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