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.