SB 0566 - Fiscal Note

Fiscal Note - SB 0566 - Increases penalties for violations of utility laws

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 2489-01

BILL NO. Perfected SB 566

SUBJECT: Public Service Commission: Utilities

TYPE: Original

DATE: April 22, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None
Total Estimated Net Effect on All State Funds	$0	$0	$0

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 3 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials of the Department of Economic Development, Public Service Commission and the Department of Natural Resources assume this proposal would have no fiscal impact on their agencies.

The Department of Economic Development, Office of Public Counsel did not respond to our fiscal impact request. However, in a similar proposal from a prior session, they indicated there would be no fiscal impact on their agency.

Oversight assumes if a municipality is found to be in violation, a penalty would result and there would be a fiscal impact to the extent of the penalty amount cited in the proposed legislation.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
	0	0	0
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
	0	0	0
FISCAL IMPACT - Small Business

This proposal could have a fiscal impact for those small natural gas utility companies to the extent that they would be subject to increased civil penalties for violations of certain Commission regulations. If a complaint is filed against a small utility business for violations of those regulations, they may be subject to increased penalty amounts for each violation ($10,000 instead of $2,000).

DESCRIPTION

This proposal would revise certain penalties for violations by regulated utilities. It would increase the state penalty for violations of the federal Natural Gas Pipeline Safety Act of 1986 to match the federal penalty whenever required by federal law. The maximum federal penalty for violations of such safety standards is a fine of up to $10,000 per violation, limited to $500,000 per related series of violations.

This legislation is federally mandated to the extent that certain sections of the Natural Gas

Pipeline Safety Act of 1986 as amended mandates that the maximum penalty for violations of federal pipeline safety rules is $25,000. However, the US Department of Transportation currently requires states participating in the Pipeline Safety Grant Aid Program to have a $10,000 minimum penalty for violations. This legislation would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Department of Economic Development

Public Service Commission

Department of Natural Resources

NOT RESPONDING: Department of Economic Development, Office of Public Counsel

Jeanne Jarrett, CPA

Director

April 22, 1998