1-1           By:  Brown                                       S.B. No. 632

 1-2           (In the Senate - Filed February 18, 1997; February 20, 1997,

 1-3     read first time and referred to Committee on Natural Resources;

 1-4     March 6, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 8, Nays 0; March 6, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 632                    By:  Brown

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to payment of a nonrefundable annual fee in lieu of a bond

1-11     or other form of financial security required of a person applying

1-12     for or acting under a railroad commission permit to store, handle,

1-13     treat, reclaim, or dispose of oil and gas waste.

1-14           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-15           SECTION 1.  Section 91.109, Natural Resources Code, is

1-16     amended to read as follows:

1-17           Sec. 91.109.  DISPOSAL SITE BOND.  A person applying for or

1-18     acting under a commission permit to store, handle, treat, reclaim,

1-19     or dispose of oil and gas waste may be required by the commission

1-20     to maintain a performance bond or other form of financial security

1-21     conditioned that the permittee will operate and close the storage,

1-22     handling, treatment, reclamation, or disposal site in accordance

1-23     with state law, commission rules, and the permit to operate the

1-24     site.  In lieu of a bond or another form of financial security, the

1-25     commission may allow a person to pay to the commission a

1-26     nonrefundable annual fee in an amount determined by the commission

1-27     not to exceed five percent of the bond that would otherwise be

1-28     required.  However, this section does not authorize the commission

1-29     to require a bond or other form of financial security for saltwater

1-30     disposal pits, emergency saltwater storage pits (including

1-31     blow-down pits), collecting pits, or skimming pits provided that

1-32     such pits are used in conjunction with the operation of an

1-33     individual oil or gas lease.  Subject to the refund provisions of

1-34     Section 91.1091 of this code, proceeds from any bond or other form

1-35     of financial security required by this section shall be placed in

1-36     the oil-field cleanup fund.  Each bond or other form of financial

1-37     security shall be renewed and continued in effect until the

1-38     conditions have been met or release is authorized by the

1-39     commission.

1-40           SECTION 2.  Section 91.1091, Natural Resources Code, is

1-41     amended to read as follows:

1-42           Sec. 91.1091.  REFUND.  (a)  Except as provided by Subsection

1-43     (b), the [The] commission shall refund the proceeds from a bond or

1-44     other form of security required by [under] this subchapter if:

1-45                 (1)  the conditions that caused the proceeds to be

1-46     collected are corrected;

1-47                 (2)  all administrative, civil, and criminal penalties

1-48     relating to those conditions are paid; and

1-49                 (3)  all reimbursements of costs and expenses assessed

1-50     by the commission to be collected in relation to those conditions

1-51     are collected.

1-52           (b)  The commission may not refund fees paid to the

1-53     commission in lieu of a bond under this subchapter.

1-54           SECTION 3.  Subsection (c), Section 91.111, Natural Resources

1-55     Code, is amended to read as follows:

1-56           (c)  The fund consists of:

1-57                 (1)  penalties imposed under Section 85.381 of this

1-58     code for violation of a law, order, or rule relating to well

1-59     plugging requirements;

1-60                 (2)  proceeds from bonds and other financial assurances

1-61     required by this chapter, subject to the refund provisions of

1-62     Section 91.1091 of this code;

1-63                 (3)  private contributions, including contributions

1-64     made under Section 89.084 of this code;

 2-1                 (4)  expenses collected under Section 89.083 of this

 2-2     code;

 2-3                 (5)  drilling permit fees imposed under Subsections (a)

 2-4     and (c) of Section 85.2021 of this code;

 2-5                 (6)  civil penalties collected for violations of

 2-6     Chapter 89 of this code or of rules or orders relating to plugging

 2-7     that are adopted under this code;

 2-8                 (7)  proceeds collected under Sections 89.085 and

 2-9     91.115 of this code;

2-10                 (8)  interest earned on the funds deposited in the

2-11     fund;

2-12                 (9)  fees collected under Section 91.104 of this code;

2-13                 (10)  civil penalties or costs recovered under Section

2-14     91.457 or Section 91.459 of this code;

2-15                 (11)  oil and gas waste hauler permit application fees

2-16     collected under Section 29.015, Water Code;

2-17                 (12)  costs recovered under Subsection (f) of Section

2-18     91.113 of this code;

2-19                 (13)  hazardous oil and gas waste generation fees

2-20     collected under Section 91.605 of this code;

2-21                 (14)  oil-field cleanup regulatory fees on oil

2-22     collected under Section 81.116 of this code;

2-23                 (15)  oil-field cleanup regulatory fees on gas

2-24     collected under Section 81.117 of this code;

2-25                 (16)  fees for a reissued certificate collected under

2-26     Section 85.167 of this code;

2-27                 (17)  fees collected under Subsection (b) of Section

2-28     91.1013 of this code;

2-29                 (18)  fees collected under Section 89.088 of this code;

2-30     [and]

2-31                 (19)  legislative appropriations; and

2-32                 (20)  fees collected under Section 91.109 of this code.

2-33           SECTION 4.  (a)  This Act takes effect September 1, 1997.

2-34           (b)  The change in law made by this Act applies to:

2-35                 (1)  a permit issued by the Railroad Commission of

2-36     Texas before September 1, 1997;

2-37                 (2)  a permit application that is pending before the

2-38     Railroad Commission of Texas on September 1, 1997; or

2-39                 (3)  a permit issued by the Railroad Commission of

2-40     Texas on or after September 1, 1997.

2-41           SECTION 5.  The importance of this legislation and the

2-42     crowded condition of the calendars in both houses create an

2-43     emergency and an imperative public necessity that the

2-44     constitutional rule requiring bills to be read on three several

2-45     days in each house be suspended, and this rule is hereby suspended.

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