FISCAL NOTE

Date Requested: January 10, 2020
Time Requested: 01:07 PM
Agency: Environmental Protection, Department of
CBD Number: Version: Bill Number: Resolution Number:
1423 Introduced HB4091
CBD Subject: Energy, Natural Resources


FUND(S):

Oil and Gas Operating Permit and Processing Fund

Sources of Revenue:

Special Fund

Legislation creates:

Creates New Revenue



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
    
    Currently, the DEP Office of Oil and Gas issue approximately 600 permits annually. The ratio of these permits consist of 40 new initial pad permits and 550 additional "extra" pad permits. Additionally, Oil and Gas receive approximately 250 applications annually for permit modifications.
    
    It is estimated that the usage rate of the proposed expediting fee will be requested for approximately 10% of the applications submitted. At this rate, it is estimated that overall revenues will increase approximately $765,000 annually, once fully implemented.
    
    This funding will allow for the plugging of approximately three orphaned wells per year and to cover costs associated with the review, processing, and approval of permits. However, costs are not expected to exceed anticipated revenues.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")
2021
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 30,000 120,000 120,000
Current Expenses 161,250 645,000 645,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 191,250 765,000 765,000


Explanation of above estimates (including long-range effect):


    Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
    
    Current expenses are expected to increase in relation to the funding received. Current expenses will include all necessary costs associated with reviewing, processing, and approving permits. Fifty percent of the funding, as specified in HB4091, will be deposited into the Gas Reclamation Fund, which will be used to plug orphaned wells. Expected revenues will allow for approximately three orphaned wells to be plugged annually.



Memorandum


    Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
    
    
    None



    Person submitting Fiscal Note: Gary Rogers
    Email Address: gary.w.rogers@wv.gov