HBA-NMO H.B. 3004 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3004 By: Lewis, Ron Energy Resources 3/21/99 Introduced BACKGROUND AND PURPOSE Current law requires the Railroad Commission of Texas (commission) to give at least 30 days notice to a well operator prior to entering into a contract to plug a delinquent inactive well. If the well operator does not request a hearing by the 10th day after receipt of the notice, the commission is authorized to plug the well. The lien securing the plugging costs incurred by the commission attaches to the well-site equipment on the date the well is required to be plugged; however, the commission may not foreclose on the lien until it enters into a contract to plug the well. This legal structure creates an opportunity for well operators to enter into third-party agreements for the stripping of well-site equipment. H.B. 3004 provides that the lien attaches to the well-site equipment upon notice. 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. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 89.043(c), Natural Resources Code, to require the notice, sent at least 30 days before the date the Railroad Commission of Texas (commission) enters into a contract to plug a delinquent inactive well, directing a well operator to plug the well, to state that the commission has a lien on all well-site equipment under Section 89.083 (First Lien on Equipment; Cause of Action if Commission Plugs), Natural Resources Code. Makes conforming and nonsubstantive changes. SECTION 2. Amends Section 89.043(c), Natural Resources Code, to provide that the lien is extinguished as to any item of well-site equipment that is lawfully removed by any person other than the operator or a nonoperator under to a lien, lease, judgment, written contract or security agreement before the commission sends notice under Section 89.043(c), rather than before the commission enters into a plugging contract. Prohibits a person from removing, rather than prohibiting the removal of, certain equipment from an inactive well. SECTION 3.Emergency clause. Effective date: upon passage.