; (ii) speech-language pathologist in the public sector; and (iii) consumer. (B) The following members shall be appointed initially for four-year terms: (i) audiologist in the public sector; (ii) physician; (iii) consumer; and (iv) consumer. (C) The following members shall be appointed for six-year terms: (i) speech-language pathologist in the private sector; (ii) school nurse; (iii) consumer; and (iv) consumer. (2) If a vacancy occurs, a person shall be appointed to serve the unexpired portion of that term. (h) Officers. The committee shall elect a presiding officer and an assistant presiding officer at its first meeting after August 31st of each year. (1) Each officer shall serve until the next regular election of officers. (2) The presiding officer shall preside at all committee meetings at which he or she is in attendance, call meetings in accordance with this section, appoint subcommittees of the committee as necessary, and cause proper reports to be made to the board. The presiding officer may serve as an ex-officio member of any subcommittee of the committee. (3) The assistant presiding officer shall perform the duties of the presiding officer in case of the absence or disability of the presiding officer. In case the office of presiding officer becomes vacant, the assistant presiding officer will serve until a successor is elected to complete the unexpired portion of the term of the office of presiding officer. (4) A vacancy which occurs in either the office of presiding officer or assistant presiding officer may be filled at the next committee meeting. (5) A member shall serve no more than two consecutive terms as presiding officer and/or assistant presiding officer. (6) The committee may reference its officers by other terms, such as chairperson and vice-chairperson. (i) Meetings. The committee shall meet only as necessary to conduct committee business. (1) A meeting may be called by agreement of department staff and either the presiding officer or at least three members of the committee. (2) Meeting arrangements shall be made by department staff. Department staff shall contact committee members to determine availability for a meeting date and place. (3) Each meeting of the committee shall be announced and conducted in accordance with the Open Meetings Act, Texas Government Code, Chapter 551. (4) Each member of the committee shall be informed of a committee meeting at least five working days before the meeting. (5) A simple majority of the members of the committee shall constitute a quorum for the purpose of transacting official business. (6) The committee is authorized to transact official business only when in a legally constituted meeting with a quorum present. (7) The agenda for each committee meeting shall include an opportunity for any person to address the committee on matters relating to committee business. The presiding officer may establish procedures for such public comment, including a time limit on each comment. (j) Attendance. Members shall attend committee meetings as scheduled. Members shall attend meetings of subcommittees to which the members are assigned. (1) A member shall notify the presiding officer or appropriate department staff if he or she is unable to attend a scheduled meeting. (2) It is grounds for removal from the committee if a member cannot discharge the member's duties for a substantial part of the term for which the member is appointed because of illness or disability, is absent from more than half of the committee and subcommittee meetings during a calendar year, or is absent from at least three consecutive committee meetings. (3) The validity of an action of the committee is not affected by the fact that it is taken when a ground for removal of a member exists. (4) The attendance records of the members shall be reported to the board. The report shall include attendance at committee and subcommittee meetings. (k) Staff. Staff support for the committee shall be provided by the department. (l) Procedures. Roberts Rules of Order, Newly Revised , shall be the basis of parliamentary decisions except where otherwise provided by law or rule. (1) Any action taken by the committee must be approved by a majority vote of the members present once a quorum is established. (2) Each member shall have one vote. (3) A member may not authorize another individual to represent the member by proxy. (4) The committee shall make decisions in the discharge of its duties without discrimination based on any person's race, creed, sex, religion, national origin, age, physical condition, or economic status. (5) Minutes of each committee meeting shall be taken by department staff. (A) A draft of the minutes approved by the presiding officer shall be provided to the board and each member of the committee within 30 days of each meeting. (B) After approval by the committee, the minutes shall be signed by the presiding officer. (m) Subcommittees. The committee may establish subcommittees as necessary to assist the committee in carrying out its duties. (1) The presiding officer shall appoint members of the committee to serve on subcommittees and to act as subcommittee chairpersons. The presiding officer may also appoint nonmembers of the committee to serve on subcommittees. (2) Subcommittees shall meet when called by the subcommittee chairperson or when so directed by the committee. (3) A subcommittee chairperson shall make regular reports to the advisory committee at each committee meeting or in interim written reports as needed. The reports shall include an executive summary or minutes of each subcommittee meeting. (n) Statement by members. The board, the department, and the committee shall not be bound in any way by any statement or action on the part of any committee member except when a statement or action is in pursuit of specific instructions from the board, department, or committee. (o) Reports to board. The committee shall file an annual written report with the board. (1) The report shall list the meeting dates of the committee and any subcommittees, the attendance records of its members, a brief description of actions taken by the committee, a description of how the committee has accomplished the tasks given to the committee by the board, the status of any rules which were recommended by the committee to the board, anticipated activities of the committee for the next year, and any amendments to this section requested by the committee. (2) The report shall identify the costs related to the committee's existence, including the cost of agency staff time spent in support of the committee's activities. (3) The report shall cover the meetings and activities in the immediately preceding 12 months and shall be filed with the board each January. It shall be signed by the presiding officer and appropriate department staff. (p) Reimbursement for expenses. In accordance with the requirements set forth in Texas Civil Statutes, Article 6252-33, a committee member may receive reimbursement for the member's expenses incurred for each day the member engages in official committee business. (1) No compensatory per diem shall be paid to committee members unless required by law. (2) A committee member who is an employee of a state agency, other than the department, may not receive reimbursement for expenses from the department. (3) A nonmember of the committee who is appointed to serve on a subcommittee may not receive reimbursement for expenses from the department. (4) Each member who is to be reimbursed for expenses shall submit to staff the member's receipts for expenses and any required official forms no later than 14 days after each committee meeting. (5) Requests for reimbursement of expenses shall be made on official state travel vouchers prepared by department staff. (q) Effective date. This section shall become effective on January 1, 1995. 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 26, 1994. TRD-9448672 Susan K. Steeg General Counsel, Office of General Counsel Texas Department of Health Effective date: January 1, 1995 Proposal publication date: July 5, 1994 For further information, please call: (512) 458-7236 25 TAC sec.37.48 The Texas Department of Health (department) adopts repeal of sec.37.48, concerning operating procedures for the Children's Vision Screening Advisory Committee, without changes to the proposed text as published in the July 8, 1994, issue of the Texas Register (19 TexReg 5314). The repeal is adopted for the following reasons. In compliance with Texas Civil Statutes, Article 6252-33, the department must evaluate each of its advisory committees to determine whether the committee should be continued, modified, consolidated with other committees, or abolished. No formal meetings of the Children's Vision Screening Advisory Committee have been held in the last two years, and two of the six committee positions are currently vacant. The department has determined that the committee's functions can be more efficiently performed by department personnel and other professionals, and that it should be abolished. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 6252-33, which set standards for the evaluation of advisory committees by the agencies for which they function, and under Health and Safety Code; sec.12.001, which provides the board with authority to adopt rules for the performance of every duty imposed by law upon the board, the department, and the commissioner of health. 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 26, 1994. TRD-9448671 Susan K. Steeg General Counsel, Office of General Counsel Texas Department of Health Effective date: October 18, 1994 Proposal publication date: July 8, 1994 For further information, please call: (512) 458-7236 Chapter 98. HIV and STD Control Subchapter C. Texas HIV Medication Program General Provisions 25 TAC sec.98.101 The Texas Department of Health (department) adopts an amendment to sec.98. 101, concerning the Texas HIV Medication Program, without changes to the proposed text as published in the April 26, 1994, issue of the Texas Register (19 TexReg 3130). The section sets out the criteria used in determining which drugs are provided under the department's program. The amendment allows the Texas board of Health (board) to approve, and the program to furnish medication "that have been shown to be effective in reducing hospitalizations" as required by the authorizing statute. Previously the rule required that the drug be approved by the United States Food and Drug Administration (FDA) specifically for the indicated application. Because advantages in pharmacological knowledge for treatment of these conditions is rapid, the effectiveness of drugs for this program may be established by the consensus and standards of care with the medical community prior to formal approval by the FDA. No comments were received regarding adoption of the amendment. The amendment is adopted under the Health and Safety Code, sec.85.063, which provides the Texas Board of Health with the authority to adopt rules concerning a Texas HIV Medication Program; sec.85.016 which provides the board with authority to adopt rules concerning HIV programs; and Health and Safety Code, sec.12.001, which provides the Texas Board of Health with the authority to adopt rules for the performance of every duty imposed by law on the Texas Board of Health, the Texas Department of Health, and the Commissioner of Health. 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 26, 1994. TRD-9448670 Susan K. Steeg General Counsel, Office of General Counsel Texas Department of Health Effective date: October 18, 1994 Proposal publication date: April 26, 1994 For further information, please call: (512) 458-7236 Chapter 229. Food and Drug Licensure of Wholesale Device Distributors 25 TAC sec.sec.229.431-229.443 The Texas Department of Health (department) adopts new sec.sec.229.431-229. 443, concerning the licensure of wholesale device distributors. Sections sec.sec.229.432 and sec.229.440 are adopted with changes to the proposed text as published in the August 12, 1994, issue of the Texas Register (19 TexReg 6331). Sections 229.431, 229.433-229.439, 229.441-229.443 are adopted without changes. These sections provide for the minimum licensure standards necessary to ensure the safety and efficacy of devices distributed by wholesale device distributors. These new sections will enable the department to collect licensure fees to recover the costs of establishing an official establishment inventory, implementing surveillance activities, monitoring facilities in violation, and removing adulterated and misbranded devices from commerce. The changes to the sections as they were proposed are discussed in the following comments and responses. A summary of comments received and the department's responses are as follows. COMMENT: Concerning sec.229.433, a commenter recommended that the definition of "wholesale distribution" be clarified to exclude those individuals who act as independent sales agents of manufacturers to further the distribution of devices. RESPONSE: The department disagrees since "independent sales agents" as described by the commenter are not employed by the manufacturer and act as distributors of devices to persons other than the consumer or patient. These independent distributors are subject to applicable federal requirements for device distributors and as such should not be excluded from these rules. COMMENT: Concerning sec.229.441, a commenter objected to the adoption of minimum standards for wholesale device distributors which are redundant with federal standards and which would serve to add costs to the health care industry and to state government regulatory agencies. RESPONSE: The department believes the adoption of federal regulations is necessary due to the preemptive nature of these requirements and will ensure that state rules are consistent with standards enforced nationwide. The department believes these licensure requirements do not place an undue burden on the health care industry or the department. COMMENT: Concerning sec.229.442, a commenter recommended that this section be removed or changed to allow the advertisement of prescription devices at trade shows, seminars, and conventions, and to allow distribution of written advertising materials to medical professionals. RESPONSE: The department disagrees, since the restrictions placed on the advertising of prescription devices in this section are required by statute and do not prevent the dissemination of advertisements to members of the medical, dental, and veterinary professions. Minor editorial changes were made for clarification purposes in sec.229.432 and sec.229.440. Intermedics Orthopedics , Inc. provided comments on the proposed rules. The commenter was generally in favor of the rules but expressed concerns, questions, and recommendations as stated earlier. The new sections are adopted under the Texas Health and Safety Code, sec.431. 241, which provides the department with the authority to adopt necessary regulations pursuant to the enforcement of this chapter; and sec.12.001, which provides the Texas Board of Health with the authority to adopt rules for the performance of every duty imposed by law on the Texas Board of Health, the Texas Department of Health, and the Commissioner of Health. sec.229.432. Applicable Laws and Regulations. (a) The Texas Department of Health (department) adopts by reference the following laws and regulations: (1) Federal Food, Drug, and Cosmetic Act, 21 United States Code, et seq as amended; (2) 21 Code of Federal Regulations (CFR), Part 801, Labeling, as amended; (3) 21 CFR, Part 803, Medical Device Reporting, as amended; (4) 21 CFR, Part 804, Medical Device Distributor Reporting, as amended; (5) 21 CFR, Part 807, Establishment Registration and Device Listing for Manufacturers and Distributors of Devices, as amended; (6) 21 CFR, Part 820, Good Manufacturing Practice for Medical Devices: General, as amended; (7) 21 CFR, Part 814, Premarket Approval of Medical Devices, as amended; and (8) 21 CFR, Subchapter J-Radiological Health, as amended. (b) Copies of these laws and regulations are indexed and filed in the office of the Division of Food and Drugs, Texas Department of Health, 1100 West 49th Street, Austin, Texas 78756, and are available for inspection during normal working hours. (c) Nothing in these sections shall relieve any person of the responsibility for compliance with other applicable Texas and federal laws and regulations. sec.229.440. Refusal, Cancellation, Suspension, or Revocation of License. (a) The Commissioner of Health (commissioner) may refuse an application or may suspend or revoke a license if the applicant or licensee: (1) has been convicted of a felony or misdemeanor that involves moral turpitude; (2) is an association, partnership, or corporation and the managing officer has been convicted of a felony or misdemeanor that involves moral turpitude; (3) has been convicted in a state or federal court of the illegal use, sale, or transportation of intoxicating liquors, narcotic drugs, barbiturates, amphetamines, desoxyephedrine, their compounds or derivatives, or any other dangerous or habit-forming drugs; (4) is an association, partnership, or corporation and the managing officer has been convicted in state or federal court of the illegal use, sale, or transportation of intoxicating liquors, narcotic drugs, barbiturates, amphetamines, desoxyephedrine, their compounds or derivatives, or any other dangerous or habit-forming drugs; (5) has violated any of the provisions of the Texas Food, Drug, and Cosmetic Act, Health and Safety Code, Chapter 431 (Act) or these sections; (6) has failed to pay a license fee or an annual renewal fee for a license; or (7) has obtained or attempted to obtain a license by fraud or deception. (b) The commissioner may refuse an application for a license or may suspend or revoke a license if the commissioner determines from evidence presented during a hearing that the applicant or licensee: (1) has violated the Health and Safety Code, sec.431.021(l)(3), relating to the counterfeiting of a drug or the sale or holding for sale of a counterfeit drug; (2) has violated the Health and Safety Code, Chapter 481 (Texas Controlled Substance Act), or the Health and Safety Code, Chapter 483 (Dangerous Drugs Act); or (3) has violated the rules of the director of the Department of Public Safety, including being responsible for a significant discrepancy in the records that state law requires the applicant or licensee to maintain. (c) The Texas Department of Health (department) may, after providing opportunity for hearing, refuse to license a wholesale distributor of devices, or may suspend or revoke a license for violations of the requirements in these sections or for any of the reasons described in the Act. (d) Any hearings for the refusal, revocation or suspension of a license are governed by the department's formal hearing procedures in Chapter 1 of this title (relating to the Board of Health) and the Administrative Procedure and Texas Register Act, the Government Code, Chapter 2001. (e) A license issued under these sections shall be returned to the department if the wholesale device distributor's place of business: (1) ceases business or otherwise ceases operation on a permanent basis; (2) relocates; or (3) changes name or ownership. For a corporation, an ownership change is deemed to have occurred, resulting in the necessity to return the license to the department, when 5.0% or more of the share of stock of a corporation is transferred from one person to another. 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 26, 1994. TRD-9448669 Susan K. Steeg General Counsel, Office of General Counsel Texas Department of Health Effective date: October 18, 1994 Proposal publication date: August 12, 1994 For further information, please call: (512) 458-7236 TITLE 31. NATURAL RESOURCES AND CONSERVATION Part I. General Land Office Chapter 20. Natural Resource Damage Assessment The General Land Office (GLO) adopts new Chapter 20, sec. sec.20.1-20.4, 20.10, 20.20-20.23, 20.30-20.36, and 20.40-20.44, concerning procedures and protocols for assessing damage to natural resources resulting from an unauthorized discharge of oil into coastal waters. The General Land Office (GLO) adopts this final rule with changes to the proposed text as published in the August 19, 1994, issue of the Texas Register (19 TexReg 6525). Sections 20.1, 20.3, 20.10, 20.23, 20.32, 20.36 and 20.41 are adopted with changes to the proposed rule. Sections 20.2, 20.4, 20.20-20.22, 20.30, 20.31, 20.33-20.35, 20.40, 20.42-20.44 are adopted without changes to the proposed rule. This chapter is adopted pursuant to the Texas Natural Resources Code, Chapter 40, Subchapter C (Oil Spill Prevention and Response Act (OSPRA)), which requires the commissioner of the GLO to promulgate administrative procedures and protocols for the assessment of natural resource damage from an unauthorized discharge of oil. This chapter establishes procedures and protocols for assessing damages for injuries to natural resources sustained as the result of an unauthorized discharge of oil. This chapter is promulgated pursuant to OSPRA, sec.40.107(c) (4). These procedures and protocols are applicable only to oil spills that enter or pose an imminent threat to Texas' coastal waters. Only natural resource trustees may assert a claim for damages to natural resources. The GLO, the Texas Natural Resource Conservation Commission (TNRCC) and the Texas Parks and Wildlife Department (TPWD) were designated by the governor of Texas as natural resources trustees. Section 20.10 contains the definitions applicable to the damage assessment process. Terms not defined have their ordinary meaning. Section 20.20 requires the commissioner to provide notice to natural resource trustees whenever there is a report of an unauthorized discharge of oil. Section 20.21 requires coordination between the state on-scene oil spill coordinator (SOSC) and the trustees, and describes the trustees' advisory role during a spill response. Trustees, like all parties in a spill response, are required to follow an incident unified command system and to follow applicable spill contingency plans. Section 20.22 requires the GLO, TNRCC, and TPWD to coordinate their damage assessment activities and to develop an administrative record to document the assessment process. Section 20.23 allows the responsible person (RP) to participate in the damage assessment process. Pursuant to sec.20.23(f), the trustees may limit the participation of the RP if the RP's actions interfere with the trustees' responsibilities or unreasonably delay the process. Section 20.23(f)(1) and (2) also allows RPs whose participation has been limited or terminated to rejoin the assessment process. During the assessment, the trustees and the RP are required, upon request, to share data with each other according to sec.20.23(d), and under sec.20.23(e) they may enter into stipulations regarding data and its interpretation. Section 20.30 requires the trustees to perform a preliminary field investigation. The purpose of the investigation is to determine whether an assessment should be conducted and, if so, to choose the type of assessment. Section 20.31 requires the trustees to provide the RP with written notice of intent to perform an assessment and includes a description of the contents of the notice. Section 20.32 describes the procedures to be used to determine injury and to quantify injury and loss of services. These procedures are not exclusive, but are descriptive of commonly utilized procedures and protocols. The trustees retain the discretion to use any reliable method appropriate to the specific discharge. This section also describes economic methodologies and methods of calculating damages and interest. Sections 20.33 and 20.34 identify the circumstances wherein trustees may use an expedited damage assessment method or a comprehensive damage method. These sections establish schedules for the completion of the assessment. Section 20.35 authorizes the use of the negotiated assessment method. The RP may initiate a negotiated assessment by making a written request within 15 days of receipt of the notice of assessment. Section 20.36 contains the requirements for plans for restoration, rehabilitation, replacement or acquisition of the equivalent of injured natural resources. Section 20.40 details the required contents of the assessment record, and provides for permanent retention of the record at the Archives and Records Division of the GLO. Section 20.41 lists the damages recoverable in a claim for damages for injuries to natural resources. The section also describes the limitation on natural resource damages, contained in OSPRA, sec.40.203(c) and (d), and the liability of the Coastal Protection Fund and the federal Oil Spill Liability Trust Fund. Section 20.42 describes the parameters of a negotiated settlement and also describes the mandatory provisions for any settlement of a claim for damages to natural resources. Section 20.43 defines the procedures for mediation, which is required prior to the initiation of any lawsuit by either trustees or the RP for natural resource damages. Finally, sec.20.44 describes the public's role in the damage assessment process. Trustees are required to provide for public notice and comment when they select an assessment procedure, when a restoration plan is proposed and when they propose to issue a certificate of completion for a restoration plan. One commenter questioned whether the trustees would apply state law when assessing a natural resource damage claim pursuant to federal law. In the event that the trustees conduct a natural resource damage assessment (NRDA) pursuant to federal law, the trustees will, of course, follow federal laws and regulations. However, the trustees have agreed, pursuant to sec.20.1, to conduct a field investigation and encourage the federal trustees to invite the responsible party to participate in all cases. Because the preamble to the proposed rule will not be republished, no change was made based on this comment. One commenter requested that sec.20.1 be amended to state that there will be no double recovery of damage claims in the event that federal trustees make a separate NRDA claim pursuant to federal law. Section 20.41(h) and the Texas Natural Resources Code, Title 2, Chapter 40, Subchapter E, sec.40.203(e), clearly prohibit double recovery for natural resource damages resulting from an unauthorized discharge of oil. For clarification, sec.20.1 was amended to specifically state that double recovery is prohibited. One commenter supported sec.20.1 because it clearly outlines the applicability of Chapter 20. The commenter also supported the intention to be consistent with federal rules and to cooperate with the federal trustees. Finally, this commenter was appreciative of the requirement that the state trustees perform a field investigation. Support for the intent expressed in this section indicates that the negotiated rulemaking group's (NRG) joint effort to address the concerns of government, industry and citizens was worthwhile. One commenter questioned whether the definition of "assessment or natural resource damage assessment" in sec.20.10 limited the procedures and protocols to currently available technology. The protocols and procedures referenced in the sec.20.10 definition of "assessment" are those listed in sec.20.32(a), which include "any other reliable incident-specific method." Therefore, reliable procedures and protocols developed in the future may be utilized by the trustees pursuant to sec.20.32. No change was made based on this comment. One commenter requested addition of the phrase "utilized over an extended period of time" after "scientific procedures" in the sec.20.10 definition of comprehensive assessment. The definition of comprehensive assessment is the same as the definition in the Texas Natural Resources Code, Title 2, Chapter 40, Subchapter C, sec.40.107, and the rules cannot amend statutory definitions. Requiring a history of use prior to current use of a scientific procedure would unnecessarily restrict trustees and RPs from using or developing innovative methodologies and technologies. Such a view sacrifices progress for tradition and is counter-productive and inefficient considering new developments in restoration technology and rapid advancements in other scientific disciplines. No change was made based on this comment. One commenter requested amending the definition of "cost-effective" in sec.20.10 to the alternative that "most thoroughly accomplishes the desired effect and does so at the comparatively lowest cost." The definition of "cost- effective" at sec.20.10 essentially says the same thing as the suggested amendment. No change was made based on this comment. A commenter questioned whether the definition of "damages" in sec.20.10 includes reasonable monitoring costs, lost use and diminution in value incurred prior to full recovery. Section 20.10 refers to damages that may be recovered and includes the cost of assessments. Section 20.41(a)(1)(E) refers to monitoring costs and sec.20.41(a)(4) refers to diminution in value, both of which may be recovered in a natural resource damage claim. No change was made based on this comment. One commenter requested that the definition of "harmful quantity" in sec.20. 10 require a measurable injury to resources. Harmful quantity refers to the quantity of oil discharged which triggers a response and an obligation to report the spill. This is the same definition used by state and federal spill responders. It is not intended to be a measure of natural resource injury. No change was made based on this comment. Two commenters stated that the definition of "passive use values" in sec.20. 10 should include the value that one places on the availability of the resource for one's own future use. One of the commenters also recommended changing "or" to "and" in that phrase to indicate that use by a person, a person's family and the general public are not mutually exclusive. The sec.20. 10 definition of "passive use values" was amended by adding the word "person" and by changing "or" to "and." One commenter recommended amending the sec.20.10 definition of "pathway" to include the possibility of defacement of non-biological resources. The connection between the discharged oil and the impacted natural resource may include, in the physical pathway, a non-biological resource. For example, the oiling of sediment, a non-biological resource, may result in injury to biological organisms in the sediment. Such an effect is accounted for in the definition of pathway. The phrase "physical pathway" ensures that the connection is not limited to biological resources. No change was made based on this comment. One commenter recommended amending the sec.20.10 definition of "pre-discharge condition" to specify that such conditions can be estimated or approximated, but not measured. Whether an effect is precisely measurable or, at best, only approximately measurable varies depending upon the parameter being measured and the techniques utilized. Amending the definition of "pre-discharge condition," as suggested by this commenter, creates a presumption that current techniques for measuring pre-discharge conditions are not adequately reliable. The test for admissability of scientific evidence is reliability and that standard applies to both precise measurements and approximations. Existing scientific and legal processes provide sufficient protection to ensure the reliability of such measurements. No change was made based on this comment. A commenter recommended that the sec.20.10 definition of "services" be amended to include ecological, scientific, historic, subsistence and passive uses. Section 20.41(a)(4) provides for claims for both use and passive use values. The sec.20.10 definition of "services" is amended to clarify that "services" refers to ecological services. Scientific and historic uses are covered in the sec.20.10 definition of public uses, which includes all human uses of natural resources. Subsistence uses are not part of a NRDA as such uses are the subject of private claims under Texas Natural Resources Code, Title 2, Chapter 40, Subchapter A, sec.40.003(6)(A). No other change was made based on this comment. One commenter recommended changing the definition, in sec.20.10, of "state on- scene coordinator" (SOSC) to account for those situations involving discharges of oil that are 240 barrels or less, where the Railroad Commission (RRC) is SOSC. Texas Natural Resources Code, Title 2, Chapter 40, Subchapter B, sec.40.052, provides that the State Coastal Discharge Contingency Plan, into which these rules will be incorporated, shall provide for the RRC to be SOSC when an oil spill of 240 barrels of less, from exploration and production activities or transportation by pipeline, occurs. Since the State Coastal Discharge Contingency Plan must contain this provision, and since trustees must follow all applicable contingency plans, amendment of this rule would be redundant. No change was made based on this comment. One commenter recommended that the definition of "unauthorized discharge of oil" in sec.20.10 be amended to include all discharges of oil authorized by law, not just those authorized pursuant to permit. The definition of "unauthorized discharge of oil" is the definition in Texas Natural Resources Code, Title 2, Chapter 40, Subchapter A, sec.40.003(24). These regulations cannot substantively change statutory definitions. No change was made based on this comment. One commenter recommended adding a definition, in sec.20.10, of "response activities" because this phrase is used throughout the rules. Response activities include a myriad of activities related to response to an unauthorized discharge of oil. The SOSC has broad discretion to authorize and initiate response activities. It is not appropriate to limit the SOSC's authority or discretion in a rule related to NRDA. No change was made based on this comment. One commenter suggested amending sec.20.20(b) to require the SOSC to provide trustees with an update "when it is possible to do so," rather than "promptly, " as required by this section. The trustees must promptly investigate a spill to determine whether to initiate the assessment process. Pursuant to sec.20. 20(a), the trustees receive initial spill reports, upon which they rely. However, in those instances where the impact on natural resources is significantly different from that described in the initial report, the trustees must be notified promptly. Therefore, no change was made based on this comment. One commenter requested changes to sec.20.21(a) to give the SOSC explicit authority to assign the trustees to particular components of the unified incident command system (ICS). Further, this commenter recommended clarification of the SOSC's role to emphasize that response activities have priority over NRDA activities. The SOSC, as the state's primary coordinator in spill response, needs discretion in establishing the unified ICS. Further, the SOSC must have the flexibility to merge state, federal and private ICSs. In order to preserve this necessary flexibility, the SOSC's ability to assign the trustees to the most appropriate position in a unified ICS should not be restricted. Therefore, the language of this section was not amended to assign trustees to a specific place in the ICS. The National Contingency Plan (NCP), Code of Federal Regulation, Title 40, Chapter 300, provides, as does sec.20. 21(a)(3) of this chapter, that the SOSC and the trustees shall coordinate their activities, and that trustee activities shall not interfere with response activities. Amendment of sec.20.21(a), as suggested by the commenter, is not required. No change was made based on these comments. One commenter recommended adding language to sec.20.21(b) to require that trustees demonstrate the ability to comply with all appropriate safety requirements, have appropriate training, and provide their own safety equipment. Section 20.21(b) provides that the SOSC shall allow access to the impacted area "in accordance with the site safety plan." Site safety plans cover the topics mentioned by the commenter; therefore no change was made based on this comment. A commenter supported the provision in sec.20.21(a)(3) requiring the trustees to coordinate and integrate assessment activities through the SOSC. Support for this section indicates that the NRG has successfully addressed the concerns of industry, government and citizens to protect natural resources and to accurately document natural resource injuries at the earliest opportunity. One commenter suggested amending sec.20.21(b) to require that state trustees, themselves, ensure that NRDA does not interfere with response activities. Further, the commenter stated that the SOSC should not have to show that the trustees are unreasonably interfering before limiting their activities. In the alternative, the commenter recommended the deletion of the last sentence in sec.20.21(b). As the state's primary spill response coordinator, the SOSC is the person who should determine whether trustees activities unreasonably interfere with response actions. The SOSC has a broad overview of all response activities and is in the best position to prioritize activities during spill response. Therefore, no change was made based on this comment. Several commenters requested that sec.20.23 outline standards and procedures for limiting RP participation. The facts that may lead to limiting RP participation depend on the unique circumstances of the incident. Trustees must maintain the flexibility to control RP participation in the assessment process. The trustees will provide the RP with reasons for terminating or limiting participation pursuant to sec.20.23(f). The RP is entitled to rebut the trustees written reasons, pursuant to sec.20.40(c)(6). These procedures are sufficient to provide notice to the RP. More specific procedures would create a bureaucratic process that distracts the trustees and unnecessarily delays the assessment process. One commenter recommended allowing the RP to rejoin the assessment process upon a showing that dilatory or disruptive practices will cease. Section 20. 23(f) allows the trustees to limit or terminate the participation of the RP. A limitation on the participation implies that an RP's status may change during the course of the assessment process. This section does not prohibit the trustees from allowing the RP to rejoin the assessment process. However, for clarification, subsection (f) has been amended by adding paragraphs (1) and (2) which explain the circumstances under which the RP may rejoin. The terms and conditions of the RP's participation shall be determined by the trustees on a case-by-case basis. Two commenters recommended that trustees should be able to limit or terminate participation only when the RP intentionally or willfully obstructs the trustees' ability to fulfill their trust responsibilities. The trustees should not be required to prove an RP's willfulness or intent, especially when RP delay might cause trustees to miss statutory schedules. No change was made based on this comment. Two commenters recommended that the RP be allowed to submit a rebuttal letter in response to the trustees' written statement limiting or barring RP participation. One of the commenters also requested that the trustees prepare a written statement of grounds for terminating the RP's participation for the assessment record. Section 20.23(f) requires the trustees to prepare a written statement describing the factual basis for disallowing further participation by the RP. Any correspondence received during the damage assessment process becomes part of the assessment record. Section 20.40(c)(1)(6) clearly states that all "other documents related to the role of the responsible person in the assessment process" shall become part of the assessment record. Thus, the RP has the opportunity to present a written rebuttal, pursuant to sec.20.40(c)(6). No change was made based on this comment. Two commenters recommended adding language to sec.20.23(f) to require the trustees to provide the RP with written reasons for limiting RP participation in the assessment process. Based on this comment, sec.20.23(f) was amended to clarify that the trustees' written statement limiting RP participation, required by this subsection, will be given to the RP. One commenter suggested amending sec.20.30(a) to allow RP participation in the preliminary field investigation. Section 20.30(b) allows RP participation in all phases of the assessment process. No change was made based on this comment. A commenter questioned whether it was cost-effective to conduct a preliminary field investigation in the event of each unauthorized discharge of oil as required in sec.20.30. Texas Natural Resources Code, Title 2, Chapter 40, Subchapter C, sec.40.107(c)(6)(C), requires the trustees to initiate an actual field investigation. A field investigation is necessary to assess the unique characteristics of each spill incident. Section 20.30 does not require the trustees to investigate every spill. The preliminary field investigation is a screening tool used to determine whether a damage assessment is required. The trustees retain considerable discretion in determining the necessity for and the scope of a preliminary field investigation. No change was made based on this comment. Regarding sec.20.31(a), one commenter noted that the subsection refers to "60 days," while sec.20.31(b) refers to "10 calendar days." The commenter recommended consistency in time references. Based on this comment, sec.20.3 was amended to add a sentence stating that any reference to days in the rules refers to "calendar days." One commenter suggested sec.20.31(a) be amended to clarify which on-scene coordinator (OSC) determines that cleanup is complete. The SOSC will make this determination. OSPRA does not and cannot require the federal OSC to give particular information to state trustees. No change was made based on this comment. One commenter stated that the requirement in sec.20.31(b) would result in the loss of data while the trustees are awaiting the RP's response to the notice of intent to perform an assessment. This commenter also requested that the phrase "reasonable and rational assessment" be defined. Section 20.31(b) does allow NRDA activities to continue if they are necessary for a reasonable and rational assessment. The phrase "reasonable and rational assessment" retains its ordinary meaning. The trustees will consider the unique characteristics of each incident and ensure that assessments are reasonable and bear a rational connection to the costs of performing the assessment. No change was made based on this comment. One commenter noted that sec.20.32(a) requires incident specific valuations, whereas sec.20.33 and sec.20.34 do not mention valuation methods for projects from an equivalent restoration plan (ERP). The commenter requested an amendment requiring trustees to consider the acquisition of the equivalent resources when determining cost-effectiveness. The procedures and protocols listed in sec.20.32 apply to all types of assessments, including expedited assessments (sec.20.33) and comprehensive assessments (sec.20.34). Valuation of restoration projects does not differ because the chosen project is pre-identified in an ERP. The same valuation methodologies are applicable to pre-identified projects, acquisition of the equivalent or any other remedy appropriate to the injuries sustained. No change was made based on this comment. One commenter suggested that sec.20.32(d) be amended to require state trustees to develop a manual of normal practices for the conduct of NRDA. These rules are intended to establish normal practices for the conduct of NRDA related to oil spills in coastal waters. Trustees also conduct NRDA for oil discharges not impacting coastal waters and for releases of hazardous substances. While development of a manual may be useful, it is not statutorily required and the GLO is reluctant to add to the tasks required of trustees. No change was made based on this comment. One commenter recommended modifying sec.20.32(f)(6)(C) by adding the word "substantially" before the phrase "equivalent to the total discounted value of interim lost services." Trustees are required to pursue recovery for all injuries to natural resources, including lost services. Modification, as suggested by the commenter, may imply that trustees can satisfy their obligations by recovering less than the value of the interim lost services. This would be inconsistent with trustee responsibilities. No change was made based on this comment. One commenter stated that if contingent valuation (CV) is used at all, it should be done as prescribed in sec.20.32(f)(8), i.e. pursuant to the recommendations and guidance of the Report of the National Oceanic and Atmospheric Administration (NOAA) Panel on Contingent Valuation (CV report). The GLO appreciates this commenter's support. One commenter requested amending sec.20.32 to require the state trustees to use federal regulations for CV, instead of the CV report. Federal regulations for CV are not yet final. The CV report was written under the guidance of nobel prize winners. This rule's adoption of the CV report provides state trustees with the best advice now available. The trustees can choose to use federal regulations for CV when those regulations are final. Section 20.32(a) has been amended to clarify that the trustees may use any reliable method, in addition those listed in sec.20.32. Concerning sec.20.32(g), one commenter stated that interest on estimated restoration costs and natural resource values under sec.20.32(g)(2) and (3) are inappropriate and that interest should only be collectible for costs already incurred at the time the claim is made. Discount rates are commonly used in a variety of business transactions. They are appropriately used in these sections where trustees may choose to finalize a claim for natural resource damages before full recovery of the injured resources. No change was made based on this comment. One commenter requested the phrases "travel cost method," "factor income method" and "hedonic price method" as used in sec.20.32 be defined. This section lists, but does not fully describe, the acceptable valuation methods. The language in the rule gives sufficient notice of the parameters of the particular method and a further, fuller description would make the rule unnecessarily complex. For example, there are several well-accepted variations on the "travel cost method," and, depending on the unique characteristics of the spill, trustees may utilize the most appropriate one. No change was made based on this comment. One commenter requested a definition of the phrase "rational connection" used in sec.20.32(a). The phrase "rational connection" is not defined in the rule. The phrase is used in Texas Natural Resources Code, Title 2, Chapter 40, Subchapter C, sec.40.107, and is intended, like other undefined terms, to have its ordinary meaning. The ordinary meaning of the phrase is that there is a relationship, for which one can provide a reason, between the expenditures for an assessment and the value of the injury sustained. This is similar to the requirement that the costs of the assessment not be disproportionate to the value of the injured resource. No change was made based on this comment. One commenter questioned whether an RP would incur liability for injuries to natural resources caused by response activities. Once there is an unauthorized discharge of oil, RPs are liable for all injuries to natural resources, whether caused directly by oiling of the resource, or by response activities. For example, if in-situ burning is used, the RP is liable for injury caused by the oil itself, injury caused by preparation of the site for burning, injury caused by use of chemical additives to enhance burning, injury caused by the fire and any other injury to any natural resource incurred as a result of the response activity. Section 20.32(a) requires trustees to consider adverse impacts caused by response activities. No change was made based on this comment. A commenter requested that sec.20.32(b)(3) be amended to require that trustees make "an actual finding of measurable damage to the unique natural resources injured by an unauthorized discharge of oil." The standard for showing injury to natural resources is a scientific, technical one. The legal standard for the admissability of the scientific evidence is reliability. These scientific and legal standards cannot and should not be modified by this rule. The commenter's request that compensation be allowed only for "unique" resources would result in an unacceptably subjective standard. Undoubtedly, the party liable for natural resource damages would argue that "unique" resources are very rare and almost never injured by oil spills. In contrast, a person concerned about maintaining the viability of an ecosystem would argue that each natural resource is unique and any injury to a resource should be fully compensated. Natural resources are defined in Texas Natural Resources Code, Title 2, Subchapter A, sec.40.003(15), as all land, fish, shellfish, fowl, wildlife, biota, vegetation, air, water, and other similar resources owned, managed, held in trust, or otherwise controlled by the state. No change was made based on this comment. One commenter recommended amending 20.32(d)(11) by replacing the word "measure" with the phrase "estimate the likely" because according to the commenter toxicity testing cannot absolutely duplicate actual conditions. While it may be true that one cannot exactly replicate field conditions, laboratory tests for toxicity regularly produce reliable measures. Toxicity testing has been used successfully for decades in analyzing industrial wastewater discharges. No change was made based on this comment. Regarding sec.20.32(d), one commenter suggested addition of a subsection requiring the trustees to conduct an accurate analysis of uncertainties inherent in the methods used to estimate injury and damages. The assessment record, required by sec.20.40, will document the use of estimates. Requiring the trustees to perform uncertainty analysis would unnecessarily complicate the NRDA process and greatly increase costs. Theoretical mathematical exercises are not required for the generation of a reasonable, rational, and reliable assessment. The methodologies described in sec.20.32 meet the legal standard of reliability. There is no sound basis for imposing this extremely burdensome requirement. No change was made based on this comment. Regarding sec.20.32(e)(3) and (f), a commenter requested that the phrase "incident- and site-specific" be substituted for "incident-specific." The word "incident" refers to all aspects of the unauthorized discharge, including the location. No change was made based on this comment. A commenter requested that the phrase "full recovery" be replaced with "maximum recovery" in sec.20.32(f)(6). Section 20.32(f)(6) describes the habitat or species replacement cost method for valuing injury. The phrase "full recovery" is appropriate since this method is designed to consider all effects, including lost services. Full recovery, as used in this subsection, describes the recovery of the injured resources and the restoration of services. No change was made based on this comment. Regarding sec.20.32(f)(8), a commenter stated that the guidance provided by the CV report was too cost restrictive and too vague to be used in designing a CV study. The CV report provides the best available guidance for designing CV studies. All assessments are subject to sec.20.32(a), which requires the cost of an assessment to have a rational connection to the value of the injured resource. Since the report was written by some of the most renowned experts in the United States, no change was made based on this comment. One commenter requested the deletion of sec.20.32(f)(8), stating that CV is not a reliable method; that the CV report described CV method surveys as unreliable; and that CV is undeserving of a rebuttable presumption. Public policymakers, academic economists, business leaders, conservationists, lawyers, and psychologists debate the reliability of CV. The costs of conducting a valid CV study make its cost-effectiveness prohibitive in all but the most catastrophic spills. Yet, not even all spills that result in the total loss of a tanker's cargo, such as the 1993 Braer spill in the Shetland Islands, result in significant recoveries based on CV. Texas Natural Resources Code, Title 2, Chapter 40, Subchapter C, sec.40.107(c)(4), requires the trustees to consider the unique characteristics of each spill. Texas may be subject to a catastrophic spill and Texas trustees must be empowered to respond to all characteristics of the spill, including loss of passive uses. For example, passive uses are treasured by the thousands of Texans and others who visit the coast each year to enjoy migratory birds. The attendant increases in tourism enhance the economic well-being of many small coastal towns. The existence of the birds themselves creates economic growth and should be valued and compensated for by RPs. The fact that CV is controversial is not a basis for forbidding its use. There are many experts who contend that CV is a reliable tool. No change was made based on this comment. One commenter suggested replacing the term "realized" with "actual" in sec.20.32(g)(1). Since "actual" more appropriately reflects common usage, this change was made. One commenter suggested that sec.20.32(h) quote the commercial paper rate for calculating post-judgement and pre-judgement interest instead of the United States Treasury rate. This change was made to represent the more appropriate value to the RP of delaying payment on a NRDA claim. A commenter stated that sec.20.33 fails to meet the statutory requirement to establish procedures and protocols. The procedures and protocols in sec.20.32 are applicable to all assessment procedures. No change was made based on this comment. One commenter requested that expedited settlement procedures in sec.20.33(a) (1)(A) include instances involving large fish kills and significant observable mortality. Section 20.33(a)(3) provides the trustees with discretion to expand the use of expedited assessments. Therefore, the situations described by the commenter could be covered in an expedited assessment. No change was made based on this comment. One commenter requested that sec.20.33(a)(1)(B) and (C) be amended to allow more time for expedited assessments. OSPRA does not set a schedule for expedited assessments. However, the NRG decided that use of this efficient procedure should include any assessment which could be completed in twelve months. No change was made based on this comment. A commenter recommended that sec.20.33(b) be amended to require the trustees to use "scientifically valid simplified procedures and protocols" in an expedited assessment. The trustees may use any reliable procedures and protocols pursuant to sec.20.32(a) and pursuant to Daubert v. Merrell-Dow Pharmaceuticals, Inc. , 113 S. Ct. 2786 (1993). Section 20.33(b) allows the trustees to utilize "appropriate simplified procedures and protocols in an expedited settlement." No change was made based on this comment. One commenter suggested adding a provision to sec.20.33(c) to allow RPs, who are participating in the assessment process, to request additional studies, sampling and analyses, even if the trustees, exercising their best professional judgment, disagree. Such an addition may undermine the spirit of joint, cooperative assessments, which contemplate consensus between the RP and the trustees. The RPs may conduct independent studies, sampling or analyses during the assessment procedures. Pursuant to sec.20.23(d), the RPs must, upon request, share such information with trustees. Because the trustees must act in a manner consistent with their public trust duties, these rules do not allow the RP to override the trustees' best professional judgement. Therefore, no change was made based on this comment. One commenter noted that sec.20.33 and sec.20.34 apparently do not recognize the acquisition of the equivalent resources, other than in an ERP. The commenter requested fuller discussion of the acquisition of the equivalent resources alternative as a remedy for injuries to natural resources. The acquisition of the equivalent resource is an option, like all others, that will be evaluated by the trustees prior to final selection of a restoration plan. Further, pursuant to sec.20.36(c)(3), the acquisition of the equivalent resource may be used in conjunction with other restoration options. The trustees have discretion in selecting the most appropriate restoration plan. Section 20.36(b) requires the trustees to evaluate all appropriate options, including the acquisition of the equivalent resources. The acquisition of the equivalent resource is an option separate from the selection of a restoration project from an ERP. No change was made based on this comment. One commenter requested amendment of sec.20.34(b) to include the basis for granting or denying an extension of time for conducting a comprehensive damage assessment. Section 20.34(b) is based on Texas Natural Resources Code, Title 2, Chapter 40, Subchapter C, sec.40.104(c)(7)(C). The statute does not state any grounds for denying or granting an extension of time to conduct a comprehensive assessment. No change was made based on this comment. A commenter recommended the deletion or amendment of the last sentence in sec.24.34(c) to require that studies and surveys are rationally connected to the value of the natural resource before injury. Section 20.32(a) requires all assessments to have a rational connection to the value of the injured resources. The suggested amendment would be redundant; therefore, no change was made based on this comment. One commenter objected to the provision in sec.20.35(d) which allows either the trustees or the responsible person to terminate a negotiated assessment agreement at any time. The commenter recommended that termination be limited to negotiations and not apply to restoration agreements. A negotiated assessment is an agreement between the trustees and the RP for the conduct of the assessment. Neither party should be permanently bound to an agreement which may no longer be appropriate to the unique characteristics of the spill incident. Further, the trustees may discover new evidence during the restoration phase requiring them to negotiate with the RP. An inability to re-open the agreement could result in a violation of the trustees' legal responsibilities. No change was made based on this comment. A commenter requested an amendment of sec.20.36(a) and (b) to state that trustees shall invite the RP to participate in the development and implementation of restoration, replacement, rehabilitation and acquisition of the equivalent natural resources. Section 20.23(b) requires the trustees to invite the RP to participate in the restoration plan. Pursuant to the definition of "restoration plan" in sec.20.10, replacement, rehabilitation and acquisition of the equivalent resources are all activities in which the RP is entitled to participate. The general statement in sec.20.23(b) covers all phases of the assessment process. Adding it to sec.20.36 would be redundant. No change was made based on this comment. One commenter requested that sec.20.36(b)(6) be amended to allow restoration projects to proceed without public participation when additional adverse impacts may occur during the 30-day public comment period. Public participation is an important element of the damage assessment process. Generally, when a restoration plan has been developed, all adverse effects are known. If additional adverse effects are still occurring, it is unlikely that a restoration plan will be complete and ready for public review. No change was made based on this comment. A commenter requested the deletion or amendment of sec.20.36(c) to provide liability only for pilot projects that test cost-effectiveness of restoration methods that have previously been shown to be technically feasible. Pilot projects may be used to test for technical feasibility and for cost- effectiveness. They are an important tool in ensuring that the most efficient methods are employed. The trustees' ability to conduct pilot projects, which may result in significant cost savings, should not be limited. No change was made based on this comment. Two commenters stated that sec.20.36(e)(2)(A) should be amended to require an assessment of the cost-effectiveness of ERPs and to prohibit the use of an ERP to pay to fix an environmental problem unrelated to the injury or to fund a preferred project. The same commenters questioned whether OSPRA allows the trustees to pool recoveries. Section 20.36(e) does not create a category of restoration plans independent from the general NRDA process. ERPs will be analyzed for cost-effectiveness, like all other restoration plans. Section 20. 36(e)(2)(A) requires an ecological tie between the project and the injury sustained, and thus protects against funding of favored or unrelated projects. OSPRA does not prohibit the pooling of recovered damages. No changes were made based on these comments. One commenter emphasized the importance of ensuring that the cost of any restoration plan, described in sec.20.36, is consistent with the value and use of the resources prior to the unauthorized discharge. Texas Natural Resources Code, Title 2, Chapter 40, Subchapter C, sec.40.107(c)(7)(E), requires the trustees to ensure that the cost of any restoration, rehabilitation, replacement or acquisition project shall not be disproportionate to the value of the natural resource before injury. This same prohibition is reiterated in sec.20.32(a) of these rules. No change was made based on this comment. Two commenters requested a definition of "equivalent resource plan." One of the commenters suggested that the plan be in place prior to a spill incident, that the plan have a limited, identifiable geographical or resource scope, and that the plan comply with basic damage assessment procedures, including public participation. Section 20.36(e) encompasses the concepts suggested by the commenters and further similar language would be redundant. No change was made based on these comments. One commenter noted that sec.sec.20.36(e), 20.33(c) and 20.34(d) refer to "restoration projects," while sec.20.36(e)(1) and sec.20.41(g) refer to "projects." The commenter requested clarification. Section 20.36(e)(1) and sec.20.41(g) were amended to specifically refer to "restoration projects." One commenter requested the amendment of sec.20.40(c)(6) to include correspondence, agreements and other documents related to the role of the public participant. All public comment will become part of the assessment record as provided in sec.20.44. Any documents and correspondence related to the NRDA process will also be part of the assessment record. This includes agreements or other documents related to the role of the public participant. No change was made based on this comment. One commenter objected to the requirement in sec.20.40(d)(2) that data included in the assessment record must either meet the quality assurance/quality control plan (the "QA/QC plan") or have a scientifically reliable basis for utilization. The NRG determined that data may be reliable despite the fact that it fails to meet all aspects of the QA/QC plan. Pursuant to Daubert v. Merrell-Dow Pharmaceuticals, Inc., 113 S. Ct. 2786 (1993), the standard for admissibility of expert testimony is reliability. The section has been amended to more closely follow Daubert by deleting the word "scientifically" from the phrase "scientifically reliable." One commenter requested that sec.20.41(d)(1) clearly state that facts and data contained in attorney-client privileged and attorney work-product documents are not excepted from the public record. This comment accurately reflects existing law and nothing in this chapter can change or circumvent applicable rules of evidence. Because sec.20.41(d)(1) is consistent with existing law, no change was made based on this comment. One commenter recommended that sec.20.41 be revised to clarify the order in which trustees present their claim for assessment costs. Regarding sec.20.41(b), another commenter questioned whether trustees can recover from both the Coastal Protection Fund (CPF) and the RPs. For purposes of clarification, this section has been amended to state that trustees, like all other claimants in an oil spill incident, make their claim first to the RP. If the trustees cannot collect from the RP, they may, depending on the size of the claim, present it to either the federal Oil Spill Liability Trust Fund or to the CPF. Assessment costs are separately reimbursable to each trustee because state fiscal procedures make it difficult for one entity to collect all costs and then reimburse each trustee. Clarifying changes were made to sec.20.41. One commenter stated that sec.20.41(f), which requires the RP to pay the trustees within 60 days of the claim, conflicts with the mediation requirements. The commenter noted that sec.20.41(f) allows the claim to be mediated even if the CPF has paid the claim. The commenter is correct to the extent that he suggests that the payment may be mediated. However, if the CPF has paid the claim, the NRDA claim is subrogated to the commissioner and the RP is not entitled to mediation. The commissioner is required to seek reimbursement to the CPF and does so in an action separate from a NRDA claim. Section 20.41 has been amended to clarify the liability of the RP and the CPF. One commenter requested modification of sec.20.41(a)(1)-(5) to ensure that sec.20.40(a)(6), requiring a rational connection between the assessment and its cost, applies. Section 20.32(a) requires reasonable assessments with a rational connection to the value of the injured resource. Furthermore, Texas Natural Resources Code, Title 2, Chapter 40, Subchapter C, sec.40.107(c)(7)(E), requires that all "assessments generated by the trustees be reasonable and have a rational connection to the cost of conducting the assessment." The entire assessment process is subject to sec.20.40(a)(6), therefore the suggested change is not necessary. No change was made based on this comment. A commenter objected to sec.20.41(a)(4) because it allows trustees to recover damages after restoration, replacement, rehabilitation and/or acquisition of equivalent resources has occurred. The trustees are required to recover, on behalf of the public, the full difference in value between the value of natural resources before the injury and the value of the natural resources after restoration. Even after the restoration project is complete, the trustees may recover for past, present and future loss of services. No change was made based on this comment. One commenter recommended that sec.20.41(g) be amended to require the conditions of sec.20.36(e)(2) be met prior to allowing the trustees to pool recovered compensation. Another commenter stated that sec.20.41(g) was inconsistent with sec.20.36 because it fails to require an ecological tie between the injured resource and the ERP. In response to this comment, sec.20. 41(g) has been amended to clarify that pooling of recoveries will only occur when the requirements for an ERP have been met. One commenter recommended adding language to sec.20.10 and sec.20.41 to include the costs of "cleaning up the discharged oil." The costs of cleanup are separately recoverable under Texas Natural Resources Code, Title 2, Chapter 40, Subchapter E, sec.40.202, and are not part of a NRDA claim. No change was made based on this comment. One commenter requested the deletion of sec.20.41(a)(5) and sec.20.32(f)(3) because these sections allow the trustees to recover for losses other than natural resource damages. According to the commenter, these sections allow double counting. The trustees are entitled to recover losses associated with payments collectible by trustees for use of a natural resource by a private party, as provided in sec.20.41(a)(5). Park or beach entrance fees are an example of the types of fees appropriately recoverable by trustees. As stated in sec.20.41(a)(5), fees, economic rent or payments collectible by the trustees may be recoverable. This subsection is applicable only where a trustee agency would be entitled to the fees or rents. When such fees or rents are collectible by other parties, the trustees will not make a claim for their recovery. The trustees shall ensure there is no double counting. Further, the trustees shall ensure that RPs are not charge twice for losses based on fees or rents. Section 20.32(f)(3) allows use of the factor income method to value injured natural resources. This method does not cause double counting. Therefore, no changes were made based on this comment. However, based on other comments, sec.20.41 has been amended. One commenter recommended that sec.20.42(a) be amended so that the responsible party makes all payments to the CPF. The CPF is not the most appropriate repository for recoveries from NRDAs. First, recovered damages may only be used to restore, rehabilitate, replace or acquire the equivalent of the natural resource. Placing these monies in the CPF would artificially inflate the CPF, thereby creating the impression that there are more funds available for spill response than actually exist. In such an instance, the fees collected may be suspended because a natural resource damage recovery has increased the CPF balance. Second, there is no clear mechanism to withdraw such funds from the CPF without further appropriation from the legislature. This would create an untenable situation where trustees could not access monies committed to restoration. Third, the first $5 million of CPF interest is dedicated to the RRC. This provision prevents the trustees from maximizing the use of recovered monies. No change was made based on this comment. Regarding sec.20.44, one commenter suggested that the section should be clarified to state that only the trustees and the RP make the determination regarding the need for an assessment. While sec.20.44(e) allows a member of the public to participate in the decision whether to conduct an assessment, the subsection does not give the member of the public a vote in the decision. The trustees retain, throughout the assessment process, the final authority on all decisions. No change was made based on this comment. One commenter supported the case-by-case cooperative approach to NRDA, the procedures outlined in this chapter and the mediation requirements. Through the negotiated rulemaking process, the trustees and representatives of the public and industry sought to create a cooperative approach to rulemaking and restoration of natural resources injured as a result of unauthorized discharges of oil into coastal waters. The spirit of cooperation achieved by the NRG is reflected throughout this chapter. One commenter expressed support for the requirement that a field investigation be conducted as part of every assessment. The commenter also endorsed the requirement that the RP be invited to participate in the assessment and restoration process and the availability of negotiated assessments. The GLO appreciates the commenter's support. BP Oil supported sec.sec.20.1, 20.23, 20.32, and 20.43. BP Oil opposed sec.sec.20. 10, 20.23, 20.32, 20.33, 20.35, 20.36, 20.41 and 20.42. Exxon opposed sec.sec.20. 32-20.34, 20.36, 20.40, 20.41, and 20.44. Marine Spill Response Corporation opposed sec.20.10 and sec.20.21. Minerals Management Service recommended changes to sec.20.10. National Oceanic and Atmospheric Administration (NOAA) opposed sec.sec.20.1, 20.10, 20.30-20.34, 20.36 and 20.40. The Railroad Commission opposed sec.sec.20.10, 20.20, and 20.21. Howard Seitzman suggested changes to sec.20.3 and to sec.20.23. Shell Oil Company supported sec.sec.20.30, 20.23, 20.32, and 20.35. Shell Oil Company opposed sec.sec.20.10, 20.30-20.33, 20.36, and 20.41. Star Enterprise opposed sec. sec.20.32, 20.36, 20.42, and 20.44. Texas Mid Continent Oil and Gas Association concurred with comments submitted by BP Oil and Shell Oil Company. Subchapter A. General Provisions 31 TAC sec.sec.20.1-20.4, 20.10 The new sections are adopted pursuant to the Texas Natural Resource Code, 40.107(c)(4), which requires the commissioner of the GLO to adopt administrative procedures and protocols for the assessment of natural resource damages from an unauthorized discharge of oil. sec.20.1. Declaration and Intent. The commissioner of the Texas General Land Office (commissioner) adopts these rules pursuant to the Oil Spill Prevention and Response Act (OSPRA), Texas Natural Resources Code, sec.40. 107(c)(4). OSPRA also requires the Texas Natural Resources Conservation Commission and Texas Parks and Wildlife Department to adopt these rules. They will incorporate these rules, after they have been adopted by the General Land Office and become effective, into their rules. These rules are applicable in the event that an unauthorized discharge of oil to coastal waters results in injury to natural resources. These rules are intended to be consistent with the National Contingency Plan, the Area Contingency Plan, and the State Coastal Discharge Contingency Plan, all three of which are defined in sec.20.10 of this title (relating to Definitions). These rules are also intended to achieve consistency, to the extent allowed by OSPRA, sec.40.107, with existing and proposed federal rules for assessing damages to injured natural resources. Thus, the state natural resource trustees are encouraged to cooperate and coordinate their actions with the federal trustees. The federal trustees are, of course, not bound by these rules and have the right to bring separate claims in addition to any claim made by the state trustees. Even though state and federal trustees may bring a separate claim double recovery is prohibited. The state trustees may bring a claim for natural resource damages pursuant to their authority under the Oil Pollution Act of 1990 (OPA), 33 United States Code Annotated, sec.2701 et seq, or under OSPRA, sec.40.107. The state trustees may utilize the natural resource damage assessment procedures established under the rule or under the rules adopted pursuant to OPA, or a combination of procedures drawn from both OPA and OSPRA rules. Whether the state trustees utilize OPA procedures or a combination of OSPRA and OPA procedures, they will perform the field investigation as described in sec.20.30 of this title (relating to Natural Resource Damage Assessments). The state trustees, when utilizing some or all of the OPA procedures, will encourage the federal trustees, as defined in sec.20.10 of this title (relating to Definitions), to invite the responsible party to participate in the process pursuant to the procedure in sec.20.23 of this title (relating to Responsible Person Participation). sec.20.3. Usage. As used in these rules, words in the singular also include the plural and words in the masculine gender also include the feminine and vice versa, as the case may require. Any reference to "days" in this chapter shall refer to calendar days. sec.20.10. Definitions. The following words, terms and phrases, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Acquisition of equivalent-The acquisition of a natural resource that provides services substantially equivalent to those injured as the result of an unauthorized discharge of oil. Area Contingency Plan-The contingency plan required by the Federal Water Pollution Control Act, (33 United States Code Annotated, sec.1321(j)(4)). Assessment or natural resource damage assessment -The process of collecting, compiling and analyzing information through prescribed procedures and protocols to determine damages for injuries to natural resources and any loss in the services provided by the natural resources resulting from an unauthorized discharge of oil. Assessment area -The area or areas within which natural resources and the services they provide have been affected directly or indirectly by the unauthorized discharge of oil. Center-The Center for Public Policy Dispute Resolution and any successor entity established by the University of Texas providing statewide assistance and expertise to government agencies and courts for the design and implementation of alternative dispute resolution processes. Coastal Protection Fund (CPF)-The fund established by the OSPRA, sec.40.151. Coastal waters -The waters and bed of the Gulf of Mexico within the jurisdiction of the State of Texas, including the arms of the Gulf of Mexico subject to tidal influence, and any other waters contiguous thereto that are navigable by vessels with a capacity to carry 10,000 gallons or more of oil as fuel or cargo and as further defined in sec.19.2(a)(1) of this title (relating to Definitions). Commissioner-The commissioner of the Texas General Land Office. Comprehensive damage assessment-A method including sampling, modeling, and other appropriate scientific procedures to make a reasonable and rational determination of injury to natural resources resulting from an unauthorized discharge of oil. Cost-effective-When two or more activities provide the same or a similar level of benefits, the one which costs the least is cost-effective. Damages-With respect to natural resources, includes the cost to assess, restore, rehabilitate, replace and/or acquire the equivalent of injured natural resources, or to mitigate further injury, and their diminution in value after such restoration, rehabilitation, replacement, or mitigation. Discharge of oil-An intentional or unintentional act or omission by which harmful quantities of oil are spilled, leaked, pumped, poured, emitted, or dumped into or on coastal waters or at a place adjacent to coastal waters where, unless controlled or removed, an imminent threat of pollution to coastal waters exists. Ecological services -The services provided by natural resources to each other and includes, but is not limited to, water purification, flood control, erosion control, shelter, food supply, and reproductive habitats. Expedited damage assessment-A method selected by the state trustees that allows for prompt initiation of restoration, replacement, rehabilitation, and/or acquisition of an equivalent natural resource without lengthy analysis of the impact on affected natural resources and which may utilize limited, focused field and/or laboratory studies related to injured natural resources. Exposure-When all or part of a natural resource is or may be in physical contact with oil or with media containing oil or its degradation products. Federal fund-The Oil Spill Liability Trust Fund established by the Internal Revenue Code of 1986, 26 United States Code, sec.9509. Federal trustee -Officials of the federal government designated, according to OPA, sec.2706(b)(2), as trustees and also includes, for the purposes of the rules, indian tribes and foreign governments which may present a claim for and recover damages for injury to natural resources. Field investigation -An evaluation of the area impacted by an unauthorized discharge of oil to determine the actual and potential exposure of natural resources and the impact on natural resources and the services they provide for the purpose of evaluating which damage assessment methods, if any, should be utilized by state trustees. Harmful quantity -A quantity of oil that has created a sheen or film on coastal waters or that has been deposited as a sludge or emulsion in, on or under coastal waters. Incident-Any unauthorized discharge of oil or series of unauthorized discharges of oil having the same origin, involving one or more vessels, facilities, or any combination thereof. Injury-Any measurable adverse change, either long or short term, in the chemical or physical quality or the viability of a natural resource or any loss of a service provided by that resource resulting either directly or indirectly from exposure to an unauthorized discharge of oil. Lead administrative trustee-The state trustee responsible for compiling the assessment record and for coordinating activities of the state in the natural resource damage assessment process. Limited observable mortality-A determination that, in the best professional judgment of the state trustees, the mortality of natural resources from exposure to oil is not extensive or severe. Loss-A measurable adverse reduction in the chemical or physical quality or the viability of a natural resource or a reduction in a service provided by a natural resource resulting either directly or indirectly from exposure to an unauthorized discharge of oil. Mediation-The process defined in the Texas Civil Practice and Remedies Code, sec.154.023. National Contingency Plan-The federal regulations for response to oil spills and releases of hazardous substances, published at the Code of Federal Regulations, Title 40, Part 300. Natural recovery -The process through which injured resources and their services recover, without additional human intervention. Natural resources -All land, fish, shellfish, fowl, wildlife, biota, vegetation, air, water, groundwater, and other similar resources owned, managed, held in trust, regulated, or otherwise controlled by the State of Texas. Negotiated assessment -Any assessment method agreed to by the state trustees and the responsible person. Oil-Oil of any kind or in any form, including but not limited to crude oil, petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes other than dredged spoil, but does not include petroleum, including crude oil or any fraction thereof, which is specifically listed or designated as a hazardous substance under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 United States Code Annotated, sec.9601(14)(A)-(F), and which is subject to the provisions of that Act. OSPRA-The Oil Spill Prevention and Response Act, Texas Natural Resources Code, Chapter 40. OPA-The Oil Pollution Act of 1990, 33 United States Code Annotated, sec.2701 et seq. Passive use values-The values a person places on natural resources which are not derived from direct use of those resources. These values include the value derived from: the knowledge of the existence of the resource and its protection; the availability of the resource for the use of a person, a person's family and other members of the public; and the knowledge that the resources will be available for future generations. Pathway-Any physical, biological or chemical link that connects a natural resource to an unauthorized discharge of oil. Pre-discharge condition -The condition or conditions of the natural resources and the level of services provided by those resources before the unauthorized discharge of oil. Pre-discharge condition may be measured by use of a reference area or a reference resource or by analysis of historical data. Properties of oil-The persistence, degradability, dispersability, toxicity, bioaccumulative effects, and any other characteristics relevant to a particular unauthorized discharge of oil. Public use-The services provided by natural resources for human activities; this includes, but is not limited to, cultural, archaeological, transportation, public water supply, industrial water supply, swimming, fishing, harvesting of natural resources, nature viewing, hunting, diving, sailing, boating, hiking, camping, climbing, photographing, drawing, painting, and other human activities. Recovery-The return of the injured natural resource and service to its pre- discharge or comparable condition within the constraints of natural or other variability. Reference area or reference resource-An area or natural resource, unaffected by the relevant unauthorized discharge of oil, and comparable in physical, chemical and biological characteristics or in the level of services provided by the assessment area or natural resource. Rehabilitation-Those actions which enhance the recovery of injured natural resources but do not return them to pre-discharge conditions. Replacement-Substituting natural resources at or near the impacted area to compensate for the loss of natural resources due to an unauthorized discharge of oil. Responsible person - (A) the owner or operator of a vessel or facility from which an unauthorized discharge of oil emanates or threatens to emanate; and (B) in the case of an abandoned vessel or facility, the person who would have been responsible immediately prior to the abandonment; and (C) any other person who causes, allows or permits an unauthorized discharge of oil or threatened unauthorized discharge of oil. Restoration-Those actions that return injured natural resources and the services they provide to their pre-discharge or comparable condition. Restoration plan -A plan selected after public review and comment which describes the required restoration, replacement, rehabilitation, and/or acquisition of equivalent natural resources. Services or natural resource services-The physical, ecological, biological, chemical, aesthetic, cultural, and public uses provided by natural resources. State Coastal Discharge Contingency Plan-The plan required by OSPRA, sec.40.053. State On-Scene Coordinator (SOSC)-The person of the Texas General Land Office to coordinate all state response actions for the abatement, containment, and removal of pollution resulting from an unauthorized discharge of oil. State trustee or trustee-The Texas General Land Office, Texas Parks and Wildlife Department, and the Texas Natural Resource Conservation Commission. Technically feasible -The technology and management skills necessary to implement an assessment plan or restoration plan are known such that each element of the plan has a reasonable chance of successful completion in the applicable time period as defined in sec.20.34(b) of this title (relating to Comprehensive Damage Assessment) and sec.20.33(a) of this title (relating to Expedited Damage Assessment). Unauthorized discharge of oil-Any discharge of oil, or any discharge of oil emanating from a vessel into waters adjoining and accessible from coastal waters, that is not authorized by a federal or state permit. 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 27, 1994. TRD-9448770 Gary Mauro Commissioner General Land Office Effective date: October 19, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 305-9129 Subchapter B. State Trustee Response, Organization, and Coordination 31 TAC sec.sec.20.20-20.23 The new sections are adopted pursuant to the Texas Natural Resource Code, sec.40.107(c)(4), which requires the commissioner of the GLO to adopt administrative procedures and protocols for the assessment of natural resource damages from an unauthorized discharge of oil. sec.20.23. Responsible Person Participation. (a) Pre-spill activities. Potentially responsible persons may contribute to the development of the natural resources inventory (OSPRA, sec.40.107(c)(1)-(3)) and in the identification of natural resources most at risk from an unauthorized discharge of oil. Potentially responsible persons may assist the state trustees in identifying protective measures to be utilized in responding to unauthorized discharges of oil, and in identifying personnel and organizations likely to participate in response and assessment activities. (b) Participation by the responsible person in assessments conducted under these rules. The state trustees shall invite the responsible person to participate in the assessment process, the preliminary field investigation, the selection of assessment methods, the restoration plan, and post-assessment activities. The state trustees may limit or terminate the participation of the responsible person when such participation is inconsistent with the responsibilities of the state trustees. (c) Participation by the responsible person in assessments not conducted under these rules. When the state trustees conduct an assessment employing procedures and protocols other than those provided for in these rules, the responsible person shall be invited to participate as consistent with subsection (b) of this section. (d) Assessment data. The state trustees shall provide, upon the written request of the responsible person, photographs, split samples, and final data utilized and discovered by the state trustees during the natural resource damage assessment and the implementation of any restoration plan. The responsible person shall provide, upon the written request of the state trustees, photographs, split samples, and final data utilized and discovered during the natural resource damage assessment and the implementation of any restoration plan. (e) Stipulations. Any assessment conducted with the participation of the responsible person shall include any stipulations agreed to by the responsible person and the state trustees. Stipulations may be proposed by either the responsible person or the state trustees at any time during the assessment. The stipulations shall survive, and shall be binding on all parties, after termination of the responsible person's participation or after the termination of a negotiated assessment. (f) Limitation on participation by responsible person. Whenever the state trustees agree that the responsible person is interfering with their responsibilities or is causing unreasonable delay in the assessment process, the state trustees may proceed without the participation of the responsible person. The state trustees shall provide the responsible person with a written statement, which they shall include in the assessment record, describing the factual basis for disallowing further participation by the responsible person. The responsible person may rejoin the assessment process or participate without limitation if the responsible person: (1) makes a showing that the dilatory or disruptive practices will not reoccur; and (2) performs corrective actions if requested by the trustees. 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 27, 1994. TRD-9448771 Gary Mauro Commissioner General Land Office Effective date: October 19, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 305-9129 Subchapter C. Natural Resource Damage Assessments 31 TAC sec.sec.20.30-20.36 The new sections are adopted pursuant to the Texas Natural Resource Code, sec.40.107(c)(4), which requires the commissioner of the GLO to adopt administrative procedures and protocols for the assessment of natural resource damages from an unauthorized discharge of oil. sec.20.32. Assessment Procedures and Protocols for Determining, Quantifying and Valuing Natural Resource Injury and Loss of Services. (a) The state trustees may utilize any reliable incident-specific methods and procedures including, but not limited to, those listed in this section to determine and quantify injury to and loss of services of natural resources. In selecting the appropriate assessment procedures and protocols, the state trustees shall consider the unique characteristics and the location of the natural resources affected by the unauthorized discharge of oil, including adverse impacts caused by response activities, if any. The methods identified in this section shall be designed to ensure that the cost of any restoration, rehabilitation, replacement or acquisition project shall not be disproportionate to the value of the natural resource before the injury. Any assessment generated by the state trustees shall be reasonable and the costs of conducting the assessment shall have a rational connection to the value of the injured resources. (b) The state trustees may find injury to a natural resource when: (1) the natural resource was exposed to oil from an unauthorized discharge; and (2) there was a pathway between the natural resource and the discharged oil; and (3) reliable methodologies indicate adverse effects on natural resources resulting from exposure to discharged oil; or (4) the natural resource was adversely impacted by response activities. (c) The state trustees may find a loss of services when: (1) the ability of the natural resource to provide ecological services has been reduced as the result of an unauthorized discharge of oil; or (2) the ability of the natural resource to provide public uses has been reduced as the result of an unauthorized discharge of oil. (d) The procedures and protocols to determine and quantify injury and loss of services of natural resources may include: (1) sampling of surface waters for temperature, pH, total suspended solids, salinity, dispersion and other parameters relevant to the fate and effects of oil and its degradation constituents; (2) sampling of sediments and shoreline materials for reference and for oil and its degradation constituents; (3) sampling of biota to determine bioaccumulation, acute toxicity, chronic toxicity, reproductive effects, community structure, and other relevant parameters; (4) analysis of the properties of the discharged oil; (5) an evaluation of the observable mortality and the potential for acute and chronic effects; (6) surveys of special protection or management areas, state and federal wildlife refuges, parks, habitats of threatened and endangered species, and other relevant natural areas; (7) photography, ground truthing, and other appropriate methods to delineate the assessment area; (8) reviews of relevant and reliable prior studies in scientific and economic literature and appropriate extrapolations therefrom; (9) studies to determine the actual and potential mortality, and biological and behavioral impacts of the unauthorized discharge of oil on biota; (10) collection of data and surveys to measure the loss of ecological and public uses; (11) toxicity testing of the discharged oil to measure impacts on biota actually located in the assessment area; (12) studies to determine the natural rate of recovery of injured resources considering seasonality, cumulative impacts and natural variations; (13) techniques to identify functions and values of injured natural resources and their public uses and ecological services; (14) reliable cost estimates of alternative restoration plans; and (15) any other reliable techniques to determine injury and damages to natural resources and appropriate assessment methods. (e) The state trustees shall value the injury to natural resources and any loss of services as a result of an unauthorized discharge of oil utilizing the following valuation methods and criteria: (1) state trustees shall ensure that no double counting of damages for injuries or loss of services results from the valuation methodology or methodologies employed; (2) where more than one valuation method is used, the state trustees shall document each natural resource injury and loss of services that each valuation methodology measures; (3) valuation shall be conducted on an incident-specific basis for the unauthorized discharge of oil. The state trustees shall utilize methods that provide appropriate, valid and reliable resource values for the injuries associated with the unauthorized discharge of oil. (f) The incident-specific valuation methods utilized by the state trustees may include, but are not limited to, the following: (1) Fish and wildlife. The Texas Parks and Wildlife Department's guidelines for measuring the monetary value of fish and wildlife resources (as defined in sec.sec.69.20-69.31 of this title, relating to Fish and Wildlife Values) may be used to value the loss of fish and wildlife resources. (2) Recreational services. The travel cost method may be used to estimate the value of recreational services provided by natural resources affected by the unauthorized discharge of oil. The valuation shall be based on information on the number and costs of recreational visits to or near the site. (3) Factor income method. When a lost or injured resource and/or service is an input to a production process, the factor income methodology may be used. This methodology may be used to estimate the change in economic rent attributable to the injured natural resource or lost service as the result of the unauthorized discharge of oil. When the price of the good being produced is not affected by the injuries to natural resources or the loss of their services, then the change in economic rent is simply the sum of the changes in factor costs for each affected input. (4) Hedonic price method. The hedonic method relates the price of a marketed commodity, such as real property, to its attributes, such as the quality of the surrounding environment or access to environmental amenities. Where services provided by natural resources, such as water quality or air quality, function as attributes of real property or other market goods, the hedonic price method may be used to determine the value of the change in services for the public. (5) Market price. (A) For natural resources traded in markets, the state trustees may utilize the changes in market supply and demand for the natural resource. The measure of damages to consumers of the natural resource is the difference between the price of the marketed resource with and without the injury. (B) Where the supply of the natural resources is fixed, then the observed change in market price may be used as a proxy for damages per unit of affected natural resource. The measure of damages is the difference between the market with and without the injury. (C) Appraisal prices may be utilized when market price is not readily determinable. When this method is used, the damages should be measured, to the extent possible, by uniform generally acceptable appraisal standards, and any appropriate federal and state appraisal manuals. (6) Habitat or species replacement cost method. The habitat or species replacement cost method involves estimating the damages in terms of the cost of obtaining from alternative sources the equivalent of the injured resources. As appropriate, damages may be calculated as the cost of replacing entire habitats that support multiple species and provide a variety of resource services. The quality and the quantity of the resources replaced can be measured by the loss of services occasioned from the onset of the unauthorized discharge of oil through the full recovery of the injured resources and the restoration of the services. In applying this method, the state trustees should: (A) quantify a total discounted measure of the lost services over the full duration of the injury, taking into account the extent to which the resource and/or service will recover over time; (B) determine the total discounted measure of services provided by the restoration or replacement project over the full life of the relevant species or habitat; (C) calculate the appropriate scale of the restoration or replacement project, such that the total discounted services provided is equivalent to the total discounted value of interim lost services; and (D) estimate the cost of implementing the restoration or replacement project. (7) Benefit transfer method. The benefit transfer method involves the application of existing valuation point estimates or valuation function estimates and data that were developed in one context to value a similar resource and/or service affected by the unauthorized discharge of oil. When using benefits transfer, the state trustees should consider: (A) the comparability of the users and of the resource and/or services being valued in the initial studies and the changes resulting from the discharge of concern; (B) the comparability of the change in quality or quantity of resources and/or services in the initial studies and the ones affected by the unauthorized discharge of oil of concern; and (C) the quality of the studies being used for the transfer. (8) Contingent valuation method. The state trustees may use the contingent valuation method to estimate loss in passive use values that result from an unauthorized discharge of oil. The state trustees shall ensure that contingent valuation instruments are designed and administered in accordance with the recommendations and guidance provided in the Report of the National Oceanic and Atmospheric Administration (NOAA) Panel on Contingent Valuation , as published in the Federal Register (58 FR 4601), January 15, 1993. (g) When discounting or compounding, the state trustees shall use the following methods: (1) For costs of assessment and restoration costs already incurred, the state trustees shall use the actual nominal United States Treasury rates for the past periods over which the costs were incurred to calculate the present value of these costs at the time the claim is presented to the responsible person. (2) For diminution in value of injured or lost resources or lost resource function, the state trustees shall use a discount rate equal to the real United States Treasury rate of comparable maturity to the duration of the natural resource injury. These rates are published in regular updates to Appendix C of the Office of Management and Budget Circular A-94. The trustees shall use the most recent update to this circular published prior to the date at which the claim is presented. (3) For estimated restoration costs, the state trustees shall use a discount rate equal to the United States Treasury rate of comparable maturity to the period over which the restoration will be carried out. (h) The state trustees are entitled to pre-judgement interest and post- judgement interest on natural resource damage claims at a rate equal to the nominal dealer commercial paper rate, as published in the Wall Street Journal, on the date the claim is presented to the responsible person, compounded forward from 30 days from the date a damage claim is presented until the time of payment. sec.20.36. Plans for Restoration, Rehabilitation, Replacement and/or Acquisition of the Equivalent of Injured Natural Resources. (a) General. The state trustees shall develop and implement a plan for the restoration, replacement, rehabilitation and/or acquisition of the equivalent natural resources. (b) Requirements. Each restoration plan developed by state trustees shall: (1) include an analysis of a natural recovery alternative and other appropriate alternative restoration plans; (2) be cost-effective and technically feasible; (3) not have costs disproportionate to the value of the natural resources and the services provided by the resources prior to the unauthorized discharge of oil; (4) allow for corrective revisions in the execution of the restoration plan; (5) provide for a period of monitoring sufficient to determine the effectiveness of the plan; and (6) be available for public review and comment for at least 30 days prior to initiation of the plan. (c) Procedure. The restoration plan may be developed simultaneously with other portions of the damage assessment. (1) When the state trustees conduct an expedited damage assessment, restoration plans should be developed as early in the process as practicable. (2) When the state trustees conduct a comprehensive damage assessment, restoration plans may be developed in phases. Phased restoration plans may be utilized when: (A) state trustees determine that pilot projects are necessary to establish the feasibility of the restoration plan; (B) natural recovery is the chosen alternative for some, but not all, of the injured natural resources; or (C) there is a potential for continuing injury resulting from the unauthorized discharge of oil. (3) The restoration plan may include any combination of restoration, rehabilitation, replacement and/or acquisition of equivalent natural resources to ensure full compensation for injured natural resources. (d) Certification of completion. The state trustees, exercising their best professional judgment, shall establish criteria for determining when a restoration plan is completed. (1) The state trustees, when determining whether restoration is complete, shall consider: (A) performance standards and appropriate measures for their achievement; (B) natural changes occurring in reference areas; and (C) ability of the natural resources to maintain their viability without further human intervention. (2) The state trustees shall issue a certificate of completion to the responsible person when no further actions are necessary to achieve the goals of the restoration plan. (e) Equivalent resource plans. If an equivalent resource plan has been developed for the ecosystem encompassing the injured natural resources, the state trustees may utilize the restoration projects identified in that plan for purposes of compensating for the injuries resulting from a particular unauthorized discharge of oil. (1) Public participation. The state trustees, when selecting a restoration project from the equivalent resource plans developed pursuant to this section, shall submit the project for public review and comment according to sec.20.44(c) of this title (relating to Public Review and Comment). (2) Criteria for use of equivalent resource plan project. The state trustees may select a project from the equivalent resource plan when the state trustees, in consultation with the responsible person, determine that: (A) there is an ecological relationship between the injured resources and the objectives of the particular project; (B) the direct, on-site, in-kind restoration of the injured resources is not technically feasible or cost-effective; and (C) utilization of an equivalent resource plan project will result in a level of services substantially similar to those lost as the result of the unauthorized discharge of oil. 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 27, 1994. TRD-9448769 Gary Mauro Commissioner General Land Office Effective date: October 19, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 305-9129 Subchapter D. Administration 31 TAC sec.sec.20.40-20.44 The new sections are adopted pursuant to the Texas Natural Resource Code, sec.40.107(c)(4), which requires the commissioner of the GLO to adopt administrative procedures and protocols for the assessment of natural resource damages from an unauthorized discharge of oil. sec.20.41. Recovery of Damages. (a) In an action filed pursuant to the Oil Spill Prevention and Response Act (OSPRA), Texas Natural Resources Code, sec.40.107, the state trustees may recover: (1) the costs of the assessment, including, but not limited to: (A) salary, fringe benefits, overhead, release, and transportation, lodging and state per diem costs; (B) the costs of sampling and analyses of oil and natural resources, including reference areas; (C) the costs of laboratories, contractors, and other experts retained by the state trustees in assessing injury and determining damages; (D) the cost of the mediation required by sec.20.43 of this title (relating to Mediation); and (E) any other costs incurred in carrying out state trustee functions for assessing natural resource damages and for developing, implementing and monitoring plans for the restoration, rehabilitation, and/or acquisition of the equivalent of damaged resources; (2) the costs of restoration, rehabilitation, replacement and/or acquisition of equivalent resources in compensation for the injury to natural resources sustained as the result of an unauthorized discharge of oil; (3) the costs to mitigate further injury to natural resources from the time of the initial discharge until the time of restoration of the injured natural resources and the services they provide; (4) the diminution in value of the natural resources and the services they provide from the time of the unauthorized discharge of oil and during and after their restoration, replacement, rehabilitation, and/or acquisition of equivalent resources; (5) fees, economic rent or any payments collectible by the state trustees for the use of the natural resource by a private party; and (6) all costs that have a rational connection to the assessment and are incurred in the performance of the assessment, and the development, implementation, and monitoring of the restoration plan. (b) Separate reimbursement. The responsible person shall reimburse assessment costs to each state trustee separately. (c) Limitation on liability. If a responsible person is entitled to a limitation of natural resource damages liability, then any recovery under OSPRA, sec.40.107, shall be limited as provided in OSPRA, sec.40.203. (d) Coastal Protection Fund (CPF) liability. The CPF is absolutely liable for all natural resource damages assessed as the result of injuries caused by an unauthorized discharge of oil into coastal waters. In the event that the responsible person does not reimburse state trustees, the trustees shall be reimbursed from the CPF pursuant to this subsection. (1) State trustee costs. (A) State trustees may recover from the CPF all costs incurred responding to an unauthorized discharge of oil and in assessing damages resulting from injuries to natural resources caused by an unauthorized discharge of oil into coastal waters. (B) State trustees must submit directly to the commissioner satisfactory proof of costs incurred. Satisfactory proof of costs is compliance with the procedures prescribed by and according to the rules of the comptroller of public accounts of the State of Texas. The commissioner will recommend that the comptroller make payment to the state trustees for their assessment costs. (2) Damages for injuries to natural resources. In the event the responsible person fails to pay a natural resource damage assessment claim, the state trustees may present the claim to the CPF for the costs of actions to restore, rehabilitate, replace and/or acquire the equivalent of injured natural resources and for the costs to mitigate injuries to natural resources resulting from an unauthorized discharge of oil pursuant to this subsection. (3) CPF liability and limitation. (A) CPF liability. Any damages for injuries to natural resources in excess of the liability limits of OSPRA, sec.40.203, are payable by the CPF pursuant to this subsection. The CPF is liable when: (i) the federal fund denies the claim; or (ii) the amount of the claim paid by the federal fund is not sufficient to restore, rehabilitate, replace and/or acquire the equivalent of the injured natural resources. (B) Limitation on CPF liability. If subparagraph (A) of this paragraph applies, then the CPF shall be liable for further damages for restoration, rehabilitation, replacement and/or acquisition of the equivalent natural resources and for the mitigation of injuries to natural resources for a period of two years from the date the federal fund grants or denies the claim. (4) Reimbursement to the CPF. The commissioner shall diligently seek reimbursement to the CPF. The commissioner shall seek reimbursement from the responsible persons, the federal fund and any other person who is liable under OSPRA for all expenditures from the CPF, when the CPF has paid a natural resource damage assessment claim. When state trustees have recovered damages from the CPF, the commissioner shall be subrogated to all rights or causes of action of the trustees. (e) Assessment claim. The state trustees shall present the assessment claim to the responsible person via hand delivery or United States Postal Service Return Receipt Requested Certified Mail. (f) Payment of assessment claim. Within 60 days of the presentation of an assessment claim by the trustees, the responsible person shall make full payment unless the assessment is in dispute and referred to mediation pursuant to OSPRA, sec.40.107(c)(7)(F). In the case of successful mediation, payment of the assessment claim shall be made within 60 days of the completion of the mediation unless otherwise agreed. (g) Pooling of recovered compensation. When monetary compensation is received by the state trustees as the result of payment of an assessment claim, the state trustees may use funds recovered from more than one assessment claim to execute a restoration project which meets the requirements of sec.20.36(e) of this title (relating to Equivalent Resource Plans). (h) Double recovery prohibited. The commissioner shall ensure that there is no double recovery for natural resource damages resulting from an unauthorized discharge of oil. 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 27, 1994. TRD-9448768 Gary Mauro Commissioner General Land Office Effective date: October 19, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 305-9129 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part III. Texas Youth Commission Chapter 87. Treatment Program Planning 37 TAC sec.87.1, sec.87.9 The Texas Youth Commission (TYC) adopts an amendment to sec.87.1 and sec.87. 9, concerning case planning and individual counseling, without changes to the proposed text as published in the August 16, 1994, issue of the Texas Register (19 TexReg 6417). The justification for amending the section is to provide a more efficient method of documenting treatment of TYC youth. The amendment will remove references to the CCF-135 Individual Counseling Record form that is no longer used to document progress reviews of Individual Case Plans and TYC youth counseling. Progress reviews and TYC youth counseling are now documented on the CCF-520 Chronological Record form. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, sec.61.034, which provides the Texas Youth Commission with the authority to make rules appropriate to the proper accomplishment of its functions. The proposed rule implements the Human Resource Code, sec.61.034. 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 27, 1994. TRD-9448716 Steve Robinson Executive Director Texas Youth Commission Effective date: October 18, 1994 Proposal publication date: August 16, 1994 For further information, please call: (512) 483-5244 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 15. Medicaid Eligibility Subchapter E. Income 40 TAC sec.15.465 The Texas Department of Human Services (DHS) adopts an amendment to sec.15. 465, concerning income exclusions, in its Medicaid Eligibility rule chapter. The purpose for the amendment is to comply with a policy clarification issued by the Health Care Financing Administration based on federal regulations for the Supplemental Security Income program, effective July 1, 1994, that Veterans Administration (VA) aid-and-attendance allowances, housebound allowances, and VA reimbursement for unusual medical expenses are not countable income for eligibility or applied income purposes. The amendment will function by making DHS's Medicaid Eligibility rules consistent with federal regulations. 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; and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment is adopted to be effective July 1, 1994, to comply with federal requirements. The amendment implements the Human Resources Code, sec. sec.22.001-22.024 and sec.sec.32.001-32.042. sec.15.465. Income Exclusions. (a)-(d) (No change.) (e) VA aid-and-attendance exclusion. The following requirements apply: (1) The department excludes aid-and-attendance allowances, housebound allowances, and VA reimbursement for unusual medical expenses in the income eligibility determination and applied income calculation because they represent medical expenses paid by a third party. (2) (No change.) (f) (No change.) (g) Housebound allowances. The department excludes VA housebound allowances in the eligibility determination and applied income processes because they represent medical expenses paid by a third party. Veterans and widow(ers) who do not qualify for regular aid and attendance may qualify for a housebound allowance. Housebound allowances are usually received only by an individual living in the community. (h) (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 27, 1994. TRD-9448739 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: July 1, 1994 Proposal publication date: N/A For further information, please call: (512) 450-3765 Chapter 47. Primary Home Care The Texas Department of Human Services (DHS) adopts amendments to sec.sec.47. 1901, 47.1903, 47.1904, 47.2901, 47.2903-47.2908, 47.2911, 47.2912, 47.2914, 47.3901, 47.3906, 47.3908, 47.4904, and 47.6901; adopts the repeal of sec.47. 4903; and adopts new sec.47.4905 in its Primary Home Care chapter. The amendment to sec.47.3906 is adopted with changes to the proposed text as published in the August 19, 1994, issue of the Texas Register (19 TexReg 6536). The amendments to sec.sec.47.1901, 47.1903, 47.1904, 47.2901, 47. 2903-47.2908, 47.2911, 47.2912, 47.2914, 47.3901, 47.3908, 47.4904, and 47. 6901, the repeal of sec.47.4903, and new sec.47.4905 are adopted without changes to the proposed text and will not be republished. The justification for the proposal is to allow primary home care provider agencies to apply to provide family care services as a second service under the primary home care program; add policy related to the provision of family care services; and make editorial changes to some rules. Also in this issue of the Texas Register, DHS is adopting the repeal of Chapter 53, Family Care Program. The proposal will function by providing family care clients a choice of provider agencies. No comments were received regarding adoption of the proposal. The department, however, is adopting sec.47.3906 with two changes that were included in a previous adoption but overlooked on this proposal. The department has deleted sec.47.3906(h)(15) and added sec.47.3906(i)(6). General Provisions and Services 40 TAC sec.sec.47.1901, 47.1903, 47.1904 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; and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendments implement the Human Resources Code, sec. sec.22.001-22.024 and sec.sec.32.001-32.041. 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 27, 1994. TRD-9448738 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Service Requirements 40 TAC sec.sec.47.2901, 47.2903-47.2908, 47.2911, 47.2912, 47. 2914 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; and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendments implement the Human Resources Code, sec. sec.22.001-22.024 and sec.sec.32.001-32.041. 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 27, 1994. TRD-9448737 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Claims Payment 40 TAC sec.sec.47.3901, 47.3906, 47.3908 >>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; and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendments implement the Human Resources Code, sec. sec.22.001-22.024 and sec.sec.32.001-32.041. sec.47.3906. Claims Payment Reviews and Audits. (a) Service delivery records. The provider agency must use the Texas Department of Human Services' (DHS's) service delivery record form to document services delivered, unless it obtains written approval from the department's assistant commissioner for provider systems to use a different timesheet. The provider agency must not preprint or pre-enter the time in, time out, total time, or monthly total of hours in the record of time portion of any timesheet. (b)-(e) (No change.) (f) Documentation errors. Documentation errors may cause claims for services to be disallowed. (1) Two types of documentation errors may cause monetary exceptions. (A) Administrative errors. Administrative errors result in exceptions applied to the administrative portion of the unit of service. An exception of 17% of the paid unit rate is the administrative portion applied to the unit of service. (B) (No change.) (2)-(3) (No change.) (g) (No change.) (h) List of administrative errors. Administrative errors include, but are not limited to, the following. (1) The provider agency leaves the month and year of service blank at the top of the timesheet, but the month and year can be verified elsewhere on the timesheet. The department applies the error to the total number of units reimbursed for the pay period. (2) The attendant completes the time in and time out columns, but leaves the daily total time column blank, and the timekeeper fails to enter the daily total time based on the attendant's entry. The department applies the error to the total number of units reimbursed for the days left blank. (3) The timekeeper fails to enter a date of signature to certify the total number of hours the attendant worked. The department applies the error to the total number of units reimbursed for the pay period. (4) The timekeeper corrects the date of signature, but fails to initial the correction. The department applies the error to the number of units reimbursed after the earliest signature date. (5) The timekeeper enters an illegible date of signature or makes an illegible correction to the date. The department applies the error to the total number of units reimbursed for the pay period. (6) The timekeeper enters a date of signature that is before the date of the last day services are delivered. The department applies the error to the total number of units reimbursed after the signature date. (7) The timekeeper fails to sign the timesheet. The department applies the error to the total number of units reimbursed for the pay period. (8) The timekeeper uses a signature stamp, but fails to initial the stamped signature. The department applies the error to the total number of units reimbursed for the pay period. (9) The attendant and/or timekeeper uses liquid paper/correction fluid to correct an entry in the record of time, signature, or date portion of the timesheet. The department applies the error to the total number of units reimbursed for the pay period. (10) The attendant and/or timekeeper makes an illegible entry in or an illegible correction to any portion of the record of time column. The department applies the error to the total number of units reimbursed for the days in which entries are illegible. (11) The attendant fails to initial an increase in the daily total time or the monthly total of hours for the pay period. The department applies the error to the number of units reimbursed in excess of the original entry. (12) The attendant fails to sign the timesheet. The department applies the error to the total number of units reimbursed for the pay period. (13) The provider agency uses a timesheet that has not been approved by the department. The department applies the error to the total number of units reimbursed while using an unapproved timesheet. (14) The department reimburses the provider agency for services, but a valid prior approval/confirmation of services form is missing for the period reimbursed by the agency. The department applies the error to the total number of units reimbursed and not covered by a valid prior approval/confirmation of services form. (i) List of financial errors. In the absence of acceptable secondary documentation, financial errors include, but are not limited to, the following. (1) The department reimburses the provider agency for services, but the timesheet is missing for the period for which services are reimbursed. The department applies the error to the total number of units reimbursed for the pay period. (2) The attendant leaves the entire record of time column blank. The department applies the error to the total number of units reimbursed for the pay period. (3) The department reimburses the provider agency for hours that exceed the authorization given by the department. The department applies the error to the total number of units reimbursed in excess of the units authorized by the department. (4) The department reimburses the provider agency for hours that exceed the total number of hours recorded on the timesheet. The department applies the error to the total number of units reimbursed in excess of the units recorded on the timesheet. If the sum of the time in and time out does not equal the total time or if the sum of the daily totals of time does not equal the monthly total of hours on the timesheet, then the lesser of the two totals is used to calculate the total number of hours recorded on the timesheet. (5) The department reimburses the provider agency for units of service for days on which the client did not receive services or was Medicaid ineligible (not applicable to family care). The department applies the error to the total number of units reimbursed for the day on which the client did not receive services or was Medicaid ineligible (not applicable to family care) . (6) The provider agency makes a claim for services, but a valid physician's order is missing. The department applies the error to the total number of units claimed and not covered by a valid order. (j) The department reimburses the provider agency for any underpayments reflected in the audit reports. The department may withhold the reimbursement of an underpayment if the provider agency has an outstanding audit exception. 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 27, 1994. TRD-9448736 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Provider Contracts 40 TAC sec.47.4903 The repeal 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; and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The repeal implements the Human Resources Code, sec.sec.22.001-22.024 and sec.sec.32.001-32.041. 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 27, 1994. TRD-9448733 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 40 TAC sec.47.4904 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; and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements the Human Resources Code, sec. sec.22.001-22.024 and sec.sec.32.001-32.041. 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 27, 1994. TRD-9448735 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 40 TAC sec.47.4905 The new section 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; and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The new section implements the Human Resources Code, sec. sec.22.001-22.024 and sec.sec.32.001-32.041. 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 27, 1994. TRD-9448732 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Sanctions 40 TAC sec.47.6901 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; and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements the Human Resources Code, sec. sec.22.001-22.024 and sec.sec.32.001-32.041. 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 27, 1994. TRD-9448734 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Chapter 53. Family Care Program The Texas Department of Human Services (DHS) adopts the repeal of sec.sec.53. 101, 53.102, 53.201-53.204, 53.301, 53.302, 53.401-53.404, 53.501-53.504, and 53.601-53.603, without changes to the proposed text as published in the August 19, 1994, issue of the Texas Register (19 TexReg 6543). The justification for the repeals is to delete the family care program as a separate program, but allow primary home care provider agencies to apply to provide family care services as a second service under the primary home care program. Also in this issue of the Texas Register, DHS is adopting related amendments in Chapter 47, Primary Home Care. The repeals will function by providing family care clients a choice of primary home care provider agencies. No comments were received regarding adoption of the repeals. Program Definitions 40 TAC sec.53.101, sec.53.102 The repeals are adopted under the Human Resources Code, Title 2, Chapter 22, which provides the department with the authority to administer public assistance programs. The repeals implement the Human Resources Code, sec.sec.22.001-22.024. 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 27, 1994. TRD-9448731 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Contracting for Family Care Services 40 TAC sec.sec.53.201-53.204 The repeals are adopted under the Human Resources Code, Title 2, Chapter 22, which provides the department with the authority to administer public assistance programs. The repeals implement the Human Resources Code, sec.sec.22.001-22.024. 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 27, 1994. TRD-9448730 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Provider Agency Staff Requirements 40 TAC sec.53.301, sec.53.302 The repeals are adopted under the Human Resources Code, Title 2, Chapter 22, which provides the department with the authority to administer public assistance programs. The repeals implement the Human Resources Code, sec.sec.22.001-22.024. 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 27, 1994. TRD-9448729 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Service Delivery Requirements 40 TAC sec.sec.53.401-53.404 The repeals are adopted under the Human Resources Code, Title 2, Chapter 22, which provides the department with the authority to administer public assistance programs. The repeals implement the Human Resources Code, sec.sec.22.001-22.024. 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 27, 1994. TRD-9448728 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Claims 40 TAC sec.sec.53.501-53.504 The repeals are adopted under the Human Resources Code, Title 2, Chapter 22, which provides the department with the authority to administer public assistance programs. The repeals implement the Human Resources Code, sec.sec.22.001-22.024. 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 27, 1994. TRD-9448727 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Reviews and Audits of Provider Agency Records 40 TAC sec.sec.53.601-53.603 The repeals are adopted under the Human Resources Code, Title 2, Chapter 22, which provides the department with the authority to administer public assistance programs. The repeals implement the Human Resources Code, sec.sec.22.001-22.024. 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 27, 1994. TRD-9448726 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 1, 1994 Proposal publication date: August 19, 1994 For further information, please call: (512) 450-3765 Chapter 90. Nursing Facilities and Related Institutions Subchapter B. Application Procedures 40 TAC sec.90.17 The Texas Department of Human Services (DHS) adopts an amendment to sec.90. 17, concerning criteria for denying a license or renewal of a license, in its Nursing Facilities and Related Institutions rule chapter, with changes to the proposed text as published in the July 29, 1994, issue of the Texas Register (19 TexReg 5831). The justification for the amendment is to add to reasons a license may be denied, to delete a number of reasons a license may be denied, and clarify that multi-facility owners with poor history may not be licensed for additional facilities. The amendment will function by improving licensure application rules. During the public comment period, DHS received comments from New Avenues of Hope, Inc., the Texas Health Care Association, and Private Providers Association of Texas. The following is a summary of comments received and DHS's responses to the comments. Comment: Public providers (state schools, state centers, and mental health and mental retardation (MHMR) centers) are excluded from this rule. The rule appears to discriminate against the private provider. Response: Public providers are excluded by law from licensure requirements. A statutory change would have to occur to require public providers to be licensed. Comment: One of the reasons for denying a license, substantially failing to comply with the rules for nursing facilities or intermediate care facilities for the mentally retarded, is unclear and requires clarification. Response: The proposed amendment defines substantial failure as "including, but not limited to, noncompliance that poses a serious threat to health and safety, or a failure to maintain compliance on a continuing basis." DHS believes that the definition is sufficient. Comment: One of the newly proposed criteria for denying a license, "the applicant, manager, or affiliate aids, abets, or permits a substantial violation about which the applicant, manager,or affiliate had or should have had knowledge," is overly broad, contains no objective standards, and allows a tremendous amount of subjectivity. The phrase "should have had knowledge" is open-ended, open to interpretation, and should be omitted. Response: This criterion was developed to require management to be accountable for employees' actions. The phrase "should have had knowledge" is necessary to emphasize management's responsibility for all activities within a facility. The rule language is broad in order to cover the multitude of situations which can occur in long term care. Comment: The criterion, "disclosure of federal or state Medicare or Medicaid sanctions or penalties, including, but not limited to, vendor holds, monetary penalties, downgrading the status of a facility license, proposals to decertify, directed plans of correction, or the denial of payment for new Medicaid admissions, in the two-year period preceding the licensure application" is both overly broad and restrictive. A proposal to decertify is a proposal with no final administrative appeal and should be deleted. The term "downgrading the status of a facility license" is not a Medicare/Medicaid sanction or penalty and should be deleted. Response: A proposal to decertify is appealable; the rules regarding the appeal are found in sec.19.2209. In response to the comment regarding "downgrading the status of a facility license," DHS is adopting subsection (a) (6)(B) with a change to read, in part, disclosure of "federal or state nursing facility sanctions or penalties." Comment: Define "final actions." Response: "Final actions" is already defined in the rule, which states, "An action is final when routine administrative and judicial remedies are exhausted." DHS is adopting subsection (a)(6) with a change to reinstate subparagraph (E) "unsatisfied final judgments" which was proposed to be deleted from the list of reasons to deny a license. Upon further consideration, DHS believes this language should be retained. Also, DHS is adopting subsection (e) to read: "If an applicant for a new license owns multiple facilities, the overall record of compliance in all of the facilities will be examined. Denial of a new license will not preclude the renewal of licenses of other individual facilities with satisfactory records." The amendment is adopted under the Health and Safety Code, Chapter 242, which provides the department with the authority to regulate long-term care nursing facilities; and under Texas Civil Statutes, Article 4413 (502), historical note (Vernon Supplement 1993), 72nd Legislature, which transferred all functions, programs, and activities related to long-term care licensing, certification, and surveys from the Texas Department of Health to the Texas Department of Human Services. The amendment implements the Health and Safety Code, sec. sec.242.001-242.186. sec.90.17. Criteria for Denying a License or Renewal of a License. (a) The Texas Department of Human Services (DHS) may deny an initial license or refuse to renew a license if an applicant, manager, or affiliate: (1) substantially fails to comply with the requirements described in sec.90.41 and sec.90.42 of this title (relating to Standards for Nursing Facilities and Standards for Facilities Serving Persons with Mental Retardation), including, but not limited to: (A)-(B) (No change.) (2) aids, abets, or permits a substantial violation described in paragraph (1) of this subsection about which the applicant, manager, or affiliate had or should have had knowledge; (3) fails to provide the required information, facts and/or references; (4) provides the following false or fraudulent information: (A) knowingly submits false or intentionally misleading statements to DHS; (B)-(E) (No change.) (5) fails to pay the following fees, taxes and assessments when due: (A)-(D) (No change.) (6) discloses any of the following actions within the two-year period preceding the application: (A) (No change.) (B) federal or state nursing facility sanctions or penalties, including, but not limited to, vendor holds, monetary penalties, downgrading the status of a facility license, proposals to decertify, directed plans of correction, or the denial of payment for new Medicaid admissions; (C) (No change.) (D) unsatisfied final judgments; (E) eviction involving any property or space used as a facility in any state; or (F) suspension of a license to operate a health care facility, long term care facility, personal care facility, or a similar facility in any state. (b) Concerning subsection (a)(6) of this section, DHS may consider exculpatory information provided by the applicant, manager, or affiliate and grant a license under subsection (a)(6) if DHS finds the applicant, license holder, manager, or affiliate able to comply with the rules in this chapter. (c) DHS shall not issue a license to an applicant to operate a new facility if the applicant discloses any of the following actions during the two-year period preceding the application: (1) (No change.) (2) debarment or exclusion from the Medicare or Medicaid programs by the federal government or a state; or (3) (No change.) (d) Only final actions are considered for purposes of subsections (a)(6) and (c). An action is final when routine administrative and judicial remedies are exhausted. All actions, whether pending or final, must be disclosed. (e) If an applicant for a new license owns multiple facilities, the overall record of compliance in all of the facilities will be examined. Denial of a new license will not preclude the renewal of licenses of other individual facilities with satisfactory records. (f) DHS will not approve as meeting licensing standards new beds or the expansion of a facility serving persons with mental retardation or related conditions that participates in the medical assistance program under Title XIX of the Social Security Act, as provided by the Health and Safety Code, sec.222. 042, unless: (1) the new beds or the expansion was included in the plan approved by the Interagency Council on Intermediate Care Facilities for the Mentally Retarded (ICF/MR) in accordance with Health and Safety Code, sec.533.061; and (2) the Texas Department of Mental Health and Mental Retardation has approved the beds or the expansion for certification in accordance with Health and Safety Code, sec.533.065. (g) If DHS denies a license or refuses to issue a renewal of a license, the applicant or licensee may request an administrative hearing in accordance with sec.90.238 of this title (relating to Administrative Hearings). 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 27, 1994. TRD-9448725 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: November 15, 1994 Proposal publication date: July 29, 1994 For further information, please call: (512) 450-3765