79R6607 RMB-F

By:  Crownover                                                    H.B. No. 2055



A BILL TO BE ENTITLED

AN ACT

relating to the regulation of oil production by the Railroad 
Commission of Texas.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 85.043, Natural Resources Code, is 
amended to read as follows:
	Sec. 85.043.  APPLICATION OF CERTAIN RULES AND ORDERS.  If 
the commission requires a showing that refined products were 
manufactured from oil legally produced, the requirement shall be of 
uniform application throughout the state; provided that, if the 
rule or order is promulgated for the purpose of controlling a 
condition in any local area or preventing a violation in any local 
area, then on the complaint of a person that the same or similar 
conditions exist in some other local area and the promulgation and 
enforcement of the rule could be beneficially applied to that 
additional area, the commission may [shall] determine whether or 
not those conditions do exist, and if it is shown that they do, the 
rule or order may [shall] be enlarged to include the additional 
area.
	SECTION 2.  Section 85.053(a), Natural Resources Code, is 
amended to read as follows:
	(a)  If a rule or order of the commission limits or fixes in a 
pool or portion of a pool the production of oil, or the production 
of gas from wells producing gas only, the commission may [shall] 
distribute, prorate, or otherwise apportion or allocate the 
allowable production among the various producers on a reasonable 
basis.
	SECTION 3.  Sections 85.054(a) and (c), Natural Resources 
Code, are amended to read as follows:
	(a)  To prevent unreasonable discrimination in favor of one 
pool as against another, and on written complaint and proof of such 
discrimination or if the commission on its own initiative finds 
such an action to be necessary, the commission may allocate or 
apportion the allowable production of oil on a fair and reasonable 
basis among the various pools in the state.
	(c)  The commission may [shall] determine the reasonable 
market demand of the respective pool as the basis for determining 
the allotments to be assigned to the respective pool so that 
discrimination may be prevented.
	SECTION 4.  Sections 85.055(a) and (c), Natural Resources 
Code, are amended to read as follows:
	(a)  If full production from wells producing gas only from a 
common source of supply of gas in this state is in excess of the 
reasonable market demand, the commission may [shall] inquire into 
the production and reasonable market demand for the gas and shall 
determine the allowable production from the common source of 
supply.
	(c)  The commission may [shall] allocate, distribute, or 
apportion the allowable production from the common source of supply 
among the various producers on a reasonable basis and shall limit 
the production of each producer to the amount allocated or 
apportioned to the producer.
	SECTION 5.  Section 85.058, Natural Resources Code, is 
amended to read as follows:
	Sec. 85.058.  COMMISSION INQUIRY AND DETERMINATION.  From 
time to time, the commission may [shall] inquire into the 
production, storage, transportation, refining, reclaiming, 
treating, marketing, and processing of oil and gas, and the 
reasonable market demand for oil and gas, so that it may determine 
whether or not waste exists or is imminent or whether the oil and 
gas conservation laws of this state or the rules and orders of the 
commission promulgated under those laws are being violated.
	SECTION 6.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2005.