PART 1. RAILROAD COMMISSION OF TEXAS
CHAPTER 8. PIPELINE SAFETY REGULATIONS
SUBCHAPTER C. REQUIREMENTS FOR NATURAL GAS PIPELINES ONLY
16 TAC §8.201
The Railroad Commission of Texas proposes amendments
to §8.201, relating to Pipeline Safety Program Fees, pursuant
to Senate Bill 1658, 81st Texas Legislature (2009), which increases
the maximum annual natural gas pipeline safety inspection fee from
$0.50 per service line to $1.00 per service line.
The Commission proposes to amend §8.201(b) to increase the
assessment rate from $0.50 to $0.70 annually for each service line
reported to be in service at the end of each calendar year in order
meet the requirements of the pipeline safety program. The pipeline
safety inspection fee was created in 2003 to support the pipeline
safety program, which is funded partially by federal funds; the remainder
is funded by state general revenue dollars. The fee was originally
set in 2003, at $0.37 annually for each service line reported by a
natural gas distribution system; in 2007, the fee was increased to
$0.50. The proposed increase of this fee to $0.70 will fund the Commission's
hiring of additional personnel within the Safety Division. Federal
funding for the pipeline safety program is tied to the Commission's
staffing levels and the Commission's program has been adversely affected
by under-staffing. The effective date of Senate Bill 1658 and of this
proposed rule amendment will be September 1, 2009.
Mary McDaniel, Director, Safety Division, has determined that for
each year of the first five years that the proposed amendment will
be in effect, there will be fiscal implications for State government.
Based on the proposed $0.20 increase, the Commission anticipates an
increase in revenue. There were 4,697,881 service lines reported at
the end of calendar year 2007; the Commission has not yet received
the final number of lines in service for the end of calendar year
2008. Historically, however, the Commission has seen an increase of
1.5% each year in the number of reported service lines, so the Commission
estimates that at the end of 2008, there were 4,768,349 service lines.
A 1.5% increase in that number yields an estimated 4,839,874 service
lines for the end of calendar year 2009. Based on that number of lines
in service, Ms. McDaniel has determined that the $0.20 annual increase
in this fee per service line will increase revenue to the Railroad
Commission by approximately $967,975 beginning in the calendar year
2010, and by at least $967,975 in each year of the next four years
that the fee remains at $0.70 per service line and there are at least
4,839,874 service lines reported each year. All revenue derived from
the pipeline safety program fee, both the $0.70 per service line (and
the $100 per master metered system, which the Commission is not proposing
to increase), has been appropriated to the Commission to supplement
the funds received from the federal Office of Pipeline Safety to support
both the Commission's established existing pipeline safety program
and the Commission's underground pipeline damage prevention program.
If the number of service lines is less than 4,839,874 in either 2010
or 2011, the Commission's revenue will decrease accordingly, and the
Commission's appropriation will be reduced as well.
Ms. McDaniel also anticipates that there will be additional costs
for state government as a result of enforcing or administering the
section as amended. The Commission will add 11.5 new full-time equivalent
employees (FTEs) for the pipeline safety program. There will be additional
annual expenses for these FTEs of $375,129 for salaries, $107,174
for payroll related costs, $29,400 for travel, $22,020 for operating
costs such as rent and gasoline, and $25,943 for additional operating
expenses, such lease costs for computers ($23,843) and cell phone
usage charges ($2,100) in each year of the first five years that the
proposed amendments will be in effect. There will also be an expenditure
of $43,452 for vehicles and $4,800 for computer mounts in vehicles
in the first year that the proposed amendments will be in effect,
but not in the second through fifth years. Any remaining funds will
be used to make up for an anticipated shortfall in federal funding
for the pipeline safety program. There will be no other fiscal implications
for State government, because state agency customers of natural gas
distribution systems are exempt from payment of the pipeline safety
program fee.
There will be fiscal implications for local governments, such as
municipalities and government housing authorities, that operate natural
gas distribution systems; however, these entities are authorized to
reimburse themselves by imposing a one-time surcharge to the existing
rates charged to their customers. It is possible that there will be
a mismatch between the amounts the natural gas distribution system
operators remit to the Commission and the amounts they collect from
their customers through the surcharge reimbursement mechanism, but
the Commission cannot determine whether any discrepancy will be in
favor of the natural gas distribution system operators or the customers.
Ms. McDaniel has also determined that for each year of the first
five years that the rule as proposed to be amended will be in effect,
the public benefit will be the continuation of the Commission's pipeline
safety program to ensure public safety with regard to pipeline operations.
Ms. McDaniel has also developed the following analysis of the probable
economic cost to persons required to comply with the proposed amendment
for each year of the first five years that it will be in effect, as
well as the analysis required by Texas Government Code, §2006.002.
That statute requires that, before adopting a rule that may have an
adverse economic effect on small businesses or micro-businesses, a
state agency prepare an economic impact statement and a regulatory
flexibility analysis. The economic impact statement must estimate
the number of small businesses subject to the proposed rule, project
the economic impact of the rule on small businesses, and describe
alternative methods of achieving the purpose of the proposed rule.
A regulatory flexibility analysis must include the agency's consideration
of alternative methods of achieving the purpose of the proposed rule.
The analysis must consider, if consistent with the health, safety,
and environmental and economic welfare of the state, using regulatory
methods that will accomplish the objectives of applicable rules while
minimizing adverse impacts on small businesses. The state agency must
include in the analysis several proposed methods of reducing the adverse
impact of a proposed rule on a small business. The statute defines
"small business" as a legal entity, including a corporation, partnership,
or sole proprietorship, that is formed for the purpose of making a
profit; is independently owned and operated; and has fewer than 100
employees or less than $6 million in annual gross receipts. A "micro-business"
is a legal entity, including a corporation, partnership, or sole proprietorship,
that is formed for the purpose of making a profit; is independently
owned and operated; and has no more than 20 employees.
Pursuant to Texas Government Code, §2006.002(c), Ms. McDaniel
has estimated that although there will be a cost of compliance for
individual, small business, or micro-business natural gas distribution
system operators that are currently regulated under the Commission's
pipeline safety program, there will not be an adverse impact on individual,
small business, or micro-business operators of natural gas distribution
systems. For each natural gas distribution operator, regardless of
its business organization, the cost of compliance will be an additional
$0.20 for each service line reported on the DOT Distribution Annual
Report, Form 7100.1-1. However, these entities are authorized to reimburse
themselves by imposing a one-time surcharge to the existing rates
they charge to their customers. These entities would not incur any
additional administrative costs, either for remitting the pipeline
safety program fee to the Commission on a timely basis or for assessing
the surcharge to customers, because the pipeline safety program fee
has been in effect since 2003, and the remittance and billing systems
are already in place.
In addition to the cost of compliance for natural gas distribution
system operators, there will be a cost of compliance for all individual
customers of natural gas distribution systems who will be assessed
a surcharge by their provider. For a customer of a natural gas distribution
system who has one service line, the additional cost of compliance
will be $0.20 per year, which the Commission considers to be de minimis
. Large commercial and industrial
customers of natural gas distribution systems will have additional
annual costs of compliance of $0.20 for each service line. State agency
customers of natural gas distributions systems are exempt from payment
of the pipeline safety program fee.
Because the Commission has determined that there is no adverse
impact on small businesses or micro-businesses, pursuant to Texas
Government Code, §2001.006, the Commission is not required to
consider whether there are any alternative methods for achieving the
purpose of this proposal. However, the Commission is required by Senate
Bill 1658 and Article VI to assess fees sufficient to generate revenue
to cover the general revenue appropriation. The Commission has concluded
that requiring all gas distribution system operators to comply with
the new fee is essential to the goal of ensuring the health, safety,
and environmental and economic welfare of the State. Further, the
proposed change in the pipeline safety fee will ensure that the Commission's
pipeline safety program is sufficiently staffed to cover all the inspection
requirements of the program. The Commission has concluded that increasing
the pipeline safety fee is essential to the goal of ensuring the health,
safety, and environmental and economic welfare of the State. Minimizing
any adverse impacts on small businesses is inconsistent with this goal.
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.php;
or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission
will accept comments until 5:00 p.m., Monday, August 3, 2009, which
is 31 days after publication in the Texas Register
. Comments should refer to Docket No. 9880. 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
Ms. McDaniel at (512) 463-7166. The status of Commission rulemakings
in progress is available at www.rrc.state.tx.us/rules/proposed.php.
The Commission proposes the amendments under 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
.; and Texas Utilities Code, §121.211,
as amended by Senate Bill 1658, 81st Texas Legislature (2009), which
authorizes the Railroad Commission to adopt, by rule, an annual inspection
fee not to exceed $1.00 for each service line reported by a natural
gas distribution system subject to Chapter 121 on the Distribution
Annual Report, Form RSPA F7100.1-1; Senate Bill 1 (General Appropriations
Act), 81st Texas Legislature (2009), Article VI, Railroad Commission
Rider 11, which requires the Commission to assess fees sufficient
to generate during the 2010 - 2011 biennium revenue to cover the general
revenue appropriation; and Texas Government Code, §2001.006,
which authorizes a state agency, in preparation for the implementation
of legislation that has become law but has not taken effect, to adopt
a rule or take other administrative action that the agency determines
is necessary or appropriate and that the agency would have been authorized
to take had the legislation been in effect at the time of the action.
Texas Utilities Code, §§121.201 - 121.211, as amended
by Senate Bill 1658, 81st Texas Legislature (2009); and 49 United
States Code Annotated, §§60101, et seq
., are affected by the proposed amendments.
Statutory authority: Texas Utilities Code, §§121.201
- 121.211, as amended by Senate Bill 1658, 81st Texas Legislature
(2009); 49 United States Code Annotated, §§60101, et seq
., and Texas Government Code, §2001.006.
Cross-reference to statute: Texas Utilities Code, Chapter 121,
as amended by Senate Bill 1658, 81st Texas Legislature (2009); 49
United States Code Annotated, Chapter 601; 81st Texas Legislature (2009).
Issued in Austin, Texas on June 18, 2009.
§8.201.Pipeline Safety Program Fees.
(a) (No change.)
(b) The Commission hereby assesses each operator of
a natural gas distribution system an annual pipeline safety program
fee of $0.70 [
(1) Each operator of a natural gas distribution system
shall calculate the total amount of the annual pipeline safety program
fee to be paid to the Commission by multiplying the number of services
listed in Part B, Section 3, of Department of Transportation (DOT)
Distribution Annual Report, Form F7100.1-1, due to be filed on March
15 of each year by $0.70 [
(2) (No change.)
(3) Each operator of a natural gas distribution system
shall recover, by a surcharge to its existing rates, the amount the
operator paid to the Commission under paragraph (1) of this subsection.
The surcharge:
(A) - (C) (No change.)
(D) shall not exceed $0.70 [
(E) (No change.)
(4) - (6) (No change.)
(c) - (d) (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 June 18, 2009.
TRD-200902476
Mary Ross McDonald
Managing Director
Railroad Commission of Texas
Proposed date of adoption: September 1, 2009
For further information, please call: (512) 475-1295
SUBCHAPTER B. PROPANE CONSUMER REBATE PROGRAM
$0.50] for each service (service
line) reported to be in service at the end of each calendar year by
each system operator on the Distribution Annual Report, Form F7100.1-1,
to be filed on March 15 of each year.
$0.50].
$0.50]
per service or service line; and
CHAPTER 15. ALTERNATIVE FUELS RESEARCH AND EDUCATION DIVISION