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By: Farabee, et al. (Senate Sponsor - Duncan) H.B. No. 2020
(In the Senate - Received from the House May 2, 2003;
May 6, 2003, read first time and referred to Committee on Natural
Resources; May 23, 2003, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 9, Nays 0;
May 23, 2003, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 2020 By: Jackson
A BILL TO BE ENTITLED
AN ACT
relating to financial security requirements for certain persons
performing operations within the jurisdiction of the Railroad
Commission of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 91.104(b), Natural Resources Code, is
amended to read as follow:
(b) A person required to file a bond or alternate form of
financial security 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 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; or
(4) a nonrefundable annual fee of [$1,000, if:
[(A) the commission determines that individual
and blanket bonds as specified by Subdivisions (1) and (2) are not
obtainable at reasonable prices; and
[(B) 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:
[(i) has no outstanding violations of such
commission rules, orders, licenses, permits, or certificates;
[(ii) has paid all administrative, civil,
and criminal penalties, if any, relating to any violation of such
commission rules, orders, licenses, permits, or certificates; and
[(iii) 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; or
[(5) a nonrefundable annual fee] equal to 12 1/2
percent of the bond that otherwise would be required.
SECTION 2. Section 91.1042, Natural Resources Code, is
amended to read as follows:
Sec. 91.1042. BLANKET BOND. (a) A person required to file
a bond or alternate form of financial security under Section 91.103
who operates wells may file a blanket bond to cover all wells and
operations for which a bond or alternate form of financial security
is required as follows:
(1) a person who operates at least one well but not
more than 10 wells [10 or fewer wells or performs other operations]
shall file a $15,000 [$25,000] blanket bond;
(2) a person who operates more than 10 but fewer than
25 [100] wells shall file a $35,000 [$50,000] blanket bond; [and]
(3) a person who operates 25 [100] or more wells but
fewer than 100 wells shall file a $50,000 [$250,000] blanket bond;
(4) a person who operates 100 or more wells but fewer
than 150 wells shall file a $100,000 blanket bond;
(5) a person who operates 150 or more wells but fewer
than 200 wells shall file a $175,000 blanket bond; and
(6) a person who operates 200 or more wells shall file
a $250,000 blanket bond.
(b) Notwithstanding Subsection (a), the commission by rule
shall set the amount of the bond for an operator of bay or offshore
wells at a reasonable amount that exceeds the amount provided by
Subsection (a)(1), (2), [or] (3), (4), (5), or (6), as applicable.
SECTION 3. Effective September 1, 2004, Section 91.1042(a),
Natural Resources Code, is amended to read as follows:
(a) A person required to file a bond, letter of credit, or
cash deposit [or alternate form of financial security] under
Section 91.103 who operates wells may file a blanket bond to cover
all wells and operations for which a bond, letter of credit, or cash
deposit [or alternate form of financial security] is required as
follows:
(1) a person who operates at least one well but not
more than 10 wells [10 or fewer wells or performs other operations]
shall file a $15,000 [$25,000] blanket bond;
(2) a person who operates more than 10 but fewer than
25 [100] wells shall file a $35,000 [$50,000] blanket bond; [and]
(3) a person who operates 25 [100] or more wells but
fewer than 100 wells shall file a $50,000 [$250,000] blanket bond;
(4) a person who operates 100 or more wells but fewer
than 150 wells shall file a $100,000 blanket bond;
(5) a person who operates 150 or more wells but fewer
than 200 wells shall file a $175,000 blanket bond; and
(6) a person who operates 200 or more wells shall file
a $250,000 blanket bond.
SECTION 4. Section 24, Chapter 1233, Acts of the 77th
Legislature, Regular Session, 2001, is repealed.
SECTION 5. The changes in law made by this Act apply only to
a person required to file a bond or alternate form of financial
security under Section 91.103, Natural Resources Code, on or after
the effective date of this Act. A person required to file a bond or
alternate form of financial security under Section 91.103, Natural
Resources Code, before the effective date of this Act is governed by
the law as it existed immediately before the effective date of this
Act, and that law is continued in effect for that purpose.
SECTION 6. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.
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