SB 1150

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
(A)  has been an inactive well for more than 15
(B)  25 years have elapsed since the well was
(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
(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
(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
(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
(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
(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
(3)  the quantity of inactive wells that use each
method for extending the deadline under this chapter for plugging
(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
(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
(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.