HBA-SEP, JLV H.B. 1317 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1317 By: Farabee Energy Resources 3/23/2001 Introduced BACKGROUND AND PURPOSE Current law does not require oil well operators to plug inactive or abandoned oil wells, and the Texas Railroad Commission (commission) is limited in its ability to plug abandoned wells and clean oil field sites. Because state law may not effectively obtain the assurance of oil well operators that the operators will plug their wells, Texas may be liable for resulting pollution and abandoned wells. House Bill 1317 requires oil well operators to file bonds at the time of filing or renewing an organization report with the commission. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 1317 amends the Natural Resources Code to provide that a person required to file a bond or alternative form of financial security (bond) who is an inactive operator or oil well operator must file the bond at the time of filing or renewing an organization report required by the Railroad Commission of Texas (commission). The bond must be in an amount equal to the lesser of $250,000 or $25,000 for the first five wells a person operates, and $5,000 for each additional well. A person required to file a bond who operates one or more bay or offshore wells must file the bond at the time of filing or renewing an organization report. The bond filed upon renewing an organization report must be in an amount equal to $60,000 for each bay well in certain areas or $250,000 for each offshore well that is subject to the jurisdiction of the commission if the surface location is on state land in or on the Gulf of Mexico and not within certain areas. The bill eliminates provisions relating to types of financial security requirements, annual fees, and application fees. The bill provides that a person required to file a bond who is involved in activities other than the operation of wells must file the bond at the time of filing or renewing an organization report. The bond must be in an amount equal to $250,000 or a lesser amount determined by the commission if the person requests a hearing and is able to demonstrate that the risk associated with an operation or group of operations warrants a lesser amount. The bill eliminates provisions relating to disposal site bonds. EFFECTIVE DATE September 1, 2001.