Texas Administrative Code › Title 16 - ECONOMIC REGULATION › Part 1 - RAILROAD COMMISSION OF TEXAS › Chapter 3 - OIL AND GAS DIVISION › Section 3.78 - Fees and Financial Security Requirements

Current through Reg. 49, No. 28; July 12, 2024
(a) Definitions. The following words and
				terms, when used in this section, shall have the following meanings, unless the
				context clearly indicates otherwise:
(1)
				Violation--Noncompliance with a Commission rule, order, license, permit, or
				certificate relating to safety or the prevention or control of
				pollution.
(2) Outstanding
				violation--A violation for which:
(A) either:
(i) a Commission order finding a violation
				has been entered and all appeals have been exhausted; or
(ii) an agreed order between the Commission
				and the organization relating to a violation has been entered; and
(B) one or more of the following
				conditions still exist:
(i) the conditions
				that constituted the violation have not been corrected;
(ii) all administrative, civil, and criminal
				penalties, if any, relating to the violation of such Commission rules, orders,
				licenses, permits, or certificates have not been paid; or
(iii) all reimbursements of any costs and
				expenses assessed by the Commission relating to the violation of such
				Commission rules, orders, licenses, permits, or certificates have not been
				paid.
(3)
				Commercial facility--A facility whose owner or operator receives compensation
				from others for the storage, reclamation, treatment, or disposal of oil field
				fluids or oil and gas wastes that are wholly or partially trucked or hauled to
				the facility and whose primary business purpose is to provide these services
				for compensation if:
(A) the facility is
				permitted under §
											RSA
				3.8 of this title (relating to Water
				Protection);
(B) the facility is
				permitted under §
											RSA
				3.57 of this title (relating to Reclaiming
				Tank Bottoms, Other Hydrocarbon Wastes, and Other Waste Materials);
(C) the facility is permitted under §
											RSA 3.9
				of this title (relating to Disposal Wells) and a collecting pit permitted under
				§3.8 is located at the facility; or
(D) the facility is permitted under §
											RSA
				3.46 of this title (relating to Fluid
				Injection into Productive Reservoirs) and a collecting pit permitted under
				§3.8 is located at the facility.
(4) Financial security--An individual
				performance bond, blanket performance bond, letter of credit, or cash deposit
				filed with the Commission.
(5) Bay
				well--Any well under the jurisdiction of the Commission for which the surface
				location is either:
(A) located in or on a
				lake, river, stream, canal, estuary, bayou, or other inland navigable waters of
				the state and which requires plugging by means other than conventional
				land-based methods, including, but not limited to, use of a barge, use of a
				boat, dredging, or building a causeway or other access road to bring in the
				necessary equipment to plug the well; or,
(B) located on state lands seaward of the
				mean high tide line of the Gulf of Mexico in water of a depth at mean high tide
				of not more than 100 feet that is sheltered from the direct action of the open
				seas of the Gulf of Mexico.
(6) Land well--Any well subject to Commission
				jurisdiction for which the surface location is not in or on inland or coastal
				waters.
(7) Offshore well--Any well
				subject to Commission jurisdiction for which the surface location is on state
				lands in or on the Gulf of Mexico, that is not a bay well.
(8) Officers and owners--Any persons owning
				or controlling an organization including officers, directors, general partners,
				sole proprietors, owners of more than 25% ownership interest, any trustee of an
				organization, and any person determined by a final judgment or final
				administrative order to have exercised control over the organization.
(9) Letter of credit--An irrevocable letter
				of credit issued:
(A) on a
				Commission-approved form;
(B) by
				and drawn on a third party bank authorized under state or federal law to do
				business in Texas; and
(C) renewed
				and continued in effect until the conditions of the letter of credit have been
				met or its release is approved by the Commission or its authorized
				delegate.
(10) Bond--A
				surety instrument issued:
(A) on a
				Commission-approved form;
(B) by
				and drawn on a third party corporate surety authorized under state law to issue
				surety bonds in Texas; and
(C)
				renewed and continued in effect until the conditions of the bond have been met
				or its release is approved by the Commission or its authorized
				delegate.
(11)
				Well-specific plugging insurance policy--An insurance policy that:
(A) is approved by the Texas Department of
				Insurance;
(B) is issued by an
				insurer authorized under state law to issue a well-specific plugging insurance
				policy in Texas;
(C) names the
				Commission as the owner and contingent beneficiary of the policy;
(D) names a primary beneficiary who agrees to
				plug the specified well bore;
(E)
				is fully prepaid and cannot be canceled or surrendered;
(F) provides that the policy continues in
				effect until the well bore has been plugged as required by the
				Commission;
(G) provides that
				benefits will be paid when, but not before, the specified well bore has been
				plugged; and
(H) provides that
				benefits that will equal or exceed:
(i) $2
				per foot for each foot of well depth for land wells;
(ii) $60,000 for bay wells; or
(iii) $100,000 for offshore wells.
(12) Director--The
				director of the Commission's Oil and Gas Division or the director's
				delegate.
(13) Escrow funds--Funds
				deposited with the Commission as part of an application for a plugging
				extension for an inactive land well.
(14) Groundwater protection determination
				letter--A letter of determination stating the total depth of surface casing
				required for a well in accordance with Texas Natural Resources Code, §
										RSA
				91.011.