By: Armbrister S.B. No. 949
(In the Senate - Filed March 3, 2005; March 14, 2005, read
first time and referred to Committee on Natural Resources;
April 18, 2005, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 6, Nays 1; April 18, 2005,
sent to printer.)
COMMITTEE SUBSTITUTE FOR S.B. No. 949 By: Jackson
A BILL TO BE ENTITLED
AN ACT
relating to the informal resolution of certain proceedings
conducted by the Railroad Commission of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 102, Utilities Code, is
amended by adding Section 102.0055 to read as follows:
Sec. 102.0055. INFORMAL RESOLUTION OF CONTESTED
PROCEEDINGS. (a) In this section, "contested proceeding" means a
hearing, claim, complaint, investigation, inquiry, or other
procedure for finding facts or making a decision:
(1) that involves disputed issues of law, fact, or
both law and fact; and
(2) over which the railroad commission has original
jurisdiction under this title.
(b) This section does not apply to a contested proceeding:
(1) initiated under Chapter 103;
(2) initiated under Subchapter C or G, Chapter 104; or
(3) related to the rates, services, or practices of a
gas utility that is not docketed by the railroad commission.
(c) The railroad commission by rule shall establish a
process for informal resolution of contested proceedings as
provided by this section. The railroad commission by rule shall
require all parties to a contested proceeding to participate in the
informal resolution process. An administrative hearing may not be
conducted until the informal resolution process is completed.
(d) The railroad commission shall require the parties to a
contested proceeding to participate in a mediation process and
undertake to settle all issues raised in the case by the mediation
process. The commission rules must provide for the appointment of
railroad commission staff to conduct the mediation process and must
require the process to be completed not later than the 90th day
after the date the relevant contested proceeding is docketed by the
railroad commission unless the parties to the mediation and the
railroad commission mediator agree that additional time is
warranted.
(e) The railroad commission mediator shall conduct limited
discovery as part of the mediation. The discovery is limited to
obtaining from any party to the mediation copies of the 10 most
relevant contracts for services or transactions that are similar to
the service or transaction that is the basis for the contested
proceeding and any other relevant documents or information the
railroad commission mediator determines is necessary to the
mediation. The railroad commission mediator shall provide to the
parties to the mediation the mediator's summary of relevant
information contained in the contracts without disclosing the
parties to the contracts or information that allows a party to a
contract to be identified. If the party producing the contracts or
other relevant documents requests that the contracts or documents
be reviewed at the party's offices, the railroad commission
mediator may make copies of the contracts or documents for the
mediation process and the producing party shall pay the mediator's
travel expenses in an amount not to exceed the per diem allowance
for state employees in accordance with the General Appropriations
Act.
(f) If the parties agree for the mediation to be conducted
at a location other than the offices of the railroad commission in
Austin, Texas, the parties shall share equally the cost of the
railroad commission mediator's travel expenses in an amount not to
exceed the per diem allowance for state employees in accordance
with the General Appropriations Act.
(g) If the mediation process results in an agreed settlement
of all issues, the railroad commission by order shall dismiss the
contested proceeding.
(h) If the mediation process does not result in an agreed
settlement of all issues during the period for mediation provided
by Subsection (d), the railroad commission mediator shall, before
the 11th day after the completion of the period for mediation, send
a confidential memorandum to each party to the mediation process
that states one of the following conclusions, based on the
information reviewed by the mediator:
(1) no discriminatory act has been identified; or
(2) further formal proceeding is warranted.
(i) After a memorandum is issued under Subsection (h), the
railroad commission shall:
(1) convene a settlement conference of the parties to
be held before the 31st day after the completion of the period for
mediation, if a party requests a settlement conference based on the
memorandum; or
(2) set the contested proceeding for an administrative
hearing:
(A) not later than the 61st day after the
completion of the period for mediation; or
(B) at a time considered appropriate by the
railroad commission, if the contested proceeding relates to setting
a cost of service rate under Chapter 104.
(j) If the railroad commission convenes a settlement
conference and the conference results in an agreed settlement, the
railroad commission by order shall dismiss the contested
proceeding. If a settlement conference does not result in an agreed
settlement, the railroad commission shall set the matter for an
administrative hearing. Discovery of all relevant documents and
information shall be permitted in the contested proceeding
according to the rules of the railroad commission and Chapter 2001,
Government Code.
(k) Section 2009.054, Government Code, applies to
information produced or obtained during a mediation or settlement
conference under this section.
(l) As provided by Subsection (m), at the conclusion of a
contested proceeding, the railroad commission may award all or part
of the costs of the contested proceeding actually incurred and
paid, including mediation costs, as are equitable and just.
Allowable costs include just and reasonable attorney's fees, costs
of experts, investigation costs, and costs of a party's personnel
employed in the preparation or presentation of the mediation. This
subsection does not affect the amount of litigation expenses a
party may be entitled to recover under any other law or a rule
adopted by the railroad commission. Unless authorized by railroad
commission order, costs assessed against a gas utility may not be
recovered in a gas utility rate set by the railroad commission.
(m) The railroad commission shall award costs under this
section in a contested proceeding in which one or more of the
parties makes a written settlement offer as follows:
(1) if the party that made a written settlement offer
is the party complained against and a transportation or gathering
rate set by the railroad commission's final order is equal to or
greater than the rate contained in the offer, the railroad
commission:
(A) shall issue an order requiring a party or
parties to reimburse the party complained against for that party's
reasonable costs; and
(B) may not require reimbursement under this
subdivision if the rate set in the final order is lower than the
rate contained in that party's written settlement offer;
(2) if the party that made a written settlement offer
is a person that filed a complaint relating to a transportation or
gathering rate and the rate set by the railroad commission's final
order is equal to or less than the rate contained in the offer, the
railroad commission:
(A) shall issue an order requiring a party or
parties to reimburse the complaining party for the complaining
party's reasonable costs; and
(B) may not require reimbursement under this
subdivision if the rate set in the final order is higher than the
rate contained in the complaining party's written settlement offer;
or
(3) if the contested proceeding does not involve the
setting of rates, the railroad commission may award costs to a party
as are equitable and just if that party has made a reasonable offer
to settle the contested proceeding and an opposing party has
asserted an unreasonable position in the contested proceeding.
SECTION 2. Subchapter G, Chapter 111, Natural Resources
Code, is amended by adding Section 111.228 to read as follows:
Sec. 111.228. INFORMAL RESOLUTION OF CONTESTED
PROCEEDINGS. (a) In this section, "contested proceeding" means a
hearing, claim, complaint, investigation, inquiry, or other
procedure for finding facts or making a decision:
(1) that involves disputed issues of law, fact, or
both law and fact; and
(2) over which the commission has jurisdiction under
this chapter or Chapter 117.
(b) This section does not apply to a contested proceeding
related to the rates, services, or practices of a public utility or
pipeline facility that is not docketed by the commission.
(c) The commission by rule shall establish a process for
informal resolution of contested proceedings as provided by this
section. The commission by rule shall require all parties to a
contested proceeding to participate in the informal resolution
process. An administrative hearing may not be conducted under this
chapter or Chapter 117 until the informal resolution process is
completed.
(d) The commission shall require the parties to a contested
proceeding to participate in a mediation process and undertake to
settle all issues raised in the case by the mediation process. The
commission rules must provide for the appointment of a commission
mediator to conduct the mediation process and must require the
process to be completed not later than the 90th day after the date
the relevant contested proceeding is docketed by the commission
unless the parties to the mediation and the commission mediator
agree that additional time is warranted.
(e) The commission mediator shall conduct limited discovery
as part of the mediation. The discovery is limited to obtaining
from any party to the mediation copies of the 10 most relevant
contracts for services or transactions that are similar to the
service or transaction that is the basis for the contested
proceeding and any other relevant documents or information the
commission mediator determines is necessary to the mediation. The
commission mediator shall provide to the parties to the mediation
the mediator's summary of relevant information contained in the
contracts without disclosing the parties to the contracts or
information that allows a party to a contract to be identified. If
the party producing the contracts or other relevant documents
requests that the contracts or documents be reviewed at the party's
offices, the commission mediator may make copies of the contracts
or documents for the mediation process and the producing party
shall pay the mediator's travel expenses in an amount not to exceed
the per diem allowance for state employees in accordance with the
General Appropriations Act.
(f) If the parties agree for the mediation to be conducted
at a location other than the offices of the commission in Austin,
Texas, the parties shall share equally the cost of the commission
mediator's travel expenses in an amount not to exceed the per diem
allowance for state employees in accordance with the General
Appropriations Act.
(g) If the mediation process results in an agreed settlement
of all issues, the commission by order shall dismiss the contested
proceeding.
(h) If the mediation process does not result in an agreed
settlement of all issues during the period for mediation provided
by Subsection (d), the commission mediator shall, before the 11th
day after the completion of the period for mediation, send a
confidential memorandum to each party to the mediation process that
states one of the following conclusions, based on the information
reviewed by the mediator:
(1) no discriminatory act has been identified; or
(2) further formal proceeding is warranted.
(i) After a memorandum is issued under Subsection (h), the
commission shall:
(1) convene a settlement conference of the parties to
be held before the 31st day after the completion of the period for
mediation if a party requests a settlement conference based on the
memorandum; or
(2) set the contested proceeding for an administrative
hearing under this chapter or Chapter 117 not later than the 61st
day after the completion of the period for mediation.
(j) If the commission convenes a settlement conference and
the conference results in an agreed settlement, the commission by
order shall dismiss the contested proceeding. If a settlement
conference does not result in an agreed settlement, the commission
shall set the matter for an administrative hearing under this
chapter or Chapter 117.
(k) Section 2009.054, Government Code, applies to any
information produced or obtained during a mediation or settlement
conference under this section.
(l) As provided by Subsection (m), at the conclusion of a
contested proceeding, the commission may award all or part of the
costs of the contested proceeding actually incurred and paid,
including mediation costs, as are equitable and just. Allowable
costs include just and reasonable attorney's fees, costs of
experts, investigation costs, and costs of a party's personnel
employed in the preparation or presentation of the mediation. This
subsection does not affect the amount of litigation expenses a
party may be entitled to recover under any other law or a rule
adopted by the commission. Unless authorized by commission order,
costs assessed against a gas utility may not be recovered in a gas
utility rate set by the commission.
(m) The commission shall award costs under this section in a
contested proceeding in which one or more of the parties makes a
written settlement offer as follows:
(1) if the party that made a written settlement offer
is the party complained against and a transportation or gathering
rate set by the commission's final order is equal to or greater than
the rate contained in the offer, the commission:
(A) shall issue an order requiring a party or
parties to reimburse the party complained against for that party's
reasonable costs; and
(B) may not require reimbursement under this
subdivision if the rate set in the final order is lower than the
rate contained in that party's written settlement offer;
(2) if the party that made a written settlement offer
is a person that filed a complaint relating to a transportation or
gathering rate and the rate set by the commission's final order is
equal to or less than the rate contained in the offer, the
commission:
(A) shall issue an order requiring a party or
parties to reimburse the complaining party for the complaining
party's reasonable costs; and
(B) may not require reimbursement under this
subdivision if the rate set in the final order is higher than the
rate contained in the complaining party's written settlement offer;
or
(3) if the contested proceeding does not involve the
setting of rates, the commission may award costs to a party as are
equitable and just if that party has made a reasonable offer to
settle the contested proceeding and an opposing party has asserted
an unreasonable position in the contested proceeding.
SECTION 3. This Act takes effect September 1, 2005.
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