LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
 
April 7, 2011

TO:
Honorable Troy Fraser, Chair, Senate Committee on Natural Resources
 
FROM:
John S O'Brien, Director, Legislative Budget Board
 
IN RE:
SB1134 by Hegar (Relating to the issuance of permits for certain facilities regulated by the Texas Commission on Environmental Quality.), Committee Report 1st House, Substituted

No significant fiscal implication to the State is anticipated.

The bill would prohibit the Texas Commission on Environmental Quality (TCEQ) from promulgating new or amending existing authorizations [Permits by Rule (PBR) or Standard Permits (SP)] for the oil and gas industry without performing a regulatory impact analysis (RIA), extensive monitoring, and correlated modeling.  The bill would limit the use of worst-case modeling inputs and require actual air quality monitoring data.
 
The bill would provide a definition of planned maintenance, startup, and shutdown (MSS) activities and would extend the deadline for filing an application to authorize MSS activities until January 5, 2014 necessary to maintain certain affirmative defense criteria. The bill would also require that any PBR or SP adopted or amended by the agency that authorizes planned MSS activities must also conduct a RIA, perform monitoring, and perform correlated monitoring.
 
The bill would only apply to a PBR or SP adopted by the agency after the effective date of the bill, which is September 1, 2011 or upon receiving a two-thirds vote of both houses.

The TCEQ reports that it adopted a new PBR and SP in January 2011 for counties in the Barnett Shale
region, a 23-county area in the vicinity of Fort Worth. For purposes of this fiscal note, it is
assumed that the bill’s provisions would apply to all counties in the state except for those in the
Barnett Shale and that the TCEQ would have until January 5, 2014 to adopt a PBR for the area outside the Barnett Shale.

Passage of the bill is expected to result in the TCEQ requiring additional staff hours during
rulemaking projects to perform the additional research and documentation needed to meet the
proposed RIA requirements, depending upon the number of additional rulemaking projects. This
estimate assumes that air monitoring would be done using existing equipment and analysis resources.
It is estimated that the additional costs the agency would incur upon passage of the bill could be
absorbed using existing agency resources. If additional air monitoring would be needed to meet the
requirements of the bill, costs to the TCEQ could be significant but would depend on the number of
monitors needed.


Local Government Impact

No significant fiscal implication to units of local government is anticipated.


Source Agencies:
582 Commission on Environmental Quality
LBB Staff:
JOB, SZ, TL