Penalty Guidelines for Pipeline Safety 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 pipeline safety-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(d), and Texas Utilities Code, §121.206(d). The penalty amounts contained 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, relating to pipeline safety, or of rules, orders or permits relating to pipeline safety adopted under those provisions, and for violations of Texas Utilities Code, Chapter 121, Subchapter E, or a safety standard or other rule prescribed or adopted under that subchapter.#

(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 typical 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, relating to pipeline safety, or of rules, orders, or permits relating to pipeline safety adopted under those provisions, and for violations of Texas Utilities Code, Chapter 121, Subchapter E, or a safety standard or other rule prescribed or adopted under that subchapter, 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, including the number of previous violations;#

(2)the seriousness of the violation and of any pollution resulting from the violation;#

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

(4)the degree of culpability;#

(5)the demonstrated good faith of the person charged; and#

(6)any other factor the Commission considers relevant.#

(e)Typical penalties. Typical penalties for violations of provisions of Texas Natural Resources Code, Title 3, relating to pipeline safety, or of rules, orders, or permits relating to pipeline safety adopted under those provisions, and for violations of Texas Utilities Code, §121.201, or a safety standard or other rule prescribed or adopted under that provision are set forth in Table 1.#

Figure: 16 TAC §8.135(e) [See Figure at end of this document.]#

(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 typical penalty, as shown in Table 2. The enhancement may be in any amount in the range shown for each type of violation.#

Figure: 16 TAC §8.135(f) [See Figure at end of this document.]#

(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 §8.135(g)#

Figure 2: 16 TAC §8.135(g) [See Figures at end of this document.]#

(h)Penalty reduction for settlement before hearing. The recommended penalty for a violation may be reduced by up to 50% if the person charged agrees to a 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 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 typical 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 §8.135(j) [See Figure at end of this document.]#

Figure: 16 TAC §8.135(e) Table 1. Typical Penalties Rule 16 TAC §3.70-Pipeline Permits Required 16 TAC §8.1-General Applicability and Standards 16 TAC §8.51-Organization Report 16 TAC §8.101-Pipeline Integrity Assessment and Management Plans 16 TAC §8.105-Records 16 TAC §8.110- Gathering Pipelines 16 TAC §8.115-Construction Commencement Report 16 TAC §8.201-Pipeline Safety and Regulatory Program Fees 16 TAC §8.203-Supplemental Regulations 16 TAC §8.205-Written Procedure for Handling Natural Gas Leak Complaints 16 TAC §8.206- Risk Based Leak Survey Program 16 TAC §8.207-Leak Grading and Repair 16 TAC §8.208- Mandatory Removal and Replacement Program 16 TAC §8.209- Distribution Facilities Replacements 16 TAC §8.210-Reports 16 TAC §8.215-Odorization of Gas 16 TAC §8.220-Master Metered Systems 16 TAC §8.230-School Piping Testing 16 TAC §8.235-Natural Gas Pipelines Public Education and Liaison 16 TAC §8.235-Proximity to Public Schools Located within 1,000 Feet 16 TAC §8.240-Discontinuance of Service 16 TAC §8.301-Records and Reporting 16 TAC §8.305-Corrosion Control 16 TAC §8.310-Hazardous Liquids and Carbon Dioxide Public Education and Liaison 16 TAC §8.315-Hazardous Liquids and Carbon Dioxide Pipeline Located within 1,000 Feet of Public School 49 CFR 192.613-Continuing surveillance 49 CFR 192.619-Maximum allowable operating pressure 49 CFR 192.625-Odorization of gas 49 CFR 192 Subpart A-General 49 CFR 192 Subpart B-Materials 49 CFR 192 Subpart C-Pipe Design 49 CFR 192 Subpart D-Design of Pipeline Components 49 CFR 192 Subpart E-Welding of Steel in Pipelines 49 CFR 192 Subpart F-Joining of Materials Other Than by Welding 49 CFR 192 Subpart G-General Construction Requirements for Transmission Lines and Mains Guideline Penalty Amount $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 10% of amt. due $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $10,000 $5,000 $5,000 $5,000 $5,000 $10,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $10,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Rule Guideline Penalty Amount 49 CFR 192 Subpart H-Customer Meters, Service Regulators, and Service Lines $5,000 49 CFR 192 Subpart I- Requirements for Corrosion Control $5,000 49 CFR 192 Subpart J-Test Requirements $5,000 49 CFR 192 Subpart K-Uprating $5,000 49 CFR 192 Subpart L-Operations $5,000 49 CFR 192 Subpart M-Maintenance $5,000 49 CFR 192 Subpart N-Qualification of Pipeline Personnel $5,000 49 CFR 192, Subpart O-Gas Transmission Pipeline Integrity Management $5,000 49 CFR 192, Subpart P- Gas Distribution Pipeline Integrity Management (DIMP) $5,000 49 CFR Part 192-Transportation of Natural and Other Gas by Pipeline $1,000 49 CFR Part 193-Liquefied Natural Gas Facilities: Federal Safety Standards $1,000 49 CFR Part 195-Transportation of Hazardous Liquids by Pipeline $1,000 49 CFR Part 195.401-General Requirements $5,000 49 CFR Part 195.406-Maximum Operating Pressure $5,000 49 CFR Part 195.440-Public Awareness $5,000 49 CFR Part 195.452-Integrity Management $5,000 49 CFR Part 195 Subpart A-General $5,000 49 CFR Part 195 Subpart B-Annual, Accident, and Safety-Related Condition Reporting $5,000 49 CFR Part 195 Subpart C-Design Requirements $5,000 49 CFR Part 195 Subpart D-Construction $5,000 49 CFR Part 195 Subpart E-Pressure Testing $5,000 49 CFR Part 195 Subpart F-Operation and Maintenance $5,000 49 CFR Part 195 Subpart G-Qualification of Pipeline Personnel $5,000 49 CFR Part 195 Subpart H-Corrosion Control $5,000 49 CFR Part 199-Drug and Alcohol Testing $5,000#

Figure: 16 TAC §8.135(f) For violations that involve: Bay estuary or marine habitat Pollution resulting from the violation Impact to a residential or public area Hazardous material release Reportable incident or accident Exceeding pressure control limits Any hazard to the health or safety of the public The seriousness of the violation Death or personal injury Affected area exceeds 100 square feet Reckless conduct of person charged Intentional conduct of person charged Table 2. Penalty Enhancements Threatened or actual pollution Threatened or actual safety hazard Severity of violation or culpability of person charged $5,000 to $25,000 $5,000 to $25,000 $5,000 to $25,000 $2,000 to $25,000 $5,000 to $25,000 $5,000 to $25,000 $5,000 to $25,000 $5,000 to $25,000 $5,000 to $25,000 $10 per square foot Up to double the total penalty Up to triple the total penalty#

Figure 1: 16 TAC §8.135(g) Table 3. Penalty enhancements based on number of prior violations within seven years Number of violations or warnings in the seven years prior to action Guideline Enhancement Amount One Double penalty amount More than two but fewer than five Triple penalty amount More than five but fewer than ten Four times penalty amount More than ten Five times penalty amount#

Figure 2: 16 TAC §8.135(g) Table 4. Guideline Penalty enhancements based on total amount of prior penalties within seven years Total administrative penalties assessed in the seven years prior to action Guideline Enhancement amount Less than $10,000 $1,000 Between $10,001 and $25,000 $2,500 Between $25,001 and $50,000 $5,000 Between $50,001 and $100,000 $10,000 Over $100,000 10% of total amount#

Figure: 16 TAC §8.135(j) Table 5. Penalty calculation worksheet. Violations from Table 1 1 16 TAC §3.70-Pipeline Permits Required 2 16 TAC §8.1-General Applicability and Standards 3 16 TAC §8.51-Organization Report 4 16 TAC §8.101-Pipeline Integrity Assessment and Management Plans 5 16 TAC §8.105-Records 6 16 TAC §8.110- Gathering Pipelines 7 16 TAC §8.115-Construction Commencement Report 8 16 TAC §8.201-Pipeline Safety and Regulatory Program Fees 9 16 TAC §8.203-Supplemental Regulations 10 16 TAC §8.205-Written Procedure for Handling Natural Gas Leak Complaints 11 16 TAC §8.206- Risk Based Leak Survey Program 12 16 TAC §8.207-Leak Grading and Repair 13 16 TAC §8.208- Mandatory Removal and Replacement Program 14 16 TAC §8.209- Distribution Facilities Replacements 15 16 TAC §8.210-Reports 16 16 TAC §8.215-Odorization of Gas 17 16 TAC §8.220-Master Metered Systems 18 16 TAC §8.230-School Piping Testing 19 16 TAC §8.235-Natural Gas Pipelines Public Education and Liaison 20 16 TAC §8.235-Proximity to Public Schools Located within 1,000 Feet 21 16 TAC §8.240-Discontinuance of Service 22 16 TAC §8.301-Records and Reporting 23 16 TAC §8.305-Corrosion Control 24 16 TAC §8.310-Hazardous Liquids and Carbon Dioxide Public Education and Liaison 25 16 TAC §8.315-Hazardous Liquids and Carbon Dioxide Pipeline Located within 1,000 Feet of Public School 26 49 CFR 192.613-Continuing surveillance 27 49 CFR 192.619-Maximum allowable operating pressure 28 49 CFR 192.625-Odorization of gas 29 49 CFR 192 Subpart A-General 30 49 CFR 192 Subpart B-Materials 31 49 CFR 192 Subpart C-Pipe Design 32 49 CFR 192 Subpart D-Design of Pipeline Components 33 49 CFR 192 Subpart E-Welding of Steel in Pipelines 34 49 CFR 192 Subpart F-Joining of Materials Other Than by Welding 35 49 CFR 192 Subpart G-General Construction Requirements for Transmission Lines and Mains Typical Penalty Amounts from Table 1 Penalty Tally $5,000 $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ 10% of amt. due $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ $10,000 $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ $10,000 $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ $5,000 $ $10,000 $ $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Violations from Table 1 Typical Penalty Amounts from Table 1 Penalty Tally 36 49 CFR 192 Subpart H-Customer Meters, Service Regulators, and Service Lines $5,000 37 49 CFR 192 Subpart I- Requirements for Corrosion Control $5,000 $ 38 49 CFR 192 Subpart J-Test Requirements $5,000 39 49 CFR 192 Subpart K-Uprating $5,000 40 49 CFR 192 Subpart L-Operations $5,000 41 49 CFR 192 Subpart M-Maintenance $5,000 $ 42 49 CFR 192 Subpart N-Qualification of Pipeline Personnel $5,000 $ 43 49 CFR 192, Subpart O-Gas Transmission Pipeline Integrity Management $5,000 $ 44 49 CFR 192, Subpart P- Gas Distribution Pipeline Integrity Management (DIMP) $5,000 $ 45 49 CFR Part 192-Transportation of Natural and Other Gas by Pipeline $1,000 $ 46 49 CFR Part 193-Liquefied Natural Gas Facilities: Federal Safety Standards $1,000 $ 47 49 CFR Part 195-Transportation of Hazardous Liquids by Pipeline $1,000 $ 48 49 CFR Part 195.401-General Requirements $5,000 $ 49 49 CFR Part 195.406-Maximum Operating Pressure $5,000 $ 50 49 CFR Part 195.440-Public Awareness $5,000 $ 51 49 CFR Part 195.452-Integrity Management $5,000 $ 52 49 CFR Part 195 Subpart A-General $5,000 53 49 CFR Part 195 Subpart B-Annual, Accident, and Safety-Related Condition Reporting $5,000 54 49 CFR Part 195 Subpart C-Design Requirements $5,000 55 49 CFR Part 195 Subpart D-Construction $5,000 56 49 CFR Part 195 Subpart E-Pressure Testing $5,000 57 49 CFR Part 195 Subpart F-Operation and Maintenance $5,000 58 49 CFR Part 195 Subpart G-Qualification of Pipeline Personnel $5,000 $ 59 49 CFR Part 195 Subpart H-Corrosion Control $5,000 60 49 CFR Part 199-Drug and Alcohol Testing $5,000 $ 61 Subtotal of typical penalty amounts from Table 1 (lines 1-60, inclusive) $ 62 Reduction for settlement before hearing: up to 50% of line 61 amt. __________% $ 63 Subtotal: amount shown on line 61 less applicable settlement reduction from line 62 $ Penalty enhancement amounts for threatened or actual pollution or safety hazard from Table 2 64 Bay, estuary, or marine habitat $5,000-$25,000 $ 65 Pollution resulting from the violation $5,000 to $25,000 $ 66 Impact to a residential or public area $5,000 to $25,000 $ 67 Hazardous material release $2,000-$25,000 $ 68 Reportable incident or accident $5,000-$25,000 $ 69 Exceeding pressure control limits $5,000 to $25,000 $ 70 Any hazard to the health or safety of the public $5,000 to $25,000 $ Penalty enhancements for severity of violation from Table 2 71 Affected area exceeds 100 square feet $10/square foot $ 72 Subtotal: amount on line 63 plus all amounts on lines 64 through 71, inclusive $ Penalty enhancements for culpability of person charged from Table 2 73 Reckless conduct of person charged double line 72 amt. $ 74 Intentional conduct of person charged triple line 72 amt. $ 75 76 77 78 79 80 81 82 83 84 85 86 87 Violations from Table 1 Typical Penalty Amounts from Table 1 Penalty Tally Penalty enhancements for number of prior violations within past seven years from Table 3 One $1,000 $ Two $2,000 $ Three $3,000 $ Four $4,000 $ Five or more $5,000 $ Penalty enhancements for amount of penalties within past seven years from Table 4 Less than $10,000 $1,000 $ Between $10,000 and $25,000 $2,500 $ Between $25, 000 and $50,000 $5,000 $ Between $50,000 and $100,00 $10,000 $ Over $100,000 10% of total amt. $ Subtotal: amount on line 72 plus amounts on lines 73 and/or 74 plus the amount shown on any one line from 75 through 84, inclusive $ Reduction for demonstrated good faith of person charged $ TOTAL PENALTY AMOUNT: amount on line 85 less any amount shown on line 86 $#

Source Note: The provisions of this §8.135 adopted to be effective February 4, 2009, 34 TexReg 582; amended to be effective August 27, 2012, 37 TexReg 6554; amended to be effective January 6, 2020, 45 TexReg 121#