SECTION 3.1. Organization Report; Retention of Records; Notice Requirements

(a) Filing requirements.

(1) Except as provided under subsection (e) of this section, no organization, including any person, firm, partnership, joint stock association, corporation, or other organization, domestic or foreign, operating wholly or partially within this state, acting as principal or agent for another, for the purpose of performing operations within the jurisdiction of the Commission shall perform such operations without having on file with the Commission an approved organization report and financial security as required by Texas Natural Resources Code §§91.103 - 91.1091. Operations within the jurisdiction of the Commission include, but are not limited to, the following:

(A) drilling, operating, or producing any oil, gas, geothermal resource, brine mining injection, fluid injection, or oil and gas waste disposal well;

(B) transporting, reclaiming, treating, processing, or refining crude oil, gas and products, or geothermal resources and associated minerals;

(C) discharging, storing, handling, transporting, reclaiming, or disposing of oil and gas waste, including hauling salt water for hire by any method other than pipeline;

(D) operating gasoline plants, natural gas or natural gas liquids processing plants, pressure maintenance or repressurizing plants, or recycling plants;

(E) recovering skim oil from a salt water disposal site;

(F) nominating crude oil;

(G) operating a directional survey company;

(H) cleaning a reserve pit;

(I) operating a pipeline;

(J) operating as a cementer approved for plugging wells, operating as a cementer cementing casing strings or liners, or operating a well service company performing well stimulation activities, including hydraulic fracturing; or

(K) operating an underground hydrocarbon or natural gas storage facility.

(2) The Commission shall notify organizations that perform operations not included in paragraph (1)(A) - (K) of this subsection of any additional activities subject to the jurisdiction of the Commission which require the filing of the organization report. Such notification shall make the provisions of this section applicable to such activities.

(3) Each organization performing activities subject to the jurisdiction of the Commission shall maintain a current organization report with the Commission until all duties, obligations, and liabilities incurred pursuant to Commission rules, the Natural Resources Code, Titles 3 (Subtitles A, B, C, and Chapter 111 of Subtitle D) and 5, Texas Health and Safety Code, Chapter 401; Texas Utilities Code, §121.201, and the Water Code, Chapters 26, 27, and 29, are fulfilled.

(4) The organization report shall contain the following information:

(A) the name, street address, mailing address, telephone number, and emergency after-hours telephone number of the organization;

(B) the plan of the business organization;

(C) for each officer, director, general partner, owner of more than 25% ownership interest, or trustee (hereinafter controlling entity) of the organization:

(i) that entity's or individual's full legal name, the name(s) under which such entity or individual conducts business in the State of Texas, and all assumed names;

(ii) the following:

(I) if the entity is an individual, his or her social security number. Any individual who does not have a valid social security number shall submit, at that person's option, either his or her valid driver's license or Texas State Identification number;

(II) if the entity is not an individual, the name and, at that person's option, either the valid driver's license, social security, or Texas Identification number of each officer, director, or other person, who, under Texas Natural Resources Code, §91.114, holds a position of ownership or control of the organization, or an active P-5 number for that entity. All controlling entities connected to an organization which are not individuals shall provide the identification of the individuals in ownership or control of those entities.

(iii) a street address different than that of the organization; and

(iv) if different from the mailing address of the organization, a mailing address;

(D) if a foreign or nonresident organization, the name and street address of a resident agent.

(E) the name of any non-employee agent that the organization authorizes to act for the organization in signing Oil and Gas Division certificates of compliance which initially designate the operator or change the designation of the operator. Organizations may designate non-employee agents to execute subsequent organization reports. That designation shall be authorized by the organization and not by a non-employee agent.

(5) Any organization may designate a resident agent with a street address different than that of the organization in place of submitting the street addresses of the three (if applicable) primary controlling entities of the organization. Any foreign or nonresident organization identified in paragraph (1) of this subsection shall designate and maintain a resident agent upon whom may be served any process, notice, or demand required or permitted by law to be served upon such entity by or on behalf of the Commission. Failure of such organization to designate and maintain a resident agent shall render the organization report invalid. (Reference Order Number 20-60,617, effective January 1, 1971.)

(6) Failure by any organization identified in paragraph (1) of this subsection to answer any subpoena, commission to take deposition, or directive to appear at a hearing served upon such organization by or on behalf of the Commission shall render the organization report invalid.

(7) An organization shall refile an organization report annually according to the schedule assigned by the Commission. Prior to the filing date, the Commission shall mail notification and information to each organization for update of the organization report file. An organization shall file an amended organization report within 15 days after a change in any information required to be reported in the organization report. Only address changes may be made by letter.

(8) The Commission shall meet any requirement under statute or Commission rule for an order to be sent or notice to be given by the Commission to an organization by mailing the item to the organization's mailing address shown on the most recently filed organization report or the most recently filed letter notification of change of address. Notices sent by regular first-class mail shall be presumed to have been received if, upon arrival of the deadline for any response to the notice, the wrapper containing the notice has not been returned to the Commission. Any Commission action or proceeding for which notice is required shall go forward on the basis of the notice provided under this subsection, whether or not actual notice has been received. Service of notices and orders sent by certified mail is effective upon:

(A) acceptance of the item by any person at the address;

(B) initial failure to claim or refusal to accept the item by any person at the address prior to its eventual return to the Commission by the United States Postal Service; or

(C) return of the item to the Commission by the United States Postal Service bearing a notation such as "addressee unknown," "no forwarding address," "forwarding order expired," or any similar notation indicating that the organization's mailing address shown on the most recently filed organization report or address change notification letter is incorrect.

(9) An organization may also designate to the Commission in writing a specified address for all Commission correspondence relating to a particular district. If designated by an operator, this specified address shall be used in lieu of the organization address for any notices, other than hearing notices, pertaining to that district.

(10) The Commission may return, unapproved, to the organization address an organization report which is submitted to the Commission not fully completed according to the report's written instructions and not timely corrected. In the event that the Commission returns an organization report, all submitted financial assurances shall remain non-refundable. If an organization report approved by the Commission is found to contain information that was materially false at the time it was submitted for approval, the Commission may suspend or revoke the organization report after notice and opportunity for hearing.

(b) Record requirements. All entities who perform operations which are within the jurisdiction of the Commission shall keep books showing accurate records of the drilling, redrilling, or deepening of wells, the volumes of crude oil on hand at the end of each month, the volumes of oil, gas, and geothermal resources produced and disposed of, together with records of such information on leases or property sold or transferred, and other information as required by Commission rules and regulations in connection with the performance of such operations, which books shall be kept open for the inspection of the Commission or its representatives, and shall report such information as required by the Commission to do so.

(c) Time frame. All organizations shall keep copies of records, forms, and documents which are required to be filed with the Commission, along with the supporting documents referred to in subsection (b) of this section, for a period of three years, or longer if required by another Commission rule, and any such copies may be disposed of at the discretion of such entities after the original records, forms, and documents have been on file with the Commission for the required period, except that particular documents shall be retained beyond the required period and until the resolution of pending Commission regulatory enforcement proceedings if the documents contain information material to the determination of any issues therein. All records, forms, and documents required to be filed with the Commission shall be filed in the same name, exactly as it appears on the organization report.

(d) Organization reports for operators of inactive wells.

(1) The Commission or its delegate may approve the organization report for an operator of an inactive well if the Commission or its delegate has approved an extension of the deadline for plugging the inactive well.

(2) The Commission or its delegate may conditionally approve an organization report if:

(A) the operator assumed responsibility for a well that was inactive at the time of the approval of the operator designation form for the well; and

(B) the Commission or its delegate approved the operator designation form for the inactive well less than six months prior to the date the operator is required to renew its organization report.

(3) The Commission or its delegate may revoke conditional approval of an organization report granted under paragraph (2) of this subsection after notice of opportunity for hearing if the operator has failed to meet any of the following requirements within six months after approval of the operator designation form:

(A) restoration of the well to active status as defined by Commission rule;

(B) plugging of the well in compliance with a Commission rule or order; or

(C) obtaining the approval of the Commission or its delegate of an extension of the deadline for plugging an inactive well.

(e) Issuance of permits to organizations without active organization reports.

(1) Notwithstanding contrary provisions of this section, the Commission or its delegate may issue a permit to an organization or individual that does not have an active organization report or does not ordinarily conduct oil and gas activities when the issuance of such a permit is determined to be necessary to implement a compliance schedule, or to remedy circumstances or a violation of a Commission rule, order, license, permit, or certificate of compliance relating to safety or the prevention of pollution. For permits issued under this subsection, the Commission or its delegate may impose special conditions or terms not found in like permits issued pursuant to other Commission rules. Any organization or individual who requests such a permit shall file an organization report and any other required forms for record-keeping purposes only. The report or form shall contain all information ordinarily required to be submitted to the Commission or its delegate.

(2) This section shall not limit the Commission's authority to plug or to replug wells or to clean up pollution or unpermitted discharges of oil and gas waste.

(f) Each organization required to file an organization report under subsection (a) of this section or an affiliate of such an organization that performs operations within the jurisdiction of the Commission that files for federal bankruptcy protection shall provide written notice to the Commission of that action not later than the 30th day after the date the organization or the affiliate files for bankruptcy protection by submitting the notice to the Enforcement Section of the Office of General Counsel. All bankruptcy-related notices sent to the Commission shall be submitted in writing to that section. For the purpose of this section, affiliate means an organization that is effectively controlled by another.

(g) Neither the Commission nor its delegate may approve an organization report unless the organization has complied with the state registration requirements of the Secretary of State. A tax dispute with the Comptroller of Public Accounts shall not be a basis for disapproving an organization report.

(h) Pursuant to Texas Natural Resources Code, §91.706(b), if an operator uses or reports use of a well for production, injection, or disposal for which the operator's certificate of compliance has been canceled, the Commission or its delegate may refuse to renew the operator's organization report required by Texas Natural Resources Code, §91.142, until the operator pays the fee required by §3.78(b)(9) of this title (relating to Fees and Financial Security Requirements) and the Commission or its delegate issues the certificate of compliance required for that well.

Source Note: The provisions of this §3.1 adopted to be effective January 1, 1976; amended to be effective January 1, 1981, 5 TexReg 4990; amended to be effective February 22, 1986, 11 TexReg 701; amended to be effective December 7, 1987, 12 TexReg 4411; amended to be effective July 22, 1991, 16 TexReg 3767; amended to be effective July 1, 1992, 17 TexReg 4173; amended to be effective May 22, 2000, 25 TexReg 4512; amended to be effective January 11, 2004, 29 TexReg 359; amended to be effective November 26, 2007, 32 TexReg 8452; amended to be effective September 13, 2010, 35 TexReg 8332; amended to be effective August 27, 2012, 37 TexReg 6538