HBA-SEB H.B. 3719 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3719 By: Merritt Energy Resources 4/19/1999 Introduced BACKGROUND AND PURPOSE The Oil Spill Prevention and Response Act of 1991 (OSPRA) provides for funding through a two cent charge for every barrel of oil loaded or unloaded at Texas ports. The fund, however, may not exceed $50 million, and additional funds are given to the Railroad Commission of Texas (commission). H.B. 3719 eliminates the cap set for the OSPRA fund, transfers all funds to the commission for the oil-field cleanup fund, and increases the fee to four cents per barrel. This bill also authorizes the commission to reduce certain statutory fees if the commission determines that a portion of the revenue from the fees is not necessary to accomplish the purposes of the fund. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Railroad Commission of Texas in SECTION 10 (Section 91.1111, Natural Resources Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sections 40.151(b) and (e), Natural Resources Code, as follows: (b) Deletes existing text requiring the coastal protection fund to be used only for carrying out the purposes of this chapter (Oil Spill Prevention and Response Act), and prohibiting the fund from exceeding $50 million. (e) Requires the comptroller to transfer all fees, penalties, judgments, reimbursements, and charges levied and collected under Section 40.155 to the Railroad Commission of Texas for the oil-field cleanup fund. Deletes existing text regarding the amount of money in the fund. Creates Subsection (f) from existing text. SECTION 2. Amends Section 40.155, Natural Resources Code, as follows: Sec. 40.155. New title: AMOUNT OF FEE. Requires the rate of the coastal protection fee to be four, rather than two, cents per barrel of crude oil. Deletes the remainder of the section, regarding the determination of the fee and the balance of the fund. SECTION 3. Amends Section 91.111(c), Natural Resources Code, which provides that the fund includes income deposited under Section 40.151(e). Makes a conforming change. SECTION 4. Repealers: Sections 40.156(b) (requiring the Commissioner of the General Land Office to publish a specific finding) and (c) (requiring the Commissioner of the General Land Office to reinstate a fee in the event of an emergency), Natural Resources Code. SECTION 5. Amends Section 91.112(a), Natural Resources Code, to authorize money in the fund to be used by the Railroad Commission of Texas (commission) or its employees or agents for implementing the provisions of Chapter 40 that relate to the authority of the commission, including administering or enforcing any permits, rules, or orders adopted by the commission thereunder. SECTION 6. Amends Sections 85.2021(a) and (c), Natural Resources Code, to provide an application for a permit to drill, deepen, plug back, or reenter a well or for a time extension to plug a well is submitted with a fee that may be established by the commission, by rule, in accordance with Section 91.1111, in a lesser amount than already specified. SECTION 7. Amends Section 91.104(c), Natural Resources Code, to make a conforming change with respect to a fee submitted by a person filing a form of financial security other than a bond. SECTION 8. Amends Section 81.116(a), Natural Resources Code, to make conforming changes with respect to an oil-field cleanup regulatory fee for crude petroleum produced in this state. SECTION 9. Amends Section 81.117(a), Natural Resources Code, to make conforming changes with respect to an oil-field cleanup fee for gas initially produced and saved in this state. SECTION 10. Amends Chapter 91, Natural Resources Code, by adding Section 91.1111, as follows: Sec. 91.1111. REDUCTION IN FEES. Authorizes the commission, by rule, to reduce certain statutory fees if the commission determines that a portion of the revenue from the fees is not necessary to fully accomplish the purposes of the fund. Authorizes the commission to reinstate all or any portion of a fee reduction if the commission determines that the additional revenues are necessary to fully accomplish those purposes. SECTION 11. Repeals Section 34, Chapter 603, Acts of the 72nd Legislature Regular Session, 1991. This section currently repeals Sections 85.2021 (Drilling Permit Fee), 81.116 (Oil-Field Cleanup Regulatory Fee on Oil), and 81.117 (Oil-Field Cleanup Regulatory Fee on Gas), Natural Resources Code. SECTION 12. Effective date of SECTIONS 1-10 of this Act: September 1, 1999. Effective date of SECTION 11 of this Act: August 31, 1999. SECTION 13. Emergency clause.