Lawmakers count the cost of oil and gas lawsuits

Questions about the cost of a bill that would quash local government lawsuits against oil and gas companies led to questions Tuesday about how legislative staff go about estimating how much any bill might cost the state.
Senate Bill 359 by Sen. Bob Hensgens, an Abbeville Republican, would establish that state government under a 1978 law has sole authority to issue and enforce permits for oil and gas exploration in the state’s coastal zone. The bill would kill an effort by parish governments to sue oil companies for allegedly violating their permits and damaging coastal wetlands.
State officials still could continue the lawsuits as the primary plaintiffs with jurisdiction over “uses of state concern.” So if the lawsuits continue, would the state incur additional costs? That question brought the bill to the Senate Finance Comm-ittee Tuesday, even though the body’s Natural Resources Committee already has approved it.
Chief Deputy Attorney General Bill Stiles said he didn’t think bringing the lawsuits would lead to additional costs for the state, adding that the office would not have to hire new staff or buy new equipment. But he said sometimes additional costs are not anticipated despite his office’s best efforts.
“I couldn’t tell you that we foresee everything that’s foreseeable when we provide these fiscal notes,” he said, referring to the notes the Legislative Fiscal Office creates for bills that might impact the state’s bottom line.
But the LFO attached a fiscal note stating the state could see “a significant increase of expenditures” if it assumed the costs of any of the 42 ongoing parish lawsuits. That belief was based in part on a public statement by one of the plaintiffs’ attorneys that litigation for two of the cases had cost about $9 million so far.
“That calls into question the fiscal note,” said state Sen. Cameron Henry, a Metairie Republican. “Your base assumption [about the cost] came from the people who don’t like the bill. So for every single note moving forward, that is my concern.”
But Rebecca Robinson, the LFO staffer who prepared the note, said she also consulted with the state Department of Natural Resources, a party to the lawsuits, to determine moving forward could cost the state $100,000 annually at a minimum.
“The future costs of litigating these lawsuits is indeterminable at this time but likely to be significant,” her note says. “Alternatively, there would be no impact should the [Attorney General] or DNR choose not to continue prosecuting any of the ongoing litigation.”
Henry’s comments questioning the accuracy of fiscal notes are reminiscent of statements Rep. Tony Bacala, a Prairieville Republican, made in March.
“It looks like on occasion [state agencies] weaponize the fiscal note in order to impact the outcome of the bill passage,” Bacala said.
Senate Bill 359 was slated for debate by the full Senate Monday but was diverted so Senate Finance could review the fiscal note. The committee on Tuesday advanced the bill back to the full body.
Also on Tuesday, the finance committee approved Senate Concurrent Resolution 65 by Sen. Heather Cloud, R-Turkey Creek. The resolution calls for taking $200 million of the state’s $1.8 billion allocation from the federal CARES Act for COVID-19 relief to provide grants to small businesses affected by the government’s response to the COVID-19 pandemic.
The CARES Act calls for sharing up to 45 percent of the money with local governments. Under her proposal, $100 million would come out of the state’s portion, $100 million from the anticipated local portion; and $25 million split evenly between the state and local share would be reserved for woman- and minority-owned businesses.
As explained by Senate President Page Cortez, her measure would not carry the force of law, but it allows lawmakers to express their opinion on the concept, which could later find its way into an appropriations bill