Honorable J. M. Lozano, Chair, House Committee on Environmental Regulation
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
HB3798 by Biedermann (Relating to the regulation of and permit requirements for certain facilities that extract, produce, or process aggregates and of related facilities by the Texas Commission on Environmental Quality and the Railroad Commission of Texas; providing administrative penalties and other civil remedies; creating criminal offenses.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB3798, As Introduced: a negative impact of ($6,553,668) 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
($3,853,431)
2021
($2,700,237)
2022
($2,707,837)
2023
($2,715,627)
2024
($2,723,607)
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Change in Number of State Employees from FY 2019
2020
($3,853,431)
38.0
2021
($2,700,237)
38.0
2022
($2,707,837)
38.0
2023
($2,715,627)
38.0
2024
($2,723,607)
38.0
Fiscal Analysis
The bill would amend the Natural Resources Code to authorize the Railroad Commission to issue rules and regulations regarding certain extraction operations at aggregate production operations. The bill would provide Railroad Commission with the authority to issue permits, conduct hearings, issue orders and civil or administrative penalties, hire employees or contractors for enforcement purposes, and accept, receive, and administer grants, gifts, and loans for the regulation of aggregate production operations.
The bill would require an aggregate production operation to obtain a reclamation permit from the Railroad Commission in order to qualify for a permit to start extraction activities. The bill would make it an offense to willfully or knowingly violate a condition of a reclamation permit or to make a false statement in connection with a reclamation permit, punishable by a fine not more than $10,000.
The bill would amend the Health and Safety Code to change certain location restrictions for facilities that may emit air contaminants. The Texas Commission on Environmental Quality would be prohibited from issuing a clean air permit to aggregate production operations until the facility obtains permits from each groundwater conservation district in the which the facility will be located and an aggregate production operations permit from the Railroad Commission.
The bill would take effect September 1, 2019.
Methodology
Based on information provided by the Railroad Commission, this analysis estimates the fiscal impact to implement the provisions of the bill would be $6,553,669 for the 2020-21 biennium, and a five year impact of $14,700,741 in General Revenue. Costs include salaries for 38.0 FTEs, other operating costs, travel, capital equipment (i.e. vehicles), consumable supplies (i.e. publications and postage), professional services (i.e. technology), and benefits.
This analysis assumes the agency would create a new department within the Surface Mining Division to regulate aggregate production operations. The Railroad Commission estimates the bill provisions related to permitting aggregate production operations would require one Manager III (1.0 FTEs), eight Engineers III (8.0 FTEs), four Geoscientists III (4.0 FTEs), two Administrative Assistants II (2.0 FTEs), and one Accountant III (1.0 FTEs). Based on LBB analysis, the additional FTEs would have a combined fiscal year cost of $1,006,918 for salaries ($746,252) and related benefits ($260,666).
Related to inspections and enforcement, the Railroad Commission estimates the bill provisions would require fifteen Natural Resource Specialists II (15.0 FTEs). Based on LBB analysis, the additional FTEs would have a combined fiscal year cost of $748,376 for salaries ($554,640) and related benefits ($193,736). Additionally, a one-time cost of $346,500 is estimated to be needed for inspector vehicles. This analysis assumes the Railroad Commission would inspect all applicable aggregate production operations on an annual basis.
Related to hearings and issuing orders and civil or administrative penalties, the Railroad Commission estimated the bill provisions would require two Administrative Law Judges II (2.0 FTEs), two Attorneys III (2.0 FTEs), one Legal Assistant III (1.0 FTEs), one Legal Assistant II (1.0 FTEs), and on Administrative Assistant II (2.0 FTEs). Based on LBB analysis, the additional FTEs would have a combined fiscal year cost of $443,134 for salaries ($328,418) and related benefits ($114,716).
Additionally, it is estimated the Railroad Commission would require funding for travel, other operating expenses, postage and publications, and professional services.
The Office of Court Administration indicated that, although the bill would create two new criminal offenses and although the bill would allow for certain court action, any new case volume driven by the bill could be absorbed by existing resources. Additionally, the Comptroller of Public Accounts indicated the amount of revenue due to fines, costs, or fees associated with the two new criminal offenses cannot be determined. This estimate assumes that duties and responsibilities associated with the remaining provisions of the bill could be accomplished with existing resources.
Technology
There would be a technology impact related to development and enhancement of a permitting system, inspection system, and case management system. Based on LBB analysis, the fiscal impact related to these technology items is estimated to be $671,160 in fiscal year 2020 and $100,674 in subsequent years.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies:
304 Comptroller of Public Accounts, 455 Railroad Commission, 582 Commission on Environmental Quality