LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION May 3, 2011 TO: Honorable Jim Keffer, Chair, House Committee on Energy Resources FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB1294 by Hegar (Relating to the imposition of administrative penalties by the Railroad Commission of Texas.), As Engrossed Estimated Two-year Net Impact to General Revenue Related Funds for SB1294, As Engrossed: a positive impact of $4,800,226 through the biennium ending August 31, 2013. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
May 3, 2011
TO: Honorable Jim Keffer, Chair, House Committee on Energy Resources FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB1294 by Hegar (Relating to the imposition of administrative penalties by the Railroad Commission of Texas.), As Engrossed
TO: Honorable Jim Keffer, Chair, House Committee on Energy Resources
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: SB1294 by Hegar (Relating to the imposition of administrative penalties by the Railroad Commission of Texas.), As Engrossed
Honorable Jim Keffer, Chair, House Committee on Energy Resources
Honorable Jim Keffer, Chair, House Committee on Energy Resources
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
SB1294 by Hegar (Relating to the imposition of administrative penalties by the Railroad Commission of Texas.), As Engrossed
SB1294 by Hegar (Relating to the imposition of administrative penalties by the Railroad Commission of Texas.), As Engrossed
Estimated Two-year Net Impact to General Revenue Related Funds for SB1294, As Engrossed: a positive impact of $4,800,226 through the biennium ending August 31, 2013. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1294, As Engrossed: a positive impact of $4,800,226 through the biennium ending August 31, 2013.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2012 $2,400,113 2013 $2,400,113 2014 $2,400,113 2015 $2,400,113 2016 $2,400,113
2012 $2,400,113
2013 $2,400,113
2014 $2,400,113
2015 $2,400,113
2016 $2,400,113
All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain fromGeneral Revenue Fund1 Probable Revenue Gain fromOil-field Cleanup Acct145 2012 $2,400,113 $987,131 2013 $2,400,113 $987,131 2014 $2,400,113 $987,131 2015 $2,400,113 $987,131 2016 $2,400,113 $987,131
Fiscal Year Probable Revenue Gain fromGeneral Revenue Fund1 Probable Revenue Gain fromOil-field Cleanup Acct145 2012 $2,400,113 $987,131 2013 $2,400,113 $987,131 2014 $2,400,113 $987,131 2015 $2,400,113 $987,131 2016 $2,400,113 $987,131
2012 $2,400,113 $987,131
2013 $2,400,113 $987,131
2014 $2,400,113 $987,131
2015 $2,400,113 $987,131
2016 $2,400,113 $987,131
Fiscal Analysis
The bill would authorize the Railroad Commission to expand the scope of violations for which the Commission is authorized to assess administrative penalties from violations of safety or prevention or control of pollution to violations of all activities regulated by the Commission under Title 3 of the Natural Resources Code. The bill would increases the maximum penalty the Commission may assess from $10,000 to $25,000 per day per violation. The bill also would requires the Railroad Commission to adopt guidelines to be used in determining the amount of a penalty for all violations, not just those relating to pipeline safety, and to use the same factors that are considered by pipeline safety in determining the amount. The bill would also increase from $1,000 to $25,000 the maximum administrative penalty the Railroad Commission may impose for each violation of false applications, reports, and documents and tampering with gauges.
The bill would authorize the Railroad Commission to expand the scope of violations for which the Commission is authorized to assess administrative penalties from violations of safety or prevention or control of pollution to violations of all activities regulated by the Commission under Title 3 of the Natural Resources Code. The bill would increases the maximum penalty the Commission may assess from $10,000 to $25,000 per day per violation.
The bill also would requires the Railroad Commission to adopt guidelines to be used in determining the amount of a penalty for all violations, not just those relating to pipeline safety, and to use the same factors that are considered by pipeline safety in determining the amount.
The bill would also increase from $1,000 to $25,000 the maximum administrative penalty the Railroad Commission may impose for each violation of false applications, reports, and documents and tampering with gauges.
Methodology
The Railroad Commission anticipates that additional revenue would be received as a result of the bill's 150 percent increase in the statutory caps on violations. Because the Railroad Commission reports that it does not assess the statutory cap on most violations, this estimate assumes that the amount assessed on violations would increase by 150 percent, proportional to the increase in the statutory cap provided by the bill. The revenue gains shown in the table above are based on a 150 percent increase in administrative penalties for pipeline safety, damage prevention, and oil and gas well drilling violations, as provided by the Railroad Commission. The proportion of the revenue gain allocated to General Revenue and the General Revenue-Dedicated Oil Field Cleanup Account No. 145 is based on the current assessments and collections of violation payments by the Railroad Commission.
The Railroad Commission anticipates that additional revenue would be received as a result of the bill's 150 percent increase in the statutory caps on violations. Because the Railroad Commission reports that it does not assess the statutory cap on most violations, this estimate assumes that the amount assessed on violations would increase by 150 percent, proportional to the increase in the statutory cap provided by the bill.
The revenue gains shown in the table above are based on a 150 percent increase in administrative penalties for pipeline safety, damage prevention, and oil and gas well drilling violations, as provided by the Railroad Commission. The proportion of the revenue gain allocated to General Revenue and the General Revenue-Dedicated Oil Field Cleanup Account No. 145 is based on the current assessments and collections of violation payments by the Railroad Commission.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 455 Railroad Commission
455 Railroad Commission
LBB Staff: JOB, SZ, ZS, TL
JOB, SZ, ZS, TL