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

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