LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 24, 2001
TO: Honorable Ron E. Lewis, Chair, House Committee on Energy
Resources
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2438 by Merritt (Relating to transferring
administrative hearings performed by the Railroad
Commission of Texas to the State Office of
Administrative Hearings.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2438, As Introduced: negative impact of $(2,938,264) through *
* the biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(1,507,632) *
* 2003 (1,430,632) *
* 2004 (1,430,632) *
* 2005 (1,430,632) *
* 2006 (1,430,632) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year General Revenue Fund Employees from FY 2001 *
* 0001 *
* 2002 $(1,507,632) 20.0 *
* 2003 (1,430,632) 20.0 *
* 2004 (1,430,632) 20.0 *
* 2005 (1,430,632) 20.0 *
* 2006 (1,430,632) 20.0 *
***************************************************************************
Fiscal Analysis
The bill would transfer all contested case hearings under the
jurisdiction of the Railroad Commission of Texas (Commission) to the
State Office of Administrative Hearings (SOAH). The Commission and the
Chief Administrative Law Judge (ALJ) of SOAH would adopt a Memorandum of
Understanding (MOU) providing for (SOAH) to hold all Commission hearings
authorized or required by law to be conducted under the Administrative
Procedures Act (APA). The MOU must authorize SOAH to perform any
administrative act, including giving of notice, that is required to be
performed by the Commission. The SOAH administrative law judge (ALJ)
conducting the hearing would issue the final decision in the case. The
Commission by Interagency contract would reimburse SOAH for its hearing
costs either by hourly fee or by a fixed annual fee negotiated
biennially.
Methodology
According to SOAH, the bill would have significant fiscal impact on SOAH
since this agency would hold all contested case hearings for the
Commission. SOAH estimates the annual costs resulting from the transfer
of the hearings function to SOAH would be $1,507,632.00 for the first
full fiscal year after the transfer.
According to information SOAH obtained from the Commission, in calendar
year 2000 the Commission's hearing examiners recorded 16,500 hours in
contested case activities. The hearing examiners are part of the Office
of the General Counsel, and are assigned to the Oil and Gas Section, Gas
Services Section, or Surface Mining Section. The Commission employs
seven hearing examiners and one supervising attorney in the Oil and Gas
Section, three hearing examiners and one half-time supervisor in the Gas
Services Section, and one hearing examiner in the Surface Mining Section.
Hearings support is provided by two secretaries in the Oil and Gas
Section, one secretary in the Gas Services Section, and one secretary in
the Surface Mining Section. The secretaries are either Administrative
Technicians III or IV. Two docket clerks (Administrative Technicians
III) handle the notice duties for all of the hearings.
Based upon the Commission's experience, SOAH would need 20 new FTEs to
handle the work transferred under the bill. This would include eleven
administrative law judges (ALJs) to conduct the Commission's hearings and
one ALJ/Supervisor. Given the complexity of many of the hearings, the
ALJs would need to be classified as Judge II or Judge III. In addition,
four Administrative Technicians would be needed to support the hearings
and two Docket Clerk II would be necessary to handle docketing and notice
duties. SOAH would need two FTEs to provide administrative and
technical support. Other annual costs include publishing and mailing of
hearing notices, which the Commissions estimates as $4,700, and travel
for Gas Services hearings in the local area, which is estimated to be
$1,500. Finally, because SOAH has maximized use of its existing space in
the Austin office, additional space would be needed for the new
personnel and equipment. Because the amount of State-owned space is
unknown at this time, rent has been included for the expanded Austin
office space that would be needed.
There will not be any savings to the Commission because they will need
staff in the office of general counsel since they will still be a party
to those hearings.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 304 Comptroller of Public Accounts, 360 State
Office of Administrative Hearings, 455 Railroad
Commission of Texas
LBB Staff: JK, CL, SK