Proposed Administrative Rules

Chapter 97. Motor Fuel Metering and Quality
Proposal Filed: May 11,2020 – Published in the Texas Register: May 22, 2020
Deadline for Public Comment: June 22, 2020

The Texas Department of Licensing and Regulation (Department) proposes new rules at 16 Texas Administrative Code (TAC), Chapter 97, Subchapter A, §§97.1 - 97.3; Subchapter B, §§97.20 - 97.28; Subchapter C, §§97.40 - 97.43; Subchapter D, §§97.50 - 97.60; Subchapter E, §§97.70 - 97.74; and Subchapter F, §97.80, regarding the Motor Fuel Metering and Quality Program. These proposed changes are referred to as "proposed rules."

EXPLANATION OF AND JUSTIFICATION FOR THE RULES

The proposed rules are necessary to implement Senate Bill (SB) 2119, 86th Legislature, Regular Session (2019), which transferred the Motor Fuel Metering and Quality Program (Program) from the Texas Department of Agriculture (TDA) to the Texas Commission of Licensing and Regulation (Commission) and the Department and which, effective September 1, 2020, creates new Texas Occupations Code, Chapter 2310, Motor Fuel Metering and Quality. The proposed rules are necessary to enable the Commission and the Department to administer and regulate the Program. The proposed rules are separate from, and are not to be confused with, the TDA rules located at 4 TAC, Chapters 5 and 12, regarding the Program, which are still in effect but will be repealed.

The Department established the Motor Fuel Metering and Quality Workgroup (Workgroup), authorized by SB 2119, Section 12, to advise the Department and TDA on the orderly transfer of the Program. The proposed rules were presented to and discussed with the Workgroup at its initial meeting on February 27, 2020, and its members subsequently provided additional input in meetings of less than a quorum prior to this publication.

SECTION-BY-SECTION SUMMARY

The proposed rules create new Subchapter A to contain general provisions applicable to the chapter.

The proposed rules create new §97.1 to identify the statutory authority under which the proposed rules are to be promulgated.

The proposed rules create new §97.2 to establish definitions used in the chapter.

The proposed rules create new §97.3 to adopt by reference certain nationally recognized minimum standards incorporated into the chapter.

The proposed rules create new Subchapter B to contain provisions applicable to motor fuel metering devices.

The proposed rules create new §97.20 to establish the requirements for registration of devices.

The proposed rules create new §97.21 to establish the renewal requirements for device registrations.

The proposed rules create new §97.22 to establish the responsibilities of an owner or operator when there is a change to the number of registered devices.

The proposed rules create new §97.23 to establish the requirements for device performance reviews.

The proposed rules create new §97.24 to establish the requirements applicable to certificates of registration.

The proposed rules create new §97.25 to establish the requirements applicable to consumer information stickers.

The proposed rules create new §97.26 to establish the requirements applicable to devices that fail to comply with technical requirements.

The proposed rules create new §97.27 to establish the requirements applicable to devices that are condemned by the department.

The proposed rules create new §97.28 to establish the requirements for maintenance of records of device performance reviews.

The proposed rules create new Subchapter C to contain provisions applicable to the sale, delivery, and quality of motor fuel.

The proposed rules create new §97.40 to establish the requirements applicable to certificates of compliance for distributors, jobbers, suppliers, and wholesalers.

The proposed rules create new §97.41 to establish the requirements applicable to automotive fuel rating.

The proposed rules create new §97.42 to establish the requirements applicable to stop-sale orders.

The proposed rules create new §97.43 to establish the requirements applicable to the maintenance of fuel delivery records.

The proposed rules create new Subchapter D to contain the provisions applicable to service companies and service technicians.

The proposed rules create new §97.50 to establish the requirement of criminal history checks on applicants for service company licenses and service technician licenses.

The proposed rules create new §97.51 to establish device categories and types of maintenance activities that a service company or service technician may perform.

The proposed rules create new §97.52 to establish the requirements for a service company license.

The proposed rules create new §97.53 to establish the insurance requirements for a service company.

The proposed rules create new §97.54 to establish the renewal requirements for a service company license.

The proposed rules create new §97.55 to establish the requirements for a service technician license.

The proposed rules create new §97.56 to establish the renewal requirements for a service technician license.

The proposed rules create new §97.57 to establish the examination requirements for a service technician license.

The proposed rules create new §97.58 to establish the requirements applicable to test standards.

The proposed rules create new §97.59 to establish the responsibilities of a service technician to inspect for and report the presence of a skimmer.

The proposed rules create new §97.60 to establish the records maintenance requirements for service companies.

The proposed rules create new Subchapter E to contain provisions relating to fees.

The proposed rules create new §97.70 to establish device fees.

The proposed rules create new §97.71 to establish fees for distributors, jobbers, wholesalers, and suppliers.

The proposed rules create new §97.72 to establish fees for service companies.

The proposed rules create new §97.73 to establish fees for service technicians.

The proposed rules create new §97.74 to establish policies applicable to fees.

The proposed rules create new Subchapter F to contain fees relating to enforcement.

The proposed rules create new §97.80 to establish the authority of the Commission and the Department to institute enforcement proceedings to impose administrative penalties and sanctions for violations of applicable laws and rules.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT

Tony Couvillon, Policy Research and Budget Analyst, has determined that for each year of the first five years the proposed rules are in effect, enforcing or administering the proposed rules does not have foreseeable implications relating to costs or revenues of local governments.

Mr. Couvillon has determined that for each year of the first five years the proposed rules are in effect, there are no estimated additional costs or reductions in costs to the state as a result of enforcing or administering the proposed rules.

Mr. Couvillon has determined that for each year of the first five years the proposed rules are in effect, revenue to the state will be affected as follows: (1) in the first year, an estimated loss in revenue of $193,884; (2) in the second year, an estimated loss in revenue of $191,544; (3) in the third year, an estimated loss in revenue of $189,204; (4) in the fourth year, an estimated loss in revenue of $186,864; and (5) in the fifth year, an estimated loss in revenue of $184,524.

The proposed rules will decrease the fuel quality fee for approximately:

-·114,949 devices that deliver multiple gasoline products per nozzle by $1.50 per year;

-·15,170 devices that deliver a single gasoline product per nozzle by $0.50 per year;

- 1,173 devices with a maximum flow rate greater than 100 gallons per minute (GPM) from $1.00 per year to $0; and

- 102 suppliers by $200 per year.

The proposed rules will increase the fuel quality fee for approximately:

- 56,850 devices that deliver diesel or another non-gasoline product from a single nozzle by $2.50 per year;

- 2,140 devices that deliver E85 ethanol fuel from a single nozzle by $2.50 per year; and

- 8,437 motor fuel metering devices with a maximum flow rate of 20 GPM to 100 GPM by $2.50 per year.

The proposed rules will decrease the registration fees for approximately:

- 8,437 devices with a maximum flow rate of 20 GPM to 100 GPM by $15 per year; and

- 1,173 devices with a maximum flow rate greater than 100 GPM by $25 per year.

The proposed rules will decrease the additional device category license fee by $50 per year for service companies, of which approximately 41 companies currently hold registrations in a second device category, and no companies currently hold registrations in three categories.

The proposed rules will also create a $30 license fee and a two-year license term for service technicians. The current population of approximately 725 service technicians hold five-year licenses issued by TDA. As their current licenses expire, service technicians will pay the license fee to renew their licenses with TDLR for a two-year license period, at the rate of approximately 145 renewals per year.

All other licenses and registrations, will transition from a one-year license or registration period to two years. Half of the population of each license or registration will pay an application fee for a two-year license in the first year. The other half of the population will pay an application fee for a two-year license in the following fiscal year.

The overall reduction in fees will result in a loss of revenue to the state in each of the first five years the proposed rules are in effect.

LOCAL EMPLOYMENT IMPACT STATEMENT

Mr. Couvillon has determined that the proposed rules will not affect the local economy, so the agency is not required to prepare a local employment impact statement under Government Code §2001.022.

PUBLIC BENEFITS

Mr. Couvillon has determined that for each year of the first five-year period the proposed rules are in effect, the public benefit will be a decrease in fees for many registrants and licensees, an increase to two-year terms for most registrants and licensees, increased consumer protection resulting from criminal history background checks on service companies and service technicians, and enhanced clarity of language to help the public and regulated persons to better understand the program requirements.

Mr. Couvillon has determined that for each year of the first five-year period the proposed rules are in effect, there will be a reduction in costs to some persons who are required to comply with the proposed rules. The total reduction in costs for a particular person will vary each year depending on which and how many of the following decreased fees are applicable to that person, including:

- the fuel quality fee for devices that deliver multiple gasoline products per nozzle (a decrease by $1.50 per year);

- the fuel quality fee for devices that deliver a single gasoline product per nozzle (a decrease by $0.50 per year);

- the fuel quality fee for devices with a maximum flow rate greater than 100 GPM (a decrease by $1.00 per year);

- the registration fee for devices with a maximum flow rate of 20 GPM to 100 GPM (a decrease by $15 per year);

- the registration fee for devices with a maximum flow rate greater than 100 GPM (a decrease by $25 per year);

- the fuel quality fees for suppliers (a decrease by $200 per year); and

- the additional device category license fee for service companies (a decrease by $50 per year).

PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL

Mr. Couvillon has determined that for each year of the first five-year period the proposed rules are in effect, there will be additional costs to some persons who are required to comply with the proposed rules. The total additional costs for a particular person will vary each year depending on which and how many of the following increased fees are applicable to that person, including:

- the fuel quality fee for devices that deliver diesel or another non-gasoline product from a single nozzle (an increase by $2.50 per year);

- the fuel quality fee for devices that deliver E85 ethanol fuel from a single nozzle (an increase by $2.50 per year); and

- the fuel quality fee for devices with a maximum flow rate of 20 GPM to 100 GPM (an increase by $2.50 per year).

There will also be an increase in costs to initial applicants and some renewal applicants for service technician licenses. Currently, applicants for an initial or renewal service technician license issued by TDA must take an examination per license category, at a cost of $60 per category each time the exam is taken. The license must be renewed, and the exam(s) must be retaken every five years; there is no license fee. Under the proposed rules, applicants for initial or renewal two-year licenses issued by TDLR must pay a $30 license fee, and only initial applicants must take the $60 examination per device category. As a result, initial applicants in the first year the rules are in effect will pay the $60 examination fee and a $30 initial license fee in the first year and will pay a $30 license renewal fee in the third year, resulting in a total of $60 in total increased costs over the first five years the proposed rule are in effect. Additionally, current licensees whose five-year licenses expire in the first year the proposed rules are in effect will pay $30 license renewal fees in the first, third, and fifth years, resulting in a total of $30 in total increased costs over the first five years the proposed rules are in effect.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES

There will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposed rules. Any increase in costs which may be experienced by a small or micro-business will be minimal and will not have an adverse economic effect on the business. Since the agency has determined that the proposed rule will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, are not required.

ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT

The proposed rules do have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government; however, the proposed rules fall under the exception for rules that are necessary to implement legislation under §2001.0045(c)(9). Therefore, the agency is not required to take any further action under Government Code §2001.0045.

GOVERNMENT GROWTH IMPACT STATEMENT

Pursuant to Government Code §2001.0221, the agency provides the following Government Growth Impact Statement for the proposed rules. For each year of the first five years the proposed rules will be in effect, the agency has determined the following:

1. The proposed rules do not create or eliminate a government program.

2. Implementation of the proposed rules does not require the elimination of existing employee positions. Section 18.80, Article IX of the General Appropriations Act for the 2020-21 Biennium increased the number of full-time equivalent (FTE) employee positions at TDLR by 68.0 FTEs each year of the biennium. The section also decreased the number of FTEs at TDA by 35.9 FTEs each year, therefore new employee positions will be created at TDLR.

3. Implementation of the proposed rules does not require an increase or decrease in future legislative appropriations to the agency.

4. The proposed rules do require an increase or decrease in fees paid to the agency. The proposed rules will result in an increase in fees paid to the agency in the first year the proposed rules are in effect, due to the license and registration renewal fees paid in the first year. However, the overall reduction in program fees will result in a decrease in fees paid to the agency over the subsequent four years.

5. The proposed rules do create a new regulation. The proposed rules add requirements for criminal history background checks for service technicians and service companies, which are required by statute.

6. The proposed rules do expand, limit, or repeal an existing regulation. The proposed rules expand the current TDA rules by clarifying the statutory requirements for inspection, testing, and calibration. The proposed rules repeal certain requirements which no longer apply, as a result of the passage of SB 2119. For example, the procedures for consumer complaints are no longer applicable since TDLR is not prohibited from conducting inspections. The rules also repeal certain application requirements, such as a citizenship requirement for service company applicants.

7. The proposed rules do not increase or decrease the number of individuals subject to the rule's applicability.

8. The proposed rules do not positively or adversely affect this state's economy.

TAKINGS IMPACT ASSESSMENT

The Department has determined that no private real property interests are affected by the proposed rules and the proposed rules do not restrict, limit, or impose a burden on an owner’s rights to his or her private real property that would otherwise exist in the absence of government action. As a result, the proposed rules do not constitute a taking or require a takings impact assessment under Government Code §2007.043.

PUBLIC COMMENTS

Comments on the proposed rules may be submitted electronically on the Department’s website at https://ga.tdlr.texas.gov:1443/form/gcerules; by facsimile to (512) 475-3032; or by mail to Vanessa Vasquez, Legal Assistant, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711. The deadline for comments is 30 days after publication in the Texas Register.

STATUTORY AUTHORITY

The proposed rules are proposed under Texas Occupations Code, Chapters 51 and 2310, which authorize the Commission, the Department’s governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The proposed rules are also proposed under Texas Government Code, Chapter 411, Subchapter F, and Texas Occupations Code, Chapters 51 and 53, which establish the Department’s statutory authority to conduct criminal history background checks on an applicant for or a holder of a license, certificate, registration, title, or permit issued by the Department.

The statutory provisions affected by the proposed rules are those set forth in Texas Business and Commerce Code, Chapter 607, and Texas Occupations Code, Chapters 51 and 2310. No other statutes, articles, or codes are affected by the proposed rules.

SUBCHAPTER A. GENERAL PROVISIONS.

§97.1. Authority.

This chapter is promulgated under the authority of the Texas Occupations Code, Chapters 51 and 2310.

§97.2. Definitions.

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

(1) ASTM--ASTM International; the national voluntary consensus standards organization formed for the development of standards on characteristics and performance of materials, products, systems and services and the promotion of related knowledge.

(2) Code--The Texas Occupations Code, Chapter 2310, “Motor Fuel Metering and Quality.”

(3) Commission--Texas Commission of Licensing and Regulation.

(4) Controlling person--an individual who:

(A) is a sole proprietor;

(B) is a general partner of a partnership;

(C) is a controlling person of a business entity that is a general partner of a partnership;

(D) possesses direct or indirect control of at least 25 percent of the voting securities of a corporation;

(E) is the president, the secretary, or a director of a corporation; or

(F) possesses the authority to set policy or direct the management of a business entity.

(5) Department--Texas Department of Licensing and Regulation.

(6) Device--A commercial weighing or measuring device used for motor fuel sales, also defined as a motor fuel metering device by §2310.001(7) of the Code .

(7) Device performance review (DPR)--The comprehensive inspection and testing of a motor fuel metering device to ensure it is calibrated and operating according to NIST and Manufacturer specifications.

(8) Gasoline--A l iquid or combination of liquids blended together, offered for sale, sold, used, or capable of use as fuel for a gasoline-powered engine. The term includes gasohol, aviation gasoline, and blending agents, but does not include compressed natural gas, liquefied natural gas, racing gasoline, diesel fuel, aviation jet fuel, or liquefied gas, as defined in §162.001(29) of the Texas Tax Code.

(9) GPM--Gallons per minute.

(10) ISO-- International Organization for Standardization; an independent, non-governmental organization that develops voluntary international standards to facilitate world trade by providing common standards among nations.

(11) LPG--Liquid petroleum gas.

(12) LPG meter--A meter used to deliver LPG for use as a motor fuel.

(13) Motor fuel--Gasoline, diesel fuel, gasoline blended fuel, compressed natural gas, liquefied natural gas, and other products that are offered for sale, sold, used, or capable of use as fuel for a gasoline-powered engine or a diesel-powered engine, as defined in §162.001(42) of the Texas Tax Code.

(14) NIST--The National Institute of Standards and Technology; a non-regulatory federal agency under the United States Department of Commerce, which certifies and provides standard reference materials used to perform instrument calibrations, verifies the accuracy of specific measurements and supports the development of new measurement methods.

(15) Operator-- A person in possession or control of a weighing or measuring device, as defined in §2310.001(8) of the Code .

(16) Test standard--A certified weight or measure used to test a device for accuracy.

§97.3. Adoption by Reference.

In accordance with Chapter 2310 of the Code, the department adopts the following nationally recognized minimum standards for the purpose of administering and enforcing this chapter:

(1) Legal standards for weights and measures. NIST Handbook 44 (2020 Edition), “Specifications, Tolerances, and Other Technical Requirements for Weighing and Measuring Devices.”

(2) Motor fuel quality testing standards.

(A) NIST Handbook 130 (2020 Edition), “ Uniform Laws and Regulations in the Areas of Legal Metrology and Fuel Quality,” as standard specifications for alcohol blends with the following modifications:

(i) vapor pressure tolerance not exceeding one pound per square inch for motor fuels blended with ethanol, excluding the time period from May 1 through October 1 for counties required to have low emissions fuels; and

(ii) vapor pressure seasonal specifications may be extended for a maximum period of 15 days to allow for the disbursement of old stocks. However, new stocks of a higher volatility classification shall not be offered for retail sale prior to the effective date of the higher volatility classification;

(B) ASTM D4814-20 , “Standard Specification for Automotive Spark-Ignition Engine Fuel,” as the standard specifications for gasoline with the following modification:

(i) vapor pressure and vapor/liquid ratio seasonal specifications may be extended for a maximum period of 15 days to allow for the disbursement of old stocks. However, new stocks of a higher volatility classification shall not be offered for retail sale prior to the effective date of the higher volatility classification; and

(ii) the vapor/liquid ratio specification shall be waived for motor fuels blended with ethanol;

(C) ASTM D975-02, “Standard Specification for Diesel Fuel Oils” as the standard specifications for diesel motor fuels and renewable diesel fuels ; and

(D) ASTM D5798-19b , “Standard Specification for Ethanol Fuel Blends for Flexible-Fuel Automotive Spark-Ignition Engines,” as the standard specifications for E85 ethanol fuel.

(3) Automotive Fuel Rating. The testing methods, standards and specifications used to determine the automotive fuel rating shall be those prescribed by the most current editions of:

(A) ASTM D2699-19, “ Standard Test Method for Research Octane Number of Spark-Ignition Engine Fuel;”

(B) ASTM D2700-19, “ Standard Test Method for Motor Octane Number of Spark-Ignition Engine Fuel;” and

(C) ASTM D5599-18, “ Standard Test Method for Determination of Oxygenates in Gasoline by Gas Chromatography and Oxygen Selective Flame Ionization Detection .”

STATUTORY AUTHORITY

The proposed rules are proposed under Texas Occupations Code, Chapters 51 and 2310, which authorize the Commission, the Department’s governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The proposed rules are also proposed under Texas Government Code, Chapter 411, Subchapter F, and Texas Occupations Code, Chapters 51 and 53, which establish the Department’s statutory authority to conduct criminal history background checks on an applicant for or a holder of a license, certificate, registration, title, or permit issued by the Department.

The statutory provisions affected by the proposed rules are those set forth in Texas Business and Commerce Code, Chapter 607, and Texas Occupations Code, Chapters 51 and 2310. No other statutes, articles, or codes are affected by the proposed rules.

SUBCHAPTER B--MOTOR FUEL METERING DEVICES.

§97.20. Registration Required--Devices.

(a) Prior to operation, a device must be registered. To register a device, an owner or operator must submit:

(1) a completed application in a manner prescribed by the department;

(2) documentation of a device performance review in a manner acceptable to the department; and

(3) the fee required under §97.70.

(b) Device registrations cannot be transferred. A new owner or operator must submit a completed registration application under this section.

(c) A change in the owner or operator’s federal employer identification number or social security number (for sole proprietors) constitutes a change of business identity and requires a new registration application to be submitted under this section.

(d) A change in the name or contact information for an owner or operator must be submitted to the department within 30 days.

(e) Device registrations are valid for two years from issuance of the certificate of registration and must be renewed every two years.

§97.21. Registration Renewal--Devices.

(a) To renew a device registration, an owner or operator must submit:

(1) a completed renewal application in a manner prescribed by the department;

(2) documentation of a device performance review in a manner prescribed by the department; and

(3) the fee required under §97.70.

(b) Documentation of calibration of a device with a maximum flow rate of 20 GPM or less may be submitted to meet the requirement in subsection (a)(2) for a renewal application that is submitted on or after September 1, 2020 and before December 1, 2020.

(c) An o wner or operator is responsible for renewing a device registration before the expiration date. Lack of receipt of a renewal notice from the department shall not excuse failure to file for renewal or late renewal.

§97.22. Registration Changes--Devices.

(a) If the number of registered devices increases, prior to operation of the new devices the owner or operator must submit:

(1) a change notice in a manner prescribed by the department;

(2) documentation of a device performance review for all new devices in a manner acceptable to the department; and

(3) the fee required under §97.70.

(b) If the number of registered devices decreases, the owner or operator must submit notice in a manner approved by the department or omit the devices when submitting a renewal application.

§97.23. Device Performance Review Requirements.

(a) At least once every two years a DPR must be completed on each registered device.

(b) To be valid, a service company must complete a DPR of a device on a single day. A DPR must include:

(1) performance testing;

(2) calibration, if necessary; and

(3) inspection of the device:

(A) to ensure operation within NIST Handbook 44 specifications, tolerances and other technical requirements along with specified manufacturer guidelines; and

(B) to detect the presence of skimmers.

(c) A DPR report must be submitted by a service company within 10 business days of the DPR in a manner prescribed by the department.

(d) Effective date.

(1) Beginning September 1, 2020, devices with a maximum flow rate of 20 GPM or less are subject to this section.

(2) Beginning September 1, 2021, the following devices will also be subject to this section.

(A ) Devices with a maximum flow rate of greater than 20 GPM to 100 GPM ;

(B) Devices with a maximum flow rate of greater than 100 GPM; and

(C) LPG meters.

§97.24. Certificate of Registration.

(a) A current certificate of registration must be visibly displayed in an area that is accessible to the public.

(b) If an original or copy certificate is not legible or available to a consumer, it must be replaced within 30 days of the date the owner or operator discovers the condition.

§97.25. Consumer Information Sticker.

(a) By December 1, 2020, a consumer information sticker with the department’s contact information and current motor fuel tax rates, must be placed on each face of all motor fuel dispensers.

(b) If any part of the information on the sticker is no longer fully legible and in plain sight of the consumer, it must be replaced within 30 days of the date the owner or operator discovers the condition.

(c) A consumer information sticker must not be placed in a manner that affects the accuracy, readability, or lawful operation of a device.

(d) This section does not apply to a device on a transport vehicle.

§97.26. Device Out of Order.

An incorrect device shall be placed out of order by the department and may not be used until repairs are made by a licensed service company. Once the device has been brought into compliance with this chapter, the licensed service company may remove the “Out of Order” tag and release it for use.

§97.27. Condemned Devices.

Devices that are declared to be incorrect and are condemned by the department pursuant to §2310.105 of the Code, must be maintained by the owner, operator, or user until the department has granted authorization to dispose, replace, or destroy the device.

§97.28. Device Records.

(a) A device performance review report shall be maintained for a period of two years at the location where the DPR was performed.

(b) All records required to be maintained shall be made available upon request by the department.

STATUTORY AUTHORITY

The proposed rules are proposed under Texas Occupations Code, Chapters 51 and 2310, which authorize the Commission, the Department’s governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The proposed rules are also proposed under Texas Government Code, Chapter 411, Subchapter F, and Texas Occupations Code, Chapters 51 and 53, which establish the Department’s statutory authority to conduct criminal history background checks on an applicant for or a holder of a license, certificate, registration, title, or permit issued by the Department.

The statutory provisions affected by the proposed rules are those set forth in Texas Business and Commerce Code, Chapter 607, and Texas Occupations Code, Chapters 51 and 2310. No other statutes, articles, or codes are affected by the proposed rules.

SUBCHAPTER C--SALE, DELIVERY, AND QUALITY OF MOTOR FUEL.

§97.40. Distributor, Jobber, Supplier, Wholesaler--Certificate of Compliance.

(a) To be eligible for a certificate of compliance, a distributor, jobber, supplier, or wholesaler must:

(1) submit complete business, facility, and contact information in a manner prescribed by the department ; and

(2) pay the fee required under §97.71.

(b) A certificate of compliance is valid for two years from the date of issuance by the department.

§97.41. Automotive Fuel Rating.

(a) A dealer must:

(1) post the automotive fuel rating (AFR) for each grade of motor fuel offered for sale as provided in 16 CFR Part 306.10; and

(2) not sell or offer to sell fuel that is less than the AFR posted on the dispenser.

(b) Motor fuel that has an AFR lower than the certification of the rating required under federal law may not be delivered or transferred.

§97.42. Stop-Sale Order.

(a) The executive director of the department may issue an order to stop sale of:

(1) motor fuel sold or offered for sale in violation of this chapter; or

(2) motor fuel sold or offered for sale by or through a device that is in violation of this chapter.

(b) Motor fuel subject to a stop-sale order may not be sold until the order has been discharged by a court pursuant to §2310.060 of the Code, or the executive director receives notice acceptable to the department that the motor fuel or device is in compliance with this chapter.

§97.43. Fuel Delivery Records.

(a) Dealers, distributors, jobbers, suppliers, and wholesalers must keep the following records for four years:

(1) all invoices, receipts, or other transmittal records of the purchase, sale, delivery, or distribution of motor fuel; and

(2) any record or other document related to the sampling and testing of motor fuel purchased, sold, delivered, or distributed.

(b) All delivery tickets and letters of certification related to automotive fuel rating must be maintained for one year.

(c) All records required to be maintained shall be made available upon request by the department or an authorized representative of the department.

STATUTORY AUTHORITY

The proposed rules are proposed under Texas Occupations Code, Chapters 51 and 2310, which authorize the Commission, the Department’s governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The proposed rules are also proposed under Texas Government Code, Chapter 411, Subchapter F, and Texas Occupations Code, Chapters 51 and 53, which establish the Department’s statutory authority to conduct criminal history background checks on an applicant for or a holder of a license, certificate, registration, title, or permit issued by the Department.

The statutory provisions affected by the proposed rules are those set forth in Texas Business and Commerce Code, Chapter 607, and Texas Occupations Code, Chapters 51 and 2310. No other statutes, articles, or codes are affected by the proposed rules.

SUBCHAPTER D--SERVICE COMPANIES AND SERVICE TECHNICIANS.

§97.50. Criminal History Check Required.

A criminal history check shall be conducted on an applicant for:

(1) a service company license, including all controlling persons of the applicant; and

(2) a service technician license.

§97.51. Device Maintenance Activities.

(a) A service company or service technician may perform device maintenance activities on one or more of the following device categories:

(1) Low flow-- devices with a maximum flow rate of 20 GPM or less;

(2) High flow-- devices with a maximum flow rate of greater than 20 GPM; or

(3) LPG--LPG meters.

(b) Device maintenance activities include:

(1) placing a device in service;

(2) installing, calibrating, inspecting, testing, or repairing a device;

(3) removing an out-of-order tag, lock, condemnation notice, or other form of use prohibition placed on a device by the department.

(c) An applicant may be licensed in more than one device category.

§97.52. Service Company License Requirements--General.

(a) To obtain a service company license, an applicant must submit:

(1) a completed application in a manner prescribed by the department;

(2) proof of insurance acceptable to the department, as required under §97.53 ;

(3) proof of calibration of test standards in a manner prescribed by the department , as required in §97.58; and

(4) the fee required under §97.72.

(b) A sole proprietor may not perform or offer to perform device maintenance activities unless the sole proprietor:

(1) is exempt from holding a license under this section pursuant to §2310.154 of the Code; or

(2) holds:

(A) a service technician license issued by the department, or a service technician license issued under Subchapter I, Chapter 13, Texas Agriculture Code; and

(B) a service company license issued by the department, or a service company license issued under Subchapter I, Chapter 13, Texas Agriculture Code.

(c) A person licensed under this section or Subchapter I, Chapter 13, Texas Agriculture Code must comply with this chapter.

(d) A license issued under this section is valid for two years from the date of issuance and must be renewed every two years.

§97.53. Service Company License Requirements--Insurance.

(a) A service company must maintain at least the following minimum general liability insurance coverages at all times:

(1) $25,000 per occurrence; or

(2) $50,000 aggregate.

(b) Insurance must be obtained from an admitted company or an eligible surplus lines carrier, as defined in the Texas Insurance Code, Chapter 981, or other insurance companies that are rated by A.M. Best Company as B+ or higher.

§97.54. Service Company License Requirements--Renewal.

(a) To renew a service company license, an applicant must submit:

(1) a completed renewal application in a manner prescribed by the department;

(2) proof of insurance in a manner acceptable to the department, as required under §97.53 ;

(3) proof of calibration of test standards in a manner acceptable to the department, as required in §97.58; and

(4) the fee required under §97.72.

(b) A late renewal means the licensee will have an unlicensed period from the expiration date of the expired license to the issuance date of the renewed license. During the unlicensed period, a person may not perform any device maintenance activities under this chapter.

(c) A licensee is responsible for renewing their license before the expiration date. Lack of receipt of a license renewal notice from the department shall not excuse failure to file for renewal or late renewal.

§97.55. Service Technician License Requirements--General.

(a) To obtain a service technician license, an applicant must:

(1) submit a completed application in a manner prescribed by the department;

(2) pass a written examination for each device category with a score of at least 70%, in accordance with §97.57; and

(3) pay the fee required under §97.72.

(b) An individual may not perform or offer to perform device maintenance activities unless the individual:

(1) is exempt from holding a license under this section pursuant to §2310.154 of the Code; or

(2) holds a service technician license issued by the department, or a service technician license issued under Subchapter I, Chapter 13, Texas Agriculture Code, and:

(A) is employed by a service company; or

(B) holds a service company license issued by the department, or a service company license issued under Subchapter I, Chapter 13, Texas Agriculture Code.

(c) An individual licensed under this section or Subchapter I, Chapter 13, Texas Agriculture Code must comply with this chapter.

(d) A license issued under this section is valid for two years from the date of issuance and must be renewed every two years.

§97.56. Service Technician License Requirements--Renewal.

(a) To renew a service technician license, an applicant must submit:

(1) a completed renewal application in a manner prescribed by the department; and

(2) the fee required under §97.72.

(b) A late renewal means the licensee will have an unlicensed period from the expiration date of the expired license to the issuance date of the renewed license. During the unlicensed period, a person may not perform any device maintenance activities under this chapter.

(c) A licensee is responsible for renewing their license before the expiration date. Lack of receipt of a license renewal notice from the department shall not excuse failure to file for renewal or late renewal.

§97.57. Service Technician License Requirements--Examinations.

(a) The department shall review a completed application to determine an applicant’s eligibility to take a service technician examination.

(b) A person taking an examination must comply with the department's examination requirements under Chapter 60, Subchapter E, of this title (relating to Examinations).

(c) Unauthorized assistance on an examination is grounds for denial, suspension, or revocation of a license and/or an administrative penalty.

§97.58. Test Standards.

(a) Test standards must be certified annually by a laboratory that is accredited to ISO 17025 standards. A service company must maintain at least one test standard per licensed device category as follows:

(1) Low flow: five-gallon or greater test measure or prover;

(2) High flow: prover with a capacity that exceeds the amount of liquid delivered by the device in one minute at the maximum flow rate;

(3) LPG: LPG prover.

(b) A test standard that becomes damaged must be taken out of operation immediately and recalibrated prior to use. A test standard that is beyond repair must be taken out of service permanently.

(c) A service company must maintain the minimum test standards per licensed device category at all times.

§97.59. Inspection for Payment Card Skimmers.

(a) In this section, “skimmer,” “merchant,” and “motor fuel dispenser” have the meanings assigned by §607.001 of the Texas Business and Commerce Code.

(b) A service technician must inspect for the presence of a skimmer:

(1) during a device performance review; and

(2) each time a motor fuel dispenser is opened to perform device maintenance activities.

(c) A service technician must report the finding of a skimmer:

(1) immediately to the merchant, as required by §607.053 of the Texas Business and Commerce Code; and

(2) within 24 hours to the department on a form prescribed by the department.

§97.60. Service Company Records.

(a) A service company must maintain device performance review reports for a period of two years from the date the DPR was performed.

(b) All records required to be maintained shall be made available upon request by the department or an authorized representative of the department.

STATUTORY AUTHORITY

The proposed rules are proposed under Texas Occupations Code, Chapters 51 and 2310, which authorize the Commission, the Department’s governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The proposed rules are also proposed under Texas Government Code, Chapter 411, Subchapter F, and Texas Occupations Code, Chapters 51 and 53, which establish the Department’s statutory authority to conduct criminal history background checks on an applicant for or a holder of a license, certificate, registration, title, or permit issued by the Department.

The statutory provisions affected by the proposed rules are those set forth in Texas Business and Commerce Code, Chapter 607, and Texas Occupations Code, Chapters 51 and 2310. No other statutes, articles, or codes are affected by the proposed rules.

SUBCHAPTER E--FEES.

§97.70. Device Fees.

(a) Registration Fees (initial and renewal):

(1) A device with a maximum flow rate of 20 GPM or less, delivering fuel from a single nozzle:

(A) multiple products (includes a fuel quality fee of $21)--$93;

(B) a single gasoline product (includes a fuel quality fee of $7)--$31; or

(C) a single diesel product, or a single product other than gasoline (includes a fuel quality fee of $7)--$31;

(2) A device with a maximum flow rate of greater than 20 GPM but not greater than 100 GPM (includes a fuel quality fee of $7)--$127;

(3) A device with a maximum flow rate greater than 100 GPM--$450; and

(4) An LPG meter--$130.

(b) Consumer information sticker--$1 per sticker.

§97.71. Distributor, Jobber, Wholesaler, and Supplier Fees.

(a) Fees:

(1) Distributor--$80.

(2) Jobber--$80.

(3) Wholesaler--$80.

(4) Supplier--$2600.

(b) Late fees do not apply to this section.

§97.72. Service Company Fees.

Service company license fees (initial and renewal):

(1) first device category--$300; and

(2) each additional device category--$200.

§97.73. Service Technician Fees.

Service technician license fees (initial and renewal): $30.

§97.74. Fee Policy.

(a) All fees paid to the department are non-refundable.

(b) Late renewal fees for registrations and licenses issued under this chapter are provided under §60.83 of this title (Relating to Late Renewal Fees).

STATUTORY AUTHORITY

The proposed rules are proposed under Texas Occupations Code, Chapters 51 and 2310, which authorize the Commission, the Department’s governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The proposed rules are also proposed under Texas Government Code, Chapter 411, Subchapter F, and Texas Occupations Code, Chapters 51 and 53, which establish the Department’s statutory authority to conduct criminal history background checks on an applicant for or a holder of a license, certificate, registration, title, or permit issued by the Department.

The statutory provisions affected by the proposed rules are those set forth in Texas Business and Commerce Code, Chapter 607, and Texas Occupations Code, Chapters 51 and 2310. No other statutes, articles, or codes are affected by the proposed rules.

SUBCHAPTER F. ENFORCEMENT.

§97.80. Administrative Penalties and Sanctions.

If a person violates any provision of Texas Occupations Code, Chapters 51, or 2310, this chapter, or any rule or order of the executive director or commission, proceedings may be instituted to impose administrative penalties, administrative sanctions, or both in accordance with the provisions of Texas Occupations Code, Chapter 51, and 2310 and applicable agency rules.

REVIEW BY AGENCY COUNSEL

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

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


Brad Bowman
General Counsel
Texas Department of Licensing and Regulation