HBA-CBW H.B. 3348 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3348 By: Counts Energy Resources 3/27/2001 Introduced 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, on-going 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 fund. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Energy Resource Council in ARTICLE 4 (Section 4.03, Article 4133 (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, to support educational activities regarding the development of energy resources in the State of Texas, to support job training and research activities regarding energy production, to educate the public regarding the importance of the oil, natural gas, and pipeline industries, and to promote exploration, production, and pipeline safety. The bill provides that the council is composed of nine members and requires the governor to appoint the members of the council from lists provided by qualified producer associations. The bill provides that members serve for staggered terms of three years with the terms of three members expiring on December 31 of each year. After September 1, 2001, the bill authorizes the members of the council appointed by the governor to by majority vote appoint representatives of royalty owners, the crude oil purchasing industry, and the pipeline industry. The bill requires these additional members to have full voting rights and privileges and provides that the additional members will serve three-year terms and may be removed from the council by majority vote of the members appointed by the governor. The bill requires the members of the council to elect annually 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. The bill provides that the energy resource fund (fund) is created as a special fund in the general revenue fund and consists of gifts, grants, and funds appropriated by the legislature and the assessments collected under these provisions. The bill authorizes money in the fund to be used by the council, its employees, or agents for the purposes of the Act. The bill provides that, to fund the purposes and activities of the council, an assessment is imposed on the production of oil, gas, and condensate produced in this state in the amount of one-tenth of one percent of gross revenues received at the wellhead. The bill requires the comptroller of public accounts (comptroller) to retain a portion of the proceeds collected from the assessment in an amount approximately equal to the amount necessary to defray the costs of collecting and administering the assessment. The bill provides that the council is responsible for taking appropriate legal actions to collect any assessment which is not paid or is not properly paid and provides that the comptroller is not responsible for collecting any assessment not remitted to the comptroller for deposit in the fund. The bill requires the comptroller to report to the council any information obtained regarding failure of any person to properly pay the assessment due, including any documentation it may have of such failure. The bill provides that any person subject to the assessment may request a refund of the assessment paid on production for the preceding calendar year. The bill requires the council to refund to each person requesting a refund of the amount of the assessment paid by or on behalf of such person during the preceding calendar year and provides that refunds will include interest earned at the rate equal to the average United States Treasury bill rate of the preceding calendar year as certified by the comptroller. The bill sets forth provisions regarding the procedures relating to the request for a refund of the assessment paid. EFFECTIVE DATE September 1, 2001.