By:  Brown                                             S.B. No. 632

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to payment of a nonrefundable annual fee in lieu of a bond

 1-2     or other form of financial security required of a person applying

 1-3     for or acting under a railroad commission permit to store, handle,

 1-4     treat, reclaim, or dispose of oil and gas waste.

 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-6           SECTION 1.  Section 91.109, Natural Resources Code, is

 1-7     amended to read as follows:

 1-8           Sec. 91.109.  DISPOSAL SITE BOND.  A person applying for or

 1-9     acting under a commission permit to store, handle, treat, reclaim,

1-10     or dispose of oil and gas waste may be required by the commission

1-11     to maintain a performance bond or other form of financial security

1-12     conditioned that the permittee will operate and close the storage,

1-13     handling, treatment, reclamation, or disposal site in accordance

1-14     with state law, commission rules, and the permit to operate the

1-15     site.  In lieu of a bond or another form of financial security, the

1-16     commission may allow a person to pay to the commission a

1-17     nonrefundable annual fee in an amount determined by the commission

1-18     not to exceed five percent of the bond that would otherwise be

1-19     required.  However, this section does not authorize the commission

1-20     to require a bond or other form of financial security for saltwater

1-21     disposal pits, emergency saltwater storage pits (including

1-22     blow-down pits), collecting pits, or skimming pits provided that

1-23     such pits are used in conjunction with the operation of an

 2-1     individual oil or gas lease.  Subject to the refund provisions of

 2-2     Section 91.1091 of this code, proceeds from any bond or other form

 2-3     of financial security required by this section shall be placed in

 2-4     the oil-field cleanup fund.  Each bond or other form of financial

 2-5     security shall be renewed and continued in effect until the

 2-6     conditions have been met or release is authorized by the

 2-7     commission.

 2-8           SECTION 2.  Section 91.1091, Natural Resources Code, is

 2-9     amended to read as follows:

2-10           Sec. 91.1091.  REFUND.  (a)  Except as provided by Subsection

2-11     (b), the [The] commission shall refund the proceeds from a bond or

2-12     other form of security required by [under] this subchapter if:

2-13                 (1)  the conditions that caused the proceeds to be

2-14     collected are corrected;

2-15                 (2)  all administrative, civil, and criminal penalties

2-16     relating to those conditions are paid; and

2-17                 (3)  all reimbursements of costs and expenses assessed

2-18     by the commission to be collected in relation to those conditions

2-19     are collected.

2-20           (b)  The commission may not refund fees paid to the

2-21     commission in lieu of a bond under this subchapter.

2-22           SECTION 3.  Subsection (c), Section 91.111, Natural Resources

2-23     Code, is amended to read as follows:

2-24           (c)  The fund consists of:

2-25                 (1)  penalties imposed under Section 85.381 of this

 3-1     code for violation of a law, order, or rule relating to well

 3-2     plugging requirements;

 3-3                 (2)  proceeds from bonds and other financial assurances

 3-4     required by this chapter, subject to the refund provisions of

 3-5     Section 91.1091 of this code;

 3-6                 (3)  private contributions, including contributions

 3-7     made under Section 89.084 of this code;

 3-8                 (4)  expenses collected under Section 89.083 of this

 3-9     code;

3-10                 (5)  drilling permit fees imposed under Subsections (a)

3-11     and (c) of Section 85.2021 of this code;

3-12                 (6)  civil penalties collected for violations of

3-13     Chapter 89 of this code or of rules or orders relating to plugging

3-14     that are adopted under this code;

3-15                 (7)  proceeds collected under Sections 89.085 and

3-16     91.115 of this code;

3-17                 (8)  interest earned on the funds deposited in the

3-18     fund;

3-19                 (9)  fees collected under Section 91.104 of this code;

3-20                 (10)  civil penalties or costs recovered under Section

3-21     91.457 or Section 91.459 of this code;

3-22                 (11)  oil and gas waste hauler permit application fees

3-23     collected under Section 29.015, Water Code;

3-24                 (12)  costs recovered under Subsection (f) of Section

3-25     91.113 of this code;

 4-1                 (13)  hazardous oil and gas waste generation fees

 4-2     collected under Section 91.605 of this code;

 4-3                 (14)  oil-field cleanup regulatory fees on oil

 4-4     collected under Section 81.116 of this code;

 4-5                 (15)  oil-field cleanup regulatory fees on gas

 4-6     collected under Section 81.117 of this code;

 4-7                 (16)  fees for a reissued certificate collected under

 4-8     Section 85.167 of this code;

 4-9                 (17)  fees collected under Subsection (b) of Section

4-10     91.1013 of this code;

4-11                 (18)  fees collected under Section 89.088 of this code;

4-12     [and]

4-13                 (19)  legislative appropriations; and

4-14                 (20)  fees collected under Section 91.109 of this code.

4-15           SECTION 4.  (a)  This Act takes effect September 1, 1997.

4-16           (b)  The change in law made by this Act applies to:

4-17                 (1)  a permit issued by the Railroad Commission of

4-18     Texas before September 1, 1997;

4-19                 (2)  a permit application that is pending before the

4-20     Railroad Commission of Texas on September 1, 1997; or

4-21                 (3)  a permit issued by the Railroad Commission of

4-22     Texas on or after September 1, 1997.

4-23           SECTION 5.  The importance of this legislation and the

4-24     crowded condition of the calendars in both houses create an

4-25     emergency and an imperative public necessity that the

 5-1     constitutional rule requiring bills to be read on three several

 5-2     days in each house be suspended, and this rule is hereby suspended.