By Brown S.B. No. 638
75R6405 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the definition of operator of oil and gas wells and to
1-3 an operator's duty to plug wells.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 89.002(a), Natural Resources Code, is
1-6 amended to read as follows:
1-7 (a) In this chapter:
1-8 (1) "Well" means a hole drilled for the purpose of:
1-9 (A) producing oil or gas;
1-10 (B) injecting fluid or gas in the ground in
1-11 connection with the exploration or production of oil or gas;
1-12 (C) obtaining geological information by taking
1-13 cores or through seismic operations;
1-14 (D) producing geothermal energy and associated
1-15 resources that are subject to the jurisdiction of the Railroad
1-16 Commission of Texas.
1-17 (2) "Operator" means the [a] person who is designated
1-18 to and accepted by the Commission as responsible for the physical
1-19 operation and control of a well at the time the well is about to be
1-20 abandoned or ceases operation. However, in the event of a sale or
1-21 conveyance of an unplugged well or the right to operate an
1-22 unplugged well that [has ceased operation, but that] was in
1-23 compliance with Commission rules applicable to such wells [that
1-24 have ceased operation] at the time of sale or conveyance, the term
2-1 "operator" for the purpose of determining plugging responsibility
2-2 shall not mean the person who sells or conveys the well or right to
2-3 operate the well, if and only if [once] the person who acquires the
2-4 well or right to operate the well:
2-5 (A) specifically identifies the well as a well
2-6 for which it assumes plugging responsibility on such forms as may
2-7 be required by the Commission and such filings are approved by the
2-8 Commission;
2-9 (B) has a Commission-approved organization
2-10 report as required by Section 91.142 of this code;
2-11 (C) has a Commission-approved form of financial
2-12 security pursuant to Sections 91.103-91.107, Natural Resources Code
2-13 [bond] covering the well [or is eligible for a nonrefundable annual
2-14 fee of $100 as provided by Sections 91.104(b)(1)-(3) and Section
2-15 91.107 of this code]; and
2-16 (D) places the well in compliance with
2-17 Commission rules.
2-18 (3) "Nonoperator" means a person who owns a working
2-19 interest in a well at the time the well is required to be plugged
2-20 pursuant to Commission rules and is not an operator as defined in
2-21 Subdivision (2) of this subsection.
2-22 (4) "Commission" means the Railroad Commission of
2-23 Texas.
2-24 (5) "Well-site equipment" means any production-related
2-25 equipment or materials specific to the well being plugged,
2-26 including motors, pumps, pump jacks, tanks, tank batteries,
2-27 separators, compressors, casing, tubing, and rods.
3-1 (6) "Lease" means the lease on which a well made the
3-2 subject of a plugging contract is located.
3-3 (7) "Delinquent inactive well" means an unplugged well
3-4 that has had no reported production, disposal, injection, or other
3-5 permitted activity for a period of greater than 12 months and for
3-6 which, after notice and opportunity for a hearing, the Commission
3-7 has not extended the plugging deadline.
3-8 (8) "Plugging" includes replugging.
3-9 (b) The terms operator and nonoperator as defined in this
3-10 section do not mean a royalty interest owner or an overriding
3-11 royalty interest owner.
3-12 SECTION 2. Section 89.011(b), Natural Resources Code, is
3-13 amended to read as follows:
3-14 (b) The duty of a person to plug an unplugged well that has
3-15 ceased operation ends if and only if the person's interest in the
3-16 well is sold or conveyed while the well is in compliance with rules
3-17 of the Commission applicable to wells that have ceased operation
3-18 and the provisions of Sections 89.002(a)(2)(A)-(D) of this code
3-19 have been met. The person acquiring the seller's interest through
3-20 such a sale or conveyance succeeds the seller as the operator of
3-21 the well for the purpose of plugging responsibility if, and only
3-22 if, [once] the provisions of Sections 89.002(a)(2)(A)-(D) of this
3-23 code have been met.
3-24 SECTION 3. This act takes effect September 1, 1997.
3-25 SECTION 4. The importance of this legislation and the
3-26 crowded condition of the calendars in both houses create an
3-27 emergency and an imperative public necessity that the
4-1 constitutional rule requiring bills to be read on three several
4-2 days in each house be suspended, and this rule is hereby suspended.