88R8155 JXC-F     By: Schwertner S.B. No. 1874       A BILL TO BE ENTITLED   AN ACT   relating to the operation of certain infrastructure during a   weather emergency; authorizing administrative penalties.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 81.073(b), Natural Resources Code, as   added by Chapter 426 (S.B. 3), Acts of the 87th Legislature, Regular   Session, 2021, is amended to read as follows:          (b)  The rules must:                (1)  establish criteria for designating persons who own   or operate a facility under the jurisdiction of the commission   under Section 81.051(a) or engage in an activity under the   jurisdiction of the commission under Section 81.051(a) who must   provide critical customer and critical gas supply information, as   defined by the commission, to the entities described by Section   38.074(b)(1), Utilities Code; and                (2)  consider essential operational elements when   defining critical customer designations and critical gas supply   information for the purposes of Subdivision (1), including:                      (A)  natural gas production, processing, and   transportation and[,] related produced water handling and   disposal;                      (B)  the net load of electricity required for a   facility;                      (C)  the ability of an operator to reduce demand   from a facility in response to an instruction issued by an   independent system operator, as defined by Section 31.002,   Utilities Code; [facilities,] and                      (D)  the delivery of natural gas to generators of   electric energy[; and                [(3)  require that only facilities and entities that   are prepared to operate during a weather emergency may be   designated as a critical customer under this section].          SECTION 2.  Sections 86.044(d), (f), and (g), Natural   Resources Code, are amended to read as follows:          (d)  The commission shall:                (1)  inspect gas supply chain facilities for compliance   with rules adopted under Subsection (c); and                (2)  provide the owner of a facility described by   Subdivision (1) with a reasonable period of time in which to remedy   any violation the commission discovers in an inspection[; and                [(3)  report to the attorney general any violation that   is not remedied in a reasonable period of time].          (f)  The commission by rule shall require an operator of a   gas supply chain facility that experiences repeated   weather-related or major weather-related forced interruptions of   production to:                (1)  [contract with a person who is not an employee of   the operator to] assess the operator's weatherization plans,   procedures, and operations and propose remedial measures; and                (2)  submit the assessment and remedial measures to the   commission.          (g)  The commission may require an operator of a gas supply   chain facility to implement remedial measures [appropriate   recommendations included in an assessment] submitted to the   commission under Subsection (f) if the commission determines the   remedial measures are necessary for compliance with rules adopted   under Subsection (c).          SECTION 3.  Section 86.223, Natural Resources Code, is   amended to read as follows:          Sec. 86.223.  SUIT FOR PENALTY. The penalty authorized by   Section 86.222 may be recovered with the cost of suit by the State   of Texas through the attorney general or the county or district   attorney when joined by the attorney general in a civil action   instituted in Travis County, in the county in which the violation   occurred, or in the county of residence of the defendant.          SECTION 4.  Subchapter G, Chapter 86, Natural Resources   Code, is amended by adding Section 86.2235, and a heading is added   to that section to read as follows:          Sec. 86.2235.  WEATHER EMERGENCY PREPAREDNESS PENALTIES.          SECTION 5.  Sections 86.222(a-1), (c), and (d), Natural   Resources Code, are transferred to Section 86.2235, Natural   Resources Code, as added by this Act, redesignated as Sections   86.2235(a), (b), (c), and (d), Natural Resources Code, and amended   to read as follows:          (a)  Section 86.222 does not apply to a violation   [(a-1)  Notwithstanding Subsection (a), a person who violates a   provision] of a rule adopted under Section 86.044.  If the   commission determines that a person has violated a rule adopted   under Section 86.044, the commission shall assess a penalty against   the person in the manner provided by Sections 81.0532-81.0534 for   assessing an administrative penalty under Section 81.0531.          (b)  The penalty may not exceed [is liable for a penalty of   not more than] $1,000,000 for each offense.  Each day a violation   occurs constitutes a separate offense.          (c)  The commission by rule shall establish a classification   system to be used [by a court under this subchapter] for violations   of rules adopted under Section 86.044 that includes a range of   penalties that may be recovered for each class of violation based   on:                (1)  the seriousness of the violation, including:                      (A)  the nature, circumstances, extent, and   gravity of a prohibited act; and                      (B)  the hazard or potential hazard created to the   health, safety, or economic welfare of the public;                (2)  the history of previous violations;                (3)  the amount necessary to deter future violations;                (4)  efforts to correct the violation; and                (5)  any other matter that justice may require.          (d)  The classification system established under Subsection   (c) shall provide that a penalty in an amount that exceeds $5,000   may be recovered only if the violation is included in the highest   class of violations in the classification system.          SECTION 6.  Section 86.2235, Natural Resources Code, as   added by this Act, is amended by adding Subsection (e) to read as   follows:          (e)  Notwithstanding Subsection (a), the commission may not   assess a penalty against an operator of a facility for a violation   of a rule adopted under Section 86.044 if the commission determines   that the operator made reasonably prudent efforts to comply with   the rule, regardless of whether the facility failed to operate   during a weather emergency.          SECTION 7.  Section 38.202(f), Utilities Code, is amended to   read as follows:          (f)  Information written, produced, collected, assembled, or   maintained under law or in connection with the transaction of   official business by the committee or an officer or employee of the   committee is subject to Section 552.008, Government Code, including   information that is confidential under Section 418.181, Government   Code.  This subsection does not apply to the physical locations of   critical facilities, maps created under this subchapter, or   proprietary information created or gathered during the mapping   process.          SECTION 8.  Section 38.203(d), Utilities Code, is amended to   read as follows:          (d)  Except as provided by Section 38.202(f):                (1)  the [The] information maintained in the database   is confidential under Section 418.181, Government Code, and not   subject to disclosure under Chapter 552, Government Code; and                (2)  portions of documents in the possession of the   committee that are confidential under Section 418.181, Government   Code, are not subject to disclosure under Chapter 552, Government   Code.          SECTION 9.  Subchapter F, Chapter 38, Utilities Code, is   amended by adding Section 38.205 to read as follows:          Sec. 38.205.  NOTICE AND HEARING BEFORE ADDING NATURAL GAS   FACILITY TO MAP. (a)  The committee may include on the electricity   supply chain map a gas supply chain facility, as defined by Section   86.044, Natural Resources Code, or a gas pipeline facility   described by Section 121.2015, only after the committee provides   the operator of the facility with notice and an opportunity for a   contested case hearing in the manner provided by Chapter 2001,   Government Code.  If the operator requests a hearing, the committee   shall refer the matter to the Railroad Commission of Texas for the   hearing.           (b)  The Railroad Commission of Texas shall hold the   contested case hearing and issue a decision in writing in   accordance with Chapter 2001, Government Code, as to whether the   facility may be included on the electricity supply chain map based   on applicable rules and provisions of this code and the Natural   Resources Code.          (c)  The committee shall comply with the decision issued by   the Railroad Commission of Texas.          SECTION 10.  The following provisions are repealed:                (1)  Section 86.044(h), Natural Resources Code; and                (2)  Section 186.008, Utilities Code.          SECTION 11.  Section 38.205, Utilities Code, as added by   this Act, applies only to the addition of a gas supply chain   facility or gas pipeline facility to the electricity supply chain   map under Subchapter F, Chapter 38, Utilities Code, on or after the   effective date of this Act.          SECTION 12.  This Act takes effect September 1, 2023.