Bill Text: PA HB808 | 2009-2010 | Regular Session | Introduced

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Bill Title: Further providing for bonding and for well plugging funds.

Spectrum: Slight Partisan Bill (Republican 8-3)

Status: (Introduced - Dead) 2009-03-09 - Referred to ENVIRONMENTAL RESOURCES AND ENERGY [HB808 Detail]

Download: Pennsylvania-2009-HB808-Introduced.html

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PRINTER'S NO. 898
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 808 Session of2009
INTRODUCED BY QUINN, BEYER, GINGRICH, MAJOR, MURT, PICKETT, SIPTROTH, SWANGER AND YOUNGBLOOD, MARCH 9, 2009
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, MARCH 9, 2009
AN ACT
Amending the act of December 19, 1984 (P.L.1140, No.223),
entitled "An act relating to the development of oil and gas
and coal; imposing duties and powers on the Department of
Environmental Resources; imposing notification requirements
to protect landowners; and providing for definitions, for
various requirements to regulate the drilling and operation
of oil and gas wells, for gas storage reservoirs, for various
reporting requirements, including certain requirements
concerning the operation of coal mines, for well permits, for
well registration, for distance requirements, for well casing
requirements, for safety device requirements, for storage
reservoir obligations, for well bonding requirements, for a
Well Plugging Restricted Revenue Account to enforce oil and
gas well plugging requirements, for the creation of an Oil
and Gas Technical Advisory Board, for oil and gas well
inspections, for enforcement and for penalties," further
providing for bonding and for well plugging funds.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 215(a) and 601(b) and (c)(1) of the act
of December 19, 1984 (P.L.1140, No.223), known as the Oil and
Gas Act, amended July 2, 1992 (P.L.365, No.78), are amended to
read:
Section 215. Bonding.
(a) (1) Except as provided in subsection (d) hereof, upon
filing an application for a well permit and before continuing
to operate any oil or gas well, the owner or operator thereof
shall file with the department a bond for the well and the
well site on a form to be prescribed and furnished by the
department. Any such bond filed with an application for a
well permit shall be payable to the Commonwealth and
conditioned that the operator shall faithfully perform all of
the drilling, water supply replacement, restoration and
plugging requirements of this act. Any such bond filed with
the department for a well in existence on the effective date
of this act shall be payable to the Commonwealth and
conditioned that the operator shall faithfully perform all of
the water supply replacement, restoration and plugging
requirements of this act. The amount of the bond required
shall be in the amount of [$2,500] $5,000 per well for at
least two years following the effective date of this act,
after which time the bond amount may be adjusted by the
Environmental Quality Board every two years to reflect the
projected costs to the Commonwealth of performing well
plugging.
(2) In lieu of individual bonds for each well, an owner
or operator may file a blanket bond, on a form prepared by
the department, covering all of its wells in Pennsylvania as
enumerated on the bond form. A blanket bond shall be in the
amount of [$25,000] $50,000 for at least two years following
the effective date of this act, after which time the bond
amount may be adjusted by the Environmental Quality Board
every two years to reflect the projected costs to the
Commonwealth of performing well plugging.
(3) Liability under such bond shall continue until the
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well has been properly plugged in accordance with this act
and for a period of one year after filing of the certificate
of plugging with the department. Each bond shall be executed
by the operator and a corporate surety licensed to do
business in the Commonwealth and approved by the secretary.
The operator may elect to deposit cash, certificates of
deposit or automatically renewable irrevocable letters of
credit from financial institutions chartered or authorized to
do business in Pennsylvania and regulated and examined by the
Commonwealth or a Federal agency which may be terminated at
the end of a term only upon the financial institution giving
90 days prior written notice to the permittee and the
department or negotiable bonds of the United States
Government or the Commonwealth, the Pennsylvania Turnpike
Commission, the General State Authority, the State Public
School Building Authority or any municipality within the
Commonwealth, or United States Treasury Bonds issued at a
discount without a regular schedule of interest payments to
maturity, otherwise known as Zero Coupon Bonds, having a
maturity date of not more than ten years after the date of
purchase and at such maturity date having a value of not less
than [$25,000] $50,000, with the department in lieu of a
corporate surety. The cash deposit, certificate of deposit,
amount of such irrevocable letter of credit or market value
of such securities shall be equal at least to the sum of the
bond. The secretary shall, upon receipt of any such deposit
of cash, letters of credit or negotiable bonds, immediately
place the same with the State Treasurer, whose duty it shall
be to receive and hold the same in the name of the
Commonwealth, in trust, for the purpose for which such
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deposit is made. The State Treasurer shall at all times be
responsible for the custody and safekeeping of such deposits.
The operator making deposit shall be entitled from time to
time to demand and receive from the State Treasurer, on the
written order of the secretary, the whole or any portion of
any collateral so deposited, upon depositing with him, in
lieu thereof, other collateral of the classes herein
specified having a market value at least equal to the sum of
the bond, and also to demand, receive and recover the
interest and income from said negotiable bonds as the same
becomes due and payable. Where negotiable bonds, deposited as
aforesaid, mature or are called, the State Treasurer, at the
request of the owner thereof, shall convert such negotiable
bonds into such other negotiable bonds of the classes herein
specified as may be designated by the owner. Where notice of
intent to terminate a letter of credit is given, the
department shall give the operator 30 days' written notice to
replace the letter of credit with other acceptable bond
guarantees as provided herein and, if the owner or operator
fails to replace the letter of credit within the 30-day
notification period, the department shall draw upon and
convert such letter of credit into cash and hold it as a
collateral bond guarantee.
* * *
Section 601. Well plugging funds.
* * *
(b) To aid in the indemnification of the Commonwealth for
the cost of plugging abandoned wells, there shall be added to
the permit fee established by the department under section 201
for new wells a [$50] $100 surcharge. All moneys collected as a
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result of this surcharge shall be paid into the State Treasury
into a restricted revenue account to be known as the Abandoned
Well Plugging Fund, hereby established, and shall be expended by
the department to plug abandoned wells which threaten the health
and safety of persons or property or pollution of the waters of
the Commonwealth.
(c) (1) There is hereby created a restricted revenue
account to be known as the Orphan Well Plugging Fund. There
shall be added to the permit fee established by the
department under section 201 for new wells a [$100] $200
surcharge for wells to be drilled for oil production and a
[$200] $400 surcharge for wells to be drilled for gas
production, which surcharges shall be placed in the Orphan
Well Plugging Fund and shall be expended by the department to
plug orphan wells. If an operator rehabilitates a well
abandoned by another operator or an orphan well, the permit
fee and the surcharge for such well shall be waived.
* * *
Section 2. This act shall take effect in 60 days.
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