Honorable Chris Paddie, Chair, House Committee on Energy Resources
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
HB2920 by Turner, Chris (Relating to the requirement of a public hearing on certain applications for a permit to drill an oil or gas well.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2920, As Introduced: an impact of $0 through the biennium ending August 31, 2021.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2020
$0
2021
$0
2022
$0
2023
$0
2024
$0
Fiscal Year
Probable Savings/(Cost) from Oil & Gas Regulation 5155
Change in Number of State Employees from FY 2019
2020
$486,700
5.0
2021
$455,620
5.0
2022
$456,620
5.0
2023
$457,645
5.0
2024
$458,695
5.0
Fiscal Analysis
The bill would amend the Natural Resources Code to require a public hearing on certain applications for a permit to drill an oil and gas well in the county of the proposed well. The bill would take effect immediately upon a two-thirds vote, or on September 1, 2019.
Based on analysis of the Railroad Commission, the fiscal impact to the agency under the provisions of the bill would be $942,320 for the 2020-2021 biennium, and a five year impact of $2,315,280 in General Revenue-Dedicated Oil and Gas Regulation and Cleanup Account No. 5155. Costs include salaries for 5.0 FTEs, other operating costs, travel, and benefits.
Methodology
Currently, all hearings conducted by the Railroad Commission for oil and gas matters are held in Austin, Texas. Additionally, the commission only holds hearings on applications for permits to drill an oil and gas well that are protested. Under the provisions of the bill, the Railroad Commission would be required to hold public hearings in the county in which the proposed well site is located for all well sites within 1,500 feet of a child-care facility, private school, or primary or secondary school.
According to the Railroad Commission, the number of new hearing under the bill provisions is not known, but is expected to be significant and would likely take place across large portions of the state. The commission estimates the bill provisions would require two Administrative Law Judges II (2.0 FTEs), two Engineering Specialists V (2.0 FTEs), and one Legal Assistant III (1.0 FTEs). Based on LBB analysis, the additional FTEs would have a combined fiscal year cost of $374,605 for salaries ($277,630) and related benefits ($96,975). Additionally, it is estimated the agency would require funding for travel and other operating expenses each fiscal year.
The additional administrative law judge would conduct hearings and adjudicate the claims. The additional engineering specialists would act as the technical examiner of the hearing to provide analysis of the data presented. The legal assistant would manage administrative processing of docket files, mailings, notices, scheduling, and communications with involved parties.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.