Texas Statutes
Subchapter D. Prevention of Pollution
Section 91.104. Bonds, Letters of Credit, Cash Deposits, and Well-Specific Plugging Insurance Policies

Sec. 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, Sec. 1, eff. Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 5258, ch. 967, Sec. 6, eff. Sept. 1, 1983; Acts 1991, 72nd Leg., ch. 603, Sec. 9, eff. Sept. 1, 1991; Acts 1999, 76th Leg., ch. 30, Sec. 1, eff. Aug. 30, 1999; Acts 2001, 77th Leg., ch. 1233, Sec. 19, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1233, Sec. 20, eff. Sept. 1, 2004; Acts 2003, 78th Leg., ch. 490, Sec. 1, eff. Sept. 1, 2004.
Amended by:
Acts 2005, 79th Leg., Ch. 489 (H.B. 380), Sec. 1, eff. June 17, 2005.