Regular Session 2021-2022 House Bill 2528 P.N. 3606

SENATE AMENDED

PRIOR PRINTER'S NOS. 3005, 3254, 3594

PRINTER'S NO. 3606

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2528

Session of

2022

INTRODUCED BY STRUZZI, JAMES, PICKETT, CAUSER, SMITH, BERNSTINE,

SAYLOR, OBERLANDER, NEILSON, ROWE, ARMANINI, COX AND

ZIMMERMAN, APRIL 20, 2022

AS AMENDED ON THIRD CONSIDERATION, IN SENATE, OCTOBER 26, 2022

AN ACT

Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated

Statutes, in development, providing for well plugging

contracts.

AMENDING TITLE 58 (OIL AND GAS) OF THE PENNSYLVANIA CONSOLIDATED

STATUTES, IN OIL AND GAS WELL PLUGGING OVERSIGHT, FURTHER

PROVIDING FOR ALLOCATION OF FUNDING, FOR ESTABLISHMENT OF OIL

AND GAS WELL PLUGGING GRANT PROGRAM, FOR GRANTS, FOR ELIGIBLE

WELLS, FOR QUALIFIED WELL PLUGGER AND FOR APPLICATIONS AND

REVIEW PROCESS; IN DEVELOPMENT, FURTHER PROVIDING FOR WELL

PLUGGING FUNDS AND PROVIDING FOR WELL PLUGGING CONTRACTS; AND

MAKING EDITORIAL CHANGES.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Title 58 of the Pennsylvania Consolidated

Statutes is amended by adding a section to read:

§ 3271.1. Well plugging contracts.

(a) General rule.--Notwithstanding any other provision of

law:

(1) The department shall allow any Pennsylvania company

to bid for a contract that the department plans to award for

plugging oil or gas wells, regardless of the size of the

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company.

(2) The department shall award a contract for plugging

oil or gas wells to an eligible Pennsylvania company before

considering the bid of a company which is not a Pennsylvania

company.

(3) If no eligible Pennsylvania company bids for the

contract, the department may consider bids from a company

that is not a Pennsylvania company.

(b) Definition.--As used in this section, the term

"Pennsylvania company" means a business entity which:

(1) has its main offices or headquarters located within

this Commonwealth and conducts at least 50% of its business

activities within this Commonwealth; or

(2) will bid for State contracts for plugging oil or gas

wells and subcontract the work to subcontractors selected

through a competitive bidding process that gives priority to

subcontractors that satisfy the criteria specified under

paragraph (1) when possible.

Section 2. This act shall take effect in 60 days.

SECTION 1. SECTIONS 2811, SUBCHAPTER C HEADING OF CHAPTER 28

AND SECTIONS 2821, 2822, 2823(C), 2824, 2825 AND 3271(C)(1) OF

TITLE 58 OF THE PENNSYLVANIA CONSOLIDATED STATUTES, AMENDED OR

ADDED JULY 19, 2022 (P.L.1622, NO.96), ARE AMENDED TO READ:

§ 2811. [ALLOCATION OF FUNDING.] REQUIREMENTS FOR USE OF

FEDERAL FUNDING.

(A) REQUIREMENTS.--FEDERAL MONEY [RECEIVED] FROM THE

ORPHANED WELL SITE PLUGGING, REMEDIATION AND RESTORATION PROGRAM

UNDER SECTION 40601 OF THE INFRASTRUCTURE INVESTMENT AND JOBS

ACT (PUBLIC LAW 117-58, 135 STAT. 429) THAT IS APPROPRIATED BY

THE GENERAL ASSEMBLY SHALL BE SUBJECT TO THE FOLLOWING:

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[(1) THE AMOUNT OF 80% RECEIVED SHALL BE DEPOSITED INTO

THE ORPHAN WELL PLUGGING FUND.]

(2) [THE AMOUNT OF 20% IS HEREBY APPROPRIATED ON A

CONTINUING BASIS TO THE DEPARTMENT] NO LESS THAN 20% OF THE

AMOUNT SHALL BE MADE AVAILABLE FOR GRANTS UNDER SUBCHAPTER C

(RELATING TO ORPHAN OIL AND GAS WELL PLUGGING GRANT PROGRAM)

[.] FOR A PERIOD OF NO LESS THAN 12 MONTHS AFTER PUBLICATION

OF THE NOTICE UNDER SECTION 2823(C) (RELATING TO ELIGIBLE

WELLS).

(3) IF ANY AMOUNT MADE AVAILABLE UNDER PARAGRAPH (2)

REMAINS UNCOMMITTED SIX MONTHS PRIOR TO ANY DATE OF RECAPTURE

BY THE FEDERAL GOVERNMENT, THE DEPARTMENT MAY USE THE AMOUNT

IN ANY OTHER MANNER IN ACCORDANCE WITH FEDERAL LAW AND

GUIDANCE.

(B) RECORDS.--THE DEPARTMENT SHALL KEEP RECORDS SUFFICIENT

TO DOCUMENT COMPLIANCE WITH THE REQUIREMENTS IMPOSED UNDER THE

FEDERAL ORPHANED WELL SITE PLUGGING, REMEDIATION AND RESTORATION

PROGRAM AND THIS TITLE. THE DEPARTMENT MAY NOT IMPOSE

REQUIREMENTS ON THE RECIPIENTS OF THE FEDERAL MONEY UNDER

SUBSECTION (A)(2) THAT ARE STRICTER THAN THE REQUIREMENTS

IMPOSED UNDER STATE LAW OR APPLICABLE FEDERAL REQUIREMENTS WHEN

AWARDING GRANTS UNDER SUBCHAPTER C.

SUBCHAPTER C

ORPHAN OIL AND GAS WELL PLUGGING GRANT PROGRAM

§ 2821. ESTABLISHMENT OF PROGRAM.

THE ORPHAN OIL AND GAS WELL PLUGGING GRANT PROGRAM IS

ESTABLISHED AS A PROGRAM WITHIN THE DEPARTMENT.

§ 2822. GRANTS.

(A) AVAILABILITY.--A QUALIFIED WELL PLUGGER THAT PLUGS AN

ELIGIBLE WELL SHALL BE ELIGIBLE FOR A GRANT AS PROVIDED UNDER

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THIS SUBCHAPTER.

(B) AMOUNT.--SUBJECT TO SUBSECTION (C), A GRANT UNDER THIS

SUBCHAPTER SHALL BE:

(1) IN THE AMOUNT OF [$10,000] $40,000 FOR EVERY

ELIGIBLE WELL PLUGGED THAT IS AN ORPHAN WELL OF A DEPTH OF

3,000 FEET OR LESS OR THE ACTUAL COST OF THE QUALIFIED WELL

PLUGGER TO PLUG THE WELL, WHICHEVER IS LESS.

(2) IN THE AMOUNT OF [$20,000] $70,000 FOR EVERY

ELIGIBLE WELL PLUGGED THAT IS AN ORPHAN WELL OF A DEPTH

GREATER THAN 3,000 FEET OR THE ACTUAL COST OF THE QUALIFIED

WELL PLUGGER TO PLUG THE WELL, WHICHEVER IS LESS.

(1) IF THE DEPARTMENT FINDS THAT IT IS NOT RECEIVING AN

ADEQUATE NUMBER OF APPLICATIONS FOR GRANTS UNDER THIS

SECTION, THE DEPARTMENT MAY INCREASE THE AMOUNTS UNDER

SUBSECTION (B) AT ITS DISCRETION BY POSTING THE INCREASED

AMOUNTS ON ITS PUBLICLY ACCESSIBLE INTERNET WEBSITE.

(2) THE DEPARTMENT MAY NOT DECREASE THE AMOUNTS

SPECIFIED IN THIS SUBSECTION.

§ 2823. ELIGIBLE WELLS.

* * *

LATER THAN 60 DAYS AFTER THE [EFFECTIVE DATE OF THIS

SUBSECTION,] DATE OF THE PERIODIC AWARDING OF FUNDS PURSUANT TO

SECTION 349 OF THE ENERGY POLICY ACT OF 2005 (PUBLIC LAW 109-59,

42 U.S.C. § 15907) OR THE EFFECTIVE DATE OF AN APPROPRIATION OF

MONEY TO THE DEPARTMENT FOR THE PURPOSES OF THIS SUBCHAPTER,

WHICHEVER IS EARLIER, THE DEPARTMENT SHALL PUBLISH ON ITS

PUBLICLY ACCESSIBLE INTERNET WEBSITE ALL OF THE FOLLOWING:

(1) A LIST OF EACH ELIGIBLE WELL AND ANY RELEVANT

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IDENTIFYING INFORMATION.

(2) ANY AVAILABLE TECHNICAL DATA THAT WOULD BE NECESSARY

FOR A QUALIFIED WELL PLUGGER TO PLUG EACH ELIGIBLE WELL ON

THE LIST UNDER PARAGRAPH (1).

* * *

§ 2824. QUALIFIED WELL PLUGGER.

(A) CRITERIA.--A PERSON SHALL QUALIFY AS A QUALIFIED WELL

PLUGGER IF THE PERSON [MEETS ANY OF THE FOLLOWING CRITERIA:]

DEMONSTRATES ACCESS TO THE EQUIPMENT, MATERIALS, RESOURCES AND

SERVICES TO PLUG WELLS IN ACCORDANCE WITH SECTION 3220 (RELATING

TO PLUGGING REQUIREMENTS).

[(1) THE PERSON HAS DRILLED 10 OR MORE WELLS IN THIS

COMMONWEALTH IN ACCORDANCE WITH SECTION 3211 (RELATING TO

WELL PERMITS).

(2) THE PERSON HAS PLUGGED 10 OR MORE WELLS IN THIS

COMMONWEALTH IN ACCORDANCE WITH SECTION 3220 (RELATING TO

PLUGGING REQUIREMENTS).

(3) THE PERSON OTHERWISE DEMONSTRATES ACCESS TO THE

EQUIPMENT, MATERIALS, RESOURCES AND SERVICES TO PLUG WELLS IN

ACCORDANCE WITH SECTION 3220.]

(B) LEGAL RESPONSIBILITY.--A QUALIFIED WELL PLUGGER SHALL

NOT BE THE PERSON WHO IS LEGALLY RESPONSIBLE FOR PLUGGING THE

ORPHAN WELL.

(1) IN ORDER TO RECEIVE A GRANT UNDER THIS SUBCHAPTER,

THE APPLICANT, OR A PARENT OR SUBSIDIARY BUSINESS ENTITY OF

THE APPLICANT, MAY NOT BE IN CONTINUING VIOLATION OF THIS

CHAPTER, ANY OTHER STATUTE ADMINISTERED BY THE DEPARTMENT, A

REGULATION PROMULGATED UNDER THIS CHAPTER OR A STATUTE

ADMINISTERED BY THE DEPARTMENT OR A PLAN APPROVAL, PERMIT OR

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ORDER OF THE DEPARTMENT, UNLESS THE VIOLATION IS BEING

CORRECTED TO THE SATISFACTION OF THE DEPARTMENT.

(2) THIS SUBSECTION SHALL NOT APPLY TO AN APPLICANT WHO

HAS COMMITTED A VIOLATION UNTIL THE DEPARTMENT HAS TAKEN A

FINAL ACTION ON THE VIOLATION AND:

(I) THE APPLICANT HAS NOT APPEALED THE FINAL ACTION

IN ACCORDANCE WITH THE ACT OF JULY 13, 1988 (P.L.530,

NO.94), KNOWN AS THE ENVIRONMENTAL HEARING BOARD ACT; OR

(II) IF AN APPEAL HAS BEEN FILED, NO SUPERSEDEAS HAS

BEEN ISSUED.

§ 2825. APPLICATIONS AND REVIEW PROCESS.

(A) APPLICATION FORM.--NO LATER THAN THE DATE THAT THE

NOTICE OF AVAILABILITY UNDER SECTION 2823(C) (RELATING TO

ELIGIBLE WELLS) IS PUBLISHED, THE DEPARTMENT SHALL MAKE AN

APPLICATION FORM FOR A GRANT UNDER THIS SUBCHAPTER AVAILABLE ON

THE DEPARTMENT'S PUBLICLY ACCESSIBLE INTERNET WEBSITE.

(B) CONTENT OF APPLICATIONS.--AN APPLICATION SUBMITTED BY A

QUALIFIED WELL PLUGGER SHALL CONTAIN ALL OF THE FOLLOWING:

(1) THE NAME OF THE QUALIFIED WELL PLUGGER.

(2) A LIST OF ELIGIBLE WELLS LISTED UNDER SECTION

2823(C) THAT THE QUALIFIED WELL PLUGGER INTENDS TO PLUG [IN

ACCORDANCE WITH THE REQUIREMENTS OF SECTION 3220 (RELATING TO

PLUGGING REQUIREMENTS)] IN THE NEXT 12 MONTHS IF APPROVED FOR

A GRANT UNDER THIS SUBCHAPTER.

(3) A CERTIFICATION THAT THE QUALIFIED WELL PLUGGER HAS

LEGAL AUTHORITY TO ACCESS AND PERFORM THE ACTIVITIES NEEDED

TO PLUG EACH WELL LISTED UNDER PARAGRAPH (2).

(4) AN ATTESTATION THAT THE QUALIFIED WELL PLUGGER WILL

PROVIDE THE DOCUMENTATION NECESSARY FOR THE DEPARTMENT TO

COMPLY WITH THE PROVISIONS OF SECTION 2811(B) (RELATING TO

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ALLOCATION OF FUNDING).

(5) AN ATTESTATION THAT EACH WELL PLUGGED BY THE

QUALIFIED WELL PLUGGER WILL BE PLUGGED IN ACCORDANCE WITH

SECTION 3220 (RELATING TO PLUGGING REQUIREMENTS).

(1) THE DEPARTMENT SHALL BEGIN ACCEPTING APPLICATIONS

UNDER SUBSECTION (A) NO LATER THAN THE DATE THAT THE

APPLICATION IS MADE AVAILABLE UNDER SUBSECTION (A).

(2) [AS ADDITIONAL AMOUNTS ARE APPROPRIATED TO THE

DEPARTMENT FOR THE GRANT PROGRAM UNDER THIS SUBCHAPTER AFTER

THE EFFECTIVE DATE OF THIS SUBSECTION, THE DEPARTMENT SHALL

BEGIN] THE DEPARTMENT SHALL ACCEPT APPLICATIONS UNTIL THE

AMOUNT AVAILABLE FOR GRANTS UNDER SECTION 2811(A) IS

COMMITTED TO PROJECTS INITIALLY APPROVED UNDER SUBSECTION

(E). AS ADDITIONAL AMOUNTS ARE MADE AVAILABLE FOR THE GRANT

PROGRAM UNDER THIS SUBARTICLE, THE DEPARTMENT SHALL

RECOMMENCE ACCEPTING APPLICATIONS UNDER SUBSECTION (A) NO

LATER THAN SEVEN DAYS AFTER THE ADDITIONAL MONEY IS

[APPROPRIATED] MADE AVAILABLE.

(D) REVIEW.--THE DEPARTMENT SHALL REVIEW AND APPROVE

APPLICATIONS RECEIVED UNDER SUBSECTION (C) ON A ROLLING BASIS

UNTIL THE MONEY AVAILABLE HAS BEEN FULLY COMMITTED TO APPROVED

PROJECTS.

(E) INITIAL APPROVAL.--

(1) IF AN APPLICATION SUBMITTED UNDER SUBSECTIONS (B)

AND (C) MEETS THE REQUIREMENTS OF THIS SUBCHAPTER AND IF THE

AMOUNT OF GRANT MONEY THAT THE QUALIFIED WELL PLUGGER WOULD

BE ELIGIBLE TO RECEIVE REMAINS AVAILABLE, THE DEPARTMENT

SHALL APPROVE THE APPLICATION AND SHALL NOTIFY THE APPLICANT

WHICH ORPHAN WELLS ON THE LIST UNDER SUBSECTION (B)(2) FOR

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WHICH THE QUALIFIED WELL PLUGGER HAS BEEN APPROVED TO RECEIVE

A GRANT.

(2) AN APPROVAL UNDER THIS SUBSECTION SHALL BE MADE

WITHIN [SEVEN] 15 DAYS OF THE RECEIPT OF THE APPLICATION. THE

DEPARTMENT SHALL PROVIDE NOTICE OF THE APPROVAL TO THE

QUALIFIED PLUGGER WITHIN THREE DAYS OF THE DATE OF APPROVAL.

(F) AWARDING OF GRANT.--AN APPROVED WELL PLUGGER SHALL BE

AWARDED A GRANT IF ALL OF THE FOLLOWING REQUIREMENTS ARE MET:

(1) THE QUALIFIED WELL PLUGGER WAS PREVIOUSLY APPROVED

UNDER SUBSECTION (E).

(2) THE QUALIFIED WELL PLUGGER PLUGGED AN ORPHAN WELL

FOR WHICH THE QUALIFIED WELL PLUGGER WAS APPROVED UNDER

SUBSECTION (E).

(3) THE QUALIFIED WELL PLUGGER HAS SUBMITTED A COMPLETE

PLUGGING CERTIFICATE, PREPARED AND SIGNED, ON A FORM

FURNISHED BY THE DEPARTMENT, BY TWO EXPERIENCED AND QUALIFIED

INDIVIDUALS WHO PARTICIPATED IN THE WORK AND SPECIFIED THE

TIME AND MANNER IN WHICH THE WELL WAS PLUGGED.

(4) THE QUALIFIED WELL PLUGGER HAS SUBMITTED ADEQUATE

DOCUMENTATION OF THE COST FOR THE PLUGGING OF AN ORPHAN WELL.

(5) THE QUALIFIED WELL PLUGGER HAS SUBMITTED ANY OTHER

INFORMATION OR DOCUMENT NECESSARY FOR COMPLIANCE WITH THE

FEDERAL ORPHANED WELL SITE PLUGGING, REMEDIATION AND

RESTORATION PROGRAM.

(G) AMOUNT OF GRANT.--THE AMOUNT OF THE GRANT AWARDED UNDER

SUBSECTION (F) SHALL BE THE SUM OF THE AMOUNTS UNDER SECTION

2822 (RELATING TO GRANTS) FOR WHICH THE QUALIFIED WELL PLUGGER

IS APPROVED UNDER SUBSECTION (E). IF THE QUALIFIED WELL PLUGGER

ENCOUNTERS UNUSUAL TECHNICAL DIFFICULTIES DUE TO THE CONDITION

OF AN ORPHAN WELL, THE DEPARTMENT MAY[, UPON AWARDING THE GRANT,

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REIMBURSE THE QUALIFIED WELL PLUGGER WITH AN ADDITIONAL GRANT

AMOUNT.], IN ITS DISCRETION, AMEND THE GRANT AWARD TO COVER THE

ADDITIONAL COST, IF PROVIDED WITH ADEQUATE DOCUMENTATION OF

THOSE UNEXPECTED ADDITIONAL COSTS. THE ADDITIONAL GRANT AMOUNT

UNDER THIS SUBSECTION SHALL NOT EXCEED THE AMOUNT OF THE GRANT

FOR A SPECIFIC ORPHAN WELL. THE DEPARTMENT MAY NOT AWARD THE

ADDITIONAL GRANT AMOUNT UNDER THIS SUBSECTION TO A QUALIFIED

WELL OPERATOR WITHOUT RECEIVING AN ADEQUATE PROOF OF COST FROM

THE QUALIFIED WELL PLUGGER.

(H) CIVIL IMMUNITY.--A PERSON WHO VOLUNTARILY PROVIDES

EQUIPMENT, MATERIALS, RESOURCES OR SERVICES FOR PLUGGING AN

ORPHAN WELL IN ACCORDANCE WITH THIS SUBCHAPTER SHALL BE IMMUNE

FROM CIVIL LIABILITY OTHER THAN INJURY OR DAMAGE RESULTING FROM

GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. THE PERSON MAY RAISE THE

CIVIL IMMUNITY PROTECTIONS SPECIFIED IN THIS SUBSECTION IN A

LEGAL PROCEEDING BROUGHT TO ENFORCE THE ENVIRONMENTAL LAWS OF

THIS COMMONWEALTH OR OTHERWISE IMPOSE CIVIL LIABILITY.

§ 3271. WELL PLUGGING FUNDS.

* * *

(1) A RESTRICTED REVENUE ACCOUNT TO BE KNOWN AS THE

ORPHAN WELL PLUGGING FUND IS CREATED. A $100 SURCHARGE FOR

WELLS TO BE DRILLED FOR OIL PRODUCTION AND A $200 SURCHARGE

FOR WELLS TO BE DRILLED FOR GAS PRODUCTION ARE ADDED TO THE

PERMIT FEE ESTABLISHED BY THE DEPARTMENT UNDER SECTION 3211

FOR NEW WELLS. THE SURCHARGES [AND AMOUNTS DEPOSITED UNDER

SECTION 2811(A)(1) (RELATING TO ALLOCATION OF FUNDING)] SHALL

BE PLACED IN THE ORPHAN WELL PLUGGING FUND AND EXPENDED BY

THE DEPARTMENT TO PLUG ORPHAN WELLS. IF AN OPERATOR

REHABILITATES A WELL ABANDONED BY ANOTHER OPERATOR OR AN

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ORPHAN WELL, THE PERMIT FEE AND THE SURCHARGE FOR THE WELL

SHALL BE WAIVED.

* * *

SECTION 2. TITLE 58 IS AMENDED BY ADDING A SECTION TO READ:

§ 3271.1. WELL PLUGGING CONTRACTS.

(A) GENERAL RULE.--NOTWITHSTANDING ANY OTHER PROVISION OF

LAW:

(1) THE DEPARTMENT SHALL ALLOW ANY PENNSYLVANIA COMPANY

TO BID FOR A CONTRACT THAT THE DEPARTMENT PLANS TO AWARD FOR

PLUGGING OIL OR GAS WELLS, REGARDLESS OF THE SIZE OF THE

COMPANY. THIS PARAGRAPH SHALL NOT PROHIBIT THE DEPARTMENT

FROM ACCEPTING OR AWARDING BIDS FOR CONTRACTS FOR PLUGGING

OIL OR GAS WELLS FROM COMPANIES WHICH ARE NOT PENNSYLVANIA

COMPANIES IF NO OTHER LAW, REGULATION OR EXECUTIVE ORDER

WOULD PREVENT THE COMPANY WHICH IS NOT A PENNSYLVANIA COMPANY

FROM BIDDING.

(2) (RESERVED).

(B) DEFINITION.--AS USED IN THIS SECTION, THE TERM

"PENNSYLVANIA COMPANY" MEANS A BUSINESS ENTITY THAT:

(1) HAS ITS MAIN OFFICES OR HEADQUARTERS LOCATED WITHIN

THIS COMMONWEALTH AND CONDUCTS AT LEAST 50% OF ITS BUSINESS

ACTIVITIES WITHIN THIS COMMONWEALTH; OR

(2) WILL BID FOR STATE CONTRACTS FOR PLUGGING OIL OR GAS

WELLS AND SUBCONTRACT THE WORK TO SUBCONTRACTORS SELECTED

THROUGH A COMPETITIVE BIDDING PROCESS THAT GIVES PRIORITY TO

SUBCONTRACTORS THAT SATISFY THE CRITERIA SPECIFIED UNDER

PARAGRAPH (1) WHEN POSSIBLE.

SECTION 3. THIS ACT SHALL TAKE EFFECT IN 60 DAYS.

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