SRC-SLL S.B. 638 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 638
By: Brown
Natural Resources
2-24-97
As Filed


DIGEST 

Currently, Texas law provides that the duty of a person to plug an
unplugged well that has ceased operation ends if the person's interest in
the well is sold or conveyed under certain circumstances. In certain
circumstances, this has led to the State of Texas having to cover the cost
of plugging a well.  This bill will make an operator responsible for
plugging a well unless the operator transfers the well to an entity
recognized by the Railroad Commission as an entity with sufficient
financial security. 

PURPOSE

As proposed, S.B. 638 makes an operator responsible for 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

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

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 89.002(a), Natural Resources Code, to redefine
"operator" to mean a person who is designated and accepted by the Railroad
Commission (commission) as responsible for the physical operation and
control of a well at the time the well is about to be abandoned or ceases
operation.  Prohibits the term "operator," for the purpose of determining
plugging responsibility, in the event of a sale or conveyance of an
unplugged well that was in compliance with commission rules applicable to
such wells at the time of sale or conveyance, from meaning the person who
sells or conveys the well or right to operate the well, if and only if,
the person who acquires the well or the right to operate the well meets
certain financial criteria. 

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 if and only if the person's interest in the well is sold or
conveyed while the well is in compliance with the rules of the Railroad
Commission 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. Effective date: September 1, 1997.

SECTION 4. Emergency clause.