BILL ANALYSIS

Senate Research Center	S.B. 1872
88R13277 KBB-D	By: Schwertner
	Business & Commerce
	4/11/2023
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Confidentiality provisions are regularly used to protect competitive information related to natural gas activities in Texas, and at the same time, restrict price transparency and accountability. The Texas Legislature sought to increase transparency in the natural gas pipeline industry by passing a law in 2007 providing that a confidentiality provision may not be required in a contract to which a producer is a party for the sale, transportation, or gathering of natural gas. S.B. 1872 expands current law to promote additional transparency by providing that a confidentiality provision may not be required in a contract between a pipeline owner and operator and a shipper for the sale and transport of natural gas.  

As proposed, S.B. 1872 amends current law relating to confidentiality provisions of certain contracts for the sale, transportation, or gathering of natural gas.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 81.060, Natural Resources Code, by adding Subsections (c) and (d), as follows:

(c) Prohibits a confidentiality provision from being required in a contract between the owner or operator of a pipeline and a shipper for the sale, transportation, or gathering of natural gas that is entered into on or after September 1, 2023.

(d) Provides that a confidentiality provision in a contract between the owner or operator of a pipeline and a shipper for the sale, transportation, or gathering of natural gas that was entered into before September 1, 2023, becomes unenforceable on the date the term of the contract expires.

SECTION 2. Effective date: September 1, 2023. �