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