TITLE 16. ECONOMIC REGULATION

PART 1. RAILROAD COMMISSION OF TEXAS

CHAPTER 8. PIPELINE SAFETY REGULATIONS

SUBCHAPTER C. REQUIREMENTS FOR GAS PIPELINES ONLY

The Railroad Commission of Texas proposes amendments to §8.201, relating to Pipeline Safety and Regulatory Program Fees, to implement House Bill 4042, 89th Texas Legislature (Regular Session, 2025). The bill removes the specification that gas must be natural gas with respect to gas distribution pipelines, gas master-metered pipelines, gas distribution systems, and gas master-metered systems whose operators may be subject to annual pipeline safety and regulatory fees.

The Commission proposes amendments throughout the rule to remove the word "natural" from the rule text.

Stephanie Weidman, Pipeline Safety Director, Oversight and Safety Division, has determined there will be no cost to the Commission as a result of the proposed amendments. Ms. Weidman has determined that for the first five years the amendments will be in effect, there will be no fiscal implications for local governments as a result of enforcing the amendments.

Ms. Weidman has also determined that the public benefit anticipated as a result of enforcing or administering the amendments will ensure consistency with Texas statutes.

Ms. Weidman has determined that for each year of the first five years that the amendments will be in effect, there will be minimal additional economic costs for persons required to comply as a result of Commission adoption of the proposed amendments, namely the affected propane distribution operators. The Commission's most recent information from the calendar year 2024 annual reports indicate there are eight distribution operators with a total of 18,838 service lines; if those operators were paying the fee, the cost would be $18,838.

In accordance with Texas Government Code, §2006.002, the Commission has determined there will be no adverse economic effect on rural communities, small businesses or micro-businesses resulting from the proposed amendments; although some affected distribution operators may meet the definition of small business under §2006.001, any costs they incur under the amendments may be recovered from their customers pursuant to subsection (b)(3) of this rule; therefore, the Commission has not prepared the economic impact statement or the regulatory flexibility analysis required under §2006.002.

The Commission has determined that the proposed rulemaking will not affect a local economy; therefore, pursuant to Texas Government Code, §2001.022, the Commission is not required to prepare a local employment impact statement for the proposed rule.

The Commission has determined that the proposed amendments do not meet the statutory definition of a major environmental rule as set forth in Texas Government Code, §2001.0225; therefore, a regulatory analysis conducted pursuant to that section is not required.

During the first five years that the rule would be in effect, the proposed amendments would not: create or eliminate a government program; create or eliminate any employee positions; require an increase or decrease in future legislative appropriations; increase fees paid to the agency; create a new regulation; increase or decrease the number of individuals subject to the rule's applicability; expand, limit, or repeal an existing regulation; or affect the state's economy.

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.texas.gov/general-counsel/rules/comment-form-for-proposed-rulemakings; or by electronic mail to rulescoordinator@rrc.texas.gov. The Commission will accept comments until 5:00 p.m., on Monday, December 15, 2025. The Commission finds that this comment period is reasonable because the proposal and an online comment form will be available on the Commission's web site more than two weeks prior to Texas Register publication of the proposal, giving interested persons additional time to review, analyze, draft, and submit comments. 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. Weidman at (512) 463-2519. The status of Commission rulemakings in progress is available at www.rrc.texas.gov/general-counsel/rules/proposed-rules. Once received, all comments are posted on the Commission's website at https://rrc.texas.gov/general-counsel/rules/proposed-rules/. If you submit a comment and do not see the comment posted at this link within three business days of submittal, please call the Office of General Counsel at (512) 463-7149. The Commission has safeguards to prevent emailed comments from getting lost; however, your operating system's or email server's settings may delay or prevent receipt.

The Commission proposes the amendments under Texas Natural Resources Code, §81.051 and §81.052, which give the Commission jurisdiction over all common carrier pipelines in Texas, persons owning or operating pipelines in Texas, and their pipelines and oil and gas wells, and authorize the Commission to adopt all necessary rules for governing and regulating persons and their operations under the jurisdiction of the Commission; and Texas Utilities Code, §121.201, §121.211, §121.213, and §121.214, which authorize the Commission to adopt and collect pipeline safety and regulatory program fees.

Statutory authority: Texas Natural Resources Code, §81.051, §81.052; and Texas Utilities Code, §121.201, §121.211; §121.213, §121.214.

Cross-reference to statute: Texas Natural Resources Code, Chapter 81; and Texas Utilities Code, Chapter 121.

§8.201. Pipeline Safety and Regulatory Program Fees.

(a) Application of fees. Pursuant to Texas Utilities Code, §121.211, the Commission establishes a pipeline safety and regulatory program fee, to be assessed annually against operators of [natural] gas distribution pipelines and pipeline facilities and [natural] gas master metered pipelines and pipeline facilities subject to the Commission's jurisdiction under Texas Utilities Code, Title 3. The total amount of revenue estimated to be collected under this section does not exceed the amount the Commission estimates to be necessary to recover the costs of administering the pipeline safety and regulatory programs under Texas Utilities Code, Title 3, excluding costs that are fully funded by federal sources for any fiscal year.

(b) Gas [Natural gas] distribution systems. The Commission hereby assesses each operator of a [natural] gas distribution system an annual pipeline safety and regulatory program fee of $1.00 for each service (service line) in service at the end of each calendar year as reported by each system operator on the U.S. Department of Transportation (DOT) Gas Distribution Annual Report, Form PHMSA F7100.1-1 due on March 15 of each year.

(1) Each operator of a [natural] gas distribution system shall calculate the annual pipeline safety and regulatory program total to be paid to the Commission by multiplying the $1.00 fee by the number of services listed in Part B, Section 3, of Form PHMSA F7100.1-1, due on March 15 of each year.

(2) Each operator of a [natural] gas distribution system shall remit to the Commission on March 15 of each year the amount calculated under paragraph (1) of this subsection. Payments shall be made using the Commission's online application available on the Commission's website.

(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) shall be a flat rate, one-time surcharge;

(B) shall not be billed before the operator remits the pipeline safety and regulatory program fee to the Commission;

(C) shall be applied in the billing cycle or cycles immediately following the date on which the operator paid the Commission;

(D) shall not exceed $1.00 per service or service line; and

(E) shall not be billed to a state agency, as that term is defined in Texas Utilities Code, §101.003.

(4) No later than 90 days after the last billing cycle in which the pipeline safety and regulatory program fee surcharge is billed to customers, each operator of a [natural] gas distribution system shall file with the Commission's Oversight and Safety Division a report showing:

(A) the pipeline safety and regulatory program fee amount paid to the Commission;

(B) the unit rate and total amount of the surcharge billed to each customer;

(C) the date or dates on which the surcharge was billed to customers; and

(D) the total amount collected from customers from the surcharge.

(5) Each operator of a [natural] gas distribution system that is a utility subject to the jurisdiction of the Commission pursuant to Texas Utilities Code, Chapters 101 - 105, shall file a generally applicable tariff for its surcharge in conformance with the requirements of §7.315 of this title (relating to Filing of Tariffs).

(6) Amounts recovered from customers under this subsection by an investor-owned [natural] gas distribution system or a cooperatively owned [natural] gas distribution system shall not be included in the revenue or gross receipts of the system for the purpose of calculating municipal franchise fees or any tax imposed under Subchapter B, Chapter 182, Tax Code, or under Chapter 122, nor shall such amounts be subject to a sales and use tax imposed by Chapter 151, Tax Code, or Subtitle C, Title 3, Tax Code.

(c) Master [Natural gas master] meter systems. The Commission hereby assesses each [natural gas] master meter system an annual pipeline safety and regulatory program fee of $100 per master meter system.

(1) Each operator of a [natural gas] master meter system shall remit to the Commission the annual pipeline safety and regulatory program fee of $100 per master meter system no later than June 30 of each year. Payments shall be made using the Commission's online application available on the Commission's website.

(2) The Commission shall send an invoice to each affected [natural gas] master meter system operator no later than April 30 of each year as a courtesy reminder. The failure of a [natural gas] master meter system operator to receive an invoice shall not exempt the [natural gas] master meter system operator from its obligation to remit to the Commission the annual pipeline safety and regulatory program fee on June 30 each year.

(3) Each operator of a [natural gas] master meter system shall recover as a surcharge to its existing rates the amounts paid to the Commission under paragraph (1) of this subsection.

(4) No later than 90 days after the last billing cycle in which the pipeline safety and regulatory program fee surcharge is billed to customers, each [natural gas] master meter system operator shall file with the Oversight and Safety Division a report showing:

(A) the pipeline safety and regulatory program fee amount paid to the Commission;

(B) the unit rate and total amount of the surcharge billed to each customer;

(C) the date or dates on which the surcharge was billed to customers; and

(D) the total amount collected from customers from the surcharge.

(d) Late payment penalty. If the operator of a [natural] gas distribution system or a [natural gas] master meter system does not remit payment of the annual pipeline safety and regulatory program fee to the Commission within 30 days of the due date, the Commission shall assess a late payment penalty of 10 percent of the total assessment due under subsection (b) or (c) of this section, as applicable, and shall notify the operator of the total amount due to the Commission.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on October 28, 2025.

TRD-202503907

Olivia Alland

Attorney, Office of General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: December 14, 2025

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

PART 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION

CHAPTER 63. FINANCIAL CRIMES INTELLIGENCE CENTER

The Texas Department of Licensing and Regulation (Department) proposes new rules at 16 Texas Administrative Code (TAC), Chapter 63, §§63.1 - 63.5, regarding the Financial Crimes Intelligence Center. These proposed changes are referred to as "proposed rules."

EXPLANATION OF AND JUSTIFICATION FOR THE RULES

The rules under 16 TAC, Chapter 63, implement Texas Business and Commerce Code Chapter 607A, Payment Card Skimmers on Electronic Terminals.

The proposed rules implement Senate Bill (SB) 2371, 89th Legislature, Regular Session (2025) which requires merchants to report skimmers on electronic terminals to law enforcement and the Financial Crimes Intelligence Center (FCIC). In these proposed rules, electronic terminals are certain electronic devices, such as point-of-sale terminals, that consumers use to conduct transactions. Skimmers are devices that criminals place on or in electronic terminals and are capable of unlawfully intercepting electronic communications or data to commit fraud. The proposed rules are necessary to establish the procedures merchants must follow when reporting a skimmer to the FCIC and removing the skimmer from electronic terminals.

SECTION-BY-SECTION SUMMARY

The proposed rules create §63.1, Authority. This new rule identifies the authority under which the rules are created.

The proposed rules create §63.2, Definitions. This new rule adds definitions for "Center," "Electronic Terminal," "Merchant," and "Skimmer." The proposed rule in this section establishes what electronic terminals and skimmers are and who is considered a merchant subject to the rules.

The proposed rules create §63.3, Merchant Duties Upon Skimmer Discovery. This new rule sets out what merchants must do when they discover, or are notified, of a skimmer on an electronic device. The proposed subsection (a) lists the actions a merchant must take upon discovery of a skimmer. Proposed subsection (b) requires merchants to cooperate with law enforcement and the FCIC in the investigation of a suspected or discovered skimmer.

The proposed rules create §63.4, Unauthorized Removal of Skimmers Prohibited. This new rule controls the removal of skimmers by merchants. The proposed subsection (a) specifies the conditions under which merchants may remove skimmers from electronic terminals. Proposed subsection (b) allows merchants to remove skimmers 24 hours after reporting the skimmer if law enforcement or the FCIC has not arrived to remove the skimmer. Proposed subsection (c) sets the procedure that a merchant who is removing a skimmer must follow in order to preserve evidence.

The proposed rules create §63.5, Administrative Sanctions and Penalties. This new rule establishes that violations of Texas Business and Commerce Code, Chapter 607A, this chapter, or any other rule or order may result in penalties and/or sanctions.

FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT

Tony Couvillon, Senior Policy Research and Budget Analyst, has determined that for each year of the first five years the proposed rules are in effect, there are no estimated additional costs or reductions in costs to state or local government as a result of enforcing or administering the proposed rules.

Mr. Couvillon, has determined that for each year of the first five years the proposed rules are in effect, there are no estimated additional costs or reductions in costs to state or local government as a result of enforcing or administering the proposed rules.

Mr. Couvillon has determined that for each year of the first five years the proposed rules are in effect, enforcing or administering the proposed rules does not have foreseeable implications relating to costs or revenues of local governments.

LOCAL EMPLOYMENT IMPACT STATEMENT

Because Mr. Couvillon has determined that the proposed rules will not affect a local economy, the agency is not required to prepare a local employment impact statement under Texas Government Code §2001.022.

PUBLIC BENEFITS

Mr. Couvillon also has determined that for each year of the first five-year period the proposed rules are in effect, the public benefit will be increased protection by requiring that all discovered skimmers are dealt with consistently and appropriately, which may reduce the financial losses due to skimmer fraud. Merchants are required to report the discovery of skimmers to the FCIC and law enforcement. As a result of reporting, the FCIC will be able to conduct skimmer investigations to ensure that additional skimmers are not present at the retail location.

PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL

Mr. Couvillon has determined that for each year of the first five-year period the proposed rules are in effect, there are no anticipated economic costs to persons who are required to comply with the proposed rules.

FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMUNITIES

There will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of the proposed rules. Because the agency has determined that the proposed rule will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code §2006.002, is not required.

ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT

The proposed rules do not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. Therefore, the agency is not required to take any further action under Texas Government Code §2001.0045.

GOVERNMENT GROWTH IMPACT STATEMENT

Pursuant to Texas Government Code §2001.0221, the agency provides the following Government Growth Impact Statement for the proposed rules. For each year of the first five years the proposed rules will be in effect, the agency has determined the following:

1. The proposed rules do not create or eliminate a government program.

2. Implementation of the proposed rules does not require the creation of new employee positions or the elimination of existing employee positions.

3. Implementation of the proposed rules does not require an increase or decrease in future legislative appropriations to the agency.

4. The proposed rules do not require an increase or decrease in fees paid to the agency.

5. The proposed rules create a new regulation. These new regulations are necessary to implement Senate Bill 2371 (Tex. 89th Leg., R.S. 2025).

6. The proposed rules do not expand, limit, or repeal an existing regulation.

7. The proposed rules do not increase or decrease the number of individuals subject to the rules' applicability.

8. The proposed rules do not positively or adversely affect this state's economy.

TAKINGS IMPACT ASSESSMENT

The Department has determined that no private real property interests are affected by the proposed rules and the proposed rules do not restrict, limit, or impose a burden on an owner's rights to his or her private real property that would otherwise exist in the absence of government action. As a result, the proposed rules do not constitute a taking or require a takings impact assessment under Texas Government Code §2007.043.

PUBLIC COMMENTS AND INFORMATION RELATED TO THE COST, BENEFIT, OR EFFECT OF THE PROPOSED RULES

The Department is requesting public comments on the proposed rules and information related to the cost, benefit, or effect of the proposed rules, including any applicable data, research, or analysis. Any information that is submitted in response to this request must include an explanation of how and why the submitted information is specific to the proposed rules. Please do not submit copyrighted, confidential, or proprietary information.

Comments on the proposed rules and responses to the request for information may be submitted electronically on the Department's website at https://ga.tdlr.texas.gov:1443/form/Ch63_Rule_Making; by facsimile to (512) 475-3032; or by mail to Shamica Mason, Legal Assistant, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711. The deadline for comments is 30 days after publication in the Texas Register.

STATUTORY AUTHORITY

The proposed rules are proposed under Texas Occupations Code, Chapter 51, which authorizes the Texas Commission of Licensing and Regulation, the Department's governing body, to adopt rules as necessary to implement that chapter and any other law establishing a program regulated by the Department. The proposed rules are also proposed under Texas Business and Commerce Code Chapter 607A.

The statutory provisions affected by the proposed rules are those set forth in Texas Occupations Code, Chapters 51 and Texas Business and Commerce Code Chapter 607A. No other statutes, articles, or codes are affected by the proposed rules.

The legislation that enacted the statutory authority under which the proposed rules are proposed to be adopted is Senate Bill 2371, 89th Legislature, Regular Session (2025).

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on November 3, 2025.

TRD-202503973

Doug Jennings

General Counsel

Texas Department of Licensing and Regulation

Earliest possible date of adoption: December 14, 2025

For further information, please call: (512) 300-8334