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Texas Natural Resources Code - Section 91.104. Bonds, Letters Of Credit, Cash Deposits, And Well-Specific Plugging Insurance Policies

Legal Research Home > Texas Laws > Natural Resources Code > Texas Natural Resources Code - Section 91.104. Bonds, Letters Of Credit, Cash Deposits, And Well-Specific Plugging Insurance Policies

§ 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.

Last modified: August 11, 2007