83(R) SB 1637 - Introduced version

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 83RD LEGISLATIVE REGULAR SESSION


May 4, 2013

TO:	Honorable Robert Duncan, Chair, Senate Committee on State Affairs

FROM:	Ursula Parks, Director, Legislative Budget Board

IN RE:	SB1637 by Duncan (Relating to the authority of the Railroad Commission of Texas to determine whether a person who owns, operates, or manages a pipeline is a common carrier.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for SB1637, As Introduced: a negative impact of ($1,939,904) through the biennium ending August 31, 2015.

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
2014	($969,952)
2015	($969,952)
2016	($969,952)
2017	($969,952)
2018	($969,952)

All Funds, Five-Year Impact:

Fiscal Year	Probable Savings/(Cost) from General Revenue Fund 1	Change in Number of State Employees from FY 2013
2014	($969,952)	9.0
2015	($969,952)	9.0
2016	($969,952)	9.0
2017	($969,952)	9.0
2018	($969,952)	9.0

The bill would provide for common carrier determinations by the Railroad Commission. The bill would prohibit a pipeline or gathering system from representing it to be a common carrier without first obtaining a permit from the Railroad Commission of Texas. The bill would require an applicant to submit an application to the Railroad Commission and include evidence showing that applicant qualifies as a common carrier. Applicants would also be required to give notice to landowners, counties and municipalities through which the pipeline will be operated of the application. Protests would need to be filed within 20 days of notice.

The bill would require the Railroad Commission to issue hearing notice within seven days of protest deadline to applicant and all protesting parties. The hearing would be required to be between 30 and 45 days after the protest deadline. The bill would authorize administrative approval of applications without a hearing 30 days after notice if no protest has been filed, under certain conditions.

The bill would take effect on September 1, 2013.

The Railroad Commission reports that an average of more than 200 new pipeline (T-4 permit) applications and more than 900 amendments to existing pipeline applications have been received over the past several years. The agency estimates that approximately 10 percent of these applications and amended applications may result in a protested hearing. The Railroad Commission reports that the bill's deadlines would result in the agency needing to purchase expedited transcripts from their contracted court reporting service and would likely preclude a hearings examiner from hearing other cases or doing other work for at least several days following each protested hearing. The agency estimates that the average cost of expedited transcripts would be $125,000 per fiscal year.

The Railroad Commission expects that the bill's requirements to review unprotested cases would require an annual average of more than 1,000 written administrative determinations with stated findings of fact and legal conclusions.

It is estimated that the Railroad Commission would need 9.0 FTEs to implement the bill's requirements, including 6.0 hearings examiners, 2.0 administrative assistants, and one attorney. FTE-related costs and expedited transcript costs would total $962,952 per fiscal year. This estimate assumes these costs would be paid out of the General Revenue Fund because that is the method of finance used for the agency's pipeline-related programs.

Local Government Impact

No significant fiscal implication to units of local government is anticipated. Local governments could be affected by the bill's requirements when contesting a common carrier status.