TITLE 31. NATURAL RESOURCES AND CONSERVATION

PART 2. TEXAS PARKS AND WILDLIFE DEPARTMENT

CHAPTER 58. OYSTERS, SHRIMP, AND FINFISH

SUBCHAPTER A. STATEWIDE OYSTER FISHERY PROCLAMATION

The Texas Parks and Wildlife Commission in a duly noticed meeting on January 23, 2025, adopted amendments to 31 TAC §58.11 and §58.30, concerning the Statewide Oyster Fishery Proclamation. Section 58.30 is adopted with changes to the proposed text as published in the December 20, 2024, issue of the Texas Register (49 TexReg 10297) and will be republished. Section 58.11 is adopted without changes and will not be republished.

The change to §58.30, concerning Certificates of Location, removes the unnecessary parentheses surrounding the fee value established in subsection (d)(6)(A). The change is nonsubstantive.

The amendments are necessary as a result of the passage of Senate Bill (S.B.) 1032 by the 88th Texas Legislature (2023), which requires the commission to create a program by rule to manage the restoration of natural oyster beds. Although the provisions of S.B. 1032 direct the creation of a new program for the issuance of Certificates of Location (CoLs) for restoration purposes, because the department already administers a program that issues CoLs for harvest purposes under the same rules, the practical effect of the amendments as adopted can best be thought of as the broadening of current program rules to address an additional purpose required by statute.

Under Parks and Wildlife Code, Subchapter A, the department may "subject a natural oyster bed to location," which then allows the department to issue a CoL that authorizes the planting of oysters to create a private oyster bed, which may then be harvested. The provisions of S.B. 1032 require the commission to establish by rule a program for the restoration of natural oyster beds, delegating authority to the commission to establish fees, application requirements, location terms, renewal procedures, total area in each bay system to be occupied, siting and marking requirement, and any other requirements necessary to administer the program. The amendments as adopted create and implement such a program, making alterations where necessary to eliminate redundant, unnecessary, or obsolete language, and preventing conflicts with existing provisions applicable to CoLs issued for purposes of harvest.

In addition to elements that implement specific provisions regarding program implementation, the amendments restate statutory language of S.B. 1032 where appropriate or necessary. The department notes that statutory provisions already have the force and effect of law and need not be repeated; however, they are repeated here simply for ease of reference.

The amendment to §58.11, concerning Definitions, alters paragraph (3) to include the planting of cultch in the definition of "Certificate of Location," which is necessary to reflect the fact that the provisions of S.B. 1032 mandate a mechanism for the issuance of CoLs for restoration purposes. The amendment also adds new paragraph (7) to define "cultch" as "substrate of appropriate size and composition for larval oyster attachments, such as shell, rock, or other non-toxic, department-approved material," which is necessary to establish an unambiguous meaning for a term employed in the rules. Finally, the amendment alters the definition of "natural oyster bed" in paragraph (14) to repeat the statutory definition of the term provided in Parks and Wildlife Code, §76.001.

The amendment to §58.30, concerning Certificates of Location, alters subsection (a)(1)(A) to reference the provisions of Parks and Wildlife Code, §76.003, as amended by S.B. 1032, which authorize the issuance of a CoL for degraded natural oyster beds. The amendment also removes current subsection (a)(1)(B), which is a repetition of a statutory provision that was included by S.B. 1032 and referenced in subsection (a)(1)(A).

The amendment also alters subsection (a)(2) to provide that the term of a CoL issued for purposes of harvest is 15 years, which is a repetition of the provisions of Parks and Wildlife Code, §76.018. The amendment also adds new subsection (a)(3) to establish a 15-year term for CoLs issued for purposes of conducting restoration activities. The 15-year term was selected for the sake of consistency because it mirrors the current term established by statute for CoLs issued for purposes of harvest.

New paragraph (5) prohibits the harvest of oysters from CoLs issued for restoration purposes during the term of the CoL and subsequent renewals. The provision is necessary to ensure that restoration activities are the sole purpose for the CoL.

New paragraph (6) prohibits the movement of oysters from an area for which a certificate of location has been issued, which is necessary to ensure that restoration CoLs are not used as propagation sites for commercial activities, but serve only to restore natural populations of oysters in situ.

New paragraph (7) allows the department to authorize a locator to conduct non-harvest activities following any potentially damaging events, such as extreme weather, on areas otherwise closed by the Texas Department of State Health Services, provided the locator has obtained prior written permission from the department (TPWD). The provision is intended to allow locators, when feasible, to monitor and protect their investment in a CoL following potentially damaging phenomena.

The amendment retitles subsection (b) to reflect applicability to both types of CoLs. The amendment also adds new subsection (b)(2) to require the department to designate the dates and times the department is accepting applications for COLs, and to make such information publicly available. Current rule conditions the payment of the application fee "if applications are being accepted by the department," which leaves unclear the question of when applications are in fact being accepted. The alteration clarifies that issue. The contents of current paragraph (2) are eliminated, as they are no longer necessary.

Current §58.30(b)(4) requires, as part of the application process for a certificate of location, a department inspection of a prospective site for purposes of evaluating its suitability for issuance of a certificate of location and enumerates a list of factors the department may consider. The amendment requires a consultation with the department prior to submission of an application (rather than a site inspection), adds two additional factors (sediment overburden, other habitats) to the list of factors to be considered by the department, and redesignates the paragraph as new paragraph (3). The department has determined that a preliminary consultation with the department is an effective method for making an initial determination of the feasibility of a prospective certificate of location. The two additional factors added to the list of factors to be considered by the department (sediment overburden, other habitats) are necessary to allow the department to more thoroughly assess the suitability of a location for the issuance of a certificate of location. Since the department is charged with the conservation of all aquatic resources, the consideration of impacts of a prospective certificate of location on other habitats is prudent.

The amendment adds new paragraph (4) to require an applicant for a CoL to identify which type of CoL is being sought (harvest or restoration), which is necessary because they are distinctly separate authorizations.

The amendment to subsection (b) alters current paragraph (3) to allow for issuance of certificates of location to domestic corporations. The department has determined that because the application process identifies specific individuals who agree in writing by signing the application to be held responsible for conduct regulated by the department, there is an avenue to hold a person accountable in the event that violations occur. The amendment also requires the submission of cartographic data (a map and the corner coordinates) to assist the department in analyzing the suitability of a prospective CoL. The department believes it is important to unambiguously identify the precise location and dimensions of a prospective CoL to prevent possible confusion or misunderstandings regarding the locations where activities under a CoL are authorized. Additionally, the amendment requires a placement plan, accompanied by relevant information concerning the nature or composition of cultch materials, the quantity of those materials, and a chronology for their deployment, all of which are important factors for the department to consider in determining the suitability of a project. The amendment also adds new paragraph (6) to provide that the department will make a decision to deny an application or issue a CoL based on the totality of factors involved, including the suitability of the prospective project with respect to purpose and size. The provision is necessary to ensure that all applicable factors are considered in a decision to allow or deny a CoL. The contents of current paragraph (3)(D) have been reworded and relocated to subsection (d)(1)(A)(iii).

The amendment to §58.30 makes several alterations in subsection (c) that affect the public hearing process on applications for a CoL. The amendment rewords paragraph (1) to make the provisions of the paragraph contingent on a department determination that all siting requirements of the subchapter and Parks and Wildlife Code, Chapter 76, have been met. The current provision is worded in such a fashion as to imply that such a determination will always occur, which is not the case. The reference to Parks and Wildlife Code, Chapter 76, is added for ease of reference. Subparagraph (A) requires the department to hold a public hearing to evaluate public input with respect to an application for a CoL, and eliminates language regarding "recent fishing activities at the site" that were included by the provisions of S.B. 1032. This broadens the stated purpose of the public hearing to allow for inclusion of any relevant concerns the public may have regarding the proposed CoL. Subparagraph (B) requires the department to provide notice of the public hearing required by subparagraph (A), and replaces the current requirement for newspaper publication with a requirement for publication on the department's official website and any other media outlet deemed appropriate. The amendment also rewords subparagraph (D) and eliminated current subparagraph (E) to remove obsolete provisions and simply requires the department, as part of the noticing process, to make information regarding an application for location publicly available, which is necessary to ensure that the public is aware of and given the opportunity to comment upon an application for a CoL. The amended provisions are generally necessary to reflect the wide availability and use of more contemporary communication channels.

The amendment to §58.30 alters subsection (d) to prescribe the responsibilities of persons the department has designated as locators of COLs. The amendment adds new paragraphs (1) and (2) to address final approval by the department of an application for a CoL. New paragraph (1) conditions the final approval of an application for a CoL upon the submission by the applicant to the department of a map of the prospective location with respect to surrounding or nearby state-owned lands, the geographic coordinates of the location, and evidence to the department's satisfaction that the applicant has acquired all applicable state and federal permits and authorizations. New paragraph (2) stipulates a department site inspection and verification of the geographic coordinates of the location. The amendment alters current provisions by adding language where appropriate and necessary to indicate requirements applicable to either or both types of CoLs, eliminates the contents of current paragraph (4) that require an applicant to have a prospective location surveyed by a registered surveyor, which are relocated to new paragraph (8) and made applicable only to requests for boundary alterations. The amendment adds new paragraph (4) to require the submission of amendments to a placement plan to be submitted to the department for review and prohibits initiation activities under an amended placement plan until the department approval occurs. The provision is necessary to ensure that all activities under a CoL are consistent with the department's duties and obligations under the Parks and Wildlife Code. Similarly, new paragraph (5) establishes project milestones and requires restoration locators to notify the department at specified intervals as to a project's status. The amendment alters current paragraph (5) to specify that there are no rental fees for CoLs issued for restoration purposes, which the department has determined is appropriate because restoration activities provide a very high value in terms of ecosystem benefits. Additionally, the amendment to subsection (d) alters current paragraph (6) to remove current subparagraph (A)(i), which is no longer necessary, and adds new clause (ii) to provide for the department to consider any additional factors necessary to inform a department determination to approve or deny a renewal request for a CoL. The amendment also adds new paragraph (8) to establish a process for the alteration of boundaries of a CoL, to consist of the locator having the location resurveyed by a registered surveyor and the submission to the department of survey notes and a map showing latitude and longitude coordinates for all corner markers, and its location in relation to surrounding or nearby state land tract boundaries. The provision is necessary to ensure that all activities under a CoL are consistent with the department's duties and obligations under the Parks and Wildlife Code.

Additionally, the amendment alters current subsection (d)(7) to exempt CoLs for purposes of restoration, which is necessary for reasons addressed earlier in this preamble.

Finally, the amendment makes nonsubstantive grammatical changes to improve precision and clarity in current paragraph (8), concerning transfer or sale of CoLs and alter the title of the subsection to reflect applicability to both types of COL issued by the department.

The department has coordinated and will coordinate with the Department of State Health Services and the General Land Office in the administration of the program as required by Parks and Wildlife Code, §76.022(d).

The department received six comments opposing adoption of the rules as proposed. Of those comments, four expressed a reason or rationale for opposing adoption. Those comments, accompanied by the department's response to each, follow.

One commenter opposed adoption and stated that the department should ensure the simultaneous processing of both types of CoL to promote fairness and enhance the overall management of oyster resources. The commenter stated that the prioritization of restoration CoLs at the expense of commercial (harvest) CoLs could cause the availability of resources for commercial harvest to diminish, which could lead to increased competition among harvesters and potential overharvest of the limited available areas. The commenter also stated that delaying new commercial CoLs while approving restoration CoLs could create economic hardship for existing stakeholders and loss of investment in local economies due to impacts to financial viability creating uncertainty surrounding the ability to harvest, that a "staggered approach" could foster perceptions of favoritism or inequity among stakeholders and feelings of disadvantage for commercial harvesters, which in turn could cause conflicts and public outcry that could undermine trust in the department' s management practices, and that focusing solely on restoration without concurrently addressing commercial harvesting can create an imbalance in the ecosystem. Over time, a lack of commercial harvest could lead to an increase in certain species, potentially disrupting the natural habitat and affecting overall biodiversity. The commenter further stated that delaying one type of certificate while issuing the other can lead to confusion among leaseholders regarding their rights and responsibilities. Clear guidelines and regulations are crucial for maintaining compliance and ensuring that stakeholders understand the implications of the changes. The commenter also stated that the department should align both certificate processes because if both types of certificates are not implemented simultaneously, it risks missing the chance to modernize regulations in a way that reflects current best practices and stakeholder needs. Finally, the commenter stated that the department should examine the practices of neighboring states with robust oyster lease programs, particularly those that do not impose the same regulatory burdens on leases/COLs and public/state oyster beds. The commenter stated that failing to streamline the process creates a risk of falling behind in attracting and retaining leaseholders, ultimately affecting the state's oyster industry and the department. The department disagrees with the comment. In general, the department concludes that the commenter's primary concern is the fear that there is or could be a bias or predisposition towards the issuance of restoration CoLs and a corresponding reluctance to issue harvest CoLs, resulting in the issuance of restorations CoLs in volumes eventually sufficient to make large areas of bay systems effectively off-limits to commercial harvest. The department responds that although there is no statutory direction or provision that expressly or implicitly mandates an allocation ratio for the issuance of either type of CoL or otherwise limits or restricts the number of either type of CoLs that the department may issue, the department intends to evaluate all applications in a fair and impartial manner on a first-come, first-serve basis, as there is no reason to do otherwise. The department further responds that approval of either type of CoL will be based first and foremost on an objective biological evaluation of the site-specific suitability, and potential ecosystem impacts of each prospective project, be it for restoration or commercial use, and neither type of CoL will be explicitly prioritized. The department also notes that it does not exercise unilateral authority with respect to eventual outcomes, as the approval of the Texas General Land Office is required for any CoL to proceed to action. The commenter stated that the prioritization of restoration CoLs "at the expense of" harvest CoLs could cause the availability of resources for commercial harvest to diminish, which could lead to increased competition among harvesters and potential overharvest of the limited available areas. The department disagrees that there is any scenario in which the issuance of restoration CoLs would either directly or indirectly cause overharvest of the resource in other places, or exert any other negative biological or ecosystem effect given that CoLs will only be sited on degraded reefs that are not and will not produce harvestable quantities of oysters without significant restoration input. Given the degradation of oyster reef in Texas estuaries, there is a need for oyster restoration activities of all kinds, including those that are provided by restoration CoLs, which may further act as nursery areas for surrounding oyster reefs given the harvest protections provided to them. Similarly, the department disagrees that a decline in commercial harvest activities could result in disruptions of ecological diversity or ecosystem equilibrium; commercial harvest of oysters is not biologically necessary for ecosystem health in any context. The department also notes that CoLs can only be issued for areas where oyster populations no longer or barely exist and that restoration CoLs must meet benchmarks of restoration throughout the rental period as prescribed in a cultch placement plan. The department also disagrees that issuance of restoration CoLs will result in confusion or produce problematic enforcement/administration issues. The rules require all CoLs to be clearly marked and identified and the department anticipates little to no misunderstanding as to what activities are permitted where, and, in any case, is committed to a robust communications effort with the public and the regulated community. Finally, the department disagrees that it is not aware of or studying similar programs in other states and responds that "attracting and retaining leaseholders," although an important concern, is secondary to the agency's statutory duty to conserve, protect, and manage public resources. No changes were made as a result of the comment.

One commenter opposed adoption and stated that both types of CoLs should be issued simultaneously to prevent unfair advantages and controversy. The commenter further stated that existing and new CoLs for harvest purposes should be allowed to manage their oyster farms as they see fit. The department agrees with the comment with respect to the need to issue CoLs in a fair and impartial manner, but disagrees that anyone should be allowed carte blanche with respect to utilization of a public resource that the department has a statutory duty to protect, manage, and conserve. No changes were made as a result of the comment.

Two commenters opposed adoption and stated that there should be no private oyster beds. One of the commenters stated that the rules seem to be "more red tape and administration with little benefit," and that oyster harvest should be limited while investing in creating habitat (structure and water quality) to get back to a sustainable level. The department disagrees with the comment and responds that the term "private oyster bed" does not mean oyster beds that are private property, but oyster beds created by private interests on public lands in public waters and to which a proprietary harvest opportunity is attached. Additionally (and as stated above), the siting of restoration CoLs is restricted to areas that are determined to be degraded and where oyster production is not significant and will not be significant without cultch replacement. The department further responds that the rules are necessary to discharge a statutory requirement to create rules to manage the restoration of natural oyster beds and that harvest activities are prohibited on restoration CoLs. No changes were made as a result of the comment.

One commentor opposed adoption and stated that additional siting details should be enumerated in the rule, including details related to siting CoLs on areas previously restored under certain types of program funding or cultch sources (e.g., H. B. 51 dealer cultch placement sites) or in existing oyster sanctuaries (no harvest). The commenter expressed general concern that without clearly defined siting considerations specifically tied to the definition of "degraded reef," restoration CoLs will reduce harvest opportunity on public reefs. The department disagrees with the comments and responds that with regard to the siting of CoLs on previously restored areas, CoLs will only be sited on degraded reef where oyster production is not significant and will not be significant without cultch replacement. If reefs are adequately restored and producing oysters (regardless of the funding sources), they would be excluded from prospective CoL siting for that reason (i.e., they would not meet the criteria necessary to be considered "degraded"). With respect to the siting of CoLs for restoration in bays with existing oyster sanctuaries, such areas are already closed to harvest by rule and thus harvest protections afforded by a restoration CoL are unnecessary. Finally, regarding general concern about siting considerations, the determination of a "degraded reef" is a predicate condition for any CoL, meaning that oyster production is not significant and will not be significant without cultch replacement; thus, restoration activities under a CoL can take place in locations that are not commercially viable. No changes were made as a result of the comment.

One commentor opposed adoption of the elimination of a provision of current rule that requires newspaper publication of a notice for a public hearing associated with the application for a CoL. The commenter stated that the removal of the requirement would detrimentally reduce public notice in Texas. The department disagrees with the comment and responds that few communities along the Texas Gulf Coast still have a daily or weekly newspaper and that advertising in the few daily or weekly newspapers that do exist is not the most effective method of reaching members of the public who live in remote locations. The department notes that internet access is now widespread, and the department prepares and disseminates weekly press releases on a variety of department activities to hundreds of daily and weekly newspapers, magazines, and other media, who can then publish whatever is deemed to be of interest to their readership. The department as well operates an email subscription service to notify interested persons and organizations of agency actions and notices. No changes were made as a result of the comment.

The department received 20 comments supporting adoption of the rules as proposed.

The Texas Nature Conservancy and the Galveston Bay Foundation commented in support of adoption of the rules as proposed.

The amendments are adopted under Parks and Wildlife Code, §76.018 and §76.022, which requires the commission to establish by rule a program to issue certificates of location for the restoration of natural oyster bed, including rules to establish fees, application approval requirements, lease terms, and renewal procedures for leases, the total area in each bay system for which leases may be issued, siting and marking requirements for leases, and any other requirement necessary to administer the program; §76.033, which authorizes the department to make regulations to protect and conserve oysters on public reefs and beds; and §76.301, which authorizes the commission to regulate the taking, possession, purchase, and sale of oysters.

§ 58.30. Certificate of Location.

(a) General Rules.

(1) No certificate of location will be issued for:

(A) a natural oyster bed unless the department has determined that it is degraded, consistent with the provisions of Parks and Wildlife Code, §76.003(b);

(B) a bay shore area within 100 yards of the shore as prescribed in Parks and Wildlife Code, §76.004;

(D) an area already under location; or

(E) an area within 1,000 feet of a location not owned or controlled by the applicant unless the applicant secures written permission.

(2) The term of a certificate of location for purposes of harvest is 15 years, as prescribed in Parks and Wildlife Code, §76.018.

(3) The term of a certificate of location for purposes of restoration is 15 years.

(4) In accordance with the Oyster Fishery Management Plan required by Parks and Wildlife Code, §76.301, the department may accept applications for certificates of location.

(5) No harvest of oysters is permitted from an area for which a certificate of location has been issued for restoration purposes.

(6) It is an offense for any person to move oysters from or cause oysters to be moved from an area for which a certificate of location has been issued except as provided by §58.40 of this title (relating to Oyster Transplant Permits) or §58.50 of this title (relating to Oyster Harvest Permits)

(7) A locator may conduct non-harvest activities after potentially damaging events, such as extreme weather events, on locations otherwise closed by DSHS, provided the locator has received prior authorization of the activity from the department in writing.

(b) Application for Certificate of Location (Harvest or Restoration).

(1) An application for a certificate of location shall be accompanied by a nonrefundable application fee of $200.

(2) The department shall designate specific times and dates during which applications will be accepted and shall make such information publicly available.

(3) Prior to the submission of an application, the applicant shall consult with an authorized employee(s) of the department to enable the department to determine necessary survey requirements and evaluate the prospective location with respect to:

(A) natural oyster reefs;

(B) shoreline;

(D) spoil disposal areas;

(E) other areas subject to a certificate of location;

(F) riparian rights;

(G) presence of exposed shell;

(H) presence of live oysters;

(I) sediment overburden; and

(J) other habitats.

(4) An application must specify the purpose of the prospective certificate of location (for harvest or restoration purposes).

(5) An application shall consist of, at a minimum:

(A) the applicant's name and address;

(B) signed affirmation that the applicant is a United States citizen or a domestic corporation;

(i) a map showing approximate size and location in relation to state land tracts;

(ii) the corner coordinates of the proposed site; and

(D) a cultch placement plan for the site, including reasonable estimates of:

(i) the nature or composition of materials to be used;

(ii) the quantity of materials to be used; and

(iii) the time of placement or deployment.

(6) The department shall approve or disapprove an application based on the totality of factors involved, including the suitability of the location with respect to the purpose and size of the area.

(1) If the department determines that the proposed location site meets all siting requirements of this subchapter and Parks and Wildlife Code, Chapter 76, the department shall:

(A) hold a public hearing to provide opportunity for public comment;

(B) publish a notification of the date, time, and purpose of the public hearing on the department website and any other outlet deemed appropriate;

(D) make information about the proposed certificate of location available to the public at the hearing.

(2) The department will consider all public comment relevant to the application..

(3) The department shall review findings of the public hearing and submit recommendations to the Coastal Fisheries Division Director for approval.

(4) The applicant will be notified within 14 days after the hearing of either approval or denial of the application for a certificate of location.

(d) Responsibilities of Approved Locator.

(1) The department will not make a final decision to approve an application for a certificate of location until:

(A) the applicant has provided the department with:

(i) a map of the location showing the relation of the location with respect to surrounding or nearby state land tract boundaries;

(ii) the latitude and longitude coordinates of the location; and

(iii) evidence to satisfy the department that all applicable permits and authorizations required by other state and federal governmental entities have been secured; and

(B) the department has inspected the location and verified the latitude and longitude coordinates required under subparagraph (A) of this paragraph.

(2) Prior to any placement of cultch or other materials, the locator shall mark the boundaries of the location with buoys or other permanent markers in accordance with United States Coast Guard regulations and maintain buoys or other permanent markers for the duration of the period of validity of the certificate. Supplemental markers may be required along the boundaries if one corner marker is not clearly visible from another corner marker.

(A) All marker buoys or other permanent markers must be:

(i) at least six inches in diameter;

(ii) at least three feet out of the water at mean high tide;

(iii) of a shape and color that is visible for at least 1/2 mile under normal weather conditions;

(iv) marked with the certificate of location number (Buoys or other permanent markers common to two or more locations must be marked with all numbers of the certificate of location);

(v) marked with at least two-inch high letters in plain Arabic block letters in a location where it will not be obscured by water or marine growth; and

(vi) marked with all required U.S. Coast Guard markings.

(B) Buoys must be anchored by:

(i) A screw anchor with a minimum one-inch galvanized sucker rod and 12-inch head inserted ten feet into the bottom; or

(ii) two anchors per buoy and each anchor having a minimum weight of 300 pounds.

(C) When replacement of buoys or other permanent markers is necessary, original latitude and longitude coordinates of the final survey must be used to relocate markers.

(3) An authorized employee(s) of the department shall inspect and verify latitude and longitude coordinates.

(4) A locator shall submit proposed amendments to a placement plan to the department for review. The department must approve amendments to a placement plan prior to any activities under a prospective amendment.

(5) In the event that unavoidable or unforeseeable developments or extenuating circumstances make the attainment of the benchmarks in this paragraph impractical or impossible, the department may, on a case-by-case basis, waive, defer, or amend a benchmark. Beginning on the date of issuance of certificate of location for purposes of restoration, the locator shall submit documentation of project progress to the department as follows:

(A) placement initiated--within the first 24 months;

(B) 50% of the plan completed--within five years;

(D) 80% of the plan completed--by time of renewal.

(6) Rental Fee.

(A) The holder of a certificate of location for harvest shall pay to the department $20 per acre of location per year. The fee established by this subparagraph shall be recalculated at three-year intervals beginning on the effective date of this section and proportionally adjusted to any change in the Consumer Price Index, the department's cost-recovery needs, or both.

(B) Rental fees for certificates of location for harvest are due annually by March 1 as prescribed in Parks and Wildlife Code, §76.017.

(C) The holder of a certificate of location shall pay the department a late penalty fee equal to 10 percent of the amount due for any rental, transfer, sale, or renewal fee that is not paid when due as prescribed in Parks and Wildlife Code, §76.017.

(D) Failure to pay any rental, transfer, sale, renewal, or late penalty fee within 90 days of the due date terminates the (certification of location) as prescribed in Parks and Wildlife Code, §76.017.

(E) There is no rental fee for certificates of location for restoration.

(7) Renewal of Certificate of Location.

(A) As prescribed in Parks and Wildlife Code, §76.018, at the end of the term of a certificate of location for harvest the department shall determine the need for continuation of the certificate of location based on:

(i) considerations as specified in §58.12 of this title (relating to Oyster Fishery Management Plan); and

(ii) any other consideration the department deems significant enough to warrant continuation.

(B) If the certificate of location for harvest is to be renewed under the conditions of the department as prescribed in Parks and Wildlife Code, §76.018, the holder of the certificate of location shall be offered the first right of refusal for renewal as prescribed in Parks and Wildlife Code, §76.018.

(8) Alteration of Boundaries

(A) The department must approve all boundary alterations prior to any alteration of boundaries of a certificate of location.

(B) If there is any alteration to the boundaries of a location, the locator shall be responsible for having the location resurveyed and providing the department with survey notes and a map of the location showing:

(i) the location in relation to state land tract boundaries; and

(ii) latitude and longitude coordinates for all corner markers.

(C) The department will not approve any alteration of the boundaries of a certificate of location until the survey required by this paragraph has been conducted and provided to the department.

(9) Auction Procedures.

(A) A certificate of location for harvest may be auctioned by the department if it is not renewed as prescribed by this subchapter and Parks and Wildlife Code, §76.018.

(B) Auction procedures do not apply to certificates of location for restoration; if certificates of location for restoration are not renewed, the location automatically reverts to the public domain.

(i) bid offers from previous auctions;

(ii) established open market prices; and

(iii) other relevant factors.

(D) The department may refuse all bids below the minimum acceptable bid.

(E) The department must follow prescribed bid guidelines for state agencies.

(10) Transfers or Sale.

(A) A transfer or sale of a certificate of location does not change location terms.

(B) A payment of $200 will be due upon transfer or sale of a certificate of location.

(D) A completed transfer form prescribed by the department is required at time of transfer.

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 April 9, 2025.

TRD-202501152

James Murphy

General Counsel

Texas Parks and Wildlife Department

Effective date: April 29, 2025

Proposal publication date: December 20, 2024

For further information, please call: (512) 389-4775

PART 10. TEXAS WATER DEVELOPMENT BOARD

CHAPTER 363. FINANCIAL ASSISTANCE PROGRAMS

SUBCHAPTER N. NEW WATER SUPPLY FOR TEXAS FUND

31 TAC §§363.1401 - 363.1408

The Texas Water Development Board (TWDB) adopts new rules to 31 Texas Administrative Code (TAC) Chapter 363 by adding new §§363.1401, 363.1402, 363.1403, 363.1404, 363.1405, 363.1406, 363.1407, and 363.1408. The proposal is adopted with changes as published in the November 22, 2024, issue of the Texas Register (49 TexReg 9488). The rules will be republished.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED NEW RULES.

The 88th Texas Legislature enacted Senate Bill 28, amending Texas Water Code Chapter 15, Texas Water Assistance Program, to add a new subchapter creating the New Water Supply Fund for Texas. The new legislation directs the Board, by rule, to finance projects through the fund that will lead to seven million acre-feet of new water supplies by December 31, 2033.

SECTION BY SECTION DISCUSSION OF ADOPTED NEW RULES.

Subchapter N is added to 31 Texas Administrative Code Chapter 363.

Section 363.1401. Scope

The adopted new section provides that the programs of financial assistance under Texas Water Code, Chapter 15, Subchapter C-1 will be governed by this subchapter and, unless in conflict with this subchapter, the provisions of 31 TAC Chapter 363 Subchapter A will be applied to the financial assistance and projects under this subchapter.

Section 363.1402. Definition of Terms

The adopted new section includes new definitions for terms commonly used in the subchapter to provide clarity of the terms in the context used.

Section 363.1403. Use of Funds

The adopted new section provides the ways that the Board may or may not use the Fund.

Section 363.1404. Determination of Availability

The adopted new section provides the methods by which the Board will obtain the amount within the Fund and how the Board will seek New Water Supply projects.

Section 363.1405. Complete Application Requirements

The adopted new section provides what information must be included in a project application under the Fund.

Section 363.1406. Consideration of Applications

The adopted new section lists what the Board may consider when evaluating an application.

Section 363.1407. Findings

The adopted new section identifies what the Board must find when granting financial assistance for an application and the process for placing the application before the Board for approval.

Section 363.1408. Terms of Financial Assistance

The adopted new section provides what the Board must determine when granting financial assistance and limits the term length to up to 30 years.

REGULATORY IMPACT ANALYSIS DETERMINATION (Texas Government Code §2001.0225)

The TWDB reviewed the rulemaking in light of the regulatory analysis requirements of Texas Government Code §2001.0225 and determined that the rulemaking is not subject to Texas Government Code §2001.0225, because it does not meet the definition of a "major environmental rule" as defined in the Administrative Procedure Act. A "major environmental rule" is defined as a rule with the specific intent to protect the environment or reduce risks to human health from environmental exposure, a rule that may adversely affect in a material way the economy or a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The intent of the rulemaking is to establish the procedures by which the TWDB will implement the New Water Supply for Texas Fund.

Even if the rule were a major environmental rule, Texas Government Code §2001.0225 still would not apply to this rulemaking because Texas Government Code §2001.0225 only applies to a major environmental rule the result of which is to: (1) exceed a standard set by federal law, unless the rule is specifically required by state law; (2) exceed an express requirement of state law, unless the rule is specifically required by federal law; (3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or (4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability criteria because it: (1) does not exceed any federal law; (2) does not exceed an express requirement of state law; (3) does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; and (4) is not adopted solely under the general powers of the agency, but rather Texas Water Code §15.154. Therefore, this adopted rule does not fall under any of the applicability criteria in Texas Government Code §2001.0225.

TAKINGS IMPACT ASSESSMENT (Texas Government Code §2007.043)

The TWDB evaluated this rule and performed an analysis of whether it constitutes a taking under Texas Government Code, Chapter 2007. The specific purpose of this rule is to establish the procedures by which the TWDB will implement the New Water Supply for Texas Fund. The rule would substantially advance this stated purpose by providing the procedures and requirements associated with TWDB's implementation of the New Water Supply for Texas Fund.

The TWDB's analysis indicates that Texas Government Code, Chapter 2007 does not apply to this rule because this is an action that is reasonably taken to fulfill an obligation mandated by state law, which is exempt under Texas Government Code §2007.003(b)(4). The TWDB is the agency that is directed to implement the New Water Supply for Texas Fund.

Nevertheless, the TWDB further evaluated this rule and performed an assessment of whether it constitutes a taking under Texas Government Code Chapter 2007. Promulgation and enforcement of this rule would be neither a statutory nor a constitutional taking of private real property. Specifically, the subject regulation does not affect a landowner's rights in private real property because this rulemaking does not burden, restrict, or limit the owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the regulation. In other words, this rule establishes the procedures by which the TWDB will implement the Fund. Therefore, the adopted rule does not constitute a taking under Texas Government Code, Chapter 2007.

PUBLIC COMMENTS (Texas Government Code §2001.033(a)(1))

The following comments were received from the National Wildlife Federation, Sierra Club Lone Star Chapter, The Nature Conservancy Texas, Hill Country Alliance, Bayou City Waterkeeper, and Galveston Bay Foundation (National Wildlife Federation, et al.) provided joint comments and the Sierra Club Lone Star Chapter provided additional comments on its own.

Regarding

§363.1402. Definition of Terms.

Comment

The National Wildlife Federation, et al. commented that there appears to be a typographical error in subpart headings listed at 363.1402(3)(E) and the rule should read: The development of infrastructure to transport water that is made available by a project listed in (A) - (D).

Response

TWDB agrees with this comment and the error has been addressed.

Comment

The National Wildlife Federation, et al. and the Sierra Club Lone Star Chapter commented that the proposed definition of "water conservation" has no actual role in the rules, therefore the definition should be removed.

Response

TWDB agrees with these comments and the definition for Water Conservation has been removed from the rule.

Comment

The Sierra Club Lone Star Chapter commented that the definition for "New Water Supply" be broadened to include water reuse, and conjunctive use of ground and surface water.

Response

TWDB appreciates the comment to broaden the definition for "New Water Supply", but it has determined that the recommended change is not appropriate as the current definition aligns with the water supply project types listed at Tex. Water Code 15.153 (b)(1). No changes were made in response to this comment.

Regarding

§363.1403. Use of Funds.

Comment

The Sierra Club Lone Star Chapter commented that subparts should be added to the rule to prioritize environmentally sustainable projects and to ensure equity for disadvantaged communities in fund distribution.

Response

TWDB appreciates the comment. TWDB has determined that the recommended change is not appropriate as Tex. Water Code Ch. 15 Subchapter C-1 does not authorize or direct TWDB to prioritize environmentally sustainable projects or ensure equity for disadvantaged communities in fund distribution. There are other TWDB programs, such as the Economically Distressed Areas Program that are authorized to address issues pertaining to economically less advantaged areas of the state. No changes were made in response to this comment.

Regarding

§363.1405. Complete Application Requirements.

Comment

The Sierra Club Lone Star Chapter commented that the TWDB should include requirements for environmental compliance and equity in the list of application requirements.

Response

TWDB appreciates the comment to include requirements for environmental compliance and equity in the list of application requirements, but it has determined that the recommended changes are not needed as the changes would be redundant when taken into the consideration the General Application Procedures under 31 Texas Administrative Code Chapter 363 Subchapter A, which already provide for environmental review, or would be beyond the TWDB's authority to administer the fund under Tex. Water Code Ch. 15 Subchapter C-1. No changes were made in response to this comment.

Regarding

§363.1406. Consideration of Applications.

Comment

The National Wildlife Federation, et al. commented that a new subpart should be added to allow for additional information not included in the application for the board's consideration.

Response

TWDB agrees and has added language that aligns more with language used in Subchapter A of the same chapter.

Comment

The Sierra Club Lone Star Chapter commented that TWDB should consider environmental impacts in the project evaluation criteria.

Response

TWDB appreciates the comment to consider environmental impacts in the project evaluation criteria, but it has determined that the recommended change is beyond what Tex. Water Code § 15.154 (b) authorizes the TWDB to consider. TWDB currently does an environmental assessment for projects under 31 TAC §363.14 and the projects will still be subject to all applicable environmental protection laws. No changes were made in response to this comment.

Regarding

§363.1407. Findings Required.

Comment

The National Wildlife Federation, et al. commented that a new subpart be added stating the section does not limit what the board may take into consideration when making a finding on an application for financial assistance.

Response

TWDB appreciates the comment, but it has determined that the recommended change is not appropriate. The current language regarding specific required findings by the board is taken from Tex. Water Code 15.154 (c). The statute further provides the board may consider "other relevant factors" before approving an application. No changes were made in response to this comment.

Comment

The Sierra Club Lone Star Chapter commented that TWDB should incorporate evaluations of environmental impacts when deciding on granting applications.

Response

TWDB appreciates the comment to incorporate evaluations of environmental impacts when deciding on granting applications, but it has determined that the recommended change would be adding language that is not currently present in Tex. Water Code § 15.154 (c). TWDB currently does an environmental assessment for projects under 31 TAC §363.14 and the projects will still be subject to all applicable environmental protection laws. No changes were made in response to this comment.

STATUTORY AUTHORITY (Texas Government Code §2001.033(a)(2))

The new rules are adopted under the authority of Texas Water Code §6.101, which provides the TWDB with the authority to adopt rules necessary to carry out the powers and duties in the Water Code and other laws of the State, and also under the authority of Water Code §15.154.

This rulemaking affects Texas Water Code, Chapter 15.

§ 363.1401. Scope of Subchapter N.

This subchapter shall govern the board's programs of financial assistance under Texas Water Code, Chapter 15, Subchapter C-1. Unless in conflict with the provisions of this subchapter, the provisions of Subchapter A of this chapter (relating to General Provisions) apply to projects under this subchapter.

§ 363.1402. Definition of Terms.

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

(1) Fund--The New Water Supply for Texas Fund.

(2) Brackish--Water above 1,000 milligrams per liter of total dissolved solids (TDS).

(3) New Water Supply--Means only:

(A) Marine and Brackish water desalination projects;

(B) Produced water treatment projects, other than projects that are only for purposes of disposal of or supply of water related to oil and gas exploration;

(D) Water supply projects of any type, that result in the acquisition or delivery of water from states other than Texas to locations within Texas; and

(E) The development of infrastructure to transport water that is made available by a project listed in (A) - (D).

(4) Water Need--Has the meaning assigned by §357.10 of this Title.

(5) Water User Group--Has the meaning assigned by §357.10 of this Title.

§ 363.1403. Use of Funds.

(a) The board may use the Fund for financial assistance to an eligible political subdivision for a New Water Supply project.

(b) The board may use the Fund to make transfers to eligible programs.

(d) Financial assistance may not be used for expenses associated with the maintenance or operation of a New Water Supply project.

§ 363.1404. Determination of Availability.

(a) Periodically, or at the request of the board, the executive administrator will present to the board:

(1) a statement of the total money available to the Fund; and

(2) a recommendation identifying the amount of money from the Fund that may be made available to eligible applicants for financial assistance, including any subsidies.

(b) The board may approve the final allocations of money from the Fund for different purposes;

(c) Upon the approval of the board, the executive administrator will publish notice requesting applications for projects, which will identify the timing for mandatory preapplication meetings, and must include:

(1) the funds available for New Water Supply projects;

(2) the types of projects for which applications are being solicited;

(3) eligibility criteria;

(4) structure of financial assistance;

(5) the method and criteria for evaluation and approval of applications by the board;

(6) any requirements to be applied to the use of financial assistance in addition to the requirements set forth in this chapter; and

(7) the date by which the application must be submitted to the executive administrator.

§ 363.1405. Complete Application Requirements.

(a) All applications must include:

(1) Evidence the applicant has conducted, with appropriate notice, a public hearing concerning the project;

(2) Information, sufficient for the board's consideration of the application, regarding the intended end users of the water supply, the needs of the area to be served by the project, the expected benefit of the project to the area, the relationship of the project to the water supply needs of this state overall, and the relationship of the project to the state water plan; and

(3) The total cost of the project, the total volume of annual water supply, the unit cost of the water supply, the reliability of the water supply, the timeline for development, and the potential impacts of the project, all of which must be developed and provided by the applicant as part of the application in accordance with all requirements of §357.34(e) of this Title (related to Identification and Evaluation of Potentially Feasible Water Management Strategies and Water Management Strategy Projects) and associated guidance.

(b) Applications may include letters of support from regional water planning groups, wholesale or retail water suppliers, customers, or any other member of the public that would be affected by the project.

§ 363.1406. Consideration of Applications.

When evaluating applications the board may consider:

(1) The sponsor of the project;

(2) The availability of money or revenue to the political subdivision from all sources for the ultimate repayment of the cost of the project, including all interest;

(3) The Water User Groups to be served by the project and the volume of water supply allocated to each;

(4) The identified Water Needs of the benefitting Water User Groups to be served by the project;

(5) The expected water supply benefit relative to the Water Needs associated with the Water User Group beneficiaries;

(6) The relationship of the project to the Water Needs of the state overall as defined by §357.10;.

(7) The relationship of the project to the state water plan;

(8) Any information contained in the application; and

(9) Any additional information requested by the executive administrator as necessary to complete the financial, legal, engineering, and environmental reviews.

§ 363.1407. Findings Required.

(a) The executive administrator must submit applications for financing under this subchapter to the board with comments concerning financial assistance. The application will be scheduled on the agenda for board consideration at the earliest practical date. The applicant and other interested parties known to the board must be notified of the time and place of such meeting.

(b) The board may grant the application only if the board finds that at the time the application for financial assistance was made:

(1) The public interest is served by state assistance for the project; and

(2) For an application for financial assistance for which repayment is expected, the money or revenue pledged by the political subdivision will be sufficient to meet all obligations assumed by the political subdivision during the term of the financial assistance.

§ 363.1408. Terms of Financial Assistance.

(a) The board must determine the amount and form of financial assistance and the amount and form of repayment.

(b) The board will determine the method of evidence of debt.

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 April 14, 2025.

TRD-202501237

Ashley Harden

General Counsel

Texas Water Development Board

Effective date: May 4, 2025

Proposal publication date: November 22, 2024

For further information, please call: (512) 475-1673