HBA-CBW H.B. 2131 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2131 By: King, Tracy Energy Resources 3/23/2001 Introduced BACKGROUND AND PURPOSE It is estimated that six new wells are illegally abandoned every day in Texas. Furthermore, the number of illegally abandoned gas and oil wells has grown from 21,000 in 1992 to 26,000 in 1999. During the same time period the Railroad Commission of Texas (commission), using the oilfield cleanup fund, plugged 11,091 wells or an average of 1380 wells a year. The commission's projections for wells to be plugged will decrease to 790 in 2002 and 735 in 2003, a significantly lower rate than in the 1990's. The commission has made headway on plugging some of these abandoned wells; however, the problem still persists. House Bill 2131 raises certain fees and amends provisions regarding the bonding of well drillers and operators. 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 2131 amends the Natural Resources Code to increase the oil-field cleanup regulatory fee imposed on crude petroleum produced in this state in the amount of fifteen-sixteenths, rather than fivesixteenths, of one cent on each barrel of 42 standard gallons and impose on gas initially produced and saved in this state in the amount of one-tenth, rather than one-thirtieth, of one cent for each thousand cubic feet. The bill raises the fees for an application for a permit to drill, deepen, plug back, or reenter a well. The bill requires the applicant to submit to the Railroad Commission of Texas (commission) a nonrefundable fee of $400, rather than $100, for an extension of time to plug a well, and removes the provision relating to individual and blanket bonds (Secs. 81.116, 81.117, and 85.2021). The bill deletes provisions which allow certain persons to file alternate forms of financial security in order to satisfy security requirements. The bill removes provisions that allow a person to file an annual nonrefundable fee to the commission (Secs. 89.002, 91.103, and 91.104). The bill sets forth provisions regarding the duties of an operator while plugging a well, including the requirement that a mechanical integrity test be performed on wells located in fresh water zones (Sec. 89.011). The bill provides that a person who operates one or more wells may file a bond in an amount equal to $3, rather than $2, for each foot of well depth for each well (Sec. 91.1041). The bill prohibits a person from knowingly or negligently failing to ascertain whether or not an application, report, or other document is false or untrue (Sec. 91.143). The bill repeals provisions relating to the establishment of a new bond or alternate form of financial security (Sec. 91.107). EFFECTIVE DATE September 1, 2001.