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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
AMENDED
oil and gas commission; helium
Purpose
Removes the Oil and Gas Conservation Commission (Commission) from the purview of the Arizona Department of Environmental Quality (ADEQ). Establishes the Commission Fund (Fund) consisting of legislative appropriations and outlined fees and redirects all Commission fees to the Fund, rather than the state General Fund (state GF).
Background
The Commission is established within the ADEQ and consists of the State Land Commissioner and five members appointed by the Governor. ADEQ must provide support staff for the Commission. The Commission administers and enforces laws relating to the conservation of oil and gas. Any interested person has the right to request the Commissioner to call a hearing to take action in respect to any matter within the Commission's jurisdiction. As soon as possible following a hearing, the Commission must bill the requestor for the total cost of publishing hearing notices and the total cost of the court reporter's fees, minus the original $50 fee.
A person desiring to drill an oil or gas well must notify the Commission and pay a $25 fee for each well. Upon receipt, the Commissioner must promptly issue a permit to drill, unless drilling the well is unlawful. Before commencing the drilling of a geothermal resource well, the property owner or operator must apply to the Commission and pay a $25 fee. Any person who violates the statutes governing oil and gas is subject to a civil penalty of up to $1,000 for each violation and for each day the violation continues. Monies collected by the Commission are deposited in the state GF and expenses to administer the Commission must be paid from the state GF, subject to legislative appropriation (A.R.S Title 27, Chapter 4, Article 1; A.R.S. § 27-659).
Directing Commission fees to the Fund, rather than the state GF, will result in a change to revenues that would otherwise be directed to the state GF.
Provisions
1. Removes the Commission from the purview of the ADEQ and removes the requirements for ADEQ to provide staff support.
2. Establishes the Fund, administered by the Commission, and consisting of legislative appropriations and fees assessed by the Commission.
3. Allows the Commission to use Fund monies to carry out the Commission's statutory duties and specifies that Fund monies are subject to legislative appropriation and exempt from lapsing.
4. Allows the Commission to accept and spend federal monies and private grants, gifts, contributions and devises to assist in carrying out the Commission's statutory duties.
5. Redirects all Commission fees to the Fund, rather than the state GF, and allows the Commissioner to set the fees outlined in statute, rather than prescribing the fees in statute.
6. Requires the fee that accompanies an application to drill a geothermal resource well to be established by a majority vote of the Commission.
7. Allows the Commissioner, on the majority vote of the Commission, to restrain a person who has failed or refused to stop a statutory violation from continuing to violate, or from carrying out a threat of violating, the statutes governing oil and gas.
8. Specifies that the civil penalty assessed on a person who violates the statutes governing oil and gas is recoverable by a finding, and majority vote of the Commission, that a violation has occurred and a civil penalty assessed.
9. Exempts, from aquifer protection permit requirements, helium exploration, water injection wells and production wells that are designed, constructed, operated and maintained to not discharge a contaminant into an aquifer.
10. Transfers, to the Commission, from ADEQ:
a) all equipment, records, furnishings and other property, all data and investigative findings, all obligations and all appropriated monies allocated to serve the Commission; and
b) all personnel who are under the State Personnel System and employed by ADEQ to assist the Commission.
11. Contains a statement of legislative intent.
12. Makes technical and conforming changes.
13. Becomes effective on the general effective date.
Amendments Adopted by Committee of the Whole
· Makes technical changes.
Senate Action
APPROP 2/25/25 DP 6-4-0
NR 2/18/25 DP 4-3-1
Prepared by Senate Research
March 6, 2025
MG/slp