By:  Armbrister                                        S.B. No. 576
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to the regulation of compressed natural gas and liquefied
    1-2  natural gas industry.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1. SUBCHAPTERS A through E of CHAPTER 116, Natural
    1-5  Resources Code, are amended to read as follows:
    1-6                   SUBCHAPTER A.  GENERAL PROVISIONS
    1-7        Sec. 116.001.  Definitions.
    1-8        In this chapter:
    1-9              (1)  "Commission" means the Railroad Commission of
   1-10  Texas.
   1-11              (2)  "Compressed natural gas" or "CNG" means natural
   1-12  gas primarily consisting of methane in a gaseous state that is
   1-13  compressed and used, stored, sold, transported, or distributed for
   1-14  use by or through a CNG system.
   1-15              (3)  "Liquefied natural gas" or "LNG" means natural gas
   1-16  primarily consisting of methane in liquid or semi-solid state.
   1-17              (4) <(3)>  "CNG cylinder" means a cylinder or other
   1-18  container designed for use or used as part of a CNG system.
   1-19              (5)  "LNG container" means a container designed for use
   1-20  or used as part of a LNG system.
   1-21              (6) <(4)>  "CNG system" means a system of safety
   1-22  devices, cylinders, piping, fittings, valves, compressors,
   1-23  regulators, gauges, relief devices, vents, installation fixtures,
    2-1  and other CNG <compressed natural gas> equipment intended for use
    2-2  or used in any building or public place by the general public or in
    2-3  conjunction with a motor vehicle or mobile fuel system fueled by
    2-4  compressed natural gas and any system or facilities <of equipment>
    2-5  designed to be used or used in the compression, sale, storage,
    2-6  transportation for delivery, or distribution of compressed natural
    2-7  gas in portable CNG cylinders, but does not include <a> natural gas
    2-8  facilities, equipment, or pipelines located upstream of the inlet
    2-9  of a <the> compressor devoted entirely to compressed natural gas.
   2-10              (7)  "LNG system" means a system of safety devices,
   2-11  containers, piping, fittings, valves, compressors, regulators,
   2-12  gauges, relief devices, vents, installation fixtures, and other LNG
   2-13  equipment intended for use or used with a motor vehicle fueled by
   2-14  liquefied natural gas and any system or facilities designed to be
   2-15  used or used in the liquefaction, sale, storage, transportation for
   2-16  delivery, or distribution of liquefied natural gas.
   2-17              (8) <(5)>  "Motor vehicle" means any <a> self-propelled
   2-18  vehicle licensed for highway use or used on a public highway.
   2-19              (9) <(6)>  "Compressed natural gas cargo tank" means a
   2-20  container built in accordance with A.S.M.E. or D.O.T.
   2-21  specifications and used to transport compressed natural gas for
   2-22  delivery.
   2-23              (10)  "Liquefied natural gas cargo tank" means a
   2-24  container built in accordance with A.S.M.E. or D.O.T.
   2-25  specifications and used to transport liquefied natural gas for
    3-1  delivery.
    3-2              (11)  "Mobile fuel system" means a CNG or LNG system to
    3-3  supply natural gas fuel to an auxiliary engine other than the
    3-4  engine used to propel the vehicle or for other uses on the vehicle.
    3-5              (12)  "Motor fuel system" means a CNG or LNG system to
    3-6  supply natural gas as a fuel for an engine used to propel the
    3-7  vehicle.
    3-8              (13)  "Registrant" means any individual exempt from the
    3-9  licensing requirements, as established by rule of the commission,
   3-10  who is required to register with the commission, any person
   3-11  qualified by examination by the commission, or any person who
   3-12  applies for registration with the commission.  Registrant includes
   3-13  an employee of a licensee who performs CNG or LNG-related
   3-14  activities.
   3-15        Sec. 116.002.  Exceptions.
   3-16        This chapter does not apply to:
   3-17              (1)  the production, transportation, storage, sale, or
   3-18  distribution of natural gas that is not included in the definition
   3-19  of compressed natural gas or liquefied natural gas; <or>
   3-20              (2)  the production, transportation, storage, sale or
   3-21  distribution of natural gas that is subject to commission
   3-22  jurisdiction under the Gas Utility Regulatory Act (Article 1446e,
   3-23  Revised Statutes) or the Cox Act (Articles 6050, et seq., Revised
   3-24  Statutes);
   3-25              (3) <(2)>  pipelines, fixtures, and other equipment
    4-1  used in the natural gas industry that are not used or designed to
    4-2  be used as part of a CNG or LNG system; or
    4-3              (4)  pipelines, fixtures, equipment, or facilities to
    4-4  the extent that they are subject to the safety regulations
    4-5  promulgated and enforced by the commission pursuant to Chapter 117,
    4-6  Natural Resources Code, or Article 6053-1, Revised Statutes.
    4-7        SUBCHAPTER B.  ADMINISTRATIVE PROVISIONS
    4-8        Sec. 116.011.  Administration.
    4-9        The commission shall administer and enforce this chapter and
   4-10  rules and standards adopted under this chapter relating to
   4-11  compressed natural gas and liquefied natural gas.
   4-12        Sec. 116.012.  Rules and Standards.
   4-13        To protect the health, safety, and welfare of the general
   4-14  public, the commission shall adopt necessary rules and standards
   4-15  relating to the work of compression and liquefaction, storage, sale
   4-16  or dispensing, transfer or transportation, use or consumption, and
   4-17  disposal of compressed natural gas or liquefied natural gas
   4-18  <compressed natural gas work and operations>.
   4-19        Sec. 116.013.  National Codes.
   4-20        The commission may adopt by reference in its rules all or
   4-21  part of the published codes of nationally recognized societies as
   4-22  standards to be met in the design, construction, fabrication,
   4-23  assembly, installation, use, and maintenance of CNG <compressed
   4-24  natural gas> or LNG components and equipment.
   4-25        Sec. 116.014.  Fees.
    5-1        (a)  Fees collected by the commission under Section 116.034
    5-2  of this code for training, examinations, and seminars must be
    5-3  deposited in a special fund in the state treasury designated as the
    5-4  CNG <compressed natural gas> and LNG examination fund.  The
    5-5  commission shall use money in this fund to pay the cost of
    5-6  training, examinations, and seminars sponsored <furnished> or
    5-7  administered by the commission.
    5-8        (b)  Except as provided by Subsection (a) of this section,
    5-9  money collected by the commission as fees under this chapter shall
   5-10  be deposited in the general revenue fund.
   5-11        Sec. 116.015.  Entry on Property; Inspection and
   5-12  Investigation.
   5-13        (a)  An employee, agent, or inspector of the commission may
   5-14  enter the premises of a licensee <property of a person licensed>
   5-15  under this chapter, or any building or other premises open to the
   5-16  public, or inspect any CNG or LNG system or motor vehicle equipped
   5-17  with CNG or LNG equipment at any reasonable time for the purpose of
   5-18  determining and verifying <and may inspect any motor vehicle
   5-19  equipped with compressed natural gas equipment to determine if the
   5-20  licensee is  complying with or if the motor vehicle is in>
   5-21  compliance with this chapter and rules of the commission adopted
   5-22  under this chapter.
   5-23        (b)  Any authorized representative of the LPG division may
   5-24  enter any building or premises where an accident has occurred in
   5-25  which CNG or LNG was a probable cause, for purposes of
    6-1  investigating the cause, origin, and circumstances of such
    6-2  accident.  The LPG division may request that any state or local
    6-3  authority having jurisdiction take appropriate action as may be
    6-4  necessary for preservation of property and premises.
    6-5                SUBCHAPTER C.  LICENSING & REGISTRATION
    6-6        Sec. 116.031.  License Requirement.
    6-7        (a)  Unless otherwise provided in this chapter or by
    6-8  commission rule, a person shall be required to obtain a license
    6-9  from the commission to engage in any of the following activities <a
   6-10  person has obtained a license from the commission under this
   6-11  chapter, the person may not engage in the following work>:
   6-12              (1)  <cylinder> work that includes the manufacture,
   6-13  assembly, repair, testing, sale, installation, or subframing of CNG
   6-14  cylinders or LNG containers for use in this state;
   6-15              (2)  systems work that includes the sale, installation,
   6-16  modification or service<, or repair> of CNG or LNG systems for use
   6-17  in this state, including the installation, modification or service
   6-18  by any person, except a political subdivision, of a CNG or LNG
   6-19  motor fuel system or mobile fuel system on a vehicle used in the
   6-20  transportation of the general public; or
   6-21              (3)  product work that includes the sale, storage,
   6-22  transportation for delivery, or dispensing of CNG or LNG
   6-23  <compressed natural gas> in this state.
   6-24        (b)  A license obtained by a partnership, corporation, or
   6-25  other legal entity extends to the entity's employees who are
    7-1  performing CNG or LNG <compressed natural gas> work, provided that
    7-2  each employee is qualified and registered as required by rules
    7-3  adopted by the commission.
    7-4        (c)  No license is required by an original vehicle
    7-5  manufacturer or a subcontractor of such manufacturer for the
    7-6  installation and sale of a new CNG or LNG system when such system
    7-7  is installed on a new original vehicle fueled by CNG or LNG.
    7-8        (d)  The commission by rule may provide for the annual
    7-9  registration of all individuals performing CNG or LNG-related
   7-10  activities who are exempt from the licensing requirements of the
   7-11  commission.  Employees of a political subdivision are not required
   7-12  to be licensed or registered under this chapter.
   7-13        Sec. 116.032.  License <Categories> and Registration Fees.
   7-14        (a)  The commission shall adopt rules establishing
   7-15  registration fees and license categories and license fees to be
   7-16  charged for application for and issuance and renewal of a license<s
   7-17  in each category> or registration.
   7-18        (b)  The commission may establish fees for each category of
   7-19  license.  A license fee may not exceed $1,000.
   7-20        Sec. 116.033.  Application and Renewal Procedures.
   7-21        The commission shall adopt rules establishing procedures for
   7-22  submitting and processing applications for issuance and renewal of
   7-23  licenses and for registration.
   7-24        Sec. 116.034.  Examination and Seminar Requirements.
   7-25        (a)  The commission shall adopt rules providing the training,
    8-1  examination, and seminar attendance requirements for persons who
    8-2  are required or who wish to be licensed or registered under this
    8-3  chapter.
    8-4        (b)  The commission may adopt a reasonable fee to cover the
    8-5  cost of any training, examination, or seminar required by and
    8-6  sponsored <furnished> or administered by the commission.
    8-7        (c)  Before a license or registration may be issued, the
    8-8  person to be licensed or registered must satisfactorily complete
    8-9  the training, examinations, and seminars required by the
   8-10  commission.
   8-11        Sec. 116.035.  Denial of License.
   8-12        The commission may deny issuance or renewal of a license or
   8-13  registration to any person who fails to qualify under the
   8-14  requirements of this chapter and rules adopted by the commission
   8-15  under this chapter.  The commission shall give written notice to an
   8-16  applicant for the issuance or renewal of a license or for
   8-17  registration of the denial of the license or registration and the
   8-18  reasons for denial.
   8-19        Sec. 116.036.  Insurance Requirement.
   8-20        (a)  All licensees <A person licensed under this chapter>
   8-21  must acquire and maintain appropriate workers' compensation or
   8-22  coverage for its employees under policies of work related accident,
   8-23  disability and health insurance, including coverage for death
   8-24  benefits, from an insurance carrier authorized to provide coverage
   8-25  in this state and other insurance coverage required by the
    9-1  commission in the amounts required by the commission.
    9-2        (b)  Notwithstanding Subsection (a), a state agency or
    9-3  institution, county, municipality, school district or other
    9-4  governmental subdivision may submit evidence of workers'
    9-5  compensation coverage by self-insurance if permitted by the state
    9-6  workers' compensation act.
    9-7        (c) <(b)>  The commission shall adopt rules establishing
    9-8  specific requirements for insurance coverage under this chapter and
    9-9  evidence of such coverage.  The types and amounts of insurance
   9-10  coverage required by the commission shall be based on the type and
   9-11  category of licensed activity.
   9-12        (d) <(c)>  The commission may not issue or renew a license,
   9-13  and a licensee may not perform any licensed activity unless the
   9-14  insurance coverage required by the commission's rules is in effect
   9-15  and evidence of that coverage is filed with the commission as
   9-16  required by commission rule.
   9-17        (e)  Every motor vehicle operated in this state as a
   9-18  conveyance for a CNG or an LNG cargo tank must meet motor vehicle
   9-19  insurance requirements established by the commission.
   9-20        Sec. 116.037.  Suspension and Revocation of License.
   9-21        (a)  The commission shall notify a licensee or registrant in
   9-22  writing if it finds probable violation or noncompliance with this
   9-23  chapter or the rules adopted under this chapter.
   9-24        (b)  The notice shall specify the particular acts, omissions,
   9-25  or conduct comprising the alleged violation and shall designate a
   10-1  date by which the violation must be corrected or discontinued.
   10-2        (c)  The licensee or registrant shall report timely
   10-3  compliance or shall request extension of time for compliance if
   10-4  considered necessary.
   10-5        (d)  If a licensee or registrant objects to the complaint or
   10-6  requirements under this section, or if the commission determines
   10-7  that the licensee or registrant is not proceeding adequately to
   10-8  compliance, then, on written request of the licensee or registrant
   10-9  or order of the commission, a public hearing must be conducted.
  10-10        (e)  If the commission or division determines that the
  10-11  probable violation or noncompliance constitutes an immediate danger
  10-12  to the public health, safety, and welfare, it shall require the
  10-13  immediate cessation of the probable violation or noncompliance and
  10-14  proceed with a hearing.
  10-15        (f)  If the commission finds that the licensee or registrant
  10-16  has violated or failed to comply with or is violating or failing to
  10-17  comply with this chapter or a rule adopted under this chapter, the
  10-18  commission may suspend the license or registration  for a definite
  10-19  period not to exceed 90 days or may revoke the license.
  10-20        (g)  Any party to a proceeding before the commission is
  10-21  entitled to judicial review under the substantial evidence rule.
  10-22        Sec. 116.038.  Staggered Renewal of Licenses.
  10-23        The commission, by rule, may adopt a system under which
  10-24  license and registration fees required by section 116.014 of this
  10-25  chapter expire on various dates during the year.  For the year in
   11-1  which the license and registration expiration dates are changed,
   11-2  license and registration fees payable on a specified date shall be
   11-3  pro-rated on a monthly basis so that each licensee shall pay only
   11-4  that portion of the license and registration fees that is allowable
   11-5  to the number of months during which the license and registration
   11-6  is valid.  On renewal of the license and registration on the new
   11-7  expiration date, the total license and registration fees are
   11-8  payable.
   11-9                SUBCHAPTER D.  MOTOR VEHICLE REGULATION
  11-10        Sec. 116.071.  Registration Rules.
  11-11        The commission shall adopt rules relating to the registration
  11-12  of motor vehicles that are equipped with a CNG or LNG <compressed
  11-13  natural gas> cargo tank<s> and motor vehicles used principally to
  11-14  transport compressed natural gas or liquefied natural gas in
  11-15  portable cylinders or containers.
  11-16        Sec. 116.072.  Registration.
  11-17        (a)  Each motor vehicle that is equipped with a CNG or LNG
  11-18  <compressed natural gas> cargo tank and each motor vehicle used
  11-19  principally to transport CNG or LNG <compressed natural gas> in
  11-20  portable cylinders or containers must be registered with the
  11-21  commission as provided by commission rules.
  11-22        (b)  The commission may not impose a fee for registration
  11-23  under this section on a motor vehicle owned by a county.
  11-24        (c)  The commission, by rule, shall establish a reasonable,
  11-25  nonrefundable registration and transfer fee for each CNG or LNG
   12-1  cargo trailer, semitrailer, bobtail, and cylinder delivery unit
   12-2  registered or transferred as follows:
   12-3              (1)  The registration fee established by the commission
   12-4  shall not be less than $100, nor more than $500.
   12-5              (2)  The transfer fee established by the commission
   12-6  shall not be less than $25, nor more than $100.
   12-7        Sec. 116.073.  Safety Rules.
   12-8        The commission shall adopt safety rules relating to the
   12-9  transportation of compressed natural gas and liquefied natural gas
  12-10  in this state.
  12-11        Sec. 116.074.  Cooperation of the Department of Public
  12-12  Safety.
  12-13        The Department of Public Safety shall cooperate with the
  12-14  commission in administering and enforcing this chapter and rules of
  12-15  the commission relating to regulation of motor vehicles required to
  12-16  be registered under this subchapter.
  12-17        <Sec. 116.075.  SUSPENSION AND REVOCATION OF REGISTRATION.>
  12-18        <(a)  The commission shall notify a registrant in writing if
  12-19  it finds probable violation or noncompliance with this chapter or
  12-20  the safety rules adopted under this chapter.>
  12-21        <(b)  The notice shall specify the particular acts,
  12-22  omissions, or conduct comprising the alleged violation and shall
  12-23  designate a date by which the violation must be corrected or
  12-24  discontinued.>
  12-25        <(c)  The registrant shall report timely compliance or shall
   13-1  request extension of time for compliance if considered necessary.>
   13-2        <(d)  If a registrant objects to the complaint or
   13-3  requirements under this section, or if the commission determines
   13-4  that the registrant is not proceeding adequately to compliance,
   13-5  then, on written request of the registrant or order of the
   13-6  commission, a public hearing must be conducted.>
   13-7        <(e)  If the commission or division determines that the
   13-8  probable violation or noncompliance constitutes an immediate danger
   13-9  to the public health, safety, and welfare, it shall require the
  13-10  immediate cessation of the probable violation or noncompliance and
  13-11  proceed with a hearing.>
  13-12        <(f)  If the commission finds that the registrant has
  13-13  violated or failed to comply with or is violating or failing to
  13-14  comply with this chapter or a rule adopted under this chapter, the
  13-15  commission may suspend the registration for a definite period not
  13-16  to exceed 90 days or may revoke the registration.>
  13-17        <(g)  Any party to a proceeding before the commission is
  13-18  entitled to judicial review under the substantial evidence rule.>
  13-19        Sec. 116.075<6>.  Application of Other Laws.
  13-20        This chapter and the rules adopted under this chapter do not
  13-21  modify, amend, or repeal any laws of this state relating to the
  13-22  regulation of motor carriers.
  13-23                SUBCHAPTER E.  MISCELLANEOUS PROVISIONS
  13-24        Sec. 116.101.  Malodorants.
  13-25        Compressed natural gas and liquefied natural gas must be
   14-1  odorized as provided by Section 2, Article 6053, Revised Statutes,
   14-2  as amended.
   14-3        Sec. 116.102.  Testing Laboratories.
   14-4        The commission shall adopt rules relating to testing of CNG
   14-5  and LNG <compressed natural gas> equipment and to the
   14-6  qualifications required of the persons who are to perform those
   14-7  tests.
   14-8        Sec. 116.103.  Warning Tags.
   14-9        (a)  An employee, agent, or inspector of the commission may
  14-10  declare unsafe or dangerous for service any motor vehicle required
  14-11  to be registered under this chapter, or any CNG or LNG equipment or
  14-12  system <compressed natural gas equipment, or CNG system> that is
  14-13  defective or that does not otherwise conform to the safety
  14-14  requirements of this chapter and the rules adopted under this
  14-15  chapter and shall attach a warning tag to the motor vehicle,
  14-16  equipment, or system in a conspicuous location.
  14-17        (b)  A person may not sell, furnish, deliver, or supply
  14-18  compressed natural gas and liquefied natural gas for use or
  14-19  consumption by or through a motor vehicle or system in a public
  14-20  place or operate a motor vehicle having CNG or LNG <compressed
  14-21  natural gas> equipment to which a warning tag is attached.
  14-22        (c)  A warning tag may be removed on approval of the
  14-23  commission or by a person designated by the commission to remove
  14-24  the tag.  A warning tag may not be removed by any person who is not
  14-25  authorized to remove the tag by the commission.
   15-1        SECTION 2.  This Act takes effect on September 1, 1993.
   15-2        SECTION 3.  The importance of this legislation and the
   15-3  crowded condition of the calendars in both houses create an
   15-4  emergency and an imperative public necessity that the
   15-5  constitutional rule requiring bills to be read on three several
   15-6  days in each house be suspended, and this rule is hereby suspended.