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 4. AGRICULTURE PART VII. Texas Agriculture Resources Protection Authority CHAPTER 101. General Rules SUBCHAPTER A. Routine Procedures 4 TAC sec.101.2, sec.101.20 The Texas Agriculture Resources Protection Authority (the Authority) adopts amendments to sec.101.2, concerning meetings of the Authority, and sec.101.20 concerning submission of reports by agencies. Section 101.2 is adopted with changes to the proposal published in the May 22, 1998 issue of the Texas Register (23 TexReg 5291). Section 101.20 is adopted without changes and will not be republished. The reference to a "regular quarterly meeting" has been changed to delete the term "quarterly" from the last phrase of subsection (a), to make that subsection consistent with other amendments made to the section. The amendments are adopted to make sec.101.2 consistent with changes made by the 75th Legislature and to correct an error in sec.101.20. House Bill 1144, 75th Legislature, 1997, changed the meeting requirement of the Authority from quarterly to annually. The amendment to sec.101.2 changes to annually all references to quarterly meetings and establishes the annual meeting date as the first Monday of June each year. The amendment to sec.101.20 corrects an error to clarify when reports are to be filed. No comments were received on the proposal. The amendments are adopted under the Texas Agriculture Code, sec.76.009, as amended by House Bill 1144, 75th Legislature, 1997, which provides the Texas Agriculture Resources Protection Authority with the authority to adopt rules to carry out its duties. sec.101.2. Meetings. (a) The required annual meetings of the Texas Agriculture Resources Protection Authority (the Authority) shall be held on the first Monday of June each year at 10 a.m. at a location designated by the commissioner for use of the Authority unless a different date, hour, or place is specified by call for the regular meeting to be held alternatively at another place, date, or hour. (b) Alternative annual meetings or special meetings may be called by the presiding officer of the Authority or by a majority of the members of the Authority. A call by a majority of the members must be in writing and delivered to the commissioner at least ten days in advance of the anticipated meeting date. The call shall state the time, place, and purpose of the meeting, including a proposed agenda. (c)-(e) (No change.) 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. Filed with the Office of the Secretary of State on July 2, 1998. TRD-9810502 Dolores Alvarado Hibbs Deputy General Counsel, Texas Department of Agriculture Texas Agriculture Resources Protection Authority Effective date: July 22, 1998 Proposal publication date: May 22, 1998 For further information, please call: (512) 463-7541 TITLE 16. ECONOMIC REGULATION PART I. Railroad Commission of Texas CHAPTER 3. Oil and Gas Division 16 TAC sec.3.83 The Railroad Commission of Texas adopts amendments to sec.3.83 regarding tax exemption for three-year inactive wells without changes to the proposed text published in the April 3, 1998 issue of the Texas Register (23 TexReg 3403). The adopted amendments add the two-year inactive well incentive provided for under Senate Bill 126 (75th Legislature). As the rule will be administered, the operator of a well that has not produced oil or gas in more than one month in the two years preceding the date of application for severance tax exemption will receive notice from the commission that the well has been designated as a candidate for certification. The operator shall apply for two-year inactive well certification during the period of September 1, 1997, through August 31, 1999, to qualify for the tax exemption. The Commission received no comments on the proposal. These amendments are adopted pursuant to the Texas Natural Resources Code sec.sec.81.051, 81.052, 85.055, 85.201 - 85.202, 86.011, 86.012, 86.041, 86.042, 86.081, 86.083 - 86.090, 111.083, 111.090 and 111.133 which authorize the Railroad Commission of Texas to adopt rules for the following purposes: to govern and regulate persons and their operations under the jurisdiction of the Railroad Commission; to determine the status of gas production from all gas reservoirs, to distribute, prorate and apportion allowable production, to determine the lawful market demand for gas to be produced from each reservoir; to adjust correlative rights and opportunities; to determine the daily allowable production for each gas well; to effectuate the provisions and purposes of Chapter 86 of the Natural Resources Code; and to conserve and prevent waste of gas. The Texas Natural Resources Code, Chapter 86, is affected by the amendments. 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. Filed with the Office of the Secretary of State on July 1, 1998. TRD-9810410 Mary Ross McDonald Deputy General Counsel Railroad Commission of Texas Effective date: July 21, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 463-7008 CHAPTER 5. Rail Division SUBCHAPTER J. Rail Safety 16 TAC sec.5.802 The Railroad Commission of Texas adopts amendments to sec.5.802, concerning reports of railroad accidents/incidents, without changes to the proposed version published in the February 13, 1998, issue of the Texas Register (23 TexReg 1254). Currently, railroads are required to notify the commission immediately of any collision, derailment, fire, explosion, act of God, or other event occurring in the state of Texas that: results in the death of any railroad passenger or railroad employee; results in the death or injury of two or more persons; involves a passenger train; or involves a commodity classified as a hazardous material under 49 Code of Federal Regulations Part 172. The amendments require the railroads to notify the commission immediately upon the occurrence of any of the described events that results in the death of one or more persons. The commission received no comments from groups or associations. The commission received one comment, from United Transportation Union, which supports the amendments as proposed. The commission adopts the amendments pursuant to Texas Civil Statutes, Article 6448a, which authorizes the commission to issue rules as permitted by the Federal Railroad Safety Act of 1970. Texas Civil Statutes, Article 6448a, is the statute affected by the amendments. 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. Filed with the Office of the Secretary of State on July 1, 1998. TRD-9810411 Mary Ross McDonald Deputy General Counsel Railroad Commission of Texas Effective date: July 21, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-7008 PART II. Public Utility Commission of Texas CHAPTER 22.Practice and Procedure The Public Utility Commission of Texas adopts amendments to sec.22.31 relating to Classification in General; sec.22.33 relating to Tariff Filings; sec.22.35 relating to Informal Disposition; sec.22.51 relating to Notice for Public Utility Regulatory Act sec.2.211, sec.2.212, sec.3.210 and sec.3.211 Proceedings; sec.22.52 relating to Notice in Licensing Proceedings; and sec.22.56 relating to Notice of Unclaimed Funds with no changes to the proposed text as published in the April 3, 1998 Texas Register (23 TexReg 3405). The proposed amendments correct citations to the Public Utility Regulatory Act due to codification in the Texas Utilities Code and update the sections to reflect changes in state government and commission organization. Project Number 17709 has been assigned to these proposed amendments. The Appropriations Act of 1997, HB 1, Article IX, Section 167 (Section 167) requires that each state agency review and consider for readoption each rule adopted by that agency pursuant to Government Code, Chapter 2001. Such reviews shall include, at a minimum, an assessment by the agency as to whether the reason for adopting or readopting the rule continues to exist. The commission had invited specific comments regarding the Section 167 requirement, as to whether the reason for adopting the rules continues to exist, in the comments on these amendments. No parties commented on the Section 167 requirement or on the proposed amendments. The commission finds that the reason for adopting these sections continues to exist. SUBCHAPTER C.Classification of Applications or Other Documents Initiating a Proceeding 16 TAC sec.sec.22.31, 22.33, 22.35 These amendments are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 and sec.14.052 (Vernon 1998) (PURA) which provides the 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. Cross Index to Statutes: Public Utility Regulatory Act sec.14.002 and sec.14.052. 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. Filed with the Office of the Secretary of State on July 2, 1998. TRD-9810517 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: July 22, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 936-7308 SUBCHAPTER D.Notice 16 TAC sec.sec.22.51, 22.52, 22.56 These amendments are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 and sec.14.052 (Vernon 1998) (PURA) which provides the 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. Cross Index to Statutes: Public Utility Regulatory Act sec.14.002 and sec.14.052. 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. Filed with the Office of the Secretary of State on July 2, 1998. TRD-9810518 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: July 22, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 936-7308 TITLE 22. EXAMINING BOARDS PART XVI. Texas Board of Physical Therapy Examiners CHAPTER 341. License Renewal 22 TAC sec.341.8 The Texas Board of Physical Therapy Examiners adopts the repeal of sec.341.8 and new sec.341.8, concerning License Renewal, without changes to the proposed text as published in the April 24, 1998, issue of the Texas Register (23 TexReg 3994). The repeal and replacement of this section will clarify and update the requirements regarding inactive status. The repeal of this section will eliminate the printed copy of the board's inactive roster, which is no longer necessary due to electronic tracking. The new section will add the requirement that a licensee must notify the board of the desire to remain in inactive status at the end of each renewal cycle, and that a late fee will be charged if the notification is not timely. It also adds the requirement that the licensee must be in good standing to enter inactive status and to reinstate active status. No comments were received regarding the repeal and adoption of this section. The section is repealed under the Physical Therapy Practice Act, Texas Civil Statutes Annotated, Article 4512e, which provides the Texas Board of Physical Therapy Examiners with the authority to adopt rules consistent with this Act to carry out its duties in administering this Act. 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. Filed with the Office of the Secretary of State on June 29, 1998. TRD-9810275 John P. Maline Executive Director Texas Board of Physical Therapy Examiners Effective date: July 19, 1998 Proposal publication date: April 24, 1998 For further information, please call: (512) 305-6900 The new section is adopted under the Physical Therapy Practice Act, Texas Civil Statutes Annotated, Article 4512e, which provides the Texas Board of Physical Therapy Examiners with the authority to adopt rules consistent with this Act to carry out its duties in administering this Act. 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. Filed with the Office of the Secretary of State on June 29, 1998. TRD-9810276 John P. Maline Executive Director Texas Board of Physical Therapy Examiners Effective date: July 19, 1998 Proposal publication date: April 24, 1998 For further information, please call: (512) 305-6900 TITLE 25. HEALTH SERVICES PART XVI. Texas Health Care Information Council CHAPTER 1301. Health Care Information SUBCHAPTER A. Hospital Discharge Date Rules 25 TAC sec.sec.1301.12, 1301.17-1301.19 The Texas Health Care Information Council (Council) adopts amendments to sec.sec.1301.12, 1301.17-1301.19, concerning the procedures and types of bills required for submission, the submission of comments by the providers, the addition of data elements in the minimum data set and the removal of a reporting requirement for the public use data file. Section 1301.19 is adopted with changes to the proposed text as published in the March 20, 1998, issue of the Texas Register (23 TexReg 2943). Sections 1301.12, 1301.17, and 1301.18 are adopted without changes and will not be republished. The amended sections are being adopted to ease the burden on reporting hospitals and to produce a more accurate data file. The adopted amendment to sec.1301.12 includes new language to allow for the option of reporting billing claims reports or consolidated discharge reports. The adopted amendment to sec.1301.17 requires providers to submit comments electronically and to assure that these comments contain no information that could identify an individual patient or physician. The adopted amendment to sec.1301.18 removes the requirement that the Executive Director convert employer name and address to a Standard Industrial Classification code. Finally, the adopted amendment to sec.1301.19 increases the number of data elements to the minimum data set and clarifies source of payment code listing. The amended sections are adopted, in part, to increase the accuracy of the data, reduce the burden to the hospitals and clarify inconsistencies in the Council's original and amended hospital discharge data rules, published in the August 12, 1997 and December 19, 1997 issues of the Texas Register (22 TexReg 7490 and 22 TexReg 12493, respectively). Changes in the adopted amendments respond to non- substantive variations from the proposed amendments. The Council's representative from the Office of the Attorney General has advised that the changes affect no new persons, entities, or subjects other than those given notice and that compliance with the adopted sections will be less burdensome than under the proposed sections. Accordingly, republication of the adopted sections as proposed amendments is not required. Amended sec.1301.12 recognizes that hospitals are provided an option of submitting a consolidated bill or individual claims' bills. The amendment to sec.1301.17 establishes procedures and a timeline for comment submission and signifies that commenters are responsible for removing patient and physician identifying information. Section 1301.18 removes the reporting requirement, of converting the employer name and address data and assigning a Standard Industrial Code, from the Public Use Data File. The amendment to sec.1301.19 requires providers to submit the treating facility name, address and city. Finally sec.1301.19 clarifies the Third Party Payer Data to be submitted, and assigns standard sources of payment codes and non-standard source of payment codes. The Council did not hold a public hearing and none was requested on the proposed amendments. Additionally, the Council did not receive any written comments on the proposed amendments. The amendments are adopted under the Health and Safety Code, sec.sec.108.006, and 108.009. The Council interprets sec.108.006 as authorizing it to adopt rules necessary to carry out Chapter 108, including rules concerning data collection requirements and rules prescribing a process for providers to submit data. The Council interprets sec.108.009 as authorizing it to collect data elements relating to facility name, facility address, and facility city. sec.1301.19. Discharge Reports - Records, Data Fields and Codes. (a)-(b) (No change.) (c) In addition to the data elements contained in the Texas UB-92 Manual, the Council has defined the following data elements shown in this subsection and has defined the location in the HCFA UB-92 Electronic Format (Versions 004.1 and 004.0) where each element is to be reported. (1)-(5) (No change) (6) Facility Name - This data element shall be the name of the hospital where the services were rendered and shall be reported at Record Type 10, Field 12. (7) Facility Address - This data element shall be the actual physical address of the hospital where the services were rendered and shall be reported at Record Type 10, Field 13. (8) Facility City - This data element shall be the name of the city where the hospital that rendered the services is located and shall be reported in Record Type 10, Field 14. (d) (No change) (e) Hospitals shall submit the required minimum data set for all patients for which a discharge file is required by this title. For patients with any form of insurance, hospitals shall submit to the Council all data elements submitted to any third party payer in addition to data elements in the required minimum data set. The required minimum data set includes the following data elements as listed in paragraphs (1)-(47) of this subsection: (1)-(44) (No change.) (45) Facility Name; (46) Facility Address; (47) Facility City. (f) A submission will consist of a set of the following types of records from the HCFA UB-92 Electronic Format (Versions 004.1 and 004.0) specification as shown in paragraphs (1)-(13) of this subsection. (1)-(3) (No change.) (4) Third Party Payer Data (Record 30). The third party payer record identifies the primary insurance payer information and the secondary insurance payer for each patient. If the patient has no third party payer and is paying with personal finances, the hospital shall submit one Record 30 01 (or first Record 30) with Field 04 = A and Record 22 01 Field 09 shall be left "blank". If a non- standard source of payment code is selected, the hospital shall submit a Record 30 with Field 04 = I (Other) or "the most appropriate corresponding standard source of payment code" and the selected non-standard source of payment code shall appear in Record 22, Field 09. For example: If the patient has no third party payer and is treated as a charity patient, where no reimbursement is expected. The hospital shall submit one Record 30 01 with Field 04 = I and a Record 22 01 with Field 09 = Z, if the patient has a commercial PPO plan as the primary payer and Medicare Managed Care Plan for a secondary source of payment, the hospital shall submit two Record 30s'; Record 30 01 Field 04 = F (Commercial) and Record 22 01 Field 09 = U (Commercial PPO), Record 30 02 Field 04 = C (Medicare) and Record 22 Field 09 = V (Medicare Managed Care). Records must be in the correct payer priority sequence. The '01' (First Record 30 and Record 22) Record determines which source of payment code will be considered as primary. (5)-(9) (No change.) (10) Physician Data (Record 80). This record is for the Texas physician license number as assigned by the state licensing boards and name or Unique Physician Identification Number (UPIN) assigned by HCFA and name. (11)-(13) (No change.) 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. Filed with the Office of the Secretary of State on July 6, 1998. TRD-9810624 Jim Loyd Executive Director Texas Health Care Information Council Effective date: July 26, 1998 Proposal publication date: March 20, 1998 For further information, please call: (512) 424-6490 TITLE 28. INSURANCE PART II. Texas Workers' Compensation Commission CHAPTER 166. Accident Prevention Services 28 TAC sec.166.4 The Texas Workers' Compensation Commission (the Commission) adopts an amendment to sec.166.4, concerning required accident prevention services, with a clerical change to the proposed text as published in the May 1, 1998, issue of the Texas Register (23 TexReg 4205). As required by the Government Code, sec.2001.033(1), the Commission's reasoned justification for this rule is set out in this order which includes the preamble, which in turn includes the rule. The reasoned justification is contained in this preamble, and throughout this preamble, including how and why the Commission reached the conclusions it did, why the rule is appropriate, the factual, policy, and legal bases for the rule, a restatement of the factual basis for the rule, a summary of comments received from interested parties, names of those groups and associations who commented and whether they were for or against adoption of the rule, and the reasons why the Commission disagrees with some of the comments and proposals. Only one change, a clerical correction, was made to the text of the rule amendment as proposed. In subsection (c)(2)((E), the reference in the last sentence to "paragraph (7)" has been corrected to read "paragraph (8)". The amendment is adopted to clarify the requirements of subsection (c)(6) of the rule relating to the provision of written notification of claims experience and provision of a loss analysis to policyholders. Previously subsection (c)(6) provided that as part of a minimum accident prevention service program, policyholders must be provided written notification at least every 12 months of actual claims experience and must be provided a loss analysis if the policyholder meets the criteria of subsection (c)(2)(B) and (C). The use of the word "and" between subsection (c)(2)(B) and (C) implied simultaneous compliance with the requirements of all four subparagraphs. These criteria overlap which caused confusion as to which policyholders were required to receive a loss analysis. It was noted during insurance company inspections that some carriers were interpreting subsection (c)(6) to mean that the premium criteria under subsection(c)(2)(B) and (C) should be used to determine which policyholders must receive a written notification of claims experience as well as which policyholders must receive a loss analysis. This was not the intention of the subsection. All policyholders are to receive a written notice of claims experience at least every 12 months. In addition, there has been misinterpretation regarding whether the "every 12 months" applied to both the notification of actual claims experience and the loss analysis. Previously subsection (c)(6) was also difficult to read because it required the reader to reference another subsection of the rule to determine which policyholders must be provided with a loss analysis. The adopted amendment will eliminate the need for the reader to cross-reference subsection (c)(2)(B) and (c)(2)(C) of sec.166.4 and provides a clearer description of which policyholders must be provided with a written loss analysis at least once each 12 months. The adopted amendments delete from subsection (c)(6) the requirement to provide a loss analysis to certain policyholders and places that requirement in a separate subsection which has been added as new subsection (c)(7). Previous subsections (c)(7) and (c)(8) have been renumbered accordingly. This change separates the requirement for provision of actual claims experience from the requirement for provision of a loss analysis making it clearer which policyholders are to be provided which information and how often the information is required to be provided. New subsection (c)(7) requires written documentation of loss analysis to be provided only to policyholders with a premium of $25,000 or more, or a premium between $5,000 and $24,999, inclusive, and a loss ratio of greater than $250%. Previous subsection (c)(2)(C)(ii) was revised to add the word "inclusive" after the words "between $5,000 and $24,999" to make it clear that the limits mentioned are included. Therefore, a policyholder with a premium of $5,000 is entitled to a mandatory on-site visit every 12 months as is a policyholder with a premium of $24,999 if their loss ratio is greater than 250%. This is a clarification of the previous rule, not a change. The Compliance and Practices division of the Commission has received violation referrals due to some carriers' misinterpretation of previous subsection (c)(6) in a way that resulted in the carriers' failure to provide written notice of claims experience to all policyholders every 12 months and/or failure to provide loss analyses to the specified policyholders every 12 months. The adopted change is expected to reduce the cost to the Commission by reducing the number of notices of alleged violations processed and sent. There may be a loss of revenue to the state if the amount of administrative penalties assessed is reduced. An analysis of the referrals to the Compliance and Practices division by the Workers' Health and Safety division revealed that 18% of these referrals for the period September 1996 to August 1997 were for non-compliance with subsection(c)(6). The administrative penalties collected for violations of subsection(c)(6) have totaled $17,511 to date for referrals made since September 1996. The public benefit anticipated as a result of enforcing the amended rule will be clarification of which policyholders must be provided a loss analysis and which policyholders must be provided written notification of actual claims experience; simplification of the wording of the rule which will make it easier to understand; and increased compliance with the rule. Health care providers are not affected by the rule. There will be no anticipated increases in costs to persons who are required to comply with the rule as amended because no additional services are required to be provided. Those carriers who have been interpreting the rule as requiring the provision of accident prevention services to all policyholders may realize a reduction in costs. There may be a reduction of administrative penalties imposed for violation of subsection (c)(6) and a reduction in the costs for insurance carriers as a result of fewer enforcement proceedings. The adopted amendment will reduce the administrative time necessary for insurance carriers to provide required loss analyses to policyholders. Some carriers have interpreted the current rule to require provision of loss analyses to practically all policyholders. The amendment clarifies and limits the policyholders that must be provided a loss analysis to policyholders with high loss ratios who fall within specific premium parameters. Policyholders with premiums of less than $5,000 or between $5,000 and $24,999, inclusive, and with a loss ratio between 100% and 250%, will no longer meet the criteria for required provision of a loss analysis. This will reduce the carriers' administrative time and costs allocated for providing loss analyses. The Commission received no public comment regarding the adoption of this amendment. The amendment is adopted under the Texas Labor Code, sec.402.061, which authorizes the commission to adopt rules necessary to administer the Act; the Texas Labor Code, sec.411.061, which requires an insurance company to provide accident prevention facilities which are adequate to provide accident prevention services required by the nature of its policyholder operations and sets out what a facility must include; the Texas Labor Code, sec.411.062, which mandates the commission to establish qualifications for field safety representatives; the Texas Labor Code, sec.sec.411.063 - 411.068, which require an insurance company to provide qualified accident prevention personnel and to provide notice of the accident prevention services, set certain specifications for the program, require an insurance company to annually submit information to the commission, require biennial inspections by the division, and provide for an administrative penalty for violation of the requirements. These statutory provisions authorize the amendments to the rule by requiring the Commission to adopt rules necessary to administer the implementation of accident prevention services by insurance carriers providing workers' compensation insurance in Texas. The amendment to sec.166.4 clarifies the minimum requirements for an accident prevention program. sec.166.4. Required Accident Prevention Services. (a) An insurance company writing workers' compensation insurance in Texas shall maintain or provide accident prevention facilities and services and shall have them inspected by the division. An insurance company writing only excess or reinsurance is not required to maintain or provide such facilities or services. (b) An insurance company shall provide accident prevention services to policyholders at no additional charge. (c) An accident prevention service program as required by the Texas Labor Code, sec.411.061, shall provide, at a minimum: (1) an evaluation of the policyholder's need for accident prevention services every 12 months based on the following criteria: (A) hazard, including classification by hazard group, probability of serious or catastrophic type accidents, probability of frequent accidents, and probability of occupational illness or disease; (B) experience, including loss ratio, experience modifiers, frequency rate, and severity rate; and (C) size, including total number of employees, number of locations per policyholder business and number of employees per location. (2) service in accordance with the following requirements: (A) provide services requested by policyholders within 15 days of the date services were first requested, if appropriate services can be provided from the insurance company offices and within 30 days of the date of first request, if the services require an on-site visit. Services may be provided at a later time if circumstances require and the time is agreed upon by the policyholder. (B) an on-site visit, or provision of other appropriate services, on a periodic basis and at least every 12 months to each policyholder with: (i) a premium of less than $25,000 and a loss ratio greater than 100%; or (ii) a premium of $25,000 or more; (C) a mandatory on-site visit on a periodic basis and at least every 12 months to each policyholder with: (i) a premium of $25,000 or more and a loss ratio greater than 100%; or (ii) a premium between $5,000 and $24,999, inclusive, and a loss ratio greater than 250%; (D) a visit to the insured within three working days of notification and/or knowledge of a fatality. If the fatality occurred outside of Texas or was the result of an accident on a common carrier, no visit is required; and (E) written solicitation of comments from each policyholder, at least every 12 months, to determine the need for safety information or assistance. Such letter shall specifically explain that accident prevention services, including surveys, recommendations, training programs, consultations, analysis of accident causes, industrial hygiene and industrial health services are available at no additional charge and shall be provided upon request directly to the policyholder. This requirement is in addition to the requirements in paragraph (8) of this subsection; (3) a sufficient number of qualified personnel performing the duties of field safety representative to provide service at the frequency required in paragraph (2) of this subsection; (4) written procedures for: (A) determining the appropriate accident prevention services to be provided to a policyholder; (B) the time frame and manner in which the services identified under paragraph (2) of this subsection will be delivered to a policyholder; (C) providing safety training to policyholders and providing promotional and course materials that are available for each safety training program; and (D) providing written reports to the insurance company and the policyholders which identify hazardous conditions and work practices on the policyholders' premises; (5) written records, reports, and evidence of all accident prevention services provided to each policyholder; (6) written notification at least every 12 months to each policyholder of actual claims experience; (7) written documentation of loss analysis at least every 12 months to each policyholder with: (A) a premium of $25,000 or more; or (B) a premium between $5,000 and $24,999, inclusive, and a loss ratio of greater than 250%; (8) evidence that each workers' compensation insurance policy delivered or issued for delivery in Texas contains the following notice on the declarations page or on the front of the policy in at least 10 point bold type: "(Name of company) is required by law to provide its policyholders with certain accident prevention services as required by the Texas Labor Code, sec.411.066, at no additional charge. If you would like more information call (insurance company's loss control division or provider's telephone number). If you have any questions about this requirement, call the Division of Workers' Health and Safety, Texas Workers' Compensation Commission at 1-800-452-9595."; and (9) annual reports as required by sec.166.3 of this title (relating to Annual Report to 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. Filed with the Office of the Secretary of State on July 6, 1998. TRD-9810622 Susan M. Cory General Counsel Texas Workers' Compensation Commission Effective date: July 26, 1998 Proposal publication date: May 1, 1998 For further information, please call: (512) 440-3972 TITLE 30. ENVIRONMENTAL QUALITY PART I. Texas Natural Resource Conservation Commission CHAPTER 335.Industrial Solid Waste and Municipal Hazardous Waste SUBCHAPTER K.Hazardous Substance Facilities Assessment and Remediation 30 TAC sec.sec.335.341-335.351 The Texas Natural Resource Conservation Commission (commission) adopts amendments to sec.sec.335.341-335.351 and the repeal of sec.335.352, concerning the assessment and remediation of State Superfund sites that may constitute an imminent and substantial endangerment to public health and safety or the environment due to a release or threatened release of hazardous substances into the environment. Sections 335.342, 335.343, 335.345, 335.346, 335.348, 335.349, and 335.351 are adopted with changes to the proposed text as published in the January 23, 1998, issue of the Texas Register (23 TexReg 515). Sections 335.341, 335.344, 335.347, 335.350, and the repeal of sec.335.352 are adopted without changes and will not be republished. EXPLANATION OF ADOPTED RULE. Chapter 335, Subchapter K sets forth requirements for the State Superfund program. The rule changes to these sections will enhance the implementation of certain provisions of House Bill (HB) 2776 passed by the 75th Texas Legislature, streamline current assessment and remediation procedures of State Superfund sites, and ensure consistency with the existing cleanup standards of the Risk Reduction Rules in Chapter 335, Subchapter S. Section 335.341, concerning Purpose and Scope, establishes that Chapter 335, Subchapter K addresses the State Superfund program, and sets forth the general process for listing on the State Superfund Registry. The commission proposed to amend sec.335.341 to recognize the commission's Voluntary Cleanup Program (VCP) as a viable alternative to listing a site on the State Superfund Registry. Changes to sec.335.343 and sec.335.344 were proposed to be consistent with the amendment to sec.335.341. The commission did not receive any comments on the proposed changes to sec.335.341, and the section is adopted as proposed. Section 335.342 contains definitions specific to the State Superfund program. The commission proposed adding, amending, and deleting a number of terms and definitions in Subchapter K. In response to comments, several proposed definitions were amended in the final rule, and one proposed definition, "Unilateral order," was deleted based on comments. In addition, the commission identified several grammatical changes that were necessary. Finally, the definitions in Subchapter K are numbered to comply with Secretary of State rules for rulemakings adopted after the Subchapter K amendments were proposed. Section 335.343 establishes requirements for the ranking of facilities. The commission proposed to clarify the agency's use of the same Hazardous Ranking System (HRS) as the U.S. Environmental Protection Agency (EPA) for scoring State Superfund sites, and provide that criteria other than the HRS be considered in prioritizing sites. In addition, the commission proposed that an updated state registry identifying each facility and relative priority be published annually. The commission adopts the section as proposed, and, based on comments, has listed some of the relative priority factors other than the HRS score that might be considered such as community interests, simplicity, costs, and time. Section 335.344, concerning Delisting and Modifications, discusses the procedures for delisting a facility from the State Superfund Registry, modifying a facility's ranking, or modifying information on a facility. The commission proposed to amend sec.335.344 to delete the language that allowed "any interested person" to request a delisting or modification. This is consistent with the statutory language which does not include "interested persons." The commission did not receive any comments on this section, and the changes to the section are adopted as proposed. Section 335.345, concerning Requests for Information or Production of Documents, provides that the executive director may submit requests for information from persons with information on a site listed on the State Registry. Documents submitted under the request are public record. The commission proposed amending sec.335.345 to replace much of the existing language in the section with language that establishes clear, succinct requirements that prescribe requested documents to be delivered within 45 days. In addition, the commission proposed identifying the Public Information Act as the effective law for making records pubic. The commission adopts the subsection (b) as proposed. Based on comments, the commission adopts proposed new language in subsection (a), but retains the previous language that set forth a specific process. Section 335.346, concerning Removals and Preliminary Site Investigations, establishes the procedures for conducting removals at State Superfund sites, including the requirement that no person may conduct a removal without the authorization of the executive director and already existed in statute and rule. In addition, the section authorizes the use of the Hazardous and Solid Waste Remediation Fee Account to fund removals. The commission proposed amending sec.335.346 to provide that the executive director may conduct early planned removals at sites to substantially reduce the overall cost of cleaning up the site. There were no public comments on this section; however, the commission did make two editorial changes for purposes of consistency. Section 335.347, concerning Financial Capability Determinations, sets forth the criteria used for the agency's determination of financial capability of a potentially responsible party (PRP) to participate in an investigation and/or remediation. The commission proposed amending sec.335.347 to clarify portions of the section and to no longer require that notice of capability be provided to all PRPs. The commission did not receive any comment on this section, and the section is adopted as proposed. Section 335.348, concerning General Requirements for Remedial Investigations, establishes the requirements for investigation at State Superfund sites. The commission proposed several amendments to sec.335.348. The most notable change was the removal of the baseline risk assessment as a comparison standard for remedial action alternatives. Instead, the commission proposed that a PRP evaluate health-based and ecological risks, and then calculate cleanup levels to the satisfaction of the executive director before the remedial action is selected. This was proposed to be consistent with the proposed Texas Risk Reduction Program (TRRP) rule. The commission also proposed clarifying that the scope of the health and safety plan to include the general public in addition to on-site personnel; allowing a PRP to choose a presumptive remedy in lieu of the feasibility study to expedite the remedial process; and requiring all engineering evaluations, plans, and specifications of the feasibility study to be prepared in accordance with the Texas Engineering Practice Act. The commission adopts the three proposed changes noted above, but still retains the Baseline Risk Assessment. Although removal of the baseline risk assessment was supported by the commenters, the commission retains the baseline risk assessment because no alternative exists until the TRRP rule is adopted. In addition, the final rule incorporates grammatical changes and other changes based on comments received. Section 335.349, concerning General Requirements for Remedial Activities, discusses the agency's acceptance of the remedial action plan, public notice of the plan, modifications to the plan, and general standards for the substance of the plan. The commission proposed to change the current time frames for selecting the proposed remedial action to add procedures for modifying the proposed remedial action after the date of the initial public meeting, and to require that all documents submitted in connection with the remedial design and remedial action be prepared in accordance with the Texas Engineering Practice Act. Except for one editorial change, the section is adopted as proposed. Section sec.335.350, concerning Defense to Liability and Claims of Divisibility, establishes eligibility and procedures for defense of liability and claims of divisibility. The commission proposed several simple cleanup changes to the section to be consistent with other changes in the proposed rule. No comments were received on this section, and the commission adopts this section as proposed. Section 335.351, concerning Settlement Agreements, provides detail on the development and approval of settlement agreements between the commission and PRPs. Specifically, the section discusses mixed funding, de minimus settlements, covenants not to sue, and discharge of liability for other PRPs. The commission proposed deleting language specifically addressing partial settlements, but proposed adding subsections on remedial investigation settlements and remedial action settlements. For remedial investigation settlements, the commission proposed that in the case of a settlement offer that is less than a good faith offer to fund or perform a remedial investigation, the executive director shall consider the party's ability to pay. Based on comment, the adopted rule combines the discussion of remedial investigation and remedial action settlements into one subsection, and does not contain the proposed language on a party's ability to pay as the exclusive basis for the executive director's consideration of the offer for remedial investigation settlements. Section 335.352, concerning Adoption by Reference, referred to the federal HRS and agency and EPA guidance documents. The commission proposed repealing this section because the reference to the HRS is no longer necessary given the amendments to sec.335.343, and to allow guidance documents to be added or taken off the list administratively. The commission received no comments on the repeal of sec.335.352, and the adopted rule no longer contains the section. FINAL REGULATORY IMPACT ANALYSIS. The commission has reviewed the rulemaking in light of the regulatory analysis requirements of Texas Government Code, sec.2001.0225, and has determined that the rulemaking is not subject to sec.2001.0225 because it does not meet the definition of a "major environmental rule" as defined in the act, and it does not meet any of the four applicability requirements listed in sec.2001.0225(a). The rule does not meet the definition of major environmental rule, because the rule is not expected to adversely affect the economy, a sector of the economy, the environment, productivity, competition, jobs, or the public health and safety of the state or a sector of the state. Investigation and remediation of State Superfund sites will be streamlined and expedited by the final rule while retaining measures protective of human health and safety. This, in turn, will improve environmental protection and may have positive economic benefits, as well, as sites are more quickly restored to an active and productive use. The final rule does not meet any of the four specific applicability requirements. It does not exceed a federal standard or a requirement of delegation because the program is a state program not governed by federal law or regulation. As such, there is not a federal delegation program for State Superfund. The final rule does not exceed an express state statutory requirement because the rule changes are consistent with HB 2776, Acts of the 75th Legislature, affecting the State Superfund statute in Health and Safety Code, Chapter 361, Subchapter F. Finally, the final rule is adopted under authority provided by statutes in addition to state law providing general rulemaking authority to the commission. The other statutes are Health and Safety Code, sec.361.017 and sec.361.024, which provide authority to adopt rules governing industrial solid waste under the Solid Waste Disposal Act and the specific rulemaking authority of Health and Safety Code, Subchapter F. TAKINGS IMPACT ASSESSMENT. The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code, Annotated, sec.2007.043. The specific purpose of the rule is to enhance the existing State Superfund program and to implement provisions of HB 2776, Acts of the 75th Legislature. The rules will substantially advance this specific purpose by clarifying portions of the rule, by streamlining the assessment and remediation procedures, and by implementing certain provisions in HB 2776 where rulemaking is necessary. Promulgation and enforcement of these rules will not burden private real property which is the subject of the rules because the rules are intended to streamline existing procedures to facilitate removals and remedial actions at affected sites. These streamlining measures should reduce the administrative burden of remediating a site within the State Superfund program while continuing to be protective of human and ecological receptors. COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW. Title 31 Texas Administrative Code sec.505.11, relating to Actions and Rules Subject to the CMP, requires the commission to evaluate proposed rules to ensure consistency with the CMP. The commission has reviewed this rulemaking for consistency with the CMP goals and policies. The rulemaking does not consist of actions or rules subject to the CMP identified in sec.505.11(a)(6) and sec.505.11(b)(2) for the Texas Natural Resource Conservation Commission; therefore, the proposed rule is not subject to the CMP. HEARINGS AND COMMENTERS. The commission did not hold a public hearing on the proposed rule changes. The comment period for the proposed rules closed at 5:00 p.m., February 23, 1998. Amoco Corporation (Amoco), Association of Chemical Industry of Texas (ACIT), and the Texas Chemical Council (TCC) submitted comments on the proposed rule, and the three commenters generally supported the proposed changes. ANALYSIS OF TESTIMONY GENERAL COMMENTS. ACIT, Amoco, and TCC commented that many of the changes proposed by the commission will facilitate cleanups and greater environmental benefit will result from the limited funds available for State Superfund. In addition, both ACIT and Amoco support the comments of TCC. sec.335.342. DEFINITIONS. Regarding proposed sec.335.342, the commission received several comments. In addition, the final rule numbers all definitions in Subchapter K to comply with the rules of the Secretary of State. Concerning the definition of "Agreed order or agreed administrative order," the commission did not receive any comments, but has replaced the term "remediation" with "remedial action" for purposes of consistency. Concerning the definition of "Divisible," ACIT and TCC recommended that the definition be revised to include releases "from" a facility in addition to releases "at" a facility. In addition, ACIT and TCC also recommended removing the reference to "remedial action plan," since that term is no longer used in the rules, and adding "that" before "are capable" as a grammatical correction. The commission concurs that "at or from" a facility clarifies the definition and has made the change. The commission has also made the grammatical correction suggested. However, the commission disagrees with the comment to remove the reference to remedial action plan. The term is used in the definition to be consistent with statutory language in Health and Safety Code, sec.361.276(b). Concerning the definition of "Good Faith Offer," TCC commented that the addition of "fully and" to the existing term "effectively" adds no value and could make individual staff members feel compelled to require unreasonable activities and expenditure of funds. TCC further commented that the existing language of "effectively" is more than adequate. As such, TCC recommended removing the proposed addition in subparagraphs (A) and (B). Also concerning "Good Faith Offer," TCC recommended removing the proposed addition of "The executive director will not consider an offer a good faith offer unless it is an offer to fully fund or perform the remedial investigation/remediation" in subparagraphs (A) and (B) because it questions whether such a statement is appropriate in a definition and questions whether or not this is appropriate under existing law and the commission's rules. Specifically, TCC referred to "divisible" sites under Texas Health and Safety Code, sec.361.187(f), "mixed funding" under sec.361.199, and "settlements" under sec.361.200 in questioning the appropriateness of the additional language. TCC recommended that the executive director retain discretion to determine what is a "good faith offer." With the exception of divisibility, the commission disagrees with TCC's comments on the definition of good faith offer and has not removed the proposed additions to subparagraphs (A) and (B). Statutory time periods when there is a good faith offer should not be invoked by settlement offers less than the full amount except in the case of divisibility. The commission is concerned that removing the requirement will lead to offers that are intended to initiate statutory timeframes effectively delaying cleanup of Superfund sites and resulting in the inefficient use of state resources. The commission emphasizes that this does not in any way change the current practice of individual PRPs voluntarily joining together early in the process to develop their own good faith offers which, when taken together, would result in full funding; although inidividuals within the group would remain jointly and severally liable. In fact, the commission encourages PRPs to form groups in this manner and make good faith offers utilizing combined resources. In addition, settlements can occur prior to or after an order is issued, and the commission emphasizes that the inclusion of this requirement does not have the consequence of removing partial settlements. As noted earlier, the commission agrees that divisibility can be an exception to fully fund or perform the remedial investigation or remedial action, and the adopted rule includes a claim of divisibility as an exception. Concerning the definition of "Health and safety plan," ACIT and TCC commented that "the public" should be removed from the Health and Safety Plan. ACIT commented that public protection is an issue for the spill contingency plan. TCC noted that the plan should only address the protection of on-site personnel, as implied by the reference to Occupation and Safety Administration (OSHA) regulations to protect workers. TCC emphasized that while it fully supports protection of the public from activities at contaminated sites, the Health and Safety Plan comes into effect long after the public has been excluded from the contaminated property. For purposes of clarification, ACIT also recommended changing "...from potential hazards particular to a facility while implementing the remedial investigation or remedial action" to "...from potential hazards associated with implementing the remedial investigation or the remedial action at a particular facility." In addition, ACIT commented that the Health and Safety Plans should conform to the relevant portions of OSHA regulations. The commission disagrees with the recommendation to remove the public from the Health and Safety Plan because the commission is tasked with protecting the public. Although activities in the remedial investigation and remedial action stage should protect the public, the Health and Safety Plan should address contingencies in the event that activities and/or controls fail. For example, emissions can migrate off-site or the public can enter the facility if it is not properly secured. The commission agrees with the clarification changes and ACIT's comment on referencing the relevant portions of the OSHA regulations, and has made those changes. Concerning the definition of "Implementation schedule," ACIT and TCC recommended clarifying the definition by revising it to read, "A document describing the sequence, duration and interdependency of each activity to be conducted during a remedial investigation or remedial action." The commission agrees that the recommended change adds clarity, and the change is incorporated in the adopted rule. Concerning the definition of "Potentially responsible party," the commission did not receive any comments, but has added Health and Safety Code, sec.361.275(g), as another section in the statute that defines PRPs. Concerning the definition of "Quality assurance project plan (QAPP)," TCC recommended removing "comprehensive" from "comprehensive detail" because the term might make individual staff members feel compelled to make unreasonable demands of PRPs. ACIT and TCC recommended replacing "data quality goals" with "data quality objectives," since most existing guidance refers to objectives rather than goals. The commission agrees that changing data quality goals to data quality objectives is more accurate, and the change has been made to the adopted rule. In addition, "remedial" has been added before investigation for consistency. The commission disagrees with removing "comprehensive," because the QAPP should be comprehensive. If a person believes unreasonable demands are being made by staff, the person should notify the appropriate manager at the agency to discuss his concerns. However, the commission expects that staff's review of a QAPP will be reasonable in most, if not all, cases. Concerning the definition of "Remedial action," the commission did not receive any comments but has deleted "migrate to" before "cause an imminent and substantial danger" for clarity. Concerning the definition of "Remedial action drawings and specifications," ACIT and TCC recommended minor wording changes to clarify the definition. Specifically, TCC and ACIT recommended deleting "the" before "work," and changing "as applied to the remedial action" to "to be applied during the remedial action." The commission agrees that the suggested changes clarify the definitions, and the adopted rule incorporates the changes. Concerning the definition of "Remedial design," ACIT and TCC recommended changes to clarify the definition. First, the commenters recommended changing "engineering drawings and technical specifications" to "the remedial action drawings and specifications." Second, the commenters recommended listing the specific items for a remedial design. The commission concurs with the first suggestion and has changed "engineering drawings and technical specifications" to "the remedial action drawings and specifications." However, the commission does not concur with the recommendation to add the list of items contained in the remedial action plan because this simply repeats what is in sec.335.349. The commission has added subsection (d) to the cite for sec.335.349 to provide more specificity. Concerning the definition of "Remedial investigation," TCC commented that the proposed definition implies that all remedial investigations will include the elements in the definition, which is not consistent with sec.335.348. TCC recommended modifying the definition to read, "An investigative study, which may include, removals...." The commission agrees with TCC and has incorporated the change to the adopted rule. Concerning the definition of "Settlement offer," no comments were received, but the commission has made a grammatical change by removing a comma before "and/or." Concerning the definition of "Unilateral order," TCC recommended removing the definition because it seems inappropriate to include a definition of a new type of commission order in a subchapter on waste. TCC also commented that it was unable to determine where "unilateral order" was used in the rule. The commission agrees with the comment, and has deleted the definition of Unilateral order. sec.335.343. RANKING OF FACILITIES. Concerning proposed sec.335.343(a), TCC commented that it supports the concept of not determining the relative priorities of the sites solely on the basis of the HRS; however, TCC noted that the proposed rule is not clear on what other factors would be considered. Therefore, TCC recommended deleting subsection (a) and suggested changes to proposed subsection (c): TCC recommended adding the following language to the end of subsection (c), "The relative priority will be based on, but not limited to, such factors as the Superfund HRS scores, relative costs of investigation and remediation, and estimated time to complete the remedial actions." ACIT commented that nothing in HB 2776 changed the need to move from a mandatory priority scheme using the HRS to a discretionary system. Regarding ACIT's comment, the commission acknowledges that HB 2776 did not address the prioritization of facilities; however, as the preamble to the proposed rule noted, HB 2776 was one of several reasons for proposing amendments to the Superfund rules. The rules were also proposed to streamline current assessment and remediation procedures for State Superfund sites. The Health and Safety Code does address prioritization in sec.361.181(b), but does not specify relative factors to be considered. Therefore, the commission may establish by rule the relative factors. The commission contends that criteria such as community interests and simplicity are legitimate criteria to consider when prioritizing sites, and that the commission should have the flexibility to consider these factors. The commission generally agrees with TCC comments, except that it does not concur with the removal of subsection (a). Subsection (a) establishes the HRS as an integral part of the ranking of facilities. The rule does state that priority listing on the State Registry "may be" be based on the HRS rather than "is" based on the HRS to clarify that it is not the only criteria for ranking. The recommended change to proposed subsection (c) to identify some of the relative factors is incorporated into subsection (a). The commission has also added community interests and simplicity as other relative factors. sec.335.345. REQUESTS FOR INFORMATION OR PRODUCTION OF DOCUMENTS. Concerning proposed sec.335.345(a), ACIT and TCC commented that while proposed additions to subsection (a) are appropriate, the portions of subsection (a) proposed for deletion, language specifying the procedures that the agency must follow if a party does not comply with the initial request for information, should be retained. The commenters stated that nothing in these procedures has been changed by new law, and there is not basis for deleting this language. The commission agrees with the commenters. Health and Safety Code sec.361.182 is clear concerning the requirement that the commission adopt rules regarding notice and opportunity so a hearing before the commission on whether the requested information or documents should be produced. The commission adopts the language proposed to be added and retains the existing language regarding notice and hearing. sec.335.346. REMOVALS AND PRELIMINARY SITE INVESTIGATIONS. Concerning proposed sec.335.346, no comments were received, but two changes have been made. In proposed subsection (b), reference was made to "a safety and health" plan. To be consistent, the adopted rule refers to "a health and safety plan." In subsection (c), a reference to "sampling, testing" has been removed to be consistent with other changes in the subsection. sec.335.348. GENERAL REQUIREMENTS FOR REMEDIAL INVESTIGATIONS. TCC submitted a general comment on proposed sec.335.348 that the proposed section does not fit or flow together very well because the section is a combination of revisions to current provisions and additions of new provisions. The commission acknowledges that all the proposed changes to the sec.335.348 may have appeared confusing; however, the Texas Register has a prescribed format for proposing amendments to rules. The adopted rule presents the section without all of the underlines and brackets, and the commission considers the structure of the section to be well organized. In another general comment, TCC noted that the removal of the title "Feasibility Study" from "Remedial Investigation/Feasibility Study," is inconsistent with the exact language of the statute; however, it is a concept that is understandable and consistent with the intent of the statute. The commission agrees there may be an inconsistency with the specific statutory term, but not the underlying concepts; therefore, the removal of "Feasibility Study" from the title of "Remedial Investigation/Feasibility Study" does not result in a substantive change. TCC commented that the feasibility study, the health-based risk assessment, and the ecological risk assessment are included in the definition of "Remedial investigation" in proposed sec.335.342 but are not included as one of the elements of a remedial investigation in proposed sec.335.348(d). TCC recommended including these items as potential components of the remedial investigation in subsection (d). The commission agrees with TCC's comment, and has made the changes. The feasibility study and the baseline risk assessment are included as sec.335.348(d)(7) and (8), respectively. A baseline risk assessment is included rather than a health-based assessment for reasons noted in the response to comments on proposed sec.335.348(f). The ecological risk assessment has been added to paragraph (5) where the existing rule already addressed ecological concerns. Concerning proposed sec.335.348(e), the commission did not receive any comments, but has made a grammatical change in paragraph (2). The adopted rule now states, "a quality assurance project plan to ensure the integrity of all samples;" rather than stating, "...to assure the integrity of all samples...." Regarding proposed sec.335.348(f), TCC supported the removal of the baseline risk assessment and implementation of a health-based assessment because the baseline risk assessment serves no useful purpose and only adds to the cost and time required to complete the cleanup. The commission did not receive comment on the requirement for an ecological risk assessment. The commission proposed removing the baseline risk assessment from sec.335.348(e) and deleting the subsection. The proposed rule replaced the baseline risk assessment requirement with a general requirement to conduct a health-based risk assessment or similar study. The reason for doing so was to be consistent with the planned TRRP rule, proposed 30 TAC Chapter 350. As proposed, the TRRP rule will specify mandatory and contingent exposure pathways eliminating the need for a baseline risk assessment. The commission proposed the TRRP rule on May 15, 1998, and the rule is not expected to be final and effective until November, 1998, if adopted. Therefore, removing the baseline risk assessment would result in a 4-5 month time period in which agency staff and PRPs would not have clear regulatory direction in establishing exposure pathways and points of exposure at State Superfund sites. In addition, removing the baseline assessment would have created an inconsistency between the State Superfund program and other programs such as Voluntary Cleanup Program sites, Corrective Actions, and Closures when Risk Reduction Standard 3 remediations are performed. Standard 3 requires a baseline risk assessment for these other programs, and some may consider removing the baseline for State Superfund to be an inequity. To maintain continuity and consistency at this time, the commission is not removing the baseline risk assessment as proposed; therefore, the commission is retaining existing subsection (e), which establishes the requirement for the baseline risk assessment, and deleting proposed subsection (f). The ultimate goal, though, is to remove the baseline assessment from State Superfund and be consistent with the TRRP rule; therefore, the commission will propose amending the Subchapter K rule after it is final to remove the baseline risk assessment and reference the proposed TRRP rule. Adoption of the rule amendment would be concurrent with the adoption of the TRRP rule. This should put the two rules on the same schedule and resolve the inconsistency issue. The portion of proposed subsection (f) addressing ecological risks has been added to subsection (e). As a result, proposed subsection (e) is subsection (f). In another comment concerning proposed sec.335.348(f), Amoco and TCC supported the concept of not requiring the evaluation when standards are apparent, except that TCC recommended "and undisputed" be removed. TCC argued that someone may take issue with a determination by the agency whether that person has a valid basis or not for disputing the standards. In retaining subsection (e), the commission is also retaining the concept of not requiring the evaluation when standards are apparent. The commission agrees with the commenters concerning removal of "undisputed" for the reasons noted in the comment, and the term does not appear in the final rule. Concerning proposed sec.335.348(g), ACIT and TCC commented that the subsection was too vague to be enforceable because there is no way to define what guidance material has "credible authority." ACIT and TCC recommended removing subsection (g) until the Texas Risk Reduction Program, 30 TAC Chapter 350, rules are adopted. The commission agrees with the commenters for the reasons noted and has deleted proposed subparagraph (g). Concerning proposed new sec.335.348(i), ACIT and TCC commented that the requirement should be modified so that EPA technical guidance documents must be identified at the workplan stage so that their requirements can be incorporated into the development of the remedial investigation and not used as a method to disapprove a report after the work has been completed. The commission acknowledges that technical guidance should be identified early so that everyone has a clear understanding of the appropriate guidance to be used. In practice, the agency will recognize the requirements of the guidance in the workplan stage for the remedial investigation. However, the commission also recognizes that a significant change in a guidance document could occur that would render the previous guidance questionable in regard to protection of public health, safety, and the environment. In these extenuating circumstances, the commission wishes to retain the ability to consider other guidance documents that are protective. Therefore, the commission does not agree that the rule specifically state that guidance documents be identified at the workplan stage. Concerning proposed sec.335.348(j), ACIT and TCC recommended removing the public from the scope of the Health and Safety Plan and suggested that the requirement track changes based on comments concerning the definition of "Health and safety plan" in sec.335.342. For reasons noted earlier in response to comments on the Health and Safety Plan in sec.335.342, the commission disagrees with the commenters, and has not removed public from the Health and Safety Plan. Consistent with other changes to the definition of Health and Safety Plan, the commission has made changes to this subsection. Concerning proposed new sec.335.348(l), TCC supports presumptive remedies as a first choice in the remedy selection. Concerning proposed sec.335.348(n), ACIT and TCC commented that there is no legal basis for requiring that a feasibility study be prepared under the supervision of a licensed engineer, because any engineering evaluation included in a feasibility study is conceptual only. The commission disagrees with the commenters, noting that the requirement is consistent with the requirements of the Texas Board of Professional Engineers and the Texas Engineering Practice Act. Furthermore, the executive director received a letter from the Texas Board of Professional Engineers stating that feasibility studies must be prepared and submitted in accordance with the Texas Engineering Practice Act. The commission has edited the proposed subsection to be more clear that the entire Act applies to the preparation of these documents. sec.335.349. GENERAL REQUIREMENTS FOR REMEDIAL ACTIVITIES. Regarding proposed sec.335.349(f), ACIT and TCC recommended that language be added so that the requirement for engineering plans and specifications to be prepared under the supervision of a licensed engineer and sealed by a licensed engineer is only necessary for final approved remedial design or other reports submitted and approved by the executive director. The commenters argued that draft documents should not have to be sealed. The commission disagrees with the commenters for the same reasons noted in response to comments on proposed sec.335.348(n). The commission, though, has edited subsection (f) to be consistent with changes to proposed sec.335.348(n). sec.335.351. SETTLEMENT AGREEMENTS. Regarding proposed sec.335.351(a), the commission did not receive any comments, but has clarified that settlements may be made after an order is issued. Regarding proposed sec.335.351(b), ACIT and TCC commented that new language stating that, "In the case of an offer which is less than a good faith offer to fund or perform a remedial investigation, the executive director's consideration of the offer shall be based on a party's ability to pay" is not supported by any legislative authority. ACIT and TCC recommended combining subsections (b) and (c), which discusses remedial action settlements, because the same factors that apply to the executive director's consideration of a less than 100% offer for remedial actions should also apply to remedial investigations. The commission agrees with the commenters for the reasons stated in the comment, and the adopted rule does not contain the proposed language. The settlement factors identified for remedial actions will be applicable to remedial investigations as well. The commission also concurs with the comment to combine the discussion of remedial investigation and remedial action settlements into one subsection. In the adopted rule, proposed subsection (b) has been deleted and proposed subsection (c) is now subsection (b). Subsequent subsections are renumbered. Also, the title of new subsection (b) has been changed to "Settlements" from "Remedial action settlements" to be consistent with inclusion of remedial investigation in this subsection. The commission also made a grammatical change in sec.335.351(b)(1)(D) to correct the spelling of "non- cooperation." Concerning proposed sec.335.351(d)(1), the commission did not receive any comments, but has removed "plan" from "remedial action plan" for consistency. The commission has edited sec.335.351(c)(5)(B) for clarity. STATUTORY AUTHORITY. The amendments are adopted under the Texas Water Code, sec.5.103 and sec.26.011, which provide the commission with authority to adopt any rules necessary to carry out its powers, duties, and policies and to protect water quality in the state. The amendments are also adopted under the Texas Solid Waste Disposal Act, Texas Health and Safety Code, sec.361.017, and sec.361.024, which provide the commission the authority to regulate industrial solid waste and municipal hazardous wastes and all other powers necessary or convenient to carry out its responsibilities. The Texas Solid Waste Disposal Act, Texas Health and Safety Code, Subchapter F provides additional authority to adopt rules specific to the registry and cleanup of certain hazardous waste facilities. sec.335.342.Definitions. Definitions set forth in the Act that are not specifically included in this section shall also apply. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Agreed order or agreed administrative order - An administrative order issued by the commission and agreed to by one or more PRPs for the purpose of settling potential liability for the remedial investigation and/or remedial action concerning a facility proposed for listing, or listed on, the State Registry. (2) Divisible - Hazardous substance(s) released or threatened to be released at or from a facility that are capable of being managed separately under a remedial action plan. (3) Facility - In accordance with the Act, sec.361.181(c), a facility means: (A) (No change.) (B) any site or area where a hazardous substance has been, deposited, stored, disposed of, or placed or otherwise come to be located, but does not include any consumer product in consumer use or any vessel. (4) Feasibility study (FS) - A study which describes and evaluates a set of remedial action alternatives for effectively mitigating or minimizing damage to, and for providing adequate protection of, the public health and safety and the environment in accordance with the requirements of sec.335.348 of this title (relating to General Requirements for Remedial Investigations). (5) Good faith offer - A written proposal by one or more PRPs which is not contingent on participation of other PRPs which, in the judgment of the executive director, will: (A) in the case of a good faith offer to fund or perform a remedial investigation, fully and effectively determine the nature and extent of the release or threatened release of hazardous substances and its impact on air, soils, groundwater, and surface water, both within and beyond the boundaries of the facility. The executive director will not consider an offer a good faith offer unless it is an offer to fully fund or perform the remedial investigation except in a claim of divisibility; or (B) in the case of a good faith offer to fund or perform a remedial action, fully and effectively mitigate or minimize damage to, and provide adequate protection of, the public health and safety and the environment. The executive director will not consider an offer a good faith offer unless it is an offer to fully fund or perform the remedial action except in a claim of divisibility. (6) Hazard ranking system - The method used by the Environmental Protection Agency and the agency to evaluate the relative potential of hazardous substance releases to cause health or safety problems, ecological or environmental damage. The scoring system was developed by the United States Environmental Protection Agency as set out in 40 Code of Federal Regulations Part 300, Appendix A, as amended. (7) Hazardous and Solid Waste Remediation Fee Account - The fund as described in the Act, sec.361.133. (8) Health and safety plan - A document that addresses the protection of on-site personnel and the public from potential hazards associated with implementing the remedial investigation or remedial action at a particular facility. The plan shall conform to applicable Occupational Safety and Health Administrative Rules, including but not limited to relevant portions of 29 Code of Federal Regulations sec.1910 and sec.1926. (9) Imminent and substantial endangerment - A danger is imminent if, given the entire circumstances surrounding each case, exposure of persons or the environment to hazardous substances is more likely than not to occur in the absence of preventive action. A danger is substantial if, given the current state of scientific knowledge, the harm to public health and safety or the environment which would result from exposure could cause adverse environmental or health effects. (10) Implementation schedule - A document describing the sequence, duration and interdependency of each activity to be conducted during a remedial investigation or remedial action. (11) Nonparticipating PRPs - Potentially responsible parties who: (A) are unwilling or unable to join in the making of a good faith offer; (B) are unwilling or unable to become a party to an agreed order to perform an RI/FS, similar study, or remedial action; or (C) intentionally violate the terms of an agreed order so as to substantially interfere with the achievement of the purposes of the agreed order. (12) Operation and maintenance plan - A document detailing the necessary operation and maintenance, inspection, and monitoring activities, including schedules, required to maintain the attainment of performance goals after completion of the implementation phase of the remedial action. (13) Oversight costs - All administrative costs and costs for technical and legal services incurred by the agency, or agents or contractors for the agency, incurred in the determination of superfund eligibility, identification of PRPs, oversight of the remedial investigation and remedial action, plus all such costs incurred in verifying compliance by PRPs with the terms of any agreed order which may be issued and costs incurred by the agency for delisting a site from the State Registry and cost recovery costs. (14) Potentially responsible party (PRP) - A person potentially responsible for solid waste as defined in the Act sec.361.271 and sec.361.275(g). (15) Presumptive remedy - A remedy in a commission document titled "Presumptive Remedies" which describes site specific remedial alternatives for a facility in lieu of a full feasibility study as required by sec.335.348 of this title (relating to General Requirements for Remedial Investigations). (16) Quality assurance project plan (QAPP) - A document describing in comprehensive detail the necessary quality assurance, quality control, and other technical activities that must be implemented to meet the data quality objectives during a remedial investigation or remedial action. (17) Remedial action (RA) - An action, including remedial design and post- closure care, consistent with a remedy taken instead of or in addition to a removal action in the event of a release or threatened release of hazardous substances into the environment to prevent or minimize the release of a hazardous substance so that the hazardous substance does not cause an imminent and substantial danger to present or future public health and safety or the environment. (18) Remedial action drawings and specifications - Documents that include the drawings showing the scope, extent, and character of the work to be performed during the remedial action and the written technical descriptions of materials, equipment, remediation systems, standards and workmanship to be applied during the remedial action. (19) Remedial design (RD) - A design consisting of the remedial action drawings and specifications and other documents developed for the remedial action in accordance with the requirements of sec.335.349(d) of this title (relating to General Requirements For Remedial Activities). (20) Remedial investigation (RI) - An investigative study which may include removals, feasibility study, baseline risk assessment, ecological risk assessment, or similar study, designed to adequately determine the nature and extent of a release or threatened release of hazardous substances and, as appropriate, its impact on air, soils, groundwater, and surface water, both within and beyond the boundaries of the facility in accordance with the requirements of sec.335.348 of this title (relating to General Requirements for Remedial Investigations). (21) Responsible party (RP) - A person responsible for solid waste as defined in the Act, sec.361.271 and sec.361.275(g). (22) Sampling and analysis plan (SAP) - A document describing the specific sampling and analytical protocols to be implemented during a remedial investigation or remedial action. (23) Settlement offer - A written offer by a potentially responsible party to fund or perform less than a full and complete remedial investigation and/or remedial action. (24) Spill/release contingency plan - A document describing the sequences, procedures, and requirements to be implemented to protect both workers at the facility and the public from hazardous exposure to releases or spills resulting from the remedial action. (25) Substantial change in use - A physical or functional alteration of a facility, the effect of which is to interfere significantly with a proposed or ongoing remedial investigation, proposed, ongoing, or completed remedial action or to expose public health and safety or the environment to a significantly increased threat of harm. The term includes, but is not limited to, actions such as the erection or razing of a building or other structure at the facility, the use of a facility for agricultural production, the paving over of a facility, the creation of a park or other public or private recreational use on the facility, and any other alteration of the site or activity which could interfere with the performance of a remedial investigation or remedial action. sec.335.343.Ranking of Facilities. (a) The relative priority for action needed at a facility investigated by the executive director for possible listing on the State Registry may be based on the following relevant factors: (1) A superfund hazard ranking system (HRS). The Superfund HRS is a methodology designed to determine a numerical score for a facility based on the judgment of the executive director concerning various factors which may impact the public health and safety or the environment. (2) Other relevant factors including: (A) community interests; (B) simplicity; (C) costs of investigation and remedial action; (D) estimated time to complete the remedial action; or (E) any other factor that the executive director determines is relevant and significant to the priority ranking of the facility. (b) Upon appropriate investigation by the executive director, a facility will be assigned a Superfund HRS score. A facility may be proposed for listing on the State Superfund Registry if it is assigned a Superfund HRS score 5.0 or greater. (c) The relative priority for action at facilities listed on the State Registry will be periodically reviewed and revised by the executive director as necessary to accurately reflect the need for action at the facilities. (d) The commission shall annually publish an updated state registry identifying each facility and the relative priority for action at each listed facility. (e) If a facility has been deleted in accordance with sec.335.344 of this title (relating to Delisting and Modifications) based, in whole or in part, on the facility being addressed pursuant to Chapter 333 of this title (relating to Voluntary Cleanup Programs), and the executive director determines that the facility is no longer being adequately addressed, the facility shall automatically revert to the status the facility had immediately before the facility was deleted from the Registry in accordance with the Act, sec.361.189. No public meeting is required under this subsection. sec.335.345.Requests for Information or Production of Documents. (a) The executive director may submit requests for information and requests for production of documents as authorized by the Act, sec.361.182 to any person who has information or documents which in the executive director's opinion are necessary for the adequate investigation or remediation of a facility listed on the Registry or that the executive director has reason to believe should be listed on the State Registry. The requested information or documents shall be produced within forty-five days from the date of request. If the requested information or documents are not produced within forty-five days, the executive director may petition the commission to issue an order directing compliance with the requests for information or production of documents. The executive director shall serve a copy of the petition on the person to whom the request for information or production of documents was directed at least 20 days prior to the scheduled date of commission action on the petition. The person to whom the request for information or production of documents was directed may appear before the commission and present evidence and argument on the petition or in support of a claim asserted under subsection (b) of this section, or the commission may refer the matter to the office of hearings examiners for the taking of evidence. (b) Information or documents provided to the executive director in accordance with this section are subject to the Public Information Act and its exceptions. sec.335.346.Removals and Preliminary Site Investigations. (a) For facilities listed on the Registry or proposed for listing on the Registry, no person may perform any partial or total removals at such facility or conduct preliminary investigations of any type at such facility without the advance written authorization of the executive director after notice and opportunity for comment to all other potentially responsible parties. (b) To expedite the executive director's consideration of a proposal to conduct removals or preliminary investigations at a facility, the person proposing such actions shall submit to the executive director a workplan describing the removal and/or investigation activities proposed, a health and safety plan, a quality assurance project plan, and an implementation schedule for completing various subtasks identified in the workplan. (c) Any authorization by the executive director to perform preliminary investigations, investigation activities, or partial or total removals at a facility does not constitute a finding or determination by the executive director that such preliminary investigation constitutes an approved remedial investigation or that the removal constitutes the final remedial action. An authorization by the executive director to perform any partial or total removals or investigation activities also does not constitute a determination or finding by the executive director that any release or threatened release attributed to the removed materials is divisible as defined in the Act, sec.361.276. (d) Pursuant to the Act,sec.361.133(c)(1)-(4) and (g), the executive director may use money in the Hazardous and Solid Waste Remediation Fee Account for necessary and appropriate removal and remedial action at sites at which solid waste or hazardous substances have been disposed if funds from a liable party, independent third party, or the federal government are not sufficient for the removal or remedial action. The executive director may also perform removals under the Act, sec.361.133(c)(5) to protect human health and the environment. sec.335.348.General Requirements for Remedial Investigations. (a) Unless otherwise directed by the commission, a remedial investigation as approved by the executive director shall be completed before the executive director's selection of the remedial action, except for removals and preliminary site investigations pursuant to sec.335.346 of this title (relating to Removals and Preliminary Site Investigations). (b) A similar study may be approved by the executive director as an appropriate alternative to the performance of a full remedial investigation when necessary to avoid delay, to make more effective use of resources or when such similar study is sufficient to adequately characterize a site. (c) The contents of the remedial investigation as approved by the executive director, will depend on the particular circumstances of each specific facility. Under any remedial investigation; however, sufficient information must be collected and evaluated to allow the executive director to select an appropriate remedial action. (d) A remedial investigation may include the following, as appropriate to a particular facility, for the purpose of allowing the executive director to select an appropriate remedial action: (1) (No change.) (2) investigations to adequately characterize the nature and extent of hazardous substances in the soils encompassing the facility. Properties associated with the soils which would influence the type and rate of hazardous substance migration or affect the ability to implement alternative remedial actions shall be characterized. (3) investigations of hydrogeology and geology to adequately characterize the nature and extent of hazardous substances in the ground water and the features which affect the fate and transport of those hazardous substances. This should include, but is not limited to, the physical properties and distribution of bedrock and unconsolidated materials, groundwater flow rate and gradient for contaminated and potentially contaminated aquifers, groundwater divides, areas of groundwater recharge and discharge, and location of public and private groundwater wells. (4) (No change.) (5) an ecological risk assessment (6) descriptions of the location, quantity, horizontal and vertical extent, concentrations and sources of hazardous substances. Information on the physical and chemical characteristics and the toxicological effects of hazardous substances shall be provided, if available. (7) a feasibility study. (8) a baseline-risk assessment. (e) A baseline risk assessment will be conducted in accordance with the Environmental Protection Agency's Risk Assessment Guidance for Superfund - Volume 1: Human Health Evaluation Manual or other equivalent EPA guidance document. An ecological risk assessment shall also be completed before the executive director's selection of the proposed remedial action. The evaluation may not be required when the executive director determines that remediation standards are apparent and adequately protective of human health and the environment. (f) A workplan for a remedial investigation shall be submitted to the executive director for final review and possible modifications and shall include the following: (1) a sampling and analysis plan covering all sampling activities to be undertaken pursuant to the remedial investigation; (2) a quality assurance project plan to ensure the integrity of all samples taken pursuant to the remedial investigation; and (3) a health and safety plan to describe steps to be taken to assure the health and safety of all personnel engaged in implementing the remedial investigation; and (4) an implementation schedule for all aspects of the remedial investigation. (g) Treatability studies may be required as necessary to provide information to evaluate remedial action alternatives. (h) In evaluating the acceptability of a remedial investigation, the executive director may require the utilization of published agency and EPA technical guidance documents. (i) A health and safety plan shall be prepared that addresses the protection of on-site personnel and the public from potential hazards associated with implementing the remedial investigation at a particular facility. (j) A report shall be prepared at the completion of the remedial investigation and submitted to the executive director for review, possible modification and final approval. (k) The selection of the remedial alternative shall be made according to the process outlined in the guidance document "Presumptive Remedies for Soils at Texas State Superfund Sites" or other applicable presumptive remedy documents, unless the executive director determines that a feasibility study must be conducted. (l) The remedial action for a particular facility shall be selected based on the remedial alternative that the executive director determines to be the lowest cost alternative which is technologically feasible and reliable, effectively mitigates and minimizes damage to the environment, and provides adequate protection of the public health and safety and the environment. (m) All engineering evaluations, plans, and specifications included in the feasibility study or similar study must be prepared and submitted in accordance with the Texas Engineering Practice Act. sec.335.349.General Requirements For Remedial Activities. (a) Based on the proposals set forth in the feasibility study, the presumptive remedy, or other similar study, elements from different remedial action alternatives as proposed in a remedial investigation as well as any other information available to the executive director, the executive director shall select a proposed remedial action. After the selection of the proposed remedial action, the executive director shall hold a public meeting to discuss the proposed action, as required by the Act, sec.361.187. This meeting is not a contested case hearing within the meaning of Texas Government Code, Chapter 2001. Persons desiring to submit comments are encouraged to do so prior to the public meeting. Written comments should be submitted to the executive director at least 5 days prior to the date set for public meeting. All other comments shall be presented in the public meeting. (b) This subsection describes the administrative procedures for modifying the proposed remedial action after the date of the initial public meeting to discuss the remedial action for the site. (1) A minor change in the proposed remedial action is one that does not significantly affect the scope, performance, or cost of the proposed remedial action. The executive director will document minor changes in the project records without the necessity of another public meeting. (2) A significant change in the proposed remedial action is one that materially affects the scope, performance, or cost of the proposed remedial action, but uses the same approach and results in a remedial action as least as protective as originally proposed. For significant changes, the executive director shall notify the PRPs by certified mail of the changes and issue a public notice in the Texas Register and in a newspaper of general circulation in the county in which the facility is located. The notice shall provide information regarding the significant changes in the proposed remedial action; however, a public meeting or opportunity for public comment is not required. If the commission has not entered into an administrative order to perform the remedial action, a significant change will extend the schedules provided in the Act, sec.361.187(d). (3) A fundamental change in the proposed remedial action is one that uses a different approach to achieve the remedial action goals, or one that uses the same approach, but results in a remedial action that is less protective than that originally proposed. A major change in technology to address the contamination is a fundamental change. For fundamental changes, the executive director shall hold another public meeting to discuss the proposed changes in accordance with the Act, sec.361.187, and as described in subsection (a) of this section. This newly proposed remedial action shall supersede the remedial action originally proposed in the initial public meeting. (c) Engineering documents submitted in connection with the remedial action must be approved by the executive director and must demonstrate compliance with relevant cleanup standards, except as provided in the Act, sec.361.193. The scope of these documents will depend on the nature and complexity of the proposed remedial action and may vary from facility to facility. (d) The executive director shall establish the minimum requirements for the remedial design, based on the specific characteristics of the facility and the remedial action. If appropriate, the executive director may waive any of the requirements in this subsection for a particular facility. Typical remedial design requirements include, but are not limited to: (1) remedial action drawings and specifications; (2) quality assurance project plan; (3) sampling and analysis plan; (4) spill/release contingency plan; (5) implementation schedule; and (6) an operations and maintenance plan. (e) A health and safety plan shall be prepared that addresses the protection of on-site personnel and the public from potential hazards particular to a facility while implementing the remedial action. (f) All engineering plans and specifications prepared for remedial activities must be prepared and submitted in accordance with the Texas Engineering Practice Act. sec.335.351.Settlement Agreements. (a) General purpose. The commission encourages PRPs to enter into negotiated settlement agreements which shall include an agreed administrative order with the commission so that an effective remedial investigation and remedial action of a facility can be quickly implemented while at the same time resolving PRP's apparent liability for the facility. The goal of the executive director in negotiating PRP settlements is to obtain a complete remedial investigation and remedial action of the facility by PRPs, or to collect from PRPs 100% of the agency's cost of performing a complete remedial investigation and remedial action of the facility. PRPs shall have 60 days after the end of the good faith offer period to negotiate a settlement/final administrative order. Settlement negotiations shall run concurrently with agreed order negotiations. Settlements may also be made after an order is issued. (b) Settlement. (1) In the case of an offer which is less than a good faith offer to fund or perform a remedial investigation or remedial action, the executive director's consideration of the offer may be based on: (A) the relationship between the parties' actions in storing, processing, and disposing of hazardous substances and the remedial action required to eliminate the release or threatened release; (B) the volume of hazardous substances each party is responsible for at the site to the extent that the costs of the remedial action are based on the volume of waste present; (C) consideration of toxicity or other waste characteristics if those characteristics affect the cost to eliminate the release or threatened release; (D) a party's cooperation with state agencies, its cooperation or non- cooperation with the pending efforts to eliminate the release or threatened release, or a party's actions concerning storing, processing, or disposing of hazardous substances, as well as the degree of care that the party exercised; and (E) a party's ability to pay. (2) The commission may consider a settlement proposal for remedial investigation and/or remedial action of less than 100% of a facility's remedial investigation and/or remedial action costs. Upon settling with cooperative parties, the commission will vigorously seek all remaining relief, including full cost recovery of monies expended from the Hazardous and Solid Waste Remediation Fee Account, including penalties, damages, and interest where appropriate, as well as the agency's oversight costs, from parties whose non-cooperation prevented the achievement of a complete settlement. (c) Mixed funding. Mixed Funding means use of funds from federal, state, and private party sources, or any combination of those sources, to fund a timely remedial action. Mixed funding may be used in the following circumstances. (1) In order to achieve an expeditious remedial action of a facility listed on the Registry, the commission may agree to reimburse parties to a settlement agreement from the Hazardous and Solid Waste Remediation Fee Account with interest, for certain costs incurred as a result of the timely implementation of the remedial action that the parties agree to perform but which the commission agrees to finance in whole or in part. The commission may agree to utilize funds from whatever other federal or state sources are available to the commission for the funding of a facility remediation. (2) Mixed funding shall be provided only to PRPs whom the commission has found to be eligible and who have entered into an agreed administrative order with the commission. The agreed administrative order shall identify remedial action tasks to be addressed by the mixed funding, costs to be borne by the Hazardous and Solid Waste Remediation Fee Account and the terms of agreement. (3) A PRP must submit sufficient documentation, as requested by the executive director, to support its request for mixed funding. (4) The commission's granting of a request for mixed funding does not diminish or alter the standard and scope of liability as set out in the Act. The commission will not approve mixed funding based solely on the grounds that a share of wastes at a site may be attributable to an unknown or financially nonviable party. In addition, the availability or the amount of any fund- financing for a particular site will not be dependent on consistency with any volumetric allocation. (5) Good faith negotiations and early cooperation of settlers will be considered in mixed funding requests. The executive director shall only consider mixed funding for remedial action if the PRP meets the following conditions: (A) the PRP participated in the remedial investigation; or (B) the PRP did not participate in the remedial investigation and the PRP agreed to reimburse all agency expenses associated with the remedial investigation. (6) If a PRP is found to be eligible for mixed funding, the executive director shall make an initial determination regarding the amount of funding to be provided. This determination is solely within the discretion of the executive director and is not subject to adjudication in an administrative hearing or appeal to the commission. A determination of eligibility is not a funding commitment as actual funding will depend on availability of funds and approval of the commission (7) Where a remedial action has been completed at a facility pursuant to a mixed funding agreement, the Hazardous and Solid Waste Remediation Fee Account shall be subject to an obligation for subsequent remedial actions at the same facility only to the extent that such subsequent actions are necessary by reason of failure of the original remedial action. Such obligation shall be in a proportion equal to, but not exceeding, the proportion contributed by the fund for the original remedial action. The fund's obligation for such future remedial action may be met through fund expenditures, or through payment by parties who were not signatories to the original agreement. (d) De minimis settlements. The commission may reach a final settlement with a PRP for only a minor portion of the response costs at a facility if the conditions in either of the following paragraphs (1) or (2) of this subsection are met. (1) A PRP can demonstrate the following: (A) the amount of the hazardous substances contributed by a particular PRP is minimal in comparison to the amounts of other hazardous substances at the facility; or (B) the toxicity or other hazardous effects of the hazardous substances contributed by a particular PRP are minimal in comparison to the toxicity or other hazardous effects of other hazardous substances at the facility. (2) The PRP can demonstrate that it: (A) is the owner of the real property on or in which the facility is located; (B) did not conduct or permit the generation, transportation, storage, treatment, or disposal of any hazardous substance at the facility; and (C) did not contribute to the release or threatened release of a hazardous substance at the facility through any action or omission. (3) Paragraph (2) of this subsection does not apply if the PRP purchased the real property with actual or constructive knowledge that the property was used for the generation, transportation, storage, treatment, or disposal of any hazardous substance. (e) Covenants not to sue. (1) The commission may, in its discretion, provide any PRP with a covenant not to sue concerning any existing or future liability resulting from a release or threatened release of a hazardous substance addressed by a remedial action if each of the following conditions is met: (A) the covenant not to sue is in the public interest as determined by criteria set forth in paragraph (2) of this subsection; (B) the granting of the covenant not to sue would expedite a remedial action approved by the commission; and (C) the PRP is in full compliance with the terms of any order issued by the commission for response to the release or threatened release for the facility concerned. (2) In assessing the appropriateness of granting a covenant not to sue and in determining the appropriate legal scope of such a covenant, the commission shall consider whether the covenant is in the public interest on the basis of such factors as the following: (A) the effectiveness and reliability of the remedial action, in light of other alternative remedies considered for the facility concerned; (B) the nature of the environmental risks remaining at the facility; (C) the extent to which performance standards are included in the order or decree; (D) the extent to which the response provides a complete remedial action for the facility, including a reduction in the hazardous nature of the substances at the facility; (E) the extent to which the technology used in the remedial action is demonstrated to be effective; (F) whether the Hazardous and Solid Waste Remediation Fee Account or other sources of funding would be available for any additional remedial actions that might eventually be necessary at the facility; and (G) whether the remedial action will be carried out, in whole or in significant part, by the PRPs themselves. (3) A covenant not to sue shall be subject to the satisfactory performance by the PRP of its obligations under any order issued by the commission for remedial actions to address the release or threatened release of a hazardous substance at the facility. A covenant not to sue concerning future liability for remediation of the facility shall not take effect until the executive director certifies that the remedial action has been completed or the ordered action has been performed in accordance with any such order issued by the commission. (4) A covenant not to sue a PRP concerning future liability for remediation of a facility may include an exception to the covenant that allows the commission to sue such person where such liability arises out of conditions which are unknown to the executive director at the time he certifies under paragraph (3) of this subsection that the remedial action has been completed at the facility. A covenant not to sue may provide that such future liability may be limited to the same proportion as that established in the original settlement agreement or order issued by the commission. (f) Discharge of liability for other PRPs. Any settlement agreement with the commission which resolves a PRP's liability for remediation of a facility does not discharge the liability of any other PRP unless its terms so provide, but it reduces the potential liability of the other PRPs by the amount of the settlement. A PRP will be afforded the opportunity to comment on any settlement agreement with the commission to which it is not a party. 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. Filed with the Office of the Secretary of State on July 2, 1998. TRD-9810533 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: July 22, 1998 Proposal publication date: January 23, 1998 For further information, please call: (512) 239-6087 30 TAC sec.335.352 The repeal is adopted under the Texas Water Code, sec.5.103 and sec.26.011, which provide the commission with authority to adopt any rules necessary to carry out its powers, duties, and policies and to protect water quality in the state. The repeal is also adopted under the Texas Solid Waste Disposal Act, Texas Health and Safety Code, sec.361.017, and sec.361.024, which provide the commission the authority to regulate industrial solid waste and municipal hazardous wastes and all other powers necessary or convenient to carry out its responsibilities. The Texas Solid Waste Disposal Act, Texas Health and Safety Code, Subchapter F provides additional authority to adopt rules specific to the registry and cleanup of certain hazardous waste facilities. 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. Filed with the Office of the Secretary of State on July 2, 1998. TRD-9810532 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: July 22, 1998 Proposal publication date: January 23, 1998 For further information, please call: (512) 239-6087 TITLE 31. NATURAL RESOURCES AND CONSERVATION PART II. Texas Parks and Wildlife Department CHAPTER 53.Finance SUBCHAPTER A.License Fees and Boat and Motor Fees 31 TAC sec.53.1 The Texas Parks and Wildlife Commission, in a regularly scheduled public hearing June 4, 1998 adopted amendment of sec.53.1, concerning License Issuance Procedures, Fees, Possession and Exemption Rules without changes to the proposed text as published in the May 1, 1998 issue of the Texas Register (23 TexReg 4213). The adopted amendment implements statutory changes and agreements reached with Louisiana that simplify licensing requirements for anglers fishing waters along the Texas-Louisiana border. Legislative changes in HB 2542 gave the Commission authority to enter into agreements to allow persons who hold valid Louisiana non-resident fishing licenses to fish all waters that form a common boundary between Texas and Louisiana without obtaining a Texas non-resident license. Louisiana representatives have agreed to this action. The amendment allows residents of Louisiana who meet the licensing requirements of their state to fish all waters that form a common boundary between Texas and Louisiana. This action is contingent on Louisiana allowing the same privileges to persons who hold valid Texas resident fishing licenses which they have done in the past. Legislative changes in HB 2542 deleted specific references to licensing requirements for border waters with Louisiana. Changes to sec.53.1(d) are needed to reinstate these agreements in our regulations. The Department received no public comment concerning the proposed amendment. The new amendments are adopted under Parks and Wildlife Code, sec.sec.41.003- 41.006, which provides the Parks and Wildlife Commission with the authority to enter into reciprocal license agreements with states having a common border with Texas to govern the issuance and fees for fishing and migratory waterfowl hunting licenses. 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. Filed with the Office of the Secretary of State on June 29, 1998. TRD-9810293 Bill Harvey, Ph.D. Regulatory Coordinator Texas Parks and Wildlife Department Effective date: September 1, 1998 Proposal publication date: May 1, 1998 For further information, please call: (512) 389-4642 TITLE 34. PUBLIC FINANCE PART I. Comptroller of Public Accounts CHAPTER 3.Tax Administration SUBCHAPTER N.County Sales and Use Tax 34 TAC sec.3.251 The Comptroller of Public Accounts adopts an amendment to sec.3.251, concerning adopting or abolishing county tax, without changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1515). House Bill 92, 75th Legislature, 1997, amended the Local Government Code effective September 1, 1997, by adding Chapter 334 and Chapter 335 concerning sports and community venue projects and districts. The amendment explains that the notification requirements, effective dates, and contested election provisions in sec.3.251 apply to an election to impose sales and use tax for a sports and community venue project that increases a county tax rate. The amendment also replaces all references to Texas Civil Statutes, Articles 1118x or 1118y with references to the Transportation Code, Chapters 451 or 452. The provisions in Articles 1118x and 1118y have been recodified in the Transportation Code. No comments were received regarding adoption of the amendment. This amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements acts by the 75th Legislature, 1997, amending the Local Government Code. 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. Filed with the Office of the Secretary of State on July 1, 1998. TRD-9810390 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: July 21, 1998 Proposal publication date: February 20, 1998 For further information, please call: (512) 463-4062 SUBCHAPTER O.State Sales and Use Tax 34 TAC sec.3.285 The Comptroller of Public Accounts adopts an amendment to sec.3.285, concerning resale certificate; sales for resale, without changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1515). The Tax Code was amended effective October 1, 1997, by adding sec.151.154(f) as a clarification. The amendment clarifies that a retailer is liable for sales tax on the original purchase price of a taxable item if the retailer purchases the taxable item tax free for resale and then uses the taxable item as a trade-in on the purchase of another taxable item. No comments were received regarding adoption of the amendment. This amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements the acts of the 75th Legislature, 1997, amending the Tax Code, sec.151.154. 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. Filed with the Office of the Secretary of State on July 6, 1998. TRD-9810617 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: July 26, 1998 Proposal publication date: February 20, 1998 For further information, please call: (512) 463-4062 34 TAC sec.3.298 The Comptroller of Public Accounts adopts an amendment to sec.3.298, concerning amusement services, with changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1516). The Tax Code was amended effective October 1, 1997, to add sec.151.432, concerning the deduction of tax on a ticket or admission document to an amusement service. The amendment allows resellers of tickets or admission documents to amusement services to deduct from reported taxable sales the adjusted value of tickets purchased from non-permitted purchasers provided the tickets or admission documents had the tax included. Non-substantive grammatical corrections were made in subsections (a)(1)(A)(vii), (a)(1)(D)(xv), and (i)(3)(A). No comments were received regarding adoption of the amendment. This amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements acts by the 75th Legislature, 1997, amending the Tax Code by adding sec.151.432, effective October 1, 1997. sec.3.298.Amusement Services. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Amusement services - Entertainment, recreation, sport, pastime, diversion, or enjoyment that is a pleasurable occupation of the senses. Amusement services and places offering amusement services include, but are not limited to, the following: (A) live or recorded performances, whether by individual ticket or by season tickets: (i) ballet performances; (ii) circuses; (iii) ice skating shows; (iv) motion pictures; (v) musical concerts; (vi) opera performances; (vii) outdoor theatres; and (viii) theatres (movies and plays); (B) exhibitions or displays: (i) animal shows (contests, exhibitions); (ii) antique shows; (iii) aquatic shows; (iv) arts and crafts, and art shows (fairs); (v) auto shows; (vi) museums (displaying art objects, wax figures, antique autos, etc.); and (vii) zoos; (C) spectator sports: (i) dragstrip operation; (ii) horse shows (horse riding exhibitions); (iii) motorcycle races; (iv) automobile races (full size and miniature cars); (v) rodeo; (vi) sporting events such as football, baseball, basketball, hockey, and soccer games; and (vii) wrestling, boxing, or arm wrestling; (D) participatory sports or games: (i) athletic clubs; (ii) bowling games; (iii) court fees - tennis, racketball, handball, etc.; (iv) domino games (including by the hour); (v) go-cart raceways; (vi) golf courses; (vii) golf driving ranges; (viii) health clubs (spas), (admissions and memberships); (ix) miniature golf courses; (x) chartered boat or party boat excursions (see paragraph (2) of this subsection for excursions of more than one day duration and for excursions on which fishing guide services are provided); (xi) pool (billiards) games (by the game or by the hour); (xii) skate board tracks; (xiii) skating rinks (roller skating and ice skating); (xiv) swimming pools; (xv) water slides; and (xvi) physical fitness centers; (E) fairs or carnivals: (i) amusement parks; (ii) carnivals; (iii) fairs; (iv) games of skill, at circus, carnival, etc.; (v) shooting galleries (ranges); and (vi) side shows; (F) other: (i) except as provided by subsection (e)(4) of this section, cover charges (for admission to night clubs, dance halls, discos, etc., providing dancing, music, or other entertainment); (ii) hot tub concessions; (iii) parties (New Year's Eve) sponsored by radio stations, hotels, etc. Ticket price includes meal, set-ups, entertainment, party favors; (iv) rides for pleasure (in hot-air balloons, helicopters, trains, ships, boats, etc.); (v) tour trains and buses, whose primary purpose is to show tourist sights along a route as opposed to regular transportation; (vi) tours of tourist attractions, such as ships, buildings, and monuments, and natural wonders such as caves and caverns; and (vii) palm reading, fortune telling, and astrological chart preparation; (G) country clubs and other private clubs and organizations that provide entertainment, recreation, sports, dining, or social facilities to members. (2) Nonamusement services - Activities which are primarily instructional in nature or nontaxable personal services. Places, services, and clubs not covered by the tax on amusement services include, but are not limited to: (A) hobby clubs (stamp collecting clubs, toastmaster clubs, camera clubs, amateur radio clubs); (B) instructions for any sport or musical discipline; (C) camps for children (day camps or boarding camps); (D) video cassette clubs; (E) political fundraisers; (F) campground admissions; (G) cruises which last longer than 24 hours and extend offshore outside Texas territorial limits; (H) fishing and hunting leases and guide services; and (I) membership in sororities and fraternities. (3) Occasional sale - The sale of not more than 10 admissions for amusement services during a 12- month period by a person who does not hold himself out as engaging, or does not habitually engage, in the selling of amusement services. (4) Provider of an amusement service - The person who has legal rights of ownership over or the legal right to provide, present, or offer an amusement, entertainment, or recreation that is rendered on a regular basis at a fixed location and for which admissions are sold, such as the owner of the wax figure display at a wax museum. The provider of an amusement service is also the person who has legal rights of ownership to an amusement, entertainment, or recreation that will not be rendered on a regular basis at a fixed location and for which amusement service admissions will be sold, such as the provider of a one-night live performance by a singer. A provider of an amusement service may be, but is not always, the owner of the facility (land and/or building) at which the amusement service is offered or performed. A provider of an amusement service may gain the right of providing an amusement service by virtue of a contract or agreement (lease, rental, concession right) with the performer(s) of the entertainment or with a facility owner when the use of that facility constitutes the amusement service. Terms used within the amusements industry to refer to a provider include manager, promoter, concessionaire, tenant, or association (or club) president. (5) Sales price of an amusement service - The fee charged for admission to an amusement, including a convenience fee, handling charge, service charge, or other amount over and above the amount that would be charged for an amusement admission at the ticket counter of the facility at which the amusement service will be rendered. Also included are dues, initiation fees, and other charges, assessments, and fees required for a special privilege, status, or membership classification in a private club or organization. Receipts subject to tax under the Texas Alcoholic Beverage Code, sec.202.02, are not included in the sales price of an amusement service. (6) Sales price of membership to country clubs, including clubs described by the Internal Revenue Code of 1986, sec.501(c)(7) - The sales price includes dues, initiation fees, and other charges, assessments, and fees required for a special privilege, status, or membership classification in a private club or organization. Whether or not the club has its own facilities is not relevant. Receipts subject to tax under the Texas Alcoholic Beverage Code, sec.202.02, are not included in the sales price of an amusement service. (7) Seller of admissions to amusement services - A person who sells more than ten admissions to amusement services during a 12-month period and includes those persons who hold themselves out as engaging, or who habitually engage, in the selling of admissions to amusement services. (8) Sale of an amusement service admission - The transfer of title to or possession of a ticket or other admission document for a consideration or the collection of an admission, membership, or enrollment fee, whether by individual performance, subscription series, or membership privilege, or through the use of a coin-operated or credit-card-operated machine. The consideration paid may secure the admission privilege for an individual or a group of individuals. The contract or agreement whereby the right is secured for a provider to offer an amusement, recreation, or entertainment as an amusement service is not the sale of an admission to an amusement service and is not subject to sales tax, such as the paying of a fee to a singer for a performance that will be provided by the payer of the fee as an amusement service through the sales of tickets. (b) Charges to private club members and guests. The membership dues, initiation fees, and other assessments and fees charged for a special privilege, status, or membership classification in a private club or organization, including organizations described by the Internal Revenue Code of 1986, sec.501(c)(7), if the organizations provide amusements, are taxable. Taxable fees for special privileges in the organization include, but are not limited to, liquor pool dues, boat slip rental fees, golf cart storage fees, locker rental fees, locker room use fees, and fees for access to the restaurant and bar. Separate charges for amusement services by persons operating clubs or other facilities over and above amounts received for membership or initiation fees, such as green fees or fees for admissions to swimming pools, racketball courts, or tennis courts, are also taxable. Initiation fees which are refundable, as evidenced by a written agreement, are not taxable. (c) Entry fees. Entry fees will not be taxable as amusements if: (1) the fee substantially exceeds what would normally be paid for using the facility and a person is paying to compete in a contest, and part of the fee goes toward the cost of conducting the contest and for prizes; or (2) an individual would not normally use the facility, or pay a fee except for the purpose of participating in a contest. (d) Travel agencies. (1) Tickets to amusements sold by travel agencies as part of a travel package are taxable only if: (A) the price of the ticket is separately stated from the price for the remainder of the package; or (B) though not separately stated, the surrounding additional costs are inconsequential. (2) If the sales tax is not required to be collected by the travel agency, sales tax must be paid at the time the travel agency purchases the tickets originally. (e) Imposition of tax. (1) Sales tax is due on the sale of an admission to an amusement service if the event or location of the service is within the State of Texas. Sales tax is also due on admissions to gambling ships that operate outside Texas waters if they depart from and return to Texas ports. Sales tax is not due on the sale of an admission to an amusement service if the event or location of the service is outside Texas. (2) Use tax is due on an out-of-state sale of an admission to an amusement event that will take place in Texas. (3) When there is a sale of an amusement service which does not involve the transfer of a ticket or other physical evidence of admission, possession of or title to the admission is to be regarded as taking place at the seller's place of business. An example would be when admission is secured by a reservation made by the seller for the purchaser. (4) Sales or use tax is not due on cover charges which are taxable under the Texas Alcoholic Beverage Code, sec.202.02. (f) Taxable item sold or transferred with amusement service. (1) Sellers of service may issue a resale certificate in lieu of tax to suppliers of tangible personal property only if care, custody, and control of the property is transferred to the client. For example, a taxpayer purchases padlocks to transfer to customers when lockers are rented. The padlock is transferred to customers, and the customers use the padlock when renting the locker. Taxpayer may purchase the padlock tax free by issuing a resale certificate. Tax is due on the total amount charged the customer, including amounts for the padlock and for the services. (2) A resale certificate may be issued for a service if the buyer intends to transfer the service as an integral part of taxable services. A service will be considered an integral part of a taxable service if the service purchased is essential to the performance of the taxable service and without which the taxable service could not be rendered. (3) A resale certificate may be issued for a taxable service if the buyer intends to incorporate the service into tangible personal property which will be resold. If the entire service is not incorporated into the tangible personal property, it will be presumed the service is subject to tax and the service will only be exempt to the extent the buyer can establish the portion of the service actually incorporated into the tangible personal property. If the buyer does not intend to incorporate the entire service into the tangible personal property, no resale certificate may be issued, but credit may be claimed at the time of sale of the tangible personal property to the extent the service was actually incorporated into the tangible personal property. (4) Any item, such as machinery or equipment, purchased to be used in the providing of an amusement service is not an item transferred with an amusement service and is subject to sales tax. (5) A reseller of a ticket or admission document to an amusement service may deduct from taxable sales reported the "adjusted value" of the ticket or admission document purchased for resale from a non-permitted purchaser of the ticket or admission document. The "adjusted value" is the face value of the ticket or admission document, less the included sales tax. A reseller is allowed the deduction from taxable sales when filing a sales tax report if all of the following criteria are met: (A) the sales tax was paid by the purchaser and the purchaser does not hold a Texas Sales and Use Tax Permit; (B) the language on the ticket or admission document purchased for resale states that all taxes have been included in the price of the ticket or admission document; (C) the ticket or admission document for which a deduction is claimed was not purchased tax-free by use of a resale or exemption certificate; and (D) the ticket or admission document is actually resold. (g) Exemptions. (1) Sales tax is not due on the sale of an amusement service if the service is provided exclusively: (A) by a nonprofit organization, corporation, or association, other than organizations described by the Internal Revenue Code of 1986, sec.501(c)(7), if the proceeds do not go to the benefit of an individual, except as a part of the services of a purely public charity. Initiation and membership fees and other assorted fees charged by such a nonprofit organization, corporation, or association are not taxable. Examples would include: organizations, corporations, or associations recognized as nonprofit organizations under the Internal Revenue Code, sec.501(c), Kiwanis clubs, labor unions, and ex-students organizations. Organizations described by the Internal Revenue Code of 1986, sec.501(c)(7), that provide amusements, do not qualify for this exemption even though organized as nonprofit organizations; (B) by a nonprofit corporation organized under the laws of this state for the purpose of encouraging agriculture by the maintenance of public fairs and exhibitions; (C) by an educational, religious, law enforcement, or charitable association or organization as long as no part of the proceeds goes to the benefit of a private individual; (D) by the United States, the State of Texas, a municipality, county, school district, special district, or other political subdivision of the State of Texas. An amusement service is not "exclusively provided" by a governmental entity if the entity contracts with an entity not listed in the Tax Code, sec.151.3101(a)(1), for the provision of the amusement; (E) in a place that is included in the National Register of Historic Places; or (F) in a place that is designated as a Recorded Texas Historic Landmark by the Texas Historical Commission. (2) Sales tax is not due on the sale of an amusement service by a ticket service, ticket agent, ticket outlet, or any other seller of amusement services when the provider of the amusement service is exempt as set forth in paragraph (1) of this subsection. (3) Except as provided by subsection (h) of this section, a nonprofit group may hire a for- profit organization to provide the expertise to produce an event without loss of the exemption provided by paragraph (1)(A) of this subsection. The nonprofit organization must hold itself out as the provider of the amusement and may not be a joint venturer with the for-profit entity. (4) Amusement services provided through coin-operated machines that are operated by the consumer are exempt from sales tax. The coin used to operate the machine may be a token as well as a United States coin. Examples are coin-operated: (A) pinball machines; (B) video games and motion pictures; (C) pool tables; (D) televisions; (E) shuffleboard; (F) jukeboxes; and (G) batting cages. (5) Sales tax is not due on the occasional sale of an amusement service. (6) Sales tax is not due on the purchase of an amusement service by an exempt entity for its own amusement or for the amusement of its members. See sec.3.322 of this title (relating to Exempt Organizations). The seller must secure a valid exemption certificate. (7) Sales tax is not due on the purchase of the admission to an activity which may be classified as an amusement, entertainment, or recreation if purchased under a written prescription of a licensed practitioner of the healing arts for the primary purpose of health maintenance or improvement. The written prescription must specify the type of the treatment needed. If a membership privilege is purchased pursuant to a written prescription, a new prescription must be obtained each time the membership is renewed. (h) Governmental entities. (1) Entities recognized as governmental entities are subject to the provisions of this subsection even though the entities may also be classified under the Tax Code, sec.151.3101(a)(3), (4), or (5). (2) Unless an event is solely for educational purposes, this state, an institution owned or operated by the state, an agency of this state, city, county, school district, special district, political subdivision of this state, or the United States that contracts with a person, a for-profit organization, or any other organization not listed in the Tax Code, sec.151.3101(a)(1), to provide the expertise to produce or provide a musical concert or other amusement event loses the exemption provided in subsection (g) of this section. These organizations must collect sales tax on admissions to amusement events provided by or in conjunction with a person, a for-profit organization, or other organizations not listed in the Tax Code, sec.151.3101(a)(1). (3) An amusement is not solely for educational purposes unless either: 100% of the proceeds from the admissions go to the educational organization; or students at the educational institution actually perform the amusement. (i) Collection of the tax. (1) Persons who sell admissions to an amusement service for resale may accept a resale certificate from the purchaser of the amusement in lieu of tax. The resale certificate will cover all convenience fees, handling charges, service charges, etc., added to the sales price of the admission by promoters, ticket services, and others. (2) Each seller of amusement services selling to the final consumer must collect and remit the tax to the comptroller on the total receipts from all taxable sales. A seller will be responsible for remitting the correct amount of tax based on the total sales price of admissions including any charges added by others. (3) The comptroller may regard any seller of an admission to an amusement service as the agent of the person from whom he obtains the tickets or other admission document if the comptroller determines that the tax will be collected more efficiently. The seller of an admission to amusement service will be regarded as agent if: (A) the person providing the tickets or other admission documents obtains written authorization from the comptroller to assume responsibility for the tax collection of his agent; (B) the person providing the tickets includes in the sales price of the admission any convenience fee, handling charge, etc., added on by his agent; and (C) the provider of the tickets gives to the seller/agent a written statement that the provider holds a tax permit issued by the comptroller and is assuming responsibility for tax collection and reporting for his agent. (j) Records. Every seller of admissions to amusement services is responsible for keeping accurate records of all sales and purchases. See sec.3.281 of this title (relating to Records Required; Information Required). Every seller of admissions to amusement services must hold a sales tax permit and must file reports as required by sec.3.286 of this title (relating to Seller's and Purchaser's Responsibilities). A reseller of a ticket or admission document to an amusement service that is deducting the "adjusted value" of the ticket or admission document purchased for resale from a non-permitted purchaser, as provided in subsection (f)(5) of this section, must have records verifying the deduction that include: (1) the name and address of the non-permitted purchaser; (2) the face value of any ticket or admission document purchased by a non- permitted purchaser; (3) proof (such as a copy of the ticket or admission document) showing that sales tax is included in the price of the ticket or admission document; (4) the sales of tickets or admission documents; and (5) the remaining inventory of unsold tickets or admission documents. (k) Local tax. City, county, transit authority, and special purpose district tax should be allocated to the city, county, transit authority, and/or special purpose district where the amusement event occurred. 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. Filed with the Office of the Secretary of State on July 6, 1998. TRD-9810616 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: July 26, 1998 Proposal publication date: February 20, 1998 For further information, please call: (512) 463-4062 SUBCHAPTER P.Municipal Sales and Use Tax 34 TAC sec.3.372 The Comptroller of Public Accounts adopts an amendment to sec.3.372, concerning adopting, increasing, decreasing, or abolishing city tax, without changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1518). House Bill 92, 75th Legislature, 1997, amended the Local Government Code effective September 1, 1997, by adding Chapter 334 and Chapter 335 concerning sports and community venue projects and districts. The amendment explains that the notification requirements, effective dates, and contested election provisions in sec.3.372 apply to an election to impose sales and use tax for a sports and community venue project that increases a city tax rate or that reduces a tax rate for industrial development to allow the imposition of the tax for the sports and community venue project within the 2.0% cap on local taxes. The amendment also replaces all references to Texas Civil Statutes, Articles 1118x, 1118y, or 1118z with references to the Transportation Code, Chapters 451, 452, or 453. The provisions in Articles 1118x, 1118y, and 1118z have been recodified in the Transportation Code. No comments were received regarding adoption of the amendment. This amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements acts by the 75th Legislature, 1997, amending the Local Government Code. 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. Filed with the Office of the Secretary of State on July 1, 1998. TRD-9810391 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: July 21, 1998 Proposal publication date: February 20, 1998 For further information, please call: (512) 463-4062 SUBCHAPTER R.Transit Sales and Use Tax 34 TAC sec.3.422 The Comptroller of Public Accounts adopts an amendment to sec.3.422, concerning adopting, increasing, decreasing, or abolishing transit (MTA) tax, without changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1519). House Bill 92, 75th Legislature, 1997, amended the Local Government Code effective September 1, 1997, by adding Chapter 334 and Chapter 335 concerning sports and community venue projects and districts. The amendment explains that the notification requirements, effective dates, and contested election provisions in sec.3.422 apply to an election to impose sales and use tax for a sports and community venue project that reduces a transit tax rate. The amendment also replaces all references to Texas Civil Statutes, Articles 1118x, 1118y, or 1118z with references to the Transportation Code, Chapters 451, 452, or 453. The provisions in Articles 1118x, 1118y, and 1118z have been recodified in the Transportation Code. No comments were received regarding adoption of the amendment. This amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements acts by the 75th Legislature, 1997, amending the Local Government Code. 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. Filed with the Office of the Secretary of State on July 1, 1998. TRD-9810392 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: July 21, 1998 Proposal publication date: February 20, 1998 For further information, please call: (512) 463-4062 SUBCHAPTER II.Telecommunications Infrastructure Fund Assessment 34 TAC sec.sec.3.1101-3.1103 The Comptroller of Public Accounts adopts the repeal of sec.sec.3.1101-3.1103, concerning the telecommunications infrastructure fund, without changes to the proposed text as published in the April 3, 1998, issue of the Texas Register (23 TexReg 3421). The comptroller has determined the consolidation of sections dealing with similar subject matter will benefit taxpayers by providing a more effective means of obtaining information. These sections are being repealed in order to simplify the consolidation of related sections into a single section. The new sec.3.1101, concerning telecommunications receipts, assessment determination, due date for assessment report and payment, auditing, records, and assessments, includes the substance of the current sec.3.1101, concerning due date for assessment report and payment, the substance of the current sec.3.1102, concerning telecommunications receipts and assessment determination, and the substance of the current sec.3.1103, concerning auditing, records, and assessments. No comments were received regarding adoption of the repeals. These repeals are adopted under the Tax Code, sec.111.002 and sec.111.0022, which provide the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions assigned the comptroller by law. The repeals implement the Texas Utility Code, sec.sec.57.041, 57.042, 57.043, and 57.048. 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. Filed with the Office of the Secretary of State on July 1, 1998. TRD-9810388 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: July 21, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 463-4062 34 TAC sec.3.1101 The Comptroller of Public Accounts adopts a new sec.3.1101, concerning telecommunications receipts, assessment determination, due date for assessment report and payment, auditing, records, and assessments, without changes to the proposed text as published in the April 3, 1998, issue of the Texas Register (23 TexReg 3421). The Public Utility Regulatory Act of 1995, Title III, sec.3.606 (Texas Civil Statutes, Article 1446c-0), was amended in Senate Bill 249, 75th Legislature, 1997, to impose a Telecommunications Infrastructure Fund (TIF) Assessment at a rate of 1.25%. The Public Utility Regulatory Act of 1995 was recodified in Senate Bill 1751, 75th Legislature, 1997, into the Utilities Code, Title 2, titled the Public Utility Regulatory Act, in a nonsubstantive recodification. The Utility Code, Title 2, sec.sec.57.041-57.051, deal with the Telecommunications Infrastructure Fund. The assessment is on sales taxable telecommunications revenue from both telecommunications utilities and commercial mobile service providers. Information regarding telecommunications receipts, reporting due dates, penalty for late filing, interest rates, and audits is moved from sec.sec.3.1101-3.1103 of this title (relating to Due Date for Assessment Report and Payment, Telecommunications Receipts and Assessment Determination, and Auditing, Records, Assessments) which are proposed for repeal. Senate Bill 862 redefined "Telephone Prepaid Calling Cards" as tangible personal property and excluded them from the definition of telecommunications services effective September 1, 1997. Accordingly, subsection (a)(9) defining "Telecommunications Utility" excludes sales of telephone prepaid calling cards made after September 1, 1997. No comments were received regarding adoption of the new section. This new section is adopted under the Tax Code, sec.111.002 and sec.111.0022, which provide the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions assigned the comptroller by law. The new section implements the Public Utility Regulatory Act, sec.sec.57.041- 57.051. 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. Filed with the Office of the Secretary of State on July 1, 1998. TRD-9810389 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: July 21, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 463-4062 TITLE 37. PUBLIC SAFETY AND CORRECTIONS PART XI. Texas Juvenile Probation Commission CHAPTER 349.Standards for Child Abuse and Neglect Investigations in Secure Juvenile Facilities The Texas Juvenile Probation Commission adopts new sec.sec.349.101-349.119 and sec.sec.349.501-349.508, concerning child abuse and neglect investigations in secure juvenile facilities. Sections 349.101 through 349.119 and sections 349.501 through 349.508 are adopted without changes as published in the April 10, 1998 issue of the Texas Register (23 TexReg 3657) and will not be republished. The new standards are adopted in order to provide uniform procedures for investigating allegations of child abuse and neglect, and they identify whom and under what circumstances the Texas Juvenile Probation Commission (TJPC) may disclose information made confidential under sec.261.201 of the Texas Family Code. The new rules will ensure prompt and proper investigation of alleged child abuse or neglect in secure juvenile facilities. No public comments were received during the proposal period. SUBCHAPTER A. Intake, Investigation, and Assessment 37 TAC sec.sec.349.101-349.119 The standards are adopted under sec.261.401(b) of the Family Code and sec.141.042 of the Texas Human Resource Code, which provides the Texas Juvenile Probation Commission with the authority to adopt reasonable rules, including those which provide uniform procedures for investigating child abuse and neglect and which provide minimum standards for juvenile boards. No other code or article is affected by these new standards. 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. Filed with the Office of the Secretary of State on June 30, 1998. TRD-9810330 Lisa Capers Deputy Executive Director Texas Juvenile Probation Commission Effective date: July 20, 1998 Proposal publication date: April 10, 1998 For further information, please call: (512) 424-6681 SUBCHAPTER B. Confidentiality and Release of Records 37 TAC sec.sec.349.501-349.508 The standards are adopted under sec.261.401(b) of the Family Code and sec.141.042 of the Texas Human Resource Code, which provides the Texas Juvenile Probation Commission with the authority to adopt reasonable rules, including those which provide uniform procedures for investigating child abuse and neglect and which provide minimum standards for juvenile boards. No other code or article is affected by these new standards. 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. Filed with the Office of the Secretary of State on June 30, 1998. TRD-9810331 Lisa Capers Deputy Executive Director Texas Juvenile Probation Commission Effective date: July 20, 1998 Proposal publication date: April 10, 1998 For further information, please call: (512) 424-6681 TITLE 40. SOCIAL SERVICES AND ASSISTANCE PART I. Texas Department of Human Services CHAPTER 15.Medicaid Eligibility SUBCHAPTER F.Budgets and Payment Plans 40 TAC sec.15.503 The Texas Department of Human Services (DHS) adopts an amendment to sec.15.503 without changes to the proposed text as published in the May 22, 1998, issue of the Texas Register (23 TexReg 5389). The justification for the amendment is to correct the formula for determining the increased protected resource amount at appeal. The amendment will function by ensuring that the formula will be applied correctly statewide. The department received no comments regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs and under Texas Government Code sec.531.021, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements sec.sec.22.001-22.030 and sec.sec.32.001-32042 of the Human Resources Code. 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. Filed with the Office of the Secretary of State on July 2, 1998. TRD-9810531 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: September 1, 1998 Proposal publication date: May 22, 1998 For further information, please call: (512) 438-3765 CHAPTER 19.Nursing Facility Requirements for Licensure and Medicaid Certification SUBCHAPTER U.Inspections, Surveys, and Visits 40 TAC sec.19.2009 The Texas Department of Human Services (DHS) adopts an amendment to sec.19.2009, concerning inspection, surveys, and visits, without changes to the proposed text as published in the May 29, 1998, issue of the Texas Register (23 TexReg 5643). Justification for the amendment is to resolve nurse aide cases for a proposed finding of abuse, neglect, or misappropriation of a resident's property in a more timely manner, which will ensure better protection for nursing facility residents. The amendments will implement a part of the change in the appeal process for nurse aides by clarifying that the hearing required by 42 CFR sec.488.335, to be provided by the state survey agency prior to referring a nurse aide for inclusion on the registry for abuse or neglect of a resident or misappropriation of resident property, is a formal hearing. Relating to this policy change, DHS adopted new formal hearing rules in Chapter 79, Legal Services, in the May, 15, 1998, issue of the Texas Register and is repealing the informal hearing rules in Chapter 79, Legal Services, in this issue of the Texas Register. Also in this issue of the Texas Register, DHS is adopting related policy in Chapter 94, Nurse Aides, to implement the rest of the changes in the nurse aides appeal process. The department received no comments regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs, and under Texas Government Code sec.531.021, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements the Human Resources Code, sec.sec.22.001-22.030 and sec.sec.32.001-32.042. 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. Filed with the Office of the Secretary of State on July 6, 1998. TRD-9810621 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: August 1, 1998 Proposal publication date: May 29, 1998 For further information, please call: (512) 438-3765 CHAPTER 52.Emergency Response Services SUBCHAPTER C.Provider Agency Staff Requirements 40 TAC sec.52.301 The Texas Department of Human Services (DHS) adopts amendments to sec.sec.52.301, 52.401, 52.402, and 52.503, without changes to the proposed text as published in the May 8, 1998, issue of the Texas Register (23 TexReg 4532). The justification for the amendments is to clarify how provider agencies must comply with contract/program service control and fiscal monitoring requirements. The amendments will function by ensuring that quality services are provided to clients and ensuring accurate billing for services. No comments were received regarding adoption of the amendments. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs and under Texas Government Code sec.531.021, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements sec.sec.22.001-22.030 and sec.sec.32.001-32.042 of the Human Resources Code. 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. Filed with the Office of the Secretary of State on July 3, 1998. TRD-9810594 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: August 1, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 438-3765 SUBCHAPTER D.Service Delivery Requirements 40 TAC sec.52.401, sec.52.402 The amendments are adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs and under Texas Government Code sec.531.021, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendments implement sec.sec.22.001-22.030 and sec.sec.32.001-32.042 of the Human Resources Code. 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. Filed with the Office of the Secretary of State on July 3, 1998. TRD-9810595 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: August 1, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 438-3765 SUBCHAPTER E.Claims 40 TAC sec.52.503 The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs and under Texas Government Code sec.531.021, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements sec.sec.22.001-22.030 and sec.sec.32.001-32.042 of the Human Resources Code. 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. Filed with the Office of the Secretary of State on July 3, 1998. TRD-9810596 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: August 1, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 438-3765 CHAPTER 79.Legal Services SUBCHAPTER K.Informal Hearings 40 TAC sec.sec.79.1001-79.1007 The Texas Department of Human Services (DHS) adopts the repeal of sec.sec.79.1001-79.1007, without changes to the proposed text as published in the February 6, 1998, issue of the Texas Register (23 TexReg 939). DHS is also repealing Subchapter K, Informal Hearings. The justification for the repeals is to organize and simplify the formal hearing rules that are used when appearing before and participating in a hearing before an administrative law judge. The formal hearing rules were adopted in the May 15, 1998, issue of the Texas Register (23 TexReg 4920). The repeals will function by ensuring that a party to a hearing will be able to consult one set of hearing rules to determine how to proceed before an administrative judge in contested cases involving adverse actions by DHS. No comments were received regarding adoption of the repeals. The repeals are adopted under the Human Resources Code, Title 2, Chapter 22, which provides the department with the authority to administer public assistance programs. The repeals implement the Human Resources Code, sec.sec.22.001-22.030. 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. Filed with the Office of the Secretary of State on July 6, 1998. TRD-9810620 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: August 1, 1998 Proposal publication date: February 6, 1998 For further information, please call: (512) 438-3765 CHAPTER 94.Nurse Aides 40 TAC sec.94.11 The Texas Department of Human Services (DHS) adopts an amendment to sec.94.11, without changes to the proposed text as published in the May 29, 1998, issue of the Texas Register (23 TexReg 5644). Justification for the amendment is to resolve nurse aide cases for a proposed finding of abuse, neglect, or misappropriation of a resident's property in a more timely manner, which will ensure better protection for nursing facility residents. The amendment will function by modifying the appeal process provided by DHS to nurse aides before being listed on the Nurse Aide Registry as having abused or neglected a resident or having misappropriated resident property. The department received no comments regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs, and under Texas Government Code sec.531.021, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements the Human Resources Code, sec.sec.22.001-22.030 and sec.sec.32.001-32.042. 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. Filed with the Office of the Secretary of State on July 6, 1998. TRD-9810619 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: August 1, 1998 Proposal publication date: May 29, 1998 For further information, please call: (512) 438-3765