BILL ANALYSIS

Senate Research Center	C.S.S.B. 1872
88R25242 ANG-F	By: Schwertner
	Business & Commerce
	4/25/2023
	Committee Report (Substituted)

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. C.S.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. It also provides for the investigation of the use of force majeure during a weather emergency. 

C.S.S.B. 1872 amends current law relating to 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, unless the inclusion of the confidentiality provision is requested in writing by one of the parties to the contract before the execution of the contract.

(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, unless the continuation of the confidentiality provision is requested in writing by one of the parties to the contract before the date the term of the contract expires.

SECTION 2. Amends Subchapter C, Chapter 86, Natural Resources Code, by adding Section 86.045, as follows:

Sec. 86.045. INVESTIGATION OF USE OF FORCE MAJEURE. (a) Authorizes a purchaser of natural gas that receives a notice from a person with which the purchaser contracted to receive natural gas that the person can no longer make natural gas available for delivery to the purchaser due to force majeure, during a weather emergency, to report to the Railroad Commission of Texas (RRC) that:

(1) the purchaser received the notice; and

(2) the purchaser reasonably believes that the person sold the natural gas that would have otherwise been available for delivery to the purchaser to a different purchaser at a higher price than that provided in the original purchaser's contract.

(b) Authorizes RRC, on receiving the report under Subsection (a), to investigate to determine whether a person providing natural gas service has made a sale described by Subsection (a)(2) in a manner that violates state law. Authorizes RRC, if RRC determines that the person has made a sale described by Subsection (a)(2) in a manner that violates state law, to notify the attorney general. Authorizes the attorney general to initiate a suit to recover any penalties authorized by law.

SECTION 3. Effective date: September 1, 2023. �