TITLE 16. ECONOMIC REGULATION

PART 1. RAILROAD COMMISSION OF TEXAS

CHAPTER 3. OIL AND GAS DIVISION

The Railroad Commission of Texas proposes amendments to §3.15, relating to Surface Equipment Removal Requirements and Inactive Wells, and §3.107, relating to Penalty Guidelines for Oil and Gas Violations, to implement House Bill 2663, 89th Texas Legislature (Regular Session, 2025). The bill amends Texas Natural Resources Code §89.029 to require an operator who is applying for a plugging extension for a well that has been inactive for at least 10 years to affirm to the Commission it has removed all equipment associated with providing electric power to the production site, unless the equipment is owned by a utility provider, as defined by Texas Utilities Code §31.002. The bill also requires the Commission to assess a penalty of up to $25,000 if an operator falsely files this affirmation.

The Commission proposes amendments in §3.15(f)(2)(A) to add a reference to Texas Natural Resources Code §89.029.

The Commission proposes amendments in §3.15(f)(2)(A)(ii) to add wording that an operator who is applying for a plugging extension for a well that has been inactive for at least 10 years to affirm that equipment associated with providing electric service has been removed. This new provision does not apply to equipment owned by an electric utility.

The Commission proposes amendments to the Figure in §3.107(j) to add the new penalty.

David Lindley, Assistant Director, Oil and Gas Division, has determined there will be no cost to the Commission as a result of the proposed amendments. Mr. Lindley 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.

Mr. Lindley has also determined that the public benefit anticipated as a result of enforcing or administering the amendments will be the reduction of wildfire risks, improvements in well-site safety, proper decommissioning of inactive wells through a well operator's written affirmation regarding the removal of equipment associated with providing electric service to the well's production site, and penalties issued to operators that do not comply with the new provisions.

Mr. Lindley has determined that for each year of the first five years that the amendments will be in effect, there will be no additional economic costs for persons required to comply as a result of Commission adoption of the proposed amendments. A person who violates the rule may have an additional cost of paying the penalty.

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; 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, October 6, 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 Mr. Lindley at (512) 463-6217. 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 provide the Commission with jurisdiction over all persons owning or engaged in drilling or operating oil or gas wells 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 Texas Natural Resources Code, §89.023, which authorizes the Commission to adopt rules relating to the definition of active operation.

Statutory authority: Texas Natural Resources Code, §§81.051, 81.052, 85.042, 85.202, 86.041, 86.042, 89.023.

Cross-reference to statute: Texas Natural Resources Code, Chapter 81, 85, 86, and 89.

§3.15. Surface Equipment Removal Requirements and Inactive Wells.

(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise:

(1) Active operation--Regular and continuing activities related to the production of oil and gas for which the operator has all necessary permits. In the case of a well that has been inactive for 12 consecutive months or longer and that is not permitted as a disposal or injection well, the well remains inactive for purposes of this section, regardless of any minimal activity, until the well has reported production of at least five barrels of oil for oil wells or 50 Mcf of gas for gas wells each month for at least three consecutive months, or until the well has reported production of at least one barrel of oil for oil wells or at least one Mcf of gas for gas wells each month for 12 consecutive months.

(2) Cost calculation for plugging an inactive well--The cost, calculated by the Commission or its delegate, for each foot of well depth plugged based on average actual plugging costs for wells plugged by the Commission for the preceding state fiscal year for the Commission Oil and Gas Division district in which the inactive well is located.

(3) Delinquent inactive well--An inactive well for which, after notice and opportunity for a hearing, the Commission or its delegate has not extended the plugging deadline.

(4) Enhanced oil recovery (EOR) project--A project that does not include a water disposal project and is:

(A) a Commission-approved EOR project that uses any process for the displacement of oil or other hydrocarbons from a reservoir other than primary recovery and includes the use of an immiscible, miscible, chemical, thermal, or biological process;

(B) a certified project described by Texas Tax Code, §202.054; or

(5) Good faith claim--A factually supported claim based on a recognized legal theory to a continuing possessory right in a mineral estate, such as evidence of a currently valid oil and gas lease or a recorded deed conveying a fee interest in the mineral estate.

(6) Inactive well--An unplugged well that has been spudded or has been equipped with cemented casing and that has had no reported production, disposal, injection, or other permitted activity for a period of greater than 12 months.

(7) Operator designation form--A certificate of compliance and transportation authority or an application to drill, recomplete, and reenter that has been approved by the Commission or its delegate.

(8) Physical termination of electric service to the well's production site--Disconnection of the electric service to an inactive well site at a point on the electric service lines most distant from the production site toward the main supply line in a manner that will not interfere with electrical supply to adjacent operations, including cathodic protection units.

(b) Plugging of inactive bay and offshore wells required.

(1) An operator of an existing inactive bay or offshore well as defined in §3.78 of this title (relating to Fees and Financial Security Requirements) must:

(A) restore the well to active operation as defined by Commission rule;

(B) plug the well in compliance with a Commission rule or order; or

(C) obtain the approval of the Commission or its delegate of an extension of the deadline for plugging an inactive bay or offshore well.

(2) The Commission or its delegate may not approve an extension of the deadline for plugging an inactive bay or offshore well if the plugging of the well is otherwise required by Commission rules or orders.

(c) Extension of deadline for plugging an inactive bay or offshore well. The Commission or its delegate may administratively grant an extension of the deadline for plugging an inactive bay or offshore well as defined by Commission rules if:

(1) the operator has a current organization report;

(2) the operator has, and on request provides, evidence of a good faith claim to a continuing right to operate the well;

(3) the well and associated facilities are otherwise in compliance with all Commission rules and orders; and

(4) for a well more than 25 years old, the operator successfully conducts and the Commission or its delegate approves a fluid level or hydraulic pressure test establishing that the well does not pose a potential threat of harm to natural resources, including surface and subsurface water, oil, and gas.

(d) Plugging of inactive land wells required.

(1) An operator that assumes responsibility for the physical operation and control of an existing inactive land well must maintain the well and all associated facilities in compliance with all applicable Commission rules and orders and within six months after the date the Commission or its delegate approves an operator designation form must either:

(A) restore the well to active operation as defined by Commission rule;

(B) plug the well in compliance with a Commission rule or order; or

(2) The Commission or its delegate may not approve an extension of the deadline for plugging an inactive land well if the plugging of the well is otherwise required by Commission rules or orders.

(3) Except for an operator designation form filed for the purpose of a name change, the Commission or its delegate may not approve an operator designation form for an inactive land well until the operator satisfies the requirements of paragraph (1)(C) of this subsection.

(4) If an operator fails to restore the well to active operation as defined by Commission rule, plug the well in compliance with a Commission rule or order, or obtain an extension of the deadline for plugging an inactive well within six months after acquiring an inactive well, the Commission or its delegate may, after notice and opportunity for hearing, revoke the operator's organization report.

(5) The Commission or its delegate may approve an organization report that is delinquent or has been revoked if the Commission or its delegate simultaneously approves extensions of the deadline for plugging the operator's inactive wells.

(e) Extension of deadline for plugging an inactive land well. The Commission or its delegate may administratively grant an extension of the deadline for plugging an inactive land well if:

(1) the Commission or its delegate approves the operator's Application for an Extension of Deadline for Plugging an Inactive Well (Commission Form W-3X);

(2) the operator has a current organization report;

(3) the operator has, and on request provides evidence of, a good faith claim to a continuing right to operate the well;

(4) the well and associated facilities are otherwise in compliance with all Commission rules and orders; and

(5) for a well more than 25 years old, the operator successfully conducts and the Commission or its delegate approves a fluid level or hydraulic pressure test establishing that the well does not pose a potential threat of harm to natural resources, including surface and subsurface water, oil, and gas.

(f) Application for an extension of deadline for plugging an inactive land well.

(1) This subsection does not apply to a bay well or an offshore well as those terms are defined in §3.78 of this title.

(2) An operator must include the following in an application for an extension of the deadline for plugging an inactive well:

(A) an affirmation made by an individual with personal knowledge of the physical condition of the inactive well pursuant to the provisions of Texas Natural Resources Code, §89.029 and §91.143, stating the following: that the operator has physically terminated electric service to the well's production site; and either:

(i) if the operator does not own the surface of the land where the well is located and the well has been inactive for at least five years but for less than 10 years as of the date of renewal of the operator's organization report, that the operator has emptied or purged of production fluids all piping, tanks, vessels, and equipment associated with and exclusive to the well; or

(ii) if the operator does not own the surface of the land where the well is located, and the well has been inactive for at least 10 years as of the date of renewal of the operator's organization report, that the operator has removed:

(I) all surface equipment and related piping, tanks, tank batteries, pump jacks, headers, fences, and firewalls; has closed all open pits; and has removed all junk and trash, as defined by Commission rule, associated with and exclusive to the well; and

(II) all equipment associated with providing electric service to the well's equipment production site, except for equipment owned by an electric utility, as defined by Section 31.002, Utilities Code; and

(B) documentation that the operator has satisfied at least one of the following requirements:

(i) for all inactive land wells that an operator has operated for more than 12 months, the operator has plugged or restored to active operation, as defined by Commission rule, 10% of the number of inactive land wells operated at the time of the last annual renewal of the operator's organization report;

(ii) if the operator is a publicly traded entity, for all inactive land wells, the operator has filed with the Commission a copy of the operator's federal documents filed to comply with Financial Accounting Standards Board Statement No. 143, Accounting for Asset Retirement Obligations, and an original executed Uniform Commercial Code Form 1 Financing Statement, filed with the Secretary of State, that names the operator as the "debtor" and the Railroad Commission of Texas as the "secured creditor" and specifies the funds covered by the documents in the amount of the cost calculation for plugging all inactive wells;

(iii) the filing of a blanket bond on Commission Form P-5PB(2), Blanket Performance Bond, a letter of credit on Commission Form P-5LC, Irrevocable Documentary Blanket Letter of Credit, or a cash deposit, in the amount of either the lesser of the cost calculation for plugging all inactive wells or $2 million;

(iv) for each inactive land well identified in the application, the Commission has approved an abeyance of plugging report and the operator has paid the required filing fee;

(v) for each inactive land well identified in the application, the operator has filed a statement that the well is part of a Commission-approved EOR project;

(vi) for each inactive land well identified in the application that is not otherwise required by Commission rule or order to conduct a fluid level or hydraulic pressure test of the well, the operator has conducted a successful fluid level test or hydraulic pressure test of the well and the operator has paid the required filing fee;

(vii) for each inactive land well identified in the application, the operator has filed Commission Form W-3X and the Commission or its delegate has approved a supplemental bond, letter of credit, or cash deposit in an amount at least equal to the cost calculation for plugging an inactive land well for each well specified in the application; or

(viii) for each time an operator files an application for a plugging extension and for each inactive land well identified in the application, the operator has filed Commission Form W-3X and the Commission or its delegate has approved an escrow fund deposit in an amount at least equal to 10% of the total cost calculation for plugging an inactive land well.

(g) Commission action on application for plugging extension.

(1) The Commission or its delegate shall administratively grant all applications for plugging extensions that meet the requirements of Commission rules.

(2) The Commission or its delegate may administratively deny an application for a plugging extension for an inactive well if the Commission or its delegate determines that:

(A) the applicant does not have an active organization report at the time the plugging extension application is filed;

(B) the applicant has not submitted all required filing fees and financial assurance for the requested plugging extension and for renewal of its organization report; or

(C) the applicant has not submitted a signed organization report for the applied-for extension year that qualifies for approval regardless of whether the applicant has complied with the inactive well requirements of this section.

(3) Except as provided in paragraph (2) of this subsection, if the Commission or its delegate determines that an organization report should be denied renewal solely because it does not meet the inactive well requirements of this section, a Commission delegate shall, within a reasonable time of not more than 14 days after receipt of the applicant's administratively complete organization report renewal packet, including all statutorily required fees and financial assurance:

(A) notify the operator of the determination;

(B) provide the operator with a written statement of the reasons for the determination; and

(C) notify the operator that it has 90 days from the expiration of its most recently approved organization report to comply with the requirements of this section.

(4) If, after the expiration of the 90-day period specified in paragraph (3)(C) of this subsection, the Commission or its delegate determines that the operator remains out of compliance with the requirements of this section, the Commission delegate shall mail the operator a written notice of this determination. The operator may request a hearing. If the operator fails to timely file a request for hearing and the required hearing fee, the Commission shall enter an order denying the plugging extension request and denying renewal of the operator's organization report without further notice or opportunity for hearing.

(5) To request a hearing, the operator must file a written request for hearing and the hearing fee of $4,500 with the Hearings Division, no later than 30 days from the date the written notice was mailed to the operator. In the request for hearing, the operator must identify by its assigned American Petroleum Institute (API) number each inactive well for which the operator is seeking a hearing to contest the determination that the well remains out of compliance. At the time an operator files a request for hearing under this subsection, the operator shall provide a list of affected persons to be given notice of the hearing. Affected persons shall include the owners of the surface estate of each tract on which a well that is the subject of the hearing request is located, the director of the Commission's Enforcement Section, and the district director of each Commission district in which the wells are located. The applicant's failure to diligently prosecute a hearing requested under this subsection may result in the application being involuntarily dismissed for want of prosecution on the motion of any affected person or on the Commission's own motion.

(6) If an operator files a timely plugging extension application that is not properly administratively denied for the reasons specified in paragraph (2) of this subsection, then the operator's previously approved organization report shall remain in effect until the Commission approves its plugging extension application or enters a final order denying the application.

(h) Revocation of extension. The Commission or its delegate may revoke an extension of the deadline for plugging an inactive well if the Commission or its delegate determines, after notice and an opportunity for a hearing, that the applicant is ineligible for the extension under the Commission's rules or orders.

(i) Removal of surface equipment for land wells inactive more than 10 years. Requirements to remove surface equipment for land wells inactive more than 10 years do not excuse an operator from compliance with all other applicable Commission rules and orders including the requirements in Chapter 4 of this title (relating to Environmental Protection).

(1) An operator of an inactive land well must leave a clearly visible sign as required by §3.3 of this title (relating to Identification of Properties, Wells, and Tanks) at the wellhead of the well and must maintain wellhead control as required by §3.13 of this title (relating to Casing, Cementing, Drilling, and Completion Requirements).

(2) An operator may not store surface equipment removed from an inactive land well on an active lease.

(3) An operator may be eligible for a temporary extension of the deadline for plugging an inactive land well or a temporary exemption from the surface equipment removal requirements if the operator is unable to comply with the requirements of subsection (f)(2)(A) of this section because of safety concerns or required maintenance of the well site and the operator includes with the application a written affirmation of the facts regarding the safety concerns or maintenance.

(4) An operator may be eligible for an extension of the deadline for plugging a well without complying with the surface equipment removal requirements for inactive land wells if the well is located on a unit or lease or in a field associated with an EOR project and the operator includes a statement in the written affirmation that the well is part of such a project. The exemption provided by this subsection applies only to the equipment associated with current and future operations of the project.

(j) Abeyance of plugging report.

(1) An operator that files an abeyance of plugging report must:

(A) pay an annual fee of $100 for each inactive land well covered by the report;

(B) use Commission Form W-3X on which the operator must specify the field and the covered wells within that field; and

(C) for each well, include a certification signed and sealed by a person licensed by the Texas Board of Professional Engineers or the Texas Board of Professional Geoscientists stating that the well has:

(i) a reasonable expectation of economic value in excess of the cost of plugging the well for the duration of the period covered by the report, based on the cost calculation for plugging an inactive well;

(ii) a reasonable expectation of being restored to a beneficial use that will prevent waste of oil or gas resources that otherwise would not be produced if the well were plugged; and

(iii) documentation demonstrating the basis for the affirmation of the well's future utility.

(2) Except as provided in paragraph (3) of this subsection, the Commission or its delegate may not transfer an abeyance of plugging report to a new operator of an existing inactive land well. The new operator of an existing inactive land well must file a new abeyance of plugging report or otherwise comply with the requirements of this subchapter not later than six months after the date the Commission or its delegate approves the new operator's request to be recognized as the operator of the well.

(3) The Commission or its delegate may transfer an abeyance of plugging report in the event of a change of name of an operator.

(k) Enhanced oil recovery (EOR) project.

(1) An inactive well is considered to be part of an EOR project if the well is located on a unit or lease or in a field associated with a Commission-approved EOR project.

(2) Except as provided in paragraph (3) of this subsection, the Commission and its delegate may not transfer a statement that an inactive well is part of an EOR project to a new operator of an existing inactive well. A new operator of an existing inactive well must file a new statement stating that the well is part of such an EOR project or otherwise comply with the provisions of this section not later than six months after the date the Commission or its delegate approves the new operator's request to be recognized as the operator of the well.

(3) The Commission or its delegate may transfer a statement that a well is part of an EOR project in the event of a change of name of an operator.

(l) Fluid level or hydraulic pressure test for inactive wells more than 25 years old.

(1) At least three days prior to the test, the operator must give the district office notice of the date and approximate time the operator intends to conduct a fluid level or hydraulic pressure test. The district office may require that a test be witnessed by a Commission employee. The district office may allow an operator to conduct a test even if notice of the test is provided to the district office fewer than three days prior to the test.

(2) No operator may conduct a test other than a fluid level or hydraulic pressure test without prior approval from the district director or the director's delegate.

(3) For each inactive well that is more than 25 years old and that has been inactive more than 10 years, the operator must perform either a fluid level test once every 12 months or a hydraulic pressure test once every five years and obtain the approval of the Commission or its delegate of the results of said tests.

(4) Notwithstanding the provisions of paragraph (1) of this subsection, an operator may conduct a hydraulic pressure test without prior approval from the district director or the director's delegate, provided that the operator gives the district office written notice of the date and approximate time for the test at least three days prior to the time the test will be conducted; the production casing is tested to a depth of at least 250 feet below the base of usable quality water strata or 100 feet below the top of cement behind the production casing, whichever is deeper; and the minimum test pressure is greater than or equal to 250 psig for a period of at least 30 minutes.

(5) Using Commission Form H-15, each operator must file in the Commission's Austin office the results of a successful fluid level test within 30 days of the date the test was performed. The results, if approved, are valid for a period of one year from the date of the test. Upon request by the Commission or its delegate, the operator must file the actual test data.

(6) Using Commission Form H-5 or Form H-15, each operator must file in the district office the results of a successful hydraulic pressure test, including the original pressure recording chart or its electronic equivalent, within 30 days of the date the test was performed. The results, if approved, are valid for a period of five years from the date of the test, unless the Commission or its delegate requires the operator to perform testing more frequently to ensure that the well does not pose a threat of harm to natural resources.

(7) An operator of an inactive well that is more than 25 years old may not return that inactive well to active operation unless the operator performs either a successful fluid level test of the well within 12 months prior to the return to activity or a successful hydraulic pressure test of the well within five years prior to the return to activity.

(m) Fluid level or hydraulic pressure test for inactive land well less than 25 years old.

(1) At least three days prior to the test, each operator must give the district office notice of the date and approximate time the operator intends to conduct a fluid level or hydraulic pressure test. The district office may require that a test be witnessed by a Commission employee. The district office may allow an operator to conduct a test even if notice of the test is provided to the district office fewer than three days prior to the test.

(2) No operator may conduct a test other than a fluid level or hydraulic pressure test without prior approval from the district director or the director's delegate.

(3) Notwithstanding the provisions of paragraph (1) of this subsection, an operator may conduct a hydraulic pressure test without prior approval from the district director or the director's delegate, provided that the operator gives the district office written notice of the date and approximate time for the test at least three days prior to the time the test will be conducted; the production casing is tested to a depth of at least 250 feet below the base of usable quality water strata or 100 feet below the top of cement behind the production casing, whichever is deeper; and the minimum test pressure is greater than or equal to 250 psig for a period of at least 30 minutes.

(4) An operator that files documentation of a fluid level test or a hydraulic pressure test for an inactive land well less than 25 years old in order to obtain a plugging extension must pay an annual fee of $50 for each well covered by the documentation.

(7) The Commission or its delegate may transfer documentation of the results of a fluid level or hydraulic pressure test to a new operator of an existing inactive land well that is less than 25 years old.

(n) Supplemental financial assurance.

(1) A supplemental bond, letter of credit, or cash deposit filed as part of an application for an extension for an inactive land well is in addition to any other financial assurance otherwise required of the operator or for the well.

(2) The Commission or its delegate may not transfer a supplemental bond, letter of credit, or cash deposit to a new operator of an existing inactive land well. A new operator of an existing inactive land well must file a new supplemental bond, letter of credit, or cash deposit or otherwise comply with the provisions of this section not later than six months after the date the Commission or its delegate approves an operator designation form.

(o) Escrow funds.

(1) An operator must deposit escrow funds with the Commission each time the operator files an application for an extension of the deadline for plugging an inactive well.

(2) The Commission or its delegate may release escrow funds deposited with the Commission only as prescribed by §3.78 of this title.

(p) Plugging more than 10% of inactive well inventory. If an operator plugs more than 10% of the number of inactive land wells during a 12-month organization report cycle, the Commission will count the number of plugged wells above 10% toward fulfillment of the 10% blanket option under subsection (f)(2)(B)(i) of this section during the next organization report cycle.

§3.107. Penalty Guidelines for Oil and Gas Violations.

(a) Policy. Improved safety and environmental protection are the desired outcomes of any enforcement action. Encouraging operators to take appropriate voluntary corrective and future protective actions once a violation has occurred is an effective component of the enforcement process. Deterrence of violations through penalty assessments is also a necessary and effective component of the enforcement process. A rule-based enforcement penalty guideline to evaluate and rank oil- and natural gas-related violations is consistent with the central goal of the Commission's enforcement efforts to promote compliance. Penalty guidelines set forth in this section will provide a framework for more uniform and equitable assessment of penalties throughout the state, while also enhancing the integrity of the Commission's enforcement program.

(b) Only guidelines. This section complies with the requirements of Texas Natural Resources Code, §81.0531 and §91.101, which provides the Commission with the authority to adopt rules, enforce rules, and issue permits relating to the prevention of pollution. The penalty amounts shown in the tables in this section are provided solely as guidelines to be considered by the Commission in determining the amount of administrative penalties for violations of provisions of Texas Natural Resources Code, Title 3; Texas Water Code, Chapters 26, 27, and 29, that are administered and enforced by the Commission; or the provisions of a rule adopted or order, license, permit, or certificate issued under Texas Natural Resources Code, Title 3, or Texas Water Code, Chapters 26, 27, and 29. This rule does not contemplate automatic enforcement. Violations can be corrected by operators before being referred to legal enforcement.

(c) Commission authority. The establishment of these penalty guidelines shall in no way limit the Commission's authority and discretion to cite violations and assess administrative penalties. The guideline minimum penalties listed in this section are for the most common violations cited; however, this is neither an exclusive nor an exhaustive list of violations that the Commission may cite. The Commission retains full authority and discretion to cite violations of Texas Natural Resources Code, Title 3; including Nat. Res. Code §91.101, which provides the Commission with the authority to adopt rules, enforce rules, and issue permits relating to the prevention of pollution; the provisions of Texas Water Code, Chapters 26, 27, and 29, that are administered and enforced by the Commission; and the provisions of a rule adopted or an order, license, permit, or certificate issued under Texas Natural Resources Code, Title 3, or Texas Water Code, Chapters 26, 27, and 29, and to assess administrative penalties in any amount up to the statutory maximum when warranted by the facts in any case, regardless of inclusion in or omission from this section.

(d) Factors considered. The amount of any penalty requested, recommended, or finally assessed in an enforcement action will be determined on an individual case-by-case basis for each violation, taking into consideration the following factors:

(1) the person's history of previous violations;

(2) the seriousness of the violation;

(3) any hazard to the health or safety of the public; and

(4) the demonstrated good faith of the person charged.

(e) Typical penalties. Regardless of the method by which the guideline typical penalty amount is calculated, the total penalty amount will be within the statutory limit.

(1) A guideline of typical penalties for violations of Texas Natural Resources Code, Title 3; the provisions of Texas Water Code, Chapters 26, 27, and 29, that are administered and enforced by the Commission; and the provisions of a rule adopted or an order, license, permit, or certificate issued under Texas Natural Resources Code, Title 3, or Texas Water Code, Chapters 26, 27, and 29, are set forth in Table 1.

Figure: 16 TAC §3.107(e)(1) (No change.)

(2) Guideline penalties for violations of §3.73 of this title, relating to Pipeline Connection; Cancellation of Certificate of Compliance; Severance, include additional penalty amounts that are based on four components. In combination, these four components yield the factor by which an additional penalty amount of $1,000 is multiplied. The various combinations of the components are set forth in Table 1A.

(A) The first component is the length of the violation. A low rating means the violation has been in existence less than three months. A medium rating means the violation has been outstanding for more than three months and up to one year. A high rating means the violation has been outstanding for more than one year.

(B) The second component is production value. A low rating means the value of the production is less than $5,000. A medium rating means the value of the production is more than $5,000 and up to $100,000. A high rating means the value of the production is more than $100,000.

(C) The third component is the number of unresolved severances. A low rating means there are fewer than two unresolved severances. A medium rating means there are more than two and up to six unresolved severances. A high rating means there are more than six unresolved severances.

(D) The fourth component is the basis of the severance. The letter "N" indicates that the severance is not pollution related. The letter "Y" indicates that the severance is pollution related.

Figure: 16 TAC §3.107(e)(2)(D) (No change.)

(f) Penalty enhancements for certain violations. For violations that involve threatened or actual pollution; result in threatened or actual safety hazards; or result from the reckless or intentional conduct of the person charged, the Commission may assess an enhancement of the guideline penalty amount. The enhancement may be in any amount in the range shown for each type of violation as shown in Table 2.

Figure: 16 TAC §3.107(f) (No change.)

(g) Penalty enhancements for certain violators. For violations in which the person charged has a history of prior violations within seven years of the current enforcement action, the Commission may assess an enhancement based on either the number of prior violations or the total amount of previous administrative penalties, but not both. The actual amount of any penalty enhancement will be determined on an individual case-by-case basis for each violation. The guidelines in Tables 3 and 4 are intended to be used separately. Either guideline may be used where applicable, but not both.

Figure 1: 16 TAC §3.107(g) (No change.)

Figure 2: 16 TAC §3.107(g) (No change.)

(h) Penalty reduction for accelerated settlement before hearing. The recommended monetary penalty for a violation may be reduced by up to 50% if the person charged agrees to an accelerated settlement before the Commission conducts an administrative hearing to prosecute a violation. Once the hearing is convened, the opportunity for the person charged to reduce the basic monetary penalty is no longer available. The reduction applies to the basic penalty amount requested and not to any requested enhancements.

(i) Demonstrated good faith. In determining the total amount of any monetary penalty requested, recommended, or finally assessed in an enforcement action, the Commission may consider, on an individual case-by-case basis for each violation, the demonstrated good faith of the person charged. Demonstrated good faith includes, but is not limited to, actions taken by the person charged before the filing of an enforcement action to remedy, in whole or in part, a violation or to mitigate the consequences of a violation.

(j) Penalty calculation worksheet. The penalty calculation worksheet shown in Table 5 lists the guideline minimum penalty amounts for certain violations; the circumstances justifying enhancements of a penalty and the amount of the enhancement; and the circumstances justifying a reduction in a penalty and the amount of the reduction.

Figure: 16 TAC §3.107(j) (.pdf)

[~~Figure: 16 TAC §3.107(j)~~]

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 August 19, 2025.

TRD-202502988

Natalie Dubiel

Assistant General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: October 5, 2025

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

CHAPTER 9. LP-GAS SAFETY RULES

SUBCHAPTER A. GENERAL REQUIREMENTS

The Railroad Commission of Texas (Commission) proposes the repeal of §9.14, relating to Military Fee Exemption, and proposes new §9.14, relating to Military Licensing and Fee Exemption. The Commission also proposes conforming amendments to §§9.2, 9.10, 9.13, and 9.20 relating to Definitions, Rules Examination, General Installers and Repairman Exemption, and Dispenser Operations Certificate Exemption. The Commission proposes the repeal, new rule, and amendments pursuant to House Bill (HB) 5629 (89th Legislature, Regular Session, 2025) which amended Occupations Code §§55.004, 55.0041, 55.0042, 55.005, and 55.009 and Senate Bill 1818 (89th Legislature, Regular Session, 2025) which amended Occupations Code §§55.004 and 55.0041.

HB 5629 amends current law governing state agencies that issue occupational licenses to military service members, military veterans, and military spouses, establishing new and streamlined requirements. The legislation amends provisions in §55.004, Occupations Code, related to the issuance of alternative licenses, and in §55.0041, Occupations Code, related to the recognition of out-of-state licenses. Pursuant to HB 5629, a state agency must issue an alternative license to a military service member, military veteran, or military spouse if the applicant either (1) holds a current license issued by another state that is similar in scope of practice to the state agency's license and is in good standing with the out-of-state licensing authority, or (2) held a license with the state agency within the preceding five years. Similarly, HB 5629 requires a state agency to recognize an out-of-state license for a military service member or a military spouse who (1) holds a current out-of-state license that is similar in scope of practice to the state agency's license, (2) is in good standing with the out-of-state licensing authority, and (3) submits certain required information in an affidavit. The legislation also clarifies the definition of what qualifies as "good standing", decreases application processing timelines from 30 business days to 10 business days, and requires a state agency to maintain a record of each complaint made against a military service member, military veteran, or military spouse to whom the agency issued a license and to publish such information on its website. Lastly, HB 5629 requires a state agency issuing an occupational license to waive license application and examination fees for military service members, military veterans, and military spouses. The Commission already complies with the requirement to waive license application and examination fees but streamlines those requirements in response to the legislation.

The Commission's Alternative Fuels Safety Department (AFS) issues LP-gas licenses to applicants that meet the requirements of Chapter 9 to perform LP-gas activities in Texas. AFS also issues certifications to qualified individuals, known as certificate holders or certified individuals, allowing them to perform certain LP-gas activities in Texas. Certificate holders must be in compliance with all applicable continuing education and training requirements, renewal requirements, and must be employed by an LP-gas licensee in accordance with §9.8(a) of this title (relating to Requirements and Application for a New Certificate).

Section 55.001 of the Occupations Code defines "license" as "a license, certificate, registration, permit, or other form of authorization required by law or a state agency rule that must be obtained by an individual to engage in a particular business." Accordingly, Chapter 55 and HB 5629 only apply to licenses, as defined by §55.001, that are issued to individuals. AFS typically issues LP-gas licenses to registered business entities, but on rare occasions may issue an LP-gas license to an individual operating as a sole proprietorship. Certifications, on the other hand, are issued only to individuals employed by an LP-gas licensee, provided they meet the applicable examination, continuing education, and renewal requirements in Chapter 9. Therefore, an LP-gas license issued to a sole proprietor and certifications issued under Chapter 9 are "licenses" under §55.001 and are subject to the provisions of HB 5629 and this rulemaking. Proposed subsection §9.14(a)(2) adopts the term "license" as defined in §55.001, Occupations Code, and therefore, usage of the word "license" in proposed §9.14 refers specifically to LP-gas licenses issued to individuals as sole proprietors and to certifications issued to individuals.

The Commission proposes amendments to §9.2(5)(F), the definition of "certificate holder", to clarify that an individual who holds an alternative license or the recognition of an out-of-state license pursuant to proposed §9.14 meets the definition of certificate holder.

Proposed new §9.14 includes retitling the rule to more accurately reflect its subject matter, reorganizing the rule for greater clarity in light of the changes to military fee exemption requirements under HB 5629, and incorporating new provisions related to alternative licensing and the recognition of out-of-state licenses as required by HB 5629.

Proposed §9.14(a)(1)-(2) clarifies that proposed §9.14 applies to licenses, military service members, military veterans, or military spouses as those terms are defined in §55.001, Occupations Code. Proposed §9.14(a)(3), in accordance with HB 5629, states that an individual is considered to be in good standing with another state's licensing authority if the individual holds a license that is current and has not been suspended, revoked, or voluntarily surrendered during an investigation for unprofessional conduct; has not been disciplined with the other state's licensing authority; and is not currently under investigation by the other state's licensing authority for unprofessional conduct. AFS will conduct reviews of each application submitted under new §9.14 to determine whether the applicant is in good standing with the other state's licensing authority. Additionally, proposed §9.14(a)(4) states that the Commission shall maintain a record of complaints made against a military service member, military veteran, or military spouse to whom AFS issues an alternative license or out-of-state recognition of a license and shall publish at least quarterly the complaint information on its website.

The Commission will need to set up a page on its website listing the complaints against the military service members that hold an alternative license or an out-of-state license recognized by the Commission. The website will need to be updated quarterly. The Commission will also need to create a new Form 16V for applications for an alternative license and a new Form 16M for applications for recognition of an out-of-state license.

Proposed subsection §9.14(b) contains the provisions for alternative licensing pursuant to HB 5629. Military service members, military veterans, and military spouses may apply for an alternative license by submitting a completed Form 16V to AFS. There are two avenues by which an applicant may receive an alternative license from AFS. First, an applicant may receive an alternative license from the Commission if the applicant holds a current license issued by another state's licensing authority that is similar in scope of practice to the requested LP-gas license issued by AFS and the applicant is in good standing with the other state's licensing authority. The applicant must submit a completed Form 16V, which includes as an attachment a copy of the current LP-gas license issued in the other state, a copy of military documentation reflecting the applicant's status as a military service member or military veteran, and any other documentation that may be requested by AFS. If the applicant is a military spouse, a copy of the marriage license must also be attached. Upon receipt of a completed Form 16V with all required attachments, AFS will conduct a review of the application to ensure the form and attachments are completed as required, will determine whether the other state's license is similar in scope of practice to the requested alternative license to be issued by AFS, and conduct due diligence to determine whether the applicant is in good standing with the other state's licensing authority.

Second, an applicant may receive an alternative license from the Commission if the applicant held an LP-gas license from the Commission within the five years preceding the application date. Those applicants are still required to complete Form 16V and must attach military documentation and a marriage license, if applicable. Regardless of which avenue an applicant uses to pursue an alternative license under proposed §9.14, AFS will issue the alternative license within 10 business days of the application date if the application meets the requirements of proposed §9.14 and HB 5629.

Proposed subsection §9.14(c) contains the provisions for the recognition of an out-of-state license pursuant to HB 5629. Military service members and military spouses are eligible to apply for the recognition of an out-of-state license by submitting a complete Form 16M to AFS. An applicant may receive the recognition of an out-of-state license from the Commission if the applicant holds a current license issued by another state's licensing authority that is similar in scope of practice to the requested LP-gas license issued by AFS. The applicant must submit a completed Form 16M, which includes as an attachment a copy of the current LP-gas license issued in the other state, a copy of military orders showing relocation to Texas, and any other documentation that may be requested by AFS. If the applicant is a military spouse, a copy of the marriage license must also be attached. Finally, the affidavit included in Form 16M must be signed and notarized by the applicant, affirming under penalty of perjury that: (1) the applicant is the person described and identified in the application; (2) all statements in the application are true, correct, and complete; (3) the applicant understands the scope of practice for the applicable license in this state and will not perform outside of that scope of practice; and (4) the applicant is in good standing in the state in which the applicant holds or has held an applicable license. Upon receipt of a completed Form 16V with all required attachments, AFS will conduct a review of the application to ensure the form, attachments, and affidavit are completed as required and will determine whether the other state's license is similar in scope of practice to the requested alternative license to be issued by AFS. AFS will recognize the out-of-state license within 10 business days of the application date if the application meets the requirements of proposed §9.14 and HB 5629.

Proposed §9.14(d) contains provisions for the exemption of license application and examination fees for military service members, military veterans, and military spouses. A service member may apply for exemption from a license application fee or examination fee by filing a completed Form 35 with AFS, including a copy of applicable military records and a copy of the applicant's driver's license or state-issued identification card. If the exemption is granted by AFS, the applicant should attach the exemption to the application for a license or examination to serve as notice of payment.

Proposed §9.14(e) contains provisions related to renewals of licenses. Alternative licenses and out-of-state recognitions are still required to submit renewals pursuant to Chapter 9 and are required to pay renewal fees. However, a military service member who fails to renew a license because the individual was on active duty is exempt from any increased fee or penalty imposed by AFS. Additionally, a military service member who holds a license is entitled to two years of additional time to complete continuing education requirements or any other requirement related to the renewal of the license.

The Commission proposes amendments to §§9.10(c)(4)(E), 9.13(g) and 9.20(8) to rename the title of §9.14 and to remove language related to military licensing fee exemptions as all rule language related to fee exemptions will be covered by proposed changes to proposed §9.14(d).

Karley Rudynski, Director, Alternative Fuels Safety Department, has determined that during the first year of the first five years the proposed repeal, new rule, and amendments would be in effect, there will be a programming cost to the Commission to make small changes to its Alternative Fuels Online System (AFOS) to accommodate applications, exemptions, and delayed expiration dates for active duty military members. There will be no other additional cost to state government as a result of enforcing and administering the repeal, new rule, and amendments as proposed. Any additional time to review and process license applications under proposed §9.14 will be subsumed by current staff. There is no fiscal effect on local government.

Ms. Rudynski has determined that for each year of the first five years that the proposed repeal, new rule, and amendments will be in effect, the primary public benefit resulting from implementing HB 5629 will be a streamlined application process for military members, military veterans, and military spouses in good standing with a licensing authority of another state meeting certain requirements to receive an alternative license from AFS, and a streamlined application process for military members and military spouses in good standing with a licensing authority of another state meeting certain requirements to receive the recognition of an out-of-state license from AFS.

Ms. Rudynski has determined that for each year of the first five years the proposed repeal, new rule, and amendments are in effect, there will be no increase in economic cost to the LP-gas industry.

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 repeal, new rule, and amendments. The proposed repeal, new rule, and amendments do not apply to rural communities and streamline and make efficient licensing requirements for individuals that may meet the definition of a small business or micro-business in §2006.001. Therefore, the Commission has not prepared the economic impact statement or regulatory flexibility analysis required under §2006.002(c).

The Commission has also determined that the proposed repeal, new rule, and amendments will not affect a local economy. Therefore, the Commission has not prepared a local employment impact statement pursuant to Texas Government Code §2001.022.

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

During the first five years that the repeal, new rule, and amendments would be in effect, the proposed repeal, new rule, and amendments would not: create or eliminate a government program; create new employee positions or eliminate any existing employee positions; increase or decrease future legislative appropriations to the agency; require an increase or decrease in fees paid to the agency; increase or decrease the number of individuals subject to the rule's applicability; or affect the state's economy. The proposed repeal, new rule, and amendments would create a new regulation in that it complies with HB 5629's requirements to issue alternative licenses or recognize out-of-state licenses if certain requirements are met. The proposed repeal, new rule, and amendments would also repeal current §9.14 relating to fee exemptions and re-adopt language to comply with HB 5629.

The Commission reviewed the proposed repeal, new rule, and amendments and found that they are neither identified in Coastal Coordination Act Implementation Rules, 31 TAC §29.11(b)(4), nor would they affect any action or authorization identified in Coastal Coordination Act Implementation Rules, 31 TAC §29.11(a)(3). Therefore, the proposed repeal, new rule, and amendments are not subject to the Texas Coastal Management Program.

Comments on the proposed repeal, new rule, and amendments 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, October 6, 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 website prior to Texas Register publication of the proposal, giving interested persons additional time to review, analyze, draft, and submit comments. The Commission cannot guarantee that comments submitted after the deadline will be considered. For further information, call Karley Rudynski, Director, Alternative Fuels Safety Department, at (512) 463-6828. The status of Commission rulemakings in progress is available at www.rrc.texas.gov/general-counsel/rules/proposed-rules.

16 TAC §§9.2, 9.10, 9.13, 9.14, 9.20

The Commission proposes the new rule and amendments under Texas Occupations Code, Chapter 55, which authorizes the Commission to promulgate rules pertaining to the issuance of occupational licenses to military service members, military veterans, and military spouses.

Statutory authority: Texas Occupations Code, Chapter 55, and Texas Natural Resources Code, §113.051.

Cross reference to statute: Texas Occupations Code, Chapter 55, and Texas Natural Resources Code, Chapter 113.

§9.2. Definitions.

In addition to the definitions in any adopted NFPA pamphlets, the following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.

(1) - (4) (No change.)

(5) Certificate holder--An individual:

(A) - (C) (No change.)

(D) who holds a current examination exemption certificate pursuant to §9.13 of this title (relating to General Installers and Repairman Exemption); [or]

(E) who holds a current Dispenser Operations certificate exemption pursuant to §9.20 of this title (relating to Dispenser Operations Certificate Exemption); or

(F) who holds an alternative license or a recognition by AFS of an out-of-state license pursuant to §9.14 of this title (relating to Military Licensing and Fee Exemption) and is in compliance with renewal requirements in §9.9 of this chapter (relating to Requirements for Certificate Holder Renewal).

(6) - (52) (No change.)

§9.10. Rules Examination.

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

(c) An individual who files LPG Form 16 and pays the applicable nonrefundable examination fee may take the rules examination

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

(4) Exam fees.

(A) - (D) (No change.)

(E) A military service member, military veteran, or military spouse shall be exempt from the examination fee pursuant to the requirements in §9.14 of this title (relating to Military Licensing and Fee Exemption). [An individual who receives a military fee exemption is not exempt from renewal, training, or continuing education fees specified in §9.9 of this title (relating to Requirements for Certificate Holder Renewal, §9.51 of this title, and §9.52 of this title (relating to Training and Continuing Education.]

(F) (No change.)

(5) - (6) (No change.)

(d) - (h) (No change.)

§9.13. General Installers and Repairman Exemption.

(a) - (f) (No change.)

(g) A military service member, military veteran, or military spouse shall be exempt from the original registration fee pursuant to the requirements in §9.14 of this title (relating to Military Licensing and Fee Exemption). [~~An individual who receives a military fee exemption is not exempt from renewal fees specified in §9.9 of this title.~~]

§9.14. Military Licensing and Fee Exemption.

(a) General Provisions.

(1) Applicability. This section applies to military service members, military veterans, or military spouses, as specified in this section and as those terms are defined in Texas Occupations Code, Chapter 55.

(2) License. For purposes of this section, a "license" means a license, certificate, registration, permit, or other form of authorization required by this chapter that must be obtained by an individual to engage in a particular business.

(3) Determination of Good Standing. For purposes of this section, an individual is in good standing with another state's licensing authority if the individual:

(A) holds a license that is current, has not been suspended or revoked, and has not been voluntarily surrendered during an investigation for unprofessional conduct;

(B) has not been disciplined by the licensing authority with respect to the license or individual's practice of the occupation for which the license is issued; and

(C) is not currently under investigation by the licensing authority for unprofessional conduct related to the individual's license or profession.

(4) Complaints and Reporting. The Commission shall maintain a record of each complaint made against a military service member, military veteran, or military spouse to whom AFS issues a license or who holds an out-of-state license the Commission recognizes. The Commission shall publish at least quarterly on its website the complaint information, including a general description of the disposition of each complaint.

(b) Alternative Licensing.

(1) A military service member, military veteran, or military spouse may apply to be issued an LP-gas license by the Commission if the military service member, military veteran, or military spouse:

(A) holds a current license issued by the licensing authority of another state that is similar in scope of practice to an LP-gas license issued by the Commission and is in good standing with the other state's licensing authority; or

(B) within the five years preceding the application date held an LP-gas license issued by the Commission.

(2) An application for an alternative license shall be made by submitting a completed Form 16V to AFS. The applicant must attach the following to Form 16V:

(A) a copy of the applicant's current LP-gas license issued by the licensing authority of another state, if applicable;

(B) a copy of military documentation showing the applicant's military status as a military service member or military veteran;

(D) any other information that may be required by AFS.

(3) Upon receipt of a completed Form 16V with required attachments, AFS shall:

(A) confirm with the other state that the military service member, military veteran, or military spouse is currently licensed and in good standing for the relevant business or occupation; and

(B) conduct a comparison of the other state's licensing requirements, statutes, and rules with AFS's licensing requirements to determine if the requirements are similar in scope of practice.

(4) AFS shall issue the alternative LP-gas license not later than the 10th business day after the date AFS receives an application for an alternative license in compliance with this subsection and section 55.004, Occupations Code (relating to Alternative Licensing for Military Service Members, Military Veterans, and Military Spouses).

(1) A military service member or military spouse may apply to engage in an LP-gas activity for which an LP-gas license is required by the Commission if the military service member or military spouse holds a current license issued by the licensing authority of another state that is similar in scope of practice to an LP-gas license issued by the Commission. A military service member or military spouse must receive a written recognition from AFS pursuant to this subsection before engaging in an LP-gas activity.

(2) An application for the recognition of an out-of-state LP-gas license shall be made by submitting a completed Form 16M to AFS. The applicant must be in good standing with the other state's licensing authority for Form 16M to be approved. The applicant must attach the following to a Form 16M:

(A) a copy of the applicant's current LP-gas license issued by the licensing authority of another state;

(B) a copy of military documentation showing the applicant's status as a military service member or a military spouse;

(D) if the applicant is a military spouse, a copy of the military spouse's marriage license; and

(E) any other information that may be required by AFS.

(3) Form 16M includes an affidavit that must be notarized by the applicant affirming under penalty of perjury that:

(A) the applicant is the person described and identified in the application;

(B) all statements in the application are true, correct, and complete;

(C) the applicant understands the scope of practice for the applicable license in this state and will not perform outside of that scope of practice; and

(D) the applicant is in good standing in the state in which the applicant holds an applicable license.

(4) Upon receipt of a completed Form 16M with required attachments, AFS shall conduct a comparison of the other state's license requirements, statutes, and rules with AFS's licensing requirements to determine if the requirements are similar in scope of practice.

(5) Not later than the 10th business day after AFS receives a completed Form 16M with required attachments, AFS will notify the applicant that:

(A) AFS recognizes the applicant's out-of-state license and will provide a written recognition document;

(B) the application is incomplete, noting the area of deficiency; or

(C) AFS is unable to recognize the applicant's out-of-state license because the Commission does not issue a license similar in scope of practice to the applicant's out-of-state license.

(6) If a military service member or military spouse is granted the written recognition of an out-of-state LP-gas license by the Commission, the following conditions apply:

(A) The military service member or military spouse shall comply with all other laws and regulations applicable to the LP-gas license in this state;

(B) The military service member or military spouse may only engage in the LP-gas activity authorized by the written recognition for the period during which the military service member is stationed at a military installation in Texas, or, with respect to a military spouse, the military service member to whom the spouse is married is stationed at a military installation in Texas; and

(C) In the event of a divorce or similar event that affects a person's status as a military spouse, the former spouse may continue to engage in the business or occupation under the authority of this section until the third anniversary of the date the spouse submitted the Form 16M.

(d) Fee Exemptions.

(1) The Commission shall waive the license application and examination fees for a military service member, military veteran, or military spouse. To receive a military fee exemption, an applicant for a fee exemption shall file with the Commission a Form 35 and any documentation required by this subsection.

(2) A military service member, military veteran, or military spouse shall submit the following documentation with Form 35:

(A) a copy of any military records showing the applicant's dates of service; and

(B) a copy of the applicant's driver's license or state-issued identification card.

(3) AFS shall review Form 35 and required documentation to determine if the requirements for the fee exemption have been met and shall notify the applicant of the determination in writing within 10 days.

(A) If all requirements have been met, the applicant may submit the application for license or examination and attach a copy of the written notice granting military fee exemption with the application to serve as notice of payment.

(B) If AFS has notified the applicant that the application is incomplete, the applicant shall provide any requested information or documentation within 10 days of the date of the notice.

(e) Renewals.

(1) A military service member, military veteran, or military spouse who receives an alternative license or recognition by AFS of an out-of-state license remains subject to all other renewal requirements in this chapter, including all applicable fees and training or continuing education courses.

(2) A service member who fails to timely renew a license because the individual was on active duty is exempt from any increased fee or penalty imposed by AFS.

(3) A military service member who holds a license is entitled to two years of additional time to complete:

(A) any continuing education requirements; and

(B) any other requirement related to the renewal of the military service member's license.

§9.20. Dispenser Operations Certificate Exemption.

An individual may perform work and directly supervise LP-gas activities requiring contact with LP-gas if the individual is granted the Dispenser Operations Certificate Exemption. The exemption may be obtained by completing the Dispensing Propane Safely course, including examination, and complying with paragraph (1) of this section or by completing a PERC-based training course and examination in accordance with paragraph (2) of this section.

(1) - (7) (No change.)

(8) A military service member, military veteran, or military spouse shall be exempt from the original registration fee pursuant to the requirements in §9.14 of this title (relating to Military Licensing and Fee Exemption). [~~An individual who receives a military fee exemption is not exempt from renewal fees specified in §9.9 of this title. fees.~~]

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 August 19, 2025.

TRD-202502991

Natalie Dubiel

Assistant General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: October 5, 2025

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

16 TAC §9.14

The Commission proposes the repeal under Texas Occupations Code, Chapter 55, which authorizes the Commission to promulgate rules pertaining to the issuance of occupational licenses to military service members, military veterans, and military spouses.

Statutory authority: Texas Occupations Code, Chapter 55, and Texas Natural Resources Code, §113.051.

Cross reference to statute: Texas Occupations Code, Chapter 55, and Texas Natural Resources Code, Chapter 113.

§9.14. Military Fee Exemption.

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 August 19, 2025.

TRD-202502992

Natalie Dubiel

Assistant General Counsel

Railroad Commission of Texas

Earliest possible date of adoption: October 5, 2025

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

CHAPTER 13. REGULATIONS FOR COMPRESSED NATURAL GAS (CNG)

SUBCHAPTER C. CLASSIFICATION, REGISTRATION, AND EXAMINATION

The Railroad Commission of Texas (Commission) proposes the repeal of §13.76, relating to Military Fee Exemption, and proposes new §13.76, relating to Military Licensing and Fee Exemption. The Commission also proposes conforming amendments to §§13.61 and 13.70, relating to License Categories, Container Manufacturer Registration, Fees, and Application for Licenses, Manufacturer Registrations, and Renewals; and Examination and Exempt Registration Requirements and Renewals. The Commission proposes the repeal, new rule, and amendments pursuant to House Bill (HB) 5629 (89th Legislature, Regular Session, 2025) which amended Occupations Code §§55.004, 55.0041, 55.0042, 55.005, and 55.009 and Senate Bill 1818 (89th Legislature, Regular Session, 2025) which amended Occupations Code §§55.004 and 55.0041.

The Commission's Alternative Fuels Safety Department (AFS) issues CNG licenses to applicants that meet the requirements of Chapter 13 to perform CNG activities in Texas. AFS also issues certifications to qualified individuals, known as certificate holders or certified individuals, allowing them to perform certain CNG activities in Texas. Certificate holders must be in compliance with all applicable continuing education and training requirements, renewal requirements, and must be employed by a CNG licensee in accordance with §13.70(a).

Section 55.001 of the Occupations Code defines "license" as "a license, certificate, registration, permit, or other form of authorization required by law or a state agency rule that must be obtained by an individual to engage in a particular business." Accordingly, Chapter 55 and HB 5629 only apply to licenses, as defined by §55.001, that are issued to individuals. AFS typically issues CNG licenses to registered business entities, but on rare occasions may issue a CNG license to an individual operating as a sole proprietorship. Certifications, on the other hand, are issued only to individuals employed by a CNG licensee, provided they meet the applicable examination, continuing education, and renewal requirements in Chapter 13. Therefore, a CNG license issued to a sole proprietor and certifications issued under Chapter 13 are "licenses" under §55.001 and are subject to the provisions of HB 5629 and this rulemaking. Proposed §13.76(a)(2) adopts the term "license" as defined in §55.001, Occupations Code, and therefore, usage of the word "license" in proposed §13.76 refers specifically to CNG licenses issued to individuals as sole proprietors and to certifications issued to individuals.

Proposed new §13.76 includes retitling the rule to more accurately reflect its subject matter, reorganizing the rule for greater clarity in light of the changes to military fee exemption requirements under HB 5629, and incorporating new provisions related to alternative licensing and the recognition of out-of-state licenses as required by HB 5629.

Proposed §13.76(a)(1) - (2) clarifies that proposed §13.76 applies to licenses, military service members, military veterans, or military spouses as those terms are defined in §55.001, Occupations Code. Proposed §13.76(a)(3), in accordance with HB 5629, states that an individual is considered to be in good standing with another state's licensing authority if the individual holds a license that is current and has not been suspended, revoked, or voluntarily surrendered during an investigation for unprofessional conduct; has not been disciplined with the other state's licensing authority; and is not currently under investigation by the other state's licensing authority for unprofessional conduct. AFS will conduct reviews of each application submitted under new §13.76 to determine whether the applicant is in good standing with the other state's licensing authority. Additionally, proposed §13.76(a)(4) states that the Commission shall maintain a record of complaints made against a military service member, military veteran, or military spouse to whom AFS issues an alternative license or out-of-state recognition of a license and shall publish at least quarterly the complaint information on its website.

Proposed §13.76(b) contains the provisions for alternative licensing pursuant to HB 5629. Military service members, military veterans, and military spouses may apply for an alternative license by submitting a completed Form 16V to AFS. There are two avenues by which an applicant may receive an alternative license from AFS. First, an applicant may receive an alternative license from the Commission if the applicant holds a current license issued by another state's licensing authority that is similar in scope of practice to the requested CNG license issued by AFS and the applicant is in good standing with the other state's licensing authority. The applicant must submit a completed Form 16V which includes as an attachment a copy of the current CNG license issued in the other state, a copy of military documentation reflecting the applicant's status as a military service member or military veteran, and any other documentation that may be requested by AFS. If the applicant is a military spouse, a copy of the marriage license must also be attached. Upon receipt of a completed Form 16V with all required attachments, AFS will conduct a review of the application to ensure the form and attachments are completed as required, will determine whether the other state's license is similar in scope of practice to the requested alternative license to be issued by AFS, and conduct due diligence to determine whether the applicant is in good standing with the other state's licensing authority.

Second, an applicant may receive an alternative license from the Commission if the applicant held a CNG license from the Commission within the five years preceding the application date. Those applicants are still required to complete Form 16V and must attach military documentation and a marriage license, if applicable. Regardless of which avenue an applicant uses to pursue an alternative license under proposed §13.76, AFS will issue the alternative license within 10 business days of the application date if the application meets the requirements of proposed §13.76 and HB 5629.

Proposed §13.76(c) contains the provisions for the recognition of an out-of-state license pursuant to HB 5629. Military service members and military spouses are eligible to apply for the recognition of an out-of-state license by submitting a complete Form 16M to AFS. An applicant may receive the recognition of an out-of-state license from the Commission if the applicant holds a current license issued by another state's licensing authority that is similar in scope of practice to the requested CNG license issued by AFS. The applicant must submit a completed Form 16M which includes as an attachment a copy of the current CNG license issued in the other state, a copy of military orders showing relocation to Texas, and any other documentation that may be requested by AFS. If the applicant is a military spouse, a copy of the marriage license must also be attached. Finally, the affidavit included in Form 16M must be signed and notarized by the applicant, affirming under penalty of perjury that: (1) the applicant is the person described and identified in the application; (2) all statements in the application are true, correct, and complete; (3) the applicant understands the scope of practice for the applicable license in this state and will not perform outside of that scope of practice; and (4) the applicant is in good standing in the state in which the applicant holds or has held an applicable license. Upon receipt of a completed Form 16V with all required attachments, AFS will conduct a review of the application to ensure the form, attachments, and affidavit are completed as required and will determine whether the other state's license is similar in scope of practice to the requested alternative license to be issued by AFS. AFS will recognize the out-of-state license within 10 business days of the application date if the application meets the requirements of proposed §13.76 and HB 5629.

Proposed §13.76(d) contains provisions for the exemption of license application and examination fees for military service members, military veterans, and military spouses. A service member may apply for exemption from a license application fee or examination fee by filing a completed Form 35 with AFS, including a copy of applicable military records and a copy of the applicant's driver's license or state-issued identification card. If the exemption is granted by AFS, the applicant should attach the exemption to the application for a license or examination to serve as notice of payment.

Proposed §13.76(e) contains provisions related to renewals of licenses. Alternative licenses and out-of-state recognitions are still required to submit renewals pursuant to Chapter 13 and are required to pay renewal fees. However, a military service member who fails to renew a license because the individual was on active duty is exempt from any increased fee or penalty imposed by AFS. Additionally, a military service member who holds a license is entitled to two years of additional time to complete continuing education requirements or any other requirement related to the renewal of the license.

The Commission proposes amendments to §§13.61(d), 13.70(b)(3)(iv), and 13.70(g)(8) to rename the title of §13.76 and to remove language related to military licensing fee exemptions as all rule language related to fee exemptions will be covered by proposed changes to proposed §13.76(d).

Karley Rudynski, Director, Alternative Fuels Safety Department, has determined that during the first year of the first five years the proposed repeal, new rule, and amendments would be in effect, there will be a programming cost to the Commission to make small changes to its Alternative Fuels Online System (AFOS) to accommodate applications, exemptions, and delayed expiration dates for active duty military members. There will be no other additional cost to state government as a result of enforcing and administering the repeal, new rule, and amendments as proposed. Any additional time to review and process license applications under proposed §13.76 will be subsumed by current staff. There is no fiscal effect on local government.

Ms. Rudynski has determined that for each year of the first five years the proposed repeal, new rule, and amendments are in effect, there will be no increase in economic cost to the CNG industry.

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 repeal, new rule, and amendments. The proposed repeal, new rule, and amendments do not apply to rural communities and streamline and make efficient licensing requirements for individuals that may meet the definition of a small business or micro-business in §2006.001. Therefore, the Commission has not prepared the economic impact statement or regulatory flexibility analysis required under §2006.002(c).

During the first five years that the repeal, new rule, and amendments would be in effect, the proposed repeal, new rule, and amendments would not: create or eliminate a government program; create new employee positions or eliminate any existing employee positions; increase or decrease future legislative appropriations to the agency; require an increase or decrease in fees paid to the agency; increase or decrease the number of individuals subject to the rule's applicability; or affect the state's economy. The proposed repeal, new rule, and amendments would create a new regulation in that it complies with HB 5629's requirements to issue alternative licenses or recognize out-of-state licenses if certain requirements are met. The proposed repeal, new rule, and amendments would also repeal current §13.76 relating to fee exemptions and re-adopt language to comply with HB 5629.

16 TAC §§13.61, 13.70, 13.76

Statutory authority: Texas Occupations Code, Chapter 55, and Texas Natural Resources Code, §§116.012.

Cross reference to statute: Texas Occupations Code, Chapter 55, and Texas Natural Resources Code, Chapter 116.

§13.61. License Categories, Container Manufacturer Registration, Fees, and Application for Licenses, Manufacturer Registrations, and Renewals.

(a) - (c) (No change.)

(d) A military service member, military veteran, or military spouse shall be exempt from the original license fee specified in subsection (b) of this section pursuant to the requirements in §13.76 of this title (relating to Military Licensing and Fee Exemption). [An individual who receives a military fee exemption is not exempt from the renewal or transport registration fees specified in subsection (p) of this section and §13.69 of this title (relating to Registration and Transfer of CNG Cargo Tanks or Delivery Units).]

(e) - (r) (No change.)

§13.70. Examination and Exempt Registration Requirements and Renewals.

(a) Requirements and application for a new certificate.

(1) In addition to NFPA 52 §§1.4.3 and 4.2, and NFPA 55 §4.7, no person shall perform work, directly supervise CNG activities, or be employed in any capacity requiring contact with CNG, unless that individual is employed by a licensee and:

(A) is a certificate holder who is in compliance with renewal requirements in subsection (h) of this section;

(B) is a trainee who complies with subsection (f) of section; [or]

(D) has an alternative license or a recognition by AFS of an out-of-state license pursuant to §13.76 of this chapter (relating to Military Licensing and Fee Exemption) and is in compliance with renewal requirements in subsection (h) of this section.

(b) Rules examination.

(1) - (2) (No change.)

(3) An individual who files CNG Form 2016 and pays the applicable nonrefundable examination fee may take the rules examination.

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

(i) - (iii) (No change.)

(iv) A military service member, military veteran, or military spouse shall be exempt from the examination fee pursuant to the requirements in §13.76 of this title (relating to Military Licensing and Fee Exemption). [~~An individual who receives a military fee exemption is not exempt from renewal fees specified in subsection (h) of this section.~~]

(v) (No change.)

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

(g) General installers and repairmen exemption.

(1) - (7) (No change.)

(8) A military service member, military veteran, or military spouse shall be exempt from the original registration fee pursuant to the requirements in §13.76 of this title. [~~An individual who receives a military fee exemption is not exempt from renewal fees specified in subsection (h) of this section.~~]

(h) (No change.)

§13.76. Military Licensing and Fee Exemption.

(a) General Provisions.

(3) Determination of Good Standing. For purposes of this section, an individual is in good standing with another state's licensing authority if the individual:

(A) holds a license that is current, has not been suspended or revoked, and has not been voluntarily surrendered during an investigation for unprofessional conduct;

(B) has not been disciplined by the licensing authority with respect to the license or individual's practice of the occupation for which the license is issued; and

(C) is not currently under investigation by the licensing authority for unprofessional conduct related to the individual's license or profession.

(b) Alternative Licensing.

(1) A military service member, military veteran, or military spouse may apply to be issued a CNG license by the Commission if the military service member, military veteran, or military spouse:

(A) holds a current license issued by the licensing authority of another state that is similar in scope of practice to a CNG license issued by the Commission and is in good standing with the other state's licensing authority; or

(B) within the five years preceding the application date held a CNG license issued by the Commission.

(2) An application for an alternative license shall be made by submitting a completed Form 16V to AFS. The applicant must attach the following to Form 16V:

(A) a copy of the applicant's current CNG license issued by the licensing authority of another state, if applicable;

(B) a copy of military documentation showing the applicant's military status as a military service member or military veteran;

(D) any other information that may be required by AFS.

(3) Upon receipt of a completed Form 16V with required attachments, AFS shall:

(A) confirm with the other state that the military service member, military veteran, or military spouse is currently licensed and in good standing for the relevant business or occupation; and

(B) conduct a comparison of the other state's licensing requirements, statutes, and rules with AFS's licensing requirements to determine if the requirements are similar in scope of practice.

(4) AFS shall issue the alternative CNG license not later than the 10th business day after the date AFS receives an application for an alternative license in compliance with this subsection and section 55.004, Occupations Code (relating to Alternative Licensing for Military Service Members, Military Veterans, and Military Spouses).

(1) A military service member or military spouse may apply to engage in a CNG activity for which a CNG license is required by the Commission if the military service member or military spouse holds a current license issued by the licensing authority of another state that is similar in scope of practice to a CNG license issued by the Commission. A military service member or military spouse must receive a written recognition from AFS pursuant to this subsection before engaging in a CNG activity.

(2) An application for the recognition of an out-of-state CNG license shall be made by submitting a completed Form 16M to AFS. The applicant must be in good standing with the other state's licensing authority for Form 16M to be approved. The applicant must attach the following to a Form 16M:

(A) a copy of the applicant's current CNG license issued by the licensing authority of another state;