MBN S.B. 632 75(R)BILL ANALYSIS


ENERGY RESOURCES
S.B. 632
By: Brown (Chisum)
4-22-97
Committee Report (Unamended)


BACKGROUND 

Currently, the Railroad Commission has the authority to require
reclamation plant and commercial disposal facility operators (operators),
to ensure that these plants are properly operated and closed, to show
evidence of financial responsibility by submitting a bond or letter of
credit in the amount of $100,000, or a lesser amount if the operator shows
that the lesser amount will be sufficient to properly operate and close
the facility.  However, these bonds and letters of credit have been
difficult, if not impossible, for many of these operators to obtain.  This
bill will provide for the payment of a nonrefundable annual fee in lieu of
a bond or other form of financial security of a person applying for or
acting under a Railroad Commission permit to store, handle, treat,
reclaim, or dispose of oil and gas waste. 

PURPOSE

As proposed, S.B. 632 provides for the payment of a nonrefundable annual
fee in lieu of a bond or other form of financial security of a person
applying for or acting under a Railroad Commission permit to store,
handle, treat, reclaim, or dispose of oil and gas waste. 

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 91.109, Texas Natural Resources Code, to
authorize the Railroad Commission (commission), in lieu of a bond or
another form of financial security, to allow a person to pay to the
commission a nonrefundable annual fee in an amount determined by the
commission not to exceed five percent of the bond that would otherwise be
required. 

SECTION 2. Amends Section 91.1091, Texas Natural Resources Code, to
require the commission, except as provided by Subsection (b), to refund
the proceeds from a bond or other fund of security required by this
subchapter in certain circumstances.  Prohibits the commission from
refunding fees paid to the commission in lieu of a bond under this
subchapter. 

SECTION 3. Amends Section 91.111(c), Texas Natural Resources Code, to
provide that the OilField Cleanup Fund consists, among others, of fees
collected under Section 91.109 of this code. 

SECTION 4. Effective date: September 1, 1997.
  Makes application of this Act prospective.

SECTION 5. Emergency clause.