By: Davis S.B. No. 1873
A BILL TO BE ENTITLED
AN ACT
relating to the creation and funding of the well inspection fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter D, Chapter 91, Natural Resources
Code, is amended by adding Section 91.118 to read as follows:
Sec. 91.118. WELL INSPECTION FUND. (a) The well
inspection fund is created as a special fund in the state treasury.
(b) The fund consists of fees collected under:
(1) Section 81.0521;
(2) Section 81.117;
(3) Section 85.2021;
(4) Section 91.142;
(5) Section 91.605; and
(6) Section 91.707.
(c) Money in the fund may be appropriated only to the
commission to inspect oil and gas wells and related equipment,
tanks, and other facilities.
(d) The commission shall create a subaccount in the fund for
each oil or gas field in this state and shall deposit to the credit
of each subaccount the portion of the fees dedicated to the account
that are derived from activities conducted in connection with that
field. Money in a subaccount may be used only by the commission to
inspect oil and gas wells and related equipment, tanks, and other
facilities in the oil or gas field for which the subaccount is
established.
SECTION 2. Subchapter C, Chapter 81, Natural Resources
Code, is amended by adding Section 81.065 to read as follows:
Sec. 81.065. INSPECTION COSTS; FEES. (a) Not later than
August 1 of each year, the commission shall determine the estimated
cost of inspecting each oil and gas well and related equipment,
tanks, and other facilities in each oil or gas field in this state
during the next fiscal year. In determining the estimated cost of
inspecting each oil and gas well and related equipment, tanks, and
other facilities in each oil or gas field, the commission shall
consider:
(1) the number of complaints received, actions taken,
and penalties imposed by the commission during that fiscal year
that were associated with activities conducted in connection with
the field;
(2) the number of times the commission has charged the
maximum daily penalty to operators in the field for violations
associated with activities conducted in connection with the field;
and
(3) the total resources necessary to inspect oil and
gas wells and related equipment, tanks, and other facilities in the
field, including:
(A) employees; and
(B) vehicles and other equipment.
(4) the number of oil and gas wells and related
equipment, tanks, and other facilities that have not been inspected
by the commission in the preceding 24 month period.
(b) Not later than August 31 of each year, the commission by
order shall determine the amount of each fee listed in Section
91.118(b). The amount of the fees must be sufficient to cover the
commission's estimated costs of inspecting each oil and gas well
and related equipment, tanks, and other facilities. The commission
may prescribe different fee amounts for a fee associated with
activities conducted in connection with different oil or gas fields
in this state as necessary to reflect differences in the costs of
conducting inspections in each field.
SECTION 3. Sections 81.0521(a) and (c), Natural Resources
Code, are amended to read as follows:
(a) With each application for an exception to any commission
rule contained in Chapter 3 of Part I of Title 16 of the Texas
Administrative Code, the applicant shall submit to the commission a
fee in the amount determined by the commission under Section 81.065
[of $150].
(c) Proceeds [Two-thirds of the proceeds] from the [this]
fee, including any penalties collected in connection with the fee,
shall be deposited to the well inspection [oil-field cleanup] fund
as provided by Section 91.118 [91.111].
SECTION 4. Section 81.056(g), Natural Resources Code, is
amended to read as follows:
(g) The commission may use money in the oil-field cleanup
fund to implement this section. [The amount of money in the fund
the commission may use for that purpose may not exceed the amount of
money in the fund that is derived from fees collected under Section
91.142 from common carriers or owners or operators of pipelines as
determined annually by the commission.]
SECTION 5. The heading to Section 81.117, Natural Resources
Code, is amended to read as follows:
Sec. 81.117. [OIL-FIELD CLEANUP REGULATORY FEE ON] GAS WELL
INSPECTION REGULATORY FEE.
SECTION 6. Sections 81.117(a), (c), (d), and (e), Natural
Resources Code, are amended to read as follows:
(a) A gas well inspection [An oil-field cleanup] regulatory
fee is imposed on gas initially produced and saved in this state in
the amount of one-fifteenth of one cent for each thousand cubic
feet.
(c) The [Except as provided by Subsection (d), the]
administration, collection, and enforcement of the fee is the same
as for the tax imposed under Section 201.052, Tax Code.
(d) [The comptroller shall suspend collection of the fee in
the manner provided by Section 91.111.] The exemptions and
reductions set out in Sections 201.053, 201.057, 201.058, and
202.060, Tax Code, do not affect the fee imposed by this section.
(e) Proceeds from the fee, including any penalties
collected in connection with the fee, shall be deposited to the well
inspection [oil-field cleanup] fund as provided by Section 91.118
[91.111 of this code].
SECTION 7. Section 85.2021, Natural Resources Code, is
amended to read as follows:
Sec. 85.2021. DRILLING PERMIT FEE. (a) With each
application or materially amended application for a permit to
drill, deepen, plug back, or reenter a well, the applicant shall
submit to the commission a nonrefundable fee in the amount
determined by the commission under Section 81.065 [of:
[(1) $200 if the total depth of the well is 2,000 feet
or less;
[(2) $225 if the total depth of the well is greater
than 2,000 feet but less than or equal to 4,000 feet;
[(3) $250 if the total depth of the well is greater
than 4,000 feet but less than or equal to 9,000 feet;
[(4) $300 if the total depth of the well is greater
than 9,000 feet]. The commission may base the fee on the total
depth of the well.
(b) An applicant shall submit an additional nonrefundable
fee in the amount determined by the commission under Section
81.065:
(1) [of $200] when requesting a Rule 37 spacing or a
Rule 38 density exception review; or
(2) [is requested.
[(c) An applicant shall submit an additional nonrefundable
fee of $150] when requesting that the commission expedite the
application for a permit to drill, deepen, plug back, or reenter a
well.
(c) [(d)] All fees collected under this section shall be
deposited in the well inspection [state oil-field cleanup] fund as
provided by Section 91.118.
SECTION 8. Sections 91.111(b) and (c), Natural Resources
Code, are amended to read as follows:
(b) The commission shall certify to the comptroller the date
on which the balance in the fund equals or exceeds $20 million. The
oil-field cleanup regulatory fee [fees] on oil [and gas] shall not
be collected or required to be paid on or after the first day of the
second month following the certification, except that the
comptroller shall resume collecting the fee [fees] on receipt of a
commission certification that the fund has fallen below $10
million. The comptroller shall continue collecting the fee [fees]
until collections are again suspended in the manner provided by
this subsection.
(c) The fund consists of:
(1) penalties imposed under Section 85.381 for
violation of a law, order, or rule relating to well plugging
requirements;
(2) proceeds from bonds and other financial security
required by this chapter and benefits under well-specific plugging
insurance policies described by Section 91.104(c) that are paid to
the state as contingent beneficiary of the policies, subject to the
refund provisions of Section 91.1091, if applicable;
(3) private contributions, including contributions
made under Section 89.084;
(4) expenses collected under Section 89.083;
(5) [fees imposed under Section 85.2021;
[(6)] civil penalties collected for violations of
Chapter 89 or of rules or orders relating to plugging that are
adopted under this code;
(6) [(7)] proceeds collected under Sections 89.085
and 91.115;
(7) [(8)] interest earned on the funds deposited in
the fund;
(8) [(9)] civil penalties or costs recovered under
Section 91.457 or 91.459;
(9) [(10)] oil and gas waste hauler permit application
fees collected under Section 29.015, Water Code;
(10) [(11)] costs recovered under Section 91.113(f);
(11) [(12) hazardous oil and gas waste generation
fees collected under Section 91.605;
[(13)] oil-field cleanup regulatory fees on oil
collected under Section 81.116;
(12) [(14) oil-field cleanup regulatory fees on gas
collected under Section 81.117;
[(15) fees for a reissued certificate collected under
Section 91.707;
[(16)] fees collected under Section 91.1013;
(13) [(17)] fees collected under Section 89.088;
(14) [(18)] penalties collected under Section
81.0531;
(15) [(19) fees collected under Section 91.142;
[(20)] fees collected under Section 91.654;
(16) [(21)] costs recovered under Sections 91.656 and
91.657;
(17) [(22) two-thirds of the fees collected under
Section 81.0521;
[(23)] fees collected under Sections 89.024 and
89.026; and
(18) [(24)] legislative appropriations.
SECTION 9. Section 91.142(g), Natural Resources Code, is
amended to read as follows:
(g) An organization report filed under this section must be
accompanied by a [the following] fee in the amount determined by the
commission under Section 81.065[:
[(1) for an operator of not more than 25 wells, $300;
[(2) for an operator of more than 25 but not more than
100 wells, $500;
[(3) for an operator of more than 100 wells, $1,000;
[(4) for an operator of one or more natural gas
pipelines as classified by the commission, $225;
[(5) for an operator of one or more service activities
or facilities who does not operate any wells, an amount determined
by the commission but not less than $300 or more than $500;
[(6) for an operator of one or more liquids pipelines
as classified by the commission who does not operate any wells, an
amount determined by the commission but not less than $425 or more
than $625;
[(7) for an operator of one or more service activities
or facilities, including liquids pipelines as classified by the
commission, who also operates one or more wells, an amount
determined by the commission based on the sum of the amounts
provided by the applicable subdivisions of this subsection but not
less than $425 or more than $1,125; and
[(8) for an entity not currently performing operations
under the jurisdiction of the commission, $300]. The commission
may base the fee for an operator of wells on the number of wells
operated. Proceeds from the fee, including any penalties collected
in connection with the fee, shall be deposited in the well
inspection fund as provided by Section 91.118.
SECTION 10. Section 91.605(e), Natural Resources Code, is
amended to read as follows:
(e) The fees collected under this section shall be deposited
in the well inspection [oil-field cleanup] fund as provided by
Section 91.118.
SECTION 11. Section 91.707, Natural Resources Code, is
amended to read as follows:
Sec. 91.707. FEE FOR REISSUED CERTIFICATE. (a) If a
certificate of compliance for a well has been canceled for one or
more violations of provisions of this title, Section 26.131, Water
Code, or Subchapter C, Chapter 27, Water Code, rules adopted or
orders issued under that title, section, or subchapter, as
applicable, or licenses, permits, or certificates issued to the
owner or operator of the well under that title, section, or
subchapter, as applicable, the commission may not issue a new
certificate of compliance until the owner or operator submits to
the commission a nonrefundable fee in the amount determined by the
commission under Section 81.065 [of $300] for each severance or
seal order issued for the well.
(b) Fees collected under this section shall be deposited to
the well inspection [oil-field cleanup] fund as provided by Section
91.118.
SECTION 12. The changes in law made by this Act apply only
to a fee imposed by the Railroad Commission of Texas on or after
September 1, 2012. A fee imposed by the commission before September
1, 2012, is subject to the law in effect on the date the fee is
imposed, and that law is continued in effect for that purpose.
SECTION 13. This Act takes effect September 1, 2011.