LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 79TH LEGISLATIVE REGULAR SESSION

April 18, 2005

TO:	Honorable Kenneth Armbrister, Chair, Senate Committee on Natural Resources
FROM:	John S. O'Brien, Deputy Director, Legislative Budget Board
IN RE:	SB949 by Armbrister (Relating to the informal resolution of certain proceedings conducted by the Railroad Commission of Texas. ), Committee Report 1st House, Substituted

Estimated Two-year Net Impact to General Revenue Related Funds for SB949, Committee Report 1st House, Substituted: a negative impact of ($800,288) through the biennium ending August 31, 2007.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.

General Revenue-Related Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2006	($407,674)
2007	($392,614)
2008	($392,614)
2009	($392,614)
2010	($392,614)

All Funds, Five-Year Impact:

Fiscal Year	Probable (Cost) from GENERAL REVENUE FUND 1	Change in Number of State Employees from FY 2005
2006	($407,674)	4.0
2007	($392,614)	4.0
2008	($392,614)	4.0
2009	($392,614)	4.0
2010	($392,614)	4.0

Fiscal Analysis

The bill would require that all claims, complaints, investigations, inquiries, or other contested matters to go through mediation by the Railroad Commission before being subject to a contested hearing. The Railroad Commission would be required to establish a process for mediating contested proceedings and conduct limited discovery as part of the mediation process. Parties to the contested proceedings would be required to pay the cost of Railroad Commission's mediator's travel.

Methodology

It is assumed that the bill's passage would result in a significant increase in the number of informal complaints handled by the Railroad Commission. It is also assumed that a portion of the informal complaints would become formal complaints and require hearings. It is estimated that the Railroad Commission would require 4 additional FTEs to handle the additional workload, including making determinations on costs incurred by the parties to the dispute, resulting in additional staff-related and travel costs. However, this estimate assumes that the agency would recover all related travel costs (approximately $30,000 per year). Costs to acquire computers and provide training for the additional FTEs of $15,060 are included in fiscal year 2006.

This estimate that all mediation costs would be paid out of the General Revenue Fund. The bill would take effect on September 1, 2005.

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

455 Railroad Commission, 302 Office of the Attorney General

LBB Staff:

JOB, WK, ZS, TL