BILL ANALYSIS S.B. 1551 By: Haywood (Williamson) May 9, 1995 Committee Report (Unamended) BACKGROUND Gas and oil production within the Boonesville area of Wise County results from many small, individual producing zones, or lenses, throughout the area. Disputes in the late 1970s and early 1980s concerning the development of the Boonesville area resulted in the severe restriction of the authority of the Railroad Commission of Texas to regulate the area; consequently, Boonesville is the only area of the state where gas and oil production is regulated by statute rather than the Railroad Commission. PURPOSE S.B. 1551 repeals certain provisions of the Natural Resources Code that limit the Railroad Commission's authority to regulate production of oil and gas from multiple stratigraphic oil and gas reservoirs. 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 85.053(b), Natural Resources Code, to allow the Railroad Commission of Texas to distribute, prorate, apportion, or allocate the production of oil or gas from pools of certain commingled separate accumulations of oil or gas, or both. Deletes Subdivision (i) which prohibits these activities for separate accumulations discovered between Jan. 1, 1940, and June 1, 1945, if the effect would be to expand, add to, or extend the vertical or areal extent of any single pool. Deletes Subdivision (iv) which prohibits any gas well in any field under former Subdivision (i) from being assigned an allowable in excess of its production during the last production period reported to the commission. Renumbers remaining Subdivisions accordingly. SECTION 2. Amends Section 85.055(d), Natural Resources Code, to make conforming changes. SECTION 3. Amends Section 86.081(b), Natural Resources Code, to make conforming changes. SECTION 4. Emergency Clause. Effective Date: upon passage. SUMMARY OF COMMITTEE ACTION S.B. 1551 was considered by the Energy Resources Committee in a public hearing on May 8, 1995. The following witnesses testified in favor of the bill: Bob Stout, representing Mitchell Energy and Development Corporation; Brian Sullivan, also representing Mitchell Energy Corporation; Joe McClendon, representing Lone Star Gas Company; and, Lindsey Dingmore, representing Texas Independent Producers and Royalty Owners Association. 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.