By: Nichols, Huffman S.B. No. 212

Patrick

A BILL TO BE ENTITLED

AN ACT

relating to the continuation, functions, and name of the Railroad Commission of Texas; providing for the imposition of fees and the elimination of a fee.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Chapter 81, Natural Resources Code, is amended to read as follows:

CHAPTER 81. TEXAS ENERGY RESOURCES [RAILROAD] COMMISSION [OF

TEXAS]

SECTION 2. Section 81.001, Natural Resources Code, is amended to read as follows:

Sec. 81.001. DEFINITIONS. In this chapter:

(1) "Commission" means the Texas Energy Resources [Railroad] Commission [of Texas].

(2) "Commissioner" means any member of the Texas Energy Resources [Railroad] Commission [of Texas].

SECTION 3. Subchapter A, Chapter 81, Natural Resources Code, is amended by adding Section 81.003 to read as follows:

Sec. 81.003. TEXAS ENERGY RESOURCES COMMISSION. (a) The Railroad Commission of Texas is renamed the Texas Energy Resources Commission.

(b) A reference in law to:

(1) the Railroad Commission of Texas means the Texas Energy Resources Commission; and

(2) a railroad commissioner or a member of the Railroad Commission of Texas means a member of the Texas Energy Resources Commission.

SECTION 4. Section 81.01001, Natural Resources Code, is amended to read as follows:

Sec. 81.01001. SUNSET PROVISION. The Texas Energy Resources [Railroad] Commission [of Texas] is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the commission is abolished September 1, 2023 [2013].

SECTION 5. Subchapter B, Chapter 81, Natural Resources Code, is amended by adding Sections 81.010015, 81.010045, and 81.010046 to read as follows:

Sec. 81.010015. ELECTION AND TERMS OF COMMISSIONERS; VACANCIES. (a) The commission is composed of three commissioners elected at the general election for state and county officers.

(b) Commissioners serve staggered terms of six years, with the term of one commissioner expiring December 31 of each even-numbered year.

(c) The governor shall appoint a person to fill a vacancy on the commission until the next general election.

Sec. 81.010045. CERTAIN POLITICAL CONTRIBUTIONS RESTRICTED. (a) In this section, "political committee" and "political contribution" have the meanings assigned by Section 251.001, Election Code.

(b) A commissioner may not knowingly accept a political contribution given or offered with the intention that it be used in connection with a campaign for or the holding of any elective office, including the office of commissioner, except during the period:

(1) beginning 17 months before the date of the next general election at which the commissioner's office is filled; and

(2) ending on the 30th day after the date of that election.

(c) A person other than a commissioner may not knowingly accept a political contribution given or offered with the intention that it be used in connection with a campaign for the office of commissioner, except:

(1) during the period:

(A) beginning 17 months before the date of the next general election at which any commissioner's office is filled; and

(B) ending on the 30th day after the date of that election; or

(2) during the period beginning on the date a vacancy in the office of commissioner occurs and ending on the date that vacancy is filled.

(d) A commissioner may not knowingly accept a political contribution, and shall refuse a political contribution that is received, from a party in a contested case before the commission or a political committee affiliated with such a party during the period:

(1) beginning on the date notice of the hearing in the contested case is given; and

(2) ending on:

(A) the 30th day after the date the decision in the contested case is rendered; or

(B) if a request for rehearing is filed:

(i) the date the request is denied; or

(ii) the 30th day after the date the decision after rehearing is rendered.

(e) A commissioner shall return a political contribution that is received and refused under Subsection (d) not later than the 30th day after the date the commissioner received the contribution.

(f) The commission shall adopt all rules necessary to implement Subsections (d) and (e), including rules that:

(1) direct the commission to maintain a list of the contested cases before the commission and the parties to each case in order to aid the commissioners in complying with those subsections; and

(2) ensure that each notice of a hearing in a contested case that is issued by the commission or a commissioner contains information about the political contributions prohibited under Subsection (d).

Sec. 81.010046. AUTOMATIC RESIGNATION. If a person who is a member of the commission announces the person's candidacy, or in fact becomes a candidate, in any general, special, or primary election for any elective office other than the office of commissioner at any time when the unexpired term of the office then held by the person exceeds 18 months, that announcement or that candidacy constitutes an automatic resignation of the office of commissioner.

SECTION 6. Section 81.01005, Natural Resources Code, is amended to read as follows:

Sec. 81.01005. NAME AND SEAL. (a) The commissioners are known collectively as the "Texas Energy Resources [Railroad] Commission [of Texas]."

(b) The seal of the commission contains a star of five points with the words "Texas Energy Resources [Railroad] Commission [of Texas]" engraved on it.

SECTION 7. The heading to Section 81.0521, Natural Resources Code, is amended to read as follows:

Sec. 81.0521. FEE FOR APPLICATION FOR EXCEPTION TO [RAILROAD] COMMISSION RULE.

SECTION 8. Subsections (c) and (d), Section 81.0531, Natural Resources Code, are amended to read as follows:

(c) In determining the amount of the penalty, the commission shall consider the [permittee's history of previous violations, the seriousness of the violation, any hazard to the health or safety of the public, and the demonstrated good faith of the person charged. In determining the amount of the penalty for a violation of a provision of this title or a rule, order, license, permit, or certificate that relates to pipeline safety, the commission shall consider the] guidelines adopted under Subsection (d).

(d) The commission [by rule] shall adopt guidelines to be used in determining the amount of the penalty. The commission shall provide an opportunity for public input on the guidelines [for a violation of a provision of this title or a rule, order, license, permit, or certificate that relates to pipeline safety]. The guidelines must [shall] include a penalty calculation worksheet that specifies the typical penalty for certain violations, circumstances justifying enhancement of a penalty and the amount of the enhancement, and circumstances justifying a reduction in a penalty and the amount of the reduction. The guidelines must provide for different penalties for different violations based on the seriousness of the violation and any hazard to the health or safety of the public resulting from the violation. The guidelines must [shall] take into account:

(1) the permittee's history of previous violations, including the number of previous violations;

(2) the seriousness of the violation and of any pollution resulting from the violation;

(3) any hazard to the health or safety of the public;

(4) the degree of culpability;

(5) the demonstrated good faith of the person charged; [and]

(6) the number of times the permittee's certificate of compliance issued under Subchapter P, Chapter 91, has been canceled; and

(7) any other factor the commission considers relevant.

SECTION 9. Subchapter C, Chapter 81, Natural Resources Code, is amended by adding Sections 81.0645, 81.065, and 81.066 to read as follows:

Sec. 81.0645. EX PARTE COMMUNICATIONS. The commission by rule shall develop a policy to prohibit an ex parte communication between a hearings examiner and a commissioner or between a hearings examiner and a member of the technical staff of the commission who has participated in a hearing. The policy must prohibit a commissioner from communicating with a hearings examiner other than in a formal public hearing.

Sec. 81.065. NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE RESOLUTION POLICY. (a) The commission shall develop and implement a policy to encourage the use of:

(1) negotiated rulemaking procedures under Chapter 2008, Government Code, for the adoption of commission rules; and

(2) appropriate alternative dispute resolution procedures under Chapter 2009, Government Code, to assist in the resolution of internal and external disputes under the commission's jurisdiction.

(b) The commission's procedures relating to alternative dispute resolution must conform, to the extent possible, to any model guidelines issued by the State Office of Administrative Hearings for the use of alternative dispute resolution by state agencies.

(c) The commission shall:

(1) coordinate the implementation of the policy adopted under Subsection (a);

(2) provide training as needed to implement the procedures for negotiated rulemaking or alternative dispute resolution; and

(3) collect information concerning the effectiveness of those procedures.

Sec. 81.066. ENFORCEMENT POLICY. (a) The commission shall adopt an enforcement policy to guide the employees of the commission in evaluating violations of the provisions of this title that pertain to safety or the prevention or control of pollution or the provisions of a rule, order, license, permit, or certificate that pertains to safety or the prevention or control of pollution and is issued under this title.

(b) The enforcement policy adopted under this section must include:

(1) a specific process for classifying violations based on:

(A) the seriousness of any pollution resulting from the violation; and

(B) any hazard to the health or safety of the public; and

(2) standards to provide guidance to commission employees on which violations may be dismissed once the permittee comes into compliance and which violations must be forwarded for enforcement.

(c) The standards adopted under Subsection (b)(2) must require a commission employee to take into account the permittee's history of previous violations in determining whether to dismiss a violation once the permittee comes into compliance or forward the violation for enforcement.

SECTION 10. Subsection (b), Section 81.067, Natural Resources Code, is amended to read as follows:

(b) The commission shall certify to the comptroller the date on which the balance in the fund equals or exceeds $30 [$20] million. The oil-field cleanup regulatory fees on oil and gas shall not be collected or required to be paid on or after the first day of the second month following the certification, except that the comptroller shall resume collecting the fees on receipt of a commission certification that the fund has fallen below $25 [$10] million. The comptroller shall continue collecting the fees until collections are again suspended in the manner provided by this subsection.

SECTION 11. Section 81.068, Natural Resources Code, is amended to read as follows:

Sec. 81.068. PURPOSES [PURPOSE] OF OIL AND GAS REGULATION AND CLEANUP FUND. Money in the oil and gas regulation and cleanup fund may be used by the commission or its employees or agents for any purpose related to the regulation of oil and gas development, including oil and gas monitoring and inspections, oil and gas remediation, and oil and gas well plugging, alternative fuels programs under Section 81.0681, public information and services related to those activities, and administrative costs and state benefits for personnel involved in those activities.

SECTION 12. Subchapter C, Chapter 81, Natural Resources Code, is amended by adding Section 81.0681 to read as follows:

Sec. 81.0681. ALTERNATIVE FUELS PROGRAMS. (a) The commission may adopt all necessary rules relating to activities regarding the use of alternative fuels that are or have the potential to be effective in improving the air quality, energy security, or economy of this state.

(b) The commission may use the oil and gas regulation and cleanup fund to pay for activities relating to the use of alternative fuels, including direct and indirect costs relating to:

(1) researching all possible uses of liquefied petroleum gas and natural gas as alternative fuels;

(2) researching, developing, and implementing marketing, advertising, and informational programs relating to alternative fuels to make alternative fuels more understandable and readily available to consumers;

(3) developing and implementing conservation and distribution plans to minimize the frequency and severity of disruptions in the supply of alternative fuels;

(4) developing a public information plan that will provide advisory services relating to alternative fuels to consumers;

(5) developing voluntary participation plans to promote the use of alternative fuels by federal, state, and local agencies; and

(6) other functions the commission determines are necessary to add a program established by the commission for the purpose of promoting the use of liquefied petroleum gas, natural gas, or other alternative fuels.

SECTION 13. Subsections (b) and (c), Section 81.069, Natural Resources Code, are amended to read as follows:

(b) The commission shall provide to the Legislative Budget Board and post on the commission's Internet website quarterly reports [to the Legislative Budget Board] that include:

(1) the following information with respect to the period since the last report was provided as well as cumulatively:

(A) the amount of money deposited in the oil and gas regulation and cleanup fund;

(B) the amount of money spent from the fund for the purposes described by Subsection (a);

(C) the balance of the fund; and

(D) the commission's progress in meeting the quarterly performance goals established under Subsection (a) and, if the number of orphaned wells plugged with state-managed funds, abandoned sites investigated, assessed, or cleaned up with state funds, or surface locations remediated is at least five percent less than the number projected in the applicable goal established under Subsection (a), an explanation of the reason for the variance; and

(2) any additional information or data requested in writing by the Legislative Budget Board.

(c) The commission shall submit to the legislature and make available to the public, including by posting on the commission's Internet website, annually, a report that reviews the extent to which money provided under Section 81.067 has enabled the commission to better protect the environment through oil-field cleanup activities. The report must include:

(1) the performance goals established under Subsection (a) for that state fiscal year, the commission's progress in meeting those performance goals, and, if the number of orphaned wells plugged with state-managed funds, abandoned sites investigated, assessed, or cleaned up with state funds, or surface locations remediated is at least five percent less than the number projected in the applicable goal established under Subsection (a), an explanation of the reason for the variance;

(2) the number of orphaned wells plugged with state-managed funds, by region;

(3) the number of wells orphaned, by region;

(4) the number of inactive wells not currently in compliance with commission rules, by region;

(5) the status of enforcement proceedings for all wells in violation of commission rules and the period during which the wells have been in violation, by region in which the wells are located;

(6) the number of surface locations remediated, by region;

(7) a detailed accounting of expenditures of money in the fund for oil-field cleanup activities, including expenditures for plugging of orphaned wells, investigation, assessment, and cleaning up of abandoned sites, and remediation of surface locations;

(8) the method by which the commission sets priorities by which it determines the order in which orphaned wells are plugged;

(9) a projection of the amount of money needed for the next biennium for plugging orphaned wells, investigating, assessing, and cleaning up abandoned sites, and remediating surface locations; and

(10) the number of sites successfully remediated under the voluntary cleanup program under Subchapter O, Chapter 91, by region.

SECTION 14. Subchapter C, Chapter 81, Natural Resources Code, is amended by adding Section 81.071 to read as follows:

Sec. 81.071. PIPELINE SAFETY AND REGULATORY FEES. (a) The commission by rule may establish pipeline safety and regulatory fees to be assessed for permits or registrations for pipelines under the jurisdiction of the commission's pipeline safety and regulatory program. The fees must be in amounts that in the aggregate are sufficient to support all pipeline safety and regulatory program costs, including:

(1) permitting or registration costs;

(2) administrative costs; and

(3) costs of employee salaries and benefits.

(b) The commission by rule must establish the method or methods by which the fees will be calculated and assessed so that fee amounts will reflect the time spent and costs incurred to perform the regulatory work associated with permitting or registering pipelines, the effects of required fees on operators of all sizes, and other factors the commission determines are important to the fair imposition of the fees. The commission may base the fees on any factor the commission considers necessary to efficiently and fairly recover the pipeline safety and regulatory program's costs, including:

(1) the length of the pipeline;

(2) the number of new permits, permit renewals, or permit amendments; or

(3) the number of pipeline systems.

(c) The commission by rule may establish a reasonable late payment penalty for a fee charged under this section.

(d) The authority provided by this section is in addition to the authority provided by Section 121.211, Utilities Code, and the commission shall consider any fees assessed under that section in establishing the fees to be assessed under this section.

SECTION 15. Subsection (e), Section 91.1135, Natural Resources Code, is transferred to Section 81.069, Natural Resources Code, redesignated as Subsection (d), Section 81.069, Natural Resources Code, and amended to read as follows:

(d) [(e)] The commission shall provide to the Legislative Budget Board and post on the commission's Internet website quarterly reports [to the committee and the Legislative Budget Board] that include[:

[(1)] the following information with respect to the period since the last report was provided as well as cumulatively:

(1) [(A)] the amount of money deposited in the oil and gas regulation and [oil-field] cleanup fund;

(2) [(B)] the amount of money spent from the fund;

(3) [(C)] the balance of the fund;

(4) [(D)] the number of wells plugged with money from the fund;

(5) [(E)] the number of sites remediated with money from the fund; and

(6) [(F)] the number of wells abandoned[; and

[(2) any additional information or data requested in writing by the committee].

SECTION 16. Subchapter B, Chapter 102, Natural Resources Code, is amended by adding Section 102.0165 to read as follows:

Sec. 102.0165. LOCATION OF HEARING. (a) At the request of an interested party and with the consent of each interested party, the commission may hold the hearing on the application in person or by telephone at a location in the vicinity of the proposed unit.

(b) The commission may contract with another state agency to hold hearings on applications for pooling of interests into a unit under the provisions of this chapter in person or by telephone at field offices of that agency.

SECTION 17. Subsection (a), Section 117.012, Natural Resources Code, is amended to read as follows:

(a) The commission shall adopt rules that include:

(1) safety standards for and practices applicable to the intrastate transportation of hazardous liquids or carbon dioxide by pipeline and intrastate hazardous liquid or carbon dioxide pipeline facilities; and

(2) [, including] safety standards related to the prevention of damage to interstate and intrastate hazardous liquid or carbon dioxide pipeline facilities [such a facility] resulting from the movement of earth by a person in the vicinity of such a [the] facility, other than movement by tillage that does not exceed a depth of 16 inches.

SECTION 18. Subsection (c), Section 52.092, Election Code, is amended to read as follows:

(c) Statewide offices of the state government shall be listed in the following order:

(1) governor;

(2) lieutenant governor;

(3) attorney general;

(4) comptroller of public accounts;

(5) commissioner of the General Land Office;

(6) commissioner of agriculture;

(7) energy resources [railroad] commissioner;

(8) chief justice, supreme court;

(9) justice, supreme court;

(10) presiding judge, court of criminal appeals;

(11) judge, court of criminal appeals.

SECTION 19. Section 756.126, Health and Safety Code, is amended to read as follows:

Sec. 756.126. SAFETY STANDARDS AND BEST PRACTICES. The Texas Energy Resources [Railroad] Commission [of Texas] shall adopt and enforce safety standards and best practices, including those described by 49 U.S.C. Section 6105 et seq., relating to the prevention of damage by a person to a facility, including an interstate or intrastate pipeline facility, under the jurisdiction of the commission.

SECTION 20. Subsection (a), Section 121.201, Utilities Code, is amended to read as follows:

(a) The railroad commission may:

(1) by rule prescribe or adopt safety standards for the transportation of gas and for gas pipeline facilities, including safety standards related to the prevention of damage to an interstate or intrastate gas pipeline [such a] facility resulting from the movement of earth by a person in the vicinity of the facility, other than movement by tillage that does not exceed a depth of 16 inches;

(2) by rule require an operator that does not file operator organization information under Section 91.142, Natural Resources Code, to provide the information to the commission in the form of an application;

(3) by rule require record maintenance and reports;

(4) inspect records and facilities to determine compliance with safety standards prescribed or adopted under Subdivision (1);

(5) make certifications and reports from time to time;

(6) seek designation by the United States secretary of transportation as an agent to conduct safety inspections of interstate gas pipeline facilities located in this state; and

(7) by rule take any other requisite action in accordance with 49 U.S.C. Section 60101 et seq., or a succeeding law.

SECTION 21. The following provisions of the Natural Resources Code are repealed:

(1) the heading to Section 91.1135;

(2) Subsections (a), (b), (c), (d), (f), and (g), Section 91.1135; and

(3) Subchapter I, Chapter 113.

SECTION 22. (a) On the effective date of this Act:

(1) the alternative fuels research and education fund is abolished;

(2) any money remaining in the alternative fuels research and education fund is transferred to the undedicated portion of the general revenue fund;

(3) any claim against the alternative fuels research and education fund is transferred to the undedicated portion of the general revenue fund; and

(4) any amount required to be deposited to the credit of the alternative fuels research and education fund shall be deposited to the credit of the undedicated portion of the general revenue fund.

(b) Any money transferred from the alternative fuels research and education fund to the undedicated portion of the general revenue fund that was deposited in the alternative fuels research and education fund as a gift, grant, or other form of assistance under former Subchapter I, Chapter 113, Natural Resources Code, and is encumbered by the specific terms of the gift, grant, or other form of assistance may be spent only in accordance with the terms of the gift, grant, or other form of assistance. Subchapter I, Chapter 113, Natural Resources Code, is continued in effect for the limited purpose of administering this subsection.

SECTION 23. On the effective date of this Act, the name of the Railroad Commission of Texas is changed to the Texas Energy Resources Commission. The change of the agency's name does not affect:

(1) the agency's powers, duties, rights, or obligations;

(2) the agency's personnel, equipment, data, documents, facilities, contracts, items, other property, appropriations, rules, or decisions;

(3) a proceeding of or involving the agency under the name of the Railroad Commission of Texas; or

(4) the terms of the chairman or other members of the governing body of the agency.

SECTION 24. This Act takes effect September 1, 2013.