TITLE 16. ECONOMIC REGULATION

PART 2. PUBLIC UTILITY COMMISSION OF TEXAS

CHAPTER 24. SUBSTANTIVE RULES APPLICABLE TO WATER AND SEWER SERVICE PROVIDERS

The Public Utility Commission of Texas (commission) proposes the repeal of §24.113, relating to revocation or amendment of a certificate of convenience and necessity and §24.120, relating to single certification in incorporated or annexed areas. The commission also proposes adoption of new §24.113, relating to revocation or amendment of a certificate of convenience and necessity and new §24.120, relating to single certification in incorporated or annexed areas. The proposed repeals and new sections will update provisions, and provide more clarity, regarding certificate of convenience and necessity (CCN) cancellations, revocations, and amendments, including amendments by expedited release, streamlined expedited release, and single certification in areas that have been incorporated or annexed by a municipality. Project Number 46151 is assigned to this proceeding.

Tammy Benter, division director, Water Utility Regulation Division, has determined that for each year of the first five-year period the proposed sections are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the sections.

Ms. Benter has determined that, for each year of the first five-year period the proposed sections are in effect, the public benefit anticipated as a result of enforcing the sections will be to add clarity and simplicity to the rules governing CCN revocations, amendments by expedited release or streamlined expedited release, and single certification in incorporated or annexed areas. There will be no adverse economic effect on small businesses or micro-businesses as a result of enforcing these sections. Therefore, no regulatory flexibility analysis is required. There is no anticipated economic cost to persons who are required to comply with the sections as proposed.

Ms. Benter has also determined that, for each year of the first five-year period the proposed sections are in effect, there should be no effect on a local economy, and therefore no local employment impact statement is required under Administrative Procedure Act (APA), Texas Government Code §2001.022.

The commission staff will conduct a public hearing on this rulemaking, if requested under the Administrative Procedure Act, Texas Government Code §2001.029, at the commission's offices located in the William B. Travis Building, 1701 North Congress Avenue, Austin, Texas 78701, on February 13, 2017. The request for a public hearing must be received by January 31, 2017.

Comments on the proposed repeals and new sections may be filed with the filing clerk, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 78711-3326, by January 17, 2017. Sixteen copies of comments to the proposed amendment must be filed as required by §22.71(c) of this title. Reply comments may be filed no later than January 31, 2017. Comments should be organized in a manner consistent with the organization of the proposed rules. The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed repeals and new section. The commission will consider the costs and benefits in deciding whether to adopt the proposed repeals and new sections. All comments should refer to Project Number 46151.

In addition, the commission solicits input on the following questions regarding the proposed new rules:

1. Should the proposed rules specify what qualifications, such as but not limited to, licensure or certification, a qualified appraiser must have?

2. If so, what qualifications should be required?

SUBCHAPTER G. CERTIFICATES OF CONVENIENCE AND NECESSITY

16 TAC §24.113, §24.120

These repeals are proposed under the Texas Water Code (TWC) §13.041(b), which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; TWC §13.2451(c), which permits the commission to amend the certificated service area of a municipality outside of the municipality's extraterritorial jurisdiction under certain circumstances; TWC §13.254, which allows the commission to revoke or amend a certificate of convenience and necessity under certain circumstances; TWC §13.255, which requires the commission to grant single certification to a municipality or franchised utility under certain circumstances for an area that has been incorporated or annexed; and §13.2551, which grants the commission authority to place certain conditions on a revocation or amendment ordered under TWC §13.254 or §13.255.

Cross Reference to Statutes: TWC §§13.041(b), 13.2451(c) 13.254, 13.255, 13.2551.

§24.113.Revocation or Amendment of Certificate.

§24.120.Single Certification in Incorporated or Annexed Areas.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 5, 2016.

TRD-201606150

Adriana Gonzales

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: January 15, 2017

For further information, please call: (512) 936-7293


16 TAC §24.113, §24.120

These new sections are proposed under the Texas Water Code (TWC) §13.041(b), which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; TWC §13.2451(c), which permits the commission to amend the certificated service area of a municipality outside of the municipality's extraterritorial jurisdiction under certain circumstances; TWC §13.254, which allows the commission to revoke or amend a certificate of convenience and necessity under certain circumstances; TWC §13.255, which requires the commission to grant single certification to a municipality or franchised utility under certain circumstances for an area that has been incorporated or annexed; and §13.2551, which grants the commission authority to place certain conditions on a revocation or amendment ordered under TWC §13.254 or §13.255.

Cross Reference to Statutes: TWC §§13.041(b), 13.2451(c) 13.254, 13.255, 13.2551.

§24.113.Revocation or Amendment of a Certificate of Convenience and Necessity.

(a) Applicability. This section applies to revocation or amendment of a certificate of convenience and necessity (CCN).

(b) Definitions.

(1) Alternate retail public utility--The retail public utility from which a landowner plans to request service after the landowner obtains expedited release under subsection (k) of this section. An alternate retail public utility is limited to the following:

(A) an existing retail public utility; or

(B) a district proposed to be created under Article 16, §59 or Article 3, §52 of the Texas Constitution.

(2) Current CCN holder--An entity that currently holds a CCN to provide service to an area for which revocation or amendment is sought.

(3) Former CCN holder--An entity that formerly held a CCN to provide service to an area that was removed from the entity's service area by revocation or amendment under this section.

(4) Prospective retail public utility--A retail public utility seeking to provide service to a requested area or to a removed area.

(5) Removed area--Area that has been removed under this section from the certificated service area of a former CCN holder.

(6) Useless or valueless property--Property that has been rendered useless or valueless to a former CCN holder by revocation or amendment, including by expedited release or streamlined expedited release, under this section.

(c) A CCN or other order of the commission in any proceeding under this section does not create a vested property right.

(d) An order of the commission issued under this section does not transfer any property, except as provided under subsection (p) of this section.

(e) A former CCN holder shall not be required to provide service within the removed area.

(f) If the CCN of any retail public utility is revoked or amended, the commission may by order require one or more other retail public utilities to provide service in the removed area, if the other retail public utility that is to provide service consents.

(g) Cancellation. Upon written request from the current CCN holder, the commission may cancel the CCN if the current CCN holder is authorized to operate without a CCN under §24.103(c) or (e) of this title relating to certificate of convenience and necessity not required.

(h) Revocation or amendment by consent. The commission may revoke or amend any CCN with the written consent of the current CCN holder after notice and a hearing.

(i) Revocation or amendment.

(1) At any time after notice and a hearing, the commission may revoke or amend any CCN if the commission finds that any of the circumstances identified in this paragraph exist.

(A) The current CCN holder has never provided, is no longer providing, is incapable of providing, or has failed to provide continuous and adequate service in all or part of the certificated service area.

(B) The current CCN holder is in an affected county, and the cost of providing service by the current CCN holder is so prohibitively expensive as to constitute denial of service. Absent other relevant factors, for commercial developments started after September 1, 1997 or residential developments started after September 1, 1997, the fact that the cost of obtaining service from the current CCN holder makes the development economically unfeasible does not render such cost prohibitively expensive.

(C) The current CCN holder has agreed in writing to allow another retail public utility to provide service within its certificated service area, except for an interim period, without amending its CCN.

(D) The current CCN holder has failed to file a cease-and-desist action under TWC §13.252 within 180 days of the date that the current CCN holder became aware that another retail public utility was providing service within the current CCN holder's certificated service area, unless good cause is demonstrated for failure to file the cease-and-desist action within 180 days.

(2) Within 15 calendar days after the filing of a petition for revocation or amendment of a CCN under this subsection, the current CCN holder shall complete all of the actions listed in this paragraph.

(A) The current CCN holder shall file a written list of the names and addresses of any lienholders and the amounts of outstanding debt owed to each lienholder for only the portions of the liens specific to the requested area.

(B) The current CCN holder shall notify the lienholders of the petition.

(C) The current CCN holder shall request that the lienholders provide information to the commission sufficient to establish the amount of compensation necessary to avoid impairment of any debt allocable to the certificated service area that would be removed from the current CCN holder's CCN.

(3) Mapping Information. For petitions filed under this subsection or under subsection (j) of this section, mapping information is required for the requested area in accordance with §24.119 of this title relating to mapping requirements for certificate of convenience and necessity application.

(j) After notice to a municipality and an opportunity for a hearing, the commission may remove from the municipality's certificated service area an area that is located outside the municipality's extraterritorial jurisdictional boundary if the municipality has not provided service to the area on or before the fifth anniversary of the date the CCN was granted for the area. This subsection does not apply to an area that was transferred to a municipality's certificated service area by the commission and for which the municipality has spent public funds.

(k) Expedited release.

(1) This subsection provides an alternative to revocation or amendment under subsection (h) or (i) of this section.

(2) An owner of a tract of land may petition the commission for expedited release of all or a portion of the tract of land from a current CCN holder's certificated service area if the tract of land is at least 50 acres in size and is not in a platted subdivision actually receiving service.

(3) The fact that a current CCN holder is a borrower under a federal loan program does not prevent either the granting of a petition under this subsection or an alternate retail public utility from providing service to the removed area.

(4) A landowner may not file a petition under this subsection until at least 90 calendar days after the landowner has submitted the notice required by paragraph (5) of this subsection to the current CCN holder.

(5) The landowner shall submit to the current CCN holder a written request for service, other than a request for standard residential or commercial service. The written request shall identify the following:

(A) the tract of land or portion of the tract of land for which service is sought;

(B) the time frame within which service is needed for current and projected service demands in the tract of land;

(C) the reasonable level and manner of service needed for current and projected service demands in the area;

(D) the approximate cost for the alternate retail public utility to provide service at the same level, and in the same manner, that is requested from the current CCN holder;

(E) the flow and pressure requirements and specific infrastructure needs, including line size and system capacity for the required level of fire protection requested, if any; and

(F) any additional information requested by the current CCN holder that is reasonably related to determining the capacity or cost of providing service at the level, in the manner, and in the time frame, requested.

(6) The landowner shall demonstrate the following in the petition:

(A) the tract of land is at least 50 acres in size and is not in a platted subdivision actually receiving service;

(B) a written request

(i) was submitted by the landowner to the current CCN holder at least 90 calendar days before the petition was filed, and

(ii) complied with paragraph (5) of this subsection;

(C) the current CCN holder

(i) has refused to provide service;

(ii) cannot provide service as identified in the notice provided under paragraph (5)(A) - (D) of this subsection on a continuous and adequate basis; or

(iii) conditions the provision of service on the payment of costs not properly allocable directly to the landowner's service request, as determined by the commission;

(D) the alternate retail public utility can provide service as identified in the notice provided under paragraph (5)(A) - (D) of this subsection on a continuous and adequate basis; and

(E) a copy of the petition has been mailed to the current CCN holder via certified mail on the day that the landowner files the petition with the commission.

(7) The landowner shall file, as part of the petition, the mapping information described in subsection (m) of this section.

(8) The current CCN holder may file a response to the petition within a timeframe specified by the presiding officer, not to exceed 30 calendar days.

(9) A presiding officer shall determine whether the petition is administratively complete. When the petition is determined to be administratively complete, the presiding officer shall establish a procedural schedule that is consistent with paragraph (10) of this subsection. The presiding officer may dismiss the petition if the petitioner fails to supplement or amend the petition after the presiding officer has determined that the petition is not administratively complete.

(10) The commission shall grant the petition within 60 calendar days from the date the petition was found administratively complete unless the commission makes an express finding that the landowner failed to satisfy all of the requirements of this subsection. The commission shall support its express finding with separate findings of fact and conclusions of law for each requirement based solely on the information provided by the landowner and the current CCN holder. The commission may condition the granting or denial of a petition on terms and conditions specifically related to the landowner's service request and all relevant information filed by the landowner and the current CCN holder.

(11) Chapter 2001 of the Texas Government Code does not apply to any petition filed under this subsection. The commission's decision on the petition is subject to rehearing on the same timeline that applies to other final orders of the commission. The commission's order ruling on the petition may not be appealed.

(12) Finding regarding never having made service available.

(A) The commission is required to find only that the alternate retail public utility can provide the requested service if the current CCN holder has never made service available through planning, design, construction of facilities, or contractual obligations to provide service to the tract of land. In such instance, the commission is not required to find that the alternate retail public utility can provide better service than the current CCN holder.

(B) This paragraph does not apply to Cameron, Willacy, and Hidalgo Counties or to a county that meets any of the following criteria:

(i) the county has a population of more than 30,000 and less than 35,000 that borders the Red River;

(ii) the county has a population of more than 100,000 and less than 200,000 that borders a county described by clause (i) of this subparagraph;

(iii) the county has a population of 130,000 or more that is adjacent to a county with a population of 1.5 million or more that is within 200 miles of an international border; or

(iv) the county has a population of more than 40,000 and less than 50,000 that contains a portion of the San Antonio River.

(C) The commission will maintain on its website a list of counties that are presumed to meet the requirements of subparagraph (B) of this paragraph.

(13) If the petitioner is a proposed district, then the commission may condition the release and CCN amendment or revocation on the final and unappealable creation of the district. The duty of the proposed district to provide continuous and adequate service is held in abeyance until this condition is satisfied.

(14) The commission may require an award of compensation to the former CCN holder under subsections (n) and (o) of this section.

(15) No later than 30 calendar days after a petition filed under this subsection is granted, the petitioner shall file a petition under subsection (n) of this section.

(l) Streamlined expedited release.

(1) This subsection provides an alternative to the following:

(A) revocation or amendment under subsection (h) or (i) of this section; or

(B) revocation or amendment by expedited release under subsection (k) of this section.

(2) The owner of a tract of land may petition the commission for streamlined expedited release of all or a portion of the tract of land from the current CCN holder's certificated service area if the following conditions are met:

(A) the tract of land is at least 25 acres in size;

(B) the tract of land is not receiving service of the type that the current CCN holder is authorized to provide under the applicable CCN; and

(C) at least part of the tract of land is located in the current CCN holder's certificated service area and at least some of that part is located in a qualifying county.

(D) A qualifying county under subparagraph (C) of this paragraph does not have a population of more than 45,000 and less than 47,500 and is a county

(i) with a population of at least one million,

(ii) adjacent to a county with a population of at least one million, or

(iii) with a population of more than 200,000 and less than 220,000 that does not contain a public or private university that had a total enrollment in the most recent fall semester of 40,000 or more.

(iv) The commission will maintain on its website a list of counties that are presumed to meet the requirements of this subparagraph.

(3) A landowner seeking streamlined expedited release under this subsection shall simultaneously file the information listed in this paragraph with the commission.

(A) The landowner shall file a petition that is verified through a notarized affidavit that contains the following information:

(i) a statement that the petition is being filed under TWC §13.254(a-5) and this subsection;

(ii) proof that the tract of land is at least 25 acres in size;

(iii) proof that at least part of the tract of land is located in the current CCN holder's certificated service area and at least some of that part is located in a qualifying county;

(iv) a statement of facts that demonstrate that the tract of land is not currently receiving service;

(v) copies of all deeds demonstrating ownership of the tract of land by the landowner; and

(vi) proof that a copy of the petition has been mailed to the current CCN holder via certified mail on the day that the landowner files the petition with the commission; and

(B) the mapping information described in subsection (m) of this section.

(4) The current CCN holder may file a response to the petition within a timeframe specified by the presiding officer, not to exceed 30 calendar days.

(5) Within 15 calendar days after the filing of the petition, the current CCN holder shall comply with all of the requirements listed in this paragraph.

(A) The current CCN holder shall file with the commission a list of the names and addresses of any lienholders and the amounts of outstanding debt owed to each lienholder for only the portions of the liens specific to the area that would be removed from the current CCN holder's certificated service area.

(B) The current CCN holder shall notify the lienholders of the petition and request that the lienholders provide information to the commission sufficient to establish the amount of compensation necessary to avoid impairment of any debt allocable to the area that would be removed from the current CCN holder's certificated service area.

(C) The current CCN holder shall certify to the commission that it has provided the notice required under subparagraph (B) of this paragraph.

(6) The commission shall grant a petition filed under this subsection no later than the 60th calendar day after a presiding officer by order determines that the petition is administratively complete.

(7) The fact that a CCN holder is a borrower under a federal loan program is not a bar to the release of a tract of land under this subsection.

(8) The commission may require an award of compensation by the landowner to the former CCN holder.

(9) No later than 30 days after the date that the order granting a petition under this subsection is signed, the petitioner shall file a petition under subsection (n) of this section.

(m) Mapping information.

(1) For proceedings under subsection (k) or (l) of this section, the following mapping information must be filed:

(A) a general location map identifying the tract of land in reference to the nearest county boundary, city, or town;

(B) a detailed map identifying the tract of land in reference to verifiable man-made and natural landmarks, such as roads, rivers, and railroads. If ownership of the tract of land is conveyed by multiple deeds, this map should also identify the location and acreage of land conveyed by each deed; and

(C) one of the following for the tract of land:

(i) a metes and bounds survey sealed or embossed by either a licensed state land surveyor or a registered professional land surveyor;

(ii) a recorded plat; or

(iii) digital mapping data in a shapefile (SHP) format georeferenced in either NAD 83 Texas State Plane Coordinate System (US Feet) or in NAD 83 Texas Statewide Mapping System (Meters). The digital mapping data shall include a single, continuous polygon record.

(2) Commission staff may request additional mapping information.

(3) All maps shall be filed in accordance with §22.71 of this title and §22.72 of this title.

(n) Determination of property rendered useless or valueless.

(1) Applicability. A proceeding under this subsection may be initiated only after the revocation or amendment of a CCN under this section. A proceeding under this subsection may not be initiated after a proceeding under subsection (j) of this section.

(2) A retail public utility may not provide service directly or indirectly to the public in a removed area until any compensation ordered under subsection (o) of this section is provided to the former CCN holder.

(A) Such compensation shall be for useless or valueless property, as such is determined by the commission.

(B) Such compensation is not required if the former CCN holder agreed in writing to the revocation or amendment under this section.

(3) The former CCN holder has a right to intervene in a proceeding under this subsection unless a determination is made under paragraph (6) of this subsection that the former CCN holder no longer exists.

(4) There is a rebuttable presumption that there is no useless or valueless property if the former CCN holder fails to intervene by the intervention deadline established by the presiding officer. Upon motion and proof of service consistent with the requirements of paragraph (7)(C) of this subsection, the presiding officer may issue an order determining that there is no useless or valueless property.

(5) If a landowner, prospective retail public utility, or alternate retail public utility reasonably believes that the former CCN holder no longer exists, the landowner, prospective retail public utility, or alternate retail public utility shall file an affidavit stating the following information:

(A) a statement that it believes the former CCN holder no longer exists;

(B) a description of the actions taken to locate the former CCN holder and the results of those actions; and

(C) any other facts that support its belief that the former CCN holder no longer exists.

(6) If the former CCN holder fails to file a response within 30 calendar days after an affidavit is filed under paragraph (5) of this subsection, the presiding officer shall determine either that the requirements of paragraph (5) of this subsection have not been met or that the former CCN holder no longer exists.

(7) A petition under this subsection shall include the following information:

(A) a statement that it is a petition under TWC §§13.254(d)-(g-1) and this subsection;

(B) the docket number of the proceeding in which the commission revoked or amended the former CCN holder's CCN;

(C) a statement that a copy of the petition has been mailed to the former CCN holder via certified mail on the day that the petition is filed with the commission; and

(D) if applicable, either a written agreement between the former CCN holder and the prospective retail public utility or an affidavit from the former CCN holder stating that there is an agreement and the agreed compensation has been paid. If an agreement is filed, the agreement shall not be evidence in a future rate case.

(8) The former CCN holder and the petitioner may reach an agreement at any time during the pendency of a proceeding under this subsection regarding what property is useless or valueless property or what is the appropriate amount of compensation for such property. If the former CCN holder and the petitioner reach an agreement under this paragraph, the agreement shall be considered by the commission for approval by an order.

(9) Referral to SOAH.

(A) If an agreement under paragraph (8) of this subsection is not filed within 30 calendar days of the filing of a petition under this subsection, the presiding officer shall issue an order determining whether the petition meets the requirements of paragraph (7) of this subsection.

(B) If the presiding officer determines that the petition meets the requirements of paragraph (7) of this subsection, the proceeding shall be referred to the State Office of Administrative Hearings (SOAH) for a hearing.

(10) Hearing at SOAH.

(A) A hearing at SOAH under this subsection shall be limited to determining what property is useless or valueless property.

(B) The former CCN holder bears the burden to prove what property is useless or valueless property.

(C) The SOAH administrative law judge shall issue a proposal for decision for the commission's consideration.

(11) The commission shall issue an order identifying what property, if any, is useless or valueless property. This order is the commission's final determination of what property, if any, is useless or valueless property, subject to motions for rehearing in accordance with commission rules.

(12) If the commission determines that there is not any useless or valueless property, then no proceeding under subsection (o) of this section is required.

(o) Compensation for property rendered useless or valueless.

(1) Notice of intent to provide service.

(A) After the commission has issued its order under subsection (n) of this section, if a prospective retail public utility and a former CCN holder have not agreed on compensation, then the prospective retail public utility shall file a notice of intent to provide service.

(B) A notice of intent to provide service may be filed only after the commission has issued its order under subsection (n) of this section. A notice of intent filed before the commission issues its order under subsection (n) of this section is deemed to be filed on the date the commission's order is signed.

(C) The notice of intent to provide service shall include all of the information required by this subparagraph.

(i) The notice of intent shall state that it is a notice of intent to provide service under TWC §13.254(e) and this subsection.

(ii) If applicable, the notice of intent shall include an agreement between the former CCN holder and the prospective retail public utility regarding compensation for the useless or valueless property. If an agreement is filed, the agreement shall not be evidence in a future rate case.

(2) After the notice of intent to provide service is filed, a presiding officer shall establish a procedural schedule. The schedule shall ensure that the total compensation for any property identified in the order issued under subsection (n)(11) of this section will be determined no later than the ninetieth day after the date the notice of intent is filed.

(3) Within ten calendar days after the filing of the notice of intent to provide service, the prospective retail public utility shall file one of the following items:

(A) a letter identifying the qualified individual or firm serving as the agreed independent appraiser;

(B) a letter stating that the former CCN holder and prospective retail public utility will each engage its own appraiser, at its own expense; or

(C) an affidavit meeting the requirements of paragraph (5) of this subsection.

(4) The former CCN holder has a right to intervene in a proceeding under this subsection unless a determination is made under paragraph (6) of this subsection that the former CCN holder no longer exists.

(5) If the prospective retail public utility reasonably believes that the former CCN holder no longer exists, the prospective retail public utility shall file an affidavit stating the following:

(A) it believes the former CCN holder no longer exists;

(B) the actions taken to locate the former CCN holder and the results of those actions; and

(C) any other facts that support the prospective retail public utility's belief that the former CCN holder no longer exists.

(6) If the former CCN holder fails to file a response or an appraisal within 30 calendar days after the prospective retail public utility files an affidavit under paragraph (5) of this subsection, the presiding officer shall determine either that the requirements of paragraph (5) of this subsection have not been met or that the former CCN holder no longer exists. No compensation is required if the presiding officer determines that the former CCN holder no longer exists. The presiding officer shall issue an order memorializing this determination, and it shall be the final act of the commission, subject to motions for rehearing.

(7) If the former CCN holder and the prospective retail public utility agree on a qualified individual or firm to serve as an independent appraiser, then all of the requirements listed in this paragraph apply.

(A) The independent appraiser shall be limited to appraising the useless or valueless property.

(B) The former CCN holder and the prospective retail public utility shall file the appraisal within 65 calendar days after the filing of the notice of intent to provide service.

(C) The prospective retail public utility shall bear the costs of the independent appraiser.

(D) The commission is bound by the independent appraiser's valuation of the useless or valueless property. The commission shall review the valuation to ensure compliance with the requirements of this section.

(8) If the former CCN holder and the prospective retail public utility do not agree on an independent appraiser, each shall engage its own qualified appraiser, at its own expense.

(A) Each appraiser shall be limited to appraising the useless or valueless property.

(B) Each appraiser shall file its appraisal with the commission within 60 calendar days after the filing of the notice of intent to provide service.

(C) After the two appraisals are filed, the commission shall appoint a qualified individual or firm to serve as a third appraiser who shall make a valuation within 30 calendar days of the date the independent appraisals are filed.

(D) The third appraiser's valuation shall be limited to the useless or valueless property and may not be less than the lower appraisal valuation or more than the higher appraisal valuation.

(E) The former CCN holder and the prospective retail public utility shall each pay one-half of the cost of the third appraisal. Payment shall be made directly to the third appraiser. Proofs of payment shall be separately filed with the commission by the former CCN holder and the prospective retail public utility.

(F) The commission is bound by the third appraiser's valuation of the useless or valueless property. The commission shall review the valuation to ensure compliance with the requirements of this section.

(9) Valuation of real property. The value of real property that the commission identified in the order issued under subsection (n)(11) of this section shall be determined according to the standards set forth in chapter 21 of the Texas Property Code governing actions in eminent domain.

(10) Valuation of personal property. The value of personal property that the commission identified in the order issued under subsection (n)(11) of this section shall be determined according to this paragraph. To ensure that compensation to a former CCN holder is just and adequate, the following factors shall be used in valuing such personal property:

(A) the amount of the former CCN holder's debt allocable to service to the removed area;

(B) the value of the service facilities belonging to the former CCN holder that are located within the removed area;

(C) the amount of any expenditures for planning, design, or construction of the service facilities of the former CCN holder that are allocable to service to the removed area;

(D) the amount of the former CCN holder's contractual obligations allocable to the removed area;

(E) any demonstrated impairment of service or any increase of cost to consumers of the former CCN holder remaining after a CCN revocation or amendment under this section;

(F) the impact on future revenues lost from existing customers;

(G) necessary and reasonable legal expenses and professional fees; and

(H) any other relevant factors as determined by the commission.

(11) If the presiding officer determines that all requirements of this subsection have been met, the presiding officer shall issue an order setting the compensation due to the former CCN holder at the valuation established by the appraisal. This order shall be the final act of the commission, subject to motions for rehearing. Alternatively, the presiding officer may issue a proposed order for consideration by the commission.

(p) Additional conditions.

(1) If the current CCN holder did not agree in writing to a revocation or amendment sought under this section, then an affected retail public utility may request that the revocation or amendment be conditioned on the following:

(A) ordering the prospective retail public utility to provide service to the entire service area of the current CCN holder; and

(B) transferring the entire CCN of the current CCN holder to the prospective retail public utility.

(2) The commission shall order the prospective retail public utility to provide service to the entire service area of the current CCN holder if the commission finds that the current CCN holder will be unable to provide continuous and adequate service at an affordable cost to the current CCN holder's remaining customers.

(A) The commission shall order the prospective retail public utility to provide continuous and adequate service to the remaining customers at a cost comparable to the cost of that service to the prospective retail public utility's other customers and shall establish the terms under which service must be provided.

(B) The commission may order any of the following terms:

(i) transfer of debt and other contract obligations;

(ii) transfer of real and personal property;

(iii) establishment of interim rates for affected customers during specified times; and

(iv) other provisions necessary for the just and reasonable allocation of assets and liabilities.

(3) The prospective retail public utility shall not charge the affected customers any transfer fee or other fee to obtain service, except for the following:

(A) the prospective retail public utility's usual and customary rates for monthly service, or

(B) interim rates set by the commission, if applicable.

(4) If the commission orders the prospective retail public utility to provide service to the entire service area of the current CCN holder, the commission shall not order compensation to the current CCN holder, and the prospective retail public utility shall not file a petition under subsection (n) of this section or a notice of intent under subsection (o) of this section.

§24.120.Single Certification in Incorporated or Annexed Areas.

(a) Applicability. This section applies to a requested area that also meets the following criteria:

(1) the requested area has been incorporated or annexed by a municipality;

(2) a retail public utility provides service to the requested area under a certificate of convenience and necessity (CCN); and

(3) the retail public utility that holds the CCN under which the requested area is currently certificated is one of the following:

(A) a water supply or sewer service corporation, a special utility district under chapter 65 of the Texas Water Code, or a fresh water supply district under chapter 53 of the Texas Water Code; or

(B) not a water supply or sewer service corporation, and its service area is located entirely within the boundaries of a municipality that has a population of at least 1.7 million according to the most recent federal census.

(b) Definitions. In this section, the following words and terms have the definitions provided by this subsection.

(1) Impaired property --Property remaining in the ownership of the current CCN holder after single certification that would sustain damages from the transfer of property to the municipality.

(2) Franchised utility --A retail public utility that has been granted a franchise by a municipality to provide service inside the municipal boundaries.

(3) Current CCN holder --The retail public utility that holds a CCN to provide service to the municipality's requested area.

(4) Transferred property --Property that the municipality has requested be transferred to it or to a franchised utility from the current CCN holder.

(5) Useless or valueless property --Property that would be rendered useless or valueless to the current CCN holder by single certification.

(c) Notice of intent to provide service in incorporated or annexed area. A municipality that intends to provide service itself or through a franchised utility to all or part of an annexed or incorporated area shall notify the current CCN holder in writing of the municipality's intent. The written notice to the current CCN holder shall specify the following information:

(1) the municipality's requested area;

(2) any transferred property;

(3) the municipal ordinance or other action that annexed or incorporated the municipality's requested area;

(4) what kind of service will be provided;

(5) whether a municipally owned utility or franchised utility will provide the service; and

(6) the municipally owned utility's or the franchised utility's identity and contact information.

(d) Written agreement regarding service to area. The municipality and the current CCN holder may agree in writing that all or part of the area incorporated or annexed by the municipality may receive service from a municipally owned utility, a franchised utility, or the current CCN holder, or any combination of those entities.

(1) If a franchised utility is to provide service to any part of the area, the franchised utility shall also be a party to the agreement.

(2) The executed agreement may provide for single or dual certification of all or part of the area incorporated or annexed by the municipality, for the purchase of facilities or property, and may contain any other terms agreed to by the parties.

(3) The executed agreement shall be filed with the commission. The commission shall incorporate the agreement's terms into the respective CCNs of the municipality, current CCN holder, and franchised utility, as appropriate.

(e) Application for single certification. If an agreement is not executed within 180 calendar days after the municipality provides written notice under subsection (c) of this section and the municipality intends to provide service to the municipality's requested area, the municipality shall file an application with the commission to grant single certification to a municipally owned utility or a franchised utility.

(1) If a franchised utility will provide service to any part of the municipality's requested area, the franchised utility shall join the application.

(2) The application shall include all of the information listed in this paragraph.

(A) The application shall identify the municipal ordinance or other action that annexed or incorporated the municipality's requested area.

(B) The application shall identify the type of service that will be provided to the municipality's requested area.

(C) The application shall identify the municipally owned utility or franchised utility that will provide service to the municipality's requested area and, if each will serve part of the area, the area that each will serve.

(D) The application shall identify contact information for the current CCN holder.

(E) The application shall demonstrate compliance with the TCEQ's minimum requirements for public drinking water systems if the municipality owns a public drinking water system.

(F) The application shall demonstrate that at least 180 calendar days have passed since the date that the municipality provided written notice under subsection (c) of this section.

(G) The application shall identify with specificity any property that the municipality requests be transferred from the current CCN holder.

(H) The application shall identify the boundaries of the municipality's incorporated area or extraterritorial jurisdiction by providing digital-mapping data in a shapefile (SHP) format georeferenced in either NAD 83 Texas State Plane Coordinate System (US feet) or in NAD 83 Texas Statewide Mapping System (meters). The digital mapping data shall include a single, continuous polygon record.

(I) The application shall identify the municipality's requested area by providing mapping information for the requested area in accordance with §24.119 of this title relating to mapping requirements for certificate of convenience and necessity application. Commission staff may request additional mapping information after the application is filed.

(3) Within 30 calendar days of the filing of the application, commission staff shall file a recommendation regarding whether the application meets the requirements of this subsection.

(f) Notices for single-certification application. The applicant shall send a copy of the application to the current CCN holder by certified mail on the same day that the applicant files the application with the commission.

(g) Reasonable belief that current CCN holder does not exist.

(1) If an applicant reasonably believes that the current CCN holder no longer exists, the applicant shall file an affidavit stating the following information:

(A) a statement that it believes the current CCN holder no longer exists;

(B) a description of the actions taken to locate the current CCN holder and the results of those actions; and

(C) any other facts that support its belief that the current CCN holder no longer exists.

(2) If the current CCN holder fails to file a response within 30 calendar days after an affidavit is filed under paragraph (1) of this subsection, the presiding officer shall determine either that the requirements of paragraph (1) of this subsection have not been met or that the current CCN holder no longer exists.

(h) Response to single-certification application. The current CCN holder shall file a response to the application for single certification in conformance with this subsection.

(1) The response shall be filed within 40 calendar days of the filing of the application.

(2) The response shall state the following information:

(A) whether the single certification is agreed to; and

(B) if there is no agreement for single certification, any conditions that, if met, would cause the current CCN holder to agree to single certification.

(3) In its response, the current CCN holder shall identify any useless or valueless property, or impaired property, that would result from certification of the municipality's requested area to the municipality.

(4) There is a rebuttable presumption that there is no useless or valueless property or impaired property if the current CCN holder fails to timely respond as required under paragraph (1) of this subsection. Upon motion and proof of service consistent with the requirements of subsection (f) of this section, the presiding officer may issue an order determining that there is no useless or valueless property or impaired property.

(i) Referral to SOAH.

(1) Within 50 calendar days of the filing of the application, a presiding officer shall determine whether an application for single certification meets the requirements of subsection (e) of this section.

(2) If the presiding officer determines that the application meets the requirements of subsection (e) of this section, the application shall be referred to the State Office of Administrative Hearings (SOAH) for a hearing. SOAH shall fix a time and place for a hearing on the application and shall notify the current CCN holder, municipality, and franchised utility, if any, of the hearing.

(3) Except as provided under paragraph (4) of this subsection, if the presiding officer determines that the application does not meet the requirements of subsection (e) of this section, the applicant shall supplement its application to correct the identified deficiencies within a timeframe, and under a process, established by the presiding officer.

(4) The application shall be denied if the municipality fails to demonstrate compliance with the TCEQ's minimum requirements for public drinking water systems. This paragraph does not apply to a municipality that does not own a public drinking water system.

(j) Hearing at SOAH.

(1) The hearing at SOAH shall be limited to determining what property, if any, is useless or valueless property, impaired property, or transferred property.

(2) The current CCN holder bears the burden to prove what property is useless or valueless property or impaired property.

(3) The transferred property shall be limited to the specific property identified in the application.

(4) The SOAH administrative law judge shall issue a proposal for decision for the commission's consideration.

(k) Interim order. The commission shall issue an interim order identifying what property, if any, is useless or valueless property, impaired property, or transferred property.

(l) Administrative Completeness. Section 24.8 of this title relating to administrative completeness does not apply to the determination of administrative completeness under this section. After the commission has issued its interim order under subsection (k) of this section, a presiding officer shall determine that the application for single certification is administratively complete and shall establish a procedural schedule that will allow total compensation for any property identified in the interim order to be determined not later than 90 calendar days after the application is determined to be administratively complete.

(m) Valuation of real property. The value of real property that the commission identified in the interim order issued under subsection (k) of this section shall be determined according to the standards set forth in Texas Property Code, chapter 21, governing actions in eminent domain.

(n) Valuation of personal property. The value of personal property that the commission identified in the interim order issued under subsection (k) of this section shall be determined according to this subsection.

(1) This subsection is intended to ensure that the compensation to a current CCN holder is just and adequate as provided by these rules.

(2) The following factors shall be used to value personal property that the commission identified in the interim order issued under subsection (k) of this section:

(A) the impact on the current CCN holder's existing indebtedness and the current CCN holder's ability to repay that debt;

(B) the value of the current CCN holder's service facilities located within the municipality's requested area;

(C) the amount of any expenditures for planning, design, or construction of service facilities outside the incorporated or annexed area that are allocable to service to the municipality's requested area;

(D) the amount of the current CCN holder's contractual obligations allocable to the municipality's requested area;

(E) any demonstrated impairment of service or increase of cost to the current CCN holder's customers that remain after the single certification;

(F) the impact on future revenues lost from existing customers;

(G) necessary and reasonable legal expenses and professional fees;

(H) factors relevant to maintaining the current financial integrity of the current CCN holder; and

(I) other relevant factors as determined by the commission.

(o) Valuation Process.

(1) For an area incorporated by a municipality, the valuation of property that the commission identified in the interim order issued under subsection (k) of this section shall be determined by a qualified individual or firm serving as an independent appraiser. The independent appraiser shall be limited to appraising the useless or valueless property, transferred property, and impaired property. The current CCN holder shall select the independent appraiser by the 21st calendar after the date of the order determining that the application is administratively complete. The municipality shall pay the independent appraiser's costs. The independent appraiser shall file its appraisal with the commission by the 70th calendar after the date of the order determining that the application is administratively complete. The valuation under this paragraph is binding on the commission. The commission shall review the valuation to ensure compliance with the requirements of this section.

(2) For an area annexed by a municipality, the valuation of property that the commission identified in the interim order issued under subsection (k) of this section shall be determined by an independent appraiser agreed upon by the municipality and the current CCN holder. The independent appraiser shall be a qualified individual or firm.

(A) If the current CCN holder and the municipality cannot agree on an independent appraiser within ten calendar days after the application is found administratively complete, the municipality shall notify the serving CCN holder in writing of the failure to agree.

(B) If the parties still cannot agree within 11 calendar days of the written notification, on the 11th day, the current CCN holder and the municipality shall each file with the commission a letter appointing a qualified individual or firm to serve as an independent appraiser.

(C) Within 10 business days of their appointment, the independent appraisers shall meet to reach an agreed valuation of property that the commission identified in the interim order issued under subsection (k) of this section. If the appraisers cannot agree on a valuation before the 16th business day after the date of their first meeting under this subsection, then

(i) both parties shall file separate appraisals by that date, and

(ii) either the current CCN holder or the municipality shall petition the commission to appoint a third appraiser to reconcile the two appraisals.

(D) The commission may designate a person to appoint the third appraiser.

(E) The third appraiser shall file an appraisal that reconciles the two other appraisals by the 80th calendar day after the application is found administratively complete.

(F) The third appraiser's valuation may not be less than the lower or more than the higher of the two original appraisals filed under subparagraph (C)(i) of this paragraph.

(G) The current CCN holder and the municipality shall each pay one-half of the costs of the independent appraisers. Payment shall be made directly to the appraiser, and proofs of payment shall be separately filed by the former CCN holder and the prospective retail public utility within 30 calendar days of the date of the invoice.

(3) A valuation under this subsection is binding on the commission. The commission shall review the valuation to ensure compliance with the requirements of this section.

(p) Action after receipt of appraisals.

(1) An order incorporating the valuation determined under subsection (o) of this section shall be issued by the 90th calendar day after the application is found administratively complete.

(2) The commission shall deny the application if the municipality fails to demonstrate compliance with the TCEQ's minimum requirements for public drinking water systems. This paragraph does not apply to a municipality that does not own a public drinking water system.

(3) If the commission does not deny the application, the commission's order shall do the following:

(A) determine what property, if any, is useless or valueless property, impaired property, or transferred property;

(B) determine the monetary amount that is adequate and just to compensate the current CCN holder for any such useless or valueless property, impaired property, and transferred property; and

(C) grant single certification.

(4) The granting of single certification shall be effective on the date that

(A) the municipality or franchised utility pays adequate and just compensation under a court order;

(B) the municipality or franchised utility pays an amount into the registry of the court or to the current CCN holder under TWC §13.255(f); or

(C) the Travis County district court's judgment becomes final, if the court's judgment provides that the current CCN holder is not entitled to any compensation.

(5) The commission's order does not transfer any property, except as provided under subsection (v) of this section. Any other transfer of property under this section shall be obtained only by a court judgment rendered under TWC §13.255(d) or (e).

(6) A presiding officer may issue an order under this section. Any such order shall be the final act of the commission subject to motions for rehearing.

(q) Appeal to district court, district court judgment, and transfer of property.

(1) Under TWC §13.255(e), any party that is aggrieved by a final order of the commission under this section may file an appeal with the district court of Travis County within 30 days after the order becomes final.

(2) Under TWC §13.255(d), if the commission's final order is not appealed within 30 days, the municipality may request the Travis County district court to enter a judgment consistent with the commission's order.

(r) Withdrawal of application for single certification. A municipality or a franchised utility may withdraw an application for single certification without prejudice at any time before a court judgment becomes final, provided that the municipality or the franchised public utility has not taken physical possession of property owned by the current CCN holder or made payment for the right to take physical possession under TWC §13.255(f).

(s) Additional requirements regarding certain current CCN holders. The following subsection applies to proceedings under this section in which the current CCN holder meets the criteria of subsection (a)(3)(B) of this section.

(1) The commission or a court, as appropriate, must determine that the service provided by the current CCN holder is substandard or its rates are unreasonable in view of the current CCN holder's reasonable expenses.

(2) If the municipality abandons its application, the commission is authorized to award to the current CCN holder its reasonable expenses incurred to participate in the proceeding addressing the municipality's application, including attorney's fees.

(3) Unless the current CCN holder otherwise agrees, the municipality shall take all of the current CCN holder's personal and real property that is used and useful to provide service or is eligible to be deemed so in a future rate case.

(t) Notice of single certification. Within 60 days of a transfer of property under a court judgment, the municipality or franchised utility shall provide written notice to each customer within the service area that is now singly certificated. The written notice shall provide the following information: the identity of the municipality or franchised utility, the reason for the transfer, the rates to be charged by the municipality or franchised utility, and the effective date of those rates.

(u) Provision of service.

(1) A municipally owned utility or a franchised utility may provide service to an incorporated or annexed area on one of the following dates:

(A) the date that the commission incorporates into the CCNs of the municipality, current CCN holder, and franchised utility, if applicable, the terms of an executed agreement filed with the commission under subsection (d)(3) of this section; or

(B) the date that the municipality or franchised utility

(i) pays adequate and just compensation under court order, or

(ii) pays an amount into the registry of the court or to the current CCN holder under TWC §13.255(f).

(2) If the court judgment provides that the current CCN holder is not entitled to any compensation, the grant of single certification shall go into effect when the court judgment becomes final.

(v) Additional conditions.

(1) If the current CCN holder did not agree in writing to a revocation or amendment sought under this section, then an affected retail public utility may request that the revocation or amendment be conditioned on the following:

(A) ordering the municipality or franchised utility, as applicable, to provide service to the entire service area of the current CCN holder; and

(B) transferring the entire CCN of the current CCN holder to the municipality or franchised utility, as applicable.

(2) The commission shall order the municipality or franchised utility, as applicable, to provide service to the entire service area of the current CCN holder if the commission finds that the current CCN holder will be unable to provide continuous and adequate service at an affordable cost to the current CCN holder's remaining customers.

(A) The commission shall order the municipality or franchised utility, as applicable, to provide continuous and adequate service to the remaining customers at a cost comparable to the cost of that service to the municipality's or franchised utility's other customers and shall establish the terms under which service must be provided.

(B) The commission may order the following terms:

(i) transfer of debt and other contract obligations;

(ii) transfer of real and personal property;

(iii) establishment of interim service rates for affected customers during specified times; and

(iv) other provisions necessary for the just and reasonable allocation of assets and liabilities.

(3) The municipality or franchised utility, as applicable, shall not charge the affected customers any transfer fee or other fee to obtain service, except

(A) the municipality's or franchised utility's usual and customary rates for monthly service, or

(B) interim rates set by the commission, if applicable.

(4) If the commission orders the municipality or franchised utility, as applicable, to provide service to the entire service area of the current CCN holder, the proceeding shall not be referred to SOAH for a hearing to determine the useless or valueless property, impaired property, or transferred property, and the commission shall not order compensation to the current CCN holder.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 5, 2016.

TRD-201606152

Adriana Gonzales

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: January 15, 2017

For further information, please call: (512) 936-7293


CHAPTER 27. RULES FOR ADMINISTRATIVE SERVICES

SUBCHAPTER A. GENERAL PROVISIONS

16 TAC §27.21

The Public Utility Commission of Texas (commission) proposes new §27.21, relating to commission employee training. The proposed new section will bring the commission into compliance with amendments to the State Employees Training Act, Texas Government Code §§656.041 - 656.104, made by the 84th Legislature. Specifically, House Bill No. 3337 (HB 3337) amended the State Employees Training Act to clarify that a state agency may only pay the tuition of an employee for successful completion of a training program offered by an institution of higher education and required state agencies to adopt rules requiring that the executive head of the agency must authorize any tuition reimbursement payment. Project Number 46564 is assigned to this proceeding.

Kasey Feldman, General Counsel, has determined that for each year of the first five-year period the proposed section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section.

Ms. Feldman has determined that for each year of the first five years the proposed section is in effect the public benefit anticipated as a result of enforcing the section will be to ensure compliance with HB 3337 and provide safeguards to ensure the proper use of state funds. There will be no adverse economic effect on small businesses or micro-businesses as a result of enforcing this section. Therefore, no regulatory flexibility analysis is required. There is no anticipated economic cost to persons who are required to comply with the section as proposed.

Ms. Feldman has also determined that for each year of the first five years the proposed section is in effect there should be no effect on a local economy, and therefore no local employment impact statement is required under Administrative Procedure Act (APA), Texas Government Code §2001.022.

The commission staff will conduct a public hearing on this rulemaking, if requested pursuant to the Administrative Procedure Act, Texas Government Code §2001.029, at the commission's offices located in the William B. Travis Building, 1701 North Congress Avenue, Austin, Texas 78701 on January 30, 2017. The request for a public hearing must be received within 30 days after publication.

Comments on the proposed new section may be filed with the commission's Filing Clerk at 1701 North Congress Avenue, Austin, Texas or mailed to P.O. Box 13326, Austin, Texas 78711-3326, within 30 days after publication. Sixteen copies of comments to the proposed new section are required to be filed pursuant to §22.71(c) of this title. Comments should be organized in a manner consistent with the organization of the proposed rule. The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed section. The commission will consider the costs and benefits in deciding whether to adopt the section. All comments should refer to Project Number 46564.

This new section is proposed under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.002 (West 2007 and Supp. 2015) (PURA), which provides the Public Utility Commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; and the State Employees Training Act, Texas Government Code Annotated §656.048 (West 2015), which requires the commission to adopt rules relating to the eligibility of the commissioners and commission employees for training and education supported by the commission, and the obligations assumed by the commissioners and commission employees on receiving the training and education.

Cross Reference to Statutes: Public Utility Regulatory Act §14.002, Texas Government Code §§656.041 - 656.104.

§27.21.Commission Employee Training.

(a) "Training," as used in this section, means instruction, teaching, or other education received by a commission employee that is not normally received by all commission employees and that is designed to enhance the ability of the employee to perform the employee's job. The term includes a course of study at an institution of higher education, as defined by Texas Education Code §61.003(8), if the commission spends money to assist the employee to meet the expense of the course of study or pays salary to the employee to undertake the course of study as an assigned duty. The term does not include instruction, teaching, or other education that is required either by state or federal law or that is determined necessary by the commission and offered to all commission employees performing similar jobs.

(b) The commission may make public funds available to its employees for training in accordance with the State Employees Training Act, Texas Government Code §§656.041 - 656.104. The State Employees Training Act allows the commission to spend public funds to pay the salary, tuition and other fees, travel and living expenses, training stipend, expense of training materials, and other necessary expenses of an instructor, student, or other participant in a training program.

(c) Training paid for, in part or in whole, by the commission, or training undertaken by an employee of the commission as an assigned duty must be related to the duties or prospective duties of the employee.

(d) Employees may be required to complete training related to the employee's duties or prospective duties.

(e) Requirements for eligibility and participation in training shall be in accordance with this section and the commission's current employee handbook.

(f) Permission to participate in training, including commission-sponsored training, shall not in any way affect an employee's at-will status or constitute a guarantee of continued employment, nor shall it constitute a guarantee or indication of future employment in a prospective position.

(g) Permission to participate in any training may be denied or withdrawn at the discretion of the commission's executive director for any reason, including, but not limited to, a determination that participation may negatively impact the employee's job duties or performance.

(h) Permission to participate in any training may be contingent upon reasonable requirements set in writing in advance by the employee's supervisor. If pre-determined requirements are not met:

(1) Permission to participate or continue participating in the training may be denied or withdrawn; and/or

(2) The employee may be, at the discretion of the commission's executive director, required to repay the commission any amounts paid toward the training.

(i) For an authorized training program offered by an institution of higher education or a private or independent institution of higher education:

(1) the commission shall only reimburse the tuition expenses for a program course(s) successfully completed by the employee at an accredited institution of higher education (including online courses or courses not credited towards a degree); and

(2) the commission's executive director must authorize the tuition reimbursement payment before the employee may be reimbursed.

(j) An employee who does not perform the employee's regular duties for three or more months as a result of training paid for by the commission must:

(1) work for the commission following the training for at least one month for each month of the training period; or

(2) repay the commission for all the costs associated with the training that were paid during the training period, including any amounts of the employee's salary that were paid for time spent on training and were not accounted for as paid vacation or compensatory leave, and any reasonable expenses the commission incurs in obtaining restitution, including reasonable attorney's fees.

(k) The commission's executive director may require an employee who requests full or partial payment or reimbursement of tuition for training necessary to obtain a degree or certification to agree in writing before payment or reimbursement is made to pay the commission for any amounts paid if the employee voluntarily leaves employment with the commission within one year after the training is completed.

(1) Amounts paid by the commission shall be prorated to credit any full calendar month of employment following completion of the training.

(2) This subsection only applies to an employee to whom subsection (j) of this section does not apply because the employee either continued to perform the employee's regular duties during training or did not perform the employee's regular duties for a period of time during training that was less than three months.

(l) The commission may waive the requirements prescribed under subsection (j) of this section by an order adopted in a public meeting if the commission finds that such action is in the best interest of the commission or is warranted because of an extreme personal hardship suffered by the employee.

(m) Before an employee receives training that will be paid for by the commission and during which the employee will not be performing the employee's regular duties for three months or more, the employee must agree in writing to comply with the requirements prescribed under subsection (j) of this section.

(n) All materials received by an employee through commission-funded training are the property of the commission.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 1, 2016.

TRD-201606117

Adriana Gonzales

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: January 15, 2017

For further information, please call: (512) 936-7223


PART 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION

CHAPTER 68. ELIMINATION OF ARCHITECTURAL BARRIERS

The Texas Department of Licensing and Regulation (Department) proposes amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 68, §§68.10, 68.20, 68.30, 68.31, 68.50 - 68.54, 68.60, 68.70, 68.74 - 68.76, 68.90, 68.93 and 68.102; proposes the repeal of current §68.55 and §68.80; and proposes new §68.80 and §68.103, regarding the Elimination of Architectural Barriers program.

The current Elimination of Architectural Barriers program rules have been in effect since March 15, 2012. Federal and industry standards have significantly changed and the program rules must be updated to reflect current standards and industry practice; eliminate confusion and conflicts; and provide better guidance to the public. The proposed amendments, new rules and repeal are necessary to clarify inconsistencies; align the rules with state and federal accessibility standards; remove redundant and outdated provisions; provide registered accessibility specialists with the flexibility to submit variance applications; and remove state government from private business decisions.

The proposed amendments to §68.10 add definitions for "alteration", "commerce", "estimated construction cost", "housing at a place of education", and "public entity". Editorial changes were also made to renumber the section accordingly.

The proposed amendments to §68.20 clarify the requirement for temporary buildings to comply with Texas Accessibility Standards. Editorial changes were also made to renumber the section accordingly.

The proposed amendments to §68.30 simplify language and clarifies the lack of requirement for private two story buildings to provide an accessible route to the second floor. Editorial changes were also made to renumber the section accordingly.

The proposed amendments to §68.31 remove non applicable language regarding practiced variance procedures.

The proposed amendments to §68.50 require certain submissions to include "estimated construction cost" but remove the requirement to submit plan reviews to the Department. Editorial changes were also made to renumber the section accordingly.

The proposed amendments to §68.51remove the Department from plan reviews.

The proposed amendments to §68.52 eliminate the "request for inspection" form since the Department no longer performs inspections. Editorial changes were also made to renumber the section accordingly.

The proposed amendments to §68.53 remove the Department from doing plan reviews and inspections.

The proposed amendments to §68.54 delete non applicable language and allow certain documents to be submitted electronically.

The proposed repeal of §68.55 eliminates non applicable language since the Department no longer accepts plan reviews.

The proposed amendments to §68.60 make an editorial change and removes non applicable language.

The proposed amendments to §68.70 remove the requirement for registered accessibility specialists to attend the Department's Academy.

The proposed amendments to §68.74 make editorial changes based on the Department's current practice.

The proposed amendments to §68.75 allow for individual registered accessibility specialists to work as a group or business with a single registered accessibility specialist as the responsible party. Editorial changes were also made to renumber the section accordingly.

The proposed amendments to §68.76 remove non applicable language and editorial changes to renumber the section accordingly.

The proposed repeal of current §68.80 is replaced by new §68.80, which removes the review fee and restructures the information according to the Department's other rule chapters.

The proposed amendments to §68.90 make editorial changes to be consistent throughout the Department's rules.

The proposed amendments to §68.93 allow for a complaint to be filed if the registered accessibility specialist does not comply with procedures.

The proposed amendments to §68.102 clarify the Department requirements when right-of-way projects are submitted.

The proposed new §68.103 provides the requirements for detention and correctional facilities.

Brian E. Francis, Executive Director, has determined that for the first five-year period the proposed amendments, repeal and new rules are in effect there will be no direct cost to state or local government as a result of enforcing or administering the proposed rules. There is no estimated gain or loss in revenue to the state as a result of enforcing or administering the proposed rule.

Mr. Francis also has determined that for each year of the first five-year period the proposed amendments, new rules, and repeal are in effect, the public will benefit by increased protection to public health and safety. Additionally, the licensing and variance application processes will be more efficient resulting in a realized efficiency for the program and the industry at large.

There is no anticipated adverse economic effect on small or micro-businesses or to persons who are required to comply with the amended, new and repeal rules as proposed.

Since the agency has determined that the proposed amendments, new rules and repeal will have no adverse economic effect on small or micro-businesses, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, under Texas Government Code §2006.002, is not required.

Comments on the proposal may be submitted by mail to Pauline Easley, Legal Assistant, General Counsel's Office, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711; or by facsimile to (512) 475-3032, or electronically to erule.comments@tdlr.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

16 TAC §§68.10, 68.20, 68.30, 68.31, 68.50 - 68.54, 68.60, 68.70, 68.74 - 68.76, 68.80, 68.90, 68.93, 68.102, 68.103

The amendments and new rules are proposed under Texas Occupations Code, Chapter 51 and Texas Government Code, Chapter 469, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Texas Government Code, Chapter 469. No other statutes, articles, or codes are affected by the proposal.

§68.10.Definitions.

The following words and terms, when used in this chapter shall have the following meanings, unless the context clearly indicates otherwise.

(1) Act--Texas Government Code, Chapter 469, Elimination of Architectural Barriers (the Texas Architectural Barriers Act).

(2) Alteration-- A change to a building or facility that affects or could affect the usability of the building or facility or portion thereof. Re-roofing, painting, or wallpapering, or changes to mechanical and electrical systems are not alterations unless they affect the usability of the building or facility.

(3) [(2)] Building--Any structure located in the State of Texas [that is] used or [ and] intended for supporting or sheltering any use or occupancy.

(4) [(3)] Commencement of Construction--The date of placement of engineering stakes, delivery of lumber or other construction materials to the job site, erection of batter boards, formwork, or other construction related work.

(5) Commerce--Travel, trade, traffic, transportation, or communication among the several States; between any foreign country or any territory or possession and any State; or between points in the same State and through another State or foreign country.

(6) [(4)] Completion of Construction--The date when a construction project results in occupancy or the issuance of a certificate of occupancy. For public roadway projects, completion of construction occurs upon final payment and release of the contractor performing the work or, if the work is performed by public employees, removal of barricades and opening of all traffic lanes for use.

(7) [(5)] Construction Documents--Drawings, [Documents used for the construction of a building or facility, including working drawings, plans,] specifications, addenda, change orders, construction change directives and other supplemental documents prepared [issued] for the purpose of regulatory approval, permitting, or construction.

(8) [(6)] Contract Provider--The state agency or political subdivision under contract with the department to perform plan reviews, inspections, or both.

(9) [(7)] Crosswalk--That part of a roadway where motorists are required to yield to pedestrians crossing, as defined by state and local regulations, whether marked or unmarked.

(10) [(8)] Curb Line--A line that represents the extension of the face of the curb and marks the transition between the sidewalk and the gutter or roadway at a curb ramp or flush landing.

(11) [(9)] Designated Agent--An individual designated in writing by the owner to act on the owner's behalf.

(12) [(10)] Element--An architectural or mechanical component of a building, facility, space, or site, e.g., telephone, curb ramp, door, drinking fountain, seating, [or] water closet, or public right-of-way.

(13) Estimated Construction Cost--Includes all costs for construction of a project except site acquisition, architectural, engineering and consulting fees, furniture, and equipment unless the equipment is part of the mechanical, electrical, or plumbing systems.

(14) [(11)] Facility--All or any portion of buildings, structures, site improvements, elements, and pedestrian routes or vehicular ways located on a site e.g.[: including] complexes, equipment, roads, walks, passageways, parking lots, or other real property subject to the Act.

(15) Housing at a Place of Education--Public or privately funded housing operated by or on behalf of an elementary, secondary, undergraduate, or postgraduate school, or other place of education, including dormitories, suites, apartments, or other places of residence.

(16) [(12)] Issue--To mail, deliver, transmit, or otherwise release plans or specifications to an owner, lessee, contractor, subcontractor, or any other person acting for an owner or lessee for the purpose of construction, applying for a building permit, or obtaining regulatory approval after such plans have been sealed by an architect, registered interior designer, landscape architect, or engineer. In the case of a state-funded or other public works project, it is the time at which plans or specifications are publicly posted for bids, after such plans or specifications have been sealed by an architect, registered interior designer, landscape architect, or engineer.

(17) [(13)] Overall Responsibility--The level of responsibility held by an architect, registered interior designer, landscape architect or engineer who prepares construction documents and coordinates the various aspects of the design of a building or facility.

(18) [(14)] Owner--The person or persons, company, corporation, authority, commission, board, governmental entity, institution, or any other entity that holds title to the subject building or facility. For purposes under these rules and the Act, an owner may designate an agent; however, the owner remains responsible for compliance with the Act.

(19) [(15)] Pedestrian Access Route--A continuous and unobstructed path of travel provided for pedestrians with disabilities within or coinciding with a pedestrian circulation path [An accessible route for pedestrian use within the public right-of-way].

(20) [(16)] Pedestrian Elements--Components that make up a pedestrian access route including, but not limited to walking surfaces, ramps, curb ramps, crosswalks, pedestrian overpasses and underpasses, automated pedestrian signals, elevators, and platform lifts.

(21) Public Entity--Any State or local government or any department, agency, special purposes district, or other instrumentality of a State or States or local government.

(22) [(17)] Public Right-of-Way-- Public land or property, usually in interconnected corridors, that is acquired for or dedicated to transportation purposes [The land or property provided for public roadways, including the roadway itself and the areas between the roadway and adjacent properties].

(23) [(18)] Registered Building or Facility--For the purposes of §469.101 of the Act, a registered building or facility is a construction project that has been assigned a project registration number by the department.

(24) [(19)] Registered Accessibility Specialist--An individual who is certified by the department to perform review and inspection functions of the department.

(25) [(20)] Religious Organization--An organization that qualifies for an exemption from taxation, as a religious organization as provided in Texas Tax Code, Chapter 11, §11.20(c).

[(21) Renovation, Modification, or Alteration--Any construction activity, including demolition, involving any part or all of a building or facility. Cosmetic work and normal maintenance do not constitute a renovation, modification, or alteration.]

(26) [(22)] Rules--Title 16, Texas Administrative Code, Chapter 68, the administrative rules of the Texas Department of Licensing and Regulation promulgated pursuant to the Act.

(27) [(23)] Sidewalk--That portion of an exterior circulation path that is improved for use by pedestrians and usually paved.

(28) [(24)] State Agency--A board, commission, department, office, or other agency of state government.

(29) [(25)] TAS--The 2012 Texas Accessibility Standards which were adopted by the Commission and became effective March 15, 2012.

(30) [(26)] Variance Application--The formal documentation filed with the department, by which the owner requests that the department waive or modify accessibility standards.

§68.20.Buildings and Facilities Subject to Compliance with the Texas Accessibility Standards.

(a) A building or facility used by a [the] public entity is subject to compliance with the Texas Accessibility Standards (hereinafter "TAS") if it is constructed, renovated, or modified, in whole or in part, on or after January 1, 1970, using funds from the state or a county, municipality, or other political subdivision of the state.

(b) A building or facility referenced by this subsection or subsection (d) that is constructed, renovated, or modified on a temporary or emergency basis e.g. man-camps, fixed furniture systems, wall systems, and exhibit areas.

(c) [(b)] A building or facility leased for use or occupied, in whole or in part, by the state under a lease or rental agreement entered into on or after January 1, 1972, is subject to the TAS except as modified under §68.101.

(d) [(c)] The following private buildings and facilities constructed, renovated, or modified on or after January 1, 1992 and defined as a "public accommodation" by Section 301, Americans with Disabilities Act of 1990 (42 U.S.C. Section 12181), and its subsequent amendments, are subject to the TAS:

(1) Places of lodging, [an inn, hotel, motel, or other place of lodging] except for an establishment located within a building that contains not more than five rooms for rent or hire and that is actually occupied by the proprietor of such establishment as the residence of such proprietor. For the purposes of this section, a building or facility is a place of lodging" if it is:[;]

(A) An inn, hotel, or motel; or

(B) A building or facility that:

(i) Provides guest rooms for sleeping for stays that are primarily short-term in nature (generally 30 days or less) where the occupant does not have the right to return to a specific room or unit after the conclusion of his or her stay; and

(ii) Provides guest rooms under conditions and with amenities similar to a hotel, motel, or inn, including the following:

(I) On or off-site management and reservations service;

(II) Rooms available on a walk-up or call-in basis;

(III) Availability of housekeeping or linen service; and

(IV) Acceptance of reservations for a guest room type without guaranteeing a particular unit or room until checking in, and without prior lease or security deposit.

(2) a restaurant, bar, or other establishment serving food or drinks;

(3) a motion picture house, theater, concert hall, stadium, or other place of exhibition or entertainment;

(4) an auditorium, convention center, lecture hall, or other place of public gathering;

(5) a bakery, grocery store, clothing store, hardware store, shopping center, or other sales or rental establishment;

(6) a laundromat, dry-cleaner, bank, barber shop, beauty shop, travel service, shoe repair service, funeral parlor, gas station, office of an accountant or lawyer, pharmacy, insurance office, professional office of a health care provider, hospital, or other service establishment;

(7) a terminal, depot, or other station used for specified public transportation;

(8) a park, zoo, amusement park, or other place of recreation;

(9) a museum, library, gallery, or other place of public display or collection;

(10) a nursery, elementary, secondary, undergraduate, or postgraduate private school, or other place of education;

(11) a day care center, senior citizen center, homeless shelter, food bank, adoption agency, or other social service center establishment; and

(12) a gymnasium, health spa, bowling alley, golf course, or other place of exercise or recreation.

(e) [(d)] Commercial facilities are subject to the Act and compliance with TAS if they are intended for non-residential use by a private entity and if their operations will affect commerce. Such application shall not include railroad locomotives, railroad freight cars, railroad cabooses, commuter or intercity passenger rail cars or any other railroad cars described in the Americans with Disabilities Act (ADA) §242, or covered under the ADA, Title III, railroad rights-of-way, or facilities that are covered or expressly exempted from coverage under the federal Fair Housing Act of 1968.

(f) [(e)] Buildings or facilities of a religious organization are subject to the Act except for areas exempted under §68.30.

(g) [(f)] Buildings or facilities with an estimated construction cost of less than $50,000 or not subject to the Act and compliance with TAS may be registered, reviewed, and/or inspected by a registered accessibility specialist or contract provider [upon request and payment of the applicable fee(s) in accordance with §68.54].

§68.30.Exemptions.

The following buildings, facilities, spaces, or elements are exempt from the provisions of the Act:

(1) Federal Property. Buildings or facilities owned, operated, or leased by the federal government;

[(2) Restricted Occupancy Spaces. Vertical access (elevators and platform lifts) is not required for the second floor of two-story control buildings located within a chemical manufacturing facility where the second floor is restricted to employees and does not contain common areas or employment opportunities not otherwise available in accessible locations within the same building;]

(2) [(3)] Places Used Primarily for Religious Rituals. An area within a building or facility of a religious organization used primarily for religious ritual as determined by the owner or occupant. To facilitate the plan review, the owner or occupant shall include a clear designation of such areas with the plans submitted for review. This exemption does not apply to [common use areas. Examples of common use areas include, but are not limited to,] the following: parking facilities, accessible routes, walkways, hallways, toilet facilities, entrances, public telephones, drinking fountains, and exits;

(3) [(4)] Van Accessible Parking at Garages Constructed Prior to April 1994. Parking garages where construction was started before April 1, 1994, and the existing vertical clearance of the garage is less than 98", are exempted from requirements to have van-accessible parking spaces located within the garage. If additional surface parking is provided, the required van accessible parking spaces shall be located on a surface lot in closest proximity to the accessible public entrance serving the facility; and

(4) [(5)] Residential Facilities. Those portions of public or privately funded apartments, condominiums, townhomes, and single-family dwellings used exclusively by residents and their guests.

§68.31.Variance Procedures.

(a) Requests to waive or modify an accessibility standard shall be submitted on the Variance Application form. A separate Variance Application form shall be submitted for each TAS standard [condition] within a single building or facility.

(b) Variance Applications [shall be submitted by the owner of the subject building or facility, and] shall be accompanied by the applicable fee, plans of all affected areas, and any supporting documentation such as photos, cost analyses, and code references.

(c) A denial of a Variance Application may be appealed to the Director of Compliance, or his designee, in writing [within thirty (30) calendar days from issuance,] upon payment of the applicable appeal fee. Supporting documentation such as plans of all affected areas, photos, cost analyses and code references not previously reviewed must [may] be submitted for consideration.

(d) A denial of an [a Variance] Appeal from the Director of Compliance may be appealed to the Executive Director of the Texas Department of Licensing and Regulation, or his designee, in writing [within thirty (30) calendar days of notification of the Director of Compliance's decision]. Supporting documentation such as plans of all affected areas, photos, cost analyses and code references not previously reviewed may be submitted for consideration.

(e) When a Variance or [Variance] Appeal determination has been made, the owner and the person making the submission shall be advised in writing of the determination.

(f) Variance and [Variance] Appeal determinations shall be based on the information and supporting documentation submitted with the application and shall be issued in accordance with §469.151 and §469.152 of the Act.

§68.50.Submission of Construction Documents.

(a) All plans and specifications for the construction of or alteration to a building or facility subject to §469.101 of the Act must be submitted to a registered accessibility specialist or contract provider for review if the estimated construction cost is at least $50,000. All plans may be submitted in electronic format.

(b) [(a)] An architect, registered interior designer, landscape architect, or engineer with overall responsibility for the design of a building or facility subject to §469.101 of the Act, shall mail, ship, provide electronically, or hand-deliver the construction documents along with a Proof of Submission form to [the department,] a registered accessibility specialist[,] or a contract provider not later than the twentieth day after the plans and specifications are issued. In computing time under this subsection, a Saturday, Sunday or legal holiday is not included.

(c) [(b)] In instances when there is not a design professional with overall responsibility, the owner of a building or facility subject to §469.101 of the Act, shall mail, ship, provide electronically, or hand-deliver construction documents to [the department,] a registered accessibility specialist[,] or a contract provider prior to filing an application for building permit or commencement of construction.

(d) [(c)] An Architectural Barriers Project Registration form or Architectural Barriers Project Registration Confirmation Page must be completed for each subject building or facility and submitted along with the project filing fee [applicable fees] when the design professional or owner registers the construction project [submits the construction documents].

§68.51.Review of Construction Documents.

(a) After review, the owner and the person making the submission will be advised in writing of the plan review findings.

(b) Construction documents received by the department, a registered accessibility specialist, or a contract provider shall become the property of the department.

(c) Design revisions may be made by submitting to [the department,] a registered accessibility specialist[,] or a contract provider revised construction documents, change orders, addenda, and letters.

(1) Resubmittals received prior to the recorded estimated completion of construction will be reviewed. The owner and the person making the resubmittal will be advised of the findings.

(2) Resubmittals received after completion of construction, based on the recorded estimated completion of construction, may not be reviewed but will become a matter of record.

§68.52.Inspections.

(a) The owner of a building or facility subject to §469.101 of the Act shall obtain an inspection from [the department,] a registered accessibility specialist[,] or a contract provider not later than the first anniversary of the completion of construction. [Request for inspection shall be made by completing the Request for Inspection form and submitting it to the department, a registered accessibility specialist, or contract provider not later than 30 calendar days after the completion of construction. If the Request for Inspection form is submitted to the Department, the form must be accompanied by the applicable inspection fee in §68.80(a).]

[(b) The department, a registered accessibility specialist, or a contract provider shall receive the Request for Inspection form prior to proceeding with the inspection.]

(b) [(c)] The owner shall be advised in writing of the results of each inspection.

§68.53.Corrective Modifications Following Inspection.

(a) When corrective modifications are required to achieve compliance, [the department,] a registered accessibility specialist[,] or a contract provider shall:

(1) provide the owner a list of deficiencies and a deadline for completing modifications; and

(2) grant an extension, consistent with established procedures, if satisfactory evidence is presented showing that the time period specified is inadequate to perform the necessary corrections.

(b) When corrective modifications are required to achieve compliance, the owner shall provide written verification of the corrective modifications to the [department, a] registered accessibility specialist[,] or a contract provider.

§68.54.Review and Inspection of Buildings and Facilities with an Estimated Construction Cost of Less than $50,000 or Not Subject to the Act.

(a) When construction documents for projects with an estimated construction cost of less than $50,000 are mailed, shipped, provided electronically, or hand-delivered with an Architectural Barriers Special Registration Form [to the department along with the applicable fees in §68.80(b),] after review, the owner and the person making the submission will be advised in writing, which may be provided electronically, of the findings. [A request for inspection is not considered complete until the department receives the applicable inspection fee in §68.80(b).] The owner shall be advised in writing of the results of each inspection.

(b) When construction documents for projects not subject to §469.003 of the Act are mailed, shipped, provided electronically, or hand-delivered with an Architectural Barriers Special Registration Form [to the department along with the applicable fees in §68.80(c), ] after review, the owner and the person making the submission will be advised in writing, which may be provided electronically, of the findings. [A request for inspection is not considered complete until the department receives the applicable inspection fee in §68.80(c). ] The owner shall be advised in writing of the results of each inspection.

§68.60.Notice of Substantial Compliance.

The department [Department] shall provide a Notice of Substantial Compliance to the owner, at the owner's written request [through submission of a Notice of Substantial Compliance Request Form,] after a newly constructed building or facility has had a satisfactory inspection or verification of corrective modifications has been submitted.

§68.70.Registered Accessibility Specialists--Qualifications for Certification.

(a) An applicant seeking departmental certification as a registered accessibility specialist in order to perform plan review or inspection services shall meet the following minimum qualifications:

(1) Any one of the following:

(A) a degree in architecture, engineering, interior design, landscape architecture, or equivalent, and a minimum of one year experience related to building inspection, building planning, accessibility design or review, accessibility inspection, or equivalent; or

(B) eight years experience related to building inspection, building planning, accessibility design or review, accessibility inspection, or equivalent; or

(C) four years experience related to building inspection, building planning, accessibility design or review, accessibility inspection, or equivalent, and certification as an accessibility inspector/plans examiner granted by a model building code organization; and

[(2) satisfactory completion of the Texas Accessibility Academy offered by the department or an approved provider; and]

(2) [(3)] pass an examination approved by the department.

(b) An applicant shall submit a complete application for certification on the Registered Accessibility Specialist Application form, accompanied by all applicable fees. An applicant must complete all requirements, including satisfactory completion of an examination, no later than one year after the date the application is filed. If all requirements are not met within one year, a new application shall be submitted.

(c) Each applicant who satisfies all requirements will be provided a wallet card and a wall certificate. The wallet card is the actual certificate of registration.

§68.74.Continuing Education.

(a) - (e) (No change.)

(f) To be approved under Chapter 59 of this title, a provider's course must be dedicated to instruction in one or more of the following topics:

(1) Texas Government Code, Chapter 469 - Elimination of Architectural Barriers;

(2) 16 Texas Administrative Code, Chapter 68 - Administrative Rules;

(3) 2012 Texas Accessibility Standards;

(4) Technical Memoranda [as published by the Department];

(5) Registered Accessibility Specialist Procedures [as published by the Department];

(6) - (9) (No change.)

(g) - (h) (No change.)

§68.75.Responsibilities of the Registered Accessibility Specialist.

(a) Registered accessibility specialists may set and collect fees for services, but are responsible for submitting to the department any fees the registered accessibility specialist may receive on behalf of the department [Department].

(b) Registered accessibility specialists may share services by engaging the services of another registered accessibility specialist; however each registered accessibility specialist will be held accountable for their own work product and must adhere to all laws, rules, and procedures.

(c) [(b)] Records maintained by registered accessibility specialists, as required by department rules or procedures, are subject to the provisions of the Texas Government Code, Chapter 552, Texas Public Information Act.

(d) [(c)] Registered accessibility specialists shall comply with all procedures established by the department.

(e) [(d)] Registered accessibility specialists shall provide written notification to [notify ] the department of changes to contact information [by submitting a Registered Accessibility Specialist Contact Update form] within thirty (30) calendar days of a change occurring.

§68.76.Standards of Conduct for the Registered Accessibility Specialist.

(a) Competency. The registered accessibility specialist shall be knowledgeable of and adhere to the Act, the rules, the TAS, Technical Memoranda and Bulletins published by the department, and all procedures established by the department. It is the obligation of the registered accessibility specialist to exercise reasonable judgment and skill in the performance of plan reviews, inspections, and related activities.

(b) Integrity. A registered accessibility specialist shall be honest and trustworthy in the performance of plan review, inspection, and related activities, and shall avoid misrepresentation and deceit in any fashion, whether by acts of commission or omission. Acts or practices that constitute threats, coercion, or extortion are prohibited.

(c) Interest. The primary interest of the registered accessibility specialist is to ensure compliance with the Act, the rules, and the TAS. The registered accessibility specialist's position, in this respect, should be clear to all parties concerned while conducting plan reviews, inspections, and related activities.

(d) Conflict of Interest. A registered accessibility specialist is obliged to avoid conflicts of interest and the appearance of a conflict of interest. A conflict of interest exists when a registered accessibility specialist performs or agrees to perform a plan review, inspection, or related activity for a project in which he/she has a financial interest, whether direct or indirect. A conflict of interest also exists when a registered accessibility specialist's professional judgment and independence are affected by his/her own family, business, property, or other personal interests or relationships.

(e) Specific Rules of Conduct. A registered accessibility specialist shall not:

(1) participate, whether individually or in concert with others, in any plan, scheme, or arrangement attempting or having as its purpose the evasion of any provision of the Act, the rules, or the TAS;

(2) knowingly furnish inaccurate, deceitful, or misleading information to the department, a building owner, or other person involved in a plan review, inspection, or related activity;

(3) state or imply that the department will approve a variance;

[(4) submit a variance application for a project in which the RAS has provided review or inspection services;]

(4) [(5)] engage in any activity that constitutes dishonesty, misrepresentation, or fraud while performing a plan review, inspection, or related activity;

(5) [(6)] perform a plan review, inspection, or related activity in a negligent or incompetent manner;

(6) [(7)] perform a plan review, inspection, or related activity on a building or facility in which the registered accessibility specialist is an owner, either in whole or in part, or an employee of a full or partial owner;

(7) [(8)] perform a plan review, inspection, or a related activity on a building or facility that is or will be leased or occupied by an agency of the State of Texas, when the registered accessibility specialist is an employee of the state agency that will occupy the facility;

(8) [(9)] perform a plan review, inspection, or related activity on a building or facility wherein the registered accessibility specialist participated in creating the overall design of the current project;

(9) [(10)] use the Texas State seal without obtaining the appropriate license in accordance with Texas Business and Commerce Code, Chapter 17, §17.08(c); or

(10) [(11)] represent himself or herself as an employee of the department or as a person hired by the department.

§68.80.Fees.

(a) Fees collected by the department will be assessed according to the following fee schedule.

(1) Project filing Fee--$175;

(2) Late Project Filing Fee--$300;

(3) State Lease Inspection (no construction)--$225 per lease;

(4) Special Review or Inspection Fee--$215 per hour, one hour minimum;

(5) Variance Application Fee--$175 each;

(6) Variance Appeal Fee--$200 each;

(7) Texas Accessibility Academy Fee--$150.

(b) Registered Accessibility Specialists and Contract Providers:

(1) Application for Certificate of Registration--$300;

(2) Registration Renewal--$250;

(3) Wall Certificate Duplicate or Replacement--$25;

(4) Wallet Card Duplicate or Replacement--$25.

(c) When a project is registered with the department after completion of construction, the late project filing fee is in lieu of the project filing fee.

(d) Late renewal fees for registrations issued under this chapter are provided under §60.83 of this title (relating to Late Renewal Fees).

(e) All fees are nonrefundable and must be paid prior to service being performed.

§68.90.Administrative Sanctions or Penalties.

(a) If a person violates any provision of the Act, the rules, TAS, procedures, or an order of the executive director [Executive Director] or commission [Commission], proceedings may be instituted to impose administrative sanctions, administrative penalties, or both administrative penalties and sanctions in accordance with the provisions of the Act; Texas Occupations Code, Chapter 51; and Title 16, Texas Administrative Code, Chapter 60 (relating to the Texas Commission of Licensing and Regulation).

(b) It is a violation of the Act for a person to perform a plan review or inspection function of the department, unless that person is a department employee, a registered accessibility specialist, or a contract provider. A person who is not a department employee, registered accessibility specialist or contract provider and performs a plan review or inspection function of the department is subject to administrative penalties in accordance with the Act or Texas Occupations Code, Chapter 51 and Title 16, Texas Administrative Code, Chapter 60.

(c) Cheating on an examination is grounds for denial, suspension, or revocation of a license, imposition of an administrative penalty, or both.

§68.93.Complaints, Investigations, and Audits.

(a) Complaints. A complaint may be filed against an owner if there is reason to believe that a building or facility is not in compliance with the Act, the rules, procedures, or the TAS. A complaint may be filed against a registered accessibility specialist if there is reason to believe that the registered accessibility specialist has violated the Act, the rules, or the TAS.

(b) Investigations and Audits. Owners of buildings and facilities subject to compliance with the TAS are subject to investigation by the department. Registered accessibility specialists and contract providers are subject to investigation and audit by the department.

(c) Inspection and Copying of Records. Records pertaining to a project for which plan review, inspection, or related activities have been or will be performed, shall be made available by the registered accessibility specialist for inspection and copying by the department. The registered accessibility specialist shall make said records available within fourteen (14) calendar days of receiving a written request from the department.

§68.102.Public Right-of-Ways Projects.

(a) For public right-of-way projects, in addition to accepting compliance with applicable TAS requirements, the department will also accept compliance with the Proposed Accessibility Guidelines for Pedestrian Facilities in the Public Right-of-Way, published by the Architectural and Transportation Compliance Board (Access Board) on July 26, 2011, 36 CFR Part 1190 or its final adopted guidelines.

(b) [(a)] For purposes of registration [§68.80], the estimated cost of construction for the project shall be based on the pedestrian elements only. Construction documents submitted for review are only required to include pedestrian elements being constructed, renovated, modified, or altered as part of the project scope.

(c) [(b)] Application of TAS shall be limited to those pedestrian elements being constructed, renovated, modified, or altered as part of the project scope. The pedestrian elements shall comply with applicable sections of TAS except as modified by this section.

(1) Pedestrian Access Routes [Sidewalks]--At pedestrian access routes [sidewalks] constructed within the public right-of-way, handrails are not required; however, if provided they must comply with TAS 405.8. Where the adjacent roadway has running slopes of 5% or greater, the pedestrian access route shall not exceed the grade established for the adjacent roadway. EXCEPTION: The running slope of a pedestrian access route is permitted to be steeper than the grade of the adjacent roadway provided that the pedestrian access route complies with TAS 405.

(2) Curb Ramps--At curb ramps constructed within the public right-of-way, handrails are not required; however, if provided they must comply with TAS 405.8. [For purposes of this section, non-signalized driveways are not considered to be hazardous vehicular areas.]

(A) At perpendicular curb ramps constructed within the public right of way, detectable warnings complying with TAS 705 at a minimum of 24" in depth (in the direction of pedestrian travel) and extending the full width of the curb ramp shall be provided where the pedestrian access route enters a crosswalk or other hazardous vehicular area.

(B) At parallel curb ramps constructed within the public right-of-way, detectable warnings complying with TAS 705 at a minimum of 24" in depth (in the direction of pedestrian travel) and extending the full width of the landing shall be provided where the pedestrian access route enters a crosswalk or other hazardous vehicular area.

[(C) At diagonal curb ramps constructed within the public right-of-way, detectable warnings complying with TAS 705 at a minimum of 24" in depth (in the direction of pedestrian travel) and extending the full width of the curb ramp or landing, shall be provided where the pedestrian access route enters a crosswalk or other hazardous vehicular area. Additionally, the department will allow the detectable warning to be curved with the radius of the corner. The detectable warning shall be located so that the edge nearest the curb line is 6" minimum and 10" maximum from the curb line.]

§68.103.Detention and Correctional Facilities.

For public (State, county or local) detention and correctional facilities to comply with both the ADA and the Architectural Barriers Act (ABA), the number of cells with mobility features and communication features must be:

(1) At least 3 percent, but no fewer than one, of the total number of cells in a facility shall provide mobility features complying with 807.2 of TAS.

(2) At least 3 percent, but no fewer than one, of the total number of general holding cells and general housing cells equipped with audible emergency alarm systems and permanently installed telephones within the cell shall provide communication features complying 807.3 of TAS.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 5, 2016.

TRD-201606133

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: January 15, 2017

For further information, please call: (512) 463-8179


16 TAC §68.55, §68.80

The repeals are proposed under Texas Occupations Code, Chapter 51 and Texas Government Code, Chapter 469, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Texas Government Code, Chapter 469. No other statutes, articles, or codes are affected by the proposal.

§68.55.Preliminary Plan Reviews.

§68.80.Fees.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 5, 2016.

TRD-201606134

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: January 15, 2017

For further information, please call: (512) 463-8179


CHAPTER 75. AIR CONDITIONING AND REFRIGERATION

16 TAC §§75.10, 75.25, 75.30, 75.70, 75.110

The Texas Department of Licensing and Regulation (Department) proposes amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 75 §§75.10, 75.25, 75.30, 75.70 and 75.110, regarding the Air Conditioning and Refrigeration program.

The proposed amendments are necessary to: (1) clarify perceived industry confusion surrounding what constitutes a "portable" or "self-contained" heating or air conditioning product; (2) require licensees to verify the practical experience of applicants; and (3) remove outdated language.

The proposed amendments to §75.10 add definitions for "portable" and "self-contained." Editorial changes were also made to renumber the section accordingly.

The proposed amendments to §75.25 remove outdated language and make editorial corrections.

The proposed amendments to §75.30 set forth licensure exemptions for persons engaging in air conditioning and refrigeration contracting regarding certain portable or self-contained air conditioning and heating systems, environmental air conditioning equipment intended for temporary use, and residential refrigerators, freezers, or ice machines.

The proposed amendments to §75.70 impose a duty on an electrical licensee to verify the practical work experience of an applicant who has worked under that person's supervision.

The proposed amendments to §75.110 remove outdated language and make editorial corrections.

Brian E. Francis, Executive Director, has determined that for the first five-year period the proposed amendments are in effect there will be no direct cost to state or local government as a result of enforcing or administering the proposed rules. There is no estimated gain or loss in revenue to the state as a result of enforcing or administering the proposed rule.

Mr. Francis also has determined that for each year of the first five-year period the proposed amendments are in effect, the public will benefit from greater clarity regarding when a license is required to engage in air conditioning and refrigeration contracting, and from more timely verification of applicant experience.

There will be no anticipated economic effect on small and micro-businesses that are required to comply with these rules as proposed.

Since the agency has determined that the proposed amendments will have no adverse economic effect on small or micro-businesses, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, pursuant to Texas Government Code §2006.002, is not required.

Comments on the proposal may be submitted by mail to Pauline Easley, Legal Assistant, General Counsel's Office, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711; or by facsimile to (512) 475-3032, or electronically to erule.comments@tdlr.texas.gov. The deadline for comments is 30 days after publication in the Texas Register.

The amendments are proposed under Texas Occupations Code, Chapters 51 and 1302, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapters 51 and 1302. No other statutes, articles, or codes are affected by the proposal.

§75.10.Definitions.

The following words and terms have the following meanings as used in this chapter:

(1) - (20) (No change.)

(21) Portable--Able to be easily transported and readily used as an entire system, without need for dismantling or assembly in whole or in part, or addition of parts, components, or accessories.

(22) [(21)] Primary process medium--A refrigerant or other primary process fluid that is classified in the current ANSI/ASHRAE Standard 34 as Safety Group A1, A2, B1, or B2. Safety Groups A3 and B3 refrigerants are specifically excluded.

(23) [(22)] Proper installation, and service--Installing, servicing, repairing, and maintaining air conditioning and refrigeration equipment in accordance with:

(A) applicable municipal ordinances and codes adopted by a municipality where the installation occurs;

(B) the applicable edition of the Uniform Mechanical Code as adopted under §75.110; or the applicable edition of the International Mechanical Code as adopted under §75.110 and International Fuel Gas Code, in areas where no code has been adopted; or the International Residential Code, as applicable;

(C) the manufacturer's specifications and instructions; and

(D) all requirements for safety and the proper performance of the function for which the equipment or product was designed.

(24) [(23)] Registrant--A person who is registered with the department as a technician under the Act and this chapter.

(25) [(24)] Repair work--Diagnosing and repairing problems with air conditioning, commercial refrigeration, or process cooling or heating equipment, and remedying or attempting to remedy the problem. Repair work does not mean simultaneous replacement of the condensing unit, furnace, and evaporator coil.

(26) Self-contained--Constructed so that all required parts, components, and accessories of the air conditioning or heating system are included within the same enclosure.

(27) [(25)] System balancing--A process of adjusting, regulating or proportioning air distribution equipment or any activity beyond system testing.

(28) [(26)] System testing--Assessing or measuring the performance of the air distribution equipment or air conditioning and refrigeration duct system through equipment that can be attached externally to the system. Testing does not include opening, adjusting or balancing equipment or ducts or any activity beyond assessing the system through the use of external equipment. Testing does not include testing fire and smoke dampers.[,]

(29) [(27)] Total replacement of a system--Simultaneous replacement of the condensing unit, the evaporator coil, the furnace, if applicable, and the air handling unit, or replacement of a package system.

§75.25.Continuing Education.

(a) Terms used in this section have the meanings assigned by Chapter 59 of this title, unless the context indicates otherwise.

[(b) To renew an air conditioning and refrigeration contractor license under Texas Occupations Code, Chapter 1302, Subchapter F, that expires prior to June 1, 2014, a licensee must complete eight hours of continuing education in courses approved by the department, including two hours of instruction in Texas state law and rules that regulate the conduct of licensees.]

(b) [(c)] To renew an air conditioning and refrigeration contractor license under Texas Occupations Code, Chapter 1302, Subchapter F, [that expires on or after June 1, 2014,] a licensee must complete eight hours of continuing education in courses approved by the department, including one hour of instruction in Texas state law and rules that regulate the conduct of licensees.

(c) [(d)] The continuing education hours must have been completed within the term of the current license, in the case of a timely renewal. For a late renewal, the continuing education hours must have been completed within the one year period immediately prior to the date of renewal.

(d) [(e)] A licensee may not receive continuing education credit for attending the same course more than once.

(e) [(f)] A licensee must retain a copy of the certificate of completion for a course for one year after the date of completion. In conducting any inspection or investigation of the licensee, the department may examine the licensee's records to determine compliance with this subsection.

(f) [(g)] To be approved under Chapter 59 of this title, a provider's course must be dedicated to instruction in one or more of the following topics:

(1) Texas Occupations Code, Chapter 1302, Air Conditioning and Refrigeration Contractors;

(2) Title 16, Texas Administrative Code, Chapter 75, Air Conditioning and Refrigeration Administrative Rules;

(3) the International Mechanical Code, the Uniform Mechanical Code, or other applicable codes;

(4) ethics;

(5) business practices; or

(6) technical requirements.

§75.30.Exemptions.

(a) The Act and this chapter do not apply to those persons exempt under Occupations Code, Chapter 1302, with the following clarifications:

(1) - (4) (No change.)

(5) persons who engage in air conditioning and refrigeration contracting regarding:

(A) a portable or self-contained ductless air conditioning product that has a cooling capacity of three tons or less;

(B) a portable or self-contained heating product that does not require the forced movement or air outside the heating unit;

(C) environmental air conditioning equipment that is intended for temporary use and is not fixed in place; or

(D) a residential refrigerator, freezer, or ice machine.

(b) Unlicensed general contractors may bid or contract for a job that includes air conditioning or refrigeration if the job does not consist solely of work requiring a license under the Act.

§75.70.Responsibilities of the Contractor/Licensee.

(a) The licensee must:

(1) - (11) (No change.)

(12) Upon request from the applicant or the department, verify information within the licensee's knowledge regarding the practical experience of an applicant claiming to have worked under the supervision of the licensee, on a form designated by the department. The licensee must provide information requested by the department within fifteen (15) calendar days of the request. The verified information must include, but is not limited to:

(A) Dates during which the licensee supervised the applicant;

(B) A brief description of the work performed by the applicant; and

(C) The name of the business under which the applicant's work was performed.

(b) - (j) (No change.)

§75.110.Applicable Codes.

[(a) The commission adopts the following as the applicable codes as referenced in the Act and this chapter:]

[(1) 2009 edition of the Uniform Mechanical Code; and]

[(2) 2009 editions of the International Mechanical Code, the International Residential Code, and other applicable codes.]

[(b) The 2009 codes will be in effect through December 31, 2014. All air conditioning and refrigeration work permitted or started prior to January 1, 2015, may be completed in accordance with the 2009 code editions.]

(a) [(c)] The commission adopts the following as the applicable codes as referenced in the Act and this chapter:

(1) 2012 edition of the Uniform Mechanical Code; and

(2) 2012 editions of the International Mechanical Code, the International Residential Code, and other applicable codes.

(b) [(d)] The 2012 codes are [will be] effective January 1, 2015.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on December 5, 2016.

TRD-201606132

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: January 15, 2017

For further information, please call: (512) 463-8179