H.B. No. 3273

	AN ACT
	relating to the powers and duties of the Railroad Commission of
	Texas; providing an administrative penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subchapter C, Chapter 81, Natural Resources
	Code, is amended by adding Sections 81.058, 81.059, 81.060, and
	81.061 to read as follows:
	Sec. 81.058.  ADMINISTRATIVE PENALTY FOR CERTAIN NATURAL
	GAS-RELATED ACTIVITIES. (a)  The commission, after notice and
	opportunity for hearing, may impose an administrative penalty
	against a purchaser, transporter, gatherer, shipper, or seller of
	natural gas, a person described by Section 81.051(a) or 111.081(a),
	or any other entity under the jurisdiction of the commission under
	this code that the commission determines has:
	(1)  violated a commission rule adopting standards or a
	code of conduct for entities in the natural gas industry
	prohibiting unlawful discrimination; or
	(2)  unreasonably discriminated against a seller of
	natural gas in the purchase of natural gas from the seller.
	(b)  The commission, after notice and opportunity for
	hearing, may impose an administrative penalty against a purchaser,
	transporter, or gatherer of natural gas if the commission
	determines that the person engaged in prohibited discrimination
	against a shipper or seller of natural gas because the shipper or
	seller filed a formal or informal complaint with the commission
	against the person relating to the person's purchase,
	transportation, or gathering of the gas.
	(c)  The commission, after notice and opportunity for
	hearing, may impose an administrative penalty against a purchaser,
	transporter, gatherer, shipper, or seller of natural gas who is a
	party to an informal complaint resolution proceeding and is
	determined by the commission to have:
	(1)  failed to participate in the proceeding; or
	(2)  failed to provide information requested by a
	mediator in the proceeding.
	(d)  An administrative penalty imposed under this section
	may not exceed $5,000 a day for each violation. Each day a
	violation continues or occurs is a separate violation for purposes
	of imposing a penalty under this section.
	(e)  If the commission determines after notice and
	opportunity for hearing that an entity has engaged in prohibited
	discrimination for which a penalty may be imposed under this
	section, the commission may issue any order necessary and
	reasonable to prevent the discrimination from continuing.
	(f)  The remedy provided by this section is cumulative of any
	other remedy the commission may order.
	Sec. 81.059.  APPOINTMENT OF MEDIATORS FOR INFORMAL
	COMPLAINTS. (a)  The commission may provide for the appointment of
	a commission staff member as the mediator of an informal complaint
	filed with the commission, or the parties may agree to employ and
	pay an independent mediator for the purpose of mediating the
	complaint.
	(b)  If the parties request that the mediation be conducted
	at a location other than the offices of the commission in Austin,
	the parties shall reimburse the commission for the commission's
	costs related to travel to those other locations.
	(c)  This section does not prohibit the commission from
	requiring that the parties participate in a formal complaint
	resolution proceeding.
	(d)  At least annually, the commission shall notify oil and
	gas producers of the existence of any informal complaint resolution
	process provided for by the commission.
	(e)  Filing an informal complaint is not a prerequisite for
	filing a formal complaint.
	Sec. 81.060.  CONFIDENTIALITY PROVISIONS. (a)  A
	confidentiality provision may not be required in a contract to
	which a producer is a party for the sale, transportation, or
	gathering of natural gas that is entered into on or after September
	1, 2007.
	(b)  A confidentiality provision in a contract to which a
	producer is a party for the sale, transportation, or gathering of
	natural gas that was entered into before September 1, 2007, becomes
	unenforceable on the date the term of the contract expires.
	Sec. 81.061.  AUTHORITY TO ESTABLISH MARKET-BASED RATES.
	(a)  This section does not apply to rates established under Chapter
	103, Utilities Code, or Subchapter C or G, Chapter 104, of that
	code.
	(b)  The commission may use a cost-of-service method or a
	market-based rate method in setting a rate in a formal rate
	proceeding.
	(c)  On the filing of a complaint by a shipper or seller of
	natural gas, the commission may set a transportation or gathering
	rate in a formal rate proceeding if the commission determines that
	the rate is necessary to remedy unreasonable discrimination in the
	provision of transportation or gathering services. The commission
	may set a rate regardless of whether the transporter or gatherer is
	classified as a utility by other law.
	SECTION 2.  This Act takes effect September 1, 2007.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 3273 was passed by the House on May 2,
	2007, by the following vote:  Yeas 147, Nays 0, 2 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 3273 was passed by the Senate on May
	23, 2007, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor