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: HB3427 by Merritt (Relating to the composition of the
oil-field cleanup fund, the amounts of certain fees
deposited to the credit of the fund, and the use of
money in the fund.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3427, As Introduced: positive impact of $0 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 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Revenue Gain/(Loss) Probable Revenue Gain/(Loss) *
* Year from Oil Field Cleanup Account/ from Coastal Protection *
* GR-Dedicated Account/ GR-Dedicated *
* 0145 0027 *
* 2002 $51,559,000 $(8,593,000) *
* 2003 53,105,000 (19,335,000) *
* 2004 54,699,000 0 *
* 2005 56,340,000 (17,186,000) *
* 2006 58,030,000 (10,741,000) *
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Fiscal Analysis
This bill would amend Chapter 40 of the Natural Resources Code to require
that the coastal protection fee collected under Section 40.155 be
deposited into GR Account No. 145 Oil-Field Cleanup fund.
The bill would eliminate the $50 million limitation on the balance in GR
Account No. 27, Coastal Protection; and it would double the coastal
protection fee to $0.04 cents per barrel of crude oil transferred to or
from a vessel at a marine terminal. In addition, the bill would remove
language directing that collection of the fee stop and start depending on
the balance in GR Account No. 27.
The bill would grant the Railroad Commission the authority to reduce or
increase, alternately, certain fees now imposed on the exploration or
production of oil or gas, but it would not mandate a reduction in any
such fee or allow rates to exceed the limits established by current law.
Methodology
According to the Comptroller of Public Accounts (CPA), currently the
coastal protection fee is collected whenever the balance in GR Account
No. 27 is between $14 million and $25 million. The amount the CPA
determines losses will be to the Coastal Protection Account No. 27 in
each year varies based on the assumption that at some point in the year
fees will not be collected because the fund balance will be in excess of
$25 million. Under this bill, the fee rate would double, and the
revenues would be collected continuously and deposited into GR Account
No. 145. Section 91.111(b) of the Natural Resources Code, which this
bill would retain, requires that when the balance in GR Account No. 145
reaches $10 million, collection of the oil-field cleanup fees must stop,
only to resume when the balance falls below $6 million.
The CPA states that there would be no direct effect from removing the $50
million cap on the balance in GR Account No. 27 because the major source
of revenue into this account is from the coastal protection fee, which
would be deposited into GR Account No. 145.
The CPA indicates that for the purposes of this fiscal note, it was not
possible to predict when the balance in GR Account No. 145 would reach
$10 million, thereby halting collection of the oil-field cleanup fees.
It is not possible to predict the likely magnitude and rate for
expenditures from this account pursuant to RRC actions under this bill.
Likewise the CPA indicates that it is not possible to determine which,
if any, of the fees authorized for reduction by RRC might ultimately be
reduced or eliminated, thereby reducing the flow of revenue into the
account.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 582 Texas Natural Resource Conservation Commission,
304 Comptroller of Public Accounts
LBB Staff: JK, CL, SK, ZS