By: Geren H.B. No. 2766       A BILL TO BE ENTITLED   AN ACT   relating to the plugging of certain inactive wells subject to the   jurisdiction of the Railroad Commission of Texas.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 89.023, Natural Resources Code, is   amended by amending Subsection (b) and adding Subsections (c)   through (g) to read as follows:          (b)  Notwithstanding Subsection (a), an operator may not   obtain an extension of the deadline for plugging an inactive well by   complying with that subsection:                (1)  if the plugging of the well is otherwise required   by commission rules or orders; or                (2)  if the inactive well:                      (A)  has been an inactive well for more than 15   years; and                      (B)  25 years have elapsed since the well was   completed, unless:                            (i)  the commission approves an order   granting an applicant's exception to plugging the inactive well; or                            (ii)  the inactive well is included in an   approved compliance plan under Subsection (e), in which the   operator of the well commits to plug, or restore to active   operation, the inactive well within a time period ending on   September 1, 2040.          (c)  When considering a request under Subsection   (b)(2)(B)(i) for an exception to plugging an inactive well, the   commission shall consider an operator's demonstrated history of   returning inactive wells to active status.          (d)  An exception approved by order of the commission under   Subsection (b)(2)(B)(i) is not transferrable to another operator   and shall terminate upon transfer of the well, except that a new   operator of that well may seek an additional exception under   Subsection (b) for that well.          (e)  An operator may request the commission or its delegate   to approve a compliance plan for inactive wells. In approving a   compliance plan pursuant to Subsection (b)(2)(B)(ii), the   commission or its delegate shall consider the following factors:                (1)  the number of years the well has been inactive and   its age;                (2)  current economic conditions;                (3)  the well operator's percentage of inactive wells   as compared to its total well count;                (4)  any plan of action by the well operator to plug or   bring its inactive wells into production, injection, or other   service operation, which must include a compliance report to be   submitted to the commission annually with the operator's P-5   renewal;                (5)  whether the operator has financial assurance to   cover the actual plugging costs of each well;                (6)  the well operator's record of compliance, the   history of any previous violations, and the seriousness of any   previous violations;                (7)  any potential hazards to the health and safety of   the public or environmental risks posed by the inactive well; and                (8)  the demonstrated good faith of the well operator.          (f)  If the commission or its delegate denies an operator's   request for approval of a compliance plan pursuant to Subsection   (e), the operator may request a hearing and order of the commission.          (g)  The commission shall adopt rules that provide for   administrative review and approval of requests to transfer an   inactive well to another operator to ensure that wells of the   receiving operator are in compliance with this section.          SECTION 2.  Subchapter B-1, Chapter 89, Natural Resources   Code, is amended by adding Section 89.031 to read as follows:          Sec. 89.031.  ANNUAL REPORT BY COMMISSION.  On or before   September 1, 2026, and each year thereafter, the commission shall   prepare and submit to the governor, lieutenant governor, and each   member of the legislature a report on inactive wells that includes:                (1)  the number of inactive wells in Texas;                (2)  the age and length of inactivity for the inactive   wells;                (3)  the quantity of inactive wells that use each   method for extending the deadline under this chapter for plugging   inactive wells;                (4)  the identification of the financial assurance   methods being used by operators for inactive wells under this   chapter, and the quantity of the number of inactive wells for each   category of financial assurance;                (5)  the number of inactive wells and total wells that   were plugged in the prior 12 months, including a breakdown by   commission district of wells plugged by industry and by the   commission using state-managed funds;                (6)  the number of inactive wells that were returned to   production, injection, or other service operation in the prior 12   months;                (7)  P-5 status statistical summary of the number of   operators of inactive wells including the total number of operators   and total number of inactive wells for the status categories of   active P-5, P-5 Extension, Delinquent P-5, and P-5 delinquent   greater than 12 months;                (8)  the number of P-5 Organization Reports revoked   under Section 91.114, the associated well count, the total amount   of financial assurance in place for those operators, and the amount   of financial assurance collected; and                (9)  the annual cost calculation for plugging an   inactive well, as defined in Section 89.002 (a)(9).          SECTION 3.  Subchapter B-1, Chapter 89, Natural Resources   Code, is amended by adding Section 89.032 to read as follows:          Sec. 89.032.  COMMISSION RULEMAKING.  (a)  The commission   shall by rule adopt requirements for inactive wells. In its   rulemaking, the commission shall consider the following factors:                (1)  risk to public safety and/or the environment;                (2)  wellbore integrity and wellhead integrity   including the ability to monitor casing pressures; and                (3)  regional considerations of risk such as   penetration of corrosive or overpressured formations, and   completion in zones containing hydrogen sulfide.          (b)  The commission's rules shall include requirements that   within one year of the 15th anniversary of a well becoming inactive,   the operator of that well submit a report to the commission that:                (1)  demonstrates completion of a successful fluid   level test or a mechanical integrity test of the well conducted in   accordance with the commission's rules in effect at the time of the   test, with a phase-in period for wells that require testing on the   effective date of the rule; and                (2)  includes documentation of the results of a   successful fluid level test and reporting of pressure on the   production casing prior to testing.          SECTION 4.  This Act takes effect September 1, 2025.