H.B. 1195 78(R)    BILL ANALYSIS


H.B. 1195
By: West, George "Buddy"
Energy Resources
Committee Report (Unamended)



BACKGROUND AND PURPOSE 
Currently, an operator can 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. It is, therefore, logical that the
reinstatement fees reflect the existence of multiple violations and the
costs associated with verification and processing those violations. 

Too often severed operators consider the $100 lease as routine "cost of
doing business." Raising the reinstatement fee and charging for multiple
severances on the same lease will encourage more timely compliance with
the violation notices that preceded severance imposition and may serve as
a deterrent against recurring violations.  

The current $100 reconnect fee is already directed to the Oil Field
Cleanup Fund account. Monies would continue to be directed to the Oil
Field Cleanup Fund.  

RULEMAKING AUTHORITY
This bill does not expressly delegate any additional rulemaking authority
to state officer, department, agency, or institution.  
    

ANALYSIS
Section 85.167(a), Natural Resources Code, is amended to read as follows:

If a certificate of compliance for an oil and gas well have been canceled
for violation of one or more commission rules, the commission may not
issue a new certificate of compliance until the owner submits to the
commission a non refundable fee of $300 for each severance or seal order
issued for the lease or well. (not $100). 

Section 85.167 (a), Natural Resources Code, is amended to increase the
current fee for reinstatement from $100 to $300.  


EFFECTIVE DATE
This act takes effect September 1, 2003.