Revise the law governing oil and gas wells

sb219_05_EN

(136th General Assembly)

(Substitute
Senate Bill Number 219)

AN
ACT

To amend sections 127.14,
155.33, 155.34, 1509.01, 1509.02, 1509.03, 1509.06, 1509.07,
1509.071, 1509.13, 1509.22, 1509.221, 1509.224, 1509.23, 1509.31,
1509.36, 1509.37, 2305.041, 2305.06, 5577.02, and 5727.02 of the
Revised Code and to amend Section 343.30 of H.B. 96 of the 136th
General Assembly to make changes to the law governing oil and gas
wells.

Be
it enacted by the General Assembly of the State of Ohio:

Section
1.
That
sections
127.14,

155.33,
155.34, 1509.01, 1509.02, 1509.03, 1509.06, 1509.07, 1509.071,
1509.13, 1509.22, 1509.221
,
1509.224
,
1509.23, 1509.31, 1509.36
,
1509.37
,
2305.041
,
2305.06
,
5577.02, and 5727.02 of the Revised Code be
amended

to
read as follows:

Sec.
127.14.
The
controlling board may, at the request of any state agency or the
director of budget and management, authorize, with respect to the
provisions of any appropriation act:

(A)
Transfers of all or part of an appropriation within but not between
state agencies, except such transfers as the director of budget and
management is authorized by law to make, provided that no transfer
shall be made by the director for the purpose of effecting new or
changed levels of program service not authorized by the general
assembly;

(B)
Transfers of all or part of an appropriation from one fiscal year to
another;

(C)
Transfers of all or part of an appropriation within or between state
agencies made necessary by administrative reorganization or by the
abolition of an agency or part of an agency;

(D)
Transfers of all or part of cash balances in excess of needs from any
fund of the state to the general revenue fund or to such other fund
of the state to which the money would have been credited in the
absence of the fund from which the transfers are authorized to be
made, except that the controlling board may not authorize such
transfers from the accrued leave liability fund, auto registration
distribution fund, local motor vehicle license tax fund, budget
stabilization fund, building improvement fund, development bond
retirement fund, facilities establishment fund, gasoline excise tax
fund, general revenue fund, higher education improvement fund,
highway improvement bond retirement fund, highway capital improvement
fund, highway operating fund, horse racing tax fund, improvements
bond retirement fund, public library fund, liquor control fund, local
government fund, local transportation improvement program fund,
medicaid reserve fund, mental health facilities improvement fund,
Ohio fairs fund,
oil
and gas well fund,
parks
and recreation improvement fund, school district income tax fund,
state agency facilities improvement fund, public safety - highway
purposes fund, state lottery fund, undivided liquor permit fund,
Vietnam conflict compensation bond retirement fund, volunteer fire
fighters' dependents fund, waterways safety fund, wildlife fund,
workers' compensation fund, or any fund not specified in this
division that the director of budget and management determines to be
a bond fund or bond retirement fund;

(E)
Transfers of all or part of those appropriations included in the
emergency purposes account of the controlling board;

(F)
Temporary transfers of all or part of an appropriation or other
moneys into and between existing funds, or new funds, as may be
established by law when needed for capital outlays for which notes or
bonds will be issued;

(G)
Transfer or release of all or part of an appropriation to a state
agency requiring controlling board approval of such transfer or
release as provided by law;

(H)
Temporary transfer of funds included in the emergency purposes
appropriation of the controlling board. Such temporary transfers may
be made subject to conditions specified by the controlling board at
the time temporary transfers are authorized. No transfers shall be
made under this division for the purpose of effecting new or changed
levels of program service not authorized by the general assembly.

As
used in this section, "request" means an application by a
state agency or the director of budget and management seeking some
action by the controlling board.

When
authorizing the transfer of all or part of an appropriation under
this section, the controlling board may authorize the transfer to an
existing appropriation item and the creation of and transfer to a new
appropriation item.

Whenever
there is a transfer of all or part of funds included in the emergency
purposes appropriation by the controlling board, pursuant to division
(E) of this section, the state agency or the director of budget and
management receiving such transfer shall keep a detailed record of
the use of the transferred funds. At the earliest scheduled meeting
of the controlling board following the accomplishment of the purposes
specified in the request originally seeking the transfer, or
following the total expenditure of the transferred funds for the
specified purposes, the state agency or the director of budget and
management shall submit a report on the expenditure of such funds to
the board. The portion of any appropriation so transferred which is
not required to accomplish the purposes designated in the original
request to the controlling board shall be returned to the proper
appropriation of the controlling board at this time.

Notwithstanding
any provisions of law providing for the deposit of revenues received
by a state agency to the credit of a particular fund in the state
treasury, whenever there is a temporary transfer of funds included in
the emergency purposes appropriation of the controlling board
pursuant to division (H) of this section, revenues received by any
state agency receiving such a temporary transfer of funds shall, as
directed by the controlling board, be transferred back to the
emergency purposes appropriation.

The
board may delegate to the director of budget and management authority
to approve transfers among items of appropriation under division (A)
of this section.

Sec.
155.33.
(A)(1)
Beginning on April 7, 2023, and ending on the effective date of the
rules adopted under section 155.34 of the Revised Code, a state
agency shall lease, in good faith, a formation within a parcel of
land that is owned or controlled by the state agency for the
exploration for and development and production of oil or natural gas.
The lease shall be on terms that are just and reasonable, as
determined by custom and practice in the oil and gas industry, and
shall include at least the terms required under
divisions
(A)(1)(a) to (d)
division
(A)

of section 155.34 of the Revised Code

as that division existed prior to the effective date of this
amendment
.
The person seeking to lease the formation shall submit to the state
agency the proof described in divisions (D)(5)(a) and (b) of this
section before entering into the lease. On and after the effective
date of the rules adopted under section 155.34 of the Revised Code, a
formation within a parcel of land that is owned or controlled by a
state agency may be leased for the exploration for and development
and production of oil or natural gas only in accordance with
divisions (A)(2) to (H) of this section and those rules.

(2)
On and after the effective date of rules adopted under section 155.34
of the Revised Code, any person or state agency that is interested in
leasing a formation within a parcel of land that is owned or
controlled by a state agency for the exploration for and the
development and production of oil or natural gas may submit to the
oil and gas land management commission a nomination that shall
include all of the following:

(a)
The name of the person making the nomination and the person's
address, telephone number, and email address;

(b)
An identification of the formation and parcel of land proposed to be
leased that specifies all of the following:

(i)
The percentage of the interest owned or controlled by the state
agency, and whether that interest is divided, undivided, or partial;

(ii)
The source deed by book and page numbers, including the description
and acreage of the parcel and an identification of the county,
section, township, and range in which the parcel is located;

(iii)
A plat map depicting the area in which the parcel is located.

(c)
If the person making the nomination is not a state agency, a
nomination fee of one hundred fifty dollars;

(d)
The proposed lease bonus that applies to the nomination and any
additional proposed gross landowner royalty that applies to the
nomination that is in addition to the amount required under division
(A)(1)(b) of section 155.34 of the Revised Code;

(e)
If the person making the nomination is not a state agency, proof of
both of the following:

(i)
That the person has obtained the insurance and financial assurance
required under section 1509.07 of the Revised Code;

(ii)
That the person has registered with and obtained an identification
number from the division of oil and gas resources management under
section 1509.31 of the Revised Code.

(3)
In order to encourage the submission of nominations and the
responsible and reasonable development of the state's natural
resources, only the information submitted under division (A)(2)(b) of
this section may be disclosed to the public until a person is
selected under division (F) of this section. Until a person is
selected under division (F) of this section, all other information
submitted under division (A)(2) of this section is confidential,
shall not be disclosed by the commission, and is not a public record
subject to inspection or copying under section 149.43 of the Revised
Code.

(4)
When a nomination is not submitted by a state agency, the nomination
is the opening bid for purposes of division (D) of this section.
However, the person submitting the nomination may supplement or amend
that bid by providing additional information in accordance with that
division.

(B)(1)

Not
less than thirty days, but not more than one hundred twenty days
following the receipt of a nomination, the
The

commission
shall conduct
a
meeting
one
or more meetings
for
the purpose of determining whether to approve or disapprove the
nomination for the purpose of leasing a formation within the parcel
of land that is identified in the nomination.

In
making its decision to approve or disapprove the nomination, the
commission shall consider all of the following:

(a)
The economic benefits, including the potential income from an oil or
natural gas operation, that would result if the lease of a formation
that is the subject of the nomination were approved;

(b)
Whether the proposed oil or gas operation is compatible with the
current uses of the parcel of land that is the subject of the
nomination;

(c)
The environmental impact that would result if the lease of a
formation that is the subject of the nomination were approved;

(d)
Any potential adverse geological impact that would result if the
lease of a formation that is the subject of the nomination were
approved;

(e)
Any potential impact to visitors or users of a parcel of land that is
the subject of the nomination;

(f)
Any potential impact to the operations or equipment of a state agency
that is a state university or college if the lease of a formation
within a parcel of land owned or controlled by the university or
college that is the subject of the nomination were executed;

(g)
Any comments or objections to the nomination submitted to the
commission by the state agency that owns or controls the parcel of
land on which the proposed oil or natural gas operation would take
place;

(h)
Any comments or objections to the nomination submitted to the
commission by residents of this state or other users of the parcel of
land that is the subject of the nomination;

(i)
Any special terms and conditions the state agency included in its
comments or objections that the state agency believes are appropriate
for the lease of the parcel of land because of specific conditions
related to that parcel of land.

(2)
The commission shall approve or disapprove a nomination not later
than
two
calendar quarters
ninety
days
following
the receipt of the nomination. The commission shall post notice of
the commission's decision on the commission's web site and send
notice of the decision by email and by certified mail to the person
that submitted the nomination and to the state agency that owns or
controls the formation within the parcel of land that is the subject
of the nomination.

(C)

Each
calendar quarter, the
The

commission
shall proceed to advertise for bids for a lease for a formation
within a parcel of land that was the subject of a nomination approved

during
the previous calendar quarter
by
the commission
.
The commission shall publish the advertisement on its web site for a
period of time established by the commission. The advertisement shall
include all of the following:

(1)
An identification of each formation and parcel of land proposed to be
leased that includes all of the information specified in division
(A)(2)(b) of this section;

(2)
The deadline for the submission of bids;

(3)
A statement that each bid must contain all of the items required
under division (D) of this section;

(4)
A statement that a standard lease form that is consistent with the
practices of the oil and natural gas industries and adopted by rule
by the commission will be used for the lease of a formation within
the parcel of land;

(5)
Any special terms and conditions that may apply to the lease because
of specific conditions related to the parcel of land;

(6)
The amount of the bid fee that is required to be submitted with a
bid;

(7)
Any other information that the commission considers pertinent to the
advertisement for bids.

(D)
A person interested in leasing a formation within a parcel of land
owned or controlled by a state agency for the exploration for and
development and production of oil or natural gas may submit a bid to
the commission on a parcel by parcel basis that contains all of the
following:

(1)
A bid fee of twenty-five dollars;

(2)
The name of the person making the bid and the person's address,
telephone number, and email address;

(3)
An identification of the formation and parcel of land for which the
bid is being submitted, including all of the information specified in
division (A)(2)(b) of this section;

(4)
The proposed lease bonus that applies to the bid and any additional
proposed gross landowner royalty that applies to the bid that is in
addition to the amount required under division (A)(1)(b) of section
155.34 of the Revised Code;

(5)
Proof of both of the following:

(a)
That the person has obtained the insurance and financial assurance
required under section 1509.07 of the Revised Code;

(b)
That the person has registered with and obtained an identification
number from the division of oil and gas resources management under
section 1509.31 of the Revised Code.

(6)
Any other information that the person believes is relevant to the
bid.

(E)
In order to encourage the submission of bids and the responsible and
reasonable development of the state's natural resources, the
information that is contained in a bid submitted to the commission
under this section is confidential, shall not be disclosed by the
commission, and is not a public record subject to inspection and
copying under section 149.43 of the Revised Code until a person is
selected under division (F) of this section.

The

Not
later than sixty days following a nomination's approval, the

commission
shall select the person who submits the highest and best bid, taking
into account the financial responsibility of the prospective lessee
and the ability of the prospective lessee to perform its obligations
under the lease. After the commission selects a person, the
commission shall notify the applicable state agency and send the
person's bid to the agency. The state agency shall enter into a lease
with the person selected by the commission.

The state agency shall fully execute the lease and deliver it to the
selected person not later than thirty days after the commission
selects such person. The person shall execute the lease and deliver
it back to the state agency not later than forty-five days after
receiving such lease. If a person fails to so execute and deliver the
lease, the lease is void.

(G)(1)
Except as otherwise provided in section 155.37 of the Revised Code,
all money received by a state agency from signing fees, rentals, and
royalty payments for leases entered into under this section shall be
paid by the state agency into the state treasury to the credit of the
state land royalty fund created in section 131.50 of the Revised
Code.

(2)
All money received from nomination fees and bid fees shall be paid
into the state treasury to the credit of the oil and gas land
management commission administration fund created in section 155.35
of the Revised Code.

(H)
Notwithstanding any other provision of this section to the contrary,
a nature preserve as defined in section 1517.01 of the Revised Code
that is owned or controlled by a state agency shall not be nominated
or leased under this section for the purpose of exploring for and
developing and producing oil and natural gas resources.

(I)
Except as otherwise provided in this chapter, the commission and any
state agency shall not require as part of a bid or lease either of
the following:

(1)
Any royalty payment in excess of the amount specified in division
(A)(1)(b) of section 155.34 of the Revised Code;

(2)
Any additional payment that the commission or agency is not
specifically authorized or required to charge under this section.

Sec.
155.34.
(A)

Not
later than one hundred twenty days after September 30, 2021, the
The

oil
and gas land management commission shall adopt rules in accordance
with Chapter 119. of the Revised Code establishing
both

all

of
the following:

(1)
A standard lease form that shall be used by a state agency for leases
entered into under this chapter, is consistent with the practices of
the oil and natural gas industries, and contains all of the
following:

(a)
A prohibition against the use of the surface of the parcel of land
for oil and gas development unless the state agency, in its sole
discretion, chooses to negotiate and execute a written surface use
agreement established under this section;

(b)
A one-eighth gross landowner royalty;

(c)

A
shut-in royalty provision that requires annual payments equal to the
sum of fifty dollars per net mineral acre;

(d)

A
primary term of five years;

(d)
(e)

An option for the lessee to extend the primary term of the lease for
an additional
three

five

years
by tendering to the state agency the same bonus paid when first
entering into the lease
.

;

(f)
A provision that states: "Notwithstanding any other provision of
this Lease to the contrary, Lessee is entitled to pay any advanced
delay rentals/bonus amounts owed under this Lease within sixty (60)
calendar days after Lessee receives a copy of this Lease executed by
Lessor."

(g)
A provision that states: "Notwithstanding any other provision of
this Lease to the contrary, in the event that a parcel subject to
this Lease was acquired or improved through, or is otherwise
encumbered by, a federal grant program, the Primary Term of the Lease
shall be tolled until the requirements of the program, and any
related grant documents, have been fully satisfied by Lessor and
Lessor notifies Lessee in writing of same."

(h)
A provision that states: "Notwithstanding any other provision of
this Lease to the contrary, in the event that a parcel subject to
this Lease was acquired or improved through, or is otherwise
encumbered by, a federal grant program, Lessee may defer payment of
all sums otherwise due and owing under this Lease until the
requirements of the program, and any related grant documents, have
been fully satisfied by Lessor and Lessor notifies Lessee in writing
of same."

(i)
A provision that states: "Notwithstanding any other provision of
this Lease to the contrary, in the event that litigation of any kind
or character is filed by a third party that prevents the Lessee from
conducting operations under the Lease, including an appeal before a
court or the oil and gas commission, the Primary Term of the Lease
shall be tolled until such time as there is a final, nonappealable
order entered in such litigation."

(j)
A provision that states: "Notwithstanding any other provision of
this Lease to the contrary, in the event that litigation of any kind
or character is filed by a third party that prevents the Lessee from
conducting operations under the Lease, including an appeal before a
court or the oil and gas commission, Lessee may defer payment of all
sums otherwise due and owing under this Lease until a final,
nonappealable order is entered in such litigation."

(k)
A provision that states: "Except as explicitly provided in this
Lease, the Primary Term of the Lease may be tolled and payments may
be deferred only as a result of an event of force majeure."

(2)

A
requirement that, notwithstanding any provision of law to the
contrary, a lessee shall not be required to terminate drilling
operations under a lease when a civil action is filed against the
lessee, unless the applicable court issues an injunction or otherwise
orders such drilling operations to cease.

(3)

Any
other procedures necessary to implement sections 155.30 to 155.36 of
the Revised Code
,
subject to division (I) of section 155.33 of the Revised Code
.

(B)

Not
later than one hundred twenty days after September 30, 2021, the
The

commission
shall establish a standard surface use agreement that a state agency
shall use to authorize the use of the surface of a leased parcel of
land.

(C)
Section 121.95 of the Revised Code does not apply to rules adopted
under this section and the commission is not subject to any
requirements of that section.

Sec.
1509.01.
As
used in this chapter:

(A)
"Well" means any borehole, whether drilled or bored, within
the state for production, extraction, or injection of any gas or
liquid mineral, excluding potable water to be used as such, but
including natural or artificial brines and oil field waters. "Well"
includes a stratigraphic well.

(B)
"Oil" means crude petroleum oil and all other hydrocarbons,
regardless of gravity, that are produced in liquid form by ordinary
production methods, but does not include hydrocarbons that were
originally in a gaseous phase in the reservoir.

(C)
"Gas" means all natural gas and all other fluid
hydrocarbons that are not oil, including condensate.

(D)
"Condensate" means liquid hydrocarbons separated at or near
the well pad or along the gas production or gathering system prior to
gas processing.

(E)
"Pool" means an underground reservoir containing a common
accumulation of oil or gas, or both, but does not include a gas
storage reservoir. Each zone of a geological structure that is
completely separated from any other zone in the same structure may
contain a separate pool.

(F)
"Field" means the general area underlaid by one or more
pools.

(G)
"Drilling unit" means the minimum acreage on which one well
may be drilled, but does not apply to a well for injecting gas into
or removing gas from a gas storage reservoir and does not apply to a
stratigraphic well.

(H)
"Waste" includes all of the following:

(1)
Physical waste, as that term generally is understood in the oil and
gas industry;

(2)
Inefficient, excessive, or improper use, or the unnecessary
dissipation, of reservoir energy;

(3)
Inefficient storing of oil or gas;

(4)
Locating, drilling, equipping, operating, or producing an oil or gas
well in a manner that reduces or tends to reduce the quantity of oil
or gas ultimately recoverable under prudent and proper operations
from the pool into which it is drilled or that causes or tends to
cause unnecessary or excessive surface loss or destruction of oil or
gas;

(5)
Other underground or surface waste in the production or storage of
oil, gas, or condensate, however caused.

(I)
"Correlative rights" means the reasonable opportunity to
every person entitled thereto to recover and receive the oil and gas
in and under the person's tract or tracts, or the equivalent thereof,
without having to drill unnecessary wells or incur other unnecessary
expense.

(J)
"Tract" means a single, individual parcel of land or a
portion of a single, individual parcel of land.

(K)
(K)(1)

"Owner," unless referring to a mine

or except as provided in division (K)(2) of this section
,
means the person who has the right to drill on a tract or drilling
unit, to drill into and produce from a pool, and to appropriate the
oil or gas produced therefrom either for the person or for others,
except that a person ceases to be an owner with respect to a well
when the well has been plugged in accordance with applicable rules
adopted and orders issued under this chapter.
"Owner"

(2)
"Owner," for purposes of obtaining a permit under section
1509.06 of the Revised Code, means each person having the right to
drill on a tract or drilling unit, to drill into and produce from a
pool, and to appropriate the oil and gas produced therefrom either
for the person or for others, except that a person ceases to be an
owner with respect to a well when the well has been plugged in
accordance with applicable rules adopted and orders issued under this
chapter.

(3)
"Owner"

does not include a person who obtains a lease of the mineral rights
for oil and gas on a parcel of land if the person does not attempt to
produce or produce oil or gas from a well or obtain a permit under
this chapter for a well or if the entire interest of a well is
transferred to the person in accordance with division (B) of section
1509.31 of the Revised Code.

(L)
"Royalty interest" means the fee holder's share in the
production from a well, except a stratigraphic well.

(M)
"Discovery well" means the first well, except a
stratigraphic well, capable of producing oil or gas in commercial
quantities from a pool.

(N)
"Prepared clay" means a clay that is plastic and is
thoroughly saturated with fresh water to a weight and consistency
great enough to settle through saltwater in the well in which it is
to be used, except as otherwise approved by the chief of the division
of oil and gas resources management.

(O)
"Rock sediment" means the combined cutting and residue from
drilling sedimentary rocks and formation.

(P)
"Excavations and workings," "mine," and "pillar"
have the same meanings as in section 1561.01 of the Revised Code.

(Q)
"Coal bearing township" means a township designated as such
by the chief of the division of mineral resources management under
section 1561.06 of the Revised Code.

(R)
"Gas storage reservoir" means a continuous area of a
subterranean porous sand or rock stratum or strata into which gas is
or may be injected for the purpose of storing it therein and removing
it therefrom and includes a gas storage reservoir as defined in
section 1571.01 of the Revised Code.

(S)
"Safe Drinking Water Act" means the "Safe Drinking
Water Act," 88 Stat. 1661 (1974), 42 U.S.C.A. 300(f), as amended
by the "Safe Drinking Water Amendments of 1977," 91 Stat.
1393, 42 U.S.C.A. 300(f), the "Safe Drinking Water Act
Amendments of 1986," 100 Stat. 642, 42 U.S.C.A. 300(f), and the
"Safe Drinking Water Act Amendments of 1996," 110 Stat.
1613, 42 U.S.C.A. 300(f), and regulations adopted under those acts.

(T)
"Person" includes any political subdivision, department,
agency, or instrumentality of this state; the United States and any
department, agency, or instrumentality thereof; any legal entity
defined as a person under section 1.59 of the Revised Code; and any
other form of business organization or entity recognized by the laws
of this state.

(U)
"Brine" means all saline geological formation water
resulting from, obtained from, or produced in connection with
exploration, drilling, well stimulation, production of oil or gas, or
plugging of a well.

(V)
"Waters of the state" means all streams, lakes, ponds,
marshes, watercourses, waterways, springs, irrigation systems,
drainage systems, and other bodies of water, surface or underground,
natural or artificial, that are situated wholly or partially within
this state or within its jurisdiction, except those private waters
that do not combine or effect a junction with natural surface or
underground waters.

(W)
"Exempt Mississippian well" means a well that meets all of
the following criteria:

(1)
Was drilled and completed before January 1, 1980;

(2)
Is located in an unglaciated part of the state;

(3)
Was completed in a reservoir no deeper than the Mississippian Big
Injun sandstone in areas underlain by Pennsylvanian or Permian
stratigraphy, or the Mississippian Berea sandstone in areas directly
underlain by Permian stratigraphy;

(4)
Is used primarily to provide oil or gas for domestic use.

(X)
"Exempt domestic well" means a well that meets all of the
following criteria:

(1)
Is owned by the owner of the surface estate of the tract on which the
well is located;

(2)
Is used primarily to provide gas for the owner's domestic use;

(3)
Is located more than two hundred feet horizontal distance from any
inhabited private dwelling house other than an inhabited private
dwelling house located on the tract on which the well is located;

(4)
Is located more than two hundred feet horizontal distance from any
public building that may be used as a place of resort, assembly,
education, entertainment, lodging, trade, manufacture, repair,
storage, traffic, or occupancy by the public.

(Y)
"Urbanized area" means an area where a well or production
facilities of a well are located within a municipal corporation or
within a township that has an unincorporated population of more than
five thousand in the most recent federal decennial census prior to
the issuance of the permit for the well or production facilities.

(Z)
"Well stimulation" or "stimulation of a well"
means the process of enhancing well productivity, including hydraulic
fracturing operations.

(AA)
"Production operation" means all operations and activities
and all related equipment, facilities, and other structures that may
be used in or associated with the exploration and production of oil,
gas, or other mineral resources that are regulated under this
chapter, including operations and activities associated with site
preparation, site construction, access road construction, well
drilling, well completion, well stimulation, well site activities,
reclamation, and plugging. "Production operation" also
includes all of the following:

(1)
The piping, equipment, and facilities used for the production and
preparation of hydrocarbon gas or liquids for transportation or
delivery;

(2)
The processes of extraction and recovery, lifting, stabilization,
treatment, separation, production processing, storage, waste
disposal, and measurement of hydrocarbon gas and liquids, including
related equipment and facilities;

(3)
The processes and related equipment and facilities associated with
production compression, gas lift, gas injection, fuel gas supply,
well drilling, well stimulation, and well completion activities,
including dikes, pits, and earthen and other impoundments used for
the temporary storage of fluids and waste substances associated with
well drilling, well stimulation, and well completion activities;

(4)
Equipment and facilities at a wellpad or other location that are used
for the transportation, handling, recycling, temporary storage,
management, processing, or treatment of any equipment, material, and
by-products or other substances from an operation at a wellpad that
may be used or reused at the same or another operation at a wellpad
or that will be disposed of in accordance with applicable laws and
rules adopted under them.

(BB)
"Annular overpressurization" means the accumulation of
fluids within an annulus with sufficient pressure to allow migration
of annular fluids into underground sources of drinking water.

(CC)
"Orphaned well" means a well that has not been properly
plugged or its land surface restored in accordance with this chapter
and the rules adopted under it to which either of the following
apply:

(1)
The owner of the well is unknown, deceased, or cannot be located and
the well is abandoned.

(2)
The owner of the well has abandoned the well and there is no money
available to plug the well in accordance with this chapter and the
rules adopted under it.

(DD)
"Temporarily inactive well" means a well that has been
granted temporary inactive status under section 1509.062 of the
Revised Code.

(EE)
"Material and substantial violation" means any of the
following:

(1)
Failure to obtain a permit to drill, reopen, convert, plugback, or
plug a well under this chapter;

(2)
Failure to obtain, maintain, update, or submit proof of insurance
coverage that is required under this chapter;

(3)
Failure to obtain, maintain, update, or submit proof of a surety bond
that is required under this chapter;

(4)
Failure to restore a disturbed land surface as required by section
1509.072 of the Revised Code;

(5)
Failure to reimburse the oil and gas well fund pursuant to a final
order issued under section 1509.071 of the Revised Code;

(6)
Failure to comply with a final nonappealable order of the chief
issued under section 1509.04 of the Revised Code;

(7)
Failure to submit a report, test result, fee, or document that is
required in this chapter or rules adopted under it.

(FF)
"Severer" has the same meaning as in section 5749.01 of the
Revised Code.

(GG)
"Horizontal well" means a well that is drilled for the
production of oil or gas in which the wellbore reaches a horizontal
or near horizontal position in the Point Pleasant, Utica, or
Marcellus formation and the well is stimulated. "Horizontal
well" does not include a stratigraphic well.

(HH)
"Well pad" means the area that is cleared or prepared for
the drilling of one or more horizontal wells.

(II)
"Stratigraphic well" means a borehole that is drilled
within the state on a tract solely to conduct research or testing of
the subsurface geology, including porosity and permeability.
"Stratigraphic well" does not include geotechnical or soil
borings or a borehole drilled for seismic shot or mining of
industrial minerals or coal.

Sec.
1509.02.
There
is hereby created in the department of natural resources the division
of oil and gas resources management, which shall be administered by
the chief of the division of oil and gas resources management. The
division has sole and exclusive authority to regulate the permitting,
location, and spacing of oil and gas wells and production operations
within the state, excepting only those activities regulated under
federal laws for which oversight has been delegated to the
environmental protection agency and activities regulated under
sections 6111.02 to 6111.028 of the Revised Code.

The division's sole and exclusive authority includes the authority to
regulate any portion of an oil and gas well located in this state,
regardless of whether any other portion of that oil and gas well is
located outside of this state.

The regulation of oil and gas activities is a matter of general
statewide interest that requires uniform statewide regulation, and
this chapter and rules adopted under it constitute a comprehensive
plan with respect to all aspects of the locating, drilling, well
stimulation, completing, and operating of oil and gas wells within
this state, including site construction and restoration, permitting
related to those activities, and the disposal of wastes from those
wells. In order to assist the division in the furtherance of its sole
and exclusive authority as established in this section, the chief may
enter into cooperative agreements with other state agencies for
advice and consultation, including visitations at the surface
location of a well on behalf of the division.
In
cases in which a well is located both in this state and another
state, the chief also may enter into a memorandum of understanding
with an agency of another state for purposes of the interstate well.

Such
cooperative agreements
and
memorandums of understanding
do
not confer on other state agencies
or
entities
any
authority to administer or enforce this chapter and rules adopted
under it. In addition, such cooperative agreements
and
memorandums of understanding
shall
not be construed to dilute or diminish the division's sole and
exclusive authority as established in this section. Nothing in this
section affects the authority granted to the director of
transportation and local authorities in section 723.01 or 4513.34 of
the Revised Code, provided that the authority granted under those
sections shall not be exercised in a manner that discriminates
against, unfairly impedes, or obstructs oil and gas activities and
operations regulated under this chapter.

The
chief shall not hold any other public office, nor shall the chief be
engaged in any occupation or business that might interfere with or be
inconsistent with the duties as chief.

Money
collected by the chief pursuant to sections 1509.06, 1509.061,
1509.062, 1509.071, 1509.13, 1509.22, 1509.222, 1509.28, 1509.34,
1509.50, and 5749.02 of the Revised Code,
all
money from the sale of carbon credits,
all
civil penalties paid under section 1509.33 of the Revised Code, and,
notwithstanding any section of the Revised Code relating to the
distribution or crediting of fines for violations of the Revised
Code, all fines imposed under divisions (A) and (B) of section
1509.99 of the Revised Code and fines imposed under divisions (C) and
(D) of section 1509.99 of the Revised Code for all violations
prosecuted by the attorney general and for violations prosecuted by
prosecuting attorneys that do not involve the transportation of brine
by vehicle shall be deposited into the state treasury to the credit
of the oil and gas well fund, which is hereby created. Fines imposed
under divisions (C) and (D) of section 1509.99 of the Revised Code
for violations prosecuted by prosecuting attorneys that involve the
transportation of brine by vehicle and penalties associated with a
compliance agreement entered into pursuant to this chapter shall be
paid to the county treasury of the county where the violation
occurred.

The
fund shall be used solely and exclusively for the purposes enumerated
in division (B) of section 1509.071 of the Revised Code, for the
expenses of the division associated with the administration of this
chapter and Chapter 1571. of the Revised Code and rules adopted under
them, and for expenses that are critical and necessary for the
protection of human health and safety and the environment related to
oil and gas production in this state. The expenses of the division in
excess of the moneys available in the fund shall be paid from general
revenue fund appropriations to the department.

Sec.
1509.03.
(A)
The chief of the division of oil and gas resources management shall
adopt, rescind, and amend, in accordance with Chapter 119. of the
Revised Code, rules for the administration, implementation, and
enforcement of this chapter. The rules shall include an
identification of the subjects that the chief shall address when
attaching terms and conditions to a permit with respect to a well and
production facilities of a well that are located within an urbanized
area or with respect to a horizontal well and production facilities
associated with a horizontal well. The subjects shall include all of
the following:

(1)
Safety concerning the drilling or operation of a well;

(2)
Protection of the public and private water supply, including the
amount of water used and the source or sources of the water;

(3)
Fencing and screening of surface facilities of a well;

(4)
Containment and disposal of drilling and production wastes;

(5)
Construction of access roads for purposes of the drilling and
operation of a well;

(6)
Noise mitigation for purposes of the drilling of a well and the
operation of a well, excluding safety and maintenance operations.

No
person shall violate any rule of the chief adopted under this
chapter.

(B)(1)

Any
order issuing, denying, or modifying a permit or notices required to
be made by the chief pursuant to this chapter shall be made in
compliance with
Chapter
119. of the Revised Code
,
except that personal service may be used in lieu of service by mail.
Every order issuing, denying, or modifying a permit under this
chapter and described as such shall be considered an adjudication
order for purposes of Chapter 119. of the Revised Code. Division
(B)(1) of this section does not apply to a permit issued under
section 1509.06 of the Revised Code

does not apply to orders made by or notices required to be made by
the chief pursuant to this chapter or rules adopted under it
.

(2)

Where
notice to any person is required by this chapter, the notice shall be
given in order to meet the requirements of law
The
chief shall adopt rules in accordance with Chapter 119. of the
Revised Code establishing both of the following:

(a)
Procedures for notice required to be provided to any person under
this chapter and rules adopted under it;

(b)
Procedures for serving the chief's orders and compliance notices
.

(C)
The chief or the chief's authorized representative may at any time
enter upon lands, public or private, for the purpose of
administration or enforcement of this chapter, the rules adopted or
orders made thereunder, or terms or conditions of permits or
registration certificates issued thereunder and may examine and copy
records pertaining to the drilling, conversion, or operation of a
well for injection of fluids and logs required by division (C) of
section 1509.223 of the Revised Code. No person shall prevent or
hinder the chief or the chief's authorized representative in the
performance of official duties. If entry is prevented or hindered,
the chief or the chief's authorized representative may apply for, and
the court of common pleas may issue, an appropriate inspection
warrant necessary to achieve the purposes of this chapter within the
court's territorial jurisdiction.

(D)
The chief may issue orders to enforce this chapter, rules adopted
thereunder, and terms or conditions of permits issued thereunder.

Any such order shall be considered an adjudication order for the
purposes of Chapter 119. of the Revised Code.

No person shall violate any order of the chief issued under this
chapter. No person shall violate a term or condition of a permit or
registration certificate issued under this chapter.

(E)
Orders of the chief denying, suspending, or revoking a registration
certificate; approving or denying approval of an application for
revision of a registered transporter's plan for disposal; or to
implement, administer, or enforce division (A) of section 1509.224
and sections 1509.22, 1509.222, 1509.223, 1509.225, and 1509.226 of
the Revised Code pertaining to the transportation of brine by vehicle
and the disposal of brine so transported are not adjudication orders
for purposes of Chapter 119. of the Revised Code. The chief shall
issue such orders under division (A) or (B) of section 1509.224 of
the Revised Code, as appropriate.

Sec.
1509.06.
(A)
An application for a permit to drill a new well, drill an existing
well deeper, reopen a well, convert a well to any use other than its
original purpose, or plug back a well to a different source of
supply, including
any
portion of a well located in this state, regardless of whether any
other portion of that well is located outside of this state, and
including
associated
production operations, shall be filed with the chief of the division
of oil and gas resources management upon such form as the chief
prescribes and shall contain each of the following that is
applicable:

(1)
The name and address of the owner and, if a corporation, the name and
address of the statutory agent;

(2)
The signature of the owner or the owner's authorized agent. When an
authorized agent signs an application, it shall be accompanied by a
certified copy of the appointment as such agent.

(3)
The names and addresses of all persons holding the royalty interest
in the tract upon which the well is located or is to be drilled or
within a proposed drilling unit;

(4)
The location of the tract or drilling unit on which the well is
located or is to be drilled identified by section or lot number,
city, village, township, and county;

(5)
Designation of the well by name and number;

(6)(a)
The geological formation to be tested or used and the proposed total
depth of the well;

(b)
If the well is for the injection of a liquid, identity of the
geological formation to be used as the injection zone and the
composition of the liquid to be injected.

(7)
The type of drilling equipment to be used;

(8)(a)
An identification, to the best of the owner's knowledge, of each
proposed source of ground water and surface water that will be used
in the production operations of the well. The identification of each
proposed source of water shall indicate if the water will be
withdrawn from the Lake Erie watershed or the Ohio river watershed.
In addition, the owner shall provide, to the best of the owner's
knowledge, the proposed estimated rate and volume of the water
withdrawal for the production operations. If recycled water will be
used in the production operations, the owner shall provide the
estimated volume of recycled water to be used. The owner shall submit
to the chief an update of any of the information that is required by
division (A)(8)(a) of this section if any of that information changes
before the chief issues a permit for the application.

(b)
Except as provided in division (A)(8)(c) of this section, for an
application for a permit to drill a new well within an urbanized
area, the results of sampling of water wells within three hundred
feet of the proposed well prior to commencement of drilling. In
addition, the owner shall include a list that identifies the location
of each water well where the owner of the property on which the water
well is located denied the owner access to sample the water well. The
sampling shall be conducted in accordance with the guidelines
established in "Best Management Practices For Pre-drilling Water
Sampling" in effect at the time that the application is
submitted. The division shall furnish those guidelines upon request
and shall make them available on the division's web site. If the
chief determines that conditions at the proposed well site warrant a
revision, the chief may revise the distance established in this
division for purposes of pre-drilling water sampling.

(c)
For an application for a permit to drill a new horizontal well, the
results of sampling of water wells within one thousand five hundred
feet of the proposed horizontal wellhead prior to commencement of
drilling. In addition, the owner shall include a list that identifies
the location of each water well where the owner of the property on
which the water well is located denied the owner access to sample the
water well. The sampling shall be conducted in accordance with the
guidelines established in "Best Management Practices For
Pre-drilling Water Sampling" in effect at the time that the
application is submitted. The division shall furnish those guidelines
upon request and shall make them available on the division's web
site. If the chief determines that conditions at the proposed well
site warrant a revision, the chief may revise the distance
established in this division for purposes of pre-drilling water
sampling.

(9)
For an application for a permit to drill a new well within an
urbanized area, a sworn statement that the applicant has provided
notice by regular mail of the application to the owner of each parcel
of real property that is located within five hundred feet of the
surface location of the well and to the executive authority of the
municipal corporation or the board of township trustees of the
township, as applicable, in which the well is to be located. In
addition, the notice shall contain a statement that informs an owner
of real property who is required to receive the notice under division
(A)(9) of this section that within five days of receipt of the
notice, the owner is required to provide notice under section 1509.60
of the Revised Code to each residence in an occupied dwelling that is
located on the owner's parcel of real property. The notice shall
contain a statement that an application has been filed with the
division of oil and gas resources management, identify the name of
the applicant and the proposed well location, include the name and
address of the division, and contain a statement that comments
regarding the application may be sent to the division. The notice may
be provided by hand delivery or regular mail. The identity of the
owners of parcels of real property shall be determined using the tax
records of the municipal corporation or county in which a parcel of
real property is located as of the date of the notice.

(10)
A plan for restoration of the land surface disturbed by drilling
operations. The plan shall provide for compliance with the
restoration requirements of division (A) of section 1509.072 of the
Revised Code and any rules adopted by the chief pertaining to that
restoration.

(11)(a)
A description by name or number of the county, township, and
municipal corporation roads, streets, and highways that the applicant
anticipates will be used for access to and egress from the well site;

(b)
For an application for a permit for a horizontal well, a copy of an
agreement concerning maintenance and safe use of the roads, streets,
and highways described in division (A)(11)(a) of this section entered
into on reasonable terms with the public official that has the legal
authority to enter into such maintenance and use agreements for each
county, township, and municipal corporation, as applicable, in which
any such road, street, or highway is located or an affidavit on a
form prescribed by the chief attesting that the owner attempted in
good faith to enter into an agreement under division (A)(11)(b) of
this section with the applicable public official of each such county,
township, or municipal corporation, but that no agreement was
executed.

(12)
Such other relevant information as the chief prescribes by rule.

Each
application shall be accompanied by a map, on a scale not smaller
than four hundred feet to the inch, prepared by an Ohio registered
surveyor, showing the location of the well and containing such other
data as may be prescribed by the chief. If the well is or is to be
located within the excavations and workings of a mine, the map also
shall include the location of the mine, the name of the mine, and the
name of the person operating the mine.

(B)
The chief shall cause a copy of the weekly circular prepared by the
division to be provided to the county engineer of each county that
contains active or proposed drilling activity. The weekly circular
shall contain, in the manner prescribed by the chief, the names of
all applicants for permits, the location of each well or proposed
well, the information required by division (A)(11) of this section,
and any additional information the chief prescribes. In addition, the
chief promptly shall transfer an electronic copy, or if that method
is not available to a municipal corporation or township, a copy via
regular mail, of a drilling permit application to the clerk of the
legislative authority of the municipal corporation or to the clerk of
the township in which the well or proposed well is or is to be
located if the legislative authority of the municipal corporation or
the board of township trustees has asked to receive copies of such
applications and the appropriate clerk has provided the chief an
accurate, current electronic mailing address.

(C)(1)
Except as provided in
division

divisions

(C)(2)

and
(3)
of
this section, the chief shall not issue a permit for at least ten
days after the date of filing of the application for the permit
unless, upon reasonable cause shown, the chief waives that period or
a request for expedited review is filed under this section. However,
the chief shall issue a permit within twenty-one days of the filing
of the application unless the chief denies the application by order.

(2)
If the location of a well or proposed well will be or is within an
urbanized area, the chief shall not issue a permit for at least
eighteen days after the date of filing of the application for the
permit unless, upon reasonable cause shown, the chief waives that
period or the chief at the chief's discretion grants a request for an
expedited review. However, the chief shall issue a permit for a well
or proposed well within an urbanized area within thirty days of the
filing of the application unless the chief denies the application by
order
.

(3)
If the well that is the subject of the application also requires the
chief to issue a permit under section 1509.21 or 1509.221 or division
(D) of section 1509.22 of the Revised Code, the chief shall issue the
permit for that well or proposed well within one hundred twenty days
after the period for receipt of public comments has ended unless the
chief denies the application by order
.

(D)
An
(D)(1)
Except as provided in division (D)(3) of this section, an
applicant
may file a request with the chief for expedited review of a permit
application if the well is not or is not to be located in a gas
storage reservoir or reservoir protective area, as "reservoir
protective area" is defined in section 1571.01 of the Revised
Code. If the well is or is to be located in a coal bearing township,
the application shall be accompanied by the affidavit of the
landowner prescribed in section 1509.08 of the Revised Code.

(2)

In
addition to a complete application for a permit that meets the
requirements of this section and the permit fee prescribed by this
section, a request for expedited review shall be accompanied by a
separate nonrefundable filing fee of two hundred fifty dollars. Upon
the filing of a request for expedited review, the chief shall cause
the county engineer of the county in which the well is or is to be
located to be notified of the filing of the permit application and
the request for expedited review by telephone or other means that in
the judgment of the chief will provide timely notice of the
application and request. The chief shall issue a permit within seven
days of the filing of the request unless the chief denies the
application by order
.
Notwithstanding the provisions of this section governing expedited
review of permit applications, the chief may refuse to accept
requests for expedited review if, in the chief's judgment, the
acceptance of the requests would prevent the issuance, within
twenty-one days of their filing, of permits for which applications
are pending
.

(3)
No owner shall apply for an expedited permit under this section more
than ten times within a calendar year. Accordingly, the chief shall
not issue more than ten expedited permits to an owner within a
calendar year. However, if an emergency requires that an expedited
permit be issued, as determined by the chief, an owner that is
otherwise prohibited from obtaining an expedited permit under this
division may apply for an expedited permit and the chief may so issue
it.

(E)
A well shall be drilled and operated in accordance with the plans,
sworn statements, and other information submitted in the approved
application.

(F)
The chief shall issue an order denying a permit if the chief finds
that there is a substantial risk that the operation will result in
violations of this chapter or rules adopted under it that will
present an imminent danger to public health or safety or damage to
the environment, provided that where the chief finds that terms or
conditions to the permit can reasonably be expected to prevent such
violations, the chief shall issue the permit subject to those terms
or conditions, including, if applicable, terms and conditions
regarding subjects identified in rules adopted under section 1509.03
of the Revised Code. The issuance of a permit shall not be considered
an order of the chief.

The
chief shall post notice of each permit that has been approved under
this section on the division's web site not later than two business
days after the application for a permit has been approved.

(G)
Each application for a permit required by section 1509.05 of the
Revised Code, except an application for a well drilled or reopened
for purposes of section 1509.22 of the Revised Code, also shall be
accompanied by a nonrefundable fee as follows:

(1)
Five hundred dollars for a permit to conduct activities in a township
with a population of fewer than ten thousand;

(2)
Seven hundred fifty dollars for a permit to conduct activities in a
township with a population of ten thousand or more, but fewer than
fifteen thousand;

(3)
One thousand dollars for a permit to conduct activities in either of
the following:

(a)
A township with a population of fifteen thousand or more;

(b)
A municipal corporation regardless of population.

(4)
If the application is for a permit that requires mandatory pooling,
an additional five thousand dollars.

For
purposes of calculating fee amounts, populations shall be determined
using the most recent federal decennial census.

Each
application for the revision or reissuance of a permit shall be
accompanied by a nonrefundable fee of two hundred fifty dollars.

(H)(1)
Prior to the commencement of well pad construction and prior to the
issuance of a permit to drill a proposed horizontal well or a
proposed well that is to be located in an urbanized area, the
division shall conduct a site review to identify and evaluate any
site-specific terms and conditions that may be attached to the
permit. At the site review, a representative of the division shall
consider fencing, screening, and landscaping requirements, if any,
for similar structures in the community in which the well is proposed
to be located. The terms and conditions that are attached to the
permit shall include the establishment of fencing, screening, and
landscaping requirements for the surface facilities of the proposed
well, including a tank battery of the well.

(2)
Prior to the issuance of a permit to drill a proposed well, the
division shall conduct a review to identify and evaluate any
site-specific terms and conditions that may be attached to the permit
if the proposed well will be located in a one-hundred-year floodplain
or within the five-year time of travel associated with a public
drinking water supply.

(I)
A permit shall be issued by the chief in accordance with this
chapter. A permit issued under this section for a well that is or is
to be located in an urbanized area shall be valid for twelve months,
and all other permits issued under this section shall be valid for
twenty-four months.

(J)
An applicant or a permittee, as applicable, shall submit to the chief
an update of the information that is required under division
(A)(8)(a) of this section if any of that information changes prior to
commencement of production operations.

(K)
A permittee or a permittee's authorized representative shall notify
an inspector from the division at least twenty-four hours, or another
time period agreed to by the chief's authorized representative, prior
to the commencement of well pad construction and of drilling,
reopening, converting, well stimulation, or plugback operations.

Sec.
1509.07.
(A)(1)(a)
Except as provided in division (A)(1)(b) or (A)(2) of this section,
an owner of any well, except an exempt Mississippian well or an
exempt domestic well, shall obtain liability insurance coverage from
a company authorized or approved to do business in this state in an
amount of not less than one million dollars bodily injury coverage
and property damage coverage to pay damages for injury to persons or
damage to property caused by the drilling, operation, or plugging of
all the owner's wells in this state. However, if any well is located
within an urbanized area, the owner shall obtain liability insurance
coverage in an amount of not less than three million dollars for
bodily injury coverage and property damage coverage to pay damages
for injury to persons or damage to property caused by the drilling,
operation, or plugging of all of the owner's wells in this state.

(b)
A board of county commissioners of a county that is an owner of a
well or a board of township trustees of a township that is an owner
of a well may elect to satisfy the liability coverage requirements
specified in division (A)(1)(a) of this section by participating in a
joint self-insurance pool in accordance with the requirements
established under section 2744.081 of the Revised Code. Nothing in
division (A)(1)(b) of this section shall be construed to allow an
entity, other than a county or township, to participate in a joint
self-insurance pool to satisfy the liability coverage requirements
specified in division (A)(1)(a) of this section.

(2)
An owner of a horizontal well shall obtain liability insurance
coverage from an insurer authorized to write such insurance in this
state or from an insurer approved to write such insurance in this
state under section 3905.33 of the Revised Code in an amount of not
less than five million dollars bodily injury coverage and property
damage coverage to pay damages for injury to persons or damage to
property caused by the production operations of all the owner's wells
in this state. The insurance policy shall include a reasonable level
of coverage available for an environmental endorsement.

(3)
An owner shall maintain the coverage required under division (A)(1)
or (2) of this section until all the owner's wells are plugged and
abandoned or are transferred to an owner who has obtained insurance
as required under this section and who is not under a notice of
material and substantial violation or under a suspension order. The
owner shall provide proof of liability insurance coverage to the
chief of the division of oil and gas resources management upon
request. Upon failure of the owner to provide that proof when
requested, the chief may order the suspension of any outstanding
permits and operations of the owner until the owner provides proof of
the required insurance coverage.

(B)(1)
Except as otherwise provided in this section, an owner of any well,
before being issued a permit under section 1509.06 of the Revised
Code or before operating or producing from a well, shall execute and
file with the division of oil and gas resources management a surety
bond conditioned on compliance with the restoration requirements of
section 1509.072, the plugging requirements of section 1509.12, the
permit provisions of section 1509.13 of the Revised Code, and all
rules and orders of the chief relating thereto, in an amount set by
rule of the chief.

(2)
The owner may deposit with the chief, instead of a surety bond, cash
in an amount equal to the surety bond as prescribed pursuant to this
section or negotiable certificates of deposit or irrevocable letters
of credit, issued by any bank organized or transacting business in
this state, having a cash value equal to or greater than the amount
of the surety bond as prescribed pursuant to this section. Cash or
certificates of deposit shall be deposited upon the same terms as
those upon which surety bonds may be deposited. If the owner deposits
cash, the cash shall be credited to the performance cash bond refunds
fund created in section 1501.16 of the Revised Code. If the owner
deposits certificates of deposit, the chief shall require the bank
that issued any such certificate to pledge securities of a cash value
equal to the amount of the certificate that is in excess of the
amount insured by the federal deposit insurance corporation. The
securities shall be security for the repayment of the certificate of
deposit.

Upon
a deposit of cash, certificates of deposit, or letters of credit with
the chief, the chief shall hold them in trust for the purposes for
which they have been deposited.

(3)

Instead of a surety bond, the chief may accept proof of financial
responsibility consisting of a sworn financial statement showing a
net financial worth within this state equal to twice the amount of
the bond for which it substitutes and, as may be required by the
chief, a list of producing properties of the owner within this state
or other evidence showing ability and intent to comply with the law
and rules concerning restoration and plugging that may be required by
rule of the chief. The owner of an exempt Mississippian well is not
required to file scheduled updates of the financial documents, but
shall file updates of those documents if requested to do so by the
chief. The owner of a nonexempt Mississippian well shall file updates
of the financial documents in accordance with a schedule established
by rule of the chief. The chief, upon determining that an owner for
whom the chief has accepted proof of financial responsibility instead
of bond cannot demonstrate financial responsibility, shall order that
the owner execute and file a bond or deposit cash, certificates of
deposit, or irrevocable letters of credit as required by this section
for the wells specified in the order within ten days of receipt of
the order. If the order is not complied with, all wells of the owner
that are specified in the order and for which no bond is filed or
cash, certificates of deposit, or letters of credit are deposited
shall be plugged. No owner shall fail or refuse to plug such a well.
Each day on which such a well remains unplugged thereafter
constitutes a separate offense.

(4)

The surety bond provided for in this section shall be executed by a
surety company authorized to do business in this state.

The
chief shall not approve any bond until it is personally signed and
acknowledged by both principal and surety, or as to either by the
principal's or surety's attorney in fact, with a certified copy of
the power of attorney attached thereto. The chief shall not approve a
bond unless there is attached a certificate of the superintendent of
insurance that the company is authorized to transact a fidelity and
surety business in this state.

All
bonds shall be given in a form to be prescribed by the chief and
shall run to the state as obligee.

(5)
(4)

An owner of an exempt Mississippian well or an exempt domestic well,
in lieu of filing a surety bond, cash in an amount equal to the
surety bond, certificates of deposit,

or

irrevocable letters of credit
,
or a sworn financial statement
,
may file a one-time fee of fifty dollars, which shall be deposited in
the oil and gas well plugging fund created in section 1509.071 of the
Revised Code.

(C)
An owner, operator, producer, or other person shall not operate a
well or produce from a well at any time if the owner, operator,
producer, or other person has not satisfied the requirements
established in this section.

Sec.
1509.071.
(A)
When the chief of the division of oil and gas resources management
finds that an owner has failed to comply with a final nonappealable
order issued or compliance agreement entered into under section
1509.04, the restoration requirements of section 1509.072, plugging
requirements of section 1509.12, or permit provisions of section
1509.13 of the Revised Code, or rules and orders relating thereto,
the chief shall make a finding of that fact and declare any surety
bond filed to ensure compliance with those sections and rules
forfeited in the amount set by rule of the chief. The chief thereupon
shall certify the total forfeiture to the attorney general, who shall
proceed to collect the amount of the forfeiture. In addition, the
chief may require an owner, operator, producer, or other person who
forfeited a surety bond to post a new surety bond in the amount of
fifteen thousand dollars for a single well, thirty thousand dollars
for two wells, or fifty thousand dollars for three or more wells.

In
lieu of total forfeiture, the surety or owner, at the surety's or
owner's option, may cause the well to be properly plugged and
abandoned and the area properly restored or pay to the treasurer of
state the cost of plugging and abandonment.

(B)(1)
All moneys collected because of forfeitures of bonds as provided in
this section shall be deposited in the state treasury to the credit
of the oil and gas well fund created in section 1509.02 of the
Revised Code.

For
purposes of promoting the competent management and conservation of
the state's oil and natural gas resources and the proper and lawful
plugging of historic oil and gas wells for which there is no known
responsible owner, the chief annually shall spend not less than
thirty per cent of the revenue credited to the oil and gas well fund
during the previous fiscal year for both of the following purposes:

(a)
In accordance with division (E) of this section, to plug orphaned
wells or to restore the land surface properly as required in section
1509.072 of the Revised Code;

(b)
In accordance with division (F) of this section, to correct
conditions that the chief reasonably has determined are causing
imminent health or safety risks at an orphaned well or associated
with a well for which the owner has not initiated a corrective action
within a reasonable period of time as determined by the chief after
the chief has attempted to notify the owner.

(2)
Expenditures from the fund shall be made only for lawful purposes. In
addition, expenditures from the fund shall not be made to purchase
real property or to remove a structure in order to access a well.

The
director of budget and management, in consultation with the chief,
shall establish an accounting code for purposes of tracking
expenditures made as required under this division.

(3)
The oil and gas well fund shall not be used for any purpose not
specified in law.

(C)(1)
If a landowner discovers a well on the landowner's real property and
the landowner is not the owner of the well, the landowner may report
the existence of the well in writing to the chief.

(2)
If the chief receives a written report from a landowner of the
discovery of a well previously unknown to the division, the chief
shall inspect the well not later than thirty days after the date of
receipt of the landowner's report.

(3)
The chief shall establish a scoring matrix for use in determining the
priority of plugging wells or restoring land surfaces at orphaned
well sites for purposes of this section.

In establishing the criteria for the scoring matrix, the chief shall
consider the proximity of the orphaned well site to an injection
well.

The matrix shall include a classification system that categorizes
orphaned wells as high priority, medium priority, and low priority.

(4)
The chief shall use the matrix developed under division (C)(3) of
this section to prioritize plugging and land restoration projects
under this section. The chief may add additional orphaned wells to a
project regardless of classification.

(D)(1)

After

Except
as provided in division (E)(2)(a) of this section, after
determining
that a well is an orphaned well, the chief shall do all of the
following:

(a)
Make a reasonable attempt to determine from the records in the office
of the county recorder of the county in which the well is located the
identity of the current owner of the land on which the well is
located, the identity of each person owning a right or interest in
the oil or gas mineral interests, and the identities of the persons
having a lien upon any of the equipment appurtenant to the well. For
purposes of division (D)(1)(a) of this section, the chief is not
required to review records in the office of the county recorder that
are older than forty years from the date on which the chief made the
determination that the well is an orphaned well.

(b)
Mail notice to each person identified in division (D)(1)(a) of this
section;

(c)
Include in the notice to each person having a lien upon any equipment
appurtenant to the well, a statement informing the person that the
well is to be plugged and offering the person the opportunity to
remove that equipment from the well site at the person's own expense
in order to avoid forfeiture of the equipment to this state;

(d)
Publish notice in a newspaper of general circulation in the county
where the well is located that the well is to be plugged or post the
notice on the department of natural resources web site.

(2)
If the current address of a person identified in division (D)(1)(a)
of this section cannot be determined, or if a notice provided by mail
to a person under division (D)(1)(b) of this section is returned
undeliverable, the notice published under division (D)(1)(d) of this
section constitutes sufficient notice to the person.

(3)
If none of the persons described in division (D)(1)(a) of this
section removes equipment from the well within thirty days after the
mailing of the notice or publication or posting of notice described
in division (D)(1)(d) of this section, whichever is later, all
equipment appurtenant to the well is hereby declared to be forfeited
to this state without compensation and without the necessity for any
action by the state for use to defray the cost of plugging the well
and restoring the land surface at the well site.

(E)
The chief may expend money from the oil and gas well fund for the
purpose of division (B)(1)(a) of this section, and such expenditures
shall be made in accordance with either of the following:

(1)
The chief may make expenditures pursuant to contracts entered into by
either the chief or another agency of the state with persons who
agree to furnish the materials, equipment, work, and labor as
specified and provided in such a contract for activities associated
with the restoration or plugging of an orphaned well as determined by
the chief. If another agency of the state enters into the contract,
the chief shall prepare the scope of work for the restoration or
plugging of the well. The activities may include excavation to
uncover a well, methods to locate a well, analyzing the well,
stabilizing or other work conducted prior to plugging the well,
drilling out or cleanout of wellbores to remove material from a well,
plugging operations, installation of vault and vent systems,
including associated engineering certifications and permits, removal
of associated equipment, restoration of property, replugging of
previously plugged orphaned wells or wells for which final
restoration was completed under section 1509.072 of the Revised Code
and rules adopted under it, and repair of damage to property that is
caused by such activities. The chief may make expenditures for
salaries, maintenance, equipment, or other administrative purposes,
for costs directly attributed to locating, analyzing, stabilizing,
designing, plugging, remediating, or restoring an orphaned well, and
for determining if a well is an orphaned well.

Agents
or employees of persons contracting with the chief to locate,
analyze, stabilize, design, plug, remediate, or restore a well may
enter upon any land, public or private, on which the well is located,
or on adjacent parcels needed for access, for the purpose of
performing the work. Prior to such entry, the chief shall give to the
following persons written notice of the existence of a contract to
locate, analyze, stabilize, design, plug, remediate, or restore a
well, the names of the persons with whom the contract is made, and
the date that the project will commence: the owner of the well, the
owner of the land upon which the well is located, the owner of the
land of an adjacent parcel that will be entered upon, and, if the
well is located in the same township as or in a township adjacent to
the excavations and workings of a mine and the owner or lessee of
that mine has provided written notice identifying those townships to
the chief at any time during the immediately preceding three years,
the owner or lessee of the mine. The chief may include in the notice
to the owner or lessee of the mine additional information, such as
authorization to plug an orphaned well under section 1509.151 of the
Revised Code.

(2)(a)
The owner of the land on which at least one orphaned well is located
who
either
discovers the orphaned well or who
has
received notice under division (D)(1)(b) of this section may plug any
such orphaned well and be reimbursed by the division of oil and gas
resources management for the reasonable cost of plugging such wells.
In order to plug the orphaned wells, the landowner shall submit an
application to the chief on a form prescribed by the chief and
approved by the technical advisory council on oil and gas created in
section 1509.38 of the Revised Code. The application, at a minimum,
shall require the landowner to provide the same information as is
required to be included in the application for a permit to plug and
abandon under section 1509.13 of the Revised Code.

The
application shall be accompanied by a copy of a proposed contract to
plug and abandon the orphaned wells prepared by a contractor
regularly engaged in the business of plugging oil and gas wells. The
proposed contract shall require the contractor to furnish all of the
materials, equipment, work, and labor necessary to plug the orphaned
wells properly and restore the site including the removal of all
associated equipment and shall specify the price for doing the work.
The contractor shall be insured

in the same amounts required of the contractor when completing work
pursuant to contracts entered into under division (E)(1) of this
section. The application shall document how the contractor intends to
comply with all applicable rules, codes, and laws governing human
health, safety, and the environment
.

In
the case of a landowner who discovers one or more orphaned wells on
the land, the chief need not fulfill the notice requirements
specified in division (D)(1) of this section, except the chief shall
publish notice in a newspaper of general circulation in the county
where the well is located that the well is to be plugged or post the
notice on the department of natural resources web site.

Expenditures
made under division (E)(2)(a) of this section shall be consistent
with the expenditures for activities described in division (E)(1) of
this section. In addition, expenditures made under division (E)(2) of
this section are not subject to section 127.16 of the Revised Code.
The application constitutes an application for a permit to plug the
well for the purposes of section 1509.13 of the Revised Code.

(b)
Within thirty days after receiving an application and accompanying
proposed contract under division (E)(2)(a) of this section, the chief
shall determine whether the plugging would comply with the applicable
requirements of this chapter and applicable rules adopted and orders
issued under it and whether the cost of the plugging under the
proposed contract is reasonable. If the chief determines that the
proposed plugging would comply with those requirements and that the
proposed cost of the plugging is reasonable, the chief shall notify
the landowner of that determination and issue to the landowner a
permit to plug the well under section 1509.13 of the Revised Code.
The chief may disapprove an application submitted under division
(E)(2)(a) of this section if the chief determines that the proposed
plugging would not comply with the applicable requirements of this
chapter and applicable rules adopted and orders issued under it, that
the cost of the plugging under the proposed contract is unreasonable,
or that the proposed contract is not a bona fide, arm's length
contract.

(c)
After receiving the chief's notice of the approval of the application
and permit to plug and abandon a well under division (E)(2)(b) of
this section, the landowner may enter into the proposed contract to
plug the well.

(d)
Upon determining that the plugging has been completed in compliance
with the applicable requirements of this chapter and applicable rules
adopted and orders issued under it, the chief shall pay the
contractor for the cost of the plugging and restoration as set forth
in the proposed contract approved by the chief and changes or costs
approved by the chief. The payment shall be paid from the oil and gas
well fund. The chief shall only make payments for purposes of
division (E)(2) of this section pursuant to a proper invoice as
defined under section 125.01 of the Revised Code.

(e)
If the chief determines that the plugging was not completed in
accordance with the applicable requirements, the chief shall not pay
the contractor or landowner for the cost of the plugging.

(f)
If any equipment was removed from the well during the plugging and
sold, the chief shall deduct the sale amount of the equipment from
the payment to the contractor.

(g)
Changes made to a contract executed under division (E)(2) of this
section due to unanticipated conditions may be presented to the chief
in the form of a written request for approval of the additional costs
prior to completion of the work. The chief shall determine if the
changes are necessary to comply with this chapter and rules adopted
and orders issued under it and if the cost of the changes are
reasonable. The chief shall provide to the contractor a written
decision regarding the proposed changes. If the chief determines that
the changes are not necessary or that the costs are not reasonable,
the chief may either deny the request or establish the amount of the
cost that the chief approves. Work completed prior to receipt of
written approval from the chief is not eligible for payment, unless
waived by the chief.

(3)
The chief may establish an annual limit on the number of wells that
may be plugged under division (E)(2) of this section or an annual
limit on the expenditures to be made under that division. The chief
may reject an application submitted under division (E)(2) of this
section if the chief determines that the plugging of other wells take
priority.

(4)
As used in division (E)(2) of this section, "plug" and
"plugging" include the plugging of the well, replugging of
a previously plugged orphaned well or a well for which final
restoration was completed under section 1509.072 of the Revised Code
and rules adopted under it, drilling out or cleanout of a well bore
to remove material from a well, installation of casings, installation
of a vault and vent, restoration, and the restoration of the land
surface disturbed by the plugging.

(F)(1)
Expenditures from the oil and gas well fund for the purpose of
division (B)(1)(b) of this section may be made pursuant to contracts
entered into by either the chief or another agency of the state with
persons who agree to furnish the materials, equipment, work, and
labor as specified and provided in such a contract. The competitive
bidding requirements of Chapter 153. of the Revised Code do not apply
if the chief reasonably determines that a situation exists requiring
immediate action for the correction of the applicable health or
safety risk. A contract or purchase of materials for purposes of
addressing the emergency situation is not subject to division (B) of
section 127.16 of the Revised Code. The chief, designated
representatives of the chief, and agents or employees of persons
contracting with the chief to locate, analyze, stabilize, design,
plug, remediate, or restore a well under this division may enter upon
any land, public or private, on which the well is located, or on
parcels needed for access, for the purpose of performing the work.

(2)
The chief shall issue an order that requires the owner of a well to
pay the actual documented costs of a corrective action that is
described in division (B)(1)(b) of this section concerning the well.
The chief shall transmit the money so recovered to the treasurer of
state who shall deposit the money in the state treasury to the credit
of the oil and gas well fund.

(G)
Contracts entered into by either the chief or another agency of the
state under this section are not subject to any of the following:

(1)
Chapter 4115. of the Revised Code;

(2)
Chapter 153. of the Revised Code;

(3)
Section 4733.17 of the Revised Code.

(H)
The owner of land on which a well is located who has received notice
under division (D)(1)(b) of this section, in lieu of plugging the
well in accordance with division (E)(2) of this section, may cause
ownership of the well to be transferred in accordance with section
1509.31 of the Revised Code.

If
a well is transferred, the owner to whom it is transferred shall
comply with this chapter and rules adopted under it and shall take
title to and possession of the equipment appurtenant to the well that
has been identified by the chief as having been abandoned by the
former owner of the well.

(I)
The chief may engage in cooperative projects under this section with
any agency of this state, another state, or the United States; any
other governmental agencies; any state university or college as
defined in section 3345.27 of the Revised Code; or a nonprofit
corporation that is exempt from federal income taxation under section
501(c)(3) of the "Internal Revenue Code of 1986," 26 U.S.C.
1, as amended. A contract entered into for purposes of a cooperative
project is not subject to division (B) of section 127.16 of the
Revised Code.

(J)(1)
On or before the close of each calendar quarter, the chief shall
submit a written report to the technical advisory council established
under section 1509.38 of the Revised Code describing the efforts of
the division of oil and gas resources management to plug orphaned
wells during the immediately preceding calendar quarter. The chief
also shall include in the report all of the following information:

(a)
The total number of known orphaned wells in the state and the total
number in each county of the state;

(b)
The total number of newly discovered orphaned wells during the
immediately preceding calendar quarter;

(c)
The total number of wells plugged in accordance with this section
during the immediately preceding calendar quarter;

(d)
The total number of wells plugged in accordance with this section and
the estimated average and indirect costs of plugging activities
conducted under this section prior to the date of the report;

(e)
The number of wells approved for plugging in accordance with this
section and the estimated average and indirect costs of plugging
activities conducted under this section during the immediately
preceding calendar quarter.

(2)
Not later than the thirty-first day of March of each year, the chief
and the technical advisory council shall jointly provide a report
containing, at a minimum, the information required to be included in
the quarterly reports during the previous one-year period to all of
the following:

(a)
The speaker of the house of representatives;

(b)
The president of the senate;

(c)
The chair of the committee of the house of representatives
responsible for energy and natural resources issues;

(d)
The chair of the committee of the senate responsible for energy and
natural resources issues.

(K)(1)
Notwithstanding any section of the Revised Code to the contrary, the
division of oil and gas resources management, on behalf of the state,
shall own the right to carbon credits for any orphaned well plugged
using state or federal money.

(2)
The chief may enter into agreements to obtain or to sell carbon
credits. The chief may use money from the sale of carbon credits for
the purposes established in this section.

Sec.
1509.13.
(A)(1)
Except as otherwise provided in division (A)(2) of this section and
division (E)(1) of section 1509.071 of the Revised Code, no person
shall plug and abandon a well without having a permit to do so issued
by the chief of the division of oil and gas resources management. The
permit shall be issued by the chief in accordance with this chapter
and shall be valid for a period of twenty-four months from the date
of issue.

(2)
The holder of a valid permit issued under section 1509.06 of the
Revised Code may receive approval from an oil and gas resources
inspector to plug and abandon the well associated with that permit,
without obtaining the permit required under division (A) of this
section, if either of the following apply:

(a)
The well was drilled to total depth and the well cannot or will not
be completed.

(b)
The well is a lost hole or dry hole.

(3)
A permit holder plugging a well pursuant to division (A)(2)(a) of
this section shall plug the well within thirty days of receipt of
approval from the oil and gas resources inspector.

(4)
A permit holder plugging a well pursuant to division (A)(2)(b) of
this section shall plug the well immediately after determining that
the well is a lost hole or dry hole in accordance with rules adopted
under this chapter.

(B)
The application for a permit to plug and abandon shall be filed as
many days in advance as will be necessary for an oil and gas
resources inspector or, if the well is located in a coal bearing
township, both a deputy mine inspector and an oil and gas resources
inspector to be present at the plugging. The application shall be
filed with the chief upon a form that the chief prescribes and shall
contain the following information:

(1)
The name and address of the applicant;

(2)
The signature of the applicant or the applicant's authorized agent.
When an authorized agent signs an application, it shall be
accompanied by a certified copy of the appointment as that agent.

(3)
The location of the well identified by section or lot number, city,
village, township, and county;

(4)
Designation of well by name and number;

(5)
The total depth of the well to be plugged;

(6)
The date and amount of last production from the well;

(7)
Other information that the chief may require.

(C)
Unless waived by an oil and gas resources inspector, the owner of a
well or the owner's authorized representative shall notify an oil and
gas resources inspector at least twenty-four hours prior to the
commencement of the plugging of a well. No well shall be plugged and
abandoned without an oil and gas resources inspector present unless
permission has been granted by the chief. The owner of a well that
has produced oil or gas shall give written notice at the same time to
the owner of the land upon which the well is located and to all
lessors that receive gas from the well pursuant to an agreement. If
the well penetrates or passes within one hundred feet of the
excavations and workings of a mine, the owner of the well shall give
written notice to the owner or lessee of that mine of the intention
to abandon the well and of the time when the owner of the well will
be prepared to commence plugging it.

(D)
(D)(1)

An applicant may file a request with the chief for expedited review
of an application for a permit to plug and abandon a well.

The chief may refuse to accept a request for expedited review if, in
the chief's judgment, acceptance of the request will prevent the
issuance, within twenty-one days of filing, of permits for which
applications filed under section 1509.06 of the Revised Code are
pending.

In addition to a complete application for a permit that meets the
requirements of this section, a request for expedited review shall be
accompanied by a nonrefundable filing fee of five hundred dollars
unless the chief has ordered the applicant to plug and abandon the
well. When a request for expedited review is filed, the chief shall
immediately begin to process the application and shall issue a permit
within seven days of the filing of the request unless the chief, by
order, denies the application.

(2)
No owner shall apply for an expedited permit under this section more
than ten times within a calendar year. However, if an emergency
requires that an expedited permit be issued, as determined by the
chief, an owner that is otherwise prohibited from obtaining an
expedited permit under this division may apply for an expedited
permit and the chief may so issue it.

(E)(1)
Except as otherwise provided in division (E)(2) of this section, any
person undertaking the plugging of a well for which a permit has been
issued under this section shall obtain insurance for bodily injury
coverage and property damage coverage in the amount established under
section 1509.07 of the Revised Code to pay for damages or injury to
property or person, including damages caused by the plugging of the
well. The person shall electronically submit proof of insurance to
the chief upon the chief's request.

(2)
Division (E)(1) of this section does not apply to a person already
required to maintain an insurance policy under section 1509.07 of the
Revised Code.

(F)
This section does not apply to a well plugged or abandoned in
compliance with section 1571.05 of the Revised Code.

Sec.
1509.22.
(A)
Except when acting in accordance with section 1509.226 of the Revised
Code, no person shall place or cause to be placed in ground water or
in or on the land or discharge or cause to be discharged in surface
water brine, crude oil, natural gas, or other fluids associated with
the exploration, development, well stimulation, production
operations, or plugging of oil and gas resources that causes or could
reasonably be anticipated to cause damage or injury to public health
or safety or the environment.

(B)(1)
No person shall store or dispose of brine in violation of a plan
approved under division (A) of section 1509.222 or section 1509.226
of the Revised Code, in violation of a resolution submitted under
section 1509.226 of the Revised Code, or in violation of rules or
orders applicable to those plans or resolutions.

(2)(a)
On and after January 1, 2014, no person shall store, recycle, treat,
process, or dispose of in this state brine or other waste substances
associated with the exploration, development, well stimulation,
production operations, or plugging of oil and gas resources without
an order or a permit issued under this section or section 1509.06 or
1509.21 of the Revised Code or rules adopted under any of those
sections. For purposes of division (B)(2)(a) of this section, a
permit or other form of authorization issued by another agency of the
state or a political subdivision of the state shall not be considered
a permit or order issued by the chief of the division of oil and gas
resources management under this chapter.

(b)
Division (B)(2)(a) of this section does not apply to a person that
disposes of such waste substances other than brine in accordance with
Chapter 3734. of the Revised Code and rules adopted under it.

(C)
The chief shall adopt rules regarding storage, recycling, treatment,
processing, and disposal of brine and other waste substances. The
rules shall establish procedures and requirements in accordance with
which a person shall apply for a permit or order for the storage,
recycling, treatment, processing, or disposal of brine and other
waste substances that are not subject to a permit issued under
section 1509.06 or 1509.21 of the Revised Code and in accordance with
which the chief may issue such a permit or order. An application for
such a permit shall be accompanied by a nonrefundable fee of two
thousand five hundred dollars.

The
storage, recycling, treatment, processing, and disposal of brine and
other waste substances and the chief's rules relating to storage,
recycling, treatment, processing, and disposal are subject to all of
the following standards:

(1)
Brine from any well except an exempt Mississippian well shall be
disposed of only as follows:

(a)
By injection into an underground formation, including annular
disposal if approved by rule of the chief, which injection shall be
subject to division (D) of this section;

(b)
By surface application in accordance with section 1509.226 of the
Revised Code;

(c)
In association with a method of enhanced recovery as provided in
section 1509.21 of the Revised Code;

(d)
In any other manner not specified in divisions (C)(1)(a) to (c) of
this section that is approved by a permit or order issued by the
chief.

(2)
Brine from exempt Mississippian wells shall not be discharged
directly into the waters of the state.

(3)
Muds, cuttings, and other waste substances shall not be disposed of
in violation of this chapter or any rule adopted under it.

(4)
Pits or steel tanks shall be used as authorized by the chief for
containing brine and other waste substances resulting from, obtained
from, or produced in connection with drilling, well stimulation,
reworking, reconditioning, plugging back, or plugging operations. The
pits and steel tanks shall be constructed and maintained to prevent
the escape of brine and other waste substances.

(5)
A dike or pit may be used for spill prevention and control. A dike or
pit so used shall be constructed and maintained to prevent the escape
of brine and crude oil, and the reservoir within such a dike or pit
shall be kept reasonably free of brine, crude oil, and other waste
substances.

(6)
Impoundments constructed utilizing a synthetic liner pursuant to the
division's specifications may be used for the temporary storage of
waste substances used in the construction, stimulation, or plugging
of a well.

(7)
No pit or dike shall be used for the temporary storage of brine or
other waste substances except in accordance with divisions (C)(4) and
(5) of this section.

(8)
No pit or dike shall be used for the ultimate disposal of brine or
other liquid waste substances.

(D)(1)
No person, without first having obtained a permit from the chief,
shall inject brine or other waste substances resulting from, obtained
from, or produced in connection with oil or gas drilling,
exploration, or production into an underground formation unless a
rule of the chief expressly authorizes the injection without a
permit. The permit shall be in addition to any permit required by
section 1509.05 of the Revised Code, and the permit application shall
be accompanied by a permit fee of one thousand dollars. The chief
shall adopt rules in accordance with Chapter 119. of the Revised Code
regarding the injection into wells of brine and other waste
substances resulting from, obtained from, or produced in connection
with oil or gas drilling, exploration, or production. The rules shall
include provisions regarding all of the following:

(a)
Applications for and issuance of the permits required by this
division;

(b)
Entry to conduct inspections and to examine and copy records to
ascertain compliance with this division and rules, orders, and terms
and conditions of permits adopted or issued under it;

(c)
The provision and maintenance of information through monitoring,
recordkeeping, and reporting. In addition, the rules shall require
the owner of an injection well who has been issued a permit under
division (D) of this section to quarterly submit electronically to
the chief information concerning each shipment of brine or other
waste substances received by the owner for injection into the well.

(d)
The provision and electronic reporting quarterly of information
concerning brine and other waste substances from a transporter that
is registered under section 1509.222 of the Revised Code prior to the
injection of the transported brine or other waste substances;

(e)
Any other provisions in furtherance of the goals of this section and
the Safe Drinking Water Act.

(2)
The chief may adopt rules in accordance with Chapter 119. of the
Revised Code authorizing tests to evaluate whether fluids or carbon
dioxide may be injected in a reservoir and to determine the maximum
allowable injection pressure, which shall be conducted in accordance
with methods prescribed in the rules or in accordance with conditions
of the permit. In addition, the chief may adopt rules that do both of
the following:

(a)
Establish the total depth of a well for which a permit has been
applied for or issued under this division;

(b)
Establish requirements and procedures to protect public health and
safety.

(3)
To implement the goals of the Safe Drinking Water Act, the chief
shall not issue a permit for the injection of brine or other waste
substances resulting from, obtained from, or produced in connection
with oil or gas drilling, exploration, or production unless the chief
concludes that the applicant has demonstrated that the injection will
not result in the presence of any contaminant in ground water that
supplies or can reasonably be expected to supply any public water
system, such that the presence of the contaminant may result in the
system's not complying with any national primary drinking water
regulation or may otherwise adversely affect the health of persons.

(4)
The chief may issue an order to the owner of a well in existence on
September 10, 2012, to make changes in the operation of the well in
order to correct problems or to address safety concerns.

(5)
This division and rules, orders, and terms and conditions of permits
adopted or issued under it shall be construed to be no more stringent
than required for compliance with the Safe Drinking Water Act unless
essential to ensure that underground sources of drinking water will
not be endangered.

(E)
The owner holding a permit, or an assignee or transferee who has
assumed the obligations and liabilities imposed by this chapter and
any rules adopted or orders issued under it pursuant to section
1509.31 of the Revised Code, and the operator of a well shall be
liable for a violation of this section or any rules adopted or orders
or terms or conditions of a permit issued under it.

(F)
An owner shall replace the water supply of the holder of an interest
in real property who obtains all or part of the holder's supply of
water for domestic, agricultural, industrial, or other legitimate use
from an underground or surface source where the supply has been
substantially disrupted by contamination, diminution, or interruption
proximately resulting from the owner's oil or gas operation, or the
owner may elect to compensate the holder of the interest in real
property for the difference between the fair market value of the
interest before the damage occurred to the water supply and the fair
market value after the damage occurred if the cost of replacing the
water supply exceeds this difference in fair market values. However,
during the pendency of any order issued under this division, the
owner shall obtain for the holder or shall reimburse the holder for
the reasonable cost of obtaining a water supply from the time of the
contamination, diminution, or interruption by the operation until the
owner has complied with an order of the chief for compliance with
this division or such an order has been revoked or otherwise becomes
not effective. If the owner elects to pay the difference in fair
market values, but the owner and the holder have not agreed on the
difference within thirty days after the chief issues an order for
compliance with this division, within ten days after the expiration
of that thirty-day period, the owner and the chief each shall appoint
an appraiser to determine the difference in fair market values,
except that the holder of the interest in real property may elect to
appoint and compensate the holder's own appraiser, in which case the
chief shall not appoint an appraiser. The two appraisers appointed
shall appoint a third appraiser, and within thirty days after the
appointment of the third appraiser, the three appraisers shall hold a
hearing to determine the difference in fair market values. Within ten
days after the hearing, the appraisers shall make their determination
by majority vote and issue their final determination of the
difference in fair market values. The chief shall accept a
determination of the difference in fair market values made by
agreement of the owner and holder or by appraisers under this
division and shall make and dissolve orders accordingly. This
division does not affect in any way the right of any person to
enforce or protect, under applicable law, the person's interest in
water resources affected by an oil or gas operation.

(G)
In any action brought by the state for a violation of division (A) of
this section involving any well at which annular disposal is used,
there shall be a rebuttable presumption available to the state that
the annular disposal caused the violation if the well is located
within a one-quarter-mile radius of the site of the violation.

(H)(1)
There is levied on the owner of an injection well who has been issued
a permit under division (D) of this section the following fees:

(a)
Five cents per barrel of each substance that is delivered to a well
to be injected in the well when the substance is produced within the
division of oil and gas resources management regulatory district in
which the well is located or within an adjoining oil and gas
resources management regulatory district;

(b)
Twenty cents per barrel of each substance that is delivered to a well
to be injected in the well when the substance is not produced within
the division of oil and gas resources management regulatory district
in which the well is located or within an adjoining oil and gas
resources management regulatory district.

(2)
The maximum number of barrels of substance per injection well in a
calendar year on which a fee may be levied under division (H) of this
section is five hundred thousand. If in a calendar year the owner of
an injection well receives more than five hundred thousand barrels of
substance to be injected in the owner's well and if the owner
receives at least one substance that is produced within the
division's regulatory district in which the well is located or within
an adjoining regulatory district and at least one substance that is
not produced within the division's regulatory district in which the
well is located or within an adjoining regulatory district, the fee
shall be calculated first on all of the barrels of substance that are
not produced within the division's regulatory district in which the
well is located or within an adjoining district at the rate
established in division (H)(2) of this section. The fee then shall be
calculated on the barrels of substance that are produced within the
division's regulatory district in which the well is located or within
an adjoining district at the rate established in division (H)(1) of
this section until the maximum number of barrels established in
division (H)(2) of this section has been attained.

(3)
The owner of an injection well who is issued a permit under division
(D) of this section shall collect the fee levied by division (H) of
this section on behalf of the division of oil and gas resources
management and forward the fee to the division. The chief shall

transmit

deposit

all
money received under division (H) of this section to the
treasurer
of state who shall deposit the money
brine
and waste substances permitting fund, which is created
in
the state treasury

to the credit of the oil and gas well fund created in section 1509.02
of the Revised Code
.
Money in the fund shall be disbursed by the chief to the county
treasurer of the county in which the injection well is located. If
the injection well is located in more than one county, the amount
shall be disbursed equally to the county treasurer of each such
county. The county treasurer shall deposit such money in the county's
general fund
.
The owner of an injection well who collects the fee levied by this
division may retain up to three per cent of the amount that is
collected.

(4)
The chief shall adopt rules in accordance with Chapter 119. of the
Revised Code establishing requirements and procedures for collection
of the fee levied by division (H) of this section.

Sec.
1509.221.
(A)
No person, without first having obtained a permit from the chief of
the division of oil and gas resources management, shall drill a well
or inject a substance into a well for the exploration for or
extraction of minerals or energy, other than oil or natural gas,
including, but not limited to, the mining of sulfur by the Frasch
process, the solution mining of minerals, the in situ combustion of
fossil fuel, or the recovery of geothermal energy to produce electric
power, unless a rule of the chief expressly authorizes the activity
without a permit. The permit shall be in addition to any permit
required by section 1509.05 of the Revised Code. The chief shall
adopt rules in accordance with Chapter 119. of the Revised Code
governing the issuance of permits under this section. The rules shall
include provisions regarding the matters the applicant for a permit
shall demonstrate to establish eligibility for a permit; the form and
content of applications for permits; the terms and conditions of
permits; entry to conduct inspections and to examine and copy records
to ascertain compliance with this section and rules, orders, and
terms and conditions of permits adopted or issued thereunder;
provision and maintenance of information through monitoring,
recordkeeping, and reporting; and other provisions in furtherance of
the goals of this section and the Safe Drinking Water Act. To
implement the goals of the Safe Drinking Water Act, the chief shall
not issue a permit under this section, unless the chief concludes
that the applicant has demonstrated that the drilling, injection of a
substance, and extraction of minerals or energy will not result in
the presence of any contaminant in underground water that supplies or
can reasonably be expected to supply any public water system, such
that the presence of the contaminant may result in the system's not
complying with any national primary drinking water regulation or may
otherwise adversely affect the health of persons. The chief may
issue, without a prior
adjudication

hearing,
orders requiring compliance with this section and rules, orders, and
terms and conditions of permits adopted or issued thereunder. This
section and rules, orders, and terms and conditions of permits
adopted or issued thereunder shall be construed to be no more
stringent than required for compliance with the Safe Drinking Water
Act, unless essential to ensure that underground sources of drinking
water will not be endangered.

(B)
In an action under section 1509.04 or 1509.33 of the Revised Code to
enforce this section, the court shall grant preliminary and permanent
injunctive relief and impose a civil penalty upon the showing that
the person against whom the action is brought has violated, is
violating, or will violate this section or rules, orders, or terms or
conditions of permits adopted or issued thereunder. The court shall
not require, prior to granting such preliminary and permanent
injunctive relief or imposing a civil penalty, proof that the
violation was, is, or will be the result of intentional conduct or
negligence. In any such action, any person may intervene as a
plaintiff upon the demonstration that the person has an interest that
is or may be adversely affected by the activity for which injunctive
relief or a civil penalty is sought.

Sec.
1509.224.
(A)
In addition to any other remedies provided in this chapter, if the
chief of the division of oil and gas resources management has reason
to believe that a pattern of the same or similar violations of any
requirements of section 1509.22, 1509.222, or 1509.223 of the Revised
Code, or any rule adopted thereunder or term or condition of the
registration certificate issued thereunder exists or has existed, and
the violations are caused by the transporter's indifference, lack of
diligence, or lack of reasonable care, or are willfully caused by the
transporter, the chief shall immediately issue an order to the
transporter to show cause why the certificate should not be suspended
or revoked. After the issuance of the order, the chief shall provide
the transporter an opportunity to be heard and to present evidence at
an informal hearing conducted by the chief. If, at the conclusion of
the hearing, the chief finds that such a pattern of violations exists
or has existed, the chief shall issue an order suspending or revoking
the transporter's registration certificate. An order suspending or
revoking a certificate under this section may be appealed under
sections 1509.36 and 1509.37 of the Revised Code, or notwithstanding
any other provision of this chapter, may be appealed directly to the
court of common pleas of
Franklin

the

county

in which the subject of the order originates
.

(B)
Before issuing an order denying a registration certificate; approving
or denying approval of an application for revision of a registered
transporter's plan for disposal; or to implement, administer, or
enforce section 1509.22, 1509.222, 1509.223, 1509.225, or 1509.226 of
the Revised Code and rules and terms and conditions of registration
certificates adopted or issued thereunder pertaining to the
transportation of brine by vehicle and the disposal of brine so
transported, the chief shall issue a preliminary order indicating the
chief's intent to issue a final order. The preliminary order shall
clearly state the nature of the chief's proposed action and the
findings on which it is based and shall state that the preliminary
order becomes a final order thirty days after its issuance unless the
person to whom the preliminary order is directed submits to the chief
a written request for an informal hearing before the chief within
that thirty-day period. At the hearing the person may present
evidence as to why the preliminary order should be revoked or
modified. Based upon the findings from the informal hearing, the
chief shall revoke, issue, or modify and issue the preliminary order
as a final order. A final order may be appealed under sections
1509.36 and 1509.37 of the Revised Code.

Sec.
1509.23.
(A)

Rules
of the chief of the division of oil and gas resources management may
specify practices to be followed in the drilling and treatment of
wells, production of oil and gas, and plugging of wells for
protection of public health or safety or to prevent damage to natural
resources, including specification of the following:

(A)
(1)

Appropriate devices;

(B)
(2)

Minimum distances that wells and other excavations, structures, and
equipment shall be located from water wells, streets, roads,
highways, rivers, lakes, streams, ponds, other bodies of water,
railroad tracks, public or private recreational areas, zoning
districts, and buildings or other structures. Rules adopted under
this division shall not conflict with section 1509.021 of the Revised
Code.

(C)
(3)

Other methods of operation;

(D)
(4)

Procedures, methods, and equipment and other requirements for
equipment to prevent and contain discharges of oil and brine from oil
production facilities and oil drilling and workover facilities
consistent with and equivalent in scope, content, and coverage to
section 311(j)(1)(c) of the "Federal Water Pollution Control Act
Amendments of 1972," 86 Stat. 886, 33 U.S.C.A. 1251, as amended,
and regulations adopted under it. In addition, the rules may specify
procedures, methods, and equipment and other requirements for
equipment to prevent and contain surface and subsurface discharges of
fluids, condensates, and gases.

(E)
(5)

Notifications;

(F)
(6)

Requirements governing the location and construction of fresh water
impoundments that are part of a production operation.

(B)
The chief shall not require an owner of a well to cease producing
from, or limit production from, the well in order to engage in
simultaneous operations on a well pad unless the chief demonstrates
good cause to require the owner to cease production or limit
production.

Sec.
1509.31.
(A)(1)
No person shall operate a well in this state unless the person first
registers with and obtains an identification number from the chief of
the division of oil and gas resources management.

(2)
Whenever the entire interest of an oil and gas lease is assigned or
otherwise transferred, the assignor or transferor shall notify the
holders of the royalty interests, and, if a well or wells exist on
the lease, the division of oil and gas resources management, of the
name and address of the assignee or transferee by certified mail,
return receipt requested, not later than thirty days after the date
of the assignment or transfer. When notice of any such assignment or
transfer is required to be provided to the division, it shall be
provided on a form prescribed and provided by the division and
verified by both the assignor or transferor and by the assignee or
transferee. The notice form applicable to assignments or transfers of
a well to the owner of the surface estate of the tract on which the
well is located shall contain a statement informing the landowner
that the well may require periodic servicing to maintain its
productivity; that, upon assignment or transfer of the well to the
landowner, the landowner becomes responsible for compliance with the
requirements of this chapter and rules adopted under it, including,
without limitation, the proper disposal of brine obtained from the
well, the plugging of the well when it becomes incapable of producing
oil or gas, and the restoration of the well site; and that, upon
assignment or transfer of the well to the landowner, the landowner
becomes responsible for the costs of compliance with the requirements
of this chapter and rules adopted under it and the costs for
operating and servicing the well.

(3)
Notwithstanding division (A)(2) of this section, the assignee or
transferee shall notify the division of oil and gas resources
management of the assignment or transfer if both of the following
apply:

(a)
The assignor or transferor failed to notify the division of the
assignment or transfer as required by division (A)(2) of this
section;

(b)
The assignor or transferor is deceased, dissolved, cannot be located,
or is otherwise incapable of complying with the notification
requirement.

The
assignee or transferee shall notify the division of the assignment or
transfer on a form prescribed and provided by the division. At a
minimum, the form shall require the assignee or transferee to attest
that the assignee or transferee is the owner. The division shall not
charge a fee for such assignment or transfer when notice is provided
in accordance with division (A)(3) of this section.

(B)
When the entire interest of a well is proposed to be assigned or
otherwise transferred to the landowner for use as an exempt domestic
well, the owner who has been issued a permit under this chapter for
the well shall submit to the chief of the division of oil and gas
resources management an application for the assignment or transfer
that contains all documents that the chief requires. The application
for such an assignment or transfer shall be prescribed and provided
by the chief. The chief may approve the application if the
application is accompanied by a release of all of the oil and gas
leases that are included in the applicable formation of the drilling
unit, the release is in a form such that the well ownership merges
with the fee simple interest of the surface tract, and the release is
in a form that may be recorded. However, if the owner of the well
does not release the oil and gas leases associated with the well that
is proposed to be assigned or otherwise transferred or if the fee
simple tract that results from the merger of the well ownership with
the fee simple interest of the surface tract is less than five acres,
the proposed exempt domestic well owner shall post a five thousand
dollar bond with the division prior to the assignment or transfer of
the well to ensure that the well will be properly plugged. The chief,
for good cause, may modify the requirements of this section governing
the assignment or transfer of the interests of a well to the
landowner. Upon the assignment or transfer of the well, the owner of
an exempt domestic well is not subject to the severance tax levied
under section 5749.02 of the Revised Code, but is subject to all
applicable fees established in this chapter.

(C)
The
(C)(1)
Except as otherwise provided in division (C)(2) of this section, the

owner
holding a permit under section 1509.05 of the Revised Code is
responsible for all obligations and liabilities imposed by this
chapter and any rules, orders, and terms and conditions of a permit
adopted or issued under it, and no assignment or transfer by the
owner relieves the owner of the obligations and liabilities until and
unless the assignee or transferee files with the division the
information described in divisions (A)(1), (2), (3), (4), (5), (10),
(11), and (12) of section 1509.06 of the Revised Code;
transferee

obtains
liability insurance coverage required by section 1509.07 of the
Revised Code, except when none is required by that section; and
executes and files a surety bond, negotiable certificates of deposit
or irrevocable letters of credit, or cash, as described in
that

section

1509.07 of the Revised Code
.

Instead of a bond, but only upon acceptance by the chief, the
assignee or transferee may file proof of financial responsibility,
described in section 1509.07 of the Revised Code.

Section 1509.071 of the Revised Code applies to the surety bond,
cash, and negotiable certificates of deposit and irrevocable letters
of credit described in this section. Unless the chief approves a
modification, each assignee or transferee shall operate in accordance
with the plans and information filed by the permit holder pursuant to
section 1509.06 of the Revised Code.

(2)
For purposes of division (C)(1) of this section, the division may
prescribe and provide a form that authorizes the assignor or
transferor to provide on behalf of the assignee or transferee all of
the following:

(a)
The information that is described in divisions (A)(1), (2), (3), (4),
(5), (10), (11), and (12) of section 1509.06 of the Revised Code;

(b)
Proof of liability insurance as required under division (C)(1) of
this section;

(c)
Proof of the filing of a surety bond, negotiable certificates of
deposit or irrevocable letters of credit, or cash as required under
division (C)(1) of this section.

The
form shall be verified and signed by both the assignor or transferor
and by the assignee or transferee. A form submitted under this
division does not relieve the assignor or transferor of the
obligations and liabilities until and unless all of the information
required under division (C)(2) of this section is filed with
division.

(D)
If a mortgaged property that is being foreclosed is subject to an oil
or gas lease, pipeline agreement, or other instrument related to the
production or sale of oil or natural gas and the lease, agreement, or
other instrument was recorded subsequent to the mortgage, and if the
lease, agreement, or other instrument is not in default, the oil or
gas lease, pipeline agreement, or other instrument, as applicable,
has priority over all other liens, claims, or encumbrances on the
property so that the oil or gas lease, pipeline agreement, or other
instrument is not terminated or extinguished upon the foreclosure
sale of the mortgaged property. If the owner of the mortgaged
property was entitled to oil and gas royalties before the foreclosure
sale, the oil or gas royalties shall be paid to the purchaser of the
foreclosed property.

Sec.
1509.36.
Any
person adversely affected by an order by the chief of the division of
oil and gas resources management may appeal to the oil and gas
commission for an order vacating or modifying the order.

Notwithstanding
any provision of the Revised Code to the contrary, a person to whom a
permit is issued by the chief may appeal any of the terms and
conditions included in the permit to the commission. In such an
appeal, no other person may intervene in the appeal before the
commission, except that the commission may allow an amicus curiae to
participate for good cause shown.

The
person so appealing to the commission shall be known as appellant and
the chief shall be known as appellee. Appellant and appellee shall be
deemed to be parties to the appeal.

The
appeal shall be in writing and shall set forth the order complained
of and the grounds upon which the appeal is based. The appeal shall
be filed with the commission within thirty days after the date upon
which the person to whom the order was issued received the order and,
for all other persons adversely affected by the order, within thirty
days after the date of the order complained of. Notice of the filing
of the appeal shall be filed with the chief within three days after
the appeal is filed with the commission.

Upon
the filing of the appeal, the
The

commission
may decide the appeal, in whole or in part, without a hearing when,
in its judgment, it is appropriate to do so. If the commission
decides to hold a hearing, the commission
promptly

shall
fix the time and place at which the hearing on the appeal will be
held, and shall give the appellant and the chief at least ten days'
written notice thereof by mail. The commission may postpone or
continue any hearing upon its own motion or upon application of the
appellant or of the chief.

The
filing of an appeal provided for in this section does not
automatically suspend or stay execution of the order appealed from,
but upon application by the appellant the commission may suspend or
stay the execution pending determination of the appeal upon such
terms as the commission considers proper.

Either
party to the appeal or any interested person who, pursuant to
commission rules has been granted permission to appear, may submit
such evidence as the commission considers admissible.

For
the purpose of conducting a hearing on an appeal, the commission may
require the attendance of witnesses and the production of books,
records, and papers, and it may, and at the request of any party it
shall, issue subpoenas for witnesses or subpoenas duces tecum to
compel the production of any books, records, or papers, directed to
the sheriffs of the counties where the witnesses are found. The
subpoenas shall be served and returned in the same manner as
subpoenas in criminal cases are served and returned. The fees of
sheriffs shall be the same as those allowed by the court of common
pleas in criminal cases. Witnesses shall be paid the fees and mileage
provided for under section 119.094 of the Revised Code. Such fees and
mileage expenses incurred at the request of appellant shall be paid
in advance by the appellant, and the remainder of those expenses
shall be paid out of funds appropriated for the expenses of the
division of oil and gas resources management.

In
case of disobedience or neglect of any subpoena served on any person,
or the refusal of any witness to testify to any matter regarding
which the witness may be lawfully interrogated, the court of common
pleas of the county in which the disobedience, neglect, or refusal
occurs, or any judge thereof, on application of the commission or any
member thereof, shall compel obedience by attachment proceedings for
contempt as in the case of disobedience of the requirements of a
subpoena issued from that court or a refusal to testify therein.
Witnesses at such hearings shall testify under oath, and any member
of the commission may administer oaths or affirmations to persons who
so testify.

If
a hearing occurs and at the request of any party to the appeal, a
record of the testimony and other evidence submitted shall be taken
by an official court reporter at the expense of the party making the
request for the record. The record shall include all of the testimony
and other evidence and the rulings on the admissibility thereof
presented at the hearing. The commission shall pass upon the
admissibility of evidence, but any party may at the time object to
the admission of any evidence and except to the rulings of the
commission thereon, and if the commission refuses to admit evidence
the party offering same may make a proffer thereof, and such proffer
shall be made a part of the record of the hearing.

If
the commission finds that the order appealed from was lawful and
reasonable, it shall make a written order affirming the order
appealed from; if the commission finds that the order was
unreasonable or unlawful, it shall make a written order vacating the
order appealed from and making the order that it finds the chief
should have made. Every order made by the commission shall contain a
written finding by the commission of the facts upon which the order
is based.

Notice
of the making of the order shall be given forthwith to each party to
the appeal by mailing a certified copy thereof to each such party by
certified mail.

The
order of the commission is final unless vacated by the court of
common pleas of
Franklin

the

county
in
an
appeal
which
the subject of the order originates
as
provided for in section 1509.37 of the Revised Code.

Sections 1509.01 to 1509.37 of the Revised Code, providing for
appeals relating to orders by the chief or by the commission, or
relating to rules adopted by the chief, do not constitute the
exclusive procedure that any person who believes the person's rights
to be unlawfully affected by those sections or any official action
taken thereunder must pursue in order to protect and preserve those
rights, nor do those sections constitute a procedure that that person
must pursue before that person may lawfully appeal to the courts to
protect and preserve those rights.

Sec.
1509.37.
Any
party adversely affected by an order of the oil and gas commission
may appeal to the court of common pleas of
Franklin

the

county

in which the subject of the order originates
.
Any party desiring to so appeal shall file with the commission a
notice of appeal designating the order appealed from and stating
whether the appeal is taken on questions of law or questions of law
and fact. A copy of the notice also shall be filed by appellant with
the court and shall be mailed or otherwise delivered to appellee.
Such notices shall be filed and mailed or otherwise delivered within
thirty days after the date upon which appellant received notice from
the commission by certified mail of the making of the order appealed
from. No appeal bond shall be required to make either an appeal on
questions of law or an appeal on questions of law and fact effective.

The
filing of a notice of appeal shall not automatically operate as a
suspension of the order of the commission. If it appears to the court
that an unjust hardship to the appellant will result from the
execution of the commission's order pending determination of the
appeal, the court may grant a suspension of the order and fix its
terms.

Within
fifteen days after receipt of the notice of appeal the commission
shall prepare and file in the court the complete record of
proceedings out of which the appeal arises, including a transcript of
the testimony and other evidence that has been submitted before the
commission. The expense of preparing and transcribing the record
shall be taxed as a part of the costs of the appeal. Appellant shall
provide security for costs satisfactory to the court. Upon demand by
a party the commission shall furnish at the cost of the party
requesting the same a copy of the record. If the complete record is
not filed in the court within the time provided for in this section
either party may apply to the court to have the case docketed, and
the court shall order such record filed.

In
the hearing of the appeal the court is confined to the record as
certified to it by the commission. The court may grant a request for
the admission of additional evidence when satisfied that the
additional evidence is newly discovered and could not with reasonable
diligence have been ascertained prior to the hearing before the
commission. The court shall conduct a hearing on the appeal and shall
give preference to the hearing over all other civil cases
irrespective of the position of the proceedings on the calendar of
the court. The hearing in the court shall proceed as in the trial of
a civil action and the court shall determine the rights of the
parties in accordance with the laws applicable to such an action. At
the hearing counsel may be heard on oral argument, briefs may be
submitted, and evidence introduced if the court has granted a request
for the presentation of additional evidence.

If
the court finds that the order of the commission appealed from was
lawful and reasonable, it shall affirm the order. If the court finds
that the order was unreasonable or unlawful, it shall vacate the
order and make the order that it finds the commission should have
made. The judgment of the court is final unless reversed, vacated, or
modified on appeal.

Sec.
2305.041.
(A)

With
respect to a lease or license by which a right is granted to operate
or to sink or drill wells on land in this state for natural gas or
petroleum and that is recorded in accordance with section 5301.09 of
the Revised Code, an action alleging breach of any express or implied
provision of the lease or license concerning the calculation or
payment of royalties shall be brought within the time period that is
specified in section 1302.98 of the Revised Code.

(B)
An action alleging that a lease has terminated, is no longer in
effect, or has expired shall be brought within ten years after the
cause of action accrued.

(C)

An
action alleging a breach with respect to any other issue that the
lease or license involves shall be brought within the time period
specified in section 2305.06 of the Revised Code.

Sec.
2305.06.
Except
as provided in sections 126.301, 1302.98, 1303.16, 1345.10, and
2305.04

and division (B) of section 2305.041

of the Revised Code, an action upon a specialty or an agreement,
contract, or promise in writing shall be brought within six years
after the cause of action accrued.

Sec.
5577.02.
(A)

No
person shall operate or move a trackless trolley, traction engine,
steam roller, or other vehicle, load, object, or structure, whether
propelled by muscular or motor power, over or upon the improved
public streets, highways, bridges, or culverts in this state, that
weighs in excess of the weights prescribed in sections 5577.01 to
5577.14 of the Revised Code, unless
the

one
of the following applies:

(1)
The
person
has been issued a permit under section 4513.34 of the Revised Code
;

(2)
The person has been issued a permit under section 1509.06 of the
Revised Code, and the person has entered into an agreement concerning
maintenance and safe use of the roads, streets, and highways in
accordance with division (A)(11)(b) of that section. The agreement
shall be considered a permit for purposes of section 4513.34 of the
Revised Code for any vehicle that is operated under the agreement
that does not exceed the maximum vehicle dimensions, weight, and
spacing between axles that is specified in the agreement. For any
vehicle that exceeds the maximum vehicle dimensions, weight, and
spacing between axles that is specified in the agreement, the person
shall obtain a permit under section 4513.34 of the Revised Code with
respect to that vehicle's operation to the extent otherwise required
by law
.

(B)

The
prohibition in this section applies regardless of whether the weight
is moved upon wheels, rollers, or otherwise. Any weight determination
shall include the weight of the vehicle, object, structure,
contrivance, and load.

Sec.
5727.02.
As
used in this chapter, "public utility," "electric
company," "natural gas company," "pipe-line
company," "water-works company," "water
transportation company," or "heating company" does not
include any of the following:

(A)(1)
Except as provided in division (A)(2) of this section, any person
that is engaged in some other primary business to which the supplying
of electricity, heat, natural gas, water, water transportation,
steam, or air to others is incidental.

(2)
For tax year 2009 and each tax year thereafter, a person that is
engaged in some other primary business to which the supplying of
electricity to others is incidental shall be treated as an "electric
company" and a "public utility" for purposes of this
chapter solely to the extent required by section 5727.031 of the
Revised Code.

(3)
For purposes of division (A) of this section and section 5727.031 of
the Revised Code:

(a)
"Supplying of electricity" means generating, transmitting,
or distributing electricity.

(b)
A person that leases to others energy facilities with an aggregate
nameplate capacity in this state of two hundred fifty kilowatts or
less per lease is not supplying electricity to others.

(c)
A person that owns, or leases from another person, energy facilities
with an aggregate nameplate capacity in this state of two hundred
fifty kilowatts or less is not supplying electricity to others,
regardless of whether the owner or lessee engages in net metering as
defined in section 4928.01 of the Revised Code.

(d)
A political subdivision of this state that owns an energy facility is
not supplying electricity to others regardless of the nameplate
capacity of the facility if the primary purpose of the facility is to
supply electricity for the political subdivision's own use. As used
in this division, "political subdivision" means a county,
township, municipal corporation, or any other body corporate and
politic that is responsible for government activities in a geographic
area smaller than that of the state.

(B)
Any person that supplies electricity, natural gas, water, water
transportation, steam, or air to its tenants, whether for a separate
charge or otherwise;

(C)
Any person whose primary business in this state consists of
producing, refining, or marketing petroleum or its products.

(D)
Any person whose primary business in this state consists of producing
or gathering natural gas rather than supplying or distributing
natural gas to consumers.

A person's primary business is gathering natural gas if the total
dekatherms of natural gas the person gathers exceeds the total
dekatherms of natural gas the person purchases from nongathered
sources in a calendar year.

Section
2.
That
existing sections
127.14,

155.33,
155.34, 1509.01, 1509.02, 1509.03, 1509.06, 1509.07, 1509.071,
1509.13, 1509.22, 1509.221
,
1509.224
,
1509.23, 1509.31, 1509.36
,
1509.37
,
2305.041
,
2305.06
,
5577.02, and 5727.02 of the Revised Code are hereby repealed.

Section
3.
The
amendment by this act of section 5727.02 of the Revised Code applies
to tax year 2027 and every tax year thereafter.

Section
4.
That
Section 343.30 of H.B. 96 of the 136th General Assembly be amended to
read as follows:

Sec.
343.30.
WELL
LOG FILING FEES

The
Chief of the Division of Water Resources shall deposit fees forwarded
to the Division pursuant to section 1521.05 of the Revised Code into
the Water Management Fund (Fund 5160) for the purposes described in
that section.

OIL
AND GAS WELL FUND

The
Oil and Gas Well Fund (Fund 5180) shall be used solely and
exclusively for the purposes enumerated in division (B) of section
1509.071 of the Revised Code, for the expenses of the Division of Oil
and Gas Resources Management associated with the administration of
Chapters 1509. and 1571. of the Revised Code and rules adopted under
them, and for expenses that are critical and necessary for the
protection of human health and safety and the environment related to
oil and gas production in this state. Notwithstanding Section 503.20
of H.B. 96 of the 136th General Assembly, or any other provision of
law to the contrary, money credited to the Oil and Gas Well Fund
(Fund 5180) shall not be used to transfer cash to any other fund or
appropriation item or for judgments and settlements unrelated to the
Division of Oil and Gas Resources Management.

PARKS
CAPITAL EXPENSES FUND

The
Director of Natural Resources shall submit to the Director of Budget
and Management the estimated design, engineering, and planning costs
of capital-related work to be done by Department of Natural Resources
staff for parks projects within the Ohio Parks and Recreation
Improvement Fund (Fund 7035). If the Director of Budget and
Management approves the estimated costs, the Director may release
appropriations from Fund 7035 appropriation item C725E6, Project
Planning, for those purposes. Upon release of the appropriations, the
Department of Natural Resources shall pay for these expenses from the
Parks Capital Expenses Fund (Fund 2270). Expenses paid from Fund 2270
shall be reimbursed by Fund 7035 using an intrastate transfer
voucher.

NATUREWORKS
CAPITAL EXPENSES FUND

The
Department of Natural Resources shall submit to the Director of
Budget and Management the estimated design, planning, and engineering
costs of capital-related work to be done by Department of Natural
Resources staff for each capital improvement project within the Ohio
Parks and Natural Resources Fund (Fund 7031). If the Director of
Budget and Management approves the estimated costs, the Director may
release appropriations from Fund 7031 appropriation item C725E5,
Project Planning, for those purposes. Upon release of the
appropriations, the Department of Natural Resources shall pay for
these expenses from the Capital Expenses Fund (Fund 4S90). Expenses
paid from Fund 4S90 shall be reimbursed by Fund 7031 using an
intrastate transfer voucher.

PARKS
AND RECREATION

The
foregoing appropriation item 7256A6, Parks and Recreation, shall be
used in conjunction with appropriation item 730321, Parks and
Recreation, to support the Division of Parks and Watercraft.

PARK
MAINTENANCE

The
foregoing appropriation item 725514, Park Maintenance, shall be used
by the Department of Natural Resources to pay the costs of projects
supported by the State Park Maintenance Fund (Fund 5TD0) under
section 1501.08 of the Revised Code.

On
July 1 of each fiscal year or as soon as possible thereafter, the
Director of Natural Resources shall certify the amount of five
percent of the average of the previous five years of deposits in the
State Park Fund (Fund 5120) to the Director of Budget and Management.
The Director of Budget and Management may transfer up to $2,200,000
from Fund 5120 to the State Park Maintenance Fund (Fund 5TD0).

Section
5.
That
existing Section 343.30 of H.B. 96 of the 136th General Assembly is
hereby repealed.

Speaker
___________________ of the House of Representatives.

President
___________________ of the Senate.

Passed
________________________, 20____

Approved
________________________, 20____

Governor.

The section numbering of law
of a general and permanent nature is complete and in conformity with
the Revised Code.

Director, Legislative
Service Commission.

Filed
in the office of the Secretary of State at Columbus, Ohio, on the
____ day of ___________, A. D. 20____.

Secretary of State.

File
No. _________ Effective Date ___________________