Texas Legislature tasks licensing agency with oversight of fuel pumps

Regulatory responsibility for motor fuel metering and quality will be transferred from the Texas Department of Agriculture (TDA) to the Texas Department of Licensing and Regulation (TDLR) under a bill passed this year by the 86th Texas Legislature and signed by the governor on June 14.

SB 2119 by Alvarado generally takes effect September 1, 2020, with some aspects of the transition taking effect immediately. The bill requires the transfer from TDA to TDLR of all of the powers, duties, and functions of the regulatory programs, which cover not only gas stations but also distributors, suppliers, and wholesalers. Until the transfer is complete, TDA is prohibited from taking any action on a complaint, investigation, contested case, or other proceeding related to the programs without the approval of the executive director of TDLR or a designee.

Under SB 2119, all full-time positions at TDA that concern the transferred regulatory programs become positions at TDLR and will be posted for hiring. Although TDLR will consider applicants who were TDA employees, it is not required to hire them.  

In addition to transferring existing regulatory programs, lawmakers created a license under the Occupations Code for motor fuel metering device service technicians and companies, which is distinct from licenses for weights and measures technicians governed under the Agriculture Code.

Supporters of SB 2119  noted that motor fuel regulatory programs originally were under TDA in the 1930s because the broad geography of the state required an agency that already worked in rural areas. They said circumstances have since changed, as consumers can now submit complaints about gas stations instantaneously, regardless of which agency regulates fuel metering and quality. They also said advancements in dispensing and monitoring systems have resulted in high industry compliance rates and made it less likely that consumers are deprived of the full amount of fuel they bought at the pump. Supporters of the transfer also said the Texas Department of Agriculture (TDA) in recent years had raised penalties on gas stations and collected more fees than necessary for enforcement. They said the Texas Department of Licensing and Regulation (TDLR) would be able to take over TDA’s fuel programs without difficulty because the agency has experience running third-party inspector programs, including for elevator and boiler inspectors, and has procedures in place for consumer complaints, enforcement, and prosecutions.

Critics of SB 2119 said the bill would result in weaker consumer protections that could leave consumers more vulnerable to being cheated at the gas pump. They said the Texas Department of Agriculture already had in place a robust and cost-effective inspections program to regulate the motor fuel industry. They said that because the agency also inspects bar code scanners, produce, and other goods sold at gas stations, it would be more cost efficient to leave the fuel regulatory programs with TDA.

Related measures. The 86th Legislature also considered related measures, such as HB 2366 by Darby, which would have capped or reduced certain fees related to the regulation of motor fuel metering devices and motor fuel quality and would have limited the authority of an authorized representative of the agriculture commissioner to test motor fuel quality, allowing testing only in response to a consumer complaint. The bill was passed by the House but died in Senate committee.

By Daniel Van Oudenaren

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