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 16. ECONOMIC REGULATION
PART I. Railroad Commission of Texas
CHAPTER 3.Oil and Gas Division
Conservation Rules and Regulations
16 TAC sec.3.9, sec.3.46
The Railroad Commission of Texas (commission) adopts amendments to sec.3.9, 
relating to disposal wells, and sec.3.46, relating to fluid injection into 
productive reservoirs with changes to the proposed text as published in the June 
18, 1996 Texas Register (21 TexReg 5506). The amendments increase opportunities 
to obtain variances from area-of-review requirements. The amendments also revise 
mechanical integrity testing requirements and update the reference to the Texas 
Water Commission (now the Texas Natural Resource Conservation Commission); 
substitute in the place of references to the Director of Underground Injection 
Control language allowing the commission to designate staff to handle certain 
responsibilities; delete the requirements that a verbal report of a leak in a 
well be confirmed in writing within five working days; and delete the 
requirements that 15 days advance written notice of intended transfer of a 
permit be provided.
The commission amends sec.3.9(2) to change the name of the agency from which 
letters regarding endangerment of freshwater strata are obtained from the Texas 
Department of Water Resources to the Texas Natural Resource Conservation 
Commission. 
The commission amends both sec.3.9 and sec.3.46 to delete all references to 
"Director" or the "Director of Underground Injection Control" because that title 
was eliminated in connection with a recent reorganization of the commission. In 
place of the term "Director" or "Director of Underground Injection Control," the 
commission proposes to substitute the words "commission or its delegate" or 
"commission's delegate" as appropriate. 
The commission amends sec.3.9(4)(C)(i) and sec.3.46(c)(3)(A) to clarify that a 
hearing will be held upon protest of an application received within 15 days of 
receipt of the application or of publication, whichever is later.
The commission is deleting sec.3.9(5)(B)(i) and sec.3.46(d)(2)(A). These 
provisions required 15 days advance written notice of permit transfer; however, 
this notification is unnecessary because the Commission tracks transfer of 
disposal and injection well permits through its P-4 compliance system. The 
commission amends sec.3.9(6) and sec.3.46(e) to expand the bases upon which a 
variance from the area-of-review requirements of each rule may be granted, to 
allow variances to be granted on an areal basis in addition to an individual 
well basis, and to require that additional notice of an application for an areal 
variance be given. 
Specifically, the amendments allow the commission or its delegate to grant a 
variance from the area-of-review requirements upon proof that the variance will 
not result in a material increase in the risk of fluid movement into freshwater 
strata or to the surface. Factors that may be considered in granting such a 
variance include the area affected by pressure increases resulting from 
injection operations; the presence of local geological conditions that preclude 
movement of fluid that could endanger freshwater strata or the surface; or other 
compelling evidence that the variance will not result in a material increase in 
the risk of fluid movement into freshwater strata or to the surface. Other 
compelling evidence might include information indicating the absence of 
groundwater and low risk of breakouts. 
Except in the case of individual well variances sought on the basis of reservoir 
pressure increases, persons applying for an areal variance must publish notice 
of the application, in a form approved by the commission prior to publication, 
once in a newspaper of general circulation in the county or counties in which 
the variance would apply. Such notice must be at least three inches by five 
inches in size and must appear in a section of the newspaper containing state or 
local news items. 
A copy of the application for an areal variance must also be provided to the 
manager of any underground water conservation district the boundaries of which 
are within the area where the variance would apply, city officials if the 
variance would apply wholly or partially within the limits of an incorporated 
city, appropriate county officials, and such other persons as may be specified 
by the commission or its delegate. 
If no protest from an affected person is received during the public comment 
period on an application for a variance, the application may be granted 
administratively.
If a protest is received, or if the variance is denied administratively, the 
person or persons applying for the variance may request a hearing. A hearing on 
an application for a variance from the area-of-review requirements may also be 
held if the commission's delegate determines that a hearing would be in the 
public interest. 
Amendments to sec.3.9 and sec.3.46 also provide that an areal variance from the 
area-of-review requirements may be modified, terminated, or suspended after 
notice and opportunity for hearing is given to the affected operators. If a 
hearing on a proposed modification, termination, or suspension is held, any 
disposal or injection well permit applications filed after notice of the 
proposed modification, termination, or suspension is given and prior to the date 
of the final order must include the area-of- review information required in the 
absence of the areal variance. 
The commission amends sec.3.9(8)(A) and sec.3.46(g)(1) to include a definition 
of the term tubing. For purposes of sec.3.9 and sec.3.46, tubing refers to pipe 
through which injection may occur and that is neither wholly nor partially 
cemented in place. The commission is also deleting obsolete language relating to 
wells drilled after the original effective date of sec.3.9 and sec.3.46. 
The commission amends sec.3.9(10)(D) and sec.3.46(i)(4) by deleting the 
requirement that verbal leak reports be confirmed in writing within five working 
days. This requirement is unnecessary because, upon receipt of a verbal leak 
report, the commission will document the report by sending a letter to the 
operator directing that the well be shut in until the leak is repaired. 
The commission amends sec.3.9(11)(A) and sec.3.46(j)(1) to require that the test 
pressure for wells where injection occurs down casing equal the maximum 
permitted injection pressure or 200 psig, whichever is greater. The commission 
amends sec.3.9(11)(C) and sec.3.46(j)(3) to delete the example of monitoring 
injection rate/injection pressure relationships as an alternative to tubing-
casing annulus pressure monitoring. The commission also amends these provisions 
to require that, where tubing-casing annulus pressure monitoring is authorized 
as an alternative to five-year pressure tests, the well must be pressure tested 
at least once every ten years after January 1, 1990. 
The commission amends sec.3.9(11)(F) and sec.3.46(j)(6) to allow a reduction in 
the frequency of pressure tests required under existing permits. Where an 
existing permit requires pressure tests at six to 12 month intervals, the 
commission's delegate may, by letter of authorization, reduce the frequency of 
required tests provided that a test is required at least once every three years. 
The commission is deleting sec.3.9(14) which specifies the effective date of the 
section. This provision is no longer necessary. 
One commenter expressed support for updating the reference to the Texas 
Department of Water Resources in sec.3.9(2). This commenter also expressed 
support for substituting the term "commission or its delegate" or "commission's 
delegate" for "Director" or "Director of Underground Injection Control" in 
sec.3.9 and sec.3.46. No changes were made in response to these comments.
One commenter expressed support for the proposed changes to sec.3.9(4)(C)(i) and 
sec.3.46(c)(3)(A) which clarify that the 15-day protest period runs from the 
later of receipt of the application by the commission or publication of notice. 
No change was made in response to this comment. The commission notes, however, 
that it will continue to honor a protest to a disposal or injection well 
application filed more than 15 days after the permit is granted but prior to the 
date the permit is issued.
Three commenters expressed support for deletion of sec.3.9(5)(B)(i) and 
sec.3.46(d)(2)(A) which required 15 days advance written notice of a permit 
transfer. No changes were made in response to these comments. Five commenters 
expressed support for amending sec.3.9(6) and sec.3.46(e) to expand 
opportunities for obtaining variances from the area-of-review requirements of 
the rules. One of these commenters recommended that the word "incorporated" be 
inserted before "city" in the notice requirements found at sec.3.9(6)(D)(ii)(II) 
and sec.3.46(e)(4)(B)(ii). The commission agrees with this commenter and has 
revised the rules as recommended.
The commission has clarified the language of sec.3.9(6)(F) and sec.3.46(e)(6). 
The revised language clarifies that, if a hearing is held on a proposal to 
modify, terminate, or suspend an areal variance, any application filed after 
notice of hearing is issued and pending issuance of a final order must include 
the area-of-review information required in the absence of a variance. 
One commenter expressed support for the definition of "tubing" in sec.3.9(8)(A) 
and sec.3.46(g)(1). No change was made in response to this comment. 
Three commenters expressed support for eliminating the requirements of 
sec.3.9(10)(D) and sec.3.46(i)(4) for filing a written leak report once the leak 
has been verbally reported to the commission. No change was made in response to 
these comments. 
One commenter objected to the proposal to amend sec.3.9(11)(A) and 
sec.3.46(j)(1) to require that the test pressure for wells where injection 
occurs down casing equal the maximum permitted injection pressure or 200 psig, 
whichever is greater. This commenter felt that this change was not necessary 
because most casing injection wells are not operated at the maximum authorized 
injection pressure. One commenter indicated that this change was reasonable 
because the casing could experience maximum authorized injection pressure under 
normal operating conditions. The commission disagrees with the first commenter. 
This amendment is appropriate because the well is permitted to operate at the 
maximum authorized injection pressure and therefore the casing may experience 
that pressure under normal operating conditions. The universe of wells expected 
to be affected by this change is small because most disposal and injection wells 
are equipped with tubing and packer. No change was made in response to either of 
these comments. One commenter expressed support for eliminating the examples of 
monitoring injection rate/injection pressure relationships as an alternative to 
tubing-casing annulus pressure monitoring in sec.3.9(11)(C) and sec.3.46(j)(3). 
No change was made in response to this comment. Three commenters expressed 
support for amending sec.3.9(11)(F) and sec.3.46(j)(6) to allow a reduction in 
the frequency of pressure tests required under existing permits by letter of 
authorization. No change was made in response to these comments. In the preamble 
to the proposed amendments to sec.3.9 and sec.3.46, the commission requested 
comment regarding the need to conduct mechanical integrity tests at the maximum 
authorized injection pressure rather than the lesser of the maximum authorized 
injection pressure or 500 psi. Twelve persons submitted comments in response to 
this request. All twelve commenters expressed opposition to such a change. A 
number of the commenters questioned whether such a change was necessary given 
that most casing leaks are detected under current requirements. Commenters also 
expressed concern about the potential for unseating of tension-set packers and 
the impact that repeated testing of a string of casing at the maximum authorized 
injection pressure would having on casing integrity.
Commenters also expressed concern about increased test costs noting that in some 
cases the tubing and packer would have to be pulled in order to run the pressure 
test and in some cases equipment needed to test to maximum authorized injection 
pressures would not be available on-site. Most of the commenters indicated that 
such a change in mechanical integrity test requirements would cause many well 
failures resulting in increased operating costs and premature abandonment of 
many wells and fields. 
The commission has determined not to propose amendments to sec.3.9 or sec.3.46 
that would require that mechanical integrity tests be run at the greater of 500 
psi or the maximum authorized injection pressure. Current testing procedures are 
adequate to identify leaks without the risk of weakening casing through repeated 
tests at excessive pressures or of unseating tension-set packers. 
One commenter indicated that sec.3.9 and sec.3.46 should be amended to allow 
minor permit amendments to be made without submission of the application form 
currently required for permit amendments or payment of the $100.00 fee. The 
commission is continuing to evaluate this recommendation and may propose 
additional rule changes in the future if warranted. 
The following commenters expressed general support for the proposed amendments 
to sec.3.9 and sec.3.46: Texas Mid-Continent Oil & Gas Association; Texas 
Independent Producers and Royalty Owners Association; Permian Basin Petroleum 
Association; North Texas Oil and Gas Association; the East Texas Salt Water 
Disposal Company; Armor Petroleum, Inc.; Clark Operating, Inc.; Bettis, Boyle 
and Stovall, Inc.; John E. Rhoads; Unocal; Lone Star Pipeline Company. 
The following commenter expressed neither support for nor opposition to the 
proposed amendments to sec.3.9 and sec.3.46: West Central Texas Oil and Gas 
Association. 
The amendments to sec.3.9 and sec.3.46 are adopted under Texas Water Code, 
Chapter 27, which authorizes the commission to adopt and enforce rules relating 
to disposal and injection wells and Texas Natural Resources Code: sec.81.052, 
which authorizes the commission to adopt all necessary rules for governing 
persons and their operations under the jurisdiction of the commission under 
sec.81.051; sec.85.042(b), which authorizes the commission to adopt and enforce 
rules for the prevention of actual waste of oil or operations in the field 
dangerous to life or property; sec.85.201, which authorizes the commission to 
make and enforce rules for the conservation of oil and gas and prevention of 
waste of oil and gas; sec.85.202, which authorizes the commission to adopt rules 
to prevent waste of oil and gas in producing operations and to require wells to 
be operated in a manner that will prevent injury to adjoining property; and 
sec.91.101, which authorizes the commission to adopt rules relating to the 
production of oil and gas wells and the handling of any material associated with 
any operation or activity regulated by the commission. 

sec.3.9.Disposal Wells.
Any person who disposes of saltwater or other oil and gas waste by injection 
into a porous formation not productive of oil, gas, or geothermal resources 
shall be responsible for complying with this section, Texas Water Code, Chapter 
27, and Title 3 of the Natural Resources Code. 
(1) (No change.) 
(2) Geological requirements. Before such formations are approved for disposal 
use, the applicant shall show that the formations are separated from freshwater 
formations by impervious beds which will give adequate protection to such 
freshwater formations. The applicant must submit a letter from the Texas Natural 
Resource Conservation Commission, Austin, Texas, stating that the use of such 
formation will not endanger the freshwater strata in that area and that the 
formations to be used for disposal are not freshwater-bearing.
(3) (No change.) 
(4) Notice and opportunity for hearing. 
(A) (No change.) 
(B) In order to give notice to other local governments, interested, or affected 
persons, notice of the application shall be published once by the applicant in a 
newspaper of general circulation for the county where the well will be located 
in a form approved by the commission or its delegate. The applicant shall file 
with the commission in Austin proof of publication prior to the hearing or 
administrative approval. 
(C) Protested applications: 
(i) If a protest from an affected person or local government is made to the 
commission within 15 days of receipt of the application or of publication, 
whichever is later, or if the commission or its delegate determines that a 
hearing is in the public interest, then a hearing will be held on the 
application after the commission provides notice of hearing to all affected 
persons, local governments, or other persons, who express an interest, in 
writing, in the application. 
(ii) (No change.) 
(D) If no protest from an affected person is received by the commission, the 
commission's delegate may administratively approve the application. If the 
commission's delegate denies administrative approval, the applicant shall have a 
right to a hearing upon request. After hearing, the examiner shall recommend a 
final action by the commission. 
(5) Subsequent commission action. 
(A) (No change.) 
(B) A disposal well permit may be transferred from one operator to another 
operator provided that the commission's delegate does not notify the present 
permit holder of an objection to the transfer prior to the date the lease is 
transferred on Commission records. 
(6) Area of Review. 
(A) Except as otherwise provided in this paragraph, the applicant shall review 
the data of public record for wells that penetrate the proposed disposal zone 
within a 1/4 mile radius of the proposed disposal well to determine if all 
abandoned wells have been plugged in a manner that will prevent the movement of 
fluids from the disposal zone into freshwater strata. The applicant shall 
identify in the application any wells which appear from such review of public 
records to be unplugged or improperly plugged and any other unplugged or 
improperly plugged wells of which the applicant has actual knowledge.
(B) The commission or its delegate may grant a variance from the area-of-review 
requirements of subparagraph (A) of this paragraph upon proof that the variance 
will not result in a material increase in the risk of fluid movement into 
freshwater strata or to the surface. Such a variance may be granted for an area 
defined both vertically and laterally (such as a field) or for an individual 
well. An application for an areal variance need not be filed in conjunction with 
an individual permit application or application for permit amendment. Factors 
that may be considered by the commission or its delegate in granting a variance 
include: 
(i) the area affected by pressure increases resulting from injection operations; 
(ii) the presence of local geological conditions that preclude movement of fluid 
that could endanger freshwater strata or the surface; or
(iii) other compelling evidence that the variance will not result in a material 
increase in the risk of fluid movement into freshwater strata or to the surface. 
(C) Persons applying for a variance from the area-of-review requirements of 
subparagraph (A) of this paragraph on the basis of factors set out in 
subparagraph (B)(ii) or (iii) of this paragraph for an individual well shall 
provide notice of the application to those persons given notice under the 
provisions of paragraph (4)(A) of this subsection. The provisions of paragraph 
(4)(C) and (D) shall apply in the case of an application for a variance from the 
area-of-review requirements for an individual well. 
(D) Notice of an application for an areal variance from the area-of-review 
requirements under subparagraph (A) of this paragraph shall be given on or 
before the date the application is filed with the commission:
(i) by publication once in a newspaper having general circulation in each 
county, or portion thereof, where the variance would apply. Such notice shall be 
in a form approved by the commission or its delegate prior to publication and 
must be at least three inches by five inches in size. The notice shall state 
that protests to the application may be filed with the commission during the 15-
day period following the date of publication. The notice shall appear in a 
section of the newspaper containing state or local news items; 
(ii) by mailing or delivering a copy of the application, along with a statement 
that any protest to the application should be filed with the commission within 
15 days of the date the application is filed with the commission, to the 
following: 
(I) the manager of each underground water conservation district(s) in which the 
variance would apply, if any; 
(II) the city clerk or other appropriate official of each incorporated city in 
which the variance would apply, if any; 
(III) the county clerk of each county in which the variance would apply; and 
(IV) any other person or persons that the commission or its delegate determines 
should receive notice of the application. 
(E) If a protest to an application for an areal variance is made to the 
commission by an affected person, local government, underground water 
conservation district, or other state agency within 15 days of receipt of the 
application or of publication, whichever is later, or if the commission's 
delegate determines that a hearing on the application is in the public interest, 
then a hearing will be held on the application after the commission provides 
notice of the hearing to all local governments, underground water conservation 
districts, state agencies, or other persons, who express an interest, in 
writing, in the application. If no protest from an affected person is received 
by the commission, the commission's delegate may administratively approve the 
application. If the application is denied administratively, the person(s) filing 
the application shall have a right to hearing upon request. After hearing, the 
examiner shall recommend a final action by the commission. 
(F) An areal variance granted under the provisions of this paragraph may be 
modified, terminated, or suspended by the commission after notice and 
opportunity for hearing is provided to each person shown on commission records 
to operate an oil or gas lease in the area in which the proposed modification, 
termination, or suspension would apply. If a hearing on a proposal to modify, 
terminate, or suspend an areal variance is held, any applications filed 
subsequent to the date notice of hearing is given must include the area-of-
review information required under subparagraph (A) of this paragraph pending 
issuance of a final order. 
(7) (No change.) 
(8) Special equipment. 
(A) Tubing and packer. Wells drilled or converted for disposal shall be equipped 
with tubing set on a mechanical packer. Packers shall be set no higher than 100 
feet above the top of the permitted interval. For purposes of this section, the 
term "tubing" refers to a string of pipe through which injection may occur and 
which is neither wholly nor partially cemented in place. A string of pipe that 
is wholly or partially cemented in place is considered casing for purposes of 
this section. 
(B) (No change.) 
(C) The commission or its delegate may grant an exception to any provision of 
this paragraph upon proof of good cause. If the commission or its delegate 
denies an exception, the operator shall have a right to a hearing upon request. 
After hearing, the examiner shall recommend a final action by the commission. 
(9) (No change.) 
(10) Monitoring and reporting. 
(A)-(C) (No change.) 
(D) The operator shall report to the appropriate District Office within 24 hours 
any significant pressure changes or other monitoring data indicating the 
presence of leaks in the well. 
(11) Testing. 
(A) Before beginning disposal operations, the operator shall pressure-test the 
long string casing. The test pressure for wells equipped to inject through 
tubing and packer must equal the maximum authorized injection pressure or 500 
psig, whichever is less, but must be at least 200 psig. The test pressure for 
wells that are permitted for injection through casing must equal the maximum 
permitted injection pressure or 200 psig, whichever is greater. 
(B) Each disposal well shall be pressure-tested in the manner provided in 
subparagraph (A) of this paragraph at least once every five years to determine 
if there are leaks in the casing, tubing, or packer. The commission's delegate 
may prescribe a schedule and mail notification to operators to allow for orderly 
and timely compliance with this requirement. 
(C) As an alternative to the testing required in subparagraph (B) of this 
paragraph, the tubing-casing annulus pressure may be monitored and included on 
the annual monitoring report required by paragraph (1) of this section, with the 
authorization of the commission or its delegate and provided that there is no 
indication of problems with the well. Wells that are approved for tubing-casing 
annulus monitoring under this subparagraph shall be tested in the manner 
provided under subparagraph (A) of this paragraph at least once every ten years 
after January 1, 1990. The commission or its delegate may grant an exception for 
viable alternative tests or surveys.
(D)-(E) (No change.) 
(F) In the case of permits issued under this section prior to (the effective 
date of this amendment) which require pressure testing more frequently than once 
every five years, the commission's delegate may, by letter of authorization, 
reduce the required frequency of pressure tests, provided that such tests are 
required at least once every three years. The commission will consider the 
permit to have been amended to require pressure tests at the frequency specified 
in the letter of authorization.
(12)-(13) (No change.)

sec.3.46.Fluid Injection into Productive Reservoirs. 
(a)-(b) (No change.) 
(c) Notice and opportunity for hearing. 
(1) (No change.) 
(2) In order to give notice to other local governments, interested, or affected 
persons, notice of the application shall be published once by the applicant in a 
newspaper of general circulation for the county where the well will be located 
in a form approved by the commission or its delegate. The applicant shall file 
with the commission in Austin proof of publication prior to the hearing or 
administrative approval. 
(3) Protested applications: 
(A) If a protest from an affected person or local government is made to the 
commission within 15 days of receipt of the application or of publication, 
whichever is later, or if the commission or its delegate determines that a 
hearing is in the public interest, then a hearing will be held on the 
application after the commission provides notice of hearing to all affected 
persons, local governments, or other persons, who express an interest, in 
writing, in the application. 
(B) (No change.) 
(4) If no protest from an affected person is received by the commission, the 
commission's delegate may administratively approve the application. If the 
commission's delegate denies administrative approval, the applicant shall have a 
right to a hearing upon request. After hearing, the examiner shall recommend a 
final action by the commission. 
(d) Subsequent commission action. 
(1) (No change.) 
(2) A disposal well permit may be transferred from one operator to another 
operator provided that the commission's delegate does not notify the present 
permit holder of an objection to the transfer prior to the date the lease is 
transferred on Commission records. 
(e) Area of Review. 
(1) Except as otherwise provided in this subsection, the applicant shall review 
the data of public record for wells that penetrate the proposed disposal zone 
within a 1/4 mile radius of the proposed disposal well to determine if all 
abandoned wells have been plugged in a manner that will prevent the movement of 
fluids from the disposal zone into freshwater strata. The applicant shall 
identify in the application any wells which appear from such review of public 
records to be unplugged or improperly plugged and any other unplugged or 
improperly plugged wells of which the applicant has actual knowledge.
(2) The commission or its delegate may grant a variance from the area-of-review 
requirements of paragraph (1) of this subsection upon proof that the variance 
will not result in a material increase in the risk of fluid movement into 
freshwater strata or to the surface. Such a variance may be granted for an area 
defined both vertically and laterally (such as a field) or for an individual 
well. An application for an areal variance need not be filed in conjunction with 
an individual permit application or application for permit amendment. Factors 
that may be considered by the commission or its delegate in granting a variance 
include: 
(A) the area affected by pressure increases resulting from injection operations; 
(B) the presence of local geological conditions that preclude movement of fluid 
that could endanger freshwater strata or the surface; or
(C) other compelling evidence that the variance will not result in a material 
increase in the risk of fluid movement into freshwater strata or to the surface. 
(3) Persons applying for a variance from the area-of- review requirements of 
paragraph (1) of this subsection on the basis of factors set out in paragraph 
(2)(B) or (C) of this subsection for an individual well shall provide notice of 
the application to those persons given notice under the provisions of subsection 
(c)(1) of this section. The provisions of subsection (c) of this section shall 
apply in the case of an application for a variance from the area-of-review 
requirements for an individual well.
(4) Notice of an application for an areal variance from the area-of-review 
requirements under paragraph (1) of this subsection shall be given on or before 
the date the application is filed with the commission:
(A) by publication once in a newspaper having general circulation in each 
county, or portion thereof, where the variance would apply. Such notice shall be 
in a form approved by the commission or its delegate prior to publication and 
must be at least three inches by five inches in size. The notice shall state 
that protests to the application may be filed with the commission during the 15-
day period following the date of publication. The notice shall appear in a 
section of the newspaper containing state or local news items; 
(B) by mailing or delivering a copy of the application, along with a statement 
that any protest to the application should be filed with the commission within 
15 days of the date the application is filed with the commission, to the 
following: 
(i) the manager of each underground water conservation district in which the 
variance would apply, if any; 
(ii) the city clerk or other appropriate official of each incorporated city in 
which the variance would apply, if any; 
(iii) the county clerk of each county in which the variance would apply; and 
(iv) any other person or persons that the commission or its delegate determines 
should receive notice of the application. 
(5) If a protest to an application for an areal variance is made to the 
commission by an affected person, local government, underground water 
conservation district, or other state agency within 15 days of receipt of the 
application or of publication, whichever is later, or if the commission's 
delegate determines that a hearing on the application is in the public interest, 
then a hearing will be held on the application after the commission provides 
notice of the hearing to all local governments, underground water conservation 
districts, state agencies, or other persons, who express an interest, in 
writing, in the application. If no protest from an affected person is received 
by the commission, the commission's delegate may administratively approve the 
application. If the application is denied administratively, the person(s) filing 
the application shall have a right to hearing upon request. After hearing, the 
examiner shall recommend a final action by the commission. 
(6) An areal variance granted under the provisions of this subsection may be 
modified, terminated, or suspended by the commission after notice and 
opportunity for hearing is provided to each person shown on commission records 
to operate an oil or gas lease in the area in which the proposed modification, 
termination, or suspension would apply. If a hearing on a proposal to modify, 
terminate, or suspend an areal variance is held, any applications filed 
subsequent to the date notice of hearing is given must include the area-of-
review information required under paragraph (1) of this subsection pending 
issuance of a final order. 
(f) (No change.) 
(g) Special equipment. 
(1) Tubing and packer. Wells drilled or converted for injection shall be 
equipped with tubing set on a mechanical packer. Packers shall be set no higher 
than 200 feet below the known top of cement behind the long string casing but in 
no case higher than 150 feet below the base of usable quality water. For 
purposes of this section, the term "tubing" refers to a string of pipe through 
which injection may occur and which is neither wholly nor partially cemented in 
place. A string of pipe that is wholly or partially cemented in place is 
considered casing for purposes of this section. 
(2) (No change.) 
(3) Exceptions. The commission or its delegate may grant an exception to any 
provision of this paragraph upon proof of good cause. If the commission or its 
delegate denies an exception, the operator shall have a right to a hearing upon 
request. After hearing, the examiner shall recommend a final action by the 
commission. 
(h) (No change.) 
(i) Monitoring and reporting. 
(1)-(3) (No change.) 
(4) The operator shall report to the appropriate District Office within 24 hours 
any significant pressure changes or other monitoring data indicating the 
presence of leaks in the well. 
(j) Testing. 
(1) Before beginning injection operations, the operator shall pressure-test the 
long string casing. The test pressure for wells equipped to inject through 
tubing and packer must equal the maximum authorized injection pressure or 500 
psig, whichever is less, but must be at least 200 psig. The test pressure for 
wells that are permitted for injection through casing must equal the maximum 
permitted injection pressure or 200 psig, whichever is greater. 
(2) Each injection well shall be pressure-tested in the manner provided in 
paragraph (1) of this subsection at least once every five years to determine if 
there are leaks in the casing, tubing, or packer. The commission's delegate may 
prescribe a schedule and mail notification to operators to allow for orderly and 
timely compliance with this requirement. 
(3) As an alternative to the testing required in paragraph (2) of this 
subsection, the tubing-casing annulus pressure may be monitored and included on 
the annual monitoring report required by subsection (i) of this section, with 
the authorization of the commission or its delegate and provided that there is 
no indication of problems with the well. Wells that are approved for tubing-
casing annulus monitoring under this paragraph shall be tested in the manner 
provided under paragraph (2) of this subsection at least once every ten years 
after January 1, 1990. The commission or its delegate grant an exception for 
viable alternative tests or surveys.
(4)-(5) (No change.) 
(6) In the case of permits issued under this section prior to (the effective 
date of this amendment) which require pressure testing more frequently than once 
every five years, the commission's delegate may, by letter of authorization, 
reduce the required frequency of pressure tests, provided that such tests are 
required at least once every three years. The commission will consider the 
permit to have been amended to require pressure tests at the frequency specified 
in the letter of authorization. 
(k)-(n) (No change.) 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority. 
Issued in Austin, Texas, on November 13, 1996.
TRD-9616407
Mary Ross McDonald
Deputy General Counsel, Office of the General Counsel
Railroad Commission of texas
Effective date: December 4, 1996
Proposal publication date: June 18, 1996
For further information, please call: (512) 463-7008

Conservation Rules and Regulations
16 TAC sec.3.32
The Railroad Commission of Texas adopts the repeal of sec.3.32, concerning gas 
well gas and casinghead gas shall be utilized for legal purposes without 
changes, and concurrently adopts new sec.3.32 with changes to the proposed text 
published in the May 31, 1996, issue of the Texas Register (21 TexReg 4875). The 
new version of sec.3.32 expands the existing rule to provide definitions of 
terms used in the rule and to authorize the release of non-measurable volumes of 
gas, the release of gas into the air that results from routine operations 
necessary to drill and operate wells efficiently, and the release of gas for a 
limited period from gathering, processing, or treatment operations. The new rule 
further expands the time period that an exception to the rule granted by the 
commission is in effect and provides that no exception is necessary for volumes 
equal to or less than 50 MCF per day. The new rule will eliminate needless 
paperwork and other administrative burdens on oil and gas operators by relieving 
operators from the requirement of obtaining an exception for the venting or 
flaring of non-measurable volumes of gas and insignificant volumes of gas 
necessary to conduct routine, efficient operations. 
The commission received comments from two industry associations: Texas Mid-
Continent Oil and Gas Association (TMOGA) and the Association of Texas 
Intrastate Natural Gas Pipelines (ATINGP). Both associations favored adoption of 
new sec.3.32 with suggested changes, but each association suggested different 
changes to sec.3.32(a) to the definitions and terms used in the rule to reflect 
industry usage. TMOGA suggested changes to the definition of "low pressure 
separator gas" to delete the direct reference to solution gas, and to identify 
storage tanks and gunbarrels as sources of tank vapors. ATINGP requested 
consistent use of the term "gas plant" throughout the rule. The commission 
agrees and these changes have been incorporated. 
ATINGP requested clarification of "reasonably" in the definition of fugitive 
emissions and suggested the definition reflect economic expectations. The 
commission views "reasonably" as being "not extreme" or "without excess" and 
declines to adopt the suggested definition. 
TMOGA requested sec.3.32(d) state that gas releases under this subsection are 
authorized to be vented. Because subsection (d) lists exempt gas releases, 
further clarification is not necessary. ATINGP requested the terms "amine 
treater" and "other gas handling equipment" be added as sources of releases 
under this subsection. The commission agrees and these have been added at 
sec.3.32(d)(1)(C) and (D). 
Both TMOGA and ATINGP voiced concerns with the requirements in sec.3.32(e) that 
all gas releases be burned in a flare. Routine operations in each commenter's 
segment of the industry involves gas releases of 24 hours or less at locations 
not equipped to flare gas. Existing sec.3.32(c) allows gathering system releases 
of 24 hours or less to be vented. This provision was inadvertently dropped from 
the proposed new version of the rule. The commission includes this provision in 
sec.3.32(e) to resolve industry concerns. 
TMOGA has requested that all gas releases authorized under sec.3.32(f) be 
authorized by rule to be vented. The commission does not agree with this 
proposal. With the exception of periodic unloading of produced fluids from gas 
wells under sec.3.32(f)(1)(B), all other releases under subsection (f) are 
potentially large volumes or long-term releases and should be subject to a 
review of whether gas can be safely vented. 
Section 3.32(f)(1)(C) and (g)(1) address gas releases due to gathering system 
and plant upsets. Both TMOGA and ATINGP asked that the time period for filing of 
an exception application be extended to the end of the business day following 
the first 24 hours of such an unplanned release unless extended by the 
commission or the commission's delegate. The commission agrees with this change 
because it will accommodate exception applications for continuation of releases 
which start during the early morning hours. 
TMOGA requested that rule exceptions which are issued to an operator be made 
transferable. Because the commission has found the change of operatorship to be 
an important review and audit point during the life of these exceptions, the 
commission declines to adopt this request. As an alternative, however, the 
commission adopts in sec.3.32(h)(7) a 90-day period after a transfer of 
ownership to allow for the new operator to review and evaluate the need for 
continuation of the existing authority. 
TMOGA proposed the option of consolidating multiple releases due to gathering 
system or plant upsets into one application for fee purposes. These are 
generally short-term gas releases having an impact on multiple leases or 
facilities. The commission incorporates this change at sec.3.32(h)(8). 
ATINGP asked what form should be used to report volumes of gas released by gas 
gathering systems and gas plants. Gas releases from these operations are 
reported on Form R-3. A one-time filing of Form R-3 is employed to report gas 
releases from gathering systems that do not routinely file this form. Gas 
releases from production operations are reported on Form P-1 for oil leases and 
Form P-2 for gas wells. 
ATINGP also requested the rule provide the commission district offices the 
authority to grant or renew exceptions. Due to the required collection of fees 
for these applications, this is not feasible at this time. 
The repeal is adopted pursuant to Texas Natural Resources Code, sec.sec.81.052, 
85.042, 85.201, 85.202, 86.042, 86.185, and 141.012, which authorizes the 
commission to make and enforce rules for conservation, prevention of waste, and 
protection of correlative rights regarding oil, gas, and geothermal resources in 
the state of Texas, and for all things necessary for governing and regulating 
persons and their operations under the jurisdiction of the commission. 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority. 
Issued in Austin, Texas, on November 13, 1996.
TRD-9616405
Mary Ross McDonald
Deputy General Counsel, Office of the General Counsel
Railroad Commission of Texas
Effective date: December 4, 1996
Proposal publication date: May 31, 1996
For further information, please call: (512) 463-7008

The new section is adopted pursuant to Texas Natural Resources Code, 
sec.sec.81.052, 85.042, 85.201, 85.202, 86.042, 86.185, and 141.012, which 
authorizes the commission to make and enforce rules for conservation, prevention 
of waste, and protection of correlative rights regarding oil, gas, and 
geothermal resources in the state of Texas, and for all things necessary for 
governing and regulating persons and their operations under the jurisdiction of 
the commission.

sec.3.32.Gas Well Gas and Casinghead Gas Shall Be Utilized for Legal Purposes.
(a) The following words and terms, when used in this section, shall have the 
following meanings, unless the context clearly indicates otherwise.
(1) Fugitive emissions -- releases of gas from lease production, gathering, 
compression, or gas plant equipment components, including emissions from valve 
stems, pressure relief valves, flanges and connections, gas-operated valves, 
compressor and pump seals, pumping well stuffing boxes, casing-to-casing 
bradenheads subject to the provisions of sec.3.17 of this title (relating to 
pressure on bradenhead in oil, gas or geothermal resource operations), pits, and 
sumps, that cannot reasonably be captured and sold or routed to a vent or flare. 
(2) Gathering system -- facilities employed to collect, compress, and transport 
gas to another gas gathering system, a gas plant, compression facility, or 
transmission line. 
(3) Lease production facilities -- production, separation, treating, 
compression, flowlines, storage, and other production handling equipment 
employed on a lease in the production of gas, condensate, and oil. 
(4) Low pressure separator gas -- gas separated or liberated from a gas-liquid 
stream in a low pressure separation facility. Low pressure separation facilities 
include but are not limited to separators, treaters, free water knockouts, and 
other associated equipment. 
(5) Tank vapors -- gas which evolves from oil, condensate, or water when placed 
in a gunbarrel or storage tank. 
(b) Activities authorized by this section may be subject to rules and 
regulations promulgated by the United States Environmental Protection Agency 
under the federal Clean Air Act or the Texas Natural Resources Conservation 
commission under the Texas Clean Air Act. 
(c) General Provisions. All gas from any oil well, gas well, gas gathering 
system, gas plant or other gas handling equipment shall be utilized for purposes 
and uses authorized by law, except as provided in this section. This section 
does not apply to gas transmission or gas distribution facilities or operations. 
(d) Exempt Gas Releases. 
(1) Releases of gas that are not readily measured by devices routinely used in 
the operation of oil wells, gas wells, gas gathering systems, or gas plants, 
such as meters, are not required by the commission to be reported or charged 
against lease allowable production and are not subject to the remaining 
requirements of this section. Releases of gas exempt from the requirements of 
this section under this paragraph include, but are not limited to, the 
following: 
(A) tank vapors from crude oil storage tanks, gas well condensate storage tanks, 
or salt water storage tanks, including makeup gas for gas blanket maintenance; 
(B) fugitive emissions of gas; 
(C) amine treater, glycol dehydrator flash tank and/or reboiler emissions; 
(D) blowdown gas from flow lines, gathering lines, meter runs, pressurized 
vessels, compressors, or other gas handling equipment for construction, 
maintenance or repair; 
(E) gas purged from compressor cylinders or other gas handling equipment for 
startup; 
(F) gas released at a wellsite during drilling operations and prior to the 
completion date of the well, including gas produced during air or gas drilling 
operations or gas which must be separated from drilling fluids using a mud-gas 
separator, or mud-degasser; or 
(G) gas released at a wellsite during initial completion, recompletion in 
another field, or workover operations in the same field, including but not 
limited to perforating, stimulating, deepening, cleanout, well maintenance or 
repair operations. 
(2) Not withstanding the foregoing, the commission or the commission's delegate 
may require the flaring of releases of gas not readily measured by devices 
routinely used in the operation of oil wells, gas wells, gas gathering systems, 
or gas plants, such as meters, if the commission or the commission's delegate 
determines that flaring is required for safety reasons. 
(e) Gas Releases to be Burned in a Flare. 
(1) Except as otherwise provided in subsections (d), (f)(1)(B) and (C), (g)(2), 
or an exception granted under subsection (h) of this section, all gas releases 
of greater than 24 hours duration authorized under the provisions of this 
section shall be burned in a flare if the gas can be burned safely. All gas 
releases of 24 hours' duration or less authorized under the provisions of this 
section may be vented to the air if flaring is not required for safety reasons 
or by other regulation and the gas can be safely vented. 
(2) Gas releases authorized under this section must be managed in accordance 
with the provisions of sec.3.36 of this title (relating to oil, gas, or 
geothermal resource operation in hydrogen sulfide areas) when applicable. 
(3) An exception to the requirements of this subsection may be granted under 
subsection (h) by the commission or the commission's delegate to allow the 
venting of gas to the air for releases of greater than 24 hours' duration if the 
operator presents information that shows the gas cannot be both safely and 
continuously burned in a flare, and the gas can be safely vented. 
(4) Notwithstanding the provisions of paragraph (1) of this subsection or an 
exception granted under subsection (h), the commission or the commission's 
delegate may require that the gas be flared if flaring is required for safety 
reasons. 
(f) Gas Releases in Oil and Gas Production Operations. 
(1) The following releases of gas resulting from routine oil and gas production 
operations are necessary in the efficient drilling and operation of oil and gas 
wells and are hereby authorized subject to the requirements of subsection (e) of 
this section. The released gas shall be measured or estimated in accordance with 
sec.3.27 of this title (relating to gas to be measured) and reported and charged 
against lease allowable production. 
(A) Gas may be released for a period not to exceed ten producing days after 
initial completion, recompletion in another field, or workover operations in the 
same field, including but not limited to perforating, stimulating, deepening, 
cleanout, well maintenance or repair operations. 
(B) Gas from a well that must be unloaded or cleaned-up to atmospheric pressure 
may be vented to the air for periods not to exceed 24 hours in one continuous 
event or a total of 72 hours in one calendar month.
(C) In the event of a full or partial shutdown by a gas gathering system, 
compression facility, or gas plant, gas from a lease production facility served 
by that gas gathering system, compression facility or gas plant may be released 
for a period not to exceed 24 hours. The operator shall notify the appropriate 
commission district office by telephone or facsimile as soon as reasonably 
possible after the release of gas begins. An operator may continue the release 
by flaring or by venting of the gas, if flaring is not required for safety 
reasons or by other regulation, beyond the initial 24-hour period, pending 
commission approval or denial of a request for an administrative exception under 
subsection (h) of this section. The operator shall file the request with the 
commission by the end of the next full business day following the first 24 hours 
of the release unless the deadline is extended by the commission or the 
commission's delegate. 
(D) Hydrocarbon gas contained in the waste stream from a membrane unit or 
molecular sieve used to remove carbon dioxide, hydrogen sulfide, or other 
contaminants from a gas stream may be released, provided that at least 85% of 
the hydrocarbon gas in the inlet gas stream is recovered and directed to a legal 
use. 
(E) Low pressure separator gas, not to exceed 15 mcfd of hydrocarbon gas per gas 
well or 50 mcfd of hydrocarbon gas per commission-designated oil lease or 
commingling point for commingled operations, may be released. 
(2) The commission or the commission's delegate may administratively grant or 
renew an exception to the requirements or limitations of this subsection subject 
to the requirements of subsection (h) to allow additional releases of gas if the 
operator of a well or production facility presents information to show the 
necessity for the release. The volume of gas that is released must be measured 
or estimated in accordance with sec.3.27 of this title (relating to gas to be 
measured) and reported on the appropriate commission form and shall be charged 
to the operator's allowable production. Necessity for the release includes, but 
is not limited to, the following situations: 
(A) Cleaning a well of solids or fluids or both for more than ten producing days 
following initial completion, recompletion in another field, or workover 
operations in the same field, including but not limited to perforating, 
stimulating, deepening, cleanout, or well maintenance or repair operations; 
(B) Unloading excess formation fluid buildup in a wellbore for periods in excess 
of 24 hours in one continuous event or 72 hours total in one calendar month; 
(C) Volumes of low pressure gas that can be measured with devices routinely used 
in oil and gas exploration, development, and production operations and that are 
not directed by an operator to a gas gathering system, gas pipeline, or other 
marketing facility, or other purposes and uses authorized by law due to 
mechanical, physical, or economic impracticability; 
(D) For casinghead gas only, the unavailability of a gas pipeline or other 
marketing facility, or other purposes and uses authorized by law; or 
(E) Avoiding curtailment of gas production which will result in a reduction of 
ultimate recovery from a gas well or oil reservoir. 
(g) Gas releases from gas gathering system, gas plant or gas handling 
operations. 
(1) The operator of a gas gathering system, gas plant, gas compressor facility 
or other gas handling equipment not directly associated with lease production of 
gas, shall not intentionally allow gas to be released for a period of more than 
24 hours after the start of an upset condition. The operator shall notify the 
appropriate commission district office by telephone or facsimile as soon as 
reasonably possible after the release of gas begins. The volume of gas that is 
released must be measured or estimated in accordance with sec.3.27 of this title 
(relating to gas to be measured) and reported on the appropriate commission 
form. The provisions of this subsection do not apply to accidental releases 
which are subject to or reported pursuant to any other commission rule. 
(2) The commission or the commission's delegate may administratively grant or 
renew an exception to the requirements or limitations of this subsection and 
allow additional releases of gas for a period greater than 24 hours if the 
operator presents information that shows the necessity for the release. An 
operator may continue the release by flaring or by venting of the gas, if 
flaring is not required for safety reasons or by other regulation, beyond the 
initial 24-hour period pending commission consideration of a request for an 
administrative exception under subsection (h) of this section. The request for 
exception is to be filed with the commission by the end of the next full 
business day following the first 24 hours of the release unless the deadline is 
extended by the commission or the commission's delegate. The following are 
examples of situations that may qualify for an exception under this paragraph: 
(A) gas gathering system or gas plant construction, repairs or maintenance; 
(B) gas plant turnaround; or 
(C) emergency situations. 
(h) Exceptions. The commission or the commission's delegate may administratively 
grant an exception authorized by this section provided that the requirements of 
this subsection are met. 
(1) The request for an exception shall be accompanied by the fee required by 
sec.3.76(b)(5) of this title (relating to fees, performance bonds and 
alternative forms of financial security required to be filed).
(2) An administrative exception shall not exceed a period of 180 days. 
(3) The 180-day limitation shall not apply for volumes of gas less than or equal 
to 50 mcf of hydrocarbon gas per day for each gas well, commission-designated 
oil lease, or commingled vent or flare point.
(4) Requests for exceptions for more than 180 days and for volumes greater than 
50 mcf of hydrocarbon gas per day shall be granted only in a final order signed 
by the commission. 
(5) A request for an exception to cover an operating emergency, system upset, or 
other unplanned condition may be submitted by facsimile transmission or other 
means, provided that an original signed request is accompanied by the fee 
required by subsection (h)(1) of this section and is received by the commission 
within three working days of the facsimile transmission request. 
(6) Exceptions shall be issued to the operator of a gas well or commission-
designated oil lease or commingling point for commingled operations and to the 
operator of a processing plant or other facility subject to this section. 
(7) Exceptions are not transferable upon a change of operatorship. Operators 
shall have 90 days from the date of commission approval of a transfer of 
operatorship to review existing exceptions to this section and, if continuation 
of the exception is needed, to make application for a new exception. The 
existing exception and existing authority shall remain in effect during the 90-
day review period. If an operator files an application and fee for a new 
exception before the 90-day review period expires and the 90-day review period 
expires before the commission acts on the application, the operator is 
authorized to continue to operate under the existing authority pending final 
commission action on the application. 
(8) One application for exception to the requirements of this section may be 
filed for multiple releases from gas wells, commission-designated oil leases, 
gas gathering systems, gas compressors or other gas handling facilities when the 
release of gas is the result of a full or partial shut-down of a gas gathering 
system, gas plant, gas compressor or other gas handling facility under 
subsection (f)(1)(C) or (g)(1). Each well, lease or facility must be clearly 
identified by the applicant and a single fee paid under sec.3.76(b)(5) of this 
title (relating to fees, performance bonds and alternate forms of financial 
security required to be filed). 
(i) Renewal and Amendment of Exceptions. 
(1) The commission or the commission's delegate may renew an exception 
authorized by this section. An administrative renewal by the commission's 
delegate may not exceed a period of 180 days. 
(2) A renewal shall be based upon a showing by the operator of a well, lease, or 
other facility subject to this section, that the conditions for which the 
initial exception or latest renewal was granted have not significantly changed 
despite a good-faith attempt by the operator to direct the gas to or utilize the 
gas for purposes and uses authorized by law. 
(3) An operator shall file an application and fee for renewal of an exception 
with the commission 21 days prior to expiration of the existing exception 
authority. The request for renewal shall be accompanied by the fee required by 
sec.3.76(b)(5) of this title (relating to fees, performance bonds and 
alternative forms of financial security required to be filed). 
(4) If an operator files an application, accompanied by the required fee, for 
renewal of an existing exception to the requirements of this section at least 21 
days before the expiration of the existing exception and the existing authority 
expires before the commission acts on the application, the operator is 
authorized to continue to operate under the existing authority pending final 
commission action on the application. 
(5) The request by an operator to amend an existing exception will require a new 
application for exception if the amendment will result in a material change of 
the previously granted exception. 
(6) Material changes include, but are not limited to, the following: 
(A) Change of operator of the well or facility subject to this section; and 
(B) An increase in volume of gas to be released or an extension of the duration 
of an exception greater than that provided for in subsection (h) of this 
section. 
(j) Opportunity for hearing. 
(1) An operator may request a hearing on any application for an exception or 
exception renewal required by this section. 
(2) An operator may request a hearing on any request for administrative approval 
of an exception or exception renewal that has been denied by the commission or 
the commission's delegate. 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on November 13, 1996.
TRD-9616406
Mary Ross McDonald
Deputy General Counsel, Office of the General Counsel
Railroad Commission of texas
Effective date: December 4, 1996
Proposal publication date: May 31, 1996
For further information, please call: (512) 463-7008

PART II. Public Utility Commission of Texas
CHAPTER 23.Substantive Rules
The Public Utility Commission of Texas adopts amendments to sec.23.3, relating 
to Definitions, and sec.23.41, relating to Customer Relations without changes to 
the proposed text as published in the August 20, 1996 issue of the Texas 
Register (21 TexReg7781). The amendments are necessary to update references in 
the rules to state agencies by replacing existing references with the 
appropriate current references. A public hearing on the amendments was scheduled 
for September 5, 1996 at 10:00 a.m. at Commission offices; however, no one 
attended the hearing. The commission received no written comments on the 
proposed amendments.

General Rules
16 TAC sec.23.3
The amendment is adopted under the Public Utility Regulatory Act of 1995, 
sec.1.101, Senate Bill 319, 74th Legislature Regular Session 1995, which 
provides the Public Utility Commission with the authority to make and enforce 
rules reasonably required in the exercise of its powers and jurisdiction, 
including rules of practice and procedure. 
Cross Index to Statutes: PURA sec.1.101. 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority. 
Issued in Austin, Texas, on November 12, 1996.
TRD-9616392
Paula Mueller
Secretary of the Commission
Public Utility Commission of Texas
Effective date: December 4, 1996
Proposal publication date: August 20, 1996
For further information, please call: (512) 936-7162

Customer Service and Protection
16 TAC sec.23.41
The amendment is adopted under the Public Utility Regulatory Act of 1995, 
sec.1.101, Senate Bill 319, 74th Legislature Regular Session 1995, which 
provides the Public Utility Commission with the authority to make and enforce 
rules reasonably required in the exercise of its powers and jurisdiction, 
including rules of practice and procedure. 
Cross Index to Statutes: PURA sec.1.101. 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority. 
Issued in Austin, Texas, on November 12, 1996.
TRD-9616393
Paula Mueller
Secretary of the Commission
Public Utility Commission of Texas
Effective date: December 4, 1996
Proposal publication date: August 20, 1996
For further information, please call: (512) 936-7162

TITLE 25. HEALTH SERVICES
PART I. Texas Department of Health
CHAPTER 229. Food and Drug
Production, Processing, and Distribution of Bottled and Vended Drinking Water 
Amendments
25 TAC sec.sec.229.81-229.88
The Texas Department of Health (department) adopts amendments to sec.sec.229.81 
- 229.88, concerning production, processing, and distribution of bottled and 
vended drinking water. Section 229.81 is adopted with changes to the proposed 
text as published in the July 16, 1996, issue of the Texas Register (21 TexReg 
6558). Sections 229.82 - 229.88 are adopted without changes and will not be 
republished. 
The amendments update language regarding general provisions, sampling, water 
hauling, microbiological control standards, labeling and advertising, processing 
of vended water, certificates of competency, and requirements for approved 
sources. The amendments are adopted to comply with federal regulations and 
statutory changes enacted during the 74th Texas Legislature. 
A summary of comments and the department's responses to the comments are as 
follows. 
COMMENT: Concerning sec.229.81(c)(3), two commenters acknowledged that the 
standard of identity for "bottled water or drinking water" as proposed was 
identical language contained in the Federal Register, November 13, 1995, Id at 
57124, but requested the department to incorporate language that would allow for 
mineral addition into its definition for "bottled water or drinking water." 
RESPONSE: The department disagrees. The commenter and the department agree that 
federal standards of identity preempt state requirements which vary from the 
federal standards. Consequently, the department cannot change the text of these 
definitions. However, federal and state regulations concerning multi-component 
foods already permit the addition of minerals as long as the minerals are 
declared on the label as added ingredients and in the common name of the product 
(e.g., "Drinking Water with Added Magnesium"). 
COMMENT: Concerning sec.229.83, one commenter agreed with the department's rules 
for the sanitary hauling of bulk drinking water. 
RESPONSE: The department agrees. 
COMMENT: Concerning sec.229.83(c)(10), one commenter acknowledged that the 
standard of identity for "sparkling bottled water" proposed was identical to the 
U. S. Food and Drug Administration's (FDA) definition, but requested 
clarification on the interpretation of the "sparkling bottled water" definition.
RESPONSE: The department disagrees. The department has requested and received 
verbal clarification from FDA regarding the interpretation. The department does 
not feel that any additional clarification is necessary. Current multi component 
food labeling rules are in place to allow use of carbon dioxide in foods so long 
as it is declared as an ingredient and the usual or common name includes wording 
that carbon dioxide was added. 
COMMENT: Concerning sec.229.85(b), one commenter stated that the proposed 
language would require additional labeling requirements for manufacturing firms 
by adding the identity of the water source on product labels. The commenter 
stated that current FDA rules require only source identity be provided on labels 
of water from a community or municipal water supply. Source information should 
be the property of the bottling company, and available for review by the 
department or FDA during routine inspections. Also, the commenter is of the 
opinion that requiring source water disclosure on package labels would subject 
the labeling to preemption by FDA. 
RESPONSE: The department disagrees. The issue of source identity on the label 
has been discussed with FDA. FDA responded that if the department considers 
source identity on the label to be material fact, then the rule would not be 
subject to preemption. Further, the department believes the public considers 
source information to be a major consideration in the purchase of bottled water. 
Minor editorial changes were made for clarification purposes. 
The commenters were: Texas Bottled Water Association (TBWA), and International 
Bottled Water Association (IBWA). The commenters were in favor of the rules; 
however, they requested changes as discussed previously. 
The amendments are adopted under Health and Safety Code, sec.145.011, which 
provides the department with authority to adopt necessary regulations pursuant 
to the enforcement of this Chapter; 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.229.81. General Provisions. 
(a) Purpose. These sections establish definitions and standards for the 
processing and bottling of drinking and vended water. The sections also will 
supplement sec.sec.229.181-229.184 of this title (relating to Licensure of 
Manufacturers of Food and Wholesale Distributors of Food -- Including Good 
Manufacturing Practices) and federal regulations in Title 21, Code of Federal 
Regulations, Part 165 concerning standards of quality, and Part 129 concerning 
processing and bottling of bottled drinking water.
(b) Requirements for specific standardized beverages. The department adopts by 
reference Title 21 Code of Federal Regulations, sec.165.110 concerning the 
identity, nomenclature, other label statements and label declarations for both 
bottled and vended water, except as modified by the Texas Board of Health in 
sec.229.85(b) of this title (relating to Labeling and Advertising).
(c) Definitions. The following words and terms, when used in this chapter, shall 
pertain to both bottled and vended water and shall have the following meanings 
unless the context clearly indicates otherwise.
(1) Approved source (When used in reference to a plant's product water or 
operations water) - A source of water and the water therefrom, whether it be 
from a spring, artesian well, drilled well, municipal water supply, or any other 
source, that has been inspected and the water sampled, analyzed, and found to be 
of a safe and sanitary quality according to applicable laws and regulations of 
State and local government agencies having jurisdiction. The presence in the 
plant of current certificates or notifications of approval from the government 
agency or agencies having jurisdiction constitutes approval of the source and 
the water supply. 
(2) Artesian water - Water from a well tapping a confined aquifer in which the 
water level stands at some height above the top of the aquifer is "artesian 
water" or "artesian well water." 
(3) Bottled water or drinking water - Water that is intended for human 
consumption and that is sealed in bottles or other containers with no added 
ingredients except that it may optionally contain safe and suitable 
antimicrobial agents. 
(4) Department - Texas Department of Health. 
(5) Distilled water - Water which has been produced by a process of distillation 
and meets the definition of purified water in the United States Pharmacopeia, 
23rd revision, January 1, 1995, which the department adopts by reference. 
(Copies may be obtained from the United States Pharmacopial Convention, Inc., 
12601 Twinbrook Parkway, Rockville, MD 20852). 
(6) Fluoridated water - Water containing added fluoride.
(7) Ground water - Water from a subsurface saturated zone that is under a 
pressure equal to or greater than atmospheric pressure.
(8) Mineral water - Water containing not less than 250 parts per million (ppm) 
total dissolved solids (TDS), coming from a source tapped at one or more bore 
holes or springs, originating from a geologically and physically protected 
underground water source. 
(9) Purified water - Water that has been produced by distillation, deionization, 
reverse osmosis, or other suitable processes and that meets the definition of 
"purified water" in the United States Pharmacopoeia, 23rd revision, January 1, 
1995, which the department adopts by reference. (Copies may be obtained from the 
United States Pharmacopial Convention, Inc., 12601 Twinbrook Parkway, Rockville, 
MD 20852). 
(10) Sparkling bottled water - Water that after treatment and possible 
replacement of carbon dioxide, contains the same amount of carbon dioxide that 
it had at emergence from the source. 
(11) Spring water - Water derived from an underground formation from which water 
flows naturally to the surface of the earth. 
(12) Sterile water or sterilized water - Water that meets requirements under 
"Sterility Tests" in the United States Pharmacopeia, 23rd revision, January 1, 
1995, which the department adopts by reference. (Copies may be obtained from the 
United States Pharmacopial Convention, Inc., 12601 Twinbrook Parkway, Rockville, 
MD 20852). 
(13) Vended water -Vended water is: (A) water dispensed from any vending 
machine; or (B) unit servings of water dispensed in bulk by any operator or 
consumer from any water dispensing device. 
(14) Vending machine - Any self-service device which upon insertion of a coin, 
coins, or token, or upon receipt of payment by other means, dispenses unit 
servings of water in bulk, without the necessity of refilling the machine 
between each operation. 
(15) Well water - Water taken from a hole bored, drilled, or otherwise 
constructed in the ground which taps the water of an aquifer.
(d) Other requirements for specific standardized beverages.
(1) Artesian water may be collected with the assistance of external force to 
enhance the natural underground pressure. On request, a bottler or vendor shall 
demonstrate to the department that the water level stands at some height above 
the top of the aquifer. 
(2) For bottled water or drinking water, fluoride may be optionally added within 
the limitations established in 21 Code of Federal Regulations (CFR) Part 
165.110(b)(4)(ii). Bottled water may be used as an ingredient in beverages 
(e.g., diluted juices, flavored bottled waters). It does not include those food 
ingredients that are declared in ingredient labeling as "water," "carbonated 
water," "disinfected water," "filtered water," "seltzer water," "soda water," 
"sparkling water," and "tonic water." The processing and bottling of bottled 
water shall comply with applicable regulations in 21 CFR, Part 129. 
(3) For fluoridated water, the total fluoride content levels cannot exceed 
levels contained in 21 CFR 165.110(b)(4)(ii).
(4) Ground water must not be under the direct influence of surface water as 
defined in 40 CFR 141.2. 
(5) Mineral water shall be distinguished from other types of water by its 
constant level and relative proportions of minerals and trace elements at the 
point of emergence from the source, due account being taken of the cycles of 
natural fluctuations. No minerals may be added to this water.
(6) Water processed by demineralization that meets the purified water definition 
may alternatively be called "demineralized water." Alternatively, water that has 
been processed by deionization may be called "deionized water", and water 
processed by distillation may be called "distilled water", and water that has 
been processed by reverse osmosis may be called "reverse osmosis water". Also, 
if the water has been processed by either of the previously listed methods the 
water may be called "(blank) drinking water", with the blank being filled in 
with one of the defined terms describing the method of processing. 
(7) Spring water shall be collected only at the spring or through a bore hole 
tapping the underground formation feeding the spring. There shall be a natural 
force causing the water to flow to the surface through a natural orifice. The 
location of the spring shall be identified. Spring water collected with the use 
of an external force shall be from the same underground stratum as the spring, 
as shown be a measurable hydraulic connection using a hydro geologically valid 
method between the bore hole and the natural spring, and shall have all the 
physical properties, before treatment, and be of the same composition and 
quality, as the water that flows naturally to the surface of the earth. If 
spring water is collected with the use of an external force, water must continue 
to flow naturally to the surface of the earth through the spring's natural 
orifice. 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on October 28, 1996.
TRD-9615689
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: November 19, 1996
Proposal publication date: July 16, 1996
For further information, please call: (512) 458-7236

Administrative or Civil Penalties
25 TAC sec.229.261
The Texas Department of Health (department) adopts an amendment to sec.229.261, 
concerning assessment of administrative or civil penalties, with changes to the 
proposed text as published in the August 13, 1996 issue of the Texas Register 
(21 TexReg 7637); and the correction of error notice published in the September 
20, 1996, issue of the Texas Register (21 TexReg 9094). 
This section is updated in response to new or amended legislation providing for 
the assessment of administrative or civil penalties in Health and Safety Code, 
Chapter 431 (Texas Food, Drug, and Cosmetic Act); Chapter 432 (Texas Food, Drug, 
Device, and Cosmetic Salvage Act); Chapter 437 (Regulation of Food Service 
Establishments, Retail Food Stores, Mobile Food Units, and Roadside Food 
Vendors); Chapter 466 (Regulation of Synthetic Narcotic Drugs in Treatment 
Programs); Chapter 145 (Tanning Facility Regulation Act); and Chapter 146 
(Tattoo Studio Act). 
The amended section updates the penalty ranges for each severity level, includes 
new examples of violations, and permits penalty adjustments based upon 
successful implementation of an effective Hazard Analysis and Critical Control 
Point system or successful completion of an accredited Food Protection 
Management Course. 
A summary of comments and the department's responses to the comments are as 
follows. 
COMMENT: Concerning sec.229.261(i)(3)(L), one commenter believed that over-the-
counter drugs cannot be diverted. 
RESPONSE: The department disagrees with this commenter, because over-the-counter 
drugs can be diverted outside legal distribution channels for production of 
illegal drugs or used to adulterate foods. 
Minor editorial changes were made for clarification purposes. With regard to 
penalty adjustments for successful implementation of effective Hazard Analysis 
and Critical Control Point (HACCP) plans, the term "voluntary" was added to 
sec.229.261(h)(4) and sec.229.261(h)(4)(A) to clarify that only those 
establishments not required by regulation to implement HACCP are eligible for 
the penalty adjustment. Seafood processors will be required to have mandatory 
HACCP systems effective December 18, 1997. These processors and any others 
required to have HACCP systems will not be eligible for this penalty adjustment. 
The commenter was an individual who expressed a concern as previously described. 
The amendment is adopted under the Health and Safety Code, sec.sec.431.241, 
432.011, 437.056, 466.004, 145.011, 146.015, and 12.001 which provide 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.229.261 Assessment of Administrative or Civil Penalties 
(a) Proposals for assessment of administrative or civil penalties. The 
department shall propose to assess administrative or civil penalties in 
accordance with the requirements of the Health and Safety Code, Chapter 145 
relating to Tanning Facility Regulation Act; Chapter 146 relating to Tattoo 
Studio Act; Chapter 431 relating to Texas Food, Drug, and Cosmetic Act; Chapter 
432 relating to Texas Food, Drug, Device, and Cosmetic Salvage Act; Chapter 437 
relating to Regulation of Food Service Establishments, Retail Food Stores, 
Mobile Food Units, and Roadside Food Vendors; and Chapter 466 relating to 
Regulation of Narcotic Drug Treatment Programs. 
(b) Assessment of administrative or civil penalties and conduct of hearings. The 
department shall assess administrative or civil penalties and conduct hearings 
pursuant to those administrative penalties in accordance with the appropriate 
statute in subsection (a) of this section and rules adopted under it; the 
Administrative Procedure Act, Texas Government Code sec.sec.2001.001-2001.92; 
and the department's formal hearing procedures in sec.sec.1.21-1.34 of this 
title (relating to Formal Hearing Procedures).
(c) (No change.) 
(d) Severity levels. 
(1)-(2) (No change.) 
(3) Examples of severity levels. Several examples are set out in subsection (i) 
of this section. 
(e) Levels of penalties. Except as provided for in subsection (f) of this 
section relating to retail food establishments and subsection (g) of this 
section relating to tattoo studios, the department will impose different levels 
of penalties per day, per violation, for the following severity level 
violations: 
(1) Level I - $15,000-25,000;
(2) Level II - $10,000-15,000; 
(3) Level III - $5,000-10,000; 
(4) Level IV - $ 2,500-5,000; and 
(5) Level V - $1,000-2,500. 
(f) Levels of penalties for retail food establishments. As to retail food 
establishments, the department will impose different levels of penalties per 
day, per violation, for the following severity level violations:
(1) Level I - $7,500-10,000; 
(2) Level II - $5,000- 7,500; 
(3) Level III - $2,500- 5,000; 
(4) Level IV - $1,250- 2,500; and 
(5) Level V - $500- 1,250. 
(g) Levels of penalties for tattoo studios. As to tattoo studios, the department 
will impose different levels of penalties per day, per violation, for the 
following severity level violations: 
(1) Level I - $4,000-5,000; 
(2) Level II - $3,000-4,000; 
(3) Level III - $2,000-3,000; 
(4) Level IV - $1,000-2,000; and 
(5) Level V - $250-1,000. 
(h) Adjustments to penalties. The department may make adjustments to the 
penalties listed in subsections (e), (f), or (g) of this section for any one of 
the following factors. 
(1) Previous violations. The department may consider previous violations. The 
penalty may be reduced or increased within the specified range of each severity 
level for past performance. Past performance involves the consideration of the 
following factors: whether the previous violation was identical or similar to 
the current violation; how recent the previous violation was; the number of 
previous violations; and the violator's response to previous violation(s) in 
regard to correction of the problem. 
(2) Demonstrated good faith. The department may consider good faith effort(s) of 
the violator to correct the violations and demonstrate compliance with the 
department's rules and regulations as a basis to reduce the proposed penalty. 
The penalty may be reduced within the specified range of each severity level if 
good faith efforts to correct a violation have been, or are being made. Good 
faith effort will be determined by the department on a case-by-case basis. All 
good faith effort(s) to comply with the department's rules and regulations must 
be fully documented by the violator to merit consideration from the department 
as to whether to reduce the proposed penalty. 
(3) Hazard to the health and safety of the public. The department may consider 
the hazard to the health and safety of the public. The penalty may be increased 
within the specified range of each severity level when a direct hazard to the 
health and safety of the public is involved. It shall take into account, but 
need not be limited to, the following factors:
(A) whether any death(s), disease or injuries have occurred from the violation; 
(B) whether any existing conditions contribute to a situation that could expose 
humans to a health hazard; 
(C) the impact that the hazard has on various segments of the population such as 
children, surgical patients, and the elderly; and
(D) whether the consequences would be of an immediate or long-range hazard. 
(4) Implementation of a voluntary Hazard Analysis Critical Control Point (HACCP) 
Plan. 
(A) The department may consider implementation of a voluntary Hazard Analysis 
and Critical Control Point (HACCP) plan. The penalty may be reduced within the 
specified range of each severity level if the person, firm, or corporation 
implements a voluntary HACCP plan which is effective in correcting the 
violation(s) within 60 days of receiving notice of the violation(s). The HACCP 
plan is a written document based on the principles of HACCP, a food safety 
control system, which delineates the procedures to be followed to assure the 
control of a specific process or procedure. The HACCP plan shall include: 
(i) an analysis of biological, chemical, or physical hazards that may cause a 
food to be unsafe for consumption and a list of steps in the process where 
significant hazards occur with descriptions of the preventive measures; 
(ii) identification of the critical control points (CCPs) in the process at 
which control can be applied and a food safety hazard can be prevented, 
eliminated, or reduced to acceptable levels; 
(iii) critical limits or specifications which must be met for each preventive 
measure associated with each identified CCP; 
(iv) CCP monitoring requirements and procedures for using the results to adjust 
the process and maintain control; 
(v) corrective actions to be taken when monitoring indicates there is a 
deviation from established critical limit; 
(vi) effective record-keeping procedures that document the HACCP system; and 
(vii) procedures for verification that the HACCP system is working correctly. 
(B) Correction of violations through implementation of the HACCP plan will be 
determined by the department on a case-by-case basis. The HACCP plan and all 
required HACCP records shall be provided for review and copying upon request of 
an authorized agent of the commissioner. All required HACCP records shall be 
maintained at the plant for two years or longer if the product remains in 
distribution. 
(5) Requirement of food manager training. The penalty may be reduced within the 
range specified for each severity level upon successful completion of a Food 
Protection Manager Certification course accredited by the department by all 
managers of a food service establishment or retail food store operation. 
(6) Adjustments. Adjustments to the penalty amounts enumerated in paragraphs 
(1)-(5) of this subsection may not exceed or fall below the limitations 
described in subsections (e), (f), and (g) of this section.
(i) Examples of severity levels. The following examples of severity levels are 
neither exhaustive nor controlling. They reflect only the seriousness of the 
violation and not the history of previous violations, the hazard to the health 
and safety of the public, or the demonstrated good faith. 
(1) Severity I - most significant violations. 
(A) A foodborne disease outbreak results from consumption of a processed food 
product. Laboratory tests confirm the product is contaminated with pathogenic 
bacteria associated with insanitary conditions. Investigation reveals the 
processor continued operating during a sewage back-up in the food processing 
area. 
(B) A retail food establishment is implicated in a foodborne disease outbreak. 
Epidemiologic analysis identifies the food as the source of the illness. Follow-
up investigation at the establishment reveals the food is prepared or held at 
temperatures that pose a critical health hazard. 
(C) (No change.) 
(D) A person, firm, or corporation manufactures an unapproved drug and/or device 
that is associated with death or injury to the user. 
(E) A person, firm, or corporation distributes an unapproved drug and/or device 
as a cure or treatment for a life threatening illness, such as cancer or AIDS, 
and is associated with death or injury to the user.
(F) A narcotic treatment program's failure to comply with federal and state 
regulations is associated with the death or injury of a patient. 
(G) A tattoo studio does not use properly sterilized tattooing equipment and has 
consumer complaints of infection associated with the application of tattoos. 
(H) A tanning facility replaces ultraviolet lamps in its tanning device with 
higher intensity, non-equivalent lamps or installs a timer for its tanning 
device which causes the device to exceed the maximum allowable exposure time 
determined by the manufacturer. Either of these changes result in second or 
third degree burns to a user of a device, requiring the user to seek medical 
attention. 
(I) A tanning facility fails to provide protective eyewear to a user of its 
tanning device which results in the user suffering corneal burns or other 
injuries to the eye. 
(2) Severity II - very significant violations. 
(A) (No change.) 
(B) Inspection of a food establishment reveals food temperature violations 
posing a potential health hazard. Laboratory tests confirm the food is 
contaminated with pathogenic microorganisms. No foodborne illness outbreaks have 
been previously reported to the department from the owner, manager, or employee 
of establishment, or from the public. 
(C) Inspection of a food establishment reveals the presence of plumbing 
violations possibly causing contamination of the facility's water supply. 
Laboratory analysis indicates the water supply is contaminated. No foodborne 
outbreaks have been previously reported to the department from the owner, 
manager, or employee of the establishment, or from the public. 
(D) A grain dealer has distributed tons of corn for human consumption. 
Laboratory tests confirm the corn contains aflatoxin that exceeds the level for 
human consumption. 
(E) A person, firm, or corporation is distributing counterfeit drugs and/or 
devices to the public. 
(F) A person, firm, or corporation is manufacturing a drug or device determined 
by the department to be potentially harmful to the public or without pre-market 
approval. 
(G) A person, firm, or corporation diverts dangerous drugs and/or controlled 
substances outside legal distribution channels or fails to take adequate steps 
to prevent illegal distribution. 
(H) A narcotic treatment program admits a patient or patients into maintenance 
treatment who does not meet the minimum standards for admission.
(I) Evidence is discovered that a tattoo studio is illegally tattooing minors. 
(J) A tanning facility replaces ultraviolet lamps in its tanning device with 
higher intensity, non-equivalent lamps or installs a timer on its tanning device 
which causes the device to exceed the maximum allowable exposure time determined 
by the manufacturer. No injuries due to over exposure were reported by the 
owner, manager, or employee of the facility, or by the public. 
(3) Severity III - significant violations. 
(A) Inspection of a food establishment reveals the presence of pooled sewage 
near the water well. There is no indication the water supply is contaminated, 
but there is a great potential for occurrence. 
(B) Inspection of a food establishment reveals food ingredients contaminated by 
dust, insects, rodents, unclean equipment and utensils, unnecessary handling, 
coughs, sneezes, flooding drainage, overhead leakage, or overhead drippage from 
condensation. None of the contaminated food ingredients has been used to make 
the finished product. 
(C) A bottling plant has repeatedly produced beverages that contain foreign 
objects such as cigarette packages, tooth brushes, metal fragments, or other 
foreign matter. 
(D) Inspection of a food establishment reveals the establishment is operating 
without hot water or without an adequate water supply. 
(E) Inspection of a food establishment reveals employees touching ready-to-eat 
foods with unclean hands. 
(F) Inspection of a food establishment reveals unclean, unsanitized food contact 
surfaces of equipment. 
(G) The operator of an establishment refuses to permit an authorized agent of 
the department to conduct an inspection, collect samples, or otherwise perform 
his/her official duties. 
(H) A person, firm, or corporation fails to comply with the current good 
manufacturing practices for finished pharmaceuticals or devices.
(I) An applicant has falsified information on the license application to the 
department concerning a wholesale drug or device. 
(J) A narcotic treatment program delivers narcotic drugs to a patient without a 
physician's order. 
(K) An inspection reveals that a narcotic treatment program fails to perform 
required laboratory tests on program patients such as tuberculosis screens, 
urine analysis, or other required tests. 
(L) A person, firm, or corporation diverts over-the-counter drugs outside legal 
distribution channels or fails to take adequate steps to prevent illegal 
distribution. 
(M) A tattoo facility operator fails to report to the department an injury or 
illness associated with a tattoo. 
(N) A tanning facility operator allows a consumer to be exposed to ultraviolet 
radiation from its tanning device more than once in a 24-hour period. 
(O) A sanitizer used to sanitize the body contact surfaces of a tanning device 
was tested and found to have an active ingredient concentration that is lower 
than recommended by the manufacturer. The body contact surfaces of a tanning 
device are tested and found to be positive for human pathogenic bacteria. No 
injuries to users were reported to have occurred as a result of this incident. 
(P) A tanning facility fails to report injuries or illnesses associated with one 
of its tanning devices to the department. 
(4) Severity IV - violations. 
(A) A frozen shrimp processor has failed to declare sodium bisulfite on the 
labeling of his five pound and ten pound boxes of shrimp tails. 
(B) (No change.) 
(C) Inspection of a food establishment reveals evidence of current rodent or 
insect activity, but no contaminated foods are identified.
(D) A person, firm, or corporation is distributing drugs or devices that have 
been held outside of recommended storage temperatures.
(E) A person, firm, or corporation is distributing damaged and expired drugs or 
devices. 
(F) A person, firm, or corporation is distributing drugs or devices labeled only 
in a foreign language. 
(G) An applicant has falsified information on a tattoo or tanning facility 
license application. 
(H) A physician is administering or dispensing a narcotic drug to treat opiate 
addiction outside a licensed narcotic treatment program or detoxification 
hospital, not including addiction treatment performed as an incidental adjunct 
to medical or surgical treatment of conditions other than addiction. 
(I) The work surfaces in a tattoo studio are not properly cleaned and 
disinfected. 
(J) A tanning facility falsifies or fails to maintain information required to be 
kept in individual consumer records such as ultraviolet radiation exposure 
times, frequency of ultraviolet radiation exposures, or informed consent for 
minors. 
(5) Severity V - minor violations. 
(A)-(B) (No change.) 
(C) A food manufacturer fails to label or misbrands a product resulting in minor 
public health or fraudulent significance. 
(D) A person, firm, or corporation has failed to obtain a required license or 
permit from the department. 
(E) A person, firm, or corporation is distributing drugs or devices with 
inaccurate or misleading labeling which the department determines is not likely 
to cause death or injury. 
(F) A narcotic treatment program is not providing required counseling services 
for patients. 
(G) An inspection of a tattoo studio reveals the studio to be unsanitary or in 
general disrepair and there are no complaints of infection associated with the 
application of tattoos. 
(H) Warning signs in a tanning facility do not comply with size, design, or 
content requirements. 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on October 28, 1996.
TRD-9615688
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: November 19, 1996
Proposal publication date: August 13, 1996
For further information, please call: (512) 458-7236

TITLE 28. INSURANCE
PART I. Texas Department of Insurance
CHAPTER 11. Health Maintenance Organizations
SUBCHAPTER S. Solvency Standards for Managed Care Organizations
Participating in Medicaid
28 TAC sec.sec.11.1801-11.1805
The Commissioner of Insurance adopts new sec.sec.11.1801-11.1805, concerning the 
solvency standards required for managed care organizations participating in the 
Medicaid Program administered by the State of Texas. The new sections are 
adopted without changes to the proposed text as published in the October 1, 
1996, issue of the Texas Register (21 TexReg 9407). No hearing was requested by 
any person. 
Article 4413(502) sec.sec.16A-16G of the Texas Civil Statutes (as amended by 
Senate Bill 10 enacted in the 74th Legislature) provides for the development of 
a health care delivery system for the State Medicaid Program, and grants the 
Commissioner of Insurance the authority to promulgate regulations creating 
standards of solvency for participating managed care organizations. Moreover, 
Article 1.61 of the Texas Insurance Code (as amended by Senate Bill 600 enacted 
in the 74th Legislature) requires the Texas Department of Insurance, in 
conjunction with the Texas Department of Health, to establish fiscal solvency 
standards for managed care organizations serving State Medicaid clients. This 
regulation has been presented to and approved for publication by the State 
Medicaid Office and the advising MCAC Committee on September 12, 1996. The 
sections are necessary to establish the standards required under Article 
4413(502) sec.sec.16A-16G of the Texas Civil Statutes and Article 1.61 of the 
Texas Insurance Code. 
These sections create an overall buffer and safety net for the state and for 
creditors, and to reasonably ensure the financial ability of the managed care 
organizations to pay for the delivery of health care services. Moreover, no 
guaranty fund coverage exists in the event of an insolvency of a HMO, and these 
rules are designed to provide for the transition, without excessive costs to the 
state, of Medicaid clients from HMOs less likely to meet their obligations to 
HMOs that are more financially sound. Therefore, to reasonably ensure the 
prudent financial soundness of the MCOs, the capitalization level is required as 
specified herein. 
The new sections are adopted in conjunction with the related regulations being 
adopted and/or amended by the Texas Health and Human Services Commission, 1 TAC 
Chapter 353 (21 TexReg 7303), the Texas Department of Health, 25 TAC Chapter 30 
(21 TexReg 7322), and the Texas Department of Mental Health and Mental 
Retardation, 25 TAC Chapter 401 (21 TexReg 7335). 
These sections establish the standards of solvency for managed care 
organizations participating in the State Medicaid Program. Section 11.1801 
specifies the entities subject to this regulation, and requires compliance with 
other regulatory standards and requirements associated with a particular MCO. 
Section 11.1802 provides for minimum solvency requirements, which are effected 
by the existence of an unconditional guarantee from a sponsoring organization 
for the benefit of a MCO that complies with section 11.1804. In addition, 
existing MCOs and Medicaid contracts are grandfathered for one year under 
section 11.1802. Sections 11.1803 and 11.1805 delineate the requirements for 
statutory deposits and performance and fidelity bonds. 
No written comments were received by the department. 
This subchapter is adopted pursuant to Article 1.61 of the Texas Insurance Code 
which directs the Commissioner of Insurance to adopt fiscal solvency standards 
for the State Medicaid Program, and Article 4413(502) sec.sec.16A-16G of the 
Texas Civil Statutes which provides for the development of a system to deliver 
Medicaid benefits including the creation of solvency standards. Article 1.03A of 
the Texas Insurance Code authorizes the Commissioner of Insurance to promulgate 
and adopt rules and regulations for the conduct and execution of duties and 
functions by the Texas Department of Insurance.
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas on November 12, 1996.
TRD-9616364
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Effective date: December 3, 1996
Proposal publication date: October 1, 1996
For further information, please call: (512) 463-6327

TITLE 31. NATURAL RESOURCES AND CONSERVATION
PART XX. Edwards Aquifer Authority 
CHAPTER 701. Filing and Processing of Applications 
The Edwards Aquifer Authority promulgates new Chapter 701 of Title 31 of the 
Texas Administrative Code, concerning the filing and processing of permit 
applications, by adopting new subchapters A and B, sec.sec.701.1-701.5 and 
701.11- 701.13; 701.15-701.19; 701.21 and 701.22. Proposed sec.sec.701.1, 701.4, 
701.5, 701.11, 701.12, 701.13, 701.15, 701.16, 701.17, 701.18, 701.19, 701.21 
and 701.22 are adopted with changes to the proposed text as published in the 
September 3, 1996 Texas Register (21 Tex. Reg. 8401). Proposed sec.sec.702.6, 
701.14 and 701.20 are withdrawn and not adopted. Sections 701.2 and 701.3 are 
adopted without changes and will not be republished. 
The Authority adopts these rules pursuant to the Conservation Amendment of the 
Texas Constitution, Article 16, 59, and the powers and duties of the Authority 
to promulgate rules and implement and enforce a permit system for withdrawals of 
water from the Edwards Aquifer under the Edwards Aquifer Authority Act, chapter 
626, 73rd Legislature, Regular Session (1993) (the "Act"), as amended by chapter 
621, 74th Legislature, Regular Session (1995), sec.sec.1.08, 1.11, 1.14, 1.15, 
1.16, 1.17, 1.26, 1.29, 1.35, 1.36, 1.37, 1.38, and 1.40 , and under the Texas 
Water Code, Chapter 36. 
These new rules are necessary to provide a procedure by which to file an 
application for a permit authorizing withdrawals of water from the Edwards 
Aquifer with the Authority, particularly the filing of initial declarations of 
historical use under sec.1.16 of the Act. In addition, the rules specify the 
date by which declarations of historical use must be filed with the Authority. 
The deadline for filing these claims is December 30, 1996. This date carries out 
the intent of the legislation by requiring these declarations to be filed six 
months following the actual effective date of the Act. The express terms of the 
Act provided that declarations of historical use were to be filed with the 
Authority by March 1, 1994. The Act was intended by the 73rd Legislature to 
become effective on September 1, 1993, with the required filing date following 
the effective date by six months. However,the effectiveness of the Act was 
unexpectedly delayed by objections under the federal Voting Rights Act. Those 
objections were resolved by the 1995 amendment to the Act that provided for the 
election, rather than the appointment of the board of directors. 
Constitutional objections were then raised against the Act in state court that 
resulted in an injunction barring implementation of the Act. The injunction was 
dissolved by the Texas Supreme Court on June 28, 1996, and the Act thereby 
became effective on that date. Barshop v. Medina County Underground Water 
Conservation District, Case Number 95-0881. In its opinion upholding the Act, 
the Supreme Court held that the original March 1, 1994 filing date was directory 
rather than mandatory and recognized that the original intent of the Legislature 
could be carried out by requiring the filings of declarations of historical use 
six months following the actual effective date of the Act. The Supreme Court 
rejected the argument that the March 1, 1994 filing date was an immovable, fatal 
flaw in the legislation. Moving forward the filing date for these declarations 
to December 30, 1996, carries out the original legislative intent and the remedy 
for effectuating that intent endorsed by the Texas Supreme Court by providing 
for a six-month filing timeframe measured from the actual effective date of the 
Act. 
These new rules as adopted differ in some respects from the proposed published 
rules based on comments received from the public and further review by staff. 
Proposed sec.sec.701.6, 701.14 and 701.20 have been withdrawn in their entirety. 
Certain paragraphs of proposed sec.701.21, have been withdrawn and new 
paragraphs have been added. Specific changes and reasoned justification for the 
changes and agency responses to comments are addressed in the Summary of 
Comments. Adopted rules are referred to by their numbers as proposed. Because 
three sections were withdrawn in their entirety, the numbering scheme for the 
adopted rules will skip these sections. These sections, sec.sec.701.6, 701.14 
and 701.20 will be reserved for future use. 
The purpose of these rules is to prescribe a uniform procedure for filing 
applications for permits with the Authority. Subchapter A relating to general 
provisions contains sec.sec.701.1-701.5 governing the filing of permit 
applications. Section 701.1 sets out definitions and sec.701.2 states that the 
purpose of the chapter is to prescribe a uniform procedure for filing 
applications for permits. Section 701.3 lists the four types of permits 
authorized by the Act. Section 701.4 states that applications must be submitted 
on the form prescribed by the Authority, along with supporting documentation. 
Section 701.5 states that the application filing fee is $25. Proposed section 
701.6 has been withdrawn. 
Subchapter B contains rules governing the filing of declarations of historical 
use, as stated in sec.701.11. Section 701.12 states that a declaration of 
historic use is an application for initial regular permit. Section 701.13 states 
that the historical period for purposes of establishing rights based on 
historical withdrawals and use of water from the Edwards Aquifer is June 1, 1972 
to May 31, 1993, inclusive. Proposed sec.701.14 has been withdrawn. Section 
701.15 states that owners of exempt wells are not required to file an 
application with respect to those wells. Section 701.16 states that an applicant 
may seek a permit based on withdrawals by another person if the applicant is the 
current owner or successor in interest to the well from which water was 
withdrawn during the historical period. However, incidental de minimis use for 
nonexempt purposes does not affect this exemption. Section 01.17 states that 
joint owners must each sign the application individually or through an 
authorized representative, in which case the application must include written 
evidence of the authorization. If a well is jointly owned by a husband and wife 
who wish to file jointly, each must sign the application. Joint applicants must 
select one of them to represent the others in the application process, and this 
authorization must also be in writing. Section 701.18 states that a 
representative can be authorized to file an application for an applicant, but 
that the application must include written evidence of such authorization. 
Section 701.19 makes clear that the application must be filed on or before 
Monday, December 30, 1996. An application is timely filed if it is actually 
received by the Authority by that date, or if it is properly mailed and bears an 
official postmark of no later than that date. A postmark generated by a 
privately operated postage machine will not satisfy the mailbox rule provided in 
this section. Proposed sec.701.20 has been withdrawn. 
Section 701.21 lists the types of information that must be provided with the 
application. Finally, sec.701.22 states that declarations received by the 
Authority or the EUWD prior to the effective date of the rules will be 
considered received as of that date, but that such applicants must file the 
prescribed application form with the application fee by December 30, 1996. 
However, an applicant need not resubmit documentation already submitted, if the 
documentation is identified in the application, unless requested to do so by the 
general manager. The general manager will not include previously-submitted 
documentation as a part of the application unless the applicant expressly 
identifies such documentation in the application. 
Summary of Comments and Agency Responses. 
Title of the Chapter, Proposed Filing and Processing of Permit Application 
Rules. One commenter indicated that the title of the chapter is misleading 
because the processing of a permit application or issuance of a permit is not 
discussed in the rules. The commenter points out that there is no information on 
hearings, contested cases or appeal procedures. The commenter points out that in 
describing interim authorization, the language in the preamble states "until 
entry of a final and appealable order by the Authority." Again, the rules 
contain no explanation about final and appealable orders. One must assume the 
details on processing and issuing permits will be addressed later. The 
"piecemeal" approach to the permitting process causes uncertainty and confusion. 
Agency Response: The comment is well taken by the staff. A piecemeal approach to 
rulemaking may cause uncertainty and confusion. Unfortunately, development of 
Chapter 701, relating to the filing and processing of permit applications, 
required a piecemeal approach. There simply was not adequate time to develop a 
full review and hearings process on applications for historical use by the time 
the Authority believed it needed to publish this initial set of rules. The 
Authority believed it needed to provide notice to existing users as early as 
possible that December 30, 1996 will be the deadline for filing declarations of 
historical use. With that goal in mind these rules were developed.
The Authority and staff knew at the time of proposal that additional rules would 
have to be developed to complete most of the sections with regard to the review 
and hearings on applications for permits. Towards that end staff has presented 
to the Board for their consideration and possible approval for publication new 
proposed rules adding new Subchapters C, D, E, F, G and H relating to filing and 
notices, administrative review of declarations of historical use, technical 
review and initial determination of declarations of historical use, initial 
regular permit amounts and terms, hearing process, and post hearings process. 
The proposed rules will be submitted for public comment and should provide 
clarification concerning the filing and permitting process. 
General. Several commenters pointed out an apparent conflict between the 
language in the proposal preamble and the Act. The proposal preamble states that 
an applicant must prove its historical use claim by "clear and convincing 
evidence." This standard differs from the standard set out in 1.16(d)(2) of the 
Act which calls for "convincing evidence." 
Agency Response: The staff agrees that the term "clear and convincing evidence" 
may connote a greater burden of proof than does the term "convincing evidence." 
The language of the preamble is hereby amended to provide that "convincing 
evidence" is the standard by which an applicant must prove its claim . The staff 
anticipates that the second set of proposed application filing and processing 
rules will include guidelines as to what constitutes "convincing evidence." 
Users with multiple wells. Two commenters suggested that the preamble should be 
revised to make clear that a multiple well owner, in particular a large 
municipal supplier with many wells, should be able to freely transfer withdrawal 
rights from one well to another. The commenter states that historical rights 
must be established on a per-well basis, but argues that once the rights are 
established there should be no requirement that the rights be tied to particular 
wells. 
Agency response: The staff generally agrees with these comments, but does not 
perceive a need to change the preamble to deal with this issue. Transfer of 
permit rights will need to be dealt with in future rulemaking. 
Statement of statutory authority for Subchapters A and B. One commenter 
recommended striking "3.03 of the Demand Management Rules previously promulgated 
by the Edwards Underground Water District, the Authority's predecessor agency" 
in the Authority's statement of statutory authority for the proposed rules 
because those rules relate to restriction of water during times of drought based 
on springflow levels, and are not relevant to historical declarations based on 
water use levels in the Edwards Aquifer. 
Agency Response: The staff agrees that sec.3.03 of the Demand Management Rules 
deals with critical period management and is not relevant to filing of 
declarations of historical use. The reference in the statement of statutory 
authority to sec.3.03 of the Demand Management Rules previously promulgated by 
the Edwards Underground Water District is stricken. 
Use most recent year to establish rights based on landscape use. One commenter 
recommended that, because the nursery business is "a rapidly growing one," that 
historical use of water for landscape purposes should be based on the most 
recent year of use, not the 21-year historical period that ended May 31, 1993. 
Agency Response: Staff disagrees that a different standard can or should be 
applied to landscape use under the Act. No change is recommended. 
Section 701.1(5) Definitions-EUWD. One commenter suggested striking the 
definition of "Edwards Underground Water District." 
Agency Response: The Edwards Underground Water District is a predecessor agency 
to the Authority which was abolished by the Act. The reference is retained for 
clarification purposes. 
After further review, staff has made the following changes to the definitions 
section: The definition of "Act" has been amended to eliminate the reference to 
the 1995 amendment to the Edwards Aquifer Authority Act, H.B. 3189, in order to 
make clear that "Act" includes any amendments to the Act. A definition of the 
key term "existing user" has been added . The definition tracks the definition 
of the term contained in the Act, and is incorporated here for clarity and ease 
of reference. 
Section 701.4 Form. One commenter recommended that the language which reads "An 
application should be..." be changed to "An application "shall be...". Agency 
Response: The staff agrees that sec.701.4 should read "An application shall be 
submitted on a form made available for that purpose by the Authority." This 
clarifies that use of the application form prescribed by the Authority is 
mandatory. 
Section 701.5 Filing Fee. One commenter pointed out that the rule states that 
cash will be accepted but the application form states that cash will not be 
accepted. 
Agency Response: The staff anticipates that the filing of applications will be 
performed primarily by mail. In order to avoid the potential of losing cash in 
the mail, the staff recommends that sec.701.5 be changed to conform to the 
language on the application form stating that payments may be made by check or 
money order. However, the general manager has discretion to accept cash and 
other forms of payment. 
Section 701.6 Categories of Use. One commenter suggestedthat this section should 
be struck because it is not relevant to filing and processing of a permit. 
Agency Response: The staff agrees that information about current uses of water, 
which is relevant to critical period management among other issues, is not 
necessarily indicative of use during the historical period. The staff therefore 
recommends deletion of this section. Instead, information about current water 
use should be provided by each permit holder in the annual water use report that 
must be filed with the Authority by March 1 under sec.1.32 of the Act. 
Section 701.11 Declarations of Historical Use. This section was reworded after 
review by staff because it was contemplated that subchapter B would govern the 
filing and administrative review of declarations of historical use. However, in 
order to comply with the technical filing requirements of the Texas Register, 
the administrative review provisions will appear in new proposed Subchapter D. 
That subchapter is the subject of a separate rulemaking procedure. Subchapter B 
as adopted governs only the filing of declarations of historical use. 
Section 701.12 Declaration is An Application. This section has been reworded 
after further review by staff to make clear that an application must be filed 
with the Authority in accordance with chapter 701, Title 31, of the Texas 
Administrative Code. 
Section 701.13 Historical Period. This section has been reworded after further 
review by staff to make clear that only withdrawals from the Edwards Aquifer can 
qualify for historical use for purposes of obtaining an initial regular permit. 
Withdrawals of underground water that does not originate from the Edwards 
Aquifer as defined in the Act does not provide a basis for filing a declaration 
of historical use. 
Proposed sec.701.14 Eligibility (proposed but withdrawn). One commenter 
contended that this section, which states that in order to be eligible to file 
an application a person or the person's predecessor must have withdrawn water 
from a well during the historical period, conflicts with the interim 
authorization provision of the Act, sec.1.17, because the latter applies to a 
user who "owns a producing well that withdraws water from the aquifer" on the 
"effective date of this article." 
Agency response. The staff believes that the definition of "eligibility" stated 
in proposed sec.701.14 for filing of declarations pursuant to sec.1.16 of the 
Act is not in conflict with the interim authorization provision in sec.1.17 of 
the Act, although staff recognizes that there is not perfect congruity among all 
relevant sections of the Act. Under 1.16, initial regular permits are available 
to persons who can establish withdrawals of water from the Edwards Aquifer 
during the 21-year historical period of June 1, 1972 through May 31, 1993. A 
person who withdrew and beneficially used without waste water from the aquifer 
during the historical period is termed an existing user by the Act. Withdrawals 
without a permit from nonexempt wells are generally prohibited by 1.15 of the 
Act. 
Section 1.17 of the Act is an exception to this general prohibition. The section 
provides interim authorization for withdrawals and beneficial use without waste 
of water from a nonexempt well for a person who, "on the effective date of this 
article, owns a producing well that withdraws water from the aquifer... ," if 
the well is in compliance with applicable law and the person timely files a 
declaration of historical use. The "effective date of this article" is June 
28,1996, the date the Supreme Court dissolved the injunction that had prevented 
the legislation from becoming effective. 
Interim authorization ends on December 30, 1996, the last day for filing 
declarations of historical use under these rules, unless the person files a 
declaration of historical use by that date. If a declaration is timely filed, 
interim authorization continues until a final and appealable order on the 
person's application for initial regular permit is entered. Because only 
existing users are entitled to file declarations of historical use, only these 
persons may continue interim authorization beyond December 30, 1996. In other 
words, a person who qualifies for interim authorization under 1.17, but who did 
not withdraw and beneficially use water from the aquifer during the historical 
period (or who is not a successor in interest to such a person), is not entitled 
to interim authorization beyond December 30, 1996. 
In a few cases, where existing users drilled new or replacement wells between 
June 1, 1993 and June 28, 1996, they may request special consideration of the 
circumstances by the board. The Authority is generally empowered to exercise 
some discretion in individual cases in order to avoid inequity, undue hardship, 
or taking of private property, and may grant emergency permits to protect human 
life and safety. Further, the board by rule or order may provide for contractual 
transfers of interim authorization rights in appropriate circumstances. Although 
staff believes that the eligibility section is consistent with the Act, after 
further review the staff believes that this section is duplicative and should be 
withdrawn. It is clear in the Act and in other rules that only an existing user 
can file a declaration of historical use, apply for an initial regular permit, 
and extend interim authorization beyond the filing deadline. See Adopted 701.16, 
which was revised to clarify this issue. 
Section701.15 Exempt Wells . One commenter recommended that sec.701.15 should 
include language about well registrations already filed with the former Edwards 
Underground Water District. The commenter recommended that the Authority develop 
a procedure for utilizing well information already filed with the former Edwards 
Underground Water District and local groundwater conservation districts in 
Medina and Uvalde Counties. 
Agency Response: Staff agrees with this comment and amends sec.701.21 by adding 
paragraph (12) that requires that the user provide: 
A separate Well Information Sheet prescribed by the Authority, or a registration 
form from a groundwater district or other entity with the same data as the Well 
Information Sheet, for each of the wells related to the permit, accompanied by a 
photograph of the well taken approximately 100 feet from the well head. 
The requirement of a photograph has been added in order to obtain some evidence 
that the person owns or possesses the well, and to assist in field 
identification of the well. 
Sections 701.16-701.17 Whether any "user" can file a declaration. A commenter 
stated that these sections conflict with the Act to the extent they require an 
applicant to be the owner of a well. The commenter suggested that any "user" 
should be able to qualify for a historical withdrawal right. 
Agency Response: The staff generally agrees that there may be other forms of 
possessory rights apart from title ownership that could provide the foundation 
for a historical use claim. However, merely being a "user" of water is not 
sufficient to support historical withdrawal rights. Under the Act, only an 
"existing user" is entitled to an initial regular permit. An existing user, 
according to sec.1.03(10) of the Act, is "a person who has withdrawn and 
beneficially used underground water from the aquifer on or before June 1, 
1993."This definition necessarily implies that the person in question must have 
had an underlying legal right to withdraw water from an Edwards Aquifer well. 
Either that person, or that person's bona fide successor in interest, is 
eligible to seek a historical right based on that withdrawal. Otherwise, any 
person who used water from the well during the historical period, regardless of 
whether they withdrew or had any legal right to withdraw from the well, could 
claim a historic right to water produced from the well. The staff does not 
believe that this is consistent with the purpose of the Act. The staff does, 
however, believe that sec.701.16 should be reworded to clarify this point. The 
staff recommends for purposes of clarity that the phrase "bona fide present 
owner and successor in title to the well" be changed to "current owner or 
successor in interest to the well." No other changes relating to this comment 
are recommended. 
Section 701.17 Joint Application. After further review, the staff has revised 
this section to conform with a similar provision utilized by the Texas Natural 
Resource Conservation Commission. The substance of the section remains 
substantially the same. Joint owners are required to sign the application 
individually or through an authorized representative. Spouses who jointly own a 
well and who desire to file a joint application must each sign the application. 
The rationale for this section is that an initial regular permit should be 
applied for and issued in the name of all joint owners in order to avoid the 
uncertainty created by unidentified interest owners. This is especially true of 
interests that may not be of record, such as community property interests. 
Section 701.19 Time for Filing. A commenter contended that the filing date 
should be February 28, 1997, which is six months after the date the Texas 
Supreme Court issued its mandate on August 31, 1996 in Barshop v. Medina County 
Underground Water Conservation District, sending the case back to the trial 
court. The filing date stated in the rule is December 30, 1996, six months after 
the Texas Supreme Court dissolved the trial court injunction that had blocked 
the Act from taking effect. The staff adheres to the December date, because the 
Act became fully effective on June 28, 1996, when the injunction was dissolved. 
The dissolution of the injunction was immediately effective, and was not delayed 
by subsequent procedural steps in the Supreme Court. The staff recommends 
against adopting the February date because it is inconsistent with the 
Legislature's intent to require filing of declarations of historical use six 
months after the actual effective date of the Act. Adopting the later date would 
also expose those applicants who would file after December 30, 1996, to 
litigation attacking the filings as untimely. 
The proposed rule called for a filing date of Saturday, December 28, 1996. After 
further review, the filing date has been changed to Monday, December 30, 1996, 
because the Authority believes that this date is more consistent with 
legislative intent and will avoid difficulties for applicants who find 
themselves needing to file their applications on a Saturday when the offices of 
the Authority are closed. 
Proposed sec.701.20 Untimely Declaration (proposed but withdrawn). After further 
review, the staff has determined that proposed sec.701.20 is unnecessary. 
Because the Act does not allow consideration of any application for Class 2 
(additional regular) permit until all Class 1 (initial regular) permit 
applications are resolved, it is not necessary to prescribe a procedure for 
applying for Class 2 permits at this time. The section is therefore withdrawn. 
Section 701.21 Information Required in Application . A commenter generally 
stated that although an applicant is required to state in an application whether 
it is a municipal supplier of water, the type of use involved should not affect 
the historical right or control the authorized use of the such water. 
Agency response: The staff generally agrees, but no revision to these rules is 
necessary in response to this comment. The adopted rules govern the procedure 
for filing of declarations of historical use, not the substantive issue of how 
type of historical use effects the historical water right or the exercise of the 
right. 
Section 701.21(6) Information Required in ApplicationPurposes of Use. One 
commenter suggested that this subsection should be struck because it is not 
relevant. 
Agency Response: Knowing the type of historical use to which the water was 
applied is relevant because the Authority is required to determine the amount of 
water the applicant beneficially used without waste during the historical 
period. This cannot be determined without information concerning the purpose to 
which the water was applied. However, the staff agrees that information about 
current uses of water, which is relevant to critical period management among 
other issues, is not necessarily indicative of use during the historical period. 
Therefore, the staff recommends changing this section to delete the phrase after 
the comma that refers to proposed sec.701.6-Categories of Use, which has been 
withdrawn. 
Section 701.21(8) Information Required in Application. One commenter suggested 
that this section is relevant only to those seeking the maximum amount--not the 
2 acrefeet per acre allocation. 
Agency Response: This comment raises the issue of whether and to what extent a 
person who seeks to qualify for the 2-acre foot per irrigated acre "irrigation 
withdrawal floor" under sec.1.16 of the Act must also provide evidence of 
maximum annual use during any one calendar year of the historical period. The 
answer to this question is that all persons applying for initial regular permits 
must provide convincing evidence of their maximum annual use during any one 
calendar year of the historical period. However, a person who qualifies for the 
irrigation withdrawal floor by showing actual irrigation of a specified number 
of acres during any one calendar year of the historical period has satisfied the 
required showing of maximum annual use. On the other hand, such a person would 
be entitled to show that the maximum annual use was higher than the irrigation 
permit floor and to seek a permit withdrawal right based on this higher amount, 
to the extent water is available for permitting under the Act. The irrigator 
would also be entitled to prove a higher "historical average floor," which is 
not subject to proportional reduction to meet the amount of water available for 
permitting. 
In response to this comment, proposed paragraph (8) is deleted. Adopted 
paragraph (8) states the general requirement that applicants provide information 
concerning their maximum beneficial use of water without waste during any one 
calendar year of the historical period. Adopted paragraph (6) states the 
requirement that applicants who seek to qualify for the irrigation withdrawal 
floor must show the maximum number of acres irrigated during any one calendar 
year of the historical period. As discussed, for some applicants the same 
information will satisfy both paragraphs (8) and (6). 
Section 701.21 Information Required in Application. One commenter indicated that 
the application form for irrigation use asks for documentation regarding 
participation in a federal program which may affect historic use (See blue 
application form 4(F)). However, the commenter complained that there is no 
proposed rule to insure equitable treatment as specified in sec.1.16(f) of the 
Authority's enabling statute. 
Agency Response: Because the Act requires such a credit, it is not necessary to 
track this requirement in a rule. However, the staff anticipates that the next 
group of proposed filing and processing rules will include a rule incorporating 
the requirement. No change to the rule is recommended based on this comment. 
Section 701.21(11) Transferability of permit rights. One commenter stated that 
this paragraph implies that permit rights are transferable, but urged the 
Authority to include rules that expressly allow the transfer of such rights. The 
commenter argued that transferability of permit rights is an important right 
protected by the constitution. 
Agency Response: The staff agrees that permit rights are generally transferable, 
subject to the Act's limitation on leasing of permit rights with respect to 
irrigation use, and such other reasonable restrictions as may be provided by 
rule. The staff also agrees that the Authority should develop rules to regulate 
the transfer of permit rights under the Act. However, such rules would not be 
appropriately placed in chapter 701, which governs the filing and processing of 
declarations of historical use. The staff anticipates proposing a rule that 
provides that initial regular permits state that they are assignable and 
transferable, subject to the Act's limitation on leasing of irrigation water 
rights and rules of the Authority. 
After further review, staff has made the following modifications to adopted 
sec.701.21 for purposes of clarity: Paragraph (1) has been reworded to make 
clear that an authorized representative may file an application for another, but 
the application must show the basis of the authority. Paragraph (3) has been 
reworded to add "political subdivision" to clarify that a political subdivision 
may be an applicant, and to require applicants that are not natural persons to 
designate a contact person. Language has been added to paragraph (5) to make 
clear that persons who seek to qualify for the historical average permit 
withdrawal floor (average annual use during the historical period) under the 
last sentence of sec.1.16(e) of the Act must provide information showing the 
total amount of water from the Edwards Aquifer that the applicant withdrew and 
beneficially used without waste during each calendar year of the historical 
period in which the well was in use. A paragraph has been inserted following 
paragraph (5). This paragraph (6) in the adopted rules, incorporates the subject 
matter of paragraph (8) of the proposed rules, but has been reworded to make 
clear that persons who seek to qualify for an irrigation withdrawal floor under 
the penultimate sentence of sec.1.16(e) of the Act must provide documentation of 
the number of acres actually irrigated during any one calendar year of the 
historical period. Section 1.16(b) of the Act requires such documentation. 
Proposed paragraph (9) has been withdrawn because it is duplicative of other 
requests for information. 
Section 701.22 Declarations Received Prior to Effective Date. One commenter 
suggested that this section should be struck because any forms filed prior to 
December 28, 1996 were not on forms "prescribed by the EAA." In 1993, a number 
of users filed applications for historical use without using a form prescribed 
by the authority, in anticipation of the Act's originally intended effective 
date of September 1, 1993. One commenter was concerned that by recognizing these 
filings the users would be given an unfair advantage. Another commenter 
complained that persons would have to resubmit documentation already provided to 
the Authority or the EUWD. 
Agency Response: Section 701.22 was proposed to provide those users who have 
already provided information to the Authority or its predecessor agency with 
guidance as to what they need to do to comply with the Act's filing 
requirements. The rule makes clear that prior filers are subject to the general 
requirement that applicants fill out and file an application form prescribed by 
the Authority. An attempted application which is not made on the prescribed form 
is insufficient, regardless of when the attempted application was received by 
the Authority. The Authority will consider all applications for an initial 
regular permit on the basis of the information timely provided in support of the 
application in accordance with the rules, as long as the user has filed a 
completed application form with the Authority on or before December 30, 1996. 
There is no advantage given to those who have already provided information. 
However, staff believes that the rule should be revised to state that a user who 
has submitted documentation to the Authority need not resubmit the documentation 
unless requested by the general manager. Such a user must include a reference in 
the application form to any documentation previously tendered to the Authority 
or the EUWD that the applicant wishes to be considered in support of the 
application. The general manager will not include previously-submitted 
documentation as a part of the application unless the application expressly 
calls attention to and identifies the documentation.

SUBCHAPTER A.General Provisions
31 TAC sec.sec.701.1-701.5
The Authority adopts these rules pursuant to its general and special powers 
under the Edwards Aquifer Authority Act (the "Act"), Chapter 626, 73rd 
Legislature, Regular Session, 1993, as amended by chapter 621, 74th 
Legislature., Regular Session, 1995 (the "Act," sec.sec.1.08, 1.11, 1.14, 1.15, 
1.16, 1.17, 1.26, 1.29, 1.36, 1.37, 1.38, and 1.40 of the Act); and Texas Water 
Code, Chapter 36. 
The adopted sections implement the Edwards Aquifer Authority Act, chapter 626, 
73rd Legislature, Regular Session (1993), sec.sec.1.08, 1.11, 1.14, 1.15, 1.16, 
1.17 and 1.35. 

sec.701.1.Definitions.
The following words and terms when used in this chapter shall have the following 
meanings, unless the context clearly indicates otherwise: 
Act - The act creating the Edwards Aquifer Authority (Senate Bill 1477, Chapter 
626, 73rd Legislature, Regular Session, as amended). 
Applicant - A person seeking a permit from the Authority. 
Authority Offices - The principal offices of the Edwards Aquifer Authority, 
located in Bexar County, San Antonio, Texas, 1615 North St. Mary's Street, Post 
Office Box 15830, 78212.
Declaration - A declaration of historical use as described in the Act, sec.1.16.
EUWD - The Edwards Underground Water District, the predecessor agency to the 
Authority which was abolished by the Act.
Person - An individual, corporation, organization, government or governmental 
subdivision or agency, business trust, estate, trust, partnership, association, 
and any other legal entity.
Existing user - A person who withdrew and beneficially used underground water 
from the Edwards Aquifer during the historical period. 

sec.701.4.Form.
An application shall be submitted on a form made available for that purpose by 
the Authority. Documentation in support of the application should be attached to 
the application or submitted together with the application. 

sec.701.5. Filing Fee.
(a) The filing fee for an application is $25. The filing fee must be tendered to 
the Authority along with the application.
(b) The filing fee may be paid by check, money order or, at the discretion of 
the general manager, by other form of payment.
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas on October 31, 1996.
TRD-9615837
Rick Illgner
General Manager
Edwards Aquifer Authority
Effective date: November 21, 1996
Proposal publication date: September 3, 1996
For further information, please call: (210) 222-2204

SUBCHAPTER B. Declarations of Historical Use 
31 TAC sec.sec.701.11-701.13, 701.15-701.19, 701.21, 701.22
The Authority adopts these new sections pursuant to its general and special 
powers under the Edwards Aquifer Authority Act (the "Act"), Chapter 626, 73rd 
Legislature, Regular Session, 1993, as amended by chapter 621, 74th Legislature, 
Regular Session, 1995 (the "Act," sec.sec.1.08, 1.11, 1.14, 1.15, 1.16, 1.17, 
1.29, 1.36, 1.37, 1.38, and 1.40 of the Act); and Texas Water Code, Chapter 36. 
The adopted sections implement the Edwards Aquifer Authority Act, chapter 626, 
73rd Legislature, Regular Session (1993), sec.sec.1.08, 1.11, 1.14, 1.15, 1.16, 
1.17, and 1.35.

sec.701.11. Declarations of Historical Use.
This subchapter governs the filing and administrative review of declarations of 
historical use. 

sec.701.12. Declaration is An Application.
A declaration is an application for initial regular permit, and is to be filed 
with the Authority in accordance with this chapter. 

sec.701.13. Historical Period.
The historical period for purposes of proving historical use of underground 
water from the Edwards Aquifer qualifying for an initial regular permit is June 
1, 1972 through May 31, 1993, inclusive.

sec.701.15. Exempt Wells.
An owner of a well that produces 25,000 gallons of underground water per day 
orless exclusively for domestic or livestock use is not required to file an 
application with respect to that well. Incidental de minimis use for non-exempt 
purposes does not void this exemption.

sec.701.16. Applicant.
An applicant is an existing user and may file an application and apply for an 
initial regular permit in connection with withdrawal and use of underground 
water from the Edwards Aquifer during the historical period by another person, 
if and to the extent the applicant is the current owner or successor in interest 
to the well from which the underground water was withdrawn during the historical 
period. 

sec.701.17. Joint Application.
A joint application shall be signed by each applicant or each applicant's duly 
authorized agent, with written evidence of such agency to be submitted with the 
application. If a well is jointly owned by a husband and wife who wish to file a 
joint application, each shall sign the application. Joint applicants shall 
select one among them to act for and represent the others in pursuing the 
application with the Authority, with written evidence of such representation to 
be submitted with the application. 

sec.701.18. Application for Another.
A person who wishes to file an application and seek an initial regular permit in 
behalf of the owner of the well(s) upon which the application is based, such as 
a lessor seeking to perfect a water right in connection with leased land or a 
trustee or guardian seeking to perfect a water right for a beneficiary or ward, 
must file a valid power of attorney or other legal documentation with the 
Authority along with the application that establishes legal authority to file 
the declaration and seek the permit. 

sec.701.19. Time for Filing.
(a) An application must be filed with the Authority by December 30, 1996. 
(b) An application is filed with the Authority for purposes of the Act, 
sec.1.16(b) (relating to Declarations of Historical Use and Initial Regular 
Permits) if the application and application fee are: 
(1) actually received in the Authority offices by 5:00 p.m. on Monday, December 
30, 1996; or 
(2) deposited in the United States mail enclosed in a postpaid envelope properly 
addressed to the Authority, which bears an official postmark date of no later 
than Monday, December 30, 1996.

sec.701.21. Information Required in Application. 
An application must contain the following information to the extent it is 
available: 
(1) The name, address, and telephone number of the applicant and the authorized 
representative of the applicant, the relationship of the authorized 
representative to the applicant and evidence showing that the representative is 
authorized to file the application. 
(2) The name, address, and telephone number of the person in whose name the 
permit is sought to be issued. 
(3) If the person in whose name the permit is sought to be issued is a 
corporation, partnership, or other business entity, the names of the principal 
owner(s) and officers of the entity. 
(4) Facts showing that the applicant is eligible to seek an initial regular 
permit. 
(5) For those persons seeking to qualify for the historical average floor 
(average annual use during the historical period), the total amount of water 
from the Edwards Aquifer that the applicant withdrew and beneficially used 
without waste during each calendar year of the historical period. 
(6) For those persons seeking to qualify for the irrigation floor (2 acre feet 
multiplied by the number of acres actually irrigated during any one calendar 
year of the historical period), the maximum number of acres irrigated during any 
one calendar year of the historical period.
(7) The purpose(s) for which the underground water was used during each year of 
the historical period. 
(8) The amount of water the applicant claims as its maximum beneficial use of 
water without waste during any one calendar year of the historical period. 
(9) The number and location of any well the applicant claims was operated during 
the historical period and the amount of water withdrawn from that well during 
each year of the historical period. 
(10) Any facts upon which the applicant requests equitable adjustment of the 
permitted amount because the applicant's historic use was affected by a 
requirement of or participation in a federal program.
(11) If the water is to be transported, sold, leased, or transferred, a 
description of how the water will be transported or handled, the name, address, 
and telephone number of every person to whom the water will be transported, 
sold, leased, or transferred, the location to which the water will be 
transported, and the purpose for which the water will be used. 
(12) A separate Well Information Sheet prescribed by the Authority or a 
registration form from a groundwater district or other entity with the same data 
as the Well Information Sheet, for each of the wells related to the permit, 
accompanied by a photograph of the well taken approximately 100 feet from the 
well head. 
(13) Any other information that the general manager may require. 

sec.701.22. Declarations Received Prior to Effective Date.
Declarations received by the Authority or the EUWD prior to the effective date 
of these rules will be considered received by the Authority as of that date. 
Persons filing such declarations must file a completed application form and 
application fee with the Authority in accordance with sec.701.4 and sec.701.18 
of this title (relating to Application Forms and Time for Filing of Declarations 
of Historical Use), but need not resubmit documentation already submitted and 
identified in the application, unless requested to do so by the General Manager. 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas on October 31, 1996.
TRD-9615838
Rick Illgner
General Manager
Edwards Aquifer Authority
Effective date: November 21, 1996
Proposal publication date: September 3, 1996
For further information, please call: (210) 222-2204