Railroad Commission of Texas
Gas Utilities Division
Au& in, Texas
Gentlemen: Opinion No. 0-6724
Re: Construction of certain
provisions of S. B. 269,
49th Legislature, 1945.
We acknowledge receipt of your opinion request of July
17, 1945, reading as follows:
"This is a request for an opinion from your De-
partment concerning Senate Bill No. 269, which was
enacted by the 49th Legislature and filed by the
Governor without his signature, and which is to be-
come effective on or about September 5, 1945.
"(1) Section 6 of the Act provides that 'In the
manner provided in Section 4 of this Act * *' the
Commission shall have full power and authority to
promulgate rules and regulations to carry out the
purposes of the Act. Section 4 of the Act does not
provide the manner in which such rules and regula-
tions should be promulgated. Please advise us your
opinion a8 to what procedure should be followed in
adopting or promulgating such rules and regulations.
"(2) Section 7 of the Act provides that 'No
license shall be issued until a hearing is had there-
on and the Commission has determined that the appli-
cant has made good and sufficient proof that he can
and will meet all safety requirements provided in
this act and.by the rules and regulations of the
Railroad Commission, and the Commission finds that
such applicant is qualified and the evidence ad-
duced justifies issuance of such license.' Section
16 of the Act provides that 'No formal notice of
hearing on an application for license need be given
applicant, other than that he be given a reasonable
opportunity to appear in support of his application
before the Commission renders its order refusing him
a license.' Considering the above two provisions,
Railroad Commission of Texas, page 2 (0-6724)
please advise us if it is necessary to hold a formal
hearing upon the application of each applicant not
licensed prior to May 1, 1945; and, if it is nsces-
sary to hold such a hearing, to whom is the Commis-
sion required to give notice.
"(3) Section 10 of the Act provides that 'For
the purpose of defraying the expenses of administer-
ing this Act, each person, firm, corporation or asso-
ciation engaged in one or more of the pursuits named
in subsection (1) of this section * *I shall pay to
the Commission certain annual license fees. Section
10 does not have a subsection (1). Please advise us
which persons, firms, corporations or associations
we may legally collect the $25.00 annual license fee
from and which operators we may legally collect the
$50.00 snnual license fee from.
"(4) Under the Act may we require persons, firm,
or corporations that are engaged in the sale of appli-
ances which burn liquefied petroleum gases to obtain a
license when such persons do not install such appli-
ances?
"(5) The second paragraph of Section 11 of the
Act provides that: 'In addition to the bond herein
required, such licensee shall be obligated to procure
from some reliable insurance or surety company quali-
fied to do business in the State of Texas, and keep
same in force so long as they shall continue business,
a policy of insurance or surety bond which shall guaran-
tee the payment of all damages which proximately result
from any act of negligence, while engaging in any of
the activities as herein provided, on the part of said
licensee, their agents and employees, to both the em-
ployees of said licensee and also to the public gen-
erally, said policy or bond to be in the sum of not
less than Ten Thousand ($lO,OOO.OO) Dollars for per-
sonal injury for any one accident, and not less than
Five Thousand ($5,000.00) Dollars for property damage
for any one accident. Provided that this Section
shall not be applicable unless and until such bonds
or policies of insurance are available for purchase
and further provided that such bonds or policies of
insurance shall be approved by the Railroad Commission
of Texas.' As the Act only provides that a licensee
shall be obligated to procure such insurance or bond,
is it the Commission's duty to require such a bond
or insurance policy before granting a license?
Railroad Commission of Texas, page 3 (0-6724)
"We will thank you to give us your opinion as soon
as possible in order that we may prepare for the admin-
istration of this Act. Please send .acopy of your opin-
ion to the Gas Utilities Division of the Railroad Commis-
sion of Texas."
Question No. 1
Section 1 of S. B. 269 reads as follows:
"Section 1. That Section 2a, Section 2b, and
Section 3 of Article 6053 of the Revised Civil Stat-
utes of Texas of 1925, as enacted in 1920 by the Third
Called Session of the 36th Legislature, page 18,
Chapter 14, and as amended by Acts, 1937, 45th Legis-
lature, Act, 1939, 46th Legislature, be and the same
are hereby amended and renumbered to read as follows:
I,
The amendments of the Act in 1937 (Acts 45th Legislature,
Regular Session, p. 737) and in 1939 (Acts 46th Legislature, Regu-
lar Session, p. 501) both provide, as does S. B. No. 269, for
amendment of Article 6053 as revised in 1925. The device of codi-
fying the 1937 and 1939 amendments as subdivisions under Article
6053% is purely the work of the Vernon Law Book Company and is
unofficial. The amendments are of the original Article and Sec-
tion 4, which was added by the 1939 amendment, is not affected by
s. B. 269. The numbered Sections of S. B. 269 are in reality
subsections of Sections 2a, 2b and 3 of Article 6053a as they
now appear in Vernon's Annotated Civil Statutes, and they should
be so arranged in the pocket parts. Section 4 of Article 6053a,
Vernon's Annotated Civil Statutes, is the "Section 4 of this Act"
referred to in Section 6 of S. B. No. 269, and you will follow
the procedure outlined in that Section in adopting and promulgat-
ing rules and regulations.
Question No. 2
Section 7 of S. B. 269, reads, in part, as follows:
II
. . . No such license shall be issued'until a
hearing is had thereon and the Commission has deter-
mined that the applicant has made good and sufficient
proof that he can and will meet all safety require-
ments provided in this Act and by the rules and regu-
lations of the Railroad Commission, and the Commission
finds that such applicant is qualified and the evidence
adduced justifies issuance of such license.
Railroad Commission of Texas, page 4 (0-6724)
Section 16 of S. B. 269 contains the following provision:
,I
. . . No formal notice of hearing on an appli-
cation for license need be given applicant, other than
that he be given a reaeonable opportunity to appear in
support of his application before the Commission ren-
ders its order refusing him a license. Appeal shall
be to the District Court of the residence of the appli-
cant in all cases where an application for a license
hereunder is denied, subject to the same limits and
restrictions 88 in cases of appeals from revocations
and suspensions. n
The inquiry here is whether or not formal hearings are
necessary on each application for a license under Section 7 and
if so, to whom is the Commission required to give notice.
It is settled that the members of the Railroad Commis-
sion must act as a body at a formal meeting and not as individuals.
The Supreme Court of Texas, in a recent case, said:
"It is a well established rule in this State,
as well as in other States, that where the Legis-
lature has committed a matter to a board, bureau,
or commission, or other administrative agency,
such board, bureau, or commission.must act thereon
as a body at a stated meeting, or one properly
called, and of which all the members of such board
have notice, or of which they are gl,venan oppor-
tunity to attend. Consent or acquiescence of, or
agreement by the individual members acting separately,
and not as a body, or by a number of the members
less than the whole acting collectively at an un-
scheduled meeting without notice or opportunity of
the other members to attend, is not sufficient."
Webster vs. Texas & Pacific Motor Transport Co.,
166 s. w. (2d) 75, 76, 77.
As to the question of notice, Section 14 of S. B. 269
is applicable. It provides in part:
"Section 14. Notice of any hearing, and of the
time and place thereof, shall be given by registered
mail not less than ten (10) days exclusive of the day
of mailing before such hearing, addressed to all par-
ties whom the Commission may deem to be interested in
the subject matter of such hearing. . D .ll
Railroad Commission of Texas, page 5 (0-6724)
The enforcement officers of the Railroad Commission should
be notified, but there would seem to be no necessity for notifying
every licensee under the Act. This is a matter, however, on which
the Railroad Commission may exercise discretion and if its rule or
regulation with reference to notice is reasonable, it will be up-
held by the courts.
Question No. 3
Section 10 of S. B. 269 reads as follows:
"Section 10. For the purpose of defraying the ex-
penses of administering this Act, each person, firm cor-
poration or association engaged in one or more of the
pursuits named in subsection (1) of this section, ex-
cept as otherwise provided in this subsection, shall
at the time of issuance of such license, and annually
thereafter, on or between September 1st and September
15th of each calendar year pay to the Railroad Commis-
sion a special fee of Twenty-five ($25.00) Dollars; ex-
cept that each person, firm, or corporation who operates
a truck or trucks in the wholesale or retail delivery
of liquefied petroleum gas, shall at the time of issu-
ance of such license, and annually thereafter, on or
between September 1st and September 15th of each calendar
year, pay to the Railroad Commission a special fee of
Fifty ($50.00) Dollars, and when such fifty dollar fee
is paid, said firm or corporation shall not be liable
for the payment of the Twenty-five ($25.00) Dollar fee
as provided herein. I,
"If the license here provided for is issued after the
month of September of any year, all fees shall be pro-
rated to the remaining portion of the year to August 31st
following, but in no case less than one-fourth of the
total annusl fee. I,
The reference to "subsection 1 of this section" is a
reference to Section 7.(l) of the Act which reads as follows:
"Section 7. (1) No person, firm or corporation
shall engage in this state in the manufacturing, and/or
assembling, and/or repairing, and/or selling, and/or in-
stalling of containers to be used with liquefied petroleum
gases as a fuel, nor shall such person, firm, or corporation
engage in the sale, transportation, dispensing or storage
of liquefied petroleum gases within this state, except
where stored by the ultimate consumer for consumption only,
without having first obtained from the Railroad Commis-
sion of Texas under the provisions of this Act a license
Railroad Commission of Texas, page 6 (o-6724)
so to do. Applications for such licenses shall be in
writing and shall contain such information as the Com-
mission shall prescribe. No such license shall be is-
sued until a hearing is had thereon and the Commission
has determined that the applicant has made good and
sufficient proof that he can and will meet all safety
requirements provided in this Act and by the rules and
regulations of the Railroad Commission, and the Commis-
sion finds that such applicant is qualified and the
evidence adduced justifies issuance of such license.
The Railroad Commission shall have the authority to
promulgate rules and regulations for the safety and
protection of the public. 91
This Section was "Section 2b (1)" of the 1939 amendment
to Article 6053, and "Section 2b(2)" contained provisions similar
to Section 10, above. In drafting S. B. 269, the scrivener in
rewriting Section 2b(2) as Section 10 referred to "Subsection 1
of this Section" thinking that he was referring to Subsection 1
of Section 2b of the 1939 amendment. This Subsection (1) is now
"Section 7 (1)" of S. B. 269. We believe that these two Sections
. I _
when considered together are plain and unambiguous.
Question No. 4
The last paragraph of Section 6 of S. B. 269 provides:
"Nothing contained in this Act shall apply to
the sale in the ordinary course of business of any part
of any appliance which may be employed for uses other
than as an integral part of a liquefied gas system when
the seller d&s not service, make repairs or permanent
connection to any such liquefied gas system, as long as
said appliance or container is approved under the
standards set by the Railroad Commission of Texas. Nor
shall this Act apply to containers subject to the reg-
ulation of the Interstate Commerce Commission, and con-
tainers which are owned and used by the Federal Govern-
ment. M (Underscoring ours)
Section $5of S. B. 269 provides, in part:
I,
. . . Persons, firms, corporations or associations
who handle appliances exclusively for use with natural
es*, and who do not offer their appliances for sale or
use with liquefied petroleum gases, are exempted from
the provisions of this Act."
Section 4 of S. B. 269 provides in part:
Railroad commission of Texas, page 7 (o-6724)
"The selling or exposing for sale. . . of
such appliances using or to use liquefied petro-
leum gas as a fuel, without same having been
designed, constructed, assembled, and equipped
as specified by the rules and regulations of the
Railroad Commission as provided for in this Act,
shall be a violation of this Act and shall be
subject to all fines, penalties and restrictions
provided in this Act and Title 102, Revised Civil
Statutes of Texas, 1925, as amended.
Section 7 of S. B. 269 provides in part:
"No person, firm or corporation shall engage
in this State in . . . . selling . . . . of con-
tainers to be used with liquefied petroleum gases
as a fuel e D . without having first obtained from
the Railroad Commission of Texas under the provi-
sions of this Act a license so to do . . . ."
The Act makes a distinction between containers and ap-
pliances and a distinction between sales of appliances which are
subject to the Act and those which are not. The sale .of appli-
ances (other than containers) for use as a part of a liquefied
gas system is subject to the Act and the rules and regulations
of the Railroad Commission with reference to design and construc-
tion of such appliances and the manner of assembling and equipping
same but a license to make such sale is not necessary. We there-
fore answer your fourth question "No."
Question No. 5
Section 11 of S. B. 269 provides, in part-t
"Section 11. No license shall be issued pursuant
to this section, unless such licensee shall first file
with the Commission a surety bond in the sum of Two
Thousand ($2,000.00) Dollars with a bonding company
authorized to do business in Texas. . . .
"In addition to the bond herein required, such
licensee shall be obligated to procure from some re-
liable insurance or surety company qualified to do
business in the State of Texas, and keep same in
force so long as they shall continue in business,
a policy of insurance or surety bond which shall
guarantee the payment of all damages which proximately
result from any act of negligence, while engaging in
any of the activities as herein provided, on the part
of said licensee, their agents and employees, to both
Railroad Commission of Texas, page 8 (0-6724)
the employees of said licensee and also to the public
generally, said policy or bond to be in the sum of
not less than Ten Thousand ($lO,OOO.OO) Dollars for
personal injury for any one accident, and not less
than Five Thousand ($5,000.00) Dollars for property
damage for any one accident. Provided that this
section shall not be applicable unless and until
such bonds or policies of insurance are available
for purchase and further provided that such.bonds
or policies of insurance shall be approved by the
Railroad Commission of Texas. I,
Section 12 of the Act provides:
"Section 12. The Commission shall have the power and
authority, and it shall be its duty, to refuse to grant a license
to any applicant, or to cancel the license of any licensee, if
it she.11appear to the Commission, upon hearing as herein provided,
that such applicant or licensee has violated or failed to comply
with any provision of the Act. 91
Section 7 of the Act is quoted on pages 5 and 6 above.
Under these several provisions, we are of the opinion that the
Railroad Commission may issue a license effective immediately but
conditioned that the indemnity bond, to be approved by the Commis-
sion, shall be filed within a certain specified time; otherwise
the license shall be void. The $2,000.00 bond must be filed be-
fore the license is issued.
No license shall be issued unless "the Commission finds
that such applicant is qualified." Section 7. This includes a
finding that the applicant is able to and will comply with that
part of Section 11 requiring the filing of an indemnity bond.
The matter of voiding a license upon failure to file the indemnity
bond within a certain number of days can be set out in a rule ap-
plicable to all cases and incorporated.as a part of each order
granting a license.
Trusting that the foregoing answers your inquiries, we
are,
APPROVED AUG 8, 1945 Yours very truly,
APPROVED
/s/ Csrlos C. Ashley OPINION Attorney General of Texas
COMMITTEE
FIRST ASSISTANT BY Is/ GWB By /a/ Fagan Dickson
ATTORREY GENERAL CHAIRMAN Fagan Dickson
Assistant
FD:JCP:LM
Untitled Texas Attorney General Opinion
Combined Opinion