LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION May 22, 2013 TO: Honorable Joe Straus, Speaker of the House, House of Representatives FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3309 by Crownover (Relating to the composition and use of money in the oil and gas regulation and cleanup fund.), As Passed 2nd House Estimated Two-year Net Impact to General Revenue Related Funds for HB3309, As Passed 2nd House: a negative impact of ($927,234) through the biennium ending August 31, 2015. 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, 83RD LEGISLATIVE REGULAR SESSION
May 22, 2013
TO: Honorable Joe Straus, Speaker of the House, House of Representatives FROM: Ursula Parks, Director, Legislative Budget Board IN RE:HB3309 by Crownover (Relating to the composition and use of money in the oil and gas regulation and cleanup fund.), As Passed 2nd House
TO: Honorable Joe Straus, Speaker of the House, House of Representatives
FROM: Ursula Parks, Director, Legislative Budget Board
IN RE: HB3309 by Crownover (Relating to the composition and use of money in the oil and gas regulation and cleanup fund.), As Passed 2nd House
Honorable Joe Straus, Speaker of the House, House of Representatives
Honorable Joe Straus, Speaker of the House, House of Representatives
Ursula Parks, Director, Legislative Budget Board
Ursula Parks, Director, Legislative Budget Board
HB3309 by Crownover (Relating to the composition and use of money in the oil and gas regulation and cleanup fund.), As Passed 2nd House
HB3309 by Crownover (Relating to the composition and use of money in the oil and gas regulation and cleanup fund.), As Passed 2nd House
Estimated Two-year Net Impact to General Revenue Related Funds for HB3309, As Passed 2nd House: a negative impact of ($927,234) through the biennium ending August 31, 2015. 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 HB3309, As Passed 2nd House: a negative impact of ($927,234) through the biennium ending August 31, 2015.
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 2014 ($463,617) 2015 ($463,617) 2016 ($463,617) 2017 ($463,617) 2018 ($463,617)
2014 ($463,617)
2015 ($463,617)
2016 ($463,617)
2017 ($463,617)
2018 ($463,617)
All Funds, Five-Year Impact: Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromOil & Gas Regulation5155 Probable Savings/(Cost) fromOil & Gas Regulation5155 2014 ($1,400,000) $936,383 $1,400,000 ($936,838) 2015 ($1,400,000) $936,383 $1,400,000 ($936,838) 2016 ($1,400,000) $936,383 $1,400,000 ($936,838) 2017 ($1,400,000) $936,383 $1,400,000 ($936,838) 2018 ($1,400,000) $936,383 $1,400,000 ($936,838)
Fiscal Year Probable Revenue Gain/(Loss) fromGeneral Revenue Fund1 Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Revenue Gain/(Loss) fromOil & Gas Regulation5155 Probable Savings/(Cost) fromOil & Gas Regulation5155 2014 ($1,400,000) $936,383 $1,400,000 ($936,838) 2015 ($1,400,000) $936,383 $1,400,000 ($936,838) 2016 ($1,400,000) $936,383 $1,400,000 ($936,838) 2017 ($1,400,000) $936,383 $1,400,000 ($936,838) 2018 ($1,400,000) $936,383 $1,400,000 ($936,838)
2014 ($1,400,000) $936,383 $1,400,000 ($936,838)
2015 ($1,400,000) $936,383 $1,400,000 ($936,838)
2016 ($1,400,000) $936,383 $1,400,000 ($936,838)
2017 ($1,400,000) $936,383 $1,400,000 ($936,838)
2018 ($1,400,000) $936,383 $1,400,000 ($936,838)
Fiscal Analysis
The bill would provide that fees collected under Natural Resources Code, § 91.0115, for surface casing determination (groundwater protection) letters fees be deposited to the General Revenue-Dedicated Oil and Gas Regulation and Cleanup (OGRC) Account No. 5155. The bill would also increase the fund balance ceiling on the OGRC Account No. 5155, or the balance of the account at which fees deposited to the account are suspended, from $20 million to $30 million, and the bill would increase the fund balance limit at which the fees are reinstated from $10 million to $25 million. The bill would take effect on September 1, 2013.
The bill would provide that fees collected under Natural Resources Code, § 91.0115, for surface casing determination (groundwater protection) letters fees be deposited to the General Revenue-Dedicated Oil and Gas Regulation and Cleanup (OGRC) Account No. 5155.
The bill would also increase the fund balance ceiling on the OGRC Account No. 5155, or the balance of the account at which fees deposited to the account are suspended, from $20 million to $30 million, and the bill would increase the fund balance limit at which the fees are reinstated from $10 million to $25 million.
The bill would take effect on September 1, 2013.
Methodology
Currently, funds collected for surface casing letters of determination are deposited into General Revenue and then a portion of those funds are appropriated to the Railroad Commission as part of the agency's General Revenue funding. The agency reports collections of $1,441,882 in fiscal year 2012 from the expedited fee for surface casing letters of determination, and a General Revenue appropriation for the purpose of making surface casing determinations of $784,740 for the same year. According to the Comptroller of Public Accounts, upon passage of the bill, revenue to the General Revenue Fund would decrease by an estimated $1.4 million per fiscal year. Assuming fiscal year 2012 appropriation levels for the surface casing program will continue through fiscal year 2018, and assuming that amounts associated with employee benefits for surface casing FTEs currently paid out of General Revenue (estimated to be $161,643) would shift to the OGRC Account No. 5155 upon passage of the bill, it is estimated that costs out of the General Revenue Fund would decrease by $0.9 million per fiscal year. Likewise, revenues to the Oil and Gas Regulation and Cleanup Account No. 5155 would increase by $1.4 million, while costs to the account would increase by $0.9 million per fiscal year. This estimate does not assume that increasing the cap on the OGRC Account No. 5155 and/or increasing the fund balance limit at which fees are reinstated would result in a significant fiscal impact. This estimate assumes that the unencumbered fund balance would not exceed the ceiling under current law.
Currently, funds collected for surface casing letters of determination are deposited into General Revenue and then a portion of those funds are appropriated to the Railroad Commission as part of the agency's General Revenue funding. The agency reports collections of $1,441,882 in fiscal year 2012 from the expedited fee for surface casing letters of determination, and a General Revenue appropriation for the purpose of making surface casing determinations of $784,740 for the same year.
According to the Comptroller of Public Accounts, upon passage of the bill, revenue to the General Revenue Fund would decrease by an estimated $1.4 million per fiscal year. Assuming fiscal year 2012 appropriation levels for the surface casing program will continue through fiscal year 2018, and assuming that amounts associated with employee benefits for surface casing FTEs currently paid out of General Revenue (estimated to be $161,643) would shift to the OGRC Account No. 5155 upon passage of the bill, it is estimated that costs out of the General Revenue Fund would decrease by $0.9 million per fiscal year. Likewise, revenues to the Oil and Gas Regulation and Cleanup Account No. 5155 would increase by $1.4 million, while costs to the account would increase by $0.9 million per fiscal year.
This estimate does not assume that increasing the cap on the OGRC Account No. 5155 and/or increasing the fund balance limit at which fees are reinstated would result in a significant fiscal impact. This estimate assumes that the unencumbered fund balance would not exceed the ceiling under current law.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts, 455 Railroad Commission
304 Comptroller of Public Accounts, 455 Railroad Commission
LBB Staff: UP, SZ, ZS, TL
UP, SZ, ZS, TL