Office of House Bill AnalysisH.B. 3348
By: Counts
Energy Resources


The oil and gas industry is plagued with rapidly rising and falling prices.
Price volatility makes it very difficult for the industry to provide needed
job training for field personnel.  Currently, the oil and gas industry has
a shortage of employees, because just a few years ago oil and gas prices
were low which contributed to personnel layoffs.  Also, when oil and gas
prices drop companies are reluctant to invest in research and development
projects.  There is a need for well-financed, ongoing training programs
regarding the oil and gas industry. 

The general public may not be educated about the oil, natural gas, and
pipeline industries.  A successful public education program concerning such
industries will serve the people of the state well and provide
understanding concerning the prices of energy.  House Bill 3348 creates the
Texas Energy Resource Council and the energy resource account. 


It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the comptroller of public accounts in
SECTION 1 (Sections 5.02 and 5.04, Article 441 (47g), V.T.C.S.) of this


House Bill 3348 amends law to establish the Texas Energy Resource Council
(council) to coordinate a program designed to promote environmentally sound
production methods and technologies, support educational activities
regarding the development of energy resources in Texas, support job
training and research activities regarding energy production, educate the
public regarding the importance of the oil, natural gas, and pipeline
industries, and promote exploration, production, and pipeline safety (Sec.

The bill provides that the council is composed of 15 members, five of whom
are executive officers of qualified producer associations or their
designees.  The bill requires the governor to appoint seven members of the
council from lists provided by the producers.  The other three members
shall be appointed as specified by majority vote of the members of the
council (Sec. 2.01).  The bill also requires a vacancy in an appointive
position on the council to be filled for the unexpired portion of the term
in the same manner as the original appointment.  The bill sets forth the
terms of the members of the council (Sec. 2.02 and SECTION 2).   

The bill requires the members of the council to annually elect a presiding
officer of the council,  authorizes the council to elect other officers it
considers necessary, and prohibits a member of the council from receiving
compensation for service performed for the council.  The bill sets forth
provisions regarding reimbursements for actual or necessary expenses
incurred in performing services as a member of the council (Secs. 2.03 and

The bill provides that the energy resource account is an account in the
general revenue fund that consists of gifts and grants, transfers of money
to the account by the legislature, and assessments imposed on  producers of
oil, gas, or condensate (producers) (Sec. 4.01).   

The bill provides that beginning January 1, 2002 an assessment is imposed
on each producer in the amount of four-hundredths of one percent of the
market value of oil, gas, and condensate produced and saved in this state
by the producer.  The bill prohibits a producer from being assessed more
than $150,000 in any year and provides that the assessment is not an
occupation tax but is governed by laws relating to gas and oil production
taxes.  The bill provides that assessments imposed on an affiliate or
subsidiary of a producer are considered to have been imposed on the
producer.  The bill requires a first purchaser or producer as applicable to
include as a separate item in any report required by law any information
relating to the assessment (Sec. 5.01 and SECTION 3).  The bill requires
the comptroller of public accounts (comptroller) to retain a portion of the
assessment collected to cover the costs of collecting and administering the
assessment and by rule specify the portion of the assessment retained.  The
bill requires the comptroller to deposit the remainder of the funds
collected to the credit of the energy resource account (Sec. 5.02).   

The bill provides that the council is responsible for taking appropriate
legal action to collect any assessment that  is not paid to the comptroller
and provides that the comptroller is not responsible for collecting any
assessment not paid to the comptroller.  The bill requires the comptroller
to report to the council any information obtained regarding failure of any
person to properly pay the assessment and to provide to the council any
documentation the comptroller may have of that failure (Sec. 5.03).   

The bill provides that a person is entitled to a refund of an assessment
paid by the person during the preceding state fiscal year if the person
submits an appropriate request for a refund.  The bill sets forth
provisions regarding the notice of the right to request a refund, the
application for a refund, and the determination of validity by the
comptroller.  The bill authorizes the comptroller to adopt rules relating
to assessment refunds (Sec. 5.04).