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


Senate Research CenterC.S.S.B. 638
By: Brown
Natural Resources
2-26-97
Committee Report (Substituted)


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, C.S.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)(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.  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 at the time of sale or conveyance
and the person who acquires the well or the right to operate the well
meets certain 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 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. Emergency clause.
  Effective date: upon passage.

SUMMARY OF COMMITTEE CHANGES

Amends SECTION 1, Section 89.002(a)(2), Natural Resources Code, to
redefine "operator" as a person who assumes responsibility for certain
wells by filing a form with the Railroad Commission (RRC) that RRC
approves and that a person ceases to be the operator of the well when
certain criteria are met. 

Amends SECTION 2, Section 89.011(b), Natural Resources Code, to make
nonsubstantive changes. 

Amends SECTION 3, to  include the emergency clause and change the
effective date from September 1, 1997, to upon passage. 
 
Deletes SECTION 4 and moves the emergency clause to SECTION 3.