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1 STATE OF OKLAHOMA
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2 2nd Session of the 60th Legislature (2026)
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3 SENATE BILL 1976 By: Green
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6 AS INTRODUCED
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7 An Act relating to oil and gas; amending 52 O.S.
7 2021, Section 318.1, as amended by Section 1, Chapter
8 24, O.S.L. 2025 (52 O.S. Supp. 2025, Section 318.1),
8 which relates to agreement as to compliance with
9 drilling and plugging regulations; authorizing
9 certain operators to make voluntary election;
10 requiring certain notice; authorizing retention of
10 certain right; requiring certain permanence beyond
11 expiration; requiring operators to post surety by
11 certain date; updating statutory language; and
12 declaring an emergency.
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14 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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15 SECTION 1. AMENDATORY 52 O.S. 2021, Section 318.1, as
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16 amended by Section 1, Chapter 24, O.S.L. 2025 (52 O.S. Supp. 2025,
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17 Section 318.1), is amended to read as follows:
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18 Section 318.1. A. Any person who drills or operates any well
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19 for the exploration, development, or production of oil or gas, or as
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20 an injection or disposal well, within this state, shall furnish in
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21 writing, on forms approved by the Corporation Commission, his or her
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22 agreement to drill, operate, and plug wells in compliance with the
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23 rules of the Commission and the laws of this state, together with
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24 evidence of financial ability to comply with the requirements for
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Req. No. 2784 Page 1
1 plugging, closure of surface impoundments, removal of trash and
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2 equipment as established by the rules of the Commission and by law.
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3 To establish evidence of financial ability, the Commission shall
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4 require:
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5 1. Category A surety, which shall include a financial statement
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6 listing assets and liabilities, and including a general release that
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7 the information may be verified with banks and other financial
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8 institutions. The statement shall prove a net worth of not less
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9 than Fifty Thousand Dollars ($50,000.00). Category A surety will no
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10 longer be accepted as valid form of surety for new operators to
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11 select beginning November 1, 2025. All current operators who have
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12 valid Category A surety and are in good standing with the Commission
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13 will be able to retain their Category A surety for the time they are
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14 a valid operator in the State of Oklahoma this state. Any operator
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15 eligible to maintain Category A surety may voluntarily elect to
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16 convert to Category B surety upon written notice to the Commission.
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17 An operator making such election shall retain the right to revert to
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18 Category A surety without penalty or additional qualification
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19 requirements, provided the operator submits written notice of
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20 reversion within three (3) years of the effective date of the
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21 election and remains in good standing with the Commission. Upon
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22 expiration of the three-year period, the operator shall be
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23 permanently subject to Category B surety requirements; or
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Req. No. 2784 Page 2
1 2. Category B surety, which shall include an irrevocable
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2 commercial letter of credit, cash, a cashier's check, a Certificate
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3 certificate of Deposit deposit, other negotiable instrument, or a
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4 blanket surety bond. Except as provided in paragraph 1 of
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5 subsection B or subsection C of this section, the amount of such
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6 letter of credit, cash, cashier's check, certificate, bond, receipt,
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7 or other negotiable instrument shall be based on the number of wells
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8 that the person operates and shall have the option of using the
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9 phase-in schedule as follows:
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10 a. for one to ten wells, Twenty-five Thousand Dollars
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11 ($25,000.00),
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12 b. for eleven to fifty wells, operators shall post
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13 Category B surety in the amount of Thirty-three
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14 Thousand Three Hundred Dollars ($33,300.00) no later
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15 than the due date of the operator's Form 1006B
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16 occurring during the calendar year 2026; on the due
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17 date of the operator's Form 1006B for the year 2027,
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18 operators shall post Category B surety in the amount
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19 of Forty-one Thousand Six Hundred Dollars
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20 ($41,600.00); on the due date of the operator's Form
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21 1006B for the year 2028, operators shall post Category
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22 B surety in the full amount of Fifty Thousand Dollars
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23 ($50,000.00),
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Req. No. 2784 Page 3
1 c. for fifty-one to one hundred wells, operators shall
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2 post Category B surety in the amount of Fifty Thousand
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3 Dollars ($50,000.00) no later than the due date of the
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4 operator's Form 1006B occurring during the calendar
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5 year 2026; on the due date of the operator's Form
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6 1006B for the year 2027, operators shall post Category
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7 B surety in the amount of Seventy-five Thousand
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8 Dollars ($75,000.00); on the due date of the
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9 operator's Form 1006B for the year 2028, operators
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10 shall post Category B surety in the full amount of One
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11 Hundred Thousand Dollars ($100,000.00), and
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12 d. for more than one hundred wells, operators shall post
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13 Category B surety in the amount of Sixty-six Thousand
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14 Five Hundred Dollars ($66,500.00) no later than the
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15 due date of the operator's Form 1006B occurring during
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16 the calendar year 2026; on the due date of the
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17 operator's Form 1006B for the year 2027, operators
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18 shall post Category B surety in the amount of One
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19 Hundred Eight Thousand Dollars ($108,000.00); on the
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20 due date of the operator's Form 1006B for the year
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21 2028, operators shall post Category B surety in the
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22 full amount of One Hundred Fifty Thousand Dollars
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23 ($150,000.00).
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Req. No. 2784 Page 4
1 By the end of the year in 2028, all Category B operators shall be
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2 required to post surety in the full amounts specified in paragraph 2
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3 of this subsection, based upon the number of wells operated. The
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4 Commission is authorized to determine a higher amount of Category B
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5 surety based upon the past performance of the operator and its
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6 insiders and affiliates regarding compliance with the laws of this
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7 state, and any rules promulgated thereto including, but not limited
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8 to, the drilling, operation, and plugging of wells, closure of
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9 surface impoundments, or removal of trash and equipment, provided
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10 that such higher amount shall not exceed One Hundred Fifty Thousand
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11 Dollars ($150,000.00). Any instrument shall constitute an
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12 unconditional promise to pay and be in a form negotiable by the
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13 Commission.
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14 B. 1. The Commission upon certification by any operator
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15 subject to Category B surety that its plugging liability statewide
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16 is less than the amount based on the number of wells operated as
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17 specified in this section may allow said the operator to provide
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18 Category B type surety in an amount less than the amount required by
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19 this section, but at least sufficient to cover the estimated cost of
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20 all plugging, closure, and removal operations currently the
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21 responsibility of that operator. The liability certification
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22 referred to in this subsection shall take the form of an affidavit
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23 from a licensed well plugger estimating the costs of all plugging,
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24 closure, and removal operations of the operator requesting such
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Req. No. 2784 Page 5
1 relief. This alternative amount shall be modified upward upon the
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2 assumption of additional operations by such operator, the maximum
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3 amount of Category B surety to be posted not to exceed One Hundred
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4 Fifty Thousand Dollars ($150,000.00).
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5 2. New operators, operators who have outstanding fines or
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6 contempt citations, and operators whose insiders or affiliates have
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7 outstanding contempt citations or fines as of June 7, 1989, shall be
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8 required to post Category B surety.
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9 3. Operators using Category A surety who are assessed a fine of
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10 Two Thousand Dollars ($2,000.00) or more and who do not pay the fine
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11 within the specified time shall be required to post a Category B
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12 surety within thirty (30) days of notification by the Commission.
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13 C. For good cause shown concerning pollution or improper
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14 plugging of wells by the operator posting either Category A or B
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15 surety or by an insider or affiliate of such operator, the
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16 Commission, upon application of the Director of the Oil and Gas
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17 Conservation Division, after notice and hearing, may require the
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18 filing of additional Category B surety in an amount greater than
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19 Twenty-five Thousand Dollars ($25,000.00) but not to exceed One
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20 Hundred Fifty Thousand Dollars ($150,000.00).
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21 D. If the Commission determines that a blanket surety bond is
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22 required, the bond shall be conditioned on the fact that the
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23 operator shall cause the wells to be plugged and abandoned surface
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24 impoundments to be closed, and trash and equipment to be removed in
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Req. No. 2784 Page 6
1 accordance with the laws of this state and the rules of the
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2 Commission. Each bond shall be executed by a corporate surety
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3 authorized to do business in this state and shall be renewed and
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4 continued in effect until the conditions have been met or release of
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5 the bond is authorized by the Commission.
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6 E. The agreement provided for in subsection A of this section
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7 shall provide that if the Commission determines that the person
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8 furnishing the agreement has neglected, failed, or refused to plug
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9 and abandon, or cause to be plugged and abandoned, or replug any
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10 well or has neglected, failed, or refused to close any surface
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11 impoundment or removed or cause to be removed trash and equipment in
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12 compliance with the rules of the Commission, then the person shall
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13 forfeit from his or her bond, letter of credit, or negotiable
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14 instrument or shall pay to this state, through the Commission, for
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15 deposit in the State Treasury, a sum equal to the cost of plugging
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16 the well, closure of any surface impoundment or removal of trash and
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17 equipment. The Commission may cause the remedial work to be done,
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18 issuing a warrant in payment of the cost thereof drawn against the
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19 monies accruing in the State Treasury from the forfeiture or
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20 payment. Any monies accruing in the State Treasury by reason of a
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21 determination that there has been a noncompliance with the
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22 provisions of the agreement or the rules of the Commission, in
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23 excess of the cost of remedial action ordered by the Commission,
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24 shall be credited to the Oil and Gas Division Revolving Fund. The
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Req. No. 2784 Page 7
1 Commission shall also recover any costs arising from litigation to
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2 enforce this provision. Provided, before a person is required to
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3 forfeit or pay any monies to the state pursuant to this section, the
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4 Commission shall notify the person at his or her last-known last
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5 known address of the determination of neglect, failure, or refusal
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6 to plug or replug any well, or close any surface impoundment or
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7 remove trash and equipment and said the person shall have ten (10)
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8 days from the date of notification within which to commence remedial
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9 operations. Failure to commence remedial operations shall result in
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10 forfeiture or payment as provided in this subsection.
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11 F. It shall be unlawful for any person to drill or operate any
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12 oil or gas well subject to the provisions of this section, without
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13 the evidence of financial ability required by this section. The
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14 Commission shall shut in, without notice, hearing, or order of the
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15 Commission, the wells of any such person violating the provisions of
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16 this subsection and such wells shall remain shut in for
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17 noncompliance until the required evidence of Category B surety is
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18 obtained and verified by the Commission.
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19 G. If title to property or a well is transferred, the
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20 transferee shall furnish the evidence of financial ability to plug
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21 the well and close surface impoundments required by the provisions
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22 of this section, prior to the transfer.
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23 H. As used in this section:
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Req. No. 2784 Page 8
1 1. "Affiliate" means an entity that owns twenty percent (20%)
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2 or more of the operator, or an entity of which twenty percent (20%)
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3 or more is owned by the operator; and
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4 2. "Insider" means officer, director, or person in control of
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5 the operator; general partners of or in the operator; general or
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6 limited partnership in which the operator is a general partner;
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7 spouse of an officer, director, or person in control of the
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8 operator; spouse of a general partner of or in the operator;
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9 corporation of which the operator is a director, officer, or person
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10 in control; affiliate, or insider of an affiliate as if such
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11 affiliate were the operator; or managing agent of the operator.
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12 SECTION 2. It being immediately necessary for the preservation
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13 of the public peace, health or safety, an emergency is hereby
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14 declared to exist, by reason whereof this act shall take effect and
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15 be in full force from and after its passage and approval.
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17 60-2-2784 CN 1/15/2026 9:21:39 AM
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Req. No. 2784 Page 9Every fact on this page links to its source, starting with the official bill record.