KANSAS STATUTES AND CODES

55-155. Licensure of operators and contractors; requirements; notification of surface owner.

55-155

Chapter 55.--OIL AND GAS Article 1.--OIL AND GAS WELLS; REGULATORY PROVISIONS

55-155. Licensure of operators and contractors;requirements; notification of surface owner.(a) Operators and contractors shall be licensedby the commission pursuant to this section.

(b) Every operator and contractor shall file an application or a renewalapplication with the commission. Application and renewal application formsshall be prescribed, prepared and furnished by the commission.

(1) Provided sufficient information, as required by the commission, forpurposes of identification;

(2) submitted evidence that all current and prior years' taxes for propertyassociated with the drilling or servicing of wells have been paid;

(3) demonstrated to the commission's satisfactionthat the applicant complies with all requirements of chapter 55 of the KansasStatutes Annotated, all rules and regulations adopted thereunder and allcommission orders and enforcement agreements, if the applicant is registeredwith the federal securities and exchange commission;

(4) demonstrated to the commission's satisfaction that the following complywith all requirements of chapter 55 of the Kansas Statutes Annotated, all rulesand regulations adopted thereunder and all commission orders and enforcementagreements, if the applicant is not registered with the federal securities andexchange commission: (A) The applicant; (B) any officer,director, partner or member of the applicant; (C) any stockholder owning in theaggregate more than 5% of the stock of the applicant; and (D) any spouse,parent, brother, sister, child,parent-in-law, brother-in-law or sister-in-law of the foregoing;

(5) paid an annual license fee of $100, except that an applicantfor a license who is operating one gas well used strictly for the purpose ofheating a residential dwelling shall pay an annual license fee of $25;

(6) complied with subsection (d);and

(7) paid an annual license fee of $25for each rig operated by the applicant. The commission shall issue anidentificationtag for each such rig which shall be displayed on such rig at all times.

(d) In order to assure financialresponsibility, each operator shall demonstrate annuallycompliance with one of the following provisions:

(1) The operator has obtained an individual performance bond or letter ofcredit, in an amount equal to $.75 times the total aggregate depth of all wells(including active, inactive, injection or disposal) of the operator.

(2) The operator has obtained a blanket performance bond or letter of creditin an amount equal to the following, according to the number ofwells (including active, inactive, injection or disposal) of the operator:

(A) Wells less than 2,000 feet in depth: 1 through 5 wells,$7,500; 6through 25 wells, $15,000; and over 25 wells,$30,000.

(B) Wells 2,000 or more feet in depth: 1 through 5 wells,$15,000; 6through 25 wells, $30,000; and over 25 wells,$45,000.

(3) The operator: (A) Has an acceptable record of compliance, asdemonstrated during the preceding 36 months, with commission rules andregulations regarding safety and pollution or with commission orders issuedpursuant to such rules and regulations; (B) has no outstanding undisputedorders issued by the commission or unpaid fines, penalties or costs assessed bythe commission and has no officer or director that has been or is associatedsubstantially with another operator that has any such outstanding orders orunpaid fines,penalties or costs; and (C) pays a nonrefundable fee of $100per year.

(4) The operator pays a nonrefundable fee equal to 6% of theamount of thebond or letter of credit that would be required by subsection (d)(2).

(5) The state has a first lien on tangible personal property associatedwith oil and gas production of the operator that has a salvage value equal tonot less than the amount of the bond or letter of credit that would be requiredby subsection (d)(1) or by subsection (d)(2).

(6) The operator has provided other financial assurance approved by thecommission.

(e) Upon the approval of the application or renewal application,thecommission shall issue to such applicant a license which shall be in fullforce and effect until one year from the date of issuance or untilsurrendered, suspended or revoked as provided in K.S.A. 55-162, andamendments thereto. No new license shall be issued to any applicant whohas had a license revoked until the expiration of one year from the date ofsuch revocation.

(f) If an operator transfers responsibility for the operation of awell or gas gathering system or for underground porosity storage ofnatural gas toanotherperson, such operator shall filea notice of transfer of operator with the commissionin accordancewith rules and regulations of the commission. Thecommission shall, upon receipt of such notice, send a copy of suchnotice to the surface owner, as well as the contact information, includingname, address, phone number, fax or email address, for a designatedrepresentative of the operator. The commission need not send such informationif the operator verifies that the notice filed with the commission hasbeen delivered to the surface owner.The commission need not send a copy of notice to the surface ownerfor transfers of responsibility for the operation of a gasgathering system or for underground porosity storage of natural gas to anotherperson.

(g) The commission shall remit allmoneys received from fees assessedpursuant to subsection (c)(7) of this section to the state treasurerin accordance with the provisions of K.S.A. 75-4215, andamendments thereto. Upon receiptof each such remittance, the state treasurer shall deposit the entire amountin the state treasury. Twenty percent of each such deposit shallbe credited to the state general fund and the balance shall be creditedto the conservation fee fund created by K.S.A. 55-143, and amendments thereto.

(h) The commission shall remit all moneys receivedpursuant tosubsections (d)(3) and (d)(4)to the state treasurer in accordance with the provisions ofK.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance,the state treasurer shall deposit the entire amount in the state treasury tothe credit of thewell plugging assurance fund.

History: L. 1982, ch. 228, § 8;L. 1986, ch. 201, § 10;L. 1992, ch. 68, § 3;L. 1995, ch. 139, § 1;L. 1996, ch. 263, § 5;L. 1998, ch. 61, § 2;L. 2001, ch. 5, § 190;L. 2001, ch. 191, § 4;L. 2005, ch. 173, § 1;L. 2009, ch. 127, § 5; July 1.