TITLE 16. ECONOMIC REGULATION

PART 1. RAILROAD COMMISSION OF TEXAS

CHAPTER 7. GAS SERVICES DIVISION

The Railroad Commission of Texas (Commission) proposes amendments in Subchapter B to §§7.110, 7.115, 7.201, 7.205, 7.210, 7.220, 7.230, 7.235, 7.240, and 7.245, relating to Communications with Regulatory Authority; Definitions; Filing of Documents; Contents of Statements of Intent and Petitions for Review of Municipal Action; Increasing Residential and Commercial Rates--Statement of Intent; Environs Rates; Contents of Notice; Publication and Service of Notice; Statement of Intent to Participate; and Effective Date of Orders; in Subchapter C, §§7.301, 7.310, 7.315, and 7.351, relating to Annual Report; System of Accounts; Filing of Tariffs; and Gas Utility Pipeline Tax; in Subchapter D, §§7.455, 7.460, 7.465, 7.470, and 7.475, relating to Curtailment Standards; Suspension of Gas Utility Service Disconnection During an Extreme Weather Emergency; Abandonment; Natural Gas Bill Payment by the State or a State Agency; and Municipality Contact Information for Notice of Disconnection for Non-Payment for Non-submetered Master Metered Multifamily Properties; in Subchapter E, §7.5213, relating to Allowance for Funds Used During Construction; in Subchapter F, §§7.6001, 7.6002, and 7.6007, relating to General Provisions; Procedure for Filing and Service of an Appeal, Obligation of City to Respond, and Intervention; and Procedure for Determining and Sharing of the Commission's Costs; in Subchapter G, §7.7003 and §7.7005, relating to Administrative Penalties and Other Remedies for Discrimination; and Authority to Set Rates; and in Subchapter H, §7.7101, relating to Interim Rate Adjustments.

The Commission also proposes the repeal of Subchapter I, relating to Natural Gas Pipeline Competition, including §7.7201, Natural Gas Pipeline Competition Study Advisory Committee, and proposes to change the title of Chapter 7 to "Gas Services."

Generally, the Commission proposes the repeal and amendments to correct outdated references, correct minor typographical errors, and reflect statutory changes and Commission rule changes outside of Chapter 7. For example, the Commission proposes to remove references to the National Association of Regulatory Utility Commissioners (NARUC) Uniform System of Accounts (USOA), as the Commission now solely uses the Federal Energy Regulatory Commission (FERC) USOA. Relatedly, the Commission proposes amendments to §7.315, relating to Gas Utility Pipeline Tax, to reflect changes to industry accounting, specifically, changes in FERC USOA Account Numbers 483, 489, 495, 808, 809, 813, and 824. However, the amendments to §7.315 would not add any new taxes or disallow any current deductions.

Mark Evarts, Director, Gas Services Department, has determined that for each year of the first five years the proposed repeal and amendments will be in effect, there will be no fiscal effect on state or local government or persons required to comply as a result of the proposed repeal and amendments.

Mr. Evarts has determined that for each year of the first five years that the repeal and amendments will be in effect the expected public benefit will be consistency with applicable statutes, and industry and Commission practice.

The Commission has determined that the proposed repeal and amendments will not have an adverse economic effect on rural communities, small businesses or micro-businesses. Therefore, the Commission has not prepared an economic impact statement or regulatory flexibility analysis pursuant to Government Code §2006.002.

During the first five years the proposed rules would be in effect, no government program would be created or eliminated. The proposed amendments would not: create or eliminate any employee positions; require an increase or decrease in future legislative appropriations; increase or decrease fees paid to the Commission; create a new regulation; increase or decrease the number of individuals subject to the rule's applicability; or impact the state's economy. The proposed amendments also would not expand or limit existing Commission regulations, but would repeal Subchapter I and §7.7201, relating to Natural Gas Pipeline Competition Study Advisory Committee. However, the rule automatically abolished the committee as of December 31, 2006.

The Commission has also determined that the proposed repeal and amendments will not affect a local economy. Therefore, the Commission has not prepared a local employment impact statement pursuant to Texas Government Code, §2001.022.

The Commission has determined that the repeal and amendments do not meet the statutory definition of a major environmental rule as set forth in Texas Government Code, §2001.0225(a); therefore, a regulatory analysis conducted pursuant to that section is not required.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.texas.gov/general-counsel/rules/comment-form-for-proposed-rulemakings; or by electronic mail to rulescoordinator@rrc.texas.gov. The Commission will accept comments until 12:00 noon on Monday, March 12, 2018. The Commission finds that this comment period is reasonable because the proposal and an online comment form will be available on the Commission's web site more than two weeks prior to Texas Register publication of the proposal, giving interested persons additional time to review, analyze, draft, and submit comments. The Commission encourages all interested persons to submit comments no later than the deadline. The Commission cannot guarantee that comments submitted after the deadline will be considered. For further information, call Mr. Evarts at (512) 463-9663. The status of Commission rulemakings in progress is available at www.rrc.texas.gov/general-counsel/rules/proposed-rules.

SUBCHAPTER B. SPECIAL PROCEDURAL RULES

16 TAC §§7.110, 7.115, 7.201, 7.205, 7.210, 7.220, 7.230, 7.235, 7.240, 7.245

The Commission proposes the amendments under Texas Utilities Code Titles 3 and 4, which authorize the Commission to regulate gas utilities, to protect the public interest inherent in the rates and services of gas utilities, and to assure rates, operations, and services that are just and reasonable to the consumers and to the utilities. In addition, Texas Natural Resources Code §117.102 and Texas Utilities Code §121.2025 give the Commission exclusive jurisdiction to determine whether a city's annual charge is authorized; Texas Natural Resources Code §81.052 authorizes the Commission to adopt all necessary rules for governing and regulating persons under the jurisdiction of the Commission; Texas Utilities Code §102.001 gives the Railroad Commission exclusive original jurisdiction over the rates and services of a gas utility distributing natural gas or synthetic natural gas in areas outside a municipality; Texas Utilities Code, §102.151 requires gas utilities to file schedules showing all rates for a gas utility service, product, or commodity offered by the gas utility and each rule or regulation that relates to or affects a rate of the gas utility or a gas utility service, product, or commodity furnished by the gas utility; Texas Utilities Code, §104.001 vests in the Railroad Commission all the authority and power of this state to ensure compliance with the obligations of gas utilities in Texas Utilities Code, Title 3, Subtitle A, and authorizes the Commission to adopt rules for determining the classification of customers and services; and Texas Utilities Code §104.301, allows a utility to file with the Commission a tariff or rate schedule that provides for an interim adjustment in the utility's monthly customer charge or initial block rate to recover the cost of changes in the investment in capital for gas utility service.

Statutory authority: Texas Natural Resources Code §81.052 and §117.102; Texas Utilities Code, Titles 3 and 4, including §§102.001, 102.151, 104.001, 104.301, and 121.2025.

Cross reference to statutes: Texas Natural Resources Code Chapters 81 and 117, and Texas Utilities Code Titles 3 and 4.

Issued in Austin, Texas, on January 23, 2018.

§7.110.Communications [Communication by Gas Utilities] with Regulatory Authority [Members or Employees of the Railroad Commission].

The Commission shall maintain accurate communication records in accordance with its records retention policy.

[(a) The Commission shall maintain accurate logs of all personal contacts and telephone communications between gas utilities or their representatives and members of the Commission or employees of the Gas Services Division or Office of General Counsel. This log shall be available to the public for inspection during regular office hours. This log shall contain:]

[(1) the date of the communication;]

[(2) whether the communication was by telephone or personal contact;]

[(3) the name and address of the person initiating the contact and the gas utility represented, if applicable;]

[(4) the subject matter of the communication; and]

[(5) a statement of any action requested by a gas utility or its representative.]

[(b) The Commission shall maintain copies of all written correspondence between members of the Commission or employees of the Gas Services Division or Office of General Counsel and gas utilities or their representatives. These copies shall be available to the public for inspection during regular office hours.]

[(c) The form for recording personal contacts and telephone communications is adopted for the purpose of this section.]

[Figure: 16 TAC §7.110(c)]

§7.115.Definitions.

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

(1) Affiliate--Any affiliate as defined in Texas Utilities Code, §101.003.

(2) Allowance for funds used during construction (AFUDC) [(AFC)]--The net cost of borrowed funds for the period of construction used for construction purposes and a reasonable rate on other funds when so used until included in the rate base.

(3) Apartment house--A building or buildings containing more than five dwelling units, all of which are rented or available to be rented primarily for nontransient use, with rental paid at intervals of one week or longer. The term "apartment house" shall include residential condominiums, whether rented or owner occupied.

(4) Apartment unit--A room or rooms in an apartment house suitable for occupancy as a residence containing kitchen and bathroom facilities.

(5) Appellate jurisdiction--Exclusive jurisdiction of the Commission in those cases in which a utility perfects an appeal pursuant to Texas Utilities Code, §103.054, from the decision of a municipality.

(6) Bulletin--A Gas Services [Division] publication published twice monthly containing information [about the Division] such as notices of hearings, final orders and decisions, rules, and other information of general interest to the public. Gas Services [The Division] shall publish the bulletin on the Commission's web site and shall make a paper copy available for public inspection and copying.

(7) Commission--The Railroad Commission of Texas, including its staff or delegate.

(8) Common purchaser of gas--Every common purchaser of gas as defined in Texas Natural Resources Code, §111.081(a)(2).

(9) Construction work in progress (CWIP)--Funds expended by a gas utility which are irrevocably committed to construction projects not yet completed or placed into service.

(10) Cost of service adjustment clause--Any rate provision other than a purchased gas adjustment clause provided for in §7.5519 of this title (relating to Gas Cost Recovery), which operates to increase or decrease rates without prior consent or authority of the appropriate regulatory authority.

(11) Director--The Director of the Oversight and Safety [Gas Services] Division or the Director's delegate.

(12) Discrimination--Any material difference in rates, service, rules and regulations, or conditions of service for transportation services which unreasonably disadvantages or prejudices similarly-situated shippers.

(13) Domestic use--The use of natural gas for cooking, clothes drying, space heating, or water heating.

(14) Environs rates--Residential and commercial rates for a gas utility applicable to natural gas sales and service in unincorporated areas adjacent to or near incorporated cities and towns, aside from special rates as defined in this section.

(15) Gas-gathering utility--For the purposes of determining which annual report to file, a gas utility or public utility which employs a pipeline or pipelines and ancillary facilities thereto in the first taking or the first retaining of possession of gas produced by others which extends from any point where such gas is produced, purchased, or received to the trunk line or main line of transportation where such gas is sold or delivered, without regard to the size, the length, or the amount of such gas carried through such pipeline or pipelines to the trunk line or main line of transportation, thus having as its primary function the collecting or collecting and processing of gas produced by others as a preliminary incident to the transportation after it has been severed from the earth by production.

(16) Gas pipeline--Any gas pipeline under the provisions of Texas Utilities Code, Chapters 121 and 122.

(17) Gas Services [Division or Division]--A department of the Oversight and Safety Division [The administrative subdivision] of the Commission responsible for the regulation of the natural gas utility industry in Texas.

(18) Gas utility (utility)--Any gas utility or utility as defined in Texas Utilities Code, Title 3.

(19) Interim rate adjustment--A tariff or rate schedule that provides for an interim adjustment in a gas utility's monthly customer charge or initial block usage rate, made pursuant to §7.7101 of this title (relating to Interim Rate Adjustments), to recover the cost of changes in the utility's invested capital and related expenses and revenues, for providing gas utility service. An interim rate adjustment can be either an initial tariff or rate schedule or an annual adjustment to an existing interim rate adjustment tariff or rate schedule.

(20) Local distribution company--An entity that operates a retail gas distribution system.

(21) Lost and unaccounted for gas--The difference between the amount of gas metered into a distribution or transmission system and the amount metered out.

(22) Lost gas--The amount of gas which physically escapes into the ground or atmosphere from a distribution or transmission system, except for that gas which escapes as a part of an intentional testing procedure or purging operation performed during maintenance or construction activities.

(23) Master meter--A single large volume gas measurement device by which gas is metered and sold to a single purchaser who distributes the gas to one or more additional persons downstream from that meter.

(24) Mobile home--A structure, transportable in one or more sections, which is eight body feet or more in width and is 32 body feet or more in length, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air conditioning, and electrical systems contained therein.

(25) Mobile home or apartment resident--An occupant of a mobile home in a mobile home park or an occupant in an apartment house or apartment unit who is responsible for rent payments [the payment rentals] and who receives gas through a submeter.

(26) Municipality--A city, incorporated village, or town, existing, created, or organized under the general, home-rule, or special laws of the state.

(27) Person--Has the same meaning as the definition in Texas Utilities Code, §101.003(10).

(28) Preference--Any material difference in rates, service, rules and regulations, conditions of service, or the dissemination or providing of information concerning transportation services which unreasonably advantages or favors similarly-situated shippers.

(29) Rate case--A statement of intent to increase rates filed at the Commission pursuant to Texas Utilities Code, §104.102.

(30) Qualifying offer--An offer to convert all of the residential or commercial customers' gas burning facilities to the lowest cost available alternative energy source, including, at a minimum, a single tank of normal size for the customer's premises filled once with any liquid alternative energy source. At the customer's election, the qualifying offer shall be the cash equivalent of the cost of conversion to the lowest cost available alternative energy source.

(31) Shipper--Any person or corporation for which a transporter is currently providing, has provided, or has pending a written request to provide transportation services.

(32) Similarly-situated shipper--Any shipper that seeks or receives transportation services under the same or substantially the same, physical, regulatory, and economic conditions of service as any other shipper of a transporter. In determining whether conditions of service are the same or substantially the same, the Commission shall evaluate the significance of relevant conditions, including, but not limited to, the following:

(A) service requirements;

(B) location of facilities;

(C) receipt and delivery points;

(D) length of haul;

(E) quality of service (firm, interruptible, etc.);

(F) quantity;

(G) swing requirements;

(H) credit worthiness;

(I) gas quality;

(J) pressure (including inlet or line pressure);

(K) duration of service;

(L) connect requirements; and

(M) conditions and circumstances existing at the time of agreement or negotiation.

(33) Special rates--Residential and commercial rates for a gas utility applicable to natural gas sales and service established pursuant to Commission orders applicable only to service by a given utility within a specified area and not specifically keyed to the rates charged in any incorporated area.

(34) Submeter--A single gas measurement device by which gas is metered to a mobile home unit, apartment house, or apartment unit downstream of a master meter.

(35) Transportation service--The receipt of a shipper's gas at a point or points on the facilities of a transporter, and redelivery of a shipper's gas by the transporter at another point or points on the facilities of the transporter, including exchange, backhaul, displacement, and other methods of transportation, provided, however, that the term "transportation service" shall not include processing services or the movement of gas to which the transporter has title.

(36) Transporter--Any common purchaser of gas, gas utility, or gas pipeline that provides gas gathering and/or transmission transportation service for a fee.

(37) Unaccounted for gas--Lost and unaccounted for gas less lost gas.

§7.201.Filing of Documents.

(a) A person intending to initiate a proceeding before the Commission shall file two copies of such pleadings with the Director.

(b) A person filing pleadings or documents other than those initiating a proceeding shall file two copies. In cases in which a legal examiner [or SOAH ALJ] has not been assigned, the pleadings are to be filed with [the] Gas Services [Division ]. In those cases in which a legal examiner [or SOAH ALJ] has been assigned, the pleadings are to be filed with the Docket Services Section in accordance with §1.22 of this title, relating to Filings with the Hearings Division. [Office of General Counsel. At the discretion of the hearings examiner, the person may file these pleadings or documents by facsimile transmission.] If a person files a copy of a signed original, the person or the person's authorized representative shall maintain the signed original for examination by the Commission, the examiner, the Director, or any party to the proceedings.

(c) The mailing address of [the] Gas Services [Division] and the Docket Services Section [Office of General Counsel] is: Railroad Commission of Texas, P.O. Box 12967, 1701 North Congress Avenue, Austin, Texas 78711-2967. The regular office hours of the Commission are 8:00 a.m. to 5:00 p.m., Monday through Friday. Offices are closed on Saturdays and Sundays and on certain state-observed holidays.

§7.205.Contents of Statements of Intent and Petitions for Review of Municipal Action.

(a) Contents. In addition to the information required in §1.32 [§1.25] of this title (relating to Form and Content of Pleadings), and any necessary additional information required by the Commission to evaluate the filing, all statements of intent to increase rates and petitions for review of action by municipality shall contain the following:

(1) the proposed revisions of rates and schedules;

(2) a statement specifying in detail each proposed change;

(3) the effect the proposed change is expected to have on the revenues of the applicant; and

(4) the classes and numbers of utility customers affected.

(b) Petitions for review. Any utility filing a petition for review appealing the decision of the governing body of a municipality to the Commission shall file its direct evidence to support its proposed rate increase, including those items required pursuant to §7.501 of this title (relating to Certain Matters to be Submitted in Rate Hearings), and prepared testimony of all of its witnesses and exhibits with the Director on the same date it files its petition for review.

(c) Compliance. The Commission may reject any filing which does not substantially comply with the requirements of this section at the time of filing or a reasonable time therefrom. The Commission shall not consider a statement of intent or petition for review of action by a municipality to be properly filed until all items listed in subsection (a) of this section have been filed with the Director.

§7.210.Increasing Residential and Commercial Rates--Statement of Intent.

(a) Contents. In addition to the information required in §7.205 of this title (relating to Contents of Statements of Intent and Petitions for Review of Municipal Action), the following information shall be included in each statement of intent to increase residential and commercial rates within the original jurisdiction of the Commission:

(1) a statement as to whether the proposed rates will or will not exceed 115% of the average of all rates for similar services of all municipalities served by the same utility within the same county;

(2) a statement as to whether the proposed change will or will not result in a "major change," as that term is defined in Texas Utilities Code, §104.101.

(b) Requirement of additional information for cost of service increases in adjacent municipalities. If the utility proposes a rate for residential and commercial rates within the original jurisdiction of the Commission that is the same rate as the rate in effect in the nearest incorporated area in Texas served by the same utility, and the rate change in the municipality is the result of a cost of service adjustment clause as defined in §7.115 [§7.115(9) ] of this title (relating to Definitions), the gas utility shall file with the Director, in addition to the information listed in subsection (a) of this section, the following information:

(1) all calculations used to derive the cost of service adjustment;

(2) the effect of the proposed rates on each affected customer class; and

(3) a copy of the cost of service adjustment clause in effect in the adjacent municipality.

§7.220.Environs Rates.

(a) Levels of environs rates.

(1) The environs rates may be the same rates as those in effect in the nearest incorporated area in Texas served by the same utility where gas is obtained from at least one common pipeline supplier or transmission system. The Commission, on application by a utility, on complaint by any affected person, or on its own motion may review the rate in or boundaries of a given environs area and may consent to or order an adjustment where appropriate.

(2) In addition to the definition of environs rates in §7.115 [§7.115(13)] of this title (relating to Definitions), environs rates shall include any quality of service rules adopted by the Commission in subchapter D of this chapter (relating to Customer Service and Protection). Such quality of service rules shall apply to environs areas and become part of environs rates regardless of whether the same quality of service rules are in effect in the related incorporated areas.

(b) Rate increases for environs rates. Rate increases in environs shall be made in accordance with the following procedures.

(1) The gas utility shall file a statement of intent and shall give notice as required under Texas Utilities Code, §104.103, [§104.102, and] §7.210 of this title (relating to Increasing Residential and Commercial Rates--Statement of Intent), and §7.230 of this title (relating to Contents of Notice). In addition, when environs rates are to be increased at the same time and to the same extent as the related incorporated area (city) rate and the proposed change does not constitute a "major change," the statement of intent to increase such environs rates shall include (in completed form) the following statement: "This is a Statement of Intent to increase environs rates for the unincorporated areas in the vicinity of __________________, and contains rates identical with and to become effective upon the same date as rates contained in a similar Statement of Intent filed on or about this date by this utility with said city. This Statement of Intent is intended to produce the same residential and commercial rates as finally approved for the City of __________________ and applies to the rates set out herein or any lower rates finally approved for the City of __________________. Any rate changes pursuant to this Statement of Intent will not become effective until identical changes have become effective within the City of __________________." All rate schedules filed with the environs Statement of Intent shall bear the following statement: "Effective on the latter of _______________________ or such other date as new rates become effective in the City of __________________."

(2) The utility shall give notice of the filing of a statement of intent to increase environs rates as required by §7.235 of this title (relating to Publication and Service of Notice).

(3) Upon request and a showing of good cause by the utility, the environs rates may become effective upon the same date as the rates became effective in the municipality pursuant to Texas Utilities Code, §104.104. Environs rates shall not become effective any earlier than the filing date of the statement of intent to increase rates with the Director. If a utility appeals the rate to the Commission, and the Commission establishes rates the same as or less than those in the environs statement of intent, the rates established by the Commission in the city may become simultaneously effective in the environs area. If the Commission dismisses that appeal, any rates which have been established in the city may become effective in the environs area at the time of dismissal, provided that the rates established in the city are the same as or less than those in the environs statement of intent.

(4) No later than 60 days from the date of filing an environs statement of intent, the utility shall furnish a copy to the Commission of any action taken by the city with respect to the related statement of intent, the form of written notice mailed to affected environs area customers, and an affidavit of publication from the newspaper in which notice by publication was made, or an affidavit stating the manner in which notice was otherwise given pursuant to Texas Utilities Code, §104.103.

(c) Rate changes proposed pursuant to cost of service adjustment clause. The Commission shall review, on a cost of service basis, an increase in an environs rate that the utility proposes pursuant to a cost of service adjustment clause, as defined in §7.115 [§7.115(9)] of this title (relating to Definitions). The cost of service adjustment clause in effect in the adjacent municipality shall not be applicable or put into effect for the affected environs area, although the utility may request the same rates that are in effect in the adjacent municipality for the environs area. The Commission may review the proposed rate increases pursuant to these clauses on an informal basis and will not schedule a formal hearing unless a complaint is received pursuant to subsection (b)(4) of this section or the Commission elects to conduct a formal hearing.

(d) Other rate changes. This section shall not apply to major rate changes or to changes in special rates.

§7.230.Contents of Notice.

(a) Rate setting notice. In all proceedings involving rate setting, the gas utility's notice shall include the following information:

(1) the proposed revision of rates and schedules;

(2) a statement specifying in detail each proposed change;

(3) the effect the proposed change is expected to have on the revenues of the company;

(4) the classes and numbers of utility customers affected; and

(5) any other information required by the Commission.

(b) Environs notice. In addition to the information required in subsection (a) of this section, in all proceedings involving statements of intent to change environs rates, as that term is defined in §7.115 [§7.115(13)] of this title (relating to Definitions), the gas utility's notice shall also include:

(1) the date of the filing of the statement of intent;

(2) a statement as to whether or not the proposed rates constitute a "major change";

(3) a statement that the proposed change in rates will not become effective until similar changes have become effective within the nearest incorporated city if the rates are sought to be at the same level as the city rates;

(4) the location where information concerning the proposed change may be obtained; and

(5) a statement that any affected person may file in writing comments or a protest concerning the proposed change in the environs rates with the Docket Services Section of the Hearings Division, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967, at any time within 30 days following the date on which the change would or has become effective.

(c) A gas utility may provide notice by electronic transmission (e-mail) to each directly affected customer, only if:

(1) the affected customer has previously consented in writing that the utility may notify the customer of proposed rate increases by e-mail, and has been informed that this consent may be withdrawn; and

(2) the affected customer has made an e-mail address available to the utility. An e-mail address is considered to be available if it was used for billing purposes by the utility within 60 days of the date the notice of the proposed increase is issued.

(d) In the event that the utility becomes aware that notice by e-mail has failed, the utility must provide notice to the affected customer by mail within 30 days of the date notice of the proposed increase is issued.

(e) If the gas utility gives notice by e-mail under the provisions of Texas Utilities Code, §104.103, the subject heading of the e-mail shall include, in large font, "Notice of Proposed Rate Increase" and such notice shall be printed in type large enough for easy reading and shall be the only information contained in the body of that e-mail.

(f) If the gas utility gives notice by mail under the provisions of Texas Utilities Code, §104.103, such notice shall be printed in type large enough for easy reading and shall be the only information contained on the piece of paper on which it is written. A gas utility may give the notice required under either subsection (a) or (b) of this section by mailing or otherwise delivering the notice with its billing statements.

§7.235.Publication and Service of Notice.

(a) Rate setting proceedings.

(1) Notice. In all rate proceedings, notice shall be given in the following ways.

(A) The Commission shall publish the notice of hearing in the next Bulletin published after the date of issuance of the notice of hearing.

(B) The gas utility shall give notice in accordance with §1.42 [§1.45] of this title (relating to Notice of Hearing [in Nonrulemaking Proceedings]) and, when applicable, §1.45 [§1.48] of this title (relating to Service in Protested Contested Cases).

(C) The gas utility shall give notice in all rate proceedings as required under Texas Utilities Code, §104.103.

(D) The Hearings Division [Office of General Counsel] may also require that a gas utility mail or deliver notice to other affected persons or agencies.

(2) Commission's appellate jurisdiction. In addition to the types of notice required in paragraph (1) of this subsection, a gas utility shall also give notice in rate proceedings involving only the Commission's appellate jurisdiction by serving all parties in the original rate proceeding and the affected municipality with a copy of the petition for review on the same date the utility files the petition for review with the Commission. If any person or entity intervenes, the utility shall furnish a copy of its direct evidence and prepared testimony filed with the Director to the intervenor within five days from the date the motion to intervene is granted.

(3) City gate rates. In addition to the types of notice required in paragraph (1) of this subsection, a gas utility shall also give notice in rate proceedings involving city gate rates by serving all directly affected customers with a copy of the statement of intent on the same date the gas utility files the statement of intent with the Commission. If any person or entity intervenes, the utility shall furnish a copy of its direct evidence and prepared testimony filed with the Director to the intervenor within five days from the date the motion to intervene is granted.

[(b) Rulemaking proceedings. In rulemaking proceedings, notice shall be given in the following ways.]

[(1) The Commission shall give notice in accordance with §1.42 of this title (relating to Notice of Rulemaking Proceedings).]

[(2) The Office of General Counsel shall mail notice to all persons who have made timely written requests of the Commission for advance notice of its rulemaking proceedings.]

[(3) The Commission shall publish the notice of hearing in the next Bulletin published after the date of issuance of the notice of hearing.]

[(4) The Office of General Counsel may require the applicant to mail or deliver notice to other affected persons or agencies.]

(b) [(c)] Proceedings other than rate setting [or rulemaking] proceedings. In proceedings other than rate setting [or rulemaking], notice shall be given in the following ways.

(1) The Commission shall publish the notice of hearing in the next Bulletin published after the date of issuance of the notice of hearing.

(2) The Commission [Office of General Counsel] may require the applicant to mail or deliver notice to other affected persons or agencies.

§7.240.Statement of Intent to Participate.

If the Hearings Division [Office of General Counsel] receives a letter or other communication from an affected person concerning a statement of intent filed pursuant to Texas Utilities Code, §104.102 [§104.105], the Hearings Division [Office of General Counsel] shall, within a reasonable time thereafter, forward to such affected person a form for filing a complaint and statement of intent to participate. The affected person shall complete the complaint and statement of intent to participate form and shall include the complainant's name, address, the utility and the rate increase that is the subject of the complaint, how the affected person will be impacted by the proposed rate increase, and a statement that the complainant or an authorized representative shall appear and participate through the presentation of evidence and arguments if a hearing is held to consider the rate increase. The affected person shall properly complete and return the complaint and statement of intent to participate form to the Hearings Division [Office of General Counsel] within 14 days after the mailing by the Hearings Division [Office of General Counsel], or the Commission shall not consider it to be a properly filed complaint pursuant to Texas Utilities Code, §104.105. If the initial complaint is received before the deadline in Texas Utilities Code, §104.105, and the complaint and statement of intent to participate form is received after that date but in a timely manner pursuant to this rule, the form shall be deemed to be filed as of the date of the filing of the original complaint.

§7.245.Effective Date of Orders.

(a) In rate proceedings under the Commission's original jurisdiction, rates set by the Commission are prospective only and are observed from the date of the applicable Commission order.

(b) In municipal rate appeals, the Commission shall enter a final order establishing rates the Commission determines the municipality should have set in the ordinance to which the appeal applies. Rates set by the Commission are prospective only and are observed from the date of the applicable Commission order, except as specifically provided under Texas Utilities Code, §103.056 [103.056]. If the Commission fails to enter a final order within 185 days after the date the appeal is perfected, the rates proposed by the gas utility are considered to be approved by the Commission and take effect on the expiration of the 185-day period.

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 January 23, 2018.

TRD-201800240

Haley Cochran

Rules Attorney, Office of General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 475-1295


SUBCHAPTER C. RECORDS AND REPORTS; TARIFFS; GAS UTILITY TAX

16 TAC §§7.301, 7.310, 7.315, 7.351

The Commission proposes the amendments under Texas Utilities Code Titles 3 and 4, which authorize the Commission to regulate gas utilities, to protect the public interest inherent in the rates and services of gas utilities, and to assure rates, operations, and services that are just and reasonable to the consumers and to the utilities. In addition, Texas Natural Resources Code §117.102 and Texas Utilities Code §121.2025 give the Commission exclusive jurisdiction to determine whether a city's annual charge is authorized; Texas Natural Resources Code §81.052 authorizes the Commission to adopt all necessary rules for governing and regulating persons under the jurisdiction of the Commission; Texas Utilities Code §102.001 gives the Railroad Commission exclusive original jurisdiction over the rates and services of a gas utility distributing natural gas or synthetic natural gas in areas outside a municipality; Texas Utilities Code, §102.151 requires gas utilities to file schedules showing all rates for a gas utility service, product, or commodity offered by the gas utility and each rule or regulation that relates to or affects a rate of the gas utility or a gas utility service, product, or commodity furnished by the gas utility; Texas Utilities Code, §104.001 vests in the Railroad Commission all the authority and power of this state to ensure compliance with the obligations of gas utilities in Texas Utilities Code, Title 3, Subtitle A, and authorizes the Commission to adopt rules for determining the classification of customers and services; and Texas Utilities Code §104.301, allows a utility to file with the Commission a tariff or rate schedule that provides for an interim adjustment in the utility's monthly customer charge or initial block rate to recover the cost of changes in the investment in capital for gas utility service.

Statutory authority: Texas Natural Resources Code §81.052 and §117.102; Texas Utilities Code, Titles 3 and 4, including §§102.001, 102.151, 104.001, 104.301, and 121.2025.

Cross reference to statutes: Texas Natural Resources Code Chapters 81 and 117, and Texas Utilities Code Titles 3 and 4.

Issued in Austin, Texas, on January 23, 2018.

§7.301.Annual Report.

(a) Each gas utility, public utility, or utility under the jurisdiction of the Commission shall file with the Commission each year a gathering, transmission, or distribution annual report showing that information required by the Commission to enable it to properly regulate natural gas utilities within the state. The annual report shall be made on a form approved by [the] Gas Services [Division], printed or otherwise made available to all gas utilities by Gas Services [the Division]. The annual report shall be made on a calendar year basis with the reports being due not later than April 1 of each calendar year for the preceding calendar year. The annual report shall be filed with [the] Gas Services [Division].

(b) All intrastate gas utilities shall file either a gathering, transmission or distribution annual report with [the] Gas Services [Division of the Commission]. Gas gathering utilities, as defined in subsection (c) of this section, shall file the Gathering Annual Report. The Transmission Annual Report shall be filed by those gas utilities that do not meet the definition of a gas gathering utility and are not engaged in the distribution of natural gas to residential and commercial end users. The Distribution Annual Report shall be filed by those gas utilities that are engaged in the retail distribution of gas to end users.

(c) For the purpose of determining which annual report to file, a "gas gathering utility" shall be defined as a gas utility or public utility which employs a pipeline or pipelines and ancillary facilities thereto in the first taking or the first retaining of possession of gas produced by others which extends from any point where such gas is produced, purchased, or received to the trunk line or main line of transportation where such gas is sold or delivered, without regard to the size, the length, or the amount of such gas carried through such pipeline or pipelines to the trunk line or main line of transportation, thus having as its primary function the collecting or collecting and processing of gas produced by others as a preliminary incident to the transportation after it has been severed from the earth by production.

(d) Any utility under the regulation of the Federal Energy Regulatory Commission (FERC) which alleges that it makes no intrastate sales and engages in no intrastate transportation may file a copy of its FERC Form 2 or such other annual report as may be required by that agency in lieu of the annual report form prescribed by this section. The utility shall include an affidavit that the utility makes no intrastate sales and engages in no intrastate transportation and shall provide any other information required by Gas Services [the Division]. If, upon examination, [the] Gas Services [Division] determines that a utility filing under this section should properly have filed an annual report on the form prescribed by Gas Services, Gas Services [the Division, the Division ] shall notify the utility in writing and the utility shall file the appropriate report within 30 days.

(e) The definition of the "gas gathering utility" system described herein shall apply regardless of whether a gas plant is located on the pipeline or pipelines comprising a gas gathering utility system and regardless of ownership of any such gas plant.

(f) In determining whether a utility meets the definition of gas gathering utility in subsection (c) of this section, the Commission shall determine if the primary function of the pipeline or pipelines is gathering rather than relying solely on the configuration or location of the facilities comprising the system.

(g) This section is made to comply with the orders issued in Gas Utilities Docket Numbers 1, 2, 5, and 6, which orders are hereby incorporated into this section.

(h) If a gas utility is unable to meet the deadline for filing an annual report, the utility may request an extension of time to file. The utility shall make such a request in writing filed with Gas Services [the Division], and shall state the reason or reasons the utility cannot meet the filing deadline [dead line] and the date by which the utility will file the annual report. Gas Services [The Division] will notify the utility of the new deadline [dead line], as approved.

§7.310.System of Accounts.

(a) Except as provided in this section, each gas utility, as defined in §7.115 of this title (relating to Definitions), shall utilize the Federal Energy Regulatory Commission's (FERC) Uniform System of Accounts (USOA) prescribed for Natural Gas Companies subject to the Provisions of the Natural Gas Act (as amended from time to time) [(FERC USOA)] for all operating and reporting purposes. Gas-gathering utilities, as defined in §7.115 of this title (relating to Definitions), shall not be required to operate under the FERC USOA, but shall be required to report under those accounts for annual report and gas utility tax purposes pursuant to §7.301 of this title (relating to Annual Report) and §7.351 of this title (relating to Gas Utility Tax). The FERC USOA [Uniform System of Accounts] shall be applicable to all gas utility and gas utility related operations regardless of location, except those gas-gathering utilities as defined in this chapter.

(b) As provided in General Instruction 3.C. of the FERC USOA, a gas utility may use a different system of account numbers than those prescribed by the FERC USOA if the gas utility maintains a readily available cross-reference between its account numbers and the prescribed account numbers. The contents of each account, however, must conform to the account definitions set forth in the USOA.

[(c) Any utility currently using the NARUC USOA shall maintain a readily accessible cross-reference system between the NARUC USOA and the FERC USOA for calendar year 2003 reporting purposes. Every gas utility subject to this provision shall transition to the FERC Uniform System of Accounts not later than January 1, 2004. Any gas utility needing additional transition time may request an extension to the January 1, 2004, date by submitting a request in writing stating the reasons why an extension is needed and establishing a date for completion of the transition.]

§7.315.Filing of Tariffs.

(a) Filing requirements for all tariffs. Each gas utility shall file with the Commission through the Commission's web site using an electronic format as prescribed by the Commission and the instructions contained in the Electronic Data Interchange (EDI) manual on the Commission's web site a tariff complying with minimum requirements as defined in subsections (c) and (d) of this section for all rates which are within the original or appellate jurisdiction of the Commission and which are currently in force for any gas utility service, product, or commodity. If the rate charged is based on a formula or requires a calculation to determine the unit rate to be charged, the utility shall, in the tariff filing, identify and report all components used in the calculation of the unit rate, including each component of the cost of gas. Each utility providing gas distribution system service or sales shall file, as part of the rates, copies of all rules and regulations relating to or affecting rates, utility service, products, or commodities furnished by the gas utility. Electronic filing instructions may be obtained on the Gas Services page of the Commission's web site.

(b) Filing requirements for changes in rates or services. Whenever there is a change in any of the matters required to be filed by subsection (a) of this section, the utility shall file revised tariffs containing the minimum requirements as defined in subsections (c) and (d) of this section. If the rate charged is adjusted pursuant to an escalation provision or formula, the utility shall file an amended tariff that shows the current rate charged, including the unit of measure and the effective date. The utility shall file revised tariffs with [the] Gas Services [Division] within 30 days of the effective date of the change.

(c) Contents of tariffs. Each tariff filed at the Commission shall contain the following:

(1) the utility name;

(2) the full name of the customer or city, area, or environs that will be affected by the tariff. If the utility is requesting confidentiality for customer names, the utility shall report only the customer identification number assigned by [the] Gas Services [Division]. If a utility does not already have a customer identification number for a tariff, the utility shall notify [the] Gas Services [Division] prior to filing the tariff. [The] Gas Services [Division] shall assign a customer identification number or numbers and shall notify the utility of the assigned customer identification number or numbers prior to the utility filing the tariff;

(3) the utility contract number or rate schedule number;

(4) a list of the services the utility provides under the tariff. Service includes but is not limited to residential sales, commercial sales, industrial sales, sales to public authority, electric generation sales, gathering, transportation, compression, exchange, underground storage, sales for resale, city gate sales, and other. If the utility identifies the type of service as "other," the utility shall describe the service or services it offers under the tariff;

(5) the effective date of the rate schedule (GSD-1) or the effective date of the original contract or agreement (GSD-2);

(6) the effective date of the most recent amendment to the contract, rate schedule, or agreement;

(7) the current rate. The utility shall state the billing unit (such as Mcf, MMBtu, Cf, etc.); shall list all charges that may apply under the contract or agreement; shall describe all components used in the calculation of the current rate including but not limited to standby charges, reservation fees, imbalance provisions and charges, penalties, treating provisions, taxes, pooling fees, etc.; and shall state the effective date. A statement on the rate schedule that a particular rate includes certain provisions, without restating all the details or contingencies of the contract, is sufficient. If the rate the utility charges is based on a formula or requires a calculation to determine the unit rate to be charged, the utility shall identify in the tariff all components used in the calculation of the unit rate, including each component of the cost of gas;

(8) all rate adjustment provisions;

(9) the reason or reasons for filing. The utility shall state whether the filing:

(A) commemorates a new contract or agreement;

(B) is made in compliance with a Commission order, in which case the filing shall include the Commission docket number;

(C) is made in compliance with a city ordinance, in which case the filing shall include the city ordinance number or reference;

(D) amends an existing tariff; or

(E) is made for any other reason, in which case the utility shall provide an explanation; and

(10) the names, titles, addresses, telephone numbers and, if available, the electronic mail addresses of all persons who will respond to inquiries regarding tariff provisions.

(d) Additional requirements for specific types of tariffs. In addition to the information required by subsection (a) of this section, the utility shall also provide the following information, as applicable:

(1) For a gas utility distribution system service or sale, the utility shall file on GSD-1:

(A) all rate schedules. The utility shall include on these schedules the base rates and all adjustments to the base rates, including but not limited to late payment charges, gas cost adjustments, purchased gas adjustments, prompt payment provisions, franchise fees, authorized rate case expense surcharges, and weather normalization adjustments. The utility shall file every rate schedule applicable to the service area as part of the tariff, including any seasonal rates or special rates; and

(B) the current service charges in the city, environs, or other area affected by the tariff filing, in sufficient detail to enable customers to determine the applicability of each service charge. The utility shall include all service charges that may be assessed in the city, environs, or other area affected by the tariff filing, including, but not limited to, residential customer deposits, line extension policies and charges, meter testing charges, return check charges, initial connection charges, and reconnection charges.

(2) For transportation and exchange service or rates, the utility shall file on GSD-2:

(A) the customer name or customer identification number assigned by [the] Gas Services [Division] for which the utility is delivering gas;

(B) the contractual point or points of redelivery or customer identification number as established by [the] Gas Services [Division];

(C) the information required by paragraph (4) of this subsection, if applicable;

(3) For utility service or sales, other than distribution system service or sales described in subsection (c) of this section, or for transportation and exchange service or rates, the utility shall file on GSD-2:

(A) the term of the contract. The utility shall provide the term specified in the contract. If the contract continues until canceled by either party, the utility may state that the contract is "evergreen" or other similar language as appropriate;

(B) the contractual point or points of redelivery or customer identification number as established by [the] Gas Services [Division]; and

(C) the information required by paragraph (4) of this subsection, if applicable.

(4) For a tariff reflecting a transaction described in Texas Utilities Code, §104.003(b), the utility shall:

(A) indicate which facts support the applicability of Texas Utilities Code, §104.003(b), to the transaction;

(B) indicate whether the transaction is between affiliates; and

(C) affirm that a true and correct copy of the tariff has been delivered to the customer simultaneously with delivery to the Commission and that the transaction is not a direct sale for resale to a gas distribution utility at a city gate.

(e) Compliance. Each tariff filing shall be subject to review by [the] Gas Services [Division]. If [the] Gas Services [Division] takes no action on a tariff filing on or before the 30th day after the filing is filed, the tariff is deemed accepted. If a tariff filing is deficient, [the ] Gas Services [Division] will notify the utility of the item or items that must be corrected. The utility shall have a reasonable time, not less than 30 days, from the date of Gas Services' [the Services Division's] notice of deficiency to make the required corrections and re-file the tariff. At the written request of the utility, [the] Gas Services [Division] may accept a rejected tariff as a statement of intent under Texas Utilities Code, §104.102. [The] Gas Services [Division ] may docket a tariff or rate schedule filing on its own motion under Texas Utilities Code, §104.151, in circumstances that include but are not limited to a utility filing a tariff for an initial rate which on its face is not just and reasonable; filing a tariff for higher environs rates based on city rates without filing a statement of intent to increase rates for the environs; filing a tariff to increase a city gate rate without filing a statement of intent; or filing tariffs containing provisions other than rates that have substantive service rule changes that have not been reviewed.

(f) Electronic format. Each utility shall comply with this section by filing or refiling all current tariffs with the Commission through the Commission's web site using an electronic format as prescribed by the Commission and the instructions available [contained in the Electronic Data Interchange (EDI) manual] on the Commission's web site. [Electronic tariffs filed under this subsection shall not contain any substantive changes to currently approved tariffs on file with the Commission.]

[(1) Utilities providing natural gas service to residential, commercial and industrial customers in a distribution capacity as of the effective date of this section shall file or refile by June 28, 2002.]

[(2) All other natural gas utilities selling or transporting natural gas as of the effective date of this section shall file or refile according to the following schedule:]

[(A) Utilities with names beginning with the letters A-M shall submit electronic filings no later than August 30, 2002; and]

[(B) Utilities with names beginning with the letters N-Z shall submit electronic filings no later than September 30, 2002.]

[(3) A utility may request a good cause extension of the deadline to which it is subject. The request for extension shall be in writing and shall:]

[(A) be signed by an officer of the utility company;]

[(B) include a detailed explanation of the reason for the delay;]

[(C) include a proposed date by which the utility will have filed all tariffs in electronic format; and]

[(D) be filed no later than 30 days before the deadline to which the utility is subject.]

[(4) The Commission may grant an extension as requested; may grant an extension for less time than requested; or may deny a requested extension. If the Commission grants a utility an extension, the Commission may require the utility to file or refile a hard copy of its current tariffs using the tariff forms prescribed by the Commission.]

[(5)] The Commission shall not grant exemptions from the requirement that utilities shall file their tariffs in electronic format. Temporary or technical problems with the Commission's web site or with the Internet that prevent a utility from making a timely electronic filing shall not constitute the utility's failure to comply with this section.

§7.351.Gas Utility Pipeline Tax.

(a) Tax imposed. Every gas utility as described in Texas Utilities Code, §122.001(1), shall report and pay a gas utility tax as required by Texas Utilities Code, Chapter 122. The gas utility tax is imposed on the gross income received from all activity performed by the gas utility in Texas pursuant to Texas Utilities Code, §121.001(a)(2). The rate of the tax is one-half of 1.0% of the gross income subject to the tax.

(b) Tax payment. Each gas utility subject to this tax shall report and pay the tax imposed to the Commission by February 20, May 20, August 20, and November 20 of a year for the preceding calendar quarter. The gas utility tax report shall be of a form and content as established by the Commission and shall be properly completed. [The payment shall be made payable as directed by the Director]. The Commission shall consider a gas utility tax report and payment timely filed if it is received by [the] Gas Services [Division ] on or before the applicable date or is sent to Gas Services [the Division] by first-class United States mail in an envelope or wrapper properly addressed and stamped and postmarked before the deadline and received not more than 10 days later. A legible postmark affixed by the United States Postal Service shall be prima facie evidence of the date of mailing.

(c) Gross income and gross receipts.

(1) Gross income shall be equal to the total gross receipts from any activity described in Texas Utilities Code, §121.001(a)(2) [§122.001(2)], other than an activity excluded by Texas Utilities Code Chapter 121 from the activities that make a person a gas utility for purposes of that chapter, less a deduction of the costs paid to another person by the gas utility for purchasing, treating, or storing natural gas or for gathering or transporting natural gas to the facilities of the gas utility. Treating shall be any process designed to make gas of pipeline quality.

(2) Gross receipts shall be equal to the total revenue received from the sale and/or transportation of gas. Revenue from residential sales, commercial and industrial sales, other sales to public authorities, sales for resale, interdepartmental sales, [and] revenues from transportation of gas of others, revenues from storing gas of others, other gas revenues as they relate to natural gas sales, transportation, and/or treating revenues related to transportation (corresponding to Account Numbers 480, 481, 482, 483, 484, 489.1 through 489.4, and 495 [and 489] of the Federal Energy Regulatory Commission (FERC) [National Association of Regulatory Utility Commissioners (NARUC)] uniform system of accounts [as they existed on January 16, 1991]), as well as any other applicable revenue items determined by the Commission, shall be subject to the gas utility tax. A distribution gas utility performing transportation for a fee (Account Number 489.3) and/or making sales for resale (Account Number 483) shall be subject to tax on those receipts. [If a gas utility that engages in both transmission and distribution of natural gas makes an allocation of costs to the transmission function which is approved by the Commission, then no additional gas utility tax shall be paid on costs allocated to the distribution function. If no such allocation is made, then such gas utility shall be required to pay gas utility tax on sales to end-use customers. A properly authorized gate rate shall be deemed to constitute a sufficient allocation of transmission costs.]

(d) Nontaxable receipts. The following revenues shall not be included in the computation of taxable gross income [receipts]:

(1) revenues received from first sales of gas by a producer thereof exclusively. If the sale by a producer of gas includes both produced and purchased gas, then the total revenues from the sale of produced gas shall be exempt from the gas utility tax. However, the total revenues from the sale of purchased gas shall be subject to the tax;

(2) revenues received from burnertip sales by a gas utility engaged solely in retail gas distribution;

(3) revenues derived from transporting, delivering, selling, or otherwise making available natural gas for fuel, either directly or indirectly, to irrigation wells or from the sale, transportation, or delivery of natural gas for any other direct use in agricultural activities;

(4) revenues received from interstate transactions or sales of gas which are subject to the jurisdiction of FERC [the Federal Energy Regulatory Commission] under the provisions of the Natural Gas Act, 15 United State Code §717 et seq., and the Natural Gas Policy Act, 15 United States Code §3301 et seq.; or

(5) revenues received from brokerage or off-system sales.

(e) Deductions. To determine taxable gross income, deductions from gross receipts for certain costs incurred are allowed. Deductions may be used to reduce current tax liability to zero. Current deductions may not be carried forward and deducted from gross receipts in the next quarter. Allowable deductions shall be those costs paid to another person associated with [gas processed by others,] natural gas wellhead purchases, natural gas field line purchases, natural gas gasoline plant outlet purchases, natural gas city gate purchases, exchange gas, purchased gas expenses, underground storage expenses, and the transmission and compression of gas by others (corresponding to FERC [NARUC] Account Numbers [777,] 800, 801, 802, 803, 804, 806, 807, 813, [824,] and 858 [as they existed on January 16, 1991]), and any other applicable expenses as determined by the Commission. [A deduction shall also be allowed for the cost of labor, materials used and expenses incurred in operating underground storage plant, and other underground storage operating expenses, including research and development expenses.] The balances of gas withdrawn from storage (corresponding to FERC [NARUC] Account Number 808.1 [808 as it existed on January 16, 1991]) (debit), and gas delivered to storage (corresponding to FERC [NARUC] Account Number 808.2 [809 as it existed on January 16, 1991]) (credit) shall be netted. If the net is a debit balance, that balance shall also be deducted from the gross receipts. If the net is a credit balance, that balance shall reduce the allowable deductions.

(f) Enforcement and penalties. Each gas utility liable for the gas utility tax shall be subject to the enforcement and penalty provisions set forth in Texas Utilities Code, Chapter 122. A penalty in the amount of 5.0% of the tax due shall be imposed on any person who fails to make a report or pay a tax as required under law. An additional penalty of 5.0% of the tax due shall be imposed on any person who fails to make a report or pay a tax as required before the 30th day after the date the report or tax payment is due. If a person fails to both make the report and pay the tax for a reporting period, only the penalty and additional penalty, as applicable, for failure to make the report is imposed. If the amount of a penalty or additional penalty computed as otherwise provided by this subsection is less than $5.00, the amount of the penalty or additional penalty is $5.00. Any gas utility tax delinquent during the period commencing on or after January 1, 1994, shall draw simple interest, at the rate of 12% per year beginning on the 60th day after the date the tax becomes delinquent until the tax is paid. [Any gas utility tax delinquent during the period commencing on September 1, 1991, and ending December 31, 1993, shall draw interest at the rate of 12% per year, compounded monthly, beginning on the 60th day after the date the tax became delinquent until December 31, 1993, or until the tax is paid, whichever is first. Any gas utility tax delinquent during any period before September 1, 1991, shall draw interest at the rate of 10% per year, beginning on the 60th day after the date the tax became delinquent until August 31, 1991, or until the tax is paid, whichever is first.] The tax is considered paid when received by the Commission in accordance with subsection (b) of this section.

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 January 23, 2018.

TRD-201800241

Haley Cochran

Rules Attorney, Office of General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 475-1295


SUBCHAPTER D. CUSTOMER SERVICE AND PROTECTION

16 TAC §§7.455, 7.460, 7.465, 7.470, 7.475

The Commission proposes the amendments under Texas Utilities Code Titles 3 and 4, which authorize the Commission to regulate gas utilities, to protect the public interest inherent in the rates and services of gas utilities, and to assure rates, operations, and services that are just and reasonable to the consumers and to the utilities. In addition, Texas Natural Resources Code §117.102 and Texas Utilities Code §121.2025 give the Commission exclusive jurisdiction to determine whether a city's annual charge is authorized; Texas Natural Resources Code §81.052 authorizes the Commission to adopt all necessary rules for governing and regulating persons under the jurisdiction of the Commission; Texas Utilities Code §102.001 gives the Railroad Commission exclusive original jurisdiction over the rates and services of a gas utility distributing natural gas or synthetic natural gas in areas outside a municipality; Texas Utilities Code, §102.151 requires gas utilities to file schedules showing all rates for a gas utility service, product, or commodity offered by the gas utility and each rule or regulation that relates to or affects a rate of the gas utility or a gas utility service, product, or commodity furnished by the gas utility; Texas Utilities Code, §104.001 vests in the Railroad Commission all the authority and power of this state to ensure compliance with the obligations of gas utilities in Texas Utilities Code, Title 3, Subtitle A, and authorizes the Commission to adopt rules for determining the classification of customers and services; and Texas Utilities Code §104.301, allows a utility to file with the Commission a tariff or rate schedule that provides for an interim adjustment in the utility's monthly customer charge or initial block rate to recover the cost of changes in the investment in capital for gas utility service.

Statutory authority: Texas Natural Resources Code §81.052 and §117.102; Texas Utilities Code, Titles 3 and 4, including §§102.001, 102.151, 104.001, 104.301, and 121.2025.

Cross reference to statutes: Texas Natural Resources Code Chapters 81 and 117, and Texas Utilities Code Titles 3 and 4.

Issued in Austin, Texas, on January 23, 2018.

§7.455.Curtailment Standards.

The following category shall be included as the lowest priority category on all curtailment plans of public utilities subject to the jurisdiction of the Commission: deliveries of natural gas or sales of natural gas to the interstate market under the provisions of the Natural Gas Policy Act, §311(b) and §312, and 18 Code of Federal Regulations §§284.122 and 284.142 [§283.200].

(1) No sales pursuant to §311(b) shall be made unless a public utility is able to provide adequate service to all of its existing intrastate customers. Adequate service includes all requirements of existing customers, notwithstanding contractual limitations, and gas needed to fill storage reservoirs for anticipated peak usage or to build up "line pack" to fill expected customer requirements.

(2) No deliveries of natural gas which have been determined to be surplus pursuant to §312 shall be made except to the extent a public utility continues to comply with the requirements, including service to existing customers, imposed in the Commission order determining the amount of the surplus or in the contract of assignment of gas reserves from which the deliveries are being made.

(3) No sales of natural gas pursuant to 18 Code of Federal Regulations §284.142 [§284.200] shall be made except to the extent a public utility continues to comply with the requirements, including service to existing customers, contained in the contract under which deliveries are being made or in any report required to be filed with the Commission.

§7.460.Suspension of Gas Utility Service Disconnection During an Extreme Weather Emergency.

(a) Applicability and scope. This rule applies to gas utilities, as defined in Texas Utilities Code, §101.003(7) and §121.001, and to owners, operators, and managers of mobile home parks or apartment houses who purchase natural gas through a master meter for delivery to a dwelling unit in a mobile home park or apartment house, pursuant to Texas Utilities Code, §§124.001-124.002, within the jurisdiction of the Railroad Commission pursuant to Texas Utilities Code, §102.001. For purposes of this section, all such gas utilities and owners, operators and managers of master meter systems shall be referred to as "providers." Providers shall comply with the following service standards. A gas distribution utility shall file amended service rules incorporating these standards with the Railroad Commission in the manner prescribed by law.

(b) Disconnection prohibited. Except where there is a known dangerous condition or a use of natural gas service in a manner that is dangerous or unreasonably interferes with service to others, a provider shall not disconnect natural gas service to:

(1) a delinquent residential customer during an extreme weather emergency. An extreme weather emergency means a day when the previous day's highest temperature did not exceed 32 degrees Fahrenheit and the temperature is predicted to remain at or below that level for the next 24 hours according to the nearest National Weather Station for the county where the customer takes service.

(2) a delinquent residential customer for a billing period in which the provider receives a written pledge, letter of intent, purchase order, or other written notification from an energy assistance provider that it is forwarding sufficient payment to continue service; or

(3) a delinquent residential customer on a weekend day, unless personnel or agents of the provider are available for the purpose of receiving payment or making collections and reconnecting service.

(c) Payment plans. Providers shall defer collection of the full payment of bills that are due during an extreme weather emergency until after the emergency is over, and shall work with customers to establish a payment schedule for deferred bills as set forth in [paragraph (2)(D) of] §7.45 of this title (relating [, relating] to Quality of Service) [Service].

(d) Notice. Beginning in the September or October billing periods utilities and owners, operators, or managers of master metered systems shall give notice as follows:

(1) Each utility shall provide a copy of this rule to the social services agencies that distribute funds from the Low Income Home Energy Assistance Program within the utility's service area.

(2) Each utility shall provide a copy of this rule to any other social service agency of which the provider is aware that provides financial assistance to low income customers in the utility's service area.

(3) Each utility shall provide a copy of this rule to all residential customers of the utility and customers who are owners, operators, or managers of master metered systems.

(4) Owners, operators, or managers of master metered systems shall provide a copy of this rule to all of their customers.

(e) In addition to the minimum standards specified in this section, providers may adopt additional or alternative requirements if the provider files a tariff with the Commission pursuant to §7.315 [§7.44] of this title (relating to Filing of Tariffs). The Commission shall review the tariff to ensure that at least the minimum standards of this section are met.

§7.465.Abandonment.

(a) Service to a local distribution company or city gate customer. A gas utility shall obtain written Commission approval prior to the abandonment or permanent discontinuance of service to any local distribution company or city gate customer that involves the removal or abandonment of facilities other than a meter.

(1) Except in pipeline safety emergencies, the gas utility shall file an application to abandon or permanently discontinue service to a local distribution company or city gate customer with the Director at least 60 days prior to the proposed effective date of the proposed abandonment or permanent discontinuance of service. In addition to the information required in §1.32 [§1.25 ] of this title (relating to Form and Content of Pleadings), the application shall state the following:

(A) the number of affected customers in each class;

(B) the names and addresses of the local distribution company or city gate customer affected;

(C) the specific reasons for the proposed abandonment or permanent discontinuance of service;

(D) a description, age, and condition of the pipeline or plant that the gas utility proposes to abandon or through which it proposes to permanently discontinue service;

(E) the revenue from and cost to continue the existing service to the affected local distribution company or city gate customers;

(F) all reasonable alternative energy sources available to the affected local distribution company or city gate customers, and the cost of such energy sources on an MMBtu equivalent basis;

(G) the cost per customer of each conversion to available alternative energy sources;

(H) any previous notice provided by the utility to the affected local distribution company or city gate customer;

(I) a statement that the application is subject to Commission approval; and

(J) a statement of the affected local distribution company or city gate customer's right to intervene in the application.

(2) The gas utility shall send a copy of the application to the affected local distribution company or the affected city gate customer on the same day that the gas utility files the application to abandon or discontinue service with the Director.

(A) If a person files a statement of intent to participate or motion to intervene with the Commission within 30 days from the date of the filing of the application, and the Commission grants party status, the Commission shall hold a formal hearing within 60 days following the date on which the application is filed.

(B) If the Commission does not receive and grant a timely-filed statement of intent to participate or intervention pleading, then the Director shall act administratively on the application to abandon or permanently discontinue service within 45 days following the date on which the gas utility filed the application and shall notify all affected customers in writing of the decision. If the Director denies the application administratively, the gas utility, within 30 days of the date the Director administratively denies an application to abandon or permanently discontinue service, may request that a formal hearing be held within 60 days following the date on which the Director denies the application.

(3) If upon the granting of the application to abandon or permanently discontinue service the local distribution company would no longer provide service to any residential or commercial customer because of such abandonment, then the local distribution company shall file an application to abandon or permanently discontinue service under subsection (b) of this section.

(4) The Director shall have the authority to act administratively on abandonment or permanent discontinuance applications that satisfy the conditions of this subsection.

(5) Temporary termination of service due to a pipeline safety emergency shall not be considered to be abandonment or permanent discontinuance of service under the terms of this section. If the gas utility determines not to resume service as a result of a pipeline safety emergency, then the gas utility shall file an application under this section within 30 days of the temporary termination of service.

(6) The gas utility shall have the burden of proof to show that the proposed abandonment or permanent discontinuance of service is reasonable and necessary and is not contrary to the public interest. The Commission shall consider the following conditions when making a determination regarding an application for abandonment or permanent discontinuance of service:

(A) whether continued service is no longer economically viable for the gas utility;

(B) whether the potentially abandoned customers have any alternatives, how many, and at what cost;

(C) whether any customer has made investments or capital expenditures in reliance on continued availability of natural gas, where use of an alternative energy source is not viable;

(D) whether the utility has failed to properly maintain the facilities proposed for abandonment, rendering them unsalvageable due to neglect; and

(E) any other considerations affecting the potentially abandoned customers.

(b) Service to residential and commercial customers. A gas utility shall obtain written Commission approval prior to the abandonment or permanent discontinuance of service to any residential or commercial customer that involves the removal or abandonment of facilities other than a meter. This subsection shall not apply to discontinuance of service to residential or commercial customers for any of the reasons set forth in Subchapter [subchapter] D of this chapter (relating to Customer Service and Protection).

(1) Except in pipeline safety emergencies, the gas utility shall file an application to abandon or permanently discontinue service with the Director at least 60 days prior to the proposed effective date of the proposed abandonment or permanent discontinuance of service to any residential or commercial customer involving the removal or abandonment of facilities other than a meter. In addition to the information required in §1.32 [§1.25] of this title [(relating to Form and Content of Pleadings)], the application shall state the following:

(A) the number of directly affected customers in each class of service;

(B) the names and addresses of all directly affected customers;

(C) the specific reasons for the proposed abandonment or permanent discontinuance of service;

(D) a description, age, and condition of the pipeline or plant that the gas utility proposes to abandon or through which it proposes to permanently discontinue service;

(E) the revenue from and cost to continue the existing service to the directly affected customers;

(F) all reasonable alternative energy sources available to the directly affected customers, and the cost of such energy sources on an MMBtu equivalent basis;

(G) the cost per customer of each conversion to available alternative energy sources;

(H) the terms of any agreements with, or offers, including qualifying offers, to, directly affected customers by the gas utility for the conversion of customers' appliances to enable the use of alternative energy sources;

(I) copies of any consents to abandonment or permanent discontinuance obtained by the utility from directly affected customers;

(J) any previous notice provided by the utility to the directly affected customer;

(K) a statement that the application is subject to Commission approval; and

(L) a statement of the directly affected customer's right to protest the application and the procedure for filing such a protest.

(2) The gas utility shall send a copy of the application to all directly affected customers on the same day that the gas utility files the application to abandon or permanently discontinue service with the Director.

(A) If any of the directly affected customers files a protest within 30 days following the date on which the application is filed, the Commission shall hold a formal hearing within 60 days following the date on which the application is filed.

(B) If all of the directly affected customers have not consented to the abandonment or permanent discontinuance of service and if the gas utility has not given all of the directly affected customers a qualifying offer, as defined in §7.115 [§7.115(27)] of this title (relating to Definitions), but none of the directly affected customers files a protest within 30 days following the date on which the application is filed, the Director shall act administratively on the application within 45 days following the date on which the application is filed and shall notify all directly affected customers in writing of the decision. The Director may seek additional information from the directly affected customers to determine whether they have received adequate information regarding the consequences of the proposed abandonment. If the Director denies the application administratively, the gas utility, within 30 days of the date the Director administratively denies an application to abandon or permanently discontinue service, may request that a formal hearing be held within 60 days following the date on which the Director denies the application.

(C) The Director shall act administratively on the application within 30 days following the date on which the gas utility files the application if either:

(i) all of the directly affected customers consent to the abandonment or permanent discontinuance of service and none of the directly affected customers files a protest within 15 days following the date on which the gas utility files the application; or

(ii) the gas utility has given all of the directly affected customers a qualifying offer, as defined in §7.115 [§7.115(27)] of this title (relating to Definitions) and none of the directly affected customers files a protest within 15 days following the date on which the gas utility files the application. If the Director denies the application administratively, the gas utility may request that a formal hearing be held within 60 days following the request for a hearing. The gas utility shall file any request for a formal hearing within 30 days of the date the Director administratively denies an application to abandon or permanently discontinue service.

(3) The Director shall have the authority to act administratively on abandonment or permanent discontinuance applications that satisfy the conditions of this subsection.

(4) Temporary termination of service due to a pipeline safety emergency shall not be considered to be abandonment or permanent discontinuance of service under the terms of this section. If the gas utility determines not to resume service as a result of a pipeline safety emergency, then the gas utility shall file an application under this section within 30 days of the temporary termination of service.

(5) The gas utility shall have the burden of proof to show that the proposed abandonment or permanent discontinuance of service is reasonable and necessary and is not contrary to the public interest. The Commission shall consider the following conditions when making a determination regarding an application for abandonment or permanent discontinuance of service:

(A) whether continued service is no longer economically viable for the gas utility;

(B) whether the potentially abandoned customers have any alternatives, how many, and at what cost;

(C) whether any customer has made investments or capital expenditures in reliance on continued availability of natural gas, where use of an alternative energy source is not viable;

(D) whether the utility has failed to properly maintain the facilities proposed for abandonment, rendering them unsalvageable due to neglect; and

(E) any other considerations affecting the potentially abandoned customers.

§7.470.Natural Gas Bill Payment by the State or a State Agency.

(a) Purpose. The purpose of this section is to implement requirements in Texas Utilities Code, §104.255.

(b) Definitions. The terms "payment," "service," and "state agency," when used in this section, have the meanings given in Texas Government Code, §2251.001. The terms "gas utility" and "municipally owned utility" have the meanings given in Texas Utilities Code, §101.003.

(c) Payment requirements. For natural gas utility service provided by a gas utility or by a municipally owned utility to the state or a state agency, the payer and payee must comply with Texas Government Code, Chapter 2251, and with 34 Texas Administrative Code §§20.481, 20.487, and 20.488 (relating to Definitions; Invoicing Standards; and Payments) [§§20.221, 20.223, 20.225, 20.227, and 20.229 (relating to Definitions; Exceptions to Prompt Payment Process; Invoicing Standards; Payments; and Disputed Payments)]. In addition, the following provisions apply to gas utilities and municipally owned utilities:

(1) Gas utilities and municipally owned utilities are prohibited from billing the state or a state agency for a service before the service is provided.

(2) A gas utility or a municipally owned utility may enter into an agreement with the state or a state agency to establish a level or average monthly billing plan only if the billing plan includes a provision for quarterly reconciliation of the leveled or averaged bills.

§7.475.Municipality Contact Information for Notice of Disconnection for Non-Payment for Non-submetered Master Metered Multifamily Properties.

(a) A municipality entitled to receive notice of service disconnections for non-payment for non-submetered master metered multifamily properties pursuant to Texas Utilities Code, §104.352, may provide the Commission with the contact information of the municipality's authorized representative designated to receive such notice.

(b) A municipality shall provide its authorized representative's contact information by mail to Director, Oversight and Safety [Gas Services] Division, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967, or through any other method as indicated on the Commission's website.

(c) The Commission shall make the municipalities' contact information available to the public.

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 January 23, 2018.

TRD-201800242

Haley Cochran

Rules Attorney, Office of General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 475-1295


SUBCHAPTER E. RATES AND RATE-SETTING PROCEDURES

16 TAC §7.5213

The Commission proposes the amendments under Texas Utilities Code Titles 3 and 4, which authorize the Commission to regulate gas utilities, to protect the public interest inherent in the rates and services of gas utilities, and to assure rates, operations, and services that are just and reasonable to the consumers and to the utilities. In addition, Texas Natural Resources Code §117.102 and Texas Utilities Code §121.2025 give the Commission exclusive jurisdiction to determine whether a city's annual charge is authorized; Texas Natural Resources Code §81.052 authorizes the Commission to adopt all necessary rules for governing and regulating persons under the jurisdiction of the Commission; Texas Utilities Code §102.001 gives the Railroad Commission exclusive original jurisdiction over the rates and services of a gas utility distributing natural gas or synthetic natural gas in areas outside a municipality; Texas Utilities Code, §102.151 requires gas utilities to file schedules showing all rates for a gas utility service, product, or commodity offered by the gas utility and each rule or regulation that relates to or affects a rate of the gas utility or a gas utility service, product, or commodity furnished by the gas utility; Texas Utilities Code, §104.001 vests in the Railroad Commission all the authority and power of this state to ensure compliance with the obligations of gas utilities in Texas Utilities Code, Title 3, Subtitle A, and authorizes the Commission to adopt rules for determining the classification of customers and services; and Texas Utilities Code §104.301, allows a utility to file with the Commission a tariff or rate schedule that provides for an interim adjustment in the utility's monthly customer charge or initial block rate to recover the cost of changes in the investment in capital for gas utility service.

Statutory authority: Texas Natural Resources Code §81.052 and §117.102; Texas Utilities Code, Titles 3 and 4, including §§102.001, 102.151, 104.001, 104.301, and 121.2025.

Cross reference to statutes: Texas Natural Resources Code Chapters 81 and 117, and Texas Utilities Code Titles 3 and 4.

Issued in Austin, Texas, on January 23, 2018.

§7.5213.Allowance for Funds Used During Construction.

A utility may be permitted, subject to any revenue adjustment required, to include AFUDC [AFC] related to a project in its rate base in rate proceedings after completion of the project. If, pursuant to this section, a utility is permitted to include CWIP related to a project in its rate base, only that AFUDC [AFC] accruing prior to such inclusion shall be permitted.

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 January 23, 2018.

TRD-201800243

Haley Cochran

Rules Attorney, Office of General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 475-1295


SUBCHAPTER F. PIPELINE APPEAL OF CITY ASSESSMENT OF ANNUAL CHARGE

16 TAC §§7.6001, 7.6002, 7.6007

The Commission proposes the amendments under Texas Utilities Code Titles 3 and 4, which authorize the Commission to regulate gas utilities, to protect the public interest inherent in the rates and services of gas utilities, and to assure rates, operations, and services that are just and reasonable to the consumers and to the utilities. In addition, Texas Natural Resources Code §117.102 and Texas Utilities Code §121.2025 give the Commission exclusive jurisdiction to determine whether a city's annual charge is authorized; Texas Natural Resources Code §81.052 authorizes the Commission to adopt all necessary rules for governing and regulating persons under the jurisdiction of the Commission; Texas Utilities Code §102.001 gives the Railroad Commission exclusive original jurisdiction over the rates and services of a gas utility distributing natural gas or synthetic natural gas in areas outside a municipality; Texas Utilities Code, §102.151 requires gas utilities to file schedules showing all rates for a gas utility service, product, or commodity offered by the gas utility and each rule or regulation that relates to or affects a rate of the gas utility or a gas utility service, product, or commodity furnished by the gas utility; Texas Utilities Code, §104.001 vests in the Railroad Commission all the authority and power of this state to ensure compliance with the obligations of gas utilities in Texas Utilities Code, Title 3, Subtitle A, and authorizes the Commission to adopt rules for determining the classification of customers and services; and Texas Utilities Code §104.301, allows a utility to file with the Commission a tariff or rate schedule that provides for an interim adjustment in the utility's monthly customer charge or initial block rate to recover the cost of changes in the investment in capital for gas utility service.

Statutory authority: Texas Natural Resources Code §81.052 and §117.102; Texas Utilities Code, Titles 3 and 4, including §§102.001, 102.151, 104.001, 104.301, and 121.2025.

Cross reference to statutes: Texas Natural Resources Code Chapters 81 and 117, and Texas Utilities Code Titles 3 and 4.

Issued in Austin, Texas, on January 23, 2018.

§7.6001.General Provisions.

(a) The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1) City--The city or the municipality that assessed an annual charge pursuant to Texas Natural Resources Code, §117.102(b)(1), or Texas Utilities Code, §121.2025(b)(1).

(2) Director--The director of the Oversight and Safety [Gas Services] Division or the director's delegate.

(3) Pipeline--An owner or an operator of a hazardous liquid, carbon dioxide, or natural gas pipeline facility that is located in a public right-of-way in the city.

(4) Public right-of-way in the city--Public roads, highways, streets, alleys, streams, canals, or other public ways located within a city and maintained by the city.

(5) Regulating a pipeline facility--Administering, supervising, inspecting, and otherwise regulating the location of a pipeline facility, including maintaining records and maps of the location of the pipeline facility.

(b) This subchapter implements the authority of the Commission to hear an appeal from a pipeline that has been assessed an annual charge pursuant to Texas Natural Resources Code, §117.102(b)(1), or Texas Utilities Code, §121.2025(b)(1).

(c) Under Texas Natural Resources Code, §117.102(d), and Texas Utilities Code, §121.2025(d), the Commission has exclusive jurisdiction to determine whether a city's annual charge is authorized under Texas Natural Resources Code, §117.102(b)(1), or Texas Utilities Code, §121.2025(b)(1). Texas Natural Resources Code, §117.102, and Texas Utilities Code, §121.2025, do not affect the validity or enforceability of a contract entered into before September 1, 2005, by a municipality and the owner or operator of a hazardous liquid, carbon dioxide, or gas pipeline, or the enforceability of a charge assessed by a municipality before September 1, 2006, under an ordinance adopted on or before September 1, 2004. Texas Natural Resources Code, §117.102, and Texas Utilities Code, §121.2025, apply to a charge assessed by a municipality on or after September 1, 2005, under an ordinance adopted after September 1, 2004; and on or after September 1, 2006, under an ordinance regardless of the date of adoption of the ordinance.

(d) The Commission will hear an appeal filed under this subchapter de novo. The appeal will be handled by the Hearings Division [a legal examiner and a technical examiner] pursuant to this subchapter; the Commission's rules of Practice and Procedure, 16 Texas Administrative Code Chapter 1; and the Commission's general standards for establishing just and reasonable rates. The examiners assigned to the appeal may require that the city send notice of an appeal filed under this subchapter to all pipelines that the city identifies as having been assessed an annual charge within one year preceding the filing of the appeal. The examiners may exercise their discretion in deciding whether to permit intervention by another pipeline or to join another pipeline as a necessary party to an appeal.

(e) A pipeline that files or intervenes in an appeal under this subchapter and the city that assessed the charge being appealed shall share the costs incurred by the Commission in connection with the appeal, pursuant to §7.6007 of this title (relating[, relating] to Procedure for Determining and Sharing of theCommission's Costs) [Costs].

§7.6002.Procedure for Filing and Service of an Appeal, Obligation of City to Respond, and Intervention.

(a) A pipeline shall file an appeal under this subchapter in writing no later than one year after the pipeline receives the invoice for or a similar written notice of the charge being appealed.

(b) The pipeline shall file the appeal with the director, who shall assign a docket number. Thereafter, all documents relating to the appeal shall include the assigned docket number and shall be filed in the [Office of General Counsel] Docket Services Section.

(c) The pipeline shall mail or deliver a copy of the appeal to the city attorney, the city secretary, or any other city official authorized to receive service of process in civil proceedings within 5 days of the date the pipeline files the appeal at the Commission.

(d) The city shall have 90 days from the date it receives a copy of the company's [an] appeal to the Commission to file its response to the appeal, in writing, at the Commission. The city shall simultaneously serve a copy of the response on the pipeline.

(e) The examiners may require the city to mail notice of the appeal to each pipeline identified in the city's response, at the address stated in the response, stating that the pipeline may intervene in the appeal.

(f) Another pipeline with a pipeline facility within public right-of-way in the city may file a motion to intervene in the appeal within 30 days after any notice of the appeal is mailed to the pipelines pursuant to subsection (e) of this section.

§7.6007.Procedure for Determining and Sharing of the Commission's Costs.

(a) The pipelines and a city that are parties to an appeal under this subchapter shall reimburse the Commission for its costs incurred in connection with the appeal. In each appeal, the city shall pay half of the Commission's costs and each pipeline that files or intervenes in the appeal shall pay an equal share of the half of Commission's costs.

(b) The Commission shall determine its costs as follows:

(1) The director and the Hearings Division [Commission's General Counsel] shall require employees assigned to an appeal under this subchapter to keep records of time spent on each appeal. These shall be filed with and made part of the record in each appeal docket.

(2) The Commission shall from time to time specify an hourly rate as its costs for each employee hour devoted to appeals under this subchapter. The rate shall be based on the employee's hourly compensation and multiplied by a factor to cover employment benefit costs and fairly allocable overhead costs (use of copiers, faxes, telephones, computers, hearing room, etc.).

(c) The Commission [director] shall invoice the pipelines and the city for Commission costs, based on the hours recorded by Commission employees and their hourly rates, together with any out-of-pocket expenses not included in the overhead factor, within 30 days after the disposition of an appeal. The pipelines and the city shall each remit to the Commission the invoiced costs within 30 days after receipt of notice of the total amount or after disposition of any appeal from the invoice, whichever is later.

(d) Any pipeline or the city may contest the amount of the costs invoiced to it by filing with the director a written request for reconsideration within 30 days after the date of the invoice, stating the basis for reconsideration. The director shall forward any recommendation to the Commission with the record, and the Commission may [will determine to] approve or adjust the invoiced costs within 30 days.

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 January 23, 2018.

TRD-201800244

Haley Cochran

Rules Attorney, Office of General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 475-1295


SUBCHAPTER G. CODE OF CONDUCT

16 TAC §7.7003, §7.7005

The Commission proposes the amendments under Texas Utilities Code Titles 3 and 4, which authorize the Commission to regulate gas utilities, to protect the public interest inherent in the rates and services of gas utilities, and to assure rates, operations, and services that are just and reasonable to the consumers and to the utilities. In addition, Texas Natural Resources Code §117.102 and Texas Utilities Code §121.2025 give the Commission exclusive jurisdiction to determine whether a city's annual charge is authorized; Texas Natural Resources Code §81.052 authorizes the Commission to adopt all necessary rules for governing and regulating persons under the jurisdiction of the Commission; Texas Utilities Code §102.001 gives the Railroad Commission exclusive original jurisdiction over the rates and services of a gas utility distributing natural gas or synthetic natural gas in areas outside a municipality; Texas Utilities Code, §102.151 requires gas utilities to file schedules showing all rates for a gas utility service, product, or commodity offered by the gas utility and each rule or regulation that relates to or affects a rate of the gas utility or a gas utility service, product, or commodity furnished by the gas utility; Texas Utilities Code, §104.001 vests in the Railroad Commission all the authority and power of this state to ensure compliance with the obligations of gas utilities in Texas Utilities Code, Title 3, Subtitle A, and authorizes the Commission to adopt rules for determining the classification of customers and services; and Texas Utilities Code §104.301, allows a utility to file with the Commission a tariff or rate schedule that provides for an interim adjustment in the utility's monthly customer charge or initial block rate to recover the cost of changes in the investment in capital for gas utility service.

Statutory authority: Texas Natural Resources Code §81.052 and §117.102; Texas Utilities Code, Titles 3 and 4, including §§102.001, 102.151, 104.001, 104.301, and 121.2025.

Cross reference to statutes: Texas Natural Resources Code Chapters 81 and 117, and Texas Utilities Code Titles 3 and 4.

Issued in Austin, Texas, on January 23, 2018.

§7.7003.Administrative Penalties and Other Remedies for Discrimination.

(a) This section implements the authority delegated to the Commission by Texas Natural Resources Code, §81.058(a) and (b)[, as enacted by House Bill 3273, 80th Legislature (2007)].

(b) Terms used in this section shall have the same meaning as in §2.1 of this title (relating to Informal Complaint Procedure); §2.5 of this title (relating to Informal Complaint Process Regarding Loss of or Inability to Account for Gas); and §7.115 of this title (relating to Definitions).

(c) The Commission, after notice and opportunity for hearing, may impose an administrative penalty against:

(1) a purchaser, transporter, gatherer, shipper, or seller of natural gas; a person described by Texas Natural Resources Code, §81.051(a) or §111.081(a); or any other entity under the jurisdiction of the Commission under the Texas Natural Resources Code that the Commission determines has:

(A) violated §7.7001 of this title (relating to Natural Gas Transportation Standards and Code of Conduct) or any other Commission rule adopting standards for entities in the natural gas industry prohibiting unlawful discrimination; or

(B) unreasonably discriminated against a seller of natural gas in the purchase of natural gas from the seller; and

(2) a purchaser, transporter, or gatherer of natural gas if the Commission determines that the person engaged in prohibited discrimination against a shipper or seller of natural gas because the shipper or seller filed a formal or informal complaint with the Commission against the person relating to the person's purchase, transportation, or gathering of the gas.

(d) In determining whether an entity has violated §7.7001 of this title or has unreasonably discriminated against a seller of natural gas in the purchase of natural gas from the seller, the Commission will consider the factors set forth in the definition of "similarly situated shipper" in §7.115 of this title [(relating to Definitions)]. In determining whether conditions of service are the same or substantially the same, the Commission shall evaluate the significance and degree of similarity or difference in relevant conditions between sellers that are material and probative, including, but not limited to, the following:

(1) service requirements;

(2) location of facilities;

(3) receipt and delivery points;

(4) length of haul;

(5) quality of service (firm, interruptible, etc.);

(6) quantity;

(7) swing requirements;

(8) credit worthiness;

(9) gas quality;

(10) pressure (including inlet or line pressure);

(11) duration of service;

(12) connect requirements; and

(13) conditions and circumstances existing at the time of agreement or negotiation.

(e) In determining whether an entity has engaged in prohibited discrimination against a shipper or seller of natural gas because the shipper or seller filed a formal or informal complaint with the Commission against the person relating to the person's purchase, transportation, or gathering of the gas, the Commission will consider all relevant and material facts.

(f) An administrative penalty imposed under this section may not exceed $5,000 a day for each violation. Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty under this section.

(g) If the Commission determines after notice and opportunity for hearing that an entity has engaged in prohibited discrimination for which a penalty may be imposed under this section, the Commission may issue any order necessary and reasonable to prevent the discrimination from continuing, including an order setting rates pursuant to §7.7005 of this title (relating to Authority to Set Rates).

(h) The remedy provided by this section is cumulative of any other remedy the Commission may order.

(i) In all situations, the Commission will apply the relevant statutory and rule provisions to achieve the intended statutory purposes of preventing or remedying undue discrimination and ensuring that natural gas transportation and gathering services are provided at rates and under terms and conditions that are just and reasonable.

§7.7005.Authority to Set Rates.

(a) This section implements the authority of the Commission pursuant to Texas Natural Resources Code, §81.061[, as enacted by House Bill 3273, 80th Legislature (2007)].

(b) Terms used in this section shall have the same meaning as in §2.1 of this title (relating to Informal Complaint Procedure); §2.5 of this title (relating to Informal Complaint Process Regarding Loss of or Inability to Account for Gas); and §7.115 of this title (relating to Definitions).

(c) Except for rates established under Texas Utilities Code, Chapter 103, or Texas Utilities Code, Chapter 104, Subchapters C or G, the Commission may use a cost-of-service method or a market-based rate method in setting a rate in a formal rate proceeding.

(d) On the filing of a complaint by a shipper or seller of natural gas, the Commission may set a transportation or gathering rate in a formal rate proceeding if the Commission determines that the rate is necessary to remedy unreasonable discrimination in the provision of transportation or gathering services. The Commission may set a rate regardless of whether the transporter or gatherer is classified as a utility by other law.

(e) The Commission may use a cost-of-service method or a market-based method in setting a rate pursuant to this section in a formal rate proceeding conducted after notice and an opportunity for hearing pursuant to Chapter 1 of this title [in accordance with the Commission's rules of practice and procedure in 16 Texas Administrative Code, Chapter 1] (relating to Practice and Procedure).

(f) In determining whether to use a cost-of-service method or a market-based method to set rates for transportation or gathering service, the Commission will consider all relevant factors in a formal rate proceeding.

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 January 23, 2018.

TRD-201800245

Haley Cochran

Rules Attorney, Office of General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 475-1295


SUBCHAPTER H. INTERIM RATE ADJUSTMENTS

16 TAC §7.7101

The Commission proposes the amendments under Texas Utilities Code Titles 3 and 4, which authorize the Commission to regulate gas utilities, to protect the public interest inherent in the rates and services of gas utilities, and to assure rates, operations, and services that are just and reasonable to the consumers and to the utilities. In addition, Texas Natural Resources Code §117.102 and Texas Utilities Code §121.2025 give the Commission exclusive jurisdiction to determine whether a city's annual charge is authorized; Texas Natural Resources Code §81.052 authorizes the Commission to adopt all necessary rules for governing and regulating persons under the jurisdiction of the Commission; Texas Utilities Code §102.001 gives the Railroad Commission exclusive original jurisdiction over the rates and services of a gas utility distributing natural gas or synthetic natural gas in areas outside a municipality; Texas Utilities Code, §102.151 requires gas utilities to file schedules showing all rates for a gas utility service, product, or commodity offered by the gas utility and each rule or regulation that relates to or affects a rate of the gas utility or a gas utility service, product, or commodity furnished by the gas utility; Texas Utilities Code, §104.001 vests in the Railroad Commission all the authority and power of this state to ensure compliance with the obligations of gas utilities in Texas Utilities Code, Title 3, Subtitle A, and authorizes the Commission to adopt rules for determining the classification of customers and services; and Texas Utilities Code §104.301, allows a utility to file with the Commission a tariff or rate schedule that provides for an interim adjustment in the utility's monthly customer charge or initial block rate to recover the cost of changes in the investment in capital for gas utility service.

Statutory authority: Texas Natural Resources Code §81.052 and §117.102; Texas Utilities Code, Titles 3 and 4, including §§102.001, 102.151, 104.001, 104.301, and 121.2025.

Cross reference to statutes: Texas Natural Resources Code Chapters 81 and 117, and Texas Utilities Code Titles 3 and 4.

Issued in Austin, Texas, on January 23, 2018.

§7.7101.Interim Rate Adjustments.

(a) General requirements. Pursuant to Texas Utilities Code, §104.301, a gas utility may file with the Commission an application for an interim rate adjustment, subject to the requirements of this section. The director may reject any filing that, at the time of filing or within a reasonable time afterward, does not substantially comply with the requirements of this section.

(1) The filing date of the gas utility's most recent rate case in which there is a final order setting rates for the area in which the interim rate adjustment will apply shall be no more than two years prior to the date the gas utility files its initial interim rate adjustment application under this section. The gas utility shall state in its application the gas utilities docket number of the gas utility's most recent rate case.

(2) A gas utility shall file its application for interim rate adjustment with the Commission at least 60 days before the proposed implementation date of the interim rate adjustment.

(3) A gas utility shall complete notice of its application for interim rate adjustment to all affected customers in accordance with subsection (b) of this section no later than the 45th day after the date the gas utility files its application for interim rate adjustment.

(4) An application for interim rate adjustment is complete on the date the gas utility has filed at the Commission all information required by this section.

(5) A gas utility shall not implement its requested interim rate adjustment until the later of:

(A) the 60th day after the filing is complete;

(B) the day after the utility completes notice to customers; or

(C) the day after the last day of a suspension period imposed pursuant to paragraph (6) of this subsection.

(6) During the 60-day period following a gas utility's filing of an application for interim rate adjustment, the director may suspend the implementation of the interim rate adjustment for a period of up to 45 days from the later of:

(A) the 60th day after the gas utility's application is complete;

(B) the proposed implementation date; or

(C) the day after the utility completes notice to customers.

(b) Notice. The utility shall print the notice of its application for an interim rate adjustment in type large enough for easy reading. The notice shall be the only information contained on the piece of paper on which it is written. A gas utility may give the notice required by this section either by separate mailing or by mailing or otherwise delivering the notice with its billing statements. Notice by mail shall be presumed to be complete three days after the date of deposit of the paper upon which it is written, enclosed in a post-paid, properly addressed wrapper, in a post office or official depository under the care of the United States Postal Service. The notice to customers shall include the following information:

(1) a description of the proposed revision of rates and schedules;

(2) the effect the proposed interim rate adjustment is expected to have on the rates applicable to each affected customer class and on an average bill for each affected customer class;

(3) the service area or areas in which the proposed interim rate adjustment would apply;

(4) the date the proposed interim rate adjustment was or will be filed with each other regulatory authority;

(5) the gas utility's address, telephone number, and web site where information concerning the proposed interim rate adjustment may be obtained; and

(6) a statement that any affected person may file written comments or a protest concerning the proposed interim rate adjustment with [the] Gas Services [Division], Market Oversight Section, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967.

(c) Contents of application. A gas utility shall submit a signed original and two copies of the following information with [the] Gas Services [Division] as the utility's application for interim rate adjustment:

(1) a copy of the notice to customers and an affidavit stating the method of giving notice and the date or dates on which the notice was or will be given;

(2) a tariff or rate schedule or schedules;

(3) an annual project report, as more specifically described in subsection (d) of this section;

(4) an annual earnings monitoring report, as more specifically described in subsection (e) of this section; and

(5) the gas utility's business address, telephone number, and, if applicable, facsimile transmission number and/or e-mail address.

(d) Annual project report. A gas utility seeking to implement an interim rate adjustment shall electronically file with the Commission an annual project report as part of the application.

(1) The annual project report shall be made on a form approved by the Commission and found in [on] the Gas Services section [page] of the Commission's website.

(2) The annual project report shall describe by jurisdictional area:

(A) the gas utility investment projects completed and placed in service during the preceding calendar year;

(B) the gas utility investment retired or abandoned during the preceding calendar year; and

(C) the cost of, need for, and customers, by class and location, benefitted by the change(s) in gas utility investment projects.

(3) Similar investment projects, such as service lines or small tools that the gas utility normally accounts for on a group basis, may be reported as a single investment project.

(e) Annual earnings monitoring report. A gas utility seeking to implement an interim rate adjustment shall electronically file with the Commission an annual earnings monitoring report as part of the application.

(1) The annual earnings monitoring report shall be made on a form approved by the Commission and found in [on ] the Gas Services section [page] of the Commission's website.

(2) The annual earnings monitoring report shall demonstrate the utility's earnings during the preceding calendar year. A gas utility whose annual earnings monitoring report shows that the utility is earning a return on invested capital of more than 75 basis points above the return established by Commission final order setting rates in the utility's most recent rate case for the area in which the interim rate adjustment was implemented shall include with its annual earnings monitoring report a statement of the reasons the rates are not unreasonable or in violation of law.

(f) Methodology for interim rate adjustments. Approval of a gas utility's application for interim rate adjustment is subject to the requirements of this subsection.

(1) The components of the revenue to be recovered through an interim rate adjustment shall be limited to those set forth in this subsection. The revenue to be recovered through an interim rate adjustment shall be incremental to that established in the gas utility's most recent rate case for the area in which the interim rate adjustment is to be implemented, as previously adjusted.

(2) All incremental values for investment, accumulated depreciation, return on investment, depreciation expense, ad valorem taxes, revenue related taxes, and incremental federal income taxes shall be calculated and presented on a full calendar year basis, except as provided in paragraph (3) of this subsection.

(3) The amount by which the gas utility may adjust its rates upward or downward using the interim rate adjustment for each calendar year is based on the difference between the value of the gas utility's invested capital for the preceding calendar year and the value of the invested capital for the calendar year preceding that calendar year; except for a gas utility's first interim rate adjustment application following a rate case and except for amounts that can be collected by the utility under Texas Utilities Code, §104.112. For the first interim rate adjustment following a rate case, the allowed adjustment shall be based on the difference between the gas utility's invested capital at the end of the rate case test year and the invested capital at the end of the calendar year following the end of such test year. The value of the gas utility's invested capital is equal to the original cost of the investment at the time the investment was first dedicated to public use minus the accumulated depreciation related to that investment.

(4) Based on the difference between the values of the investment amounts as determined under paragraphs (2) and (3) of this subsection, a gas utility may adjust its revenue only by the following components:

(A) return on investment;

(B) depreciation expense;

(C) ad valorem taxes;

(D) revenue related taxes; and

(E) federal income taxes.

(5) The factors used to calculate the return on investment, depreciation expense, and incremental federal income tax used to compute the revenues to be collected through the interim rate adjustment must be the same as those established or used in the final order setting rates in the gas utility's most recent rate case for the area in which the interim rate adjustment is to be implemented.

(6) The gas utility shall allocate the revenue to be collected through the interim rate adjustment among the gas utility's customer classes in the same manner as the cost of service was allocated among customer classes in the utility's most recent rate case for the area in which the interim rate adjustment is to be implemented.

(7) The gas utility shall design the interim rate adjustment as either a flat rate to be applied to the monthly customer charge or a volumetric rate to be applied to the initial block usage rate. The interim rate adjustment, whether it is applied to the monthly customer charge or the initial block rate, shall be shown on the customers' monthly billing statements as a surcharge.

(g) Procedure for review. The director shall ensure that applications for interim rate adjustments are reviewed for compliance with the requirements of Texas Utilities Code, §104.301; and this section.

(1) The director may:

(A) suspend the implementation date of an interim rate adjustment in accordance with subsection (a) of this section;

(B) request assistance in reviewing applications for interim rate adjustments from other Commission divisions; and

(C) request additional staff to achieve timely review of interim rate adjustment applications.

(2) Upon completion of the review; the director shall prepare a written recommendation, which shall be provided to the applicant gas utility. The director may recommend:

(A) approval of the application for interim rate adjustment;

(B) approval of some elements of the application to allow only those elements of the interim rate adjustment to take effect without further Commission action; or

(C) rejection of the application for interim rate adjustment.

(3) The director's recommendation shall be submitted to the Commission for decision at a scheduled open meeting [conference].

(4) If the Commission approves an application for interim rate adjustment, the gas utility shall either file the tariff or rate schedule implementing the approved interim rate adjustment or shall, within 30 days of the Commission's action, notify [the Commission's] Gas Services [Division] that the tariff or rate schedule initially filed with the application correctly implements the approved interim rate adjustment.

(h) Annual interim rate adjustments. A gas utility shall recalculate its approved interim rate adjustment annually in accordance with the requirements of this section and shall file an application for an annual adjustment no later than 60 days prior to the one-year anniversary of the proposed implementation date of the previous interim rate adjustment application.

(i) Refunds. All amounts collected from customers under an interim rate adjustment tariff or rate schedule are subject to refund. The issues of refund amounts, if any, [and] whether interest should be applied to [included on] refunded amounts and, if so, the rate of interest, shall be addressed in the rate case a gas utility files or the Commission initiates after the implementation of an interim rate adjustment and shall be the subject [subjects] of specific findings of fact in the Commission's final order setting rates.

(j) Review for reasonableness and prudence. In the rate case a gas utility files or the Commission initiates after the implementation of an interim rate adjustment under this section, any change in investment and related expenses and revenues that have been included in any interim rate adjustment shall be fully subject to review for reasonableness and prudence. Upon issuance of a final order setting rates in this rate case, any change in investment and related expenses and revenues that have been included in any interim rate adjustment shall no longer be subject to review for reasonableness or prudence.

(k) Suspension of interim rate adjustment. A gas utility may file a request to suspend the operation of an interim rate adjustment tariff or rate schedule for any year subject to the following requirements and conditions:

(1) A gas utility's request to suspend operation of an interim rate adjustment tariff or rate schedule shall be filed no later than the date on which the gas utility's annual adjustment of the interim rate adjustment would have been filed.

(2) A gas utility's request shall be in writing and shall state the reasons the suspension is justified.

(3) The director may grant the suspension, provided that the gas utility has made a showing of reasonable justification. If granted, the suspension shall be effective until the next annual anniversary of the implementation date of the interim rate adjustment.

(4) The utility's next annual filing for interim rate adjustment shall be made in accordance with this section.

(l) Rate case filing. A gas utility that implements an interim rate adjustment under this section and does not file a rate case before the fifth anniversary of the date its initial interim rate adjustment became effective shall file a rate case not later than the 180th day after that anniversary.

(m) Reimbursement. A gas utility that implements an interim rate adjustment under this section shall reimburse the Commission for the utility's proportionate share of the Commission's annual costs related to the administration of the interim rate adjustment mechanism. The Commission shall determine the amount of the reimbursement as follows:

(1) After the Commission has finally acted on a gas utility's application for an interim rate adjustment, the director shall estimate such utility's proportionate share of the Commission's annual costs related to the processing of such applications.

(2) In making the estimate required by paragraph (1) of this subsection, the director shall take into account the number of utilities the Commission reasonably expects to file for interim rate adjustments during the fiscal year, and the costs expected to be incurred in processing such applications.

(3) The utility shall reimburse the Commission for the amount so determined within thirty days after receipt of notice of the amount of the reimbursement.

(4) In the event that the utility wishes to contest the amount of the reimbursement determined by the director, it may file a request to have the Commission determine the appropriate amount. In such event, the utility agrees to pay the amount determined by the Commission within thirty days of the determination.

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 January 23, 2018.

TRD-201800246

Haley Cochran

Rules Attorney, Office of General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 475-1295


SUBCHAPTER I. NATURAL GAS PIPELINE COMPETITION

16 TAC §7.7201

The Commission proposes the repeal under Texas Utilities Code Titles 3 and 4, which authorize the Commission to regulate gas utilities, to protect the public interest inherent in the rates and services of gas utilities, and to assure rates, operations, and services that are just and reasonable to the consumers and to the utilities. In addition, Texas Natural Resources Code §117.102 and Texas Utilities Code §121.2025 give the Commission exclusive jurisdiction to determine whether a city's annual charge is authorized; Texas Natural Resources Code §81.052 authorizes the Commission to adopt all necessary rules for governing and regulating persons under the jurisdiction of the Commission; Texas Utilities Code §102.001 gives the Railroad Commission exclusive original jurisdiction over the rates and services of a gas utility distributing natural gas or synthetic natural gas in areas outside a municipality; Texas Utilities Code, §102.151 requires gas utilities to file schedules showing all rates for a gas utility service, product, or commodity offered by the gas utility and each rule or regulation that relates to or affects a rate of the gas utility or a gas utility service, product, or commodity furnished by the gas utility; Texas Utilities Code, §104.001 vests in the Railroad Commission all the authority and power of this state to ensure compliance with the obligations of gas utilities in Texas Utilities Code, Title 3, Subtitle A, and authorizes the Commission to adopt rules for determining the classification of customers and services; and Texas Utilities Code §104.301, allows a utility to file with the Commission a tariff or rate schedule that provides for an interim adjustment in the utility's monthly customer charge or initial block rate to recover the cost of changes in the investment in capital for gas utility service.

Statutory authority: Texas Natural Resources Code §81.052 and §117.102; Texas Utilities Code, Titles 3 and 4, including §§102.001, 102.151, 104.001, 104.301, and 121.2025.

Cross reference to statutes: Texas Natural Resources Code Chapters 81 and 117, and Texas Utilities Code Titles 3 and 4.

Issued in Austin, Texas, on January 23, 2018.

§7.7201.Natural Gas Pipeline Competition Study Advisory Committee.

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 January 23, 2018.

TRD-201800239

Haley Cochran

Rules Attorney, Office of General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 475-1295


PART 3. TEXAS ALCOHOLIC BEVERAGE COMMISSION

CHAPTER 33. LICENSING

SUBCHAPTER A. APPLICATION PROCEDURES

16 TAC §33.11

The Texas Alcoholic Beverage Commission proposes amendments to §33.11, Application and Issuance of Temporary Licenses and Permits.

Section 33.11 sets forth the requirements and procedures for applying for temporary licenses and permits under Chapter 27, Chapter 30, Subchapter B of Chapter 33 and Chapter 72 of the Alcoholic Beverage Code.

The proposed amendments to §33.11 would provide that a graduated expedited processing fee is required for applications for temporary licenses or permits that are submitted fewer than ten business days prior to the event for which the temporary license or permit is sought. The Commission is simultaneously publishing proposed amendments to Rule §33.23 that would set forth the amount of the expedited processing fee that would be required by these proposed amendments to §33.11.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on rural communities. The effect on micro-businesses, small businesses, and persons regulated by the commission is indeterminable because the proposed fee can be completely avoided if the application is submitted at least ten business days prior to the event for which the temporary license or permit is required. To the extent that the proposed amendments would encourage timely filings, it is anticipated that the regulated community as a whole would benefit because limited agency resources devoted to processing applications would not be diverted from timely filed applications to accommodate late filers. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. Although the proposed amendments establish a new fee, they encourage timely filing of applications to avoid imposition of the fee. In the limited circumstances where the new fee would be required it would paid to the agency as part of the application process for certain licenses and permits. However, Alcoholic Beverage Code §5.50(d) requires the entire amount of the fee to be deposited in the general revenue fund. Therefore, the agency would not benefit from an increase in revenue attributable to the new fee. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because late filings would be discouraged and fewer agency resources would need to be diverted from the processing of timely filed applications.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31, which authorizes the agency to prescribe rules necessary to carry out the provisions of the Alcoholic Beverage Code, and §5.50(a), which authorizes the agency to establish by rule reasonable fees for tasks and services performed to carry out the provisions of the Alcoholic Beverage Code, including fees incidental to the issuance of licenses and permits.

The proposed amendments affect §5.31, §5.50, and Chapters 27, 30, 33 and 72 of the Alcoholic Beverage Code, and Government Code §2001.039.

§33.11.Application and Issuance of Temporary Licenses and Permits.

(a) This rule relates to Chapter 27, Chapter 30, Subchapter B of Chapter 33 and Chapter 72 of the Alcoholic Beverage Code.

(b) The application for a temporary license or permit shall be made on forms provided by the commission and shall be signed and sworn to by the applicant. The application shall be accompanied by a cashier's check, money order, or firm check payable to the order of the comptroller in the appropriate amount. The application shall be filed in the field office designated for the county where the temporary event will be held.

(c) An application for a temporary license or permit must be submitted on a form provided by the commission at least ten business days prior to the event date to avoid an expedited processing fee. If the application is submitted less than ten business days prior to the event date, it must be accompanied by the appropriate expedited processing fee set forth in §33.23, in addition to any other applicable surcharges or fees. [To allow for the processing of the application and accompanying documents, the application should be submitted a minimum of ten calendar days prior to the event. The applicant assumes the risk that an application submitted less than ten calendar days may not be processed in time for the event.]

(d) In addition to the application form, other documents related to the event that may be required include a letter from the property owner, sponsorship agreements, promoter agreements, concession agreements, management agreements, diagrams, site maps, local governmental authorization, and any other documents needed to determine qualification for the license or permit under the Alcoholic Beverage Code.

(e) The days and hours of the temporary license or permit must cover the period in which alcoholic beverages will be delivered or stored in addition to the event itself.

(f) A temporary license or permit will not be issued if:

(1) a notice sign (60 day sign) is posted at the location pursuant to Alcoholic Beverage Code §11.391 or §61.381; or

(2) a protest is pending against the location, person, or primary license or permit.

(g) The completion of a responsibilities course provided by the commission may be required prior to the issuance of the temporary license or permit.

(h) The signage requirements for a temporary license or permit are the same as those for a primary license or permit.

(i) The temporary license or permit and approved diagram must be displayed at all times in a conspicuous place on the permitted premises.

(j) All alcoholic beverages being transported shall be accompanied by invoices.

(k) The holder of a primary license or permit may return remaining alcoholic beverage products to the primary licensed location. The holder of a temporary license or permit may distribute remaining product to its organization, or may resell the product if it is beer and if the organization is authorized to do so by Alcoholic Beverage Code §109.54.

(l) The executive director or the executive director's designee may refuse to issue a temporary license or permit if there is reason to believe the issuance of a license or permit is detrimental to the public.

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 January 23, 2018.

TRD-201800249

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §33.12

The Texas Alcoholic Beverage Commission proposes amendments to §33.12, Use of Caterer's Permits and Request for Caterer Certificate.

Section 33.12 sets forth the requirements and procedures related to caterer certificates for the use of caterer's permits.

The proposed amendments to §33.12 would provide that a graduated expedited processing fee is required for applications for caterer certificates that are submitted fewer than ten business days prior to the event to be catered. The Commission is simultaneously publishing proposed amendments to Rule §33.23 that would set forth the amount of the expedited processing fee that would be required by these proposed amendments to §33.12.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on rural communities. The effect on micro-businesses, small businesses, and persons regulated by the commission is indeterminable because the proposed fee can be completely avoided if the application is submitted at least ten business days prior to the catered event. To the extent that the proposed amendments would encourage timely filings, it is anticipated that the regulated community as a whole would benefit because limited agency resources devoted to processing applications would not be diverted from timely filed applications to accommodate late filers. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. Although the proposed amendments establish a new fee, they encourage timely filing of applications to avoid imposition of the fee. In the limited circumstances where the new fee would be required it would paid to the agency as part of the application process for a caterer certificate. However, Alcoholic Beverage Code §5.50(d) requires the entire amount of the fee to be deposited in the general revenue fund. Therefore, the agency would not benefit from an increase in revenue attributable to the new fee. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because late filings would be discouraged and fewer agency resources would need to be diverted from the processing of timely filed applications.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31, which authorizes the agency to prescribe rules necessary to carry out the provisions of the Alcoholic Beverage Code, and §5.50(a), which authorizes the agency to establish by rule reasonable fees for tasks and services performed to carry out the provisions of the Alcoholic Beverage Code, including fees incidental to the issuance of licenses and permits.

The proposed amendments affect §5.31, §5.50, Chapter 31 of the Alcoholic Beverage Code, and Government Code §2001.039.

§33.12.Use of Caterer's Permits and Request for Caterer Certificate.

(a) This rule relates to Chapter 31 of the Alcoholic Beverage Code.

(b) An application for a caterer certificate must be submitted by the holder of a caterer's permit or a designated representative thereof on a form provided by the commission at least ten business days prior to the event date to avoid an expedited processing fee. If the application is submitted less than ten business days prior to the event date, it must be accompanied by the appropriate expedited processing fee set forth in §33.23, in addition to any other applicable surcharges or fees. [The holder of a caterer's permit, or designated representative thereof, should submit a form provided by the commission at least ten calendar days prior to the catered event date. The applicant assumes the risk that an application submitted less than ten calendar days before the event may not be processed in time for the event.] Other documents or agreements involved in the event that may be required include a letter from the owner of the property where the event will be held, sponsorship and/or promoter agreements, diagram or site maps, local governmental authorization, and any other documents or agreements needed to determine qualification under the code.

(c) The issued certificate shall be signed by a representative of the commission and shall be placed in a conspicuous place at the location of the catered function

(d) Use in Connection with Pending Applications. The holder of a caterer's permit may utilize that authority to provide alcoholic beverages for on-premises consumption at a location that has been designated as the licensed premises in a pending application only if the following conditions are met.

(1) There is no pending protest of the pending application.

(2) The commission has received an application for the proposed location and payment of all state fees, surcharges and securities, if applicable, has been submitted.

(3) The commission has performed an initial review for qualification.

(4) The right to use a catering certificate terminates when the commission either issues an order denying the pending application or issues the license or permit.

(5) A notice sign (60 day sign) pursuant to Alcoholic Beverage Code §11.391 or §-61.381 is not posted at the location.

(e) Suspension. No holder of a caterer's permit shall utilize that authority to provide alcoholic beverages at any licensed premises if a permit or license for that location is suspended.

(f) A caterer certificate may not be issued for a period of more than ten days unless the executive director or the executive director's designated representative, on the basis of a case-by-case review of the specific situation, grants additional time.

(g) Ground for Denial. The executive director or the executive director's designated representative may refuse to issue a caterer certificate if there is reason to believe the issuance of a certificate would be detrimental to the public.

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 January 23, 2018.

TRD-201800250

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §33.15

The Texas Alcoholic Beverage Commission proposes amendments to §33.15, Use of Winery Festival Permit.

Section 33.15 sets forth the requirements and procedures related to the use of winery festival permits under Chapter 17 of the Alcoholic Beverage Code.

The proposed amendments to §33.15 would provide that a graduated expedited processing fee is required for applications for winery festival permit certificates that are submitted fewer than 10 business days prior to the event to be catered. The Commission is simultaneously publishing proposed amendments to §33.23 that would set forth the amount of the expedited processing fee that would be required by these proposed amendments to §33.15.

The commission has reviewed the section pursuant to Government Code, §2001.039, and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on rural communities. The effect on micro-businesses, small businesses, and persons regulated by the commission is indeterminable because the proposed fee can be completely avoided if the application is submitted at least 10 business days prior to the event. To the extent that the proposed amendments would encourage timely filings, it is anticipated that the regulated community as a whole would benefit because limited agency resources devoted to processing applications would not be diverted from timely filed applications to accommodate late filers. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. Although the proposed amendments establish a new fee, they encourage timely filing of applications to avoid imposition of the fee. In the limited circumstances where the new fee would be required, it would be paid to the agency as part of the application process for a certificate. However, Alcoholic Beverage Code §5.50(d), requires the entire amount of the fee to be deposited in the general revenue fund. Therefore, the agency would not benefit from an increase in revenue attributable to the new fee. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because late filings would be discouraged and fewer agency resources would need to be diverted from the processing of timely filed applications.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31, which authorizes the agency to prescribe rules necessary to carry out the provisions of the Alcoholic Beverage Code, and §5.50(a), which authorizes the agency to establish by rule reasonable fees for tasks and services performed to carry out the provisions of the Alcoholic Beverage Code, including fees incidental to the issuance of licenses and permits.

The proposed amendments affect §5.31, §5.50, and Chapter 17 of the Alcoholic Beverage Code, and Government Code §2001.039.

§33.15.Use of Winery Festival Permit.

(a) This section relates to Chapter 17 of the Alcoholic Beverage Code. In the absence of specific statutory authority to the contrary, this section regulates the activities of holders of Winery Permits who also hold Winery Festival Permits.

(b) Applications for Winery Festival Permits under Chapter 17 of the Alcoholic Beverage Code, and the expiration, denial, cancellation and suspension of such applications and permits shall be in accordance with the statutes, rules and commission policies governing applications, expirations, denials, cancellations and suspensions of permits generally.

(c) No person may sell wine, or possess wine with the intent to sell it, at a farmer's market, at a civic or wine festival, or at a similar civic or wine celebration or event, without first having obtained from the commission a Winery Festival Permit Certificate authorizing sales at the event. For purposes of this section, a "celebration" is a special cultural or charitable event of a limited and specified duration that is organized for, and open to, the public. Each market, festival, celebration or other event requires a separate certificate, but a certificate may be valid for up to four consecutive days at a single location. A Winery Festival Permit Certificate may only be issued to the holder of a Winery Festival Permit.

(d) The holder of a Winery Festival Permit, or a [his] designated representative thereof, must apply for a Wine Festival Permit Certificate on a form provided by the commission. The application must be submitted at least 10 business days prior to the event date to avoid an expedited processing fee. If the application is submitted less than 10 business days prior to the event date, it must be accompanied by the appropriate expedited processing fee set forth in §33.23. [The application must be submitted prior to the event for which the certificate is sought. The application should be submitted at least three business days prior to the event to allow the commission time to process it.] The application must be submitted to the commission's district office having jurisdiction over the location of the event for which the certificate is sought. The application must include the following information:

(1) the applicant's Winery Permit number;

(2) the trade name of the Winery Permit holder associated with the Winery Festival Permit;

(3) the location of the event where the Winery Festival Permit Certificate will be used;

(4) the date and time of the event where the Winery Festival Permit Certificate will be used; and

(5) a brief description of the event where the Winery Festival Permit Certificate will be used.

(e) The commission shall issue a certificate if the application is accepted. The certificate and a copy of the application must be displayed in a conspicuous place at the location of the event at all times during the event.

(f) The executive director or a [administrator or his] designated representative may refuse to accept an application for a Winery Festival Permit Certificate if:

(1) the application is incomplete or inaccurate;

(2) the applicant does not qualify under subsection (c) of this section;

(3) the event does not qualify under subsection (c) of this section; or

(4) there are reasonable grounds to believe that issuance of the certificate will:

(A) result in a violation of the Alcoholic Beverage Code or the rules of the commission; or

(B) is otherwise detrimental to the public.

(g) The grounds for refusing to accept an application for a Winery Festival Permit Certificate shall be communicated in writing to the applicant as soon as is reasonably practical.

(h) All wine sold or possessed with the intention to sell at an event held in an area where the sale of wine has not been authorized by a local option election must comply with the terms of §16.011 of the Alcoholic Beverage Code.

(i) If a Winery Festival Permit Certificate is issued in error, the commission may rescind the certificate.

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 January 23, 2018.

TRD-201800251

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


SUBCHAPTER B. LICENSE AND PERMIT SURCHARGES

16 TAC §33.23

The Texas Alcoholic Beverage Commission proposes amendments to Rule §33.23, Alcoholic Beverage Permit, License and Certificate Surcharges.

Rule §33.23 sets forth the surcharges and fees that the commission has established under the authority of Alcoholic Beverage Code §5.50.

Proposed amendments to §33.23 would set the amount of an expedited processing fee for applications for temporary licenses and permits, caterer certificates, and winery festival permit certificates that are submitted fewer than ten business days prior to the event for which the license, permit or certificate is sought. The Commission is simultaneously publishing proposed amendments to 16 Tex. Admin. Code §§33.11, 33.12 and 33.15 which would set forth the conditions under which payment of an expedited processing fee would be required. The proposed amendments to §33.23 would also change the title of the section to reflect the inclusion of the proposed new expedited processing fee.

In addition, House Bill No. 4042, 85th Regular Session of the Texas Legislature, amended Chapter 53 of the Alcoholic Beverage Code, which formerly authorized Temporary Charitable Auction Permits to allow the auction of alcoholic beverages by certain charities under certain conditions. House Bill No. 4042 expanded the category of persons authorized to conduct such auctions. It accordingly removed the word "Charitable" from the tile of the permit and from the title of the chapter. It also included a provision removing the commission's authority to assess a surcharge for the new Temporary Auction Permit. The proposed amendments to Rule §33.23 conform the rule to House Bill No. 4042 by deleting the reference in subsection (c) to a surcharge for a Temporary Charitable Auction Permit.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. The fiscal note to House Bill No. 4042 indicates that the legislative elimination of the surcharge for temporary auction permits would have no significant fiscal impact on state government. The imposition of an expedited processing fee in proposed new subsection (i) of Rule §33.23 is not expected to have significant fiscal impact on state government because the commission anticipates that most applicants will avoid the fee by filing their applications for the affected licenses, permits and certificates at least ten business days prior to the event for which they are sought.

The proposed amendments will have no fiscal or regulatory impact on rural communities. The effect of the proposed expedited processing fee on micro-businesses, small businesses, and persons regulated by the commission is indeterminable because the proposed fee can be completely avoided if the application is submitted at least ten business days prior to the event. To the extent that the proposed amendments would encourage timely filings, it is anticipated that the regulated community as a whole would benefit because limited agency resources devoted to processing applications would not be diverted from timely filed applications to accommodate late filers. There is no anticipated negative impact on local employment. The elimination of surcharges for temporary auction permits will benefit any micro-businesses, small businesses, and persons regulated by the commission who qualify to hold such a permit.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. Although the proposed amendments establish a new fee, they encourage timely filing of applications to avoid imposition of the fee. In the limited circumstances where the new fee would be required it would paid to the agency as part of the application process for a certificate. However, Alcoholic Beverage Code §5.50(d) requires the entire amount of the fee to be deposited in the general revenue fund. Therefore, the agency would not benefit from an increase in revenue attributable to the new fee. Elimination of the surcharge obviously decreases the amount of money paid to the commission. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The decrease in the number of individuals subject to the temporary auction permit surcharge were made by the legislature in House Bill No. 4042 and are simply reflected in the proposed amendments. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because late filings would be discouraged and fewer agency resources would need to be diverted from the processing of timely filed applications. In addition, the rule will accurately reflect the legislature's decision to eliminate surcharges for temporary auction permits.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31, which authorizes the agency to prescribe rules necessary to carry out the provisions of the Alcoholic Beverage Code, and 5.50(a), which authorizes the agency to establish by rule reasonable fees for tasks and services performed to carry out the provisions of the Alcoholic Beverage Code, including fees incidental to the issuance of licenses and permits.

The proposed amendments affect §5.31, §5.50, and Chapter 53 of the Alcoholic Beverage Code, and Government Code §2001.039.

§33.23.Alcoholic Beverage Permit, License and Certificate Surcharges, and Expedited Processing Fees for Caterer Certificates, Temporary Licenses or Permits, and Certificates for Use of Winery Festival Permits.

(a) This section relates to Alcoholic Beverage Code §5.50.

(b) A biennial surcharge on original or renewal permit, license and certificate fees is levied against permit, license and certificate holders as follows:

Figure: 16 TAC §33.23(b) (No change.)

(c) A surcharge on temporary permit and license fees is levied against permit and license holders as follows:

Figure: 16 TAC §33.23(c) (.pdf)

[Figure: 16 TAC §33.23(c)]

(d) An organization that holds a private club exemption certificate permit under Alcoholic Beverage Code §32.11 is exempt from the requirement to pay a surcharge.

(e) Each surcharge imposed by this section is for the term of the original or renewal permit, license or certificate to which the surcharge applies.

(f) The permit, license or certificate surcharge is due and payable at the same time and in the same place and manner as the original or renewal permit, license or certificate fee to which the surcharge applies.

(g) Failure or refusal to timely pay the permit, license, or certificate surcharge is considered the same as failure to timely pay the original or renewal permit, license or certificate fee, and the same penalties apply.

(h) The fees and surcharges for a permit or license may not be prorated or refunded.

(i) Expedited Processing Fee for Caterer Certificates, Temporary Licenses or Permits, and Certificates for Use of Winery Festival Permits. This section applies to applications described in §§33.11, 33.12 and 33.15 of this title. The expedited processing fee prescribed in this section is in addition to any other applicable surcharges or fees.

(1) An expedited processing fee of $300 is required for applications submitted nine to seven business days before the event for which the certificate, license or permit is sought.

(2) An expedited processing fee of $500 is required for applications submitted six to four business days before the event for which the certificate, license or permit is sought.

(3) An expedited processing fee of $900 is required for applications submitted three to one business days before the event for which the certificate, license or permit is sought.

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 January 26, 2018.

TRD-201800339

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


CHAPTER 50. ALCOHOLIC BEVERAGE SELLER SERVER TRAINING

SUBCHAPTER A. GENERAL AND ADMINISTRATIVE PROVISIONS

16 TAC §50.2

The Texas Alcoholic Beverage Commission proposes amendments to §50.2, Definitions.

Rule §50.2 provides the definitions used throughout Chapter 50 relating to alcoholic beverage seller server training.

The proposed amendments to rule §50.2 would delete the current definition in paragraph (2) of branch seller server school certificate and clarify that there are actually three types of such certificates, the branch classroom-based seller server school certificate, the branch mobile application seller server school certificate, and the branch internet-based seller server school certificate. The proposed amendments also modify the definition of internet-based seller server school certificate in paragraph (9) to change the reference to "the internet or intranet" to "a delivery platform with web-based functionality".

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because seller server training based on mobile applications will be recognized.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.2.Definitions.

Words used in this chapter have their common and ordinary meaning unless they are given a specific meaning in the code or are defined in this section.

(1) Applicant--The individual and/or each owner, officer, director, manager or trainer of a legal entity who applies to the commission for a certificate under this chapter.

(2) Branch Seller Server School Certificate--[A certificate issued by the commission to the holder of a Primary Seller Server School Certificate granting the same authority as the Primary Certificate but at a site that is designated on the Branch Certificate and that is different from that designated on the Primary Certificate.]

(A) Branch Classroom-Based Seller Server School Certificate--A certificate issued by the commission to the holder of a Primary Seller Server School Certificate granting the same authority as the Primary Certificate but at a site that is designated on the Branch Certificate and that is different from the site designated on the Primary Certificate;

(B) Branch Mobile Application Seller Server School Certificate--A certificate issued by the commission to the holder of a Primary Internet-Based Seller Server School Certificate that allows for the approved course content to be completed through the internet or through the mobile application, provided that all testing must be completed through the internet and that tests may not be stored on the mobile device or in the mobile application; or

(C) Branch Internet-Based Seller Server School Certificate--A certificate issued by the commission to the holder of a Primary Internet-Based Seller Server School Certificate that allows for the approved course content to have an alternate domain location on the internet, provided that all course content and testing must be completed online,

(3) Break--An interruption in a course of instruction occurring after the lesson introduction and before the lesson summation.

(4) Classroom-Based Seller Server School Certificate--A Primary or Branch Seller Server School Certificate issued by the commission under this chapter to a school that:

(A) has authority under this chapter to offer instruction and issue seller server certificates; and

(B) does not qualify for either an In-House Seller Server School Certificate or an Internet-Based Seller Server School Certificate.

(5) Commission--Approved Personal Identification Number--A social security number, an individual taxpayer identification number (ITIN), an alien registration number ("A" number), or the IV case number from a machine-readable immigrant visa (MRIV).

(6) Course of Instruction--The mandatory curriculum and the optional curriculum used to teach a seller server certificate course.

(7) Incomplete application--An application that fails to include all facts, disclosures, documents, statements, authorizations, signatures and fees required by this chapter or requested by the commission for issuance of a certificate.

(8) In-House Seller Server School Certificate--A Primary or Branch Seller Server School Certificate issued by the commission under this chapter to a school sponsored or operated by a retail permittee or licensee and that has authority under this chapter to offer instruction on either a classroom basis or a computer basis and to issue seller server certificates.

(9) Internet-Based Seller Server School Certificate--A Primary or Branch Seller Server School Certificate issued by the commission under this chapter to a school offering an interactive course on a delivery platform with web-based functionality [the internet or intranet] that:

(A) has authority under this chapter to offer instruction and issue seller server certificates; and

(B) does not qualify for either a Classroom-Based Seller Server School Certificate or an In-House Seller Server School Certificate.

(10) Mandatory Curriculum--The curriculum provided by the commission that must be used by a certified school teaching a seller server certificate course.

(11) Optional Curriculum--Any curriculum not provided by the commission that is used by a school to teach a seller server certificate course.

(12) Primary Seller Server School Certificate--A certificate issued by the commission under this chapter granting authority to:

(A) offer instruction and maintain records at the school's principal site designated on the primary certificate; and

(B) issue seller server certificates.

(13) School--The holder of a Primary or Branch Seller Server School Certificate issued by the commission.

(14) Seller Server Certificate--A certificate issued to an individual who completes a course of instruction offered by a school and who passes the Commission Standard Competence Test.

(15) Seller Server Certificate Course--A class providing instruction in the sale, service, dispensing, delivery and consumption of alcoholic beverages to or by persons in private clubs, minors or intoxicated persons, and that is designed to enable students to pass the Commission Standard Competence Test and receive a seller server certificate.

(16) Trainer--An individual who holds a Seller Server Trainer Certificate issued under this chapter.

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 January 23, 2018.

TRD-201800259

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


SUBCHAPTER B. MANDATORY CURRICULUM AND COURSE OF INSTRUCTION

16 TAC §50.5

The Texas Alcoholic Beverage Commission proposes amendments to §50.5, Commission Approval of Internet-Based Course of Instruction.

Section 50.5 addresses internet-based courses of seller server instruction.

The proposed amendments to rule §50.5 would clarify that delivery platforms for mobile application seller server training must be made available to the commission.

The commission has reviewed the section pursuant to Government Code, §2001.039, and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the commission will be able to review seller server training courses offered by mobile applications.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m., in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.5.Commission Approval of Internet-Based Course of Instruction.

(a) All internet-based training materials and instruction must be submitted and approved by the commission prior to use.

(1) Printed screenshots meeting the language comprehension levels required by this section and sequenced and presented as a complete course of instruction must be provided to the commission.

(2) Access to the school's web address, [and ] secured portal, and delivery platforms must be made available to the commission and the entire course of instruction offered to students must be provided free of charge to the commission.

(b) An internet-based course of instruction shall be presented at a 6th grade fluency level of 180 words per minute and must be equivalent to 120 minutes of time.

(c) An internet-based school may provide optional instruction in addition to the mandatory curriculum upon approval by the commission if:

(1) a request for change is submitted to the commission, with all alterations of the mandatory curriculum and all optional materials clearly identified;

(2) the entire proposed course of instruction is submitted with the request, and, if the proposed sequence differs from the mandatory curriculum, a list is included showing where in the proposed sequence each topic in the mandatory curriculum will be presented; and

(3) the changes to the sequence and the optional material will not alter the scope or effectiveness of the mandatory curriculum.

(d) An internet-based school must file a revised course of instruction implementing a change to the mandatory curriculum within 30 days after receiving notice of the change.

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 January 23, 2018.

TRD-201800260

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §50.7

The Texas Alcoholic Beverage Commission proposes amendments to §50.7, Management of Internet-Based Course of Instruction.

Section 50.7 addresses requirements for internet-based seller server courses.

The proposed amendments to §50.7 clarify the requirements for how internet-based courses provide support for technical issues and content-based questions.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because students taking internet-based seller server training will understand how they can get their questions answered.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.7.Management of Internet-Based Course of Instruction.

(a) An internet-based school must verify a student's identity.

(1) To verify the student's identity, the school must ask each student a minimum of ten personal validation questions. Students may have no more than 60 seconds to respond to a personal validation question. If a student answers more than 30% of the validation questions incorrectly, the student must be dropped from the course.

(2) In lieu of the validation method required in paragraph (1) of this subsection, a school may use another validation method that has been approved by the commission upon request by that school.

(b) A student may be allowed to reenter a course through the use of a username and password, or by other means approved by the commission that are as effective as password verification.

(c) An internet-based school may present the course of instruction on a unit basis that is approved by the commission.

(1) At the conclusion of a unit, the student must answer five questions on the material in that unit. A student may not proceed to the next unit if the student:

(A) answers more than one question incorrectly; or

(B) has not viewed all of the multimedia components of a unit.

(2) Questions on a unit test must be of a difficulty level that a student cannot correctly answer them without having viewed the material in that unit. The questions on a unit test may be short answer, multiple choice, or a combination of those methods.

(3) If a student incorrectly answers more than one question on a unit test, the student must restart and complete that unit again before being retested.

(4) During a unit retest, the student must be asked questions that are different from those he was previously asked.

(5) As long as different questions are asked and the student has restarted and completed the unit after each failed test, a school may decide how many times the student may be retested on a unit.

(d) A student must correctly answer at least 70% of the questions asked on the Commission Standard Competence Test administered to him to be eligible to receive a Seller Server Certificate.

(e) A student who does not correctly answer 70% of the questions asked on the Commission Standard Competence Test administered to him may be immediately retested once. If the student does not correctly answer 70% of the questions asked on the retest, the student must repeat the course in full.

(f) A student must have adequate access to a help desk to resolve technical issues and the hours must be posted for the student to review before registering for the course. If a request for support is made outside of the posted time period, technical support must contact the requestor and attempt to resolve the issue during the next posted time period that follows the request. Access to technical assistance may be provided by means of: [without delaying the flow of instruction.]

(1) email;

(2) direct messaging; or

(3) phone with active voicemail.

(g) Questions by a student about the content of the course of instruction must be answered by the holder of a seller server trainer certificate.

(1) The school must make available to students the days and times a Seller Server Trainer will be available to answer content related questions prior to registering for the course; and

(2) Seller Server Trainers must be available a reasonable amount of time weekly to provide support to students.

(h) An internet-based school may not allow any advertisements to appear during the course of instruction. Advertisements that appear on the website when the course of instruction is not being presented must follow established marketing practices.

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 January 23, 2018.

TRD-201800261

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


SUBCHAPTER C. SELLER SERVER SCHOOL CERTIFICATES AND REQUIREMENTS

16 TAC §50.9

The Texas Alcoholic Beverage Commission proposes amendments to §50.9, Issuance and Control by Schools of Seller Server Certificates.

Rule §50.9 addresses the requirements for how seller server schools issue seller server certificates to students.

The proposed amendments to rule §50.9 would make a reference in subsection (c)(2)(C) gender neutral.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 TAC §11.1(a)(1), with reference to 34 TAC §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the language of the rule will be gender neutral.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §6.14, and Government Code §2001.039.

§50.9.Issuance and Control by Schools of Seller Server Certificates.

(a) Order and payment requirements for schools.

(1) All seller server certificate numbers must be ordered and paid for in advance using the order forms and payment methods approved by the commission.

(A) Certificate numbers cost $2.00 each.

(B) Certificate numbers must be purchased in minimal lots of 60.

(C) The commission will provide each certified school with a certificate template that the school can use to print the seller server certificates it issues to students. A school may also hire a commission-approved vendor to print the seller server certificates.

(2) As a condition for ordering additional certificate numbers, a school must:

(A) have sessions currently scheduled;

(B) submit the session schedules to the commission; and

(C) account for all previously issued certificate numbers.

(3) A certificate order for a session scheduled to occur within five business days from the date of the order must be submitted using expedited mail or delivery service provider. If the certificate numbers cannot be received electronically by the school, the order must also include a preprinted and prepaid return delivery package or label. The certificate numbers will be delivered electronically to the school through the valid e-mail address provided on the school's application, or using the preprinted and prepaid delivery package or label provided with the order.

(4) No session may be conducted unless the school:

(A) has sufficient certificate numbers available to issue a certificate to each individual attending the session at the time, date and location of the scheduled session;

(B) can print and issue a certificate to each individual attending the session at the time, date, and location where the session is conducted; and

(C) limits the number of individuals attending a session to the number of certificate numbers available at the location on the date and time the session is conducted.

(5) If a school had sufficient certificate numbers to issue to each student in a session, but one or more certificate numbers had to be voided so that a student who should have received a certificate did not receive one on the date of the session, the school must, within five calendar days of the session, submit a written statement to the commission explaining why sufficient certificate numbers were not available and listing the voided certificate numbers.

(b) Requirements for classroom-based or in-house schools issuing seller server certificate to students.

(1) If a student satisfies the requirements for a certificate, the school must issue the student the certificate on the date the student satisfied those requirements and at the location of that session.

(2) If a school fails to comply with the requirements of paragraph (1) of this subsection, the school, at the conclusion of the session where the student satisfied the requirements for a certificate, and on the date and location of that session, must:

(A) provide the student with a written receipt showing the name of the school, the name of the instructor, the instructor's certificate number, the amounts paid by the student, and the date, time and location of the session;

(B) provide the student written notice containing the commission's internet address and informing the student that the student [he] may file a complaint with the commission;

(C) notify the commission in writing, or on forms provided by the commission for internet notification, of the information required to be provided to the student in subparagraph (A) of this paragraph; and

(D) issue the student a certificate within 10 calendar days from the date of the session where the student satisfied the requirements for a certificate.

(c) Requirements for internet-based schools issuing seller server certificate to students.

(1) If a student satisfies the requirements for a certificate, the school must electronically issue the student the certificate within 24 hours of the time the student satisfied those requirements.

(2) If a school fails to comply with the requirements of paragraph (1) of this subsection, the school, within 24 hours of the conclusion of the session where the student satisfied the requirements for a certificate, must electronically provide the student:

(A) a receipt showing the name of the school, the name of the instructor, the instructor's certificate number, the amounts paid by the student, and the date and time of the session;

(B) an explanation of why the certificate is not being issued; and

(C) the commission's internet address and notice that the student [he] may file a complaint with the commission.

(3) If a school fails to comply with the requirements of paragraph (1) of this subsection, the school, within 24 hours of the conclusion of the session where the student satisfied the requirements for a certificate, must electronically provide the commission the information provided to the student under paragraph (2) of this subsection.

(4) If a school fails to comply with the requirements of paragraph (1) of this subsection, the school must issue the student a certificate within 10 calendar days from the date of the session where the student satisfied the requirements for a certificate.

(d) A school that fails to comply with the requirements of subsection (b) or (c) of this section commits a separate violation for each student affected by that failure.

(e) The commission may refuse to issue certificates to a school:

(1) if the commission has a reasonable basis to believe the certificates have been misused or abused or that inadequate security or control may result in the misuse or abuse of certificates;

(2) if the school fails to provide information and records within three business days of a request by the commission; or

(3) if the school has failed to create or maintain information and records required by the commission.

(f) A school may not transfer a certificate to another school, even if the schools are affiliated branch or primary schools.

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 January 23, 2018.

TRD-201800262

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §50.10

The Texas Alcoholic Beverage Commission proposes amendments to §50.10, concerning Requirements for Records, Reports and Notices.

Section 50.10 addresses requirements for record keeping and issuing reports and notices that apply to seller server training schools.

The proposed amendments to §50.10 would add language clarifying that seller server training schools must restrict access to ensure that the test is not available to students or the public both before and after it is administered. The new requirement is necessary to ensure the security of testing materials for classes offered by mobile applications.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the security of testing materials will be preserved.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.10.Requirements for Records, Reports and Notices.

(a) A school must electronically notify the commission at least three business days in advance of each scheduled session. The notice must include the date, time and location of the session and whether the session will have continuous instruction or be presented as units. The commission may waive the three-day requirement on request for good cause shown on an individual basis, but in no case may a session be taught without prior notification to the commission.

(b) Reports of cancelled classes.

(1) A school must electronically notify the commission of the cancellation of a session prior to the scheduled date of the session unless the cancellation cannot reasonably have been anticipated before that date.

(2) When a cancellation cannot reasonably have been anticipated prior to the scheduled date of the session, the school must electronically notify the commission of the cancellation not later than the next business day. The notice must provide an explanation of the circumstances justifying the late notice.

(c) A school shall maintain the Commission Standard Competence Test in a secure manner and in a secure location at all times and restrict access to ensure that the test is not available to students or the public before or after it is administered. A school must electronically notify the commission of any breach of security involving the test within 24 hours of discovering the breach.

(d) Access to commission's portal to file reports and notices.

(1) Each certified school is provided with information and security access to the commission's secure portal when an original certificate or renewal is issued. Access to the secure portal may be terminated without notice if a security breach or malicious virus is detected.

(2) The commission may require or perform periodic audits to ensure secure portals are used for authorized purposes.

(3) A breach of security or misuse of the secure portal will result in immediate termination of access pending investigation.

(e) Reports of seller training.

(1) For each session taught, a school shall electronically file a report of seller training not later than 14 calendar days after the date the class was held.

(2) Each report of seller training shall include all students who successfully completed the session and received a passing grade on the commission standard competence course.

(3) Each report of seller training shall contain each student's name, commission-approved personal identification number, date of birth, test score and certificate number.

(4) The report of seller training must be personally signed by the certified trainer who actually taught the session.

(5) The trainer shall personally verify that on the date indicated each student included in the report satisfactorily completed the session and received a passing grade on the Commission Standard Competence Test.

(f) Required records.

(1) Each school must maintain, at the school's primary site or at a designated branch site, the reports and notices required in this section.

(2) For each student attending a session, the school must maintain the information required by this paragraph.

(A) The student's first and last names and middle initial.

(B) The student's mailing address.

(C) The student's e-mail address, if available.

(D) Any information required to assign the student a commission-approved personal identification number.

(E) The student's score on the Commission Standard Competence Test.

(3) All records, reports and documents required in this section shall be maintained for four years.

(4) Records, reports and documents required by this section may be maintained electronically in a methodical and organized manner.

(5) All records, reports and documents shall be made available to the commission upon request. Failure to provide the material within five business days of the request is cause for cancellation or suspension of the school's certificate.

(6) Failure to submit any record, report or notice to the commission as and when required is cause for cancellation or suspension of the school's certificate.

(7) Significant and/or repeated errors in submitting information to the commission are cause for cancellation or suspension of the school's certificate.

(8) If a school ceases operation, all records and reports shall be provided to the commission.

(9) The commission may monitor sessions unannounced.

(10) The commission may conduct audits unannounced.

(11) An internet-based school must maintain all contracts it has to receive traffic that has been redirected from another domain.

(g) The executive director [administrator] may develop standard practices relating to the implementation of this chapter. The standard practices will provide guidance to schools and individuals affected by this chapter regarding technical details required to efficiently and effectively implement certified schools and will be posted on the commission's website. The standard practices may not conflict with or alter the provisions of this chapter.

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 January 23, 2018.

TRD-201800264

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §50.11

The Texas Alcoholic Beverage Commission proposes amendments to §50.11, Grounds for Refusing to Process Application.

Rule §50.11 addresses grounds for refusal of seller server school or trainer certificates.

The proposed amendments to rule §50.11 would add additional grounds for refusal.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the public will be protected from schools and trainers who are not qualified to offer seller server training courses.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.11.Grounds for Refusing to Process Application.

(a) The commission may refuse to process an original or renewal application for a school certificate under this chapter, if the applicant or any individual who must submit a personal history sheet with the application:

(1) does not meet the minimum qualifications;

(2) fails to submit a complete application;

(3) fails to pay the required fees;

(4) falsifies, misrepresents, or fails to provide or verify a material fact, disclosure or document required by the commission on the application;

(5) fails to provide or produce information requested by the commission, and the time for providing the information has passed; [or]

(6) had a final disposition of a felony conviction within five years of the date of application;[.]

(7) conducts business in a manner that warrants the cancellation or suspension of the certificate for 24 months following the cancelation or suspension;

(8) conducted seller server training courses and allowed students to participate in a seller sever training program with the expectation that they would receive a valid commission authorized certificate while the primary seller server certificate was under suspension; or

(9) is the owner of the primary seller server certificate and is residentially domiciled with a person whose primary seller server certificate was cancelled for cause within the 12-month period preceding the owner's application.

(b) The commission may refuse to process an original or renewal application for a seller server trainer certificate under this chapter without a hearing, if the applicant:

(1) does not meet the minimum qualifications;

(2) fails to submit a complete application;

(3) fails to pay the required fees;

(4) falsifies, misrepresents, or fails to provide or verify a material fact, disclosure or document required by the commission on the application;

(5) fails to provide or produce information requested by the commission, and the time for providing the information has passed; [or]

(6) had a final disposition of a felony conviction within five years of the date of application;[.]

(7) conducts business in a manner that warrants the cancellation or suspension of the certificate for 24 months following the cancelation or suspension; or

(8) used a trainer who conducted seller server training courses and allowed students to participate in a seller sever training program with the expectation that they would receive a valid commission authorized certificate while the primary seller server certificate was under suspension.

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 January 24, 2018.

TRD-201800268

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §50.13

The Texas Alcoholic Beverage Commission proposes amendments to §50.13, Grounds for Suspension or Cancellation of School's Certificate.

Rule §50.13 addresses the grounds for suspension or cancellation of a seller server training school's certificate.

The proposed amendments to rule §50.13 would make a purely stylistic change in subsection (d)(3)'s reference to the Texas Alcoholic Beverage Commission.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments do not create a new regulation, as that term is defined in 34 Texas Administrative Code §11.1(a)(1), with reference to 34 Texas Administrative Code §11.1(a)(2)(B). The proposed amendments do not expand, limit, or repeal an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the Commission's rules will be internally consistent.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §§5.31 and 106.14.

The proposed amendments affect Alcoholic Beverage Code §§5.31 and 106.14, and Government Code §2001.039.

§50.13.Grounds for Suspension or Cancellation of School's Certificate.

(a) The commission, after notice and hearing, may suspend or cancel a school's certificate if the school, or a trainer employed by or under contract to the school:

(1) fails to verify an individual's qualifications to receive a certificate;

(2) signs a certificate when the trainer did not personally instruct the student;

(3) fails to follow or provide instruction required by the mandatory curriculum;

(4) provides fewer than the required number of hours of instruction;

(5) issues more than 50 seller server certificates for a single session, unless the school has an internet-based seller server school certificate;

(6) issues a seller server certificate or provides instruction on a date when the school's or instructor's certification is expired, suspended or cancelled;

(7) fails to administer or require a student to take and/or make a passing score on the Commission Standard Competence Test before issuing a seller server certificate to the student;

(8) uses, discloses, or sells personal or financial information obtained from a student or the commission for a purpose or in a manner not authorized by this chapter;

(9) falsifies, alters or destroys a record required by the commission, regardless of whether there was intent to deceive the commission or another;

(10) violates any section of this chapter or the standard practices of the commission that, in the opinion of the commission, warrants suspension or cancellation;

(11) has engaged in an ongoing course of conduct or activities that undermine the purpose and intent of this chapter;

(12) fails to control, monitor, and supervise instructors and classroom instruction to prevent a violation of law or the requirements of this chapter;

(13) fails to implement control and security measures to protect personal or financial information obtained from a student or the commission from accidental, intentional, or malicious use or disclosure;

(14) allows a session to be taught by someone who does not hold current trainer certification;

(15) falsifies, makes a material misstatement, or fails to disclose required information on any document or record required by this chapter;

(16) counterfeits a certificate issued under this chapter; or

(17) violates any provision of this chapter.

(b) The commission, after notice and hearing, may suspend or cancel a school's certificate if a trainer employed by or under contract to the school, a responsible person assigned by the school to a session, the owner or governing body of a school, or the administration of a college or university has failed to supervise or exercise control of its employees or facilities, and the failure has resulted in actual harm or increased risk to the health or safety of students or the public.

(c) The commission, after notice and hearing, may suspend or cancel a school's certificate if the quality of instruction falls below minimum commission standards as determined by the commission through:

(1) direct observation of instruction by commission auditors or agents;

(2) consistent failure of the school to impart basic knowledge and understanding to students, as measured by student failures, student violations, or student surveys or reports; or

(3) complaints received from any person.

(d) The commission, after notice and hearing, may suspend or cancel a school's certificate if the school engages in any of these acts or practices:

(1) presenting the course of instruction as its own when it is not;

(2) causing confusion or misunderstanding as to the source, sponsorship, approval or certification of the course of instruction or services provided by a school or instructor;

(3) causing confusion or misunderstanding as the affiliation, connection or association with, or certification by, the commission [TABC] or a school certified by the commission [TABC];

(4) representing that a school or course of instruction is sponsored, approved, certified or accredited by the commission when it is not;

(5) representing that an individual is affiliated with, employed by or represents a school certified by the commission when the individual is not;

(6) representing that a course of instruction has been approved by the commission when it has not; or

(7) advertising services or other courses of instruction during the time allocated for instruction or completion of a course of instruction approved by 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 January 24, 2018.

TRD-201800270

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §50.17

The Texas Alcoholic Beverage Commission proposes amendments to §50.17, Application for Primary Internet-Based Seller Server School Certificate.

Section 50.17 addresses requirements for applications for primary internet-based seller server school certificates.

The proposed amendments to §50.17 would clarify when internet-based seller server schools are required to obtain branch school certificates when offering mobile application based courses.

The commission has reviewed the section pursuant to Government Code, §2001.039, and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the requirements for offering mobile application based courses will be clarified.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m., in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.17.Application for Primary Internet-Based Seller Server School Certificate.

(a) An applicant for an original or renewal primary internet-based seller server school certificate must complete all sections of the application on forms provided by the commission.

(b) An applicant for an original certificate or change of ownership for an internet-based seller server school must disclose all individual owners, individuals and legal entities having an ownership interest, and all officers, directors, managers, and instructors.

(1) A legal entity must provide its formation and registration documents and must be authorized to transact business in this state.

(2) A personal history sheet must be completed and submitted with the application for each individual disclosed on the application.

(3) An individual required to submit a personal history sheet must at the same time submit an authorization for a criminal history background check.

(4) Additional information may be required by the commission to verify ownership or qualifications of the applicant.

(c) The applicant must sign and verify that:

(1) the applicant has authority to act on behalf of all owners;

(2) the applicant has personally completed or reviewed the application and has personal knowledge of and is responsible for its content;

(3) all parts of the application that apply are complete;

(4) each fact, disclosure, and statement made in the application is true and correct at the time the application is submitted;

(5) the applicant acknowledges that an application for a certificate is a government document and is subject to verification by the commission; and

(6) the applicant acknowledges that providing false or misleading information or omitting a material fact may result in the refusal of the application, cancellation of a certificate, or criminal prosecution.

(d) Incomplete applications or applications submitted without required fees will neither be accepted for processing nor returned to the applicant.

(e) An applicant must:

(1) keep an exact copy of the application submitted to the commission; and

(2) complete and correct any deficiencies within 10 [ten] business days after being notified of the deficiency.

(f) An applicant for an internet-based seller server school certificate must verify that the security measures implemented and maintained by the school meet state and federal standards for the transmission and protection of personal identification information and financial information of individuals accessing the website.

(g) The presentation and course progress platform used by an internet-based seller server school must be reviewed and approved by the commission to ensure:

(1) the course of instruction contains all topics required by the mandatory curriculum; and

(2) each topic must be completed before the next topic may be accessed.

(h) An applicant for a primary internet-based training school certificate must designate a primary domain and must list:

(1) all domains the school uses to provide any course of instruction that includes the mandatory curriculum;

(2) all domains under common ownership with the school that redirect students to the primary designated domain or to any other domain under common ownership with the designated primary domain; and

(3) all domains, whether or not under common ownership, with which the school has a contractual relationship to redirect students to the designated primary domain or to any domain under common ownership.

(i) The applicant must agree to update the list required by subsection (h) of this section within 24 hours of a change during the term of the certificate and failure to keep the list current is grounds for cancellation of the primary internet-based training school certificate.

(j) A primary internet-based training school must obtain a branch internet-based training school certificate for each domain that is under common ownership with the designated primary domain but that offers a different course of instruction from that offered at the designated primary domain.

(k) A primary internet-based training school is not required to obtain a branch internet-based or branch mobile application training school certificate for a domain that is under common ownership with the designated primary domain but that either merely redirects students to the designated primary domain or to another domain that is under common ownership with the primary domain.

(l) A primary internet-based training school is required to obtain:

(1) a branch mobile application training school certificate for each delivery platform that is under common ownership with the designated primary internet based program. This includes, but is not limited to, programs designed for specific mobile devices or custom programming as a delivery platform for the mandatory curriculum and internet based testing; or

(2) a branch internet-based training school certificate for each delivery domain that is under common ownership with the designated primary internet-based program but provides a different course of instruction than that which is approved on the designated primary domain.

(m) [(l)] A primary internet-based training school must require that before any domain redirects a student to the designated primary domain or to any domain under common ownership with it, and before charging the student, the redirecting domain must inform the student:

(1) that he will be transferred to another site;

(2) of the name of the school that will actually provide the course of instruction;

(3) of the name of the school that will appear on his certificate upon successful completion of the course;

(4) that the school to which he will be redirected will solicit private, personally identifiable information from the student; and

(5) that the student may refuse to be transferred without incurring 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 January 24, 2018.

TRD-201800272

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §50.18

The Texas Alcoholic Beverage Commission proposes amendments to §50.18, Application for Branch Internet-Based Training School Certificate.

Rule §50.18 addresses requirements for applications for branch internet-based school certificates.

The proposed amendments to rule §50.18 would add requirements for applications for branch mobile application seller server school certificates.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the requirements for schools offering seller server training by means of mobile applications will be clarified.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.18.Application for Branch Internet-Based or Branch Mobile Application Seller Server [Training] School Certificate.

(a) A branch internet-based seller server [training] school certificate is required for each domain that offers a different course of instruction from the course of instruction approved for the designated primary domain.

(b) A branch mobile application seller server school certificate is required for each delivery platform supported on mobile phones, PDAs, tablets or other delivery device approved by the commission. For a branch mobile application seller server school:

(1) the mandatory curriculum may be completed with or without Internet access;

(2) the Commission Standard Competence Test and all unit testing must be completed through an internet connection; and

(3) the Commission Standard Competence Test and all unit testing may not be stored in the mobile application or on any device not directly managed by the Primary Seller Server Training School.

[(b) An applicant for an original or renewal branch internet-based training school certificate must be an applicant for or hold a current primary internet-based training school certificate.]

(c) An applicant for an original or renewal branch internet-based or branch mobile application seller server school certificate must be an applicant for or already hold a current primary internet-based seller server school certificate.

(d) An application for a branch internet-based or branch mobile application seller server school certificate must indicate the primary internet-based seller server school certificate with which it is affiliated.

(e) An applicant may submit more than one application for a branch seller server school certificate or branch mobile application seller server school certificate, but each application must be completed and submitted on forms provided by the commission.

(f) A personal history sheet must be completed and submitted with the application for each certified instructor. A copy is acceptable if the original was included as part of the primary school application.

(g) An authorization for a criminal history background check is required for each individual required to submit a personal history sheet and who has not previously submitted the authorization.

(h) An individual required to submit a personal history sheet must at the same time submit an authorization for a criminal history background check.

(i) The applicant must sign and verify that:

(1) the applicant has personally completed or reviewed the application and is responsible for its content;

(2) all parts of the application are completed; and

(3) each fact, disclosure, and statement made in the application is true and correct at the time the application is submitted.

(j) Incomplete applications or applications submitted without required fees will neither be accepted for processing nor returned to the applicant.

(k) An applicant must:

(1) keep an exact copy of the application submitted to the commission; and

(2) complete and correct any deficiencies within ten business days after being notified of the deficiency.

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 January 24, 2018.

TRD-201800273

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Counsel

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §50.20

The Texas Alcoholic Beverage Commission proposes amendments to §50.20, Application for Branch In-House Seller Server School Certificate.

Rule §50.20 addresses requirements for applications for branch in-house seller server school certificates.

The proposed amendments to rule §50.20 would add new subsections (m) - (y) and a new subsection (a) to clarify that subsections (b) - (l) of the section apply to applications for branch classroom-based in-house seller server school certificates while the new subsections (m) - (y) apply to applications for branch internet-based in-house seller server school certificates or branch mobile application in-house seller server school certificates.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the rules applicable to in-house seller server schools will be clarified.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.20.Application for Branch In-House Seller Server School Certificate.

(a) Subsections (b) - (l) of this section apply to applications for branch classroom-based in-house seller server school certificates. Subsections (m) - (y) of this section apply to applications for branch internet-based in-house or branch mobile application in-house seller server school certificates.

(b) [(a)] An applicant for an original classroom-based in-house branch seller server school certificate must be an applicant for or currently hold a primary in-house seller server school certificate.

(c) [(b)] An applicant for a branch classroom-based in-house seller server school certificate renewal or change of ownership must hold a current primary in-house seller server school certificate.

(d) [(c)] An applicant may submit one or more applications for a branch classroom-based in-house seller server school certificate, but each application must be separately completed and submitted on forms provided by the commission.

(e) [(d)] The owners, shareholders, officers and directors of the primary in-house seller server school and the branch classroom-based in-house seller server school must be the same.

(f) [(e)] The application for a branch classroom-based in-house seller server school certificate must designate:

(1) a certified trainer responsible for the oversight, operation, training and compliance at the branch classroom-based in-house seller server school; and

(2) an individual responsible for the day-to-day operations and management of the branch classroom-based in-house seller server school.

(g) [(f)] A personal history sheet must be completed and submitted with the application for each trainer and responsible individual, if the individual has not previously provided a personal history sheet with the original or renewal application for the primary in-house seller server school.

(h) [(g)] An individual required to submit a personal history sheet must at the same time submit an authorization for a criminal history background check.

(i) [(h)] Additional information may be required by the commission to verify ownership or qualifications of an applicant or individual.

(j) [(i)] The applicant must sign and verify that:

(1) the applicant has authority to act on behalf of all owners;

(2) the applicant has personally completed or reviewed the application and has personal knowledge of and is responsible for its content;

(3) all parts of the application that apply are complete;

(4) each fact, disclosure, and statement made in the application is true and correct at the time the application is submitted;

(5) the applicant acknowledges that an application for a certificate is a government document and is subject to verification by the commission; and

(6) the applicant acknowledges that providing false or misleading information or omitting a material fact may result in the refusal of the application, cancellation of a certificate, or criminal prosecution.

(k) [(j)] Incomplete applications or applications submitted without required fees will neither be accepted for processing nor returned to the applicant.

(l) [(k)] An applicant must:

(1) keep an exact copy of the application submitted to the commission; and

(2) complete and correct any deficiencies within ten business days after being notified of the deficiency.

(m) A branch internet-based in-house training school certificate is required for each domain that offers a different course of instruction from the course of instruction approved on the designated primary domain.

(n) A branch mobile application in-house training school certificate is required for each delivery platform supported on mobile phones, PDAs, tablets or other delivery device approved by the commission. For a branch mobile application seller server school:

(1) the mandatory curriculum may be completed with or without Internet access;

(2) the Commission Standard Competence Test and all unit testing must be completed through an internet or intranet connection; and

(3) the Commission Standard Competence Test and all unit testing may not be stored in the mobile application nor on any device not directly managed by the Primary Seller Server Training School.

(o) An applicant for an original internet-based or mobile application in-house branch seller server school certificate must be an applicant for or currently hold a primary in-house seller server school certificate.

(p) An applicant for an internet-based or mobile application in-house branch seller server school certificate renewal or change of ownership must hold a current primary in-house seller server school certificate.

(q) An applicant may submit one or more applications for a branch internet-based or mobile application in-house seller server school certificate, but each application must be separately completed and submitted on forms provided by the commission.

(r) The owners, shareholders, officers and directors of the primary in-house seller server school and the branch internet-based or mobile application in-house seller server school must be the same.

(s) The application for a branch internet-based or mobile application in-house seller server school certificate must designate:

(1) a certified trainer responsible for the oversight, operation, training and compliance at the branch in-house seller server school; and

(2) an individual responsible for the day-to-day operations and management of the branch in-house seller server school.

(t) A personal history sheet must be completed and submitted with the application for each trainer and responsible individual, if the individual has not previously provided a personal history sheet with the original or renewal application for the primary in-house seller server school.

(u) An individual required to submit a personal history sheet must at the same time submit an authorization for a criminal history background check.

(v) Additional information may be required by the commission to verify ownership or qualifications of an applicant or individual.

(w) The applicant must sign and verify that:

(1) the applicant has authority to act on behalf of all owners;

(2) the applicant has personally completed or reviewed the application and has personal knowledge of and is responsible for its content;

(3) all parts of the application that apply are complete;

(4) each fact, disclosure, and statement made in the application is true and correct at the time the application is submitted;

(5) the applicant acknowledges that an application for a certificate is a government document and is subject to verification by the commission; and

(6) the applicant acknowledges that providing false or misleading information or omitting a material fact may result in the refusal of the application, cancellation of a certificate, or criminal prosecution.

(x) Incomplete applications or applications submitted without required fees will neither be accepted for processing nor returned to the applicant.

(y) An applicant must:

(1) keep an exact copy of the application submitted to the commission; and

(2) complete and correct any deficiencies within ten business days after being notified of the deficiency.

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 January 24, 2018.

TRD-201800274

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §50.21

The Texas Alcoholic Beverage Commission proposes amendments to §50.21, Renewal Application.

Rule §50.21 addresses renewal applications for seller server schools.

The proposed amendments to rule §50.21 would clarify the interaction between subsections (c) and (d).

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because how the rule operates will be clearer.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.21.Renewal Application.

(a) An application for renewal of a certificate issued under this subchapter must be submitted on forms provided by the commission. The applicant must verify that the individual owner, or a designated representative of the owning legal entity, has attended any mandatory training offered or sponsored by the commission, and has completed the commission's liquor law class, during the term of the expiring certificate.

(b) Any information that has changed since the original or last renewal application was submitted must be completed and corrected on forms provided for an original application.

(c) Except as otherwise provided by subsection (d) of this section, a [A] renewal application must be submitted before the date the certificate expires.

(d) Notwithstanding subsection (c) of this section, the commission may accept a renewal application and the certificate holder may continue to operate for 30 days following the expiration date, if:

(1) neither the primary nor any associated branch school is currently under a suspension order; and

(2) the required fees and late fee are submitted with the renewal application.

(e) A certificate holder who fails to submit a renewal as required by this section or pay the required fees must apply for an original application.

(f) A certificate issued under this subchapter may not be renewed if the school has not held at least 20 sessions during the term of the expiring certificate.

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 January 24, 2018.

TRD-201800275

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


16 TAC §50.22

The Texas Alcoholic Beverage Commission proposes amendments to §50.22, Expiration and Fees.

Section 50.22 addresses the expiration of and fees for seller server school certificates.

The proposed amendments to §50.22 would add deadlines for completing the application process which, if not met, could result in forfeiture of fees. They also clarify which fees are applicable to classroom-based in-house branch schools, and which fees are applicable to internet-based or mobile application in-house branch schools.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the public will be on notice of the appropriate fees to be paid and of application deadlines.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.22.Expiration and Fees.

(a) Primary seller server school certificate.

(1) A primary certificate will expire on the second anniversary of the date it is issued.

(2) The two-year fee for an original primary certificate is $1000.

(3) The two-year fee for a renewal primary certificate is $500.

(4) A late fee of $100 must be submitted with a renewal submitted after the date the certificate expired.

(5) No fees will be refunded after a certificate is issued.

(6) Fees cannot be prorated for a term of less than two years.

(7) Applications must be completed within one year of the date the application was received by the commission, or the application shall be deemed void. All fees are nonrefundable.

(8) If the applicant does not meet the deadline established in paragraph (7) of this subsection, the applicant must reapply for a new certificate by complying with requirements and procedures, including payment of fees.

(b) Branch seller server school certificate.

(1) A branch certificate will expire on the date the primary certificate expires.

(2) The two-year fee for each original classroom based or classroom-based in-house branch certificate is $200, and for each internet-based or mobile application in-house branch certificate is $50.

(3) The two-year fee for each renewal classroom based or classroom-based in-house branch certificate is $100, and for each internet-based or mobile application in-house branch certificate is $25.

(4) Fees for branch certificates that will expire in less than two years as a result of the primary certificate's expiration are not prorated.

(5) Applications must be completed within one year of the date the application was received by the commission, or the application shall be deemed void. All fees are nonrefundable.

(6) If the applicant does not meet the deadline established in paragraph (5) of this subsection, the applicant must reapply for a new certificate by complying with requirements and procedures, including payment of fees.

(c) No certificate will be issued until all fees and late fees are paid. A fee is paid on the date funds are available and transferred from the applicant's account.

(d) The filing fee for a change of ownership is $100.

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 January 24, 2018.

TRD-201800276

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


SUBCHAPTER D. SELLER SERVER TRAINER CERTIFICATE

16 TAC §50.25

The Texas Alcoholic Beverage Commission proposes amendments to §50.25, Seller Server Trainer Certificate.

Rule §50.25 addresses seller server trainer certificates.

The proposed amendments to rule §50.25 would impose a deadline for completion of applications for seller server trainer certificates and clarify that failure to comply with the deadline would result in the forfeiture of fees that have been paid.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments create a new regulation, as that term is defined in 34 Tex. Admin. Code §11.1(a)(1), with reference to 34 Tex. Admin. Code §11.1(a)(2)(B). The proposed amendments expand an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because applicants will have notice that there is a deadline for completion of their applications which, if not met, would result in the loss of fees already paid.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.25.Seller Server Trainer Certificate.

(a) Applicant Minimum Qualifications. An applicant for an original or renewal seller server trainer certificate must:

(1) submit documentation issued by an agency of the United States, this or another state of the United States that proves the applicant is a United States citizen or is legally authorized to work in the United States at the time of application;

(2) not be disqualified to receive a seller server school certificate under §50.12 of this chapter;

(3) be at least 21 years of age;

(4) submit a completed application on a commission approved form;

(5) pay the fee required for a seller server trainer certificate; and

(6) not have had a final disposition of a felony conviction within five years of the date of application.

(b) An applicant for an original seller server trainer certificate must submit with the application:

(1) a certificate of completion issued by the provider of the commission standard trainer training and signed by the instructor of the training; and

(2) documentation establishing that the applicant has at least:

(A) 2 years experience in teaching or training; or

(B) 15 hours of post secondary education in a related field.

(c) Expiration and Fees.

(1) A seller server trainer certificate will expire on the second anniversary of the date it is issued.

(2) The two-year fee for an original seller server trainer certificate is $100, and for a renewal is $50.

(3) A late fee of $50 must be submitted with a renewal application submitted after the date the certificate expired.

(4) No fees will be refunded after a certificate is issued.

(5) Fees cannot be prorated for a term of less than two years.

(6) Applications must be completed within one year of the date the application was received by the commission, or the application shall be deemed void. All fees are nonrefundable.

(7) If the applicant does not meet the deadline established in paragraph (6) of this subsection, the applicant must reapply for a new certificate by complying with requirements and procedures, including payment of fees.

(d) The holder of a seller server trainer certificate may renew the certificate if:

(1) a renewal application is submitted, on forms provided by the commission, prior to the expiration of the current certificate;

(2) the required two-year fee is submitted with the application;

(3) the applicant verifies that the applicant [he] attended all mandatory training offered or sponsored by the commission and completed the commission's liquor law course during the two-year term of the expiring certificate; and

(4) the applicant has instructed at least 20 sessions during the term of the expiring certificate.

(e) Notwithstanding subsection (d)(1) of this section, the commission may accept a renewal application and the seller server trainer certificate holder may continue to operate for 30 days following the expiration date of his certificate, if:

(1) the holder of the seller server trainer certificate is not currently under a suspension order; and

(2) the required fees and late fees are submitted with the renewal application.

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 January 24, 2018.

TRD-201800282

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


SUBCHAPTER E. SELLER SERVER CERTIFICATES

16 TAC §50.31

The Texas Alcoholic Beverage Commission proposes amendments to §50.31, Revocation.

Rule §50.31 addresses seller server certificates issued to students upon satisfactory completion of an approved training course.

The proposed amendments to rule §50.31 would make the language in subsection (b) gender neutral.

The commission has reviewed the section pursuant to Government Code §2001.039 and has determined that the need for the rule continues to exist but that the proposed changes to the current rule are appropriate.

Martin Wilson, Assistant General Counsel, has determined that for each year of the first five years that the proposed amendments will be in effect, there will be no fiscal impact on local government attributable to the amendments. There is no fiscal impact on state government.

The proposed amendments will have no fiscal or regulatory impact on micro-businesses, small businesses, rural communities, or persons regulated by the commission. There is no anticipated negative impact on local employment.

This paragraph constitutes the commission's government growth impact statement for the proposed amendments. The analysis addresses the first five years the proposed amendments would be in effect. The proposed amendments neither create nor eliminate a government program. The proposed amendments do not require the creation of new employee positions or the elimination of existing employee positions. Implementation of the proposed amendments requires neither an increase nor a decrease in future legislative appropriations to the commission. The proposed amendments require neither an increase nor a decrease in fees paid to the agency. The proposed amendments do not create a new regulation, as that term is defined in 34 Texas Administrative Code §11.1(a)(1), with reference to 34 Texas Administrative Code §11.1(a)(2)(B). The proposed amendments do not expand, limit, or repeal an existing regulation. The proposed amendments neither increase nor decrease the number of individuals subject to the rule's applicability. The proposed amendments have no direct effect on the state's economy, either positively or adversely.

Mr. Wilson has determined that for each year of the first five years that the proposed amendments will be in effect, the public will benefit because the language of the rule will be gender neutral.

Comments on the proposed amendments may be submitted in writing to Martin Wilson, Assistant General Counsel, Texas Alcoholic Beverage Commission, at P.O. Box 13127, Austin, Texas 78711-3127, by facsimile transmission to (512) 206-3280, or by email to rules@tabc.texas.gov. Written comments will be accepted for 30 days following publication in the Texas Register.

The staff of the commission will hold a public hearing to receive oral comments on the proposed amendments on Friday, February 23, 2018, at 1:30 p.m. in the commission meeting room on the first floor of the commission's headquarters, which is located at 5806 Mesa Drive in Austin, Texas. The commission has designated this hearing as the appropriate forum to make oral comments under Government Code §2001.029.

The proposed amendments are authorized by Alcoholic Beverage Code §5.31 and §106.14.

The proposed amendments affect Alcoholic Beverage Code §5.31 and §106.14, and Government Code §2001.039.

§50.31.Revocation.

(a) The commission may revoke a Seller Server Certificate under the conditions set forth in this section.

(1) If the holder of a Seller Server Certificate sells or serves an alcoholic beverage to a minor or intoxicated person, the certificate holder must be recertified within 30 days of the violation. Recertification requires completing a course of instruction offered by a certified school and passing the Commission Standard Competence Test. If the certificate holder is not recertified within 30 days of the violation, the commission may revoke the certificate.

(2) If the holder of a Seller Server Certificate sells or serves an alcoholic beverage to a minor or intoxicated person a second time within a 12 month period, the commission may revoke the certificate. The certificate holder cannot be recertified for a period of 90 days. Recertification requires completing a course of instruction offered by a certified school and passing the Commission Standard Competence Test.

(3) If the holder of a Seller Server Certificate sells or serves an alcoholic beverage to a minor or intoxicated person a third time within a 12 month period, the commission may revoke the certificate. The certificate holder cannot be recertified for a period of one year. Recertification requires completing a course of instruction offered by a certified school and passing the Commission Standard Competence Test.

(4) If the holder of a Seller Server Certificate provided false identification to a seller server school or trainer, including, but not limited to, name, social security number, or birth date, the commission may revoke the certificate. The certificate holder cannot be recertified.

(5) If the holder of a Seller Server Certificate did not successfully complete a course of instruction offered by a certified school or did not pass the Commission Standard Competence Test, the commission may revoke the certificate.

(b) Before the commission may revoke a Seller Server Certificate, the commission must give notice to the holder of the certificate that he or she has the right to request a hearing, but that he or she must make such request within 21 days after the receipt of the notice of violation.

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 January 24, 2018.

TRD-201800283

Martin Wilson

Assistant General Counsel

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: March 11, 2018

For further information, please call: (512) 206-3489


PART 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION

CHAPTER 110. ATHLETIC TRAINERS

The Texas Department of Licensing and Regulation (Department) proposes amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 110, §§110.14, 110.20, 110.21, 110.23, 110.25, 110.30, 110.80, 110.90 and 110.95; proposes new §110.1 and §110.10; and proposes the repeal of existing §110.1 and §110.19, regarding the Athletic Trainers program.

JUSTIFICATION AND EXPLANATION OF THE RULES

The rules under 16 TAC Chapter 110 implement Texas Occupations Code, Chapter 451, Athletic Trainers. The statute and rules govern the licensing and regulation of athletic trainers in Texas.

House Bill 4007, 85th Legislature, Regular Session (2017), made several clean up changes to Texas Occupations Code, Chapter 451. In addition, the Department has identified clean-up changes that need to be made to the existing rules since the Athletic Trainers program was transferred from the Department of State Health Services.

The proposed rules are necessary to implement HB 4007; remove unnecessary provisions; make editorial changes; and update the rule language to reflect current exam practices.

The proposed rules were discussed by the Athletic Trainers Advisory Board at its meeting on January 8, 2018. The Advisory Board recommended that the proposed rules be published in the Texas Register for public comment.

SECTION- BY- SECTION SUMMARY

The proposed new §110.1 states the statutory authority for rulemaking.

The proposed repeal of current §110.1 moves the definitions used in the Athletic Trainers program to §110.10.

The proposed new §110.10 contains the definitions that were previously located in §110.1. The reference to "Board" was replaced with "Advisory Board."

The proposed amendments to §110.14 make an editorial change to the title of the section.

The proposed repeal of §110.19 removes unnecessary provisions.

The proposed amendments to §110.20 remove an unnecessary provision related to HB 4007 and renumber the section accordingly.

The proposed amendments to §110.21 add clarifying language and change a reference from the Department to the Department of State Health Services.

The proposed amendments to §110.23 reword the section to reflect current exam processes, add clarifying language, restructure subsection (c) for clarity, and renumber the section accordingly.

The proposed amendments to §110.25 simplify and clarify the language regarding continuing education requirements and renumber the section accordingly.

The proposed amendments to §110.30 clarify the language regarding temporary license requirements.

The proposed amendments to §110.80 reduce fees for temporary licenses and license renewals to standardize those fees with initial license application fees, clarify that examination fees are paid to the Department's designee rather than to the Department, add a fee for a duplicate/replacement license as is standard with all licenses administered by the Department, combine the initial license fee and initial application fees into one fee, and remove the returned check fee as it conflicts with the Department's rules at 16 TAC §60.82 and §110.80(e) regarding dishonored payment devices.

The proposed amendments to §110.90 correct a reference to the statutory authority for imposing administrative penalties and sanctions.

The proposed amendments to §110.95 correct a reference to the Athletic Trainers program statute.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT

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

Mr. Francis has determined that for each year of the first five years the proposed rules are in effect, the state will experience a loss in revenue. The proposed rules reduce the fee for issuing a temporary license from $200 to $160 and for renewing a regular license from $250 to $160. There are approximately 1,800 licenses renewed annually for a two-year term. The reduction of the renewal fee results in an estimated loss of $162,000 for each year of the first five years that the rule will be in effect. In addition, there are approximately 25 temporary licenses issued annually. The reduction of the temporary license fee results in an estimated loss of $1,000 for each year of the first five years that the rule will be in effect. The proposed rules also implement a fee of $25 for a duplicate or replacement license and eliminate the returned check fee of $25 in lieu of the dishonored payment device fee of $50. These two fees are discretionary, and any additional revenue to the state cannot be estimated.

Mr. Francis has determined that for each year of the first five years the proposed rules are in effect, there is no estimated increase or loss in revenue to local government as a result of enforcing or administering the proposed rules.

LOCAL EMPLOYMENT IMPACT STATEMENT

Mr. Francis has determined that the proposed rules will not affect the local economy, so the agency is not required to prepare a local employment impact statement under Government Code §2001.022.

PUBLIC BENEFITS

Mr. Francis has also determined that for each year of the first five-year period, the proposed rules are in effect, the public will benefit from easier to understand rules by clarifying the exam provisions to reflect current practices; clarifying the continuing education provisions; and clarifying the exam fees and to whom they are paid. The public will also benefit from reduced renewal and temporary license fees.

PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL

Mr. Francis has determined that for each year of the first five-year period, the proposed rules are in effect, there will be economic costs of $25 for a duplicate/replacement certificate and a dishonored payment device fee of $50 set forth in 16 TAC §60.82 and §110.80(e). However, these fees are discretionary and do not necessarily add economic costs to persons who are required to comply with the proposed new rules.

Mr. Francis has determined that for each year of the first five-year period the proposed rules are in effect, there will be a reduction in costs to persons who are required to comply with the proposed rules. There will be a reduction in costs to licensees for renewal fees (reduction of $90 per renewal) and temporary license fees (reduction of $40 per license). The reduction of the renewal fee results in a reduction of costs of $162,000 for each year of the first five years that the rule will be in effect. The reduction of the temporary license fee results in a reduction of costs of $1,000 for each year of the first five years that the rule will be in effect.

FISCAL IMPACT ON SMALL BUSINESSES, MIRCO-BUSINESSES, AND RURAL COMMUNITIES

There will be no adverse effect on small businesses, micro-businesses, or rural communities as a result of the proposed rules.

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

ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT

Under Government Code §2001.0045, a state agency may not adopt a proposed rule if the fiscal note states that the rule imposes a cost on regulated persons, including another state agency, a special district, or a local government, unless the state agency: (a) repeals a rule that imposes a total cost on regulated persons that is equal to or greater than the total cost imposed on regulated persons by the proposed rule; or (b) amends a rule to decrease the total cost imposed on regulated persons by an amount that is equal to or greater than the cost imposed on the persons by the rule. There are exceptions for certain types of rules under §2001.0045(c).

The proposed rules do not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. Therefore, the agency is not required to take any further action under Government Code §2001.0045(c).

GOVERNMENT GROWTH IMPACT STATEMENT

Pursuant to Government Code §2001.0221, the agency provides the following Government Growth Impact Statement for the proposed rules. For each year of the first five years the proposed rules will be in effect, the agency has determined the following:

(1) The proposed rules do not create a government program.

(2) Implementation of the proposed rules does not require the creation of new employee positions or the elimination of existing employee positions.

(3) Implementation of the proposed rules does not require an increase or decrease in future legislative appropriations to the agency.

(4) The proposed rules do not require both a decrease in fees and an increase in fees paid to the agency. The proposed rules decrease the fee for issuing a temporary license from $200 to $160; and decrease the fee for renewing a regular license from $250 to $160. The proposed rules also implement a new fee of $25 for a duplicate or replacement license and eliminate the returned check fee of $25 in lieu of the dishonored payment device fee of $50 set forth in 16 TAC §60.82 and referenced in §110.80(e).

(5) The proposed rules create a new regulation by adding §110.1, which states the statutory authority for rulemaking and §110.10, which is the new relocated definitions section.

(6) The proposed rules repeal an existing regulation by moving current §110.1 to the proposed new §110.10 and repealing §110.19, which is an unnecessary provision.

(7) The proposed rules do not increase or decrease the number of individuals subject to the rule's applicability.

(8) The proposed rules do not positively or adversely affect this state's economy.

PUBLIC COMMENTS

Comments on the proposal may be submitted by mail to Pauline Easley, Legal Assistant, 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 §110.1, §110.19

STATUTORY AUTHORITY

The repeals are proposed under Texas Occupations Code, Chapters 51 and 451, which authorizes 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 proposed repeal are those set forth in Texas Occupations Code, Chapters 51 and 451. No other statutes, articles, or codes are affected by the proposal.

§110.1.Definitions.

§110.19.Reimbursement.

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 January 29, 2018.

TRD-201800367

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


16 TAC §§110.1, 110.10, 110.14, 110.20, 110.21, 110.23, 110.25, 110.30, 110.80, 110.90, 110.95

The new rules and amendments are proposed under Texas Occupations Code, Chapters 51 and 451, 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 451. No other statutes, articles, or codes are affected by the proposal.

§110.1.Authority.

The sections in this chapter are promulgated under the authority of the Texas Occupations Code, Chapters 51 and 451.

§110.10.Definitions.

The following words and terms, when used in these rules shall have the following meanings unless the context clearly indicates otherwise. Words and terms defined in the Athletic Trainers Act shall have the same meaning in these rules:

(1) Act--Texas Occupations Code, Chapter 451.

(2) Advisory Board--The Advisory Board of Athletic Trainers.

(3) Athlete--A person who participates in an organized sport or sport-related exercise or activity, including interscholastic, intercollegiate, intermural, semiprofessional, and professional sports activities.

(4) Commission--The Texas Commission of Licensing and Regulation.

(5) Department--The Texas Department of Licensing and Regulation.

(6) Executive Director--The executive director of the department.

(7) Licensee--A person who holds a current license or a temporary license as an athletic trainer issued by the department under the Act.

(8) Temporary license--A license issued under §110.30.

§110.14.[The] Advisory Board Membership.

The Advisory Board of Athletic Trainers consists of five members appointed by the presiding officer of the commission with the approval of the commission as follows:

(1) three members who are athletic trainers; and

(2) two members who represent the public.

§110.20.Application Requirements.

(a) - (c) (No change.)

[(d) The applicant must meet the fitness requirements under this chapter.]

(d) [(e)] The department will notify the applicant regarding whether the applicant qualifies to take the license examination.

(e) [(f)] Pursuant to Texas Occupations Code, Chapters 51 and 451, the commission or the executive director may deny the application for a violation of the Act.

(f) [(g)] If after review the department determines that the application should not be approved, the department shall give the applicant written notice of the reason for the proposed decision and of the opportunity for a hearing under Texas Government Code, Chapter 2001.

§110.21.License Requirements.

(a) Applicants qualifying under the Act, §451.153(a)(1), shall have:

(1) a baccalaureate or post-baccalaureate degree, which includes at least 24 hours of combined academic credit from each of the following course areas:

(A) - (F) (No change.)

(G) therapeutic exercise, therapeutic [or] rehabilitation, or therapeutic modalities; and[.]

(2) (No change.)

(b) - (c) (No change.)

(d) In place of the requirements in subsections (a) and (b), an applicant [applicants] qualifying under the Act, §451.153(a)(1), shall have a baccalaureate or post-baccalaureate degree in athletic training from a college or university, which held accreditation, during the applicant's [applicants ] matriculation at the college or university and at the time the degree was conferred, from a nationally recognized accrediting organization that is approved by the department.

(e) Certification required. An applicant must have:

(1) current certification in the techniques of professional rescuer cardio-pulmonary resuscitation and the use of an automated external defibrillator; or

(2) current certification for Emergency Medical Services (EMS) with the Department of State Health Services or its successor agency [department].

(f) - (h) (No change.)

§110.23.Examination for Licensure.

(a) (No change.)

(b) The examination required under the Act, §451.156 consists [shall consist] of a written examination, a [and] practical examination, and a jurisprudence examination [questions and evaluations] prescribed by the department.

(1) An applicant must pass the written examination prior to taking the practical examination.

(2) An applicant must complete the jurisprudence examination no more than six months prior to the date of application.

(c) An applicant is eligible [may file an application] for examination if the applicant meets one of the following three options:

(1) the applicant:

(A) [(1)] is within 30 semester hours of graduation;

(B) [(2)] has completed or is currently pre-registered or enrolled in the courses listed in §110.21; and

(C) [(3)] has completed at least 1,300 hours of the required 1,800 hours and the apprenticeship program is in progress; [or]

(2) [(4)] the applicant is currently enrolled in, and within two semesters of graduating from, an athletic training program at a college or university which holds accreditation from a nationally recognized accrediting organization that is approved by the department, if the applicant qualifies under the Act, §451.153(a)(1); or

(3) [(5)] the applicant has completed at least 600 hours of the required 720 hours and the apprenticeship program is in progress, if the applicant qualifies under the Act, §451.153(a)(2) or (a)(3).

(d) The department shall review all applications prior to the examination. An applicant meeting the requirements of subsection (c) or of §110.21[, and pays the required examination fee,] shall be approved to take the examination.

(e) The department shall notify an applicant whose application has been approved for examination [at least 30 days prior to the next scheduled examination]. Applications which are received incomplete or late may cause the applicant to miss the examination registration deadline.

[(f) An examination registration form must be completed and returned to the department by the applicant with the required examination fee (unless otherwise instructed by the department) at least 15 days prior to the date of examination. Applications which are received incomplete or late may cause a delay.]

(f) [(g)] Examinations shall be graded by the department's designee.

(g) [(h)] The department's designee [department] shall notify each applicant of the results of the examination within 30 days of the date of the examination.

(h) [(i)] The following procedures relate to applicants who fail the examination prescribed by the department.

(1) An applicant who fails the examination may take a subsequent examination after paying the examination fee.

(2) The department will make available [furnish ] a copy of the department's policy concerning examination review to an applicant who fails an examination.

(i) [(j)] An applicant who fails to take the examination within a period of two years after the initial examination approval notice sent by the department, shall have such approval withdrawn and the application for licensure voided.

(j) [(k)] An applicant who has failed the state examination described in subsections (a) - (l) [(m)], must successfully complete that examination in order to be issued a license. If the application has been voided as described in subsection (i) [(j)], the person shall submit a new application, and the provisions of subsection (m) [(n)] shall apply.

(k) [(l)] Applicants who have passed the examination and do not have a degree, will have 90 days from their graduation date to submit all documents and fees necessary to show compliance with this chapter and complete the licensing procedure. If the application process is not completed within 90 days of the graduation date, the applicant shall be required to file a new application and retake the examination successfully in order to qualify for licensure.

(l) [(m)] A first-time applicant must apply for examination within five years from the date on which the applicant's qualifying degree was conferred or the apprenticeship was completed, whichever is later. An applicant may submit an application after this time period upon successful completion of remedial coursework or apprenticeship, as approved by the department.

(m) [(n)] If an applicant has successfully completed the examination administered by the Board of Certification, Inc. (BOC) on or after January 1, 2004, the applicant shall not be required to complete the state examination described in subsections (a) - (l) [(m)], unless the applicant has previously held a license issued by the department. The applicant must furnish to the department a copy of the test results indicating that the applicant passed the examination.

(n) [(o)] If an applicant has completed the examination administered by the Board of Certification, Inc. (BOC) before January 1, 2004, the applicant shall be required to complete the state examination described in subsections (a) - (l) [(m)].

§110.25.Continuing Education Requirements.

(a) To renew a license, [that expires on or after September 1, 2015] a licensee must complete [have completed] 40 clock-hours of continuing education during each license term [the previous two-year period].

(1) The continuing education must include two clock-hours of training in concussion management.

(2) In addition to the number of continuing education clock-hours required under this subsection, a licensee must also show proof of current Emergency Cardiac Care certification at the Basic Life Support for Healthcare Providers/Professional Rescuers and Healthcare Providers level or beyond, which shall be maintained throughout each license term. [two-year period. The two-year period begins on the first day following the license issuance month and ends upon the expiration date of the license.]

(b) - (d) (No change.)

(e) The department shall employ an audit system for continuing education reporting. The license holder shall be responsible for maintaining a record of his or her continuing education experiences. The certificates, diplomas, or other documentation verifying earning of continuing education hours are not to be forwarded to the department at the time of renewal, unless the license holder has been selected for audit.

(f) [(1)] The audit process shall be as follows:

(1) [(2)] The department shall select for audit a random sample of license holders for each renewal month. License holders will be notified of the continuing education audit when they receive their renewal documentation.

(2) [(3)] If selected for an audit, the licensee shall submit copies of certificates, transcripts or other documentation satisfactory to the department, verifying the licensee's attendance, participation and completion of the continuing education. All documentation must be provided at the time of renewal.

(3) [(4)] Failure to timely furnish this information or providing false information during the audit process or the renewal process are grounds for disciplinary action against the license holder.

(4) [(5)] A licensee who is selected for a continuing education audit may renew through the online renewal process. However, the license will not be considered renewed until the required continuing education documents are received, accepted and approved by the department.

(5) [(6)] Licenses will not be renewed until continuing education requirements have been met.

(g) [(f)] The department may not grant continuing education credit to any licensee for:

(1) education incidental to the regular professional activities of a licensee, such as learning occurring from experience or research;

(2) professional organization activity, such as serving on committees or councils or as an officer;

(3) any continuing education activity completed before or after the period of time described in subsection (a); or

(4) performance of duties that are routine job duties or requirements.

§110.30.Temporary License.

(a) A temporary license may be issued to an individual who meets the educational and apprenticeship requirements of this chapter.

(b) The temporary license entitles an applicant to perform the activities of an athletic trainer until the results of the first practical examination, which the applicant is eligible to take, are released.

(c) An applicant who failed an examination administered by the department, shall not be eligible for a temporary license. If a temporary license has previously been issued, it shall be voided and the applicant shall not be eligible for another temporary license.

(d) A person who was [has been] licensed as an athletic trainer but is no longer eligible to late renew the license [and allowed the license to expire], may be eligible for a temporary license upon submission and approval of a new application for licensure. The expiration of a temporary license issued under this subsection will be in accordance with subsection (b).

§110.80.Fees.

(a) (No change.)

(b) The schedule of fees is as follows:

(1) initial license application fee (includes two-year license)--$160 [--$60];

(2) temporary license fee--$160 [$200];

(3) renewal license application fee (includes two-year license)--$160; and

(4) duplicate/replacement fee for licenses issued under this chapter--$25.

[(3) written examination fee--$75;]

[(4) practical examination fee--$90;]

[(5) initial license fee--$100;]

[(6) returned check fee--$25;]

[(7) renewal license--$250;]

[(8) jurisprudence exam fee--$35;]

[(9) Late renewal fees for licenses issued under this chapter are provided under §60.83 of this title (relating to Late Renewal Fees).]

[(10) dishonored/returned check or payment fee is the fee prescribed under §60.82 of this title (relating to Dishonored Payment Device).]

[(11) The fee for a criminal history evaluation letter is the fee prescribed under §60.42 of this title (relating to Criminal History Evaluation Letters).]

(c) The fees for the written examination, practical examination, and the jurisprudence examination are set by and payable to the department's designee.

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

(e) The dishonored/returned check or payment fee is the fee prescribed under §60.82 of this title (relating to Dishonored Payment Device).

(f) The fee for a criminal history evaluation letter is the fee prescribed under §60.42 of this title (relating to Criminal History Evaluation Letters).

§110.90.Administrative Penalties and Sanctions.

If a person or entity violates any provision of Texas Occupations Code, Chapters 51 or 451, this chapter, or any rule or order of the executive director or commission, proceedings may be instituted to impose administrative penalties, administrative sanctions, or both in accordance with the provisions of Texas Occupations Code, Chapter 51 [and 451] and any associated rules.

§110.95.Enforcement Authority.

The enforcement authority granted under Texas Occupations Code, Chapters 51 and 451 and any associated rules may be used to enforce Texas Occupations Code, Chapter [Chapters 51,] 451 and this chapter.

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 January 29, 2018.

TRD-201800368

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


CHAPTER 112. HEARING INSTRUMENT FITTERS AND DISPENSERS

The Texas Department of Licensing and Regulation (Department) proposes changes to the rules under 16 Texas Administrative Code (TAC), Chapter 112, by amending existing rules under Subchapter A, §112.2; Subchapter B, §112.10; Subchapter C, §§112.21 - 112.24, and 112.26; Subchapter D, §§112.30, 112.32, and 112.33; Subchapter E, §112.40 and §112.42; Subchapter F, §§112.50, 112.52, and 112.53; Subchapter H, §112.70; Subchapter I, §112.80; Subchapter J, §112.92 and §112.95; Subchapter L, §112.110; Subchapter M, §112.120; and Subchapter N, §112.130; and by repealing an existing rule under Subchapter N, §112.133, related to the Hearing Instrument Fitters and Dispensers program. These changes are collectively referred to as "proposed rules" within this preamble.

JUSTIFICATION AND EXPLANATION OF THE RULES

The rules under 16 TAC Chapter 112 implement Texas Occupations Code, Chapter 402, Hearing Instrument Fitters and Dispensers. The statute and rules govern the licensing and regulation of licensed hearing instrument fitters and dispensers, apprentice permit holders, and temporary training permit holders.

These proposed rules are necessary to implement House Bill (HB) 4007 and HB 1543, 85th Legislature, Regular Session (2017) and to make clean-up changes. These three categories of rule changes have been combined into one proposal, since there is overlap in a few of the affected rule sections and this combined proposal eliminates the need for separate rulemakings.

HB 4007 Changes

The proposed rules implement HB 4007, 85th Legislature, Regular Session (2017). HB 4007, in part, removed certain barriers, redundancies, and impediments regarding the Hearing Instrument Fitters and Dispensers program. The bill clarified the statute's applicability; removed the pre-appointment residency requirements for advisory board membership; removed barriers for out-of-state license applicants; removed barriers and updated provisions for temporary training permit holders; updated continuing education alternatives and exemptions; deleted prohibitions involving the fitting and dispensing of hearing instruments that were sold by mail and the selling of hearing instruments by mail; repealed the requirement that the owner of a dispensing practice must hold a hearing instrument fitter and dispenser license; and repealed provisions regarding administrative penalties and civil penalties, that are already included in Occupations Code Chapter 51, the Commission's and the Department's enabling statute.

HB 1543 Changes

The proposed rules implement HB 1543, 85th Legislature, Regular Session (2017). HB 1543 added a new section to the statute regarding client access to records. The proposed rules add a corresponding provision to the rules.

Clean-up Changes

The proposed rules also make clean-up changes identified by Department staff since the Hearing Instrument Fitters and Dispensers program was transferred from the Department of State Health Services (DSHS) to the Department effective October 3, 2016, pursuant to Senate Bill (SB) 202, 84th Legislature, Regular Session (2015).

Advisory Board Discussion and Recommendations

This rule proposal, which contains all three categories of changes, was presented to and discussed by the Hearing Instrument Fitters and Dispensers Advisory Board (Advisory Board) at its meeting on January 10, 2018.

The Advisory Board discussion primarily focused on Occupations Code §402.251(b), as amended by HB 4007, and proposed rule 16 TAC §112.50, regarding the Temporary Training Permit--Application and Eligibility Requirements. HB 4007 amended Occupations Code §402.251(b) by removing the provision that a temporary training permit holder had to wait 365 days after the permit expired before the person could obtain a new permit. As amended by HB 4007, the statute now provides that the commission by rule may provide for the issuance of a new temporary training permit after a person's temporary training permit expires.

The Department did not propose any new rules to implement Occupations Code §402.251(b) or propose any new restrictions or conditions on the issuance of a second temporary training permit. The current rules would allow a person to apply for a new temporary training permit when the previous permit expired (after the one-year extension period).

As part of the discussion, the Department had provided the Advisory Board with copies of the position paper submitted by the Texas Hearing Aid Association on this statutory change and the association's recommendation for proposed rules. The Advisory Board also discussed the issues regarding why a temporary training permit holder may need to apply for a second temporary training permit after the initial permit expired.

The Advisory Board did not make any changes to the draft proposed rules at the January 10, 2018, meeting. The Advisory Board recommended that the draft proposed rules be published in the Texas Register as proposed rules for public comment. The Advisory Board also recommended that a workgroup study 16 TAC §112.50 related to Occupations Code §402.251(b) and the issues discussed above. The workgroup study may result in a possible rulemaking in the future.

SECTION-BY-SECTION SUMMARY

The proposed rules amend §112.2, Definitions. The proposed rules eliminate the definitions of "ownership of dispensing practice" and "selling of hearing instruments by mail." These changes are a result of HB 4007

The proposed rules amend §112.10, Membership. The proposed rules eliminate the pre-appointment residency requirements for advisory board membership. These changes are a result of HB 4007.

The proposed rules amend §112.21, Examination Qualifications. The proposed rules revise subsection (f) by adding clarifying language and removing the second sentence, which is not applicable to this section. The proposed rules also use lower case for "jurisprudence examination." These changes are part of the clean-up changes.

The proposed rules amend §112.22, Examination Tests and Contents. The proposed rules update the provision regarding practical exams, use lower case for "jurisprudence examination," and update the list of exam topics to match the statute. These changes are part of the clean-up changes.

The proposed rules amend §112.23, Examination Scores and Results. The proposed rules clarify "parts of the examination," clarify that the department or the department's designee notifies an applicant regarding scores, and use lower case for "jurisprudence examination." These changes are part of the clean-up changes.

The proposed rules amend §112.24, Failure of Examination. The proposed rules add the applicant who holds a current out-of-state license to this section. The statute no longer prohibits an applicant with an out-of-state license from retaking the examination if the applicant fails the examination. This change is a result of HB 4007. The proposed rules also re-write the provision for clarify purposes. These changes are part of the clean-up changes.

The proposed rules amend §112.26, Jurisprudence Examination. The proposed rules use lower case for "jurisprudence examination." These changes are part of the clean-up changes.

The proposed rules amend §112.30, Hearing Instrument Fitter and Dispenser License--Application and Eligibility Requirements. The proposed rules clarify the fee language. This change is part of the clean-up changes.

The proposed rules amend §112.32, Hearing Instrument Fitter and Dispenser License--License Term; Renewals. The proposed rules remove existing subsection (c)(2) and add subsection (d) to clarify that a licensee must successfully pass a criminal history background check in order to renew the license; however, the licensee does not need to submit new fingerprints. The proposed rules also clarify the fee language and the continuing education provision. These changes are part of the clean-up changes.

The proposed rules amend §112.33, Application by License Holder From Another State. The proposed rules add the fingerprint criminal history background check requirement to reflect the statutory requirement and the current practice; add the fee provision to reflect the current license application requirements; and use lower case "jurisprudence examination." These changes are part of the clean-up changes.

In addition, the proposed rules amend §112.33 by removing the requirement that the applicant held a license in another state for at least three years preceding the date of application. The proposed rules also remove current subsection (h), regarding an applicant who fails an examination may not retake the examination and must start completely over with a temporary training permit. These changes are a result of HB 4007.

The proposed rules amend §112.40, Apprentice Permit--Application and Eligibility Requirements. The proposed rules use lower case "jurisprudence examination." These changes are part of the clean-up changes.

The proposed rules amend §112.42, Apprentice Permit--Permit Term; Extension. The proposed rules add a provision requiring a criminal history background check for extensions and add a clarifying statement that the permit may only be extended once. These changes are part of the clean-up changes.

The proposed rules amend §112.50, Temporary Training Permit--Application and Eligibility Requirements. The proposed rules remove the provision that the applicant must have never taken the examination administered under this chapter. This change is a result of HB 4007.

The proposed rules amend §112.52, Temporary Training Permit--Permit Term; Extension. The proposed rules add a provision requiring a criminal history background check for extensions. This change is part of the clean-up changes.

The proposed rules amend §112.53, Temporary Training Permit--Supervision and Temporary Training Requirements. The proposed rules remove the requirement that the supervisor and the permit holder sign the form showing completion of the supervised contact hours and that the form be notarized and mailed to the Department. The proposed rules instead provide that the supervisor and the permit holder shall submit verification of compliance to the Department in a manner prescribed by the Department. These changes are a result of HB 4007.

The proposed rules amend §112.70, Continuing Education--Hours and Courses. The proposed rules remove current subsection (f) regarding taking the licensing examination to fulfill the continuing education requirement. The proposed rules also remove the continuing education exemption regarding certain military members. Provisions regarding military members and continuing education are included in Occupations Code Chapter 55, Licensing of Military Service Members, Military Veterans, and Military Spouses, and in the Department's procedural rules under 16 TAC Chapter 60, Subchapter K, Licensing Provisions Related to Military Service Members, Military Veterans, and Military Spouses. These changes are a result of HB 4007.

In addition, the proposed rules clarify the terminology and requirements under §112.70. The proposed rules clarify that a license holder must complete 20 continuing education hours during each license term, rather than during each "two-year renewal period." The proposed rules also add a cross-reference to the exceptions provided under re-lettered subsection (j). These changes are part of the clean-up changes.

The proposed rules amend §112.80, Rules. The proposed rules remove the placeholder language and insert the specific citation to 16 TAC Chapter 100, General Provisions for Health-Related Programs. These changes are part of the clean-up changes.

The proposed rules amend §112.92, Consumer Information. The proposed rules expand the title and scope of the section to include client records. The proposed rules add a new subsection (b), which requires a licensee or a hearing instrument fitting and dispensing practice to provide to a client, who provides a signed, written request, a copy of the client's records that pertain to the testing for, and fitting and dispensing of, hearing instruments. These changes are a result of HB 1543.

The proposed rules amend §112.95, Information on Prospective Amplification Candidates. The proposed rules amend the rule language to match the statute. This change is part of the clean-up changes.

The proposed rules amend §112.110, Fees. The proposed rules amend the provisions regarding examination fees, to specify that these fees are determined by and payable to the Department's designee. This change reflects the practice since the Hearing Instrument Fitters and Dispensers program was transferred from DSHS to the Department effective October 3, 2016. These changes are part of the clean-up changes.

The proposed rules amend §112.120, Complaints Regarding Standard of Care. The proposed rules remove the placeholder language and insert the specific citation to 16 TAC Chapter 100, General Provisions for Health-Related Programs. These changes are part of the clean-up changes.

The proposed rules amend §112.130, Administrative Penalties and Sanctions. The proposed rules make a technical change that reflects the change made by HB 4007. The bill repealed the program-specific administrative penalties section in Occupations Code Chapter 402. Occupations Code Chapter 51, which applies to all the Department's programs, includes administrative penalties provisions, which will apply to the Hearing Instrument Fitters and Dispensers program.

The proposed rules repeal existing rule §112.133, Civil Penalty. The proposed rules repeal this section to reflect the change made by HB 4007. The bill repealed the program-specific civil penalty section in Occupations Code Chapter 402. Occupations Code Chapter 51, which applies to all the Department's programs, includes a civil penalty section, which will apply to the Hearing Instrument Fitters and Dispensers program.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT

Brian E. Francis, Executive Director, has determined that for each year of the first five years the proposed rules are in effect, there are no estimated additional costs or reductions in costs to state government as a result of enforcing or administering the proposed rules.

Mr. Francis has determined that for each year of the first five years the proposed rules are in effect, there is no estimated increase or loss in revenue to the state government as a result of enforcing or administering the proposed rules. The proposed changes to the fees rule section are clean-up changes intended to align the rules with current practice. The practical examination fees are, and have been in the past, paid to the department's designee, not to the state. This proposed change does not result in a decrease in state revenue.

Mr. Francis has determined that for each year of the first five years the proposed rules are in effect, enforcing or administering the proposed rules does not have foreseeable implications relating to costs or revenues of local governments.

LOCAL EMPLOYMENT IMPACT STATEMENT

Mr. Francis has determined that the proposed rules will not affect the local economy, so the agency is not required to prepare a local employment impact statement under Government Code §2001.022.

PUBLIC BENEFITS

Mr. Francis also has determined that for each year of the first five-year period the proposed rules are in effect, the public benefit will be implementation of the changes made by HB 4007 and HB 1543, along with clean-up changes of existing rules. The proposed rules will benefit the public by eliminating barriers for applicants who hold out-of-state licenses and applicants for temporary training permits; providing clarity regarding the examination provisions; providing clarity regarding license and permit application, renewal, and extension requirements; and by allowing clients easier access to copies of their records by submitting a signed, written request to the licensee or the hearing instrument fitting and dispensing practice. The proposed rules make changes to conform the rules to the updated program statute and to align the rules with current agency practice. These changes seek to ensure that the program functions efficiently and effectively for license holders and permit holders and protects the health, safety, and welfare of the public.

PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL

Mr. Francis has determined that for each year of the first five-year period the proposed rules are in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rules.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES

There will be no adverse effect on small businesses, micro-businesses, or rural communities as a result of the proposed rules.

Since the agency has determined that the proposed rule will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, are not required.

ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT

Under Government Code §2001.0045, a state agency may not adopt a proposed rule if the fiscal note states that the rule imposes a cost on regulated persons, including another state agency, a special district, or a local government, unless the state agency: (a) repeals a rule that imposes a total cost on regulated persons that is equal to or greater than the total cost imposed on regulated persons by the proposed rule; or (b) amends a rule to decrease the total cost imposed on regulated persons by an amount that is equal to or greater than the cost imposed on the persons by the proposed rule. There are exceptions for certain types of rules under §2001.0045(c).

The proposed rules do not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. Therefore, the agency is not required to take any further action under Government Code §2001.0045.

GOVERNMENT GROWTH IMPACT STATEMENT

Pursuant to Government Code §2001.0221, the agency provides the following Government Growth Impact Statement for the proposed rules. For each year of the first five years the rule will be in effect, the agency has determined the following:

(1) The proposed rule does not create or eliminate a government program.

(2) Implementation of the proposed rule does not require the creation of new employee positions or the elimination of existing employee positions.

(3) Implementation of the proposed rule does not require an increase or decrease in future legislative appropriations to the agency.

(4) The proposed rule does not require an increase or decrease in fees paid to the agency.

(5) The proposed rule does create a new regulation. The proposed rules implement HB 4007 and HB 1543 and make other clean-up changes. As a result of HB 1543, the proposed rules add a new provision under §112.92(b) regarding client records.

(6) The proposed rule does expand, limit, or repeal an existing regulation. The proposed rules implement HB 4007 and HB 1543 and make other clean-up changes. As a result of HB 4007, the proposed rules repeal §112.133. Other rules are proposed to be amended.

(7) The proposed rule does not increase or decrease the number of individuals subject to the rule's applicability.

(8) The proposed rule does not positively or adversely affect this state's economy.

PUBLIC COMMENTS

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

SUBCHAPTER A. GENERAL PROVISIONS

16 TAC §112.2

STATUTORY AUTHORITY

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.2.Definitions.

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

(1) - (21) (No change.)

[(22) Ownership of dispensing practice--A person who owns, maintains, or operates an office or place of business where the person employs or engages under contract a person who practices the fitting and dispensing of hearing instruments shall be considered also to be engaged in the practice of fitting and dispensing of hearing instruments under this Act.]

(22) [(23)] Person--An individual, corporation, partnership, or other legal entity.

(23) [(24)] Sale or sell--A transfer of title or of the right to use by lease, bailment, or other contract. The term does not include a sale at wholesale by a manufacturer to a person licensed under the Act or to a distributor for distribution and sale to a person licensed under the Act.

[(25) Selling of hearing instrument by mail--Any time a hearing instrument is not sold, fitted or dispensed in person by a license holder or permit holder.]

(24) [(26)] Specific Product Information--Specific product information shall include, but not be limited to, brand name, model number, shell type, and circuit type.

(25) [(27)] Supervisor--A supervisor is an individual who holds a valid license to fit and dispense hearing instruments under Texas Occupations Code, Chapter 401 or 402, other than an individual licensed under §401.311 or §401.312, and who meets the qualifications established by Texas Occupations Code, §402.255 and this chapter.

(26) [(28)] Temporary training permit--A permit issued by the department to an individual who meets the qualifications established by Texas Occupations Code, Chapter 402, Subchapter F, and this chapter, to authorize the permit holder to fit and dispense hearing instruments only under the direct or indirect supervision, as required and as appropriate, of an individual who holds a license to fit and dispense hearing instruments without supervision under Texas Occupations Code, Chapter 401 or 402, other than an individual licensed under §401.311 or §401.312.

(27) [(29)] Working days--Working days are Monday through Friday, 8:00 a.m. to 5:00 p.m.

(28) [(30)] Written contract for services--A written contract between the license holder and purchaser of a hearing instrument as set out in §112.140 (relating to Joint Rule Regarding the Sale of Hearing Instruments).

(29) [(31)] 30-day trial period--The period in which a person may cancel the purchase of a hearing instrument.

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 January 25, 2018.

TRD-201800317

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER B. HEARING INSTRUMENT FITTERS AND DISPENSERS ADVISORY BOARD

16 TAC §112.10

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.10.Membership.

The advisory board consists of nine members appointed by the presiding officer of the commission, with the approval of the commission as follows:

(1) six members licensed under this chapter who have been [residents of this state actually] engaged in fitting and dispensing hearing instruments for at least five years preceding appointment, not more than one of whom may be licensed under Chapter 401;

(2) one member who is actively practicing as a physician licensed by the Texas Medical Board and who:

[(A) has been a resident of this state for at least two years preceding appointment;]

(A) [(B)] is a citizen of the United States; and

(B) [(C)] specializes in the practice of otolaryngology; and

(3) two members of the public.

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 January 25, 2018.

TRD-201800318

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER C. EXAMINATIONS

16 TAC §§112.21 - 112.24, 112.26

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.21.Examination Qualifications.

(a) An applicant must qualify to take the written examination and the practical examination. The applicant must also take the jurisprudence examination [Jurisprudence Examination] as described under §112.26, but the applicant does not need to qualify to take the jurisprudence examination [Jurisprudence Examination].

(b) - (e) (No change.)

(f) An applicant must take and pass the examinations and complete all applicable [licensing] requirements within one year after the date the permit or license application is received by the department. [The department may extend this period as prescribed under §112.42 and §112.52.]

§112.22.Examination Tests and Contents.

(a) The examination required under the Act shall consist of a written examination, a practical examination, and a jurisprudence examination [Jurisprudence Examination] as described under §112.26.

(b) The department shall administer or arrange for the administration of the examination.

(1) (No change.)

(2) The practical examination is developed by the department and administered by [the department or] the department's designee.

(3) The jurisprudence examination [Jurisprudence Examination] is developed by the department and administered by the department's designee.

(c) The examination under subsection (a), will test the following areas as they relate to the fitting and dispensing of hearing instruments:

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

(12) counseling [post-counseling] and aural rehabilitation of an individual with a hearing impairment for the purpose of fitting and dispensing hearing instruments;

(13) - (14) (No change.)

(d) (No change.)

§112.23.Examination Scores and Results.

(a) The applicant must pass each part [all parts] of the examination (written, practical, and jurisprudence) with a score of 70 percent or greater.

(b) The department or the department's designee will notify the applicant in writing regarding the applicant's examination scores or results for the written and practical examinations. The department's designee will provide a certificate of completion to the applicant upon passage of the jurisprudence examination [Jurisprudence Examination].

§112.24.Failure of Examination.

An applicant who fails the examination may retake the failed portion or portions of the examination after payment of an additional examination fee. An applicant must hold a current temporary training permit or an out-of-state license under §112.33 in order to retake the failed portion or portions of the examination [be re-examined].

§112.26.Jurisprudence Examination.

(a) To fulfill the requirements under Texas Occupations Code §402.204(b)(14), an applicant must pass the jurisprudence examination [Jurisprudence Examination] prescribed by the department.

(b) The jurisprudence examination [Jurisprudence Examination] is separate from the written and practical examinations under §112.22. The jurisprudence examination [Jurisprudence Examination] tests the applicant's knowledge of the laws, rules and regulations of Texas and of the United States relating to the fitting and dispensing of hearing instruments.

(c) The applicant must register online and pay the jurisprudence examination [Jurisprudence Examination] fee to the third-party provider. The applicant does not need to qualify through the department to take the jurisprudence examination [Jurisprudence Examination].

(d) The applicant must successfully complete the jurisprudence examination [Jurisprudence Examination] and submit a certificate of completion prior to receiving a hearing instrument fitter and dispenser license or an apprentice permit.

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 January 25, 2018.

TRD-201800319

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER D. HEARING INSTRUMENT FITTER AND DISPENSER LICENSE

16 TAC §§112.30, 112.32, 112.33

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.30.Hearing Instrument Fitter and Dispenser License--Application and Eligibility Requirements.

(a) - (b) (No change.)

(c) An applicant must submit the following required documentation:

(1) - (2) (No change.)

(3) the initial application fee required under §112.110.

(d) - (e) (No change.)

§112.32.Hearing Instrument Fitter and Dispenser License--License Term; Renewals.

(a) A hearing instrument fitter and dispenser license is valid for two years from [after] the date of issuance and may be renewed every two years.

(b) (No change.)

(c) To renew a hearing instrument fitter and dispenser license, a license holder must:

(1) submit a completed renewal application on a department-approved form;

[(2) successfully pass a criminal history background check;]

(2) [(3)] except for the first renewal, complete twenty (20) hours of continuing education as required under §112.70;

(3) [(4)] comply with the continuing education audit process described under §112.71, if selected for an audit;

(4) [(5)] provide proof that all equipment that is used by the license holder to produce a measurement in the testing of hearing acuity has been properly calibrated or certified by a qualified technician in accordance with §112.97, within one year prior to the renewal date; and

(5) [(6)] submit the renewal application fee required under §112.110.

(d) A licensee must successfully pass a criminal history background check in order to renew the license; however, the licensee does not need to submit new fingerprints.

(e) [(d)] The commission or department may deny the renewal of the license pursuant to Texas Occupations Code §402.501.

(f) [(e)] Except as provided under subsection (e) [(d)], a license that is not revoked or suspended shall be renewed provided that all other requirements are met.

(g) [(f)] A person whose license has expired may renew the license in accordance with §60.31 and §60.83 of this title.

(h) [(g)] A person whose license has expired shall not practice the fitting and dispensing of hearing instruments.

(i) [(h)] The department shall issue a renewal card to a license holder who has met all the requirements for renewal. The license holder must display the renewal card in association with the license.

§112.33.Application by License Holder From Another State.

(a) - (c) (No change.)

(d) An applicant must submit the following required documentation:

(1) a completed application on a department-approved form;

(2) written verification that the applicant is licensed in good standing as a fitter and dispenser of hearing instruments in another state [and has held the license for at least three years preceding the date of application];

(3) written verification that:

(A) (No change.)

(B) the applicant holds a certification issued by the Board of Certification for Hearing Instrument Sciences (BC-HIS); [and]

(4) a written statement from the licensing entity in the state in which the applicant is licensed that details any disciplinary action taken by the entity against the applicant; [and]

(5) a statement of the applicant's criminal history acceptable to the department; and

(6) the initial application fee required under §112.110.

(e) An applicant for a hearing instrument fitter and dispenser license must submit a completed legible set of fingerprints, on a form prescribed by the department, to the Department of Public Safety or its designee, in a manner prescribed by the Department of Public Safety, for the purpose of obtaining criminal history record information. An applicant must successfully pass a criminal history background check.

(f) [(e)] The department may deny an application under this section based on the applicant's criminal history or an applicant's history of disciplinary action.

(g) [(f)] If the department approves an application, the applicant must take the practical examination and the jurisprudence examination [Jurisprudence Examination ] required under §112.22 and §112.26. If the applicant passes the examinations required under this section, the department shall issue to the applicant a hearing instrument fitter and dispenser license under this chapter.

(h) [(g)] The department may allow an applicant under this section who satisfies all application requirements other than the requirement under subsection (d)(3), to take all sections of the examination required under Texas Occupations Code §402.202. If the applicant passes the examination, the department shall issue to the applicant a hearing instrument fitter and dispenser license under this chapter.

[(h) Pursuant to Texas Occupations Code §402.209(h), an applicant under this section who fails an examination may not retake the examination under this section. The person must comply with the requirements for an applicant for a temporary trainee permit.]

(i) (No change.)

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 January 25, 2018.

TRD-201800320

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER E. APPRENTICE PERMIT

16 TAC §112.40, §112.42

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.40.Apprentice Permit--Application and Eligibility Requirements.

(a) - (b) (No change.)

(c) An applicant for an apprentice permit must:

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

(5) submit a certificate of completion of the jurisprudence examination [Jurisprudence Examination] under §112.26; and

(6) pay the apprentice permit fee required under §112.110.

(d) (No change.)

§112.42.Apprentice Permit--Permit Term; Extension.

(a) An apprentice permit is valid for one year. The department may extend the apprentice permit for an additional period not to exceed one year. An apprentice permit may not be extended more than once.

(b) (No change.)

(c) An apprentice permit holder must successfully pass a criminal history background check to extend the permit.

(d) [(c)] A person whose permit has expired shall not practice the fitting and dispensing of hearing instruments.

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 January 25, 2018.

TRD-201800321

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER F. TEMPORARY TRAINING PERMIT

16 TAC §§112.50, 112.52, 112.53

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.50.Temporary Training Permit--Application and Eligibility Requirements.

(a) - (b) (No change.)

(c) An applicant for a temporary training permit must:

[(1) have never taken the examination administered under this chapter;]

(1) [(2)] provide documentation that the applicant is at least 18 years of age;

(2) [(3)] submit a completed application on a department-approved form;

(3) [(4)] submit one of the following education records:

(A) an official diploma or official transcript indicating graduation from an accredited high school;

(B) a certificate of high school equivalency issued by the appropriate education agency; or

(C) an official diploma or official transcripts from an accredited college or university indicating a college degree was obtained;

(4) [(5)] submit the supervisor statement required under Texas Occupations Code §402.252, on a department-approved form; and

(5) [(6)] pay the temporary training permit fee required under §112.110.

(d) (No change.)

§112.52.Temporary Training Permit--Permit Term; Extension.

(a) - (b) (No change.)

(c) A temporary training permit holder must successfully pass a criminal history background check to extend the permit.

(d) [(c)] A person whose permit has expired[,] shall not practice the fitting and dispensing of hearing instruments.

§112.53.Temporary Training Permit--Supervision and Temporary Training Requirements.

(a) - (h) (No change.)

(i) Pursuant to Texas Occupations Code §402.255(d), the supervisor shall maintain a log of the contact hours by practicum category on a form and in a manner prescribed by the department. After the temporary training permit holder has completed the 150 contact hours under subsection (g), the supervisor and the permit holder shall submit verification of compliance [sign the form, and the form shall be notarized and mailed] to the department, in a manner prescribed by the department.

(j) - (l) (No change.)

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 January 25, 2018.

TRD-201800322

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER H. CONTINUING EDUCATION REQUIREMENTS

16 TAC §112.70

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.70.Continuing Education--Hours and Courses.

(a) (No change.)

(b) Except as provided under subsection (j), a [A] license holder must complete 20 continuing education hours [of continuing education] during each license term. [two-year renewal period. A two-year renewal period begins on the first day after the previous license expiration date and ends on the new license expiration date.]

(c) (No change.)

(d) No more than 10 continuing education hours per license term [renewal period] may be earned from an approved online continuing education course offered by an approved continuing education provider.

(e) No more than 5 continuing education hours per license term [renewal period] may be earned from an approved continuing education course offered by an approved manufacturer continuing education provider.

[(f) Pursuant to Texas Occupations Code §402.304, a license holder may take all three parts of the licensing examination referenced under §112.22, on written request to the department. A license holder who pays the examination fees and passes the examination is exempt from the continuing education requirement for the renewal period in which the examination is taken.]

(f) [(g)] A license holder may be credited with continuing education hours for a published book or article written by the license holder that contributes to the license holder's professional competence. The department may approve credit hours based on the degree that the published book or article advanced knowledge regarding the fitting and dispensing of hearing instruments. No more than 5 contact hours per license term [ renewal period] may be approved for preparation of a publication.

(g) [(h)] Continuing education shall be acceptable if the education is described in subsection (f) [or (g),] or falls in one or more of the following categories:

(1) participation in approved continuing education courses offered by approved continuing education providers;

(2) completion of academic courses at an accredited college or university in areas directly supporting development of skills and competence in the fitting and dispensing of hearing instruments; and/or

(3) participation or teaching in programs directly related to the fitting and dispensing of hearing instruments (e.g., institutes, seminars, workshops, or conferences), which are approved or offered by an accredited college or university.

(h) [(i)] To receive credit for completion of academic work the license holder must submit an official transcript(s) from accredited school(s) showing completion of hours in appropriate areas for which the license holder received a passing grade.

(i) [(j)] The department will not approve continuing education credit for any license holder for:

(1) education incidental to the regular professional activities of a license holder such as knowledge gained through experience or research;

(2) organization activity such as serving on committees or councils or as an officer in a professional organization; and

(3) any program which is not described in, or in compliance with, this section.

(j) [(k)] Pursuant to Texas Occupations Code §402.305, the department may renew the license of a license holder who has not complied with the continuing education requirements if the license holder:

[(1) has served in the regular armed forces of the United States during any part of the twenty-four (24) months before the end of the two-year renewal period;]

(1) [(2)] submits proof from an attending physician that the license holder suffered a serious disabling illness or physical disability that prevented compliance with the continuing education requirements during the twenty-four (24) months before the end of the license term [two-year renewal period]; or

(2) [(3)] was licensed for the first time during the twenty-four (24) months before the end of the license term [two-year renewal period].

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 January 25, 2018.

TRD-201800323

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER I. RESPONSIBILITIES OF THE COMMISSION AND THE DEPARTMENT

16 TAC §112.80

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.80.Rules.

(a) (No change.)

[(b) Pursuant to §51.2031, the department will not propose changes to standards of practice rules unless proposed by the advisory board.]

(b) [(c)] The commission has adopted [will adopt] rules governing changes to the standard [standards] of practice rules pursuant to §51.2031. These rules are located at 16 TAC Chapter 100.

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 January 25, 2018.

TRD-201800324

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER J. RESPONSIBILITIES OF THE LICENSEE

16 TAC §112.92, §112.95

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.92.Consumer Information and Client Records.

(a) A licensee shall inform each client of the name, address, email address, and telephone number of the department for the purpose of filing a complaint or reporting violations of the Act or this chapter on:

(1) each written contract for services; and

(2) a sign prominently displayed in the primary place of business.

(b) A licensee or a hearing instrument fitting and dispensing practice shall provide to a client, who provides a signed, written request, a copy of the client's records that pertain to the testing for, and fitting and dispensing of, hearing instruments.

§112.95.Information on Prospective Amplification Candidates.

A license holder shall try to obtain information on each prospective candidate for amplification in accordance with Texas Occupations Code §402.352.

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 January 25, 2018.

TRD-201800325

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER L. FEES

16 TAC §112.110

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.110.Fees.

(a) - (d) (No change.)

(e) The fees for the written examination, practical examination, and the jurisprudence examination are set by and payable to the department's designee.

[(e) Examination Fees:]

[(1) Initial practical examination fee--$100;]

[(2) Retake practical examination fee--$100;]

[(3) Jurisprudence Examination fee--the fee in the amount charged by the department's designee.]

(f) - (j) (No change.)

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 January 25, 2018.

TRD-201800326

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER M. COMPLAINTS

16 TAC §112.120

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.120.Complaints Regarding Standard of Care.

The commission has adopted [will adopt] rules related to handling complaints regarding standard [standards] of care pursuant to Texas Occupations Code §51.2031. These rules are located at 16 Texas Administrative Code Chapter 100.

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 January 25, 2018.

TRD-201800327

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


SUBCHAPTER N. ENFORCEMENT PROVISIONS

16 TAC §112.130

The amendments are proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.130.Administrative Penalties and Sanctions.

If a person or entity violates any provision of Texas Occupations Code, Chapters 51 or 402, this chapter, or any rule or order of the executive director or commission, proceedings may be instituted to impose administrative penalties, administrative sanctions, or both in accordance with the provisions of Texas Occupations Code, Chapter 51 and 402, as applicable, and any associated rules.

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 January 25, 2018.

TRD-201800328

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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


16 TAC §112.133

The repeal is proposed under Texas Occupations Code, Chapters 51 and 402, 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, 401, and 402. No other statutes, articles, or codes are affected by the proposal.

§112.133.Civil Penalty.

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 January 25, 2018.

TRD-201800316

Brian E. Francis

Executive Director

Texas Department of Licensing and Regulation

Earliest possible date of adoption: March 11, 2018

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