By King of Uvalde H.B. No. 2131
77R7864 QS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain matters regarding oil and gas regulation,
1-3 including fees, plugging of wells, required financial security, and
1-4 offenses.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 81.116(a), Natural Resources Code, is
1-7 amended to read as follows:
1-8 (a) An oil-field cleanup regulatory fee is imposed on crude
1-9 petroleum produced in this state in the amount of
1-10 fifteen-sixteenths [five-sixteenths] of one cent on each barrel of
1-11 42 standard gallons.
1-12 SECTION 2. Section 81.117(a), Natural Resources Code, is
1-13 amended to read as follows:
1-14 (a) An oil-field cleanup regulatory fee is imposed on gas
1-15 initially produced and saved in this state in the amount of
1-16 one-tenth [one-thirtieth] of one cent for each thousand cubic feet.
1-17 SECTION 3. Sections 85.2021(a) and (c), Natural Resources
1-18 Code, are amended to read as follows:
1-19 (a) With each application or materially amended application
1-20 for a permit to drill, deepen, plug back, or reenter a well, the
1-21 applicant shall submit to the commission a nonrefundable fee of:
1-22 (1) $300 [$100] if the total depth of the well is
1-23 2,000 feet or less;
1-24 (2) $375 [$125] if the total depth of the well is
2-1 greater than 2,000 feet but less than or equal to 4,000 feet;
2-2 (3) $450 [$150] if the total depth of the well is
2-3 greater than 4,000 feet but less than or equal to 9,000 feet; or
2-4 (4) $600 [$200] if the total depth of the well is
2-5 greater than 9,000 feet.
2-6 (c) With each application for an extension of time to plug a
2-7 well pursuant to commission rules, an applicant shall submit to the
2-8 commission a nonrefundable fee of $400 [$100, unless the applicant
2-9 has filed a bond under Section 91.1041 or Section 91.1042 of this
2-10 code].
2-11 SECTION 4. Section 89.002(a)(2), Natural Resources Code, is
2-12 amended to read as follows:
2-13 (2) "Operator" means a person who assumes
2-14 responsibility for the physical operation and control of a well as
2-15 shown by a form the person files with the commission and the
2-16 commission approves. The commission may not require a person to
2-17 assume responsibility for a well as a condition to being permitted
2-18 to assume responsibility for another well. In the event of a sale
2-19 or conveyance of an unplugged well or the right to operate an
2-20 unplugged well, a person ceases being the operator for the purpose
2-21 of Section 89.011 only if the well was in compliance with
2-22 commission rules relating to safety or the prevention or control of
2-23 pollution at the time of sale or conveyance and once the person who
2-24 acquires the well or right to operate the well:
2-25 (A) specifically identifies the well as a well
2-26 for which the person assumes plugging responsibility on forms
2-27 required and approved by the commission;
3-1 (B) has a commission-approved organization
3-2 report as required by Section 91.142;
3-3 (C) has a commission-approved bond as required
3-4 by [or other form of financial security under] Sections
3-5 91.103-91.106 [91.103-91.107] covering the well; and
3-6 (D) is [places the well] in compliance with all
3-7 other laws and commission rules.
3-8 SECTION 5. Sections 89.011, 91.103, 91.104, and 91.1041,
3-9 Natural Resources Code, are amended to read as follows:
3-10 Sec. 89.011. DUTY OF OPERATOR. (a) The operator of a well
3-11 shall properly plug the well when required and in accordance with
3-12 the commission's rules that are in effect at the time of the
3-13 plugging.
3-14 (b) If fresh water zones are present, the operator shall
3-15 perform a mechanical integrity test following the setting of the
3-16 plug at the base of the fresh water zones required to be protected.
3-17 A well is considered to be properly plugged only when the test
3-18 results are satisfactory and meet commission requirements.
3-19 (c) If, for the use of the surface owner, the operator of
3-20 the well plugs the well back to produce fresh water, the duty of
3-21 the operator to properly plug the well ends only when the
3-22 commission determines the well to have been properly plugged and
3-23 tested and releases the well to the surface owner.
3-24 (d) An operator may apply for an extension of time to plug a
3-25 well. The operator must be in compliance with all laws and
3-26 commission rules and must demonstrate that the well and associated
3-27 facilities are not a pollution hazard. The commission may approve
4-1 an application for an extension of time to plug a well for a period
4-2 of 12 months. An operator may not receive more than two 12-month
4-3 extensions, except that an operator who has received two 12-month
4-4 extensions and who provides results of a mechanical integrity test
4-5 that meets commission requirements receives not more than five
4-6 additional 12-month extensions. The operator may continue to
4-7 receive 12-month extensions until the well has been properly
4-8 plugged as long as the operator provides mechanical integrity test
4-9 results that meet commission requirements every five years.
4-10 (e) The duty of a person to plug an unplugged well that has
4-11 ceased operation ends only if the person's interest in the well is
4-12 sold or conveyed while the well is in compliance with rules of the
4-13 commission relating to safety or the prevention or control of
4-14 pollution and the provisions of Sections 89.002(a)(2)(A)-(D) have
4-15 been met. The person acquiring the seller's interest through such
4-16 a sale or conveyance succeeds the seller as the operator of the
4-17 well for the purpose of plugging responsibility once the provisions
4-18 of Sections 89.002(a)(2)(A)-(D) have been met.
4-19 Sec. 91.103. PERSONS REQUIRED TO EXECUTE BOND [OR ALTERNATE
4-20 FORM OF FINANCIAL SECURITY]. Any person, including any firm,
4-21 partnership, joint stock association, corporation, or other
4-22 organization, required to file an organization report under Section
4-23 91.142 of this code shall execute and file with the commission a
4-24 bond as required by Section 91.104 [or alternate form of financial
4-25 security].
4-26 Sec. 91.104. BONDS [AND ALTERNATE FORMS OF FINANCIAL
4-27 SECURITY]. (a) The commission shall require a bond [or an
5-1 alternate form of financial security] to be filed with the
5-2 commission as provided by Subsection (b) of this section.
5-3 (b) A person required to file a bond under Section 91.103
5-4 may choose to file:
5-5 (1) an individual bond as provided under Section
5-6 91.1041; or
5-7 (2) a blanket bond as provided under Section 91.1042[;]
5-8 [(3) a nonrefundable annual fee of $100, if the person
5-9 can demonstrate to the commission an acceptable record of
5-10 compliance with all commission rules, orders, licenses, permits, or
5-11 certificates that relate to safety or the prevention or control of
5-12 pollution for the previous 48 months and the person and, if a firm,
5-13 partnership, joint stock association, corporation, or other
5-14 organization, its officers, directors, general partners, or owners
5-15 of more than 25 percent ownership interest or any trustee:]
5-16 [(A) has no outstanding violations of such
5-17 commission rules, orders, licenses, permits, or certificates;]
5-18 [(B) has paid all administrative, civil, and
5-19 criminal penalties, if any, relating to any violation of such
5-20 commission rules, orders, licenses, permits, or certificates; and]
5-21 [(C) has paid all reimbursements of any costs
5-22 and expenses incurred by the commission in relation to any
5-23 violation of such commission rules, orders, licenses, permits, or
5-24 certificates;]
5-25 [(4) a nonrefundable annual fee equal to three percent
5-26 of the bond that otherwise would be required; or]
5-27 [(5) to give a first lien on tangible personal
6-1 property associated with oil and gas production whose salvage value
6-2 equals the value of an individual bond under Section 91.1041 or the
6-3 value of a blanket bond under Section 91.1042 that otherwise would
6-4 be required.]
6-5 [(c) A person who chooses to file a form of financial
6-6 security other than a bond shall also submit a fee of $100 for each
6-7 application to extend the time to plug a well in accordance with
6-8 Section 85.2021 of this code].
6-9 Sec. 91.1041. INDIVIDUAL BOND. A person required to file a
6-10 bond under Section 91.103 who operates one or more wells may file a
6-11 bond in an amount equal to $3 [$2] for each foot of well depth for
6-12 each well.
6-13 SECTION 6. Section 91.111(c), Natural Resources Code, is
6-14 amended to read as follows:
6-15 (c) The fund consists of:
6-16 (1) penalties imposed under Section 85.381 for
6-17 violation of a law, order, or rule relating to well plugging
6-18 requirements;
6-19 (2) proceeds from bonds [and other financial
6-20 assurances] required by this chapter, subject to the refund
6-21 provisions of Section 91.1091;
6-22 (3) private contributions, including contributions
6-23 made under Section 89.084;
6-24 (4) expenses collected under Section 89.083;
6-25 (5) fees imposed under Section 85.2021;
6-26 (6) civil penalties collected for violations of
6-27 Chapter 89 or of rules or orders relating to plugging that are
7-1 adopted under this code;
7-2 (7) proceeds collected under Sections 89.085 and
7-3 91.115;
7-4 (8) interest earned on the funds deposited in the
7-5 fund;
7-6 (9) fees collected under Section 91.104;
7-7 (10) civil penalties or costs recovered under Section
7-8 91.457 or 91.459;
7-9 (11) oil and gas waste hauler permit application fees
7-10 collected under Section 29.015, Water Code;
7-11 (12) costs recovered under Section 91.113(f);
7-12 (13) hazardous oil and gas waste generation fees
7-13 collected under Section 91.605;
7-14 (14) oil-field cleanup regulatory fees on oil
7-15 collected under Section 81.116;
7-16 (15) oil-field cleanup regulatory fees on gas
7-17 collected under Section 81.117;
7-18 (16) fees for a reissued certificate collected under
7-19 Section 85.167;
7-20 (17) fees collected under Section 91.1013;
7-21 (18) fees collected under Section 89.088;
7-22 (19) penalties collected under Section 81.0531; and
7-23 (20) legislative appropriations.
7-24 SECTION 7. Section 91.143(a), Natural Resources Code, is
7-25 amended to read as follows:
7-26 (a) A person may not:
7-27 (1) make or subscribe any application, report, or
8-1 other documentation required or permitted to be filed with the
8-2 commission by the provisions of Title 102, Revised Civil Statutes
8-3 of Texas, 1925, as amended, including provisions of this code
8-4 formerly included in that title, knowing or negligently failing to
8-5 ascertain whether or not [that] the application, report, or other
8-6 document is false or untrue in a material fact;
8-7 (2) aid or assist in, or procure, counsel, or advise
8-8 the preparation or presentation of any of these applications,
8-9 reports, or other documents that are fraudulent, false, or
8-10 incorrect in any material matter, knowing them to be fraudulent,
8-11 false, or incorrect in any material matter;
8-12 (3) knowingly or negligently simulate or falsely or
8-13 fraudulently execute or sign such an application, report, or other
8-14 document;
8-15 (4) knowingly or negligently procure these
8-16 applications, reports, or other documents to be falsely or
8-17 fraudulently executed, or advise, aid in, or connive at this
8-18 execution; or
8-19 (5) knowingly or negligently render inaccurate any
8-20 monitoring device required to be maintained by a commission rule,
8-21 order, or permit.
8-22 SECTION 8. Section 91.107, Natural Resources Code, is
8-23 repealed.
8-24 SECTION 9. (a) This Act takes effect September 1, 2001.
8-25 (b) The changes in law made by this Act to Section 85.2021,
8-26 Natural Resources Code, apply only to an application filed on or
8-27 after the effective date of this Act. An application filed before
9-1 the effective date of this Act is covered by the law in effect on
9-2 the date the application was filed, and that law is continued in
9-3 effect for that purpose.
9-4 (c) The changes in law made by this Act to Sections 91.103,
9-5 91.104, and 91.1041, Natural Resources Code, apply only to a bond
9-6 filed on or after the effective date of this Act. A bond filed
9-7 before the effective date of this Act is covered by the law in
9-8 effect on the date the bond was filed, and that law is continued in
9-9 effect for that purpose.
9-10 (d) The changes in law made by this Act to Section 91.143,
9-11 Natural Resources Code, apply only to a violation committed on or
9-12 after the effective date of this Act. For purposes of this
9-13 subsection, a violation is committed before the effective date of
9-14 this Act if any element of the violation occurs before that date. A
9-15 violation of Section 91.143, Natural Resources Code, committed
9-16 before the effective date of this Act is covered by the law in
9-17 effect when the violation was committed, and that law is continued
9-18 in effect for that purpose.