By Earley H.B. No. 2016 Substitute the following for H.B. No. 2016: By Earley C.S.H.B. No. 2016 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the regulation of the storage of hazardous liquids in 1-3 salt dome storage facilities; providing civil and administrative 1-4 penalties. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. The Natural Resources Code is amended by adding 1-7 Title 11 to read as follows: 1-8 TITLE 11. MISCELLANEOUS USES OF NATURAL RESOURCES 1-9 CHAPTER 211. HAZARDOUS LIQUID SALT 1-10 DOME STORAGE FACILITIES 1-11 SUBCHAPTER A. GENERAL PROVISIONS 1-12 Sec. 211.011. DEFINITIONS. In this chapter: 1-13 (1) "Commission" means the Railroad Commission of 1-14 Texas. 1-15 (2) "Hazardous liquid" means any liquid which is not 1-16 defined as a solid or hazardous waste by Section 361 of the Water 1-17 Code, and which is: 1-18 (A) petroleum or any petroleum or liquid natural 1-19 gas product; or 1-20 (B) any hydrocarbon in a liquid state, other 1-21 than liquified natural gas, that has been determined by the United 1-22 States secretary of transportation to be a hazardous liquid. 1-23 (3) "Salt dome storage of hazardous liquids" means the 1-24 storage of a hazardous liquid in any salt formation or bedded salt 2-1 formation storage facility, but does not include a facility the 2-2 regulation of which has been preempted by regulations adopted under 2-3 the Hazardous Liquid Pipeline Safety Act of 1979 (49 App. U.S.C. 2-4 Section 2001 et seq.) or the Natural Gas Pipeline Safety Act of 2-5 1968 (49 App. U.S.C. Section 1671 et seq.). 2-6 (4) "Salt dome storage facility" includes any new or 2-7 existing salt formation or bedded salt formation storage cavern and 2-8 any equipment, facility, or building used or intended for use in 2-9 the storage of a hazardous liquid in the salt formation cavern. 2-10 Sec. 211.002. POWERS OF LOCAL GOVERNMENTS. (A) This 2-11 chapter does not reduce, limit, or impair the authority provided by 2-12 law to any municipality, except as provided by Subsection (b) of 2-13 this section. 2-14 (b) A municipality or county may not adopt or enforce an 2-15 ordinance or other regulation that establishes safety standards or 2-16 practices applicable to hazardous liquid salt formation storage 2-17 facilities that are subject to regulation by federal or state law. 2-18 SUBCHAPTER B. REGULATION OF FACILITIES 2-19 Sec. 211.011. JURISDICTION. The commission has jurisdiction 2-20 over all salt dome storage of hazardous liquids and over facilities 2-21 used for the storage of hazardous liquids in salt domes. 2-22 Sec. 211.012. RULES AND STANDARDS. (a) The commission 2-23 shall adopt rules to establish safety standards for and practices 2-24 applicable to the storage of hazardous liquid in salt domes and the 2-25 facilities used for such storage. The rules shall require: 2-26 (1) the installation and periodic testing of safety 2-27 devices at a salt dome storage facility; 3-1 (2) the establishment of emergency notification 3-2 procedures in the event of a release of a hazardous substance that 3-3 the operator of the facility determines poses a substantial risk to 3-4 the public; 3-5 (3) fire prevention and response procedures; 3-6 (4) employee and third-party contractor safety 3-7 training with respect to the operation of the facility; and 3-8 (5) other requirements that the commission finds 3-9 necessary and reasonable for the safe construction, operation, and 3-10 maintenance of salt dome storage facilities. 3-11 (b) The commission may grant exceptions to its rules or 3-12 impose additional requirements in any permit or amended permit 3-13 issued to a facility if the facility, as permitted, will not cause 3-14 an unreasonable danger to the public. 3-15 Sec. 211.013. RECORDS AND REPORTS. (a) Each owner or 3-16 operator of a hazardous liquid salt dome storage facility shall 3-17 maintain records, make reports, and provide any information the 3-18 commission may require with respect to the construction, operation, 3-19 or maintenance of the facility. The operator of a hazardous liquid 3-20 salt dome storage facility shall report or make available for 3-21 inspection the results of any commission required test of a safety 3-22 device installed at the facility to the commission within 10 days 3-23 after the day of the test. 3-24 (b) The commission by rule shall designate the records 3-25 required to be maintained and the reports required to be filed by 3-26 the owner or operator and shall provide forms for reports if 3-27 necessary. 4-1 (c) The commission may require the owner or operator of a 4-2 hazardous liquid salt dome storage facility to prepare a safety 4-3 procedural manual for the facility. The commission may require the 4-4 owner or operator to file the manual with the commission for 4-5 approval or to make the manual available for inspection by an 4-6 employee or agent of the commission. 4-7 Sec. 211.014. INSPECTIONS AND EXAMINATIONS. (a) The 4-8 commission or its employee or designated agent may enter property 4-9 on which a hazardous liquid salt dome storage facility is located 4-10 or any other property relating to the storage of a hazardous liquid 4-11 in a salt dome and may inspect and examine the property and any 4-12 records located on the property to the extent relevant to determine 4-13 if a person is acting in compliance with this chapter and any rules 4-14 adopted by the commission under this chapter. 4-15 (b) Before the commission or its employee or agent enters 4-16 manned property for the purposes of this section, the person 4-17 requesting entry must present proper credentials to the person in 4-18 charge of the property. 4-19 (c) An entry, examination, or inspection under this section 4-20 must be made only at a reasonable time and in a reasonable manner. 4-21 SUBCHAPTER C. ENFORCEMENT 4-22 Sec. 211.031. CIVIL PENALTY. A person who violates this 4-23 chapter or a rule adopted by the commission under this chapter is 4-24 subject to a civil penalty of not more than $1,000 for each act of 4-25 violation and for each day of violation. The total amount of 4-26 penalties that may be assessed under this section for a related 4-27 series of violations may not exceed $200,000. 5-1 Sec. 211.032. ENFORCEMENT BY COMMISSION AND ATTORNEY 5-2 GENERAL. (a) If it appears that a person has been or is violating 5-3 this chapter or a rule of the commission adopted under this 5-4 chapter, the commission may institute a civil suit in a district 5-5 court for injunctive relief to restrain the person from continuing 5-6 the violation or for the assessment and recovery of a civil penalty 5-7 under Section 211.031 of this code, or for both the injunctive 5-8 relief and the civil penalty. 5-9 (b) On application for injunctive relief and a finding that 5-10 a person has violated or is violating this chapter or a rule of the 5-11 commission under this chapter, the district court shall grant the 5-12 injunctive relief that the facts warrant. 5-13 (c) At the request of the commission, the attorney general 5-14 shall institute and conduct a suit under this section in the name 5-15 of the state. 5-16 (d) The provisions of this section are in addition to and do 5-17 not preempt the commission's authority under Sections 91.201-7 of 5-18 this code. 5-19 Sec. 211.033. ADMINISTRATIVE PENALTY. (a) The commission 5-20 may impose an administrative penalty against a person who: 5-21 (1) violates this chapter or a rule or order adopted 5-22 under this chapter; 5-23 (2) intentionally or knowingly destroys or damages or 5-24 attempts to destroy or damage a hazardous liquid salt dome storage 5-25 facility; or 5-26 (3) intentionally or knowingly disables a safety 5-27 device in a hazardous liquid salt dome storage facility, except to 6-1 facilitate a repair; maintain, repair, or test the device; or 6-2 conduct an activity reasonably necessary for the safe operation of 6-3 the facility. 6-4 (b) The penalty may be in an amount not to exceed $25,000. 6-5 Each day a violation occurs or continues constitutes a separate 6-6 violation for the purpose of this section. 6-7 (c) In determining the amount of the penalty, the commission 6-8 shall consider: 6-9 (1) the seriousness of the violation, including the 6-10 nature, circumstances, extent, and gravity of any prohibited acts, 6-11 and the hazard or potential hazard created to the health, safety, 6-12 or welfare of the public; 6-13 (2) the economic harm to property or the environment 6-14 caused by the violation; 6-15 (3) the history of previous violations; 6-16 (4) the amount necessary to deter future violations; 6-17 (5) efforts to correct the violation; and 6-18 (6) any other matter that justice may require. 6-19 (d) If the commission after investigation determines that a 6-20 violation has occurred, the commission shall issue a preliminary 6-21 report that states the facts on which the determination is based 6-22 and the amount of the penalty. 6-23 (e) Not later than the 14th day after the date the report is 6-24 issued, the commission shall give written notice of the report to 6-25 the person charged with the violation. The notice may be given by 6-26 certified mail. The notice must include a brief summary of the 6-27 alleged violation and a statement of the amount of the penalty and 7-1 must inform the person that the person has a right to a hearing on 7-2 the occurrence of the violation, the amount of the penalty, or both 7-3 the occurrence of the violation and the amount of the penalty. 7-4 (f) Not later than the 20th day after the date the person 7-5 receives the notice, the person in writing may accept the 7-6 determination and penalty of the commission or may make a written 7-7 request for a hearing on the occurrence of the violation, the 7-8 amount of the penalty, or both the occurrence of the violation and 7-9 the amount of the penalty. 7-10 (g) The commission by order may impose the penalty if the 7-11 person accepts the determination and the penalty. 7-12 (h) If the person requests a hearing or fails to respond 7-13 timely to the notice, the commission shall set a hearing and give 7-14 notice of the hearing to the person. The hearing shall be held by 7-15 a hearing examiner designated by the commission. The hearing 7-16 examiner shall make findings of fact and conclusions of law and 7-17 promptly issue to the commission a proposal for a decision about 7-18 the occurrence of the violation and the amount of the penalty. 7-19 Based on the findings of fact, conclusions of law, and proposal for 7-20 a decision, the commission by order may find that a violation has 7-21 occurred and impose a penalty or may find that no violation 7-22 occurred. 7-23 (i) The notice of the commission's order given to the person 7-24 under the Administrative Procedure and Texas Register Act (Article 7-25 6252-13a, Vernon's Texas Civil Statutes) must include a statement 7-26 of the right of the person to judicial review of the order. 7-27 (j) Not later than the 30th day after the date the 8-1 commission's order is final as provided by Section 16(c), 8-2 Administrative Procedure and Texas Register Act (Article 6252-13a, 8-3 Vernon's Texas Civil Statutes), the person shall: 8-4 (1) pay the amount of the penalty; 8-5 (2) pay the amount of the penalty and file a petition 8-6 for judicial review contesting the occurrence of the violation, the 8-7 amount of the penalty, or both the occurrence of the violation and 8-8 the amount of the penalty; or 8-9 (3) without paying the amount of the penalty, file a 8-10 petition for judicial review contesting the occurrence of the 8-11 violation, the amount of the penalty, or both the occurrence of the 8-12 violation and the amount of the penalty. 8-13 (k) Within the 30-day period, a person who acts under 8-14 Subsection (j)(3) of this section may: 8-15 (1) stay enforcement of the penalty by: 8-16 (A) paying the amount of the penalty to the 8-17 court for placement in an escrow account; or 8-18 (B) giving to the court a supersedeas bond 8-19 approved by the court for the amount of the penalty and that is 8-20 effective until all judicial review of the board's order is final; 8-21 or 8-22 (2) request the court to stay enforcement of the 8-23 penalty by: 8-24 (A) filing with the court a sworn affidavit of 8-25 the person stating that the person is financially unable to pay the 8-26 amount of the penalty and is financially unable to give the 8-27 supersedeas bond; and 9-1 (B) giving a copy of the affidavit to the 9-2 executive director by certified mail. 9-3 (l) If the commission receives a copy of an affidavit 9-4 under Subsection (k)(2) of this section, the commission may file 9-5 with the court, within five days after the date the copy is 9-6 received, a contest to the affidavit. The court shall hold a 9-7 hearing on the facts alleged in the affidavit as soon as 9-8 practicable and shall stay the enforcement of the penalty on 9-9 finding that the alleged facts are true. The person who files an 9-10 affidavit has the burden of proving that the person is financially 9-11 unable to pay the amount of the penalty and to give a supersedeas 9-12 bond. 9-13 (m) If the person does not pay the amount of the penalty and 9-14 the enforcement of the penalty is not stayed, the commission may 9-15 refer the matter to the attorney general for collection of the 9-16 amount of the penalty. 9-17 (n) Judicial review of the order of the commission: 9-18 (1) is instituted by filing a petition as provided by 9-19 Section 19, Administrative Procedure and Texas Register Act 9-20 (Article 6252-13a, Vernon's Texas Civil Statutes); and 9-21 (2) is under the substantial evidence rule. 9-22 (o) If the court sustains the occurrence of the violation, 9-23 the court may uphold or reduce the amount of the penalty and order 9-24 the person to pay the full or reduced amount of the penalty. If 9-25 the court does not sustain the occurrence of the violation, the 9-26 court shall order that no penalty is owed. 9-27 (p) When the judgment of the court becomes final, the court 10-1 shall proceed under this subsection. If the person paid the amount 10-2 of the penalty and if that amount is reduced or is not upheld by 10-3 the court, the court shall order that the appropriate amount plus 10-4 accrued interest be remitted to the person. The rate of the 10-5 interest is the rate charged on loans to depository institutions by 10-6 the New York Federal Reserve Bank, and the interest shall be paid 10-7 for the period beginning on the date the penalty was paid and 10-8 ending on the date the penalty is remitted. If the person gave a 10-9 supersedeas bond and if the amount of the penalty is not upheld by 10-10 the court, the court shall order the release of the bond. If the 10-11 person gave a supersedeas bond and if the amount of the penalty is 10-12 reduced, the court shall order the release of the bond after the 10-13 person pays the amount. 10-14 (q) A penalty collected under this section shall be remitted 10-15 to the comptroller for the deposit to the credit of the oil-field 10-16 cleanup fund. 10-17 (r) All proceedings under this section are subject to the 10-18 Administrative Procedure and Texas Register Act (Article 6252-13a, 10-19 Vernon's Texas Civil Statutes). 10-20 SECTION 2. (a) This Act takes effect September 1, 1993, 10-21 except as provided by Subsection (b) of this section. 10-22 (b) Subchapter C, Chapter 211, Natural Resources Code, as 10-23 added by this Act, takes effect January 1, 1994. 10-24 (c) The Railroad Commission of Texas shall adopt rules for 10-25 the administration of Chapter 211, Natural Resources Code, as added 10-26 by this Act, before December 1, 1993. 10-27 SECTION 3. The importance of this legislation and the 11-1 crowded condition of the calendars in both houses create an 11-2 emergency and imperative public necessity that the constitutional 11-3 rule requiring bills to be read on three several days in each house 11-4 be suspended, and this rule is hereby suspended.