The Senate Committee on Natural Resources & Economic Development left Senate Bill 2122 pending after extended questioning about how new permit fees and surcharges would affect the Railroad Commission’s budget and state General Revenue.

Dean Zaffirini explained the bill as a companion to House Bill 3158 and said the Railroad Commission requested it to modernize permitting fees and ensure adequate funding for environmental oversight. “Senate Bill 2122 would strengthen the Commission's ability to oversee environmental permitting and compliance while ensuring a more efficient customer focused permitting process,” she said.

Paul DuBois, assistant director of technical permitting at the Railroad Commission, testified as a resource witness that the agency does not currently collect application fees for reclaiming, recycling, treating, or land disposal of oil and gas waste and that the Environmental Permitting and Support Unit’s workload has grown. DuBois described the historical move in 2011 to make the commission more fee-based and explained the commission’s surcharge rule (150% in one unit) used to generate revenue for its oil and gas regulation and cleanup fund.

Committee members repeatedly pressed how any new fee revenue would be accounted for and whether it would simply increase general revenue dedicated balances rather than reduce general revenue appropriations. Mark Wiles and James O’Connor of the Legislative Budget Board told the committee that offsetting general revenue could be done by a contingency revenue rider during the budget process, but that it is a policy choice for the legislature. “If it was an intent or an interest or decision that the legislature wanted to make, that's how it could happen,” an LBB representative said.

The fiscal estimate discrepancy also drew scrutiny. The author referenced an earlier expectation of roughly $487,000 annually, while the fiscal note reflected $1,217,500; DuBois acknowledged omitting the surcharge when first estimating revenues and said adding the surcharge accounts for the larger figure.

Given open questions about how fee receipts would be returned as offsets to general revenue and how surcharges would be used consistently across programs, the committee left the bill pending and did not take public testimony.

Ending: Committee left SB 2122 pending for further fiscal review and possible contingent budget adjustments; staff from the Railroad Commission and LBB were asked to remain available for follow-up questions.