LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION


March 27, 2023

TO:	Honorable Tracy O. King, Chair, House Committee on Natural Resources

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB2941 by Zwiener (Relating to the authority of the Railroad Commission of Texas to require water pollution abatement plans for certain pipelines; creating a criminal offense; providing for the imposition of a civil penalty.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for HB2941, As Introduced : a negative impact of ($1,932,581) through the biennium ending August 31, 2025.

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:

All Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2024	($1,610,484)
2025	($322,097)
2026	($241,573)
2027	($161,048)
2028	($161,048)

Fiscal Year	Probable (Cost) from General Revenue Fund 1	Probable (Cost) from Water Resource Management 153	Probable (Cost) from Oil & Gas Regulation 5155	Change in Number of State Employees from FY 2023
2024	($1,610,484)	($244,096)	($224,525)	4.0
2025	($322,097)	($224,276)	($171,832)	4.0
2026	($241,573)	($224,276)	($171,832)	4.0
2027	($161,048)	($224,276)	($171,832)	4.0
2028	($161,048)	($224,276)	($171,832)	4.0

The bill would add Section 26.136 to the Texas Water Code relating to Edwards Aquifer protection plans and would amend Section 91 of the Natural Resources Code as it relates to criminal penalties and additional enforcement authority.

The bill would direct the Railroad Commission to require the owner or operator of an oil or gas pipeline under the agency's jurisdiction to submit a water pollution abatement plan (WPAP) to the agency upon constructing or expanding a pipeline into the Edwards Aquafer recharge zone.

The bill would direct the Railroad Commission (RRC) to consult with the Texas Commission on Environmental Quality (TCEQ) in developing certain standards for WPAPs and would allow the RRC to incorporate construction standards adopted for the recharge zone by TCEQ.

The bill would require RRC and TCEQ to develop a process for joint consultation on water pollution abatement activities in the recharge zone and direct the two agencies to enter into a memorandum of understanding to implement this process.

The bill would create an offense if Section 26.136 or any rule, order, or permit issued by the commission to carry out the requirement is violated willfully or with criminal negligence and would expand Railroad Commission's enforcement authority to include this section.

Based on information provided by the Railroad Commission (RRC), this analysis assumes RRC would need two new FTEs, related operating equipment and expenses, one vehicle, and a new online system. The first FTE, a Geoscientist II, would conduct administrative and technical reviews of the submitted water pollution abatement plans (WPAPs) as well as any required supplemental information. The second, an Engineering Specialist II, would inspect the sites during and/or after construction to verify compliance with statute and any rulemaking. Estimated salary, benefit, and payroll contribution expenses for the two positions would total $141,832 per fiscal year from General Revenue-Dedicated Oil and Gas Regulation and Cleanup Account No. 5155 (GR-D 5155). Operating expenses are estimated to total $82,693 in fiscal year 2024, an amount which partially reflects the purchase of a truck, and $30,000 each fiscal year after from GR-D 5155.

Based on information provided by the RRC, General Revenue totaling $1,610,484 in fiscal year 2024 with additional maintenance costs of $322,097 for fiscal year 2025; $241,573 for fiscal year 2026; and $161,048 each subsequent fiscal year would be necessary for the development of an online system to allow operators to submit data for agency staff to review and approve or deny.

Based on information provided by the Texas Commission on Environmental Quality (TCEQ), this analysis assumes TCEQ would also need two FTEs, a vehicle, and related operating equipment and expenses. The first FTE, an Environmental Investigator II, would provide consultation services to the RRC on the application review process, rulemaking, and compliance for oil and gas pipelines. The second, a Geoscientist IV, would provide consultation services to the RRC regarding geologic assessments and encountered features for oil and gas pipelines. The estimated salary, benefit, and payroll contribution expenses for these positions would total $212,600 each fiscal year from General Revenue-Dedicated Water Resource Management Account No. 153. Operating expenses would total $31,496 in fiscal year 2024, an amount which partially reflects the purchase of a vehicle, and $11,676 each fiscal year after from GR-D 153.

Based on information provided by the Office of Court Administration, duties and responsibilities with implementing the provisions of the bill for the state court system could be accomplished using existing resources.

It is assumed that any impact on state correctional populations or on the demand for state correctional resources would not be significant.

General Revenue totaling $1,610,484 in fiscal year 2024 with additional maintenance costs of $322,097 for fiscal year 2025; $241,573 for fiscal year 2026; and $161,048 each subsequent fiscal year would be necessary for RRC to develop an online system to implement the provisions of the bill.

Local Government Impact

It is assumed that any fiscal impact to units of local government associated with enforcement, prosecution, supervision, or confinement would not be significant.