Amend CSSB 310 (corrected House committee report) by striking
SECTIONS 15-19 of the bill (beginning on page 17, line 13, through
page 22, line 8), substituting an appropriately numbered new
SECTION to the bill to read as follows, and appropriately
renumbering subsequent SECTIONS of the bill:
SECTION __. (a) Section 91.104, Natural Resources Code, is
amended to read as follows:
Sec. 91.104. FINANCIAL SECURITY REQUIRED FOR INACTIVE
OPERATORS AND CERTAIN ACTIVE OPERATORS. (a) A person required to
file a bond or alternate form of financial security under Section
91.103 who is an inactive operator or who operates one or more land
wells and is not involved in any other activities that require the
filing of a bond or alternate form of financial security must file
a bond, a letter of credit, or a cash deposit at the time of filing
or renewing an organization report required by Section 91.142 in an
amount equal to:
(1) $25,000, if the person operates not more than 10
wells;
(2) $50,000, if the person operates at least 11 but
not more than 100 wells; or
(3) $250,000, if the person operates more than 100
wells.
(b) In addition to the financial security requirements of
Subsection (a), a person required to file a bond or alternate form
of financial security under Section 91.103 who operates one or more
bay or offshore wells must file the bond, letter of credit, or cash
deposit at the time of filing or renewing an organization report
required by Section 91.142 in a reasonable amount established by
commission rule that exceeds the amount provided by Subsection
(a)(1), (2), or (3), as applicable.
(c) An operator seeking to assume operatorship of an active
or inactive well must file a bond, letter of credit, or cash
deposit in the appropriate amount under this section before the
commission may approve the transfer of operatorship. A transfer of
a well from one entity to another entity under common operatorship
is a transfer for purposes of this subsection.
(d) The bond, letter of credit, or cash deposit amounts
prescribed by this section may be used only for actual well
plugging and surface remediation. <BONDS AND ALTERNATE FORMS OF
FINANCIAL SECURITY. (a) The commission shall require a bond or an
alternate form of financial security to be filed with the
commission as provided by Subsection (b) of this section.>
<(b) A person required to file a bond under Section 91.103
may choose to file:>
<(1) an individual bond as provided under Section
91.1041;>
<(2) a blanket bond as provided under Section 91.1042;>
<(3) a nonrefundable annual fee of $100, if the person
can demonstrate to the commission an acceptable record of
compliance with all commission rules, orders, licenses, permits, or
certificates that relate to safety or the prevention or control of
pollution for the previous 48 months and the person and, if a firm,
partnership, joint stock association, corporation, or other
organization, its officers, directors, general partners, or owners
of more than 25 percent ownership interest or any trustee:>
<(A) has no outstanding violations of such
commission rules, orders, licenses, permits, or certificates;>
<(B) has paid all administrative, civil, and
criminal penalties, if any, relating to any violation of such
commission rules, orders, licenses, permits, or certificates; and>
<(C) has paid all reimbursements of any costs
and expenses incurred by the commission in relation to any
violation of such commission rules, orders, licenses, permits, or
certificates;>
<(4) a nonrefundable annual fee equal to three percent
of the bond that otherwise would be required; or>
<(5) to give a first lien on tangible personal
property associated with oil and gas production whose salvage value
equals the value of an individual bond under Section 91.1041 or the
value of a blanket bond under Section 91.1042 that otherwise would
be required.>
<(c) A person who chooses to file a form of financial
security other than a bond shall also submit a fee of $100 for each
application to extend the time to plug a well in accordance with
Section 85.2021 of this code.>
(b) Section 91.109, Natural Resources Code, is amended to
read as follows:
Sec. 91.109. FINANCIAL SECURITY FOR PERSONS INVOLVED IN
ACTIVITIES OTHER THAN OPERATION OF WELLS <DISPOSAL SITE BOND>. (a)
A person applying for or acting under a commission permit to store,
handle, treat, reclaim, or dispose of oil and gas waste may be
required by the commission to maintain a performance bond or other
form of financial security conditioned that the permittee will
operate and close the storage, handling, treatment, reclamation, or
disposal site in accordance with state law, commission rules, and
the permit to operate the site. However, this section does not
authorize the commission to require a bond or other form of
financial security for saltwater disposal pits, emergency saltwater
storage pits (including blow-down pits), collecting pits, or
skimming pits provided that such pits are used in conjunction with
the operation of an individual oil or gas lease. Subject to the
refund provisions of Section 91.1091 of this code, proceeds from
any bond or other form of financial security required by this
section shall be placed in the oil-field cleanup fund. Each bond
or other form of financial security shall be renewed and continued
in effect until the conditions have been met or release is
authorized by the commission.
(b) In addition to the financial security requirements of
Subsection (a) and Section 91.104(b), a person required to file a
bond or alternate form of financial security under Section 91.103
who is involved in activities other than the operation of wells
must file the bond, letter of credit, or cash deposit at the time
of filing or renewing an organization report required by Section
91.142 in an amount equal to:
(1) $250,000; or
(2) a lesser amount determined by the commission if
the person is able to demonstrate that the risk associated with an
operation or group of operations warrants a lesser amount.
(c) The changes in law made by Sections 91.104(a) and (b)
and 91.109, Natural Resources Code, as amended by this section,
apply only to a person required on or after September 1, 2004, to
file a bond or alternate financial security under Section 91.103,
Natural Resources Code. A person required to file a bond or
alternate financial security under that section before that date is
governed by the law in effect on the date the bond or security is
required to be filed, and the former law is continued in effect for
that purpose. The changes made by Section 91.104(c), Natural
Resources Code, as added by this section, apply on or after the
effective date of this Act to a person required by that section to
file a bond, letter of credit, or cash deposit.