MBN C.S.S.B. 638 75(R)    BILL ANALYSIS


ENERGY RESOURCES
C.S.S.B. 638
By: Brown (Turner, Bob)
4-17-97
Committee Report (Substituted)



BACKGROUND 

Currently, Texas law provides that the duty of a person to plug a well
that has ceased operation ends if the person's interest in the well is
sold or conveyed under certain circumstances.  This has led to the State
of Texas having to pay the cost of plugging some wells. 

PURPOSE

The purpose of this legislation is to make an operator responsible for the
cost of plugging a well unless the operator transfers the well to an
entity recognized by the Railroad Commission as an entity with sufficient
financial security.    

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 89.002(a) (2), Natural Resources Code, to
redefine "operator" to mean a person who assumes responsibility for the
physical operation and control of a well as shown by a form the person
files with the Railroad Commission (commission) and the commission
approves.  States that the commission may not require a person to assume
responsibility for a well as a condition to being permitted to assume
responsibility for another well.  Provides that, in the event of a sale or
conveyance of an unplugged well or the right to operate an unplugged well,
a person ceases being the operator for the purpose of Section 89.011 only
if the well was in compliance with the commission rules relating to safety
or pollution prevention or control at the time of sale or conveyance and
the person who acquired the well or the right to operate the well: 
 (A)  assumes responsibility for the well on forms required and approved
by the    commission; 
 (B)  has a commission-approved organization report as required by Section
91.142; 
 (C)  has a commission-approved bond or other form of financial security
under Sections  91.103-91.107 covering the well; and 
 (D)  places the well in compliance with commission rules.

SECTION 2.  Amends Section 89.011(b), Natural Resources Code, to provide
that the duty of a person to plug an unplugged well that has ceased
operation ends only if the person's interest in the well is sold or
conveyed while the well is in compliance with the rules of the commission
relating to safety or pollution prevention or control applicable to wells
that have ceased operation and the provisions of Sections 89.002(a) (2)
(A)-(D) of this code have been met.  Makes a conforming change. 

SECTION 3.  Emergency Clause.  Effective upon passage.
 



 COMPARISON OF ORIGINAL TO SUBSTITUTE

SECTION 1. Section 89.002 (a)(2), Natural Resources Code. The substitute
adds the requirement that the commission may not require a person to
assume responsibility for a well as a condition to being permitted to
assume responsibility for another well.  The section also clarifies that
unplugged wells, for the purposes of this section, must be in compliance
with commission rules relating to safety or the prevention or control of
pollution.  Makes conforming changes. 

SECTION 2. Section 89.011 (b), Natural Resources Code.  The substitute
clarifies that unplugged wells, for the purposes of this section, must be
in compliance with commission rules relating to safety or the prevention
or control of pollution.  Deletes reference to wells being in compliance
with commission rules applicable to wells that have ceased operation.