HBA-JEK, NRS H.B. 1047 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1047
By: Cook
Civil Practices
2/25/2001
Introduced



BACKGROUND AND PURPOSE 

The San Miguel Electric Cooperative (cooperative) operates a
lignite-burning electricity plant in Jourdanton, Texas.  The cooperative
has a contract with a large mining contractor to provide lignite from a
surface mine for use in the generating plant.  In accordance with current
law, the two entities have an agreement whereby the mining company
indemnifies the cooperative for accidents and injuries at the surface mine.

Though current law regarding indemnity in certain mineral agreements was
originally created to protect small contractors in the oil and gas
industry, the San Miguel Electric Cooperative is a smaller operator than
the lignite miner.  House Bill 1047 exempts an electric cooperative
corporation from the provisions regarding indemnity in certain mineral
agreements. 

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 1047 amends the Civil Practice and Remedies Code to provide that
indemnity provisions in certain mineral agreements do not affect the right
of an electric cooperative corporation that owns or leases real property to
mine lignite using open pit surface mining methods to secure indemnity from
a lessee, operator, contractor, or other person who performs services for
or provides materials or products to the corporation that relate to lignite
mining. 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.