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, on-going 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 fund. 


It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Energy Resource Council in
ARTICLE 4 (Section 4.03, Article 4133 (47g), V.T.C.S.) of this bill. 


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, to support educational activities
regarding the development of energy resources in the State of Texas, to
support job training and research activities regarding energy production,
to educate the public regarding the importance of the oil, natural gas, and
pipeline industries, and to promote exploration, production, and pipeline
safety. The bill provides that the council is composed of nine members and
requires the governor to appoint the members of the council from lists
provided by qualified producer associations.  The bill provides that
members serve for staggered terms of three years  with the terms of three
members expiring on December 31 of each year. 

After September 1, 2001, the bill authorizes the members of the council
appointed by the governor to by majority vote appoint representatives of
royalty owners, the crude oil purchasing industry, and the pipeline

The bill requires these additional members to have full voting rights and
privileges and provides that the additional members will serve three-year
terms and may be removed from the council by majority vote of the members
appointed by the governor. 

The bill requires the members of the council to elect annually 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. 
The bill provides that the energy resource fund (fund) is created as a
special fund in the general revenue fund and consists of gifts, grants, and
funds appropriated by the legislature and the assessments collected under
these provisions.  The bill authorizes money in the fund to be used by the
council, its employees, or agents for the purposes of the Act. The bill
provides that, to fund the purposes and activities of the council, an
assessment is imposed on the production of oil, gas, and condensate
produced  in this state in the amount of one-tenth of one percent of gross
revenues received at the wellhead.  The bill requires the comptroller of
public accounts (comptroller) to retain a portion of the proceeds collected
from the assessment in an amount approximately equal to the amount
necessary to defray the costs of collecting and administering the

The bill provides that the council is responsible for taking appropriate
legal actions to collect any assessment which  is not paid or is not
properly paid and provides that the comptroller is not responsible for
collecting any assessment not remitted to the comptroller for deposit in
the fund.  The bill requires the comptroller to report to the council any
information obtained regarding failure of any person to properly pay the
assessment due, including any documentation it may have of such failure. 

The bill provides that any person subject to the assessment may request a
refund of the assessment paid on production for the preceding calendar
year. The bill requires the council to refund to each person requesting a
refund of the amount of the assessment paid by or on behalf of such person
during the preceding calendar year and provides that refunds will include
interest earned at the rate equal to the average United States Treasury
bill rate of the preceding calendar year as certified by the comptroller.
The bill sets forth provisions regarding the procedures relating to the
request for a refund of the assessment paid.  

September 1, 2001.