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 7. BANKING AND SECURITIES PART IV. Texas Savings and Loan Department CHAPTER 65.Loans and Investments 7 TAC sec.65.17 The Finance Commission of Texas adopts an amendment to sec.65.17, regarding loan documentation for savings and loan associations, without changes to the proposed text as published in November 12, 1996, issue of the Texas Register (21 TexReg 11031). Section 65.17(a)(1)-(14) currently lists specific loan documentation requirements that, at a minimum, must be maintained by a savings and loan association to comply with the rule. While the documents listed are generally appropriate and should be used as a guideline for prudent lending, a rigid requirement that all documents listed be present for each loan is too restrictive and does not necessarily address all safety and soundness concerns. Currently, if an institution is missing any of the documents required by this section, it is technically in violation of the rule, even if the safety and soundness intent of the rule has been satisfied. Conversely, safety and soundness concerns may, in some cases, necessitate different or additional documentation beyond the documents listed in this section. For example, Section 65.17(a)(3) requires a financial statement from the borrower for all loans, ostensibly to justify the borrower's willingness and ability to repay the loan. However, the borrower's ability and willingness to repay a consumer or home loan may be better demonstrated with a verification of employment (not currently required) and a satisfactory credit report, rather than a financial statement. With the expanded movement toward electronic banking and other technological advances, there is an increased industry need for flexibility to use alternative documentation criteria as long as safety and soundness standards are met. The adopted amendment would require that the board of directors of each savings and loan association establish written policies for prudent underwriting and documentation standards consistent with safety and soundness. Section 65.17(a) sets forth criteria to be considered in such policies paralleling federal interagency standards for safety and soundness in all federally insured depository institutions. The policies and procedures established by the savings and loan association will be reviewed during each regular examination for their adequacy and appropriateness. No comments were received regarding the amended section. The amendment is adopted under Texas Civil Statutes, Article 342-1.013, which provide the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 13, 1996. TRD-9618291 James L. Pledger Commissioner Texas Savings and Loan Department Effective date: January 7, 1997 Proposal publication date: November 12, 1996 For further information, please call: (512) 475-1350 CHAPTER 75.Applications Reorganization, Merger, Consolidation, Conversion, Purchase and Assumption and Acquisition 7 TAC sec.75.81 The Finance Commission of Texas adopts an amendment to sec.75.81, regarding reorganization, merger, consolidation, conversion and purchase and assumption transactions, without changes to the proposed text as published in the November 12, 1996, issue of the Texas Register (21 TexReg 11033). This section currently requires an application and the approval of the commissioner for the reorganizations, mergers or conversions of a state savings bank regardless of the type of charter which will be held by the resulting institution. In recent discussions regarding the ability of national banks to convert to a state savings bank charter, the application and approval process for savings bank conversions to another type of financial institution charter as well as mergers and reorganizations have come into issue. The Office of the Comptroller of the Currency (OCC) rules relating to authority of national banks to convert to another type of charter require reciprocity in state law for reorganizations, mergers and conversions involving a national bank charter. Specifically, 12 U.S.C. sec.214(c) provides that: "No conversion of a national banking association into a State bank . . . shall take place . . . unless under the laws of the State in which such national banking association is located State banks may without approval by any State authority convert into and merge or consolidate with national banking associations under limitations or conditions no more restrictive than those contained in sec.214a with respect to the conversion of a national bank into, or merger or consolidation of a national bank with, a State bank under a State charter." Although this section of the Department's regulations applies to all types of reorganizations and mergers, it is the Department's policy that there should not be regulatory or institutional barriers to allowing institutions to conduct their business through whatever type of charter they choose. This policy position is consistent with the cross industry mergers and acquisitions legislation adopted by the 74th Legislature. Likewise, the Department does not wish its regulations to hinder other types of financial institutions from converting to a state savings bank charter. There are examples in which state banking laws relating to mergers and reorganizations do not conflict with sec.214(c). While these provisions require notice to the state banking authority, they do not require approval. Therefore, in order to ensure that national banks will be able to convert to a state savings bank charter, the Department concluded that it was necessary amend its merger and reorganization regulations to eliminate the conflict with sec.214. Mergers in which the resulting institution will be a state savings bank will continue to require full application and approval from the Department prior to consummation. Incidental to this amendment, similar amendments related to charter conversion to another type of financial institution and the application fees related to such transactions are being amended since those issues are likewise addressed by sec.214(c). No comments were received regarding the amended section. The amendment is adopted under Texas Civil Statutes, Article 342-1.013, which provide the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 13, 1996. TRD-9618289 James L. Pledger Commissioner Texas Savings and Loan Department Effective date: January 7, 1997 Proposal publication date: November 12, 1996 For further information, please call: (512) 475-1350 7 TAC sec.75.89 The Finance Commission of Texas adopts an amendment to sec.75.89, regarding conversion from a state savings bank to another financial institution charter, without changes to the proposed text as published in the November 12, 1996, issue of the Texas Register (21 TexReg 11034). This section currently requires an application and the approval of the commissioner for the conversion of a state savings bank into another type of financial institution charter. In recent discussions regarding the ability of national banks to convert to a state savings bank charter, the application and approval process for savings bank conversions to another type of financial institution charter came into issue. The Office of the Comptroller of the Currency (OCC) rules relating to authority of national banks to convert to another type of charter require reciprocity in state law for conversions to a national bank charter. Specifically, 12 U.S.C. sec.214(c) provides that: "No conversion of a national banking association into a State bank . . . shall take place . . . unless under the laws of the State in which such national banking association is located State banks may without approval by any State authority convert into and merge or consolidate with national banking associations under limitations or conditions no more restrictive than those contained in sec.214a with respect to the conversion of a national bank into, or merger or consolidation of a national bank with, a State bank under a State charter." Although this section of the Department's regulations applies to conversions to types of charters other than national banks, it is the Department's policy that there should not be regulatory or institutional barriers to allowing institutions to conduct their business through whatever type of charter they choose. This policy position is consistent with the cross industry mergers and acquisitions legislation adopted by the 74th Legislature. Likewise, the Department does not wish its regulations to hinder other types of financial institutions from converting to a state savings bank charter. There are examples in which state banking laws do not conflict with sec.214(c). While these provisions require notice to the state banking authority, they do not require approval. Therefore, in order to enable national banks to convert to a state savings bank charter, the Department concluded that it was necessary to amend its regulations to eliminate the conflict with sec.214. Incidental to this amendment, similar amendments related to mergers and consolidations and the application fees related to such transactions are being adopted since those issues are likewise addressed by sec.214(c). No comments were received regarding the amended section. The amendment is adopted under Texas Civil Statutes, Article 342-1.013, which provide the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 13, 1996. TRD-9618367 James L. Pledger Commissioner Texas Savings and Loan Department Effective date: January 7, 1997 Proposal publication date: November 12, 1996 For further information, please call: (512) 475-1350 CHAPTER 77.Loans, Investments, Savings and Deposits Authorized Loans and Investments 7 TAC sec.77.31 The Finance Commission of Texas adopts an amendment sec.77.31, regarding loan documentation for savings banks, without changes to the proposed text as published in the November 12, 1996, issue of the Texas Register (21 TexReg 11036). Section 77.31(a)(1)-(14) currently lists specific loan documentation requirements that, at a minimum, must be maintained by a savings bank to comply with the rule. While the documents listed are generally appropriate and should be used as a guideline for prudent lending, a rigid requirement that all documents listed be present for each loan is too restrictive and does not necessarily address all safety and soundness concerns. Currently, if an institution is missing any of the documents required by this section, it is technically in violation of the rule, even if the safety and soundness intent of the rule has been satisfied. Conversely, safety and soundness concerns may, in some cases, necessitate different or additional documentation beyond the documents listed in this section. For example, sec.77.31(a)(3) requires a financial statement from the borrower for all loans, ostensibly to justify the borrower's willingness and ability to repay the loan. However, the borrower's ability and willingness to repay a consumer or home loan may be better demonstrated with a verification of employment (not currently required) and a satisfactory credit report, rather than a financial statement. With the expanded movement toward electronic banking and other technological advances, there is an increased industry need for flexibility to use alternative documentation criteria as long as safety and soundness standards are met. The adopted amendment would require that the board of directors of each savings bank establish written policies for prudent underwriting and documentation standards consistent with safety and soundness. Section 77.31(a) sets forth criteria to be considered in such policies paralleling federal interagency standards for safety and soundness in all federally insured depository institutions. The policies and procedures established by the savings bank will be reviewed during each regular examination for their adequacy and appropriateness. No comments were received regarding the amended section. The amendment is adopted under Texas Civil Statutes, Article 342-1.013, which provide the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 13, 1996. TRD-9618290 James L. Pledger Commissioner Texas Savings and Loan Department Effective date: January 7, 1997 Proposal publication date: November 12, 1996 For further information, please call: (512) 475-1350 CHAPTER 79.Miscellaneous Fees and Charges 7 TAC sec.79.99 The Finance Commission of Texas adopts an amendment to sec.79.99, regarding fees for reorganization, merger, and consolidation of a state savings bank, without changes to the proposed text as published in the November 12, 1996, issue of the Texas Register (21 TexReg 11037). This section currently establishes the application fee for reorganizations, mergers and consolidations involving state savings banks. In recent discussions regarding the ability of national banks to convert to a state savings bank charter, the application and approval process for savings bank for reorganizations, mergers, conversions and consolidations came into issue. The Office of the Comptroller of the Currency (OCC) rules relating to authority of national banks to convert to another type of charter require reciprocity in state law for conversions, reorganizations, mergers and consolidations. Specifically, 12 U.S.C. sec.214(c) provides that: "No conversion of a national banking association into a State bank . . . shall take place . . . unless under the laws of the State in which such national banking association is located State banks may without approval by any State authority convert into and merge or consolidate with national banking associations under limitations or conditions no more restrictive than those contained in sec.214a with respect to the conversion of a national bank into, or merger or consolidation of a national bank with, a State bank under a State charter." Although this section of the Department's regulations applies all types of mergers and reorganizations, it is the Department's policy that there should not be regulatory or institutional barriers to allowing institutions to conduct their business through whatever type of charter they choose. This policy position is consistent with the cross industry mergers and acquisitions legislation adopted by the 74th Legislature. Likewise, the Department does not wish its regulations to hinder other types of financial institutions from converting to a state savings bank charter. Therefore, in order to enable national banks to convert to a state savings bank charter, the Department concluded that it was necessary amend its regulations relating to merger and reorganization fees to eliminate any conflict with sec.214. Incidental to this amendment, similar amendments related to reorganizations, conversions, mergers and consolidations and the application fees related to such transactions are being adopted since those issues are likewise addressed by sec.214(c). No comments were received regarding the amended section. The amendment is adopted under Texas Civil Statutes, Article 342-1.013, which provide the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same. The amendment is adopted under Texas Civil Statutes, Article 342-1.013, which provide the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 13, 1996. TRD-9618288 James L. Pledger Commissioner Texas Savings and Loan Department Effective date: January 7, 1997 Proposal publication date: November 12, 1996 For further information, please call: (512) 475-1350 7 TAC sec.79.104 The Finance Commission of Texas adopts the repeal of sec.79.104, regarding the fee for conversion from a state savings bank to another financial institution charter, without changes to the proposed text as published in the November 12, 1996, issue of the Texas Register (21 TexReg 11038). This section currently establishes the application fee for conversions by state savings banks to another type of financial institution charter. In recent discussions regarding the ability of national banks to convert to a state savings bank charter, the application and approval process for savings bank for reorganizations, mergers, conversions and consolidations came into issue. The Office of the Comptroller of the Currency (OCC) rules relating to authority of national banks to convert to another type of charter require reciprocity in state law for conversions, reorganizations, mergers and consolidations. Specifically, 12 U.S.C. sec.214(c) provides that: "No conversion of a national banking association into a State bank . . . shall take place . . . unless under the laws of the State in which such national banking association is located State banks may without approval by any State authority convert into and merge or consolidate with national banking associations under limitations or conditions no more restrictive than those contained in sec.214a with respect to the conversion of a national bank into, or merger or consolidation of a national bank with, a State bank under a State charter." It is the Department's policy that there should not be regulatory or institutional barriers to allowing institutions to conduct their business through whatever type of charter they choose. This policy position is consistent with the cross industry mergers and acquisitions legislation adopted by the 74th Legislature. Likewise, the Department does not wish its regulations to hinder other types of financial institutions from converting to a state savings bank charter. Therefore, in order to enable national banks to convert to a state savings bank charter, the Department concluded that it was necessary amend its regulations relating to fees for conversion to another type of financial institution charter to eliminate any conflict with sec.214. Incidental to this amendment, similar amendments related to reorganizations, conversions, mergers and consolidations and the application fees related to such transactions are being adopted since those issues are likewise addressed by sec.214(c). No comments were received regarding the repeal. The repeal is adopted under Texas Civil Statutes, Article 342-1.013, which provide the Finance Commission of Texas with the authority to promulgate general rules and regulations not inconsistent with the constitution and statutes of the state and, from time to time, to amend same. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 13, 1996. TRD-9618287 James L. Pledger Commissioner Texas Savings and Loan Department Effective date: January 7, 1997 Proposal publication date: November 12, 1996 For further information, please call: (512) 475-1350 TITLE 16. ECONOMIC REGULATION PART II. Public Utility Commission of Texas CHAPTER 23. Substantive Rules Records and Reports 23 TAC sec.23.11 The Public Utility Commission of Texas adopt an amendment to Substantive Rule sec.23.11, relating to General Reports, with changes to the proposed text as published in the September 3, 1996, issue of the Texas Register (21 Tex Reg 8367). The proposed amendment will implement the requirement of sec.19, S.B. 83, 73rd Leg., R.S. (1993) (S.B. 83) that the commission, as well as the Office of the Attorney General and the Railroad Commission, "develop and maintain systems to publicly monitor and verify state agency rates regulated by each of those commissions." The amendment also rearranges the other subsections of sec.23.11; the only change to the text of the existing subsections is changing references to those sections in what will be subsection (q). A public hearing was held at commission offices on October 7, 1996. Commentors at the public hearing represented Texas Statewide Telephone Cooperative, Inc. (TSTCI), Texas Electric Cooperatives (TEC), AT&T Communications of the Southwest, Inc. (AT&T), and the Office of the Attorney General (OAG). No commenter suggested that no rule need be adopted. At the public hearing, TSTCI pointed out that S.B. 83 was passed before Public Utility Regulatory Act of 1995, Art. 1446c-0 (Vernon Supp. 1996) (PURA 95). Section 3.213(j)(1)(A) of PURA 1995 authorizes the commission to permit small incumbent local exchanges (SLECs) to submit reports which are less burdensome and complex than may be required of other utilities. TSTCI stated that copies of actual bills would provide all of the information required by the rule (except, possibly, the Universal Service Order Code) and requested that small utilities be permitted to file those copies, and the requirement of electronic filing be waived. TSTCI also requested an automatic waiver of the first report, to give SLECs more time to prepare to generate the reports. In the alternative to those proposals, TSTCI requested that small utilities be required to file these reports only after the larger companies had successfully implemented their own programs. TEC also requested that utilities not be required to produce any new information just for these reports. OAG recommended that the rule be left as proposed, except for changes recommended in its written comments. Written comments were received from AT&T the Building Energy Systems Program of the Center for Energy Studies of the University of Texas at Austin (BESP); Central Power & Light Company, Southwestern Electric Power Company, and West Texas Utilities Company (CSW); Houston Lighting & Power Co. (HL&P); GTE Southwest, Inc. (GTE); Texas Utilities Electric Company (TUEC); TEC; and OAG. AT&T remarked that changing its billing system to provide the information which the rule requires would be expensive, and asked that a good faith effort be acceptable. It also argued that because the commission does not have authority under PURA 1995 to regulate the rates of holders of Certificates of Authority (COAs) and Service Provider Certificates of Operating Authority (SPCOAs), under S.B. 83's statement that the purpose of the legislation was to "develop and maintain systems to publicly monitor and verify state agency rates regulated by" the commission, the commission had no authority to require reports from COAs and SPCOAs. In addition, it argued that Section 3.051(s)(1) of PURA 1995 explicitly restricts the authority of the commission, not including the reporting required by the rule. BESP stated that different utilities use different account names for a given agency, and suggested that the reports use the 3-digit agency code number designated by the Comptroller, as an identifier field in subsection (h)(5)(B), and that an appendix to the rule provide a list of those numbers. It suggested that subsection (h)(5)(B)(xvi)-(xviii) specify that the units are kilowatts (kW); that if, as appears, "Metered Demand" is simply the product of "Demand Meter Multiplier" and "Metered Demand," that should be stated explicitly; and that what is included in "Base Revenue" be more fully specified. GTE commented that semi-annual reports were burdensome, and proposed annual reports. TEC requested that utilities not be required to produce any new information just for these reports. It suggested that rather than having some items be required "if available," that the phrase "if available for all of the following categories" be added to subsection (h)(5)(B). It also noted that some service is provided to remote locations without "an address in the normal sense of the word," so that item (h)(6)(B)(iv) asks for too much. TUEC and CSW generally supported the proposed rule, and did not suggest any changes. OAG suggested that the commission remove from subsection (h)(7) authority for utilities to pursue remedies under the Public Information Act. The commission agrees, and has made that change. OAG substantially agreed with AT&T about the limits of commission jurisdiction, and suggested that reports be required of utilities only in their capacity as local service providers. The commission agrees, and has made that change. OAG suggested that no specific section within OAG be named in subsections (h)(6)(A) and (7). The commission agrees, and has made that change. OAG suggests that the rule make clearer that the reporting dates for these reports are controlled by subsections (h)(5)(A) and (6)(A), not the generic dates stated in subsection (b)(a) and (s). Subsection (b) states that the dates specified in that section apply "unless otherwise specified in this section." No change was made. In further written comments, submitted after the public hearing, OAG remarked that TSTCI had not provided enough information to assess its proposal, and that, contrary to TSTCI's implication, a utility could have but a single state agency account but that agency could buy a large amount of service from the utility: the cost to the utility of preparing a report for a single customer does not necessarily match the value to the state of knowing about that agency's bill from that utility. OAG recommended that TEC's difficulty about account addresses be resolved by changing the name of item (h)(6)(B)(iv) to "Service Location." That change has been made. OAG noted that the proposed rule does not provide for reporting the Power Cost Recovery Factor, an item on most electric utility bills. The three items OAG proposed have been added, as items (xxvii)-(xxix); what had been items (xxvii)-(xxxi) have been appropriately renumbered. All comments submitted, including those not specifically referenced herein, were fully considered by the commission. This amendment is proposed under the Public Utility Regulatory Act of 1995, sec.1.101, S.B. 319, 74th Leg., R.S. 1995, which provides the Public Utility Commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules of practice and procedure; and specifically, in order to implement sec.19, S.B. 83, 73rd Leg., R.S. (1993). Cross Index to Statutes: PURA sec.sec.1.101; sec.19, S.B. 83, 73rd Leg., R.S. (1993). sec.23.11 General Reports. (a) Who shall file. The recordkeeping, reporting, and filing requirements listed in this section shall apply to all public utilities operating in the State of Texas, excluding municipally owned utilities, unless otherwise specified. In this section, the term "utility," insofar as it relates to telecommunications utilities, shall refer to dominant carriers. Moreover, the provisions of this section are applicable to all service provided by such carriers. (b) Fuel cost and use information. Copies of all presently effective and future fuel purchase or sale contracts shall be available for examination or filed with the commission on request. Each generating electric utility, including municipally owned generating electric utilities, shall file monthly fuel reports on forms prescribed by the commission. (c) Relationships with affiliates. Copies of contracts or arrangements between any utility and any affiliated interest shall be filed with the commission on request. If such contract or arrangement is not in writing, it shall be reduced to writing. The requirements of this subsection are not satisfied by the filing of an earnings report. The following information shall be reported annually: (1) a narrative which details the names of each affiliated interest as defined in sec.23.3 of this title (relating to Definitions), and an organizational chart showing the relationship of each affiliated interest to the utility; and (2) the contract amount for each cash and non-cash transaction with each affiliated interest including, but not limited to, payments for costs of any goods and services, or any property, right, or thing, or for interest expense. These transactions shall be categorized by affiliated interest and by nature of the transaction. A brief description of each good and service shall be provided by affiliated interest. (d) Payments, compensation, and other expenditures. An annual report shall be filed with the commission providing information for each of the following classes of payments, compensation (other than salary or wages subject to the withholding of federal income tax) and expenditures made relating to matters in Texas, and detailing (by payee) each expenditure (and for the purposes of this rule any series of expenditures) made to a single payee exceeding $250 for: (1) business gifts and entertainment; (2) institutional, consumption-inducing, and other advertising expenses; (3) public relations expenses; (4) legislative matters, including advocacy before any legislative body; (5) representation before any governmental agency or body, including municipalities; (6) legal expenses not accounted for in other categories of this subsection; (7) charitable, civic, religious, and political contributions and donations; (8) all dues or membership fees paid, including an identification of that portion of those dues or membership fees paid to a trade association, industry group, or other organization formed to advance, or whose activities are or become primarily directed toward advancing, utility interests, which relate to activities listed in paragraphs (1)-(7) of this subsection if known following reasonable inquiry by the utility; and (9) other expenses as deemed appropriate by the commission. (e) Gross receipts assessment reporting. All utilities subject to the jurisdiction of the commission shall file a gross receipts assessment report with the state comptroller reflecting those gross receipts subject to the assessment stipulated in the Act on a form prescribed by the state comptroller. These reports shall be required on an annual basis for those companies that have elected to remit their assessment annually and on a quarterly basis for those companies that have elected to remit their assessment quarterly. Such reports and assessments shall be remitted in accordance with the Public Utility Regulatory Act, Article XII, sec.79. (f) Equal opportunity reports. (1) The term "minority group members," when used within this subsection, shall have the following meaning. (A) African-Americans; (B) American-Indians; (C) Asian-Americans; (D) Hispanic-Americans and other Americans of Hispanic origin; and (E) women. (2) Each utility that files any forms with local, state or federal governmental agencies relating to equal employment opportunities for minority group members, (e.g., EEOC Form EEO-1, FCC Form 395, RUS Form 268, etc.) shall file copies of those same completed forms with the commission, and submit copies of any other forms required to be filed which contain the same or similar information such as that addressing personnel data identifying numbers and occupations of minority group members employed by the utility, and employment goals relating thereto, if any. (3) Any additional information relating to the matters described in this subsection may be submitted at the utility's option. (4) On February 1 of each year, the commission shall submit a report summarizing the filed reports to the Texas legislature. (g) Annual report on historically underutilized businesses. (1) In this subsection, "historically underutilized business" has the same meaning as in sec.481.101, Texas Government Code, as it may be amended. (2) Every utility shall report its use of historically underutilized businesses (HUBs) to the commission on a form approved by the commission. A utility may submit the report on paper, or on paper and on a diskette (in Lotus 1-2-3 (*.wk*) or Microsoft Excel (*.xl*) format). (A) Each utility shall on or before March 31, 1996, submit to the commission a comprehensive annual report detailing its use of HUBs for October 1, 1994 - September 30, 1995, on the Initial HUB Use Report form. (B) Each Small Local Exchange Company and each electric and telephone cooperative utility shall on or before December 30, 1996, and December 30 of each year thereafter submit to the commission a comprehensive annual report detailing its use of HUBs for the four quarters ending on September 30 of the year the report is filed, on the Small Utilities HUB Report form. (C) Every utility other than those specified in subparagraph (B) of this paragraph shall on or before December 30, 1996, and December 30 of each year thereafter submit to the commission a comprehensive annual report detailing its use of HUBs for the four quarters ending on September 30 of the year the report is filed, on the Large Utilities HUB Report form. (D) Each utility wishing to report indirect HUB procurements may use the Supplemental HUB report form. (E) Each utility shall also file any other documents it believes appropriate to convey an accurate impression of its use of HUBs. (3) This subsection may not be used to discriminate against any citizen on the basis of sex, race, color, creed, or national origin. (4) This subsection does not create a new cause of action, either public or private. (h) State Agency Utility Account Information. (1) Application of subsection (h). The requirements of this subsection shall apply to: (A) any electric utility, including a municipally-owned electric utility; and, (B) any certificated telecommunications utility. (2) Definitions. The following words and terms, when used in this subsection, shall have the following meanings, unless the context clearly indicates otherwise. Center - the General Services Commission or its designee. Certificated telecommunications utility - any telecommunications utility which is a holder of a certificate of convenience of necessity, a certificate of operating authority, or a service provider certificate of operating authority. Electric utility - that definition given in the Public Utility Regulatory Act of 1995, Title II, Subtitle A, sec.2.0011. State agency - (A) any board, commission, department, office, or other agency in the executive branch of state government that is created by the constitution or a statute of the state; (B) an institution of higher education as defined by Section 61.003, Education Code, other than a public junior college; (C) the legislature or a legislative agency; or (D) the Supreme Court of Texas, the Court of Criminal Appeals of Texas, a court of civil appeals, a state judicial agency, or the State Bar of Texas. (3) A utility shall provide the information required in paragraphs (5) and (6) of this subsection for each state agency account in the prescribed form and medium. The utility shall obtain from the center a copy of the field layouts and electronic format that the utility shall use. The center shall notify the utility of any changes to the field layouts and electronic format with sufficient time for the utility to submit the information required by this subsection in a timely manner. Such form and medium must make the reports easy to compile and analyze in a manner which is not unreasonably costly, and to the extent possible, the center will accommodate the utilities' electronic formats. (4) A utility shall retain all billing records for each state agency account for at least four years from the billing date, notwithstanding any other commission rule relating to the retention of billing records that may provide for a shorter retention period. (5) An electric utility shall: (A) each year file the monthly billing information for each state agency account required by this subsection within 45 days after the end of the reporting period for the six months ending with the February billing period and for the six months ending with the August billing period. The report for the six months ending with the August, 1996, billing period shall be filed no later than the effective date of this subsection, or 100 days after September 30, 1996, whichever is later; (B) provide in the prescribed form the following information for each state agency account: (i) Utility Name: name of the utility providing service; (ii) Account Name: name of the state agency receiving service from the utility; (iii) Account Number; (iv) Account Address: the address of the facility being served by the utility, or, if that is not available, the service location; (v) SIC Code: Standard Industrial Code number applicable to facilities served at the account, if available; (vi) Account Description: descriptive information available to the utility regarding the nature of the facilities served at the account, (e.g., office building, traffic signal, etc.) if available; (vii) Rate Class: name of the rate class under which service is provided (e.g., Residential, General Service, Highway Safety Lighting, etc.); (viii) Rate Code: the code number used by the utility to identify the rate class under which service is provided; (ix) Service Voltage: the specific service voltage (e.g., 480 volts, 12,470, 69,000, etc.) if available, otherwise provide general voltage level (e.g., secondary, primary, transmission); (x) Read Date: the date on which the meter was read during the billing period; (xi) Kilowatt-Hour Meter Number: the serial number for the kilowatt-hour meter; (xii) Kilowatt-Hour Multiplier: the multiplier used to determine kilowatt-hour consumption based on the meter reading; (xiii) Monthly kWh: the number of kilowatt-hours used for billing purposes; (xiv) Demand Meter Number: the serial number for the demand meter if different from that of the kilowatt-hour meter; (xv) Demand Meter Multiplier: the multiplier used to determine demand based on the meter reading; (xvi) Demand Reading: the reading taken from the demand meter, stated in kilowatts or kilovolt-amperes; (xvii) Billing Demand: the demand amount used for billing purposes, in kilowatts or kilovolt-amperes; (xviii) Metered Demand: the demand amount measured during the billing period, stated in kilowatts or kilovolt-amperes; (xix) KVAR: reactive power measurement for the billing period, if available; (xx) Power Factor: the ratio of real power (kW) to apparent power (kVa), if available; (xxi) Customer Revenue: the portion of the bill related to the monthly customer charge or facilities charge, if available; (xxii) Power Cost Recovery Factor: the PCRF rate for the period that is assessed based on energy usage; the PCRF rate for the period that is assessed based on demand (if applicable); and the total PCRF charge for the period; (xxiii) Energy Revenue: the portion of the bill related to the monthly energy charge(s), if available; (xxiv) Demand Revenue: the portion of the bill related to the monthly demand charge(s), if available; (xxv) Base Revenue: the portion of the bill related to the non-fuel charges, including customer, energy, and demand charges, if available; (xxvi) Fuel Revenue: the portion of the bill related to fuel and/or purchased power; (xxvii) Other Revenue: the portion of the bill related to taxes or other miscellaneous charges; (xxviii) Other Charges/Credits: the amount of any non- recurring charges or other credits, such as fuel credits and margin credits; (xxix) Explanation: an explanation of the nature of the charge/credit included in Other Charges/Credits; (xxx) Total Revenue: the total monthly bill, including base, fuel, and other charges; (xxxi) Load Factor: the ratio of the average demand during the billing period to the maximum demand; and (xxxii) Cost Per Kilowatt-Hour: the total cost during the billing period divided by the number of kilowatt-hours. (C) provide the information required by this subsection to the center by electronic transfer, if feasible, or, otherwise, by diskette. Only in cases of extreme undue hardship will it be permissible for a utility to provide the information in paper documents. (6) Each certificated telecommunications utility in its capacity as local service provider shall: (A) each year file the information for each state agency account required by this subsection within 45 days after the end of the reporting period for the six months ending with the February billing period and for the six months ending with the August billing period. The report for the six months ending with the August 1996 billing period shall be filed no later than the effective date of this subsection, or 100 days after September 30, 1996, whichever is later; except that a utility with fewer than 31,000 access lines may request a waiver from the commission for the August billing period report, and the utility shall provide the information due in August with its February report. The commission may grant the waiver for the August billing period report if the waiver request is not opposed by the Office of the Attorney General; (B) provide in the prescribed form the following information for each state agency account: (i) Utility Name: name of the utility providing service; (ii) Account Name: name of the state agency receiving service from the utility; (iii) Agency Code Number, if available, or Account Number, if the agency code number is not available, or Telephone Number, if the account number is not available; (iv) Account Address: the address of the facility being served by the utility; (v) Service Code: identifying code for each service or product provided (for example, Universal Service Order Code); (vi) Service Description: each service code should have a separate description; (vii) Quantity: the number of units of each product or service purchased; (viii) Unit Rate: the rate charged for each unit of each service or product listed; and (ix) Total Price: the total amount charged for each service or product listed; and (C) provide the information required by this subsection to the center by electronic transfer, if feasible, or, otherwise, by diskette. Only in cases of extreme undue hardship will it be permissible for a utility to provide the information in paper documents. (7) Information provided pursuant to this subsection shall be subject to any protections of the Public Information Act, Tex. Government Code, Chapter 552. Any request for information required by this subsection shall be filed with the Office of the Attorney General or its designee. (8) The commission, utilities, and the Office of the Attorney General's designee, as well as representatives of interested state agencies, shall continue to evaluate the effectiveness and efficiency of the public monitoring and verification system for state agency customers provided in this subsection. (9) A utility shall make a good faith effort to provide all the information required by this subsection. It is a violation of this subsection for any information to be omitted from the report unless a good faith reason exists for less than full compliance. Examples of good faith reasons for not providing a complete report include: technical limitations that cannot be corrected without undue expense, unavailability of the particular information on a utility's billing system or database, information that cannot reasonably be made available in the form requested, waiver by commission order, or written waiver by the Office of the Attorney General or his or her designee. Unless otherwise challenged in a complaint proceeding by the Office of the Attorney General as set forth herein, a utility is presumed to have made a good faith effort to provide the required information and is not required to seek any type of advance waiver. In the event a utility does not provide a complete report, the Office of the Attorney General may file a complaint with the commission. In any such complaint proceeding, the utility shall have the burden of showing the omission was in good faith. (i) Service quality reports. Service quality reports shall be submitted quarterly on a form prescribed by the commission. (j) Research and development reports. Research and development reports shall be submitted annually on a form prescribed by the commission. (k) Annual earnings report. Each utility shall report its annual earnings on forms prescribed by the commission as set out sec.23.12 of this title, (relating to Financial Records and Reports). (l) Special and additional reports. Each utility, including municipally owned utilities, shall report on forms prescribed by the commission special and additional information as requested which relates to the operation of the business of the utility. (m) Initial reporting. Unless otherwise specified in this section, periodic reporting (quarterly, annual) shall commence with an initial filing, such that: (1) the initial quarterly report shall reflect the transactions and conditions of the utility for the most recent fiscal quarter ending on or prior to April 30, 1976; and (2) the initial annual report shall reflect the transactions and conditions of the utility for the most recent fiscal year ending on or prior to April 30, 1976. All initial reports shall, unless otherwise specified in this section, be filed within 60 days after issuance of commission instructions or forms. (n) Report attestation. All reports submitted to the commission shall be attested to by an officer or manager of the utility under whose direction the report is prepared, or if under trust or receivership, by the receiver or a duly authorized person, or if not incorporated, by the proprietor, manager, superintendent, or other official in responsible charge of the utility's operation. (o) Report amendments. Corrections of reports resulting from new information or errors shall be filed on a form prescribed by the commission. (p) Information omitted from reports. The commission may waive the reporting of any information required in those sections if it determines that it is either impractical or unduly burdensome on any utility to furnish the requested information. If any such information is omitted by permission of the commission, a written explanation of the omission must be stated in the report. (q) Due dates of reports. All periodic reports must be received by the commission on or before the following due dates unless otherwise specified in this section. (1) Monthly reports: 45 days after the end of the reported period. (2) Quarterly reports other than shareholder reports: 45 days after the end of the reported period. (3) Annual earnings report: May 15 of each year. (4) Shareholder annual reports: seven days from the date of mailing the same to shareholders. (5) Securities and Exchange Commission Filings: 15 days from the initial filing date with the Securities and Exchange Commission. (6) Special or additional reports: as may be prescribed by the commission. (7) Annual reports required by subsections (c)-(e) of this section shall be due June 1 of each year and shall reflect the transactions for the most recent calendar year. (8) Reports required by subsection (f) of this section shall be due at the same time that filings are made with the respective governmental agency. (9) Periodic Certificate of Operating Authority report: Due as set forth in the commission order granting the certificate. (r) Penalty for refusal to file on time. In addition to penalties prescribed by law, the commission may disallow for rate making purposes the costs related to the activities for which information was requested and not timely filed. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 17, 1996. TRD-9618316 Paula Mueller Secretary of the Commission Public Utility Commission of Texas Effective date: January 7,1996 Proposal publication date: September 3, 1996 For further information, please call: (512) 936-7162 TITLE 22. EXAMINING BOARDS PART XXIII. Texas Real Estate Commission CHAPTER 534.General Administration 22 TAC sec.534.1 The Texas Real Estate Commission adopts an amendment to sec.534.1, concerning charges for copies of public records, without changes to the proposed text as published in the October 15, 1996, issue of the Texas Register (21 TexReg 10152 ). The amendment conforms the section with recent amendments to the Public Information Act, Government Code, Chapter 552, clarifying that the commission's charges for copies of public information will be based on the charges established by the General Services Commission (GSC), unless the commission has either obtained a waiver from GSC permitting greater actual charges to be imposed, or has waived the charge because the cost of collecting the charge would exceed the amount of the charge or because waiver of the charge would be in the public interest. No comments were received on the proposal. The amendment is adopted under Texas Civil Statutes, Article 6573a, sec.5(h), which authorize the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 17, 1996. TRD-9618301 Mark A. Moseley General Counsel Texas Real Estate Commission Effective date: January 7, 1997 Proposal publication date: October 15, 1996 For further information, please call: (512) 465-3900 CHAPTER 535.Provisions of the Real Estate License Act Education, Experience, Educational Programs, Time Periods and Type of License 22 TAC sec.535.61 The Texas Real Estate Commission adopts an amendment to sec.535.61, concerning examinations, without changes to the proposed text as published in the November 15, 1996, issue of the Texas Register (21 TexReg 11157). The amendment clarifies that examinations administered for the commission by a testing service will be conducted in the manner required by the section unless the contract between the service and the commission provides otherwise. The amendment also establishes grounds to discipline licensees or applicants who compromise the confidentiality of the contents of an examination by revealing specific questions and answers to other applicants or to any other person for the purpose of providing the information to other applicants. Adoption of the amendment is necessary to clarify examination procedures and to ensure the integrity of the examination process. No comments were received regarding the proposed amendment. The amendment is adopted under Texas Civil Statutes, Article 6573a, sec.5(h), which authorize the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 17, 1996. TRD-9618302 Mark A. Moseley General Counsel Texas Real Estate Commission Effective date: January 7, 1997 Proposal publication date: November 15, 1996 For further information, please call: (512) 465-3900 Mandatory Continuing Education 22 TAC sec.535.71 The Texas Real Estate Commission adopts an amendment to sec.535.71, concerning approval of mandatory continuing education (MCE) courses, without changes to the proposed text as published in the November 15, 1996, issue of the Texas Register (21 TexReg 11158 ). The amendment broadens the scope of MCE courses which may be approved by the commission. The amendment permits MCE providers to offer courses on general topics which increase or support the licensee's development of skill and competence. Courses related to technology, such as the use of computers, also may be approved if they are primarily devoted to the application of technology to the practice of the licensee. Adoption of the amendment is necessary to increase variety and scope of MCE courses for real estate licensees. One comment was received in support of the proposed amendment. The amendment is adopted under Texas Civil Statutes, Article 6573a, sec.5(h), which authorize the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 17, 1996. TRD-9618300 Mark A. Moseley General Counsel Texas Real Estate Commission Effective date: January 7, 1997 Proposal publication date: November 15, 1996 For further information, please call: (512) 465-3900 TITLE 34. PUBLIC FINANCE PART I. Texas Department of Insurance CHAPTER 7. Corporate and Financial Regulation SUBCHAPTER A. Examination and Financial Analysis 28 TAC sec.7.66 The Commissioner of Insurance adopts new sec.7.66 with changes to the proposed text as published in the October 29, 1996, issue of the Texas Register (21 TexReg 10654). A public hearing was requested and held on December 9, 1996. The new section concerns annual and quarterly statement blanks, other reporting forms, diskettes and instructions to be used by insurers and certain other entities regulated by the Texas Department of Insurance when reporting their financial condition and business operations and activities, and the requirement to file such completed statement blanks and other reporting forms, including diskettes. These statement blanks, other reporting forms, and diskettes are required by statute for reporting, in 1997, the financial condition and business operations and activities conducted during the 1996 and 1997 calendar years. This information provided is necessary for the department to monitor the solvency, business activities and statutory compliance of the insurers and other entities regulated by the department. The new section replaces old sec.7.66, concerning the adoption of the 1987 annual statement filings which was repealed in the October 15, 1996, issue of the Texas Register (21 Tex Reg 10212). For small businesses and larger businesses, the cost of compliance with this section will be the administrative expense in completing the statement blanks, other reporting forms, and diskette filings. The cost of completing the diskette filings depends on the method of compliance selected by the regulated entity. If a regulated entity purchases electronic data processing equipment and prepares diskettes internally, the anticipated maximum cost of compliance would be $7,500 for the first year, and $1,200 for each of the next four years. If a regulated entity engages an independent consultant or vendor to prepare diskettes adequate to comply with the requirements of this section, the anticipated possible economic cost of compliance would be between $600 and $3,500 for each year of the first five years that the proposed section is in effect, with the exact cost depending on the fee schedule of the independent consultant or vendor engaged by the regulated entity. On the basis of cost per hour of labor, there is no expected difference in cost of compliance between small businesses and larger businesses affected by this section. The new section defines terms relevant to the statement blanks and reporting forms; provides the dates by which certain reports are to be filed; and adopts by reference the annual and quarterly statement blanks, other reporting forms, and instructions for reporting the financial condition and business operations and activities; and requires insurance companies and certain other regulated entities to file such annual and quarterly statements and other reporting forms with the department and/or the National Association of Insurance Commissioners as directed. The required documents will provide financial information to the public and regulatory agencies, and will be used by the department to monitor the financial condition of insurers and other regulated entities licensed in Texas to assure financial solvency and compliance with applicable laws and accounting requirements. The annual and quarterly statement blanks, other reporting forms, and manuals which are adopted by this section have been filed with the Office of the Secretary of State, Texas Register Division. Copies are available for inspection in the office of the Financial Monitoring Activity of the Texas Department of Insurance, William P. Hobby State Office Building, 333 Guadalupe, Building 3, Third Floor, Austin, Texas. The Commissioner of Insurance, in adopting the section, changed the date for filing the Long-Term Care Experience Reporting Forms adopted in sec.7.66(d)(3)(D) from May 1, 1997, to April 1, 1997, and changed the requirement for filing the Fraternal Interest Sensitive Life Insurance Products Report with the department and the NAIC to filing it only with the NAIC. This required deleting sec.7.66(e)(1)(E) and adding a subparagraph (D) to sec.7.66(e)(3). No written comments were received. A commenter at the hearing expressed concern over the cost of completing the forms adopted by the section to insurers. The department is mindful of the cost of providing the information and requests insurers and other regulated entities to provide only information that is necessary to carry out the department's statutory duties. The Insurance Alliance of America testified at the public hearing on the proposed section. The new section is adopted under the Insurance Code, Articles 1.11, 1.10, 3.07, 3.20-1, 3.27-2, 6.11, 6.12, 8.07, 8.08, 8.21, 8.24, 9.22, 9.47, 10.30, 11.06, 11.19, 14.15, 14.39, 15.15, 15.16, 16.18, 16.24, 17.22, 17.25, 18.12, 19.08, 20.02, 20A.10, 20A.22, 21.39, 21.43, 21.54, 22.06, 23.02, 23.26, 21.52F and 1.03A. Article 1.11 authorizes the commissioner to make changes in the forms of the annual statements required of insurance companies of any kind, as shall seem best adapted to elicit a true exhibit of their condition and methods of transacting business, and requires certain insurers to make filings with the National Association of Insurance Commissioners. Article 1.10(9), requires the department to furnish the statement blanks and other reporting forms necessary for companies to comply with the filing requirements. Articles 3.07, 3.20-1, 3.27-2, 6.11, 6.12, 8.07, 8.08, 8.21, 8.24, 9.22, 9.47, 10.30, 11.06, 11.19, 14.15, 14.39, 15.15, 15.16, 16.18, 16.24, 17.22, 17.25, 18.12, 19.08, 20.02, 20A.10, 20A.22, 21.54, 22.06, 23.02, and 23.26, require the filing of financial reports and other information by insurers and other regulated entities, and specify particular rule-making authority of the commissioner relating to those insurers and other regulated entities. Article 21.39 requires insurers to establish adequate reserves and provides for the adoption of each current formula for establishing reserves applicable to each line of insurance. Article 21.43 provides the conditions under which foreign insurers are permitted to do business in this state and requires foreign insurers to comply with the provisions of the Insurance Code. Article 21.52F authorizes the commissioner to adopt rules to implement the regulation of nonprofit health corporations holding a certificate of authority under the articles. Article 1.03A provides that the commissioner may adopt rules for the conduct and execution of the duties and functions of the department as authorized by statute for general and uniform application. sec.7.66. Requirements for Filing the 1996 Annual and 1997 Quarterly Statements, Other Reporting Forms, and Diskettes. (a) Scope. This section provides insurers and other regulated entities with the filing requirements for the 1996 annual statement, 1997 quarterly statements, other reporting forms, and diskettes necessary to report information concerning the financial condition and business operations and activities of insurers. This section applies to all insurers and other regulated entities authorized to do the business of insurance in this state and includes, but is not limited to, life insurers; accident insurers; life and accident insurers; life and health insurers; accident and health insurers; life, accident and health insurers; mutual life insurers; stipulated premium insurers; group hospital service corporations; fire insurers; fire and marine insurers; general casualty insurers; fire and casualty insurers; mutual insurers other than life; county mutual insurers; Lloyd's plans; reciprocal and inter-insurance exchanges; domestic risk retention groups; domestic joint underwriting associations; title insurers; fraternal benefit societies; local mutual aid associations; statewide mutual assessment companies; mutual burial associations; exempt associations; farm mutual insurers; health maintenance organizations; nonprofit health corporations; and nonprofit legal services corporations. The commissioner of insurance adopts by reference the 1996 annual and 1997 quarterly statement blanks, instruction manuals, and other reporting forms specified in this section. The annual and quarterly statement blanks and other reporting forms are available from the Texas Department of Insurance, Financial Monitoring Activity, Mail Code 303-1A, P. O. Box 149099, Austin, Texas 78714-9099. Insurers and other regulated entities shall properly report to the Texas Department of Insurance and the National Association of Insurance Commissioners (NAIC) completing the appropriate annual and quarterly statement blanks, prepared with laser quality print (hand written copies must be prepared legibly using black ink), other reporting forms, and machine-readable diskettes following the applicable instructions as outlined in subsections (c) through (l) of this section. (b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. Association edition - Blanks and forms promulgated by the National Association of Insurance Commissioners. Commissioner - The commissioner of insurance appointed under the Insurance Code, Article 1.09. Department - The Texas Department of Insurance. Insurer - A person or business entity legally organized in and authorized by its domiciliary jurisdiction to do the business of insurance. NAIC - The National Association of Insurance Commissioners. Texas edition - Blanks and forms promulgated by the commissioner of insurance. (c) Filing requirements for life, accident and health insurers. Each life, life and accident, life and health, accident and health, mutual life, or life, accident and health insurance company, stipulated premium insurance company, and group hospital services corporation shall complete and file the following blanks, forms, and diskettes for the 1996 calendar year and the first three quarters of the 1997 calendar year. The forms, reports and diskettes identified in paragraphs (1)(A)-(J); (2)(A),(B); and (3)(A)-(D) of this subsection shall be completed in accordance with the current NAIC Annual Statement Instructions, Life, Accident and Health, except as provided by paragraph (4) of this subsection. The diskettes identified in paragraph (3)(E) and (F) shall be completed in accordance with the current NAIC Annual Statement Diskette Filing Specifications-Life/Health, except as provided by paragraph (4) of this subsection. (1) Reports to be filed both with the department and the NAIC include the following: (A) Annual Statement (association edition, Form 1 or Form 11, with a blue colored cover made of minimum 65 lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997); (B) Annual Statement of the Separate Accounts (association edition, Form 1-S, with a green colored cover made of minimum 65lb. paper) (required of companies maintaining separate accounts), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997); (C) Trusteed Surplus Statement (association edition, Life, Accident and Health Supplement) (required of the U. S. branch of an alien insurer), 9 inch x 14 inch size to be filed on or before March 1, May 15, August 15, and November 15, 1997; (D) Management's Discussion and Analysis (a narrative document setting forth information which enables regulators to enhance their understanding of the insurer's financial position, results of operations, changes in capital and surplus accounts and cash flow), to be filed on or before April 1, 1997 (stipulated premium insurance companies, May 1, 1997); (E) Schedule DS (association edition) (required only of companies that have included equity in the undistributed income of unconsolidated subsidiaries in its net gain/(loss) from operations), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997); (F) Life and Accident and Health Quarterly Statement (association edition) (required of companies filing Form 1), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 15, August 15, and November 15, 1997. However, a Texas stipulated premium insurance company, unless specifically requested to do so by the department, is not required to file quarterly statements with the department or the NAIC if it meets all three of the following conditions: (i) it is authorized to write only life insurance on its certificate of authority; (ii) it collected premiums in the prior calendar year of less than $1 million; and (iii) it had a profit from operations in the prior two calendar years; (G) Actuarial Opinion (the statement of a qualified actuary, setting forth his or her opinion relating to policy reserves and other actuarial items; required of all companies), to be attached to the annual statement required by paragraph (1)(A) of this subsection; (H) Combined Life, Accident and Health Annual Statement (association edition, Form 1, with a blue colored cover made of minimum 65lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 1, 1997. This form is required only for those affiliated insurers that wrote more than $35 million in direct premiums, as a group, in 1996 as defined in Schedule T of the Annual Statement; (I) Life, Health and Annuity Guaranty Association Model Act Assessment Base Reconciliation Exhibit (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997; and (J) Adjustments to the Life, Health and Annuity Guaranty Association Model Act Assessment Base Reconciliation Exhibit (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997. (2) Reports to be filed only with the department: (A) Schedule SIS, Stockholder Information Supplement (association edition) (required of domestic stock companies which have 100 or more stockholders), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997; (B) Supplemental Compensation Exhibit (association edition) 9 inch x 14 inch size, (required of Texas domestic companies only), to be filed on or before March 1, 1997 (stipulated premium companies, April 1, 1997); (C) Annual Statement (Texas edition, with a green colored cover made of minimum 65lb. paper) (required of companies writing prepaid legal business in 1996), 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997; (D) Affidavit in Lieu of Annual Statement (required of companies authorized to write prepaid legal business that did not write such business in 1996), to be filed on or before March 1, 1997; (E) Texas Overhead Assessment Form (required of Texas domestic companies only), to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997); (F) Analysis of Surplus, for life, accident and health insurers, to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997); and (G) Supplemental Investment Income Exhibit (shows percent of net investment income by type of investment, as an attachment to page ten of the annual statement as required by paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997 (stipulated premium companies, April 1, 1997). (3) Reports and diskettes to be filed only with the NAIC: (A) Officers and Directors Information (association edition) (required of companies upon their initial filing with the NAIC and to report any changes in previously filed information), to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997); (B) Credit Insurance Experience Exhibit (association edition) (required of companies writing credit business), 9 inch x 14 inch size, to be filed on or before April 1, 1997; (C) Long-Term Care Insurance Exhibit (association edition) (required of companies writing long-term care business), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997), in addition to the Long-Term Care Experience Reporting Forms included in the annual statement required by paragraph (1)(A) of this subsection; (D) Interest Sensitive Life Insurance Products Report (association edition) (required of companies writing interest sensitive products), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997 (stipulated premium insurance companies, May 1, 1997); (E) machine-readable diskettes containing computerized annual statement data (required of companies filing annual statement Form 1), to be filed on or before March 1, 1997 (stipulated premium insurance companies, April 1, 1997); (F) machine-readable diskettes containing computerized quarterly statement data (required of companies filing annual statement Form 1), to be filed on or before May 15, August 15, and November 15, 1997. However, a Texas stipulated premium insurance company, unless specifically requested to do so by the department, is not required to file diskettes with the NAIC if it meets all three of the following conditions: (i) it is authorized to write only life insurance on its certificate of authority; (ii) it collected premiums in the prior calendar year of less than $1 million; and (iii) it had a profit from operations in the prior two calendar years. (4) The following provisions shall apply to the filings required in paragraphs (1)-(3) of this subsection. (A) Texas domestic life, accident and health companies with more than $30 million in direct premiums in 1996 must establish Asset Valuation Reserves and Interest Maintenance Reserves in their financial statements in accordance with the instructions in the 1996 NAIC Annual Statement Instructions, Life, Accident and Health Companies. Texas domestic companies with $30 million or less in direct premiums may establish Asset Valuation Reserves and Interest Maintenance Reserves in their financial statements in accordance with the instructions in the 1996 NAIC Annual Statement Instructions, Life, Accident and Health Companies or they must value bonds and preferred stocks in compliance with the provisions of sec.7.16 of this title (relating to NAIC Purposes and Procedures of the Securities Valuation Office Manual) concerning companies not maintaining an Asset Valuation Reserve or Interest Maintenance Reserve. (B) The statement of actuarial opinion should follow the guidelines and standards for statements of actuarial opinion prescribed by regulation authorized by Section 3, Actuarial opinion of Reserves of the Standard Valuation Law as amended by the NAIC in December 1990, unless exempted. For those companies exempted from such regulation, instructions 1 - 12, established by the NAIC, must be applied. (C) In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, or instruction, or any specific requirement of this subsection and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this subsection shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code. (d) Requirements for property and casualty insurers. Each fire, fire and marine, general casualty, fire and casualty, county mutual insurance company, mutual insurance company other than life, Lloyd's plan, reciprocal or inter-insurance exchange, domestic risk retention group, life insurance company that is licensed to write workers' compensation, any farm mutual insurance company that filed a Form 2 for the 1995 calendar year or had with gross written premiums in 1996 as of December 31, 1996, in excess of $5,000,000, any Mexican non-life insurer licensed under any article of the Insurance Code other than or in addition to Insurance Code, Article 8.24, and domestic joint underwriting associations shall complete and file the following blanks, forms, and diskettes for the 1996 calendar year and the first three quarters of the 1997 calendar year. The forms, reports, and diskettes identified in paragraphs (1)(A)-(H); (2)(A),(B); and (3)(A)-(D) of this subsection shall be completed in accordance with the current NAIC Annual Statement Instructions, Property and Casualty, except as provided by paragraph (4) of this subsection. The diskettes identified in paragraph (3)(E) and (F) of this subsection shall be completed in accordance with the current NAIC Annual Statement Diskette Filing Specifications-Property/Casualty, except as provided by paragraph (4) of this subsection. (1) Reports to be filed both with the department and the NAIC: (A) Annual Statement (association edition, Form 2, with a yellow colored cover made of minimum 65lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997; (B) Trusteed Surplus Statement (association edition, Property and Casualty Supplement) (required of the U. S. branch of an alien insurer), 9 inch x 14 inch size to be filed on or before March 1, May 15, August 15, and November 15, 1997; (C) Management's Discussion and Analysis (a narrative document setting forth information which enables regulators to enhance their understanding of the insurer's financial position, results of operations, changes in capital and surplus accounts and cash flow), to be filed on or before April 1, 1997; (D) Financial Guaranty Insurance Exhibit (association edition) (required of companies writing financial guaranty business), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997; (E) Supplement "A" to Schedule T, Exhibit of Medical Malpractice Premiums Written (association edition) (required of companies writing medical malpractice business), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997; (F) Property and Casualty Quarterly Statement (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 15, August 15, and November 15, 1997; (G) Actuarial Opinion (the statement of a qualified actuary, setting forth his or her opinion relating to policy reserves and other actuarial items; required of all companies), to be attached to the annual statement required by paragraph (1)(A) of this subsection; and (H) Combined Property/Casualty Annual Statement (association edition, Form 2, with a yellow colored cover made of minimum 65lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 1, 1997, including the Insurance Expense Exhibit. This form is required only for those affiliated insurers that wrote more than $35 million in direct premiums, as a group, in 1996 as defined in Schedule T of the Annual Statement. (2) Reports to be filed only with the department: (A) Schedule SIS, Stockholder Information Supplement (association edition) (required of domestic stock companies which have 100 or more stockholders), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997; (B) Supplemental Compensation Exhibit (association edition) 9 inch x 14 inch size, (required of Texas domestic companies only), to be filed on or before March 1, 1997; (C) Supplemental Investment Income Exhibit (shows percent of net investment income by type of investment, as an attachment to page six of the annual statement as required by paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997; (D) Annual Statement (Texas edition, with a green colored cover made of minimum 65lb. paper) (required of companies writing prepaid legal business in 1996), 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997; (E) Affidavit in Lieu of Annual Statement (required of companies authorized to write prepaid legal business that did not write such business in 1996), to be filed on or before March 1, 1997; (F) Texas Overhead Assessment Form (required of Texas domestic companies only), to be filed on or before March 1, 1997; (G) Analysis of Surplus, for property and casualty insurers (required of all licensed companies, except Texas domestic county mutual companies), to be filed on or before March 1, 1997; (H) Supplement for County Mutuals (required of Texas domestic county mutual companies, as an attachment to page seventeen of the annual statement as required by paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997; (I) Texas Supplemental A for County Mutuals (required of Texas domestic county mutual companies, as an attachment to page nine of the annual statement as required by paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997; and (J) Form ALT/P/WC, Application for Alternative Excess Statutory Over Statement Reserves for Workers' Compensation (required of deductible plan workers' compensation writers if applying for an alternative basis of calculating the excess statutory over statement reserves for workers' compensation business), to be filed on or before January 31, 1997. (3) Reports and diskettes to be filed only with the NAIC: (A) Officers and Directors Information (association edition) (required of companies upon their initial filing with the NAIC and to report any changes in previously filed information), to be filed on or before March 1, 1997; (B) Insurance Expense Exhibit (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997; (C) Credit Insurance Experience Exhibit (association edition) (required of companies writing credit accident and/or health business), 9 inch x 14 inch size, to be filed on or before April 1, 1997; (D) Long-Term Care Experience Reporting Forms (association edition) (required of companies writing long-term care business), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997; (E) machine-readable diskettes containing computerized annual statement data, to be filed on or before March 1, 1997; and (F) machine-readable diskettes containing computerized quarterly statement data, to be filed on or before May 15, August 15, and November 15, 1997. (4) The following provisions shall apply to all filings required by paragraphs (1) - (3) of this subsection. (A) No loss reserve discounts, other than as respects fixed and determinable payments such as those emanating from workers' compensation tabular indemnity reserves and long-term disability claims for which specific segregated investments have been established, shall be allowed; provided, however, any company that claimed loss reserve discounts, other than as respects fixed and determinable payments such as those emanating from workers' compensation tabular indemnity reserves and long-term disability claims, as of December 31, 1991, shall be allowed to claim such reserve discounts at the applicable percentage. The applicable percentage for claiming such loss reserve discounts shall be 100% for 1992, 75% for 1993, 50% for 1994, 25% for 1995, 1996, 0% for 1996, 1997 and subsequent years. In no event shall the dollar amount of discounts, other than as respects fixed and determinable payments such as those emanating from workers' compensation tabular indemnity reserves and long-term disability claims, claimed as of December 31, 1991, and subject to the applicable percentage, be increased as of December 31, 1992 and thereafter. The commissioner shall have the authority to determine the appropriateness of, and may disapprove, discounts taken as respects fixed and determinable payments such as those emanating from workers' compensation tabular indemnity reserves and long-term disability claims. (B) The commissioner shall have the authority to determine the appropriateness of, and may disapprove, anticipated salvage and subrogation. (C) Since workers' compensation legislation enacted by the 71st Texas Legislature, effective January 1, 1991, has effected the pricing and loss ratios for workers' compensation business written in the State of Texas, some insurers may be exempt from establishing the entire excess of statutory reserves over statement reserves, also known as the Schedule P penalty reserve, as would otherwise be required by the NAIC Annual Statement Instructions, Property and Casualty. Specifically, Texas domestic insurers that wrote workers' compensation in Texas, but no state other than Texas, in years 1993, 1994, 1995 and 1996 and whose loss experience prior to 19941993 would require the establishment of a Schedule P penalty reserve using a loss ratio greater than 65% may calculate the reserve based on a loss ratio of 65%. The exemption herein described shall only be for the 1996 annual and 1997 interim financial statements. Reserving in this manner is intended to be consistent with the regulatory desire to attain competitive rates for workers' compensation written in Texas. (D) Insurers meeting certain eligibility criteria and not claiming the exemption provided in paragraph (4)(C) of this subsection may apply for approval of an alternative basis of calculating the Excess of Statutory Over Statement Reserve, also known as the Schedule P penalty reserve, for workers' compensation business. The application for an alternative basis for calculating this reserve applies only to workers' compensation business written pursuant to deductible plans authorized by Insurance Code, Article 5.55C. (i) Eligibility is generally available to insurers that are domiciled or commercially domiciled in Texas and that demonstrate that their standard premium, prior to application of deductible credits, written pursuant to deductible plans was at least 80% of total standard premium for all workers' compensation business for each of the years for which an alternative calculation is requested. (ii) To apply for an alternative basis of calculating the penalty reserve, an eligible insurer must complete Form ALT/P/WC, Application for Alternative Excess of Statutory Over Statement Reserve for Workers' Compensation. Forms may be obtained by writing the Financial Monitoring Activity, Texas Department of Insurance, MC 303-1A, P.O. Box 149099, Austin, Texas 78714-9099, or calling (512) 322-5002. Completed applications must be filed with the department on or before January 31, 1997. (iii) The commissioner may grant an exception or alternative to requiring the full Schedule P penalty reserve for workers' compensation business upon finding such treatment is warranted based on the insurer's application. Insurers that do not obtain the prior written approval of the department for an alternative basis of calculating the Schedule P penalty reserve as provided in the subparagraph shall calculate the penalty reserve in accordance with the current NAIC Annual Statement Instruction, Property and Casualty. (E) In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, or instruction, or any specific requirement of this section and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this section shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code. (e) Requirements for fraternal benefit societies. Each fraternal benefit society shall complete and file the following blanks, forms, and diskettes for the 1996 calendar year and the first three quarters of the 1997 calendar year. The forms, reports, and diskettes identified in paragraphs (1)(A)-(E); (2)(A),(B); and (3)(A),(B) and (D) of this subsection shall be completed in accordance with the current NAIC Annual Statement Instructions, Fraternal, except as provided by paragraph (4) of this subsection. The diskettes identified in paragraph (3)(C) of this subsection shall be completed in accordance with the current NAIC Annual Statement Diskette Filing Specifications-Fraternal, except as provided by paragraph (4) of this subsection. (1) Reports to be filed both with the department and the NAIC: (A) Annual Statement (association edition, Form 4, with a brown colored cover made of minimum 65lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997; (B) Annual Statement of the Separate Accounts (association edition, Form 1-S, with a green colored cover made of minimum 65lb. paper) (required of companies maintaining separate accounts), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997; (C) Trusteed Surplus Statement (association edition, Fraternal Supplement) (required of the U. S. branch of an alien insurer), 9 inch x 14 inch size to be filed on or before March 1, May 15, August 15, and November 15, 1997; (D) Management's Discussion and Analysis (a narrative document setting forth information which enables regulators to enhance their understanding of the insurer's financial position, results of operations, changes in capital and surplus accounts and cash flow), to be filed on or before April 1, 1997; and (E) Actuarial Opinion (the statement of a qualified actuary, setting forth his or her opinion relating to policy reserves and other actuarial items; to be filed by all companies), to be attached to the annual statement required by paragraph (1)(A) of this subsection. (2) Reports to be filed only with the department: (A) Supplemental Compensation Exhibit (association edition) 9 inch x 14 inch size, (required of Texas domestic companies only), to be filed on or before March 1, 1997; (B) Fraternal Quarterly Statement (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 15, August 15, and November 15, 1997; (C) Texas Overhead Assessment Form (required of Texas domestic companies only), to be filed on or before March 1, 1997; (D) Analysis of Surplus, for fraternal benefit societies, to be filed on or before March 1, 1997; (E) Fraternal Benefit Societies - Supplement to Valuation Report, to be filed on or before June 30, 1997; and (F) Supplemental Investment Income Exhibit (shows percent of net investment income by type of investment, as an attachment to page ten of the annual statement as required by paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997. (3) Reports and diskettes to be filed only with the NAIC: (A) Officers and Directors Information (association edition) (required of companies upon their initial filing with the NAIC and to report any changes in previously filed information), to be filed on or before March 1, 1997; (B) Long-Term Care Insurance Exhibit (association edition) (required of companies writing long-term care business), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997, in addition to the Long-Term Care Experience Reporting Forms included in the annual statement required in paragraph (1)(A) of this subsection; (C) machine-readable diskettes containing computerized annual statement data, to be filed on or before March 1, 1997; and (D) Fraternal Interest Sensitive Life Insurance Products Report (association edition) (required of companies writing interest sensitive products), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before April 1, 1997. (4) The following provisions shall apply to the filings required in paragraph (1) - (3) of this subsection. (A) Texas domestic fraternal companies with more than $30 million in direct premiums in 1996 must establish Asset Valuation Reserves and Interest Maintenance Reserves in their financial statements in accordance with the instructions in the 1996 NAIC Annual Statement Instructions Fraternal. Texas domestic fraternal companies with $30 million or less in direct premiums may establish Asset Valuation Reserves and Interest Maintenance Reserves in their financial statements in accordance with the instructions in the 1996 NAIC Annual Statement Instructions Fraternal or they must value bonds and preferred stocks in compliance with the provisions of sec.7.16 of this title (relating to NAIC Purposes and Procedures of the Securities Valuation Office Manual) concerning companies not maintaining an Asset Valuation Reserve or Interest Maintenance Reserve. (B) Since fraternals are exempted in Texas from the requirements of Section 3 Actuarial Opinion of Reserves of the Standard Valuation Law as amended by the NAIC in December 1990, the statement of actuarial opinion for fraternals should follow instructions 1 - 12, established by the NAIC. (C) In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, or instruction, or any specific requirement of this subsection and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this subsection shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code. (f) Requirements for title insurers. Each title insurance company shall complete and file the following blanks and forms for the 1996 calendar year and the first three quarters of the 1997 calendar year. The reports and forms identified in paragraphs (1)(A), (B); (2)(A), (B), and (F); and (3)(A) of this subsection shall be completed in accordance with the current NAIC Annual Statement Instructions, Title, except as otherwise provided by this subsection. The diskette identified in paragraph (3)(B) of this subsection shall be completed in accordance with the current NAIC Title Annual and Quarterly Diskette Filing Specifications, except as provided by paragraph (4) of this subsection. (1) Reports to be filed with the department and the NAIC: (A) Annual Statement (association edition, Form 9, with a salmon colored cover made of minimum 65lb. paper), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997; and (B) Management's Discussion and Analysis (a narrative document setting forth information which enables regulators to enhance their understanding of the insurer's financial position, results of operations, changes in capital and surplus accounts and cash flow), to be filed on or before April 1, 1997. (2) Reports to be filed only with the department: (A) Supplemental Compensation Exhibit (association edition), 9 inch x 14 inch size, (required of Texas domestic companies only), to be filed on or before March 1, 1997; (B) Title Quarterly Statement (association edition), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before May 15, August 15, and November 15, 1997; (C) Texas Overhead Assessment Form (required of Texas domestic companies only), to be filed on or before March 1, 1997; (D) Analysis of Surplus, for title insurers, to be filed on or before March 1, 1997; (E) Supplemental Investment Income Exhibit (shows percent of net investment income by type of investment, as an attachment to page six of the annual statement as required in paragraph (1)(A) of this subsection), to be filed on or before March 1, 1997; (F) Schedule SIS, Stockholder Information Supplement (association edition) (required of domestic stock companies which have 100 or more stockholders), either the 12 inch x 19 inch size, 11 inch x 17 inch size, or 9 inch x 14 inch size, to be filed on or before March 1, 1997. (G) Supplemental Schedule of Business Written By Agency (should include only agents which individually account for one percent or more of total premiums written), to be filed on or before April 1, 1997. (3) Reports to be filed only with the NAIC. (A) Officers and Directors Information (association edition) (required of companies upon their initial filing with the NAIC and to report any changes in previously filed information), to be filed on or before March 1, 1997. (B) machine-readable diskettes containing computerized annual statement data, to be filed on or before March 1, 1997. (4) In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, or instruction, or any specific requirement of this subsection and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this subsection shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code. (g) Requirements for health maintenance organizations. Each health maintenance organization and non-profit health corporation shall complete and file the following blanks and forms, and diskettes for the 1996 calendar year and the first three quarters of the 1997 calendar year. The forms, reports and diskettes identified in paragraphs (1)(A)-(C) and (2)(A),(B) of this subsection shall be completed in accordance with the NAIC Annual Statements Instructions, Health Maintenance Organizations. The forms, reports and diskettes identified in paragraphs (1)(A), (2)(A)-(C), (E)-(G), and (3) of this subsections shall be completed in accordance with Specific Instructions For Filing of HMO Annual Financial Statements with the Texas Department of Insurance and Specific Instructions For Filing of HMO Quarterly Financial Statements with the Texas Department of Insurance (provided by the department) shall also be used to complete the forms and reports identified in paragraphs (1)(A)-(D) of this subsection. The diskettes identified in paragraph (3) of this subsection shall be completed in accordance with the current NAIC Health Maintenance Organization Annual Diskette Filing Specifications. (1) Reports to be filed both with the department and the NAIC: (A) Annual Statement (association edition, HMO with an orange colored cover made of minimum 65lb. paper), 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997; (B) Management's Discussion and Analysis, (a narrative document setting forth information which enable regulators to enhance their understanding of the insurer's financial position, results of operations, changes in capital and surplus accounts and cash flow), to be filed on or before April 1, 1997; (C) Actuarial Opinion (the statement of a qualified actuary, setting forth his or her opinion relating to policy reserves and other actuarial items; to be filed by all health maintenance organizations), to be attached to the annual statement required by paragraph (1)(A) of this subsection; (2) Reports to be filed only with the department: (A) Supplemental Compensation Exhibit (association edition), 9 inch x 14 inch size, (required of Texas domestic companies only), to be filed on or before March 1, 1997; (B) HMO Quarterly Statement (association edition), 8 1/2 inch x 14 inch size, to be filed on or before May 15, August 15, and November 15, 1997; (C) HMO Supplement, 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997; (D) Texas Overhead Assessment Form (required of Texas domestic companies only), to be filed on or before March 1, 1997; (E) Exhibit Z , 8 1/2 inch x 14 inch size, to be filed on or before March 1, May 15, August 15, and November 15, 1997; (F) Department formatted diskettes containing annual statement data (diskettes provided by the department for entering of health maintenance organization or non-profit health corporation financial statement data), to be completed according to the instructions provided by the department and filed with the department on or before March 1, 1997; and (G) Department formatted diskettes containing quarterly statement data (diskettes provided by the department for entering of health maintenance organization or non-profit health corporation financial statement data), to be completed according to the instructions provided by the department and filed with the department on or before May 15, August 15, and November 15, 1997. (3) Reports and diskettes to be filed only with the NAIC. The machine-readable diskettes containing computerized annual statement data, must be filed on or before March 1, 1997; (4) In the event of a conflict between the Insurance Code, any existing departmental rule, form, or instruction, or any specific requirement of this subsection required in paragraphs (1)-(3), and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this subsection shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code. (h) Requirements for farm mutual insurers not subject to the provisions of subsection (d) of this section. Each farm mutual insurance company shall file the following completed blanks and forms for the 1996 calendar year with the department only: (1) Annual statement (Texas edition, with a tan colored cover made of minimum 65lb. paper), 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997; (2) Texas Overhead Assessment Form, to be filed on or before March 1, 1997; (3) Actuarial Opinion (the statement of a qualified actuary, setting forth his or her opinion relating to policy reserves and other actuarial items), to be attached to the annual statement required by paragraph (1) of this subsection, unless otherwise exempted. (i) Requirements for mutual assessment companies, mutual aid and mutual burial associations, and exempt companies. Each statewide mutual assessment company, local mutual aid association, local mutual burial association, and exempt company shall file the following completed blanks and forms for the 1996 calendar year with the department only: (1) Annual Statement (Texas edition, with an orange colored cover made of minimum 65lb. paper), 8 1/2 inch x 14 inch size, to be filed on or before April 1, 1997, provided, however, exempt companies are not required to complete lines 22, 23, 24, 25, and 26 on page 3, the special instructions at the bottom of page 3, and pages 4, 5, 6, and 7. All other pages are required; (2) Texas Overhead Assessment Form, to be filed on or before April 1, 1997; (3) Release of Contributions Form, to be filed on or before April 1, 1997; (4) 3 1/2% Chamberlain Reserve Table (Reserve Valuation), to be filed on or before April 1, 1997; (5) Reserve Summary (1956 Chamberlain Table 3 1/2%), to be filed on or before April 1, 1997; (6) Inventory of Insurance in Force by Age of Issue or Reserving Year, to be filed on or before April 1, 1997; and (7) Summary of Inventory of Insurance In Force by Age and Calculation of Net Premiums, to be filed on or before April 1, 1997. (j) Requirements for non-profit legal service corporations. Each non-profit legal service corporation shall file the following completed blanks and forms for the 1996 calendar year only with the department only; (1) Annual Statement (Texas edition, with a green colored cover made of minimum 65lb. paper), 8 1/2 inch x 14 inch size, to be filed on or before March 1, 1997; and (2) Texas Overhead Assessment Form, to be filed on or before March 1, 1997. (k) Requirements for Mexican casualty companies. Each Mexican casualty company doing business as authorized by a Certificate of Authority issued under Texas Insurance Code, Article 8.24, shall complete and file the following blanks and forms for the 1996 calendar year with the department only. All submissions shall be printed or typed in English and all monetary values shall be clearly designated in United States dollars. The form identified in paragraph (1) of this subsection shall be completed in accordance with the current NAIC Annual Statement Instructions, Property and Casualty, except as provided by this section. An actuarial opinion is not required. In the event of a conflict between the Insurance Code, any currently existing departmental rule, form, or instruction, or any specific requirement of this subsection and the NAIC manuals listed in this subsection, then and in that event, the Insurance Code, the department's promulgated rule, form, or instruction, or the specific requirement of this subsection shall take precedence and in all respects control. It is the express intent of this subsection that it shall not repeal or otherwise modify or amend any department rule or the Insurance Code. The blanks or forms are as follows: (1) Annual Statement (association edition, Form 2, with a yellow colored cover made of minimum 65lb. paper), 12 inch x 19 inch size, provided, however, only pages 1 - 4, 15, 17, 18, 19 and 137 are required to be completed, to be filed on or before March 1, 1997; (2) A copy of the balance sheet and the statement of profit and loss from the Mexican financial statement (printed or typed in English), to be filed on or before March 1, 1997; (3) A copy of the official documents issued by the COMISION NACIONAL DE SEGUROS Y FIANZAS approving the current year's annual statement, to be filed on or before June 30, 1997; and (4) A copy of the current license to operate in the Republic of Mexico, to be filed on or before March 1, 1997. (l) Other financial reports. Nothing in this section prohibits the department from requiring any insurer or other regulated entity from filing other financial reports with the department. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 18, 1996. TRD-9618365 Caroline Scott General Counsel and Chief Clerk Texas Department of Insurance Effective date: January 8,1997 Proposal publication date: October 29, 1996 For further information, please call: (512) 463-6327 TITLE 30. ENVIRONMENTAL QUALITY PART I. Texas Natural Resource Conservation Commission CHAPTER 39. Public Notice The commission adopts new sec.sec.39.1, 39.3, 39.5, 39.7, 39.9, 39.11, 39.13, 39.15, 39.17, 39.19, 39.21, 39.23, 39.25, 39.101, 39.103, 39.105, 39.107, 39.109, 39.151, 39.201, 39.251, and 39.253, concerning public notice of proceedings. The commission is withdrawing the proposed sec.39.51. Sections 39.1, 39.5, 39.9, 39.11, 39.13, 39.15, 39.17, 39.19, 39.23, 39.101, 39.103, 39.105, 39.107, 39.109, 39.151, 39.251, and 39.253 are adopted with changes to the proposed text as published in the June 18, 1996, issue of the Texas Register (21 TexReg 5539). Sections 39.3, 39.7, 39.21, 39.25, and 39.201 are adopted without changes and will not be republished. EXPLANATION OF ADOPTED RULES. This is part of the second phase (Phase II) of an ongoing project to reorganize, clarify, and consolidate the procedural rules of the commission. As part of Phase II, the commission adopted new procedural rules 30 TAC Chapters 1, 3, 5, 10, 20, 40, 50, 55, 70, 80, and 86, and amendments to 30 TAC Chapter 340 (see the May 28, 1996, issue of the Texas Register (21 TexReg 4689)). New Chapter 39 replaces several sections of 30 TAC Chapter 305, Subchapter E. The commission's adoption of the Phase II rules noted in this paragraph included the repeal of several sections of Chapter 305, Subchapter E. This edition of the Texas Register contains the repeal of most of the remaining sections of Chapter 305, Subchapter E. Accordingly, Chapter 305, Subchapter E has been repealed in its entirety with the exception of sec.305.106. The adopted Chapter 39 is intended to organize and clarify the required public notice for several types of applications. The chapter is organized so that virtually all of the notice requirements for a specific type of application are located in one section, and each section states the requirements generally in the order in which they must be satisfied. Chapter 39 replaces the public notice rules found in Chapter 305, Subchapter E, and so generally speaking, the requirements in Chapter 39 concern only the types of applications formerly under Chapter 305, Subchapter E, including applications for permits for: municipal solid waste, industrial solid waste, and hazardous waste facilities; wastewater discharges; and injection wells. However, Chapter 39 also contains provisions on notice of hearing concerning an application under 30 TAC Chapter 116 (air quality permits) and notice of hearing concerning a contested enforcement case. The notice requirements for additional types of applications may be placed in Chapter 39 in the future. TAKINGS IMPACT ASSESSMENT. The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code, sec.2007.043. The following is a summary of that assessment. The specific purpose of these rules is to clarify and recodify the commission's rules on public notice of proceedings. The rules will substantially advance these specific purposes by providing specific provisions on these matters. Promulgation and enforcement of these rules will not burden private real property which is the subject of the rules because it concerns public notice of proceedings. The following exceptions to the application of Texas Government Code, Chapter 2007, apply to these rules: the action significantly advances the health and safety purpose and imposes no greater burden than is necessary to achieve the health and safety purpose. HEARING AND COMMENTERS. A public hearing was held concerning the proposed rules on July 18, 1996, in Austin. No persons submitted comments during the hearing. The comment period closed July 18, 1996. Written comments were received from Browning-Ferris Industries (BFI); Henry, Lowerre, Johnson, Hess & Frederick (Henry, Lowerre); Kelly, Hart & Hallman; and the League of Women Voters of Texas (League of Women Voters). The League of Women Voters and Kelly, Hart & Hallman generally supported the adoption of the new rules. BFI generally opposed the adoption of the new rules and requested that the commission instead form an ad hoc group to continue work on developing public notice rules. Henry, Lowerre argued that there are a number of major problems with the rules. The League of Women Voters observed that public notice should be made so that there is actual notice given to the affected public. It also urged the commission to adopt a consistent approach on who should satisfy requirements to publish notice, and on dealing with the public. The commission agrees that public notice should be targeted to the public affected by an application; the relevant statutes and current commission rules require notice with that goal in mind. Chapter 39 does not change those requirements, but makes the requirements easier to understand, and therefore, compliance (and actual notice) more likely. With respect to consistent approach, the commission responds that the adopted rules call for the applicant to complete any requirement to publish notice. Concerning dealing with the public on applications for permits, the commission recently created the Office of Public Assistance, whose job it is to respond to inquiries by the public on applications and permitting processes, and provides the public a single point of contact with the agency. Henry, Lowerre suggested a general requirement that all notice of opportunity to submit comment or a hearing request concerning an application should be issued only after agency staff has prepared the draft permit, claiming that this requirement would allow for meaningful participation by the public because the public could first review the draft permit. The commission has made no changes in response to the comment. The proposed rules in most instances already contain this requirement; under most sections the "notice of draft permit" requires public notice after the draft permit is prepared. The exception is the rules on modifications of solid waste permits, which do not change notice requirements compared to the repealed rules, and are closely modeled on United States Environmental Protection Agency (EPA) requirements. The commission believes the comment relates to the agency's program on air quality permits, however, the scope of this rulemaking project includes the air program only to the extent of proposing rules on notice of hearing. The notice requirements the commenter speaks of are in Chapter 116. Henry, Lowerre suggested the commission adopt rules on required reissuance of notice when the draft permit is subsequently changed, or when there is an error in the original notice. The commenter gave as an example a specific application for an air quality permit, and a change to the application after notice of the application was issued. While 30 TAC sec.281.23 prohibits changes to an application which would constitute a major amendment after issuance of notice of the application and draft permit, the commission acknowledges that this rule does not apply to the air program. However, the scope of this rules project is limited concerning the air program and concerns only the notice of hearing. Concerning the commenter's second issue on errors in public notice, the commission does not believe an additional rule is necessary, because the adopted rules specify the notice requirements that must be met. The League of Women Voters argued that Chapter 39 should not use the term "person affected" until the commission adopts additional rules on this subject. Henry, Lowerre had similar concerns relating to public meetings. The commission believes that this is a reference to several sections of the chapter concerning the requirement to hold a public meeting concerning an application if requested by a person affected. The commission has made no changes in response to the comments, because the term "person affected" is taken from Health and Safety Code, sec.361.0791, concerning public meetings. The commission, however, wishes to point out to the commenters that the commission's rules in 30 TAC sec.sec.55.1 et seq. on evaluating requests for contested case hearings do not apply to the evaluation of requests for public meetings. A "public meeting" is an informal meeting often held in the locality of the applicant's facility, while a "contested case hearing" is a formal evidentiary hearing held under the Administrative Procedure Act. The commission's resolution issued on October 8, 1996, directs the new Office of Public Assistance to hold public meetings on applications when appropriate, and specifies relevant factors on determining when to hold a meeting. The factors which the Office of Public Assistance considers are similar to those proposed by Henry, Lowerre. BFI cited case law that specifies that an agency's rules must be within the agency's authority to promulgate, and must be clear. The commission believes that the adopted rules meet these requirements. The League of Women Voters and Henry, Lowerre proposed that sec.39.1 should be amended so that the scope of Chapter 39 includes applications concerning the disposal of radioactive waste. The commission has made no changes in response to these comments as they are beyond the scope of this rulemaking project. The commission notes, however, that in the near future the commission will consider publishing a proposed new subchapter to be added to Chapter 39 on notice of applications concerning radioactive substances. Henry, Lowerre suggested adding to this chapter notice requirements concerning the commission's air program. The commission has made no changes in response to the comment. While the adopted rules contain sec.39.201 on notice of hearing for a preconstruction permit, the air program is otherwise outside the scope of this rulemaking project. The commission has revised sec.39.1(3) to clarify that the requirements of this chapter apply to applications for underground injection well permits, whether the applications are under the Water Code or the Health and Safety Code. Some applications for underground injection well permits are filed pursuant to the Water Code, Chapter 27 but not the Health and Safety Code, Chapter 361, such as applications for the disposal of radioactive substances. Henry, Lowerre argued that sec.39.5(c) (specifying mailed notice is complete upon deposit with the United States Post Office) creates serious problems for responding to notice. As an example, they noted two other sections of Chapter 39 which provide for ten day's mailed notice. The commission has made no changes in response to this comment. The section codifies what is already commission practice. For example, the commission rule on service of documents contains a similar provision, which is essentially the "mail-box rule" taken from the Texas Rules of Civil Procedure (see 30 TAC sec.1.11(d)). The League of Women Voters suggested that applicants should be required to submit proof of publication of notice. The proposed rules contained this requirement; however, the adopted rules have been revised so that this requirement is located in one place, in sec.39.5(f), rather than in several sections in the chapter. The applicable statutes state in many instances that "acceptance" of the affidavit creates a rebuttable presumption of compliance with the requirements. The adopted rule specifies that "filing an affidavit certifying facts that constitute compliance with the notice requirements" creates the presumption, in order to clarify what act triggers the presumption. This clarification has been made to other rules, too. Henry, Lowerre suggested that the rules state that if there is a deadline for public comment, protests, and hearing requests that are a certain number of days after publication, the deadline is counted from the last publication. It also suggested adding a rule which would allow for requesting and granting extensions of the deadline. The commission will consider this suggestion when it considers for adoption recently proposed changes to 30 TAC Chapter 55, concerning hearing requests (see the October 25, 1996, issue of the Texas Register (21 TexReg 10503)). If the commission were to adopt this suggestion, the most logical placement of the new provision would be in sec.55.21(d), concerning the calculation of the deadline for a hearing request. With respect to extensions of the deadline, sec.55.21(e) already allows for the commission to extend the deadline. Additional changes were made to sec.39.5. The commission added sec.39.5(g) and (h) as general requirements concerning publishing notice and broadcasting notice. Other rules now cross-reference these subsections, avoiding the repetitive statement of the same provision. The commission added a provision to sec.39.5(g) to clarify the requirement for certain applications when notice must be published in a newspaper of general circulation in the county in which the facility is located or proposed to be located and in a newspaper of circulation in the immediate vicinity in which the facility is located or proposed to be located. The commission clarified that one publication may satisfy this requirement if the publishing newspaper meets both circulation requirements. BFI criticized the provisions of sec.39.7, concerning mailing lists, asserting that the commission does not have the authority to adopt the rule. The commission responds that this section is substantially the same as the repealed sec.305.103(b)(9), except the proposed rule is more clear, and its requirements are easier to identify due to the reorganization of the rules. Therefore, the commission has made no changes in response to the comment. The League of Women Voters and Henry, Lowerre suggested changes to sec.39.9. Both suggested that the term "protest" should be defined, with one suggesting that "protest" is often confused with a "request for hearing." The commission has deleted the words "protest or" from sec.39.9 (and from other sections) based on anticipated changes to other commission rules in the near future. The commission recently proposed changes to 30 TAC Chapter 50 to delete the requirement that the filing of a "protest" would prevent the executive director from issuing final approval of the protested application. (The commission proposes no change to the commission rule that the filing of a hearing request prevents the executive director from issuing final approval of the application. See the October 25, 1996, issue of the Texas Register (21 TexReg 10501)). The commission has revised Chapter 39 now so that notice requirements are not misleading upon the adoption of the changes to Chapter 50. Until the changes to Chapter 50 are adopted, the commission will continue to issue notice that explains that the filing of a protest will prevent the executive director from issuing final approval of the protested application, even though this is not required by the adopted Chapter 39. The commission believes that the commenters' concerns relate to the processing of letters filed with the chief clerk in response to public notice, and the fact that each letter is unique in tone and content. Namely, it is sometimes difficult to discern if a letter that clearly protests the application also constitutes a hearing request. With respect to distinguishing a protest letter from a hearing request, the commission believes that its notices are clear, as they direct a person who wants a hearing to file the written statement, "I request a hearing." The League of Women Voters, and Henry, Lowerre suggested changes to the rules concerning the text of public notice and the description of the deadline for filing public comment, protests, and, if applicable, hearing requests. The League of Women Voters suggested with respect to sec.39.9 that the text of public notice should describe the deadline by specifying an exact date. Currently, commission notices specify that the deadline is a certain number of days after the notice is published in a newspaper. The commission responds that it believes there are two options for implementing the commenter's idea, but that neither option is reasonable given the realities of publishing notice. The commission cannot specify an exact date so many days after publishing notice because often neither the commission nor the applicant know in advance when notice will be published. The chief clerk prepares the text of notice and forwards the notice to the applicant who then submits the notice to a publisher, who publishes it. Given that publication of notice depends on the actions of several entities, it is extremely difficult to predict exactly when notice will be published. The commission could take one of two actions. The commission could specify a date certain in notices that leaves ample time for notice to be published in the interim and satisfies statutory requirements (usually publication must be at least 30 days before the deadline to request a hearing). However, this would leave the commission with selecting a date certain that would substantially delay the processing of an application. The commission could alternatively select an earlier date and risk publication of notice that does not allow sufficient time for the public to respond, requiring the republication of notice. The commission has made no changes in response to the comments. Henry, Lowerre argued that the rules do not require that mailed notice specify the deadline, using sec.39.101(c)(2) as an example. The commission has made no change in response to the comment. Section 39.11(10) does require that mailed notice specify the deadline. Henry, Lowerre suggested that sec.39.11, regarding the text of public notice, should apply not only to notice issued under the requirements of Chapter 39, but also to other notices. The commission has made no change in response to the comment because, among other reasons, the proposal is not consistent with the commission's regulatory reform efforts to organize regulatory requirements in a clear and understandable manner. The League of Women Voters suggested that sec.39.11 should require the text of notice to specify the county in which a facility is located. The commission has made no changes in response to the comment. Chapter 39 is intended to organize current notice requirements, which does not include the commenter's suggested requirement. Also, the commission notes that the text of notice requires the address of the applicant, and if different, the location of the facility. Given that notice is generally limited to the county of the facility, the current requirements should be sufficient. The League of Women Voters suggested that sec.39.11 should require the text of notice to include information about the opportunity to submit comments, ask questions, protest, or request a hearing. It also suggested that the text include the contact telephone number for the Public Interest Counsel or the Office of Public Assistance. Henry, Lowerre made similar suggestions on providing a single agency contact. The commission has made no changes in response to the comments. Section 39.11(5) already requires a brief description of public comment procedures. Also, sec.39.11(10) already requires the text to include the deadline for filing hearing requests. This latter requirement applies if there is a right to hearing concerning the particular type of application and if the particular notice is issued under a requirement to give notice of opportunity for hearing. Concerning the second issue, the commission issued a resolution on October 8, 1996, concerning the new Office of Public Assistance. The resolution calls for all notices issued by the chief clerk and by applicants to list the Office of Public Assistance (and its toll-free telephone number) as the contact for further information. While sec.39.11(4) calls for the text of notice to include an agency contact person, the commission believes the identification of the specific contact office is best handled by resolution rather than by rule. BFI criticized the provisions of sec.39.11, arguing that the commission acts beyond its authority if it adopts standards for text of notice. The commission responds that this section is substantially the same as the repealed sec.305.100(a), except the proposed rule is more clear and its requirements are easier to identify due to the reorganization of the rules. While the proposed rules do not change notice requirements compared to the repealed rules, the commission notes that Texas Water Code, sec.5.103(b) requires the commission to adopt reasonable procedural rules to be followed in a commission hearing. The commission has deleted the proposed sec.39.11(7), concerning notice of wastewater discharge permits because this provision duplicates the provision in sec.39.151. The subsequent subsections in sec.39.11 have been renumbered. The commission has deleted the words "protest or" from sec.39.11(10), for the same reasons as explained previously concerning the changes to sec.39.9. The commission has revised sec.39.11 and sec.39.13 to clarify that notice must comply with the requirements of the Coastal Management Program if applicable. The notice requirements are based on 30 TAC sec.281.44. The League of Women Voters suggested that sec.39.13, concerning mailed notice, should include persons who filed comments or questions concerning an application. The commission responds that paragraph (12) already provides for mailing notice to other persons designated by the chief clerk, and that in practice the chief clerk has mailed notice to persons who filed public comment or hearing requests concerning an application. However, the commission has made the recommended change by adding paragraph (14). BFI criticized the provisions of sec.39.13, concerning mailed notice, arguing that the commission acts beyond its authority if it adopts standards for persons to whom notice should be mailed. The commission has made no change in response to the comment. The section is substantially the same as the repealed sec.305.103(b), except the proposed rule is more clear and its requirements are easier to identify due to the reorganization of the rules. While the proposed rules do not change notice requirements compared to the repealed rules, the commission notes that Texas Water Code, sec.5.103(b) requires the commission to adopt reasonable procedural rules to be followed in a commission hearing. The League of Women Voters argued that applications for "corrections" of permits should be defined in sec.39.15(a). The commission has made no change in response to this comment. This subsection specifically applies only to applications under sec.305.65, which lists the types of permit changes that are "corrections." Henry, Lowerre argued that sec.39.15, concerning notice is not required for certain applications is too broad, and contrary to EPA requirements. The commission responds that the section to a large extent clarifies and reorganizes current rules, including the repealed sec.305.97, and reflects current agency practice. Further, the commission believes the section is consistent with EPA requirements. The commission has, however, added the word "public" in two instances to sec.39.15 to clarify that the rule relates to public notice. The rule does not affect any requirement for a permittee to give notice to the executive director of the transfer of a permit. The commission has revised sec.39.15(b), concerning the transfer of a permit to clarify that when an applicant seeks to transfer a permit and the executive director determines that changes to the permit in addition to the transfer are necessary, other notice requirements may apply. The commission has also revised the rule concerning the transfer of a permit for an underground injection well to reflect current agency practice. The League of Women Voters argued that applications for "minor amendments" of permits should be defined in sec.39.17. It also questioned whether ten days notice is sufficient notice of an application for a minor amendment. The commission has made no changes in response to these comments. The rule applies only to applications for minor amendments under Chapter 305, Subchapter D, and Subchapter D defines "minor amendment" in sec.305.62(c). With respect to the second comment, no change was made because the purpose of this rulemaking project is to restate and clarify existing notice requirements. The commission has clarified sec.39.19, concerning notice of executive director's recommendation to deny the application. The added provision clarifies that this section does not apply if notice of draft permit has been issued already. For example, if the executive director were to change his position at hearing and recommend to deny the application, this would not trigger any requirement to publish notice of the change. The League of Women Voters suggested that notice of a commission meeting to evaluate a hearing request on an application should be given so that there is sufficient time to prepare for the commission meeting. The commission has made no change in response to the comment. The comment related to an earlier draft of sec.39.21 which was distributed by the commission on an informal basis. The earlier draft allowed for 20 day's notice; this requirement, however, was increased to 30 day's notice in the version proposed in the Texas Register. The commission believes that 30 day's notice is adequate. Henry, Lowerre argued that notice of a hearing held by the State Office of Administrative Hearings (SOAH) on an application should be mailed to persons who requested a hearing, filed a protest, or submitted comments. The commenter also criticized the provisions of sec.39.23(b), concerning notice of a hearing by SOAH to evaluate the validity of a hearing request, arguing that such hearing constitutes the beginning of the hearing on the application, and, therefore, the notice of hearing requirements concerning the particular type of application apply. The commission responds that sec.39.23(a) already requires mailed notice to persons who filed timely public comment or hearing requests. The commission has revised subsection (a) to clarify that the chief clerk may combine the mailed notice required by this section with other required mailed notice of the hearing. Concerning sec.39.23(b), the commission disagrees with the commenter because notice of hearing requirements concern the hearing on the application, not a hearing on hearing requests. "Limited referrals" to SOAH are really an extension of the process by which the commission considers hearing requests during its regular public meetings. The commission should not impose notice requirements for the commission's consideration of a hearing request in public meeting in addition to the requirements specified in sec.39.21. The commission concludes that notice of hearing requirements should not be imposed because the commission has requested SOAH's assistance in making a decision on a hearing request, and declines to change the rules. The commission has amended subsection (c) to clarify that once the first prehearing conference is held, notice to the parties of subsequent prehearing conferences and the hearing is mandatory, not discretionary. Henry, Lowerre and BFI commented on the provisions of proposed sec.39.51, concerning the commission's response to public comment. The commission concludes that these provisions are best located in Chapter 55, and so the commission has not adopted sec.39.51. The commission has proposed revisions to Chapter 55, including new provisions on responding to public comment, and so the commission will consider providing for the requirements in the proposed sec.39.51 in that chapter (see the October 25, 1996, issue of the Texas Register (21 TexReg 10502)). The commission will respond to the comments by Henry, Lowerre and BFI at that time. Given that Chapter 39, Subchapter B contained the proposed sec.39.51 and no other provisions, the proposed Subchapter B on Public Comment has been withdrawn and the subsequent subchapters relettered. BFI criticized the provisions of sec.39.101(a), concerning the preapplication local review committee process, arguing that the applicable Health and Safety Code provision applies only to hazardous waste facilities and not municipal solid waste facilities. The commission has made no changes in response to the comment. The commission believes that Health and Safety Code, sec.361.063(a) applies to "solid waste facilities or for hazardous waste management facilities." The commission acknowledges that the statute could be more clear given that subsection (c) on the details of the local review committee process only refers to hazardous waste management facilities. The commission notes, however, that the process is optional and that it does no harm to applicants for municipal solid waste facilities to offer them this option to work with the local community and identify issues early on. BFI pointed out that the statute calls for "delivering" notice to certain persons, yet the proposed rule calls for "mailing" notice. The commission responds that it has chosen to use "mailing" as this is the method most often used in other statutes for giving notice to a specific person. Also, sec.39.5(c) allows for "mailing" by hand delivery. The commission has made some minor revisions to this section to make it consistent with 30 TAC sec.330.50, concerning the pre-application review process for municipal solid waste applications. Kelly, Hart & Hallman suggested that language be added to proposed sec.39.101 and sec.39.103 to make it clear that the sections apply only to new permits, renewals, and amendments, and that proposed sec.sec.39.105-39.109 apply to Class 1, 2, and 3 modifications. The commission has made no changes in response to the comment. Section 39.5(d), concerning general provisions, specifies that if the chapter provides requirements for a particular type of application, those requirements apply, and the general rule (that notice requirements apply to initial permits, or applications for the amendment, modification, or renewal of permits) does not apply. The inclusion of sec.sec.39.105-39.109, which apply to Class 1, 2, and 3 modifications in the proposed rules makes it clear that sec.39.101 and sec.39.103 do not apply to modifications. BFI criticized the provisions of sec.39.101(d)(1), concerning public meetings on applications for municipal solid waste facilities, arguing that this requirement should apply only to applications for new facilities, not on applications for amendments. BFI made similar comments on sec.39.101(d)(2), concerning the requirements for published notice of the public meeting. The commission has revised sec.39.101(d)(1) in response to the comment, because Health and Safety Code, sec.361.088(d) on amendments, extensions, and renewal of permits, does not give clear authority on holding a public meeting on an application to amend a municipal solid waste permit. The commission did not revise sec.39.101(d)(2) in response to this comment concerning the requirements for published notice of a public meeting. If the executive director holds a public meeting, the publication requirements apply. BFI criticized sec.39.101(d)(2), concerning published notice of a public meeting on an application for a municipal solid waste permit. The commenter questioned the commission's authority to adopt the provision allowing the executive director to require published notice in adjacent counties if a facility is located within 20 miles of a county border. The commenter also criticized the rule because the rule could conceivably require publication in another state. The commission has revised the rule in response to this comment because the purpose of this rulemaking project is to clarify and organize current notice requirements, which does not include this provision. This provision has been deleted here and in other rules in the chapter. BFI criticized the provisions of sec.39.101(e), concerning notice of hearing concerning an application for a municipal solid waste permit, arguing that the commission is without authority to impose the specified requirements for notice of a permit amendment application. BFI also commented that this section should not require an applicant to certify compliance with notice requirements. The commission has made no change in response to the comment. Health and Safety Code, sec.361.088(c), requires the commission "to provide an opportunity for a hearing to the applicant and persons affected." This rulemaking project is intended to clarify and organize existing notice requirements; the proposed rules do not create new requirements. With respect to the second comment, Health and Safety Code, sec.361.081(b), states the applicant "must certify" completion of mailed notice. The commission added sec.39.101(e)(4) to clarify the deadline for issuing notice of the hearing on an application for a municipal solid waste permit. An additional change was made to sec.39.103(a), concerning notice of the local review committee process for industrial solid waste and hazardous waste applications. The amendment makes the section consistent with 30 TAC sec.335.391(c). The commission also added sec.39.103(g) to clarify that this section does not apply to applications for an injection well permit. Such applications are under sec.39.251. BFI criticized the provisions of sec.39.105, concerning Class 1 modifications of municipal solid waste permits. In response to this comment, the commission has revised this section to clarify the requirements for modifications of municipal solid waste permits and the requirements for industrial solid waste and hazardous waste permits. Kelly, Hart & Hallman suggested that a reference to Texas Health and Safety Code, sec.361.0791, be added to proposed sec.39.109(b)(1) to make it clear that the proposed section applies to public meetings authorized under that section of the Code. The commission agrees, and has added the clarifying reference. Henry, Lowerre criticized the provisions of sec.39.151, which provide that mailed notice to adjacent and downstream landowners is not required for applications on the renewal of a wastewater discharge permit, arguing that the provision is inconsistent with state law, commission practice, and requirements for delegation of the National Pollutant Discharge Elimination System (NPDES) program. The commission disagrees with the commenter because this provision codifies current commission practice, and is consistent with Texas Water Code, sec.26.028(a) and (d)(2) which provide that the commission shall give notice to persons "who in the judgment of the commission may be affected." Concerning delegation of the federal program, the commission notes that its practice is consistent with NPDES delegation requirements. The commission declines to make changes to the rule. The commission has revised sec.39.251(f), concerning notice of hearing on an application for an underground injection well permit. The revisions clarify and consolidate the requirements. The commission has also made several changes to the rules to correct grammatical errors and to eliminate redundant language. SUBCHAPTER A. Applicability and General Provisions 30 TAC sec.sec.39.1, 39.3, 39.5, 39.7, 39.9, 39.11, 39.13, 39.15, 39.17, 39.19, 39.21, 39.23, 39.25 STATEMENT OF STATUTORY AUTHORITY. The new sections are adopted under Texas Water Code, sec.sec.5.103, 5.105, 26.011, 27.019, and Texas Health and Safety Code, sec.sec.361.011, 361.017, 361.024, and 382.017, which authorize the commission to adopt any rules necessary to carry out its powers and duties under the Water Code, the Health and Safety Code, and other laws of Texas and to establish and approve all general policy of the commission. sec.39.1. Applicability. This chapter applies to: (1) applications for municipal solid waste, industrial solid waste, or hazardous waste permits under the Texas Solid Waste Disposal Act, Texas Health and Safety Code, Chapter 361; (2) applications for wastewater discharge permits under Texas Water Code, Chapter 26. (A) This paragraph includes: (i) applications for the disposal of sewage sludge or water treatment sludge under Chapter 312 of this title (relating to Sludge Use, Disposal, and Transportation); (ii) applications for permits under Chapter 321, Subchapter B of this title (relating to Commercial Livestock and Poultry Production Operations). (B) This paragraph does not include: (i) applications for authorizations under Chapter 321 of this title (relating to Control of Certain Activities by Rule), other than applications under Subchapter B of this chapter; (ii) applications for authorizations under Chapter 312 of this title, except applications for a permit under the chapter; and (iii) applications under Chapter 332 of this title (relating to Composting); (3) applications for underground injection well permits under Texas Water Code, Chapter 27, or under the Texas Solid Waste Disposal Act, Texas Health and Safety Code, Chapter 361; (4) applications for production area authorizations under Chapter 331 of this title (relating to Underground Injection Control); (5) hearings under Chapter 80 of this title (relating to Contested Case Hearings) concerning applications for air quality permits under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification); and (6) hearings on contested enforcement cases under Chapter 80 of this title. sec.39.5. General Provisions. (a) If the chief clerk prepares a newspaper notice that is required by this chapter and the applicant does not cause the notice to be published within 30 days of receipt of the notice from the chief clerk, the chief clerk may cause the notice to be published and the applicant shall reimburse the agency for the cost of publication within 30 days of publication. (b) The chief clerk may require the applicant to provide necessary mailing lists in electronic form. (c) When this chapter requires notice by mail, notice by hand delivery may be substituted. Mailing is complete upon deposit of the document, enclosed in a prepaid, properly addressed wrapper, in a post office or official depository under the care and custody of the United States Postal Service. If hand delivery is by courier-receipted delivery, the delivery is complete upon the courier taking possession. (d) Unless otherwise provided in this chapter, public notice requirements apply to applications for initial permits or applications for the amendment, modification, or renewal of permits. (e) If an applicant submits more than one application for a facility, notice may be combined to satisfy more than one section of this chapter. (f) When this chapter requires an applicant to publish notice, the applicant must file an affidavit with the chief clerk certifying facts that constitute compliance with the requirement. The deadline to file the affidavit is the day of the public meeting for notice of public meeting, two days before a public hearing for notice of a public hearing, and 30 days after the last publication for other published notices. For notice of a public meeting, the applicant must also submit the affidavit to the executive director no later than the day of the public meeting. Filing an affidavit certifying facts that constitute compliance with notice requirements creates a rebuttable presumption of compliance with the requirement to publish notice. (g) When this chapter requires notice to be published according to this subsection, the applicant shall publish notice in a newspaper of the largest general circulation that is published in the county in which the facility is located or proposed to be located. If a newspaper is not published in the county, the notice must be published in a newspaper of general circulation in the county in which the facility is located or proposed to be located. If a newspaper is not published in the county, and the application concerns an application for a new or amended municipal solid waste permit, and publication of notice of intent, notice of draft permit, or notice of hearing, then the applicant shall publish notice in a newspaper of the largest general circulation that is published in the county in which the facility is located or proposed to be located and in a newspaper of circulation in the immediate vicinity in which the facility is located or proposed to be located, and such notice may be satisfied by one publication if the publishing newspaper meets both circulation requirements. (h) When this chapter requires notice be broadcast according to this subsection, the applicant shall broadcast notice of the application on one or more local radio stations that broadcast to an area that includes all of the county in which the facility is located. The executive director may require that the broadcasts be made to an area that also includes contiguous counties. sec.39.9. Deadline for Public Comment and Hearing Requests. Notice under this chapter will specify a deadline to file public comment and if applicable, hearing requests. After the deadline, final action on an application may be taken under Chapter 50 of this title (relating to Action on Applications). sec.39.11. Text of Public Notice. When notice by publication or by mail is required by this chapter, the text of the notice must include: (1) the name and address of the agency; (2) the name and address of the applicant and, if different, the location of the facility or activity to be regulated by the permit; (3) a brief description of the business conducted at the facility or activity described in the application or the draft permit; (4) the name, address, and telephone number of an agency contact person from whom interested persons may obtain further information; (5) a brief description of public comment procedures, and the time and place of any public meeting or public hearing; (6) a statement of procedures by which the public may participate in the final permit decision and, if applicable, how to request a hearing, or a statement that later notice will describe procedures for public participation; (7) for notices of public meetings or hearings, the date, time, and place of the meeting or hearing, and a brief description of the nature and purpose of the meeting or hearing, including the applicable rules and procedures; (8) the application or permit number; (9) if the application is subject to final approval by the executive director under Chapter 50 of this title (relating to Action on Applications), a statement that the executive director may issue final approval of the application unless there is a (if applicable) request for hearing filed with the chief clerk; (10) if applicable, the deadline to file comments and, if applicable, hearing requests; (11) a statement of whether the executive director has prepared a draft permit; and (12) if applicable, a statement that the application or requested action is subject to the Coastal Management Program and must be consistent with the Coastal Management Program goals and policies. sec.39.13. Mailed Notice. When this chapter requires mailed notice under this section, the chief clerk shall mail notice to: (1) the landowners named on the application map or supplemental map, or the sheet attached to the application map or supplemental map; (2) the mayor and health authorities of the city or town in which the facility is or will be located or in which waste is or will be disposed of; (3) the county judge and health authorities of the county in which the facility is or will be located or in which waste is or will be disposed of; (4) the Texas Department of Health; (5) the Texas Parks and Wildlife Department; (6) the Texas Railroad Commission; (7) if applicable, state and federal agencies for which notice is required in 40 Code of Federal Regulations, sec.124.10(c); (8) if applicable, persons on a mailing list developed and maintained in accordance with 40 Code of Federal Regulations, sec.124.10(c)(1)(ix); (9) the applicant; (10) if the application concerns an injection well, the Water Well Drillers Advisory Council; (11) persons on a relevant mailing list kept under sec.39.7 of this title (relating to Mailing Lists); (12) any other person the executive director or chief clerk may elect to include; (13) if applicable, the secretary of the Coastal Coordination Council; and (14) persons who filed public comment or hearing requests on or before the deadline for filing public comment or hearing requests. sec.39.15. Public Notice Not Required for Certain Types of Applications. (a) Public notice is not required for the following: (1) applications for the correction or endorsement of permits under sec.305.65 of this title (relating to Corrections of Permits); (2) permittees' voluntary requests for suspension or revocation of permits under Chapter 305, Subchapter D of this title (relating to Amendments, Modifications, Renewals, Transfers, Corrections, Revocation, and Suspension of Permits); (3) Texas pollutant discharge elimination system minor amendments under Texas Water Code, Chapter 26; (4) applications for transportation route special permits under sec.330.32 of this title (relating to Collection and Transportation Requirements). (b) For the voluntary transfer of permits, no public notice shall be required, except that: (1) except as provided in paragraph (2) of this subsection, notice of applications for the voluntary transfer of permits concerning hazardous waste facilities shall be made under sec.39.105 of this title (relating to Application for a Class 1 Modification of an Industrial Solid Waste, Hazardous Waste, or Municipal Solid Waste Permit); (2) for notice of applications for the voluntary transfer of permits concerning underground injection wells (including injection wells for the disposal of hazardous waste), the chief clerk shall mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice) and to the persons who own mineral rights within the cone of influence, as that term is defined by sec.331.2 of this title (relating to Definitions). The deadline to file public comment is ten days after mailing; and (3) if the executive director determines that change to the permit in addition to the transfer are necessary, other notice requirements may apply. sec.39.17. Notice of Minor Amendment. (a) The only required notice for applications seeking a minor amendment of a permit under Chapter 305, Subchapter D of this title (relating to Amendments, Modifications, Renewals, Transfers, Corrections, Revocation, and Suspension of Permits) is that the chief clerk shall mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice). The deadline to file public comment is ten days after mailing. (b) Subsection (a) of this section does not apply to applications seeking a minor amendment of a wastewater discharge permit. For such applications, the notice requirements are in sec.39.151(c) of this title (relating to Application for Wastewater Discharge Permit, including Application for the Disposal of Sewage Sludge or Water Treatment Sludge). sec.39.19. Notice of Executive Director's Recommendation to Deny Application. If the executive director recommends denial of an application, the notice of that recommendation shall be given under the requirements for notice of draft permit for that type of application. This section does not apply if notice of the draft permit has been issued already. sec.39.23. Notice of Hearing Held by SOAH, Including Hearing on Hearing Requests. (a) The chief clerk shall mail notice to the applicant, executive director, and public interest counsel. The chief clerk shall also mail notice to persons who filed public comment or hearing requests concerning the application on or before the deadline specified under sec.39.9 of this title (relating to Deadline for Public Comment and Hearing Requests). The notice shall be mailed no less than ten days before the hearing. The chief clerk may combine the mailed notice required by this section with other mailed notice of hearing required by this chapter. (b) Other requirements in this chapter concerning notice of hearing apply. However, if the commission refers an application to SOAH and requests the judge to submit a written recommendation on the sole question of whether hearing requests meet the requirements of Chapter 55, Subchapter B of this title (relating to Hearing Requests), the only notice shall be as required in subsection (a) of this section. (c) After an initial preliminary hearing, the judge shall give reasonable notice of subsequent prehearing conferences or the evidentiary hearing by making a statement on the record in a prehearing conference or by written notice to the parties. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 4, 1996. TRD-9618348 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: January 8, 1997 Proposal publication date: June 18, 1996 For further information, please call: (512) 239-1966 SUBCHAPTER B. Public Notice of Solid Waste Applications 30 TAC sec.sec.39.101, 39.103, 39.105, 39.107, 39.109 The new sections are adopted under Texas Water Code, sec.sec.5.103, 5.105, 26.011, 27.019, and Texas Health and Safety Code, sec.sec.361.011, 361.017, 361.024, and 382.017, which authorize the commission to adopt any rules necessary to carry out its powers and duties under the Water Code and other laws of Texas and to establish and approve all general policy of the commission. sec.39.101. Application for Municipal Solid Waste Permit. (a) Preapplication local review committee process. If an applicant decides to participate in a local review committee process under Texas Health and Safety Code, sec.361.063, the applicant must submit to the executive director a notice of intent to file an application, setting forth the proposed location and type of facility. The executive director shall mail notice to the county judge of the county in which the facility is to be located. If the proposed facility is to be located in a municipality or the extraterritorial jurisdiction of a municipality, a copy of the notice shall also be mailed to the mayor of the municipality. The executive director shall also mail notice to the appropriate regional solid waste planning agency or council of government. The mailing shall be by certified mail. (b) Notice of intent to obtain a permit. (1) On the executive director's receipt of an application, or notice of intent to file an application, the chief clerk shall mail notice to the state senator and representative who represent the area in which the facility is or will be located. (2) After the executive director determines that the application is administratively complete, the following actions shall be taken. (A) The applicant shall publish notice of intent to obtain a permit at least once under sec.39.5(g) of this title (relating to General Provisions). (B) The chief clerk shall publish notice of the application in the Texas Register. (C) The chief clerk shall mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice). (D) The executive director shall mail notice of this determination along with a copy of the application or summary of its contents to the mayor and health authority of a municipality in whose territorial limits or extraterritorial jurisdiction the solid waste facility is located, and to the county judge and the health authority of the county in which the facility is located. (c) Notice of draft permit. (1) The applicant shall publish notice at least once under sec.39.5(g) of this title. (2) The chief clerk shall mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice). (3) The notice shall specify the deadline to file public comment or hearing requests, which shall be not less than 30 days after newspaper publication. (d) Notice of public meeting. (1) If the application proposes a new facility, the executive director shall hold a public meeting in the county in which the facility is to be located to receive public comment concerning the application. A public meeting is not a contested case proceeding under the APA. A public meeting held as part of a local review committee process under subsection (a) of this section meets the requirements of this subsection if public notice is provided under this subsection. (2) The applicant shall publish notice of the public meeting once each week during the three weeks preceding a public meeting under sec.39.5(g) of this title. The published notice shall not be smaller than 96.8 square centimeters or 15 square inches with the shortest dimension at least 7.6 centimeters or three inches. (3) The chief clerk shall mail notice to the persons listed in sec.39.13 of this title. (e) Notice of hearing. (1) This subsection applies if an application is referred to SOAH for a contested case hearing under Chapter 80 of this title (relating to Contested Case Hearings). (2) The applicant shall publish notice at least once under sec.39.5(g) of this title. (3) Mailed notice. (A) If the applicant proposes a new facility, the applicant shall mail notice of the hearing to each residential or business address located within 1/2 mile of the facility and to each owner of real property located within 1/2 mile of the facility listed in the real property appraisal records of the appraisal district in which the facility is located. The notice shall be mailed to the persons listed as owners in the real property appraisal records on the date the application is determined to be administratively complete. The notice must be mailed no more than 45 days and no less than 30 days before the hearing. Within 30 days after the date of mailing, the applicant must file an affidavit certifying compliance with this paragraph with the chief clerk. Filing an affidavit certifying facts that constitute compliance with the notice requirements creates a rebuttable presumption of compliance with this subparagraph. (B) If the applicant proposes an amendment of a permit, the chief clerk shall mail notice to the persons listed in sec.39.13 of this title. (4) Notice under paragraphs (2) and (3)(B) of this subsection shall be completed at least 30 days before the hearing. sec.39.103. Application for Industrial or Hazardous Waste Facility Permit. (a) Preapplication local review committee process. If an applicant decides to participate in a local review committee process under Texas Health and Safety Code, sec.361.063, the applicant must submit a notice of intent to file an application to the executive director, setting forth the proposed location and type of facility. The applicant shall mail notice to the county judge of the county in which the facility is to be located. If the proposed facility is to be located in a municipality or the extraterritorial jurisdiction of a municipality, a copy of the notice shall also be mailed to the mayor of the municipality. Mailed notice shall be by certified mail. When the applicant submits the notice of intent to the executive director, the applicant shall publish notice of the submission in a paper of general circulation in the county in which the facility is to be located. (b) Notice of receipt of application. When the executive director receives an application, or notice of intent to file an application, the chief clerk shall mail notice to the state senator and representative who represent the area in which the facility is or will be located, and to the persons listed in sec.39.13 of this title (relating to Mailed Notice). (c) Review of permit application by other governmental agencies. After the executive director determines that the application is administratively complete, the executive director shall mail a copy of the application or a summary of its contents to the mayor and health authority of a municipality in whose territorial limits or extraterritorial jurisdiction the solid waste facility is located. The executive director shall also mail a copy of the application or a summary of its contents to the county judge and the health authority of the county in which the facility is located. (d) Notice of draft permit. (1) The applicant shall publish notice at least once in a newspaper of general circulation in the county in which the facility is located and in each county and area which is adjacent or contiguous to each county in which the proposed facility is located. (2) The chief clerk shall mail notice to the persons listed in sec.39.13 of this title. (3) If the application concerns a hazardous waste facility, the applicant shall broadcast notice under sec.39.5(h) of this title (relating to General Provisions). (4) The notice shall specify the deadline to file public comment or hearing requests. For industrial solid waste applications, the deadline shall be not less than 30 days after newspaper publication, and for hazardous waste applications, not less than 45 days after newspaper publication. (e) Notice of public meeting. (1) If the applicant proposes a new hazardous waste facility, the executive director shall hold a public meeting in the county in which the facility is to be located to receive public comment concerning the application. If the applicant proposes a major amendment of an existing hazardous waste facility permit, this subsection applies if a person affected files a request for public meeting with the chief clerk concerning the application before the deadline to file public comment or hearing requests. A public meeting is not a contested case proceeding under the APA. A public meeting held as part of a local review committee process under subsection (a) of this section meets the requirements of this subsection if public notice is provided under this subsection. (2) The applicant shall publish notice of the public meeting once each week during the three weeks preceding a public meeting. The applicant shall publish notice under sec.39.5(g) of this title. The published notice shall not be smaller than 96.8 square centimeters or 15 square inches with the shortest dimension at least 7.6 centimeters or three inches. (3) The chief clerk shall mail notice to the persons listed in sec.39.13 of this title. (f) Notice of hearing. (1) This subsection applies if an application is referred to SOAH for a contested case hearing under Chapter 80 of this title (concerning Contested Case Hearings). (2) Newspaper notice. (A) If the application concerns an industrial solid waste facility, the applicant shall publish notice at least once in a newspaper of general circulation in the county in which the facility is located and in each county and area which is adjacent or contiguous to each county in which the proposed facility is located. (B) If the application concerns a hazardous waste facility, the hearing must include one session held in the county in which the facility is located. The applicant shall publish notice of the hearing once each week during the three weeks preceding the hearing under sec.39.5(g) of this title. The published notice shall not be smaller than 96.8 square centimeters or 15 square inches with the shortest dimension at least 7.6 centimeters or three inches. The text of the notice shall include the statement that at least one session of the hearing will be held in the county in which the facility is located. (3) Mailed notice. (A) If the applicant proposes a new solid waste management facility, the applicant shall mail notice to each residential or business address located within 1/2 mile of the facility and to each owner of real property located within 1/2 mile of the facility listed in the real property appraisal records of the appraisal district in which the facility is located. The notice shall be mailed to the persons listed as owners in the real property appraisal records on the date the application is determined to be administratively complete. The chief clerk shall mail notice to the persons listed in sec.39.13 of this title, except that the chief clerk shall not mail notice to the persons listed in paragraph (1) of that section. The notice must be mailed no more than 45 days and no less than 30 days before the hearing. Within 30 days after the date of mailing, the applicant must file with the chief clerk an affidavit certifying compliance with its obligations under this subsection. Filing an affidavit certifying facts that constitute compliance with notice requirements creates a rebuttable presumption of compliance with this subparagraph. (B) If the applicant proposes to amend or renew an existing permit, the chief clerk shall mail notice to the persons listed in sec.39.13 of this title. (4) If the application concerns a hazardous waste facility, the applicant shall broadcast notice of the hearing under sec.39.5(h) of this title. (5) Notice under paragraphs (2)(A), (3), and (4) of this subsection shall be completed at least 30 days before the hearing. (g) This section does not apply to applications for an injection well permit. sec.39.105. Application for a Class 1 Modification of an Industrial Solid Waste, Hazardous Waste, or Municipal Solid Waste Permit. (a) Notice requirements for Class 1 modifications are in: (1) sec.305.69 of this title (relating to Solid Waste Permit Modification at the Request of the Permittee) for industrial solid waste or hazardous waste permits; or (2) sec.305.70 of this title (relating to Municipal Solid Waste Class I Modifications) for municipal solid waste permits. (b) The text of required notice shall follow the requirements of sec.39.11 of this title (relating to Text of Public Notice). If the application is for modification of an industrial solid waste or hazardous waste permit, the additional requirements in sec.305.69 of this title apply. (c) When mailed notice is required, the applicant shall mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice). sec.39.107. Application for a Class 2 Modification of an Industrial or Hazardous Waste Permit. The notice requirements for Class 2 modifications are in sec.305.69 of this title (relating to Solid Waste Permit Modification at the Request of the Permittee), except that the text of notice shall comply with sec.305.69 of this title and sec.39.11 of this title (relating to Text of Public Notice). The notice shall specify the deadline to file with the chief clerk public comment. The deadline is specified in sec.305.69 of this title. When mailed notice is required, the applicant shall mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice). sec.39.109. Application for a Class 3 Modification of an Industrial or Hazardous Waste Permit. (a) Notice requirements in other commission rules. The notice requirements for Class 3 modifications are in sec.305.69 of this title (relating to Solid Waste Permit Modification at the Request of the Permittee), except that the text of notice shall follow the requirements of sec.305.69 of this title and sec.39.11 of this title (relating to Text of Public Notice). The notice shall specify the deadline to file public comment or hearing requests. The deadline is specified in sec.305.69 of this title. When mailed notice is required, the applicant shall mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice). (b) Notice of public meeting. (1) In accordance with Texas Health and Safety Code, sec.361.0791, the executive director shall hold a public meeting on request of a person affected concerning a hazardous waste permit that is filed on or before the deadline to file public comment or hearing requests. The public meeting is not a contested case proceeding under the APA. A public meeting held as part of a local review committee process under Health and Safety Code, sec.361.063 complies with this subsection if public notice is provided in accordance with this subsection. This subsection does not apply to a public meeting held by an applicant under sec.305.69 of this title. (2) The applicant shall publish notice of the public meeting once each week during the three weeks preceding a public meeting under sec.39.5(g) of this title (relating to General Provisions). The published notice shall not be smaller than 96.8 square centimeters or 15 square inches with the shortest dimension at least 7.6 centimeters or three inches. (c) Notice of hearing. (1) This subsection applies if an application is referred to SOAH for a contested case hearing under Chapter 80 of this title (relating to Contested Case Hearings). (2) Newspaper notice. (A) If the application concerns an industrial solid waste facility, the applicant shall publish notice at least once in a newspaper of general circulation in the county in which the facility is located, and in each county and area which is adjacent or contiguous to each county wherein the proposed facility is located. (B) If the application concerns a hazardous solid waste facility, the hearing must include one session held in the county in which the facility is located. The applicant shall publish notice of the hearing once each week during the three weeks preceding the hearing under sec.39.5(g) of this title. The published notice shall not be smaller than 96.8 square centimeters or 15 square inches with the shortest dimension at least 7.6 centimeters or three inches. The text of the notice shall include the statement that at least one session of the hearing will be held in the county in which the facility is located. (3) The chief clerk shall mail notice to the persons listed in sec.39.13 of this title. (4) If the application concerns a hazardous waste facility, the applicant shall broadcast notice of the hearing under sec.39.5(h) of this title. (5) Notice under paragraphs (2)(A), (3), and (4) of this subsection shall be completed at least 30 days before the hearing. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 4, 1996. TRD-9618349 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: January 8, 1997 Proposal publication date: June 18, 1996 For further information, please call: (512) 239-1966 SUBCHAPTER C. Public Notice of Water Quality Applications 30 TAC sec.39.151 The new section is adopted under Texas Water Code, sec.sec.5.103, 5.105, 26.011, 27.019, which authorize the commission to adopt any rules necessary to carry out its powers and duties under the Water Code and other laws of Texas and to establish and approve all general policy of the commission. sec.39.151. Application for Wastewater Discharge Permit, including Application for the Disposal of Sewage Sludge or Water Treatment Sludge. (a) Notice of administratively complete application. The chief clerk shall mail notice to the School Land Board if the requirements of Texas Water Code, sec.5.115 apply concerning an application that will affect lands dedicated to the permanent school fund. The notice shall be in the form required by that section. The chief clerk shall also mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice), except that mailed notice to adjacent or downstream landowners is not required for an application to renew a permit. (b) Notice of application and draft permit. (1) The applicant shall publish notice that the executive director has prepared a draft permit at least once in a newspaper regularly published or circulated within each county where the proposed facility or discharge is located and in each county affected by the discharge. The executive director shall provide to the chief clerk a list of the appropriate counties, and the chief clerk shall provide the list to the applicant. (2) The chief clerk shall mail notice to the persons listed in sec.39.13 of this title, except that mailed notice to adjacent or downstream landowners is not required for an application to renew a permit. For any application involving an average daily discharge of five million gallons or more, in addition to the persons listed in sec.39.13 of this title, the chief clerk shall mail notice to each county judge in the county or counties located within 100 statute miles of the point of discharge who has requested in writing that the commission give notice, and through which water into or adjacent to which waste or pollutants are to be discharged under the permit, flows after the discharge. (3) The notice must set a deadline to file public comment or hearing requests with the chief clerk that is not less than 30 days after newspaper publication. However, the notice may be mailed to the county judges under paragraph (2) of this subsection no later than 20 days before the deadline to file public comment or hearing requests. (4) For Texas pollutant discharge elimination system (TPDES) permits, the text of the notice shall include: (A) in addition to the requirements in sec.39.11 of this title (relating to Text of Public Notice), a general description of the location of each existing or proposed discharge point and the name of the receiving water; (B) for applications concerning the disposal of sludge, use and disposal practice(s) and the location of the sludge treatment works treating domestic sewage and use or disposal sites known at the time of permit application. (c) Limited notice for certain applications. Subsections (a) and (b) of this section do not apply if an application is described in one of the following paragraphs and the described notice requirements, if any, are completed: (1) the application is a minor amendment of a permit under Chapter 305, Subchapter D of this title (relating to Amendments, Modifications, Renewals, Transfers, Corrections, Revocation, and Suspension of Permits). In such instances, the chief clerk shall mail notice that the executive director has determined the application is technically complete to the mayor and health authorities for the city or town, and to the county judge and health authorities for the county in which the waste will be discharged. The notice shall state the deadline to file public comment, which shall end no earlier than ten days after mailing notice; (2) the application proposes the renewal of a confined animal feeding operation permit which was issued between July 1, 1974, and December 31, 1977, and the applicant does not propose to discharge into or adjacent to water in the state and does not seek to change materially the pattern or place of disposal. (d) Notice of hearing. (1) This subsection applies if an application is referred to SOAH for a contested case hearing under Chapter 80 of this title (relating to Contested Case Hearings). (2) Not less than 30 days before the hearing, the applicant shall publish notice at least once in a newspaper regularly published or circulated in each county where, by virtue of the county's geographical relation to the subject matter of the hearing, a person may reasonably believe persons reside who may be affected by the action that may be taken as a result of the hearing. The executive director shall provide to the chief clerk a list of the appropriate counties. (3) Not less than 30 days before the hearing, the chief clerk shall mail notice to the persons listed in sec.39.13 of this title, except that mailed notice to adjacent or downstream landowners is not required for an application to renew a permit. (4) For TPDES permits, the text of notice shall include: (A) in addition to the requirements in sec.39.11 of this title, a general description of the location of each existing or proposed discharge point and the name of the receiving water; (B) for applications concerning the disposal of sludge, the sludge use and disposal practice(s) and the location of the sludge treatment works treating domestic sewage and use or disposal sites known at the time of permit application. (e) Notice concerning discharges with a thermal component. For requests for a discharge with a thermal component filed pursuant to Clean Water Act, sec.316(a), 40 Code of Federal Regulations (CFR) Part 124, Subpart D, sec.124.57(a), public notice, which is in effect as of the date of TPDES program authorization, as amended, is adopted by reference. A copy of 40 CFR Part 124 is available for inspection at the library of the agency, Park 35, 12015 North Interstate 35, Austin. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 4, 1996. TRD-9618350 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: January 8, 1997 Proposal publication date: June 18, 1996 For further information, please call: (512) 239-1966 SUBCHAPTER D. Public Notice of Air Quality Applications 30 TAC sec.39.201 The new section is adopted under Texas Water Code sec.sec.5.103 and 5.105, and Texas Health and Safety Code, sec.382.017, which authorize the commission to adopt any rules necessary to carry out its powers and duties under the Water Code and other laws of Texas and to establish and approve all general policy of the commission. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 4, 1996. TRD-9618351 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: January 8, 1997 Proposal publication date: June 18, 1996 For further information, please call: (512) 239-1966 SUBCHAPTER E. Public Notice of Other Specific Applications 30 TAC sec.39.251, sec.39.253 The new sections are adopted under Texas Water Code, sec.sec.5.103, 5.105, 26.011, 27.019, and Texas Health and Safety Code, sec.sec.361.011, 361.017, and 361.024, which authorize the commission to adopt any rules necessary to carry out its powers and duties under the Water Code and other laws of Texas and to establish and approve all general policy of the commission. sec.39.251. Application for Injection Well Permit. (a) Preapplication local review committee process. If an applicant decides to participate in a local review committee process under Texas Health and Safety Code, sec.361.063, the applicant must submit a notice of intent to file an application to the executive director, setting forth the proposed location and type of facility. The applicant shall mail notice to the county judge of the county in which the facility is to be located. In addition, if the proposed facility is to be located in a municipality or the extraterritorial jurisdiction of a municipality, a copy of the notice shall be mailed to the mayor of the municipality. (b) Notice of receipt of application. When the executive director receives an application for, or notice of intent to file an application, the chief clerk shall mail notice to the state senator and representative who represent the area in which the facility is or will be located. (c) Notice of administratively complete application. (1) The chief clerk shall mail notice to the School Land Board if the requirements of Texas Water Code, sec.5.115 apply concerning an application that will affect lands dedicated to the permanent school fund. The notice shall be in the form required by that section. The chief clerk shall also mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice), and to the persons who own mineral rights within the cone of influence, as that term is defined by sec.331.2 of this title (relating to Definitions). (2) After the executive director determines that the application is administratively complete, the executive director shall mail a copy of the application or a summary of its contents to the mayor and health authority of a municipality in whose territorial limits or extraterritorial jurisdiction the solid waste facility is located. The executive director shall also mail a copy of the application or a summary of its contents to the county judge and the health authority of the county in which the facility is located. (d) Notice of draft permit. (1) The applicant shall publish notice at least once in a newspaper of general circulation in the county in which the facility is located and in each county and area which is adjacent or contiguous to each county in which the proposed facility is located. (2) The chief clerk shall mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice), to the persons who own mineral rights within the cone of influence, as that term is defined by sec.331.2 of this title, and to local governments located in the county of the facility. "Local governments" shall have the meaning provided for that term in Texas Water Code, Chapter 26. (3) If the application concerns a hazardous waste facility, the applicant shall broadcast notice under sec.39.5(h) of this title (relating to General Provisions). (4) The notice shall specify the deadline to file public comment or hearing requests. The deadline shall be not less than 30 days after newspaper publication, and for hazardous waste applications, not less than 45 days after newspaper publication. (e) Notice of public meeting. (1) If the applicant proposes a new hazardous waste facility, the executive director shall hold a public meeting in the county in which the facility is to be located to receive public comment concerning the application. If the applicant proposes a major amendment of an existing hazardous waste facility permit, the executive director shall hold a public meeting if a person affected files with the chief clerk a request for public meeting concerning the application before the deadline to file public comment or hearing requests. A public meeting is not a contested case proceeding under the APA. A public meeting held as part of a local review committee process under subsection (a) of this section meets the requirements of this subsection if public notice is provided in accordance with this subsection. (2) The applicant shall publish notice of the public meeting once each week during the three weeks preceding a public meeting under sec.39.5(g) of this title. The published notice shall not be smaller than 96.8 square centimeters or 15 square inches with the shortest dimension at least 7.6 centimeters or three inches. (3) The chief clerk shall mail notice to the persons listed in sec.39.13 of this title. (f) Notice of hearing. (1) This subsection applies if an application is referred to SOAH for a contested case hearing under Chapter 80 of this title (relating to Contested Case Hearings). (2) Newspaper notice. (A) If the application concerns a facility other than a hazardous waste facility, the applicant shall publish notice at least once in a newspaper of general circulation in the county in which the facility is located and in each county and area which is adjacent or contiguous to each county wherein the proposed facility is located. (B) If the application concerns a hazardous waste facility, the hearing must include one session held in the county in which the facility is located. The applicant shall publish notice of the hearing once each week during the three weeks preceding the hearing under sec.39.5(g) of this title. The published notice shall not be smaller than 96.8 square centimeters or 15 square inches with the shortest dimension at least 7.6 centimeters or three inches. The text of the notice shall include the statement that at least one session of the hearing will be held in the county in which the facility is located. (3) Mailed notice. (A) For all applications concerning underground injection wells, the chief clerk shall mail notice to persons listed in sec.39.13 of this title, and to the persons who own mineral rights within the cone of influence, as that term is defined by sec.331.2 of this title (relating to Definitions). (B) If the applicant proposes a new solid waste management facility, the applicant shall mail notice to each residential or business address, not listed under subparagraph (A) of this paragraph, located within 1/2 mile of the facility and to each owner of real property located within 1/2 mile of the facility listed in the real property appraisal records of the appraisal district in which the facility is located. The notice shall be mailed to the persons listed as owners in the real property appraisal records on the date the application is determined to be administratively complete. The notice must be mailed no more than 45 days and no less than 30 days before the hearing. Within 30 days after the date of mailing, the applicant must file with the chief clerk an affidavit certifying compliance with its obligations under this subsection. Filing an affidavit certifying facts that constitute compliance with notice requirements creates a rebuttable presumption of compliance with this subsection. (4) If the application concerns a hazardous waste facility, the applicant shall broadcast notice under sec.39.5(h) of this title. (5) Notice under paragraphs (2)(A), (3), and (4) of this subsection shall be completed at least 30 days before the hearing. sec.39.253. Application for Production Area Authorization. (a) Applicability. This section applies to an application for a production area authorization under Chapter 331 of this title (relating to Underground Injection Control). (b) Notice of administratively complete application. The chief clerk shall mail notice to the persons listed in sec.39.13 of this title (relating to Mailed Notice). (c) Notice of executive director's preparation of draft production area authorization. The chief clerk shall mail notice to the persons listed in sec.39.13 of this title. The notice shall specify the deadline to file with the chief clerk public comment, which is 30 days after mailing. (d) Notice of hearing. (1) This subsection applies if an application is referred to SOAH for a contested case hearing under Chapter 80 of this title (relating to Contested Case Hearings). (2) The applicant shall publish notice at least once under sec.39.5(g) of this title. (3) The chief clerk shall mail notice to the persons listed in sec.39.13 of this title. (4) Notice under paragraphs (2) and (3) this subsection shall be completed at least 30 days before the hearing. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 4, 1996. TRD-9618352 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: January 8, 1997 Proposal publication date: June 18, 1996 For further information, please call: (512) 239-1966 CHAPTER 305. Consolidated Permits SUBCHAPTER E. Actions, Notice, and Hearing 30 TAC sec.sec.305.94-305.97, 305.100-305.105, 105.107 The commission adopts the repeal of sec.sec.305.94-305.97, 305.100-305.105, and 305.107, concerning Consolidated Permits, without changes to the proposed text as published in the June 25, 1996, issue of the Texas Register (21 TexReg 5842). The commission is withdrawing the proposed sec.305.106. EXPLANATION OF ADOPTED RULES. The commission's adoption of the Phase II procedural rules on May 8, 1996, included the repeal of several sections of Chapter 305, Subchapter E (see May 28, 1996, issue of the Texas Register (21 TexReg 4798)). This adoption repeals the remaining sections of Chapter 305, Subchapter E, in their entirety, with the exception of sec.305.106. The commission is concurrently adopting new Chapter 39, concerning Public Notice. Chapter 39 replaces the sections of Chapter 305, Subchapter E that are currently repealed. The commission concludes that it should not repeal sec.305.106 at this time because the provisions in this section, concerning responding to public comment, are best located in 30 TAC Chapter 55. If the commission moves these provisions to Chapter 55, sec.305.106 will be repealed. TAKINGS IMPACT ASSESSMENT. The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code, sec.2007.043. The following is a summary of that assessment. The specific purpose of these rules is to clarify and recodify the commission's rules on public notice of proceedings. The rules will substantially advance these specific purposes by providing specific provisions on these matters in a new 30 TAC Chapter 39 and repealing duplicative requirements in Chapter 305. Promulgation and enforcement of these rules will not burden private real property which is the subject of the rules because it concerns public notice of proceedings. The following exceptions to the application of Texas Government Code, Chapter 2007, apply to these rules: the action significantly advances the health and safety purpose and imposes no greater burden than is necessary to achieve the health and safety purpose. HEARINGS AND COMMENTERS. A public hearing was held on July 18, 1996. The comment period closed July 25, 1996. No written or oral testimony was received on the proposed repeals. STATUTORY AUTHORITY. The repeals are adopted under Texas Water Code, sec.sec.5.103, 5.105, 26.011, 27.019, and Texas Health and Safety Code, sec.sec.361.011, 361.017, and 361.024, which authorize the commission to adopt any rules necessary to carry out its powers and duties under the Texas Water Code and other laws of Texas and to establish and approve all general policy of the commission. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 4, 1996. TRD-9618356 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: January 8, 1997 Proposal publication date: June 25, 1996 For further information, please call: (512) 239-1966 TITLE 34. PUBLIC FINANCE PART VI. Texas Municipal Retirement System CHAPTER 127. Miscellaneous Rules 34 TAC sec.127.4 The Texas Municipal Retirement System adopts new sec.127.4, without changes to the proposed text as published in the October 25, 1996, issue of the Texas Register (21TexReg 10514) Justification for the new rule provides that payment of benefits on behalf of a person who has retired under the Act shall not be reduced under sec.854.007 of the Act except in conformity to the Internal Revenue Code. Gary W. Anderson, director, Texas Municipal Retirement System, received no comments for or against the rule. The new section is proposed under the Government Code, sec.855.102 which provides the board of trustees of the Texas Municipal Retirement System with the authority to adopt rules necessary or desirable for effective administration of the System. The Government Code, sec.855.102, is affected by the new section. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on December 17, 1996. TRD-9618292 Gary W. Anderson Executive Director Texas Municipal Retirement System Effective date: July 7, 1996 Proposal publication date: October 25, 1996 For further information, please call: (512) 476-7577