Adopted Sections An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 1. ADMINISTRATION Part V. General Services Commission Chapter 113. Central Purchasing Division 1 TAC sec.sec.113.1-113.15, 113.17 (Editor's note: In the April 6, 1993, issue of the Texas Register (18 TexReg 2297), the General Services Commission adopted sec.sec.113.1-113.18, regarding purchasing. The General Services Commission inadvertently left out the submission to adopt the repeal of sec.sec.113.1-113.15, and 113.17. ) The General Services Commission adopts the repeal of sec. sec.113.1-113.15, and 113.17 concerning the central purchasing division, without changes to the proposed text as published in the December 15, 1992, issue of the Texas Register (17 TexReg 8785). The repeals will benefit the public through simplified regulations. The repeals eliminate unnecessary, and obsolete language. No comments were received regarding adoption of the repeals. The repeals are adopted under Texas Civil Statutes, Article 601b, sec.3.01, which provide the General Services Commission with the authority to promulgate rules necessary to accomplish the purpose of Article 3. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 16, 1993. TRD-9325965 Judith M. Porras General Counsel General Services Commission Effective date: August 6, 1993 Proposal publication date: December 15, 1992 For further information, please call: (512) 463-3583 TITLE 4. AGRICULTURE Part I. Texas Department of Agriculture Chapter 5. Quarantines 4 TAC sec.5.63 The Texas Department of Agriculture adopts an amendment to sec.5.63, without changes to the proposed text as published in the June 15, 1993, issue of the Texas Register (18 TexReg 3745). The amendment is adopted to prevent the likelihood of the introduction of the sweet potato weevil into Texas. The sweet potato weevil is an insect pest that is dangerous to the interest of horticulture and agriculture in this state. Specifically, the sweet potato weevil poses a serious threat to the sweet potato industry in Texas. The amendment as adopted adds Merced and Stanislaus Counties in California to the list of regulated areas and prohibits sweet potatoes shipped from these counties into weevil-free areas of Texas. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Agriculture Code, sec.71.001, which provides the Texas Department of Agriculture with the authority to adopt rules for quarantines against out-of-state diseases and pests. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 16, 1993. TRD-9325897 Dolores Alvarado Hibbs Chief Administrative Law Judge Texas Department of Agriculture Effective date: August 6, 1993 Proposal publication date: June 15, 1993 For further information, please call: (512) 463-7583 Chapter 7. Pesticide Regulations 4 TAC sec.sec.7.1, 7.3-7.8, 7.10-7.12, 7.14, 7.16, 7.18-7.22, 7. 24, 7.30, 7.33, 7.34 The Texas Department of Agriculture (the department) adopts amendments to sec.sec.7.1, 7.3-7.8, 7.10-7.12, 7.14, 7.16, 7.18-7.22, 7.24, 7.30, 7.33, and 7.34. Section 7.22 is adopted with changes to the proposed text as published in the April 20, 1993, issue of the Texas Register (18 TexReg 2503). Sections 7.1, 7.3-7.8, 7.10-7.12, 7.14, 7.16, 7.18-7.21, 7.24, 7.30, 7.33, and 7.34 are adopted without changes and will not be republished. The adopted changes are intended to make the regulations clerarer and more consistent with each other and with current federal law, as well as to correct grammatical and citation errors throughout the regulations. Section 7.10(h)(1) has been changed to correct an error regarding the number of years in the certification period for private applicators. Section 7. 22 has been changed in response to comments received from numerous individuals in the applicator business and three associations representing applicators and persons engaged in manufacturing, formulating, and/or distributing agricultural chemicals in Texas. Comments were received in opposition to the proposed change that would require a commercial applicator to provide certain notification regarding the pesticide used if the applicator applies or furnishes the pesticide. The current language requires that the applicator provide such notification only if he or she furnishes the pesticide. Comments generally stated that the current regulation should not be changed and that the proposed change would be cost-prohibitive for the applicator due to the time involved to comply and the unavailability of labels. The department agrees that the requirement that a commercial applicator furnish a complete copy of the label would be onerous and would create an economic hardship on the commercial applicator. The department has deleted the language "applies or" from the proposed change for the purpose of requiring the commercial applicator to provide information on a pesticide applied that was not furnished by the commercial applicator. If an individual furnishes the restricted use or state limited-use pesticide to a commercial applicator, the individual would have to be a licensed applicator or dealer, and should be knowledgeable of the label requirements of this section. The department adds new sec.7.22(a)(3)(B)(i)-(iii) that would give the commercial applicator furnishing the pesticide greater latitude in providing the information required under this section. The department is authorized to regulate the use of pesticides under the Texas Pesticide Control Act and the Texas Agriculture Code, Chapter 76. The adopted changes are intended to clarify the rights and responsibilities of all entities affected by the Act under the Texas Agriculture Code. The amendment to sec.7.1 adds and clarifies definitions. The amendment to sec.7.3 corrects a citation quote, and clarifies labeling requirements concerning use classification, variation of contents, and identification of manufacturer's lot, batch numbers, or symbols. The amendment to sec.7.4 clarifies registration requirements of pesticides concerning the location of lot or batch numbers on containers, registration renewals, and late fee assessments. The amendment to sec.7.5 adds a labeling accompaniment requirement for custom mixes. The amendment to sec.7.6 clarifies the requirements for the registration of a pesticide for a special local need, and the amendment to sec.7.7 adds a requirement for providing the location of the application site for experimental-use permits, as well as correcting the amount of the registration fee. The amendment to sec.7.8 clarifies the requirements for persons who use restricted use or state-limited- use pesticides, and clarifies the records required to be kept by licensed pesticide dealers. The amendment to sec.7.10 adds the requirement for courses approved by the department to meet applicable federal and state laws; allows Texas Agricultural Extension Service specialists to conduct continuing education courses for commercial and noncommercial applicators; and clarifies the requirements for commercial and noncommercial applicators in obtaining continuing education credits for license renewal. The amendment to this section also reduces the number of continuing education units that a commercial and noncommercial applicator must obtain during the three year recertification period from 20 to 15, while increasing the required credits for integrated pest management strategies from one credit to two credits. The requirement for credit in integrated pest management strategies for private applicators has been increased to two credits during the five-year recertification period from the previous on-credit requirement. The amendment to this section further clarifies the requirements for applicators that do not obtain the required number of credits within the recertification period and deletes the ability of a commercial or noncommercial applicator licensed in another state to purchase or apply restricted use or state-limited-use pesticides in Texas. The amendment to sec.7. 11 adds the anti-fouling paint subcategory and adds a subsection to allow the department to enter into a memorandum of agreement with other state or federal agencies for reciprocity in the certification of pesticide applicators. The amendment to sec.7.12 clarifies the testing and licensing requirements for persons wishing to license in the anti-fouling paint subcategory and clarifies the requirement of a test fee for each subcategory. The amendment to sec.7.14 clarifies the requirements for commercial applicators in providing proof of financial responsibility as a condition of licensing. This clarification includes allowing a general aggregate policy if a split limit policy is not available, requiring chemical drift coverage, and listing of all applicators to be covered by the proof of financial responsibility submitted. The amendment to sec.7.16 clarifies the requirements for private applicators to certify and recertify, including correcting the date for private applicators that were issued a certificate on or after January 10, 1989 to obtain a license by December 31, 1994 to continue to purchase or use a restricted use or state- limited-use pesticide. The previous date of December 31, 1995 had erroneously been stated in the existing rule, thereby allowing six years for the private applicator to re-license instead of the intended five year period. The amendment to sec.7.18 clarifies the records required to be kept by commercial and noncommercial applicators concerning pesticide use, adds further requirements concerning how these records must be maintained, and clarifies that the requirements of this section do not apply to applications of livestock protection collars or M-44 sodium cyanide. The amendment to sec.7. 19 specifies the type of equipment that is subject to registration by the department. The amendment to sec.7.20 clarifies the procedures used by the department in investigating complaints. The amendment to sec.7.21 adds the requirement of a lock on the dispensing device for bulk storage tanks, and provides an alternative to pesticide dealers in maintaining a list of poison control centers. The amendment to sec.7.22 clarifies what information is to be provided a person in control of the commodity or site treated. The amendment to sec.7.24 removes the state-limited-use classification of the pesticides chlordane, heptachlor, aldrin, and dieldrin, since uses of these pesticides have been either canceled or prohibited by the Environmental Protection Agency. The amendment to sec.7.30 lists those pesticides that have met the requirements of this section to allow exemption from the 24-hour reentry interval requirement. The amendment to sec.7.33 clarifies the state-limited-use requirements for M-44 sodium cyanide. The amendment to sec.7.34 clarifies the types of activities that require a commercial applicator to be continuously physically present. Comments generally supporting the amendments were submitted by the Texas Agricultural Experiment Station and the Texas Agricultural Extension Service (both of the Texas A&M University System), the Texas Farm Bureau, the Texas Vegetable Management Association, Crosby County Fuel Association (CCFA), the Texas Agricultural Aviation Association (TAAA), and the Texas Agricultural Chemicals Association (TACA). As noted above, comments in opposition to the proposed changes to sec.7.22 were submitted by the TAAA, TACA, CCFA and numerous individuals. Comments were also received in support of the anti-fouling category added to sec.7.12 and concerning the amendment to sec.7.34. In addition to the comments noted above, comments were received with which the department does not agree, and therefore did not incorporate into the adopted regulations. A comment was received concerning the appropriateness of the proposed amendment to sec.7.10 and the addition of compliance with American with Disabilities Act (ADA) and other state and federal laws as a condition of approval for continuing education activities required for recertification. The department believes that as the ultimate issuer of an applicator license for which continuing education activities are required, the department has some responsibility to assure that all such activities are accessible by persons with disabilities covered by the ADA. One comment was received regarding proposed amendments to sec.7.10(g)(2) and the rationale for the requiring of two integrated pest management (IPM) credits for recertification. The department believes that the requiring of two IPM (integrated pest management) credits is needed because IPM emphasizes preventative methods that provide economical long- term solutions to pest problems. It requires basic ecological knowledge about our farming/ranching systems and an effective decision-making process employing scouting, economic thresholds, cultural and mechanical controls, host plant resistance, biological control, and ecologically sound uses of chemicals. Continuing education is imperative in this process; therefore, because of a prevailing lack of knowledge about IPM, TDA is requiring an additional credit in IPM for recertification. The amendments are adopted under the authority of the Texas Agriculture Code, sec.76.003, which authorizes the department to regulate the time and conditions of use of state-limited-use pesticides; sec.76.004, which authorizes the department to adopt rules for carrying out the provisions of Chapter 76, including rules for labeling requirements for pesticides and devices required to be registered under Chapter 76 and rules providing for the safe handling, transportation, storage, display, distribution, or disposal of pesticides and pesticide containers; sec.76.042 which authorizes the department to require information necessary for determining eligibility for registration of a pesticide; sec.76.044, which authorizes the department to charge a $100 fee for registration of a pesticide; sec.76.075, which authorizes the department to prescribe information to be included in dealer records; sec.76.104, which authorizes the department to adopt rules for application of pesticides; sec.76. 105, which authorizes the department to require licensing for use of restricted- use or state-limited-use pesticides; sec.76.106, which authorizes the department to establish license-use categories, establish testing requirements for licensing in those categories and charge a nonrefundable testing fee of not more than $20 for testing in each category; sec.76.110, which authorizes the department to enter into reciprocal agreements with any other state or federal agency for licensing of pesticide applicators; sec.76. 111, which requires the filing of proof of financial responsibility by commercial pesticide applicators and authorizes the department to establish by rule proof of financial responsibility requirements and procedures; sec.76.112, which authorizes the department to prescribe by rule the information to be provided by persons applying for a private applicators license; sec.76.114, which authorizes the department to prescribe by rule the information to be included in records maintained by commercial and noncommercial applicators; sec.76.115, which authorizes the department to adopt standards for registration and inspection of equipment used for application of pesticides; sec.76.131, which provides the department with the authority to adopt rules governing the storage and disposal of pesticides and pesticide containers; and sec.12.024 which provides for the assessment of late fees for renewal of pesticide registrations. sec.7.22. Use Inconsistent with Label Directions. It shall be a violation for any person to use or cause to be used a pesticide in a manner inconsistent with its label or labeling. Use inconsistent with the label includes, but is not limited to: (1) applications at sites, rates, concentrations, intervals, or under conditions not specified in the labeled directions, except: (A) (No change.) (B) applying a pesticide against any target pest not specified on the label or labeling if the application is to the crop, animal, or site specified on the label or labeling, unless the department or the EPA has determined that the use of the pesticide against other pests would cause an unreasonable, adverse effect on the environment, and has required a statement on the label of the pesticide so stating this determination; (C) employing any method of application not prohibited by the labeling unless the labeling specifically states that the product may be applied only by the methods specified on the labeling or unless prohibited by law or regulation; (D) (No change.) (2) (No change.) (3) failure to observe reentry intervals, pre-harvest intervals, grazing restrictions, or worker protection requirements. (A) (No change.) (B) If a commercial applicator furnishes the pesticide, it is the commercial applicator's responsibility to notify the person in control of the commodity or site treated of the requirements of this section that pertain to reentry intervals, preharvest intervals, grazing restrictions, or worker protection requirements, prior to, or at the time of treatment by: (i) furnishing a label of the pesticide(s) used; (ii) providing the requirements in writing; or (iii) furnishing a copy of the label sections regarding the information required in this subparagraph. (4) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 13, 1993. TRD-9325783 Dolores Alvarado Hibbs Chief Administrative Law Judge Texas Department of Agriculture Effective date: August 4, 1993 Proposal publication date: April 20, 1993 For further information, please call: (512) 463-7583 4 TAC sec.7.40 The Texas Department of Agriculture (the department) adopts the repeal of sec.7.40, without changes to the proposed text as published in the April 23, 1993, issue of the Texas Register (18 TexReg 2613). Chlordane, heptachlor, aldrin and dieldrin are currently listed as state- limited-use pesticides used for the control of subterranean termites. The department in a separate submission has proposed to remove these pesticides from its state-limited-use list, since uses of these pesticides have been either cancelled or prohibited by the Environmental Protection Agency (EPA). The repeal of sec.7.40 is proposed to be consistent with a proposed amendment to sec.7.24 and EPA directives, and deletes provisions for use of chlordane, heptachlor, aldrin, and dieldrin in preventing, destroying, or controlling subterranean termites. Comments generally supporting the repeal were submitted by the Texas Agricultural Experiment Station and the Texas Agricultural Extension Service (both of the Texas A&M University System), the Texas Farm Bureau, the Texas Vegetable Management Association, the Texas Agricultural Aviation Association, and the Texas Agricultural Chemicals Association. The repeal is adopted under the Texas Agriculture Code, sec.76.003, which authorizes the department to regulate the time and conditions of use of state- limited-use pesticide; sec.76.004, which authorizes the department to adopt rules for carrying out the provisions of Chapter 76; and sec.76.104, which authorizes the department to adopt rules for application of pesticides. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 13, 1993. TRD-9325784 Dolores Alvarado Hibbs Chief Administrative Law Judge Texas Department of Agriculture Effective date: August 4, 1993 Proposal publication date: April 23, 1993 For further information, please call: (512) 463-7583 TITLE 7. BANKING AND SECURITIES Part IV. Texas Savings and Loan Department Chapter 61. Hearings 7 TAC sec.61.6 The Texas Savings and Loan Department adopts new sec.61.6, with changes to the proposed text as published in the May 25, 1993, issue of the Texas Register (18 TexReg 3343). The new rule is adopted to enable the Savings and Loan Department to recover costs incurred in regard to its administrative hearings. The changes made to the proposed text are intended to clarify that these costs may be charged in hearings on applications filed with the Savings and Loan Department. The new rule will allow the Texas Savings and Loan Department to recover administrative hearings costs regarding applications before the Department, including those related to prosecution of the State's case and the costs charged to the Savings and Loan Department by the State Office of Administrative Hearings. One comment was received which suggested revising the rule to clarify that it applies only to "applications filed with the commissioner or the Savings and Loan Department" in order to make the rule consistent with statutory authority. Another suggestion by the same commenter was that the rule be revised to clarify the intent of the imposition of direct administrative costs, limiting them to costs incurred by the Department. He expressed concern that in a contested case there could be an attempt to have attorneys fees for a party charged against another party in the hearing. After considering the comment, the Department concurs in part with the suggestion to clarify that costs charged be related to hearings on applications filed pursuant to the Texas Savings and Loan Act. In regard to the concern that an effort may be made to have attorneys fees for one party charged against another, the Department revised the wording of the rule to limit the charges to direct administrative costs which are incurred by the Department. The new section is adopted under Texas Civil Statutes, Article 342-114, which provide the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same, and under Texas Civil Statutes, Article 852a, sec.8.01(2), which authorizes the Commissioner and the Finance Commission of Texas to adopt rules relating to fees and procedures for processing, hearing, and deciding applications filed with the Commissioner. sec.61.6. Recovery of Administrative Costs. The Commissioner may for good cause, after notice and hearing, impose direct administrative costs incurred by the Department related to hearings on applications filed pursuant to the Texas Savings and Loan Act, in addition to other sanctions and cost recoveries provided by law or these rules. Direct administrative costs include, but are not limited to, reasonable attorney's fees and expenses, administrative law judge fees and expenses, investigative costs, witness fees and deposition expenses, witnesses' travel expenses, reasonable fees for professional services of expert witnesses, the reasonable cost of a study, analysis, audit, or other project the Commissioner finds necessary in preparation of the state's case. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 15, 1993. TRD-9325884 James L. Pledger Commissioner Texas Savings and Loan Department Effective date: August 6, 1993 Proposal publication date: Mary 25, 1993 For further information, please call: (512) 475-1350 TITLE 16. ECONOMIC REGULATION Part I. Railroad Commission of Texas Chapter 5. Transportation Division (EDITOR'S NOTE: The 73rd Legislature (1993) transferred the regulation and operation of tow trucks and storage facilities from the Texas Department of Licensing and Regulation to the Railroad Commission of Texas (Texas Civil Statues, Article 6687-9b), effective September 1, 1993. The Texas Register is administratively moving these rules from Title 16, Part IV. Texas Department of Licensing and Regulation, Chapters 79 and 80 to Title 16, Part I. Railroad Commission of Texas, Chapter 5, Subchapters CC and DD. The following table illustrates the rule numbers under Part IV. and the new corresponding numbers under Part I.) Part IV. Texas Department of Licensing and Regulation (EDITOR'S NOTE: The 73rd Legislature (1993) transferred the regulation and operation of tow trucks and storage facilities from the Texas Department of Licensing and Regulation to the Railroad Commission of Texas (Texas Civil Statues, Article 6687-9b), effective September 1, 1993. The Texas Register is administratively moving these rules from Title 16, Part IV. Texas Department of Licensing and Regulation, Chapters 79 and 80 to Title 16, Part I. Railroad Commission of Texas, Chapter 5, Subchapters CC and DD. The following table illustrates the rules numbers under Part IV. and the new corresponding numbers under Part I.) TITLE 31. NATURAL RESOURCES AND CONSERVATION Part II. Texas Parks and Wildlife Department Chapter 57. Fisheries Harmful or Potentially Harmful fish, shellfish, and Aquatic Plants 31 TAC sec.sec.57.113, 57.124-57.127 The Texas Parks and Wildlife Commission in a regularly scheduled public hearing held May 20, 1993, adopts amendments to sec. sec.57.113 and 57.124- 57.127, concerning Harmful or Potentially Harmful Exotic Fish, Shellfish, and Aquatic Plants. Section 57.124 is adopted with changes to the proposed text as published in the April 20, 1993, issue of the Texas Register (18 TexReg 2522). The rules as adopted address a number of requests to stock triploid grass carp in public water, to utilize other Asian carp species as biological control agents in situations other than on fish farms, particularly planktivorous species, and to allow the use of Nile tilapia by fish farmers. They have as their factual basis scientific studies and investigations which track population dynamics and species interactions. The rules as adopted are necessary to appropriately address vegetation control, and water quality control, in public water, The rules also allow Texas fish farmers to use a tilapia species that is environmentally safer to use than the ones currently in use. The rules are designed to allow the Texas Parks and Wildlife Department to issue permits for triploid grass carp in public water in situations where the Department has determined that there is a legitimate need and when the stocking is thought to have little or no affect on threatened or endangered species, coastal wetlands, or specific management objectives of other important species; conduct research regarding the efficacy of using planktivorous fish, particularly bighead carp and silver carp, to alter water quality in public water; and permit the use a Nile tilapia for use of fish farms, considering the facts that the species is both advantageous economically to the farmers, and less of an environmental threat than species currently is use. No comments were received from the public prior to the May Commission meeting. Three persons spoke in favor of the proposed regulation changes at the May Commission meeting, none spoke against the proposed changes, and one person expressed concern over a related issue. A representative from Texas Utilities supports the proposed amendments. A representative from Texas Aquatic Plant Management Society supports the proposed amendments. A representative from Texas Aquaculture Association supports the proposed amendments. The amendments are proposed under the Texas Parks and Wildlife Code, sec.66. 007 and sec.66.015, or the Agriculture Code, sec.134.020, which authorizes the department to regulate harmful or potentially harmful exotic fish, shellfish and aquatic plants. sec.57.124. Triploid Grass Carp; Sale, Purchase. (a) Triploid grass carp may be sold only to: (1) a person in possession of a valid Exotic Species Permit authorizing possession of triploid grass carp or; (2) a persons in possession of a valid Triploid Grass Carp Permit, and only in an amount less than or equal to that number specified in the permit. (b) A person who holds a valid Triploid Grass Carp Permit may purchase triploid grass carp only from a fish farmer in possession of a valid Exotic Species Permit authorizing possession of triploid grass carp, and only in a an mount less than or equal to that number specified in the Triploid Grass Carp Permit. (c)-(d) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 16, 1993. TRD-9325891 Paul M. Shinkawa Director, Legal Services Texas Parks and Wildlife Department Effective date: August 7, 1993 Proposal publication date: April 20, 1993 For further information, please call: 1 (800) 792-1112, Ext. 4433 or (512) 389- 4433 Part IX. Texas Water Commission Chapter 330. Municipal Solid Waste Subchapter X. Forms and Documents 31 TAC sec.sec.330.900-330.909, 330.911-330.918 (Editor's note: In the June 18, 1993, issue of the Texas Register (18 TexReg 4023), the Texas Water Commission adopted Chapter 330, regarding Municipal Solid Waste. The Texas Water Commission inadvertently left out the submission to repealed Subchpater X (Forms and Documents), sec.sec.330.900-330.909, 330.911- 330.918. The effective date of these repeals is October 9, 1993. The preamble to these repealed rules appears in the June 18, 1993, pages 4023-4030. ) The repeals are adopted under the Texas Health and Safety Code, Chapter 361, which gives the commission all powers necessary and convenient under that chapter to carry out its responsibilities concerning the regulation and management of municipal solid waste. sec.330.900. Instruction for Filing Part A (General Data) and Part B (Technical Data) of an Application for a Permit/Registration to Operate a Municipal Solid Waste Site. sec.330.901. Appendix A -Application for a Permit/Registration to Operate a Municipal Solid Waste Site Part A (General Data). sec.330.902. Appendix B -Application for a Permit/Registration to Operate a Municipal Solid Waste Site-Part B (Technical Data). sec.330.903. Appendix C -Notice of Appointment. sec.330.904. Appendix D -Affidavit to the Public. sec.330.905. Appendix E -Form for Property Owner Affidavit. sec.330.906. Appendix F -Form for Vacuum Truck Manifest. sec.330.907. Appendix G -Notification. sec.330.908. Appendix H -Registration Form for Transporters of Sludges and Similar Wastes. sec.330.909. Appendix I -Annual Summary Report Form for Sludges and Similar Wastes. sec.330.911. Notice of Intent to File a Permit Application. sec.330.912. Special Permit Application for Stationary Compactors. sec.330.913. Special Permit Application for Transporter Route. sec.330.914. Special Permit Application for Municipal Route. sec.330.915. Establishment Data Sheet. sec.330.916. Transporter Trip Ticket, sec.330.917. Hauler Trip Ticket Municipal Transporter Route. sec.330.918. Hauler Trip Ticket Stationary Compactors. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 15, 1993. TRD-9325810 Mary Ruth Holder Director, Legal Division Texas Water Commission Effective date: October 9, 1993 Proposal publication date: March 9, 1993 For further information, please call: (512) 463-8069 Title 34. PUBLIC FINANCE Part I. Comptroller of Public Accounts Chapter 3. Tax Administration Subchapter B. Natural Gas Production Tax 34 TAC sec.3.20 The Comptroller of Public Accounts adopts new sec.3.20, concerning producer's gross cash receipts, with changes to the proposed text as published in the January 15, 1993, issue of the Texas Register (18 TexReg 295). The new section provides guidance as to what is to be included, or excluded, from gross cash receipts when a payment that relates to the price, the quality, or the quantity of the gas is made by the first purchaser of the gas to the producer. The comptroller has made several changes to the rule in response to comments received. The first change was to include "subject to severance tax" immediately after "producer's gross cash receipts" in subsections (b) and (c). The second change is that subsection (b)(1) now includes "payments made under a contract found not to be an arm's-length contract under subsection (c)(3)." The third change is to subsection (c)(1), which was changed to include "to be produced" immediately following "the sale or purchase of gas." The fourth change is to subsection (f)(1), where "and/or payments found not to be an arm's-length payment under subsection (c)(3)" was added. The following comments on the new rule were received. El Paso Natural Gas Company supports the rule except for the sections relating to payments for price buydowns. El Paso made several suggestions that they feel will clarify the rule. El Paso recommends that "subject to severance tax" be added to subsection (b). The comptroller agrees with this comment. El Paso recommends that subsection (b)(1) be changed as follows: "payments made to the producer by the first purchaser of gas for the market value of gas produced and sold, or to be sold pursuant to the terms of a contract for the sale of gas; and...." The comptroller disagrees with this comment. The addition of "market value" is not necessary because subsection (b)(1) defines what is to be included in producer's gross cash receipts, which is the market value. El Paso suggested that subsection (b)(2) be changed as follows: "all monies that are received as compensation by the producer in connection with any judgment, compromise, or settlement agreement for the market value of gas produced and sold, or to be sold, pursuant to a contract for the sale of gas." The comptroller disagrees with this comment for the same reason we disagree with the comment for subsection (b)(1). El Paso suggested that subsection (c) be changed to include the words "subject to severance tax." The comptroller agrees with this comment. El Paso expressed concern that the wording in subsection (c)(1) could be misinterpreted to imply that the so-called "one MCF rule" is still viable. They suggest subsection (c)(1) be changed as follows: "payments made to the producer by a purchaser under a contract for the sale of (sic) purchase of gas to be produced, if that gas is never produced and delivered to the purchaser pursuant to that contract." The comptroller agrees with this comment. El Paso suggested that the last sentence of subsection (c)(3) be deleted and replaced with "evidence that an initial below then current market price was agreed to be paid for gas to be sold under a replacement contract may be considered, along with other relevant evidence, on the question of whether the replacement contract was entered into as an arm's length transaction; and...." The comptroller disagrees with this comment. The burden will be on the comptroller to prove that the price paid in a replacement contract is a below market price. El Paso suggested that subsection (f)(2) be deleted. The comptroller disagrees with this comment. Subsection (f)(2) is needed to determine when tax is due. Texaco, Inc., on behalf of several producing subsidiary companies including Texaco Exploration and Production, Inc. and Four Star Oil and Gas Company endorsed the comments filed by El Paso Natural Gas Company. The Texas Independent Producer and Royalty Owners Association, Enserch Exploration, Inc., Lone Star Gas Company, Enron Corporation, West Texas Gas, and The Association of Texas Intrastate Natural Gas Pipelines expressed the opinion that "buydowns" are not taxable and only payments for gas produced should be taxed. The attorney for Enron and West Texas Gas considers a "buydown" to be the same as a "buyout," and therefore not taxable. The comptroller disagrees with these comments. The comptroller considers payments made to buydown the price of gas to be a part of producer's gross cash receipts. The comptroller feels that a "buydown" is essentially an installment purchase device and, as such, is taxable. Enserch felt the guidance provided for in the proposed rule is too late and does not conform to the Tax Code. Enserch also worries that the proposed rule will be given a retroactive effect. The comptroller disagrees with these comments. The comptroller feels the rule is needed to clarify what is to be included, or excluded, from producer's gross cash receipts. The comptroller has applied subsection (d) on a retroactive basis for the purpose of allocating a settlement among several claims. Lone Star Gas Company contends the definition of "non-recoupable payment" in subsection (a)(2) conflicts with the use of the term "non-recoupable" in subsection (f)(2). The comptroller disagrees with this comment. Even though the payment may be classified as a non-recoupable payment, a buydown payment is considered part of producer's gross cash receipts. Since Lone Star takes delivery of gas on the premises where it is produced, they are required to withhold the tax from the payments made to the producer. They contend that this withholding requirement will require the keeping of two sets of books if subsection (f)(2) of the rule is followed. The comptroller disagrees with this comment. A tracking system may be needed, but it should not result in two sets of books. Lone Star questions the intent of subsection (c)(3) if the comptroller determines a replacement gas purchase contract is not an arm's length contract. The comptroller has determined that the payment would be treated the same as a "buydown" payment and has amended subsection (b)(1) accordingly. The new section is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. sec.3.20. Producer's Gross Cash Receipts. (a) The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Arm's-length transaction-A transaction between parties free of fraud or intent to evade the tax under this section. (2) Non-recoupable payment-A payment made by a purchaser to a producer which is not refundable and will not be applied toward the purchase price of gas taken in the future. (3) Recoupable payment-A payment made by a purchaser to a producer and is to be applied toward the price of gas to be produced and delivered to the purchaser during future periods. (4) Related party-Any party with common ownership and exercising control over, or under the control of, the other party, or owned by another party which has common ownership and control over both contracting parties. (b) The producer's gross cash receipts subject to severance tax shall include: (1) payments made to the producer by the first purchaser of gas which relate to the price of gas produced and taken pursuant to the terms of a contract for the sale of gas, including a contract found not to be an arm's-length contract by subsection (c)(3) of this section; and (2) all monies that are received as compensation by the producer in connection with any judgment, compromise, or settlement agreement relating to the recovery of the contract price of gas produced, as provided by subsection (d) of this section. (c) The producer's gross cash receipts subject to severance tax shall not include: (1) payments made to the producer by a purchaser under a contract for the sale or purchase of gas to be produced, if the gas is never produced and delivered to the purchaser pursuant to that contract; (2) reimbursement for litigation-related expenses, such as documented attorney's fees or court costs; or reasonable interest agreed upon by the parties, or in the absence of an agreement between the parties an amount to be determined by or from the records of the producer; or court-ordered interest received by the producer in connection with any judgment, compromise, or settlement agreement arising out of a dispute involving a contract for the sale of gas; (3) a payment made to a producer by a gas purchaser to terminate a gas purchase contract. However, a replacement contract entered into within 90 days by the producer and same purchaser, or a party related to that purchaser, covering sales from the same leases or unit subject to the terminated contract may be examined to determine if the replacement contract is an arm's-length transaction between the parties. The burden in establishing that a replacement contract is not an arm's-length contract is on the comptroller. A below market price paid for the gas in a replacement contract will be evidence that the contract was not arm's length; and (4) a payment made to a producer by a gas purchaser to amend any provision in the gas purchase contract, except for a provision affecting the price to be paid by the purchaser. (d) This subsection is solely for the purpose of allocating a settlement among several claims. (1) Any judgment, compromise, or settlement amount received shall be prorated based upon the documented amounts due under the contract for each issue according to the records of the producer when the value received by a producer from a purchaser in settlement of a dispute concerning pricing and any other issue associated with the gas sales/purchase contract is less than the full amount sought by the producer. Any amount allocated as a payment defined in subsection (c)(1) of this section is not taxable. The value subject to tax is the product obtained by multiplying the settlement amount, minus litigation- related expenses and interest, by a fraction, the numerator of which is the documented value assigned to pricing and the denominator of which is the total documented amount sought by the producer. For example, a settlement of $110,000 (minus litigation-related expenses and interest of $10, 000) for a pricing dispute of $25,000, and an amount of $225,000 for failure to pay for gas not taken, would result in a taxable settlement value of $10, 000 (100,000 X 25,000/250,000). (2) Records of the producer shall include, but are not limited to: (A) the contracts and the settlement agreements; (B) accounting entries, including entries reflecting receivables and payables; (C) court pleadings; and (D) worksheets, including calculations reflecting settlement amounts. (3) Whenever it is necessary to determine taxable value under this subsection, the greatest weight shall be given to the records in the order that they are listed in paragraph (2) of this subsection. (e) When gas is sold for consideration other than cash or products extracted from the gas, the taxable value shall be determined as follows. (1) When gas is sold for cash and any consideration other than products or residue or both, the tax shall be computed on the producer's gross cash receipts for the gas sold and, with regard to the non-cash consideration, on the gross value of all items received. (2) When gas is sold for any consideration other than cash, products, or residue, or a combination thereof, the tax shall be computed on the gross value of all items received for the gas sold. (3) For purposes of this subsection, the reasonable market value shall be assigned to the non-cash consideration. (f) Tax is due according to the following. (1) Tax is due on payments, including recoupable payments as defined in this section and/or payments found not to be arm's-length buyouts under subsection (c)(3) of this section, made to the producer by the first purchaser of gas when the gas is produced and delivered to the purchaser. (2) If a producer receives a non-recoupable payment as consideration for amending any provision in the contract affecting the price of the gas, then the tax shall be due based upon the value the producer would have received under the pricing provisions of the contract before they were amended until: (A) the difference between the value the producer would have received before the contract price was amended and the value the producer received after the contract price was amended equals the non-recoupable payment; or (B) until production from the property ceases; or (C) until the properties are sold or until the contract is terminated in an arm's-length transaction. (3) This subsection is solely for the purpose of determining when tax is due. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 15, 1993. TRD-9325861 Martin Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: August 5, 1993 Proposal publication date: January 7, 1993 For further information, please call: (512) 463-4852 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 48. Community Care for Aged and Disabled Eligibility 40 TAC sec.48.2911 The Texas Department of Human Services (DHS) adopts an amendment to sec.48. 2911, without changes to the proposed text as published in the June 4, 1993, issue of the Texas Register (18 TexReg 3562). The justification for the amendment is to increase the maximum number of hours per week of family care services that a priority-1 client can receive. The amendment will function by assisting individuals who need additional hours of service to remain in the community. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapter 22, which provides the department with the authority to administer public assistance programs. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 16, 1993. TRD-9325915 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: September 1, 1993 Proposal publication date: June 4, 1993 For further information, please call: (512) 450-3765 Chapter 50. Day Activity and Health Services Reimbursement Methodology for Day Activity and Health Services 40 TAC sec.50.6903 The Texas Department of Human Services (DHS) adopts an amendment to sec.50. 6903, without changes to the proposed text as published in the June 11, 1993, issue of the Texas Register (18 TexReg 3688). The justification for the amendment is to change the method used to determine the reimbursement rate. The proposed method will better reflect the costs incurred in the DAHS industry. The amendment will function by ensuring continuation of the DAHS program. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs and under Texas Civil Statutes, Article 4413(502), sec.16, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 16, 1993. TRD-9325914 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: September 1, 1993 Proposal publication date: June 11, 1993 For further information, please call: (512) 450-3765