1-1 By: Earley (Senate Sponsor - Turner) H.B. No. 2622
1-2 (In the Senate - Received from the House May 5, 1993;
1-3 May 6, 1993, read first time and referred to Committee on Natural
1-4 Resources; May 21, 1993, reported favorably by the following vote:
1-5 Yeas 9, Nays 0; May 21, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Sims x
1-9 Truan x
1-10 Armbrister x
1-11 Barrientos x
1-12 Bivins x
1-13 Brown x
1-14 Carriker x
1-15 Lucio x
1-16 Montford x
1-17 Ratliff x
1-18 Shelley x
1-19 A BILL TO BE ENTITLED
1-20 AN ACT
1-21 relating to regulation of natural gas underground storage
1-22 facilities; providing penalties.
1-23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-24 SECTION 1. Title 102, Revised Statutes, is amended by adding
1-25 Article 6053-3 to read as follows:
1-26 Art. 6053-3. UNDERGROUND STORAGE FACILITIES FOR NATURAL GAS
1-27 Sec. 1. DEFINITIONS. In this article:
1-28 (1) "Commission" means the Railroad Commission of
1-29 Texas.
1-30 (2) "Natural gas" means any gaseous material composed
1-31 primarily of methane in either its original or manufactured state.
1-32 (3) "Natural gas underground storage" means the
1-33 storage of natural gas beneath the surface in a formation, strata,
1-34 or reservoir.
1-35 (4) "Storage facility" has the meaning assigned by
1-36 Section 91.173, Natural Resources Code, and its subsequent
1-37 amendments.
1-38 Sec. 2. APPLICABILITY. This article does not apply to a
1-39 storage facility that is part of an interstate pipeline facility as
1-40 defined by the United States Department of Transportation and that
1-41 is subject to federal minimum standards adopted under the Natural
1-42 Gas Pipeline Safety Act of 1968 (49 U.S.C. Section 1671 et seq.)
1-43 and its subsequent amendments.
1-44 Sec. 3. JURISDICTION. Except as provided by Section 2 of
1-45 this article, the commission has jurisdiction over natural gas
1-46 underground storage and over surface and subsurface equipment and
1-47 facilities used for natural gas underground storage.
1-48 Sec. 4. SAFETY STANDARDS AND PRACTICES. (a) The commission
1-49 by rule shall adopt safety standards and practices for natural gas
1-50 underground storage and storage facilities. The standards and
1-51 practices must:
1-52 (1) require the installation and periodic testing of
1-53 safety devices;
1-54 (2) establish emergency notification procedures in the
1-55 event of a release of natural gas from the facility if the owner or
1-56 operator determines that the release poses a substantial risk to
1-57 the public;
1-58 (3) establish fire prevention and response procedures;
1-59 (4) require employee safety training with respect to
1-60 the operation of a storage facility for the employees of the
1-61 storage facility; and
1-62 (5) establish other safety standards and practices
1-63 that the commission finds are reasonable and necessary for
1-64 underground natural gas storage and the safe construction,
1-65 operation, and maintenance of storage facilities.
1-66 (b) The commission shall require that records of tests of a
1-67 safety device required by Subsection (a)(1) of this section be:
1-68 (1) filed with the commission; or
2-1 (2) maintained by the owner or operator and made
2-2 available for inspection by the commission.
2-3 (c) The commission may adopt different standards and
2-4 practices for different types of storage facilities and may
2-5 distinguish between natural gas underground storage in salt dome
2-6 caverns, depleted reservoirs, and embedded salt formations.
2-7 (d) The commission may grant an exception in a permit or
2-8 amended permit issued to a storage facility to standards and
2-9 practices adopted under this section if granting the exception does
2-10 not constitute an unreasonable danger to the public. The
2-11 commission may impose additional standards and practices in a
2-12 permit or amended permit issued to a storage facility.
2-13 (e) The commission may require the owner or operator of a
2-14 storage facility to prepare a safety procedure manual for each
2-15 storage facility and file a copy of the manual with the commission
2-16 or make the manual available for inspection under Section 6 of this
2-17 article.
2-18 (f) Safety standards and practices adopted by the commission
2-19 for a storage facility that is part of an intrastate pipeline
2-20 facility as defined by the United States Department of
2-21 Transportation under the Natural Gas Pipeline Safety Act of 1968
2-22 (49 U.S.C. Section 1671 et seq.) and its subsequent amendments must
2-23 be compatible with federal minimum standards.
2-24 Sec. 5. RECORDS AND REPORTS. (a) An owner or operator of a
2-25 storage facility shall:
2-26 (1) maintain records and make reports relating to
2-27 construction, operation, or maintenance of the facility as required
2-28 by commission rule; and
2-29 (2) provide any other information required by the
2-30 commission relating to construction, operation, or maintenance of
2-31 the facility.
2-32 (b) The commission may provide forms for reports required
2-33 under this section.
2-34 Sec. 6. INSPECTION AND EXAMINATION OF FACILITY AND RECORDS.
2-35 (a) The commission may inspect a storage facility for compliance
2-36 with the safety standards and practices adopted under Section 4 of
2-37 this article and the record-keeping requirements adopted under
2-38 Section 5 of this article. To conduct the inspection, a
2-39 commissioner or a designated employee or agent of the commission
2-40 may enter property on which a storage facility is located at a
2-41 reasonable time and in a reasonable manner to examine:
2-42 (1) the facility and any related buildings or
2-43 equipment; and
2-44 (2) the records required to be maintained at the
2-45 storage facility under Section 5 of this article.
2-46 (b) Before the commission or its employees or agents enter
2-47 the premises of a storage facility with on-site personnel, proper
2-48 credentials must be presented to the on-site person in charge of
2-49 the property.
2-50 Sec. 7. DAMAGE TO STORAGE FACILITY; DISABLING A SAFETY
2-51 DEVICE. A person may not intentionally damage or destroy a storage
2-52 facility and may not disable a safety device in a storage facility
2-53 except to repair, maintain, test, or replace the device or to
2-54 conduct other activities that are reasonably necessary to the safe
2-55 operation of the storage facility.
2-56 Sec. 8. INJUNCTION; CIVIL PENALTY. (a) The attorney
2-57 general, at the request of the commission, shall institute a civil
2-58 suit against a person who has violated or is violating this article
2-59 or a rule adopted or order or permit issued under this article for:
2-60 (1) injunctive relief to restrain the person from the
2-61 violation;
2-62 (2) the assessment and recovery of a civil penalty for
2-63 a violation; or
2-64 (3) both injunctive relief and a civil penalty.
2-65 (b) The penalty may not exceed $25,000 for each violation.
2-66 (c) Each day of a continuing violation may be considered a
2-67 separate violation for the purpose of penalty assessment.
2-68 (d) The maximum penalty assessed for a related series of
2-69 violations may not exceed $500,000.
2-70 Sec. 9. ADMINISTRATIVE PENALTY. (a) The commission may
3-1 assess as provided by this section an administrative penalty
3-2 against a person who violates this article or a rule adopted or
3-3 order or permit issued under this article.
3-4 (b) Except as provided by Subsection (c) of this section,
3-5 the penalty for each violation may be in an amount not to exceed
3-6 $10,000. Each day a violation continues or occurs may be
3-7 considered a separate violation for the purpose of penalty
3-8 assessment. The maximum penalty assessed for a related series of
3-9 violations under this subsection may not exceed $200,000.
3-10 (c) The penalty for each violation of Section 7 of this
3-11 article may be in an amount not to exceed $25,000. Each day a
3-12 violation continues or occurs may be considered a separate
3-13 violation for the purpose of penalty assessment. The total penalty
3-14 assessed under this subsection for a continuing violation may not
3-15 exceed $300,000.
3-16 (d) In determining the amount of the penalty, the commission
3-17 shall consider:
3-18 (1) the seriousness of the violation, including the
3-19 nature, circumstances, extent, and gravity of the prohibited acts,
3-20 and the hazard or potential hazard created to the health, safety,
3-21 or economic welfare of the public;
3-22 (2) the economic harm to property or the environment
3-23 caused by the violation;
3-24 (3) the history of previous violations;
3-25 (4) the amount necessary to deter future violations;
3-26 (5) efforts to correct the violation; and
3-27 (6) any other matter that justice may require.
3-28 (e) A civil penalty may be assessed only after the person
3-29 charged under this section has been given an opportunity for a
3-30 public hearing.
3-31 (f) If a public hearing has been held, the commission shall
3-32 make findings of fact and issue a written decision as to the
3-33 occurrence of the violation and the amount of the penalty that is
3-34 warranted, incorporating, if appropriate, an order requiring that
3-35 the penalty be paid.
3-36 (g) If appropriate, the commission shall consolidate the
3-37 hearing with other proceedings.
3-38 (h) If a person charged under this section fails to take
3-39 advantage of the opportunity for a public hearing, a civil penalty
3-40 may be assessed by the commission after it has determined that a
3-41 violation occurred and the amount of the penalty that is warranted.
3-42 (i) The commission shall then issue an order requiring the
3-43 penalty to be paid.
3-44 (j) The notice of the commission's order given to the person
3-45 under the Administrative Procedure and Texas Register Act (Article
3-46 6252-13a, Vernon's Texas Civil Statutes) and its subsequent
3-47 amendments must include a statement of the right of the person to
3-48 judicial review of the order.
3-49 (k) Not later than the 30th day after the date on which the
3-50 commission's order becomes final as provided by Section 16(c),
3-51 Administrative Procedure and Texas Register Act (Article 6252-13a,
3-52 Vernon's Texas Civil Statutes), and its subsequent amendments, the
3-53 person charged with the violation shall:
3-54 (1) pay the amount of the penalty;
3-55 (2) pay the amount of the penalty and file a petition
3-56 for judicial review contesting either the amount of the penalty or
3-57 the fact of the violation or both the amount of the penalty and the
3-58 fact of the violation; or
3-59 (3) without paying the amount of the penalty, file a
3-60 petition for judicial review contesting the amount of the penalty,
3-61 the fact of the violation, or both the amount of the penalty and
3-62 the fact of the violation.
3-63 (l) Within the 30-day period, a person who acts under
3-64 Subsection (k)(3) of this section may:
3-65 (1) stay the enforcement of the penalty by:
3-66 (A) paying the amount of the penalty to the
3-67 court for placement in an escrow account; or
3-68 (B) giving to the court a supersedeas bond in a
3-69 form approved by the court that is effective until all judicial
3-70 review of the order or decision is final; or
4-1 (2) request the court to stay enforcement of the
4-2 penalty by:
4-3 (A) filing with the court a sworn affidavit of
4-4 the person stating that the person is financially unable to pay the
4-5 amount of the penalty and is financially unable to give the
4-6 supersedeas bond; and
4-7 (B) delivering a copy of the affidavit to the
4-8 commission.
4-9 (m) If the commission receives a copy of an affidavit under
4-10 Subsection (l) of this section the commission may file with the
4-11 court not later than the fifth day after the date the copy is
4-12 received a contest to the affidavit. The court shall hold a
4-13 hearing on the facts alleged in the affidavit as soon as
4-14 practicable. The person who files an affidavit has the burden of
4-15 proving that the person is financially unable to pay the amount of
4-16 the penalty and to give a supersedeas bond.
4-17 (n) If the person does not pay the amount of the penalty and
4-18 the penalty is not stayed, the commission may refer the matter to
4-19 the attorney general for enforcement.
4-20 (o) Judicial review of the order of the commission is:
4-21 (1) instituted by filing a petition as provided by
4-22 Section 19, Administrative Procedure and Texas Register Act
4-23 (Article 6252-13a, Vernon's Texas Civil Statutes), and its
4-24 subsequent amendments; and
4-25 (2) under the substantial evidence rule.
4-26 (p) If the person paid the amount of the penalty and if that
4-27 amount is reduced or is not assessed by the court, the court shall
4-28 order that the appropriate amount plus accrued interest be remitted
4-29 to the person. The rate of interest is the rate charged on loans
4-30 to depository institutions by the New York Federal Reserve Bank and
4-31 shall be paid for the period beginning on the date the penalty is
4-32 paid and ending on the date the penalty is remitted. If the person
4-33 gave a supersedeas bond, the court shall order the release of the
4-34 bond:
4-35 (1) without further action by the person if the
4-36 penalty is not assessed by the court; or
4-37 (2) on payment of the penalty in the amount determined
4-38 by the court.
4-39 (q) A penalty collected under this section shall be
4-40 deposited to the credit of the oil-field cleanup fund.
4-41 Sec. 10. NOTICE OF NONCOMPLIANCE. In addition to other
4-42 authority specifically granted to the commission under this
4-43 article, the commission may enforce this article or any rule
4-44 adopted or order or permit issued under this article as provided by
4-45 Section 91.207, Natural Resources Code.
4-46 Sec. 11. LIMITATION ON POWERS OF MUNICIPALITIES AND
4-47 COUNTIES. A municipality or county may not adopt or enforce an
4-48 ordinance that establishes safety standards or practices applicable
4-49 to storage facilities that are subject to regulation under this
4-50 article or another state or federal law.
4-51 SECTION 2. (a) This Act takes effect September 1, 1993.
4-52 (b) Not later than January 1, 1994, the Railroad Commission
4-53 of Texas shall adopt rules and safety standards and practices
4-54 required by Article 6053-3, Revised Statutes, as added by this Act.
4-55 (c) This Act applies only to natural gas underground storage
4-56 in storage facilities on or after January 1, 1994, including
4-57 storage in facilities that commenced before January 1, 1994.
4-58 Natural gas underground storage in storage facilities before
4-59 January 1, 1994, is governed by the law as it existed immediately
4-60 before the effective date of this Act, and that law is continued in
4-61 effect for that purpose.
4-62 SECTION 3. The importance of this legislation and the
4-63 crowded condition of the calendars in both houses create an
4-64 emergency and an imperative public necessity that the
4-65 constitutional rule requiring bills to be read on three several
4-66 days in each house be suspended, and this rule is hereby suspended.
4-67 * * * * *
4-68 Austin,
4-69 Texas
4-70 May 21, 1993
5-1 Hon. Bob Bullock
5-2 President of the Senate
5-3 Sir:
5-4 We, your Committee on Natural Resources to which was referred H.B.
5-5 No. 2622, have had the same under consideration, and I am
5-6 instructed to report it back to the Senate with the recommendation
5-7 that it do pass and be printed.
5-8 Sims,
5-9 Chairman
5-10 * * * * *
5-11 WITNESSES
5-12 FOR AGAINST ON
5-13 ___________________________________________________________________
5-14 Name: Dennis Hartnett x
5-15 Representing: Valero Natural Gas L.P.
5-16 City: San Antonio
5-17 -------------------------------------------------------------------
5-18 Name: James Mann x
5-19 Representing: TX Natural Gas Pipeline Assn
5-20 City: Austin
5-21 -------------------------------------------------------------------
5-22 Name: Brenda Loudermilk x
5-23 Representing: Railroad Commission
5-24 City: Austin
5-25 -------------------------------------------------------------------