73R7377 SMH-F
By Earley H.B. No. 2622
Substitute the following for H.B. No. 2622:
By Earley C.S.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 the regulation of which has been preempted by
1-21 regulations adopted under the Natural Gas Pipeline Safety Act of
1-22 1968 (49 U.S.C. Section 1671 et seq.) and its subsequent
1-23 amendments.
1-24 Sec. 3. JURISDICTION. Except as provided by Section 2 of
2-1 this article, the commission has jurisdiction over natural gas
2-2 underground storage and over surface and subsurface equipment and
2-3 facilities used for natural gas underground storage.
2-4 Sec. 4. SAFETY STANDARDS AND PRACTICES. (a) The commission
2-5 by rule shall adopt safety standards and practices for natural gas
2-6 underground storage and storage facilities. The standards and
2-7 practices must:
2-8 (1) require the installation and periodic testing of
2-9 safety devices;
2-10 (2) establish emergency notification procedures in the
2-11 event of a release of natural gas from the facility if the owner or
2-12 operator determines that the release poses a substantial risk to
2-13 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 Sec. 5. RECORDS AND REPORTS. (a) An owner or operator of a
3-16 storage facility shall:
3-17 (1) maintain records and make reports relating to
3-18 construction, operation, or maintenance of the facility as required
3-19 by commission rule; and
3-20 (2) provide any other information required by the
3-21 commission relating to construction, operation, or maintenance of
3-22 the facility.
3-23 (b) The commission may provide forms for reports required
3-24 under this section.
3-25 Sec. 6. INSPECTION AND EXAMINATION OF FACILITY AND RECORDS.
3-26 (a) The commission may inspect a storage facility for compliance
3-27 with the safety standards and practices adopted under Section 4 of
4-1 this article and the record-keeping requirements adopted under
4-2 Section 5 of this article. To conduct the inspection, a
4-3 commissioner or a designated employee or agent of the commission
4-4 may enter property on which a storage facility is located at a
4-5 reasonable time and in a reasonable manner to examine:
4-6 (1) the facility and any related buildings or
4-7 equipment; and
4-8 (2) the records required to be maintained at the
4-9 storage facility under Section 5 of this article.
4-10 (b) Before entering the premises of a manned storage
4-11 facility, a commissioner or an employee or agent of the commission
4-12 must present to a person designated by the owner or operator of the
4-13 storage facility identification demonstrating that the
4-14 commissioner, employee, or agent is a commissioner or a designated
4-15 employee or agent of the commission.
4-16 Sec. 7. DAMAGE TO STORAGE FACILITY; DISABLING A SAFETY
4-17 DEVICE. A person may not intentionally damage or destroy a storage
4-18 facility and may not disable a safety device in a storage facility
4-19 except to repair, maintain, test, or replace the device or to
4-20 conduct other activities that are reasonably necessary to the safe
4-21 operation of the storage facility.
4-22 Sec. 8. INJUNCTION; CIVIL PENALTY. (a) The attorney
4-23 general, at the request of the commission, shall institute a civil
4-24 suit against a person who has violated or is violating this chapter
4-25 or a rule adopted by the commission under this chapter for:
4-26 (1) injunctive relief to restrain the person from the
4-27 violation;
5-1 (2) the assessment and recovery of a civil penalty for
5-2 a violation; or
5-3 (3) both injunctive relief and a civil penalty.
5-4 (b) The penalty may not exceed $1,000 for each violation.
5-5 (c) Each day of a continuing violation may be considered a
5-6 separate violation for the purpose of penalty assessment.
5-7 (d) The maximum penalty assessed for a related series of
5-8 violations may not exceed $200,000.
5-9 Sec. 9. ADMINISTRATIVE PENALTY. (a) The commission may
5-10 assess as provided by this section an administrative penalty
5-11 against a person who violates this chapter or a rule or order
5-12 adopted by the commission.
5-13 (b) Except as provided by Subsection (c) of this section,
5-14 the penalty for each violation may be in an amount not to exceed
5-15 $1,000. Each day a violation continues or occurs may be considered
5-16 a separate violation for the purpose of penalty assessment. The
5-17 maximum penalty assessed for a related series of violations under
5-18 this subsection may not exceed $200,000.
5-19 (c) The penalty for each violation of Section 7 of this
5-20 article may be in an amount not to exceed $25,000. Each day a
5-21 violation continues or occurs may be considered a separate
5-22 violation for the purpose of penalty assessment. The total penalty
5-23 assessed under this subsection for a continuing violation may not
5-24 exceed $300,000.
5-25 (d) In determining the amount of the penalty, the commission
5-26 shall consider:
5-27 (1) the seriousness of the violation, including the
6-1 nature, circumstances, extent, and gravity of the prohibited acts,
6-2 and the hazard or potential hazard created to the health, safety,
6-3 or economic welfare of the public;
6-4 (2) the economic damage to property or the environment
6-5 caused by the violation;
6-6 (3) the history of previous violations;
6-7 (4) the amount necessary to deter future violations;
6-8 (5) efforts to correct the violation; and
6-9 (6) any other matter that justice may require.
6-10 (e) If, after investigation of a possible violation and the
6-11 facts surrounding that possible violation, the commission
6-12 determines that a violation has occurred, the commission may issue
6-13 a violation report stating the facts on which the conclusion that a
6-14 violation occurred is based, recommending that an administrative
6-15 penalty under this section be imposed on the person charged, and
6-16 recommending the amount of that proposed penalty. The commission
6-17 shall base the recommended amount of the proposed penalty on the
6-18 seriousness of the violation determined by consideration of the
6-19 factors set forth in Subsection (d) of this section.
6-20 (f) Not later than the 14th day after the date on which the
6-21 report is issued, the commission shall give written notice of the
6-22 report to the person charged. The notice shall include a brief
6-23 summary of the charges, a statement of the amount of the penalty
6-24 recommended, and a statement of the right of the person charged to
6-25 a hearing on the occurrence of the violation or the amount of the
6-26 penalty, or both the occurrence of the violation and the amount of
6-27 the penalty.
7-1 (g) Not later than the 20th day after the date on which
7-2 notice is received, the person charged may accept the determination
7-3 of the commission made under Subsection (e) of this section,
7-4 including the recommended penalty, or make a written request for a
7-5 hearing on the determination.
7-6 (h) If the person charged with the violation accepts the
7-7 determination of the commission, the commission shall issue an
7-8 order approving the determination and ordering the payment of the
7-9 recommended penalty.
7-10 (i) If the person charged requests a hearing or does not
7-11 timely respond to the notice, the commission shall set a hearing
7-12 and give notice of the hearing. The hearing shall be held by a
7-13 hearing examiner designated by the commission. The hearing
7-14 examiner shall make findings of fact and conclusions of law and
7-15 promptly issue to the commission a proposal for decision as to the
7-16 occurrence of the violation, including a recommendation as to the
7-17 amount of the proposed penalty if a penalty is warranted. Based on
7-18 the findings of fact, conclusions of law, and recommendations of
7-19 the hearing examiner, the commission by order may find that a
7-20 violation has occurred and may assess a penalty or may find that no
7-21 violation has occurred. All proceedings under this subsection are
7-22 subject to the Administrative Procedure and Texas Register Act
7-23 (Article 6252-13a, Vernon's Texas Civil Statutes) and its
7-24 subsequent amendments.
7-25 (j) The commission shall give notice of the commission's
7-26 order to the person charged. The notice shall include:
7-27 (1) the findings of fact and conclusions of law
8-1 separately stated;
8-2 (2) the amount of the penalty ordered, if any;
8-3 (3) a statement of the right of the person charged to
8-4 judicial review of the commission's order, if any; and
8-5 (4) other information required by law.
8-6 (k) Not later than the 30th day after the date on which the
8-7 commission's order becomes final as provided by Section 16(c),
8-8 Administrative Procedure and Texas Register Act (Article 6252-13a,
8-9 Vernon's Texas Civil Statutes), and its subsequent amendments, the
8-10 person charged with the violation shall:
8-11 (1) pay the amount of the penalty;
8-12 (2) pay the amount of the penalty and file a petition
8-13 for judicial review contesting either the amount of the penalty or
8-14 the fact of the violation or both the amount of the penalty and the
8-15 fact of the violation; or
8-16 (3) without paying the amount of the penalty, file a
8-17 petition for judicial review contesting the amount of the penalty,
8-18 the fact of the violation, or both the amount of the penalty and
8-19 the fact of the violation.
8-20 (l) Within the 30-day period, a person who acts under
8-21 Subsection (k)(3) of this section may:
8-22 (1) stay the enforcement of the penalty by:
8-23 (A) paying the amount of the penalty to the
8-24 court for placement in an escrow account; or
8-25 (B) giving to the court a supersedeas bond in a
8-26 form approved by the court that is effective until all judicial
8-27 review of the order or decision is final; or
9-1 (2) request the court to stay enforcement of the
9-2 penalty by:
9-3 (A) filing with the court a sworn affidavit of
9-4 the person stating that the person is financially unable to pay the
9-5 amount of the penalty and is financially unable to give the
9-6 supersedeas bond; and
9-7 (B) delivering a copy of the affidavit to the
9-8 commission.
9-9 (m) If the commission receives a copy of an affidavit under
9-10 Subsection (l) of this section the commission may file with the
9-11 court not later than the fifth day after the date the copy is
9-12 received a contest to the affidavit. The court shall hold a
9-13 hearing on the facts alleged in the affidavit as soon as
9-14 practicable. The person who files an affidavit has the burden of
9-15 proving that the person is financially unable to pay the amount of
9-16 the penalty and to give a supersedeas bond.
9-17 (n) If the person does not pay the amount of the penalty and
9-18 the penalty is not stayed, the commission may refer the matter to
9-19 the attorney general for enforcement.
9-20 (o) Judicial review of the order of the commission is:
9-21 (1) instituted by filing a petition as provided by
9-22 Section 19, Administrative Procedure and Texas Register Act
9-23 (Article 6252-13a, Vernon's Texas Civil Statutes), and its
9-24 subsequent amendments; and
9-25 (2) under the substantial evidence rule.
9-26 (p) If the person paid the amount of the penalty and if that
9-27 amount is reduced or is not assessed by the court, the court shall
10-1 order that the appropriate amount plus accrued interest be remitted
10-2 to the person. The rate of interest is the rate charged on loans
10-3 to depository institutions by the New York Federal Reserve Bank and
10-4 shall be paid for the period beginning on the date the penalty is
10-5 paid and ending on the date the penalty is remitted. If the person
10-6 gave a supersedeas bond, the court shall order the release of the
10-7 bond:
10-8 (1) without further action by the person if the
10-9 penalty is not assessed by the court; or
10-10 (2) on payment of the penalty in the amount determined
10-11 by the court.
10-12 (q) A penalty collected under this section shall be
10-13 deposited to the credit of the oil-field cleanup fund.
10-14 Sec. 10. LIMITATION ON POWERS OF MUNICIPALITIES AND
10-15 COUNTIES. A municipality or county may not adopt or enforce an
10-16 ordinance that establishes safety standards or practices applicable
10-17 to storage facilities that are subject to regulation under this
10-18 article or another state or federal law.
10-19 SECTION 2. (a) This Act takes effect September 1, 1993.
10-20 (b) Not later than January 1, 1994, the Railroad Commission
10-21 of Texas shall adopt rules and safety standards and practices
10-22 required by Article 6053-3, Revised Statutes, as added by this Act.
10-23 (c) This Act applies only to natural gas underground storage
10-24 in storage facilities on or after January 1, 1994, including
10-25 storage in facilities that commenced before January 1, 1994.
10-26 Natural gas underground storage in storage facilities before
10-27 January 1, 1994, is governed by the law as it existed immediately
11-1 before the effective date of this Act, and that law is continued in
11-2 effect for that purpose.
11-3 SECTION 3. The importance of this legislation and the
11-4 crowded condition of the calendars in both houses create an
11-5 emergency and an imperative public necessity that the
11-6 constitutional rule requiring bills to be read on three several
11-7 days in each house be suspended, and this rule is hereby suspended.