TITLE 30.ENVIRONMENTAL QUALITY

Part 1. TEXAS NATURAL RESOURCE CONSERVATION COMMISSION

Chapter 25. ENVIRONMENTAL TESTING LABORATORY ACCREDITATION AND CERTIFICATION

The Texas Natural Resource Conservation Commission (commission) proposes new Chapter 25, Accreditation of Environmental Testing Laboratories, Subchapter A, Environmental Testing Laboratory Accreditation and Certification, §§25.1, 25.2, 25.4, 25.6, and 25.8; Subchapter B, Environmental Testing Laboratory Accreditation, §§25.9, 25.10, 25.12, 25.14, 25.16, 25.18, 25.20, 25.22, 25.24, 25.26, 25.30, 25.32, 25.34, 25.36, and 25.38; and Subchapter C, Environmental Testing Laboratory Certification, §§25.50, 25.52, 25.54, 25.56, 25.58, 25.60, 25.62, 25.64, 25.66, 25.68, 25.70, 25.74, 25.76, and 25.78.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

Commercial, governmental, industrial, and other environmental testing laboratories located inside and outside of Texas analyze thousands of environmental samples each year. The results of these analyses are used by the commission to make permitting, compliance, enforcement, cleanup, and other decisions.

The environmental testing laboratory accreditation program was transferred from the Texas Department of Health (TDH) to the commission as part of House Bill (HB) 2912, 77th Legislature, 2001. Oversight of environmental testing laboratories has been limited to the TDH's formal certification of laboratories analyzing drinking water samples, inspections by the executive director that may have occurred as part of a larger permit compliance inspection, and inspections performed as part of the commission's limited laboratory inspection program. TDH had also developed rules for a voluntary laboratory accreditation program for laboratories analyzing wastewater samples, but had not yet implemented the program.

The Sunset Advisory Commission noted the commission's reliance on environmental data in its decision-making, the limited oversight of environmental laboratories producing the data, and other issues in its staff report concerning the commission. Highlighted as Issue 5, the report included the following key findings: "1) Oversight of environmental labs providing data to the State is inconsistent and divided between agencies; 2) Unregulated, unaccredited labs are more likely to produce inaccurate data for agency decision making, resulting in increased risk to public health and the environment, and increased agency costs; and 3) Uniform standards provided by a national accreditation program would allow Texas labs to effectively compete with accredited labs in other states." (Sunset Advisory Commission Staff Report, Texas Natural Resource Conservation Commission, 2000, page 49.)

The report went on to make several recommendations, including that: 1) the commission be required to implement a voluntary environmental laboratory accreditation program consistent with national standards; 2) the Drinking Water Laboratory Certification Program be transferred from TDH to the commission; 3) the commission be required to accept only data or analyses from accredited laboratories for all decisions affecting permitting, compliance, enforcement, and corrective action; and 4) on-site or in-house labs be exempt from accreditation. With these recommendations, the Sunset Advisory Commission stated in its report that, "This should increase the confidence in agency decision making, provide greater assurance of protecting public health, and minimize unnecessary costs for the agency." (Sunset Advisory Commission Staff Report, Texas Natural Resource Conservation Commission, 2000, page 54.)

In 2001, the 77th Texas Legislature passed HB 2912, §1.12, which amended Texas Water Code (TWC) by adding new §5.127. This section requires that all data used by the commission for commission decisions regarding permits or other authorizations, compliance matters, enforcement actions, or corrective actions be from an accredited environmental testing laboratory, unless the environmental testing laboratory is: an in-house or on-site environmental testing laboratory periodically inspected by the commission; accredited under federal law; or providing data and analysis for emergency response activities and required data and analysis are not available from an accredited environmental testing laboratory. New §5.127 also allows the commission to require that data used in other commission decisions be obtained from an accredited environmental testing laboratory and requires the commission to periodically inspect unaccredited in-house or on-site environmental testing laboratories providing data for commission decisions.

The Legislature also passed HB 2912, Article 6, which transferred Texas Health and Safety Code (THSC), Chapter 421, to TWC, Chapter 5, redesignating Chapter 421 as Subchapter R, §§5.801 - 5.807 and amending it to revise the definitions and numbering. Subchapter R transferred authority for environmental laboratory accreditation and drinking water certification from TDH to the commission and requires that the state's environmental testing laboratory accreditation program be consistent with the National Environmental Laboratory Accreditation Conference (NELAC). Subchapter R also created a special account for accreditation and certification fees.

TWC, §5.802 requires that the environmental testing laboratory accreditation program be consistent with NELAC standards. The commission is adopting by reference the NELAC standards approved by NELAC in May 2001. This document is available on-line at www.epa.gov/ttnnela1/2001standards.html or may be viewed in the library at the commission's central office at 12100 Park 35 Circle in Austin. Accredited environmental testing laboratories as well as those seeking accreditation must comply with all NELAC standards; however, for clarity and usability the commission has included only portions of the standards in the proposed rules.

Additionally, HB 2912, §18.02 transferred the Safe Drinking Water Certification Program from the TDH to the commission, effective September 1, 2001. The commission is currently operating the drinking water laboratory certification program according to the rules adopted by the TDH.

Finally, HB 2912, §18.03 transferred the Environmental Testing Laboratory Certification Program, including existing authority, accreditation, appropriations, rules, equipment, and personnel involved in lab accreditation from TDH to the commission, effective September 1, 2001. As required by HB 2912, §18.03(d), accreditation requirements relating to data provided for commission decisions take effect three years after the commission publishes notice in the Texas Register that the agency's accreditation program has met NELAC standards. Until that date, environmental testing laboratories that analyze samples for compliance with the Safe Drinking Water Act (SDWA) must continue to be certified according to Chapter 25. After that date, laboratories that analyze samples for compliance with the SDWA must be accredited according to Chapter 25, and the executive director, as authorized by the commisson's rules, will no longer grant certifications. To ease the transition from the environmental testing laboratory certification program to the environmental testing laboratory accreditation program, Subchapter C is as similar to Subchapter B as possible.

The proposed rules are necessary for the implementation and administration of HB 2912, §§1.12, 6.01, 18.02, and 18.03. Proposed new Chapter 25 will establish an accreditation program for environmental testing laboratories providing data for commission decisions for all media and continue the existing environmental laboratory certification program for laboratories providing data to the commission for decisions relating to compliance with the SDWA. The proposed accreditation and certification programs include analyses and tests performed by environmental testing laboratories but do not include field measurements, source air emission measurements, or the use of continuous analysis devices outside of a laboratory. The commission will monitor NELAC's development of field activity standards, and may include accreditation standards for field measurements at a later date.

SECTION BY SECTION DISCUSSION

The title of this chapter is Environmental Testing Laboratory Accreditation and Certification.

Subchapter A, General Provisions

Proposed new §25.1, Purpose, describes the purpose of Chapter 25 and states that while accreditation of an environmental laboratory is voluntary, the commission will only accept data for a commission decision from an accredited laboratory, except as provided in new §25.6. This subsection also states the accreditation program will become effective three years after notice is published that the program has met NELAC requirements. During the three-year period, laboratories that supply data for commission decisions relating to the SDWA must be certified. After the three-year period, all data and analyses referenced in new §25.4(b) and (c) must be provided by accredited laboratories.

Proposed new §25.2, Definitions, defines words and terms as used in this chapter.

Accreditation is defined as an authorization granted by the executive director to an environmental testing laboratory that meets requirements of Subchapters A and B. The definition clarifies one of the two authorizations granted by the executive director according to Chapter 25.

Accrediting authority is defined as an agency recognized by the National Environmental Laboratory Accreditation Program that grants accreditation on behalf of a state, territory, or federal agency. The definition, with changes to simplify the language of the definition, is from NELAC, §1A, Glossary, and is incorporated in this rule.

Analyte is defined as a constituent for which an environmental sample is analyzed. The definition clarifies one element of the fields of accreditation and fields of certification.

Certification is defined as an authorization granted by the executive director to an environmental testing laboratory which analyzes drinking water and meets requirements of Subchapters A and C. The definition clarifies one of the two authorizations granted by the executive director according to Chapter 25.

Environmental testing laboratory is defined as a scientific laboratory that performs analyses to determine the chemical, molecular, or pathogenic components of environmental media for regulatory compliance. The definition is from TWC, §5.801, and is incorporated in the rule.

Environmental testing laboratory assessment is defined as the process used by an accrediting or certifying authority to measure the performance, effectiveness, and conformity of an environmental testing laboratory to the accreditation or certification standards and this chapter. An environmental testing laboratory assessment may include a physical inspection of a laboratory and its operations. The definition clarifies the components of an environmental testing laboratory inspection.

Fields of accreditation is defined as the matrix, technology, method, and analyte or analyte group for which an environmental testing laboratory may be accredited. The definition clarifies the types of accreditations the executive director will offer.

Fields of certification is defined as the methods and analytes for which an environmental testing laboratory may be certified. The methods and analytes are used in a commission decision relating to compliance with the SDWA. The definition clarifies the types of certifications the executive director will offer.

In-house environmental testing laboratory is defined as an environmental testing laboratory that provides analytical data to its operator for a commission decision relating to permits or other authorizations issued to the laboratory's operator; compliance matters and enforcement actions taken concerning the laboratory's operator; or corrective actions taken by the laboratory's operator to satisfy statutes, rules, or commission orders. This definition, which clarifies that an in-house environmental testing laboratory is a specific type of environmental testing laboratory, implements TWC, §5.127(b).

Laboratory personnel is defined as individuals who manage, perform, maintain, or verify the work or the quality of the work at the environmental testing laboratory. The definition clarifies who must perform certain activities prescribed in Chapter 25.

Matrix is defined as sample type, including drinking water; nonpotable water; solid and chemical materials; air and emissions; and biological tissue. The definition clarifies one element of the fields of accreditation.

Mobile environmental testing laboratory is defined as an environmental testing laboratory capable of being moved from one site to another site. The definition clarifies a type of laboratory that may be accredited according to Chapter 25.

National Environmental Laboratory Accreditation Conference (NELAC) is defined as the voluntary organization of state, territorial, and federal environmental officials and interest groups whose primary purpose is to establish mutually acceptable national standards for accrediting environmental testing laboratories. The definition, with changes to simplify the language of the definition, is from NELAC, §1A, Glossary, and is incorporated in this rule.

National Environmental Laboratory Accreditation Program (NELAP) is defined as the environmental testing laboratory accreditation program including NELAC. The definition, with changes to simplify the language of the definition, is from NELAC, §1A, Glossary, and is incorporated in this rule.

On-site environmental testing laboratory is defined as an in-house environmental testing laboratory that is located at a regulated entity. This definition, which clarifies a type of environmental testing laboratory, implements TWC, §5.127(b).

Operator is defined as an individual authorized to act on behalf of the environmental testing laboratory. This definition clarifies who is responsible for acting on behalf of an environmental testing laboratory.

Primary accreditation is defined as accreditation of an environmental testing laboratory according to NELAC standards and the requirements of this chapter. This definition distinguishes a primary accreditation from a secondary accreditation.

Proficiency test sample is defined as a sample, the composition of which is unknown by an environmental testing laboratory or the individual performing the analysis. The sample is used to evaluate whether the laboratory and analyst can produce results within specified acceptance criteria. This definition, with changes to simplify the language of the definition, is from NELAC, §1A, Glossary, and is incorporated into this rule.

Quality system is defined as a structured and documented management system describing the policies, objectives, principles, organizational authority, responsibilities, accountability, and implementation plan of an organization for ensuring the quality of its work processes, products, and services. The quality system provides the framework for planning, implementing, and assessing work performed by the environmental testing laboratory for quality assurance and quality control. This definition is from NELAC, §1A, Glossary, and is incorporated in this rule.

Secondary accreditation is defined as accreditation granted by the executive director to an environmental testing laboratory that has been granted primary accreditation by another NELAP accrediting authority. This definition distinguishes secondary accreditation from primary accreditation.

In proposed new §25.4, Applicability, subsections (a) - (d) allow an environmental testing laboratory to apply for accreditation after the commission publishes notice in the Texas Register that the accreditation program has met NELAC standards. These subsections require that an environmental testing laboratory that provides data used by the commission to make a decision relating to a permit, authorization, compliance action, enforcement action, corrective action, characterization of an environmental process or condition, or an assessment of an environmental process or condition become accredited no later than three years after the commission publishes notice in the Texas Register that the accreditation program has met NELAC standards except as provided in new §25.6. Further, these subsections require that an in-house environmental testing laboratory be accredited if it provides analytical data to a third party and the data are used by the commission to make a decision relating to a permit, authorization, compliance action, enforcement action, corrective action, characterization of an environmental process or condition, or an assessment of an environmental process or condition. These subsections implement TWC, §5.127(a) - (c) and §5.802, and HB 2912, §18.03.

Subsection (e) requires an environmental testing laboratory that provides data relating to the SDWA be accredited or certified by the agency or certified by the United States Environmental Protection Agency (EPA) until the commission publishes notice in the Texas Register that the accreditation program has met NELAC standards. This subsection continues existing requirements contained in 30 TAC Chapter 290.

Subsection (f) provides that three years after the commission publishes notice in the Texas Register that the accreditation program has met NELAC standards, the agency's drinking water certification program will be eliminated and all environmental testing laboratories that provide data relating to the SDWA will have to be accredited by the agency or certified by EPA. The commission has determined that once the environmental testing laboratory accreditation program is implemented it will be easier and more cost-effective to have only one environmental testing laboratory program. An environmental testing laboratory may obtain accreditation for each field of certification it has under the environmental testing laboratory certification program. This subsection implements HB 2912, §18.03(d).

Proposed new §25.6, Conditions Under Which the Commission May Accept Analytical Data, states the commission may accept data from: 1) an unaccredited on-site or in-house environmental laboratory that is regulated according to the terms of a permit, registration, or other authorization issued by the commission to the operator of the laboratory and that is inspected at least every three years by the executive director; 2) an environmental testing laboratory accredited under federal law; 3) a laboratory that provides analytical data necessary for emergency response activities and the required analytical data are not otherwise available from a laboratory accredited according to Chapter 25; or 4) a laboratory that provides a type of analytical data for which the agency does not offer accreditation. This section implements TWC, §5.127.

Proposed new §25.8, Contracting, provides the executive director with the authority to contract for services related to Chapter 25, and allows the executive director to authorize contractors to collect fees for these services. The commission determined this section is necessary to efficiently implement this chapter.

Subchapter B, Environmental Testing Laboratory Accreditation

Proposed new §25.9, Standards for Environmental Testing Laboratory Accreditation, provides that accreditation will be based on the environmental testing laboratory's conformance to NELAC standards and the requirements of this chapter. This section implements TWC, §5.802.

In proposed new §25.10, Fields of Accreditation, subsection (a) requires the executive director to identify fields of accreditation offered by the agency and make a list of this information available to the public through the commission's website and Compliance Support Division and Agency Communications. The website address is http://www.tnrcc.state.tx.us/enforcement/csd/qa . The phone number for the Compliance Support Division is (512) 239-6300. The phone number for Agency Communications is (512) 239- 0028. This information will be available after the commission receives approval as a NELAC accrediting authority. This subsection follows NELAC's structure of accrediting an environmental testing laboratory by matrix, technology, method, and analyte or analyte group, and thus is included in this rule to make this rule consistent with NELAC, which is required by TWC, §5.802. Additionally, this section informs the public and environmental testing laboratories where a current list of the fields of accreditation available to environmental testing laboratories can be found. Subsection (b) allows the executive director to change fields of accreditation offered by the agency after 30 days' notice on the agency website. This provision allows the executive director to modify the fields of accreditation as technology changes and as the law changes without requiring a rule change. It would take substantially longer than 30 days to amend the rule each time a new field of accreditation was offered, or the analyte list changed on one of the multi-analyte lists, and it is important that the executive director be able to make changes to the fields of accreditation quickly to account for changes in analytical capabilities, as well as changes in the law. Additionally, this section provides a way to inform environmental testing laboratories of changes to fields of accreditation in a timely manner.

In proposed new §25.12, Initial Application for Accreditation, subsection (a) requires that an application for accreditation be filed using a form provided by the executive director. The proposed rule also requires an applicant to submit any required or requested documents and records and the fee provided in new §25.30 with the application. This subsection implements TWC, §5.803. Subsection (b) allows an operator of an environmental laboratory to request that noncontiguous facilities and mobile laboratories be accredited as a single entity if they operate under the same ownership, day-to-day management, day-to-day technical direction, and quality system, including document management, records management, and test reporting. The commission determined it is appropriate to accredit noncontiguous facilities and mobile laboratories as a single entity if the environmental testing laboratory meets the listed requirements because the goal of NELAC is to promote uniform standards of quality. This objective will be met by allowing environmental testing laboratories with more than one location, whether fixed or mobile, to obtain a single accreditation. Subsection (c) allows an operator of an environmental laboratory to submit an application for accreditation or an application to increase the laboratory's fields of accreditation at any time. The commission anticipates that environmental testing laboratories will continuously evaluate the fields of accreditation that they want to pursue. The executive director determined it is appropriate to allow environmental testing laboratories to modify their fields of accreditation at any time so that the environmental testing laboratories can pursue various types of analytical work.

Proposed new §25.14, Term of Accreditation, establishes a one-year term of accreditation. Additionally, this section authorizes the executive director to grant interim accreditation for up to one year in order to schedule an environmental testing laboratory assessment. This section implements NELAC, §4.2, Period of Accreditation, and §4.5.1, Interim Accreditation.

In proposed new §25.16, Renewal Application for Accreditation, subsection (a) provides that the executive director must receive an environmental testing laboratory's renewal application and applicable fees no later than the expiration date of a laboratory's accreditation. The commission has determined that it is important to provide environmental testing laboratories with a definite deadline for renewal applications. Subsection (b) provides that, if a renewal application is received after the expiration date of the laboratory's accreditation, the laboratory must apply for and meet all requirements for a new accreditation, including an environmental testing laboratory assessment. The commission has determined that it is important to provide environmental testing laboratories with a definite deadline for renewal applications. Finally, subsection (c) requires that modifications made during the term of an accreditation to increase a laboratory's fields of accreditation be renewed on the accreditation renewal date, regardless of the date of the modifications. The commission has determined that it is appropriate to have all of an environmental testing laboratory's fields of accreditation expire on the same date because it will simplify the recordkeeping requirements for both the environmental testing laboratory and the executive director, thus, reducing the risk that an environmental testing laboratory will fail to renew a specific field of accreditation in a timely manner.

In proposed new §25.18, Environmental Testing Laboratory Assessments, subsection (a) requires an environmental testing laboratory assessment before the executive director grants an environmental testing laboratory's initial accreditation and at least every two years after accreditation is granted. This provision implements NELAC, §3.3.1, Frequency and Types of On-Site Assessments. Subsection (b) authorizes the executive director to perform either announced or unannounced assessments. This provision implements NELAC, §3.3.4, Announced and Unannounced Visits.

In proposed new §25.20, Proficiency Test Sample Analysis, subsection (a) requires environmental testing laboratory personnel to periodically analyze proficiency test samples before accreditation is granted. For initial accreditation, the proposed rule requires the operator of an environmental testing laboratory to ensure that two proficiency test samples are successfully analyzed according to NELAC standards. This section implements NELAC, §2.4.1, Required Level of Participation; §2.7.2, Initial or Continuing PT Studies; and §4.14, Proficiency Test Samples. For environmental testing laboratories seeking ongoing accreditation, subsection (b) requires the operator of an environmental testing laboratory to ensure that two proficiency test samples per year for each field of accreditation are analyzed according to NELAC standards. If a laboratory does not meet requirements for ongoing analyses of proficiency test samples, the proposed rule allows a laboratory to participate in supplemental proficiency test studies according to NELAC standards. This subsection implements NELAC, §2.4.1, Required Level of Participation; §2.7.3.1, Supplemental PT Studies for Demonstrating Corrective Action; §2.7.2, Initial or Continuing PT Studies; and §2.7.3, Supplemental PT Studies. Additionally, this subsection would require the executive director to determine a laboratory's accreditation status within 60 days if the laboratory does not successfully analyze proficiency test samples as required. This subsection implements NELAC, §2.7.5, Second Failed Study. Finally, subsection (c) requires laboratories to purchase proficiency test samples, if available, from NELAP-designated vendors. This subsection implements NELAC, §2.4.1, Required Levels of Participation and §4.1.4, Proficiency Testing Samples.

In proposed new §25.22, Secondary Accreditation of Out-of-State Environmental Testing Laboratories, subsection (a) requires the executive director to grant or renew the accreditation of an environmental testing laboratory that is located in another state and that is accredited by a NELAP- approved accrediting authority, other than Texas, within 30 days after receiving the laboratory's completed application and fee, if the laboratory is accredited for the requested fields of accreditation. This subsection implements TWC, §5.804. Subsection (b) requires the executive director to notify the laboratory in writing within 30 days of the executive director's decision to grant or deny the accreditation. This subsection implements TWC, §5.804 and NELAC, §1.5.3. The commission has determined that subsection (b) should be included in the rule to specify how much time the executive director has to evaluate an out-of-state environmental testing laboratory's accreditation. This subsection also assures out-of-state laboratories that the executive director will act on their applications in a timely manner.

Proposed new §25.24, Duties and Responsibilities of Accredited Laboratories, establishes duties and responsibilities of an environmental testing laboratory accepting accreditation. The duties and responsibilities include providing reasonable access to the executive director to the laboratory and its facilities, personnel, documents, records, data, analyses, and operations; using and displaying the accreditation certificate according to the NELAC standards; and operating the laboratory and maintaining the laboratory's accreditation according to NELAC standards and the proposed rules. This section implements TWC, §5.805 and NELAC, §3.5, Assessment Procedures; §4.3, Maintaining Accreditation; §4.6, Awarding of Accreditation; and §4.6.1, Use of NELAC Accreditation by Accredited Laboratories.

Proposed new §25.26, Withdrawal from Accreditation Program, allows an environmental testing laboratory to withdraw from the accreditation program in whole or in part at any time by notifying the executive director in writing. This section implements NELAC, §4.4.4, Voluntary Withdrawal. The NELAC standard requires written notification no later than 30 days before the expiration of an environmental testing laboratory's accreditation. The proposed rule is less restrictive because the commission intends to allow an environmental testing laboratory to withdraw from the accreditation program in whole or in part at any time.

Proposed new §25.30, Accreditation Fees, requires accreditation fees to cover program costs and establishes a new fee structure for the program. Subsection (b) requires an environmental testing laboratory applying for accreditation to pay an annual administrative fee of $500 for primary accreditation and annual category fees. Subsection (c) requires an environmental testing laboratory applying for secondary accreditation to pay an annual administrative fee of $250 and annual category fees. Category fees are based on the types of analyses a laboratory performs for which the environmental testing laboratory is seeking accreditation. Subsections (d) - (h) include 51 categories of analysis, including categories related to drinking water; non-potable water; biologic tissue; solid and chemical materials; and air. Subsection (i) requires the operator of an environmental testing laboratory located in another state and applying for primary accreditation to pay a fee equal to the reasonable travel costs associated with conducting an assessment at the laboratory. Subsection (j) allows fees for accreditation modifications, replacement of accreditation certificates, and reinstatement of a suspended accreditation. All fees will be nonrefundable.

The proposed accreditation fees were developed to produce enough revenue to recover the cost of the accreditation program, as required by TWC, §5.803(b). Annual program costs were estimated using standard employee salary rates and estimates of staffing requirements, training, travel, supply, and other costs. Annual program revenues were calculated using estimates of the number of laboratories that will become accredited and the types of analyses these laboratories will perform.

The number of laboratories that will become accredited is not known. Staff estimates 200 in-state laboratories will receive accreditation. This number is based on staff's experience inspecting commercial laboratories over the past several years.

The fields of accreditation for which these laboratories will seek accreditation is also not known. Therefore, staff estimates the types of analyses and proportion of the estimated 200 laboratories performing these types of analyses. The estimates are also based on staff's experience inspecting commercial laboratories over the past several years.

The proposed fees include categories based on sample matrix and types of analyses. The matrices correspond to the matrices used by NELAC for fields of accreditation. The types of analyses reflect groups of analytical techniques and technology staff have encountered inspecting commercial laboratories over the past several years.

The categories are weighted to reflect their relative complexity, difficulty and time required for environmental testing laboratory inspection, and numbers of analyses. The relative complexity, difficulty and time required for the inspection, and numbers of analyses were based on the agency's regulatory programs and staff's experience inspecting commercial laboratories over the past several years. Each category weight was multiplied by a constant dollar amount to arrive at the annual category fee. The constant dollar amount was assigned to produce enough revenue to recover the cost of the accreditation program, as required by TWC, §5.803(b).

In addition to category fees, the proposed accreditation fees include an annual administrative fee. The administrative fee was assigned to produce, with the category fees, enough revenue to recover the cost of the accreditation program. A lower annual administrative fee was assigned for laboratories seeking secondary accreditation. The lower fee reflects the commission's judgment that secondary accreditation costs should be somewhat lower than costs for awarding primary accreditations, because the executive director's staff will not be required to conduct an environmental testing laboratory assessment.

The proposed accreditation fees include a fee equal to the reasonable travel costs (including transportation, lodging, per diem, and any telephone charges) associated with conducting an assessment at an out-of-state laboratory. The fee ensures the agency will recover out-of-state travel costs that arise from inspections of laboratories located in other states.

The proposed accreditation fees also include fees for adding one or more fields of accreditation; replacing an accreditation certificate; recording an ownership change; processing a late renewal; and reinstating a suspended accreditation. These fees were assigned to ensure the agency receives revenue from activities outside of the routine accreditation process.

In proposed new §25.32, Denial of Accreditation Application, subsection (a) allows the executive director to deny an initial or renewal application for insufficiency. An application may be determined to be insufficient if laboratory personnel fail to submit a completed application; fail to submit the required fees; fail to successfully analyze and report proficiency test samples; fail to implement a quality system; fail to document that laboratory personnel meet education, training, and experience requirements; fail to allow entry during normal business hours for an assessment; fail to pass required environmental testing laboratory assessments; fail to submit a report identifying action the environmental testing laboratory will take to correct deficiencies in the assessment report within 30 days of receiving an assessment report; or fail to implement actions to correct the deficiencies identified in the assessment report as identified by the executive director. This subsection provides consistency with other program areas. Subsection (b) allows the commission to deny an applicant's initial or renewal application for accreditation for cause after notice and an opportunity for a hearing if the laboratory personnel misrepresent any fact pertinent to receiving or maintaining accreditation or the laboratory or its operator is indebted to the state for a fee, penalty, or tax imposed by the statute or any other reason which causes the executive director to determine that quality of the data being produced by the laboratory's personnel is unreliable or inaccurate, based on the facts of the case. This subsection provides consistency with other program areas. Finally, subsection (c) requires an environmental testing laboratory to wait at least six months before reapplying for accreditation if the laboratory was unsuccessful in correcting deficiencies and the laboratory's application is denied. If an application is denied for cause, the environmental testing laboratory must wait six months from the date of the commission's final decision to reapply. The purpose of the six-month period is to allow an environmental testing laboratory sufficient time to correct deficiencies and prepare a new application for accreditation. This section implements NELAC, §4.4.1, Denial.

In proposed new §25.34, Suspension of Accreditation, subsection (a) allows the commission to suspend an environmental laboratory's accreditation in whole or in part for up to six months after notice and opportunity for hearing according to 30 TAC Chapter 80. Reasons for suspension include: failure to maintain a quality system; failure to comply with minimum performance and quality assurance standards; failure to maintain records of the laboratory's personnel, operations, data, or analyses; failure to successfully complete required proficiency tests; failure to employ staff that meet required personnel qualifications for education, training, and experience; and failure to notify the executive director of changes in accreditation criteria. Subsection (b) requires the executive director to reinstate an environmental testing laboratory's accreditation if the laboratory effectively corrects and takes steps to prevent a recurrence of the deficiencies that led to a suspension; complies with requirements imposed by the executive director or the commission; and submits an acceptable application for reinstatement.

In proposed new §25.36, Revocation of Accreditation, subsection (a) allows the commission to revoke an environmental testing laboratory's accreditation after notice and opportunity for hearing according to Chapter 80. This section implements TWC, §5.807. Subsection (b) requires the commission to revoke applicable parts of a laboratory's accreditation for certain deficiencies related to unsuccessful analyses of proficiency test samples. This section implements TWC, §5.807 and NELAC, §4.4.3, Revocation. Subsection (c) requires an environmental testing laboratory to wait at least one year after revocation before reapplying for accreditation and requires an environmental testing laboratory whose accreditation was revoked to meet all requirements for a new accreditation, including an environmental testing laboratory assessment.

In proposed new §25.38, Accreditation Advisory Committee, subsection (a) requires the executive director to establish an advisory committee to help interpret NELAC standards and to advise the executive director and the commission on technical matters relating to the operation of the accreditation program. Subsection (b) requires that the committee abide by TWC, §5.107 and 30 TAC Chapter 5. This section provides the executive director with the ability to consult with outside groups to improve the environmental testing laboratory accreditation program. This section implements NELAC, §6.2(g).

Subchapter C, Environmental Testing Laboratory Certification

Proposed new §25.50, Standards for Environmental Testing Laboratory Certification, requires conformity with the Manual for the Certification of Laboratories Analyzing Drinking Water , Fourth Edition, EPA 815-B-97-001, March 1997; and the Lab Cert Manual Errata , Labcert Bulletin, EPA-815-N-99-002a, April 1999, published by the EPA, and requirements contained in Chapter 25, as the basis for certifying an environmental testing laboratory's capability to analyze samples for compliance with the SDWA. This section continues the Safe Drinking Water Certification Program as it was administered by TDH.

In proposed new §25.52, Fields of Certification, subsection (a) requires the executive director to identify fields of certification that are offered by the agency and make a list of this information available to the public through the agency's website and Compliance Support Division and Agency Communications. The website address is http://www.tnrcc.state.tx.us/enforcement/csd/qa . The phone number for the Compliance Support Division is (512) 239-6300 and the phone number for Agency Communications is (512) 239- 0028. This information will be available upon the effective date of these rules. Subsection (b) allows the executive director to change fields of certification offered by the agency after 30 days' notice on the agency website. This provision allows the executive director to modify the fields of certification if the commission changes the requirements for the Safe Drinking Water Certification Program.

In proposed new §25.54, Initial Application for Certification, subsection (a) requires that an application for certification be filed using a form provided by the executive director. The proposed rule also requires an applicant to submit any required or requested documents and records and the fee provided in §25.70 with the application. This section implements TWC, §5.803 and provides consistency with §25.12. Subsection (b) allows an operator of an environmental laboratory to request that noncontiguous facilities be certified as a single entity if they operate under the same ownership, day-to-day management, day-to-day technical direction, and quality system, including document management, records management, and test reporting. The commission determined it is appropriate to accredit noncontiguous facilities as a single entity if the environmental testing laboratory meets the listed requirements to promote uniform standards of quality. This objective will be met by allowing environmental testing laboratories with more than one location to obtain a single accreditation. Subsection (c) allows an operator of an environmental laboratory to submit an application for certification or an application to increase the laboratory's fields of certification at any time. The commission anticipates that environmental testing laboratories will continuously evaluate the fields of certification that they want to pursue. The commission has determined that it is appropriate to allow environmental testing laboratories to modify their fields of certification at anytime so that the environmental testing laboratories can pursue various types of analytical work.

Proposed new §25.56, Term of Certification, establishes a one-year term of certification if the environmental testing laboratory application meets the standards for certification of this chapter. Subsection (b) allows the executive director to grant interim certification for up to one year in order to schedule an environmental testing laboratory inspection. This section continues the Safe Drinking Water Certification Program as it was administered by TDH.

In proposed new §25.58, Renewal Application for Certification, subsection (a) provides that the executive director must receive an environmental testing laboratory's renewal application and applicable fees no later than the expiration date of a laboratory's certification. The executive director has determined that it is important to provide environmental testing laboratories with a definite deadline for renewal applications. Subsection (b) provides that, if a renewal application is received after the expiration date of the laboratory's certification, the laboratory must apply for and meet all requirements for a new certification, including an environmental testing laboratory assessment. Subsection (c) requires that modifications made during the term of a certification to increase a laboratory's fields of certification be renewed on the certification renewal date, regardless of the date of the modifications. This section is consistent with §25.16 of Subchapter B.

Proposed new §25.60, Environmental Testing Laboratory Certification Assessments, requires environmental testing laboratory assessments of environmental testing laboratories before certification is granted initially and at least every three years after certification is granted. Subsection (b) allows these environmental testing laboratory assessments to be announced or unannounced. This section implements the environmental testing laboratory assessment program required by the SDWA.

Proposed new §25.62, Proficiency Test Sample Analyses, requires an environmental testing laboratory to periodically analyze certain proficiency test samples before and after certification is granted. Subsection (a) requires, for initial certification, the successful analysis of one proficiency test sample for each field of certification during the previous 12 months. For ongoing certification, subsection (b) requires analysis of two proficiency test samples per year approximately six months apart for each field of certification and successful analysis of one proficiency test sample each year for each field of accreditation. If a laboratory does not meet requirements for ongoing analysis of proficiency test samples, the proposed rule allows a laboratory to participate in supplemental proficiency test studies. This section also requires the executive director to determine a laboratory's certification status within 60 days if the laboratory does not successfully analyze proficiency test samples as required. Subsection (c) requires laboratories to purchase proficiency test samples from vendors approved by the National Institute for Standards and Technology. This section continues the Safe Drinking Water Program as it was administered by TDH.

Proposed new §25.64, Secondary Certification of Out-of-State Environmental Testing Laboratories, requires the executive director to grant or renew the certification of an environmental testing laboratory that is in another state and certified by the EPA or another state within 30 days if the laboratory submitted the required application, was already certified for the applicable fields of certification by the EPA or other state, and paid required fees. Subsection (b) requires that the executive director notify the laboratory in writing within 30 days of granting or denying certification. This section is consistent with §25.16 of Subchapter B.

Proposed new §25.66, Duties and Responsibilities of Certified Laboratories, establishes duties and responsibilities of a laboratory applying for and accepting certification. The duties and responsibilities include providing reasonable access to the executive director to the laboratory and its facilities, personnel, documents, records, data, analyses, and operations and operating the laboratory and maintaining the laboratory's certification according to the standards for certification included in Chapter 25. This section continues the Safe Drinking Water Certification Program as it was administered by TDH.

Proposed new §25.68, Withdrawal From Certification Program, allows an environmental testing laboratory to withdraw from the certification program in whole or in part at any time by notifying the executive director in writing. This section is consistent with §25.26 of Subchapter B.

Proposed new §25.70, Certification Fees, requires certification fees to cover program costs and establishes a fee structure for the program. Environmental testing laboratories applying for primary certification will be required to pay an annual administrative fee of $500 and annual category fees, while environmental testing laboratories applying for secondary certification will pay an annual administrative fee of $250 and category fees. Category fees would be based on the types of analyses a laboratory performs and for which the laboratory chooses to seek certification. The proposed rule contains 11 drinking water categories, including microbiology, radiochemistry, metals, general chemistry, disinfection by-products, volatile organic compounds by gas chromatograph mass spectrometry, semivolatile organic compounds by gas chromatograph mass spectrometry, organic compounds by gas chromatography using detection other than mass spectrometry, organic compounds by high performance liquid chromatography, polychlorinated dibenzo-p-dioxins and dibenzofurans, and asbestos. Subsection (e) requires the operator of an environmental testing laboratory located in another state and applying for primary certification to pay a fee including costs equal to the reasonable travel costs associated with conducting an assessment at the laboratory. Subsection (f) also allows fees for certification modifications, replacement of certification certificates, and reinstatement of suspended certifications. All fees are nonrefundable.

The proposed certification fees were developed to produce enough revenue to recover the cost of the certification program. Annual program costs were estimated using standard employee salary rates and existing staffing, training, travel, supplies, and other costs. Annual program revenues were calculated using current drinking water laboratory certifications, the types of analyses these laboratories perform, and current appropriations.

The proposed fees use categories based on a drinking water matrix and drinking water analyses. The matrix and types of analyses and category fees are consistent with Subchapter B as it relates to the analysis of drinking water samples.

In addition to category fees, the proposed certification fees include annual administrative fees. The proposed certification fees include a fee equal to the reasonable travel costs (including transportation, lodging, per diem, and any telephone charges) associated with conducting an assessment at an out-of-state laboratory. The proposed certification fees also include fees for adding one or more fields of certification; replacing a certification certificate; and reinstating a suspended certification. These fees are consistent with Subchapter B.

Proposed new §25.74, Denial of Certification Application, allows the executive director to deny an application for certification for insufficiency or cause after notice and opportunity to file a motion to overturn according to 30 TAC §50.139. Subsection (a) allows the executive director to deny an initial or renewal application for insufficiency. An application may be determined to be insufficient if laboratory personnel fail to submit a completed application; fail to submit the required fees; fail to successfully analyze and report proficiency test samples; fail to implement a quality system; fail to document that laboratory personnel meet education, training, and experience requirements; fail to allow entry during normal business hours for an assessment; fail to pass required environmental testing laboratory assessments; fail to submit a report identifying action the environmental testing laboratory will take to correct deficiencies in the assessment report within 30 days of receiving an assessment report; or fail to implement actions to correct the deficiencies identified in the assessment report by the executive director. Subsection (b) allows the commission to deny an applicant's initial or renewal application for cause after notice and an opportunity for a hearing if the laboratory personnel misrepresent any fact pertinent to receiving or maintaining accreditation or the laboratory or its operator is indebted to the state for a fee, penalty, or tax imposed by the statute within the commission's jurisdiction or any other reason which causes the executive director to determine that quality of the data being produced by the laboratory's personnel is unreliable or inaccurate, based on the facts of the case. This section is consistent with Subchapter B.

Proposed new §25.76, Suspension of Certification, allows the commission to suspend an environmental testing laboratory's certification in whole or in part for up to six months after notice and opportunity for hearing according to Chapter 80. Reasons for suspension include failure to maintain a quality system; failure to comply with minimum performance and quality assurance standards; failure to maintain records of the laboratory's personnel, operations, data, or analysis; failure to successfully complete required proficiency tests; failure to employ staff that meet required personnel qualifications for education, training, and experience; or failure to notify the executive director of changes in certification criteria. Subsection (b) requires the executive director to reinstate an environmental testing laboratory's certification if the laboratory effectively corrected and took steps to prevent a recurrence of the deficiencies that led to a suspension, complied with requirements imposed by the executive director and the commission, and submitted an acceptable application for reinstatement.

Proposed new §25.78, Revocation of Certification, allows the commission to revoke an environmental testing laboratory's certification after notice and opportunity for hearing according to Chapter 80. Reasons for revocation include: failure to correct deficiencies that led to a suspension of certification within six months of the notice of suspension; failure to submit an acceptable report identifying actions the environmental testing laboratory will take to correct deficiencies identified in the environmental testing laboratory assessment; failure to implement actions to correct deficiencies identified during an environmental testing laboratory assessment; failure to complete required proficiency test studies; submission of proficiency test sample results generated by another laboratory as its own; misrepresentation of any fact pertinent to receiving and maintaining certification; failure to allow entry during normal business hours for an environmental testing laboratory assessment; conviction of charges relating to the falsification of any report relating to a laboratory analysis; failure to remit fees within the time limit established by the executive director; or indebtedness to the state for a fee, penalty, or tax imposed by a statute within the commission's jurisdiction or a rule adopted under such a statute. Subsection (b) requires the commission to revoke applicable parts of a laboratory's certification for certain deficiencies related to unsuccessful analysis of proficiency test samples. Finally, subsection (c) requires an environmental testing laboratory whose certification was revoked to meet all requirements for a new certification, including an environmental testing laboratory assessment. This section is consistent with Subchapter B with the exception of proficiency testing requirements because of differences between the programs.

FISCAL NOTE: COST TO STATE AND LOCAL GOVERNMENT

John Davis, Technical Specialist with Strategic Planning and Appropriations, has determined that for each year of the first five-year period the proposed rules are in effect, there will be significant fiscal implications for the agency due to administration and enforcement of the proposed rules. There will also be fiscal implications for units of state and local government operating environmental testing laboratories that provide certain compliance data to the commission. Units of government that do not operate environmental testing laboratories would not be affected by the proposed rules.

Commercial, governmental, industrial, and other environmental testing laboratories located inside and outside of Texas analyze thousands of environmental samples each year. The results of these analyses are used by the commission to make permitting, compliance, enforcement, cleanup, and other decisions.

Oversight of environmental testing laboratories has been limited to TDH's formal certification of laboratories analyzing drinking water samples, inspections by the executive director that may have occurred as part of a larger permit compliance inspection, and inspections performed as part of the commission's limited laboratory inspection program. TDH had also developed rules for a voluntary laboratory accreditation program for laboratories analyzing wastewater samples, but had not yet implemented the program.

In 2001, the 77th Texas Legislature passed HB 2912, §1.12, which amended TWC by adding new §5.127. This section requires that all data used by the commission for commission decisions regarding permits or other authorizations, compliance matters, enforcement actions, or corrective actions be from an accredited environmental testing laboratory, unless the environmental testing laboratory is: an in-house or on-site environmental testing laboratory periodically inspected by the commission; accredited under federal law; or providing data and analysis for emergency response activities and required data and analysis are not available from an accredited environmental testing laboratory. New §5.127 also allows the commission to require that data used in other commission decisions be obtained from an accredited environmental testing laboratory and requires the commission to periodically inspect unaccredited in-house or on-site environmental testing laboratories providing data for commission decisions.

The Legislature also passed HB 2912, Article 6, which transferred THSC, Chapter 421, to TWC, Chapter 5, redesignating Chapter 421 as Subchapter R, §§5.801 - 5.807 and amending it to revise the definitions and numbering. Along with the transfer, Article 6 was amended to include new Subchapter R. Subchapter R transferred authority for environmental laboratory accreditation and drinking water certification from TDH to the commission and requires that the state's environmental testing laboratory accreditation program be consistent with the NELAC. Subchapter R also created a special account for accreditation and certification fees.

TWC, §5.802 requires that the environmental testing laboratory accreditation program be consistent with NELAC standards. The commission is adopting by reference the NELAC standards approved by NELAC in May 2001.

Additionally, §18.02 of HB 2912 transferred the Safe Drinking Water Certification Program from the TDH to the commission, effective September 1, 2001. The commission is currently operating the drinking water laboratory certification program according to the rules adopted by the TDH.

Finally, §18.03 of HB 2912 transferred the Environmental Testing Laboratory Certification Program, including existing authority, accreditation, appropriations, rules, equipment, and personnel involved in lab accreditation from the TDH to the commission, effective September 1, 2001. As required by HB 2912, §18.03(d), accreditation requirements relating to data provided for commission decisions take effect three years after the commission publishes notice in the Texas Register that the agency's accreditation program has met NELAC standards. Until that date, environmental testing laboratories that analyze samples for compliance with the SDWA must continue to be certified according to Chapter 25. After that date, laboratories that analyze samples for compliance with the SDWA must be accredited according to Chapter 25, and the executive director, as authorized by the commission's rules, will no longer grant certifications.

The proposed rules would implement portions of HB 2912 relating to two types of authorizations to be issued by the commission. Accreditations would be issued to environmental testing laboratories providing data for commission decisions relating to all media. Certifications would be issued to environmental testing laboratories providing data for commission decisions relating to compliance with the SDWA only. The commission anticipates no significant fiscal implications for any one laboratory that seeks either accreditation or drinking water certification under the proposed rules. For the purposes of this fiscal note, it is assumed approximately 200 environmental testing laboratories will pursue accreditation and the 113 environmental testing laboratories that currently have drinking water certifications will renew their certifications. It is assumed that none of the laboratories likely to seek accreditation is a unit of state or local government.

The proposed rules would establish fees for environmental testing laboratory accreditations and certifications. For accreditations, the commission is proposing an administrative fee and category fees that applicants will be required to remit annually. Additionally, affected laboratories would be required to purchase and analyze two proficiency test samples annually. The cost of a proficiency test sample is anticipated to range from $150 to $4,750 per sample, depending on the range of analyses a laboratory performs and for which it chooses to seek accreditation. The administrative fee is $500, unless the laboratory is located in another state and is already accredited. In this case, the laboratory is seeking secondary accreditation from the agency, and the annual administrative fee would be $250. Each testing category will be assigned a fee from $75 to $300. According to the proposed rules, in-house environmental testing laboratories operated by units of government would be required to become accredited if they provide data to third parties for commission decisions. In-house environmental testing laboratories operated by units of government that provide data to their respective units of government would not be required to become accredited but may choose to do so. The commission has not determined the number of governmental laboratories that will likely apply for and receive accreditation. The costs presented in the small and micro-business assessment section of this fiscal note would apply to units of government with in-house environmental testing laboratories that seek accreditation.

For drinking water certifications, the commission is proposing an administrative fee and category fees that applicants will be required to remit annually. Additionally, affected laboratories would continue to be required to purchase and analyze two proficiency test samples annually. The annual cost for a proficiency test sample for drinking water analysis is anticipated to range from $40 to approximately $1,500 per sample, depending on the range of analyses for which a laboratory chooses to seek certification. The administrative fee is $500, unless the laboratory is located in another state and is already certified. In this case, the laboratory is seeking secondary certification from the agency, and the annual administrative fee would be $250. Each testing category will be assigned a fee from $75 to $300. The commission has assigned fees to 11 testing categories for drinking water analyses. The categories are microbiology, radiochemistry, metals, general chemistry, disinfection by-products, volatile organic compounds by gas chromatograph mass spectrometry, semivolatile organic compounds by gas chromatograph mass spectrometry, organic compounds by gas chromatography using detection other than mass spectrometry, organic compounds by high performance liquid chromatography, polychlorinated dibenzo-p-dioxins and dibenzofurans, and asbestos. The total category fee for each laboratory will depend on the number of tests for which it seeks certification. The commission anticipates the total cost per laboratory will range from $325 ($250 out-of-state, secondary certification, administrative fee, and one $75 category fee) to $2,600 ($500 administrative fee and 11 category fees totaling $2,100). The commission anticipates no significant fiscal implications for the modifications proposed to the existing drinking water certification program. The commission has identified 113 laboratories that are currently certified to conduct drinking water analysis. Of this total, 71 are owned and operated by units of state or local government. The fees for the majority of these laboratories will not change according to the proposed rules. The fees for three of these laboratories would increase by an average of $1,050, while fees for one of the laboratories would decrease by $280. Fees for the remaining 67 laboratories owned and operated by units of state or local government would not be affected due to implementation of the proposed rules. The commission anticipates the total annual increased fees from environmental testing laboratories owned and operated by units of state and local government receiving certifications according to the proposed rules will be approximately $2,870.

The commission will also incur costs administering the environmental testing laboratory accreditation and certification programs. The 77th Legislature appropriated additional funding to the commission for the accreditation program in the amount of $412,633 in Fiscal Year (FY) 2002 and $444,760 in FY 2003.

The legislature authorized two additional full-time employees (FTEs) in FY 2002 and three additional FTEs in 2003. The 77th Legislature also appropriated additional funding to the commission for the drinking water certification program in the amount of $308,941 in FY 2002 and $271,796 in FY 2003. Two FTEs transferred to the commission to administer the drinking water certification program.

PUBLIC BENEFIT AND COSTS

Mr. Davis has also determined that for each of the first five years the proposed rules are in effect, the public benefit anticipated as a result of implementing the proposed rules will be anticipated improvements in laboratory data used by the agency to make permitting, compliance, enforcement, cleanup, and other decisions.

The proposed rules would implement portions of HB 2912 relating to two types of authorizations to be issued by the commission. Accreditations would be issued to environmental testing laboratories providing data for commission decisions relating to all media. Certifications would be issued to environmental testing laboratories providing data for commission decisions relating to compliance with the SDWA only. The commission anticipates no significant fiscal implications for any one laboratory that seeks either accreditation or drinking water certification under the proposed rules. For the purposes of this fiscal note, it is assumed approximately 200 environmental testing laboratories will pursue accreditation and the 113 environmental testing laboratories that currently have drinking water certifications will renew their certifications.

The proposed rules would establish fees for environmental testing laboratory accreditations and certifications. For accreditations, the commission is proposing an administrative fee and category fees that applicants will be required to remit annually. Additionally, affected laboratories would be required to purchase and analyze two proficiency test samples annually. The cost of a proficiency test sample is anticipated to range from $150 to $4,750 per sample, depending on the range of analyses a laboratory performs and for which it chooses to seek accreditation. The administrative fee is $500, unless the laboratory is located in another state and is already accredited. In this case, the laboratory is seeking secondary accreditation from the agency, and the annual administrative fee would be $250. Each testing category will be assigned a fee from $75 to $300. All of the laboratories the commission estimates will seek accreditation are anticipated to be small or micro-businesses. The costs presented in the small and micro-business assessment section of this fiscal note would apply to individuals and larger businesses that seek accreditation.

The commission anticipates no significant fiscal implications for the modifications proposed to the existing drinking water certification program. The commission has identified 38 existing privately- owned and operated laboratories that are currently certified to conduct drinking water analysis. All of the businesses are believed to be small or micro-businesses; therefore, the fiscal implications for these sites will be discussed in the small and micro-business assessment section of this fiscal note.

SMALL AND MICRO-BUSINESS ASSESSMENT

There will be adverse fiscal implications, which are not anticipated to be significant, for small and micro-businesses due to implementation of the proposed rules. The proposed rules would implement portions of HB 2912 relating to two types of authorizations to be issued by the commission. Accreditations would be issued to environmental testing laboratories providing data for commission decisions relating to all media. Certifications would be issued to environmental testing laboratories providing data for commission decisions relating to compliance with the SDWA only. The commission anticipates no significant fiscal implications for any one laboratory that seeks either accreditation or drinking water certification under the proposed rules. For the purposes of this fiscal note, it is assumed approximately 200 environmental testing laboratories will pursue accreditation and the 113 environmental testing laboratories that currently have drinking water certifications will renew their certifications.

The proposed rules would establish fees for environmental testing laboratory accreditations and certifications. For accreditations, the commission is proposing an administrative fee and category fees that applicants will be required to remit annually. Additionally, affected laboratories would be required to purchase and analyze two proficiency test samples annually. The cost of a proficiency test sample is anticipated to range from $150 to $4,750 per sample, depending on the range of analyses a laboratory performs and for which it chooses to seek accreditation. The administrative fee is $500, unless the laboratory is located in another state and is already accredited. In this case, the laboratory is seeking secondary accreditation from the agency, and the annual administrative fee would be $250. The commission has assigned fees to 51 testing categories, based on five matrices and 14 types of analyses. The matrices are drinking water, nonpotable water, solid and chemical material, biological tissue, and air emissions. The types of analyses are microbiology, aquatic toxicity, radiochemistry, particulate matter, metals, waste characteristics, general chemistry, disinfection by-products, volatile organic compounds by gas chromatograph mass spectrometry, semivolatile organic compounds by gas chromatograph mass spectrometry, organic compounds by gas chromatograph, organic compounds by high performance liquid chromatography, polychlorinated dibenzo-p-dioxins and dibenzofurans, and asbestos and airborne fibers. The total category fee for each laboratory will depend on the number of different tests for which it seeks accreditation. Each testing category will be assigned a fee from $75 to $300. The total category fee for each laboratory will depend on the number of different tests for which it seeks accreditation. The commission anticipates the total annual cost per laboratory will range from $325 ($250 out-of-state, secondary accreditation, administrative fee, and one $75 category fee) to $10,025 ($500 administrative fee, and 51 category fees totaling $9,525). Assuming that 100 of the 200 laboratories expected to pursue accreditation perform relatively few types of analyses, 70 perform a moderate number of types of analyses, and 30 perform a large number of types of analyses, the commission anticipates the total annual fees from environmental testing laboratories receiving accreditations according to the proposed rules will be approximately $645,000. All of the affected laboratories are estimated to be small and micro-businesses.

For drinking water certifications, the commission is proposing an administrative fee and category fees that applicants will be required to remit annually. Additionally, affected laboratories would continue to be required to purchase and analyze two proficiency test samples annually. The annual cost for a proficiency test sample for drinking water analysis is anticipated to range from $40 to approximately $1,500 per sample, depending on the range of analyses a laboratory performs and for which it chooses to seek certification. The administrative fee is $500, unless the laboratory is located in another state and is already certified. In this case, the laboratory is seeking secondary certification from the agency, and the annual administrative fee would be $250. Each testing category will be assigned a fee from $75 to $300. The commission has assigned fees to 11 testing categories for drinking water analyses. The total category fee for each laboratory will depend on the number of tests for which it seeks certification. The commission anticipates the total cost per laboratory will range from $325 ($250 out-of-state, secondary certification, administrative fee, and one $75 category fee) to $2,600 ($500 administrative fee and 11 category fees totaling $2,100). The commission anticipates no significant fiscal implications for the modifications proposed to the existing drinking water certification program. The commission has identified 42 privately-owned and operated laboratories that are currently certified to conduct drinking water analyses. All of the businesses are believed to be small or micro-businesses. The fees for five of these laboratories would not change, and the fees for three of the laboratories would be reduced by $60. The fees for the remaining 34 laboratories would be increased by an average of approximately $740 per year. The commission anticipates the total annual increased fees from environmental testing laboratories owned and operated by small and micro- businesses receiving certifications according to the proposed rules will be approximately $25,000 per year.

The following is an analysis of the costs per employee for small and micro-businesses required to pay accreditation or certification fees. Small and micro-businesses are defined as having fewer than 100 or 20 employees, respectively. The commission estimates 40 of the 200 environmental testing laboratories estimated to become accredited are small businesses and 160 are micro-businesses. The commission estimates 31 of the 113 laboratories currently certified for drinking water analyses are small businesses and 11 are micro-businesses. The 40 small businesses estimated to become accredited would pay an average of $92 per employee per year to obtain an accreditation according to the proposed rules. The 160 micro-businesses estimated to become accredited would pay an average of $400 per employee per year to obtain an accreditation. The 31 small businesses that currently have drinking water certifications would pay an average of $8.00 more per employee per year to renew their certifications according to the proposed rules. The 11 micro-businesses that currently have drinking water certifications would pay an average of $37 more per employee per year to renew their certifications.

LOCAL EMPLOYMENT IMPACT

The commission has reviewed these proposed rules and determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission has reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and has determined that the rulemaking is not subject to §2001.0225 because it does not meet the definition of a "major environmental rule" as defined in that statute. A rule is a major environmental rule if it meets the two requirements set out in 2001.0225. The first requirement of a major environmental rule is that the specific intent of the rule is to protect the environment or reduce risks to human health from environmental exposure. The second requirement is that the rule may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. This rulemaking has two major purposes. First, it will provide a mechanism for the commission to accredit scientific laboratories that analyze environmental samples. Second, the proposed rules continue the certification program for scientific laboratories that analyze samples under the SDWA until the laboratory accreditation program is in place. Protection of the environment and human health may be a result of this rulemaking, but that result is not the specific intent of the rules. Thus, these rules do not meet the definition of a major environmental rule.

Additionally, these proposed rules are not a major environmental rule in that they do not meet any of the four applicability requirements of the second part of the definition of a major environmental rule. A rule is considered a major environmental rule if as a result of the rule: a federal standard is exceeded (unless the rule is specifically required by state law); an express requirement of state law is exceeded (unless the rule is specifically required by federal law); a requirement of a delegation agreement or contract between the state and the federal government is exceeded; or the rule is adopted solely under the general powers of the agency. First, these proposed rules do not exceed a standard set by federal law. These proposed rules will implement a laboratory accreditation program. NELAP encourages each state to participate; however, participation is not mandated at the federal level. The SDWA requires environmental testing laboratories that analyze samples for compliance with the SDWA be certified. These rules incorporate that requirement, which is a federal requirement, but they do not exceed the federal requirement. Second, these rules do not exceed an express requirement of state law, rather they implement state law, specifically TWC, Chapter 5, Subchapter R, and TWC, §5.127. Third, these rules do not exceed a delegation agreement or contract, because there is no federal authority regarding laboratory accreditation. Fourth, these rules do not adopt a rule solely under the general powers of the commission and do not exceed an express requirement of state law. The requirements that would be implemented through these rules are expressly defined under TWC, Chapter 5, Subchapter R, which requires the commission to enact rules governing the accreditation of environmental laboratories. Thus, these rules do not meet any of the requirements for them to be considered a major environmental rule.

TAKINGS IMPACT STATEMENT ASSESSMENT

The commission has prepared a takings impact assessment for these proposed rules under Texas Government Code, §2007.43. This rulemaking has two major purposes. First, it will provide a mechanism for the commission to accredit scientific laboratories that analyze environmental samples. Second, the proposed rules continue the certification program for scientific laboratories that analyze samples under the SDWA until the laboratory accreditation program is in place.

These rules are proposed in an effort to reasonably fulfill an obligation mandated by state law to implement a voluntary environmental testing laboratory accreditation program and to continue the drinking water laboratory certification program, previously managed by the TDH. The proposed rules will substantially advance the implementation of the requirements under TWC Chapter 5, Subchapter R. Promulgation and enforcement of these proposed rules will not affect private real property. Therefore, the commission has determined that these proposed new rules will not result in a takings.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The executive director reviewed the proposed rulemaking and found that the proposed rules are neither identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, relating to Actions and Rules Subject to the Texas Coastal Management Program (CMP), nor will they affect any action or authorization identified in 31 TAC §505.11. Therefore, the proposed rules are not subject to the CMP.

ANNOUNCEMENT OF HEARING

The commission will hold public hearings on this proposal in Fort Worth, on May 29, 2002 at 7:00 p.m., in the Fort Worth Regional Office located in at 2315 Gravel Drive, as well as in Austin on June 4, 2002 at 2:00 p.m., Texas Natural Resource Conservation Commission, 12100 Park 35 Circle, Building F, Room 2210, and in Houston, on June 5, 2002 at 7:00 p.m., at the City of Houston Pollution Control Building Auditorium, located at 7411 Park Place Boulevard. The hearings will be structured for the receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon in order of registration. Open discussion will not occur during the hearings; however, an agency staff member will be available to discuss the proposal 30 minutes prior to the hearings and answer questions before and after the hearings.

Persons with disabilities who have special communication or other accommodation needs, who are planning to attend the hearing, should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Comments may be submitted to Angela Slupe, Office of Environmental Policy, Analysis, and Assessment, MC 205, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. All comments should reference Rule Log Number 2001-078-025-AD. Comments must be received by 5:00 p.m., June 10, 2002. For further information, contact Kathy Ramirez, Policy and Regulations Division, at (512) 239-6757.

Subchapter A. GENERAL PROVISIONS

30 TAC §§25.1, 25.2, 25.4, 25.6, 25.8

STATUTORY AUTHORITY

The new sections are proposed under the authority granted to the commission by the Texas Legislature in HB 2912, §1.12, Use of Environmental Testing Laboratory Data and Analysis; Article 6, Accreditation of Environmental Testing Laboratories; §18.02, Transfer of Safe Drinking Water Laboratory Certification Program; and §18.03, Transfer of Environmental Testing Laboratory Certification Program. The new sections will be implemented in accordance with TWC, §5.802, which requires the commission to adopt rules for the administration of an environmental testing laboratory accreditation program; §5.803, which requires the commission to establish a schedule of reasonable accreditation fees; §5.804, which authorizes the commission to adopt rules governing accreditation of an environmental laboratory accredited in another state; and §5.805, which requires the commission to adopt rules to implement TWC, Chapter 5, Subchapter R; and §5.127, which allows the commission to accept environmental testing laboratory data and analyses for use in commission decisions regarding any matter under the commission's jurisdiction relating to permits or other authorizations, compliance matters, enforcement actions, or corrective actions only if the data and analyses are prepared by an environmental testing laboratory accredited by the commission under Subchapter R or an environmental testing laboratory described in subsection (b). Additionally, the commission may accept for use in its decisions data and analyses prepared by an on-site or in-house environmental testing laboratory if the laboratory is periodically inspected by the commission; an environmental testing laboratory that is accredited under federal law; or, if the data and analyses are necessary for emergency response activities and the required data and analyses are not otherwise available, an environmental testing laboratory that is not accredited by the commission under Subchapter R or under federal law. Further, the commission by rule may require that data and analyses used in other commission decisions be obtained from an environmental testing laboratory accredited by the commission under Subchapter R. Finally, the commission is required to periodically inspect on-site or in-house environmental testing laboratories described in Subchapter R. These new sections are also proposed under the general authority granted in TWC, §5.102, which authorizes the commission to perform any acts necessary and convenient to the exercise of its jurisdiction and powers; §5.013, which establishes the general jurisdiction of the commission over other areas of responsibility as assigned to the commission under TWC and other laws of the state; TWC, §5.103 and §5.105, which authorize the commission to adopt rules and policies necessary to carry out its responsibilities and duties under TWC, §5.013(15); §5.107, which authorizes the commission to establish Advisory Committees; and §5.122, which authorizes the commission to delegate uncontested matters to the executive director.

The proposed new sections implement HB 2912, §1.12, Article 6, §18.02, and 18.03. Additionally, the new sections implement TWC, Chapter 5, Subchapter R, §§5.802 - 5.805, 5.127, 5.102, 5.013, 5.103, 5.105, 5.013(15), 5.107, and 5.122.

§25.1.Purpose.

This chapter describes requirements for accreditation and certification of environmental testing laboratories. Accreditation is voluntary; however, the commission may accept environmental testing laboratory data and analyses for use in commission decisions regarding any matter under the commission's jurisdiction relating to permits or other authorizations, compliance matters, enforcement actions, or corrective actions only if the data and analyses are prepared by an environmental testing laboratory accredited by the commission under this chapter, except as provided in §25.6 of this title (relating to Conditions Under Which the Commission May Accept Analytical Data). The agency's accreditation program will become effective thee years after the date notice is published in the Texas Register that the commission's laboratory accreditation program has met National Environmental Laboratory Accreditation Conference standards. At that time all data and analyses referenced in §25.4(b) and (c) of this title (relating to Applicability) must be provided by accredited laboratories. In the interim all environmental testing laboratories that supply data for commission decisions relating to the Safe Drinking Water Act must be certified.

§25.2.Definitions.

The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) Accreditation -- An authorization granted by the executive director to an environmental testing laboratory that meets requirements of this subchapter and Subchapter B of this chapter (relating to Environmental Testing Laboratory Accreditation).

(2) Accrediting authority -- An agency recognized by the National Environmental Laboratory Accreditation Program (NELAP) that grants accreditation on behalf of a state, territory, or federal agency.

(3) Analyte -- A constituent for which an environmental sample is analyzed.

(4) Certification -- An authorization granted by the executive director to an environmental testing laboratory which analyzes drinking water and which meets requirements of this subchapter and Subchapter C of this chapter (relating to Environmental Testing Laboratory Certification).

(5) Environmental testing laboratory -- A scientific laboratory that performs analyses to determine the chemical, molecular, or pathogenic components of environmental media for regulatory compliance.

(6) Environmental testing laboratory assessment -- The process used by an accrediting or certifying authority to measure the performance, effectiveness, and conformity of an environmental testing laboratory to the National Environmental Laboratory Accreditation Conference (NELAC) accreditation or EPA certification standards and this chapter. An environmental testing laboratory assessment may include a physical inspection of a laboratory and its operations.

(7) Fields of accreditation -- The matrix, technology, method, and analyte or analyte group for which an environmental testing laboratory may be accredited.

(8) Fields of certification -- The methods and analytes for which an environmental testing laboratory may be certified. The methods and analytes are used in a commission decision relating to compliance with the Safe Drinking Water Act.

(9) In-house environmental testing laboratory -- An environmental testing laboratory that provides analytical data to its operator for a commission decision relating to:

(A) permits or other authorizations issued to the laboratory's operator;

(B) compliance matters and enforcement actions taken concerning the laboratory's operator; or

(C) corrective actions taken by the laboratory's operator to satisfy statutes, rules, or commission orders.

(10) Laboratory personnel -- Individuals who manage, perform, maintain, or verify the work or the quality of the work at the environmental testing laboratory.

(11) Matrix -- Sample type, including drinking water; nonpotable water; solid and chemical materials; air and emissions; and biological tissue.

(12) Mobile environmental testing laboratory -- An environmental testing laboratory capable of being moved from one site to another site.

(13) National Environmental Laboratory Accreditation Conference (NELAC) -- The voluntary organization of state, territorial, and federal environmental officials and interest groups whose primary purpose is to establish mutually acceptable national standards for accrediting environmental testing laboratories.

(14) National Environmental Laboratory Accreditation Program (NELAP) -- The environmental testing laboratory accreditation program including NELAC.

(15) On-site environmental testing laboratory -- An in-house environmental testing laboratory located at a regulated entity.

(16) Operator -- An individual authorized to act on behalf of the environmental testing laboratory.

(17) Primary accreditation -- Accreditation of an environmental testing laboratory according to NELAC standards and the requirements of this chapter.

(18) Proficiency test sample -- A sample, the composition of which is unknown by an environmental testing laboratory or the individual performing the analysis. The sample is used to evaluate whether the laboratory and analyst can produce results within the specified acceptance criteria.

(19) Quality system -- A structured and documented management system describing the policies, objectives, principles, organizational authority, responsibilities, accountability, and implementation plan of an organization for ensuring the quality of its work processes, products, and services. The quality system provides the framework for planning, implementing, and assessing work performed by the environmental testing laboratory for quality assurance and quality control.

(20) Secondary accreditation -- Accreditation granted by the executive director to an environmental testing laboratory that has been granted primary accreditation by another NELAP accrediting authority.

§25.4.Applicability.

(a) An environmental testing laboratory may apply for accreditation after the commission publishes notice in the Texas Register that the environmental testing laboratory accreditation program has met National Environmental Laboratory Accreditation Conference (NELAC) standards.

(b) An environmental testing laboratory must be accredited according to this chapter, except as provided in §25.6 of this title (relating to Conditions Under Which the Commission May Accept Analytical Data), if the laboratory provides analytical data which is used for a commission decision relating to a:

(1) permit;

(2) authorization;

(3) compliance action;

(4) enforcement action;

(5) corrective action;

(6) characterization of an environmental process or condition; or

(7) assessment of an environmental process or condition.

(c) An in-house environmental testing laboratory is to be accredited if it provides analytical data to a third party and the data is used for a commission decision relating to a:

(1) permit;

(2) authorization;

(3) compliance action;

(4) enforcement action;

(5) corrective action;

(6) characterization of an environmental process or condition; or

(7) assessment of an environmental process or condition.

(d) Subsections (b) and (c) of this section apply only to environmental testing laboratory results submitted to the commission on or after the third anniversary of the date on which the commission publishes notice in the Texas Register that the commission's environmental laboratory testing program established under this chapter has met NELAC standards.

(e) Until subsection (d) of this section is effective, an environmental testing laboratory that provides analytical data used for a commission decision relating to the Safe Drinking Water Act (SDWA) must be:

(1) accredited according to this subchapter and Subchapter B of this chapter (relating to Environmental Testing Laboratory Accreditation);

(2) certified according to this subchapter and Subchapter C of this chapter (relating to Environmental Testing Laboratory Certification); or

(3) certified by EPA.

(f) After subsection (d) of this section is effective, an environmental testing laboratory that provides analytical data used for a commission decision relating to the SDWA will no longer be certified and must be accredited according to this subchapter and Subchapter B of this chapter, unless the laboratory is certified by the EPA.

§25.6.Conditions Under Which the Commission May Accept Analytical Data.

The commission may accept analytical data provided by an environmental testing laboratory that is not accredited according to this chapter if the laboratory:

(1) is an on-site or in-house environmental testing laboratory that is:

(A) inspected at least every three years by the executive director; and

(B) regulated according to the terms of a permit, registration, or other authorization, and the permit, registration, or other authorization was issued by the commission to the operator of the laboratory;

(2) is accredited under federal law, including certification by the EPA to provide analytical data for decisions relating to compliance with the Safe Drinking Water Act;

(3) provides analytical data necessary for emergency response activities and the required analytical data are not otherwise available from an environmental testing laboratory accredited according to this chapter or federal law; or

(4) provides analytical data for which the commission does not offer accreditation.

§25.8.Contracting.

The executive director may contract with persons to provide services required by this chapter. The executive director may authorize contractors to collect reasonable fees for the services provided.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202591

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

Subchapter B. ENVIRONMENTAL TESTING LABORATORY ACCREDITATION

30 TAC §§25.9, 25.10, 25.12, 25.14, 25.16, 25.18, 25.20, 25.22, 25.24, 25.26, 25.30, 25.32, 25.34, 25.36, 25.38

STATUTORY AUTHORITY

The new sections are proposed under the authority granted to the commission by the Texas Legislature in HB 2912, §1.12, Use of Environmental Testing Laboratory Data and Analysis; Article 6, Accreditation of Environmental Testing Laboratories; §18.02, Transfer of Safe Drinking Water Laboratory Certification Program; and §18.03, Transfer of Environmental Testing Laboratory Certification Program. The new sections will be implemented in accordance with TWC, §5.802, which requires the commission to adopt rules for the administration of an environmental testing laboratory accreditation program; §5.803, which requires the commission to establish a schedule of reasonable accreditation fees; §5.804, which authorizes the commission to adopt rules governing accreditation of an environmental laboratory accredited in another state; and §5.805, which requires the commission to adopt rules to implement TWC, Chapter 5, Subchapter R; and §5.127, which allows the commission to accept environmental testing laboratory data and analyses for use in commission decisions regarding any matter under the commission's jurisdiction relating to permits or other authorizations, compliance matters, enforcement actions, or corrective actions only if the data and analyses are prepared by an environmental testing laboratory accredited by the commission under Subchapter R or an environmental testing laboratory described in subsection (b). Additionally, the commission may accept for use in its decisions data and analyses prepared by an on-site or in-house environmental testing laboratory if the laboratory is: periodically inspected by the commission; an environmental testing laboratory that is accredited under federal law; or, if the data and analyses are necessary for emergency response activities and the required data and analyses are not otherwise available, not accredited by the commission under Subchapter R or under federal law. Further, the commission by rule may require that data and analyses used in other commission decisions be obtained from an environmental testing laboratory accredited by the commission under Subchapter R. Finally, the commission is required to periodically inspect on-site or in-house environmental testing laboratories described in Subchapter R. These new sections are also proposed under the general authority granted in TWC, §5.102, which authorizes the commission to perform any acts necessary and convenient to the exercise of its jurisdiction and powers; §5.013, which establishes the general jurisdiction of the commission over other areas of responsibility as assigned to the commission under TWC and other laws of the state; TWC, §5.103 and §5.105, which authorize the commission to adopt rules and policies necessary to carry out its responsibilities and duties under TWC, §5.013(15); §5.107, which authorizes the commission to establish Advisory Committees; and §5.122, which authorizes the commission to delegate uncontested matters to the executive director.

The proposed new sections implement HB 2912, §1.12, Article 6, §18.02, and 18.03. Additionally, the new sections implement TWC, Chapter 5, Subchapter R, §§5.802 - 5.805, 5.127, 5.102, 5.013, 5.103, 5.105, 5.013(15), 5.107, and 5.122.

§25.9.Standards for Environmental Testing Laboratory Accreditation.

Accreditation shall be based on an environmental testing laboratory's conformance to National Environmental Laboratory Accreditation Conference standards approved May 2001 and the requirements of this chapter.

§25.10.Fields of Accreditation.

(a) The executive director shall identify and make available to the public a list of the fields of accreditation offered under this chapter. A list of the fields of accreditation shall be made available on the commission's website and upon request from the Compliance Support Division and Agency Communications.

(b) The executive director may modify the fields of accreditation offered under this chapter after providing 30 days' notice on the commission's website.

§25.12.Initial Application for Accreditation.

(a) An application for accreditation shall be made on a form provided by the executive director. The application must be submitted to the executive director with any documents and records required in the application or requested by the executive director and the fee provided in §25.30 of this title (relating to Accreditation Fees).

(b) The operator of an environmental testing laboratory may request that noncontiguous facilities and mobile laboratories be accredited as a single entity, if the facilities and mobile laboratories operate as a single laboratory under the same:

(1) ownership;

(2) day-to-day management;

(3) day-to-day technical direction; and

(4) quality system, including document management, records management, and test reporting.

(c) The operator of an environmental testing laboratory may submit an application for initial accreditation or an application to increase its fields of accreditation at any time.

§25.14.Term of Accreditation.

(a) The executive director shall award accreditation for a period of one year if an environmental testing laboratory's application and operations conform to the National Environmental Laboratory Accreditation Conference (NELAC) standards and this chapter.

(b) The executive director may issue an interim accreditation for up to 12 months to an environmental testing laboratory that meets the NELAC standards and requirements of this chapter except when an environmental testing laboratory assessment has not been completed because the executive director has been unable to schedule an assessment within six months of receiving a complete application for accreditation.

§25.16.Renewal Application for Accreditation.

(a) The executive director must receive an environmental testing laboratory's application to renew the laboratory's accreditation along with the applicable fees no later than the date on which the accreditation expires.

(b) The operator of an environmental testing laboratory that fails to submit an application to renew accreditation before the date on which the accreditation expires must apply for and meet all requirements for a new accreditation, including an environmental testing laboratory assessment.

(c) Modifications made during the term of an accreditation to increase the number of an environmental testing laboratory's fields of accreditation shall be renewed on the accreditation renewal date, regardless of the date of the modification.

§25.18.Environmental Testing Laboratory Assessments.

(a) Environmental testing laboratory assessments shall be conducted:

(1) before accreditation is granted, except as provided in §25.14 of this title (relating to Term of Accreditation); and

(2) at least every two years after an environmental testing laboratory receives accreditation.

(b) Assessments may be announced or unannounced.

§25.20.Proficiency Test Sample Analyses.

(a) The operator of an environmental testing laboratory applying for initial accreditation shall ensure that two proficiency test samples are successfully analyzed, according to National Environmental Laboratory Accreditation Conference (NELAC) standards, for each requested field of accreditation.

(b) The operator of an accredited environmental testing laboratory shall ensure at least two proficiency test samples are analyzed each year for each field of accreditation according to NELAC standards. An environmental testing laboratory that does not meet the requirements of the subsection may participate in a supplemental proficiency test study according to the NELAC standards.

(c) The executive director shall determine the environmental testing laboratory's accreditation status for all affected fields of accreditation within 60 days of determining that laboratory personnel failed to analyze proficiency test samples successfully according to NELAC standards.

(d) Proficiency test samples, if available, shall be purchased from a National Environmental Laboratory Accreditation Program designated provider.

§25.22.Secondary Accreditation of Out-of-State Environmental Testing Laboratories.

(a) The executive director shall grant or renew the secondary accreditation of an environmental testing laboratory located in another state and accredited by another National Environmental Laboratory Accreditation Program accrediting authority within 30 days after receiving a complete application along with the appropriate fee according to §25.30 of this title (relating to Accreditation Fees) if the laboratory's existing accreditation includes the fields of accreditation for which the laboratory has applied to the executive director.

(b) The executive director shall notify an environmental testing laboratory in writing within 30 days of granting or denying accreditation.

§25.24.Duties and Responsibilities of Accredited Environmental Testing Laboratories.

By applying for or accepting accreditation, the operator of the laboratory certifies the information contained in the application is true and correct and agrees to:

(1) provide reasonable access to the executive director to facilities, personnel, documents, records, data, analyses, and operations which the executive director determines are necessary for accreditation;

(2) use and display the accreditation certificate according to the National Environmental Laboratory Accreditation Conference (NELAC) standards; and

(3) operate the environmental testing laboratory and maintain its accreditation according to the NELAC standards and this chapter.

§25.26.Withdrawal from Accreditation Program.

The operator of an environmental testing laboratory may surrender the laboratory's accreditation, inwhole or in part, by notifying the executive director in writing at any time.

§25.30.Accreditation Fees.

(a) The executive director shall establish accreditation fees that cover program costs, including costs associated with application review; initial, routine, and follow-up inspections; and preparation of reports.

(b) The operator of an environmental testing laboratory seeking primary accreditation shall pay the following fees:

(1) an annual administrative fee of $500; and

(2) an annual accreditation fee based on the categories for which the laboratory is accredited.

(c) The operator of an environmental testing laboratory seeking secondary accreditation shall pay the following fees:

(1) an annual administrative fee of $250; and

(2) an annual accreditation fee based on the categories for which the laboratory is accredited.

(d) For accreditation relating to drinking water, the categories and annual fees are:

(1) microbiology -- $75;

(2) radiochemistry -- $225;

(3) metals -- $225;

(4) general chemistry -- $225;

(5) disinfection by-products -- $150;

(6) volatile organic compounds by gas chromatograph mass spectrometry -- $150;

(7) semivolatile organic compounds by gas chromatograph mass spectrometry -- $150;

(8) organic compounds by gas chromatography using detection other than mass spectrometry -- $300;

(9) organic compounds by high performance liquid chromatography -- $300;

(10) polychlorinated dibenzo-p-dioxins and dibenzofurans -- $150; and

(11) asbestos -- $150.

(e) For accreditation relating to non-potable water, the categories and annual fees are:

(1) microbiology -- $75;

(2) aquatic toxicity -- $150;

(3) radiochemistry -- $150;

(4) metals -- $225;

(5) general chemistry -- $225;

(6) volatile organic compounds by gas chromatograph mass spectrometry -- $150;

(7) semivolatile organic compounds by gas chromatograph mass spectrometry -- $150;

(8) organic compounds by gas chromatography:

(A) total petroleum hydrocarbons by agency methods 1005 only -- $150; and

(B) all compounds -- $300;

(9) organic compounds by high performance liquid chromatography -- $300;

(10) polychlorinated dibenzo-p-dioxins and dibenzofurans -- $150; and

(11) asbestos -- $150.

(f) For accreditation relating to biologic tissue, the categories and annual fees are:

(1) radiochemistry -- $150;

(2) metals -- $225;

(3) general chemistry -- $225;

(4) volatile organic compounds by gas chromatograph mass spectrometry -- $150;

(5) semivolatile organic compounds by gas chromatograph mass spectrometry -- $150;

(6) organic compounds by gas chromatography -- $300;

(7) organic compounds by high performance liquid chromatography -- $300; and

(8) polychlorinated dibenzo-p-dioxins and dibenzofurans -- $150.

(g) For accreditation relating to solid and chemical materials, the categories and annual fees are:

(1) microbiology -- $75;

(2) radiochemistry -- $150;

(3) metals -- $225;

(4) waste characteristics -- $150;

(5) general chemistry -- $225;

(6) volatile organic compounds by gas chromatograph mass spectrometry -- $150;

(7) semivolatile organic compounds by gas chromatograph mass spectrometry -- $150;

(8) organic compounds by gas chromatography:

(A) total petroleum hydrocarbons by agency method 1005 only -- $150; and

(B) all compounds -- $300;

(9) organic compounds by high performance liquid chromatography -- $300;

(10) polychlorinated dibenzo-p-dioxins and dibenzofurans -- $150; and

(11) asbestos -- $150.

(h) For accreditation relating to air, the categories and annual fees are:

(1) radiochemistry -- $150;

(2) particulate matter -- $75;

(3) metals -- $225;

(4) general chemistry -- $150;

(5) volatile organic compounds by gas chromatograph mass spectrometry -- $150;

(6) semivolatile organic compounds by gas chromatograph mass spectrometry -- $150;

(7) organic compounds by gas chromatography -- $300;

(8) organic compounds by high performance liquid chromatography -- $300;

(9) polychlorinated dibenzo-p-dioxins and dibenzofurans -- $150; and

(10) asbestos and airborne fibers by microscopy -- $150.

(i) The operator of an environmental testing laboratory located in another state and applying for primary accreditation shall also pay a fee equal to the reasonable travel costs (including transportation, lodging, per diem, and any telephone charges) associated with conducting an assessment at the laboratory.

(j) The following fees shall be assessed, as applicable, in addition to the annual administrative and category fees and travel costs:

(1) to modify an existing accreditation and add one or more fields of accreditation - $250;

(2) to replace an accreditation certificate -- $50; and

(3) to reinstate a suspended accreditation -- $250.

(k) All fees are nonrefundable.

§25.32.Denial of Accreditation Application.

(a) Insufficiency. The executive director may deny an initial or renewal application for environmental testing laboratory accreditation for insufficiency. The executive director shall notify the laboratory of the intent to deny the application and advise the applicant of the opportunity to file a motion to overturn under §50.139 of this title (relating to Motion to Overturn Executive Director's Decision). The executive director may determine an application is insufficient if laboratory personnel fail to:

(1) submit a completed application;

(2) submit the required fees;

(3) successfully analyze and report proficiency test samples;

(4) implement a quality system;

(5) document that laboratory personnel meet personnel qualifications of education, training, and experience;

(6) allow the executive director entry during normal business hours for an environmental testing laboratory assessment;

(7) pass required environmental testing laboratory assessments;

(8) submit a report identifying actions the environmental testing laboratory will take to correct the deficiencies identified in the environmental testing laboratory assessment report within 30 days of receiving an assessment report; or

(9) implement actions to correct the deficiencies identified in the environmental testing laboratory assessment report within the time approved by the executive director.

(b) Cause. After notice and opportunity for hearing, the commission may deny an environmental testing laboratory's initial or renewal application for accreditation if:

(1) laboratory personnel misrepresent any fact pertinent to receiving or maintaining accreditation; or

(2) the laboratory or its operator is indebted to the state for a fee, penalty, or tax imposed by a statute within the commission's jurisdiction or a rule adopted under such a statute; or

(3) any other reason which causes the executive director to determine that quality of the data being produced by the laboratory's personnel is unreliable or inaccurate, based on the facts of the case.

(c) Waiting period. If the operator of an environmental testing laboratory is not successful in correcting deficiencies as required by the National Environmental Laboratory Accreditation Conference standards and this chapter and the laboratory's application is denied, the laboratory's operator must wait a minimum of six months before reapplying for accreditation.

§25.34.Suspension of Accreditation.

(a) After notice and opportunity for hearing according to Chapter 80 of this title (relating to Contested Case Hearings), the commission may suspend an environmental testing laboratory's accreditation, in whole or in part, for up to six months. Reasons to suspend an environmental testing laboratory's accreditation include failing to:

(1) maintain a quality system;

(2) comply with minimum performance and quality assurance standards;

(3) maintain records of the laboratory's personnel, operations, data, or analysis;

(4) successfully complete required proficiency tests;

(5) employ staff that meet required personnel qualifications for education, training, and experience; or

(6) notify the executive director of changes in accreditation criteria.

(b) Accreditation shall be reinstated if the executive director determines that the environmental testing laboratory personnel have:

(1) effectively corrected and taken steps to prevent a recurrence of the deficiencies that led to the suspension of accreditation;

(2) complied with all requirements imposed by the executive director or the commission; and

(3) submitted an application for reinstatement that conforms to National Environmental Laboratory Accreditation Conference standards and the requirements of this chapter.

§25.36.Revocation of Accreditation.

(a) After notice and opportunity for hearing according to Chapter 80 of this title (relating to Contested Case Hearings), the commission may revoke an environmental testing laboratory's accreditation, in whole or in part, if the laboratory:

(1) fails to correct deficiencies that led to a suspension of accreditation within six months of the notice of suspension;

(2) fails to submit an acceptable corrective action report in response to an assessment;

(3) fails to implement a corrective action related to any deficiencies noted in the environmental laboratory testing assessment report;

(4) fails to provide required proficiency test sample results;

(5) submits proficiency test sample results generated by another laboratory as its own;

(6) misrepresents any fact pertinent to receiving or maintaining accreditation;

(7) fails to allow the executive director entry during normal business hours for an environmental testing laboratory assessment;

(8) is convicted of charges relating to the falsification of any report relating to a laboratory analysis;

(9) fails to remit fees within the time limit established by the executive director; or

(10) is indebted to the state for a fee, penalty, or tax imposed by a statute within the commission's jurisdiction or a rule adopted under such a statute.

(b) The commission shall revoke an environmental testing laboratory's accreditation for each applicable field of accreditation if, after being suspended due to failure of proficiency test samples, an environmental testing laboratory's analysis of the next proficiency test sample results in three consecutively failed proficiency test samples.

(c) An environmental testing laboratory whose accreditation is revoked shall wait a minimum of one year before reapplying for accreditation, and the laboratory shall meet all requirements for a new accreditation, including an environmental testing laboratory assessment.

§25.38.Accreditation Advisory Committee.

(a) The executive director shall establish a technical advisory committee to assist in interpreting National Environmental Laboratory Accreditation Conference standards and to advise the executive director and the commission on technical matters relating to the accreditation program.

(b) The technical advisory committee shall function according to Texas Water Code, §5.107 and Chapter 5 of this title (relating to Advisory Committees).

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202592

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

Subchapter C. ENVIRONMENTAL TESTING LABORATORY CERTIFICATION

30 TAC §§25.50, 25.52, 25.54, 25.56, 25.58, 25.60, 25.62, 25.64, 25.66, 25.68, 25.70, 25.74, 25.76, 25.78

STATUTORY AUTHORITY

The new sections are proposed under the authority granted to the commission by the Texas Legislature in HB 2912, §1.12, Use of Environmental Testing Laboratory Data and Analysis; Article 6, Accreditation of Environmental Testing Laboratories; §18.02, Transfer of Safe Drinking Water Laboratory Certification Program; and §18.03, Transfer of Environmental Testing Laboratory Certification Program. The new sections will be implemented in accordance with TWC, §5.802, which requires the commission to adopt rules for the administration of an environmental testing laboratory accreditation program; §5.803, which requires the commission to establish a schedule of reasonable accreditation fees; §5.804, which authorizes the commission to adopt rules governing accreditation of an environmental laboratory accredited in another state; §5.805, which requires the commission to adopt rules to implement TWC, Chapter 5, Subchapter R; and §5.127, which allows the commission to accept environmental testing laboratory data and analyses for use in commission decisions regarding any matter under the commission's jurisdiction relating to permits or other authorizations, compliance matters, enforcement actions, or corrective actions only if the data and analyses are prepared by an environmental testing laboratory accredited by the commission under Subchapter R or an environmental testing laboratory described in subsection (b). Additionally, the commission may accept for use in its decisions data and analyses prepared by an on-site or in-house environmental testing laboratory if the laboratory is periodically inspected by the commission; an environmental testing laboratory that is accredited under federal law; or, if the data and analyses are necessary for emergency response activities and the required data and analyses are not otherwise available, an environmental testing laboratory that is not accredited by the commission under Subchapter R or under federal law. Further, the commission by rule may require that data and analyses used in other commission decisions be obtained from an environmental testing laboratory accredited by the commission under Subchapter R. Finally, the commission is required to periodically inspect on-site or in-house environmental testing laboratories described in Subchapter R. These new sections are also proposed under the general authority granted in TWC, §5.102, which authorizes the commission to perform any acts necessary and convenient to the exercise of its jurisdiction and powers; §5.013, which establishes the general jurisdiction of the commission over other areas of responsibility as assigned to the commission under TWC and other laws of the state; TWC, §5.103 and §5.105, which authorize the commission to adopt rules and policies necessary to carry out its responsibilities and duties under TWC, §5.013(15); §5.107, which authorizes the commission to establish Advisory Committees; and §5.122, which authorizes the commission to delegate uncontested matters to the executive director.

The proposed new sections implement HB 2912, §1.12, Article 6, §18.02, and 18.03. Additionally, the new sections implement TWC, Chapter 5, Subchapter R, §§5.802 - 5.805, 5.127, 5.102, 5.013, 5.103, 5.105, 5.013(15), 5.107, and 5.122.

§25.50.Standards for Environmental Testing Laboratory Certification.

Certification of an environmental testing laboratory that analyzes samples for compliance with the Safe Drinking Water Act shall be based on a laboratory's conformance to standards contained in the Manual for the Certification of Laboratories Analyzing Drinking Water , Fourth Edition, EPA 815-B-97-001, March 1997; and the Lab Cert Manual Errata , Labcert Bulletin, EPA-815-N-99-002a, April 1999, published by the EPA, and the requirements of this chapter.

§25.52.Fields of Certification.

(a) The executive director shall identify and make available to the public the fields of certification offered under this chapter. A list of fields of certification shall be made available on the commission's website and upon request from the Compliance Support Division and Agency Communications.

(b) The executive director may modify the fields of certification offered under this chapter with 30 days' notice on the commission's website.

§25.54.Initial Application for Certification.

(a) An application for certification must be made on a form provided by the executive director. The application must be submitted to the executive director with any documents and records required in the application or requested by the executive director and the fee provided in §25.70 of this title (relating to Certification Fees).

(b) The operator of an environmental testing laboratory may request that noncontiguous facilities be certified as a single entity if the facilities operate as a single laboratory under the same:

(1) ownership;

(2) day-to-day management;

(3) day-to-day technical direction; and

(4) quality system, including document management, records management, and test reporting.

(c) The operator of an environmental testing laboratory may submit an application for initial certification or an application to increase its fields of certification at any time.

§25.56.Term of Certification.

(a) The executive director shall award certification for a period of one year if an environmental testing laboratory's application and operations conform to standards for certification and this chapter.

(b) The executive director may issue an interim certification for up to 12 months to an environmental testing laboratory that meets standards for certification and requirements of this chapter except when an environmental testing laboratory assessment has not been completed because the executive director has been unable to schedule the assessment within six months of receiving a complete application for accreditation.

§25.58.Renewal Applications for Certification.

(a) The executive director must receive an environmental testing laboratory's application to renew the laboratory's certification along with the applicable fees no later than the date on which the certification expires.

(b) The operator of an environmental testing laboratory that fails to submit an application to its renew certification before the date on which the certification expires must apply for and meet all requirements for a new certification, including an environmental testing laboratory assessment.

(c) Modifications made during the term of a certification to increase the number of an environmental testing laboratory's fields of certification shall be renewed on the certification renewal date, regardless of the date of the modification.

§25.60.Environmental Testing Laboratory Certification Assessments.

(a) Environmental testing laboratory assessments shall be conducted:

(1) before certification is granted, except as provided in §25.56 of this title (relating to Term of Certification); and

(2) at least every three years after an environmental testing laboratory receives certification.

(b) Assessments may be announced or unannounced.

§25.62.Proficiency Test Sample Analyses.

(a) The operator of an environmental testing laboratory applying for initial certification shall ensure that laboratory personnel successfully analyze one proficiency test sample for each requested field of certification. The proficiency test samples shall be analyzed no more than 12 months prior to submitting the application.

(b) The operator of a certified environmental testing laboratory shall ensure that laboratory personnel analyze at least two proficiency test samples each year approximately six months apart. The operator of a certified environmental testing laboratory shall ensure that laboratory personnel successfully analyze one proficiency test sample for each field of certification each year. An environmental testing laboratory that does not meet the requirements of this subsection may participate in a supplemental proficiency test study.

(c) The executive director shall determine the environmental testing laboratory's certification status for all affected fields of certification within 60 days of determining that laboratory personnel failed to analyze proficiency test samples successfully according to this subsection.

(d) Proficiency test samples shall be purchased from a provider approved by the National Institute for Standards and Technology, if available.

§25.64.Secondary Certification of Out-of-State Environmental Testing Laboratories.

(a) The executive director shall grant or renew within 30 days of receipt of the application the secondary certification of an environmental testing laboratory located in another state that is certified by the EPA or a state other than Texas if the:

(1) laboratory submits an application to the executive director that conforms to the standards for certification and this chapter;

(2) laboratory's existing certification includes the fields of certification for which the laboratory has applied to the executive director; and

(3) laboratory pays fees assessed under this chapter.

(b) The executive director shall notify an environmental testing laboratory in writing within 30 days of granting or denying certification.

§25.66.Duties and Responsibilities of Certified Laboratories.

By applying for or accepting certification, the operator of an environmental testing laboratory certifies that information contained in the application is true and correct and agrees to:

(1) provide reasonable access to the executive director to facilities, personnel, documents, records, data, analyses, and operations which the executive director determines are necessary for certification; and

(2) operate the environmental testing laboratory and maintain its certification according to the standards for certification and this chapter.

§25.68.Withdrawal from Certification Program.

The operator of an environmental testing laboratory may surrender the laboratory's certification, in whole or in part, by notifying the executive director in writing at any time.

§25.70.Certification Fees.

(a) The executive director shall establish certification fees that cover program costs, including costs associated with application review; initial, routine, and follow-up inspections; and preparation of reports.

(b) The operator of a laboratory seeking primary certification shall pay the following fees:

(1) an administrative fee of $500 per year; and

(2) an annual certification fee based on the categories for which the laboratory is certified.

(c) The operator of a laboratory seeking secondary certification shall pay the following fees:

(1) an administrative fee of $250 per year; and

(2) an annual certification fee based on the categories for which the laboratory is certified.

(d) The categories and annual fees are:

(1) microbiology -- $75;

(2) radiochemistry -- $225;

(3) metals -- $225;

(4) general chemistry -- $225;

(5) disinfection by-products -- $150;

(6) volatile organic compounds by gas chromatograph mass spectrometry -- $150;

(7) semivolatile organic compounds by gas chromatograph mass spectrometry -- $150;

(8) organic compounds by gas chromatography using detection other than mass spectrometry -- $300;

(9) organic compounds by high performance liquid chromatography -- $300;

(10) polychlorinated dibenzo-p-dioxins and dibenzofurans -- $150; and

(11) asbestos -- $150.

(e) The operator of an environmental testing laboratory located in another state and applying for primary certification shall also pay a fee equal to the reasonable travel costs (including transportation, lodging, per diem, and telephone and duplication charges) associated with conducting an assessment at the laboratory.

(f) The following fees shall be assessed, as applicable, in addition to the annual administrative and category fees and travel costs:

(1) to modify an existing certification and add one or more fields of certification -- $250;

(2) to replace a certification certificate -- $50; and

(3) to reinstate a suspended certification -- $250.

(g) All fees are nonrefundable.

§25.74.Denial of Certification Application.

(a) Insufficiency. The executive director may deny an initial or renewal application for environmental testing laboratory certification for insufficiency. The executive director shall notify the laboratory of the intent to deny the application and advise the applicant of the opportunity to file a motion to overturn under §50.139 of this title (relating to Motion to Overturn Executive Director's Decision). The executive director may determine an application is insufficient if laboratory personnel fail to:

(1) submit a completed application;

(2) submit the required fees;

(3) successfully analyze and report proficiency test samples;

(4) implement a quality system;

(5) document that laboratory personnel meet personnel qualifications of education, training, and experience;

(6) allow the executive director entry during normal business hours for an environmental testing laboratory assessment;

(7) pass required environmental testing laboratory assessments;

(8) submit a report identifying actions the environmental testing laboratory will take to correct the deficiencies identified in the environmental testing laboratory assessment report within 30 days of receiving an assessment report; or

(9) implement actions to correct the deficiencies identified in the environmental testing laboratory assessment report within the time approved by the executive director.

(b) Cause. After notice and opportunity for hearing, the commission may deny an environmental testing laboratory's initial or renewal application for certification if:

(1) laboratory personnel misrepresent any fact pertinent to receiving or maintaining certification; or

(2) the laboratory or its operator is indebted to the state for a fee, penalty, or tax imposed by a statute within the commission's jurisdiction or a rule adopted under such a statute.

(3) any other reason which causes the executive director to determine that quality of the data being produced by the laboratory's personnel is unreliable or inaccurate, based on the facts of the case.

§25.76.Suspension of Certification.

(a) After notice and opportunity for hearing according to Chapter 80 of this title (relating to Contested Case Hearings), the commission may suspend an environmental testing laboratory's certification, in whole or in part, for at least 30 days and up to six months. Reasons to suspend an environmental testing laboratory's certification include failing to:

(1) maintain a quality system;

(2) comply with minimum performance and quality assurance standards;

(3) maintain records of the laboratory's personnel, operations, data, or analysis;

(4) successfully complete required proficiency tests;

(5) employ staff that meet required personnel qualifications for education, training, and experience; or

(6) notify the executive director of changes in certification criteria.

(b) Certification shall be reinstated if the executive director determines the environmental testing laboratory's personnel have:

(1) effectively corrected and taken steps to prevent a recurrence of the deficiencies that led to the suspension of certification;

(2) complied with all requirements imposed by the executive director or the commission; and

(3) submitted an application for reinstatement which conforms to the standards for certification and this chapter.

§25.78.Revocation of Certification.

(a) After notice and opportunity for hearing according to Chapter 80 of this title (relating to Contested Cae Hearings), the commission may revoke a laboratory's certification, in whole or in part, if the laboratory:

(1) fails to correct deficiencies that led to a suspension of certification within six months of the notice of suspension;

(2) fails to submit an acceptable report identifying actions the environmental testing laboratory will take to correct deficiencies identified in the environmental testing laboratory assessment;

(3) fails to implement actions to correct deficiencies identified during an environmental testing laboratory assessment;

(4) fails to complete required proficiency test studies;

(5) submits proficiency test sample results generated by another laboratory as its own;

(6) misrepresents any fact pertinent to receiving and maintaining certification;

(7) fails to allow the executive director entry during normal business hours for an environmental testing laboratory assessment;

(8) is convicted of charges relating to the falsification of any report relating to a laboratory analysis;

(9) fails to remit fees within the time limit established by the executive director; or

(10) is indebted to the state for a fee, penalty, or tax imposed by a statute within the commission's jurisdiction or a rule adopted under such a statute.

(b) The commission shall revoke an environmental testing laboratory's certification for each applicable field of certification if, after being suspended due to failure of proficiency test samples, a laboratory fails to successfully analyze the next proficiency test sample.

(c) A laboratory whose certification is revoked must wait a minimum of one year before reapplying for certification. The laboratory must meet all requirements for a new certification, including an environmental testing laboratory assessment.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202593

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

Chapter 113. STANDARDS OF PERFORMANCE FOR HAZARDOUS AIR POLLUTANTS AND FOR DESIGNATED FACILITIES AND POLLUTANTS

Subchapter E. CONSOLIDATED FEDERAL AIR RULES (CAR): SYNTHETIC ORGANIC CHEMICAL MANUFACTURING INDUSTRY (SOCMI) {FCAA, §112, 40 CFR PART 65}

30 TAC §§113.3000, 113.3020, 113.3030, 113.3040, 113.3050, 113.3060

The Texas Natural Resource Conservation Commission (commission) proposes new Subchapter E, Consolidated Federal Air Rules (CAR): Synthetic Organic Chemical Manufacturing Industry (SOCMI) {FCAA, §112, 40 CFR Part 65} , §§113.3000, 113.3020, 113.3030, 113.3040, 113.3050, and 113.3060.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

In new Subchapter E, the commission proposes to adopt by reference, without any changes, all six Environmental Protection Agency (EPA) requirements in 40 Code of Federal Regulations (CFR) Part 65 - Consolidated Federal Air Rule (CAR): Synthetic Organic Chemical Manufacturing Industry (SOCMI) . In promulgating the CAR regulations, the EPA consolidated major portions of several new source performance standards (NSPS) and national emission standards for hazardous air pollutants (NESHAP) applicable to storage vessels, process vents, transfer operations, and equipment leaks within the SOCMI. The promulgated rule pulled together applicable federal SOCMI rules into one integrated set of rules in order to simplify, clarify, and improve implementation of the existing rules with which source owners or operators must comply. The CAR is an optional compliance alternative for a SOCMI source.

As other CAR standards continue to be promulgated, they will be reviewed for compatibility with current state regulations and policies. The commission will then incorporate them into Chapter 113 through formal rulemaking procedures.

SECTION BY SECTION DISCUSSION

Section 113.3000, General Provisions (40 CFR Part 65, Subpart A)

The commission proposes new §113.3000, which will adopt by reference and without change 40 CFR Part 65, Subpart A. On December 14, 2000, EPA issued the final rule for 40 CFR Part 65, Subpart A. This new subpart addresses the administrative aspects of the regulation (for example, where to send reports, timing of periodic reports, definitions, or how to request an alternative means of emission limitation) and those provisions which are widely applicable to all sources (for example, prohibitions and operation/maintenance requirements).

Section 113.3020, Storage Vessels (40 CFR Part 65, Subpart C)

The commission proposes new §113.3020, which will adopt by reference and without change 40 CFR Part 65, Subpart C. On December 14, 2000, EPA issued the final rule for 40 CFR Part 65, Subpart C. This new subpart addresses the compliance options for storage vessels.

Section 113.3030, Process Vents (40 CFR Part 65, Subpart D)

The commission proposes new §113.3030, which will adopt by reference and without change 40 CFR Part 65, Subpart D. On December 14, 2000, EPA issued the final rule for 40 CFR Part 65, Subpart D. This new subpart addresses the compliance options for process vents.

Section 113.3040, Transfer Racks (40 CFR Part 65, Subpart E)

The commission proposes new §113.3040, which will adopt by reference and without change 40 CFR Part 65, Subpart E. On December 14, 2000, EPA issued the final rule for 40 CFR Part 65, Subpart E. This new subpart addresses the compliance options for transfer racks.

Section 113.3050, Equipment Leaks (40 CFR Part 65, Subpart F)

The commission proposes new §113.3050, which will adopt by reference and without change 40 CFR Part 65, Subpart F. On December 14, 2000, EPA issued the final rule for 40 CFR Part 65, Subpart F. This new subpart addresses the compliance options for equipment leaks.

Section 113.3060, Closed Vent Systems, Control Devices, and Routing to a Fuel Gas System or a Process (40 CFR Part 65, Subpart G)

The commission proposes a new §113.3060, which will adopt by reference and without change 40 CFR Part 65, Subpart G. On December 14, 2000, EPA issued the final rule for 40 CFR Part 65, Subpart G. This new subpart contains the compliance options for closed-vent systems, control devices, and the routing of vent streams to fuel gas systems or process equipment, including testing, monitoring, data handling, reporting and recordkeeping, and chemical manufacturing process unit provisions.

EFFECT ON SITES SUBJECT TO THE FEDERAL OPERATING PERMITS PROGRAM

Since Chapter 113 is an applicable requirement under 30 TAC Chapter 122, Federal Operating Permits , owners or operators subject to the Federal Operating Permit Program must be consistent with the revision process in Chapter 122 and revise their operating permits to include the revised requirements for each emission unit affected by the revisions to Chapter 113 at their sites.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Technical Specialist with Strategic Planning and Appropriations, determined that for the first five-year period the proposed rules are in effect, no significant fiscal implications are anticipated for the agency or other units of state and local government due to administration and enforcement of the proposed rules. The purpose of the proposed rules is to adopt by reference new CAR SOCMI regulations, which consolidated major portions of several NSPS and NESHAP applicable to storage vessels, process vents, transfer operations, and equipment leaks within synthetic organic chemical manufacturing operations. The proposed rules are not anticipated to result in additional costs to the regulated community beyond what is already required to comply with current federal and state regulations.

PUBLIC BENEFITS AND COSTS

Mr. Davis also determined that for each year of the first five years the proposed rules are in effect, the public benefit anticipated from enforcement of and compliance with the proposed rules will be increased consistency between federal and state air quality regulations, and conformance with the requirements of the FCAA.

There are no additional fiscal implications anticipated to affected owners and operators beyond what is already required to comply with current state and federal regulations. This rulemaking is intended to adopt by reference new CAR SOCMI regulations, which consolidated major portions of several NSPS and NESHAP applicable to storage vessels, process vents, transfer operations, and equipment leaks within synthetic organic chemical manufacturing operations. The proposed rules affect certain sources which will be required to comply with current state and federal standards whether or not the commission adopts the standards or takes delegation from EPA.

SMALL BUSINESS AND MICRO-BUSINESS ASSESSMENT

No adverse fiscal implications are anticipated for small and micro-businesses as a result of implementation and enforcement of the proposed rules, which are intended to adopt by reference new CAR SOCMI regulations, which consolidated major portions of several NSPS and NESHAP applicable to storage vessels, process vents, transfer operations, and equipment leaks within synthetic organic chemical manufacturing operations. The proposed rules are not anticipated to result in additional costs to the regulated community beyond what is already required to comply with current federal and state regulations.

LOCAL EMPLOYMENT IMPACT STATEMENT

The commission reviewed this proposed rulemaking and determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the rulemaking does not meet the definition of a "major environmental rule" as defined in that statute. "Major environmental rule" means a rule, with the specific intent of which, is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The specific intent of the proposed rules is to adopt EPA's optional CAR without addition or revision. Certain sources will be affected, but these sources are required to comply with the federal standards whether or not the commission adopts the standards or obtains delegation from EPA. The proposed rules are not anticipated to add any significant additional costs to affected individuals or businesses beyond the existing requirements to comply with the federal standards. The proposed rules are intended to protect the environment but are not anticipated to have material adverse effects on the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state beyond what is already required by federal standards. In addition, §2001.0225 only applies to a major environmental rule, the result of which is to: 1.) exceed a standard set by federal law, unless the rule is specifically required by state law; 2.) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3.) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4.) adopt a rule solely under the general powers of the agency instead of under a specific state law.

This rulemaking does not meet any of these four applicability requirements of a "major environmental rule." Specifically, the standards in this proposal are federal standards that will be adopted by reference without modification or substitution, and therefore will not exceed any standard set by federal law. This proposal is not an express requirement of state law. It contains only regulations developed by the EPA. The proposed rules do not exceed a requirement of a delegation agreement or a contract between state and federal government. The proposed rules were not developed solely under the general powers of the agency, but are proposed under the Texas Health and Safety Code (THSC) and the Texas Clean Air Act (TCAA), §382.011, which requires the commission to establish the level of quality to be maintained in the state's air; §382.012, which requires the commission to prepare and develop a general, comprehensive plan for the proper control of the state's air; and §382.051, which requires the commission to adopt rules as necessary to comply with changes in federal law or regulations applicable to air permits.

TAKINGS IMPACT ASSESSMENT

The commission evaluated this rulemaking and did an analysis of whether the proposed rules are subject to Texas Government Code, Chapter 2007. The specific intent of the proposed rules is to adopt EPA's optional CAR without addition or revision. Under federal law, the affected industries will have the option to implement CAR standards regardless of whether the commission or EPA is the agency responsible for administration of the standards. This rulemaking will not burden private real property. Therefore this rulemaking will not constitute a takings under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission determined that the proposed rulemaking relates to an action or actions subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act of 1991, as amended (Texas Natural Resources Code, §§33.201 et seq .), and the commission's rules in 30 TAC Chapter 281, Subchapter B, concerning Consistency with the Coastal Management Program. As required by 31 TAC §505.11(b)(2) and 30 TAC §281.45(a)(3), relating to actions and rules subject to the CMP, commission rules governing air pollutant emissions must be consistent with the applicable goals and policies of the CMP. The commission reviewed this proposed action for consistency with the CMP goals and policies in accordance with the rules of the Coastal Coordination Council, and determined that the proposed action is consistent with the applicable CMP goals and policies. This proposed rulemaking is consistent with the goal expressed in 31 TAC §501.12(1) of protecting and preserving the quality and value of coastal natural resource areas. The CMP policy applicable to this rulemaking action is the policy that commission rules comply with regulations in 40 CFR to protect and enhance air quality in the coastal area (31 TAC §501.14(q)). This proposal will adopt by reference, all subparts presently adopted under 40 CFR Part 65 without changes, and is therefore, consistent with this policy. Interested persons may submit comments on the consistency of the proposed rules with the CMP during the public comment period.

PUBLIC HEARING

A public hearing on this proposal will be held in Austin on June 4, 2002, at 2:00 p.m. in Building B, Room 201A of the commission's central office, located at 12100 Park 35 Circle. The hearing is structured for the receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon in order of registration. Open discussion will not occur during the hearing; however, an agency staff member will be available to discuss the proposal 30 minutes prior to the hearing and will answer questions before and after the hearing.

Persons with disabilities who have special communication or other accommodation needs who are planning to attend the hearings should contact the agency at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Comments may be submitted to Patricia Durón, Office of Environmental Policy, Analysis, and Assessment, MC 205, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. All comments should reference Rule Log Number 2002-036b-113-AI. Comments must be received by 5:00 p.m., June 10, 2002. For further information or questions concerning this proposal, contact Keith Sheedy, Office of Compliance and Enforcement at (512) 239-1556 or Auburn Mitchell, Office of Environmental Policy, Analysis and Assessment, (512) 239-1873.

STATUTORY AUTHORITY

The new sections are proposed under THSC, TCAA, §382.011, which requires the commission to establish the level of quality to be maintained in the state's air; §382.012, which requires the commission to prepare and develop a general, comprehensive plan for the proper control of the state's air; §382.016, concerning monitoring requirements and examination of records; §382.017, which provides the commission with the authority to adopt rules consistent with the policy and purposes of the TCAA; and §382.051, which requires the commission to adopt rules as necessary to comply with changes in federal law or regulations applicable to permits issued under the TCAA.

These proposed new sections implement THSC, §382.012, State Air Control Plan; §382.017, Rules; and §382.051, Permitting Authority of Commission; Rules.

§113.3000.General Provisions (40 CFR Part 65, Subpart A).

The general provisions for the Consolidated Federal Air Rule as specified in 40 Code of Federal Regulations Part 65, Subpart A, are incorporated by reference as adopted December 14, 2000 (65 FR 78285).

§113.3020.Storage Vessels (40 CFR Part 65, Subpart C).

The storage vessels standards for the Consolidated Federal Air Rule as specified in 40 Code of Federal Regulations Part 65, Subpart C, are incorporated by reference as adopted December 14, 2000 (65 FR 78285).

§113.3030.Process Vents (40 CFR Part 65, Subpart D).

The process vents standards for the Consolidated Federal Air Rule as specified in 40 Code of Federal Regulations Part 65, Subpart D, are incorporated by reference as adopted December 14, 2000 (65 FR 78285).

§113.3040.Transfer Racks (40 CFR Part 65, Subpart E).

The transfer racks standards for the Consolidated Federal Air Rule as specified in 40 Code of Federal Regulations Part 65, Subpart E, are incorporated by reference as adopted December 14, 2000 (65 FR 78285).

§113.3050.Equipment Leaks (40 CFR Part 65, Subpart F).

The equipment leaks standards for the Consolidated Federal Air Rule as specified in 40 Code of Federal Regulations Part 65, Subpart F, are incorporated by reference as adopted December 14, 2000 (65 FR 78285).

§113.3060.Closed Vent Systems, Control Devices, and Routing to a Fuel Gas System or a Process (40 CFR Part 65, Subpart G).

The closed vent systems, control devices, and routing to a fuel gas system or a process standards for the Consolidated Federal Air Rule as specified in 40 Code of Federal Regulations Part 65, Subpart G, are incorporated by reference as adopted December 14, 2000 (65 FR 78285).

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202610

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-6087

Chapter 293. WATER DISTRICTS

Subchapter B. CREATION OF WATER DISTRICTS

The Texas Natural Resource Conservation Commission (commission) proposes amendments to Subchapter B, Creation of Water Districts, §293.12; and Subchapter L, Dissolution of Districts, §293.131 and §293.132. The commission also proposes the repeal of Subchapter B, Creation of Water Districts, §293.16; Subchapter C, Creation of Groundwater Conservation Districts in Priority Groundwater Management Areas, §293.21; Subchapter D, Appointment of Directors, §293.36 and §293.37; and Subchapter L, Dissolution of Districts, §293.137. The commission also proposes new Subchapter C, Special Requirements for Groundwater Conservation Districts, §§293.17 - 293.23.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

The proposed revisions implement portions of Senate Bill (SB) 2, 77th Texas Legislature, 2001, which amended Texas Water Code (TWC), Chapters 35 and 36 relating to priority groundwater management areas (PGMAs), groundwater management areas (GMAs), and groundwater conservation districts (GCDs). The proposed revisions to Chapter 293 implement SB 2, §§2.26, 2.28, 2.34 - 2.40, 2.48, and 2.55 - 2.57. In a related rulemaking, proposed revisions to 30 TAC Chapter 294, Underground Water Management Areas, which implement SB 2, §§2.22 - 2.29, 2.32, 2.33, and 13.02, also appear in this issue of the Texas Register .

Proposed modifications to Chapter 293 implement SB 2 provisions that change commission processes and procedures for the creation of GCDs in GMAs and in PGMAs, and commission enforcement options and procedures relating to GCD management planning and joint planning. The proposed rules revise agency processes to streamline creation of GCDs in response to landowner petitions in accordance with TWC, §§36.013 - 36.016 as amended by SB 2. These proposed changes provide for commission certification of a complete petition submittal replacing a detailed engineering report evaluation; provide for a public hearing replacing a contested case hearing; and provide specific, limited bases for commission rejection of a landowner GCD-creation petition.

The proposed rules also implement TWC, §36.0151 by revising agency processes on the commission-creation of GCDs in a designated PGMA. In the streamlined PGMA designation process, the commission may create a GCD on its own motion under certain situations. The proposed rules change GCD creation in PGMAs designated after September 1, 2001 from a contested case hearing to a commission order without hearing. The proposed rules provide a procedure for creation of GCDs in a PGMA designated before September 1, 2001, which would include a district creation hearing process.

The proposed rules implement TWC, §§36.108, 36.3011, 36.303, and 36.3035 by amending and developing new rules relating to commission enforcement responsibilities associated with existing GCD management planning requirements and new joint management planning requirements for GCDs in a common GMA. Under TWC, §36.108, as amended by SB 2, §2.47, a GCD with good cause, may petition for a peer panel review of a GCD if the GCD refused to join in the joint planning process or the GCD has failed to adopt, implement, or enforce its rules to protect groundwater resources. The proposed new rules follow the statute and provide for developing a peer review process with review panel findings subject to commission enforcement actions, adding procedures for requesting the Texas attorney general to place a GCD into receivership, and repealing provisions for removing a GCD's taxing authority as an enforcement action.

The proposed rules repeal existing GCD-specific provisions in §§293.16, 293.21, 293.36, 293.37, and 293.137, and propose new Subchapter C, Special Requirements for Groundwater Conservation Districts, with proposed new provisions that are specific to GCDs. The proposed rules in new Subchapter C consolidate existing GCD-specific provisions that implement existing statutes and implement the new provisions of SB 2. The commission proposes this consolidation of GCD-specific provisions for three reasons. First, all types of water districts are subject to TWC, Chapter 49, Provisions Applicable to All Districts, except for GCDs which are specifically exempted from other laws governing the administration or operation of districts under TWC, §36.052. Secondly, hearings for the creation of all other types of water districts are upon request except for GCDs where public meetings are required by the statute. Lastly, a consolidation of the GCD-specific provisions will allow the public to more easily understand commission processes and commission, landowner, and GCD groundwater management responsibilities.

These proposed revisions are being coordinated with an ongoing rulemaking in 30 TAC Chapter 293 under Rule Log Number 2001-054-293-WT for the implementation of SB 1444; House Bill (HB) 2992; 702; and 2912, Article 20.2, 77th Legislature, 2001. Proposed revisions to Chapter 293 in that rulemaking were published in the April 12, 2002 issue of the Texas Register .

SECTION BY SECTION DISCUSSION

Subchapter B: Creation of Water Districts

Section 293.12, Creation Notice and Actions, is proposed for amendment to remove GCD- specific provisions in subsections (a) and (d) and to reletter the remaining sections. The removed provisions are amended to implement statutory changes and are moved to proposed new §293.18.

Section 293.16, Expansion of an Existing Groundwater Conservation District's Management Authority, is proposed for repeal. Language addressing expansion of an existing GCD's management authority is proposed as new §293.21.

Proposed New Subchapter C: Special Requirements for Groundwater Conservation Districts

Proposed new §293.17, Purpose, states that the purpose of the proposed new subchapter is to implement TWC, Chapter 36 provisions for commission implementation relating to GCD creation and requirements of GCDs. The new subchapter provides the processes and requirements specific to the creation of GCDs on landowner petitions; commission-initiated creation of GCDs in PGMAs; and noncompliance reviews and enforcement relating to GCD failure to meet requirements for management planning and joint planning within a GMA.

Proposed new §293.18, Creation of a Groundwater Conservation District in a Groundwater Management Area, provides procedures for landowner petition submittal and commission action for the creation of GCDs in GMAs. Proposed new subsection (a) provides for the filing and contents of a complete GCD creation submittal. Proposed new subsection (b) provides the requirements and contents of a landowner petition for the creation of a GCD in a GMA. Proposed new subsection (c) provides the requirements for supporting information for the GCD creation submittal. The supporting information is needed by the executive director to evaluate the boundaries, proposed groundwater management projects, temporary director qualifications, petition signatures, financial information for the proposed district, and statements that indicate that copies of the petition have been distributed. Proposed new subsection (d) provides the procedures for executive director review of landowner petitions for the creation of a GCD in a GMA. Proposed new subsection (e) provides for the publication and direct mailing of notice of a complete GCD creation submittal and the time and place of the public meeting to receive comments on a landowner GCD creation petition. The subsection provides that the public meeting must be conducted within 60 days of the notice. Proposed new subsection (f) provides for executive director actions following the public meeting. Proposed new subsection (g) provides a 90-day time frame after the public meeting for commission action on a landowner petition; certification of a complete GCD creation petition that meets statutory requirements; and appointment of temporary directors. The new subsection provides the statutory findings necessary for the commission certification or denial of a GCD creation petition and landowner opportunity to resubmit a denied petition.

Proposed new §293.19, Commission-Initiated Creation of a Groundwater Conservation District in a Priority Groundwater Management Area, provides commission procedures for the creation of GCDs in designated PGMAs. Proposed new subsection (a) provides procedures for commission creation of GCDs in PGMAs designated after September 1, 2001, subject to statutory provisions amended by SB 2. The subsection implements new statutory requirements to identify areas in the PGMA that have not created a GCD and recommend GCD creation consistent with the PGMA designation order. The subsection provides for the executive director's recommendation, in the form of a proposed order, to be filed with the chief clerk and for the chief clerk to mail notice to water stakeholders or any other persons identified in the PGMA designation hearing of the place and time when the commission will consider the GCD-creation action. The commission will not hold an evidentiary hearing on the district creation. Proposed new subsection (b) provides procedures for commission creation of GCDs in PGMAs designated before September 1, 2001. The proposed new section provides for an executive director report to identify areas in pre-September 1, 2001 PGMAs that have not created a GCD and a recommendation of whether to create one or more GCDs, to add the identified areas to an existing GCD, or a combination of these actions. The new subsection provides for mailed and published notice of the executive director's report and recommendations and date, time, and location of a contested case hearing on the report and recommendations. The new subsection is proposed to develop the evidentiary record necessary for commission creation of a GCD in a PGMA. Under the statute prior to SB 2, this evidentiary record was not developed in the PGMA designation process or hearing. The subsection defines the scope of evidentiary hearing considerations on GCD- creation action. Proposed new subsection (c) provides for commission action to create GCDs in PGMAs. The subsection implements new SB 2 requirements and provides for the contents of a commission order; for the appointment of temporary directors by county commissioners courts; and for the temporary directors to call an election to authorize the district, to assess taxes, and to elect permanent directors. Proposed new subsection (d) provides for commission action to recommend that areas in a PGMA designated before September 1, 2001 be added to an existing GCD. The new section refers to procedures provided in proposed new §294.44, Adding a PGMA to an Existing Groundwater Conservation District, which implement SB 2 changes.

Proposed new §293.20, Records and Reports, provides guidance to GCDs related to recordkeeping and reporting. Proposed new subsection (a) provides that GCDs are subject to the requirements of TWC, Chapter 36 and/or the special law if created in such a manner. The commission proposes the new subsection to provide requirements in the statute that the State Auditor's Office and the commission have identified as common areas of noncompliance during recent GCD management plan audits and are subject to enforcement action by the commission. Proposed new subsection (b) provides a listing of documentation that GCDs are required to submit to the commission. This documentation is required by statute or is necessary for the commission to implement its requirements under the statute for enforcement of GCD management plan requirements. The new provision will enable the commission to maintain accurate supervision files of GCDs for the statutory implementation and public inspection. Requirements of the new provision include documentation relating to the creation of the GCD, the election of directors for the GCD, and the changing of boundaries by the GCD. Proposed new subsection (c) provides requirements for the filing of GCD management plans necessary for commission oversight. The proposed new subsection implements existing and new statutes and provides that a GCD must forward a copy of its certified groundwater management plan or amended plan to the regional water planning groups that the GCD is located within, to other GCDs that are located in a common GMA, and to the executive director. The subsection provides that GCDs must provide documentation to the executive director that such action has been taken. Proposed new subsection (d) provides for documentation requests from the executive director to GCDs to determine statutory compliance relating to noncompliance review under TWC, Chapter 36. Proposed new subsection (e) provides that a district shall provide documentation upon request from the executive director to determine compliance with statutory provisions such as management plan enforcement and response to citizen complaints.

Proposed new §293.21, Expansion of an Existing Groundwater Conservation District's Management Authority, provides procedures for amending a commission order creating a GCD. New §293.21 contains the language of repealed §293.16 with revisions. The new section provides the procedures and requirements for a commission-created GCD to petition for the expansion of groundwater management authority to other water-bearing formations within the GCD's boundaries.

Proposed new §293.22, Noncompliance Review and Commission Action, sets out procedures for commission review of GCD noncompliance with requirements of TWC, Chapter 36. Proposed new subsection (a) provides the purpose of the section to set out processes for a GCD to achieve compliance and for commission enforcement procedures and actions if compliance is not achieved. The proposed section is applicable if a GCD fails to: 1) submit a groundwater management plan to the Texas Water Development Board (TWDB) within two years of the date the GCD was confirmed; 2) achieve certification of a groundwater management plan or amended plan from the executive administrator of the TWDB; 3) forward a copy of its certified groundwater management plan to the other GCDs included in a common GMA; 4) be actively engaged and operational in achieving the objectives of its groundwater management plan based on the State Auditor's Office audit of the GCD's performance under its plan; or 5) adopt, implement, or enforce rules to protect groundwater as evidenced in a report prepared by a peer-review panel. Proposed new subsection (b) provides the executive director's noncompliance review process including requirements for a GCD to achieve voluntary compliance though a compliance agreement. Proposed new subsection (c) provides procedures if the executive director and the GCD are not able to resolve noncompliance issues through a compliance agreement. The subsection provides for the executive director to follow procedures for commission enforcement actions set out in 30 TAC Chapter 70, Subchapter C, including a written report filed with the commission and with the GCD.

Proposed new subsection (d) provides for mailed and published notice and hearing if formal enforcement action is necessary to bring a GCD into compliance. The subsection references Chapter 70 for notice procedures and provides additional procedures required by TWC, Chapter 36. Proposed new subsection (e) provides for commission enforcement actions against noncompliant GCDs. The subsection provides that the commission may take a statutorily-authorized action that it finds appropriate including issuing an order requiring the GCD to take certain actions or refrain from taking certain actions, dissolving a GCD's board of directors, requesting the attorney general to bring suit for the appointment of a receiver for the GCD, dissolving the GCD, or recommending legislative actions to address the GCD. Proposed new subsections (f), (g), and (h) provide additional commission procedures relating to GCD dissolution, dissolution of a board of directors, and receivership. These subsections provide specific procedures and actions required of the commission to implement orders taken under subsection (e) against a GCD. Proposed new subsection (i) provides for appeals of commission enforcement orders.

Proposed new §293.23, Groundwater Conservation District Petition Requesting Inquiry in Groundwater Management Area, provides procedures for commission review of GCD petitions that request a peer panel inquiry related to joint groundwater management planning in a GMA as authorized in TWC, Chapter 36. Proposed new subsection (a) provides for the purpose and applicability of the section. Proposed new subsection (b) provides for the contents of the petition and the documentation required to request a commission inquiry. The petition must provide evidence that another GCD in the GMA has failed to adopt rules, the groundwater in the GMA is not adequately protected by the rules adopted by another GCD, or the groundwater in the GMA is not adequately protected due to the failure of another GCD to enforce substantial compliance with its rules. Proposed new subsection (c) provides procedures for commission review and action relating to a petition requesting an inquiry. The subsection provides the time frame for commission review of the petition and the appointment of a review panel if the petition is not dismissed. Proposed new subsection (d) provides requirements for a review panel's report to the commission. The subsection provides that the report must include a summary of evidence taken in any review panel hearing on the petition if hearings were conducted, a list of findings and recommended actions appropriate for the commission to take regarding the petition, and any other information the review panel considers appropriate for commission consideration. Proposed new subsection (e) provides for commission action and the timing of commission action on the review panel's report. The proposed section implements TWC, Chapter 36 and changes to the statute made by SB 2.

Subchapter C: Creation of Groundwater Conservation Districts in Priority Groundwater Management Areas

Existing Subchapter C, which consists of §293.21, Commission Creation of Groundwater Conservation Districts in Priority Groundwater Management Areas, is proposed for repeal because the statute on which it was based has been changed by SB 2 and to allow consolidation and reorganization of GCD rules in a new Subchapter C. Proposed new §293.19 provides new language for commission creation of GCDs in PGMAs to address statutory changes.

Subchapter D: Appointment of Directors

Section 293.36, Appointment of Temporary Directors by Commission for a Groundwater Conservation District, is proposed for repeal. Similar language addressing the appointment of temporary directors for a GCD in a PGMA is proposed in new §293.19 that includes revisions based on SB 2 statutory changes.

Section 293.37, Estimation of Groundwater Use, is proposed for repeal. The repealed section, for purposes of the apportionment of temporary directors for a commission-created multi-county GCD in a PGMA, provided for the executive director to request the estimated groundwater usage by county from the TWDB and for the commission to apportion temporary directors based on this groundwater usage data. Similar provisions addressing estimation of groundwater use related to the appointment of temporary directors for a GCD in a PGMA are proposed in new §293.19. Proposed new §293.19(c)(2) provides for the commission to apportion temporary directors in a commission- created multi-county GCD in PGMA based on the estimated groundwater usage data and information contained in the most current version of the State Water Plan as adopted by the TWDB and other information developed during the designation of the PGMA.

Subchapter L: Dissolution of Districts

Section 293.131, Authorization for Dissolution of Water Districts by the Commission, is amended to remove GCD provisions in subsection (a) and to reletter the remaining subsections. The removed provisions are revised to implement statutory changes and are proposed in new §293.22.

Section 293.132, Notice and Hearing, is amended to remove GCD provisions. The removed provisions are revised to implement statutory changes and are proposed in new §293.22.

Section 293.137, Commission Action for Failure of a Groundwater Conservation District to Submit a Management Plan or to Implement a Certified Plan though its Operations, is proposed for repeal to remove GCD-specific provisions. The removed provisions are revised to implement statutory changes and are proposed in new §293.22.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENT

John Davis, Technical Specialist with Strategic Planning and Appropriations, has determined that for each year of the first five-year period the proposed rules are in effect no significant fiscal implications are expected for the agency or other units of state and local government due to implementation of the proposed rules.

The proposed rules implement certain provisions of SB 2 (an act relating to the development and management of water resources of the state, including the ratification of the creation of certain groundwater conservation districts; providing penalties), 77th Legislature, 2001. The proposed rules will implement SB 2 provisions by changing the agency's process and procedures concerning the creation of GCDs in designated PGMAs and GMAs, and commission enforcement options and procedures relating to GCD management planning. The proposed rules are procedural in nature and are not anticipated to result in significant additional costs for units of state and local government.

PUBLIC BENEFIT AND COSTS

Mr. Davis has also determined that for each of the first five years the proposed rules are in effect the public benefit anticipated as a result of implementing the proposed rules will be potentially improved management of GCDs.

The proposed rules implement certain provisions of SB 2, 77th Legislature, 2001 by changing the agency's process and procedures concerning the creation of GCDs in designated PGMAs and GMAs and commission enforcement options and procedures relating to GCD management planning. The proposed rules are procedural in nature and are not anticipated to result in significant additional costs for individuals and businesses.

SMALL AND MICRO BUSINESS ASSESSMENT

No adverse fiscal implications are anticipated for small or micro-businesses due to implementation of the proposed rules, which are intended to implement certain provisions of SB 2, 77th Legislature, 2001. The proposed rules will implement SB 2 provisions by changing the agency's process and procedures concerning the creation of GCDs in designated PGMAs and commission enforcement options and procedures relating to GCD management planning. The proposed rules are procedural in nature and are not anticipated to result in significant additional costs for small and micro- businesses.

LOCAL EMPLOYMENT IMPACT

The commission has reviewed these proposed rules and determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission has reviewed the rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and has determined that the rulemaking is not subject to §2001.0225 because it does not meet the definition of a "major environmental rule" as defined in that statute. Major environmental rule means a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a section of the state. While these proposed rules will help protect groundwater, they do not adversely affect in a material way the economy, productivity, competition, jobs, the environment, or public health and safety. A GCD may tax property owners and charge fees to well owners, but this will not adversely affect the economy of the area.

In addition, §2001.0225 only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law.

These proposed rules do not meet any of these four applicability requirements of a major environmental rule. These proposed rules implement state legislation and do not exceed that legislation.

TAKINGS IMPACT ASSESSMENT

The commission has prepared a takings impact assessment for these proposed rules under Texas Government Code, §2007.043. The purpose of the rules is to adopt new requirements relating to the administration of GCDs and the commission's supervision over their actions under TWC, Chapter 36, particularly as amended by SB 2, 77th Legislature, 2001. Specifically, the proposed rules implement SB 2 by streamlining the process for creating GCDs where initiated by landowner petition. The proposed rules also implement SB 2 by revising agency processes on the commission creation of GCDs in a designated PGMA. Further, the proposed rules implement SB 2 by amending and developing new rules relating to commission enforcement responsibilities associated with existing GCD management planning requirements for GCDs in a common GCA. These proposed rules promote TWC, Chapter 36 statutory goals of protecting and conserving groundwater and do not adversely affect private real property. If these rules did adversely affect private real property, these rules implement legislation which is action taken out of a reasonable good faith belief that the action is necessary to prevent a grave and immediate threat to property, the groundwater in a district. Therefore, this rulemaking will not constitute a takings under Texas Government Code, Chapter 2007.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The commission reviewed the proposed rules for consistency with the Texas Coastal Management Program (CMP) goals and policies in accordance with the regulations of the Coastal Coordination Act of 1991, as amended (Texas Natural Resources Code, §§33.201 et seq.) and found that the proposal is a rulemaking identified in the Act's Implementation Rules, 31 TAC §505.11(b), relating to Actions and Rules Subject to the Coastal Management Program, or may affect an action/authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11(a)(6), and will, therefore, require that applicable goals and policies of the CMP be considered during the rulemaking process.

The commission determined that the proposed rules are consistent with the applicable CMP goals and policies. CMP goals applicable to the proposed rules include the goal to ensure sound management of all coastal resources by allowing for compatible economic development and multiple human uses of the coastal zone. The specific purpose of the proposed rules is to adopt new requirements relating to the administration of water districts and the commission's supervision over their actions under TWC, Chapter 36, particularly as amended by SB 2, 77th Legislature, 2001. Specifically, the proposed rules implement SB 2 by streamlining the process for creating GCDs where initiated by landowner petition. The proposed rules also implement SB 2 by revising agency processes on the commission creation of GCDs in a designated PGMA. Further, the proposed rules implement SB 2 by amending and developing new rules relating to commission enforcement responsibilities associated with existing GCD management planning requirements for GCDs in a GMA. The promulgation and enforcement of these proposed rules promote CMP goals and policies on management of coastal resources and will not violate or exceed any standards identified in the applicable CMP goals and policies. The commission seeks public comment on the consistency of the proposed rulemaking.

ANNOUNCEMENT OF HEARING

A public hearing on this proposal will be held in Austin on June 4, 2002 at 10:00 a.m. at the Texas Natural Resource Conservation Commission complex in Building F, Room 2210, located at 12100 Park 35 Circle. The hearing will be structured for the receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon in order of registration. There will be no open discussion during the hearing; however, an agency staff member will be available to discuss the proposal 30 minutes prior to the hearing and will answer questions before and after the hearing.

Persons with disabilities who have special communication or other accommodation needs who are planning to attend the hearing should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Comments may be submitted to Angela Slupe, Office of Environmental Policy, Analysis, and Assessment, MC 205, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. All comments should reference Rule Log Number 2001-094-294-WT. Comments must be received by 5:00 pm, June 10, 2002. For further information, contact Auburn Mitchell, Policy and Regulations Division, at (512) 239-1873.

30 TAC §293.12

STATUTORY AUTHORITY

The amendment is proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC; §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state; and TWC, §§36.001, 36.0015, 36.002, 36.011 - 36.015, 36.0151, 36.016, 36.017, 36.0171, 36.019, 36.101, 36.102, 36.1071, 36.1072, 36.108, 36.113, 36.116, 36.117, 36.122, 36.205, 36.206, 36.3011, 36.303, 36.3035 as amended by SB 2.

The proposed amendment implements SB 2, 77th Legislature, 2001.

§293.12.Creation Notice Actions and Requirements.

(a) On receipt by the executive director of all required documentation associated with an application for creation of a district by the commission in accordance with [ pursuant to ] Texas Water Code (TWC), [ ; Chapter 36, Groundwater Conservation Districts; ] Chapter 51, multi-county Water Control & Improvement Districts or single county Water Control and Improvement Districts requesting additional powers; Chapter 54, Municipal Utility Districts; Chapter 55, Water Improvement Districts; Chapter 58, multi-county Irrigation Districts; Chapter 59, Regional Districts; Chapter 65, Special Utility Districts; and Chapter 66, Storm Water Control Districts, the executive director shall notify the chief clerk that the application is administratively complete.

(b) - (c) (No change.)

[ (d) If a petition for the creation of a groundwater conservation district pursuant to Texas Water Code, §36.013 contains a request to create or alter the boundaries of a groundwater management area in all or part of the proposed district, the notice must also be given in accordance with the requirements of Texas Water Code, §35.006 and §§293.21 - 293.25 of this title (relating to Designation of Groundwater Management Areas);]

(d) [ (e) ] For a petition for the creation of a Special Utility District in accordance with TWC [ pursuant to Texas Water Code ], Chapter 65, which includes transfer of the certificate of convenience and necessity, the applicant shall also, unless waived by executive director, mail copies of the notice to customers of the water supply corporation and other affected parties at least 120 days prior to approval. Such notice shall include the following:

(1) name and business address of the district;

(2) a description of the service area involved;

(3) the anticipated effect of the conversion on the operation or the rates and services provided to customers; and

(4) a statement that if a hearing is granted, persons may attend the hearing and participate in the process.

(e) [ (f) ] If a petition for the creation of a Special Utility District in accordance with TWC [ pursuant to Texas Water Code ], Chapter 65, contains a request for approval of an impact fee, the applicant shall comply with the notice provisions of §293.173 of this title (relating to Impact Fee Notice Actions and Requirements).

(f) [ (g) ] The hearing action and notice requirements for Local Government Code, Chapter 375, Municipal Management Districts are as follows . [ : ]

(1) The chief clerk shall send a copy of the notice of hearing to all counties in which the proposed district is located and all municipalities which have extraterritorial jurisdiction in the county or counties in which the proposed district is located and which have formally requested notice of creation of all districts in their county or counties. The chief clerk shall prepare a certificate indicating that notice was properly mailed to any such counties and/or municipalities.

(2) The chief clerk shall send a copy of the notice of hearing to the petitioners, or their agents, who shall:

(A) cause the notice to be published in a newspaper with general circulation in the municipality in which the proposed district is located once a week for two consecutive weeks with the first publication being at least 31 days prior to the date of the commission hearing;

(B) send the notice of the hearing by certified mail, return receipt requested, to all property owners within the district at least 30 days before the hearing.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202595

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

30 TAC §293.16

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Natural Resource Conservation Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

STATUTORY AUTHORITY

The repeal is proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC, and §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state.

The proposed repeal implements SB 2, 77th Legislature, 2001.

§293.16.Expansion of an Existing Groundwater Conservation District's Management Authority.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202596

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

Subchapter C. SPECIAL REQUIREMENTS FOR GROUNDWATER CONSERVATION DISTRICTS

30 TAC §§293.17 - 293.23

STATUTORY AUTHORITY

The new sections are proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC; §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state; and TWC, §§ 36.001, 36.0015, 36.002, 36.011 - 36.015, 36.0151, 36.016, 36.017, 36. 0171, 36.019, 36.101, 36.102, 36.1071, 36.1072, 36.108, 36.113, 36.116, 36.117, 36.122, 36.205, 36.206, 36.3011, 36.303, 36.3035 as amended by SB 2.

The proposed new sections implement SB 2, 77th Legislature, 2001.

§293.17.Purpose.

The purpose of this subchapter is to provide the processes and requirements related to Texas Water Code (TWC), Chapter 36, Groundwater Conservation Districts. The use of the term "district" in this subchapter means groundwater conservation district (GCD) unless the context clearly indicates otherwise. This subchapter provides:

(1) procedures for commission certification of landowner petitions for the creation of GCDs filed under TWC, §36.013;

(2) procedures for the commission, on its own motion, to create GCDs under TWC, §36.0151, in priority groundwater management areas (PGMAs) designated after September 1, 2001;

(3) procedures for the commission, on its own motion, to create GCDs in PGMAs designated before September 1, 2001;

(4) procedures for commission review of GCD management plan noncompliance under TWC, Chapter 36, Subchapter I; and

(5) procedures for GCD joint-planning peer review within a groundwater management area.

§293.18.Creation of a Groundwater Conservation District in a Groundwater Management Area.

(a) Groundwater conservation district creation landowner submittal. An original and one copy of the complete groundwater conservation district (GCD) creation submittal shall be filed with the executive director on behalf of a group of landowners as provided in subsection (b) of this section and shall contain a petition as described in subsection (b) of this section, supporting information as described in subsection (c) of this section, the name and address of a representative designated by the group of landowners for contact purposes, and a $700 non-refundable submittal fee at the time the petition is filed.

(b) Groundwater conservation district petition. A complete district creation petition must be signed by the majority of the landowners in the proposed district or, if there are more than 50 landowners, at least 50 of those landowners. A complete petition must include the following:

(1) the name of the proposed GCD;

(2) the area and boundaries of the proposed district, including a map generally outlining the boundaries of the proposed district;

(3) the purpose or purposes of the proposed district;

(4) if any proposed projects are to be funded by the issuance of bonds or notes, a statement of the general nature of the projects proposed to be undertaken by the proposed district, the necessity and feasibility of the work, and the estimated cost of those projects according to the petitioners;

(5) the names of at least five individuals qualified to serve as temporary directors; and

(6) financial information, including the projected maintenance tax or production fee rate and a proposed budget of revenues and expenses for the proposed district.

(c) Supporting information. As part of the GCD creation submittal, the petitioners must include the following information.

(1) The petitioners must submit the following information about the area and boundaries of the proposed district:

(A) a metes and bounds description of the proposed boundaries of the proposed district if those boundaries differ from an identified, designated groundwater management area (GMA) boundary or political subdivision boundary which existed on the date the petition was submitted;

(B) a vicinity map outlining the boundaries of the proposed district which is 22 inches by 36 inches in size at a minimum, or in a digital data electronic format showing as appropriate the location of municipalities, highways, roads, surface water features, and other water districts, together with the areal extent of groundwater aquifers, and showing the location of recharge (i.e., outcrops of aquifer units, karst features, etc.) and Texas Water Development Board (TWDB) located discharge (i.e., seeps, springs, etc.) features identified with state well number, the downdip limits of usable quality groundwater, and any other information the petitioners believe is pertinent to the creation of the proposed district; and

(C) an evaluation and description of how the boundaries of the proposed district will provide for effective management of the groundwater resources within the proposed district and in the GMA.

(2) If the petitioners propose projects that are to be funded by the issuance of bonds or notes, the petitioners must submit an evaluation of the general nature of the proposed projects to be undertaken by the district, the necessity and feasibility of the work, and the estimated cost of those projects according to the petitioners.

(3) The petitioners must submit affidavits from the individuals named in the petition under subsection (b)(5) of this section, establishing that these individuals are qualified to serve as temporary directors according to Texas Water Code (TWC), §§36.051(b), 36.058, and 36.059(b).

(4) The petitioners must submit financial information that includes the projected maintenance tax rate or production fee rate and a proposed budget of revenues and expenses for the proposed district, and a listing of current tax assessments within the boundaries of the proposed district.

(A) If the petitioners propose to finance the district through maintenance taxes, the petitioners must provide a certification by the central appraisal district(s) within the proposed district which indicates the total tax valuation of all land within the proposed district, as reflected on the current county tax rolls. The petitioners must evaluate the projected maintenance tax rate for the proposed district with the total tax valuation and describe how this revenue source will support the proposed budget of expenses.

(B) If the petitioners propose to finance the district through well production fees, the petitioners must provide the estimated non-exempt groundwater usage, by type, for the proposed district. The petitioners must evaluate the projected production fee rate for the proposed district with the total non- exempt groundwater usage, by type, and describe how this revenue source will support the proposed budget of expenses.

(5) The petitioners must provide a certification by the central appraisal district(s) within the proposed district which indicates that the petitioners are landowners within the proposed district on the date the petition is submitted.

(A) If the tax rolls do not show the petitioners to be the majority of the landowners within the proposed district, then the petitioners shall submit to the executive director a certified copy of the deed(s) tracing title from the person(s) listed on the county tax rolls to establish that the petitioners comprise the majority of the landowners or that at least 50 of the petitioners are landowners in the proposed district.

(B) The executive director may request any additional information to accurately show the ownership of the land to be included in the proposed district.

(6) The petitioners must provide one contact person for all correspondence from the executive director regarding the petition.

(7) The petitioners must provide a signed statement by the appropriate county clerk or city secretary that a copy of the petition for creation of the proposed district was received by each county in whole or in part within the proposed district and by each city in whose corporate limits any part of the proposed district is located.

(8) The executive director may request any other related information as needed to process the district creation petition.

(d) Petition review. The executive director's review of a petition for the creation of a GCD shall be governed by this subsection.

(1) Within 20 working days of receipt, the executive director shall assign the petition a number and determine if the submittal complies with the requirements in subsection (a) of this section.

(A) If a submittal is not complete, the executive director shall notify the petition contact person of the deficiencies of the submittal via certified mail postmarked no later than 20 working days after the submittal was received.

(B) If the petitioners submit additional information within 20 working days of the date of the notice of deficiencies, the executive director shall evaluate the information within 15 working days and, where applicable, shall determine if the submittal complies with subsection (a) of this section.

(C) If the petitioners do not submit the required information within 20 working days of the date of the notice of deficiencies, the executive director shall return the incomplete submittal to the petitioners, and the submittal fee is forfeited.

(2) If a petition proposes the creation of a GCD in an area, in whole or in part, that has not been designated as a GMA, the executive director shall provide notice to the petitioners and to the executive administrator of the TWDB. The commission may not certify the petition until the TWDB has adopted a rule designating a GMA that is coterminous with or includes the boundaries of the proposed district.

(e) Notice and public meeting.

(1) If the executive director determines that the submittal is complete, the executive director shall prepare a public notice for publishing or mailing. The public notice shall:

(A) state that the commission has received a complete submittal for the proposed creation of a GCD;

(B) provide notice of the date, time, and location of a public meeting to receive comments on the petition to create the district;

(C) provide notice of availability of the petition and supporting information; and

(D) provide a general map of the proposed district if the area is not a recognizable political subdivision boundary.

(2) The executive director shall notify the chief clerk that the submittal is complete and shall forward the draft public notice and a mailing list of water stakeholders to the chief clerk. The water stakeholders shall include the governing body of each county, regional water planning group, adjacent GCD, municipality, river authority, water district, or other entity that supplies public drinking water, including each holder of a certificate of convenience and necessity issued by the commission, and each irrigation district located either in whole or in part in the proposed district.

(3) The chief clerk shall mail the notice to the water stakeholders indicating that the petition for the creation of a GCD has been received.

(4) The chief clerk shall mail the notice to the petitioners with instructions for publishing the notice.

(5) The petitioners shall publish notice once a week for two consecutive weeks in one or more newspapers of general circulation in the area of the proposed district. The last publication shall be no later than 30 days before the public meeting. The petitioners must provide proof of publication by publishers affidavit to the chief clerk no later than one week prior to the public meeting.

(6) The petitioners shall post the notice on the bulletin board used for posting legal notices in each county in which all or part of the proposed district is located no later than ten days before the public meeting.

(7) The commission or the executive director shall conduct the public meeting on the petition in a central location within the area of the proposed district. The public meeting shall be held no later than 60 days after the date the chief clerk mailed notice to the petitioners.

(f) Executive director actions. Following the public meeting, the executive director shall file recommendations regarding certification of the petition and the appointment of temporary directors with the chief clerk. The executive director shall summarize the public meeting comments and make a recommendation to the commission on whether the submittal is administratively complete and should be certified.

(g) Commission actions. Not later than 90 days after the date of the public meeting, the commission shall certify the petition as administratively complete. A petition is administratively complete if it complies with the requirements of TWC, §36.013(b) and (c), and subsection (a) of this section.

(1) If the commission certifies the petition as administratively complete, the commission shall issue an order stating that the petition is administratively complete, creating the district, and appointing the temporary directors named in the petition.

(2) The commission shall appoint temporary directors according to §§293.31 - 293.35 of this title (relating to Appointment of Directors; Qualifications of Directors; Commission Appointment of Directors to Fill Vacancies; Form of Affidavit for Appointment as Director; and Reinstatement of a Board Member).

(A) If a temporary director appointed by the commission fails to qualify, or if a vacancy occurs in the office of temporary director, the commission shall appoint an individual to fill the vacancy.

(B) Temporary directors appointed under this paragraph serve until the initial directors are elected and have qualified for office or until the voters fail to approve creation of the district.

(3) The commission may not certify a petition if the commission finds that:

(A) the proposed district cannot be adequately funded to finance required or authorized groundwater management planning, regulatory, and district-operation functions under TWC, Chapter 36 based on the financial information provided by the petitioners; or

(B) the boundaries of the proposed district do not provide for the effective management of the groundwater resources.

(4) The commission may alter the boundaries if such boundaries would facilitate district creation and confirmation and may also alter boundaries to provide for more effective management of groundwater resources. The commission may give preference to boundaries that are coterminous with those of a GMA and may also consider boundaries along existing political subdivision boundaries.

(5) If the commission does not certify the petition, the executive director shall provide to the petitioners in writing the reasons for not certifying the petition. The petitioners may resubmit the petition, without paying an additional fee, if the petition is resubmitted within 90 days after the date the executive director provides the notice. The resubmitted petition will be treated as a new GCD creation submittal.

§293.19.Commission-Initiated Creation of a Groundwater Conservation District in a Priority Groundwater Management Area.

(a) In priority groundwater management areas (PGMAs) designated after September 1, 2001 under §294.42 of this title (relating to Commission Action Concerning Priority Groundwater Management Area Designation), where no groundwater conservation district (GCD) has been created, the executive director shall, after identifying the applicable areas under §294.43(d) and (e) of this title (relating to Actions Required After Priority Groundwater Management Area Designation), recommend district creation for commission action.

(1) The recommendation shall be based on and consistent with the commission's designation order under §294.42 of this title. The executive director's recommendation, in the form of a proposed order, must provide for the purpose, boundary description, minimum financing, and the number of temporary directors for each county for the district.

(2) The executive director's proposed order shall be filed with the chief clerk for commission consideration. The executive director shall prepare a notice and include a mailing list of:

(A) water stakeholders that include the governing body of each county, regional water planning group, adjacent GCD, municipality, river authority, water district, or other entity that supplies public drinking water, including each holder of a certificate of convenience and necessity issued by the commission, and each irrigation district located either in whole or in part in the proposed district; and

(B) any other persons identified in the PGMA designation hearing.

(3) The chief clerk shall give notice of the executive director's recommendation and proposed order and the date of the agenda when the commission will act on the district creation to the water stakeholders and other persons identified in the PGMA designation hearing. The commission shall not hold an evidentiary hearing on the district creation.

(b) In PGMAs designated before September 1, 2001, the executive director, after identifying the areas in the PGMA that have not created a district, shall petition the commission for the creation of a district by preparing a report and filing the report with the chief clerk.

(1) The report shall identify the areas not included in a district and evaluate and recommend whether one or more districts should be created in the identified areas, whether the identified areas should be added to an existing district, or whether a combination of these actions should be taken.

(2) The report shall include the following:

(A) the purpose or purposes of the recommended district creation action or actions;

(B) the name of the recommended district or districts or the name of the existing district if the recommendation is to add the identified areas to an existing district;

(C) the area and boundaries of the recommended district or districts or the recommended area to be added to an existing district, including a map generally outlining the boundaries;

(D) the number of temporary directors for each county in the recommended district or districts;

(E) the feasibility and practicability of the recommended district creation action; and

(F) a mailing list of water stakeholders including the governing body of each county, regional water planning group, adjacent GCD, municipality, river authority, water district, or other entity that supplies public drinking water, including each holder of a certificate of convenience and necessity issued by the commission, and each irrigation district located either in whole or in part in the identified areas.

(3) The executive director shall prepare a public notice for publishing and mailing. The public notice shall:

(A) state that the commission has been petitioned by the executive director to create a GCD;

(B) provide notice of the date, time, and location of a contested case hearing to receive evidence on the petition;

(C) provide notice of the availability of the petition and supporting information; and

(D) provide a general map of the proposed district if the area is not a recognizable political subdivision boundary.

(4) On receipt of the report and notice, the chief clerk shall:

(A) mail notice of the petition to the water stakeholders identified in the executive director's report; and

(B) publish notice in one or more newspapers of general circulation in the area of the proposed district.

(5) The commission shall refer the petition to SOAH for a contested case hearing on the executive director's report and recommendation.

(6) The hearing shall be limited to consideration of the executive director's report and recommendation. The administrative law judge may also consider other district creation options evaluated in the executive director's report. To determine the feasibility and practicability of the recommended district creation action, the administrative law judge shall consider:

(A) whether the recommended district creation action can effectively manage groundwater resources under the authorities provided in Texas Water Code (TWC), Chapter 36;

(B) whether the boundaries of the recommended district creation action provide for the effective management of groundwater resources; and

(C) whether the recommended district creation action can be adequately funded to finance required or authorized groundwater management planning, regulatory, and district operation functions under TWC, Chapter 36.

(7) The administrative law judge shall at the conclusion of the hearing, issue a proposal for decision stating findings, conclusions, and recommendations. The administrative law judge shall file these findings and conclusions with the chief clerk with a request for the petition be set for commission consideration.

(c) If the commission finds the creation of the district or districts is feasible and practicable, it shall issue an order creating the district or districts. The order shall include the purpose of the district, boundary description, minimum maintenance tax or production fee necessary to support the district, and the number of temporary directors for each county in the district according to TWC, §36.0161. The commission order shall direct the commissioners court of the county or counties that are within the district to appoint temporary directors. The commission order shall direct the temporary directors to call and schedule an election to authorize the district to assess taxes and to elect permanent directors.

(1) The commissioners court of the county or counties within the district shall, within 90 days after receiving notification from the commission, appoint temporary directors for the district and notify the commission of the appointments. The commissioners court shall not make any appointments after the expiration of the 90-day period. If fewer temporary directors have been appointed at the expiration of the period than required, the commission shall appoint the additional directors.

(2) If the district contains two or more counties, the commission shall apportion the number of temporary directors to each county based on each county's proportionate amount, to the nearest whole number, of the total estimated groundwater use within the district. The total estimated groundwater usage within the district for each county shall be based on information and data contained in the most current version of the Texas State Water Plan as adopted by the Texas Water Development Board and other information developed under §294.41 of this title (relating to Priority Groundwater Management Area Identification, Study, and Executive Director's Report Concerning Designation).

(3) If a temporary director appointed by the commissioners court fails to qualify according to TWC, §§36.051(b), 36.058, and 36.059(c), or if a vacancy occurs in the office of temporary director, the commissioners court shall appoint an individual to fill the vacancy.

(4) Temporary directors appointed under this subsection shall serve until the initial directors are elected and have qualified for office.

(d) If the commission finds the areas identified in the report provided by subsection (b)(1) of this section should be added to an existing district, the commission shall issue an order recommending the addition of the identified areas to the existing district. The commission and the executive director shall follow the procedures provided under §294.44 of this title (relating to Adding a PGMA to an Existing Groundwater Conservation District).

§293.20.Records and Reporting.

(a) Each groundwater conservation district created according to Texas Water Code (TWC), Chapter 36 shall comply with the statute. Districts created by special acts of the Texas Legislature must comply with all statutory requirements contained in the special act and with the provisions of TWC, Chapter 36 that do not conflict with the special act.

(b) Districts are required to submit to the executive director the following documents:

(1) a certified copy of the legislative act creating the district within 60 days after the district is created;

(2) a certified copy of the order of the district's board of directors canvassing the confirmation election and declaring the confirmation election results according to TWC, §36.017(e);

(3) a certified copy of the order of the district's board of directors changing the boundaries of the district, a metes and bounds description of the boundary change, and a detailed map showing the boundary change within 60 days after the date of any boundary change; and

(4) a written notification to the executive director of the name, mailing address, and date of expiration of term of office of any elected or appointed director within 30 days after the date of the election or appointment according to TWC, §36.054(e).

(c) Each district is required under TWC, §36.1071 to adopt a comprehensive management plan and adopt rules that are necessary to implement the management plan. The management plan must be adopted within two years of the date the district was confirmed by election and certified by the executive administrator of the Texas Water Development Board.

(1) Each district must forward a copy of its certified groundwater management plan to the regional water planning group for the planning region in which the district is located and provide confirmation to the executive director that such action has been taken.

(2) Each district must forward a copy of its certified groundwater management plan to the other districts that are included with the district in a common groundwater management area and provide confirmation to the executive director that such action has been taken.

(3) Each district must provide a copy of an existing, new, or amended certified groundwater management plan to the executive director.

(d) Each district shall provide copies of district documentation or records upon request of the executive director to determine compliance with statutory provisions related to noncompliance review under TWC, Chapter 36, Subchapter I and §293.22 of this title (relating to Management Plan Noncompliance Review and Commission Action).

(e) Each district shall provide copies of district documentation or records upon request of the executive director to determine compliance with statutory provisions.

§293.21.Expansion of an Existing Groundwater Conservation District's Management Authority.

(a) Any groundwater conservation district created by the commission under Texas Water Code (TWC), Chapter 36, to manage a specific groundwater resource may expand its authority to manage other water-bearing formations which are within its territorial boundaries by filing a petition with the commission to amend the order creating the district.

(b) The petition to amend the order creating the district shall describe which water-bearing formations are being proposed for management, specifically addressing the following criteria:

(1) identify the new water-bearing formation which is the subject of the petition and its areal extent within the district, including a map if different from the boundaries of the district;

(2) evaluate and describe how expanding the district's authority to manage the other water-bearing formations will provide for the effective management of groundwater resources in the district;

(3) identify the nature of projects and management issues to be undertaken to address concerns of the water-bearing formation, including necessity and feasibility of the work.

(c) If a confirmation election has been held in the territorial boundaries of the district, no further confirmation election is necessary to add these water-bearing formations to the district.

(d) The notice and public meeting provisions of §293.18(e) of this title (relating to Notice and Public Meeting) shall be followed to add a water-bearing formation to an existing district.

(e) The executive director shall summarize the public meeting comments and file recommendations regarding the petition with the chief clerk.

(f) Not later than 90 days after the date of the public meeting, the commission shall issue an order either authorizing the district to manage the other water-bearing formations or denying the petition if the commission finds that authorizing the district to manage the other water-bearing formations would not provide for the effective management of the groundwater resources. The executive director shall provide a copy of the order to the petitioners.

§293.22.Noncompliance Review and Commission Action.

(a) Purpose. The purpose of this section is to set out procedures for commission review of groundwater conservation district (GCD) noncompliance with requirements of Texas Water Code (TWC), Chapter 36. This section provides a process for a GCD to achieve compliance, enforcement procedures if compliance is not achieved, and commission enforcement actions. A groundwater management plan noncompliance review and commission action are required under TWC as the result of a GCD's failure to:

(1) adopt a groundwater management plan within two years of the date the district was confirmed by election;

(2) achieve certification of a groundwater management plan or amendment of a groundwater management plan with the executive administrator or the Texas Water Development Board as provided by TWC, §36.1072 and §36.1073;

(3) forward a copy of its certified groundwater management plan to the other GCDs that are included with the district in a common groundwater management plan;

(4) be actively engaged and operational in achieving the objectives of its groundwater management plan based on the State Auditor's Office audit of the district's performance as provided by TWC, §36.302; or

(5) adopt, implement, or enforce district rules to protect groundwater as evidenced in a report prepared by a commission-appointed review panel as provided by TWC, §36.108 and §293.23 of this title (relating to Groundwater Conservation District Petition Requesting Inquiry in Groundwater Management Area).

(b) Noncompliance review. The executive director shall investigate the facts and circumstances of any violations of this chapter or order of the commission under this chapter or provisions of TWC, §§36.301, 36.3011, and 36.302.

(1) The executive director may attempt to resolve any noncompliance set out in subsection (a) of this section with the district. After review of the facts and identification of noncompliance issues, the executive director may propose to resolve the issue with the district through a compliance agreement. The compliance agreement must clearly identify the noncompliance issue(s) and provide district actions and a schedule for the district to achieve compliance.

(2) If the executive director proposes a compliance agreement, the district shall be provided a specified time frame not to exceed 60 days after the date of receipt of the compliance agreement, to consider and agree to the terms of the compliance agreement and schedule. If the district wants to negotiate the compliance agreement, it must contact the executive director within ten days of receipt of the compliance agreement so that the final compliance agreement can be considered by the district and its board of directors within the 60-day time frame.

(3) If the district agrees with and signs the compliance agreement, the executive director shall monitor the district's implementation of agreement provisions within the agreed schedule. If the district accomplishes compliance within the agreed schedule, the executive director shall notify the district that it has achieved compliance and is no longer under review by the commission.

(c) Executive director recommendations filed with commission. If unable to resolve the violation under subsection (b) of this section, or if the facts of the noncompliance issue warrant, the executive director shall follow the procedures for commission enforcement actions set out in Chapter 70, Subchapter C of this title (relating to Enforcement). The executive director shall prepare and file a written report with the commission and the district and include any actions the executive director believes the commission should take under TWC, §36.303 and subsection (e) of this section.

(d) Notice and hearing. The commission shall provide notice in accordance with §70.104 of this title (relating to Executive Director's Preliminary Report). If the executive director's report recommends dissolution of a district or of a board of directors or the placement of a district into receivership, the commission shall hold an enforcement hearing.

(1) The commission shall publish notice once each week for two consecutive weeks before the day of the hearing to receive evidence on the dissolution of a district or of a board of directors or the placement of a district into receivership in a newspaper of general circulation in the area in which the district is located with the first publication being 30 days before the day of hearing.

(2) The commission shall give notice of the hearing by first-class mail addressed to the directors of the district according to the last record on file with the executive director.

(e) Commission enforcement actions. In accordance with TWC, §§36.108, 36.301, and 36.302, the commission, after notice and hearing, shall take all actions it considers appropriate, including:

(1) issuing an order requiring the district to take certain actions or to refrain from taking certain actions;

(2) dissolving the board in accordance with TWC, §36.305 and §36.307 and calling an election for the purpose of electing a new board;

(3) requesting the attorney general to bring suit for the appointment of a receiver to collect the assets and carry on the business of the GCD in accordance with TWC, §36.3035;

(4) dissolving the district in accordance with TWC, §§36.304, 36.305, and 36.308; or

(5) recommending to the legislature in the commission's report concerning priority groundwater management areas required by TWC, §35.018, actions the commission deems necessary to accomplish comprehensive management in the district.

(f) District dissolution. TWC, §§36.304 - 36.310 authorize the commission to dissolve any district as defined in TWC, §36.001(1), that is not operational as determined under TWC, §36.302 and has no outstanding bonded indebtedness.

(1) A district that is composed of territory entirely within one county may be dissolved even if it has outstanding indebtedness that matures after the year in which the district is dissolved. If a district is in more than one county, and has outstanding bond indebtedness, it may not be dissolved.

(2) Upon the dissolution of a district by the commission, all assets of the district shall be sold at public auction and the proceeds given to the county if it is a single county district. If it is a multi-county district, the proceeds shall be divided with the counties in proportion to the surface land area in each county served by the district.

(3) The commission shall file a certified copy of an order for the dissolution of a GCD in the deed records of the county or counties in which the district is located. If the district was created by a special Act of the legislature, the commission shall file a certified copy of the order of dissolution with the Secretary of State.

(g) Dissolution of board. If the commission enters an order to dissolve the board of a GCD, the commission shall notify the county commissioners court of each county which contains territory in the district. The commission shall appoint five temporary directors under TWC, §36.016, that shall serve until an election for a new board can be held under TWC, §36.017. However, district confirmation shall not be required for continued existence of the district and shall not be an issue in the election.

(h) Receivership. If the commission enters an order to request the attorney general to bring suit for the appointment of a receiver to collect the assets and carry on the business of a district, the executive director shall forward the order and the request to the attorney general and provide any relevant commission correspondence. The executive director shall assist the attorney general as requested and shall continue to track the status of attorney general actions.

(i) Appeals. Appeals from any commission order issued under this section shall be filed and heard in the district court of any of the counties in which the district is located.

§293.23.Groundwater Conservation District Petition Requesting Inquiry in Groundwater Management Area.

(a) Purpose and applicability. This section provides procedures for commission review of groundwater conservation district (GCD) petitions that request an inquiry related to joint groundwater management planning in a groundwater management area (GMA); commission appointment of the review panel; review panel actions; and executive director actions under Texas Water Code (TWC), §36.108 and §36.3011. Such petitions must be for good cause and filed following the procedures prescribed by this section.

(b) Petition requesting commission inquiry. A GCD with good cause may file a petition with the executive director to request a commission inquiry if the district adopts a resolution calling for joint planning in a GMA and the other district or districts refused to join in the planning process or the process failed to result in adequate planning.

(1) The petition must include documentation that demonstrates that joint planning was requested in the GMA by district resolution. Documentation shall include:

(A) a certified copy of the board resolution calling for joint planning;

(B) evidence that the resolution was received by the other district or districts in the GMA such as a return receipt for certified mail service;

(C) publishers' affidavits of notice if joint meetings were called; and

(D) copies of joint planning meeting minutes certified by the districts that attended the meetings if such meetings were held.

(2) The petition must include a certified statement from the petitioning district's board of directors that describes why the district believes that adequate planning was not achieved in the GMA.

(3) The petition must provide evidence that:

(A) another district in the management area has failed to adopt rules;

(B) the groundwater in the management area is not adequately protected by the rules adopted by another district; or

(C) the groundwater in the management area is not adequately protected due to the failure of another district to enforce substantial compliance with its rules.

(4) The district has shown "good cause" if this subsection is satisfied.

(c) Commission review of petition. The commission shall review the petition not later than 90 days after the date the petition was filed. The commission may dismiss the petition if it finds that the evidence is not sufficient to show that the items contained in subsection (b)(1), (2), or (3) of this section exist. If the commission does not dismiss the petition, it shall appoint a review panel to prepare a written report.

(1) The review panel shall consist of five members.

(A) The commission shall appoint one of the members to serve as the chairman of the review panel. The chairman shall schedule and preside over the proceedings and meetings of the panel.

(B) A director or general manager of a district located outside the management area that is the subject of the petition may be appointed to the review panel.

(C) The commission may not appoint more than two members of the review panel from any one district.

(2) The commission shall appoint a disinterested person to serve as a nonvoting recording secretary for the review panel. The recording secretary may be an employee of the commission. The recording secretary shall record and document the proceedings of the review panel.

(3) The commission may direct the review panel to conduct public hearings at a location in the management area to take evidence on the petition.

(4) According to TWC, §36.108, the review panel shall review the petition and any evidence relevant to the petition and consider and adopt a report to the commission.

(d) Review panel report. The review panel's report must be submitted to the executive director no later than 120 days after the review panel was appointed by the commission. The review panel's report shall include:

(1) if a public hearing is conducted, a summary of evidence taken on the petition;

(2) a list of findings and recommended actions appropriate for the commission to take under TWC, §36.303 and §293.22(e) of this title (relating to Noncompliance Review and Commission Action) and the reasons it finds those commission actions appropriate; and

(3) any other information the panel considers appropriate for commission consideration.

(e) Commission action on review panel report. The executive director or the commission shall take action to implement any or all of the review panel's recommendations if the items contained in subsection (b)(1) - (4) of this section apply. The executive director shall, no later than 45 days after the date the review panel report was received, recommend to the commission or initiate any action considered necessary under TWC, §36.303 and §293.22(b) - (e) of this title.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202597

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

Subchapter C. CREATION OF GROUNDWATER CONSERVATION DISTRICTS IN PRIORITY GROUNDWATER MANAGEMENT AREAS

30 TAC §293.21

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Natural Resource Conservation Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

STATUTORY AUTHORITY

The repeal is proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC, and §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state. The repealed subchapter will be replaced by a reorganized Subchapter C in implementation of SB 2, which amended TWC, Chapters 35 and 36.

This proposed repeal implements SB 2, 77th Legislature, 2001.

§293.21.Commission Creation of Groundwater Conservation Districts in Priority Groundwater Management Areas.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202598

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

Subchapter D. APPOINTMENT OF DIRECTORS

30 TAC §293.36, §293.37

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Natural Resource Conservation Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

STATUTORY AUTHORITY

The repeals are proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC, and §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state and SB 2, which amended TWC, Chapters 35 and 36. Similar provisions to address the repealed sections now appear in §293.19.

The proposed repeals implement SB 2, 77th Legislature, 2001.

§293.36.Appointment of Temporary Directors by Commission for a Groundwater Conservation District.

§293.37.Estimation of Groundwater Use.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202599

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

Subchapter L. DISSOLUTION OF DISTRICTS

30 TAC §293.131, §293.132

STATUTORY AUTHORITY

The amendments are proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC; §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state; and TWC, §§36.001, 36.0015, 36.002, 36.011 - 36.015, 36.0151, 36.016, 36.017, 36. 0171, 36.019, 36.101, 36.102, 36.1071, 36.1072, 36.108, 36.113, 36.116, 36.117, 36.122, 36.205, 36.206, 36.3011, 36.303, 36.3035 as amended by SB 2.

The proposed amendments implement SB 2, 77th Legislature, 2001.

§293.131.Authorization for Dissolution of Water District by the Commission.

[ (a) Texas Water Code, §§36.304 - 36.310 authorize the commission to dissolve any district as defined in Texas Water Code, §36.001(1), a groundwater conservation district, which is not operational as determined under Texas Water Code, §36.302 and has no outstanding bonded indebtedness.]

[ (1) A groundwater conservation district that is composed of territory entirely within one county may be dissolved even if it has outstanding indebtedness that matures after the year in which the district is dissolved.]

[ (2) The procedures set out in §293.137 of this title (relating to Commission Action for Failure of a Groundwater Conservation District to Submit a Management Plan or to Implement a Certified Plan through its Operations) shall apply to these actions.]

[ (3) Upon the dissolution of a groundwater conservation district by the commission, all assets of the district shall be sold at public auction and the proceeds given to the county if it is a single county district. If it is a multi-county district, the proceeds shall be divided with the counties in proportion to the surface land area in each county served by the district.]

[ (b) ] Texas Water Code (TWC) , Chapter 49, Subchapters I and K, §§49.321 - 49.327 authorize the commission to dissolve any district as defined in TWC [ Texas Water Code ], §49.001(1), which is inactive for a period of five consecutive years and has no outstanding bonded indebtedness.

(1) Proceedings for the dissolution of a district may be initiated by the executive director upon his own initiative or upon the receipt of an application filed with the executive director by the owners of land or interests in land within the district which is sought to be dissolved, a member or members of the board of directors of the district, or any other party who can demonstrate an interest in having the district dissolved.

(2) If the dissolution is initiated by a party other than the executive director, the application must include:

(A) a petition on the part of the party requesting dissolution including a statement of the reasons that a dissolution is desirable or necessary;

(B) a statement that the district has been financially dormant for the preceding five-year period for water districts and has performed no functions for the five preceding years and has no outstanding bonded indebtedness;

(C) certified copies of dormancy affidavits submitted pursuant to TWC [ Texas Water Code ], §49.197, for five years for water districts preceding the year in which the application is submitted;

(D) evidence that the district has no outstanding bonded indebtedness may be filed as prepared testimony with the application and may consist of statements or testimony from the district's attorney, engineer, or officer and shall include an affidavit of the state comptroller of public accounts certifying that the district has never registered any bonds with the comptroller;

(E) list of assets and liabilities of the district;

(F) evidence that all landowners who have not signed the petition have been notified by mail of the dissolution request. A certified tax roll for the district and certificate of mailing executed by the postmaster would be sufficient evidence;

(G) a filing fee in the amount of $100; and

(H) additional data and information as the executive director or commission may deem necessary or pertinent to the application.

(3) The executive director may initiate procedures to dissolve a district without financial dormancy affidavits on file if:

(A) the district has failed to comply with the reporting requirements of this chapter for the previous five-year period;

(B) attempts to contact directors, interested parties, or anyone with knowledge of district's financial activity have failed; and

(C) the state comptroller of public accounts has submitted a certificate certifying that the district has never registered any bonds with the comptroller.

§293.132.Notice of Hearing.

A notice of the hearing upon the proposed dissolution of a district will be given by the chief clerk and will describe the reasons for the proceeding, as required by Texas Water Code, §49.322 [ Water Code, §36.305 for groundwater conservation districts and §49.322 for other water districts ]. The notice will be published once each week for two consecutive weeks before the day of hearing in a newspaper having general circulation in the county or counties in which the district is located. The first publication will be 30 days before the day of the hearing. Notice of the hearing will be given by the chief clerk by first class mail addressed to the directors of the district according to the last record on file with the executive director.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202600

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

30 TAC §293.137

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Natural Resource Conservation Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

STATUTORY AUTHORITY

This repeal is proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC, and §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state. The repealed subchapter will be replaced by new §293.22 in implementation SB 2, which amended TWC, Chapters 35 and 36.

The proposed repeal implements SB 2, 77th Legislature, 2001.

§293.137.Commission Action for Failure of a Groundwater Conservation District to Submit a Management Plan or to Implement a Certified Plan through its Operations.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202601

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

Chapter 294. UNDERGROUND WATER MANAGEMENT AREAS

The Texas Natural Resource Conservation Commission (commission) proposes the repeal of Subchapter C, Designation of Groundwater Management Areas, §§294.21 - 294.25, and Subchapter D, Priority Groundwater Management Areas, §294.30 and §294.34. The commission also proposes new Subchapter D, Priority Groundwater Management Areas, §294.30, and Subchapter E, Designation of Priority Groundwater Management Areas, §294.39. The commission also proposes amendments to Subchapter E, Designation of Priority Groundwater Management Areas, §§294.40 - 294.44.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES

The proposed revisions implement portions of Senate Bill (SB) 2, 77th Legislature, 2001, which amended Texas Water Code (TWC), Chapters 35 and 36 relating to priority groundwater management areas (PGMAs), groundwater management areas (GMAs), and groundwater conservation districts (GCDs). The proposed revisions to Chapter 294 implement SB 2, §§2.22 - 2.29, 2.32, 2.33, and 13.02. In a related rulemaking, proposed changes to 30 TAC Chapter 293, Water Districts, which implement SB 2, §§2.26, 2.28, 2.34 - 2.40, 2.48, and 2.55 - 2.57, also appear in this issue of the Texas Register .

Proposed changes to Chapter 294 would implement SB 2 provisions that transfer the jurisdiction to designate GMAs to the Texas Water Development Board (TWDB). TWC, §35.004 (SB 2, §2.22) provides that the TWDB, with assistance and cooperation from the commission, shall designate GMAs covering all of the major and minor aquifers in the state. It provides further that the commission may designate a GMA after September 1, 2001, for a petition filed and accepted by the commission prior to that date. TWC, §35.005, Petition to Designate a GMA, and §35.006, Notice for Designation of a GMA, were repealed by SB 2 (§13.02). Because the commission no longer has jurisdiction for the designation of GMAs, the commission proposes the repeal of §§294.21 - 294.25, which contain commission procedures for considering a petition for the designation of a GMA and designation of a GMA through agency rulemaking.

The proposed Chapter 294 amendments would also implement SB 2 provisions that streamline the PGMA designation process. The streamlined PGMA designation process incorporates considerations for creating GCDs in the PGMA designation hearing and requires specific GCD recommendations in the commission's PGMA designation order. TWC, §35.007 (SB 2, §2.23) requires the executive director's PGMA report to include specific GCD creation recommendations. TWC, §35.008 (SB 2, §2.24) requires GCD creation to be considered in the PGMA designation evidentiary hearing, requires the commission to make specific GCD creation recommendations in its PGMA designation order, and encourages new GCD boundaries to be based on designated GMA or PGMA boundaries. TWC, §35.018 (SB 2, §2.28) authorizes the commission to make recommendations in its report to the legislature if GCD creation in a designated PGMA would not be appropriate for or capable of protection of groundwater resources. TWC, §35.012 and §35.013 (SB 2, §2.26 and §2.27) provide for commission and local actions that are required after a PGMA designation. These actions include the opportunity for landowners to establish a GCD in the designated PGMA through either creation or annexation processes and defines educational responsibilities in the PGMA. TWC, §35.012 and §36.0151 (SB 2, §2.26 and §2.37) provide time frames and authority for commission creation of GCDs in a designated PGMA if local initiative is not taken to create such districts. The commission proposes new §294.39 and amendments to §§294.40 - 294.44 to implement these new statutory provisions and to clarify rule language and sequential ordering of PGMA designation processes.

SECTION BY SECTION DISCUSSION

The name of the chapter is proposed to be amended from "Underground Water Management Areas" to "Groundwater Management Areas" to be consistent with current statutory and agency usage.

Subchapter C: Designation of Groundwater Management Areas

Section 294.21, Designation of Groundwater Management Area Through Rulemaking; §294.22, Petition for Adoption of Rules Designating a Groundwater Management Area; §294.23, Commission Consideration of Petition for Adoption of Rules Designating a Groundwater Management Area; §294.24, Notice of Commission Consideration of Final Adoption of Rules Designating a Groundwater Management Area; and §294.25, Alteration of Groundwater Management Area, are proposed for repeal because the statute on which they are based has been repealed. The designation of GMAs under TWC, §35.004 is now under the jurisdiction of the TWDB.

Subchapter D: Priority Groundwater Management Areas

Section 294.30, Definitions, is proposed to be repealed and replaced by new §294.30, Purpose and Applicability. The purpose of the subchapter, as provided in proposed new subsection (a), is to set out the boundaries of PGMAs designated and delineated under the TWC prior to September 1, 1997. Proposed new subsection (b) provides reference to Subchapter E for PGMA designation procedures after September 1, 1997. Prior to statutory changes made by SB 1, 75th Legislature, 1997, PGMAs were designated and delineated by commission rules. Changes made by SB 1, that were effective on September 1, 1997, called for PGMAs to be designated by commission order.

Section 294.34, Designation of Hill Country Priority Groundwater Management Area, is proposed for repeal because the commission's January 24, 2001 order designating the PGMA supercedes and replaces this designation and delineation by rule. The commission's January 24, 2001 order designated a portion of northern Bexar County overlying the Trinity Aquifer as a PGMA, added the newly designated area to the existing Hill Country PGMA, and delineated new boundaries for the Hill Country PGMA to include the added area.

Subchapter E: Designation of Priority Groundwater Management Areas

Proposed new §294.39, Purpose, provides the purpose of Chapter 294, Subchapter E, relating to designation of PGMAs. The purpose of Subchapter E is to provide the procedures for the designation of PGMAs, including the development of recommendations for the creation of GCDs.

Section 294.40, Definitions, is proposed for amendment to implement SB 2 and to improve readability. The definition of "Affected person" is amended to include statutory language changes. Definitions for "Executive administrator" and "Priority groundwater management area (PGMA)" are amended for formatting and statutory conformity reasons. The new definition "Texas Water Development Board (TWDB)" is proposed to be added to define the term for use in the subchapter.

Section 294.41, Executive Director's Report Concerning Priority Groundwater Management Area Designation, is proposed for amendment to retitle the section, to implement SB 2, and to improve readability and sequential ordering. The commission proposes to retitle the section as Priority Groundwater Management Area Identification, Study, and Executive Director's Report Concerning Designation to be more descriptive of the contents of the section. Proposed new subsections (a) and (b) are amended from the existing (a) and (b) to improve readability. Proposed new subsection (a) removes Texas Parks and Wildlife Department (TPWD), as the statute does not provide for participation of the TPWD at this stage of the PGMA study process. Proposed new subsection (c) provides for the PGMA study stakeholder notification before the executive director requests studies from the other agencies. The new subsection (c) is amended to improve readability and moved from the existing subsection (d) to follow a chronological progression through the PGMA process. Proposed new subsection (d) provides for the executive director's request for a study to the executive administrator of the TWDB. The subsection is amended from existing subsection (c) to improve readability and reordered to follow a chronological progression through the PGMA process. Proposed new subsection (e) provides for the executive director's request for a study to the executive director of the TPWD and is amended from existing subsection (e) to improve readability. Proposed new subsection (f) provides the opportunity for the Texas Department of Agriculture (TDA) to submit information relating to the PGMA study. Proposed new subsection (f) reflects the addition of TDA to the PGMA process as amended by House Bill 2660, 76th Legislature, 1999. Proposed new subsection (g) provides for the timing, filing, and contents of the executive director's PGMA report and recommendations and is amended from existing subsection (f) to improve readability and to implement SB 2 changes. As proposed in new subsection (g), the report must include recommendations for boundaries, and for the financing of groundwater management and district-operation functions, of any GCD recommended for creation in the PGMA by the executive director. Proposed new subsection (h) provides for the distribution of the executive director's PGMA report for public inspection, and is amended from existing subsection (g)(1) to improve readability and ordering. Proposed new subsection (i) provides for publishing notice of the executive director's PGMA report in the Texas Register and mailing notice to identified stakeholders. The subsection is amended from existing subsection (g)(2) to improve readability.

Section 294.42, Commission Action Concerning PGMA Designation, is proposed for amendment to implement SB 2 and to improve readability and sequential ordering. Proposed new subsection (a) provides that if the executive director's PGMA report concluded that the area is not a PGMA, no further action is necessary in a PGMA study area. Proposed new subsection (a) is moved from existing §294.41(i) and is amended to improve readability. Proposed new subsection (b), concerning commission consideration of the executive director's PGMA report, is amended to improve readability. The subsection provides for the considerations, timing, notice, location, and procedures of the PGMA evidentiary hearing, and is amended from existing subsections (a) - (d) and (f) - (h) to improve readability and to implement new statutory provisions. Proposed new subsection (b) requires the commission to hold a hearing on the executive director's report and recommendation for PGMA designation. The hearing may be remanded to the State Office of Administrative Hearings (SOAH). The hearing would consider whether a PGMA should be designated, whether one or more districts should be created, and the feasibility and practicability of each district recommendation. Proposed new subsection (c) provides for commission action regarding PGMA designation. The subsection provides for the commission's order, PGMA boundary considerations, and GCD creation recommendations. The subsection is amended from existing subsections (e) and (i) to improve readability and to implement statutory changes. As changed by SB 2, if the commission designates the area as a PGMA, the designation order must recommend that the PGMA be covered by a GCD by either creation of one or more new GCDs, by addition of the land in the PGMA to an existing GCD, or by a combination of these actions. If the commission finds that a GCD created under TWC, Chapter 36 would not be feasible, the commission may recommend to the legislature that a special district be created or an existing district's powers be amended. Existing subsection (j) repeated statutory language relating to the evidentiary hearing and is proposed to be removed and not replaced.

Section 294.43, Landowner Actions in a PGMA, is proposed for amendment to retitle the section, to implement SB 2, and to improve readability and sequential ordering. The commission proposes to retitle the section as Actions Required After PGMA Designation to be more descriptive of the section contents. Proposed new subsection (a) provides for the distribution of the commission's PGMA designation order. Proposed new subsection (b) provides for notification by the executive director to the Texas Cooperative Extension and to commissioners courts of counties in the PGMA for the initiation of educational outreach in the PGMA. Proposed new subsection (c) provides that the executive director review locally-initiated GCD creation efforts in the PGMA no sooner than 180 days after PGMA designation. Proposed new subsection (d) requires the executive director to identify and recommend GCD boundaries that are consistent with the commission's PGMA designation order if locally-initiated GCD creation actions have not been taken in the PGMA. Proposed new subsection (e) provides for commission-initiated creation of GCDs within two years if landowners do not take GCD creation action. The new language is proposed to implement SB 2 changes relating to commission actions that are required following the designation of a PGMA. Existing subsection (a) is removed and is replaced by executive director action in proposed new (c). Existing subsection (a) is replaced by proposed new subsections (b) and (d) - (e).

Section 294.44, Adding a PGMA to an Existing District, is proposed for amendment to retitle the section, to implement SB 2, to improve readability and sequential ordering, and to remove existing language relating to statutory processes that are outside of the commission's authority. The commission proposes to retitle the section as Adding a PGMA to an Existing Groundwater Conservation District to be more descriptive of the section contents. Proposed new subsection (a) provides for executive director notification of a commission PGMA designation order that recommends adding a PGMA to an existing GCD. It is amended from existing subsection (a) to improve readability. Proposed new subsection (b) provides for GCD status reporting of current activities under TWC, §36.013, relating to the addition of a PGMA recommended by a commission order. Proposed new subsection (b) replaces existing subsection (b) - (g) by reference to TWC, §36.013. Existing subsections (b) - (g) repeated statutory requirements for a board of directors of a district for which a commission order has recommended addition of a PGMA. This language is proposed to be omitted because it described board actions that are outside the commission's authority. Proposed new subsection (c) amends and replaces existing subsection (h) to provide for costs of an election to add a PGMA to an existing GCD and is amended to improve readability. Proposed new subsection (d) provides for commission action in a PGMA if an existing GCD's efforts to add a PGMA recommended by a commission order are not successful or if addition of a PGMA recommended by a commission order is declined by an existing GCD or defeated in a confirmation election. It replaces and amends existing subsection (i) to improve readability and to implement statutory changes.

FISCAL NOTE: COST TO STATE AND LOCAL GOVERNMENT

John Davis, Technical Specialist with Strategic Planning and Appropriations, has determined that for each year of the first five-year period the proposed rules are in effect no significant fiscal implications are expected for the agency or other units of state and local government due to implementation of the proposed rules.

The proposed rules implement certain provisions of SB 2 (an act relating to the development and management of water resources of the state, including the ratification of the creation of certain GCDs; providing penalties), 77th Legislature, 2001. The proposed rules will implement SB 2 provisions by facilitating the transfer of authority to designate GMAs to the TWDB. The proposed rules are also intended to implement SB 2 provisions that streamline the PGMA designation process. The proposed rules are procedural in nature and are not anticipated to result in significant additional costs for units of state and local government.

PUBLIC BENEFIT AND COSTS

Mr. Davis has also determined that for each of the first five years the proposed rules are in effect the public benefit anticipated as a result of implementing the proposed rules will be potentially improved processes and procedures for designating PGMAs.

The proposed rules implement certain provisions of SB 2. The proposed rules will implement SB 2 provisions by facilitating the transfer of authority to designate GMAs to the TWDB. The proposed rules are also intended to implement SB 2 provisions that streamline the PGMA designation process. The proposed rules are procedural in nature and are not anticipated to result in significant additional costs for individuals and businesses.

SMALL AND MICRO-BUSINESS ASSESSMENT

No adverse fiscal implications are anticipated for small or micro-businesses due to implementation of the proposed rules, which are intended to implement certain provisions of SB 2. The proposed rules will implement SB 2 provisions by facilitating the transfer of authority to designate GMAs to the TWDB. The proposed rules are also intended to implement SB 2 provisions that streamline the PGMA designation process. The proposed rules are procedural in nature and are not anticipated to result in significant additional costs for small and micro-businesses.

LOCAL EMPLOYMENT IMPACT

The commission has reviewed the proposed rules and determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The commission has reviewed the proposed rules in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and has determined that the proposed rules are not subject to §2001.0225 because they do not meet the definition of a "major environmental rule" as defined in that statute. Major environmental rule means a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a section of the state. These proposed rules implement legislation and do not adversely affect in a material way the economy, productivity, competition, jobs, the environment, or public health and safety. The designation of an area as a PGMA does not have a regulatory impact on the area.

In addition, §2001.0225 only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. No federal law applies. These proposed rules implement state legislation and do not exceed that legislation.

TAKINGS IMPACT ASSESSMENT

The commission has prepared a takings impact assessment for these proposed rules in accordance with Texas Government Code, §2007.43. The purpose of these proposed rules is to implement amendments to TWC, Chapter 35. These amendments to TWC provide the process for the agency to designate a PGMA. A PGMA designation is simply a designation; the PGMA does not have any regulatory authority. Therefore, the PGMA designation does not impact or burden private real property.

CONSISTENCY WITH THE COASTAL MANAGEMENT PROGRAM

The executive director reviewed the proposed rules and found that the proposed rules are neither identified in Coastal Coordination Act Implementation Rules, 31 TAC §505.11, relating to Actions and Rules Subject to the Texas Coastal Management Program (CMP), nor will they affect any action or authorization identified in 31 TAC §505.11. Therefore, the proposed rules are not subject to the CMP.

ANNOUNCEMENT OF HEARING

A public hearing on this proposal will be held in Austin on June 4, 2002 at 10:00 a.m. at the Texas Natural Resource Conservation Commission complex in Building F, Room 2210, located at 12100 Park 35 Circle. The hearing will be structured for the receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon in order of registration. There will be no open discussion during the hearing; however, an agency staff member will be available to discuss the proposal 30 minutes prior to the hearing and will answer questions before and after the hearing.

Persons with disabilities who have special communication or other accommodation needs who are planning to attend the hearing should contact the Office of Environmental Policy, Analysis, and Assessment at (512) 239-4900. Requests should be made as far in advance as possible.

SUBMITTAL OF COMMENTS

Comments may be submitted to Angela Slupe, Office of Environmental Policy, Analysis, and Assessment, MC 205, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. All comments should reference Rule Log Number 2001-094-294-WT. Comments must be received by 5:00 pm, June 10, 2002. For further information, contact Auburn Mitchell, Policy and Regulations Division, at (512) 239-1873.

Subchapter C. DESIGNATION OF GROUNDWATER MANAGEMENT AREAS

30 TAC §§294.21 - 294.25

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Natural Resource Conservation Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

STATUTORY AUTHORITY

The repeals are proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC, and §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state.

The proposed repeals implement SB 2, 77th Legislature, 2001.

§294.21.Designation of Groundwater Management Area Through Rulemaking.

§294.22.Petition for Adoption of Rules Designating a Groundwater Management Area.

§294.23.Commission Consideration of Petition for Adoption of Rules Designating a Groundwater Management Area.

§294.24.Notice of Commission Consideration of Final Adoption of Rules Designating a Groundwater Management Area.

§294.25.Alteration of Groundwater Management Area.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202602

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

Subchapter D. PRIORITY GROUNDWATER MANAGEMENT AREAS

30 TAC §294.30, §294.34

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Natural Resource Conservation Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

STATUTORY AUTHORITY

The repeals are proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC, and §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state.

The proposed repeals implement SB 2, 77th Legislature, 2001.

§294.30.Definitions.

§294.34.Designation of Hill Country Priority Groundwater Management Area.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202603

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 2, 2002

For further information, please call: (512) 239-4712

30 TAC §294.30

STATUTORY AUTHORITY

The new section is proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC; §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state; and TWC, §§35.002, 35.004, 35.008, 35.009, 35.0012, 35.0013, and 35.018, as amended by SB 2.

The proposed new section implements SB 2, 77th Legislature, 2001.

§294.30.Purpose and Applicability.

(a) The purpose of this subchapter is to set out the boundaries of priority groundwater management areas (PGMAs) designated and delineated prior to September 1, 1997 under the Texas Water Code (TWC). A PGMA under this subchapter is an area designated and delineated by the commission that is experiencing or is expected to experience, based on information available to the commission and the Texas Water Development Board, within the immediately following 25-year period, critical groundwater problems including shortage of surface water or groundwater, land subsidence resulting from groundwater withdrawal, and contamination of groundwater supplies.

(b) PGMAs designated after September 1, 1997 are delineated by commission order under TWC, Chapter 35, using the process contained in Subchapter E of this chapter (relating to Designation of Priority Groundwater Management Areas).

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202604

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712

Subchapter E. DESIGNATION OF PRIORITY GROUNDWATER MANAGEMENT AREAS

30 TAC §§294.39 - 294.44

STATUTORY AUTHORITY

The new and amended sections are proposed under TWC, §5.102, which provides the commission with the general powers to carry out its duties under TWC; §5.103, which provides the commission with the authority to adopt any rules necessary to carry out the powers and the duties under the provisions of TWC and other laws of this state; and TWC, §§35.002, 35.004, 35.008, 35.009, 35.0012, 35.0013, and 35.018, as amended by SB 2.

The proposed new and amended sections implement SB 2, 77th Legislature, 2001.

§294.39.Purpose.

The purpose of this subchapter is to provide the procedures for the designation of priority groundwater management areas, including recommendations for the creation of groundwater conservation districts.

§294.40.Definitions.

The following words and terms, when used in this chapter , shall have the following meanings, unless the context clearly indicates otherwise . [ : ]

(1) Affected person -- A landowner, water well owner, or other user of groundwater in an area that is proposed for priority groundwater management area designation, or any other person who has a personal justiciable interest related to a legal right, duty, privilege, power, or economic interest affected by the designation [ application ]. An interest common to members of the general public does not qualify as a personal justiciable interest.

(2) Executive administrator -- The executive administrator [ the Executive Administrator ] of the Texas Water Development Board.

(3) Priority groundwater management area (PGMA) -- An [ an ] area designated and delineated by the commission [ as an area ] that is experiencing or is expected to experience, within the immediately following 25-year [ 25 year ] period, critical groundwater problems [ , ] including shortages of surface water or groundwater, land subsidence resulting from [ form ] groundwater withdrawal, and contamination of groundwater supplies.

(4) Texas Water Development Board (TWDB) -- The agency responsible for water planning and administration of financial programs for the planning, design, and construction of water supply, wastewater treatment, flood control, and agricultural water conservation projects.

§294.41. Priority Groundwater Management Area Identification, Study, and Executive Director's Report Concerning [ Priority Groundwater Management Area ] Designation.

(a) The executive director shall confer periodically with the executive administrator according to Texas Water Code (TWC), §35.007 to identify areas of the state that may be experiencing or expected to experience critical groundwater problems within the immediately following 25-year period.

(b) If the executive director concludes that an area of the state should be evaluated to determine if it justifies designation as a priority groundwater management area (PGMA), the executive director shall prepare a report and recommendations for consideration by the commission.

(c) The executive director shall provide written notice to groups identified under paragraphs (1) and (2) of this subsection that an area is to be evaluated to determine if it warrants designation as a PGMA according to TWC, §35.007(c). This notice will provide the opportunity for water stakeholders and others identified in paragraph (2) of this subsection to comment or provide studies or other information for use in the executive director's evaluation.

(1) The notice shall be provided to water stakeholders who are the governing body of each county, regional water planning group, adjacent groundwater conservation district (GCD), municipality, river authority, water district, or other entity that supplies public drinking water, including each holder of a certificate of convenience and necessity issued by the commission, and each irrigation district, located either in whole or in part in the proposed PGMA study area.

(2) The notice shall also be provided to the Texas Department of Agriculture (TDA), the Texas Cooperative Extension, and to the legislators whose districts are included in the proposed PGMA study area.

(3) Not later than the 45th day after the date of the notice, a person who receives notice under paragraph (1) of this subsection may submit to the executive director any existing information, local water supply or quality studies, or site-specific geological information that addresses the shortages of surface water or groundwater, land subsidence resulting from groundwater withdrawal, or contamination of groundwater supplies.

(4) The executive director shall consider this information in preparing the report and recommendations for the commission.

(d) The executive director shall begin preparation of a PGMA report by requesting a study from the executive administrator. The study must:

(1) include an appraisal of the hydrogeology of the area and other matters within the TWDB's planning expertise relevant to the area;

(2) assess the area's immediate, short-term, and long-term water supply needs and availability; and

(3) be completed and delivered to the executive director within 180 days following the date of the request. If the study is not delivered within this 180-day period, the executive director may proceed with the preparation of the report under this section.

(e) The executive director shall request a study from the executive director of the Texas Parks and Wildlife Department (TPWD) for the purpose of preparing the report required by this section. The study must:

(1) evaluate the potential effects of the designation of a PGMA on an area's natural resources; and

(2) be completed and delivered to the executive director within 180 days following the date of the request. If the study is not delivered within this 180-day period, the executive director may proceed with the preparation of the report under this section.

(f) The executive director shall provide opportunity for TDA to submit information related to the PGMA study as identified in the notice provided under subsection (c) of this section. Information shall be submitted to the executive director within 180 days following the date of the notice.

(g) The executive director must complete the report and file it with the chief clerk within 240 days following the date on which the executive administrator was requested to produce a study.

(1) The executive director's report shall include:

(A) the recommended delineation of the boundaries of any proposed PGMA in the form of a proposed order to be considered for adoption by the commission;

(B) the reasons and supporting information for or against designating the area as a PGMA;

(C) a recommendation of actions to be considered to conserve natural resources;

(D) an evaluation of information or studies submitted to the executive director under this section;

(E) if the designation of a PGMA is recommended, a recommendation regarding whether one or more GCDs should be created in the PGMA, whether the PGMA should be added to an existing GCD, or whether a combination of these actions should be taken;

(F) a recommendation regarding the area and boundaries for any GCD recommended under this subsection;

(G) an evaluation of required or authorized groundwater management planning and regulatory functions under TWC, Chapter 36 for any GCD recommended under this subsection to address identified critical groundwater problems;

(H) a recommendation regarding adequate funding to finance required or authorized groundwater management planning, regulatory, and district-operation functions under TWC, Chapter 36, including a minimum projected maintenance tax rate or production fee rate for any GCD recommended under this subsection; and

(I) any other information that the executive director considers helpful to the commission.

(2) To prepare the report, the executive director may conduct necessary studies, hold public meetings, solicit and collect information, or use information prepared by the executive director, the executive director of the TPWD, the TDA, or the executive administrator of the TWDB for other purposes.

(h) Concurrent with filing the report with the chief clerk, the executive director shall make the report available for public inspection by providing a copy of the report to at least one public library and the county clerk's office in each county in which the proposed PGMA is located, and to all GCDs adjacent to the proposed PGMA.

(i) Within 30 days of filing the report with the chief clerk, the executive director may publish notice in the Texas Register that this report has been prepared, present a summary of its findings and recommendations, and indicate where copies of the report may be obtained or inspected. If the executive director decides to publish notice, this notice shall also be mailed to the same persons who received notice of the initiation of the PGMA study under subsection (c) of this section.

[(a) The executive director, the executive administrator and the executive director of the Texas Parks and Wildlife Department or their designees shall meet at least once a year to identify, based on information gathered by the commission and the Texas Water Development Board, those areas of the state that may be experiencing or expected to experience critical groundwater problems within the immediately following 25-year period.]

[(b) If the executive director concludes that an area of the state should be considered for designation as a (PGMA), the executive director shall prepare a report to the commission.]

[(c) The executive director shall begin preparation of a PGMA report by requesting a study from the executive administrator. The study must:]

[(1) include an appraisal of the hydrogeology of the area and matters within the Texas Water Development Board's planning expertise relevant to the area;]

[(2) assess the area's immediate, short-term, and long-term water supply and needs; and]

[(3) be completed and delivered to the executive director on or before the 180th day following the date of the request. If the study is not delivered within this 180-day period, the executive director may proceed with the preparation of the report under subsection (b) of this section.]

[(d) Before the executive director requests a study from the executive administrator under subsection (c) of this section, the executive director shall provide written notice of consideration of the area for designation as a PGMA, and the opportunity to comment or provide studies or information, to the governing body of each county, regional water planning group, adjacent groundwater district, municipality, river authority, water district, or other entity which supplies public drinking water, including each holder of a certificate of convenience and necessity issued by the commission, and of each irrigation district, located either in whole or in part in the proposed PGMA. Not later than the 45th day after the date of the notice, a person required to receive notice under this subsection may submit to the executive director any existing information or studies that address the potential effect on an area of being identified as experiencing or expected to experience critical groundwater problems. The executive director shall consider this information in making its recommendation.]

[(e) The executive director shall also request a study from the executive director of Parks and Wildlife Department for the purpose of preparing the report required by this Subchapter. The study must:]

[(1) evaluate the potential effects of the designation of a PGMA on an area's natural resources; and]

[(2) be completed and delivered to the executive director on or before the 180th day following the date of the request. If the study is not delivered within this 180-day period, the executive director may proceed with the preparation of the report under subsection (b) of this section.]

[(f) The executive director's report shall include:]

[(1) the recommended delineation of the boundaries of any proposed PGMA in the form of a proposed order to be considered for adoption by the commission;]

[(2) the reasons and supporting information for or against designating the area as a PGMA;]

[(3) if the designation of a PGMA is recommended, a recommendation regarding whether a district should be created in the PGMA or whether the PGMA should be added to an existing district;]

[(4) a recommendation as to actions that should be considered to conserve natural resources;]

[(5) an evaluation of information or studies submitted to the executive director under subsections (c) - (e)of this section; and]

[(6) any other information that the executive director considers helpful to the commission.]

[(g) The executive director must complete the report and file it with the commission on or before the 240th day following the date on which the executive administrator was requested to produce a study. In addition, the executive director shall provide the following notice:]

[(1) At the same time the executive director files the report with the commission, the executive director shall make the report available for public inspection by providing a copy of the report to at least one public library and the county clerk's office in each county in which the proposed PGMA is located and to all groundwater conservation districts adjacent to the area of the proposed PGMA.]

[(2) The executive director shall also publish notice in the Texas Register that this report has been prepared, explaining the executive director's recommended action, and stating where the report may be obtained.]

[(3) This notice shall be published in the Texas Register , and mailed to the same persons who received notice of the initiation of the PGMA study under §294.41(d) of this title (relating to Executive Director's Report Concerning Priority Groundwater Management Area Designation), within 30 days that the report is filed with the commission.]

[(h) To prepare this report, the executive director may make necessary studies, hold public meetings, solicit and collect information, or use information already prepared by the executive director or the executive administrator for other purposes.]

[ (i) If the executive director recommends that no PGMA designation be made in the area studied, no further action by the executive director or the commission is necessary. However, a person who receives mailed notice under §294.31(g)(3) of this title may file a motion for reconsideration under §50.39 of this title (relating to Motion for Reconsideration). ]

§294.42.Commission Action Concerning PGMA Designation.

(a) If the executive director concludes in the report that the area studied is not a priority groundwater management area (PGMA), no further action by the executive director or the commission is necessary. However, any person may file a motion to overturn under §50.39 of this title (relating to Motion to Overturn).

(b) If the executive director recommends that the area be designated a PGMA, or if the commission overturns the executive director's conclusion in subsection (a) of this section, the commission shall consider the executive director's PGMA report and recommendations developed under §294.41 of this title (relating to Priority Groundwater Management Area Identification, Study, and Executive Director's Report Concerning Designation) using the following procedures.

(1) The commission shall hold an evidentiary hearing. On behalf of the commission, the executive director may refer the evidentiary hearing directly to SOAH. At the evidentiary hearing, the commission or the administrative law judge shall consider:

(A) whether the proposed PGMA should be designated;

(B) whether one or more groundwater conservation districts (GCDs) should be created within all or part of the proposed PGMA, whether all or part of the land in the PGMA should be added to an existing GCD, or whether a combination of these actions should be taken; and

(C) the feasibility and practicability of each GCD recommendation. To determine the feasibility and practicability of each GCD recommendation, the commission or the administrative law judge shall consider:

(i) whether the recommended GCD can effectively manage groundwater resources under the authorities provided in Texas Water Code (TWC), Chapter 36;

(ii) whether the boundaries of the recommended GCD provide for the effective management of groundwater resources; and

(iii) whether the recommended GCD can be adequately funded to finance required or authorized groundwater management planning, regulatory, and district-operation functions under TWC, Chapter 36.

(2) The evidentiary hearing shall be held in one of the counties in which the PGMA is proposed to be located or in the nearest convenient location if adequate facilities are not available in those counties.

(3) The chief clerk shall publish notice of the evidentiary hearing in at least one newspaper with general circulation in the area proposed for PGMA designation. The notice must be published no later than 30 days before the first date set for the hearing. Notice of the evidentiary hearing must include:

(A) if applicable, a statement of the general purpose and effect of designating the proposed PGMA;

(B) if applicable, a statement of the general purpose and effect of creating a new GCD in the proposed PGMA;

(C) if applicable, a statement of the general purpose and effect of adding all or part of the land in the proposed PGMA to an existing GCD;

(D) a map generally outlining the boundaries of the area being considered for PGMA designation or notice of the location at which a copy of the map may be examined or obtained;

(E) a statement that the executive director's report on the proposed PGMA is available for inspection during regular business hours at the commission's main office in Austin, Texas, at regional offices of the commission which include territory within the proposed PGMA, and on the agency's website;

(F) the name and address of each public library, each county clerk's office, and each GCD that has been provided copies of the executive director's report; and

(G) the date, time, and place of the hearing.

(4) The chief clerk shall also mail written notice of the date, time, place, and purpose of the hearing to the governing body of each county, regional water planning group, adjacent GCD, municipality, river authority, water district, or other entity which supplies public drinking water, including each holder of a certificate of convenience and necessity issued by the commission, and of each irrigation district, located either in whole or in part in the PGMA or proposed PGMA. This notice shall be mailed at least 30 days before the date set for the hearing.

(5) The evidentiary hearing must be conducted within 75 days of the date that notice was provided under paragraph (3) of this subsection. At the hearing, the commission or the administrative law judge shall hear testimony and receive evidence from affected persons, and consider the executive director's report and supporting information. The commission or the administrative law judge may request additional information from any source if further information is considered necessary to make a decision. If the commission or administrative law judge requests additional information, the parties will be allowed to examine this information and present any necessary evidence related to the additional information.

(6) If the hearing is remanded to SOAH, the administrative law judge shall at the conclusion of the hearing, issue a proposal for decision stating findings, conclusions, and recommendations. The administrative law judge shall file findings and conclusions with the chief clerk.

(c) The commission shall consider the findings, conclusions, and recommendations determined from the evidentiary hearing. The commission shall order one or more of the following actions.

(1) Except as provided in paragraph (3) of this subsection, if the commission decides that an area should be designated as a PGMA, the commission shall designate and delineate the boundaries of the PGMA.

(2) If the commission designates the area as a PGMA, the order must recommend that the area be covered by a GCD by either creation of one or more new GCDs, by addition of the land in the PGMA to one or more existing GCDs, or by a combination of these actions. The commission shall give preference to GCD boundaries that are coterminous with the boundaries of the PGMA, but may recommend GCD boundaries based upon existing political subdivision boundaries to facilitate creation of a GCD.

(3) If the commission does not designate the area as a PGMA, the commission shall issue an order stating that the PGMA shall not be designated.

(4) If the commission finds that a GCD created under TWC, Chapter 36 would not be feasible or practicable for the protection of groundwater resources in the PGMA, the commission may recommend in its report to the legislature under TWC, §35.018, the creation of a special district or amendment of an existing district's powers and authorities.

(5) The designation of a PGMA may not be appealed nor may it be challenged under TWC, §5.351 or Texas Government Code, §2001.038.

[(a) The commission shall consider the executive director's proposed designation of PGMAs using the procedures set out in this subchapter.]

[(b) The commission shall call an evidentiary hearing to consider: ]

[(1) the proposed designation of a PGMA;]

[(2) whether a district should be created, and if so, whether it should include all or part of a PGMA; or]

[(3) whether all or part of the land in the PGMA should be added to an existing district.]

[(c) Evidentiary hearings shall be held in one of the counties in which the PGMA is proposed to be located, or in the nearest convenient location, if adequate facilities are not available in those counties.]

[(d) At the hearing, the commission, or a judge, if the hearing is remanded to SOAH, shall hear testimony and receive evidence from affected persons. The executive director may request that the hearing be remanded to SOAH. The commission or the judge shall consider the executive director's report and supporting information and the testimony and evidence received at the hearing. If the commission or judge considers further information necessary, the commission or judge may request such information from any source.]

[(e) The designation or non-designation of a PGMA may not be appealed nor may it be challenged under Texas Government Code §2001.038.]

[(f) The commission shall have notice of the hearing published in at least one newspaper with general circulation in the county or counties in which the area proposed for designation as a PGMA or the area within a PGMA being considered for district creation or for addition to an existing district is located. Notice must be published not later than the 30th day before the date set for the commission to consider the designation of the PGMA, and the need for the creation of a district in a PGMA, or the addition of land in a PGMA to an existing district.]

[(g) Notice of the hearing must include:]

[(1) if applicable, a statement of the general purpose and effect of designating the proposed PGMA;]

[(2) if applicable, a statement of the general purpose and effect of creating a district in the PGMA;]

[(3) if applicable, a statement of the general purpose and effect of adding all or part of the land in the PGMA to an existing district;]

[(4) a map generally outlining the boundaries of the area being considered for PGMA designation or if different the area within the proposed PGMA being recommended for district creation or for addition to an existing district, or notice of the location at which a copy of the map may be examined or obtained;]

[(5) a statement that the executive director's report concerning the PGMA or proposed PGMA is available at the commission's main office in Austin, Texas, and at regional offices of the commission for regions which include territory within the PGMA or proposed PGMA and that the report is available for inspection during regular business hours;]

[(6) a description of the name of the locations in the affected area at which the commission has provided copies of the executive director's report to be made available for public inspection;]

[(7) the name and address of each public library, each county clerk's office, and each district to which the commission has provided copies of the executive director's report; and]

[(8) the date, time, and place of the hearing.]

[(h) The commission shall also give written notice of the date, time, place, and purpose of the hearing to the governing body of each county, regional water planning group, adjacent groundwater district, municipality, river authority, water district, or other entity which supplies public drinking water, including each holder of a certificate of convenience and necessity issued by the commission, and of each irrigation district, located either in whole or in part in the PGMA or proposed PGMA. This notice shall be given before the 30th day preceding the date set for the hearing.]

[(i) At the conclusion of its hearing and considerations, the commission shall issue an order stating its findings and conclusions:]

[(1) If the commission decides that a PGMA should be designated, the commission shall designate and delineate the boundaries of the PGMA.]

[(2) If the commission designates the area as a PGMA, and it finds that the land and other property in the PGMA would benefit from the creation of one or more districts, that there is a public need for one or more districts, and that the creation of one or more districts would further the public welfare, the commission shall include in its order the finding that creation of one or more district is needed.]

[(3) If the commission designates the area as a PGMA, and if land in a PGMA is located adjacent to one or more existing districts, the commission may include in its order a finding that the PGMA be added to an existing district designated by the commission. In its order, the commission must find that the land and other property in the PGMA and the land in the existing district will benefit from the addition of the area, that there is a public need to add the PGMA to the existing district, and that the addition of the land to the existing district would further the public welfare.]

[(4) If the commission fails to find that a district would be a benefit to the land and other property within the PGMA, that there is a public need for the district, or that creation of the district or annexation to an existing district will further the public welfare, the commission's order shall state that a district should not be created within the boundaries of the PGMA.]

[(j) The Administrative Procedures Act, Texas Government Code Annotated, §2001 et seq., does not apply to evidentiary hearings held under this subsection.]

§294.43. Actions Required After PGMA Designation [ Landowner Actions PGMA ].

(a) The commission shall provide copies of a priority groundwater management area (PGMA) designation order under §294.42 of this title (relating to Commission Action Concerning PGMA Designation) to the commissioners court of any county that is affected by the designation of the PGMA, the Texas Cooperative Extension (TCE), and any existing groundwater conservation districts (GCDs) that are adjacent to the PGMA.

(b) The executive director shall request an educational outreach program under this subsection after the commission designates a PGMA under §294.42 of this title.

(1) The executive director shall notify the TCE of the PGMA designation and assist in educational programming developed by the TCE under Texas Water Code (TWC), §35.012(c).

(2) The executive director shall notify the commissioners court of each county of the court's educational programming responsibilities in the PGMA under TWC, §35.012(c).

(c) No sooner that 180 days after the date the commission designated the PGMA under §294.42 of this title, the executive director shall review the status of locally-initiated GCD creation in the PGMA.

(d) The executive director shall identify the areas of the PGMA that are not within a GCD and develop recommended district boundaries that are consistent with the commission's PGMA designation order under §294.42 of this title.

(e) If landowners do not take actions to create a GCD under TWC, §35.012(b), within two years after the date the commission designated the PGMA, the commission shall initiate creation of one or more GCDs under §293.19 of this title (relating to Creation of Groundwater Conservation Districts in Priority Groundwater Management Areas).

[(a) Following the issuance of a commission order under §294.42(i)(2) of this title (relating to Commission Action Concerning PGMA Designation) designating a PGMA and finding that one or more districts should be created in the PGMA and prior to the close of next regular session of the legislature, landowners in the PGMA may:]

[(1) create one or more districts under Chapter 293 of this title (relating to Water Districts);]

[(2) have the area annexed to a district that adjoins the area; or]

[(3) create one or more districts through the legislative process.]

[(b) The executive director shall identify the areas subject to any order of the commission under subsection (a) of this section that have not been incorporated into a district and shall delineate proposed boundaries of a district, or area to be annexed to include those areas, and initiate a report including recommendations to the commission for the annexation of the identified areas to an adjacent existing district under §294.44 of this title (relating to Adding a PGMA for an Existing District) or for the creation of one or more districts under provisions of §293.21 of this title (relating to Commission Creation of Groundwater Conservation Districts in Priority Groundwater Management Area on its Own Motion). This report shall be completed and filed with the commission within 120 days after notice of initiation of the report is given under paragraph (1) of this subsection.]

[(1) The executive director shall provide written notice of the delineation of the boundaries and the initiation of the report to the governing body of each county, regional water planning group, adjacent groundwater district, municipality, river authority, water district, or other entity which supplies public drinking water, including each holder of a certificate of convenience and necessity issued by the commission, and of each irrigation district, located either in whole or in part within the proposed district boundaries.]

[(2) At the same time notice is given under paragraph (1) of this subsection, the executive director shall notify the Texas Agricultural Extension Service of the proposed district boundaries and initiation of the executive director's report to begin an educational program within the identified areas with the assistance and cooperation of the Texas Water Development Board, the commission, other state agencies, and existing districts to inform the residents of the status of the area's water resources and management options including possible formation of a district.]

§294.44.Adding a PGMA to an Existing Groundwater Conservation District.

(a) The executive director shall give notice to the board of directors of the existing groundwater conservation district (GCD), if the commission issues an order under §294.42 of this title (relating to Commission Action Concerning PGMA Designation), or under §293.19 of this title (relating to Creation of a Groundwater Conservation District in a Priority Groundwater Management Area) recommending that a priority groundwater management area (PGMA) or a portion of a PGMA be added to an existing GCD. The executive director shall provide a copy of the order to the board of directors of the existing GCD to which the commission is recommending the PGMA be added and to any other existing GCDs adjacent to the PGMA.

(b) Within 180 days of the notice provided under subsection (a) of this section, the board of directors of the existing GCD shall advise the commission of the outcome of GCD actions or status of current GCD activities under Texas Water Code (TWC), §35.013.

(c) The costs of an election to add a PGMA to an existing GCD that is approved by the voters shall be paid by the existing GCD. The costs of an election to add a PGMA to an existing GCD at which the proposition fails shall be paid by the commission.

(d) If the board of directors of the GCD votes not to pursue addition of the PGMA as recommended by the commission or, if the proposition to add the PGMA to the GCD is defeated at the election, the commission shall either:

(1) within one year create one or more GCDs according to TWC, §36.0151 and §293.19 of this title; or

(2) recommend to the legislature under TWC, §35.018(c), in its biennial report, whether legislative action should be taken to address the need for groundwater management in the PGMA.

[(a) If the commission orders, pursuant to §294.42(i)(3) of this title (relating to Commission Action Concerning PGMA Designation), that the PGMA or a portion of the PGMA be added to an existing district it shall give notice to the board of the existing district.]

[(1) The commission shall submit a copy of the order to the board of the district to which it is recommending the PGMA be added and to any other existing districts adjacent to the PGMA.]

[(2) The board shall vote on the addition of the PGMA to the district and shall advise the commission of the outcome.]

[(b) If the board votes to accept the addition of the PGMA to their district, the board:]

[(1) may request the Texas Agricultural Extension Service, the commission, the Texas Water Development Board, and other state agencies to administer an educational program to inform the residents of the status of the area's water resources and management options including possible annexation into a district;]

[(2) shall call an election within the PGMA as delineated by the commission to determine if the PGMA will be added to their district; and]

[(3) shall designate election precincts and polling places for the elections in the board's order calling for an election under this subsection.]

[(c) The board shall give notice of the election and the proposition to be voted on. The board shall publish notice of the election at least one time in one or more newspapers with general circulation within the boundaries of the PGMA. The notice must be published before the 30th day preceding the date set for the election.]

[(d) The ballots for the election shall be printed to provide for voting for or against the proposition: "The inclusion of _________ (briefly describe the PGMA) in the _______ District." If the district has outstanding debts or taxes, the proposition shall include the following language: "and assumption by the described area of a proportional share of the debts or taxes of the district."]

[(e) Immediately after the election, the presiding judge of each polling place shall deliver the returns of the election to the board, and the board shall canvass the returns for the election within the PGMA and declare the results. If a majority of the voters in the PGMA voting on the proposition vote against adding the PGMA to the district, the board shall declare that the PGMA is not added to the district. The board shall file a copy of the election results with the commission.]

[(f) If the voters approve adding the PGMA to the district, the board of the district to which the PGMA is added shall provide reasonable representation on that board compatible with the district's existing scheme of representation.]

[(g) If the proposition is defeated, another election to add the PGMA to an existing district may not be called before the first anniversary of the date on which the election on the proposition was held.]

[(h) The costs of an election to add a PGMA to an existing district at which the voters approve adding the PGMA to the district shall be paid by the existing district. The costs of an election to create a district or add a PGMA area to an existing district at which the proposition fails shall be paid by the commission.]

[(i) If the proposition is defeated, the commission may recommend to the legislature under Texas Water Code §35.018(c) in its biennial report whether legislative action should be taken to address the need for groundwater management in the PGMA.]

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on April 26, 2002.

TRD-200202605

Stephanie Bergeron

Director, Environmental Law Division

Texas Natural Resource Conservation Commission

Earliest possible date of adoption: June 9, 2002

For further information, please call: (512) 239-4712