By Bivins                                              S.B. No. 781
       74R6936 MI-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the determination of reservoir market demand for
    1-3  natural gas.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Sections 86.085 and 86.086, Natural Resources
    1-6  Code, are amended to read as follows:
    1-7        Sec. 86.085.  Determination of Demand and Volume.  Except as
    1-8  provided by Section 86.0865, on <On> or before the 25th day of each
    1-9  month, the commission<, after notice and hearing,> shall determine:
   1-10              (1)  the lawful market demand for gas to be produced
   1-11  from each reservoir during the following month; and
   1-12              (2)  the volume of gas that can be produced without
   1-13  waste from the reservoir and each well in the reservoir during the
   1-14  following month.
   1-15        Sec. 86.086.  Monthly Reservoir Allowable.  Except as
   1-16  provided by Section 86.0865, after <After> determining demand and
   1-17  volume of production as provided in Section 86.085 of this code,
   1-18  the commission shall fix the monthly reservoir allowable of gas to
   1-19  be produced from the reservoir at the lawful market demand for the
   1-20  gas or at the volume that can be produced from the reservoir
   1-21  without waste, whichever is the smaller quantity.
   1-22        SECTION 2.  Subchapter D, Chapter 86, Natural Resources Code,
   1-23  is amended by adding Sections 86.0865 and 86.098 to read as
   1-24  follows:
    2-1        Sec. 86.0865.  OPTIONAL MONTHLY RESERVOIR ALLOWABLE
    2-2  DETERMINATION.  (a)  The commission may elect to determine monthly
    2-3  reservoir allowables as provided by this section.
    2-4        (b)  If the commission elects to proceed under this section
    2-5  on or before the 25th day of the preceding month, the commission
    2-6  shall:
    2-7              (1)  determine the lawful market demand for gas to be
    2-8  produced from all wells in all gas reservoirs during the following
    2-9  month; and
   2-10              (2)  fix the monthly reservoir allowable of gas to be
   2-11  produced from each reservoir by allocating the demand determined
   2-12  under Subdivision (1) to each reservoir on a reasonable basis.
   2-13        (c)  If the commission elects to proceed under this section,
   2-14  the reservoir allowable for each gas reservoir shall be determined
   2-15  under this section whether or not the open flow or daily potential
   2-16  capacity of the reservoir's wells exceeds the reasonable market
   2-17  demand as provided by Section 86.083.
   2-18        Sec. 86.098.  HEARING TO REVIEW COMMISSION DETERMINATION OF
   2-19  MARKET DEMAND AND RESERVOIR ALLOWABLE.  (a)  A person affected by a
   2-20  commission determination under Section 86.085, 86.086, or 86.0865
   2-21  may request a hearing before the commission to review the
   2-22  commission's determination.
   2-23        (b)  The hearing is limited to the reservoir the
   2-24  determination for which affects the person requesting the hearing.
   2-25        (c)  If the commission issues a final order changing the
   2-26  determination of the reservoir allowable, the well allowables for
   2-27  the applicable month shall be recalculated.
    3-1        SECTION 3.  This Act takes effect September 1, 1995.
    3-2        SECTION 4.  The importance of this legislation and the
    3-3  crowded condition of the calendars in both houses create an
    3-4  emergency and an imperative public necessity that the
    3-5  constitutional rule requiring bills to be read on three several
    3-6  days in each house be suspended, and this rule is hereby suspended.