Part 1.
RAILROAD COMMISSION OF TEXAS
Chapter 3.
OIL AND GAS DIVISION
16 TAC §3.78
The Railroad Commission of Texas proposes to amend §3.78,
relating to Fees, Performance Bonds and Alternate Forms of Financial Security
Required To Be Filed.
The Commission proposes the amendments to §3.78 under the provisions
of Texas Natural Resources Code, §85.167, which specifies fees to be
collected by the Commission for reissuance of certificates of compliance for
oil leases and gas wells which have been canceled; Texas Natural Resources
Code, §91.142, which specifies organization report fees; Texas Natural
Resources Code, §91.109, as amended by House Bill (HB) 942, 78th Legislature
Regular Session (2003), which relates to bonds, letters of credit, cash deposits
and alternate forms of financial security; and Texas Natural Resources Code, §91.114,
as amended by Senate Bill (SB) 1484, 78th Legislature Regular Session (2003),
which relates to acceptance of organization reports or applications for permits
and approval of certificates of compliance.
The proposed amendments to §3.78(a) add new paragraphs (11) through
(13) to provide definitions of "officers and owners," "letter of credit,"
and "bond," as these terms are used in 3.78. The proposed amendments conform
the current definition of "officers and owners" in §3.78(e)(1) to the
statutory definition in Texas Natural Resources Code, §91.114(c)(2),
by adding to the current definition any person determined by a final judgment
or final administrative order to have exercised control over an organization.
The proposed fee change amendments to §3.78(b) and (c) implement statutory
changes made to the Texas Natural Resources Code by HB 1195 and HB 942, 78th
Legislature (2003).
Proposed amendments to §3.78(b) increase the fee for reissuance of
a certificate of compliance for an oil lease or gas well that previously has
been canceled from $100 to $300 for each severance or seal order issued for
the lease or well. Proposed amendments to §3.78(b) also provide that
if a check for this fee is not honored upon presentment, the reissued certificate
of compliance may be suspended or revoked.
Proposed amendments to §3.78(c) increase fees from $100 to $225 for
filing an organization report by an operator of one or more natural gas pipelines.
The amendments to §3.78(c) also establish a separate organization report
fee category for operators of one or more liquids pipelines and increase the
organization report fee for such operators from $500 to $625. The amendments
to §3.78(c) clarify that the total organization report fee that must
be submitted is a fee equal to the sum of the separate fees applicable to
each category of service activity, facility, pipeline, or number of wells
operated, and increase the maximum amount of organization report fees that
must be submitted by an operator of wells from $1,000 to $1,125.
The proposed fee change amendments are necessary to conform §3.78
to increased fees prescribed or authorized by HB 1195 and HB 942, 78th Legislature
Regular Session (2003), and to clarify existing provisions relating to organization
report fees. The increased fees implemented by the proposed amendments will
financially strengthen the Oil Field Clean Up Fund (OFCUF) and assist in plugging
of abandoned wells and cleanup of pollution.
Proposed amendments to §3.78(e) delete paragraph (1) defining "officers
and owners" because an amended definition of "officers and owners" is included
in the proposed amendments to §3.78(a).
The proposed amendments to §3.78(j) pertain to the amount of bonds,
letters of credit, or cash deposits that must be filed by persons filing one
of these forms of financial security. These amendments implement the provisions
of HB 942, 78th Legislature Regular Session (2003). The proposed amendments
to §3.78(j) eliminate the requirement for a person whose only activity
is as a first purchaser, survey company, salt water hauler, gas nominator,
gas purchaser, or well plugger to file financial security. The proposed amendments
to §3.78(j) also clarify that a person who engages in more than one Commission
regulated activity or operation is not required to file a separate bond or
alternate form of financial security for each activity or operation. Under
the proposed amendments, a person with multiple activities or operations is
required to file a bond or alternate form of financial security in the greatest
amount applicable to any of its activities or operations, except that a separate
bond must be filed for commercial facilities activities subject to the financial
security requirements of §3.78(p).
The proposed amendments also eliminate the current provision that the owner
or operator of a commercial facility may reduce the amount of financial security
required under §3.78(p) by $25,000 if the owner or operator holds only
one commercial facility permit. This amendment is necessary because the provision
being eliminated assumes that the operator of the commercial facility is required
to file a bond in the amount of $25,000 under other provisions of §3.78,
when in fact the amount of financial security required under other provisions
may be a lesser amount. The proposed amendments in §3.78(p) clarify that
the owner or operator of one or more commercial facilities may reduce the
amount of financial security required under §3.78(p) for one such facility
by the amount, if any, it filed as financial assurance under §3.78(j)(3).
These amendments to §3.78(p) are necessary to ensure that operators of
commercial facilities have adequate financial security on file to cover commercial
facilities operations.
Proposed new subsection (q) relates to the effect of outstanding violations.
These proposed amendments conform §3.78 to changes made to Texas Natural
Resources Code, §91.114(a)(2), by SB 1484. Proposed new subsection (q)
provides that 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 the organization has outstanding
violations, or if an officer or director of the organization was, within seven
years preceding the filing of the report, application, or certificate, an
officer or director of an organization and during that period, the organization
committed a violation that remains an outstanding violation.
Proposed §3.78(q) also creates an exception to the general prohibition
against accepting specified filings from an operator with outstanding violations
by providing that the Commission shall accept a report or application or approve
a certificate of an organization if 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; all administrative, civil, and
criminal penalties and all plugging and cleanup costs incurred by the state
relating to those conditions have been paid or are being paid in accordance
with a schedule agreed to by the organization and the Commission; and the
report, application, or certificate is in compliance with all other requirements
of law and Commission rules. Proposed §3.78(q) also provides that all
fees tendered in connection with a report or application that is rejected
under §3.78(q) are nonrefundable.
Leslie Savage, Administrative Planner, Planning and Administration, Oil
and Gas Division has determined that for the first year of the first five
years the proposed amendments will be in effect, there will be no net fiscal
implications for state government as a result of enforcing or administering
the amendments. The fee increases implemented by the proposed amendments will
be deposited into the OFCUF as mandated by Texas Natural Resources Code, §91.111.
Ms. Savage estimates that the proposed amendments implementing statutory changes
will increase the revenue to the OFCUF by approximately $1.8 million in fiscal
year 2004 and $1.67 million in fiscal years 2005 through 2008. The increased
revenue to the OFCUF will be used to cover the cost of plugging additional
abandoned wells and for the cleanup of pollution.
The Commission anticipates that the statutory increase in the fee to reissue
a certificate of compliance that has been canceled as a result of violations
will encourage operators to come into compliance in a more timely manner,
thus reducing the amount of Commission field staff time and resources to achieve
compliance. Currently, an operator can allow a lease to acquire multiple severance
orders, but is required only to pay $100 to have the certificate of compliance
reinstated once all rule violation issues have been resolved. If a lease has
been severed by multiple sections of the Oil and Gas Division, then each of
those sections must verify compliance and resolve cancellation issues. At
times, this verification and resolution also requires a lease inspection.
It is therefore appropriate that the fees required for reissuance of the certificate
of compliance reflect the existence of multiple violations. Raising the reinstatement
fee and charging for multiple severances on the same lease or well, as required
by HB 1195, will encourage more timely compliance with the violation notices
that precede imposition of a severance.
During the first year of implementation of the proposed amendments (fiscal
year 2004), the Commission will expend money from the increased revenues for
relatively minor document revision, process analysis, and computer programming
to implement new fees and changes to financial security requirements. The
Commission anticipates that the statutory increase in the fee for reissuance
of a certificate of compliance that has been canceled as a result of violations
will encourage operators to come into compliance in a more timely manner,
thus reducing the amount of Commission field staff time and resources to achieve
compliance. The Commission believes these reductions in staff time and resources
will offset the relatively small incremental expense of the proposed amendments
in the first year of implementation. Any incremental increase in expenditures
by the Commission for the first year of implementation will be funded through
the OFCUF. As incremental expenditures decrease in subsequent years, increased
revenues generated by the fee increases implemented by the proposed amendments
will be available for well plugging and cleanup activity.
There will be no fiscal effect on local governments.
Texas Government Code, §2006.002, requires a state agency considering
adoption of a rule that would have an adverse economic effect on small businesses
or micro-businesses to reduce the effect if doing so is legal and feasible
considering the purpose of the statutes under which the rule is to be adopted.
Before adopting a rule that would have an adverse economic effect on small
businesses, a state agency must prepare a statement of the effect of the rule
on small businesses, which must include an analysis of the cost of compliance
with the rule for small businesses and a comparison of that cost with the
cost of compliance for the largest businesses affected by the rule, using
cost for each employee, cost for each hour of labor, or cost for each $100
of sales.
Ms. Savage has estimated that the cost of compliance with the proposed
amendments to §3.78 (b) and (c) for individuals, small businesses, or
micro-businesses will be an increase in the fees for filing organization reports
and fees for reissuance of certificates of compliance that have been canceled.
The fee increases contained in the proposed amendments are statutory and
reflect recent amendments to statutes enacted by the 78th Legislature Regular
Session (2003). The statutory provisions make no distinction in fees required
to be paid based on an operator's status as an individual, small business,
or micro-business. Because these fees are statutory, the Commission does not
have authority to change the amount of the fees or to create exceptions to
the imposition of the fees. The only fee for which the Commission has discretion
is the organization report fee for operators of liquids pipelines, for which
HB 942 authorized the Commission to charge a fee of not less than $425 or
more than $625. The current organization report fee for operators of liquids
pipelines is $500, and the proposed $125 increase is consistent with other
proposed fee increases required by statute.
The proposed fee increase for reissuance of a certificate of compliance
that previously has been canceled is in the amount of $200, assuming one severance
or seal order. The proposed increase in the organization report fee for natural
gas pipelines and liquids pipelines and the proposed increase in the aggregate
organization report fee that must be paid by well operators who also have
other activities is, in each case, $125.
Because operators are not required to make filings with the Commission
reporting number of employees, labor costs, amount of sales, or gross receipts,
the Commission cannot determine whether a particular operator may be a small
business or a micro- business. However, the Commission has determined that
it is likely that some operators would meet the definitions of these terms
in Texas Government Code, §2006.001. Assuming that an individual, small
business, or micro-business operator incurs, during a given year, an additional
$200 in fees for reissuance of a certificate of compliance, the annual cost
of the proposed increase to such an entity would be $200 per employee if the
entity has one employee, $10 per employee if the entity has 20 employees,
and $2.02 per employee if the entity has 99 employees. Operators may avoid
this fee by complying with Commission rules.
Assuming that an individual, small business, or micro-business operator
incurs, during a given year, an additional $125 in organization report fees,
the annual cost of the proposed increase to such an entity would be $125 per
employee if the entity has one employee, $6.25 per employee if the entity
has 20 employees, and $1.26 per employee if the entity has 99 employees.
Comparable annual cost per employee of the proposed increase for the largest
businesses affected by the proposed amendments required to pay one increased
fee for reissuance of a certificate of compliance would be $0.40 for an employer
of 500 persons and $0.20 for an employer of 1,000 persons. Assuming a requirement
to pay one increased organization report fee during a given year, the annual
cost per employee of the proposed increase would be $0.25 for an employer
of 500 persons and $0.12 for an employer of 1,000 persons.
The number of wells operated, production, and gross receipts of small business
and micro-business operators vary greatly from operator to operator. Most
small business and micro-business operators have wells that are marginal producers.
The Commission cannot specifically identify the universe of small business
and micro-business operators from records maintained by the Commission, for
the purpose of relating cost of compliance with the proposed amendments to
the factors listed in Texas Government Code, §2006.002(c)(2).
The Commission has determined that most, if not all, applications filed
with the Commission since September 1, 2001, for approval to file the nonrefundable
annual fee of $1,000 as financial security have been filed by operators in
the small business or micro-business categories. Based on experience derived
from processing these applications and production reports filed with the Commission
for 2002, the Commission estimates that the average micro-business operator
who has filed such an application produces about 4,000 barrels of oil annually.
Using the 2002 average domestic first purchase price of $21.84 per barrel
of oil, 4,000 barrels of annual production generates gross sales of $87,360.
Assuming that the average micro-business operator incurs, during a given
year, an additional $200 in fees for reissuance of a certificate of compliance
as a result of the proposed fee change amendments, the cost of compliance
to the operator would be about $0.23 per $100 of gross sales. It is not likely
that micro-business operators will be affected by the proposed $125 increases
in the organization report fee for operators of natural gas pipelines and
liquids pipelines and the maximum organization report fee required of well
operators with multiple Commission regulated activities.
Assuming further that the average small business operator has annual production
and gross sales five times greater than the average micro-business producer,
the cost of compliance to the average small business operator resulting from
the need to pay, during a given year, an additional $200 in fees for reissuance
of a certificate of compliance would be slightly more than $0.04 per $100
of gross sales. If the same small business operator were required to pay,
during a given year, an additional $125 in organization report fees, the cost
of compliance would be slightly less than $0.03 per $100 of gross sales. If
a small business operator is an operator of one or more liquids pipelines
as well as an operator of other service activities or facilities, the proposed
establishment of a separate organization report fee category for operators
of liquids pipelines could result in an increase in total organization report
fees of up to $625 annually. Based on the same assumed annual sales for the
average small business operator, the cost of compliance would be $0.14 per
$100 of gross sales.
The Commission does not have information regarding the gross sales of the
largest operators affected by the proposed fee change amendments, most of
whom have operations beyond the state. For comparative purposes, however,
the cost of compliance with the proposed fee change amendments to these large
operators would be a fraction of one cent per $100 of gross sales.
Ms. Savage has determined that there will be no cost of compliance with
the proposed amendments in §3.78(j)(4) exempting certain classes of operators
from financial security requirements. For these classes of operators the current
cost of compliance with current financial security requirements will be eliminated
by the proposed amendments. These amendments are necessary to implement changes
in financial security requirements in Texas Natural Resources Code, §91.109,
made by HB 942, effective September 1, 2003.
Proposed new subsection (q) to §3.78 implements the provisions of
Texas Natural Resources Code, §91.114(a), as amended by SB 1484. The
statutory provisions apply without regard to whether an organization is a
small business or micro- business. The Commission is without authority to
exclude small businesses and micro-businesses from the application of these
provisions.
Ms. Savage has also determined that there will be no cost of compliance
with any of the clarifying amendments. These amendments reflect current Commission
practices and policies and do not impose different or additional obligations
on operators. The nature of the proposed amendments to §3.78 is such
that they will not have a materially adverse net economic effect on individual,
small business, or micro-business operators.
James M. Doherty, Hearings Examiner, Oil and Gas Section, Office of General
Counsel, has determined that for each year of the first five years that the
amended section will be in effect, the public benefit will be the implementation
of fee changes required or authorized by the Legislature, which will assist
the Commission in plugging of abandoned wells and cleanup of pollution. The
public will also benefit from elimination of the regulatory and financial
burden of posting financial security by certain classes of non-well operators
whose operations pose no significant risk to usable quality surface or subsurface
water. The public will also benefit from the clarifying amendments because
the rule will be more understandable and reflective of current Commission
policies and practices.
Comments may be submitted to Rules Coordinator, Office of General Counsel,
Railroad Commission of Texas, P. O. Box 12967, Austin, Texas 78711-2967; online
at www.rrc.state.tx.us/rules/commentform.html; or by electronic mail to rulescoordinator@rrc.state.tx.us.
The Commission will accept comments for 21 days after publication in the
The Commission proposes the amendments to §3.78 pursuant
to Texas Natural Resources Code, §§81.051, 81.052, 85.042, 85.201,
85.202, 86.041, 86.042, 91.101,141.011, and 141.012, which provide the Commission
with jurisdiction over all persons owning or engaged in drilling or operating
oil, gas or geothermal wells, persons owning or operating pipelines, and persons
engaged in other service activities related to production, storage, transportation
or distribution of oil and gas or oil and gas wastes, and the authority to
adopt all necessary rules for governing and regulating persons and their operations
under the jurisdiction of the Commission; and pursuant to Texas Government
Code, §2001.006, which authorizes the Commission to promulgate rules
that implement legislation that has become law but has not taken effect.
Statutory authority: Texas Natural Resources Code, §§81.051,
81.052, 85.042, 85.167, 85.201, 85.202, 86.041, 86.042, 91.101, 91.103, 91.104,
91.1042, 91.109, 91.114, 91.142, 141.011, and 141.012.
Cross-reference to statute: Texas Natural Resources Code, Chapters 81,
85, 86, 91, and 141.
Issued in Austin, Texas on July 8, 2003.
§3.78.Fees, Performance Bonds and Alternate Forms of Financial Security Required To Be Filed.
(a)
Definitions. The following words and terms, when used in
this section, shall have the following meanings, unless the context clearly
indicates otherwise:
(1) - (10)
(No change.)
(11)
Officers and owners--Any persons
owning or controlling an organization including officers, directors, general
partners, sole proprietors, owners of more than 25% ownership interest, any
trustee of an organization, and any person determined by a final judgment
or final administrative order to have exercised control over the organization.
(12)
Letter of credit--An irrevocable
letter of credit issued:
(A)
on a Commission-approved form;
(B)
by and drawn on a third party bank authorized
under state or federal law to do business in Texas; and
(C)
renewed and continued in effect until the conditions
of the letter of credit have been met or its release is approved by the Commission
or its authorized delegate.
(13)
Bond--A surety instrument
issued:
(A)
on a Commission-approved form;
(B)
by and drawn on a third party corporate surety
authorized under state law to issue surety bonds in Texas; and
(C)
renewed and continued in effect until the conditions
of the bond have been met or its release is approved by the Commission or
its authorized delegate.
(b)
Filing fees. The following filing fees are required to
be paid to the Railroad Commission.
(1)
(No change.)
(2)
An application for a permit to drill, deepen, plug back,
or reenter a well will be considered materially amended if the amendment is
made for a purpose other than:
(A)
to add omitted required information;
(B)
to correct typographical errors;
or
(C)
to correct clerical errors.
(3) - (9)
(No change.)
(10)
If a certificate of compliance
for an oil lease or
gas well
has been canceled, the operator shall submit to the Commission
a nonrefundable fee of
$300 for each severance or seal order issued for
the well or lease
[
(11) - (13)
(No change.)
(14)
A check or money order for any of the aforementioned fees
shall be made payable to the Railroad Commission of Texas. If the check accompanying
an application is not honored upon presentment, the permit issued on the basis
of that application, the allowable assigned, the exception to a statewide
rule granted on the basis of the application, the extension of time to plug
a well,
the certificate of compliance reissued,
or the Natural
Gas Policy Act category determination made on the basis of the application
may be suspended or revoked.
(15)
(No change.)
(c)
Organization Report Fee. An organization report required
by Texas Natural Resources Code, §91.142, shall be accompanied by a fee
as follows:
(1)
(No change.)
(2)
for an operator of one or more natural gas pipelines,
$225
[
(3)
(No change.)
(4)
for an operator of one or more
liquids pipelines, $625;
(5)
[
(6)
for an operator with multiple
activities, a total fee equal to the sum of the separate fees applicable to
each category of service activity, facility, pipeline, or number of wells
operated shall be submitted, provided that the total fee for an operator of
wells shall not exceed $1,125; and
[
(7)
[
(d)
(No change.)
(e)
Eligibility for nonrefundable $1,000 fee.
[
(1)
[
(2)
[
(3)
[
(4)
[
(5)
[
(A)
the existing record of compliance for each entity that
is a party to the merger qualifies;
(B)
the records of compliance for the officers and owners of
the surviving or new entities qualify; and
(C)
the number of surviving or new entities eligible does not
exceed the number of parties registered with the Commission at the time of
the merger.
(6)
[
(f) - (i)
(No change.)
(j)
Amount of bond, letter of credit, or cash deposit.
(1)
(No change.)
(2)
A person operating wells may file a blanket bond, letter
of credit or cash deposit to cover all wells for which a bond, letter of credit
or cash deposit is required in an amount equal to the sum of:
(A)
A base amount determined by the total number of wells operated,
as follows:
(i)
a person who operates 10 or fewer wells [
(ii) - (iii)
(No change.)
(B) - (C)
(No change.)
(3)
A person [
(4)
No bond, letter of credit,
cash deposit or alternate form of financial security is required of a person
who is not an operator of wells if the person's only activity is as a first
purchaser, survey company, salt water hauler, gas nominator, gas purchaser
and/or well plugger.
(5)
A person who engages in more
than one activity or operation, including well operation, for which a bond
or alternate form of financial security is required is not required to file
a separate bond or alternate form of financial security for each activity
or operation in which the person is engaged. The person is required to file
a bond or alternate form of financial security only in the amount required
for the activity or operation in which the person engages for which a bond
or alternate form of financial security in the greatest amount is required.
The bond or alternate form of financial security filed covers all of the activities
and operations for which a bond or alternate form of financial security is
required. The provisions of this paragraph do not exempt a person from the
financial security required under subsection (p) of this section.
(6)
[
(k) - (o)
(No change.)
(p)
Financial security for commercial facilities. The provisions
of this subsection shall apply to the holder of any permit for a commercial
facility.
(1) - (3)
(No change.)
(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)
[
(C)
[
(D)
[
(E)
[
(5)
(No change.)
(q)
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 director of the organization was,
within seven years preceding the filing of the report, application, or certificate,
an officer or director 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 section 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;
(B)
all administrative, civil, and criminal penalties
and all plugging and cleanup costs incurred by the state relating to those
conditions have been paid or are being paid in accordance with a schedule
agreed to by the organization and the Commission; and,
(C)
the report, application or certificate is in
compliance with all other requirements of law and Commission rules.
(3)
All fees tendered in connection with a report
or application that is rejected under this subsection are nonrefundable.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State on July 8, 2003.
TRD-200304125
Mary Ross McDonald
Deputy General Counsel
Railroad Commission of Texas
Earliest possible date of adoption: August 17, 2003
For further information, please call: (512) 475-1295
Subchapter C. REQUIREMENTS FOR NATURAL GAS PIPELINES ONLY
$100
] before the Commission may reissue
the certificate pursuant to §3.58 of this title (relating to Oil, Gas,
or Geothermal Resource Producer's Reports) (Statewide Rule 58).
$100
];
(4)
] for an operator of all other
service activities or facilities, [
including liquids pipelines,
]
$500;
(5)
for an operator of wells who
also operates one or more service activities, facilities, or pipelines as
classified by the Commission, the sum of the fees that would be separately
charged for each category of service activity, facility, pipeline, or number
or wells operated, provided that such fee shall not exceed $1,000; or ]
(6)
] for an entity not currently
performing operations under the jurisdiction of the Commission, $300.
(1)
For the purposes of this subsection,
"officers and owners" include directors, general partners, owners of more
than 25% ownership interest, or any trustee of an organization.]
(2)
] A person filing an organization
report for the first time in order to perform any Commission-regulated operations
is a new organization and is not eligible to file the nonrefundable fee of
$1,000.
(3)
] A person who filed an initial
organization report less than 48 months prior to the current filing is not
eligible to file the nonrefundable fee of $1,000.
(4)
] A change in name, without any
other organizational change, of a person registered with the Commission does
not indicate a new organization. If the Commission determines that only a
name change has occurred, then a person operating under a new name may file
the nonrefundable fee of $1,000 if the person meets all other eligibility
requirements.
(5)
] An individual registered with
the Commission as a sole proprietor or who is a general partner of a partnership
that is registered with the Commission and who reorganizes his or her oil
and gas operations under a new legal entity or establishes a new and separate
entity will be considered to have satisfied the 48-month eligibility requirement
for filing the nonrefundable fee of $1,000.
(6)
] A surviving or new corporation
or other entity resulting from a merger under the Texas Business Corporation
Act, Part Five, may file the nonrefundable fee of $1,000 if:
(7)
] In any Commission enforcement
proceeding, if a person is determined not to be the responsible party for
a violation and is dismissed from the proceeding for that reason, that violation
shall not be considered in determining whether that person has an acceptable
record of compliance.
or performs
other operations
] shall have a base amount of $25,000;
operating wells and
] performing other
operations
who is not an operator of wells and who is not a person whose
only activity is as a first purchaser, survey company, salt water hauler,
gas nominator, gas purchaser or well plugger choosing
[
, who chooses
] to cover all operations by a blanket performance bond, letter of credit
or cash deposit shall file a bond, letter of credit or cash deposit in
the amount of $25,000
[
an amount determined by the total number
of wells, but not less than $25,000. Only one blanket performance bond, letter
of credit or cash deposit is required for a person performing multiple operations,
unless the person is operating a commercial facility subject to the financial
security requirements of subsection (p) of this section
].
(4)
] Financial security amounts
are the minimum amounts required by this section to be filed. A person may
file a greater amount if desired.
(B)
The owner or operator of a
commercial facility may reduce the amount of financial security required under
this subsection by $25,000 if the owner or operator holds only one commercial
facility permit.]
(C)
] The owner or operator of
one or
more [
than one
] commercial
facilities
[
facility
] may reduce the amount of financial security required under
this subsection for one such facility by
the amount, if any, it filed
as financial assurance under subsection (j)(3) of this section
[
$25,000
]. The full amount of financial security required under subparagraph
(A) of this paragraph shall be required for the remaining commercial facilities.
(D)
] Except for the facilities specifically
exempted under subparagraph
(D) of this paragraph
[
(E)
],
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.
(E)
] 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)
[
(D)
]
of this paragraph.
(F)
] 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.
Chapter 8.
PIPELINE SAFETY REGULATIONS