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 ************************************************************************** * No fiscal implication to the State is anticipated. * ************************************************************************** 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