88R8013 JAM-F
 
  By: Longoria H.B. No. 4278
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment by the Railroad Commission of Texas
  of the orphaned well Bitcoin mining partnership program.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Chapter 89, Natural Resources Code, is amended
  by adding Subchapter D-1 to read as follows:
  SUBCHAPTER D-1. ORPHANED WELL BITCOIN MINING PARTNERSHIP PROGRAM
         Sec. 89.101.  DEFINITIONS. In this subchapter:
               (1)  "Fund" means the orphaned well Bitcoin mining
  partnership program fund.
               (2)  "Orphaned well" has the meaning assigned by
  Section 89.047.
               (3)  "Program" means the orphaned well Bitcoin mining
  partnership program established under this subchapter.
               (4)  "Program participant" means a Bitcoin miner who
  assumes operation and regulatory responsibility for an orphaned
  well through the program.
         Sec. 89.102.  PROGRAM. The commission shall establish the
  orphaned well Bitcoin mining partnership program through which:
               (1)  a program participant will assume operation and
  regulatory responsibility for an orphaned well, including:
                     (A)  liability for plugging, remediating, or
  reclaiming the well to commission standards; and
                     (B)  temporary control of:
                           (i)  the energy produced from the well for
  which liability is assumed in a manner established by commission
  rule; and
                           (ii)  a portion of the surface estate at the
  well location necessary to mine Bitcoin at the location, as
  determined by the commission; and
               (2)  the commission may loan money from the fund to a
  program participant to facilitate Bitcoin mining at the location of
  the well.
         Sec. 89.103.  FUND. (a) The orphaned well Bitcoin mining
  partnership program fund is a special account in the general
  revenue fund created for the purpose of providing loans to program
  participants and the payment of costs associated with plugging
  orphaned wells under Section 89.109(c).
         (b)  The fund consists of:
               (1)  money received from the federal government under:
                     (A)  the Infrastructure Investment and Jobs Act
  (Pub. L. No. 117-58); or
                     (B)  Pub. L. No. 117-169, commonly cited as the
  Inflation Reduction Act;
               (2)  deposits to the fund made under Section 89.111;
               (3)  money from any source transferred or deposited to
  the credit of the fund at the commission's discretion as authorized
  by law;
               (4)  any other revenue that the legislature by statute
  dedicates for deposit to the credit of the fund;
               (5)  money from gifts, grants, or donations to the
  fund; and
               (6)  investment earnings and interest earned on amounts
  credited to the fund.
         Sec. 89.104.  IDENTIFICATION OF ORPHANED WELLS.  The
  commission shall identify orphaned wells appropriate for inclusion
  in the program.
         Sec. 89.105.  PUBLICATION OF CERTAIN INFORMATION REGARDING
  ORPHANED WELLS.  The commission shall make publicly accessible on
  the commission's Internet website: 
               (1)  any information required as a condition of the
  receipt or use of money described by Section 89.103(b)(1); and
               (2)  information on each well identified under Section
  89.104, including:
                     (A)  the amount of methane or any other natural
  gas reasonably expected to be produced from the well;
                     (B)  the location of the well;
                     (C)  how long the well has been abandoned;
                     (D)  an estimate of expenses required to plug,
  remediate, or reclaim the well to commission standards;
                     (E)  whether the well is on state-owned or private
  land;
                     (F)  information on the last known operator of the
  well;
                     (G)  any information regarding the integrity of
  the well or well casing; and
                     (H)  any other information the commission
  considers relevant to the program.
         Sec. 89.106.  SOLICITATION OF BIDS. (a) At the commission's
  discretion, but not less than once per year, the commission shall
  solicit bids through the commission's Internet website from
  potential program participants to assume liability for an orphaned
  well for which information is published under Section 89.105.
         (b)  A bid submission under Subsection (a) must contain:
               (1)  legal documents showing the structure of the
  Bitcoin mining company;
               (2)  documents demonstrating the company's ability to
  successfully mine Bitcoin;
               (3)  a reasonable estimate of:
                     (A)  when Bitcoin mining would begin at the
  location;
                     (B)  how long the Bitcoin mining would occur at
  the location;
                     (C)  the initial investment from the fund the
  company would require to begin Bitcoin mining at the location;
                     (D)  how much Bitcoin would be mined at the
  location through participation in the program; 
                     (E)  conditions necessary for Bitcoin mining to be
  profitable at the location; and
                     (F)  the money the company will contribute to the
  fund in the form of Bitcoin during participation in the program;
               (4)  proof of financial responsibility for the
  company's ability to ensure proper plugging of the well and cleanup
  of the location regardless of the success of the mining operation at
  the location; and
               (5)  any other information the commission considers
  relevant.
         (c)  Information submitted to the commission under
  Subsection (b) may not be publicly disclosed. The commission may
  provide summary statistics regarding information received in the
  bids.
         Sec. 89.107.  SELECTION OF BIDS; ASSESSMENT PERIOD. (a)
  After the close of a bidding period as determined by the commission,
  the commission shall select bids based on:
               (1)  the ability of the potential program participant
  to successfully and safely mine at the location;
               (2)  the time frame over which the potential program
  participant will mine on the well; and
               (3)  the initial cost and return on investment for the
  program.
         (b)  The commission shall announce the selection of bids on
  the commission's Internet website and must include for a bid
  selected a redacted version of the bidder's proposal that removes
  sensitive business information of the bidder.
         (c)  The commission shall allow a potential program
  participant whose bid was selected under this section not more than
  60 days from the date the bid is awarded to perform an assessment of
  the orphaned well for which the bid was awarded. The assessment
  must include the ability to:
               (1)  perform tests for mechanical integrity;
               (2)  perform tests for surface integrity; and
               (3)  determine the amount of natural gas and or oil the
  well can produce.
         (d)  Subject to Subsection (e), not later than the 60th day
  after the date a bid is selected under Subsection (a), a potential
  program participant whose bid was selected shall give notice to the
  commission as to whether the potential program participant will
  participate in the program. A potential program participant
  required to give notice under this section assumes responsibility
  for plugging, remediating, or reclaiming the orphaned well for
  which the potential program participant's bid was selected if the
  potential program participant does not give notice as required by
  this subsection.
         (e)  The assessment period described by Subsection (c) may be
  extended by the commission for an additional 60 days on application
  of the potential program participant whose bid was selected.
         (f)  Subject to an extension provided under Subsection (e),
  information collected under Subsection (c) must be reported to the
  commission not later than the 60th day after the end of the
  assessment period described by Subsection (c).
         (g)  A person who notifies the commission under Subsection
  (d) that the person will not participate in the program must provide
  to the commission a reason for that decision.
         Sec. 89.108.  BITCOIN MINING AT LOCATION OF ORPHANED WELL.
  (a) Before beginning Bitcoin mining, a program participant must:
               (1)  use a third-party organization to report to the
  commission the amount of natural gas emissions currently being
  emitted from the well;
               (2)  post a bond to the state in an amount determined by
  the commission to ensure that the orphaned well will be plugged,
  remediated, or reclaimed to commission standards; and
               (3)  if the owner of the mineral rights of the orphaned
  well is known, negotiate with that owner for royalty payments for
  oil or gas produced from the well.
         (b)  A program participant who assumes control over an
  orphaned well assumes all liability for plugging, remediating, or
  reclaiming the well to commission standards.
         (c)  The commission shall remove from any required plugging
  schedule a well for which a program participant has assumed
  liability under this section.
         Sec. 89.109.  COSTS. (a) Subject to Subsection (b), the
  financial responsibility of a program participant to plug,
  remediate, or reclaim an orphaned well is limited to three times the
  initial estimate by the commission if the program participant uses
  a third party to provide to the commission:
               (1)  information about the well integrity;
               (2)  data on natural gas emissions from the well;
               (3)  information related to any potential groundwater
  contamination; and
               (4)  information demonstrating that Bitcoin mining at
  the location did not significantly cause the cost of plugging,
  remediating, or reclaiming the well to increase.
         (b)  The limitation on the financial responsibility of a
  program participant described by Subsection (a) does not apply to
  additional costs attributable to actions of the program
  participant.
         (c)  The commission shall pay from the fund the costs
  associated with the plugging, remediation, or reclamation of an
  orphaned well that exceed the limitation described by Subsection
  (a), other than costs described by Subsection (b).
         Sec. 89.110.  LIABILITY. A program participant does not
  incur any liability through participation in the program other
  than:
               (1)  the duty to plug, remediate, or reclaim to
  commission standards an orphaned well they have taken control of
  through the program; and
               (2)  the repayment of a loan provided through the
  program.
         Sec. 89.111.  REPAYMENT OF LOAN; FORM OF PAYMENT. (a) The
  commission shall establish the terms and conditions of the
  repayment of any money from the fund loaned to a program
  participant.
         (b)  A program participant may pay any money owed to the
  commission in Bitcoin. 
         Sec. 89.112.  ANNUAL REPORT. A program participant shall
  submit to the commission an annual report documenting progress on
  the plugging, remediation, or reclamation of the orphaned well that
  was the subject of the participant's selected bid.
         Sec. 89.113.  DUTY TO PLUG. After the termination of the
  period established in the bid, a program participant shall plug,
  remediate, or reclaim the orphaned well using a service approved by
  the commission.
         Sec. 89.114.  THIRD-PARTY AGREEMENTS. A program participant
  may enter into an agreement with a third party to facilitate the
  transfer of oil from an orphaned well to market.
         Sec. 89.115.  ASSUMPTION OF OWNERSHIP. (a) At the end of
  the agreed-upon mining period, a program participant may take legal
  ownership of the orphaned well as otherwise provided by law.
         (b)  A program participant who intends to take ownership of
  an orphaned well that is part of the program shall send notice to
  the commission not later than 12 months before the well is scheduled
  to be plugged, remediated, or reclaimed.
         (c)  Assumption of ownership under this section does not
  remove the responsibility of a program participant to plug,
  remediate, or reclaim the orphaned well.
         Sec. 89.116.  CONFLICT WITH OTHER LAW. This subchapter
  prevails to the extent of any conflict with another provision of
  this chapter.
         SECTION 2.  This Act takes effect September 1, 2023.