BILL ANALYSIS H.B. 4041 By: Morales, Eddie Energy Resources Committee Report (Unamended) BACKGROUND AND PURPOSE The Railroad Commission of Texas (RRC) oversees the regulation of propane distribution systems across the state and the bill author has informed the committee that existing law does not provide the RRC with explicit enforcement authority to penalize propane retailers who fail to comply with certain regulatory requirements applicable to these distribution systems. As a result, as the author has further informed the committee, there is a regulatory gap resulting in limits on the RRC's ability to hold noncompliant operators accountable, which may create financial and public safety risks if a propane retailer fails to meet its obligations. H.B. 4041 seeks to address this issue by imposing administrative penalties on distribution system retailers who violate the requirement to post a financial performance guarantee and by providing for an assessment procedure for assessing the penalty. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS H.B. 4041 amends the Utilities Code to authorize the Railroad Commission of Texas (RRC) to assess an administrative penalty against a propane distribution system retailer who violates provisions relating to standards for such retailers or a rule adopted under such provisions. The bill caps the penalty for each violation at $1,000, establishes that each day a violation continues or occurs may be considered a separate violation for the purpose of assessing a penalty, and caps the maximum penalty that may be imposed for any related series of violations at $10,000. The bill requires the RRC, in determining the amount of the penalty, to consider the following: the retailer's history of previous violations of provisions relating to retailer standards; the seriousness of the violation; and any hazard to the health or safety of the public. H.B. 4041 conditions the assessment of an administrative penalty on the retailer having been given an opportunity for hearing. The bill requires the RRC, if a hearing is held, to make findings of fact and issue a written decision as to the occurrence of the violation and the penalty amount warranted by the violation, incorporating, if appropriate, an order requiring the penalty to be paid. If a retailer fails to take advantage of the opportunity for a hearing, an administrative penalty may be assessed by the RRC after it has determined that a violation occurred and determined the penalty amount warranted by the violation. The bill requires the RRC, after assessing the administrative penalty, to issue an order requiring the penalty to be paid. The bill requires the RRC, not later than the 30th day after the date an order is issued finding that an applicable violation occurred, to inform the retailer found in violation of the amount of the penalty. H.B. 4041 subjects a retailer who does not comply with applicable statutory performance guarantee provisions to an administrative penalty under the bill's provisions. H.B. 4041 applies only to a violation that occurs on or after the bill's effective date. A violation that occurred before that date is governed by the law in effect when the violation occurred, and the former law is continued in effect for that purpose. EFFECTIVE DATE September 1, 2025.
BILL ANALYSIS
# BILL ANALYSIS
H.B. 4041
By: Morales, Eddie
Energy Resources
Committee Report (Unamended)
H.B. 4041
By: Morales, Eddie
Energy Resources
Committee Report (Unamended)
BACKGROUND AND PURPOSE The Railroad Commission of Texas (RRC) oversees the regulation of propane distribution systems across the state and the bill author has informed the committee that existing law does not provide the RRC with explicit enforcement authority to penalize propane retailers who fail to comply with certain regulatory requirements applicable to these distribution systems. As a result, as the author has further informed the committee, there is a regulatory gap resulting in limits on the RRC's ability to hold noncompliant operators accountable, which may create financial and public safety risks if a propane retailer fails to meet its obligations. H.B. 4041 seeks to address this issue by imposing administrative penalties on distribution system retailers who violate the requirement to post a financial performance guarantee and by providing for an assessment procedure for assessing the penalty.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS H.B. 4041 amends the Utilities Code to authorize the Railroad Commission of Texas (RRC) to assess an administrative penalty against a propane distribution system retailer who violates provisions relating to standards for such retailers or a rule adopted under such provisions. The bill caps the penalty for each violation at $1,000, establishes that each day a violation continues or occurs may be considered a separate violation for the purpose of assessing a penalty, and caps the maximum penalty that may be imposed for any related series of violations at $10,000. The bill requires the RRC, in determining the amount of the penalty, to consider the following: the retailer's history of previous violations of provisions relating to retailer standards; the seriousness of the violation; and any hazard to the health or safety of the public. H.B. 4041 conditions the assessment of an administrative penalty on the retailer having been given an opportunity for hearing. The bill requires the RRC, if a hearing is held, to make findings of fact and issue a written decision as to the occurrence of the violation and the penalty amount warranted by the violation, incorporating, if appropriate, an order requiring the penalty to be paid. If a retailer fails to take advantage of the opportunity for a hearing, an administrative penalty may be assessed by the RRC after it has determined that a violation occurred and determined the penalty amount warranted by the violation. The bill requires the RRC, after assessing the administrative penalty, to issue an order requiring the penalty to be paid. The bill requires the RRC, not later than the 30th day after the date an order is issued finding that an applicable violation occurred, to inform the retailer found in violation of the amount of the penalty. H.B. 4041 subjects a retailer who does not comply with applicable statutory performance guarantee provisions to an administrative penalty under the bill's provisions. H.B. 4041 applies only to a violation that occurs on or after the bill's effective date. A violation that occurred before that date is governed by the law in effect when the violation occurred, and the former law is continued in effect for that purpose.
EFFECTIVE DATE September 1, 2025.
BACKGROUND AND PURPOSE
The Railroad Commission of Texas (RRC) oversees the regulation of propane distribution systems across the state and the bill author has informed the committee that existing law does not provide the RRC with explicit enforcement authority to penalize propane retailers who fail to comply with certain regulatory requirements applicable to these distribution systems. As a result, as the author has further informed the committee, there is a regulatory gap resulting in limits on the RRC's ability to hold noncompliant operators accountable, which may create financial and public safety risks if a propane retailer fails to meet its obligations. H.B. 4041 seeks to address this issue by imposing administrative penalties on distribution system retailers who violate the requirement to post a financial performance guarantee and by providing for an assessment procedure for assessing the penalty.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 4041 amends the Utilities Code to authorize the Railroad Commission of Texas (RRC) to assess an administrative penalty against a propane distribution system retailer who violates provisions relating to standards for such retailers or a rule adopted under such provisions. The bill caps the penalty for each violation at $1,000, establishes that each day a violation continues or occurs may be considered a separate violation for the purpose of assessing a penalty, and caps the maximum penalty that may be imposed for any related series of violations at $10,000. The bill requires the RRC, in determining the amount of the penalty, to consider the following:
the retailer's history of previous violations of provisions relating to retailer standards;
the seriousness of the violation; and
any hazard to the health or safety of the public.
H.B. 4041 conditions the assessment of an administrative penalty on the retailer having been given an opportunity for hearing. The bill requires the RRC, if a hearing is held, to make findings of fact and issue a written decision as to the occurrence of the violation and the penalty amount warranted by the violation, incorporating, if appropriate, an order requiring the penalty to be paid. If a retailer fails to take advantage of the opportunity for a hearing, an administrative penalty may be assessed by the RRC after it has determined that a violation occurred and determined the penalty amount warranted by the violation. The bill requires the RRC, after assessing the administrative penalty, to issue an order requiring the penalty to be paid. The bill requires the RRC, not later than the 30th day after the date an order is issued finding that an applicable violation occurred, to inform the retailer found in violation of the amount of the penalty.
H.B. 4041 subjects a retailer who does not comply with applicable statutory performance guarantee provisions to an administrative penalty under the bill's provisions.
H.B. 4041 applies only to a violation that occurs on or after the bill's effective date. A violation that occurred before that date is governed by the law in effect when the violation occurred, and the former law is continued in effect for that purpose.
EFFECTIVE DATE
September 1, 2025.