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A BILL TO BE ENTITLED
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AN ACT
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relating to standards and procedures for determining whether a |
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person who owns, operates, or manages a pipeline is a common |
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carrier. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 111.002, Natural Resources Code, is |
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amended to read as follows: |
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Sec. 111.002. COMMON CARRIERS UNDER CHAPTER. (a) Except as |
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provided by Subsection (b), a [A] person is a common carrier subject |
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to the provisions of this chapter if it: |
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(1) owns, operates, or manages a pipeline or any part |
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of a pipeline in the State of Texas for the transportation of crude |
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petroleum to or for the public for hire, or engages in the business |
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of transporting crude petroleum by pipeline; |
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(2) owns, operates, or manages a pipeline or any part |
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of a pipeline in the State of Texas for the transportation of crude |
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petroleum to or for the public for hire and the pipeline is |
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constructed or maintained on, over, or under a public road or |
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highway, or is an entity in favor of whom the right of eminent |
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domain exists; |
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(3) owns, operates, or manages a pipeline or any part |
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of a pipeline in the State of Texas for the transportation of crude |
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petroleum to or for the public for hire which is or may be |
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constructed, operated, or maintained across, on, along, over, or |
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under the right-of-way of a railroad, corporation, or other common |
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carrier required by law to transport crude petroleum as a common |
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carrier; |
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(4) under lease, contract of purchase, agreement to |
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buy or sell, or other agreement or arrangement of any kind, owns, |
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operates, manages, or participates in ownership, operation, or |
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management of a pipeline or part of a pipeline in the State of Texas |
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for the transportation of crude petroleum, bought of others, from |
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an oil field or place of production within this state to any |
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distributing, refining, or marketing center or reshipping point |
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within this state; |
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(5) owns, operates, or manages, wholly or partially, |
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pipelines for the transportation for hire of coal in whatever form |
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or of any mixture of substances including coal in whatever form; |
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(6) owns, operates, or manages, wholly or partially, |
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pipelines for the transportation of carbon dioxide or hydrogen in |
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whatever form to or for the public for hire, but only if such person |
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files with the commission a written acceptance of the provisions of |
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this chapter expressly agreeing that, in consideration of the |
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rights acquired, it becomes a common carrier subject to the duties |
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and obligations conferred or imposed by this chapter; or |
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(7) owns, operates, or manages a pipeline or any part |
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of a pipeline in the State of Texas for the transportation of |
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feedstock for carbon gasification, the products of carbon |
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gasification, or the derivative products of carbon gasification, in |
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whatever form, to or for the public for hire, but only if the person |
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files with the commission a written acceptance of the provisions of |
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this chapter expressly agreeing that, in consideration of the |
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rights acquired, it becomes a common carrier subject to the duties |
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and obligations conferred or imposed by this chapter. |
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(b) A person is not a common carrier subject to the |
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provisions of this chapter unless the person owns, operates, or |
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manages a pipeline for hire by another person who is not an |
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affiliate of the person who owns, operates, or manages the |
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pipeline. |
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(c) For the purposes of this section, "affiliate" means: |
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(1) a person who directly or indirectly owns or holds |
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at least five percent of the voting securities of a person who owns, |
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operates, or manages a pipeline; |
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(2) a person in a chain of successive ownership of at |
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least five percent of the voting securities of a person who owns, |
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operates, or manages a pipeline; |
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(3) a corporation that has at least five percent of its |
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voting securities owned or controlled, directly or indirectly, by a |
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person who owns, operates, or manages a pipeline; |
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(4) a corporation that has at least five percent of its |
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voting securities owned or controlled, directly or indirectly, by: |
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(A) a person who directly or indirectly owns or |
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controls at least five percent of the voting securities of a person |
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who owns, operates, or manages a pipeline; or |
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(B) a person in a chain of successive ownership |
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of at least five percent of the voting securities of a person who |
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owns, operates, or manages a pipeline; |
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(5) a person who is an officer or director of a person |
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who owns, operates, or manages a pipeline or of a corporation in a |
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chain of successive ownership of at least five percent of the voting |
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securities of a person who owns, operates, or manages a pipeline; or |
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(6) a person determined to be an affiliate under |
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Subsection (d). |
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(d) The commission may determine that a person is an |
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affiliate for purposes of this section if the commission after |
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notice and hearing finds that the person: |
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(1) actually exercises substantial influence or |
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control over the policies and actions of a person who owns, |
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operates, or manages a pipeline; |
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(2) is a person over whom a person who owns, operates, |
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or manages a pipeline exercises the control described by |
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Subdivision (1); |
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(3) is under common control with a person who owns, |
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operates, or manages a pipeline; or |
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(4) actually exercises substantial influence over the |
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policies and actions of a person who owns, operates, or manages a |
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pipeline in conjunction with one or more persons with whom the |
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person is related by ownership or blood relationship, or by action |
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in concert, that together they are affiliated with the person who |
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owns, operates, or manages the pipeline within the meaning of this |
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section even though neither person may qualify as an affiliate |
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individually. |
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(e) For purposes of Subsection (d)(3), "common control with |
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a person who owns, operates, or manages a pipeline" means the direct |
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or indirect possession of the power to direct or cause the direction |
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of the management and policies of another, without regard to |
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whether that power is established through ownership or voting of |
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securities or by any other direct or indirect means. |
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SECTION 2. Subchapter B, Chapter 111, Natural Resources |
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Code, is amended by adding Sections 111.0121, 111.0122, 111.0123, |
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and 111.0124 to read as follows: |
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Sec. 111.0121. COMMON CARRIER PERMIT AUTHORITY. The |
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commission may not issue a permit to operate a pipeline as a common |
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carrier to a person unless: |
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(1) the commission determines under Section 111.0122 |
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that the person is a common carrier under Section 111.002; and |
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(2) the commission does not receive a protest under |
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Section 111.0123 or the State Office of Administrative Hearings |
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determines following a hearing on a protest under that section that |
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the person is a common carrier under Section 111.002. |
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Sec. 111.0122. COMMON CARRIER APPLICATION AND |
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DETERMINATION. (a) An application to operate a pipeline as a common |
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carrier must be submitted in a manner satisfactory to the |
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commission and must include: |
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(1) a description of the point of origin and point of |
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destination of the pipeline; |
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(2) the names of any customers of the applicant who |
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intend to use the applicant's pipeline and an indication of whether |
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each customer is an affiliate as defined by Section 111.002(c); |
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(3) the names of the substances the applicant plans to |
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transport in the pipeline for each customer named in the |
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application; |
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(4) the volume of the substances the applicant plans |
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to transport in the pipeline for each customer named in the |
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application; |
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(5) the intended destination of the substances; and |
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(6) an affidavit signed by an officer of the applicant |
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affirming that the information in the application is accurate. |
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(b) The commission shall notify the applicant in writing of |
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its determination of whether the applicant is a common carrier |
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under Section 111.002. |
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(c) The commission shall make available to the public any |
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information submitted to the commission under this section that is |
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not specifically identified as confidential by the applicant. |
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Sec. 111.0123. NOTICE OF AND HEARING ON DETERMINATION. (a) |
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Not later than the 30th day after the date the commission notifies |
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an applicant for a permit to operate a pipeline as a common carrier |
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that the commission has determined under Section 111.0122 that the |
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applicant is a common carrier under Section 111.002, the commission |
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shall send written notice to each owner of land proposed to be |
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crossed by the pipeline of the commission's determination. |
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(b) The notice must include: |
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(1) a statement that a determination that the person |
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is a common carrier confers the power of eminent domain on the |
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person; |
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(2) a description of the point of origin and point of |
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destination of the proposed pipeline; and |
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(3) a description of the procedure for protesting the |
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determination. |
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(c) A person who receives notice under this section may file |
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a written protest of a determination with the commission not later |
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than the 30th day after the date the person receives the notice. If |
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the commission receives a protest under this subsection, the |
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commission shall refer the protest to the State Office of |
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Administrative Hearings for a hearing. A protest under this |
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section is a contested case under Chapter 2001, Government Code. |
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(d) Not later than the 30th day after the date the |
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commission refers a protest to the State Office of Administrative |
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Hearings, the office shall: |
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(1) conduct a hearing on the protest; |
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(2) make a final determination of the protest |
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following the hearing; and |
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(3) notify the commission of the office's |
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determination. |
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Sec. 111.0124. COMMON CARRIER REPORT. (a) Not later than |
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the last day of the 18th month after the date a person receives a |
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permit to operate a pipeline as a common carrier, the person shall |
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submit to the commission a report on the pipeline. The report must |
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include: |
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(1) a description of the person's efforts to offer the |
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pipeline for hire; |
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(2) the names of any customers of the person who paid |
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for the use of the pipeline after the date the person received the |
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permit, and an indication of whether each customer is an affiliate |
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as defined by Section 111.002(c); |
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(3) the names of the substances transported in the |
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pipeline; |
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(4) the volume of the substances transported in the |
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pipeline for each customer named in the report; and |
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(5) the destination of the substances transported in |
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the pipeline. |
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(b) The commission may revoke a permit issued to a person |
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who submits a report under this section if the commission |
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determines that the report indicates that the person is not a common |
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carrier under Section 111.002. |
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(c) The commission shall make available to the public any |
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information submitted to the commission under this section that is |
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not specifically identified as confidential by the permit holder. |
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SECTION 3. The changes in law made by this Act relating to a |
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permit to operate a pipeline apply only to a permit the application |
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for which is filed with the Railroad Commission of Texas on or after |
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the effective date of this Act. A permit the application for which |
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was filed before the effective date of this Act is governed by the |
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law in effect on the date the application was filed, and the former |
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law is continued in effect for that purpose. |
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SECTION 4. Not later than January 1, 2014, the Railroad |
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Commission of Texas shall adopt rules to implement the changes in |
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law made by this Act to Chapter 111, Natural Resources Code. |
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SECTION 5. This Act takes effect September 1, 2013. |