78R8463 T
By: Armbrister S.B. No. 1386
A BILL TO BE ENTITLED
AN ACT
relating to the filing of financial security by entities engaging
in oil and gas exploration and production related activities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 91.103, Natural Resources Code, is
amended to read as follows:
(a) Except as provided in subsection (b) below, any [Any]
person, including any firm, partnership, joint stock association,
corporation, or other organization, required to file an
organization report under Section 91.142 of this code shall execute
and file with the commission a bond or alternate form of financial
security.
(b) An entity that is required to file an organization
report under Section 91.142 of this code is not required to file a
bond or alternate form of financial security if:
(1) the entity is not the designated operator of any
wells, facilities, or activities associated with the production,
transportation, injection, or disposal of oil and gas, oil and gas
wastes, or associated materials; and
(2) the commission determines that the activities of
the entity that are within commission jurisdiction do not pose a
risk of pollution of surface or sub-surface water.
(c) The commission shall not grant authority to operators to
conduct operations under the jurisdiction of the commission unless
appropriate financial assurance is filed pursuant to this section
prior to commencement of any regulated activities.
SECTION 2. Section 91.103, Natural Resources Code, as
enacted to be effective September 1, 2004, is amended to read as
follows:
(a) Except as provided in subsection (b) below, any [Any]
person, including any firm, partnership, joint stock association,
corporation, or other organization, required to file an
organization report under Section 91.142 of this code shall execute
and file with the commission a bond, letter of credit or cash
deposit.
(b) An entity that is required to file an organization
report under Section 91.142 of this code is not required to file a
bond or alternate form of financial security if:
(1) the entity is not the designated operator of any
wells, facilities, or activities associated with the production,
transportation, injection, or disposal of oil and gas, oil and gas
wastes, or associated materials; and
(2) the commission determines that the activities of
the entity that are within commission jurisdiction do not pose a
risk of pollution of surface or sub-surface water.
(c) The commission shall not grant authority to operators to
conduct operations under the jurisdiction of the commission unless
appropriate financial assurance is filed pursuant to this section
prior to commencement of any regulated activities.
SECTION 3. Section 91.109(b), Texas Natural Resources Code,
as enacted to be effective September 1, 2004, is amended to add
sub-part (3) 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 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; or
(3) a lesser amount determined by the commission by
rule to be sufficient to cover the risk for any person engaging in a
specific class of activities that does not involve the operation of
wells.
SECTION 4. 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.