| (3) A transfer of a well or lease from one entity to
another entity under common ownership is a transfer for the purposes
of this section.
(4) The Commission may approve a transfer of operatorship
submitted for any well bore included in a well-specific plugging insurance
policy if the transfer meets all other Commission requirements.
(k) Reimbursement liability. Filing any form of financial
security does not extinguish a person's liability for reimbursement
for the expenditure of state oilfield clean-up funds pursuant to Texas
Natural Resources Code, §89.083 and 91.113.
(l) Financial security for commercial facilities. The
provisions of this subsection shall apply to the holder of any permit
for a commercial facility.
(1) Application.
(A) New permits. Any application for a new or amended
commercial facility permit filed after the original effective date
of this subsection shall include:
(i) a written estimate of the maximum dollar amount
necessary to close the facility prepared in accordance with the provisions
of paragraph (4) of this subsection that shows all assumptions and
calculations used to develop the estimate;
(ii) a copy of the form of the bond or letter of credit
that will be filed with the Commission; and
(iii) information concerning the issuer of the bond
or letter of credit as required under paragraph (5) of this subsection
including the issuer's name and address and evidence of authority
to issue bonds or letters of credit in Texas.
(B) Existing permits. Within 180 days of the original
effective date of this subsection, the holder of any commercial facility
permit issued on or before the original effective date of this subsection
shall file with the Commission the information specified in subparagraph
(A)(i) - (iii) of this paragraph.
(2) Notice and hearing.
(A) New permits. For commercial facility permits issued
after the original effective date of this subsection, the provisions
of §3.8 or §3.57 of this title (relating to Water Protection;
and Reclaiming Tank Bottoms, Other Hydrocarbon Wastes, and Other Waste
Materials), as applicable, regarding notice and opportunity for hearing,
shall apply to review and approval of financial security proposed
to be filed to meet the requirements of this subsection.
(B) Existing permits. Notice of filing of information
required under paragraph (1)(B) of this subsection shall not be required.
In the event approval of the financial security proposed to be filed
for a commercial facility operating under a permit in effect as of
the original effective date of this subsection is denied administratively,
the applicant shall have the right to a hearing upon written request.
After hearing, the examiner shall recommend a final action by the
Commission.
(3) Filing of instrument.
(A) New permits. A commercial facility permitted after
the original effective date of this subsection may not receive oil
field fluids or oil and gas waste until a bond or letter of credit
in an amount approved by the Commission or its delegate under this
subsection and meeting the requirements of this subsection as to form
and issuer has been filed with the Commission.
(B) Existing permits. Except as otherwise provided
in this subsection, after one year from the original effective date
of this section, a commercial facility permitted on or before the
original effective date of this subsection may not continue to receive
oil field fluids or oil and gas waste unless a bond or letter of credit
in an amount approved by the Commission or its delegate under this
subsection and meeting the requirements of this subsection as to form
and issuer has been filed with and approved by the Commission or its
delegate.
(C) Extensions for existing permits. On written request
and for good cause shown, the Commission or its delegate may authorize
a commercial facility permitted before the original effective date
of this subsection to continue to receive oil field fluids or oil
and gas waste after one year after the original effective date of
this section even though financial security required under this subsection
has not been filed. In the event the Commission or its delegate has
not taken final action to approve or disapprove the amount of financial
security proposed to be filed by the owner or operator under this
subsection one year after the original effective date of the section,
the period for filing financial security under this subsection is
automatically extended to a date 45 days after such final Commission
action.
(4) Amount.
(A) Except as provided in subparagraphs (B) or (C)
of this paragraph, the amount of financial security required to be
filed under this subsection shall be an amount based on a written
estimate approved by the Commission or its delegate as being equal
to or greater than the maximum amount necessary to close the commercial
facility, exclusive of plugging costs for any well or wells at the
facility, at any time during the permit term in accordance with all
applicable state laws, Commission rules and orders, and the permit,
but shall in no event be less than $10,000.
(B) The owner or operator of one or more commercial
facilities may reduce the amount of financial security required under
this subsection for one such facility by the amount, if any, it filed
as financial security under subsection (g)(6) of this section. The
full amount of financial security required under subparagraph (A)
of this paragraph shall be required for the remaining commercial facilities.
(C) Except for the facilities specifically exempted
under subparagraph (D) of this paragraph, a qualified professional
engineer licensed by the State of Texas shall prepare or supervise
the preparation of a written estimate of the maximum amount necessary
to close the commercial facility as provided in subparagraph (A) of
this paragraph. The owner or operator of a commercial facility shall
submit the written estimate under seal of a qualified licensed professional
engineer to the Commission as required under paragraph (1) of this
subsection.
(D) A facility permitted under §3.57 of this title
(relating to Reclaiming Tank Bottoms, Other Hydrocarbon Wastes, and
Other Waste Materials) that does not utilize on-site waste storage
or disposal that requires a permit under §3.8 of this title (relating
to Water Protection) is exempt from subparagraph (C) of this paragraph.
(E) Notwithstanding the fact that the maximum amount
necessary to close the commercial facility as determined under this
paragraph is exclusive of plugging costs, the proceeds of financial
security filed under this subsection may be used by the Commission
to pay the costs of plugging any well or wells at the facility if
the financial security for plugging costs filed with the Commission
is insufficient to pay for the plugging of such well or wells.
(5) Issuer and form.
(A) Bond. The issuer of any commercial facility bond
filed in satisfaction of the requirements of this subsection shall
be a corporate surety authorized to do business in Texas. The form
of bond filed under this subsection shall provide that the bond be
renewed and continued in effect until the conditions of the bond have
been met or its release is authorized by the Commission or its delegate.
(B) Letter of credit. Any letter of credit filed in
satisfaction of the requirements of this subsection shall be issued
by and drawn on a bank authorized under state or federal law to operate
in Texas. The letter of credit shall be an irrevocable, standby letter
of credit subject to the requirements of Texas Business and Commerce
Code, §§5.101-5.118. The letter of credit shall provide
that it will be renewed and continued in effect until the conditions
of the letter of credit have been met or its release is authorized
by the Commission or its delegate.
(m) Effect of outstanding violations.
(1) Except as provided in paragraph (2) of this subsection,
the Commission shall not accept an organization report or an application
for a permit or approve a certificate of compliance for an oil lease
or gas well submitted by an organization if:
(A) the organization has outstanding violations; or
(B) an officer or owner of the organization, as defined
in subsection (a) of this section, was, within seven years preceding
the filing of the report, application, or certificate, an officer
or owner of an organization and during that period, the organization
committed a violation that remains an outstanding violation.
(2) The Commission shall accept a report or application
or approve a certificate filed by an organization covered by paragraph
(1) of this subsection if:
(A) the conditions that constituted the violation have
been corrected or are being corrected in accordance with a schedule
agreed to by the organization and the Commission;
Cont'd... |
