Texas 2023 - 88th Regular

Texas House Bill HB4278 Compare Versions

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1	1	88R8013 JAM-F
2	2	By: Longoria H.B. No. 4278
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the establishment by the Railroad Commission of Texas
8	8	of the orphaned well Bitcoin mining partnership program.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Chapter 89, Natural Resources Code, is amended
11	11	by adding Subchapter D-1 to read as follows:
12	12	SUBCHAPTER D-1. ORPHANED WELL BITCOIN MINING PARTNERSHIP PROGRAM
13	13	Sec. 89.101. DEFINITIONS. In this subchapter:
14	14	(1) "Fund" means the orphaned well Bitcoin mining
15	15	partnership program fund.
16	16	(2) "Orphaned well" has the meaning assigned by
17	17	Section 89.047.
18	18	(3) "Program" means the orphaned well Bitcoin mining
19	19	partnership program established under this subchapter.
20	20	(4) "Program participant" means a Bitcoin miner who
21	21	assumes operation and regulatory responsibility for an orphaned
22	22	well through the program.
23	23	Sec. 89.102. PROGRAM. The commission shall establish the
24	24	orphaned well Bitcoin mining partnership program through which:
25	25	(1) a program participant will assume operation and
26	26	regulatory responsibility for an orphaned well, including:
27	27	(A) liability for plugging, remediating, or
28	28	reclaiming the well to commission standards; and
29	29	(B) temporary control of:
30	30	(i) the energy produced from the well for
31	31	which liability is assumed in a manner established by commission
32	32	rule; and
33	33	(ii) a portion of the surface estate at the
34	34	well location necessary to mine Bitcoin at the location, as
35	35	determined by the commission; and
36	36	(2) the commission may loan money from the fund to a
37	37	program participant to facilitate Bitcoin mining at the location of
38	38	the well.
39	39	Sec. 89.103. FUND. (a) The orphaned well Bitcoin mining
40	40	partnership program fund is a special account in the general
41	41	revenue fund created for the purpose of providing loans to program
42	42	participants and the payment of costs associated with plugging
43	43	orphaned wells under Section 89.109(c).
44	44	(b) The fund consists of:
45	45	(1) money received from the federal government under:
46	46	(A) the Infrastructure Investment and Jobs Act
47	47	(Pub. L. No. 117-58); or
48	48	(B) Pub. L. No. 117-169, commonly cited as the
49	49	Inflation Reduction Act;
50	50	(2) deposits to the fund made under Section 89.111;
51	51	(3) money from any source transferred or deposited to
52	52	the credit of the fund at the commission's discretion as authorized
53	53	by law;
54	54	(4) any other revenue that the legislature by statute
55	55	dedicates for deposit to the credit of the fund;
56	56	(5) money from gifts, grants, or donations to the
57	57	fund; and
58	58	(6) investment earnings and interest earned on amounts
59	59	credited to the fund.
60	60	Sec. 89.104. IDENTIFICATION OF ORPHANED WELLS. The
61	61	commission shall identify orphaned wells appropriate for inclusion
62	62	in the program.
63	63	Sec. 89.105. PUBLICATION OF CERTAIN INFORMATION REGARDING
64	64	ORPHANED WELLS. The commission shall make publicly accessible on
65	65	the commission's Internet website:
66	66	(1) any information required as a condition of the
67	67	receipt or use of money described by Section 89.103(b)(1); and
68	68	(2) information on each well identified under Section
69	69	89.104, including:
70	70	(A) the amount of methane or any other natural
71	71	gas reasonably expected to be produced from the well;
72	72	(B) the location of the well;
73	73	(C) how long the well has been abandoned;
74	74	(D) an estimate of expenses required to plug,
75	75	remediate, or reclaim the well to commission standards;
76	76	(E) whether the well is on state-owned or private
77	77	land;
78	78	(F) information on the last known operator of the
79	79	well;
80	80	(G) any information regarding the integrity of
81	81	the well or well casing; and
82	82	(H) any other information the commission
83	83	considers relevant to the program.
84	84	Sec. 89.106. SOLICITATION OF BIDS. (a) At the commission's
85	85	discretion, but not less than once per year, the commission shall
86	86	solicit bids through the commission's Internet website from
87	87	potential program participants to assume liability for an orphaned
88	88	well for which information is published under Section 89.105.
89	89	(b) A bid submission under Subsection (a) must contain:
90	90	(1) legal documents showing the structure of the
91	91	Bitcoin mining company;
92	92	(2) documents demonstrating the company's ability to
93	93	successfully mine Bitcoin;
94	94	(3) a reasonable estimate of:
95	95	(A) when Bitcoin mining would begin at the
96	96	location;
97	97	(B) how long the Bitcoin mining would occur at
98	98	the location;
99	99	(C) the initial investment from the fund the
100	100	company would require to begin Bitcoin mining at the location;
101	101	(D) how much Bitcoin would be mined at the
102	102	location through participation in the program;
103	103	(E) conditions necessary for Bitcoin mining to be
104	104	profitable at the location; and
105	105	(F) the money the company will contribute to the
106	106	fund in the form of Bitcoin during participation in the program;
107	107	(4) proof of financial responsibility for the
108	108	company's ability to ensure proper plugging of the well and cleanup
109	109	of the location regardless of the success of the mining operation at
110	110	the location; and
111	111	(5) any other information the commission considers
112	112	relevant.
113	113	(c) Information submitted to the commission under
114	114	Subsection (b) may not be publicly disclosed. The commission may
115	115	provide summary statistics regarding information received in the
116	116	bids.
117	117	Sec. 89.107. SELECTION OF BIDS; ASSESSMENT PERIOD. (a)
118	118	After the close of a bidding period as determined by the commission,
119	119	the commission shall select bids based on:
120	120	(1) the ability of the potential program participant
121	121	to successfully and safely mine at the location;
122	122	(2) the time frame over which the potential program
123	123	participant will mine on the well; and
124	124	(3) the initial cost and return on investment for the
125	125	program.
126	126	(b) The commission shall announce the selection of bids on
127	127	the commission's Internet website and must include for a bid
128	128	selected a redacted version of the bidder's proposal that removes
129	129	sensitive business information of the bidder.
130	130	(c) The commission shall allow a potential program
131	131	participant whose bid was selected under this section not more than
132	132	60 days from the date the bid is awarded to perform an assessment of
133	133	the orphaned well for which the bid was awarded. The assessment
134	134	must include the ability to:
135	135	(1) perform tests for mechanical integrity;
136	136	(2) perform tests for surface integrity; and
137	137	(3) determine the amount of natural gas and or oil the
138	138	well can produce.
139	139	(d) Subject to Subsection (e), not later than the 60th day
140	140	after the date a bid is selected under Subsection (a), a potential
141	141	program participant whose bid was selected shall give notice to the
142	142	commission as to whether the potential program participant will
143	143	participate in the program. A potential program participant
144	144	required to give notice under this section assumes responsibility
145	145	for plugging, remediating, or reclaiming the orphaned well for
146	146	which the potential program participant's bid was selected if the
147	147	potential program participant does not give notice as required by
148	148	this subsection.
149	149	(e) The assessment period described by Subsection (c) may be
150	150	extended by the commission for an additional 60 days on application
151	151	of the potential program participant whose bid was selected.
152	152	(f) Subject to an extension provided under Subsection (e),
153	153	information collected under Subsection (c) must be reported to the
154	154	commission not later than the 60th day after the end of the
155	155	assessment period described by Subsection (c).
156	156	(g) A person who notifies the commission under Subsection
157	157	(d) that the person will not participate in the program must provide
158	158	to the commission a reason for that decision.
159	159	Sec. 89.108. BITCOIN MINING AT LOCATION OF ORPHANED WELL.
160	160	(a) Before beginning Bitcoin mining, a program participant must:
161	161	(1) use a third-party organization to report to the
162	162	commission the amount of natural gas emissions currently being
163	163	emitted from the well;
164	164	(2) post a bond to the state in an amount determined by
165	165	the commission to ensure that the orphaned well will be plugged,
166	166	remediated, or reclaimed to commission standards; and
167	167	(3) if the owner of the mineral rights of the orphaned
168	168	well is known, negotiate with that owner for royalty payments for
169	169	oil or gas produced from the well.
170	170	(b) A program participant who assumes control over an
171	171	orphaned well assumes all liability for plugging, remediating, or
172	172	reclaiming the well to commission standards.
173	173	(c) The commission shall remove from any required plugging
174	174	schedule a well for which a program participant has assumed
175	175	liability under this section.
176	176	Sec. 89.109. COSTS. (a) Subject to Subsection (b), the
177	177	financial responsibility of a program participant to plug,
178	178	remediate, or reclaim an orphaned well is limited to three times the
179	179	initial estimate by the commission if the program participant uses
180	180	a third party to provide to the commission:
181	181	(1) information about the well integrity;
182	182	(2) data on natural gas emissions from the well;
183	183	(3) information related to any potential groundwater
184	184	contamination; and
185	185	(4) information demonstrating that Bitcoin mining at
186	186	the location did not significantly cause the cost of plugging,
187	187	remediating, or reclaiming the well to increase.
188	188	(b) The limitation on the financial responsibility of a
189	189	program participant described by Subsection (a) does not apply to
190	190	additional costs attributable to actions of the program
191	191	participant.
192	192	(c) The commission shall pay from the fund the costs
193	193	associated with the plugging, remediation, or reclamation of an
194	194	orphaned well that exceed the limitation described by Subsection
195	195	(a), other than costs described by Subsection (b).
196	196	Sec. 89.110. LIABILITY. A program participant does not
197	197	incur any liability through participation in the program other
198	198	than:
199	199	(1) the duty to plug, remediate, or reclaim to
200	200	commission standards an orphaned well they have taken control of
201	201	through the program; and
202	202	(2) the repayment of a loan provided through the
203	203	program.
204	204	Sec. 89.111. REPAYMENT OF LOAN; FORM OF PAYMENT. (a) The
205	205	commission shall establish the terms and conditions of the
206	206	repayment of any money from the fund loaned to a program
207	207	participant.
208	208	(b) A program participant may pay any money owed to the
209	209	commission in Bitcoin.
210	210	Sec. 89.112. ANNUAL REPORT. A program participant shall
211	211	submit to the commission an annual report documenting progress on
212	212	the plugging, remediation, or reclamation of the orphaned well that
213	213	was the subject of the participant's selected bid.
214	214	Sec. 89.113. DUTY TO PLUG. After the termination of the
215	215	period established in the bid, a program participant shall plug,
216	216	remediate, or reclaim the orphaned well using a service approved by
217	217	the commission.
218	218	Sec. 89.114. THIRD-PARTY AGREEMENTS. A program participant
219	219	may enter into an agreement with a third party to facilitate the
220	220	transfer of oil from an orphaned well to market.
221	221	Sec. 89.115. ASSUMPTION OF OWNERSHIP. (a) At the end of
222	222	the agreed-upon mining period, a program participant may take legal
223	223	ownership of the orphaned well as otherwise provided by law.
224	224	(b) A program participant who intends to take ownership of
225	225	an orphaned well that is part of the program shall send notice to
226	226	the commission not later than 12 months before the well is scheduled
227	227	to be plugged, remediated, or reclaimed.
228	228	(c) Assumption of ownership under this section does not
229	229	remove the responsibility of a program participant to plug,
230	230	remediate, or reclaim the orphaned well.
231	231	Sec. 89.116. CONFLICT WITH OTHER LAW. This subchapter
232	232	prevails to the extent of any conflict with another provision of
233	233	this chapter.
234	234	SECTION 2. This Act takes effect September 1, 2023.