SRC-TAG H.B. 942 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 942
78R11318 MI/SMH-FBy: Chisum (Hinojosa)
Natural Resources
5/21/2003
Engrossed


DIGEST AND PURPOSE 

In an effort to reduce the number of orphan oil and gas wells (inactive
wells that will likely have to be plugged by the state) the 77th
Legislature enacted a series of changes, establishing that any company
that conducts operations within the Railroad Commission's jurisdiction
would have to post a bond, letter of credit, or cash deposit as part of
the annual registration with the commission.  If a company fails to
provide the requisite financial assurance it cannot conduct operations.
The purpose of those changes was to provide the state with a source of
funds to clean up pollution or plug abandoned wells if the responsible
operator was unable or unwilling to do so.   H.B. 942 establishes
financial security requirements for certain persons engaged in activities
regulated by the Texas Railroad Commission other than the ownership or
operation of wells. 

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1.  Section 91.109(b), Natural Resources Code, as effective
September 1, 2004, to provide that in addition to the financial security
requirements of Subsection (a) and Section 91.104(b), a person required to
file a bond, letter of credit, or cash deposit under Section 91.103 who is
involved in activities other than the ownership or operation of wells must
file the bond, letter of credit, or cash deposit at the time of filing or
renewing an organization report required by Section 91.142 according to
certain schedules.  Deletes text providing for an amount of $250,000 or a
lesser amount be determined by the Texas Railroad Commission if the person
is able to demonstrate the risk associated with an operation warrants a
lesser amount.  

SECTION 2.  Effective date: September 1, 2004.