US Laws, Codes, Statutes & Cases

NATURAL RESOURCES CODE

CHAPTER 91. PROVISIONS GENERALLY APPLICABLE

SUBCHAPTER A. GENERAL PROVISIONS


	§ 91.001. DEFINITIONS.  In this chapter:                                    
		(1)  "Commission" means the Railroad Commission of 
Texas.                   
		(2)  "Gas" means natural gas.                                                 
		(3)  "Oil" means crude oil and crude petroleum oil.                           

Acts 1977, 65th Leg., p. 2560, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.002. CRIMINAL PENALTY.  (a) A person who wilfully or 
with criminal negligence violates Section 91.101 of this code or a 
rule, order, or permit of the commission issued under that section 
commits an offense.
	(b)  An offense under Subsection (a) of this section is 
punishable by a fine of not more than $10,000 a day for each day a 
violation is committed.
	(c)  Venue for prosecution of an alleged violation of this 
section is in a court of competent jurisdiction in the county in 
which the violation is alleged to have occurred.

Added by Acts 1983, 68th Leg., p. 5262, ch. 967, § 9, eff. Sept. 
1, 1983.  Renumbered from § 91.351 by Acts 1987, 70th Leg., ch. 
167, § 5.01(a)(32), eff. Sept. 1, 1987.


	§ 91.003. ADDITIONAL ENFORCEMENT AUTHORITY.  (a) In 
addition to other authority specifically granted to the commission 
under this chapter, the commission may enforce this chapter or any 
rule, order, or permit of the commission adopted under this chapter 
in the manner and subject to the conditions provided in Chapters 81 
and 85 of this code, including the authority to seek and obtain 
civil penalties and injunctive relief as provided by those 
chapters.
	(b)  If the enforcement authority in Section 81.054, Natural 
Resources Code, is used to institute a civil action alleging a 
violation of an NPDES permit issued under this chapter, the 
attorney general may not oppose intervention by a person who has 
standing to intervene as provided by Rule 60, Texas Rules of Civil 
Procedure.

Added by Acts 1983, 68th Leg., p. 5262, ch. 967, § 9, eff. Sept. 
1, 1983.  Renumbered from § 91.352 by Acts 1987, 70th Leg., ch. 
167, § 5.01(a)(32), eff. Sept. 1, 1987.  Amended by Acts 1995, 
74th Leg., ch. 310, § 6, eff. Aug. 28, 1995.

SUBCHAPTER B. DUTIES RELATING TO OIL AND GAS WELLS


	§ 91.011. CASING.  Before drilling into the oil or gas 
bearing rock, the owner or operator of a well being drilled for oil 
or gas shall encase the well with good and sufficient wrought iron 
or steel casing or with any other material that meets standards 
adopted by the commission, particularly where wells could be 
subjected to corrosive elements or high pressures and temperatures, 
in a manner that will exclude surface or fresh water from the lower 
part of the well from penetrating the oil or gas bearing rock, and 
if the well is drilled through the first into the lower oil or gas 
bearing rock, the well shall be cased in a manner that will exclude 
fresh water above the last oil or gas bearing rock penetrated.

Acts 1977, 65th Leg., p. 2560, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1985, 69th Leg., ch. 704, § 1, eff. Aug. 
26, 1985.


	§ 91.012. WATER IN WELLS.  (a) In boring any well for oil 
or gas, if a person pierces any cap rock or other geological 
formation in a manner that will cause a flow of salt water or fresh 
water injurious to an already bored oil well or any oil or gas 
deposits and that will probably result in the injury of the oil or 
gas field or already bored oil or gas well, the person shall abandon 
immediately all work on the well if the flow of water cannot be 
cased off and shall plug and fill the well in a manner and with 
materials that will stop the flow of the water.
	(b)  No well owner or person boring a well described under 
Subsection (a) of this section may remove the casing from the 
drilled well until the flow of water is stopped either by casing off 
or plugging the well.
	(c)  The provisions of this section apply only if the cap 
rock or other formation is pierced at a depth below the horizon at 
which oil or gas has been discovered already.

Acts 1977, 65th Leg., p. 2560, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.013. PLUGGING AND SHUTTING IN WELLS BY OTHERS.  (a) 
If the owner of a well described in Subsection (a) of Section 91.012 
of this code neglects or refuses to have the well plugged or shut in 
for more than 20 days after written notice is given to him, the 
owner or operator of adjacent or neighboring land may enter the 
premises on which the well is located and have the well plugged if 
it is an abandoned well or shut in if it is not abandoned, in the 
manner provided by law.
	(b)  Notice may be given to the owner of the well either by 
personal service on the owner or by posting the notice at a 
conspicuous place at or near the well.
	(c)  The reasonable cost and expense incurred in plugging or 
shutting in the well shall be paid by the owner of the well and may 
be recovered as debts of like amount are recovered under the law.

Acts 1977, 65th Leg., p. 2560, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.014. PETITION TO RESTRAIN WASTE.  (a) In addition to 
any other penalties, a district judge, in term time or vacation 
time, shall hear and determine any petition that is filed to 
restrain the waste of gas in violation of this subchapter and may 
issue mandatory or restraining orders that in his judgment are 
necessary.
	(b)  The petition may be filed by any citizen of this state 
and does not have to allege further financial interest of the 
petitioner in the state's natural resources than that possessed in 
common with all citizens of the state.

Acts 1977, 65th Leg., p. 2561, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.015. PREVENTION OF WASTE.  Operators, contractors, 
drillers, pipeline companies, and gas distributing companies that 
drill for or produce oil or gas or pipe oil or gas for any purpose 
shall use every possible precaution in accordance with the most 
approved methods to stop and prevent waste of oil, gas, or both oil 
and gas in drilling and producing operations, storage, piping, and 
distribution and shall not wastefully use oil or gas or allow oil or 
gas to leak or escape from natural reservoirs, wells, tanks, 
containers, or pipes.

Acts 1977, 65th Leg., p. 2561, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.016. CONFINING GAS TO ORIGINAL STRATUM.  (a) If gas 
located in a gas-bearing stratum known to contain gas in paying 
quantities is encountered in a well drilled for oil or gas in this 
state, the gas shall be confined to its original stratum until it 
can be produced and used without waste.
	(b)  Gas-bearing strata shall be adequately protected from 
infiltrating water.

Acts 1977, 65th Leg., p. 2561, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.017. USING GAS IN THE OPEN AIR.  (a) Any person who 
uses gas in lights in the open air or in or around derricks shall 
turn off the gas not later than 8 a. m. of each day the lights are 
burning or are used and shall not turn the lights on or relight them 
between 8 a. m. and 5 p. m.
	(b)  The person consuming the gas and using the burners in 
the open air shall enclose them in glass globes or lamps.

Acts 1977, 65th Leg., p. 2561, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.018. ILLUMINATION.  No person, copartnership, or 
corporation may use gas for illuminating purposes in flambeau 
lights.  The use of "jumbo" burners or other burners consuming no 
more gas than the "jumbo" burners is not prohibited.

Acts 1977, 65th Leg., p. 2561, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 

SUBCHAPTER C. STANDARD GAS MEASUREMENT


	§ 91.051. TITLE.  This subchapter may be cited as the 
Standard Gas Measurement Law.

Acts 1977, 65th Leg., p. 2561, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.052. DEFINITION.  (a) The term "cubic foot of gas" or 
"standard cubic foot of gas" means the volume of gas contained in 
one cubic foot of space at a standard pressure base and at a 
standard temperature base.
	(b)  The standard pressure base shall be 14.65 pounds per 
square inch absolute, and the standard temperature base shall be 60 
degrees Fahrenheit.  If the conditions of pressure and temperature 
differ from this standard, conversion of the volume from these 
conditions to the standard conditions shall be made in accordance 
with the ideal gas laws, corrected for deviation.

Acts 1977, 65th Leg., p. 2562, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.053. COMMISSION DETERMINATION.  The commission 
shall determine the average temperature of gas as produced in each 
oil and gas field in Texas, other variable factors necessary to 
calculate the metered volumes in accordance with the ideal gas 
laws, and the variable factors to correct for deviation from the 
ideal gas laws in each of the oil and gas fields in the state.

Acts 1977, 65th Leg., p. 2562, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.054. NOTICE AND HEARING.  On request of any 
interested person, the commission shall give proper notice and hold 
a public hearing before making a determination under Section 91.053 
of this code.

Acts 1977, 65th Leg., p. 2562, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.055. FINDINGS AND RULES.  On making the 
determination, the commission promptly shall make its findings and 
shall adopt reasonable field rules that may be necessary to 
effectuate the provisions of this subchapter.

Acts 1977, 65th Leg., p. 2562, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.056. USE OF FINDINGS AND FIELD RULES.  (a) Any person 
may use the findings and field rules of the commission for any 
purposes under this subchapter.
	(b)  If the findings or field rules are not used as provided 
in Subsection (a) of this section in determining volumes under this 
subchapter, the volumes otherwise determined shall be corrected to 
the basis of the standard cubic foot of gas as defined in Section 
91.052 of this code.

Acts 1977, 65th Leg., p. 2562, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.057. METHOD OF REPORTING.  A person required to 
report volumes of gas under the laws of this state shall report the 
volumes in number of standard cubic feet calculated and determined 
under the provisions of this subchapter.

Acts 1977, 65th Leg., p. 2562, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.058. SALE, PURCHASE, DELIVERY, AND RECEIPT OF 
GAS.  (a) Each sale, purchase, delivery, and receipt of gas by 
volume made in this state by, for, or on behalf of an oil and gas 
lease owner, royalty owner under a lease, or other mineral interest 
owner shall be made and the gas shall be measured, calculated, 
purchased, delivered, and accounted for on the basis of a standard 
cubic foot of gas as defined in this subchapter and determined under 
this subchapter.
	(b)  If the provisions of this subchapter operate to change 
the basis of measurement provided in existing contracts, the price 
for gas, including royalty gas, provided for in the contracts shall 
be adjusted to compensate for the change in the method of measuring 
the volume of gas delivered under the contracts if either the 
purchaser or seller so desires.
	(c)  This section is intended to protect parties to contracts 
in existence on October 4, 1949, so that the total amount of money 
paid for a volume of gas purchased or required to be accounted for 
under these contracts shall remain unaffected by this subchapter.

Acts 1977, 65th Leg., p. 2562, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.059. CONSTITUTIONALITY.  If the provisions of 
Section 91.058 of this code or any part of that section are held to 
be invalid or unconstitutional by the courts, the remaining 
portions of this subchapter shall become ineffective and 
inoperative.

Acts 1977, 65th Leg., p. 2563, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.061. CIVIL SUIT.  None of these provisions shall 
prevent an aggrieved person from maintaining a civil suit for 
damages in the county or counties in which the gas is produced.

Acts 1977, 65th Leg., p. 2563, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.062. APPLICABILITY OF CERTAIN PROVISIONS.  None of 
the provisions of Sections 91.058 through 91.061 of this code 
affect or apply to purchases or sales made on any basis other than a 
volume basis.

Acts 1977, 65th Leg., p. 2563, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 

SUBCHAPTER D. PREVENTION OF POLLUTION




	§ 91.101. RULES AND ORDERS.                                                 

Text of section effective until delegation of RCRA authority to 
Railroad Commission of Texas
	(a)  To prevent pollution of surface water or subsurface 
water in the state, the commission shall adopt and enforce rules and 
orders and may issue permits relating to:
		(1)  the drilling of exploratory wells and oil and gas 
wells or any purpose in connection with them;
		(2)  the production of oil and gas, including:                                
			(A)  activities associated with the drilling of 
injection water source wells which penetrate the base of useable 
quality water;
			(B)  activities associated with the drilling of 
cathodic protection holes associated with the cathodic protection 
of wells and pipelines subject to the jurisdiction of the 
commission;
			(C)  activities associated with gasoline plants, 
natural gas or natural gas liquids processing plants, pressure 
maintenance plants, or repressurizing plants;
			(D)  activities associated with any underground 
natural gas storage facility, provided the terms "natural gas" and 
"storage facility" shall have the meanings set out in Section 
91.173, Natural Resources Code;
			(E)  activities associated with any underground 
hydrocarbon storage facility, provided the terms "hydrocarbons" 
and "underground hydrocarbon storage facility" shall have the 
meanings set out in Section 91.201, Natural Resources Code;  and
			(F)  activities associated with the storage, 
handling, reclamation, gathering, transportation, or distribution 
of oil or gas prior to the refining of such oil or prior to the use 
of such gas in any manufacturing process or as a residential or 
industrial fuel;
		(3)  the operation, abandonment, and proper plugging of 
wells subject to the jurisdiction of the commission;  and
		(4)  the discharge, storage, handling, transportation, 
reclamation, or disposal of oil and gas waste as defined in Section 
91.1011 of this subchapter, or of any other substance or material 
associated with any operation or activity regulated by the 
commission under Subdivisions (1), (2), and (3) of this subsection.
	(b)  Notwithstanding the provisions of Subsection (a) of 
this section, the authority granted to the commission by this 
section does not include the authority to adopt and enforce rules 
and orders or issue permits regarding the collection, storage, 
handling, transportation, processing, or disposal of waste arising 
out of or incidental to activities associated with gasoline plants, 
natural gas or natural gas liquids processing plants, pressure 
maintenance plants, or repressurizing plants if that waste is a 
hazardous waste as defined by the administrator of the United 
States Environmental Protection Agency pursuant to the federal 
Solid Waste Disposal Act, as amended by the Resource Conservation 
and Recovery Act, 42 U.S.C. 6901 et seq., as amended.

Acts 1977, 65th Leg., p. 2563, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5258, ch. 967, § 6, 
eff. Sept. 1, 1983;  Acts 1985, 69th Leg., ch. 921, § 4, eff. June 
15, 1985.

For text of section effective upon delegation of RCRA authority to 
Railroad Commission of Texas, see § 91.101, post




	§ 91.101. RULES AND ORDERS.                                                 

Text of section effective upon delegation of RCRA authority to 
Railroad Commission of Texas
	To prevent pollution of surface water or subsurface water in 
the state, the commission shall adopt and enforce rules and orders 
and may issue permits relating to:
		(1)  the drilling of exploratory wells and oil and gas 
wells or any purpose in connection with them;
		(2)  the production of oil and gas, including:                                
			(A)  activities associated with the drilling of 
injection water source wells which penetrate the base of useable 
quality water;
			(B)  activities associated with the drilling of 
cathodic protection holes associated with the cathodic protection 
of wells and pipelines subject to the jurisdiction of the 
commission;
			(C)  activities associated with gasoline plants, 
natural gas or natural gas liquids processing plants, pressure 
maintenance plants, or repressurizing plants;
			(D)  activities associated with any underground 
natural gas storage facility, provided the terms "natural gas" and 
"storage facility" shall have the meanings set out in Section 
91.173, Natural Resources Code;
			(E)  activities associated with any underground 
hydrocarbon storage facility, provided the terms "hydrocarbons" 
and "underground hydrocarbon storage facility" shall have the 
meanings set out in Section 91.201, Natural Resources Code;  and
			(F)  activities associated with the storage, 
handling, reclamation, gathering, transportation, or distribution 
of oil or gas prior to the refining of such oil or prior to the use 
of such gas in any manufacturing process or as a residential or 
industrial fuel;
		(3)  the operation, abandonment, and proper plugging of 
wells subject to the jurisdiction of the commission;  and
		(4)  the discharge, storage, handling, transportation, 
reclamation, or disposal of oil and gas waste as defined in Section 
91.1011 of this subchapter, or of any other substance or material 
associated with any operation or activity regulated by the 
commission under Subdivisions (1), (2), and (3) of this section.

Acts 1977, 65th Leg., p. 2563, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5258, ch. 967, § 6, 
eff. Sept. 1, 1983;  Acts 1985, 69th Leg., ch. 921, § 4, eff. June 
15, 1985.

For text of section effective until delegation of RCRA authority to 
Railroad Commission of Texas, see § 91.101, ante




	§ 91.1011. OIL AND GAS WASTE.                                               

Text of section effective until delegation of RCRA authority to 
Railroad Commission of Texas
	(a)  In this subchapter, "oil and gas waste" means waste that 
arises out of or incidental to the drilling for or producing of oil 
or gas, including waste arising out of or incidental to:
		(1)  activities associated with the drilling of 
injection water source wells which penetrate the base of useable 
quality water;
		(2)  activities associated with the drilling of 
cathodic protection holes associated with the cathodic protection 
of wells and pipelines subject to the jurisdiction of the 
commission;
		(3)  activities associated with gasoline plants, 
natural gas or natural gas liquids processing plants, pressure 
maintenance plants, or repressurizing plants;
		(4)  activities associated with any underground 
natural gas storage facility, provided the terms "natural gas" and 
"storage facility" shall have the meanings set out in Section 
91.173, Natural Resources Code;
		(5)  activities associated with any underground 
hydrocarbon storage facility, provided the terms "hydrocarbons" 
and "underground hydrocarbon storage facility" shall have the 
meanings set out in Section 91.201, Natural Resources Code;  and
		(6)  activities associated with the storage, handling, 
reclamation, gathering, transportation, or distribution of oil or 
gas prior to the refining of such oil or prior to the use of such gas 
in any manufacturing process or as a residential or industrial 
fuel.
	(b)  "Oil and gas waste" includes salt water, brine, sludge, 
drilling mud, and other liquid, semiliquid, or solid waste 
material, but does not include waste arising out of or incidental to 
activities associated with gasoline plants, natural gas or natural 
gas liquids processing plants, pressure maintenance plants, or 
repressurizing plants if that waste is a hazardous waste as defined 
by the administrator of the United States Environmental Protection 
Agency pursuant to the federal Solid Waste Disposal Act, as amended 
by the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et 
seq., as amended.

Added by Acts 1983, 68th Leg., p. 5060, ch. 967, § 7, eff. Sept. 
1, 1983.  Amended by Acts 1985, 69th Leg., ch. 921, § 4, eff. June 
15, 1985.

For text of section effective upon delegation of RCRA authority to 
Railroad Commission of Texas, see § 91.1011, post




	§ 91.1011. OIL AND GAS WASTE.                                               

Text of section effective upon delegation of RCRA authority to 
Railroad Commission of Texas
	(a)  In this subchapter, "oil and gas waste" means waste that 
arises out of or incidental to the drilling for or producing of oil 
or gas, including waste arising out of or incidental to:
		(1)  activities associated with the drilling of 
injection water source wells which penetrate the base of useable 
quality water;
		(2)  activities associated with the drilling of 
cathodic protection holes associated with the cathodic protection 
of wells and pipelines subject to the jurisdiction of the 
commission;
		(3)  activities associated with gasoline plants, 
natural gas or natural gas liquids processing plants, pressure 
maintenance plants, or repressurizing plants;
		(4)  activities associated with any underground 
natural gas storage facility, provided the terms "natural gas" and 
"storage facility" shall have the meanings set out in Section 
91.173, Natural Resources Code;
		(5)  activities associated with any underground 
hydrocarbon storage facility, provided the terms "hydrocarbons" 
and "underground hydrocarbon storage facility" shall have the 
meanings set out in Section 91.201, Natural Resources Code;  and
		(6)  activities associated with the storage, handling, 
reclamation, gathering, transportation, or distribution of oil or 
gas prior to the refining of such oil or prior to the use of such gas 
in any manufacturing process or as a residential or industrial 
fuel.
	(b)  "Oil and gas waste" includes salt water, brine, sludge, 
drilling mud, and other liquid, semiliquid, or solid waste 
material.

Added by Acts 1983, 68th Leg., p. 5060, ch. 967, § 7, eff. Sept. 
1, 1983.  Amended by Acts 1985, 69th Leg., ch. 921, § 4, eff. June 
15, 1985.

For text of section effective until delegation of RCRA authority to 
Railroad Commission of Texas, see § 91.1011, ante


	§ 91.1012. ACCESS TO PROPERTY AND RECORDS.  Members and 
employees of the commission, on proper identification, may enter 
public or private property to inspect and investigate conditions 
relating to the quality of water in the state, to inspect and 
investigate conditions relating to development of rules, orders, or 
permits issuable under Section 91.101 of this code, to monitor 
compliance with a rule, permit, or other order of the commission, or 
to examine and copy, during reasonable working hours, those records 
or memoranda of the business being investigated.  Members or 
employees acting under the authority of this section who enter an 
establishment on public or private property shall observe the 
establishment's safety, internal security, and fire protection 
rules.

Added by Acts 1983, 68th Leg., p 5260, ch. 967, § 7, eff. Sept. 1, 
1983. 


	§ 91.1013. APPLICATION FEES.  (a) With each application 
for a fluid injection well permit, the applicant shall submit to the 
commission a nonrefundable fee of $200. In this section, "fluid 
injection well" means any well used to inject fluid or gas into the 
ground in connection with the exploration or production of oil or 
gas other than an oil and gas waste disposal well regulated by the 
commission pursuant to Chapter 27, Water Code.
	(b)  With each application for a permit to discharge to 
surface water under this chapter and commission rules, other than a 
permit for a discharge that meets National Pollutant Discharge 
Elimination System requirements for agricultural or wildlife use, 
the applicant shall submit to the commission a nonrefundable fee of 
$300.
	(c)  Fees collected under this section shall be deposited in 
the state oil-field cleanup fund.

Added by Acts 1985, 69th Leg., ch. 239, § 72, eff. Sept. 1, 1985.  
Amended by Acts 1991, 72nd Leg., ch. 603, § 14, eff. Sept. 1, 
1991;  Acts 1999, 76th Leg., ch. 1089, § 3, eff. Sept. 1, 1999;  
Acts 2001, 77th Leg., ch. 1233, § 17, eff. Sept. 1, 2001.


	§ 91.102. ADDITIONAL PERSONNEL.  The commission is 
directed to employ additional personnel necessary to administer 
this subchapter and related laws and rules and orders adopted by the 
commission.

Acts 1977, 65th Leg., p. 2563, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5258, ch. 967, § 6, 
eff. Sept. 1, 1983.


	§ 91.103. PERSONS REQUIRED TO EXECUTE BOND, LETTER OF 
CREDIT, OR CASH DEPOSIT.  Any person, including any firm, 
partnership, joint stock association, corporation, or other 
organization, required to file an organization report under Section 
91. 142 of this code shall execute and file with the commission a 
bond, letter of credit, or cash deposit.

Acts 1977, 65th Leg., p. 2564, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5258, ch. 967, § 6, 
eff. Sept. 1, 1983;  Acts 1991, 72nd Leg., ch. 603, § 8, eff. 
Sept. 1, 1991;  Acts 2001, 77th Leg., ch. 1233, § 18, eff. Sept. 
1, 2004.


	§ 91.104. BONDS, LETTERS OF CREDIT, CASH DEPOSITS, AND 
WELL-SPECIFIC PLUGGING INSURANCE POLICIES.  (a) The commission 
shall require a bond, letter of credit, or cash deposit to be filed 
with the commission as provided by Subsection (b).
	(b)  A person required to file a bond, letter of credit, or 
cash deposit under Section 91.103 who is an inactive operator or who 
operates one or more wells must, at the time of filing or renewing 
an organization report required by Section 91.142, file:
		(1)  an individual bond as provided under Section 
91.1041;                  
		(2)  a blanket bond as provided under Section 91.1042;  
or                  
		(3)  a letter of credit or cash deposit in the same 
amount as required for an individual bond under Section 91.1041 or a 
blanket bond under Section 91.1042.
	(c)  A person required to file a bond, letter of credit, or 
cash deposit under Section 91.103 who operates one or more wells is 
considered to have met that requirement for a well if the well bore 
is included in a well-specific plugging insurance policy that:
		(1)  is approved by the Texas Department of Insurance;                        
		(2)  names this state as the owner and contingent 
beneficiary of the policy;
		(3)  names a primary beneficiary who agrees to plug the 
specified well bore;
		(4)  is fully prepaid and cannot be canceled or 
surrendered;                
		(5)  provides that the policy continues in effect until 
the specified well bore has been plugged;
		(6)  provides that benefits will be paid when, but not 
before, the specified well bore has been plugged in accordance with 
commission rules in effect at the time of plugging;  and
		(7)  provides benefits that equal the greatest of:                            
			(A)  an amount equal to $2 for each foot of well 
depth, as determined in the manner specified by the commission, for 
the specified well;
			(B)  if the specified well is a bay well and 
regardless of whether the well is producing oil or gas, the amount 
required under commission rules for a bay well that is not producing 
oil or gas;
			(C)  if the specified well is an offshore well and 
regardless of whether the well is producing oil or gas, the amount 
required under commission rules for an offshore well that is not 
producing oil or gas;  or
			(D)  the payment otherwise due under the policy 
for plugging the well bore.

Acts 1977, 65th Leg., p. 2564, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5258, ch. 967, § 6, 
eff. Sept. 1, 1983;  Acts 1991, 72nd Leg., ch. 603, § 9, eff. 
Sept. 1, 1991;  Acts 1999, 76th Leg., ch. 30, § 1, eff. Aug. 30, 
1999;  Acts 2001, 77th Leg., ch. 1233, § 19, eff. Sept. 1, 2001;  
Acts 2001, 77th Leg., ch. 1233, § 20, eff. Sept. 1, 2004;  Acts 
2003, 78th Leg., ch. 490, § 1, eff. Sept. 1, 2004;  Acts 2005, 
79th Leg., ch. 489, § 1, eff. June 17, 2005.


	§ 91.1041. INDIVIDUAL BOND.  (a) A person required to 
file a bond, letter of credit, or cash deposit under Section 91.103 
who operates one or more wells may file a bond in an amount equal to 
$2 for each foot of well depth for each well.
	(b)  Notwithstanding Subsection (a), the commission by rule 
shall set the amount of the bond for an operator of one or more bay 
or offshore wells at a reasonable amount that exceeds the amount 
provided by Subsection (a).
	(c)  When calculating under Subsection (a) the amount of the 
bond a person who operates one or more wells is required to file, 
the commission shall exclude a well if the well bore is included in 
a well-specific plugging insurance policy described by Section 
91.104(c).
	(d)  If the inclusion of a bay or offshore well whose well 
bore is included in a well-specific plugging insurance policy 
described by Section 91.104(c) in the calculation under Subsection 
(b) of the amount of the bond an operator of one or more bay or 
offshore wells is required to file would result in an increase in 
the amount of the bond that would otherwise be required, the rules 
must provide for the exclusion of the well from the calculation.

Added by Acts 1991, 72nd Leg., ch. 603, § 10, eff. Sept. 1, 1991.  
Amended by Acts 2001, 77th Leg., ch. 1233, § 21, eff. Sept. 1, 
2001;  Acts 2001, 77th Leg., ch. 1233, § 22, eff. Sept. 1, 2004;  
Acts 2005, 79th Leg., ch. 489, § 2, eff. June 17, 2005.


	§ 91.1042. BLANKET BOND.  (a) A person required to file a 
bond, letter of credit, or cash deposit under Section 91.103 may 
file a blanket bond to cover all wells for which a bond, letter of 
credit, or cash deposit is required as follows:
		(1)  a person who operates 10 or fewer wells shall file 
a $25,000 blanket bond;
		(2)  a person who operates more than 10 but fewer than 
100 wells shall file a $50,000 blanket bond;  and
		(3)  a person who operates 100 or more wells shall file 
a $250,000 blanket bond.
	(b)  Notwithstanding Subsection (a), the commission by rule 
shall set the amount of the bond for an operator of bay or offshore 
wells at a reasonable amount that exceeds the amount provided by 
Subsection (a)(1), (2), or (3), as applicable.
	(c)  When calculating the number of an operator's wells for 
purposes of Subsection (a), the commission shall exclude a well if 
the well bore is included in a well-specific plugging insurance 
policy described by Section 91.104(c).
	(d)  If the inclusion of a bay or offshore well whose well 
bore is included in a well-specific plugging insurance policy 
described by Section 91.104(c) in the calculation under Subsection 
(b) of the amount of the bond an operator of bay or offshore wells is 
required to file would result in an increase in the amount of the 
bond that would otherwise be required, the rules must provide for 
the exclusion of the well from the calculation.

Added by Acts 1991, 72nd Leg., ch. 603, § 10, eff. Sept. 1, 1991.  
Amended by Acts 2001, 77th Leg., ch. 1233, § 23, eff. Sept. 1, 
2001;  Acts 2001, 77th Leg., ch. 1233, § 24, eff. Sept. 1, 2004;  
Acts 2005, 79th Leg., ch. 489, § 3, eff. June 17, 2005.


	§ 91.105. BOND CONDITIONS.  Each bond required by Section 
91.103 shall be conditioned that the operator will plug and abandon 
all wells and control, abate, and clean up pollution associated 
with an operator's oil and gas activities covered under the bond in 
accordance with the law of the state and the permits, rules, and 
orders of the commission.  This section does not apply to a 
well-specific plugging insurance policy described by Section 
91.104(c).

Acts 1977, 65th Leg., p. 2563, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Renumbered from § 91.106 by Acts 1983, 68th Leg., p. 5258, 
ch. 967, § 6, eff. Sept. 1, 1983.  Amended by Acts 1991, 72nd 
Leg., ch. 603, § 11, eff. Sept. 1, 1991;  Acts 2005, 79th Leg., 
ch. 489, § 4, eff. June 17, 2005.


	§ 91.106. EXECUTION OF BOND.  Each bond shall be executed 
by a corporate surety authorized to do business in this state and 
shall be renewed and be continued in effect until the conditions 
have been met or release is authorized by the commission.

Acts 1977, 65th Leg., p. 2564, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Renumbered from § 91.107 by Acts 1983, 68th Leg., p. 5258, 
ch. 967, § 6, eff. Sept. 1, 1983.


	§ 91.107. NEW BOND, LETTER OF CREDIT, OR CASH DEPOSIT.  If 
an active or inactive well is transferred, sold, or assigned by its 
operator, the commission shall require the party acquiring the well 
to file a new bond, letter of credit, or cash deposit as provided by 
Section 91.104(b), and the financial security of the prior operator 
shall continue to be required and to remain in effect, and the 
commission may not approve the transfer of operatorship, until the 
new bond, letter of credit, or cash deposit is provided or the 
commission determines that the bond, letter of credit, or cash 
deposit previously submitted to the commission by the person 
acquiring the well complies with this subchapter.  A transfer of a 
well from one entity to another entity under common ownership is a 
transfer for purposes of this section.  This section does not apply 
to a well bore that is included in a well-specific plugging 
insurance policy described by Section 91.104(c).

Acts 1977, 65th Leg., p. 2563, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Renumbered from § 91.108 by Acts 1983, 68th Leg., p. 5258, 
ch. 967, § 6, eff. Sept. 1, 1983.  Amended by Acts 1991, 72nd 
Leg., ch. 603, § 12, eff. Sept. 1, 1991;  Acts 2001, 77th Leg., 
ch. 1233, § 25, 26, eff. Sept. 1, 2001;  Acts 2001, 77th Leg., ch. 
1233, § 27, eff. Sept. 1, 2004;  Acts 2005, 79th Leg., ch. 489, 
§ 5, eff. June 17, 2005.


	§ 91.108. DEPOSIT AND USE OF FUNDS.  Subject to the refund 
provisions of Section 91.1091, if applicable, proceeds from bonds 
and other financial security required pursuant to 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 shall be deposited in the oil-field 
cleanup fund and, notwithstanding Sections 91.112 and 91.113, may 
be used only for actual well plugging and surface remediation.

Added by Acts 1983, 68th Leg., p. 5258, ch. 967, § 6, eff. Sept. 
1, 1983.  Amended by Acts 1991, 72nd Leg., ch. 603, § 15, eff. 
Sept. 1, 1991;  Acts 2001, 77th Leg., ch. 1233, § 28, eff. Sept. 
1, 2001;  Acts 2005, 79th Leg., ch. 489, § 5, eff. June 17, 2005.


	§ 91.109. FINANCIAL SECURITY FOR PERSONS INVOLVED IN 
ACTIVITIES OTHER THAN OPERATION OF WELLS.  (a) A person applying 
for or acting under a commission permit to store, handle, treat, 
reclaim, or dispose of oil and gas waste may be required by the 
commission to maintain a performance bond or other form of 
financial security conditioned that the permittee will operate and 
close the storage, handling, treatment, reclamation, or disposal 
site in accordance with state law, commission rules, and the permit 
to operate the site.  However, this section does not authorize the 
commission to require a bond or other form of financial security for 
saltwater disposal pits, emergency saltwater storage pits 
(including blow-down pits), collecting pits, or skimming pits 
provided that such pits are used in conjunction with the operation 
of an individual oil or gas lease.  Subject to the refund provisions 
of Section 91.1091 of this code, proceeds from any bond or other 
form of financial security required by this section shall be placed 
in the oil-field cleanup fund.  Each bond or other form of financial 
security shall be renewed and continued in effect until the 
conditions have been met or release is authorized by the 
commission.
	(b)  In addition to the financial security requirements of 
Subsection (a), a person required to file a bond, letter of credit, 
or cash deposit under Section 91.103 who is involved in activities 
other than the ownership or operation of wells must file the bond, 
letter of credit, or cash deposit at the time of filing or renewing 
an organization report required by Section 91.142 according to the 
following schedule:
		(1)  no bond, letter of credit, or cash deposit if the 
person is a:         
			(A)  local distribution company;                                             
			(B)  gas marketer;                                                           
			(C)  crude oil nominator;                                                    
			(D)  first purchaser;                                                        
			(E)  well servicing company;                                                 
			(F)  survey company;                                                         
			(G)  salt water hauler;                                                      
			(H)  gas nominator;                                                          
			(I)  gas purchaser;  or                                                      
			(J)  well plugger;  or                                                       
		(2)  a bond, letter of credit, or cash deposit in an 
amount not to exceed $25,000 if the person is involved in an 
activity that is not associated with the ownership or operation of 
wells and is not listed in Subdivision (1).
	(c)  A person who engages in more than one activity or 
operation, including well operation, for which a bond, letter of 
credit, or cash deposit is required under this subchapter is not 
required to file a separate bond, letter of credit, or cash deposit 
for each activity or operation in which the person is engaged.  The 
person is required to file a bond, letter of credit, or cash deposit 
only in the amount required for the activity or operation in which 
the person engages for which a bond, letter of credit, or cash 
deposit in the greatest amount is required.  The bond, letter of 
credit, or cash deposit filed covers all of the activities and 
operations for which a bond, letter of credit, or cash deposit is 
required under this subchapter.

Added by Acts 1985, 69th Leg., ch. 464, § 1, eff. Aug. 26, 1985.  
Amended by Acts 1991, 72nd Leg., ch. 603, § 17, eff. Sept. 1, 
1991;  Acts 2001, 77th Leg., ch. 1233, § 29, eff. Sept. 1, 2004;  
Acts 2003, 78th Leg., ch. 490, § 2, 3, eff. Sept. 1, 2003.


	§ 91.1091. REFUND.  The commission shall refund the 
proceeds from a bond, letter of credit, or cash deposit required 
under this subchapter if:
		(1)  the conditions that caused the proceeds to be 
collected are corrected; 
		(2)  all administrative, civil, and criminal penalties 
relating to those conditions are paid;  and
		(3)  the commission has been reimbursed for all costs 
and expenses incurred by the commission in relation to those 
conditions.

Added by Acts 1991, 72nd Leg., ch. 603, § 16, eff. Sept. 1, 1991.  
Amended by Acts 1999, 76th Leg., ch. 30, § 2, eff. Aug. 30, 1999;  
Acts 2005, 79th Leg., ch. 489, § 5, eff. June 17, 2005.


	§ 91.110. OIL AND GAS WASTE REDUCTION AND 
MINIMIZATION.  To encourage the reduction and minimization of oil 
and gas waste, the commission shall implement a program to:
		(1)  provide operators with training and technical 
assistance on oil and gas waste reduction and minimization;
		(2)  assist operators in developing oil and gas waste 
reduction and minimization plans;  and
		(3)  by rule establish incentives for oil and gas waste 
reduction and minimization.

Added by Acts 1991, 72nd Leg., ch. 296, § 2.06, eff. June 7, 
1991;  Acts 1991, 72nd Leg., ch. 590, § 6, eff. June 16, 1991.


	§ 91.111. OIL-FIELD CLEANUP FUND.  (a) The oil-field 
cleanup fund is created as a special fund in the state treasury.
	(b)  The commission shall certify to the comptroller the date 
on which the balance in the fund equals or exceeds $20 million.  The 
oil-field cleanup regulatory fees on oil and gas shall not be 
collected or required to be paid on or after the first day of the 
second month following the certification, except that the 
comptroller shall resume collecting the fees on receipt of a 
commission certification that the fund has fallen below $10 
million.  The comptroller shall continue collecting the fees until 
collections are again suspended in the manner provided by this 
subsection.
	(c)  The fund consists of:                                                     
		(1)  penalties imposed under Section 85.381 for 
violation of a law, order, or rule relating to well plugging 
requirements;
		(2)  proceeds from bonds and other financial security 
required by this chapter and benefits under well-specific plugging 
insurance policies described by Section 91.104(c) that are paid to 
the state as contingent beneficiary of the policies, subject to the 
refund provisions of Section 91.1091, if applicable;
		(3)  private contributions, including contributions 
made under Section 89. 084;
		(4)  expenses collected under Section 89.083;                                 
		(5)  fees imposed under Section 85.2021;                                      
		(6)  civil penalties collected for violations of 
Chapter 89 or of rules or orders relating to plugging that are 
adopted under this code;
		(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 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.                                             
	(d)  All revenues and balances in the oil-field cleanup fund 
created in this section are exempt from Section 403.094(h) and 
Section 403.095(b), Government Code.
	(e)  The commission, through the legislative appropriations 
request process, shall establish specific performance goals for the 
oil-field cleanup fund for the next biennium, including goals for 
the number of:
		(1)  site investigations and environmental assessments 
to be conducted;     
		(2)  abandoned wells to be plugged;  and                                      
		(3)  surface locations to be remediated.                                      

Added by Acts 1991, 72nd Leg., ch. 603, § 1, eff. Sept. 1, 1991.  
Amended by Acts 1993, 73rd Leg., ch. 515, § 6, eff. Jan. 1, 1994;  
Acts 1999, 76th Leg., ch. 1089, § 4, eff. Sept. 1, 1999;  Acts 
2001, 77th Leg., ch. 1233, § 30, eff. Sept. 1, 2001;  Acts 2005, 
79th Leg., ch. 489, § 6, eff. June 17, 2005.


	§ 91.112. PURPOSE OF THE FUND.                                              

Text of subsec. (a) effective until January 1, 2006
	(a)  Money in the fund may be used by the commission or its 
employees or agents for:
		(1)  conducting a site investigation or environmental 
assessment to determine:
			(A)  the nature and extent of contamination caused 
by oil and gas wastes or other substances or materials regulated by 
the commission under Section 91.101;  and
			(B)  the measures that should be taken to control 
or clean up the wastes, substances, or materials described in 
Paragraph (A);
		(2)  controlling or cleaning up oil and gas wastes or 
other substances or materials regulated by the commission under 
Section 91.101 that are causing or are likely to cause the pollution 
of surface or subsurface water, consistent with Section 91.113;
		(3)  plugging abandoned wells and administering or 
enforcing permits, orders, and rules relating to the commission's 
authority to prevent pollution under this chapter, Chapter 89, or 
any other law administered or enforced by the commission under 
Title 3;
		(4)  implementing Subchapter N and enforcing rules, 
orders, and permits adopted or issued under that subchapter;
		(5)  implementing the voluntary cleanup program under 
Subchapter O;  and    
		(6)  preparing the report required under Subsection 
(b).                    

Text of subsec. (a) effective January 1, 2006
	(a)  Money in the fund may be used by the commission or its 
employees or agents for:
		(1)  conducting a site investigation or environmental 
assessment to determine:
			(A)  the nature and extent of contamination caused 
by oil and gas wastes or other substances or materials regulated by 
the commission under Section 91.101;  and
			(B)  the measures that should be taken to control 
or clean up the wastes, substances, or materials described in 
Paragraph (A);
		(2)  controlling or cleaning up oil and gas wastes or 
other substances or materials regulated by the commission under 
Section 91.101 that are causing or are likely to cause the pollution 
of surface or subsurface water, consistent with Section 91.113;
		(3)  plugging abandoned wells and administering or 
enforcing permits, orders, and rules relating to the commission's 
authority to prevent pollution under this chapter, Chapter 89, or 
any other law administered or enforced by the commission under 
Title 3;
		(4)  implementing Subchapter N and enforcing rules, 
orders, and permits adopted or issued under that subchapter;
		(5)  implementing the voluntary cleanup program under 
Subchapter O;         
		(6)  preparing the report required under Subsection 
(b);                    
		(7)  making payments to eligible operators under 
Section 89.047;  and       
		(8)  making payments to eligible surface estate owners 
under Section 89.048.
	(b)  The commission shall submit to the legislature and make 
available to the public, annually, a report that reviews the extent 
to which money provided under Section 91.111 has enabled the 
commission to better protect the environment and enhance the income 
of the oil-field cleanup fund.  The report shall include:
		(1)  the number of wells plugged, by region;                                  
		(2)  the number of wells abandoned, by region;                                
		(3)  the number of inactive wells not currently in 
compliance with commission rules, by region;
		(4)  the status of enforcement proceedings for all 
wells in violation of commission rules and the time period during 
which the wells have been in violation, by region in which the wells 
are located;
		(5)  the number of surface locations remediated, by 
region;                 
		(6)  a detailed accounting of expenditures of money in 
the fund, including expenditures for site investigations and 
environmental assessments, plugging of abandoned wells, 
remediation of surface locations, and staff salaries and other 
administrative expenses;
		(7)  the method by which the commission sets priorities 
by which it determines the order in which abandoned wells are 
plugged;
		(8)  a projection of the amount of money needed for the 
next biennium for conducting site investigations and environmental 
assessments, plugging abandoned wells, and remediating surface 
locations;
		(9)  the status of implementation of the provisions of 
Section 89.085 relating to possession and sale of equipment to 
recover plugging costs;  and
		(10)  the number of sites successfully remediated under 
the voluntary cleanup program under Subchapter O, by region.

Added by Acts 1991, 72nd Leg., ch. 603, § 1, eff. Sept. 1, 1991.  
Amended by Acts 1997, 75th Leg., ch. 120, § 1, eff. Sept. 1, 
1997;  Acts 2001, 77th Leg., ch. 1233, § 31, eff. Sept. 1, 2001;  
Acts 2005, 79th Leg., ch. 267, § 5, eff. Jan. 1, 2006.


	§ 91.113. INVESTIGATION, ASSESSMENT, OR CLEANUP BY 
COMMISSION.  (a) If oil and gas wastes or other substances or 
materials regulated by the commission under Section 91.101 are 
causing or are likely to cause the pollution of surface or 
subsurface water, the commission, through its employees or agents, 
may use money in the oil-field cleanup fund to conduct a site 
investigation or environmental assessment or control or clean up 
the oil and gas wastes or other substances or materials if:
		(1)  the responsible person has failed or refused to 
control or clean up the oil and gas wastes or other substances or 
materials after notice and opportunity for hearing;
		(2)  the responsible person is unknown, cannot be 
found, or has no assets with which to control or clean up the oil and 
gas wastes or other substances or materials;  or
		(3)  the oil and gas wastes or other substances or 
materials are causing the pollution of surface or subsurface water.
	(b)  For purposes of this section, "responsible person" 
means any operator or other person required by law, rules adopted by 
the commission, or a valid order of the commission to control or 
clean up the oil and gas wastes or other substances or materials.
	(c)  The commission or its employees or agents, on proper 
identification, may enter the land of another for the purpose of 
conducting a site investigation or environmental assessment or 
controlling or cleaning up oil and gas wastes or other substances or 
materials under this section.
	(d)  The conducting of a site investigation or environmental 
assessment or the control or cleanup of oil and gas wastes or other 
substances or materials by the commission under this section does 
not prevent the commission from seeking penalties or other relief 
provided by law from any person who is required by law, rules 
adopted by the commission, or a valid order of the commission to 
control or clean up the oil and gas wastes or other substances or 
materials.
	(e)  The commission and its employees are not liable for any 
damages arising from an act or omission if the act or omission is 
part of a good-faith effort to carry out this section.
	(f)  If the commission conducts a site investigation or 
environmental assessment or controls or cleans up oil and gas 
wastes or other substances or materials under this section, the 
commission may recover all costs incurred by the commission from 
any person who was required by law, rules adopted by the commission, 
or a valid order of the commission to control or clean up the oil and 
gas wastes or other substances or materials.  The commission by 
order may require the person to reimburse the commission for those 
costs or may request the attorney general to file suit against the 
person to recover those costs.  At the request of the commission, 
the attorney general may file suit to enforce an order issued by the 
commission under this subsection.  A suit under this subsection may 
be filed in any court of competent jurisdiction in Travis County. 
Costs recovered under this subsection shall be deposited to the 
oil-field cleanup fund.

Added by Acts 1991, 72nd Leg., ch. 603, § 1, eff. Sept. 1, 1991.  
Amended by Acts 1997, 75th Leg., ch. 120, § 1, eff. Sept. 1, 
1997;  Acts 1999, 76th Leg., ch. 57, § 3, eff. May 10, 1999.


	§ 91.1131. RISK ASSESSMENT STANDARDS.  (a) The commission 
by rule may establish risk assessment as the guide for:
		(1)  conducting site investigations and environmental 
assessments;  and     
		(2)  controlling and cleaning up oil and gas wastes and 
other substances and materials.
	(b)  Rules adopted under this section must provide for:                        
		(1)  determining whether an actual or potential risk 
exists at a site;      
		(2)  screening contaminants at the site to identify 
those that pose a risk; 
		(3)  developing cleanup standards based on 
contamination levels that are protective of human health and the 
environment;  and
		(4)  establishing a reporting mechanism for informing 
the commission regarding specific remediation activities.

Added by Acts 2001, 77th Leg., ch. 1233, § 32, eff. Sept. 1, 
2001.       


	§ 91.1132. PRIORITIZATION OF HIGH-RISK WELLS.  The 
commission by rule shall develop a system for:
		(1)  identifying abandoned wells that pose a high risk 
of contaminating surface water or groundwater;
		(2)  periodically testing high-risk wells by 
conducting a fluid level test or, if necessary, a pressure test;  
and
		(3)  giving priority to plugging high-risk wells with 
compromised casings.  

Added by Acts 2001, 77th Leg., ch. 1233, § 32, eff. Sept. 1, 
2001.       


	§ 91.1135. OIL-FIELD CLEANUP FUND ADVISORY 
COMMITTEE.  (a) In this section, "committee" means the Oil-Field 
Cleanup Fund Advisory Committee.
	(b)  The committee is composed of 10 members as follows:                       
		(1)  one member of the senate appointed by the 
lieutenant governor;         
		(2)  the presiding officer of the house committee with 
primary jurisdiction over matters affecting energy resources;
		(3)  one public member appointed by the governor;                             
		(4)  one member appointed by the lieutenant governor 
from the academic field of geology or economics;
		(5)  one member appointed by the speaker of the house of 
representatives from the academic field of geology or economics;  
and
		(6)  the executive officer, or a person designated by 
the executive officer, of each of the following organizations:
			(A)  the Texas Oil and Gas Association;                                      
			(B)  the Texas Independent Producers and Royalty 
Owners Association;       
			(C)  the Panhandle Producers and Royalty Owners 
Association;               
			(D)  the Permian Basin Petroleum Association;  and                           
			(E)  the Alliance of Energy Producers.                                       
	(c)  An appointed member of the committee serves at the will 
of the authority that appointed the member.
	(d)  The committee shall:                                                      
		(1)  meet at least quarterly with the commission;                             
		(2)  receive information about rules proposed by the 
commission relating to the oil-field cleanup fund;
		(3)  review recommendations for legislation proposed 
by the commission;  and
		(4)  monitor the effectiveness of the oil-field cleanup 
fund.               
	(e)  The commission shall provide quarterly reports to the 
committee and the Legislative Budget Board that include:
		(1)  the following information with respect to the 
period since the last report was provided as well as cumulatively:
			(A)  the amount of money deposited in the 
oil-field cleanup fund;          
			(B)  the amount of money spent from the fund;                                
			(C)  the balance of the fund;                                                
			(D)  the number of wells plugged with money from 
the fund;                 
			(E)  the number of sites remediated with money 
from the fund;  and         
			(F)  the number of wells abandoned;  and                                     
		(2)  any additional information or data requested in 
writing by the committee.
	(f)  The committee may:                                                        
		(1)  submit to the commission comments of the committee 
regarding proposed rules relating to the oil-field cleanup fund;  
and
		(2)  request reports and other information from the 
commission as necessary to implement this section.
	(g)  Not later than November 15 of each even-numbered year, 
the committee shall report to the governor, lieutenant governor, 
and speaker of the house of representatives on the committee's 
activities.  The report must include:
		(1)  an analysis of any problems with the 
administration of the oil-field cleanup fund;  and
		(2)  recommendations for any legislation needed to 
address any problems identified with the administration of the fund 
or otherwise needed to further the purposes of the fund.

Added by Acts 2001, 77th Leg., ch. 1233, § 32, eff. Sept. 1, 
2001.  Amended by Acts 2003, 78th Leg., ch. 1328, § 11, eff. June 
21, 2003.


	§ 91.114. ACCEPTANCE OF ORGANIZATION REPORT OR 
APPLICATION FOR PERMIT;  APPROVAL OF CERTIFICATE OF COMPLIANCE;  
REVOCATION..  (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 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.
	(b)  An organization has committed a violation if:                             
		(1)  a final judgment or final administrative order 
finding the violation has been entered against the organization and 
all appeals have been exhausted;  or
		(2)  the commission and the organization have entered 
into an agreed order relating to the alleged violation.
	(c)  Regardless of whether the person's name appears or is 
required to appear on the organization report required by Section 
91.142, a person holds a position of ownership or control in an 
organization if:
		(1)  the person is:                                                           
			(A)  an officer or director of the organization;                             
			(B)  a general partner of the organization;                                  
			(C)  the owner of a sole proprietorship 
organization;                      
			(D)  the owner of at least 25 percent of the 
beneficial interest in the organization;  or
			(E)  a trustee of the organization;  or                                      
		(2)  the person has been determined by a final judgment 
or final administrative order to have exerted actual control over 
the organization.
	(d)  The commission shall accept the report or application or 
approve the certificate if:
		(1)  the conditions that constituted the violation are 
corrected or are being corrected in accordance with a schedule to 
which the commission and the organization have agreed;
		(2)  all administrative, civil, and criminal penalties 
and all cleanup and plugging costs incurred by the state relating to 
those conditions are paid or are being paid in accordance with a 
payment schedule to which the commission and the organization have 
agreed;  and
		(3)  the report, application, or certificate is in 
compliance with all other requirements of law and commission rules.
	(e)  If a report or application is rejected or a certificate 
is disapproved under this section, the commission shall provide the 
organization with a written statement explaining the reason for the 
rejection or disapproval.
	(f)  Notwithstanding Subsection (a), the commission may 
issue a permit to an organization described by Subsection (a) for a 
term specified by the commission if the permit is necessary to 
remedy a violation of law or commission rules.
	(g)  A fee tendered in connection with a report or 
application that is rejected under this section is nonrefundable.
	(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 85.161.           
	(i)  An order under Subsection (h) shall provide the 
organization a reasonable period of time to comply with the 
judgment or order finding the violation before the revocation takes 
effect.
	(j)  On revocation of its organization report, an 
organization may not perform any activities under the jurisdiction 
of the commission under this title or Chapter 26, 27, or 29, Water 
Code, except as necessary to remedy a violation of law or commission 
rules and as authorized by the commission.
	(k)  The commission may not revoke an organization's 
organization report, permit, or certificate of compliance under 
Subsection (h) if it finds that the organization has fulfilled the 
conditions set out in Subsection (d).
	(l)  In determining whether or not to revoke an 
organization's organization report, permit, or certificate of 
compliance under Subsection (h), the commission shall consider the 
organization's history of previous violations, the seriousness of 
previous violations, any hazard to the health or safety of the 
public, and the demonstrated good faith of the organization.
	(m)  Revocation of an organization's organization report, 
permit, or certificate does not relieve the organization of any 
existing or future duty under law, rules, or permit conditions to:
		(1)  protect surface or subsurface water from 
pollution;                    
		(2)  properly dispose of oil and gas waste;  or                               
		(3)  clean up unpermitted discharges of oil and gas 
waste.                  

Added by Acts 1991, 72nd Leg., ch. 603, § 13, eff. Sept. 1, 1991.  
Renumbered from § 91.110 by Acts 1993, 73rd Leg., ch. 107, § 
10.01(10), eff. Aug. 30, 1993.  Amended by Acts 1995, 74th Leg., ch. 
617, § 1, eff. Sept. 1, 1995;  Acts 1997, 75th Leg., ch. 121, § 
1, eff. Sept. 1, 1997;  Acts 1999, 76th Leg., ch. 30, § 3, eff. 
Aug. 30, 1999;  Acts 2003, 78th Leg., ch. 956, § 1, eff. June 20, 
2003.


	§ 91.115. FIRST LIEN ON EQUIPMENT AND STORED 
HYDROCARBONS.  (a) If a responsible person fails to clean up a site 
or facility that has ceased oil and gas operations under the 
commission's jurisdiction on or before the date the site or 
facility is required to be cleaned up by law or by a rule adopted or 
order issued by the commission, the state has a first lien, superior 
to all preexisting and subsequent liens and security interests, on 
the responsible person's interest in any hydrocarbons stored at the 
site or facility and in any equipment that is:
		(1)  located at the site or facility;  and                                    
		(2)  used by the responsible person in connection with 
the activity that generated the pollution.
	(b)  The lien is in the amount of the total costs of cleaning 
up the oil and gas wastes or other substances from the site or 
facility and arises on the date the site or facility is required by 
law or by a rule or order of the commission to be cleaned up.
	(c)  The commission may foreclose on the lien by entering 
into a contract to clean up the site or facility.  The commission is 
not required to give notice or an opportunity for a hearing to 
subordinate lienholders before entering into a contract to clean up 
the site or facility.
	(d)  The lien is extinguished if the site or facility is 
cleaned up in accordance with commission rules by any person before 
the commission enters into a contract to clean up the site or 
facility.
	(e)  The lien is extinguished as to any stored hydrocarbons 
or items of equipment that are lawfully removed by any person other 
than the operator or a nonoperator according to a lien, lease, 
judgment, written contract, or security agreement before the 
commission enters into a cleanup contract.  An item of equipment may 
not be removed from an abandoned site or facility if the removal 
will cause the release of a substance that may cause pollution 
unless the substance is lawfully disposed of.
	(f)  Equipment or stored hydrocarbons subject to a lien under 
this section are presumed to have been abandoned on the date the 
commission enters into a contract to clean up the site or facility 
on which the equipment or hydrocarbons are located.  The commission 
may dispose of the equipment or stored hydrocarbons in accordance 
with the provisions of Sections 89.085, 89.086, and 89.087 of this 
code for the disposition of well-site equipment and hydrocarbons.
	(g)  In this section "responsible person" has the meaning 
assigned by Section 91.113 of this code.
	(h)  The lien provided by this section, as it relates to 
stored hydrocarbons, shall be subject to and inferior to any lien in 
favor of the State of Texas to secure royalty payments.

Added by Acts 1993, 73rd Leg., ch. 515, § 7, eff. Jan. 1, 1994.  
Amended by Acts 2003, 78th Leg., ch. 1121, § 1, 2, eff. Sept. 1, 
2003.


	§ 91.116. NOTICE OF COMMERCIAL SURFACE DISPOSAL FACILITY 
PERMIT APPLICATION.  (a) In this section, "commercial surface 
disposal facility" means a facility whose primary business purpose 
is to provide, for compensation, surface disposal of oil field 
fluids or oil and gas wastes, including land application for 
treatment and disposal.
	(b)  A person who files an application for a permit for a 
commercial surface disposal facility shall publish notice of the 
application in accordance with this section.
	(c)  The notice must include:                                                  
		(1)  the date the application was filed;                                      
		(2)  a description of the location of the site for which 
the application was made, including the county in which the site is 
located, the name of the original survey and abstract number, and 
the direction and distance from the nearest municipality;
		(3)  the name of the owner of the site;                                       
		(4)  the name of the applicant;                                               
		(5)  the type of fluid or waste to be disposed of at the 
facility;          
		(6)  the disposal method proposed;  and                                       
		(7)  the procedure for protesting the application.                            
	(d)  The notice must be published:                                             
		(1)  at least once each week for two consecutive weeks 
with the first publication occurring not earlier than the date the 
application is filed and not later than the 30th day after the date 
on which the application is filed;  and
		(2)  in a newspaper of general circulation in the 
county in which the proposed disposal would occur.

Added by Acts 1999, 76th Leg., ch. 668, § 1, eff. Sept. 1, 1999.           


	§ 91.117. PUBLIC INFORMATION HEARING ON APPLICATION FOR 
COMMERCIAL SURFACE DISPOSAL FACILITY PERMIT.  (a) In this section, 
"commercial surface disposal facility" has the meaning assigned by 
Section 91.116.
	(b)  The commission may hold a public meeting to receive 
public comment on an application for a commercial surface disposal 
facility if the commission determines a public meeting is in the 
public interest.
	(c)  The meeting must be held in the county in which the 
proposed facility would be located.

Added by Acts 1999, 76th Leg., ch. 668, § 1, eff. Sept. 1, 1999.           

SUBCHAPTER E. BOOKS, RECORDS, AND REPORTS


	§ 91.141. BOOKS AND RECORDS.  (a) Owners and operators of 
oil and gas wells shall keep books that show accurately:
		(1)  the amount of sold and unsold stock;                                     
		(2)  the amount of promotion money paid;                                      
		(3)  the amount of oil and gas produced and disposed of 
and the price for which the oil and gas was sold;
		(4)  the receipts from the sale or transfer of leases or 
other property;  and
		(5)  disbursements made in connection with or for the 
benefit of the business.
	(b)  The books shall be kept open for the inspection of the 
commission or any accredited representative of the commission and 
any stockholder or shareholder or royalty owner in the business.
	(c)  The owners and operators of oil and gas wells shall 
report the information to the commission for its information if 
required by the commission to do so.

Acts 1977, 65th Leg., p. 2564, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 91.142. REPORT TO COMMISSION.  (a) A person, firm, 
partnership, joint stock association, corporation, or other 
domestic or foreign organization operating wholly or partially in 
this state and acting as principal or agent for another for the 
purpose of performing operations which are within the jurisdiction 
of the commission shall file immediately with the commission:
		(1)  the name of the company or organization;                                 
		(2)  the post-office address of the company or 
organization;                
		(3)  the plan under which the company or organization 
was organized;        
		(4)  the names and post-office addresses of the trustee 
or trustees of the company or organization;
		(5)  the names, unique identifying numbers such as 
driver's license numbers, and post-office addresses of the officers 
and directors;  and
		(6)  if required by Subsection (b) of this section, the 
name and address of the resident agent.
	(b)  Any foreign or nonresident entity listed in Subsection 
(a) of this section shall maintain or designate a resident agent 
upon whom any process, notice, or demand required or permitted by 
law to be served upon such entity may be served.
	(c)  If any such entity required by the terms of this section 
to maintain or designate such agent shall fail to do so, then and in 
such event, the organization report required to be filed with the 
commission is not valid.
	(d)  Failure by any such entity listed in Subsection (a) of 
this section to answer such process or demand shall render the 
organization report invalid.
	(e)  The commission shall require an entity described by 
Subsection (a) of this section to refile an organization report 
annually according to a schedule established by the commission.
	(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 Chapter 85 of this code.
	(g)  An organization report filed under this section must be 
accompanied by the following fee:
		(1)  for an operator of not more than 25 wells, $300;                         
		(2)  for an operator of more than 25 but not more than 
100 wells, $500;     
		(3)  for an operator of more than 100 wells, $1,000;                          
		(4)  for an operator of one or more natural gas 
pipelines as classified by the commission, $225;
		(5)  for an operator of one or more service activities 
or facilities who does not operate any wells, an amount determined 
by the commission but not less than $300 or more than $500;
		(6)  for an operator of one or more liquids pipelines as 
classified by the commission who does not operate any wells, an 
amount determined by the commission but not less than $425 or more 
than $625;
		(7)  for an operator of one or more service activities 
or facilities, including liquids pipelines as classified by the 
commission, who also operates one or more wells, an amount 
determined by the commission based on the sum of the amounts 
provided by the applicable subdivisions of this subsection but not 
less than $425 or more than $1,125;  and
		(8)  for an entity not currently performing operations 
under the jurisdiction of the commission, $300.
	(h)  To enable the commission to better protect the state's 
resources, an entity described by Subsection (a) or an affiliate of 
such an entity performing operations within the jurisdiction of the 
commission that files for federal bankruptcy protection shall give 
written notice to the commission of that action by submitting the 
notice to the office of general counsel not later than the 30th day 
after the date of filing.

Acts 1977, 65th Leg., p. 2565, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1985, 69th Leg., ch. 398, § 1, eff. Aug. 
26, 1985;  Acts 1997, 75th Leg., ch. 121, § 2, eff. Sept. 1, 1997;  
Acts 2001, 77th Leg., ch. 1233, § 33, eff. Sept. 1, 2001; Acts 
2003, 78th Leg., ch. 490, § 4, eff. Sept. 1, 2003;  Acts 2003, 
78th Leg., ch. 626, § 1, eff. Sept. 1, 2003.


	§ 91.143. FALSE APPLICATIONS, REPORTS, AND DOCUMENTS AND 
TAMPERING WITH GAUGES.  (a) A person may not:
		(1)  make or subscribe any application, report, or 
other document required or permitted to be filed with the 
commission by the provisions of Title 102, Revised Civil Statutes 
of Texas, 1925,  as amended, including provisions of this code 
formerly included in that title, knowing that the application, 
report, or other document is false or untrue in a material fact;
		(2)  aid or assist in, or procure, counsel, or advise 
the preparation or presentation of any of these applications, 
reports, or other documents that are fraudulent, false, or 
incorrect in any material matter, knowing them to be fraudulent, 
false, or incorrect in any material matter;
		(3)  knowingly simulate or falsely or fraudulently 
execute or sign such an application, report, or other document;
		(4)  knowingly procure these applications, reports, or 
other documents to be falsely or fraudulently executed, or advise, 
aid in, or connive at this execution;  or
		(5)  knowingly render inaccurate any monitoring device 
required to be maintained by a commission rule, order, or permit.
	(b)  A person commits an offense if the person violates this 
section.  An offense under this section is a felony punishable by:
		(1)  imprisonment in the institutional division of the 
Texas Department of Criminal Justice for a term of not less than two 
years or more than five years;
		(2)  a fine of not more than $10,000;  or                                     
		(3)  both the imprisonment and the fine.                                      
	(c)  If other penalties prescribed in Title 102, Revised 
Civil Statutes of Texas, 1925, as amended, including provisions of 
this code formerly included in that title, overlap offenses that 
are also punishable under this section, the penalties prescribed in 
this section shall be in addition to other penalties.
	(d)  No application, report, or other document required or 
permitted to be filed with the commission under Title 102, Revised 
Civil Statutes of Texas, 1925, as amended, including provisions of 
this code formerly included in that title, may be required to be 
under oath, verification, acknowledgment, or affirmation.
	(e)  The commission may impose an administrative penalty in 
the manner provided by Sections 81.0531-81.0534 on a person who 
violates this section.  The amount of the penalty may not exceed 
$1,000 for each violation.

Acts 1977, 65th Leg., p. 2565, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5251, ch. 967, § 1, 
eff. Sept. 1, 1983;  Acts 1999, 76th Leg., ch. 31, § 1, eff. Aug. 
30, 1999.

SUBCHAPTER F. UNDERGROUND NATURAL GAS STORAGE AND CONSERVATION


	§ 91.171. SHORT TITLE.  This subchapter may be cited as 
the Underground Natural Gas Storage and Conservation Act of 1977.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.172. DECLARATION OF POLICY.  The underground storage 
of natural gas promotes the conservation of natural gas, permits 
the building of reserves for orderly withdrawal in periods of peak 
demand, makes more readily available natural gas resources to 
residential, commercial, and industrial customers of this state, 
provides a better year-round market to the various gas fields, and 
promotes the public interest and welfare of this state.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.173. DEFINITIONS.  In this subchapter:                                 
		(1)  "Person" means any natural person, partnership or 
other combination of natural persons, corporation, group of 
corporations, trust, or governmental entity.
		(2)  "Gas utility" means a gas utility as defined in 
Section 101.003, Utilities Code, or Subchapter A, Chapter 121, 
Utilities Code.
		(3)  "Natural gas" means any gaseous material composed 
predominantly of the following hydrocarbons or mixtures thereof:  
methane, ethane, propane, butane (normal or isobutane), in either 
its original or manufactured state, or gas which has been processed 
to separate it into one or more of its component parts after its 
withdrawal from the earth.
		(4)  "Native gas" means:                                                      
			(A)  natural gas which has not previously been 
withdrawn from the earth;  or
			(B)  natural gas which has been withdrawn from the 
storage facility, processed, and reinjected into the storage 
facility.
		(5)  "Storage facility" means any subsurface sand, 
stratum, or formation used or to be used for the underground storage 
of natural gas and all surface and subsurface rights and 
appurtenances necessary to the operation of a facility for the 
underground storage of natural gas.
		(6)  "Storer" means (A) a gas utility, (B) a wholly 
owned subsidiary of a gas utility, (C) the parent corporation of a 
gas utility, or (D) a wholly owned subsidiary of a parent 
corporation which also wholly owns a subsidiary gas utility, but a 
nonutility storer included in category (B), (C), or (D) must 
operate the storage facility pursuant to a contract with its 
affiliated gas utility that provides that all withdrawals of 
natural gas from the storage facility must be delivered to the 
affiliated gas utility.
		(7)  "Substantially depleted" means that at least 75 
percent of the estimated volume of recoverable native gas reserves 
originally in place in any gas-bearing sand, formation, or stratum 
have been withdrawn from the sand, formation, or stratum.
		(8)  "Interested person" means any person who enters an 
appearance at the commission hearing required by Section 91.174 of 
this code.
		(9)  "Commission" means the Railroad Commission of 
Texas.                   

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.  Amended by Acts 1999, 76th Leg., ch. 62, § 18.41, eff. 
Sept. 1, 1999.


	§ 91.174. FINDINGS OF COMMISSION.  (a) Any storer 
desiring to exercise the right of eminent domain for the 
acquisition of a storage facility shall, as a condition precedent 
to the filing of its petition in the appropriate court, obtain from 
the commission an order finding:
		(1)  that the underground formation or stratum sought 
to be acquired is classified by the commission as a gas reservoir 
and is suitable for the underground storage of natural gas and that 
the storage of natural gas is necessary for the gas utility to 
provide adequate service to the public and is in the public 
interest;
		(2)  that the use of the formation or stratum as a 
storage facility will cause no injury to surface or underground 
water resources;
		(3)  that the formation or stratum does not contain 
native gas producible in paying quantities unless the recoverable 
volumes of native gas originally in place are substantially 
depleted and unless the formation or stratum has a greater value of 
ultimate use to the consuming public as a storage facility to ensure 
an adequate supply of natural gas or for the conservation of natural 
gas than the production of native gas which remains;
		(4)  the extent of the horizontal limits of the 
reservoir expected to be penetrated by displaced or injected gas;  
and
		(5)  that no portion of the formation or stratum sought 
to be acquired has been condemned or is being utilized for the 
injection, storage, and withdrawal of gas by others.
	(b)  The designation of a storage facility does not prevent 
any storer from instituting additional proceedings in the event it 
is later determined that the underground reservoir should be 
extended to prevent the escape, displacement, or withdrawal by 
others of injected gas.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.175. COMMISSION JURISDICTION.  The commission shall 
have jurisdiction to supervise the construction and operation of 
all storage facilities formed pursuant to this subchapter, and in 
addition to the findings required by Section 91.174 of this code, 
the commission shall include in any order of approval a requirement 
that the storer file a report each month, including each month prior 
to the time the storage facility is in operation, with the 
commission showing, for that month, the volume of gas injected and 
stored gas withdrawn from storage.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.176. WITHDRAWAL OF NATIVE GAS.  A storer may 
withdraw from storage injected and stored gas as market demand 
dictates.  However, any time a storer's withdrawals from a storage 
facility equal the volume of gas injected for storage, the storer 
shall not withdraw additional gas from the storage facility without 
first obtaining specific authority from the commission.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.177. STORAGE OPERATIONS MUST BE BONA FIDE.  (a) A 
storer must initiate injection operations for gas storage within 12 
months after the condemnation order of the court becomes final and 
storage operations must continue with reasonable diligence after 
that time.
	(b)  Should the monthly reports to the commission indicate 
that bona fide underground gas storage operations are not being 
conducted, the commission may, on its own motion or on motion of any 
interested person, schedule a public hearing, giving the storer the 
opportunity to show cause why the commission approval of the 
project should not be withdrawn.
	(c)  If the commission finds that the storage project is not 
being conducted in a bona fide manner, it shall issue an order 
withdrawing approval of the storage facility, and all property, 
both mineral and surface, that was condemned by the storer shall 
revert to those who owned the property at the time of condemnation 
or their successors.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.178. RELOCATION OF FACILITIES.  In the event the 
acquisition or operation of a storage facility acquired through the 
exercise of the power of eminent domain requires the relocation or 
alteration of any railroad, electric, telegraph, telephone, or 
pipeline lines or facilities, the expense of the relocation or 
alteration shall be borne by the storer.  The expense of relocation 
means the actual cost incurred in providing a comparable 
replacement line or facility, less net salvage value from the sale 
or other disposition of the old facility.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.179. APPROPRIATION OF STORAGE FACILITIES;  
LIMITATIONS.  After an order of the commission is issued approving 
a storage facility, a storer may condemn without further attack as 
to its right to condemn, any subsurface sand, stratum, or formation 
for the underground storage of natural gas, condemning all mineral 
and royalty rights as are reasonably necessary for the operation of 
the storage facility, subject to the limitations of this 
subchapter, and the storer may condemn any other interests in 
property that may be required, including interests in the surface 
estate in the sand, stratum, or formation reasonably necessary to 
the operation of the storage facility, provided that:
		(1)  no part of a reservoir is subject to condemnation 
unless the storer has acquired by option, lease, conveyance, or 
other negotiated means at least 66-2/3 percent of the ownership of 
minerals, including working interests, and 66-2/3 percent of the 
ownership of the royalty interests, computed in relation to the 
surface area overlying the part of the reservoir which as found by 
the commission to be expected to be penetrated by displaced or 
injected gas;
		(2)  no dwelling, barn, store, or other building is 
subject to condemnation;  and
		(3)  the right of condemnation is without prejudice to 
the rights of the owners or holders of other rights or interests of 
land to drill through the storage facility under such terms and 
conditions as the commission may prescribe for the purpose of 
protecting the storage facility against pollution or escape of 
natural gas and is without prejudice to the rights of the owners or 
holders of other rights or interests of the land to all other uses 
so long as those uses do not interfere with the operation of the 
storage facility.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.180. INSTITUTION OF CONDEMNATION PROCEEDINGS.  (a) 
The finding by the commission that underground storage is in the 
public interest is binding on all persons whose property the storer 
has the right to condemn.  After that finding of the commission, the 
storer has the right to condemn all of the underground storage area 
and any surface area required for the use and enjoyment of the 
storage facility.
	(b)  The storer shall initiate eminent domain proceedings in 
the court having jurisdiction in the area in which a portion of the 
land is situated.  The petition shall set forth the purpose for 
which the property is sought to be acquired, a description of the 
sand, stratum, or formation and of the land under which it is 
alleged to be contained, the names of the owners as shown by the 
deed records of the county, and a description of all other property 
and rights sought to be appropriated for use in connection with the 
storage facility, including any parts of the surface necessary for 
any facilities incidental to the operation of the storage facility.
	(c)  The petition shall state facts showing that the storer 
has obtained the findings of the commission required by Section 
91.174 of this code, that the storer in good faith has been unable 
to acquire the rights sought to be appropriated, that the storer has 
acquired, prior to the filing of the petition, by any means other 
than condemnation, at least 66-2/3 percent of the ownership of the 
minerals, including working interests, and 66-2/3 percent of the 
royalty interests of the property rights in the storage facility 
required for that purpose, and shall describe the surface area 
overlying the storage facility the storer seeks to acquire and the 
names of the owners of those rights and interests.
	(d)  Where more than one tract of land is involved, all or any 
tracts may be joined in one proceeding, without prejudice to the 
right of the storer to institute additional proceedings;  provided, 
that the failure to make service upon a defendant does not affect 
the right of the storer to proceed against any or all other of the 
defendants upon whom service has been made.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.181. EXERCISE OF RIGHT OF EMINENT DOMAIN.  All 
proceedings in connection with the condemnation and acquisition of 
storage facilities shall be in accordance with Articles 3264 
through 3271, Revised Civil Statutes of Texas, 1925, as amended, 
and to the extent of any conflict between those articles and this 
subchapter, the provisions of this subchapter prevail.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.182. OWNERSHIP OF STORED GAS.  All natural gas in the 
stratum condemned which is not native gas, and which is 
subsequently injected into storage facilities is personal property 
and is the property of the injector or its assigns, and in no event 
is the gas subject to the right of the owner of the surface of the 
land or of any mineral or royalty owner's interest under which the 
storage facilities lie, or of any person other than the injector to 
produce, take, reduce to possession, either by means of the law of 
capture or otherwise, waste, or otherwise interfere with or 
exercise any control over a storage facility.  Upon failure, 
neglect, or refusal of the person to comply with this section, the 
storer has the right to compel compliance by injunction or by other 
appropriate relief by application to a court of competent 
jurisdiction.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.183. RIGHTS OF PURCHASERS OF NATIVE GAS.  (a) In the 
event there are remaining reserves of native gas in the storage 
facility which are dedicated to a purchaser and the purchaser and 
storer are unable to agree on an equitable settlement of rights with 
respect to the remaining native gas within a period of time that 
will prevent interference with the operation of the storage 
facility, the storer or purchaser may apply to the commission for an 
adjudication concerning remaining reserves of native gas.
	(b)  Upon application, the commission shall direct a 
settlement of remaining reserves of native gas that is equitable to 
all parties, but which does not interfere with the public benefits 
arising from the operation of the storage facility.
	(c)  In addition to any other disposition that is equitable 
to all parties, the commission may make a finding of the quantity of 
remaining recoverable native gas and an allocation of future 
production on a reasonable production schedule and order delivery 
to the purchaser by the storer of the amounts of native gas that the 
commission finds would have been taken by the purchaser during the 
term of the purchase agreement.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.


	§ 91.184. ABANDONMENT.  (a) When a storer has permanently 
abandoned the storage facility, the storer shall file with the 
commission a notice of abandonment, and shall file an instrument in 
the deed records in the appropriate county or counties, stating 
that the storage has ceased, and that all property, both mineral and 
surface, condemned by the storer has reverted to those who owned the 
property at the time of condemnation, or their heirs, successors, 
or assigns.
	(b)  The storer shall also file in the deed records in the 
appropriate county or counties a list of the owners of the mineral, 
royalty, and surface owners to whom the various interests have 
reverted, together with an affidavit that the storer has compiled 
the list from a current examination of title records and that the 
list is true and correct to the best of the knowledge of the 
affiant.

Added by Acts 1979, 66th Leg., p. 1996, ch. 785, § 3, eff. June 
13, 1979.

SUBCHAPTER G. UNDERGROUND HYDROCARBON STORAGE


	§ 91.201. DEFINITIONS.  In this subchapter:                                 
		(1)  "Underground hydrocarbon storage facility" or 
"storage facility" means a subsurface sand, stratum, or geological 
formation used for the underground storage of hydrocarbons, and 
includes surface or subsurface rights and appurtenances necessary 
for the operation of the facility.
		(2)  "Hydrocarbons" means oil, gas, or products of oil 
or gas, as those terms are defined by Section 85.001 of this code.
		(3)  "Waste" means surface or subsurface waste, as 
defined by Section 85.046 of this code, of hydrocarbons, including, 
but not limited to, the physical or economic waste or loss of 
hydrocarbons in the creation, operation, maintenance, or 
abandonment of an underground hydrocarbon storage facility.
		(4)  "Commission" means the Railroad Commission of 
Texas.                   

Added by Acts 1981, 67th Leg., p. 3167, ch. 830, § 3, eff. June 
17, 1981.


	§ 91.202. POLICY.  It is the policy of this state and the 
purpose of this subchapter to prevent the waste of oil, gas, and 
products of oil or gas, to protect the ground and surface water of 
the state from unreasonable degradation, and to protect the public 
health, welfare, and physical property in the creation, operation, 
maintenance, and abandonment of underground hydrocarbon storage 
facilities.

Added by Acts 1981, 67th Leg., p. 3167, ch. 830, § 3, eff. June 
17, 1981.


	§ 91.203. AUTHORITY;  RULES.  (a) The commission shall 
supervise or monitor the construction, operation, maintenance, and 
closure of storage facilities.
	(b)  The commission may adopt reasonable rules or issue 
reasonable orders to implement the policies of this subchapter and 
may establish minimum standards regulating the creation, 
operation, maintenance, and abandonment of underground hydrocarbon 
storage facilities.  The rules and standards of the commission may 
include, but are not limited to, requirements for monitoring, 
recordkeeping, and reporting, the drilling and creation of the 
facility, selecting the site of the facility, and for proper 
closure of the facility on abandonment.

Added by Acts 1981, 67th Leg., p. 3167, ch. 830, § 3, eff. June 
17, 1981.


	§ 91.204. PERMITS.  (a) The commission by rule may 
require a person who creates, operates, maintains, or abandons an 
underground hydrocarbon storage facility to obtain a permit from 
the commission.  A permit issued by the commission may contain 
provisions and conditions necessary to implement the policies of 
this subchapter.  The commission may adopt reasonable rules for the 
amendment, revocation, transfer, or suspension of a permit.
	(b)  A person desiring to obtain a permit or to amend a permit 
must submit an application containing the information required by 
the commission.

Added by Acts 1981, 67th Leg., p. 3167, ch. 830, § 3, eff. June 
17, 1981.


	§ 91.205. AUTHORITY TO ENTER PROPERTY.  Members and 
employees of the commission may enter public or private property at 
reasonable times to inspect and investigate conditions relating to 
the creation, operation, maintenance, or abandonment of an 
underground hydrocarbon storage facility.  The members and 
employees may not enter private property having management in 
residence without notifying the management of their presence and 
shall observe safety, internal security, and fire protection rules 
of the establishment being inspected.

Added by Acts 1981, 67th Leg., p. 3167, ch. 830, § 3, eff. June 
17, 1981.


	§ 91.206. AUTHORITY TO EXAMINE RECORDS.  Members and 
employees of the commission may examine and copy during regular 
business hours records pertaining to the creation, operation, 
maintenance, or abandonment of an underground hydrocarbon storage 
facility.

Added by Acts 1981, 67th Leg., p. 3167, ch. 830, § 3, eff. June 
17, 1981.


	§ 91.207. NOTICE OF NONCOMPLIANCE.  (a) On receipt of 
notice from the commission that a person creating, operating, 
maintaining, or abandoning an underground hydrocarbon storage 
facility has violated this subchapter or a term, condition, or 
provision of a permit issued under this subchapter, an operator of 
the pipeline or other carrier connected to the facility shall 
disconnect from the facility and shall remain disconnected from the 
facility until notice of compliance has been received from the 
commission.
	(b)  On receipt of notice from the commission of a violation 
of this subchapter, a rule of the commission issued under this 
subchapter, or a term, condition, or provision of a permit issued 
under this subchapter, the owner or operator of an underground 
hydrocarbon storage facility shall discontinue any removal of 
hydrocarbons from the facility or any addition of hydrocarbons to 
the facility and may not begin or renew removal of hydrocarbons from 
the facility or begin or renew addition of hydrocarbons to the 
facility until notice of compliance has been received from the 
commission.

Added by Acts 1981, 67th Leg., p. 3167, ch. 830, § 3, eff. June 
17, 1981.

SUBCHAPTER H. UNDERGROUND STORAGE FACILITIES FOR NATURAL GAS


	§ 91.251. DEFINITIONS.  In this subchapter:                                 
		(1)  "Intrastate gas pipeline facility" has the meaning 
assigned by the United States Department of Transportation under 
Chapter 601, Title 49, United States Code (49 U.S.C. Section 60101 
et seq.), and its subsequent amendments.
		(2)  "Natural gas" means any gaseous material composed 
primarily of methane in either its original or its manufactured 
state.
		(3)  "Natural gas underground storage" means the 
storage of natural gas beneath the surface of the earth in a 
formation, stratum, or reservoir.
		(4)  "Storage facility" has the meaning assigned by 
Section 91.173.         

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.252. COMMISSION JURISDICTION.  (a) The commission 
has jurisdiction over:
		(1)  natural gas underground storage;  and                                    
		(2)  surface and subsurface equipment and facilities 
used for natural gas underground storage.
	(b)  This subchapter does not apply to a storage facility 
that is:           
		(1)  part of an interstate gas pipeline facility as 
defined by the United States Department of Transportation;  and
		(2)  subject to federal minimum standards adopted under 
Chapter 601, Title 49, United States Code (49 U.S.C. Section 60101 
et seq.), and its subsequent amendments. 

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.253. COMMISSION ENFORCEMENT.  (a) In addition to 
other authority specifically granted to the commission under this 
subchapter, the commission may enforce this subchapter or a rule 
adopted or an order or permit issued under this subchapter as 
provided by Section 91.207.
	(b)  Section 91.003 does not apply to this subchapter.                         

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.254. INSPECTION;  EXAMINATION;  CREDENTIALS.  (a) 
The commission may inspect a storage facility for compliance with 
the safety standards and practices and the recordkeeping 
requirements adopted under Sections 91.255, 91.257, and 91.258.
	(b)  To conduct an inspection under this section, a 
commissioner or a designated commission employee or agent may enter 
property on which a storage facility is located at a reasonable time 
and in a reasonable manner to examine:
		(1)  the facility and any related buildings or 
equipment;  and              
		(2)  the records required to be maintained at the 
storage facility under Section 91.258.
	(c)  A commissioner or a commission employee or agent may not 
enter the premises of a storage facility having personnel on the 
premises of the facility unless proper credentials are first 
presented to the person at the facility who is in charge of the 
property. 

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.255. SAFETY STANDARDS AND PRACTICES.  (a) The 
commission by rule shall adopt safety standards and practices for 
natural gas underground storage and storage facilities.  The 
standards and practices must:
		(1)  require the installation and periodic testing of 
safety devices;       
		(2)  establish emergency notification procedures for 
the operator of a facility in the event of a release of a hazardous 
substance that poses a substantial risk to the public;
		(3)  establish fire prevention and response 
procedures;                     
		(4)  require training for the employees of the storage 
facility on the safe operation of the storage facility;  and
		(5)  establish any other safety standard or practice 
that is reasonable and necessary for underground natural gas 
storage and the safe construction, operation, and maintenance of a 
storage facility.
	(b)  The commission may adopt different standards and 
practices for different types of storage facilities and may 
distinguish among natural gas underground storage in salt dome 
caverns, depleted reservoirs, and embedded salt formations.
	(c)  The commission may grant an exception to a standard or 
practice adopted under this section in a permit or amended permit 
issued to a storage facility if the exception will not constitute an 
unreasonable danger to the public.
	(d)  The commission may impose an additional standard or 
practice in a permit or amended permit issued to a storage facility.
	(e)  A safety standard or practice adopted by the commission 
for a storage facility that is part of an intrastate gas pipeline 
facility must be compatible with federal minimum standards.
	(f)  The commission shall require that records of safety 
device tests required by Subsection (a)(1) be:
		(1)  filed with the commission;  or                                           
		(2)  maintained by the owner or operator and made 
available for inspection by the commission. 

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.256. LIMITATION ON POWERS OF MUNICIPALITIES AND 
COUNTIES.  A municipality or county may not adopt or enforce an 
ordinance that establishes a safety standard or practice applicable 
to a storage facility that is subject to regulation under this 
subchapter, another state law, or a federal law. 

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.257. SAFETY PROCEDURE MANUAL.  The commission may 
require the owner or operator of a storage facility to prepare a 
safety procedure manual for each storage facility and to:
		(1)  file a copy of the manual with the commission;  or                       
		(2)  make the manual available for inspection under 
Section 91.254.         

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.258. RECORDS;  REPORTS.  (a) An owner or operator of 
a storage facility shall:
		(1)  maintain records and make reports relating to 
construction, operation, or maintenance of the facility as required 
by commission rule;  and
		(2)  provide any other information required by the 
commission relating to construction, operation, or maintenance of 
the facility.
	(b)  The commission may provide forms for reports required 
under Subsection (a). 

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.259. DAMAGE TO STORAGE FACILITY;  DISABLING A SAFETY 
DEVICE.  A person may not:
		(1)  intentionally damage or destroy a storage 
facility;  or                
		(2)  disable a safety device in a storage facility 
except to:               
			(A)  repair, maintain, test, or replace the 
device;  or                    
			(B)  conduct other activities that are reasonably 
necessary for the safe operation of the storage facility. 

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.260. INJUNCTION;  CIVIL PENALTY.  (a) The attorney 
general, at the request of the commission, shall bring a civil 
action against a person who has violated or is violating this 
subchapter or a rule adopted or an order or permit issued under this 
subchapter for:
		(1)  injunctive relief to restrain the person from the 
violation;           
		(2)  the assessment and recovery of a civil penalty for 
a violation;  or    
		(3)  both injunctive relief and a civil penalty.                              
	(b)  A civil penalty assessed under this section may not 
exceed $25,000 for each violation.
	(c)  Each day of a continuing violation may be considered a 
separate violation for the purpose of penalty assessment.
	(d)  The maximum penalty assessed for a related series of 
violations may not exceed $500,000. 

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.261. ADMINISTRATIVE PENALTY.  (a) The commission may 
assess, as provided by this section and Sections 91.262, 91.263, 
and 91.264, an administrative penalty against a person who violates 
this subchapter or a rule adopted or an order or permit issued under 
this subchapter.
	(b)  Except as provided by Subsection (c), the penalty for 
each violation may be in an amount not to exceed $10,000.  The 
maximum penalty assessed under this subsection for a related series 
of violations may not exceed $200,000.
	(c)  The penalty for each violation of Section 91.259 may be 
in an amount not to exceed $25,000.  The maximum penalty assessed 
under this subsection for a continuing violation may not exceed 
$300,000.
	(d)  Each day a violation continues or occurs may be 
considered a separate violation for the purpose of penalty 
assessment under Subsection (b) or (c).
	(e)  In determining the amount of the penalty, the commission 
shall consider:
		(1)  the seriousness of the violation, including the 
nature, circumstances, extent, and gravity of the prohibited act 
and the hazard or potential hazard created to the health, safety, or 
economic welfare of the public;
		(2)  the economic harm to property or the environment 
caused by the violation;
		(3)  the history of previous violations;                                      
		(4)  the amount necessary to deter future violations;                         
		(5)  efforts to correct the violation;  and                                   
		(6)  any other matter that justice may require.                               

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.262. ADMINISTRATIVE PENALTY ASSESSMENT 
PROCEDURE.  (a) An administrative penalty may be assessed only 
after the person charged under Section 91.261 has been given an 
opportunity for a public hearing.  If a public hearing is held, the 
commission shall make findings of fact and issue a written decision 
as to the occurrence of the violation and the penalty amount 
warranted by the violation, incorporating, if appropriate, an order 
requiring that the penalty be paid.  If appropriate, the commission 
shall consolidate the hearing with other proceedings.
	(b)  If a person charged under Section 91.261 fails to take 
advantage of the opportunity for a public hearing, a penalty may be 
assessed by the commission after it has determined that a violation 
occurred and the penalty amount warranted by the violation.  The 
commission shall then issue an order requiring the penalty to be 
paid.
	(c)  The commission shall give notice of the commission's 
order to the person charged with the violation as provided by 
Chapter 2001, Government Code.  The notice must include a statement 
of the right of the person to judicial review of the order. 

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.263. PAYMENT OF ADMINISTRATIVE PENALTY.  (a) Not 
later than the 30th day after the date on which the commission's 
order imposing an administrative penalty becomes final as provided 
by Section 2001.144, Government Code, the person charged with the 
violation shall:
		(1)  pay the amount of the penalty;                                           
		(2)  pay the amount of the penalty and file a petition 
for judicial review contesting:
			(A)  the amount of the penalty;                                              
			(B)  the fact of the violation;  or                                          
			(C)  both the amount of the penalty and the fact of 
the violation;  or     
		(3)  without paying the amount of the penalty, file a 
petition for judicial review contesting:
			(A)  the amount of the penalty;                                              
			(B)  the fact of the violation;  or                                          
			(C)  both the amount of the penalty and the fact of 
the violation.         
	(b)  Within the 30-day period, a person who acts under 
Subsection (a)(3) may:
		(1)  stay the enforcement of the penalty by:                                  
			(A)  paying the amount of the penalty to the court 
for placement in an escrow account;  or
			(B)  giving to the court a supersedeas bond in a 
form approved by the court that is effective until all judicial 
review of the order or decision is final;  or
		(2)  request the court to stay enforcement of the 
penalty by:               
			(A)  filing with the court a sworn affidavit 
stating that the person is financially unable to pay the amount of 
the penalty and is financially unable to give the supersedeas bond;  
and
			(B)  delivering a copy of the affidavit to the 
commission.                 
	(c)  If the commission receives a copy of an affidavit under 
Subsection (b), the commission may file a contest to the affidavit 
with the court not later than the fifth day after the date the copy 
is received.  The court shall hold a hearing on the facts alleged in 
the affidavit as soon as practicable.  The person who files an 
affidavit has the burden of proving that the person is financially 
unable to pay the amount of the penalty and to give a supersedeas 
bond.
	(d)  If the person does not pay the amount of the penalty and 
the penalty is not stayed, the commission may refer the matter to 
the attorney general for enforcement. 

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           


	§ 91.264. JUDICIAL REVIEW OF ADMINISTRATIVE PENALTY.  (a) 
Judicial review of a commission order imposing an administrative 
penalty is:
		(1)  instituted by filing a petition as provided by 
Subchapter G, Chapter 2001, Government Code;   and
		(2)  under the substantial evidence rule.                                     
	(b)  If the person paid the amount of the penalty and that 
amount is reduced or is not assessed by the court, the court shall 
order that the appropriate amount plus accrued interest be remitted 
to the person.  The rate of interest is the rate charged on loans to 
depository institutions by the New York Federal Reserve Bank and 
shall be paid for the period beginning on the date the penalty is 
paid and ending on the date the penalty is remitted.  If the person 
gave a supersedeas bond, the court shall order the release of the 
bond:
		(1)  without further action by the person if the 
penalty is not assessed by the court;  or
		(2)  on payment of the penalty in the amount determined 
by the court.       
	(c)  A penalty collected under this section shall be 
deposited to the credit of the oil-field cleanup fund account. 

Added by Acts 1997, 75th Leg., ch. 166, § 5, eff. Sept. 1, 1997.           

SUBCHAPTER J. PAYMENT FOR PROCEEDS OF SALE


	§ 91.401. DEFINITIONS.  In this subchapter:                                 
		(1)  "Payee" means any person or persons legally 
entitled to payment from the proceeds derived from the sale of oil 
or gas from an oil or gas well located in this state.
		(2)  "Payor" means the party who undertakes to 
distribute oil and gas proceeds to the payee, whether as the 
purchaser of the production of oil or gas generating such proceeds 
or as operator of the well from which such production was obtained 
or as lessee under the lease on which royalty is due.  The payor is 
the first purchaser of such production of oil or gas from an oil or 
gas well, unless the owner of the right to produce under an oil or 
gas lease or pooling order and the first purchaser have entered into 
arrangements providing that the proceeds derived from the sale of 
oil or gas are to be paid by the first purchaser to the owner of the 
right to produce who is thereby deemed to be the payor having the 
responsibility of paying those proceeds received from the first 
purchaser to the payee.
		(3)  "Division order" means an agreement signed by the 
payee directing the distribution of proceeds from the sale of oil, 
gas, casinghead gas, or other related hydrocarbons.  The order 
directs and authorizes the payor to make payment for the products 
taken in accordance with the division order.  When used herein 
"division order" shall also include "transfer order".
		(4)  "Transfer order" means an agreement signed by a 
payee and his transferee (new payee) directing the payor under the 
division order to pay another person a share in the oil or gas 
produced.

Added by Acts 1983, 68th Leg., p. 966, ch. 228, § 1, eff. Sept. 1, 
1983.  Amended by Acts 1991, 72nd Leg., ch. 650, § 1, eff. Aug. 
26, 1991.


	§ 91.402. TIME FOR PAYMENT OF PROCEEDS.  (a) The proceeds 
derived from the sale of oil or gas production from an oil or gas 
well located in this state must be paid to each payee by payor on or 
before 120 days after the end of the month of first sale of 
production from the well. After that time, payments must be made to 
each payee on a timely basis according to the frequency of payment 
specified in a lease or other written agreement between payee and 
payor.  If the lease or other agreement does not specify the time 
for payment, subsequent proceeds must be paid no later than:
		(1)  60 days after the end of the calendar month in 
which subsequent oil production is sold;  or
		(2)  90 days after the end of the calendar month in 
which subsequent gas production is sold.
	(b)  Payments may be withheld without interest beyond the 
time limits set out in Subsection (a) of this section when there is:
		(1)  a dispute concerning title that would affect 
distribution of payments; 
		(2)  a reasonable doubt that the payee:                                       
			(A)  has sold or authorized the sale of its share 
of the oil or gas to the purchaser of such production;  or
			(B)  has clear title to the interest in the 
proceeds of production;        
		(3)  a requirement in a title opinion that places in 
issue the title, identity, or whereabouts of the payee and that has 
not been satisfied by the payee after a reasonable request for 
curative information has been made by the payor.
	(c)(1) As a condition for the payment of proceeds from the 
sale of oil and gas production to payee, a payor shall be entitled 
to receive a signed division order from payee containing only the 
following provisions:
			(A)  the effective date of the division order, 
transfer order, or other instrument;
			(B)  a description of the property from which the 
oil or gas is being produced and the type of production;
			(C)  the fractional and/or decimal interest in 
production claimed by payee, the type of interest, the 
certification of title to the share of production claimed, and, 
unless otherwise agreed to by the parties, an agreement to notify 
payor at least one month in advance of the effective date of any 
change in the interest in production owned by payee and an agreement 
to indemnify the payor and reimburse the payor for payments made if 
the payee does not have merchantable title to the production sold;
			(D)  the authorization to suspend payment to payee 
for production until the resolution of any title dispute or adverse 
claim asserted regarding the interest in production claimed by 
payee;
			(E)  the name, address, and taxpayer 
identification number of payee;       
			(F)  provisions for the valuation and timing of 
settlements of oil and gas production to the payee;  and
			(G)  a notification to the payee that other 
statutory rights may be available to a payee with regard to 
payments.
		(2)  Such a division order does not amend any lease or 
operating agreement between the interest owner and the lessee or 
operator or any other contracts for the purchase of oil or gas.
	(d)  In the alternative, the provisions of Subsection (c) of 
this section may be satisfied by a division order for oil payments 
in substantially the following form and content:

DIVISION ORDER

TO:                     (Payor)                                   Property No.                  
 
                                                                             
 
                                                                             
 
                                                                    Effective                     

                                                                        (Date)           
	The undersigned severally and not jointly certifies it is the 
legal owner of the interest set out below of all the oil and related 
liquid hydrocarbons produced from the property described below:
	OPERATOR:                                                                      

Property name:                                                                

County:                                                                 State:                   

Legal Description:                                                            

                                                                              

OWNER NO.                                         TAX I.D./SOC. SEC. NO. PAYEE  

DIVISION OF INTEREST                                                          

                                                                              

                                                                              
	THIS AGREEMENT DOES NOT AMEND ANY LEASE OR OPERATING 
AGREEMENT BETWEEN THE INTEREST OWNERS AND THE LESSEE OR OPERATOR OR 
ANY OTHER CONTRACTS FOR THE PURCHASE OF OIL OR GAS.
	The following provisions apply to each interest owner 
("owner") who executes this agreement:
	TERMS OF SALE:  The undersigned will be paid in accordance 
with the division of interests set out above.  The payor shall pay 
all parties at the price agreed to by the operator for oil to be sold 
pursuant to this division order.  Purchaser shall compute quantity 
and make corrections for gravity and temperature and make 
deductions for impurities.
	PAYMENT:  From the effective date, payment is to be made 
monthly by payor's check, based on this division of interest, for 
oil run during the preceding calendar month from the property 
listed above, less taxes required by law to be deducted and remitted 
by payor as purchaser.  Payments of less than $100 may be accrued 
before disbursement until the total amount equals $100 or more, or 
until 12 months' proceeds accumulate, whichever occurs first.  
However, the payor may hold accumulated proceeds of less than $10 
until production ceases or the payor's responsibility for making 
payment for production ceases, whichever occurs first.  Payee 
agrees to refund to payor any amounts attributable to an interest or 
part of an interest that payee does not own.
	INDEMNITY:  The owner agrees to indemnify and hold payor 
harmless from all liability resulting from payments made to the 
owner in accordance with such division of interest, including but 
not limited to attorney fees or judgments in connection with any 
suit that affects the owner's interest to which payor is made a 
party.
	DISPUTE;  WITHHOLDING OF FUNDS:  If a suit is filed that 
affects the interest of the owner, written notice shall be given to 
payor by the owner together with a copy of the complaint or petition 
filed.
	In the event of a claim or dispute that affects title to the 
division of interest credited herein, payor is authorized to 
withhold payments accruing to such interest, without interest 
unless otherwise required by applicable statute, until the claim or 
dispute is settled.