Utah 2025 Regular Session

Utah House Bill HB0478 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	Enrolled Copy H.B. 478
	1	+	03-01 17:41 1st Sub. (Buff) H.B. 478
	2	+	Bridger Bolinder proposes the following substitute bill:
2	3		1
3	4		Brine Mining Amendments
4	5		2025 GENERAL SESSION
5	6		STATE OF UTAH
6	7		Chief Sponsor: Bridger Bolinder
7	8		Senate Sponsor: David P. Hinkins
8	9		2
9	10
10	11		3
11	12		LONG TITLE
12	13		4
13	14		General Description:
14	15		5
15	16		This bill addresses the mining of brine within the state.
16	17		6
17	18		Highlighted Provisions:
18	19		7
19	20		This bill:
20	21		8
21	22		▸ enacts the Brine Conservation Act (act), including:
22	23		9
23	24		● defining terms;
24	25		10
25	26		● outlining the scope and application of the act;
26	27		11
27	28		● providing for the authority and jurisdiction of the Board of Oil, Gas, and Mining,
28	29		12
29	30		including rulemaking authority;
30	31		13
31	32		● establishing civil and criminal penalties;
32	33		14
33	34		● providing for forfeiture of sureties;
34	35		15
35	36		● addressing the sale of equipment, installation, or material by the Division of Oil, Gas,
36	37		16
37	38		and Mining;
38	39		17
39	40		● providing for the establishment and modification of brine production drilling units,
40	41		18
41	42		pooling, or fields;
42	43		19
43	44		● requiring permits; and
44	45		20
45	46		● regulating the payment of proceeds;
46	47		21
47	48		▸ repeals outdated language; and
48	49		22
49	50		▸ makes technical and conforming amendments.
50	51		23
51	52		Money Appropriated in this Bill:
52	53		24
53	54		None
54	55		25
55	56		Other Special Clauses:
56	57		26
57	58		None
58	59		27
59	60		Utah Code Sections Affected:
60	61		28
61		-	ENACTS: ~~H.B. 478 Enrolled Copy~~
	62	+	ENACTS:
62	63		29
63	64		40-13-101, Utah Code Annotated 1953
	65	+	1st Sub. H.B. 478 1st Sub. (Buff) H.B. 478 03-01 17:41
64	66		30
65	67		40-13-102, Utah Code Annotated 1953
66	68		31
67	69		40-13-103, Utah Code Annotated 1953
68	70		32
69	71		40-13-201, Utah Code Annotated 1953
70	72		33
71	73		40-13-202, Utah Code Annotated 1953
72	74		34
73	75		40-13-203, Utah Code Annotated 1953
74	76		35
75	77		40-13-204, Utah Code Annotated 1953
76	78		36
77	79		40-13-205, Utah Code Annotated 1953
78	80		37
79	81		40-13-301, Utah Code Annotated 1953
80	82		38
81	83		40-13-302, Utah Code Annotated 1953
82	84		39
83	85		40-13-303, Utah Code Annotated 1953
84	86		40
85	87		40-13-401, Utah Code Annotated 1953
86	88		41
87	89		40-13-402, Utah Code Annotated 1953
88	90		42
89	91		REPEALS:
90	92		43
91	93		40-8-24, as enacted by Laws of Utah 2024, Chapter 76
92	94		44
93	95
94	96		45
95	97		Be it enacted by the Legislature of the state of Utah:
96	98		46
97	99		Section 1. Section 40-13-101 is enacted to read:
98	100		47
99	101
100	102		CHAPTER 13. BRINE CONSERVATION ACT
101	103		48
102	104
103	105		Part 1. General Provisions
104	106		49
105	107		40-13-101 . Definitions.
106	108		50
107	109		As used in this chapter:
108	110		51
109	111		(1) "Artificial brine" means mineralized water formed by dissolving rock salt, evaporites, or
110	112		52
111	113		other readily soluble rocks or minerals derived through artificial means.
112	114		53
113	115		(2) "Board" means the Board of Oil, Gas, and Mining.
114	116		54
115	117		(3)(a) Except as provided in Subsection (3)(c), "brine" means subterranean saltwater and
116	118		55
117	119		all of the saltwater's constituent parts and dissolved minerals contained in the
118	120		56
119	121		saltwater if the saltwater:
120	122		57
121	123		(i) has total dissolved solids in excess of 20,000 parts per million; and
122	124		58
123	125		(ii) is not reasonably suitable for domestic or agricultural use.
124	126		59
125	127		(b) "Brine" includes saltwater described in Subsection (3)(a) that has dissolved minerals
126	128		60
127	129		contained within or extracted from the saltwater, such as:
128	130		61
129	131		(i) bromine;
130		-	- 2 - Enrolled Copy H.B. 478
131	132		62
132	133		(ii) magnesium;
	134	+	- 2 - 03-01 17:41 1st Sub. (Buff) H.B. 478
133	135		63
134	136		(iii) potassium;
135	137		64
136	138		(iv) lithium;
137	139		65
138	140		(v) boron;
139	141		66
140	142		(vi) chlorine;
141	143		67
142	144		(vii) iodine;
143	145		68
144	146		(viii) calcium;
145	147		69
146	148		(ix) strontium;
147	149		70
148	150		(x) sodium;
149	151		71
150	152		(xi) sulphur;
151	153		72
152	154		(xii) barium; or
153	155		73
154	156		(xiii) other marketable minerals, elements, or substances produced with or separated
155	157		74
156	158		from the saltwater.
157	159		75
158	160		(c) "Brine" does not include produced water unless the produced water is saved, sold, or
159	161		76
160	162		used for the purpose of extracting the dissolved minerals or other chemical
161	163		77
162	164		substances contained in the produced water.
163	165		78
164	166		(4) "Brine field unit" means the formation by an order of the board of a unit of one or more
165	167		79
166	168		brine reservoirs or parts of brine reservoirs in a field.
167	169		80
168	170		(5)(a) "Brine mining operation" means the exploration for, development of, or
169	171		81
170	172		production of brine, including naturally occurring brine and artificial brine, using
171	173		82
172	174		production wells in excess of 7,500 feet in depth.
173	175		83
174	176		(b) "Brine mining operation" does not include:
175	177		84
176	178		(i) operations at the surface to extract brine from the Great Salt Lake;
177	179		85
178	180		(ii) solution mining of salt for the primary purpose of creating subterranean caverns
179	181		86
180	182		for the storage of liquids or gases;
181	183		87
182	184		(iii) in situ leaching for other minerals not defined as brine for the purposes of this
183	185		88
184	186		chapter;
185	187		89
186	188		(iv) geothermal operations that do not include mineral extraction; and
187	189		90
188	190		(v) off-site operations and transportation.
189	191		91
190	192		(6)(a) "Brine proceeds" means a payment that:
191	193		92
192	194		(i) derives from production of brine from a brine well located in the state;
193	195		93
194	196		(ii) is expressed as a right to a specified interest in the:
195	197		94
196	198		(A) cash proceeds received from the sale of the brine; or
197	199		95
198	200		(B) the cash value of the brine; and
199		-	- 3 - H.B. 478 Enrolled Copy
200	201		96
201	202		(iii) is subject to any tax withheld from the payment pursuant to law.
	203	+	- 3 - 1st Sub. (Buff) H.B. 478 03-01 17:41
202	204		97
203	205		(b) "Brine proceeds" includes a:
204	206		98
205	207		(i) royalty interest;
206	208		99
207	209		(ii) overriding royalty interest;
208	210		100
209	211		(iii) production payment interest; or
210	212		101
211	213		(iv) working interest.
212	214		102
213	215		(c) "Brine proceeds" does not include a net profits interest or other interest the extent of
214	216		103
215	217		which cannot be determined with reference to a specified share of:
216	218		104
217	219		(i) the cash proceeds received from the sale of the brine; or
218	220		105
219	221		(ii) the cash value of the brine.
220	222		106
221	223		(7) "Brine production drilling unit" means each separate composite area of land designated
222	224		107
223	225		as a brine product drilling unit by order of the board for the production of brine and the
224	226		108
225	227		injection of effluent.
226	228		109
227	229		(8) "Brine well" means a well drilled or converted for the purpose of producing natural or
228	230		110
229	231		artificial brine.
230	232		111
231	233		(9) "Consenting owner" means an owner who, in the manner and within the time frame
232	234		112
233	235		established by the board in rule, consents to the drilling and operation of a brine well
234	236		113
235	237		and agrees to bear the owner's proportionate share of the costs of the drilling and
236	238		114
237	239		operation of the brine well.
238	240		115
239	241		(10) "Correlative rights" means the opportunity of each owner in a reservoir to produce the
240	242		116
241	243		owner's just and equitable share of the brine in the reservoir without waste.
242	244		117
243	245		(11) "Division" means the Division of Oil, Gas, and Mining.
244	246		118
245	247		(12) "Effluent" means the liquid and associated dissolved minerals remaining after
246	248		119
247	249		extraction of the marketable substances from brine.
248	250		120
249	251		(13) "Facility" means equipment or a structure used in the production, storage, treatment,
250	252		121
251	253		transportation, refining, or processing brine.
252	254		122
253	255		(14) "Field" means a general area underlaid by one or more brine reservoirs.
254	256		123
255	257		(15) "Leaching" means extracting a soluble metallic compound from an ore by selectively
256	258		124
257	259		dissolving it in a suitable solvent, such as sulfuric acid or hydrochloric acid.
258	260		125
259	261		(16) "Manufacture" means the complete process of drilling, completing, equipping, and
260	262		126
261	263		operating production and injection wells and of extracting and packaging brine.
262	264		127
263	265		(17) "Mineral" means a naturally occurring inorganic element or compound having an
264	266		128
265	267		orderly internal structure and characteristic chemical composition, crystal form, and
266	268		129
267	269		physical properties.
268		-	- 4 - Enrolled Copy H.B. 478
269	270		130
270	271		(18) "Multiple mineral development area" means an area designated by the board involving
	272	+	- 4 - 03-01 17:41 1st Sub. (Buff) H.B. 478
271	273		131
272	274		the management and development of various concurrent surface and sub-surface
273	275		132
274	276		resource extraction operations, including exploratory activities for the purpose of
275	277		133
276	278		efficient and effective development of the concurrent marketable resources in the area
277	279		134
278	280		without unreasonable interference occurring between the separate operations.
279	281		135
280	282		(19) "Nonconsenting owner" means an owner who does not, after written notice and in the
281	283		136
282	284		manner and within the time frame established by the board in rule, consent to the drilling
283	285		137
284	286		and operation of a brine well or agree to bear the owner's proportionate share of the costs.
285	287		138
286	288		(20) "Operating agreement" is a contract that outlines the rights and obligations of multiple
287	289		139
288	290		parties involved in a project, including:
289	291		140
290	292		(a) establishing who will act as the operator;
291	293		141
292	294		(b) identifying the parties' property interests;
293	295		142
294	296		(c) allocating costs, benefits, liabilities, and obligations; and
295	297		143
296	298		(d) providing a structure for handling disputes and other issues that may arise.
297	299		144
298	300		(21) "Operator" means a person who is designated by the owners or the board to operate a
299	301		145
300	302		brine well or brine production drilling unit.
301	303		146
302	304		(22) "Owner" means a person owning an interest in the dissolved minerals and other
303	305		147
304	306		chemical substances produced with or extracted from brine, or in the brine proceeds
305	307		148
306	308		including having the right to:
307	309		149
308	310		(a) drill into and produce brine from a reservoir; and
309	311		150
310	312		(b) appropriate the production for that person or for that person and others.
311	313		151
312	314		(23) "Payor" means the person who undertakes to distribute brine proceeds to the persons
313	315		152
314	316		entitled to the brine proceeds, whether as the first purchaser of that production, as
315	317		153
316	318		operator of the brine well from which the production is obtained, or as lessee under the
317	319		154
318	320		lease on which royalty is due.
319	321		155
320	322		(24) "Permit" means a permit order issued by the division allowing a person to engage in
321	323		156
322	324		brine mining operations in the state.
323	325		157
324	326		(25) "Permittee" means a person who:
325	327		158
326	328		(a) holds a permit issued under this chapter; or
327	329		159
328	330		(b) is required by this chapter to hold a permit.
329	331		160
330	332		(26) "Pooling" means the bringing together of separately owned interests for the common
331	333		161
332	334		development and operation of a brine production drilling unit.
333	335		162
334	336		(27) "Produced water" means the same as that term is defined in Section 40-12-101.
335	337		163
336	338		(28) "Reservoir" means an underground natural container containing a common
337		-	- 5 - H.B. 478 Enrolled Copy
338	339		164
339	340		accumulation of brine, with each zone of a general structure that is completely separated
	341	+	- 5 - 1st Sub. (Buff) H.B. 478 03-01 17:41
340	342		165
341	343		from any other zone in the structure being a separate reservoir, and is a common source
342	344		166
343	345		of supply.
344	346		167
345	347		(29) "Waste" means:
346	348		168
347	349		(a) the inefficient, excessive, or improper use or the unnecessary dissipation of brine or
348	350		169
349	351		reservoir energy;
350	352		170
351	353		(b) the inefficient storing of brine, except for a solar evaporation pond permitted by the
352	354		171
353	355		division; or
354	356		172
355	357		(c) the locating, drilling, equipping, operating, or producing of a brine well in a manner
356	358		173
357	359		that causes:
358	360		174
359	361		(i) a significant reduction in the economic recoverability of brine from a reservoir or
360	362		175
361	363		the dissolved minerals or chemical substances contained therein;
362	364		176
363	365		(ii) injecting effluent or other wastes in a manner as to cause unnecessary water
364	366		177
365	367		channeling or undue forced migration of brine between brine production drilling
366	368		178
367	369		units;
368	370		179
369	371		(iii) the unapproved intrusion of brine and effluent into an oil or gas reservoir;
370	372		180
371	373		(iv) unnecessary brine wells to be drilled; or
372	374		181
373	375		(v) the loss or destruction of brine either at the surface or subsurface.
374	376		182
375	377		Section 2. Section 40-13-102 is enacted to read:
376	378		183
377	379		40-13-102 . Scope of chapter -- Political subdivisions.
378	380		184
379	381		(1)(a) The board has jurisdiction over the drilling and production of brine wells.
380	382		185
381	383		(b) The board does not have jurisdiction over Class I, III, IV, or V wells regulated by the
382	384		186
383	385		Department of Environmental Quality, pursuant to the federal Safe Drinking Water
384	386		187
385	387		Act, 40 C.F.R. Parts 144 through 148, inclusive, and Title 19, Chapter 5, Water
386	388		188
387	389		Quality Act.
388	390		189
389	391		(2) The legislative body of a political subdivision may enact, amend, or enforce a local
390	392		190
391	393		ordinance, resolution, or rule consistent with the political subdivision's general land use
392	394		191
393	395		authority that:
394	396		192
395	397		(a) regulates only surface activity that is incidental to brine mining operations;
396	398		193
397	399		(b) does not effectively or unduly limit, ban, or prohibit brine mining operations; and
398	400		194
399	401		(c) is not otherwise preempted by state or federal law.
400	402		195
401	403		Section 3. Section 40-13-103 is enacted to read:
402	404		196
403	405		40-13-103 . Lands subject to chapter.
404	406		197
405	407		This chapter applies to all lands in the state lawfully subject to the state's police power
406		-	- 6 - Enrolled Copy H.B. 478
407	408		198
408	409		and, to the extent allowed by law, includes lands and appurtenances of the United States or the
	410	+	- 6 - 03-01 17:41 1st Sub. (Buff) H.B. 478
409	411		199
410	412		lands or appurtenances subject to the jurisdiction of the United States.
411	413		200
412	414		Section 4. Section 40-13-201 is enacted to read:
413	415		201
414	416
415	417		Part 2. Administration and Enforcement
416	418		202
417	419		40-13-201 . Board authority -- Rulemaking.
418	420		203
419	421		(1) The board has jurisdiction and authority over:
420	422		204
421	423		(a) a person or property necessary to administer and enforce this chapter; and
422	424		205
423	425		(b) the drilling for and production of brine for the extraction of dissolved minerals or
424	426		206
425	427		other chemical substances contained in the brine.
426	428		207
427	429		(2) The board shall establish fees in accordance with Section 63J-1-504, in an amount to
428	430		208
429	431		pay the costs to the board and division of the permitting process.
430	432		209
431	433		(3) The board may:
432	434		210
433	435		(a) adjudicate multiple mineral development conflicts resulting from brine mining
434	436		211
435	437		operations;
436	438		212
437	439		(b) make rules, in accordance with Title 63G, Chapter 3, Utah Administrative
438	440		213
439	441		Rulemaking Act, to mitigate multiple mineral development conflicts; and
440	442		214
441	443		(c) enforce a board's multiple mineral development order as set forth in Subsection
442	444		215
443	445		40-13-202(4).
444	446		216
445	447		(4) An approval granted under this chapter does not relieve the necessity of obtaining an
446	448		217
447	449		order, permit, license, consent, water right, or authorization required under any other
448	450		218
449	451		statute.
450	452		219
451	453		(5) The board may make rules, in accordance with Title 63G, Chapter 3, Utah
452	454		220
453	455		Administrative Rulemaking Act, and issue orders to:
454	456		221
455	457		(a) regulate activities relating to brine mining operations;
456	458		222
457	459		(b) protect correlative rights and prevent waste;
458	460		223
459	461		(c) form and modify brine production drilling units and brine field units;
460	462		224
461	463		(d) regulate the spacing of brine wells for the production of brine and injection wells for
462	464		225
463	465		the introduction of effluent into a reservoir;
464	466		226
465	467		(e) ensure that the drilling, casing, and plugging of a brine well is done in such a manner
466	468		227
467	469		as to prevent:
468	470		228
469	471		(i) the unauthorized escape of brine or effluent from one formation to another;
470	472		229
471	473		(ii) the unapproved intrusion of brine and effluent into an oil or gas reservoir;
472	474		230
473	475		(iii) the pollution of fresh water supplies throughout the state; and
474	476		231
475	477		(iv) blowouts, caving, or seepage;
476		-	- 7 - H.B. 478 Enrolled Copy
477	478		232
478	479		(f) subject to Subsection (6), prevent brine well construction and related regulated
	480	+	- 7 - 1st Sub. (Buff) H.B. 478 03-01 17:41
479	481		233
480	482		activities without an adequate and approved supply of water for the drilling and
481	483		234
482	484		completion of the brine well and authorization of the state engineer in the Division of
483	485		235
484	486		Water Rights for brine production from the brine well as required by Title 73,
485	487		236
486	488		Chapter 3, Appropriation;
487	489		237
488	490		(g) regulate the storage, refining, or processing of brine and effluent;
489	491		238
490	492		(h) require the making of reports showing:
491	493		239
492	494		(i) the location of brine wells used for production;
493	495		240
494	496		(ii) the location of injection wells used for disposal; and
495	497		241
496	498		(iii) the filing of well logs, production reports, and drilling records for the wells
497	499		242
498	500		described in this Subsection (5)(h);
499	501		243
500	502		(i) require the return of effluent to the same formation from which the brine was
501	503		244
502	504		produced unless the board authorizes the disposal of effluent into one or more other
503	505		245
504	506		formations upon finding that neither underground damage nor waste results from the
505	507		246
506	508		disposal;
507	509		247
508	510		(j) identify the ownership of:
509	511		248
510	512		(i) a brine well;
511	513		249
512	514		(ii) an injection well;
513	515		250
514	516		(iii) pipelines; and
515	517		251
516	518		(iv) a facility for the production, storage, treatment, transportation, refining, or
517	519		252
518	520		processing of brine;
519	521		253
520	522		(k) regulate the introduction or injection of effluent and other substances into a reservoir;
521	523		254
522	524		(l) require the furnishing of reasonable surety to guarantee that the operator shall:
523	525		255
524	526		(i) plug each abandoned brine well;
525	527		256
526	528		(ii) repair each brine well leaking or causing waste; and
527	529		257
528	530		(iii) maintain and reclaim the site;
529	531		258
530	532		(m) exercise continuing jurisdiction:
531	533		259
532	534		(i) over brine mining operations;
533	535		260
534	536		(ii) to amend a permit; or
535	537		261
536	538		(iii) to revoke a permit after notice and hearing;
537	539		262
538	540		(n) require operators to keep and maintain complete and accurate records of the
539	541		263
540	542		quantities of brine produced, sold, purchased, acquired, stored, transported, refined,
541	543		264
542	544		and processed, and effluent injected for a period of at least six years;
543	545		265
544	546		(o) formulate rules for the proper transportation of brine from the producing brine wells
545		-	- 8 - Enrolled Copy H.B. 478
546	547		266
547	548		to the plant and from the plant to the injection wells and for the maintenance and
	549	+	- 8 - 03-01 17:41 1st Sub. (Buff) H.B. 478
548	550		267
549	551		surveillance of the transportation facilities; and
550	552		268
551	553		(p) when brine mining uses produced water, resolve issues related to conflicting
552	554		269
553	555		correlative rights between the correlative rights established under Chapter 6, Board
554	556		270
555	557		and Division of Oil, Gas, and Mining, and the correlative rights established under
556	558		271
557	559		Part 3, Brine Production Drilling Units, Pooling, or Fields, by:
558	560		272
559	561		(i) subordinating conflicting correlative rights under this chapter to the correlative
560	562		273
561	563		rights established under Chapter 6, Board and Division of Oil, Gas, and Mining;
562	564		274
563	565		and
564	566		275
565	567		(ii) establishing a procedure before the board for addressing and resolving conflicts
566	568		276
567	569		related to conflicting correlative rights.
568	570		277
569	571		(6)(a) Subsection (5)(f) does not impose additional legal requirements but is enacted to
570	572		278
571	573		ensure that legal requirements concerning the use of water have been met before the
572	574		279
573	575		commencement of drilling.
574	576		280
575	577		(b) This chapter does not:
576	578		281
577	579		(i) override, substitute, or modify a water right within the state; or
578	580		282
579	581		(ii) modify the statutory enforcement and other duties of the state engineer under
580	582		283
581	583		Title 73, Water and Irrigation.
582	584		284
583	585		Section 5. Section 40-13-202 is enacted to read:
584	586		285
585	587		40-13-202 . Inspections -- Cessation orders -- Civil penalties.
586	588		286
587	589		(1)(a) If, on the basis of information available, the division has reason to believe that a
588	590		287
589	591		person is in violation of this chapter, an order issued under this chapter, a rule made
590	592		288
591	593		under this chapter, or a permit condition required by this chapter, the division shall
592	594		289
593	595		immediately order inspection of the brine mining operation at which the alleged
594	596		290
595	597		violation is occurring, unless the information available to the division is a result of a
596	598		291
597	599		previous inspection of the brine mining operation.
598	600		292
599	601		(b)(i) If, on the basis of an inspection, the division determines that a condition or
600	602		293
601	603		practice exists, or that a permittee is in violation of this chapter, an order issued
602	604		294
603	605		under this chapter, a rule made under this chapter, or a permit condition required
604	606		295
605	607		by this chapter, and the condition, practice, or violation creates an imminent
606	608		296
607	609		danger to the health or safety of the public, or is causing, or can reasonably be
608	610		297
609	611		expected to cause significant, imminent environmental harm to land, air, or water
610	612		298
611	613		resources, the division shall immediately order cessation of brine mining
612	614		299
613	615		operations or the portion of brine mining operations relevant to the condition,
614		-	- 9 - H.B. 478 Enrolled Copy
615	616		300
616	617		practice, or violation.
	618	+	- 9 - 1st Sub. (Buff) H.B. 478 03-01 17:41
617	619		301
618	620		(ii) The cessation order shall remain in effect until the division determines that the
619	621		302
620	622		condition, practice, or violation is abated, or until the division modifies, vacates,
621	623		303
622	624		or terminates the order.
623	625		304
624	626		(iii) If the division finds that the ordered cessation of brine mining operations, or a
625	627		305
626	628		portion of the brine mining operations, does not completely abate the imminent
627	629		306
628	630		danger to the health or safety of the public or the significant imminent
629	631		307
630	632		environmental harm to land, air, or water resources, the division shall, in addition
631	633		308
632	634		to the cessation order, impose affirmative obligations on the operator requiring the
633	635		309
634	636		operator to take whatever steps the division considers necessary to abate the
635	637		310
636	638		imminent danger or the significant environmental harm.
637	639		311
638	640		(c)(i) If, on the basis of an inspection, the division determines that a permittee is in
639	641		312
640	642		violation of this chapter, an order issued under this chapter, a rule made under this
641	643		313
642	644		chapter, or a permit condition required by this chapter, but the violation does not
643	645		314
644	646		create an imminent danger to the health or safety of the public or cannot be
645	647		315
646	648		reasonably expected to cause significant, imminent environmental harm to land,
647	649		316
648	650		air, or water resources, the division shall issue a notice to the permittee or the
649	651		317
650	652		permittee's agent specifying a reasonable time, but not more than 90 days, for the
651	653		318
652	654		abatement of the violation and providing an opportunity for an informal
653	655		319
654	656		conference with the division.
655	657		320
656	658		(ii) If, upon expiration of the period of time as originally fixed or subsequently
657	659		321
658	660		extended, for good cause shown, and upon the written finding of the division, the
659	661		322
660	662		division finds that the violation has not been abated, the division shall
661	663		323
662	664		immediately order a cessation of brine mining operations or the portion of the
663	665		324
664	666		brine mining operation relevant to the violation.
665	667		325
666	668		(iii) A cessation order issued under this Subsection (1)(c) remains in effect until the
667	669		326
668	670		division determines that the violation is abated or until the division modifies,
669	671		327
670	672		vacates, or terminates the order.
671	673		328
672		-	(iv) In a cessation order issued by the division under this Subsection (1)(c), the
	674	+	(iv) In an cessation order issued by the division under this Subsection (1)(c), the
673	675		329
674	676		division shall determine the steps necessary to abate the violation in the most
675	677		330
676	678		expeditious manner possible and shall include the necessary measures in the order.
677	679		331
678	680		(d)(i) A notice or order issued under this section shall set forth with reasonable
679	681		332
680	682		specificity:
681	683		333
682	684		(A) the nature of the violation and the remedial action required;
683		-	- 10 - Enrolled Copy H.B. 478
684	685		334
685	686		(B) the period of time established for abatement; and
	687	+	- 10 - 03-01 17:41 1st Sub. (Buff) H.B. 478
686	688		335
687	689		(C) a reasonable description of the portion of the mining and reclamation
688	690		336
689	691		operation to which the notice or order applies.
690	692		337
691	693		(ii) The division shall promptly give a notice or order issued under this section to the
692	694		338
693	695		permittee or the permittee's agent.
694	696		339
695	697		(iii) The division shall give a notice or order in a writing signed by the director or the
696	698		340
697	699		director's authorized representative who issues the notice or order.
698	700		341
699	701		(iv) The division may modify, vacate, or terminate a notice or order issued under this
700	702		342
701	703		section.
702	704		343
703	705		(2)(a) The division may request the attorney general to institute a civil action for relief,
704	706		344
705	707		including a permanent or temporary injunction, restraining order, or any other
706	708		345
707	709		appropriate order in a court with jurisdiction under Title 78A, Judiciary and Judicial
708	710		346
709	711		Administration, if the permittee or the permittee's agent:
710	712		347
711	713		(i) violates or fails or refuses to comply with an order or decision issued by the
712	714		348
713	715		division under this chapter;
714	716		349
715	717		(ii) interferes with, hinders, or delays the division, or the division's authorized
716	718		350
717	719		representative, in carrying out this chapter;
718	720		351
719	721		(iii) refuses to admit an authorized representative to the brine well;
720	722		352
721	723		(iv) refuses to permit inspection of the brine well by an authorized representative; or
722	724		353
723	725		(v) refuses to furnish information or a report requested by the division in furtherance
724	726		354
725	727		of this chapter.
726	728		355
727	729		(b) Notwithstanding Title 78B, Chapter 3a, Venue for Civil Actions, if the attorney
728	730		356
729	731		general brings the action described in Subsection (2)(a) in court, the attorney general
730	732		357
731	733		shall bring the action in the county in which:
732	734		358
733	735		(i) the brine mining operation and reclamation operation is located; or
734	736		359
735	737		(ii) the permittee of the brine mining operation or reclamation operation has the
736	738		360
737	739		permittee's principal office.
738	740		361
739	741		(c)(i) The court has jurisdiction to provide the relief requested in accordance with this
740	742		362
741	743		Subsection (2).
742	744		363
743	745		(ii) Relief granted by the court to enforce an order under Subsection (2)(a)(i) shall
744	746		364
745	747		continue in effect until the completion or final termination of all proceedings for
746	748		365
747	749		review of that order under this chapter, unless, before completion or termination,
748	750		366
749	751		the court granting the relief sets the order aside or modifies the order.
750	752		367
751	753		(3)(a)(i) A permittee issued a notice or order by the division, pursuant to Subsection
752		-	- 11 - H.B. 478 Enrolled Copy
753	754		368
754	755		(1)(b) or (c), or a person having an interest that may be adversely affected by the
	756	+	- 11 - 1st Sub. (Buff) H.B. 478 03-01 17:41
755	757		369
756	758		notice or order, may apply to the board for review of the notice or order by no
757	759		370
758	760		later than 30 days of receipt of the notice or order, or no later than 30 days of a
759	761		371
760	762		modification, vacation, or termination of the notice or order.
761	763		372
762	764		(ii) On receipt of an application under Subsection (3)(a)(i), the board shall pursue an
763	765		373
764	766		investigation as the board considers appropriate.
765	767		374
766	768		(iii) An investigation pursued by the board shall provide an opportunity for a public
767	769		375
768	770		hearing at the request of the applicant or the person having an interest that is or
769	771		376
770	772		may be adversely affected, to enable the applicant or that person to present
771	773		377
772	774		information relating to the issuance and continuance of the notice or order or the
773	775		378
774	776		modification, vacation, or termination of the notice or order.
775	777		379
776	778		(iv) The filing of an application for review under this Subsection (3)(a) does not
777	779		380
778	780		operate as a stay of an order or notice.
779	781		381
780	782		(b) The board shall give a permittee or other interested person written notice of the time
781	783		382
782	784		and place of the hearing at least five days before the hearing.
783	785		383
784	786		(c)(i) Pending completion of the investigation and hearing required by this section,
785	787		384
786	788		the applicant may file with the board a written request that the board grant
787	789		385
788	790		temporary relief from any notice or order issued under this section, with a detailed
789	791		386
790	792		statement giving the reasons for granting this relief.
791	793		387
792	794		(ii) The board shall issue an order or decision granting or denying this relief
793	795		388
794	796		expeditiously.
795	797		389
796	798		(d)(i) Following the issuance of an order to show cause as to why a permit should not
797	799		390
798	800		be suspended or revoked pursuant to this section, the board shall hold a public
799	801		391
800	802		hearing, after giving written notice of the time, place, and date of the hearing.
801	803		392
802	804		(ii) By no later than 60 days following the public hearing, the board shall issue and
803	805		393
804	806		give the permittee and all other parties to the hearing, a written decision, and the
805	807		394
806	808		reasons for the decision, regarding suspension or revocation of the permit.
807	809		395
808	810		(iii) If the board revokes a permit, the permittee shall immediately cease brine mining
809	811		396
810	812		operations on the permit area and shall complete reclamation within a period
811	813		397
812	814		specified by the board, or the board shall declare the surety forfeited for the brine
813	815		398
814	816		mining operation.
815	817		399
816	818		(e) An action taken by the board under this section, or any other provision of this
817	819		400
818	820		chapter, is subject to judicial review by a court with jurisdiction under Title 78A,
819	821		401
820	822		Judiciary and Judicial Administration.
821		-	- 12 - Enrolled Copy H.B. 478
822	823		402
823	824		(4)(a)(i) The division may assess a permittee a civil penalty if the permittee violates a
	825	+	- 12 - 03-01 17:41 1st Sub. (Buff) H.B. 478
824	826		403
825	827		permit condition, this chapter, an order issued under this chapter, or a rule made
826	828		404
827	829		under this chapter.
828	830		405
829	831		(ii) If a violation leads to the issuance of a cessation order under Subsection (1), the
830	832		406
831	833		division shall assess a civil penalty.
832	834		407
833	835		(b)(i) A civil penalty under this Subsection (4) may not exceed $5,000 for each
834	836		408
835	837		violation.
836	838		409
837	839		(ii) Each day of a continuing violation may be considered to be a separate violation
838	840		410
839	841		for purposes of the civil penalty assessments.
840	842		411
841	843		(c) In determining the amount of the civil penalty, the division shall consider:
842	844		412
843	845		(i) the permittee's history of previous violations at the particular brine mining
844	846		413
845	847		operation;
846	848		414
847	849		(ii) the seriousness of the violation, including any irreparable harm to the
848	850		415
849	851		environment or hazard to the health or safety of the public;
850	852		416
851	853		(iii) whether the permittee was negligent; and
852	854		417
853	855		(iv) the demonstrated good faith of the permittee in attempting to achieve rapid
854	856		418
855	857		compliance after notification of the violation.
856	858		419
857	859		(5)(a) By no later than 30 days after the issuance of a notice or order charging a
858	860		420
859	861		violation has occurred, the division shall inform the permittee of a proposed
860	862		421
861	863		assessment under Subsection (4).
862	864		422
863	865		(b) A person charged with the civil penalty has 30 days after issuance of a notice or
864	866		423
865	867		order to:
866	868		424
867	869		(i) pay the proposed assessment in full; or
868	870		425
869	871		(ii) request an informal conference with the division.
870	872		426
871	873		(c) An informal conference held by the division may address either the amount of the
872	874		427
873	875		proposed assessment, the fact of the violation, or both.
874	876		428
875	877		(d) If a permittee who requests an informal conference and participates in the
876	878		429
877	879		proceedings is not in agreement with the results of the informal conference, the
878	880		430
879	881		permittee may, within 30 days of receipt of the decision made by the division in the
880	882		431
881	883		informal conference, request a hearing before the board.
882	884		432
883	885		(e)(i) Before review of the division's decision under Subsection (5)(d) by the board,
884	886		433
885	887		and by no later than 30 days of receipt of the division's decision, the permittee
886	888		434
887	889		shall forward to the division the amount of the proposed assessment for placement
888	890		435
889	891		in an escrow account.
890		-	- 13 - H.B. 478 Enrolled Copy
891	892		436
892	893		(ii) If the permittee fails to forward the amount of the civil penalty to the division by
	894	+	- 13 - 1st Sub. (Buff) H.B. 478 03-01 17:41
893	895		437
894	896		no later than 30 days of receipt of the results of the informal conference, the
895	897		438
896	898		operator waives the opportunity for further review of the fact of the violation or to
897	899		439
898	900		contest the amount of the civil penalty assessed for the violation.
899	901		440
900	902		(iii) If the board or a court determines that no violation occurred or that the amount of
901	903		441
902	904		the civil penalty should be reduced, the division shall, within 30 days, remit the
903	905		442
904	906		appropriate amount to the operator with interest accumulated.
905	907		443
906	908		(6)(a) A civil penalty assessed by the division is final only after the person charged with
907	909		444
908	910		a violation described under Subsection (4) has been given an opportunity for a public
909	911		445
910	912		hearing.
911	913		446
912	914		(b) If a public hearing is held, the board shall make findings of fact and shall issue a
913	915		447
914	916		written decision as to the occurrence of the violation and the amount of the civil
915	917		448
916	918		penalty which is warranted, incorporating, when appropriate, an order requiring that
917	919		449
918	920		the civil penalty be paid.
919	921		450
920	922		(c) When appropriate, the board shall consolidate a hearing with other proceedings
921	923		451
922	924		under Section 40-13-201.
923	925		452
924	926		(d) If a person charged with a violation does not attend the public hearing, the division
925	927		453
926	928		may assess a civil penalty after the division:
927	929		454
928	930		(i) determines:
929	931		455
930	932		(A) that a violation occurred; and
931	933		456
932	934		(B) the amount of the civil penalty that is warranted; and
933	935		457
934	936		(ii) issues an order requiring that the civil penalty be paid.
935	937		458
936	938		(7) At the request of the board, the attorney general may bring a civil action in a court with
937	939		459
938	940		jurisdiction under Title 78A, Judiciary and Judicial Administration, to recover a civil
939	941		460
940	942		penalty owed under this chapter.
941	943		461
942	944		(8)(a) The division shall assess an operator who fails to correct a violation for which a
943	945		462
944	946		notice or cessation order has been issued under Subsection (1)(b) within the period
945	947		463
946	948		permitted for a correction of the violation a civil penalty of not less than $750 for
947	949		464
948	950		each day during which the failure or violation continues.
949	951		465
950	952		(b) The period permitted for correction of a violation for which a notice of cessation
951	953		466
952	954		order has been issued under Subsection (1)(b) may not end until:
953	955		467
954	956		(i) the entry of a final order by the board, in a review proceeding initiated by the
955	957		468
956	958		operator, in which the board orders, after an expedited hearing, the suspension of
957	959		469
958	960		the abatement requirements of the citation after determining that the operator will
959		-	- 14 - Enrolled Copy H.B. 478
960	961		470
961	962		suffer irreparable loss or damage from the application of those requirements; or
	963	+	- 14 - 03-01 17:41 1st Sub. (Buff) H.B. 478
962	964		471
963	965		(ii) the entry of an order of the court after a review proceeding initiated by the
964	966		472
965	967		operator, in which the court orders the suspension of the abatement requirements
966	968		473
967	969		of the citation.
968	970		474
969	971		(9) The division shall deposit money received by the state from civil penalties collected
970	972		475
971	973		from actions resulting from this chapter into the Abandoned Mine Reclamation Fund
972	974		476
973	975		established under Section 40-10-25.1 and shall use the money for the reclamation of
974	976		477
975	977		mined land impacts not covered by reclamation surety.
976	978		478
977	979		(10) The division may not commence or maintain a suit, action, or other proceeding based
978	980		479
979	981		upon a violation of this chapter, an order issued under this chapter, a rule made under
980	982		480
981	983		this chapter, or a permit condition under this chapter, unless the suit, action, or
982	984		481
983	985		proceeding is commenced within five years from the date of the alleged violation.
984	986		482
985	987		Section 6. Section 40-13-203 is enacted to read:
986	988		483
987	989		40-13-203 . Criminal penalties.
988	990		484
989	991		(1) It is unlawful for a person to intentionally or knowingly:
990	992		485
991	993		(a) for the purpose of evading this chapter or an order issued under this chapter, make or
992	994		486
993	995		cause to be made a false statement, representation, or certification in a report, record,
994	996		487
995	997		account, or memorandum required by this chapter or by the order;
996	998		488
997	999		(b) omit or cause to be omitted from a report, record, account, or memorandum, a full,
998	1000		489
999	1001		true, and correct entry as required by this chapter or by an order;
1000	1002		490
1001	1003		(c) fail to make a statement, representation, or certification in an application, record,
1002	1004		491
1003	1005		report, plan, or other document filed or required to be maintained pursuant to this
1004	1006		492
1005	1007		chapter or an order issued under this chapter;
1006	1008		493
1007	1009		(d) remove from this state or destroy, mutilate, alter, or falsify a record, account, or
1008	1010		494
1009	1011		memorandum; or
1010	1012		495
1011	1013		(e) fail or refuse to comply with:
1012	1014		496
1013	1015		(i) an order issued under Section 40-13-201; or
1014	1016		497
1015	1017		(ii) an order incorporated in a final decision issued by the board under this chapter,
1016	1018		498
1017	1019		except an order incorporated in a decision under Subsection 40-13-202(6).
1018	1020		499
1019	1021		(2) A person who violates Subsection (1) is guilty of a class B misdemeanor, and upon
1020	1022		500
1021	1023		conviction, for each violation, is subject to:
1022	1024		501
1023	1025		(a) a fine of not to exceed $1,000 as provided in Section 76-3-301;
1024	1026		502
1025	1027		(b) imprisonment for a term not to exceed six months as provided in Section 76-3-204; or
1026	1028		503
1027	1029		(c) both a fine and imprisonment.
1028		-	- 15 - H.B. 478 Enrolled Copy
1029	1030		504
1030	1031		(3) If a permittee violates Subsection (1), a director, officer, or agent of the permittee may
	1032	+	- 15 - 1st Sub. (Buff) H.B. 478 03-01 17:41
1031	1033		505
1032	1034		be held criminally responsible in accordance with Section 76-2-205.
1033	1035		506
1034	1036		(4) A criminal proceeding for a violation described in Subsection (1) shall be commenced,
1035	1037		507
1036	1038		as provided in Section 76-1-302, by no later than two years from the date of the alleged
1037	1039		508
1038	1040		violation.
1039	1041		509
1040	1042		(5) The division or board may impose a civil penalty under Section 40-13-202 in addition to
1041	1043		510
1042	1044		prosecution under this section.
1043	1045		511
1044	1046		Section 7. Section 40-13-204 is enacted to read:
1045	1047		512
1046	1048		40-13-204 . Forfeiture of surety.
1047	1049		513
1048	1050		(1) Subsection (2) applies if the board determines that an operator has neglected, failed, or
1049	1051		514
1050	1052		refused to:
1051	1053		515
1052	1054		(a) plug and abandon a brine well;
1053	1055		516
1054	1056		(b) close any surface impoundment;
1055	1057		517
1056	1058		(c) repair a brine well leaking or causing waste; or
1057	1059		518
1058	1060		(d) maintain and reclaim a site.
1059	1061		519
1060	1062		(2) A person who violates Subsection (1) shall forfeit from the person's surety or shall pay
1061	1063		520
1062	1064		to this state a sum equal to the cost of:
1063	1065		521
1064	1066		(a) plugging a brine well;
1065	1067		522
1066	1068		(b) closure of the surface impoundment;
1067	1069		523
1068	1070		(c) repair of the brine well leaking or causing waste; or
1069	1071		524
1070	1072		(d) reclamation of the site.
1071	1073		525
1072	1074		Section 8. Section 40-13-205 is enacted to read:
1073	1075		526
1074	1076		40-13-205 . Sale of equipment, installation, or material.
1075	1077		527
1076	1078		(1) After the board determines a brine well or facility is to be abandoned, as part of the
1077	1079		528
1078	1080		plugging and reclamation process, the division may sell or dispose of in a manner the
1079	1081		529
1080	1082		division sees fit the following found on the site or taken from the brine well or facility:
1081	1083		530
1082	1084		(a) drilling, producing, or operating equipment;
1083	1085		531
1084	1086		(b) installations; or
1085	1087		532
1086	1088		(c) material.
1087	1089		533
1088	1090		(2) A person to whom any equipment, installations, or material is sold under Subsection (1)
1089	1091		534
1090	1092		receives the title to the equipment, installation, or material, free of any claim.
1091	1093		535
1092	1094		(3) When the division receives money on the sale or disposal of equipment, installation, or
1093	1095		536
1094	1096		material under Subsection (1), the division shall:
1095	1097		537
1096	1098		(a) apply the money to the payment of any unpaid costs and civil penalty determined by
1097		-	- 16 - Enrolled Copy H.B. 478
1098	1099		538
1099	1100		the division; and
	1101	+	- 16 - 03-01 17:41 1st Sub. (Buff) H.B. 478
1100	1102		539
1101	1103		(b) if money remains after applying the money under Subsection (3)(a), the division
1102	1104		540
1103	1105		shall return the unused money to the operator or a person who has established a legal
1104	1106		541
1105	1107		right to the money.
1106	1108		542
1107	1109		Section 9. Section 40-13-301 is enacted to read:
1108	1110		543
1109	1111
1110	1112		Part 3. Brine Production Drilling Units, Pooling, or Fields
1111	1113		544
1112	1114		40-13-301 . Establishment or modification of a brine production drilling unit.
1113	1115		545
1114	1116		(1) Upon the petition of an owner or operator of a brine well, the board may order the
1115	1117		546
1116	1118		establishment of a brine production drilling unit.
1117	1119		547
1118	1120		(2) Within a brine production drilling unit, only one brine well may be drilled for
1119	1121		548
1120	1122		production from the reservoir, except as provided in Subsections (6) and (7).
1121	1123		549
1122	1124		(3) A brine production drilling unit may not be smaller than the maximum area that can be
1123	1125		550
1124	1126		efficiently and economically drained by one brine well.
1125	1127		551
1126	1128		(4)(a) Each brine production drilling unit within a reservoir shall be of uniform size and
1127	1129		552
1128	1130		shape, unless the board finds that the board is required to make an exception due to
1129	1131		553
1130	1132		geologic, geographic, or other factors.
1131	1133		554
1132	1134		(b) If the board finds it necessary to divide a reservoir into zones and establish a brine
1133	1135		555
1134	1136		production drilling unit for each zone, brine production drilling units may differ in
1135	1137		556
1136	1138		size and shape for each zone.
1137	1139		557
1138	1140		(5) An order of the board that establishes a brine production drilling unit for a reservoir
1139	1141		558
1140	1142		shall:
1141	1143		559
1142	1144		(a) be made upon terms and conditions that are just and reasonable;
1143	1145		560
1144	1146		(b) include the lands determined by the board to overlay the reservoir;
1145	1147		561
1146	1148		(c) specify the acreage and shape of each brine production drilling unit as determined by
1147	1149		562
1148	1150		the board; and
1149	1151		563
1150	1152		(d) specify the location of the brine well in terms of distance from brine production
1151	1153		564
1152	1154		drilling unit boundaries and other brine wells.
1153	1155		565
1154	1156		(6) The board may establish a brine production drilling unit and concurrently authorize the
1155	1157		566
1156	1158		drilling of more than one brine well in a brine production drilling unit if the board finds
1157	1159		567
1158	1160		that:
1159	1161		568
1160	1162		(a) engineering or geologic characteristics justify the drilling of more than one brine
1161	1163		569
1162	1164		well in that brine production drilling unit; and
1163	1165		570
1164	1166		(b) the drilling of more than one brine well in the brine production drilling unit will not
1165	1167		571
1166	1168		result in waste or unreasonably interfere with correlative rights.
1167		-	- 17 - H.B. 478 Enrolled Copy
1168	1169		572
1169	1170		(7) The board may modify an order that establishes a brine production drilling unit for a
	1171	+	- 17 - 1st Sub. (Buff) H.B. 478 03-01 17:41
1170	1172		573
1171	1173		reservoir to provide for:
1172	1174		574
1173	1175		(a) an exception to the authorized location of a brine well;
1174	1176		575
1175	1177		(b) the inclusion of additional areas which the board determines overlays the reservoir;
1176	1178		576
1177	1179		(c) the increase or decrease of the size of the brine production drilling units; or
1178	1180		577
1179	1181		(d) the drilling of additional brine wells within brine production drilling units.
1180	1182		578
1181	1183		(8) After an order establishing a brine production drilling unit is entered by the board, the
1182	1184		579
1183	1185		drilling of a brine well into the reservoir at a location other than that authorized by the
1184	1186		580
1185	1187		order is prohibited.
1186	1188		581
1187	1189		Section 10. Section 40-13-302 is enacted to read:
1188	1190		582
1189	1191		40-13-302 . Pooling of interests for the development and operation of a brine
1190	1192		583
1191	1193		production drilling unit.
1192	1194		584
1193	1195		(1) Two or more owners within a brine production drilling unit may bring together their
1194	1196		585
1195	1197		interests for the development and operation of the brine production drilling unit.
1196	1198		586
1197	1199		(2)(a) In the absence of a written agreement for pooling, including an operating
1198	1200		587
1199	1201		agreement, the board may enter an order pooling all interests in the brine production
1200	1202		588
1201	1203		drilling unit for the development and operation of the brine production drilling unit.
1202	1204		589
1203	1205		(b) The board shall make the order upon terms and conditions that are just and
1204	1206		590
1205	1207		reasonable.
1206	1208		591
1207	1209		(c) The board may adopt terms appearing in an operating agreement:
1208	1210		592
1209	1211		(i) for the brine production drilling unit that is in effect between the consenting
1210	1212		593
1211	1213		owners;
1212	1214		594
1213	1215		(ii) submitted by any party to the proceeding; or
1214	1216		595
1215	1217		(iii) submitted by the board's own motion.
1216	1218		596
1217	1219		(3)(a) Operations incident to the drilling of a brine well upon any portion of a brine
1218	1220		597
1219	1221		production drilling unit covered by a pooling order are considered for all purposes to
1220	1222		598
1221	1223		be the conduct of the brine mining operations upon each separately owned tract in the
1222	1224		599
1223	1225		brine production drilling unit by the several owners.
1224	1226		600
1225	1227		(b) The portion of the production allocated or applicable to a separately owned tract
1226	1228		601
1227	1229		included in a brine production drilling unit covered by a pooling order shall, when
1228	1230		602
1229	1231		produced, be considered for all purposes to have been produced from that tract by a
1230	1232		603
1231	1233		brine well drilled on the tract.
1232	1234		604
1233	1235		(4)(a)(i) A pooling order shall provide for the payment of just and reasonable costs
1234	1236		605
1235	1237		incurred in the drilling and operating of the brine production drilling unit,
1236		-	- 18 - Enrolled Copy H.B. 478
1237	1238		606
1238	1239		including:
	1240	+	- 18 - 03-01 17:41 1st Sub. (Buff) H.B. 478
1239	1241		607
1240	1242		(A) the costs of drilling, completing, equipping, producing, gathering,
1241	1243		608
1242	1244		transporting, processing, marketing, and storage facilities;
1243	1245		609
1244	1246		(B) reasonable charges for the administration and supervision of brine mining
1245	1247		610
1246	1248		operations; and
1247	1249		611
1248	1250		(C) other costs customarily incurred in the industry.
1249	1251		612
1250	1252		(ii) An owner is not liable under a pooling order for costs or losses resulting from the
1251	1253		613
1252	1254		gross negligence or willful misconduct of the operator.
1253	1255		614
1254	1256		(b) A pooling order shall provide for reimbursement to the consenting owners for any
1255	1257		615
1256	1258		nonconsenting owner's share of the costs out of production from the brine production
1257	1259		616
1258	1260		drilling unit attributable to the nonconsenting owner's tract.
1259	1261		617
1260	1262		(c) A pooling order shall provide that each consenting owner shall own and is entitled to
1261	1263		618
1262	1264		receive, subject to royalty or similar obligations:
1263	1265		619
1264	1266		(i) the share of the production of the brine well applicable to the consenting owner's
1265	1267		620
1266	1268		interest in the brine production drilling unit; and
1267	1269		621
1268	1270		(ii) unless the consenting owner has agreed otherwise, the consenting owner's
1269	1271		622
1270	1272		proportionate part of the nonconsenting owner's share of the production until costs
1271	1273		623
1272	1274		are recovered as provided in Subsection (4)(d).
1273	1275		624
1274	1276		(d)(i) A pooling order shall provide that each nonconsenting owner is entitled to
1275	1277		625
1276	1278		receive, subject to royalty or similar obligations, the share of the production of the
1277	1279		626
1278	1280		brine well applicable to the nonconsenting owner's interest in the brine production
1279	1281		627
1280	1282		drilling unit after the consenting owners have recovered from the nonconsenting
1281	1283		628
1282	1284		owner's share of production the following amounts less any cash contributions
1283	1285		629
1284	1286		made by the nonconsenting owner:
1285	1287		630
1286	1288		(A) 100% of the nonconsenting owner's share of the cost of surface equipment
1287	1289		631
1288	1290		beyond the wellhead connections, including stock tanks, separators, treaters,
1289	1291		632
1290	1292		pumping equipment, and piping;
1291	1293		633
1292	1294		(B) 100% of the nonconsenting owner's share of the estimated cost to plug and
1293	1295		634
1294	1296		abandon the brine well as determined by the board;
1295	1297		635
1296	1298		(C) 100% of the nonconsenting owner's share of the cost of brine mining
1297	1299		636
1298	1300		operations of the brine well commencing with first production and continuing
1299	1301		637
1300	1302		until the consenting owners have recovered all costs; and
1301	1303		638
1302	1304		(D) 300% on the first brine well and 150% for each subsequent brine well of the
1303	1305		639
1304	1306		nonconsenting owner's share of the costs of staking the location, wellsite
1305		-	- 19 - H.B. 478 Enrolled Copy
1306	1307		640
1307	1308		preparation, rights-of-way, rigging up, drilling, reworking, recompleting,
	1309	+	- 19 - 1st Sub. (Buff) H.B. 478 03-01 17:41
1308	1310		641
1309	1311		deepening or plugging back, testing, and completing, and the cost of equipment
1310	1312		642
1311	1313		in the brine well to and including the wellhead connections.
1312	1314		643
1313	1315		(ii) The nonconsenting owner's share of the costs specified in Subsection (4)(d)(i) is
1314	1316		644
1315	1317		that interest that would have been chargeable to the nonconsenting owner had the
1316	1318		645
1317	1319		nonconsenting owner initially agreed to pay the nonconsenting owner's share of
1318	1320		646
1319	1321		the costs of the brine well from commencement of the brine mining operation.
1320	1322		647
1321	1323		(iii) A reasonable interest charge may be included if the board finds the interest
1322	1324		648
1323	1325		charge appropriate.
1324	1326		649
1325	1327		(e) If there is a dispute about costs, the board shall determine the proper costs.
1326	1328		650
1327	1329		(5) If a nonconsenting owner's tract in the brine production drilling unit is subject to a lease,
1328	1330		651
1329	1331		mining claim, or contract for the development of minerals within the brine, the pooling
1330	1332		652
1331	1333		order shall provide that the consenting owners shall pay any royalty interest or other
1332	1334		653
1333	1335		interest in the tract not subject to the deduction of the costs of production from the
1334	1336		654
1335	1337		production attributable to that tract.
1336	1338		655
1337	1339		(6)(a) If a nonconsenting owner's tract in the brine production drilling unit is not subject
1338	1340		656
1339	1341		to a lease, mining claim, or contract for the development of minerals within the brine
1340	1342		657
1341	1343		production drilling unit, the pooling order shall provide that the nonconsenting owner
1342	1344		658
1343	1345		shall receive as a royalty:
1344	1346		659
1345	1347		(i) the acreage weighted average royalty based on each leased fee and privately
1346	1348		660
1347	1349		owned tract within the brine production drilling unit, proportionately reduced by
1348	1350		661
1349	1351		the percentage of the nonconsenting owner's interest in the brine production
1350	1352		662
1351	1353		drilling unit; or
1352	1354		663
1353	1355		(ii) if there is no leased fee or privately owned tract within the brine production
1354	1356		664
1355	1357		drilling unit other than the one owned by the nonconsenting owner, 7-1/2%
1356	1358		665
1357	1359		proportionately reduced by the percentage of the nonconsenting owner's interest in
1358	1360		666
1359	1361		the brine production drilling unit.
1360	1362		667
1361	1363		(b) The royalty shall be:
1362	1364		668
1363	1365		(i) determined as of the day drilling is commenced; and
1364	1366		669
1365	1367		(ii) paid from production attributable to each tract until the consenting owners have
1366	1368		670
1367	1369		recovered the costs specified in Subsection (4)(d).
1368	1370		671
1369	1371		(7) Once the consenting owners have recovered the costs, as described in Subsection
1370	1372		672
1371	1373		(6)(b)(ii), the royalty is merged back into the nonconsenting owner's working interest
1372	1374		673
1373	1375		and is terminated.
1374		-	- 20 - Enrolled Copy H.B. 478
1375	1376		674
1376	1377		(8) The operator of a brine well under a pooling order in which there is a nonconsenting
	1378	+	- 20 - 03-01 17:41 1st Sub. (Buff) H.B. 478
1377	1379		675
1378	1380		owner shall furnish the nonconsenting owner with monthly statements specifying:
1379	1381		676
1380	1382		(a) costs incurred;
1381	1383		677
1382	1384		(b) the total volume of production of brine and the volumes extracted therefrom; and
1383	1385		678
1384	1386		(c) the amount of brine proceeds realized from the sale of the production during the
1385	1387		679
1386	1388		preceding month.
1387	1389		680
1388	1390		(9) A pooling order shall provide that when the consenting owners recover from a
1389	1391		681
1390	1392		nonconsenting owner's relinquished interest the amounts provided for in Subsection
1391	1393		682
1392	1394		(4)(d):
1393	1395		683
1394	1396		(a) the relinquished interest of the nonconsenting owner shall automatically revert to the
1395	1397		684
1396	1398		nonconsenting owner;
1397	1399		685
1398	1400		(b) the nonconsenting owner shall from that time:
1399	1401		686
1400	1402		(i) own the same interest in the brine well and the production from the brine well; and
1401	1403		687
1402	1404		(ii) be liable for the further costs of the brine mining operation as if the
1403	1405		688
1404	1406		nonconsenting owner had participated in the initial drilling and operation; and
1405	1407		689
1406	1408		(c) costs are payable out of production unless otherwise agreed between the
1407	1409		690
1408	1410		nonconsenting owner and the operator.
1409	1411		691
1410	1412		(10) A pooling order shall provide that in any circumstance where the nonconsenting owner
1411	1413		692
1412	1414		has relinquished the nonconsenting owner's share of production to consenting owners or
1413	1415		693
1414	1416		at any time fails to take the nonconsenting owner's share of production in-kind when the
1415	1417		694
1416	1418		nonconsenting owner is entitled to do so, the nonconsenting owner is entitled to:
1417	1419		695
1418	1420		(a) an accounting of the brine proceeds applicable to the nonconsenting owner's
1419	1421		696
1420	1422		relinquished share of production; and
1421	1423		697
1422	1424		(b) payment of the brine proceeds applicable to that share of production not taken
1423	1425		698
1424	1426		in-kind, net of costs.
1425	1427		699
1426	1428		Section 11. Section 40-13-303 is enacted to read:
1427	1429		700
1428	1430		40-13-303 . Order establishing brine field unit.
1429	1431		701
1430	1432		(1)(a) The board may hold a hearing to consider the need for the operation as a unit of
1431	1433		702
1432	1434		one or more brine reservoirs or parts of brine reservoirs in a field.
1433	1435		703
1434	1436		(b) The board shall consider including any state lands within a brine field unit that
1435	1437		704
1436	1438		would not otherwise be protected from drainage because of the inability to develop
1437	1439		705
1438	1440		the state lands due to geography or other factors.
1439	1441		706
1440	1442		(2) The board shall make an order providing for the unit operation of a reservoir or part of a
1441	1443		707
1442	1444		reservoir, if the board finds that:
1443		-	- 21 - H.B. 478 Enrolled Copy
1444	1445		708
1445	1446		(a) the operation is reasonably necessary for the purposes of this chapter; and
	1447	+	- 21 - 1st Sub. (Buff) H.B. 478 03-01 17:41
1446	1448		709
1447	1449		(b) the value of the estimated additional recovery of brine substantially exceeds the
1448	1450		710
1449	1451		estimated additional cost incident to conducting the operations.
1450	1452		711
1451	1453		(3)(a) An order by the board establishing or modifying a brine field or brine field unit
1452	1454		712
1453	1455		shall prescribe a plan for unit operations that shall include:
1454	1456		713
1455	1457		(i) a description of the lands and of the reservoir that is established as the brine field
1456	1458		714
1457	1459		or brine field unit;
1458	1460		715
1459	1461		(ii) subject to Subsection (3)(b), an allocation of the brine produced in the brine field
1460	1462		716
1461	1463		unit to the separately-owned tracts in the brine field or brine field unit;
1462	1464		717
1463	1465		(iii) the method for apportioning costs of development and operation between the
1464	1466		718
1465	1467		separately owned tracts and how these costs are paid including a provision
1466	1468		719
1467	1469		providing a procedure for the unit production allocated to an owner who does not
1468	1470		720
1469	1471		pay the share of the cost of unit operations charged to such owner, or the interest
1470	1472		721
1471	1473		of that owner, to be sold and the brine proceeds applied to the payment of the
1472	1474		722
1473	1475		costs;
1474	1476		723
1475	1477		(iv) a provision, if necessary, for carrying or otherwise financing a person who elects
1476	1478		724
1477	1479		to be carried or otherwise financed, allowing a reasonable interest charge for this
1478	1480		725
1479	1481		service payable out of that person's share of the production;
1480	1482		726
1481	1483		(v) the method and circumstances under which brine or effluent from the brine field
1482	1484		727
1483	1485		unit may be injected into the reservoir or other formations;
1484	1486		728
1485	1487		(vi) the time when the unit operations shall commence, and the manner in which and
1486	1488		729
1487	1489		the circumstances under which, the unit operations shall terminate;
1488	1490		730
1489	1491		(vii) the additional provisions that the board finds appropriate for carrying out the
1490	1492		731
1491	1493		unit operations, and for the protection of correlative rights; and
1492	1494		732
1493	1495		(viii) the designation of a unit operator.
1494	1496		733
1495	1497		(b)(i) The allocation under Subsection (3)(a)(ii) shall be in accord with the
1496	1498		734
1497	1499		agreement, if any, of the interested parties.
1498	1500		735
1499	1501		(ii) If there is no agreement, the board shall determine the relative value, from
1500	1502		736
1501	1503		evidence introduced at the hearing, of the separately owned tracts in the brine field
1502	1504		737
1503	1505		unit area and the production allocated to each tract shall be the proportion that the
1504	1506		738
1505	1507		relative value of each tract so determined bears to the relative value of all tracts in
1506	1508		739
1507	1509		the brine field unit area.
1508	1510		740
1509	1511		(4)(a) An order of the board providing for unit operations of a reservoir may not become
1510	1512		741
1511	1513		effective unless and until:
1512		-	- 22 - Enrolled Copy H.B. 478
1513	1514		742
1514	1515		(i) the plan for unit operations prescribed by the order has been approved in writing
	1516	+	- 22 - 03-01 17:41 1st Sub. (Buff) H.B. 478
1515	1517		743
1516	1518		by:
1517	1519		744
1518	1520		(A) those owners who, under the board's order, will be required to pay 70% of the
1519	1521		745
1520	1522		costs of the unit operation; and
1521	1523		746
1522	1524		(B) the owners of 70% of the production or brine proceeds that will be credited to
1523	1525		747
1524	1526		interests that are free of costs, such as royalties, overriding royalties, and
1525	1527		748
1526	1528		production payments; and
1527	1529		749
1528	1530		(ii) the board makes a finding, either in the order providing for unit operations or in a
1529	1531		750
1530	1532		supplemental order, that the plan for unit operations has been so approved.
1531	1533		751
1532	1534		(b) If the persons owning required percentage of interest in a brine field unit area do not
1533	1535		752
1534		-	approve the plan for unit operations ~~within~~ six months from the date on which the
	1536	+	approve the plan for unit operations with six months from the date on which the order
1535	1537		753
1536		-	~~order~~ providing for unit operations is made, the order is ineffective and the board
	1538	+	providing for unit operations is made, the order is ineffective and the board shall
1537	1539		754
1538		-	~~shall~~ revoke the order unless good cause exists to extend the time.
	1540	+	revoke the order unless good cause exists to extend the time.
1539	1541		755
1540	1542		(5) An order providing for unit operations may be amended by an order made by the board
1541	1543		756
1542	1544		in the same manner and subject to the same conditions as an original order providing for
1543	1545		757
1544	1546		unit operations.
1545	1547		758
1546	1548		(6)(a) Operations, including the commencement, drilling, or operation of a brine well
1547	1549		759
1548	1550		upon any portion of the brine field unit area is considered for all purposes the conduct
1549	1551		760
1550	1552		of operations upon each separately owned tract in the brine field unit area by the
1551	1553		761
1552	1554		several owners.
1553	1555		762
1554	1556		(b) The portions of the unit production allocated to a separately owned tract in a brine
1555	1557		763
1556	1558		field unit area shall, when produced, be considered, for all purposes, to have been
1557	1559		764
1558	1560		actually produced from the tract by a brine well drilled.
1559	1561		765
1560	1562		(7) Operations carried on under the plan of unitization shall constitute a fulfillment of all of
1561	1563		766
1562	1564		the provisions of the brine leases or other contracts upon lands included within the brine
1563	1565		767
1564	1566		field unit area insofar as the leases or contracts may relate to the reservoir or portion of
1565	1567		768
1566	1568		the reservoir included within the brine field unit.
1567	1569		769
1568	1570		Section 12. Section 40-13-401 is enacted to read:
1569	1571		770
1570	1572
1571	1573		Part 4. Brine Mining Operations
1572	1574		771
1573	1575		40-13-401 . Permits required.
1574	1576		772
1575	1577		(1) A person may not engage in brine mining operations in the state without a permit.
1576	1578		773
1577	1579		(2) A person may only transfer a permit to another person with permission of the division.
1578	1580		774
1579	1581		(3) The division may issue a permit:
1580	1582		775
1581	1583		(a) authorizing construction, operation, maintenance, and cessation of processing and
1582		-	- 23 - H.B. 478 Enrolled Copy
1583	1584		776
1584	1585		refining facilities and brine wells; and
	1586	+	- 23 - 1st Sub. (Buff) H.B. 478 03-01 17:41
1585	1587		777
1586	1588		(b) approving, as part of that permit, post-cessation reclamation of the site.
1587	1589		778
1588	1590		(4) As a condition for approval of a permit, the owner and operator shall furnish surety in
1589	1591		779
1590	1592		an amount determined by the division to cover reclamation costs for the facility and any
1591	1593		780
1592	1594		associated brine wells.
1593	1595		781
1594	1596		(5) Approval of a permit is conditioned upon compliance with the laws, rules, and orders of
1595	1597		782
1596	1598		the board.
1597	1599		783
1598	1600		(6) The board may order the closure of a facility and any associated brine wells:
1599	1601		784
1600	1602		(a) if adequate surety is not posted;
1601	1603		785
1602	1604		(b) if a violation of the laws, rules, and orders of the board exists and is not abated; or
1603	1605		786
1604	1606		(c) for a significant violation of federal or state law not described in Subsection (6)(b) or
1605	1607		787
1606	1608		substantial cause related to a natural disaster or imminent property destruction.
1607	1609		788
1608	1610		Section 13. Section 40-13-402 is enacted to read:
1609	1611		789
1610	1612		40-13-402 . Payment of brine proceeds.
1611	1613		790
1612	1614		(1)(a) A payor shall pay the brine proceeds derived from the sale of the minerals
1613	1615		791
1614	1616		extracted from the brine to persons legally entitled to payment of the brine proceeds
1615	1617		792
1616	1618		not later than 180 days after the date of first sale, and thereafter not later than 60 days
1617	1619		793
1618	1620		after the end of the calendar month within which brine proceeds are received for
1619	1621		794
1620	1622		subsequent production.
1621	1623		795
1622	1624		(b) A payor shall make a payment directly to the person entitled to the payment by the
1623	1625		796
1624	1626		payor.
1625	1627		797
1626	1628		(c) A payor shall include the following information with each payment made to a person
1627	1629		798
1628	1630		entitled to payment of brine proceeds from the sale of the mined minerals:
1629	1631		799
1630	1632		(i) unit identification;
1631	1633		800
1632	1634		(ii) month and year of sales included in the payment;
1633	1635		801
1634	1636		(iii) total volume of production from the unit of brine and volumes of minerals
1635	1637		802
1636	1638		extracted;
1637	1639		803
1638	1640		(iv) owner's interest, expressed as a decimal, in production from the unit;
1639	1641		804
1640	1642		(v) total value of extracted dissolved minerals and chemical substances, including the
1641	1643		805
1642	1644		price per unit of measurement at which the products were sold;
1643	1645		806
1644	1646		(vi) owner's share of the total value of sales prior to any deductions;
1645	1647		807
1646	1648		(vii) owner's share of the total value of sales after any deductions; and
1647	1649		808
1648	1650		(viii) a detailed listing of the amount and purpose of any deductions.
1649	1651		809
1650	1652		(2)(a) A delay in determining whether a person is legally entitled to an interest in the
1651		-	- 24 - Enrolled Copy H.B. 478
1652	1653		810
1653	1654		brine proceeds does not affect payments to other persons entitled to payment.
	1655	+	- 24 - 03-01 17:41 1st Sub. (Buff) H.B. 478
1654	1656		811
1655		-	(b) If accrued payments cannot be made within the time limits specified in Subsection ~~(1),~~
	1657	+	(b) If accrued payments cannot be made within the time limits specified in Subsection
1656	1658		812
1657		-	the payor shall deposit the brine proceeds credited to the eventual brine proceeds
	1659	+	(1), the payor shall deposit the brine proceeds credited to the eventual brine proceeds
1658	1660		813
1659	1661		owner to an escrow account in a federally insured bank or savings and loan
1660	1662		814
1661	1663		institution using a standard escrow document form.
1662	1664		815
1663	1665		(c) An escrow agent shall pay the principal and accrued interest from the escrow account
1664	1666		816
1665	1667		to the person legally entitled to the principal and interest within 30 days from the date
1666	1668		817
1667	1669		of receipt by the escrow agent of final legal determination of entitlement to the
1668	1670		818
1669	1671		payment.
1670	1672		819
1671	1673		Section 14. Repealer.
1672	1674		820
1673	1675		This bill repeals:
1674	1676		821
1675	1677		Section 40-8-24, Brine mining.
1676	1678		822
1677	1679		Section 15. Effective Date.
1678	1680		823
1679	1681		This bill takes effect on May 7, 2025.
1680	1682		- 25 -