Can a Texas city regulate the propane (LPG) industry with its own ordinance?

Plain-English summary

A state representative asked five questions about how section 113.054 of the Natural Resources Code affects a city's or other political subdivision's power to regulate the liquefied petroleum gas (LPG) industry, the fuel commonly known as propane. The Railroad Commission administers the state's LPG laws under chapter 113 of the Natural Resources Code, adopting rules and standards covering "any and all aspects or phases" of the LPG industry to protect public health, welfare, and safety. In 2011, the Legislature added section 113.054, which says those rules and standards "preempt and supersede any ordinance, order, or rule" adopted by a political subdivision relating to any aspect of the LPG industry, while letting a subdivision petition the Commission for permission to adopt "more restrictive" local rules if it can prove they enhance public safety.

The questions reduced to three scenarios, and the AG concluded section 113.054 preempts in all three. First, a local ordinance that is less restrictive than the Commission's rule is preempted; reading the statute as a whole, the AG concluded the only local provisions a subdivision may adopt are more restrictive ones, and then only with Commission permission, because a less-restrictive local rule would be immediately superseded and the Legislature would not have intended such a pointless result.

Second, a local ordinance covering an aspect the Commission has not yet regulated is also preempted absent permission. The AG read the statute to make the Commission's regulation a "regulatory ceiling," so a local rule on a not-yet-regulated aspect is automatically more restrictive than the (empty) Commission framework and needs permission. Allowing a patchwork of local rules pending Commission action would frustrate the goal of consistent statewide regulation.

Third, a local ordinance already in place when section 113.054 took effect is preempted too. The AG concluded the statute is not impermissibly retroactive: it does not reach back before its effective date; it simply extinguishes local provisions as of that date, regardless of when they were enacted. A political subdivision has no vested right in the continuation of existing law, and reading the statute to "grandfather" old ordinances would defeat the Legislature's uniformity goal. So in all three scenarios, section 113.054 preempts and supersedes local LPG ordinances regardless of their restrictiveness or date, and regardless of whether the Commission has acted on the subject, unless the Commission grants permission.

Currency note

This opinion was issued in 2016. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. Chapter 113 of the Natural Resources Code and the Railroad Commission's LPG rules have been amended since 2016, so confirm the current statutes and rules before relying on these specifics.

What the opinion meant for those who asked

The requesting representative and the Legislature (as the opinion described it): The opinion read section 113.054 to carry out a legislative goal of uniform, statewide LPG regulation, concluding the statute preempts local LPG ordinances across all three scenarios the request posed unless the Commission grants permission.

Home-rule and general-law cities (as the opinion described it): The opinion told cities that their LPG ordinances are preempted whether the ordinance is more or less restrictive than the Commission's rules, whether or not the Commission has regulated that aspect, and whether the ordinance predates or postdates the 2011 statute. The only path to keeping a local provision the opinion described is petitioning the Commission for permission for a more-restrictive rule that the city proves enhances public safety.

The Railroad Commission (as the opinion described it): The opinion placed the Commission's rules at the top of a "regulatory ceiling" for the LPG industry and identified the Commission's permission process as the sole route for a valid local provision.

The LPG industry (as the opinion described it): The opinion described the statute as establishing consistent statewide regulation, displacing local-level LPG ordinances absent Commission permission.

Common questions

Can a Texas city pass its own propane (LPG) ordinance?
Generally not on its own. The AG concluded section 113.054 preempts and supersedes local LPG ordinances unless the political subdivision first obtains the Railroad Commission's permission.

What if the local rule is weaker than the Commission's?
It is still preempted. The AG read the statute to allow only more-restrictive local rules, and only with Commission permission, so a less-restrictive local rule is superseded.

What if the Commission hasn't regulated that particular issue yet?
The local rule is still preempted absent permission. The AG treated the Commission's regulation as a ceiling, so any local rule on a not-yet-regulated aspect is automatically "more restrictive" and needs permission.

Does an old ordinance from before 2011 survive?
No. The AG concluded section 113.054 extinguishes local provisions as of its effective date regardless of when they were originally enacted, and that this is not impermissibly retroactive.

How can a city get a local LPG rule approved?
By petitioning the Commission under section 113.054 for permission to adopt a more-restrictive rule, and proving that the more-restrictive rule enhances public safety.

Background and statutory framework

The Railroad Commission administers Texas's LPG laws under chapter 113 of the Natural Resources Code and adopts rules and standards relating to "any and all aspects or phases of the LPG industry" to protect public health, welfare, and safety (Tex. Nat. Res. Code §§ 113.011, 113.051, 113.052). Section 113.054, added in 2011, provides that those rules and standards "preempt and supersede any ordinance, order, or rule adopted by a political subdivision ... relating to any aspect or phase of the liquefied petroleum gas industry," while permitting a subdivision to petition the Commission for permission to adopt more restrictive rules only if it proves they enhance public safety (Tex. Nat. Res. Code § 113.054).

Home-rule cities have "the full power of self-government" and look to the Legislature only for limitations, but the Legislature may limit those powers when it expresses its intent with "unmistakable clarity," and a home-rule ordinance is unenforceable to the extent it conflicts with a state statute that preempts the subject matter (S. Crushed Concrete, LLC v. City of Houston, 398 S.W.3d 676 (Tex. 2013); City of Houston v. Bates, 406 S.W.3d 539 (Tex. 2013); Dallas Merch.'s & Concessionaire's Ass'n v. City of Dallas, 852 S.W.2d 489 (Tex. 1993); Tex. Const. art. XI, § 5(a); see Hope v. City of Laguna Vista, 721 S.W.2d 463 (Tex. Civ. App.-Corpus Christi 1986, writ ref'd n.r.e.) (general-law cities have only conferred powers)). Reading the statute's language in the context of chapter 113 as a whole, the AG concluded the preempted subject matter is the regulation of the LPG industry itself (Ross v. St. Luke's Episcopal Hosp., 462 S.W.3d 496 (Tex. 2015); Rylander v. Fisher Controls Int'l, Inc., 45 S.W.3d 291 (Tex. App.-Austin 2001, no pet.); Anderson v. Penix, 161 S.W.2d 455 (Tex. 1942); Smith v. Koenning, 398 S.W.2d 411 (Tex. App.-Corpus Christi 1965, writ ref'd n.r.e.)).

On the retroactivity question, the AG relied on the presumption that statutes operate prospectively but explained that a statute does not operate retrospectively merely because it upsets expectations based on prior law, and that a political subdivision has no vested right in the continuation of existing law (Tex. Gov't Code § 311.022; Tex. Const. art. I, § 16; Quick v. City of Austin, 7 S.W.3d 109 (Tex. 1998); Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212 (Tex. 2002); Robinson v. Crown Cork & Seal Co., Inc., 335 S.W.3d 126 (Tex. 2010)). Reading section 113.054 to grandfather existing ordinances would frustrate the Legislature's uniformity goal (Tex. Dep't of Transp. v. City of Sunset Valley, 146 S.W.3d 637 (Tex. 2004)).

Citations

Constitutional and statutory provisions:

• Tex. Const. art. XI, § 5(a) (home-rule cities; ordinances consistent with state law)
• Tex. Const. art. I, § 16 (no retroactive law)
• Tex. Nat. Res. Code § 113.011 (Railroad Commission administers LPG laws)
• Tex. Nat. Res. Code § 113.051 (Commission rules and standards for the LPG industry)
• Tex. Nat. Res. Code § 113.052 (adoption of national codes as standards)
• Tex. Nat. Res. Code § 113.054 (preemption of local LPG provisions; permission process)
• Tex. Gov't Code § 311.022 (statutes presumed prospective)

Cases:

• S. Crushed Concrete, LLC v. City of Houston, 398 S.W.3d 676 (Tex. 2013)
• City of Houston v. Bates, 406 S.W.3d 539 (Tex. 2013)
• Dallas Merch.'s & Concessionaire's Ass'n v. City of Dallas, 852 S.W.2d 489 (Tex. 1993)
• Ross v. St. Luke's Episcopal Hosp., 462 S.W.3d 496 (Tex. 2015)
• Rylander v. Fisher Controls Int'l, Inc., 45 S.W.3d 291 (Tex. App.-Austin 2001, no pet.)
• Anderson v. Penix, 161 S.W.2d 455 (Tex. 1942)
• Smith v. Koenning, 398 S.W.2d 411 (Tex. App.-Corpus Christi 1965, writ ref'd n.r.e.)
• Quick v. City of Austin, 7 S.W.3d 109 (Tex. 1998)
• Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212 (Tex. 2002)
• Robinson v. Crown Cork & Seal Co., Inc., 335 S.W.3d 126 (Tex. 2010)
• Tex. Dep't of Transp. v. City of Sunset Valley, 146 S.W.3d 637 (Tex. 2004)
• Hope v. City of Laguna Vista, 721 S.W.2d 463 (Tex. Civ. App.-Corpus Christi 1986, writ ref'd n.r.e.)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0086
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2016/kp0086.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

May 10, 2016

The Honorable Drew Darby Opinion No. KP-0086
Chair, Committee on Energy Resources
Texas House of Representatives Re: The effect of section 113.054 of the
Post Office Box 2910 Natural Resources Code on a political
Austin, Texas 78768-2910 subdivision's authority to adopt ordinances
relating to the liquefied petroleum gas
industry (RQ-0073-KP)

Dear Representative Darby:

You ask five questions about the effect of section 113.054 of the Natural Resources Code on a political subdivision's authority to adopt ordinances relating to the liquefied petroleum gas industry. [1] The industry is regulated by the Railroad Commission (the "Commission"), which administers and enforces the state's laws relating to liquefied petroleum gas ("LPG") pursuant to chapter 113 of the Natural Resources Code (the "LPG Code"). TEX. NAT. RES. CODE § 113.011. The LPG Code generally directs the Commission to adopt rules and standards, or both, "relating to any and all aspects or phases of the LPG industry that will protect or tend to protect the health, welfare, and safety of the general public." Id. § 113.051; see also id. § 113.052 (specifying that the Commission may adopt by reference certain national published codes as "standards" for various LPG-related purposes). In 2011, the Legislature adopted section 113.054, which provides that these rules and standards "preempt and supersede any ordinance, order, or rule adopted by a political subdivision ... relating to any aspect or phase of the liquefied petroleum gas industry." Id. § 113.054. Section 113.054 does, however, permit a political subdivision to petition the Commission for "permission to promulgate more restrictive rules and standards only if [it] can prove that the more restrictive rules and standards enhance public safety." Id.

You bring to our attention two separate home-rule city ordinances, which you assert exist "contrary to the plain meaning" of section 113.054. Request Letter at 2. You tell us that neither of the home-rule cities has petitioned the Commission for permission to enact or continue these ordinances in effect. Id. at 2-3. Absent such permission, you assert, the Commission's rules and standards "preempt and supersede" the ordinances at issue. Id. at 2. Given the arguments each city makes regarding the validity of its respective ordinances, your questions essentially focus on three scenarios and the manner in which section 113.054 would govern each: (1) a local ordinance or rule that is less restrictive than a corresponding rule or standard of the Commission; (2) a local ordinance or rule relating to an aspect or phase of the LPG industry on which the Commission has not yet adopted a rule or standard; and (3) a local ordinance or rule that was already in place when section 113.054 went into effect, regardless of how restrictive it may be. [2]

Generally, home-rule cities have "the full power of self-government and look to the Legislature, not for grants of power, but only for limitations on their powers." S. Crushed Concrete, LLC v. City of Houston, 398 S.W.3d 676, 678 (Tex. 2013); see also TEX. CONST. art. XI, § 5(a) (no home-rule ordinance "shall contain any provision inconsistent with" state law or the Texas Constitution). [3] But "[t]he Legislature may limit a home-rule city's broad powers when it expresses its intent to do so with 'unmistakable clarity.'" City of Houston v. Bates, 406 S.W.3d 539, 546 (Tex. 2013) (quoting Dallas Merch.'s & Concessionaire's Ass'n v. City of Dallas, 852 S.W.2d 489, 490-91 (Tex. 1993)). In construing section 113.054 to give effect to the Legislature's intent, we "look first and foremost to the language of the statute." Ross v. St. Luke's Episcopal Hosp., 462 S.W.3d 496, 501 (Tex. 2015). Section 113.054 plainly states that the Commission's rules and standards "preempt and supersede any ordinance, order, or rule adopted by a political subdivision ... relating to any aspect or phase of the liquefied petroleum gas industry." TEX. NAT. RES. CODE § 113.054 (emphasis added). The Texas Supreme Court has explained that a home-rule ordinance "that attempts to regulate a subject matter preempted by a state statute is unenforceable to the extent it conflicts with the state statute." City of Houston, 406 S.W.3d at 546. Here, the "subject matter" preempted by section 113.054 is not an individual aspect of the LPG industry, such as container size, storage, etc., but the regulation of the industry itself. Thus, the existence of an unapproved local LPG provision would generally be in conflict with the statute's mandate that local-level regulation be preempted and superseded by the Commission's regulation.

It has been suggested that section 113.054 could be read to permit municipalities to enact ordinances that are less restrictive than the Commission's rules and standards without having to petition the Commission for permission. See Houston Brief at 5-6. But this portion of section 113.054 must be read in the context of chapter 113 as a whole. Rylander v. Fisher Controls Int'l, Inc., 45 S.W.3d 291, 299 (Tex. App.-Austin 2001, no pet.). Given the purpose of the Commission's regulation "to protect the health, welfare, and safety of the general public" with respect to liquefied petroleum gas, TEX. NAT. RES. CODE § 113.051, section 113.054's requirement that a political subdivision seek permission to promulgate local provisions that are "more restrictive" than those of the Commission, id. § 113.054, likely means that such a category is the only type which may be promulgated by a political subdivision, with permission of the Commission under the standard set forth in section 113.054. Construing section 113.054 otherwise would result in less-restrictive rules promulgated by municipalities that would immediately be preempted and superseded by operation of section 113.054. See Anderson v. Penix, 161 S.W.2d 455, 458-59 (Tex. 1942) (providing that "a statute will not be construed so as to ascribe to the Legislature [the intent] to do ... an unreasonable thing," if a construction not resulting in such a manner can be accomplished). Thus, a political subdivision may petition the Commission under section 113.054 for permission to promulgate local provisions relating to any aspect or phase of the LPG industry only when such local provisions would be more restrictive than the rules or standards adopted by the Commission.

By its plain language, section 113.054 applies only to "rules and standards promulgated and adopted by the commission under Section 113.051." TEX. NAT. RES. CODE § 113.054 (emphasis added). The purpose of such regulation, once adopted, is "to protect the health, welfare, and safety of the general public" with respect to liquefied petroleum gas. Id. § 113.051; see also Smith v. Koenning, 398 S.W.2d 411, 415-16 (Tex. App.-Corpus Christi 1965, writ ref'd n.r.e.) (taking judicial notice of "the inherently explosive and dangerous nature of butane gas" and noting that legislative recognition of such facts led to the passage of the original LPG Code). By mandating the Commission's regulation of "any and all aspects or phases of the LPG industry," TEX. NAT. RES. CODE § 113.051, and permitting more restrictive local rules and standards only under certain circumstances with permission of the Commission, id. § 113.054, the Legislature has evidenced an intent that the Commission's rules and standards constitute a regulatory ceiling. Thus, where the Commission has not yet adopted a rule or standard relating to a particular aspect or phase of the LPG industry, any local rule or ordinance on the same aspect or phase automatically creates a more restrictive regulatory framework than the existing Commission framework. Accordingly, absent Commission permission, the local rule or ordinance in that instance would be preempted. Construing section 113.054 otherwise to permit a patchwork of local provisions on some aspect or phase of the LPG industry pending Commission regulation on that subject would frustrate the Legislature's intent under the text of the law to maintain consistent statewide regulation of the industry.

It has also been suggested that section 113.054 "does not apply to local LPG rules that existed before the statute's effective date," on the theory that a statute is presumed to be prospective in its operation. Houston Brief at 5; see also TEX. GOV'T CODE § 311.022 ("[a] statute is presumed to be prospective in its operation unless expressly made retrospective"); TEX. CONST. art. I, § 16 ("[n]o ... retroactive law ... shall be made"). But "[a] statute does not operate 'retrospectively' merely because it ... upsets expectations based in prior law." Quick v. City of Austin, 7 S.W.3d 109, 132 (Tex. 1998) (internal quotations omitted). Section 113.054 does not purport to operate before its effective date. [4] What it does is extinguish local provisions on its effective date, regardless of when the local provisions may have originally been enacted. And there is no right of a political subdivision in the continuation of present laws regarding a particular subject. Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 219 (Tex. 2002); see also Robinson v. Crown Cork & Seal Co., Inc., 335 S.W.3d 126, 139 (Tex. 2010) (acknowledging that "[m]ost statutes operate to change existing conditions"). Construing section 113.054 to impliedly "grandfather" already-existing local ordinances would frustrate the intent of the Legislature to achieve uniformity in the regulation of the LPG industry, as political subdivisions could simply leave their local ordinances in place. See Tex. Dep't of Transp. v. City of Sunset Valley, 146 S.W.3d 637, 642 (Tex. 2004) (courts "consider the objective the law seeks to obtain and the consequences of a particular construction").

Thus, in the three scenarios that form the essence of your inquiry, section 113.054 would operate to preempt and supersede existing local ordinances, orders, or rules without regard to their level of restriction or date of enactment, and without regard to whether the Commission has adopted rules or standards governing a particular aspect or phase of the LPG industry, absent the Commission's permission as otherwise provided by section 113.054.

SUMMARY

Section 113.054 of the Natural Resources Code preempts and supersedes existing local ordinances, orders, or rules without regard to their level of restriction or date of enactment, and without regard to whether the Texas Railroad Commission has adopted rules or standards governing a particular aspect or phase of the liquefied petroleum gas ("LPG") industry, absent the Commission's permission as otherwise provided by section 113.054.

A political subdivision may petition the Commission under section 113.054 for permission to promulgate local provisions relating to any aspect or phase of the LPG industry only when such local provisions would be more restrictive than the rules or standards adopted by the Commission.

Very truly yours,

KEN PAXTON
Attorney General of Texas

JEFFREY C. MATEER
First Assistant Attorney General

BRANTLEY STARR
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

BECKY P. CASARES
Assistant Attorney General, Opinion Committee

[1] See Letter from Honorable Drew Darby, Chair, House Comm. on Energy Res., to Honorable Ken Paxton, Tex. Att'y Gen. at 3-4 (Nov. 12, 2015), https://www.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs; see also Exhibits A-C attached to Request Letter (on file with the Op. Comm.) ("Request Letter" and "Exhibits").

[2] See generally Request Letter; Brief from Donna L. Edmundson, City Att'y, City of Houston (Dec. 11, 2015) ("Houston Brief"); Brief from Brandon S. Shelby, City Att'y, City of Sherman (Dec. 14, 2015) ("Sherman Brief") (briefs on file with the Op. Comm.).

[3] In contrast, general-law cities possess only those powers and privileges conferred by law. Hope v. City of Laguna Vista, 721 S.W.2d 463, 463-64 (Tex. Civ. App.-Corpus Christi 1986, writ ref'd n.r.e.).

[4] See Act of May 26, 2011, 82d Leg., R.S., ch. 1020, § 2, Tex. Gen. Laws 2579, 2579 (codified at TEX. NAT. RES. CODE § 113.054) (providing an effective date of September 1, 2011).