March 23, 2001
HOUSE BILL No. 2042
DIGEST OF HB 2042
(Updated March 21, 2001 11:25 AM - DI 51)
Citations Affected: IC 14-37.
Synopsis: Abandoned oil and gas wells. Authorizes the establishment
of a program that would permit a person who voluntarily remediates
certain gas and oil wells to recover certain costs from the oil and gas
environmental fund. Expands the sources of money for the fund.
Authorizes the natural resources commission to dispose of oil and gas
well equipment and any crude oil located at an abandoned well and to
use any proceeds to offset costs incurred by the commission in
plugging and abandoning the well. Terminates certain bonds and
requires the purchase of replacement bonds.
Effective: July 1, 2001.
(SENATE SPONSOR _ GARD)
January 17, 2001, read first time and referred to Committee on Environmental Affairs.
February 8, 2001, amended, reported _ Do Pass.
February 19, 2001, read second time, ordered engrossed.
February 20, 2001, engrossed. Read third time, passed. Yeas 94, nays 0.
February 27, 2001, read first time and referred to Committee on Judiciary.
March 22, 2001, amended, reported favorably _ Do Pass.
March 23, 2001
First Regular Session 112th General Assembly (2001)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
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between statutes enacted by the 2000 General Assembly.
HOUSE BILL No. 2042
A BILL FOR AN ACT to amend the Indiana Code concerning
natural and cultural resources.
Be it enacted by the General Assembly of the State of Indiana:
SOURCE: IC 14-37-6-3; (01)EH2042.1.1. -->
SECTION 1. IC 14-37-6-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 3. Each blanket bond
for wells created, modified, or acquired during the duration of a bond
that was accepted by the commission before March 11, 1971, must be
replaced by a new blanket bond in the amount of thirty thousand
dollars ($30,000) before January 2, 2002. The new replacement
bond remains in effect until:
(A) owner or operator plugs and abandons each well covered
under the blanket bond in accordance with:
(i) this article; and
(ii) rules adopted under this article; and
(B) bond is released by the department; or
(2) a substitute bond is accepted by the department for each well
secured by the blanket bond.
SOURCE: IC 14-37-8-15; (01)EH2042.1.2. -->
SECTION 2. IC 14-37-8-15 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 15. A person:
(1) who has no obligation to plug, abandon, replug, or repair a
(2) who does so under section 12, 13, 14, or 16 of this chapter;
may recover in a civil action against any responsible person the
reasonable expenses of the remedial action or may apply to the oil
and gas environmental fund under IC 14-37-10 to recover the
reasonable expenses of the remedial action.
SOURCE: IC 14-37-10-3; (01)EH2042.1.3. -->
SECTION 3. IC 14-37-10-3 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 3. The following shall
be deposited in the fund:
(1) Permit fees received under IC 14-37-4-6.
(2) Annual fees for Class II wells received under IC 14-37-5.
(3) Accrued interest and other investment earnings of the fund.
(4) Civil penalties collected under IC 14-37-13-3.
(5) Gifts, grants, donations, or appropriations from any
SOURCE: IC 14-37-10-5; (01)EH2042.1.4. -->
SECTION 4. IC 14-37-10-5 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 5. (a) Money paid into
the fund shall be appropriated for the following purposes:
(1) To supplement the cost required to abandon a well that has
had a permit revoked under IC 14-37-13-1.
(2) To cover the costs of remedial plugging and repairing of wells
under IC 14-37-8, including the expenses of remedial action
under IC 14-37-8-15.
(3) To cover the cost to:
(A) mitigate environmental damage; or
(B) protect public safety against harm;
caused by a well regulated under this article.
(b) The director may make expenditures from the fund for
emergency purposes under section 6 of this chapter without the prior
approval of the budget agency or the governor. An expenditure under
this subsection may not exceed fifty thousand dollars ($50,000).
(c) The director may establish a program to reimburse an
applicant for the reasonable expenses of remedial action incurred
under IC 14-37-8-15. The director may make expenditures from
the fund for this purpose and may establish any necessary
guidelines and procedures to administer the program.
SOURCE: IC 14-37-13-2; (01)EH2042.1.5. -->
SECTION 5. IC 14-37-13-2 IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2001]: Sec. 2. (a) If a permit is
revoked under this chapter, the commission may do either of the
(1) Order the owner or operator to plug and abandon the well.
(2) Plug and abandon the well.
(b) The revocation of a permit under this chapter does not relieve
the owner or operator of the well to which the permit relates of the
responsibility imposed by IC 14-37-8 for the plugging and
abandonment of the well.
(c) If the commission elects to plug and abandon a well under
subsection (a)(2), the commission may apply the bond or other security
(1) IC 14-37-6; or
(2) IC 13-8-8 (before its repeal);
to the costs of plugging and abandoning the well.
(d) If the commission elects to plug and abandon a well under
subsection (a)(2), the owner or operator of the well remains liable for
the costs of plugging and abandoning the well.
(e) The state has a lien on:
(1) the casing and all equipment located on or removed from the
(2) the leasehold of the land upon which the well is located; and
(3) any crude oil stored on the well site or recovered at the
time the well is plugged and abandoned;
to secure the cost of plugging and abandoning. Except as provided in
the lien may be foreclosed on order of the commission
in the name of the state of Indiana by the attorney general in a circuit
or superior court having jurisdiction in any county where the land is
(f) If the commission elects to plug and abandon a well under
subsection (a)(2), the commission may also enter an order
authorizing its agents, employees, or contractors to dispose of:
(1) casing and all equipment located on or removed from the
well site; and
(2) any crude oil stored on the well site or recovered;
at the time the well is plugged and abandoned. An inventory of the
casing and all equipment and any crude oil shall be made, and the
salvage or other reasonable market value of the casing and all
equipment and any crude oil shall be applied as a credit to offset
the actual cost incurred by the commission to plug and abandon