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A BILL TO BE ENTITLED
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AN ACT
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relating to financial assurance requirements for operators under |
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the jurisdiction of the Railroad Commission of Texas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 91, Natural Resources Code, is amended |
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by adding Section 91.115 to read as follows: |
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Sec. 91.115. FINANCIAL ASSURANCE REQUIREMENTS FOR |
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OPERATORS. (a) The Railroad Commission shall accept financial |
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assurance mechanisms, including but not limited to, self-insurance |
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and parental bonding, to demonstrate an operator’s ability to |
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satisfy financial security obligations for the operation and |
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closure of produced water recycling pits and other related |
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facilities. |
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(b) An operator that owns or controls multiple subsidiaries |
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operating under separate P-5 organization reports may satisfy |
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financial security requirements through a single consolidated |
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bond, subject to a demonstration of financial adequacy to the |
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Commission. |
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(c) The Railroad Commission shall develop and implement a |
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system allowing operators to submit an annual report identifying |
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facilities covered under specific bonding mechanisms and ensuring |
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financial responsibility is properly assigned when assets are |
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transferred through mergers, acquisitions, or sales. |
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(d) The Commission shall adopt rules necessary to implement |
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this section, including but not limited to establishing: |
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(1) criteria for demonstrating financial adequacy for |
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self-insurance and parental bonding; |
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(2) requirements for the submission and approval of |
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consolidated bonding structures for multiple P-5 operators; and |
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(3) procedures for tracking and assigning financial |
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responsibility when transactions result in changes of ownership. |
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(e) Nothing in this section shall diminish the authority of |
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the Railroad Commission to require additional financial security in |
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cases where the commission determines that an operator’s financial |
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assurance is insufficient to cover potential closure and |
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remediation costs. |
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SECTION 2. The Railroad Commission shall adopt rules to |
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implement Section 91.115, Natural Resources Code, as added by this |
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Act, no later than December 31, 2025. |
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SECTION 3. This Act takes effect September 1, 2025. |