HBA-TBM, CBW H.B. 3348 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 3348 By: Counts Energy Resources 7/17/2001 Enrolled BACKGROUND AND PURPOSE The oil and gas industry is plagued with rapidly rising and falling prices. Price volatility makes it very difficult for the industry to provide needed job training for field personnel. Currently, the oil and gas industry has a shortage of employees, because just a few years ago oil and gas prices were low which contributed to personnel layoffs. Also, when oil and gas prices drop companies are reluctant to invest in research and development projects. There is a need for well-financed, ongoing training programs regarding the oil and gas industry. The general public may not be educated about the oil, natural gas, and pipeline industries. A successful public education program concerning such industries will serve the people of the state well and provide understanding concerning the prices of energy. House Bill 3348 creates the Texas Energy Resource Council and the energy resource account. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the comptroller of public accounts in SECTION 1 (Sections 5.02 and 5.04, Article 441 (47g), V.T.C.S.) of this bill. ANALYSIS House Bill 3348 amends law to establish the Texas Energy Resource Council (council) to coordinate a program designed to promote environmentally sound production methods and technologies, support educational activities regarding the development of energy resources in Texas, support job training and research activities regarding energy production, educate the public regarding the importance of the oil, natural gas, and pipeline industries, and promote exploration, production, and pipeline safety (Sec. 3.01). The bill provides that the council is composed of 15 members, five of whom are executive officers of qualified producer associations or their designees. The bill requires the governor to appoint seven members of the council from lists provided by the producers. The other three members shall be appointed as specified by majority vote of the members of the council (Sec. 2.01). The bill also requires a vacancy in an appointive position on the council to be filled for the unexpired portion of the term in the same manner as the original appointment. The bill sets forth the terms of the members of the council (Sec. 2.02 and SECTION 2). The bill requires the members of the council to annually elect a presiding officer of the council, authorizes the council to elect other officers it considers necessary, and prohibits a member of the council from receiving compensation for service performed for the council. The bill sets forth provisions regarding reimbursements for actual or necessary expenses incurred in performing services as a member of the council (Secs. 2.03 and 2.04). The bill provides that the energy resource account is an account in the general revenue fund that consists of gifts and grants, transfers of money to the account by the legislature, and assessments imposed on producers of oil, gas, or condensate (producers) (Sec. 4.01). The bill provides that beginning January 1, 2002 an assessment is imposed on each producer in the amount of four-hundredths of one percent of the market value of oil, gas, and condensate produced and saved in this state by the producer. The bill prohibits a producer from being assessed more than $150,000 in any year and provides that the assessment is not an occupation tax but is governed by laws relating to gas and oil production taxes. The bill provides that assessments imposed on an affiliate or subsidiary of a producer are considered to have been imposed on the producer. The bill requires a first purchaser or producer as applicable to include as a separate item in any report required by law any information relating to the assessment (Sec. 5.01 and SECTION 3). The bill requires the comptroller of public accounts (comptroller) to retain a portion of the assessment collected to cover the costs of collecting and administering the assessment and by rule specify the portion of the assessment retained. The bill requires the comptroller to deposit the remainder of the funds collected to the credit of the energy resource account (Sec. 5.02). The bill provides that the council is responsible for taking appropriate legal action to collect any assessment that is not paid to the comptroller and provides that the comptroller is not responsible for collecting any assessment not paid to the comptroller. The bill requires the comptroller to report to the council any information obtained regarding failure of any person to properly pay the assessment and to provide to the council any documentation the comptroller may have of that failure (Sec. 5.03). The bill provides that a person is entitled to a refund of an assessment paid by the person during the preceding state fiscal year if the person submits an appropriate request for a refund. The bill sets forth provisions regarding the notice of the right to request a refund, the application for a refund, and the determination of validity by the comptroller. The bill authorizes the comptroller to adopt rules relating to assessment refunds (Sec. 5.04). EFFECTIVE DATE Vetoed.