ADOPTED 
 RULES 
 
 An agency may take final action on a section 30 days after a proposal has been 
published in the  Texas Register. The section becomes effective 20 days after 
the agency files the correct document with the  Texas Register, unless a later 
date is specified or unless a federal statute or regulation requires 
implementation of the action on shorter notice. 
 If an agency adopts the section without any changes to the proposed text, only 
the preamble of the notice and statement of legal authority will be published. 
If an agency adopts the section with changes to the proposed text, the proposal 
will be republished with the changes. 
 
   
  TITLE 16. ECONOMIC REGULATION 
 Part I. Railroad Commission of Texas 
  Chapter 15. Alternative Fuels Research and Education Division 
  
  Alternative Fuel Highway Signage Rebate Program 
 
  16 TAC sec.sec.15.301, 15.305, 15.310, 15.315, 15.320, 15.325, 15. 330, 
15.335, 15.340, 15.345, 15.350 
 
  The Railroad Commission of Texas adopts new sec.sec.15.301, 15.305, 15.310, 
15.315, 15.320, 15.325, 15.330, 15.335, 15.340, 15.345, and 15.350, relating to 
the establishment and administration of a highway signage rebate program for 
propane (liquefied petroleum gas; LPG) and natural gas motor fuel outlets open 
to the general motoring public, without changes to the proposed text as 
published in the November 14, 1995, issue of the Texas Register (20 TexReg 
9358). Participation in the highway signage rebate program will be voluntary. No 
person has a legal entitlement or other right to an alternative fuel highway 
sign rebate under this program. 
 New sec.15.301 states the purpose of the program, and  sec.15.305 defines terms 
used in the rule. New sec.15.310 establishes the alternative fuel highway 
signage rebate program for a period of two years unless the commission changes 
the termination date. Eligibility requirements, application procedures and 
conditions for installation of the alternative fuel highway signs are described 
in new sec.sec.15.315, 15.320, and 15.325; rebate amounts are established in 
sec.15.330. New sec.15.335 authorizes the commission to prescribe verification, 
disallowance and refund procedures and requirements. Conditions under which a 
public propane or natural gas motor fuel outlet may be declared ineligible to 
participate in the alternative fuel highway signage rebate program are set out 
in new sec.15.340. Procedures for the receipt and handling of complaints and 
penalties for violation of program rules are set out in new sec.15.345 and 
sec.15.350. 
 The commission views the alternative fuel highway signage rebate program as a 
means of better informing the motoring public about the availability of 
alternative fuels as these fuels are defined in the federal Energy Policy Act of 
1992, Public Law Number 102-486, 106 Stat. 2776, and to further the mission of 
the commission's Alternative Fuels Research and Education Division to educate 
the public about and develop marketing programs for environmentally beneficial 
alternative fuels that can contribute to the improvement of air quality in this 
state. 
 The commission has set the initial rebate rate at 50% of the cost of eligible 
alternative motor fuel billboard advertising up to a maximum of $1, 000 per 
eligible installation. This rate and this maximum are subject to change or 
cancellation by the commission without notice at any time. A total of $31,000 is 
available for this purpose from a grant to the Commission from the United States 
Department of Energy. If required to ensure timely processing of applications, 
approved rebates may be paid from Alternative Fuels Research and Education 
Account 101 within General Revenue-Dedicated and the account shall be repaid in 
full from available grant funds immediately upon receipt of reimbursements from 
the grantor. Implementation of this pilot program is contingent upon the 
availability of grant funds. 
 The commission received no comments on the proposed rules. 
 The new sections are adopted under Texas Natural Resources Code, sec.113.241, 
which authorizes the commission to adopt rules relating to educating the public 
regarding the use of LPG and other environmentally beneficial alternative fuels 
that are or have the potential to be effective in improving the quality of air 
in this state; Texas Natural Resources Code, sec.113.243(c) (2), which 
authorizes the commission to implement marketing and advertising programs 
relating to alternative fuels to make alternative fuels more understandable and 
readily available to consumers; and Texas Natural Resources Code, 
sec.113.243(c)(6), which authorizes the commission to use money in the 
Alternative Fuels Research and Education Fund 101 and its successor Alternative 
Fuels Research and Education Account 101 in General Revenue-Dedicated to 
implement programs necessary to promote the use of LPG or other environmentally 
beneficial alternative fuels. Texas Natural Resources Code, sec.sec.113.248, 
113.249, and 113.250 prescribe civil and criminal penalties and establish an 
enforcement mechanism for violations of the Texas Natural Resources Code or 
commission rules. 
 
  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 authority. 
 Issued in Austin, Texas, on January 10, 1996. 
 TRD-9600348 
  Mary Ross McDonald 
 Acting General Counsel 
 Railroad Commission of Texas 
    Effective date: January 31, 1996 
 Proposal publication date: November 14, 1995 
 For further information, please call: (512) 463-7008 
         
             Part II. Public Utility Commission of Texas 
  Chapter 23. Substantive Rules 
  
  Rates 
 
  16 TAC sec.23.21 
 
  (Editor's Note: The following adopted rule was published in the January 2, 
1996, issue of the Texas Register (21 TexReg 63 and 75). The rule appeared twice 
due to being proposed in different issues. However, the adopted text to this 
rule contained an error under subsection (e). The rule is being re-published in 
this issue with the correct text. For preamble information, please see page 51 
of the January 2 issue. The effective date of this rule is January 11, 1996.) 
   
  
  sec.23.21. Cost of Service. 
 
  (a) Application. Unless the context clearly indicates otherwise, in this 
section the term "utility," insofar as it relates to telecommunications 
utilities, shall refer to dominant certificated telecommunications utilities 
(DCTUs). 
   
  (b) Components of cost of service and post test year adjustments. Except as 
provided for in the Public Utility Regulatory Act of 1995, subtitles H and I of 
Title III, or in any section of these rules dealing with fuel expenses, rates 
are to be based upon a utility's cost of rendering service to the public during 
a historical test year, adjusted for known and measurable changes. Post test 
year adjustments for known and measurable changes to historical test year data 
(including, but not limited to revenue, expenses, and invested capital) will be 
considered only where the attendant impacts on all aspects of a utility's 
operations can be with reasonable certainty identified, quantified, and matched. 
The two components of cost of service are allowable expenses and return on 
invested capital. 
   
  (c) Allowable expenses. Only those expenses which are reasonable and necessary 
to provide service to the public shall be included in allowable expenses. In 
computing a utility's allowable expenses, only the utility's historical test 
year expenses as adjusted for known and measurable changes will be considered, 
except as provided for in any section of these rules dealing with fuel expenses. 
 
  (1) Components of allowable expenses. Allowable expenses, to the extent they 
are reasonable and necessary, and subject to the rules in this section, may 
include, but are not limited to, the following general categories: 
 
  (A) Operations and maintenance expense incurred in furnishing normal utility 
service and in maintaining utility plant used by and useful to the utility in 
providing such service to the public. Payments to affiliated interests for costs 
of service, or any property, right or thing, or for interest expense shall not 
be allowed as an expense for cost of service except as provided in the Public 
Utility Regulatory Act of 1995, sec.2.208(b) and sec.3. 208(b). 
   
  (B) Depreciation expense based on original cost and computed on a straight 
line basis as approved by the commission. Other methods of non-accelerated 
depreciation may be used for electric generating units when it is determined 
that such depreciation methodology is a more equitable means of recovering the 
cost of the plant. 
   
  (C) Assessments and taxes other than income taxes. 
   
  (D) Federal income taxes on a normalized basis. Federal income taxes shall be 
computed according to the provisions of the Public Utility Regulatory Act of 
1995, sec.2.208(c) and sec.3.208(c). 
   
  (E) Advertising, contributions and donations. The actual expenditures for 
ordinary advertising, contributions, and donations may be allowed as a cost of 
service provided that the total sum of all such items allowed in the cost of 
service shall not exceed 3/10 of 1.0% (0.3%) of the gross receipts of the 
utility for services rendered to the public. The following expenses shall be 
included in the calculation of the 3/10 of 1.0% (0.3%) maximum: 
 
  (i) funds expended advertising methods of conserving energy; 
   
  (ii) funds expended advertising methods by which the consumer can effect a 
savings in total utility bills; 
   
  (iii) funds expended advertising load factor improvement at off peak times; 
   
  (iv) funds expended in support of or membership in professional or trade 
associations provided such associations contribute toward the professionalism of 
their membership. However, membership expenses related to legislative advocacy, 
directly or indirectly, shall not be considered allowable expenses. 
     
  (F) Nuclear decommissioning expense. The following restrictions shall apply to 
the inclusion of nuclear decommissioning costs that are placed in a utility's 
cost of service. 
 
  (i) An electric utility owning or leasing an interest in a nuclear-fueled 
generating unit shall include its cost of nuclear decommissioning in its cost of 
service. Funds collected from ratepayers for decommissioning shall be deposited 
monthly in irrevocable trusts external to the utility, in accordance with 
sec.23.59 of this title (relating to Nuclear Decommissioning Trusts). All funds 
held in short-term investments must bear interest. The level of the annual cost 
of decommissioning for ratemaking purposes will be determined in each rate case 
based on an allowance for contingencies of 10% of the cost of decommissioning, 
the most current information reasonably available regarding the cost of 
decommissioning, the balance of funds in the decommissioning trust, anticipated 
escalation rates, the anticipated return on the funds in the decommissioning 
trust, and other relevant factors. The annual amount for the cost of 
decommissioning determined pursuant to the preceding sentence shall be expressly 
included in the cost of service established by the commission's order. 
   
  (ii) In the event that an electric utility implements an interim rate 
increase, including an increase filed under bond, an incremental change in 
decommissioning funding shall be included in the increase. 
   
  (iii) A utility's decommissioning fund and trust balances will be reviewed in 
general rate cases. In the event that a utility does not have a rate case within 
a five-year period, the commission, on its own motion or on the motion of the 
commission's General Counsel, the Office of Public Utility Counsel, or any 
affected person, may initiate a proceeding to review the utility's 
decommissioning cost study and plan, and the balance of the trust. 
   
  (iv) An electric utility shall perform, or cause to be performed, a study of 
the decommissioning costs of each nuclear generating unit that it owns or in 
which it leases an interest. A study or a redetermination of the previous study 
shall be performed at least every five years. The study or redetermination 
should consider the most current information reasonably available on the cost of 
decommissioning. A copy of the study or redetermination shall be filed with the 
commission and copies provided to the commission's Regulatory Division and the 
Office of Public Utility Counsel. A utility's most recent decommissioning study 
or redeterminations shall be filed with the commission within 30 days of the 
effective date of this subsection. The five year requirement for a new study or 
redetermination shall begin from the date of the last study or redetermination. 
     
  (G) Accruals credited to reserve accounts for self insurance under a plan 
requested by a utility and approved by the commission. The commission shall 
consider approval of a self insurance plan in a rate case in which expenses or 
rate base treatment are requested for a such a plan. For the purposes of this 
rule, a self insurance plan is a plan providing for accruals to be credited to 
reserve accounts. The reserve accounts are to be charged with property and 
liability losses which occur, and which could not have been reasonably 
anticipated and included in operating and maintenance expenses, and are not paid 
or reimbursed by commercial insurance. The commission will approve a self 
insurance plan to the extent it finds it to be in the public interest. In order 
to establish that the plan is in the public interest, the utility must present a 
cost benefit analysis performed by a qualified independent insurance consultant 
that demonstrates that, with consideration of all costs, self insurance is a 
lower cost alternative than commercial insurance and that the ratepayers will 
receive the benefits of the self insurance plan. The cost benefit analysis shall 
present a detailed analysis of the appropriate limits of self insurance, an 
analysis of the appropriate annual accruals to build a reserve account for self 
insurance, and the level at which further accruals should be decreased or 
terminated. 
   
  (H) Postretirement benefits other than pensions (OPEB). For ratemaking 
purposes, expense associated with postretirement benefits other than pensions 
(OPEB) shall be treated as follows: 
 
  (i) OPEB expense shall be included in a utility's cost of service for 
ratemaking purposes based on actual payments made. 
   
  (ii) A utility may request a one-time conversion to inclusion of current OPEB 
expense in cost of service for ratemaking purposes on an accrual basis in 
accordance with generally accepted accounting principles (GAAP). Rate 
recognition of OPEB expense on an accrual basis shall be made only in the 
context of a full rate case. 
   
  (iii) A utility shall not be allowed to recover current OPEB expense on an 
accrual basis until GAAP requires that utility to report OPEB expense on an 
accrual basis. 
   
  (iv) For ratemaking purposes, the transition obligation shall be amortized 
over 20 years. 
   
  (v) OPEB amounts included in rates shall be placed in an irrevocable external 
trust fund dedicated to the payment of OPEB expenses. The trust shall be 
established no later than six months after the order establishing the OPEB 
expense amount included in rates. The utility shall make deposits to the fund no 
less frequently than annually. Deposits on the fund shall include, in addition 
to the amount included in rates, an amount equal to fund earnings that would 
have accrued if deposits had been made monthly. The funding requirement can be 
met with deposits made in advance of the recognition of the expense for 
ratemaking purposes. The utility shall, to the extent permitted by the Internal 
Revenue Code, establish a postretirement benefit plan that allows for current 
federal income tax deductions for contributions and allows earnings on the trust 
funds to accumulate tax free. 
       
  (2) Expenses not allowed. The following expenses shall never be allowed as a 
component of cost of service: 
 
  (A) legislative advocacy expenses, whether made directly or indirectly, 
including but not limited to legislative advocacy expenses included in 
professional or trade association dues; 
   
  (B) funds expended in support of political candidates; 
   
  (C) funds expended in support of any political movement; 
   
  (D) funds expended in promotion of political or religious causes; 
   
  (E) funds expended in support of or membership in social, recreational, 
fraternal, or religious clubs or organizations; 
   
  (F) funds promoting increased consumption of electricity or water; 
   
  (G) additional funds expended to mail any parcel or letter containing any of 
the items mentioned in subparagraphs (A)-(F) of this paragraph; 
   
  (H) payments, except those made under an insurance or risk-sharing arrangement 
executed before the date of the loss, made to cover costs of an accident, 
equipment failure, or negligence at a utility facility owned by a person or 
governmental body not selling power within the State of Texas; 
   
  (I) costs, including, but not limited to, interest expense, of processing a 
refund or credit of sums collected in excess of the rate finally ordered by the 
commission in a case where the utility has put bonded rates into effect, or when 
the utility has otherwise been ordered to make refunds; 
   
  (J) any expenditure found by the commission to be unreasonable, unnecessary, 
or not in the public interest, including but not limited to executive salaries, 
advertising expenses, legal expenses, penalties and interest on overdue taxes, 
criminal penalties or fines, and civil penalties or fines. 
       
  (d) Return on invested capital. The return on invested capital is the rate of 
return times invested capital. 
 
  (1) Rate of return. The commission shall allow each utility a reasonable 
opportunity to earn a reasonable rate of return, which is expressed as a 
percentage of invested capital, and shall fix the rate of return in accordance 
with the following principles. 
 
  (A) The return should be reasonably sufficient to assure confidence in the 
financial soundness of the utility and should be adequate, under efficient and 
economical management, to maintain and support its credit and enable it to raise 
the money necessary for the proper discharge of its public duties. A rate of 
return may be reasonable at one time and become too high or too low because of 
changes affecting opportunities for investment, the money market, and business 
conditions generally. 
   
  (B) The commission shall consider efforts by the utility to comply with the 
statewide energy plan, the efforts and achievements of the utility in the 
conservation of resources, the quality of the utility's services, the efficiency 
of the utility's operations, and the quality of the utility's management, along 
with other applicable conditions and practices. 
   
  (C) The commission may, in addition, consider inflation, deflation, the growth 
rate of the service area, and the need for the utility to attract new capital. 
The rate of return must be high enough to attract necessary capital but need not 
go beyond that. In each case, the commission shall consider the utility's cost 
of capital, which is the composite of the cost of the various classes of capital 
used by the utility. 
 
  (i) Debt capital. The cost of debt capital is the actual cost of debt. 
   
  (ii) Equity capital. The cost of equity capital shall be based upon a fair 
return on its value. For companies with ownership expressed in terms of shares 
of stock, equity capital commonly consists of the following classes of stock. 
 
  (I) Common stock capital. The cost of common stock capital shall be based upon 
a fair return on its value. 
   
  (II) Preferred stock capital. The cost of preferred stock capital is its 
annual dividend requirement, if any, plus an adjustment for premiums, discounts, 
and cost of issuance. 
         
  (2) Invested capital; rate base. The rate of return is applied to the rate 
base. The rate base, sometimes referred to as invested capital, includes as a 
major component the original cost of plant, property, and equipment, less 
accumulated depreciation, used and useful in rendering service to the public. 
Components to be included in determining the overall rate base are as follows: 
 
  (A) Original cost, less accumulated depreciation, of utility plant used by and 
useful to the utility in providing service. 
 
  (i) Original cost shall be the actual money cost, or the actual money value of 
any consideration paid other than money, of the property at the time it shall 
have been dedicated to public use, whether by the utility which is the present 
owner or by a predecessor. 
   
  (ii) Reserve for depreciation is the accumulation of recognized allocations of 
original cost, representing recovery of initial investment, over the estimated 
useful life of the asset. Depreciation shall be computed on a straight line 
basis or by such other method approved under subsection (b)(1) (B) of this 
section over the expected useful life of the item or facility. 
   
  (iii) Payments to affiliated interests shall not be allowed as a capital cost 
except as provided in the Public Utility Regulatory Act of 1995, sec.2.208(b) 
and sec.3.208(b). 
     
  (B) Working capital allowance to be composed of, but not limited to the 
following: 
 
  (i) Reasonable inventories of materials, supplies, and fuel held specifically 
for purposes of permitting efficient operation of the utility in providing 
normal utility service. This amount excludes appliance inventories and 
inventories found by the commission to be unreasonable, excessive, or not in the 
public interest. 
   
  (ii) Reasonable prepayments for operating expenses. Prepayments to affiliated 
interests shall be subject to the standards set forth in the Public Utility 
Regulatory Act of 1995, sec.2.208(b) and  sec.3.208(b). 
   
  (iii) A reasonable allowance for cash working capital. The following shall 
apply in determining the amount to be included in invested capital for cash 
working capital: 
 
  (I) Cash working capital for electric utilities shall in no event be greater 
than one-eighth of total annual operations and maintenance expense, excluding 
amounts charged to operations and maintenance expense for materials, supplies, 
fuel, and prepayments. 
   
  (II) Cash working capital for all DCTUs shall in no event be greater than one-
twelfth of total annual operations and maintenance expense, excluding amounts 
charged to operations and maintenance expense for materials, supplies, and 
prepayments. 
   
  (III) For electric cooperatives, river authorities, and investor-owned 
utilities that purchase 100% of their power requirements, one-eighth of 
operations and maintenance expense excluding amounts charged to operations and 
maintenance expense for materials, supplies, fuel, and prepayments will be 
considered a reasonable allowance for cash working capital. For telephone 
cooperatives, one-twelfth of operations and maintenance expense excluding 
amounts charged to operations and maintenance expense for materials, supplies, 
and prepayments will be considered a reasonable allowance for cash working 
capital. 
   
  (IV) Operations and maintenance expense does not include depreciation, other 
taxes, or federal income taxes, for purposes of subclauses (I), (II), (III), and 
(VI) of this clause. 
   
  (V) For all investor-owned electric utilities and all telephone DCTUs with 
31,000 or more access lines, a reasonable allowance for cash working capital, 
including a request of zero, will be determined by the use of a lead-lag study. 
A lead-lag study will be performed in accordance with the following criteria: 
 
  (-a-) The lead-lag study will use the cash method; all non-cash items, 
including but not limited to depreciation, amortization, deferred taxes, prepaid 
items, and return (including interest on long-term debt and dividends on 
preferred stock), will not be considered. 
   
  (-b-) Any reasonable sampling method that is shown to be unbiased may be used 
in performing the lead-lag study. 
   
  (-c-) The check clear date, or the invoice due date, whichever is later, will 
be used in calculating the lead-lag days used in the study. In those cases where 
multiple due dates and payment terms are offered by vendors, the invoice due 
date is the date corresponding to the terms accepted by the utility. 
   
  (-d-) All funds received by the utility except electronic transfers shall be 
considered available for use no later than the business day following the 
receipt of the funds in any repository of the utility (e.g. lockbox, post office 
box, branch office). All funds received by electronic transfer will be 
considered available the day of receipt. 
   
  (-e-) For utilities the balance of cash and working funds included in the 
working cash allowance calculation shall consist of the average daily bank 
balance of all non-interest bearing demand deposits and working cash funds. 
   
  (-f-) The lead on federal income tax expense shall be calculated by 
measurement of the interval between the mid-point of the annual service period 
and the actual payment date of the utility. 
   
  (-g-) If the cash working capital calculation results in a negative amount, 
the negative amount shall be included in rate base. 
     
  (VI) If cash working capital is required to be determined by the use of a 
lead-lag study under the previous subclause and either the utility does not file 
a lead lag study or the utility's lead-lag study is determined to be so flawed 
as to be unreliable, in the absence of persuasive evidence that suggests a 
different amount of cash working capital, an amount of cash working capital 
equal to negative one-eighth of operations and maintenance expense including 
fuel and purchased power in the case of an electric utility, or negative one-
twelfth of operations and maintenance expense in the case of a telephone 
utility, will be presumed to be the reasonable level of cash working capital. 
   
  (VII) For all investor-owned telephone DCTUs with fewer than 31,000 access 
lines, cash working capital shall be calculated by any method that the 
commission determines to be reasonable, subject to subclause (IV) of this 
clause. 
       
  (C) Deduction of certain items which include, but are not limited to, the 
following: 
 
  (i) accumulated reserve for deferred federal income taxes; 
   
  (ii) unamortized investment tax credit to the extent allowed by the Internal 
Revenue Code; 
   
  (iii) contingency and/or property insurance reserves; 
   
  (iv) contributions in aid of construction; 
   
  (v) customer deposits and other sources of cost-free capital; 
     
  (D) Construction work in progress. The inclusion of construction work in 
progress is an exceptional form of rate relief. Under ordinary circumstances the 
rate base shall consist only of those items which are used and useful in 
providing service to the public. Under exceptional circumstances, the commission 
will include construction work in progress in rate base to the extent that the 
utility has proven that: 
 
  (i) the inclusion is necessary to the financial integrity of the utility; and 
   
  (ii) major projects under construction have been efficiently and prudently 
planned and managed. However, construction work in progress shall not be allowed 
for any portion of a major project which the utility has failed to prove was 
efficiently and prudently planned and managed. 
     
  (E) Nuclear plant in service. A nuclear generating unit shall not be eligible 
for inclusion in a utility's rate base as plant in service until such time as 
the utility has shown that the unit is in commercial operation. Such showing of 
commercial operation is separate and apart from, and bears no relationship to, 
issues such as prudent and efficient planning and management, excess capacity, 
or whether the unit meets the test of used and useful, and shall not be 
construed as satisfying the utility's burden of proof as to such other issues in 
the same or subsequent proceedings. A utility seeking to show that such a unit 
is in commercial operation must: 
 
  (i) prove that the preoperational testing program, consisting of those tests 
conducted following completion of construction and construction-related 
inspections and tests, but prior to fuel loading, to demonstrate, to the extent 
practical, the capability of structures, systems and components to meet 
performance requirements to satisfy design criteria, has been completed with all 
test deficiencies corrected. The requirement to correct all test deficiencies 
may be waived on a showing that such deficiencies do not impact on safety or 
system operation; 
   
  (ii) prove that the startup test program, consisting of those test activities 
scheduled to be performed during and after fuel loading that confirm the design 
bases and demonstrate, to the extent practical, that the plant will operate in 
accordance with design, has been completed; 
   
  (iii) prove that the unit has furnished power to the grid for an uninterrupted 
period of 100 hours, or the run duration period required by the full warranted 
output performance test of the nuclear steam supply system, whichever is 
greater, at a power level between 95% and 100% of the unit's nominal net 
electrical output as used for the purpose of plant design; 
   
  (iv) prove by use of computer simulation studies or other evidence that the 
plant and associated transmission facilities can supply to the utility's Texas 
customers their full share of the unit's rated power with the single most 
critical transmission line out of service; 
   
  (v) prove that the unit is supplying electricity to the utility's transmission 
grid with output scheduled by the load dispatcher subject to plant availability; 
and 
   
  (vi) file with the commission a fully documented explanation of the cause of 
each unscheduled and unanticipated delay of 100 hours or more and each Nuclear 
Regulatory Commission notice of violation received in the pre-operational or 
startup test programs, as defined in clauses (i) and (ii) of this subparagraph, 
together with fully documented descriptions of the measures taken by the utility 
to correct and prevent reoccurrence of the incident which caused delay and the 
measures taken in response to the notice of violation. 
     
  (F) Self insurance reserve accounts. If a self insurance plan is approved by 
the commission, any shortages to the reserve account will be an increase to the 
rate base and any surpluses will be a decrease to the rate base. The utility 
shall maintain appropriate books and records to permit the commission to 
properly review all charges to the reserve account and determine whether the 
charges being booked to the reserve account are reasonable and correct. 
       
  (e) Adjustment for House Bill 11, Acts of 72nd Legislature, First Called 
Special Session 1991. 
 
  (1) In this subsection the term "utility" insofar as it relates to 
telecommunications utilities, shall refer to incumbent local exchange companies. 
Each utility that is subject to the commission's rate setting jurisdiction, pays 
state franchise taxes, and has not had a rate proceeding under the Act, sec. 
sec.2.211, 2.212, 3.210 or 3.211, in which the effects of House Bill 11 were 
considered in the setting of rates shall be subject to this subsection. Except 
as provided in the following sentence, on or before December 1 of each year, 
each utility subject to this subsection shall file with the commission a tariff 
sheet, or tariff sheets, applicable to each rate class setting forth an interim 
House Bill 11 tax adjustment factor. If a utility chooses not to request an 
increase under this subsection or if the utility has otherwise limited itself by 
agreement to recovering tax changes that are the subject of this subsection by a 
method different from that prescribed in this subsection, the utility need not 
file tariff sheets but shall make an informational filing showing its 
calculations including an explanation and all underlying supporting 
documentation showing the effect of House Bill 11 on its taxes. If the 
adjustment is a decrease that amounts to less than $1.00 per customer for 
electric utilities or access line for telephone utilities on an annual basis, 
the tariff shall not include a factor, but shall state that the reduction will 
be applied against the adjustment for future years. In all other tariffs, the 
factors set forth in the tariff sheets shall be calculated as set forth in the 
following paragraphs. Utilities that are required to file tariff sheets shall 
include an explanation of how the interim factor was calculated as well as 
showing all the calculations. 
   
  (2) If the adjustment is a decrease requiring a factor or the utility 
affirmatively requests that an adjustment be made to its billings to account for 
the effect of House Bill 11 on its state taxes, the tariff filing will be 
docketed and will automatically go into effect on January 1 of the year 
following the filing. If the adjustment is a decrease being carried forward to 
future years, the filing will be treated as a tariff filing except that it shall 
take effect on January 1 of the year following the filing. A utility may amend a 
tariff filed under this subsection to make mid-course corrections as necessary. 
For all amended filings, all tariffs will take effect on the date specified by 
the utility, but in no event earlier than ten days after the filing. 
   
  (3) The interim House Bill 11 tax adjustment factor shall be calculated by 
allocating the effect on the utility's state taxes for the next calendar year of 
House Bill 11 as provided in paragraph (6) of this subsection. The effect on the 
utility's state taxes for the coming calendar year shall be calculated by 
subtracting the estimated state taxes that would be attributable to the calendar 
year if the law prior to House Bill 11 was still in effect from the estimated 
state taxes that will be due or are attributable to the calendar year under 
House Bill 11. In calculating the state taxes that would be due during the 
calendar year if the law prior to House Bill 11 was still in effect, four-
twelfths of the franchise tax paid or that would have been paid in the previous 
year and eight-twelfths of the franchise tax that would have been paid in the 
calendar year in question will be considered attributable to the calendar year 
in question. In performing the calculation, the various fees imposed by House 
Bill 11 will not be considered taxes. In calculating the taxes that are 
estimated to be paid, changes resulting from audits or amended returns for 
previous periods that were covered by this rule shall be considered. The state 
franchise tax imposed by House Bill 11 will be considered to be a franchise tax 
and not an income tax regardless of the method of calculation. 
   
  (4) If an interim factor goes into effect, it shall be subject to surcharge or 
refund to the extent it differs from the factor finally set by the commission. 
If a surcharge or refund is necessary, a credit or surcharge will be made to the 
existing customers' bills. If the refund or surcharge amount is less than either 
$10,000 in total or $1.00 per customer, calculated by dividing the total refund 
or surcharge by the total number of customers, the utility may make the refund 
or surcharge by carrying it forward until a year when the cumulative total 
refund or surcharge is not less than either $10, 000 or $1.00 per customer. 
Simple interest will be added to the amount due at the rate set by the 
commission for overbillings and underbillings starting at the beginning of the 
month in which the obligation accrued and ending on the last day of the month 
preceding the refund or surcharge. The month, or months, in which the obligation 
accrues will be determined by comparing the collections each month under the 
tariff filed by the utility with the amount that should have been collected had 
the utility been able to precisely predict its tax bill and its sales. The 
number of days in each month shall be considered for purposes of the interest 
calculation. Interest will be added to decreases that are carried to future 
years and will be calculated by the same method. 
   
  (5) The utility shall file, on or before the first business day after March 1 
of the year following the year that a particular factor was in effect, testimony 
supporting the final adjustment factor that it is requesting to account for the 
effect of House Bill 11 on its state taxes for that year. The utility's filing 
will include a copy of the Franchise Tax Return filed with the Comptroller's 
Office and the details of their computation of the tax that would have been due 
had House Bill 11 not been enacted. The hearing on the merits for purposes of 
setting the final factor, if necessary, shall be convened no earlier than 45 
days after the filing of the utility's testimony and shall be strictly limited 
to issues under this subsection. For purposes of administrative efficiency, the 
presiding officer assigned to a case may grant a utility's request that the 
final hearing on a particular year's factor be delayed for up to three years; 
however, if such a request is granted, any interest to be paid by the utility 
shall be at the utility's cost of capital as determined in the utility's last 
rate case. Requests to delay the final hearing on a particular year's factor 
shall be filed with the testimony supporting the final adjustment factor. 
   
  (6) The billing adjustment should apply over the entire year; however, if the 
adjustment necessary to account for the effect of House Bill 11 is so small that 
it would be difficult to apply on a monthly basis, the utility may make the 
billing adjustment during a single month. Cost allocation and rate design are as 
follows. 
 
  (A) Electric utilities. For electric utilities, if the adjustment factor 
results in a lower cost to the ratepayers, the revenue decrease shall be 
allocated to the customers on the same basis as the franchise taxes were 
allocated in the utility's last rate case. If the adjustment factor results in a 
greater cost to the ratepayers, the revenue increase will be allocated to the 
customers in the same manner as were federal income taxes in the utility's last 
rate case. The factor for each customer within a class will then be calculated 
based on expected kilowatt-hour (kwh) sales and charged on a per kwh basis, 
except that the factor for each customer within an industrial class served at 
transmission-level voltage will be calculated as a percentage of the base 
revenues (excluding fuel, any applicable PCRF charges, and add-on revenue taxes) 
received from that class during the most recent 12-month period. 
   
  (B) Telephone utilities. Any increase or decrease will be allocated to each 
customer class and service based on the revenues from that class or service. For 
purposes of determining revenues, the period to be used will be the same as that 
for the federal tax return used to compute the state taxes. The adjustment 
factor will be billed as a percentage of the customer's bill except that coin 
telephone local calling shall not be billed any adjustment. Such percentage 
shall be determined by computing the ratio of a class's or service's allocated 
franchise tax to its historic revenues. The adjustment on the customer bill will 
be rounded to the nearest cent. 
     
  (7) The utility shall separately list the adjustment on each customer's bill 
and label the adjustment "cost of service surcharge" if the adjustment is an 
increase or "cost of service credit" if the adjustment is a decrease. 
     
  (f) Policies for SLECS. This subsection applies to Small Local Exchange 
Carriers (SLECs) as defined in sec.23.94 of this title (relating to Small Local 
Exchange Carrier Flexibility): 
 
  (1) Notwithstanding subsections (a), (b), and (c) of this section, a SLEC's 
future construction plans and operational changes may be considered in 
evaluating the overall reasonableness of the SLEC's current rates. 
   
  (2) The commission may not initiate an inquiry under sec.3.210 of the Act into 
the overall reasonableness of the current rates of a SLEC more frequently than 
every three years from the date of a commission order setting reasonable rates 
under sec.3.210 or sec.3.211 of the Act. 
 
  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 authority. 
 Issued in Austin, Texas, on January 10, 1996. 
 TRD-9600299 
  Paula Mueller 
 Secretary of the Commission 
 Public Utility Commission of Texas 
    Effective date: January 11, 1996 
 Proposal publication date: October 10, 1995 
 For further information, please call: (512) 458-0100 
         
                     
  TITLE 25. HEALTH SERVICES 
 Part II. Texas Department of Mental Health and Mental Retardation 
  Chapter 401. System Administration 
  
  Subchapter A. Advisory Committees 
 
  25 TAC sec.sec.401.8, 401.10, 401.12, 401.14, 401.16-401.18, 401. 21, 401.23-
401.26 
 
  The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts 
the repeal of sec.sec.401.8, 401.10, 401.12, 401.14, 401.16-401.18, 401.21, and 
401.23-401.26 of Chapter 401, Subchapter A, concerning advisory committees, 
without changes to the proposed text as published in the October 20, 1995, issue 
of the Texas Register (20 TexReg 8560) and the October 31, 1995, issue of the 
Texas Register (20 TexReg 8964). 
 The repeal eliminates reference to all advisory committees that are not 
recognized by the Appropriations Act, Article II, Rider 27. Elimination of 
reference to certain advisory committees does not necessarily mean that the 
committees no longer exist, but rather that the committees are not funded under 
legislation authorizing advisory committees. 
 No public comment was received on the proposed repeals. 
 The repeals are adopted under the Texas Health and Safety Code, Title 7, 
sec.532.015, which provides the Texas Board of Mental Health and Mental 
Retardation with rulemaking powers. 
 
  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 January 12, 1996. 
 TRD-9600430 
  Ann Utley 
 Chairman, Texas MHMR Board 
 Texas Department of Mental Health and Mental Retardation 
    Effective date: February 2, 1996 
 Proposal publication date: October 20 and October 31, 1995 
 For further information, please call: (512) 206-4516 
         
           Chapter 407. Internal Facilities Management 
  
  Inscription on State Vehicles 
 
  25 TAC sec.407.171 
 
  The Texas Department of Mental Health and Mental Retardation (TXMHMR) adopts 
new sec.407.171, concerning inscription on state vehicles, without changes to 
the proposed text as published in the November 21, 1995, issue of the Texas 
Register (20 TexReg 9670). 
 The new section fulfills the mandates of the Texas Transportation Code, Chapter 
721, which require the department to adopt rules specifying use of department 
vehicles that are exempt from the requirements of the statute. 
 No public comment on the proposal was received. 
 The new section is adopted under the Texas Health and Safety Code, Title 7, 
sec.532.015, which provides the Texas Board of Mental Health and Mental 
Retardation with rulemaking authority. 
 
  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 January 12, 1996. 
 TRD-9600432 
  Ann Utley 
 Chairman, Texas MHMR Board 
 Texas Department of Mental Health and Mental Retardation 
    Effective date: February 2, 1996 
 Proposal publication date: November 21, 1995 
 For further information, please call: (512) 206-4516 
         
               
  TITLE 28. INSURANCE 
 Part I. Texas Department of Insurance 
  Chapter 11. Health Maintenance Organizations 
  
  Subchapter R. Approved Nonprofit Health Corporations 
 
  28 TAC sec.11.1701 
 
  The Texas Department of Insurance adopts new sec.11.1701, concerning 
establishment of an advisory committee (Advisory Committee) to recommend to the 
commissioner rules necessary to implement Insurance Code, Article 21.52F, with 
changes to the proposed text as published in the November 17, 1995, issue of the  
Texas Register (20 TexReg 9533). 
 The new section is necessary to comply with the rule requirements of Texas 
Civil Statutes, Article 6252-33, which govern state agency advisory committees. 
Article 6252-33 requires a state agency that is advised by an advisory committee 
to adopt rules stating the purpose of the committee, the tasks of the committee, 
the manner in which the committee will report to the agency, and a date on which 
the committee will automatically be abolished. Article 6252-33, sec.1, defines 
"advisory committee" to mean a committee, council, commission, task force, or 
other entity in the executive branch of state government that is not a state 
agency, is created by or under state law, and has as its primary function the 
advising of a state agency. The Advisory Committee is a committee appointed by 
the commissioner pursuant to House Bill 3111, sec.2 passed by the 74th 
Legislature, Regular Session, to make recommendations necessary to implement 
Insurance Code, Article 21.52F. 
 "Approved nonprofit health corporation" is defined in the Insurance Code, 
Article 21.52F as a nonprofit health corporation certified under Medical 
Practice Act, sec.5.01(a) (Texas Civil Statutes, Article 4495b). To establish 
consistency in this section with the use of this term in Article 21.52F, the 
term "Certified Nonprofit Health Corporation" has been changed to "Approved 
Nonprofit Health Corporation" in the title of Subchapter R, the title of sec.11. 
1701, as well as the text of sec.11.1701(a). 
 Subsection (a) of new sec.11.1701 states the purpose and scope of the rule 
which is to specify the purpose, task, reporting requirements, membership 
composition, and duration of the Approved Nonprofit Advisory Committee. 
Subsection (b) specifies the purpose of the committee which is to recommend to 
the Commissioner of Insurance rules necessary to implement Insurance Code, 
Article 21.52F. Subsection (c) outlines the tasks of the committee which are 
determined by the Commissioner of Insurance and include writing and revising 
rules necessary to implement Insurance Code, Article 21.52F. Subsection (d) 
outlines the committee's reporting requirements. Subsection (e) specifies the 
membership composition of the committee, and subsection (f) provides for the 
duration of the appointees' membership and service on the committee. 
 No comments were received regarding adoption of the new section. 
 The new section is adopted pursuant to House Bill 3111,  sec.2 passed by the 
74th Legislature, Regular Session; Insurance Code, Articles 21.52F and 1.03A; 
and Texas Civil Statutes, Article 6252-33. House Bill 3111, sec.2 provides for 
the establishment of an advisory committee to recommend to the commissioner 
rules necessary to implement Insurance Code, Article 21.52F. Article 21.52F, 
sec.7 provides that the Commissioner of Insurance shall adopt rules to implement 
Article 21.52F. Texas Civil Statutes, Article 6252-33, sec.5, require a state 
agency that is advised by an advisory committee to adopt rules stating the 
purpose of the committee, the tasks of the committee, and the manner in which 
the committee will report to the agency. Article 6252-33, sec.8 requires a state 
agency that is advised by an advisory committee to establish by rule a date on 
which the committee will automatically be abolished. Article 1.03A provides that 
the Commissioner of Insurance may adopt rules necessary for the conduct and 
execution of the duties and functions of the Texas Department of Insurance only 
as authorized by a statute. 
 
 
  sec.11.1701. Approved Nonprofit Health Corporation Advisory Committee. 
 
  (a) Purpose and Scope of this Section. This section specifies the purpose, 
task, reporting requirements, membership composition and duration of the 
Approved Nonprofit Health Corporation Advisory Committee (Advisory Committee) 
whose members are appointed pursuant to order of the Commissioner of Insurance. 
   
  (b) Purpose of the Advisory Committee. The purpose of the Advisory Committee 
is to recommend to the Commissioner of Insurance rules necessary to implement 
Insurance Code, Article 21.52F which concerns the licensure and regulation of 
nonprofit health corporations certified under the Medical Practice Act (Texas 
Civil Statutes, Article 4495b), sec.5.01(a), which arrange for or provide health 
care plans to enrollees on a prepaid basis. 
   
  (c) Tasks. The tasks of the Advisory Committee are determined by the 
Commissioner of Insurance and include writing and revising rules necessary to 
implement Insurance Code, Article 21.52F. 
   
  (d) Reporting Requirements. The Advisory Committee shall present to the 
Commissioner of Insurance a complete written draft of rules necessary to 
implement Insurance Code, Article 21.52F. 
   
  (e) Membership. Pursuant to House Bill 3111, sec.2(a), the Commissioner of 
Insurance shall establish the Advisory Committee which shall be composed of: 
 
  (1) five members representing nonprofit health corporations certified under 
Medical Practice Act, sec.5.01(a) (Texas Civil Statutes, Article 4495b); and 
   
  (2) four members representing the public, two of whom are employers. 
     
  (f) Duration. The Advisory Committee shall be automatically abolished on 
December 31, 1995 unless the existence of the Advisory Committee is continued by 
order of the Commissioner of Insurance. 
 
  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 January 12, 1996. 
 TRD-9600436 
  Alicia M. Fechtel 
 General Counsel and Chief Clerk 
 Texas Department of Insurance 
    Effective date: February 2, 1996 
 Proposal publication date: November 17, 1995 
 For further information, please call: (512) 463-6327 
         
                 Part II. Texas Workers' Compensation Commission 
  Chapter 108. Fees 
  
  The Texas Workers' Compensation Commission (the commission) adopts new 
sec.108.1, concerning charges for copies of public information, with changes to 
the proposed text as published in the October 20, 1995, issue of the Texas 
Register  (20 TexReg 8571). The commission simultaneously adopts the repeal of 
current sec.108.1, concerning charges for copies of public records. 
 A 1993 amendment to the Texas Government Code required the General Services 
Commission (GSC) to adopt a rule to specify the methods and procedures a state 
agency must use in determining charges for providing copies. The amendment also 
required each state agency to adopt a rule to specify the charges the agency 
will make for copies of public records, and provided that an agency may 
establish a charge equal to the full cost to the agency of providing the copy. 
The General Services Commission adopted a rule regarding methods and procedures 
for determining costs; the commission's analysis of its costs resulted in cost 
figures the same as those that resulted from the analysis done by the General 
Services Commission and that were adopted in the GSC's resultant rule. The 
commission adopted the original sec.108.1 in accordance with the statutory 
requirement for a rule and in accordance with the GSC rules specifying the 
methods and procedures to use in determining costs. The charge figures adopted 
by the original sec.108.1 are amounts that would recover the commission's actual 
costs for providing the copies. The commission rule contained considerable 
detail regarding costs and other matters of substance and procedure regarding 
requests for open records, confidentiality of claim files, and the commission 
process regarding access to or copies of public information. 
 Recent legislation (House Bill 1718, 74th Legislature, 1995) made extensive 
amendments to the Texas Government Code, Chapter 552 (relating to open records) 
, including adding provisions addressing, among other things: electronic access 
to public information, time limits for answering a public information request, 
and the General Services Commission setting mandatory rules governing the costs 
that governmental bodies may charge for copies and access to public information. 
The existing sec.108.1 conflicted with some of the new statutory provisions 
regarding process and costs, which restricted some of the types of costs which 
could be recovered by an agency. New sec.108.1 incorporates the statutory 
revisions regarding costs by providing that the cost the commission will charge 
for providing copies of public information will be the charges established by 
the General Services Commission. This will enable the commission to recover its 
costs for providing copies as allowed by the statute, while complying with the 
1995 statutory revisions regarding the type of costs which may be recovered for 
providing copies. The commission decided that it was not necessary to include 
provisions regarding agency processing of requests for public information, as 
the new statutory provisions are detailed in this regard and the rule would 
unnecessarily reiterate what was in the statute. The rule as proposed and 
adopted, therefore, only addresses costs. 
 Subsection (a) adopts the provisions of the Texas Government Code and the rules 
of the General Services Commission for allowable charges for copies of public 
information. Subsection (b) excepts from the charges listed by the General 
Services Commission requests for copies of confidential information and 
publications compiled and printed by the commission. This is in accord with 
opinions of the Attorney General which state that the commission's claim file 
information is not public information under the Open Records Act (now the Public 
Information Act). Subsection (c) establishes that the charge for information for 
which the General Services Commission has not set a charge is the actual cost to 
the commission to provide the information. The commission has previously adopted 
a fee schedule and a publications price list which establish fees for copies of 
records not covered by the General Services Commission rules, such as copies of 
claim files and commission publications. Copies of the fee schedule and the 
publications price list are available upon request. For clarification purposes, 
a sentence has been added to subsection (b) of the rule as adopted, regarding 
availability of the fee schedule and the publications price list. This will 
advise persons who have a copy of the rule but not the explanatory preamble, of 
their availability. 
 The public benefit anticipated as a result of enforcing the rule will be 
implementation of the statutory mandates of the 1993 legislation and of House 
Bill 1718 from the 1995 legislative session, and continued efficient resource 
utilization. The commission will continue to provide copies of public 
information to those requesting copies in an efficient manner. 
 Comments were solicited through the Texas Register regarding the proposed new 
rule and simultaneous repeal of the current rule. No comments were received 
regarding adoption of the repeal and new section. 
   
  28 TAC sec.108.1 
 
  The repeal is adopted pursuant to the Texas Labor Code,  sec.401.021, which 
sets out the application of other acts (including the open records law) to the 
Texas Labor Code; the Texas Labor Code, sec.402.061, which authorizes the 
commission to adopt rules necessary to administer the Act; the Texas Labor Code, 
sec.402.083, which provides for confidentiality of claim file information; the 
Texas Labor Code, sec.402.086, which provides for transfer of confidentiality of 
released claim file information; the Texas Labor Code, sec.402.091, which sets 
out penalties for failure to maintain confidentiality; and the Texas Labor Code, 
sec.402.092, which provides for the confidentiality of information in commission 
investigation files; and Texas Government Code, Chapter 552, as amended by House 
Bill 1718, 74th Legislature, 1995, which establishes the definition of public 
information, exceptions to public information, the procedures for obtaining 
public information and charges for obtaining copies of public information. 
 
  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 January 12, 1996. 
 TRD-9600455 
  Susan Cory 
 General Counsel 
 Texas Workers' Compensation Commission 
    Effective date: February 2, 1996 
 Proposal publication date: October 20, 1995 
 For further information, please call: (512) 440-3700 
         
     
  The new section is adopted pursuant to the Texas Labor Code, sec.401. 021, 
which sets out the application of other acts (including the open records law) to 
the Texas Labor Code; the Texas Labor Code, sec.402.061, which authorizes the 
commission to adopt rules necessary to administer the Act; the Texas Labor Code 
sec.402.083, which provides for confidentiality of claim file information; the 
Texas Labor Code, sec.402.086, which provides for transfer of confidentiality of 
released claim file information; the Texas Labor Code, sec.402.091, which sets 
out penalties for failure to maintain confidentiality; and the Texas Labor Code, 
sec.402.092, which provides for the confidentiality of information in commission 
investigation files; and Texas Government Code, Chapter 552, as amended by House 
Bill 1718, 74th Legislature, 1995, which establishes the definition of public 
information, exceptions to public information, the procedures for obtaining 
public information and charges for obtaining copies of public information. 
 
 
  sec.108.1. Charges For Copies of Public Information. 
 
  (a) The charge to any person requesting access to public information or copies 
of public information from the commission will be the charges established by the 
Government Code, Chapter 552, and the General Services Commission rules, 1 TAC 
sec. sec.111.61 et seq, as amended, to the extent that they do not conflict with 
the Government Code. 
   
  (b) The charge provisions established by the General Services Commission do 
not apply to authorized requests for copies of commission confidential 
information or to publications compiled and printed by the commission. Charges 
for these items are established by the commission's fee schedule and the 
commission's Publications Price List which are available upon request from the 
Publications Department in the Public Information Division of the commission. 
   
  (c) Requests for public information for which the Government Code or the 
General Services Commission have not established a charge will be charged at the 
actual cost to the commission to provide the item. 
 
  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 January 12, 1996. 
 TRD-9600454 
  Susan Cory 
 General Counsel 
 Texas Workers' Compensation Commission 
    Effective date: February 2, 1996 
 Proposal publication date: October 20, 1995 
 For further information, please call: (512) 440-3700 
         
             Chapter 109. Workers' Compensation Coverage for State Agency 
Employees 
  
  28 TAC sec.109.1 
 
  The Texas Workers' Compensation Commission (the commission) adopts new 
sec.109.1, concerning workers' compensation coverage for state employees, with 
changes (discussed in subsequent paragraphs of this preamble) to the proposed 
text as published in the October 20, 1995, issue of the Texas Register  (20 
TexReg 8572). 
 The new rule is adopted to implement revisions to the Texas Labor Code. House 
Bill 1089, 74th Legislature, 1995, amended the Texas Labor Code, sec.501. 002 to 
establish the individual state agency as employer for all purposes under the 
Texas Labor Code, Chapter 501 and Chapter 451. Previously, the workers' 
compensation division of the Attorney General's office was statutorily 
designated as the employer and insurer for state agency employees for purposes 
of the Workers' Compensation Act. Amendments to the Texas Labor Code, 
sec.501.042 retained the workers' compensation division of the Attorney 
General's office as insurer. 
 Because the Attorney General's office served as the employer, there previously 
was no need for, and therefore, there were no rules which addressed the state 
agency's role in the workers' compensation system. New Chapter 109 is adopted to 
provide a section where rules related to this subject would logically be placed 
and can be easily found by state agencies. The role of employer for workers' 
compensation purposes is a new role for state agencies and a major change, 
encompassing as it does, multiple duties, obligations, and rights. Subsection 
(a) therefore reiterates that the state agency will act in the capacity of 
employer and references the Texas Labor Code, sec.501.002 which lists the 
sections of the Labor Code that are applicable to state agencies. Subsection (b) 
reiterates that the workers' compensation division of the Attorney General's 
office will continue to act in the capacity of insurer and also references Texas 
Labor Code,  sec.501.002 which lists the sections of the Code that are 
applicable to state agencies. Although this is a reiteration of the statute, the 
commission believes it is necessary to provide information and guidance to the 
state agencies with respect to their new roles. 
 Subsection (c) requires each state agency to establish and provide to the 
commission an administrative address for purposes of administering workers' 
compensation claims. This will give the commission a central location at each 
agency to direct all communications to the agency regarding workers' 
compensation. While this requirement is not imposed by the statute, the 
commission believes it is necessary to allow efficient implementation of the new 
statutory provisions with respect to the numerous agencies in the state and 
their myriad locations throughout the state. The commission also believes that 
having a central contact point for the agency as a whole will encourage and 
assist the agencies in monitoring the injuries occurring throughout their 
agency, and thus prompt efficient activity to address workers' health and safety 
concerns. Because of the timing of the adoption of the rule, however, the 
commission has revised the date in subsection (c) which establishes the deadline 
by which a state agency must provide to the commission the single administrative 
address. The date has been revised from December 31, 1995 to March 1, 1996. In 
addition, sentences have been added to subsection (c) for clarification, to 
state that all notices and written communications to the agency will be mailed 
to the address provided by the agency pursuant to this rule, and that a state 
agency must advise the commission of any change of the single administrative 
address at least 30 days in advance of the change. The Risk Management Division 
is not restricted to use of this single administrative division in contacting a 
state agency. 
 The public benefit anticipated as a result of enforcing the new rule will 
include: implementation of new legislative mandates, increased involvement in 
the workers' compensation process by state agency employers; increased awareness 
of workers' compensation claims filed by state agency employees; and increased 
emphasis by the state agency employers on accident prevention, claims control 
and costs. 
 Comments were solicited through the Texas Register regarding proposal of this 
rule. No comments were received regarding adoption of the new section. 
 The new section is adopted pursuant to the Texas Labor Code, sec.402.061, which 
requires the commission to adopt rules necessary for the implementation and 
enforcement of the Texas Workers Compensation Act; the Texas Labor Code, 
sec.501.001, which contains definitions of terms used in Chapter 501; the Texas 
Labor Code, sec.501.002, as amended by House Bill 1089, 74th Legislature, 1995, 
which lists the chapters of the Texas Labor Code which are applicable to state 
agencies and establishes each individual state agency as the employer for 
workers' compensation purposes; the Texas Labor Code, sec.501.021, which 
establishes workers' compensation coverage for state employees; the Texas Labor 
Code, sec.501.024, which sets out the exclusions from coverage; and the Texas 
Labor Code, sec.501.023, which establishes the state as a self-insuring entity. 
 
 
  sec.109.1. State Agencies: General Provisions. 
 
  (a) In administering and enforcing the applicable provisions of the Texas 
Labor Code as set out in sec.501.002, a state agency shall act in the capacity 
of employer. 
   
  (b) In administering and enforcing the applicable provisions of the Texas 
Labor Code as set out in sec.501.002, the workers' compensation division of the 
attorney general's office shall act in the capacity of insurance carrier. 
   
  (c) Each state agency shall establish within its headquarters a single 
administrative address, for the purpose of administering workers' compensation 
claims as employer and shall provide that address in writing to the records 
division of the Texas Workers' Compensation Commission by March 1, 1996. Other 
than communications and notices from the Risk Management Division of the 
commission, all notices and written communications to state agencies as 
employers will be sent to the address provided by the state agency pursuant to 
this section, unless otherwise specified by rule. If the single administrative 
address changes, the state agency shall provide the new address to the records 
division of the commission at least 30 days in advance of the 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 January 12, 1996. 
 TRD-9600453 
  Susan Cory 
 General Counsel 
 Texas Workers' Compensation Commission 
    Effective date: February 2, 1996 
 Proposal publication date: October 20, 1995 
 For further information, please call: (512) 440-3700 
         
             Chapter 125. Education and Training of Ombudsmen 
  
  28 TAC sec.sec.125.1-125.3 
 
  The Texas Workers' Compensation Commission (the commission) adopts new 
sec.sec.125.1-125.3, concerning the education and training of ombudsmen, with 
changes to the proposed text as published in the November 24, 1995, issue of the 
Texas Register (20 TexReg 9828). 
 The new rules are adopted to establish training guidelines and continuing 
education requirements for commission ombudsmen. 
 Recent legislation (House Bill 1089, 74th Legislature, 1995) amended the Texas 
Labor Code, sec.409.042 to add eligibility requirements for designation as a 
commission ombudsman and mandated the commission to, by rule, adopt training 
guidelines and continuing education requirements for ombudsmen. In addition, 
House Bill 1089 amended the Texas Labor Code, sec.409.041 to add a requirement 
that ombudsmen meet with an unrepresented claimant privately for a minimum of 15 
minutes prior to any formal or informal hearing. New sec.sec.125. 1-125.3 are 
necessary to implement these statutory mandates. 
 New sec.125.1 contains definitions for: "adjusters's license", "commission", 
"continuing education", "director", "mentor", "ombudsman", and "ombudsman 
training program". 
 New sec.125.2 sets out guidelines for the ombudsman training program which 
include: the assignment of an experienced ombudsman as a mentor to each 
ombudsman in training; formal classroom training; on-the-job training; 
observation of ombudsmen by a mentor and by central office Ombudsmen Services; 
comprehensive examinations; and regularly scheduled continuing education 
training. The rule also requires ombudsmen to participate in continuing 
education and to maintain an adjuster's license. Field office managers and 
central office Ombudsmen Services are to monitor the stages of training and the 
continuing education of ombudsmen. These requirements meet the mandated 
experience, knowledge, training, monitoring, and continuing education 
requirements set by the statute in the Texas Labor Code, sec.409.042 and are 
necessary to ensure that the ombudsmen who are assisting unrepresented persons 
are well-trained and knowledgeable. 
 New sec.125.2 allows field office managers, upon the recommendation of the 
ombudsman's mentor, to approve an ombudsman to independently assist 
unrepresented parties in certain duties as it is determined that they have 
reached an appropriate skill level. This will enable the commission to make 
efficient use of its resources while ensuring that commission staff are properly 
trained and prepared for the assistance they are rendering to unrepresented 
persons. When it is determined that an ombudsman has successfully completed each 
phase of the training program, including the attainment of an adjuster's 
license, the ombudsman shall be presented with verification of completion. 
 As in the statute, persons who were serving as ombudsmen immediately prior to 
September 1, 1995, are allowed to continue to serve as ombudsmen as long as they 
comply with applicable continuing education requirements and complete the 
Ombudsmen Training Program. 
 New sec.125.3 requires appropriate field office staff to send a list of 
unrepresented claimants who have been notified of a hearing to an ombudsman. The 
ombudsman is required to meet for at least 15 minutes with the unrepresented 
claimant prior to the hearing and if an unrepresented client has not met with an 
ombudsman, the rule requires the benefit review officer or benefit contested 
case hearing officer to recess the proceeding to allow such a meeting. In the 
event a claimant refuses to meet with an ombudsman, the rule requires the 
presiding officer to make a record of the refusal, and proceed with the hearing. 
These procedures are necessary to implement the statutory requirement that an 
ombudsman meet with an unrepresented claimant privately for a minimum of 15 
minutes prior to any formal or informal hearing. 
 Comments by solicited through the Texas Register. No comments were received 
regarding adoption of the new sections. 
 The new sections are adopted pursuant to the Texas Labor Code, sec.402.061, 
which authorizes the commission to adopt rules necessary to administer the Act; 
the Texas Labor Code, sec.409.041, which mandates the commission to maintain an 
ombudsman program to assist injured workers and persons claiming death benefits 
and sets out the responsibilities of an ombudsman, including the requirement 
that to meet with an unrepresented claimant privately for a minimum of 15 
minutes prior to any formal or informal hearing; and the Texas Labor Code, 
sec.409.042, which requires each field office to employ at least one ombudsman, 
sets qualifications for ombudsmen, mandates the commission to adopt training 
guidelines and continuing education requirements for ombudsmen, and sets out 
minimum requirements for training. 
 
 
  sec.125.1. Definitions.  The following words and terms, when used in this 
chapter, shall have the following meanings, unless the context clearly indicates 
otherwise. 
   
     Adjuster's license -A Type 03 adjuster's license (workers' compensation) 
issued by the Texas Department of Insurance. 
   
     Commission-The Texas Workers' Compensation Commission. 
   
     Continuing education -Training required by the commission to maintain 
designation as an ombudsman and by the Texas Department of Insurance to maintain 
an adjuster's license. 
   
     Director-The director of the division of Employee/Employer Field Services. 
   
     Mentor-An experienced ombudsman who observes and monitors the training of 
and serves as advisor to ombudsmen who have not completed the training program. 
A mentor: 
 
  (A) is selected by the director or his or her designee; 
   
  (B) must have completed the Ombudsman Training Program; and 
   
  (C) must have been performing all of the duties of an ombudsman for a minimum 
of one year. 
     
     Ombudsman-A commission employee who has been designated by the director to 
perform some or all of the duties described in the Texas Labor Code, 
sec.409.041. Employees designated as ombudsmen on or after September 1, 1995, 
shall have at least three years demonstrated experience in the field of workers' 
compensation. 
   
     Ombudsman Training Program-Mandatory classroom instruction, on-the-job 
training and regularly scheduled observations by mentors and central office 
ombudsmen. The term includes continuing education and the requirements for 
obtaining and retaining an adjuster's license. 
 
   
  sec.125.2. Ombudsman Training Program/Continuing Education. 
 
  (a) The commission shall develop and maintain an Ombudsman Training Program 
which shall include, but is not necessarily limited to the following: 
 
  (1) selection by the director of a mentor who will observe and monitor the 
progress of ombudsmen who are in training; 
   
  (2) formal classroom training conducted by commission staff; 
   
  (3) on-the-job training monitored by a mentor and central office Ombudsman 
Services; 
   
  (4) observations of ombudsmen by central office Ombudsmen Services; 
   
  (5) comprehensive examinations developed and administered by commission staff 
that demonstrate the knowledge, experience, and skills required by the Texas 
Labor Code, sec.409.042(b); and 
   
  (6) regularly scheduled continuing education with emphasis on benefits, the 
dispute resolution process, updates in the law, the rules, appeals panel 
decisions, commission policy and ombudsman procedures. 
     
  (b) When the field office manager and the mentor determine that the ombudsman 
has attained sufficient skills, they will recommend the ombudsman to the 
director or his or her designee for approval to independently assist 
unrepresented parties in specific ombudsman duties. 
   
  (c) When the director determines, upon recommendation of the field office 
manager and the mentor, that the ombudsman has obtained an adjuster's license 
and successfully completed each phase of the Ombudsman Training Program, the 
director shall present the ombudsman with verification of completion. 
   
  (d) To maintain status as an ombudsman, he or she shall: 
 
  (1) participate in continuing education as described in the Ombudsman Training 
Program; 
   
  (2) retain an adjuster's license; and 
   
  (3) maintain technical and professional skills sufficient to perform all of 
the duties of an ombudsman. 
     
  (e) Field office managers and central office Ombudsman Services shall monitor 
the stages of training and continuing education of each ombudsman. 
   
  (f) A person serving as an ombudsman immediately before September 1, 1995, 
shall be allowed to continue to serve as an ombudsman regardless of whether he 
or she has three years of demonstrated experience in the field of workers' 
compensation or has successfully completed each phase of the Ombudsman Training 
Program; however, he or she must comply with the provisions of subsection (d) of 
this section and complete the Ombudsman Training Program as required by the 
director. 
 
     
  sec.125.3. Private Meetings With Unrepresented Claimants. 
 
  (a) Appropriate field office staff shall forward to each ombudsman in the 
field office a list of unrepresented claimants who have been notified of a 
benefit review conference or a benefit contested case hearing. The ombudsman 
shall maintain an up to date calendar of pending benefit review conferences and 
benefit contested case hearings. 
   
  (b) An ombudsman shall meet privately with an unrepresented claimant for a 
minimum of 15 minutes prior to each benefit review conference and benefit 
contested case hearing. 
   
  (c) The 15-minute meeting shall include an overview of the dispute resolution 
process, a review of the claimant's disputed issues and the application of the 
workers' compensation statute, the rules of the commission and appeals panel 
decisions. 
   
  (d) If, at the beginning of a benefit review conference or benefit contested 
case hearing, the benefit review officer or benefit contested case hearing 
officer determines that the unrepresented claimant has not met with an ombudsman 
for a minimum of 15 minutes prior to the proceeding, the benefit review officer 
or benefit contested case hearing officer shall recess the proceeding to allow 
for the private meeting as described in this rule. 
   
  (e) If the claimant refuses to attend the required meeting prior to a benefit 
review conference, the claimant shall acknowledge such refusal in writing. If 
the claimant refuses to sign the acknowledgement of his or her refusal, the 
benefit review officer shall: 
 
  (1) provide the claimant a copy of Texas Labor Code, sec.409.041(b)(5); and 
   
  (2) make a notation of the claimant's refusal in the claim file, and proceed 
with the hearing. 
     
  (f) If the claimant refuses to attend the required meeting prior to a benefit 
contested case hearing, the claimant shall acknowledge such refusal in writing. 
If the claimant refuses to sign the acknowledgement of his or her refusal, the 
benefit contested case hearing officer shall: 
 
  (1) provide the claimant a copy of the Texas Labor Code, sec.409.041(b) (5); 
and 
   
  (2) make a record of the claimant's refusal to comply with sec.409.041(b) (5) 
and the provisions of this rule, and proceed with the hearing. 
 
  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 January 12, 1996. 
 TRD-9600460 
  Susan Cory 
 General Counsel 
 Texas Workers' Compensation Commission 
    Effective date: February 2, 1996 
 Proposal publication date: November 24, 1995 
 For further information, please call: (512) 440-3700 
         
               Chapter 134. Guidelines for Medical Services, Charges, and 
Payments 
  
  Subchapter B. Disclosure by Health Care Provider of Financial Interest in 
Referred Provider 
 
  28 TAC sec.134.100 
 
  The Texas Workers' Compensation Commission (the commission) adopts an 
amendment to sec.134.100, concerning provider disclosure of financial interest 
and submission to the commission, without changes to the proposed text as 
published in the October 20, 1995, issue of the Texas Register  (20 TexReg 
8572). 
 The amendment is adopted to implement recently enacted changes to the Texas 
Labor Code and to enhance enforceability of the rule. The Texas Labor Code, 
sec.413.041 requires a health care provider who refers a workers' compensation 
claimant to another health care provider in which the referring provider has 
more than a 5.0% financial interest, to file an annual disclosure statement with 
the commission as provided by commission rule. Section 134.100 was previously 
adopted by the commission to implement this statutory requirement. 
 House Bill 1089, 74th Legislature, 1995, removed two actions from the list of 
health care provider administrative violations in the Texas Labor Code, 
sec.415.003 and placed these actions in new sec.415.0035. The effect of moving 
the two violations was to delete the requirement that the Texas Workers' 
Compensation Act be committed willfully or intentionally by the health care 
provider to be an administrative violation. Subsection (c) has been amended to 
remove references to the prior statute and insert the correct reference. 
Subsection (a) has been amended to provide a timeframe of 30 days from the first 
referral to file the required disclosure with the commission. The rule 
previously provided for an annual filing on April 1st of each year. Provisions 
have also been added to subsection (a) to clarify that the filing must be made 
for each health care provider to whom an employee is referred, and to require 
use of the form prescribed by the commission. The amendment clarifies the filing 
requirements for health care providers, and, by revising the due date for the 
filing, provide for more timely disclosure of the financial interest. This will 
improve the commission's ability to monitor and review provider activities 
involving referrals to another provider in which the referring provider has a 
financial interest. By providing definitive requirements on the time and form of 
filing, the commission will also be better able to enforce the requirements of 
the rule and the statute. 
 Comments were solicited through the Texas Register regarding the proposed 
amendment to this rule. No comments were received regarding adoption of the 
amendment. 
 The amendment is adopted pursuant to the Texas Labor Code, sec.402.061, which 
requires the commission to adopt rules necessary for the implementation and 
enforcement of the Texas Workers Compensation Act; the Texas Labor Code, 
sec.413.041, which requires a health care provider to disclose to the commission 
any financial interest greater than 5% in a referral provider; the Texas Labor 
Code, sec.415.021, which provides for assessment of administrative penalties; 
and the Texas Labor Code, sec.415.0035, as added by House Bill 1089, 74th 
Legislature, 1995, which sets out acts which constitute administrative 
violations by insurance carriers and health care providers. 
 
  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 January 12, 1996. 
 TRD-9600449 
  Susan Cory 
 General Counsel 
 Texas Workers' Compensation Commission 
    Effective date: February 2, 1996 
 Proposal publication date: October 20, 1995 
 For further information, please call: (512) 440-3700 
         
           Chapter 147. Dispute Resolution-Agreements, Settlements, Commutation 
  
  28 TAC sec.147.11 
 
  The Texas Workers' Compensation Commission (the commission) adopts new 
sec.147.11, concerning the filing of settlements reached after an Appeals Panel 
decision, without changes to the proposed text as published in the October 20, 
1995, issue of the Texas Register (20 TexReg 8580). 
 The new rule is adopted to establish the requirements for filing a settlement 
in the situation where the parties enter into the settlement or agreement after 
an Appeals Panel decision or a final contested case hearing decision. 
 In the past, settlements have been entered into without the approval of the 
commission, which do not meet the statutory criteria for such settlements. In 
addition, the commission is not always served with a copy of the petition as 
required by the Texas Labor Code, sec.410.253, when a workers' compensation case 
is filed in court. As a result, the commission may not know of a pending case or 
a settlement and may not have the opportunity to exercise its right to intervene 
in support of the Appeals Panel decision and to prevent the parties from 
entering into illegal agreements and settlements. This new rule ameliorates this 
problem by making it clear that all settlements and agreements must be filed 
with and approved by the commission. 
 Illegal settlements can be detrimental to a claimant's statutory rights. In 
particular, many of these settlements purport to terminate a claimant's right to 
lifetime medical benefits in violation of the law, or to pay income benefits in 
a lump sum in violation of the law. These illegal settlements affect a 
claimant's right to benefits, affect the employer's premium amounts, and affect 
the overall costs to the workers' compensation system. Payments should be made 
to claimants when they are due and not paid if the claimant is not entitled to 
them. In addition, illegal settlements may affect benefits paid to or claims 
made against the Subsequent Injury Fund and increase the time required for the 
commission to process the reimbursement requests. 
 Recent legislation, House Bill 1089, 74th Legislature, 1995, added to the Texas 
Labor Code, sec.415.0035, which sets out actions by an insurance carrier or 
health care provider which constitute administrative violations. One of the 
actions described is carrier failure to submit to the commission a settlement or 
agreement of the parties. 
 New sec.147.11(a) requires an insurance carrier to file a settlement or 
agreement reached after an Appeals Panel decision with the General Counsel of 
the commission at least 30 days prior to either the date the settlement or 
agreement is sent to the parties for signature or the date the settlement or 
agreement is sent to the court for approval, whichever is earlier. Subsection 
(b) requires that the settlement or agreement also be submitted by the insurance 
carrier to the General Counsel of the commission no later than ten days after 
the court approves the settlement or agreement. Subsection (c) reiterates that 
violation of the rule is an administrative violation and sets out the statutory 
penalty. 
 It is anticipated that early notice of settlement terms will allow the 
commission to notify parties of settlements which do not comply with the law 
prior to execution of the settlement. This early involvement may eventually 
prevent the necessity of formal court intervention and commission enforcement 
actions. The new rule will allow commission intervention at an early stage to 
prevent illegal settlements or agreements which attempt to illegally affect 
claimant's benefits. 
 One comment opposing the proposed amendment to sec.147.11 was received from 
Employers Claims Adjustment Services, Inc. 
 Summary of the comment and commission response is as follows: 
 COMMENT: The commenter objected to the requirement that agreements and 
settlements be filed with the commission at least 30 days prior to the date the 
settlement is sent to the parties for signature or 30 days prior to the date the 
agreement or settlement is sent to the court for approval. The commenter felt 
that this requirement would require a carrier to hold an agreement for 30 days, 
which in some instances is past the date for filing suit. In addition, commenter 
felt that a carrier would incur unnecessary legal expense to file suit even 
though an agreement had been reached. The commenter suggested that the rule be 
revised to require that the settlement be filed with the commission at the same 
time it is sent to the parties for signature, or at the same time it is sent to 
the court for approval, or no later than ten days after the court approves the 
agreement of settlement. 
 RESPONSE: The commission disagrees. The Texas Workers' Compensation Act, Texas 
Labor Code, sec.410.205, provides that, in the absence of a timely appeal for 
judicial review, a decision of the Appeals Panel is final. As a result, parties 
cannot settle a lawsuit after an Appeals Panel decision is issued without filing 
suit. Parties who attempt to settle lawsuits after an Appeals Panel decision 
without filing a timely request for judicial review are in violation of the Act. 
 The new section is adopted pursuant to the Texas Labor Code, sec.402.061, which 
requires the commission to adopt rules necessary for the implementation and 
enforcement of the Texas Workers Compensation Act; the Texas Labor Code, 
sec.415.0035, as amended by House Bill 1089, 74th Legislature, 1995, which 
provides additional violations by insurance carriers or health care providers 
and sets out penalties for violations; and the Texas Labor Code, sec.415.021, 
which provides for the assessment of administrative penalties. 
 
  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 January 12, 1996. 
 TRD-9600450 
  Susan Cory 
 General Counsel 
 Texas Workers' Compensation Commission 
    Effective date: February 2, 1996 
 Proposal publication date: October 20, 1995 
 For further information, please call: (512) 440-3700 
         
         Chapter 160. Workers' Health and Safety: General Provisions 
  
  28 TAC sec.160.2 
 
  The Texas Workers' Compensation Commission (the commission) adopts an 
amendment to sec.160.2, concerning non-subscribing employer's report of injury 
without changes to the proposed text as published in the October 20, 1995, issue 
of the Texas Register (20 TexReg 8581). 
 The amendment is adopted to implement recently enacted changes to the Texas 
Labor Code. House Bill 1089, 74th Legislature, 1995, amended the Texas Labor 
Code, sec.411.032 to add subsection (c) which makes it a class D administrative 
violation for an employer to fail to report an injury or occupational disease to 
the commission, unless good cause exists. 
 Chapter 160 rules apply to employers who are non-subscribers. The amendment to 
sec.160.2 adds subsection (d) to the rule to cite to the penalty provision 
established by the statute for failure to file the required report. This will 
help to place non-subscribing employers on notice of the possible penalty for 
failure to file injury reports as required by the Texas Workers' Compensation 
Act and the rules. References to the Texas Labor Code and the commission rules 
have been updated in subsection (a) and the applicability of the rule has been 
clarified. The Texas Workers' Compensation Act as adopted in 1989 phased in the 
applicability of the statute to non-subscribers. As of January 1, 1994, however, 
all of the phase-ins have occurred, and the provisions applicable to non-
subscribers are applicable to all non-subscriber employers with five or more 
employees who are not exempt from workers' compensation coverage. The amendment 
to subsection (a) incorporates this applicability provision rather than 
referring the reader to the statute for the various phase-in provisions of 
applicability. This should assist non-subscribing employers to determine whether 
the requirement to file an injury report is applicable to them. In subsection 
(b) "on a form prescribed by the commission" has been replaced by "in the form, 
format, and manner prescribed by the commission" to make it consistent with 
other recently amended rules and to provide necessary flexibility to the 
commission to revise form, format, and manner of filing without revising the 
substantive rule. 
 Comments were solicited through the Texas Register regarding this rule. No 
comments were received regarding adoption of the amendment. 
 The amendment is adopted pursuant to the Texas Labor Code, sec.402.061, which 
authorizes the commission to adopt rules necessary to administer the Act; and 
the Texas Labor Code,  sec.411.002, which states the applicability of the 
statute to non-subscribing employers; and sec.411.032, as amended by House Bill 
1089, 74th Legislature, 1995, which requires the filing of a report of injury 
and occupational disease by non-subscribing employers and establishes a penalty 
for failure to do so. 
 
  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 January 12, 1996. 
 TRD-9600452 
  Susan Cory 
 General Counsel 
 Texas Workers' Compensation Commission 
    Effective date: February 2, 1996 
 Proposal publication date: October 20, 1995 
 For further information, please call: (512) 440-3700 
         
       
  28 TAC sec.160.3 
 
  The Texas Workers' Compensation Commission (the commission) adopts new 
sec.160.3, concerning the subscribing employer's report of injury, without 
changes to the proposed text as published in the November 21, 1995, issue of the 
Texas Register (20 TexReg 9672). 
 The new rule is adopted to clarify the requirements of subscribing employers 
for filing reports of injury. 
 The Texas Workers' Compensation Act contains a requirement in the Texas Labor 
Code, Chapter 409 that subscribing employers file a report of injury for an 
injury that results in the employee's absence from work for more than one day 
and for each occupational disease of which the employer has knowledge. The 
report must be filed no later than the eighth day after the employee's absence 
from work for more than one day or the day on which the employer receives notice 
of the occupational disease. The Texas Labor Code, Chapter 411 requires 
employers with five or more employees that are not exempt from workers' 
compensation coverage, to file a report of injury for the same injuries 
described previously, in the time and manner prescribed by rule by the 
commission. The commission has adopted sec.160.2 requiring non-subscribing 
employers to file these injury reports on a monthly basis, while the subscribing 
employers' injury reports filed under Chapter 409 are filed individually for 
each injury. These two sections of the Labor Code require reports of injury for 
different purposes. Section 409.005 is the reporting mechanism for claim 
information and is used in the claim process. Section 411. 032 is the reporting 
mechanism for health and safety information. 
 Recent legislation (House Bill 1089, 74th Legislature, 1995) amended the Texas 
Labor Code, sec.409.005 to require that subscribing employers report injuries to 
insurance carriers and that carriers then report the injury to the commission 
electronically. Prior to this statutory amendment, subscribing employers were 
required to report injuries directly to the commission and the carrier. The 
Texas Labor Code, sec.411.032, which is applicable to both subscribing and non-
subscribing employers, was not changed by the legislature and still requires an 
employer to file a report of injury with the commission. It is the commission's 
intention to require only one report of injury from subscribing employers. 
Therefore, new rule sec.160.3 is adopted to clarify that an employer that files 
a report of injury with the carrier in accordance with the Texas Labor Code, 
sec.409.005 also satisfies the requirement under the Texas Labor Code, 
sec.411.032. This will insure that subscribing employers file only one report of 
injury per injury, and that the report is filed with the carrier and not with 
the commission. If the subscribing employer were required to also file the 
monthly report of injuries with the commission, this would circumvent the 
legislative intent of the amendments to Chapter 409. The legislature intended to 
eliminate the subscribing employer's filing with the commission, with the 
objective that the reports of injury would be filed electronically with the 
commission by the carrier, resulting in decreased paper flow, and increased 
accuracy and timeliness of filing of reports of injury, with benefits getting to 
injured workers sooner. This rule amendment will accomplish the legislative 
intent and the commission will still receive the injury information in the time 
and manner intended by the legislature. 
 The public benefits anticipated as a result of enforcing the rule will be 
implementation of the Texas Workers' Compensation Act as amended by the 
Legislature in 1995 and faster and more efficient claims filing. In addition, 
this new rule will prevent the necessity of filing an additional report with the 
commission. 
 Comments were solicited through the Texas Register regarding this rule. No 
comments were received regarding adoption of the new section. 
 The new section is adopted pursuant to the Texas Labor Code, sec.402.042(b) 
(11), which allows the executive director to prescribe the form, manner, and 
procedure for transmission of information to the commission; the Texas Labor 
Code, sec.402.061, which authorizes the commission to adopt rules necessary to 
administer the Act; the Texas Labor Code, sec.409.005, as amended by House Bill 
1089, 74th Legislature, 1995, which provides the procedure for filing a report 
of injury and the format to be used; and the Texas Labor Code, sec.411.032, 
which requires an employer to file a report of injury with the commission, 
mandates the commission to adopt rules prescribing the form and manner of 
reports, and establishes an administrative violation for failure to comply. 
 
  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 January 12, 1996. 
 TRD-9600451 
  Susan Cory 
 General Counsel 
 Texas Workers' Compensation Commission 
    Effective date: February 2, 1996 
 Proposal publication date: November 21, 1995 
 For further information, please call: (512) 440-3700 
         
             
  TITLE 30. ENVIRONMENTAL QUALITY 
 Part I. Texas Natural Resource Conservation Commission 
  Chapter 115. Control of Air Pollution From Volatile Organic Compounds 
  
  Subchapter G. Consumer-Related Sources 
 
  Utility Engines 
 
  30 TAC sec.115.621, sec.115.625 
 
  The Texas Natural Resource Conservation Commission (TNRCC or Commission) 
adopts the repeal of sec.115.621 and sec.115.625, concerning Utility Engines 
without changes to the proposed text as published in the November 14, 1995, 
issue of the Texas Register (20 TexReg 9378). This action removes regulations 
that have been made redundant by recent federal rulemaking and policy decisions. 
 The Utility Engine rule was adopted in November 1993, as part of a large rule 
revision package intended to reduce the emissions of volatile organic compounds 
(VOC) 15% below 1990 levels in the four areas of Texas that do not meet the 
national ambient air quality standard for ozone. These reductions were to be 
accomplished by the end of 1996. The rule established emission standards for 
small engines under 25 horsepower commonly used in lawn mowers, garden, and 
light industrial equipment. Emissions from these engines account for about 9.0% 
of VOC emissions inventories and were not previously regulated. 
 In December 1993, the Outdoor Power Equipment Institute (OPEI) filed suit 
against the TNRCC stating that the implementation schedule of the Utility Engine 
rule was in conflict with the Federal Clean Air Act. In an attempt to settle the 
suit, the TNRCC revised the rule in November 1994, to match the anticipated 
federal implementation schedule. The TNRCC retained the rule as a contingency in 
case the federal rule was delayed or modified. The TNRCC also agreed to evaluate 
emissions from 1994 and 1995 model year engines with the aid of the United 
States Environmental Protection Agency (EPA) Office of Mobile Sources. The OPEI 
contended that these engines, while not meeting the anticipated federal 
standards, produced less emissions than engines the TNRCC used to calculate 
emissions reductions required by 1996. Emissions data was submitted by OPEI. 
 In May 1995, the federal small engine rule was adopted with an implementation 
schedule that called for the introduction of complying engines over a two-year 
period from January 1996-December 1997. The TNRCC rule applies to engines 
manufactured after August 1, 1996, and conflicts with the adopted federal 
schedule. In September 1995, the EPA indicated that it would approve early 
reduction credit for 1994 and 1995 engines. This credit can be applied to the 
reductions in VOC that the TNRCC is required to achieve in the four ozone 
nonattainment areas. 
 Using conservative calculations, the emissions credits that accumulate as a 
result of these federal actions are comparable to those that the staff 
calculated from implementation of the TNRCC rule and make the rule unnecessary. 
Based on these developments, the TNRCC repeals the Utility Engine rule. 
 A public hearing was held in Austin on December 7, 1995 at the TNRCC offices 
located at 12100 North IH-35, Park 35 Technology Center, Austin. Three 
commenters submitted written testimony during the public comment period which 
closed December 11, 1995. 
 The OPEI and the Southwest Association support the repeal of the rule. The EPA 
did not oppose the repeal of the Utility engine rule but commented that, since 
the TNRCC was taking early VOC reduction credit as a result of EPA policy 
decisions, there could be less credit available after 1996 under the federal 
small engine rule. The TNRCC should be prepared to make up this credit. 
 The TNRCC is aware that further analysis of available VOC reduction credit by 
the EPA could modify the reductions available from the federal rule. The TNRCC 
does not anticipate that these potential modifications will significantly affect 
the rate of progress nor post 1996 state implementation plans. The TNRCC will 
evaluate the plans as necessary. 
 The repeals are adopted under the Texas Health and Safety Code (Vernon 1992) , 
the Texas Clean Air Act (TCAA), sec.382.017, which provides the TNRCC with the 
authority to adopt rules consistent with the policy and purposes of the TCAA. 
 
  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 January 11, 1996. 
 TRD-9600380 
  Kevin McCalla 
 Director, Legal Services Division 
 Texas Natural Resource Conservation Commission 
    Effective date: February 1, 1996 
 Proposal publication date: November 14, 1995 
 For further information, please call: (512) 239-1970 
         
             Chapter 117. Control of Air Pollution From Nitrogen Compounds 
  
  Subchapter C. Acid Manufacturing 
 
  The Texas Natural Resource Conservation Commission (TNRCC or commission) 
adopts amendments to sec.sec.117.451, 117.510, 117.520, 117.530, and 117.601 to 
extend the final compliance dates in Chapter 117, concerning Control of Air 
Pollution From Nitrogen Compounds, by two years to May 31, 1999. The amendments 
are adopted without changes to the proposed text as published in the September 
5, 1995, Texas Register  (20 TexReg 6912), and will not be republished. Chapter 
117 was adopted in response to a requirement by the United States Environmental 
Protection Agency (EPA) and the 1990 Federal Clean Air Act (FCAA) Amendments for 
states to apply reasonably available control technology (RACT) requirements to 
major sources of nitrogen oxides (NO [sub]x ) in the following ozone 
nonattainment counties: Brazoria, Chambers, Fort Bend, Galveston, Harris, 
Liberty, Montgomery, and Waller (Houston/Galveston ozone nonattainment area) and 
Hardin, Jefferson, and Orange (Beaumont/Port Arthur ozone nonattainment area). 
 In related actions, the commission has approved submittal of a petition to the 
EPA requesting a one-year extension of the exemption, previously granted by EPA 
under sec.182(f) of the FCAA, from federal NO [sub]x  requirements. The FCAA, 
sec.182(f) allows the following federally required measures pertaining to NO 
[sub]x  to be waived if the state demonstrates that NO [sub]x reductions do not 
contribute to ozone attainment: RACT, nonattainment new source review, vehicle 
inspection/maintenance, and conformity. Based on Urban Airshed Model (UAM) 
modeling, the TNRCC submitted a petition to the the EPA on August 17, 1994, 
requesting that NO [sub]x  requirements in the Houston/Galveston (HGA) and 
Beaumont/Port Arthur (BPA) areas be temporarily suspended under the FCAA, 
sec.182(f). The EPA approved the sec.182(f) exemption on April 12, 1995, 
granting a temporary exemption until December 31, 1996, for the federally 
required NO point=4.02p  [sub]x measures referenced previously. The approval 
stipulated that NO [sub]x RACT must be implemented no later than May 31, 1997. 
The current petition requests extension of the temporary exemption, previously 
granted under sec.182(f), and extension of the temporary NO [sub]x exemption for 
transportation conformity, under sec.182(b)(1) of the FCAA, to December 31, 
1997; and extension of the NO [sub]x  RACT final compliance date to May 31, 
1999. 
 Section 182(f) of the 1990 FCAA requires states to adopt rules to apply RACT by 
May 31, 1995 to major stationary sources of NO [sub]x in ozone nonattainment 
areas designated moderate or above, unless it can be demonstrated that reducing 
NO [sub]x emissions would not contribute to attainment of the ozone standard in 
those areas. The TNRCC adopted NO [sub]x  RACT rules in Chapter 117, effective 
June 9, 1993, for the HGA and BPA ozone nonattainment areas, based on the 
strength of preliminary indications of resulting benefits. By March, 1994, 
initial results of photochemical grid modeling, using the UAM, became available 
which predicted that NO point=4.02p  [sub]x reductions would be 
counterproductive to ozone control in portions of the HGA and BPA areas. 
 As a result, the Chapter 117 final compliance date was extended from May 31, 
1995 to May 31, 1997 in rulemaking effective September 22, 1994. The extension 
delayed the implementation of NO point=4.02p  [sub]x RACT in HGA and BPA to 
allow time for UAM modeling using data from the Coastal Oxidant Assessment for 
Southeast Texas (COAST), an intensive 1993 field study. These UAM results are 
critical in determining whether, and to what extent, NO [sub]x  reductions will 
be needed to attain the ozone standard. 
 The schedule submitted in the state's original sec.182(f) petition for HGA and 
BPA was based on completion of the UAM COAST modeling for attainment 
demonstration purposes by May 31, 1996. Now, an adjusted schedule has been 
developed to be consistent with submittal of the state's phased attainment 
demonstration State Implementation Plan (SIP) by May 31, 1997. This additional 
year allows the UAM modeling, using COAST data, to accommodate improvements in 
the modeling process. Submittal of the UAM modeling in mid-1997 using the more 
refined COAST data will allow the development of better substantiated control 
programs and minimize the possibility that earlier modeling could result in 
unnecessary or even counterproductive control programs, particularly if NO 
point=4.02p  [sub]x controls are determined to not be needed. The EPA's approval 
of the petition to extend the temporary sec.182(f) NO [sub]x  exemption would 
provide additional time necessary to perform the UAM modeling. Extending the NO 
[sub]x RACT compliance date to May 31, 1999, will provide industry with the 
necessary lead time to begin implementing the rule after UAM modeling results 
become known. 
 The TNRCC is, therefore, adopting revised compliance schedules in sec.sec.117. 
510, 117.520, and 117.530, contained in Subchapter D, Administrative Provisions, 
to extend the final compliance dates from May 31, 1997 to May 31, 1999. If the 
UAM modeling results from the COAST study indicate that NO  [sub]x reductions do 
not contribute to attainment of the ozone standard, then the requirements of 
Chapter 117 may be proposed in rulemaking to address these findings and rescind 
the rule. Existing sec.117.560, relating to Rescission, details the procedures 
to be followed in this contingency. 
 References to the final compliance date appear in sec.117.451 (relating to 
Applicability, Nitric Acid Manufacturing-General) and sec.117.601(a) (relating 
to Gas-Fired Steam Generation). These rule sections state that for emission 
units located in applicable ozone nonattainment areas, the existing Chapter 117 
emission specifications apply until superseded by the new emission 
specifications which become effective on the final rule compliance date. This 
adoption changes references from May 31, 1997 to May 31, 1999 in these sections. 
 This adoption does not amend existing sec.117.540 (relating to Phased RACT). 
The phased RACT rule was adopted to allow affected sources to petition the 
agency for additional time past the original May 31, 1995, compliance date to 
implement the Chapter 117 requirements. The rule section was developed in 
response to companies' concerns that in spite of good faith efforts to achieve 
compliance by the required date, delays could be encountered, and that a 
procedure was needed to allow a phased approach to implementing the rule 
requirements. With the adoption of the compliance date to May 31, 1999, 
references to dates in sec.117.540 will need to be changed. The TNRCC plans to 
propose these revisions by February, 1996, in order to combine them with 
separate revisions to  sec.117.540(c) authorizing alternative fuel credits for 
Chapter 117 compliance. 
 The commission has prepared a Takings Impact Assessment for these rules 
pursuant to Texas Government Code, Annotated sec.2007.043. The following is a 
summary of that assessment. The specific purpose of the rule amendment is to 
extend the Chapter 117 final compliance date by two years to May 31, 1999. The 
rule amendment will substantially advance this specific purpose by changing rule 
references of May 31, 1997 to May 31, 1999 where appropriate. Promulgation and 
enforcement of this rule amendment will not affect private real property which 
is the subject of the rule because the change is only to postpone the rule final 
compliance date. 
 A public hearing on this proposal was held October 2, 1995, at the TNRCC Austin 
offices. In addition to the Chapter 117 NO point=4.02p  [sub]x RACT final 
compliance date extension and submittal of a petition to the EPA requesting a 
one-year extension of the temporary sec.182(f) NO [sub]x exemption and a one-
year extension of the transportation conformity NO [sub]x  exemption under 
sec.182(b)(1), the public hearing concerned revisions to sec.116. 150, regarding 
NO [sub]x  nonattainment new source review. Because the adoption of amendments 
to sec.116.150 proceeded on an expedited schedule, comments from the public 
hearing concerning those amendments have already been addressed in the October 
20, 1995 Texas Register  (20 TexReg 8619). Regarding the other referenced 
issues, two oral comments were received at the public hearing, and eight written 
comments were received. 
 Amoco Corporation, Dow Chemical Company, Houston Lighting and Power, Mobil Oil 
Corporation, the Texas Chemical Council, and the Texas Mid-Continent Oil and Gas 
Association expressed general support of the two-year extension of the NO  
[sub]x RACT final compliance date to May 31, 1999. 
 The staff acknowledges support for the referenced amendment. 
 Akin, Gump, Strauss, Hauer and Feld, L.L.P. submitted comments on behalf of 
Enron/Dominion Cogen Corp. (EDCC), which operates gas-fired cogeneration 
facilities in the HGA area. The commenter expressed support of the two-year 
extension of the NO  [sub]x RACT final compliance date in sec.117.601 to May 31, 
1999, which provides industry with the necessary lead time to implement the 
rule. The commenter stated that the economics of cogeneration require that they 
operate reliably and without unplanned interruption. For RACT, this means they 
must have adequate lead time to have control equipment manufactured, then to 
have it installed during scheduled maintenance operations which typically occur 
every two years. The commenter also stated that the implementation of RACT 
controls may result in permanent reduction of cogeneration unit generating 
capacity, resulting in the need for units to apply controls no earlier than 
required. The EPA Region 6 Dallas office commented that the state has requested 
two additional years for compliance with the NO [sub]x RACT rules, based on a 
seven-month technical delay in UAM modeling. The EPA recommended that the NO 
[sub]x RACT final compliance date be extended only one year, to May 31, 1998, 
since the NO point=4.02p  [sub]x RACT rules are adopted and industry should have 
significant lead time when the modeling results are taken to public hearing in 
late 1996. The EPA further commented that, if the TNRCC revises the existing NO 
[sub]x  RACT rules, such a revision would have to be based on a modeled 
attainment demonstration for the final attainment year. 
 It is important that industry have sufficient lead time to implement the rule 
once the COAST modeling results are known. The original adoption of the NO 
[sub]x  RACT rule on May 11, 1993, allowed two full years until the final 
compliance date of May 31, 1995. In June 1994, after the initial modeling 
indicated that NO point=4.02p  [sub]x would not be beneficial, the TNRCC 
proposed in rulemaking to extend the compliance date of NO point=4.02p  [sub]x 
RACT to May 31, 1997. This proposal was based on a schedule developed in May 
1994 (Table 2 of letter, May 19, 1994, from TNRCC Chairman John Hall to EPA 
Assistant Administrator Mary Nichols), which indicated that directional guidance 
regarding the benefit of NO [sub]x reductions for ozone control would be 
generated from modeling by May 1995. Thus, the extended schedule also was based 
on a two-year period between identification of the need to make the reductions 
and the industry compliance date. However, by the time of adoption in August 
1994, the date for obtaining directional guidance from the modeling had been 
revised to a period between November 1995 and May 1996 (this was also the 
projected UAM completion period in the 182(f) exemption request), and the lead 
time available for NO [sub]x RACT implementation was shortened to twelve to 
eighteen months after modeling results were to have become available. This 
reduction in lead time could partly be accommodated because initial compliance 
plans, representing a substantial portion of the work effort, had already been 
completed. However, the effect of the rule delay since the original sec.182(f) 
petition will be to make these earlier efforts not fully cumulative, since 
conditions will have changed in many cases. In particular, it will be necessary 
to budget for control equipment and to set installation dates to coincide with 
scheduled outages. Budget and outage schedules usually have annual and sometimes 
longer time frames, so a one year implementation schedule is not appropriate. 
 The schedule previously proposed in August 1994, for completing the sec.182(f) 
modeling has been displaced by as much as 15 months, until March 1997, to allow 
time for analyses of the COAST data before input to the model. Modeling for 
directional guidance is projected for completion by December 1996. If this 
modeling shows that NO [sub]x  reductions are beneficial in controlling ozone, 
specific modeling sensitivity analyses, to be completed by March 1997, would be 
performed which simulate various reductions required to attain the ozone 
standard. During the period in 1995 when preliminary COAST model runs have been 
performed, it has become clear from discussions with EPA that a more formal 
process (i.e., public hearings ) is needed, rather than TNRCC simply providing 
the information on the modeling results. Factoring in the additional time needed 
for documenting modeling results, holding public hearings, and taking action by 
the commission adds four to six months to the process before industry has the 
necessary signal to proceed with rule implementation. In contrast to EPA's 
expectation that modeling will be taken to hearing in late 1996, the TNRCC had 
intended to hold hearings on the SIP and UAM modeling in March or April 1997. 
Submittal of the SIP and UAM modeling results to EPA is now scheduled for May 
1997. 
 Setting a final NO [sub]x  RACT compliance date two years past the May 1997, 
submittal of the SIP and modeling results to EPA is thus a reasonable time 
frame, and brings the compliance schedule into line with the original two-year 
lead time afforded to industry. If modeling sensitivity analyses show the need 
for revisions to the NO [sub]x  RACT rule to eliminate provisions determined to 
be ineffective in reducing ozone, additional time would be needed to adopt these 
revisions. A tentative time frame of December 31, 1997, for adoption of rule 
revisions, if needed, and a final compliance date of December 31, 1999, would 
then be necessary. It should be noted that the current petition requests an 
extension of the original sec.182(f) exemption by one year, to December 31, 
1997, whereas the current time frame to reasonably implement NO [sub]x  RACT 
extends to May 31, 1999. 
 The TNRCC would like to clarify, in response to EDCC's comments, that the 
compliance date requirements applicable to cogeneration facilities are located 
in sec.117.520, rather than sec.117.601. 
 The Southeast Texas Regional Planning Commission (SETRPC) and Houston-Galveston 
Area Council (HGAC) supported the petition to extend the temporary sec.182(f) 
exemption for HGA and BPA. The SETRPC suggested that the exemption be extended 
an additional year, to December 31, 1998, if feasible. The HGAC requested that 
if the TNRCC pursues further extensions for UAM modeling, it should request a 
further NO [sub]x  exemption for transportation conformity as well. 
 The current petition to the EPA requests a one-year extension of the temporary 
sec.182(f) exemption for HGA and BPA, based on a revised modeling schedule with 
submittal of modeling results to EPA by May 31, 1997. Thus, the 182(f) extension 
would be extended from December 31, 1996 to December 31, 1997. The timeline for 
expiration of the proposed sec.182(f) exemption extension is closely tied to the 
projected completion of UAM modeling, using the COAST data. The proposed 
extension would expire seven months past the submittal of the SIP and UAM 
modeling to EPA, which is consistent with the current exemption. The current 
exemption expires seven months past May, 1996, the date for submittal of the SIP 
and UAM modeling to EPA in the original exemption proposal. Any further 
extension of NOx requirements not related to modeling completion departs from 
EPA's original basis for granting the exemption. However, if it becomes 
necessary to extend the schedule for completing UAM modeling, the TNRCC will 
work with EPA to assure that applicable NO [sub]x  requirements are implemented 
within a reasonable time frame. Initial UAM modeling results for NO [sub]x 
directional guidance are expected to be available by December 1996, a full year 
before the extended exemption, if approved, expires. During that time, modeling 
results will be documented and public hearings will be held. The TNRCC will keep 
the SETRPC and HGAC fully informed of developments in the UAM modeling, so that 
advance planning necessary to comply with transportation conformity requirements 
can proceed. 
 The Galveston-Houston Association for Smog Prevention stated its opposition to 
the extension of the sec.182(f) exemption, and to the extension of the NO [sub]x  
RACT compliance date. The commenter further stated that the additional benefits 
of reduced acid rain and air toxics would result from implementing NO 
point=4.02p  [sub]x controls now. 
 Although NO [sub]x  emissions do play a minor role in the formation of visible 
haze, fine acid particulate matter, and acid rain, these effects have not been 
adequately quantified to the extent that would warrant NO [sub]x reductions 
independent of the ozone control strategy. For this reason, it is difficult to 
weigh these contributions against prematurely implementing a NO [sub]x  control 
program which possibly would increase ozone levels, based on currently available 
air quality modeling data. 
   
  Nitric Acid Manufacturing-General 
 
  30 TAC sec.117.451 
 
  The amendment is adopted under the Texas Health and Safety Code (Vernon 1992), 
the Texas Clean Air Act (TCAA), sec.382.017, which provides the TNRCC with the 
authority to adopt rules consistent with the policy and purposes of the TCAA. 
 
  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 January 11, 1996. 
 TRD-9600381 
  Kevin McCalla 
 Director, Legal Services Division 
 Texas Natural Resource Conservation Commission 
    Effective date: February 1, 1996 
 Proposal publication date: September 5, 1995 
 For further information, please call: (512) 239-1970 
         
           
  Subchapter D. Administrative Provisions 
 
  30 TAC sec.sec.117.510, 117.520, 117.530 
 
  The amendments are adopted under the Texas Health and Safety Code (Vernon 
1992), the Texas Clean Air Act (TCAA), sec.382.017, which provides the TNRCC 
with the authority to adopt rules consistent with the policy and purposes of the 
TCAA. 
 
  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 January 11, 1996. 
 TRD-9600382 
  Kevin McCalla 
 Director, Legal Services Division 
 Texas Natural Resource Conservation Commission 
    Effective date: February 1, 1996 
 Proposal publication date: September 5, 1995 
 For further information, please call: (512) 239-1970 
         
         
  Subchapter E. Gas-Fired Steam Generation 
 
  30 TAC sec.117.601 
 
  The amendment is adopted under the Texas Health and Safety Code (Vernon 1992), 
the Texas Clean Air Act (TCAA), sec.382.017, which provides the TNRCC with the 
authority to adopt rules consistent with the policy and purposes of the TCAA. 
 
  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 January 11, 1996. 
 TRD-9600383 
  Kevin McCalla 
 Director, Legal Services Division 
 Texas Natural Resource Conservation Commission 
    Effective date: February 1, 1996 
 Proposal publication date: September 5, 1995 
 For further information, please call: (512) 239-1970 
         
           Chapter 330. Municipal Solid Waste 
  
  Subchapter P. Fees and Reporting 
 
  30 TAC sec.330.601, sec.330.602 
 
  The Texas Natural Resource Conservation Commission (TNRCC or commission) 
adopts amendments to sec.330.601 and sec.330.602, concerning the exemption from 
payment of municipal solid waste fees for certain types of waste, without 
changes to the proposed text as published in the October 20, 1995, issue of the  
Texas Register (20 TexReg 8582). 
 These adopted amendments are in response to the enactment of House Bill (HB) 
2944, Acts of the 74th Legislature, 1995. The bill became effective September 1, 
1995, and affects the collection of solid waste disposal fees for waste disposed 
of in Texas municipal solid waste disposal facilities. The legislation also 
clarifies existing provisions regarding the assessment of fees for disposal of a 
solid waste to ensure that duplicate assessment of fees does not occur. HB 2944 
amended the Texas Solid Waste Disposal Act, Health and Safety Code, 
sec.361.013(a), to provide that, with certain exceptions, the disposal of all 
solid waste is subject to a fee. However, fees for disposal of Class I 
industrial waste and hazardous waste are already being assessed under provisions 
of the Health and Safety Code, sec.361.136. 
 In accordance with the legislation, the amended rule provides that if a 
disposal facility donates the cost of disposal of solid waste resulting from a 
public entity's effort to protect the public health and safety of a community 
from the effects of a natural or man-made disaster or from structures that have 
been contributing to drug trafficking or other crimes the waste is exempt from 
the solid waste disposal fee. The amended rule also provides that the commission 
will not charge an additional solid waste disposal fee under the Health and 
Safety Code, sec.361.013(a) for the disposal of Class 1 industrial solid waste 
or hazardous waste that is subject to the fee rates authorized under the Health 
and Safety Code sec.361.136. 
 The Commission has prepared a Takings Impact Assessment for these rules 
pursuant to Government Code, sec.2007.043. The following is a summary of that 
Assessment. The specific purpose of the rule is to implement House Bill 2944, 
74th Legislature, which exempts certain wastes from the payment of municipal 
solid waste disposal fees. The specific wastes are: 
 (1) solid waste resulting from a public entity's cleanup of a community from 
the effects of a natural or man-made disaster or from structures that have been 
contributing to drug trafficking or other crimes if the disposal facility 
donates the cost of disposal of the waste to the public entity, and 
 (2) class I industrial waste or hazardous waste subject to fees under Health 
and Safety Code (H.S.C.) sec.361.136. The rules will substantially advance this 
specific purpose by identifying the exempted wastes where applicable. 
Promulgation and enforcement of these rules will not affect private real 
property because the rules apply only to persons who are required to pay fees 
for disposal of solid waste at a municipal solid waste disposal facility. 
 The TNRCC received only one comment, which was from Browning-Ferris Industries, 
and it was in support of the amendments. 
 The amendments are adopted under the Texas Water Code,  sec.5.103 and sec.26. 
011, which provides the commission with authority to adopt any rules necessary 
to carry out its powers, duties, and policies and to protect water quality in 
the state. The amendments are also promulgated under sec.361.011 and  
sec.361.017 of the Texas Solid Waste Disposal Act, Texas Health and Safety Code, 
Chapter 361, which provide the commission the authority to regulate municipal 
solid waste and industrial solid waste and all other powers necessary or 
convenient to carry out its responsibilities. Section 361.013, of the Texas 
Solid Waste Disposal Act, Texas Health and Safety Code, Chapter 361, provides 
specific authority to adopt and promulgate the sections for municipal solid 
waste fees. 
 
  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 January 11, 1996. 
 TRD-9600384 
  Kevin McCalla 
 Director, Legal Services Division 
 Texas Natural Resource Conservation Commission 
    Effective date: February 1, 1996 
 Proposal publication date: October 20, 1995 
 For further information, please call: (512) 239-1970 
         
               
  TITLE 31. NATURAL RESOURCES AND CONSERVATION 
 Part I. General Land Office 
  Chapter 13. Land Resources 
  
  Special Board of Review Hearings 
 
  31 TAC sec.sec.13.31-13.38 
 
  The Texas General Land Office (GLO) adopts amendments sec. sec.13.31-13.38, 
concerning special board of review hearings, without changes to the proposed 
text as published in the October 31, 1995, issue of the Texas Register  (20 
TexReg 8984). 
 The adopted amendments concern procedures for conducting public hearings before 
a special board of review pursuant to Texas Natural Resources Code, 
sec.sec.31.161 et seq. The amended sections provide new or clarified 
definitions, clarify the language of the rules, and provide consistency between 
the sections. 
 No comments were received regarding adoption of the proposed amendments. 
 The amendments are adopted under Texas Natural Resources Code, sec.31.166(b), 
which authorizes the GLO to promulgate rules for conducting hearings before the 
speci