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Introduced Version House Bill 2722 History

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Key: Green = existing Code. Red = new code to be enacted

H. B. 2722

 

                        (By Delegates Anderson, Hamilton, Border-Sheppard, Canterbury,

                                                       Romine, D. Evans, Hamrick and Eldridge)


                        [Introduced February 13, 2015; referred to the

                        Committee on Energy then Finance.]

 

 

A BILL to amend and reenact §22-6-2 of the Code of West Virginia, 1931, as amended; and to amend said code by adding thereto a new section, designated §36-4-9b, all relating generally to oil and gas; requiring oil and gas lessees to make royalty payments within one hundred twenty days of production; providing for interest; providing for a complaint to be filed; and granting authority to the Secretary of the Department of Environmental Protection to suspend an oil and gas permit if royalty payments are not timely made.

Be it enacted by the Legislature of West Virginia:

            That §22-6-2 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that said code be amended by adding thereto a new section, designated §36-4-9b, all to read as follows:

CHAPTER 22. ENVIRONMENTAL RESOURCES.

ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS; ADMINISTRATION; ENFORCEMENT.

§22-6-2. Secretary -- Powers and duties generally; department records open to public; inspectors.

            (a) The secretary shall have as his or her duty the supervision of the execution and enforcement of matters related to oil and gas set out in this article and in articles six-a, eight, nine, ten and twenty-one of this chapter.

            (b) The secretary is authorized to propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code necessary to effectuate the above stated purposes.

            (c) The secretary shall have full charge of the oil and gas matters set out in this article and in articles six-a, eight, nine, ten and twenty-one of this chapter. In addition to all other powers and duties conferred upon him or her, the secretary shall have the power and duty to:

            (1) Supervise and direct the activities of the Office of Oil and Gas and see that the purposes set forth in subsections (a) and (b) of this section are carried out;

            (2) Determine the number of supervising oil and gas inspectors and oil and gas inspectors needed to carry out the purposes of this article and articles six-a, eight, nine, ten, and twenty-one of this chapter and appoint them as such. All appointees must be qualified civil service employees, but no person is eligible for appointment until he or she has served in a probationary status for a period of six months to the satisfaction of the secretary;

            (3) Supervise and direct such oil and gas inspectors and supervising inspectors in the performance of their duties;

            (4) Make investigations or inspections necessary to ensure compliance with and to enforce the provisions of this article and articles six-a, eight, nine, ten, and twenty-one of this chapter;

            (5) Prepare report forms to be used by oil and gas inspectors or the supervising inspector in making their findings, orders and notices, upon inspections made in accordance with this article and articles six-a, eight, nine, ten and twenty-one of this chapter;

            (6) Employ a hearing officer and such clerks, stenographers and other employees, as may be necessary to carry out his or her duties and the purposes of the Office of Oil and Gas and fix their compensation;

            (7) Hear and determine applications made by owners, well operators and coal operators for the annulment or revision of orders made by oil and gas inspectors or the supervising inspector, and to make inspections, in accordance with the provisions of this article and articles eight and nine of this chapter;

            (8) Cause a properly indexed permanent and public record to be kept of all inspections made by the secretary or by oil and gas inspectors or the supervising inspector;

            (9) Conduct research and studies as the secretary shall deem necessary to aid in protecting the health and safety of persons employed within or at potential or existing oil or gas production fields within this state, to improve drilling and production methods and to provide for the more efficient protection and preservation of oil and gas-bearing rock strata and property used in connection therewith;

            (10) Collect a permit fee of $400 for each permit application filed other than an application for a deep well, horizontal wells regulated pursuant to article six-a of this chapter, or a coalbed methane well; and collect a permit fee of $650 for each permit application filed for a deep well: Provided, That no permit application fee is required when an application is submitted solely for the plugging or replugging of a well, or to modify an existing application for which the operator previously has submitted a permit fee under this section. All application fees required hereunder are in lieu of and not in addition to any fees imposed under article eleven of this chapter relating to discharges of stormwater but are in addition to any other fees required by the provisions of this article: Provided, however, That upon a final determination by the United States Environmental Protection Agency regarding the scope of the exemption under section 402(l)(2) of the federal Clean Water Act (33 U.S.C. 1342(l)(2)), which determination requires a "national pollutant discharge elimination system" permit for stormwater discharges from the oil and gas operations described therein, any permit fees for stormwater permits required under article eleven of this chapter for such operations may not exceed $100.

            (11) Perform all other duties which are expressly imposed upon the secretary by the provisions of this chapter;

            (12) Perform all duties as the permit issuing authority for the state in all matters pertaining to the exploration, development, production, storage and recovery of this state's oil and gas;

            (13) Adopt rules with respect to the issuance, denial, retention, suspension or revocation of permits, authorizations and requirements of this chapter, which rules shall assure that the rules, permits and authorizations issued by the secretary are adequate to satisfy the purposes of this article and articles six-a, seven, eight, nine, ten and twenty-one of this chapter particularly with respect to the consolidation of the various state and federal programs which place permitting requirements on the exploration, development, production, storage and recovery of this state's oil and gas; and

            (14) Assess an administrative penalty or suspend a permit issued under this section if, upon the filing of a complaint with the Office of Oil and Gas, a lessee has failed to pay the royalties due the lessor, plus accrued interest, in a timely manor in accordance with section nine-b, article four, chapter thirty-six of this chapter; and

            (14) (15) Perform such acts as may be necessary or appropriate to secure to this state the benefits of federal legislation establishing programs relating to the exploration, development, production, storage and recovery of this state's oil and gas, which programs are assumable by the state.

            (d) The secretary shall have authority to visit and inspect any well or well site and any other oil or gas facility in this state and may call for the assistance of any oil and gas inspector or inspectors or supervising inspector whenever such assistance is necessary in the inspection of any such well or well site or any other oil or gas facility. Similarly, all oil and gas inspectors and supervising inspectors shall have authority to visit and inspect any well or well site and any other oil or gas facility in this state. Such inspectors shall make all necessary inspections of oil and gas operations required by this article and articles six-a, eight, nine, ten and twenty-one of this chapter; administer and enforce all oil and gas laws and rules; and perform other duties and services as may be prescribed by the secretary. The inspectors shall note and describe all violations of this article and articles six-a, eight, nine, ten or twenty-one of this chapter and promptly report those violations to the secretary in writing, furnishing at the same time a copy of the report to the operator concerned. Any well operator, coal operator operating coal seams beneath the tract of land, or the coal seam owner or lessee, if any, if said owner or lessee is not yet operating said coal seams beneath said tract of land may request the secretary to have an immediate inspection made. The operator or owner of every well or well site or any other oil or gas facility shall cooperate with the secretary, all oil and gas inspectors and the supervising inspector in making inspections or obtaining information.

            (e) Subject to the provisions of article one, chapter twenty-nine-b of this code, all records of the office shall be open to the public.

CHAPTER 36. ESTATES AND PROPERTY.

ARTICLE 4. COVENANTS.

§36-4-9b. Nonpayment of royalties; interest; complaint; permit suspension.

            (a) Holders of oil and gas leases shall pay all oil and gas royalties to their respective lessors within one hundred twenty days of production. If the lessee fails to make its payments within that time period, interest shall accrue on those unpaid amounts when any amount owed is $100 or more. The interest rate shall be the current prime rate plus two percent, compounded quarterly.

            (b) Pursuant to section two, article six, chapter twenty-two of this code, if a lessee fails to pay the amount due, plus accrued interest, in a timely manor the lessor may file a complaint with the Office of Oil and Gas of the Department of Environmental Protection which may assess an administrative penalty and if a lessee continues to refuse to pay the amount due the Secretary of the Department of Environmental Protection may suspend the producer's permit.

 


            NOTE: The purpose of this bill is to require oil and gas lessees to make royalty payments within one hundred twenty days of production. The bill provides for interest. The bill provides for a complaint to be filed. The bill grants the Secretary of the Department of Environmental Protection with the authority to suspend an oil and gas permit if royalty payments are not timely made.


            Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.


            §36-4-9b is new; therefore, it has been completely underscored.

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