TITLE 16. ECONOMIC REGULATION

PART 2. PUBLIC UTILITY COMMISSION OF TEXAS

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

The Public Utility Commission of Texas (commission) repeals existing 16 TAC §24.245, relating to revocation of a certificate of convenience and necessity, and adopts new 16 TAC §24.245, relating to revocation of a certificate of convenience and necessity or amendment of a certificate of convenience and necessity by decertification, expedited release, or streamlined expedited release, with changes to the proposed text as published in the March 13, 2020, issue of the Texas Register (45 TexReg 1787). The new rule will implement Senate Bill 2272, enacted by the 86th Texas Legislature, and clarify processes for revocation or amendment of certificates of convenience and necessity (CCN) by decertification, expedited release, and streamlined expedited release. This repeal and new rule are adopted under Project Number 50028.

No public hearing was requested so no public hearing was held.

The Texas Association of Water Companies (TAWC) submitted comments on the proposed new rule. No reply comments were received.

Unless otherwise specified, all references to subsections, paragraphs, and subparagraphs relate to §24.245.

General Comments on §24.245

TAWC would like the commission to adopt CCN policies that provide the best opportunity possible for CCN holders to retain their lawfully obtained CCNs and receive just and adequate compensation under the applicable statutory framework.

Commission Response

The new rule is intended to implement Texas Water Code requirements and the policies established by the Legislature.

§24.245(c)(1)

Proposed paragraph (c)(1) states "An order of the commission in any proceeding under this section does not create a vested property right." TAWC requested that the commission not adopt this proposed provision because the language is not statutorily required, suggests the commission can determine by rule what is or is not a vested property right in Texas, and is unnecessary in the context of a CCN decertification proceeding.

Commission Response

The commission agrees that the provision is unnecessary and removes it from the rule.

§24.245(d)(2)(F)

Proposed subsection (d) applies to CCN revocations or amendments initiated by the commission or the CCN holder. TAWC stated that the proposed language for §24.245(d)(2)(F) should be modified to clarify that it applies only to decertification amendments or revocations by consent ordered under subsection (d) and not to other CCN application matters filed under other commission rules or pursuant to agreements.

Commission Response

The commission modifies §24.245(d)(2)(F) to clarify that it applies only to CCN revocations and decertifications ordered under §24.245(d)(2).

§24.245(e)(2) and (5)

Proposed subsection (e) implements TWC §13.2451 which provides for decertification of a municipality's service area under certain circumstances. TAWC requested that the rule permit any retail public utility, not just retail public utilities with "adjacent" service areas, to file a petition to remove certificated areas under this subsection. TAWC stated that it is not clear whether "adjacent" means directly abutting the area to be removed or further away. TAWC suggested that for purposes of both paragraph (e)(2) and notice under paragraph (e)(5), it might be appropriate to define the appropriate distance as up to two miles away in line with CCN application notice requirements.

Commission Response

The commission deletes paragraph (e)(2) and modifies paragraph (e)(5) of the proposed rule to provide flexibility concerning who may file a petition under this subsection and will determine eligibility to submit a petition and appropriate notice on a case by case basis.

§24.245(f)(4)

Proposed paragraph (f)(4) provides that the fact that a CCN holder is a borrower under a federal loan program is not a bar to a request for expedited release and provision of services by an alternate retail public utility. TAWC questioned the legality of the federal debt language in light of recent federal court decisions and stated that the commission should consider removing this language.

Commission Response

The commission declines to modify the rule as suggested by TAWC. The proposed rule is based on clear requirements in TWC §13.254(a-1). The court challenges to which TAWC refers are not yet finally decided. If a change in law occurs, the commission will implement the new law at that time.

§24.245(f)(14)

Proposed paragraph (f)(14) relates to compensation to a former CCN holder after expedited release has been granted. TAWC commented that a CCN holder should not be required to file a response to a petition under subsection (f) concerning release or face a requirement to overcome a "rebuttable presumption" that no compensation should be paid. TAWC stated that the propriety of CCN release and compensation are two different issues and should be handled separately and the following language, which is not statutorily required, should be removed: "If the current CCN holder did not timely file a response to the landowner's petition, there is a rebuttable presumption that the amount of compensation to be paid is zero."

Commission Response

The commission modifies the rule as proposed by TAWC.

§24.245(g)

Proposed subsection (g) provides that the commission will determine the compensation to be paid to the CCN holder at the time another retail public utility seeks to provide service in the removed area and before service is actually provided. TAWC requested the commission to manage the award of compensation for a TWC §13.254(a-1) expedited release in the same proceeding as the CCN release to make the process more like the streamlined expedited release process and provide better assurance to Texas utilities that compensation will in fact be addressed. TAWC stated that leaving compensation to a future potential proceeding does not guarantee CCN holders will be compensated because there is no requirement for the alternate retail public utility used as the basis for an (a-1) expedited release to actually provide notice of intent to serve the released area. A petitioning landowner and the alternate retail public utility contemplated could potentially fail to come to terms on a non-standard service agreement and leave the area unserved, which could also leave the CCN holder that lost service territory uncompensated.

Commission Response

The commission declines to modify the rule as requested by TAWC. TWC §13.254(e) provides that after expedited release under §13.254(a-1), the amount of compensation, if any, must be determined at the time another retail public utility seeks to provide service. The utility that ultimately seeks to serve the area, which may or may not be the alternate retail public utility identified by the petitioning landowner, is not required to be a party to the expedited release proceeding. Therefore, it may not be possible to decide the amount of compensation in the proceeding on the petition for expedited release. In streamlined expedited release proceedings, no consideration is required to be given to future service to the removed area, although under TWC §13.2541(a), which incorporates TWC §13.254(d), no utility may serve the removed area until compensation has been paid. The compensation to the CCN holder is paid by the petitioning landowner and there is a statutory deadline for payment.

§24.245(g)(3)

Proposed paragraph (g)(3) provides that if a former CCN holder and prospective retail public utility have agreed on the amount of compensation to be paid, they must make a joint filing stating the amount of compensation to be paid. TAWC questioned the requirement to file a statement about the amount of agreed compensation in a TWC §13.254(a-1) expedited release matter. TAWC stated that this requirement could be viewed as violative of settlement privileges and chill negotiation efforts, and that at a minimum, the rule should clarify that the statement may be filed confidentially.

Commission Response

The commission declines to modify the proposed rule. The commission is required to find that the compensation amount is just and adequate and cannot make such a finding without knowing the amount. The commission's procedural rules provide for filing of information claimed to be confidential, subject to the commission's authority to declassify information later determined not to be confidential.

§24.245(h)(1)(C)

Proposed subparagraph (h)(1)(C) provides that the owner of a tract of land may petition for streamlined expedited release of all or a portion of the tract of land if at least part of the tract of land is located in the current CCN holder's certificated service area and at least some of that part is located in a qualifying county. TAWC commented that the rule should require that the entire 25 acres should be required to be in a targeted CCN and qualifying county to be eligible for removal. TAWC stated that the proposed requirement expands the types of tracts eligible for removal from a CCN holder's certificated service area to the detriment of Texas utilities.

Commission Response

The commission declines to modify the rule as proposed by TAWC. The provision to which TAWC objects is in the current commission rule and reflects the commission's interpretation of the TWC §13.2541 requirements.

§24.245(h)(8)

Proposed paragraph (h)(8) provides that the fact that a CCN holder is a borrower under a federal loan program is not a bar to the release of land under §24.245(h) and the CCN holder must not initiate an application to borrow money under a federal loan program after the date the petition is filed until the commission issues a final decision on the petition. TAWC questioned the legality of the federal debt language in light of recent federal court decisions and stated that the commission should consider removing this language.

Commission Response

The commission declines to modify the rule as suggested by TAWC. The proposed rule is based on clear requirements in TWC §13.2541(d) and (e). The court challenges to which TAWC refers are not yet finally decided. If a change in law occurs, the commission will implement the new law at that time.

§24.245(i)

Proposed subsection (i) applies to determination of compensation to the former CCN holder after streamlined expedited release. TAWC would like 16 TAC §24.245(i) clarified to state that compensation will be determined in the same proceeding as the streamlined expedited release.

Commission Response

The commission's current practice is to address release and compensation in the same proceeding and modifies the rule to expressly provide that the amount of compensation will be decided in the same proceeding as the petition for streamlined expedited release.

§24.245(i)(1)

Proposed paragraph (i)(1) provides that if a former CCN holder and landowner have agreed on the amount of compensation to be paid, they must make a joint filing stating the amount of compensation to be paid. TAWC questioned the requirement to file a statement about the amount of agreed compensation in a §13.2541 streamlined expedited release matter. TAWC commented that this type of statement could be viewed as violative of settlement privileges and chill negotiation efforts and that at a minimum the rule should clarify that the statement may be filed confidentially.

Commission Response

The commission declines to modify the proposed rule. The commission is required to find that the compensation amount is just and adequate and cannot make such a finding without knowing the amount. The commission's procedural rules provide for filing of information claimed to be confidential, subject to the commission's authority to declassify information later determined not to be confidential.

§24.245(i)(4)

TAWC disagreed with the inclusion of proposed paragraph (i)(4) which provides that if the former CCN holder fails to make a filing about the amount of agreed compensation or to engage an appraiser or file an appraisal within the timeframes required, the amount of compensation to be paid will be deemed to be zero. TAWC stated that CCN holders targeted by streamlined expedited release petitions should never receive zero dollars as compensation because TWC §13.254(d) and (g) as incorporated by reference in TWC §13.2541 collectively mandate a requirement for "just and adequate compensation" which should be required whether a targeted CCN holder makes a filing regarding compensation or not. TAWC further stated that the petitioner and the commission should be required to figure out the appropriate amount owed with or without a filing by the targeted CCN holder. TAWC stated that the PUC continues to order CCN holders who lose service territory through the streamlined expedited release process to make a county recording with a map and boundary description of the changed CCN area pursuant to TWC §13.257(r) for which there is typically a filing fee and time involved. Further, some amount of time and expense is always required for a CCN holder's attorney or other representative to review and determine an appropriate response to each streamlined expedited release petition filed against it. TAWC stated that these minimum expenses exist regardless of whether a targeted CCN holder makes a filing so there should be some "just and adequate" amount awarded.

Commission Response

The commission declines to modify the rule because TWC §13.2541 requires the former CCN holder to reach an agreement with the landowner or engage an appraiser. The proposed rule is intended to provide an incentive for the former CCN holder to comply with the statutory requirements so that the proceeding can be concluded within the required time periods.

§24.245(i)(5)

TAWC noted that this paragraph includes a typographical error. "CNN" should be changed to "CCN."

Commission Response

The commission corrects the typographical error.

§24.245(j)

TWC §13.254(g) and proposed 16 TAC §24.245(j)(2)(H) allow consideration of "other relevant factors" in compensation determinations. TAWC commented that proposed §24.245(j) should specifically permit consideration of expenses required to comply with TWC §13.257(r). TAWC stated that the rule should also recognize that the revenue stream lost from anticipated future customers in growth areas, not just existing customers which typically do not exist in expedited release and streamlined expedited release situations, is a "relevant" compensation consideration even though not specifically stated in TWC §13.254(g).

Commission Response

The commission modifies the rule to expressly provide for expenses incurred under TWC §13.257(r) as necessary and reasonable legal expenses under §24.245(j)(2)(G). The commission declines to modify the rule to expressly allow recovery of the revenue stream from future customers because it is not included in TWC §13.254(g). However, the former CCN holder is able to request recovery under §24.245(j)(2)(H).

Appraiser Qualifications

TAWC stated that the proposed rule does not establish qualifications or a procedure for maintaining a list of qualified individuals for appraisal preparation under the TWC §§13.254 and 13.2541 compensation procedures and suggested that the commission establish ground rules for who can perform this work.

Commission Response

The commission does not adopt requirements for appraisers in this project because it is outside the scope of the notice of the proposed rule.

All comments, including any not specifically referenced herein, were fully considered by the commission. In adopting this section, the commission makes other modifications for the purpose of clarifying its intent.

SUBCHAPTER H. CERTIFICATES OF CONVENIENCE AND NECESSITY

16 TAC §24.245

This repeal is adopted under the Texas Water Code §13.041, which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; Texas Water Code §13.254, which authorizes decertification and expedited release; Texas Water Code §13.2541, which authorizes streamlined expedited release; and Texas Water Code §13.2551, which authorizes the commission to place conditions on decertification.

Cross reference to statutes: Texas Water Code §§13.041, 13.254, 13.2541 and 13.2551.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 12, 2020.

TRD-202002363

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Effective date: July 2, 2020

Proposal publication date: March 13, 2020

For further information, please call: (512) 936-7244


16 TAC §24.245

Statutory Authority

The new rule is adopted under Texas Water Code §13.041, which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction, and Texas Water Code §13.2551, which authorizes the commission to place conditions on decertification.

Cross reference to statutes: Texas Water Code §§13.041 and 13.2551.

§24.245.Revocation of a Certificate of Convenience and Necessity or Amendment of a Certificate of Convenience and Necessity by Decertification, Expedited Release, or Streamlined Expedited Release.

(a) Applicability. This section applies to proceedings for revocation or amendment by decertification, expedited release, or streamlined expedited release of a certificate of convenience and necessity (CCN).

(b) Definitions. The following terms, when used in this section, have the following meanings unless the context indicates otherwise:

(1) Alternate retail public utility -- The retail public utility from which a landowner plans to receive service after the landowner obtains expedited release under subsection (f) of this section.

(2) Amendment -- The change of a CCN to remove a portion of a service area by decertification amendment, expedited release, or streamlined expedited release.

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

(4) Decertification amendment -- A process by which a portion of a certificated service area is removed from a CCN, other than expedited release or streamlined expedited release.

(5) Expedited Release -- Removal of a tract of land from a CCN area under Texas Water Code (TWC) §13.254(a-1).

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

(7) Landowner -- The owner of a tract of land who files a petition for expedited release or streamlined expedited release.

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

(9) Removed area -- Area that will be or has been removed under this section from a CCN.

(10) Streamlined Expedited Release -- Removal of a tract of land from a CCN area under TWC §13.2541.

(c) Provisions applicable to all proceedings for revocation, decertification amendment, expedited release, or streamlined expedited release.

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

(2) A former CCN holder is not required to provide service within a removed area.

(3) If the CCN of any retail public utility is revoked or amended by decertification, expedited release, or streamlined expedited release, the commission may by order require one or more other retail public utilities to provide service to the removed area, but only with the consent of each retail public utility that is to provide service.

(4) A retail public utility, including an alternate retail public utility, may not in any way render retail water or sewer service directly or indirectly to the public in a removed area unless any compensation due has been paid to the former CCN holder and a CCN to serve the area has been obtained, if one is required.

(d) Revocation or amendment by decertification.

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

(A) The current CCN holder has never provided, is no longer providing, is incapable of providing, or has failed to provide continuous and adequate service in all or part of the certificated service area. If the current CCN holder opposes revocation or decertification amendment on one of these bases, it has the burden of proving that it is, or is capable of, providing continuous and adequate service.

(B) The current CCN holder is in an affected county as defined in TWC §16.341, and the cost of providing service by the current CCN holder is so prohibitively expensive as to constitute denial of service. Absent other relevant factors, for commercial developments or residential developments started after September 1, 1997, the fact that the cost of obtaining service from the current CCN holder makes the development economically unfeasible does not render such cost prohibitively expensive.

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

(D) The current CCN holder failed to apply for a cease-and-desist order under TWC §13.252 and §24.255 of this title (relating to content of request for cease and desist order by the commission under TWC §13.252) within 180 days of the date that the current CCN holder became aware that another retail public utility was providing service within the current CCN holder's certificated service area, unless the current CCN holder proves that good cause exists for its failure to timely apply for a cease-and-desist order.

(E) The current CCN holder has consented in writing to the revocation or amendment.

(2) A retail public utility may file a written request with the commission to revoke its CCN or to amend its CCN by decertifying a portion of the service area.

(A) The retail public utility must provide, at the time its request is filed, notice of its request to each customer and landowner within the affected service area of the utility.

(B) The request must specify the area that is requested to be revoked or removed from the CCN area.

(C) The request must address the effect of the revocation or decertification amendment on the current CCN holder, any existing customers, and landowners in the affected service area.

(D) The request must include the mapping information required by §24.257 of this title (relating to Mapping Requirements for Certificate of Convenience and Necessity Applications).

(E) The commission may deny the request to revoke or amend a CCN if existing customers or landowners will be adversely affected.

(F) If a retail public utility's request for decertification amendment or revocation by consent under this paragraph is granted, the retail public utility is not entitled to compensation from a prospective retail public utility.

(3) The commission may initiate a proceeding to revoke a CCN or decertify a portion of a service area on its own motion or upon request of commission staff.

(4) The current CCN holder has the burden to establish that it is, or is capable of, providing continuous and adequate service and, if applicable, that there is good cause for failing to file a cease and desist action under TWC §13.252 and §24.255 of this title.

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

(1) A proceeding to remove an area from a municipality's service area may be initiated by the commission with or without a petition.

(2) A petition filed under this subsection must allege that a CCN was granted for the area more than five years before the petition was filed and the municipality has not provided service in the area.

(3) A petition filed under this subsection must include the mapping information required by §24.257 of this title.

(4) Notice of the proceeding to remove an area must be given to the municipality, landowners within the area to be removed, and other retail public utilities as determined by the presiding officer.

(5) If the municipality asserts that it is providing service to the area, the municipality has the burden to prove that assertion.

(f) Expedited release.

(1) An owner of a tract of land may petition the commission for expedited release of all or a portion of the tract of land from a current CCN holder's certificated service area so that the area may receive service from an alternate retail public utility if all the following circumstances exist:

(A) the tract of land is at least 50 acres in size;

(B) the tract of land is not located in a platted subdivision actually receiving service;

(C) the landowner has submitted a request for service to the current CCN holder at least 90 calendar days before filing the petition;

(D) the alternate retail public utility possesses the financial, managerial, and technical capability to provide service as identified in the request for service provided under paragraph (5) of this subsection on a continuous and adequate basis; and

(E) the current CCN holder:

(i) has refused to provide service;

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

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

(2) An owner of a tract of land may not file a petition under paragraph (1) of this subsection if the landowner's property is located in the boundaries of any municipality or the extraterritorial jurisdiction of a municipality with a population of more than 500,000 and the municipality or retail public utility owned by the municipality is the current CCN holder.

(3) The landowner's desired alternate retail public utility must be:

(A) an existing retail public utility; or

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

(4) The fact that a current CCN holder is a borrower under a federal loan program does not prohibit the filing of a petition under this subsection or authorizing an alternate retail public utility to provide service to the removed area.

(5) The landowner must submit to the current CCN holder a written request for service. The request must be sent by certified mail, return receipt requested, or by hand delivery with written acknowledgement of receipt. For a request other than for standard residential or commercial service, the written request must identify the following:

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

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

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

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

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

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

(6) The landowner's petition for expedited release under this subsection must be verified by a notarized affidavit and demonstrate that the circumstances identified in paragraph (1) of this subsection exist. The petition must include the following:

(A) the name of the alternate retail public utility;

(B) a copy of the request for service submitted as required by paragraph (5) of this subsection;

(C) a copy of the current CCN holder's response to the request for service, if any;

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

(E) the mapping information described in subsection (k) of this section.

(7) The landowner must mail a copy of the petition to the current CCN holder and the alternate retail public utility via certified mail on the day that the landowner files the petition with the commission.

(8) The presiding officer will determine whether the petition is administratively complete. If the petition is determined not to be administratively complete, the presiding officer will issue an order describing the deficiencies in the petition and setting a deadline for the petitioner to address the deficiencies. When the petition is determined to be administratively complete, the presiding officer will establish a procedural schedule that is consistent with paragraphs (9) and (10) of this subsection. The presiding officer may recommend dismissal of the petition under §22.181(d) of this title if the petitioner fails to supplement or amend the petition within the required timeframe after the presiding officer has determined that the petition is not administratively complete.

(9) The current CCN holder may file a response to the petition within a timeframe specified by the presiding officer, not to exceed 20 days from the date the petition is determined to be administratively complete. The response must be verified by a notarized affidavit.

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

(11) The commission will base its decision on the filings submitted by the current CCN holder, the landowner, and commission staff. Chapter 2001 of the Texas Government Code does not apply to any petition filed under this subsection. The current CCN holder or landowner may file a motion for rehearing of the commission's decision on the same timeline that applies to other final orders of the commission. The commission's order ruling on the petition may not be appealed.

(12) If the current CCN holder has never made service available through planning, design, construction of facilities, or contractual obligations to provide service to the tract of land, the commission is not required to find that the alternate retail public utility can provide better service than the current CCN holder, but only that the alternate retail public utility can provide the requested service. This paragraph does not apply to Cameron, Willacy, and Hidalgo Counties or to a county that meets any of the following criteria:

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

(B) the county has a population of more than 100,000 and less than 200,000 and borders a county described by subparagraph (A) of this paragraph;

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

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

(13) If the alternate retail public utility is a proposed district, then the commission will condition the release of the tract of land and required CCN amendment or revocation on the final and unappealable creation of the district. The district must file a written notice with the commission when the creation is complete and provide a copy of the final order, judgment, or other document creating the district.

(14) The commission may require an award of compensation to the former CCN holder under subsection (g) of this section. The determination of the amount of compensation, if any, will be made according to the procedures in subsection (g) of this section.

(g) Determination of compensation to former CCN holder after revocation, decertification amendment or expedited release. The determination of the monetary amount of compensation to be paid to the former CCN holder, if any, will be determined at the time another retail public utility seeks to provide service in the removed area and before service is actually provided. This subsection does not apply to revocations or decertification amendments under paragraph (d)(2) of this section or to streamlined expedited release under subsection (h) of this section.

(1) After the commission has issued its order granting revocation, decertification, or expedited release, the prospective retail public utility must file a notice of intent to provide service. A notice of intent filed before the commission issues its order under subsection (d) or (f) of this section is deemed to be filed on the date the commission's order is signed.

(2) The notice of intent must include the following information:

(A) a statement that the filing is a notice of intent to provide service to an area that has been removed from a CCN under subsection (d) or (f) of this section;

(B) the name and CCN number of the former CCN holder; and

(C) whether the prospective retail public utility and former CCN holder have agreed on the amount of compensation to be paid to the former CCN holder.

(3) If the former CCN holder and prospective retail public utility have agreed on the amount of compensation to be paid to the former CCN holder, they must make a joint filing with the commission stating the amount of the compensation to be paid.

(4) If the former CCN holder and prospective retail public utility have not agreed on the compensation to be paid to the former CCN holder, the monetary amount of compensation must be determined by a qualified individual or firm serving as an independent appraiser as follows:

(A) If the former CCN holder and prospective retail public utility have agreed on an independent appraiser, they must make a joint filing with the commission identifying the individual or firm who will be the independent appraiser within ten days of the filing of the notice of intent under paragraph (1) of this subsection. The costs of the independent appraiser must be borne by the prospective retail public utility.

(B) If the former CCN holder and prospective retail public utility cannot agree on an independent appraiser within ten days of the filing of the notice of intent, the former CCN holder and prospective retail public utility must each engage its own appraiser at its own expense. Each appraiser must file its appraisal with the commission within 60 calendar days of the filing of the notice of intent. After receiving the appraisals, the commission will appoint a third appraiser who must make a determination of compensation within 30 days. The determination by the commission-appointed appraiser may not be less than the lower appraisal or more than the higher appraisal of the appraisers engaged by the former CCN holder and prospective retail public utility. The former CCN holder and prospective retail public utility must each pay half the cost of the commission-appointed appraisal directly to the commission-appointed appraiser.

(C) The appraisers must determine the amount of compensation in accordance with subsection (j) of this section.

(5) The determination of compensation by the agreed-upon appraiser under paragraph (4)(A) or the commission-appointed appraiser under paragraph (4)(B) of this subsection is binding on the commission, the landowner, the former CCN holder, and the prospective retail public utility.

(6) If the former CCN holder fails to make a filing with the commission about the amount of agreed compensation, or to engage an appraiser, or file an appraisal within the timeframes required by this subsection, the amount of compensation to be paid will be deemed to be zero. If the prospective retail public utility fails to make a filing with the commission about the amount of agreed compensation, or to engage an appraiser, or file an appraisal within the timeframes required by this subsection, the presiding officer may recommend dismissal of the notice of intent to provide service to the removed area.

(7)The commission will issue an order establishing the amount of compensation to be paid to the former CCN holder not later than 90 days after the date on which a retail public utility files its notice of intent to provide service to the decertified area.

(h) Streamlined expedited release.

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

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

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

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

(2) A qualifying county under paragraph (1)(C) of this subsection:

(A) has a population of at least one million;

(B) is adjacent to a county with a population of at least one million, and does not have a population of more than 45,000 and less than 47,500; or

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

(3) A landowner seeking streamlined expedited release under this subsection must file with the commission a petition and supporting documentation containing the following information and verified by a notarized affidavit:

(A) a statement that the petition is being submitted under TWC §13.2541 and this subsection;

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

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

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

(E) copies of deeds demonstrating ownership of the tract of land by the landowner;

(F) proof that a copy of the petition was mailed to the current CCN holder via certified mail on the day that the landowner filed the petition with the commission; and

(G) the mapping information described in subsection (k) of this section.

(5) The presiding officer will determine whether the petition is administratively complete. If the petition is determined not to be administratively complete, the presiding officer will issue an order describing the deficiencies in the petition and setting a deadline for the petitioner to address the deficiencies. When the petition is determined to be administratively complete, the presiding officer will establish a procedural schedule that is consistent with paragraphs (6) and (7) of this subsection. The presiding officer may recommend dismissal of the petition if the petitioner fails to supplement or amend the petition within the required timeframe after the presiding officer has determined that the petition is not administratively complete.

(6) The current CCN holder may file a response to the petition within a timeframe specified by the presiding officer, not to exceed 20 days from the date the petition is determined to be administratively complete. The response must be verified by a notarized affidavit.

(7) The commission will issue a decision on a petition filed under this subsection no later than 60 calendar days after the presiding officer by order determines that the petition is administratively complete. The commission will base its decision on the information filed by the landowner, the current CCN holder, and commission staff. No hearing will be held.

(8) The fact that a current CCN holder is a borrower under a federal loan program is not a bar to the release of a tract of land under this subsection. The CCN holder must not initiate an application to borrow money under a federal loan program after the date the petition is filed until the commission issues a final decision on the petition.

(9) The commission may require an award of compensation by the landowner to the former CCN holder as specified in subsection (i).

(i) Determination of compensation to former CCN holder after streamlined expedited release. The amount of compensation, if any, will be determined after the commission has granted a petition for streamlined expedited release filed under subsection (h) of this section. The amount of compensation, if any, will be decided in the same proceeding as the petition for streamlined expedited release.

(1) If the former CCN holder and landowner have agreed on the amount of compensation to be paid to the former CCN holder, they must make a joint filing with the commission stating the amount of the compensation to be paid.

(2) If the former CCN holder and landowner have not agreed on the compensation to be paid to the former CCN holder, the monetary amount of compensation must be determined by a qualified individual or firm serving as an independent appraiser under the following procedure.

(A) If the former CCN holder and landowner have agreed on an independent appraiser, the former CCN holder and landowner must make a joint filing with the commission identifying the individual or firm who will be the independent appraiser within ten days after the commission grants streamlined expedited release under subsection (h) of this section. The costs of the independent appraiser must be borne by the landowner. The appraiser must file its appraisal with the commission within 70 days after the commission grants streamlined expedited release.

(B) If the former CCN holder and landowner have not agreed on an independent appraiser within ten days after the commission grants streamlined expedited release under subsection (h) of this section, the former CCN holder and landowner must each engage its own appraiser at its own expense. Each appraiser must file its appraisal with the commission within 70 calendar days after the commission grants streamlined expedited release. After receiving the appraisals, the commission will appoint a third appraiser who must make a determination of compensation within 100 days after the date the commission grants streamlined expedited release. The determination by the commission-appointed appraiser may not be less than the lower appraisal or more than the higher appraisal made by the appraisers engaged by the former CCN holder and landowner. The former CCN holder and landowner must each pay half the cost of the commission-appointed appraisal directly to the commission-appointed appraiser.

(C) The appraisers must determine the amount of compensation in accordance with subsection (j) of this section.

(3) The determination of compensation by the agreed-upon appraiser under paragraph (2)(A) or the commission-appointed appraiser under paragraph (2)(B) of this subsection is binding on the commission, former CCN holder, and landowner.

(4) If the former CCN holder fails to make a filing with the commission about the amount of agreed compensation or engage an appraiser or file an appraisal within the timeframes required by this subsection, the amount of compensation to be paid will be deemed to be zero. If the landowner fails to make a filing with the commission about the amount of agreed compensation, or engage an appraiser, or file an appraisal within the timeframes required by this subsection, the commission will base the amount of compensation to be paid on the appraisal provided by the CCN holder.

(5) The commission will issue an order establishing the amount of compensation to be paid and directing the landowner to pay the compensation to the former CCN holder not later than 60 days after the commission receives the final appraisal.

(6) The landowner must pay the compensation to the former CCN holder not later than 90 days after the date the compensation amount is determined by the commission. The commission will not authorize a prospective retail public utility to serve the removed area until the landowner has paid to the former CCN holder any compensation that is required.

(j) Valuation of real and personal property of the former CCN holder.

(1) The value of real property must be determined according to the standards set forth in chapter 21 of the Texas Property Code governing actions in eminent domain.

(2) The value of personal property must be determined according to this paragraph. The following factors must be used in valuing personal property:

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

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

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

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

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

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

(G) necessary and reasonable legal expenses and professional fees, including costs incurred to comply with TWC §13.257(r); and

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

(k) Mapping information.

(1) For proceedings under subsections (f) or (h) of this section, the following mapping information must be filed with the petition:

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

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

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

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

(ii) a recorded plat; or

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

(2) Commission staff may request additional mapping information.

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

(l) Additional conditions for decertification under subsection (d) of this section.

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

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

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

(2) If the commission finds that, as a result of revocation or amendment by decertification under subsection (d) of this section, the current CCN holder will be unable to provide continuous and adequate service at an affordable cost to the current CCN holder's remaining customers, then:

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

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

(i) transfer of debt and other contract obligations;

(ii) transfer of real and personal property;

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

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

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

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

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

(4) If the commission orders the prospective retail public utility to provide service to the entire service area of the current CCN holder, the commission will not order compensation to the current CCN holder, the commission will not make a determination of the amount of compensation to be paid to the current CCN holder, and the prospective retail public utility must not file a notice of intent under subsection (g) of this section.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 12, 2020.

TRD-202002364

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Effective date: July 2, 2020

Proposal publication date: March 13, 2020

For further information, please call: (512) 936-7244


PART 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION

CHAPTER 65. BOILERS

The Texas Commission of Licensing and Regulation (Commission) adopts amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 65, Subchapter A, §65.2; Subchapter C, §65.13; Subchapter N, §65.214; Subchapter O, §65.300; and Subchapter R, §65.603 and §65.607, regarding the Boilers program. The amendments are adopted without changes to the proposed text as published in the January 31, 2020, issue of the Texas Register (45 TexReg 683). These rules will not be republished.

The Commission also adopts amendments to 16 TAC, Chapter 65, Subchapter N, §65.206, regarding the Boilers program, with changes to the proposed text as published in the January 31, 2020, issue of the Texas Register (45 TexReg 683). This rule will be republished.

The adopted rule amendments are referred to as "adopted rules."

EXPLANATION OF AND JUSTIFICATION FOR THE RULES

The rules under 16 TAC Chapter 65 implement Texas Health and Safety Code, Chapter 755, Boilers.

The adopted rules are the product of analysis and discussion among the staff and with the Board of Boiler Rules. The primary focus and goal are the protection of public health, safety, and welfare. All participants agreed that it is necessary to that protection to implement a simple method to prevent additional deaths and injuries to Texans. Other unrelated changes are included for administrative matters and overall clarity in the rules.

The adopted rules include three components. First, a carbon monoxide (CO) detector and interlock system is newly required for boilers installed in boiler rooms on or after September 1, 2020, which will significantly reduce deaths and injuries resulting from CO poisoning. This requirement is necessary to protect public health, safety, and welfare. Second, the adopted rules provide the Department the opportunity to address public comments received during the most recent four-year review of the Boilers rules. Finally, the adopted rules make edits and clarifications for consistency and understandability.

SECTION-BY-SECTION SUMMARY

The amendments to §65.2 update the Modular Boiler definition and clarify the Authorized Inspector definition.

The amendments to §65.13 add clarifying wording for temporary boiler operating permits.

The amendments to §65.206 update the name of the section to reflect its increased scope and add the requirement for a CO detector and interlock system to disable the burners of any CO-producing boiler if the concentration of CO in the boiler room reaches a dangerous level. The amendments also specify applicability and update citations. The section is renumbered accordingly. In response to a public comment the effective date of subsection (a) is modified from June 1, 2020, to September 1, 2020.

The amendments to §65.214 update wording for a modular boiler requirement consistent with the revised definition of Modular Boiler and update a citation.

Amendments to §65.300 make clarifying wording changes.

The amendments to §65.603 reword existing boiler room ventilation requirements to more clearly describe both applicability and the ventilation options.

The amendment to §65.607 corrects a citation.

Texas Government Code, §2001.039 requires state agencies to review their rules every four years to determine if the reasons for initially adopting the rules continue to exist. The Notice of Intent to Review the Boilers rules was published in the Texas Register on August 24, 2018 (43 TexReg 5545). During the subsequent public comment period two comments were submitted. The content of the comments and the conclusion of the review process appeared in the Texas Register on February 8, 2019 (44 TexReg 594). No changes to the Boilers rules were made during the rule review process and none are being adopted in this rulemaking that are related to the rule review. However, the Department is taking this opportunity to address those comments as part of the response to the comments received for this proposed rule.

PUBLIC COMMENTS

The Department drafted and distributed the proposed rules to persons internal and external to the agency. The proposed rules were published in the January 31, 2020, issue of the Texas Register (45 TexReg 683). The deadline for public comments was March 3, 2020. The Department received comments from two interested parties on the proposed rules during the 30-day public comment period. The public comments are summarized below.

Comment: One commenter supports the rule but describes concerns with immediate and unwarned disabling of the burners of one or more boilers in low-risk environments, including remote boilers in isolated buildings and boiler rooms with segregated combustion air and ventilation systems. The commenter expressed that the consequences could be costly, result in significant loss of product, and possibly endanger public health and welfare in some facilities. The commenter recommends that the carbon monoxide detector function as an audible and visual alarm without disabling the burners, or as a two-stage alarm system that provides time to address the problem before the burners are disabled, for certain categories of boiler users.

Department Response: The Department appreciates the support of the rules, and agrees that some facilities could face serious consequences if the interlock operates to disable the burners unexpectedly. The Department recommends that in such applications, the owner install an alarm that initiates before the trigger point of 50 ppm (at which concentration the burners must automatically be disabled). Such early warning could provide time to address an increased concentration of carbon monoxide before it reaches 50 ppm.

The Department is examining the feasibility of identifying types or categories of boilers or installations that may operate safely and maintain protectiveness with modification of the operation of the CO detector and interlock system. Rulemaking may be undertaken to address those applications. The existing variance procedure is available to request modification of the operation of the required CO detector and interlock system. The approval of variances is at the discretion of the Executive Director and the Authorized Inspection Agency. Variances will not be approved absent the demonstration of significant need for modification and reasonableness of any modification. No change has been made to the rule in response to this comment.

Comment: One commenter stated that reducing safety risks is of the highest priority and that he is in favor of the rule changes and appreciates the work of the Department.

The commenter inquires if the level of ppm at which the burners are disabled could be maintained at the existing level of 100 ppm in the vent that will be replaced instead of being lowered to the proposed 50 ppm, because the difference in amount of exposure time required for negative effects would be negligible.

Department Response: The Department appreciates the expression of support for the rule amendments and the Department. The concentration at which the burners must be disabled was set at 50 ppm because this concentration is the Occupational Safety and Health Administration's (OSHA) Permissible Exposure Limit (PEL) for carbon monoxide. Disabling the burners only when the concentration of CO reaches 100 ppm would create the risk that the CO concentration would exceed the PEL, possibly for extended amounts of time. The Department disagrees with the recommendation and believes the current PEL is the safe and appropriate level at which the interlock must be triggered. No change has been made to the rule in response to this comment.

Comment: The commenter explains that the proposed effective date of the CO detector and interlock requirement of June 1, 2020, would follow the effective date of the rule by about one month. The commenter expressed that this is a significant rule change and this time frame for implementation does not provide adequate planning time when designing new boiler rooms or installations. The commenter recommends that the CO detector and interlock requirement become effective on September 1, 2020.

Department Response: The Department agrees that the June 1, 2020, effective date in §65.206 of the rule must be extended to September 1, 2020, due to a later than anticipated schedule for adoption of the rule amendments and to provide an adequate period of time for owners and operators to prepare to implement this new requirement. The Department has made the change to the effective date of §65.206(a) of the adopted rule in response to this comment.

The Department received two public comments in response to the Notice of Intent to Review the Boilers rules published in the Texas Register on August 24, 2018 (43 TexReg 5545). The public comments are summarized below.

Comment: One commenter recommended that the membership of the Board of Boiler Rules be changed from including three members who represent companies that insure boilers in Texas to instead include three members representing authorized inspection agencies, because the majority of authorized inspection agencies are not insurance companies and therefore cannot have representatives on the Board.

Department Response: The Department understands the comment and concerns, but the composition of the board is specified by Texas Boiler law, Health and Safety Code §755.011(b)(2). A statute revision during the legislative session would need to occur to address this specific concern. The rule, Texas Administrative Code §65.101(a)(2), merely echoes the statute and will be amended only if the statutory requirement is revised. No change has been made to the rules in response to this comment.

Comment: The second comment on the Notice of Intent to Review references Texas Administrative Code §65.213, which prohibits HLW boilers (potable water heaters) from being incorporated into a hot water heating system as a hot water heating boiler. The commenter asked if these boilers could be grandfathered until replacement is necessary.

Department Response: The prohibition on using HLW boilers in a hot water heating system as hot water heating boilers was first incorporated into the Texas Administrative Code on December 8, 2005. The present rule, however; indicates that it was adopted on June 15, 2015, because the Boilers rules were readopted at that time and this rule changed from its former number, Texas Administrative Code §65.70(j), to the present number, §65.213. The text of the rule, and thus the substantive requirement, remained unchanged since 2005. Therefore, the rules have prohibited HLW water heaters from being incorporated into water heating systems as hot water heating boilers from 2005 forward. At the time the rule first became effective in 2005 such an existing system would have been "grandfathered" and could continue to operate, but no new use of an HLW boiler in this way would have been approved after 2005. No changes have been made to the Boilers rules in response to this comment.

ADVISORY BOARD RECOMMENDATIONS AND COMMISSION ACTION

The Board of Boiler Rules (Advisory Board) met on February 26, 2020, to discuss the proposed rules and the single public comment received to that date. The Board agreed to allow the Department to respond to any additional comments that the Department might receive in the days remaining before the end of the comment period provided that the response would not necessitate Board action. The Advisory Board recommended adopting the proposed rules with any permissible changes. Following the Board meeting the Department received an additional public comment. In response to that comment the Department modified the effective date in §65.206 from June 1, 2020 to September 1, 2020. This change does not require Board action. At its meeting on May 19, 2020, the Commission adopted the proposed rules with changes as recommended by the Board.

SUBCHAPTER A. GENERAL PROVISIONS

16 TAC §65.2

STATUTORY AUTHORITY

The adopted rules are adopted under Texas Occupations Code, Chapter 51, and Texas Health and Safety Code, Chapter 755, which authorize the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the adopted rules are those set forth in Texas Occupations Code, Chapters 51 and Texas Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 11, 2020.

TRD-202002340

Brad Bowman

General Counsel

Texas Department of Licensing and Regulation

Effective date: July 1, 2020

Proposal publication date: January 31, 2020

For further information, please call: (512) 463-3671


SUBCHAPTER C. BOILER REGISTRATION AND CERTIFICATE OF OPERATION--REQUIREMENTS

16 TAC §65.13

STATUTORY AUTHORITY

The adopted rules are adopted under Texas Occupations Code, Chapter 51, and Texas Health and Safety Code, Chapter 755, which authorize the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the adopted rules are those set forth in Texas Occupations Code, Chapters 51 and Texas Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 11, 2020.

TRD-202002341

Brad Bowman

General Counsel

Texas Department of Licensing and Regulation

Effective date: July 1, 2020

Proposal publication date: January 31, 2020

For further information, please call: (512) 463-3671


SUBCHAPTER N. RESPONSIBILITIES OF THE OWNER AND OPERATOR

16 TAC §65.206, §65.214

STATUTORY AUTHORITY

The adopted rules are adopted under Texas Occupations Code, Chapter 51, and Texas Health and Safety Code, Chapter 755, which authorize the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the adopted rules are those set forth in Texas Occupations Code, Chapters 51 and Texas Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the adopted rules.

§65.206.Boiler Room.

(a) Each boiler room containing one or more boilers from which carbon monoxide can be produced shall be equipped with a carbon monoxide detector with a manual reset.

(1)The carbon monoxide detector and boiler(s) shall be interlocked to disable the burners when the measured level of CO rises above 50 ppm.

(2)The carbon monoxide detector shall disable the burners upon loss of power to the detector.

(3)The carbon monoxide detector shall be calibrated in accordance with the manufacturer's recommendations or every eighteen months after installation of the detector. A record of calibration shall be posted at or near the boiler, or be readily accessible to an inspector.

(4)The requirements in this subsection apply to boiler rooms in which new installations or reinstallations of one or more boilers are completed on or after September 1, 2020.

(b)The boiler room shall be free from accumulation of rubbish and materials that obstruct access to the boiler, its setting, or firing equipment.

(c)The storage of flammable material or gasoline-powered equipment in the boiler room is prohibited.

(d)The roof over boilers designed for indoor installations, shall be free from leaks and maintained in good condition.

(e)Adequate drainage shall be provided.

(f) All exit doors shall open outward.

(g) It is recommended that the ASME Code, Section VI, Care and Operation of Heating Boilers, be used as a guide for proper and safe operating practices.

(h) It is recommended that the ASME Code, Section VII, Care and Operation of Power Boilers, be used as a guide for proper and safe operating practices.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 11, 2020.

TRD-202002342

Brad Bowman

General Counsel

Texas Department of Licensing and Regulation

Effective date: July 1, 2020

Proposal publication date: January 31, 2020

For further information, please call: (512) 463-3671


SUBCHAPTER O. FEES

16 TAC §65.300

STATUTORY AUTHORITY

The adopted rules are adopted under Texas Occupations Code, Chapter 51, and Texas Health and Safety Code, Chapter 755, which authorize the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the adopted rules are those set forth in Texas Occupations Code, Chapters 51 and Texas Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 11, 2020.

TRD-202002343

Brad Bowman

General Counsel

Texas Department of Licensing and Regulation

Effective date: July 1, 2020

Proposal publication date: January 31, 2020

For further information, please call: (512) 463-3671


SUBCHAPTER R. TECHNICAL REQUIREMENTS

16 TAC §65.603, §65.607

STATUTORY AUTHORITY

The adopted rules are adopted under Texas Occupations Code, Chapter 51, and Texas Health and Safety Code, Chapter 755, which authorize the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department.

The statutory provisions affected by the adopted rules are those set forth in Texas Occupations Code, Chapters 51 and Texas Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 11, 2020.

TRD-202002344

Brad Bowman

General Counsel

Texas Department of Licensing and Regulation

Effective date: July 1, 2020

Proposal publication date: January 31, 2020

For further information, please call: (512) 463-3671


CHAPTER 130. PODIATRIC MEDICINE PROGRAM

The Texas Commission of Licensing and Regulation (Commission) adopts amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 130, Subchapter D, §130.42, and §130.45; Subchapter E, §§130.53, 130.56, and 130.58; Subchapter F, §130.60; and Subchapter G, §130.72, regarding the Podiatry Program, without changes to the proposed text as published in the January 3, 2020, issue of the Texas Register (45 TexReg 50). These rules will not be republished.

The Commission also adopts amendments to Subchapter D, §130.44 and new rule Subchapter E, §130.59 regarding the Podiatry Program with changes to the proposed text as published in the January 3, 2020, issue of the Texas Register (45 TexReg 50). These rules will be republished.

The adopted rule amendments and new rule are referred to as "adopted rules."

EXPLANATION OF AND JUSTIFICATION FOR THE RULES

The adopted rules require practitioners to complete a human trafficking training course as required by House Bill (HB) 2059 and the newly-created Chapter 116 of the Occupations Code.

The adopted rules establish limits on prescribing opioids for acute pain, address electronic prescribing, and require continuing education on prescribing and monitoring controlled substances. These rules implement HB 2174, HB 3284, and HB 3285, which revised the Texas Controlled Substances Act in Chapter 481 of the Health and Safety Code.

The adopted rules also clarify the scope of delegation permitted and allow for a podiatrist to delegate to a qualified and properly trained podiatric medical assistant as outlined in HB 2847. Implementing a transfer from the Texas Medical Board to the Department's regulatory authority in HB 2847, the adopted rules provide for the regulation of podiatric medical radiological technicians and establish a fee for this license.

The adopted rules update the administrative penalties and sanctions for podiatrists, implementing HB 1899 and Occupations Code, Chapter 108, as well as penalties for improperly accessing the Texas Prescription Monitoring Program provided for in HB 3284 and the Texas Controlled Substances Act.

Finally, the adopted rules provide for the orderly transition of assessing continuing medical education hours as the Department transitions to biennial podiatric license terms. Biennial license terms were adopted in a previous rulemaking and made effective September 1, 2019 (44 TexReg 4725).

SECTION-BY-SECTION SUMMARY

The adopted rules amend §130.42 to require the completion of human trafficking prevention training for each renewal on or after September 1, 2020. This training is required by Texas Occupations Code §116.003.

The adopted rules amend §130.44 to require two hours of continuing medical education (CME) related to prescribing and monitoring controlled substances prior to the first anniversary of podiatric medical licensure. The amendment requires one hour of CME covering best practices, alternative treatment options, and multimodal approaches to pain management for podiatrists whose practice involves the prescription and dispensation of opioids. Additionally, the amendment revises the CME due date requirements and provides a guide to transition for CME requirements as the Department moves podiatric license renewal to biennial periods. After publication of the proposed rule text, the Department made changes to subsection (o) to consistently use the word "licensee."

The adopted rules amend §130.45, by deleting subsection (f), which was duplicative of a similar subsection in §130.44.

The adopted rules amend §130.53, by establishing regulatory authority over podiatric medical radiological technicians as created by HB 2847. The amendment also specifies a requirement of 60 x-rays for student training and requires completion of human trafficking prevention training for each renewal on or after September 1, 2020. The amendment deletes a reference to an act of moral turpitude as grounds for the Department to refuse renewal of a podiatric medical radiology technician license.

The adopted rules amend §130.56 to clarify the scope of delegated authority from a podiatrist to a podiatric medical assistant.

The adopted rules amend §130.58 to permit a podiatrist to designate an agent to communicate prescriptions to a pharmacist. Additionally, the amendment specifies that unauthorized access of the Texas Prescription Monitoring Program (PMP) is grounds for disciplinary action by the Department.

The adopted rules create new §130.59 that outlines the limits on the prescription of opioids to treat acute pain. The new section also requires the electronic prescription of all controlled substance prescriptions after September 1, 2021, and provides a list of exceptions for this requirement. Additionally, in response to a public comment submitted by the Texas Medical Association, the Department removed published subsection (c) from Subchapter E, §130.59 and the rest of the subsections were re-lettered.

The adopted rules amend §130.60 to provide the fees applicable for Active Duty Military Members ($0), and Podiatric Medical Radiological Technicians ($25).

The adopted rules amend §130.72 to establish grounds for disciplinary actions and sanctions based upon improper access and dissemination of information obtained from the PMP. Additionally, the amendment incorporates denial of licensure, and suspension or revocation of licenses, for offenses identified in Chapter 108, Subchapter B, of the Occupations Code.

PUBLIC COMMENTS

The Department drafted and distributed the proposed rules to persons internal and external to the agency. The proposed rules were published in the January 3, 2020, issue of the Texas Register (45 TexReg 50). The deadline for public comments was February 4, 2020. The Department received five comments from four interested parties on the proposed rules during the 30-day public comment period. The public comments are summarized below.

Comment: One individual commenter would like more specification of what "improper access to the PMP" means.

Department Response: The Department disagrees with this comment. Section 481.071 of the Texas Health and Safety Code states that a practitioner may not access the Prescription Monitoring Program (PMP) database except for a valid medical purpose and in the course of medical practice. In accordance with the Health and Safety Code provisions, §130.72 of the proposed rules provide that a practitioner may not disclose or use information from the PMP in a manner not authorized by law. The rules also provide that a person authorized to receive information from the PMP may not make a material misrepresentation or fail to disclose a material fact in the request for information. No change has been made to the proposed rules in response to this comment.

Comment: One individual commenter is not sure what "human sex trafficking" has to do with podiatry and does not see the benefit of a podiatrist learning about this issue.

Department Response: The Department disagrees with this comment. The proposed rules implement HB 2059, 86th Legislature Regular Session (2019). HB 2059 requires practitioners complete human trafficking training as a condition of license renewal. No change has been made to the proposed rules in response to this comment.

Comment: One individual commenter believes that the human trafficking course is burdensome and believes resources need to be better used to combat this issue. The commenter also believes there needs to be an exception to e-prescribing for small practices that write less than twenty-five prescriptions for controlled substances a year. This same commenter provided a second comment containing a link to an article on "how wasteful of a burden" the proposal to have human trafficking training is for a podiatrist.

Department Response: The Department disagrees with this comment. The proposed rules implement HB 2059 and HB 2174, 86th Legislature Regular Session (2019). HB 2059 requires practitioners complete human trafficking training as a condition of license renewal.

HB 2174 requires electronic prescriptions for controlled substances and authorizes written or telephonic communication of prescriptions in certain circumstances. HB 2174 also requires the Texas State Board of Pharmacy to convene a workgroup to implement a waiver process for e-prescribing. This portion of the comment is beyond the scope of this rulemaking. However, this comment has been referred to the appropriate division for review. No change has been made to the proposed rules in response to this comment.

Comment:The Texas Medical Association submitted comment on §130.59(c). Subsection (c) of this section of the rule states "the 10-day limit does not apply to a prescription for an opioid approved by the United States Food and Drug Administration for the treatment of substance addiction that is issued by a practitioner for the treatment of substance addiction." The Texas Medical Association is concerned that the inclusion of subsection (c) may cause confusion among podiatrists, who may question their authorized scope of practice. As a result, the Texas Medical Association recommends the proposed new subsection (c) be deleted.

Department Response: The Department agrees with this comment. The proposed rules implement HB 2174, 86th Legislature Regular Session (2019). Chapter 202 of the Texas Occupations Code defines "podiatry" as "the treatment of or offer to treat any disease, disorder, physical injury, deformity, or ailment of the human foot by any system or method." The practice of podiatry does not include the treatment for substance abuse or addiction. Deleting proposed rule §130.59(c) does not affect the current law, removes an unnecessary pr,ovision from the podiatry rules, and does not change the scope of practice for podiatrists. The Department has deleted subsection (c) of §130.59 as published in the Texas Register and re-lettered the subsection accordingly.

ADVISORY BOARD RECOMMENDATIONS AND COMMISSION ACTIONS

On March 9, 2020, the Podiatric Medical Examiners Advisory Board recommended adopting the proposed rules with the Department recommended changes. The Department recommended changes are to Subchapter D, §130.44(o), to consistently use the word "licensee." Additionally, in response to the Texas Medical Association comment, the published subsection (c) was removed from Subchapter E, §130.59 and the rest of the subsections were re-lettered. At its meeting on May 19, 2020, the Commission adopted the proposed rules as recommended by the Advisory Board.

SUBCHAPTER D. DOCTOR OF PODIATRIC MEDICINE

16 TAC §§130.42, 130.44, 130.45

STATUTORY AUTHORITY

The rules are adopted under Texas Occupations Code, Chapters 51 and 202, which authorize the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The adopted rules are also adopted under Texas Occupations Code, Chapter 108, which establishes the Department's authority to deny, suspend or revoke podiatrists for certain criminal convictions; Texas Occupations Code, Chapter 116, which requires the completion of human trafficking prevention training for health professions licensees; and Texas Health and Safety Code Chapter 481, which mandates certain continuing education for controlled substance prescribers, places limits on the prescription of opioids for acute pain, requires the submission of electronic prescriptions for controlled substances, and forbids unauthorized access to the PMP.

The statutory provisions affected by the adopted rules are those set forth in Texas Occupations Code, Chapters 51, 108, 116, and 202; and Texas Health and Safety Code, Chapter 481. No other statutes, articles, or codes are affected by the adopted rules.

§130.44.Continuing Medical Education--General Requirements.

(a) Each person licensed to practice podiatric medicine in the State of Texas is required to have 50 hours of continuing medical education (CME) every two years for the renewal of the license to practice podiatric medicine. One hour of training is equal to one hour of CME.

(b) Two hours of the required 50 hours of department approved CME shall be a course, class, seminar, or workshop in: Ethics in the Delivery of Health Care Services and/or Rules and Regulations pertaining to Podiatric Medicine in Texas. Topics on Human Trafficking Prevention, Healthcare Fraud, Professional Boundaries, Practice Risk Management or Podiatric Medicine related Ethics or Jurisprudence courses, Abuse and Misuse of Controlled Substances, Opioid Prescription Practices, and/or Pharmacology, including those sponsored by an entity approved by CPME, APMA, APMA affiliated organizations, AMA, AMA affiliated organizations, or governmental entities, or the entities described in subsections (e) and (f) are acceptable.

(c) Each person initially licensed to practice podiatric medicine in the State of Texas is required to complete two hours of continuing medical education related to approved procedures of prescribing and monitoring controlled substances prior to the first anniversary of date the license was originally issued.

(d) For each person licensed to practice podiatric medicine in the State of Texas whose practice includes prescription or dispensation of opioids shall annually attend at least one hour of continuing medical education covering best practices, alternative treatment options, and multi-modal approaches to pain management that may include physical therapy, psychotherapy, and other treatments.

(e) A licensee shall receive credit for each hour of podiatric medical meetings and training sponsored by APMA, APMA affiliated organizations, TPMA, state, county or regional podiatric medical association podiatric medical meetings, university sponsored podiatric medical meetings, hospital podiatric medical meetings or hospital podiatric medical grand rounds, medical meetings sponsored by the Foot & Ankle Society or the orthopedic community relating to foot care, and others at the discretion of the Board. A practitioner may receive credit for giving a lecture, equal to the credit that a podiatrist attending the lecture obtains.

(f) A licensee shall receive credit for each hour of training for non-podiatric medical sponsored meetings that are relative to podiatric medicine and department approved. The department may assign credit for hospital grand rounds, hospital CME programs, corporate sponsored meetings, and meetings sponsored by the American Medical Association, the orthopedic community, the American Diabetes Association, the Nursing Association, the Physical Therapy Association, and others if approved.

(g) It shall be the responsibility of the licensee to ensure that all CME hours being claimed meet the standards for CME as set by the commission. Practice management, home study and self-study programs will be accepted for CME credit hours only if the provider is approved by the Council on Podiatric Medical Education. The licensee may obtain up to, but not exceed twenty (20) hours of the aforementioned hours per biennium.

(h) Cardiopulmonary Resuscitation (CPR) certification is eligible for up to three (3) hours of CME credit and Advanced Cardiac Life Support (ACLS) certification for up to six (6) hours of CME credit. Practitioners may only receive credit for one, not both. No on-line CPR certification will be accepted for CME credit.

(i) If a practitioner has an article published in a peer review journal, the practitioner may receive one (1) hour of CME credit for the article, with credit for the article being provided only once, regardless of the number of times or the number of journals in which the article is published.

(j) With the exception of the allowed hours carried forward, the required 50 hours of continuing medical education must be obtained in a 24-month period immediately preceding the date in which the license is to be renewed. The 24-month period will begin on the first full day of the month after the practitioner's date of renewal and end two years later. A licensee who completes more than the required 50 hours during the preceding CME period may carry forward a maximum of ten (10) hours for the next renewal CME period.

(k) The department shall employ an audit system for continuing education reporting. The license holder shall be responsible for maintaining a record of his or her continuing education experiences. The certificates or other documentation verifying earning of continuing education hours are not to be forwarded to the department at the time of renewal unless the license holder has been selected for audit.

(l) The audit process shall be as follows:

(1) The department shall select for audit a random sample of license holders to ensure compliance with CME hours.

(2)If selected for an audit, the license holder shall submit copies of certificates, transcripts or other documentation satisfactory to the department, verifying the license holder's attendance, participation and completion of the continuing education.

(3) Failure to timely furnish this information within thirty (30) calendar days or providing false information during the audit process or the renewal process are grounds for disciplinary action against the license holder.

(4) If selected for continuing education audit during the renewal period, the license holder may renew and pay renewal fees.

(m) Licensees that are deficient in CME hours must complete all deficient CME hours and current biennium CME requirement in order to maintain licensure.

(n) Continuing education obtained as a part of a disciplinary action is not acceptable credit towards the total of fifty (50) hours required every two years.

(o) The 85th Texas Legislature enacted changes to Chapter 202, Occupations Code, providing the commission with authority to establish a one or two-year license term for licensees. See H.B. 3078, 85th Legislature, Regular Session (2017). The purpose of this transition rule is to provide guidance on how continuing medical education will be assessed when transitioning from a one to two-year license term. This rule applies only to licensees renewing on or after September 1, 2019. Beginning September 1, 2019, the department shall stagger the continuing medical education biennium of licenses as follows. Licensees renewing in an odd numbered year are to obtain 50 hours of CME for a 24-month period between 2019 and 2021; and for every 2-years thereafter in between renewal dates. Licensees renewing in an even numbered year are to obtain 50 hours of CME for a 24-month period between 2020 and 2022; and for every 2-years thereafter in between renewal dates. This rule expires on August 31, 2022.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 11, 2020.

TRD-202002348

Brad Bowman

General Counsel

Texas Department of Licensing and Regulation

Effective date: July 1, 2020

Proposal publication date: January 3, 2020

For further information, please call: (512) 463-3671


SUBCHAPTER E. PRACTITIONER RESPONSIBILITIES AND CODE OF ETHICS

16 TAC §§130.53, 130.56, 130.58, 130.59

STATUTORY AUTHORITY

The rules are adopted under Texas Occupations Code, Chapters 51 and 202, which authorize the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The adopted rules are also adopted under Texas Occupations Code, Chapter 108, which establishes the Department's authority to deny, suspend or revoke podiatrists for certain criminal convictions; Texas Occupations Code, Chapter 116, which requires the completion of human trafficking prevention training for health professions licensees; and Texas Health and Safety Code Chapter 481, which mandates certain continuing education for controlled substance prescribers, places limits on the prescription of opioids for acute pain, requires the submission of electronic prescriptions for controlled substances, and forbids unauthorized access to the PMP.

The statutory provisions affected by the adopted rules are those set forth in Texas Occupations Code, Chapters 51, 108, 116, and 202; and Texas Health and Safety Code, Chapter 481. No other statutes, articles, or codes are affected by the adopted rules.

§130.59.Opioid Prescription Limits and Required Electronic Prescribing.

(a) In this section, "acute pain" means the normal, predicted, physiological response to a stimulus such as trauma, disease, and operative procedures. Acute pain is time limited and the term does not include:

(1) chronic pain;

(2) pain being treated as part of cancer care;

(3) pain being treated as part of hospice or other end-of-life care; or

(4) pain being treated as part of palliative care.

(b) For the treatment of acute pain, a podiatrist may not:

(1) issue a prescription for an opioid in an amount that exceeds a 10-day supply; or

(2) provide for a refill of an opioid.

(c) After January 1, 2021 all controlled substances must be prescribed electronically except:

(1) in an emergency or in circumstances in which electronic prescribing is not available due to temporary technological or electronic failure, in a manner provided for by the Texas State Board of Pharmacy rules;

(2) by a practitioner to be dispensed by a pharmacy located outside this state, in a manner provided for by the Texas State Board of Pharmacy rules;

(3) when the prescriber and dispenser are in the same location or under the same license;

(4) in circumstances in which necessary elements are not supported by the most recently implemented national data standard that facilitates electronic prescribing;

(5) for a drug for which the United States Food and Drug Administration requires additional information in the prescription that is not possible with electronic prescribing;

(6) for a non-patient-specific prescription pursuant to a standing order, approved protocol for drug therapy, collaborative drug management, or comprehensive medication management, in response to a public health emergency or in other circumstances in which the practitioner may issue a non-patient-specific prescription;

(7) for a drug under a research protocol;

(8) by a practitioner who has received a waiver under Section 481.0756 of the Texas Health and Safety Code from the requirement to use electronic prescribing; or

(9) under circumstances in which the practitioner has the present ability to submit an electronic prescription but reasonably determines that it would be impractical for the patient to obtain the drugs prescribed under the electronic prescription in a timely manner and that a delay would adversely impact the patient's medical condition.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 11, 2020.

TRD-202002349

Brad Bowman

General Counsel

Texas Department of Licensing and Regulation

Effective date: July 1, 2020

Proposal publication date: January 3, 2020

For further information, please call: (512) 463-3671


SUBCHAPTER F. FEES

16 TAC §130.60

The rules are adopted under Texas Occupations Code, Chapters 51 and 202, which authorize the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The adopted rules are also adopted under Texas Occupations Code, Chapter 108, which establishes the Department's authority to deny, suspend or revoke podiatrists for certain criminal convictions; Texas Occupations Code, Chapter 116, which requires the completion of human trafficking prevention training for health professions licensees; and Texas Health and Safety Code Chapter 481, which mandates certain continuing education for controlled substance prescribers, places limits on the prescription of opioids for acute pain, requires the submission of electronic prescriptions for controlled substances, and forbids unauthorized access to the PMP.

The statutory provisions affected by the adopted rules are those set forth in Texas Occupations Code, Chapters 51, 108, 116, and 202; and Texas Health and Safety Code, Chapter 481. No other statutes, articles, or codes are affected by the adopted rules

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 11, 2020.

TRD-202002350

Brad Bowman

General Counsel

Texas Department of Licensing and Regulation

Effective date: July 1, 2020

Proposal publication date: January 3, 2020

For further information, please call: (512) 463-3671


SUBCHAPTER G. ENFORCEMENT

16 TAC §130.72

STATUTORY AUTHORITY

The rules are adopted under Texas Occupations Code, Chapters 51 and 202, which authorize the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The adopted rules are also adopted under Texas Occupations Code, Chapter 108, which establishes the Department's authority to deny, suspend or revoke podiatrists for certain criminal convictions; Texas Occupations Code, Chapter 116, which requires the completion of human trafficking prevention training for health professions licensees; and Texas Health and Safety Code Chapter 481, which mandates certain continuing education for controlled substance prescribers, places limits on the prescription of opioids for acute pain, requires the submission of electronic prescriptions for controlled substances, and forbids unauthorized access to the PMP.

The statutory provisions affected by the adopted rules are those set forth in Texas Occupations Code, Chapters 51, 108, 116, and 202; and Texas Health and Safety Code, Chapter 481. No other statutes, articles, or codes are affected by the adopted rules.

The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on June 11, 2020.

TRD-202002351

Brad Bowman

General Counsel

Texas Department of Licensing and Regulation

Effective date: July 1, 2020

Proposal publication date: January 3, 2020

For further information, please call: (512) 463-3671