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.