By Earley H.B. No. 2622
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to regulation of natural gas underground storage
1-3 facilities; providing penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 102, Revised Statutes, is amended by adding
1-6 Article 6053-3 to read as follows:
1-7 Art. 6053-3. UNDERGROUND STORAGE FACILITIES FOR NATURAL GAS
1-8 Sec. 1. DEFINITIONS. In this article:
1-9 (1) "Commission" means the Railroad Commission of
1-10 Texas.
1-11 (2) "Natural gas" means any gaseous material composed
1-12 primarily of methane in either its original or manufactured state.
1-13 (3) "Natural gas underground storage" means the
1-14 storage of natural gas beneath the surface in a formation, strata,
1-15 or reservoir.
1-16 (4) "Storage facility" has the meaning assigned by
1-17 Section 91.173, Natural Resources Code, and its subsequent
1-18 amendments.
1-19 Sec. 2. APPLICABILITY. This article does not apply to a
1-20 storage facility that is part of an interstate pipeline facility as
1-21 defined by the United States Department of Transportation and that
1-22 is subject to federal minimum standards adopted under the Natural
1-23 Gas Pipeline Safety Act of 1968 (49 U.S.C. Section 1671 et seq.)
1-24 and its subsequent amendments.
2-1 Sec. 3. JURISDICTION. Except as provided by Section 2 of
2-2 this article, the commission has jurisdiction over natural gas
2-3 underground storage and over surface and subsurface equipment and
2-4 facilities used for natural gas underground storage.
2-5 Sec. 4. SAFETY STANDARDS AND PRACTICES. (a) The commission
2-6 by rule shall adopt safety standards and practices for natural gas
2-7 underground storage and storage facilities. The standards and
2-8 practices must:
2-9 (1) require the installation and periodic testing of
2-10 safety devices;
2-11 (2) establish emergency notification procedures in the
2-12 event of a release of natural gas from the facility if the owner or
2-13 operator determines that the release poses a substantial risk to
2-14 the public;
2-15 (3) establish fire prevention and response procedures;
2-16 (4) require employee safety training with respect to
2-17 the operation of a storage facility for the employees of the
2-18 storage facility; and
2-19 (5) establish other safety standards and practices
2-20 that the commission finds are reasonable and necessary for
2-21 underground natural gas storage and the safe construction,
2-22 operation, and maintenance of storage facilities.
2-23 (b) The commission shall require that records of tests of a
2-24 safety device required by Subsection (a)(1) of this section be:
2-25 (1) filed with the commission; or
2-26 (2) maintained by the owner or operator and made
2-27 available for inspection by the commission.
3-1 (c) The commission may adopt different standards and
3-2 practices for different types of storage facilities and may
3-3 distinguish between natural gas underground storage in salt dome
3-4 caverns, depleted reservoirs, and embedded salt formations.
3-5 (d) The commission may grant an exception in a permit or
3-6 amended permit issued to a storage facility to standards and
3-7 practices adopted under this section if granting the exception does
3-8 not constitute an unreasonable danger to the public. The
3-9 commission may impose additional standards and practices in a
3-10 permit or amended permit issued to a storage facility.
3-11 (e) The commission may require the owner or operator of a
3-12 storage facility to prepare a safety procedure manual for each
3-13 storage facility and file a copy of the manual with the commission
3-14 or make the manual available for inspection under Section 6 of this
3-15 article.
3-16 (f) Safety standards and practices adopted by the commission
3-17 for a storage facility that is part of an intrastate pipeline
3-18 facility as defined by the United States Department of
3-19 Transportation under the Natural Gas Pipeline Safety Act of 1968
3-20 (49 U.S.C. Section 1671 et seq.) and its subsequent amendments must
3-21 be compatible with federal minimum standards.
3-22 Sec. 5. RECORDS AND REPORTS. (a) An owner or operator of a
3-23 storage facility shall:
3-24 (1) maintain records and make reports relating to
3-25 construction, operation, or maintenance of the facility as required
3-26 by commission rule; and
3-27 (2) provide any other information required by the
4-1 commission relating to construction, operation, or maintenance of
4-2 the facility.
4-3 (b) The commission may provide forms for reports required
4-4 under this section.
4-5 Sec. 6. INSPECTION AND EXAMINATION OF FACILITY AND RECORDS.
4-6 (a) The commission may inspect a storage facility for compliance
4-7 with the safety standards and practices adopted under Section 4 of
4-8 this article and the record-keeping requirements adopted under
4-9 Section 5 of this article. To conduct the inspection, a
4-10 commissioner or a designated employee or agent of the commission
4-11 may enter property on which a storage facility is located at a
4-12 reasonable time and in a reasonable manner to examine:
4-13 (1) the facility and any related buildings or
4-14 equipment; and
4-15 (2) the records required to be maintained at the
4-16 storage facility under Section 5 of this article.
4-17 (b) Before the commission or its employees or agents enter
4-18 the premises of a storage facility with on-site personnel, proper
4-19 credentials must be presented to the on-site person in charge of
4-20 the property.
4-21 Sec. 7. DAMAGE TO STORAGE FACILITY; DISABLING A SAFETY
4-22 DEVICE. A person may not intentionally damage or destroy a storage
4-23 facility and may not disable a safety device in a storage facility
4-24 except to repair, maintain, test, or replace the device or to
4-25 conduct other activities that are reasonably necessary to the safe
4-26 operation of the storage facility.
4-27 Sec. 8. INJUNCTION; CIVIL PENALTY. (a) The attorney
5-1 general, at the request of the commission, shall institute a civil
5-2 suit against a person who has violated or is violating this article
5-3 or a rule adopted or order or permit issued under this article for:
5-4 (1) injunctive relief to restrain the person from the
5-5 violation;
5-6 (2) the assessment and recovery of a civil penalty for
5-7 a violation; or
5-8 (3) both injunctive relief and a civil penalty.
5-9 (b) The penalty may not exceed $25,000 for each violation.
5-10 (c) Each day of a continuing violation may be considered a
5-11 separate violation for the purpose of penalty assessment.
5-12 (d) The maximum penalty assessed for a related series of
5-13 violations may not exceed $500,000.
5-14 Sec. 9. ADMINISTRATIVE PENALTY. (a) The commission may
5-15 assess as provided by this section an administrative penalty
5-16 against a person who violates this article or a rule adopted or
5-17 order or permit issued under this article.
5-18 (b) Except as provided by Subsection (c) of this section,
5-19 the penalty for each violation may be in an amount not to exceed
5-20 $10,000. Each day a violation continues or occurs may be
5-21 considered a separate violation for the purpose of penalty
5-22 assessment. The maximum penalty assessed for a related series of
5-23 violations under this subsection may not exceed $200,000.
5-24 (c) The penalty for each violation of Section 7 of this
5-25 article may be in an amount not to exceed $25,000. Each day a
5-26 violation continues or occurs may be considered a separate
5-27 violation for the purpose of penalty assessment. The total penalty
6-1 assessed under this subsection for a continuing violation may not
6-2 exceed $300,000.
6-3 (d) In determining the amount of the penalty, the commission
6-4 shall consider:
6-5 (1) the seriousness of the violation, including the
6-6 nature, circumstances, extent, and gravity of the prohibited acts,
6-7 and the hazard or potential hazard created to the health, safety,
6-8 or economic welfare of the public;
6-9 (2) the economic harm to property or the environment
6-10 caused by the violation;
6-11 (3) the history of previous violations;
6-12 (4) the amount necessary to deter future violations;
6-13 (5) efforts to correct the violation; and
6-14 (6) any other matter that justice may require.
6-15 (e) A civil penalty may be assessed only after the person
6-16 charged under this section has been given an opportunity for a
6-17 public hearing.
6-18 (f) If a public hearing has been held, the commission shall
6-19 make findings of fact and issue a written decision as to the
6-20 occurrence of the violation and the amount of the penalty that is
6-21 warranted, incorporating, if appropriate, an order requiring that
6-22 the penalty be paid.
6-23 (g) If appropriate, the commission shall consolidate the
6-24 hearing with other proceedings.
6-25 (h) If a person charged under this section fails to take
6-26 advantage of the opportunity for a public hearing, a civil penalty
6-27 may be assessed by the commission after it has determined that a
7-1 violation occurred and the amount of the penalty that is warranted.
7-2 (i) The commission shall then issue an order requiring the
7-3 penalty to be paid.
7-4 (j) The notice of the commission's order given to the person
7-5 under the Administrative Procedure and Texas Register Act (Article
7-6 6252-13a, Vernon's Texas Civil Statutes) and its subsequent
7-7 amendments must include a statement of the right of the person to
7-8 judicial review of the order.
7-9 (k) Not later than the 30th day after the date on which the
7-10 commission's order becomes final as provided by Section 16(c),
7-11 Administrative Procedure and Texas Register Act (Article 6252-13a,
7-12 Vernon's Texas Civil Statutes), and its subsequent amendments, the
7-13 person charged with the violation shall:
7-14 (1) pay the amount of the penalty;
7-15 (2) pay the amount of the penalty and file a petition
7-16 for judicial review contesting either the amount of the penalty or
7-17 the fact of the violation or both the amount of the penalty and the
7-18 fact of the violation; or
7-19 (3) without paying the amount of the penalty, file a
7-20 petition for judicial review contesting the amount of the penalty,
7-21 the fact of the violation, or both the amount of the penalty and
7-22 the fact of the violation.
7-23 (l) Within the 30-day period, a person who acts under
7-24 Subsection (k)(3) of this section may:
7-25 (1) stay the enforcement of the penalty by:
7-26 (A) paying the amount of the penalty to the
7-27 court for placement in an escrow account; or
8-1 (B) giving to the court a supersedeas bond in a
8-2 form approved by the court that is effective until all judicial
8-3 review of the order or decision is final; or
8-4 (2) request the court to stay enforcement of the
8-5 penalty by:
8-6 (A) filing with the court a sworn affidavit of
8-7 the person stating that the person is financially unable to pay the
8-8 amount of the penalty and is financially unable to give the
8-9 supersedeas bond; and
8-10 (B) delivering a copy of the affidavit to the
8-11 commission.
8-12 (m) If the commission receives a copy of an affidavit under
8-13 Subsection (l) of this section the commission may file with the
8-14 court not later than the fifth day after the date the copy is
8-15 received a contest to the affidavit. The court shall hold a
8-16 hearing on the facts alleged in the affidavit as soon as
8-17 practicable. The person who files an affidavit has the burden of
8-18 proving that the person is financially unable to pay the amount of
8-19 the penalty and to give a supersedeas bond.
8-20 (n) If the person does not pay the amount of the penalty and
8-21 the penalty is not stayed, the commission may refer the matter to
8-22 the attorney general for enforcement.
8-23 (o) Judicial review of the order of the commission is:
8-24 (1) instituted by filing a petition as provided by
8-25 Section 19, Administrative Procedure and Texas Register Act
8-26 (Article 6252-13a, Vernon's Texas Civil Statutes), and its
8-27 subsequent amendments; and
9-1 (2) under the substantial evidence rule.
9-2 (p) If the person paid the amount of the penalty and if that
9-3 amount is reduced or is not assessed by the court, the court shall
9-4 order that the appropriate amount plus accrued interest be remitted
9-5 to the person. The rate of interest is the rate charged on loans
9-6 to depository institutions by the New York Federal Reserve Bank and
9-7 shall be paid for the period beginning on the date the penalty is
9-8 paid and ending on the date the penalty is remitted. If the person
9-9 gave a supersedeas bond, the court shall order the release of the
9-10 bond:
9-11 (1) without further action by the person if the
9-12 penalty is not assessed by the court; or
9-13 (2) on payment of the penalty in the amount determined
9-14 by the court.
9-15 (q) A penalty collected under this section shall be
9-16 deposited to the credit of the oil-field cleanup fund.
9-17 Sec. 10. NOTICE OF NONCOMPLIANCE. In addition to other
9-18 authority specifically granted to the commission under this
9-19 article, the commission may enforce this article or any rule
9-20 adopted or order or permit issued under this article as provided by
9-21 Section 91.207, Natural Resources Code.
9-22 Sec. 11. LIMITATION ON POWERS OF MUNICIPALITIES AND
9-23 COUNTIES. A municipality or county may not adopt or enforce an
9-24 ordinance that establishes safety standards or practices applicable
9-25 to storage facilities that are subject to regulation under this
9-26 article or another state or federal law.
9-27 SECTION 2. (a) This Act takes effect September 1, 1993.
10-1 (b) Not later than January 1, 1994, the Railroad Commission
10-2 of Texas shall adopt rules and safety standards and practices
10-3 required by Article 6053-3, Revised Statutes, as added by this Act.
10-4 (c) This Act applies only to natural gas underground storage
10-5 in storage facilities on or after January 1, 1994, including
10-6 storage in facilities that commenced before January 1, 1994.
10-7 Natural gas underground storage in storage facilities before
10-8 January 1, 1994, is governed by the law as it existed immediately
10-9 before the effective date of this Act, and that law is continued in
10-10 effect for that purpose.
10-11 SECTION 3. The importance of this legislation and the
10-12 crowded condition of the calendars in both houses create an
10-13 emergency and an imperative public necessity that the
10-14 constitutional rule requiring bills to be read on three several
10-15 days in each house be suspended, and this rule is hereby suspended.