Brief⁽¹⁾

H.B. 2418 would require any transfer by an operator of responsibility for the operation of a well, gas gathering system, or underground natural storage facility to be reported to the Kansas Corporation Commission in accordance with rules and regulations.

Background

H.B. 2418 was supported by Bill Wix, the Assistant General Counsel of the Conservation Division, Kansas Corporation Commission. Mr. Wix explained that there currently is a regulation pertaining to the filing of transfers but no explicit statutory authority requiring operators to register a transfer of leases with the Commission. According to Mr. Wix, this bill is considered a means of better realizing the intent of legislation enacted in 1996 to establish financial responsibility requirements for oil and gas operators.

Mr. Wix indicated that the Commission's ability to properly compute the amount owed by operators for licensing renewals is predicated upon monitoring the number of all leases and the number of wells on each lease and the depth of each well. He added that such a requirement also will assist the Commission in determining responsible parties for wells with respect to plugging liability.

Don Schnacke, a spokesperson for the Kansas Independent Oil and Gas Association, submitted written testimony in support of the bill.

The Division of the Budget's fiscal note indicated that passage of the bill would have no fiscal impact on any state agency or other units of government. The transfer is required by existing regulation and the agency has existing positions capable of processing those transfers.

The Senate Committee on Energy and Natural Resources amended the bill to correct dates in the bill.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext-bill.html.