ADOPTED RULES
An agency may take final action on a section 30 days after a proposal has been 
published in the Texas Register. The section becomes effective 20 days after the 
agency files the correct document with the Texas Register, unless a later date 
is specified or unless a federal statute or regulation requires implementation 
of the action on shorter notice.
If an agency adopts the section without any changes to the proposed text, only 
the preamble of the notice and statement of legal authority will be published. 
If an agency adopts the section with changes to the proposed text, the proposal 
will be republished with the changes.

TITLE 4. AGRICULTURE
PART II. Texas Animal Health Commission
CHAPTER 43. Tuberculosis
SUBCHAPTER C. Eradication of Tuberculosis in Cervidae
4 TAC sec.43.20
The Texas Animal Health Commission adopts an amendment to sec.43.20, concerning 
definitions relating to eradication of tuberculosis in cervidae (accredited 
herd; designated tuberculosis epidemiologist; ELISA test; individual herd plan; 
monitored herd; and surveyed herd), with changes to the proposed text as 
published in the July 18, 1997, issue of the Texas Register (22 TexReg 6724).
The amendment is being adopted to bring TAHC regulations in compliance with 
federal standards. 
No comments were received regarding this adoption. 
The amendment is adopted under the Texas Agriculture Code, Chapter 161, 
Subchapter C, sec.sec.161.041 and 161.046 which authorize the Commission to 
enact rules to eradicate tuberculosis, including rules concerning testing, 
movement, inspection, and treatment. 

sec.43.20. Definitions. 
The following words and terms, when used in this subchapter, shall have the 
following meanings, unless the context clearly indicates otherwise.
Accredited Herd - A herd that has passed at least three consecutive official 
tuberculosis tests of all eligible animals conducted at nine to 15 month 
intervals, has no evidence of bovine tuberculosis, and meets the requirements of 
the UM&R. 
Designated Tuberculosis Epidemiologist (DTE) - An epidemiologist who has 
demonstrated the knowledge and ability to perform the functions specified by the 
Bovine Tuberculosis Eradication Uniform Methods and Rules. The DTE must be 
selected jointly by the cooperating State Animal Health Official, the Area 
Veterinarian in Charge, and the Regional Epidemiologist. The National Animal 
Health Programs staff must concur in the appointment. The DTE has the 
responsibility to determine the scope of epidemiological investigations, assist 
in development of individual herd plans, and to coordinate disease surveillance 
and eradication programs within their geographic area of responsibility. The DTE 
has authority to make independent decisions concerning the use and 
interpretation of diagnostic tests and management of affected herds when those 
actions are supported by sound disease eradication principles.
ELISA Test - The enzyme linked immunosorbant assay component of the BTB Test is 
recognized as a presumptive test for Bovine Tuberculosis in Cervidae. The ELISA 
test may be used to meet intrastate change of ownership test requirements. 
Individual Herd Plan - A written disease management plan that is designed by the 
herd owner and/or other herd representative and a State or Federal veterinarian 
to eradicate tuberculosis from an affected herd while reducing human exposure to 
the disease. The herd plan will include appropriate herd test frequencies, tests 
to be employed, and any additional disease or herd management practices deemed 
necessary to eradicate tuberculosis from the herd in an efficient and effective 
manner. The plan must be approved by the State Animal Health Official and the 
Area Veterinarian in Charge, and have the concurrence of the Regional or 
Designated Tuberculosis Epidemiologist.
Monitored Herd - A herd on which identification records are maintained on 
animals over one year of age slaughtered and inspected for tuberculosis at an 
approved State/Federal slaughter facility or an approved laboratory, and animals 
tested negative for tuberculosis in accordance with the requirements for 
interstate movement specified in the Tuberculosis Eradication in Cervidae 
Uniform Methods and Rules. The initial qualifying total herd size is the annual 
average of animals one year of age or older during the initial qualifying 
period, which period shall not exceed three years. The combined number of 
slaughtered or tested animals in the sample must be evenly distributed over a 
three year period, and no less than half of the qualifying animals must be 
slaughter inspected. The rate to detect infection at a two percent prevalence 
level with 95 percent confidence would require a maximum number of 178 animals. 
Figure 1: 4 TAC 43.20, Appendix 1 and 2. 
Surveyed Herd - A cervid herd in which surveillance records are maintained on 
all animals over one year of age that are surveyed for evidence of bovine 
tuberculosis by routine post mortem inspection at an approved state/federal 
slaughter facility, or approved diagnostic laboratory, or routine tuberculosis 
tests performed by a designated accredited veterinarian or by other appropriate 
surveillance methods approved by a representative of the TAHC. 
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 4, 1997.
TRD-9714568
Terry Beals, DVM
Executive Director
Texas Animal Health Commission
Effective date: October 1, 1997
Proposal publication date: July 18, 1997
For further information, please call: (512) 719-0714

4 TAC sec.43.21
The Texas Animal Health Commission adopts an amendment to sec.43.2, concerning 
general requirements relating to eradication of tuberculosis in cervidae 
(disposition of tuberculin-responding cervidae; retest standards for high-risk 
herds), with changes to the proposed text as published in the July 18, 1997, 
issue of the Texas Register (22 TexReg 6725). 
The amendment is being adopted to bring TAHC regulations in compliance with 
federal standards. 
No comments were received regarding this amendment. 
The amendment is adopted under the Texas Agriculture Code, Chapter 161, 
Subchapter C, sec.sec.161.041 and 161.046 which authorize the Commission to 
enact rules to eradicate tuberculosis, including rules concerning testing, 
movement, inspection, and treatment. 

sec.43.21. General Requirements.
(a)-(c) (No change.) 
(d) Disposition of Tuberculin-Responding Cervidae. 
(1)-(2) (No change.) 
(3) Suspects to the comparative cervical test or equivocal to the BTB shall 
remain under quarantine until: 
(A) comparative cervical suspects are retested by the CCT after 90 days; or 
(B) BTB equivocal animals are retested by the BTB test optimally before 60 days 
following the SCT injection; or 
(C) such animals are shipped under permit directly to a slaughter facility under 
state or federal inspection, or necropsied. If such animals are found without 
evidence of M. bovis infection by histopathology and cultured (including 
selected NGL specimens submitted from animals having no gross lesions indicative 
of tuberculosis), they shall be considered negative for tuberculosis. 
(4) An animal meeting the suspect criteria on two successive CCT or two BTB 
equivocal tests followed by one suspect CCT test shall be classified as a 
reactor and be identified as such. The testing veterinarian must justify 
exceptions in writing and have the concurrence of State or Federal animal health 
personnel. 
(e)-(g) (No change.) 
(h) Retest Schedules for High Risk Herds. 
(1) In herds with a history of lesions compatible or suggestive for tuberculosis 
by histopathology, two complete annual herd tests shall be given after release 
from quarantine. Herds with a bacteriologic isolation of a Mycobacteria species 
other than M.bovis should be considered negative for bovine tuberculosis with no 
further testing requirements. 
(2) In a newly assembled herd on premises where a tuberculosis herd has been 
depopulated, two annual herd tests shall be applied to all animals. The first 
test must be approximately six months after assembly of the new herd. If the 
premises are vacated for over one year, these requirements may be waived. 
(3) Exposed animals previously sold from known infected herds shall be 
depopulated if possible, or tested with the SCT by State or Federal 
veterinarians. The BTB test may be used simultaneously with the SCT as an 
additional diagnostic test. All animals positive to either test shall be 
classified as reactors. 
(A) If bovine tuberculosis is confirmed in the exposed animal(s), the remainder 
of the receiving herd shall be classified as an infected herd and handled 
according to subsection (f)(2) of this section. 
(B) If negative to the test, the exposed animal(s) will subsequently be handled 
as if a part of the infected herd of origin for purposes of testing, quarantine 
release, and the five annual high-risk tests. The remainder of the herd shall be 
tested at the time of the initial investigation and retested in one year with 
the SCT. Supplemental diagnostic tests may be used if needed.
(4) (No change.) 
(i) (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 4, 1997.
TRD-9714569
Terry Beals, DVM
Executive Director
Texas Animal Health Commission
Effective date: October 1, 1997
Proposal publication date: July 18, 1997
For further information, please call: (512) 719-0714

4 TAC sec.43.22
The Texas Animal Health Commission adopts an amendment to sec.43.22, concerning 
herd status plans for eradication of tuberculosis in cervidae, with changes to 
the proposed text as published in the July 15, 1997, issue of the Texas Register 
(22 TexReg 6519). 
The amendment is being proposed to establish standards for accredited, 
monitored, qualified, and surveyed herds. 
No comments were received regarding the amendment. 
The amendment is adopted under the Texas Agriculture Code, Chapter 161, 
Subchapter C, sec.sec.61.041 and 161.046 which authorizes the Commission to 
enact rules to eradicate tuberculosis, including rules concerning testing, 
movement, inspection, and treatment. 

sec.43.22. Herd Status Plans For Cervidae.
(a) Accredited Herd Plan. 
(1) Animals to be tested. Testing of herds for accreditation or reaccreditation 
shall include all Cervidae and all other hoof stock over 12 months of age and 
animals under 12 months of age that are not natural additions, except that 
animals under 12 months of age that are not natural additions that were born in 
and originate from an accredited herd will not need to be tested. 
(2) Qualifying standards. To meet the requirements for accredited herd status, 
the herd must pass at least three consecutive official tests for tuberculosis at 
nine to 15 month intervals with no evidence of bovine tuberculosis disclosed. 
Herds meeting these standards shall be issued a certificate by the Commission. 
(3)-(4) (No Change.) 
(b) Monitored Herd Plan. 
(1) Requirements. Identification records must be maintained on animals over one 
year of age slaughtered, inspected, and found negative for tuberculosis at an 
approved slaughter facility or at an approved diagnostic laboratory. Such 
records may also include animals that have been tested negative for tuberculosis 
in accordance with the requirements for interstate movement. A monitored herd 
must identify animals over one year of age at slaughter, and animals tested 
negative for interstate movement at a rate to detect infection at a two percent 
prevalence level with 95 percent confidence evenly distributed over a three year 
period. No less than half of the qualifying animals must be slaughter inspected. 
This rate would require a maximum of 178 animals. The qualifying total herd size 
is the annual average of herd members over 1 year of age maintained during the 
initial test period, which period shall not exceed three years.
Figure 1: 4 TAC sec.43.22(b)(1) Appendix 1 and 2 
(2) Maintenance of Monitored Herd Status. For monitored herd status to be 
renewed, an annual report shall be submitted by the person, firm or corporation 
responsible for the management of the herd to the Commission prior to the 
anniversary date. This report shall give the number of animals currently in the 
herd and the number of animals over 1 year of age, identified and slaughtered at 
a State/Federal approved slaughter facility and animals tested negative for 
tuberculosis in accordance with the requirements for interstate movement during 
the preceding year. The number of slaughter inspections and animals tuberculosis 
tested in accordance with the requirements for interstate movements reported in 
any given year must be at least 25.0% of the number required to initially 
qualify a herd of this size for monitored herd status, provided, however, that 
during each consecutive three year period, 100 percent of the initial qualifying 
total shall be achieved. 
(3) Additions. Herd additions must originate from one of the following: 
(A) an Accredited Herd. 
(B) a Qualified or Monitored Herd. Provided, the individual animals for addition 
were negative to a tuberculosis test conducted within 90 days prior to entry. 
(C) a herd not meeting the requirements of subparagraph (A) or (B) of this 
paragraph. Individual animals for addition must be isolated from other members 
of the herd of origin, and pass two negative official tests for tuberculosis, 
conducted at least 90 days apart, provided that the second test was conducted 
within 90 days prior to movement to the premises of the monitored herd. The 
additions must be kept in isolation from all members of the monitored herd until 
negative to an official tuberculosis test conducted at least 90 days following 
the date of entry. Animals added under this paragraph shall not receive 
monitored herd status for sale purposes until they are negative to a retest 90 
days after entry. 
(c) Qualified Herd Plan for Cervidae. 
(1) Animals to be tested. Testing of herds for qualified herd status shall 
include all cervidae over 12 months of age and any animals under 12 months of 
age that are not natural additions, except such animals originating from 
accredited, qualified, or monitored herds. 
(2) Qualifying Standards. To meet the requirements for qualified herd status, 
the herd must pass one official test for tuberculosis, within a seven month 
period with no evidence of bovine tuberculosis disclosed. The qualified herd 
status remains in effect for 12 months following the qualifying test. 
(3) Additions. Herd additions must originate directly from one of the following: 
(A) an accredited herd, 
(B) a monitored or qualified herd, provided that the individual animals for 
addition were negative to an official tuberculosis test conducted within 90 days 
prior to entry, 
(C) a herd not meeting the requirements of subparagraphs (A) or (B) of this 
paragraph. Individual animals for addition must be isolated from other members 
of the herd of origin and must have negative results to two official tests for 
tuberculosis, conducted at least 90 days prior to movement to the premises of 
the qualified herd. The additions must be kept in isolation from all members of 
the qualified herd until they are negative to an official tuberculosis test 
conducted at least 90 days following the date of entry. 
(4) Animals added under paragraph (3)(C) of this subsection shall not receive 
qualified herd status for sale or movement purposes until they are negative to a 
retest 90 days after entry. 
(d) Surveyed Herd. 
(1) Requirements - Surveillance records must be maintained on all animals over 
one year of age harvested and inspected or tested without evidence of bovine 
tuberculosis: 
(A) at an approved slaughter facility with state/federal meat inspection, 
approved diagnostic laboratory, and/or 
(B) routine tuberculosis testing of individual animals or consignments performed 
by a designated accredited veterinarian, and/or 
(C) other appropriate methods of surveillance approved by a representative of 
the TAHC. 
(2)-(3) (No Change.) 
(e) Status of newly assembled herds. A newly assembled herd shall assume the 
herd status of the herd from which the animals originated. If the herd is 
assembled from more than one herd, it shall assume the status of the originating 
herd with the lowest status. A newly assembled herd shall also assume the 
testing schedule of the herd which status it assumes. These animals must have no 
exposure to cervidae from herds of lesser status than the herd of origin which 
is determining the status of the newly assembled herd. 
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 4, 1997.
TRD-9714570
Terry Beals, DVM
Executive Director
Texas Animal Health Commission
Effective date: October 1, 1997
Proposal publication date: July 15, 1997
For further information, please call: (512) 719-0714

4 TAC sec.43.23
The Texas Animal Health Commission adopts an amendment to sec.43.23, concerning 
tuberculosis testing requirements for cervidae entering Texas, without changes 
to the proposed text as published in the July 18, 1997, issue of the Texas 
Register (22 TexReg 6726). 
The amendment is being adopted to establish standards for accredited, monitored, 
qualified, and surveyed herds. 
No comments were received regarding the amendment.
The amendment is adopted under the Texas Agriculture Code, Chapter 161, 
Subchapter C, sec.sec.161.041 and 161.046 which authorize the Commission to 
enact rules to eradicate tuberculosis, including rules concerning testing, 
movement, inspection, and treatment. 
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 4, 1997.
TRD-9714571
Terry Beals, DVM
Executive Director
Texas Animal Health Commission
Effective date: October 1, 1997
Proposal publication date: July 18, 1997
For further information, please call: (512) 719-0714

TITLE 13. CULTURAL RESOURCES
PART I. Texas State Library and Archives Commission
CHAPTER 6.State Records
Records Retention Scheduling
13 TAC sec.6.10
The Texas State Library and Archives Commission adopts an amendment to sec.6.10, 
concerning a revised, second edition of the Texas State Records Retention 
Schedule, with changes to the proposed text as published in the August 19, 1997 
issue of the Texas Register (22 TexReg 7969). As the result of public comment, 
minor changes have been made to the schedule adopted under this rule. 
The Texas State Library and Archives Commission, under authority of Government 
Code, sec.441,185(f), may establish mandatory minimum retention periods for any 
records of state agencies that are not established by another federal or state 
law, regulation, or rule of court. The commission has revised the Texas State 
Records Retention Schedule based on comment from its users, changes to state or 
federal laws or regulations, and a re-appraisal of the role and function of 
certain records maintained by state agencies since the adoption of the first 
edition of the schedule. The schedule has been extensively revised to make it 
easier to use by state agencies. 
State agencies are required under Government Code, sec.441.185 to submit records 
retention schedules to the state records administrator for approval by the 
director and librarian and the state auditor. The adoption of the second edition 
of the Texas State Records Retention Schedule will simplify the means by which 
state agencies fulfill their statutory duties. 
The commission received one comment concerning adoption of the rule. A commenter 
pointed out two errors in internal cross-references in the schedule adopted 
under this amended rule. The commission agrees that cross-references made to 
other item numbers at item numbers 1.1.028 and 4.5.004 in the schedule were 
incorrect and they have been corrected. 
The following changes have been made to the schedule to reflect new or amended 
state laws that took effect subsequent to the proposal of the rule. The citation 
to Government Code, sec.441.037 on page v of the schedule is corrected to 
Government Code, sec.441.185 to reflect the enactment of a new state records 
law, effective September 1, 1997. 
The term "records administrator" on page vii and "records administrators" on 
page x and at item numbers 1.1.057 and 2.1.002 are changed to "records 
management officer" and "records management officers" respectively to reflect 
the new title of state agency records managers as defined in Government Code, 
sec.441.180, effective September 1, 1997. 
Two references to the Secretary of State at item number 1.1.053 in the schedule 
are changed to the Texas Ethics Commission to reflect the transfer of the 
administration and enforcement of Government Code, Chapter 2004 (Representation 
Before State Agencies) to that commission as of September 1, 1997. 
The commission received written comment from the Employees Retirement System of 
Texas. 
The amendment, proposed under the subsequently repealed Government Code, 
sec.441.037 and sec.441.054, is adopted under Government Code, sec. 441.185(f), 
which took effect September 1, 1997, and which permits the commission to adopt 
minimum retention periods for state records. 

sec.6.10. Record Retention Schedules. 
The retention periods for and disposition of certain state records must be in 
accordance with the Texas State Records Retention Schedule (2nd Edition).
FIGURE 1: 13 TAC sec.6.10. 
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 4, 1997.
TRD-9714580
Raymond Hitt
Assistant State Librarian
Texas State Library and Archives Commission
Effective date: January 1, 1998
Proposal publication date: August 19, 1997
For further information, please call: (512) 463-5436

TITLE 16. ECONOMIC REGULATION
PART I. Railroad Commission of Texas
CHAPTER 3.Oil and Gas Division
16 TAC sec.3.64
The Railroad Commission of Texas adopts the repeal of sec.3.64, relating to out-
of-state sale of gas produced from publicly owned and leased minerals, without 
changes to the version published in the September 5, 1997, issue of the Texas 
Register (22 TexReg 8815). Although the Texas Administrative Code section number 
is 3.64, the rule is commonly known as "Statewide Rule 69." The repeal is 
adopted to implement Senate Bill 1487 (S.B. 1487) enacted by the 75th 
legislature and effective September 1, 1997. S.B. 1487 repeals sec.sec.52.291 
through 52.294 and 52.296 of the Texas Natural Resources Code. The repeal of 
these sections necessitates the repeal of Statewide Rule 69. 
No comments were received regarding the adopted repeal. 
The commission adopts the repeal pursuant to Texas Natural Resources Code, 
sec.sec.81.052, 85.042, 85.201, and 86.042, which authorize the commission to 
prevent waste of oil and gas and to protect correlative rights. Texas Natural 
Resources Code, sec.sec.52.29-52.294 and 52.296, are affected by the repeal. 
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 4, 1997.
TRD-9714578
Mary Ross McDonald
Deputy General Counsel, Office of the General Counsel
Railroad Commission of Texas
Effective date: September 5, 1997
Proposal publication date: November 25, 1997
For further information, please call: (512) 463-7008

PART II. Public Utility Commission of Texas
CHAPTER 23.Substantive Rules
Records and Reports
16 TAC sec.23.11
The Public Utility Commission of Texas adopts amendments to sec.23.11, relating 
to General Reports, with changes to the proposed text as published in the August 
26, 1997 issue of the Texas Register (22 TexReg 8493). The amendments will 
clarify procedural aspects of the equal opportunity reporting requirement. These 
amendments were adopted in Project Number 17295. 
The commission received written comments on the proposed amendments from: El 
Paso Electric Company (EPEC); the Lower Colorado River Authority (LCRA); and 
Central Power and Light Company, Southwestern Electric Power Company, and West 
Texas Utilities Company, the Texas electric utility operating companies of 
Central and South West Corporation (CSW). 
EPEC suggested that the proposed language of sec.23.11(f)(2) be changed to 
clarify that the Texas-based numbers reported by multi-jurisdictional utilities 
should be based on the totals already reported to other governmental agencies. 
The commission agrees with EPEC's suggestion and amends sec.23.11(f)(2) 
accordingly. 
LCRA construed the proposed language of sec.23.11(q)(8) to impose a reporting 
burden on LCRA greater than that imposed by the U.S. Equal Employment 
Opportunity Commission (EEOC). LCRA states that as a political jurisdiction with 
100 or more employees, it is required to file EEOC Form 164 by September 30 of 
every odd- numbered year. LCRA asserts that the proposed amendment to 
sec.23.11(q)(8) would require it to either generate a new report or request a 
waiver from the commission. 
The commission disagrees with LCRA's reading of the proposed amendment. The 
proposal to change the filing deadline in sec.23.11(q)(8) does not affect the 
obligation to file that is imposed by sec.23.11(f). In even-numbered years, if 
LCRA files no report with the EEOC, or other governmental agencies, then no 
report is required for that year's data. For example, a report filed with the 
EEOC on September 30, 1997 should be filed with the commission by February 15, 
1998. If LCRA does not file a report in calendar year 1998, no report is due to 
the commission by February 15, 1999. Because of possible confusion highlighted 
by LCRA's comments, the commission amends sec.23.11(q)(8) to clarify the filing 
obligation and deadline. 
CSW commented that it has implemented software changes that will enable it to 
comply with the proposed amendments. 
The amendments are adopted under the Public Utility Regulatory Act, 75th 
Legislature, Regular Session, chapter 166, sec.1, 1997 Texas Session Law Service 
732 (Vernon) (to be codified as Texas Utilities Code Annotated sec.14.002) 
(PURA), which provides the Public Utility Commission of Texas with the authority 
to make and enforce rules reasonably required in the exercise of its powers and 
jurisdiction. 
Cross Index to Statutes: Public Utility Regulatory Act sec.14.002.

sec.23.11.General Reports. 
(a)-(e) (No change.) 
(f) Equal opportunity reports. 
(1) The term "minority group members," when used within this subsection, shall 
include only members of the following groups: 
(A) African-Americans; 
(B) American Indians; 
(C) Asian-Americans; 
(D) Hispanic-Americans and other Americans of Hispanic origin; and 
(E) women. 
(2) Each utility that files any form with local, state or federal governmental 
agencies relating to equal employment opportunities for minority group members, 
(e.g., EEOC Form EEO-1, FCC Form 395, RUS Form 268, etc.) shall file copies of 
such completed form with the commission. If such form submitted by a multi-
jurisdictional utility does not indicate Texas- specific numbers, the utility 
shall also prepare, and file with the commission a form, in the same format and 
based on the numbers contained in the form previously filed with local, state or 
federal governmental agencies, indicating Texas-specific numbers. Each utility 
shall also file copies of any other forms required to be filed with local, state 
or federal governmental agencies which contain the same or similar information, 
such as personnel data identifying numbers and occupations of minority group 
members employed by the utility, and employment goals relating thereto, if any. 
(3) (No change.) 
(4) Any utility filing with the commission any documents described in paragraphs 
(2) and (3) of this subsection shall file two copies of such documents with the 
commission's filing clerk under the project number assigned by the Public 
Utility Commission's Central Records Office for that year's filings. Utilities 
shall obtain the project number by contacting Central Records. 
(5) On May 1 of each year, the commission shall submit a report concerning the 
filed reports to the Texas legislature. 
(g)-(p) (No change.) 
(q) Due dates of reports. All periodic reports must be received by the 
commission on or before the following due dates unless otherwise specified in 
this section. 
(1)-(7) (No change.) 
(8) A utility that files a report with local, state or federal governmental 
agencies and that is required by subsection (f) of this section to file such 
report with the commission must file the report by February 15 of the year it is 
filed with the local, state or federal agencies. If the report is filed with 
local, state or federal agencies after February 15, the utility shall file the 
report with the commission by February 15 of the next year. 
(9) (No change.) 
(r) (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 5, 1997.
TRD-9714664
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: November 25, 1997
Proposal publication date: August 26, 1997
For further information, please call: (512) 936-7308

TITLE 19. EDUCATION
PART I. Texas Higher Education Coordinating Board
CHAPTER 5.Program Development
SUBCHAPTER H.Approval of Distance Learning for Public Colleges and Universities
19 TAC sec.sec.5.151, 5.154, 5.155
The Texas Higher Education Coordinating Board adopts the repeal of Chapter 5, 
Subchapter H, sec.5.151, sec.5.154, sec.5.155 concerning Approval of Distance 
Learning for Public Colleges and Universities without changes to the proposed 
text as published in the August 26, 1997 issue of the Texas Register (22 TexReg 
8465). 
Comments were received from the University of Texas System, Texas Tech 
University, Texas A & M University and Stephen F. Austin State University. Some 
of schools recommended that we redefine "courses offered to individuals" to 
allow students to meet in group settings such as libraries also to expand the 
definition of "program" to differentiate between credit and non-credit programs 
and eliminate the 20% growth rule. The agency did not agree with these 
recommendations. Another recommendation was made to look at the concurrence 
process to provide guidelines under which institutions could object to courses 
being offered in their territory. The agency did not agree with the 
recommendation; they did not think new concurrence guidelines were necessary. 
There was a request for clarification of "programs offered via distance 
learning" to include if periodic visits to campus would be considered in 
determining if a course is on or off-campus. Recommendations were made to edit 
references to coincide with terms described and the agency agreed and made 
changes accordingly. Also, recommendations to clarify conditions under which 
exemptions may be granted and clarify conditions under which a large block of 
courses which did not constitute a degree program could be offered. The agency 
disagreed and felt the wording was clear. 
The repeal of the rules is adopted under Texas Education Code, Section 61.051(j) 
which provides the Texas Higher Education Coordinating Board with the authority 
to adopt rules concerning Approval of Distance Learning for Public Colleges and 
Universities. 
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 5, 1997.
TRD-9714726
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Corrdinating Board
Effective date: November 26, 1997
Proposal publication date: August 26, 1997
For further information, please call: (512) 483-6162

19 TAC sec.sec.5.151, 5.154, 5.155
The Texas Higher Education Coordinating Board adopts new sections to Chapter 5, 
Subchapter H, sec.5.151, sec.5.154, sec.5.155 concerning Approval of Distance 
Learning for Public Colleges and Universities with changes to the proposed text 
as published in the August 26, 1997 issue of the Texas Register (22 TexReg 
8465). The change was made to sec.5.155.
Comments were received from the University of Texas System, Texas Tech 
University, Texas A & M University and Stephen F. Austin State University. Some 
of schools recommended that we redefine "courses offered to individuals" to 
allow students to meet in group settings such as libraries also to expand the 
definition of "program" to differentiate between credit and non-credit programs 
and eliminate the 20% growth rule. The agency did not agree with these 
recommendations. Another recommendation was made to look at the concurrence 
process to provide guidelines under which institutions could object to courses 
being offered in their territory. The agency did not agree with the 
recommendation; they did not think new concurrence guidelines were necessary. 
There was a request for clarification of "programs offered via distance 
learning" to include if periodic visits to campus would be considered in 
determining if a course is on or off-campus. Recommendations were made to edit 
references to coincide with terms described and the agency agreed and made 
changes accordingly. Also, recommendations to clarify conditions under which 
exemptions may be granted and clarify conditions under which a large block of 
courses which did not constitute a degree program could be offered. The agency 
disagreed and felt the wording was clear. 
The new rules are adopted under Texas Education Code, Section 61.051(j) which 
provides the Texas Higher Education Coordinating Board with the authority to 
adopt rules concerning Approval of Distance Learning for Public Colleges and 
Universities. 

sec.5.155. Annual Plan for Distance Learning. 
(a) Unless specifically exempted by the Board, all distance learning instruction 
taught for credit and which will be reported for formula funding must be 
submitted for annual review by appropriate higher education Regional Councils or 
peer institutions as provided in this subchapter. Non-credit adult and 
continuing education courses offered at a distance by universities and health 
science centers do not fall under the purview of this Subchapter. The annual 
review and approval of distance learning credit courses will follow the annual 
plan procedure described in Sections 5.156, 5.157 and 5.158 of this title 
(relating to Approval of Distance Learning for Public Colleges and 
Universities). 
(b) An exception to this annual review process is hereby granted for courses 
delivered exclusively to individuals where instruction is accessed by personal 
computer, video cassette recorder or combination of the two and delivered to the 
individual's residence or place of business. Even though exempt from annual 
review, courses delivered to individuals must be reported in accordance with the 
Board's uniform reporting system. 
(c) The exemption granted in section 5.155(b) of this title (relating to Annual 
Plan for Distance Learning) does not apply to courses delivered to any setting 
including schools, military, corporate or other commercial site where a group of 
two or more students are gathered. 
(d) Institutions may enroll students from outside Texas in distance learning 
courses provided that credit hours generated by such students are not submitted 
for formula funding. (See section 5.158(a)(4) and section 5.159(b) of this title 
relating to Approval of Distance Learning for Public Colleges and Universities.) 
(e) In addition to Section 5.155(b) of this title (relating to Approval of 
Distance Learning for Public Colleges and Universities) and upon request from 
institutions, the Board may exempt from annual review:
(1) courses offered by one public institution on the campus of another public 
institution, 
(2) courses taught on military bases or in correctional institutions, 
(3) courses at sites designated by the Board as auxiliary locations; 
(4) courses offered as part of approved distance learning degree programs; and 
(5) courses pertaining to student teaching, internships, clinical instruction, 
practica, cooperative education work stations, and field classes (when limited 
to campus-based students). Instruction offered under all such exemptions, 
however, must still be reported in accordance with the Board's uniform reporting 
system and will be subject to monitoring for quality. 
(f) If distance learning instruction is provided regularly in an approved 
cooperative degree program, in a correctional institution, on a military base, 
or at other sites where an institution needs to utilize resources not normally 
available on its main campus, the site where the instruction is received may be 
recognized as an Auxiliary Location by the Board. Auxiliary locations are 
recognized as having a specific, defined academic mission; expansion beyond the 
authorized mission requires prior approval of the Board. 
(g) In approving Annual Plans, the Commissioner may give preference for the 
delivery of distance learning courses or degree programs which rely principally 
upon faculty travel off-campus or out-of-district to the nearest institution 
willing and able to deliver the instruction. 
(h) The Commissioner may approve, as amendments to an institution's Annual Plan, 
courses submitted not later than two weeks after the beginning of any semester 
or summer session. The Commissioner shall not approve additional courses in 
excess of 20 percent of the number of courses previously approved as part of the 
Annual Plan for the requesting institution, or ten courses, whichever is 
greater. Such courses must first be submitted for consideration by public and 
independent institutions in the appropriate Regional Council(s).
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 5, 1997.
TRD-9714725
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board 
Effective date: Novmeber 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 483-6162

19 TAC sec.sec.5.152, 5.156-5.159
The Texas Higher Education Coordinating Board adopts amendments to Chapter 5, 
Subchapter H, sec.5.152, sec.5.156, sec.5.157, sec.5.158, sec.5.159 concerning 
Approval of Distance Learning for Public Colleges and Universities with changes 
to the proposed text as published in the August 26, 1997 issue of the Texas 
Register (22 TexReg 8465). The changes were made in sec.5.152, sec.5.156, 
sec.5.157, and sec.5.159. 
Comments were received from the University of Texas System, Texas Tech 
University, Texas A & M University and Stephen F. Austin State University. Some 
of schools recommended that we redefine "courses offered to individuals" to 
allow students to meet in group settings such as libraries also to expand the 
definition of "program" to differentiate between credit and non-credit programs 
and eliminate the 20% growth rule. The agency did not agree with these 
recommendations. Another recommendation was made to look at the concurrence 
process to provide guidelines under which institutions could object to courses 
being offered in their territory. The agency did not agree with the 
recommendation; they did not think new concurrence guidelines were necessary. 
There was a request for clarification of "programs offered via distance 
learning" to include if periodic visits to campus would be considered in 
determining if a course is on or off-campus. Recommendations were made to edit 
references to coincide with terms described and the agency agreed and made 
changes accordingly. Also, recommendations to clarify conditions under which 
exemptions may be granted and clarify conditions under which a large block of 
courses which did not constitute a degree program could be offered. The agency 
disagreed and felt the wording was clear. 
The amendments to the rules are adopted under Texas Education Code, Section 
61.051(j) which provides the Texas Higher Education Coordinating Board with the 
authority to adopt rules concerning Approval of Distance Learning for Public 
Colleges and Universities.

sec.5.152. General Provisions. 
(a)-(c) (No Change.) 
(d) No degree or certificate program may be offered via distance learning 
instruction without prior approval of the Board. This applies even if delivery 
modes or instruction sites or locations are exempt from annual review under 
these rules. In addition, institutions may not offer through distance learning 
instruction at any site the number and array of courses that would constitute a 
degree or certificate program without prior approval by the Board to offer a 
full program at that site. Courses offered in violation of this provision will 
be disallowed for formula funding. 
(e)-(f) (No Change.) 

sec.5.156. Procedures for Review and Approval of Lower-Division Distance 
Learning Courses. 
(a)-(d) (No Change).
(e) Procedures for submitting applications to the Board for authorization to 
offer lower-division distance learning classes are as follows:
(1)-(3) (No Change.) 
(4) Distance learning instruction proposed to be offered on a statewide basis 
must be separately identified. Courses offered exclusively to individuals are 
automatically authorized for statewide delivery. (See Section 5.151(c) of this 
title relating to Approval of Distance Learning for Public Colleges and 
Universities). Such courses must be reported in accordance with the Board's 
uniform reporting system. 
(5)-(6) (No Change.) 
(f) During the passage of the year it may be necessary for an institution to 
request approval of lower-division distance learning activities not submitted as 
part of its Annual Plan. Such proposed amendments to an Annual Plan must be 
submitted to affected Regional Councils prior to the teaching of any additional 
classes. Each Council Chair will forward recommendations to the Commissioner 
regarding the appropriateness of such instruction. Amendments shall be 
considered by the Commissioner in accordance with Section 5.155(h) of this title 
relating to Approval of Distance Learning for Public Colleges and Universities. 

sec.5.157. Procedures for Review and Approval of Upper-Level and Graduate 
Distance Learning Courses. 
(a)-(d) (No Change.) 
(e) During the passage of the year it may be necessary for an institution to 
request approval of courses not submitted as part of its annual plan. The 
Commissioner shall consider such requests in accordance with Section 5.155(h) of 
this title relating to Approval of Distance Learning for Public Colleges and 
Universities if they are accompanied by documentation of discussions with other 
public and independent institutions in the affected Uniform Service Region 
concerning the proposed classes. 

sec.5.159 Non-State-Funded Courses.
(a) In-state-non-funded credit courses are governed by the same rules and 
regulations as regular funded courses; non-state funded credit courses need not 
be included in the annual plan requests. Requests for authorization to offer 
non-state-funded credit courses may be submitted for approval as the need 
arises. Non-credit adult and continuing education courses offered at a distance 
by universities and health science centers do not fall under the purview of this 
subchapter. 
(b) Out-of-state and foreign courses offered by public universities and health 
related institutions, for which no state funds are expended, may be taught 
without prior approval of the Board. However, prior Board approval is required 
for full degree programs offered under these circumstances. Institutions are 
expected to ensure that all such instruction meets the quality standards 
expected of Texas higher education institutions. 
(c) Community and technical colleges proposing to offer out-of-state or foreign 
courses for which no state funds are expended are subject to the provisions of 
Chapter 9, Subchapter L of this title (relating to Approval of Credit Courses 
and Programs Not Receiving State Funds Offered at Out-of-State and Foreign 
Locations). 
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 5, 1997.
TRD-9714724
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 483-6162

SUBCHAPTER K.Private and Out-of-State Public Degree-Granting
Institutions Operating in Texas
19 TAC sec.sec.5.211-5.222
The Texas Higher Education Coordinating Board adopts the repeal of Chapter 5, 
Subchapter K, sec.5.211 - sec.5.222 concerning Private and Out-of-State Public 
Degree- Granting Institutions Operating in Texas without changes to the proposed 
text as published in the August 26, 1997 issue of the Texas Register (22 TexReg 
8465).
There were no comments received concerning the proposed rules. 
The repeal of the rules is adopted under Texas Education Code, Section 61.311 
which provides the Texas Higher Education Coordinating Board with the authority 
to adopt rules concerning Private and Out-of-State Public Degree-Granting 
Institutions Operating in Texas.
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 5, 1997.
TRD-9714730
James McWhorter
Assistant Commissioner for Administration
Texas Higher Eduaction Coordinating Board
Effective date: November 26, 1997
Proposal publication date: August 26, 1997
For further information, please call: (512) 483-6162

19 TAC sec.sec.5.211-5.225
The Texas Higher Education Coordinating Board adopts new Chapter 5, Subchapter 
K, sec.5.211 - sec.5.225 concerning Private and Out-of-State Public Degree-
Granting Institutions Operating in Texas with changes to the proposed text as 
published in the August 26, 1997 issue of the Texas Register (22 TexReg 8465). 
The changes were made to sec.5.211, sec.5.212, sec.5.213, sec.5.214, and 
sec.5.220. There were no comments received concerning the proposed rules. 
The new rules are adopted under Texas Education Code, Section 61.311 which 
provides the Texas Higher Education Coordinating Board with the authority to 
adopt rules concerning Private and Out-of-State Public Degree-Granting 
Institutions Operating in Texas. 

sec.5.211. Definitions. 
The following words and terms, when used in this subchapter, shall have the 
following meanings, unless the context clearly indicates otherwise.
Accreditation standards acceptable to the board--The standards of the recognized 
accrediting agencies, or, for those institutions exempt under section 5.212(a) 
of this title (relating to Exemptions), the accrediting agency generally 
recognized by the appropriate professions. 
Agent--A person employed by or representing an institution within or without 
Texas who solicits any Texas students for enrollment in the institution, or who 
solicits or accepts payment from the Texas resident for any good or service 
offered by the institution at any place other than the office or legal place of 
business of the institution.
Board--The Texas Higher Education Coordinating Board. 
Branch campus, extension center, or other off-campus unit--Any institution or 
part of an institution offering or proposing to offer away from the home campus 
more than occasional courses or courses leading to the granting of a degree 
without the necessity for courses to be taken at the main campus. 
Commissioner--The commissioner of higher education. 
Degree--Any title or designation, mark, abbreviation, appellation, or series of 
letters or words, including "associate," "bachelor's," "master's," "doctor's," 
and their equivalents and foreign cognates, which signify, purport to signify, 
or are generally taken to signify satisfactory completion of the requirements of 
all or part of a program of study which is generally regarded and accepted as an 
academic degree-level program among Texas institutions of higher education 
accredited by accrediting agencies recognized by the Coordinating Board. 
Educational or Training Establishment -- An enterprise offering a course of 
instruction, education, or training that the establishment does not represent to 
be applicable to a degree. 
Home campus--The headquarters of an institution, such location to be determined 
as a matter of fact by the commissioner based upon consideration of information 
such as, but not limited to, the following: 
(A) where the institution is chartered; 
(B) the site, campus, or city where the principal or chief executive's offices 
are located; 
(C) where the institution conducts the preponderance of its instructional 
activities; and 
(D) any other pertinent and material facts. 
Out-of-state public institution of higher education--Any senior college, 
university, technical institute, junior or community college, or the equivalent 
which is controlled by a public body organized outside the boundaries of the 
State of Texas. 
Person--Any individual, firm, partnership, association, corporation, enterprise, 
or other private entity or combination thereof. 
Private postsecondary educational institution or institution -- An educational 
institution which: 
(A) Is not a public junior college, public senior college or university, medical 
or dental unit or other agency as defined in Texas Education Code, section 
61.003; 
(B) Is incorporated under the laws of this state, or maintains a place of 
business in this state, or has a representative present in this state, or 
solicits business in this state; and 
(C) Furnishes or offers to furnish courses of instruction in person, by 
electronic media, or by correspondence leading to a degree or provides or offers 
to provide credits alleged to be applicable to a degree. 
Program of study--Any course or grouping of courses which are alleged to entitle 
a student to a degree or to credits alleged to be applicable to a degree. 
Recognized accrediting agency--The Commission on Colleges, Southern Association 
of Colleges and Schools; the American Association of Bible Colleges; or the 
Association of Theological Schools in the United States and Canada. 
Representative--Includes a recruiter, agent, tutor, counselor, business agent, 
instructor, or any other instructional or support personnel.
Subchapter--The Texas Education Code, Title 3, Chapter 61, Subchapter G, as 
amended, having an effective date of June 21, 1975. 

sec.5.212. Exemptions. 
(a) The provisions of this subchapter do not apply to an institution which is 
fully accredited by a recognized accrediting agency, except that no institution 
may establish or operate a branch campus, extension center, or other off-campus 
unit without board approval. However, any private or independent institution of 
higher education as defined by Texas Education Code, Section 61.003, or any 
branch campus which was fully and separately accredited as a free-standing 
institution or was a candidate for separate accreditation as a free-standing 
institution prior to January 1, 1981 is exempt. 
(b) The exemptions provided by subsection (a) of this section apply only to the 
degree level for which the programs or the institution is accredited or 
approved, as applicable, and if an institution offers to award a degree at a 
level for which it is not accredited or approved by the appropriate agency of 
the state of Texas, the exemption does not apply.
(c) The board may issue an exempt institution a certificate of authorization to 
grant degrees on request of said institution upon determination by the board 
that said institution qualifies for exemption under subsection (a) of this 
section, as limited by subsection (b), of this section. The institution may 
apply for a certificate of authorization on forms provided by the board upon 
request. 
(d) An exempt institution continues in that status only so long as it maintains 
accreditation by a recognized accrediting agency or otherwise meets the 
provisions of subsection (a) of this section. 
(e) A new institution may not presume exempt status and offer to award degrees 
or courses leading to degrees until it has applied for and been granted exempt 
status by the commissioner. 
(f) If the commissioner has reason to revoke the exempt status granted to an 
institution, he shall notify the institution. The institution will be given 10 
days from receipt of that notice to contest the revocation. If after considering 
the institutions's reply the commissioner continues to hold that the institution 
no longer merits exempt status, the institution may appeal the commissioner's 
decision to the board. If the board upholds the commissioner's decision, the 
institution then must apply for and earn a certificate of authority to offer 
degrees or degree credit courses in Texas.

sec.5.213. Administrative Procedures Related to Certification of Nonexempt 
Institutions. 
(a) Designation. The board shall administer the provisions of the Texas 
Education Code, Title 3, Chapter 61, Subchapter G (the subchapter), in addition 
to its other duties provided by law. To achieve the purposes of the subchapter, 
the commissioner may request from any department, division, board, bureau, 
commission, or other agency of the state, and the same shall provide, such 
information as will enable the board to exercise properly its powers and perform 
its duties hereunder. 
(b) Authority. The board shall exercise, in addition to the express powers and 
duties now vested therein by the subchapter and the rules of which this section 
is a part, authority to administer the rules by appropriate action consistent 
with Texas law and the board's own policies and procedures.
(c) Jurisdiction. The board will accept applications only from those 
institutions proposing to offer a degree or credit courses alleged to be 
applicable to a degree. 
(d) Certification Advisory Council. The board shall appoint a certification 
advisory council to advise the board on standards and procedures related to 
certification of private, nonexempt postsecondary educational institutions; 
assist the commissioner in the study of individual applications for certificates 
of authority; and help on any other matters related to certification that the 
board finds appropriate. The council shall consist of six members with 
experience in higher education, three of whom must be drawn from exempt private 
institutions of higher education in Texas. The members shall be appointed for 
two year fixed and staggered terms. 
(e) Application Fee for Certificates of Authority, Amendments to Certificates of 
Authority, and Certificates of Registration of an Agent. Each biennium the 
commissioner shall set an application fee for certificates of authority equal to 
the average cost of evaluating the applications. The fee shall include the costs 
of travel, meals, and lodging of the visiting team and the commissioner, or his 
designated representatives, and consulting fees for the visiting team members. 
The commissioner shall also set the fee for an amendment to a certificate of 
authority and the fee for a certificate of registration of an agent. The 
commissioner shall report the fees to the board at a quarterly meeting of the 
board. 
(f) Application forms. 
(1) The application form for a certificate of authority to offer degrees shall 
contain, at minimum, the name, address, and telephone number of the institution; 
purpose of the institution; names of the sponsors or owners of the institution; 
regulations, rules, constitutions, bylaws, or other regulations established for 
the governance and operation of the institution; the names and addresses of the 
chief administrative officer, the principal administrators, and each member of 
the board of trustees or other governing board; the names of members of the 
faculty who will, in fact, teach in the program of study, with the highest 
degree held by each; a full description of the admission requirements, degree 
requirements, degree or degrees to be awarded and the course or courses of study 
prerequisite thereto; and a description of the facilities and equipment utilized 
by the institution. 
(2) The application form for an amendment to an existing certificate of 
authority to award a new or different degree shall include, at minimum, an 
outline of the curriculum to be offered, the identification of the degree to be 
awarded, the qualifications of the faculty involved, anticipated enrollment, 
financial support expected and its source, and the relation of the new program 
to the purpose of the institution. 
(3) The application form for a certificate of registration for an agent shall 
include, at minimum, the name, address, and certification status of institution 
represented; the applicant's full legal name, address, residence, educational 
background, experience, and evidence of institutional affiliation; and an 
affidavit from the applicant pledging to fairly represent the institution 
consistent with the laws of the State of Texas and the certification rules of 
the board. 
(4) The application form for authorization to offer off-campus degree-credit 
courses in Texas shall contain, at minimum, the name, address, and telephone 
number of the institution; purpose of the institution; names of the sponsors or 
owners of the institution; the names and addresses of the chief administrative 
officer, the principal administrators, and each member of the board of trustees 
or other governing board; the names of members of the faculty who will, in fact, 
teach the courses in Texas, with the highest degree held by each; a full 
description of the admission requirements, degree requirements, degree or 
degrees to which the course or courses will apply; and a description of the 
computer, library, and other facilities that will be utilized by the institution 
to offer the proposed courses. 
(5) The application form for a certificate of authorization shall contain, at 
minimum, the name, address, and telephone number of the institution; name of 
recognized accrediting association accrediting the institution; degree levels 
covered by the accreditation; sites covered by the accreditation; and date 
accreditation will expire. 
(g) Application review. 
(1) The commissioner, or his designated representatives, and an ad hoc team of 
independent consultants, if considered appropriate, will visit the institution 
and conduct an on-site survey to evaluate the application for a certificate of 
authority. The visiting team will be composed of people with experience on the 
faculties or staffs of accredited institutions and who possess knowledge of 
accreditation standards. 
(2) The certification advisory council will review the findings of the visiting 
team and the response of the institution and submit to the commissioner a 
recommendation concerning the application. 
(3) The commissioner will forward to the board the recommendation of the 
advisory council with his endorsement or with an alternate recommendation.
(4) Upon approval of the board to award a certificate of authority to an 
institution, the commissioner will act immediately to prepare and forward the 
certificate. It shall state, as a minimum, that the institution is authorized to 
grant certain degrees, the issue date, and the period for which the certificate 
is valid. 
(5) If the board denies an institution's application for a certificate of 
authority, the institution will not be eligible to reapply for a period of one 
year. The subsequent application should show correction of the deficiencies 
which led to the previous denial. Approval of the new application by the board 
will return the institution to its status within the eight-year time period for 
achieving accreditation. 
(h) Records. 
(1) Institutions authorized to operate in this state will be required to furnish 
a list of their agents to the board, and to maintain records of students 
enrolled, credits awarded, and degrees awarded in a manner specified by the 
board. 
(2) In the event any institution now or hereafter operating in this state 
proposes to discontinue its operation, the chief administrative officer, by 
whatever title designated, of said institution shall cause to be filed with the 
board the original or legible true copies of all such academic records of said 
institution as may be specified by the board. Such records shall include, at a 
minimum, such academic information as is customarily required by colleges when 
considering students for transfer or advanced study and, as a separate document, 
the academic record of each former student. In the event it appears to the board 
that any such records of an institution discontinuing its operations are in 
danger of being destroyed, secreted, mislaid, or otherwise made unavailable to 
the board, the board may seek court authority to take possession of such 
records. The board shall maintain or cause to be maintained a permanent file of 
such records coming into its possession.
(i) Recognition of accrediting agencies. In seeking to assure standards that are 
sufficient to protect citizens from fraudulent and substandard operations and to 
treat all postsecondary educational institutions with equity, both exempt and 
nonexempt, the board has recognized the Commission of Colleges, Southern 
Association of Colleges and Schools (SACS) as the accrediting agency for 
certification. However, the board will consider the recognition of other 
accrediting agencies provided they can demonstrate they meet all of the criteria 
listed in paragraphs (1) and (2) of this subsection. 
(1) The accrediting agency must be a member of or recognized by the Council on 
Postsecondary Accreditation or its successor and must be recognized by the 
United States Department of Education. 
(2) The accrediting agency's standards must be at least as comprehensive and 
rigorous as the standards listed in section 5.214 of this title (relating to 
Standards for Nonexempt Institutions) and be as rigorously applied. 

sec.5.214. Standards for Nonexempt Institutions.
(a) The decision to grant a certificate of authority to an institution will be 
based on its compliance with the following 24 standards, priority given to 
education, responsiveness to recommendations and suggestions for improvement, 
and, in the case of a renewal of a certificate of authority, record of 
improvement and progress following initial approval which would ensure 
accreditation within the allotted time. The 24 standards represent generally 
accepted administrative and academic practices and principles of accredited 
institutions of higher education in Texas. Such practices and principles are 
generally set forth by the Commission on Colleges, Southern Association of 
Colleges and Schools and by specialized accrediting bodies and the several 
academic and professional societies which have established standards for their 
members' programs such as the National Association of College and University 
Business Officers and the American Association of Collegiate Registrars and 
Admissions Officers. 
(1) Qualifications of Institutional Officers. The character, education, and 
experience in higher education of governing board members, administrators, 
supervisors, counselors, agents, and other institutional officers shall be such 
as may reasonably ensure that the students will receive education consistent 
with the objectives of the course or program of study. In particular, the 
academic administrator shall be qualified by level and area of academic 
preparation, as well as through appropriate experience, to direct the academic 
affairs of the institution. 
(2) Governing Board. The governing board, consisting of at least five members, 
must be an active policy-making body and must exercise its authority to ensure 
that the mission of the institution is carried out. Membership of the governing 
board of the institution shall be comprised of individuals who represent the 
institution's constituency, including faculty, students, and supporters. The 
presiding officer of the board, along with a majority of the other voting 
members, must have no contractual, employment, or personal or familial financial 
interest in the institution and derive no financial gain from the operations of 
the institution. 
(3) Distinction of Roles. There shall be sufficient distinction among the roles 
and personnel of the governing board of the institution, the administration, and 
faculty to ensure their appropriate separation and independence. 
(4) Instructional Assessment. Provisions shall be made for the continual 
assessment of the educational program, including the evaluation and improvement 
of instruction. 
(5) Faculty Qualifications. The character, education, and experience in higher 
education of the faculty shall be such as may reasonably ensure that the 
students will receive an education consistent with the objectives of the course 
or program of study. Each faculty member teaching in an academic associate or 
baccalaureate level degree program shall have at least a master's degree from an 
institution accredited by a recognized agency or a regional accrediting agency 
with at least 18 graduate semester credit hours in the discipline being taught. 
Furthermore, at least 25% of coursework in an academic associate or 
baccalaureate level major shall be taught by faculty members holding doctorates, 
or other terminal degrees, in the discipline being taught from institutions 
accredited by a recognized agency or a regional accrediting agency. Each faculty 
member teaching technical or vocational courses in a vocational associate degree 
program shall have at least an associate degree in the discipline being taught 
from an institution accredited by a recognized agency or a regional accrediting 
agency and at least three years of direct or closely related experience in the 
discipline being taught. Each faculty member teaching general education courses 
in a vocational associate degree program shall meet the requirements for 
academic associate faculty listed above. Graduate level degree programs shall be 
taught by faculty holding doctorates, or other terminal degrees, in the 
discipline being taught from institutions accredited by a recognized agency or a 
regional accrediting agency. 
(6) Faculty Size. There shall be a sufficient number of fulltime teaching 
faculty resident and accessible to ensure continuity and stability of the 
education program, adequate educational association between students and faculty 
and among the faculty members, and adequate opportunity for proper preparation 
for instruction and professional growth by faculty members. At the associate and 
baccalaureate levels, there shall be at least one full time faculty member in 
each program. At the graduate level, there shall be at least four full time 
faculty members in each program.
(7) Curriculum. The quality, content, and sequence of each course, curriculum, 
or program of instruction, training, or study shall be appropriate to the 
purpose of the institution and shall be such that the institution may reasonably 
and adequately achieve the stated objectives of the course or program. 
Substantially all of the courses in the areas of specialization required for 
each degree program shall be offered in organized classes by the institution, 
provided such courses are appropriate to the level of the institution. 
(8) General Education. Each associate or baccalaureate degree program shall 
contain a general education component consisting of at least 25% of the total 
hours offered for the program. This component shall be drawn from each of the 
following areas: Humanities and Fine Arts, Social and Behavioral Sciences, and 
Natural Sciences and Mathematics. It shall include courses to develop skills in 
written and oral communication and in basic computer instruction. Courses 
designed to correct deficiencies, remedial courses for associate and 
baccalaureate programs and leveling courses for graduate programs, may not count 
toward course requirements for the degree. The applicant institution may arrange 
for all or part of the general education component to be taught by another 
institution with the following provisions: the applicant institution's faculty 
shall design the general education requirement, there shall be a written 
agreement between the institutions to provide the general education component, 
at least one-half of the courses shall be offered in organized classes, and the 
providing institution shall be accredited by a recognized accrediting agency. 
(9) Credit for Prior Learning. An institution awarding collegiate credit for 
prior learning obtained outside a formal degree-granting institution shall 
establish and adhere to a systematic method for evaluating that prior learning, 
equating it with course content appropriate to the institution's authorized 
degree programs, and subject to ongoing review and evaluation by the 
institution's teaching faculty. Recognized evaluative examinations such as the 
advanced placement program or the college level examination program may be used. 
No more than fifteen semester credit hours or twenty-three quarter credit hours 
in a student's associate or baccalaureate degree program may be based on 
validated prior learning. No graduate credit for prior learning may be awarded. 
In no instance may credit be awarded for life experience per se or merely for 
years of service in a position or job. 
(10) Library. The institution shall have in its possession or direct control and 
readily available to its students and faculty a sufficient quality and variety 
of library holdings to support adequately its own curriculum. The holdings shall 
be catalogued and be readily accessible to students and faculty. The institution 
shall have adequate library facilities for the library holdings, space for 
study, and work space for the librarian and library staff. The librarian shall 
hold a graduate degree in library science from an institution accredited by a 
recognized accrediting agency or a regional accrediting agency. Arrangements for 
the use of library materials made with other libraries shall be formalized in 
writing, the collection shall be validated by the institution to be appropriate 
for the programs being offered, records of usage by the students shall be kept, 
and the library shall be reasonably accessible to the students and faculty. 
(11) Facilities. The institution shall have adequate space, equipment, 
instructional materials to provide education of good quality.
(12) Financial Resources and Stability. The institution shall have adequate 
financial resources and financial stability to provide education of good quality 
and to be able to fulfill its commitments to students. The institution shall 
have sufficient reserves so that, together with tuition and fees, it would be 
able to complete its educational obligations to currently enrolled students if 
it were unable to admit any new students. 
(13) Financial Records. Financial records and reports of the institution shall 
be kept and made separate and distinct from those of any affiliated or 
sponsoring person or entity. Financial records and reports shall be in 
accordance with the guidelines of the National Association of College and 
University Business Officers as set forth in College and University Business 
Administration, Fifth Edition, or such later editions as may be published. An 
annual independent audit of all fiscal accounts of the educational institution 
shall be authorized by the governing board and shall be performed by a properly 
authorized certified public accountant. 
(14) Academic Freedom and Faculty Security. The institution shall adopt and 
distribute to all members of the faculty a statement of academic freedom 
assuring freedom in teaching, research, and publication. All policies and 
procedures concerning promotion; tenure; and non-renewal or termination of 
appointments, including for cause, shall be clearly published in a faculty 
handbook and supplied to all faculty. The specific terms and conditions of 
employment of each faculty member shall be clearly described in a written 
document given to that faculty member and a copy retained by the institution.
(15) Academic Records. Adequate records shall be securely maintained by the 
institution to show attendance, progress, or grades, and to assure that 
satisfactory guidelines are followed relating to attendance, progress, and 
performance. Two copies of said records shall be maintained in secure places. 
Transcripts shall be issued upon the request of the students.
(16) Catalog. The institution shall provide students and other interested 
persons with a catalog or brochure containing information describing the 
purpose, length, and objectives of the programs offered by the institution; 
schedule of tuition, fees, and all other charges and expenses necessary for 
completion of the course of study; cancellation and refund policies; and such 
other material facts concerning the institution and the program or course of 
instruction as are reasonably likely to affect the decision of the student to 
enroll therein. Any disclosures specified by the board or defined in the rules 
shall be included. This information shall be provided to prospective students 
prior to enrollment. 
(17) Refund Policy. The institution shall publish and adhere to a fair and 
equitable cancellation and refund policy. 
(18) Credentials. Upon completion, the student shall be given appropriate 
educational credentials by the institution indicating that the program 
undertaken has been satisfactorily completed. 
(19) Academic Advising and Counseling. The institution shall provide an 
effective program of academic advising for all students enrolled. The program 
shall include orientation to the academic program, academic and personal 
counseling, career information and planning, placement assistance, and testing 
services. 
(20) Student Handbook. A handbook listing the student's rights and 
responsibilities shall be published and supplied to the student upon enrollment 
in the institution. The institution shall establish a clear and fair policy 
regarding due process in disciplinary matters and publish it in the handbook. 
(21) Health Services. The institution shall provide an effective program of 
health services and education reflecting the needs of the students. 
(22) Housing. The student housing owned, maintained, or approved by the 
institution, if any, shall be appropriate, safe, and adequate.
(23) Legal Compliance. The institution shall be maintained and operated in 
compliance with all ordinances and laws, including rules and regulations adopted 
pursuant thereto. 
(24) Open Representation of Activities. Neither the institution or its agents 
shall engage in advertising, recruiting, sales, collection, financial credit, or 
other practices of any type which are false, deceptive, misleading, or unfair. 
(b) The board may accept as evidence of compliance with the standards 
established in this section the accreditation of an institution by selected 
accrediting agencies if the commissioner, or his designated representatives, 
have participated in the review by such an agency of the institution operating 
in Texas and concur with the actions of that agency. This option shall not be 
construed as giving exempt status to an applicant institution so accredited if 
it has not already been exempted under section 5.212(a) of this title (relating 
to Exemptions); nor is it to be understood that the board may not require 
further evidence and make further investigations concerning whether the 
institution should be authorized to operate in Texas. 

sec.5.220. Prohibitions Applicable to Nonexempt Institutions.
(a) A person may not: 
(1) Grant, award, or purport to offer a degree on behalf of a nonexempt 
institution unless the institution has been issued a certificate of authority to 
grant the degree by the board in accordance with the provisions of the 
subchapter; 
(2) represent that credits earned or granted by that person or institution are 
applicable for credit toward a degree to be granted by some other person or 
institution except under conditions and in a manner specified under section 
5.216 of this title (relating to Certificate of Authority To Grant Degrees and 
Offer Courses at Nonexempt Institutions), and approved by the board; 
(3) award an honorary degree on behalf of a private postsecondary educational 
institution subject to the provisions of the subchapter, unless the institution 
has been awarded a certificate of authority to award such a degree, and, 
further, unless the degree shall plainly state on its face that it is honorary; 
(4) Use the term "college", "university", "seminary", "school of medicine", 
"medical school", "health science center", "school of law", "law school", or 
"law center", its abbreviation, or its foreign cognate in the official name or 
title of a nonexempt private postsecondary educational institution or describe 
an institution using any of these terms or a term having a similar meaning 
unless the institution has been issued a certificate of authority; 
(5) Use the term "college", "university", "seminary", "school of medicine", 
"medical school", "health science center", "school of law", "law school", or 
"law center", its abbreviation, or its foreign cognate in the official name or 
title of an educational or training establishment or describe an institution 
using any of these terms or a term having a similar meaning; 
(b) A person operating an institution not exempt from this subchapter that has 
not been issued a certificate of authority, but is otherwise legally operating, 
and that has in its official name or title a term protected under subsection 
(a)(4) and (5) of this section shall remove the protected term from the name or 
title not later than September 1, 1999 unless the term "college" or "university" 
was used in the official name or title of the institution before September 1, 
1975. 
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 5, 1997.
TRD-97014729
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 483-6162

SUBCHAPTER P.Testing and Remediation
19 TAC sec.sec.5.311-5.318
The Texas Higher Education Coordinating Board adopts the repeal of Chapter 5, 
Subchapter P, sec.5.311 - sec.5.318 concerning Testing and Remediation without 
changes to the proposed text as published in the August 26, 1997 issue of the 
Texas Register (22 TexReg 8465). 
There were no comments received concerning the proposed rules. 
The repeal of the rules is adopted under HB 588, 75th legislative session and 
Texas Education Code, Section 51.306 and 51.307 which provides the Texas Higher 
Education Coordinating Board with the authority to adopt rules concerning 
Testing and Remediation. 
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 5, 1997.
TRD-9714728
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: August 26, 1997
For further information, please call: (512) 483-6162

SUBCHAPTER P.Testing and Developmental Education
19 TAC sec.sec.5.311-5.318
The Texas Higher Education Coordinating Board adopts new sections to Chapter 5, 
Subchapter P, sec.5.311 - sec.5.318 concerning Testing and Developmental 
Education without changes to the proposed text as published in the August 26, 
1997 issue of the Texas Register (22 TexReg 8465).
There were no comments received concerning the proposed rules. 
The new rules are adopted under HB 588, 75th legislative session and Texas 
Education Code, Section 51.306 and 51.307 which provides the Texas Higher 
Education Coordinating Board with the authority to adopt rules concerning 
Testing and Developmental Education. 
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 5, 1997.
TRD-9714727
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: August 26, 1997
For further information, please call: (512) 483-6162

CHAPTER 17.Campus Planning
SUBCHAPTER C.Requesting Coordinating Board Endorsement of Real Property 
Acquisitions
19 TAC sec.17.65
The Texas Higher Education Coordinating Board adopts amendments to Chapter 17, 
Subchapter C, sec.17.65 concerning Requesting Coordinating Board Endorsement of 
Real Property Acquisitions without changes to the proposed text as published in 
the September 5, 1997 issue of the Texas Register (22 TexReg 8830). 
There were no comments received concerning the proposed rules. 
The amendments to the rules are adopted under Texas Education Code, Section 
62.021(b) and HB 2462, 74th Legislative Session which provides the Texas Higher 
Education Coordinating with the authority to adopt rules concerning Requesting 
Coordinating Board Endorsement of Real Property Acquisitions.
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 5, 1997.
TRD-9714731
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 483-6162

CHAPTER 21.Student Services
SUBCHAPTER A.General Provisions
19 TAC sec.21.5
The Texas Higher Education Coordinating Board adopts amendments to Chapter 21, 
Subchapter A, sec.21.5 concerning General Provisions (Refund of Tuition and Fees 
at Public Community/Junior and Technical Colleges without changes to the 
proposed text as published in the September 5, 1997 issue of the Texas Register 
(22 TexReg 8831). 
There were no comments received concerning the proposed rules. 
The amendments to the rules are adopted under Texas Education Code, Section 
61.061 and Section 130.001 which provides the Texas Higher Education 
Coordinating Board with the authority to adopt rules concerning General 
Provisions (Refund of Tuition and Fees at Public Community/Junior and Technical 
Colleges. 
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 5, 1997.
TRD-9714732
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 483-6162

SUBCHAPTER M.Texas College Work-Study Program
19 TAC sec.sec.21.409, 21.410
The Texas Higher Education Coordinating Board adopts amendments to Chapter 21, 
Subchapter M, sec.21.409 and sec.21.410 concerning Texas College Work-Study 
Program without changes to the proposed text as published in the September 5, 
1997 issue of the Texas Register (22 TexReg 8831). 
There were no comments received concerning the proposed rules. 
The amendments to the rules are adopted under Texas Education Code, Section 
56.077, which provides the Texas Higher Education Coordinating with the 
authority to adopt rules concerning Texas College Work-Study Program.
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 5, 1997.
TRD-9714733
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 483-6162

SUBCHAPTER AA.Reciprocal Educational Exchange Program
19 TAC sec.sec.21.901-21.907, 21.909
The Texas Higher Education Coordinating Board adopts amendments to Chapter 21, 
Subchapter AA, sec.21.901 - sec.21.907, and 21.909 concerning Reciprocal 
Educational Exchange Program with changes to the proposed text as published in 
the September 5, 1997 issue of the Texas Register (22 TexReg 8832). The changes 
were made to sec.21.901, sec.21.902, and sec.21.905. 
Comments were received from Texas A & M University raising the issue of whether 
a limit should be established on the length of time an individual can 
participate in the program. Placing a time limit on how long a student can 
benefit from the exchange program was discussed with the Commissioner's Advisory 
Committee on International Issues. The advisory committee has appointed a 
subcommittee to examine the issue. At this time, staff is recommending that a 
time limit of 12 months be added to the criteria of eligible participants. This 
limit is the same as the limit placed on the National Student Exchange Program, 
which provides exchange opportunities across the United States for undergraduate 
students. The Reciprocal Educational Exchange Program is for the purpose of 
allowing students to study abroad while seeking a degree from a Texas 
university. If a limit is not placed on the program, it can be used for 
obtaining a complete degree by foreign students at resident rates. The rule has 
been changed since the July board meeting to delete faculty and staff as 
eligible participants. This change is being made to bring the rule into 
compliance with the law. 
The amendments to the rules are being adopted under Texas Education Code, 
Section 54.060 which provides the Texas Higher Education Coordinating Board with 
the authority to adopt rules concerning Reciprocal Educational Exchange Program. 

sec.21.901. Purpose. 
The purpose of the reciprocal educational exchange program is to encourage 
students of participating institutions to better understand the culture, 
language, needs and expectations of other nations of the world and the State of 
Texas. 

sec.21.902. Delegation of Powers and Duties. 
Texas Education Code, Section 54.060(c), provides that the Coordinating Board 
shall establish a program for the exchange of students, between Texas 
institutions of higher education and institutions in other nations of the world. 

sec.21.905. Eligible Participants. 
A person is eligible to participate in the exchange program if he/she:
(1) has been enrolled for one or more semesters at the originating institution, 
(2) is a citizen or permanent resident of a participating nation or an 
individual enrolled in a public institution of higher education in Texas, 
(3)-(5) (No Change) 
(6) has not participated in the exchange program for more than 12 months. 
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 5, 1997.
TRD-9714734
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 483-6162

SUBCHAPTER BB.Pilot Program for Enrolling Students from Mexico 
19 TAC sec.sec.21.931, 21.932, 21.934, 21.935, 21.938
The Texas Higher Education Coordinating Board adopts amendments to Chapter 21, 
Subchapter BB, sec.21.931, sec.21.932, sec.21.934, sec.21.935, sec.21.938 
concerning Pilot Program for Enrolling Students from Mexico with changes to the 
proposed text as published in the September 5, 1997 issue of the Texas Register 
(22 TexReg 8833). The changes were made to sec.21.935 and sec.21.938. 
There were no comments received concerning the proposed rules. 
The amendments to the rules are adopted under Texas Education Code, Section 
54.060 and HB 1820, 75th legislative session which provides the Texas Higher 
Education Coordinating Board with the authority to adopt rules concerning Pilot 
Program for Enrolling Students from Mexico. 

sec.21.935.Border County Program. 
A border county program is an instructional program offered in a county 
bordering Mexico by any general academic institution in Texas, by a component of 
the Texas State Technical College System, by Texas A & M University-Kingsville, 
by Texas A & M University- Corpus Christi or by Texas Southmost College.

sec.21.938. Numbers of Students Eligible to Participate.
(a) Each border county program institution listed in Section 21.935 may enroll 
an unlimited number of eligible students. 
(b) Each general academic teaching institution or component of the Texas State 
Technical College System not located in a county immediately adjacent to Mexico, 
except Texas A & M University-Kingsville and Texas A & M University-Corpus 
Christi, may enroll up to two (2) eligible students per thousand of the 
institution's overall enrollment. Institutions with fewer than 5,000 students 
may enroll up to ten (10) eligible students.
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 5, 1997.
TRD-9714735
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 483-6162

SUBCHAPTER II.Educational Aide Exemption Program
19 TAC sec.sec.21.1080-21.1091
The Texas Higher Education Coordinating Board adopts Chapter 21, new Subchapter 
II, sec.21.1080 - sec.21.1091 concerning Educational Aide Exemption Program with 
changes to the proposed text as published in the September 5, 1997 issue of the 
Texas Register (22 TexReg 8834). The change was made to sec.21.1083.
Comments were received from legislators and representatives of the Texas 
Federation of Teachers. They have expressed concern about the definition used 
for financial need. As a result of these comments, the definition of financial 
need has been expanded since the July Board Meeting to allow a student to meet 
the financial need criterion by using either the federal formula or the 
student's adjusted gross income. 
The amendments to the rules are adopted under Texas Education Code, Section 
54.214 and HB 571, 75th legislative session which provides the Texas Higher 
Education Coordinating Board with the authority to adopt rules concerning 
Educational Aide Exemption Program. 

sec.21.1083. Definitions. 
The following words and terms, when used in this subchapter, shall have the 
following meanings, unless the context clearly indicates otherwise:
Board -- The Texas Higher Education Coordinating Board. 
Commissioner -- The commissioner of higher education, the chief executive 
officer of the board. 
Cost of Attendance-- A board-approved estimate of the expenses incurred by a 
typical financial aid student in attending college. Includes direct educational 
costs (tuition, fees, books, and supplies) as well as indirect costs (room and 
board, transportation, and personal expenses). 
Financial need -- Based on the federal formula, the cost of education at an 
institution of higher education less the expected family contribution and any 
gift aid for which the student is entitled, or based on adjusted gross annual 
income for the most recent tax year as follows:
(A) single independent students must have an adjusted gross income of $25,000 or 
less,
(B) married independent students must have a combined gross income of $35,000 or 
less, and 
(C) dependent students must have an adjusted gross income for the family of 
$35,000 or less. 
Program officer -- The individual on a college campus who is designated by the 
institution's Chief Executive Officer to represent a program described in this 
subchapter on that campus. Unless otherwise designated by the Chief Executive 
Officer, the Director of Student Financial Aid shall serve as program officer. 
Resident of Texas -- A resident of the State of Texas as determined in 
accordance with Chapter 21, Subchapter B of this title (relating to Determining 
Residence Status). Nonresident students eligible to pay resident tuition rates 
are not included. 
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 5, 1997.
TRD-9714737
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 483-6162

CHAPTER 22.Grant and Scholarship Programs
SUBCHAPTER E.Texas New Horizons Scholarship Program
19 TAC sec.sec.22.81-22.86
The Texas Higher Education Coordinating Board adopts new Chapter 22, Subchapter 
E, sec.22.81 - sec.22.86 concerning Texas New Horizons Scholarship Program with 
changes to the proposed text as published in the September 5, 1997 issue of the 
Texas Register (22 TexReg 8836). The change is made to the title of the 
subchapter and sec.22.84. 
There were no comments received concerning the proposed rules. 
The amendments to the rules are adopted under Texas Education Code, Section 
54.216 and SB 576, 75th legislative session which provides the Texas Higher 
Education Coordinating Board with the authority to adopt rules concerning Texas 
New Horizons Scholarship Program. 

sec.22.84. Selection of Recipients. 
In the initial selection of recipients, institutions are to give priority 
consideration to applicants who meet the criteria listed below. The Coordinating 
Board will advise institutions as to the relative weight to be given each of the 
criteria. In addition, priority may be given to prior year recipients as long as 
they continue to meet the eligibility requirements of the program. The selection 
criteria are: 
(1) the applicant's socioeconomic background, which suggests disadvantages in 
preparing for college, measured in terms of the student's family income relative 
to the designated poverty level of income and whether or not the family has been 
receiving some type of welfare assistance; 
(2) the relative wealth of the school district in which the student graduated 
from high school compared to the average wealth of school districts throughout 
the state; 
(3) one or more of the following criteria, as determined by the institution 
attended by the student: 
(A) levels of responsibility demonstrated by the student through work at school, 
in the community, the family or with an outside job to help support the family 
while attending high school, as attested to via recommendations from at least 
two disinterested third parties; 
(B) the applicant's performance on standardized tests as compared to the 
performance of other students with similar socioeconomic backgrounds;
(C) whether the student's parents ever attended college; and,
(D) the applicant's performance on standardized tests compared to the 
performance of all applicants for an award under this subchapter.
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 5, 1997.
TRD-9714736
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 483-6162

TITLE 22. EXAMINING BOARDS
PART XXIII. Texas Real Estate Commission
CHAPTER 535.Provisions of the Real Estate License Act Education, Experience, 
Educational Programs, Time Periods and Type of License 
22 TAC sec.sec.535.63, 535.64
The Texas Real Estate Commission adopts amendments to sec.535.63, concerning 
education and experience required for a real estate broker license, and to 
sec.535.64, concerning education required for a real estate salesperson license, 
without changes to the proposed text as published in the October 3, 1997, issue 
of the Texas Register (22 TexReg 9799). The amendment to sec.535.63 permits 
persons licensed within a six year period prior to filing the application to be 
relicensed without having to complete experience or education requirements 
imposed on new licensees. The amendment also replaces the term salesman with 
salesperson as required by House Bill 814, 75th Legislature, and replaces the 
term certification with renewal as used in the current law. 
The amendment to sec.535.64 permits a person who was licensed as a salesperson 
within a six-year period prior to filing an application to qualify for a 
salesperson license without being subject to the core real estate course 
requirements for original licensing. The amendment also replaces the term 
salesman with salesperson as required by House Bill 814, 75th Legislature. The 
amendment further conforms the section with the existing practice of permitting 
salespersons renewing their licenses to provide documentation of completion of 
core real estate courses no later than the day their licenses expire. 
No comments were received regarding the proposed amendment. 
Adoption of the amendments is necessary to make the sections consistent with the 
current provisions of the agency s enabling legislation and the agency s current 
procedures for license renewal.
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 7, 1997.
TRD-9714892
Mark A. Moseley
General Counsel
Texas Real Estate Commission
Effective date: December 1, 1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 463-3910

Nonresidents
22 TAC sec.535.132
The Texas Real Estate Commission (TREC) adopts an amendment to sec.535.132, 
concerning nonresidents eligibility for real estate licensure, without changes 
to the proposed text as published in the October 3, 1997, issue of the Texas 
Register (22 TexReg 9800).
The amendment permits a nonresident previously licensed in Texas as a real 
estate broker or salesperson within the six-year period prior to the filing of 
the application to qualify for specific waivers of examination, experience or 
core real estate course requirements. Adoption of the amendment is necessary to 
conform the section with the current provisions of the agency s enabling 
legislation. 
No comments were received regarding the proposed amendment. 
The amendment is adopted under Texas Civil Statutes, Article 6573a, sec.5(h), 
which authorize the Texas Real Estate Commission to make and enforce all rules 
and regulations necessary for the performance of its duties
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 7, 1997.
TRD-9714893
Mark A. Moseley
General Counsel
Texas Real Estate Commission
Effective date: December 1, 1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 465-3900

TITLE 25. HEALTH SERVICES
PART II. Texas Department of Mental Health and Mental Retardation
CHAPTER 401. System Administration
SUBCHAPTER A. Advisory Committees
25 TAC sec.401.8
The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts new 
sec.401.8, concerning advisory committees, without changes to the proposed text 
as published in the September 5, 1997, issue of the Texas Register (22 TexReg 
8840).
The new section establishes the Inpatient Mental Health Services Advisory 
Committee in accordance with the Texas Health and Safety Code, sec.571.027. The 
statute requires the advisory committee to advise the Texas MHMR Board on issues 
and policies related to the provision of mental health services in private 
mental hospitals licensed by the Texas Department of Health (TDH) and 
psychiatric units of general hospitals licensed by TDH; on coordination and 
communication between TDMHMR, TDH, and these facilities to address consistency 
between the agencies in interpretation and enforcement of agency policies and 
other rules; and on training for surveyors or investigators. 
No public comment was received on the proposal. 
The section is adopted under the Texas Health and Safety Code, Title 7, 
sec.532.015, which provides the Texas Mental Health and Mental Retardation Board 
with rulemaking powers and with the Texas Civil Statutes, Article 6252-33, 
sec.5, which requires the adoption of rules stating the purpose, tasks, and 
reporting mechanism of each committee that advises the board. 
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 6, 1997.
TRD-9714747
Ann Utley
Chairman, Texas MHMR Board
Texas Department of Mental Health and Mental Retardation
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 206-4516

25 TAC sec.401.9
The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the 
repeal of sec.401.9, concerning advisory committees, without changes to the 
proposed text as published in the September 5, 1997, issue of the Texas Register 
(22 TexReg 8841).
The repeal abolishes the Treatment Methods Advisory Committee as allowed by the 
Texas Health and Safety Code, sec.571.0065(a). 
No public comment was received on the proposed repeal. 
The repeal of this section is adopted under the Texas Health and Safety Code, 
Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental 
Retardation with rulemaking powers. 
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 6, 1997.
TRD-9714748
Ann Utley
Chairman, Texas MHMR Board
Texas Department of Mental Health and Mental Retardation
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 206-4516

CHAPTER 407. Internal Facilities Management
Lease of TDMHMR Surplus Property
25 TAC sec.407.120
The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts 
amendments to sec.407.120 of Chapter 407, concerning lease of TDMHMR property, 
with changes to the proposed text as published in the September 12, 1997, issue 
of the Texas Register (22 TexReg 9224). 
The section describes the procedures for leasing TDMHMR property, which includes 
approval by the Texas MHMR Board or commissioner, evidence of public benefit, 
review of bids, and the depositing and use of lease proceeds. The amendments 
modify language throughout the section for clarification; require advertisement 
of certain lease proposals in accordance with applicable state law; state what 
is necessary to evidence sufficient public benefit; and allow the commissioner 
to authorize certain leases. 
Language was added to subsection (c) clarifying that the real property being 
referenced is non-surplus real property. Language was modified in subsection 
(c)(1)(A) to clarify the parameters by which the board makes a determination of 
sufficient public benefit to the department or the persons it serves. Clarifying 
language was added to subsection (d) referencing the service contract to the 
service contract described in subsection (c)(1)(B). Additionally, minor 
grammatical modification were made to subsection (b). 
No public comment was received on the proposal. 
This section is adopted under the Texas Health and Safety Code, sec.532.015, 
which provides the Texas Mental Health and Mental Retardation Board with broad 
rulemaking authority, and the Texas Health and Safety Code, sec.533.087, which 
permits TDMHMR to adopt rules related to leasing, forms, and contracts that will 
protect the state's interests. 

sec.407.120. Lease of TDMHMR Property.
(a) Leases may only be executed for department property that has been determined 
to be: 
(1) surplus property in accordance with Texas Health and Safety Code, 
sec.533.084; or 
(2) suitable for lease in accordance with Texas Health and Safety Code, 
sec.533.087. 
(b) Proposals to lease property that require approval of the Texas Mental Health 
and Mental Retardation Board (board) are made to the board by the department or 
by the General Land Office. Except as provided by subsections (c) and (d) of 
this section, all lease proposal are advertised in accordance with applicable 
state law. The advertisement summarizes the lease proposal, provides the name 
and address of a person to whom interested parties may submit bids for 
consideration by the department, and states where a copy of the proposal and the 
board's criteria for awarding the lease can be obtained. The department reviews 
any bids received based upon the published criteria, and may conduct a review of 
other factors which it deems to be appropriate on any or all bids. 
(c) The department may lease non-surplus real property or an improvement for 
less than the prevailing market rate, without advertisement or without 
competitive bidding, if: 
(1) sufficient public benefit will be derived from the lease as evidenced by: 
(A) a determination by the board that the department or the persons it serves 
will benefit from the proposed use of the property in a manner that is of equal 
or greater value than the value of the waived or reduced rent; or 
(B) a service contract between the department and the federal or state agency, 
unit of local government, or not-for-profit organization, which will be the 
lessee; and 
(2) the property is leased to: 
(A) a federal or state agency; 
(B) a unit of local government; 
(C) a not-for-profit organization; or 
(D) an entity related to the department by a service contract.
(d) The lease of real property or an improvement to a lessee that is related to 
the department by a service contract as described in subsection (c)(1)(B) of 
this section may be authorized by the commissioner if: 
(1) the term does not exceed five years; and 
(2) the fair market value of the annual rent associated with the property or 
improvement is less than $50,000. 
(e) Prior to the board's award of any lease that will have a term exceeding five 
years, the board shall be apprised of all bids received.
(f) The department may reject any and all bids. 
(g) Proceeds from all leases are deposited to the credit of the department in 
the Texas capital trust fund and used in accordance with the Texas Health and 
Safety Code, sec.533.084(b), unless otherwise provided for by state or federal 
law. 
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 6, 1997.
TRD-9714750
Ann Utley
Chairman, Texas MHMR Board
Texas Department of Mental Health and Mental Retardation
Effective date: November 26, 1997
Proposal publication date: September 12, 1997
For further information, please call: (512) 206-4516

CHAPTER 410. Volunteers Services and Public Information
SUBCHAPTER C. Capital Improvements by Citizen Groups
25 TAC sec.410.103
The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts 
amendments to sec.410.103, concerning capital improvements by citizen groups, 
without changes to the proposed text as published in the September 12, 1997, 
issue of the Texas Register (22 TexReg 9225). 
The section describes the definitions of words and terms used in the subchapter. 
The amendment modifies the definition of "capital improvement." 
No public comment was received on the proposal. 
The section is adopted under the Texas Health and Safety Code, sec.532.015, 
which provides the Texas Mental Health and Mental Retardation Board with broad 
rulemaking authority. 
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 6, 1997.
TRD-9714749
Ann Utley
Chairman, Texas MHMR Board
Texas Department of Mental Health and Mental Retardation
Effective date: November 26, 1997
Proposal publication date: September 12, 1997
For further information, please call: (512) 206-4516

TITLE 28. INSURANCE
PART I. Texas Department of Insurance
CHAPTER 12.Independent Review Organizations
The Commissioner of Insurance adopts new Chapter 12 concerning independent 
review organizations. Sections 12.1, 12.3, 12.4, 12.5, 12.103, 12.106, 12.201, 
12.205, 12.206, 12.208, 12.301, 12.302, 12.404, 12.405, 12.501 and 12.502 are 
adopted with changes to the proposed text as published in the September 5, 1997 
issue of the Texas Register (22 TexReg 8853). Sections 12.2, 12.101, 12.102, 
12.104, 12.105, 12.107 - 12.109, 12.202 - 12.204, 12.207, 12.401 - 12.403 and 
12.406 are adopted without changes and will not be republished.
This new chapter is necessary to implement Senate Bill 386, enacted by Acts, 
75th Legislature, 1997, and codified at Texas Insurance Code Article 21.58C, 
effective September 1, 1997. Senate Bill 386 authorized the creation of a new 
entity known as an independent review organization which is designed to provide 
an independent avenue of appeal of an adverse determination of medical necessity 
made by a utilization review agent. This chapter is necessary for the orderly 
and efficient regulation of these organizations and the procedures by which 
independent review is effected. 
New Article 21.58C provides that patients who have received an adverse 
determination of medical necessity for requested medical treatment or services 
from a payor and have unsuccessfully appealed such determination may request, 
through the utilization review agent making the adverse determination, an 
independent review of their case by an independent review organization. The 
statute requires that the independent review organization and the person 
conducting the independent review have no relationship of any kind with the 
payor, the utilization review agent, the provider(s) of record, or anyone 
involved in the initial adverse determination or its appeal. Through this new 
chapter, the Texas Department of Insurance (department) is setting out standards 
and rules for the certification, selection, and operation of independent review 
organizations in this state. This chapter enables independent review 
organizations to operate in the state and to provide the independent review 
required for adverse determinations, as envisioned by the statute. 
After receiving public comments on the proposed chapter, the department has made 
the following changes to the chapter. Changes were made to sec.12.4 to clarify 
the applicability of the chapter and the entities for which independent review 
organizations would be performing independent reviews. In sec.12.5, the 
definitions section, the definition of adverse determination has been changed to 
clarify that this type of determination includes those made on behalf of payors. 
Based on comments, the definition of screening criteria has been changed to be 
more specific. The department has added the words "after hours" to sec.12.103(5) 
based on comments and for clarification as to when an independent review 
organization may be contacted. Section 12.103(9) has been changed to delete the 
word "staff" and include the word "executives," since the submission of staff 
profiles would be an onerous administrative burden on the independent review 
organization, and to limit the relationship of entities for which information 
required by this section must be submitted to those which represent at least 5% 
of that officer's, director's, or executive's total revenue or which represent a 
holding or investment worth $100,000 or more. Section 12.103(11) has been 
deleted as it applies only to utilization review agents. The submission of 
information regarding compensation arrangements is not appropriate for 
independent review organizations because there is no incentive based upon the 
number of services denied; the amount paid to the independent review 
organization is identical whether the independent review organization recommends 
the service or not. Section 12.106 has been changed to delete reference to 
proposed sec.12.302, which has been deleted from the rules. The department has 
clarified the language in sec.12.201(3) and (4). 
The department has changed sec.sec.12.205(c), (d), (e) and (f), 12.404(a), (b) 
and (d), 12.405, 12.501 and 12.502(a) to include entities other than utilization 
review agents as permitted by statute. These changes include the other entities 
or the term "payor," as appropriate. The sections address the responsibilities 
of entities that request an independent review, including ensuring that all 
appropriate parties are properly notified of the assignment of a review to an 
independent review organization. Provisions in Senate Bill 386 relating to the 
Civil Practice and Remedies Code (specifically sec.88.003(a)(2) and (c)) allow a 
health insurance carrier, HMO, or managed care entity to require a party who has 
notified them of an impending claim to submit the claim for review by an 
independent review organization. Section 12.205(c) has been changed, based on 
comments, to clarify that the department considers the independent review 
organization to have been timely provided the information when it is actually 
received by the independent review organization, not when it is placed in the 
U.S. Mail. Subsection (e) of sec.12.205 has been changed to clarify that the 
cost of providing medical information shall be reimbursed by the utilization 
review agent, as well as by an insurer, HMO or other managed care entity. 
Section 12.206(a) has been changed to require that notice of determination by an 
independent review organization be given to a payor. The phrase "as guidelines 
in making determinations" was deleted from sec.12.206(d)(2) based on a comment 
that the screening criteria are not to be used as guidelines for making the 
decision. The independent reviewer should refer to screening criteria as an aid 
in the review process but will use his/her professional expertise and judgment 
to make the decision. 
Section 12.206(d)(4) was changed to allow the independent review organization to 
certify that the reviewer has certified his/her independence in lieu of the 
certification requirement by the reviewer. Since the reviewer is to be 
independent and will be conducting reviews for various individuals and entities, 
it is not appropriate that the specific individual be identified to those 
persons requesting review. Identification of the specific person conducting the 
review could result in some form of retaliation against the individual and 
affect their ability to be independent. The certification will be on a form 
designed by the department and will be available for inspection any time the 
department performs an on-site review of the independent review organization. 
The department has changed sec.12.208(a) to specify the minimum information 
which constitutes personal information and has deleted the phrase "to the extent 
required by law." The word "payor" was added to sec.12.208(c) and (d) based on 
comments, to prevent independent review organizations from publishing data which 
would identify specific payors. Additionally, the word "physician" was added in 
(c) to clarify that the involved physician must give written consent prior to 
publication of any identifying data. Subsection (f) has been changed based on 
comments to include the words "payors or utilization review agents" after the 
word "providers." The department has changed the retention period for 
information generated and obtained by the independent review organization in the 
course of a review to a period of at least four years in sec.12.208(h). The 
department has also deleted language which was vague in sec.12.208(h), based on 
comments. The word "payor" was added to sec.12.208(i) for clarification and to 
ensure that these requirements apply to a payor's financial data. 
Proposed sec.12.302 regarding on site review by TDI has been deleted in favor of 
reliance on the department's already existing authority to conduct such 
inquiries pursuant to Texas Insurance Code Article 1.24, and sec.12.303 has been 
renumbered as sec.12.302. Subsection (e) was changed to clarify that Texas 
Insurance Code Article 1.10E may also be used to impose sanctions. Changes have 
been made to sec.12.502(b) to require the independent review organization to 
screen their reviewers for conflicts and on completion of a review to obtain 
from the reviewer the previously referenced certification of independence. 
Grammatical changes were made to sec.sec.12.1, 12.3, 12.5, and 12.406. 
Texas Government Code sec.2001.030 provides that on adoption of a rule, if 
requested to do so by an interested person either before adoption or not later 
than the 30th day after the date of the adoption, the agency shall issue a 
concise statement of the principal reasons for and against its adoption, 
including in the statement its reasons for overruling the considerations urged 
against adoption. One commenter has requested that the department issue such a 
statement. 
The principal reason for this rule's adoption is to ensure the orderly and 
efficient certification and regulation of a new entity, independent review 
organizations, which have been authorized by recent legislative changes, by 
setting forth procedures and requirements for certification and the standards by 
which such organizations are to review adverse determinations by a utilization 
review agent. It further sets forth the procedures by which the department will 
make random assignments to independent review organizations and will enforce the 
provisions of law and rule. No commenter, including the requester, has urged 
that the department not adopt this rule, and the statute requires that the 
commissioner shall promulgate standards and rules for the certification, 
selection, operation, and enforcement of independent review organizations. 
Failure to adopt this rule would make effective and efficient regulation more 
difficult and could result in this type of review being less accessible. 
Comments concerning individual parts of this rule, and the reasons why the 
agency agrees or disagrees, are addressed in the Summary of Comments
and Agency's Response to Comments. 
Subchapter A contains general provisions regarding this chapter. The statutory 
basis for this chapter is set forth in sec.12.1. Section 12.2 provides for 
severability of terms or sections of this chapter under certain circumstances. 
Section 12.3 describes the effect of the rules and sec.12.4 sets forth the 
applicability of this chapter. Section 12.5 defines key terms used in this 
chapter. 
Subchapter B contains information regarding the certification of independent 
review organizations. Sections 12.101 and 12.102 provide information on where to 
file an application for certification of an independent review organization and 
how to obtain forms for such application. A list of information required to be 
submitted by the applicant to the commissioner is set forth in sec.12.103. The 
applicable timeframes and the duties of the applicant and the department during 
the application process are set forth in sec.12.104, and the requirements for 
filing revisions to the application during the review process are contained in 
sec.12.105. Provisions allowing the department to conduct on-site qualifying 
examinations as a requirement of certification are included in sec.12.106. 
Procedures for withdrawal of an application from consideration are contained in 
sec.12.107. Section 12.108 provides that an independent review organization must 
apply for renewal of its certificate of registration each year, and sets forth 
renewal requirements and procedures. Section 12.109 sets forth the appeal 
process if an application or renewal is denied. 
Subchapter C contains the general standards for independent review. Section 
12.201 describes the independent review plan, which must be filed by independent 
review organizations, and lists the components which must be included in such 
plan. Personnel and credentialing requirements for independent review 
organizations are set forth in sec.12.202. Section 12.203 states that certain 
conflicts render an independent review organization ineligible for 
certification. Prohibitions of certain activities of independent review 
organizations are described in sec.12.204, including direct or indirect 
compensation arrangements which may affect the review decision. The independent 
review organization's contact with and receipt of information from health care 
providers and patients is governed by sec.12.205. The requirements of notices of 
determinations made by independent review organizations are prescribed in 
sec.12.206. Section 12.207 contains requirements for an independent review 
organization's telephone accessibility. Confidentiality requirements with regard 
to independent review are set forth in sec.12.208. 
Subchapter D contains the regulations for enforcement of standards of 
independent review. Section 12.301 describes how a complaint regarding an 
independent review organization may be filed with the department, and provides 
that the department may make necessary inquiries to investigate such complaints. 
Regulations governing the prosecution of administrative violations are set forth 
in sec.12.302. Subchapter E contains information regarding fees and payment for 
independent review. Section 12.401 provides, in general, that the department 
shall establish, administer, and enforce certification and renewal fees for 
independent review organizations. Specialty classifications of independent 
review are divided into two tiers for purposes of setting fees in sec.12.402. 
Section 12.403 sets forth fee amounts for the two specialty classification tiers 
prescribed by sec.12.402. Section 12.404 sets forth information regarding the 
payment of fees established in this subchapter. Section 12.405 deals with 
failure of payors to pay invoices for independent review within a certain 
timeframe. Section 12.406 sets forth the amounts of application and renewal 
fees.
Subchapter F describes the random assignment of independent review organizations 
by the department. The manner in which requests for independent review are made 
to the department is set forth in sec.12.501. The procedure for random 
assignment of requests for independent review to independent review 
organizations by the department is described in sec.12.502. 
General. Most commenters expressed general support for the new chapter and 
offered comments or concerns on specific sections of the new chapter. One 
commenter specifically supports the following: the definition for "medical and 
scientific evidence" and "active practice;" the provisions for notifying 
patients, patient representatives, and providers of record about independent 
review organization procedures; the prohibition on incentives for independent 
review organization reviewers that would affect review decisions; the 
requirement that costs of review are to be borne by the payor; and the provision 
concerning direct contact with the patient or his/her representative in 
emergency/life-threatening situations.
Agency Response: The agency appreciates the written comments received.
Minimum threshold for review.
A commenter suggests that there be a minimum dollar amount before a person can 
proceed to an independent review. The commenter is concerned that the process 
will be abused and that denial of benefits will be appealed indiscriminately and 
that carriers will be forced to provide a benefit (even when it is not a covered 
benefit) because the cost of the appeal will exceed paying the benefit. The 
commenter suggests that the minimum amount be equal to the average cost of an 
independent review or that a sliding scale be utilized. The commenter also 
questions whether the Medicare appeals process supersedes these rules. The 
commenter suggests that provisions be included to avoid conflict or duplication 
with the Medicare appeals process.
Agency Response: The department acknowledges the commenter's concern but does 
not believe that it has the statutory authority to adopt a minimum threshold 
before the review process can be utilized. It is the department's belief that 
the independent review process is to be available to everyone regardless of the 
amount of the procedure or benefit denied. The department is coordinating with 
the appropriate state and federal Medicare offices to identify any possible 
conflicts with the Medicare appeals process. The department believes that both 
appeals processes can occur without conflict and with minimum, if any, 
duplication. 
Evidentiary use of determination. A commenter recommends that the department 
restrict the use of the independent review organization determination in court 
proceedings and suggests that the records and determinations be considered those 
of a "medical committee" within the meaning of the Health and Safety Code. The 
commenter is concerned that the independent review organization staff will be 
continually subpoenaed to testify if this isn't done and it will adversely 
impact the cost of independent review organization appeals. Agency Response: 
Section 12.208 of the rules reflects the statutory intent of confidentiality of 
individual medical records, personal information and any proprietary information 
provided by payors. The department does not believe that it can provide that the 
records and determinations of an independent review organization are those of a 
"medical committee" as suggested by the commenter because the statutory 
definition of "medical committee" does not include independent review 
organizations. The department is concerned that this action would exceed the 
regulatory authority of the agency. 
sec.12.4. A commenter recommends that new Chapter 12 not be applied to 
utilization review of workers' compensation medical benefits. 
Agency Response: The agency agrees that these rules should not apply to 
utilization review of workers' compensation medical benefits. House Bill 3197, 
75th Texas Legislature, amended Texas Insurance Code Article 21.58A to require 
the regulation of a person who performs review of a medical benefit provided 
under Chapter 408, Labor Code, which is the portion of the Texas Workers' 
Compensation Act that governs workers' compensation benefits. However, that bill 
also stated that this provision does not affect the authority of the Texas 
Workers' Compensation Commission (TWCC) to exercise the powers granted under the 
workers' compensation act, and that in the event of a conflict between the two 
statutes, the workers' compensation act prevails. The agency has determined, in 
conjunction with TWCC, that procedures and rules specific to independent review 
organizations are in conflict with provisions of the workers' compensation act, 
and that the latter should prevail. Procedures for an independent, objective 
review of denial of a medical benefit are already contained in the workers' 
compensation statutes and rules, which provide for medical dispute resolution by 
TWCC and for appeal to the State Office of Administrative Hearings. 
sec.12.5 Adverse Determination, Independent Review and sec.12.103. A commenter 
recommends that the definition of "adverse determination" be clarified to 
include determinations made "on behalf of all payors," and states that the 
current definition fails to take into account those payors who conduct 
utilization review processes in-house. A commenter suggests deleting the words 
"or not appropriate" from the definition of "adverse determination." A commenter 
suggests deleting the words "and appropriateness" from the definition of 
independent review. Another commenter recommends deleting the words "and 
appropriateness" from sec.12.103(1)(A). The commenter believes that a health 
benefit may be deemed appropriate yet still not be a covered benefit under the 
plan, so the issue of appropriateness is not relevant for the purposes of 
independent review. 
Agency Response: The department agrees that "adverse determination" should 
include determinations made on behalf of all payors, and the definition has been 
changed to clarify this issue. The department disagrees with the other 
suggestions. The definitions of adverse determination and independent review are 
consistent with the definitions that the department and the Utilization Review 
Advisory Committee have proposed in the utilization review rules. The department 
believes that the use of the term "appropriate" is consistent with the intent of 
the Legislature to ensure that the utilization review process not be used to 
ration health care by denying treatments which may be appropriate, simply 
because they are costly. 
sec.12.5. Dental Plan and other terms. A commenter recommends including separate 
definitions for "dental benefit plan" and "dental insurance policy" which would 
parallel the definitions for "health benefit plan" and "health insurance policy" 
and would clarify the terms. Another commenter requests adding definitions for 
"management services organizations" and "administrative services organizations." 
Agency Response: The department disagrees and believes that the current 
definition adequately reflects necessary distinctions between a dental benefit 
plan and a dental insurance policy, and between a health benefit plan and health 
insurance policy. The department disagrees that there is a need to add 
definitions for "management services organizations" and "administrative services 
organizations" because these are not specific terms used in this chapter. 
sec.12.5. Life-threatening condition. A commenter suggests that this definition 
use the language provided in the NAIC Utilization Review Model Act for dealing 
with expedited utilization review appeals. 
Agency Response: The department disagrees because the language contained in the 
rule is statutory language and the department does not believe that it would be 
appropriate to change the statutory meaning. When the matter involves an 
emergency situation, then the provisions of Senate Bills 384 and 385 relating to 
managed care and utilization review will cover the situation. 
sec.12.5. A commenter suggests a more specific definition for the term 
"screening criteria." 
Agency Response: The department agrees. This definition has been changed 
accordingly. 
sec.12.103(5). A commenter requests addition of the words "after hours" after 
the word "contacted." 
Agency Response: The department agrees. This language has been changed 
accordingly. 
sec.12.103(9). A commenter believes that the extensive identifying information 
which would have to be provided for each individual in the independent review 
organization would be an administrative burden and not a good indicator of an 
organization's ability to qualify as an independent review organization. The 
commenter supports not requiring the information on each individual and instead 
recommends that the relationships for which information must be submitted 
pursuant to sec.12.103(9) be limited to those which represent at least 5% of 
that person's total revenue, or which represent an investment of $100,000 or 
more. 
Agency Response: Section 12.103(9) has been changed to delete the word "staff" 
and include the word "executives" and has deleted the requirement to submit 
staff profiles as too onerous and administratively burdensome on the independent 
review organization. Section 12.103(9) has also been changed to limit this 
disclosure requirement to those relationships which represent at least 5% of 
that person's total revenues, or which represent a holding or investment worth 
$100,000 or more. The department believes that this change eases the 
administrative burden on independent review organization applicants without 
weakening the statutory prohibition on conflicts of interest. 
sec.12.103(9). A commenter recommends addition of "management or administrative 
services organization or other similar entity" to the list of entities for which 
certain financial relationships must be disclosed. 
Agency Response: The department disagrees and is unclear regarding the type of 
entity referenced by the commenter. The list of entities in the rule is the same 
as that specified in the statute for which certain information must be 
disclosed. 
sec.12.201. A commenter recommends addition of (2)(E), written procedures for 
assessing experimental status for purposes of claim payment, and (2)(F), 
requiring procedures and timeframes for handling emergency reviews. 
Agency Response: The department believes that assessment of experimental status 
for purposes of claim payment is beyond the scope of the statute with regard to 
authority of independent review organizations. In addition, independent review 
procedures are not necessary regarding emergency situations, which are already 
governed procedurally by the provisions of Senate Bills 384 and 385 relating to 
managed care and utilization review. 
sec.12.201(3). A commenter suggests that independent review determinations be 
reviewed by other health care providers, as appropriate for the review, to 
ensure that non-physician health care providers are reviewed by their peers 
rather than a physician or dentist. The commenter believes that a review of a 
determination by a non-physician health care provider is consistent with other 
provisions of the rules. 
Agency Response: The department agrees and has added language to sec.12.201(3) 
and sec.12.201(4) to clarify that the appropriate provider shall review the 
case.
sec.12.202. A commenter suggests that a payor be given the right to review the 
screening criteria and review procedures to be used to determine medical 
necessity and appropriateness of health care by an independent review 
organization and that, should they differ significantly from the payor's own 
such criteria and procedures, the independent review organization be required to 
take that into account. The same commenter recommends that there be an appeal 
mechanism available to payors where a difference of such criteria and procedures 
is not taken into account. Another commenter suggests adding a new subsection 
(e) which would make copies of the independent review organization's 
credentialing policies and procedures available to payors and other interested 
parties upon request. The commenter believes this will keep all parties informed 
of the review requirements and qualifications of the persons making the 
independent review decisions. 
Agency Response: The department disagrees. Medical necessity, although a 
subjective standard, is not subject to variation from company to company. 
Screening criteria will be reviewed by the department and its sufficiency 
determined accordingly. Section 12.206 provides that the independent review 
organization's notification of determination include a description and the 
source of the screening criteria that were utilized and a description of the 
qualifications of the reviewing physician or provider. This requirement in the 
rules will keep all parties informed of the review requirements and 
qualifications of the person making the independent review decision. 
sec.12.202. A commenter recommends that language be added requiring that 
individual profiles be made available, on request, to the commissioner or 
his/her designee. 
Agency Response: Assuming that the commenter is referring to sec.12.202(b), 
which requires an applicant to provide certain personnel information, such 
information is already available to the department pursuant to sec.12.302 and 
additional language is not necessary. 
sec.12.203. A commenter recommends that a professional association of health 
care providers not be allowed to be an independent review organization. Agency 
Response: The department disagrees. While the statute specifically prohibits an 
independent review organization from being a subsidiary of, or in any way 
controlled by, a payor or a trade or professional organization of payors, no 
such prohibition exists for professional associations of providers.
sec.12.205. A commenter notes that the rules do not specify whether the three 
business day requirement applies to when materials must be sent to, or actually 
received by, the independent review organization. The commenter believes that if 
actual receipt is required then additional costs may have to be incurred by the 
utilization review agent because they will only have two business days rather 
than three days to compile the information and may have to use a more expensive 
means of delivering the information. 
Agency Response: The department notes that the requirement to provide the 
information to the independent review organization within the specified time is 
statutory and the information is required to be provided within the specified 
timeframe. The department considers that the word "provided" means actual 
receipt by the independent review organization and does not believe that it is 
sufficient to deposit the materials in the U.S. Mail on the third business day. 
Subsection (c) has been changed to clarify that the independent review 
organization is to actually receive the information within that time. 
sec.12.205(e). A commenter believes that an independent review organization 
should not be reimbursed by a utilization review agent for copy costs. Another 
commenter is concerned that the rule will conflict with rules regarding the 
costs of copies of other agencies and lead to confusion with disputes and 
procedures. 
Agency Response: The department does not agree. It is the duty of the party 
performing utilization review to seek out all pertinent information before 
making a determination of medical necessity. Requiring such reimbursement for 
the costs of copying such information will provide incentive for gathering all 
such information in the first level of review, or at least avoid any 
disincentives for gathering it and providing it to the independent review 
organization. The department recognizes that other agencies may have different 
rules regarding the amount to be paid for copy costs. The department also 
recognizes that a uniform rate cannot be adopted for all agencies. However, it 
does not believe that the rules will conflict with other agencies because the 
utilization review statute requires utilization review agents to reimburse 
providers for the costs of copies based on rules of the Texas Workers' 
Compensation Commission. These provisions are consistent with the utilization 
review statute and other rules of this agency regarding the costs of copies paid 
to providers.
sec.12.206(a). A commenter recommends that notice of determination be required 
to be given to a payor if the payor is conducting its own utilization review. 
Agency Response: The department agrees and the language has been changed. 
sec.12.206(b). A commenter recommends requiring a more expedited timeframe where 
the patient is currently in the hospital. Another commenter questions whether 
the times for notice in subsections (b) and (c) are business days or calendar 
days and suggests that the subsections should so specify. 
Agency Response: The statute sets out specific timeframes for response and does 
not specify a more expedited timeframe for patients in the hospital. Therefore, 
the department declines to do so by rule. The times for notice are based on 
calendar days and not business days. It is generally recognized that if a 
statute does not specify business days, then calendar days will be used to 
determine the period of time. The department is using calendar days to determine 
all timeframes unless business days have been specifically stated. 
sec.12.206(c). A commenter suggests addition of the words "or emergency" after 
"life-threatening condition." Another commenter recommends shortening the 
timeframe for response in life-threatening conditions. 
Agency Response: The timeframe for response in the case of life-threatening 
conditions is dictated by statute. Imposition of a timeframe for response in 
emergency situations is not necessary, since emergency situations are governed 
by the provisions of Senate Bills 384 and 385 relating to managed care and 
utilization review. 
sec.12.206(d). A commenter recommends adding as a requirement of notice a 
reference to pertinent health benefit plan language. 
Agency Response: The department disagrees. Determinations made by independent 
review organizations are based on medical necessity, and pertinent health 
benefit plan language has no bearing on the standards of medical necessity. 
Section 12.204(a) prohibits an independent review organization from setting or 
imposing any notice or other review procedures contrary to the requirements of 
the health insurance policy or health benefit plans other than those set forth 
in the rules. 
sec.12.206(d). A commenter noted that the screening criteria are not to be used 
as guidelines for making the decision. 
Agency Response: The department agrees and has deleted the phrase regarding 
using guidelines in making determinations. The independent reviewer should refer 
to guidelines as an aid in the review process but will make a final decision 
based on his/her professional expertise and judgment. 
sec.12.207(a). One commenter recommends increased requirements for phone access 
available to utilization review agents due to the fact that there are two time 
zones in Texas.
Agency Response: The department disagrees that increased telephone access is 
necessary. Texans that reside in the mountain time zone will have the same hours 
of access as those in the central time zone. 
sec.12.207(b). A commenter believes that two days is not an appropriate 
timeframe for handling emergency or urgent situations. 
Agency Response: The delivery of emergency care and payment for that care is 
covered under Senate Bill 385. Most likely the independent review organization 
process would be used retrospectively to determine whether the payor is 
obligated to pay for the emergency care rendered. Therefore, the timeframe set 
out in statute and rules should not adversely affect the delivery of emergency 
care. 
sec.12.208(a). One commenter suggests setting minimum standards for information 
constituting "personal information" in the context of sec.12.208(a). 
Agency Response: The department agrees and the language has been changed to 
include, at a minimum, a person's name, address, telephone number, social 
security number and financial information. 
sec.12.208(a). This section requires that certain information be held 
confidential by an independent review organization "to the extent required by 
law." One commenter suggests that this language be deleted, since there may be 
no specific laws regarding the confidentiality of a payor's proprietary 
information. The same commenter recommends that independent review organizations 
treat determinations confidentially with respect to payors, and that independent 
review organizations be prohibited from publishing data which identifies a payor 
without prior written consent. 
Agency Response: The department agrees and the language has been changed. 
sec.12.208(f). A commenter suggests that the words "payors or utilization review 
agents" be added after the word "providers" in the last sentence of this 
paragraph, and reasons that, by indicating that summary information is not 
considered confidential, the information of a payor or utilization review agent 
that is proprietary will be considered confidential. 
Agency Response: The department agrees and has added the recommended language. 
sec.12.208(h). A commenter recommends that information generated and obtained by 
the independent review organization in the course of its reviews be retained for 
at least five years.
Agency Response: The department agrees that the retention time should be longer, 
and has increased it to a minimum of four years. 
sec.12.208(h). A commenter requests clarification of language in sec.12.208(h) 
regarding retention of information relating to "a case which may be reopened." 
The same commenter requests clarification of whether this retention requirement 
pertains only in instances where the independent review organization has made an 
adverse determination. 
Agency Response: The department agrees that this language is vague, and has 
deleted it. It is the department's intent that the retention requirements of 
this section pertain to all cases whether or not an adverse determination has 
been made in the matter before the independent review organization.
sec.12.301. A commenter requests that the department impose upon itself specific 
timeframes for response to complaints. Another commenter requests that a payor 
or utilization review agent be allowed to file a complaint with the department 
specifically regarding independent review organization staff. Agency Response: 
The department disagrees. The rule requires a reasonable time period for 
response to complaints. Because the department may receive a wide variety of 
complaints, it is difficult to impose a specific timeframe for response. The 
department believes that filing a complaint regarding independent review 
organization staff is already addressed, since such complaints are allowed by 
sec.12.301(a). 
sec.12.302(b)(1) and (3). One commenter recommends that the department have 
access only to organizational meeting minutes and records which relate to the 
operation of the independent review organization. 
Agency Response: Section 12.302, as originally proposed, has been deleted from 
the rules because the department's authority under Insurance Code Article 1.24 
to make inquiries of various licensed or certificated entities would also apply 
to independent review organizations. Pursuant to exercise of this authority, the 
department would be able to address all reasonable inquiries to an independent 
review organization. 
sec.12.402. A commenter requests clarification of whether the independent review 
of cases pertaining to occupational therapy and physical therapy would be made 
by a physical therapist or by a doctor of medicine or doctor of osteopathy. This 
commenter states that such therapies must be ordered by doctors, and urges that 
they be reimbursed as tier one reviews. 
Agency Response: The department agrees with the commenter that such therapies be 
reimbursed as tier one reviews since only a licensed physician may order such 
therapies to be performed. The department expects cases pertaining to 
occupational therapy and physical therapy to be reviewed by an occupational 
therapist or physical therapist, as appropriate, and by a physician. 
For, with changes: Texas Medical Foundation, Mutual of Omaha Insurance Company, 
Blue Cross Blue Shield of Texas, The Disability Policy Consortium, New York Life 
Insurance Company, Texas HMO Association, American Insurance Association, 
Liberty Mutual Group, Texas Optometric Association, Inc., Kaiser Foundation 
Health Plan of Texas, Office of Public Insurance Counsel, Texas Association of 
Life and Health Insurers and Alliance of American Insurers.

SUBCHAPTER A.General Provisions
28 TAC sec.sec.12.1-12.5
The new sections are adopted under the Insurance Code, Articles 21.58C and 
1.03A. The Insurance Code, Article 21.58C provides that the commissioner shall 
promulgate standards and rules for the certification, selection, and operation 
of independent review organizations to perform independent review. The Insurance 
Code, Article 1.03A provides that the Commissioner of Insurance may adopt rules 
and regulations to execute the duties and functions of the Texas Department of 
Insurance as authorized by statute. The Government Code, Chapter 2001, 
sec.sec.2001.004 et seq. authorizes and requires each state agency to adopt 
rules of practice setting forth the nature and requirement of available 
procedures and prescribes the procedures for adoption of rules by a state 
administrative agency. 

sec.12.1. Statutory Basis.
This chapter implements the provisions of Senate Bill 386 enacted by Acts 1997, 
75th Legislature, Regular Session, codified as the Texas Insurance Code, Article 
21.58C, effective September 1, 1997. 

sec.12.3. Effect of Chapter.
The sections in this chapter are prescribed to govern the performance of 
appropriate statutory and regulatory functions and are not to be construed as 
limitations upon the exercise of statutory authority by the Commissioner of 
Insurance. 

sec.12.4. Applicability. 
All independent review organizations performing independent reviews of adverse 
determinations made in Texas as requested by utilization review agents, health 
insurance carriers, health maintenance organizations, and managed care entities, 
regardless of where the independent review activities are physically based, must 
comply with this chapter. 

sec.12.5. Definitions. 
The following words and terms, when used in this chapter, shall have the 
following meanings unless the context clearly indicates otherwise. 
Act -- Insurance Code, Article 21.58C, entitled Standards for Independent Review 
Organizations. 
Active practice -- 20 hours per week in the examination, diagnosis, and/or 
treatment of patients. 
Administrator -- A person holding a certificate of authority under the Insurance 
Code, Article 21.07-6. 
Adverse determination -- A determination made on behalf of any payor that the 
health care services furnished or proposed to be furnished to a patient are not 
medically necessary or not appropriate. 
Affiliate -- A person who directly or indirectly, through one or more 
intermediaries, controls, is controlled by, or is under common control with the 
person specified. 
Commissioner -- The Commissioner of Insurance.
Department -- Texas Department of Insurance. 
Dental plan -- An insurance policy or health benefit plan, including a policy 
written by a company subject to the Insurance Code, Chapter 20, that provides 
coverage for expenses for dental services.
Dentist -- A licensed doctor of dentistry holding either a D.D.S. or a D.M.D. 
degree. 
Emergency care -- Health care services provided in a hospital emergency facility 
or comparable facility to evaluate and stabilize medical conditions of a recent 
onset and severity, including but not limited to severe pain, that would lead a 
prudent layperson possessing an average knowledge of medicine and health to 
believe that his or her condition, sickness, or injury is of such a nature that 
failure to get immediate medical care could result in: 
(A) placing the patient's health in serious jeopardy;
(B) serious impairment to bodily functions; 
(C) serious dysfunction of any bodily organ or part;
(D) serious disfigurement; or 
(E) in the case of a pregnant woman, serious jeopardy to the health of the 
fetus. 
Health benefit plan -- A plan of benefits that defines the coverage provisions 
for health care offered or provided by any organization, public or private, 
other than health insurance. 
Health care provider -- Any person, corporation, facility or institution, 
licensed by a state to provide or otherwise lawfully providing health care 
services, that is eligible for independent reimbursement for those services.
Health insurance policy -- An insurance policy, including a policy subject to 
the Insurance Code, Chapter 20, that provides coverage for medical or surgical 
expenses incurred as a result of accident or sickness.
Independent review -- A system for final administrative review of the medical 
necessity and appropriateness of health care services being provided or proposed 
to be provided to an individual who resides within the state by a designated 
independent review organization. 
Independent review organization -- An entity that is certified by the 
commissioner to conduct independent review under the authority of the Act. Such 
entity must have the capacity for independent review of all specialty 
classifications and subspecialties thereof contained in the two tiered structure 
of specialty classifications set forth in sec.12.402 of this title (relating to 
Classifications of Specialty).
Independent review plan -- The screening criteria and review procedures of an 
independent review organization.
Life-threatening condition -- A disease or condition for which the likelihood of 
death is probable unless the course of the disease or condition is interrupted. 
Medical and scientific evidence -- Evidence derived from the following sources: 
(A) Peer reviewed scientific studies published in or accepted for publication by 
medical journals that meet nationally recognized requirements for scientific 
manuscripts and that submit most of their published articles for review by 
experts who are not part of the editorial staff. 
(B) Peer reviewed literature, biomedical compendia and other medical literature 
that meet the criteria of the National Institute of Health's National Library of 
Medicine for indexing in Index Medicus, Excerpt--Medicus (EMBASE), Medline, and 
MEDLARS database Health Services Technology Assessment Research (HSTAR). 
(C) Medical journals recognized by the Secretary of Health and Human Services, 
under Section 1961(t)(2) of the Social Security Act.
(D) The following standard reference compendia: The American Hospital Formulary 
Service Drug Information, the American Medical Association Drug Evaluation, the 
American Dental Association Accepted Dental Therapeutics, and the United States 
Pharmacopoeia- Drug Information. 
(E) Findings, studies or research conducted by or under the auspices of federal 
government agencies and nationally recognized federal research institutes 
including the Federal Agency for Health Care Policy and Research, National 
Institutes of Health, National Cancer Institute, National Academy of Sciences, 
Health Care Financing Administration, Congressional Office of Technology 
Assessment, and any national board recognized by the National Institutes of 
Health for the purpose of evaluating the medical value of health services. 
(F) Peer reviewed abstracts accepted for presentation at major medical 
association meetings. 
Nurse -- A professional or registered nurse, licensed vocational nurse, or 
licensed practical nurse. 
Open records law -- Chapter 552, Government Code. 
Patient -- A person covered by a health insurance policy or health benefit plan 
on whose behalf independent review is sought. This term includes a person who is 
covered as an eligible dependent of another person.
Payor -- An insurer writing health insurance policies; any health maintenance 
organization, self-insurance plan, or any other person or entity which provides, 
offers to provide, or administers hospital, outpatient, medical, or other health 
benefits to persons treated by a health care provider in this state pursuant to 
any policy, plan, or contract.
Person -- An individual, corporation, partnership, association, joint stock 
company, trust, unincorporated organization, any similar entity, or any 
combination of the foregoing acting in concert. 
Physician -- A licensed doctor of medicine or a doctor of osteopathy. 
Provider of record -- The physician or other health care provider that has 
primary responsibility for the care, treatment, and services rendered or 
requested on behalf of the patient, or the physician or health care provider 
that has rendered or has been requested to provide the care, treatment, and/or 
services to the patient. This definition includes any health care facility where 
treatment is rendered on an inpatient or outpatient basis.
Screening criteria -- The written policies, medical protocols, previous 
decisions and/or guidelines used by the independent review organization to make 
preliminary decisions about the medical necessity and appropriateness of a 
treatment, procedure, or service. 
Utilization review agent -- A person holding a certificate of registration under 
the Insurance Code, Article 21.58A. 
Working day-- A weekday, excluding New Years Day, Memorial Day, Fourth of July, 
Labor Day, Thanksgiving Day, and Christmas Day. 
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 6, 1997.
TRD-9714790
Lynda H. Nesenholtz
Assistant General Counsel 
Texas Department of Insurance
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 463-6327

SUBCHAPTER B.Certification of Independent Review Organizations 
28 TAC sec.sec.12.101-12.109
The new sections are adopted under the Insurance Code, Articles 21.58C and 
1.03A. The Insurance Code, Article 21.58C provides that the commissioner shall 
promulgate standards and rules for the certification, selection, and operation 
of independent review organizations to perform independent review. The Insurance 
Code, Article 1.03A provides that the Commissioner of Insurance may adopt rules 
and regulations to execute the duties and functions of the Texas Department of 
Insurance as authorized by statute. The Government Code, Chapter 2001, 
sec.sec.2001.004 et seq. authorizes and requires each state agency to adopt 
rules of practice setting forth the nature and requirement of available 
procedures and prescribes the procedures for adoption of rules by a state 
administrative agency. 

sec.12.103. Information Required.
The applicant must provide information required by the commissioner, which 
includes, but is not limited to the following:
(1) a summary of the independent review plan which meets the requirements of 
sec.12.201 of this title (relating to Independent Review Plan) and must include: 
(A) a summary description of screening criteria and review procedures to be used 
to determine medical necessity and appropriateness of health care; 
(B) a certification signed by an authorized representative that such screening 
criteria and review procedures to be applied in review determinations are 
established with input from appropriate health care providers and approved by 
physicians in accordance with sec.12.201(3) of this title (relating to 
Independent Review Plans); and 
(C) procedures ensuring that the information regarding the reviewing physicians 
and providers is updated in accordance with sec.12.105(d) of this title 
(relating to Revisions During Review Process) and sec.12.108(e) of this title 
(relating to Renewal of Certificate of Registration) to ensure the independence 
of each health care provider or physician making review determinations. 
(2) copies of policies and procedures which ensure that all applicable state and 
federal laws to protect the confidentiality of medical records and personal 
information are followed. These procedures must comply with sec.12.208 of this 
title (relating to Confidentiality);
(3) a certification signed by an authorized representative that the independent 
review organization will comply with the provisions of the Act; 
(4) a description of personnel and credentialing, and a completed profile for 
each physician and provider, both as described in sec.12.202 of this title 
(relating to Personnel and Credentialing); 
(5) a description of hours of operation and how the independent review 
organization may be contacted after hours, during weekends and holidays, as set 
forth in sec.12.207 of this title (relating to Independent Review Organization's 
Telephone Access); 
(6) the organizational information, documents and all amendments, including: 
(A) the bylaws, rules and regulations, or any similar document regulating the 
conduct of the internal affairs of the applicant with a notarized certification 
bearing the original signature of an officer or authorized representative of the 
applicant that they are true, accurate, and complete copies of the originals; 
(B) for an applicant that is publicly held, the name of each stockholder or 
owner of more than five percent of any stock or options; 
(C) a chart showing the internal organizational structure of the applicant's 
management and administrative staff; and 
(D) a chart showing contractual arrangements of the independent review system. 
(7) the name of any holder of bonds or notes of the applicant that exceed 
$100,000; 
(8) the name and type of business of each corporation or other organization that 
the applicant controls or is affiliated with and the nature and extent of the 
affiliation or control and a chart or list clearly identifying the relationships 
between the applicant and any affiliates; 
(9) biographical information about officers, directors, and executives ; 
(A) the independent review organization must submit the name and biographical 
information for each director, officer, and executive of the applicant, any 
entity listed under paragraph (8) of this section, and a description of any 
relationship the named individual has which represents revenue equal to or 
greater than five percent of that person's total annual revenue or which 
represents a holding or investment worth $100,000 or more in any of the 
following entities: 
(i) a health benefit plan; 
(ii) a health maintenance organization; 
(iii) an insurer; 
(iv) a utilization review agent; 
(v) a nonprofit health corporation; 
(vi) a payor; 
(vii) a health care provider; or 
(viii) a group representing any of the entities described by clauses (i) through 
(viii) of this subparagraph. 
(B) any relationship between the independent review organization and any 
affiliate or other organization in which an officer, director, or employee of 
the independent review organization holds a five percent or more interest; 
(C) a list of any currently outstanding loans or contracts to provide services 
between the applicant and the affiliates; 
(10) information related to out-of-state licensure and service of legal process. 
All applicants must furnish a copy of the certificate of registration or other 
licensing document from the domiciliary state's licensing authority. As a 
condition of being certified to conduct the business of independent review in 
this state, an independent review organization that maintains its principal 
offices or any portion of its books, records, or accounts outside this state 
must appoint and maintain a person in this state as attorney for service of 
process on whom all judicial and administrative process, notices, or demands may 
be served, and must notify the department of any change of appointment or 
appointee's address immediately; 
(11) the percentage of the applicant's revenues that are anticipated to be 
derived from independent reviews conducted. 

sec.12.106. Qualifying Examinations.
The commissioner or his or her designee may conduct an on-site qualifying 
examination of an applicant as a requirement of certification as an independent 
review organization. Documents must be available for inspection at the time of 
such qualifying examination at the administrative offices of the independent 
review organization. 
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 6, 1997.
TRD-9714791
Lynda H. Nesenholtz
Assistant General Counsel
Texas Department of Insurance
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 463-6327

SUBCHAPTER C.General Standards of Independent Review
28 TAC sec.sec.12.201-12.208
The new sections are adopted under the Insurance Code, Articles 21.58C and 
1.03A. The Insurance Code, Article 21.58C provides that the commissioner shall 
promulgate standards and rules for the certification, selection, and operation 
of independent review organizations to perform independent review. The Insurance 
Code, Article 1.03A provides that the Commissioner of Insurance may adopt rules 
and regulations to execute the duties and functions of the Texas Department of 
Insurance as authorized by statute. The Government Code, Chapter 2001, 
sec.sec.2001.004 et seq. authorizes and requires each state agency to adopt 
rules of practice setting forth the nature and requirement of available 
procedures and prescribes the procedures for adoption of rules by a state 
administrative agency. 

sec.12.201. Independent Review Plan. 
The independent review plan shall be conducted in accordance with standards 
developed with input from appropriate health care providers, and reviewed and 
approved by a physician. The independent review plan shall include the following 
components: 
(1) a description of the elements of review which the independent review 
organization provides; 
(2) written procedures for: 
(A) notification of the independent review organization's determinations 
provided to the patient or a person acting on behalf of the patient, the 
patient's provider of record, and the utilization review agent as addressed in 
sec.12.206 of this title (relating to Notice of Determinations Made by 
Independent Review Organizations); 
(B) review, including: 
(i) any form used during the review process; 
(ii) timeframes that shall be met during the review; 
(C) accessing appropriate specialty review; 
(D) contacting and receiving information from health care providers in 
accordance with sec.12.205 of this title (relating to Independent Review 
Organization's Contact With and Receipt of Information from Health Care 
Providers); 
(3) screening criteria. Each independent review organization shall utilize 
written medically acceptable screening criteria which are established and 
periodically evaluated and updated with appropriate involvement from physicians, 
including practicing physicians, and other health care providers. Such screening 
criteria must be objective, clinically valid, compatible with established 
principles of health care, and flexible enough to allow deviations from the 
norms when justified on a case-by-case basis. Screening criteria must only be 
used as a tool in the review process. Such written screening criteria and review 
procedures shall be available for review and inspection and copying as necessary 
by the commissioner or his or her designated representative in order for the 
commissioner to carry out his or her lawful duties under the Insurance Code.
(4) independent review determinations. Each independent review organization 
shall utilize review procedures which are established and periodically evaluated 
and updated with appropriate involvement from physicians, including practicing 
physicians, and other health care providers. Independent review determinations 
shall be made in accordance with medically accepted screening criteria, taking 
into account the special circumstances of each case that may require a deviation 
from the norm. All independent review determinations shall be made by 
physicians, dentists, or other health care providers, as appropriate. 

sec.12.205. Independent Review Organization Contact With and Receipt of 
Information from Health Care Providers and Patients.
(a) A health care provider may designate one or more individuals as the initial 
contact or contacts for independent review organizations seeking routine 
information or data. In no event shall the designation of such an individual or 
individuals preclude an independent review organization or medical advisor from 
contacting a health care provider or others in his or her employ where a review 
might otherwise be unreasonably delayed or where the designated individual is 
unable to provide the necessary information or data requested by the independent 
review organization. 
(b) An independent review organization may not engage in unnecessary or 
unreasonably repetitive contacts with the health care provider or patient and 
shall base the frequency of contacts or reviews on the severity or complexity of 
the patient's condition or on necessary treatment and discharge planning 
activity. 
(c) In addition to pertinent files containing medical and personal information, 
the utilization review agent, health insurance carrier, health maintenance 
organization, or managed care entity requesting the independent review shall be 
responsible for timely delivering to and ensuring receipt by the independent 
review organization any written narrative supplied by the patient pursuant to 
Insurance Code, Article 21.58A. However, in instances of emergency or life-
threatening condition, the independent review organization shall contact the 
patient or person acting on behalf of the patient, and provider directly. 
(d) An independent review organization shall notify the department within 24 
hours of receipt of information regarding an independent review from the 
requesting utilization review agent, health insurance carrier, health 
maintenance organization, or managed care entity that such documents have been 
delivered and the date of such delivery. 
(e) An independent review organization shall reimburse health care providers for 
the reasonable costs of providing medical information in writing, including 
copying and transmitting any requested patient records or other documents. A 
health care provider's charge for providing medical information to an 
independent review organization shall not exceed the cost of copying set by 
rules of the Texas Workers' Compensation Commission for records and may not 
include any costs that are otherwise recouped as a part of the charge for health 
care. Such expense shall be reimbursed by the utilization review agent, health 
insurance carrier, health maintenance organization, or managed care entity 
requesting the review as an expense of independent review.
(f) When conducting independent review, the independent review organization 
shall collect any information necessary to review the adverse determination not 
already provided by the utilization review agent, health insurance carrier, 
health maintenance organization, or managed care entity. This information may 
include identifying information about the patient, the benefit plan, the 
treating health care provider, and/or facilities rendering care. It may also 
include clinical information regarding the diagnoses of the patient and the 
medical history of the patient relevant to the diagnoses; the patient's 
prognosis; and/or the treatment plan prescribed by the treating health care 
provider along with the provider's justification for the treatment plan. 
(g) The independent review organization should share all clinical and 
demographic information on individual patients among its various divisions to 
avoid duplication of requests for information from patients or providers.

sec.12.206. Notice of Determinations Made by Independent Review Organizations. 
(a) An independent review organization shall notify the patient or a person 
acting on behalf of the patient, the patient's provider of record, the 
utilization review agent, the payor, and the department of a determination made 
in an independent review. 
(b) The notification required by this section must be mailed or otherwise 
transmitted not later than the earlier of: 
(1) the 15th day after the date the independent review organization receives the 
information necessary to make a determination; or 
(2) the 20th day after the date the independent review organization receives the 
request for the independent review; and 
(c) in the case of a life-threatening condition, by telephone to be followed by 
facsimile, electronic mail, or other method of transmission not later than the 
earlier of: 
(1) the 5th day after the date the independent review organization receives the 
information necessary to make a determination; or 
(2) the 8th day after the date the independent review organization receives the 
request for independent review. 
(d) Notification of determination by the independent review organization must 
include: 
(1) the specific reasons, including the clinical basis, for the determination; 
(2) a description and the source of the screening criteria that were utilized; 
(3) a description of the qualifications of the reviewing physician or provider; 
and 
(4) a certification by the independent review organization that the reviewing 
physician or provider has certified that no known conflicts of interest exist 
between him or her and any of the treating physicians or providers or any of the 
physicians or providers who reviewed the case for determination prior to 
referral to the independent review organization.
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 6, 1997.
TRD-9714792
Lynda H. Nesenholtz
Assistant General Counsel
Texas Department of Insurance
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 463-6327

SUBCHAPTER D.Enforcement of Independent Review Standards
28 TAC sec.sec.12.301, 12.302
The new sections are adopted under the Insurance Code, Articles 21.58C and 
1.03A. The Insurance Code, Article 21.58C provides that the commissioner shall 
promulgate standards and rules for the certification, selection, and operation 
of independent review organizations to perform independent review. The Insurance 
Code, Article 1.03A provides that the Commissioner of Insurance may adopt rules 
and regulations to execute the duties and functions of the Texas Department of 
Insurance as authorized by statute. The Government Code, Chapter 2001, 
sec.sec.2001.004 et seq. authorizes and requires each state agency to adopt 
rules of practice setting forth the nature and requirement of available 
procedures and prescribes the procedures for adoption of rules by a state 
administrative agency. 

sec.12.301. Complaints and Information. 
(a) Complaints to the department. Within a reasonable time period, upon receipt 
of a written complaint alleging a violation of this chapter or the Act by an 
independent review organization from a patient's health care provider, a person 
acting on behalf of the patient, the patient, the payor, or a utilization review 
agent, the department shall investigate the complaint and furnish a written 
response to the complainant and the independent review organization named. 
(b) Authority of the department to make inquiries. The department may use the 
authority of Insurance Code, Article 1.24, to make inquiries of
any independent review organization. 

sec.12.302. Administrative Violations. 
(a) If the department believes that any person conducting independent review is 
in violation of the Act or this chapter, the department shall notify the 
independent review organization of the alleged violation and may compel the 
production of any and all documents or other information as necessary to 
determine whether or not such violation has taken place.
(b) The department may initiate appropriate proceedings under this chapter. 
(c) Proceedings under this chapter are a contested case for the purpose of the 
Government Code, Chapter 2001. 
(d) If the commissioner or his or her designee determines that the independent 
review organization has violated or is violating any provision of the Act or 
this chapter, the commissioner or his or her designee may: 
(1) impose sanctions under the Insurance Code, Article 1.10;
(2) issue a cease and desist order under the Insurance Code, Article 1.10A; 
and/or 
(3) assess administrative penalties under the Insurance Code, Article 1.10E. 
(e) If the independent review organization has violated or is violating any 
provisions of the Insurance Code other than the Act, or applicable rules of the 
department, sanctions may be imposed under the Insurance Code, Articles 1.10, 
1.10A, or 1.10E. 
(f) The commission of fraudulent or deceptive acts or omissions in obtaining, 
attempting to obtain, or use of certification or designation as an independent 
review organization shall be a violation of the Act. 
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 6, 1997.
TRD-9714793
Lynda H. Nesenholtz
Assistant General Counsel
Texas Department of Insurance
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 463-6327

SUBCHAPTER E.Fees and Payment
28 TAC sec.sec.12.401-12.406
The new sections are adopted under the Insurance Code, Articles 21.58C and 
1.03A. The Insurance Code, Article 21.58C provides that the commissioner shall 
promulgate standards and rules for the certification, selection, and operation 
of independent review organizations to perform independent review. The Insurance 
Code, Article 1.03A provides that the Commissioner of Insurance may adopt rules 
and regulations to execute the duties and functions of the Texas Department of 
Insurance as authorized by statute. The Government Code, Chapter 2001, 
sec.sec.2001.004 et seq. authorizes and requires each state agency to adopt 
rules of practice setting forth the nature and requirement of available 
procedures and prescribes the procedures for adoption of rules by a state 
administrative agency. 

sec.12.404. Payment of Fees. 
(a) Independent review organizations shall bill utilization review agents or 
payors, as appropriate, directly for fees for independent review. 
(b) Independent review organizations may also bill utilization review agents or 
payors, as appropriate, for copy expenses related to review as set forth in 
sec.12.205 of this title (relating to Independent Review Organization Contact 
With and Receipt of Information from Heath Care Providers and Patients). 
(c) At the time of billing, independent review organizations shall provide to 
the department a copy of such bill for information. 
(d) Utilization review agents or payors, as appropriate, shall pay independent 
review organizations directly within 30 days of receipt of invoice. 
(e) Utilization review agents may recover from the payors the costs associated 
with the independent review. 

sec.12.405. Failure to Pay Invoice. 
Failure by utilization review agents or payors, as appropriate, to pay invoices 
from an independent review organization within 30 days of receipt shall 
constitute a violation subject to penalty under sec.12.303 of this title 
(relating to Administrative Violations). 
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 6, 1997.
TRD-9714794
Lynda H. Nesenholtz
Assistant General Counsel
Texas Department of Insurance
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 463-6327

SUBCHAPTER F.Random Assignment of Independent Review Organizations
28 TAC sec.sec.12.501, 12.502
The new sections are adopted under the Insurance Code, Articles 21.58C and 
1.03A. The Insurance Code, Article 21.58C provides that the commissioner shall 
promulgate standards and rules for the certification, selection, and operation 
of independent review organizations to perform independent review. The Insurance 
Code, Article 1.03A provides that the Commissioner of Insurance may adopt rules 
and regulations to execute the duties and functions of the Texas Department of 
Insurance as authorized by statute. The Government Code, Chapter 2001, 
sec.sec.2001.004 et seq. authorizes and requires each state agency to adopt 
rules of practice setting forth the nature and requirement of available 
procedures and prescribes the procedures for adoption of rules by a state 
administrative agency. 

sec.12.501. Requests for Independent Review. 
Requests for independent review shall be made to the department on behalf of the 
patient by the utilization review agent pursuant to Insurance Code, Article 
21.58A sec.6A and Chapter 19, Subchapter R of this title (relating to 
Utilization Review Agents), or by a health insurance carrier, health maintenance 
organization, or managed care entity pursuant to Civil Practice and Remedies 
Code, sec.88.003(c).

sec.12.502. Random Assignment. 
(a) The department shall randomly assign each request for independent review to 
an independent review organization, and shall notify the utilization review 
agent and the health insurance carrier, health maintenance organization or 
managed care entity requesting the independent review, the independent review 
organization, the patient or a person acting on behalf of the patient, and the 
provider of record of such assignment. 
(b) The department shall screen treating physicians, other providers, and payors 
against the independent review organization. The independent review organization 
shall screen its physicians and other providers conducting independent review 
for potential conflicts of interest. The department shall have the discretion to 
determine whether conflicts exist. 
(c) Independent review organizations shall be added to the list from which 
random assignments for independent review are made in order of the date of 
certification by the department. 
(d) Random assignment shall be made chronologically from the list of independent 
review organizations with ultimate assignment to the first in line with no 
apparent conflicts of interest. 
(e) An independent review organization assigned an independent review moves the 
independent review organization to the bottom of the list. 
(f) Nonselection for presence of conflicts of interest does not move the 
independent review organization to the bottom of the list. Such independent 
review organization retains its chronological position until selected for 
independent review. 
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 6, 1997.
TRD-9714795
Lynda H. Nesenholtz
Assistant General Counsel
Texas Department of Insurance
Effective date: November 26, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 463-6327

TITLE 30. ENVIRONMENTAL QUALITY
PART I. Texas Natural Resource Conservation Commission 
CHAPTER 50.Action on Applications
SUBCHAPTER B.Action by the Commission
30 TAC sec.50.15
The Texas Natural Resource Conservation Commission (commission) adopts an 
amendment to 30 TAC sec.50.15, concerning Scope of Proceedings. The section is 
adopted with changes to the proposed text as published in the September 19, 
1997, issue of the Texas Register (22 TexReg 9433). 
Chapter 50, Subchapter B was adopted May 8, 1996, and effective June 6, 1996, 
replacing 30 TAC sec.305.98. These amendments will attain consistency with 
federal permitting requirements, which is required before EPA may approve the 
assumption by Texas of the federal National Pollutant Discharge Elimination 
System (NPDES) program for permitting discharges into waters in the state.
EXPLANATION OF ADOPTED RULE 
The amendment to sec.50.15 will attain consistency with NPDES, Resource 
Conservation and Recovery Act (RCRA) and Underground Injection Control (UIC) 
program requirements. Specifically, 40 Code of Federal Regulations (CFR) 
sec.122.46 provides that NPDES permits shall be effective for a fixed term not 
to exceed five years and upon expiration must be reissued in their entirety. 
RCRA and UIC permits, pursuant to 40 CFR sec.270.50 and sec.144.36 respectively, 
are treated similarly except the fixed term may not exceed ten years. At 
expiration of an NPDES, RCRA, or UIC permit, the holder seeking reissuance must 
submit an application that is subject to technical evaluation, as well as public 
participation in the decision to issue or deny the application. Before this 
amendment, sec.50.15 provided that the commission could elect to limit 
consideration in permit renewal, amendment, or modification proceedings to only 
those portions of a permit for which the application requests action. The 
amended rule deletes the term "renewal," the term in state permit procedure that 
describes the same process as "reissuance" does under federal rules, so that 
every permit renewal will in effect be a new permit and all portions of a permit 
will have a fixed duration not to exceed either five or ten years, consistent 
with federal requirements. 
The rule change further specifies that the commission may continue to limit 
consideration in renewals of preconstruction permits consistent with sec.382.055 
of the Texas Health & Safety Code, which limits the commission's authority to 
impose new requirements in such permits renewals. The rule was amended to state 
that terms, conditions and provisions of existing permits will remain in effect 
until the commission acts on the application. 
TAKINGS IMPACT ASSESSMENT 
The commission has prepared a Takings Impact Assessment for these rules pursuant 
to Texas Government Code, sec.2007.043. The following is a summary of that 
assessment. The specific purpose of the rule amendment is to facilitate 
compliance with the federal requirement that, upon expiration of the permit, the 
holder must submit an application for a permit that is subject to technical 
review and public participation in the agency's decision to grant or deny the 
application. The rule will advance this specific purpose by removing the 
existing authority to limit the scope of consideration in renewals of permits in 
applicable program areas. Promulgation and enforcement of these rules will not 
burden private real property which is the subject of the rules because this 
rulemaking, which sets forth requirements applicable to all permitted 
facilities, does not restrict or limit the owner's right to the property that 
would otherwise exist in the absence of the rulemaking. Further, the following 
exception to the application of Chapter 2007 of the Texas Government Code, set 
forth at Texas Government Code Annotated sec.2007.003(b), applies to these 
rules: the rulemaking is an action reasonably taken to fulfill an obligation 
mandated by federal law. 
COASTAL MANAGEMENT PROGRAM 
The commission has reviewed this rulemaking for consistency with the Coastal 
Management Program (CMP) goals and policies in accordance with the regulations 
of the Coastal Coordination Council, and has determined that the rulemaking is 
consistent with the applicable CMP goals and policies. 
HEARINGS AND COMMENTERS 
A public hearing was held on the rule in Austin, Texas on October 7, 1997. The 
public comment period closed on October 20, 1997. No oral or written testimony 
was submitted at the hearing or before the close of the comment period. 
In order to make all the provisions in the section consistent, the commission 
has made an additional minor modification to the rule. The rule stated that a 
permittee shall comply with an existing permit "until a new, amended or modified 
permit is issued." That clause has been deleted and replaced with "until the 
commission acts on the application" to clarify that the existing permit remains 
in full force and effect until the commission takes action on the application. 
In addition, a change has been made to the Takings Impact Assessment to include 
a explanation of an exemption of takings law that applies to this rule. This 
change does not affect the conclusion of the assessment that no takings has 
occurred; instead it more fully explains the reasons for the commission's 
actions. 
STATUTORY AUTHORITY 
The amendments are proposed under the Texas Water Code, sec.5.103 and sec.5.105, 
which provide the commission with the authority to adopt any rules necessary to 
carry out its powers and duties under the Texas Water Code and other state law. 

sec.50.15. Scope of Proceedings. 
The commission may limit consideration in permit amendment or modification 
proceedings to only those portions of a permit for which the application 
requests action. The commission may limit consideration in the review of 
preconstruction permit renewals consistent with the requirements set forth in 
Texas Health and Safety Code, sec.382.055. All terms, conditions, and provisions 
of an existing permit remain in full force and effect during such proceedings, 
and the permittee shall comply with an existing permit until the commission acts 
on the application.
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 10, 1997.
TRD-9715042
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 19, 1997
For further information, please call: (512) 239-4640

CHAPTER 55.Request for Contested Case Hearings, Public Comment 
SUBCHAPTER B.Hearings Requests, Public Comment
30 TAC sec.55.25
The commission adopts an amendment to sec.55.25, concerning Public Comment 
Processing. The purpose of this action is to establish a system for the 
commission's consideration of and response to public comments on applications 
and draft permits for federally authorized underground injection control (UIC), 
Texas Pollutant Discharge Elimination System (TPDES), and Resource Conservation 
and Recovery Act (RCRA) permit programs. Section 55.25 is adopted with changes 
to the proposed text as published in the August 8, 1997, issue of the Texas 
Register (22 TexReg 7336). 
EXPLANATION OF THE ADOPTED RULE. The commission adopts this rule as part of its 
efforts to encourage public participation in the commission's proceedings (see 
also the commission's adoption of rules changes in 30 TAC Chapters 80 and 305 in 
this edition of the Texas Register). This is consistent with state policy as 
stated in Texas Water Code, sec.5.112, which calls for the commission to develop 
policies to provide the public with opportunities to appear and speak on issues 
under its jurisdiction. The adoption is also intended to address public 
participation issues connected with federal permitting programs. Currently the 
state's RCRA permitting program is under review by the United States 
Environmental Protection Agency (EPA), and private petitioners have filed a 
petition with the EPA seeking revocation of the commission's authorization to 
administer the UIC program. Also, the commission has submitted to EPA an 
application for authorization to implement the National Pollutant Discharge 
Elimination System (NPDES) Program. 
The commission believes that Texas Water Code, Chapter 26, which contains 
numerous sections that are intended to satisfy authorization requirements, 
evidences a legislative directive that the commission's application for NPDES 
authorization is consistent with state policy to seek authorization. The 
commission and its predecessor agencies have pursued NPDES authorization for 
several years. Public participation has been an issue in NPDES negotiations and 
has become an issue in the RCRA and UIC programs because it has proven difficult 
to harmonize the federal requirements with Texas state law and commission rules. 
However, in an effort to overcome these difficulties, the commission has worked 
with EPA and ultimately reached an agreement that the rule adopted here will 
satisfy authorization requirements. The commission and the EPA have exchanged 
letters on these issues, and the EPA letter shows its interpretation that the 
commission must meet the authorization requirements described as follows and 
that the adopted rule here meets those requirements. The discussion in the 
responses to public comment gives further explanation of the bases for the 
adopted rule. 
The amendment adds a new subsection (b) to sec.55.25, which provides for 
consideration of and written response to public comments by the decision maker 
on permitting actions in the UIC and RCRA programs, and in the TPDES program 
upon authorization. The amendment provides procedures for the content and timing 
of commission responses. It also authorizes the executive director to call and 
conduct public meetings on his own initiative or in response to public comment, 
and provides requirements governing those meetings. The section was modified 
from the proposal to require an applicant to attend any public meeting held by 
the executive director. The proposal was also modified to provide that when 
there is a contested case hearing, if the executive director specifies a 
different time and place for the public meeting, then public comment will not be 
taken at the preliminary hearing. These changes were made in response to public 
comments. 
TAKINGS IMPACT ASSESSMENT. The commission has prepared a Takings Impact 
Assessment for this rule under Texas Government Code, sec.2007.043. The 
following is a summary of that assessment. The specific purpose of this rule is 
to establish a system for the commission's consideration of and response to 
public comments on applications and draft permits for certain federally 
authorized permit programs. The rule will substantially advance these specific 
purposes by providing specific provisions on these matters. Promulgation and 
enforcement of this rule will not burden private real property which is the 
subject of the rule because it concerns commission procedural rules. A "taking" 
is defined under the Private Real Property Rights Preservation Act as a 
governmental action that affects an owner's private real property that is the 
subject of the governmental action, in whole or in part or temporarily or 
permanently, in a manner that restricts or limits the owner's right to the 
property that would otherwise exist in the absence of the governmental action. 
This rule does not require or provide for any restriction of an owner's use of 
real property; it concerns only procedures for public comment and agency 
response to comment. Also, this rule is under two exceptions to the Private Real 
Property Rights Preservation Act: first, the action fulfills an obligation 
mandated by federal law, and second, the rule advances the health and safety 
purpose, and imposes no greater burden than is necessary to achieve the health 
and safety purpose. 
COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW. The executive director has 
reviewed the rulemaking and found that the rule is neither identified in Coastal 
Coordination Act Implementation Rules, 31 TAC sec.505.11, relating to Actions 
and Rules Subject to the Coastal Management Program (CMP), nor will affect any 
action/authorization identified in Coastal Coordination Act Implementation 
Rules, 31 TAC sec.505.11. Therefore, the rule is not subject to the CMP. 
HEARING AND COMMENTERS. A public hearing on the proposed rule was held in Austin 
on September 8, 1997. The comment period closed September 8, 1997. Written 
comments were received from Brown McCarroll and Oaks Hartline (Brown McCarroll), 
Eastman Chemical Company (Texas Eastman), Exxon Company USA (Exxon), Texas 
Association of Business and Chambers of Commerce (TABCC), Texas Chemical Council 
(TCC), Texas Instruments (TI), Texas Mid-Continent Oil and Gas Association 
(TMOGA), Thompson and Knight, the commission's Office of Public Interest Counsel 
(OPIC), and an individual. In addition to its own comments, TMOGA endorsed those 
of TABCC and TCC. The following jointly submitted comments: Blackburn and 
Carter; Clean Water Action; Consumers Union; East Texas Communities Network; 
Environmental Defense Fund; Henry, Lowerre, Johnson, Hess & Frederick; League of 
Women Voters of Texas; Public Citizen; Sierra Club; Save Our Springs Alliance; 
Texas Center for Policy Studies; and the American Lung Association of Texas 
(Henry, Lowerre). An individual submitted oral comment at the public hearing. 
The following description of public comment and the commission's responses 
frequently refer to "certain applications" or "certain enforcement actions." 
This is a reference to applications or enforcement proceedings concerning UIC, 
TPDES, or RCRA facilities. References to "federally authorized programs" apply 
to the federal permitting program for each of these types of facilities, when 
and for so long as the commission is authorized to administer them by EPA. 
Henry, Lowerre commented that the proposed rules do not contain public 
participation provisions that are required by Senate Bill (SB) 1591, 75th Texas 
Legislature, concerning regulatory flexibility. 
The commission has made no changes in response to this comment. SB 1591 
procedures are not the subject of these rules, which is adopted to bring the 
commission's procedures for receiving, considering, and responding to public 
comment, and for allowing limited intervention in enforcement proceedings, into 
compliance with federal procedural requirements for the three authorized 
programs. SB 1591 provides for the adoption of rules specifying the procedure by 
which an applicant may be exempt from a requirement of a statute or commission 
rule if the applicant proposes to control or abate pollution by an alternative 
method, and includes a requirement for public notice and public participation in 
a proceeding involving an application for an exemption. The rules adopted today 
do not address that exemption procedure. 
Henry, Lowerre requested that the commission reconsider its proposal to adopt 
rules on notice and comment procedures in addition to the existing rules on 
contested case hearings. Rather, the commenter asked that the commission adopt 
rules on standing for contested case hearings that are similar to federal law on 
standing to appeal the decisions of the EPA. TMOGA and TABCC suggested the rules 
should be revised to make a notice and comment process replace the current 
contested case hearing process. 
This rulemaking is intended to bring the authorized programs into compliance 
with federal requirements for public participation in the permitting process, 
and to harmonize those requirements with the contested case hearing process. The 
addition of subsection (b) to sec.55.25 provides for consideration of and 
written response to public comments by the decision maker on permitting actions. 
The federal rules require that comments be considered in making the final 
decision and answered in a similar manner provided by the adopted rules (see 
Title 40 Code of Federal Regulations (CFR) sec.124.11 and sec.124.17). The 
public participation procedures established by this rule will satisfy the 
requirement for the federally authorized programs. Contested case hearings will 
continue to be an additional avenue for public participation, as provided for in 
state law. The types of changes suggested by the commenters are more properly 
within the purview of the Legislature, which has, in fact, considered them in 
the past. 
Texas Eastman requested that the commission clarify the extent to which it 
intends to rely on significant comments submitted during the public comment 
period when evaluating a request for a contested case hearing. Specifically, 
Texas Eastman requested clarification on whether the commission intends to be 
able to rely on comments and submissions from the public comment period in 
determining whether a person requesting a contested case hearing is an affected 
person, whether a request for contested case hearing is reasonable, and whether 
the commission should limit the scope of the issues referred to the State Office 
of Administrative Hearings (SOAH) for a contested case hearing. 
The commission responds that hearing requests will continue to be considered 
under the rules set out in 30 TAC sec.sec.55.23 and 55.27-55.31. The commission 
will not consider public comment when the commission evaluates whether a hearing 
request meets the requirements of sec.55.27(b). However, the commission will 
consider public comment when evaluating whether under sec.55.27(c) the 
commission should refer an application to SOAH for hearing because it is in the 
public interest. The commission notes that under 30 TAC sec.80.5, the commission 
sets the scope of a hearing referred to SOAH. The commission will consider 
public comment when determining the scope of a hearing referred to SOAH. 
TCC and Brown McCarroll requested that the commission revise the takings impact 
assessment that was prepared under Texas Government Code, sec.2007.043. The 
commenters did not believe the proposed rule is required by federal law, as is 
stated in the commission's takings impact assessment. Brown McCarroll also 
commented that the proposed changes to Chapter 80 (concerning other rules 
changes published in this edition of the Texas Register ) on permissive 
intervention in administrative enforcement cases are not required by federal 
law. They argue that a state seeking authorization may satisfy the requirements 
of 40 CFR sec.123.27(d) and sec.145.13(d) by allowing permissive intervention in 
state court enforcement actions, that this is the case in Texas, and so there is 
no need to also allow for permissive intervention in administrative actions. 
The commission believes that the rule falls under an exception to the Private 
Real Property Rights Preservation Act (the Act) because federal law mandates its 
adoption to accommodate requirements in the authorized programs. EPA interprets 
the Clean Water Act, the Safe Drinking Water Act, the Resource Conservation and 
Recovery Act, and Title 40 CFR sec.123.25(a) for NPDES, sec.145.11(a) for UIC, 
and sec.271.14(a) for RCRA to require authorized programs to provide for notice, 
opportunity for comment, consideration of comment, and appeal by the commenter 
as set out in 40 CFR sec.sec.124.10, 124.11, 124.17, and 123.30. The commission 
and the EPA have exchanged letters on these issues, and the EPA letter evidences 
both EPA's conviction that the commission must meet the authorization 
requirements described here and its agreement that the adopted rules meet those 
requirements. Concerning intervention in administrative enforcement actions, the 
commission responds to the commenters in its adoption of changes to 30 TAC 
Chapter 80 published in this edition of the Texas Register.
Texas Eastman suggested that the proposed rules on processing public comment 
should apply to all applications before the commission, not just to certain 
applications. Texas Eastman acknowledged that its proposal was outside the scope 
of this rulemaking project. TCC, TI, TMOGA, and TABCC commented that the 
addition of the public meeting to the hearing process will prolong the entire 
permitting process. Henry, Lowerre commented that the proposed rules do not 
contain a provision on public petitions for amendments to permits, which is 
required by federal law for a state that manages certain federal permitting 
programs. 
The commission agrees with Texas Eastman that its suggestion to apply this new 
process to all permitting actions is beyond the scope of this project. The 
commission also recognizes that there may be infrequent instances in which the 
application process may be made longer because of a public meeting. However, the 
commission has fashioned the rules to minimize both the number of those 
instances and the additional time required in those instance which do occur. The 
procedures are designed to run concurrently, not sequentially, and the staff 
will endeavor to prevent any unnecessary lengthening of the process. Procedures 
for requesting amendments to existing permits are outside the scope of this 
project. The procedures for affected persons to request an amendment of a permit 
are in 30 TAC sec.305.62. 
Henry, Lowerre commented that the commission issues temporary and emergency 
orders for activities that would otherwise violate law, and therefore the 
commission is not in compliance with federal requirements for states that manage 
certain federal permitting programs. 
This comment is beyond the scope of this rulemaking. Chapter 55 specifically 
does not apply to emergency or temporary orders. For the commenter's 
information, however, the commission on November 5, 1997, adopted rules that 
amend Chapter 305, Subchapter B, Emergency Orders and Temporary Orders and 
Executive Director Authorizations. 
Henry, Lowerre commented that 30 TAC sec.50.41 concerning the eligibility of the 
executive director does not comply with federal conflict of interest limits on 
all staff directors who would issue NPDES permits. 
This comment is beyond the scope of this rulemaking. However, the commission 
notes that sec.50.41 conforms to 40 CFR sec.123.25(c) with regard to the 
executive director, and points out that currently only the commission and the 
executive director are authorized to approve wastewater discharge permits. In 
the event other individuals are delegated such authority over NPDES permits, 
that delegation will conform to federal requirements, as well. Thompson and 
Knight commented that the title of Chapter 55 should be changed to "Public 
Comments and Requests for Contested Case Hearings," and that the title of 
Chapter 55, Subchapter B, should also be changed to reflect that the subchapter 
covers the processing of public comment. 
The commission has made no changes in response to this comment. The title to 
Chapter 55 is "Request for Contested Case Hearings; Public Comment" and the 
title of Chapter 55, Subchapter B, is "Hearing Requests, Public Comment." The 
commenter may be referring to a typographical error in the title of Chapter 55 
in the commission's publication RG-145 (the commission's procedural rules). The 
commission will address that error upon publishing the next edition of the 
publication. 
Henry, Lowerre commented that the proposed rules do not provide adequate 
opportunities for comments by "interested persons" because sec.55.21(d) limits 
the time to file comments to the minimum required by EPA's rules and do not 
provide for any extension of the time limits for any good cause. The commenter 
also objected to the fact that there are no provisions in the commission's 
existing or proposed rules for advising the public or federal agencies of 
significant changes in the permit that may have resulted from public comment. 
The commission has not proposed changes to sec.55.21, and disagrees that the 
proposed rules do not provide adequate opportunities for comments by an 
interested person. Thirty days is the time provided in the federal regulations. 
The rule as adopted provides for a minimum of 30 days, with an extension of the 
comment period to the end of the public meeting, if one is called. The 
commission notes that the commenters' concerns relating to notice are outside 
the scope of this rulemaking. The commission's rules on public notice (including 
notice to federal agencies) are in 30 TAC Chapter 39, and they comply with state 
and federal requirements. 
OPIC commented that sec.55.25(b)(1)(A) and (B) should be clarified as to how the 
agency's response to public comment will be made available to the public. OPIC 
further requested a requirement that the executive director serve its response 
to public comment on OPIC and any other party when the application has been 
referred for contested case hearing. Henry, Lowerre noted that 
sec.55.25(b)(1)(B) should conform with sec.50.33(b), which requires that 
response to public comment be mailed to those persons who timely filed public 
comments with a notice that they may file a motion for reconsideration under 
sec.50.39. 
The commission has made no changes in response to the comments by OPIC. While 
the commission may issue instructions to the agency on how to make public 
comment available to the public, the commission concludes that such instructions 
should not be part of the rules because the rules are intended to specify 
procedural rights. The commission encourages OPIC to work with the executive 
director and the chief clerk to make sure that OPIC is provided with the 
information OPIC desires. The commission notes that if an application is 
referred for a contested case hearing, then the usual filing and service of 
document requirements would apply under 30 TAC Chapter 1, and so the executive 
director would be required to serve a copy of his responses to public comment on 
the parties, including OPIC. 
Additionally, the commission has made no changes in response to the suggestion 
by Henry, Lowerre because the existing rule at sec.50.33(b) clearly states that 
the processing requirements apply to all approvals by the executive director. 
Thus, there is no need to state this procedural requirement again in 
sec.55.25(b)(1)(B). 
An individual commented that sec.55.25(b) should be clarified concerning 
instances when the commission makes a decision on certain applications after 
taking public comment but without holding a contested case hearing. According to 
the commenter, the rule should specify that such public comment shall not form 
the factual or legal basis of the commission decision. The commenter's intent is 
to make sure the rule is consistent with the fact that only those persons with a 
personal interest in the application have rights to participate in agency or 
court proceedings on the application. 
The commission understands this as a question concerning how public comment will 
be considered under Texas law. If the commission makes a final permit decision 
within the contested case hearing process, it will consider all the information 
that it is required or permitted to consider under Chapter 80, as amended by 
these rules, and the APA. For additional explanation, the commission refers the 
reader to the commission's adoption of changes to Chapter 80 that are published 
in this edition of the Texas Register. The commission's responses to public 
comment explain how the commission will use public comment in a contested case 
hearing. When the commission makes the permit decision outside of the contested 
case hearing process, it will consider all public comments, the executive 
director's response to public comments, as well as any information submitted by 
OPIC or the applicant, as set out in sec.55.25(b). In addition, the commission 
will either adopt the executive director's, or issue its own, response to each 
of the public comments. The commission disagrees with any suggestion that public 
comment will be ignored. 
Texas Eastman, OPIC, and an individual commented that sec.55.25(b)(1) should 
clarify what is the "significant" public comment to which the executive director 
must respond. Texas Eastman suggested that public comment that addresses matters 
outside the requirements for issuance of the permit is not "significant." Texas 
Eastman also requested clarification on whether or not this paragraph requires 
response to oral comments and suggested that the executive director respond only 
to written comments or to oral comments provided and transcribed at a public 
meeting called under sec.55.25(b)(2). One individual also commented on what the 
commission means by the word "consider" in sec.55.25(b)(1) and that there is no 
apparent connection between the consideration undertaken by the commission and 
the decision rendered and any appeal process.
The commission declines to attempt to set a strict definition of what is 
"significant," based on the difficulty of predicting either the issues or the 
comments that may arise. The commission notes that the federal regulations also 
do not define "significant." The rule envisions that the commission  will 
respond to all relevant comments received within the comment period. This 
includes timely written comments and oral comments received in public meetings 
called either by the commissioners or by the executive director, where the oral 
comments will be transcribed. The commission describes how it will "consider" 
public comment in its responses to comments on sec.80.127(f) and sec.80.251, 
which follow in this issue of the Texas Register . 
TABCC and TCC requested that sec.55.25(b)(2) be revised to clarify that there 
will not be a separate notice and comment hearing if a contested case hearing 
has been granted on an application. 
When a contested case hearing is held on the application, the public meeting may 
be held as part of the preliminary hearing conducted under sec.80.105. The rule 
also provides that the public meeting (the "notice and comment hearing") may be 
held at a different time and place if the executive director so specifies. The 
commission believes that in some cases it may be beneficial to have the meeting 
at a separate time and declines to foreclose that option. However, the 
commission has modified the proposal to provide that if the executive director 
specifies a different time and place, then public comment will not be taken at 
the preliminary hearing. This change clarifies that in the event of a contested 
case hearing, there will only be one public meeting. The intent is certainly to 
have the processes run concurrently, and not sequentially, whenever possible and 
to prevent any duplication of effort when it can be avoided. 
TCC requested that sec.55.25(b)(2) be revised to clarify that a public meeting 
held under the subsection is intended for taking public comment but is not 
intended to meet other public meeting requirements in state or federal law. 
The commission does not adopt the proposed change because the commission intends 
that there may well be instances when one public meeting is held to satisfy the 
requirements of both sec.55.25(b)(2) and other requirements for holding a public 
meeting. For example, the executive director could convene one public meeting 
concerning a proposed Class 3 modification of an industrial or hazardous waste 
permit. This may satisfy both sec.55.25(b)(2) and the requirement to hold a 
public meeting on an application for a Class 3 modification (see 30 TAC 
sec.39.109(b)). 
Both TCC and Brown McCarroll objected to proposed sec.55.25(b)(3). They 
requested that at least the paragraph be revised to further limit who may file a 
motion for rehearing. The proposed rule allows a person to file a motion for 
rehearing whether they have participated in the case up to the point of the 
final permit or not. The commenters requested that this be limited to require 
that the person wishing to participate later be "affected," and only be allowed 
to participate to the extent that any changes from the draft permit cause the 
final permit to be less stringent. Texas Eastman proposed that the paragraph be 
limited so that a person who has not participated in the case up to that point 
may protest the approved permit only if: the approved permit is different than 
the draft permit; and the person has shown good cause for failure to provide 
timely comment. Thompson & Knight commented on sec.55.25(b)(3) and suggested 
this paragraph be reworded to clarify its meaning. 
The commission has made no changes in response to these comments. This paragraph 
concerns the final permit decision and is intended to define the limits of what 
may be the subject of a motion for rehearing (or a motion for reconsideration 
concerning a permit issued by the executive director), and thus satisfy the 
prerequisite for appealing a permitting decision to court. The commission 
intends to limit the subject matter of such motions both: to comments on draft 
permits made timely under the rules; and to permit provisions that first appear 
after the deadline for comments on the draft permit or upon issuance of the 
final permit. This will give both the applicant and the commission fair notice 
of the issues the person raises. 
The commenters expressed concern that an applicant and the commission could be 
unfairly surprised by an issue raised only after the final permit subject to a 
motion for rehearing has been issued. The commission responds that commission 
rules require a motion for rehearing so the commission (and the applicant) will 
have the opportunity to address all issues before any court appeal. The adopted 
rule will also prevent the public from being unfairly surprised in those 
situations where after it is notified of a proposed permit action, that permit 
action is later revised without opportunity for the public to comment on the 
revision. 
The commission declines to add a requirement that a person filing a motion for 
rehearing must be "affected" because this contradicts public comment procedure 
where any person may submit public comment. Concerning the commenters' 
suggestion that a late commenter's motion for rehearing be limited to revisions 
to the draft permit that cause the final permit to be less stringent, the 
commission acknowledges that the commenters raise a valid point. It could be 
unfair if a person first participated in the permit proceeding only after the 
issuance of the final permit decision subject to a motion for rehearing, and the 
person objected only to final permit provisions that are more stringent than the 
draft permit. But the commission considers it unlikely that the public will 
protest final permit provisions that are more stringent, and so the commission 
does not make any changes to the rule concerning this issue. As previously 
stated, the commission and the EPA have exchanged letters on these issues, and 
the EPA letter evidences its interpretation that the commission must meet the 
authorization requirements described here and that the adopted rule meets those 
requirements. The commission declines to make any changes for this reason too. 
The commission declines to add a "good cause" requirement for similar reasons. 
Finally, the commission does not adopt the last commenter's suggestions because 
it believes that the rule is sufficiently clear. 
Exxon commented that while subsection (c) on processing public comment in non-
delegated programs requires that an applicant attend any public meeting, 
subsection (b) on delegated programs does not include this requirement. Exxon 
commented that these provisions should be made consistent. 
The commission agrees with the commenter that sec.55.25(b)(2) should include a 
requirement that the applicant attend a public meeting held in response to 
public comment and has changed the rule to reflect the requirement.
Thompson & Knight commented on sec.55.25(c)(2), suggesting that the last 
sentence clarify that the designated office's duty to make its response 
available to the public applies to "any written" response. 
The commission has made no change in response to this comment because it 
believes the rule is sufficiently clear. 
Henry, Lowerre commented that the proposed rules and Texas statutes do not 
provide the necessary safeguards for judicial review for a person affected by a 
commission decision and who filed public comment at the agency level.
The commission understands that the commenter intends the "necessary safeguards" 
to be a reference to authorization requirements. The commission disagrees with 
the commenter because Texas statutes and the commission's rules do provide for 
judicial review of permitting decisions. A person who files public comment and 
follows commission procedure may seek judicial review of a commission decision. 
Texas Water Code, sec.5.351 provides that a person affected by a ruling, order, 
decision, or other act of the commission may file a petition to review, set 
aside, modify, or suspend the act of the commission. Section 55.25(b) and the 
sections cited in sec.55.25(b)(3) establish the procedural prerequisites a 
commenter must follow to preserve and exercise the right to seek judicial review 
under Water Code, sec.5.351. In addition to providing for the receipt, 
consideration of and response to public comment, Title 40 of CFR sec.123.30 
requires authorized states to provide an opportunity for commenters to invoke 
judicial review of the final approval or denial of permits. 
STATUTORY AUTHORITY. The amendment is adopted under Texas Water Code, 
sec.sec.5.103, 5.105, 13.041, 26.011, 27.019, 32.009, 33.007, and 34.006 and 
Texas Health and Safety Code, sec.sec.341.002, 341.031, 361.011, 361.017, 
361.024, 366.012, 382.017, 401.011, 401.051, and 401.412, which authorize the 
commission to adopt any rules necessary to carry out its powers and duties under 
the Water Code and other laws of Texas and to establish and approve all general 
policy of the commission. 

sec.55.25. Public Comment Processing.
(a) (No change.)
(b) This subsection applies to applications concerning hazardous waste 
facilities, underground injection wells, or Texas Pollutant Discharge 
Elimination System (TPDES) permits. It applies to an application only when the 
commission has federal authorization to manage the permitting program under 
which the application is evaluated. 
(1) Before an application is approved, the executive director shall prepare a 
response to all significant public comment on the draft permit raised during the 
public comment period. The response shall specify the provisions of the draft 
permit that have been changed in response to public comment and the reasons for 
the changes. The executive director shall make the response available to the 
public. 
(A) If the application is acted on by the commission under sec.50.13 of this 
title (relating to Action on Application) or sec.55.27(a)(1) of this title 
(relating to Commission Action on Hearing Request), the executive director's 
response to public comment shall be made available to the public and filed with 
the chief clerk at least ten days before the commission acts on the application. 
The commission shall consider all public comment in making its decision and 
shall either adopt the executive director's response to public comment or 
prepare its own response. 
(B) If the application is approved by the executive director under Chapter 50, 
Subchapter C of this title (relating to Action by the Executive Director), the 
response to public comment should be made no later than the time of the 
executive director's action on the application. 
(2) The executive director may call and conduct public meetings in response to 
public comment. A public meeting is intended for the taking of public comment, 
and is not a contested case proceeding under the APA. The executive director 
shall hold a public meeting when there is a significant degree of public 
interest in a draft permit, or when required by law. If a contested case hearing 
is held on the application, the public meeting shall be conducted as part of the 
preliminary hearing under sec.80.105 of this title (relating to Preliminary 
Hearings), unless the executive director specifies a different time and place 
for the public meeting. If the executive director specifies a different time and 
place for the public meeting, then public comment shall not be taken at the 
preliminary hearing. This paragraph supersedes and controls any conflict between 
this paragraph and sec.80.105 of this title (relating to Preliminary Hearings). 
The public comment period shall automatically be extended to the close of any 
public meeting. Public notice of the meeting shall be given as required by 
commission rule. The applicant shall attend any public meeting held by the 
executive director. A tape recording or written transcript of the public meeting 
shall be made available to the public. 
(3) Any person who failed to file timely public comment, failed to file a timely 
hearing request, failed to participate in the public meeting held under this 
subsection, and failed to participate in the public hearing held under Chapter 
80 of this title (relating to Contested Case Hearings) may file a motion for 
rehearing under sec.50.19 of this title (relating to Notice of Commission 
Action, Motion for Rehearing) or sec.55.27 of this title (relating to Commission 
Action on Hearing Request) or sec.80.271 of this title (relating to Motion for 
Rehearing) or may file a motion for reconsideration under sec.50.39 of this 
title (relating to Motion for Reconsideration) only to the extent of the changes 
from the draft permit to the final permit decision. 
(c) This subsection applies to applications other than those under subsection 
(b) of this section. The commission may designate an agency office to process 
public comment under this subsection. 
(1) The designated office may evaluate and respond to public comment, other than 
timely hearing requests, when appropriate. 
(A) If the application and timely hearing requests are considered by the 
commission, the designated office should prepare any response to public comment 
no later than ten days before the commission meeting at which the commission 
will evaluate the hearing requests. The response shall be made available to the 
public and filed with the chief clerk 
(B) If the application is approved by the executive director under Chapter 50, 
Subchapter C of this title, any response to public comment should be made no 
later than the time of the executive director's action on the application. 
(2) The designated office shall hold a public meeting when there is a 
significant degree of public interest or when otherwise appropriate to assure 
adequate public participation. A public meeting is intended for the taking of 
public comment, and is not a contested case proceeding under the APA. The 
applicant shall attend any such public meeting held by the designated office. 
When the designated office holds a public meeting it shall respond to public 
comment either by giving an immediate oral response or by preparing a written 
response. The response shall be made available to the public. 
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 5, 1997.
TRD-9714833
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: August 8, 1997
For further information, please call: (512) 239-1966

CHAPTER 80.Contested Case Hearings
The commission adopts amendments to sec.sec.80.105, 80.109, 80.115, 80.127, 
80.251, 80.271, and 80.273, as well as new sec.80.254 and sec.80.274, concerning 
public participation and motions for rehearing. The purpose of this action is to 
establish a system for the commission's consideration of and response to public 
comments on applications and draft permits for federally authorized underground 
injection control (UIC), Texas Pollutant Discharge Elimination System (TPDES), 
and Resource Conservation and Recovery Act (RCRA) permit programs and to respond 
to recent legislative action. Section 80.127 is adopted with changes as 
published in the August 8, 1997, issue of the Texas Register (22 TexReg 7336). 
Sections 80.105, 80.109, 80.115, 80.251, 80.254, 80.271, 80.273, and 80.274 are 
adopted without changes and will not be republished. 
EXPLANATION OF THE ADOPTED RULES. The commission adopts these rules to encourage 
public participation in the commission's proceedings. (see also the commission's 
adoption of rule changes in 30 TAC Chapters 55 and 305 in this edition of the 
Texas Register). This is consistent with state policy as shown in Texas Water 
Code, sec.5.112, which calls for the commission to develop public testimony 
policy. The rules are also intended to address public participation issues 
connected with federal permitting programs. Currently, the commission's 
authorization to administer the federal programs for the UIC and RCRA permitting 
programs is under review by the United States Environmental Protection Agency 
(EPA). Private petitioners have filed a petition with the EPA seeking to 
decertify the commission's UIC program. Also, the commission has submitted to 
EPA an application for authorization to implement the National Pollutant 
Discharge Elimination System (NPDES) Program. The commission believes that Texas 
Water Code, Chapter 26, which contains numerous sections that are intended to 
satisfy authorization requirements, shows that the commission's application for 
NPDES authorization is consistent with state policy to obtain authorization. The 
commission and its predecessor agencies have pursued NPDES authorization for 
several years. Public participation has been an issue in NPDES negotiations and 
has become an issue in the RCRA and UIC programs because it has proven difficult 
to harmonize the federal requirements with Texas state law and commission rules. 
However, in an effort to overcome these difficulties, the commission has worked 
with EPA and ultimately reached an agreement that the rules adopted here will 
satisfy authorization requirements. The commission and the EPA have exchanged 
letters on these issues, and the EPA letter shows its interpretation that the 
commission must meet the authorization requirements described as follows and 
that the adopted rules here meet those requirements. The discussion in the 
responses to public comment gives further explanation of the bases for the 
adopted rules. 
The amendment to sec.80.105, concerning Preliminary Hearings, provides that a 
preliminary hearing is required for an enforcement matter under federally 
authorized UIC or TPDES permit programs. This will provide an opportunity for 
persons seeking to intervene to seek party status with limited rights to 
participate as a party in an enforcement proceeding in these federally 
authorized programs. 
The amendment to sec.80.109, concerning Designation of Parties, provides that 
the parties to a contested enforcement case may include any other party granted 
permissive intervention by the State Office of Administrative Hearings (SOAH) 
administrative law judge in an enforcement proceeding concerning a UIC or TPDES 
permit under specified conditions. 
The amendment to sec.80.115, concerning Rights of Parties, provides that only 
the executive director may seek to amend or add to the violations alleged in the 
initiating petition in an enforcement proceeding. 
The amendment to sec.80.127, concerning Evidence, requires all public comment 
received during the public comment period on a proposed RCRA, UIC, or TPDES 
permit or amendment to be admitted into the evidentiary record. It also requires 
the executive director's responses to public comments to be admitted into the 
evidentiary record. The section also requires parties to be allowed to respond 
and to present evidence on each issue raised in public comment or the executive 
director's responses. The section was modified from the proposal to clarify that 
the subsection supersedes and controls any conflict between it and 30 TAC 
sec.80.111 (relating to Persons not Parties) concerning the admission of public 
comment into the evidentiary record. 
The amendment to sec.80.251, concerning Judge's Proposal for Decision, provides 
that if a proposal for decision in a permitting case for a federally authorized 
RCRA, TPDES, or UIC program is adverse to a party, the decision must include 
proposed changes to the draft permit recommended by the judge in response to 
public comment. 
New sec.80.254, concerning Settlement of Enforcement Cases, provides for an 
agreed settlement between the executive director and the respondent of an 
enforcement case. The section requires the executive director and the respondent 
to submit the settlement to the judge, and it requires the judge to submit the 
proposed agreement to the commission for consideration. The new section also 
requires the judge to provide time to a dissenting party to file comments, and 
provides for the commission's consideration of those comments. The section 
allows the commission, after notice and opportunity for comment, either to 
approve or to disapprove the agreement, or to remand it to SOAH for a hearing. 
This will provide for notice and comment on proposed settlements and for 
settlements by fewer than all the parties to an enforcement proceeding, with 
commission approval. 
The amendments to sec.80.271, concerning Motion for Rehearing, and sec.80.273, 
concerning Decision Final and Appealable, make conforming changes to provide for 
new sec.80.274. 
New sec.80.274, concerning Motion for Rehearing Not Required in Certain Cases, 
provides that if all parties to a contested case agree, the date for filing a 
motion for rehearing can be shortened, not to exceed 20 days beyond the order 
date. This change is in response to Senate Bill 637, 75th Legislature, 1997. 
TAKINGS IMPACT ASSESSMENT. The commission has prepared a Takings Impact 
Assessment for these rules under Texas Government Code, sec.2007.043. The 
following is a summary of that assessment. The specific purpose of the rules is 
to establish a system for the commission's consideration of and response to 
public comments on applications and draft permits for certain federally 
authorized permit programs. The rules will substantially advance these specific 
purposes by providing specific provisions on these matters. Promulgation and 
enforcement of these rules will not burden private real property which is the 
subject of the rule because it concerns commission procedural rules. A "taking" 
is defined under the Private Real Property Rights Preservation Act as a 
governmental action that affects an owner's private real property that is the 
subject of the governmental action, in whole or in part or temporarily or 
permanently, in a manner that restricts or limits the owner's right to the 
property that would otherwise exist in the absence of the governmental action. 
These rules do not require or provide for any restriction of an owner's use of 
real property; they concern only procedures for public comment and agency 
response to comment. Also, the rules are under two exceptions to the Private 
Real Property Rights Preservation Act: first, the rules fulfill an obligation 
mandated by federal law, and second, the rules advance health and safety, and 
impose no greater burden than is necessary to achieve the health and safety 
purpose. 
COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW. The executive director has 
reviewed the rulemaking and found that the rules are neither identified in 
Coastal Coordination Act Implementation Rules, 31 TAC sec.505.11, relating to 
Actions and Rules Subject to the Coastal Management Program (CMP), nor will 
affect any action/authorization identified in Coastal Coordination Act 
Implementation Rules, 31 TAC sec.505.11. Therefore, the rules are not subject to 
the CMP. 
HEARING AND COMMENTERS. A public hearing on the proposed rules was held in 
Austin on September 8, 1997. The comment period closed September 8, 1997. 
Written comments were received from Brown McCarroll and Oaks Hartline (Brown 
McCarroll), Eastman Chemical Company (Texas Eastman), Exxon Company USA (Exxon), 
Texas Chemical Council (TCC), and the commission's Office of Public Interest 
Counsel (OPIC). The following jointly submitted comments: Blackburn and Carter; 
Clean Water Action; Consumers Union; East Texas Communities Network; 
Environmental Defense Fund; Henry, Lowerre, Johnson, Hess & Frederick; League of 
Women Voters of Texas; Public Citizen; Sierra Club; Save Our Springs Alliance; 
Texas Center for Policy Studies; and the American Lung Association of Texas 
(Henry, Lowerre). An individual submitted oral comment at the public hearing.
The following description of public comment and the commission's responses 
frequently refer to "certain applications" or "certain enforcement actions." 
This is a reference to applications or enforcement proceedings concerning UIC, 
TPDES, or RCRA facilities. References to "federally authorized programs" apply 
to the federal permitting program for each of these types of facilities, when 
and for so long as the commission is authorized to administer them by EPA. 
TCC and Brown McCarroll requested that the commission revise the takings impact 
assessment that was prepared under Texas Government Code, sec.2007.043. The 
commenters did not believe the proposed rules are required by federal law, as is 
stated in the commission's takings impact assessment. Brown McCarroll also 
commented that the proposed changes on permissive intervention in administrative 
enforcement cases are not required by federal law. They argue that a state 
seeking authorization may satisfy the requirements of 40 CFR sec.123.27(d) and 
sec.145.13(d) by allowing permissive intervention in state court enforcement 
actions, that this is the case in Texas, and so there is no need to also allow 
for permissive intervention in administrative actions. 
The commission believes that these rules fall under an exception to the Private 
Real Property Rights Preservation Act (the Act) because federal law mandates 
their adoption to accommodate requirements in the authorized programs. EPA 
interprets the Clean Water Act, the Safe Drinking Water Act, the Resource 
Conservation and Recovery Act, and Title 40 CFR sec.123.25(a) for NPDES, 
sec.145.11(a) for UIC, and sec.271.14(a) for RCRA to require authorized programs 
to provide for notice, opportunity for comment, consideration of comment, and 
appeal by the commenter as set out in 40 CFR sec.sec.124.10, 124.11, 124.17, and 
123.30. Concerning intervention in administrative enforcement actions, the 
commission responds that Texas has chosen to satisfy authorization requirements 
for the NPDES and UIC programs by implementing sec.123.27(d)(2) and 
sec.145.13(d)(2) of the regulations; that is, by electing the option of 
permissive intervention rather than the alternative of intervention as a right. 
EPA and federal courts have interpreted the Clean Water Act and these provisions 
of the CFR to mean that for a state to choose this option, its law or rules must 
actually offer a procedure for permissive intervention in both civil and 
administrative enforcement proceedings (see Natural Resources Defense Council v. 
EPA , 859 F.2d 156 (D.C. Cir. 1988)). Texas Water Code, sec.7.111, which 
supersedes the repealed sec.26.134, addresses intervention in civil enforcement 
in state court. These rules create the necessary avenue for permissive 
intervention in administrative enforcement hearings. The commission and the EPA 
have exchanged letters on these issues, and the EPA letter evidences both EPA's 
conviction that the commission must meet the authorization requirements 
described here and its agreement that the adopted rules meet those requirements. 
Texas Eastman noted that sec.80.105(a), requiring the administrative law judge 
to hold a preliminary hearing in enforcement cases concerning underground 
injection control or TPDES permits, does not apply to enforcement cases 
concerning RCRA permits. Texas Eastman requested that the commission's preamble 
on adoption of the rules acknowledge this exemption for RCRA permits. The 
commenter also suggested that the requirement in sec.80.105(a) not apply if no 
person submits a request to intervene as a party within 20 days prior to the 
proposed hearing date. 
The commission believes the rule is specific in identifying that to which it 
applies. This requirement does not apply to RCRA permits because there is no 
similar federal requirement. The commission declines to require that requests to 
intervene be filed at least 20 days prior to the proposed hearing date, to avoid 
the necessity for additional notices and of hearings on whether or why a request 
may or may not have been timely filed. Intervention is a matter that can be 
addressed at the preliminary hearing. 
TCC and Brown McCarroll requested that the commission not adopt 
sec.80.109(b)(6)(C), concerning permissive intervention in certain 
administrative enforcement actions. They commented that federal law does not 
require the commission to adopt this provision to obtain federal authorization. 
The commission responds that EPA and federal courts interpret the Clean Water 
Act and CFR sec.123.27(d) and sec.145.13(d) to allow states to choose between 
two options, to provide either intervention as of right or permissive 
intervention in enforcement hearings. Texas has chosen the permissive 
intervention option, under which the state agrees not to oppose intervention 
where it may be authorized by statute, regulation, or rule. To use this option, 
however, the state law or rules must allow some meaningful opportunity for 
permissive intervention in both civil and administrative enforcement actions 
(Natural Resources Defense Council v. EPA, 859 F.2d 156 (D.C. Cir. 1988)). 
Section 80.109 creates the intervention option at the administrative level. The 
commission and the EPA have exchanged letters on these issues, and the EPA 
letter evidences both EPA's conviction that the commission must meet the 
authorization requirements described here and its agreement that the adopted 
rules meet those requirements. 
Henry, Lowerre commented that sec.80.109(b)(6)(C) does not give assurance that 
the commission will allow intervention by a third party in certain enforcement 
proceedings. The commenter argues that the rules also do not assure a third 
party will be able to participate in an effective manner. 
The commission responds that the rules provide ample and meaningful intervention 
opportunity. It is confident that the SOAH judges will follow these rules as 
adopted. 
An individual commented that while the UIC and TPDES programs were mentioned in 
sec.80.109(b)(6)(C), the RCRA program was not and expressed concern that there 
had been an oversight. 
The federal regulations governing the RCRA program do not contain the same 
requirements compared to the regulations for the UIC and NPDES programs. Compare 
40 CFR sec.123.27(d) with 40 CFR sec.271.17(d). The commission rules are 
intended to track the federal requirements. 
An individual suggested that "permissive intervention" be defined in the rules, 
and commented that the standard for permissive intervention found in sec.80.109 
does not have anything to do with justiciable interest because it appears to be 
whether or not the intervention will unduly delay or prejudice the rights of the 
original parties. 
The commission has made no changes in response to this comment. The significance 
of "permissive intervention" is explained in the next sentence of the rule. The 
commission notes that the adopted rule is patterned after the federal rules of 
civil procedure, Rule 24(b). The commission's response to the comments on the 
takings analysis provides further analysis on why the commission adopts the 
permissive intervention standard. 
TCC and Brown McCarroll requested that sec.80.115(a) be amended to state that no 
party except the executive director (that is, not the Public Interest Counsel, 
the respondent, nor permissive intervenors) may seek to amend or add to the 
penalties or technical requirements sought in an enforcement action. Brown 
McCarroll pointed out that as the state's enforcement authority, the commission 
has exclusive authority to assess penalties and recommend technical requirements 
and that nowhere in the Texas Water Code is any private party given such 
authority. Henry, Lowerre commented that the rule would mean that without the 
executive director's explicit approval, an intervenor could not present evidence 
of additional violations. An individual commented that the rule would not allow 
intervening parties to amend or add to the violations alleged in the petition. 
Texas Eastman and Exxon supported this provision as written. 
The commission has made no changes in response to these comments. The purpose of 
the rule is to comply with the federal requirement for a meaningful opportunity 
to participate by intervention. The commission believes that such meaningful 
participation by individual members of the public is best directed toward the 
remedial aspects of the proceeding. Therefore, the rule allows the intervenors 
to seek to amend or add to the penalties and technical requirements to be 
imposed. Concerning the comment on an intervenor's offer of evidence of 
additional violations, the adopted rule does not address its admissibility. The 
administrative law judge will rule on any such offers of evidence based on other 
applicable law. Concerning the comment on allowing intervenors to amend or add 
violations alleged in the petition, the commission concludes that the proposed 
change would run afoul of due process requirements, statutory requirements, and 
other commission rules. Texas Water Code, sec.7.054 and sec.7.055 specify that 
the executive director shall prepare the preliminary report that specifies the 
alleged violations and that the executive director shall give notice of the 
preliminary report to the person charged within ten days. The person charged may 
request a hearing on the alleged violations in the preliminary report under 
sec.7.058. Commission rules at sec.80.105 similarly state that the scope of a 
hearing on an enforcement matter is set by the executive director's preliminary 
report. The commission believes that allowing for the consideration of 
additional alleged violations added outside of these procedures would violate 
these requirements. 
TCC and Brown McCarroll requested that the commission not adopt proposed 
sec.80.127(f) concerning admitting public comment and the executive director's 
responses into the evidentiary record for certain applications. The commenters 
assert that this action is inappropriate because the comments are not sworn 
testimony, nor subject to cross-examination. Brown McCarroll pointed out that 
there is no requirement that public comment or the responses thereto meet the 
requirements for the admissibility of evidence set out in sec.80.127(a) or the 
Texas Rules of Civil Evidence. They argue that the admission of public comment 
would violate requirements for the admissibility of evidence, including the 
requirements in the APA, Texas Government Code, sec.2001.081. The commenters 
suggested that a separate rule should be proposed that simply calls for public 
comment to be part of the record in a case. Henry, Lowerre commented that a rule 
that would allow the commission to consider public comment in a contested case 
hearing would violate Texas law. OPIC also questioned whether the commission may 
adopt a rule that has the effect of directing that public comment shall be 
admitted into the evidentiary record. OPIC commented that the proposed 
sec.80.127(f) creates a tension between that subsection and sec.80.127(a)(2) and 
(3) that testimony may be received only from persons under oath. OPIC expressed 
its concern that a person, wishing to avoid the requirements imposed on the 
admissibility of evidence, could offer its case as public comment. An individual 
commented that because public comments cannot be considered as evidence in the 
contested case that the commission's efforts in the proposed rules are 
meaningless in that the comments will not really be considered. The commission 
responds to the comments on sec.80.127(f) by making some changes to the proposed 
rule, as explained in the following paragraphs. Generally, however, the 
commission declines to make changes in response to public comment because the 
commission concludes the subsection is necessary to meet authorization 
requirements and because the subsection is consistent with Texas law. Under 
authorization requirements, the person who makes the final decision on a permit 
application must consider the public comment and respond to it. Under Texas law 
if there is a contested case hearing on the application, it is the commission 
(not the executive director) who makes the final decision on the permit 
application. Thus, to satisfy authorization requirements, the commission must 
consider the public comment and make a response to it. The adopted sec.80.127(f) 
ensures that the public comment and the executive director's responses are made 
part of the evidentiary record so that the commission's consideration of both is 
consistent with APA, sec.2001.141(c), which requires that findings of fact may 
be based only on the evidence and on matters that are officially noticed. 
The commission disagrees that the adopted rule violates the requirements of APA, 
sec.2001.081 concerning the admission of evidence in a contested case hearing. 
The APA provides that the rules of evidence as applied in a nonjury civil case 
in a district court of the state apply to a contested case. The commenters are 
concerned that the admission into the evidentiary record of public comment and 
the executive director's responses violates the prohibition against hearsay 
found in the Texas rules of civil evidence. The commission concludes, however, 
that sec.80.127(f) is consistent with Texas law because the manner of admitting 
the evidence is consistent with the limited purpose for which it is admitted. 
Public comment will be admitted to show that public comment was received and how 
the executive director considered and responded to each comment in formulating 
the draft permit or revisions to the draft permit. Legal and policy arguments 
made in public comment will be considered by the judge and the commission in 
making the permit decisions. The executive director's responses to public 
comment, when properly offered under applicable standards governing 
administrative proceedings, will be admitted into evidence under sec.80.127(f) 
for all purposes, including for the truth of the matters stated therein. In 
contrast, the text of public comment, as it relates to fact issues, will be 
admitted under sec.80.127(f) for the limited purpose of establishing what public 
comment was received, so that the judge and commission can evaluate the 
responses and evidence offered and received from the parties on those issues. 
Unless also offered by a party to the proceeding for other purposes and admitted 
by the judge under other commission rules, the public's comments will not be 
evidence of the truth of the facts asserted in them. The commission concludes 
that the executive director's response to comments is admissible under Texas 
Rule of Civil Evidence 803(8), the hearsay exception for public records and 
reports. The executive director's responses qualify under two of the exceptions 
in that rule: specifically, the responses are matters observed under a duty 
imposed by law as to which matters there is a duty to report, and the responses 
are factual findings resulting from an investigation made pursuant to authority 
granted by law. Moreover, the staff members who prepare the responses will be 
available at the hearing for cross-examination. The commission concludes that 
public comment is admissible under the Texas rules of civil evidence for the 
limited purposes allowed under sec.80.127(f). In Lewis v. Southmore Savings 
Association, the Texas Supreme Court commented that the hearsay rule applies in 
administrative hearings but that considerable discretion is permitted in 
allowing evidence to be introduced by virtue of the liberal exceptions to the 
rule (480 S.W.2d 180, 186 (Tex. 1972)). In that case, the court ruled that the 
administrative agency had properly admitted into evidence expert testimony 
including the "expert's hearsay," in the form of the expert recounting his 
earlier interviews with persons that formed a part of the basis of his expert 
opinion. The court noted that the expert's hearsay is not evidence of the fact 
but only bears on his opinion, and that the administrative agency should 
acknowledge its limited purpose and observe it. In commission proceedings on 
certain applications the commission rules require that the executive director 
consider public comment and make a response to it, and so public comment will 
necessarily form some part of the executive director's "expert's hearsay." 
The commission concludes that in the certain proceedings not only should public 
comment and the executive director's responses be admitted into the evidentiary 
record, but also that admission should be by rule rather than rely on a case-by-
case ruling. The commission reaches this conclusion because it is necessary for 
authorization purposes that public comment will be considered. Also, a rule is 
preferable because it adds predictability to the contested case process. The 
commission concludes that it is not creating a hearsay exception but merely 
recognizing exceptions that already exist. The adoption of the rule makes sure 
that all persons know that public comment and the executive director's responses 
will be admitted into evidence for the purposes stated previously and that the 
parties will have an opportunity to respond and to present whatever rebuttal or 
supporting evidence they choose. 
The commission does make some changes in response to the commenters. The 
commission clarified sec.80.127(f) to state that the public comment and the 
executive director's responses shall be admitted into the evidentiary record. 
Also, the rule was clarified by deleting some of the proposed rule language so 
that it is clear that responses other than the executive director's will not be 
by rule admitted into the evidentiary record. However, the commission believes 
that the parties must be afforded an opportunity to respond and present evidence 
(as is required by APA, sec.2001.051), and so this language is added here as a 
reminder of the parties' rights. 
The commission believes that the previous discussion should address OPIC's 
concerns as well. A person would likely not attempt to avoid the requirements 
for the admissibility of evidence by submitting his case as public comment. 
While the person's public comment would be admitted into evidence under 
sec.80.127(f) it would be admitted for the limited purposes of putting before 
the judge and commission the policy and legal arguments made therein and, if 
facts were alleged, of showing that the comment was made; it would constitute no 
evidence that the facts in the comment were true. The person's submission of 
public comment would be successful in the sense that the executive director 
considered it in preparing the draft permit, any proposed changes to the draft 
permit, and his responses to public comment. But, if the person wished to rebut 
the truth of the matters asserted in the contested case hearing the person would 
still have to become a party and offer admissible evidence to establish the 
truth of the comment. 
Henry, Lowerre commented that if the commission adopts the proposed rules, then 
Texas Health and Safety Code, sec.361.069, would improperly limit participation 
by state and federal agencies. Section 361.069 provides that in making a 
determination on the question of land use compatibility, the commission shall 
not consider the position of a state or federal agency unless the position is 
fully supported by credible evidence from that agency during the public hearing. 
The commission acknowledges that there could be some confusion raised by the 
fact that both authorization requirements and Texas Health and Safety Code, 
sec.361.069, speak of "considering" information. The commission's responses to 
commenters in this preamble explain how the commission will "consider" public 
comment under the adopted rules, which also applies to public comment by 
governmental agencies. In contrast, the commission concludes that in the limited 
circumstances that sec.361.069 applies, the commission will "consider" the 
position of a state or federal agency only if the position is fully supported by 
credible evidence from that agency. The commission concludes that this 
requirement means that the commission may adopt the position of an agency only 
if the position is supported by evidence that was offered by the agency and 
admitted for the truth of the matters stated therein. 
Texas Eastman requested that sec.80.127(f) be harmonized with sec.55.25(b)(1) so 
that it states that the executive director must place into the record his or her 
responses to the "significant" public comment. 
The commission has made no changes in response to this comment. The commission 
believes that the change is unnecessary because sec.55.25 in part defines what 
is the required response to public comment. Thus, there is no need to define the 
requirement again in sec.80.127(f). 
OPIC commented that the proposed sec.80.127(f) conflicts with the current rule 
sec.80.111, which provides that public comment shall not be considered as 
evidence in the record. 
The commission agrees with OPIC that sec.80.127(f) as proposed could have 
created confusion. The commission adopts a revised sec.80.127(f) that specifies 
that the subsection supersedes and controls any conflict between the subsection 
and sec.80.111 (relating to Persons not Parties) concerning the admission of 
public comment into the evidentiary record. 
TCC requested that the proposed changes to sec.80.251 concerning the judge's 
proposal for decision on certain types of applications not be adopted. TCC 
referred to its comments on proposed sec.80.127(f) that public comment should 
not be part of the evidentiary record and stated that therefore public comment 
should not be a basis for the judge recommending changes to the draft permit. 
Henry, Lowerre commented that the proposed changes would violate Texas law. 
Brown McCarroll commented that the proposed rule seems to contemplate a judge's 
proposed order that recommends changes to the draft permit that are separate and 
apart from the judge's proposed findings of fact and conclusions of law. Brown 
McCarroll commented that this would violate APA, sec.2001.141, which states that 
findings of fact must be based on evidence and on matters that are officially 
noticed. OPIC requested clarification on sec.80.251 as to the legal authority 
for treating public comment as evidence for the purposes of creating an 
administrative law judge's record of decision, or other clarification as to how 
public comment is to be included in the record pursuant to the APA. 
The commission has made no changes in response to these comments. The commission 
believes that the previous response to the comments on sec.80.127(f) also 
responds to the comments here, but supplements the response to explain the use 
of public comment in contested case hearings. 
As noted previously, the commission concludes that the admission into the 
evidentiary record of public comment and the executive director's responses 
under sec.80.127(f) is a proper exercise of the commission's authority. Once 
public comment and the executive director's responses are in the evidentiary 
record, it is appropriate for the SOAH judge to recommend proposed changes to 
the draft permit after considering the public comment and the executive 
director's responses to public comment. Such proposed changes would be made 
consistent with the requirements of APA, sec.2001.141 that findings of fact must 
be based on evidence and on matters that are officially noticed. Public comment 
is admitted in evidence under sec.80.127(f) for the limited purposes of 
establishing what public comment was received. 
Public comment will be admitted for consideration of the legal and policy 
arguments made in public comment. Public comment will be admitted to show that 
public comment was received and how the executive director considered and 
responded to each comment in formulating the draft permit or revisions to the 
draft permit. The executive director's responses will be admitted in evidence 
under sec.80.127(f) for all purposes. The parties will be allowed to respond and 
present evidence on the issues raised in public comment, and such offers of 
evidence will be admitted in evidence if the judge (and ultimately the 
commission) rules that the evidence should be admitted under applicable law. 
These latter rulings on offers of evidence will not be considered under 
sec.80.127(f). On the basis of all of this evidence the judge may properly 
recommend changes to the draft permit. The judge (and ultimately the commission) 
will consider the law and policy arguments made in public comment. Any 
recommendation based on evidence must be consistent with the purposes for which 
the evidence was admitted. Public comment is not admitted in evidence under 
sec.80.127(f) for the truth of factual matters stated therein and so the judge 
(and ultimately the commission) may not base his or her recommendations on the 
factual allegations in public comment. Of course, the judge may base his or her 
recommendations on other evidence properly offered by a party and admitted for 
the truth of the matters stated therein. 
Finally, to respond to the question posed by Brown McCarroll, the commission 
intends that a judge's recommendations shall be made in the traditional fashion 
under the APA, that is, by submitting a proposal for decision together with a 
draft order containing findings of fact and conclusions of law, all based on the 
evidence. There will be no separate procedure for considering public comment. 
When the commission issues its final order, it will be accompanied by the 
commission's responses to public comment which will be consistent with the 
findings of fact and conclusions of law. 
Brown McCarroll and TCC objected to the adoption of sec.80.254. They commented 
that permissive intervention in administrative enforcement hearings is not 
required for authorization, thus this section on processing a settlement 
agreement in an enforcement case and comments on the settlement is not 
necessary. Henry, Lowerre commented that sec.80.254 does not define 
"settlement."
The commission responds to the first comment in its response to comment on the 
takings analysis. Concerning the definition of "settlement," the commission does 
not believe that a definition is needed because the term has a well understood 
meaning--the resolution of issues in controversy by agreement instead of 
adjudication. The commission notes that the commenter did not suggest a 
definition for the commission's consideration. 
Exxon commented on sec.80.254 and requested that this section be amended to 
allow the commission to remand an enforcement case for further negotiations if 
the commission does not approve of a proposed settlement. The commenter argued 
that the commission's options should not be limited to approving the settlement 
or remanding for a hearing. 
The commission has made no changes in response to this comment. If the 
commission does not approve of a settlement, then the case should proceed to 
hearing. After the referral for hearing, the parties can always investigate a 
new settlement. 
Texas Eastman commented on sec.80.254 concerning the commission's review of a 
settlement agreement in an enforcement case. The commenter suggested the section 
specify the standard of review and recommended a standard that is deferential to 
agreements. The commenter also noted that the proposal published in the Texas 
Register did not publish this section in bold type, and suggested the commission 
ensure that the section published in the Texas Register showing the adopted 
rules be in bold. 
The commission has made no changes in response to this comment. A specified 
standard of review is not appropriate under these circumstances because the 
commission must assure itself that any recommended settlement is consistent with 
law and commission policy and is in the best interest of the state. 
Additionally, the proposal as published was in accordance with the Texas 
Register Form and Style Manual, that is, the text of whole new sections is not 
bolded. Only those amendments that consist of new language to current sections 
are bolded. However, as mandated by Senate Bill 1715, 75th Legislature, the 
Texas Register will begin underlining all new language in rule proposals, 
including the text of new sections, once the Secretary of State's Office adopts 
its final rule (the rule was proposed in the October 17, 1997, issue of the 
Texas Register (22 TexReg 10203)). 
OPIC requested that sec.80.254 be amended so that OPIC has the opportunity to 
file comment on a proposed settlement of a contested enforcement case, even when 
a judge has not yet been assigned to the case. OPIC also commented that current 
sec.70.5 should be amended so that it is consistent with sec.80.254. The 
commission has made no change in response to this comment. The commission 
believes the proposed change is unnecessary in light of Texas Water Code, 
sec.7.075, as created by Senate Bill 1876, 75th Legislature, which requires 
publication in the Texas Register and a 30-day period for public comment on all 
proposed settlements of administrative enforcement cases. This should give OPIC 
ample opportunity to submit comment. The commission disagrees that the statement 
in sec.70.5 that an enforcement case may be "resolved informally" is in need of 
amendment. This section merely suggests that an enforcement case may be resolved 
by settlement rather than by following all of the requirements of a contested 
case hearing. This is consistent with sec.80.254. 
An individual commented on the restrictions in sec.80.254 on how a person 
granted permissive intervention in an enforcement case may participate. The 
commenter suggested that the restrictions violate Texas law. The commenter 
recommended changes so that an intervenor could object and present evidence on a 
settlement proposed by the executive director and the respondent. 
The commission has made no changes in response to the comment, but takes this 
opportunity to clarify the participation of intervenors in enforcement cases. 
Under sec.80.254 the judge must give an intervenor who dissents from a proposed 
settlement a reasonable time to file comments. The judge will then forward the 
settlement and the comments to the commission for the commission's consideration 
and decision. The commission's decision will be based on the settlement and the 
other evidence in the record, just as in any other contested case. Texas law 
does not require permissive intervention in an enforcement case by the executive 
director against a respondent. As stated in the explanation of the adopted 
rules, the commission adopts these rules (including sec.80.109(b)(6)(C) and 
sec.80.254) because the EPA is resolute that the authorization requirements 
include these requirements and convinced that the rules adopted here meet those 
requirements. The commission intends that the rules specify all of the 
permissive intervenors' rights; that is, that the right of an intervenor to 
participate in the contested case hearing is limited to those actions 
specifically authorized in the rules and amendments adopted today. 
Texas Eastman commented on sec.80.274, concerning agreement by the parties to 
waive the requirement to file a motion for rehearing. The commenter argued that 
the section should be revised to specify that the parties' agreed effective date 
for the order must be no earlier than the date the order is signed. The 
commenter also noted that the proposal published in the Texas Register did not 
publish this section in bold type, and suggested the commission ensure that the 
section published in the Texas Register showing the adopted rules be in bold.
The commission responds that the proposal published in the Texas Register 
specified that the agreed effective date must be no earlier than the date the 
order is signed, and that the adopted rule also contains the requirement. The 
commission notes that this section allows the parties to agree to an effective 
date for a commission order, which has the effect of waiving the requirement to 
file a motion for rehearing. This section, and SB 637, 75th Legislature, on 
which it is based, do not allow the parties to agree to shorten the time period 
for filing a motion for rehearing as was suggested by the commenter. Regarding 
the latter comment, please see the response to sec.80.254 regarding the 
publication of the proposal. 

SUBCHAPTER C.Hearing Procedure
30 TAC sec.sec.80.105, 80.109, 80.115, 80.127
STATUTORY AUTHORITY. The amendments are adopted under Texas Water Code, 
sec.sec.5.103, 5.105, 13.041, 26.011, 27.019, 32.009, 33.007, and 34.006 and 
Texas Health and Safety Code, sec.sec.341.002, 341.031, 361.011, 361.017, 
361.024, 366.012, 382.017, 401.011, 401.051, and 401.412, which authorize the 
commission to adopt any rules necessary to carry out its powers and duties under 
the Water Code and other laws of Texas and to establish and approve all general 
policy of the commission; and under Texas Government Code, sec.2001.144 and 
sec.2001.145. 

sec.80.127. Evidence. 
(a)-(e) (No change.) 
(f) Public comment. In Resource Conservation and Recovery Act, underground 
injection control, and Texas Pollutant Discharge Elimination System permit cases 
for which the commission has permitting authority by authorization from the 
federal government, all public comment on the application received by the 
commission during the public comment period and the executive director's 
responses shall be admitted into the evidentiary record. The parties shall be 
allowed to respond and to present evidence on each issue raised in public 
comment or the executive director's responses. This subsection supersedes and 
controls any conflict between this subsection and sec.80.111 of this title 
(relating to Persons not Parties) concerning the admission of public comment 
into the evidentiary record. 
(g) Invoking the "rule." At the request of the party, and subject to the 
discretion of the judge, witnesses may be placed under "the rule" as provided 
by, and subject to the conditions of, Texas Rule of Civil Procedure 267 and 
Texas Rule of Evidence 613. 
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 5, 1997.
TRD-9714834
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: August 8, 1997
For further information, please call: (512) 239-1966

SUBCHAPTER F.Post Hearing Procedures
30 TAC sec.sec.80.251, 80.254, 80.271, 80.273, 80.274
STATUTORY AUTHORITY. The amendments are adopted under Texas Water Code, 
sec.sec.5.103, 5.105, 13.041, 26.011, 27.019, 32.009, 33.007, and 34.006 and 
Texas Health and Safety Code, sec.sec.341.002, 341.031, 361.011, 361.017, 
361.024, 366.012, 382.017, 401.011, 401.051, and 401.412, which authorize the 
commission to adopt any rules necessary to carry out its powers and duties under 
the Water Code and other laws of Texas and to establish and approve all general 
policy of the commission; and under Texas Government Code, sec.2001.144 and 
sec.2001.145. 
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 5, 1997.
TRD-9714835
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: August 8, 1997
For further information, please call: (512) 239-1966

CHAPTER 106.Exemptions From Permitting
SUBCHAPTER P.Plant Operations
30 TAC sec.106.376
The Texas Natural Resource Conservation Commission (commission) adopts new 
sec.106.376, concerning the exclusion of decorative chromium electroplating 
facilities from the preconstruction air permitting requirements of the Texas 
Health and Safety Code, the Texas Clean Air Act, sec.382.0518. The section is 
adopted with changes to the proposed text as published in the August 19, 1997, 
issue of the Texas Register (22 TexReg 8034). 
EXPLANATION OF ADOPTED RULE. Section 106.376 creates for decorative chrome 
platers a new specific permitting exemption for facilities that otherwise would 
require a permit or authorization by a general exemption. This exemption will 
protect public health and provide businesses with an alternative to permitting, 
especially when the minimum 100-foot distance requirement of general exemption 
30 TAC sec.106.262 (previously Standard Exemption (SE) 118) cannot be met. 
Creation of this exemption is complementary to the adoption of the new Maximum 
Achievable Control Technology (MACT) standard for chrome under 30 TAC 
sec.113.190. The mechanism provided by the adopted exemption will allow the 
operation of decorative chrome plating facilities in compliance with state law 
without the expense in time and money of obtaining a permit, while continuing to 
be protective of public health and the environment. A focus group composed of 
representatives of the New Source Review Permits Division, Toxicology and Risk 
Assessment, Small Business Assistance Program, Office of Policy and Regulatory 
Development, Field Operations, and Legal Division evaluated the scope of the 
affected facilities, effects on the regulated community, health effects, and 
protectiveness of the exemption. Modeling of the potential fugitive chromium 
emissions using a conservative approach indicated that the emissions were 
insignificant and were not expected to pose a health threat to adjacent 
sensitive receptors. The engineering analysis concluded that the 5,000 ampere 
rectifier cumulative ceiling was protective of public health. In order to 
prevent the stacking of processes by the use of a standard exemption, this 
exemption may not be used at any site in conjunction with other chrome plating 
operations such as hard chrome plating, or chromic acid anodizing operations. In 
other words, the commission will not authorize an existing permitted, exempted, 
or grandfathered chrome plating or chromic acid anodizing operation to increase 
its emissions at any site by using the adopted exemption for decorative chrome 
plating facilities. It does not prohibit a decorative chrome plating operation 
from adding more than one rectifier unit at a site as long as the 5,000 ampere 
cumulative ceiling is not exceeded. All associated background materials for this 
review, including the technical review, computer modeling, responses to requests 
for comment, calculations, and technical assumptions, are available for public 
review by contacting the New Source Review Permits Division.
TAKINGS IMPACT ASSESSMENT. The commission has prepared a Takings Impact 
Assessment for this rule according to Texas Government Code, sec.2007.043, and 
has determined that this rule will not create a burden on private real property. 
The Texas Health and Safety Code, Texas Clean Air Act, Chapter 382, requires 
facilities to obtain a permit or qualify for a standard exemption prior to 
construction or modification. Through the creation of the standard exemption for 
chrome plating operations, the commission is not creating a regulatory burden, 
but is simplifying compliance with an existing statutory requirement for a class 
of facilities that do not make a significant contribution of air contaminants to 
the atmosphere. 
COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW. The commission has determined 
that this rulemaking action is subject to the Texas Coastal Management Program 
(CMP) in accordance with the Coastal Coordination Act of 1991, as amended (Texas 
Natural Resources Code, sec.sec.33.201 et. seq.), the rules of the Coastal 
Coordination Council (31 TAC Chapters 501-506), and the commission's rules in 30 
TAC Chapter 281, Subchapter B, concerning consistency with the Texas Coastal 
Management Program. As required by 31 TAC sec.505.11(b)(2) and 30 TAC 
sec.281.45(a)(3) relating to actions and rules subject to the CMP, agency rules 
governing air pollutant emissions must be consistent with the goals and policies 
of the CMP to protect and enhance air quality in the coastal area. Therefore, in 
compliance with 31 TAC sec.505.22(e), the commission affirms that this rule is 
consistent with CMP goals and policies, in that the emissions allowed by this 
exemption will have a negligible impact upon the air quality in the coastal 
area. 
HEARING AND COMMENTERS. A public hearing on this exemption was held on September 
16, 1997, at 10:00 a.m. in Austin. During the public comment period, which 
closed September 18, 1997, the United States Environmental Protection Agency 
submitted a letter stating that on the basis of its evaluation, it had no items 
of concern. In response to staff comments, the rule was changed to add the 
words, "or chromic acid anodizing" in the last sentence as the phrase was 
inadvertently omitted from the initial publication, but was included in the 
discussion in the published preamble with regard to which operations at a site 
would result in the unavailability of the exemption. No other comments were 
received. 
STATUTORY AUTHORITY. The new section is adopted under the Texas Health and 
Safety Code, the Texas Clean Air Act (TCAA), sec.382.017, which provides the 
commission with the authority to adopt rules consistent with the policy and 
purposes of the TCAA; sec.382.011, which provides the commission with the 
authority to establish the level of quality to be maintained in the state's air; 
sec.382.012, which provides for the commission to prepare and develop a general 
comprehensive plan for the proper control of the state's air; and sec.382.057, 
which provides the commission with the authority to exempt certain types of 
facilities that will not make a significant contribution of air contaminants to 
the atmosphere from the requirements of Texas Health and Safety Code, 
sec.382.0518. This exemption covers only facilities with insignificant emissions 
and thus complies with sec.382.057.

sec.106.376.Decorative Chrome Plating.
Decorative chromium electroplating operations that have a maximum combined rated 
capacity for all decorative chrome plating rectifiers of not more than 5,000 
amperes and which use a fume suppressant or other equivalent control as 
sufficient to meet sec.113.190 of this title (relating to Chromium Emissions 
from Hard and Decorative Chromium Electroplating and Chromium Anodizing Tanks 
(40 CFR 63, Subpart N)) are exempt. This exemption may not be used at any site 
where other chrome plating or chromic acid anodizing operations are conducted.
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 5, 1997.
TRD-9714785
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: November 26, 1997
Proposal publication date: August 19, 1997
For further information, please call: (512) 239-1966

CHAPTER 114.Control of Air Pollution from Motor Vehicles
The commission adopts the repeal of Chapter 114, sec.sec.114.1, 114.3-114.7, 
114.13, 114.23, 114.25, 114.27, and 114.29-114.40, concerning Control of Air 
Pollution From Motor Vehicles; a new Chapter 114, concerning Control of Air 
Pollution From Motor Vehicles, sec.sec.114.1-114.5, concerning Definitions; 
sec.sec.114.20-114.21, concerning Motor Vehicle Anti-Tampering Requirements; 
sec.sec.114.50-114.53, concerning Vehicle Inspection and Maintenance; 
sec.114.100, concerning Oxygen Requirements for Gasoline; sec.sec.114.150-
114.157, concerning Low Emission Fleet Vehicle Requirements; sec.sec.114.200-
114.202, concerning Vehicle Retirement and Mobile Emission Reduction Credits; 
and sec.sec.114.250, 114.260, and 114.270, concerning Transportation Planning; 
and a revision to the State Implementation Plan. These repeals and new sections 
are adopted without changes to the proposed text as published in the September 
5, 1997, issue of the Texas Register (22 TexReg 8896) and will not be 
republished. 
EXPLANATION OF ADOPTED RULES Several new state and federal requirements for the 
control of air pollutants from motor vehicles must be incorporated into Chapter 
114 within the next 12 months. The implementation of these requirements will 
require several rulemaking efforts, some of which will be on overlapping, but 
not necessarily simultaneous schedules. Reformatting Chapter 114 into program 
specific subchapters without substantial technical changes will allow each 
program to be revised independently of the others, thus accommodating 
overlapping schedules. The renumbered sections also create a cleaner, more 
logical organization. 
The new Chapter 114 will be divided into seven new subchapters (A through G). 
Subchapter A, sec.sec.114.1-114.5, contains the definitions for the entire 
chapter. The definitions were taken from several existing sections and placed 
into sec.114.1 for general definitions and four other sections, sec.sec.114.2-
114.5, which cover major mobile source program definitions. Each of the 
remaining six subchapters contains a specific requirement which pertains to 
specific motor vehicle programs. Subchapter B, sec.sec.114.20-114.21, contains 
the requirements for the motor vehicle anti-tampering program. New sec.114.20 
does not contain the original subsection (e), concerning leaded gasoline, 
because leaded fuel has been banned for on-road sales by the FCAA beginning 
December 31, 1995. Subchapter C, sec.sec.114.50-114.53, contains the 
requirements for the vehicle inspection and maintenance program. Subchapter D, 
sec.114.100, contains the requirements for the oxygenated fuels program. 
Subchapter E, sec.sec.114.150-114.157, contains the requirements for the low 
emission fleet vehicle program. Subchapter F, sec.sec.114.200-114.202, contains 
the requirements for the vehicle retirement and mobile emission reduction 
credits program. Subchapter G, sec.sec.114.250, 114.260, and 114.270, contains 
the requirements for the transportation planning program. Section 114.250, 
concerning Memorandum of Understanding (MOU) with the Texas Department of 
Transportation, contains the MOU as an exhibit under subsection (c). The Mobile 
Source Section is planning to incorporate the MOU into Chapter 7, concerning 
Memoranda of Understanding, in a follow-on rulemaking. 
Finally, this rulemaking is a regulatory reform action which incorporates 
numerous editorial changes to ensure the chapter is consistent with the Guiding 
Principles and policies of the commission, and is consistent in format, style, 
and tone per commission guidelines. 
TAKINGS IMPACT ASSESSMENT The commission has prepared a Takings Impact 
Assessment for these rules under Texas Government Code, sec.2007.043. The 
following is a summary of that assessment. The specific purpose of this 
rulemaking is to reorganize Chapter 114, by creating subchapters and 
reorganizing the sections into the new subchapters, in order to facilitate 
implementation of further rule revisions by the state. Promulgation and 
enforcement of this reorganization will not affect private real property. 
COASTAL MANAGEMENT PLAN The commission has determined that this rulemaking 
relates to an action or actions subject to the Texas Coastal Management Program 
(CMP) in accordance with the Coastal Coordination Act of 1991, as amended (Texas 
Natural Resource Code, sec.sec.33.201 et. seq.), and the commission's rules in 
30 TAC Chapter 281, Subchapter B, concerning Consistency with the Texas Coastal 
Management Program. As required by 31 TAC sec.505.11(b)(2) and 30 TAC 
sec.281.45(a)(3) relating to actions and rules subject to the CMP, commission 
rules governing air pollutant emissions must be consistent with the applicable 
goals and policies of the CMP. The commission has reviewed this action for 
consistency with the CMP goals and policies in accordance with the rules of the 
Coastal Coordination Council and has determined that the action is consistent 
with the applicable CMP goals and policies. The CMP policy applicable to this 
rulemaking action is the policy that commission rules comply with regulations at 
Title 40, Code of Federal Regulations (CFR), to protect and enhance air quality 
in the coastal area, (31 TAC sec.501.14(q)). This rule does not change existing 
requirements which already comply with regulations at Title 40, CFR, and is 
therefore consistent with this policy.
HEARING AND COMMENTERS A public hearing on this proposal was held in Austin on 
September 30, 1997. The comment period closed on October 6, 1997. 
The Environmental Protection Agency (EPA) submitted general comments which 
supported the removal of the leaded gasoline dispensing labeling requirement. 
The EPA also submitted specific comments regarding their proposed disapproval of 
portions of the state's anti-tampering rules in sec.114.1 and sec.114.5 (now 
sec.114.20 and sec.114.21). EPA suggested that the state should make additional 
revisions to its antitampering rules to make them consistent with the Clean Air 
Act provisions regarding exclusions and exemptions. 
Although the commission acknowledges that the EPA is proposing disapproval of 
portions of the state's anti-tampering rules, this rulemaking merely renumbered 
these sections without making technical changes to the existing program. 
Therefore, the commission will defer revisions of the anti-tampering rules until 
the next rulemaking. 
EPA stated that they were planning to disapprove the Texas Clean Fuel Fleet 
program due to changes in the underlying legislation and EPA concerns about the 
state's equivalency determination. EPA suggested that the state should consider 
revisions to its clean fuel fleet program. 
Although the commission acknowledges that the EPA is proposing disapproval of 
the Texas Clean Fuel Fleet program, this rulemaking merely renumbered these 
sections without making technical changes to the existing program. Therefore, 
the commission will defer revisions of the clean fuel fleet rules until the next 
rulemaking. 
Finally, EPA suggested that the state consider a revision to the vehicle 
retirement rules which require IM240 testing in view of the state's cancellation 
of its IM240 program. 
The commission acknowledges the need to review and possibly revise the vehicle 
retirement rules which require IM240 testing, however this rulemaking merely 
renumbered these sections without making technical changes to the existing 
program. Therefore, the commission will defer revisions of these rules until the 
next rulemaking. 

30 TAC sec.sec.114.1, 114.3-114.7, 114.13, 114.23, 114.25, 114.27, 114.29-114.40
STATUTORY AUTHORITY The repeals are adopted under the Texas Health and Safety 
Code, the Texas Clean Air Act (TCAA), sec.382.017, which provides the commission 
with the authority to adopt rules consistent with the policy and purposes of the 
TCAA. 
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 5, 1997.
TRD-9714845
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 239-1970

SUBCHAPTER A.Definitions
30 TAC sec.sec.114.1-114.5
The new rules are adopted under the Texas Health and Safety Code, the Texas 
Clean Air Act (TCAA), sec.382.017, which provides the commission with the 
authority to adopt rules consistent with the policy and purposes of the TCAA 
because the primary purpose of this rulemaking is to reformat Chapter 114 into 
subchapters. Proposed Subchapter B, concerning Motor Vehicle Anti-Tampering 
Requirements, does not contain the leaded gasoline requirements of the former 
Section 114.1(e); therefore, Subchapter B is also proposed under the TCAA, 
sec.382.011, which provides the commission with the authority to control the 
quality of the state's air; sec.382.012, which provides for the commission to 
prepare and develop a general, comprehensive plan for the proper control of the 
state's air; sec.382.016, concerning monitoring requirements and examinations of 
records; and sec.382.019, which provides the commission with the authority to 
adopt rules to control and reduce emissions from engines used to propel land 
vehicles. 
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 7, 1997.
TRD-9714837
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 239-1970

SUBCHAPTER B.Motor Vehicle Anti-Tampering Requirements
30 TAC sec.1140.20, sec.114.21
The new rules are adopted under the Texas Health and Safety Code, the Texas 
Clean Air Act (TCAA), sec.382.017, which provides the commission with the 
authority to adopt rules consistent with the policy and purposes of the TCAA 
because the primary purpose of this rulemaking is to reformat Chapter 114 into 
subchapters. Proposed Subchapter B, concerning Motor Vehicle Anti-Tampering 
Requirements, does not contain the leaded gasoline requirements of the former 
Section 114.1(e); therefore, Subchapter B is also proposed under the TCAA, 
sec.382.011, which provides the commission with the authority to control the 
quality of the state's air; sec.382.012, which provides for the commission to 
prepare and develop a general, comprehensive plan for the proper control of the 
state's air; sec.382.016, concerning monitoring requirements and examinations of 
records; and sec.382.019, which provides the commission with the authority to 
adopt rules to control and reduce emissions from engines used to propel land 
vehicles. 
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 5, 1997.
TRD-9714838
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 239-1970

SUBCHAPTER C.Vehicle Inspection and Maintenance
30 TAC sec.sec.114.50-114.53
The new rules are adopted under the Texas Health and Safety Code, the Texas 
Clean Air Act (TCAA), sec.382.017, which provides the commission with the 
authority to adopt rules consistent with the policy and purposes of the TCAA. 
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 5, 1997.
TRD-9714839
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 239-1970

SUBCHAPTER D.Oxygen Requirements for Gasoline
30 TAC sec.114.100
The new rules are adopted under the Texas Health and Safety Code, the Texas 
Clean Air Act (TCAA), sec.382.017, which provides the commission with the 
authority to adopt rules consistent with the policy and purposes of the TCAA. 
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 5, 1997.
TRD-9714840
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 239-1970

SUBCHAPTER E.Low Emission Fleet Vehicle Requirements
30 TAC sec.sec.114.150-114.157
The new rules are adopted under the Texas Health and Safety Code, the Texas 
Clean Air Act (TCAA), sec.382.017, which provides the commission with the 
authority to adopt rules consistent with the policy and purposes of the TCAA. 
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 5, 1997.
TRD-9714841
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 239-1970

SUBCHAPTER F.Vehicle Retirement and Mobile Emission Reduction Credits
Vehicle Retirement
30 TAC sec.114.200
The new rule is proposed under the Texas Health and Safety Code, the Texas Clean 
Air Act (Texas Clean Air Act (TCAA), sec.382.017, which provides the commission 
with the authority to adopt rules consistent with the policy and purposes of the 
TCAA. 
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 7, 1997.
TRD-9714842
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 239-1970

Mobile Emissions Credits
30 TAC sec.114.201, sec.114.202
The new rules are adopted under the Texas Health and Safety Code, the Texas 
Clean Air Act (TCAA), sec.382.017, which provides the commission with the 
authority to adopt rules consistent with the policy and purposes of the TCAA. 
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 7, 1997.
TRD-9714843
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 239-1970

SUBCHAPTER G.Transportation Planning
30 TAC sec.sec.114.250, 114.260, 114.270
The new rules are adopted under the Texas Health and Safety Code, the Texas 
Clean Air Act (TCAA), sec.382.017, which provides the commission with the 
authority to adopt rules consistent with the policy and purposes of the TCAA. 
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 5, 1997.
TRD-9714844
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 239-1970

CHAPTER 305.Consolidated Permits
The Texas Natural Resource Conservation Commission (commission) adopts 
amendments to sec.sec.305.2, 305.22, 305.23, 305.25, 305.533, and 305.535, 
concerning Consolidated Permits. Sections 305.22, 305.23, 305.25, 305.533 and 
305.535 are adopted with changes to the proposed text as published in the 
September 19, 1997, issue of the Texas Register (22 TexReg 9434). Section 305.2 
is adopted without changes and will not be republished. 
EXPLANATION OF ADOPTED RULE
The amendments to Chapter 305 are intended to make commission rules consistent 
with federal requirements of the National Pollutant Discharge Elimination System 
(NPDES) program. These changes will facilitate assumption of the NPDES program 
by the state of Texas from the U.S. Environmental Protection Agency (EPA). 
Existing sec.305.2 defines "severe property damage" as substantial physical 
damage to property, damage to treatment facilities which causes them to become 
inoperable, or substantial and permanent loss of natural resources which can 
reasonably be expected to occur in the absence of a discharge. The change to 
sec.305.2 is intended to clarify that "severe property damage" does not mean 
economic loss caused by delays in production, consistent with 40 Code of Federal 
Regulations (CFR) sec.122.41(m)(1)(ii) governing authorized bypasses. 
Existing sec.sec.305.22, 305.23, and 305.25 provide the procedures by which a 
temporary or emergency order or executive director authorization may be issued. 
Sections 305.22 and 305.23 provide that a person seeking to obtain a temporary 
or emergency order to discharge waste or pollutants into or adjacent to water in 
the state shall submit a sworn application to the commission containing 
information that the discharge is unavoidable to prevent loss of life, serious 
injury, severe property damage, or severe economic loss (other than economic 
loss caused by delays in production), or to make necessary and unforeseen 
repairs to a facility. The amended rules delete the parenthetical text relating 
to economic loss caused by delays in production.
The amended sec.305.22(b) addresses the procedures governing discharges adjacent 
to waters in the state. Further, amendments to sec.sec.305.22, 305.23 and 305.25 
provide that, once Texas has been authorized to administer the NPDES program, 
neither temporary or emergency orders nor executive director authorizations may 
be issued for discharges into waters in the state by TPDES permitted facilities 
on the ground of economic loss, as set forth in the proposed rule, or making 
necessary and unforeseen repairs to a facility. The deletion of these grounds 
complies with federal requirements, which authorize bypasses of partially or 
untreated wastewater to occur only if the discharge is unavoidable to prevent 
loss of life, personal injury or severe property damage. 
The amendments to sec.305.533 (relating to Adoption of Environmental Protection 
Agency Issued Permits and Pretreatment Programs) clarifies the transfer of 
jurisdiction of federally-issued NPDES permits to the commission. Additionally, 
the commission has amended sec.305.535 (relating to Bypasses from TPDES 
Permitted Facilities) to clarify that the section pertains only to TPDES permits 
issued by the commission after assumption of the NPDES program from the EPA. The 
amendments also specify that neither "severe economic loss" nor "necessary and 
unforeseen repairs" can be a basis to authorize a bypass, consistent with 40 CFR 
sec.122.41(m). Additionally, the section is being amended to attain consistency 
with NPDES requirements by adding a new subsection (d) which would establish 
secondary treatment standards for publicly owned treatment works required to 
have TPDES permits. The amendment establishes minimum standards for the 
percentage of the removal of certain pollutants, including biochemical oxygen 
demand, total suspended solids, and pH. The subsection also specifies certain 
exceptions to these standards consistent with federal requirements contained in 
40 CFR sec.sec.123.25(a)(15), 123.25(a)(36), and 133.102. 
TAKINGS IMPACT ASSESSMENT
The commission has prepared a Takings Impact Assessment for these rules pursuant 
to Texas Government Code sec.2007.043. The following is a summary of that 
assessment. The specific purpose of the rule is to attain consistency with 
federal NPDES program requirements and meet federal requirements governing the 
process of delegation of the NPDES program to the state of Texas. The rules will 
substantially advance this specific purpose by removing "severe economic loss" 
and "necessary and unforeseen repairs" as a basis for TPDES permit holders to 
obtain temporary and emergency orders and executive director authorizations to 
discharge pollutants into waters in the state, clarifying jurisdictional issues 
after delegation, and establishing treatment requirements for domestic 
wastewater dischargers. Promulgation and enforcement of these rules will not 
burden private real property which is the subject of the rules because this 
rulemaking is not the producing cause of a reduction in the market value of the 
affected private real property. Further, the following exception to the 
application of Chapter 2007 of the Texas Government Code, set forth at Texas 
Government Code Annotated sec.2007.003(b), applies to these rules: the 
rulemaking is an action reasonably taken to fulfill an obligation mandated by 
federal law. 
COASTAL MANAGEMENT PROGRAM 
The commission has reviewed this rulemaking for consistency with the Coastal 
Management Program (CMP) goals and policies in accordance with the regulations 
of the Coastal Coordination Council, and has determined that the rulemaking is 
consistent with the applicable CMP goals and policies. 
HEARINGS AND COMMENTERS 
A public hearing was held in Austin, Texas on October 7, 1997. The public 
comment period closed on October 20, 1997. No oral or written comments were 
received during the public hearing.
One written comment was received from Texas Utilities Services, Inc., on behalf 
of Texas Utilities Electric Company, Texas Utilities Fuel Company, Texas 
Utilities Mining Company, and ENSERCH, generally in support of the proposed 
rule. 
GENERAL COMMENTS 
Texas Utilities Services, Inc. indicated its support for the rulemaking. The 
commenter stressed the importance of authorizing emergency or temporary orders 
for wastewater discharges in cases where the discharge is unavoidable to prevent 
loss of life, serious injury, severe property damage, or severe economic loss. 
The commenter additionally indicated this is a significant issue in times of 
drought when water temperatures may be elevated, presumably in cooling water 
reservoirs used by the utility. The commenter also noted that the commission 
would be conducting a separate rulemaking in the near future to implement Senate 
Bill (SB) 1876, effective on September 1, 1997, which governs the issuance of 
emergency and temporary orders. 
The commission responds and concurs with the commenter that these authorizations 
are important. The amended rule as it was proposed was devised to maximize the 
ability of the commission to authorize temporary or emergency discharges and 
only limits certain discharges which would occur directly into waters in the 
state. There has been no change in the rule to restrict temporary or emergency 
discharges which might be authorized adjacent to waters in the state. The 
commission notes that a finding of severe property damage, which could form the 
basis for authorizing a temporary or emergency discharge, is maintained in the 
rule. 
The commission also responds that the rulemaking for SB 1876 will commence at 
the end of 1997 or early 1998, and will set forth the commission's new 
authorities to grant emergency and temporary orders. The changes made in this 
rulemaking, which apply only to facilities required to have TPDES permits, are 
consistent with the provisions of SB 1876. 
The amendments in sec.sec.305.22, 305.23, and 305.25 have been revised for 
clarity, and to replace language referring to NPDES program delegation with 
language that more accurately portrays the action the commission is seeking from 
the EPA. Section 305.533 has been amended for clarification purposes.
The amendment of sec.305.535, which proposed the addition of a new subparagraph 
(5)(C), included a reference to a federal regulation, 40 CFR sec.35.2005(b)(16). 
Instead of referring to the federal regulation, the commission is adopting the 
amendment to actually specify in the rule the definitions and criteria from the 
federal regulation. This revision does not in any way change the rule's 
requirement and only makes the requirements more clear. Sections 305.22 and 
305.23 have also been amended to delete the parenthetical text that excluded 
economic loss caused by delays in production as a basis for an emergency or 
temporary order in non-TPDES situations. This parenthetical language was 
originally designed to comply with federal requirements necessary for Texas's 
assumption of NPDES permitting authority. Because the removal of "severe 
economic loss" from the list of grounds for which discharges from facilities 
subject to TPDES permit requirements may be authorized satisfies the federal 
NPDES requirements, the parenthetical language is no longer needed. After the 
rules were proposed, the commission determined that Sections 305.22(a), 
305.23(a), 305.25(a) and 305.535(c)(1)(a) remained inconsistent with federal 
standards regarding authorized bypasses although the commission's stated purpose 
in changing these rules was to incorporate such standards as provided in 40 CFR 
sec.122.41(m). Accordingly, those sections have been further changed to delete 
the ground of "necessary and unforeseen repairs" as a basis for allowing a 
discharge of partially treated or untreated wastewater into water in the state 
by facilities subject to TPDES permits, as required by 40 CFR sec.122.41(m). 
With this revision, bypasses by TPDES facilities for necessary maintenance 
purposes will be allowed only under the circumstances described in 
sec.305.535(a), which allows bypasses to occur if necessary for essential 
maintenance to assure efficient operation but only if the effluent limitations 
are not exceeded. The deletion of "necessary and unforeseen repairs" eliminates 
inconsistency with the existing requirement that effluent limitations not be 
exceeded when necessary maintenance purposes is the ground for allowing the 
bypass. 
In addition, a change has been made to the Takings Impact Assessment to include 
an explanation of an exemption of takings law that applies to this rule. This 
change does not affect the conclusion of the assessment that no taking has 
occurred; instead it more fully explains the reasons for the commission's 
actions. 

SUBCHAPTER A.General Provisions
30 TAC sec.305.2
STATUTORY AUTHORITY
The amendments are proposed under the Texas Water Code, sec.5.103 and sec.5.105, 
which provide the commission with the authority to adopt any rules necessary to 
carry out its powers and duties under the Texas Water Code and other state law. 
The basis for the amendments is also contained in sec.26.121, which authorizes 
the commission to prohibit unauthorized discharges into and adjacent to waters 
in the state, and sec.5.509, which describes the circumstances under which the 
commission may issue an emergency or temporary order for the discharge of waste 
or pollutants into waters in the state. SUBCHAPTER A : GENERAL PROVISIONS 
sec.305.2 The amendments are proposed under the Texas Water Code, sec.5.103 and 
sec.5.105, which provide the commission with the authority to adopt any rules 
necessary to carry out its powers and duties under the Texas Water Code and 
other state law. The basis for the amendments is also contained in sec.26.121, 
which authorizes the commission to prohibit unauthorized discharges into and 
adjacent to waters in the state, and sec.5.509, which describes the 
circumstances under which the commission may issue an emergency or temporary 
order for the discharge of waste or pollutants into waters in the state. 
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 Novmber 10, 1997.
TRD-9715043
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 19, 1997
For further information, please call: (512) 239-4640

SUBCHAPTER B.Emergency Orders, Temporary Orders, and Executive Director 
Authorizations
30 TAC sec.sec.305.22, 305.23, 305.25
The amendments are proposed under the Texas Water Code, sec.5.103 and sec.5.105, 
which provide the commission with the authority to adopt any rules necessary to 
carry out its powers and duties under the Texas Water Code and other state law. 
The basis for the amendments is also contained in sec.26.121, which authorizes 
the commission to prohibit unauthorized discharges into and adjacent to waters 
in the state, and sec.5.509, which describes the circumstances under which the 
commission may issue an emergency or temporary order for the discharge of waste 
or pollutants into waters in the state. 

sec.305.22. Application for Orders or Authorizations to Discharge. 
(a) A person desiring to obtain a temporary or emergency order to discharge 
waste or pollutants, including untreated or partially treated wastewater, into 
water in the state shall submit a sworn application to the commission containing 
the following information and any other information the commission may 
reasonably require: 
(1) a statement that the discharge is unavoidable to prevent loss of life, 
serious injury, severe property damage, or, if the State of Texas is not 
authorized to administer the NPDES program, severe economic loss or to make 
necessary and unforeseen repairs to a facility; that there are no feasible 
alternatives to the proposed discharge; and that the discharge will not cause 
significant hazard to human life and health, unreasonable damage to property of 
persons other than the applicant, for unreasonable economic loss to persons 
other than the applicant; 
(2)-(8) (No Change.) 
(b) A person desiring to obtain a temporary or emergency order to discharge 
waste or pollutants, including untreated or partially treated wastewater, 
adjacent to waters in the state shall submit a sworn application to the 
commission containing the following information and any other information the 
commission may reasonably require: 
(1) a statement that the discharge is unavoidable to prevent loss of life, 
serious injury, severe property damage, severe economic loss or to make 
necessary and unforeseen repairs to a facility; that there are no feasible 
alternatives to the proposed discharge; and that the discharge will not cause 
significant hazard to human life and health, unreasonable damage to property of 
persons other than the applicant, or unreasonable economic loss to persons other 
than the applicant;
(2) a statement that the proposed discharge will not present a significant 
hazard to the area of or surrounding the discharge;
(3) an estimate of the dates on which the proposed discharge will begin and end; 
(4) a statement of the volume and quality of the proposed discharge; 
(5) an explanation of measures proposed to minimize the volume and duration of 
the discharge; 
(6) an explanation of measures proposed to maximize the waste treatment 
efficiency of units not taken out of service or facilities provided for interim 
use; 
(7) for temporary orders, a list of potentially affected persons in accordance 
with sec.305.48(1) of this title (relating to Additional Contents of 
Applications for Wastewater Discharge Permits); and 
(8) payment of appropriate application fees in accordance with sec.305.27 of 
this title (relating to Application Fees). 
(c) If the applicant is other than an individual, the application must be sworn 
to by someone authorized to do so for the applicant, as provided for in 
sec.305.44 of this title (relating to Signatories To Applications).
(d) If the executive director issues an authorization to discharge as provided 
in sec.305.25 of this title (relating to Executive Director Authorizations To 
Discharge), the applicant must submit the sworn application as required in 
subsections (a) or (b) of this section before the date of the commission's 
public hearing to consider the authorization. 
(e) This section does not apply to unpermitted facilities subject to TPDES 
regulation. 

sec.305.23. Emergency Orders. 
(a) The commission may issue emergency orders relating to the discharge of waste 
or pollutants into or adjacent to any water in the state, where the discharge is 
regulated by a Texas pollutant discharge elimination system (TPDES) permit or 
where a TPDES permit is not required, without notice and hearing, or with such 
notice and hearing as the commission considers practicable under the 
circumstances, only if the commission finds the following to be true: 
(1) for discharges into water in the state, that the discharge is unavoidable to 
prevent loss of life, serious injury, severe property damage, or, if the state 
of Texas is not authorized to administer the NPDES program, severe economic loss 
or to make necessary and unforeseen repairs to a facility; that there are no 
feasible alternatives to the proposed discharge; and that the discharge will not 
cause significant hazard to human life and health, unreasonable damage to 
property of persons other than the applicant, or unreasonable economic loss to 
persons other than the applicant; 
(2) for discharges adjacent to any water in the state, that the discharge is 
unavoidable to prevent loss of life, serious injury, severe property damage, 
severe economic loss or to make necessary and unforeseen repairs to a facility; 
that there are no feasible alternatives to the proposed discharge; and that the 
discharge will not cause significant hazard to human life and health, 
unreasonable damage to property of persons other than the applicant, or 
unreasonable economic loss to persons other than the applicant;
(3) that the proposed discharge will not present a significant hazard to the 
uses that may be made of the receiving water after the discharge;
(4) that the estimate of the dates on which the proposed discharge will begin 
and end and the estimate of the volume and quality of the proposed discharge 
submitted by the applicant are reasonable and are attainable; and 
(5) that the measures proposed by the applicant to minimize the volume and 
duration of the discharge, and to maximize the waste treatment efficiency of 
treatment units not taken out of service or treatment facilities to be provided 
for interim use are reasonable. 
(b)-(c) (No Change.) 

sec.305.25. Executive Director Authorizations to Discharge. 
(a) If emergency conditions exist which make it necessary to take action more 
expeditiously than is otherwise provided by this subchapter, the executive 
director may authorize the discharge of untreated or partially treated 
wastewater from a permitted facility into water in the state if he determines 
that the discharge is unavoidable to prevent loss of life, serious injury, 
severe property damage, or, if the state of Texas is not authorized to 
administer the NPDES program, severe economic loss or to make necessary and 
unforeseen repairs to the facility; that there are no feasible alternatives to 
the discharge; and that the discharge will not cause significant hazard to human 
life and health, unreasonable damage to property of persons other than the 
applicant, or unreasonable economic loss to persons other than the applicant. 
(b) If emergency conditions exist which make it necessary to take action more 
expeditiously than is otherwise provided by this subchapter, the executive 
director may authorize the discharge of untreated or partially treated 
wastewater from a permitted facility adjacent to waters in the state if he 
determines that the discharge is unavoidable to prevent loss of life, serious 
injury, severe property damage, or severe economic loss, or to make necessary 
and unforeseen repairs to the facility; that there are no feasible alternatives 
to the discharge; and that the discharge will not cause significant hazard to 
human life and health, unreasonable damage to property of persons other than the 
applicant, or unreasonable economic loss to persons other than the applicant. 
(c) If the executive director issues an authorization to discharge under this 
authority, the commission shall hold a hearing as provided for in sec.305.23(b) 
of this title (relating to Emergency Orders) as soon as practicable but in no 
event later than 10 days after issuance of the authorization, to affirm, modify 
or set aside the authorization. This section does not enable the executive 
director to authorize the discharge of hazardous waste.
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 10, 1997.
TRD-9715044
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 19, 1997
For further information, please call: (512) 239-4640

SUBCHAPTER E.Actions, Notice, and Hearing
30 TAC sec.305.106
The commission adopts the repeal of sec.305.106, concerning Response to 
Comments, without changes to the proposed text as published in the August 8, 
1997, issue of the Texas Register (22 TexReg 7336). The purpose of the repeal is 
to remove duplicative requirements concerning responses to comments on draft 
permits and to complete the repeal of Chapter 305, Subchapter E. 
EXPLANATION OF THE ADOPTED RULE. The commission adopts this repeal as part of 
its efforts to encourage public participation in the commission's proceedings 
(see also the commission's adoption of rules changes in 30 TAC Chapters 55 and 
80 in this edition of the Texas Register).
This is consistent with state policy as stated in Texas Water Code, sec.5.112, 
which calls for the commission to develop policies to provide the public with 
opportunities to appear and speak on issues under its jurisdiction. The repeal 
is also intended to address public participation issues connected with federal 
permitting programs. Currently, the state's Resource Conservation and Recovery 
Act (RCRA) permitting program is under review by the United States Environmental 
Protection Agency (EPA), and private petitioners have filed a petition with the 
EPA seeking revocation of the commission's authorization to administer the 
underground injection control (UIC) program. Also, the commission has submitted 
to EPA an application for authorization to implement the National Pollutant 
Discharge Elimination System (NPDES) Program. 
The commission believes that Texas Water Code, Chapter 26, which contains 
numerous sections that are intended to satisfy authorization requirements, 
evidences legislative directive that the commission's application for NPDES 
authorization is consistent with state policy to seek authorization. The 
commission and its predecessor agencies have pursued NPDES authorization for 
several years. Public participation has been an issue in NPDES negotiations and 
has become an issue in the RCRA and UIC programs because it has proven difficult 
to harmonize the federal requirements with Texas state law and commission rules. 
However, in an effort to overcome these difficulties, the commission has worked 
with EPA and ultimately reached an agreement that the rules changes adopted in 
this edition of the Texas Register will satisfy authorization requirements. The 
commission and the EPA have exchanged letters on these issues, and the EPA 
letter shows its interpretation that the commission must meet the authorization 
requirements described in the commission's adoption of the rule changes in 
Chapters 55 and 80 in this edition of the Texas Register and that those adopted 
rules meet those requirements.
The repeal eliminates public comment procedures that are duplicative to those 
contained in sec.55.25, concerning Public Comment Processing. The repeal will 
also complete the repeal of Chapter 305, Subchapter E, which was begun during 
the commission's revisions of the procedural rules. 
TAKINGS IMPACT ASSESSMENT. The commission has prepared a Takings Impact 
Assessment for this repeal under Texas Government Code, sec.2007.043. The 
following is a summary of that assessment. The specific purpose of this repeal 
(and the adoption of rules changes in Chapters 55 and 80 in this edition of the 
Texas Register) is to establish a system for the commission's consideration of 
and response to public comments on applications and draft permits for certain 
federally authorized permit programs. The adopted rules will substantially 
advance these specific purposes by providing specific provisions on these 
matters. Promulgation and enforcement of the rules will not burden private real 
property which is the subject of the rules because they concern commission 
procedural rules. A "taking" is defined under the Private Real Property Rights 
Preservation Act as a governmental action that affects an owner's private real 
property that is the subject of the governmental action, in whole or in part or 
temporarily or permanently, in a manner that restricts or limits the owner's 
right to the property that would otherwise exist in the absence of the 
governmental action. The rules do not require or provide for any restriction of 
an owner's use of real property; they concern only procedures for public comment 
and agency response to comment. Also, the rules are under two exceptions to the 
Private Real Property Rights Preservation Act: first, the rules fulfill an 
obligation mandated by federal law, and second, the rules advance health and 
safety, and impose no greater burden than is necessary to achieve the health and 
safety purpose. 
COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW. The executive director has 
reviewed the rulemaking and found that the rule is neither identified in Coastal 
Coordination Act Implementation Rules, 31 TAC sec.505.11, relating to Actions 
and Rules Subject to the Coastal Management Program (CMP), nor will affect any 
action/authorization identified in Coastal Coordination Act Implementation 
Rules, 31 TAC sec.505.11. Therefore, the rule is not subject to the CMP.
HEARING AND COMMENTERS. A public hearing on the proposed rule was held in Austin 
on September 8, 1997. The comment period closed September 8, 1997. No comments 
were received on the proposed repeal. 
STATUTORY AUTHORITY. The repeal is adopted under Texas Water Code, 
sec.sec.5.103, 5.105, 13.041, 26.011, 27.019, 32.009, 33.007, and 34.006 and 
Texas Health and Safety Code, sec.sec.341.002, 341.031, 361.011, 361.017, 
361.024, 366.012, 382.017, 401.011, 401.051, and 401.412, which authorize the 
commission to adopt any rules necessary to carry out its powers and duties under 
the Water Code and other laws of Texas and to establish and approve all general 
policy 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 5, 1997.
TRD-9714836
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: August 8, 1997
For further information, please call: (512) 239-1966

SUBCHAPTER O.Additional Conditions and Prodecures for Wastewater Discharge 
Permits and Sewage Sludge Permits
30 TAC sec.sec.305.533, 305.535
The amendments are proposed under the Texas Water Code, sec.5.103 and sec.5.105, 
which provide the commission with the authority to adopt any rules necessary to 
carry out its powers and duties under the Texas Water Code and other state law. 
The basis for the amendments is also contained in sec.26.121, which authorizes 
the commission to prohibit unauthorized discharges into and adjacent to waters 
in the state, and sec.5.509, which describes the circumstances under which the 
commission may issue an emergency or temporary order for the discharge of waste 
or pollutants into waters in the state. 

sec.305.533. Adoption of Environmental Protection Agency Issued Permits and 
Pretreatment Programs. 
On the date of TNRCC assumption of the administration of the Texas Pollutant 
Discharge Elimination System (TPDES) permit program, after the Environmental 
Protection Agency (EPA) approves the TPDES permit program, and the issuance of 
national pollutant discharge elimination system (NPDES) permits is delegated 
from the EPA to the state, the state adopts all EPA permits and pretreatment 
programs, except that EPA shall retain jurisdiction over certain EPA-issued or 
proposed permits until their expiration which it has issued as may be specified 
in a state/federal Memorandum of Agreement. This provision does not affect the 
right of the EPA to issue NPDES permits for facilities which expired in the 
twelve months preceding the date of program assumption or to modify NPDES 
permits under Clean Water Act, sec.304(l). If the requirements of a state permit 
and an EPA permit issued to the same permittee or for the same facility are not 
of equal stringency, any requirements of the state-issued permit that are more 
stringent shall apply above and beyond those requirements contained in the 
corresponding EPA permit.

sec.305.535.Bypasses From TPDES Permitted Facilities; Minimum Requirements for 
TPDES Permitted Facilities. 
(a) Authorized bypass. The permittee may allow any bypass to occur from a TPDES 
permitted facility which does not cause effluent limitations to be exceeded, but 
only if it also is for essential maintenance to assure efficient operation. 
These bypasses are not subject to the provisions of subsections (b) and (c) of 
this section. 
(b) Notice. 
(1) Anticipated bypass. In accordance with the procedures described in 
sec.sec.305.21, 305.22 and 305.23 of this title (relating to Emergency Orders, 
Temporary Orders, and Executive Director Authorizations) if the permittee knows 
in advance of the need for a bypass, it shall submit prior notice. 
(2) (No change.) 
(c) Prohibition of Bypass. 
(1) Bypass of untreated or partially treated wastewater is prohibited from a 
TPDES permitted facility, and the commission may take enforcement action against 
the permittee for bypass, unless all of the following conditions are met:
(A) Bypass was unavoidable to prevent loss of life, personal injury, or severe 
property damage; 
(B) there were no feasible alternatives to the bypass, such as the use of 
auxiliary treatment facilities, retention of untreated wastes, or maintenance 
during normal periods of equipment downtime. This condition is not satisfied if 
adequate back-up equipment should have been installed in the exercise of 
reasonable engineering judgment to prevent a bypass which occurred during normal 
periods of equipment downtime or preventive maintenance;
(C) (No change.) 
(2) The commission may approve an anticipated bypass in accordance with the 
procedures described in sec.sec.305.21, 305.22 and 305.23 of this title 
(relating to Emergency Orders, Temporary Orders, Application for Orders or 
Authorizations To Discharge and Executive Director Authorizations) after 
considering its adverse effects, if the executive director determines that it 
will meet the three conditions listed in paragraph (1) of this subsection. 
(d) Establishing Limitations, Standards, and Other Conditions in TPDES Permits. 
(1) Permits for POTWs shall contain technology-based treatment requirements 
based upon secondary treatment and "best practical waste treatment technology." 
(2) This paragraph describes the minimum level of effluent quality attainable by 
POTWs in terms of the parameters of five-day biochemical oxygen demand (BOD5), 
total suspended solids (TSS), and pH. All requirements shall be achieved except 
as provided for in this subsection. 
(A) For BOD5, the 30-day average shall not exceed 30 mg/l and the 7-day average 
shall not exceed 45 mg/l. The 30-day average percent removal shall not be less 
than 85%. At the option of the commission, in lieu of the BOD5 parameter, the 
parameter five-day carbonaceous biochemical oxygen demand (CBOD5) may be 
substituted. For CBOD5, the 30-day average shall not exceed 25 mg/l and the 7-
day average shall not exceed 40 mg/l. The 30-day average percent removal shall 
not be less than 85%. 
(B) For TSS, the 30-day average shall not exceed 30 mg/l and the 7-day average 
shall not exceed 45 mg/l. The 30-day average percent removal shall not be less 
than 85%. 
(C) For pH, the effluent values for pH shall be maintained within the limits of 
6.0 and 9.0 unless the POTW demonstrates that inorganic chemicals are not added 
to the waste stream as part of the treatment process and contributions from 
industrial sources do not cause the pH of the effluent to be less than 6.0 or 
greater than 9.0. 
(3) Treatment works shall be eligible for consideration of effluent limitations 
described for treatment equivalent to secondary treatment, as described in 40 
CFR sec.133.105, if the BOD5 and TSS effluent concentrations consistently 
achievable through proper maintenance and operation of the treatment works 
exceed the minimum level of the effluent quality set forth in paragraph (2) (A) 
and 
(2) (B) of this subsection, a trickling filter or waste stabilization pond is 
used as the principal process, and the treatment works provide significant 
biological treatment of municipal wastewater. 
(4) The minimum TSS effluent quality concentration achievable with waste 
stabilization ponds may be adjusted in accordance with 40 CFR sec.133.103(c).
(5) The commission is authorized to substitute either a lower percent removal 
requirement or a mass loading limit for a percent removal requirement set forth 
in this subsection provided the permittee satisfactorily demonstrates that: 
(A) The treatment works is consistently meeting, or will consistently meet, its 
permit effluent concentration limits but its percent effluent removal 
requirements cannot be met due to a less concentrated influent wastewater;
(B) To meet the percent removal requirements, the treatment works would have to 
achieve significantly more stringent limitations than would otherwise be 
required by the concentration-based standards (where the term "significantly 
more stringent limitations" means BOD5 and TSS limitations necessary to meet the 
percent removal requirements of at least 5 mg/l more stringent than the 
otherwise applicable concentration-based limitations of this subsection, if such 
limits would, by themselves, force significant construction or other significant 
capital expenditure); and 
(C) The less concentrated influent wastewater is not the result of excessive 
inflow or infiltration (I/I). The determination of whether the less concentrated 
wastewater is not the result of excessive I/I will be based upon the following 
definitions and criteria: 
(i) Excessive infiltration/inflow is the quantity of infiltration/inflow which 
can be economically eliminated from a sewer system as determined in a cost-
effectiveness analysis that compares the costs for correcting the 
infiltration/inflow conditions to the total costs for transportation and 
treatment of the infiltration/inflow.
(ii) Nonexcessive infiltration is the quantity of flow which is less than 120 
gallons per capita per day (domestic base flow and infiltration) or the quantity 
of infiltration which cannot be economically and effectively eliminated from a 
sewer system as determined in a cost-effectiveness analysis.
(iii) Nonexcessive inflow is the maximum total flow rate during storm events 
which does not result in chronic operational problems related to hydraulic 
overloading of the treatment works or which does not result in a total flow of 
more than 275 gallons per capita per day (domestic base flow plus infiltration 
plus inflow). Chronic operational problems may include surcharging, backups, 
bypasses, and overflows. 
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 10, 1997.
TRD-9715045
Kevin McCalla
Director, Legal Division
Texas Natural Resource Conservation Commission
Effective date: December 1, 1997
Proposal publication date: September 19, 1997
For further information, please call: (512) 239-4640

TITLE 31. NATURAL RESOURCES AND CONSERVATION
PART I. General Land Office
CHAPTER 2.Rules of Practice and Procedure
31 TAC sec.sec.2.1-2.28
The General Land Office (GLO) adopts new Chapter 2 concerning general rules of 
practice and procedures in contested cases before the GLO, without changes to 
the proposed text as published in the September 26, 1997, issue of the Texas 
Register (22 TexReg 9638).
The text will not be re-published, The adopted rules consolidate existing 
procedural rules which will be repealed upon adoption of Chapter 2. 
The adopted rules establish a uniform procedure for the handling of contested 
cases before the GLO. 
No comments were received on the proposed new rule. 
The new procedural rules are adopted under Government Code, sec.2001.004, which 
requires state agencies to adopt rules of practice stating the nature and 
requirement of all available formal and informal procedures.
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 7, 1997.
TRD-9714903
Garry Mauro
Commissioner
General Land Office
Effective date: November 28, 1997
Proposal publication date: September 26, 1997
For further information, please call: (512) 305-9129

TITLE 34. PUBLIC FINANCE
PART I. Comptroller of Public Accounts
CHAPTER 3.Tax Administration
SUBCHAPTER S.Interstate Motor Carrier Sales and Use Tax
34 TAC sec.sec.3.441-3.443, 3.449
The Comptroller of Public Accounts adopts the repeal of sec.sec.3.441-3.443 and 
3.449 concerning records required; doing business; computation of interstate 
motor vehicle sales and use tax; and yearly filing, without changes to the 
proposed text as published in the September 12, 1997, issue of the Texas 
Register (22 TexReg 9228). 
These sections are being repealed because the Tax Code provisions to which they 
relate, Chapter 157 of the Tax Code, were repealed effective September 1, 1997. 
No comments were received regarding adoption of the repeals. 
The repeals are proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2. 
The repeals implements the Tax Code, sec.111.002. 
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 6, 1997.
TRD-9714719
Martin Cherry
Chief,General Law
Comptroller of Public Accounts
Effective date: November 26, 1997
Proposal publication date: September 12, 1997
For further information, please call: (512) 463-4062

CHAPTER 9.Property Tax Administration
SUBCHAPTER I.Validation Procedures
34 TAC sec.9.4026, sec.9.4028
The Comptroller of Public Accounts adopts the repeal of sec.9.4026 and 
sec.9.4028, concerning forms for appraisal of a dealer's motor vehicle inventory 
and forms for appraisal of a vessel and outboard motor inventory, without 
changes to the proposed text as published in the September 26, 1997, issue of 
the Texas Register (22 TexReg 9645). These rules are being repealed in order to 
combine the substance of the two rules into new rule 34 TAC sec.9.4035. The new 
rule will make it easier for the persons affected by these rules to read and 
interpret them. 
No comments were received regarding adoption of the repeals. 
These repeals are adopted under the Tax Code, sec.111.002 and sec.111.0022 which 
provide the comptroller with the authority to adopt rules for the administration 
and enforcement of the Tax Code and programs or functions assigned to the 
comptroller by law. 
The repeals implement the Tax Code, sec.sec.23.121, 23.122, 23.12D, and 23.12E.
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 10, 1997.
TRD-9715008
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: December 1, 1997
Proposal publication date: September 26, 1997
For further information, please call: (512) 463-3699

34 TAC sec.9.4035
The Comptroller of Public Accounts adopts new sec.9.4035, concerning special 
types of inventory reporting forms, without changes to the proposed text as 
published in the September 26, 1997, issue of the Texas Register (22 TexReg 
9646). 
The new section is being adopted to make the rules easier to use, conform to 
current agency practice, and reflect statutory changes made by House Bill 2116, 
75th Legislature, 1997, effective May 26, 1997, and House Bill 2606, Senate Bill 
759, and Senate Bill 1153, 75th Legislature, 1997, effective January 1, 1998. 
Comments were received from a county appraisal district regarding Step 2 of the 
special inventory declaration form. The comptroller has changed the special 
inventory declaration form to allow for only one business for each declaration 
form. 
Another county appraisal district commented on consolidating all the special 
inventory forms into a single form. The comptroller did not make the suggested 
change, since the Tax Code requires the comptroller to promulgate a declaration 
and tax statement for each type of special inventory and each form must contain 
appropriate and specific information. 
This new section is adopted under the Tax Code, sec.5.07, which requires the 
comptroller to prescribe the contents and form for the administration of the 
property tax system. 
The new section implements the Tax Code, sec.sec.23.121(f), 23.122(e), 
23.12D(f), 23.12E(e), 23.1241(f), 23.1242(e), 23.127(f), and 23.128(e). 
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 10, 1997.
TRD-9715009
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: December 1, 1997
Proposal publication date: September 26, 1997
For further information, please call: (512) 463-3699

TITLE 40. SOCIAL SERVICES AND ASSISTANCE
PART I. Texas Department of Human Services
CHAPTER 3.Income Assistance Services
The Texas Department of Human Services (DHS) adopts an amendment to sec.3.301, 
and new subchapter TT, sec.sec.3.7301-3.7303, with changes to the proposed text 
published in the September 5, 1997, issue of the Texas Register (22 TexReg 
8938). 
Justification for the amendment and new sections is to implement a workforce 
orientation requirement to provide applicants with information and resources 
that support their work effort. 
The amendment and new sections will function by helping clients to understand 
that Temporary Assistance for Needy Families (TANF) benefits are time-limited 
and the importance of work and personal responsibility. It will introduce TANF 
applicants to the available resources of the Texas Workforce Commission (TWC) 
and prepare the individual for independence before expiration of their state and 
federal time limits for receiving assistance. 
During the 30-calendar-day public comment period, the department received 
written comments from the Center for Public Policy Priorities, Houston Welfare 
Rights Organiza- tion, Lifeline Social Services for Pregnant Women, Houston-
Galveston Area Council, de Madres a Madres, Inc., Texas Workforce Commission, 
Christ the Good Shepherd Catholic Community, and two individuals; one telephone 
comment; and two requests for a public hearing from Texas Clients Council and 
Texas Association of Community Organizations for Reform Now (ACORN). A public 
hearing was held on October 10, 1997, in the Public Hearing Room of the John H. 
Winters Center, 701 West 51st Street, Austin, Texas. At the public hearing, a 
request to extend the comment period to October 17, 1997, was approved. The 
following is a summary of the comments received during the written comment 
period and during the public hearing, and DHS's responses. 
Comment 1: One commenter requested the name of the orientation be changed from 
"Career Opportunity Orientation" to "Workforce Orientation." 
Response: The rules are modified to change the name of the orientation from 
"Career Opportunity Orientation" to "Workforce Orientation." 
Comment 2: Six commenters indicated transportation is a critical issue to the 
workability of this proposal and access to transportation must be addressed.
Response: TWC has designated some zip codes as "too remote" because there is no 
public transportation, so applicants in these areas will not be required to 
attend the orientation. Also, applicants outside these zip codes who meet the 
definition of "too remote" will not be required to attend the orientation. An 
applicant who is too remote will not be required to attend the orientation. The 
definition of "too remote" is defined as the distance from the applicant's home 
to the orientation if it requires commuting time of more than one hour one way 
(not including taking a child to and from a child care facility) or if it 
prohibits walking and transportation is not available. The rule is modified to 
include this definition of "too remote." 
Additionally, TWC and DHS currently have some offices that are co-located 
offices. TWC and DHS will continue to assess the feasibility of co-housing or 
providing the orientations in local DHS offices. This will alleviate the 
applicant having to go to a TWC office to attend the orientation. 
Comment 3: One commenter suggested that applicants should not have to travel 
more than 30 minutes each way (one hour round trip) to attend a workforce 
orientation. The commenter also indicated this 30-minute rule should apply in 
lieu of the "no public transportation" clause noted in the proposed rule. 
Another commenter indicated the definition of too remote should be defined in 
the rule. 
Response: DHS already has a definition for "too remote" as noted in the response 
to Comment 2, and will use this definition to determine if an applicant is 
considered too remote from the place of orientation. 
The rule is modified to include this definition of "too remote." 
Comment 4: Five commenters indicated child care is a critical issue that needs 
to be addressed. There are two aspects to the child care issue: 1) obtaining 
child care while the applicant attends the orientation; and 2) the child care 
funds available when an applicant obtains employment. 
One commenter also requested the proposed rule be changed to state that child 
care will be provided at no cost to the applicant while attending the 
orientation, if the applicant has a child 12 years of age or younger in need of 
child care. 
Response: Applicants who are required to attend the orientation are expected to 
make child care arrangements in the same manner as they make arrangements to go 
to the local DHS office to apply for TANF benefits. Often, applicants and 
recipients bring their children to the local office for the application 
interview. The applicant has the option of taking the child to the orientation. 
For these reasons, DHS declines to require child care be provided to allow the 
applicant to attend the orientation. 
In response to the availability of child care funds for an applicant who obtains 
employment prior to being certified for TANF or within the first three months of 
certification, TWC has set aside up to $4 million. This fund is separate from 
the child care funds for JOBS participants. Additionally, TWC is committed to 
obtaining additional funds if the initial child care funds are depleted. 
Comment 5: Two commenters indicated the orientation should be provided at local 
DHS offices. Additionally, there is legislation that requires the orientation to 
be held in local DHS offices to the extent possible. One commenter indicated the 
rule should be modified to indicate where the orientations will be held. One 
commenter stated the proposed rule contradicts the concept of one-stop service. 
Response: As noted in the response to Comment 3, TWC is currently co-located in 
some local DHS offices. TWC continues to assess the feasibility of co-housing 
offices. Additionally, TWC has issued a memorandum to local workforce boards, 
TWC regional coordinators, and TWC regional directors indicating that the 
scheduling of the orientations should encourage client choice by offering more 
than one location. The orientations may be held in local DHS offices, TWC 
offices, workforce centers, libraries, or community centers. TWC also encourages 
local workforce boards to co-locate with DHS offices or provide the orientation 
at a local DHS office. 
DHS disagrees with the commenter that the rule should be modified to include 
where the orientations will be held. It is not appropriate for DHS to specify 
any TWC requirements in the rules. 
Comment 6: One commenter requested the rules be modified to specify what funds 
will be used to provide the orientations. Additionally, the commenter requested 
clarification as to whether contractors with a local workforce board or TWC 
staff are required to provide the orientation. 
Response: TWC has indicated that TANF funds will be used to provide the 
orientations. TWC staff or individuals who contract with local workforce boards 
to provide workforce services are required to provide the orientation to the 
applicants. DHS disagrees with the commenter that the rules should be modified 
to specify what funds will be used to provide orientations. It is not 
appropriate for DHS to specify any TWC requirements in the rules. 
Comment 7: One commenter indicated that time limit benefits information should 
be provided to all applicants by DHS and not during the orientation by workforce 
staff. 
Response: DHS provides time-limited benefits information to all TANF applicants 
either individually or in group informing sessions. To reinforce the philosophy 
that TANF benefits are temporary because they are time limited and work is 
important, workforce staff will also send the same message to applicants 
attending the orientation session. 
Comment 8: One commenter indicated that the definition of the "incapacity" 
exception required further clarification. 
Response: An applicant who claims to be incapacitated or disabled meets the 
exception criteria and will not be required to attend the orientation. Current 
TANF procedures to obtain medical verification from a doctor will be used to 
determine incapacity. Once the application is certified, if it is determined the 
client is not incapacitated, participation with the JOBS program, unless the 
client is exempt from participating for another reason, will be required. 
The rule is modified to clarify the incapacity exception. 
Comment 9: One commenter indicated the requirement to attend the orientation is 
not specified in Chapter 31 of the Human Resource Code; therefore, it appears 
that the workforce orientation is a requirement for recipients and not 
applicants. The commenter indicates the preamble to the proposed rule relates to 
the TWC JOBS program. 
Response: The preamble contained a misleading statement that indicated this 
requirement is part of the JOBS program. The "Workforce Orientation" is a new 
eligibility requirement and is not part of the JOBS program. In fact, after the 
TANF case is certified, and until the client attends the JOBS orientation, a 
JOBS case will not be opened. The orientation will inform the applicant that 
once the TANF benefits are certified, they will be required to participate with 
the JOBS program unless they are exempt. 
Comment 10: One commenter indicated that DHS is still under the 45-day rule to 
make a determination on applications, and imposing the workforce orientation as 
a condition of eligibility will undermine DHS's ability to meet this rule.
Response: The policy will be modified to exclude an applicant from the 
requirement to attend the orientation if there is no orientation scheduled 
within ten days prior to the 45th day and TWC is not able to provide an 
individual orientation. 
Comment 11: One commenter indicated the adult should be sanctioned for 
noncompliance with the requirement to attend the workforce orientation instead 
of denying the household. The commenter indicated this is consistent with other 
sanctions. 
Response: Federal and state welfare reform initiatives emphasize work and 
personal responsibility and impose time limits on the receipt of cash 
assistance. Because of these changes, TWC and DHS believe that it is important 
to send a strong message to applicants for assistance and that this message is 
more important than consistency with other sanctions. In addition, the agencies 
are hopeful that some applicants will be better able to make informed choices as 
a result of the information and assistance provided at the orientation session. 
Comment 12: One commenter requested that the proposed rule be reviewed by the 
Medical Care Advisory Committee and then be presented to and approved by the 
Board of the Texas Department of Health because the TANF program is a path to 
Medicaid eligibility. 
Response: DHS's policies and procedures will instruct staff to determine 
eligibility for Medicaid if the applicant has requested Medicaid benefits on the 
application form and the applicant fails to comply with the orientation 
requirement. A household that is eligible for TANF but chooses to bypass the 
program by not complying with an eligibility point is potentially eligible to 
receive Medicaid under the Medically Needy Program. 
Because the applicant can choose to bypass receipt of TANF benefits and still 
potentially receive Medicaid, DHS disagrees with the commenter that the rule 
should be taken before the Medical Care Advisory Committee and the Board of the 
Texas Department of Health. 
Comment 13: Three commenters suggested an automated return of the certificate of 
attendance so the applicant does not have to return the form. Additionally, the 
commenter requests the rule be modified to add language that specifies staff 
conducting the workforce orientation are responsible for delivering verification 
of compliance. 
Response: TWC workforce staff and local DHS staff will determine the best way to 
return the certificate of attendance to DHS without requiring the applicant to 
return the form. TWC staff will use the following hierarchy to send the 
certification of attendance: fax; telephone; courier by designated staff; 
interagency mail; or regular mail in a postage- paid envelope provided to the 
applicant by DHS. 
In some instances applicants will prefer to return the certification to DHS 
personally. TWC and DHS's procedures will instruct staff to coordinate with 
local workforce staff to determine the best way to return the certification from 
workforce staff using the hierarchy provided in the response to Comment 13. 
Therefore, TWC and DHS believe there are ample methods of returning verification 
and both agencies agree to continue toward development of an electronic 
verification system. 
The hierarchy will be part of the policy and procedures, and therefore, the 
rules will not be modified to include this information. 
Comment 14: One commenter requested the proposed rule be modified to change the 
exception criteria for caretakers caring for children under four months of age 
to a child four years of age. 
Response: Unlike the state time limit on benefits, the federal time limit 
applies to all families with an adult receiving benefits. TWC and DHS feel it is 
essential to provide information and access to resources available from TWC to 
as many applicants as possible so they can make informed decisions regarding 
work and their time-limited benefits. Once the application is certified, a 
caretaker caring for a child under age four will be exempt from future JOBS 
participation until the child is age four. 
Comment 15: One commenter requests the proposed rule be changed to allow an 
exception from the workforce orientation requirement if the applicant has 
earnings that exceed the value of the cash assistance. Also, the commenter 
requests that an individual who is attending school or training to become self-
sufficient be excluded from this requirement. 
Response: The rule indicates an applicant will be excluded from the workforce 
orientation requirement if working 30 hours or more a week and earning at least 
minimum wage or the equivalent earnings if working less hours. An applicant who 
is earning less and excluded from this requirement may not be exposed to the 
information or have access to the resources that are available at TWC. TWC and 
DHS appreciate the comment to exclude an individual who is enrolled in school or 
in training. The rule is modified to allow DHS staff to exclude an individual 
from attending the orientation if the individual's education or training 
schedule conflicts with all available orientation sessions. 
Comment 16: Three commenters endorse the concept of a workforce orientation as a 
condition of eligibility for receiving TANF. The commenters believe the proposed 
rule tracks the intent of HB 1863, the state's comprehensive welfare reform 
bill. One of the commenters also requests the rule be modified from "living in a 
Job Opportunities and Basic Skills (JOBS) county" to statewide. This allows 
local workforce boards to expand to non-JOBS counties in order to reach an 
adequate number of recipients to meet the required participation rates. 
Response: If local workforce boards determine it is feasible to provide JOBS 
services to non-JOBS counties, coordination will need to occur with TWC and DHS. 
The expansion of services to non-JOBS counties will result in these counties 
becoming JOBS counties, therefore, DHS believes there is no need to modify the 
rule. 
Comment 17: One commenter indicated that DHS receives over 1,300 TANF 
applications per day and the vast majority of these applicants will be required 
to attend a TWC workforce orientation. The volume of applicants raises serious 
questions and requires clear answers to issues such as when, how often, and 
where the sessions will occur. The commenter also stated these issues should be 
answered with actual numbers of clients who will have to attend the sessions and 
a parallel assessment should be made to determine the capacity of the local 
TWC/local workforce boards, or career centers to adequately address the 
situation. The commenter indicates the importance of this level of planning 
should not be underestimated. 
Response: TWC, with the assistance of DHS, has estimated the number of 
applicants by county to determine how many sessions will be required by each TWC 
office or local workforce board. Additionally, TWC has developed a planning 
document that outlines an implementation plan and the contents of the workforce 
orientation session. This document will be shared with advocacy groups. After 
the document is finalized, the information will be shared with workforce 
staff/local workforce boards to ensure they understand the procedures, contents 
of the workforce orientation session, and operational plans. 
Comment 18: One commenter indicated the workforce orientations must be 
customized to the participants and provide a specific employability plan with 
the goal being self-sufficiency, not merely non-receipt of TANF benefits.
Response: TWC and DHS agree case plans should be developed for each individual 
who chooses to take advantage of employment opportunities. In each case, TWC 
will try to get individual results, but the first step is a group process to get 
the individual to think about work and identify the barriers of going to work 
and the benefits available to overcome those barriers. TWC and DHS believe the 
first step can lead to individual planning. An individualized plan will be 
followed by those who are interested in pursuing employment options available 
through TWC. 
Comment 19: One commenter stated the rule should be modified to exclude 
individuals from the workforce orientation if the household has an emergency 
situation such as a victim of domestic violence. 
Response: Staff in DHS's Family Violence Section were consulted and they 
indicated victims of family violence should be excluded from this requirement if 
it places the applicant or their children in danger. Otherwise, these 
individuals should be exposed to as much information regarding employment and 
resources as possible. 
TWC and DHS appreciate the comment. The rule is modified to state that 
applicants who indicate they are victims of domestic violence and would be in 
danger if required to comply with this requirement, will be excluded. Any 
applicant who meets the exception criteria will be informed that they may attend 
the orientation if they choose, but it will not be a requirement of eligibility. 
Comment 20: Two commenters suggested an alternative to the proposed rule in 
which the workforce orientation would be phased in as local workforce boards are 
operational. Two commenters suggested the proposed rule should be piloted in an 
area instead of being implemented statewide. 
Response: Unlike the state time limit on benefits, the federal time limit 
applies to all families with an adult receiving benefits. TWC and DHS feel that 
it is essential to provide information and access to resources available from 
TWC to as many applicants as soon as possible. The applicant can then make 
informed decisions regarding work and their time- limited benefits. As indicated 
in the response to Comment 17, TWC has developed a planning document that 
outlines an implementation plan as well as the contents of the orientation 
session. The information will be shared with workforce staff/local workforce 
boards to ensure they understand the procedures, contents of the workforce 
orientation session, and operational plans. This planning document will provide 
the local workforce boards and TWC a time line for training and implementation 
of this requirement. 
Comment 21: One commenter indicated DHS's Budget Management determined there is 
no economic cost. The commenter indicated this statement is incorrect as there 
is an economic cost to persons who are required to comply with the proposed 
rule. 
Response: As indicated in the response to Comment 2 and Comment 3, DHS has 
exceptions for clients who are too remote. Also, as indicated in the response to 
Comment 4, applicants have the option of bringing their children with them to 
the orientation. There- fore, DHS disagrees with this comment and is not 
modifying the rule. 
Comment 22: One commenter supported the rule indicating the process would give 
applicants choices and empowerment. 
Response: TWC and DHS appreciate the comment. 
Comment 23: Two commenters indicated the proposed rule should be mandated for 
non-exempt clients (recipients who are not exempt from participating with the 
JOBS program). 
Response: The rule introduces a new eligibility requirement and is not related 
to the JOBS program. 
Comment 24: One commenter questioned if DHS's staff have considered the impact 
the proposed rule will have on the evaluation of the full employment (work 
subsidy) pilot currently underway in Corpus Christi. 
Response: TWC and DHS agree with the commenter's concern and will exclude 
offices that are involved with the work subsidy pilot from this requirement for 
the duration of the pilot. 
Comment 25: One commenter was provided with TWC handouts with information 
regarding benefits applicants may be eligible to receive when they go to work. 
The commenter praised the use of the TWC materials and requested the blanks be 
filled in on these forms if they were to be given to applicants. The commenter 
requested the rules be modified to include the information sheet regarding child 
support and should mention that, "in regard to families no longer receiving cash 
assistance, each cent of currently owed child support that is collected is 
forwarded to the family." 
Response: The pamphlets were provided to the state by the Southern Institute. 
The pamphlets explain that benefits such as child support, Medicaid, food 
stamps, and earned income tax credits are available to working families. TWC 
will modify these pamphlets and provide them at the orientation. Since the 
pamphlets contain information regarding several different programs and not just 
child support information, DHS will not modify the rules. 
Comment 26: One commenter indicated that applicants should be informed of the 
"exemptions" before being required to attend the orientation. 
Response: During the interview, the applicant will be informed if they meet the 
"exception criteria" for the orientation requirement. An applicant who meets the 
exception criteria will be excluded from the requirement. Applicants will also 
be informed of "exemptions" from the JOBS program by DHS staff before the 
application is certified. 
Comment 27: One commenter indicated there should be no quota set for the number 
of "good cause" exemptions. 
Response: There is no quota set on the number of "exceptions" to the workforce 
orientation requirement. 
In addition, the proposed text of sec.3.301, Responsibilities of Clients and the 
Texas Department of Human Services (DHS), contained a publication error. On page 
8938, sec.3.301(a), should have read: "To apply, the client must complete the 
application process. Clients must:" This correction is included in the adoption. 
New subchapter TT, sec.3.7303, also contained a publication error. On page 8939, 
sec.3.7303. Failure to Comply, should have read: "If a caretaker or second 
parent who is required to attend a Workforce Orientation as specified in 
sec.3.7301(a) of this title (relating to Workforce Orientation Requirements) 
refuses or fails to comply, then the application or case will be denied. If a 
client age 16, 17, or 18, certified as a child, and required to attend the 
Workforce Orientation refuses or fails to comply, then the child will be 
disqualified from Temporary Assistance for Needy Families (TANF)." This 
correction is also included in the adoption. 

SUBCHAPTER C.The Application Process
40 TAC sec.3.301
The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 
and 31, which provides the department with the authority to administer public 
and financial assistance programs. 
The amendment implements the Human Resources Code, sec.sec.22.001-22.030 and 
sec.sec.31.001-31.0325. 

sec.3.301. Responsibilities of Clients and the Texas Department of Human 
Services (DHS). 
(a) To apply, the client must complete the application process. Clients must: 
(1)-(6) (No change). 
(7) comply with the requirement to attend a workforce orientation unless the 
individual meets the exception criteria as specified in sec.3.7302 of this title 
(relating to Exceptions to the Workforce Orientation Requirements). 
(b)-(d) (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 10, 1997.
TRD-9714991
Glenn Scott
General Counsel, Legal Services
Texas Department of Human Services
Effective date: Dcember 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 438-3765

SUBCHAPTER TT.Workforce Orientation
40 TAC sec.sec.3.7301-3.7303
The new sections are adopted under the Human Resources Code, Title 2, Chapters 
22 and 31, which provides the department with the authority to administer public 
and financial assistance programs. 
The new sections implement the Human Resources Code, sec.sec.22.001-22.030 and 
sec.sec.31.001-31.0325. 

sec.3.7301. Workforce Orientation Requirements. 
Temporary Assistance for Needy Families (TANF). TANF adults and minor parents, 
age 16 through 59, living in a Job Opportunities and Basic Skills (JOBS) county, 
with TANF children, must comply with the requirement to attend a Workforce 
Orientation presented by the Texas Workforce Commission. 

sec.3.7302. Exceptions to the Workforce Orientation Requirements. 
Temporary Assistance for Needy Families (TANF). An individual applying for or 
receiving TANF is not required to attend a Workforce Orientation presented by 
the Texas Workforce Commission if the individual: 
(1) is too remote from the orientation site. "Too remote" is defined as the 
distance from the applicant's home to the orientation if it: 
(A) requires commuting time of more than one hour one way (not including taking 
a child to and from a child care facility); or 
(B) prohibits walking and transportation is not available;
(2) claims to be incapacitated; 
(3) is a child age 16, 17, or 18, and enrolled in school;
(4) is age 60 or older; 
(5) is needed in the home to care for an incapacitated child or adult; 
(6) is caring for a child under four months of age; 
(7) is employed and working 30 hours or more a week at minimum wage or earning 
the equivalent of 30 hours a week at minimum wage;
(8) has an open Job Opportunities and Basic Skills (JOBS) case; 
(9) claims to be a victim of domestic violence and will be in danger if required 
to comply; or 
(10) is attending school or training and their schedule conflicts with all 
available orientation sessions. 

sec.3.7303. Failure to Comply. 
If a caretaker or second parent who is required to attend a Workforce 
Orientation as specified in sec.3.7301(a) of this title (relating to Workforce 
Orientation Requirements) refuses or fails to comply, then the application or 
case will be denied. If a client age 16, 17, or 18, certified as a child, and 
required to attend the Workforce Orientation refuses or fails to comply, then 
the child will be disqualified from Temporary Assistance for Needy Families 
(TANF). 
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 10, 1997.
TRD-9714992
Glenn Scott
General Counsel, Legal Services
Texas Department of Human Services
Effective date: December 1, 1997
Proposal publication date: September 5, 1997
For further information, please call: (512) 438-3765

CHAPTER 40.Medicaid Managed Care
SUBCHAPTER A.Star+Plus
40 TAC sec.sec.40.101, 404.103, 40.105
The Texas Department of Human Services (DHS) adopts new sec.40.103 in its new 
Medicaid managed care chapter with changes to the proposed text as published in 
the September 12, 1997, issue of the Texas Register (22 TexReg 9229). New 
sec.40.101 and sec.40.105 are adopted without changes to the proposed text and 
will not be republished. Justification for the new sections is to provide more 
comprehensive and cost-effective long term care for Medicaid clients in Harris 
County.
The new sections will function by governing the STAR+PLUS long term care managed 
care project in Harris County. 
The department received a comment from New Avenues of Hope, Inc., requesting 
clarification of excluded clients. The department has revised the language under 
sec.40.103(b)(4) to indicate that the Mental Health and Mental Retardation 
(MHMR) Home and Community-based Services (HCS) waiver clients and Home and 
Community based Services-OBRA (HCS-OBRA) waiver clients are excluded from 
participation in STAR+PLUS. Also, sec.40.103(b)(6) is revised to state that 
clients receiving services in residential MHMR facilities are excluded from 
STAR+PLUS participation. In sec.40.103(c) the department changed the name from 
"home and community-based services" to "MHMR HCS waiver services." 
The new sections are adopted under the Human Resources Code, Title 2, Chapters 
22 and 32, which authorizes the department to administer public and medical 
assistance programs, and under Texas Government Code sec.531.021, which provides 
the Health and Human Services Commission with the authority to administer 
federal medical assistance funds. 
The new sections implement the Human Resources Code, sec.sec.22.001-22.030 and 
sec.sec.32.001-32.042. 

sec.40.103. Client Participation. 
(a) All supplemental security income (SSI) and SSI-related clients and clients 
who qualify for Medicaid benefits as medical assistance only (MAO) clients must 
receive their Medicaid services through the STAR+PLUS pilot. Clients will have a 
choice among at least two Health Maintenance Organizations.
(b) SSI or SSI-related clients who are receiving services from the following 
programs are excluded from participation in STAR+PLUS:
(1) Frail Elderly waiver; 
(2) Community Living Assistance and Support Services (CLASS) waiver; 
(3) Deaf Blind Multiple Disabled waiver; 
(4) Mental Health/Mental Retardation (MHMR) Home and Community-based Services 
(HCS) waiver and Home and Community based Services-OBRA (HCS-OBRA) waiver; 
(5) Medically Dependent Children Program (MDCP) waiver; and 
(6) clients receiving services in residential MHMR facilities.
(c) SSI clients under 21 years of age, SSI clients receiving ongoing 
rehabilitative services through the local mental health authority, and SSI 
clients on the waiting list to receive MHMR HCS waiver services will have the 
option of STAR+PLUS participation or choosing the Primary Care Case Management 
Program for their acute care services and remaining fee-for-service for their 
long term care services. 
(d) The following clients may enroll in the pilot program, but are not required 
to do so: 
(1) clients who are living in a nursing facility at the time of implementation; 
and 
(2) clients who become Medicaid eligible only after 12 months in a nursing 
facility. 
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 4, 1997.
TRD-9714621
Glenn Scott
General Counsel, Legal Services
Texas Department of Human Services
Effective date: December 1, 1997
Proposal publication date: September 12, 1997
For further information, please call: (512) 438-3765

PART III. Texas Commission on Alcohol and Drug Abuse
CHAPTER 146.Approved Drug and Alcohol Driving Awareness Programs
General Provisions
40 TAC sec.sec.146.1-146.9
The Texas Commission on Alcohol and Drug Abuse adopts the repeal of 
sec.sec.146.1-146.9 concerning general provisions for approved drug and alcohol 
driving awareness programs, without changes to the proposed text as published in 
the September 26, 1997, issue of the Texas Register (22 TexReg 9648). 
These sections define terms used in this chapter and describe the objectives of 
the chapter, scope of the rules and standards, program certification application 
and approval process, program certification expiration and renewal process, 
uniform certificates of course completion, and provisions for denial, 
revocation, or nonrenewal of certification. 
The repeal is adopted because the commission is no longer administering this 
program. 
No comments were received regarding adoption of the repeal. 
The repealed sections are adopted under the Texas Health and Safety Code, 
sec.461.012(15), which provides the Texas Commission on Alcohol and Drug Abuse 
with the authority to adopt rules governing the functions of the commission, 
including rules that prescribe the policies and procedures followed by the 
commission in administering any commission programs. 
The code affected by the repealed sections is the Texas Health and Safety Code, 
Chapter 461. 
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 5, 1997.
TRD-9714645
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: November 25, 1997
Proposal publication date: September 26, 1997
For further information, please call: (512) 349-6609

Drug and Alcohol Driving Awareness Program Standards and Procedures
40 TAC sec.sec.146.25-146.36
The Texas Commission on Alcohol and Drug Abuse adopts the repeal of 
sec.sec.146.25-146.36 concerning program standards and procedures for approved 
drug and alcohol driving awareness programs, without changes to the proposed 
text as published in the September 26, 1997, issue of the Texas Register (22 
TexReg 9649). 
These sections describe the program purpose, content, admission criteria, 
operational requirements, discrimination prohibitions, provisions for 
participant complaints, and requirements for program administrators, 
instructors, classroom facilities, recordkeeping and reporting. These sections 
also state that the commission will maintain a listing of programs and has the 
right to monitor programs for compliance. 
The repeal is adopted because the commission is no longer administering this 
program. 
No comments were received regarding adoption of the repeal. 
The repealed sections are proposed under the Texas Health and Safety Code, 
sec.461.012(15), which provides the Texas Commission on Alcohol and Drug Abuse 
with the authority to adopt rules governing the functions of the commission, 
including rules that prescribe the policies and procedures followed by the 
commission in administering any commission programs. 
The code affected by the repealed sections is the Texas Health and Safety Code, 
Chapter 461. 
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 5, 1997.
TRD-9714646
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: November 25, 1997
Proposal publication date: September 26, 1997
For further information, please call: (512) 349-6609

PART IV. Texas Commission for the Blind
CHAPTER 162.Criss Cole Rehabilitation Center
The Texas Commission for the Blind adopts the repeal of sec.sec.162.1-162.5, 
pertaining to the operation of Criss Cole Rehabilitation Center, and 
simultaneously adopts new sec.sec.162.1-162.3 and sec.sec.162.10-162.22 without 
changes to the proposed text as published in the September 26, 1997, issue of 
the Texas Register (22 TexReg 9651). 
The adoption of the repeals allows the agency to adopt new sections that clarify 
the types of services offered at Criss Cole Rehabilitation Center, who may be 
referred to the Center for services, and how a consumer may appeal an action 
taken by the Commission in the administration of its services at the Center. 
Subchapter B, sec.sec.162.10-162.22, contains the Commission's new rules for 
conducting investigations of abuse, neglect, and exploitation in a facility 
operated by a state agency as required by Family Code, Chapter 261 (pertaining 
to the reporting and investigation of abuse or neglect of a child), and Human 
Resources Code, Chapter 48 (pertaining to the reporting and investigating of 
abuse, neglect, or exploitation of a consumer who is elderly or disabled). 
No comments were received regarding adoption of the repeals and new sections. 

40 TAC sec.sec.162.1-162.5
The repeals are adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the Commission to adopt rules prescribing the 
policies and procedures followed by the Commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714758
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: December 15,1997
Proposal publication date: September 26, 1997
For further information, please call: (512) 459-2611

SUBCHAPTER A.General Rules
40 TAC sec.sec.162.1-162.3
The new sections are adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the Commission to adopt rules prescribing the 
policies and procedures followed by the Commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714760
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: December 15, 1997
Proposal publication date: September 26, 1997
For further information, please call: (512) 459-2611

SUBCHAPTER B.Investigations of Abuse, Neglect, and Exploitation
40 TAC sec.sec.162.10-162.22
The new sections are adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the Commission to adopt rules prescribing the 
policies and procedures followed by the Commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714759
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: December 15,1997
Proposal publication date: September 26, 1997
For further information, please call: (512) 459-2611

CHAPTER 163.Vocational Rehabilitation Program
The Texas Commission for the Blind adopts the repeal of sec.sec.163.4, 163.10, 
163.11, 163.17, 163.28, 163.36, and 163.52 of Chapter 163, pertaining to the 
agency's administration of the vocational rehabilitation program, and 
simultaneously proposes the adoption of corresponding new sections. The repeals 
and new sections are adopted without changes to the proposed text as published 
in the October 3, 1997, issue of the Texas Register (22 TexReg 9870, et seq.).
The repeals are adopted to allow the agency to adopt new sections because the 
U.S. Secretary of Education has amended the regulations governing the State 
Vocational Rehabilitation Services Program to implement changes to the 
Rehabilitation Act of 1973. The new sections contain revised definitions used in 
the administration of the vocational rehabilitation program, application 
procedures, eligibility criteria, the conditions under which a persons case will 
be closed, a list of services allowed by federal law, the conditions under which 
a person receives services, including academic services, and the order in which 
persons will be served in the event the agency needs to implement an order of 
selection in times of limited funds. 
No comments were received regarding adoption of the repeals and new sections.

SUBCHAPTER A.General Information
40 TAC sec.163.4
The repeal is adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714799
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

The new section is adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714803
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

SUBCHAPTER B.Basic Program Requirements
40 TAC sec.sec.163.10, 163.11, 163.17
The repeals are adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714800
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

The new sections are adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714804
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

SUBCHAPTER C.Vocational Rehabilitation Services
40 TAC sec.163.28, sec.163.36
The repeals are adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714801
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

The new sections are adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714805
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

SUBCHAPTER D.Order of Selection for Services
40 TAC sec.163.52
The repeal is adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714802
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

The new section is adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714806
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

CHAPTER 163.Vocational Rehabilitation Program
The Texas Commission for the Blind adopts amendments to sec.sec.163.5, 163.12, 
163.13,163.15, 163.16, 163.18, 163.25, 163.26, 163.29, 163.30, 163.31-163.33, 
163.34, 163.37-163.39, 163.61, 163.62, and 163.65, pertaining to the agency's 
vocational rehabilitation program without changes to the proposed text as 
published in the October 3, 1997, issue of the Texas Register (22 TexReg 9870). 
The amendments are adopted in response to changes in federal regulations. The 
purpose of the amendments is to reduce possible misunderstandings by consumers 
and the public about services allowed under the Rehabilitation Act by conforming 
state language to federal language as much as possible. The amended sections all 
function as part of the agency's rules for the providing vocational 
rehabilitation services to eligible individuals. 
No comments were received regarding adoption of the amendments.

SUBCHAPTER A.General Information
40 TAC sec.163.5
The amendment is adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714761
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

SUBCHAPTER B.Basic Program Requirements
40 TAC sec.sec.163.12, 163.13, 163.15, 163.16, 163.18
The amendments are adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714762
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

SUBCHAPTER C.Vocational Rehabilitation Services
40 TAC sec.sec.163.25, 163.26, 163.29, 163.30, 163.31-163.34, 163.37-163.39
The amendments are adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714763
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611

SUBCHAPTER E.Consumer Participation in Cost of Services
40 TAC sec.sec.163.61, 163.62, 163.65
The amendments are adopted under Human Resources Code, Title 5, Chapter 91, 
sec.91.011(g), which authorizes the commission to adopt rules prescribing the 
policies and procedures followed by the commission in the administration of its 
programs. 
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 3, 1997.
TRD-9714764
Pat D. Westbrook
Executive Director
Texas Commission for the Blind
Effective date: November 26,1997
Proposal publication date: October 3, 1997
For further information, please call: (512) 459-2611