1-1           By:  Brown                                       S.B. No. 638

 1-2           (In the Senate - Filed February 18, 1997; February 20, 1997,

 1-3     read first time and referred to Committee on Natural Resources;

 1-4     February 27, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 7, Nays 0;

 1-6     February 27, 1997, sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 638                    By:  Brown

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to the responsibility for the plugging of an oil or gas

1-11     well.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Subdivision (2), Subsection (a), Section 89.002,

1-14     Natural Resources Code, is amended to read as follows:

1-15                 (2)  "Operator" means a person who assumes

1-16     responsibility [is responsible] for the physical operation and

1-17     control of a well as shown by a form the person files with the

1-18     commission and the commission approves [at the time the well is

1-19     about to be abandoned or ceases operation].  In [However, in] the

1-20     event of a sale or conveyance of an unplugged well or the right to

1-21     operate an unplugged well, a person ceases being the operator for

1-22     the purpose of Section 89.011 only if the well [that has ceased

1-23     operation, but that] was in compliance with commission rules

1-24     [applicable to such wells that have ceased operation] at the time

1-25     of sale or conveyance and[, the term "operator" for the purpose of

1-26     determining plugging responsibility shall not mean the person who

1-27     sells or conveys the well or right to operate the well, once] the

1-28     person who acquires the well or right to operate the well:

1-29                       (A)  specifically identifies the well as a well

1-30     for which the person [it] assumes plugging responsibility on [such]

1-31     forms [as may be] required and approved by the commission [and such

1-32     filings are approved by the commission];

1-33                       (B)  has a commission-approved organization

1-34     report as required by Section 91.142 of this code;

1-35                       (C)  has a commission-approved bond or other form

1-36     of financial security under Sections 91.103-91.107 covering the

1-37     well [or is eligible for a nonrefundable annual fee of $100 as

1-38     provided by Sections 91.104(b)(1)-(3) and Section 91.107 of this

1-39     code]; and

1-40                       (D)  places the well in compliance with

1-41     commission rules.

1-42           SECTION 2.  Subsection (b), Section 89.011, Natural Resources

1-43     Code, is amended to read as follows:

1-44           (b)  The duty of a person to plug an unplugged well that has

1-45     ceased operation ends only if the person's interest in the well is

1-46     sold or conveyed while the well is in compliance with rules of the

1-47     commission applicable to wells that have ceased operation and the

1-48     provisions of Sections 89.002(a)(2)(A)-(D) [of this code] have been

1-49     met.  The person acquiring the seller's interest through such a

1-50     sale or conveyance succeeds the seller as the operator of the well

1-51     for the purpose of plugging responsibility only if [once] the

1-52     provisions of Sections 89.002(a)(2)(A)-(D) [of this code] have been

1-53     met.

1-54           SECTION 3.  The importance of this legislation and the

1-55     crowded condition of the calendars in both houses create an

1-56     emergency and an imperative public necessity that the

1-57     constitutional rule requiring bills to be read on three several

1-58     days in each house be suspended, and this rule is hereby suspended,

1-59     and that this Act take effect and be in force from and after its

1-60     passage, and it is so enacted.

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