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 1. ADMINISTRATION PART XV. Health and Human Service Commission CHAPTER 355.Medicaid Reimbursement Rates SUBCHAPTER C.Reimbursement Methodology for Nursing Facilities 1 TAC sec.355.307, sec.355.401 The Health and Human Services Commission (HHSC) adopts amendments to sec.355.307, concerning reimbursement setting methodology for nursing facilities; and sec.355.401, concerning allowable and unallowable costs, in its Medicaid Reimbursement Rates chapter, without changes to the proposed text as published in the February 13, 1998, issue of the Texas Register (23 TexReg 1247). The text will not be republished. The purpose of the amendments is to allow nursing facilities to receive supplemental Medicaid reimbursement for children who qualify for the Texas Index for Level of Effort (TILE) heavy-care case mix classification and require daily care of a tracheostomy. Qualifying residents will be eligible to receive 60% of the total ventilator-dependent supplemental reimbursement. Children with tracheostomies who also are ventilator-dependent will not be eligible to receive both a ventilator-dependent and a tracheostomy supplemental reimbursement. The commission received no comments regarding the adoption of the amendments. The amendments are adopted under the Texas Government Code, Chapter 531, sec.531.033, which authorizes the Commissioner of Health and Human Services to adopt rules necessary to carry out the Health and Human Services Commission's duties under Chapter 531; and under Texas Government Code, sec.531.021, which provides the commission with the authority to administer federal medical assistance funds. The amendments implement Government Code, sec.531.021 and Human Resources Code sec.sec.32.001-32.042. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808815 Marina S. Henderson Executive Deputy Commissioner Health and Human Services Commission Effective date: June 21, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 424-6576 SUBCHAPTER E.Community Care for Aged and Disabled 1 TAC sec.sec.355.502-355.505 The Health and Human Services Commission adopts amendments to sec.355.502, concerning reimbursement methodology for the Community-based Alternatives (CBA) Program, sec.355.503, concerning reimbursement methodology for the CBA Program for 1997 and subsequent cost reports, sec.355.504, concerning reimbursement methodology for the Community Living Assistance and Support Services (CLASS) Waiver Program, and sec.355.505, concerning reimbursement methodology for the CLASS Program for 1997 and subsequent cost reports. Sections 355.502, 355.503 and 355.505 are adopted without changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1451). The text will not be republished. Section 355.504 is adopted with changes. The amendments to the CBA rules are adopted without change to the proposal as published in the Texas Register. The purpose of the CBA amendments is to eliminate the monthly fee paid to providers to obtain medical supplies and prescriptions for a recipient. No comments were received regarding these amendments. The amendments to the CLASS rules are adopted with one change to the proposal published in the Texas Register. The purpose of the CLASS amendments is to establish a methodology to determine the fee paid to reimburse a CLASS provider for staff costs in the acquisition of adaptive aids and minor home modifications for a recipient. The amendments also establish a methodology to determine the payment for reassessment of a recipient that is required by federal regulations codified at 42 C.F.R. sec.441.303(c). HHSC received the following written comments regarding the CLASS proposal from a representative of the Texas Assisted Technology Partnership and a representative of the ARC of Texas. Following each comment is the agency's response and any resulting change. Comment: Concerning sec.355.504(f), one commenter recommended that this section be amended to include how the requisition fee will be determined and two commenters requested clarification about whether the requisition fee would be applied to the participant's costs. Response: sec.355. 504(f) states that the requisition fee will be determined using a method based on modeled projected expenses which are developed by using data from surveys, cost report data from similar programs, consultation with other service providers and/or professionals experienced in delivering contracted services, and/or other sources. The requisition fee will be included as a cost to the participant's adaptive aid or minor home modification plan of care costs. Previously, a contracted provider's costs to arrange for adaptive aids and minor home modifications were applied to the participant's plan of care costs as habilitation units of service. HHSC is adopting this subsection without change. Comment: Concerning sec.355.504(f): One commenter asked what percentage of the cost of the item would make up the requisition fee. Response: The requisition fee will be determined using a method based on modeled projected expenses and not based solely on the percentage of the cost of the item. Requisition fees will be developed using data from surveys, cost report data from similar programs, consultation with other service providers and/or professionals experienced in delivering contracted services, and/or other sources. In accordance with sec.355.105(g), public hearings are held to allow an opportunity to comment on proposed requisition fee amounts. HHSC is adopting this subsection without change. Comment: Concerning sec.355.504(g): Two commenters stated it was not clear what activity the reassessment fee would cover and one commenter asked how the reassessment fee was to be paid. Response: As sec.355.504(g) states, the reassessment fee would be paid to the CLASS direct service agency contracted providers for performing annual reassessments. The annual reassessment is required by federal law and is performed annually by a Registered Nurse to assess the client's need for services and to determine if the participant's plan of care would need to be adjusted. The reassessment fee would be paid as a direct payment to the contracted provider after the reassessment has been completed. HHSC is adopting this subsection without change. Comment: Concerning sec.355.504(i)(4)(L): A commenter recommended that the language in this section be amended to make it clearer. Response: sec.355.504(i)(4)(L) was revised to add a comma for clarity. Revision: sec.355.504(i)(4)(L) Entertainment expenses, except those incurred for entertainment provided to the staff of the waiver provider as an employee benefit. These new sections are adopted pursuant to Texas Government Code sec.531.033, which authorizes the commissioner of health and human services to adopt rules necessary to carry out the commission's duties under chapter 531, under sec.531.021, which authorizes the commission to adopt reasonable rules and standards to govern the establishment of rates fees, and charges for medical assistance payments under Human Resources Code, Chapter 32. These new sections implement Texas Government Code, Chapter 531, sec.531.021 and Human Resources Code, Chapter 32, sec.32.028. sec.355.504.Reimbursement Methodology for the Community Living Assistance and Support Services Waiver Program - a 1915(c) Medicaid Home and Community-based Waiver for Persons With Related Conditions. (a) General requirements. Cost reports pertaining to providers' fiscal years ending in calendar year 1994, 1995, or 1996 will be governed by the information in this section, and the information in sec.355.201(b) of this title (relating to General Specifications and Methodology). (b)-(c) (No change.) (d) Waiver reimbursement determination methodology. (1)-(3) (No change.) (4) Reimbursement determination process. Recommended unit of service reimbursements are determined in the following manner. (A) Unit or service reimbursement for habilitation, nursing, physical therapy, occupational therapy, speech pathology, and psychological services are determined in the following manner: (i) Total allowable costs for each provider will be determined by analyzing the allowable historical costs reported on the cost report and other pertinent cost survey information. (ii) Total allowable costs are reduced by the amount of the administrative expense fee, requisition fee, and reassessment fee revenues accrued for the reporting period. (iii)-(vii) (No change.) (B)-(D) (No change.) (5) (No change.) (e) (No change.) (f) Requisition fees. Requisition fees are reimbursements paid to the CLASS direct service agency contracted providers for their efforts in acquiring adaptive aids and minor home modifications for CLASS participants. Reimbursement for adaptive aids and minor home modifications will vary based on the actual cost of the adaptive aid and minor home modification. Reimbursements are determined using a method based on modeled projected expenses which are developed by using data from surveys; cost report data from similar programs; consultation with other service providers and/or professionals experienced in delivering contracted services; and/or other sources. (g) Reassessment fees. Reassessment fees are reimbursements paid to CLASS direct service agency contracted providers for performing annual reassessments. Reimbursements are determined using a method based on modeled projected expenses which are developed by using data from surveys; cost report data from similar programs; consultation with other service providers and/or professionals experienced in delivering contracted services; and/or other sources. (h) Reporting requirements. The program director's full salary is to be reported on the line item of the cost report designated for the director. (i) Allowable and unallowable costs. (1) General. Allowable and unallowable costs are defined to identify expenses which are and are not reasonable and necessary to provide waiver services to clients by a prudent and cost-effective operation. Only allowable cost information is used to compile the reimbursement determination data base. Cost reporting by providers should be consistent with generally accepted accounting principles (GAAP). In cases where DHS cost reporting rules conflict with GAAP, IRS, or other authorities, DHS rules take precedence for cost reporting purposes. (2) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (A) Allowable costs. Those expenses that are reasonable and necessary in the normal conduct of operations relating to the provision of waiver services. (i) "Reasonable" refers to the amount expended. The test of reasonableness is that the amount expended does not exceed the cost which would be incurred by a prudent business operator seeking to contain costs. (ii) "Necessary" refers to the relationship of the cost to provision of waiver services. To qualify as a necessary expense, a cost must be one that is usual and customary in the operation of waiver services and must meet the following requirements. (I) The expenditure was not for personal or other activity not specifically related to the provision of waiver services. (II) The cost does not appear on the list of specific unallowable costs and is not unallowable under other federal, state, or local laws or regulations. (III) The cost bears a significant relationship to the provision of waiver services. The test of significance is whether elimination of the expenditure would adversely affect the delivery of waiver services. (IV) The expense was incurred in the purchase of materials, supplies, or services provided directly to the clients or staff of the program in the conduct of normal business operations. (iii) Normal conduct of operations relating to waiver services and the pre- enrollment assessment process includes, but is not limited to, the following: (I) The administrative expense fee covers reimbursement for the pre-enrollment assessment and care planning services. (II) Only direct contact with the client is considered allowable when recording pre-enrollment assessment and care planning time for each type of professional service. (III) Only costs associated with the pre-enrollment assessment and care planning of those clients seeking enrollment into the waiver program will be allowed. (IV) Expenses not used solely for the provision of waiver services and the pre- enrollment assessment. Whenever allowable costs are attributable partially to personal or other business interests not related to the provision of waiver services/pre-enrollment assessment and partially to waiver services/pre- enrollment assessment, the latter portion may be allowed on a pro rata basis if the proportion of use by the waiver services/pre-enrollment assessment is well- documented. (V) Allowable costs for cost reporting purposes should result from arms-length transactions involving unrelated parties. However, in related-party transactions the allowable cost to the waiver services program is limited to the lesser of the actual cost to the related party (excluding markups and profit margins) or the cost to the contracted waiver service provider. Such allowable cost must not exceed the usual and customary charges for comparable goods or services in an arms-length transaction. A related party is a natural person or organization related to the provider entity by blood/marriage, or common ownership, or any association which permits either entity to exert power or influence, either directly or indirectly, over the other. (B) Unallowable costs. Those expenses that are not reasonable or necessary for the provision of waiver services and the pre-enrollment assessment. Unallowable costs are not included in the data base used to determine recommended reimbursements and fees. (3) List of Allowable Costs. The following list of allowable costs is not comprehensive, but rather serves as a general guide and identifies certain key expense areas. The absence of a particular cost does not necessarily mean that it is not an allowable cost. (A) Compensation of waiver services staff. Compensation will be given only to those staff who provide waiver services directly to the clients or in support of staff of the waiver services program in the normal conduct of operations relating to the provision of waiver services. This includes: (i) Wages and salaries. (ii) Payroll taxes and insurance. Federal Insurance Contributions Act (FICA or social security), unemployment compensation insurance, workman's compensation insurance. (iii) Employee benefits. Employer-paid health, life, accident, liability, and disability insurance for employees; contributions to employee retirement fund; and deferred compensation limited to the dollar amount the employer contributes. The expense: (I) must represent a clearly enumerated liability of the employer to individual employees; (II) must not be incurred as a benefit to employees who do not provide services directly to the clients or staff of the waiver services program; and (III) must not represent any form of profit sharing. (B) Compensation of staff outside of the waiver program who provide services directly to the clients or in support of staff of the program. Allowable compensation is limited to the pro rata portion of the actual working time spent on behalf of the program. (C) Compensation of outside consultants providing services directly to the clients or in support of staff of the program. (D) Materials and supplies. This includes office supplies, housekeeping supplies, medical, and other supplies. (E) Utilities. This includes electricity, natural gas, fuel oil, water, waste water, garbage collection, telephone, and telegraph. (F) Buildings, equipment, and capital expenses. Buildings, equipment, and capital used by the waiver provider or in support of the waiver services staff, and not for personal business. If these costs are shared with other program operations, the portion of the costs relating directly to waiver services may be allowed on a pro rata basis if the proportion of use for waiver services is documented. (G) Depreciation and amortization expense. Property owned by the provider entity and improvements to owned, leased, or rented property used by the waiver provider that are valued at more than $500 at the time of purchase must be depreciated or amortized using the straight line method. The minimum usable lives to be assigned to common classes of depreciable property are as follows: (i) buildings: 30 years, with a minimum salvage value of 10%; and (ii) transportation equipment used for the transport of clients, materials and supplies, or staff providing waiver services: a minimum of three years for passenger automobiles and five years for light trucks and vans, all with a minimum salvage value of 10%. (H) Provider-owned property. Property owned by the provider entity and improvements to property owned, leased, or rented by the provider that are valued at less than $500 at the time of purchase may be treated as ordinary expenses. (I) Rental and lease expense. This includes rental and lease expenses for buildings, building equipment, transportation equipment, other equipment, related materials, and supplies used by the waiver provider. Rental or lease expense paid to a related party is limited to the actual allowable cost incurred by the related party. (J) Transportation expense. This includes the cost of public transportation or mileage claimed at the allowable reimbursement per mile set by the state legislature for state employees. (K) Interest expense. Interest expense is allowable on loans for the acquisition of allowable items, subject to: (i) all of the requirements for allowable costs, (ii) written evidence of the loan, and (iii) the provider entity being named as maker or comaker of the note. Allowable interest is limited to the lesser of the cost to the related party or the prevailing national average prime interest rate for the year in which the loan contract was executed. (L) Tax expense. This includes real and personal property taxes, motor vehicle registration fees, sales taxes, Texas corporate franchise taxes, and organization filing fees. (M) Insurance expense. This includes facility fire and casualty, professional liability and malpractice, and transportation insurance. (N) Contract waiver services provided by outside vendors to persons with related conditions. (O) Business and professional association dues limited to associations devoted primarily to the issues of related conditions. (P) Outside training costs. This is limited to direct costs (transportation, meals, lodging, and registration fees) for training provided to personnel rendering services directly to the clients or staff of the waiver provider. The training must be directly related to issues concerning related conditions and located within the continental United States. (4) List of unallowable costs. Unallowable costs are those expenses that are not reasonable or necessary for the provision of waiver services. Unallowable costs are not included in the reimbursement determination data base used to determine recommended reimbursements. The following list is not intended to be comprehensive, but rather to serve as a general guide and identify certain key expense areas that are not allowable. The absence of a particular cost does not necessarily mean that it is an allowable cost. (A) Compensation in the form of salaries, benefits, or any form of compensation given to individuals who do not provide waiver services either directly to clients or in support of staff; (B) Personal expenses not directly related to the provision of waiver services; (C) Client room and board expenses, except for those related to respite care; (D) management fees paid to a related party that are not derived from the actual cost of materials, supplies, or services provided directly to the program; (E) Advertising expenses other than those for yellow pages advertising, advertising for employee recruitment, and advertising to meet any statutory or regulatory requirement; (F) Business expenses not directly related to the provision of waiver services; (G) Political contributions; (H) Depreciation and amortization of unallowable costs. This includes amounts in excess of those resulting from the straight line depreciation method, capitalized lease expenses in excess of the actual lease payment, and goodwill or any excess above the actual value of the physical assets at the time of purchase; (I) Trade discounts of all types. This includes returns, allowances, and refunds; (J) Donated facilities, materials, supplies, and services, including the values assigned to the services of unpaid workers and volunteers; (K) Dues to all types of political and social organizations, and to professional associations not directly and primarily concerned with the provision of waiver services; (L) Entertainment expenses, except those incurred for entertainment provided to the staff of the waiver provider as an employee benefit; (M) Boards of directors' fees; (N) Fines and penalties for violations of regulations, statutes, and ordinances of all types; (O) Fund raising and promotional expenses; (P) Expenses incurred in the purchase of goods and services with revenues from gifts, donations, endowments, and trusts; (Q) Interest expenses on loans pertaining to unallowable items and on that portion of interest paid which is reduced or offset by interest income; (R) Insurance premiums pertaining to items of unallowable cost; (S) Accrued expenses that are not a legal obligation of the provider or are not clearly enumerated as to dollar amount. This includes any form of profit sharing and the accrued liabilities of deferred compensation plans; (T) Planning and evaluation expenses for the purchase of depreciable assets, except where purchases are actually made and the assets are put into service in providing waiver services; (U) Mileage expense which exceeds the current reimbursement rate set by the Texas Legislature for state employee travel or expenses exceeding actual cost of public transportation; (V) Costs of purchases from a related party which exceed the original cost to the related party; (W) Out-of-state travel expenses, except for provision of waiver services that may include training and quality assurance functions; (X) Legal and other costs associated with litigation between a provider and state or federal agencies, unless the litigation is decided in the provider's favor; (Y) Contributions to self-insurance funds which do not represent payments based on current liabilities; (Z) Any expense incurred because of imprudent business practices; (AA) Expenses which cannot be adequately documented; (BB) Expenses not reported according to the instructions on the cost report; (CC) Expenses not allowable under other pertinent federal, state, or local laws and regulations; and (DD) Federal, state, and local income taxes and any expenses related to preparing and filing income tax forms. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808812 Marina S. Henderson Executive Deputy Commissioner Health and Human Services Commission Effective date: June 21, 1998 Proposal publication date: February 20, 1998 For further information, please call: (512) 424-6576 CHAPTER 371.Medicaid Fraud and Abuse Program Integrity SUBCHAPTER E.Operating Agency Responsibilities 1 TAC sec.371.1000 The Health and Human Services Commission adopts new sec.371.1000, concerning the re-enrollment of providers or the modification of existing contracts between providers and the state in the Medicaid program. Section 371.1000 is adopted without changes to the proposed text as published in the April 17, 1998, Texas Register (23 TexReg 16). The text will not be republished. Senate Bill 30 directs the Health and Human Services Commission to develop a new provider contract for health care services. The new contract is to contain provisions designed to strengthen the Health and Human Services Commission's ability to prevent provider fraud under the Medicaid program. After the new provider contract is developed, Senate Bill 30 directs the Health and Human Services Commission and each agency operating part of the state Medicaid program to re-enroll each provider who enrolled in the Medicaid program before completion of the new contract under the new contract or to modify the provider's existing contract to comply with the requirements of the new provider contract. The new rule is the first step in implementing this legislative mandate. No comments were received on the new section as proposed. The new rule is adopted under the Texas Government Code, Chapter 531, sec.531.033, which authorizes the Commissioner of Health and Human Services to adopt rules necessary to carry out the Health and Human Services Commission's duties under Chapter 531; and under Texas Government Code sec.531.021, which provides the commission with the authority to administer federal medical assistance funds. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808814 Marina S. Henderson Executive Deputy Commissioner Health and Human Services Commission Effective date: June 21, 1998 Proposal publication date: April 17, 1998 For further information, please call: (512) 424-6576 TITLE 16. ECONOMIC REGULATION PART II. Public Utility Commission of Texas CHAPTER 22. Practice and Procedure SUBCHAPTER B. Organization of the Commission 16 TAC sec.22.22 The Public Utility Commission of Texas adopts an amendment to sec.22.22, relating to Service on the Commission, without changes to the proposed text as published in the March 20, 1998 Texas Register (23 TexReg 2930). The amendment is necessary to clarify commission policy and procedures regarding the position of secretary of the commission. This amendment was adopted under Project Number 17709. The commission received no comments on the proposed amendment. This amendment is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 and sec.14.052 (Vernon 1998) which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules of practice and procedure. Cross Index to Statutes: Public Utility Regulatory Act sec.14.002 and sec.14.052. 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. Filed with the Office of the Secretary of State on May 29, 1998. TRD-9808699 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 18, 1998 Proposal publication date: March 20, 1998 For further information, please call: (512) 936-7308 SUBCHAPTER E.Pleadings 16 TAC sec.22.71 The Public Utility Commission of Texas adopts an amendment to sec.22.71, relating to Filing of Pleadings and Other Materials, without changes to the proposed text as published in the April 3, 1998 Texas Register (23 TexReg 3408). The amendment is necessary to assure that the commissioners have adequate time to fully review all documents necessary to conduct an open meeting. This amendment was adopted under Project Number 18893. The commission received comments on the proposed amendment from Houston Lighting & Power Company (HL&P). HL&P expressed concern that if General Counsel files documents for the first time related to a matter to be considered at the open meeting, parties would have no chance to respond if the seven day deadline is enforced without exception. HL&P stated that while the General Counsel's position and recommendation is important, it is also valuable for the commission to hear how a proposal affects the utilities and other interested parties that would be required to implement the proposal, if passed. HL&P suggested that the proposal be modified to allow an automatic waiver of the seven day rule if General Counsel files a document in a matter nine days before the open meeting in which it is to be addressed. The commission declines to make the change suggested by HL&P. The commission finds that the exceptions established in sec.22.71(h)(2) are sufficient to protect the interests of the utilities and other parties. This amendment is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 and sec.14.052 (Vernon 1998) which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules of practice and procedure. Cross Index to Statutes: Public Utility Regulatory Act sec.14.002 and sec.14.052. 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. Filed with the Office of the Secretary of State on May 26, 1998. TRD-9808541 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 15, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 936-7308 CHAPTER 23. Substantive Rules SUBCHAPTER D. Certification 16 TAC sec.sec.23.34-23.37 The Public Utility Commission of Texas (PUC) adopts the repeals of sec.sec.23.34 relating to Integrated Resource Planning; 23.35 relating to Preliminary Integrated Resource Plan; 23.36 relating to Solicitation of Resources; and 23.37 relating to Approval of Resources Procured Through Solicitation, without changes to the proposed text as published in the February 27, 1998 Texas Register (23 TexReg 1768). The repeals are necessary to eliminate duplicative rules. The commission has adopted new sec.sec.25.161 - 25.171 relating to Electrical Planning, which replace sec.sec.23.34 - 23.37. Project Number 17709 is assigned to this proceeding. The commission received no comments on the proposed repeals. These repeals are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission 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 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. Filed with the Office of the Secretary of State on May 28, 1998. TRD-9808668 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 17, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 936-7308 SUBCHAPTER E. Customer Service and Protection 16 TAC sec.23.47 The Public Utility Commission of Texas (PUC) adopts the repeal of sec.23.47, relating to Meters, without changes to the proposed text as published in the March 27, 1998 Texas Register (23 TexReg 3144). The repeal is necessary to eliminate duplicative rules. The commission has adopted new sec.sec.25.121 - 25.128 relating to Metering, which replace sec.23.47. This repeal was adopted under Project Number 18894. The commission received no comments on the proposed repeal. This repeal is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission 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 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. Filed with the Office of the Secretary of State on May 22, 1998. TRD-9808498 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 11, 1998 Proposal publication date: March 27, 1998 For further information, please call: (512) 936-7308 16 TAC sec.23.59 The Public Utility Commission of Texas adopts the repeal of sec.23.59, relating to Nuclear Decommissioning Trusts, without changes to the proposed text as published in the March 20, 1998 Texas Register (23 TexReg 2931). The repeal is necessary to avoid duplicative rule sections. The commission has adopted sec.25.301 of this title (relating to Nuclear Decommissioning Trusts) to replace sec.23.59. This repeal is adopted under Project Number 17709. The commission received no comments on the proposed repeal. This repeal is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission 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. 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. Filed with the Office of the Secretary of State on May 29, 1998. TRD-9808694 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 18, 1998 Proposal publication date: March 20, 1998 For further information, please call: (512) 936-7308 SUBCHAPTER F. Quality of Service 16 TAC sec.23.62 The Public Utility Commission of Texas (PUC) adopts the repeal of sec.23.62, relating to Electric Utilities, without changes to the proposed text as published in the March 27, 1998 Texas Register (23 TexReg 3145). The repeal is necessary to eliminate duplicative rules. The commission has adopted new sec.sec.25.121 - 25.128 relating to Metering and new sec.25.51 relating to Power Quality, which replace sec.23.62. This repeal was adopted under Project Number 18894. The commission received no comments on the proposed repeal. This repeal is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission 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 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. Filed with the Office of the Secretary of State on May 22, 1998. TRD-9808499 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 11, 1998 Proposal publication date: March 27, 1998 For further information, please call: (512) 936-7308 SUBCHAPTER G. Solar Standards 16 TAC sec.23.81 The Public Utility Commission of Texas adopts the repeal of sec.23.81, relating to Certification of Solar Collectors, without changes to the proposed text as published in the March 20, 1998 Texas Register (23 TexReg 2931). The commission adopted sec.23.81 to set certification standards for solar collectors that would be eligible for tax exemptions in accordance with Texas Tax Code sec.151.325. In 1987 sec.151.325 was repealed by Acts 1987, 70th Legislature, 2nd C.S., ch. 5, art. 1, pt. 4, sec.37, making sec.23.81 no longer necessary. The commission received no comments on the proposed repeal. This repeal is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission 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. 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. Filed with the Office of the Secretary of State on May 29, 1998. TRD-9808695 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 18, 1998 Proposal publication date: March 20, 1998 For further information, please call: (512) 936-7308 SUBCHAPTER H. Telephone 16 TAC sec.23.100 The Public Utility Commission of Texas adopts the repeal of sec.23.100, relating to Electronic Publishing, without changes to the proposed text as published in the March 20, 1998 Texas Register (23 TexReg 2932). The repeal is necessary to avoid duplicative rule sections. The commission has adopted sec.26.161 of this title (relating to Electronic Publishing) to replace sec.23.100. This repeal is adopted under Project Number 17709. The commission received no comments on the proposed repeal. This repeal is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission 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. 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. Filed with the Office of the Secretary of State on May 29, 1998. TRD-9808696 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 18, 1998 Proposal publication date: March 20, 1998 For further information, please call: (512) 936-7308 CHAPTER 25. Substantive Rules Applicable to Electric Service Providers SUBCHAPTER C. Quality of Service 16 TAC sec.25.51 The Public Utility Commission of Texas (PUC) adopts new sec.25.51, relating to Power Quality, with changes to the proposed text as published in the March 27, 1998 Texas Register (23 TexReg 3145). The rule is necessary to replace corresponding sec.23.62(f), (g) and (h) of this title (relating to Electric Utilities). The new section will establish minimum requirements for voltage and frequency variation, harmonics and power quality. This new rule was adopted under Project Number 17294. The commission received written comments on the proposed rule from the following listed six parties: CSW companies (CSW) comprised of Central Power and Light Company, Southwestern Electric Power Company, and West Texas Utilities Company, El Paso Electric Company (EPEC), Enron Energy Services (EES), Houston Lighting & Power Company (HL&P), South Texas Electric Cooperative and member cooperatives (STEC), and Texas Utilities Electric Company (TUEC). No party filed replies to these comments. EES supports the rule and recognizes the requirements set out in the rules as accepted national industry standards. EES commented that as an energy service provider in a competitive retail market, it would not own or have the authority to test utility equipment. EPEC had no substantive concerns with the rule and noted that the rule reflects widely accepted industry code standards and other practices to which EPEC currently adheres. CSW suggested the following additional language to sec.25.51 to clarify compliance aspects of the proposed standards: "All new facilities shall be designed, constructed, operated, and maintained so as to comply with the standards or rules in effect at the time of construction. For pre-existing facilities, compliance with voltage, frequency, or harmonic standards or rules shall not require the rebuilding of significant portions of the utility's system unless a materially adverse consequence to customers develops as a result of non-compliance on those portions of the system." HL&P requested that as industry standards, such as IEEE 519-1992, are revised, such revisions would not constitute non-compliance with the proposed rule. One public benefit of the proposed rule is to ensure a minimum quality of service for consumers of electric power as it relates to voltage, harmonics, and frequency standards. The American National Standards Institute (ANSI) Standard C84.1-1995 named in the proposed rule promotes standardization of nominal voltages and ranges of voltage variations for operating systems; the Institute of Electrical and Electronics Engineers (IEEE) Standard 519-1992 provides to utilities and consumers recommended practices and requirements for harmonic control in electrical power systems, and IEEE Standard 1159-1995 provides a recommended practice for monitoring of electric power quality of single-phase and polyphase alternating current power systems. The commission intends that utilities will continue to satisfy the ANSI and IEEE standards in the rule as revised in the future by the industry; therefore, facilities would not be grandfathered in the future. While rebuilding of significant portions of a utility's system in order to comply with the rule as a result of changing industry standards is not foreseen at this time, if any such significant rebuilding were required to comply with the rule, exceptions would be given serious consideration by the commission. The commission believes no additional language regarding compliance policy should be included and that any major impact to utilities resulting from compliance with a revision of one of the standards in the rule must be addressed by the commission on a case-by-case basis. In regard to sec.25.51(a)(1), STEC stated that the language of this subsection could be interpreted to mean that each utility would be required to make available all of the nominal voltages listed in ANSI Standard C84.1. The commission recognizes the need to clarify the intent of the subsection and revises the language to indicate that in addition to the nominal voltages already adopted by a utility, each nominal voltage adopted by a utility after approval of this rule shall be a voltage indicated by the version of ANSI C84.1, or equivalent ANSI standard as later amended, in effect at the time of adoption of the nominal voltage. In regard to sec.25.51(a)(1), TUEC suggested that the last sentence of this subsection should be amended to read, "A utility may adopt different nominal voltages to serve specific customers if such action does not compromise prudent transmission and distribution system operation." The commission agrees that the words "transmission and" are appropriate additions in the last sentence of sec.25.51(a)(1) and adds these words to extend the statement to include transmission nominal voltages as well as distribution nominal voltages. In regard to sec.25.51(a)(2), CSW suggested the following additions (italicized): "So far as technologically and economically practicable, each utility shall maintain its standard distribution system nominal steady-state voltages within the limits specified in the current version of ANSI Standard C84.1, or equivalent ANSI standard as later amended. Variations in distribution system voltage in excess of the limits specified in ANSI C84.1 and transmission voltage in excess of plus or minus 10% caused by action of the elements and infrequent and unavoidable fluctuations of short duration due to station or system operation (nonsteady-state events) shall not be considered violations of this subsection." By adding "and economically" suggested by CSW in the first sentence above, many utility customers, especially those in rural areas, could potentially be subjected to voltage variations outside the limits of ANSI C84.1, if, in the utility's judgment, it was not economically practicable for the utility to maintain voltages within such limits. The commission believes that this suggestion is not acceptable, as it could result in less than a minimum quality of service to some utility customers. The commission believes that the use of the terms "steady-state" and "nonsteady- state" in the first and last sentences of CSW's suggestion above are unnecessary, because ANSI C84.1 clearly states that nominal voltage applies to sustained voltage levels and not to momentary voltage excursions that may result from switching operations and motor starting currents. In regard to sec.25.51(a)(2), HL&P stated that some customers that receive transmission voltages choose to forego regulation equipment if their loads can tolerate the plus or minus 10% required by the proposed rule. HL&P suggested deletion of "regulation equipment" in the second sentence of this subsection. The commission agrees that the second sentence of sec.25.51(a)(2) need not include "and regulation" in order to express the intent for the utility to maintain transmission voltages plus or minus 10% of its adopted nominal voltages and revises the sentence to reflect the deletion of the words. CSW suggested that at the beginning of sec.25.51(c) on harmonics, the following language be inserted: "In general, harmonics are produced by customer equipment and injected into the utility power system." The commission believes that the addition of the above language is unnecessary. As the party responsible for detecting and investigating problems caused by excessive harmonics levels on the utility's system, the utility understands that in many instances, a customer's equipment does indeed produce excessive harmonics, and in other instances, a particular electrical relationship may occur between the utility's equipment and harmonic current resulting in significant voltage distortion and magnification of harmonic currents. The customer only knows that a problem exists, which may or may not originate in the utility's system. The utility will be expected to inform the customer of the nature of the problem, the progress of the utility's investigation of the customer's complaint, the utility's identification of the origin of the problem, and correction of the problem. CSW suggested significant additions to sec.25.51(c) to cover the process of investigating harmonics problems and the assignment of responsibility for actual costs required for investigation and for curative measures. CSW's process included curative action by the customer and ultimately disconnecting the customer who does not take curative action to reduce the excessive harmonics or disconnect the equipment producing the harmonics. CSW's suggested process included dealing with the instance in which two or more harmonic producing loads whose individual harmonic levels are within the limits of IEEE 519 but whose sum is a level in excess of the limits of IEEE 519. HL&P commented that harmonics occurred relatively infrequently and primarily on a localized basis and listed some customer equipment types that are sources of harmonics. HL&P suggested additions to sec.25.51(c) which outlined a step process for resolving customer caused harmonic problems. HL&P's step process dealt with complaint investigation, notifying the customer with harmonic producing loads and assisting him by identifying curative steps, jointly setting a timetable for corrective action, authorizing the utility to take curative steps and disconnect the customer who took no action to resolve its harmonics problem. HL&P's process also dealt with the responsibility for the costs involved. STEC stated that although STEC and the member distribution cooperatives have had few, if any, problems concerning these issues in the past, they recognize that such problems may be more apt to occur in the future because of the proliferation of solid state switching devices, the increased reliance by customers on sensitive technical equipment, and the proposed changes in the structure of the electric industry. STEC expressed in its comments that its member distribution cooperatives believe that the customer who causes a harmonic problem should pay the costs of the identification and analysis of the problem as well as any remedial action that the utility must take. STEC urged the commission to allow the generation and transmission (G&T) cooperative to perform the investigation and analysis of any harmonic and power quality problem occurring on one of its member distribution cooperative's system. TUEC suggested that the second sentence of sec.25.5(c) be revised to read (new language is in italics and enclosed in braces; deleted language is non- italicized and enclosed in braces), "Each utility shall assist every customer {whose facilities are causing electric utility system}{with}problems {potentially} arising from harmonics." TUEC suggested that the fourth sentence of the subsection be revised to read, "Each utility is responsible for correcting any {excessive harmonic conditions} {power quality problem} originating from facilities it owns or for which it is otherwise responsible." TUEC suggested that the fifth sentence of the subsection be revised to read, "In addressing harmonics problems, the utility shall implement to the extent reasonably practicable and in conformance with prudent operations the practices outlined in IEEE Standard 519-1992, IEEE Recommended Practices and Requirements for Harmonic Control in Electric Power Systems, {or any successor IEEE standard}, {as well as such other similar codes and standards that are generally accepted by the industry}to the extent not inconsistent with law, including state and federal statutes, orders, and regulations, and applicable municipal regulations." The commission generally agrees with these comments and revises sec.25.51(c) to more clearly define the utility's process of investigating excessive harmonic complaints and to assign the cost responsibility of the utility and the cost responsibility of the customer whose equipment is causing problems. The commission requires that the full cost of solving a harmonics problem shall be directly assigned to the customer or utility whose equipment is causing the problem. The commission also revises sec.25.51(c) to include language that permits a retail distribution cooperative that is a member of a G&T to request assistance from the G&T in fulfilling any of the responsibilities described in this subsection, but assigns full responsibility to the member cooperative for fulfilling the subsection's requirements. This new rule is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; and specifically sec.31.001 and sec.32.001 which require the commission to regulate electric utility operations and services; sec.37.151 which requires certificate holders to provide continuous and adequate service in their service areas; sec.38.001 which requires electric utilities to furnish service, instrumentalities, and facilities that are safe, adequate, efficient, and reasonable; sec.38.002 which grants the commission authority to adopt just and reasonable standards, classifications, rules, or practices and electric utility must follow, and to adopt adequate and reasonable standards for measuring a condition, including quantity, quality, pressure, and initial voltage, relating to the furnishing of a service; and sec.38.071 which grants the commission authority to order an electric utility to provide specified improvements in its service in a specified area if requiring the company to provide the improved service is reasonable. Cross Index to Statutes: Public Utility Regulatory Act sec.14.002, sec.31.001, sec.32.001, sec.37.151, sec.38.001, sec.38.002 and sec.38.071. sec.25.51. Power Quality. (a) Voltage variation. (1) Standard nominal voltages to be adopted. In addition to the nominal voltages that each electric utility has already adopted, each nominal voltage adopted by an electric utility after approval of this rule shall be a voltage indicated by the version of the American National Standards Institute, Incorporated (ANSI) Standard C84.1, Electrical Power Systems and Equipment-Voltage Ratings (60Hz), or equivalent ANSI standard as later amended, in effect at the time of adoption of the nominal voltages. An electric utility may adopt different nominal voltages to serve specific customers if such action does not compromise prudent transmission and distribution system operation. (2) Nominal voltage limitations. So far as technologically practicable, each electric utility shall maintain its standard distribution system nominal voltages within the limits specified in the current version of ANSI Standard C84.1, or equivalent ANSI standard as later amended. Each electric utility offering service at transmission voltages to customers who have their own transformation equipment shall maintain such voltages within a range of plus or minus 10% of its adopted nominal voltages. Variations in distribution system voltage in excess of the limits specified in ANSI C84.1 and transmission system voltages in excess of plus or minus 10% caused by action of the elements and infrequent and unavoidable fluctuations of short duration due to station or system operation shall not be considered violations of this subsection. (b) Frequency variation. Each electric utility supplying alternating current shall adopt a standard frequency of 60 Hertz. This frequency shall be maintained within the limits stated in the current version of the North American Electric Reliability Council (NERC) operating manual, or succeeding NERC document that may subsequently replace the operating manual. (c) Harmonics. In 60 Hertz electric power systems, a harmonic is a sinusoidal component of the 60 Hertz fundamental wave having a frequency that is an integral multiple of the fundamental frequency. "Excessive harmonics," in this subsection, shall mean levels of current or voltage distortion at the point of common coupling between the electric utility and the customer outside the levels recommended in the IEEE standard referenced in paragraph (1) of this subsection. Each electric utility shall assist every customer affected with problems caused by excessive harmonics and customers affected in exceptional cases as described in paragraph (5) of this subsection. (1) Applicable standards. In addressing harmonics problems, the electric utility and the customer shall implement to the extent reasonably practicable and in conformance with prudent operation the practices outlined in IEEE Standard 519- 1992, IEEE Recommended Practices and Requirements for Harmonic Control in Electric Power Systems, or any successor IEEE standard, to the extent not inconsistent with law, including state and federal statutes, orders, and regulations, and applicable municipal regulations. (2) Investigation. After notice by a customer that it is experiencing problems caused by harmonics, or if an electric utility otherwise becomes aware of harmonics conditions adversely affecting a customer, the electric utility shall determine whether the condition constitutes excessive harmonics. If so, the electric utility shall investigate and determine the cause of the excessive harmonics. (3) Excessive harmonics created by customer. If an electric utility determines that a customer has created excessive harmonics that causes or are reasonably likely to cause another customer to receive unsafe, unreliable or inadequate electric service, the electric utility shall provide written notice to the customer creating excessive harmonics. The notice shall state that the utility has determined that the customer has created an excessive harmonics condition and that the utility has explained the source and consequences of the harmonics problem. The notice shall give the customer two options to cure the problem. (A) The electric utility may cure the problem by working on the customer's electric facilities at a mutually agreeable time and assess the repair costs to the customer. (B) The customer may elect to cure the problem at its option and its cost, but the remedy must occur within a reasonable time, which will be specified in the notice. (4) Failure of the customer to remedy the problem. Failure of the customer to remedy the problem may require the electric utility to disconnect the customer's service. The electric utility shall then remedy the excessive harmonics condition, or the electric utility may determine that the customer has remedied the condition within the time specified. In the event the customer refuses to allow the electric utility to remedy the problem and does not stop creating excessive harmonics within the time specified, the electric utility may disconnect the customer's service. Before disconnecting pursuant to this subsection, the electric utility must provide written notice of its intent to disconnect at least five working days before doing so, unless the customer grants the utility access to its electric facilities or ceases creating excessive harmonics. The electric utility may disconnect the customer five working days after providing the notice, unless the customer grants the electric utility access to its electric facilities or ceases creating excessive harmonics. (5) Excessive harmonics created by an electric utility or third party. If an electric utility determines that its operation or facilities, or the operations or facilities of a third party other than a customer, created excessive harmonics that causes or is reasonably likely to cause a customer to receive unsafe, unreliable or inadequate electric service, the electric utility shall remedy the excessive harmonics condition at the earliest practical date. (6) Excessive total harmonic distortion created by two or more harmonic sources within IEEE 519 limits. If, in its investigation of a harmonics problem, an electric utility determines that two or more customers' harmonic loads are individually within IEEE 519 limits but the sum of the loads are in excess of the IEEE 519 limits, the utility may require each customer to reduce its harmonic levels beyond the limits specified in IEEE 519. (7) Cost responsibility. (A) Customer-created excessive harmonics. Electric utilities that remedy a customer-created excessive harmonics condition shall assess that customer a fee for the investigation and repair of the condition. Where a customer has remedied the condition, the electric utility shall assess the customer a fee for investigating the problem. The electric utility shall charge all applicable fees if required to disconnect the customer. An electric utility fee for investigation and repair of customer-created excessive harmonics conditions must be reasonable under the circumstances, and shall equal the electric utility's actual costs incurred, including its reasonable administrative costs. (B) Electric utility-created and third party-created excessive harmonics. Each electric utility that created an excessive harmonics condition, or that investigated or remedied an excessive harmonics condition created by a third party other than a customer, must bear the costs incurred in investigating and remedying the condition, and shall not assess any fees to the affected customer. (8) Cooperatives. In fulfilling any of the responsibilities described in this subsection, a retail distribution cooperative that is a member of a generation and transmission (G & T) cooperative may request the G & T cooperative's assistance. The retail distribution cooperative bears full responsibility for ensuring that this subsection's requirements are fulfilled. (d) Power quality monitoring. Each electric utility shall provide, maintain, calibrate, and use appropriate power monitoring instruments to investigate power quality complaints from its customers and to determine the cause of disturbances and power quality problems on the utility's system. In addressing power quality monitoring, each electric utility shall implement to the extent reasonably practicable and in conformance with prudent operation the practices outlined in IEEE Standard 1159-1995, IEEE Recommended Practice for Monitoring Electric Power Quality, or any successor IEEE standard, to the extent not inconsistent with law, including state and federal statutes, orders, and regulations, and applicable municipal regulations. (e) Voltmeters and voltage surveys. (1) Voltmeters. Each electric utility shall provide, maintain, and use portable voltmeters for testing voltage regulation, and electric utilities serving more than 250 meters shall provide, maintain, and use one or more portable recording voltmeters. These instruments shall be of a type and capacity suited to the voltage supplied. (2) Voltage surveys. Each electric utility shall make a sufficient number of voltage surveys to adequately measure the character of service furnished its customers and to satisfy the commission of its compliance with the voltage requirements. Electric utilities having recording voltmeters shall keep at least one of these voltmeters in continuous service for the same purpose. 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. Filed with the Office of the Secretary of State on May 22, 1998. TRD-9808497 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 11, 1998 Proposal publication date: March 27, 1998 For further information, please call: (512) 936-7308 SUBCHAPTER F. Metering 16 TAC sec.sec.25.121-25.128 The Public Utility Commission of Texas (PUC) adopts new sec.25.121 relating to Meter Requirements; sec.25.122 relating to Meter Records; sec.25.123 relating to Meter Readings; sec.25.124 relating to Meter Testing; sec.25.125 relating to Adjustments Due to Meter Errors; sec.25.126 relating to Meter Tampering; sec.25.127 relating to Generating Station Meters, Instruments, and Records; and sec.25.128 relating to Interconnection Meters and Circuit Breakers with changes to the proposed text as published in the March 27, 1998 Texas Register (23 TexReg 3147). Project Number 18894 has been assigned to this proceeding. The new sections will replace sec.23.47 of this title (relating to Meters) and portions of sec.23.62 of this title (relating to Electric Utilities). The Appropriations Act of 1997, HB 1, Article IX, Section 167 (Section 167) requires that each state agency review and consider for readoption each rule adopted by that agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure Act). Such reviews shall include, at a minimum, an assessment by the agency as to whether the reason for adopting or readopting the rule continues to exist. The PUC held three workshops to conduct a preliminary review of its rules. As a result of these workshops, the PUC is reorganizing its current substantive rules located in 16 Texas Administrative Code (TAC) Chapter 23 to (1) satisfy the requirements of Section 167; (2) repeal rules no longer needed; (3) update existing rules to reflect changes in the industries regulated by the commission; (4) do clean-up amendments made necessary by changes in law and commission organizational structure and practices; (5) reorganize rules into new chapters to facilitate future amendments and provide room for expansion; and (6) reorganize the rules according to the industry to which they apply. 16 TAC Chapter 25 has been established for all commission substantive rules applicable to electric service providers. As these new sections are adopted, the corresponding sections in Chapter 23 are repealed. The commission received written comments on the proposed new sections from Central and South West Corporation Electric Utility Operating Companies (CSW), and Enron Energy Services (EES), and reply comments from Houston Lighting & Power Company (HL&P). CSW expressed concern that the language "may not necessarily conform" in sec.25.121(c), as it relates to industry standards for special meters is "ambiguous and may create differences of opinion as to whether conformance is required." CSW suggested the language "[s]pecial meters used for investigation or experimental purposes are not required to conform to this requirement." The commission agrees with CSW that the language should be more clear and has modified CSW's suggested language to read "[s]pecial meters used for investigation or experimental purposes are not required to conform to these standards", subject to the need for special meter reporting. The commission has added a provision to sec.25.122 which requires utilities to keep a record of the purposes for which special meters are used. CSW commented that proposed sec.25.122(1) and proposed sec.25.87 of this title (relating to Distribution Unbundling Reports), require different information on meters. Proposed 25.122(1) requires each electric utility to keep a record of all its meters, showing the customer's address and the date of the last test. Proposed sec.25.87 requires that meter information concerning type, customer class, and rate schedule be kept in order to permit reporting of certain meter data. CSW suggested that the data for which record keeping is required should be specified in sec.25.122, while the subset of that data which is required to be reported periodically should be specified in sec.25.87. CSW states that this would serve to avoid potential confusion between the requirements of the two sections. The record keeping requirement in sec.25.122 is to ensure the accuracy of specific meters, while the reporting requirement in sec.25.87 is to allow the commission to monitor distribution unbundling. The proposed language in sec.25.87 would require utilities to indicate the number of meters in service at year end by customer class, rate schedule, and type of meter, and will be used to monitor distribution unbundling. The commission believes that the reporting of aggregated meter information may be considered separately from the information related to the verification of the accuracy of its meters in service. The commission declines to make the change as suggested by CSW. CSW commented on sec.25.124(c)(2) as it relates to the $15 cap for testing of a residential meter. CSW advised that this cap has been in place since at least 1980 and that "cost studies suggest that the actual cost of meter testing is at least two or three times the outdated $15 cap." CSW believes a more cost-based approach is in order and suggest the language "...the utility may charge the customer a fee which represents the cost of the testing at a rate specified in the utility's approved tariffs." The commission agrees with CSW and has made the suggested change. CSW suggested that sec.25.127 concerning generating station meters, and sec.25.128 concerning interconnection meters be moved to either their own subchapter or to the subchapter on quality of service, since the these sections deal with metering instruments used for different purposes than those used to meter electric service to customers. CSW stated that such a separation would make it easier for any adjustments which might be necessary in the future to utilize ERCOT or SPP standards about such types of meters. Texas Register requirements will not allow the commission to move these sections to a different subchapter without withdrawing and republishing the sections. The commission declines to make the change at this time, but may reconsider this suggestion at a later date as the commission continues its efforts to reorganize its rules. EES states that these sections do not currently apply to non-utility energy providers that plan to offer metering services in a competitive retail market. However, EES urges the commission to include language that would be applicable in both today's regulated environment and in a competitive retail market. EES suggest that by changing "utility" to "utility or provider of retail electric services" or "metering services" as applicable, sec.sec.25.121 - 25.126 would be applicable today and not have to be further changed in the future. HL&P filed reply comments expressing concern that the change suggested by EES is inappropriate under current law. The commission believes that the notice of proposed changes to the metering rules is not adequate to support adoption of EES's suggested language. However, the commission recognizes that metering services may become competitive in the retail market of the future. The commission is in the process of developing its policy concerning unbundling of electric distribution facilities and functions in Project Number 16536, and its policy concerning unbundling of energy services in Project Number 19205. The commission has also changed the term "utility" to "electric utility" throughout these sections to clarify the sections as industry specific and to conform with the definitions of "utility" and "electric utility" found in the Public Utility Regulatory Act (PURA). The commission had invited specific comments regarding whether the reason for adopting the sections in Chapter 23 continues to exist in adoption the corresponding sections in the new chapter. The commission received no comments on this issue. The commission finds that the reason for adopting sec.23.47 and sec.23.62 continues to exist in adopting these corresponding sections in Chapter 25. These new sections are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission 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.25.121. Meter Requirements. (a) Use of meter. All electricity consumed or demanded by an electric customer shall be charged for by meter measurements, except where otherwise provided for by the applicable rate schedule or contract. (b) Installation. Unless otherwise authorized by the commission, each electric utility shall provide and install and shall continue to own and maintain all meters necessary for the measurement of electric energy to its customers. (c) Standard type. All meters shall be of a standard type which meets industry standards. Special meters used for investigation or experimental purposes are not required to conform to these standards. (d) Location of meters. (1) Meters and service switches in conjunction with the meter shall be installed in accordance with the latest revision of American National Standards Institute (ANSI), Incorporated, Standard C12 (American National Code for Electricity Metering), or other standards as may be prescribed by the commission, and will be readily accessible for reading, testing, and inspection, where such activities will cause minimum interference and inconvenience to the customer. (2) Customer shall provide, without cost to the electric utility, at a suitable and easily accessible location: (A) sufficient and proper space for installation of meters and other apparatus of electric utility; (B) meter board; (C) meter loop; (D) safety service switches when required; and (E) an adequate anchor for service drops. (3) All meters installed after the effective date of these rules shall be located as set forth in this section, provided that, where installations are made to replace meters removed from service, this section shall not operate to require any change in meter locations which were established prior to the effective date of these rules, unless the electric utility finds that the old location is no longer suitable or proper, or the customer desires that the location be changed. (4) Where the meter location on the customer's premises is changed at the request of the customer, or due to alterations on the customer's premises, the customer shall provide and have installed at his expense, all wiring and equipment necessary for relocating the meter. (e) Accuracy requirements. (1) No meter that violates the test calibration limits as set by the American National Standards Institute, Incorporated, shall be placed in service or left in service. Whenever on installation, periodic, or other tests, a meter is found to violate these limits, it shall be adjusted. (2) Meters shall be adjusted as closely as practicable to the condition of zero error. sec.25.122. Meter Records. Each electric utility shall keep the following records: (1) Meter equipment record. Each electric utility shall keep a record of all of its meters, showing the customer's address and date of the last test. For special meters used for investigation or experimental purposes, the record shall state the purpose of the investigation or experiment. (2) Records of meter tests. All meter tests shall be properly referenced to the meter record provided in paragraph (1) of this section. The record of each test made on customer's premises or on request of a customer shall show the identifying number and constants of the meter, the standard meter and other measuring devices used, the date and kind of test made, who conducted the test, the error (or percentage of accuracy) at each load tested, and sufficient data to permit verification of all calculations. sec.25.123. Meter Readings. (a) Meter unit indication. Each meter shall indicate clearly the kilowatt-hours or other units of service for which charge is made to the customer. (b) Reading of meters. As a matter of general practice, service meters shall be read at monthly intervals, and as nearly as possible on the corresponding day of each meter reading period, but may be read at other than monthly intervals if the circumstances warrant. (c) Customer - read program. If an electric utility has a customer-read program in which customers read their own meters and report their usage monthly, such readings shall be considered an actual meter reading by the electric utility for billing purposes. However, an electric utility shall read the meters of customers on a customer-read program at least every 12 months to verify the accuracy of the electric utility's records. sec.25.124. Meter Testing. (a) Meter tests prior to installation. No permanently installed meter shall be placed in service unless its accuracy has been established. If any permanently installed meter is removed from actual service and replaced by another meter for any purpose, it shall be properly tested and adjusted before being placed back in service unless such meter is monitored by a test program approved by the commission. (b) Testing of meters in service. Meter test periods for all types of meters shall conform to the latest edition of American National Standards Institute, Incorporated, (ANSI) Standard C12 unless specified otherwise by the commission. (c) Meter tests on request of customer. (1) Each electric utility shall, upon the request of a customer, test the accuracy of the customer's meter at no charge to the customer. The test shall be made during the electric utility's normal working hours and shall be scheduled to accommodate the customer or the customer's authorized representative, if the customer desires to observe the test. The test should be made on the customer's premises, but may, at the electric utility's discretion, be made at the electric utility's test laboratory. (2) If the meter has been tested by the electric utility, or by an authorized agency, at the customer's request, and within a period of four years the customer requests a new test, the electric utility shall make the test. However, if the subsequent test finds the meter to be within ANSI's accuracy standards, the electric utility may charge the customer a fee, which represents the cost of testing at a rate specified in the electric utility's approved tariffs. (3) Following the completion of any requested test, the electric utility shall promptly advise the customer of the date of removal of the meter, the date of the test, the result of the test, and who made the test. (d) Meter testing facilities and equipment. (1) Laboratory equipment. Each electric utility furnishing metered electric service shall, either with its own facilities or a standardizing laboratory of recognized standing, provide such meter laboratory, standard meters, instruments and other equipment and facilities as may be necessary to make the meter tests required by these rules. Such equipment and facilities shall generally conform to ANSI Standard C12, unless otherwise prescribed by the commission, and shall be available at all reasonable times for inspection by the commission's authorized representatives. (2) Portable test equipment. Each electric utility furnishing metered electric service shall provide portable test instruments for testing billing meters. (3) Reference standards. Each electric utility shall provide or have access to suitable indicating electrical instruments as reference standards for insuring the accuracy of shop and portable instruments used for testing billing meters. (4) Testing of reference standards. Reference standards of all kinds shall be submitted once each year or on a scheduled basis approved by the commission to a standardizing laboratory of recognized standing, for the purpose of test and adjustment. (5) Calibration of test equipment. All shop and portable instruments used for testing billing meters shall be calibrated by comparing them with a reference standard at least every 120 days during the time such test instruments are being regularly used. Test equipment shall at all times be accompanied by a certified calibration card signed by the proper authority, giving the date when it was last certified and adjusted. Records of certifications and calibrations shall be kept on file in the office of the electric utility. sec.25.125. Adjustments Due to Meter Errors. (a) If any meter is found to be not in compliance with the accuracy standards required by sec.25.121(e) of this title (relating to Meter Requirements), readings for the prior six months, or from the time the meter was in service since last tested, but not exceeding six months, shall be corrected and adjusted bills shall be rendered. (b) No refund is required from the electric utility except to the customer last served by the meter prior to the testing. (c) If a meter is found not to register for any period, unless bypassed or tampered with, the electric utility shall estimate and charge for units used, but not metered, for a period not to exceed three months. The estimated charge shall be based on amounts used under similar conditions during the period preceding or subsequent to the period the meter was found not to register, or during corresponding periods in previous years. sec.25.126. Meter Tampering. (a) For purposes of these sections, meter tampering, bypass, or diversion shall be defined as tampering with an electric utility company's meter or equipment, bypassing the same, or other instances of diversion, such as physically disorienting the meter; attaching objects to the meter to divert or bypass service; inserting objects into the meter; and other electrical and mechanical means of tampering with, bypassing, or diverting electrical service. (b) The burden of proof of meter tampering, bypass, or diversion is on the electric utility. Photographic evidence or any other reliable and credible evidence may be used; however, any evidence must be accompanied by a sworn affidavit by the electric utility when any action regarding meter tampering as provided for in these sections is initiated. A court finding of meter tampering may be used instead of photographic or other evidence, if applicable. Meter tampering is a criminal offense outside the jurisdiction of the Public Utility Commission. sec.25.127. Generating Station Meters, Instruments, and Records. (a) Generating station meters. Instruments and meters shall be installed and maintained at each generating station as may be necessary to obtain a record of the output as required, and to show the character of service being rendered from the generating station. (b) Record of station output and purchases of energy. Each electric utility shall keep a daily record of the load and a monthly record of the output of its plants. sec.25.128. Interconnection Meters and Circuit Breakers. (a) Each electric utility purchasing electric energy shall ensure that all instruments and meters are maintained as may be necessary to obtain full information as to purchases, unless this information is metered and furnished by the electric utility supplying the energy. (b) Record of automatic circuit breaker operations. Each electric utility shall keep monthly records of the number and cause, if known, of the operations of every automatic circuit breaker in service on its transmission and distribution systems. 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. Filed with the Office of the Secretary of State on May 22, 1998. TRD-9808500 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 11, 1998 Proposal publication date: March 27, 1998 For further information, please call: (512) 936-7308 SUBCHAPTER H. Electrical Planning 16 TAC sec.sec.25.161-25.171 The Public Utility Commission of Texas (PUC) adopts new sec.sec.25.161 relating to Integrated Resource Planning; 25.162 relating to Public Participation; 25.163 relating to Acquisition of Resources Outside the Solicitation Process; 25.164 relating to Statewide Integrated Resource Plan; 25.165 relating to Preliminary Integrated Resource Plan; 25.166 relating to Commission Review of a Preliminary Integrated Resource Plan that Does Not Include a Solicitation; 25.167 relating to Commission Review of a Preliminary Integrated Resource Plan that Includes a Solicitation; 25.168 relating to Solicitation of Resources; 25.169 relating to Approval of Resources Procured Through Solicitation; 25.170 relating to Hearing on the Final Integrated Resource Plan; and 25.171 relating to Certificate of Convenience and Necessity for Generation Facilities with changes to the proposed text as published in the February 27, 1998 Texas Register (23 TexReg 1768). These new sections are adopted in Chapter 25, Subchapter H, relating to Electrical Planning. Project Number 17709 has been assigned to this proceeding. These new sections will replace sec.sec.23.34 relating to Integrated Resource Planning; 23.35 relating to Preliminary Integrated Resource Plan; 23.36 relating to Solicitation of Resources; and 23.37 relating to Approval of Resources Procured Through Solicitation. These new sections will clarify electric utility requirements and commission procedures related to integrated resource planning, and establish rules that more accurately reflect commission policy. The Appropriation Act of 1997, HB 1, Article IX, Section 167 (Section 167) requires that each state agency review and consider for readoption each rule adopted by that agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure Act). Such reviews shall include, at a minimum, an assessment by the agency as to whether the reason for adopting or readopting the rule continues to exist. The PUC held three workshops to conduct a preliminary review of its rules. As a result of these workshops, the PUC is reorganizing its current substantive rules located in 16 Texas Administrative Code (TAC) Chapter 23 to (1) satisfy the requirements of Section 167; (2) repeal rules no longer needed; (3) update existing rules to reflect changes in the industries regulated by the commission; (4) do clean-up amendments made necessary by changes in law and commission organizational structure and practices; (5) reorganize rules into new chapters to facilitate future amendments and provide room for expansion; and (6) reorganize the rules according to the industry to which they apply. 16 TAC Chapter 25 has been established for all commission substantive rules applicable to electric service providers. The commission received comments from Central and South West Corporation Electric Utility Operating Companies (CSW), Texas Electric Cooperatives, Inc. (TEC), and Texas Utilities Electric Company (TUEC). No parties commented on whether the reason for adopting the rules continues to exist. The commission concludes that the reasons for adopting these rules in 1996 continue to exist and is readopting them with minor modifications. Section 25.161(g) relating to general guidelines for selecting resources. In its proposal the commission would remove the word "annual" in several places where it relates to the acquisition of demand-side resources other than through an all-source solicitation. CSW is uncertain as to the commission's intent, and CSW believes the proposed deletion will create further ambiguities without additional explanation of the commission's intent. CSW believes the proposed deletion should be construed to mean that the commission will allow either a periodic solicitation of demand-side resources, a standard offer performance contract approach, or both. The commission's proposed deletion will provide additional flexibility, especially if the existing regulations could be interpreted to limit an electric utility's demand-side management (DSM) acquisition to an annually-recurring event. The changed language will allow utilities to use standard-offer contracting for ongoing DSM acquisitions, for example. The commission will examine the merits of a periodic solicitation of demand-side resources, a standard-offer approach, or both, on a case-by-case basis. The commission agrees that flexibility is warranted, particularly as changes are occurring in the market for energy services generally, and in the provision of demand-side resources in Texas in particular. However, the commission has separately proposed new regulations that would allow electric utilities to administer the acquisition of demand-side resources. (Project Number 19205, relating to Unbundling of Energy Service.) The interpretation which CSW proposes is consistent with the commission'S energy service unbundling proposal and with the integrated resource planning (IRP) process set forth in the statute. The commission adopts the proposal as published. As a general principle, the commission believes that utilities should provide DSM to customers by acquiring those resources and programs through competitive means from the energy services market, rather than through traditional provision of such programs by utility employees and resources. If a utility or its affiliate wish to provide such programs, they must earn the right to do so through a fair and open competitive solicitation. Section 25.165(a)(2)(L) and sec.25.167(c)(14) concerning the resource solicitation schedule. In its proposal, the commission would make explicit the requirement that a utility file and receive commission approval of a schedule for the filing of contracts for resources to give the competitive bidding process more certainty. TUEC states that the proposal to require an electric utility to file a proposed date in its preliminary plan, and the proposal for the commission to adopt a specific date would reduce the flexibility necessary for utilities to negotiate contracts. TUEC states that it is inappropriate for an electric utility to be forced to meet an arbitrary date selected years ahead. TUEC requests that proposed sec.25.165(a)(2)(L) be changed to require an electric utility to file an "estimated" date in its preliminary plan, and that proposed sec.25.167(c)(14) be changed to require the commission to determine whether the estimated date is reasonable. The commission agrees that it is inappropriate to force an electric utility to meet an arbitrary date selected years ahead. Successful competitive bidding requires fair treatment of all bidders, and fair treatment may require regulatory oversight of the purchasing utility. However, integrated resource planning may not succeed if utilities have unlimited flexibility, and the ability to delay a resource solicitation process could be abused in a manner that could discourage bidding. A triennial review of resource need, followed by a timely, efficient acquisition of resources is appropriate. The commission's proposal would allow changes in the schedule for good cause if requested by an electric utility. The commission disagrees with TUEC's request to change the language in sec.25.165(a)(2)(L) and sec.25.167(c)(14) and adopts the language as published. Section 25.167(c)(13) concerning acquisition of resources outside the solicitation. In its proposal, the commission would make explicit the need for approval of an electric utility's three-year plan to acquire resources outside the solicitation process. TUEC states that this proposal creates a serious, substantive change in how utilities acquire resources, and the proposal inappropriately intermingles two processes that the Legislature designed to be separate. TUEC states that the Public Utility Regulatory Act (PURA) sec.34.151 was designed to address opportunities to acquire resources that might arise within a three-year IRP cycle. TUEC states that at worst the proposal could preclude the electric utility from acquiring resources in a manner anticipated by the Legislature. TUEC believes that approval of a "plan" to acquire resources could create a conflict with PURA sec.34.151(c), which allows resource additions without amendment of the IRP. TUEC argues that utilities must maintain flexibility to respond to market opportunities. The commission does not share TUEC's concerns in this regard. Section 34.151(b) permits a utility to acquire certain resources outside a solicitation, but the acquisitions must be consistent with the most recently-approved planning goals. The existing rules require an electric utility to project, to the extent known, its plans to acquire resources outside the solicitation process. For example, many utilities are active in the spot power market and several utilities with near-term resource needs are negotiating power contracts with terms ranging from several months up to two years. Utilities which anticipate an ongoing program for acquisition of short-term resources should report that activity to the commission. The proposal in sec.25.167(c)(13) states the commission will determine whether the electric utility's plan is reasonable. Similarly, the commission can determine whether a proposed activity is inconsistent with its regulations. The proposal will not inhibit any electric utility from taking actions specifically authorized by the statute. The commission adopts sec.25.167(c)(13) as published. Section 25.167(d) and sec.25.169(c) concerning commission action on a preliminary plan and filing requirements for a final plan. The commission has proposed the use of a separate docket number for the approval of any contract(s) for resources (or certification proceeding for generation facilities) and the adoption of the interim order on the preliminary plan as a final order at the time of contract approval (or certification). CSW states that it supports the additional language in concept; however, contract approval for different types of resources may occur at different times. CSW requests that the applicable portion of the interim order on the preliminary plan become a final order at the time of each contract approval proceeding. CSW supports a process which establishes a new docket number for the approval of contracts and finalizes that portion of the interim order that relates to those contracts. The commission believes that CSW's proposed change would create unnecessary litigation. Determining an "applicable portion" of a preliminary plan would not be simple because by its nature the integrated resource planning process addresses multiple issues at one time. A triennial review of resource need, followed by the timely, efficient acquisition of resources is appropriate. A rule requiring staging of multiple solicitations and multiple contract approval proceedings may be inefficient and could make administrative review cumbersome. No one is well served if an electric utility's IRP process (from public participation through contract approval) takes longer than is necessary, and the commission anticipates that as utilities gain experience each stage will become simpler and more efficient. The commission will assess the need to issue a final order on each contract on a case-by-case basis, particularly where a delay in the review of a contract would impede the wholesale market or would treat a winning bidder unfairly. The commission adopts the proposal as published with one exception: the commission agrees with the CSW companies that the phrase "a public utility" should be changed to "an electric utility" in sec.25.169(c). Section 25.170(d) concerning the final order on the final plan. CSW proposed the addition of the word "applicable" in sec.25.170(d) consistent with the forgoing request that the commission consider independent applications for contract review and approval. The commission believes that it has the flexibility necessary to approve contracts with separate final orders. The commission adopts the proposal as published. Section 25.161(b)(3) concerning the application of the regulations to nongenerating utilities. TEC states that the initial adoption of IRP rules overlooked several concerns important to electric cooperatives and did not focus on cooperative issues. TEC states that the rules as presently drafted effectively prohibit beneficial relationships such as those between a generation and transmission cooperative and its distribution cooperative members by prohibiting the sharing of officers and directors. TEC also states that several provisions of the rules impose requirements on nongenerating electric utilities in circumstances where the rules are not applicable as a matter of law. TEC offers several specific language changes, which the commission does not adopt because the commission has not provided notice that it was considering such amendments. Below is a summary of TEC's comments and specific responses, followed by a discussion of the manner in which many of TEC's concerns were addressed by the commission during its 1996 IRP rulemaking proceeding. In connection with a provision prescribing the utilities and events to which the rules apply, TEC states that the rules should clarify how the size of a purchase is to be calculated, and states that it would normally be calculated as a percentage of peak demand excluding interruptible load, that is, firm peak demand. TEC states that firm peak demand could be historic or projected, and states a preference for projected peak demand. TEC believes that the three-year period identified in sec.25.161(b)(3) is arbitrary and without statutory justification. TEC prefers not to limit the number of small purchases that could be made without a solicitation. The commission disagrees with TEC with respect to the need for clarification of how the size of a purchase is to be calculated. Different utilities apply different methods to forecasting and planning, and it is appropriate that the commission apply its regulations on a case-by-case basis. The proposal to rely on projected peak demand may be reasonable if an electric utility's underlying methodology were reasonable; however, the commission has found that an investigation into the facts is often necessary. Historic peak demand is well known and understood and is a more stable means of calculating the applicable percentage of peak demand provided by each contract. Measuring acquisitions against firm peak demand, excluding interruptible, may not always be appropriate. In certain situations it may be appropriate that an all-source resource solicitation be established to accept bids for interruptibility to achieve the lowest reasonable system cost. The commission also disagrees with TEC that the three-year period identified in sec.25.161(b)(3) is arbitrary. Three years is a reasonable period over which the commission shall consider a nongenerating utility's acquisition of resources. A "no limit" approach to the number of small purchases that could be made without a solicitation is open to abuse. For example, if a nongenerating utility signed five contracts in succession, each comprising 20% of its total resource need, and each less than 70 megawatts, it could replace an entire resource portfolio of up to 350 megawatts. The commission believes that would be inconsistent with the intent of the statute. Sections sec.sec.25.168(g), 25.168(k), 25.169(c)(2)(B), 25.170(a), 25.170(c)(2)(B), and 25.170(c)(2)(C) (references to "preliminary plans" and "final plans"). TEC states that the sec.25.161(b)(3) does not accurately identify the sections which should be applicable to cooperatives. In addition to proposing changes to sec.25.161(b)(3), TEC provides comments on specific portions of sec.sec.25.168(g), 25.168(g)(2), 25.168(k), 25.168(l), 25.169(b), 25.169(c)(2)(B), 25.170 (title), 25.170(a), 25.170(c)(2)(B) and 25.170(c)(2)(C). TEC provides specific remedies based on revisions to sec.25.161(b)(3) of the cited regulations. TEC states that sec.sec.25.168(g), 25.168(k), 25.169(c)(2)(B), 25.170(a), 25.170(c)(2)(B), and 25.170(c)(2)(C), and the title of sec.25.170 include either the term "proposed final plan" or the term "preliminary plan" or both, or the term "final integrated resource plan." TEC states that the statute clearly exempts a nongenerating utility from filing any integrated resource plan. TEC proposes changes to sec.25.161(b)(3) to exempt nongenerating utilities from these provisions, or, in the case of sec.sec.25.168(g), 25.168(k), and 25.169(c)(2)(B), TEC proposes the addition of a sentence that would ensure that a nongenerating utility relied on the criteria specified in the request for proposals (RFP) because there is no preliminary plan. The commission believes that the solicitation provisions reflect an important public policy of encouraging competition in the provision of new resources to utilities. An electric utility cannot merely follow its proposed RFP; the RFP itself must be reasonable and based on sound planning principles. Because a nongenerating utility is not required to file a preliminary plan, or to receive commission approval of an RFP prior to issuance, the commission finds that it is necessary to review the RFP and the planning documents that the electric utility relied upon in making its planning decisions in any contract certification proceeding. The commission adopts sec.sec.25.161(b)(3), 25.168(g), 25.168(k), 25.169(c)(2)(B), 25.170(a), 25.170(c)(2)(B), and 25.170(c)(2)(C) as published. The commission intends to apply the provisions contained in these sections to nongenerating utilities on a case-by-case basis. To determine the reasonableness of a power contract, it may be necessary for the commission to review planning documents that a nongenerating utility relied upon in developing the solicitation process and RFP. For example, the commission may need to determine why particular weights were applied to specific selection criteria, or the commission may need to understand why particular contract terms were included in an RFP. Consistency with the RFP is the first level of review, but the commission may need to assess the reasonableness of the RFP or the fairness of the overall solicitation process, and this could require a review of relevant planning documents. The commission does not intend to conduct a detailed, after- the-fact planning review of each and every utility that requests contract certification. The level of commission's review will be determined based upon the circumstances of each application. Sections sec.25.168(g)(2) concerning affiliate issues. TEC states that sec.25.168(g)(2) is unnecessarily prohibitive for cooperatives. TEC makes specific recommendations regarding incurring affiliate debt, the separation of officers and directors, the sharing of employees, and joint marketing and advertising. The commission agrees that TEC's recommendation regarding incurring debt is a reasonable clarification, and adopts that change. However, the other issues represent substantive changes that the commission has not requested public comment on. Accordingly, the commission declines to adopt the other changes. In the meantime, cooperatives can meet their incremental resource needs by turning to solicitations in the open market, rather than to affiliated entities. Many of the concerns TEC expressed should more appropriately be addressed in the affiliate rule (Project Number 17549). Sections sec.25.168(l) concerning complaints from bidders. TEC states that an electric cooperative that is no longer subject to rate regulation should not be subject to a complaint proceeding regarding the solicitation process. TEC would amend sec.25.161(b)(3) so that sec.25.168(l) would not apply to nongenerating utilities. The commission disagrees; any resource solicitation required by commission rules should include a complaint process for bidders. Sections sec.25.169(b) concerning approval of contracts. TEC states that sec.25.169(b) should be modified so that only the sentence that mentions nongenerating utilities would apply to nongenerating utilities. This subsection sets out procedures and time limits for requests for approval of a final plan or a contract for a resource. The requirements of this subsection apply to generating and nongenerating utilities, as is clear from the text of sec.25.169(a). The commission is not adopting this suggestion. Commission actions in 1996. The commission offers the following additional discussion to identify several issues relating to electric cooperatives that were considered in 1996. In proposing IRP rules, the commission anticipated that the structure of the electric industry might change in the future, and stated that it was important that the commission develop a robust resource solicitation process that would remain workable under various industry restructuring scenarios. (21 TexReg 479, January 19, 1996.) The role of the resource solicitation is central to the success of IRP, and the commission focused on how both generating and nongenerating utilities should conduct competitive bidding. TEC stated in 1996 that the exemptions expressly carved out by the Legislature when crafting the IRP process did not require the filing of a preliminary plan by non-generating utilities, unless such utilities planned to construct generating facilities. (21 TexReg 6790, July 19, 1996.) The commission agreed with the parties who stated that the commission should follow the processes set forth in the PURA, and the commission specifically declined to expand the scope of the IRP filing beyond the statute. The commission also decided in 1996 not to repeal the energy efficiency plan reporting requirement in sec.23.22, but to take up such issues in another rulemaking. (21 TexReg 6791, July 19, 1996.) The commission's 1996 IRP rule proposal applied the regulations to a nongenerating utility that sought to purchase more than 25% of its peak demand or more than 70 megawatts of capacity. (21 TexReg 484, January 19, 1996.) TEC commented in 1996 that proposed paragraph sec.23.34(b)(3) suffered from a number of defects. TEC stated that rules should clearly identify whether any portions of sec.23.34 and sec.23.35 apply to non-generating utilities that seek to purchase 25% of their need or 70 megawatts of capacity. TEC stated that if the portions of sec.23.36 and sec.23.37 that were not related to solicitation did not apply to cooperatives, it should be clearly stated. TEC objected to the additional restriction against purchases from affiliated power suppliers, stating that it is contrary to law, and objected to the provision to permit the commission to conduct a hearing. TEC stated that the paragraph did not provide standards for the conduct of the solicitation. TEC stated that other non- generating utilities are exempt from IRP, and that paragraph sec.23.34(b)(6) is inconsistent with the statute. Finally, TEC stated that the last sentence in proposed paragraph (6) requiring cooperation with wholesale suppliers should be limited to providing information about forecasts of loads. (21 TexReg 6801, July 19, 1996.) The commission seriously considered the comments of TEC in 1996 and made changes to the referenced paragraphs upon adoption. The commission stated that standards of the resource solicitation process should apply broadly, regardless of whether an electric utility is required to file a preliminary plan. In determining whether to certify a distribution cooperative's contract for resources, the commission stated that it would consider the standards it has established for the resource solicitation process, including whether the resource solicitation was conducted in a fair manner and whether the cooperative used an open, transparent bidding procedure. The commission emphasized the importance of the solicitation standards set forth in these rule amendments and that all utilities in Texas should take note of the intent of the new regulations. (21 TexReg 6801, July 19, 1996.) In summary, the solicitation provisions reflected an important public policy of encouraging competition in the provision of new resources to utilities, and upon adoption of sec.23.34(b) in 1996, the paragraphs in question were revised to address TEC's concerns. (21 TexReg 6806, July 19, 1996.) The commission concludes that the reasons for the adoption of sec.23.34 in 1996 and the reasons for its application to cooperative utilities remain valid today. The public policy of encouraging competition at wholesale is set out in PURA and remains an important policy. The application of the IRP process to nongenerating utilities as set forth in sec.23.34(b) remains unchanged in proposed sec.25.161(b). All comments, including any not specifically referenced herein, were fully considered by the commission. In adopting this section, the commission makes other minor modifications for the purpose of clarifying its intent, i.e., the term "utility" has been changed to "electric utility". These new sections are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; and specifically, sec.34.003 which requires that the commission by rule develop an integrated resource planning process to provide reliable energy service at the lowest reasonable system cost. Cross Index to Statutes: Public Utility Regulatory Act sec.14.002 and sec.34.003. sec.25.161. Integrated Resource Planning. (a) Purpose. The commission's regulation of electric utility resource planning and procurement is intended to ensure that electric utilities provide reliable energy service at the lowest reasonable system cost. The integrated resource planning process can advance the transition to a more competitive marketplace by aligning the electric utility's interest more closely with its customers. Electric utilities shall determine customer preferences with regard to planning options, consider all of the attributes of a broad range of resources that affect the supply or demand for electricity, procure resources based upon a fair and reasonable evaluation of the costs and attributes of resources that may be obtained in a market, and negotiate contracts that appropriately allocate risk. The development of a competitive wholesale electric market that allows for increased participation by both electric utilities and certain non-utilities is in the public interest. Nothing in the integrated resource planning process shall inhibit the development of competitive markets for electric power or for energy services. (b) Application. The requirements of this section and sec.25.162 of this title (relating to Public Participation), sec.25.163 of this title (relating to Acquisition of Resources Outside the Solicitation Process), sec.25.164 of this title (relating to Statewide Integrated Resource Plan), sec.25.165 of this title (relating to Preliminary Integrated Resource Plan), sec.25.166 of this title (relating to Commission Review of a Preliminary Integrated Resource Plan that Does Not Include a Solicitation), sec.25.167 of this title (relating to Commission Review of a Preliminary Integrated Resource Plan that Includes a Solicitation), sec.25.168 of this title (relating to Solicitation of Resources), sec.25.169 of this title (relating to Approval of Resources Procured through Solicitation), sec.25.170 of this title (relating to Hearing on the Final Integrated Resource Plan), and sec.25.171 of this title (relating to Certificate of Convenience and Necessity for Generation Facilities) apply as specified in this subsection. (1) Generating electric utilities are subject to the requirements of this section and sec.sec.25.162 - 25.171 of this title. (2) Nongenerating electric utilities planning to construct generating resources are subject to the requirements of this section and sec.sec.25.162 - 25.171 of this title. (3) A nongenerating electric utility that seeks to purchase more than 25% of its peak demand or more than 70 megawatts during any three-year period is subject to the requirements of subsection (f), and subsection (g)(1) (2) of this section; sec.25.163 of this title; sec.25.168 of this title; sec.25.169(a)(2), (b), (c)(1), (2)(B), (5) - (7), and (d) of this title; and sec.25.170(a), (b), (c)(1), (2)(B) - (C), and (5) - (7) of this title, unless the purchase is from its current power supplier as allowed by sec.25.163(1) of this title. If requested by such an electric utility, the commission may conduct a public hearing to consider the reasonableness of any contract for resources, if it determines that such a hearing is necessary. The commission shall issue an order approving, modifying, or rejecting the contract for resources resulting from the solicitation within 90 days of the date that the application is filed with the commission. (4) Every three years, a municipally owned utility shall submit to the commission a report containing all of the information required in a preliminary integrated resource plan under sec.sec.25.165 - 25.167 of this title, but shall not otherwise be subject to the requirements of this section. (5) A river authority subject to the Public Utility Regulatory Act (PURA) sec.sec.32.051 - 32.054 is subject to the requirements of this section and sec.sec.25.162 - 25.171 of this title with respect to the area served by the river authority on January 1, 1975. (6) An electric utility that is not otherwise subject to the requirements of this section or sec.sec.25.162 - 25.171 of this title shall provide information to and cooperate with its electric utility wholesale power suppliers to develop and implement a resource plan to the extent that such activities do not otherwise affect either electric utility's competitive strategy. (c) Structure of integrated resource planning. The integrated resource planning process consists of the following steps and activities: (1) Public participation and preparation of preliminary integrated resource plan. In accordance with this section, the electric utility shall solicit the views of the public on resource planning matters and prepare a preliminary integrated resource plan. (2) Request for approval of preliminary integrated resource plan. In accordance with sec.sec.25.165 - 25.167 of this title, the electric utility shall file its preliminary integrated resource plan. If the preliminary plan contains a proposed resource solicitation, the commission shall issue an order on the preliminary plan, including the proposed solicitation, within 180 days. In each case, the commission shall establish a schedule that will permit it to enter an order in 180 days or less. If the preliminary plan of an investor-owned utility does not contain a proposed resource solicitation, the commission shall issue a notice of the filing of the plan. (3) Solicitation. In accordance with sec.25.168 of this title, the electric utility shall conduct a resource solicitation. The electric utility shall evaluate the bids and select the best resources consistent with the approved preliminary plan, if any. (4) Approval of resources procured through solicitation. If the electric utility has selected resources pursuant to a solicitation in accordance with sec.25.168 of this title, it may request commission certification of the contracts under sec.25.169 of this title. In accordance with sec.25.169 of this title, the electric utility shall file its final plan. The commission shall issue a final order on the final plan within 180 days. In each case, the commission shall establish a schedule that will permit it to enter an order in 180 days or less. If an electric utility is filing pursuant to subsection (b)(3) of this section, the commission shall issue a final order within 90 days. If the electric utility plans to acquire additional generating facilities that require an amendment of its certificate of convenience and necessity, the electric utility shall apply for such an amendment, in accordance with sec.25.171 of this title. (d) Staggered schedule. In October 1996 and no less frequently than every two years thereafter, the commission shall adopt a staggered schedule for the filing of preliminary integrated resource plans by electric utilities. The schedule will set forth the name of each electric utility affected by this section and sec.sec.25.162 - 25.171 of this title, and the date on which each electric utility shall file its preliminary plan. (e) Filing requirements. In October 1996 and no less frequently than every two years thereafter, the commission shall adopt forms for preliminary and final integrated resource plans. The forms shall reflect the differences in capabilities of small and large electric utilities, and of electric utilities with different structures and patterns of ownership. Electric utilities that provide service that is subject to rate regulation by a federal agency or an agency of another state shall file any information required in this section or sec.sec.25.162 - 25.171 of this title separately identifying information for Texas-only operations and for total system operations. Upon a showing of good cause, an electric utility that is subject to resource planning requirements of a federal agency or an agency of another state may file all or part of its integrated resource plan in a format required by the federal agency, the regulatory agency of another state, or a regional planning agency. (f) Lowest reasonable system cost. In determining the lowest reasonable system cost of an electric utility's plan, the commission shall consider in addition to direct costs the following: (1) the effect on the rates and bills of various types of customers; (2) minimization of the risks of future fuel costs and regulations; (3) the appropriateness and reliability of the mix of resources; an appropriate and reliable mix of resources may include a portfolio of cost-effective sources of power including but not limited to resources that are fueled and non-fueled, such as renewable resources and conservation measures and a mixture of long-term and short-term contracts; and (4) the costs of compliance with the environmental protection requirements of all applicable state and federal laws, rules, and orders. (g) General guidelines for evaluating and selecting resources. The commission finds that the development of a competitive wholesale electric market that allows for increased participation by both electric utilities and certain non- utilities is in the public interest. Existing markets are not fully open nor fully competitive; therefore, the commission finds that a formal solicitation process with regulatory oversight is appropriate. (1) All-source bidding. In formally soliciting bids, the electric utility shall use an all- source, integrated, demand-side and supply-side resource solicitation process. The all-source solicitation may include separate, parallel requests for proposals which are fully coordinated to meet the resource need, and which are integrated at the final stages of resource selection. The electric utility may conduct targeted solicitations upon a showing of good cause, and upon approval of the commission. The electric utility may conduct an ongoing demand-side resource solicitation, or other similar process, if the participants in its triennial public participation process support such an approach and have set limits, including upper bounds of costs and capacity, for such a solicitation or process, and if the commission approves the solicitation or process. (2) Quantification. In developing its specific resource selection criteria, the electric utility shall quantify, to the maximum reasonable extent, the factors it considers in evaluating resources. If available, the electric utility shall employ objective market valuations of environmental and other non-cost factors which influence its resource selection process, such as market valuations of tradable emissions allowances. Where appropriate, the electric utility may set forth a framework for the ranking and weighting of various factors that can not easily be quantified. (3) Resource selection criteria and weights. In developing its specific resource evaluation criteria and weights, the electric utility shall consider the lowest reasonable system cost, the characteristics of the resource need, the values and preferences of its customers, and the goals set forth in the most recently adopted statewide integrated resource plan. (h) Confidential information. Any information submitted by an electric utility pursuant to this section and sec.sec.25.162 - 25.171 of this title may be submitted by the electric utility under seal. Each page submitted under seal shall have the words "Confidential Information" typed or stamped on its face. The electric utility shall clearly identify each portion of the application alleged to be Confidential Information; identify the exemption to the Open Records Act, Government Code, Title 5, Chapter 552, et seq. applicable to the alleged Confidential Information; and provide a detailed explanation of why the alleged Confidential Information should be exempt from public disclosure under the Open Records Act. The electric utility may require the execution of an appropriate confidentiality agreement prior to providing access to such confidential information to any interested party. The form of any such confidentiality agreement shall be agreed to by the Legal Division of the Office of Regulatory Affairs prior to filing and included with the informational filing. sec.25.162. Public Participation. (a) Public participation in resource planning matters is an essential part of integrated resource planning. The electric utility shall consider the views of the public in preparing integrated resource plans, and shall reflect such views in any preliminary plan, regardless of whether such plan includes a proposed solicitation. (b) Purpose. The purpose of public participation is to educate the public on resource planning issues and the electric utility's planning activities, and to obtain the non-technical guidance of the public on planning matters, including the values and preferences of customers. It is not the purpose of public participation to establish a quasi-judicial group with authority over resource planning matters. (c) Process. Electric utilities may decide how to conduct public participation in their service areas subject to the requirements of this subsection and may limit direct participation to its customers. The electric utility shall ensure fair representation of residential, commercial, and industrial customers, municipalities, and the geographic areas in its service territory in the public participation process. The electric utility shall include in its preliminary plan a description of how it has achieved fair representation in selecting the participants. The electric utility may request the involvement of the commission or its staff in the public participation process. (d) Record. The electric utility is responsible for maintaining a comprehensive record of its public participation activities for a period of five years. (e) Standards. Public participation requires two-way communication, and the electric utility shall facilitate the presentation of information from a broad range of perspectives to the participants, including the views of competitors and other non-customers. At a minimum, the electric utility shall obtain sufficient information from the participants regarding the values and preferences of its customers to allow the electric utility to incorporate those views in the preliminary plan. Specifically, the electric utility shall consider the views of the participants in determining: (1) the resource selection criteria and specific weights to be applied in the proposed resource solicitation, if any; (2) the ongoing strategies of the electric utility to achieve the lowest reasonable system cost for its service area; (3) whether targeted bidding may be justified in order to obtain an appropriate and reliable mix of resources; (4) an appropriate resource mix for the electric utility; and (5) limits, including upper bounds of costs and capacity, relating to an ongoing demand- side resource solicitation, if any. (f) Information. (1) The electric utility shall make available for review at no cost to the public at large at convenient locations in its service area, a copy of the most recent resource plan and a copy of the orders of the commission concerning the plan. The electric utility shall make available to any individual making a request a copy of the executive summary of its most recent resource plan. (2) Prior to distributing informational materials to the participants under this subsection, the electric utility shall make the materials planned for distribution available to the commission staff and to the public at large, including competitors and other non-customers who may address the participants, and the electric utility shall accept comments on the content of the materials. (3) The electric utility shall provide information to the participants regarding the operating cost, environmental or community impacts, planned capital additions (e.g., repowering or refurbishment), potential for productivity and efficiency improvements, and expected remaining life of existing generating units (including life extension or early retirement options), and an estimate of the reasonable range of direct and indirect costs, including the bill impacts and risks, of these and alternative supply-side resources. The electric utility shall provide information to the participants regarding existing resources, existing customer services, demand- side management programs, and energy service and pricing options, and a reasonable range of costs for providing new demand- side resources, programs, and services. The electric utility shall provide information to the participants regarding the resource mix and the role of demand-side resource solicitations in meeting both capacity and customer service needs. In addition, the electric utility shall provide information related to its existing resources which enables the participants to compare such resources to currently available options and to select an appropriate resources mix. (g) Notice. At least every three years, each electric utility shall provide reasonable notice regarding the opportunities for customers and non-customers to become involved in the public participation process. This notice shall be filed with the commission's central records. Such notice shall describe the process, shall indicate how to obtain a schedule of events, and shall include: (1) notice by mail to the Office of Public Utility Counsel, and the governing bodies of municipalities in the electric utility's service area; (2) direct notice to persons who submitted to the commission a request that the electric utility notify them of resource planning matters; and (3) notice by publication in the service area. (h) Good cause exception. The commission may grant a good cause exception to any of the public participation requirements of this subsection for a electric utility's public participation efforts that were completed or were in progress by the effective date of this section. In evaluating requests for good cause exceptions under this paragraph, the commission shall consider whether the electric utility's public participation process was consistent with the purpose of public participation as prescribed in subsection (b) of this section. (i) Lists of interested persons. The commission shall maintain lists of interested persons as specified in this subsection. The commission shall provide a copy of such lists upon request to any interested party. In implementing this subsection, the commission may refer interested persons to comparable lists maintained by electric utilities. This subsection expires on September 1, 2002. The commission shall maintain lists of persons who have requested to be notified of: (1) resource planning matters, including opportunities for public participation and the filing of preliminary and final integrated resource plans. Persons requesting inclusion on such lists must state in writing their name and address and the name of the electric utility in which they have an interest; (2) the issuance of any request for proposals for resources in Texas; and (3) the issuance of any request for qualifications for independent bid evaluators. sec.25.163. Acquisition of Resources Outside the Solicitation Process. Consistent with the electric utility's most recent approved integrated resource planning goals, if any, the electric utility, including a nongenerating electric utility, may add new or incremental resources outside the solicitation process. The addition of new or incremental resources by an electric utility under this subsection does not require an amendment to the electric utility's integrated resource plan. The electric utility shall acquire such resources under contract, and the electric utility shall put in place accounting procedures that allow the tracking of the costs of such resources. An electric cooperative may acquire such resources directly or in coordination with another electric cooperative. Except as provided for in the previous sentence, an electric utility may not acquire a resource under this subsection from an affiliate of the electric utility, except that the resources cited under paragraphs (6) and (7) of this subsection may be provided by the electric utility. The acquisition of a resource outside the solicitation process under paragraphs (1) - (3) and (5) - (6) of this subsection does not relieve the electric utility of its responsibility to demonstrate in an appropriate forum that such resources are preferable to the alternatives that would have been available through a resource solicitation. Resources may be acquired outside the solicitation process only in the following circumstances: (1) contract renegotiation for existing capacity; (2) demand-side management resources or resources powered by renewable energy technologies; (3) capacity purchases with a term of two years or less; (4) capacity purchases necessary to satisfy unanticipated emergency conditions; (5) the exercise of an option in a purchased power contract; (6) distributed resources powered by renewable resource technologies located at or near the point of consumption if such resources are less costly than local facility extensions or upgrades; or (7) demand-side management programs for low-income customers that the electric utility develops through coordination with state or federally authorized weatherization providers. sec.25.164. Statewide Integrated Resource Plan. (a) Process. In November 1998 and every two years thereafter, the commission shall adopt a statewide integrated resource plan. The statewide plan shall include the commission's long-term resource planning goals. When it adopts the statewide plan, the commission shall send the plan and a report on the plan to the governor and shall notify each electric utility that a statewide plan has been adopted. The commission shall make the statewide plan and the report on the plan available to the public. (b) Contents of the report. The report on the statewide plan shall include the commission's long-term resource planning goals for the State of Texas and: (1) historical data for electric consumption statewide and by electric utility; (2) historical data for electric generation by electric utility and by type of capacity, including alternative energy sources; (3) an inventory of generation capacity statewide and by electric utility; (4) quantitative data on demand-side management programs to the extent the commission determines necessary; (5) each generating electric utility's forecast without adjustment; (6) a projection of the need for electric services; (7) a description of the approved individual integrated resource plans of electric utilities; (8) an assessment of transmission planning being performed by electric utilities within this state; and (9) other information as determined by the commission. (c) Recommendations regarding transmission system needs. In carrying out its duties related to the integrated resource planning process and in setting rates for electric utilities that are not required to file an integrated resource plan, the commission may review the state's transmission system to determine and make recommendations to electric utilities on the need to build new power lines, upgrade power lines, or make other improvements and additions. sec.25.165. Preliminary Integrated Resource Plan. (a) Filing requirements. (1) All electric utilities and municipally owned utilities. Preliminary integrated resource plans for a ten-year period shall be submitted every three years and shall be accompanied by an executive summary and the identity, address, telephone number and facsimile number of a contact person to deal with matters relating to the filing. All filings made under this section shall be comprehensive and provide sufficient detail, work papers, and source materials to allow the commission to determine the accuracy and reasonableness of the determinations made by the electric utility or the municipally owned utility. The electric utility or the municipally owned utility shall explain any differences between the filing and the most recent resource plan filing with the Electric Reliability Council of Texas or other reliability council. A preliminary plan submitted by an electric utility or a municipally owned utility under this section must include current and ten-year projections of: (A) statistical data, including the electric utility's or the municipally owned utility's forecast or projections of: (i) summer and winter peak demand and electricity usage; (ii) adjustments to peak demand and electricity usage related to the acquisition of demand-side resources, interruptible load, and other factors that affect peak demand and electricity usage; (iii) existing system capacity, current and target reserve margins, and resource additions and retirements; and (iv) a description of existing and planned resources; and (B) the electric utility's or the municipally owned utility's projection of major transmission line additions. (2) Electric utilities. In addition to the information requested in paragraph (1) of this subsection, electric utilities shall submit: (A) a description of energy service options and pricing options available to each class of customers including options relating to: (i) the reliability of service (variations in firmness or interruptibility); (ii) the quality of service (voltage fluctuation or other quality attributes); (iii) the stability of prices (such as rate or electric bill guarantees and budget plans); (iv) the choice of power service (such as green pricing or particular technologies); (v) the time of usage (such as seasonality, time-of-use, and real-time pricing); (vi) alternative billing or metering arrangements (such as conjunctive billing); (vii) backup, standby, or maintenance power service; and (viii) other factors of service and pricing structures that affect customer choice and resource planning; (B) an estimate of the energy savings and demand reduction the electric utility can achieve during the ten-year period through the acquisition of demand- side resources, and the range of possible costs for those resources; (C) a description of how the electric utility will achieve equity among customer classes and provide demand-side management programs to each customer class including tenants and low-income ratepayers; (D) a description of how the electric utility promotes the development of renewable energy technology projects and distributed resources; (E) an estimate of additional supply-side resources needed to meet future demand, an estimate of the amount and operational characteristics of the additional capacity needed, the types of viable supply-side resources for meeting that need, the range of probable costs of those resources, and supporting technical data; (F) a record of public participation including a description of the process and a demonstration that the views and preferences of the electric utility's customers were considered in preparing the preliminary plan; (G) an evaluation of different internally-consistent planning scenarios and a discussion of the incidence and treatment of various factors of risk, including, but not limited to, performance, environmental, financial, and fuel-related risks; (H) proposed solicitations for new or replacement demand-side or supply-side resources including: (i) a description of the resource solicitation process and projected dates for the important events (issuance of the request for proposals, bid due date, negotiation period); (ii) the proposed request for proposals and draft model contract for resources; (iii) proposed bidder eligibility restrictions, if any, and proposed minimum threshold criteria related to bids, and the justification of any such restrictions; (iv) a description of the resource selection criteria and weights the electric utility will use to evaluate and select or reject resources and a listing of the criteria which were considered and rejected; (v) an explanation and quantification of how the electric utility assigns value to important options, such as options to accelerate or delay a project; to characteristics of resources, such as intermittence and dispatchability; to factors of risk, such as fuel cost risk mitigation, and to other significant options, characteristics, and factors that the electric utility employs in the selection of resources; (vi) an explanation of how, in developing specific resource selection criteria and weights, the electric utility has taken into account the definition of the lowest reasonable system cost, the values and preferences of customers, the characteristics of the resource need, and any statewide goals; (vii) documentation in support of a good cause exception for a targeted solicitation, if any; and (viii) documentation in support of an ongoing demand-side resource solicitation, if any; (I) a description of how the electric utility intends to allocate the costs of different types of demand-side and supply-side resources that could be procured; (J) any proposed incentive factors, the justification for such factors, and the proposed regulatory mechanism for the recovery of incentives; and (K) information regarding the cost and operation of each resource acquired outside the solicitation process during the past three years and a projection, to the extent known, of the resources that will be acquired outside the solicitation process during the next three years. (L) proposed date for filing contracts for certification pursuant to sec.25.169 of this title (relating to Approval of Resources Procured Through Solicitation). (b) Notice. The electric utility shall file copies of its application under this section with the filing clerk of the commission and the Office of Public Utility Counsel. The electric utility shall also provide notice of the filing by publication in its service area and to any persons who have requested, in writing, to be notified of resource planning matters. The notice shall be completed not later than 15 days after the filing of the application. Interested persons may intervene in the proceeding not later than 45 days after the date on which the electric utility files its resource plan. (c) No hearing required. A commission hearing is not required for a preliminary plan filed by a river authority or generating electric cooperative that does not intend to build a new generating plant, or for a preliminary plan filed by a municipally-owned electric utility, or for a preliminary plan filed by an investor-owned electric utility if the plan does not contain a proposed resource solicitation. A commission hearing is not required for a preliminary plan that contains a proposed ongoing demand-side management solicitation and no other proposed solicitation. (d) Deficiencies in filing. After an electric utility files a preliminary plan, the commission shall determine whether such plan complies with the filing requirements of this section. Parties may file motions alleging material deficiencies in the electric utility's application for approval of the resource plan not later than 21 days after the filing of the application. The electric utility may file responses to such motions not later than five working days after the receipt of such motions. The commission shall rule on such motions not later than 40 days after the date that the application was filed. If the commission concludes that the filing is materially deficient, it shall require the electric utility to supplement its filing or to file a new preliminary integrated resource plan within a specified time. The deadline for issuing an order in an electric utility's application for approval of a resource plan, and other deadlines related to the processing of the application, shall be calculated from the date that the electric utility files a plan that is not materially deficient. sec.25.166. Commission Review of a Preliminary Integrated Resource Plan that Does Not Include a Solicitation. The commission shall issue a final order on the preliminary plan of an investor- owned electric utility if the preliminary plan does not contain a proposed solicitation. In such a case the commission shall issue a notice concerning the filing of a preliminary plan and determine whether the plan is in compliance with applicable rules. The commission shall expeditiously issue a final order on the preliminary plan. In addition, a preliminary plan that does not contain a proposed solicitation may be reviewed for deficiencies pursuant to the Public Utility Regulatory Act (PURA) sec.sec.15.021, 15.023 - 15.027, 15.028, 15.030 and 15.032 and the enforcement rules of the commission. sec.25.167. Commission Review of a Preliminary Integrated Resource Plan that Includes a Solicitation. (a) The commission may review a preliminary plan that contains a proposed solicitation on its own motion or on the motion of the electric utility or of an affected person. In conducting such a review, the commission shall convene a public hearing on the adequacy and merits of the preliminary plan. (b) Procedure. At the hearing, any interested person may intervene, present evidence, and cross-examine witnesses regarding the contents and adequacy of the preliminary plan. Discovery is limited to issues relating to the development of the preliminary plan, fact issues included in the preliminary plan, and other issues the commission is required to decide relating to the preliminary plan. The time for providing responses to requests for information may be shortened on motion of any party, on a showing of good cause. The commission shall issue an order on the preliminary plan not later than 180 days after the date the electric utility files its preliminary plan. The 180-day period may be extended for a period not to exceed 30 days for extenuating circumstances encountered in the development and processing of an initial plan, if the extenuating circumstances are fully explained and agreed to by the commissioners. The commission may adopt a schedule for considering a preliminary plan in less than 180 days if the circumstances warrant it. (c) Commission determinations. After the hearing, the commission shall make the following determinations with regard to an electric utility's preliminary integrated resource plan filing: (1) whether the electric utility's plan is based on substantially accurate data, reasonable planning assumptions, and a reasonable method of forecasting; (2) whether the electric utility's plan adequately addresses transmission needs; (3) whether the menu of energy service options and pricing options available to each class of customers is sufficiently broad to satisfy the needs of such customers; (4) whether the electric utility's preliminary plan identifies and takes into account any present and projected reductions in the demand for energy that may result from cost-effective measures to improve conservation and energy efficiency in the customer classes that the electric utility serves; (5) whether the electric utility's proposals to achieve equity among customer classes and provide demand-side programs to each customer class, including tenants and low- income ratepayers, are adequate; (6) whether the electric utility's proposals to develop renewable energy technology projects and distributed resources are adequate; (7) if additional supply-side resources are needed to meet future demand, whether the electric utility's preliminary plan adequately demonstrates the amount and operational characteristics of the additional capacity needed, the types of viable supply-side resources for meeting that need, and the range of probable costs of those resources; (8) whether the electric utility's preliminary plan demonstrates that there were reasonable opportunities for customers to participate in the development of the preliminary plan, whether the electric utility facilitated the presentation of information from a broad range of perspectives, whether the electric utility provided adequate information as required by sec.25.162(f)(3) of this title (relating to Public Participation), and whether the views and preferences of customers were appropriately considered in preparing the preliminary plan; (9) whether the electric utility's plan identifies appropriate scenarios and takes into account the incidence and allocation of various factors of risk; (10) whether the specific selection criteria and weights the electric utility will use to evaluate and select or reject resources are reasonable and consistent with the definition of the lowest reasonable system cost, the views of its customers, the nature of resource need, and any statewide goals, and whether the proposed bidder eligibility and threshold criteria restrictions, if any, related to bids are justified and reasonable, and whether the solicitation procedures will encourage bids for a broad range of options to meet the needs of the electric utility's customers; (11) whether the cost allocation method proposed by the electric utility for different resource types is reasonable; (12) whether incentive factors are appropriate, and, if so, the levels of such incentive factors, and how such incentive factors will affect the resource selection process; (13) whether the electric utility reasonably acquired resources outside the solicitation process and whether the electric utility's plan for acquiring resources outside the solicitation process over the next three years is reasonable; and (14) whether the schedule for filing contracts for certification is reasonable. (d) Commission action. In order to approve a proposed preliminary plan that includes a solicitation, the commission must, at a minimum, make an affirmative finding regarding all matters set forth in subsection (c) of this section, except subsection (c)(2) - (3) and (6) of this section. The commission shall take into consideration its findings on subsection (c)(2) - (3) and (6) of this section in deciding whether to approve the proposed preliminary plan. In its order, the commission shall approve the preliminary plan, modify the preliminary plan, or, if necessary, remand the preliminary plan for additional proceedings. An order approving a preliminary plan that contains a proposed solicitation is interim in nature. At the time of issuance of the order for contract approval pursuant to sec.25.170 of this title (relating to Hearing on the Final Integrated Resource Plan) or generation facility certification pursuant to sec.25.171 of this title (relating to Certification of Convenience and Necessity for Generation Facilities), the commission shall make the interim order on the preliminary plan a final order of the commission. sec.25.168. Solicitation of Resources. (a) Purpose. The purpose of the electric utility's resource solicitation process is to obtain commitments from third parties for new and replacement resources, facilitate the evaluation of resources subject to the specific criteria set forth in the request for proposals, and serve as a starting point for further contract negotiations. A solicitation may be required as part of the integrated resource planning process, may be initiated by an electric utility, or may be ordered by the commission in the context of another proceeding. (b) Solicitation required. The electric utility shall conduct solicitations for demand-side and supply-side resources, as prescribed in an approved preliminary plan, if any. An electric utility not required to prepare a preliminary plan, but required to conduct a solicitation, shall conduct its solicitation in a manner consistent with the provisions of this section. (c) Notice. The electric utility shall provide reasonable notice of the request for proposals. This notice shall be filed with the commission's central records. Such notice shall include: (1) notice by mail to the Office of Public Utility Counsel; and (2) notice by mail to persons who requested to be notified of the request for proposals by submitting their name and address to the commission. (d) Eligibility to bid. The solicitation procedures shall encourage broad participation by persons who are capable of providing demand-side or supply-side resources, including customers of the electric utility and small-scale resource providers. In addition to soliciting resources from unaffiliated third parties, the electric utility may prepare and submit a bid for a new electric utility demand-side management program as prescribed by subsection (f) of this section and may receive bids from one or more of its affiliates as prescribed by subsection (g) of this section. (e) Solicitation procedures. Each bidder, including the electric utility and its affiliates, shall submit two copies of its bid to the chief, Office of Policy Development. The chief, Office of Policy Development, shall ensure that the electric utility has access to all bids at the same time, and shall keep a copy of each bid submitted by the electric utility or the electric utility's affiliate. A bid submitted under this subsection or retained under this subsection is confidential and is not subject to disclosure under Chapter 552, Government Code. (f) Electric utility bids for demand-side management resources. The request for proposals shall indicate whether the electric utility reserves the right to use its own proposed demand-side management program to meet a need identified in the preliminary plan. If the electric utility retains this right, it must prepare a bid reflecting that resource. A bid prepared by the electric utility under this subsection must comply with the selection criteria specified in the preliminary plan, or if there is no preliminary plan, the bids must comply with the criteria specified in the request for proposals. A bid prepared by the electric utility under this subsection must include a proposal for verification and evaluation conducted by an independent consultant. The electric utility may not give preferential treatment or consideration to any bid. If the electric utility plans to prepare a bid under this subsection, the electric utility must describe, in its preliminary plan, a reasonable process for the sharing of customer information with third-party bidders to satisfy the standards of subsection (g) of this section, taking into account the need for the confidentiality of customer-specific billing and usage information. (g) Electric utility affiliate bids. Any bid prepared by an affiliate of the electric utility must comply with the selection criteria specified in the preliminary plan and with commission regulations regarding affiliate transactions. The electric utility may not give preferential treatment or consideration to a bid prepared by an affiliate of the electric utility. (1) Each electric utility must establish written procedures to ensure that all transactions between the electric utility and its affiliates are conducted on an arm's length basis (a code of conduct). Such electric utilities must maintain a written record of the time, date, and substance of all conversations, data, and written materials directly or indirectly exchanged between its personnel and the personnel of its affiliates that pertain to competitive market information and the resource acquisition process. (2) The electric utility and its affiliates must maintain separate books; must not incur debt in a manner that would permit the creditor of the affiliate to have recourse to the assets of the electric utility on default by the affiliate; must value any assets transferred between the electric utility and its affiliate in accordance with state and federal regulations to prevent cross subsidies; and must not share officers, directors, or employees or own property in common. The electric utility must not perform on behalf of its affiliates the hiring or training of personnel, the purchase, installation or maintenance of equipment (except under contract), or research and development. The electric utility must not share any information related to customers' identity, energy service needs, loads, end-use devices, industrial processes, costs, prices or any other information related to strategic planning or retail markets, except as shared equally with all other competitive resource bidders. The electric utility must not carry out any joint promotion, marketing, sales, or advertising campaigns with its affiliates, except as are available to all other competitive resource bidders. (3) If an electric utility signs a contract for resources with its affiliate, the electric utility must carry out transactions with independence, pursuant to the contract, and maintain sufficient records to permit an audit of transactions between the electric utility and the affiliate, and the electric utility and its affiliate must each have an annual compliance review conducted by an independent entity. (h) Independent evaluator. The electric utility shall use an independent evaluator if there is a likelihood that an affiliate bid may be included among the bids to be evaluated or if the electric utility plans to bid. If an independent evaluator is required, the electric utility shall maintain a record of communications with the independent evaluator. The electric utility may use an independent party to assist in the evaluation of bids as appropriate under other circumstances. The independent evaluator shall in writing identify the bids that are most advantageous and warrant negotiation and contract execution, in accordance with the criteria set forth in the request for proposals. The electric utility retains responsibility for final selection of resources subject to the review and approval of the commission. (i) Evaluation of bids. The electric utility or independent evaluator, as appropriate, shall evaluate each bid submitted in accordance with the criteria specified in the preliminary plan, or if there is no preliminary plan, the evaluation of bids shall be in accordance with the criteria specified in the request for proposals. (j) Negotiation. The electric utility shall negotiate the necessary contracts. An electric utility may negotiate a pricing structure that is suitable for the resource, considering such factors as the reliability of the resource, the need for security of performance, the availability of other means of ensuring security of performance, the nature of the resource, the level of risk, and other appropriate factors. The electric utility shall negotiate contract terms that appropriately allocate the risks of future fuel costs and other resource costs between the resource provider and the electric utility. (k) Rejection of third party bids. The electric utility is not required to accept a bid and may reject any or all bids in accordance with the selection criteria specified in the preliminary plan. If the results of the solicitations and contract negotiations do not meet the supply- side needs identified in the preliminary plan, the electric utility may apply for a certificate of convenience and necessity for an electric utility-owned resource addition notwithstanding the fact a solicitation was conducted and the addition was not included in the approved preliminary plan. Such a resource shall be subject to commission review pursuant to sec.25.171 of this title (relating to Certificate of Convenience and Necessity for Generation Facilities). (l) Time limit for filing complaint. A complaint by a bidder concerning the electric utility's decision on the acquisition of resources in a solicitation may not be filed later than 90 days after the person receives a notice of the outcome of the solicitation. If such a complaint is filed, it shall be consolidated with any application for the approval of contracts, under sec.25.169 of this title (relating to Approval of Resources Procured Through Solicitation). sec.25.169. Approval of Resources Procured Through Solicitation. (a) Application. An electric utility seeking commission approval or certification of contracts for resources shall request such approval pursuant to the provisions of this section. Except as provided in paragraph (2) of this subsection, the commission will consider a request for approval or certification of a contract for resources only if the commission has approved the electric utility's preliminary resource plan and the electric utility has conducted a competitive resource solicitation prior to filing of the application for approval or certification of a contract. (1) An electric utility that has conducted a competitive resource solicitation pursuant to sec.25.168 of this title (relating to Solicitation of Resources) shall submit its proposed final integrated resource plan for commission review. (2) An electric utility applying for contract approval pursuant to sec.25.161(b)(3) of this title (relating to Integrated Resource Plan) shall submit its proposed contract for resources for commission review. The commission shall certify the contract on finding that the contract is reasonable. Nothing in this paragraph is intended to alter or amend existing wholesale power supply contracts. (b) Procedure. The commission shall, on request by an affected person and within 90 days after the date an electric utility files its final integrated resource plan under this section, convene a public hearing on the reasonableness and cost-effectiveness of the proposed final plan. Interested persons may intervene in the proceeding not later than 45 days after the date on which the electric utility files its resource plan. The time for providing responses to requests for information may be shortened on motion of any party and for a showing of good cause. The commission shall make its determination within 90 days after the date the proposed contract for resources is submitted by an electric utility pursuant to sec.25.161(b)(3) of this title. Otherwise, the commission shall make its determination and issue a final order within 180 days after the date the electric utility files the proposed final plan. The commission may adopt a schedule for considering a final plan in less than 180 days if the circumstances warrant it. (c) Filing requirements. After conducting solicitations and negotiating contracts, an electric utility shall submit to the commission a proposed final integrated resource plan. The application shall be assigned a new control number. The evidence and orders that are part of the electric utility's preliminary plan filing are incorporated into the final integrated resource plan proceeding by reference. The application shall include all testimony supporting the final plan. The proposed final plan must include: (1) the contracts for resources and the following information concerning resources that the electric utility proposes to acquire: (A) the reliability of the proposed resource, the financial condition of the provider, and the safety of that resource contract; (B) whether the contract would unreasonably impair the continued reliability of electric systems affected by the purchase after giving consideration to consistently applied regional or national reliability standards, guidelines, or criteria; and (C) whether the purchase can reasonably be expected to produce benefits to customers of the purchasing electric utility; (2) information about the integrated resource planning and solicitation processes including: (A) a copy of the order on the preliminary integrated resource plan and any documents required by an order of the commission or the Administrative Law Judge; (B) the results of the solicitation including: (i) the number, type, and size (in megawatts and megawatt-hours) of bids received; (ii) a description of the evaluation process and any related methods, manuals, formulas, or processes; (iii) a description of the negotiation process; and (iv) a demonstration that the solicitation, evaluation, and selection were conducted in accordance with the specific criteria included in the preliminary plan; (3) a description of the plan to achieve equity among customer classes and provide demand-side programs to each customer class including tenants and low- income ratepayers; (4) an action plan covering a period of three years and the methods by which the electric utility intends to monitor resources after selection and acquisition; (5) if the electric utility accepts a bid submitted under sec.25.168(f) of this title, the terms and conditions under which the electric utility will provide resources to meet a need identified in the preliminary plan, the details of the verification and evaluation plan for the demand-side resource, and any information necessary to satisfy all the standards of sec.25.168(f) and (g) of this title; (6) if the electric utility signed a contract for resources with its affiliate, any information necessary to satisfy all the standards of sec.25.168(g) of this title; (7) proposed timely cost recovery factors, if any, and the data necessary to reconcile existing timely cost recovery factors, if any; and (8) an application for a certificate of convenience and necessity, if necessary. (d) Notice. The electric utility shall file copies of its application under this section with the filing clerk of the commission, the Office of Public Utility Counsel, and any intervenors in the proceeding. The electric utility shall also provide notice of the filing by publication in its service area, to any intervenor in its preliminary integrated resource plan proceeding, to any bidder in its solicitation, and to any person who has requested, in writing, to be notified of resource planning matters. The notice shall be completed not later than 15 days after the filing of the application. sec.25.170. Hearing on the Final Integrated Resource Plan. (a) Scope. At the hearing, any interested person may intervene, present evidence, and cross- examine witnesses regarding the reasonableness and cost- effectiveness of the proposed final plan. Parties will not be allowed to litigate or conduct discovery on issues that were litigated or could have been litigated in connection with the filing of the electric utility's preliminary plan. (b) Discovery. To the extent permitted by federal law, the commission may issue a written order for access to the books, accounts, memoranda, contracts, or records of any exempt wholesale generator or power marketer selling energy at wholesale to an electric utility, if the examination is required for the effective discharge of the commission's regulatory responsibilities under the Public Utility Regulatory Act, except that if the commission issues such an order, the books, accounts, memoranda, contracts, and records obtained by the commission are confidential and not subject to disclosure under Chapter 552, Government Code. (c) Commission determinations. After the hearing, the commission shall determine whether: (1) to certify the contracts. In making this determination the commission shall consider: (A) the reliability of the proposed resource, the financial condition of the provider, and the safety of the resource; (B) whether the contract would unreasonably impair the continued reliability of electric systems affected by the purchase after giving consideration to consistently applied regional or national reliability standards, guidelines, or criteria; and (C) whether the purchase can reasonably be expected to produce benefits to customers of the purchasing electric utility. Commission certification of a resource contract does not affect the resource provider's obligation to comply with all applicable environmental and siting regulations; (2) the electric utility's proposed final plan was developed in accordance with the preliminary plan and commission rules. In making this determination the commission shall consider whether: (A) the electric utility has met the requirements of applicable commission orders, if any; (B) the resource solicitations, evaluations, selections, and rejections were conducted in accordance with the specific criteria included in the preliminary plan; and (C) the electric utility's proposed final plan is cost-effective and provides reliable energy service at lowest reasonable system cost as defined in sec.25.161(f) of this title (relating to Integrated Resource Planning); (3) the final plan is equitable among customer classes and provides demand-side programs to each customer class, including tenants and low-income ratepayers; (4) the electric utility has an adequate plan to acquire and monitor the resources; (5) the commission should certify any electric utility bid submitted under sec.25.168(f) of this title (relating to Solicitation of Resources) that resulted from the solicitations; (6) the electric utility treated and considered its affiliate's bid in the same manner it treated and considered other bids intended to meet the same resource needs and complied with the requirements of sec.25.168(g) of this title. Further, if the electric utility requests certification of a contract with the electric utility's affiliate, the commission shall determine, in connection with such purchase, whether: (A) the transaction will benefit consumers; (B) the transaction violates any state law, including least-cost planning; (C) the transaction provides the electric utility's affiliate any unfair competitive advantage by virtue of its affiliation or association with the electric utility; (D) the transaction is in the public interest; and (E) the commission has sufficient regulatory authority, resources, and access to the books and records of the electric utility and its affiliate to make these determinations; (7) the commission should grant any request for a timely cost recovery factor, and if so, the mechanism and level of such factor, including the reconciliation of any existing factor; and (8) the commission should grant a requested certificate of convenience and necessity for an electric utility-owned resource addition. (d) Final order. In order to approve the final plan and contracts for resources the commission must make an affirmative finding regarding all matters set forth in subsection (c) of this section, except subsection (c)(5) and (c)(7) of this section. The commission shall take into consideration its findings on subsection (c)(5) and (c)(7) of this section in deciding whether to approve the final plan. In its order, the commission shall approve the final plan, modify the final plan, or, if necessary, remand the final plan for additional proceedings. sec.25.171. Certificate of Convenience and Necessity for Generation Facilities. In determining whether to grant a requested certificate of convenience and necessity for new generating facilities under the integrated resource planning process, the commission shall consider the effect of the granting of a certificate on the recipient of the certificate and on any electric utility of the same kind already serving the proximate area. The commission shall also consider other factors such as community values, recreational and park areas, historical and aesthetic values, environmental integrity, and the probable improvement of service or lowering of cost to consumers in that area if the certificate is granted. The commission shall grant the certificate as part of the approval of the final plan if it finds that: (1) the proposed addition is necessary under the final plan. In making its determination, the commission shall consider the following factors related to the public interest: (A) whether the solicitation was conducted in a manner consistent with the preliminary plan and the resource selection criteria; (B) whether any of the bids rejected in the solicitation would result in a more appropriate sharing of future risks among the parties to the contract and the electric utility's customers as compared to the proposed generating unit; and (C) whether the electric utility submitted a bid for a rate-base addition in the solicitation and whether the cost and technical characteristics of the generating unit for which the certificate is requested were known to bidders at the time the solicitation was issued, and if not, whether there is a reasonable likelihood that a new solicitation would result in lower-cost and higher quality bids that would better serve the public interest than the proposed generating unit; (2) the proposed addition is the best and most economical choice of technology for that service area. If an electric utility conducts a solicitation, rejects all bids, and applies for a certificate for a new generating facility, the reported costs of the resource alternatives offered in the resource solicitation shall be considered by the commission at the time of certification and in any prudence proceeding to investigate the reasonable costs of the generating facility. There shall be a rebuttable presumption that the rejected bids constitute a market-based assessment of the value of new generating units in the context of any determination of the appropriate costs to include in the rate base of the electric utility; and (3) cost-effective conservation and other cost-effective alternative energy sources cannot reasonably meet the need. 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. Filed with the Office of the Secretary of State on May 28, 1998. TRD-9808667 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 17, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 936-7308 SUBCHAPTER L. Nuclear Decommissioning 16 TAC sec.25.301 The Public Utility Commission of Texas adopts new sec.25.301, relating to Nuclear Decommissioning Trust, without changes to the proposed text as published in the March 20, 1998 Texas Register (23 TexReg 2932). This new section is adopted under Project Number 17709. Section 25.301 replaces sec.23.59 of this title (relating to Nuclear Decommissioning Trusts). This section is necessary to ensure less litigation on the issue of decommissioning funds, more stability in the decommissioning trusts held on behalf of ratepayers, greater earnings for the utilities and a subsequent reduction in the ratepayers' contribution to funding for decommissioning due to utilities being able to invest decommissioning funds in certain types of mutual funds. The Appropriations Act of 1997, HB 1, Article IX, Section 167 (Section 167) requires that each state agency review and consider for readoption each rule adopted by that agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure Act). Such reviews shall include, at a minimum, an assessment by the agency as to whether the reason for adopting or readopting the rule continues to exist. As part of this review process, the commission is reorganizing its current substantive rules located in Chapter 23 to (1) satisfy the requirements of Section 167; (2) repeal rules no longer needed; (3) update existing rules to reflect changes in the industries regulated by the commission; (4) do clean-up amendments made necessary by changes in law and commission organizational structure and practices; (5) reorganize rules into new chapters to facilitate future amendments and provide room for expansion; and (6) reorganize the rules according to the industry to which they apply. The section concerning nuclear decommissioning trusts has been moved to Chapter 25, Substantive Rules Applicable to Electric Service Providers. The commission had requested specific comments regarding whether the reason for adopting sec.23.59 continues to exist in adopting this section to replace sec.23.59. The commission received no comments on proposed sec.25.301. The commission finds that the reason for adopting sec.23.59 continues to exist in adopting sec.25.301 to replace sec.23.59. This section is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission 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. 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. Filed with the Office of the Secretary of State on May 29, 1998. TRD-9808697 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 18, 1998 Proposal publication date: March 20, 1998 For further information, please call: (512) 936-7308 CHAPTER 26. Substantive Rules Applicable to Telecommunications Service Providers SUBCHAPTER H. Electronic Publishing 16 TAC sec.26.161 The Public Utility Commission of Texas adopts new sec.26.161, relating to Electronic Publishing without changes to the proposed text as published in the March 20, 1998 type-name="italic">Texas Register (23 TexReg 2936). This new section is adopted under Project Number 17709. Section 26.161 replaces sec.23.100 of this title (relating to Electronic Publishing). This section is necessary to ensure that an incumbent local exchange company will file with the commission certain information regarding its compliance review requirements as set out in the Public Utility Regulatory Act. The Appropriations Act of 1997, HB 1, Article IX, Section 167 (Section 167) requires that each state agency review and consider for readoption each rule adopted by that agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure Act). Such reviews shall include, at a minimum, an assessment by the agency as to whether the reason for adopting or readopting the rule continues to exist. As part of this review process, the commission is reorganizing its current substantive rules located in Chapter 23 to (1) satisfy the requirements of Section 167; (2) repeal rules no longer needed; (3) update existing rules to reflect changes in the industries regulated by the commission; (4) do clean-up amendments made necessary by changes in law and commission organizational structure and practices; (5) reorganize rules into new chapters to facilitate future amendments and provide room for expansion; and (6) reorganize the rules according to the industry to which they apply. The section concerning electronic publishing has been moved to Chapter 26, Substantive Rules Applicable to Telecommunications Service Providers. The commission had requested specific comments regarding whether the reason for adopting sec.23.100 continues to exist in adopting this section to replace sec.23.100. The commission received no comments on proposed sec.26.161. The commission finds that the reason for adopting sec.23.100 continues to exist in adopting sec.26.161 to replace sec.23.100. This section is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; and specifically PURA Chapter 63 relating to Electronic Publishing. Cross Index to Statutes: Public Utility Regulatory Act sec.14.002, and Chapter 63. 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. Filed with the Office of the Secretary of State on May 29, 1998. TRD-9808698 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: June 18, 1998 Proposal publication date: March 20, 1998 For further information, please call: (512) 936-7308 TITLE 19. EDUCATION PART I. Texas Higher Education Coordinating Board CHAPTER 21. Student Services SUBCHAPTER HH. Exemption Program for Texas Air and Army National Guard/ROTC Students 19 TAC sec.sec.21.1055-21.1060, 21.1062-21.1069 The Texas Higher Education Coordinating Board adopts sec.sec.21.1055 - 21.1059, 21.1062 - 21.1065, 21.1067, 21.1068 concerning Exemption Program for Texas Air and Army National Guard/ROTC Students, with changes to the proposed text as published in the March 13, 1998 issue of the Texas Register (23 TexReg 2687). Section 21.1060, 21.1066, and 21.1069, concerning Exemption Program for Texas Air and Army National Guard/ROTC Students, are adopted without changes and will not be republished. The amendments to the rules are being proposed to clarify the responsibilities of the Coordinating Board, the Adjutant General's Department and the recruiters; specify the amount to be included in the award for room and board; clarify repayment requirements if the student does not fulfill his/her contract; clarify requirements for eligibility to participate in the program; and clarify the application process and contract terms. Comments were received from the Adjutant General's Office regarding active duty in the United States military by graduates of the program; and the specific duties to be carried out by the Board and the Adjutant General's Office, respectively. The agency agreed with the comments and changes were made accordingly. The amended rules are adopted under Texas Education Code, sec.sec.54.212 and 61.027, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules concerning Exemption Program for Texas Air and Army National Guard/ROTC Students. sec.21.1055. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise: (1) Adjutant General -- The Adjutant General's Office to which the Texas Air and Army National Guard report. (2) Board -- The Texas Higher Education Coordinating Board. (3) Chief Executive Officer -- The President of a participating ROTC institution. (4) Commissioner -- The commissioner of higher education, the chief executive officer of the board. (5) Financial need -- The cost of attendance at an eligible institution less the expected family contribution and any gift aid for which the student is eligible. The cost of attendance and family contribution are to be determined in accordance with board guidelines. The cost of attendance includes tuition, fees, books and supplies and living expenses. (6) Full-time Student -- An individual enrolled for the equivalent of at least 12 semester credit hours each semester term, including military science courses and aerospace studies. (7) Order of Merit List -- A list of exemption program applicants, submitted on a form designed by the Board and signed by the program officer of an ROTC institution, ranking the applicants under consideration for awards through the program. (8) Recruiter -- An individual employed as a National Guard recruiter by the Adjutant General's Office. (9) Resident -- A resident of the State of Texas as determined in accordance with Chapter 21, Subchapter B of this chapter (relating to Determining Residence Status). Nonresident students are excluded from this program. (10) Room and Board Exemption -- An exemption from the payment of an eligible institution's fees and charges for lodging and board as described in sec.21.1062(b) of this title (relating to Award Amounts). (11) ROTC -- the Reserve Officers Training Corps for the Texas Air National Guard and the Texas Army National Guard. (12) ROTC Institution -- An institution of higher education, as defined by Texas Education Code, sec.61.003, that maintains a Reserve Officers' Training Corps (ROTC). (13) Texas National Guard ROTC Scholarship Volunteer Program (TXNG/RSVP) -- A second name for the Exemption Program for Texas Air and Army National Guard/ROTC Students, the program described in this subchapter. (14) Tuition and Fee Exemption -- An exemption from the payment of all of an eligible institution's dues, fees, and enrollment charges, including correspondence courses, general property deposit fees, and student services fees. This does not include fees or charges for clothing, books or supplies. sec.21.1056. Responsibilities of the Adjutant General's Office. The Adjutant General's Office shall be responsible for: (1) (No Change) (2) dissemination of accurate and up-to-date program information through the use of National Guard recruiting offices; (3) projections of staffing requirements for the Texas Air and Army National Guard; and, on that basis, the number of new awards and the share of each year's new awards to go to the Army ROTC and to the Air Force ROTC; (4) tracking of students/participating Air and Army National Guardsmen through the period of their exemption program contract; (5) application of rules and procedures governing leaves of absence, probations or waivers of repayment requirements under special circumstances when cases are forwarded by institution selection committees or National Guard Units; and (6) determine which college graduates will be allowed to go into active military duty prior to serving in the Texas National Guard; however, no more than 10 percent of each year's graduates may be offered this option, beginning with the Fall 1998 semester. sec.21.1057. Selection Committee. (a) Membership. Each eligible institution shall create a three-member selection committee. Two members of the committee are to be nominated by the institution's Chief Executive Officer and shall include a military or aerospace science faculty member. A commissioned officer of the Texas Air or Army National Guard shall be appointed to each committee by the Adjutant General. Final membership of the committees shall be designated by the commissioner. (b) Duties. The selection committee shall: (1) review applications and conduct interviews of students who have applied for the exemption and determine which students qualify to receive the exemption, taking the following criteria into consideration: (A)-(B) (No Change) (C) projected staffing requirements for the Texas Air and Army National Guard; and (D) the academic performance of the applicant. (2) (No Change) (3) determine whether probation will be granted in accordance with ROTC guidelines to a student who has failed to meet program performance standards, (4) determine whether an exemption recipient who loses his/her exempt status may serve the remainder of his/her contractual obligation as an enlisted member of the Texas Air or Army National Guard, subject to being accepted into and maintaining active drilling membership in the Texas Air or Army National Guard in the same manner as any other person; and (5) refer special cases involving leaves of absence or a waiver of repayment to the Adjutant General's Office for resolution. sec.21.1058. Eligible Institution. (a) (No Change) (b) The chief executive officer of an eligible institution which chooses to participate in the exemption program shall designate a Texas Air or Army National Guard/ROTC Exemption Program Officer. Unless otherwise specified by the chief executive officer of the institution, the Director of Student Financial Aid of the institution shall be the board's on-campus agent to certify all institutional activities with respect to this program. sec.21.1059. Eligible Student. An eligible student is an undergraduate student who meets the following requirements: (1) is admitted to the institution's Reserve Officers' Training Corps program or is a participant in such a program; (2) becomes a member of the Texas Army National Guard or the Texas Air National Guard and maintains satisfactory performance as prescribed by the Adjutant General's department as a member in good standing during the terms of enrollment and service of the student's contractual obligation; (3)-(4) (No Change) (5) enters into a contract with the ROTC institution acting on behalf of the State of Texas to accept a commission in the Texas Air or Army National Guard as an officer on graduation from the ROTC institution or, for a limited number of participants, completes active duty with the United States Armed Forces and serves no less than four years as a commissioned officer; (6) if in the Army National Guard and able to gain a contract into the advanced course of ROTC as a junior in college, no later than the beginning of the third year of ROTC, requests and acquires a Guaranteed Reserve Forces Duty commission (as opposed to an active duty commission) during the accessions process upon graduation; (7) if in the Army National Guard and unable to gain a contract into the advanced course of ROTC as a junior in college, enrolls in the Texas National Guard Officer Candidate School (OCS) in the summer following his/her junior year and continues in OCS until he/she graduates from OCS. Upon graduation from OCS accepts a commission in the Texas National Guard; (8) passes the physical examination and police records background check required for becoming a commissioned officer in the Texas Air or Army National Guard; (9) has been accepted for admission to the participating ROTC institution; and (10) if a member of the Reserve Forces of the United States Armed Forces at the time of application for an exemption, acquires a transfer to the Texas National Guard by the deadline set by the board. sec.21.1062. Award Amounts. (a) Tuition and fee exemption amounts. Selected recipients may receive an exemption for the amount of their actual tuition and fee charges at their institution for up to four full academic years (including summer terms when funds are available) while enrolled as undergraduates. If the student's program of study extends to more than four years, the exemption will not be extended to that additional time period. (b) Room and board exemption amounts. Selected recipients may receive an exemption for an amount equal to their actual dormitory room and board expenses, but not to exceed the average on-campus room and board figure reflected in the college's typical student budget on file at the board for up to two years. If the student is not living in campus housing, but the institution does have such housing, the amount to be awarded as a room and board exemption is the average charged for a student in that institution's campus housing. If the institution does not have campus housing, the exemption may equal the average room and board allowance reported to the board by public universities for that year for students who are receiving some type of financial assistance. (c) Exemptions and reimbursements to students. If student selection is completed prior to the payment of tuition and fees or room and board for a particular term, the institution is to exempt the selected students from the payment of the appropriate charges. If selection is completed after the payment of such charges, the board shall reimburse students for the appropriate amounts as indicated in subsections (a) and (b) of this section. (d) (No Change) sec.21.1063. Allocation of Exemptions among Institutions. (a) The maximum number of new exemptions that can be awarded statewide each year is 150. The actual number of new awards to be made in any year shall be determined by the Adjutant General's Office based on demand and available funding. If demand and funding permit it, each participating ROTC institution shall be allocated exemptions for at least two new students each academic year. The maximum number of exempt students for each ROTC institution will be determined by the percentage of the institution's Army and Air Force Reserve Officers' Training Corps enrollment in relation to statewide Army and Air Force Reserve Officers' Training Corps enrollment. (b) (No Change) (c) Institutions will have until May 15 of each year to inform the Board of their ranking of exemption applicants for the following year. If they fail to have enough screened and ranked applicants to use their full allotment as of that date, the board will reallocate the unused slots to other eligible institutions which have used their full allotments. sec.21.1064. Awards for Less than Four Years. (a) Partial awards. An institution's selection committee may re-award the unused portion of an exemption left when an exemption recipient drops out of the program. However, the student selected to fill the unfinished exemption must meet the eligible student requirements as outlined in sec.21.1059 of this title (relating to Eligible Student); (b) Contractual obligations. Upon graduation from college, a participant receiving fewer than four years' tuition and fee exemption and/or less than two years' room and board exemption will have to meet the same contractual obligations as students receiving the exemptions as entering freshmen (i.e., four years' service as a commissioned officer in the Texas Air or Army National Guard, or full repayment of the value of the exemptions extended, plus interest, if he/she fails to complete the requirements of the contract.) sec.21.1065. The Application Process. (a) To apply for an exemption, the student must complete the full application packet for the Texas Air or Army National Guard/ROTC Exemption Program and submit it to a recruiter or to a full, assistant or associate professor of military or aerospace science at a participating ROTC institution by the deadline designated by the institution for which he/she wishes to receive an exemption award. The packet includes an exemption program application, an essay form, a listing of extracurricular activities and an official transcript (including all but the current term's grades) from the most recent school attended. (b) If the packet is given to a professor, the professor will review it for completeness and forward it to a recruiter. (c) The recruiter will check the application packets for completeness, pre- screen applicants for their acceptability for the National Guard and forward paperwork for applicants passing the pre-screening process to the relevant institutions as soon as possible, but no later than May 1. (d) The selection committee at the institution will review applications and rank applicants according to a set of criteria developed by the Board and the Adjutant General's Office. (e) Top candidates will be asked to sit for at least one interview, to be conducted using a set of questions provided by the Board and Adjutant General's Office. (f) By May 15, the selection committee will finalize its decisions and send the Board an Order of Merit List certified by the institution's program officer. (g) Selected students will be notified by the program officer of their awards pending successful induction into the Texas National Guard. (h) Once selected students are inducted into the Texas National Guard, the program officer and the students are to sign the exemption program contracts, finalizing the award process. (i) No school may add students to its Order of Merit List after May 15, but if a top-ranked student fails to use an offered award, the school may offer his/her award to an alternate from its May 15 listing. If no additional alternates are on the list, the award will be reallocated to another institution. sec.21.1067. Noncompliance. (a) If the student/participating Air or Army National Guardsman fails to fulfill any obligation outlined in the exemption program contract, he or she shall be in noncompliance with the contract and will be required to repay his/her contractual obligation to the state unless the student has been granted probationary status by his/her institution's selection committee or the participating Air or Army National Guardsman is granted probationary status by the Adjutant General's Office. Such repayment requirements will be outlined in the promissory note signed by the student upon receipt of an exemption under this program. (b) (No Change) (c) If an exemption recipient, after graduation, leaves the Texas National Guard to serve in another component of the United States Military, the exemption recipient will be obligated to serve for four years in the Texas Army or Air National Guard prior to separation from the military or repay the State of Texas for the funds awarded him/her through the Exemption Program for Texas Air and Army National Guard/ROTC Students. (d) If an exemption recipient fails to qualify for a commission as a participant in this program, fulfillment of his/her obligation to Texas may be accomplished through service for an equivalent number of years as an enlisted member of the Texas National Guard. (e) If, after graduation, an exemption recipient joins a National Guard unit of a state other than Texas, he or she will be obligated to repay the State of Texas for the funds awarded through this program. sec.21.1068. Probation for Participating Students. (a) If an exemption recipient fails to meet the performance standards of the program, he/she will be placed on probationary status by the Professor of Military Sciences or Professor of Aerospace Studies serving on the selection committee. Such status shall not last for more than two terms. (b) While in a probationary status, the student may continue to receive program funds. (c) If the student raises his/her performance during the probationary period to meet program standards, full eligibility for the exemption program may be reestablished. (d) If the student fails to meet program standards by the end of the probationary period, the student will be considered to be in noncompliance and the repayment provisions outlined in sec.21.1067 of this title (relating to Noncompliance) apply. (e) No exemption recipient may be granted probation more than twice during his/her enrollment period. 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. Filed with the Office of the Secretary of State on May 29, 1998. TRD-9808733 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: June 18, 1998 Proposal publication date: March 13, 1998 For further information, please call: (512) 483-6162 TITLE 22. EXAMINING BOARDS PART XVII. Texas State Board of Plumbing Examiners CHAPTER 363.Examination 22 TAC sec.363.4 The Texas State Board of Plumbing Examiners adopts a new rule sec.363.4, stating that applicants who fail to appear for an examination will forfeit the examination fee and must re-apply with a new application and fee without changes to the proposed text as published in the April 3, 1998 issue of the Texas Register, (23 TexReg 3413). The purpose of the rule amendment will assist applicants for examination in receiving credit for examination fees paid when the applicant has a legitimate reason to reschedule an appointment. The applicants will also benefit by having a shorter waiting period to take an examination. Fewer applicants will elect not to appear for their examination due to the penalty fee. Penalties will cover board costs for scheduling. No comments were received regarding the adopted of the amendment. This new amendment is adopted under the authority of Texas Civil Statutes Annotated, Article 6243-101, sec.5(a), sec.8(a) and sec.13(a). (Vernon's Supp. 1998). No other statute, article, or code is affected by this adopted amendment. sec.363.4. Reporting for Examination. (a) Each applicant must report promptly at the place of the examination. (b) If an applicant is scheduled for an examination and cannot appear, the applicant must notify the Texas State Board of Plumbing Examiners in writing, postmarked no later than ten business days before the original examination date. (c) An applicant is allowed one emergency reschedule without having to re-apply with a new application and fee. (d) An applicant must request the emergency reschedule in writing with an explanation of the emergency, postmarked no later than five business days after the examination date. Business or work schedule conflicts are not considered emergencies. (e) An applicant who fails to appear or does not give the required ten business days notice or does not have an excused emergency, shall forfeit the examination fee and must re-apply with a new application and fee. (f) If the applicant has an excused emergency, the applicant has five business days after the examination date to notify the Board and reschedule the examination. If the applicant does not reschedule the examination within the five business days after the examination date, the applicant must re-apply with a new application and fee. (g) The following are considered excused emergencies: (1) Death in family; (2) Illness or hospitalization of applicant or applicants immediate family; (3) Automobile accident on day of the examination; (4) Other reasons approved by the Chief Examiner. (h) Emergencies will be subject to verification by the Chief Examiner. 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. Filed with the Office of the Secretary of State on May 26, 1998. TRD-9808537 Robert L. Maxwell Chief of Field Services/Investigations Texas State Board of Plumbing Examiners Effective date: June 15, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 458-2145, Ext. 233 TITLE 30. ENVIRONMENTAL QUALITY PART I. Texas Natural Resource Conservation Commission CHAPTER 205. General Permits for Waste Discharges SUBCHAPTER A. General Permits for Waste Discharges 30 TAC sec.sec.205.1-205.6 The Texas Natural Resource Conservation Commission (commission) adopts new Chapter 205, sec.sec.205.1-205.6, relating to general permits for waste discharges. Sections 205.1-205.5 are adopted with changes to the proposed text as published in the December 19, 1997, issue of the Texas Register (22 TexReg 12418). Section 205.6 is adopted without changes and will not be republished. EXPLANATION OF THE ADOPTED RULE This new adopted chapter will implement amended Texas Water Code, sec.26.040, which became law as an act of the 75th Texas Legislature (1997). The adopted rule describes the procedures the commission will use to develop and issue general permits, as well as the procedures to authorize discharges under the terms of any general permit. These permits may supersede some authorizations-by- rule currently utilized by the commission, and will offer an alternative to individual permits for eligible dischargers. Current authorizations-by-rule will remain in effect until expressly superseded by commission action. General permits can be issued for situations where a number of different dischargers are subject to the same discharge requirements. Instead of individual permits being issued for each discharger, one "umbrella" permit is issued by the commission, to authorize several facilities of the same category. General permits may cover discharges in one geographical area or may cover a category of discharges statewide. The adopted rule specifies that general permits may be issued for categories of dischargers that engage in the same or similar types of operations, discharge the same types of waste, are subject to the same effluent limitations and/or operating conditions, and are subject to the same or similar monitoring requirements. The category of discharges covered by a general permit will not include discharges of pollutants that will cause significant adverse effects to water quality, nor would any general permit allow a discharge of more than 500,000 gallons into surface water during any 24-hour period as provided by sec.26.040. New sec.205.1 (relating to Definitions) contains definitions of key terms used in this chapter. In response to comments, some definitions were revised or deleted for clarification purposes. New sec.205.2 (relating to Purpose and Applicability) describes the authority of the commission in issuing general permits, consistent with sec.26.040 of the Texas Water Code. Minor changes were made to the rule in response to comments concerning the types of discharges that may not be authorized by general permit. New sec.205.3 (relating to Public Notice, Public Meetings, and Public Comment) specifies the public participation processes the commission will use to receive, analyze, and respond to public comment on each general permit. Revisions were made to clarify when a public meeting may be held, and to specify the applicability of the provisions of this section depending on the type of general permit action involved (new, amendment, renewal, etc.). Revisions were also made to the mailed notice requirements. New sec.205.4 (relating to Authorizations and Notices of Intent) describes the notification and authorization procedures applicable to any discharger seeking coverage under a general permit. Clarifying changes were made in response to comments concerning coverage of new outfalls, reasons for denial or suspension of a discharger's authorization under a general permit, and notification of notices of intent (NOIs) to Harris County and potentially to other local governments. New sec.205.5 (relating to Permit Duration, Amendment and Renewal) establishes the term of general permits, and the procedures for permit renewals for amending the requirements and/or limitations of a general permit. Revisions were made to this section concerning renewals and to reinforce the requirement that general permits maintain consistency with the Texas Coastal Management Program. New sec.205.6 (relating to Annual Fee Assessments) provides that the commission shall impose an annual assessment on a discharger in accordance with sec.sec.305.501-305.507 of this title (relating to the Waste Treatment Inspection Fee Program) and in accordance with sec.320.21 of this title (relating to Water Quality Assessment Fees). FINAL REGULATORY IMPACT ASSESSMENT The commission has reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code sec.2001.0225 and has determined that the rulemaking is not subject to sec.2001.0225 because it does not meet the definition of a "major environmental rule" as defined in the Texas Government Code, and it does not meet any of the four applicability requirements listed in sec.2001.0225(a). TAKINGS IMPACT ASSESSMENT The commission has prepared a Takings Impact Assessment for this rule pursuant to Texas Government Code, sec.2007.043. The following is a summary of that assessment. The specific purpose of the rule is to implement House Bill 1542, which amended Texas Water Code, sec.26.040, to authorize the commission, under limited circumstances, to issue general permits authorizing the discharge of waste. The specific purpose of the legislation was to ease the burden on the commission and the regulated community by allowing the issuance of general permits in place of individual permits, while still providing protection to human health and the environment. The rule will advance this specific purpose by providing a process for the commission to adopt general permits authorizing certain waste discharge activities which qualify for regulation by general permit, rather than by individual permit, under the parameters set out in the legislation. Promulgation and enforcement of this rule will not affect private real property which is the subject of the rule, because the rule will not involve a physical invasion, dedication, or exaction of real property which is the subject of the rule, will not restrict or limit a property right that would otherwise exist, and will not eliminate all economic uses of private property which is the subject of the rule. COASTAL MANAGEMENT PROGRAM (CMP) The commission has reviewed this rulemaking for consistency with the 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. The following is a summary of that determination. CMP goals applicable to the rule include the protection, restoration, and enhancement of the diversity, quality, quantity, functions, and values of coastal natural resource areas. CMP policies applicable to the rule include the requirement that discharges of municipal and industrial wastewater in the coastal zone comply with the following: (1) discharges shall comply with water-quality-based effluent limits, (2) discharges that increase pollutant loadings to coastal waters shall not impair designated uses of coastal waters and shall not significantly degrade coastal water quality unless necessary for important economic or social development, and (3) new wastewater outfalls shall be located where they will not adversely affect critical areas to the greatest extent practicable. Promulgation and enforcement of this rule will not violate (exceed) any standards identified in the applicable CMP goals and policies because the rule limits the issuance of general permits to those categories of discharges that will not cause significant adverse effects to surface water quality. In keeping with this requirement, specific general permits must include permit conditions and effluent limitations that will maintain water quality standards. Through the specific general permits, the commission will insure that discharges comply with water-quality-based effluent limits, and that existing and designated uses will be protected, in keeping with the state's antidegradation policy. The rule also provides the executive director with the discretion to deny or suspend a discharger's authority to discharge under a general permit if it is determined that the discharge is a significant contributor of pollutants impairing surface or ground water quality. Among other facts, the executive director may consider the location of the discharge. In addition, the rule specifies that authority under a general permit may be denied or suspended if the discharge poses or could pose an adverse impact upon a critical area as defined in the Coastal Coordination Act rules, 31 TAC sec.501.3, and there is a practicable alternative to the discharge location. HEARINGS AND COMMENTERS A public hearing was held on January 14, 1998. No oral testimony was received at the hearing. The public comment period closed on January 23, 1998. Five commenters submitted written comments. Texas Utilities Service, Inc. (TUS) wrote in support of the rule on behalf of Texas Utilities Electric Company, Texas Utilities Fuel Company, Texas Utilities Mining Company, and ENSERCH Corporation. The law firm of Henry, Lowerre, Johnson, Hess & Frederick (Henry, Lowerre) wrote in opposition to the rule on behalf of ACCORD Agriculture, Inc., ACAFO, and the Lone Star Chapter of the Sierra Club. Three commenters did not generally support or oppose the rulemaking, but suggested changes: Harris County Pollution Control Department (HCPCD), Office of Public Interest Counsel of the Texas Natural Resource Conservation Commission (OPIC), and an individual. ANALYSIS OF TESTIMONY Henry, Lowerre commented that the consistency determination regarding the CMP is inadequate, stating that the proposed rule is inconsistent with the goals and policies of the Texas CMP as provided in the rules of the Coastal Coordination Council. More specifically, the commenter noted that the rule is inconsistent with 31 TAC sec.501.12(9) of the council rules because the rule does not provide for public participation in individual permit determinations for discharges that may adversely affect coastal resources. The commission responds that the rule does not pertain to individual permit determinations. The rule provides for specific public participation processes to consider public comment (sec.205.3), including comments regarding coastal resources for any general permit that is proposed. The CMP rules do not require public participation for each individual permit determination in areas that may affect coastal resources. Rather, it requires public participation in the "ongoing development and implementation of the Texas CMP." Also, because sec.26.040 does not require public participation in determinations regarding specific discharges under a general permit, this action is not inconsistent with the CMP. This is due to a provision in the CMP that states, "a goal or policy may not require an agency...to perform an action that would exceed the constitutional or statutory authority of the agency...to which the goal or policy applies." (Texas Natural Resources Code sec.33.204) The commission further responds that the rulemaking should not result in an adverse effect upon coastal resources because sec.205.2(c)(2) states that a general permit may be issued only when the commission finds that the category of discharges covered by the general permit will not include a discharge of pollutants that will cause significant adverse effects to surface water quality. Henry, Lowerre commented that the rule is inconsistent with 31 TAC sec.501.13(a)(1) of the council rules relating to the CMP goals and policies because the rule fails to ensure that applicants will submit adequate information in an NOI to the commission to make an informed decision on coastal zone discharges. The commission responds that general permits will not be developed from information submitted by an applicant. Instead, the commission will be developing general permits applicable to categories of dischargers. The commission agrees that any general permit it develops that would allow coverage of dischargers in the coastal zone must include a determination that the discharges would comply with the goals and policies of the CMP. To emphasize this point, a new provision has been included in the rule under sec.205.5(f) to address the issue on coastal consistency for such general permits. Henry, Lowerre commented that the rule is inconsistent with sec.501.13(a)(2) because the rule fails to identify the monitoring necessary for dischargers in the coastal zone. The commission responds that sec.205.2(c)(1) requires that general permits issued by the commission include provisions for adequate monitoring by dischargers. The commission intends to require monitoring of discharge quality and quantity by dischargers in a manner similar to what it requires of individual permit holders. Monitoring requirements will be specified, as necessary for a given category of dischargers, in general permits developed in accordance with the rule. Henry, Lowerre commented that the rule is inconsistent with 31 TAC sec.501.14(f)(2)(A - C), because it does not ensure compliance with water quality based effluent limits, it does not ensure that possible impairment of designated uses of coastal waters are avoided, and it does not ensure that new outfalls will not affect critical areas. The commission responds that several specific provisions of the rule ensure that water quality in the coastal zone will be protected, and disagrees with the comment that the rule is inconsistent with the CMP policies. Section 205.2(c)(2) states that a general permit may be issued only when the commission finds the category of discharges covered by the general permit will not include a discharge of pollutants that will cause significant adverse effects to surface water quality. In development of a general permit which would allow a discharge into a surface water body, justification must be developed for permit conditions and effluent limitations which will maintain water quality standards. Additionally, if an NOI should be received by the commission which proposes a discharge location that may impair a water body, sec.205.4(e)(1) - (8) (especially paragraph (3)) provides the executive director with the broad discretion to deny the NOI or to suspend the authorization under the general permit. Additionally, in response to the commenter, the commission has added a new sec.205.4(e)(4) and sec.205.4(f)(6) to the subsection. The new paragraph specifies that it will deny or suspend an NOI when the discharge could impair a designated use of a coastal water or adversely affect a critical area. Henry, Lowerre commented that the consistency determination regarding the coastal management plan is inadequate. The commenter suggested that the rule preamble did not contain an adequate reasoned justification explaining the basis for a determination of consistency with each policy as described in 31 TAC sec.505.22(a)(2). The commission disagrees that a more extensive explanation regarding the consistency of the rule with the CMP is needed. However, in response to comments, the consistency determination has been revised to further explain how the rule will insure general permits are consistent with the goals and policies of the CMP. The revised summary of the consistency determination is included earlier in the preamble. Henry, Lowerre commented that there are no provisions in the rule that specify the contents of general permits, such as criteria for effluent limitations, operating conditions, monitoring requirements, water quality standards review, and antidegradation review. Henry, Lowerre contended that these criteria must be included in any rulemaking. The commission responds that these types of provisions were not included because each criterion mentioned is a specific consideration to be developed for each general permit. General permits will resemble individual permit documents, usually with effluent limitations, sampling, monitoring, and reporting requirements, standard provisions which cite applicable commission rules, and other requirements, all of which will be tailored to the category of dischargers covered. General permits that allow for discharge to surface water bodies will include a technical review for standards compliance. Effluent limitations must not allow for degradation of a water body with high or exceptional quality aquatic life uses. The commission further responds that criteria and conditions of each specific general permit will be subject to review and comment with public participation processes as described in sec.205.3. The commission disagrees with the commenter's argument that further description in the rule is mandatory, based upon Texas Water Code, sec.26.040(k), which states that the commission may adopt rules as necessary to implement and administer this section. Henry, Lowerre questioned whether the rule will limit the size of discharges to ground water in this rulemaking. The commenter stated that such a limitation should be established in the rule, and include other situations for which a general permit would not be appropriate. The commission responds that it will also address the prevention of discharges to ground water in specific permits it develops, rather than in this rule making, for categories of waste which could pose an adverse impact upon ground water. The approach is anticipated to be similar to its existing individual permits and authorizations by rule that require engineered, low-permeability liners for land-based management of waste and irrigation practices that utilize wastewater at the surface through uptake by crops at rates which minimize migration to ground water. The commission further responds that sec.26.040(a) specified situations for which general permits would and would not be appropriate. These limitations are included in the rule under sec.205.2. Henry, Lowerre commented that the rule does not specify revocation provisions as expressly described in Texas Water Code, sec.26.040(j), which must not allow for a contested case hearing. The commission responds that revocation provisions for NOIs are unnecessary in the rule because pursuant to sec.26.040(f) of the Texas Water Code, proposed sec.205.4(d) already provides that the executive director, after written notice, may suspend a discharger's authority to discharge under a general permit and may require a discharger to obtain authorization to discharge under an individual permit. However, the commission also responds to the suggestion by specifying the procedural requirements for revocation of a general permit by revisions to sec.205.3. The rule provisions do not include an opportunity for a contested case hearing on the issue of revocation of a general permit. An individual questioned how the commission intends to apply the rule to existing concentrated animal feeding operations (CAFOs) authorized under Chapter 321 rules or to CAFOs with applications pending under what the commenter describes as the invalidated CAFO rules. The commission responds that Texas Water Code, sec.26.040 specifies that the agency may amend or modify rules previously adopted under the statute, until repeal of the rule. Because of pending litigation, the commission has proposed and may adopt a CAFO general permit and/or amendments to Subchapter B of Chapter 321, as needed. The commission also responds that required notice and opportunity to comment on these actions were made available when the rule and general permit were proposed. An individual questioned whether the commission plans to use general permit authorizations as mechanisms for authorizing air emissions such as was done in Chapter 321, Subchapter K. The commission responds that under appropriate circumstances, such as a CAFO general permit, the commission intends to use a general permit as a mechanism for authorizing air emissions. In such instances, the general permit issued by the commission will contain provisions related to air quality, and rulemaking will be initiated to adopt a rule providing that a person who meets all of the requirements for operating under the general permit is entitled to an air quality standard permit authorization in lieu of the requirement to obtain an air quality permit under 30 TAC Chapter 116. DEFINITIONS (sec.205.1) Henry, Lowerre commented that the rulemaking exceeds the scope of the 1997 legislation (which amended sec.26.040 of the Texas Water Code) and that the commission has no authority to expand the universe of discharges qualifying for general permits beyond any legislative limitations. The commenter contended that the rule would allow the commission to establish general permits for discharges beyond the categories of discharges allowed within the limitations of the amended statute by proposing definitions that expand the universe of discharges qualifying for general permits. The specific comments regarding the definitions are addressed in more detail below. The commission had no intention of expanding the universe of discharges qualifying for a general permit. The commission further maintains that the rulemaking does not subvert the letter and spirit of Texas statute. However, the commission has made some specific language changes to the definitions in the rule that should alleviate the concerns of the commenter. The revisions should clarify the intent of the rule and remedy any misunderstanding that may have arisen regarding the commission's intent. These are explained in more detail in the response to comments regarding specific definitions. Henry, Lowerre expressed concerns over the definition of "same or similar monitoring requirements," stating that the definition needs to be redrafted to assure that any general permits issued will require the same or similar monitoring requirements of all dischargers authorized under the general permit. The commenter contended that the definition, as written, is not specific enough to meet legislative intent. The commission responds that the phrase "can be applied" gave the wrong impression to the commenter and possibly others that the commission seeks more flexibility than what legislation may have intended. The commission will apply the same or similar monitoring requirements in a given general permit. The commission has revised the definition and also the definitions of "general permit" and "same requirements regarding operating conditions" based upon this comment. Henry, Lowerre commented that the definition of "same or substantially similar types of operations" essentially defines the term with a new term of "generating wastewater from similar sources." Additionally, Henry, Lowerre contended that stormwater management and control activities by municipalities is an overly broad term to define an operation. The commenter recommended that the commission develop an exclusive list of operations that might qualify for general permits, or list characteristics that define similar types of operations. The commission agrees with some of the comments, and as a result, the rule will not define the term as operations having similar sources of wastewater. Instead, the definition has been revised to list characteristics of similar type operations, as suggested. The commission disagrees that developing a general permit for municipal storm water discharges would be overly broad. The commission purposely included the term "same or substantially similar types of operations" for state and federal consistency. This term is also found in 40 CFR sec.122.28. Just as the term has not deterred the U.S. Environmental Protection Agency from developing a Phase II municipal storm water permitting strategy based upon the use of general permits, the commission believes it has adequate authority to use general permits for broad categories of operations. Henry, Lowerre commented that the definition of "same requirements regarding effluent limitations" appears to frustrate an express legislative limitation. The commission responds that it has no such intent, but that the agency simply wishes to make clear what specific conditions must be included in general permits. In response to the comment, the commission has analyzed this issue and now concludes that a definition of the term is unnecessary and has deleted it. Henry, Lowerre commented that the definition of "same types of waste" appears to frustrate an express legislative limitation. The commenter contended that same types of waste would have not only the same constituents, but would also have them in similar concentrations. He provided an example to illustrate why this might be so. The commission responds by agreeing with the commenter in part. Many specific categories of waste are expected to have similar concentrations of pollutants, but this may not always be the case. For instance, most municipal treatment works have similar influent biochemical oxygen demand (BOD) concentrations, but a subset of the treatment works may be designed to handle a more dilute wastewater when there are storm water contributions. At each facility, the same type of waste is treated, but different concentrations of constituents are expected. Based on some of these comments, the commission has chosen to revise the definition to describe "same types of waste" as having the same constituents, and to take out the reference to types of operations. PURPOSE AND APPLICABILITY (sec.205.2) TUS recommended that the rule be revised to allow general permits to be issued for discharges that meet one of four criteria: (1) engage in the same or substantially similar types of operations; (2) discharge the same types of waste; (3) are subject to the same requirements regarding effluent limitations or operating conditions; or (4) are subject to the same or similar monitoring requirements. The commenter suggested this be done by adding the word "or" so the rule requires criteria (1), (2), (3) and/or (4) be met, rather than (1), (2), (3) and (4). This change would give the commission more flexibility in determining what types of discharges would qualify for a general permit. The commission responds that "and" is stated in the statute to expressly require that all four criteria must apply, and that the rule needs to be consistent with the statute. The plain meaning of such grammatical construction is that none of the criteria are sufficient on their own, but that all of them must be met. Also, the statute was drafted with the word "and" to be consistent with National Pollutant Discharge Elimination System (NPDES) requirements specified in 40 CFR sec.122.28(a)(2)(D). Henry, Lowerre suggested that sec.205.2(c) include other limits or factors for the commission to consider when determining the appropriateness of issuing a general permit. Factors such as adverse impacts on human health, the environment, level of public concern, and receiving water conditions were specifically suggested. The commission responds that the legislatively enacted limitations already specified in Texas Water Code, sec.26.040 and reflected in sec.205.2(a), (b), and (c) restrict the commission in using general permits as a tool for authorizing discharges. Adding restrictions onto those already legislated could unnecessarily reduce opportunities for permit streamlining and flexibility in managing its regulatory program. Additionally, the commission argues that its use of general permits should track the use of general permits under NPDES. Adding limitations not part of the federal requirements could lead to significant inefficiencies. Henry, Lowerre commented that sec.205.2(c)(1) does not adequately describe what an enforceable general permit might be. Henry, Lowerre indicated that a permit must include express limitations on discharges that are enforceable, and also contended that the commission must ensure that it has adequate compliance personnel to devote toward oversight. The commission responds that it believes sec.205.2(c)(1) is consistent with the statutory language of Texas Water Code, sec.26.040(a)(5)(A), and therefore has made no change to the rule. Effluent limitations will normally be placed in municipal or industrial discharge permits, whether it is an individual permit or a general permit. However, there may be categories of discharges where other permit provisions such as best management practices would be required of a person covered under a general permit, in lieu of actual limitations. For example, a storm water discharge from a construction site or from an industrial facility might not include effluent limitations. The commission also disagrees that it should be required to make a finding that it has adequate compliance personnel before issuing a general permit. An authorization to discharge can be granted when it can be readily enforced and when the commission can adequately monitor compliance with the terms of the general permit. Compliance need not be monitored exclusively by the ability to inspect discharge facilities that might seek coverage. There would be no benefit to requiring that facilities be permitted individually, because such action would not increase the likelihood of the facility being inspected. Henry, Lowerre made the suggestion that sec.205.2(c)(2) be revised to change "surface and ground water quality" to "surface or ground water quality." The commission responds that the intent of the passage is "or," and that the revision has been made. Henry, Lowerre commented that it is not permissible for the commission to adopt rules to implement the legislative amendments to Texas Water Code, sec.26.040, without defining significant adverse effects to water quality. Additionally, Henry, Lowerre contended that the rules must establish a process for ensuring that such determinations are made. A discharge that violates Texas surface water quality standards (TSWQS) would be considered a significant adverse effect. As with individual permits, general permits will be drafted in accordance with the requirements of the TSWQS, under Chapter 307 of the commission rules, to insure discharges will not have significant adverse effects to water quality. Henry, Lowerre objected to the language proposed in sec.205.2(c)(2) which states "more than 500,000 gallons directly into surface water during any 24-hour period." The commenter believes the addition of the word "directly" exceeds legislative intent and is illegal. The commission disagrees that the proposed use of the word in the rule goes beyond the intent of the statute. However, to remove any confusion, the language has been revised by deleting the word in order to track the language in the statute. PUBLIC NOTICE, PUBLIC MEETINGS, AND PUBLIC COMMENT (sec.205.3) An individual commented that the rule should specify that processing of general permits will comply with the rulemaking procedures established in the Texas Administrative Procedures Act (APA). The commenter contended that the issuance of a general permit must include a statement of reasons for and against adoption and comply with the requirement for a reasoned justification of the rule. The commission disagrees with the contention that the issuance of a general permit must comply with the rulemaking procedures established in the Texas APA. As noted by the commenter, sec.26.040(j) provides that the issuance, amendment, renewal, suspension, revocation, or cancellation of a general permit or of authority to discharge under a general permit is not subject to Subchapters C-F of the APA. This provision exempts the listed commission actions related to a general permit from all APA provisions related to contested cases except those contained in Subchapter G relating to judicial review. This provision was in the legislation providing for commission authority to issue general permits in order to make absolutely clear that while there is no opportunity for contested case hearing on the listed commission actions related to a general permit, there is opportunity for judicial review of those actions. The commission further responds that sec.26.001 defines the term "permit" as "an order issued by the commission in accordance with the procedures prescribed in this chapter establishing the treatment which shall be given to wastes being discharged into or adjacent to any water in the state to preserve and enhance the quality of the water and specifying the conditions under which the discharge may be made." A general permit issued pursuant to sec.26.040 of the Texas Water Code is clearly a permit according to this definition, and therefore a license pursuant to the definitions in the APA rather than a rule. The commission further responds that sec.26.040 clearly sets out in detail the procedural requirements for adopting a general permit. The procedural requirements set out in the statute would be meaningless if the APA rulemaking requirements are to apply to issuance of a general permit. Accordingly, such an interpretation runs counter to the rules of statutory construction. Henry, Lowerre commented that sec.205.3 should specify that the procedures of this section pertain to renewals and amendments. The commission agrees with the comments and has modified the section accordingly. However, if an amendment to a general permit would be considered a minor amendment, the modified public participation procedures are not as extensive as for the issuance, major amendment, or renewal of a general permit. Consistent with 30 TAC sec.305.62(c)(2), the rule at sec.205.3(g) specifies that newspaper publication is not required. The commission has determined that the public is not adversely affected by amendments considered to be minor, and that newspaper publication of these type of actions would be a costly burden. The OPIC and Henry, Lowerre provided comments on sec.205.3(d)(1). The OPIC believes the rule should be changed so that a public meeting on all proposed general permits is mandatory. Henry, Lowerre suggested that the rule be clarified regarding the commission's discretion over whether to hold a public meeting. The commission disagrees that making public meetings for all proposed general permits mandatory would maximize public participation. Holding a public meeting is costly and the expense is not justified for those situations where there is no public interest in a general permit. The commission agrees that the language suggested by Henry, Lowerre clarifies the meaning of the rule, and has revised the rule accordingly. The OPIC commented on sec.205.3(d)(2) that mailed notice of a public meeting should be provided by publication in a daily or weekly newspaper of general circulation in the area affected by the activity. Henry, Lowerre commented on this provision and suggested that mailed notice be provided to each person who commented on the general permit, regardless of whether it is a general permit under Texas Pollutant Discharge Elimination System (TPDES) or under the state program. The commission responds that the rule as proposed inadvertently did not specify mailed notice in a non-TPDES scenario. The rule has been modified in sec.205.3(d)(3) to ensure any commenter on the draft permit receives notice of a public meeting, and to maintain consistency with sec.205.3(b). The rule's public notice provisions have not been modified to include newspaper notice of a public meeting, to be consistent with the statutory requirements. The commission is satisfied that Texas Register notice, mailed notice to local, state, and federal officials, mailed notice to commenters, and mailed notice to persons who ask to be on agency mailing lists will all lead to effective public participation in meetings that might be convened. AUTHORIZATIONS AND NOTICES OF INTENT (sec.205.4) TU Services recommended that facilities covered by an individual permit be allowed to obtain authorization for new discharge points under a general permit. The commission responds that individual permits, similar to general permits, specify particular categories of waste which are authorized for discharge. If a category of waste not already described in the existing permit is proposed for discharge from a new point source location, the commission agrees it could be authorized by general permit. However, this would only be the case if the discharge was not commingled with permitted discharges or if it was a category of waste distinct from the category of waste identified in the individual permit. For example, if a steam electric station discharges non-contact cooling water under an individual permit and proposes to obtain a general permit to discharge treated ground water from a remediation activity, it could do so if the treated ground water was conveyed to waters in the state without commingling with the non-contact cooling water upstream of the outfall. Conversely, if the steam electric station had an outfall established in an individual permit for discharge of treated ground water and wanted to permit new discharges of treated ground water by general permit via the same outfall, the commission would require the station to cancel the individually permitted outfall by minor amendment when the general permit became effective for the treated ground water discharges. The commission is revising sec.205.4(b) to add a new paragraph (4) to specify how it would process these requests. The commission would not allow splitting of discharge flows in an effort to fall below the 500,000 gallons per 24-hour statutory limit. The commission intends to utilize the authority it has specified in sec.205.4(e)(1) and sec.205.4(f)(2) to prevent this from occurring. HCPCD commented that sec.205.4(c) should include a provision for a discharger to provide notice to a county judge, and to a mayor of a city when the discharger files an NOI with the commission. The commenter also suggested that if the commission denies the request, it will provide notice to the county and city of the denial. The commission disagrees that this rule should require notification to all county judges or mayors in any affected jurisdiction, but believes that specific general permits could address notification to interested jurisdictions by the discharger at the time those permits are proposed and issued. The opportunity to implement such notification is included as a new subsection (j). Henry, Lowerre commented on sec.205.4(d) that the executive director should not be required to allow a discharger to continue discharging after suspension of the applicability of the general permit. The commission responds that sec.205.4(d) and (e) both allow the executive director to require a discharger to cease discharges upon written notice if certain conditions exist that would threaten water quality. Nonetheless, the executive director may also allow an existing discharge to continue until an applicant can submit a timely request for permit and have the agency then act upon the request. To clarify what the commenter referred to as confusing language, the commission has revised both subsections to remove "and/or" and to split up the lengthy sentences. The commission has also clarified that a notice of suspension will include a statement of whether the discharger shall immediately cease discharging. Henry, Lowerre commented that sec.205.4(e) is confusing because it combines both reasons for denying and suspending authorizations in one set of criteria. The commenter also stated that the executive director should not be limited to the specified factors in the rule as bases for denying or suspending authorizations. The commission has revised the rule to separate the actions of denying and suspending an authorization to discharge to avoid any confusion and make the rule as clear as possible. The rule now states that the executive director shall deny an NOI for reasons included in sec.205.4(e). In the case of dischargers currently authorized under a general permit, the rule has been revised to give the executive director discretion over whether or not to suspend a discharger's authorization for reasons included under sec.205.4(f). The commission further revised sec.205.4(e)(5) to clarify and specify the nature of compliance problems that would result in the denial of an NOI. These compliance problems include those instances where a discharger is "the subject of an unresolved TNRCC enforcement action in which the executive director has issued written notice that enforcement has been intiated." A notice of violation (NOV) letter would not be included under this definition. Additionally, the commission points out that it is not limited to the criteria listed in the subsection; denials or suspensions may be decided for "reasons including, but not limited to, the following:" as stated in the introductory passage to subsection (e) and (f). HCPCD and Henry, Lowerre both commented on sec.205.4(e)(4) and described what appears to be a typographic error. Henry, Lowerre also requested clarification of the reference to "changed circumstances" in the rule. In response to the comments, the commission has revised sec.205.4(f)(4) to state "circumstances have changed since the time of the NOI so that the discharge is no longer appropriately controlled to meet water quality standards under the general permit, or either a temporary or permanent reduction or elimination of the authorized discharge is necessary." This change will make the rule consistent with federal regulations at 40 CFR sec.122.28(b)(3)(E). Henry, Lowerre commented that sec.205.4(e)(5) should be a basis for denying a proposed discharge, concluding that the criterion should not be a basis for suspending a discharge (since no general permit should allow impairment of a water body). The commission generally agrees with the commenter. After a change in water quality standards, the commission will deny future authorizations under an existing general permit affected by the change. Consistent with the commission's implementation procedures, and pursuant to Texas Water Code sec.26.040(h), existing authorizations will generally continue until the general permit expires. However, individual authorizations to discharge under the general permit may be suspended and/or the general permit revised due to imminent threats to human health or the environment. In addition, the rule was revised to state the executive director "shall" consider the factors in sec.205.4(e)(3) and sec.205.4(f)(5), rather than "may" for clarification. Henry, Lowerre commented that sec.205.4(e)(5) is inadequate, particularly for protection of ground water and because the commission has not yet adopted ground water quality standards. The commission responds that it has revised the rule to add an additional factor to address the comment, to reference Texas Water Code, sec.26.401, as a basis for denying or suspending a discharge. Henry, Lowerre questioned the meaning of sec.205.4(e)(7), stating that if a technology for treatment is necessary, a general permit could not be issued unless the technology was implemented as a permit condition. The commission responds that this paragraph is in the rule to be consistent with federal regulations at 40 CFR sec.122.28(b)(3)(B). The commission understands it to mean that if new technology-based guidelines were promulgated and affected a category discharging under a general permit, the executive director could deny new NOIs and require individual permits by suspending NOIs for existing dischargers already covered under the general permit. The commission could then revoke or cancel the general permit. Alternatively, the commission could allow existing discharges to continue, but could amend the permit to add additional controls to meet the new technology-based guidelines. Additionally, the commission has determined the language in sec.205.4(e)(8) needs clarification, as well. Therefore, this paragraph (now sec.205.4(e)(7) and sec.205.4(f)(9)) has been revised to add "but the general permit has not yet been amended to incorporate the new effluent limitation guidelines." Henry, Lowerre commented that Texas Water Code, sec.26.040(e) restricts coverage of dischargers under a general permit to dischargers not already covered by an individual permit and that sec.205.4(h) is inconsistent with the statute. The commission disagrees with this interpretation of the statute. Texas Water Code, sec.26.040(e) only describes the authorization process for those persons not yet authorized to discharge. Someone not authorized to discharge is prohibited from doing so for up to the 31st day after submitting an NOI. The subsection of the statute need not address dischargers already covered by an individual permit because they need not wait; such an authorized discharger has the ability to discharge under the permit previously approved, assuming the permit is still in effect. It would be poor public policy to carry out the commenter's interpretation. Someone interested in seeking a general permit by shifting from an individual permit would need to let their permit expire, file an NOI, wait up to 31 days, and then resume discharging. Further, the language pertaining to who may be covered under a general permit is described in detail in Texas Water Code, 26.040(a). The commission may issue a general permit to authorize the discharge of waste by category of dischargers if the dischargers in the category are, in the commission's opinion, more appropriately regulated under a general permit than under individual permits. There is no restriction that would freeze a discharger forever in an individual permit. The commission has also revised the rule to specify that a new NOI must be submitted to the commission when there has been a change in ownership of a facility, and not a change in operator to make the rule consistent with 30 TAC sec.305.43 and sec.305.64. PERMIT DURATION, AMENDMENT, AND RENEWAL (sec.205.5) Henry, Lowerre commented that Texas Water Code, sec.26.040(j), excludes the applicability of Subchapter C of the Texas Government Code, Chapter 2001, when a general permit is being renewed. Therefore, the commenter argued that sec.205.5(b) - (d) cannot allow for extensions to a term of a general permit. The commission responds that it fully intends to complete the renewal process for general permits prior to the expiration of the term of the permits. Texas Water Code, sec.26.040(g) specifies that a general permit remains in effect until it expires, unless renewed. Therefore, the commission has revised subsections (b), (c), and (d) to be consistent with the statutory language. STATUTORY AUTHORITY These sections are adopted under the Texas Water Code, sec.5.102, which provides the commission with general powers to carry out duties under the Texas Water Code, and sec.sec.5.103, 5.105, and 5.120, which provide the commission with the authority to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state and to establish and approve all general policies of the commission. Additionally, these sections are adopted pursuant to the Texas Water Code, sec.26.040, which provides the commission with the authority to regulate certain waste discharges by general permit. sec.205.1. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise: (1) General permit - A permit issued under the provisions of this chapter authorizing the discharge of waste into or adjacent to waters in the state for one or more categories of waste discharge within a geographical area of the state or the entire state as provided by sec.26.040, Texas Water Code. (2) Individual permit - A permit, as defined in sec.26.001 of the Texas Water Code, issued by the commission or the executive director to a specific person or persons in accordance with the procedures prescribed in Chapter 26 of the Texas Water Code (other than sec.26.040 of the Water Code). (3) Notice of intent or NOI - A written submittal to the executive director from a discharger requesting coverage under the terms of a general permit. (4) Same or similar monitoring requirements - Requirements for periodic testing or sampling applied to all dischargers of a category covered by a general permit to determine compliance with effluent limitations in general permits which will be applied with the same or similar frequency, sample type, or reporting requirements. This may include conditions which are applied in accordance with a distinct formula in the general permit, such as a sampling frequency based upon the quantity or rate of discharge. (5) Same or substantially similar types of operations - An operation engaged in storm water management activities, or wastewater management activities as defined in a general permit. Examples of substantially similar types of operations include manufacturing processes relating to a specific industrial category or standard industrial classification, a specific type of agricultural production activity, publicly owned treatment works, or storm water management and control activities by municipalities. (6) Same requirements regarding operating conditions - Requirements applied to all dischargers in a category covered by a general permit including, but not limited to, requirements for maintenance, monitoring, reporting, best management practices, facility management, the integrity of analytical testing, and record keeping. (7) Same types of waste - A category of waste containing the same or similar type constituents that can be safely and appropriately controlled using a similar treatment technology, or that can be safely and appropriately controlled through the same requirements regarding effluent limitations. Examples of such waste types include domestic wastewater, contact stormwater from concrete batch operations, or filter backwash from water treatment. (8) Texas Pollutant Discharge Elimination Systems (TPDES) - The state program for issuing, amending, terminating, monitoring, and enforcing permits, and imposing and enforcing pretreatment requirements, under Clean Water Act sec.sec.307, 402, 318 and 405, the Texas Water Code and Texas Administrative Code regulations. sec.205.2. Purpose and Applicability. (a) The commission may issue a general permit to authorize the discharge of waste into or adjacent to waters in the state by category of dischargers if the dischargers in the category: (1) engage in the same or substantially similar types of operations; (2) discharge the same types of waste; (3) are subject to the same requirements regarding effluent limitations or operating conditions; and (4) are subject to the same or similar monitoring requirements. (b) The commission may issue a general permit to authorize the discharge of waste by categories of dischargers designated pursuant to subsection (a) of this section either within the entire state or within a discrete geographical area identified by an appropriate division or combination of geographic or political boundaries. For example, certain dischargers of the same type of waste may be covered under one statewide general permit. General permits granted for discrete geographical areas may be based upon, but not limited to, factors such as related water quality standards, climatological conditions, and watershed specific standards in accordance with Chapter 311 of this title (relating to Watershed Protection). Discharges to be regulated with effluent limitations specific to a particular water body may be covered under a general permit limited to a particular watershed or geographical area. (c) The commission may issue a general permit pursuant to subsection (a) of this section only if it finds the dischargers in the category are more appropriately regulated under a general permit than under individual permits, on the basis that both: (1) the general permit can be readily enforced and that the commission can adequately monitor compliance with the terms of the general permit. This requirement is satisfied if the provisions of the general permit are clear and unambiguous and it requires adequate monitoring, record keeping, and reporting, appropriate to the type of activity authorized; and (2) the category of discharges covered by the general permit will not include a discharge either of pollutants that will cause significant adverse effects to surface or ground water quality or of more than 500,000 gallons into surface water during any 24-hour period. sec.205.3. Public Notice, Public Meetings, and Public Comment. (a) The commission shall publish notice of a draft general permit in a daily or weekly newspaper of general circulation in the area affected by the activity that is the subject of the proposed general permit and in the Texas Register. If the draft general permit will have statewide applicability, then the requirement for newspaper notice shall be accomplished by publishing notice in the daily newspaper of largest general circulation within each of the following metropolitan areas: Dallas; Houston; San Antonio; Austin; Tyler; Corpus Christi; the Lower Rio Grande Valley; Amarillo; Lubbock; the Permian Basin; and El Paso. (b) For TPDES general permits, mailed notice of the draft general permit will also be provided to the following: (1) the county judge of the county or counties in which the dischargers under the general permit could be located; (2) if applicable, state and federal agencies for which notice is required in 40 CFR, sec.124.10(c); (3) persons on a relevant mailing list kept under sec.39.7 of this title (relating to Mailing Lists); and (4) any other person the executive director or chief clerk may elect to include. (c) The contents of a public notice of a draft general permit shall be in accordance with sec.39.11 of this title (relating to Text of Public Notice) except where clearly not applicable. Each notice must include an invitation for written comments by the public regarding the draft general permit. The public notice will specify a comment period of at least 30 days and the public notice will be published not later than the thirtieth (30th) day before the commission considers the approval of a general permit. Additionally, the public notice of a draft TPDES general permit must include either a map or description of the permit area. (d) Public Meetings. (1) The executive director or commission may hold a public meeting to provide an additional opportunity for public comment and shall hold such a public meeting when either the executive director or commission determines, on the basis of requests, a significant degree of public interest in a draft general permit. (2) The commission shall give notice of a public meeting under this subsection by publication in the Texas Register not later than the 30th day before the date of the meeting. (3) Mailed notice of the public meeting will also be provided to the following: (A) the county judge of the county or counties in which the dischargers under the general permit could be located; (B) if applicable, state and federal agencies for which notice is required in 40 CFR, sec.124.10(c); (C) persons on a relevant mailing list kept under sec.39.7 of this title (relating to Mailing Lists); (D) any other person the executive director or chief clerk may elect to include; and (E) persons who filed public comment or request for a public meeting on or before the deadline for filing public comment or request for a public meeting. (4) The contents of a public notice of a public meeting shall be in accordance with sec.39.11 of this title (relating to Text of Public Notice) except where clearly not applicable. Each notice must include an invitation for written or oral comments by the public regarding the draft general permit. (5) The public comment period shall automatically be extended to the close of any public meeting. (e) If the commission receives public comment during the comment period relating to issuance of a general permit, the commission may issue the general permit only after responding in writing to these comments. The response shall address written comments received during the comment period and oral or written comments received during any public meeting held by the commission. (1) The commission shall issue its written response to comments on the general permit at the same time the commission issues or denies the general permit. (2) A copy of any issued general permit and response to comments will be made available to the public for inspection at the commission's Wastewater Permits Section in its Austin office and also in the appropriate regional offices. (3) A notice of the commission's action on the proposed general permit and a copy of its response to comments will be mailed to each person who made a comment. (4) A notice of the commission's action on the proposed general permit and the text of its response to comments will be published in the Texas Register. (f) Except as specified in subsection (g) of this section, the requirements of subsections (a) - (e) of this section apply to processing of a new general permit, and to amendment, renewal, revocation, or cancellation of a general permit. (g) A general permit may be proposed for minor amendment, as described in sec.305.62(c)(2) of this title (relating to Amendment), without newspaper publication. sec.205.4. Authorizations and Notices of Intent. (a) New Permittees. A discharger who is not covered by an individual permit may submit to the executive director a written notice of intent to be covered by the general permit in accordance with this section. The executive director may deny the request for coverage under the general permit, in accordance with subsection (e) of this section. (b) Existing Individual Permittees. (1) A discharger who is covered by an individual permit may obtain substitute authorization to discharge waste under a general permit if, at least 180 days prior to the expiration date of the individual permit, the permittee submits a notice of intent as specified by subsection (g) of this section. The discharger shall also request that the individual permit be canceled or that the existing permit be amended to remove an authorization pertaining to an affected outfall. The commission will cancel or amend the permit if the executive director does not deny the NOI under subsection (e) of this section. (2) The individual permit will be automatically canceled when authorization under the general permit becomes effective. (3) If the NOI is denied under subsection (e) of this section, the discharger shall apply for renewal of the individual permit prior to the expiration date of the individual permit to maintain authorization to discharge, in accordance with sec.305.63 of this title (relating to Renewal). (4) A discharger who is covered by an individual permit may obtain authorization to discharge waste from a new outfall under a general permit if the discharger submits a written NOI as specified in subsection (f) of this section. Agency action on a new discharge does not affect the status of the discharger's existing individual permit. (c) A general permit will specify any applicable deadline for filing the notice of intent. A discharger may begin discharging under the general permit on the 31st day after the executive director receives the discharger's notice of intent unless the executive director before that time notifies the discharger pursuant to subsection (e) of this section that the discharger is not eligible for authorization under the general permit. A NOI must be submitted to the executive director by certified mail, return receipt requested. (d) Authorization to discharge under a general permit does not confer a vested right. After written notice to the discharger, the executive director may suspend a discharger's authority to discharge under a general permit. The executive director may require a person discharging under a general permit to immediately cease the discharge. The executive director may also require the person to apply for and obtain an individual permit. The notice of suspension to such a person shall include a brief statement of the basis for this decision under subsection (f) of this section, a statement of whether the discharger shall immediately cease the discharge, an application form, a statement setting the deadline for filing the application for an individual permit, and a statement that the person's discharge authorization under the general permit shall be suspended on the effective date of the commission's action on the individual permit application unless the commission expressly provides otherwise. If an application is not received by the deadline specified, the executive director shall suspend a discharger's authority to discharge under a general permit. (e) The executive director shall deny an NOI to discharge under an existing general permit and may require the person to apply for and obtain an individual permit if the discharger is not eligible for authorization under the general permit for reasons including, but not limited to, the following: (1) The quantity of discharge, the type of waste, or the type of operation does not comply with the general permit; (2) In the case of determining eligibility to discharge under the Texas Pollutant Discharge Elimination System (TPDES), a determination that backsliding under 40 CFR sec.122.44(l) would occur if the general permit replaced the individual permit; (3) The discharge is a significant contributor of pollutants impairing the quality of surface or ground water in the state. In making this determination, the executive director shall consider the following factors: (A) The location of the discharge; (B) The size of the discharge; (C) The quantity and nature of pollutants discharged; and (D) Whether the discharge would impair existing or potential uses of ground water, inconsistent with the policy specified in sec.26.401 of the Texas Water Code; (E) Other factors relating to the protection of water quality standards; (4) The discharge is located where it poses or could pose an adverse impact upon a critical area, as defined in 31 TAC sec.501.3 (Definitions and Abbreviations), and it is practicable to locate the discharge in a more suitable location. An alternative is practicable if it is available and capable of being done in light of cost, technology, and logistics; (5) The discharger or facility: (A) has failed to pay any portion of a delinquent fee or charge assessed by the commission; (B) is the subject of an unresolved TNRCC enforcement action in which the executive director has issued written notice that enforcement has been initiated; (C) is not in compliance with all requirements, conditions, and timeframes specified in an unexpired TNRCC final enforcement order relating to the activity regulated by the general permit, or (D) is subject to an unexpired enforcement order that requires the facility to comply with operating conditions different from or additional to the requirements of the general permit; (6) A change has occurred in the availability of demonstrated technology or practices for the control or abatement of pollutants applicable to the discharge necessary to be implemented to meet applicable federal or state standards; (7) Specific effluent limitation guidelines are promulgated for a discharge covered by the general TPDES permit, but the general permit has not yet been amended to incorporate the new effluent limitation guidelines; or (8) The discharge would be inconsistent with the state Water Quality Management Plan. (f) The executive director may suspend a discharger's authorization under a general permit, and may require the discharger to immediately cease the discharge. The executive director may also require the person to apply for and obtain an individual permit if the discharger is not eligible for authorization under the general permit for reasons including, but not limited to, the following: (1) The owner and/or the operator of the facility has not filed a notice of intent in accordance with sec.305.43 of this title (relating to Who Applies); (2) The quantity of discharge, the type of waste, or the type of operation does not comply with the general permit; (3) In the case of determining eligibility to discharge under the Texas Pollutant Discharge Elimination System (TPDES), a determination that backsliding under 40 CFR sec.122.44(l) would occur if the general permitreplaced the individual permit; (4) Circumstances have changed since the time of the NOI so that the discharge is no longer appropriately controlled to meet applicable water quality standards under the general permit, or either a temporary or permanent reduction or elimination of the authorized discharge is necessary; (5) The discharge is a significant contributor of pollutants impairing the quality of surface or ground water in the state. In making this determination, the executive director shall consider the following factors: (A) The location of the discharge; (B) The size of the discharge; (C) The quantity and nature of pollutants discharged; (D) Whether the discharge would impair existing or potential uses of ground water, inconsistent with the policy specified in sec.26.401 of the Texas Water Code; and (E) Other factors relating to the protection of water quality standards; (6) The discharge is located where it poses or could pose an adverse impact upon a critical area, as defined in 31 TAC sec.501.3 (Definitions and Abbreviations), and it is practicable to locate the discharge in a more suitable location. An alternative is practicable if it is available and capable of being done in light of cost, technology, and logistics; (7) The discharger has been determined by the commission to have been out of compliance with any rule, order, or permit of the commission, including non- payment of fees assessed by the commission; (8) A change has occurred in the availability of demonstrated technology or practices for the control or abatement of pollutants applicable to the discharge necessary to be implemented to meet applicable federal or state standards; (9) Specific effluent limitation guidelines are promulgated for a discharge covered by the general TPDES permit, but the general permit has not yet been amended to incorporate the new effluent limitation guidelines; or (10) The discharge would be inconsistent with the state Water Quality Management Plan. (g) The content of the notice of intent shall be specified in the general permit which shall require the submission of information necessary for adequate program implementation including, at a minimum, the legal name and address of the owner and operator, the facility name and address, specific description of its location, type of facility or discharges, and the receiving water(s). A NOI shall be signed in accordance with sec.305.44 of this title (relating to Signatories to Applications). (h) A person seeking authorization by general permit shall submit an application fee payable to the commission at the time of filing a notice of intent. The amount of the fee shall be set in accordance with sec.305.53 of this title (relating to Application Fee) or will be specified in each general permit and NOI form. If a person is denied coverage under the general permit in accordance with subsection (e) of this section, the application fee will be applied to the application fee required for an individual permit application for the same discharge. (i) A person authorized to discharge waste under a general permit must submit up-to-date information to the executive director in a new NOI not later than 10 days prior to a change in previous information provided to the commission or any other change with respect to the nature or operations of the facility or the characteristics of the discharge. When the owner of the facility changes or has been transferred, a new NOI must be submitted not later than 10 days prior to the change in ownership. (j) When requested by a county or municipality, the commission may establish a provision in a general permit for notification by the discharger to a county judge or mayor of a municipality of NOIs that would allow discharges within their respective jurisdiction. If the executive director denies an NOI for a proposed discharge in the municipality, the executive director will notify the county judge or mayor. sec.205.5. Permit Duration, Amendment, and Renewal. (a) A general permit may be issued for a term not to exceed five years. After notice and comment as provided by sec.205.3 of this title (relating to Public Notice, Public Meetings, and Public Comment), a general permit may be amended, revoked, or canceled by the commission or renewed by the commission for an additional term or terms not to exceed five years each. (b) A general permit remains in effect until amended, revoked, or canceled by the commission or, unless renewed by the commission, until it expires. (c) Upon issuance of a renewed or amended general permit, the facility shall submit a notice of intent in accordance with the requirements of the new permit. (d) If the commission does not renew a general permit, it will provide such determination prior to the expiration of the general permit, and each discharger authorized under the general permit will be provided written notice that the discharger must apply for an individual permit. (e) The commission may, through renewal or amendment of a general permit, add or delete requirements or limitations to the permit. The commission may provide in the general permit a reasonable time to allow existing dischargers covered by the general permit to make the changes necessary to comply with any additional requirements deemed substantive by the commission. (f) A general permit must be consistent with the Texas Coastal Management Plan (CMP). A proposed general permit must be reviewed and the action of issuing a general permit must be found to be consistent with the applicable CMP goals and policies and will not adversely affect any applicable coastal natural resource areas (CNRAs) as identified in the CMP. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808752 Kevin McCalla Director, Legal Services Texas Natural Resource Conservation Commission Effective date: June 21, 1998 Proposal publication date: December 19, 1997 For further information, please call: (512) 239-4640 CHAPTER 321. Control of Certain Activities By Rule SUBCHAPTER I. Additional Characteristics and Conditions of General Permits and For Controlling Certain Activities By Rule 30 TAC sec.321.141 The Texas Natural Resource Conservation Commission (commission) adopts amendments to Chapter 321, Subchapter I, sec.321.141, concerning Additional Characteristics and Conditions for Controlling Certain Activities by Rule. The amendments are adopted without changes to the proposed text as published in the December 19, 1997 issue of the Texas Register (22 TexReg 12423) and will not be republished. EXPLANATION OF THE RULE The purpose of the rule is to implement amended Texas Water Code, sec.26.040, which became law as an act of the 75th Legislature (1997). The rule amendment revises Chapter 321, Subchapter I, to reflect the new authority of the commission to authorize certain discharges by general permit, rather than through permit by rule. The amendments also revise the rule to add a reference to new 30 TAC Chapter 205 (relating to General Permits) being established simultaneously with this rulemaking. FINAL REGULATORY IMPACT ASSESSMENT The commission has reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code sec.2001.0225 and has determined that the rulemaking is not subject to sec.2001.0225 because it does not meet the definition of a "major environmental rule" as defined in the Texas Government Code, and it does not meet any of the four applicability requirements listed in sec.2001.0225(a). TAKINGS IMPACT ASSESSMENT The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code Annotated, sec.2007.043. The specific purpose of the rule is to update Chapter 321, Subchapter I, to reflect the authority of the commission to issue general permits. The rule amendment will not burden private real property as it does not propose any substantive regulations impacting private real property. COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW The executive director has reviewed the rulemaking and determined that it is not an action that may adversely affect a coastal natural resource area that is subject to the Coastal Management Program. The rule does not govern any of the actions that must be subject to the goals and policies of the program, pursuant to 31 TAC sec.505.11. HEARINGS AND COMMENTERS A public hearing was held January 14, 1998, and the public comment period closed January 23, 1998. No comments were received at the hearing or during the public comment period on the proposed rule amendments. STATUTORY AUTHORITY The section is adopted under the Texas Water Code, sec.5.102, which provides the commission with general powers to carry out duties under the Texas Water Code, and sec.sec.5.103, 5.105, and 5.120, which provide the commission with the authority to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state and to establish and approve all general policies of the commission. Additionally, these sections are adopted pursuant to the Texas Water Code, sec.26.040 which provides the commission with the authority to regulate certain waste discharges by general permit. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808751 Kevin McCalla Director, Legal Services Texas Natural Resource Conservation Commission Effective date: June 21, 1998 Proposal publication date: December 19, 1997 For further information, please call: (512) 239-4640 TITLE 31. NATURAL RESOURCES AND CONSERVATION PART I. General Land Office CHAPTER 19.Oil Spill Prevention and Response SUBCHAPTER E.Vessels 31 TAC sec.19.61 The General Land Office (GLO) adopts amendments to sec.19.61, relating to discharge prevention and response plans, pursuant to the statutory requirements for spill contingency plans for vessels under the Oil Spill Prevention and Response Act (OSPRA), Texas Natural Resources Code, sec.40.114, with changes to the proposed text as published in the January 2, 1998, issue of the Texas Register (23 TexReg 85). OSPRA, sec.40.114, requires that any vessel with a capacity to carry 10,000 gallons or more of oil as fuel or cargo and that operates in coastal waters or waters adjoining and accessible from coastal waters shall maintain a written vessel-specific discharge prevention and response plan. These amendments apply to all vessels that carry 10,000 gallons or more of oil as fuel or cargo that operate in coastal waters and that are not currently required to have an Oil Pollution Act (OPA) plan, described in sec.19.61(a), or an International Maritime Organization (IMO) plan, described in renumbered sec.19.61(b). The basic purpose of these amendments is to ensure that vessel crew members or immediately available shoreside personnel report oil spills promptly and initiate spill response actions to protect Texas' coastal natural resources. These amendments require owners/operators to maintain essential information for initiating spill response and notification onboard the vessel and places an emphasis on voluntary prevention measures. The GLO will provide guidance documents in English, Spanish and Vietnamese to assist owners/operators in the production of vessel-specific discharge prevention and response plans. The purpose of the prevention measures is to reduce the impact of oil spills in coastal waters with minimal economic burden to owners/operators. The cost to owners/operators is the time required to compile information in an accessible format, put the information onboard the vessel, and ensure that the vessel crew and the person in charge have access to and understand the need to promptly report and respond to oil spills. The cost of oil spill cleanup, even for a relatively small oil spill, far exceeds the cost of educating crew members about their legal responsibilities and training them to initiate oil spill response measures. Prompt notification of an oil spill to the GLO, the National Response Center, and private spill response contractors minimizes the impacts of the spill incident since abatement, containment and removal can occur before the spill spreads and becomes uncontrollable, impacts a sensitive environment, or requires expensive response measures. The GLO conducted an extensive outreach program for OSPRA vessel owners/operators subject to these amendments through public hearings held in Palacios, Texas on February 4, 1998; Port Isabel, Texas on February 12, 1998; Port Arthur, Texas on February 17, 1998; and Clear Lake, Texas on February 18, 1998. The purpose of the public hearings was to interact with owners/operators who would be affected by these amendments and exchange information in an informal setting about how the proposed amendments could be improved. GLO oil spill prevention and response personnel will continue to work with owners/operators by explaining the requirements of these amendments and offering assistance in compiling the information required to be onboard the vessel at the request of owners/operators. If owners/operators wish to request assistance from the GLO in preparing their vessel-specific discharge prevention and response plans, they may contact Kate McAfee, at (512) 463-8530. The GLO has analyzed these amendments pursuant to the Government Code, Chapter 2007, relating to governmental action affecting private property rights. Pursuant to the Government Code, sec.2007.003(b)(9), an action taken under a state mandate to prevent pollution related to oil and gas activities is exempt from Chapter 2007. These amendments are promulgated pursuant to the state law mandate of Texas Natural Resources Code sec.40.114 which requires vessels to have a written vessel-specific discharge prevention and response plan. The purpose of these amendments is to prevent and ensure adequate response to oil pollution from vessels' fuel and cargo in coastal waters. See OSPRA sec.40.002. Therefore, the promulgation of these amendments is exempt from Government Code, Chapter 2007. Pursuant to the Texas Coastal Management Program (CMP), Texas Natural Resources Code, sec.33.2051, the GLO shall comply with Texas Natural Resources Code, sec.33.205(a) and (b) when adopting or amending rules governing the prevention of, response to, or remediation of a coastal oil spill. Sections 33.205(a) and (b) require a state agency that takes an action that may adversely affect a coastal natural resource area to comply with the goals and policies of the CMP and to determine whether amendments applicable in coastal areas are consistent with the goals and policies of the CMP. The CMP is designed to ensure that coastal natural resource areas are not adversely impacted by state agency actions. The GLO's Oil Spill Division has determined that these amendments are consistent with the applicable goals and policies of the CMP and do not adversely affect a coastal natural resource area. These amendments are designed to protect coastal natural resource areas from oil spills by increasing the likelihood of prompt spill reporting and response. In addition, these amendments encourage voluntary prevention measures that will minimize the adverse impact to coastal natural resource areas that may occur in the event of an unauthorized discharge of oil. Section 19.61(c)(1) contains definitions applicable to OSPRA vessels. A definition for "coastal waters" was added to the paragraph and editorial changes were made to clarify the use of some definitions within these amendments. The addition of the subparagraph references is in accordance with the Texas Register's format specifications. Section 19.61(c)(2) requires owners/operators to maintain information about the vessel onboard. The paragraph was amended to include the name of the designated "person in charge" as additional information which must be maintained onboard the vessel. Section 19.61(c)(3) requires owners/operators to maintain spill response information describing proper notification and prompt response procedures onboard the vessel. Owners/operators may also maintain the required information onshore; however, the information in both locations must include the specific responsibilities of the onshore personnel, vessel crew and designated "person in charge." Section 19.61(c)(3)(A) requires owners/operators to maintain information onboard the vessel describing the vessel crew's responsibilities upon discovery of an oil spill. Section 19.61(c)(3)(B) requires owners/operators to provide to the vessel crew information needed to promptly report an oil spill. Section 19.61(c)(2) and sec. 19.61(c)(3) allow owners/operators to incorporate their OSPRA vessel discharge prevention and response plans into existing OPA and IMO spill contingency plans. All owners/operators of OSPRA vessels, however, are required to maintain vessel and spill response information onboard the vessel. Section 19.61(c)(4) contains an illustrative list of sound management practices which may be used voluntarily and maintained by owners/operators for preventing or reducing the risk of oil spills. The term "best management practices" in the proposed amendment was substituted by the term "sound management practices" to clarify that owners/operators may institute their own flexible prevention practices. In the event of an oil spill, GLO personnel will determine whether owners/operators, voluntarily adopted sound management practices and whether those practices, if properly implemented, could have prevented or did, in fact, minimize the spill's impact. Section 19.61(c)(5) describes the enforcement policy related to OSPRA vessels. Section 19.61(c)(6) provides for a one-time, one-port exception to complying with sec.19.61(c)(2) and sec.19.61(c)(3). The one-time, one-port exception is partially designed to assist owners/operators who violate these amendments while a vessel is subject to "force majeure." Each owner/operator is entitled to one exception regardless of how many vessels it owns or operates. These amendments will not be enforced until September 1, 1998, after which time the GLO will enforce these amendments through routine spill response, harbor patrols and other enforcement programs. General Comments. Several commenters commended the GLO for working with the maritime community to produce a commonsense and practical approach to the legal requirements of OSPRA and for its openness to working with the public to produce the best framework for compliance by the wide range of vessels that operate in Texas waters. The GLO will continue to work with the regulated community to produce commonsense, practical approaches to the legal requirements of OSPRA. No change was made based on these comments. One commenter expressed concern that the GLO had not provided enough information to owners/operators to help them prepare for these amendments. The GLO provided owners/operators with sufficient notice and information about the proposed amendment. Specifically, the GLO mailed out hundreds of letters to interested parties and conducted public hearings in four different geographic areas along the Texas coast. In addition, a database containing the names and addresses of those individuals attending the public hearings has been developed and will be utilized as these amendments are implemented. No change was made based on this comment. Several commenters asked about the types of vessels that would be covered by these amendments and whether these amendments cover vessels that travel into Texas' coastal waters from other states. All vessels, including out-of-state, foreign and public vessels, operating in Texas' coastal waters with a capacity to carry 10,000 gallons or more of oil as fuel or cargo must comply with these amendments. However, the one-time, one-port exception in sec.19.61(c)(6) will facilitate implementation of these amendments as they affect out-of-state and foreign vessels. Although public vessels may be exempt from spill contingency plan requirements under federal law, they are not exempt under state law. Data accumulated by the GLO show that spills from public vessels made up 3.0% of the total number of vessel spills within coastal waters in 1997 and 6.0% in 1996. The GLO believes that this data is significant enough to require public vessels to comply with these amendments. No change was made based on these comments. Two commenters asked whether these amendments cover smaller vessels with a capacity to carry less than 10,000 gallons of oil as fuel or cargo. These commenters emphasized that spills from this size of vessels are more likely, occur often and are the cause of many "mystery spills" along the Texas coast. The 10,000 gallon limit was established by the 72nd Legislature in 1991 and cannot be modified by regulation. However, the GLO continues to request the assistance of the regulated community in its efforts to identify "mystery spills" and potentially responsible parties. No change was made based on these comments. One commenter inquired about the number of commercial fishing vessels that have the capacity to carry 10,000 gallons of oil as fuel or cargo and operate in Texas' coastal waters. At this time, it is difficult to determine how many commercial fishing vessels meet the 10,000 gallons limit; however, information from the Texas Parks and Wildlife Department shows that approximately 1,400 vessels are registered to harvest shrimp from offshore waters. These vessels are likely to have capacities to carry oil as fuel or cargo in excess of 10,000 gallons due to their operating range and the nature of their work. No change was made based on this comment. One commenter asked whether there has ever been a diesel spill of 10,000 gallons which had any real off-shore impact. Although there have not been any reports of diesel fuel spills that had substantial off-shore impact, it is known that diesel fuel spills can cause injury to natural resources, such as pelagic birds and plankton. Off-shore spills of vessel fuel have impacted Texas shores. These amendments are designed to help prevent injuries to natural resources whether the resources are located inshore or offshore. No change was made based on this comment. One commenter stated that owners/operators were assured in 1991 that "fuel" would be exempted from spill contingency plan requirements and sought clarification as to why "fuel" was now being regulated. OSPRA, sec.40.114, specifically states that "any vessel with a capacity to carry 10,000 gallons or more of oil as fuel or cargo that operates in coastal waters or waters adjoining and accessible from coastal waters shall maintain a written vessel-specific discharge prevention and response plan that satisfies the requirements of rules promulgated under this chapter." In 1991, the Legislature decided that oil carried as "fuel" should be subject to spill contingency plan requirements. No change was made based on this comment. Several commenters requested that these amendments provide exemptions for vessels operating under "force majeure" constraints, vessels traveling in "innocent passage" through coastal waters and for dedicated response vessels. OSPRA does not provide an exemption from spill contingency plan requirements for vessels traveling in coastal waters in "innocent passage" or under "force majeure" constraints. However, the one-time, one-port exception provided in these amendments is designed to give owners/operators of OSPRA vessels one opportunity to correct any violation of the provisions of these amendments without incurring penalties. This one opportunity can include a situation in which a vessel travels in "innocent passage" or under a "force majeure" constraint in coastal waters. OSPRA sec.40.114 unambiguously provides that dedicated response vessels are not required to carry a written vessel-specific discharge prevention and response plan. No change was made based on these comments. Two commenters inquired about how the information should be kept onboard the vessel. There is no particular place onboard the vessel where the information must be kept. However, these amendments do require that the plan be kept in a place "readily accessible" to the vessel crew. No change was made based on these comments. One commenter asked whether it will be the responsibility of the charterer to have an out-of-state charteree maintain the posted list onboard the vessel. It is in the charterer's best interest to ensure that chartered vessels are in compliance with these amendments in order that vessels may avoid unnecessary in- port delays. All vessels will be required to maintain the information described in either the relevant OPA/IMO plan or in sec.19.61(c) on-board the vessel indicating the separate responsibilities of the onshore personnel, vessel crew and designated "person in charge". No change was made based on this comment. Two commenters asked whether the forms in the proposed amendment will be required to be produced and posted in Spanish and Vietnamese and suggested that graphics should be emphasized on the forms as opposed to text. The forms have been taken out of these amendments to clarify that the use of the forms is strictly voluntary. The GLO will provide guidance documents in English, Spanish and Vietnamese to assist owners/operators in the production of vessel-specific discharge prevention and response plans. Owners/operators should post plans in the language of the vessel crew. No change was made based on these comments. Several commenters questioned the use of the signature line on the forms in the proposed amendment. The signature line was originally included on the forms so that a GLO response officer's signature would indicate that the response officer had assisted the owner/operator in filling out the form. Pursuant to these comments, the form has been deleted from these amendments. One commenter asked whether the GLO could provide materials on how small vessel owners/operators can act to clean up their own spills. Initially, the GLO will focus on educating owners/operators about spill prevention practices. Information on effective spill prevention practices will be made available to owners/operators through GLO distribution materials. Owners/operators may contact Kate McAfee at (512) 463-8530 for more information on self-help spill response and prevention measures. No change was made based on this comment. One commenter asked whether the GLO had any plans to construct oily bilge reclamation facilities along the Intracoastal Waterway to accommodate the tow vessel industry thereby preempting delays which would be associated with onboard spill contingency plan reviews by GLO field personnel. Inspections of plans by GLO field personnel will be conducted in a fashion that will not hamper vessel operations or cause undue delays. The GLO plans to construct more oily bilge reclamation facilities along the Texas coast. No change was made based on this comment. Three commenters emphasized that the GLO must inform other Gulf Coast governmental entities and the regulated community in Texas about procedures for implementing these amendments. The GLO has notified its regulatory counterparts in other Gulf Coast states about these amendments and about the procedures which may be involved in their implementation. The GLO will continue efforts to provide owners/operators with guidance for developing the plans required by these amendments. No change was made based on these comments. Section 19.61(c)(1). One commenter inquired whether coastal waters extended out seaward to three miles. Coastal waters includes the waters and bed of the Gulf of Mexico within the jurisdiction of the State of Texas. The jurisdiction of the State of Texas extends seaward out to three marine leagues. For a complete definition of "coastal waters", see OSPRA sec.40.003(2) and 31 TAC sec.19.2(a)(1). As a result of this comment and for ease of use, the definition of "coastal waters" in OSPRA was added to sec.19.61(c)(1). One commenter asked about what the definition of "oil" includes and whether it includes hydraulic oil. "Oil" means oil as defined in OSPRA, sec.40.003(17), or in subsection (c)(1) of these amendments. The definition includes hydraulic oils. No change was made based on this comment. One commenter suggested that the term "OSPRA vessel" be replaced with "owner/operator" to clarify that owners/operators of OSPRA vessels are responsible for implementing these amendments. This suggested change has been adopted. For clarification, an editorial change was made which replaced the definition of "vessel owner/operator" with "owner/operator". One commenter questioned the definition of "person in charge" and was concerned that the Coast Guard's definition for "person in charge" held a whole other meaning under 33 CFR sec.sec.154, 155, and 156. OSPRA sec.40.003(19), which defines "person-in-charge", has been in effect for over 6 years and is familiar to the regulated community. No change was made based on this comment. Sections 19.61(c)(2) and (3). Several commenters suggested that these amendments be changed to allow owners/operators the ability to incorporate OSPRA vessel plans into existing OPA and IMO spill contingency plans. These commenters were concerned that the language of sec.19.61(c)(3) was too restrictive and detailed to allow owners/operators the opportunity to integrate their OSPRA vessels into existing OPA and IMO plans. These commenters further stated that owners/operators who choose to place OSPRA vessel plans under existing OPA and IMO plans should have the option of deleting certain information if information required by the OPA or IMO plan would be sufficient. The commenters stated that it would be more appropriate for the vessel to possess a notification and procedures checklist which would direct those onboard the vessel to undertake initial mitigation procedures and contact the "person in charge" for the handling of other statutory notifications. In response to these comments, changes have been adopted in sec.sec.19.61(c)(2) and (3). Checklists which are required to be carried on-board vessels in satisfaction of OPA and IMO requirements will be deemed to be in compliance with these amendments if the vessel crew has been properly trained by owners/operators. Section 19.61(c)(3). Many commenters suggested that it would not be advisable to require all the information described in the proposed amendments to be carried on-board the vessel. Although commenters supported the concept of having information readily available to vessel crews, they believed that these amendments should allow owners/operators the opportunity to choose whether to keep the information either onboard the vessel or with the vessel's onshore "person in charge." The GLO agrees that implementation of these amendments may be easier in some cases if the information is posted with an onshore "person in charge". Pursuant to these comments, the subsection has been amended to clarify that information may also be maintained onshore by any person designated by the owner/operator. However, the information both onshore and onboard the vessel must include the specific responsibilities of the onshore personnel, vessel crew and designated "person in charge". One commenter suggested that the title "Emergency Action Information" in sec.19.61(c)(3)(A) of these amendments be changed to "Oil Spill Response Information", to clarify that owners/operators are not responsible for taking initial spill response measures before taking the necessary steps to mitigate dangers to life. Pursuant to this comment, the title of sec.19.61(c)(3)(A) was changed accordingly. Two commenters wanted to know whether the GLO wants more detailed spill response information listed on the forms than what is identified in the proposed amendments. The GLO is not requiring more detailed spill response information than what is identified in the amendments. However, owners/operators may voluntarily add vessel-specific spill response information. No change was made based on these comments. Three commenters expressed concern about whether the proposed amendment requires additional Hazard Waste Operations and Emergency Response (HAZWOPER) training and spill response equipment to be carried on-board the vessel. These amendments do not require any spill response equipment to be carried on board the vessel and do not require any additional training. No change was made based on these comments. One commenter stated that he would not have the chance to make notifications during an oil spill when lives are at stake. If a danger to life exists as a result of an oil spill, the owner/operator may delay making the required notifications until after taking those steps which are necessary to mitigate dangers to life. No change was made based on this comment. One commenter stated that the process for making notifications in the event of an oil spill should be easier so that individuals will be encouraged to report mystery oil spills. The Texas Department of Public Safety receives spill notifications for the GLO. The GLO will continue to work with the Texas Department of Public Safety to improve procedures for notification in the event of an oil spill. No changes were made based on this comment. Two commenters asked whether these amendments require cleanup contractors to be listed in the vessel plans for each geographic area in which the vessel operates. These amendments do require owners/operators to list the 24-hour contact numbers of cleanup contractors for each geographic area in which the vessel operates. No contracts are required. No change was made based on these comments. Two commenters suggested that the GLO prepare pamphlets which list information about cleanup contractors located along the Texas coast. The GLO will provide the names and contact numbers of cleanup contractors located along the Texas coast. For more information, please contact Pat Lynch at (512) 463-6200. No change was made based on these comments. Section 19.61(c)(4). Three commenters were concerned that the use of the term "best management practices" would allow investigating personnel to develop partiality for an individual set of management practices, negating any others from consideration. The commenters suggested that the term "best management practices" be substituted with "sound management practices" to clarify that several practices may effectively prevent the discharge of oil depending upon an individual company's approach to spill prevention. The commenters also stated that the proposed amendments failed to put operators on notice about the proposed standards. The commenters requested that a supplemental notice of proposed rulemaking be issued which clarifies the GLO's intent so that interested parties may have a reasonable opportunity to make further comment. The GLO substantially agrees with the comments and has substituted the term "sound management practices" for "best management practices." The GLO purposefully did not prescribe "best management practices", so that owners/operators could have the opportunity to institute sound management practices on their own with flexibility. One example of a standard for "sound management practices" is the American Waterways Operators' "Responsible Carrier Program". Given the GLO's intent in the proposed amendment, the GLO does not believe that a supplemental notice of proposed rulemaking is needed. No change was made based on these comments. Section 19.61(c)(5). Several commenters asked whether the GLO would start enforcing these amendments and issuing penalties on September 1, 1998. The GLO will start enforcing these amendments on September 1, 1998. Penalties may be assessed on a case-by-case basis; however, emphasis will first be placed on encouraging compliance through education. No change was made based on these comments. One commenter asked whether enforcement of these amendments will affect owners/operators of vessels with a capacity to carry less than 10,000 gallons of oil as fuel or cargo. OSPRA, sec.40.114, requires that owners/operators of vessels with a capacity to carry 10,000 gallons or more of oil as fuel or cargo maintain a written vessel-specific discharge prevention and response plan. Therefore, enforcement of these amendments will not affect owners/operators of vessels with a capacity to carry less than 10,000 gallons of oil as fuel or cargo. No change was made based on this comment. Several commenters asked about the procedures which GLO personnel will use in boarding vessels and inspecting spill contingency plans. GLO personnel will board vessels at dockside during routine patrols or spill response and determine whether the vessel and spill response information is maintained onboard the vessel and is readily accessible to the crew. Routine patrols serve the purposes of monitoring vessel activity, discovering unreported spills and educating the regulated community on how to prevent the occurrence of "mystery spills". No change was made based on these comments. One commenter asked whether GLO field personnel intend to track enforcement through a sticker program. The GLO has no plans to track enforcement through a sticker program. No change was made based on this comment. One commenter asked about whether a responsible party's liability for an oil spill may be waived or reduced if the party has a spill contingency plan in place before May 1998. Responsible party liability for an oil spill cannot be waived or reduced and is not related to requirements for maintaining written vessel-specific discharge prevention and response plans onboard the vessel. See OSPRA, sec.40.202. No change was made based on this comment. Section 19.61(c)(6). One commenter inquired about whether an owner/operator who owns more than one OSPRA vessel may receive the benefit of the one-time exception noted in sec.19.61(c)(6) for each OSPRA vessel. These amendments have been changed to clarify that each owner/operator is entitled to one exception regardless of how many vessels the owner/operator maintains in its fleet. In other words, the exception is per owner/operator, not per vessel. For. American Waterways Operators (in part), Anchor Seafood (in part), Bay-Houston Towing (in part), Cenac Environmental Services (in part), Devall Towing & Boat Service (in part), I.B. Marine Services, Inc. (in part), King Fisher Marine Service (in part), Kirby Marine Transportation Co. (in part), Lasseigne Enterprises, Inc. (in part), Marine & Industrial Safety Ass'n. (in part), Marine Spill Response Corporation (in part), McDonough Marine Services (in part), Mosier Services (in part), Republic of Texas Environmental, Sea Garden Sales Co., Inc. (in part), Texas Shrimp Association (in part), Texas Waterways Operators Ass'n. (in part), United States Coast Guard (in part), Valley Lubricants (in part), W.B.P. Shrimp Co. (in part). Against. American Waterways Operators (in part), Anchor Seafood (in part), Bay-Houston Towing (in part), B & B Shrimp Co., Cenac Environmental Services (in part), Devall Towing & Boat Service (in part), I.B. Marine Services, Inc. (in part), King Fisher Marine Service (in part), Kirby Marine Transportation Co. (in part), Lasseigne Enterprises, Inc. (in part), Marine & Industrial Safety Ass'n. (in part), Marine Spill Response Corporation (in part), McDonough Marine Services (in part), Mosier Services (in part), Seafood Enterprises, Inc., Sea Garden Sales Co., Inc. (in part), Texas Gulf Trawling, Texas Shrimp Association (in part), Texas Waterways Operators Ass'n. (in part), United States Coast Guard (in part), Valley Lubricants (in part), W.B.P. Shrimp Co. (in part). These amendments have been reviewed by legal counsel and determined to be within the legal authority of the land commissioner to adopt rules under OSPRA. OSPRA, sec.40.007, authorizes the land commissioner to promulgate rules necessary and convenient to the administration of OSPRA. Section 40.114(a) of OSPRA requires a vessel with a capacity to carry 10,000 gallons or more of oil as fuel or cargo that operates in coastal waters to maintain a written vessel-specific discharge prevention and response plan that satisfies rules promulgated under sec.40.007. Texas Natural Resources Code, sec.40.007, relating to general powers and duties, and sec.40.114, relating to vessel-specific discharge prevention and response plans for vessels, provide the legal authority for the GLO to adopt these amendments and these sections are affected by this adoption. sec.19.61.Response Plans. (a) (No change.) (b) IMO Vessels. (1) Compliance with Regulation 26 of Annex I of MARPOL. IMO vessels that enter Texas coastal waters must have onboard a shipboard oil pollution emergency plan pursuant to Regulation 26 of Annex I of MARPOL 73/78. The IMO vessel must be operating in compliance with the approved plan to gain entry into a Texas port, pursuant to sec.19.63 of this title (relating to Entry into Port). Vessels subject to OPA and to IMO are only required to submit their OPA plan to the GLO. (2) Submission of Information to GLO. The plan prepared pursuant to Regulation 26 of Annex I of MARPOL is not required to be submitted to the GLO. Every owner, operator or manager of an IMO vessel that intends to traverse Texas coastal waters shall submit to the GLO, 60 days after this amendment becomes final: (A) a copy of its flag state or authorized organization approval of the IMO Regulation 26 Shipboard oil pollution emergency plan; and (B) IMO Vessel Form. Every owner, operator or manager of an IMO vessel that intends to traverse Texas coastal waters shall submit to the GLO the information listed in this subsection. This information is required by Regulation 26, sec.2.5.4. The information must be submitted on IMO Vessel Form. Figure: 31 TAC 19.61 (b)(2)(B) (i) Vessel Information. The registered name, flag state, port of registry of the vessel, international call sign, official number and issuer of the number, IMO number, gross tonnage, overall length, breadth and summer draught. Any previous registered names of the vessel shall also be provided and if the vessel has not previously been registered under another name, such fact shall be affirmatively stated. The owner, operator or manager of an IMO vessel shall also submit a general arrangement plan showing the location and tank capacities for those tanks which carry oil. (ii) Notification Information. The name, address, telephone number, and facsimile number of the owner, operator and manager of the vessel. The telephone number provided shall be a 24-hour contact number for the person named as owner, operator and manager. (iii) Vessel Personnel Information. Every owner, operator or manager of an IMO vessel that intends to traverse Texas coastal waters shall designate a: (I) Authorized Person: who is responsible for and in control of all oil spill response operations on behalf of the vessel. This person must be available 24 hours a day to ensure prompt response to oil spills in Texas coastal waters. This person need not be onboard the vessel but must have independent authority to deploy response equipment and to expend funds necessary for response actions. This information is required pursuant to Regulation 26, sec.2.2.4. Further responsibilities of the person in charge are delineated at sec.19.16 of this title (relating to Person in Charge). (II) Preparedness Manager: who is responsible for ensuring that personnel aboard an IMO vessel are properly trained in mitigation and control of an unauthorized discharge of oil. This information is required pursuant to Regulation 26, sec.2.5.1. (iv) Vessel Response Organization. Every owner, operator or manager of an IMO vessel that intends to traverse Texas coastal waters shall maintain onboard the name and telephone numbers of two oil spill response organizations identified as capable of providing a timely response to an unauthorized discharge of oil from the vessel, at her intended port of call and at any portion of the route of said vessel to and from the port of call. (C) Changes in IMO Vessel Form. Any change in any information required pursuant to this section shall be submitted to the GLO as soon as possible when the vessel is entering Texas waters. Vessels not entering Texas waters shall report such changes to the GLO within 30 days of the change. (D) DCO List. The GLO shall provide, upon request, a list of DCOs certified in Texas. (c) OSPRA Vessels. OSPRA vessels are those vessels with a capacity to carry 10,000 gallons or more of oil as fuel or cargo that operate in coastal waters and are not required to have a response plan pursuant to 33 U.S.C. sec. 2701 et seq. or Regulation 26 of Annex 1 of MARPOL 73/78. (1) Definitions. The following words, terms and phrases, when used in this subsection only, shall have the following meanings, unless the context clearly indicates otherwise. (A) Coastal waters - the waters and bed of the Gulf of Mexico within the jurisdiction of the State of Texas, including the arms of the Gulf of Mexico subject to tidal influence, and any other waters contiguous thereto that are navigable by vessels with a capacity to carry 10,000 gallons or more of oil as fuel or cargo. (B) Official number - the vessel number as it appears on the vessel's Certificate of Documentation issued by the United States Coast Guard, pursuant to 46 CFR Part 67, or the vessel number issued by the flag state with which the vessel is registered. (C) Oil - "oil" of any kind or in any form, including but not limited to crude oil, petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes other than dredged spoil, but does not include petroleum, including crude oil or any fraction thereof, which is specifically listed or designated as a hazardous substance under Subparagraphs (A) through (F) of section 101(14) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. Sec. 9601 et seq.) and which is subject to the provisions of that Act, and which is so designated by the Texas Natural Resource Conservation Commission. (D) Owner/operator - any person owning, operating, or chartering by demise a vessel. (E) Person in charge - the person designated by name and job title for purposes of ensuring that the General Land Office is notified of unauthorized discharges of oil from the vessel, who can initiate and direct actions which should be taken in response to an actual or threatened unauthorized discharge of oil and who has independent authority to deploy response equipment and personnel and to expend funds for response actions. (F) Sound management practices - practices that, when used consistently, help prevent discharges of oil. (G) State registration number - the vessel number as it appears on the Certificate of Number issued by the Texas Parks and Wildlife Department, pursuant to Texas Parks and Wildlife Code, Title 4 sec.31.024 or the vessel number as issued by any other state with which the vessel is registered. (H) Total oil storage capacity - the total capacity, in gallons, of all tanks onboard the vessel designed to carry oil as fuel or cargo. (I) Vessel name - the name of the vessel as it appears on the vessel's Certificate of Documentation issued by the United States Coast Guard pursuant to 46 CFR Part 67 or the common name of the vessel. (2) Vessel Information. Owners/operators of OSPRA vessels must maintain vessel information onboard that is readily accessible to the vessel crew. Owners/operators may choose to incorporate OSPRA vessel plans into existing OPA or IMO plans in satisfaction of this subsection. Except for OSPRA vessel plans which are incorporated into existing OPA or IMO plans, vessel information shall include, at a minimum, the information listed in subparagraphs (A) - (E) of this paragraph; any format may be used to include the information listed herein. (A) the name, address, and 24-hour contact number of the owner/operator; (B) the vessel name; (C) the official number or state registration number; (D) the total oil storage capacity of the vessel; and (E) the name of the designated "person in charge". (3) Spill Response Information. Owners/operators of OSPRA vessels must maintain spill response information onboard that is readily accessible to the vessel crew. Spill response information may also be maintained onshore by any person designated by the owner/operator; however, if spill response information is also maintained onshore, the information must include the specific responsibilities of the onshore personnel, vessel crew, and designated "person in charge" both onshore and onboard the vessel. Owners/operators may choose to incorporate OSPRA vessel plans into existing OPA or IMO plans in satisfaction of this subsection. Except for OSPRA vessel plans which are incorporated into existing OPA or IMO plans, spill response information shall contain, at a minimum, the information listed in subparagraphs (A) and (B) of this paragraph; any format may be used to include the information listed herein. (A) Oil Spill Response Information. Owners/operators of OSPRA vessels must maintain information outlining initial steps that must be taken by vessel personnel to respond to an unauthorized discharge of oil. Owners/operators should prescribe, if necessary, more specificity for this information in order to conform to the particular operations of the vessel and its crew. The oil spill response information shall include, at a minimum, instructions for: (i) shutting down operations; (ii) securing the source of the spill; (iii) assessing the spill situation and evaluating for potential safety hazards to vessel personnel; (iv) taking immediate action for reducing the potential for future spillage; (v) assessing the condition of the vessel and taking action to prevent further vessel damage; and (vi) making notifications as described in subparagraph (B) of this paragraph and taking reasonable steps to abate, contain, and remove the unauthorized discharge of oil. (B) Notification Information. The person in charge shall notify the GLO of an unauthorized discharge of oil and shall include the information required under sec.19.32 relating to reporting an unauthorized discharge of oil. Owners/operators of OSPRA vessels must maintain 24-hour contact numbers for each geographic area in which the vessel operates for each of the following: (i) person in charge; (ii) owner/operator; (iii) cleanup contractors; (iv) vessel salvage contractors; and (v) government agencies. (4) Spill Prevention Information. Owners/operators of OSPRA vessels are encouraged to maintain sound management practices for spill prevention onboard the vessel. In the event of an oil spill, the GLO will consider whether the owner/operator had spill prevention measures in place and whether vessel personnel were familiar with and executed those measures. The following categories are suggested for use by owners/operators in the development of spill prevention measures: (A) sound management practices to prevent discharges of oily bilge water; (B) sound management practices to prevent discharges from oil transfer operations; (C) sound management practices to prevent discharges from hydraulic system failures; (D) sound management practices to prevent discharges of oil due to improper vessel maintenance; and (E) sound management practices to prevent discharges of oil due to improper handling and disposal of petroleum products. (5) Enforcement. The information required under paragraphs (2) and (3) of this subsection must be presented to GLO personnel upon request. Any owner/operator who violates this subsection is liable to the GLO for civil penalties in accordance with the provisions of OSPRA, sec.40.251. In the event of an unauthorized discharge of oil, use of spill prevention sound management practices by the owner/operator prior to and during the time of the spill will be considered by GLO personnel in determining whether to assess penalties. Penalties may be reduced or waived if appropriate spill prevention measures were in practice prior to and at the time of the spill. (6) Exception to Compliance With This Subsection. A one-time, one-port only exception from the requirements of this subsection shall be granted by GLO personnel to an owner/operator who is found to have violated the requirements of this subsection. This exception shall be granted once per owner/operator, not per vessel owned. Any owner/operator using this exception shall comply with the requirements of this subsection within 30 days of the date the exception is granted by GLO personnel. Any owner/operator shall be subject to penalties for any violation of this subsection, 30 days after being granted the one-time only exception by GLO personnel. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808811 Garry Mauro Commissioner General Land office Effective date: June 21, 1998 Proposal publication date: January 2, 1998 For further information, please call: (512) 305-9129 TITLE 40. SOCIAL SERVICES AND ASSISTANCE PART II. Texas Rehabilitation Commission CHAPTER 101. General Rules 40 TAC sec.101.4 The Texas Rehabilitation Commission adopts an amendment to sec.101.4, concerning general rules, without changes to the proposed text as published in the May 1, 1998, issue of the Texas Register (23 TexReg 4241). In accordance with the Appropriations Act, sec.167, the Commission has reviewed this section and has determined that it should be readopted. The section is being adopted in order to conform to the language of the Rehabilitation Act Amendments of 1994. No comments were received regarding adoption of this amendment. The amendment is adopted under the Texas Human Resources Code, Title 7, Chapter 111, sec.111.018 and sec.111.023, House Bill Number 1, Article IX, sec.167, which provides the Texas Rehabilitation Commission with the authority to promulgate rules consistent with Title 7, Texas Human Resources Code. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808759 Charles Schiesser Chief of Staff Texas Rehabilitation Commission Effective date: June 21, 1998 Proposal publication date: May 1, 1998 For further information, please call: (512) 424-4050 CHAPTER 106. Contract Administration SUBCHAPTER A. Acquisition of Client Goods and Services 40 TAC sec.106.36 The Texas Rehabilitation Commission adopts an amendment to sec.106.36, concerning contract administration, with changes to the proposed text as published in May 1, 1998, issue of the Texas Register (23 TexReg 4241). In accordance with the Appropriations Act, sec.167, the Commission has reviewed the section and has determined that it should be readopted with changes to correctly reflect agency organization. The section is being adopted to reflect the internal reorganization of the senior executives within the Commission. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Human Resources Code, Title 7, Chapter 111, sec.111.018 and sec.111.023, House Bill Number 1, Article IX, sec.167, which provides the Texas Rehabilitation Commission with the authority to promulgate rules consistent with Title 7, Texas Human Resources Code. sec.106.36. Contract Review Committee. A Contract Review Committee is created for the purpose of continuous review of these rules, standards, and implementing procedures. The Committee makes recommendations to the Commissioner, and is composed of the following staff: (1) (No change.) (2) Deputy Commissioner, Programs; (3) Deputy Commissioner, Financial Services; (4) (No change.) (5) Deputy Commissioner, Field Operations; (6) General Counsel; (7) Associate Commissioner, Management Audit; (8) Associate Commissioner, Automated Services; (9) Director, Buyer Support Services. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808760 Charles Schiesser Chief of Staff Texas Rehabilitation Commission Effective date: June 21, 1998 Proposal publication date: May 1, 1998 For further information, please call: (512) 424-4050 CHAPTER 115. Memoranda of Understanding with Other State Agencies 40 TAC sec.115.2 The Texas Rehabilitation Commission adopts an amendment to sec.115.2, concerning memoranda of understanding with other state agencies, without changes to the proposed text as published in the May 1, 1998, issue of the Texas Register (23 TexReg 4242). In accordance with the Appropriations Act, sec.167, the Commission has reviewed this section and has determined that it should be readopted. The section is being adopted in order to conform to the language of the Rehabilitation Act Amendments of 1994. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Human Resources Code, Title 7, Chapter 111, sec.111.018 and sec.111.023, House Bill Number 1, Article IX, sec.167, which provides the Texas Rehabilitation Commission with the authority to promulgate rules consistent with Title 7, Texas Human Resources Code. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808761 Charles Schiesser Chief of Staff Texas Rehabilitation Commission Effective date: June 21, 1998 Proposal publication date: May 1, 1998 For further information, please call: (512) 424-4050 PART III. Texas Commission on Alcohol and Drug Abuse CHAPTER 151.Peer Assistance 40 TAC sec.sec.151.1-151.5, 151.11, 151.21, 151.22, 151.31, 151.32, 151.51, 151.61 The Texas Commission on Alcohol and Drug Abuse adopts new sec.sec.151.1-151.5, 151.11, 151.21, 151.22, 151.31, 151.32, 151.51, and 151.61, concerning peer assistance programs. Sections 151.2, 151.4, 151.5, 151.11, 151.22, 151.31 are adopted with changes to the proposed text as published in the April 3, 1998, issue of the Texas Register (23 Tex Reg 3423). Sections 151.1, 151.3, 151.21, 151.32, 151.51 and 151.61 are adopted without changes and will not be republished. The new sections are being proposed to establish minimum requirements for peer assistance programs, including administrative structure, definitions, organization, staffing, program description, policies and procedures, referral process, and to establish the certification process that will be implemented by the Texas Commission on Alcohol and Drug Abuse. A few changes were made to improve clarity and readability. Section 151.2 was revised to clarify that peer assistance programs may include intervention to prevent job impairment because of substance abuse or mental health problems. Section 151.4 was revised to reflect that under statute peer assistance programs do not have to be established by their respective licensing or disciplinary authority. Several revisions were made to sec.151.5. First, wording was changed to clarify that programs must comply with federal confidentiality requirements as applicable. Second, wording regarding notification of third parties if the referred individual fails to participate in the program was revised to match the statute. Lastly, a program requirement was added regarding required consent for disclosure to the licensing or disciplinary authority and to referring third parties. Three revisions were made to sec.151.11: the term peer assistance program was changed to approved peer assistance program and the definitions of chemical dependency and mental health professional were revised. Section 151.22(f) was revised to clarify that all staff must receive training on confidentiality but only staff that work directly with program participants must receive the full eight-hour training. The introductory wording of sec.151.31(4) was changed to avoid confusion about whether or not the program must directly provide all services. The new sections describe the applicability of the rules, the program's purpose, the relationship between the program and the licensing/disciplinary authority, terms used in this chapter, organization, staffing requirements, program description, policies and procedures, referral requirements and the certification process. Comments were received from the Texas Dental Peer Assistance Program and the Texas Nurses Foundation. The comments are summarized below. Comment: The first sentence of sec.151.2 should be revised to broaden the purpose of peer assistance programs to include intervention to prevent job impairment because of substance abuse or mental health problems. Response: The rule has been revised as suggested. Comment: Section 151.4 should be revised to mirror the wording of the authorizing statute. This will reflect the fact that programs do not necessarily have to be established by their respective licensing or disciplinary authority. Response: The rule has been revised as suggested. Comment: The proposed language in sec.151.5(a) is ambiguous and perhaps problematic in implementation. It is not clear if the rule requires programs to comply with federal regulations for Confidentiality of Alcohol and Drug Abuse Patient Records (Code of Federal Regulations, Title 42, Part 2) only if applicable or if the rule requires all programs to comply with the federal regulations. If it is the commission's intent that all programs comply with the federal regulations regarding confidentiality, there will be problems in implementation as individuals who do not have a substance abuse or dependency problem are not covered under the federal regulations. Response: The rule has been revised to include the words "as applicable" to clarify the meaning. Comment: Section 151.5(b) requires reporting of non-compliance with the peer assistance program to the third party that referred the participant. We think the term "third parties" in the law was intended to refer only to employers. We request that the commission's rules be written to reflect this interpretation of the law Response: The legislative history of the changes to Chapter 467 of The Health and Safety Code does not support a narrow reading of the term "third parties". The commission, thus, declines to place any limitations on the notification of third parties. Comment: The wording of sec.151.5(b) should not be "fails to comply with program participation requirements" but should be worded exactly as the authorizing statute. Response: The commission agrees that it would be best to mirror the language of the law in its rules and this rule has been rewritten to do so. Comment: Add a new subsection to sec.151.5 to include the recent change to the Texas Health and Safety Code, sec.467.005, regarding required consent for disclosure. As a condition of participation in a peer assistance program, a person must give consent to the program to disclose their failure to participate in the program to the appropriate licensing or disciplinary authority. Response: The rule has been changed. It now reflects the new wording of the statute and it also includes consent to disclose to any reporting third party so that programs will be able to comply with the other requirements in the statute. This change also required renumbering of the proposed subsections. Comment: Add a new definition of peer assistance program that would read "A program that is designed to help impaired professionals." This would be a more generic definition of the term and would be identical to the language in the statute. Revise the proposed term peer assistance program to board approved peer assistance program using the proposed definition. This would mirror language in the statute. Response: The rules in Chapter 151 apply to approved peer assistance programs only. We think it would be confusing to include a more generic definition as well as a definition of approved peer assistance programs. We agree that our rules should, in as much as possible, reflect the statute. The proposed definition is identical to the full definition of an approved peer assistance program in the statute. Therefore, we have revised the term from peer assistance program to approved peer assistance program and retained the same full definition from the statute as was proposed. Comment: Replace the proposed definition of chemical dependency with "substance abuse or dependency as defined by the American Psychiatric Association in the Diagnostic and Statistical Manual, (DSM) -IV and any subsequent revisions thereof." Response: The definition has been changed as suggested. Comment: Delete the last sentence of the proposed definition of Mental health professional and replace it with "Mental health professional also includes a master's prepared nurse with national certification in addictions or psychiatric nursing." Response: The definition has been changed as suggested. Comment: In sec.151.22(e) change the word organization to program for consistency. Response: Much of the rule material does relate to the peer assistance program and its internal management. In those instances, the word program is appropriate. This subsection refers to supervision of the peer assistance staff and that includes the supervision of the executive director or program administrator. The supervision of this position usually rests with the association or authority that creates the peer assistance program and not with the program itself. For that reason, the word organization is used in this subsection. Comment: Revise sec.151.22(f) to require all staff be oriented to participant confidentiality but only those staff who will be working directly with participants be required to complete the more intensive training specified in this proposed subsection. Response: This section has been revised to require all staff have training in confidentiality and only staff that will be working with participants be required to participate in the full eight hour training. Comment: Change the beginning of sec.151.31(4) from "the services to be provided including:" to "how the following areas are addressed". The concern is that the proposed wording may be construed to mean that peer assistance programs must provide services directly or on-site. Response: Each program is required to provide services though the services may be provided in any number of ways and settings, including through referral. To avoid confusion, the wording has been changed as suggested. Comment: Add a requirement to sec.151.31 that the written description of the peer assistance program include minimum standards for volunteers. Though volunteers are included in the definition of staff, it makes sense for programs to address the role of volunteers separately from employed staff. Response: As noted in the comment, the definition of staff includes volunteers. Section 151.22 already requires minimum qualifications be established for all positions. The roles of paid and volunteer staff are to be delineated in the written program description when the program explains how it will function. We do not agree that it is necessary for this rule to require separate minimum standards for volunteers. The new sections are adopted under the Texas Health and Safety Code, sec.461.012(18) and sec.467.001 which provide the Texas Commission on Alcohol and Drug Abuse with the authority to promulgate written rules setting forth minimum standards for peer assistance programs. The code affected by the proposed rules are the Texas Health Safety Code, sec.461.012(18) and Chapter 467. sec.151.2. Program Purpose. Peer assistance programs identify, assist, and monitor individuals experiencing mental health, alcohol, or drug problems that are or are likely to be job- impairing so that the individuals may return to safe practice. Peer assistance programs offer support and assistance and have a rehabilitative emphasis rather than a disciplinary emphasis. sec.151.4. Relationship to Licensing/Disciplinary Authority. Peer assistance programs must be established or approved by the licensing or disciplinary authority for the profession the program is to serve. Peer assistance programs must submit documentation to the licensing/disciplinary authority demonstrating that the program meets the minimum criteria established by the commission and any additional criteria established by the state legislature or the licensing/disciplinary authority. sec.151.5. Program Requirements. (a) As applicable, the peer assistance program must comply with federal regulations for Confidentiality of Alcohol and Drug Abuse Patient Records (Code of Federal Regulations, Title 42, Part 2). (b) The program shall notify the person making the report and the appropriate licensing or disciplinary authority if the person fails to participate in the program as required by the appropriate licensing or disciplinary authority. (c) An impaired professional who is reported to a peer assistance program by a third party shall, as a condition of participation in the program, give consent to the program that at a minimum authorizes the program to disclose the impaired professional's failure to successfully complete the program to the appropriate licensing or disciplinary authority and to the person who referred the individual to the program. (d) The program must comply with applicable statutory mandates. sec.151.11.Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Approved peer assistance program - A program designed to help an impaired professional which is established or approved by a licensing or disciplinary authority, and meets the criteria established by the Texas Commission on Alcohol and Drug Abuse and any additional criteria established by the licensing or disciplinary authority. (2) Chemical dependency - Substance abuse or dependency as defined by the American Psychiatric Association in the Diagnostic and Statistical Manual (DSM)- IV and any subsequent revisions thereof. (3) Commission - The Texas Commission on Alcohol and Drug Abuse. (4) Impaired professional - An individual whose ability to perform professional services is impaired by chemical dependency or by mental illness. (5) Impaired student - A student whose ability to perform the services of the profession for which the student is preparing for licensure would be, or would reasonably be expected to be, impaired by chemical dependency on drugs or alcohol or by mental illness. (6) Licensing/disciplinary authority - A state agency or board that licenses or has disciplinary authority over professionals. (7) Mental health professional - An individual licensed by the state as a physician, professional counselor (LPC), chemical dependency counselor (LCDC), psychologist, marriage and family therapist (LMFT), master social worker (LMSW). Mental health professional also includes a master's prepared nurse with national certification in addictions or psychiatric nursing. (8) Mental illness - Any clinical disorder as defined in the Diagnostic and Statistical Manual of Mental Disorders 4th edition or subsequent editions. (9) Professional - An individual who may incorporate under the Texas Professional Corporation Act (Texas Civil Statutes, Article 1528e), or who is licensed, registered, certified, or otherwise authorized by the state to practice as a licensed professional. (10) Staff - All persons responsible for implementing a peer assistance program, whether employed, under contract, paid or volunteer. (11) Student - An individual enrolled in an educational program or course of study leading to initial licensure as a professional as such program or course of study is defined by the appropriate licensing or disciplinary authority. sec.151.22. Staffing. (a) The program shall maintain an adequate number of staff to effectively administer the program and provide the services identified in the program description. (b) Each staff position shall have a written job description that specifies: (1) duties and responsibilities; and (2) minimum qualifications, including the level of education, training, or related work experience required. (c) Only individuals who meet the minimum qualifications listed in the job description shall be employed as staff. (d) The application or resume for each staff member shall document required education, training, and related work experience. (e) The organization must provide adequate supervision for staff. (f) All staff must, as a minimum, receive training regarding program and participant confidentiality requirements. Staff who will coordinate intervention and/or participation or will consult with and/or monitor a participant shall complete eight hours of training before working with program participants. At least five hours of the training must be conducted by a mental health professional and include the following topics: (1) chemical dependency and mental illness, including appropriate treatment; (2) guidelines for identification; and (3) intervention and advocacy skills, as applicable. (g) The facility shall maintain documentation to verify compliance with these standards. Personnel files shall be kept for at least two years after the individual stops working with the program. sec.151.31. Program Description. There shall be a written description of the peer assistance program that includes: (1) goals and objectives; (2) target population; (3) the plan for ensuring services are available throughout the state; (4) how the following areas are to be addressed: (A) identification of and intervention with impaired professionals and, if served, impaired students; (B) assistance with accessing treatment; (C) monitoring and support of participants; (D) intervention in crises, including relapses; and (E) support during the reentry by participants to professional practice or academic role. (5) the plan for program evaluation; and (6) the methods that will be utilized to promote and encourage use of the 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808763 Mark S. Smock Deputy for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: June 21, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 349-6794 40 TAC sec.sec.151.21-151.28 The Texas Commission on Alcohol and Drug Abuse adopts the repeal of sec.sec.151.21-151.28 concerning peer assistance programs without changes to the proposed text as published in the April 3, 1998, issue of the Texas Register (23 TexReg 3426). These sections describe the authority, program purpose, application of the rules, definitions of terms used, general requirements, policies and procedures, the roles of peer intervenors and advocates, and the referral process used in peer assistance programs. These sections are repealed so that programmatic requirements can be revised and a certification process for certain of these programs can be implemented. No comments were received regarding the adoption of the repeals. The repeals are adopted under the Texas Health and Safety Code, sec.461.012(18) and sec.467.001 which provide the Texas Commission on Alcohol and Drug Abuse with the authority to promulgate written rules setting forth minimum standards for peer assistance programs. The code affected by the proposed rules are the Texas Health Safety Code, sec.461.012(18) and sec.467.001. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808757 Mark S. Smock Deputy for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: June 21, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 349-6794 CHAPTER 153.Offender Education Programs SUBCHAPTER A.General Provisions and Procedures 40 TAC sec.153.3 The Texas Commission on Alcohol and Drug Abuse adopts new sec.153.3 concerning fees for offender education programs. Section 153.3 is adopted with changes to the proposed text as published in the April 3, 1998 issue of the Texas Register (23 TexReg 3427). This new section is adopted to establish the fees that will be charged by the commission for offender education programs approved or certified by the Texas Commission on Alcohol and Drug Abuse. One change was made to the proposed text in sec.153.3(a). A typographical error in the reference to the subsection where the fee schedule is located was corrected. This new section itemizes fees assessed by the commission and describes restrictions related to fees. By raising these fees, the Texas Commission on Alcohol and Drug Abuse is seeking to recoup at least half of the cost to administer these programs. These fees are set by the commission and are not mandated by the legislature. The new section is adopted under the Texas Transportation Code, sec.sec.521.374- 521.376, the Texas Alcoholic Beverage Code, sec.106.115, the Texas Health and Safety Code, sec.461.012(18), and the Texas Code of Criminal Procedure, Article 42.12, which provide the Texas Commission on Alcohol and Drug Abuse with the authority to promulgate written rules setting forth minimum standards for the approval or certification of offender education programs. No comments were received regarding the adoption of this section. The codes affected by the adopted new section are the Texas Transportation Code sec.sec.521.374-521.376, the Texas Alcoholic Beverage Code, sec.106.115, the Texas Health Safety Code, sec.461.012(18), and the Texas Code of Criminal Procedure, Article 42.12. sec.153.3. Fees. (a) Fees will be assessed by the commission in accordance with the fee schedule set forth in sec.153.3(b) of this title (relating to Application and Approval/Certification), as applicable. (b) The schedules of fees shall be as follows: (1) initial application fee - $300; (2) application renewal fee -$225; (3) participant certificates of completion - $100/batch (in batches of 100 at $1.00 per certificate); (4) program approval certificate duplication or replacement fee - $5.00. (c) Fees paid to the commission by applicants are not refundable. (d) Payment must be in the form of cashier's check, money order, commercial check, or agency voucher. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808764 Mark S. Smock Deputy for Finance and Administration Texas Commission on Alcohol and Drug Abuse Effective date: June 21, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 349-6794 TITLE 43. TRANSPORTATION PART I. Texas Department of Transportation CHAPTER 1.Management SUBCHAPTER F.Advisory Committee 43 TAC sec.1.82, sec.1.83 The Texas Department of Transportation adopts amendments to sec.1.82 and sec.1.83, concerning statutory advisory committees. Section 1.82 and sec.1.83 are adopted with changes to the proposed text as published in the January 2, 1998, issue of the Texas Register (23 TexReg 111). EXPLANATION OF ADOPTED AMENDMENTS Senate Bill 370, sec.1.34, 75th Legislature, 1997, created Transportation Code, sec.53.001, requiring the department to create a Port Authority Advisory Committee (PAAC) to advise the commission and the department on matters relating to port authorities. In order to comply with Senate Bill 370, sec.1.34, 75th Legislature, 1997, and provide for representation on the committee from several geographic areas, sec.1.82 is amended to provide that the commission will appoint five members to staggered three-year terms, except for the initial terms. One member will be from the Port of Houston Authority of Harris County, two will be from ports located north of the Matagorda/Calhoun County line (excluding the Port of Houston Authority), and two will be from ports located south of the Matagorda/Calhoun County line. The amendments also provide that the commission will consider nominees for appointments, and authorize the members to be reimbursed for reasonable and necessary expenses if funding has been appropriated by the legislature, and provides for the election of the chair for a two-year term. Section 1.83 is amended to establish the duties of the committee to advise the commission and the department on matters relating to port authorities, including intermodal and multimodal transportation issues; the identification, development, and implementation of all potential funding mechanisms; and other issues affecting port access and infrastructure needs. It also provides procedures for election of the chair and committee meetings. RESPONSE TO COMMENTS Written comments were received from the Texas Ports Association (TPA) whose membership is comprised of 11 deep water and two shallow draft ports in Texas. TPA did not indicate whether it was in favor of or against the proposed rules. Comment: TPA stated that an executive committee of the Texas Ports Association has been functioning for years in the very capacity that Senate Bill 370 envisioned in creating the PAAC. The TPA noted that knowledgeable port executives are already in place to advise the commission and the department on matters relating to port authorities. The TPA questioned the duplication of effort between its executive committee and the PAAC. In further identifying duplication, the TPA stated that its executive committee members comply with the mandate in Senate Bill 370 by having a five-member advisory board, one member from the "Port of Houston Authority of Harris County," two from ports located north of the Matagorda/Calhoun County line, and two from ports located south of the Matagorda/Calhoun County line. Response: Senate Bill 370, sec.1.34, 75th Legislature, 1997, created Transportation Code, sec.53.001, requiring the department to create the PAAC to specifically advise the commission and the department on matters relating to port authorities. It is anticipated that the statutory creation of the PAAC will establish a valuable forum, whose administrative operations will be supported by the department, for the exchange of information between the PAAC, the commission, and the department. Comment: TPA recommended that the PAAC members serve staggered terms with three members serving two years and two members serving three years. To achieve this, the TPA recommends that sec.1.82(b)(5)(B)(i) be stricken to require that no member's term on the PAAC expire on December 31, 1999. TPA also requests that sec.1.82(b)(5)(B)(ii) be amended to require that three members' service terms expire on December 31, 2000 and that sec.1.82(b)(5)(B)(iii) be changed to (ii) to require that two members' service terms expire on December 31, 2001. Response: The department will not change this provision because it has achieved the maximum staggered effect of service rotations in the initial formation of the committee. One member will serve 18 months, two will serve two and one-half years, and two will serve three and one-half years. In this manner, the number of expired service term replacements will not exceed two in a year, and a committee quorum will not be jeopardized by term expirations. Comment: TPA states that sec.1.82(b)(5)(D) should be amended to reflect that the commission will consider nominees for the five members from only the Texas Ports Association. In addition, TPA requests that sec.1.83(e)(1) be changed to allow the committee forum to include exchange of information between the commission, the department, and PAAC members representing the port industry in Texas, but not others who have an interest in ports. Response: The department recognizes the significant contributions of the Texas port industry to the state, and commends the mission of the Texas Ports Association to promote ports and waterborne commerce in Texas. However, the department also recognizes that the port industry contributions are generated by direct and indirect activities of an entire port system, including the port, port users, and port capital expenditures. To obtain wide representation of the many interests in the Texas port industry, nominees to the committee will be considered from a broad spectrum of interests. Notice of the meetings of the PAAC will be posted with the Secretary of State. Such a forum provides an opportunity for anyone who has an interest in ports to attend. Section 1.82(b)(5)(D) is changed to (E) in order to correct a lettering mistake. Section 1.83(e)(1) will remain unchanged. Comment: TPA requests that sec.1.82(b)(6) be amended to allow the PAAC to elect a chair for a two-year term, paralleling committee chairs in the legislature. Response: The department recognizes the benefits of the additional experience and continuity received from a two-year service term for the committee chair, and agrees that the section be changed as recommended. This will not place an additional burden on the chair because if a chair only wants to serve one year, he or she may resign the chairship after that period. Comment: TPA states that expenses for committee members in the performance of their duties should be reimbursed by the department to prevent a financial burden on ports with very tight budgets. Response: Transportation Code, sec.53.001 authorizes reimbursement for reasonable and necessary expenses for performance of committee duties; however, the department must receive the legislative authority through the Appropriations Act to expend funds for this purpose. The department does not wish to cause hardship for any committee members, but until necessary authority is received, reimbursements may not be provided. Section 1.82(d) will remain unchanged, but can be amended in the future, if the needed authority is obtained. Comment: TPA states that recommendations made by the PAAC should warrant a timely written response from the commission, and requests that sec.1.82(g) be revised to require that the commission shall respond in writing within 45 days to the PAAC regarding any recommendations submitted by the PAAC. Response: PAAC was created to provide advice and recommendations which will be considered by the commission during meetings that are open to the public. Typically, the commission determines its response and actions during these meetings. However, in some instances, staff may need additional time to conduct extended analysis or policy deliberations. Responses to PAAC will be made in as timely a manner as possible, but sec.1.82(g) will remain unchanged to allow for flexibility. Comment: TPA requests a change to sec.1.83(e)(1) so the committee's advice and recommendations may include making recommendations for consideration of legislation that would enhance the Texas port industry and improve its competitiveness. Response: Changing the duty of the PAAC would be a significant change to the proposal and is prohibited at the time of final adoption under the Administrative Procedure Act. The department will take this recommendation under advisement; however, the department does not have any indication that the legislature intended the committee to develop legislation as part of its duties. Section 1.83(e)(1) will remain unchanged. Comment: TPA recommends that sec.1.83(e)(2)(A)(ii) be revised to provide that the PAAC may advise the commission and the department on the identification, development and also the implementation of funding mechanisms, for Intermodal Surface Transportation Efficiency Act (ISTEA) funding, including the reauthorization of ISTEA, department discretionary funding, and the state infrastructure bank, for addressing the issues described by clause sec.1.83(e)(2)(A)(i). Response: The department agrees. The duties of the committee include advising the commission and the department on matters relating to port authorities. The rules specify certain matters such as intermodal and multimodal transportation issues, as well as the identification and development of funding mechanisms for addressing these issues. Providing advice on methods to implement funding mechanisms falls within the development of funding mechanisms. In addition, the department agrees that the PAAC should consider all potential funding mechanisms whether existing or future, federally legislated, or otherwise. To clarify that the state infrastructure bank is included as a funding mechanism, sec.1.83(e)(2)(A)(ii) is revised to include the identification, development, and implementation of all potential funding mechanisms, including the state infrastructure bank, for addressing the issues described by clause sec.1.83(e)(2)(A)(i). Comment: The TPA requests that a new sec.1.83(e)(2)(A)(iii) be added to include that the PAAC may advise on other issues affecting port access and infrastructure needs. Response: The department agrees. The duties of the PAAC comprise advising the commission and the department on matters relating to port authorities, including intermodal and multimodal transportation issues. To provide clarification that port access and infrastructure needs are related to intermodal and multimodal transportation issues, "including other issues affecting port access and infrastructure needs" is added to sec.1.83(e)(2)(A)(i). Comment: TPA recommends that sec.1.83(e)(3) be changed to require the PAAC to meet at least twice a year. Further, the TPA requests that the chair be allowed to call additional meetings. Response: The department did not intend to limit the committee to meeting only once a year. It may meet more often, but it must meet at least once a year. The department agrees that to allow additional meetings to be requested by the committee chair would increase the flexibility of the committee. Section 1.83(e)(3) is revised to clarify that the committee may meet more than once a year by adding that it will meet "at least once a year" and that the committee chair may request the department to call a meeting. STATUTORY AUTHORITY The amendments are adopted under Transportation Code, sec.201.101 which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and Transportation Code, sec.53.001, which requires the department to create a PAAC to advise the commission and the department on matters relating to port authorities. sec.1.82. Statutory Advisory Committee Operations and Procedures. (a) Applicability. This section applies to statutory advisory committees. (b) Membership. (1) Aviation. The commission will appoint the members of the Aviation Advisory Committee to staggered terms of three years, unless sooner removed at the discretion of the commission, with two members' terms expiring August 31 of each year. (2) Household Goods Carriers. Pursuant to Texas Civil Statutes, Article 6675c, sec.8(f), the department's assistant executive director for motorist services shall appoint to the Household Goods Carrier Advisory Committee: (A) three members as representatives of the general public; (B) one member as a representative of the department; and (C) one member each as representatives of motor carriers transporting household goods using small equipment, motor carriers transporting household goods using medium equipment, and motor carriers transporting household goods using large equipment. (3) Public Transportation. Members of the Public Transportation Advisory Committee shall be appointed and shall serve pursuant to Transportation Code, sec.455.004. (4) Vehicle Storage Facility/Tow Truck Rules. The department's assistant executive director for motorists services will appoint to the Vehicle Storage Facility/Tow Truck Rules Advisory Committee two members who represent the general public and one member each as representatives of the following: (A) tow truck operators; (B) vehicle storage facility operators; (C) owners of property having parking facilities; (D) law enforcement agencies or municipalities; and (E) insurance companies. (5) Port Authority. (A) The commission will appoint five members to staggered three-year terms unless removed sooner at the discretion of the commission. (B) For initial terms, the commission will appoint: (i) one member to serve a term expiring on December 31, 1999; (ii) two members to serve terms expiring December 31, 2000; and (iii) two members to serve terms expiring December 31, 2001. (C) Existing members shall serve until the commission appoints new members under subparagraph (A) of this paragraph. (D) The commission will appoint: (i) one member from the Port of Houston Authority of Harris County; (ii) two members from ports located north of the Matagorda/Calhoun County line and excluding the Port of Houston Authority; and (iii) two from ports located south of the Matagorda/Calhoun County line. (E) The commission will consider nominees for the five members from: (i) Texas Ports Association; (ii) other port associations; (iii) Texas ports; and (iv) the general public. (6) Officers. Each committee shall elect a chair and vice-chair by majority vote of the members of the committee. The Port Authority Advisory Committee shall elect a chair for a two-year term. The department encourages the committee to rotate the chair among the members from the different geographic areas represented. (c) Meetings. (1) Open meeting requirements. Advisory committees shall post and hold all meetings in accordance with the provisions applicable to meetings of the commission under the Texas Open Meetings Act, the Government Code, Chapter 551. Filing of notice of open meetings with the Secretary of State shall be coordinated through the department's general counsel. (2) Regular meetings. The chair of the committee shall provide notice of time, date, place, and purpose of regular meetings to the members and the executive director, by mail or telephone or both, at least 10 calendar days in advance of each meeting. (3) Quorum. A majority of the membership of an advisory committee constitutes a quorum. The committee may act only by majority vote of its membership. (4) Attendance. A record of attendance at each meeting shall be made. If a member of a committee appointed by the commission or by the department misses two consecutive meetings, written notice shall be given to the member. A third consecutive absence from a regular meeting will be sufficient grounds for removal of the member. (5) Parliamentary procedure. Parliamentary procedures for all committee meetings shall be in accordance with the latest edition of Roberts Rules of Order, except that the chair may vote on any action as any other member of the committee. (6) Record. Minutes of all committee meetings shall be prepared and filed with the commission. The complete proceedings of all committee meetings must also be recorded by electronic means. (7) Open records. All minutes, transcripts, and other records of the advisory committees are records of the commission and as such are subject to disclosure under the provisions of the Government Code, Chapter 552. (d) Reimbursement. Advisory committee members are not entitled to receive compensation for serving as members. Members of the Public Transportation, Aviation Advisory, and Port Authority Advisory Committees will be reimbursed for reasonable and necessary expenses for performing their duties if funding has been appropriated by the legislature. Current rules and laws governing reimbursement of expenses for state employees shall govern reimbursement for expenses of advisory committee members. (e) Conflict of interest. Advisory committee members are subject to the same laws and policies governing ethical standards of conduct as those for commission members and employees of the department. (f) Administrative support. For each advisory committee, the executive director will designate an office of the department that will be responsible for providing any necessary administrative support essential to the functions of the committee. (g) Advisory committee recommendations. In developing department policies, the commission will consider the recommendations submitted by advisory committees. (h) Manner of reporting. (1) The office designated under subsection (f) of this section shall, in writing, report to the commission an official action of a statutory advisory committee, including any advice and recommendations, prior to commission action on the issue. The chair of the advisory committee or his or her designee will also be invited by the department to appear before the commission prior to commission action on a posted agenda item to present the committee's advice and recommendations. (2) In the event a written report cannot be furnished to the commission prior to commission action, the report may be given orally, provided that a written report is furnished within 10 days of commission action. sec.1.83. Statutory Advisory Committees. (a) Aviation Advisory Committee. (1) Purpose. Created pursuant to Transportation Code, sec.21.003, the Aviation Advisory Committee provides a direct link for general aviation users' input into the Texas Airport System. The committee provides a forum for exchange of information concerning the users' view of the needs and requirements for the economic development of the aviation system. The members of the committee are an avenue for interested parties to utilize to voice their concerns and have that data conveyed for action for system improvement. Additionally, committee members are representatives of the department and its Aviation Division, able to furnish data on resources available to the Texas aviation users. (2) Duties. The committee shall: (A) periodically review the adopted capital improvement program; (B) advise the commission on the preparation and adoption of an aviation facilities development program; (C) advise the commission on the establishment and maintenance of a method for determining priorities among locations and projects to receive state financial assistance for aviation facility development; (D) advise the commission on the preparation and update of a multi-year aviation facilities capital improvement program; and (E) perform other duties as determined by order of the commission. (3) Meetings. The committee shall meet once a calendar year and such other times as requested by the Aviation Division Director. (4) Duration. The committee is abolished September 1, 2001, unless continued in existence by affirmative vote of the commission. (b) Household Goods Carriers Advisory Committee. (1) Purpose. The Household Goods Carriers Advisory Committee provides a forum for household goods carriers and the general public to provide input into modernizing and streamlining department rules adopted under Texas Civil Statutes, Article 6675c, sec.8(c), which are designed to protect customers of household goods movers from deceptive or unfair practices and unreasonably hazardous activities on the part of movers. The committee, with representation from the regulated community, the general public, and the department, helps ensure effective communication among interested parties and valuable input into modernizing and streamlining department rules affecting household goods carriers and their customers. (2) Duties. The committee shall: (A) examine the rules adopted under Texas Civil Statutes, Article 6675c, sec.8(c) and advise the department on methods of modernizing and streamlining such rules; (B) conduct a study of the feasibility and necessity of requiring any vehicle liability insurance for household goods carriers required to register under Texas Civil Statutes, Article 6675c,sec.8; (C) recommend a maximum level of liability for loss or damage of household goods carriers required to register under Texas Civil Statutes, Article 6675c, sec.8, not to exceed 60 cents per pound; and (D) perform other duties as assigned by the Motor Carrier Division Director. (3) Meetings. The committee shall meet at the request of the Motor Carrier Division Director. (4) Duration. The committee is abolished September 1, 2001, unless continued in existence by affirmative vote of the commission. (5) Rulemaking. Section 1.84 of this title (relating to Rulemaking) does not apply to the Household Goods Carrier Advisory Committee. (c) Public Transportation Advisory Committee. (1) Purpose. Created pursuant to Transportation Code, sec.455.004, the Public Transportation Advisory Committee provides a forum for the exchange of information between the department, the commission, and committee members representing the transit industry and the general public. Advice and recommendations expressed by the committee provide the department and the commission with a broader perspective regarding public transportation matters that will be considered in formulating department policies. (2) Duties. The committee shall: (A) advise the commission on the needs and problems of the state's public transportation providers, including recommending methods for allocating state public transportation funds if the allocation methodology is not specified by statute; (B) comment on proposed rules or rule changes involving public transportation matters during their development and prior to final adoption unless an emergency requires immediate action by the commission; and (C) perform other duties as determined by order of the commission. (3) Meetings. The committee shall meet: (A) as necessary, at the call of its chair, but not exceeding once each month; (B) at the request of the commission; and (C) as required by sec.1.84 of this title (relating to Rulemaking). (4) Public transportation technical committees. (A) The Public Transportation Advisory Committee may appoint one or more technical committees to advise it on specific issues, such as vehicle specifications, funding allocation methodologies, training and technical assistance programs, and level of service planning. (B) A technical committee shall report any findings and recommendations to the Public Transportation Advisory Committee. (5) Duration. The committee is abolished September 1, 2001, unless continued in existence by affirmative vote of the commission. (d) Vehicle Storage Facility/Tow Truck Rules Advisory Committee. (1) Purpose. Created pursuant to Texas Civil Statutes, Article 6675c, the purpose of the Vehicle Storage Facility/Tow Truck Rules Advisory Committee is to advise the department on the development of rules concerning the registration of tow trucks under Texas Civil Statutes, Article 6675c, and the administration of the Vehicle Storage Facility Act, Texas Civil Statutes, Article 6687-9a. The committee, with representation from the regulated community, law enforcement, and the general public, helps ensure effective communication among interested parties and valuable input into the development of rules affecting the tow truck industry. (2) Duties. The committee shall advise the department on the adoption of rules regarding: (A) the application of Texas Civil Statutes, Article 6675c to tow trucks; and (B) the administration by the department of the Vehicle Storage Facility Act. (3) Meetings. The committee shall meet: (A) at the request of the Motor Carrier Division Director; and (B) as required by sec.1.84 of this title (relating to Rulemaking). (4) Duration. The committee is abolished September 1, 2001, unless continued in existence by affirmative vote of the commission. (e) Port Authority Advisory Committee. (1) Purpose. Created pursuant to Transportation Code, sec.53.001, the purpose of the Port Authority Advisory Committee is to provide a forum for the exchange of information between the commission, the department, and committee members representing the port industry in Texas and others who have an interest in ports. The committee's advice and recommendations will provide the commission and the department with a broad perspective regarding ports and transportation- related matters to be considered in formulating department policies concerning the Texas port system. (2) Duties. The committee shall: (A) advise the commission and the department on matters relating to port authorities, including: (i) intermodal and multimodal transportation issues relating to Texas waterways, ports, and port improvements, including other issues affecting port access and infrastructure needs and; (ii) the identification, development, and implementation of potential funding mechanisms, including the state infrastructure bank, for addressing the issues described by clause (i) of this subparagraph; and (B) perform other duties as determined by the commission or the executive director or his or her designee. (3) Meeting. The committee shall meet at least once a calendar year and such other times as requested by the commission, the executive director or his or her designee. The chair may request the department to call a meeting. (4) Subcommittees. (A) The Port Authority Advisory Committee may appoint one or more subcommittees to provide advice on specific issues. (B) A subcommittee shall report any findings and recommendations to the Port Authority Advisory Committee chair. (5) Duration. The committee is abolished on September 1, 2001, unless continued in existence by affirmative vote 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808795 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: January 2, 1998 For further information, please call: (512) 463-8630 CHAPTER 3.Public Information SUBCHAPTER B.Access to Official Records 43 TAC sec.3.12, sec.3.14 The Texas Department of Transportation adopts amendments to sec.3.12 and sec.3.14, concerning public information access to motor vehicle records. Section 3.12 is adopted with changes to the proposed text as published in the March 13, 1998, issue of the Texas Register (23 TexReg 2779). Section 3.14 is adopted without changes and will not be republished. EXPLANATION OF ADOPTION OF AMENDMENTS Transportation Code, sec.201.501 authorizes the department to furnish certified copies of records. Transportation Code, sec.502.008 prescribes methods for releasing vehicle registration information upon receipt of a written request or under the terms of a written service agreement with the department. Government Code, sec.552.230 and sec.552.262 authorizes each agency to promulgate rules of procedure for the inspection and copying of public information and to specify the charges the agency will make for copies of public records. Senate Bill 1069, 75th Legislature, 1997, added Transportation Code, Chapters 730 and 731, which require the department to provide the subject of a motor vehicle certificate of title or motor vehicle registration record the opportunity to prohibit disclosure of their personal information contained in the record, except for the uses permitted by those chapters. The Federal Driver's Privacy Protection Act, 18 U.S.C. sec.2721, effective September 13, 1997, restricts the disclosure of vehicle registration and title records to certain individuals, agencies, and businesses. Section 3.12 is amended to provide that the department will release certain vehicle registration information by telephone or upon receipt of a written request, but only in accordance with Transportation Code, sec.502.008 and Chapters 730 and 731, and 18 U.S.C. sec.2721; make available a form for written requests for motor vehicle registration information; and make available a form by which an individual may request the department to restrict the release of personal information contained in their motor vehicle records. Section 3.14 is amended to clarify the terms of written service agreements with individuals and businesses who obtain electronic access to motor vehicle registration records to include the amount of the initial deposit and minimum balance to be maintained in a non-interest bearing escrow account for on-line access accounts and prepaid accounts for batch purchase of motor vehicle registration information. The amendments are adopted in response to House Bill 1069, the Federal Driver's Privacy Protection Act, and a need for a clarification of the payment procedure for on-line access accounts and prepaid accounts for batch purchase of motor vehicle registration information. RESPONSE TO COMMENTS No oral or written comments were received on the proposed amendments. However, for clarification purposes, sec.3.12(a)(3)(A)(iii) is amended by adding that "a person who is" the subject of a motor vehicle record is considered to be the "subject" of a motor vehicle record. In addition, the web site location for electronic mail in sec.3.12(a)(1)(B) has been revised to reflect the current site. STATUTORY AUTHORITY The amendments are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, Transportation Code, sec.502.008 which authorizes the release of certain vehicle title and registration information, and Government Code, sec.552.230 and sec.552.262, which authorizes each agency to promulgate rules of procedure for the inspection and copying of public information and to specify the charges the agency will make for copies of public records. sec.3.12. Public Access. (a) Request for records. (1) Submittal of request. A person seeking public information shall submit a request in writing to the department. (A) A request made by other than electronic mail shall be submitted to: (i) the department's Director of Public Information; or (ii) the district engineer or division director for the district or division of the department responsible for the information. (B) A request made by electronic mail shall be sent to the department's World Wide Web site, located at http://www.dot.state.tx.us/. (2) Information required. A request for official records shall include the name, address, and telephone number of the requestor, and a description of the records in sufficient detail to permit efficient gathering of the requested items. (3) Vehicle title and registration information. (A) The department will provide certain vehicle registration information by telephone or upon receipt of a written request. Requested information will be released in accordance with 18 U.S.C. sec.2721, Transportation Code, Chapters 730 and 731, and Transportation Code sec.502.008. (B) The department will provide a written form for requests for motor vehicle registration information which includes, but is not limited to: (i) the name and address of the requestor; (ii) the Texas license number, title or document number, and/or the vehicle identification number; (iii) a statement that if a person who is the subject of the record has requested the department to restrict the release of the information, the requested information may only be released if the requestor is the subject of the record, has written authorization for release from the subject of the record, or the intended use is for one of the permitted uses indicated on the form; (iv) a statement that the information is requested for a lawful and legitimate purpose, and the requestor will not disseminate or publish the information obtained from the department on the Internet or permit another to do so, in accordance with Transportation Code, Section 731.002; (v) a certification that the statements made on the form are true and correct; and (vi) the signature of the requestor. (C) Each written request shall be accompanied by payment of the applicable fee in the form of either cash, cashier's check, or money order. (D) The department will provide vehicle registration information by license number by telephone only in accordance with 18 U.S.C. sec.2721 and Transportation Code, Chapters 730 and 731, and only if requested by: (i) a peace officer acting in an official capacity; or (ii) an official of the state, city, town, county, special district, or other political subdivision, utilizing the obtained information for tax purposes or for the purpose of determining eligibility for a state public assistance program. (4) HUB/DBE applicant information. The department will not release information submitted by a vendor or contractor in connection with an application for certification as a HUB or DBE unless requested by a: (A) state or local governmental agency; or (B) person with the express written permission of the HUB/DBE or the HUB/DBE's agent. (5) Accident information. The department will not release information about the date of accident, the name of a person involved in an accident, or the specific location of an accident unless requested by: (A) the Department of Public Safety; (B) a governmental agency that uses the information for accident prevention purposes; (C) the law enforcement agency that employs the peace officer who investigated the accident and reported it to the Department of Public Safety; and (D) a person who provides the name of a person involved in the accident and: (i) the date of the accident; or (ii) the specific location where the accident occurred. (b) Production of records. Except as provided in subsections (d) and (e) of this section, the department will provide copies or promptly produce official department records for inspection, duplication, or both. If the requested information is unavailable for inspection at the time of the request because it is in active use or otherwise not readily available, the department will certify this fact in writing within 10 business days after the date the information is requested to the applicant and specify a date and hour within a reasonable time when the record will be available for inspection or duplication. (c) Examination of information. (1) A person requesting to examine official records in the offices of the department must complete the examination without disrupting the normal operations of the department and not later than the 10th day after the date the records are made available to the person. Upon written request, the department will extend the examination period by increments of 10 days, not to exceed a total of 30 days. (2) The inspection of records may be interrupted by the department if the records are needed for use by the department. The period of interruption will not be charged against the requestor's 10-day period to examine the records. (3) A person may not remove an original copy of an official department record from the offices of the department. (d) Request for opinion. If the department considers that requested records fall within an exception under the Code, and that the records should be withheld, by the 10th business day after the date of receiving the written request, the department will ask for a decision from the attorney general about whether the records are within that exception if there has not been a previous determination about whether the records fall within one of the exceptions. (e) Confidential information and privacy protection. (1) The department will not provide records considered to be confidential by law or otherwise prohibited from release under the Code or other provisions of law, and will not provide copies of information subject to intellectual property protection. (A) The department will not provide access to social security numbers contained in the department's records except to governmental agencies that demonstrate authority to obtain the information. (B) Upon receipt of a request from an individual to restrict release of his or her personal information in the motor vehicle registration record, the department will only release the information in accordance with 18 U.S.C. sec.2721 and Transportation Code, Chapters 730 and 731. The department will provide a form for such a request, which at a minimum includes: (i) the printed name and address of the requestor; (ii) the description of the motor vehicle to which the request applies; (iii) an area which allows the requestor to restrict disclosure of their personal information in response to individual requests for information and/or requests for information to be used for bulk distribution for surveys, marketing, or solicitations; and (iv) the signature of the requestor. (C) Upon receipt of a court order to prevent release of information, the department will prevent access to all information pertaining to an individual's specific motor vehicle record. (2) A legislative member, agency, or committee may request confidential information if the public information requested is for legislative purposes. The department may require the requesting legislative agency or committee, or the member or employee of the requesting entity to sign a confidentiality agreement that requires the following: (A) the information shall not be disclosed outside the requesting entity, or within the requesting entity for purposes other than the purpose for which it was received; (B) the information shall be labeled confidential; (C) the information shall be kept securely; and (D) the number of copies of the information or the notes taken from the information that are not destroyed or returned to the department remain confidential and subject to the confidentiality agreement. (f) Certified records. In accordance with Transportation Code, sec.201.501, the following officials shall serve as the executive director's authorized representatives for the purpose of certifying official department records. (1) The Department's chief minute clerk may certify commission minute orders. In his or her absence, minute orders may be certified by the executive assistant to the executive director. The executive director may delegate certification authority to other officials to assure sufficient availability of authorized certifying officials. (2) Other official records of the department may be certified by the district engineer, division director, or other department officials having official custody of the records. A district engineer or division director may delegate certification authority to other officials to assure sufficient availability of authorized certifying officials. (g) Programming and manipulation of data. (1) If responding to a request for information will require programming or manipulation of data and compliance with the request is not feasible or will result in substantial interference with the department's ongoing operations, or the information could be made available in the requested form only at a cost that covers the programming and manipulation of data, then the department will provide a written statement within 20 days after the date of the receipt of the request. The statement will include: (A) the information is not available in the requested form; (B) a description of the form in which the information is available; (C) a description of any contract or services that would be required to provide the information in the requested form; (D) a statement of the estimated cost of providing the information; and (E) a statement of the anticipated time required to provide the information. (2) If the department gives written notice within 20 days after the date of receipt of the request to the person making the request that additional time is needed, the department may have an additional 10 days to issue the statement in paragraph (1) of this subsection. (3) The department will not provide the information until the person making the request states in writing that he or she wants: (A) the department to provide the information according to the cost and time parameters set out in the statement; or (B) the information in the form in which it is available. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808796 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: March 13, 1998 For further information, please call: (512) 463-8630 CHAPTER 9.Contract Management SUBCHAPTER A.General 43 TAC sec.9.3 The Texas Department of Transportation adopts new sec.9.3, concerning protests made of purchases by the department under the State Purchasing and General Services Act. Section 9.3 is adopted with changes to the proposed text as published in the March 13, 1998, issue of the Texas Register (23 TexReg 2781). EXPLANATION OF PROPOSED NEW SECTION Senate Bill 1752, 75th Legislature, 1997, added Government Code, sec.2155.076 to the State Purchasing Act to require each state agency to develop and adopt protest procedure rules for resolving vendor protests relating to purchasing issues. The act requires that the agency's rules must be consistent with the General Services Commission's rules which are located in 1 TAC Chapter 111. New sec.9.3 is adopted to comply with Government Code, sec.2155.076 and provide a fair and efficient procedure for the protest of department purchases which does not place an undue burden on the protesting party. This section provides that the purpose of the section is to provide a procedure for vendors to protest purchases. The section defines general words and terms used throughout the new section, provides where and when a protest may be filed, establishes the minimum informational contents of the protest, and indicates who must receive copies of the protest. The section authorizes the department to suspend the purchase award during the protest unless the director of general services division makes a written determination that the award of the purchase should be made without delay to protect substantial interests of the department. The section: establishes an informal resolution process, including solicitation of written responses and resolution of dispute by agreement; requires the department to issue a written determination to a protest if the protest is not resolved by mutual agreement; and provides that remedial action may be taken, including declaring the purchase void, reversing the award, or re-advertising the purchase. The section establishes an appeal process which includes review and recommendation by the general counsel to the executive director. The executive director may make a final determination or refer the matter to the Texas Transportation Commission for final determination. The department may reject protests that are untimely filed. RESPONSE TO COMMENTS No comments were received on the proposed new section. A change has been made due to the elimination of the position of deputy executive director for administrative services in the reorganization of the department. The definition of executive deputy director for administrative services has been eliminated from sec.9.3(b), and in sec.9.3(d), the executive director or his or her designee, not below the level of division director, will make the decision as to whether an award of purchase should be made without delay instead of the deputy executive director for administrative services. STATUTORY AUTHORITY The new section is adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically Government Code, sec.2155.076 which requires the department to adopt rules concerning protest of purchase. sec.9.3. Protest of Department Purchases under the State Purchasing and General Services Act. (a) Purpose. The purpose of this section is to provide a procedure for vendors to protest purchases made by the department. Purchases made by the General Services Commission on behalf of the department are addressed in 1 TAC Chapter 111. (b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Act - Government Code, Chapters 2151-2177, the State Purchasing and General Services Act. (2) Commission - The Texas Transportation Commission. (3) Department - The Texas Department of Transportation. (4) Director of general services - The director of the general services division of the department. (5) Director of purchasing - The director of purchasing in the general services division of the department. (6) District engineer - The chief administrative officer in charge of a district of the department. (7) Division - An organizational unit in the department's Austin headquarters. (8) Executive director - The executive director of the department. (9) Interested party - A vendor that has submitted a bid for the purchase involved. (10) Purchase - A procurement action for commodities or non-professional services under the Act. (11) Rules - 1 TAC sec.sec.113.1-113.87, the State Purchasing Rules. (c) Filing of protest. (1) An actual or prospective bidder or offeror who is aggrieved in connection with the solicitation, evaluation, or award of a purchase may file a written protest. The protest must be addressed to the attention of the district engineer in whose district the action is being or was processed, or to the director of purchasing for purchases made on behalf of a division, but sent to the office of the director of general services within 10 working days after such aggrieved person knows, or should have known, of the action. (2) The protest must be sworn and contain: (A) the statutory or regulatory provision of the Act or the rules that the action is alleged to have violated; (B) a specific description of the violation; (C) a precise statement of the relevant facts; (D) the issue to be resolved; (E) argument and authorities in support of the protest; and (F) a statement that copies of the protest have been mailed or delivered to other identifiable interested parties. (d) Suspension of award. If a protest or appeal of a protest has been filed, then the department will not proceed with the solicitation or the award of the purchase until the executive director or his or her designee, not below the level of division director, consults with the director of general services and the appropriate district engineer or the director of purchasing, and makes a written determination that the award of the purchase should be made without delay to protect substantial interests of the department. (e) Informal resolution. The district engineer or the director of purchasing may informally resolve the dispute, including: (1) soliciting written responses to the protest from other interested parties; and (2) resolving the dispute by mutual agreement. (f) Written determination. If the protest is not resolved by agreement, the district engineer or the director of purchasing will issue a written determination to the protesting party and interested parties which sets forth the reason of the determination. The district engineer or the director of purchasing may determine that: (1) no violation has occurred; or (2) a violation has occurred and it is necessary to take remedial action which includes, but is not limited to: (A) declaring the purchase void; (B) reversing the award; and (C) re-advertising the purchase using revised specifications. (g) Appeal. (1) An interested party may appeal the determination to the executive director. The party must submit an appeal in writing to the executive director's office no later than 10 working days after the date of the determination. The appeal is limited to a review of the determination. (2) The appealing party must mail or deliver copies of the appeal to the determining district engineer or the director of purchasing and other interested parties with an affidavit that such copies have been provided. (3) The general counsel shall review the protest, the determination, the appeal, and prepare a written opinion with recommendation to the executive director. (4) The executive director may: (A) issue a final written determination; or (B) refer the matter to the commission for its consideration at a regularly scheduled open meeting. (5) The commission may consider oral presentations and written documents presented by the department and interested parties. The chairman shall set the order and the amount of time allowed for presentation. The commission's determination of the appeal shall be adopted by minute order and reflected in the minutes of the meeting. (6) The decision of the commission or executive director shall be final. (h) Filing deadline. Unless the commission determines that the appealing party has demonstrated good cause for delay or that a protest or appeal raises issues significant to procurement practices or procedures, a protest or appeal that is not filed timely will not be considered. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808797 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: January 2, 1998 For further information, please call: (512) 463-8630 SUBCHAPTER C.Contracting for Architectural, Engineering, and Surveying Services 43 TAC sec.sec.9.30-9.33, 9.37-9.39, 9.41-9.43 The Texas Department of Transportation adopts amendments to sec.sec.9.30-9.33, 9.37-9.39, and 9.41-9.43, concerning contracting for architectural, engineering, and surveying services. Sections 9.30-9.33, 9.37-9.38, 9.41, and 9.43 are adopted with changes to the proposed text as published in the February 27, 1998, issue of the Texas Register (23 TexReg 1931). Section 9.39 and sec.9.42 are adopted without changes and will not be republished. EXPLANATION OF ADOPTED AMENDMENTS The amendments to sec.sec.9.30-9.33, 9.37-9.39, and 9.41-9.43, are necessary to comply with Senate Bill 626, 75th Legislature, 1997, which amended Government Code, Chapter 2254, Subchapter A, the Professional Services Procurement Act. The subchapter specified a two-step hiring procedure for hiring architects and engineers. The first step is to find the most highly qualified provider, and the second step is to negotiate a fair and reasonable price. Although land surveying services were previously included in the subchapter, land surveyors were not required to be hired using the two-step procedure. Senate Bill 626 added land surveying services to this required procedure. The amendments are also necessary to comply with Senate Bill 370, sec.1.23, 75th Legislature, 1997, which amended Transportation Code, sec.223.041 to require the department to use private sector engineering-related services in accomplishing its activities in providing transportation projects. Section 9.30 includes land surveying service providers in the purpose of the subchapter. Section 9.31 clarifies existing terms and deletes terms that are no longer necessary. Section 9.32 provides that surveying and mapping services will be included in the types of work for which the department may contract, and the policy of the department to use private sector engineering services to assist in transportation projects. Section 9.33 eliminates the use of the Texas Register for publication of notices and provides that the department will advertise the project in the local newspaper. The section clarifies that in the letter of interest the proposed team must demonstrate that the provider has a professional engineer, architect, or surveyor registered in Texas that will sign and/or seal the work to be performed on the contract, and the letter of interest should include similar project-related experience. Section 9.37 clarifies the negotiation period and extensions of that period, and that federally-funded contracts are not based on a percentage of construction cost. The section provides that a contract may be canceled if negotiations are unsuccessful and that a written complaint relating to the selection process may be sent to the deputy executive director. Section 9.38 clarifies that the provider will correct errors and omissions in the work, and a subprovider will be evaluated in the quality of performance category, and not in the categories of management, cost administration, and timeliness. The section provides that an interim audit may be performed at any time and the final audit does not need to be performed as a site audit. Section 9.39 provides that the provider will be selected on a random basis with no provider receiving more than one contract more than any other provider. Section 9.41 provides the precertification requirements for registered professional land surveyors in accordance with Senate Bill 626 and extends the department's time to process precertification information from 30 to 60 days. The section deletes the standard evaluation form from the documents to be included in the precertification questionnaire packet, all references to deadline dates that have already passed, and the provision that the department will publish a notice requesting submittal for precertification in the Texas Register. The section provides that the department will publish instructions concerning submittal of information for precertification annually in the Texas Register and daily on an electronic bulletin board, and a written complaint relating to the selection procedure may be sent to the deputy executive director. Section 9.42 clarifies the audit process, allows more flexibility in obtaining an overhead rate audit, and establishes a deadline for the audit report. The section clarifies that compensation for provider services may be based on a lump sum contract, and administrative qualification is not necessary for the providers that are compensated based on units of service rates or percent of construction. The section provides that an independent audit organization may perform the overhead rate audit, and requires that the end of the fiscal period of the audit report must be within 18 months of the provider selection. Section 9.43 clarifies: existing qualification categories and adds a category for registered professional surveyors; that precertification only applies to a contract which requires a professional engineer, registered architect, or registered professional land surveyor; that for precertification, the department will accept experience gained in other states for which that experience is recognized by the appropriate Texas Board, but that for contract execution, the provider must be licensed in Texas; and category 2.1.1 to provide that projects must be accurately completed. This section: increases the department's access to a broader range of firms with qualified personnel in categories 2.5.1 and 2.11.1; specifies certification levels for work categories 12.1.1 and 12.2.1; establishes actual number of years of experience required for work categories 14.1.1, 14.2.1, 14.3.1, and 14.4.1; and establishes work category 15.5.1 - state land surveying, to include precertification requirements for registered professional land surveyors as mandated by Senate Bill 626. RESPONSE TO COMMENTS Written comments were received and are responded to as follows. Comments were received from Representative Fred M. Bosse, the Consulting Engineers Council of Texas (CEC), and the Texas Society of Professional Engineers (TSPE). The commenters did not indicate whether they were in favor of or against the proposed rules. Comment: Concerning the overall rules, TSPE suggested that a professional engineer be referred to as a licensed "professional engineer" throughout the rules. Response: Since the definition of "professional engineer" states that the engineer must be licensed, there is no need to reiterate the licensure throughout the rules. Comment: Concerning sec.9.31, definitions, TSPE commented that the words "easily and" should be deleted from the definition of "constructabity" because it is difficult to define easily constructed and that a good set of plans and specifications should be evaluated on the ordinary standard of care. Response: The department agrees with the suggestion and is deleting the words "easily and." Additionally, the definitions in this section have been numbered to conform to the new Texas Register form. Comment: Concerning sec.9.32, Representative Bosse, TSPE, and CEC all commented that the wording requiring the department to achieve a balance between the use of department employees and the use of private contractors providing the costs are equivalent, should be deleted in order to conform to Senate Bill 370, sec.1.23. Representative Bosse indicated the "balance" wording was removed from the legislation because of contention over the meaning of "balance." The CEC pointed out that when the "balance" language was removed, the legislature substituted more specific and empirical targets. TSPE stated that since determining equivalent costs is difficult and does not address value of the services provided, the reference to equivalent costs should be removed. Response: The department agrees and has revised sec.9.32 so that it removes the "balance" and equivalent cost language to more accurately track the language of the legislation. The sentence regarding the percentage of expenditure for private sector services has been deleted because it is no longer necessary to help explain what is meant by "balance." Comment: Concerning sec.9.33(a)(1), TSPE suggested that instead of posting the contract notice on an electronic bulletin board that the notice be posted on the department web site and the electronic Texas Register. Response: Government Code, sec.2155.074 requires the department to post the notices on the statewide electronic bulletin board. To post it on the department's web site would be duplicative. Since the Texas Register is published only once a week now, the department has determined that the publication will no longer serve as an expedient source for this type of information. The electronic version of the Texas Register is the same as the paper edition. Notice cannot be posted in the electronic form without being published in paper form. Comment: Concerning sec.9.33(a)(3), TSPE suggested that the quarterly statewide list of projects be published on the department's web site. Response: The department has changed sec.9.33(a)(3) to clarify that the quarterly list is available upon request. In addition, the department has added that the department may make the information available on the web site because the department anticipates that the information will be placed there in the future. Comment: Concerning sec.9.38(a)(2), the CEC comments that the current wording could be interpreted to mean that Disadvantaged Business Enterprise/Historically Underutilized Business (DBE/HUB) prime provider or subprovider could be prohibited from subcontracting any part of the work. The commenter suggests that the wording be changed to state that the work must be accomplished by the employees of the DBE/HUB provider or subprovider in order to be eligible for credit toward achieving DBE/HUB goals. Response: The department agrees that the wording should be changed. Section 9.38(a)(2) has been clarified to allow a DBE/HUB provider or subprovider to subcontract in accordance with 9.58(g)(2) in order to make this provision consistent with the DBE/HUB business opportunity programs. This allows a provider to receive credit for DBE/HUB participation even when some of the work is subcontracted. Comment: CEC suggests that the proposed amendments to sec.9.38(e) relating to errors and omission be deleted because the effect makes the section more ambiguous. TSPE suggests that the term "providers' services" be substituted for "work" and that the language be left in which requires the errors and omissions to be part of the services required by the contract. Response: The department agrees with TSPE and these changes have been made which should clarify the paragraph as requested by the CEC. Comment: Concerning sec.9.41(g), TSPE requested that the review process for precertification be limited to 30 days. Response: The department disagrees and will not make a change. The precerification process may only take 30 days; however, some flexibility is necessary so that the provider has time to submit additional information to the department and the department has time to process it if the provider does not submit all the required information the first time. Comment: Concerning sec.9.41(h), TSPE requested that the providers be precertified for 24 months instead of 12 months unless there is a change in personnel or qualifications. Response: The precertification process is not yet a year old, so it is too early to decide whether a 12-month renewal is too frequent. The precertification is not a burden for the provider when the provider has no changes in personnel or qualifications. A provider or subprovider must apply for renewal between 60 and 30 days prior to their annual renewal date. If there is no change, then "no change" needs to be submitted and a renewal date will be issued. TSPE submitted an additional comment which is outside the purview of these proposed amendments. That comment will be answered separately. Section 9.33(a)(2) has been clarified to state that if the newspaper fails to print the notice, the department will consider the notice posted. This was to clarify that the department considers notice given if the newspaper errs, not if the department fails to give the newspaper the notice. The department is requiring newspaper notice as well as electronic notice to ensure a greater number of persons an opportunity to read the notice. Section 9.33(b)(4), regarding letter of interest, has been clarified. In this section subparagraph (B)(iii) requires the letter of interest to contain the key personnel proposed for the contract. Since the names of the key personnel more appropriately fit in the organizational chart required in subparagraph (B)(i), the requirement for key personnel has been moved from clause (iii) to clause (i). Section 9.33(b)(4)(B)(ii) has been clarified to give the additional information that the prime provider's project manager may not be changed during the selection and the award process in order to correspond to sec.9.38(c)(2) which states the prime provider's project manager may not be changed without prior consent of the department. Section 9.37(f)(1) states that state-funded architectural contracts are based on percentage of construction costs. Another sentence has been added to clarify that federal regulation does not allow percentage of construction cost payment in federally funded contracts. In sec.9.37(g) and sec.9.41(i), concerning filing an appeal, the "deputy executive director of transportation planning and development" has been changed to "deputy executive director" to reflect the recent reorganization of the department. Section 9.39(2) has been clarified concerning multiple contracts. The proposed rules did not state the monetary amount or the period of time the multiple contract could cover. The department has added that each multiple contract may be no greater than $500,000 in value or two years in length. This will ensure that the large contracts will be advertised as individual contracts and that those contracts which are advertised as multiple contracts will be of similar size. Section 9.43(b)(10), concerning hydraulic design and analysis, has been changed to clarify the qualifications. The existing paragraph required that a professional engineer have four years experience with a minimum of two years experience as a professional engineer. However, two years of that experience will have been obtained before the engineer becomes registered as a professional engineer. Since the department's emphasis is on the professional engineering experience, the department will only require that the professional engineer have two-years of professional engineering experience. Mentioning other experience is not necessary. Therefore, the four year general engineering requirement is unnecessary and has been removed. Section 9.43(b)(13), concerning category Group 13, construction inspector services, has been deleted. This category includes the roadway and bridge construction inspection. These services do not require an architect, engineer, or land surveyor and therefore, do not need to fall within these rules. The subsequent paragraphs have been renumbered accordingly. All references to, definition of, and categories for registered landscape architects have been removed in sec.sec.9.30-9.31, 9.33, 9.41 and 9.43 because landscape architects are not covered under Government Code, Chapter 2254, Subchapter A. Section 9.43(b)(18) has been renumbered accordingly. STATUTORY AUTHORITY The amendments are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation; and Government Code, Chapter 2254, Subchapter A, the Professional Services Procurement Act, which sets forth requirements for selection and contracting of architectural and engineering services. sec.9.30. Purpose. This subchapter establishes standard procedures for selection and contract management of architectural, professional engineering, and land surveying service providers in accordance with Government Code, Chapter 2254, Subchapter A, the Professional Services Procurement Act and Transportation Code, sec.223.041. This subchapter only applies to a contract which requires a professional engineer, registered architect, or registered professional land surveyor. Subproviders may be precertified for contracts which require architectural, engineering, or surveying services. sec.9.31. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) AASHTO - American Association of State Highway and Transportation Officials. (2) Administrative qualification - A department process conducted to determine if a prime provider or subprovider meets the requirements of 23 Code of Federal Registration (CFR) 172.5(c) concerning the administration of engineering and design related service contracts. (3) Available personnel - The total number of personnel employed by the provider proposed to be used on the advertised contract. (4) Business opportunity programs office (BOP) - The chief administrating office for DBEs and HUBs which certifies that a DBE meets the criteria to be a DBE. (5) CCIS - Consultant Certification Information System. (6) Close out - The actions required to close out or complete the contract, including receipt and acceptance of deliverables, resolution of audit findings, receipt of outside approvals if applicable, resolution of other contract-related issues, and issuance of final payment. (7) Constructability - The ability of a project to be accurately constructed from information presented in plans and specifications. (8) Construction engineering - The interpretation of plans and specifications and formulation of engineering decisions during the period that the project is under construction. (9) Construction inspection - Inspection of construction methods and materials used by inspectors who report directly to the professional engineer in responsible charge of the project under construction. (10) Construction management - Construction engineering performed by the professional engineer in responsible charge of the construction project to direct the contractor concerning changes, additions, or deletions to the project. (11) Consultants review committee (CRC) - The department committee that oversees the provider review process. (12) Consultant selection team (CST) - The department's managing office team that selects the long list and short list and evaluates proposals and interviews. (13) Disadvantaged business enterprise (DBE) - As defined in 49 CFR sec.23.62, a small business concern, certified by BOP, which is 51% owned by one or more minorities, women, or others that can prove social and economic disadvantages, or in the case of a publicly owned business, at least 51% of the stock is owned by one or more minorities, women, or others that can prove social and economic disadvantages, and whose management and daily business operations are controlled by one or more such individuals. (14) DBE/HUB goal participation - The percentage goal of participation by DBE/HUB providers determined by the percentage of work performed by the DBE/HUB providers. (15) DBE/HUB special provision - A special provision to the provider contract that identifies Good Faith Effort, and the procedure to demonstrate that Good Faith Effort was attempted if the DBE/HUB goal could not be fulfilled. (16) Debarment certification - A certification that the provider and its principals are not debarred from participation and not under consideration for debarment anywhere, and are eligible to perform the contract. (17) Department - The Texas Department of Transportation. (18) FHWA - The Federal Highway Administration. (19) FONSI - Finding of No Significant Impact. (20) Good faith effort - A provider must demonstrate to the department's satisfaction, that sufficient effort on its part was made to obtain DBE/HUB participation. Good Faith Effort is identified in the DBE/HUB Special Provision to the contract. (21) Graduate engineer - An individual who meets the educational requirements for registration as provided in the Texas Engineering Practice Act. (22) Historically underutilized business (HUB) - Any business so certified by the General Services Commission. (23) IESNA - The Illuminating Engineering Society of North America. (24) Indefinite delivery contract - A contract that contains a general scope of services, maximum contract amount, and contract termination date in which contract rates are negotiated prior to contract execution and work is authorized as needed. (25) ITS - Intelligent Transportation System. (26) Long list - The list of qualified providers submitting a letter of interest for a contract. (27) Lower tier debarment certification (form 1734) - A debarment certification form that is completed by subproviders or other lower tier participants. (28) Lower tier participant - A subprovider or other participant in the contract, other than the state, that is not the prime provider. (29) Managing office - The division, special office, or district with the responsibility for awarding and managing the contract. (30) Managing officer - The division director, special office director, or district engineer of the managing office. (31) Overhead guidelines - Instructions prepared by the department's Audit Office to assist the provider in administrative qualification. (32) Prime provider - The provider awarded a department provider contract. (33) Professional engineer - An individual licensed to practice engineering in the State of Texas. (34) Professional services provider (provider) - An individual or entity that provides engineering, architectural, or surveying services. (35) Project specific contract - A contract that contains a specific scope of services, maximum contract amount, and contract termination date and authorizes the provider to perform the entire scope of work. (36) Registered architect - An individual licensed to practice architecture in the State of Texas. (37) Registered professional land surveyor - An individual licensed to perform land surveying in the State of Texas. (38) Request for proposal (RFP) - A request for submittal of a technical proposal from a provider that demonstrates competence and qualifications to perform the requested services, and shows an understanding of the specific contract. (39) Relative importance factor (RIF) - The weight of each evaluation criterion as it relates to a particular contract. (40) Short List - The list of providers selected from the long list by the CST for further consideration on a department contract. (41) Short list meeting - A meeting held with the providers on the short list to answer questions regarding the contract and distribute the RFP prior to submittal of proposals or interviews. (42) Small business concern - A small business as defined in the Small Business Act, codified in 15 United States Code sec.632, and relevant regulations. (43) Subprovider - A provider proposing to perform work through a contractual agreement with the prime provider. (44) Team - The provider and all proposed subproviders who will be working on a particular contract. (45) Technical precertification - A review process conducted by the department to determine if a prime provider or subprovider meets the technical requirements to perform work identified in a work category. sec.9.32. Provider Services Policy. Pursuant to Transportation Code, sec.223.041, it is the policy of the department to use private sector professional services to assist in accomplishing its activities in providing transportation projects. In order to do so, the department may contract the following types of work: (1) preliminary engineering, design, plan work, specifications, and estimates; (2) construction engineering and inspection; (3) bridge inspection and scour analysis services; (4) environmental engineering, project observation, and inspection; (5) architectural design, plan work, specifications, and estimates; (6) architectural observation and inspection; (7) surveying and mapping; and (8) other engineering, architectural, or surveying services as defined in Government Code, Chapter 2254, Subchapter A. sec.9.33.Notice and Letter of Interest. (a) Notice. (1) Electronic notice. Not less than 21 days before the letter of interest due date, the department will post on an electronic bulletin board a notice identifying the: (A) proposed contract or RFP number; (B) work category codes; (C) type of selection in accordance with sec.9.39 of this title (relating to Selection Types); (D) general description of the project and work to be done; (E) a due date for providers to send letters of interest to the department; and (F) qualification information if the work type is not listed as a category in sec.9.43 of this title (relating to Qualification Requirements by Work Group). (2) Newspaper notice. Not less than 21 days before the letter of interest due date, the department will publish in a local newspaper within the district in which the work will be performed a notice. If the newspaper fails to print the notice, the department will consider the notice posted. The notice will contain the: (A) proposed contract or RFP number; (B) general description of the project and work to be done; (C) due date for providers to send letters of interest to the department; (D) contact person; and (E) location of the electronic bulletin board that contains more information. (3) Organizations. The department will publish quarterly a statewide list of projected contracts for consulting engineering, architectural, and surveying services and will provide upon request, or make available on the department's Web site, a copy of each list to community, business, and professional organizations for dissemination to their membership. (b) Letter of interest. (1) The provider shall send a letter of interest to the department notifying the department of the provider's interest in the contract not later than the deadline published in the notice. (2) The letter of interest will be limited in length to three pages, unless stated otherwise in the notice. The department will accept a letter of interest by electronic facsimile. (3) To be considered: (A) a prime provider or a subprovider must be precertified by the deadline for receiving the letter of interest in accordance with sec.9.41 of this title (relating to Precertification) unless the work category is not listed in sec.9.43 of this title (relating to Qualification Requirements by Work Group); and (B) the proposed team must demonstrate that they have a professional engineer, architect, or surveyor registered in Texas who will sign and/or seal the work to be performed on the contract. (4) The letter of interest shall include; (A) the contract number; (B) an organizational chart containing: (i) names of the prime provider and any subproviders key personnel proposed for the team and their contract responsibilities by work category; and (ii) the prime provider's project manager (who may not be changed during the selection and the award process); (C) team capabilities; (D) similar project related experience; (E) evidence of compliance with the assigned DBE/HUB goal through the prime provider or subproviders identified on the team, or a written commitment to make a good faith effort to meet the assigned goal; (F) project related experience performed since precertification; and (G) other pertinent information addressed in the notice. sec.9.37. Selection. (a) Evaluation criteria. The CRC will establish weighting factors for each evaluation criterion. In its evaluation of the provider, the CST will consider: (1) the CST proposal score, which comprises 30 percent of the total score; and (2) the CST interview score, which comprises 70 percent of the total score. (b) Tie scores. In the event of a tie, the managing officer will break the tie using the following method. (1) The first tie breaker will be the CST interview score. (2) The second tie breaker, if needed, will be the interview score for the experience of the project manager and the project team. (3) The third tie breaker, if needed, will be the interview score for ability to meet the proposed project schedule. (c) Summary. The CST will prepare a contract evaluation summary containing the scores of the prime providers on the short list, for consideration by the managing officer. (d) Submittal of selection. The managing officer will submit the contract evaluation summary, evaluation documentation, certification that the procedures provided by this subchapter were used and recommendation for selection to the CRC for review. After review, the CRC will advise the deputy executive director, or designee, if approved procedures were followed in the selection. If the procedural review is acceptable, the deputy executive director will concur with the selection. (e) Notification. The department will: (1) prepare a letter to notify the provider selected for contract negotiation; (2) prepare a letter to each of the remaining short list of providers not selected, naming the one or ones selected; (3) set up a meeting with the selected provider to begin contract negotiations; and (4) publish the short list and providers selected for contracts on an electronic bulletin board. (f) Negotiations. (1) Selected provider. The department will enter into negotiations with the selected provider. The provider shall submit the information required for the contract, including a work outline, work schedule, and cost proposal. If the information is not submitted to the department prior to selection, the provider shall meet requirements for administrative qualification in accordance with sec.9.42 of this title (relating to Administrative Qualification) to determine the fairness and reasonableness of the contract price. State funded architectural contracts are based on percentage of construction cost as provided in the General Appropriations Act. Pursuant to 23 C.F.R. sec.172.9, federally funded contracts are not based on percentage of construction cost. (2) Contract execution. The provider shall sign the contract within 35 working days from the date of notification to the provider. The CRC may grant a 30- working day extension. The deputy executive director may authorize an additional extension, for a period not to exceed 30 days. An extension must be authorized before the expiration of the negotiation period or previous extension. (3) Selection of alternative providers. If the department is unable to execute a satisfactory contract containing a fair and reasonable price within the allotted time period with the selected provider, negotiations shall formally end with that provider and negotiations shall, upon written approval of the managing officer, begin with the provider ranked next. Negotiations shall be undertaken in this sequence until a contract is awarded or canceled. (4) DBE/HUB goal documentation. The selected provider shall provide written documentation that the provider has met the specified DBE/HUB goal or made a good faith effort to meet the goal in accordance with sec.9.38(a) of this title (relating to Contract Management), sec.9.40 of this title (relating to DBE/HUB Goals), and sec.9.55 of this title (relating to Good Faith Effort). If the provider does not submit such documentation, the department will cease negotiation with the provider and enter into negotiation with the next provider in the order of preference for this contract. Evidence of good faith effort shall be submitted to the managing officer, through the department's project manager, for review and acceptance. (g) Appeal. A provider may file a written complaint concerning the selection process with the deputy executive director or his or her designee. sec.9.38. Contract Management. (a) DBE/HUB participation. (1) DBE/HUB program goals may be satisfied by the prime provider. DBE/HUB participation opportunities are more specifically addressed in sec.sec.9.50-9.61 of this title (relating to Business Opportunity Programs). (2) If the prime provider or the subprovider is a DBE/HUB, the DBE/HUB provider and subprovider may subcontract in accordance with sec.9.58(g)(2) of this title (relating to Contract Compliance). (b) Subcontracts. (1) A prime provider shall perform at least 30% of the contracted work with its own work force. No subprovider may perform a higher percentage of the work than the prime provider. (2) The department will review subcontracts for compliance with the requirements of this subsection. Subcontracts shall incorporate by reference all of the provisions of the prime contract. (3) Subcontracts shall: (A) refer to the prime contract and have the same purpose; (B) include nondiscrimination attachment; (C) include DBE/HUB special provision; (D) include lower tier debarment certification (negotiated contracts); and (E) provide clear payment terms. (4) Subcontracts shall not include: (A) multipliers, such as supplies plus 10%; and (B) the state as a party to the subcontract. (c) Operations. (1) Management responsibility. The managing officer requesting the provider contract will manage the contract. (2) Project manager. The prime provider's project manager may not be changed without prior consent of the department. (3) Commencement of work. The provider shall not proceed with any contract work until advised in writing by the department to proceed. (4) Suspension of work. The department may suspend the work by: (A) verbally notifying the provider; and (B) providing written notification of the suspension, including: (i) identifying the reason for suspension; and (ii) identifying approximate length of suspension and payment based on actual work completed as of the date of suspension. (5) Payment on provider contracts. Payment for eligible costs will be made within 30 days after receiving a correct invoice. Payment may be withheld pending verification of satisfactory work performed. To receive payment for services, the provider shall submit to the department project manager: (A) a monthly progress report; (B) an itemized and certified invoice (department form 132 or other acceptable format); and (C) a DBE/HUB report (The BOP may require proof of DBE/HUB use, including submittal of canceled checks that are properly identified by department project number or contract number). (6) Interim audit. The department may perform interim audits. (d) Supplemental agreements. (1) The original executed contract will require a supplemental agreement if: (A) additional funding is required in accordance with terms of the contract; (B) additional time is needed to complete work in progress; or (C) changes in scope of services are necessary. (2) The supplemental agreement will be executed: (A) prior to the expiration date of the original contract; (B) prior to exceeding the contract amount; and (C) prior to performance of unauthorized work. (e) Errors and omissions. (1) Policy. It is the department's policy to require providers to correct errors or omissions in the providers' services which are required under the contract without undue delay and without additional cost to the department. (2) Procedure. (A) Notification. The department will notify the provider of the errors and omissions. (B) Resolution. A dispute involving errors and omissions shall be resolved in accordance with sec.9.2 of this title (relating to Contract Claim Procedure). (f) Contract close out. (1) Final audit. The department audit office will perform an audit of the provider's records in accordance with the terms of the contract. (2) Time. A contract is ready for close out when: (A) services have been provided; (B) products have been received and accepted; (C) approval has been received from the U.S. Department of Transportation, when federally funded; (D) payments have been made; (E) audit findings have been resolved; and (F) the contract expires unless extended by supplemental agreement. (g) Provider performance evaluations. (1) If the contract duration is greater than 18 months, the department project manager will evaluate the prime provider's or subprovider's performance upon completion of a phase, upon exemplary performance, on an interim basis, and on completion of the contract. The interim basis evaluation will occur at least once every 12 months, or when the managing office determines that the work is behind schedule or not being performed according to the contract. An evaluation of constructability will be performed on an interim basis at least every 12 months and upon completion of the construction contract, if applicable. (2) The department will evaluate a prime provider, using a numerical score, in the categories of management, cost administration, quality, and timeliness. The prime provider will also receive an overall contract evaluation in each of the evaluation categories. (3) The department will evaluate a subprovider's quality of performance using a numerical score. (4) These performance evaluations will be entered into the CCIS database identified in sec.9.41 of this title (relating to Precertification), and will be used in determining the qualifications of the prime provider or subprovider in accordance with sec.9.34 of this title (relating to Determination of the Short List). (5) The evaluations will be given to the prime provider or subprovider for review and comment. Prime provider or subprovider comments, if submitted to the department, will be noted in the database. sec.9.41.Precertification. (a) Eligibility. To be eligible to perform work in the categories described in sec.9.43 of this title (relating to Qualification Requirements by Work Group), a prime provider and a subprovider must be precertified in accordance with this section. (b) Application. (1) Registered architects, professional engineers, and registered professional surveyors or their related subproviders who desire to be precertified by the department to perform work on architectural, engineering, or surveying contracts shall submit a completed precertification questionnaire to the CRC for review and determination of precertification status. (2) A questionnaire, in a form prescribed by the department, or a precertification information packet may be obtained by contacting the Texas Department of Transportation, Design Division - Consultant Review Committee, 125 East 11th Street, Austin, Texas 78701-2483. (3) The questionnaire will include information concerning the experience of the prime provider or subprovider. (4) The precertification information packet will include: (A) a copy of the questionnaire; (B) instructions regarding the format and length restrictions for data to be submitted; (C) the requirements for precertification in each category as described in sec.9.43 of this title (relating to Qualification Requirements by Work Group); (D) copies of the department's standard contracts, with attachments; (E) instructions for administrative qualification; and (F) department overhead guidelines. (5) The submittal date for review deadlines as described in subsection (g) of this section shall be the date the precertification questionnaire is received by the CRC. (6) The precertification of a prime provider or subprovider by the department does not guarantee that work will be awarded to that prime provider or subprovider. (c) Instructions. The department will publish instructions concerning submittal of information for precertification annually in the Texas Register and daily on an electronic bulletin board. (d) Precertification deadline. Prime providers and subproviders must be precertified in the technical categories by the deadline for receipt of the letter of interest to be eligible for selection. The department will not delay the consultant selection process or contract execution for a prime provider or subprovider that has not been precertified. (e) CCIS. The department will maintain the CCIS containing qualification information submitted in the precertification questionnaire by the prime provider or subprovider. (f) Technical precertification. Prime providers and subproviders may be precertified in multiple technical categories. A prime provider or subprovider with one employee who meets the appropriate requirements of multiple categories may be precertified in those categories. Prime providers must be precertified in the categories of work they will be performing, and are not required to be precertified in every category of work involved in the contract. The department will not precertify joint ventures. For a specific contract, prime providers may propose to use subproviders precertified in the other identified categories to supplement their own qualifications by indicating this in the letter of interest. (g) Precertification review. (1) Prime providers and subproviders will be precertified within 60 days of receipt of the submittal or notified in writing within the same time period that they did not meet the requirements for precertification or that additional submittals will be required for review. (2) If requested to submit additional information for review, the prime provider or subprovider shall submit such information within 30 days of receipt of the department's request for such information. If the information is not provided within 30 days after receipt of the request, the application for precertification will be processed with the information available. The department will make a determination on precertification status within 60 days of receipt of the additional information. (3) The department will consider the following factors in reviewing the precertification questionnaires as specified in sec.9.43 of this title (relating to Qualification Requirements by Work Group): (A) current license or registration; (B) personal experience and training; and (C) other requirements of sec.9.43 of this title (relating to Qualification Requirements by Work Group). (h) Annual renewal. Prime providers and subproviders will be assigned an annual renewal date by the department. Prime providers and subproviders must apply for renewal of precertification between 60 and 30 days prior to their annual renewal date. The precertification of a prime provider or subprovider that fails to submit an application for renewal at least 30 days prior to its annual renewal date will expire and the prime provider or subprovider will be ineligible to submit a letter of interest for new contracts until it is precertified. (i) Appeal. A prime provider or subprovider may appeal denial of precertification by submitting additional information within 30 days of receipt of written notification of denial to the CRC in Austin. This information shall justify why the prime provider or subprovider meets the requirements for precertification. The CRC will review the information and make a determination regarding precertification. A provider may file a written complaint regarding selection for precertification with the deputy executive director or his or her designee. sec.9.43. Qualification Requirements byy Work Group. (a) Requirements. (1) Eligible employees. Prime providers and subproviders may be precertified in the technical groups and categories in accordance with subsection (b) of this section by providing the listed requirements. A firm may only use an individual who is employed by that firm at the time of submittal for precertification (2) Experience. For the purpose of experience for precertification, the professional provider may be licensed to practice in any state for which that experience is recognized by the: (A) Texas Board of Professional Engineers for engineers; (B) Texas Board of Architectural Examiners for architects; or (C) Texas Board of Professional Land Surveying for land surveyors. (3) Contract execution. For the purposes of executing a contract and doing work in the state, the professional provider must be licensed by the: (A) Texas Board of Professional Engineers for engineers; (B) Texas Board of Architectural Examiners for architects; or (C) Texas Board of Professional Land Surveying for land surveyors. (b) Work Categories. (1) Group 1 - transportation systems planning. (A) Category 1.1.1 - policy planning. This category includes the investigation and development of transportation planning and strategies to meet current or future needs at the state or local level. The firm must employ a minimum of: (i) one professional engineer with training and experience in areas directly related to policy planning; or (ii) one professional engineer with proficiency in civil engineering and one planner with training and experience in areas directly related to policy planning. (B) Category 1.2.1 - systems planning. This category includes development of state or local transportation plans to create complete integrated systems to support movement of people and goods. The firm must employ a minimum of: (i) one professional engineer with training and experience in areas directly related to systems planning; or (ii) one professional engineer with proficiency in civil engineering and one planner with training and experience in areas directly related to systems planning. (C) Category 1.3.1 - subarea/corridor planning. This category includes the study of the feasibility of all modes of transportation corridors at the state or local level to determine the cost effectiveness of the various alternatives to meet specific goals and may include actual route location as a final product. The firm must employ a minimum of: (i) one professional engineer with training and experience in areas directly related to subarea/corridor planning; or (ii) one professional engineer with proficiency in civil engineering and one planner with training and experience in areas directly related to subarea/corridor planning. (D) Category 1.4.1 - land planning/engineering. This category includes planning and engineering in support of assessing the impacts that proposed transportation improvements may have on public and private property. The firm must employ a minimum of: (i) one professional engineer with training and experience in comprehensive planning or areas directly related to assessing impacts to private property; or (ii) one professional engineer with proficiency in civil engineering and one planner with training and experience in comprehensive planning or areas directly related to assessing impacts to private property. (E) Category 1.5.1 - feasibility studies. This category includes investigation of programs or specific projects to determine if they are cost effective and meet the desired goals. The firm must employ a minimum of one professional engineer with: (i) proficiency in civil engineering; and (ii) completion of a minimum of two feasibility studies. (F) Category 1.6.1 - major investment studies. This category includes the investigation of modal and financing alternatives for major transportation projects at the state or local level. The firm must employ a minimum of: (i) one professional engineer with proficiency in civil engineering and experience or education in urban planning and economic, or environmental impact assessment; and (ii) one person with a bachelor's degree in a physical or a natural science with related experience. (2) Group 2 - environmental studies. (A) Category 2.1.1 - traffic noise analysis. This category includes the performance of a traffic noise analysis for a roadway project. The firm must employ one person with: (i) a bachelor's degree or equivalent experience in environmental studies, urban planning, civil or environmental engineering, or a related field; and (ii) demonstration of experience in use/application of Traffic Noise Guidelines, traffic noise modeling software, and appropriate sound measuring equipment through the accurate completion of a traffic noise analysis for a minimum of two highway projects at the FONSI level or above. (B) Category 2.2.1 - air quality analysis. This category includes the performance of an air quality analysis for a roadway project. The firm must employ one person with: (i) a bachelor's degree or equivalent experience in environmental studies, urban planning, civil or environmental engineering, or a related field; and (ii) demonstration of experience in use/application of air quality guidelines and air quality modeling software through the accurate completion of an air quality analysis for a minimum of two highway projects at the FONSI level or above. (C) Category 2.3.1 - wetland delineation. This category includes the performance of a wetland delineation according to the U.S. Army Corps of Engineers requirements. The firm must employ one person with: (i) a minimum of one year of field experience in wetland delineation; and (ii) completion of a Wetland Training Institute or an equivalent one week wetland delineation class. (D) Category 2.4 - U.S. Army Corps of Engineers permits. This category includes the following permits: (i) Category 2.4.1 - nationwide permit. The firm must employ one person with working knowledge of the nationwide permit process and a minimum of one year of experience in nationwide permit determination. (ii) Category 2.4.2 - sec.404 (Title 33, United States Code, sec.1344) individual permits (including mitigation and monitoring). The firm must employ one person with working knowledge of the individual sec.404 Permit process, with one year of experience, and who has applied for and received one individual permit. (iii) Category 2.4.3 - U.S. Coast Guard and U.S. Army Corps of Engineers sec.10 (Title 33, United States Code, sec.403) permits. The firm must employ one person with one year of experience and working knowledge of the Rivers and Harbors Act, sec.10 who has applied for and received one navigation-related permit. (E) Category 2.5.1 - water pollution abatement plan. This category includes geologic field assessment and the preparation of pollution abatement plans as it relates to the Edwards Aquifer Rules. The firm must employ one person with: (i) a background in geology, environmental studies, civil or environmental engineering or a related field; and (ii) working knowledge of the Edwards Aquifer rules. (F) Category 2.6 - protected species coordination. This category includes the following types of biological coordination. (i) Category 2.6.1 - protected species determination. This category involves the determination of the presence or absence of a protected species. The firm must employ one person with knowledge of the Federal Endangered Species Act, who possesses the required state and federal permits, experience in determining the presence or absence of a protected species, and informal consultation experience and coordination with the U.S. Fish and Wildlife Service. (ii) Category 2.6.2 - biological assessments. This category includes the preparation of biological assessments. The firm must employ one person with a bachelor's degree in the natural sciences or a related field, working knowledge of the Federal Endangered Species Act, experience including preparation of biological assessments and formal consultation, experience in negotiating with people and resource agencies, and working knowledge of federal, state, and local regulations. (iii) Category 2.6.3 - biological surveys. The firm must employ one person with a bachelor's degree in the natural sciences or a related field and working knowledge of federal, state, and local regulations, and/or one person with knowledge in habitat recognition, including direct field experience with or as a recognized expert for the species/habitat of concern, and working knowledge of federal, state, and local regulations. (G) Category 2.7.1 - sec.4(f) (Title 23, United States Code of Federal Regulations, sec.771.135) and/or sec.6(f) (Title 49, United States Code, sec.303) evaluations. This category includes sec.4(f) evaluations, identified in the Department of Transportation Act of 1966, which are conducted when right of way is acquired from publicly owned parks, recreation areas, wildlife or waterfowl refuges, or historic sites, and sec.6(f) which applies when federal land and water conservation funds are used for improvements to the site. The firm must employ one person: (i) with a minimum of one year of experience in applying sec.4(f) and/or sec.6(f) requirements; (ii) who has completed a minimum of one successful evaluation; and (iii) who has received FHWA or other federal agency approval. (H) Category 2.8.1 - surveys, research and documentation of historic buildings, structures, and objects. This category includes surveys, research, and documentation efforts carried out in accordance with the Secretary of the Interior's Standards and Guidelines for Archeology and Historic Preservation (Volume 48 of the Federal Register, 44716) to comply with sec.106 (Title 16, United States Code, sec.470f) of the national Historic Preservation Act of 1966, as amended, and other state and federal historic preservation related laws and regulations. Associated activities include: delineation of the area of potential effects for projects with the potential to affect historic properties; field surveys and photographic and written documentation on historic properties located within a project's area of potential effects; development of historic contexts that provide an organizational and thematic format for evaluating historic properties; determinations of National Register eligibility for identified historic properties; preparation of historic documentation on affected properties in accordance with the documentation requirements of the Historic American Buildings Survey and the Historic American Engineering Record; evaluation of the effect of projects on significant properties; and the development of management and preservation plans for historic properties. The firm must employ one person with experience working with the Secretary of the Interior's Standards and Guidelines for Archeology and Historic Preservation (Volume 48 of the Federal Register, 44716), 36 CFR Part 800, and documentation requirements of the Historic American Buildings Survey and Historic American Engineering Record and: (i) a master's degree in architectural history, historic preservation or a closely-related field, with course work in American architectural history and a minimum of one year of direct experience performing surveys, research or documentation of historic buildings, structures, and objects; or (ii) a bachelor's degree in architectural history, historic preservation or a closely-related field, with course work in American architectural history and a minimum of two years of direct experience performing surveys, research or documentation of historic buildings, structures, and objects. (I) Category 2.9.1 - historic architecture. This category includes architectural work to ensure compliance with Secretary of the Interior's Standards for Historic Preservation projects (Volume 48 of the Federal Register, 44716). Associated activities include detailed investigations of historic structures, preparation of historic structure research reports, preparation of plans and specifications for historic preservations projects, development of management plans for individual properties, and preparation of measured drawings for affected historic properties. The firm must employ a registered architect: (i) with a minimum of two years of full-time experience managing historic preservation projects; or (ii) with a minimum of one year of full-time experience managing historic preservation projects and completion of at least one year of graduate study in preservation architecture. (J) Category 2.10.1 - archaeological surveys, documentation, excavations, testing reports and data recovery plans. This category includes: reconnaissance or intensive archeological surveys performed in accordance with the criteria listed in the Secretary of the Interior's Standards and Guidelines for Archeology and Historic Preservation (1982), Reports Relating to Archeological Permits in the Rules of Practice and Procedure for the Antiquities Code of Texas, and performance standards as outlined in the Council of Texas Archaeologists (CTA) Guidelines; documentation of operations that use archeological techniques to obtain and record evidence of human activity or behavior important in history or prehistory; testing and preparation of testing reports to describe the results of work following the investigation and evaluation of archeological sites and/or other historic properties; and data recovery plans that address appropriate strategies and methodologies for excavation and data recovery. The firm must employ a principal investigator: (i) with a master's degree in archaeology, anthropology, or closely-related field, who has a minimum of one year of full-time professional experience or equivalent specialized training in archaeological research or administration; (ii) who has a minimum of one year of supervised field and analytic experience in archaeology; (iii) who is a professional archaeologist who meets the standards of a principal or co-principal investigator, as defined by state standards, with a minimum of one year of full-time professional experience at a supervisory level in archaeological resources; (iv) who has successfully completed a minimum of five archaeological projects, of equivalent scope, under state permit; and (v) who has the equipment and personnel necessary to perform the work. (K) Category 2.11.1 - historical and archival research. This category includes historical and archival research on historic properties or historic archeological sites, the development of research designs to guide historical research efforts, and the development of historic contexts to provide an organizational and thematic format for further research and evaluation of historic properties and historic archaeological sites. The firm must employ one person with: (i) a master's degree in history or a closely related field with a minimum of one year of full-time experience in historical research, writing, teaching, or other demonstrable professional historical activity and archival research and documentation; or (ii) a bachelor's degree in history or a closely related field with a minimum of two years of full-time experience in research, writing, teaching, interpretation, or other demonstrable professional activity with an academic institution, historical organization or agency, museum, or other professional institution, and a minimum of one year of experience managing historical and archival research. (L) Category 2.12.1 - socio-economic and environmental justice analyses. This category includes: analyzing U.S. Census data for the affected area; identifying changes in land use, land values, and the local tax base; identifying impacts to the business environment to include relocations, construction period impacts, accessibility issues, and effects to employees and customers; estimating the number and type of residential relocations; identifying the availability of comparable replacement housing in accordance with the Uniform Relocation Assistance and Real Property Acquisitions Policies Act of 1970; identifying impacts to community cohesion and the effects to public facilities and services; and identifying and addressing disproportionately high and adverse health and environmental impacts to minority populations and low-income populations in accordance with Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-income Populations (February 11, 1994). The firm must employ one person with: (i) a bachelor's degree in sociology, economics, urban planning, engineering, or a related field; (ii) a minimum of one year of full-time experience performing socio-economic analysis for environmental documents; and (iii) knowledge of applicable federal, state, and local regulations. (M) Category 2.13.1 - hazardous materials assessment. This category includes environmental site assessments performed in accordance with protocol established in ASTM 1528 and ASTM 1527, and may also include provision of intrusive sampling of soil and groundwater, typically referred to as a Phase II site assessment. The firm must employ one person with: (i) a minimum of one year of experience in hazardous materials assessment; and (ii) the necessary equipment and expertise to perform ASTM 1528 Transaction Screen and ASTM 1527 Phase I Site Assessments. (N) Category 2.14.1 - environmental document preparation. This category includes the preparation of environmental documents for transportation projects as identified in sec.2.43(c), (d) and (e) of this title (relating to Highway Construction Projects - State Funds). The firm must employ one person: (i) with a bachelor's degree or equivalent experience in environmental studies, urban planning, civil or environmental engineering, or a related field; (ii) in responsible charge of the preparation of environmental documents for a minimum of two transportation projects through the issuance of the FONSI; (iii) with participation in the preparation of and management of environmental documents for a minimum of one environmental impact statement through the Record of Decision; and (iv) with knowledge of pertinent federal, state, and local environmental regulations. (3) Group 3 - schematic development. The firm must employ sufficient production staff to perform the work described in the following categories. (A) Category 3.1.1 - route studies & schematic design - minor roadways. This category includes the preliminary alignment and layout of minor roadways as described in Category 4.1.1. The firm must employ a minimum of one professional engineer with three years experience in: (i) design of minor roadways; and (ii) capacity and level of service analysis. (B) Category 3.2.1 - route studies & schematic design - major roadways. This category includes the preliminary alignment and layout of major roadways as described in Category 4.2.1. The firm must employ a minimum of one professional engineer with three years experience in: (i) design of major roadways; and (ii) capacity and level of service analysis. (C) Category 3.3.1 - route studies & schematic design - complex highways. This category includes the preliminary alignment and layout of complex highways as described in Category 4.3.1. The firm must employ a minimum of one professional engineer with: (i) five years experience in the area of complex highway design; and (ii) one year of experience in capacity and level of service analysis. (D) Category 3.4.1 - minor bridge layouts. This category includes the preliminary alignment and layout of minor bridges as described in Category 5.1.1. The firm must employ a minimum of one professional engineer with three years experience in: (i) design of minor roadways; and (ii) capacity and level of service analysis. (E) Category 3.5.1 - major bridge layouts. This category includes the preliminary alignment and layout of major bridges as described in Category 5.2.1. The firm must employ a minimum of one professional engineer with: (i) three years experience in design of major roadways; and (ii) one year of experience in capacity and level of service analysis. (F) Category 3.6.1 - multi-level interchange and exotic bridge layout. This category includes the preliminary alignment and layout of multi-level interchanges as described in Category 5.3.1 and 5.4.1. The firm must employ a minimum of one professional engineer with: (i) five years experience in complex highway design; and (ii) one year of experience in capacity and level of service analysis. (4) Group 4 - roadway design. The firm must employ sufficient production staff to perform the work described in the following categories. (A) Category 4.1.1 - minor roadway design. This category includes the design of small urban and rural roadways involving repair, resurfacing, and rehabilitation that do not include major reconstruction, and urban and rural roadways that involve substantial capacity improvements through a previously undeveloped area. Associated activities include utility relocation and miscellaneous minor design services. The firm must employ a minimum of one professional engineer with three years of roadway design experience on two projects. (B) Category 4.2.1 - major roadway design. This category includes design of urban and rural roadways that involve major reconstruction or substantial capacity improvements through a developed area. Associated activities include utility relocation plans, stormwater permits, maintenance of traffic plans, and traffic engineering applications. The firm must employ a minimum of one professional engineer with three years of roadway design experience on two separate projects. (C) Category 4.3.1 - complex highway design. This category includes the design of expressways, limited access facilities, diamond interchanges, freeways, and new roadway and reconstruction work on complex projects including complex geometrics. Associated activities include substantial drainage evaluation and design features, traffic engineering applications, utility relocation plans, and maintenance of traffic plans. The firm must employ a minimum of one professional engineer with four years experience in complex highway design on two separate projects. (D) Category 4.4.1 - major freeway interchanges and direct connectors. The firm must employ a minimum of one professional engineer with five years experience in design of a minimum of two separate projects involving major freeway interchanges and direct connectors. (5) Group 5 - bridge design. The firm must employ sufficient production staff to perform the work described in the following categories. (A) Category 5.1.1 -minor bridge design. This category includes the design of conventional, non-complex bridges, bridge replacements, simple bridge widening, railroad overpasses, non-standard retaining walls, and pedestrian bridges. The firm must employ a minimum of one professional engineer with a minimum of two years structural bridge design experience. (B) Category 5.2.1 - major bridge design. This category includes the design of bridges with complex geometry, complexity of design, spans less than 350 feet, non-conventional substructures, substructures requiring ship impact design, design of dolphins for bridge pier protection, railroad underpasses, complex bridge widening, steel truss spans, and concrete arch bridges. The firm must employ a minimum of one professional engineer with a minimum of five years of structural bridge design experience. (C) Category 5.3.1 - multi-level interchange design. This category includes design of bridges with three levels or more. The firm must employ a minimum of one professional engineer with a minimum of seven years of structural bridge design experience in multi-level interchanges. (D) Category 5.4.1 - exotic bridge design. This category includes the design of bridges with spans greater than 350 feet, suspension bridges, cable-stayed bridges, precast, post-tensioned segmental bridges, bridges requiring unique analytical methods, and movable bridges. The firm must employ a minimum of one professional engineer with a minimum of seven years of structural bridge design experience in exotic bridge design. (6) Group 6 - bridge inspection. The firm must employ sufficient National Highway Institute (NHI) trained bridge inspectors and other technical personnel as required to perform inspection of bridges included in this category. (A) Category 6.1.1 - routine bridge inspection. This category includes the inspection of on-system and off-system bridges, inspection and load rating for culverts, prestressed beam bridges, cast-in-place concrete bridges, steel girder bridges, steel truss bridges, and timber bridges. The firm must employ: (i) a minimum of one professional engineer, to serve as project manager, with six years of bridge inspection or design experience appropriate to this category, and who has completed the comprehensive NHI training course "Safety Inspection of In-service Bridges;" and (ii) a graduate engineer or a professional engineer to serve as the inspection team leader who has a minimum of five years of experience in bridge inspection or design appropriate to this category and has completed the comprehensive NHI training course "Safety Inspection of In-service Bridges" or is currently certified as a Level III or IV Bridge Safety Inspector under the National Society of Professional Engineer's program for National Certification in Engineering Technologies (The project manager may serve as inspection team leader, if only one team is required). (B) Category 6.2.1 - complex bridge inspection. This category includes the inspection of on-system and off-system bridges, inspection and load rating for precast segmental structures, steel arch structures, cable stayed structures, fracture critical inspections, and movable bridges. The firm must employ: (i) a minimum of one professional engineer, to serve as project manager, with seven years of bridge inspection or design experience, including one year of inspection or design of bridges included in this category, and who has completed the comprehensive NHI training course "Safety Inspection of In-service Bridges;" and (ii) a graduate engineer or a professional engineer to serve as the inspection team leader who has a minimum of six years of experience in bridge inspection or design, including one year of inspection or design of bridges included in this category, and who has completed the comprehensive NHI training course "Safety Inspection of In-service Bridges" or current certification as a Level III or IV Bridge Safety Inspector under the National Society of Professional Engineer's program for National Certification in Engineering Technologies (The project manager may serve as inspection team leader, if only one team is required). (7) Group 7 - traffic engineering and operations studies. (A) Category 7.1.1 - traffic engineering studies. This category is defined as the study of the traffic operations of a roadway. Associated activities include preparation of or performance of traffic counts, signal warrants, collision diagrams, travel time and delay, capacity and level of service analysis, intersection analysis, signing, and pavement marking. The firm must employ a minimum of one professional engineer with demonstrated experience performing traffic engineering studies. (B) Category 7.2.1 - highway-rail grade crossing studies. This category includes the study of the operations of highway-rail grade crossings. Associated activities include preparation of or performance of corridor analysis, diagnostic inspections to determine appropriate type and location of active warning devices, advance warning signs and pavement markings, and other geometric or operational improvements. The firm must employ a minimum of one professional engineer with demonstrated experience performing highway-rail grade crossing studies. (C) Category 7.3.1 - traffic signal timing. This category includes analysis, development, and implementation of timing for traffic signals. Associated activities include data collection, intersection analysis, computerized timing programs (development of phase intervals and sequence), and timing implementation. A firm must employ: (i) a minimum of one professional engineer with demonstrated experience in traffic signal timing and the application and interpretation of traffic flow and signal timing models; and (ii) sufficient personnel with experience using traffic engineering software applications, loading timings into field equipment, and loading databases into central computers for retiming. (D) Category 7.4.1 - traffic control systems analysis, design and implementation. This category includes the use of electrical engineering, electronics engineering, computer science and traffic engineering to analyze, design, and implement real-time traffic control systems. The firm must employ: (i) a minimum of one professional engineer with experience in activities associated with traffic control systems; and (ii) sufficient production staff to perform these activities. (E) Category 7.5.1 - Intelligent Transportation System. This category includes conducting ITS planning studies. Associated activities include the study of transportation systems, identification of ITS applications to mitigate transportation problems, development of short term and long term ITS implementation plans, and assessment of the impact of ITS projects on the transportation system. The firm must employ: (i) a minimum of one professional engineer with a background in transportation engineering and experience in activities associated with the development of ITS; and (ii) sufficient production staff to perform these activities. (8) Group 8 - traffic operations design. (A) Category 8.1.1 - signing, pavement marking and channelization. This category includes the design and preparation of plans for signing, pavement marking, and channelization. The firm must employ a minimum of one professional engineer with two years experience in this category. (B) Category 8.2.1 - illumination. This category includes the design and preparation of plans for continuous roadway lighting, safety lighting, underpass lighting, tunnel lighting, and high mast lighting. The firm must employ a minimum of one professional engineer: (i) with two years experience in design and production of illumination plans meeting IESNA and AASHTO guidelines; and (ii) demonstrated experience in electrical engineering and the National Electric Code. (C) Category 8.3.1 - signalization. This category includes the design and preparation of plans for traffic signalization. The firm must employ a minimum of one professional engineer with two years experience in the design and production of traffic signalization. (D) Category 8.4.1 - ITS control systems analysis, design, and implementation. This category of work includes the use of transportation engineering, electronics engineering, and computer science to analyze, design and implement transportation control systems. Associated activities include system performance and cost analysis, system hardware and software design, communication system design, development of management plans, supervision of system installation and operation, system testing and debugging, preparation of system documentation, and the training of operations personnel. The firm must employ: (i) a minimum of one professional engineer, with a background in electrical engineering, system engineering, or software engineering, with two years experience in either the design and production of ITS plans or the operation of ITS; and (ii) sufficient personnel with experience in systems engineering, communications, system integration, or software development for ITS applications and ITS equipment. (E) Category 8.5.1 - highway-rail grade crossings. This category includes the design and preparation of plans for active warning devices, advance warning signs, pavement markings, and other geometric or operational improvements at highway-rail crossings. The firm must employ a minimum of one professional engineer with two years experience in this category. (9) Group 9 - Bicycle and pedestrian facilities. Category 9.1.1 - bicycle and pedestrian facility development includes the design of bicycle and pedestrian facilities. The firm must employ: (A) a minimum of one professional engineer with one year of experience in the design of bicycle and pedestrian facilities, and with knowledge of drainage design; and (B) sufficient production staff to perform these activities. (10) Group 10 - hydraulic design and analysis. (A) Category 10.1.1 - hydrologic studies. This category includes rainfall, runoff determination, reservoir routing, and channel routing. The firm must employ a minimum of one professional engineer with a minimum of two years experience in analysis of complex watersheds. (B) Category 10.2.1 - basic hydraulic design. This category includes storm drain systems, culverts, sedimentation filtration systems, and detention/retention ponds. The firm must employ a minimum of one professional engineer with a minimum of two years experience in hydrologic analysis, hydraulic design, and storm water quality evaluation. (C) Category 10.3.1 - complex hydraulic design. This category includes hydraulic design of bridges over waterways, flood plain analysis, and channel modifications. The firm must employ a minimum of one professional engineer with a minimum of two years experience in river geomorphology, sediment transport and scour analysis, flood plain analysis, river training techniques, and federal and state regulations and permit compliance. (D) Category 10.4.1 - pump stations. This category includes the design of pump stations for conveyance of storm waters. The firm must employ: (i) a minimum of one professional engineer with a minimum of two years experience in hydrologic analysis and storm drain and pump station design; (ii) a minimum of one professional engineer with proficiency in electrical engineering and with a minimum of two years experience in pump system switching and pump configurations; and (iii) sufficient support staff for producing electrical and structural details. (E) Category 10.5.1 - bridge scour evaluations and analysis. This category includes hydrologic analysis, channel and bridge hydraulic analysis and sediment transport modeling for evaluating the potential for scour of bridges. The firm must employ a minimum of one professional engineer with a minimum of two years experience in river geomorphology, sediment transport and scour analysis, and flood plain analysis. (11) Group 11 - construction management. The firm must employ sufficient technical personnel with construction engineering inspection experience to staff projects under this category of work. (A) Category 11.1.1 - roadway construction management and inspection. This category includes the performance of construction management duties for all categories of roadways and highways, and minor bridges as described in Category 5.1.1. The firm must employ a minimum of one professional engineer with a minimum of two years of responsible charge experience as a project engineer on roadway and bridge construction projects. (B) Category 11.2.1 - major bridge construction, management, and inspection. This category includes the performance of construction management duties for major bridges, multi-level interchanges, and exotic bridges as described in Category 5.2.1. The firm must employ one professional engineer with a minimum of two years demonstrated major bridge construction experience. (12) Group 12 - materials inspection and testing. (A) Category 12.1 - material testing. The firm must have available in-house equipment and employ qualified, certified staff necessary to perform the work specified in this category. (i) Category 12.1.1 - asphaltic concrete. This category includes testing of asphaltic concrete material. The firm must employ a minimum of one professional engineer with three years of experience in testing roadway construction materials and a minimum of one person with the proper Hot Mix Asphalt Specialist Certification (Level 1A minimum). (ii) Category 12.1.2 - portland cement concrete. This category includes testing of portland cement concrete. The firm must employ a minimum of one professional engineer with three years of experience in testing roadway and bridge construction materials, and a minimum of one person with the proper concrete certification (ACI certification Grade 1). (B) Category 12.2.1 - plant inspection and testing. This category includes inspection of the following types of facilities and inspection of materials and finished products within these facilities: fabrication plants, mines and quarries, mills, refineries, processors, and producers. The firm must employ: (i) a minimum of one professional engineer with three years of responsible experience in inspection and testing bridge and roadway construction materials; and (ii) sufficient technical personnel with construction engineering experience to properly staff this type of work. (13) Group 14 - geotechnical services. (A) Category 14.1.1 - soil exploration. This category includes acquisition and reporting of subsurface material to be used for the planning, design, construction, and performance of transportation facilities. The field classification of materials and acquisition of soil and rock samples is also included. The firm must: (i) employ a minimum of one professional engineer with at least one year demonstrated experience in the activities normally associated with the category under consideration; and (ii) have available the equipment necessary to perform the work. (B) Category 14.2.1 - geotechnical testing. This category includes sampling and conducting tests on soil and rock according to the department's approved procedures for the purpose of classifying materials and/or identifying their physical properties. The firm must: (i) employ a minimum of one professional engineer with at least one year demonstrated experience in the activities normally associated with the category under consideration; and (ii) have available in-house equipment and employ qualified staff necessary to perform the work. (C) Category 14.3.1 - transportation foundation studies. This category includes producing reports which contain selection of the type and depth of foundation for bridges, retaining walls, signs, and other types of transportation foundations. Working with bearing capacity, predicted settlement, stabilization, and construction on soft ground will be required. The firm must employ a minimum of one professional engineer with at least three years demonstrated experience in the activities normally associated with this category. (D) Category 14.4.1 - building foundation studies. This category includes producing reports which contain selection of the type and depth of foundation for buildings. Working with bearing capacity, predicted settlement, stabilization and construction on soft ground will be required. The firm must employ a minimum of one professional engineer with at least three years demonstrated experience in the activities normally associated with this category. (14) Group 15 - surveying and mapping. (A) Category 15.1 - right of way surveys. This category includes the performance of on the ground surveys and preparation of parcel maps, legal descriptions, and right of way maps. The firm must employ a minimum of one registered professional land surveyor and two technical personnel, all with demonstrated experience in the applicable category of work and the following subcategories: (i) Category 15.1.1 - survey; (ii) Category 15.1.2 - parcel maps; (iii) Category 15.1.3 - legal descriptions; and (iv) Category 15.1.4 - right of way maps; (B) Category 15.2.1 - design survey. This category includes performance of surveys associated with the layout and staking of projects for construction. The firm must: (i) employ a minimum of one registered professional land surveyor with a minimum of one year experience in roadway construction staking; (ii) employ sufficient staff to undertake the requirements normally associated with this type of work; and (iii) have available the proper equipment to perform the work. (C) Category 15.3.1 - aerial mapping. This category involves the collection and reduction of aerial survey data, and preparation of site maps and topographic maps. Associated activities include category 15.4.1. The firm must: (i) employ sufficient lead technical personnel with a minimum of five years of experience each in aerial mapping; (ii) have available the proper equipment meeting national mapping standards and other equipment required to perform the work; and (iii) employ sufficient technical production staff to perform this type of work. (D) Category 15.4.1 - horizontal and vertical control for aerial mapping. This category involves the establishment of the horizontal and vertical control for aerial mapping. The firm must: (i) employ a minimum of one registered professional land surveyor; (ii) have available the proper equipment to perform the work; and (iii) employ sufficient staff to undertake the requirements normally associated with this type of work. (E) Category 15.5.1 - state land surveying. This category includes the performance of land surveying associated with "the location or relocation of original land grant boundaries and corners; the calculation of area and the preparation of field note descriptions of both surveyed and unsurveyed land or any land in which the state or the public free school fund has an interest; the preparation of maps showing such survey results; and the field notes and/or maps of which are to be filed in the General Land Office," as quoted in the Surveyors Act. The firm must employ a minimum of one licensed state land surveyor with demonstrated experience in state land surveying as defined in the category description. (15) Group 16 - architecture. The firm must employ sufficient project management and technical staff to provide services normally associated with this type of work. (A) Category 16.1.1 - architecture - buildings. This category includes architectural services for buildings. The firm must employ a minimum of one registered architect with two years experience in the areas identified. (B) Category 16.1.2 - architecture - other structures. This category includes architectural services for structures other than buildings. The firm must employ a minimum of one registered architect with two years experience in the areas identified. (16) Group 18 - miscellaneous. Category 18.1.1 - value engineering. This category includes the study of transportation related projects or selected processes by multidisciplined teams to determine the most cost effective use of resources to accomplish the given functions. The firm must employ: (A) a minimum of one professional engineer who: (i) is a certified value specialist with experience in the value engineering process and team leadership related to transportation projects as evidenced by having conducted at least five transportation related value engineering studies, including one freeway project exceeding $20 million initial estimated cost; (ii) has taught two transportation related value engineering classes in the last five years; and (iii) has knowledge of and experience with federal, state, and local regulations, public involvement, professional engineering standards, project management, and cost estimating related to transportation projects; and (B) sufficient production staff to perform transportation related value engineering team leadership, produce final value engineering study reports, and teach classes on the principles and practices of value engineering. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808798 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: January 27, 1998 For further information, please call: (512) 463-8630 CHAPTER 17.Vehicle Titles and Registration SUBCHAPTER B.Motor Vehicle Registration 43 TAC sec.17.21 The Texas Department of Transportation adopts amendments to sec.17.21, concerning definitions. Section 17.21 is adopted with changes to the proposed text as published in the February 13, 1998, issue of the Texas Register (23 TexReg 1272) and the March 13, 1998, issue of the Texas Register (23 TexReg 2783). EXPLANATION OF ADOPTION OF AMENDMENTS Proposed amendments to sec.17.21 were originally published with amendments to sec.17.23, concerning temporary registration permits, and amendments to sec.17.28, concerning special category license plates, symbols, and tabs. Final adoption of sec.17.23 and sec.17.28 are also being published in this issue of the Texas Register. Section 17.21 is amended to provide a definition for border commercial zone as this term is used in sec.17.23. Section 17.21 also reflects amendments and new terms used in sec.17.28 which includes clarification that the frame, body, and motor of a vehicle must be at least 25 years old in order for it to be considered an exhibition vehicle. The section revises the definition for Road Tractor to include vehicles designed for the purpose of mowing the right of way of a public highway. It adds definitions for Rental Fleet, Rental Trailer, Token Trailer, Apportioned License Plate, Travel Trailer, and Combination License Plates. RESPONSE TO COMMENTS An oral comment was received from the National Street Rod Association. An individual submitted a written comment. The comments were neither in favor nor against the rules. Comment: Concerning the definition of exhibition vehicle, the National Street Rod Association (NSRA) asked for clarification of the word "complete" as it pertains to the vehicle. Response: The department considers a "complete" vehicle to be an assembled vehicle that has a frame, body, and motor. To clarify this, the department has added "assembled" to the definition of exhibition vehicle. Comment: The individual suggested replacing the language "is at least 25 years old" with "is inclusive of street roads (pre-1948 vehicles)." Response: This will not be changed because requiring the vehicle to be at least 25 years old includes pre-1948 vehicles. STATUTORY AUTHORITY The amended section is adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically Texas Civil Statutes, Article 6675c-2, which authorizes the department to carry out provisions of those laws governing the issuance of motor vehicle registration, and Chapter 502, Subchapter F, which provides the Texas Department of Transportation the authority to establish rules for the issuance of special category license plates, symbols, and tabs. sec.17.21. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Affidavit for alias exempt registration - A form prescribed by the director that must be executed by an exempt law enforcement agency to request the issuance of exempt registration in the name of an alias. (2) Agent - A duly authorized representative possessing legal capacity to act for an individual or legal entity. (3) Alias - The name of a vehicle registrant reflected on the registration, different than the name of the legal owner of the vehicle. (4) Alias exempt registration - Registration issued under an alias to a specific vehicle to be used in covert criminal investigations by a law enforcement agency. (5) Apportioned license plate - A license plate issued in lieu of a truck license plate or combination license plate to a motor carrier in this state who proportionally registers a vehicle owned by the carrier in one or more other states. (6) Axle load - The total load transmitted to the road by all wheels whose centers may be included between two parallel transverse vertical planes 40 inches apart, extending across the full width of the vehicle. (7) Border commercial zone - A commercial zone established under Title 49, C.F.R., Part 372 which is contiguous to the border with Mexico. (8) Bus (motor) - A motor propelled vehicle used in transporting persons upon the public highways of this State for compensation or hire exclusively within the limits of incorporated cities and/or towns or suburban additions to such cities and/or towns. (9) Bus (street or suburban) - A vehicle, except a motor bus or passenger car, used in transporting persons for compensation (or hire) exclusively within the limits of cities and towns or suburban additions to such cities or towns. (10) Carrying capacity - The maximum safe load that a commercial vehicle may carry, in tons, as determined by the manufacturer. (11) Character - A numeric or alpha symbol displayed on a license plate. (12) Combination license plate - A license plate issued for a truck or truck tractor that has a manufacturer's rated carrying capacity of more than one ton and is used or intended to be used in combination with a semitrailer that has a gross weight of more than 6,000 pounds. (13) Commercial vehicle - Any vehicle (other than a motorcycle or passenger car) designed or used primarily for the transportation of property, including any passenger car which has been reconstructed so as to be used, and which is being used, primarily for delivery purposes, with the exception of passenger cars used in the delivery of the United States mail. (14) Conventional vehicle - A regular truck or regular trailer eligible only for regular registration, which are primarily designed to transport divisible loads, regardless of the vehicle's present use (vehicles which have been altered or reconstructed, or upon which machinery has been mounted or attached, permanently or otherwise, retain their conventional status). (15) County or city civil defense agency - An agency authorized by a commissioner's court order or by a city ordinance to provide protective measures and emergency relief activities in the event of hostile attack, sabotage, or natural disaster. (16) Department - The Texas Department of Transportation. (17) Director - The director of the Vehicle Titles and Registration Division, Texas Department of Transportation. (18) Disabled person - A person who has mobility problems that substantially impair the person's ability to ambulate or who is legally blind. (19) Escrow account - A deposit of a specific amount of money held by the department for security. (20) Evidence of financial responsibility - The original document or photocopy of any one of the following items: (A) a liability insurance policy or liability self-insurance or pool coverage document issued in at least the minimum amount required by law; (B) a personal automobile insurance policy used as evidence of financial responsibility, written for at least the term required by the Insurance Code, Article 5.06; (C) a standard proof of liability form issued by a liability insurer; (D) an insurance binder that confirms that the owner is in compliance with the law; (E) a certificate issued by the Texas Department of Public Safety that shows the vehicle is covered by self-insurance; (F) a certificate issued by the state treasurer that shows that the owner has money or securities in an amount not less than $55,000 on deposit with the state treasurer; (G) a certificate issued by the Texas Department of Public Safety that shows that the vehicle has a bond, in the form and amount required by law, on file with that department, such bond shall include at least two individual sureties each owning real estate within this state; (H) a certificate issued by the county judge in the county where the owner resides showing that the owner has cash or a cashier's check in an amount not less than $55,000 on deposit with the county judge. (21) Executive administrator - The director of a federal agency, the director of a Texas state agency, the sheriff of a Texas county, or the chief of police of a Texas city that by law possesses the authority to conduct covert criminal investigations. (22) Exempt agency - A governmental body exempted by statute from paying registration fees when registering motor vehicles. (23) Exempt license plates - Specially designated license plates issued to certain vehicles owned or controlled by exempt agencies. (24) Exhibition vehicle - An assembled complete passenger car, truck, or motorcycle which: (A) is at least 25 years old; (B) is a collector's item; (C) is used exclusively for exhibitions, club activities, parades, and other functions of public interest; (D) does not carry advertising; and (E) has a frame, body, and motor that is at least 25 years old. (25) Fire fighting equipment - Equipment mounted on fire fighting vehicles used in the process of fighting fires, including, but not limited to, ladders and hoses. (26) Gross weight - The sum of the empty weight of a commercial vehicle (or vehicles, if operated in combination), combined with its maximum carrying capacity, rounded up to the next 100 pounds. (27) Highway construction project - That section of the highway between the warning signs giving notice of a construction area. (28) International symbol of access - The symbol adopted by Rehabilitation International in 1969 at its Eleventh World Congress of Rehabilitation of the Disabled. (29) Legally blind - Having not more than 20/200 of visual acuity in the better eye with correcting lenses, or visual acuity greater than 20/200 but with a limitation in the field of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees. (30) Light truck - As defined in Transportation Code, sec.541.201, any truck with a manufacturer's rated carrying capacity not to exceed two thousand pounds, including those trucks commonly known as pickup trucks, panel delivery trucks, and carryall trucks. (31) Make - The trade name of the vehicle manufacturer. (32) Net carrying capacity - 150 pounds multiplied by the seating capacity as determined by the manufacturer's rated seating capacity, exclusive of the driver's or operator's seat or in the case of a vehicle that is not rated by the manufacturer, an allowance of one passenger for each sixteen inches, exclusive of the driver's or operator's seat. (33) Nonprofit organization - An unincorporated association or society or a corporation that is incorporated or holds a certificate of authority under the Texas Non-Profit Corporation Act, as amended (Texas Civil Statutes, Article 1396-1.01 et seq.). (34) Official - A representative of a taxing entity who is authorized to secure vehicle registration information for the purposes of taxation. (35) Owner - In accordance with Transportation Code, sec.502.001, any person who holds the legal title of a vehicle or who has the legal right of possession thereof, or the legal right of control of said vehicle. (36) Passenger car - In accordance with Transportation Code, sec.502.001, any motor vehicle other than a motorcycle, golf cart, or a bus, designed or used primarily for the transportation of persons. (37) Political subdivision - A county, municipality, local board, or other body of this state having authority to provide a public service. (38) Registration period - A 12-month period beginning on the first day of a calendar month and expiring on the last day of the last calendar month in that 12-month period. (39) Rental fleet - A fleet of five or more vehicles that are owned by the same owner, offered for rent or rented without drivers, and designated by the owner in the manner prescribed by the department as a rental fleet. (40) Rental trailer - A utility trailer that has a gross weight of 4,000 pounds or less and is part of a rental fleet. (41) Road tractor - A vehicle designed for the purpose of mowing the right of way of a public highway or a motor vehicle designed or used for drawing another vehicle or a load and not constructed to carry: (A) an independent load; or (B) a part of the weight of the vehicle and load to be drawn. (42) Service agreement - A contractual agreement which allows individuals or businesses to access the department's vehicle registration records. (43) Special category license plate - A special design license plate issued by the department under statutory authority. (44) Special category license plate fee - Statutorily or department required fee payable upon submission of an application for a special category license plate, symbol, or tab, and collected in addition to statutory motor vehicle registration fees. (45) Special district - A political subdivision of the state established to provide a single public service within a specific geographical area. (46) Tandem axle group - Two or more axles spaced 40 inches or more apart from center to center having at least one common point of weight suspension. (47) Token trailer - A: (A) semitrailer that has a gross weight of more than 6,000 pounds and is operated in combination with a truck; or (B) truck tractor that has been issued an apportioned license plate, a combination license plate, or a forestry vehicle license plate. (48) Tow truck - A motor vehicle or mechanical device adapted or used to tow, winch, or otherwise move disabled motor vehicles. (49) Travel trailer - A house trailer-type vehicle or a camper trailer that is less than eight feet in width or 40 feet in length, exclusive of any hitch installed on the vehicle and designed primarily for use as temporary living quarters in connection with recreational, camping, travel, or seasonal use and not as a permanent dwelling. (50) Unconventional vehicle - A vehicle built entirely as machinery from the ground up, that is permanently designed to perform a specific function, and is not designed to transport property. (51) Vehicle - Every device in, or by which, any person or property is or may be transported or drawn upon a public highway, except devices used exclusively upon stationary rails or tracks. (52) Vehicle classification - The grouping of vehicles in categories for the purpose of registration, based upon design, carrying capacity, or use. (53) Vehicle description - Information regarding a specific vehicle, including, but not limited to, the vehicle make, year model, body style, and vehicle identification number. (54) Vehicle identification number - A number assigned by the manufacturer of a motor vehicle or the department that describes the motor vehicle for purposes of identification. (55) Vehicle inspection sticker - A sticker issued by the Texas Department of Public Safety signifying that a vehicle has passed all applicable safety and emissions tests. (56) Vehicle registration insignia - A license plate, symbol, tab or other device issued by the department evidencing that all applicable fees have been paid for the current registration period which allows the vehicle to be operated upon the public highways. (57) Vehicle registration record - Information contained in the department's files which reflects, but is not limited to, the make, vehicle identification number, year model, body style, license number, and the name of the registered owner. (58) Volunteer fire department - An association that is organized for the purpose of answering fire alarms, extinguishing fires, and providing emergency medical services. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808799 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: January 13, 1998 and March 13, 1998 For further information, please call: (512) 463-8630 43 TAC sec.17.23 The Texas Department of Transportation adopts amendments to sec.17.23, concerning temporary registration permits. Section 17.23 is adopted without changes to the proposed text as published in the February 13, 1998, issue of the Texas Register (22 TexReg 1272) and will not be republished. EXPLANATION OF ADOPTION OF AMENDMENTS Proposed amendments to sec.17.23 were originally published with amendments to sec.17.21, concerning definitions. Final adoption of sec.17.21 and sec.17.28 are also being published in this issue of the Texas Register. Senate Bill 370, 75th Legislature, 1997, added Texas Civil Statutes, Article 6675c-2, sec.4 to provide that a law or agreement of less than statewide application that is adopted by an agency or political subdivision of this state that regulates motor carriers or commercial motor vehicles or the operation of those carriers or vehicles in the transportation of cargo across the border or within an area adjacent to the border by foreign commercial motor vehicles has no effect unless the law or agreement applies uniformly to an entire border commercial zone and only in a border commercial zone. Texas Civil Statutes, Article 6675c-2, sec.4 provides that it supersedes that portion of any paired city, paired state, or similar understanding governing foreign commercial motor vehicles or motor carriers entered into under Transportation Code, sec.502.054, or any other law, and provides the boundaries of a border commercial zone may be modified or established only as provided by federal law. Article 6675c-2, sec.5 also provides for the exemption of a foreign commercial motor vehicle from registration if it spends only a short period of time in the border commercial zone. Section 17.23 is amended to clarify the boundaries of the border commercial zones. Section 17.23(g) provides that Texas Civil Statutes, Article 6675-c applies to agreements with other jurisdictions. Section 17.23 is further amended by adding subsection (h) to provide criteria for an exemption from the display of a temporary registration permit for foreign commercial vehicles operating in the border commercial zone if time in the border commercial zone is not more than 24 hours, or not more than 48 hours if the vehicle is unable to leave this state within 24 hours because of circumstances beyond the control of the motor carrier operating the vehicle, and all financial requirements are satisfied. The vehicle must also be registered by the law of another state or country as evidenced by a valid metal license plate, and the country in which the person owns or controls the vehicle must provide a reciprocal exemption for commercial motor vehicles owned or controlled by residents of Texas. RESPONSE TO COMMENTS No oral or written comments were received on the proposed amendments. STATUTORY AUTHORITY The amended section is adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically Texas Civil Statutes, Article 6675c-2, which authorizes the department to carry out provisions of those laws governing the issuance of motor vehicle registration. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808800 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-8630 43 TAC sec.17.28 The Texas Department of Transportation adopts amendments to sec.17.28, concerning special category license plates, symbols, and tabs. Sections 17.28 is adopted with changes to the proposed texts as published in the March 13, 1998, issue of the Texas Register (23 TexReg 2783). EXPLANATION OF ADOPTION OF AMENDMENTS Proposed amendments to sec.17.28 were originally published with amendments to sec.17.21 concerning definitions. Final adoption of sec.17.21 and sec.17.23 are also being published in this issue of the Texas Register. The Legislature passed several bills in the 75th Legislature, 1997, which created many new special plates and expanded the availability of other special plates. House Bill 107, added Transportation Code, sec.502.292 to authorize the issuance of "Read to Succeed" license plates. House Bill 344 amended: Transportation Code, sec.502.274 to authorize the issuance of "Classic Motorcycle" license plates; Transportation Code, sec.502.275 to authorize the department to issue "Former Military Vehicle" license plates to applicable vehicles and renamed "Antique" vehicles "Exhibition" vehicles; and Transportation Code, sec.502.293 to authorize the department to issue "County Judge" license plates to each county judge in the State of Texas. House Bill 1790, amended Transportation Code, sec.503.0615 to authorize the department to issue "Personalized Prestige" dealer license plates. House Bill 2198 amended Transportation Code, sec.502.293 to authorize the department to issue "Texas Commission on Alcohol and Drug Abuse (Boy Scout) license plates. House Bill 2519 added Transportation Code, sec.502.295 to authorize the department to issue "Big Bend National Park" license plates. House Bill 2681 added Transportation Code, sec.502.2731 to authorize the department to issue "Keep Texas Beautiful" license plates. House Bills 3063 and 2733 amended Transportation Code, sec.502.284 to authorize the department to issue "Golf Cart" license plates to applicable vehicles and to allow the operation of certain golf carts on public roads. House Bill 3250 added Transportation Code, sec.502.291 to authorize the department to issue "Animal Friendly" license plates. Senate Bill 370 added Transportation Code, sec.502.2703 to authorize the department to issue "Professional Sports Team" license plates. Senate Bill 460 added Transportation Code, sec.502.292 to authorize the department to issue "Volunteer Advocate" license plates. Senate Bill 745 added Transportation Code, sec.502.292 to authorize the department to issue "Gold Star Mother" license plates to vehicles owned by a mother of a person who died while serving in the United States Armed Forces. Senate Bill 1506 added Transportation Code sec.502.293 to authorize the department to issue "Houston Livestock Show and Rodeo" license plates. Senate Bill 1630 amended: Transportation Code, sec.502.260 to allow the issuance of "Purple Heart" license plates to civilian nationals; Transportation Code, sec.502.295 to authorize the department to issue "State Official" license plates; Transportation Code, sec.502.296 to authorize the department to issue license plates to members of Congress; and Transportation Code, sec.502.297 to authorize the department to issue license plates to state and federal judges. Senate Bill 1630 also amended Texas Transportation Code, sec.502.001, sec.502.166, and sec.502.167 to add and provide technical corrections to definitions regarding motor vehicle registration. Amended sec.17.28 authorizes the department to issue "Read to Succeed" license plates, "Classic Motorcycle" license plates, "Former Military Vehicle" license plates, "Texas Commission on Alcohol and Drug Abuse" (Boy Scout) license plates, "Big Bend National Park" license plates, "Keep Texas Beautiful" license plates, "Animal Friendly" license plates, "Professional Sports Team" license plates, "Volunteer Advocate" license plates, "Gold Star Mothers" license plates, "Houston Livestock Show and Rodeo" license plates, and "Golf Cart" license plates to applicable vehicles. It changes the terminology of "Antique" vehicles to "Exhibition" vehicles, and authorizes the department to issue "County Judge" license plates. The amended section also authorizes issuance of "Purple Heart" license plates to civilian nationals, and specifies the state officials who may apply for "State Official" license plates. It also authorizes the issuance of personalized prestige plates in several plate categories. The section allows a surviving spouse of a disabled veteran to apply for "Disabled Veteran" plates, even if the disabled veteran did not have plates, as long as the disabled veteran was eligible for the plates. RESPONSE TO COMMENTS Comment: An oral comment was received from the National Street Rod Association (NSRA) concerning the issuance of exhibition license plates. NSRA did not indicate whether it was in favor or against the rules. An oral comment was received from an individual on behalf of a federal Administrative Law Judge (ALJ). Written comments were also received from several federal ALJs and one federal District Court Judge regarding the issuance of license plates to federal judges. The comments received from the ALJs and the individual speaking on behalf of an ALJ were against the rules. The District Judge's comment did not indicate whether he was in favor or against the rules. Comment: NSRA asked why the department requires a photograph of the vehicle with the application issuance of the exhibition license plates, and whether a photograph is necessary for renewal of the plate. NSRA also asked whether or not a person needs to reapply for exhibition plates each year. Response: The department requests a photograph of the exhibition vehicle with the initial application to identify that the vehicle is assembled and has a frame, body, and motor. Applicants are not required to resubmit a photograph for renewals because the vehicle has already been qualified by the department to receive exhibition license plates. This has been clarified in sec.17.28(c)(2)(E) by adding the word "initial" before "application" so a photograph need only be submitted at the initial application. Exhibition license plates are valid for five years. Comment: Concerning sec.17.28(b)(37), State Official license plates, the ALJs and the individual on behalf of an ALJ were not in favor of these rules because ALJs would no longer be eligible to obtain judge license plates. The ALJs stated that they have the same judge status as a United States District Court Judge or Magistrate under the federal statutes because they are appointed for life. They indicated that the federal definition of a United States Judge should prevail over state license plate law. The ALJs suggested that the department has the authority to use discretion to include Administrative Law Judges as judges who are eligible for judge plates. Response: Senate Bill 1630, specifically provides that a federal judge, for issuance of plates purposes, is a judge of the Fifth Circuit Court of Appeals, a judge or a magistrate of a United States district court, or a judge of a United States bankruptcy court. Since the issuance of Texas license plates is a function of the state, there is no conflict with federal law. The state statute does not state that the commenters are not United States Judges, only that certain United States Judges may obtain special plates. This statute is similar to Transportation Code, 502.295, state official plates, which authorizes the issuance of plates only to certain state officials, not all state officials. The department cannot issue these plates to federal ALJs because the department has only the authority to issue specific license plates for which the legislature grants it. The department does not possess discretion outside of this authority. Because the legislature specifically enumerated who was to be considered a federal judge it left no room for the department to make an independent decision. Comment: Some ALJs stated that the department could not take away property (judge license plates) without due process of the law. These judges requested that a hearing be held under the Texas Administrative Procedure Act. Response: Denial of special plates does not fall under the Texas Administrative Procedure Act. Government Code, sec.2001.054, states that the Administrative Procedure Act applies to the grant, denial, or renewal of a license that is required to be preceded by notice and opportunity for hearing. Government Code, sec.2001.003, defines a license as a permit, certificate, approval, registration, or similar form of permission required by law. Displaying either the "U. S. Judge" plates or the regular license plates indicates that the vehicle is registered, and therefore authorized, to be operated on public roadways. The department is not denying a permit, certificate, approval, or similar form of permission required by law because it offers the ALJs regular plates. These regular plates may be used to operate motor vehicles on the public roadways. Comment: The Administrative Law Judges commented that the judge plates are needed for their safety as well as the safety of their families. Response: The department does not have the authority to issue judge plates to Administrative Law Judges for safety reasons without legislative action. Comment: One District Judge sent a comment with a suggested language change to specifically state which federal judges would be eligible for U. S. Judge plates. Response: The department revised paragraph (37) to include a specific list of the judges who qualify for judge plates in accordance with Transportation Code, sec.502.297. STATUTORY AUTHORITY The amended section is adopted under Transportation Code, sec.201.101, which authorizes the Texas Transportation Commission to promulgate rules for the conduct of the work of the Department of Transportation, and more specifically Chapter 502, Subchapter F, which provides the Texas Department of Transportation the authority to establish rules for the issuance of special category license plates, symbols, and tabs. sec.17.28. Special Category License Plates, Symbols, and Tabs. (a) Purpose and Scope. Transportation Code, sec.sec.502.201-502.288, charge the department with the responsibility of issuing a plate or plates, symbols, tabs, or other devices which, when attached to a vehicle as prescribed by the department, act as the legal registration insignia for the period issued. In addition, these articles charge the department with providing special category license plates, symbols, and tabs. In order for the department to efficiently and effectively perform these duties, this section prescribes the policies and procedures for the application, issuance, and renewal of special category license plates, symbols, and tabs. (b) Plate Categories. The department will issue the following special category license plates, symbols, and tabs. (1) Amateur Radio Operator license plates. (A) In accordance with Transportation Code, sec.502.282, the department will issue Amateur Radio Operator license plates bearing the words "Texas Radio Opr" to a person who: (i) owns a passenger car or truck that has a manufacturer's rated carrying capacity not to exceed 2,000 pounds; (ii) provides evidence of holding an unrevoked and unexpired official amateur radio station license issued by the Federal Communications Commission; and (iii) regularly operates mobile amateur radio equipment in the vehicle. (B) Amateur Radio Operator license plates will display the owner's official amateur call letters. (2) Animal friendly license plates. In accordance with Transportation Code sec.502.291, the department will issue specially designed license plates bearing the words "Animal Friendly" to a person who owns a passenger car or light truck that has a manufacturer's rated carrying capacity of one ton or less. (3) Big Bend National Park license plates. In accordance with Transportation Code sec.502.295, the department shall issue specially designed license plates bearing one or more graphic images of significant features of Big Bend National Park to a person who owns a passenger car or light truck that has a manufacturer's rated carrying capacity of one ton or less. (4) Civil Air Patrol license plates. In accordance with Transportation Code, sec.502.261, the department will issue Civil Air Patrol license plates bearing the words "Texas Wing Civil Air Patrol" to a person who: (A) owns a passenger car or a light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less; and (B) provides evidence of membership in the United States Air Force Auxiliary, Civil Air Patrol. (5) Classic Auto/Truck windshield validation sticker. In accordance with Transportation Code, sec.502.274, the department will issue a Classic Auto/Truck windshield validation sticker to an owner of a passenger car or a light commercial motor vehicle that: (A) has a manufacturer's rated carrying capacity of one ton or less; and (B) is 25 or more years old; if the vehicle's Texas license plates were originally issued the same year as the model year of the vehicle. (6) Classic license plates. In accordance with Transportation Code, sec.502.274, the department will issue Classic license plates bearing the legend "Classic Auto," "Classic Truck," or "Classic Motorcycle" to an owner of a passenger car or light commercial motor vehicle that: (A) has a manufacturer's rated carrying capacity of one ton or less; and (B) is 25 or more years old. (7) Collegiate license plates. In accordance with Transportation Code, sec.502.270, the department will issue collegiate license plates bearing the name and insignia of qualifying public or private institutions of higher education to an owner of a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less. (8) Congressional Medal of Honor license plates. (A) In accordance with Transportation Code, sec.502.255, the department will issue Congressional Medal of Honor license plates bearing the words "Congressional Medal of Honor" to a person who: (i) owns a passenger car or a light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less; and (ii) has received the Congressional Medal of Honor. (B) An owner operating a vehicle bearing Congressional Medal of Honor license plates shall have the same parking privileges described in Transportation Code, sec.681.008. (9) Cotton Vehicle license plates. In accordance with Transportation Code, sec.502.277, the department will issue Cotton Vehicle license plates bearing the words "Cotton Vehicle" to an owner of a motor vehicle that only transports seed cotton modules, cotton, or equipment used in transporting or processing cotton. (10) County Judge license plates. In accordance with Transportation sec.502.293, the department will issue special license plates bearing the legend "County Judge" to a person who: (A) submits proof with the application that the person is a judge of a county court of this state established by Article V, sec.15, Texas Constitution; and (B) owns a passenger car or light truck that has a manufacturer's rated carrying capacity of one ton or less. (11) Disabled Veteran license plate. (A) In accordance with Transportation Code, sec.502.254, the department will issue Disabled Veteran license plates bearing the words "Disabled Vet" to the following owners of a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less: (i) a veteran of the United States Armed Forces with a service-connected disability of at least 60%, or a 40% service connected disability due to the amputation of a lower extremity, who receives compensation from the federal government because of such disability; (ii) an organization that owns a motor vehicle used exclusively for the transportation of disabled veterans without charge; or (iii) the surviving spouse of a deceased disabled veteran, if such license plates were issued to the veteran prior to the time of death or the surviving spouse applies for the disabled veteran license plate after the veteran's death as long as the deceased disabled veteran was eligible for the veteran license plates, and as long as that surviving spouse remains unmarried. (B) A vehicle on which Disabled Veteran license plates are displayed is exempt from the payment of parking fees in accordance with Transportation Code, sec.681.008. (12) Disaster Relief license plates. In accordance with Transportation Code, sec.502.203, the department will issue Disaster Relief license plates bearing the word "Disaster" to an owner of a commercial motor vehicle, truck tractor, trailer, and semitrailer that is the property of and used exclusively by a non- profit, disaster relief organization in emergency situations. (13) Exhibition license plates. In accordance with Transportation Code, sec.502.275, the department will issue Exhibition license plates bearing the words "Antique Vehicle" or "Antique Motorcycle" to an owner of a completed vehicle that: (A) has a frame, body, and motor that is 25 or more years old; (B) is used exclusively for exhibitions, club activities, parades, and other functions of public interest; and (C) is not used for regular transportation. (14) Exhibition validation tab. In accordance with Transportation Code, sec.502.275, the department will issue Exhibition Validation tabs displaying the word "Antique" for display on existing Texas license plates that were originally issued the same year as the model year of the exhibition vehicle. (15) Foreign Organization license plates. In accordance with Transportation Code, sec.502.290, the department will issue Foreign Organization license plates bearing the words "Foreign Organization" to an instrumentality established by a foreign government recognized by the United States before January 1, 1979, that is without official representation or diplomatic relations with the United States, for a passenger car or light commercial motor vehicle that has a manufacturer's rated carrying capacity of one ton or less. (16) Forestry Vehicle license plates. In accordance with Transportation Code, sec.502.280, the department will issue Forestry Vehicle license plates bearing the words "Forestry Vehicle" to an owner of a vehicle used exclusively for transporting forest products in their natural state, including logs, debarked logs, untreated ties, stave bolts, plywood bolts, pulpwood billets, wood chips, stumps, sawdust, moss, bark, wood shavings, and property used in the production of those products. (17) Former Military Vehicle license plate. In accordance with Transportation Code, sec.502.275, the department will issue a Military Vehicle license plate bearing the words "Military Vehicle" to a vehicle, to be attached to the rear of a vehicle that: (A) is a passenger car, truck, or motorcycle; (B) has been, but no longer is, used by the armed forces of a national government; (C) displays markings indicating it was a military vehicle; (D) is used for exhibitions, club activities, parades, and other functions of public interest; and (E) is not used for regular transportation. (18) Former Prisoner of War license plates. In accordance with Transportation Code, sec.502.257, the department will issue Former Prisoner of War license plates bearing the words "Former POW" to an owner of a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less, if the owner provides evidence that he or she is: (A) honorably discharged from the United States Armed Forces and was captured and incarcerated by an enemy of the United States during a period of conflict with the United States; or (B) the surviving spouse of a former prisoner of war and remains unmarried. (19) Gold Star Mother license plates. In accordance with Transportation Code, sec.502.292, the department will issue Gold Star Mother License Plates bearing the words "Gold Star Mother" to a person who: (A) is the mother of a person who died while serving in the United States Armed Forces; (B) is the owner of a passenger car or light truck that has a manufacturer's rated carrying capacity of one ton or less; and (C) completes and signs an application form provided by the department. (20) Golf cart license plates. (A) In accordance with Transportation Code, sec.502.284, the department will issue Golf Cart license plates bearing the words "Golf Cart" to an owner of a golf cart, if the owner: (i) resides on real property that is owned or under the control of the United States Army Corps of Engineers; (ii) is required by that agency to register the owner's golf cart; (iii) resides in a county that borders another state; (iv) resides in a county whose population is more than 95,000 but less than 100,000; and (v) applies for and pays the $10 fee to obtain a golf cart license plate. (B) Golf carts issued license plates under this paragraph: (i) are prohibited from operation on public roads, except as provided in subparagraph (C) of this paragraph; (ii) are not subject to normal vehicle registration requirements; and (iii) are exempt from Transportation Code, Chapter 547, concerning required vehicle equipment, and Transportation Code, sec.601.051 concerning proof of financial responsibility. (C) Those golf carts not meeting the criteria in subparagraph (A)(i)-(iv) of this paragraph are not required to be registered, and are also exempt from Transportation Code, Chapter 547 and Transportation Code, sec.601.051, if the golf cart is driven to or from a golf course and operated: (i) in the daytime and the operation does not exceed a distance of two miles from the point of origin to the destination; or (ii) entirely within a master planned community with a uniform set of restrictive covenants that has had a plat approved by a county or municipality. (D) Operation of any golf cart, except those detailed in subparagraphs (A) and (C) of this paragraph, on public property or other property where the state has law enforcement jurisdiction, requires registration in accordance with current registration laws. Whether a vehicle is designed as a 4-wheeled truck, 4-wheeled passenger, or 3-wheeled motorcycle determines the classification under which the golf cart must be registered. These golf carts are not exempt from Transportation Code, Chapter 547 and Transportation Code, sec.601.051. (21) Houston Livestock Show and Rodeo license plates. In accordance with Transportation Code, sec.502.293, the department will issue special license plates bearing the words "Houston Livestock Show and Rodeo" to a person who owns a passenger car or light truck that has a manufacturer's rated carrying capacity of one ton or less. (22) Honorary Consul license plates. In accordance with Transportation Code, sec.502.267, the department will issue Honorary Consul license plates bearing the words "Honorary Consul" to a person who: (A) owns a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less; and (B) is an honorary consul authorized by the United States government to perform consular duties. (23) Keep Texas Beautiful license plates. In accordance with Transportation Code, sec.502.2731, the department will issue Keep Texas Beautiful License Plates bearing the words "Keep Texas Beautiful" to an owner of a passenger car or light commercial motor vehicle that has a manufacturer's rated carrying capacity of one ton or less. (24) Korea Veteran license plates. In accordance with Transportation Code, sec.502.263, the department will issue Korea Veteran license plates bearing the words "Korea Veteran" to an owner of a passenger car or light commercial vehicle that has a manufacturer's carrying capacity rated of one ton or less, if the owner provides evidence that he or she: (A) served in a branch of the United States Armed Forces after June 26, 1950 and before February 1, 1955; and (B) was honorably discharged from the United States Forces. (25) Legion of Valor license plates. In accordance with Transportation Code, sec.502.2555, the department will issue Legion of Valor license plates bearing the words "Legion of Valor" to an owner of a passenger car or light commercial vehicle that has a manufacturer's carrying capacity rate of one ton or less, if the owner provides evidence that he or she is a honorably discharged veteran of the armed forces of the United States or is a member of the armed forces of the United States on active duty, and is the recipient of one of the following military decorations: (A) Air Force Cross; (B) Air Force Distinguished Service Cross; (C) Army Distinguished Service Cross; (D) Navy Cross; or (E) Congressional Medal of Honor. (26) Log Loader Vehicle license plates. In accordance with Transportation Code, sec.502.279, the department will issue Log Loader Vehicle license plates bearing the words "Log Loader" to an owner of a vehicle that does not haul logs and on which is mounted machinery used only for loading logs on other vehicles. (27) Non-Profit Organization license plates. In accordance with Transportation Code, sec.502.273, the department will issue Non-Profit Organization license plates bearing the insignia of a non-profit organization to an organization member who is an owner of a passenger car or a light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less. (28) Operation Desert Storm license plates. In accordance with Transportation Code, sec.502.265, the department will issue Operation Desert Storm license plates bearing the words "Desert Storm" to an owner of a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less, if the owner provides evidence that he or she: (A) took part in Operation Desert Shield/Storm as a member of the United States Armed Forces; and (B) is an honorably discharged veteran or remains a member of the United States Armed Forces. (29) Parade license plates. In accordance with Transportation Code, sec.502.283, the department will issue Parade license plates bearing the suffix "PAR" to a non-profit organization that owns and operates a motor vehicle designed, constructed, and used primarily for parade purposes. (30) Peace Officer license plates. In accordance with Texas Civil Statutes, Article 6675a-5q, the department will issue Peace Officer license plates bearing the words "To Protect and Serve," inscribed above an insignia depicting a yellow rose superimposed on the outline of a badge, to the owner of a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less, if the owner provides evidence that he or she: (A) has been wounded in the line of duty as a peace officer; or (B) is the surviving spouse, parent, or adult child of a person killed in the line of duty as a peace officer. (31) Pearl Harbor Survivor license plates. (A) In accordance with Transportation Code, sec.502.259, the department will issue Pearl Harbor Survivor license plates bearing the legend "Pearl Harbor Survivor" to an owner of a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less, if the owner provides evidence that he or she: (i) served in the United States Armed Forces; (ii) was stationed in the Hawaiian Islands on December 7, 1941; and (iii) survived the attack on Pearl Harbor. (B) Pearl Harbor license plates may be issued to the surviving spouse of a Pearl Harbor survivor for as long as the surviving spouse remains unmarried. (32) Personalized license plates. In accordance with Transportation Code, sec.502.251, the department will issue Personalized license plates, subject to the restrictions of subsection (d)(5) of this section, which display an approved personalized license plate number, to owners of all classifications of vehicles except: (A) those vehicles bearing license plates which receive full or partial exemption from regular registration fees, excluding Metal Dealer license plates; and (B) trailers and semitrailers with gross weights in excess of 10,000 pounds. (33) Professional Sports Team license plates. In accordance with Transportation Code sec.502.2703, the department will issue Professional Sports Team license plates bearing the name and insignia of qualifying professional sports teams to an owner of a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less. The department will issue such plates for teams if authorization for use of that team's insignia is given to the department without payment to the team or any major league properties organization. (34) Purple Heart license plates. (A) In accordance with Transportation Code, sec.502.260, the department will issue Purple Heart license plates bearing the words "Purple Heart" to an owner of a passenger car or light commercial motor vehicle that has a manufacturer's rated carrying capacity of one ton or less, if the owner provides evidence that he or she is a recipient of the Purple Heart medal and: (i) an honorably discharged veteran or remains on active duty with United States Armed Forces; or (ii) a civilian national of the United States who is an employee or a former employee of a branch of the United States Armed Forces. (B) Purple Heart license plates may be issued to the surviving spouse of a Purple Heart medal recipient for as long as the surviving spouse remains unmarried. (35) Read to Succeed license plates. In accordance with Transportation Code, sec.502.292, the department will issue Read to Succeed license plates to an owner of a passenger car or light commercial motor vehicle that has a manufacturer's rated carrying capacity of one ton or less. (36) State Capitol license plates. In accordance with Transportation Code, sec.502.269, the department will issue State Capitol license plates depicting the state capitol to an owner of a passenger car or light commercial motor vehicle that has a manufacturer's rated carrying capacity of one ton or less. (37) State Official license plates. (A) In accordance with Transportation Code, sec.502.295 and sec.502.296, the department will issue State Official license plates bearing the appropriate designation to an owner of a passenger car or light truck, who is a member of the United States Congress or Texas Legislature and to the following elected state officials: (i) Governor; (ii) Lieutenant Governor; (iii) Attorney General; (iv) Comptroller of Public Accounts; (v) General Land Office Commissioner; (vi) Agriculture Commissioner; (vii) Secretary of State; (viii) Railroad Commissioner; (ix) Supreme Court Justice; (x) Court of Criminal Appeals Judge; and (xi) Board of Education Member. (B) In accordance with Transportation Code, sec.502.297, the department will issue State Official license plates bearing the appropriate designation to an owner of a passenger car or light truck, who is a: (i) federal judge or magistrate of the Fifth Circuit Court of Appeals, United States district court, or United States bankruptcy court; or (ii) a state judge who is a judge of a court of appeals, district court judge, presiding judge of an administrative judicial district, or statutory county court judge. (38) Texas Aerospace Commission license plates. In accordance with Transportation Code, sec.502.271, the department will issue Texas Aerospace Commission license plates bearing the words "Aerospace Commission" to an owner of a passenger car or light commercial motor vehicle that has a manufacturer's rated carrying capacity of one ton or less. (39) Texas Commission on Alcohol and Drug Abuse (Boy Scout) license plates. In accordance with Transportation Code, sec.502.293, the department will issue Texas Commission on Alcohol and Drug Abuse license plates to a person who owns a passenger car or light truck that has a manufacturer's rated carrying capacity of one ton or less. (40) Texas Commission on the Arts license plates. In accordance with Transportation Code, sec.502.272, the department will issue Texas Commission on the Arts license plates bearing the words "State of the Arts" to an owner of a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less. (41) Texas National Guard and State Guard license plates. In accordance with Transportation Code, sec.502.256, the department will issue Texas National Guard and State Guard license plates bearing the words "Texas Guard" to an owner of a passenger car or light commercial motor vehicle that has a manufacturer's rated carrying capacity of one ton or less, if the owner provides evidence that he or she is: (A) an active member of the Texas Army National Guard, the Texas Air National Guard, or the Texas State Guard; or (B) a retired guard member who has completed 20 years of satisfactory service. (42) United States Armed Forces license plates. (A) In accordance with Transportation Code, sec.502.256, the department will issue United States Armed Forces license plates bearing the name of the appropriate branch of the United States Armed Forces to an owner of a passenger car or light commercial vehicle who provides evidence that the owner is an active, retired, or honorably discharged member of a branch of the United States Armed Forces. (B) United States Armed Forces license plates may be issued to the surviving spouse of a member killed in action for as long as that spouse remains unmarried. (43) United States Armed Forces Reserve license plates. In accordance with Transportation Code, sec.502.256, the department will issue United States Armed Forces Reserve license plates bearing the words "Armed Forces Reserve" to an owner of a passenger car or light commercial vehicle who provides evidence that the owner is a member of the United States Armed Forces Reserve. (44) United States Coast Guard Auxiliary license plates. In accordance with Transportation Code, sec.502.261, the department will issue United States Coast Guard Auxiliary license plates bearing the words "Coast Guard Auxiliary" to an owner of a passenger car or light commercial vehicle who provides evidence the owner is a member of the United States Coast Guard Auxiliary. (45) United States Marine Corps League license plates. In accordance with Transportation Code, sec.502.261, the department will issue Marine Corps League license plates bearing the words "Marine Corps League" and the emblem of the United States Marine Corps League to a person who: (A) owns a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less; and (B) provides evidence that the owner is a member of the Marine Corps League or its auxiliary. (46) United States Olympic Committee license plates. In accordance with Texas Civil Statutes, Article 6675a-5q, the department will issue United States Olympic Committee license plates bearing the words "United States Olympic Committee" to an owner of a passenger car or light commercial motor vehicle that has a manufacturer's rated carrying capacity of one ton or less. (47) Vietnam Veteran license plates. (A) In accordance with Transportation Code, sec.502.264, the department will issue Vietnam Veteran license plates bearing the words "Vietnam Veteran" to an owner of a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less, if the owner provides evidence that he or she: (i) served in a branch of the United States Armed Forces after August 4, 1964 and before May 8, 1975; and (ii) is an honorably discharged veteran or remains a member of the United States Armed Forces. (B) Vietnam Veteran license plates may be issued to the surviving spouse of a qualifying Vietnam veteran for as long as the surviving spouse remains unmarried. (48) Volunteer Advocate license plates. In accordance with Transportation Code, sec.502.292, the department will issue Volunteer Advocate license plates to an owner of a passenger car or light commercial motor vehicle that has a manufacturer's rated carrying capacity of one ton or less. (49) Volunteer Firefighter license plates. In accordance with Transportation Code, sec.502.268, the department will issue Volunteer Firefighter license plates bearing the words "Vol Firefighter" to an owner of a passenger car or light commercial vehicle who provides a certificate of certification as a volunteer firefighter from the Texas Volunteer Firefighters and Fire Marshals Certification Board. (50) World War II Veteran license plates. In accordance with Transportation Code, sec.502.262, the department will issue World War II Veteran license plates bearing the words "WWII Veteran" to an owner of a passenger car or light commercial vehicle that has a manufacturer's rated carrying capacity of one ton or less, if the owner provides evidence that he or she: (A) served in a branch of the United States Armed Forces after December 6, 1941 and before January 1, 1947; and (B) is an honorably discharged veteran or remains a member of the United States Armed Forces. (c) Initial application for special category license plates, symbols, or tabs. (1) Application Process. (A) Procedure. An owner of a vehicle registered as specified in sec.17.22 of this title (relating to Motor Vehicle Registration), who wishes to apply for a special category license plate, symbol, or tab must do so on a form prescribed by the director. (B) Form requirements. The application form shall at a minimum require: (i) the signature of the owner; and (ii) the name and complete address of the applicant. (2) Fees and Documentation. (A) The application must be accompanied by registration fees as required by law, with the following special category license plates exempted from regular registration fees by statute: (i) Congressional Medal of Honor; (ii) Disabled Veteran; (iii) Disaster Relief; (iv) Foreign Organization; (v) Former Prisoner of War; (vi) Golf Carts that comply with all of the criteria for a golf cart plate prescribed by subsection (b)(20) of this section; (vii) Legion of Valor; (viii) Log Loader; (ix) Parade; (x) Pearl Harbor Survivor (first set per applicant only); and (xi) Purple Heart Recipient (first set per applicant only). (B) The application must be accompanied by statutorily prescribed special category license plate fees. (C) The application must be accompanied by local fees or other fees as may be prescribed by law and collected in conjunction with registering a vehicle, with the exception of vehicles bearing license plates described in subparagraph (A) of this paragraph, which are exempted from such fees. (D) The application must include prescribed evidence of eligibility for any special category license plates other than personalized, collegiate, Animal Friendly, Big Bend National Park, Golf Cart, Houston Livestock Show and Rodeo, Keep Texas Beautiful, Professional Sports Teams, Read to Succeed, State Capitol, Texas Aerospace Commission, Texas Commission on Alcohol and Drug Abuse (Boy Scout), Texas Commission on the Arts, United States Olympic Committee, and Volunteer Advocate which may include, but is not limited to: (i) a license issued by a governmental entity; (ii) a letter issued by a governmental entity on that agency's letterhead; (iii) discharge papers; and (iv) marriage and death certificates. (E) Initial applications for Exhibition license plates must include a photograph of the completed vehicle for which Exhibition registration is requested. (3) Place of application. All initial applications for special category license plates must be made with the department, with the exception of: (A) "Cotton Vehicle" license plates which may be made either with the department or with the county tax assessor-collector in the owner's resident county; and (B) Golf Cart license plates which must be made at the county tax assessor- collector in the owner's resident county. (d) Initial issuance of special category license plates, symbols, or tabs. (1) Issuance. Upon receipt of a complete initial application for registration, accompanied by the required documentation and fees, the department will issue special category license plates, symbols, or tabs to be displayed on the vehicle for which the license plate was issued for the current registration period. If the vehicle for which the special category license plates are issued is currently registered, the owner must surrender the license plates currently displayed on the vehicle, along with the corresponding license receipt, before the special category license plates may be issued. (2) Number of plates issued. (A) Two plates. Unless otherwise listed in subparagraph (B) of this paragraph, two special category license plates, each bearing the same license plate number, will be issued per vehicle. (B) One plate. One license plate will be issued per vehicle for the following license plate categories: (i) Cotton Vehicle; (ii) Disaster Relief; (iii) Exhibition; (iv) Forestry Vehicle; (v) Log Loader; (vi) Parade; (vii) Military Vehicle; and (viii) Golf Cart. (C) Registration number. The identification number assigned by the military may be approved as the registration number in lieu of displaying Military Vehicle license plates on a Military Vehicle. (3) Assignment of plates. (A) Title holder. Unless otherwise exempted by law or this section, the vehicle on which special category license plates, symbols, or tabs is to be displayed shall be titled in the name of the person to whom the special category license plates, symbols, or tabs is assigned, or a certificate of title application shall be filed in that person's name at the time the special category license plates, symbols, or tabs are issued. (B) If the vehicle is titled in a name other than that of the applicant, the applicant must provide evidence of having the legal right of possession and control of the vehicle. (C) Leased vehicle. In the case of a leased vehicle, the department shall require a copy of the lease agreement verifying the vehicle is currently leased by the person to whom the special category license plate, symbol, or tab was assigned. (4) Number of vehicles. (A) Unlimited vehicles. An owner may purchase special category license plates, symbols, or tabs for an unlimited number of vehicles, with the exception of the categories listed in subparagraphs (B) and (C) of this paragraph. (B) One vehicle. The following categories are limited by statute to one set of special category license plates per owner: (i) Congressional Medal of Honor; (ii) Disabled Veteran; (iii) Former Prisoner of War; (iv) Gold Star Mother; (v) Legion of Valor; (vi) Non-Profit Organization; (vii) United States Armed Forces Reserves; and (viii) Volunteer Firefighter. (C) Three vehicles. State Official license plates are limited to three sets of special category license plates per owner. (5) Personalized plate numbers. (A) Issuance. The director will issue a personalized license plate number to be displayed on the standard passenger license plate or on special category license plates subject to the exceptions set forth in this paragraph and in subsection (b)(25) of this section. (B) Character limit. A personalized license plate number may not contain more than six alpha or numeric characters, or a combination or such characters. Certain personalized special category license plates may not, depending upon the license plate design and space limitations, contain more than four or five alpha or numeric characters, or a combination of such characters. Spaces, hyphens, periods, or one silhouette of the state of Texas may be used in conjunction with the license plate number. (C) Personalized plates not approved. A personalized license plate number will not be approved if the number: (i) conflicts with the department's current or proposed regular license plate numbering system; (ii) is determined to be obscene or objectionable by the director; or (iii) is currently issued to another owner. (D) Categories not available. Personalized license plate numbers are not available for display on the following license plates: (i) Amateur Radio (other than the official call letters of the vehicle owner); (ii) Exhibition Vehicle; (iii) Armed Forces Reserve; (iv) County Judge; (v) Cotton Vehicle; (vi) Disabled Veteran; (vii) Disaster Vehicle; (viii) Farm Truck; (ix) Foreign Organization; (x) Forestry Vehicle; (xi) Former Prisoner of War; (xii) Golf Cart; (xiii) Honorary Consul; (xiv) Legion of Valor; (xv) Log loader; (xvi) Machinery; (xvii) Parade; (xviii) Permit; (xiv) Soil Conservation; and (xx) Texas Guard. (E) Fee. The statutorily prescribed personalized license plate fee will be charged in addition to any statutorily prescribed special category license plate fee. (F) Priority. Once a personalized license plate number has been assigned to an applicant, the owner shall have priority to such number for succeeding years, provided timely renewal application is submitted to the department each year in accordance with subsection (e) of this section. (e) Special Category license plate renewal. (1) Length of validation. All special category license plates, symbols, or tabs shall be valid for 12 months from the month of issuance, with the following exceptions. (A) Five year period. The following license plates and registration numbers are issued for a five year period or remainder of that period, and expire every five years in March; (i) Exhibition license plates and tabs; (ii) Former Military Vehicle registration numbers; and (iii) Parade license plates. (B) March expiration dates. The following license plates are issued for a 12 month period, or remainder of that period, and expire annually in March: (i) Congressional Medal of Honor; (ii) Cotton Vehicle; (iii) County Judge; (iv) Disaster Relief; (v) Disabled Veteran; (vi) Forestry Vehicle; (vii) Former Prisoner of War; (viii) Legion of Valor; (ix) Pearl Harbor Survivor; and (x) State Official. (C) June expiration dates. The following license plates are issued for a 12 month period, or remainder of that period, and expire annually in June: (i) Armed Forces Reserve; (ii) Honorary Consular; and (iii) Texas Guard. (D) September expiration dates. Log Loader license plates are issued for a 12 month period, or remainder of that period, and expire annually in September. (E) No expiration date. Foreign Organization license plates are valid for as long as the registered vehicle is owned and operated by the foreign organization. (2) Renewal. (A) Renewal Notice. The department will send a special category license plate renewal notice to each owner approximately 90 days prior to the expiration date. (B) Return of Notice. Upon receipt of the renewal notice, the owner must return the renewal, statutory fee, if applicable, and any required documentation to the department with the exception of renewals for golf carts registered under subsection (b)(20) of this section. To validate registration, a golf cart owner shall return the renewal, statutory fee, and any required documentation to the county tax assessor-collector in his or her resident county. (C) Registration Renewal. Upon receipt of the special category license plate renewal the department will notify the owner regarding registration renewal, in accordance with sec.17.22 (d) of this title (relating to Motor Vehicle Registration). (D) Reservation of expired plate numbers. The department will reserve a personalized license plate number for sixty days after the expiration date of the plates if not renewed in accordance with this subsection. Subsequent to the sixty days the department may consider an application for the issuance of the unused personalized license plate number to a new applicant. All special category license plate renewals received after expiration of the 60-day period will be treated as new applications. (E) Issuance of validation insignia. Upon receipt of the License Plate Renewal Notice as specified in this subsection, the department will issue registration validation insignia as specified in sec.17.22 of this title (relating to Motor Vehicle Registration), except for those plates listed in items (i) or (ii) of this paragraph or unless this section or other law require the issuance of new license plates to the owner. (i) New license plates shall be issued upon expiration for renewed Exhibition Vehicle, Congressional Medal of Honor, Disaster Relief, Honorary Consular, Legion of Valor, Parade, and State Official license plates. (ii) New license plates shall be issued every six years for renewed personalized license plates, and every eight years for other license plate categories, in accordance with the provisions of sec.17.22 of this title (relating to Motor Vehicle Registration). (F) Lost or destroyed renewal notices. If a renewal notice is lost, destroyed, or not received by the vehicle owner, the special category license plates, symbol, or tab may be renewed if the owner provides acceptable personal identification along with the appropriate fees and documentation. Failure to receive the notice does not relieve the owner of the responsibility to renew the vehicle's registration. (f) Transfer of special category license plates. (1) Transfer between vehicles. (A) Transferable between vehicles. If the owner of a vehicle registered with special category license plates disposes of the vehicle during the registration year, the owner's special category license plates may be transferred and displayed upon another vehicle upon proper application with the department, provided that the vehicle to which the plates are transferred: (i) is titled or leased in the owner's name; and (ii) meets the vehicle classification requirements for that particular special category license plate, symbol, or tab. (B) Non-transferable between vehicles. The following special category license plates, symbols, or tabs are non-transferable between vehicles: (i) Exhibition vehicle license plates and tabs; (ii) Classic vehicle license plates; (iii) Parade license plates; (iv) Forestry vehicle license plates; and (v) Log Loader license plates. (2) Transfer between owners. Special category license plates are non- transferable between owners unless such transfer is provided for by law or this section. If the owner of a vehicle registered with special category license plates disposes of the vehicle during the registration year, the special category license plates must be returned to the department and regular replacement plates must be purchased for the vehicle. (3) Transfer of military plates to surviving spouse. Upon the death of the owner, and proper application with the department, the following special category license plates may be transferred to a surviving spouse who remains unmarried: (A) Armed Forces, if the member is killed in action. (B) Disabled Veteran; (C) Former Prisoner of War; (D) Pearl Harbor Survivor; (E) Purple Heart Recipient; and (F) Vietnam Veteran. (4) Transfer through court order. A personalized license number may be transferred without payment of the personalized license plate fee when the owner makes a legal name change, or when the personalized license plate number is awarded to a new owner by court order. The department shall require verification of the court order in both instances, and the vehicle shall be titled or leased in the owner's name as specified in subsection (c) of this section. (g) Replacement. (1) Application. When special category license plates, symbols, or tabs are lost, stolen, or mutilated, the owner shall apply directly to the department for the issuance of replacements, except that log loader license plates must be reapplied for and accompanied by the required fees and documentation, in accordance with Transportation Code, sec.502.279. (2) Interim replacement plates. In accordance with the provisions of Transportation Code, sec.502.184, until the department issues the replacement special category license plates, symbols, or tabs, the owner shall obtain regular replacement license plates, symbols or tabs and pay the statutory replacement plate fee. (3) Stolen vehicles. The department will not approve the issuance of replacement special category license plates with the same personalized license plate number when the department's records indicate that the vehicle displaying the special category license plates, symbols or tabs, or the license plates, symbols or tabs themselves, were reported as stolen. Upon recovery of the stolen vehicle or license plates, symbols, or tabs, or upon expiration, the department will issue, at the owner's request, replacement special category license plates, symbols, or tabs bearing the same personalized number as those that were stolen. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808801 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: March 13, 1998 For further information, please call: (512) 463-8630 CHAPTER 18. Motor Carriers The Texas Department of Transportation adopts the repeal of sec.18.94, amendments to sec.sec.18.2, 18.80, 18.82, 18.84, 18.88, 18.89, 18.91-18.93, and new sec.sec.18.94-8.96, concerning vehicle storage facilities. Sections 18.80, 18.84, 18.88, 18.89, 18.91-18.93, and 8.94-8.96 are adopted without changes to the proposed text as published in the February 13, 1998, issue of the Texas Register (23 TexReg 1277) and will not be republished. Section 18.2 and sec.18.82 are adopted with changes in order to comply with 1 TAC sec.91.23. EXPLANATION OF ADOPTED REPEALS, AMENDMENTS, AND NEW SECTIONS The repeal, amendments, and new sections are necessary to implement the provisions of House Bill 1025, House Bill 2202, Senate Bill 370, sec.6.01, and Senate Bill 855, 75th Legislature, 1997, and to ensure the proper administration of laws concerning vehicle storage facility licensing. House Bill 1025 amended Texas Civil Statutes, Article 6687-9a to provide a definition of "impoundment" which includes preservation, conducting an inventory, storing all unsecured personal property, and obtaining motor vehicle registration information. The term "preservation" is deleted. House Bill 2202 amended Texas Civil Statutes, Article 6687-9a to: provide technical cleanup language to the Vehicle Storage Facility Act; amend definitions; and provide the department with the ability to deny, revoke, or suspend a vehicle storage facility license, and assess administrative penalties not to exceed $10,000 per violation. Senate Bill 370, sec.6.01, amended Texas Civil Statutes, Article 6687-9a, to provide a procedure for sending renewal notices to vehicle storage facility licensees. Senate Bill 855, 75th Legislature, 1997, amended Texas Civil Statutes, Article 6687-9a, to provide for the disposal of abandoned vehicles in vehicle storage facilities. The amendments replace references to Texas Civil Statutes with the recodified citations to the Transportation Code. The amendments also replace references to "VSF" with "vehicle storage facility" and deletes references to "motor vehicle storage facilities." Section 18.2 is amended to define terms relevant to the motor carrier chapter. Section 18.80 is amended by moving references to other vehicle storage facility laws from sec.18.91(f) to this section. Section 18.82 is amended by adding and clarifying terms relevant to the vehicle storage facility subchapter. Section 18.84 is amended to provide that the department will mail a license renewal notice to the licensee's last known address according to the records of the department and eliminate charges for a duplicate vehicle storage facility license. It also provides that the department will not issue a license if an applicant knowingly supplies false or incomplete information on the application, if in the three years preceding the date of the application, one of the principals in the business has been convicted of a felony or misdemeanor for which the maximum punishment is confinement in jail or a fine exceeding $500, or if the vehicle storage facility does not meet the standards for vehicle storage facilities. This section requires a corporation to include a copy of its amendment to its articles of incorporation when submitting a supplemental application for registration to change licensee name or address. Sections 18.89 and 18.92 are amended by replacing the term "administrative and preservation impoundment" with "notification and impoundment." Amended sec.18.89 also clarifies that letters on a notification sign regarding complaints must be one inch in height, and a contrasting background. Amended sec.18.91 authorizes a vehicle storage facility to combine the required signs, provided that any combination of signs meets the respective requirements of each individual sign. Section 18.93 is amended to provide that a vehicle storage facility operator shall not charge for more than five days of storage fees until a notice is mailed or published. The operator shall charge a daily storage fee after notice. This section prohibits a vehicle storage facility operator from charging an administrative fee. Existing sec.18.94 is repealed and replaced with new sec.18.94 to provide a definition for the term "director," specify the types of sanctions the department may assess, including probation of a licensee whose license has been suspended and/or monetary penalties, and establish a procedure for investigation of and notice to the person charged with a violation. This section provides criteria to be used to determine which sanctions to impose, a procedure for response to the charge, and an opportunity for an administrative hearing. The section requires that the administrative law judge's proposal for decision be submitted to the director, who will determine whether a violation has occurred, and if so, impose the recommended penalty or other sanction; increase or decrease the amount of the recommended penalty or impose other sanctions. It provides for payment of penalty and appeal to a court with jurisdiction; provides that the department and the person charged may enter into a compromise settlement agreement; and authorizes the department to seek injunctive relief and civil penalties if it appears that a person is in violation of, or is threatening to violate, the Act, this subchapter, or an order of the department. New sec.18.95 provides circumstances under which the department may revoke, suspend, or deny a license, or place a person on probation whose license has been suspended, in cases of conviction for certain criminal activities or probation violations. This section establishes criteria the department will consider regarding sanctions, and provides a procedure for notification of licensees/applicants of any revocation, suspension, denial, or probation. It establishes policies and procedures regarding suspension and revocation of a vehicle storage facility license for failure to provide proof of insurance, and provides that the department will suspend the license of a vehicle storage facility operator upon receipt of a final order suspending license issued under Family Code, sec.232.008. This section provides that the department may require a licensee to report regularly to the department on any matter that is the basis of probation. New sec.18.96 provides that no vehicle may be disposed of under Texas Civil Statutes, Article 6687-9a, unless the vehicle storage facility operator has complied with all provisions of the Act, and a vehicle storage facility operator shall notify the vehicle owner and all recorded lienholders of the proposed disposal of the vehicle in accordance with Texas Civil Statutes, Article 6687- 9a, sec.13(d). This section specifies the types of records a vehicle storage facility operator shall keep under its care and custody; explains how a vehicle storage facility operator may dispose of a vehicle through public sale; and clarifies how disputes over the sale, or dispersal of proceeds from the sale, of a vehicle are to be pursued. RESPONSE TO COMMENTS Comment: A written comment was received from one individual who requested clarification of the proposed definition of "tow truck" in sec.18.2. The commenter questioned whether or not a rental car company using a tow dolly behind a pickup truck is required to register as a motor carrier. The commenter also questioned whether or not for hire operators of multi-car trailers moving new vehicles would be required to register as motor carriers. Response: A rental car agency would be required to register a pickup, equipped as its regular equipment with a mechanical device as described by statute, when primarily used to relocate automobiles. A for-hire transporter utilizing a multi-car trailer to move new vehicles would continue to be required to register. Section 18.2 will not be changed. SUBCHAPTER A. General Provisions 43 TAC sec.18.2 STATUTORY AUTHORITY The amendment is adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapter 643, which authorizes the department to carry out the provisions of those laws governing the registration of motor carriers, and Texas Civil Statutes, Article 6687-9a, which authorizes the department to carry out the provisions of those laws governing the licensing of vehicle storage facilities. sec.18.2. Definitions. The following words and terms, when used in this chapter shall have the following meanings, unless the context clearly indicates otherwise. (1) Advertisement - Any communication to the public in connection with an offer or sale of intrastate transportation service, except for a single-line listing of a carrier name, address, and telephone number in a directory or similar classification. (2) Approved association - A group of household goods carriers, or its agents, or both, which has an approved collective ratemaking agreement on file with the department pursuant to sec.18.52 of this title (relating to Rates). (3) Arbitration - A forum in which each party and counsel for that party present their position before an impartial third party, who renders a specific award. The award is not binding on either party and serves only as a basis for the parties' further settlement negotiations. (4) Audit - A review of records and source documents of a registrant to determine its compliance with the requirements of subchapter E of this chapter (relating to Enforcement). (5) Certificate of convenience and necessity - A certificate issued by the Railroad Commission of Texas under Chapter 270, Acts of the 40th Legislature, Regular Session, 1927, or Chapter 314, Acts of the 41st Legislature, Regular Session, 1929, granting the right to operate in the carriage of persons or goods for hire in intrastate traffic. (6) Certificate of insurance - A certificate prescribed by and filed with the department, in which an insurance carrier or surety company warrants that a motor carrier for whom the certificate is filed has the minimum coverage as required by sec.18.16 of this title (relating to Insurance Requirements). (7) Certificate of registration - A certificate issued by the department to a motor carrier, containing a unique number. (8) Certified scale - Any scale designed for weighing motor vehicles, including trailers or semitrailers not attached to a tractor, and certified by an authorized scale inspection and licensing authority; a certified scale may also be a platform or warehouse type scale properly inspected and certified. (9) Commercial motor vehicle - (A) Includes: (i) any motor vehicle or combination of vehicles with a gross weight, registered weight, or gross weight rating in excess of 26,000 pounds, which is designed or used for the transportation of cargo in furtherance of any commercial enterprise; (ii) all tow trucks, as that term is defined in this section, regardless of the gross weight rating of the tow truck; (iii) any vehicle, including buses, designed to transport more than 15 passengers, including the driver; (iv) any vehicle used in the transportation of hazardous materials in a quantity requiring placarding under the regulations issued under the federal Hazardous Materials Transportation Act (Title 49, United States Code, App. sec.sec.1801- 1813); and (v) a commercial motor vehicle, as defined by 49 C.F.R. sec.390.5, that is owned or controlled by a person or entity that is domiciled in or a citizen of a country other than the United States. (B) Does not include: (i) a farm vehicle, as defined in this section, with a gross weight, registered weight, and gross weight rating of less than 48,000 pounds; (ii) cotton vehicles registered in accordance with Transportation Code, sec.502.277; (iii) a vehicle registered with the Railroad Commission pursuant to Texas Natural Resources Code, sec.113.131 and sec.116.072; (iv) a vehicle transporting liquor under a private carrier permit issued in accordance with Alcoholic Beverage Code, Chapter 42; (v) a motor vehicle used to transport passengers operated by an entity whose primary function is not the transportation of passengers, such as a vehicle operated by a hotel, day-care center, public or private school, nursing home, governmental entity, or similar organization; and (vi) a motor vehicle registered under the Single State Registration System established under 49 U.S.C. sec.11506(c) when operating exclusively in interstate or international commerce. (10) Commission - The Texas Transportation Commission. (11) Department - Texas Department of Transportation. (12) Director - The director of the Motor Carrier Division, Texas Department of Transportation. (13) Division - The Motor Carrier Division. (14) Farmer - A person who operates a farm or is directly involved in the cultivation of land, crops, or livestock which are owned by that person or are under the direct control of that person. (15) Farm vehicle - Any vehicle or combination of vehicles controlled and/or operated by a farmer or rancher being used to transport agriculture products, farm machinery, and farm supplies to or from a farm or ranch. (16) Gross weight rating - The maximum loaded weight of any combination of truck, tractor, and trailer equipment, as specified by the manufacturer of the equipment. If the manufacturer's rating is unknown, the gross weight rating is the greater of: (A) the actual weight of the equipment and its lading; or (B) the maximum lawful weight of the equipment and its lading. (17) Household goods - Personal effects and property used or to be used in a dwelling when the transportation of such effects and property is: (A) arranged for and paid by the householder, including property moving from a factory, warehouse or store which the householder has purchased with the intent to use in his or her dwelling and which is transported to the dwelling or storage; or (B) arranged for and paid by another party. (18) Household goods agent - A motor carrier who transports household goods on behalf of another motor carrier. (19) Household goods carrier - A motor carrier who transports household goods for compensation or hire in furtherance of a commercial enterprise, except when transporting in furtherance of their primary business which is a non- transportation business. (20) Independent - An individual who is not an employee of a household goods carrier or a shipper and who is not related by blood or marriage to the household goods carrier or the shipper. (21) Interstate Commerce Commission (ICC) - A federal agency which regulates interstate commerce. (22) Insurer - A person, including a surety, authorized in this state to write lines of insurance coverage required by subchapter B of this chapter (relating to Motor Carrier Registration). (23) Leasing business - A person that leases vehicles requiring registration under this subchapter to a motor carrier required to be registered. (24) Manager - The manager of the department's Motor Carrier Division, Compliance and Enforcement Section. (25) Mediation - A forum in which an impartial person, the mediator, facilitates communication between two parties to promote reconciliation, settlement, or understanding among the participants. (26) Motor Carrier - An individual, association, corporation, or other legal entity that controls, operates, or directs the operation of one or more vehicles which transport persons or cargo over a road or highway in this state. (27) Motor transportation broker - A person who sells, offers for sale, or negotiates for the transportation of cargo by a motor carrier operated by another person; or a person who aids and abets a person in performing an activity described in this definition. (28) Multiple user - An individual or business who has a contract with a household goods carrier and who uses the carrier's services more than 10 times within the preceding 12 months. (29) Principal place of business - A single location that serves as the motor carrier's headquarters and where it maintains or can make available its operational records. (30) Public highway - Any publicly owned and maintained street, road, or highway in this state. (31) Reasonable dispatch - The performance of transportation, excluding transportation provided under tariff provisions requiring guaranteed service dates, on the date or during the period of time agreed upon by the carrier and the shipper and shown on the shipment documentation; provided, however, that the defenses of force majeure as construed by the courts shall not be denied the carrier. (32) Registration receipt - A receipt issued to the registrant by its registration state after the requirements of 49, Code of Federal Regulation (CFR), Part 1023 have been met. (33) Registration state - A state where the registrant maintains a valid single state registration as defined in 49 CFR Part 1023. (34) Revocation - The withdrawal of registration and privileges by the department or a registration state. (35) Shipper - A person who is the consignor or consignee of a household goods shipment and is identified as such in the bill of lading contract and owns the goods being transported. (36) Short-term lease - A lease of 30 days or less. (37) Single state registration system - The program established by 49 U.S.C. sec.11506. (38) SOAH - The State Office of Administrative Hearings. (39) State(s) of travel - The state or states in which a motor carrier or carrier operates motor vehicles subject to the single state registration system. (40) Substitute vehicle - A vehicle used as a temporary replacement for a vehicle leased from a leasing business that has been taken out of service due to maintenance, repair, or other unavailability of the vehicle. (41) Suspension - Temporary removal of privileges granted to the registrant by the department or registration state. (42) Tow truck - A motor vehicle equipped with, or used in combination with, a mechanical device used to tow, winch, or otherwise move another vehicle. For the purposes of this chapter, the following motor vehicles are not considered tow trucks: (A) a motor vehicle owned and used exclusively by a governmental entity, including a public school district; (B) a motor vehicle towing: (i) a race car; (ii) a motor vehicle for exhibition; or (iii) an antique motor vehicle; (C) a recreational vehicle towing another vehicle; (D) a motor vehicle used in combination with a tow bar, tow dolly, or other mechanical device that is not operated in the furtherance of a commercial enterprise; or (E) a motor vehicle, controlled and/or operated by a farmer or rancher, towing a farm vehicle. (43) Type A household goods carrier - A household goods carrier who utilizes at least one vehicle or a combination of vehicles with a gross weight, registered weight, or gross weight rating in excess of 26,000 pounds. (44) Type B household goods carrier - A household goods carrier who utilizes exclusively vehicle(s) or combination(s) of vehicles with a gross weight, registered weight, or gross weight rating equal to or less than 26,000 pounds. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808803 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-8630 SUBCHAPTER G. Vehicle Storage Facilities 43 TAC sec.sec.18.80, 18.82, 18.84, 18.88, 18.89, 18.91-18.93 STATUTORY AUTHORITY The amendments are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapter 643, which authorizes the department to carry out the provisions of those laws governing the registration of motor carriers, and Texas Civil Statutes, Article 6687-9a, which authorizes the department to carry out the provisions of those laws governing the licensing of vehicle storage facilities. sec.18.80. Purpose and Scope. Texas Civil Statutes, Article 6687-9a (Vehicle Storage Facility Act), provide that a person may not operate a vehicle storage facility unless the person holds a current license to operate a vehicle storage facility issued by the Texas Department of Transportation. In order to protect all parties from unfair, unreasonable and deceptive practices, this subchapter sets forth the department's commitment to provide procedures and policies under which vehicle storage facility operators and their customers may transact business. The sections under this subchapter describe the procedures by which a person may obtain a license to operate a vehicle storage facility, conditions under which a licensee must operate the facility, and the procedures by which the department will enforce this subchapter. Other laws which may affect the operations of a vehicle storage facility are Transportation Code, Chapters 643 and 683, Property Code, sec.70.003, sec.70.004, and sec.70.006, and the regulations or ordinances of any political subdivision of this State. sec.18.82. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Act - The Vehicle Storage Facility Act, Texas Civil Statutes, Article 6687- 9a, concerning vehicle storage facilities. (2) Affidavit of Right of Possession and Control - A form prescribed by the department and provided by the licensee, to be utilized by an individual certifying right of possession if the licensee is unable to verify the individual's status as an immediate family member. (3) Day - Twenty-four continuous hours. (4) Fence - An enclosure of wood, chain link, iron, concrete, or masonry, placed around an area used to store vehicles and designed to prevent intrusion and escape. (5) Immediate family - An individual's parents, spouse, children, brother, and sister who resides in, or is supported by, the same household. (6) Impoundment - Actions performed on a stored vehicle which consist of the following minimum requirements: (A) using of materials such as plastic or canvas tarpaulins to ensure the preservation of a stored vehicle if doors, windows, convertible tops, hatchbacks, sun roofs, trunks or hoods are broken or inoperative; (B) conducting a written inventory of any unsecured personal property contained in a stored vehicle; (C) removing and storing all unsecured personal property contained in a stored vehicle for which safekeeping is necessary; and (D) obtaining motor vehicle registration information for a specific vehicle from the department's Vehicle Titles and Registration Division, statutory agents or service providers. (7) Main entrance - Initial point where the consumer or service recipient enters the vehicle storage facility. (8) Person - An individual, corporation, organization, business trust, estate, trust, partnership, association, or other legal entity. (9) Principal - An individual who: (A) holds personally, or as a beneficiary of a trust, or by other constructive means: (i) 10% of a corporation's outstanding stock; or (ii) more than $25,000 of the fair market value of a business; (B) has the controlling interest in a business; (C) has a participating interest of more than 10% in the profits, proceeds, or capital gains of a business, regardless of whether the interest is direct or indirect, is through share, stock, or any other manner, or includes voting rights; (D) is a member of the board of directors or other governing body of a business; or (E) serves as an elected officer of a business. (10) Vehicle - A motor vehicle subject to registration under Transportation Code, Chapter 501, or any other device designed to be self-propelled or transported on a public highway. (11) Vehicle owner - A person: (A) in whose name the vehicle is registered under the Certificate of Title Act, Transportation Code, Chapter 501; (B) in whose name the vehicle is registered under Transportation Code, Chapter 502 or a member of the person's immediate family; (C) who holds the vehicle through a valid lease agreement; or (D) who is an unrecorded lienholder with a right to possession. (12) Vehicle storage facility (VSF) - A garage, parking lot, or any facility owned or operated by a person other than a governmental entity for storing or parking 10 or more vehicles. Ten or more vehicles shall mean the capacity to park or store 10 or more vehicles per year. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808804 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-8630 43 TAC sec.18.94 The repeal is adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapter 643, which authorizes the department to carry out the provisions of those laws governing the registration of motor carriers, and Texas Civil Statutes, Article 6687-9a, which authorizes the department to carry out the provisions of those laws governing the licensing of vehicle storage facilities. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808802 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-8630 43 TAC sec.sec.18.94-18.96 STATUTORY AUTHORITY The new sections are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapter 643, which authorizes the department to carry out the provisions of those laws governing the registration of motor carriers, and Texas Civil Statutes, Article 6687-9a, which authorizes the department to carry out the provisions of those laws governing the licensing of vehicle storage facilities. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808805 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-8630 CHAPTER 21.Right of Way SUBCHAPTER K.Control of Signs Along Rural Roads 43 TAC sec.sec.21.411, 21.421, 21.451, 21.471, 21.481, 21.521, 21.541, sec.21.542, 21.551, 21.561, 21.572 The Texas Department of Transportation adopts amendments to sec.sec.21.411, 21.421, 21.451, 21.471, 21.481, 21.521, 21.541, 21.551, 21.561, 21.572, and new sec.21.542, concerning the control of signs along rural roads. These sections are adopted without changes to the proposed text as published in the March 13, 1998, issue of the Texas Register (23 TexReg 2792) and will not be republished. EXPLANATION OF ADOPTED AMENDMENTS AND NEW SECTION Transportation Code, Chapter 394 provides the commission and the department with the authority to regulate the erection and maintenance of outdoor advertising signs along rural roads. Senate Bill 370, sec.2.05, 75th Legislature, 1997, amended Chapter 394 to provide an exemption for directional signs no larger than 50 square feet, provided the signs are on private property and advertise a small business. Senate Bill 370, sec.2.06 changed the requirement that a sign may only be permitted within 800 feet of one or more recognized commercial or industrial business activities. The department may now issue permits for off-premise signs located within 800 feet of a recognized commercial or industrial business activity, or alternatively, within 800 feet of the office of a governmental entity. Previous sessions of the Legislature also amended Chapter 394 to restrict when the commission may regulate signs that are located in counties with a population of 2.4 million or more or in a municipality's extraterritorial jurisdiction, and to authorize the commission to impose administrative penalties for a violation of Chapter 394 or commission rule. In order to reflect these statutory changes and to be consistent with Transportation Code, Chapter 394, the Administrative Procedure Act, changing technology in sign erection, and current department policy, the department adopts amendments to the aforementioned sections and adopts new sec.21.542. Section 21.411. To comply with Senate Bill 370, sec.2.05 and to be consistent with the usage of the term "governmental entity" in Chapter 394, this section is amended to add a definition for "governmental entity" and "small business." This section has been changed to number the definitions in accordance with the Texas Register style. Section 21.421. To comply with Senate Bill 370, sec.2.05, this section is amended to add an exemption from regulation for off-premise signs on private property that are no larger than 50 square feet and that advertise the name of a small business and directions to same. To be consistent with usage of the term in Chapter 394, this section is amended to specify that a sign erected by a "governmental entity" is exempt from regulation. To enable more chamber of commerce organizations to erect signs promoting their city or county, this section is also amended to expand the area in which a chamber of commerce organization may place an exempt sign. The amendments would allow those signs to be erected within a county in the case of a county chamber of commerce, and, in the case of a city chamber of commerce, the extraterritorial jurisdiction of that city. The existing rule only allows an exemption if the sign is inside the city limits of the city supported by the chamber of commerce organization. The area inside the city limits is outside the department's jurisdiction under Chapter 394. Additionally, to be consistent with the exempt chamber of commerce signs allowed along interstate and primary highways, and to carry out the legislative intent in Chapter 394 of promoting the safety and welfare of the traveling public by preserving and enhancing scenic beauty, chamber of commerce signs are limited in size to no more than 150 square feet. To comply with Transportation Code, sec.394.061(b), sec.21.421(c) is amended by changing the population criteria for "populous" counties from 1.7 million to 2.4 million, and by specifying that this subchapter is subject to regulatory preemption in these counties. To comply with Local Government Code, sec.216.902, sec.21.421(d) is amended to more accurately reflect the department's regulatory authority inside a municipality's extraterritorial jurisdiction and to specify that a municipality has the authority to decide whether the department may control signs in its extraterritorial jurisdiction. Finally, to comply with Transportation Code, sec.394.063, new sec.21.421(e) was added to exempt certain on-premise signs located in the unincorporated area of a county with a population of more than 2.4 million or in a county that borders a county with that population. Section 21.451. To comply with Senate Bill 370, sec.2.06, this section is amended by deleting the requirement that a sign be located within 800 feet of two adjacent recognized commercial activities in order to be permitted. This section will now allow a sign to be permitted within 800 feet of a recognized commercial or industrial activity, or alternatively, within 800 feet of the office of a governmental entity. Section 21.471. To allow for the use of changing technology while protecting the safety of the traveling public, this section is amended by adding new sec.21.471(f) to allow the use of tri-vision, changeable message signs, provided that the messages change within one second and stay stationary for at least 10 seconds. The limitation on the frequency of the change was based on the concern that there could be an undue distraction to the public if the message changes too frequently. Similar limitations have been imposed in other states. Section 21.481. To comply with Transportation Code, sec.394.046, this section is amended by adding new sec.21.481(b), which specifies that each face area of a double-faced, back-to-back, or V-type sign is considered to be a separate sign for the purpose of computing the face area of a sign. Section 21.521. This section is amended to reflect the reorganization of the department and to update department titles. Section 21.541. This section is also amended to reflect the reorganization of the department and to update department titles. Additionally, to be consistent with the requirements of the Administrative Procedure Act, Government Code, Chapter 2001, and with sec.21.572, this section is amended by deleting sec.21.541(b), which provided an appeal procedure for a person whose permit is revoked. Section 21.542. To comply with Transportation Code, sec.394.082, new sec.21.542 is proposed to specify that the commission may impose administrative penalties for a violation of the provisions of Chapter 394 or a commission rule implementing that chapter. Section 21.551. To allow for the use of tri-vision technology, sec.21.551(b) was amended to delete the prohibition against using intermittent messages in a sign. Section 21.561. To ensure that all signs erected along rural roads comply with Chapter 394 and department rules, sec.21.561(a)(3) was added to state that a sign must be removed if a permit is revoked in accordance with sec.21.541. To ensure the department does not take an action which might be considered to be a taking of private property, sec.21.561(b) has been deleted. That subsection provides that when a sign becomes non-conforming due to the cessation of a business activity for a period of six months, the sign will be removed at the owner's expense within the following six months. The department has never required the removal of a sign under these circumstances. Section 21.572. To comply with the Administrative Procedure Act and sec.21.542, this section is amended by specifying that notice and opportunity for a hearing must be provided before the department may impose administrative penalties. Additionally, the term "cancellation" has been replaced with the term "revocation" to be consistent with the language used in other sections of this subchapter. Finally, the term "or registration" was removed from this section as Chapter 394 does not authorize the commission to cancel or revoke a sign registration. RESPONSE TO COMMENTS A public meeting was held on March 24, 1998, and no comments were received on the proposed amendments or new section. STATUTORY AUTHORITY The amendments and new section are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and, more specifically, Transportation Code, Chapter 394, which authorizes the commission to adopt rules to regulate the erection or maintenance of signs along rural roads. 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. Filed with the Office of the Secretary of State on June 1, 1998. TRD-9808806 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: June 21, 1998 Proposal publication date: March 23, 1998 For further information, please call: (512) 463-8630