flag of tennessee2024 Tennessee Code Unannotated

Title 60 Oil And Gas

Chapter 1 Production of Oil and Gas
Part 1 General Provisions
§ 60-1-101. Chapter definitions.
  1. As used in this chapter, unless the context otherwise requires:
    1. (1) “Board” means the Tennessee board of water quality, oil and gas created by § 69-3-104;
    2. (2) “Casinghead gas” means any gas or vapor, or both, indigenous to an oil stratum and produced from such stratum with oil. It shall be treated as gas, if sold, for the purpose of paying privilege tax;
    3. (3) “Condensate” means liquid hydrocarbons that were in the gaseous phase in the reservoir in initial reservoir conditions. It shall be treated as oil for the purpose of paying privilege tax;
    4. (4) “Field” means the general area which is underlain or appears to be underlain by at least one pool and including the pool or pools beneath the area;
    5. (5) “Gas” means all natural gas and all other fluid hydrocarbons not defined as oil, including condensate because it originally was in a gaseous phase in the reservoir;
    6. (6) “Oil” means crude petroleum that was originally in an oil phase in the reservoir;
    7. (7) “Operator” means any person who owns or is directly responsible for a business involved in some phase of the production, manufacture, refining or distribution of petroleum oil or natural gas;
    8. (8) “Owner” means the person who has the right to drill into and to produce from any pool, and to appropriate the production for such person or others;
    9. (9) “Person” means any natural person, corporation, association, partnership, receiver, trustee, guardian, executor, administrator, fiduciary or representative of any kind;
    10. (10) “Pool” means an underground reservoir containing a common accumulation of crude petroleum oil or natural gas or both. Each zone of the general structure which is completely separated from any other zone in the structure is covered by the term “pool” as used in this chapter;
    11. (11) “Producer” means the owner of a well or wells capable of producing oil or gas, or both, in paying quantities;
    12. (12) “Supervisor” means the commissioner of environment and conservation or the commissioner's designee; and
    13. (13) “Waste,” in addition to its ordinary meaning, means “physical waste” as that term is generally understood in the oil and gas industry. It includes:
      1. (A) Underground waste and inefficient, excessive, or improper use or dissipation of reservoir energy, including gas energy and water drive, of any pool; and the locating, spacing, drilling, equipping, operating, or producing of any oil well or gas ultimately recoverable from any pool; and
      2. (B) Surface waste and the inefficient storing of oil and the locating, spacing, drilling, equipping, operating or producing of oil wells or gas wells in a manner causing or tending to cause unnecessary or excessive surface loss or destruction of oil or gas.
Backlinks (1)
History (7)
  • Acts 1943, ch. 64, § 3
  • C. Supp. 1950, § 5240.3
  • Acts 1971, ch. 280, § 1
  • 1978, ch. 791, § 5
  • T.C.A. (orig. ed.), § 60-101
  • Acts 1992, ch. 693, § 21
  • 2012, ch. 986, § 29.
§ 60-1-102. Waste prohibited.
  1. The production or handling of crude petroleum oil or natural gas in such manner or under such conditions as to constitute or result in waste as defined in § 60-1-101 is each prohibited.
History (3)
  • Acts 1943, ch. 64, § 4
  • C. Supp. 1950, § 5240.4
  • T.C.A. (orig. ed.), § 60-102.
§ 60-1-103. Permits — Applications — Operators' plans.
  1. (a)
    1. (1) No person shall drill any well for oil or gas, or conduct any surface disturbances incidental to or in preparation for such drilling, until a permit application has been submitted to the supervisor. The supervisor shall not issue a permit until the conditions established by this subsection (a) have been met.
    2. (2) An application for a permit to drill shall be filed with the supervisor. The supervisor shall prescribe the form of the application.
    3. (3) The application shall include the exact location of the well, the name and address of the person or persons responsible for the drilling operations, the proposed depth of the well, the location of all existing or proposed roads providing access to the well site, and the location of all blue-line streams within one-half mile (0.5 mi.) of the well site or access roads.
    4. (4) The application shall also include a plan for erosion control prevention of pollution of surface waters, and reclamation of all areas disturbed by the operations, including access roads. The plan shall conform to the requirements of part 7 of this chapter. The plan must be sufficiently detailed to allow an inspector to locate the site of the facilities to be constructed and to estimate the expected environmental impact, but does not have to include detailed engineering design drawings.
    5. (5) No drilling shall begin until the permit has been approved.
    6. (6) A processing fee for permits shall be submitted with the application in an amount specified in rules promulgated by the board, which shall not exceed the amount stated in § 68-203-103(h) for an oil and gas permit.
  2. (b) All funds received by the commissioner under this chapter, except those under parts 3 and 4 of this chapter, together with any interest earned on the funds, shall be deposited into a separate account in the environmental protection fund created by § 68-203-101.
  3. (c) The supervisor may require or approve modifications in the operator's plan if such modifications are necessary to prevent pollution or to promote reclamation.
  4. (d) Upon approval, the operator's plan shall be a condition of the operator's permit. Failure to comply with the plan shall be grounds for revocation of the permit and forfeiture of the bond.
History (10)
  • Acts 1943, ch. 64, § 5
  • C. Supp. 1950, § 5240.5
  • impl. am. Acts 1959, ch. 9, § 3
  • impl. am. Acts 1961, ch. 97, § 3
  • Acts 1978, ch. 791, § 4
  • T.C.A. (orig. ed.), § 60-111
  • Acts 1981, ch. 146, § 1
  • 1987, ch. 257, § 1
  • 2007, ch. 362, §§ 1-3
  • 2012, ch. 986, § 31.
§ 60-1-104. Records and reports of production and sales — False reports.
  1. (a) It is the duty of every person producing, selling, gathering, transporting, or storing crude petroleum or natural gas from any well or wells in this state to keep and preserve suitable records of the amount of all such crude petroleum or natural gas produced, sold, gathered, transported, or stored, and the price received and paid therefor.
  2. (b) Such person shall report such records to the oil and gas supervisor at such intervals as the board may direct and on forms provided by the supervisor.
  3. (c) Anyone who shall intentionally make or cause to be made any false entry or statement of fact in any report required to be made by this chapter, or by any rule, regulation or order made hereunder, or who for such purpose shall make or cause to be made any false entry in any account, record or memorandum kept by any person in connection with this chapter, or any rule, regulation or order made thereunder, or who for such purpose shall omit to make, or cause to be omitted, full, true and correct entries on such accounts, records or memoranda of all facts and transactions pertaining to the interest or activities in the oil and gas industry of such persons as may be required by the board under authority given in this chapter, or by any rule, regulation or order made hereunder, or who for such purpose shall remove out of the jurisdiction of the state, or mutilate, alter or by any other means falsify any book, record or other paper pertaining to the transactions regulated by this chapter, or by any rule, regulation or order made hereunder, is guilty of a Class C misdemeanor.
History (5)
  • Acts 1943, ch. 64, § 11
  • C. Supp. 1950, § 5240.11
  • T.C.A. (orig. ed.), § 60-112
  • Acts 1989, ch. 159, § 1
  • 1989, ch. 591, § 113.
§ 60-1-105. Requested status under federal law — Applications and fees.
  1. Any person who files with the board an application requesting a determination by the board of whether natural gas produced from a well qualifies for a requested status under § 102, 103, 107 or 108 of the Natural Gas Policy Act of 1978, Public Law No. 95-621, 92 Stat. 3350 (including any act of congress which amends or supersedes those sections of that act) which determination the board is authorized to make under § 503 of that act, shall pay a fee of twenty-five dollars ($25.00) to the state treasurer through the supervisor at the time such application is filed. A separate fee shall be paid for each such application. All funds paid to the state treasurer pursuant to this section shall be disbursed by the state treasurer upon warrants drawn by the commissioner of finance and administration to defray expenses incurred in acting upon such Natural Gas Policy Act determinations.
History (1)
  • Acts 1984, ch. 677, § 1.
§ 60-1-106. Spacing of oil wells.
  1. (a)
    1. (1) Wells drilled in search of oil or gas to a depth of less than two thousand five hundred feet (2,500′) shall not be located closer than four hundred feet (400′) from any other well completed in, drilling to, or for which a permit shall have been granted to drill to the same pool. The distance of such oil and gas wells from any property line shall not be closer than two hundred feet (200′).
    2. (2) This subsection (a) applies only in counties having a population of not less than seventeen thousand five hundred fifty (17,550) and not more than seventeen thousand six hundred fifty (17,650), according to the 1980 federal census or any subsequent federal census.
  2. (b)
    1. (1) Wells drilled in search of oil and gas shall not be located closer than four hundred feet (400′) from any other well completed in, drilling to, or for which a permit shall have been granted to drill to the same pool; and not closer than two hundred feet (200′) from any property line.
    2. (2) This subsection (b) applies only in counties having a population of not less than four thousand three hundred (4,300) and not more than four thousand four hundred (4,400) or in counties having a population of not less than seven thousand six hundred fifty (7,650) nor more than seven thousand seven hundred (7,700), according to the 1980 federal census or any subsequent federal census.
History (8)
  • Acts 1984, ch. 967, §§ 1-3
  • 1986, ch. 802, § 1
  • 1987, ch. 215, § 1
  • 1987, ch. 455, § 1
  • 1988, ch. 749, § 1
  • 1990, ch. 1018, § 1
  • 1990, ch. 1019, § 1
  • 1992, ch. 634, § 1.
Part 2 General Provisions of the Board
§ 60-1-202. Powers of board.
  1. (a) The board has jurisdiction and authority:
    1. (1) Over all persons and property necessary to enforce this chapter;
    2. (2) To make such inquiries as necessary to determine whether or not waste exists or is imminent;
    3. (3) To collect data; to make investigations and inspections; to examine properties, leases, papers, books, and records including drilling records and logs; to examine, check, test, and gauge oil and gas wells, tanks, refineries, and modes of transportation; to hold hearings; to provide for the keeping of records and making of reports; and to take such action as may be necessary to enforce this chapter;
    4. (4) To make rules, regulations, and orders for the following purposes:
      1. (A) To require the drilling, casing, and plugging of wells in such manner as to prevent the escaping of oil and gas out of one (1) stratum to another; to prevent intrusion of water to oil and gas strata; to prevent pollution of fresh water by oil, gas, or salt water; to protect potentially minable coal and other minerals; and to require bond for the plugging of each dry or abandoned well;
      2. (B) To require notification to the supervisor, upon such forms as the supervisor may prescribe, of the intention to drill any well for oil or gas;
      3. (C) To require the filing of logs, including electrical logs and drilling records, cores and drill cutting samples, and all other downhole surveys and information, within thirty (30) days following the cessation of drilling operations of the well;
      4. (D) To prevent wells from being drilled, operated, and produced in such manner as to cause injury to neighboring leases or property;
      5. (E) To prevent the drowning by water of any oil and gas stratum in paying quantities, and to prevent the premature and irregular encroachment of water which would affect the total ultimate recovery of oil and gas;
      6. (F) To require the operation of wells with efficient gas-oil ratios and to fix such ratios;
      7. (G) To prevent “blow outs,” “caving” and “seepage” in the same sense that conditions indicated by such terms are generally understood in the oil and gas business;
      8. (H) To prevent fires;
      9. (I) To identify ownership of oil and gas wells, producing leases, refineries, tanks, plants, structures, and all storage and transportation equipment and facilities;
      10. (J) To regulate the “shooting” and chemical treatment of wells;
      11. (K) To regulate secondary recovery methods;
      12. (L) To regulate the spacing of wells;
      13. (M) To provide for the forced integration of separately owned tracts and other property ownership into drilling and production units;
      14. (N) To provide that the board may, in the absence of a voluntary agreement and after a sixty-day notice to owners, force a volumetric or surface poolwide unit; provided, that the pool producers owning more than fifty percent (50%) of the pool acreage request such unitization of the pool;
      15. (O) In the absence of an acceptable plan of unitization by the operators, the board may shut in the pool to prevent waste and to protect correlative rights until an acceptable plan is presented by the operators;
      16. (P) To regulate and prescribe procedures with respect to applications for and determinations of whether natural gas produced from a well qualifies for a requested status under § 102, 103, 107 or 108 of the Natural Gas Policy Act of 1978, Public Law No. 95-621, 92 Stat. 3350 (including any act of Congress which amends or supersedes those sections of that act);
      17. (Q) To require that any person conducting oil or gas operations, or causing surface disturbances preparatory to or incidental to such operations, conduct such operations in a manner which will prevent or mitigate adverse environmental impacts, such as soil erosion and water pollution, and perform reclamation of all areas disturbed by the operations, including access roads, as prescribed by part 7 of this chapter; and
      18. (R) To require that any person conducting oil and gas operations, or causing surface disturbances preparatory to or incidental to such operations, for wells permitted and drilled after July 1, 1987, post a bond or bonds to secure compliance with the requirements of this chapter and the rules promulgated under this chapter, both for plugging of the wells and reclamation of the surface in an amount not to exceed fifteen thousand dollars ($15,000) per single well site. At sites with more than one (1) well, the portion of the bond or bonds to secure compliance with plugging requirements shall not exceed ten thousand dollars ($10,000) per well. The bond shall be filed with the supervisor at the time an operator's permit application is submitted, and shall be effective from the time the initial surface disturbances begin. As an alternative to the performance bond required in this subdivision (a)(4)(R), a person may submit:
        1. (i) A federally insured certificate of deposit issued by any financial institution in this state to be placed in a separate departmental account that shall not revert to the general fund;
        2. (ii) An irrevocable letter of credit issued by any federally insured bank or savings and loan association; or
        3. (iii) Other cash or securities in an amount mutually agreed to by the supervisor and the operator, to be placed in a separate departmental account that shall not revert to the general fund.
  2. (b) The applicant for any permit must swear to facts set out in any application for a permit to drill or deepen a well, or reopen a plugged or abandoned well, under the rules made by the board pursuant to this title.
History (11)
  • Acts 1943, ch. 64, § 5
  • C. Supp. 1950, § 5240.5
  • Acts 1971, ch. 280, §§ 2-4
  • 1972, ch. 541, § 1
  • 1977, ch. 46, § 1
  • T.C.A. (orig. ed.), § 60-104
  • Acts 1984, ch. 677, § 2
  • 1987, ch. 257, § 2
  • 1992, ch. 618, § 1
  • 2007, ch. 362, §§ 4-7
  • 2012, ch. 986, § 32.
§ 60-1-203. Quorum of board.
  1. Any three (3) members of the board shall constitute a quorum, but three (3) affirmative votes shall be necessary for the adoption of any rule or order of the board.
History (4)
  • Acts 1943, ch. 64, § 2
  • C. Supp. 1950, § 5240.2
  • Acts 1978, ch. 791, § 3
  • T.C.A. (orig. ed.), § 60-106.
§ 60-1-204. Rules, regulations, and orders of board.
  1. (a) The board shall prescribe its rules of order, procedure in hearings or other proceedings before it under this chapter.
  2. (b) No rule or order, in the absence of an emergency, may be made by the board except after a public hearing upon at least ten (10) days' notice in a manner and form prescribed by the board. Such public hearing shall be held at such time, place, and manner as may be prescribed by the board and any person having any interest in the subject matter of the hearing shall be entitled to be heard.
  3. (c) If an emergency appears to the board to exist, it may act without a public hearing and the rule, regulation, or order shall be valid. This emergency rule or regulation shall remain in force not longer than fifteen (15) days after its effective date, and, in any event, shall expire when the rule or regulation made after due notice and hearing shall become effective.
  4. (d) All rules and regulations of the board shall be entered in writing by the supervisor in a book kept for such purposes, which shall be a public record and open to inspection. A copy of such rules and regulations certified by the supervisor shall be received in evidence in all courts in this state with the same effect as the original.
History (3)
  • Acts 1943, ch. 64, § 6
  • C. Supp. 1950, § 5240.6
  • T.C.A. (orig. ed.), § 60-107.
§ 60-1-205. Power to subpoena and swear witnesses.
  1. (a) The board, or any member thereof, is empowered to issue subpoenas for witnesses, to require their attendance and the giving of testimony before it, and to require the production of books, papers and records in any proceeding before the board as may be material upon questions lawfully before the board. Such subpoenas shall be served by the sheriff or any other officer authorized by law to serve process in this state. No person shall be excused from attending and testifying, or from producing books, papers and records before the board or a court, or from obedience to the subpoena of the board or a court, on the ground or for the reason that the testimony or evidence, documentary or otherwise, required of such person may tend to incriminate the person or subject the person to a penalty or forfeiture; provided, that nothing herein shall be construed as requiring any person to produce any books, papers or records, or to testify in response to any inquiry, not pertinent to some question lawfully before such board or court for determination. No natural person shall be subjected to criminal prosecution or to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which the person may be required to testify or produce evidence, documentary or otherwise, before the board or court, or in obedience to its subpoena; provided, that no person testifying shall be exempt from prosecution and punishment for perjury committed in so testifying.
  2. (b) In case of failure or refusal on the part of any person to comply with any subpoena issued by the board or any members thereof, or in case of the refusal of any witness to testify or answer to any matter regarding which the person may be lawfully interrogated, any circuit court in this state in the county where the board is sitting, on application of the board, may in term time or vacation, issue an attachment for such person and compel the person to comply with such subpoena and to attend before the board and produce such documents, and give testimony upon such matters, as may be lawfully required, and such court shall have the power to punish for contempt as in case of disobedience of like subpoenas issued by or from such court, or for a refusal to testify therein. The chair or any member of the board is authorized to administer oaths to witnesses, and any false swearing shall constitute perjury and be punished in accordance with the general criminal statutes relating to perjury.
Backlinks (1)
History (4)
  • Acts 1943, ch. 64, § 7
  • C. Supp. 1950, § 5240.7
  • impl. am. Acts 1978, ch. 754, § 1
  • T.C.A. (orig. ed.), § 60-108.
§ 60-1-206. Enforcement of chapter.
  1. The supervisor is charged with enforcing this chapter and the regulations and orders of the board.
History (3)
  • Acts 1943, ch. 64, § 2
  • C. Supp. 1950, § 5240.2
  • T.C.A. (orig. ed.), § 60-109.
§ 60-1-207. Employment of personnel.
  1. The oil and gas supervisor, with the concurrence of the board, shall have the authority, and it shall be the supervisor's duty to employ all necessary personnel to carry out this chapter.
History (3)
  • Acts 1943, ch. 64, § 10
  • C. Supp. 1950, § 5240.10
  • T.C.A. (orig. ed.), § 60-110.
§ 60-1-208. Travel expenses.
  1. Board members and the supervisor shall be reimbursed for travel expenses in accordance with the comprehensive travel regulations as promulgated by the department of finance and administration and approved by the attorney general and reporter.
History (2)
  • Acts 1976, ch. 806, § 1(63)
  • T.C.A., § 60-119.
§ 60-1-209. Notice to surface owners of oil and gas estates.
  1. (a)
    1. (1) No later than the filing of the application with the board for a permit to drill and prior to initiating any site preparation, the applicant shall give notice by certified mail, return receipt requested, of the applicant's intent to drill to the property owner or owners of the surface of the land to be drilled or to be affected by the surface disturbances listed in subdivision (a)(3).
    2. (2) The property owners to be notified under this section shall be the property owners of record in the property tax assessor's office in the county where the property is located.
    3. (3) The notice shall include the proposed location of the oil or gas well site, the proposed location of all new ingress and egress, the location of all diversions, drilling pits, dikes, and related structures and facilities, the location of proposed storage tanks and all other surface disturbances.
    4. (4) The notice shall state that the property owner and applicant have fifteen (15) working days from the date of mailing to discuss the location of surface disturbances in connection with the drilling operation. It shall also state that if the property owner and applicant are unable to resolve differences regarding the location of surface disturbances, either or both may request in writing a hearing before the supervisor or the supervisor's designee. The notice shall provide the name and address of the supervisor.
  2. (b)
    1. (1) The applicant and the property owners given notice under subsection (a) shall attempt to resolve any differences between them regarding surface disturbances related to the proposed drilling operation.
    2. (2) Any property owners entitled to notice or the applicant may request, within fifteen (15) working days of the mailing of the notice required in subsection (a), that the supervisor or the supervisor's designee conduct a hearing. A request for hearing under this section shall be in writing to the supervisor by certified mail, return receipt requested. The purpose of the hearing will be to minimize the impact of the proposed drilling operation on the surface of the land.
    3. (3) The hearing shall be conducted as a contested case pursuant to the Uniform Administrative Procedures Act, title 4, chapter 5, part 3, and shall be held before a hearing officer sitting alone. For purposes of the hearing, the supervisor or the supervisor's designee shall be the hearing officer. The hearing shall be held within ten (10) working days of receipt of a request for hearing by the supervisor or the supervisor's designee and shall be held in the county of the proposed oil and gas well. Notice of the hearing shall be given to all persons entitled to notice under subsection (a) and the applicant.
    4. (4) The hearing officer shall render a decision within ten (10) calendar days of the hearing. The decision shall be considered a final order not subject to further agency review pursuant to § 4-5-315(a)(1).
    5. (5) For purposes of this subsection (b), “working day” means all calendar days excluding Saturdays, Sundays and legal holidays as designated in § 15-1-101.
  3. (c) Notwithstanding any other requirements for a permit to drill, such a permit may only issue:
    1. (1) If the applicant submits to the supervisor statements of no objection signed by all property owners entitled to notice under subsection (a);
    2. (2) If a hearing is not requested as provided in subdivision (b)(2); or
    3. (3) Upon the issuing of a final order pursuant to subdivision (b)(4).
History (1)
  • Acts 1984, ch. 863, § 1.
Part 3 Taxation
§ 60-1-301. Severance tax levied — Exceptions — Disposition of revenues — Moratorium on taxes.
  1. (a) There is levied a severance tax on all gas and oil removed from the ground in Tennessee. The measure of the tax for such gas and oil shall be three percent (3%) of the sale price of such gas and oil. Every person actually engaged in severing oil or gas, or actually operating oil or gas property under contracts or agreements requiring direct payments to the owners of any royalty interest, excess royalty or working interest, either in money or otherwise, shall be liable for the tax imposed by this section and shall, prior to making any such payments, withhold from any quantity or amount due the amount of tax due pursuant to this section.
  2. (b) The tax shall be levied for the use and benefit of the state, as well as the county governments and one-third (⅓) of all revenues collected from the tax shall be allocated to the county which was the site of the wellhead for that gas or oil. The remaining two-thirds (⅔) of such revenues shall be deposited to the credit of the state treasurer as a part of the general funds of the state.
  3. (c) No other tax shall be imposed on such gas and oil by the state, counties or any other political subdivision of the state; provided, however, that:
    1. (1) Free gas used by the property owner or tenant under the terms of the lease, unless it be in lieu of cash payment; and
    2. (2) Gas which has been injected into the ground for underground storage and thereafter withdrawn shall not be subject to this, or any taxation.
Backlinks (1)
History (9)
  • Acts 1943, ch. 64, § 13
  • C. Supp. 1950, § 5240.13
  • Acts 1963, ch. 106, § 1
  • 1978, ch. 761, § 115
  • 1978, ch. 777, § 1
  • 1979, ch. 153, § 1
  • T.C.A. (orig. ed.), § 60-116
  • Acts 1981, ch. 155, § 1
  • 1982, ch. 878, § 1.
§ 60-1-302. Reports and payment of tax.
  1. The severance tax imposed in this part shall be payable as follows:
    1. (1) On or before the twentieth day of each month the person liable for the tax shall file with the commissioner of revenue, on forms prescribed by the commissioner, a report of all oil removed from the ground during the preceding month, and shall remit to the commissioner of revenue therewith the amount of tax due for the period covered by the report;
    2. (2) On or before the twentieth day of each month the person liable for the tax shall file with the commissioner, on forms prescribed by the commissioner, a report of all gas removed from the ground during the second preceding month and shall remit to the commissioner therewith the amount of tax due for the period covered by the report.
History (8)
  • Acts 1943, ch. 64, § 14
  • C. Supp. 1950, § 5540.14
  • impl. am. Acts 1959, ch. 9, § 14
  • 1979, ch. 153, § 2
  • T.C.A. (orig. ed.), § 60-117
  • Acts 1981, ch. 155, § 2
  • 1984, ch. 634, § 1
  • 1988, ch. 526, § 18.
Part 4 Violations
§ 60-1-401. Violations — Penalties — Notice — Appeals — Hearing.
  1. (a) The Tennessee board of water quality, oil and gas through the supervisor shall have the authority to assess monetary penalties as provided in subsections (c)-(e) for any violation of this chapter, rules and regulations, or any order adopted by the board. In making such assessment, the board shall give due consideration to the appropriateness of the penalty with respect to the size of the business of the operator charged, the gravity of the violation, the good faith of the operator, and the operator's history of previous violations.
  2. (b) If, upon an inspection or investigation, the supervisor or any of the supervisor's authorized personnel shall determine that any operator is not in compliance with any standard or regulation or rule or order of the board promulgated by the board pursuant to this chapter, the supervisor shall with reasonable promptness and in no event later than six (6) months following the inspection, issue to the operator by certified mail a written citation that states the nature and, if appropriate, the location of the violation, including a reference to the provision of the chapter and the regulation alleged to have been violated. In addition, the citation shall fix a reasonable time for abatement of the violation. If the issuing supervisor has reason to believe that such violation, or the failure to abate such violation, should result in the assessment of a penalty under subsections (c)-(e), the citation may so state.
  3. (c) Any operator who has received a citation for a violation of this chapter, rules and regulations or order of the board, promulgated pursuant to this chapter and has failed to correct such violation within the period of correction of this citation, shall be assessed a penalty of up to one thousand dollars ($1,000) for each day the violation exists. The period of correction may be suspended or lengthened by the assessing party upon a showing by the operator of a good faith effort to comply with the correction requirements and that failure to comply with the correction requirements is due to factors beyond the operator's reasonable control.
  4. (d) Any operator who has received a citation for a violation of this chapter, or rules and regulations or order of the board, and such violation is specifically determined not to be of a serious nature, may be assessed a penalty of up to one thousand dollars ($1,000) for each such violation.
  5. (e) Any operator who willfully or repeatedly violates the requirements of this chapter, or rules and regulations, or order of the board promulgated pursuant to this chapter may be assessed a penalty of up to ten thousand dollars ($10,000) for each violation.
  6. (f) Penalties provided for by subsections (c)-(e) shall be imposed in the manner hereinafter provided. Whenever the Tennessee board of water quality, oil and gas, through the supervisor, has determined that such a penalty should be assessed against an operator, a written notice and assessment of a penalty shall be issued to the operator by certified mail, return receipt requested, stating the amount of the penalty to be assessed and the reason therefor (which may be done by reference to citations issued prior to or simultaneously with such notification).
  7. (g) Any citation or notice and assessment of a penalty issued pursuant to this section shall inform the operator of the operator's right to appeal such citation or assessment of a penalty to the Tennessee board of water quality, oil and gas. Any such citation or assessment of a penalty shall become final twenty (20) days after the receipt of such citation or notice and assessment of penalty by the operator unless the operator, within the period of twenty (20) days, shall file a written notice of appeal with the supervisor.
  8. (h) If the operator files an appeal of such citation or assessment of a penalty as provided by subsection (g), the proceedings on such appeal shall be conducted as a contested case and shall be heard before an administrative judge sitting alone pursuant to §§ 4-5-301(a)(2) and 4-5-314(b), unless settled by the parties. The administrative judge to whom the case has been assigned shall convene the parties for a scheduling conference within thirty (30) days of the date the appeal is filed. The scheduling order for the contested case issued by the administrative judge shall establish a schedule that results in a hearing being completed within one hundred eighty (180) days of the scheduling conference, unless the parties agree to a longer time or the administrative judge allows otherwise for good cause shown, and an initial order being issued within sixty (60) days of completion of the record of the hearing. The administrative judge's initial order, together with any earlier orders issued by the administrative judge, shall become final unless appealed to the board by the commissioner or other party within thirty (30) days of entry of the initial order or, unless the board passes a motion to review the initial order pursuant to § 4-5-315, within the longer of thirty (30) days or seven (7) days after the first board meeting to occur after entry of the initial order. Upon appeal to the board by a party, or upon passage of a motion of the board to review the administrative judge's initial order, the board shall afford each party an opportunity to present briefs, shall review the record and allow each party an opportunity to present oral argument. If appealed to the board, the review of the administrative judge's initial order shall be limited to the record, but shall be de novo with no presumption of correctness. In such appeals, the board shall thereafter render a final order, in accordance with § 4-5-314, affirming, modifying, remanding, or vacating the supervisor's citation or assessment of a penalty. A final order rendered pursuant to this section is effective upon its entry, except as provided in § 4-5-320(b) unless a later effective date shall be stated therein. A petition to stay the effective date of a final order may be filed under § 4-5-316. A petition for reconsideration of a final order may be filed pursuant to § 4-5-317. Judicial review of a final order may be sought by filing a petition for review in accordance with § 4-5-322. An order of an administrative judge that becomes final in the absence of an appeal or review by the board shall be deemed to be a decision of the board in that case for purposes of the standard of review by a court; provided, however, that in other matters before the board, it may be considered but shall not be binding on the board.
Backlinks (1)
History (6)
  • Acts 1978, ch. 791, § 1
  • T.C.A., § 60-113
  • Acts 1984, ch. 700, §§ 1, 2
  • 2007, ch. 362, § 8
  • Acts 2012, ch. 986, § 29
  • 2013, ch. 181, § 1.
§ 60-1-402. Restraining violations.
  1. Whenever it shall appear that any person is violating or threatening to violate any provisions of this chapter, or any rule, regulation or order made hereunder, and unless the board without litigation can effectively prevent further violation or threat of violation, then the board, through the attorney general, who may call to the attorney general's assistance the district attorney general of the district in which suit is instituted, shall bring suit in the name of the state of Tennessee against such person in the circuit or chancery court in the county of the residence of the defendant, or if there be more than one (1) defendant, in the circuit or chancery court in the county of the residence of any of same, or in the circuit or chancery court in the county in which such violation is alleged to have occurred, to restrain such person from continuing such violation or from carrying out the threat of violation. In such suit the board, in the name of the state of Tennessee, may obtain an injunction prohibitory and mandatory, including temporary restraining orders and temporary injunctions as the facts may warrant.
History (3)
  • Acts 1943, ch. 64, § 8
  • C. Supp. 1950, § 5240.8
  • T.C.A. (orig. ed.), § 60-114.
§ 60-1-403. Right to damages unimpaired.
  1. Nothing in this chapter contained or authorized and no suit by or against the board and no penalties imposed or claimed against any person for violating any provision of this chapter, or any rule, regulation or order issued hereunder, and no forfeiture shall impair or abridge or delay any cause of action for damages which any person may have or assert against any person violating any provisions of this chapter or any rule, regulation or order issued hereunder. Any person so damaged by the violation may sue for and recover such damages as the person may show that the person is entitled to receive.
History (3)
  • Acts 1943, ch. 64, § 9
  • C. Supp. 1950, § 5240.9
  • T.C.A. (orig. ed.), § 60-115.
§ 60-1-404. Tennessee board of water quality, oil and gas reclamation fund.
  1. (a) All sums received in payment of penalties assessed by the board pursuant to this part shall be placed in the state treasury in a separate account to be designated as the Tennessee board of water quality, oil and gas reclamation fund.
  2. (b) This fund shall be available to the board for expenditure for site protection and reclamation work on land and waters damaged by surface disturbances. The fund may be expended for such work following default and notice of forfeiture of bond, if the bond furnished by the operator is not sufficient to cover the cost of reclamation. It may also be expended for such work if the operations which caused the damage were not covered by the bond, including operations conducted before January 1, 1988.
  3. (c) This fund shall also be available to the board for expenditure for the plugging of dry or abandoned wells. The fund may be expended for such work, following default and notice of forfeiture, if the bond furnished by the operator is not sufficient to cover the cost of plugging. It also may be expended to plug dry or abandoned wells not covered by a bond, including wells drilled before January 1, 1988.
  4. (d) Any unencumbered or unexpended balance of this fund remaining at the end of any fiscal year together with any interest earned thereon shall not revert to the general fund, but shall be carried forward until expended for the purpose of site protection and reclamation or the plugging of dry or abandoned wells, as provided in this section.
History (3)
  • Acts 1987, ch. 257, § 4
  • 2007, ch. 362, § 9
  • 2013, ch. 94, § 1.
Part 5 Mineral Test Hole Regulatory Act
§ 60-1-501. Short title.
  1. This part shall be known and may be cited as the “Mineral Test Hole Regulatory Act.”
History (1)
  • Acts 1982, ch. 654, § 4.
§ 60-1-502. Purpose.
  1. The purpose of this part is to:
    1. (1) Regulate the drilling of mineral test holes in order to prevent the pollution of potable water resources, both surface and subsurface, as the result of the introduction of undesirable substances, including natural brines, oil, gas, or mineralized waters through the process of the drilling of mineral test holes; and
    2. (2) Provide basic geologic data to the state relating to oil, gas and water occurrences.
History (1)
  • Acts 1982, ch. 654, § 4.
§ 60-1-503. Part definitions.
  1. As used in this part, unless the context otherwise requires:
    1. (1) “Board” means the Tennessee board of water quality, oil and gas;
    2. (2) “For exploratory purposes” means drilling of mineral test holes for the specific purpose of exploring for mineral resources;
    3. (3) “Mineral” means any substance with economic value whether organic or inorganic that can be extracted from the earth, but excluding oil and gas;
    4. (4) “Mineral test hole” means any hole in excess of one hundred feet (100′) drilled during the exploration for minerals but excludes auger drilling in surficial or otherwise unconsolidated material, drilling in conjunction with mining or quarrying operations, drill holes for the exploration of oil and/or gas, water, structural foundations, and seismic surveys;
    5. (5) “Natural brine” means naturally occurring mineralized water other than potable or fresh water;
    6. (6) “Operator” means the person, whether owner or not, supervising or responsible for drilling, operating, repairing, abandoning or plugging of mineral test holes subject to this part;
    7. (7) “Owner” means the person who has or attains the right to drill, convert or operate any mineral test hole subject to this part;
    8. (8) “Person” means any individual, corporation, company, association, joint venture, partnership, receiver, trustee, guardian, executor, administrator, personal representative or private organization of any kind;
    9. (9) “Pollution” means such alteration of the physical, chemical, biological, bacteriological, or radiological properties of the waters, soils, animal, fish and aquatic life or surface property of this state as will:
      1. (A) Result or will likely result in harm, potential harm, or detriment to the public health, safety, or welfare;
      2. (B) Result or will likely result in harm, potential harm, or detriment to the health of animals, birds, fish, or aquatic life;
      3. (C) Render or will likely render the waters, soils, animal, fish and aquatic life or surface property substantially less useful for domestic, municipal, industrial, agricultural, recreational, or other reasonable uses; or
      4. (D) Leave or will likely leave the waters in such condition as to violate any standards of water quality established by the Tennessee board of water quality, oil and gas; and
    10. (10) “Supervisor” means the commissioner or the commissioner's designee.
History (3)
  • Acts 1982, ch. 654, § 4
  • 1992, ch. 693, § 23
  • 2012, ch. 986, § 29.
§ 60-1-504. Administration of part — Powers of supervisor.
  1. (a) The supervisor shall administer and enforce this part.
  2. (b) The supervisor shall exercise the following powers to:
    1. (1) Adopt rules and regulations necessary for the implementation of this part in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5;
    2. (2) Make inspections of drilling operations and require the keeping of accurate records;
    3. (3) Require that the location, drilling, deepening, reworking, reopening, casing and plugging of mineral test holes subject to this part be accomplished in a manner which prevents surface and underground pollution;
    4. (4) Require on all mineral test holes the keeping of data and the filing of such data with the supervisor which are appropriate to the purposes of this chapter. Oil, gas and hydrologic data obtained from the drilling of mineral test holes are deemed appropriate to the purposes of this part. This information shall be held confidential by the supervisor for a period of six (6) months at the request of the operator;
    5. (5) Release to the board for meetings and hearings only data which are necessary to the administration of this part;
    6. (6) Order by written notice, the immediate suspension or prompt correction of any operation, condition, or practice found to exist which is causing or resulting in, or threatening to cause or result in, surface or underground pollution. Orders shall remain in force until cancelled by the supervisor, or modified by the board, or the courts;
    7. (7) Require the filing of adequate surety or security bonds and to provide for the release thereof;
    8. (8) Qualify persons for blanket permits; and
    9. (9) Bring proceedings at law or in equity for the enforcement of this part and rules, regulations or orders promulgated thereunder in the circuit or chancery court of the county in which a violation is alleged to have occurred.
History (2)
  • Acts 1982, ch. 654, § 4
  • 2007, ch. 362, § 10.
§ 60-1-505. Permit required — Fees.
  1. (a) A person shall not drill a mineral test hole for exploratory purposes until the owner, directly or through the owner's authorized representative, files a written application for a permit to drill, files an approved surety or security bond, and receives a permit in accordance with the rules of the supervisor. A fee shall be submitted with the application in an amount to be set in rules to be promulgated by the supervisor not to exceed the amount stated in § 68-203-103(h) for a mineral test hole permit fee. Within ten (10) days after receiving the application and fee, the supervisor shall issue or deny the permit. No permit shall be issued to any owner or owner's authorized representative who is in violation of this part or any rules promulgated thereunder.
  2. (b) Upon request, the supervisor may issue a blanket permit to qualified persons to drill mineral test holes within a limited or local area where an extensive drilling exploration program is planned.
  3. (c) All information pertaining to the application for and issuance of permits for mineral test holes subject to this part shall be held confidential.
History (2)
  • Acts 1982, ch. 654, § 4
  • 2007, ch. 362, §§ 11, 12.
§ 60-1-506. Application of Administrative Procedures Act.
  1. All administrative functions, proceedings and duties of the board relating to this part shall be subject to and conducted in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
History (1)
  • Acts 1982, ch. 654, § 4.
§ 60-1-507. Supervisor to correct problems upon failure of owner, operator or surety.
  1. Whenever the supervisor has determined that an owner or operator has failed or neglected to drill, case, operate, repair or plug a mineral test hole in accordance with this part or the rules or orders adopted hereunder, notice of the determination shall be given to the owner or operator and to the surety executing the bond filed by such owner or operator, along with an order to correct the problem. If the owner or operator, or surety, fails to correct the specified conditions in accordance with the rule or order of the supervisor within sixty (60) days after service of notice, the supervisor may enter into or upon any private or public property on which the well is located, and across any private or public property to reach the mineral test hole, and repair or correct the specified condition, and the owner, operator and surety shall be jointly and severally liable for all expenses incurred. The supervisor shall certify to the owner, operator and surety the claim of the state, listing therein the items of expense in making the repair or correction. The claims shall be paid by the owner or operator, or surety, within thirty (30) days, and, if not paid within that time, the supervisor may bring suit in the circuit or chancery court against the owner, operator and surety, jointly and severally, for the collection.
History (1)
  • Acts 1982, ch. 654, § 4.
§ 60-1-508. Actions prohibited.
  1. It is unlawful for any person to:
    1. (1) Violate any of this part or any rule or order of the supervisor or board;
    2. (2) Make false entry or statement in any required report or record;
    3. (3) Omit or cause to be omitted from any required report or record full, true and correct entries as required by this part;
    4. (4) Fail in providing, within a reasonable time, a copy of any report or record requested by the supervisor; and
    5. (5) Cause surface or subsurface pollution in the drilling, operation, or plugging of mineral test holes subject to this part.
History (1)
  • Acts 1982, ch. 654, § 4.
§ 60-1-509. Civil and criminal penalties.
  1. (a) Any person or operator who violates any of this part or regulations adopted pursuant thereto, or who fails to perform the duties imposed by these provisions or who fails or refuses to obtain a permit as provided herein, or who violates any determination or order promulgated pursuant to this part is liable to a civil penalty of not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000) for each day during which such violation continues, and, in addition, may be enjoined from continuing such violation as hereinafter provided. The penalties shall be assessed and subject to appeal in accordance with § 60-1-401.
  2. (b) It shall be the duty of the district attorneys general in the various judicial districts throughout the state, or the attorney general and reporter, upon the request of the supervisor, to bring an action for the recovery of the penalties herein provided for and to bring an action for a restraining order, temporary or permanent injunction, against any operator or other person violating or threatening to violate any of this part or violating or threatening to violate any order or determination promulgated pursuant to this part.
  3. (c) Any person who willfully and knowingly falsifies any records, information, plans, specifications, or other data required by the board or the supervisor or who willfully fails, neglects, or refuses to comply with any of this part is guilty of a Class C misdemeanor; provided, that no process by warrant, presentment or indictment shall be issued except upon application of the board or commissioner or such application for process authorized by them.
  4. (d) Nothing in this part shall abrogate the right of any person who is materially or personally damaged or injured by the drilling of a mineral test hole to seek remedies against the responsible person in the courts.
History (3)
  • Acts 1982, ch. 654, § 4
  • 1989, ch. 591, § 113
  • 2007, ch. 362, § 13.
§ 60-1-510. Injunctions.
  1. (a) When there is reason to believe that a person is violating or is about to violate or has violated any of this part or any permits or orders issued thereunder, the supervisor may institute proceedings in the chancery court of the county in which the alleged violation occurred for injunctive relief to prevent continuance of such action or to correct the conditions resulting in or about to result therefrom, or both. The court shall grant the injunction without the necessity of showing a lack of adequate remedy at law upon a showing by the supervisor that such person is violating or is about to violate or has violated one (1) or more of the permanent or temporary injunctions, prohibitory or mandatory, and restraining orders.
  2. (b) The supervisor may bring suit for injunctive enforcement of any order made by the supervisor when such order has become final as a result of any person's failure to appeal to the board, and such person has failed to comply with the order. In such suits all findings of fact contained in the order and complaint shall be deemed to be final, and not subject to review except as to receipt of notice of the order, but the defendant may proffer evidence showing that the defendant has in fact complied with the supervisor's order. The order made by the supervisor in such cases shall be prima facie reasonable and valid, and it shall be presumed that the supervisor has complied with all requirements of the law. The board may likewise bring suit for enforcement of any order made by it, which has become final either by failure of any person to appeal the board's order or by an appellate court's decision against any person who fails to comply with such final order. In such suits, the board's decision shall not be subject to challenge as to matters of law or fact, but the violator may proffer evidence showing that the violator has in fact complied with the board's order.
  3. (c) Any suit for an injunction brought by the supervisor shall be filed in the chancery court of the county in which all or a part of the violation is or is about to occur, in the name of the department, by the district attorney general at the direction of the supervisor or the board and under the supervision of the attorney general and reporter. Such proceedings shall not be tried by jury. Appeals from judgments or decrees of the chancery court in proceedings brought under this part shall lie to the supreme court despite the fact that controverted questions of fact may be involved.
History (1)
  • Acts 1982, ch. 654, § 4.
§ 60-1-511. Part supplemental.
  1. This part shall not operate to repeal or affect any of the laws of the state relating to the pollution of the air or waters thereof, or any conservation or mining laws, but shall be held and construed as ancillary and supplemental thereto.
History (1)
  • Acts 1982, ch. 654, § 4.
Part 6 Oil and Gas Surface Owners Compensation
§ 60-1-601. Short title.
  1. This part shall be known as and may be cited as the “Oil and Gas Surface Owners Compensation Act of 1984.”
History (1)
  • Acts 1984, ch. 863, § 2.
§ 60-1-602. Purpose.
  1. (a) The general assembly finds that the exploration for and development of oil and gas reserves must coexist with the equal right to the use, agricultural or otherwise, of the surface of land within this state.
  2. (b) It is the purpose of this part to provide constitutionally permissible protection and compensation to surface owners of land on which oil and gas wells are drilled for the burden resulting from such drilling operations. This part shall be interpreted to benefit surface owners regardless of when any particular oil and gas estate was separated from the surface estate and regardless of who executed that document.
History (1)
  • Acts 1984, ch. 863, § 2.
§ 60-1-603. Part definitions.
  1. For purposes of this part and unless the context clearly requires otherwise, the terms listed below will have the following meaning:
    1. (1) “Drilling operation” means the actual drilling or redrilling of an oil or gas well and the related preparation of the drilling site and access roads, which requires entry upon the surface estate;
    2. (2) “Oil and gas developer” means the person who acquires the oil and gas estate by any legal means for the purpose of extracting therefrom oil or gas;
    3. (3) “Person” means any natural person, corporation, firm, partnership, venture, receiver, trustee, executor, administrator, guardian, fiduciary or other representative of any kind, and includes any government or any political subdivision or agency thereof; and
    4. (4) “Surface owner” means a person who owns an estate in fee in the surface of land overlying an oil and gas estate being developed, either solely or as a co-owner.
History (1)
  • Acts 1984, ch. 863, § 2.
§ 60-1-604. Compensation of surface owners for drilling operations.
  1. The oil and gas developer shall be obligated to pay the surface owner for:
    1. (1) Lost income or expenses incurred as a result of being unable to dedicate land actually occupied by the driller's operation or to which access is prevented by such drilling operation to the uses to which it was dedicated prior to commencement of the activity for which a permit was obtained, measured from the date the operator enters upon the land;
    2. (2) The market value of crops destroyed, damaged or prevented from reaching market;
    3. (3) Any damage to a water supply in use prior to the commencement of the permitted activity;
    4. (4) The cost of repair of personal property up to the value of replacement by personal property of like age, wear and quality; and
    5. (5) The diminution in value, if any, of the surface lands and other property after completion of the surface disturbance done pursuant to the activity for which the permit was issued, determined according to the actual use made thereof by the surface owner immediately prior to the commencement of the permitted activity.
History (1)
  • Acts 1984, ch. 863, § 2.
§ 60-1-605. Notice of claim.
  1. Any surface owner, to receive compensation under this part shall notify by certified mail, return receipt requested, the oil and gas developer of the damages sustained by the person within three (3) years after the injury occurs.
History (1)
  • Acts 1984, ch. 863, § 2.
§ 60-1-606. Response to persons seeking compensation.
  1. Within sixty (60) days after the oil and gas developer receives notice of damages, the oil and gas developer shall make a written response to the person seeking compensation for the damages.
History (1)
  • Acts 1984, ch. 863, § 2.
§ 60-1-607. Arbitration.
  1. (a) If the person seeking compensation receives a written rejection, rejects any counter-offer of the oil and gas developer, or receives no reply, that person may bring an action for compensation in a court of proper jurisdiction or the parties may elect to proceed by arbitration as provided herein. If the amount of compensation awarded by arbitration or the court is greater than that which had been offered by the oil and gas developer, the person seeking compensation shall also be awarded reasonable attorney fees, costs of expert witnesses, any other costs which may be legally assessed, and interest on the amount of the final compensation awarded from the day drilling was commenced.
  2. (b) The person seeking compensation, in place of bringing an action in court, can request of the oil and gas developer in writing by certified mail, return receipt requested, that compensation be determined by binding arbitration. If the oil and gas developer agrees to binding arbitration, the developer shall notify the person seeking compensation of consent to arbitration in writing within fifteen (15) days of receiving the request.
  3. (c)
    1. (1) In the event of binding arbitration, compensation to be awarded the surface owner shall be determined by a disinterested arbitrator chosen by the surface owner and the oil and gas developer from a list of arbitrators approved by the American Arbitration Association.
    2. (2) Such hearings shall be conducted as provided in title 29, chapter 5, part 3.
  4. (d) Each party shall pay one-half (½) the compensation due the arbitrator.
History (1)
  • Acts 1984, ch. 863, § 2.
§ 60-1-608. Common law remedies preserved.
  1. Nothing in this part shall be construed to diminish in any way the common law remedies, including damages, of a surface owner or any other person against the oil and gas developer for the unreasonable, negligent or otherwise wrongful exercise of the contractual right, whether express or implied, to use the surface of the land for the benefit of the developer's interest.
History (1)
  • Acts 1984, ch. 863, § 2.
Part 7 Environmental Protection
§ 60-1-701. Measures by operator at well site.
  1. At the well site, the operator shall take measures to prevent or minimize soil erosion and pollution of surface waters during the life of the operation. Such measures shall include sediment ponds, berms, diversion ditches, hay bales, and other measures designed to prevent erosion and discharge of pollutants from the well site.
History (1)
  • Acts 1987, ch. 257, § 3.
§ 60-1-702. Access roads.
  1. (a) Access roads shall be constructed in such a manner as to reduce erosion to a practical minimum.
  2. (b) Any regulations promulgated pursuant to this part concerning access roads shall be guidelines only and shall not be mandatory.
History (1)
  • Acts 1987, ch. 257, §§ 3, 7.
§ 60-1-703. Manner of accomplishing reclamation of disturbed areas.
  1. Reclamation of all disturbed areas shall be accomplished in the following manner:
    1. (1) The vegetative cover must be diverse, effective, and permanent. It must be capable of long-term stabilization of the soil and must not impede natural vegetative succession or interfere with surrounding vegetative cover;
    2. (2) The permanent reclamation plant species must be capable of self-regeneration and must have the same seasonal characteristics of growth as the original vegetation. A different plant species not having these characteristics may be used to establish a quick-growing, temporary cover to stabilize the disturbed area;
    3. (3) Suitable mulch and soil nutrients shall be applied where necessary to stabilize a regraded area and to establish the vegetative cover;
    4. (4) Except for active work areas, a temporary vegetative cover shall be planted on all disturbed areas within thirty (30) days of the initial disturbance;
    5. (5) Within thirty (30) days of the plugging of a well, the permanent vegetative cover shall be planted on all disturbed areas;
    6. (6) Access roads are subject to all the above reclamation requirements unless the landowner establishes by sworn affidavit that a road will continue to be used for other legitimate purposes and maintained in usable condition, which condition reduces erosion to a practical minimum, by the surface owner. An access road may continue to be used by the operator to gain access to the well site in order to determine the adequacy of the vegetation cover or to perform additional revegetation;
    7. (7) Revegetation success shall not be determined until after two (2) successfully completed growing seasons have occurred; and
    8. (8) Revegetation shall be considered successful if a ground cover of at least ninety percent (90%) herbaceous and/or woody species is achieved, so long as at least eighty percent (80%) are perennial species.
History (1)
  • Acts 1987, ch. 257, § 3.
§ 60-1-704. Release of reclamation bond.
  1. (a) Upon satisfactory completion of regrading and revegetation of all disturbed areas except active work areas and access roads needed for oil or gas production, the supervisor shall release one-third (⅓) of the reclamation bond. After plugging, and upon final reclamation and satisfactory survival of the vegetation through two (2) growing seasons, the supervisor shall release the remainder of the reclamation bond.
  2. (b) For the purposes of this section, “active work area” means that portion of the initially disturbed area necessary for production-related equipment, materials and facilities, as determined by the supervisor.
History (2)
  • Acts 1987, ch. 257, § 3
  • 1989, ch. 352, § 1.
§ 60-1-705. Failure to perform — Forfeiture of bond — Securing performance.
  1. Upon failure of any operator to perform site protection or reclamation activities, as required by this chapter, and notice of default, if the default is not cured within a reasonable time by the operator or the surety, if any, on the operator's bond, the board shall declare the bond forfeited, collect the bond and use the proceeds for the required site protection or reclamation work. The supervisor may contract with any person or public agency to perform the reclamation work. Any portion of the bond not thus expended shall be refunded to the operator or the operator's surety if the conditions of the bond are fully satisfied. If the conditions of the bond are not fully satisfied, because the bond is a blanket bond or otherwise, the unexpended proceeds shall be held or applied in a manner to secure the performance of the remaining obligations secured by the bond. If the bond is a blanket bond and the unexpended portion is less than is required for the remaining wells covered by the bond, a supplementary bond shall be required.
History (1)
  • Acts 1987, ch. 257, § 3.
Chapter 3 Inspection of Volatile Oils
§ 60-3-101. Short title.
  1. This chapter may be cited and referred to as the “Inspection of Volatile Oils Law.”
History (2)
  • Acts 1978, ch. 761, § 1
  • T.C.A., § 67-3201.
§ 60-3-102. Chapter definitions.
  1. As used in this chapter, the following words and phrases shall have the meanings ascribed herein unless the context in which used dictates otherwise:
    1. (1) “Commissioner” means the commissioner of revenue, or the commissioner's authorized delegate;
    2. (2) “Department” means the department of revenue;
    3. (3) “Inspector” means an employee of the petroleum tax division of the department who is designated as such; and
    4. (4) “Oil or substance” means any oil or substance described in §§ 60-3-103 and 60-3-104.
History (2)
  • Acts 1978, ch. 761, § 2
  • T.C.A., § 67-3202.
§ 60-3-103. Minimum standards — Penalty for violation.
  1. (a) It is unlawful for any person to sell or offer for sale, or to bring to rest in Tennessee for consumption, storage, sale or use, any ethanol, methanol, benzol, gasoline, burning oil, distillate, fuel oil, gas oil, kerosene, naphtha, or substitutes for any of these by whatever trade name known, reflecting a gravity of sixteen degrees (16°) or above on the American Petroleum Institute scale or a lower standard of quality than the minimum specifications for the substances published from time to time by the United States government or other recognized authority.
  2. (b) It is unlawful for any person or persons to distill, manufacture, or otherwise produce ethyl alcohol, methane alcohol, or other liquids to be used as a fuel or to be blended as a fuel for combustion engines or heating oil systems without denaturing such liquid no later than immediately following the distilling process by providing for flow of the liquid from the condensing apparatus into a container containing a quantity of the denaturing agent.
  3. (c) It is unlawful to distribute to any manufacturer, wholesaler, or retailer in this state ethyl alcohol, methane alcohol, or other liquids to be blended as a fuel for combustion engines or heating oil systems, in any container of fifty-five gallons (55 gals.) or less, unless such container is prominently labelled with the words “POISON: UNSAFE FOR HUMAN CONSUMPTION”.
  4. (d) The denaturing agent used shall be determined by the commissioner or the commissioner's designated agent.
  5. (e) Each separate violation of a provision of this section is a Class C misdemeanor.
Backlinks (4)
History (5)
  • Acts 1978, ch. 761, § 3
  • 1980, ch. 786, § 4
  • 1983, ch. 144, §§ 1, 2
  • T.C.A., § 67-3203
  • Acts 1989, ch. 591, § 113.
§ 60-3-104. Oils and substances subject to inspection.
  1. (a) All ethanol, methanol, benzol, gasoline, burning oil, distillate, fuel oil, gas oil, kerosene, naphtha, or any other volatile substances, reflecting a gravity of sixteen degrees (16°) or above on the American Petroleum Institute scale, with the exception of those substances with a kinematic viscosity greater than seventy (70) centistokes at one hundred twenty-two degrees Fahrenheit (122° F) and a flash point greater than one hundred fifty degrees Fahrenheit (150° F), produced from petroleum, natural gas, oil shales or coal, by whatever trade name known, or substitutes therefor, or any other petroleum substances used as a substitute for or in the place of any of the substances herein enumerated sold or used or stored in this state, separately or in combination for any purpose whatever, by any user or storer, whether manufactured in this state or not, shall be subject to inspection under the general supervision of the commissioner before being sold or offered for sale or used or stored in this state.
  2. (b) Oils and substances subject to inspection as provided in subsection (a) may be inspected in transit while in the hands of the carrier, forwarding agent, or warehouseman. It is unlawful for any carrier, forwarding agent or warehouseman to unload or store any of the oils or substances before having the same inspected as provided in this section.
Backlinks (2)
History (3)
  • Acts 1978, ch. 761, § 4
  • 1980, ch. 786, § 5
  • T.C.A., § 67-3204.
§ 60-3-105. Examination and testing — Records regarding transportation of substances — Rules and regulations.
  1. (a) The commissioner is authorized to examine and test, within this state, all oils and substances before the same are sold, offered for sale, used or stored in this state.
  2. (b) It is the duty of all persons handling, transporting or storing oils or substances within this state to retain records or intelligible memoranda or books subject to inspection by an inspector covering the movements of the oils or substances in this state. The records shall be retained for a period of three (3) years following the end of the year in which the records were originated.
  3. (c) The commissioner is authorized to examine and test all oils and substances for which there is a duty imposed upon the commissioner under this chapter, and also any products submitted to the commissioner, to determine whether the minimum standards imposed by § 60-3-103 are met and also to determine the value of such products for the purpose claimed.
  4. (d) The commissioner shall make and publish rules necessary to effectuate an efficient and uniform system of inspection of oils and substances.
  5. (e) The commissioner may prescribe standard minimum specifications for oils and substances and may promulgate rules for the uniform inspection of them. All tests shall conform to and be made under conditions and rules adopted by American Society for Testing Materials.
  6. (f) The gravity, purity and test of oils and substances shall be determined in the manner and under the regulations as the commissioner may specify.
  7. (g) The commissioner may purchase the apparatus for making chemical and physical tests of oils and substances, and may make any tests as are called for by this chapter, or as, in the judgment of the commissioner, are deemed essential for better enforcement and to afford full protection to the public.
History (2)
  • Acts 1978, ch. 761, § 5
  • T.C.A., § 67-3205.
§ 60-3-106. Marking of receptacles, tanks and pumps — Unlawful removal of notices or placards.
  1. (a) After making any examination and test, the commissioner may affix to the receptacle, tank, pump, or other container, containing oils or substances inspected, such identification or caution notices as the commissioner may designate. It is unlawful for any person to remove the identification or caution notice without authorization of the commissioner.
  2. (b) When any receptacle, tank, pump or other container is found by the commissioner to contain any oil or substance that does not meet the minimum specifications, it shall be the commissioner's duty to attach and seal thereto a placard bearing in bold letters a description of the substance and a warning that it is condemned and does not meet Tennessee specifications. It is unlawful for any person to remove, obscure or deface any condemnation placard described herein without the written consent of the commissioner, or in any manner to interfere with or obstruct the commissioner in the discharge of any of the commissioner's duties under this chapter.
  3. (c) A violation of this section is a Class C misdemeanor.
History (3)
  • Acts 1978, ch. 761, § 6
  • T.C.A., § 67-3206
  • Acts 1989, ch. 591, § 113.
§ 60-3-107. Marking of gross weight — Fluids having no proper test.
  1. If weight shall be established for the purpose of ascertaining quantity, instead of gauging by gallons, then the inspector shall mark on the container inspected by the inspector the gross weight instead of gallons. In addition, the inspector shall affix the inspector's brand on all containers or packages found by the inspector to contain fluids that have no proper test with the words “highly inflammable,” or with other words which properly reflect the conditions as found by the inspector.
History (2)
  • Acts 1978, ch. 761, § 7
  • T.C.A., § 67-3207.
§ 60-3-108. Unlawful alteration of markings.
  1. (a) It is unlawful for any manufacturer or dealer of oils or substances, with intent to deceive or defraud, to alter or erase the inspector's brand, to indicate a different test, gravity, purity or quantity than is found by the inspector, or to use with such intent any container or package having any inspector's brand thereon, without having the contents actually inspected.
  2. (b) A violation of this section is a Class C misdemeanor.
History (3)
  • Acts 1978, ch. 761, § 8
  • T.C.A., § 67-3208
  • Acts 1989, ch. 591, § 113.
§ 60-3-109. Identification and disposition of condemned oils or substances.
  1. Where any shipment of oils or substances is sent from another state for consumption in this state, and the same, upon inspection by an inspector, is found to be of less test than required or is otherwise indicated to be either unsafe for use or of a lower standard of quality than the minimum specifications for the oil or substance, as published by the commissioner, the commissioner is authorized to condemn the oils or substances, to mark or otherwise indicate the shipment is rejected for use in this state, and to order that the rejected oils or substances be shipped back to the shippers of the same.
History (2)
  • Acts 1978, ch. 761, § 9
  • T.C.A., § 67-3209.
§ 60-3-110. Inspection of oils held for export.
  1. Whenever any oil or substance is stored in this state, or has come to rest after shipment in interstate commerce and is stored in this state, and such oil or substance is subsequently exported to a point outside this state, it shall be subject to inspection under this part.
History (2)
  • Acts 1978, ch. 761, § 10
  • T.C.A., § 67-3210.
§ 60-3-111. Records of inspectors — Daily reports — Locking and sealing valves — Unlawful breaking of locks or seals.
  1. (a) Inspectors shall keep an accurate record of all oils and substances inspected, rejected, or certified to by them, which record shall state the date of the inspection, the number of gallons approved, the number rejected, if any, the name of the person for whom inspected, and the name and address of the person to whom consigned.
  2. (b) Inspectors are authorized to lock and seal any or all valves at bulk plants or river terminals; and in no case shall any lock or seal which has been affixed by an inspector to a valve be opened except in the presence of an inspector.
  3. (c)
    1. (1) It is unlawful for any person to break a lock or seal in violation of this section.
    2. (2) A violation of this subsection (c) is a Class C misdemeanor.
History (3)
  • Acts 1978, ch. 761, § 11
  • T.C.A., § 67-3211
  • Acts 1989, ch. 591, § 113.
§ 60-3-112. Storage, unloading, or sale before inspection.
  1. (a) If any person, manufacturer or dealer shall store, unload or sell to any person in the state any oil or substance before having the same inspected, as provided in this chapter, the oil or substance stored, unloaded or sold shall be subject to the gasoline tax, which tax shall be collected in the same manner as now provided by law for the collection of the gasoline tax.
  2. (b) Any of the oils or substances found to be rejected may be forfeited and sold, and the proceeds shall go to the common school fund of the state.
History (2)
  • Acts 1978, ch. 761, § 12
  • T.C.A., § 67-3212.
§ 60-3-113. Prohibited acts.
  1. (a) It is unlawful for any dealer, distributor or manufacturer of oils or substances to refuse to admit an inspector upon the dealer's, distributor's or manufacturer's premises, to such extent as it may be necessary for the performance of the inspector's duties, or to obstruct an inspector in the discharge of the inspector's duties.
  2. (b) It is unlawful for any person to mix, for sale, naphtha and other such oils or substances or same with any corrosive substance, or to knowingly sell, or keep for sale, or offer for sale, the mixture, or to sell, or offer for sale any products which are not of required test.
  3. (c) It is unlawful for any person to violate any of the other provisions of this part with the intent of obstructing the commissioner or delegate in the performance of the commissioner's or delegate's duties under this chapter.
  4. (d) A violation of this section is a Class C misdemeanor.
History (3)
  • Acts 1978, ch. 761, § 13
  • T.C.A., § 67-3213
  • Acts 1989, ch. 591, § 113.
§ 60-3-114. Report and prosecution of violation — Disposition of fine.
  1. (a) It is the duty of any inspector, or any other person having cognizance of any violation of this chapter, to make complaint forthwith against the person so offending to the district attorney for the county in which the offense is alleged to have been committed.
  2. (b) It is the duty of the district attorney to represent and prosecute, on behalf of the state, all cases of offense arising under this chapter and within any county under the district attorney's jurisdiction.
  3. (c) All prosecutions for fines and penalties under the criminal provisions of this chapter shall be by indictment or presentment and when collected shall be paid over to the state treasurer, one-fourth (¼) of which shall be paid to the informer, and three-fourths (¾) placed into the general fund.
Backlinks (1)
History (2)
  • Acts 1978, ch. 761, § 14
  • T.C.A., § 67-3214.
§ 60-3-115. Alternative testing standard to American Petroleum Institute scale — Penalty for furnishing calibration tables on storage tanks.
  1. (a) If the commissioner finds that the American Petroleum Institute scale standard is impractical or outdated for purposes of testing volatile oils and substances, the commissioner may by rule provide for an alternative testing standard to that set out in §§ 60-3-103 and 60-3-104. The alternative standard must conform to and be made under the conditions and rules adopted by the American Society for Testing Materials and shall be promulgated as a rule in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
  2. (b) It is a Class C misdemeanor to furnish calibration tables on storage tanks.
History (3)
  • Acts 1978, ch. 761, § 15
  • T.C.A., § 67-3215
  • Acts 1989, ch. 591, § 113.
Chapter 4 Production of Fuel Alcohol
§ 60-4-101. Licensing of fuel alcohol producers.
  1. (a) Except as provided by subsection (c), in this state every producer of fuel alcohol as defined in [former] § 67-3-602 [repealed], shall be licensed annually by the department of revenue on forms approved by the commissioner.
  2. (b) Every producer of fuel alcohol shall be subjected to the following annual license fee:
    1. (1) Production of one thousand gallons (1,000 gals.) up to two thousand and five hundred gallons (2,500 gals.) annually shall require a fifty dollar ($50.00) licensing fee; and
    2. (2) Production of over two thousand and five hundred gallons (2,500 gals.) of fuel alcohol annually shall require a one hundred dollar ($100) licensing fee.
  3. (c) Production of up to one thousand gallons (1,000 gals.) of fuel alcohol annually shall require no license fee. However, anyone producing less than one thousand gallons (1,000 gals.) per year shall be required to notify the department in writing of any intention to produce fuel alcohol before such production occurs.
  4. (d) All fees shall be collected by the commissioner or the commissioner's designated agent; all license application and fee information shall be accessible to the alcoholic beverage commission in such form and manner as prescribed by the commissioner.
  5. (e) It is unlawful for any producer to fail to comply with subsections (a)-(c), and any person found guilty of doing so shall be punished by a fine of not less than fifty dollars ($50.00) and not more than the maximum fine provided under the general law for the commission of a misdemeanor.
  6. (f) The commissioner shall have the authority to establish rules and regulations relating to the licensing of producers of fuel alcohol.
History (2)
  • Acts 1980, ch. 786, § 7
  • T.C.A., § 67-39-101.
§ 60-4-102. Taxation of fuel alcohol — Rules and regulations concerning use and production.
  1. (a) Chapter 3 of this title and [former] title 67, chapter 3, parts 1-9 [repealed] shall apply to fuel alcohol. A person producing fuel alcohol for personal use in combustion engines or heating oil systems shall not be considered a distributor or a dealer within the meaning of chapter 3 of this title and [former] title 67, chapter 3, parts 1-9 [repealed]. If a person sells fuel alcohol, such person shall be deemed a distributor unless the fuel alcohol is sold to a bonded distributor or its lawful agents who must assume reporting and payment of all taxes due on such fuel alcohol.
  2. (b) The commissioner shall have the authority to establish rules and regulations concerning the use and production of fuel alcohol, for the administration of subsection (a).
History (2)
  • Acts 1980, ch. 786, § 8
  • T.C.A., § 67-39-102.