BILL ANALYSIS



H.B. 1407
By: HOLZHEAUSER
02-26-95
Committee Report (Amended)


BACKGROUND

Current law prohibits the Commission from accepting only
applications for drilling permits if an operator is in non-compliance with Commission orders, rules, or permits relating to
safety or pollution.  Current law does not prohibit a non-compliant
operator from taking over a new well after it has been drilled.

PURPOSE

This legislation expands and tightens the compliance incentives
enacted for drilling permits in the 91st Legislative Session.  

This legislation amends the Natural Resources Code to prohibit a
person who has not complied with Railroad Commission enforcement
orders from obtaining injection or disposal well permits, oil and
gas waste storage, disposal or hauling permits or certificates of
compliance from the Commission.  The bill also gives the Commission
discretionary authority, with guidelines, to revoke permits, a
certificate of compliance or an operator's organization report if
the operator has outstanding violations.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Changes Section 91.110, Natural Resources Code, to
           91.114 (currently two 91.110 sections exist) and amends
           the Section as follows:

               Subsection (a) provides that the commission may not
               accept applications for permits under Chapters 85
               or 91, Natural Resources Code, or under Chapters
               26, 27, or 29, Water Code, or issue a certificate
               of compliance under Chapter 85.161 if certain
               persons named in Subdivision (a)(1) hold an
               specified interest in organizations that have
               violated a rule, order, license, permit, or
               certificate that relates to safety or pollution as
               provided in Subdivision (a)(2) and the violation
               has not been corrected in compliance with
               Subsection (d).

               Subsection (e) is added and provides that the
               commission may revoke a permit named in Subsection
               (a), a certificate of compliance, or an
               organization report, if the holder is not in
               compliance with the conditions set out in
               Subdivisions (a)(1) and (2) of the Act.  The
               Subsection requires that the commission order
               entered in a revocation proceeding provide a
               reasonable period of time to comply with the order
               before revocation is effective.

               Subsection (f) is added and provides that the
               commission may not revoke a permit, certificate of
               compliance or organization report if the holder has
               fulfilled the conditions in Subsection (d) of the
               Act.    

               Subsection (g) is added and provides that the
               commission in a revocation proceeding must consider
               the person's history of previous violations, the
               seriousness of previous violations, any hazard to
               the health or safety of the public, and the
               demonstrated good faith of the holder of the
               permit, certificate or report.

SECTION 2. Effective Date: September 1, 1995.

SECTION 4. Emergency Clause.


EXPLANATION OF AMENDMENTS

Committee amendment No. 1 applies Section 85.161, Natural Resources
Code, to this bill rather than the incorrect citing of "Chapter"
85.161. Amendment No. 1 also allows non-complying organizations to
obtain permits from the Railroad Commission if they are on schedule
to correct conditions causing them to be out of compliance.


SUMMARY OF COMMITTEE ACTION

H.B. 1407 was considered by the Energy Resources Committee in a
public hearing on March 6, 1995. The committee considered one
amendment to the bill. The amendment was adopted. The following
witnesses testified in favor of the bill:
     Lindsey Dingmore, representing T.I.P.R.O.; and,
     Rob Looney, representing the Texas Mid-Continent Oil and Gas
Association.

Brenda Loudermilk of the Railroad Commission of Texas testified
neutrally on the bill. No one testified against the bill.

The bill was reported favorably as amended, with the recommendation
that it do pass and be printed and be sent to the Committee on
Local and Consent Calendars, by a record vote of 
8 ayes, 0 nays, 0 PNV, and 1 absent.