By Brown S.B. No. 639
75R6406 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to applications for and revocations of oil and gas
1-3 permits, certificates of compliance, and organization reports filed
1-4 with the Railroad Commission of Texas.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 91.114, Natural Resources Code, is
1-7 amended to read as follows:
1-8 Sec. 91.114. FILING OF A DRILLING PERMIT APPLICATION,
1-9 ORGANIZATION REPORT, OR CERTIFICATE OF COMPLIANCE; REVOCATION.
1-10 (a) Definitions.
1-11 (1) Persons holding a "position of ownership or
1-12 control" include officers, directors, general partners, trustees,
1-13 owners of 25 per cent or more of the beneficial interest, and
1-14 trustees of an organization, as well as any persons found in a
1-15 judgment or administrative final order to have exerted actual
1-16 control over the actions of the organization, whether or not the
1-17 person's name appears or is required to appear on the organization
1-18 report required under Section 91.142 of this code.
1-19 (2) "Outstanding violation" means a violation of
1-20 statute or Commission rule, license, certificate, or permit that
1-21 relates to safety or the prevention or control of pollution,
1-22 adjudged or found in a court judgment or administrative final order
1-23 entered against an organization, for which all appeals have been
1-24 exhausted. If the conditions constituting the violations have been
2-1 corrected and all payments required by the judgment or order have
2-2 been made, or if the organization is in compliance with a schedule
2-3 agreed to by the commission for correcting the violations and
2-4 making the required payments, the violations shall not be
2-5 considered outstanding violations under this section.
2-6 (b) The commission may not approve an organization report
2-7 required under Section 91.142 of this code or an application for a
2-8 permit issued under Chapter 85 or 91 of this code or Chapter 26,
2-9 27, or 29, Water Code, and may not issue a certificate of
2-10 compliance under Section 85.161 of this code, if the submitting
2-11 organization has an outstanding violation. If an organization is
2-12 disqualified under this subsection, the commission shall provide
2-13 the submitting organization with a statement that the report,
2-14 application, or certificate cannot be approved or issued, and the
2-15 reason for the disqualification. The Commission may, at its
2-16 discretion, issue permits needed to remedy noncompliance with law
2-17 or commission rules to organizations otherwise disqualified under
2-18 this subsection.
2-19 (c) If a person holding a position of ownership or control
2-20 in the submitting organization has, within the five year period
2-21 immediately preceding the submission of a document described in
2-22 subsection (b), held a position of ownership or control in another
2-23 organization with an outstanding violation which became
2-24 unappealable while the person held a position of ownership or
2-25 control in that other organization, the provisions of subsection
2-26 (b) apply to the submitting organization.
2-27 (d) Fees tendered in connection with a report, application,
3-1 or certificate that cannot be approved or issued under this section
3-2 are non-refundable.
3-3 (e) If the provisions of Subsection (b) of this section
3-4 apply to an organization, the commission may, after notice and
3-5 opportunity for a hearing, revoke the organization's current
3-6 organization report, any or all permits held by the organization
3-7 issued under Chapter 85 or 91 of this code or Chapter 26, 27, or
3-8 29, Water Code, and the organization's certificates of compliance
3-9 issued under Section 85.161 of this code. Upon revocation of its
3-10 organization report, an organization not perform any activities
3-11 under the jurisdiction of the commission under Title 3, Natural
3-12 Resources Code or Chapters 26, 27, and 29, Water Code, except as
3-13 necessary to remedy noncompliance with law commission rules, and
3-14 pursuant to commission authorization.
3-15 (f) In determining whether or not to revoke a permit,
3-16 organization report, or certificate of compliance, the commission
3-17 shall consider the number and seriousness of the organization's
3-18 prior violations, the hazard to the health or safety of the public,
3-19 and the organization's demonstrated good faith. Any order entered
3-20 in a revocation proceeding under subsection (e) shall allow the
3-21 organization a reasonable time to achieve compliance with the
3-22 orders or judgments made the basis of the revocation before the
3-23 revocation may become effective.
3-24 [(a) The Commission may not accept an application for a
3-25 permit under Chapter 85 or 91 of this code or Chapter 26, 27, or
3-26 29, Water Code, or issue a certificate of compliance under Section
3-27 85.161 of this code if:]
4-1 [(1) an officer, director, general partner, owner of
4-2 more than 25 percent ownership interest, or trustee of the
4-3 organization has, within the five years preceding the date on which
4-4 the organization report is filed, held a position of ownership or
4-5 control in the organization for which the application is filed or
4-6 in any other organization registered with the Commission; and]
4-7 [(2) during that period of ownership or control the
4-8 organization violated a provision of this title or a Commission
4-9 rule, order, license, permit, or certificate that relates to safety
4-10 or the prevention or control of pollution.]
4-11 [(b) An organization has committed a violation if:]
4-12 [(1) an order finding the violation has been entered
4-13 against the organization and all appeals have been exhausted; or]
4-14 [(2) the Commission and the organization have entered
4-15 into an agreed order relating to the alleged violation.]
4-16 [(c) A person holds a position of ownership or control in an
4-17 organization if the person is:]
4-18 [(1) an officer or director;]
4-19 [(2) a general partner;]
4-20 [(3) the owner of a sole proprietorship;]
4-21 [(4) the owner of more than a 25 percent ownership
4-22 interest; or]
4-23 [(5) the designated trustee.]
4-24 [(d) The Commission shall accept the application if:]
4-25 [(1) the conditions that constituted the violation are
4-26 corrected or, in the event the commission and the organization have
4-27 agreed on a schedule for correcting the conditions, the correction
5-1 of the conditions is on schedule;]
5-2 [(2) all administrative, civil, and criminal penalties
5-3 relating to those conditions are paid; and]
5-4 [(3) all reimbursements of costs and expenses assessed
5-5 by the Commission to be collected in relation to those conditions
5-6 are collected.]
5-7 [(e) The commission may revoke a permit issued under Chapter
5-8 85 or 91 of this code or Chapter 26, 27, or 29, Water Code, a
5-9 certificate of compliance issued under Section 85.161 of this code,
5-10 or an organization report filed under Section 91.142 of this code
5-11 if the commission finds that the conditions of Subdivisions (a)(1)
5-12 and (a)(2) of this section exist as to the holder of any permit,
5-13 certificate, or report. An order of the commission entered as a
5-14 result of a revocation proceeding shall provide a reasonable period
5-15 of time to comply with the order before the revocation of a permit,
5-16 certificate, or report is effective.]
5-17 [(f) The commission may not revoke a permit, certificate of
5-18 compliance, or organization report under Subsection (e) of this
5-19 section if it finds that the holder of a permit, certificate, or
5-20 report has fulfilled the conditions set out in Subsection (d) of
5-21 this section.]
5-22 [(g) In determining whether or not to revoke a permit,
5-23 certificate of compliance, or organization report under Subsection
5-24 (e) of this section, the commission shall consider the person's
5-25 history of previous violations, any hazard to the health or safety
5-26 of the public, and the demonstrated good faith of the holder of the
5-27 permit, certificate, or report.]
6-1 SECTION 2. Section 91.142, Natural Resources Code, is
6-2 amended by adding subsection (e) as follows:
6-3 (e) Except as necessary to remedy noncompliance with law or
6-4 commission rules, and pursuant to commission authorization, no
6-5 entity listed in subsection (a) of this section may perform
6-6 operations within the jurisdiction of the commission without
6-7 maintaining on file with the commission a valid organization report
6-8 and financial security required by Chapter 91 of this Code. If an
6-9 entity listed in subsection (a) fails to refile its organization
6-10 report annually according to a schedule established by the
6-11 commission, the commission may immediately and without prior notice
6-12 suspend any and all permits held by the entity and all certificates
6-13 of compliance issued under Chapter 85 of this Code to the entity.
6-14 SECTION 3. This act takes effect on September 1, 1997.
6-15 SECTION 4. The importance of this legislation and the
6-16 crowded condition of the calendars in both houses create an
6-17 emergency and an imperative public necessity that the
6-18 constitutional rule requiring bills to be read on three several
6-19 days in each house be suspended, and this rule is hereby suspended.