Proposed Rules Title 30

TITLE 30. ENVIRONMENTAL QUALITY

PART 1. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

CHAPTER 17. TAX RELIEF FOR PROPERTY USED FOR ENVIRONMENTAL PROTECTION

The Texas Commission on Environmental Quality (TCEQ, agency, or commission) proposes to amend §17.14 and §17.17.

Background and Summary of the Factual Basis for the Proposed Rules

The proposed rulemaking would amend the provisions in Chapter 17 to update the requirements of the Tax Relief for Pollution Control Property Program based on the recommendations and advice of the Tax Relief for Pollution Control Property Advisory Committee (committee), and other changes identified by the commission. On December 13, 2018, the committee submitted these recommendations to the TCEQ as part of the triennial review of the Tier I Table located in §17.14(a) and the Expedited Review List (ERL or k-list) included as part of §17.17(b). Subsequently, in a letter dated December 9, 2019, the committee advised the commission on how to determine use percentages for heat recovery steam generator (HRSG) property applications. HRSGs are typically used in the production of electricity, allowing a power plant to increase production efficiency by using waste heat from combustion to generate steam that drives a steam turbine to produce additional electricity. The commission solicited advice from the committee in response to the May 3, 2019 opinions by the Texas Supreme Court in Brazos Electric Power Cooperative v. Texas Commission on Environmental Quality, 576 S.W.3d 374 (Tex. 2019) and Texas Commission on Environmental Quality v. Brazos Valley Energy LLC, 582.W.3d 277 (Tex. 2019), concerning HRSG use determinations.

The commission is required by §17.14(b) to review, and update as necessary, the items on the Tier I Table included in §17.14(a) at least once every three years. The commission is also required by Texas Tax Code, §11.31(l) to review, and update as necessary, the items on the ERL at least once every three years. The committee evaluated the Tier II and Tier III applications submitted from 2014 through 2018 that received positive use determinations (PUD) to determine whether the pollution control property, if any, had been demonstrated consistently to be wholly used as pollution control property in the same manner on each application for any given property. The committee determined that 11 types of pollution control property currently submitted as Tier II property should instead be considered Tier I property in the Tier I Table and no longer require a Tier II application. This rulemaking would fulfill the requirements for the commission to review and update the property included on the ERL and Tier I Table in Chapter 17 at least once every three years.

This proposed rulemaking would amend Chapter 17 to resolve outstanding issues stemming from the Texas Supreme Court's May 3, 2019 opinions regarding lawsuits filed after the commission upheld 21 negative use determinations (NUDs) for HRSGs at power plants, in addition to addressing changes related to the triennial review of the ERL and Tier I Table. HRSGs are included on the property listed at Texas Tax Code, §11.31(k), and in §17.17(b) as the ERL. Property on the k-list consists of facilities, devices, or methods for the control of air, water, or land pollution for which an application may be submitted to the TCEQ requesting a use determination for an ad valorem tax exemption.

Applications for use determinations may be submitted under Tier I, Tier II, Tier III, and, previously, Tier IV status. A Tier I application may be submitted for property used listed on the Tier I Table that is used wholly for pollution control and used for pollution control in accordance with the description listed in the Tier I Table for that property type. A Tier II application may be submitted for property that is not listed on the Tier I Table but is used wholly for the control of air, water, and/or land pollution but is not located on the Tier I Table. A Tier III application must be submitted for property that is used partially for pollution control. For Tier III applications, a cost analysis procedure (CAP) is used to determine the proportion of the property used for pollution control purposes. Tier IV applications were previously submitted for property listed on the k-list and included the applicants' proposed method for calculating a use percentage. Tier IV applications were eliminated in a rulemaking adopted by the commission on November 18, 2010 (35 TexReg 10964) to implement the uniformity requirements added to Texas Tax Code, §11.31 with the passage of House Bill (HB) 3206 and HB 3544, 81st Texas Legislature, 2009.

The Tier III CAP methodology compares the property containing pollution control features to similar property without those pollution control features and accounts for the value of any marketable product produced by the property. The Tier III review methodology ensures the inputs for all applications submitted within the Tier III level are reviewed consistently and that use determinations are issued based on calculations of the actual use percentage for each individual case. However, if the commission has sufficient information to establish partial use percentages appropriate to all property within a category of equipment, the commission may add it to the Tier I Table with the associated partial use percentage.

In 2008, 2009, and 2012, Tier III and Tier IV applications were submitted to the TCEQ Tax Relief for Pollution Control Property Program requesting PUDs for HRSGs and associated equipment at Texas power plants. The TCEQ executive director issued NUDs for the HRSG applications submitted, and 17 appeals were filed. At the September 24, 2014, Commissioners' Agenda, the commission affirmed the executive director's NUDs and denied all 17 of the appeals. In response, 12 lawsuits were filed. The lawsuits were consolidated for trial and divided into two groups based on the type of application submitted, either Tier III or Tier IV. The district court upheld the TCEQ's determinations for both groups, but the rulings were appealed. The appellate court hearing the Tier III group affirmed the TCEQ's reading of Texas Tax Code, §11.31 and its NUDs. The appellate court hearing the Tier IV group disagreed with the TCEQ's arguments concerning the k-list and found that the TCEQ abused its discretion in issuing NUDs for the HRSGs. Petitions for Review were filed with the Texas Supreme Court for both cases.

The Texas Supreme Court held that the TCEQ abused its discretion in issuing NUDs and remanded the cases to the commission for further proceedings consistent with its findings. The Texas Supreme Court found that Texas Tax Code, §11.31 entitles a person to an exemption from ad valorem taxation for property that the person owns and that is used, in whole or in part, to control pollution. The Texas Supreme Court also found that for property on the k-list, the executive director's sole responsibility is to determine what proportion of the property is purely productive and what proportion is for pollution control. However, the executive director may not determine that the pollution control proportion is zero or negative. Finally, the Texas Supreme Court also found that the TCEQ, through rulemaking, may remove an item "from the list if the commission finds compelling evidence to support the conclusion that the item does not provide pollution control benefits." The commission has not found compelling evidence to support removal of HRSGs from the k-list; therefore, the commission must find that HRSGs qualify, at least in part, as pollution control property. The Texas Supreme Court did not identify the method to determine use percentages for HRSGs nor did the Texas Supreme Court address the CAP formula or its application.

To examine these issues and the Texas Supreme Court's findings as they relate to future HRSG applications, the commission solicited advice from the committee. In a letter dated July 19, 2019, the TCEQ asked the committee to analyze three questions in its review of the issues: 1) whether the current CAP is adequate to determine use percentages for HRSGs; 2) if the CAP is inadequate, what is an appropriate method for determining use percentages for HRSGs; and 3) whether HRSGs should be removed from the ERL. In a response letter dated December 9, 2019, the committee submitted its formal majority report and recommendation.

This proposed rulemaking addresses the committee's December 9, 2019 recommendation concerning HRSGs and its December 13, 2018 recommendations regarding the Tier I Table and ERL, except when deviation from these recommendations is needed to ensure the rule appropriately and consistently describes pollution control property eligible for a PUD under the Tax Relief for Pollution Control Property Program. In addition, the commission proposes amendments, as necessary, that were not specifically recommended by the committee but that remain consistent with its advice and to accommodate the addition of HRSGs to the Tier I Table. Non-substantive revisions are proposed to the sections open to address Chapter 17 Tier I Table and associated changes.

In a concurrent rulemaking, the commission proposes to amend the provisions in Chapter 18, Rollback Relief for Pollution Control Requirements, to mirror the proposed changes in Chapter 17.

Section by Section Discussion

The revisions proposed to Chapter 17 are intended to make the rules consistent with the committee's recommendations provided to the commission, except where explicitly discussed. The committee recommended, and the commission proposes, adding specific pollution control property to the Tier I Table in §17.14(a). Under the current rules, §17.14(a) requires an applicant to submit a Tier III application for any of the proposed property additions if the property is used for pollution control purposes at a percentage different than what is listed on the table or, at the request of the executive director, if the equipment is not being used in a standard manner. These existing criteria in §17.14(a) are not proposed for revision. Any of the property proposed for inclusion in the Tier I Table will need to continue to adhere to these existing requirements.

§17.14, Tier I Pollution Control Property

The proposed changes to §17.14 include amending the rule language to allow items listed on the Tier I Table with partial use percentages to be eligible for a Tier I application and to add additional property to the Tier I Table. Each property item in the Tier I Table currently has a table number, the media, property name, property description, and use percentage. The proposed additions to the Tier I Table also include this same information.

The proposed amendments to §17.14(a) clarify that a Tier III application is still required if a marketable product is recovered from property listed in the Tier I Table unless that property is designated with a partial use percentage on the Tier I Table. This revision is necessary because current subsection (a) directs an applicant to file a Tier III application if a marketable product is recovered from the property listed in the Tier I Table, without exception. Because HRSGs may generate a marketable product, which was considered during the calculation of the appropriate use percentage and is accounted for in the 65% partial use determination proposed in this rulemaking, the eligibility description is amended to indicate property items listed on the Tier I Table with a partial use percentage may nevertheless be eligible for Tier I applications.

The commission proposes to amend the first sentence of the introductory paragraph to the Tier I Table in §17.14(a) to require a Tier I application for the property listed in the table whether it is used wholly or partly for pollution control purposes. The existing requirement in subsection (a) designates that a Tier I application is required for property used wholly, or 100%, as pollution control property. However, the proposed amendment to the Tier I Table includes HRSGs at a partial use percentage of 65%. Therefore, under the proposed rule, Tier I applications for HRSGs would be appropriate. The commission further proposes adding an exception for HRSGs listed as a partial use percentage from the description of the Tier I Table contents. This proposed revision accommodates the addition of HRSGs to the Tier I Table, which currently only contains property used wholly as pollution control. The table would be expanded to include HRSGs as the only piece of property eligible for a Tier I PUD at a partial use percentage. Although all the other property currently listed in the Tier I Table must be used wholly for pollution control property to be eligible for filing as a Tier I application, the commission previously listed property with partial use percentages on the Tier I Table. The property was subsequently removed because the usage of such property could not be definitively verified as representative of standard use based on the information available about the uses of the property at the time. However, for this proposed rulemaking, the committee reviewed current data and determined 65% reasonably represents the proportion of HRSGs used as pollution control when HRSGs are used in a standard manner.

The commission proposes item numbers A-90, A-91, A-116 through A-120, A-190, S-29, M-23 and M-24 for addition to the Tier I Table in §17.14(a), all at 100% pollution control property. Items A-90, A-91, A-116 through A-120, A-190, and M-23 would be added as the committee recommended. The commission agrees with the committee's recommendations to revise §17.14(a) and add Dry Low-NO_x Emissions Systems; Lean-Burn Portions of Reciprocating Engines; Fixed Storage Tank Roofs; Submerged Fill Pipes; Dual Mechanical Pump Seals; Seal-less Pumps; Airless Paint Spray Guns; and Remote Controlled Block Valves to the Tier I Table because they are used wholly for pollution control purposes. These items are described in the proposed rule language and are not further discussed in the Section by Section Discussion of this preamble.

For each of the items proposed for addition to the Tier I Table, the committee based its recommendation that this property should be Tier I level property on historical Tier II application submittals that demonstrated the property was consistently used wholly for pollution control, as discussed in the background and summary portion of this preamble. The proposed item numbers would designate air pollution control equipment, indicated by the letter "A," solid waste management pollution control equipment, indicated by the letter "S," and miscellaneous pollution control equipment, indicated by the letter "M," as recommended by the committee in its December 2018 formal majority report. The committee's recommendation to add the property to the Tier I Table was based on its review and analysis of Tier II applications submitted from 2014 through 2018 that consistently received a PUD of 100% each time an applicant requested a use determination for such property. Although the proposed item numbers are added to the Tier I Table at 100% pollution control property, an applicant is still required under §17.14(a) and §17.17(a) to submit a Tier III application if such property has productive benefit or is not used as described in the table.

The commission proposes to add item number A-92 to the Tier I Table for HRSGs. The proposed property item would be listed as a boiler designed to capture waste heat from combustion turbine exhaust for the generation of steam while reducing unit output-based emissions and a partial use determination of 65%. To arrive at the 65% partial use percentage, the committee evaluated data provided in the 2019 Gas Turbine World Handbook and calculated the average of both the environmental benefit and the productive benefit of a combined-cycle plant operating a HRSG versus a similar simple-cycle plant without a HRSG. For the environmental benefit estimation, the committee considered the best available control technology (BACT) emission limit for a combined-cycle facility of 2 parts per million (ppm) and for a simple-cycle facility of 5 ppm to determine the decrease in nitrogen oxides emissions between two types of facilities on a pound per megawatt-hour basis. To determine the production benefit, the committee calculated both the average increase in plant output and average improvement in heat rate attributable to combine-cycle operation (due to the HRSG) when compared to simple-cycle operation. The committee averaged the percentage results for the environmental benefit and the nonproductive use to derive an environmental use of 65%. The commission agrees with the approach recommended by the committee to derive a 65% PUD for a HRSG.

The commission proposes to amend the Tier I Table in §17.14(a) to add item S-29 for reclamation equipment. The proposed property description excludes commercial reclamation equipment from eligibility as Tier I property. Commercial reclamation equipment is equipment owned and rentable by companies that provide reclamation services. The committee did not identify the explicit exclusion of commercial reclamation equipment in its recommendation. However, the commission proposes to clarify that the construction equipment used for commercial land reclamation purposes from which the environmental benefit is derived from the use or characteristics of the good or service produced or provided, would not be entitled to a PUD under the Tax Relief for Pollution Control Property Program. Equipment used for such purposes are prohibited by the provisions in §17.6(1)(A) and (B) and Texas Tax Code, §11.31(a).

The commission proposes to amend the Tier I Table in §17.14(a) to add item M-24 for nondestructive pipeline testing to the Tier I Table. The commission proposes a change to the committee's recommended proposed property description to clarify the property that is intended to be eligible, and property intended to be ineligible, as Tier I Table property. The committee recommended expenditures such as radiography as the Tier I Table description. Instead, the commission proposes that expenditures used for nondestructive pipeline testing are explicitly included, but expenditures used for non-pollution control purposes are explicitly excluded. The explicit inclusion of nondestructive pipeline testing as part of the proposed property description is necessary to state the item that is intended to be covered as the Tier I property rather than only providing an example of the property. The explicit exclusion of expenditures for non-pollution control purposes maintains consistency with requirements in §17.4(a) requiring that eligible property meet or exceed environmental requirements for pollution control.

§17.17, Partial Determinations

The commission proposes to amend §17.17(a) to add language that clarifies what property requires a Tier III application. The proposed revisions state that a Tier III application requesting a partial determination must be submitted for all property that is either not used as described in the Tier I Table located in §17.14(a), or does not fully satisfy the requirements for a 100% PUD under Chapter 17. For example, HRSG applications are required to be Tier III applications if the HRSG is used differently than described in the proposed Tier I Table. This proposed change was not recommended by the committee explicitly but is captured in the committee's acknowledgement that revisions other than those specifically contained in the December 2019 letter may be needed to accomplish the goal of the proposed rulemaking. The commission's proposed language to §17.17(a) would ensure that if the use of any of the property proposed to be added to the Tier I Table in §17.14(a) deviates from the pollution control property description within the table, the environmental use is appropriately considered and accounted for as was intended in the program's design.

The proposed amendment to §17.17(a) differs from the proposed changes to 30 TAC §18.30 in the concurrent rulemaking because the existing rule language in each is not the same; however, the intent of both proposed revisions is the same.

The commission proposes amendments to the ERL in §17.17(b) to revise the description for HRSGs, listed as item number B-8. The committee recommended describing a HRSG in the §17.14(a) Tier I Table as a boiler designed to capture waste heat from combustion turbine exhaust for the generation of steam while reducing unit output-based emissions. Although the committee did not recommend any changes to the existing ERL, the commission proposes replacing the existing HRSG description in the ERL in §17.17(b) with the committee's recommended HRSG description. This proposed change streamlines the description of HRSG and specifies the property intended to qualify as a HRSG under the Chapter 17 rules. The proposed change to the ERL was not explicitly recommended by the committee but remains consistent with its advice. This proposed amendment to the ERL is not intended to change the type of property currently covered under the Tax Relief for Pollution Control Property Program. The proposed change to the HRSG description in the Chapter 17, §17.17(b) ERL is also proposed to the Chapter 18, §18.26 ERL to maintain consistency between the Chapters 17 and 18 programs.

Fiscal Note: Costs to State and Local Government

Jené Bearse, Analyst in the Budget and Planning Division, determined that for the first five-year period the proposed rules are in effect, fiscal implications may be anticipated for the agency due to a possible decrease in fee revenue.

This rulemaking states that certain Tier II pollution control property should instead be considered Tier I property in the Tier I Table; this removes the requirement for a Tier II application for those property owners. The rulemaking also adds HRSGs to the Tier I Table. These changes may have a fiscal impact to the agency because the Tier I application fees are less than the Tier II application fees. The application fee for Tier I is $150; the Tier II application fee is $1,000. Because this rulemaking expands the properties eligible under the Tier I Table and reduces those eligible to be submitted in a Tier II application, the agency may experience a decrease in fee revenue. The amount of the revenue decrease cannot be determined because the program is voluntary, and the property types vary from year to year.

The rulemaking may also have an impact to units of local government because of the inclusion of HRSGs in the Tier I Table. Once an applicant receives a PUD from the commission, then they are able to submit that for an exemption from local property taxes. The effect on local property tax revenue cannot be determined because the program is voluntary, and the property types submitted for PUDs vary from year to year.

Public Benefits and Costs

Ms. Bearse determined that for each year of the first five years the proposed rules are in effect, the public benefit anticipated will be compliance with the state law and regulations that require a review of the Tier I Table and ERL every three years. In this review, the commission is proposing changes to the Tier I Table, and to the ERL only for consistency with the Tier I Tables changes. In addition, the public will benefit because portions of this rulemaking will bring the regulations into compliance with the May 3, 2019 rulings by the Texas Supreme Court.

The proposed rulemaking may result in a fiscal implication for businesses or individuals because of the reclassification of certain types of property in the Tier I Table. This may result in a decrease in application fees paid to the agency. The exact level of fiscal impact cannot be determined because it is a voluntary program and property types submitted for PUDs vary from year to year.

Local Employment Impact Statement

The commission reviewed this proposed rulemaking and determined that a Local Employment Impact Statement is not required because the proposed rulemaking does not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect.

Rural Communities Impact Assessment

The commission reviewed this proposed rulemaking and determined that the proposed rulemaking does not adversely affect rural communities in a material way for the first five years that the proposed rules are in effect. The amendments would apply statewide and have the same effect in rural communities as in urban communities.

Small Business and Micro-Business Assessment

No adverse fiscal implications are anticipated for small or micro-businesses due to the implementation or administration of the proposed rules for the first five-year period the proposed rules are in effect.

Small Business Regulatory Flexibility Analysis

The commission reviewed this proposed rulemaking and determined that a Small Business Regulatory Flexibility Analysis is not required because the proposed rulemaking does not adversely affect a small or micro-business in a material way for the first five years the proposed rules are in effect.

Government Growth Impact Statement

The commission prepared a Government Growth Impact Statement assessment for this proposed rulemaking. The proposed rulemaking does not create or eliminate a government program and will not require an increase or decrease in future legislative appropriations to the agency. The proposed rulemaking does not require the creation of new employee positions or eliminate current employee positions. The proposed rulemaking may result in a decrease in fees paid to the agency. The proposed rulemaking does not create, expand, repeal or limit an existing regulation, nor does the proposed rulemaking increase or decrease the number of individuals subject to its applicability. During the first five years, the proposed rules should not impact the state's economy positively or negatively.

Draft Regulatory Impact Analysis Determination

The commission reviewed the proposed amendments in light of the regulatory analysis requirements of Texas Government Code, §2001.0225 and determined the rules do not meet the definition of a "Major environmental rule." Under Texas Government Code, §2001.0225, a "Major environmental rule" means a rule, the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. Furthermore, it does not meet any of the four applicability requirements listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225 applies only to a major environmental rule that: 1) exceeds a standard set by federal law, unless the rule is specifically required by state law; 2) exceeds an express requirement of state law, unless the rule is specifically required by federal law; 3) exceeds a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopts a rule solely under the general powers of the agency instead of under a specific state law. The proposed rulemaking amends the Tax Relief for Pollution Control Property rules. Because the proposed rules are not specifically intended to protect the environment or reduce risks to human health from environmental exposure but to implement a tax relief program, this rulemaking is not a major environmental rule and does not meet any of the four applicability requirements. These rules would not result in any new environmental requirements and should not adversely affect in a material way the economy, a sector of the economy, productivity, competition, or jobs. The commission invites public comment regarding this draft regulatory impact analysis determination.

Written comments on the Draft Regulatory Impact Analysis may be submitted to the contact person at the address listed under the Submittal of Comments section of this preamble.

Takings Impact Assessment

The commission evaluated these proposed rules and performed a preliminary assessment of whether Texas Government Code, Chapter 2007 is applicable. The commission's preliminary assessment indicates Texas Government Code, Chapter 2007 does not apply to these proposed amendments. Enforcement of these proposed rules would be neither a statutory nor constitutional taking of private real property. Specifically, the proposed rules do not affect a landowner's rights in private real property because this rulemaking action does not burden, restrict, or limit the owner's rights to property or reduce its value by 25% or more beyond which would otherwise exist in the absence of the proposed regulations.

Consistency with the Coastal Management Program

The commission reviewed the proposed rules and found that they are neither identified in Coastal Coordination Act implementation rules, 31 TAC §505.11(b)(2) or (4), nor will they affect any action/authorization identified in Coastal Coordination Act implementation rules, 31 TAC §505.11(a)(6). Therefore, the proposed rules are not subject to the Texas Coastal Management Program.

Written comments on the consistency of this rulemaking may be submitted to the contact person at the address listed under the Submittal of Comments section of this preamble.

Submittal of Comments

Written comments may be submitted to Gwen Ricco, MC 205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to fax4808@tceq.texas.gov. Electronic comments may be submitted at: https://www6.tceq.texas.gov/rules/ecomments/. File size restrictions may apply to comments being submitted via the eComments system. All comments should reference Rule Project Number 2020-031-018-AI. The comment period closes on August 31, 2020. Copies of the proposed rulemaking can be obtained from the commission's website at https://www.tceq.texas.gov/rules/propose_adopt.html. For further information, please contact Elizabeth Sartain, Air Quality Planning Section, at (512) 239-3933.

Statutory Authority

The amendments are proposed under Texas Water Code (TWC), §5.102, which authorizes the commission to perform any acts authorized by the TWC or other laws that are necessary and convenient to the exercise of its jurisdiction and powers; and TWC, §5.103, which authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC. The rules are also proposed under Texas Tax Code, §11.31, which authorizes the commission to adopt rules to implement the Pollution Control Property Tax Exemption.

The proposed amendments implement Texas Tax Code, §11.31.

§17.14.Tier I Pollution Control Property.

(a) For the property listed in the Tier I Table located in this subsection that is used wholly for pollution control purposes, a Tier I application is required. A Tier I application must not include any property that is not listed in this subsection or that is used for pollution control purposes at a use percentage that is different than what is listed in the table. Unless otherwise designated with a partial use percentage on the Tier I Table, if [If] a marketable product is recovered (not including materials that are disposed) from property listed in this subsection, a Tier III application is required.

Figure: 30 TAC §17.14(a) (.pdf)

[~~Figure: 30 TAC §17.14(a)~~]

(b) The commission shall review and update the Tier I Table at least once every three years.

(1) The commission may add an item to the table only if there is compelling evidence to support the conclusion that the item provides pollution control benefits and a justifiable pollution control percentage is calculable.

(2) The commission may remove an item from the table only if there is compelling evidence to support the conclusion that the item does not render pollution control benefits.

§17.17.Partial Determinations.

(a) A Tier III application requesting a partial determination must be submitted for all property that is either not used as described on the Tier I Table located in §17.14(a) of this title (relating to Tier I Pollution Control Property), or does not fully satisfy the requirements for a 100% positive use determination under this chapter. For all property for which a partial use determination is sought, the cost analysis procedure (CAP) described in subsection (c) of this section must be used.

(b) The Expedited Review List in this subsection is adopted as a nonexclusive list of facilities, devices, or methods for the control of air, water, and/or land pollution. This table consists of the list located in Texas Tax Code, §11.31(k) with changes as authorized by Texas Tax Code, §11.31(l). The commission shall review and update the items listed in this table only if there is compelling evidence to support the conclusion that the item provides pollution control benefits. The commission may remove an item from this table only if there is compelling evidence to support the conclusion that the item does not render pollution control benefits.

Figure: 30 TAC §17.17(b) (.pdf)

[~~Figure: 30 TAC §17.17(b)~~]

(c) Consistent with subsection (a) of this section, the following calculation (cost analysis procedure) must be used to determine the creditable partial percentage for a property that is filed on a Tier III application:

(1) If no marketable product results from the use of the property, use the following equation and enter "0" for the net present value of the marketable product (NPVMP):

Figure: 30 TAC §17.17(c)(1) (No change.)

(2) For property that generates a marketable product (MP), the net present value (NPV) of the MP is used to reduce the partial determination when used in the equation in the figure in paragraph (1) of this subsection. The value of the MP is calculated by subtracting the production costs of the MP from the market value of the MP. This value is then used to calculate the NPV of the MP (NPVMP) over the lifetime of the equipment. The equation for calculating NPVMP is as follows:

Figure: 30 TAC §17.17(c)(2) (No change.)

(d) If the cost analysis procedure of this section produces a negative number or a zero, the property is not eligible for a positive use 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 July 17, 2020.

TRD-202002948

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: August 30, 2020

For further information, please call: (512) 239-2678

CHAPTER 18. ROLLBACK RELIEF FOR POLLUTION CONTROL REQUIREMENTS

30 TAC §§18.25, 18.26, 18.30

The Texas Commission on Environmental Quality (TCEQ, agency, or commission) proposes to amend §§18.25, 18.26, and 18.30.

Background and Summary of the Factual Basis for the Proposed Rules This proposed rulemaking implements Senate Bill (SB) 2, Section 44, 86th Texas Legislature, 2019, which requires revising the title of Chapter 18 from "Rollback Relief for Pollution Control Requirements" to" Voter-Approval Tax Rate Relief for Pollution Control Requirements."

The proposed rulemaking would amend the provisions in Chapter 18 to mirror the changes proposed in the concurrent proposal to amend 30 TAC Chapter 17. The TCEQ proposes amendments to Chapter 17 to update requirements for the Tax Relief for Pollution Control Property Program based on formal recommendations and advice submitted to the commission by the Tax Relief for Pollution Control Property Advisory Committee (committee), and other changes identified by the TCEQ. The committee does not provide advice on the Voter-Approval Tax Rate Relief for Pollution Control Program, but the TCEQ proposes amendments to Chapter 18 to keep the rules for the two programs consistent.

The committee submitted a set of recommendations in a letter dated December 13, 2018 as part of a triennial review of the Tier I Table at 30 TAC §17.14(a) and the Expedited Review List (ERL or k-list) at 30 TAC §17.17(b). Subsequently, in a letter dated December 9, 2019, the committee advised the commission on how to determine use percentages for heat recovery steam generator (HRSG) property applications. The commission solicited this advice in response to the May 3, 2019 opinions of the Texas Supreme Court in Brazos Electric Power Cooperative v. Texas Commission on Environmental Quality, 576 S.W.3d 374 (Tex. 2019) and Texas Commission on Environmental Quality v. Brazos Valley Energy LLC, 582.W.3d 277 (Tex. 2019) concerning HRSG use determinations under Chapter 17 and Texas Tax Code, §11.31.

HRSGs are typically used in the production of electricity, allowing a power plant to increase production efficiency by using waste heat from combustion to generate steam that drives a steam turbine to produce additional electricity. The revisions proposed to address HRSGs in this rulemaking are based on proposed amendments to Chapter 17 intended to resolve outstanding issues stemming from the Texas Supreme Court's May 3, 2019 opinions regarding lawsuits filed after the commission upheld 21 negative use determinations (NUDs) for HRSGs at power plants. Because HRSGs are included on the property listed at Texas Tax Code, §11.31(k), and in §17.17(b) as the ERL, an applicant may submit an application to the TCEQ requesting a use determination for an ad valorem tax exemption. Applications were submitted in 2008, 2009, and 2012, to the Chapter 17 Tax Relief for Pollution Control Program requesting PUDs for HRSGs and associated equipment at Texas power plants. The TCEQ executive director issued NUDs for the HRSG applications submitted, and 17 appeals were filed. At the September 24, 2014 Commissioners' Agenda, the commission affirmed the executive director's NUDs and denied all 17 of the appeals. In response, 12 lawsuits were filed. The lawsuits were consolidated for trial and divided into two groups based on the tier of application submitted, either Tier III or Tier IV. The district court upheld the TCEQ's determinations for both groups, but the rulings were appealed. The appellate court hearing the Tier III group affirmed the TCEQ's reading of Texas Tax Code, §11.31 and its NUDs. The appellate court hearing the Tier IV group disagreed with the TCEQ's arguments concerning the k-list and found that the TCEQ abused its discretion in issuing NUDs for the HRSGs. Petitions for Review were filed with the Texas Supreme Court for both cases.

The Texas Supreme Court held that the TCEQ abused its discretion in issuing NUDs and remanded the cases to the commission for further proceedings consistent with its findings. The Texas Supreme Court found that Texas Tax Code, §11.31 entitles a person to an exemption from ad valorem taxation for property that the person owns and that is used, in whole or in part, to control pollution. The Texas Supreme Court also found that for property on the k-list, the executive director's sole responsibility is to determine what proportion of the property is purely productive and what proportion is for pollution control. However, the executive director may not determine that the pollution control proportion is zero or negative. Finally, the Texas Supreme Court also found that the TCEQ, through rulemaking, may remove an item "from the list if the commission finds compelling evidence to support the conclusion that the item does not provide pollution control benefits." The commission has not found compelling evidence to support removal of HRSGs from the k-list; therefore, the commission must find that HRSGs qualify, at least in part, as pollution control property. The Texas Supreme Court did not identify the method to determine use percentages for HRSGs, nor did the Texas Supreme Court address the CAP formula or its application.

Additionally, the commission proposes amendments to Chapter 18 to incorporate property additions to the Tier I Table for property determined by the committee to consistently be used as 100% pollution control in each application submitted for such property between 2014 and 2018 to the Chapter 17 Tax Relief for Pollution Control Property Program. The committee evaluated the Tier II and Tier III applications that received PUDs as part of the triennial review required by Texas Tax Code, §11.31(l) for Chapter 17 and determined that 11 types of pollution control property currently submitted as Tier II property should instead be considered Tier I property in the Tier I Table and no longer require a Tier II application. Under Chapter 18, an application submitted for a PUD for property not on the Tier I Table in §18.25(a) would be submitted as a Tier II application consistent with §18.26, requiring the applicant to propose a reasonable method for calculating a partial determination.

Because Chapter 18 is not in the committee's scope of review, it did not consider the ERL in Texas Tax Code, §26.045(f), codified in §18.26, or the Tier I Table in §18.25(a). Both Chapter 18 tables are identical to the ERL in §17.17(a) and the Tier I Table in §17.14(a), respectively. The committee did not recommend any changes for the ERL in §17.17(a). However, the commission proposes changes to the ERL in §17.17(a) to establish consistency with the HRSG description proposed in the Tier I Table in §17.14(a); therefore, these same changes are proposed to the ERL in §18.26. In the associated rule project for Chapter 17, several changes are also proposed to the Tier I Table in §17.14(a) based on the committee's recommendations; therefore, the commission proposes corresponding changes to the Tier I Table in §18.25(a). The proposed changes would afford applicants applying under the Chapter 18 rules the same opportunities to receive PUDs for property proposed to be submitted as Tier I property as applicants applying under the Chapter 17 rules.

In addition, the commission proposes amendments, as necessary, that were not specifically recommended by the committee but that remain consistent with its advice and to accommodate the addition of HRSGs to the Tier I Table. Non-substantive revisions are proposed to the sections open to address Chapter 18 Tier I Table and associated changes.

The TCEQ is required to review, and update as necessary, the items in the Tier I Table in §18.25(a) every three years per §18.25(b). Likewise, the TCEQ is required to review, and update as necessary, the items in the ERL in §18.26 every three years per Texas Tax Code, §26.045(g). This rulemaking would fulfill the requirements for the commission to review, and update as necessary, the property included on the ERL and Tier I Table in Chapter 18 at least once every three years.

Section by Section Discussion

The commission proposes to amend the title of Chapter 18 from "Rollback Relief for Pollution Control Requirements" to "Voter-Approval Tax Rate Relief for Pollution Control Requirements" to implement SB 2, Section 44. Aside from the revision to change the title of Chapter 18, as required by SB 2, Section 44, the proposed revisions to Chapter 18 are consistent with those for Chapter 17 in the associated rulemaking. Those revisions are proposed based on the recommendations from the committee, except where explicitly discussed. This proposed rulemaking adds specific pollution control property to the Tier I Table in §18.25(a). Under the current rules, §18.25(a) requires applicants to submit a Tier II application for any of the proposed property additions if the property is used for pollution control purposes at a percentage different than what is listed on the table or, at the request of the executive director, if the equipment is not being used in a standard manner. These existing criteria in §18.25(a) are not proposed for revision. Any of the property proposed for inclusion in the Tier I Table would need to continue to adhere to these existing requirements.

§18.25, Tier I Eligible Equipment

The proposed changes to §18.25 include amending the rule language to allow items listed on the Tier I Table located in §18.25(a) with partial use percentages to be eligible for a Tier I application and to add additional property to the Tier I Table. Each property item in the Tier I Table currently has a table number, the media, property name, property description, and use percentage. The proposed additions to the Tier I Table also include this same information.

The proposed amendment to §18.25(a) would clarify that a Tier II application is still required if a marketable product is recovered from property listed in the Tier I Table, unless that property is designated with a partial use percentage on the Tier I Table. This revision is necessary because subsection (a) currently directs an applicant to file a Tier II application if a marketable product is recovered from the property listed in the Tier I Table, without exception. Because HRSGs may generate a marketable product, which was considered during the calculation of the appropriate use percentage and is accounted for in the 65% partial use determination proposed in this rulemaking, the eligibility description is amended to indicate property items listed on the Tier I Table with a partial use percentage may nevertheless be eligible for Tier I applications.

The commission proposes to amend the first sentence of the introductory paragraph to the Tier I Table in §18.25(a) to require a Tier I application for the property listed in the Tier I Table whether it is used wholly or partly for pollution control purposes. The existing requirement in subsection (a) designates that a Tier I application is required for property used wholly, or 100%, as pollution control property. However, the proposed amendment to the Tier I Table includes HRSGs at a partial use percentage of 65%. Therefore, under the proposed rule, Tier I applications for HRSGs would be appropriate. The commission further proposes to add an exception for HRSGs listed as a partial use percentage from the description of the Tier I Table contents. This proposed revision accommodates the addition of HRSGs to the Tier I Table, which currently only contains property used wholly as pollution control. The table would be expanded to include HRSGs as the only piece of property eligible for a Tier I PUD at a partial use percentage. Although all the other property currently listed in the Tier I Table must be used wholly for pollution control property to be eligible for filing as a Tier I application, the commission previously listed property with partial use percentages on the Tier I Table. The property was subsequently removed because the usage of such property could not be definitively verified as representative of standard use based on the information available about the uses of the property at the time. However, for this proposed rulemaking, the committee reviewed current data and determined 65% reasonably represents the proportion of HRSGs used as pollution control when HRSGs are used in a standard manner.

The commission proposes item numbers A-90, A-91, A-116 through A-120, A-190, S-29, M-23 and M-24 for addition to the Tier I Table in §18.25(a), all at 100% pollution control property based on the recommendations of the advisory committee concerning the Tier I Table of Chapter 17. Items A-90, A-91, A-116 through A-120, A-190, and M-23 would be added as the committee recommended. The commission agrees with the committee's recommendations to revise the Tier I Table and add Dry Low-NO_X Emissions Systems; Lean-Burn Portions of Reciprocating Engines; Fixed Storage Tank Roofs; Submerged Fill Pipes; Dual Mechanical Pump Seals; Seal-less Pumps; Airless Paint Spray Guns; and Remote Controlled Block Valves to the Tier I Table because they are used wholly for control purposes. These items are described in the proposed rule language and are not further discussed in the Section by Section Discussion section of this preamble.

For each of the items proposed for addition to the Tier I Table, the committee based its recommendation that this property should be Tier I level property on historical Tier II application submittals, under the Tax Relief for Pollution Control Property Program in Chapter 17, that demonstrated the property was consistently used wholly for pollution control, as discussed in the Background and Summary of Factual Basis for the Proposed Rules section of this preamble. The proposed item numbers would designate air pollution control equipment, indicated by the letter "A," solid waste management pollution control equipment, indicated by the letter "S," and miscellaneous pollution control equipment, indicated by the letter "M," as recommended by the committee in its December 2018 formal majority report. The committee's recommendation to add the property to the Tier I Table was based on its review and analysis of Tier II applications submitted from 2014 through 2018 that consistently received a PUD of 100% each time an applicant requested a use determination for such property. Although the proposed item numbers are added to the Tier I Table at 100% pollution control property, an applicant is still required under §18.25(a) to submit a Tier II application if such property has productive benefit or is not used as described in the table.

The commission proposes to add item number A-92 to the Tier I Table for HRSGs. The proposed property item would be listed as a boiler designed to capture waste heat from combustion turbine exhaust for the generation of steam while reducing unit output-based emissions with a partial use determination of 65%. To arrive at the 65% partial use percentage, the committee evaluated data provided in the 2019 Gas Turbine World Handbook and calculated the average of both the environmental benefit and the productive benefit of a combined-cycle plant operating a HRSG versus a similar simple-cycle plant without a HRSG. For the environmental benefit estimation, the committee considered the best available control technology emission limit for a combined-cycle facility of 2 parts per million (ppm) and for a simple-cycle facility of 5 ppm to determine the decrease in nitrogen oxides emissions between two types of facilities on a pound per megawatt-hour basis. To determine the production benefit, the committee calculated both the average increase in plant output and average improvement in heat rate attributable to combine-cycle operation (due to the HRSG) when compared to simple-cycle operation. The committee averaged the percentage results for the environmental benefit and the nonproductive use to derive an environmental use of 65%.

The commission proposes to amend the Tier I Table in §18.25(a) to add item S-29 for reclamation equipment. The proposed property description excludes commercial reclamation equipment from eligibility as Tier I property. Commercial reclamation equipment is equipment owned and rentable by companies that provide reclamation services. The committee did not identify the explicit exclusion of commercial reclamation equipment in its recommendation. However, the commission proposes this exclusion to clarify that the construction equipment used for commercial land reclamation purposes would not qualify for exemption from taxation because the Voter-Approval Tax Rate Relief for Pollution Control Requirements Program only applies to political subdivisions required to meet the requirements of a TCEQ-issued permit, as specified in §18.5(a). The type of company performing commercial reclamation services would not be expected to meet the specified Chapter 18 applicability.

The commission proposes to amend the Tier I Table in §18.25(a) to add item M-24 for nondestructive pipeline testing to the Tier I Table. The commission proposes a change to the committee's recommended proposed property description to clarify the property that is intended to be eligible, and property that is intended to be ineligible, as Tier I Table property. The committee recommended expenditures such as radiography as the Tier I Table description. Instead, the commission proposes that expenditures used for nondestructive pipeline testing are explicitly included, but expenditures used for non-pollution control purposes are explicitly excluded. The explicit inclusion of nondestructive pipeline testing as part of the proposed property description is necessary to state the item that is intended to be covered as the Tier I property rather than only providing an example of the property, as recommended by the committee. The explicit exclusion of expenditures for non-pollution control purposes maintains consistency with requirements in §18.5(a) requiring that the pollution control property wholly or partly meet the requirements of a TCEQ-issued permit.

§18.26, Expedited Review List

The commission proposes amendments to the ERL in §18.26 to revise the description for HRSGs, listed as item number B-8. The committee recommended describing a HRSG in the §17.14(a) Tier I Table as a boiler designed to capture waste heat from combustion turbine exhaust for the generation of steam while reducing unit output-based emissions. Although the committee did not recommend any changes to the existing Chapter 17, §17.17(b) ERL, the commission proposes replacing the existing HRSG description in the §18.26 ERL with the committee's recommended HRSG description. This proposed change streamlines the description of HRSG and specifies the property intended to qualify as a HRSG under the Chapter 18 rules. The proposed change to the ERL was not explicitly recommended by the committee but remains consistent with its advice. This proposed amendment to the ERL is not intended to change the type of property currently covered under the Voter-Approval Tax Rate Relief for Pollution Control Requirements Program. The proposed change to the HRSG description in the Chapter 17, §17.17(b) ERL is also proposed to the Chapter 18, §18.26 ERL to uphold consistency between the Chapters 17 and 18 programs.

§18.30, Partial Determinations

The commission proposes to amend §18.30 to add language that clarifies the property for which a partial determination is not required. This revision is necessary in light of the proposed inclusion of HRSGs with a partial use percentage in the §18.25(a) Tier I Table. The proposed language provides an exception for property that is on the Tier I Table located in §18.25(a) at a specified partial use percentage from having to request a partial determination. Existing language directing applicants to apply for a partial determination for property that is in the ERL in §18.26 or that is not wholly used for pollution control remains unchanged. This proposed revision is intended to ensure property already determined to have a partial use environmental benefit listed on the Tier I Table do not have to apply for a partial use determination. This proposed revision does not affect any property other than HRSGs at this time since all other property proposed for inclusion in the Tier I Table is associated with a 100% positive use.

The proposed amendment to §18.30 differs from the proposed change to §17.17(a) because the existing rule language is not the same; however, the intent of both proposed revisions is the same.

Fiscal Note: Costs to State and Local Government

Jené Bearse, Analyst in the Budget and Planning Division, determined that for the first five-year period the proposed rules are in effect, no significant fiscal implications are anticipated for the agency or for other units of state or local government as a result of administration or enforcement of the proposed rules.

The rulemaking states that certain Tier II pollution control property should instead be considered Tier I property in the Tier I Table; this removes the requirement for a Tier II application. The rulemaking also adds HRSGs to the Tier I Table. Tier I application fees are less than the Tier II application fees. The application fee for Tier I is $150; the Tier II application fee is $500. However, the commission does not expect a significant fiscal impact because it does not often receive applications under Chapter 18. For example, the commission has only approved four applications since 2008.

Public Benefits and Costs

The proposed rulemaking is not anticipated to result in significant fiscal implications for businesses or individuals.

Local Employment Impact Statement

Rural Communities Impact Assessment

Small Business and Micro-Business Assessment

Small Business Regulatory Flexibility Analysis

The commission reviewed this proposed rulemaking and determined that a Small Business Regulatory Flexibility Analysis is not required because the proposed rules do not adversely affect a small or micro-business in a material way for the first five years the proposed rules are in effect.

Government Growth Impact Statement

The commission prepared a Government Growth Impact Statement assessment for this proposed rulemaking. The proposed rulemaking does not create or eliminate a government program and will not require an increase or decrease in future legislative appropriations to the agency. The proposed rulemaking does not require the creation of new employee positions, eliminate current employee positions, nor require a significant increase or decrease in fees paid to the agency. The proposed rulemaking does not create, expand, repeal or limit an existing regulation, nor does the proposed rulemaking increase or decrease the number of individuals subject to its applicability. During the first five years, the proposed rules should not impact the state's economy positively or negatively.

Draft Regulatory Impact Analysis Determination

The commission reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code, §2001.0225 and determined the rules do not meet the definition of a "Major environmental rule." Under Texas Government Code, §2001.0225, a "Major environmental rule" means a rule, the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure, and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. Furthermore, it does not meet any of the four applicability requirements listed in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225 applies only to a major environmental rule which 1) exceeds a standard set by federal law, unless the rule is specifically required by state law; 2) exceeds an express requirement of state law, unless the rule is specifically required by federal law; 3) exceeds a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopts a rule solely under the general powers of the agency instead of under a specific state law. The proposed rulemaking implements a Voter-Approval Tax Rate Relief for Pollution Control Requirements Program as described in Texas Tax Code, §26.045 and the Background and Summary of the Factual Basis for the Proposed Rules and Section by Section Discussion sections of this preamble. Because the proposed rules are not specifically intended to protect the environment or reduce risks to human health from environmental exposure but to implement a tax rate adjustment program, this rulemaking is not a major environmental rule and does not meet any of the four applicability requirements. This proposed rulemaking would not result in any new environmental requirements and should not adversely affect in a material way the economy, a sector of the economy, productivity, competition, or jobs.

Written comments on the Draft Regulatory Impact Analysis Determination may be submitted to the contact person at the address listed under the Submittal of Comments section of this preamble.

Takings Impact Assessment

The commission evaluated these proposed rules and performed an assessment of whether Texas Government Code, Chapter 2007 is applicable. The commission's assessment indicates Texas Government Code, Chapter 2007 does not apply to these proposed rules because this action creates a program which is available only to political subdivisions as described in Texas Tax Code, §26.045 and the Section by Section Discussion sections of this preamble. Promulgation and enforcement of these proposed rules will be neither a statutory nor constitutional taking of private real property. Specifically, the proposed rules do not affect a landowner's rights in private real property because this rulemaking action does not burden, restrict, nor limit the owner's rights to property or reduce its value by 25% or more beyond which would otherwise exist in the absence of the proposed regulations.

Consistency with the Coastal Management Program

Written comments on the consistency of this rulemaking may be submitted to the contact person at the address listed under the Submittal of Comments section of this preamble.

Submittal of Comments

Statutory Authority

The amended sections are proposed under Texas Water Code (TWC), §5.102, which authorizes the commission to perform any acts authorized by the TWC or other law which are necessary and convenient to the exercise of its jurisdiction and powers; and §5.103, which authorizes the commission to adopt rules necessary to carry out its powers and duties under the TWC. The amended sections are also proposed under Texas Tax Code, §26.045, which authorizes that the voter-approval tax rate for a political subdivision of this state be increased by the rate that, if applied to the total current value, would impose an amount of taxes equal to the amount the political subdivision will spend out of its maintenance and operation funds under Texas Tax Code, §26.012(16) to pay for a facility, device, or method for the control of air, water, or land pollution that is necessary to meet the requirements of a permit issued by the commission.

The amended sections are proposed to implement Texas Tax Code, §26.045.

§18.25.Tier I Eligible Equipment.

(a) For the property listed on the Tier I Table located in this subsection that is used wholly for pollution control purposes, a Tier I application is required. A Tier I application must not include any property that is not listed in this subsection or that is used for pollution control purposes at a use percentage that is different than what is listed in the table in this subsection. Unless otherwise designated with a partial use percentage in the Tier I Table of this subsection, if [If] a marketable product is recovered (not including materials that are disposed) from property listed in this subsection, a Tier II application is required.

Figure: 30 TAC §18.25(a) (.pdf)

[~~Figure: 30 TAC §18.25(a)~~]

(b) The commission shall review and update the Tier I Table in subsection (a) of this section at least once every three years.

(1) An item may be added to the list only if there is compelling evidence to support the conclusion that the item provides pollution control benefits and a justifiable pollution control percentage is calculable.

(2) An item may be removed from the list only if there is compelling evidence to support the conclusion that the item does not render pollution control benefits.

§18.26.Expedited Review List.

The Expedited Review List in this section is a nonexclusive list of facilities, devices, or methods for the control of air, water, and/or land pollution. This table consists of the list located in Texas Tax Code, §26.045(f) with changes as authorized by Texas Tax Code, §26.045(g). The commission shall review and add to the items listed in this table only if there is compelling evidence to support the conclusion that the item provide pollution control benefits. The commission may remove an item from this table only if there is compelling evidence to support the conclusion that the item does not render pollution control benefits.

Figure: 30 TAC §18.26 (.pdf)

[~~Figure: 30 TAC §18.26~~]

§18.30.Partial Determinations.

A partial determination must be requested for all property that is in the figure in §18.26 of this title (relating to Expedited Review List) or that is not wholly used for pollution control, except for property that is on the Tier I Table located in §18.25(a) of this title (relating to Tier I Eligible Equipment) at a specified partial use percentage. It is the responsibility of the applicant to propose a reasonable method for calculating a partial determination. The calculation must be documented and included with the application. It is the responsibility of the executive director to review the appropriateness of the proposed method and make the final 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 July 17, 2020.

TRD-202002949

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: August 30, 2020

For further information, please call: (512) 239-2678

CHAPTER 30. OCCUPATIONAL LICENSES AND REGISTRATIONS

The Texas Commission on Environmental Quality (TCEQ, agency, or commission) proposes to amend §§30.20, 30.24, 30.33, 30.34, 30.36, 30.81, 30.95, 30.129, and 30.402; and new §30.29.

Background and Summary of the Factual Basis for the Proposed Rules

The proposed rulemaking would implement House Bill (HB) 1508 from the 85th Texas Legislature, 2017; and HB 1342, Senate Bill (SB) 37, and SB 1217 from the 86th Texas Legislature, 2019.

HB 1508 amended Texas Occupations Code, Chapter 53, Consequences of Criminal Conviction by adding Texas Occupations Code, §53.151 and §53.153. The amendments provide individuals the ability to petition the agency to seek reimbursement from a training provider if they were not notified that they may be ineligible for an initial occupational license due to their criminal history and were subsequently denied the license due to a criminal conviction. This rulemaking proposes new §30.29 to outline the requirements for training providers, eligibility for reimbursement, and procedures for requesting reimbursement.

HB 1342 amended Texas Occupations Code, Chapter 53, Consequences of Criminal Conviction, particularly Texas Occupations Code, §§53.021(a), 53.022, 53.023(a) and (b), 53.051, and 53.0231. Based on HB 1342, a licensing authority may no longer suspend or revoke a license, disqualify an individual from receiving a license, or deny an individual the opportunity to take a licensing examination based on the individual's conviction of an offense that does not directly related to the duties and responsibilities of the licensed occupation and that was committed less than five years before the date the individual applied for the license. HB 1342 also requires a licensing authority to notify the individual in writing if the licensing authority intends to deny them a license or the opportunity to be examined for a license because of the individual's prior conviction of an offense. The notice shall include the reason for the intended denial and allow the individual a chance to submit any relevant information for further consideration by the authority.

SB 37 amended Texas Occupations Code, Chapter 56, Disciplinary Action Against Recipients of Student Financial Assistance Prohibited, particularly Texas Occupations Code, §56.003. The amendment removed language that allowed licensing agencies to deny or take other disciplinary action against license holders or potential license holders who are in default of their student loans.

SB 1217 added Texas Occupations Code, Chapter 53, Consequences of Criminal Convictions, §53.0231. The new section prohibits a licensing authority to consider an arrest that did not result in the individual's conviction or placement on deferred adjudication community supervision in the denial of a new or renewal license. The agency already complies with intent of SB 1217 by not considering dismissals that did not result in a conviction or deferred adjudication. Therefore, only language based on SB 1217 is proposed to clarify the intent.

Section by Section Discussion

Administrative Amendments

The commission proposes administrative amendments to multiple sections of Chapter 30. The proposed rulemaking includes various stylistic, non-substantive amendments to update rule language to current Texas Register style and format requirements and to correct section references in Chapter 30 to other chapters. Administrative amendments are proposed to ensure the consistency, clarity, and accuracy of the information within Chapter 30 (i.e., §30.402). The proposed administrative amendments include but are not limited to: correcting minor grammatical, spelling, and typographical errors; standardizing the use of acronyms; and updating section references.

§30.20, Examinations

The commission proposes to amend §30.20(k) to remove paragraph (2) to reflect statutory changes to Texas Occupations Code, §53.0231, Limitation Regarding Consideration of Certain Arrests. The subsequent paragraphs would be re-numbered accordingly. The proposed amendment would remove the individual's conviction of an offense that does not directly relate to the duties and responsibilities of the licensed occupation and that was committed less than five years before the date the individual applied for the license as grounds on which a licensing authority may suspend or revoke a license or disqualify an individual from receiving a license. This proposal would implement HB 1342.

The commission proposes §30.20(n) to clarify that the commission may not deny an individual the opportunity to take a licensing exam based on the individual's prior conviction of an offense unless the commission follows the notice requirements of §30.36. This proposal would implement HB 1342.

§30.24, License and Registration Applications for Renewal

The commission proposes §30.24(t) to clarify that the commission may not deny an individual the opportunity to renew a license based on the individual's prior conviction of an offense unless the commission follows the notice requirements of §30.36. This proposal would implement HB 1342.

§30.29, Notification Requirements for Training Providers of Initial Training

The commission proposes new §30.29 to reflect changes to the Texas Occupations Code, §53.152. Proposed §30.29 would require all entities that provide educational or instructional programs that prepare a student for an occupation or vocation that requires a Texas occupational license to inform the student or program participant that their eligibility for an occupational license could be impacted by the student's criminal history. Proposed §30.29 would also provide individuals the ability to petition the agency to seek reimbursement from a training provider if they were not notified and were subsequently denied the license due to a criminal conviction. Requiring training providers to notify students of their potential ineligibility prevents former offenders from spending unnecessary time and resources on training and educational courses that may not yield a professional pathway for employment. This proposal would implement HB 1508.

Proposed new §30.29(a) would define "Initial training," "Student," and "Training provider" for the purpose of §30.29.

Proposed new §30.29(b) would outline the notification requirements for the training provider. The training provider is required to notify its students that an individual may be ineligible for an occupational license based on their criminal conviction history, the current guidelines, the circumstances under which the executive directory may consider an individual's conviction in the denial of a license, and that the student may request a criminal history evaluation from the agency.

Proposed new §30.29(c) would require each student to sign an acknowledgment that the trainer notified the student as outlined in §30.29(b).

Proposed new §30.29(d) would require the trainer to retain records of the signed acknowledgment.

Proposed new §30.29(e) would allow a student to request the commission to order the training provider to reimburse the student if the student was denied an initial occupational license due to the student's criminal conviction history and the training provider did not provide the notification required in §30.29(b). The student may request reimbursement for the tuition paid to the training provider and the amount of any application or examination fees the student may have paid. This will benefit the student by recovering any unnecessary investments made to obtain a license and by holding the training provider accountable for failing to meet the notification requirement.

Proposed §30.29(f) - (j) would outline the process for a student to pursue reimbursement. The proposed subsections would require a student seeking a refund to submit a written request and supporting documentation to the agency and at the same time allow the training provider to file an objection and provide documentation that they had met the notification requirements and are not liable to refund any fees.

§30.33, License or Registration Denial, Warning, Suspension, or Revocation

The commission proposes to delete §30.33(a)(2)(G) to reflect changes to Texas Occupations Code, Chapter 56, Disciplinary Action Against Recipients of Student Financial Assistance Prohibited and Chapter 57, Requirements for Licensing Agencies. This proposed amendment eliminates the agency's authority to deny, revoke, suspend, or fail to renew a professional license due to the licensee or applicant being in default on a student loan. License holders who are in default on their student loan repayment would no longer be at risk of losing their occupational license or facing other disciplinary action in the event they are unable to pay back their student loans. This proposal would implement SB 37.

The commission proposes to delete §30.33(h)(1)(B) to reflect changes to Texas Occupations Code, §53.0231. The subsequent subparagraphs would be re-lettered accordingly. Based on the amendment, the commission may not deny an individual the opportunity to take a licensing examination based on the individual's conviction of an offense that does not directly relate to the duties and responsibilities of the licensed occupation and that was committed less than five years before the date the individual applies for the license. This proposal would implement HB 1342.

The commission proposes §30.33(k) to clarify that the commission may not deny an initial license or renewal based on the individual's prior conviction of an offense unless the commission follows the notice requirements of §30.36. This proposal would implement HB 1342.

§30.34, Factors in Determining Whether Conviction Relates to Occupation

The commission proposes amendments to §30.34 to reflect changes to Texas Occupations Code, §53.022, Factors in Determining Whether Conviction Relates to Occupation.

The commission proposes to amend the title of §30.34 to add the words "Directly" and "Licensed." This will help clarify that the factors used are to determine whether a criminal conviction is "directly" related to the duties and responsibilities of the "licensed" occupation. Additionally, the commission proposes the articles "a" and "the" in the title for clarity purposes. This proposal would implement HB 1342.

The commission proposes to amend §30.34(a) to reflect changes to Texas Occupations Code, §53.022. The proposed amendment would specify that the criminal conviction must directly relate to the duties and responsibilities of a licensed occupation and removes the relationship of the crime to the "fitness" required to perform the duties of the licensed occupation as a factor in determining whether a criminal conviction relates to the duties and responsibilities of a licensed occupation. This proposal would implement HB 1342.

The commission proposes §30.34(a)(5) to require the commission to consider any correlation between the elements of the crime and the duties and responsibilities of the licensed occupation in determining whether a criminal conviction directly relates to the occupation. This proposal would implement HB 1342.

The commission proposes §30.34(b)(6) to require the commission to consider an individual's compliance with any conditions of community supervision, parole, or mandatory supervision in considering if a criminal conviction directly relates to the duties and responsibilities of the licensed occupation. The subsequent paragraphs would be re-numbered accordingly. This proposal would implement HB 1342.

The commission proposes to amend re-numbered §30.34(b)(7) to remove the more prescriptive requirement that other evidence of an individual's fitness may only include letters of recommendation from specific entities or individuals. This proposed amendment would provide applicants more flexibility to provide recommendations from sources other than those previously specified in the rule. This proposal would implement HB 1342.

The commission proposes to delete §30.34(d). The applicant is no longer required to submit proof that the applicant has maintained a record of steady employment and good conduct. This proposal would implement HB 1342.

While the agency has never considered straight dismissals as part of a criminal history evaluation screening, the commission proposes §30.34(d) to specifically prohibit the use of an arrest that did not result in the individual's conviction or placement on deferred adjudication community supervision in the commission's determination of whether a criminal conviction directly relates to the licensed occupation. As false arrests may happen, this proposed amendment would clarify that arrests that end up being quickly dismissed are not considered as part of a criminal history review. This proposal would implement SB 1217.

§30.36, Notice

The commission proposes to amend §30.36 to reflect changes to Texas Occupations Code, §53.051, Factors in Determining Whether Conviction Directly Relates to Occupation and new §53.023, Additional Factors for Licensing Authority to Consider After Determining the Conviction Directly Relates to the Occupation. The proposed amendment to §30.36 would require the commission to send two notifications, the notice of intent to deny and the final decision to deny, to an individual if the commission decides to proceed with suspension or revocation of a license or deny the opportunity to be examined for a license because of the individual's criminal history. The amendment would also allow the individual up to 30 days to submit any relevant information to the agency for further consideration in response to the notice of intent to deny. The proposal would implement HB 1342.

Proposed §30.36(a)(1) would require that the notice of intent to deny include any factors that were used to determine whether the conviction directly relates to the occupation and list any additional factors the licensing authority considered to determine that the conviction directly relates to the occupation that served as the basis for the suspension, revocation, denial, or disqualification.

Proposed §30.36(a)(2) would require that the notice of intent to deny, suspend, or revoke must notify the applicant or licensee that it is the individual's responsibility to obtain and provide the agency with any additional supporting information documenting sufficient rehabilitative efforts for further consideration by the agency in the denial process.

Proposed §30.36(a)(3) would allow the individual up to 30 days to submit any relevant information to the agency for further consideration.

Proposed §30.36(b) would require the executive director to notify the individual in writing of the final decision to suspend or revoke a license or deny the individual a license or the opportunity to be examined for the license.

Proposed §30.36(b)(1) would require the notification to state that the individual is disqualified from receiving the license or being examined for the license because of the individual's prior conviction of an offense specified in the notice of intent and must include any factors considered under §30.34 that served as the basis for the suspension, revocation, denial, or disqualification.

Proposed §30.36(b)(2) would require the final notice to suspend or revoke a license to notify the individual of the review procedure provided by §30.35 (Guidelines). Section 30.36(b)(2) would replace existing §30.36(2).

Proposed §30.36(b)(3) would require the final notice to suspend or revoke a license to include the earliest date that the individual may appeal the action of the commission. Section 30.36(b)(3) would replace existing §30.36(3).

§30.81, Purpose and Applicability

The commission proposes to amend §30.81(d) to remove language that specifically refers to the Texas Board of Plumbing Examiners in reference to the Texas Occupations Code chapter governing plumbing licenses. This is to prevent the need to revise the rules should any changes be made to the agency designated to administer Texas Occupations Code, Chapter 1301 during a future legislative session.

§30.95, Exemptions

The commission proposes to amend §30.95 to address language that specifically references the Texas State Board of Plumbing Examiners. The proposed changes would remove specific references to the Texas State Board of Plumbing Examiners and replace them with more generic language to avoid needing to amend the rules should the licensing of plumbers move from the Texas Board of Plumbing Examiners to an alternate agency in a future legislative session.

§30.129, Exemptions

The commission proposes to amend §30.129(a)(1) to address language that specifically references the Texas State Board of Plumbing Examiners. The proposed changes would remove specific references to the Texas State Board of Plumbing Examiners and replace them with more generic language to avoid needing to amend the rules should the licensing of plumbers move from the Texas State Board of Plumbing Examiners to an alternate agency in a future legislative session.

Fiscal Note: Costs to State and Local Government

Jené Bearse, analyst in the Budget and Planning Division, determined that for the first five-year period the proposed rules are in effect, no significant fiscal implications are anticipated for the agency.

This rulemaking addresses necessary changes in order to implement new laws affecting Chapter 30. Specifically, TCEQ may no longer suspend or revoke a license, disqualify an individual from receiving a license, or deny the opportunity to take a licensing exam based on a previous conviction that is not directly related to the duties of a licensee and was committed less than five years before the application date. This could potentially increase the number of applicants and the costs associated with processing the applications. However, at this time, the costs are not anticipated to be significant.

No fiscal implications are anticipated for units of local government as a result of administration or enforcement of the proposed rules.

Public Benefits and Costs

Ms. Bearse determined that for each year of the first five years the proposed rules are in effect, the public benefit anticipated will be compliance with state law. The proposed rulemaking is not anticipated to result in significant fiscal implications for businesses or individuals.

Local Employment Impact Statement

Rural Communities Impact Assessment

The commission reviewed this proposed rulemaking and determined that the proposed rulemaking does not adversely affect rural communities in a material way for the first five years that the proposed rules are in effect. The rulemaking would apply statewide and have the same effect in rural communities as in urban communities.

Small Business and Micro-Business Assessment

No adverse fiscal implications are anticipated for small or micro-businesses due to the implementation or administration of the proposed rulemaking for the first five-year period the proposed rules are in effect.

Small Business Regulatory Flexibility Analysis

Government Growth Impact Statement

The commission prepared a Government Growth Impact Statement assessment for this proposed rulemaking. The proposed rulemaking does not create or eliminate a government program and will not require an increase or decrease in future legislative appropriations to the agency. The proposed rulemaking does not require the creation of new employee positions, eliminate current employee positions, nor require an increase or decrease in fees paid to the agency. The proposed rulemaking does expand an existing regulation to allow certain individuals to take licensing exams when they were previously disqualified, and this may increase the number of individuals subject to the regulation's applicability. During the first five years, the proposed rulemaking should not impact positively or negatively the state's economy.

Draft Regulatory Impact Analysis Determination

The commission reviewed this rulemaking action in light of the regulatory analysis requirements of Texas Government Code, §2001.0225, and determined that the proposed rules are not subject to that statute because the proposed rules do not meet the criteria for a "Major environmental rule" as defined in Texas Government Code, §2001.0225(g)(3). Texas Government Code, §2001.0225 applies only to rules that are specifically intended to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The purpose of the proposed rules is to implement HB 1508 (85th Texas Legislature) and HB 1342, SB 37, 1200, and 1217 (86th Texas Legislature).

The specific intent of the proposed rules is: to ensure consistency between the rules and their applicable statutes as amended by recent legislation; to remove language giving the agency authority to suspend or revoke a license, disqualify an individual from receiving a license, or deny an individual the opportunity to take a licensing examination based on the individual's conviction of an offense that does not directly relate to the duties and responsibilities of the licensed occupation and that was committed less than five years before the date the individual applies for the license; to address the agency's procedure for providing written notice to individuals for whom the agency intends to deny a license or the opportunity to be examined for a license because of the individual's prior conviction of an offense; to address the procedure for individuals to petition the agency to seek reimbursement from a training provider if they were not notified that they may be ineligible for an initial occupational license due to their criminal history and were subsequently denied the license due to a criminal conviction; and to remove language allowing the agency to deny or take other disciplinary action against license holders or potential license holders who are in default of their student loans.

The proposed rules would clarify and update the agency's licensing and registration programs and would not adversely affect, in a material way, the economy, a section of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state, because the proposed rules would only modify existing licensing and registration requirements. Therefore, the proposed rules do not meet the definition of a "Major environmental rule" as defined in Texas Government Code, §2001.0225(g)(3).

Furthermore, even if the proposed rules did meet the definition of a major environmental rule, the proposed rules are not subject to Texas Government Code, §2001.0225, because they do not meet any of the four applicability requirements specified in Texas Government Code, §2001.0225(a). Texas Government Code, §2001.0225(a) applies to rules proposed by an agency, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law.

In this case, the proposed rules do not meet any of these requirements: there are no federal standards for the occupational licenses and registrations program administered by the commission; the rules do not exceed an express requirement of state law; there is no delegation agreement that would be exceeded by the rules; and the proposed rules would implement requirements of HB 1508 (85th Texas Legislature), and HB 1342, SB 37, and SB 1217 (86th Texas Legislature).

Written comments on the Draft Regulatory Impact Analysis Determination may be submitted to the contact person at the address listed under the Submittal of Comments section of this preamble.

Takings Impact Assessment

The commission has prepared a takings impact assessment for these proposed rules pursuant to Texas Government Code, §2007.043. The specific purpose of these proposed rules is: to ensure consistency between the rules and their applicable statutes as amended by recent legislation; to remove language giving the agency authority to suspend or revoke a license, disqualify an individual from receiving a license, or deny an individual the opportunity to take a licensing examination based on the individual's conviction of an offense that does not directly relate to the duties and responsibilities of the licensed occupation and that was committed less than five years before the date the individual applies for the license; to address the agency's procedure for providing written notice to individuals for whom the agency intends to deny a license or the opportunity to be examined for a license because of the individual's prior conviction of an offense; to address the procedure for individuals to petition the agency to seek reimbursement from a training provider if they were not notified that they may be ineligible for an initial occupational license due to their criminal history and were subsequently denied the license due to a criminal conviction; and to remove language allowing the agency to deny or take other disciplinary action against license holders or potential license holders who are in default of their student loans.

The proposed regulations do not affect a landowner's rights in private real property because this proposed rulemaking does not burden, restrict, or limit the owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the regulations. The proposed rules do not constitute a taking because they would not burden private real property.

Consistency with the Coastal Management Program

Written comments on the consistency of this rulemaking may be submitted to the contact person at the address listed under the Submittal of Comments section of this preamble.

Submittal of Comments

Written comments may be submitted to Ms. Gwen Ricco, MC 205, Office of Legal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to fax4808@tceq.texas.gov.. Electronic comments may be submitted at: https://www6.tceq.texas.gov/rules/ecomments/. File size restrictions may apply to comments being submitted via the eComments system. All comments should reference Rule Project Number 2018-024-030-WS. The comment period closes on August 31, 2020. Copies of the proposed rulemaking can be obtained from the commission's website at https://www.tceq.texas.gov/rules/propose_adopt.html. For further information, please contact Rebecca Moore, Registration and Reporting Section, (512) 239-2463.

SUBCHAPTER A. ADMINISTRATION OF OCCUPATIONAL LICENSES AND REGISTRATIONS

30 TAC §§30.20, 30.24, 30.29, 30.33, 30.34, 30.36

Statutory Authority

The amended and new sections are proposed under: Texas Water Code (TWC), §5.013, concerning the General Jurisdiction of the Commission, which establishes the general jurisdiction of the commission; TWC, §5.102, concerning General Powers, which establishes the commission's general authority necessary to carry out its jurisdiction; TWC, §5.103, concerning Rules, which requires the commission to adopt rules necessary to carry out its powers and duties; TWC, §5.105, concerning General Policy, which provides the commission authority to establish and approve all general policy of the commission by rule; TWC, §37.002, concerning Rules, which provides the commission authority to adopt rules for various occupational licenses; TWC, §37.003, concerning License or Registration Required, which provides that persons engaged in certain occupations must be licensed by the commission; TWC, §37.005, concerning Issuance and Denial of Licenses and Registration, which requires the commission to establish requirements and uniform procedures for issuing licenses and registrations; TWC, §37.006, concerning Renewal of License or Registration, which requires the commission to establish requirements and uniform procedures for renewing licenses and registrations; Texas Occupations Code, §53.021, concerning Authority to Revoke, Suspend, or Deny License, which allows the commission to revoke, suspend, or deny a license to a person who has been convicted of certain offenses; Texas Occupations Code, §53.022, concerning Factors in Determining Whether Conviction Directly Relates to Occupation, which provides the factors the commission shall consider in determining whether a criminal conviction directly relates to the duties and responsibilities of a licensed occupation; Texas Occupations Code, §53.023, concerning Additional Factors for Licensing Authority to Consider After Determining Conviction Directly Relates to Occupation, which provides additional factors the commission shall consider if it determines that an individual's criminal conviction directly relates to the duties and responsibilities of a licensed occupation; Texas Occupations Code, §53.0231, concerning Notice of Pending Denial of License, which provides the procedure for the commission's written notice to individuals for whom the commission intends to deny a license or the opportunity to be examined for a license because of the individual's prior conviction of an offense; Texas Occupations Code, §53.051, concerning Notice, which requires to the commission to provide to an individual written notice of the reason for suspension, revocation, denial, or disqualification of a license based on the individual's prior criminal conviction; Texas Occupations Code, §53.152, concerning Notice by Entities Providing Educational Programs, which gives individuals the right to petition the commission to seek reimbursement from a training provider if they were not notified that they may be ineligible for an initial occupational license due to their criminal history and were subsequently denied the license due to a criminal conviction; and Texas Occupations Code, §53.153, concerning Refund and Ordered Payments, which requires the commission to order a training provider to reimburse individuals the amount of application and examination fees to the commission if the commission determines a training provider did not notify individuals that they may be ineligible for an initial occupational license due to criminal history and individuals were subsequently denied the license due to a criminal conviction.

The proposed amended and new sections implement House Bill (HB) 1508, 85th Texas Legislature, 2017, which added Texas Occupations Code, §§53.151, 53.152, and 53.153; HB 1342, 86th Texas Legislature, 2019, which amended Texas Occupations Code, §§51.355, 53.021(a), 53.022, 53.023, 53.051, and 53.104(b) and added Texas Occupations Code, §51.357 51.358, 51.4041(a-1), 53.003, 53.0231, and 53.026; Senate Bill (SB) 37, 86th Texas Legislature, 2019, which amended Texas Occupations Code, Chapter 56, Texas Finance Code, §157.015(f) and (g) and §180.055(d), and Texas Government Code, §466.155(a) and (g); and SB 1217, 86th Texas Legislature, 2019, which added Texas Occupations Code, §53.0231.

§30.20.Examinations.

(a) The executive director shall prescribe the content of licensing examinations. Examinations shall be based on laws, rules, job duties, and standards relating to the particular license. The contents of any examination required for licensure under this chapter are confidential and examinees may not share them with anyone.

(b) Examinations shall be graded and the results forwarded to the applicant no later than 45 days after the examination date. The minimum passing score for an examination is 70%.

(c) An individual with an approved application who fails an examination may not repeat an examination until receiving notification of examination results for that particular examination.

(d) The application becomes void either after 365 days from date of application or failing the same examination four times, whichever occurs first. If an application becomes void, a new fee and a new application must be submitted before the applicant may take the same examination again.

(e) Any scores for repeat examinations taken after an application becomes void will not be applied to the issuance of the license.

(f) Any qualified applicant with a physical, mental, or developmental disability may request reasonable accommodations to take an examination.

(g) Examinations shall be given at places and times approved by the executive director.

(h) Examinees must comply with all written and verbal instructions of the proctor and shall not:

(1) bring any unauthorized written material, in either printed or electronic formats, into the examination room;

(2) bring any electronic devices, including any device with a camera, into the examination room;

(3) share, copy, or in any way reproduce any part of the examination;

(4) engage in any deceptive or fraudulent act; or

(5) solicit, encourage, direct, assist, or aid another person to violate any provision of this section or compromise the confidentiality of the examination.

(i) The executive director shall provide an analysis of an examination when requested in writing by the applicant. The executive director shall ensure that an examination analysis does not compromise the fair and impartial administration of future examinations.

(j) An individual who wishes to observe a religious holy day on which the individual's religious beliefs prevent the individual from taking an examination scheduled by the agency on that religious holy day shall be allowed to take the examination on an alternate date.

(k) The executive director may deny an individual the opportunity to take a licensing examination on the grounds that the individual has been convicted of an offense, other than an offense punishable as a Class C misdemeanor, that:

(1) directly relates to the duties and responsibilities of the licensed occupation;

~~[(2) does not directly relate to the duties and responsibilities of the licensed occupation and that was committed less than five years before the date the individual applies for the license;]~~

(2) [~~(3)~~] is an offense listed in Texas Code of Criminal Procedure, Article 42.12, Section 3g; or

(3) [~~(4)~~] is a sexually violent offense, as defined by Texas Code of Criminal Procedure, Article 62.001.

(l) The executive director may deny an individual the opportunity to take a licensing examination on the grounds that:

(1) the individual was charged with:

(A) any offense described by Texas Code of Criminal Procedure, Article 62.001(5); or

(B) an offense other than an offense described by subparagraph (A) of this paragraph if:

(i) the individual has not completed the period of supervision or the individual completed the period of supervision less than five years before the date the individual applied for the license; or

(ii) a conviction for the offense would make the individual ineligible for the license by operation of law; and

(2) after consideration of the factors described by Texas Occupations Code, §§53.021(d), 53.022, and 53.023(a), the executive director determines that:

(A) the individual may pose a continued threat to public safety; or

(B) employment of the individual in the licensed occupation would create a situation in which the individual has an opportunity to repeat the prohibited conduct.

(m) After notice and opportunity for a hearing, the commission may deny or revoke any license or registration held by a person who violates any of the provisions of this section. The commission may file a criminal complaint against any individual who removes or attempts to remove any portion of the examination, reproduces without permission any part of the examination, or who engages in any fraudulent act relating to the examination process.

(n) The commission shall follow the notification requirements in §30.36 of this title (relating to Notice) prior to denying an individual the opportunity to take a licensing examination based on the individual's prior conviction of an offense.

§30.24.License and Registration Applications for Renewal.

(a) A license or registration may not be renewed if it has been:

(1) expired for more than 30 days and an application has not been received by the executive director or postmarked within 30 days after the expiration date of the license or registration;

(2) revoked; or

(3) replaced by a higher class of license.

(b) Applications for renewal must be made on a standard form provided by the executive director.

(1) The executive director shall mail a renewal notification at least 60 days before the license or registration expires to the most recent address provided to the executive director. If a person does not receive a renewal notification, the person is not relieved of the responsibility to timely submit a renewal application.

(2) The person is responsible for ensuring that the completed renewal application, the renewal fee, and other required information are submitted to the executive director by the expiration date of the license or registration.

(c) All statements, qualifications, and attachments provided by the applicant that relate to a renewal application shall be true, accurate, complete, and contain no misrepresentation or falsification.

(d) Approved training to renew a license must be successfully completed after the issuance date and before the expiration date of the current license. Any training credits completed in excess of the amount required for the renewal period shall not be carried over to the next renewal period.

(e) An individual who holds a license prescribed by Texas Water Code, §26.0301, or Texas Health and Safety Code, §341.033 or §341.034, specifically the holder of a Class A or Class B public water system operator or Class A or B wastewater treatment facility operator license may certify compliance with continuing education requirements prior to or at the time the license is renewed by submitting a continuing education certification form available from the executivedirector.

(f) The executive director may renew a license or registration if the application is received by the executive director or is postmarked within 30 days after the expiration date of the license or registration, and the person meets the requirements for renewal by the expiration date of the license or registration and pays all appropriate fees. This subsection does not extend the validity period of the license or registration nor grant the person authorization to perform duties requiring a license or registration. This subsection only allows an additional 30 days after the expiration of the license or registration for the person to submit the renewal application, any supporting documentation, and appropriate fees.

(g) An individual whose license renewal application is not received by the executive director or is not postmarked within 30 days after the license expiration date may not renew the license and must meet the current education, training, and experience requirements, submit a new application with the appropriate fee, and pass the examination. A person whose registration renewal application is not received by the executive director or is not postmarked within 30 days after the expiration date may not renew the registration and must submit a new application with the appropriate fee and meet all applicable requirements for a new registration.

(h) Persons failing to renew their license or registration in a timely manner due to serving as a military service member may renew their license within two years of returning from active duty by submitting the following:

(1) a completed renewal application;

(2) a copy of the military orders substantiating the military service during the time the license expired; and

(3) the applicable license renewal fee.

(i) For good cause the executive director may extend the two years period for a military service member seeking to renew their license. Good cause may include, but is not limited to, hospitalization or injury to the licensee.

(j) Completion of the required continuing education will be waived for the renewal cycle for military service members outside of this state who were unable to complete the requirements.

(k) These procedures apply only to military service members who are outside this state and not to military contractors.

(l) All licensees must notify the executive director of any change in the previously submitted application information within ten days from the date the change occurs.

(m) All registration holders must notify the executive director of any change in the previously submitted application information within ten days after the month in which the change occurs.

(n) Licenses and registrations that have renewal cycles in transition shall follow the renewal requirements in the applicable subchapter.

(o) The executive director shall determine whether an applicant meets the renewal requirements of this subchapter. If all requirements have been met, the executive director shall renew the license or registration.

(p) The license or registration shall be valid for the term specified.

(q) If the application does not meet the requirements, the executive director shall notify the applicant in writing of the deficiencies.

(r) All deficiencies must be corrected within 30 days of date printed on the notification, or the renewal application shall be considered void after the license expiration date.

(s) A person whose license or registration has expired shall not engage in activities that require a license or registration until the license or registration is renewed or a new license or registration has been obtained.

(t) The commission shall follow the notification requirements in §30.36 of this title (relating to Notice) prior to denying an individual the opportunity to renew a license based on the individual's prior conviction of an offense.

§30.29.Notification Requirements for Training Providers of Initial Training.

(a) Definitions. The following terms, when used in this section, shall have the following meaning:

(1) Initial training--Training, required by rule, to obtain an initial occupational license identified in Subchapters B - L of this chapter (relating to Backflow Prevention Assembly Testers; Customer Service Inspectors; Landscape Irrigators, Irrigation Technicians and Irrigation Inspectors; Leaking Petroleum Storage Tank Corrective Action Project Managers and Specialists; Municipal Solid Waste Facility Supervisors; On-Site Sewage Facilities Installers, Apprentices, Designated Representatives, Maintenance Providers, Maintenance Technicians, and Site Evaluators; Water Treatment Specialists; Underground Storage Tank On-Site Supervisor Licensing and Contractor Registration; Wastewater Operators and Operations Companies; Public Water System Operators and Operations Companies; Visible Emissions Evaluator Training and Certification).

(2) Student--An individual who is enrolled in an educational or instructional program that prepares the individual for an initial occupational license.

(3) Training provider--An administrative entity or individual that provides initial training.

(b) A training provider shall notify its students of:

(1) the potential ineligibility of an individual who has been convicted of an offense for issuance of an occupational license by the executive director upon completion by the individual of the initial training;

(2) the current guidelines adopted by the executive director;

(3) the circumstances described in §30.33 of this title (relating to License or Registration Denial, Warning, Suspension, or Revocation) under which the executive director may consider an individual to have been convicted of an offense, regardless of whether the proceedings were dismissed and the individual was discharged, for the purpose of denying, suspending, or revoking the license; and

(4) the right of an individual to request a criminal history evaluation letter from the agency under Texas Occupations Code, §53.102 as described in §30.13 of this title (relating to Eligibility of Certain Applicants for Occupational Licenses or Registrations).

(c) A training provider shall require each student to sign an acknowledgement that the training provider notified the student of the information described in subsection (b) of this section. This acknowledgement may be provided in an electronic form.

(d) A training provider shall retain records of the signed acknowledgment described in subsection (c) of this section for at least five years after the student confirms receipt of the information described in subsection (b) of this section.

(e) If the student's application for an initial occupational license is denied due to the student's criminal conviction history, and the training provider failed to provide the student the information described in subsection (b) of this section, the student may request that the commission order the training provider to:

(1) refund the student the amount of tuition paid to the training provider; and

(2) pay the student an amount equal to the total of:

(A) the amount of any application fees paid by the student to the agency for the occupational license which the student was denied due to the student's conviction criminal history; and

(B) the amount of any examination fees paid by the student to the agency or an examination provider approved by the executive director for the occupational license which the student was denied due to the student's criminal conviction history.

(f) To be eligible for reimbursement pursuant to subsection (e) of this section, the student must submit a written request for recovery of costs to the Office of the Chief Clerk, Texas Commission on Environmental Quality, Mail Code, 105, P.O. Box 13087, Austin, Texas 78711-3087 and the training provider within:

(1) 60 days after the date the executive director mails the final notice of denial of the student's application for an initial occupational license; or

(2) if the final decision is contested, within 30 days of the final commission decision to deny the license, whichever is later.

(g) A student seeking reimbursement pursuant to subsection (e) of this section must provide documentation of the amount of tuition, application fees, and examination fees that were incurred by the student.

(h) A training provider may file a response to a student's request for reimbursement with the chief clerk within 30 days after the delivery of the student's written request for reimbursement.

(i) After the deadline for the training provider to file a response to a student's request, the commission may consider the student's request at a commission meeting.

(j) The chief clerk shall mail notice to the student, training provider, executive director, and public interest counsel at least 30 days before the first meeting at which the commission considers the student's request for reimbursement.

§30.33.License or Registration Denial, Warning, Suspension, or Revocation.

(a) The executive director may deny an initial or renewal application for the following reasons.

(1) Insufficiency. The executive director shall notify the applicant of the executive director's intent to deny the application and advise the applicant of the opportunity to file a motion to overturn the executive director's decision under §50.139 of this title (relating to Motion to Overturn Executive Director's Decision). The executive director may determine that an application is insufficient for the following reasons:

(A) failing to meet the licensing or registration requirements of this chapter; or

(B) if an out-of-state licensing program does not have requirements substantially equivalent to those of this chapter.

(2) Cause. After notice and opportunity for a hearing, the commission may deny an application for a license or registration by an applicant who:

(A) provides fraudulent information or falsifies the application;

(B) has engaged in fraud or deceit in obtaining or applying for a license or registration;

(C) has demonstrated gross negligence, incompetence, or misconduct in the performance of activities authorized by a license or registration;

(D) made an intentional misstatement or misrepresentation of fact or information required to be maintained or submitted to the commission by the applicant or by the license or registration holder;

(E) failed to keep and transmit records as required by a statute within the commission's jurisdiction or a rule adopted under such a statute; or

(F) at the time the application is submitted, is indebted to the state for a fee, penalty, or tax imposed by a statute within the commission's jurisdiction or a rule adopted under such a statute.[~~; or~~]

[(G) is in default on loans guaranteed by Texas Guaranteed Student Loan Corporation (TGSLC) (the executive director shall proceed as described in Texas Education Code, Chapter 57) if identified by TGSLC and the application is for a renewal license or registration.]

(b) If an individual causes, contributes to, or allows a violation of this chapter, the executive director may issue a warning letter. The letter shall be placed in the individual's permanent file maintained by the executive director. This letter shall be a warning that further violations or offenses by the individual may be grounds for suspension, revocation, enforcement action, or some combination. A warning is not a prerequisite for initiation of suspension, revocation, or enforcement proceedings.

(c) After notice and hearing, the commission may suspend or revoke a license, certificate, or registration on any of the grounds contained in Texas Water Code, §7.303(b).

(d) After notice and hearing a license or registration may be suspended for a period of up to one year, depending upon the seriousness of the violations. A license or registration shall be revoked after notice and hearing upon a second suspension.

(e) The commission may revoke a license or registration after notice and hearing for a designated term or permanently. If a license or registration is revoked a second time, the revocation shall be permanent.

(f) The following procedures for renewal apply to individuals that have had their license or registration suspended.

(1) If a license or registration expiration date falls within the suspension period, an individual may renew the license or registration during the suspension period according to §30.24 of this title (relating to License and Registration Applications for Renewal) and the applicable subchapters of this chapter.

(2) A license or registration suspended in accordance with subsection (j) of this section may not be renewed during the suspension period. The license or registration may only be renewed if the court or the Title IV-D agency renders an order vacating or staying an order suspending the license or registration and the license or registration has not expired during the suspension period.

(3) After the suspension period has ended, the license or registration shall be automatically reinstated unless the individual failed to renew the license or registration during the suspension period.

(g) Individuals that have had their license or registration revoked shall not have their license or registration reinstated after the revocation period. After the revocation period has ended, an individual may apply for a new license or registration according to this chapter.

(h) Criminal Conviction.

(1) After notice and hearing, the commission may deny, suspend, or revoke a license on the grounds that the individual has been convicted of an offense, other than a Class C misdemeanor that:

(A) directly relates to the duties and responsibilities of the licensed occupation;

~~[(B) does not directly relate to the duties and responsibilities of the licensed occupation and that was committed less than five years before the date the individual applies for the license;]~~

(B) [~~(C)~~] is listed in Texas Code of Criminal Procedure, Article 42.12, Section 3g; or

(2) The commission shall revoke the license or registration upon an individual's imprisonment following a felony conviction, felony community supervision revocation, revocation of parole, or revocation of mandatory supervision.

(3) Prohibited Employment.

(A) Individuals subject to registration under the Texas Code of Criminal Procedure, Chapter 62 because of a reportable conviction or adjudication for which an affirmative finding is entered under Texas Code of Criminal Procedure, Article 42.015(b) or Section 5(e)(2), Article 45.12, and licensed after September 1, 2013, may not, for compensation, provide or offer to provide any type of service in the residence of another person unless the provision of service will be supervised.

(B) For purposes of this subsection:

(i) "Residence" means a structure primarily used as a permanent dwelling and land that is contiguous to that permanent dwelling.

(ii) "Supervision" means direct, continuous visual observation of the individual at all times.

(4) Except as provided by paragraph (5) of this subsection, notwithstanding any other law, the executive director may not consider an individual to have been convicted of an offense for purposes of this section if, regardless of the statutory authorization:

(A) the individual entered a plea of guilty or nolo contendere;

(B) the judge deferred further proceedings without entering an adjudication of guilt and placed the individual under the supervision of the court or an officer under the supervision of the court; and

(5) The executive director may consider an individual to have been convicted of an offense for purposes of this section regardless of whether the proceedings were dismissed and the individual was discharged as described by paragraph (4) of this subsection if:

(A) the individual was charged with:

(i) any offense described by Texas Code of Criminal Procedure, Article 62.001(5); or

(ii) an offense other than an offense described by clause (i) of this subparagraph if:

(I) the individual has not completed the period of supervision or the individual completed the period of supervision less than five years before the date the individual applied for the license; or

(II) a conviction for the offense would make the individual ineligible for the license by operation of law; and

(B) after consideration of the factors described by Texas Occupations Code, §53.022 and §53.023(a), the executive director determines that:

(i) the individual may pose a continued threat to public safety; or

(ii) employment of the individual in the licensed occupation would create a situation in which the individual has an opportunity to repeat the prohibited conduct.

(i) After notice and hearing, the commission may revoke a maintenance provider registration on any of the grounds in Texas Health and Safety Code, §366.0515(m).

(j) Failure to pay child support.

(1) The commission may suspend a license or registration if a licensed or registered individual has been identified by the Office of the Attorney General as being delinquent on child support payments (upon receipt of a final order suspending a license or registration, the executive director shall proceed as described in Texas Family Code, Chapter 232).

(2) The commission shall refuse to accept an application for:

(A) issuance of a new license or registration to an individual; or

(B) renewal of an existing license or registration to an individual if:

(i) the individual has failed to pay child support for six months or more;

(ii) the commission is notified by a child support agency, as defined by Texas Family Code, §101.004; and

(iii) the child support agency requests the commission to refuse to accept the application.

(3) The commission shall not accept an application for a license that was refused under paragraph (2) of this subsection until notified by the child support agency that the individual has:

(A) paid all child support arrearages;

(B) made an immediate payment of not less than $200 toward child support arrearages owed and established with the child support agency a satisfactory repayment schedule for the remainder or is in compliance with a court order for payment of the arrearages;

(C) been granted an exemption from this subsection as part of a court-supervised plan to improve the individual's earnings and child support payments; or

(D) successfully contested the child support agency's request for the commission's denial of issuance or renewal of the license or registration.

(4) The commission may charge a fee in an amount sufficient to recover the administrative costs incurred for denying or suspending that license.

(5) For purposes of this subsection, the suspension period for a license or registration shall be until:

(A) the court or the Title IV-D agency renders an order vacating or staying an order suspending the license or registration; or

(B) the expiration of the license or registration.

(k) The commission shall follow the notification requirements in §30.36 of this title (relating to Notice) prior to the denial of an initial license, the revocation of a license, or renewal of a license based on the individual's prior conviction of an offense.

§30.34.Factors in Determining Whether a Conviction Directly Relates to the Licensed Occupation.

(a) In determining whether a criminal conviction directly relates to the duties and responsibilities of a licensed [an] occupation, the commission shall consider each of the following factors:

(1) the nature and seriousness of the crime;

(2) the relationship of the crime to the purposes for requiring a license to engage in the occupation;

(3) the extent to which a license might offer an opportunity to engage in further criminal activity of the same type as that in which the individual previously had been involved; [~~and~~]

(4) the relationship of the crime to the ability, or capacity[~~, or fitness~~] required to perform the duties and discharge the responsibilities of the licensed occupation; and [.]

(5) any correlation between the elements of the crime and the duties and responsibilities of the licensed occupation.

(b) If the commission determines under subsection (a) of this section, that a criminal conviction directly relates to the duties and responsibilities of a licensed occupation, [~~In determining the fitness to perform the duties and discharge the responsibilities of the licensed occupation of an individual who has been convicted of a crime,~~] the executive director shall consider, in addition to the factors listed in subsection (a) of this section:

(1) the extent and nature of the individual's past criminal activity;

(2) the age of the individual when the crime was committed;

(3) the amount of time that has elapsed since the individual's last criminal activity;

(4) the conduct and work activity of the individual before and after the criminal activity;

(5) evidence of the individual's rehabilitation or rehabilitative effort while incarcerated or after release; [~~and~~]

(6) evidence of the person's compliance with any conditions of community supervision, parole, or mandatory supervision; and

(7) [~~(6)~~] other evidence of the individual's ability to perform the duties and responsibilities of the occupation [~~fitness~~], including letters of recommendation. [~~from:~~]

~~[(A) prosecutors and law enforcement and correctional officers who prosecuted, arrested, or had custodial responsibility for the individual;]~~

~~[(B) the sheriff or chief of police in the community where the individual resides; and]~~

~~[(C) any other individual in contact with the convicted individual.]~~

(c) The applicant has the responsibility, to the extent possible, to obtain and provide to the executive director the documentation described [~~recommendation of the prosecution, law enforcement, and correctional authorities as required~~] by subsection (b)(7) [~~(b)(6)~~] of this section.

(d) In determining whether a criminal conviction directly relates to the licensed occupation, the commission may not consider an arrest that did not result in the person's conviction or placement on deferred adjudication community supervision. [~~In addition to fulfilling the requirements of subsection (a)(2) of this section, the applicant shall furnish proof in the form required by the executive director that the applicant has:~~]

~~[(1) maintained a record of steady employment;]~~

~~[(2) supported the applicant's dependents;]~~

~~[(3) maintained a record of good conduct; and]~~

~~[(4) paid all outstanding court costs, supervision fees, fines, and restitution ordered in any criminal case in which the applicant has been convicted.]~~

§30.36.Notice.

(a) The executive director shall notify the individual in writing of the intent to suspend or revoke a license or deny the individual a license or the opportunity to be examined for a license (notice of intent) because of the individual's prior conviction of an offense [~~a crime and the relationship of the crime to the license~~]. The notice of intent [ ~~notification~~] shall [~~include, but not be limited to the~~]:

(1) include the reason for the suspension, revocation, denial, or disqualification, including any factor considered under §30.34 of this title (relating to Factors in Determining Whether a Conviction Directly Relates to the Licensed Occupation) that served as the basis for the suspension, revocation, denial, or disqualification;

(2) notify the individual that it is the individual's responsibility to obtain and provide to the licensing authority evidence regarding the factors listed in §30.34(b) of this title;

(3) allow the individual 30 days to submit any relevant information to the licensing authority for further consideration.

(b) The executive director shall notify the individual in writing of the final decision to suspend or revoke a license or deny the individual a license or the opportunity to be examined for the license (final notice) because of the individual's prior conviction of the offense(s) specified in the notice of intent. The final notice shall:

(1) include the reason for the suspension, revocation, denial, or disqualification, including any factor considered under §30.34 of this title that served as the basis for the suspension, revocation, denial, or disqualification;

(2) notify the individual of the review procedure provided by §30.35 of this title (relating to Guidelines); and

(3) include the deadline by which [~~earliest date that~~] the individual may appeal the action of the commission.

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

Filed with the Office of the Secretary of State on July 17, 2020.

TRD-202002943

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: August 30, 2020

For further information, please call: (512) 239-2678

SUBCHAPTER C. CUSTOMER SERVICE INSPECTORS

30 TAC §30.81, §30.95

Statutory Authority

The amendments are proposed under: Texas Water Code (TWC), §5.013, concerning the General Jurisdiction of the Commission, which establishes the general jurisdiction of the commission; TWC, §5.102, concerning General Powers, which establishes the commission's general authority necessary to carry out its jurisdiction; TWC, §5.103, concerning Rules, which requires the commission to adopt rules necessary to carry out its powers and duties; TWC, §5.105, concerning General Policy, which provides the commission authority to establish and approve all general policy of the commission by rule; TWC, §37.002, concerning Rules, which provides the commission authority to adopt rules for various occupational licenses; TWC, §37.003, concerning License or Registration Required, which provides that persons engaged in certain occupations must be licensed by the commission; TWC, §37.005, concerning Issuance and Denial of Licenses and Registration, which requires the commission to establish requirements and uniform procedures for issuing licenses and registrations; and TWC, §37.006, concerning Renewal of License or Registration, which requires the commission to establish requirements and uniform procedures for renewing licenses and registrations.

The proposed amendments implement Texas Occupations Code, §1301.255 and §1301.551.

§30.81.Purpose and Applicability.

(a) The purpose of this subchapter is to establish qualifications for issuing and renewing licenses to individuals who conduct and certify customer service inspections.

(b) An individual who performs customer service inspections must meet the qualifications of this subchapter and be licensed according to Subchapter A of this chapter (relating to Administration of Occupational Licenses and Registrations).

(c) An endorsement for customer service inspections shall expire when an individual renews a water operators license or the license expires. To obtain a customer service inspector license, an individual holding an endorsement must submit a new application with the appropriate fee.

(d) A licensed customer service inspector shall not perform plumbing inspections required under Texas Occupations Code, Chapter 1301 [~~§1301.255 and §1301.551~~].

§30.95.Exemptions.

Plumbing inspectors and water supply protection specialists licensed by a plumbing licensing authority in the state of Texas [~~the State Board of Plumbing Examiners~~] are exempt from these requirements.

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 July 17, 2020.

TRD-202002944

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: August 30, 2020

For further information, please call: (512) 239-2678

SUBCHAPTER D. LANDSCAPE IRRIGATORS, IRRIGATION TECHNICIANS AND IRRIGATION INSPECTORS

30 TAC §30.129

Statutory Authority

The amendment is proposed under: Texas Water Code (TWC), §5.013, concerning the General Jurisdiction of the Commission, which establishes the general jurisdiction of the commission; TWC, §5.102, concerning General Powers, which establishes the commission's general authority necessary to carry out its jurisdiction; TWC, §5.103, concerning Rules, which requires the commission to adopt rules necessary to carry out its powers and duties; TWC, §5.105, concerning General Policy, which provides the commission authority to establish and approve all general policy of the commission by rule; TWC, §37.002, concerning Rules, which provides the commission authority to adopt rules for various occupational licenses; TWC, §37.003, concerning License or Registration Required, which provides that persons engaged in certain occupations must be licensed by the commission; TWC, §37.005, concerning Issuance and Denial of Licenses and Registration, which requires the commission to establish requirements and uniform procedures for issuing licenses and registrations; and TWC, §37.006, concerning Renewal of License or Registration, which requires the commission to establish requirements and uniform procedures for renewing licenses and registrations.

The proposed amendment implements Texas Occupations Code, Chapter 1301.

§30.129.Exemptions.

(a) The licensing requirements of this chapter do not apply to a person who:

(1) is licensed by a plumbing licensing authority in the state of Texas [~~the Texas State Board of Plumbing Examiners~~] and is working within the scope provided by the plumbing laws;

(2) is registered or licensed as a professional engineer or architect or landscape architect if the work is related to the pursuit of the profession;

(3) is under the direct supervision of a licensed irrigator and assists in the installation, maintenance, alteration, repair, or service of an irrigation system; or

(4) is an owner of a business that employs a licensed irrigator to supervise the business' sale, design, consultation, installation, maintenance, alteration, repair, and service of irrigation systems. For the purpose of this subchapter, employs means steadily, uniformly, or habitually working in an employer-employee relationship with the intent to earn a livelihood, as opposed to working casually or occasionally.

(b) The licensing requirements of this chapter do not apply to:

(1) irrigation or yard sprinkler work that is performed by a property owner in a building or on premises owned or occupied by the owner as the owner's home;

(2) irrigation or yard sprinkler repair work, other than extension of an existing irrigation or yard sprinkler system or installation of a replacement system that is:

(A)performed by a maintenance person who does not act as an irrigator or engage in yard sprinkler construction or maintenance for the public; and

(B)incidental to and on premises owned by the business in which the person is regularly employed or engaged;

(3)irrigation or yard sprinkler work that is performed:

(A) by a regular employee of a railroad who does not act as an irrigator or engage in yard sprinkler construction or maintenance for the public; and

(B) on the premises or equipment of the railroad;

(4) irrigation and yard sprinkler work that is performed on public property by a person who is regularly employed by a county, city, town, special district, or political subdivision of the state;

(5) irrigation or yard sprinkler work that is performed by a person using a garden hose, hose sprinkler, hose-end product, including soaker hose, or agricultural irrigation system;

(6) an activity that includes a commercial agricultural irrigation system;

(7) irrigation or yard sprinkler work that is performed by an agriculturist, agronomist, horticulturist, forester, gardener, contract gardener, garden or lawn caretaker, nurseryman, or grader or cultivator of land on land owned by the individual performing the work;

(8) irrigation or yard sprinkler work that is performed by a member of a property owners' association as defined by Texas Property Code, §202.001, on real property owned by the association or in common by the members of the association if the irrigation or yard sprinkler system water real property that is less than 1/2 acre in size and is used for aesthetic or recreational purposes.

(c) A person who is exempt from the license requirements of this subchapter shall comply with the standards established by Chapter 344 of this title (relating to Landscape Irrigation). The term irrigation system does not include a system used on or by an agricultural operation as defined in Texas Agriculture Code, §251.002.

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 July 17, 2020.

TRD-202002945

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: August 30, 2020

For further information, please call: (512) 239-2678

SUBCHAPTER K. PUBLIC WATER SYSTEM OPERATORS AND OPERATIONS COMPANIES

30 TAC §30.402

Statutory Authority

The amendment implements TWC, §§5.013, 5.102, 5.103, 5.105, 37.002, 37.003, 37.005, and 37.006.

§30.402.Exemptions.

(a) An individual who performs process control duties in production or distribution of drinking water for a transient non-community water system as defined in §290.38 [~~§290.38(77)~~ ] of this title (relating to Definitions), is exempt from the licensing requirements of this subchapter, if the source water for the water system is purchased treated water or groundwater that is not under the direct influence of surface water.

(b) An operator-in-training under the direct supervision of a licensed public water system operator is exempt from the licensing requirements of this subchapter.

(c) A military operator-in-training under the direct supervision of a licensed public water system operator is exempt from the licensing requirements of this subchapter for the purpose of collecting microbiological samples or determining disinfection residuals at military facilities' water distribution systems. The military operator-in-training is not exempt from the licensing requirements of this subchapter for the purpose of performing any other process control duties in the distribution or treatment facilities of a public water system.

(d) An individual who holds a groundwater or surface water license may perform duties relating to the operation and maintenance of drinking water production, purchased water, and water distribution systems and is not required to hold a distribution license.

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 July 17, 2020.

TRD-202002946

Robert Martinez

Director, Environmental Law Division

Texas Commission on Environmental Quality

Earliest possible date of adoption: August 30, 2020

For further information, please call: (512) 239-2678