SRC-JFA C.S.S.B. 639 75(R)BILL ANALYSIS Senate Research CenterC.S.S.B. 639 By: Brown Natural Resources 3-2-97 Committee Report (Substituted) DIGEST Currently, Section 91.114, Natural Resources Code, relates to filing of a permit application or certificate of compliance and revocation of such items by the Railroad Commission (RRC). This section is not flexible and is not effective against violators. This bill amends that section to prohibit RRC from accepting an organization report required to be filed under Section 91.142, an application for a permit under certain chapters of the Natural Resources and Water Codes, or an application for a certificate of compliance if the organization has violated a statute or RRC rule, order, license, certificate, or permit that relates to safety or the prevention or control of pollution. The bill provides that RRC can revoke such items for the same reason. The bill provides limited exceptions relating to a prohibition or a revocation of a permit or organization report, respectively. Additionally, this bill amends Section 91.142, Natural Resources Code, to clarify that a valid and annual organization report is a prerequisite to performing activities within the oil and gas jurisdiction of RRC. PURPOSE As proposed, C.S.S.B. 639 amends Section 91.114, Natural Resources Code, relating to acceptance or revocation by the Railroad Commission (RRC) of organization reports or applications for permits or certificates of compliance. Additionally, this bill provides that an annual organization report is a prerequisite to performing activities within the oil and gas jurisdiction of RRC. 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 91.114, Natural Resources Code, as follows: Sec. 91.114. New heading: ACCEPTANCE OF ORGANIZATION REPORT OR APPLICATION FOR PERMIT OR CERTIFICATE OF COMPLIANCE; REVOCATION. (a) Prohibits, except as provided by Subsection (d), the Railroad Commission (RRC) from accepting, among other items, an organization report required under Section 91.142, or an application for a certificate of compliance under Section 85.161 if the organization that submitted the report or application violated a statute or RRC rule, order, license, certificate, or permit that relates to safety or the prevention or control of pollution; or a person who holds a position of ownership or control in the organization held a position of ownership or control in another organization that, during that person's period of ownership or control, had violated a statute, among other items, during the preceding five years of the date on the application. Makes conforming and nonsubstantive changes. (b) Provides that an organization has committed a violation if, among two options, a final judgment or final administrative order finding the violation has been entered against the organization and all appeals have been exhausted. (c) Provides that, regardless of whether the person's name appears or is required to appear on the organization report required by Section 91.142, a person holds a position of ownership or control in an organization if, among other options, the person is the owner of at least, rather than more than, 25 percent of the beneficial, rather than ownership, interest in the organization; or the person has been determined by a final judgment or final administrative order to have exerted actual control of the organization. Makes conforming changes. (d) Requires RRC to accept the report or application if, among other conditions, all administrative, civil, and criminal penalties relating to those conditions are paid or are being paid in accordance with a payment schedule to which RRC and the organization have agreed. (e) Requires RRC to provide the organization with a written statement explaining why the report or application was rejected. (f) Authorizes RRC to issue a permit to an organization described by Subsection (a) if the permit is necessary to remedy a violation of law or RRC rules. (g) Provides that a fee tendered in connection with a report or application that is rejected is nonrefundable. (h) Authorizes RRC, if RRC may not accept an organization's organization report or application under Subsection (a), to revoke the organization's organization report filed under Section 91.142; a permit issued to the organization under certain chapters of the Natural Resources and Water Codes; or a certificate of compliance issued to the organization under Section 85.161. Makes conforming changes. (i) Requires an order under Subsection (h) to provide the organization a reasonable period of time to comply with the judgment or order finding the violation before the revocation takes effect. Makes conforming changes. (j) Prohibits an organization, on revocation of its organization report, from performing any activities under the jurisdiction of RRC under this title or certain chapters of the Water Code, except as necessary to remedy a violation of law or RRC rules. (k)-(l) Makes conforming changes. SECTION 2. Amends Section 91.142, Natural Resources Code, by adding Subsections (e) and (f), to require RRC to require an entity described by Subsection (a) to refile an organization report annually according to a schedule established by RRC. Provides that if such an entity does not maintain on file an organization report and financial security as required by this chapter, the entity is prohibited from performing operations under the jurisdiction of RRC except as necessary to remedy a violation of law or RRC rules; and RRC, without prior notice, is authorized to suspend a permit held by the entity, or a certificate of compliance issued to the entity under Chapter 85. SECTION 3. Effective date: September 1, 1997. SECTION 4. Emergency clause. SUMMARY OF COMMITTEE CHANGES Revises the proposed relating clause. Amends SECTION 1, Section 91.114, Natural Resources Code, to revise proposed changes to that section relating to the acceptance or revocation by RRC of organization reports or applications for permits or certificates of compliance. The original proposed bill completely rewrote Section 91.114; this revised bill amends that section to achieve substantially the same goal as the original bill. Amends SECTION 2, Section 91.142, Natural Resources Code, to revise the added proposed provision, relating to the need of an organization to annually refile an organization report with RRC.