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  S.B. No. 1670
 
 
 
 
AN ACT
  relating to certificates of compliance issued by the Railroad
  Commission of Texas to owners or operators of certain wells subject
  to the jurisdiction of the commission.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter E, Chapter 85, Natural Resources
  Code, is redesignated as Subchapter P, Chapter 91, Natural
  Resources Code, and amended to read as follows:
  SUBCHAPTER P [E]. CERTIFICATE OF COMPLIANCE
         Sec. 91.701 [85.161].  WELL OWNERS AND OPERATORS
  CERTIFICATES. The owner or operator of any well subject to the
  jurisdiction of the commission under this title, Section 26.131,
  Water Code, or Subchapter C, Chapter 27, Water Code, shall secure
  from the commission a certificate showing compliance with that
  title, section, or subchapter, as applicable, rules adopted and
  orders issued under that title, section, or subchapter, as
  applicable, and any license, permit, or certificate issued to the
  owner or operator under that title, section, or subchapter, as
  applicable [the oil or gas conservation laws of the state and
  conservation rules and orders of the commission].
         Sec. 91.702 [85.162].  PROHIBITED CONNECTION. No operator
  of a pipeline or other carrier shall connect with any [oil or gas]
  well subject to the jurisdiction of the commission under this
  title, Section 26.131, Water Code, or Subchapter C, Chapter 27,
  Water Code, until the owner or operator of the well furnishes a
  certificate from the commission that the owner or operator has
  complied with that title, section, or subchapter, as applicable,
  rules adopted and orders issued under that title, section, or
  subchapter, as applicable, and any license, permit, or certificate
  issued to the owner or operator under that title, section, or
  subchapter, as applicable [the conservation laws of this state and
  the rules and orders of the commission].
         Sec. 91.703 [85.163].  TEMPORARY CONNECTION. The
  provisions of this subchapter do not prevent a temporary connection
  with a well in order to take care of production and prevent waste
  until opportunity shall have been given the owner or operator of the
  well to secure the certificate.
         Sec. 91.704 [85.164].  CANCELLATION OF CERTIFICATE. The
  commission may cancel any certificate of compliance issued under
  the provisions of this subchapter if it appears that the owner or
  operator of a well covered by the provisions of the certificate, in
  the operation of the well or the production of oil or gas from the
  well, has violated or is violating this title, Section 26.131,
  Water Code, or Subchapter C, Chapter 27, Water Code, a rule adopted
  or order issued under that title, section, or subchapter, as
  applicable, or a license, permit, or certificate issued to the
  owner or operator under that title, section, or subchapter, as
  applicable [the oil and gas conservation laws of this state or rules
  or orders of the commission adopted under those laws].  Before
  canceling a certificate of compliance, the commission shall give
  notice to the owner or operator by personal service or by registered
  or certified mail of the facts or conduct alleged to warrant the
  cancellation and shall give the owner or operator an opportunity to
  show compliance with all requirements of law for retention of the
  certificate as required by Section 2001.054, Government Code.
         Sec. 91.705 [85.165].  EFFECT OF CANCELLATION ON OPERATOR OF
  PIPELINE OR OTHER CARRIER. (a)  On notice from the commission to
  the operator of a pipeline or other carrier connected to a [an oil
  or gas] well that the certificate of compliance pertaining to that
  well has been cancelled, the operator of the pipeline or other
  carrier shall disconnect from the well.
         (b)  It shall be unlawful for the operator of a pipeline or
  other carrier to reconnect to [transport oil from] the well until a
  new certificate of compliance has been issued by the commission.
         Sec. 91.706 [85.166].  EFFECT OF CANCELLATION ON OWNER OR
  OPERATOR OF WELL. (a)  On notice from the commission that a
  certificate of compliance for a [an oil or gas] well has been
  cancelled, it shall be unlawful for the owner or operator of the
  well to use [produce oil or gas from] the well for production,
  injection, or disposal until a new certificate of compliance
  covering the well has been issued by the commission.
         (b)  If an operator uses or reports use of a well for
  production, injection, or disposal for which the operator's
  certificate of compliance has been cancelled, the commission may
  refuse to renew the operator's organization report required by
  Section 91.142 until the operator pays the fee required by Section
  91.707 and the commission issues the certificate of compliance
  required for that well.
         Sec. 91.707 [85.167].  FEE FOR REISSUED CERTIFICATE.
  (a)  If a certificate of compliance for a [an oil lease or gas] well
  has been canceled for [violation of] 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 [commission
  rules], the commission may not issue a new certificate of
  compliance until the owner or operator submits to the commission a
  nonrefundable fee of $300 for each severance or seal order issued
  for the [lease or] well.
         (b)  Fees collected under this section shall be deposited to
  the oil-field cleanup fund.
         SECTION 2.  Subsection (a), Section 85.3855, Natural
  Resources Code, is amended to read as follows:
         (a)  The commission may impose an administrative penalty on a
  person who:
               (1)  violates Section 91.705 [85.165] or 91.706
  [85.166] or a rule or order adopted under Section 91.705 [85.165] or
  91.706 [85.166]; or
               (2)  knowingly destroys, breaks, removes, or otherwise
  tampers with, or attempts to destroy, break, remove, or otherwise
  tamper with, a cap, seal, or other device placed by the commission
  on an oil well, gas well, oil and gas well, or other associated oil
  or gas gathering equipment.
         SECTION 3.  Section 86.004, Natural Resources Code, is
  amended to read as follows:
         Sec. 86.004.  APPLICABILITY. The provisions in this chapter
  do not impair the authority of the commission to prevent waste under
  the oil and gas conservation laws of this state and do not repeal,
  modify, or impair any of the provisions relating to oil and gas
  conservation in Sections 85.002, 85.041 through 85.055, 85.056
  through 85.064, 85.125, 85.201 through 85.207, 85.241 through
  85.243, 85.249 through 85.252, and 85.381 through 85.385,
  Subchapter [of this code and Subchapters E and] J of Chapter 85, and
  Subchapter P of Chapter 91 [of this code].
         SECTION 4.  Subsection (c), Section 91.111, Natural
  Resources Code, is amended to read as follows:
         (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;
               (7)  proceeds collected under Sections 89.085 and
  91.115;
               (8)  interest earned on the funds deposited in the
  fund;
               (9)  civil penalties or costs recovered under Section
  91.457 or 91.459;
               (10)  oil and gas waste hauler permit application fees
  collected under Section 29.015, Water Code;
               (11)  costs recovered under Section 91.113(f);
               (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;
               (14)  oil-field cleanup regulatory fees on gas
  collected under Section 81.117;
               (15)  fees for a reissued certificate collected under
  Section 91.707 [85.167];
               (16)  fees collected under Section 91.1013;
               (17)  fees collected under Section 89.088;
               (18)  penalties collected under Section 81.0531;
               (19)  fees collected under Section 91.142;
               (20)  fees collected under Section 91.654;
               (21)  costs recovered under Sections 91.656 and 91.657;
               (22)  two-thirds of the fees collected under Section
  81.0521; and
               (23)  legislative appropriations.
         SECTION 5.  Subsections (a) and (h), Section 91.114, Natural
  Resources Code, are amended to read as follows:
         (a)  Except as provided by Subsection (d), the commission may
  not accept an organization report required under Section 91.142 or
  an application for a permit under this Chapter, Chapter 85, or
  Chapter 26, 27, or 29, Water Code, or approve a certificate of
  compliance under Section 91.701 [85.161] if:
               (1)  the organization that submitted the report,
  application, or certificate violated a statute or commission rule,
  order, license, certificate, or permit that relates to safety or
  the prevention or control of pollution; or
               (2)  a person who holds a position of ownership or
  control in the organization has, within the seven years preceding
  the date on which the report, application, or certificate is filed,
  held a position of ownership or control in another organization and
  during that period of ownership or control the other organization
  violated a statute or commission rule, order, license, permit, or
  certificate that relates to safety or the prevention or control of
  pollution.
         (h)  If the commission is prohibited by Subsection (a) from
  accepting an organization's organization report or application or
  approving the organization's certificate or would be prohibited
  from doing so by that subsection if the organization submitted a
  report, application, or certificate, the commission, after notice
  and opportunity for a hearing, by order may revoke:
               (1)  the organization's organization report filed under
  Section 91.142;
               (2)  a permit issued to the organization under this
  chapter, Chapter 85, or Chapter 26, 27, or 29, Water Code; or
               (3)  any certificate of compliance approved under
  Section 91.701 [85.161].
         SECTION 6.  Subsection (f), Section 91.142, Natural
  Resources Code, is amended to read as follows:
         (f)  If an entity described by Subsection (a) [of this
  section] does not maintain on file with the commission an
  organization report and financial security as required by this
  chapter:
               (1)  the entity may not perform operations under the
  jurisdiction of the commission except as necessary to remedy a
  violation of law or commission rules and as authorized by the
  commission; and
               (2)  the commission, on written notice, may suspend:
                     (A)  any permits held by the entity; or
                     (B)  any certificates of compliance approved
  under Subchapter P [Chapter 85 of this code].
         SECTION 7.  Section 101.003, Natural Resources Code, is
  amended to read as follows:
         Sec. 101.003.  APPLICABILITY. None of the provisions in
  this chapter impair the power of the commission to prevent waste
  under the oil and gas conservation laws of the state except as
  provided in Section 101.004 [of this code] or repeal, modify, or
  impair any of the provisions of Sections 85.002 through 85.003,
  85.041 through 85.055, 85.056 through 85.064, 85.125, 85.201
  through 85.207, 85.241 through 85.243, 85.249 through 85.252, or
  85.381 through 85.385, Subchapter [of this code or Subchapters E
  and] J of Chapter 85, or Subchapter P of Chapter 91 [of this code],
  relating to oil and gas conservation.
         SECTION 8.  This Act takes effect September 1, 2007.
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 1670 passed the Senate on
  April 12, 2007, by the following vote: Yeas 31, Nays 0; and that
  the Senate concurred in House amendment on May 21, 2007, by the
  following vote: Yeas 31, Nays 0.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 1670 passed the House, with
  amendment, on May 16, 2007, by the following vote: Yeas 143,
  Nays 0, two present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor