Part 2. PUBLIC UTILITY COMMISSION OF TEXAS
Chapter 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS
Subchapter L. NUCLEAR DECOMMISSIONING
The Public Utility Commission of Texas (commission) proposes new §25.304, regarding the funding of nuclear decommissioning trusts and the related requirements to be met by power generation companies (PGCs) operating in Texas. The proposed new rule is intended to implement the requirements of Public Utility Regulatory Act (PURA) §39.206, Texas Utilities Code Annotated (Vernon 2007), as added by the 80th Texas Legislature. The proposed new rule will establish the minimum financial assurance standard for PGCs interested in constructing nuclear generation power plants as well as the funding, administration, and monitoring requirements for nuclear decommissioning trust funds. This rule is a competition rule subject to judicial review as specified in PURA §39.001(e). Project Number 34888 is assigned to this proceeding.
Mr. Richard Lain, Financial Analyst, Rate Regulation Division, Financial Review Section, has determined that for each year of the first five-year period the proposed section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section.
Mr. Lain has determined that for each year of the first five years the proposed section is in effect the public benefit anticipated as a result of enforcing the section will be the assurance that PGCs are financially capable of decommissioning nuclear power plants once they have been removed from public service. This development will assist the State of Texas in achieving its goal of fostering a competitive market for the purchase and sale of electricity. The commission currently has rules applicable to nuclear decommissioning trusts for nuclear generating plants constructed by the previously bundled electric utilities in Texas. PURA §39.206 requires the commission to develop similar rules for new nuclear generating plants that may be constructed by PGCs operating in Texas, as a means of encouraging the development of nuclear power in the state. The construction of such plants may provide benefits to the public interest by diversifying the fuel mix of generating plants in Texas and making Texas less dependent upon existing fossil fuel sources. The proposed new section provides a structure for funding of nuclear decommissioning trusts that places the funding obligation on owners of the plants, with ratepayers only providing a guarantee for funding. The proposed new section also specifies the information required to establish the funding mechanism and the reporting requirements to enable the commission to monitor and enforce the requirements for nuclear decommissioning trusts. There will be no adverse economic effect on small businesses or micro-businesses as a result of enforcing this section.
Mr. Lain has also determined that for each year of the first five years the proposed section is in effect there should be no effect on a local economy, and therefore no local employment impact statement is required under Administrative Procedure Act (APA), Texas Government Code §2001.022.
The commission staff will conduct a public hearing on this rulemaking, if requested pursuant to the Administrative Procedure Act, Texas Government Code §2001.029, at the commission's offices located in the William B. Travis Building, 1701 North Congress Avenue, Austin, Texas 78701, on Friday, February 1, 2008, at 9:30 a.m. The request for a public hearing must be received within 21 days after publication.
Comments on the proposed new section may be submitted to the Filing Clerk, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 78711-3326, within 21 days after publication. Sixteen copies of comments to the proposed amendment are required to be filed pursuant to §22.71(c) of this title. Comments should be organized in a manner consistent with the organization of the proposed rule. The commission invites specific comments regarding the implementation of the proposed section. All comments should refer to Project Number 34888.
This new section is proposed under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.002 (Vernon 2007) (PURA), which provides the Public Utility Commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; PURA §39.206, which requires the commission to adopt rules governing the establishment and operation of nuclear decommissioning trusts established for new nuclear generating units.
Cross Reference to Statutes: Public Utility Regulatory Act §14.002 and §39.206.
§25.304.Nuclear Decommissioning Funding and Requirements for Power Generation Companies.
(a) Purpose. The purpose of this section is to establish the terms for power generation companies (PGCs) for using a PGC decommissioning trust to satisfy the financial assurance requirements for decommissioning a nuclear generating unit and to delineate the rights and obligations of PGCs electing to use a commission-approved method for providing funds from Texas customers for decommissioning a nuclear generating unit, as a means of complying with nuclear decommissioning financial assurance requirements.
(1) A PGC is not required to use the methods set out in this section and may discontinue the use of the methods set out in this section, if it chooses to satisfy the financial assurance requirements of the federal Nuclear Regulatory Commission by using other methods acceptable to the Nuclear Regulatory Commission.
(2) A PGC decommissioning trust established in accordance with this section is separate from a Nuclear Decommissioning Trust created under §25.303 of this title (relating to Nuclear Decommissioning Following the Transfer of Texas Jurisdictional Nuclear Generating Plant Assets).
(b) Applicability. A PGC owning all or a portion of a qualifying nuclear generating unit may use a PGC decommissioning trust as an external sinking fund in compliance with this section provided that the use of the methods of financial assurance set out in this section shall be available only to the first six nuclear generating units under construction after January 1, 2007 and before January 15, 2015, that elect to use a PGC decommissioning trust.
(c) Definitions.
(1) Decommissioning--includes the safe decommissioning and decontamination of a nuclear generating unit, equipment, and materials consistent with federal Nuclear Regulatory Commission requirements.
(2) External sinking fund--A fund established and maintained by setting aside funds periodically in an account segregated from the PGC's assets and outside the PGC's administrative control in which the total amount of funds would be sufficient to pay decommissioning costs at the time termination of operation is expected. An external sinking fund may be in the form of a trust, escrow account, government fund, certificate of deposit, or deposit of government securities.
(3) PGC decommissioning trust--Funds that are contained in one or more external and irrevocable trusts created for the purpose of protecting and holding revenue collected from a PGC to cover the costs of decommissioning a Texas jurisdictional nuclear generating plant at the end of its useful life.
(4) Retail electric customer--A retail electric customer in a geographic area of Texas in which retail customer choice has been implemented, or a retail electric customer of a municipally-owned utility or electric cooperative that has an agreement to purchase power from a nuclear generating unit.
(d) Application. If a PGC elects to use a PGC decommissioning trust, the PGC shall submit an application to the commission for an order establishing the amount of annual decommissioning funding and approving trust agreements. A PGC may combine applications for more than one qualifying nuclear generating unit. An application must contain the following information:
(1) Identification of each nuclear generating unit included in the application;
(2) Quantification of the PGC's percentage of ownership of each unit;
(3) Decommissioning cost study using the most currently available information on the cost of decommissioning each unit as set out in subsection (h)(2) of this section;
(4) Funding analysis identifying the expected amount of annual decommissioning funding determined as set out in subsection (i) of this section;
(5) Description of the method to be used to satisfy the state assurance obligation set forth in subsection (k) of this section, including any guarantee agreements, support agreements, credit agreements, or letters of credit or surety bonds;
(6) Agreements with an institutional trustee and investment manager to manage the PGC decommissioning trust that are consistent with this section and the terms and conditions required by the federal Nuclear Regulatory Commission; and
(7) Projected date for beginning funding of the PGC decommissioning trust, which must be prior to the commencement of initial fuel load and commercial operation of the nuclear generating unit.
(e) Commission Review.
(1) The commission staff will endeavor to recommend approval, amendment, or disapproval of an application setting annual decommissioning funding and financial agreements to implement the trust requirements within 120 days of receipt of a sufficient application, unless a hearing on the application is required.
(2) A request for hearing shall be filed by the date specified by the presiding officer which shall be no more than 60 days after the filing of the application. If a hearing is scheduled, the commission will endeavor to issue a final order within 180 days after the filing of a request for hearing.
(3) If no hearing is requested, the commission staff concludes that the application setting annual decommissioning funding and the trust agreements meet all requirements of this section, and the commission staff recommends approval, the application may be approved administratively or informally pursuant to §22.35 of this title (relating to Informal Disposition).
(4) If the commission staff recommends an amendment to the funding or trust agreements, within 14 days after filing of staff's recommendation, the PGC shall either file an amended application incorporating the staff's proposed amendments or request a hearing.
(5) If no hearing is requested and the PGC files an amended application that meets all requirements of this section and incorporates the staff recommendations, the application may be approved administratively or informally pursuant to §22.35 of this title.
(6) If the commission staff recommends denial and the PGC requests a hearing, or if the PGC does not file an amended application incorporating staff's recommendations within 14 days, the request shall be docketed as a contested case proceeding to approve, modify, or reject the application.
(f) Order. An order approving the application shall establish the amount of annual funding necessary to meet the decommissioning obligations for the nuclear generating unit over the unit's operating license period as established by the federal Nuclear Regulatory Commission or over a shorter period of time at the election of the PGC.
(g) Annual Reports. On or before May 1 of each year, each PGC for which the commission has approved a funding amount and trust agreements under this section shall file an annual report for the prior year that provides the status of its PGC decommissioning trusts and any changes in the administration of the trusts, and an update of its ability to fund the PGC decommissioning trust. The report shall be on a form approved by the commission.
(h) Periodic Commission Review. At least once every three years the PGC shall file a decommissioning cost study and funding analysis or updates of previous studies using the most current information reasonably available to the PGC.
(1) The commission shall review the studies submitted by a PGC and other currently available information using the procedure provided in subsection (e) of this section.
(2) During the initial and each periodic review of decommissioning costs, the following information shall be provided:
(A) The decommissioning cost study and funding analysis accompanied by a report and testimony supporting the analysis and the requested annual funding amount. The funding analysis shall be based on the most current information reasonably available concerning the cost of decommissioning, an allowance for contingencies of not more than 10% of the cost of decommissioning, the balance of funds in the decommissioning trusts, anticipated escalation rates, the anticipated after-tax return on the funds in the trust, and other relevant factors. In no event will the cost estimate for basic radiological decommissioning be less than the minimum amount required by the federal Nuclear Regulatory Commission. The funding analysis shall be accompanied by a description of the assumptions used in the analysis and shall calculate the required annual funding amount necessary to ensure sufficient funds to decommission the nuclear generating plant at the end of its useful life.
(B) A demonstration that the decommissioning funds are being or will be invested prudently and in compliance with the investment guidelines in subsection (o) of this section.
(C) A demonstration of efforts to achieve optimum tax efficiency as defined in subsection (o)(2)(C) of this section, including, as applicable, maintenance of tax-exempt status or efforts to achieve "qualified" status in accordance with Internal Revenue Code §468A (or any successor thereto) with respect to the PGC's taxable PGC decommissioning trusts.
(D) Confirmation that the federal Nuclear Regulatory Commission either has made, or will make, a finding that there is reasonable assurance of the financial qualifications of the PGC, as required by federal regulations.
(E) Compliance with the state funding assurance obligation set forth in subsection (k) of this section.
(3) The commission shall ensure that the amount of annual decommissioning funding is consistent with the most recent decommissioning cost study and funding analysis, and that the PGC decommissioning trust is adequately funded. The PGC shall update its state assurance obligation to reflect changes in the annual decommissioning funding amount.
(i) Annual Decommissioning Funding Amount. The amount of annual decommissioning funding for a PGC decommissioning trust shall be an amount that, based on such factors as the balance of funds in the decommissioning trust, anticipated escalation rates, and anticipated after-tax return on funds in the decommissioning trust, will cover the cost of decommissioning a nuclear generating unit at the end of its operating license period. The amount shall be calculated based on the most current reasonably available information, consistent with the most recent decommissioning cost study, and divided by the remaining years of the license or a shorter period of time at the election of the PGC. The decommissioning cost study and funding analysis shall include the information required by subsection (h)(2)(A) of this section. The commission, on its own motion or on the motion of the commission staff, may initiate a proceeding to review the PGC's trust balances or the annual funding amount. The PGC shall provide any information required to conduct the review in accordance with the commission's procedural rules.
(j) Creditworthiness of PGC. For the purposes of the initial application under this section, creditworthiness of the PGC will be established primarily through satisfying the State Assurance Obligation as provided for in subsection (k) of this section.
(k) State Assurance Obligation. A PGC using a commission approved PGC decommissioning trust shall provide additional financial assurances that funds will be available to satisfy 16 years of annual decommissioning funding, based on the most recent annual decommissioning funding amount approved by the commission (the state assurance obligation amount). If the remaining funding contribution period is less than 16 years, the state assurance obligation will be based on the remaining number of years of annual decommissioning funding. The state assurance obligation amount will be the discounted value of annual decommissioning funding for the relevant period up to 16 years. Any arrangement for satisfying the state assurance obligation shall permit the trustee of a decommissioning trust to demand payment by any company holding funds or providing an assurance and require the company holding funds or providing an assurance to remit funds to the trust, in accordance with this section. The PGC shall include in its annual report a demonstration of compliance with the requirements of this subsection. The state assurance may be used to provide assurance required by state or federal law for other similar purposes relating to the operation of the facility, such as assurance for the funding to cover estimated operation costs, provided that adequate terms are included to replenish the amounts available under the assurance mechanism if funds are withdrawn for any such other purpose. The state assurance obligation may be accomplished by using one or more of the following methods at the election of the PGC, in the form approved by the commission:
(1) A PGC may satisfy the state assurance obligation by depositing the required amount of funds into an escrow account, a government fund, a nuclear decommissioning trust subject to the commission's investment standards set out in this title, or other type of acceptable agreement with an entity whose operations are regulated and examined by a federal or State agency.
(2) A PGC may satisfy the state assurance obligation by obtaining a written guarantee or financial support agreement from a direct or higher-tier parent corporation or a corporation with a substantial business relationship with the PGC. The guarantee or financial support agreement must be payable to the PGC decommissioning trust. The parent or supporting corporation must meet one of the following standards:
(A) The parent or supporting corporation must have:
(i) Tangible net worth of at least 10 times the state assurance amount, excluding the net book value of the nuclear units subject to the state assurance obligation;
(ii) Tangible net worth of at least $500 million;
(iii) Net working capital of at least 10 times the annual decommissioning funding amount; and
(iv) Assets located in the United States amounting to at least 90% of the total assets or at least 10 times the state assurance amount.
(B) The parent or supporting corporation must be otherwise financially qualified, based upon a finding by the commission that there is reasonable assurance that the parent or supporting corporation will be able to meet its obligations under the guarantee or other agreement.
(3) A PGC may satisfy the state assurance obligation by providing an adequate surety, insurance, or other guarantee method that meets the following minimum requirements:
(A) A guarantee that the state assurance obligation will be paid to the PGC decommissioning trust upon any default by the PGC in satisfying its annual funding obligation.
(B) A surety method may be in the form of a surety bond, letter of credit, or line of credit. Any surety method or insurance used to satisfy the state assurance obligation must contain the following conditions:
(i) The surety method or insurance must be open-ended, or, if written for a specified term, such as five years, must be renewed automatically, unless 90 days or more prior to the renewal day the issuer notifies the commission and the PGC of its intention not to renew. The surety or insurance must also provide that the full face amount will be paid to the PGC decommissioning trust automatically prior to the expiration without proof of forfeiture if the PGC fails to provide a replacement acceptable to the commission within 30 days after receipt of notification of cancellation.
(ii) The issuer must have a minimum rating of A- by Standard and Poor's Corporation, A3 by Moody's Investor's Service or the equivalent rating from A.M. Best.
(iii) The surety or insurance must be payable to the PGC decommissioning trust.
(4) A PGC may satisfy the state assurance obligation using any other method acceptable to the commission considering the relative risk factors and creditworthiness attributes of the applicant's financial characteristics to minimize exposure of retail electric customers to default by power generation companies.
(l) Annual Funding Obligation. A PGC using a PGC decommissioning trust shall remit annually to the fund the most recent annual decommissioning funding amount approved by the commission. A PGC shall make periodic payments according to a schedule submitted to the commission and shall notify the trustee of the decommissioning trust and the commission within 10 days of the date of any failure to make a scheduled payment. The commission shall not consider a PGC to be in default of its annual funding obligation unless it fails to remit the necessary amounts within 60 days of notice of potential default. If a PGC is in default of its annual funding obligation, it shall notify the trustee of the decommissioning trust and the commission within 10 days of the date of the default. If the PGC fails to cure its failure to make scheduled payment within 60 days of the commission notice, the commission may direct the trustee to request that any entity providing state assurance remit annually to the fund the most recent annual decommissioning funding amount approved by the commission in accordance with the schedule approved by the commission, including any payments that the PGC has failed to make, until the PGC is not in default or until the assurance is depleted.
(m) Funding Shortfall and Unspent Funds.
(1) If the PGC fails to meet its annual funding requirements and if the state assurance obligations are insufficient to meet the annual funding obligations or are otherwise not honored, the commission shall determine the manner in which any shortfall in the cost of decommissioning a nuclear generating unit shall be recovered from retail electric customers in the state. For retail electric customers of a municipally-owned utility or an electric cooperative that has an agreement to purchase power from a nuclear generating unit, the amount of the shortfall in the cost of decommissioning the nuclear generating unit that the customers are responsible for is limited to a portion of that shortfall that bears the same proportion to the total shortfall as the amount of electric power generated by the nuclear generating unit and purchased by the municipally-owned utility or electric cooperative bears to the total amount of power generated by the nuclear generating unit.
(2) Decommissioning funds that remain unspent after decommissioning of the nuclear generating unit is complete shall be returned to the PGC and the retail electric customers based on the proportionate amount, in real terms, that the PGC and retail electric customers paid into the fund.
(n) Administration of the PGC Decommissioning Trust Funds.
(1) The PGC shall assure that the PGC decommissioning trust is managed so that the funds are secure and earn a reasonable return; and that the funds provided from the PGC's operating revenues, plus the amounts earned from investment of the funds, will be available at the time of decommissioning.
(2) The PGC shall appoint an institutional trustee and may appoint one or more investment managers. Unless otherwise specified in this section, the Texas Trust Code controls the administration and management of the PGC decommissioning trusts, except that the appointed trustees need not be qualified to exercise trust powers in Texas.
(3) The PGC shall retain the right to replace the trustee with or without cause. In appointing a trustee, the PGC shall have the following duties, which will be of a continuing nature:
(A) A duty to determine whether the trustee's fee schedule for administering the trust is reasonable, when compared to other institutional trustees rendering similar services, and meets the requirement of this section;
(B) A duty to investigate and determine whether the past administration of trusts by the trustee has been reasonable;
(C) A duty to investigate and determine whether the financial stability and strength of the trustee is adequate;
(D) A duty to investigate and determine whether the trustee has complied with the trust agreement and this section as it relates to trustees; and
(E) A duty to investigate any other factors that may bear on whether the trustee is suitable.
(4) The PGC shall retain the right to replace the investment manager with or without cause. In appointing an investment manager, the PGC shall have the following duties, which will be of a continuing nature:
(A) A duty to determine whether the investment manager's fee schedule for investment management services is reasonable, when compared to other such managers, and meets the requirement of this section;
(B) A duty to investigate and determine whether the past performance of the investment manager in managing investments has been reasonable;
(C) A duty to investigate and determine whether the financial stability and strength of the investment manager is adequate for purposes of liability;
(D) A duty to investigate and determine whether the investment manager has complied with the investment management agreement and this section as it relates to investments; and
(E) A duty to investigate any other factors which may bear on whether the investment manager is suitable.
(5) The PGC shall execute an agreement with the institutional trustee. The agreement shall be consistent with this section and may include additional restrictions on the trustee. A PGC shall not grant the trustee powers that are greater than those provided to trustees under the Texas Trust Code or that are inconsistent with the limitations of this section. The agreement shall include the restrictions set forth in this section and may include additional restrictions on the trustee.
(A) The interest or other earnings of the trust become part of the trust corpus.
(B) A trustee owes the same duties with regard to the interest and other earnings of the trust as are owed with regard to the corpus of the trust.
(C) A trustee shall have a continuing duty to review the trust portfolio for compliance with investment guidelines and governing regulations.
(D) A trustee shall not lend funds from the PGC decommissioning trust to itself, its officers, or its directors.
(E) A trustee shall not invest or reinvest PGC decommissioning trusts in instruments issued by the trustee, except for time deposits, demand deposits, or money market accounts of the trustee. However, investments of a PGC decommissioning trust may include mutual funds that contain securities issued by the trustee if the securities of the trustee constitute no more than 5% of the fair market value of the assets of such mutual funds at the time of the investment.
(F) The agreement shall comply with all applicable requirements of the federal Nuclear Regulatory Commission.
(6) The PGC shall execute an agreement with the investment manager. If the trustee performs investment management functions, the contractual provisions governing those functions must be included in either the trust agreement or a separate investment management agreement. A PGC shall not grant the manager powers that are greater than those provided to trustees under the Texas Trust Code or that are inconsistent with the limitations of this section. The agreement shall include the restrictions set forth in this section and may include additional restrictions on the manager.
(A) An investment manager shall, in investing and reinvesting the funds in the trust, comply with this section.
(B) The interest and other earnings of the trust become part of the trust corpus.
(C) An investment manager owes the same duties with regard to the interest and other earnings of the trust as are owed with regard to the corpus of the trust.
(D) An investment manager shall have a continuing duty to review the trust portfolio to determine the appropriateness of the investments.
(E) An investment manager shall not invest funds from the PGC decommissioning trust with itself, its officers, or its directors.
(F) The agreement shall comply with all applicable requirements of the federal Nuclear Regulatory Commission.
(7) Prior to executing an amended agreement with the institutional trustee or investment managers, the proposed amended agreement shall be filed at the commission for review along with a redlined version showing all changes made since the document was reviewed by the commission, and copies shall be provided to the commission's Legal Division and Rate Regulation Division or successor divisions.
(8) A copy of the trust agreement, any investment management agreement, and any amendments shall be filed with the commission within 30 days after the execution or modification of the agreement, and copies shall be provided to appropriate commission staff and the Office of Public Utility Counsel.
(o) Trust investments.
(1) The funds in a PGC decommissioning trust should be invested consistent with the following goals. The PGC may apply additional prudent investment goals to the funds so long as they are not inconsistent with the stated goals of this subsection.
(A) The funds should be invested with a goal of earning a reasonable return commensurate with the need to preserve the value of the assets of the trusts.
(B) In keeping with prudent investment practices, the portfolio of securities held in the PGC decommissioning trust shall be diversified to the extent reasonably feasible given the size of the trust.
(C) Asset allocation and the acceptable risk level of the portfolio should take into account market conditions, the time horizon remaining before the commencement and completion of decommissioning, and the funding status of the trust. While maintaining an acceptable risk level consistent with the goal in this section, the investment emphasis when the remaining life of the liability exceeds five years should be to maximize net long-term earnings. The investment emphasis in the remaining investment period of the trust should be on current income and the preservation of the fund's assets.
(D) In selecting investments, the impact of the investment on the portfolio's volatility and expected return net of fees, commissions, expenses and taxes should be considered.
(2) The following requirements shall apply to all PGC decommissioning trusts under this section. Where a PGC has multiple trusts for a single generating unit, the restrictions contained in this subsection apply to all trusts in the aggregate for that generating unit. For purposes of this section, a commingled fund is defined as a professionally managed investment fund of fixed-income or equity securities established by an investment company regulated by the Securities Exchange Commission or a bank regulated by the Office of the Comptroller of the Currency.
(A) The total trustee and investment manager fees paid on an annual basis by the PGC for the entire portfolio including commingled funds shall not exceed 0.7% of the entire portfolio's average annual balance.
(B) For the purpose of this subsection, a commingled or mutual fund is not considered a security; rather, the diversification standard applies to all securities, including the individual securities held in commingled or mutual funds. Once the portfolio of securities (including commingled funds) held in the PGC decommissioning trusts contains securities with an aggregate value in excess of $20 million, it shall be diversified such that:
(i) no more than 5.0% of the securities held may be issued by one entity, with the exception of the federal government, its agencies and instrumentalities, and
(ii) the portfolio shall contain at least 20 different issues of securities. Municipal securities and real estate investments shall be diversified as to geographic region.
(C) The PGC may invest the decommissioning funds by means of qualified or unqualified PGC decommissioning trusts; however, the PGC shall, to the extent permitted by the Internal Revenue Service, invest its decommissioning funds in "qualified" PGC decommissioning trusts, in accordance with the Internal Revenue Service Code §468A. The PGC shall avoid, whenever possible, the investment of taxable decommissioning funds in "unqualified" PGC decommissioning trusts.
(D) The use of derivative securities in the trust is limited to those whose purpose is to enhance returns of the trust without a corresponding increase in risk or to reduce risk of the portfolio. Derivatives may not be used to increase the value of the portfolio by any amount greater than the value of the underlying securities. Prohibited derivative securities include, but are not limited to, mortgage strips; inverse floating rate securities; leveraged investments or internally leveraged securities; residual and support tranches of Collateralized Mortgage Obligations; tiered index bonds or other structured notes whose return characteristics are tied to non-market events; uncovered call/put options; large counter-party risk through over-the-counter options, forwards and swaps; and instruments with similar high-risk characteristics.
(E) The use of leverage (borrowing) to purchase securities or the purchase of securities on margin for the trust is prohibited.
(F) The following investment limits shall apply to the percentage of the aggregate market value of all non-fixed income investments relative to the total portfolio market value.
(i) Except as noted in clause (ii) of this subparagraph, when the weighted average remaining life of the liability exceeds five years, the equity cap is 60%;
(ii) When the weighted average remaining life of the liability ranges between five years and 2.5 years, the equity cap shall be 30%.;
(iii) When the weighted average remaining life of the liability is less than 2.5 years, the equity cap shall be 0%. Additionally, during all years in which expenditures for decommissioning the nuclear units occur, the equity cap shall also be 0%;
(iv) For purposes of this subsection, the weighted average remaining life in any given year is defined as the weighted average of years between the given year and the years of each decommissioning outlay, where the weights are based on each year's expected decommissioning expenditures divided by the amount of the remaining liability in that year; and
(v) Should the market value of non-fixed income investments, measured monthly, exceed the appropriate cap due to market fluctuations, the PGC shall, as soon as practicable, reduce the market value of the non-fixed income investments below the cap. Such reductions may be accomplished by investing all future contributions to the fund in debt securities as is necessary to reduce the market value of the non-fixed income investments below the cap, or if prudent, by the sale of equity securities.
(vi) A PGC decommissioning trust shall not invest in securities issued by the PGC collecting the funds or any of its affiliates or any company providing security for the state assurance obligation; however, investments of a PGC decommissioning trust may include commingled funds that contain securities issued by the PGC if the securities of the PGC constitute no more than 5.0% of the fair market value of the assets of such commingled funds at the time of the investment.
(3) The following restrictions shall apply to all PGC decommissioning trusts. Where a PGC has multiple trusts for a single generating unit, the restrictions contained in this subsection apply to all trusts in the aggregate for that generating unit.
(A) A PGC decommissioning trust shall not invest trust funds in corporate or municipal debt securities that have a bond rating below investment grade (below "BBB-" by Standard and Poor's Corporation or "Baa3" by Moody's Investor's Service) at the time that the securities are purchased and shall reexamine the appropriateness of continuing to hold a particular debt security if the debt rating of the company in question falls below investment grade at any time after the debt security has been purchased. Commingled funds may contain some below investment grade bonds; however, the overall portfolio of debt instruments shall have a quality level, measured quarterly, that is not below a "AA" grade by Standard and Poor's Corporation or "Aa2" by Moody's Investor's Service. In calculating the quality of the overall portfolio, debt securities issued by the federal government shall be considered as having a "AAA" rating.
(B) At least 70% of the aggregate market value of the equity portfolio, including the individual securities in commingled funds, shall have a quality ranking from a major rating service such as the earnings and dividend ranking for common stock by Standard and Poor's or the quality rating of Ford Investor Services. Further, the overall portfolio of ranked equities shall have a weighted average quality rating equivalent to the composite rating of the Standard and Poor's 500 index, assuming equal weighting of each ranked security in the index. If the quality rating, measured quarterly, falls below the minimum quality standard, the PGC shall as soon as practicable and prudent to do so, increase the quality level of the equity portfolio to the required level. A PGC decommissioning trust shall not invest in equity securities where the issuer has a capitalization of less than $100 million.
(C) The following guidelines shall apply to the investments made through commingled funds. Examples of commingled funds appropriate for investment by PGC decommissioning trusts include equity-indexed funds, actively managed equity funds, balanced funds, bond funds, and real estate investment trusts.
(i) The commingled funds should be selected consistent with the goals of this section.
(ii) In evaluating the appropriateness of a particular commingled fund, the PGC has the following duties, which shall be of a continuing nature:
(I) A duty to determine whether the fund manager's fee schedule for managing the fund is reasonable, when compared to fee schedules of other such managers;
(II) A duty to investigate and determine whether the past performance of the investment manager in managing the commingled fund has been reasonable relative to prudent investment and PGC decommissioning trust practices and standards; and
(III) A duty to investigate the reasonableness of the net after-tax return and risk of the fund relative to similar funds, and the appropriateness of the fund within the entire PGC decommissioning trust investment portfolio.
(iii) The payment of load fees shall be avoided.
(iv) Commingled funds focused on specific foreign countries, industries, or market sectors or concentrated in a few holdings shall be used only as necessary to balance the trust's overall investment portfolio mix.
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 December 19, 2007.
TRD-200706493
Adriana A. Gonzales
Rules Coordinator
Public Utility Commission of Texas
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 936-7223
The Texas Racing Commission proposes amendments to 16 TAC §§311.1, 311.101, 311.102, 311.104, 311.105, 311.108, 311.212, 311.214, 311.216, and 311.301. The Commission also proposes new §311.52 and §311.111. The amendments and new rules are proposed in conjunction with the Commission's rule review of Chapter 311 pursuant to Texas Government Code, §2001.039. Notice of this rule review was published in the October 26, 2007, issue of the Texas Register (32 TexReg 7699).
The sections proposed for amendment relate to: the requirement to be licensed by the Commission; the specific responsibilities of owners, trainers, jockeys, and agents; the responsibilities that apply to all occupational licensees; and prohibitions on the use and possession of alcohol and drugs by occupational licensees. The new sections proposed for adoption relate to a new category of license for owners' spouses and the licensing requirements for jockey agents.
Charla Ann King, Executive Secretary for the Commission, has determined that for each year of the first five years the new and amended rules are in effect the following statements regarding the anticipated public benefit will apply:
The changes to §311.1 clarify that an individual who enters an animal into a race is participating in racing, and therefore must be licensed at the time of entry. This change will enhance the ability of the racing associations to orderly accept and process race entries.
Proposed new §311.52 authorizes an owner's spouse to apply for a Spouse's License, which is a new category of license. Currently, if an owner wants the spouse to accompany him or her on the backside, the owner or the trainer must sign in the spouse as a visitor at the security gate. This is inconvenient for the owner, the trainer, and security staff. By undergoing the licensing process, a spouse will have increased access to the backside, while also increasing security by undergoing a criminal background check and becoming subject to the Commission's rules and regulations.
The changes to §311.101 clarify the licensing requirements for owners by incorporating a reference to existing §313.301(a)(2), which requires a person to apply for an owner's license before claiming a horse, even though at that point the person may not be the owner of record of a properly registered horse. The changes also establish that a horse owner must be licensed one hour prior to post time of the first race on race day, which will reduce the number of late scratches that occur due to unlicensed owners attempting to enter horses into races. Finally, the changes improve the agency's responsiveness to the associations by allowing the stewards, instead of the executive secretary, to approve each association's Change of Trainer form.
The change to §311.102 establishes that a greyhound owner must be licensed one hour prior to post time of the first race on race day, which will reduce the number of late scratches that occur due to unlicensed owners attempting to enter horses into races.
The changes to §311.104 reduces redundancy by allowing the Commission to waive the written and/or the practical test if it determines that the applicant already holds a current trainer's license issued by another pari-mutuel racing jurisdiction. The changes also clarify the responsibilities of trainers by incorporating language from the Association of Racing Commissioners International's model rules.
The changes to §311.105 clarify the requirements for apprentice jockeys by making those requirements equivalent to the requirements established for jockeys. The changes also require that jockeys and apprentice jockeys have a certificate of proficiency issued by a licensed starter.
The changes to §311.108 will allow a trainer or owner to appoint a stable foreman or an assistant trainer as his or her authorized agent.
New §311.111 is proposed in conjunction with the proposed repeal of §313.408, which is published elsewhere within this issue of the Texas Register. The changes proposed in new §311.111 establish the licensing requirements for a jockey agent, and clarify the duties and responsibilities of the jockey agent.
The changes to §311.212 increase security by requiring each licensee to wear his or her license badge at all times while engaged in performing duties or while in a restricted area. The changes create a new exception for licensees who are performing duties as assistant starters.
The changes to §311.214 improve the Commission's ability to assist with the collection of debts owed by a licensee for services or supplies that are provided while the race animal is racing or in training at any licensed racing facility in Texas.
The changes to §311.216 improve safety by requiring licensees to wear A.S.T.M. approved safety helmets while mounted on a horse or holding a horse in a starting gate.
The changes to §311.301 improve the ability of agency staff to verify the legitimacy of medical prescriptions by requiring that prescriptions for dangerous drugs or controlled substances be issued by a physician who licensed in the United States and who is also authorized to prescribe such medications by the US Drug Enforcement Agency.
There are be no foreseeable implications relating to costs or revenues for state or local governments as a result of enforcing or administering the new rules or proposed amendments.
The rule will have no adverse economic effect on small or micro-businesses, and therefore preparation of an economic impact statement and a regulatory flexibility analysis is not required.
There are no negative impacts upon employment conditions in this state as a result of the proposed amendments or new rules.
All comments or questions regarding the proposed amendment may be submitted in writing within 30 days following publication of this notice in the Texas Register to Gloria Giberson, Assistant to the Executive Secretary for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas 78711-2080, telephone (512) 833-6699, or fax (512) 833-6907.
Subchapter A. LICENSING PROVISIONS
Division 1. OCCUPATIONAL LICENSES
The amendment is proposed under the Texas Racing Act, Texas Revised Civil Statutes, Article 179e, §3.02, which authorizes the Commission to make rules relating exclusively to horse and greyhound racing, and §7.02, which requires the commission to adopt categories of licenses for the various occupations and specify the qualifications and experience required for licensing in each category.
The amendment implements Texas Civil Statutes, Article 179e.
§311.1.Occupational Licenses.
(a) License Required.
(1) A person other than a patron may not participate in racing at which pari-mutuel wagering is conducted unless the person has a valid license issued by the Commission. Any individual who enters an animal is deemed to be a participant in racing.
(2) A licensee may not employ a person to work at a racetrack at which pari-mutuel wagering is conducted unless the person has a valid license issued by the Commission.
(b) - (d) (No change.)
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 December 21, 2007.
TRD-200706614
Mark Fenner
General Counsel
Texas Racing Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 833-6699
The new rule is proposed under the Texas Racing Act, Texas Revised Civil Statutes, Article 179e, §3.02, which authorizes the Commission to make rules relating exclusively to horse and greyhound racing, and §7.02, which requires the commission to adopt categories of licenses for the various occupations and specify the qualifications and experience required for licensing in each category.
The new rule implements Texas Civil Statutes, Article 179e.
§311.52.Spouse's License.
The spouse of a licensed owner may apply for a Spouse's License by completing the license application, a fingerprint card, and paying the license fee. The Spouse's License does not allow the spouse to participate in racing.
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 December 21, 2007.
TRD-200706615
Mark Fenner
General Counsel
Texas Racing Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 833-6699
16 TAC §§311.101, 311.102, 311.104, 311.105, 311.108, 311.111
The amendment is proposed under the Texas Racing Act, Texas Revised Civil Statutes, Article 179e, §3.02, which authorizes the Commission to make rules relating exclusively to horse and greyhound racing, and §7.02, which requires the commission to adopt categories of licenses for the various occupations and specify the qualifications and experience required for licensing in each category.
The amendment implements Texas Civil Statutes, Article 179e.
§311.101.Horse Owners.
(a) General Provisions.
(1) The owner of a horse, as listed on the animal's
registration paper, must obtain an owner's license from the Commission.
Except as otherwise provided by §313.301(a)(2) of this title
(relating to Officials and Rules of Horse Racing), a
[
A
]
person may not be licensed as an owner if the person is not the owner
of record of a properly registered horse that the person intends to
race in Texas.
Except as otherwise provided by this subsection,
the owner must be licensed one hour prior to the post time of the
first race of the day in which the owner intends to race the animal.
(2) If the owner is not an individual, each individual who is a director, officer, or partner of the owner or who has an ownership interest in the horse of 5.0% or more must be licensed by the Commission.
(3) If the owner is not an individual, the owner must provide to the Commission:
(A) a sworn statement by the chief executive officer of the owner or by one of the partners of the owner that the officer or partner represents the owner and is responsible for the horse;
(B) a statement that the owner is authorized by law to do business in Texas; and
(C) a list of the names and addresses of all individuals having an ownership interest in the horse.
(4) If the owner is not an individual, the ownership entity must:
(A) designate a representative; or
(B) file an authorized agent form with the Commission and pay the prescribed fee.
(5) If the registered owner of a horse is a minor, a financial responsibility form approved by the executive secretary must be signed by the parent or guardian of the owner assuming financial responsibility for the debts incurred for the training and racing of the horse.
(b) - (c) (No change.)
(d) Change of Trainer. An owner may change the trainer of his or her horse registered at a licensed race meeting provided:
(1) the request to change trainers is submitted for
approval to the stewards on a form provided by the association and
approved by the
stewards
[
executive secretary
];
(2) the trainer from whom the horse is being transferred signs the form releasing custody of the horse;
(3) the trainer to whom the horse is being transferred signs the form accepting responsibility for the horses; and
(4) the stewards approve the transfer.
(e) - (g) (No change.)
§311.102.Greyhound Owners.
(a) General Provisions.
(1) Except as otherwise provided by this subsection, the owner of a greyhound, as listed on the animal's registration paper, must obtain an owner's license from the Commission. A person may not be licensed as an owner if the person is not the owner of record of a properly registered greyhound that the person intends to race in Texas. The owner must be licensed one hour prior to the post time of the first race of the day in which the owner intends to race the animal.
(2) If the owner is not an individual, each individual who is a director, officer, or partner of the owner or who has an ownership interest in the greyhound of 5.0% or more must be licensed by the Commission.
(3) If the owner is not an individual, the owner must provide to the Commission:
(A) a sworn statement by the chief executive officer of the owner or by one of the partners of the owner that the officer or partner represents the owner and is responsible for the greyhound;
(B) a statement that the owner is authorized by law to do business in Texas; and
(C) a list of the names and addresses of all individuals having an ownership interest in the greyhound.
(4) If the owner is not an individual, the ownership entity must:
(A) designate a representative; or
(B) file an authorized agent form with the Commission and pay the prescribed fee.
(5) If the registered owner of a greyhound is a minor, a financial responsibility form approved by the executive secretary must be signed by the parent or guardian of the owner assuming financial responsibility for the debts incurred for the training and racing of the greyhound.
(b) - (d) (No change.)
§311.104.Trainers.
(a) Licensing
(1) Except as otherwise provided by this subsection, a trainer must obtain a trainer's license before the trainer may enter a horse or greyhound in a race. A trainer may enter a horse or greyhound in a stakes race without first obtaining a license, but must obtain a license before the horse or greyhound may start in the stakes race. Except as otherwise provided by this section, to be licensed by the Commission as a trainer, a person must:
(A) be at least 18 years old;
(B) satisfactorily complete a written examination prescribed by the Commission; and
(C) satisfactorily complete a practical examination prescribed by the Commission and administered by the stewards or racing judges or designee of the stewards or racing judges.
(2) The standard for passing the written examination must be printed on the examination. An applicant who fails the examination may not take the examination again before the 60th day after the date the applicant failed the examination. The Commission may waive the requirement of a written and/or practical examination for a person who has a current license issued by another pari-mutuel racing jurisdiction. If a person for whom the examination requirement was waived demonstrates an inability to adequately perform the duties of a trainer, through excessive injuries, rulings, or other behavior, the stewards or racing judges may require the person to take the written examination. If such a person fails the examination, the stewards or racing judges shall suspend the person's license for 60 days with reinstatement contingent upon passing the written examination .
(3) A trainer must use the trainer's legal name to be licensed as a trainer. A trainer who is also an owner may use a stable name or kennel name in the capacity of owner.
(4) To be licensed as an assistant trainer, a person must qualify in all respects for a trainer's license and be in the employ of a licensed trainer. An assistant trainer's license carries all the privileges and responsibilities of a trainer's license.
(b) - (j) (No change.)
(k) Other Responsibilities - A trainer is responsible for:
(1) the condition and contents of stalls/kennels, tack rooms, feed rooms, and other areas which have been assigned by the association;
(2) maintaining the assigned stable/kennel area in a clean, neat and sanitary condition at all times;
(3) ensuring that fire prevention rules are strictly observed in the assigned stable/kennel area;
(4) disclosure of the true and entire ownership of each animal in the trainer's care, custody or control. Any change in ownership shall be reported immediately to, and approved by, the stewards/judges and recorded by the racing secretary;
(5) training all animals owned wholly or in part by the trainer that are participating at the race meeting;
(6) ensuring that, at the time of arrival at a licensed racetrack, each animal in the trainer's care is accompanied by a valid health certificate/certificate of veterinary inspection;
(7) using the services of those veterinarians licensed by the Commission to attend animals that are on association grounds;
(8) promptly notifying the official veterinarian of any reportable disease and any unusual incidence of a communicable illness in any animal in the trainer's charge;
(9) immediately reporting to the stewards/judges and the official veterinarian if the trainer knows, or has cause to believe, that a animal in the trainer's custody, care or control has received any prohibited drugs or medication;
(10) maintaining a knowledge of the medication record and status of all animals in the trainer's care;
(11) ensuring the fitness of a animal to perform creditably at the distance entered;
(12) ensuring that the trainer's horse are properly shod, bandaged and equipped; and
(13) notifying owners upon the revocation or suspension of the trainer's license. Upon application by the owner, the stewards/judges may approve the transfer of such animal to the care of another licensed trainer, and upon such approved transfer, such animal may be entered to race.
§311.105.Jockeys.
(a) License
(1) To be licensed as a jockey or apprentice jockey , an individual must be at least 16 years of age and provide proof of a satisfactory physical examination as described in subsection (b) of this section .
(2) An individual licensed as a jockey or apprentice jockey may not be licensed in another capacity.
(3) To be licensed as a jockey or apprentice jockey, an individual must have a certificate of proficiency issued by a starter licensed in this state or be currently licensed in another state as a jockey or apprentice jockey.
(b) Physical Examination.
(1) To be eligible to ride in a race, a jockey or apprentice jockey must have on file with the Commission proof of a satisfactory physical examination conducted during the 12-month period preceding the date of the race.
(2) An examination required by this section must be performed by a licensed physician and include tests for visual acuity and hearing.
(3) The Commission or the stewards may require a jockey or apprentice jockey to be reexamined at any time and may refuse to permit a jockey or apprentice jockey to ride until proof of a satisfactory examination is submitted.
(c) Apprentice Jockeys.
(1) An apprentice jockey is a rider of thoroughbreds who:
(A) is permitted to ride with the apprentice weight allowance in accordance with Chapter 313 of this title (relating to Officials and Rules of Horse Racing); and
(B) is otherwise qualified to be licensed as a jockey.
[
(2)
To be licensed as
an apprentice jockey, an individual must submit with the application:]
[
(A)
proof of a satisfactory physical examination
as required for a jockey's license: and]
[
(B)
a certificate of proficiency issued
by a starter licensed in this state.]
(2)
[
(3)
] The Rules relating
to a jockey apply to apprentice jockeys.
(d) (No change.)
§311.108.Authorized Agent.
(a) To be appointed an authorized agent, an individual
must be at least 18 years old and licensed as [
either
]
an individual owner,
stable foreman, assistant trainer,
or
a trainer. A written agency appointment authorizing him or her to
act on behalf of a licensed owner or licensed trainer in racing matters
not directly related to the care and training of horses must accompany
the appointment. The authorization shall be on a form provided by
the Commission and shall define the agent's powers and limits. The
authorization must be signed by the principals and the agent.
(b) - (c) (No change.)
§311.111.Jockey Agent.
(a) Eligibility.
(1) An applicant for a license as a jockey agent shall:
(A) demonstrate to the stewards that the applicant has a contract for agency with at least one jockey who has been licensed by the Commission; and
(B) be qualified, as determined by the stewards or other Commission designee, by reason of experience, background and knowledge. A jockey agent's license from another jurisdiction may be accepted as evidence of experience and qualifications. Evidence of qualifications may require passing one or both of the following:
(i) a written examination; or
(ii) an interview or oral examination.
(2) Applicants not previously licensed as a jockey agent shall be required to pass a written and oral examination.
(b) Limit on Contracts.
(1) During a thoroughbred or mixed race meet a jockey agent may serve as agent for no more than two jockeys and one apprentice jockey.
(2) During a quarter horse meet a jockey agent may serve as agent for no more than three jockeys.
(c) Responsibilities.
(1) A jockey agent shall not make or assist in making engagements for a jockey other than those the agent is licensed to represent.
(2) A jockey agent shall file written proof of all engagements and changes of engagements with the stewards.
(3) A jockey agent shall maintain current and accurate records of all engagements made, such records being subject to examination by the stewards at any time.
(4) A jockey agent may make entries for an owner or trainer with prior permission from the owner or trainer.
(5) When making an entry, a jockey agent shall sign the entry card and shall be responsible for the accuracy of the information provided on the entry card.
(d) Prohibited Areas. A jockey agent is prohibited from entering the jockey room, winner's circle, racing strip, paddock or saddling enclosure during the hours of racing, unless permitted by the stewards.
(e) Agent Withdrawal (Termination). When any jockey agent withdraws from representation of a jockey, the jockey agent shall immediately notify the stewards and shall submit to the stewards a list of any unfulfilled engagements made for the jockey.
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 December 21, 2007.
TRD-200706616
Mark Fenner
General Counsel
Texas Racing Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 833-6699
16 TAC §§311.212, 311.214, 311.216
The amendment is proposed under the Texas Racing Act, Texas Revised Civil Statutes, Article 179e, §3.02, which authorizes the Commission to make rules relating exclusively to horse and greyhound racing.
The amendment implements Texas Civil Statutes, Article 179e.
§311.212.Duty to Wear Badge.
(a) Except as otherwise provided by this section, a
licensee shall display his or her license badge in a conspicuous place
on his or her body at all times that the licensee is
engaged in performing duties or is in a restricted area.
[
on the association grounds.
]
(b) This section does not apply to a licensee who is:
(1) performing duties as an assistant starter; or
[(1) not engaged in performing the licensee's duties and is in the grandstand area of the association grounds; or]
(2) mounted on a horse.
§311.214.Financial Responsibility.
(a) This section applies to the financial responsibility
of licensees of the Commission for debts legally owed the transfer,
purchase or lease of a race animal or for services or supplies relating
to the care, transportation, or maintenance
provided to
[
of
] a race animal [
participating
]
while racing or in training at a licensed facility
[
at a licensed race meeting
] in this state. Services and supplies to which this
section applies include, but are not limited to:
(1) veterinary services, medication, and veterinary supplies;
(2) transportation services;
(3) farrier services and supplies;
(4) feed and nutritional supplements; and
(5) racing supplies.
(b) - (e) (No change.)
§311.216.Conduct in Stable Area.
(a) - (b) (No change.)
(c) A licensee who is
mounted on a horse or stable
pony on association grounds must wear an A.S.T.M. approved safety
helmet at all times.
[
galloping or ponying a horse or riding
a horse in a race shall wear a properly fastened helmet, of a type
approved by the executive secretary, at all times.
]
(d) A licensee may not hold a horse in a starting gate
unless the licensee wears properly fastened
safety helmet approved by A.S.T.M.
[
of a type approved by the executive secretary.
]
(e) (No change.)
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 December 21, 2007.
TRD-200706617
Mark Fenner
General Counsel
Texas Racing Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 833-6699
The amendment is proposed under the Texas Racing Act, Texas Revised Civil Statutes, Article 179e, §3.02, which authorizes the Commission to make rules relating exclusively to horse and greyhound racing.
The amendment implements Texas Civil Statutes, Article 179e.
§311.301.Use and Possession Prohibited.
(a) Except as otherwise provided by this section, an occupational licensee may not, while performing duties required of the licensee, have present in his or her system a dangerous drug as defined by the Health and Safety Code, Chapter 483, or a controlled substance as defined by the Texas Controlled Substances Act, Health and Safety Code, Chapter 481. The Commission, stewards, or racing judges may decline to take disciplinary action against a licensee who violates this subsection if the Commission, stewards, or racing judges determine that:
(1) the licensee holds a current prescription for the
drug or substance, which was issued by a
physician licensed to
practice in the United States and authorized to dispense or prescribe
controlled substances as provided by 21 USC 801 et seq. and the physician
is acting in the course of the physician's
[
licensed physician acting in the course of the physician's
] professional practice;
(2) - (3) (No change.)
(b) An occupational licensee may not possess, while on association grounds, a dangerous drug as defined by the Health and Safety Code, Chapter 483, or a controlled substance as defined by the Texas Controlled Substances Act, Health and Safety Code, Chapter 481. This subsection does not apply to:
(1) a licensee who holds a current prescription for
the drug or substance, which was issued by a
physician licensed
to practice in the United States and authorized to dispense or prescribe
controlled substances as provided by 21 USC 801 et seq. and the physician
is acting in the course of the physician's
[
licensed physician acting the course of the physician's
] professional practice;
or
(2) a veterinarian licensed by the Commission who has obtained permission to possess a controlled substance or dangerous drug under §319.14 of this title (relating to Possession of Controlled Substances).
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 December 21, 2007.
TRD-200706618
Mark Fenner
General Counsel
Texas Racing Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 833-6699
Subchapter B. ENTRIES, SCRATCHES, AND ALLOWANCES
The Texas Racing Commission proposes an amendment to 16 TAC §§313.111. Section 313.111 relates to age restrictions on horses' eligibility to start in pari-mutuel races.
The proposed changes to §313.111 will allow horses older than twelve years to compete if they have finished in the top three of a race within the previous twelve months, or if the board of stewards review the horse's prior performance and gives specific authorization for the horse to compete.
Charla Ann King, Executive Secretary for the Texas Racing Commission, has determined that, for the first five-year period the proposed amendment is in effect, there will be no fiscal implications for state or local government as a result of enforcing the amendment.
Ms. King has determined that, for each year of the first five years the proposed amendment to §313.111 is in effect, the anticipated public benefit will be to expand the opportunities for older, yet still competitive, horses to race in Texas, while still protecting the health and safety of those horses.
The rule proposal will have no adverse economic effect on small or micro-businesses; therefore, preparation of an economic impact statement and a regulatory flexibility analysis is not required.
There are no negative impacts upon employment conditions in this state as a result of the proposed amendment.
All comments or questions regarding the proposed amendment may be submitted in writing within 30 days following publication of this notice in the Texas Register to Gloria Giberson, Assistant to the Executive Secretary for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas 78711-2080, telephone (512) 833-6699, or fax (512) 833-6907.
The amendment is proposed under the Texas Racing Act, Texas Revised Civil Statutes, Article 179e, §3.02, which authorizes the Commission to make rules relating exclusively to horse and greyhound racing.
The proposed amendment implements Texas Civil Statutes, Article 179e.
§313.111.Age Restrictions.
(a) - (c) (No change.)
(d) A horse that is more than 12 years of age may not
start in a pari-mutuel race in this state[
,
] unless
:
[
the horse has won a race at an officially sanctioned pari-mutuel racetrack
during the 12-month period preceding the race in which the horse is
to start.
]
(1) the horse has finished first, second, or third in an officially sanctioned pari-mutuel race during the 12-month period preceding the race in which the horse is to start; or
(2) upon due consideration of the horse's prior performance, the board of stewards has given specific authorization for the horse to start.
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 December 21, 2007.
TRD-200706607
Mark Fenner
General Counsel
Texas Racing Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 833-6699
(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 Racing Commission or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)
The Texas Racing Commission (Commission) proposes the repeal of §313.408, Jockey Agents. Section 313.408 relates to the responsibilities of jockey agents.
The repeal of §313.408 is proposed in conjunction with the Commission's review of Chapter 311 as published in the October 26, 2007, issue of the Texas Register (32 TexReg 7699). With this repeal, the Commission is also proposing new §311.111, Jockey Agent, which is published elsewhere within this issue of the Texas Register.
Charla Ann King, Executive Secretary for the Texas Racing Commission, has determined that, for the first five-year period the proposed repeal is in effect, there will be no fiscal implications for state or local government as a result of enforcing the repeal.
Ms. King has determined that, for each year of the first five years the proposed repeal of §313.408, along with the adoption of §311.111, is in effect the anticipated public benefit will be to establish the eligibility requirements and clarify the responsibilities and duties of a jockey agent.
The proposed repeal will have no adverse economic effect on small or micro-businesses; therefore, preparation of an economic impact statement and a regulatory flexibility analysis is not required.
There are no negative impacts upon employment conditions in this state as a result of the proposed repeal.
All comments or questions regarding the proposed repeal may be submitted in writing within 30 days following publication of this notice in the Texas Register to Gloria Giberson, Assistant to the Executive Secretary for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas 78711-2080, telephone (512) 833-6699, or fax (512) 833-6907.
The repeal is proposed under the Texas Racing Act, Texas Revised Civil Statutes, Article 179e, §3.02, which authorizes the Commission to make rules relating exclusively to horse and greyhound racing.
The proposed repeal implements Texas Civil Statutes, Article 179e.
§313.408.Jockey Agent.
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 December 21, 2007.
TRD-200706612
Mark Fenner
General Counsel
Texas Racing Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 833-6699
Subchapter D. DRUG TESTING
Division 3. PROVISIONS FOR HORSES
The Texas Racing Commission proposes an amendment to 16 TAC §319.363, Testing for Total Carbon Dioxide. Section 319.363 relates to the testing of horses to detect illegal milkshaking, which is the illegal administration of a bicarbonate or other alkalinizing substance to enhance a race horse's performance.
The change to §319.363 will lower the level at which a violation occurs from 39 millimoles per liter in a race horse serum specimen to 37 millimoles per liter.
Charla Ann King, Executive Secretary for the Texas Racing Commission, has determined that for the first five year period the amendment is in effect there will be no fiscal implications for state or local government as a result of enforcing the amendment.
Ms. King has also determined that for each year of the first five years the amendment is in effect the anticipated public benefit will be the enhanced integrity of racing through the increased detection of milkshaking.
The rule will have no adverse economic effect or additional cost on small or micro-businesses, and therefore preparation of an economic impact statement and a regulatory flexibility analysis is not required.
There are no negative impacts upon employment conditions in this state as a result of the proposed amendment.
All comments or questions regarding the proposed amendment may be submitted in writing within 30 days following publication of this notice in the Texas Register to Gloria Giberson, Assistant to the Executive Secretary for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas 78711-2080, telephone (512) 833-6699, or fax (512) 833-6907.
The amendment is proposed under the Texas Racing Act, Texas Revised Civil Statutes, Article 179e, §3.02, which authorizes the Commission to make rules relating exclusively to horse and greyhound racing.
The amendment implements Texas Civil Statutes, Article 179e.
§319.363.Testing for Total Carbon Dioxide.
(a) Findings and Presumptions.
(1) The commission finds that a total carbon dioxide level of
37
[
39
] millimoles per liter or more
in equine serum can be achieved only through the administration, by
any means, of a bicarbonate-containing substance or other alkalinizing
substance.
(2) A horse entered or participating in a race may not be administered a bicarbonate-containing substance or other alkalinizing substance which causes it to carry in its body an excess level of total carbon dioxide.
(3) A positive finding by a chemist of total carbon
dioxide level at or above
37
[
39
] millimoles
per liter in a race horse serum specimen is an excess level of total
carbon dioxide and prima facie evidence that the race horse was administered
a bicarbonate-containing substance or other alkalinizing substance
in violation of this section.
(b) - (d) (No change.)
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 December 21, 2007.
TRD-200706621
Mark Fenner
General Counsel
Texas Racing Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 833-6699
Subchapter D. SIMULCAST WAGERING
Division 1. GENERAL PROVISIONS
The Texas Racing Commission proposes amendments to 16 TAC §321.407, Approval of Wagering on Simulcast Import Races. Section 321.407 relates to the process by which a racetrack association requests approval to import a simulcast race signal, and the factors the executive secretary considers in determining whether to approve the request.
The change to §321.407 addresses the minimum number of days in advance of the first race covered by a request that an association must submit its request for approval. The change reduces the minimum number of days from three to one.
Charla Ann King, Executive Secretary for the Texas Racing Commission, has determined that for the first five year period the amendment is in effect there will be no fiscal implications for state or local government as a result of enforcing the amendment.
Ms. King has also determined that for each year of the first five years the amendment is in effect the anticipated public benefit will be to provide the racetrack associations with more flexibility in scheduling their simulcast race schedules.
The rule will have no adverse economic effect on small businesses, and therefore preparation of an economic impact statement and a regulatory flexibility analysis is not required.
There are no negative impacts upon employment conditions in this state as a result of the proposed amendment.
All comments or questions regarding the proposed amendment may be submitted in writing within 30 days following publication of this notice in the Texas Register to Gloria Giberson, Assistant to the Executive Secretary for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas 78711-2080, telephone (512) 833-6699, or fax (512) 833-6907.
The amendment is proposed under the Texas Racing Act, Texas Revised Civil Statutes, Article 179e, §3.02, which authorizes the Commission to make rules relating exclusively to horse and greyhound racing, and §11.01, which requires the Commission to adopt rules regulating pari-mutuel wagering on greyhound and horse racing.
The amendment implements Texas Civil Statutes, Article 179e.
§321.407.Approval of Wagering on Simulcast Import Races.
(a) To receive approval to conduct pari-mutuel wagering
on a simulcast import, an association must file a request for approval
to import to the executive secretary on a form prescribed by the executive
secretary. A request for approval to import a simulcast must be filed
at least
one day
[
three days
] before the first simulcast race covered by the request.
(b) - (e) (No change.)
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 December 21, 2007.
TRD-200706623
Mark Fenner
General Counsel
Texas Racing Commission
Earliest possible date of adoption: February 3, 2008
For further information, please call: (512) 833-6699