SRC-SLL H.B. 3490 75(R)BILL ANALYSIS


Senate Research CenterH.B. 3490
By: Holzheauser (Bivins)
Natural Resources
4-28-97
Committee Report (Amended)


DIGEST 

Currently, under the Texas Experimental Research and Recovery Activity
(TERRA) program the Railroad Commission (commission) may place
mechanically sound non-polluting wells into TERRA.  Once in TERRA, the
wells will remain inactive until they are either plugged or placed back
into active service by the commission.  Wells in the TERRA program will be
utilized by the commission for use in gathering data, performing
production tests, and developing and testing enhanced or advanced recovery
techniques.  The TERRA program enables mineral interest owners to realize
any commercial potential that may be found in wellbores as technology and
circumstances change.  Any wellbores posing a pollution threat or
determined to be without economic value are properly plugged in accordance
with state law and rules of the commission.  H.B. 1713 would authorize
salvage money earned in well plugging efforts to be transferred on or
after the first of January of each year.    

PURPOSE

As proposed, H.B. 1713 outlines provisions regarding the Texas
Experimental Research and Recovery Activity of the Railroad Commission of
Texas. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 93.004, Natural Resources Code, to delete text
regarding certain amounts of money to be transferred for credit to the
Texas Experimental Research and Recovery Activity (TERRA) of which the
Railroad Commission (commission) is required to send to the comptroller of
public accounts (comptroller) or notify the comptroller of amounts to be
transferred. Authorizes the commission to notify the comptroller to
transfer, for the credit of the TERRA fund, an amount from the oil-field
cleanup fund equal to the total money received by that fund from the sale
of salvaged equipment under Sections 89.085(d) and 91.115(f), less the
total money paid to claimants under Section 89.086 during the previous
fiscal year, on or after January 1, of each year. Prohibits the commission
from using or pledging more than 75 percent of the annual interest earned
on the money in the fund for the purposes described by Subsection (e) if
the TERRA fund balance is less than twice the estimated plugging costs of
all unplugged TERRA wellbores.  Authorizes the commission to use or pledge
TERRA funds only for the purpose described in Subsection (e)(1) if the
TERRA fund balance is less than the total estimated plugging costs of all
TERRA wellbores. Deletes text prohibiting money in the TERRA fund from
being used or pledged for a purpose described by Subsection (d)(2) unless
the unobligated money in the TERRA fund exceeds the total estimated
plugging cost of all unplugged TERRA wellbores.  Makes conforming and
nonsubstantive changes. 

SECTION 2. Amends Section 93.011, Natural Resources Code, by adding
Subsection (i), to authorize a well scheduled for plugging with state
money to be placed in TERRA without a TERRA agreement, but prohibits the
well from being licensed under Subchapter C unless the owners of the
required mineral interest have executed a TERRA agreement under this
section. 

SECTION 3. Amends Section 93.042, Natural Resources Code, to require the
commission, while  a well is in the TERRA program,  to assume all well
plugging duties for the well and, with certain exceptions, all pollution
prevention and control responsibilities.  Requires the commission to
conduct annual inspections and appropriate tests to ensure the continuing
integrity of the wellbore. Requires the commission to keep and retain the
necessary records to prove compliance with this requirement. 

SECTION 4. Effective date: September 1, 1997.

SECTION 5. Emergency clause.


SUMMARY OF COMMITTEE CHANGES

Amendment 1.

Add a new SECTION 3 by amending Section 93.042, Natural Resources Code, to
read as follows: 

The commission, while a well is in the TERRA program, shall assume all
well plugging duties for the well and, with the exception of the
compliance requirements of a valid TERRA license holder, all pollution
prevention and control responsibilities.  The commission shall conduct
annual inspections and appropriate tests to ensure the continuing
integrity of the wellbore.  The commission shall keep and retain the
necessary records to prove compliance with this requirement.