FISCAL NOTE
Date Requested: February 24, 2021
Time Requested: 01:48 PM |
| Agency: |
Environmental Protection, Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2235 |
Enrolled |
HB2725 |
|
|---|
| CBD Subject: |
Environment |
|---|
|
FUND(S):
Oil and Gas Operating Permit and Processing Fund
Sources of Revenue:
Special Fund
Legislation creates:
Creates New Revenue, Increases Existing Expenses
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.
HB2725 provides funding to the DEP Office of Oil and Gas by requiring well operators to submit an oversight fee of $100 for each well that is not yet plugged. Exemptions to this fee include plugged wells and wells that provide only free gas to the landowner. The Office of Oil and Gas estimate that there are approximately 68,000 wells in WV that would be subject to the oversight fee, bringing in an estimated $6.8 million. It is anticipated that at least one additional employee will be necessary to ensure the proper and accurate processing of invoicing and collections.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2021
Increase/Decrease
(use"-") |
2022
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
62,600 |
58,600 |
| Personal Services |
0 |
53,600 |
53,600 |
| Current Expenses |
0 |
5,000 |
5,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
4,000 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
6,800,000 |
6,800,000 |
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.
Since the oversight fee is to be collected on the first day of July each year, no revenue is expected for FY2021. Beyond FY2021, annual revenue is expected to be approximately $6.8 million as explained above. Expected expenditures will be one employee at $40,000 plus benefits of 34%, computer equipment, and other expenses such as office rent, telephone, and travel. Section 22-6-29(a) of the bill allows for the funds to be moved to the oil and gas reclamation fund. At this time its unknow if how much money may be moved, if needed.
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 W Rogers
Email Address: gary.w.rogers@wv.gov