By: Earley H.B. No. 2622
73R5098 DLF-F
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) "Executive director" means the executive director
1-12 of the commission.
1-13 (3) "Natural gas" has the meaning assigned by Section
1-14 91.173, Natural Resources Code, and its subsequent amendments.
1-15 (4) "Natural gas underground storage" means the
1-16 storage of natural gas beneath the surface in a formation, strata,
1-17 or reservoir.
1-18 (5) "Storage facility" has the meaning assigned by
1-19 Section 91.173, Natural Resources Code, and its subsequent
1-20 amendments.
1-21 Sec. 2. APPLICABILITY. This article does not apply to the
1-22 storage of natural gas covered by the provisions of the Natural Gas
1-23 Pipeline Safety Act of 1968 (49 U.S.C. Section 1671 et seq.) and
1-24 its subsequent amendments or by Article 6053-1, Revised Statutes,
2-1 and its subsequent amendments, or to the storage of a hazardous
2-2 liquid governed under Chapter 117, Natural Resources Code, and its
2-3 subsequent amendments.
2-4 Sec. 3. JURISDICTION. Except as provided by Section 2 of
2-5 this article, the commission has jurisdiction over natural gas
2-6 underground storage and over surface and subsurface equipment and
2-7 facilities used for natural gas underground storage.
2-8 Sec. 4. SAFETY STANDARDS AND PRACTICES. (a) The commission
2-9 by rule shall adopt safety standards and practices for natural gas
2-10 underground storage and storage facilities. The standards and
2-11 practices must:
2-12 (1) require the installation and periodic testing of
2-13 safety devices;
2-14 (2) establish emergency notification procedures in the
2-15 event of a release of natural gas from the facility if the owner or
2-16 operator determines that the release poses a substantial risk to
2-17 the public;
2-18 (3) establish fire prevention and response procedures;
2-19 (4) require employee safety training for the employees
2-20 of the storage facility; and
2-21 (5) establish other safety standards and practices
2-22 that the commission finds are reasonable and necessary for
2-23 underground natural gas storage and the safe construction,
2-24 operation, and maintenance of storage facilities.
2-25 (b) The commission shall require that records of tests of a
2-26 safety device required by Subsection (a)(1) of this section be
2-27 filed with 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 Sec. 5. RECORDS AND REPORTS. (a) An owner or operator of a
3-17 storage facility shall:
3-18 (1) maintain records and make reports relating to
3-19 construction, operation, or maintenance of the facility as required
3-20 by commission rule; and
3-21 (2) provide any other information required by the
3-22 commission relating to construction, operation, or maintenance of
3-23 the facility.
3-24 (b) The commission may provide forms for reports required
3-25 under this section.
3-26 Sec. 6. INSPECTION AND EXAMINATION OF FACILITY AND RECORDS.
3-27 (a) The commission may inspect a storage facility for compliance
4-1 with the safety standards and practices adopted under Section 4 of
4-2 this article and the record-keeping requirements adopted under
4-3 Section 5 of this article. To conduct the inspection, a
4-4 commissioner or a designated employee or agent of the commission
4-5 may enter property on which a storage facility is located at a
4-6 reasonable time and in a reasonable manner to examine:
4-7 (1) the facility and any related buildings or
4-8 equipment; and
4-9 (2) the records required to be maintained under
4-10 Section 5 of this article.
4-11 (b) Before entering the premises of a storage facility, a
4-12 commissioner or an employee or agent of the commission must present
4-13 to a person designated by the owner or operator of the storage
4-14 facility identification demonstrating that the commissioner,
4-15 employee, or agent is a commissioner or a designated employee or
4-16 agent of the commission.
4-17 Sec. 7. DAMAGE TO STORAGE FACILITY; DISABLING A SAFETY
4-18 DEVICE. A person may not intentionally damage or destroy a storage
4-19 facility and may not disable a safety device in a storage facility
4-20 except to repair, maintain, or replace the device.
4-21 Sec. 8. INJUNCTION; CIVIL PENALTY. (a) The attorney
4-22 general, at the request of the commission, shall institute a civil
4-23 suit against a person who has violated or is violating this chapter
4-24 or a rule adopted by the commission under this chapter for:
4-25 (1) injunctive relief to restrain the person from the
4-26 violation;
4-27 (2) the assessment and recovery of a civil penalty for
5-1 a violation; or
5-2 (3) both injunctive relief and a civil penalty.
5-3 (b) The penalty must be not less than $50 or more than
5-4 $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.
5-23 (d) In determining the amount of the penalty, the executive
5-24 director shall consider:
5-25 (1) the seriousness of the violation, including the
5-26 nature, circumstances, extent, and gravity of the prohibited acts,
5-27 and the hazard or potential hazard created to the health, safety,
6-1 or economic welfare of the public;
6-2 (2) the economic damage to property or the environment
6-3 caused by the violation;
6-4 (3) the history of previous violations;
6-5 (4) the amount necessary to deter future violations;
6-6 (5) efforts to correct the violation; and
6-7 (6) any other matter that justice may require.
6-8 (e) If, after investigation of a possible violation and the
6-9 facts surrounding that possible violation, the executive director
6-10 determines that a violation has occurred, the executive director
6-11 may issue a violation report stating the facts on which the
6-12 conclusion that a violation occurred is based, recommending that an
6-13 administrative penalty under this section be imposed on the person
6-14 charged, and recommending the amount of that proposed penalty. The
6-15 executive director shall base the recommended amount of the
6-16 proposed penalty on the seriousness of the violation determined by
6-17 consideration of the factors set forth in Subsection (d) of this
6-18 section.
6-19 (f) Not later than the 14th day after the date on which the
6-20 report is issued, the executive director shall give written notice
6-21 of the report to the person charged. The notice shall include a
6-22 brief summary of the charges, a statement of the amount of the
6-23 penalty recommended, and a statement of the right of the person
6-24 charged to a hearing on the occurrence of the violation or the
6-25 amount of the penalty, or both the occurrence of the violation and
6-26 the amount of the penalty.
6-27 (g) Not later than the 20th day after the date on which
7-1 notice is received, the person charged may accept the determination
7-2 of the executive director made under Subsection (e) of this
7-3 section, including the recommended penalty, or make a written
7-4 request for a hearing on the determination.
7-5 (h) If the person charged with the violation accepts the
7-6 determination of the executive director, the commission shall issue
7-7 an order approving the determination and ordering the payment of
7-8 the recommended penalty.
7-9 (i) If the person charged requests a hearing or does not
7-10 timely respond to the notice, the executive director shall set a
7-11 hearing and give notice of the hearing. The hearing shall be held
7-12 by a hearing examiner designated by the commission. The
7-13 commission may designate the State Office of Administrative
7-14 Hearings to hold the hearing. The hearing examiner shall make
7-15 findings of fact and conclusions of law and promptly issue to the
7-16 commission a proposal for decision as to the occurrence of the
7-17 violation, including a recommendation as to the amount of the
7-18 proposed penalty if a penalty is warranted. Based on the findings
7-19 of fact, conclusions of law, and recommendations of the hearing
7-20 examiner, the commission by order may find that a violation has
7-21 occurred and may assess a penalty or may find that no violation has
7-22 occurred. All proceedings under this subsection are subject to the
7-23 Administrative Procedure and Texas Register Act (Article 6252-13a,
7-24 Vernon's Texas Civil Statutes) and its subsequent amendments.
7-25 (j) The executive director shall give notice of the
7-26 commission's order to the person charged. The notice shall
7-27 include:
8-1 (1) the findings of fact and conclusions of law
8-2 separately stated;
8-3 (2) the amount of the penalty ordered, if any;
8-4 (3) a statement of the right of the person charged to
8-5 judicial review of the commission's order, if any; and
8-6 (4) other information required by law.
8-7 (k) Not later than the 30th day after the date on which the
8-8 commission's order becomes final as provided by Section 16(c),
8-9 Administrative Procedure and Texas Register Act (Article 6252-13a,
8-10 Vernon's Texas Civil Statutes), and its subsequent amendments, the
8-11 person charged with the violation shall:
8-12 (1) pay the amount of the penalty;
8-13 (2) pay the amount of the penalty and file a petition
8-14 for judicial review contesting either the amount of the penalty or
8-15 the fact of the violation or both the amount of the penalty and the
8-16 fact of the violation; or
8-17 (3) without paying the amount of the penalty, file a
8-18 petition for judicial review contesting the amount of the penalty,
8-19 the fact of the violation, or both the amount of the penalty and
8-20 the fact of the violation.
8-21 (l) Within the 30-day period, a person who acts under
8-22 Subsection (k)(3) of this section may:
8-23 (1) stay the enforcement of the penalty by:
8-24 (A) paying the amount of the penalty to the
8-25 court for placement in an escrow account; or
8-26 (B) giving to the court a supersedeas bond in a
8-27 form approved by the court that is effective until all judicial
9-1 review of the order or decision is final; or
9-2 (2) request the court to stay enforcement of the
9-3 penalty by:
9-4 (A) filing with the court a sworn affidavit of
9-5 the person stating that the person is financially unable to pay the
9-6 amount of the penalty and is financially unable to give the
9-7 supersedeas bond; and
9-8 (B) delivering a copy of the affidavit to the
9-9 executive director.
9-10 (m) If the executive director receives a copy of an
9-11 affidavit under Subsection (l) of this section the executive
9-12 director may file with the court not later than the fifth day after
9-13 the date the copy is received a contest to the affidavit. The
9-14 court shall hold a hearing on the facts alleged in the affidavit as
9-15 soon as practicable. The person who files an affidavit has the
9-16 burden of proving that the person is financially unable to pay the
9-17 amount of the penalty and to give a supersedeas bond.
9-18 (n) If the person does not pay the amount of the penalty and
9-19 the penalty is not stayed, the executive director may refer the
9-20 matter to the attorney general for enforcement.
9-21 (o) Judicial review of the order of the commission is:
9-22 (1) instituted by filing a petition as provided by
9-23 Section 19, Administrative Procedure and Texas Register Act
9-24 (Article 6252-13a, Vernon's Texas Civil Statutes), and its
9-25 subsequent amendments; and
9-26 (2) under the substantial evidence rule.
9-27 (p) If the person paid the amount of the penalty and if that
10-1 amount is reduced or is not assessed by the court, the court shall
10-2 order that the appropriate amount plus accrued interest be remitted
10-3 to the person. The rate of interest is the rate charged on loans
10-4 to depository institutions by the New York Federal Reserve Bank and
10-5 shall be paid for the period beginning on the date the penalty is
10-6 paid and ending on the date the penalty is remitted. If the person
10-7 gave a supersedeas bond, the court shall order the release of the
10-8 bond:
10-9 (1) without further action by the person if the
10-10 penalty is not assessed by the court; or
10-11 (2) on payment of the penalty in the amount determined
10-12 by the court.
10-13 (q) A penalty collected under this section shall be remitted
10-14 to the comptroller for deposit to the general revenue fund.
10-15 Sec. 10. LIMITATION ON POWERS OF MUNICIPALITIES AND
10-16 COUNTIES. A municipality or county may not adopt or enforce an
10-17 ordinance that establishes safety standards or practices applicable
10-18 to storage facilities that are subject to regulation under this
10-19 article or another state or federal law.
10-20 SECTION 2. (a) This Act takes effect September 1, 1993.
10-21 (b) Not later than January 1, 1994, the Railroad Commission
10-22 of Texas shall adopt rules and safety standards and practices
10-23 required by Article 6053-3, Revised Statutes, as added by this Act.
10-24 (c) This Act applies only to natural gas underground storage
10-25 in storage facilities on or after January 1, 1994, including
10-26 storage in facilities that commenced before January 1, 1994.
10-27 Natural gas underground storage in storage facilities before
11-1 January 1, 1994, is governed by the law as it existed immediately
11-2 before the effective date of this Act, and that law is continued in
11-3 effect for that purpose.
11-4 SECTION 3. The importance of this legislation and the
11-5 crowded condition of the calendars in both houses create an
11-6 emergency and an imperative public necessity that the
11-7 constitutional rule requiring bills to be read on three several
11-8 days in each house be suspended, and this rule is hereby suspended.