LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 6, 1995
TO: Honorable Bill Sims, Chair IN RE: Senate BillNo. 1357
Committee on Natural Resources By: Haywood
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on Senate Bill No.
1357 (Relating to the administrative approval of surface
commingling of oil or gas or oil and gas production.) this office
has determined the following:
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
The bill establishes a procedure for an oil or gas operator to
obtain a surface co-mingling permit by administrative approval
from the Railroad Commission (RRC).
The RRC would be allowed to administratively grant a co-mingling
permit upon application, if the tracts of land or horizons being
co-mingled have the same working interest and royalty ownership
or if each horizon or track is measured separately.
The bill would require an applicant to provide proper
notification to all parties by certified mail if the production
being co-mingled involved different royalty or working interest
ownership. In the event a party could not be reached, an
applicant
would provide evidence that notice had been published for four
consecutive weeks in a generally circulated county newspaper
where the tracts are located. After notification requirements
have been satisfied, the RRC would be able to grant a co-mingling
permit if the applicant provided the RRC with an acceptable
allocation formula to protect correlative rights, and the RRC
received no protests from more than 10 percent working or royalty
interest or combined interest.
The bill would not affect the price or production levels for
natural gas or crude oil, and would thereby create no fiscal
impact at the state or local level.
No fiscal implication to the State or units of local government
is anticipated.
Source: Comptroller of Public Accounts, Railroad Commission
LBB Staff: JK, CT, DF