LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 4, 2001
TO: Honorable Fred M. Bosse, Chair, House Committee on Civil
Practices
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB3533 by Tillery (Relating to liability for the
transportation of hazardous substances by pipeline.), As
Introduced
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* No fiscal implication to the State is anticipated. *
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The bill would require owners of a pipeline that transports hazardous
substances, as defined by the bill, to maintain insurance coverage in
the amount of $750 million or more for each single occurrence of death,
personal injury, or property damage.
Local Government Impact
According to the Texas Railroad Commission, there are 84 municipalities
that would be impacted by the provisions of the bill based on
municipally-owned utilities that include owning pipelines that transport
substances listed in the bill as hazardous. Current limits of liability
purchased by the municipalities that would be impacted range from
$500,000 to $5 million, according to a list provided by the Texas
Municipal League insurance risk pool. Costs for coverage range from $410
annually in the City of Goldsmith for a $500,000 policy to $10,614
annually in the City of Del Rio. Costs of policies vary depending on
reported exposures.
The cities of Corpus Christi, Brenham, Dumas, and Grey Forest were also
contacted directly. Each city utility representative indicated that
their city would not be able to bear the cost of insurance coverage in
the amount that would be required under the proposed statute. Grey
Forest, for example, currently pays over $10,000 per year for $5 million
in coverage.
Source Agencies: 582 Texas Natural Resource Conservation Commission,
455 Railroad Commission of Texas
LBB Staff: JK, TB, DB, TL