88R8013 JAM-F     By: Longoria H.B. No. 4278       A BILL TO BE ENTITLED   AN ACT   relating to the establishment by the Railroad Commission of Texas   of the orphaned well Bitcoin mining partnership program.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Chapter 89, Natural Resources Code, is amended   by adding Subchapter D-1 to read as follows:   SUBCHAPTER D-1. ORPHANED WELL BITCOIN MINING PARTNERSHIP PROGRAM          Sec. 89.101.  DEFINITIONS. In this subchapter:                (1)  "Fund" means the orphaned well Bitcoin mining   partnership program fund.                (2)  "Orphaned well" has the meaning assigned by   Section 89.047.                (3)  "Program" means the orphaned well Bitcoin mining   partnership program established under this subchapter.                (4)  "Program participant" means a Bitcoin miner who   assumes operation and regulatory responsibility for an orphaned   well through the program.          Sec. 89.102.  PROGRAM. The commission shall establish the   orphaned well Bitcoin mining partnership program through which:                (1)  a program participant will assume operation and   regulatory responsibility for an orphaned well, including:                      (A)  liability for plugging, remediating, or   reclaiming the well to commission standards; and                      (B)  temporary control of:                            (i)  the energy produced from the well for   which liability is assumed in a manner established by commission   rule; and                            (ii)  a portion of the surface estate at the   well location necessary to mine Bitcoin at the location, as   determined by the commission; and                (2)  the commission may loan money from the fund to a   program participant to facilitate Bitcoin mining at the location of   the well.          Sec. 89.103.  FUND. (a) The orphaned well Bitcoin mining   partnership program fund is a special account in the general   revenue fund created for the purpose of providing loans to program   participants and the payment of costs associated with plugging   orphaned wells under Section 89.109(c).          (b)  The fund consists of:                (1)  money received from the federal government under:                      (A)  the Infrastructure Investment and Jobs Act   (Pub. L. No. 117-58); or                      (B)  Pub. L. No. 117-169, commonly cited as the   Inflation Reduction Act;                (2)  deposits to the fund made under Section 89.111;                (3)  money from any source transferred or deposited to   the credit of the fund at the commission's discretion as authorized   by law;                (4)  any other revenue that the legislature by statute   dedicates for deposit to the credit of the fund;                (5)  money from gifts, grants, or donations to the   fund; and                (6)  investment earnings and interest earned on amounts   credited to the fund.          Sec. 89.104.  IDENTIFICATION OF ORPHANED WELLS.  The   commission shall identify orphaned wells appropriate for inclusion   in the program.          Sec. 89.105.  PUBLICATION OF CERTAIN INFORMATION REGARDING   ORPHANED WELLS.  The commission shall make publicly accessible on   the commission's Internet website:                 (1)  any information required as a condition of the   receipt or use of money described by Section 89.103(b)(1); and                (2)  information on each well identified under Section   89.104, including:                      (A)  the amount of methane or any other natural   gas reasonably expected to be produced from the well;                      (B)  the location of the well;                      (C)  how long the well has been abandoned;                      (D)  an estimate of expenses required to plug,   remediate, or reclaim the well to commission standards;                      (E)  whether the well is on state-owned or private   land;                      (F)  information on the last known operator of the   well;                      (G)  any information regarding the integrity of   the well or well casing; and                      (H)  any other information the commission   considers relevant to the program.          Sec. 89.106.  SOLICITATION OF BIDS. (a) At the commission's   discretion, but not less than once per year, the commission shall   solicit bids through the commission's Internet website from   potential program participants to assume liability for an orphaned   well for which information is published under Section 89.105.          (b)  A bid submission under Subsection (a) must contain:                (1)  legal documents showing the structure of the   Bitcoin mining company;                (2)  documents demonstrating the company's ability to   successfully mine Bitcoin;                (3)  a reasonable estimate of:                      (A)  when Bitcoin mining would begin at the   location;                      (B)  how long the Bitcoin mining would occur at   the location;                      (C)  the initial investment from the fund the   company would require to begin Bitcoin mining at the location;                      (D)  how much Bitcoin would be mined at the   location through participation in the program;                       (E)  conditions necessary for Bitcoin mining to be   profitable at the location; and                      (F)  the money the company will contribute to the   fund in the form of Bitcoin during participation in the program;                (4)  proof of financial responsibility for the   company's ability to ensure proper plugging of the well and cleanup   of the location regardless of the success of the mining operation at   the location; and                (5)  any other information the commission considers   relevant.          (c)  Information submitted to the commission under   Subsection (b) may not be publicly disclosed. The commission may   provide summary statistics regarding information received in the   bids.          Sec. 89.107.  SELECTION OF BIDS; ASSESSMENT PERIOD. (a)   After the close of a bidding period as determined by the commission,   the commission shall select bids based on:                (1)  the ability of the potential program participant   to successfully and safely mine at the location;                (2)  the time frame over which the potential program   participant will mine on the well; and                (3)  the initial cost and return on investment for the   program.          (b)  The commission shall announce the selection of bids on   the commission's Internet website and must include for a bid   selected a redacted version of the bidder's proposal that removes   sensitive business information of the bidder.          (c)  The commission shall allow a potential program   participant whose bid was selected under this section not more than   60 days from the date the bid is awarded to perform an assessment of   the orphaned well for which the bid was awarded. The assessment   must include the ability to:                (1)  perform tests for mechanical integrity;                (2)  perform tests for surface integrity; and                (3)  determine the amount of natural gas and or oil the   well can produce.          (d)  Subject to Subsection (e), not later than the 60th day   after the date a bid is selected under Subsection (a), a potential   program participant whose bid was selected shall give notice to the   commission as to whether the potential program participant will   participate in the program. A potential program participant   required to give notice under this section assumes responsibility   for plugging, remediating, or reclaiming the orphaned well for   which the potential program participant's bid was selected if the   potential program participant does not give notice as required by   this subsection.          (e)  The assessment period described by Subsection (c) may be   extended by the commission for an additional 60 days on application   of the potential program participant whose bid was selected.          (f)  Subject to an extension provided under Subsection (e),   information collected under Subsection (c) must be reported to the   commission not later than the 60th day after the end of the   assessment period described by Subsection (c).          (g)  A person who notifies the commission under Subsection   (d) that the person will not participate in the program must provide   to the commission a reason for that decision.          Sec. 89.108.  BITCOIN MINING AT LOCATION OF ORPHANED WELL.   (a) Before beginning Bitcoin mining, a program participant must:                (1)  use a third-party organization to report to the   commission the amount of natural gas emissions currently being   emitted from the well;                (2)  post a bond to the state in an amount determined by   the commission to ensure that the orphaned well will be plugged,   remediated, or reclaimed to commission standards; and                (3)  if the owner of the mineral rights of the orphaned   well is known, negotiate with that owner for royalty payments for   oil or gas produced from the well.          (b)  A program participant who assumes control over an   orphaned well assumes all liability for plugging, remediating, or   reclaiming the well to commission standards.          (c)  The commission shall remove from any required plugging   schedule a well for which a program participant has assumed   liability under this section.          Sec. 89.109.  COSTS. (a) Subject to Subsection (b), the   financial responsibility of a program participant to plug,   remediate, or reclaim an orphaned well is limited to three times the   initial estimate by the commission if the program participant uses   a third party to provide to the commission:                (1)  information about the well integrity;                (2)  data on natural gas emissions from the well;                (3)  information related to any potential groundwater   contamination; and                (4)  information demonstrating that Bitcoin mining at   the location did not significantly cause the cost of plugging,   remediating, or reclaiming the well to increase.          (b)  The limitation on the financial responsibility of a   program participant described by Subsection (a) does not apply to   additional costs attributable to actions of the program   participant.          (c)  The commission shall pay from the fund the costs   associated with the plugging, remediation, or reclamation of an   orphaned well that exceed the limitation described by Subsection   (a), other than costs described by Subsection (b).          Sec. 89.110.  LIABILITY. A program participant does not   incur any liability through participation in the program other   than:                (1)  the duty to plug, remediate, or reclaim to   commission standards an orphaned well they have taken control of   through the program; and                (2)  the repayment of a loan provided through the   program.          Sec. 89.111.  REPAYMENT OF LOAN; FORM OF PAYMENT. (a) The   commission shall establish the terms and conditions of the   repayment of any money from the fund loaned to a program   participant.          (b)  A program participant may pay any money owed to the   commission in Bitcoin.           Sec. 89.112.  ANNUAL REPORT. A program participant shall   submit to the commission an annual report documenting progress on   the plugging, remediation, or reclamation of the orphaned well that   was the subject of the participant's selected bid.          Sec. 89.113.  DUTY TO PLUG. After the termination of the   period established in the bid, a program participant shall plug,   remediate, or reclaim the orphaned well using a service approved by   the commission.          Sec. 89.114.  THIRD-PARTY AGREEMENTS. A program participant   may enter into an agreement with a third party to facilitate the   transfer of oil from an orphaned well to market.          Sec. 89.115.  ASSUMPTION OF OWNERSHIP. (a) At the end of   the agreed-upon mining period, a program participant may take legal   ownership of the orphaned well as otherwise provided by law.          (b)  A program participant who intends to take ownership of   an orphaned well that is part of the program shall send notice to   the commission not later than 12 months before the well is scheduled   to be plugged, remediated, or reclaimed.          (c)  Assumption of ownership under this section does not   remove the responsibility of a program participant to plug,   remediate, or reclaim the orphaned well.          Sec. 89.116.  CONFLICT WITH OTHER LAW. This subchapter   prevails to the extent of any conflict with another provision of   this chapter.          SECTION 2.  This Act takes effect September 1, 2023.