Railroad Commission of Texas Gas Utilities Division Au& in, Texas Gentlemen: OpinionNo. 

### 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 Department concerningSenate Bill No. 

### 269,which was enactedby the 49th Legislatureand filedby the Governorwithout his signature,and which is to become effective on or about September 

### 5, 1945. "(1) Section 

### 6 of the Act provides that 'Inthe manner provided in Section 4 of this Act * *' the Commission shall have full power and authority to promulgate rules and regulationsto carry out the purposes of the Act. Section 4 of the Act does not provide the manner inwhich such rules and regulations shouldbe promulgated. Please advise us your opinion a8 to what procedure shouldbe followed in adopting or promulgating such rules and regulations. "(2) Section 7 of the Act provides that 'No license shallbe issueduntil a hearing is had thereon and the Commission has determined that the applicant has made good and sufficientproof that he can and will meet all safety requirementsprovided in this act and.

by the rules and regulations of the Railroad Commission,and the Commission finds that such applicant is qualifiedand the evidence adduced justifies issuance of such license.' Section 

### 16 of the Act provides that 'Noformal notice of hearing on an application for license need be given applicant, other than that he be given a reasonable opportunityto appear in support of his application before the Commission renders its order refusinghim a license.' Consideringthe 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 applicantnot licensedprior to May 1, 

### 1945;and, if it is nscessary to hold such a hearing, to whom is the Commission required to give notice. 

### "(3) Section 10 of the Act provides that 'For the purpose of defrayingthe expenses of administering this Act, each person, firm, corporationor association engaged in one or more of the pursuits named in subsection (1) of this section * *I shallpay to the Commission certainannual license fees. Section 10 does not have a subsection (1). Please advise us which persons, firms, corporationsor associations we may legally collect the $25.00 annual license fee from and which operatorswe may legally collect the $50.00 snnual license fee from. "(4) Under the Act may we requirepersons, firm, or corporationsthat are engaged in the sale of applianceswhich burn liquefiedpetroleum gases to obtain a licensewhen suchpersons do not install such appliances? "(5) The secondparagraph of Section 11 of the Act provides that: 'Inaddition to the bond herein required, such licensee shallbe obligatedto procure from some reliable insuranceor surety company qualified to do business in the State of Texas, and keep same in force so long as they shall continuebusiness, a policy of insurance or suretybond which shall guarantee the payment of all damageswhich proximately result from any act of negligence,while engaging in any of the activities as hereinprovided, on the part of said licensee, their agents and employees, to both the employees of said licensee and also to the public generally, saidpolicy or bond to be in the sum of not less than Ten Thousand ($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 shallnot be applicableunless and until suchbonds or policies of insuranceare available for purchase and furtherprovided that suchbonds or policies of insurance shallbe approvedby the Railroad Commission of Texas.' As the Act only provides that a licensee shallbe obligatedto procure such insuranceor bond, is it the Commission's duty to require such a bond or insurancepolicy before grantinga license?Railroad Commission of Texas, page 

### 3 (0-6724)

"Wewill thank you to give us your opinion as soon as possible in order that we may prepare for the administration of this Act. Please send .acopy of your opinion to the Gas Utilities Division of the Railroad Commission of Texas." Question No. 1 Section 1 of S. B. 

### 269reads as follows: "Section 1. That Section 2a, Section 2b, and Section 

### 3 ofArticle 

### 6053of the Revised Civil Statutes of Texas of 1925, as enacted in 1920 by the Third Called Session of the 

### 36thLegislature,page 

### 18, Chapter 14, and as amendedby Acts, 

### 1937,45thLegislature,Act, 

### 1939,46thLegislature,be and the same are hereby amended and renumberedto read as follows: I,
The amendments of the Act in 

### 1937 (Acts 45th Legislature, Regular Session,p. 

### 737)and in 

### 1939 (Acts 

### 46thLegislature,Regular Session,p. 

### 501)both provide, as does S. B. No. 

### 269,for amendment ofArticle 

### 6053as revised in 1925. The device of codifying the 

### 1937and 

### 1939amendmentsas subdivisionsunder Article 

### 6053%is purely the work of the Vernon Law Book Company and is unofficial. The amendments are of the originalArticle and Section 4, which was added by the 

### 1939amendment, is not affectedby s. B. 

### 269. The numbered Sections of S. B. 269 are in reality subsectionsof Sections 2a, 2b and 3 of Article 6053a as they now appear inVernon's Annotated Civil Statutes, and they should be so arranged in the pocket parts. Section 4 ofArticle 6053a, Vernon'sAnnotated 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 promulgating rules and regulations. QuestionNo. 2

Section 7 of S. B. 269, reads, in part, as follows: II

. . . No such license shallbe issued'untila hearing is had thereon and the Commissionhas determined that the applicant has made good and sufficient proof that he can and will meet all safetyrequirements provided in this Act and by the rules and regulations of the Railroad Commission,and the Commission finds that such applicant is qualifiedand the evidence adduced justifies issuanceof such license.Railroad Commission of Texas, page 4 (0-6724)

Section 16 of S. B. 269 containsthe followingprovision: ,I

. . .No formal notice of hearing on an application for license need be given applicant, other than that he be given a reaeonable opportunityto appear in support of his applicationbefore the Commission renders its order refusing him a license. Appeal shall be to the District Court of the residence of the applicant in all caseswhere 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 Commission must act as a body at a formalmeeting and not as individuals. The Supreme Court of Texas, in a recent case, said:

"It is a well establishedrule in this State, as well as in other States, that where the Legislature has committeda matter to a board, bureau, or commission, or other administrativeagency, suchboard, bureau, or commission. must act thereon as a body at a statedmeeting, or one properly called, and of which all the members of suchboard have notice, or of which they are gl,ven an opportunity to attend. Consent or acquiescence of, or agreementby the individualmembers acting separately, and not as a body, or by a number of the members less than the whole acting collectivelyat an unscheduledmeeting 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, shallbe givenby registered mail not less than ten (10) days exclusive of the day of mailing before such hearing, addressed to all parties whom the Commissionmay deem to be interested in the subjectmatter of such hearing.

. D .llRailroad 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 licenseeunder the Act. This is a matter, however, on which the Railroad Commissionmay exercise discretionand if its rule or regulationwith reference to notice is reasonable, itwill be upheld by the courts. QuestionNo. 

### 3

Section 10 of S. B. 

### 269reads as follows: "Section 10. For the purpose of defraying the expenses of administeringthis Act, each person, firm corporation or association engaged in one or more of the pursuits named in subsection (1) of this section, except as otherwiseprovided 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 calendaryear pay to the Railroad Commission a special fee of Twenty-five ($25.00)Dollars; except that each person, firm, or corporationwho operates a truck or trucks in the wholesale or retail delivery of liquefiedpetroleum gas, 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 Commission a special fee of Fifty ($50.00)Dollars, and when such fifty dollar fee is paid, said firm or corporation shallnot 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 shallbe prorated to the remainingportion 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 installing of containersto be used with liquefiedpetroleum gases as a fuel, nor shall suchperson, firm, or corporation engage in the sale, transportation,dispensing or storage of liquefiedpetroleum gaseswithin this state, except where storedby the ultimate consumer for consumptiononly, without having first obtained from the Railroad Commission of Texas under the provisions of this Act a licenseRailroad Commission of Texas, page 

### 6 (o-6724)

so to do. Applications for such licenses shallbe in writing and shall contain such informationas the Commission shallprescribe. No such license shallbe issued until a hearing is had thereon and the Commission has determinedthat the applicant has made good and sufficientproof that he can and will meet all safety requirementsprovided in this Act and by the rules and regulations of the Railroad Commission,and the Commission finds that such applicant is qualifiedand the evidence adduced justifies issuance of such license. The Railroad Commission shall have the authorityto promulgate rules and regulations for the safetyand protection of the public. 91
This Sectionwas "Section 2b (1)" of the 

### 1939amendment to Article 

### 6053,and "Section 2b(2)" containedprovisions similar to Section 10, above. In drafting S. B. 

### 269,the scrivener in rewriting Section 2b(2) as Section 10 referred to "Subsection1 of this Section" thinking that he was referringto Subsection 1 of Section 2b of the 

### 1939amendment. This Subsection (1) is now "Section 7 (1)" of S. B. 

### 269. We believe that these two Sections

. I

_ when consideredtogether are plain and unambiguous. QuestionNo. 4 The last paragraph of Section 

### 6 of S. B. 

### 269provides: "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 integralpart of a liquefied gas systemwhen the seller d&s not service,make repairs or permanent connectionto any such liquefied gas system,as long as said appliance or container is approved under the standards setby the Railroad Commission of Texas. Nor shall this Act apply to containers subjectto the regulation of the InterstateCommerce Commission,and containers which are owned and used by the Federal Government. M (Underscoringours) Section $5of S. B. 

### 269provides, in part: I,

. . . Persons, firms, corporationsor associations who handle appliances exclusively for use with natural es*, and who do not offer their appliances for sale or use with liquefiedpetroleum gases, are exempted from the provisions of this Act." Section 4 of S. B. 

### 269provides in part:Railroad commission of Texas, page 

### 7 (o-6724)

"The selling or exposing for sale.
. . of such appliancesusing or to use liquefiedpetroleum gas as a fuel,without same having been designed, constructed,assembled, and equipped as specifiedby the rules and regulations of the Railroad Commission as provided for in this Act, shallbe a violation of this Act and shallbe subjectto 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. 

### 269provides in part:
"No person, firm or corporation shall engage in this State in

. . . . selling

. . . . of containers to be used with liquefiedpetroleum gases as a fuel e D .without having first obtained from the Railroad Commission of Texas under the provisions of this Act a license so to do
. . . ." The Act makes a distinctionbetween containersand appliances and a distinctionbetween sales of applianceswhich are subject to the Act and those which are not. The sale .ofappliances (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 Commissionwith reference to design and construction of such appliances and the manner of assembling and equipping same but a license to make such sale is not necessary. We therefore answer your fourth question "No." QuestionNo. 

### 5 Section 11 of S. B. 

### 269provides, inpart-t "Section 11. No license shallbe issuedpursuant to this section,unless such licensee shall first file with the Commission a suretybond 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 shallbe obligatedto procure from some reliable insurance or surety company qualifiedto do business in the State of Texas, and keep same in force so long as they shall continue inbusiness, a policy of insurance or suretybond which shall guaranteethe payment of all damageswhich proximately result from any act of negligence,while engaging in any of the activities as hereinprovided, on the part of said licensee, their agents and employees,to bothRailroad Commission of Texas, page 

### 8 (0-6724)

the employees of said licensee and also to the public generally, saidpolicy 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 shallnot be applicable unless and until suchbonds or policies of insurance are available for purchase and furtherprovided that such.bonds or policies of insurance shallbe approvedby the Railroad Commission of Texas. I,
Section 12 of the Act provides: "Section 12. The Commission shall have the power and authority, and it shallbe its duty, to refuse to grant a license to any applicant, or to cancel the license of any licensee, if it she.11

appear to the Commission,upon hearing as hereinprovided, 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 severalprovisions,we are of the opinion that the Railroad Commissionmay issue a license effective immediatelybut conditioned that the indemnitybond, to be approved by the Commission, shallbe filed within a certain specifiedtime; otherwise the license shallbe void. The $2,000.00bond must be filed before the license is issued.

No license shallbe issuedunless "the Commission finds that such applicant is qualified." Section 7. This includes a finding that the applicant is able to and will complywith that part of Section 11 requiringthe filing of an indemnitybond. The matter of voiding a licenseupon failure to file the indemnity bond within a certainnumber of days can be set out in a rule applicable to all cases and incorporated. as a part of each order granting a license.

are, Trusting that the foregoinganswers your inquiries,we

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
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