The Texas Sunset Advisory Commission has released findings from its separate audits of the Railroad Commission of Texas (RRC) and the Texas Commission on Environmental Quality (TCEQ). While each agency was recommended for another 12-year lease on life, changes are in order, the reviews found.

For one, the RRC should be renamed the Texas Oil and Gas Commission and it should be governed by a part-time appointed board, not three elected commissioners as is the case currently the review found.

The commission also said the RRC's oil and gas program should be self-supporting through charges for permits, licenses, certificates or reports. Currently, the RRC's $52.5 million budget for fiscal 2011 is funded in part by $23.4 million in general state revenue.

"As the oil and gas industry continues to affect significantly populated areas of the state, the [RRC] needs an enforcement process that leaves little room for the public to question the agency's appropriate and consistent handling of identified violations," the Sunset Advisory Commission report said. "A more detailed enforcement process would help deter violations and make oil and gas regulations more effective."

To that end the commission recommended that the RRC formally adopt its penalty guidelines in rule and transfer enforcement hearings to the State Office of Administrative Hearings (SOAH), among other reforms.

The RRC should stop its propane marketing efforts as they are redundant to other programs and raise cost for consumers, the commission also said.

However, the RRC's pipeline damage prevention program should be expanded to include interstate as well as intrastate pipelines, the report said. But regulation of natural gas utilities should be transferred from the RRC to the Texas Public Utility Commission, and the SOAH should handle contested gas utility cases.

If the Sunset Advisory Commission's first recommendation for the TCEQ is followed, it would mean new authority for the RRC. The commission said authority for groundwater protection recommendations related to oil and gas activities should move from TCEQ to the RRC.

The review of TCEQ found that its "public assistance functions occur among several different agency programs with overlapping duties and without specific statutory direction, contributing to a lack of focus and prioritization." The TCEQ's Office of Public Interest Council should be charged strictly with representing the public interest and should not be "providing assistance to individual members of the public [which] dilutes its primary duty to represent the public in proceedings before the" TCEQ, the review found.

The review also found TCEQ's standard for evaluating regulated entities' compliance history to be too rigid. Among the recommendations is one for the statutory components of compliance tracking to be expanded "to allow TCEQ to consider other factors in evaluating compliance history."

The review called for more clarity in how TCEQ assesses penalties and said TCEQ should be required "to structure its general enforcement policy in rule and publicly adopt its resulting enforcement policies."

Ultimately, state lawmakers have the final say on whether the agencies merit continuation for another 12 years. The 82nd session of the Texas Legislature begins Jan. 11.

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