SRC-JLB H.B. 1195 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 1195
78R5678 MI-FBy: West, George "Buddy" (Armbrister)
Natural Resources
5/21/2003
Engrossed


DIGEST AND PURPOSE 

Currently, an operator may allow a lease to acquire multiple severance
orders but is required only to pay a single $100 dollar fee to have the
P-4 reinstated once all rule violation issues have been resolved.  If a
lease has been severed by multiple sections of the Oil & Gas Division,
then each of those sections must verify compliance and resolve
cancellation issues.  At times, this verification and resolution also
requires a lease inspection.  As a result, reinstatement fees suggest that
there may be multiple violations and the costs associated with
verification and processing those violations.  Some operators consider the
$100 lease as a routine cost of doing business.  H.B. 1195 prohibits the
Railroad Commission of Texas (RRC) from issuing a new certificate of
compliance until the owner or operator submits to RRC a nonrefundable fee
of $300 for each severance or seal order issued for the lease or well. 

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.  Amends Section 85.167(a), Natural Resources Code, to prohibit
the Railroad Commission of Texas (RRC), if a certificate of compliance for
an oil lease or gas well has been canceled for violation of one or more
RRC rules, from issuing a new certificate of compliance until the owner or
operator submits to RRC a nonrefundable fee of $300 for each severance or
seal order issued for the lease or well, rather than just $100 without
reference to the number of orders. 

SECTION 2.  Effective date:  September 1, 2003.