(a) Policy. Improved safety and environmental protection
are the desired outcomes of any enforcement action. Encouraging licensees
and certificate holders 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 LNG-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. 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, Chapter 116, relating to compressed
natural gas and liquefied natural gas; of rules, orders, licenses,
permits, or certificates relating to LNG safety adopted under those
provisions; and of regulations, codes, or standards that the Commission
has adopted by reference.
(c) Commission authority. The establishment of these
penalty guidelines shall in no way limit the Commission's authority
and discretion to 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, Chapter 116, relating to compressed natural
gas and liquefied natural gas; of rules, orders, licenses, permits,
or certificates relating to LNG safety adopted or issued under those
provisions; and of regulations, codes, or standards that the Commission
has adopted by reference, and to assess administrative penalties in
any amount up to the statutory maximum when warranted by the facts
in any case.
(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 previous violations;
  (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 typical penalty amount is calculated, the total penalty
amount will be within the statutory maximum. Typical penalties for
violations of provisions of Texas Natural Resources Code, Title 3,
Chapter 116, relating to compressed natural gas and liquefied natural
gas; of rules, orders, licenses, permits, or certificates relating
to LNG safety adopted under those provisions; and of regulations,
codes, or standards that the Commission has adopted by reference,
are set forth in Table 1.
Attached Graphic
(f) Penalty enhancements for certain violations. For
violations that involve threatened or actual safety hazards, or that
result from the reckless or intentional conduct of the person charged,
the Commission may assess an enhancement of the typical penalty. The
enhancement may be in any amount in the range shown for each type
of violation, as shown in Table 2.
Attached Graphic
(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.
Attached Graphic
Attached Graphic
(h) Penalty reduction for settlement before hearing.
The recommended monetary 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 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) Other sanctions. Depending upon the nature of and
the consequences resulting from a violation of the rules in this chapter,
the Commission may impose a non-monetary penalty, such as requiring
attendance at a safety training course, or may issue a warning.
(k) 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.
Attached Graphic


Source Note: The provisions of this §14.2015 adopted to be effective August 27, 2012, 37 TexReg 6574