83R5323 JXC-D
By: Davis S.B. No. 1625
A BILL TO BE ENTITLED
AN ACT
relating to standards and procedures for determining whether a
person who owns, operates, or manages a pipeline is a common
carrier.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 111.002, Natural Resources Code, is
amended to read as follows:
Sec. 111.002. COMMON CARRIERS UNDER CHAPTER. (a) Except as
provided by Subsection (b), a [A] person is a common carrier subject
to the provisions of this chapter if it:
(1) owns, operates, or manages a pipeline or any part
of a pipeline in the State of Texas for the transportation of crude
petroleum to or for the public for hire, or engages in the business
of transporting crude petroleum by pipeline;
(2) owns, operates, or manages a pipeline or any part
of a pipeline in the State of Texas for the transportation of crude
petroleum to or for the public for hire and the pipeline is
constructed or maintained on, over, or under a public road or
highway, or is an entity in favor of whom the right of eminent
domain exists;
(3) owns, operates, or manages a pipeline or any part
of a pipeline in the State of Texas for the transportation of crude
petroleum to or for the public for hire which is or may be
constructed, operated, or maintained across, on, along, over, or
under the right-of-way of a railroad, corporation, or other common
carrier required by law to transport crude petroleum as a common
carrier;
(4) under lease, contract of purchase, agreement to
buy or sell, or other agreement or arrangement of any kind, owns,
operates, manages, or participates in ownership, operation, or
management of a pipeline or part of a pipeline in the State of Texas
for the transportation of crude petroleum, bought of others, from
an oil field or place of production within this state to any
distributing, refining, or marketing center or reshipping point
within this state;
(5) owns, operates, or manages, wholly or partially,
pipelines for the transportation for hire of coal in whatever form
or of any mixture of substances including coal in whatever form;
(6) owns, operates, or manages, wholly or partially,
pipelines for the transportation of carbon dioxide or hydrogen in
whatever form to or for the public for hire, but only if such person
files with the commission a written acceptance of the provisions of
this chapter expressly agreeing that, in consideration of the
rights acquired, it becomes a common carrier subject to the duties
and obligations conferred or imposed by this chapter; or
(7) owns, operates, or manages a pipeline or any part
of a pipeline in the State of Texas for the transportation of
feedstock for carbon gasification, the products of carbon
gasification, or the derivative products of carbon gasification, in
whatever form, to or for the public for hire, but only if the person
files with the commission a written acceptance of the provisions of
this chapter expressly agreeing that, in consideration of the
rights acquired, it becomes a common carrier subject to the duties
and obligations conferred or imposed by this chapter.
(b) A person is not a common carrier subject to the
provisions of this chapter unless the person owns, operates, or
manages a pipeline for hire by another person who is not an
affiliate of the person who owns, operates, or manages the
pipeline.
(c) For the purposes of this section, "affiliate" means:
(1) a person who directly or indirectly owns or holds
at least five percent of the voting securities of a person who owns,
operates, or manages a pipeline;
(2) a person in a chain of successive ownership of at
least five percent of the voting securities of a person who owns,
operates, or manages a pipeline;
(3) a corporation that has at least five percent of its
voting securities owned or controlled, directly or indirectly, by a
person who owns, operates, or manages a pipeline;
(4) a corporation that has at least five percent of its
voting securities owned or controlled, directly or indirectly, by:
(A) a person who directly or indirectly owns or
controls at least five percent of the voting securities of a person
who owns, operates, or manages a pipeline; or
(B) a person in a chain of successive ownership
of at least five percent of the voting securities of a person who
owns, operates, or manages a pipeline;
(5) a person who is an officer or director of a person
who owns, operates, or manages a pipeline or of a corporation in a
chain of successive ownership of at least five percent of the voting
securities of a person who owns, operates, or manages a pipeline; or
(6) a person determined to be an affiliate under
Subsection (d).
(d) The commission may determine that a person is an
affiliate for purposes of this section if the commission after
notice and hearing finds that the person:
(1) actually exercises substantial influence or
control over the policies and actions of a person who owns,
operates, or manages a pipeline;
(2) is a person over whom a person who owns, operates,
or manages a pipeline exercises the control described by
Subdivision (1);
(3) is under common control with a person who owns,
operates, or manages a pipeline; or
(4) actually exercises substantial influence over the
policies and actions of a person who owns, operates, or manages a
pipeline in conjunction with one or more persons with whom the
person is related by ownership or blood relationship, or by action
in concert, that together they are affiliated with the person who
owns, operates, or manages the pipeline within the meaning of this
section even though neither person may qualify as an affiliate
individually.
(e) For purposes of Subsection (d)(3), "common control with
a person who owns, operates, or manages a pipeline" means the direct
or indirect possession of the power to direct or cause the direction
of the management and policies of another, without regard to
whether that power is established through ownership or voting of
securities or by any other direct or indirect means.
SECTION 2. Subchapter B, Chapter 111, Natural Resources
Code, is amended by adding Sections 111.0121, 111.0122, 111.0123,
and 111.0124 to read as follows:
Sec. 111.0121. COMMON CARRIER PERMIT AUTHORITY. The
commission may not issue a permit to operate a pipeline as a common
carrier to a person unless:
(1) the commission determines under Section 111.0122
that the person is a common carrier under Section 111.002; and
(2) the commission does not receive a protest under
Section 111.0123 or the State Office of Administrative Hearings
determines following a hearing on a protest under that section that
the person is a common carrier under Section 111.002.
Sec. 111.0122. COMMON CARRIER APPLICATION AND
DETERMINATION. (a) An application to operate a pipeline as a common
carrier must be submitted in a manner satisfactory to the
commission and must include:
(1) a description of the point of origin and point of
destination of the pipeline;
(2) the names of any customers of the applicant who
intend to use the applicant's pipeline and an indication of whether
each customer is an affiliate as defined by Section 111.002(c);
(3) the names of the substances the applicant plans to
transport in the pipeline for each customer named in the
application;
(4) the volume of the substances the applicant plans
to transport in the pipeline for each customer named in the
application;
(5) the intended destination of the substances; and
(6) an affidavit signed by an officer of the applicant
affirming that the information in the application is accurate.
(b) The commission shall notify the applicant in writing of
its determination of whether the applicant is a common carrier
under Section 111.002.
(c) The commission shall make available to the public any
information submitted to the commission under this section that is
not specifically identified as confidential by the applicant.
Sec. 111.0123. NOTICE OF AND HEARING ON DETERMINATION. (a)
Not later than the 30th day after the date the commission notifies
an applicant for a permit to operate a pipeline as a common carrier
that the commission has determined under Section 111.0122 that the
applicant is a common carrier under Section 111.002, the commission
shall send written notice to each owner of land proposed to be
crossed by the pipeline of the commission's determination.
(b) The notice must include:
(1) a statement that a determination that the person
is a common carrier confers the power of eminent domain on the
person;
(2) a description of the point of origin and point of
destination of the proposed pipeline; and
(3) a description of the procedure for protesting the
determination.
(c) A person who receives notice under this section may file
a written protest of a determination with the commission not later
than the 30th day after the date the person receives the notice. If
the commission receives a protest under this subsection, the
commission shall refer the protest to the State Office of
Administrative Hearings for a hearing. A protest under this
section is a contested case under Chapter 2001, Government Code.
(d) Not later than the 30th day after the date the
commission refers a protest to the State Office of Administrative
Hearings, the office shall:
(1) conduct a hearing on the protest;
(2) make a final determination of the protest
following the hearing; and
(3) notify the commission of the office's
determination.
Sec. 111.0124. COMMON CARRIER REPORT. (a) Not later than
the last day of the 18th month after the date a person receives a
permit to operate a pipeline as a common carrier, the person shall
submit to the commission a report on the pipeline. The report must
include:
(1) a description of the person's efforts to offer the
pipeline for hire;
(2) the names of any customers of the person who paid
for the use of the pipeline after the date the person received the
permit, and an indication of whether each customer is an affiliate
as defined by Section 111.002(c);
(3) the names of the substances transported in the
pipeline;
(4) the volume of the substances transported in the
pipeline for each customer named in the report; and
(5) the destination of the substances transported in
the pipeline.
(b) The commission may revoke a permit issued to a person
who submits a report under this section if the commission
determines that the report indicates that the person is not a common
carrier under Section 111.002.
(c) The commission shall make available to the public any
information submitted to the commission under this section that is
not specifically identified as confidential by the permit holder.
SECTION 3. The changes in law made by this Act relating to a
permit to operate a pipeline apply only to a permit the application
for which is filed with the Railroad Commission of Texas on or after
the effective date of this Act. A permit the application for which
was filed before the effective date of this Act is governed by the
law in effect on the date the application was filed, and the former
law is continued in effect for that purpose.
SECTION 4. Not later than January 1, 2014, the Railroad
Commission of Texas shall adopt rules to implement the changes in
law made by this Act to Chapter 111, Natural Resources Code.
SECTION 5. This Act takes effect September 1, 2013.