Office of House Bill AnalysisH.B. 1858
By: Kitchen
Energy Resources


In Texas and at the federal level, there are currently no provisions that
require owners of hazardous liquid pipelines to carry insurance to ensure
that the company will be financially responsible for damage that may result
from a spill or accident.  This may be particularly problematic in the case
of certain types of business entities, such as limited partnerships, that
by law have less stringent liability requirements for such accidents. Such
limited liability may result in the taxpayers of local municipalities and
counties being left with the response costs in the event of a spill or

Along with protecting taxpayers, requiring companies to be financially
responsible for spills and accidents can also decrease the likelihood of
such incidents.  Both industry associations and environmental groups have
credited the release liability provision of the Oil Pollution Act of 1990
for helping to reduce the number of oil spills.  House Bill 1858 requires
limited partnerships who wish to convert certain older pipelines for use in
carrying petroleum products to carry sufficient insurance to cover the cost
of damages that may result from a spill or accident. 


It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 


House Bill 1858 amends law to prohibit a limited partnership from engaging
as a common carrier in the pipeline business for transporting oil products
with respect to an oil products pipeline owned, operated, or managed by the
limited partnership unless the limited partnership obtains liability
insurance coverage of at least $2 billion.  This provision applies only to
an oil products pipeline, any segment of which was constructed before
January 1, 1960, that was originally used for transporting oil products
before January 1, 2001. 


On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.