TITLE 16.ECONOMIC REGULATION

Part 1. RAILROAD COMMISSION OF TEXAS

Chapter 3. OIL AND GAS DIVISION

16 TAC §3.20

The Railroad Commission of Texas (Commission) proposes amendments to §3.20 (commonly called Statewide Rule 20), relating to Notification of Fire Breaks, Leaks, or Blow-outs to add language specifying the circumstances under which operators must notify the Commission of gas releases.

The Commission proposes to revise §3.20(a)(1) to add the phrases, "Except as otherwise provided in this section," and "release into the environment" to accommodate subsequent new provisions in paragraph (2) that state when operators are required to report gas released into the environment. The Commission also proposes to strike the word "telegraph" because it is no longer an acceptable method of initial notification. The Commission considered electronic mail (e-mail) and facsimile transmission (fax notification), but the initial notification is supposed to be as immediate as possible. Commission personnel would not receive an e-mail or fax after hours or if out of the office for an extended period, but a district employee is always on call to be available by telephone. The Commission therefore finds that the most effective method for the operator to provide the Commission initial notification of an emergency such as a fire, break, leak, blowout or release is a telephone call to the district office. Revisions to subsection (a) also include substituting "written report" for "letter" to make the rule consistent with Commission practice.

The Commission proposes to add new §3.20(a)(2) to state that operators are required to give immediate notice of gas leaks or releases of greater than 100 mcf. The Commission proposes to add new §3.20(a)(3) to state that operators are required to give immediate notice of gas leaks or releases of 100 mcf or less only if the leak or release is reportable under §3.32, relating to Gas Well Gas and Casinghead Gas Shall Be Utilized for Legal Purposes, or §3.36, relating to Oil, Gas or Geothermal Resource Operation in Hydrogen Sulfide Areas, causes or contributes to fire, explosion, or injury, or threatens the safety of persons or property.

The Commission proposes to re-designate current subsection (a)(2) as subsection (a)(4), and to substitute the term "written report" for "letter" in places where the rule currently uses the term "letter," and to add the modifier "written" in places where the rule currently uses the term "report" to make the rule consistent with Commission practice.

The Commission proposes to change "report" to "written report" in subsection (b) but does not propose any other changes to subsections (b) and (c).

The Commission proposes these amendments to §3.20 to conform to long-standing interpretation and practice of the Commission with respect to its provisions. The Commission has interpreted the rule to apply to emergency situations which pose an imminent threat to life, health, property, or the environment. The Commission finds that some gas releases do not rise to the level of emergency as contemplated by this rule. The Commission therefore proposes these amendments to establish a category of gas releases that do require the operator to notify the district office.

Leslie Savage, Oil and Gas Division planner, has determined that for each year of the first five years the amendments as proposed will be in effect, there will be no fiscal implications to state or local governments as a result of enforcing or administering the amendments because the amendments conform the rule to the actual practice of the Commission based on its interpretation of the rule over the years.

There will be no cost of compliance with the proposed amendments for the individual, small business, or micro-business operator because the amendments conform the rule text to the actual practice of the Commission based on its interpretation and application of the rule over the years.

David Cooney, Assistant Director, Environmental Section, Office of General Counsel, has determined that for each year of the first five years that the amendments will be in effect, there will be a public benefit in that the process for notifying the Commission of gas releases will be clarified.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us, and should refer to Oil and Gas Docket No. 20-0234022 . The Commission will accept comments for 60 days after publication in the Texas Register . The Commission encourages all interested persons to submit comments no later than the deadline. The Commission cannot guarantee that comments submitted after the deadline will be considered. For further information, call Mr. Cooney at (512) 463-6977. The status of Commission rulemakings in progress is available at www.rrc.state.tx.us/rules/proposed.html.

The Commission proposes the amendments to §3.20 pursuant to Texas Natural Resources Code, §81.051 and §81.052, which provide the Commission with jurisdiction over all persons owning or engaged in drilling or operating oil or gas wells and persons owning or operating pipelines in Texas and the authority to adopt all necessary rules for governing and regulating persons and their operations under Commission jurisdiction; Texas Natural Resources Code §§85.042, 85.202, 86.041, and 86.042, which require the Commission to adopt rules to control waste of oil and gas and for the prevention of operations in the field dangerous to life or property; and Texas Water Code, §26.131, which provides the Commission with the authority to abate and prevent pollution of surface and subsurface water.

Cross-reference to statute: Texas Natural Resources Code, §§81.051, 81.052, 85.042, 85.202, 86.041, and 86.042; Texas Water Code, §26.131.

Issued in Austin, Texas, on March 11, 2003.

§3.20.Notification of Fire Breaks, Leaks, or Blow-outs

(a) General requirements.

(1) Except as otherwise provided in this section, operators [ Operators ] shall give immediate notice of a fire, leak, spill, break, or release into the environment [ break ] to the appropriate commission district office by telephone [ or telegraph ]. Such notice shall be followed by a written report [ letter ] giving the full description of the event, including [ and it shall include ] the volume of crude oil, gas, geothermal resources, other well liquids, or associated products lost.

(2) Operators shall give immediate notice of gas leaks or releases of greater than 100 mcf.

(3) Operators shall give immediate notice of gas leaks or releases of 100 mcf or less only if the leak or release:

(A) is reportable under §§3.32 of this chapter (relating to Gas Well Gas and Casinghead Gas Shall Be Utilized for Legal Purposes), or 3.36 of this chapter (relating to Oil, Gas or Geothermal Resource Operation in Hydrogen Sulfide Areas);

(B) causes or contributes to fire, explosion, or injury; or

(C) threatens the safety of persons or property.

(4) [ (2) ] All operators of any oil wells, gas wells, geothermal wells, pipelines receiving tanks, storage tanks, or receiving and storage receptacles into which crude oil, gas, or geothermal resources are produced, received, stored, or through which oil, gas, or geothermal resources are piped or transported, shall immediately notify the commission by written report [ letter ], giving full details concerning all fires which occur at oil wells, gas wells, geothermal wells, tanks, or receptacles owned, operated, or controlled by them or on their property, and all such persons shall immediately report in writing all tanks or receptacles struck by lightning and any other fire which destroys crude oil, natural gas, or geothermal resources, or any of them, and shall immediately report in writing [ by letter ] any breaks or leaks in or from tanks or other receptacles and pipelines from which oil, gas, or geothermal resources are escaping or have escaped. In all such reports of fires, breaks, leaks, or escapes, or other accidents of this nature, the location of the well, tank, receptacle, or line break shall be given by county, survey, and property, so that the exact location thereof can be readily located on the ground. Such report shall likewise specify what steps have been taken or are in progress to remedy the situation reported and shall detail the quantity (estimated, if no accurate measurement can be obtained, in which case the report shall show that the same is an estimate) of oil, gas, or geothermal resources, lost, destroyed, or permitted to escape. In case any tank or receptacle is permitted to run over, the escape thus occurring shall be reported as in the case of a leak. (Reference Order Number 20-60,399, effective 9-24-70.)

(b) The written report [ hereby ] required by this section as to oil losses shall be necessary only in case such oil loss exceeds five barrels in the aggregate.

(c) Any operation with respect to the pickup of pipeline break oil shall be done subject to the following provisions. The provisions hereafter set out shall not apply to the picking up and the returning of pipeline break oil to the pipeline from which it escaped either at the place of the pipeline break, or at the nearest pipeline station to the break where facilities are available to return such oil to the pipeline; provided, that such operations are conducted by the pipeline operator at the time of the pipeline break and its repair; provided, further, that such authority as is herein granted for the picking up of pipeline break oil shall not relieve the operator of such pipeline of notifying the commission of such pipeline break, and the furnishing to the commission of the information required by the provisions set out in subsection (a) of this section for reporting such pipeline breaks.

(1) Any person desiring to pick up, reclaim, or salvage pipeline break oil, other than as provided in this subsection, shall obtain in writing a permit before commencing operations. All applications for permits to pick up, reclaim, or salvage such oil shall be made in writing under oath to the district office.

(2) Applications to pick up, reclaim, or salvage pipeline break oil shall state the location of such oil, the location of the break in the pipeline causing the leakage of such oil, the name of the pipeline, the owner thereof, and the date of the break.

(3) Pipeline break oil that is not returned to the pipeline from which it escaped shall be offered to the applicant to reclaim by the operator of such pipeline but shall be charged to such pipeline stock account.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 11, 2003.

TRD-200301682

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Proposed date of adoption: May 27, 2003

For further information, please call: (512) 475-1295


16 TAC §3.107

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Railroad Commission of Texas or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Railroad Commission of Texas (Commission) proposes the repeal of §3.107 (relating to Texas Experimental Research and Recovery Activity (TERRA)) because the statute authorizing this program, Chapter 93 of the Texas Natural Resources Code, no longer exists. This chapter was repealed by Section 76, Senate Bill 310, 77th Legislature (2001).

The Commission simultaneously proposes the review of §3.107, in accordance with Tex. Gov't Code, §2001.039. The notice of proposed review was filed with the Texas Register concurrently with this proposed repeal. As stated in the concurrent rule review notice, the agency's reason for adopting this rule no longer exists.

Mary Ross McDonald, Deputy General Counsel, Office of General Counsel, has determined that, for each year of the first five years the repeal is proposed to be in effect, there will be no fiscal implications for state or local governments as a result of the repeal of §3.107.

Ms. McDonald has also determined that, for each year of the first five years the repeal is proposed to be in effect, the public benefit anticipated as a result of the repeal of §3.107 will be a more current version of the Commission's rules because this unnecessary and unauthorized rule will be removed.

There is no anticipated economic cost for individuals, small businesses, or micro-businesses as a result of the proposed repeal of §3.107.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission will accept comments for 30 days after publication in the Texas Register and should refer to Oil and Gas Docket No. 20-0216753. For further information, call Leslie Savage at (512) 463-7308. The status of Commission rulemakings in progress is available at www.rrc.state.tx.us/rules/proposed.html.

The Commission proposes the repeal under Texas Natural Resources Code, §81.052, which authorizes the Commission to adopt necessary rules and regulations for governing persons and their operations involving oil and gas wells and pipelines, and under the provisions of Section 76, Senate Bill 310, 77th Legislature (2001).

Cross-reference to statute: Texas Natural Resources Code, §81.052.

Issued in Austin, Texas on March 11, 2003.

§3.107.Texas Experimental Research and Recovery Activity (TERRA).

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 11, 2003.

TRD-200301683

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: April 27, 2003

For further information, please call: (512) 475-1295


Chapter 8. PIPELINE SAFETY REGULATIONS

Subchapter B. REQUIREMENTS FOR NATURAL GAS AND HAZARDOUS LIQUIDS PIPELINES

16 TAC §8.101, §8.103

The Railroad Commission of Texas proposes to amend §8.101 (relating to Pipeline Integrity Assessment and Management Plans for Natural Gas and Hazardous Liquids Pipelines) to provide an alternative means for approval of the use of direct assessment by hazardous liquids and natural gas pipeline operators as an assessment tool. Currently, §8.101(b)(1) requires that a hearing be held in all instances in which a pipeline operator's integrity assessment plan lists direct assessment or other methods of assessment not specifically listed in the rule as the assessment methodology. In addition, the Commission proposes to adopt new §8.103, relating to Procedures and Standards for Approval of Certain Methodologies for Integrity Management Assessment, which sets forth procedures for reviewing operators' requests for approval of direct assessment and other technology options listed in §8.101(b)(1).

In April 2001, the Commission adopted §8.101, which requires all natural gas and hazardous liquids pipeline operators to develop an integrity assessment and management plan for their pipeline systems. In §8.101(b)(1)(C), the rule lists four different assessment tools available to operators to assess the integrity of their pipelines. Of the four assessment tools listed, two--direct assessment and other technology or assessment methodology not specifically listed--require a hearing and Commission approval prior to their use. To date, there have been no hearings on the direct assessment or other new technology methods. The Commission proposes to amend §8.101(b)(1)(C) to remove the mandate for a hearing when an operator requests approval of direct assessment or other technology options not specifically listed in §8.101(b)(1). Such requests would still require the approval of the Commission. The amendment will provide each operator the opportunity for a hearing, if needed, but does not mandate that a hearing be conducted. Commission approval of a direct assessment methodology could be achieved by an order of the Commission without a hearing. Under the proposed amendment, Pipeline Safety staff would work with the operators to review requests for approval of direct assessment plans and, upon the concurrence of both the operator and the Pipeline Safety staff, would present to the Commission a recommendation of approval of the assessment methodology and an agreed order. If the operator and the Pipeline Safety staff do not reach agreement regarding the method or methods of assessment, the operator would still have the opportunity for a hearing as provided in proposed new §8.103.

Proposed new §8.103 is intended to provide specific procedural guidelines for operators and staff in applying for and reviewing requests for approval of direct assessment or other assessment methodology not specifically listed in §8.101(b)(1)(C) and, if necessary, in conducting any hearing that may be convened.

Proposed new §8.103(a) provides a less cumbersome reference by stating that the phrase "direct assessment or other assessment methodology" means direct assessment and any other technology or assessment methodology that is not specifically listed in §8.101(b)(1) and for which an operator must obtain Commission approval.

Proposed new §8.103(b) sets out provisions by which an applicant operator may seek a protective order for any portion of the information required to be filed pursuant to proposed new §8.103. The subsection also provides that a Commission protective order may provide that any protected documents or materials will be expunged from Commission records and returned to the applicant after a final and unappealable determination has been made on the application.

Proposed new §8.103(c) requires an applicant operator to request a hearing by filing with the assistant director a letter requesting a hearing date and specified information, which may be filed either separately from the integrity management plan or in the form of detailed references to the location of the required information in the filed plan. The applicant operator is required to submit the specified information for all systems for which the applicant requests Commission approval to use direct assessment or other assessment methodology for either a baseline assessment or a subsequent assessment. In addition, the operator must identify, in tabular form, all risk factors involved for the pipeline system or segment of the system covered by the plan and for which the applicant operator requests approval for the use of direct assessment or other assessment methodology, the direct assessment or other technology or assessment methodology tools chosen to comply with the plan, and a comparison of the results of sample validation data. Specifically, the results of an assessment of a segment of pipeline using an in-line inspection tool must be compared to the results of an assessment of the same segment using direct assessment or other assessment methodology. If such a comparison was not performed, the applicant operator must explain why the comparison was not performed. Finally, the applicant operator must include a statement explaining how the applicant operator has verified that the direct assessment or other assessment methodology for which approval is requested will address the type of risks identified and how those risks have been verified through a validation process.

Proposed new §8.103(d) sets out the time for review by the assistant director, provides that the division review is limited to technical issues, and articulates the standards by which the assistant director will determine whether to recommend approval of the request. If granting the request will neither imperil nor tend to imperil the health, safety or welfare of the general public and the environment, the assistant director may recommend in writing that the Commission approve the request. In that event, the assistant director forwards the file, along with the written recommendation that the request be approved, to the Office of General Counsel for further processing. If the applicant operator and the assistant director agree in writing to waive a hearing, the Office of General Counsel prepares an order approving the request based on the assistant director's recommendation.

If the assistant director declines to recommend that the Commission approve the request, the assistant director must notify the applicant operator in writing of the recommendation and the reason for it. At that point, the applicant operator may either withdraw the request for approval of direct assessment or other assessment methodology or may file a written request for a hearing on the matter within ten calendar days of receiving notice of the assistant director's written decision not to recommend that the Commission approve the request.

Under proposed new §8.103(e), within three days of receiving a request for a hearing, the assistant director forwards the file to the Office of General Counsel for the setting of a hearing. The Office of General Counsel assigns a presiding examiner to conduct a hearing in accordance with the procedural requirements of Texas Government Code, Chapter 2001 (the Administrative Procedure Act), and Chapter 1 of Title 16 (relating to Practice and Procedure).

Proposed new §8.103(f) provides that after a hearing, the Commission may approve a request to use direct assessment or other assessment methodology based on a finding or findings that use of such assessment methodology, as compared to in-line inspection or pressure testing, will neither imperil nor tend to imperil the health, safety or welfare of the general public and the environment. Proposed new subsection (g) explicitly states that the Commission reserves its right to exercise its discretionary powers to further investigate any request for approval of direct assessment or other assessment methodology.

Mary McDaniel, P.E., assistant director, Gas Services Division, has determined that for each of the first five years the proposed amendment and new section will be in effect, there will be no fiscal implications for state government. It is anticipated that most if not all requests for direct assessment can be resolved without the need for an evidentiary hearing. Any hearings that might be convened would be conducted using existing staff and within current budget limits. Because the Commission has not conducted any hearings pursuant to §8.101, there is no information from which to estimate the length of time such a hearing might take. There will be no fiscal implications for local governments, because under Texas Government Code, §121.202, only the Commission has jurisdiction over pipeline safety matters affecting the transportation of gas and gas pipeline facilities in this state.

Ms. McDaniel has also determined that for each year of the first five years the amendment and new section as proposed will be in effect, the public benefit anticipated as a result of enforcing the sections as proposed will be improvement in safety due to availability of direct assessment methodologies and the specific procedures for obtaining approval of assessment technologies.

Pursuant to Texas Government Code, §2006.002(c), the Commission cannot determine the exact cost of compliance with the proposed amendments to §8.101 and proposed new §8.103 for individual, small business, or micro-business pipeline operators, but the Commission anticipates that there will be either no cost or a reduction in the cost. The proposed amendments to §8.101 would allow operators to gain Commission approval of direct assessment or other technology not specifically listed in the rule without an evidentiary hearing, which could yield savings to those operators that would otherwise have had to incur the expense of going through a hearing, such as hiring legal counsel and other experts, preparing documents and testimony, and traveling to Austin for the hearing itself. Any potential savings would be based on each individual pipeline operator's specific situation. Proposed new §8.103 provides guidelines to all operators seeking approval of direct assessment or other technology not specifically listed in §8.101, which should provide some savings just in the efficiency of not having to use trial and error to determine how to proceed. The Commission assumes that there are operators that meet the definitions of "micro-business" and "small business" set forth in Texas Government Code, §2006.001(1) and (2), respectively; however, the Commission does not have data showing the expense for each employee, the expense for each hour of labor, or the total sales revenue for pipeline operators. Therefore, the Commission is not able to determine the exact cost of compliance based on the cost for each employee, the cost for each hour of labor, or the cost for each $100 of sales pursuant to Texas Government Code, §2006.002(c). However, pursuant to Texas Government Code, §2006.002, the Commission finds that, considering the purpose of the proposed amendments to §8.101 and proposed new §8.103, it is not feasible to reduce any adverse effect, if there is any, that the proposed amendments and new rule could have on individuals, small businesses, or micro-businesses.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission will accept comments for 60 days after publication in the Texas Register and should refer to Gas Utilities Docket No. 9378. The Commission encourages all interested persons to submit comments no later than the deadline. The Commission cannot guarantee that comments submitted after the deadline will be considered. For further information, call Mary McDaniel at (512) 463-7058. The status of Commission rulemakings in progress is available at www.rrc.state.tx.us/rules/proposed.html.

The Commission proposes the amendment and new rule pursuant to Texas Natural Resources Code, §§117.001-117.101, which authorize the Commission to adopt safety standards and practices applicable to the transportation of hazardous liquids and carbon dioxide and associated pipeline facilities within Texas to the maximum degrees permissible under, and to take any other requisite action in accordance with, 49 United States Code Annotated, §60101, et seq .; Texas Natural Resources Code, §§118.001-118.005, which authorize the Commission by rule to require an operator to file for commission approval a plan for assessment or testing of a pipeline if the commission makes certain findings; and Texas Utilities Code, §§121.201-121.210, which authorize the Commission to adopt safety standards and practices applicable to the transportation of gas and to associated pipeline facilities within Texas to the maximum degree permissible under, and to take any other requisite action in accordance with, 49 United States Code Annotated, §60101, et seq .

Cross-reference to sections affected: Texas Natural Resources Code, §§117.001-117.101 and 118.001-118.005; and Texas Utilities Code, §§121.201-121.210.

Issued in Austin, Texas on March 11, 2003.

§8.101.Pipeline Integrity Assessment and Management Plans for Natural Gas and Hazardous Liquids Pipelines.

(a) (No change.)

(b) By February 1, 2002, operators of intrastate transmission and gathering lines subject to the requirements of 49 CFR 192 or 49 CFR 195 shall designate to the Commission's Pipeline Safety Section on a system-by-system or segment within each system basis whether the pipeline operator has chosen to use the risk-based analysis pursuant to paragraph (1) of this subsection or the prescriptive plan authorized by paragraph (2) of this subsection. Operators using the risk-based plan shall complete at least 50% of the initial assessments by January 1, 2006, and the remainder by January 1, 2011; operators using the prescriptive plan shall complete the initial integrity testing by January 1, 2006, or January 1, 2011, pursuant to the requirements of paragraph (2) of this subsection.

(1) The risk-based plan shall contain at a minimum:

(A)-(B) (No change.)

(C) assessment of pipeline integrity using at least one of the following methods appropriate for each segment:

(i) in-line inspection;

(ii) pressure test;

(iii) direct assessment after [ hearing and ] approval by the Commission, or

(iv) other technology or assessment methodology not specifically listed in this paragraph after [ hearing and ] approval by the Commission.

(D)-(E) (No change.)

(2) (No change.)

(c)-(f) (No change.)

§8.103.Procedures and Standards for Approval of Certain Methodologies for Integrity Management Assessment.

(a) Definition. In this section, the phrase "direct assessment or other assessment methodology" shall include direct assessment and any other technology or assessment methodology that is not specifically listed in §8.101(b)(1) of this title (relating to Pipeline Integrity Assessment and Management Plans for Natural Gas and Hazardous Liquids Pipelines).

(b) Confidentiality. The information required by subsection (c) of this section may be subject to public disclosure. To preserve the confidentiality of any portion of the required information and/or documents, prior to filing the required information, an applicant operator may request consideration of the issuance of a protective order. An applicant operator seeking a protective order shall demonstrate that the information sought to be protected is a trade secret, proprietary information, or otherwise legally entitled to protection from disclosure. If the Commission enters a protective order, the order may provide that any protected documents or materials will be expunged from Commission records and returned to the applicant after a final and unappealable determination has been made on the application.

(c) Request for hearing; required information. An operator designating direct assessment or other assessment methodology as the integrity management assessment method for all or any segment of a pipeline system shall obtain Commission approval. In the event of a hearing, the operator shall request a hearing by filing with the assistant director a letter requesting a hearing, and the following information, which may be filed either separately from the integrity management plan or in the form of detailed references to the location of the required information in the filed plan:

(1) the applicant operator's name, business address, telephone number, fax number, and, if available, e-mail address; and the same information for an authorized representative, if any;

(2) the name of each operator covered by the plan, and for each operator and/or system, the system name and T-4 permit number;

(3) for each of the following categories, the total number of miles in the pipeline system or systems:

(A) operated by the applicant operator (intrastate, interstate, and other systems);

(B) operated by the applicant operator and covered by the Commission's Integrity Assessment and Management Plan;

(C) operated by the applicant operator and covered by the Federal Integrity Assessment and Management Plan; and

(D) for which the applicant operator requests approval of a baseline assessment or a subsequent assessment by means of direct assessment or other assessment methodology;

(4) a description of records available from prior hydrostatic tests or in-line inspections for the system or for each segment of the system operated by the applicant and for which the applicant requests approval of direct assessment or other assessment methodology. The applicant operator shall submit this information for all systems for which the applicant requests Commission approval to use direct assessment or other assessment methodology for either a baseline assessment or a subsequent assessment;

(5) in tabular form, all risk factors involved for the pipeline system or segment of the system covered by the plan and for which the applicant operator requests approval for the use of direct assessment or other assessment methodology;

(6) the direct assessment or other technology or assessment methodology tools chosen to comply with the plan, including the following information for each methodology:

(A) direct assessment process or processes, if combined;

(B) how the assessment will be conducted;

(C) if employing combined processes, a description of how they will be accomplished; and

(D) samples of field validation data;

(7) comparison of the results of sample validation data. The results of an assessment of a segment of pipeline using an in- line inspection tool shall be compared to the results of an assessment of the same segment using direct assessment or other assessment methodology. If such a comparison was not performed, the applicant operator shall explain why the comparison was not performed; and

(8) a statement explaining how the applicant operator has verified that the direct assessment or other assessment methodology for which approval is requested will address the type of risks identified and how those risks have been verified through a validation process.

(d) Division review.

(1) The assistant director shall complete the review of a request under subsection (c) of this section within 15 calendar days after the required information has been filed.

(2) Division determinations shall be limited to technical issues to determine compliance with the federal pipeline safety regulations regarding hazardous liquids and natural gas pipelines, as well as the operator's identification and assignment of risks under §8.101(b)(1).

(3) Standards to determine acceptance will include API 1160, ASME B31.8S, and NACE RP 0102 and RP 0502.

(4) The assistant director may recommend that the Commission approve the request if granting the request will neither imperil nor tend to imperil the health, safety or welfare of the general public and the environment. The assistant director shall forward the file, along with a written recommendation that the request be approved, to the Office of General Counsel for further processing. If the applicant operator and the assistant director agree in writing to waive a hearing, the Office of General Counsel shall proceed with the preparation of an order approving the request based on the assistant director's recommendation.

(5) If the assistant director declines to recommend that the Commission approve the request, the assistant director shall notify the applicant operator in writing of the recommendation and the reason for it. The applicant operator may withdraw the request for approval of direct assessment or other assessment methodology or may file a written request for a hearing on the matter within 10 calendar days of receiving notice of the assistant director's written decision not to recommend that the Commission approve the request.

(e) Hearings.

(1) Within three days of receiving a request for a hearing, the assistant director shall forward the file to the Office of General Counsel for the setting of a hearing.

(2) The Office of General Counsel shall assign a presiding examiner to conduct a hearing.

(3) The presiding examiner shall conduct the hearing in accordance with the procedural requirements of Texas Government Code, Chapter 2001 (the Administrative Procedure Act), and Chapter 1 of this title (relating to Practice and Procedure).

(f) Finding requirement. After a hearing, the Commission may approve a request to use direct assessment or other assessment methodology based on a finding or findings that use of such assessment methodology, as compared to in-line inspection or pressure testing, will neither imperil nor tend to imperil the health, safety or welfare of the general public and the environment.

(g) The Commission reserves its right to exercise its discretionary powers to further investigate any request for approval of direct assessment or other assessment methodology.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 11, 2003.

TRD-200301684

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Proposed date of adoption: May 27, 2003

For further information, please call: (512) 475-1295


Chapter 9. LP-GAS SAFETY RULES

Subchapter A. GENERAL REQUIREMENTS

16 TAC §9.1

The Railroad Commission of Texas proposes an amendment to §9.1, relating to Application of Rules, Severability, and Retroactivity. Specifically, the Commission proposes new subsections (f) and (g) to exclude original equipment manufacturers (OEM) of vehicles and fuel supply containers from the requirements of 16 TAC Chapter 9, LP-Gas Safety Rules , except for §9.203, relating to School Bus, Public Transportation, Mass Transit, and Special Transit Vehicle Installations and Inspections, and §9.403, relating to Sections in NFPA 58 Not Adopted by Reference, and Adopted with Changes, Additional Requirements, or Corrections.

Texas Natural Resources Code, §113.011, provides that the Commission shall administer and enforce the laws of Texas and the rules and standards of the Commission relating to liquefied petroleum gas (LP-gas). Texas Natural Resources Code, §113.051, provides that the Commission shall promulgate and adopt rules or standards or both relating to any and all aspects or phases of the liquefied petroleum gas industry that will protect or tend to protect the health, welfare, and safety of the general public.

Recently, it has become more difficult for original equipment manufacturers of vehicles and fuel supply containers that use LP- gas doing business in Texas to make, manufacture, and market vehicles and fuel supply containers nationally due to differences in state rules and regulations. Vehicles and fuel supply containers using LP-gas comprise a small percent of the market for vehicles and fuel supply containers. Differing state requirements increase costs associated with making, manufacturing, and marketing these vehicles and fuel supply containers across the country. Current national standards, which have been adopted by the Commission, impose safety standards and specifications on vehicles and fuel supply containers that insure a high degree of safety to the public health, safety, and welfare. Therefore, the Commission has determined that it is in the public interest to exclude original equipment manufacturers of vehicles and fuel supply containers from Commission safety rules that deviate from national safety standards and that do not marginally increase public safety in order to remove regulatory burdens that increase the cost of making, manufacturing, and marketing vehicles and fuel supply containers using LP-gas.

Proposed new subsection (f) excludes vehicles and fuel supply containers that meet certain requirements from the provisions of Chapter 9. Specifically, vehicles and fuel supply containers that have been manufactured or installed by an original equipment manufacturer, that comply with Title 49, Code of Federal Regulations, the Federal Motor Vehicle Safety Standards, and that comply with the National Fire Protection Association (NFPA) Code 58, Liquefied Petroleum Gas Code , are excluded from the requirements of Chapter 9, except as specified in proposed new subsection (g). Proposed new subsection (g) mandates that vehicles and fuel supply containers excluded pursuant to §9.1(f) must still comply with the requirements of §9.203, relating to School Bus, Public Transportation, Mass Transit, and Special Transit Vehicle Installations and Inspections, and the Commission's exception to NFPA 58 §8-2.3.1(k) under §9.403, relating to Sections in NFPA 58 Not Adopted by Reference, and Adopted With Changes, Additional Requirements, or Corrections.

Under proposed new subsection (g), even though a vehicle complies with NFPA 58 standards, the Commission will still require that vehicle to be equipped with a fixed liquid level gauge and the gauge must be used when filling the fuel supply container.

Byron Caffey, assistant director, Gas Services Division, LP- Gas Safety Section, has determined that for each year of the first five years the proposed amendments are in effect there will be no fiscal implications for state or local governments as a result of enforcing or administering the amendments.

Mr. Caffey has also determined that the public benefit anticipated as a result of the amendments will be the increased availability of vehicles and fuel supply containers using LP-gas and decreased regulatory costs associated with making, manufacturing, and marketing these vehicles and fuel supply containers. The Commission finds that allowing original equipment manufacturers to manufacture and install vehicles and fuel supply containers pursuant to national uniform safety standards achieves a reasonable balance between the public interest in having vehicles and fuel supply containers that use LP-gas, an environmentally-beneficial fuel, widely and continuously available and at lower costs and the public interest in having vehicles and fuel supply containers comply with Texas' unique comprehensive safety standards. The Commission finds that OEM compliance with national comprehensive safety standards will protect the health, safety, and welfare of Texas residents.

Pursuant to Texas Government Code, §2006.002(c), the Commission cannot determine the cost for individual, small business, or micro-business original equipment manufacturers because the proposed amendments allowing the exception for manufacturing vehicles and fuel supply containers are voluntary, not mandatory. The Commission assumes that there are original equipment manufacturers of vehicles and fuel supply containers that meet the definitions of "micro-business" and "small business" set forth in Texas Government Code, §2006.001(1) and (2), respectively; however, the Commission does not have data showing the expense for each employee, the expense for each hour of labor, or the total sales revenue for any original equipment manufacturer. In addition, the costs for any particular original equipment manufacturer will vary based on that manufacturer's situation. Therefore, the Commission is not able to determine the exact cost of compliance based on the cost for each employee, the cost for each hour of labor, or the cost for each $100 of sales pursuant to Texas Government Code, §2006.002(c). Thus, pursuant to Texas Government Code, §2006.002, the Commission finds that, considering the purpose of Texas Natural Resources Code, Chapter 113, it is not feasible to reduce any adverse effect the proposed amendments could have on individuals, small businesses, or micro-businesses.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission will accept comments for 60 days after publication in the Texas Register ; comments should refer to LP-Gas Docket No. 1721. For further information, call Mr. Caffey at (512) 463-5762. The status of Commission rulemakings in progress is available at ww.rrc.state.tx.us/rules/proposed.html.

The amendments are proposed under the Texas Natural Resources Code, §113.051, which authorizes the Commission to adopt rules relating to any and all aspects or phases of the LP-gas industry that will protect or tend to protect the health, welfare, and safety of the general public, and §113.052, which authorizes the Commission to adopt by reference, in whole or in part, the published codes of the National Fire Protection Association as standards to be met in the design, construction, fabrication, assembly, installation, use, and maintenance of containers, tanks, appliances, systems, and equipment for the transportation, storage, delivery, use, and consumption of LP-gas or any one or more of these purposes.

Cross-reference to statute: Texas Natural Resources Code, Chapter 113.

Issued in Austin, Texas on March 11, 2003.

§9.1.Application of Rules, Severability, and Retroactivity.

(a) The LP-Gas Safety Rules apply to the location and operation of liquefied petroleum gas systems, equipment, and appliances. These standards also apply to truck and railcar loading racks, but do not apply to marine terminals, natural gasoline plants, refineries, tank farms, gas manufacturing plants, plants engaged in processing liquefied petroleum gases, or to railcar loading racks used in connection with these excluded establishments.

(1) Subchapter A, General Requirements, applies to various types of LP-gas activities, including licensing, examination, and training requirements.

(2) Subchapter B, Stationary Installations and Container Requirements, applies to proposed and existing stationary LP-gas installations and containers, including cylinder exchange racks.

(3) Subchapter C, Vehicles and Vehicle Dispensers, applies to transports and bobtails that deliver LP-gas, and school buses and other vehicles that are powered by LP-gas.

(4) Subchapter D, Adoption by Reference of NFPA 54 (National Fuel Gas Code ), applies to the adoption by reference of NFPA 54 and specifies additional or alternative requirements from those found in NFPA 54.

(5) Subchapter E, Adoption by Reference of NFPA 58 ( LP-Gas Code ), applies to the adoption by reference of NFPA 58 and specifies additional or alternative requirements from those found in NFPA 58.

(6) Subchapter F, Adoption by Reference of NFPA 51 (Standard for the Design and Installation of Oxygen-Fuel Gas Systems for Welding, Cutting, and Allied Processes ), applies to the use of LP-gas as a welding fuel.

(b) [ Severability. ] If any term, clause, or provision of these rules is for any reason declared invalid, the remainder of the provisions shall remain in full force and effect, and shall in no way be affected, impaired, or invalidated.

(c) Nothing in these rules shall be construed as requiring, allowing, or approving the unlicensed practice of engineering or any other professional occupation requiring licensure.

(d) Unless otherwise stated, the LP-Gas Safety Rules are not retroactive.

(e) As stated in Texas Natural Resources Code, Chapter 113, any LP-gas container with a water capacity of one gallon or less, or any LP-gas piping system, or appliance attached or connected to such a container is exempt from the LP-Gas Safety Rules , including any adopted NFPA pamphlets. For the purpose of consistency, the figure of 4.20 lb is used to determine the weight of one gallon of LP-gas. The omission of a specific NFPA 58 pamphlet or any other NFPA rule containing any such applicable language from Table 1 of §9.403 of this title (relating to Sections in NFPA 58 Not Adopted by Reference, and Adopted With Changes, Additional Requirements, or Corrections) is inadvertent and shall not be read or understood as requiring or allowing any such size of LP-gas container to comply with the adopted LP-gas safety rule requirements.

(f) This chapter shall not apply to vehicles and fuel supply containers that:

(1) are manufactured or installed by original equipment manufacturers;

(2) comply with Title 49, Code of Federal Regulations, the Federal Motor Vehicle Safety Standards; and

(3) comply with the National Fire Protection Association (NFPA) Code 58, Liquefied Petroleum Gas Code.

(g) Vehicles and fuel supply containers excluded from the requirements of this chapter pursuant to subsection (f) of this section shall comply with the requirements of §9.203 of this title, relating to School Bus, Public Transportation, Mass Transit, and Special Transit Vehicle Installations and Inspections, and the Commission's exception to NFPA 58 §8- 2.3.1(k) in Table 1 in §9.403(a), relating to Sections in NFPA 58 Not Adopted by Reference, and Adopted with Changes, Additional Requirements, or Corrections.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 11, 2003.

TRD-200301688

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Proposed date of adoption: May 27, 2003

For further information, please call: (512) 475-1295


16 TAC §9.10

The Railroad Commission of Texas proposes amendments to §9.10, relating to Rules Examination. The purpose of the proposed amendments is to establish requirements for notifying individuals taking any LP-gas examination of the results of that examination as required by Senate Bill (SB) 310, 77th Legislature (2001), as codified at Texas Natural Resources Code, §113.087(i)-(k).

The proposed amendment to §9.10(c) mandates that the Commission must notify an individual within 30 days of the date an individual takes an examination of the results of the examination. Proposed new §9.10(c)(1) provides that if an examination is graded or reviewed by a testing service, the Commission shall notify the individual of the examination results within 14 days of the date the Commission receives the results from the testing service. Subsection (c)(1) further provides that if the notice of the examination results will be delayed for longer than 90 days after the examination date, the Commission shall notify the individual of the reason for the delay before the 90th day. Subsection (c)(1) further provides that the Commission may require a testing service to notify an individual of the individual's examination results. Proposed new §9.10(c)(2) mandates that successful completion of a required examination is credited to and accrues to the individual who took the exam. Subsection (d), currently designated as subsection (c), includes new wording to require that the Commission, upon written request of an individual failing an examination, shall provide that individual with an analysis of the individual's performance on that examination.

Byron Caffey, assistant director, Gas Services Division, LP- Gas Section, has determined that for each year of the first five years the proposed amendments will be in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the amendments. The Commission does not anticipate incurring any additional costs as a result of complying with the amendments because the Commission currently notifies applicants of exam results by letter and would continue this procedure under the proposed amendments.

Mr. Caffey has also determined that for each year of the first five years the new section is proposed to be in effect, the public benefit will be improvement in safety and clarification of the Commission's requirements for LP-gas related examinations.

Pursuant to Texas Government Code, §2006.002(c), the Commission cannot determine the cost for individual, small business, or micro-businesses taking the Commission examinations because the costs associated with compliance will vary depending on the different situations and choices made by each examinee. The Commission assumes that there are examinees that meet the definitions of "micro-business" and "small business" set forth in Texas Government Code, §2006.001(1) and (2), respectively; however, the Commission does not have data showing the expense for each employee, the expense for each hour of labor, or the total sales revenue for any examinees. In addition, the costs for any particular examinee will vary based on that examinee's situation. Therefore, the Commission is not able to determine the exact cost of compliance based on the cost for each employee, the cost for each hour of labor, or the cost for each $100 of sales pursuant to Texas Government Code, §2006.002(c). Thus, pursuant to Texas Government Code, §2006.002, the Commission finds that, considering the purpose of Texas Natural Resources Code, Chapter 113, it is not feasible to reduce any adverse effect the proposed new rule could have on individuals, small businesses, or micro-businesses.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission will accept comments for 30 days after publication in the Texas Register and should refer to LP-Gas Docket No. 1734. The Commission encourages all interested persons to submit comments no later than the deadline. The Commission cannot guarantee that comments submitted after the deadline will be considered. For further information, call Mr. Caffey at (512) 463-5762. The status of Commission rulemakings in progress is available at www.rrc.state.tx.us/rules/proposed.html.

The amendments are proposed under the Texas Natural Resources Code, §113.051, which authorizes the Commission to adopt rules relating to any and all aspects or phases of the LP-gas industry that will protect or tend to protect the health, welfare, and safety of the general public, and §113.087(i)-(k), as added by Section 57, SB 310, 77th Legislature (2001), which mandates the Commission to notify individuals taking an examination within 30 days, notify individuals by the 90th day of the reason for delay in furnishing exam results, and furnish a performance analysis upon written request.

Cross reference to statute: Texas Natural Resources Code, Chapter 113, §§113.051 and 113.087(i)-(k), as added by SB 310, 77th Legislature (2001).

Issued in Austin, Texas on March 11, 2003.

§9.10.Rules Examination.

(a)-(b) (No change.)

(c) Within 30 days of the date an individual takes an examination, the Commission shall notify the individual of the results of the examination.

(1) If the examination is graded or reviewed by a testing service, the Commission shall notify the individual of the examination results within 14 days of the date the Commission receives the results from the testing service. If the notice of the examination results will be delayed for longer than 90 days after the examination date, the Commission shall notify the individual of the reason for the delay before the 90th day. The Commission may require a testing service to notify an individual of the individual's examination results.

(2) Successful completion of any required examination shall be credited to and accrue to the individual.

(d) [ (c) ] Failure of any examination shall immediately disqualify the individual from performing any LP-gas related activities covered by the examination which is failed, except for activities covered by a separate examination which the individual has passed. If requested in writing by an individual who failed the examination, the Commission shall furnish the individual with an analysis of the individual's performance on the examination.

(1) Any individual who fails an examination administered by the Commission only at the Austin location may retake the same examination only one additional time during a business day. Any subsequent examination shall be taken on another business day, unless approved by the assistant director.

(2) Any individual who fails an examination administered at a location other than the Austin location shall reapply to the Austin office for a new admittance letter.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 11, 2003.

TRD-200301690

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: April 27, 2003

For further information, please call: (512) 475-1295


Chapter 13. REGULATIONS FOR COMPRESSED NATURAL GAS (CNG) AND LIQUEFIED NATURAL GAS (LNG)

Subchapter A. SCOPE AND DEFINITIONS

16 TAC §13.1

The Railroad Commission of Texas proposes an amendment to §13.1, relating to Scope. Specifically, the Commission proposes new subsections (c) and (d) to exclude original equipment manufacturers (OEM) of compressed natural gas (CNG) vehicles and fuel supply containers from the requirements of 16 TAC Chapter 13, Subchapters A, B, C, D, E, and F, except for §13.24, relating to Filings Required for School Bus, Mass Transit, and Special Transit Installations. The Commission also proposes amendments to subsection (b) to reflect a change in statutory language under Texas Natural Resources Code, §116.002.

Texas Natural Resources Code, §116.011, provides that the Commission shall administer and enforce the rules and standards under Chapter 116 of the Natural Resources Code relating to compressed natural gas and liquefied natural gas. Texas Natural Resources Code, §116.012, provides that to protect the health, safety, and welfare of the general public, the Commission shall adopt necessary rules and standards relating to the work of compression and liquefaction, storage, sale or dispensing, transfer and transportation, use or consumption, and disposal of compressed natural gas or liquefied natural gas. Texas Natural Resources Code, §116.013, provides that the Commission may adopt by reference all or part of the published codes of nationally recognized societies as standards to be met in the design, construction, fabrication, assembly, installation, use, and maintenance of CNG or LNG components and equipment.

Recently, it has become more difficult for original equipment manufacturers of vehicles and fuel supply containers that use CNG doing business in Texas to make, manufacture, and market vehicles and fuel supply containers nationally due to differences in state rules and regulations. Vehicles and fuel supply containers using compressed natural gas comprise a small percent of the market for vehicles and fuel supply containers. Differing state requirements increase costs associated with making, manufacturing, and marketing these vehicles and fuel supply containers across the country. Current national standards, which have been adopted by the Commission, impose standards and specifications on vehicles and fuel supply containers that insure a high degree of safety to the public health, safety, and welfare. Therefore, the Commission has determined that it is in the public interest to exclude original equipment manufacturers of vehicles and fuel supply containers from Commission safety rules that deviate from national safety standards and that do not marginally increase public safety in order to remove regulatory burdens that increase the cost of making, manufacturing, and marketing vehicles and fuel supply containers using compressed natural gas.

Proposed new §13.1(c) excludes CNG vehicles and fuel supply containers that meet certain requirements from the provisions of Chapter 13, Subchapters A, B, C, D, E, and F. Specifically, CNG vehicles and fuel supply containers that have been manufactured or installed by an original equipment manufacturer, that comply with Title 49, Code of Federal Regulations, the Federal Motor Vehicle Safety Standards, and that comply with the National Fire Protection Association (NFPA) Code 52, Compressed Natural Gas (CNG) Vehicular Systems Code , are excluded from the requirements of Chapter 13, except as specified in proposed new subsection (d). Proposed new subsection (d) mandates that CNG vehicles and fuel supply containers excluded pursuant to §13.1(c) must still comply with the requirements of §13.24, relating to Filings Required for School Bus, Mass Transit, and Special Transit Installations.

Byron Caffey, Assistant Director, Gas Services Division, LP-Gas Safety Section, has determined that for each year of the first five years the proposed amendments are in effect there will be no fiscal implications for state or local governments as a result of enforcing or administering the amendments.

Mr. Caffey has also determined that the public benefit anticipated as a result of the amendments will be the increased availability of vehicles and fuel supply containers using compressed natural gas and decreased regulatory costs associated with making, manufacturing, and marketing these vehicles and fuel supply containers. The Commission finds that allowing original equipment manufacturers of vehicles and fuel supply containers to manufacture and install vehicles and fuel supply containers pursuant to uniform national safety standards achieves a reasonable balance between the public interest in having vehicles and fuel supply containers that use compressed natural gas, an environmentally-beneficial fuel, widely and continuously available and at lower costs and the public interest in having vehicles and fuel supply containers comply with Texas' unique comprehensive safety standards. The Commission finds that OEM compliance with national comprehensive safety standards will protect the health, safety, and welfare of Texas residents.

Pursuant to Texas Government Code, §2006.002(c), the Commission cannot determine the cost for individual, small business, or micro-business original equipment manufacturers because the proposed amendments allowing the exceptions for manufacturing vehicles and fuel supply containers are voluntary. The Commission assumes that there are original equipment manufacturers of vehicles and fuel supply containers that meet the definitions of "micro-business" and "small business" set forth in Texas Government Code, §2006.001(1) and (2), respectively; however, the Commission does not have data showing the expense for each employee, the expense for each hour of labor, or the total sales revenue for any original equipment manufacturer. In addition, the costs for any particular original equipment manufacturer will vary based on that manufacturer's situation. Therefore, the Commission is not able to determine the exact cost of compliance based on the cost for each employee, the cost for each hour of labor, or the cost for each $100 of sales pursuant to Texas Government Code, §2006.002(c). Thus, pursuant to Texas Government Code, §2006.002, the Commission finds that, considering the purpose of Texas Natural Resources Code, Chapter 116, it is not feasible to reduce any adverse effect the proposed amendments could have on individuals, small businesses, or micro-businesses.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission will accept comments for 60 days after publication in the Texas Register ; comments should refer to LP-Gas Docket No. 1721. For further information, call Mr. Caffey at (512) 463-5762. The status of Commission rulemakings in progress is available at ww.rrc.state.tx.us/rules/proposed.html.

The amendments are proposed under the Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to the work of compression and liquefaction, storage, sale or dispensing, transfer or transportation, use or consumption, and disposal of compressed natural gas or liquefied natural gas, and §116.013, which authorizes the Commission to adopt by reference, in whole or in part the published codes of nationally recognized societies as standards to be met in the design, construction, fabrication, assembly, installation, use, and maintenance of CNG or LNG components and equipment.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas on March 11, 2003.

§13.1.Scope.

(a) This chapter applies to the design and installation of compressed natural gas (CNG) engine fuel systems on vehicles of all types; CNG systems used for compression, storage, sale, transportation, delivery, or distribution of CNG for any purpose; and all CNG mobile fuel systems.

(b) This chapter shall [ does ] not apply to:

(1) the production, transportation, storage, sale, or distribution of natural gas that is subject to Commission jurisdiction under Subtitle A or B, Title 3, Texas Utilities Code [ the jurisdiction of the Railroad Commission of Texas under the Gas Utility Regulatory Act (Texas Civil Statutes, Article 1446e) or the Cox law (Title 102, Revised Statutes) ];

(2) pipelines, fixtures, equipment, or facilities to the extent that they are subject to the safety regulations promulgated and enforced by the Railroad Commission of Texas pursuant to Natural Resources Code, Chapter 117, or Subchapter E, Chapter 121, Texas Utilities Code [ Texas Civil Statutes, Article 6053-1 ]; or

(3) the design and installation of any CNG system in ships, barges, sailboats, or other types of watercraft. Such installation is subject to the American Board and Yacht Council (ABYC) and any other applicable standards.

(c) Subchapters A, B, C, D, E, and F of this chapter shall not apply to vehicles and fuel supply containers that:

(1) are manufactured or installed by original equipment manufacturers;

(2) comply with Title 49, Code of Federal Regulations, the Federal Motor Vehicle Safety Standards; and

(3) comply with the National Fire Protection Association (NFPA) Code 52, Compressed Natural Gas (CNG) Vehicular Systems Code .

(d) Vehicles and fuel supply containers excluded from the requirements of subchapters A through F of this chapter pursuant to subsection (c) of this section shall comply with the requirements of §13.24 of this title, relating to Filings Required for School Bus, Mass Transit, and Special Transit Installations.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 11, 2003.

TRD-200301685

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Proposed date of adoption: May 27, 2003

For further information, please call: (512) 475-1295


Subchapter C. CLASSIFICATION, REGISTRATION, AND EXAMINATION

16 TAC §13.70

The Railroad Commission of Texas proposes amendments to §13.70, relating to Examination Requirements and Renewals. The purpose of the proposed amendments is to establish requirements for notifying individuals taking any CNG examination of the results of that examination as required by Senate Bill (SB) 310, 77th Legislature (2001), as codified at Texas Natural Resources Code, §116.034(d) - (g).

The proposed amendment to §13.70(a)(4) corrects the number of the form that an individual must file in order to take the rules examination given by the Commission. Proposed new §13.70(a)(5) mandates that the Commission must notify an individual within 30 days of the date an individual takes an examination of the results of the examination. Proposed new §13.70(a)(5)(A) provides that if an examination is graded or reviewed by a testing service, the Commission shall notify the individual of the examination results within 14 days of the date the Commission receives the results from the testing service. Subsection (a)(5)(A) further provides that if the notice of the examination results will be delayed for longer than 90 days after the examination date, the Commission shall notify the individual of the reason for the delay before the 90th day. Subsection (a)(5)(A) further provides that the Commission may require a testing service to notify an individual of the individual's examination results. Proposed §13.70(a)(5)(C), redesignated from current subsection (a)(6), includes new wording to require that the Commission, upon written request of an individual failing an examination, shall provide that individual with an analysis of the individual's performance on that examination. Subsection (a)(7) is proposed to be deleted because the Commission's examination is updated periodically, rather than only once a year.

Byron Caffey, assistant director, Gas Services Division, LP- Gas Section, has determined that for each year of the first five years the proposed amendment will be in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the amendments. The Commission does not anticipate incurring any additional costs as a result of complying with the amendments because the Commission currently notifies applicants of exam results by letter and would continue this procedure under the proposed amendments.

Mr. Caffey has also determined that for each year of the first five years the amendments are proposed to be in effect, the public benefit will be improvement in safety and clarification of the Commission's requirements for CNG related examinations.

Pursuant to Texas Government Code, §2006.002(c), the Commission cannot determine the cost for individual, small business, or micro-businesses taking the Commission examinations because the costs associated with compliance will vary depending on the different situations and choices made by each examinee. The Commission assumes that there are examinees that meet the definitions of "micro-business" and "small business" set forth in Texas Government Code, §2006.001(1) and (2), respectively; however, the Commission does not have data showing the expense for each employee, the expense for each hour of labor, or the total sales revenue for any examinees. In addition, the costs for any particular examinee will vary based on that examinee's situation. Therefore, the Commission is not able to determine the exact cost of compliance based on the cost for each employee, the cost for each hour of labor, or the cost for each $100 of sales pursuant to Texas Government Code, §2006.002(c). Thus, pursuant to Texas Government Code, §2006.002, the Commission finds that, considering the purpose of Texas Natural Resources Code, Chapter 116, it is not feasible to reduce any adverse effect the proposed new rule could have on individuals, small businesses, or micro-businesses.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission will accept comments for 30 days after publication in the Texas Register and should refer to LP-Gas Docket No. 1734. The Commission encourages all interested persons to submit comments no later than the deadline. The Commission cannot guarantee that comments submitted after the deadline will be considered. For further information, call Mr. Caffey at (512) 463-5762. The status of Commission rulemakings in progress is available at www.rrc.state.tx.us/rules/proposed.html.

The amendments are proposed under the Texas Natural Resources Code, §§116.012, which authorizes the Commission to adopt rules and standards relating to the work of compression and liquefaction, storage, sale or dispensing, transfer or transportation, use or consumption, and disposal of compressed natural gas or liquefied natural gas, and §116.034(d)-(g), as added by Section 57, SB 310, 77th Legislature (2001), which mandates the Commission to notify individuals taking an examination within 30 days, notify individuals by the 90th day of the reason for delay in furnishing exam results, and furnish a performance analysis upon written request.

Cross reference to statute: Texas Natural Resources Code, Chapter 116, §§116.012 and 116.034(d)-(g), as added by SB 310, 77th Legislature (2001).

Issued in Austin, Texas on March 11, 2003.

§13.70.Examination Requirements and Renewals.

(a) Examination general provisions.

(1)-(3) (No change.)

(4) An individual who has filed CNG Form 1016 [ 1015 ] and the applicable nonrefundable examination fee may take the rules examination at the Commission's Austin office between the hours of 8:00 a.m. and 2:00 p.m., Monday through Friday, except for state holidays, and at other designated times and locations around the state. Applicants who wish to take the rules examination at sites other than the Austin office shall submit CNG Form 1016 [ 1015 ] and the applicable fee to the Commission's Austin office at least three business days prior to the examination date in order to receive an admittance letter from the Commission. The admittance letter shall be required at all exam sites other than the Austin office.

(5) Within 30 days of the date an individual takes an examination, the Commission shall notify the individual of the results of the examination.

(A) If the examination is graded or reviewed by a testing service, the Commission shall notify the individual of the examination results within 14 days of the date the Commission receives the results from the testing service. If the notice of the examination results will be delayed for longer than 90 days after the examination date, the Commission shall notify the individual of the reason for the delay before the 90th day. The Commission may require a testing service to notify an individual of the individual's examination results.

(B) [ (5) ] Successful completion of any required examination shall be credited to and accrue to the individual.

(C) [ (6) ] Failure of any examination shall immediately disqualify the individual from performing any CNG related activities covered by the examination which is failed. Any person who fails an examination administered by the Commission may not re-take that examination for a period of at least 24 hours. If requested in writing by an individual who failed the examination, the Commission shall furnish the individual with an analysis of the individual's performance on the examination.

[ (7) Dates and locations of examinations shall be listed in a schedule made annually by the Commission. The schedule shall be prepared no later than November 15th of each year. The Commission shall post the schedule in its Austin office and make a copy of it available to anyone who requests it.]

(b)-(e) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 11, 2003.

TRD-200301689

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: April 27, 2003

For further information, please call: (512) 475-1295


Subchapter G. GENERAL APPLICABILITY AND REQUIREMENTS

16 TAC §13.2004

(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Railroad Commission of Texas or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Railroad Commission of Texas proposes the repeal of §13.2004, relating to Applicability, Severability, and Retroactivity. The proposed repeal is in conjunction with a separate but concurrent proposal for a new §14.2004, with the same title, to be in new 16 TAC Chapter 14 entitled Regulations for Liquefied Natural Gas. This proposed repeal is for the purpose of renumbering this rule to move it to Chapter 14 and to add some new language to exclude original equipment manufacturers (OEM) of liquefied natural gas (LNG) vehicles and fuel supply containers from the requirements of 16 TAC Chapter 14, to be entitled Regulations for Liquefied Natural Gas (LNG), except for §14.2046, relating to Filing Required for School Bus, Mass Transit and Special Transit Vehicles. In the separate rulemaking, existing §13.2046 is proposed for repeal with new §14.2046 proposed in its place as part of the move of the LNG rules out of Chapter 13 and into Chapter 14.

Byron Caffey, Assistant Director, Gas Services Division, LP-Gas Safety Section, has determined that for each year of the first five years the proposed repeal is in effect there will be no fiscal implications for state or local governments as a result of enforcing or administering the repeal because the rule will continue to exist in a different chapter. There is no anticipated economic cost of compliance associated with the repeal.

Mr. Caffey has also determined that the public benefit anticipated as a result of the repeal will be better organized Commission rules regarding LNG, which will be moved into a separate chapter instead of grouped with the CNG rules also found in 16 TAC Chapter 13.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission will accept comments for 60 days after publication in the Texas Register ; comments should refer to LP-Gas Docket No. 1721. For further information, call Mr. Caffey at (512) 463-5762. The status of Commission rulemakings in progress is available at www.rrc.state.tx.us/rules/proposed.html.

The repeal is proposed under the Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to the work of compression and liquefaction, storage, sale or dispensing, transfer or transportation, use or consumption, and disposal of compressed natural gas or liquefied natural gas, and §116.013, which authorizes the Commission to adopt by reference, in whole or in part the published codes of nationally recognized societies as standards to be met in the design, construction, fabrication, assembly, installation, use, and maintenance of CNG or LNG components and equipment.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas on March 11, 2003.

§13.2004.Applicability, Severability, and Retroactivity.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 11, 2003.

TRD-200301687

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Proposed date of adoption: May 27, 2003

For further information, please call: (512) 475-1295


Chapter 14. REGULATIONS FOR LIQUEFIED NATURAL GAS (LNG)

Subchapter A. GENERAL APPLICABILITY AND REQUIREMENTS

16 TAC §14.2004

The Railroad Commission of Texas proposes new §14.2004, relating to Applicability, Severability, and Retroactivity. Specifically, the Commission proposes new wording in subsections (e) and (f) to exclude original equipment manufacturers (OEM) of liquefied natural gas (LNG) vehicles and fuel supply containers from the requirements of 16 TAC Chapter 14, to be entitled Regulations for Liquefied Natural Gas (as proposed in a separate but concurrent rulemaking), except for §14.2046, relating to Filing Required for School Bus, Mass Transit and Special Transit Vehicles. In the separate rulemaking, existing §13.2046 is proposed for repeal with new §14.2046 proposed in its place as part of the move of the LNG rules out of Chapter 13 and into Chapter 14.

Texas Natural Resources Code, §116.011, provides that the Commission shall administer and enforce the rules and standards under Chapter 116 of the Natural Resources Code relating to compressed natural gas and liquefied natural gas. Texas Natural Resources Code, §116.012, provides that to protect the health, safety, and welfare of the general public, the Commission shall adopt necessary rules and standards relating to the work of compression and liquefaction, storage, sale or dispensing, transfer and transportation, use or consumption, and disposal of compressed natural gas or liquefied natural gas. Texas Natural Resources Code, §116.013, provides that the Commission may adopt by reference all or part of the published codes of nationally recognized societies as standards to be met in the design, construction, fabrication, assembly, installation, use, and maintenance of CNG or LNG components and equipment.

Recently, it has become more difficult for original equipment manufacturers of vehicles and fuel supply containers that use LNG gas doing business in Texas to make, manufacture, and market vehicles and fuel supply containers nationally due to differences in state rules and regulations. Vehicles and fuel supply containers using liquefied natural gas comprise a small percent of the market for vehicles and fuel supply containers. Differing state requirements increase costs associated with making, manufacturing, and marketing these vehicles and fuel supply containers across the country. Current national standards, which have been adopted by the Commission, impose standards and specifications on vehicles and fuel supply containers that insure a high degree of safety to the public health, safety, and welfare. Therefore, the Commission has determined that it is in the public interest to exclude original equipment manufacturers of vehicles and fuel supply containers from Commission safety rules that deviate from national safety standards and that do not marginally increase public safety in order to remove regulatory burdens that increase the cost of making, manufacturing, and marketing vehicles and fuel supply containers using liquified natural gas.

Proposed new §14.2004(e) excludes LNG vehicles and fuel supply containers that meet certain requirements from the provisions of Chapter 14. Specifically, LNG vehicles and fuel supply containers that have been manufactured or installed by an original equipment manufacturer, that comply with Title 49, Code of Federal Regulations, the Federal Motor Vehicle Safety Standards, and that comply with the National Fire Protection Association (NFPA) Code 57, Liquefied Natural Gas (LNG) Fuel Systems Code , are excluded from the requirements of Chapter 14, except as specified in proposed new subsection (f). Proposed new subsection (f) mandates that vehicles and fuel supply containers excluded pursuant to §14.2004(e) must still comply with the requirements of §14.2046, relating to Filings Required for School Bus, Mass Transit, and Special Transit Vehicles.

Byron Caffey, Assistant Director, Gas Services Division, LP-Gas Safety Section, has determined that for each year of the first five years the proposed new section is in effect there will be no fiscal implications for state or local governments as a result of enforcing or administering the new section.

Mr. Caffey has also determined that the public benefit anticipated as a result of the new section will be the increased availability of vehicles and fuel supply containers using liquefied natural gas and decreased regulatory costs associated with making, manufacturing, and marketing these vehicles and fuel supply containers. The Commission finds that allowing original equipment manufacturers of vehicles and fuel supply containers to manufacture and install vehicles and fuel supply containers pursuant to uniform national safety standards achieves a reasonable balance between the public interest in having vehicles and fuel supply containers that use liquefied natural gas, an environmentally-beneficial fuel, widely and continuously available and at lower costs and the public interest in having vehicles and fuel supply containers comply with Texas' unique comprehensive safety standards. The Commission finds that OEM compliance with national comprehensive safety standards will protect the health, safety, and welfare of Texas residents.

Pursuant to Texas Government Code, §2006.002(c), the Commission cannot determine the cost for individual, small business, or micro-business original equipment manufacturers because the proposed amendments allowing the exceptions for manufacturing vehicles and fuel supply containers are voluntary. The Commission assumes that there are original equipment manufacturers of vehicles and fuel supply containers that meet the definitions of "micro-business" and "small business" set forth in Texas Government Code, §2006.001(1) and (2), respectively; however, the Commission does not have data showing the expense for each employee, the expense for each hour of labor, or the total sales revenue for any original equipment manufacturer. In addition, the costs for any particular original equipment manufacturer will vary based on that manufacturer's situation. Therefore, the Commission is not able to determine the exact cost of compliance based on the cost for each employee, the cost for each hour of labor, or the cost for each $100 of sales pursuant to Texas Government Code, §2006.002(c). Thus, pursuant to Texas Government Code, §2006.002, the Commission finds that, considering the purpose of Texas Natural Resources Code, Chapter 116, it is not feasible to reduce any adverse effect the proposed new section could have on individuals, small businesses, or micro-businesses.

Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967; online at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission will accept comments for 60 days after publication in the Texas Register ; comments should refer to LP-Gas Docket No. 1721. For further information, call Mr. Caffey at (512) 463-5762. The status of Commission rulemakings in progress is available at www.rrc.state.tx.us/rules/proposed.html.

The new section is proposed under the Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to the work of compression and liquefaction, storage, sale or dispensing, transfer or transportation, use or consumption, and disposal of compressed natural gas or liquefied natural gas, and §116.013, which authorizes the Commission to adopt by reference, in whole or in part the published codes of nationally recognized societies as standards to be met in the design, construction, fabrication, assembly, installation, use, and maintenance of CNG or LNG components and equipment.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas on March 11, 2003.

§14.2004.Applicability, Severability, and Retroactivity.

(a) The Regulations for Liquefied Natural Gas are intended to apply to the design, installation, and operation of liquefied natural gas (LNG) dispensing systems, the design and installation of LNG engine fuel systems on vehicles of all types and their associated fueling facilities, and the construction and operation of equipment for the storage, handling, and transportation of LNG. These standards do not apply to locomotives, railcar tenders, marine terminals, or to the transportation, loading, or unloading of LNG on ships, barges, or other types of watercraft, or to any fuel cell approved by the Federal Aviation Administration and intended to be used solely as a fuel cell for aircraft, including hot air balloons, or to an installation or connection that is part of a distribution or pipeline system that is covered by Title 49, Code of Federal Regulations, Part 192. From the point at which LNG in a system has been vaporized and converted to compressed natural gas (CNG), the equipment and components must comply with the Commission's Regulations for Compressed Natural Gas.

(b) If any term, clause, or provision of these rules is for any reason declared invalid, the remainder of the provisions shall remain in full force and effect, and shall in no way be affected, impaired, or invalidated.

(c) Nothing in these rules shall be construed as requiring, allowing, or approving the unlicensed practice of engineering or any other professional occupation requiring licensure.

(d) Unless otherwise stated, the Regulations for Liquefied Natural Gas are not retroactive; however, the Railroad Commission of Texas has jurisdiction over all LNG installations in Texas and installations placed into operation after October 1, 1996, shall comply with these regulations. All other LNG installations in operation prior to October 1, 1996, shall be maintained and operated in a safe manner as determined by the Railroad Commission of Texas. Persons engaged in LNG activities on the effective date of these rules shall comply with licensing and examination requirements by February 1, 1997.

(e) The requirements of 16 TAC Chapter 14 shall not apply to vehicles and fuel supply containers that:

(1) are manufactured or installed by original equipment manufacturers;

(2) comply with Title 49, Code of Federal Regulations, the Federal Motor Vehicle Safety Standards; and

(3) comply with the National Fire Protection Association (NFPA) Code 57, Liquefied Natural Gas (LNG) Fuel Systems Code .

(f) Vehicles and fuel supply containers excluded from the requirements of this chapter pursuant to subsection (e) of this section shall comply with the requirements of §14.2046 of this title, relating to Filings Required for School Bus, Mass Transit and Special Transit Vehicles.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 11, 2003.

TRD-200301686

Mary Ross McDonald

Deputy General Counsel

Railroad Commission of Texas

Proposed date of adoption: May 27, 2003

For further information, please call: (512) 475-1295