PROPOSED RULES Before an agency may permanently adopt a new or amended section or repeal an existing section, a proposal detailing the action must be published in the Texas Register at least 30 days before action is taken. The 30-day time period gives interested persons an opportunity to review and make oral or written comments on the section. Also, in the case of substantive action, a public hearing must be granted if requested by at least 25 persons, a governmental subdivision or agency, or an association having at least 25 members. Symbology in proposed amendments. New language added to an existing section is indicated by the use of bold text. [Brackets] indicate deletion of existing material within a section. TITLE 7. BANKING AND SECURITIES Part VII. State Securities Board Chapter 109. Transactions Exempt from Registration 7 TAC sec.109.15 The State Securities Board proposes new sec.109.15, concerning designated matching services. A new form, sec.133.35-Application for Designation as Matching Service Under sec.109.15, has been proposed in conjunction with this proposal in the December 23, 1994, issue of the Texas Register (19 TexReg 10166). Micheal Northcutt, Director, Securities Registration Division, has determined that for the first five-year period the rule is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the rule. Mr. Northcutt also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be to facilitate the establishment and maintenance of designated matching services to assist capital raising efforts of small business issuers. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the rule as proposed. Comments on the proposal may be submitted to Rada Lynn Potts, State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167. The new rule is proposed under Texas Civil Statutes, Article 581, sec.28-1. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. The new rule affects Texas Civil Statutes, Article 581-12. sec.109.15. Designated Matching Services. (a) In general. The use of a designated matching service facility by an issuer member shall not constitute public solicitation or advertisement within the meaning of The Securities Act, ssec.5.I and 5.Q, sec.109.13 of this title (relating to Limited Offering Exemptions), sec.109.14 of this title (relating to Oil, Gas and Other Mineral Interests), or sec.139.16 of this title (relating to Sales to Individual Accredited Investors), and a designated matching service shall not be deemed a dealer subject to registration within the meaning of The Securities Act or the rules and regulations thereunder. (b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise: (1) Designated matching service-A matching service designated by the Securities Commissioner under this section. (2) Designated matching service facility-A computer system operated, or a seminar or meeting conducted, by a designated matching service. (3) Investor member-An investor who has been properly qualified by and uses a designated matching service. Any of the following investors, among others, may be properly qualified: any institutional investor as defined in sec.109.3(c) of this title (relating to Sales to Financial Institutions and Certain Institutional Investors under The Securities Act, sec.5.H); any individual accredited investor as defined in sec.139.16 of this title (relating to Sales to Individual Accredited Investors); any sophisticated, well-informed investor as defined in sec.109.13(a) of this title (relating to Limited Offering Exemptions); or any person who is engaged in the same business, or in the practice of a profession or discipline directly related to that business, as is the issuer member whose identity and summary business plan is provided to that person. (4) Issuer member-An issuer who uses a matching service facility. (5) Summary business plan-A brief statement specifically describing the issuer, its management, its products or services, and the market for those products or services. Other information, including, specifically, financial projections, must not be included in a summary business plan. (c) Application. A person may apply to the Securities Commissioner to be a designated matching service by filing Form 133.35, Application for Designation as Matching Service Under sec.109.15. No designation will be made unless the applicant demonstrates that it: (1) owns, operates, sponsors, or conducts a matching service facility limited to providing investor members with the summary business plans and identities of issuer members; (2) will not be involved in any manner in the sale, offer for sale, solicitation of a sale or offer to buy, a security other than as set forth in paragraph (1) of this subsection; (3) believes, after making a reasonable factual inquiry, that any person who uses the matching service facility in the capacity of an investor is a properly qualified investor member; (4) is a governmental entity, quasi-governmental entity, an institution of higher education or a domestic nonprofit corporation that is affiliated with a governmental or quasi-governmental entity or an institution of higher education; (5) does not employ any person required to be registered under the Act as a dealer, investment adviser, salesman, or agent; (6) is not affiliated, and does not employ any person who is affiliated, with any investor member or issuer member other than to provide such member access to the matching service facility; (7) charges fees only in an amount necessary to cover its reasonable operating costs and that are unrelated to the amount of money being raised by any issuer member or the amount of securities sold by any issuer member; (8) limits any advertisement of its matching service facility as required by the Securities Commissioner; (9) agrees to comply with such record keeping and inspection requirements as the Securities Commissioner may impose; and (10) meets such other conditions as the Securities Commissioner considers appropriate for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of The Securities Act and the rules and regulations thereunder. (d) Designation consistent with Act. Designation under this section is not available to any matching service formed in a manner that constitutes part of a scheme to violate or evade the provisions of The Securities Act or the rules and regulations thereunder. (e) Withdrawal of designation. The Securities Commissioner, upon 10 days notice and hearing before the Securities Commissioner or a hearings officer as now or hereafter required by law, may withdraw the designation of a matching service as a designated matching service if the person does not meet the standards for designation provided in this section. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on January 2, 1995. TRD-9500011 John R. Morgan Deputy Securities Commissioner State Securities Board Earliest possible date of adoption: February 10, 1995 For further information, please call: (512) 305-8300 Chapter 115. Dealers and Salesmen 7 TAC sec.115.8 The State Securities Board proposes new sec.115.8, concerning inequitable practices in the sale of securities. Activities and practices, of the types enumerated in the proposed rule, may constitute bases for denials, suspensions or revocations of the registrations of dealers, salesmen, agents, and investment advisers and their agents. Michael S. Gunst, Director, Dealer Registration Division has determined that for the first five-year period the rule is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the rule. Mr. Gunst also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be that regulated persons will be further apprised of the types of activities or practices which constitute inequitable practices in the sale of securities, and which may result in the assessment of sanctions under the Securities Act, sec.14.A(2). There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the rule as proposed. Comments on the proposal may be submitted to Rada Lynn Potts, State Securities Board, P.O. Box 13167, Austin, Texas 78711-3167. The new rule is proposed under Texas Civil Statutes, Article 581, sec.28-1. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of the Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. The new rule affects Texas Civil Statutes, Article 581-14. sec.115.8. Inequitable Practices in the Sale of Securities. (a) Each dealer, salesman or agent as defined in The Securities Act, sec.4.D, investment adviser, or agent of an investment adviser shall observe high standards of commercial honor and just and equitable principles of trade in the conduct of his business; such persons are fiduciaries and have a duty to act primarily for the benefit of their clients. The acts and practices described in paragraphs (1) and (2) of this subsection are considered contrary to such standards and may constitute grounds for denial, suspension or revocation of registration, or other administrative action authorized by The Securities Act. (1) A dealer, salesman, or agent violates The Securities Act, sec.14.A(2) , by engaging in any of the following activities: (A) engaging in a pattern of unreasonable and unjustifiable delay or failure to execute orders, liquidate customers' accounts, make delivery of securities purchased, make payment upon request of free credit balances reflecting completed transactions of any of its customers, or transfer a customer's account, securities positions and balances to another dealer; (B) inducing trading in a customer's account which is excessive in size or frequency in view of the customer's financial resources, investment objectives, and the character of the account; (C) recommending to a customer the purchase, sale, or exchange of any security without reasonable grounds to believe that such recommendation is suitable based on reasonable inquiry concerning the customer's investment objectives, financial situation and needs, and any other information known by the dealer, salesman or agent; (D) executing a transaction on behalf of a customer without authority to do so; (E) exercising any discretionary power in effecting a transaction for a customer's account without first obtaining written discretionary authority from the customer unless the discretionary power relates solely to the time and/or price for the execution of orders, or executing a transaction for the account of a customer upon instructions from a third party without first having obtained written third party authorization from the customer; (F) executing any transaction in a margin account without securing from the customer a properly executed written margin agreement, including, but not limited to, written authorization for the existence of the account, within ten days after the initial transaction in the account; (G) if a dealer, failing to segregate customers' free securities or securities in safekeeping; (H) if a dealer, hypothecating a customer's securities without having a lien on those securities unless the customer's written consent is first obtained, except as permitted by the rules of the Securities and Exchange Commission; (I) entering into a transaction for the purchase or sale of a security with or for a customer at a price not reasonably related to the current market price of the security; (J) failing to furnish to a customer purchasing securities in an offering registered pursuant to The Securities Act, s7, no later than the date of confirmation of the transaction, or in the case of an unsolicited order, the date the confirmation is delivered, either a final prospectus, or a preliminary prospectus and additional documents, which together include all the information set forth in the final prospectus; (K) charging a customer, or receiving from a customer, an unreasonable commission, service charge, or fee in any transaction executed as agent for the customer, or failing to disclose to a customer any contingent fees associated with the sale of a security; (L) effecting any transaction in, or inducing the purchase or sale of, any security by means of any manipulative, deceptive or fraudulent device, practice, plan, program, design, or contrivance; (M) guaranteeing a customer against trading losses or sharing in the profits or losses in a customer's account or engaging in any profit or commission splitting scheme designed to circumvent the registration requirements of The Securities Act; (N) if a dealer, failing to make a bona fide public offering of all the securities allotted to a dealer for distribution, whether acquired as an underwriter, a selling group member, or from a member participating in the distribution as an underwriter or selling group member, or trading such securities in the aftermarket at a profit; (O) failing or refusing to timely furnish to a customer, upon reasonable request, information to which the customer is entitled, or failing to timely respond to a formal written request or complaint; (P) extending, arranging for, or participating in arranging for credit to a customer in violation of the Securities Exchange Act of 1934 or the regulations of the Federal Reserve Board; (Q) if a dealer, entering into a transaction for its own account with a customer with an unreasonable mark-up or mark-down; (R) if a dealer, entering into a transaction for its own account with a customer in which a commission is charged; (S) giving materially false or otherwise misleading customer information to any financial institution or regulatory agency; (T) if an agent or salesman, lending money or securities to, or borrowing money or securities from, a customer (unless that customer is a financial institution designated in The Securities Act, sec.5.H, engaged in the business of loaning funds), or acting as a custodian for money or securities; (U) if an agent or salesman, effecting securities transactions not recorded on the regular books or records of the dealer which the agent or salesman represents, unless the transactions are authorized in writing by the dealer prior to execution of the transaction; or (V) if an agent or salesman, establishing or maintaining an account containing fictitious information in order to execute transactions which would otherwise be prohibited. (2) An investment adviser or agent of an investment adviser violates The Securities Act, sec.14.A(2), by engaging in any of the following activities: (A) recommending to a client to whom investment supervisory, management, or consulting services are provided, the purchase, sale or exchange of any security without reasonable grounds to believe that the recommendation is suitable based on reasonable inquiry concerning the client's investment objectives, financial situation and needs, and any other information known by the investment adviser; (B) exercising any discretionary power in placing an order for the purchase or sale of securities for a client without first obtaining written discretionary authority from the client, unless the discretionary power relates solely to the price at which, or the time when, an order involving a definite amount of a specified security shall be executed, or both; (C) inducing trading in a client's account that is excessive in size or frequency in view of the client's financial resources, investment objectives, and character of the account; (D) placing an order to purchase or sell a security for the account of a client without authority to do so; (E) placing an order to purchase or sell a security for the account of a client upon instructions from a third party without first having obtained written third party authorization from the client; (F) borrowing money or securities from a client unless the client is a dealer, an affiliate of the investment adviser, or a financial institution designated in The Securities Act, sec.5.H, engaged in the business of loaning funds; (G) loaning money to a client unless the investment adviser is a financial institution designated in The Securities Act, sec.5.H, engaged in the business of loaning funds or the client is an affiliate of the investment adviser; (H) providing a report or recommendation to any advisory client prepared by someone other than the adviser without disclosing that fact, unless the adviser uses published research reports or statistical analyses to render advice or orders such a report in the normal course of providing service; (I) charging a client, or receiving from a client, an unreasonable advisory fee; (J) failing to disclose to clients in writing before any advice is rendered any material conflict of interest relating to the adviser or any of its employees which could reasonably be expected to impair the rendering of unbiased and objective advice including: (i) compensation arrangements connected with advisory services to clients which are in addition to compensation from clients for such services; and (ii) charging a client an advisory fee for rendering advice when a commission for executing securities transactions pursuant to such advice will be received by the adviser or its employees; (K) guaranteeing a client that a specific result will be achieved (gain or no loss) in connection with advice that is rendered; (L) publishing, circulating, or distributing any advertisement which does not comply with Rule 206(4)-1 (17 Code of Federal Regulations (C.F.R.) sec.275.206(4)-1), promulgated by the SEC under the Investment Advisers Act of 1940, as amended ("1940 Act"), as made effective in Release Number IA-121; (M) disclosing the identity, affairs, or investments of any client unless required by law to do so, or unless consented to by the client; (N) taking any action, directly or indirectly, with respect to those securities or funds in which any client has any beneficial interest, where the investment adviser has custody or possession of such securities or funds when the adviser's action is subject to and does not comply with the requirements of Rule 206(4)-2 (17 C.F.R. sec.275.206(4)-2), promulgated by the SEC under the 1940 Act, as made effective in Release Number IA-123, and as amended in Release Number IA-1181; or (O) entering into, extending, or renewing any investment advisory contract unless such contract is in writing and discloses, in substance, the services to be provided, the term of the contract, the advisory fee, the formula for computing the fee, the amount of prepaid fee to be returned in the event of contract termination or non-performance, whether the contract grants discretionary power to the adviser and that no assignment of such contract shall be made by the investment adviser without the consent of the other party to the contract. (b) The conduct set forth in subsection (a)(1) and (2) of this section is not inclusive. Engaging in other conduct which does not uphold the high standards and principles of the industry, such as misstatement of material facts, or manipulative or deceptive practices, shall also be grounds for denial, suspension or revocation of registration, or other administrative action authorized by The Securities Act. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on January 2, 1995. TRD-9500010 John R. Morgan Deputy Securities Commissioner State Securities Board Earliest possible date of adoption: February 10, 1995 For further information, please call: (512) 305-8300 TITLE 31. NATURAL RESOURCES AND CONSERVATION Part II. Texas Parks and Wildlife Department Chapter 69. Resource Protection Regulation of Minerals Recovery and Associated Activities on Department Lands 31 TAC sec.sec.69.80-69.87 The Texas Parks and Wildlife Commission proposes new sec. s69.80-69.87, concerning the regulation of mineral recovery and associated activities on Department lands. The purpose of these regulations is to ensure that mineral recovery and associated activities on Department lands are compatible with the recreation, research, conservation, and wildlife purposes for which Department lands are acquired and managed. It is the intent of the Commission to protect the surface estate of these lands, to protect the health and property of visitors on these lands, and to ensure the perpetuation of fish and wildlife resources and their habitats. The regulations shall serve in guiding the management of Department lands to address the interests of both the mineral interest holder and the Department. This is a uniform, statewide set of regulations designed to inform the mineral interest holder of the standards expected when recovering minerals from Department lands. Specifically, the regulations are intended to encourage location of oil and gas mineral recovery activities on Department lands in the least sensitive areas feasible. It is not the intent of the Commission to deter or obstruct mineral interest holders from reasonable access to the mineral resources which are the subject of that interest. John C. Foshee, land management counsel, has determined that for this first five year period the regulations will be in effect there will be minimal fiscal implications for state government as a result of administering the regulations. The additional estimated costs to state and local governments as a result of enforcing or administering the regulations are none. The estimated reduction in costs to state and local governments as a result of enforcing or administering the regulations are none. The estimated loss or increase in revenue to the state or local governments as a result of enforcing or administering the regulations, if any, cannot be determined at this time. The actual amount will be dependent on the number of operators and the resource impacts associated with those operations. Mr. Foshee also has determined that the public benefit anticipated as a result of implementing this section will be increased protection and compensation for habitat losses of natural resources on Department lands resulting from regulation of mineral recovery operations and the associated activities. Public benefit is anticipated as these natural resources are held in public trust by the Department. The actual fiscal benefit will be dependent upon the number of requests from mineral interest holders and the type of activity the holder wishes to pursue. The probable economic costs to persons required to comply with the rule will be dependent upon the number of requests from mineral holders and the type of activity the holder wishes to pursue. As required by the Administrative Procedure Act, sec.2001.002, the Department has not filed a local employment impact statement with the Texas Employment Commission because the agency has determined that the regulations as proposed will not impact local economies. Comments on the proposed regulations may be submitted to Kathy Boydston, Resource Protection Division, Texas Parks and Wildlife Department, 4200 Smith School Road, Austin, Texas, 78744, 1-800-792-1112, extension 4638 or (512) 389- 4638. The new sections are proposed under the authority of Parks and Wildlife Code, sec.sec.11.071 et seq, which set out the authority of the Commission to regulate the use of Department lands for oil, gas and other mineral recovery and associated activities. Sections 11.071-11.074 of the Parks and Wildlife Code are affected by the proposed new regulations. sec.69.80. Mineral Recovery Operations-Policy and Scope. (a) It is the policy of the Commission that management of oil, gas, and other mineral recovery and associated activities on Department lands be compatible with the recreation, research, conservation, and wildlife purposes for which Department lands are acquired and managed. It is the intent of the Commission to protect the surface estate of these lands, to protect the health and property of visitors on these lands, and to ensure the perpetuation of fish and wildlife resources and their habitats which are dependent on appropriate land management practices. (b) It is the policy of the Commission that the ecological diversity and integrity of all Department lands be maintained. These lands represent the full spectrum of ecological regions and vegetational communities found in Texas and, to the extent possible, the integrity and unique character of Department lands shall be protected. Management through the Surface Use Agreement and the land manager shall be site-specific and shall reflect resource based decision-making that balances the interests of the mineral owners and the Department. (c) Exploration and development of oil, gas, and other minerals associated with Department lands may be authorized provided that impacts on the surface estate or resources associated with these lands is in accord with the area management plan. (d) This policy shall serve in guiding the management of Department lands to address the interests of both the mineral interest holder and the Department. It is not the intent of the Commission to deter or obstruct mineral interest holders from reasonable access to the mineral resources which are the subject of that interest. (e) Exploration and development of hard rock minerals dedicated to the Permanent School Fund shall be governed by the regulations at 31 Texas Administrative Code, Chapter 10. (f) Exploration and development of oil and gas minerals dedicated to the Permanent School Fund shall be governed under 31 Texas Administrative Code, Chapter 9, and shall be conducted under a plan of operations approved jointly by the Department and the General Land Office. (g) Memoranda of understanding or agreement governing exploration and development of oil and gas minerals associated with specific Department lands shall control such activities to the extent that the express provisions of those instruments conflict with these regulations. (h) Express provision for oil and gas mineral recovery activities in existing leases, easements, mineral deeds, or other documents to which the Department is a party should be raised with the Department's General Counsel and will be handled on a case-by-case basis. (i) These regulations apply to mineral recovery activities for which the surface use agreement is signed after the effective date of these regulations. sec.69.81. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless otherwise indicated. Activity site-The total area on Department lands affected by oil, gas, or other mineral recovery and associated activities, including, but not limited to, areas affected by seismic lines, pad sites, production facilities, gathering lines, access roads and associated support operations. Authorized by the land manager-Express authorization in the SUA or in an amendment to that agreement. Commission-Texas Parks and Wildlife Commission. Department-Parks and Wildlife Department. Department lands -State parks, historic sites, natural areas, recreation areas, wildlife management areas and wildlife research and demonstration areas. Facility-Any man-made structure on Department lands including, but not limited to, buildings, fences, gates, bridges, culverts, levees, gathering lines, and roads. Gathering lines -Pipelines on Department lands connected to oil or gas wells on Department lands. Geophysical activities -Survey or investigation conducted to discover, evaluate or locate oil and gas prospects. Land manager-The on-site or designated Department employee with primary responsibility for the operation, maintenance, or management of the Department lands on which mineral recovery activities are proposed to occur. Mineral recovery activities-All oil, gas, and other mineral recovery and associated activities. Operator-The grantee under a surface use agreement for geophysical or drilling and production activities on Department lands. Resource Categories -Classification of Department lands according to resource value as determined by the Wildlife Habitat Appraisal Procedure (WHAP), the Guide for Plant Appraisal (8th Edition, International Society of Arboriculture), or similar successor techniques used generally for habitat appraisal. Lands are classified into three categories as follows: (A) Resource Category I: Areas which may be irreplaceable, unique or scarce or which are of high value to fish and wildlife resources and which shall include, but are not limited to, the following: (i) Bottomland or upland forests containing trees with trunks measuring 12 inches or greater diameter at breast height; (ii) Forested riparian corridors within the 100 year floodplain; (iii) Mature brush, woodlands or forest, with closed or nearly closed canopy; (iv) Native grasslands exhibiting readily observable late successional community compositions; (v) Wetlands including, but not limited to, coastal marshes, inland marshes, bogs, seeps, springs, water impoundments and or playa lakes; (vi) Any site that exhibits habitat components that attract or support wildlife to a greater extent than surrounding areas, as shown by visual observation or empirical data, including, but not limited to, denning, roosting, breeding, nesting, nursery, loafing or refuge sites; (vii) Potential habitat for state or federal listed threatened or endangered plant or animal species. (B) Resource Category II: Areas which are medium to low value habitat for fish and wildlife resources and which shall include, but are not limited to, the following: (i) Mixed early to mid-successional grasslands; (ii) Young brush; (iii) Perennial grasses; and (iv) Agricultural crops. (C) Resource Category III: Areas which are unrestored disturbed sites having minimal value for fish and wildlife resources and which shall include, but are not limited to, pad sites, staging areas, landfills, and similar areas. ROW-Right-of-way. Shot-Any action resulting in the generation of an energy pulse from which geophysical data are obtained. SUA-A surface use agreement; a written agreement for use of the surface between the operator and the Department for mineral recovery activities. sec.69.82. Surface Use Management Plan. (a) The Department shall develop a surface use management plan as a component of a site-specific area management plan for each unit of Department land. The surface use management plan shall include: (1) Provision for the management of mineral recovery activities associated with the land; (2) A description of land and mineral ownership, recreation, wildlife, and conservation needs; and (3) A description of present and anticipated effects of mineral recovery activities on fish and wildlife and their habitats, recreation, and all other site-specific natural and cultural resources. (b) The plan shall be in place by January 1, 2000. sec.69.83. Application Process and Approval Criteria. (a) Prior to commencement of any mineral recovery activities on Department lands, a letter of intent shall be filed with the Executive Director. The letter of intent shall include: (1) Name of applicant; (2) Identification of the proposed site; (3) Description of proposed mineral recovery activities; (4) Proposed commencement date; and (5) Name of mineral owner, if other than the Department. (b) The Department shall review the letter of intent and forward an application packet within 30 days to those applicants whose requests are within the scope of this title. (c) The land manager, in conjunction with other Department staff and staff from other agencies, shall work with the operator to complete the application and draft the SUA. (1) The SUA shall, at a minimum, cover the following: (A) known cultural resources and protective provisions as required; (B) indemnification of the Department; (C) the amount and scope of the performance bond; (D) entry notification requirements; (E) compliance with all state and federal laws and regulations governing activities on Department lands, including the prohibition against firearms and illegal activities; (F) use of pesticides, herbicides, and other toxicants; (G) fire suppression planning and list of required on-site equipment; (H) location and time schedule for placement of utility and electrical lines; (I) actions to avoid, minimize, or compensate for disturbance to fish and wildlife resources and their habitats; (J) soil removal activities or borrow sites; (K) soil erosion; (L) vehicular activity; (M) road maintenance and designated uses for each proposed access road; (N) a restoration plan; and (O) abandonment procedures. (2) A draft SUA shall be issued within 90 days after the application is deemed administratively complete. The SUA shall incorporate activity-specific provisions developed in conjunction with the operator as specified in sec.69.85 and sec.69.86 of this title (relating to Geophysical Operations and Drilling and Production). (3) The SUA shall reflect the understanding of the parties with respect to the mineral recovery activity that is the subject of the agreement. Amendment to or variance from the provisions of the SUA shall be made by written mutual agreement. (d) The Executive Director may approve the issuance of a surface use agreement to an applicant who has complied with all requirements of the Department and upon a finding that: (1) Proposed mineral recovery activities are compatible with the approved area management plan for the proposed site; (2) Environmental assessment requirements as set out in these regulations are complete and the project is determined to be in accordance with Commission policy set forth in sec.69.80 of this title and in the Department's Environmental Policy; (3) Applicant has demonstrated that impacts resulting from mineral recovery activities shall be avoided, minimized or compensated; (4) Alternatives to proposed actions, including off-site drilling and pooling, have been considered and are not reasonable and prudent. sec.69.84. Mineral Recovery Operations. General Provisions. (a) An SUA consistent with the surface use management plan and in accordance with the Department's regulations shall be required for mineral recovery activities on Department lands. Mineral leases for minerals owned by the Department shall continue to be issued by the Board for Lease under the Natural Resources Code, Chapter 34. Easements shall continue to be issued under 31 Texas Administrative Code sec.sec.51.91 et seq. (b) Where the Department owns the minerals or an interest therein, all royalties, rentals, and other lease payments shall be no less than fair market value. (c) Applicant shall submit a letter or copy of the lease from the mineral owner, if other than TPWD, authorizing the proposed mineral recovery activities. (d) Applicant must obtain archeological clearance from the Department of Antiquities Protection, prior to commencement of mineral recovery activities, including but not limited to, rights-of-way for road construction and proposed activity sites. (1) Archeological clearance must be site-specific and shall not be construed to authorize any other or additional use within the designated rights-of-way or activity sites. (2) Two complete copies of all documentation, survey information, reports, USGS 7.5 topographical maps and other information relating to archeological clearance shall be provided to the land manager prior to commencement of mineral recovery activities. (e) If an undocumented archeological or cultural site is discovered during mineral recovery or associated operations, all activity shall cease and the site shall be reported to the land manager and the Department of Antiquities Protection. This report shall be the sole responsibility of the operator. (f) The operator shall save, hold harmless, defend and indemnify the State of Texas, its agents and employees for losses, damages or judgments and expenses on account of bodily injury, death or property damage, or claims for bodily injury, death, or property damage of any nature whatsoever, and by whomsoever made, arising out of the activities of the operator, the operator's agents, employees, or subcontractors associated with the exploration and or recovery of any and all oil, gas or minerals made the subject of a surface use agreement with the Department. (g) Violation of applicable laws or any provision of this title or failure to adhere to provisions of the SUA by the operator or the operator's agents, employees, or subcontractors shall render the SUA subject to cancellation, and is subject to penalties as provided in Parks and Wildlife Code, Chapter 11, sec.11.072. The Department shall notify the operator of the violation and the operator shall have ten days in which to come into compliance. (h) The operator shall post one performance bond per activity site or a one million dollar universal bond for all pad sites before beginning mineral recovery. The bond shall be effective until the requirements of the SUA are fulfilled. Other types of security such as certificates of deposit may be considered by the Department. The bond amount shall be determined according to Resource Category as follows: (1) Resource Category I: $500,000; (2) Resource Category II: $300,000; (3) Resource Category III: $100,000. (i) It shall be the sole responsibility of the operator to insure compliance with all applicable state and federal regulatory authorities, statutes and regulations. The Department may require additional public safety measures including, but not limited to, site security signs, gates and a posted 24-hour emergency response number. (j) Prior to commencement of mineral recovery activities, the operator shall notify the land manager 48 hours in advance of intent to enter Department lands. Entry may be reasonably postponed during peak recreation periods, special events or public hunts conducted on Department lands. Entry for emergency purposes such as fire, explosion, or injury shall not require prior notice. The land manager shall be notified as soon as possible after the emergency event. (k) All determinations made by the land manager shall be based upon potential impacts to natural or cultural resources as well as potential harm to public safety, health and welfare. (l) No firearms are permitted on Department lands by any agent or employee of the operator or contractors thereof at any time. (m) No pesticide, herbicide or other toxicant shall be used without authorization by the land manager. Applicant shall use such chemicals only as authorized by the land manager. Downhole chemicals are governed by the Railroad Commission regulations. (n) The operator shall have a fire suppression plan incorporating the best available technology and providing for ready access to equipment at all times. The operator shall bear full responsibility for extinguishing any fire that may occur as a result of mineral recovery activities and for restoration to preexisting conditions of resources or facilities damaged as a result of such a fire. (o) Electrical lines shall be routed within existing road ROW or other easement corridors unless otherwise authorized by the land manager. Temporary overhead utility or electrical lines will be permitted only as authorized by the land manager. No permanent overhead utilities shall be allowed. Permanently buried lines shall be placed in the road easement or in the road centerline using plowshare techniques. (p) The Department retains the right to make special provisions to protect sensitive resources or to minimize potentially adverse impacts including, but not limited to, enhanced erosion control or containment, biological or cultural monitoring, periodic or postactivity aerial photography or monitoring, specialized equipment or techniques, horizontal drilling and provisions to address aesthetic and noise concerns. The Department further retains the right to require reasonable alternatives to disturbance in critical areas. (q) All reasonable precautions, including consultation with the land manager, shall be taken to avoid disturbance of fish or wildlife during mineral recovery operations. Particular caution shall be taken to avoid and protect sensitive habitats, such as wetlands. Activities affecting wetlands may require coordination with other state and federal agencies. (r) Geophysical, drilling, and gathering line construction and routine maintenance activities may be prohibited during nesting, breeding, and migration activities to minimize interference with specific species identified by the land manager to require alternative scheduling. (s) Soil removal or borrow sites shall be authorized by the land manager and such sites are subject to all provisions of this section. (t) The operator shall prevent soil erosion in the activity area and within the rights-of-way and shall take site- specific soil conservation measures including, but not limited to, restoration, mulching and revegetation. (u) The land manager shall schedule a prework conference to explain specific habitat concerns and needs to survey work crews and all other employees and agents of the operator that may be on Department lands during the proposed activity. This conference shall cover prohibited activities and potential consequences. Attendance shall be mandatory and an additional prework conference may be scheduled if needed. (v) Use of existing surface or subsurface water resources and placement of water wells shall be coordinated with the land manager as set out in the SUA. Water wells must be drilled according to specifications approved by the Department and in compliance with Texas Natural Resource Conservation Commission regulations. Any freshwater wells developed shall be cased and left intact. (w) Vehicular activity. (1) Vehicular activity shall be confined within the boundaries of the geophysical lane, road ROW, pad site, gathering line corridor or access routes authorized by the land manager. (2) The land manager may inspect vehicles to assess their suitability for terrain conditions, may require alternative types of conveyance, and may restrict traffic to certain areas to minimize impacts. (3) If road construction is necessary, operator shall incorporate design criteria to restrict road width to the minimum area required for transport of equipment and personnel to the site. Road width shall be authorized by the land manager. (4) Entrance to and travel within Department lands shall be over established routes or as authorized by the land manager. Additional service roads shall not be constructed unless authorized by the land manager. All roads shall be regularly maintained by the operator to support designated Department uses. Operator shall restore all roads to preexisting conditions before securities are released. (5) Gates shall be closed after use, unless otherwise authorized by the land manager. (6) Existing drainage patterns associated with the road shall be maintained and shall be uninterrupted by the use of conduit, culverts, bridges, or other applicable techniques as specified and authorized by the land manager. The use of flashboard risers may be required as mitigation to create or enhance wetland habitat. Water turnouts on roads may be required as deemed necessary by the land manager. (x) Restoration of the activity site(s) to preconstruction condition shall be the responsibility of the operator. The restoration plan shall include a full assessment of immediate and long-term restoration costs, including labor, and a timetable setting forth a schedule for all restoration activities. At the operator's option, restoration can be performed either by the operator or the Department. Where the Department assumes responsibility for restoration of an activity site, a timetable for payment to the Department for all costs associated with restoration activities shall be set forth in the SUA. (1) Restoration measures within that plan may include, but are not limited to, reestablishment of former surface contours, restoration of soil structure, restoration of preconstruction drainage patterns, elevation restoration, removal of excess fill materials from Department lands, discing or plowing of compacted soils, fertilization, revegetation with site appropriate native species, construction of nesting platforms, denning sites, or other wildlife habitat improvements to replace natural features lost or altered by mineral recovery activities. (2) The standard or level of revegetation to be reached shall be set forth in the restoration plan. The use of exotic plant species is prohibited. (3) Where restoration to preconstruction condition is not feasible, the plan may include measures to compensate for unavoidable habitat loss. (4) Following completion of restoration procedures, the land manager shall verify that restoration of any environmental damage has been satisfactorily completed and may, at that time, require additional restoration measures to satisfy the conditions of the SUA. (y) Abandonment procedures shall follow those set forth in 16 Texas Administrative Code sec.3.14 for well plugging. sec.69.85. Geophysical Operations. (a) Prior to initiating a geophysical survey, the operator shall meet with the land manager and discuss all relevant habitat concerns or needs and the land manager must authorize the location of all energy source lines, receiver lines, shot holes, shot lines, equipment storage areas, all project specifications and project completion dates. (b) Following preliminary geophysical lane alignment, the land manager may require a field survey to determine the resource significance of Department lands proposed for disturbance. Applicant shall pay for the field survey and shall relocate the geophysical activity to protect Department resources where practicable. The scope of the survey shall be agreed upon by the land manager and applicant. (c) Cutting, clearing, or other vegetation disturbances shall be confined within the boundaries of the staked geophysical lane, to include only line-of- sight clearing unless otherwise authorized by the land manager. The width of any clearing shall be authorized by the land manager, who may require the applicant to off-set around Department facilities and vegetation or other habitat structures. (d) All work shall be conducted during hours and on days as designated by the land manager. Wet weather, tidal conditions and soil conditions may prohibit access to Department lands and in the event of adverse weather conditions, the land manager may temporarily halt all geophysical operations. Should work be delayed for this reason, the land manager may extend the period of the SUA as needed. (e) Shot holes: (1) No shots in excess of ten pounds dynamite or dynamite equivalent shall be used in submerged areas unless authorized by the land manager. (2) No shots in excess of 20 pounds dynamite or dynamite equivalent shall be used in upland areas. (3) Shots shall be discharged only in daylight hours. (4) Shot holes shall be filled and plugged in accordance with Texas Railroad Commission regulations within 15 days after completion of survey. (f) Nothing in this section is meant to derogate the Department's jurisdiction over water of the state as provided in Parks and Wildlife Code, Chapter 66, sec.66.003. (g) Geophysical operations may be restricted, depending on the energy source employed, to avoid impacts to sensitive resources including, but not limited to, utilities, facilities, cultural resources, biologically sensitive areas, and wells. Standards adopted by the International Association of Geophysical Contractors entitled "Safe Operating Distance Chart Commonly Used and Accepted by the Geophysical Industry" shall provide guidance to the Department in determining these restrictions. (h) Geophysical activities shall be conducted so as to maintain original soil horizons and soil disturbances shall be confined within the geophysical corridor. Topsoil which must be removed to prepare a geophysical corridor shall be separated from other material, stockpiled, stored, and replaced uniformly in its former location following completion of geophysical activities. (i) Waterflow pathways, improvements, structures, markers or other physical features of Department lands shall not be disturbed. Operations shall be conducted so as to minimize sedimentation and erosion in adjacent areas. Geophysical lanes shall have erosion control measures as needed. (j) Any existing levees, water channels, roads, or other physical features damaged shall be restored to preconstruction site conditions upon the completion of the geophysical survey. The land manager may require a contour elevation survey at levee crossings to verify conditions before and after crossing. All restoration costs shall be borne by the operator. (k) Site restoration measures are set forth in the SUA. All restoration activities performed to comply with the SUA shall be reviewed and authorized by the land manager. (l) Equipment, materials, debris and trash shall be managed only as authorized by the land manager. Such items shall be removed from Department lands immediately upon project completion. The operator is responsible for removal of all flagging, stakes and other waste materials upon completion of the survey. Debris may not be burned or disposed of on Department lands. sec.69.86. Drilling and Production. (a) Prior to commencement of mineral recovery activities, the land manager shall meet with the operator and discuss all relevant habitat concerns or needs and shall review and authorize: (1) all plans, specifications, and maps indicating drilling pad site, location of production facilities, access route, equipment and equipment storage, road easement location and dimensions, road alignment, and road width; (2) provisions for maintaining existing drainage integrity; and (3) project commencement date and drilling schedules. (b) The land manager may require a field survey to determine the resource significance of Department lands proposed for disturbance. Applicant shall pay for the field survey. The scope of the survey shall be agreed upon by the land manager and applicant. (c) A closed drilling fluid system shall be used for all operations unless authorized by the land manager. (1) All drilling fluids, cuttings, completion fluids and any other products of drilling or completion operations shall be contained in steel tanks or lined pits. (2) All ditches around the rig for the purpose of catching fluids involved in rig operations shall be lined. These lined ditches will drain into a lined catch basin. (3) All waste materials will be removed to an off- site disposal facility approved by the Texas Railroad Commission and the operator shall notify the land manager of the facility to be used. (d) Electric drilling rigs may be required to protect noise-sensitive fish and wildlife resources or Department facilities. (e) Pad size shall be restricted to the minimum area required to conduct drilling operations, store equipment and supplies, and contain waste materials. Pad site shall not exceed two acres unless otherwise authorized by the land manager. Vegetation damage, equipment and supply storage, and removal of fill materials from outside pad and road boundaries are prohibited unless authorized by the land manager. (f) Any flare pit location shall be authorized by the land manager prior to construction. (g) Pad fence and facilities shall be constructed and painted to blend with surrounding vegetation. (h) If a well will produce hydrogen sulfide gas, the operator shall implement all appropriate and necessary safety measures for producing this type of well. The safety measures shall comply with the Railroad Commission of Texas Statewide Rule 36. (i) Following the completion of the well-site construction, the operator shall provide an accurate map indicating locations and types of all land surface alterations that occurred during the construction. (j) Operator shall grade and level an earthen levee only where absolutely necessary. Bridges and culverts shall be installed, maintained, and replaced. (k) Dredge and spoil activities. (1) The land manager shall be notified in advance of dredging and spoiling operations for placement or maintenance of production equipment. All spoil shall be deposited and contained within a spoil retention levee. The spoil shall be spread and leveled to the satisfaction of the land manager. (2) In shallow bays and open waters, spoil shall be deposited so as not to reduce water depths by more than the depth specified by the land manager. In areas where this is not practicable, spoil shall be deposited on alternate sides of access channels at specified intervals with specified widths left between the spoil deposits, unless levee construction is preferable to meet Department land's long-term needs. (3) No open waterways shall be blocked by spoil deposition resulting from maintenance dredging, unless such closings will enhance area conditions and are authorized by the land manager. (l) Waste materials and debris. (1) During operations the operator shall hold all equipment, materials, debris and trash in a manner and location authorized by the land manager; such items shall be removed from Department lands within 15 days of project completion. Debris may not be burned or disposed of on Department lands. (2) All toxic refuse including, but not limited to oil, grease, gasoline, paint, and other petrochemical derivatives, shall be centrally stored for no longer than is necessary and shall be disposed of off-site according to applicable law. Solid and sanitary waste shall be containerized and a licensed disposal company employed to remove the containers. Operator shall notify the land manager of the disposal facilities to be used. Disposal of any refuse on Department lands is prohibited. (3) Used or waste solid materials resulting from production processes or treatment equipment, such as oil contaminated sand, brine sediments, chemical precipitates or other filterable solids, may not be used as fill material on Department lands. (4) In the event of adverse weather conditions, the land manager may temporarily halt all waste disposal operations. Should work be delayed for this reason, the land manager may extend the period of the SUA as needed. (m) Inactive rigs must be removed within 30 days after drilling operations are completed. Skidding of drilling rigs is strictly prohibited except within the pad area. (n) The operator shall conduct all cleanup operations in shallow semi-aquatic areas or on firm marsh substrates by boat or by hand unless otherwise authorized by the land manager. The use of marsh buggies, draglines and other similar heavy equipment in such areas must be authorized by the land manager. (o) Oil Spill Contingency Plan. The operator shall develop an oil spill contingency plan in compliance with all state and federal regulations. In a spill event, the land manager shall work with the state or federal on-scene coordinator through the Department's designated representative for the command system established for clean-up and response activities, as established in the state oil spill contingency plan. As the land owner, the Department reserves the right to require more stringent clean-up measures than might be normally sought by the lead response agency, when appropriate to protect Department lands, facilities and/or the natural resources the facility was established to protect or preserve. (1) Operator shall file an accidental spill contingency plan with the land manager as part of the application. (A) The plan shall include proposed procedures to report, contain, and clean- up all types of oil and brine spills as well as proposed reclamation measures for site restoration. (B) No dispersants, emulsifiers, bacterial agents, or other chemical agents shall be used without explicit permission from the land manager or designated Department employee. The type of dispersants, emulsifiers, bacterial agents, or other chemical agents used as well as the rate, time and method of application shall be authorized by the land manager before drilling can commence. (C) All spills or accidental discharges of oil, brine, or petrochemical substances shall be reported to the land manager immediately upon discovery. (D) Containment and cleanup of an accidental spill shall be initiated immediately following its discovery by operator, its agents and employees. Operator shall excavate and remove contaminated soils and replace such soils with soils of the same type and horizon unless otherwise authorized by the land manager. (2) Following the cleanup phase of an oil or brine spill, the operator shall restore the affected area to its original condition unless otherwise authorized by the land manager. Restoration measures shall include, but are not restricted to reestablishment of former surface contours, restoration of soil horizons, fertilization, revegetation with site appropriate native species, restoration of former drainage patterns, and replacement of topsoil. (3) In the event of an accidental spill or discharge of oil or any other petrochemical substance, the operator shall take such measures as may be necessary to disperse and prevent waterfowl, wading birds and shorebirds from using or frequenting oil-contaminated wetland areas. Operator shall consult with the land manager as soon as possible regarding waterfowl protection. (4) Operator shall take all reasonable precautions necessary during the spill containment and cleanup phases to minimize disturbances to wetlands and to existing drainage patterns. All necessary precautions shall be taken to avoid damaging the root systems of oil-contaminated wetland flora. If such vegetation is mechanically removed, only the aerial portions shall be taken. (p) Gathering Lines. Pipelines connected to facilities on Department land are subject to the following conditions. (1) Existing drainage patterns within the gathering line right-of-way (ROW) shall be uninterrupted and shall be maintained by the use of conduits, culverts, bridges or other applicable techniques unless otherwise authorized by the land manager. (2) Access to the gathering line alignment shall be predetermined and located whenever possible in nonvegetated areas. Storage of pipe and other materials shall be in nonvegetated areas if available, and these areas shall be authorized by the land manager. Gathering line ROW shall be no greater than is necessary to construct and maintain the gathering line and shall have erosion control measures. The gathering line ROW may be left unvegetated for gathering line access and maintenance only as authorized by the land manager. (3) Gathering lines that must be buried through marsh shall be placed using the best technology currently available which would minimize adverse impacts, to include boring, dragline and jetting. No waterways bisected by the gathering line shall be left blocked when construction is completed. (4) Gathering lines that cross canals shall be placed using the bore or jet technique. Livestock crosswalks shall be provided as necessary to permit the movement of livestock across the gathering line area. (5) Earthen marsh plugs shall be constructed at intervals along the gathering line and at the points of intersection of the gathering line and major watercourses such as lakes, ponds, bayous, canals, ditches and tidal creeks. Dimensions and placement of plugs shall be determined by the land manager in conjunction with the operator and plugs shall be maintained by the operator. (6) Spoil levees created as a result of canal dredging shall have gaps cut in them to maintain the natural hydrology, with the dimensions of the intervals between gaps specified by the land manager. If spoil from the canal is placed on both sides of the canal, the gaps to be cut in the levees shall be located to best maintain the natural hydrology. Spoil from the dredging of a canal shall be placed within the construction right-of-way only as authorized by the land manager. Waterways bisected by a gathering line shall be cleared of project debris and spoil material when construction is complete. (7) Spoil materials from flotation canals shall be placed at a designated distance from the banks of navigable waterways crossed, and shall not be disposed of where the materials may enter ponds, lakes, canals or other watercourses. (8) Operator shall notify the land manager prior to any major improvement or removal of any facility. Upon completion of the gathering line, the operator shall furnish the land manager with an accurate survey of the gathering line as built, including a typical cross section. (9) Operator shall conduct all operations so as to prevent the escape of gases, liquids or other deleterious substances from established gathering line or other facilities onto or into area lands or waters. Gathering line shall be hazard marked so that the distance between sequential markers is not more than 150 feet. Operator is authorized to patrol and inspect the line and shall notify the land manager prior to entry. (10) During gathering line construction and subsequent operational phases, all ingress, egress, and inner area movement of the company's vehicles and equipment as well as the placement of all construction materials, operational equipment, and spoil, shall be limited to the designated areas unless otherwise authorized by the land manager. (11) Operator is responsible for correcting any problems resulting from the gathering line or its construction. In addition, the Operator shall take immediate remedial action in emergency situations. (12) Gathering line ditches shall be completely backfilled with all available spoil removed during excavation operations. Final surface contours shall approach original site conditions as closely as possible. In the event additional fill material is required to compensate for settlement, it shall be removed from scattered deep holes within the designated area rather than from continual surface cuts. Settling of excavated sites must be restored by operator and maintained for a period of three years. (13) Natural drainages shall be swept clean of bottom ruts resulting from equipment crossing during construction. (14) The land manager may use the right-of-way for the planting of wildlife food and cover crops, provided the same shall not endanger the gathering line or accelerate erosion. (15) Site restoration measures are set forth in the SUA. All restoration activities performed to comply with the SUA shall be reviewed and authorized by the land manager. sec.69.87. Penalties. Penalties for violation of this title are prescribed by the Texas Parks and Wildlife Code, Chapter 11, sec.11.072. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on January 3, 1995. TRD-9500025 Paul M. Shinkawa Acting General Counsel Texas Parks and Wildlife Department Proposed date of adoption: March 23, 1995 For further information, please call: (512) 389-4642 TITLE 34. PUBLIC FINANCE Part I. Comptroller of Public Accounts Chapter 3. Tax Administration Subchapter L. Motor Fuels Tax 34 TAC sec.3.173 The Comptroller of Public Accounts proposes an amendment to sec.3.173, concerning refunds on gasoline and diesel fuel tax. The 73rd Legislature, 1993, amended the Tax Code, sec.153, to add a new permit classification called a jobber. A jobber may not deal in tax-free motor fuels and may not accept signed statements on sales of diesel fuels. Commercial transportation companies providing transportation services to public school districts may purchase motor fuels tax free. The maximum single delivery of tax-free diesel fuel made by a supplier accepting a signed statement was changed. Mike Reissig, chief revenue estimator, has determined that for the first five- year period the rule will be in effect there will be no significant revenue impact on the state or local government. Mr. Reissig also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be in providing new information regarding tax responsibilities. This rule is adopted under the Tax Code, Title 2, and does not require a statement of fiscal implications for small businesses. There is no significant anticipated economic cost to persons who are required to comply with the proposed rule. Comments on the proposal may be submitted to Joe A. Galvan, Jr., Manager, Tax Administration Division, P.O. Box 13528, Austin, Texas 78711. The amendment is proposed under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements the Tax Code, sec.153.119 and s153.222. sec.3.173. Refunds on Gasoline and Diesel Fuel Tax. (a) Refunds. A person may file a claim for refund of the taxes paid on gasoline or diesel fuel used off the highway, for certain resale, for export from Texas, [and] for loss caused by fire or other accident, and to provide transportation services to public school districts
    . (b) (No change.) (c) Filing forms and documentation. Each type of claim for refund must be filed on a form furnished by the comptroller and documentation must be maintained to fully substantiate the claim, including identification of each vehicle or type of equipment in which the fuel was used. Categories of refund claims are: (1) (No change.) (2) Sales by dealers and jobbers
      to the federal government. For the purposes of this section, the federal government means any department, board, bureau, agency, corporation, or commission created or wholly owned by the United States government. Evidence that sales were made to the federal government must be maintained and must consist of: (A)-(B) (No change. ) (C) a copy of a contract between the dealer or jobber
        and the federal government supported by sales invoices or purchase vouchers under the provisions of the contract. (3) loss by fire or other accident. A loss for which tax refund is claimed must be caused either by fire or other accident, and the claimant must maintain a complete record documenting the incident which occurred, and establishing that the exact quantity of the fuel claimed as lost was actually lost as a result of that incident. (A) If the accidental loss was incurred through a leak in a line or storage tank, the required proof includes: (i) a statement by the person who actually dug up or otherwise examined the hole or leak. Such statement should set out the extent of the leak, the date of the
          [his] examination, and the person's
            [his] name and title. (ii) (No change.) (B) Dealers and jobbers
              are required to take inventory on the first of each month so an accident should be discovered no later than at the inventory of the succeeding month's business, and corrected promptly thereafter. If inventories have not been accurately or timely measured, and if complete records have not been kept of all withdrawals for sale or use as required by law, a
                refund claim cannot be honored for payment. (4)-(10) (No change.) (11) Sales to signed statement purchasers. (A) (No change.) (B) The claim shall not include a single delivery of more than 3, 000
                  [2,000] gallons, or total deliveries during one month of more than 10, 000 gallons plus the number of gallons in the last sale that exceeded the 10, 000 gallon limit. (12) Sales of gasoline or diesel fuel to a public school district in this state for its exclusive use, or to a commercial transportation company that provides public school transportation services to a public school district in this state and used by the company exclusively to provide those services
                    . The seller of gasoline or diesel fuel on which the tax has been paid may file for refund of the tax on sales to public school districts for the district's exclusive use and on sales to commercial transportation companies providing public school transportation services to a public school district exclusively
                      . Sellers filing for refund must maintain copies of invoices issued on each such
                        tax-free sale [to a public school district]. The invoice(s) must have the name and address of the seller stamped or preprinted on the invoice and include: (A)-(F) (No change.) (13) (No change.) (14) Commercial transportation companies claim for refund on tax-paid purchases. A commercial transportation company may file a claim for refund of state taxes paid on gasoline and diesel fuel used to provide public school transportation services exclusively for a public school district. Records maintained by the company must include original invoices showing that the state tax was assessed. (15)
                          [(14)] Definition. "Exclusive use" by a school district means fuel [purchased by a school district and] used only in motor vehicles or other equipment: (A) owned and operated by the district; or (B) dedicated for the exclusive and sole purpose of providing transportation services for the school district by means of a contract between the school district and the owner of the motor vehicles. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas, on January 3, 1995. TRD-9500035 Martin Cherry Chief, General Law Comptroller of Public Accounts Earliest possible date of adoption: February 10, 1995 For further information, please call: (512) 463-4028