H.B. No. 942
AN ACT
relating to certain bond requirements for persons engaged in
certain activities under the jurisdiction of the Railroad
Commission of Texas other than the ownership or operation of wells.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 91.104(b), Natural Resources Code, as
effective September 1, 2004, is amended to read as follows:
(b) A person required to file a bond, letter of credit, or
cash deposit under Section 91.103 who is an inactive operator or who
operates one or more wells [and is not involved in any other
activities that require the filing of a bond, letter of credit, or
cash deposit] must, at the time of filing or renewing an
organization report required by Section 91.142, file:
(1) an individual bond as provided under Section
91.1041;
(2) a blanket bond as provided under Section 91.1042;
or
(3) a letter of credit or cash deposit in the same
amount as required for an individual bond under Section 91.1041 or a
blanket bond under Section 91.1042.
SECTION 2. Section 91.109, Natural Resources Code, as
effective until September 1, 2004, 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), 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 ownership or operation of wells must file
the bond or alternate form of financial security at the time of
filing or renewing an organization report required by Section
91.142 according to the following schedule:
(1) no bond, letter of credit, or cash deposit if the
person is a:
(A) local distribution company;
(B) gas marketer;
(C) crude oil nominator;
(D) first purchaser;
(E) well servicing company;
(F) survey company;
(G) salt water hauler;
(H) gas nominator;
(I) gas purchaser; or
(J) well plugger; or
(2) a bond, letter of credit, or cash deposit in an
amount not to exceed $25,000 if the person is involved in an
activity that is not associated with the ownership or operation of
wells and is not listed in Subdivision (1).
(c) A person who engages in more than one activity or
operation, including well operation, for which a bond or alternate
form of financial security is required under this subchapter is not
required to file a separate bond or alternate form of financial
security for each activity or operation in which the person is
engaged. The person is required to file a bond or alternate form of
financial security only in the amount required for the activity or
operation in which the person engages for which a bond or alternate
form of financial security in the greatest amount is required. The
bond or alternate form of financial security filed covers all of the
activities and operations for which a bond or alternate form of
financial security is required under this subchapter.
SECTION 3. Section 91.109, Natural Resources Code, as
effective September 1, 2004, is amended by amending Subsection (b)
and adding Subsection (c) to read as follows:
(b) In addition to the financial security requirements of
Subsection (a) [and Section 91.104(b)], a person required to file a
bond, letter of credit, or cash deposit under Section 91.103 who is
involved in activities other than the ownership or 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 according to the following schedule [in an amount
equal to]:
(1) no bond, letter of credit, or cash deposit if the
person is a:
(A) local distribution company;
(B) gas marketer;
(C) crude oil nominator;
(D) first purchaser;
(E) well servicing company;
(F) survey company;
(G) salt water hauler;
(H) gas nominator;
(I) gas purchaser; or
(J) well plugger [$250,000]; or
(2) a bond, letter of credit, or cash deposit in an
amount not to exceed $25,000 if the person is involved in an
activity that is not associated with the ownership or operation of
wells and is not listed in Subdivision (1) [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) A person who engages in more than one activity or
operation, including well operation, for which a bond, letter of
credit, or cash deposit is required under this subchapter is not
required to file a separate bond, letter of credit, or cash deposit
for each activity or operation in which the person is engaged. The
person is required to file a bond, letter of credit, or cash deposit
only in the amount required for the activity or operation in which
the person engages for which a bond, letter of credit, or cash
deposit in the greatest amount is required. The bond, letter of
credit, or cash deposit filed covers all of the activities and
operations for which a bond, letter of credit, or cash deposit is
required under this subchapter.
SECTION 4. Section 91.142(g), Natural Resources Code, is
amended to read as follows:
(g) An organization report filed under this section must be
accompanied by the following fee:
(1) for an operator of not more than 25 wells, $300;
(2) for an operator of more than 25 but not more than
100 wells, $500;
(3) for an operator of more than 100 wells, $1,000;
(4) for an operator of one or more natural gas
pipelines as classified by the commission, $225 [$100];
(5) for an operator of one or more service activities
or facilities[, including liquids pipelines as classified by the
commission,] who does not operate any wells, an amount determined
by the commission but not less than $300 or more than $500;
(6) for an operator of one or more liquids pipelines as
classified by the commission who does not operate any wells, an
amount determined by the commission but not less than $425 or more
than $625;
(7) [(6)] for an operator of one or more service
activities or facilities, including liquids pipelines as
classified by the commission, who also operates one or more wells,
an amount determined by the commission based on the sum of the
amounts provided by the applicable subdivisions of this subsection
but not less than $425 [$300] or more than $1,125 [$1,000]; and
(8) [(7)] for an entity not currently performing
operations under the jurisdiction of the commission, $300.
SECTION 5. This Act takes effect September 1, 2003.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 942 was passed by the House on May 6,
2003, by a non-record vote; and that the House concurred in Senate
amendments to H.B. No. 942 on May 30, 2003, by a non-record vote.
______________________________
Chief Clerk of the House
I certify that H.B. No. 942 was passed by the Senate, with
amendments, on May 28, 2003, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor