BILL ANALYSIS S.B. 1356 By: Haywood (Holzheauser) May 4, 1995 Committee Report (Unamended) BACKGROUND Downhole commingling is a production method used by operators to reduce expenses and increase total recovery from wells. Commingling extends the productive life of wells and leases and results in more taxes and revenue from the property. This practice reduces the economic abandonment of wells due to economic reasons. Current law authorizes the approval of downhole applications after notice has been given to others and a hearing has taken place. This hearing is required for such an application even if there is no opposition to the approval of the application. PURPOSE S.B. 1356 authorizes the Railroad Commission of Texas to permit production by commingling oil or gas, or both, after giving notice and an opportunity for hearing, but without the hearing being mandatory. 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. Amends Section 85.046(b), Natural Resources Code, to authorize the Railroad Commission of Texas to permit production by commingling oil or gas or both after notice and opportunity for hearing, has found that production in a commingled state will prevent waste, promote conservation, or protect correlative rights. SECTION 2. Amends Section 86.012(b), Natural Resources Code, to make a conforming change. SECTION 3. Effective Date: September 1, 1995. SECTION 4. Emergency Clause. SUMMARY OF COMMITTEE ACTION S.B. 1356 was considered by the Energy Resources Committee in a public hearing on May 2, 1995. Elizabeth Bush, representing ARCO Permian and Texas Mid-Continent Oil and Gas Association testified in favor of the bill. No one testified against the bill. The bill was left pending. Later in the same public hearing, S.B. 1356 was laid out on pending business. The bill was reported favorably without amendment, 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 7 ayes, 0 nays, 0 PNV, and 2 absent.