SF 2530

2nd Engrossment - 94th Legislature (2025 - 2026)

Posted on 05/01/2025 09:21 a.m.

A bill for an act
relating to natural resources; facilitating the orderly and environmentally responsible
development of the state's gas resources; requiring rulemaking; appropriating
money; providing criminal penalties; amending Minnesota Statutes 2024, sections
11A.236; 86A.05, subdivision 6; 93.513; 93.514; 93.516, subdivision 3, by adding
a subdivision; 93.55, subdivision 1a; 103I.001; 103I.005, subdivisions 9, 21, by
adding subdivisions; 103I.601, subdivision 1, by adding subdivisions; proposing
coding for new law in Minnesota Statutes, chapters 93; 103I.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

NATURAL RESOURCES

Section 1.

Minnesota Statutes 2024, section 11A.236, is amended to read:

11A.236 ACCOUNT TO INVEST FINANCIAL ASSURANCE MONEY FROM
PERMITS TO MINE new text begin AND GAS RESOURCE DEVELOPMENT PERMITS new text end .

Subdivision 1.

Establishment; appropriation.

(a) The State Board of Investment, when
requested by the commissioner of natural resources, may invest money collected by the
commissioner as part of financial assurance provided under a permit to mine new text begin or gas resource
development permit new text end issued under chapter 93. The State Board of Investment may establish
one or more accounts into which money may be deposited for the purposes of this section,
subject to the policies and procedures of the State Board of Investment. Use of any money
in the account is restricted to the financial assurance purposes identified in sections 93.46
to deleted text begin 93.51 deleted text end new text begin 93.5182 new text end and rules adopted thereunder and as authorized under any trust fund
agreements or other conditions established under a permit to mine new text begin or gas resource
development permit new text end .

(b) Money in an account established under paragraph (a) is appropriated to the
commissioner of natural resources for the purposes for which the account is established
under this section.

Subd. 2.

Account maintenance and investment.

(a) The commissioner of natural
resources may deposit money in the appropriate account and may withdraw money from
the appropriate account for the financial assurance purposes identified in sections 93.46 to
deleted text begin 93.51 deleted text end new text begin 93.5182 new text end and rules adopted thereunder and as authorized under any trust fund
agreements or other conditions established under the permit to mine new text begin or gas resource
development permit new text end for which the financial assurance is provided, subject to the policies
and procedures of the State Board of Investment.

(b) Investment strategies related to an account established under this section must be
determined jointly by the commissioner of natural resources and the executive director of
the State Board of Investment. The authorized investments for an account are the investments
authorized under section 11A.24 that are made available for investment by the State Board
of Investment.

(c) Investment transactions must be at a time and in a manner determined by the executive
director of the State Board of Investment. Decisions to withdraw money from the account
must be determined by the commissioner of natural resources, subject to the policies and
procedures of the State Board of Investment. Investment earnings must be credited to the
appropriate account for financial assurance under the identified permit to mine new text begin or gas
resource development permit new text end .

(d) The commissioner of natural resources may terminate an account at any time, so
long as the termination is in accordance with applicable statutes, rules, trust fund agreements,
or other conditions established under the permit to mine new text begin or gas resource development permit new text end ,
subject to the policies and procedures of the State Board of Investment.

Sec. 2.

Minnesota Statutes 2024, section 86A.05, subdivision 6, is amended to read:

Subd. 6.

State wilderness area; purpose; resource and site qualifications;
administration.

(a) A state wilderness area shall be established to preserve, in a natural
wild and undeveloped condition, areas which offer outstanding opportunities for solitude
and primitive types of outdoor recreation.

(b) No unit shall be authorized as a state wilderness area unless its proposed location
substantially satisfies the following criteria: appears to have been primarily affected by the
forces of nature, with the evidence of humanity being substantially unnoticeable or where
the evidence of humanity may be eliminated by restoration.

(c) State wilderness areas shall be administered by the commissioner of natural resources
in a manner which is consistent with the purposes of this subdivision, and shall be managed
only to the extent necessary to control fire, insects, and disease, and to preserve existing
wilderness or reestablish wilderness conditions. There shall be no development of public
roads, permanent dwellings, or recreational facilities except trails for nonmotorized traffic.
Motorized traffic shall not be allowed. No commercial utilization of timber or minerals
shall be allowed new text begin , except for gas resources that are commercially developed without disturbing
the surface new text end . Facilities existing at the time of establishment shall be removed.

Sec. 3.

Minnesota Statutes 2024, section 93.513, is amended to read:

93.513 PROHIBITION ON PRODUCTION OF deleted text begin GAS OR deleted text end OIL WITHOUT PERMIT.

Subdivision 1.

Permit required.

Except as provided in section 103I.681, a person must
not engage in or carry out production of deleted text begin gas or deleted text end oil from consolidated or unconsolidated
formations in the state unless the person has first obtained a permit for the production of
deleted text begin gas or deleted text end oil from the commissioner of natural resources. Any permit under this section must
be protective of natural resources and require a demonstration of control of the extraction
area through ownership, lease, or agreement. deleted text begin For purposes of this section, "gas" includes
both hydrocarbon and nonhydrocarbon gases. deleted text end For purposes of this section, "production"
includes extraction and beneficiation of deleted text begin gas or deleted text end oil.

deleted text begin Subd. 2. deleted text end

deleted text begin Moratorium. deleted text end

deleted text begin Until rules are adopted under section 93.514, the commissioner
may not grant a permit for the production of gas or oil unless the legislature approves a
temporary permit framework that allows issuance of temporary permits.
deleted text end

Sec. 4.

Minnesota Statutes 2024, section 93.514, is amended to read:

93.514 GAS AND OIL PRODUCTION RULEMAKING.

(a) The following agencies may adopt rules governing gas and oil exploration or
production, as applicable:

(1) the commissioner of the Pollution Control Agency may adopt or amend rules
regulating air emissions; water discharges, including stormwater management; and storage
tanks as they pertain to gas and oil production;

deleted text begin (2) the commissioner of health may adopt or amend rules on groundwater and surface
water protection, exploratory boring construction, drilling registration and licensure, and
inspections as they pertain to the exploration and appraisal of gas and oil resources;
deleted text end

deleted text begin (3) deleted text end new text begin (2) new text end the Environmental Quality Board may adopt or amend rules to establish mandatory
categories for environmental review as they pertain to gas and oil production;

deleted text begin (4) deleted text end new text begin (3) new text end the commissioner of natural resources must adopt or amend rules pertaining to
deleted text begin the conversion of an exploratory boring to a production well, deleted text end pooling, spacing, unitization,
deleted text begin well abandonment, deleted text end siting, financial assurance, deleted text begin and deleted text end reclamation new text begin , and leasing state mineral
interests new text end for the production of gas and oil; and

deleted text begin (5) deleted text end new text begin (4) new text end the commissioner of labor and industry may adopt or amend rules to protect
workers from exposure and other potential hazards from gas and oil production.

(b) An agency adopting rules under this section must use the expedited procedure in
section 14.389. Rules adopted or amended under this authority are exempt from the 18-month
time limit under section 14.125. The agency must publish notice of intent to adopt expedited
rules within 24 months of May 22, 2024.

(c) For purposes of this section, "gas" includes both hydrocarbon and nonhydrocarbon
gases. "Production" includes extraction and beneficiation of gas or oil from consolidated
or unconsolidated formations in the state.

(d) Any grant of rulemaking authority in this section is in addition to existing rulemaking
authority and does not replace, impair, or interfere with any existing rulemaking authority.

Sec. 5.

Minnesota Statutes 2024, section 93.516, subdivision 3, is amended to read:

Subd. 3.

Lease terms.

The commissioner must negotiate the terms of each lease entered
into under this section on a case-by-case basis, taking into account the unique geological
and environmental aspects of each proposal, control of adjacent lands, and the best interests
of the state. A lease entered into under this section must be consistent with the following:

(1) the primary term of the lease may not exceed five years plus the unexpired portion
of the calendar year in which the lease is issued. The commissioner and applicant may
negotiate the conditions by which the lease may be extended beyond the primary term, in
whole or in part;

(2) a bonus consideration of not less than $15 per acre must be paid by the applicant to
the Department of Natural Resources before the lease is executed;

(3) the commissioner of natural resources may require an applicant to provide financial
assurance to ensure payment of any damages resulting from the production of gas or oil;

(4) the rental rates must not be less than $5 per acre per year for the unexpired portion
of the calendar year in which the lease is issued and in years thereafter; and

(5) on gas and oil produced and sold by the lessee from the lease area, the lessee must
pay a production royalty to the Department of Natural Resources of not less than 18.75
percent of the gross sales price of the product sold free on board at the delivery point deleted text begin , and
the royalty must be credited as provided in section 93.22 deleted text end . For purposes of this section, "gross
sales price" means the total consideration paid by the first purchaser that is not an affiliate
of the lessee for gas or oil produced from the leased premises.

Sec. 6.

Minnesota Statutes 2024, section 93.516, is amended by adding a subdivision to
read:

new text begin Subd. 4. new text end

new text begin Disposition of payments. new text end

new text begin Payments made under this section as a bonus
consideration, rental, or royalty must be made to the Department of Natural Resources and
must be credited as provided in section 93.22.
new text end

Sec. 7.

new text begin [93.517] DECLARATION OF POLICY.
new text end

new text begin It is the policy of the state to provide for the beneficial and orderly development of the
state's gas resources through laws and policies that:
new text end

new text begin (1) avoid drilling unnecessary wells by establishing spacing units that regulate the density
of drilling, pooling units that combine tracts and mineral interests, and implementing rules
for utilizing gas reservoirs;
new text end

new text begin (2) prevent waste;
new text end

new text begin (3) protect correlative rights;
new text end

new text begin (4) provide for reclamation of gas resource development locations in a manner that
controls adverse environmental effects and preserves the state's natural resources, both in
the interest of the general welfare and as an exercise of the police power of the state;
new text end

new text begin (5) encourage planning for future land utilization; and
new text end

new text begin (6) recognize the beneficial aspects of gas resource development.
new text end

Sec. 8.

new text begin [93.5171] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin The definitions in this section apply to sections 93.517 to
93.5182.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of natural resources.
new text end

new text begin Subd. 3. new text end

new text begin Contingency reclamation plan. new text end

new text begin "Contingency reclamation plan" means a plan
that:
new text end

new text begin (1) identifies reclamation activities, including closure and postclosure maintenance work,
to be implemented by the permittee if operations cease or if producing gas wells are idled
for more than 36 months; and
new text end

new text begin (2) includes the methods, sequence, and schedule of reclamation activities, maps and
cross sections that depict gas resource development locations both before and after
reclamation activities are completed, and cost estimates necessary to implement the
contingency reclamation plan.
new text end

new text begin Subd. 4. new text end

new text begin Corrective action. new text end

new text begin "Corrective action" means the immediate action that must
be taken to correct an observed violation of the gas resource development permit. Corrective
action may consist of immediately curing the violation or submitting within two weeks a
corrective action plan for approval before the permittee implements actions to correct an
observed violation.
new text end

new text begin Subd. 5. new text end

new text begin Correlative rights. new text end

new text begin "Correlative rights" means the right of each owner and
producer in a common pool or source of supply of gas resources to an equal opportunity to
obtain and produce the owner's or producer's just and equitable share of the gas resources
underlying the pool or source of supply.
new text end

new text begin Subd. 6. new text end

new text begin Department. new text end

new text begin "Department" means the Department of Natural Resources.
new text end

new text begin Subd. 7. new text end

new text begin Exploration and production waste. new text end

new text begin "Exploration and production waste" means
waste that is associated with operations to locate or remove gas resources from the ground
or to remove impurities from such substances and that is uniquely associated with and
intrinsic to gas exploration, development, or production operations that are exempt from
regulation under Subtitle C of the Resource Conservation and Recovery Act, United States
Code, title 42, section 6921, et seq.
new text end

new text begin Subd. 8. new text end

new text begin Gas. new text end

new text begin "Gas" means both hydrocarbon and nonhydrocarbon gas.
new text end

new text begin Subd. 9. new text end

new text begin Gas resource development facility. new text end

new text begin "Gas resource development facility" means
equipment or improvements used or installed for exploring, producing, withdrawing, treating,
or processing gas resources.
new text end

new text begin Subd. 10. new text end

new text begin Gas resource development location. new text end

new text begin "Gas resource development location"
means a definable area where an operator has disturbed or intends to disturb the land surface
to locate a gas resource development facility.
new text end

new text begin Subd. 11. new text end

new text begin Gas resource development operations. new text end

new text begin "Gas resource development
operations" means exploring for gas resources by drilling exploratory borings; siting, drilling,
deepening, recompleting, reworking, or abandoning a gas well; producing operations related
to any gas well, including installing flow lines; generating, transporting, storing, treating,
or disposing of exploration and production wastes; and any construction, site preparation,
or reclamation activities associated with such operations.
new text end

new text begin Subd. 12. new text end

new text begin Gas resource development plan. new text end

new text begin "Gas resource development plan" means
a plan to develop gas resources at one or more gas resource development locations.
new text end

new text begin Subd. 13. new text end

new text begin Gas well. new text end

new text begin "Gas well" means a gas well, as defined in section 103I.005,
subdivision 10b, that is sited at a gas resource development location.
new text end

new text begin Subd. 14. new text end

new text begin Interested party. new text end

new text begin "Interested party" means a person with an ownership or
leasehold interest in real property or in severed mineral interests.
new text end

new text begin Subd. 15. new text end

new text begin Natural resources. new text end

new text begin "Natural resources" has the meaning given in section
116B.02, subdivision 4.
new text end

new text begin Subd. 16. new text end

new text begin Notice. new text end

new text begin "Notice" means publishing the information required by the
commissioner at least once in each of the following at least 60 days but not more than 180
days before a public meeting:
new text end

new text begin (1) the State Register;
new text end

new text begin (2) the EQB Monitor;
new text end

new text begin (3) the department's website; and
new text end

new text begin (4) one of the following:
new text end

new text begin (i) a qualified newspaper as defined in chapter 331A that has its known office of issue
in the county seat of the county where the lands at issue are located; or
new text end

new text begin (ii) if no qualified newspaper has its known office of issue in the county seat of a
particular county, the qualified newspaper designated as the publisher of the official
proceedings of the county board of that county.
new text end

new text begin Subd. 17. new text end

new text begin Operator. new text end

new text begin "Operator" means an owner or lessee of mineral interests engaged
in or preparing to engage in gas resource development operations.
new text end

new text begin Subd. 18. new text end

new text begin Permittee. new text end

new text begin "Permittee" means a person who holds a gas resource development
permit.
new text end

new text begin Subd. 19. new text end

new text begin Person. new text end

new text begin "Person" includes individuals, firms, partnerships, corporations, and
other groups.
new text end

new text begin Subd. 20. new text end

new text begin Reclamation. new text end

new text begin "Reclamation" means the actions required to comply with
sections 93.517 to 93.5182 regarding decommissioning a gas resource development facility
and restoring any associated gas resource development locations.
new text end

new text begin Subd. 21. new text end

new text begin Spacing order. new text end

new text begin "Spacing order" means the act by the commissioner of
allocating lands to a spacing unit.
new text end

new text begin Subd. 22. new text end

new text begin Spacing unit or unit. new text end

new text begin "Spacing unit" or "unit" means lands allocated by the
commissioner to a single gas well or multiple gas wells for developing gas resources under
a spacing order.
new text end

Sec. 9.

new text begin [93.5172] SPACING UNIT.
new text end

new text begin Subdivision 1. new text end

new text begin Spacing unit. new text end

new text begin An operator must propose to the commissioner a new
spacing unit for each gas well or set of gas wells that the operator plans to drill at a gas
resource development location. A spacing unit must include the maximum area that can be
efficiently and effectively drained by the operator's well or set of wells. The minimum area
of a proposed spacing unit is a quarter-quarter section of land.
new text end

new text begin Subd. 2. new text end

new text begin Spacing unit application. new text end

new text begin An operator must apply to the commissioner for a
spacing unit under this section. An operator must submit with the application a certified
check, cashier's check, or bank money order payable to the Department of Natural Resources
in the sum of $100 as a fee for filing the application. The application fee must not be refunded
under any circumstances. The state reserves the right to reject any or all applications for a
spacing unit. The commissioner must prescribe the information to be included in a spacing
unit application. Until the commissioner adopts rules regarding spacing, a spacing unit
application must include but is not limited to:
new text end

new text begin (1) for at least one portion of a mineral tract within the proposed unit, documentation
showing the applicant's status as an owner or lessee within the unit. Acceptable forms of
documentation include but are not limited to:
new text end

new text begin (i) a mineral deed;
new text end

new text begin (ii) a mineral lease or memorandum of lease;
new text end

new text begin (iii) any other agreement confirming the applicant's right to drill into and produce from
a pool or a memorandum of such agreement; or
new text end

new text begin (iv) for federal minerals, certification that the applicant will comply with any applicable
federal unit agreement or communitization agreement requirements;
new text end

new text begin (2) certification that the operations in the spacing unit will be conducted in a reasonable
manner to protect and minimize adverse impacts to public health, safety, and welfare; the
environment; and wildlife resources;
new text end

new text begin (3) a description of the unit boundary and, if proposing more than one well within a
spacing unit, the setback distances between each well;
new text end

new text begin (4) geologic and operational data used by the operator to establish the boundaries of a
spacing unit;
new text end

new text begin (5) the total number of wells within the proposed unit;
new text end

new text begin (6) the gas resource development locations that are proposed for the unit; and
new text end

new text begin (7) identification of the associated gas resource development permit application. If the
proposed spacing unit and drilling operations are tied to an existing gas resource development
plan, the operator must identify both the approved plan and associated application for a
permit amendment.
new text end

new text begin Subd. 3. new text end

new text begin Establishing spacing unit. new text end

new text begin (a) After notice and a public meeting in the county
or counties where the proposed spacing unit is located, the commissioner may establish
spacing units by issuing a spacing order. The commissioner may modify the size or shape
of the spacing unit proposed in the application.
new text end

new text begin (b) Until the commissioner adopts rules regarding spacing, in determining whether to
approve, approve with modifications, or deny a proposed spacing unit, the commissioner
must consider whether the proposed spacing unit:
new text end

new text begin (1) prevents waste of gas resources;
new text end

new text begin (2) avoids drilling unnecessary wells; and
new text end

new text begin (3) protects correlative rights.
new text end

new text begin Subd. 4. new text end

new text begin Amending established spacing unit. new text end

new text begin (a) The commissioner may amend or
modify a spacing unit established under a spacing order upon application or upon the
commissioner's own initiative. The size of the established spacing unit may be decreased
or increased or additional wells permitted to be drilled within the established unit to prevent
or assist in preventing waste, to avoid drilling unnecessary wells, or to protect correlative
rights.
new text end

new text begin (b) An operator or interested party may file an application to amend an established
spacing unit with the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Temporary exploratory spacing unit. new text end

new text begin If the commissioner is unable to
determine, based on information in the spacing unit application or presented at the public
meeting, the existence of a pool, the appropriate acreage to be included within a spacing
unit, or the shape of the spacing unit, the commissioner may establish an exploratory spacing
unit to obtain evidence as to the existence of a pool and the appropriate size and shape of
the spacing unit to be applied to the pool. In establishing the size and shape of the exploratory
spacing unit, the commissioner may consider, but is not limited to considering, the size and
shape of spacing units previously established by the commissioner for the same gas-bearing
rock units in other areas of the same geologic rock formation.
new text end

new text begin Subd. 6. new text end

new text begin Appeals. new text end

new text begin Spacing orders issued by the commissioner may be appealed according
to section 93.5181.
new text end

Sec. 10.

new text begin [93.5173] POOLING.
new text end

new text begin Subdivision 1. new text end

new text begin Voluntary pooling. new text end

new text begin When two or more separately owned tracts, including
any state-owned tracts, are embraced within a spacing unit or when there are separately
owned interests in all or a part of a spacing unit, the persons owning the interests may pool
their interests for developing and operating the spacing unit.
new text end

new text begin Subd. 2. new text end

new text begin Involuntary pooling. new text end

new text begin In the absence of voluntary pooling, the commissioner,
upon the application of a person that owns or leases at least 50 percent of the mineral interests
to be pooled, may issue an order pooling all interests in the spacing unit, including those
interests of nonconsenting owners, for developing and operating the spacing unit. The
commissioner must issue a draft pooling order after notice and a public meeting in the
county or counties where the pooling area is located. The order must be upon terms and
conditions that protect all owners' correlative rights and that afford to the owner of each
tract or interest in the spacing unit the opportunity to recover or receive, without unnecessary
expense, a just and equitable share of the gas resources underlying the pool or source of
supply. The goal of a pooling order is to allow for equitable and efficient development of
gas resources while minimizing waste and the drilling of unnecessary wells. The
commissioner must serve a copy of a draft pooling order by certified mail on all owners
listed in the affidavit provided under subdivision 3. The applicant, any party served with
the order, or any interested party within the spacing unit may demand a contested case
hearing within 30 days of the date of mailing. The contested case hearing must be conducted
according to chapter 14. After the contested case hearing, if any, the commissioner must
issue a final order.
new text end

new text begin Subd. 3. new text end

new text begin Pooling order application. new text end

new text begin (a) An operator must submit an application for a
pooling order under this section to the commissioner. An operator must submit with the
application a certified check, cashier's check, or bank money order payable to the Department
of Natural Resources in the sum of $100 as a fee for filing the application. The application
fee must not be refunded under any circumstances. The state reserves the right to reject any
or all applications for a pooling order. The commissioner must prescribe the information
to be included in a pooling order application.
new text end

new text begin (b) Until the commissioner adopts rules regarding applications for pooling orders, an
application for a pooling order must include at least:
new text end

new text begin (1) proof that the applicant controls at least 50 percent of the mineral interests to be
pooled;
new text end

new text begin (2) a map showing the location of ownership interests within the spacing unit;
new text end

new text begin (3) identification of mineral interests within the spacing unit that the applicant does not
own or lease and the location of and owner's name and address for all such interests; and
new text end

new text begin (4) an affidavit by the applicant that the applicant made a good faith effort to lease the
mineral interests identified in clause (3) within the spacing unit, which must contain
information as to any lease offer made to a mineral interest owner or efforts to contact a
mineral interest owner.
new text end

new text begin Subd. 4. new text end

new text begin Drilling and extraction prohibited before pooling order issued. new text end

new text begin If a spacing
unit contains the mineral interests of any unleased mineral interest owner who has rejected
an offer to lease, an operator must not drill or extract gas resources from the spacing unit
before the commissioner issues a pooling order.
new text end

new text begin Subd. 5. new text end

new text begin Lands excluded from pooling order. new text end

new text begin (a) Notwithstanding any provision in
this section to the contrary, the commissioner must not issue a pooling order that pools the
mineral interests of an unleased mineral interest owner if the owner is:
new text end

new text begin (1) the federal government;
new text end

new text begin (2) an American Indian Tribe or Band; or
new text end

new text begin (3) a Tribal member and the land is located within that Tribe's reservation or community.
new text end

new text begin (b) If a pooling order application proposes to pool mineral interests described in paragraph
(a), the commissioner must deny the application unless the applicant amends the application
to no longer request the pooling of the unleased mineral interests described in paragraph
(a). Nothing in this subdivision affects, limits, or expands the authority of the federal
government or an American Indian Tribe or Band to lease, refuse to lease, voluntarily pool,
or otherwise dispose of their unleased mineral interests.
new text end

new text begin Subd. 6. new text end

new text begin Pooling orders. new text end

new text begin (a) On any portion of a spacing unit covered by a pooling
order, all operations incident to well drilling are deemed to be the conduct of operations on
each separately owned tract by the several owners of each separately owned tract. Any
portion of production allocated or applicable to each tract included in a spacing unit covered
by a pooling order is deemed to have been produced from the tract by a well drilled on the
tract.
new text end

new text begin (b) Each pooling order must:
new text end

new text begin (1) provide for drilling one or more wells, if not already drilled, within the spacing unit
in such a manner as to prevent waste;
new text end

new text begin (2) provide for payment of the reasonable actual cost of the wells, including drilling and
operating the wells, and a reasonable charge for supervision and storage;
new text end

new text begin (3) provide for the proportionate share of the costs and risks of drilling and operating
wells for each owner, including each nonconsenting owner, as follows:
new text end

new text begin (i) except as provided in subdivision 7, as to each nonconsenting owner who refuses to
bear a proportionate share of the costs and risks of drilling and operating the wells, the
pooling order must provide for reimbursement to consenting owners to be paid out of, and
only out of, production from the unit representing the nonconsenting owner's interest;
new text end

new text begin (ii) such reimbursement must exclude any royalty or other interest not obligated to pay
any part of the costs of drilling and operating the wells if, and to the extent that, the royalty
is consistent with the lease terms prevailing in the area and is not designed to avoid the
recovery of costs provided for in paragraph (c); and
new text end

new text begin (iii) in the event of any dispute as to the allocation of any costs of drilling and operating
the wells, the commissioner must determine the allocation of costs as specified in paragraph
(c);
new text end

new text begin (4) determine the interest of each owner in the spacing unit and provide that each
consenting owner is entitled to receive a share of the production from the wells applicable
to the owner's interest in the wells, subject to royalty or similar obligations;
new text end

new text begin (5) provide that each consenting owner is entitled to receive a proportionate part of any
nonconsenting owner's share of the production until costs are recovered;
new text end

new text begin (6) provide that each nonconsenting owner is entitled to own and receive that share of
the production applicable to the nonconsenting owner's interest in the spacing unit after all
consenting owners have recovered the nonconsenting owner's share of the costs out of
production;
new text end

new text begin (7) specify that any nonconsenting owner is immune from liability for costs arising from
spills, releases, damage, or injury resulting from gas resource development operations on
the spacing unit, to the extent that such liability is not the fault of the nonconsenting owner;
and
new text end

new text begin (8) prohibit operators from using the surface owned by a nonconsenting owner without
express permission from the nonconsenting owner.
new text end

new text begin (c) The commissioner must determine proper costs recoverable by the consenting owners
of a spacing unit from the nonconsenting owner's share of production from the unit as
follows:
new text end

new text begin (1) 100 percent of the nonconsenting owner's share of the cost of surface equipment
beyond the wellhead connections, including stock tanks, separators, treaters, pumping
equipment, and piping, plus 100 percent of the nonconsenting owner's share of the cost of
operating the well or wells beginning with first production and continuing until the consenting
owners have recovered such costs. Any nonconsenting owner's share of the costs of
equipment and operation is that interest that would have been chargeable to the nonconsenting
owner had the owner initially agreed to pay the owner's share of the costs of the well or
wells from the beginning of the operation; and
new text end

new text begin (2) 200 percent of that portion of the costs and expenses of permitting, environmental
review, surveying, well site preparation, obtaining rights-of-way, rigging up, drilling,
reworking, deepening or plugging back, testing, and completing the well, after deducting
any cash contributions received by the consenting owners, and 200 percent of that portion
of the cost of equipment in the well, including the wellhead connections.
new text end

new text begin Subd. 7. new text end

new text begin Costs and royalties for nonconsenting owners. new text end

new text begin A nonconsenting owner of a
tract within a spacing unit that is not subject to any lease or other contract for gas
development is entitled to a landowner's proportionate royalty of 18.75 percent until the
consenting owners recover the costs specified in subdivision 6, paragraph (c). Until costs
are recovered, the remaining 81.25 percent of the nonconsenting owner's proportionate
share is allocated to reimburse costs to the consenting owners, as described in subdivision
6, paragraph (b), clause (3). After recovery of costs, the nonconsenting owner is deemed to
own their full proportionate share of the wells, surface facilities, and production and is then
liable for any further costs as if the nonconsenting owner had been a consenting owner.
new text end

new text begin Subd. 8. new text end

new text begin Good faith effort of lease offer to nonconsenting owners. new text end

new text begin (a) The
commissioner must not enter an order pooling an unleased, nonconsenting mineral interest
owner under this section over the protest of the owner unless the commissioner receives
evidence that the unleased mineral interest owner has been:
new text end

new text begin (1) tendered, no less than 60 days before the hearing, a reasonable offer, made in good
faith, to participate and pay their proportionate share of costs or to lease upon terms no less
favorable than those currently prevailing in the area at the time application for the order is
made; and
new text end

new text begin (2) furnished, in writing, the owner's share of the estimated drilling and completion cost
of the gas wells, the location and objective depth of the gas wells, and the estimated spud
date for the gas wells or range of time within which spudding is to occur.
new text end

new text begin (b) The offer to participate or lease must include a copy of or link to a brochure supplied
by the commissioner that clearly and concisely describes the pooling procedures specified
in this section and the mineral interest owner's options under those procedures.
new text end

new text begin Subd. 9. new text end

new text begin Disputes between owners and operators. new text end

new text begin (a) During the period of cost recovery
provided for under this section, the commissioner does not have jurisdiction to determine
the reasonableness of costs of operating the wells attributable to the interest of the
nonconsenting owner. Any owners, consenting or nonconsenting, may file actions in district
court, against the operators or each other, to challenge the reasonableness of costs.
new text end

new text begin (b) The commissioner does not have jurisdiction to resolve disputes among owners or
operators regarding the ownership of mineral interests contained within spacing units.
new text end

new text begin Subd. 10. new text end

new text begin Duty of operator to nonconsenting owners. new text end

new text begin The operator of gas wells under
a pooling order in which there is a nonconsenting owner must furnish the nonconsenting
owner with a monthly statement of all costs incurred, together with the quantity of gas
produced, and the amount of proceeds realized from the sale of production during the
preceding month. If the consenting owners recover the costs specified in subdivision 6, the
nonconsenting owner must own the same interest in the wells and the production from the
wells and be liable for the further costs of the operation as if the nonconsenting owner had
participated in the initial drilling operations.
new text end

Sec. 11.

new text begin [93.5174] DUTIES AND AUTHORITY OF COMMISSIONER.
new text end

new text begin The commissioner must administer and enforce sections 93.517 to 93.5182 and the rules
adopted thereunder and authorized by section 93.514. In so doing, the commissioner may:
new text end

new text begin (1) conduct investigations and inspections that the commissioner deems necessary for
the proper administration of sections 93.517 to 93.5182;
new text end

new text begin (2) enter upon any part of a gas resource development location in connection with an
investigation and inspection without liability to the operator or landowner, provided the
commissioner gives the operator or landowner reasonable prior notice of the intent to do
so;
new text end

new text begin (3) conduct research or enter into contracts related to gas resource development locations
and the reclamation of gas resources that the commissioner deems necessary to implement
sections 93.517 to 93.5182; and
new text end

new text begin (4) allocate surplus wetland credits that are approved by the commissioner under a gas
resource development permit and that are not otherwise deposited in a state wetland bank.
new text end

Sec. 12.

new text begin [93.5175] VARIANCE.
new text end

new text begin The commissioner may, upon application by an operator, modify or permit variance
from the rules adopted under sections 93.514 and 93.517 to 93.5182 if the commissioner
determines that the modification or variance is consistent with the general welfare.
new text end

Sec. 13.

new text begin [93.5176] GAS RESOURCE DEVELOPMENT PERMIT.
new text end

new text begin Subdivision 1. new text end

new text begin Permit required; application. new text end

new text begin A person must not engage in or carry out
gas resource development operations at gas resource development locations within the state,
including drilling gas wells or extracting gas resources, unless the person has first obtained
a gas resource development permit from the commissioner. All persons engaged in the
operation must jointly hold the permit, including all parent companies of persons involved
in the operation. A person applying to the commissioner for a gas resource development
permit must submit information required by the commissioner, including but not limited
to:
new text end

new text begin (1) an application fee of $10,000;
new text end

new text begin (2) a certificate issued by an insurance company authorized to do business in the United
States certifying that the applicant has a public liability insurance policy in force for the
development of gas resources for which the permit is sought, or evidence that the applicant
has satisfied other state or federal self-insurance requirements, to provide personal injury
and property damage protection in an amount adequate to compensate any persons who
might be damaged as a result of the gas resource development operations or any reclamation
or restoration operations connected with gas resource development locations;
new text end

new text begin (3) a map that identifies the location of established or applicant-proposed spacing units
and the location and extent of all proposed gas resource development locations, access roads,
gas wells and setback distances between each gas well, and areas with special land uses
within the proposed spacing unit;
new text end

new text begin (4) a plan map that shows the planned locations of gas resource development facilities
on all gas resource development locations, including drill pads, gas enrichment facilities,
storage tanks, and flow lines;
new text end

new text begin (5) a proposed plan for constructing gas resource development facilities, including but
not limited to gas wells, processing or gas enrichment plants, and connecting flow lines;
new text end

new text begin (6) a proposed plan for gas resource development operations, including but not limited
to the duration of the project; processes and procedures for gas extraction, enrichment,
storage, and gas transport to market; and the isolation and management of noncommercial
gases extracted from gas wells;
new text end

new text begin (7) a proposed plan, including a timeline, for the reclamation or restoration, or both, of
any gas resource development location affected by operations to be conducted on and after
the date on which permits are required for the development of gas resources under this
section;
new text end

new text begin (8) characterization of any exploration and production waste to be stored temporarily
or permanently at a gas resource development location;
new text end

new text begin (9) plans for financial assurance instruments addressing the cost to close all gas resource
development facilities and reclaim all gas resource development locations; and
new text end

new text begin (10) a copy of the applicant's advertisement of the ownership, location, and boundaries
of the proposed gas resource development locations, which advertisement must be published
in a legal newspaper in the locality of the proposed site at least once a week for four
successive weeks before the application is filed.
new text end

new text begin Subd. 2. new text end

new text begin Permits issued during rulemaking. new text end

new text begin A gas resource development permit issued
during the pendency of expedited rulemaking authorized under section 93.514 does not
expire once the rules are adopted if the person holding the permit continues to operate under
permitted conditions. If a person holding such a permit applies for a permit amendment
after rules are adopted:
new text end

new text begin (1) the adopted rules apply to operations covered by both the amendment and the original
permit; and
new text end

new text begin (2) the application for a permit amendment must include information for the entire project
that is required under subdivision 1 and the adopted rules.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner's review; hearing. new text end

new text begin After receiving an application that the
commissioner has deemed complete and filed, the commissioner must grant the permit
applied for, with or without modifications or conditions, or deny the application unless a
contested case hearing is requested or ordered under section 93.5178. The commissioner's
decision to grant the permit, with or without modifications or conditions, or deny the
application is a final order for purposes of section 93.5181. The commissioner, in granting
a permit with or without modifications or conditions, must determine that the reclamation
or restoration planned for the operation complies with lawful requirements and can be
accomplished under available technology and that a proposed reclamation or restoration
technique is practical and workable under available technology. The commissioner may
hold public meetings on the application.
new text end

new text begin Subd. 4. new text end

new text begin Term of permit; amendment. new text end

new text begin (a) A permit issued by the commissioner under
this section must be granted for the term determined necessary by the commissioner for
completing the proposed gas resource development plan, including reclamation or restoration.
new text end

new text begin (b) A permit may be amended upon written application to the commissioner. A permit
amendment application fee must be submitted with the written application. The permit
amendment application fee is ten percent of the amount provided for in subdivision 1, clause
(1), for an application for a gas resource development permit. If the commissioner determines
that the proposed amendment constitutes a substantial change to the permit, the applicant
must publish notice in the same manner as for a new permit. The commissioner may grant
an amendment if the commissioner determines that lawful requirements have been met.
new text end

new text begin Subd. 5. new text end

new text begin Revocation; modification; suspension. new text end

new text begin (a) A permit is irrevocable during its
term except that the commissioner may:
new text end

new text begin (1) revoke the permit if the permittee has not commenced substantial construction of
gas resource development facilities or actual production and reclamation or restoration
operations covered by the permit within 36 months of permit issuance;
new text end

new text begin (2) cancel a permit at the request of or with the consent of the permittee upon such
conditions as the commissioner determines necessary to protect the public interests;
new text end

new text begin (3) subject to paragraph (b), modify or revoke the permit:
new text end

new text begin (i) in case of any breach of the permit terms or conditions;
new text end

new text begin (ii) in case of a violation of law pertaining to the permit by the permittee or agents of
the permittee;
new text end

new text begin (iii) when the commissioner finds that the modification or revocation is necessary to
protect the public health or safety;
new text end

new text begin (iv) to protect the public interests in lands or waters against injury resulting in any manner
or to any extent not expressly authorized by the permit; or
new text end

new text begin (v) to prevent injury to persons or property resulting in any manner or to any extent not
authorized by the permit; and
new text end

new text begin (4) by written order to the permittee, suspend operations under a permit if the
commissioner finds it necessary in an emergency to protect the public health or safety; to
protect public interests in lands or waters against imminent danger of substantial injury in
any manner or to any extent not expressly authorized by the permit; or to protect persons
or property against such danger, and the commissioner may require the permittee to take
any measures necessary to prevent or remedy such injury. No suspension order under this
clause may be in effect more than 30 days after the date of the order without giving the
permittee at least ten days' written notice of the order and an opportunity to be heard on the
matter.
new text end

new text begin (b) Modification or revocation under paragraph (a), clause (3), is subject to the rights
of the permittee to contest the commissioner's actions under sections 14.57 to 14.59 and
related sections. The commissioner must give 30 days' written notice to the permittee, stating
the grounds of the proposed modification or revocation or providing a reasonable time of
not less than 15 days in which to take corrective action.
new text end

new text begin Subd. 6. new text end

new text begin Assignment. new text end

new text begin A permit may not be assigned or otherwise transferred without
the written approval of the commissioner. A permit assignment application fee must be
submitted with the written application. The permit assignment application fee is ten percent
of the amount provided for in subdivision 1, clause (1). A permit assignment application
may be combined with a permit.
new text end

new text begin Subd. 7. new text end

new text begin Gas resource administration account. new text end

new text begin The gas resource administration account
is established as an account in the natural resources fund. Fees charged to owners, operators,
or managers of operations under sections 93.515 to 93.5182 must be credited to the gas
resource administration account and are appropriated to the commissioner to cover the costs
of providing and monitoring gas resource development permits. Earnings accruing from
investment of the account remain with the account.
new text end

new text begin Subd. 8. new text end

new text begin Temporary regulatory framework. new text end

new text begin (a) To support a temporary regulatory
framework for permitting gas production projects during rulemaking, this subdivision applies
until rules are adopted for siting, permitting, and reclamation requirements for gas production
projects, as required under section 93.514.
new text end

new text begin (b) All gas resource development locations must incorporate setbacks or separations
that are needed to comply with air, water, and noise pollution standards; local land use
regulations; and the requirements of other applicable jurisdictions. Nothing in this section
is intended to supersede any more restrictive siting or setback requirements that may exist
in state or federal laws for the specific land designations listed in this subdivision. Gas
resource development operations at gas resource development locations must not modify
or alter the gas resources of certain areas, except in the event of a national emergency
declared by Congress.
new text end

new text begin (c) A gas resource development location must not be located within or alter the gas
resources of:
new text end

new text begin (1) the Boundary Waters Canoe Area Wilderness, as legally described in the Federal
Register, volume 45, number 67 (April 4, 1980), with state restrictions specified in section
84.523, subdivision 3;
new text end

new text begin (2) Voyageurs National Park, with state restrictions specified in section 84B.03,
subdivision 1; or
new text end

new text begin (3) the federal Agassiz and Tamarac Wilderness areas and Pipestone and Grand Portage
National Monuments.
new text end

new text begin (d) Passive subsurface gas resource development activities are allowed, but gas resource
development locations and subsurface directional drilling are prohibited in:
new text end

new text begin (1) state wilderness areas;
new text end

new text begin (2) state scientific and natural areas;
new text end

new text begin (3) within state peatland scientific and natural areas where directional drilling would
significantly modify or alter the peatland water levels or flows, peatland water chemistry,
plant or animal species or communities, or natural features of the peatland scientific and
natural areas, except in the event of a national emergency declared by Congress;
new text end

new text begin (4) calcareous fens identified under section 103G.223;
new text end

new text begin (5) a state park, except that gas resource development operations must be allowed if the
park has been established as a result of its association with mining; and
new text end

new text begin (6) designated trout streams and lakes.
new text end

new text begin (e) Subsurface gas resource development activities, including subsurface directional
drilling, are allowed, but gas resource development locations are prohibited:
new text end

new text begin (1) in the Boundary Waters Canoe Area Wilderness Mineral Management Corridor,
identified on the Department of Natural Resources map entitled Minnesota Department of
Natural Resources B.W.C.A.W. Mineral Management Corridor (February 1991);
new text end

new text begin (2) within 0.25 miles of Voyageurs National Park;
new text end

new text begin (3) within 0.25 miles of a state wilderness area;
new text end

new text begin (4) within 0.25 miles of the federal Agassiz and Tamarac Wilderness areas and Pipestone
and Grand Portage National Monuments;
new text end

new text begin (5) within 0.25 miles of a state scientific and natural area;
new text end

new text begin (6) within 0.25 miles of a state park, except surface and subsurface disturbances must
be allowed if the park has been established as a result of its association with mining;
new text end

new text begin (7) within 0.25 miles of a calcareous fen identified under section 103G.223;
new text end

new text begin (8) on sites designated in the National Register of Historic Places, except that gas resource
development operations must be allowed if the sites have been established as a result of
their association with mining;
new text end

new text begin (9) on sites designated in the registry of state historic sites, except gas resource
development operations must be allowed if the sites have been established as a result of
their association with mining;
new text end

new text begin (10) within national wild, scenic, or recreational river districts of a national wild, scenic,
or recreational river and within the areas identified by the document entitled A Management
Plan for the Upper Mississippi River, produced by the Mississippi Headwaters Board
(January 1981);
new text end

new text begin (11) within designated state land use districts of a state wild, scenic, or recreational river;
new text end

new text begin (12) within the area adjacent to the north shore of Lake Superior identified in the
document entitled North Shore Management Plan, produced by the North Shore Management
Board (December 1988); and
new text end

new text begin (13) in the following areas, provided they were in existence before a gas resource
development permit was issued:
new text end

new text begin (i) within 500 feet of an occupied dwelling, public school, church, public institution, or
county or municipal park, unless allowed by the owner; or
new text end

new text begin (ii) within 100 feet of a cemetery or the outside right-of-way line of a public roadway.
new text end

new text begin (f) Gas resource development locations must be allowed in the following areas only if
the commissioner determines that there is no prudent and feasible siting alternative:
new text end

new text begin (1) in a national wildlife refuge, a national waterfowl protection area, or on a national
trail;
new text end

new text begin (2) in a state wildlife management area or on a state-designated trail either listed in
section 85.015 or acquired under the authority of section 84.029, subdivision 2;
new text end

new text begin (3) in peatlands identified as peatland watershed protection areas in the Department of
Natural Resources report entitled Protection of Ecologically Significant Peatlands in
Minnesota (November 1984); and
new text end

new text begin (4) in waters identified in the public waters inventory under section 103G.201 that have
not been created or substantially altered in size by human activities or in the adjoining
shorelands, as defined in section 103F.205, subdivision 4, of the unaltered waters.
new text end

new text begin (g) A gas resource development permit must include as a permit condition a requirement
that a permittee submit to the commissioner a preproduction report at least 60 days before
the commercial extraction of gas resources from gas wells drilled at gas resource development
locations. The report must include data and test results from completed gas wells that can
be used to evaluate the production rates and extraction areas that were incorporated by the
permittee into their permit application before drilling the gas wells. The commissioner must
identify the specific types of data and other report components in the associated gas resource
development permit.
new text end

new text begin (h) A permittee must submit an annual report to the commissioner by March 31 each
year that describes actual gas production and reclamation completed during the past year,
gas production and reclamation activities planned for the upcoming year, and a contingency
reclamation plan to be implemented if operations cease or gas wells are idled for more than
36 months. The annual report must include at a minimum:
new text end

new text begin (1) reporting for the previous calendar year and projections for the upcoming calendar
year on the volume and average composition of raw gas extracted from each gas well covered
by the gas resource development plan;
new text end

new text begin (2) quantities and final grades of commercial gas products transported to market;
new text end

new text begin (3) any changes in the production or gas enrichment processes;
new text end

new text begin (4) a description of reclamation activities and corrective actions;
new text end

new text begin (5) evidence of continued liability insurance; and
new text end

new text begin (6) a discussion of any changes in ownership and organization structure of the permittee.
new text end

Sec. 14.

new text begin [93.5177] FEES.
new text end

new text begin Subdivision 1. new text end

new text begin Annual gas resource development permit fee. new text end

new text begin The commissioner must
charge every person holding a gas resource development permit an annual permit fee of
$25,000. The fee is payable to the Department of Natural Resources by June 30 each year,
beginning in 2025. If a permit is issued after June 30 of any year, the permittee must pay
the annual fee within 60 days of permit issuance.
new text end

new text begin Subd. 2. new text end

new text begin Supplemental application fee. new text end

new text begin (a) In addition to the application fee specified
in section 93.5176, the commissioner must assess a person submitting an application for a
gas resource development permit the reasonable costs for reviewing the application and
preparing the permit. The commissioner must also assess reasonable costs for monitoring
construction of the gas resource development facilities.
new text end

new text begin (b) The commissioner must give the applicant an estimate of the supplemental application
fee under this subdivision. The estimate must include a brief description of the tasks to be
performed and the estimated cost of each task. The application fee under section 93.5176
must be subtracted from the estimate of costs to determine the supplemental application
fee.
new text end

new text begin (c) The applicant and the commissioner must enter into a written agreement to cover
the estimated costs to be incurred by the commissioner.
new text end

new text begin (d) The commissioner must not issue the gas resource development permit until the
applicant has paid all fees in full. Upon completion of construction of all gas resource
development facilities, the commissioner must refund the unobligated balance of the
supplemental application fee revenue.
new text end

Sec. 15.

new text begin [93.5178] CONTESTED CASE.
new text end

new text begin Subdivision 1. new text end

new text begin Petition for contested case hearing. new text end

new text begin Any person owning property that
will be affected by the proposed gas resource development operations or any federal, state,
or local government having responsibilities affected by the proposed operation identified
in an application for a gas resource development permit under section 93.5176 may file a
petition with the commissioner to hold a contested case hearing on the completed application.
To be considered by the commissioner, a petition must be submitted in writing, must contain
the information specified in subdivision 2, and must be submitted to the commissioner
within 30 days after the application is deemed complete and filed. The commissioner may,
on the commissioner's own motion, order a contested case hearing on the completed
application.
new text end

new text begin Subd. 2. new text end

new text begin Petition contents. new text end

new text begin (a) A petition for a contested case hearing must include:
new text end

new text begin (1) a statement of reasons or proposed findings supporting the commissioner's decision
to hold a contested case hearing according to the criteria in subdivision 3; and
new text end

new text begin (2) a statement of the issues proposed to be addressed by a contested case hearing and
the specific relief requested or resolution of the matter.
new text end

new text begin (b) To the extent known by the petitioner, a petition for a contested case hearing may
also include:
new text end

new text begin (1) a proposed list of prospective witnesses to be called, including experts, with a brief
description of the proposed testimony or a summary of evidence to be presented at a contested
case hearing;
new text end

new text begin (2) a proposed list of publications, references, or studies to be introduced and relied
upon at a contested case hearing; and
new text end

new text begin (3) an estimate of time required for the petitioner to present the matter at a contested
case hearing.
new text end

new text begin (c) A petitioner is not bound or limited to the witnesses, materials, or estimated time
identified in the petition if the commissioner grants the request for a contested case hearing.
new text end

new text begin (d) Any person may serve timely responses to a petition for a contested case hearing.
The commissioner must establish deadlines for responses to be submitted.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner's decision to hold hearing. new text end

new text begin (a) The commissioner must grant
a petition to hold a contested case hearing or order upon the commissioner's own motion
that a contested case hearing be held if the commissioner finds that:
new text end

new text begin (1) there is a material issue of fact in dispute concerning the completed application before
the commissioner;
new text end

new text begin (2) the commissioner has jurisdiction to make a determination on the disputed material
issue of fact; and
new text end

new text begin (3) there is a reasonable basis underlying a disputed material issue of fact so that a
contested case hearing would allow the introduction of information that would aid the
commissioner in resolving the disputed facts in order to make a final decision on the
completed application.
new text end

new text begin (b) The commissioner must make the determination of whether to grant a petition or
otherwise order a contested case hearing within 120 days after the commissioner deems the
application complete and filed.
new text end

new text begin Subd. 4. new text end

new text begin Hearing upon request of applicant. new text end

new text begin The applicant may, within 30 days after
the application is deemed complete and filed, submit a request for a contested case hearing.
Within 30 days of the applicant's request, the commissioner must grant the petition and
initiate the contested case hearing process.
new text end

new text begin Subd. 5. new text end

new text begin Scope of hearing. new text end

new text begin If the commissioner decides to hold a contested case hearing,
the commissioner must identify the issues to be resolved and limit the scope and conduct
of the hearing in accordance with applicable law, due process, and fundamental fairness.
The commissioner may, before granting or ordering a contested case hearing, develop a
proposed permit or permit conditions to inform the contested case. The contested case
hearing must be conducted according to sections 14.57 to 14.62. The final decision by the
commissioner to grant, with or without modifications or conditions, or deny the application
after a contested case hearing is a final order for purposes of section 93.5181.
new text end

Sec. 16.

new text begin [93.5179] WORK WITH TRIBAL GOVERNMENTS AND RESPECT FOR
HUMAN BURIAL GROUNDS.
new text end

new text begin Sections 93.517 to 93.5182 must be implemented in a manner that is consistent with
sections 10.65 and 307.08.
new text end

Sec. 17.

new text begin [93.5180] FINANCIAL ASSURANCE OF OPERATOR.
new text end

new text begin Subdivision 1. new text end

new text begin Requirement for financial assurance. new text end

new text begin The commissioner must require
from a permittee a bond, another security, or other financial assurance satisfactory to the
commissioner. The commissioner must review at least annually the extent of each operator's
financial assurance under this section.
new text end

new text begin Subd. 2. new text end

new text begin Temporary regulatory framework. new text end

new text begin (a) To support a temporary regulatory
framework for permitting gas production projects during rulemaking, this subdivision applies
until rules are adopted under section 93.514 for financial assurance requirements for gas
production projects.
new text end

new text begin (b) Financial assurance for reclamation and for corrective action must ensure that:
new text end

new text begin (1) funds will be available to cover the costs estimated in paragraph (c);
new text end

new text begin (2) funds will be made payable to the commissioner when needed;
new text end

new text begin (3) funds will be fully valid, binding, and enforceable under state and federal law;
new text end

new text begin (4) funds will not be dischargeable through bankruptcy;
new text end

new text begin (5) funds will not include any corporate guarantees unless a guarantee is deemed
necessary by the commissioner as an additional layer of assurance beyond the use of bonds,
other securities, or other financial assurance mechanisms under clauses (1) to (4) and (6),
and in no case may a corporate guarantee be approved as a standalone financial assurance;
and
new text end

new text begin (6) all terms and conditions of the financial assurance are approved by the commissioner.
new text end

new text begin (c) A person intending to develop gas resources must submit, as part of an application
for a gas resource development permit, a documented estimate of costs necessary for the
reclamation or restoration, or both, of any gas resource development locations upon which
the person proposes to conduct gas resource development operations. The commissioner
must determine the procedures for completing the cost estimate and its required elements.
new text end

new text begin (d) If a corrective action is required during implementation of the gas resource
development plan to minimize waste and protect human health or the environment, the
permittee must submit to the commissioner a cost estimate for completing the required
actions. The commissioner must determine the procedures and required elements for
completing this corrective action cost estimate.
new text end

new text begin (e) The commissioner must ensure that submitted cost estimates and cost estimate
adjustments are evaluated by individuals with documented experience in material handling
and reclamation or restoration of gas resource development locations. The applicant must
pay the costs incurred by the commissioner to hire third parties to perform the evaluation.
new text end

new text begin (f) Financial assurance in the amount equal to the contingency reclamation cost estimate
must be submitted to the commissioner for approval before issuance of a gas resource
development permit and before granting an amendment to the permit, must be continuously
maintained by the permittee, and must be annually adjusted based on the new cost estimate.
new text end

new text begin (g) Financial assurance in the amount equal to the corrective action cost estimate under
paragraph (d) must be submitted to the commissioner for approval as part of the corrective
action cost estimate, must be continuously maintained by the permittee until the commissioner
determines it is no longer necessary, and must be annually adjusted based on the new cost
estimate.
new text end

new text begin (h) Financial assurance may be canceled by the permittee, upon approval by the
commissioner, only after the financial assurance is replaced by an alternate mechanism or
after the permittee is released from financial assurance once the commissioner determines,
through inspection of the permitted gas resource development locations, that:
new text end

new text begin (1) all reclamation activities have been completed according to the gas resource
development permit;
new text end

new text begin (2) any conditions necessitating postclosure maintenance no longer exist and are not
likely to recur; and
new text end

new text begin (3) any corrective actions have been successfully accomplished.
new text end

new text begin (i) The permittee must ensure that the provider of financial assurance gives the
commissioner 120 days' notice before cancellation of the financial assurance mechanism.
Upon receipt of the notice, the commissioner must initiate a proceeding to access the financial
assurance.
new text end

new text begin (j) If the gas resource development permit is assigned, the new permittee must be in
compliance with sections 93.517 to 93.5182 before the commissioner approves the
assignment. On the assignee's demonstration of compliance, the former permittee must be
released from the compliance requirements.
new text end

new text begin (k) Financial assurance must be made available to the commissioner when the operator
is not in compliance with either a contingency reclamation plan or a corrective action plan.
new text end

new text begin (l) The commissioner may deny, suspend, revoke, or modify a gas resource development
permit or assess civil penalties if the permittee fails to comply with sections 93.517 to
93.5182.
new text end

Sec. 18.

new text begin [93.5181] APPEAL.
new text end

new text begin Any person aggrieved by a final order, ruling, or decision of the commissioner under
sections 93.517 to 93.5182, or the rules adopted thereunder, may obtain judicial review of
the order, ruling, or decision under sections 14.63 to 14.69.
new text end

Sec. 19.

new text begin [93.5182] PENALTIES FOR VIOLATION.
new text end

new text begin Subdivision 1. new text end

new text begin Civil penalty. new text end

new text begin If a person fails to comply with sections 93.517 to 93.5180,
any rules adopted thereunder, or any permit condition required under sections 93.517 to
93.5180 or rules adopted thereunder, then for 15 days after notice of the failure or after the
expiration of time for corrective action as provided for in section 93.5176, subdivision 5,
the person is liable for a civil penalty of not more than $10,000 per day per violation for
each day that the failure continues. The commissioner may assess and collect any penalty
for deposit in the gas resource administration account.
new text end

new text begin Subd. 2. new text end

new text begin Criminal penalty; injunctive relief. new text end

new text begin A person who knowingly and willfully
violates or refuses to comply with any rule, decision, order, or ruling of the commissioner
under sections 93.517 to 93.5180 is, upon conviction, guilty of a gross misdemeanor. At
the request of the commissioner, the attorney general may institute a civil action in a district
court of the state for a restraining order or injunction or other appropriate remedy to prevent
or preclude a violation of the terms and conditions of any rules adopted under sections
93.517 to 93.5180. The district court of the state of Minnesota in which district the affected
extraction operation is conducted has jurisdiction to issue such order or injunction or to
provide other appropriate remedies.
new text end

Sec. 20.

Minnesota Statutes 2024, section 93.55, subdivision 1a, is amended to read:

Subd. 1a.

Lease of forfeited interest.

If the owner of a severed mineral interest fails to
record the verified statement required by section 93.52 before the dates specified in
subdivision 1, the commissioner of natural resources may lease the mineral interest as
provided in this subdivision and subdivision 3 before completing the procedures set forth
in subdivision 2. In any lease issued under this subdivision, the commissioner shall cite, as
authority for issuing the lease, this subdivision, subdivision 3, and the United States Supreme
Court decision in Texaco, Inc., et al. v. Short, et al., 454 U.S. 516 (1982), where the Supreme
Court determined, under Amendment XIV to the Constitution of the United States, that
enactment of a state law requiring an owner of severed mineral interests to timely record a
statement of claim to the mineral interests was constitutional, without individual advance
notice of operation of the law, before the owner loses the mineral interests for failing to
timely record the statement of claim. A lessee holding a lease issued under this subdivision
may not mine new text begin or extract gas or other mineral resources new text end under the lease until the commissioner
completes the procedures set forth in subdivision 2 and a court has adjudged the forfeiture
of the mineral interest to be absolute. "Mine" for the purposes of this subdivision is defined
to exclude exploration activities, exploratory boring, trenching, test pitting, test shafts and
drifts, and related activities.

Sec. 21. new text begin APPROPRIATIONS; GAS EXPLORATION AND PRODUCTION
PERMITTING PROGRAM.
new text end

new text begin (a) $660,000 in fiscal year 2026 and $660,000 in fiscal year 2027 are appropriated from
the general fund to the commissioner of natural resources for use as provided under
Minnesota Statutes, chapter 93, for mineral resource management, including permitting
activities associated with gas resource development.
new text end

new text begin (b) $330,000 in fiscal year 2026 and $330,000 in fiscal year 2027 are appropriated from
the minerals management account in the natural resources fund to the commissioner of
natural resources for uses allowed under Minnesota Statutes, section 93.2236, paragraph
(c), including activities associated with leasing for gas exploration and development.
new text end

ARTICLE 2

HEALTH

Section 1.

Minnesota Statutes 2024, section 103I.001, is amended to read:

103I.001 LEGISLATIVE INTENT.

This chapter is intended to protect the health and general welfare by providing a means
for the deleted text begin development and deleted text end protection of the natural resource of groundwater in an orderly,
healthful, and reasonable manner.

Sec. 2.

Minnesota Statutes 2024, section 103I.005, subdivision 9, is amended to read:

Subd. 9.

Exploratory boring.

"Exploratory boring" means a surface drilling done to
explore or prospect for deleted text begin oil, natural deleted text end gas, apatite, diamonds, graphite, gemstones, kaolin clay,
and metallic minerals, including iron, copper, zinc, lead, gold, silver, titanium, vanadium,
nickel, cadmium, molybdenum, chromium, manganese, cobalt, zirconium, beryllium,
thorium, uranium, aluminum, platinum, palladium, radium, tantalum, tin, and niobium deleted text begin , and
a drilling or boring for petroleum deleted text end .

Sec. 3.

Minnesota Statutes 2024, section 103I.005, is amended by adding a subdivision
to read:

new text begin Subd. 10a. new text end

new text begin Gas. new text end

new text begin "Gas" includes both hydrocarbon and nonhydrocarbon gases.
new text end

Sec. 4.

Minnesota Statutes 2024, section 103I.005, is amended by adding a subdivision
to read:

new text begin Subd. 10b. new text end

new text begin Gas well. new text end

new text begin "Gas well" means an excavation that is constructed to locate,
extract, or produce gas.
new text end

Sec. 5.

Minnesota Statutes 2024, section 103I.005, is amended by adding a subdivision
to read:

new text begin Subd. 10c. new text end

new text begin Gas well contractor. new text end

new text begin "Gas well contractor" means a person with a gas well
contractor's license issued by the commissioner.
new text end

Sec. 6.

Minnesota Statutes 2024, section 103I.005, subdivision 21, is amended to read:

Subd. 21.

Well.

"Well" means an excavation that is drilled, cored, bored, washed, driven,
dug, jetted, or otherwise constructed if the excavation is intended for the location, diversion,
artificial recharge, monitoring, testing, remediation, or acquisition of groundwater. Well
includes environmental wells, drive point wells, and dewatering wells. "Well" does not
include:

(1) an excavation by backhoe, or otherwise for temporary dewatering of groundwater
for nonpotable use during construction, if the depth of the excavation is 25 feet or less;

(2) an excavation made to obtain or prospect for oil, deleted text begin natural deleted text end gas, minerals, or products
of mining or quarrying;

(3) an excavation to insert media to repressure oil or deleted text begin natural deleted text end gas bearing formations or
to store petroleum, deleted text begin natural deleted text end gas, or other products;

(4) an excavation for nonpotable use for wildfire suppression activities; deleted text begin or
deleted text end

(5) borings new text begin ; or
new text end

new text begin (6) gas and oil wells new text end .

Sec. 7.

Minnesota Statutes 2024, section 103I.601, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For the purposes of this section, the following words
have the meanings given them.

(b) "Data" includes samples and factual noninterpreted data obtained from exploratory
borings and samples including analytical results.

(c) "Parcel" means a government section, fractional section, or government lot.

(d) "Samples" means at least a one-quarter portion of all samples from exploratory
borings that are customarily collected by the explorer. When the exploratory borings are
being done to explore or prospect for kaolin clay, "samples" means a representative sample
of at least two cubic inches of material per foot from exploratory borings of the material
that is customarily collected by the explorer.

new text begin (e) "Gas exploratory boring" means an exploratory boring encountering gas for at least
24 hours and in which gas has not dissipated prior to sealing.
new text end

Sec. 8.

Minnesota Statutes 2024, section 103I.601, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Borings encountering gas. new text end

new text begin (a) Requirements in this subdivision apply only
for gas exploratory borings.
new text end

new text begin (b) An explorer must notify the commissioners of health and natural resources:
new text end

new text begin (1) within 24 hours of drilling a gas exploratory boring; and
new text end

new text begin (2) prior to beginning a permanent sealing of a gas exploratory boring.
new text end

new text begin (c) An explorer must submit a permanent sealing notification and fee of $125 to the
commissioner prior to permanently sealing a gas exploratory boring.
new text end

new text begin (d) An explorer must begin permanently sealing a gas exploratory boring within ten
days of encountering gas.
new text end

new text begin (e) A gas exploratory boring is exempt from paragraph (d) if the boring is constructed
to prevent movement of gas and water from one formation to another. The boring must be
permanently sealed within 30 days after the completion of drilling unless gas is no longer
present in the boring.
new text end

new text begin (f) A gas exploratory boring must be permanently sealed from the bottom of the boring
to within two feet of the established ground surface.
new text end

new text begin (g) A permanent sealing report as required by subdivision 9 must also contain information
indicating gas was encountered during construction and at what depth it was encountered.
new text end

new text begin (h) A person must not use an exploratory boring to extract gas for production.
new text end

Sec. 9.

Minnesota Statutes 2024, section 103I.601, is amended by adding a subdivision
to read:

new text begin Subd. 11. new text end

new text begin Conversion of a gas well prohibited. new text end

new text begin A person must not convert a gas well
to any other type of well or boring.
new text end

Sec. 10.

Minnesota Statutes 2024, section 103I.601, is amended by adding a subdivision
to read:

new text begin Subd. 12. new text end

new text begin Conversion of a well or boring to a gas well. new text end

new text begin A person must not convert a
well or boring to a gas well, except that an exploratory boring constructed before enactment
of section 103I.707 may be converted to a gas well if constructed in accordance with
provisions of section 103I.707, except that the outermost casing may be:
new text end

new text begin (1) ASTM Standard A53;
new text end

new text begin (2) ASTM Standard A589, Types I, II, and III;
new text end

new text begin (3) API Specification 5L; or
new text end

new text begin (4) API Specification 5CT.
new text end

Sec. 11.

new text begin [103I.706] GAS WELLS.
new text end

new text begin Subdivision 1. new text end

new text begin Rulemaking authority. new text end

new text begin The commissioner of health must adopt rules
for gas wells. In adopting rules under this section, the commissioner must use the expedited
procedure in section 14.389. The commissioner must publish notice of intent to adopt
expedited rules within 24 months after May 22, 2024.
new text end

new text begin Subd. 2. new text end

new text begin Fees. new text end

new text begin (a) License, certification, and registration renewals are not prorated and
expire on December 31 of each year.
new text end

new text begin (b) An applicant must meet the gas well contractor license requirements and fee
requirements to construct, repair, or seal a gas well. The fee for a gas well contractor license
is $300. The annual renewal fee for a gas well contractor license is $300.
new text end

new text begin (c) A gas well contractor must designate a certified representative. The certified
representative must meet the application and fee requirements. The application fee for a
certified representative is $100. The annual renewal fee for a certified representative is
$100.
new text end

new text begin (d) A gas well contractor must meet the registration and fee requirements for rigs used
to construct, repair, service, or seal a gas well. The fee to register gas well rigs is $125. The
annual renewal fee for gas well rig registration is $125.
new text end

new text begin (e) If a gas well contractor or certified representative under paragraphs (b) and (c) fails
to submit all information required for renewal or submits the application and information
after the required renewal date:
new text end

new text begin (1) the gas well contractor or certified representative must include a late fee of $75; and
new text end

new text begin (2) the gas well contractor or certified representative may not conduct activities authorized
by the gas well contractor's license or certified representative's certification until the renewal
application, renewal application fee, and all other information required is submitted.
new text end

new text begin (f) A gas well contractor must submit a notification for construction of a proposed gas
well on a form prescribed by the commissioner, with a fee of $10,000.
new text end

new text begin (g) A gas well contractor must submit a notification for sealing a gas well on a form
prescribed by the commissioner, with a fee of $7,500.
new text end

new text begin Subd. 3. new text end

new text begin Rig registration. new text end

new text begin (a) Rigs used to drill, maintain, repair, or seal a gas well,
including drilling rigs and workover rigs, must be registered with the commissioner.
new text end

new text begin (b) A person must file an application to register a rig on a form provided by the
commissioner with the fee under subdivision 2, paragraph (d), with the commissioner.
new text end

new text begin (c) A registration is valid until the date prescribed by the commissioner in the registration.
new text end

new text begin (d) A person must file an application with the fee under subdivision 2, paragraph (d), to
renew the registration by the date prescribed by the commissioner in the registration.
new text end

new text begin Subd. 4. new text end

new text begin Gas well contractor's license. new text end

new text begin (a) A person must not construct, repair, or seal
a gas well without a gas well contractor's license issued by the commissioner.
new text end

new text begin (b) A person must file a complete application for a gas well contractor's license on a
form provided by the commissioner with the fee under subdivision 2, paragraph (b), with
the commissioner. The person applying must meet the qualifications for a gas well contractor
license.
new text end

new text begin (c) A gas well contractor's license is valid until the date prescribed by the commissioner
in the license.
new text end

new text begin (d) A gas well contractor must file a complete application with the fee under subdivision
2, paragraph (b), to renew the license by the date prescribed by the commissioner in the
license. A person must not construct, repair, or seal a gas well until a gas well contractor's
license is renewed. The commissioner may not renew a license until the renewal fee is paid.
new text end

new text begin (e) A gas well contractor must include information at the time of renewal that the
applicant has met the continuing education requirements established by the commissioner
for gas wells.
new text end

new text begin (f) A gas well contractor must designate a certified representative to supervise and
oversee regulated work on gas wells.
new text end

new text begin (g) A person must file a complete application on a form provided by the commissioner
with the fee under subdivision 2, paragraph (c), to qualify as a certified representative.
new text end

new text begin (h) A certified representative must file an application with the fee under subdivision 2,
paragraph (c), to renew the certification by the expiration date prescribed by the commissioner
on the certification. A certified representative may not supervise or oversee regulated work
on a gas well until the renewal application and application fee are submitted. The
commissioner may not review a certification until the renewal fee is paid.
new text end

new text begin (i) A certified representative must include information at the time of renewal that the
applicant has met the continuing education requirements established by the commissioner
for gas wells.
new text end

new text begin (j) The commissioner of natural resources may require a bond, security, or other assurance
from a gas well contractor if the commissioner of natural resources has reasonable doubts
about the person's financial ability to comply with the requirements of law relating to
reclamation of a gas well and the process to restore the land disturbed by a gas well drilling
and production operations back to the condition of original state.
new text end

new text begin (k) The commissioner may suspend or revoke a licensee's license according to section
144.99.
new text end

new text begin Subd. 5. new text end

new text begin Construction notification. new text end

new text begin (a) A gas well contractor must not begin drilling
or constructing a gas well unless it is included in a valid gas resource development permit
issued by the commissioner of natural resources.
new text end

new text begin (b) The contractor must submit a notification to the commissioner to construct a gas
well after receiving permit approval from the commissioner of natural resources and prior
to drilling or constructing a gas well. A gas well contractor must file the gas well notification
with the fee under subdivision 2, paragraph (f), with the commissioner.
new text end

new text begin Subd. 6. new text end

new text begin Access to drill sites. new text end

new text begin (a) The commissioner of health shall have access to gas
well sites to inspect gas wells, including the drilling, construction, and sealing of gas wells.
new text end

new text begin (b) The commissioner of health has enforcement authority according to section 144.99.
new text end

new text begin Subd. 7. new text end

new text begin Emergency notification. new text end

new text begin In the event of an occurrence during construction,
repair, or sealing of a gas well that has a potential for significant adverse public health or
environmental effects, the person drilling or constructing a gas or well must promptly:
new text end

new text begin (1) take reasonable action to minimize the adverse effects; and
new text end

new text begin (2) notify the commissioners of health, natural resources, and the Pollution Control
Agency immediately by informing the Minnesota Duty Officer.
new text end

new text begin Subd. 8. new text end

new text begin Sealing notification. new text end

new text begin (a) A gas well, including an unsuccessful gas well, that
is not in use must be sealed by a gas well contractor.
new text end

new text begin (b) A gas well contractor must file a notification and fee with the commissioner prior
to sealing a gas well.
new text end

new text begin Subd. 9. new text end

new text begin Report of work. new text end

new text begin Within 60 days after completion or sealing of a gas well, the
gas well contractor must submit a verified report to the commissioner on a form prescribed
by the commissioner or in a format approved by the commissioner.
new text end

Sec. 12.

new text begin [103I.707] GAS WELL NOTIFICATION AND CONSTRUCTION.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Casing" means an impervious durable pipe placed in a well to prevent the walls
from caving in and to seal off surface drainage or undesirable water, gas, or other fluids to
prevent entering the well and the groundwater.
new text end

new text begin (c) "Confining layer" means a geological material that restricts water movement relative
to an aquifer. A confining layer includes:
new text end

new text begin (1) a stratum of unconsolidated materials or bedrock ten feet or more in vertical thickness
that has a vertical hydraulic conductivity of [10-6] centimeters per second or less;
new text end

new text begin (2) a stratum of clay, sandy clay, or silty clay ten feet or more in vertical thickness, as
defined in the Soil Survey Manual, United States Department of Agriculture Handbook; or
new text end

new text begin (3) any portion of the Decorah, Glenwood, St. Lawrence, or Eau Claire sedimentary
bedrock formations as described in George Austin, "Paleozoic Lithostratigraphy of
Southeastern Minnesota," in Geology of Minnesota: A Centennial Volume.
new text end

new text begin (d) "Drilling fluid additive" is a substance added to the air or water used in the fluid
system of drilling a gas well.
new text end

new text begin (e) "Hydraulic Fracturing Treatment" means all stages of the treatment of a well by the
application of fluid under pressure that is expressly intended to initiate or propagate fractures
in a target geologic formation to enhance production of oil and gas.
new text end

new text begin (f) "Neat cement grout" means a mixture in the proportion of 94 pounds of Portland
cement and not more than six gallons of clean water. Bentonite up to five percent by weight
of cement (4.7 pounds of bentonite per 94 pounds of Portland cement) may be used to reduce
shrinkage. Admixtures meeting the standard specifications of ASTM Standard C494 may
be used to reduce permeability or control time of set.
new text end

new text begin (g) "Production" includes extraction and beneficiation of gas from consolidated or
unconsolidated formations in the state.
new text end

new text begin (h) "Surface casing" means a string of casing set and cemented in a gas well to prevent
lost circulation while drilling deeper and to protect strata known or reasonably expected to
serve as a source of drinking water for human consumption.
new text end

new text begin (i) "Tremie pipe" means a pipe or hose used to insert grout into an annular space or to
seal a gas well.
new text end

new text begin Subd. 2. new text end

new text begin Gas well contractor's license qualifications. new text end

new text begin (a) A person must have a gas
well contractor's license to supervise and oversee regulated work on gas wells.
new text end

new text begin (b) A certified representative must be a professional engineer or geoscientist licensed
under sections 326.02 to 326.15 or a professional geologist certified by the American Institute
of Professional Geologists.
new text end

new text begin Subd. 3. new text end

new text begin Gas well construction notification requirements. new text end

new text begin (a) A gas well contractor
must file a gas well notification, under section 103I.706, subdivision 5, with the fee under
section 103I.706, subdivision 2, paragraph (f).
new text end

new text begin (b) A gas well construction notification is valid for 18 months.
new text end

new text begin (c) A new notification must be filed with the commissioner:
new text end

new text begin (1) if a gas well contractor other than the one listed on the original notification will be
constructing the gas well;
new text end

new text begin (2) if the gas well is completed on a property other than that listed in the original
notification; and
new text end

new text begin (3) before a gas well is deepened or before a casing is installed or removed below the
frost line.
new text end

new text begin (d) A gas well contractor intending to construct a gas well must notify the commissioner
at least 24 hours prior to:
new text end

new text begin (1) beginning gas well construction;
new text end

new text begin (2) setting casing; and
new text end

new text begin (3) placing grout.
new text end

new text begin Subd. 4. new text end

new text begin Injection prohibited. new text end

new text begin A gas well must not be used to inject or dispose surface
water, groundwater, or any other liquid, gas, or chemical. This does not prohibit the injection:
new text end

new text begin (1) of approved drilling fluids as provided in subdivision 7; or
new text end

new text begin (2) if a class 2 injection well permit is obtained for a gas well, as authorized by the
Environmental Protection Agency.
new text end

new text begin Subd. 5. new text end

new text begin Hydraulic fracturing treatment prohibited. new text end

new text begin Hydraulic fracturing treatment
is prohibited in a gas well.
new text end

new text begin Subd. 6. new text end

new text begin Disposal of material. new text end

new text begin Drilling fluid, cuttings, treatment chemicals, and discharge
water must be:
new text end

new text begin (1) containerized;
new text end

new text begin (2) disposed of off site or a class 2 injection well permit obtained and authorized by the
Environmental Protection Agency; and
new text end

new text begin (3) disposed of according to federal, state, and local requirements.
new text end

new text begin Subd. 7. new text end

new text begin Drilling fluids. new text end

new text begin (a) Drilling fluids used for a gas well must be water or air based.
Water must come from a potable water system and contain a free chlorine residual at all
times.
new text end

new text begin (b) Drilling fluid additives must meet the requirements of ANSI/NSF Standard 60.
new text end

new text begin Subd. 8. new text end

new text begin Casing and grout. new text end

new text begin (a) Casing for a gas well must be steel casing that meets
API Specification 5CT and is of appropriate grade for the pressures and conditions. Casing
installed for the construction of a gas well must be new casing. Casing must be marked by
the manufacturer according to API Specification 5CT.
new text end

new text begin (b) Centralizers must be installed at a minimum of 20-foot intervals on the casing.
new text end

new text begin (c) A blowout preventer that is appropriate for the gas pressures expected must be
installed on the casing during all drilling after a surface casing has been installed.
new text end

new text begin (d) Casing offsets are prohibited.
new text end

new text begin (e) Casing must not be driven.
new text end

new text begin (f) The diameter of the drilled hole in which surface casing will be set must be least 1.5
inches greater than the nominal outside diameter of the casing that will be installed. All
other casings must have at least 0.84 inches between the nominal outside diameter of the
casing being cemented and the previously set casing's inside nominal diameter.
new text end

new text begin (g) A gas well must be cased and grouted from the bottom of the casing up to the
established surface area with neat cement to prevent interconnection of different locations
within the uncased portion of the well encountering:
new text end

new text begin (1) gas and water; and
new text end

new text begin (2) water.
new text end

new text begin (h) Neat cement grout must be used for all grouting.
new text end

new text begin (i) Grouting must start immediately on completion of drilling.
new text end

new text begin (j) Grout must be pumped into the annular space from the bottom up through the casing,
drill rods, or a tremie pipe. Neat cement grout must be allowed to set a minimum of 24
hours. Rapid setting cement must be allowed to set a minimum of 12 hours. Drilling is
prohibited during the time the cement is setting.
new text end

new text begin (k) The annular space between an inner casing and an outer casing must be grouted for
its entire length by pumping neat cement grout through a tremie pipe, a drill rod, or the
casing. Neat cement grout must be allowed to set a minimum of 24 hours. Rapid setting
cement must be allowed to set a minimum of 12 hours. Drilling is prohibited during the
time the cement is setting.
new text end

new text begin (l) The casing or inner casing of a multi-cased gas well must extend vertically at least
one foot above the established ground surface and at least five feet above the regional flood
level. The established ground surface immediately adjacent to the casing must be graded
to divert water away from the casing. Termination of the top of the casing below the
established ground surface, such as in a vault or pit, is prohibited. Outer casings must
terminate no less than four feet below the established ground surface.
new text end

new text begin (m) The casing of a gas well must be covered with a threaded or bolted and flanged gas
tight cover equivalent to the casing in weight and strength.
new text end

new text begin (n) The casing of a gas well must be protected by placing three posts at least four inches
square or four inches in diameter around the boring at equal distances from each other and
two feet from the gas well. The posts must extend two feet above the established ground
surface and four feet below the established ground surface, or to a depth of two feet if each
post is set in concrete to a depth of two feet. The posts must be made of reinforced concrete,
decay-resistant wood, or schedule 40 steel pipe. Steel pipe must be covered with an
overlapping, threaded, or welded steel or iron cap or be filled with concrete or cement.
new text end

new text begin Subd. 9. new text end

new text begin Isolation distance. new text end

new text begin A person must not place, construct, or install a gas well
less than 500 feet from a residential building, 500 feet from a water supply well, or 2,000
feet from a school facility or child care center.
new text end

new text begin Subd. 10. new text end

new text begin Groundwater protection. new text end

new text begin (a) During the drilling and sealing process, the gas
well must be constructed and maintained to prevent the introduction of surface contaminants
into the well and to prevent the passage of water from one aquifer to another and covered
and protected to prevent vandalism or entry of debris into the well.
new text end

new text begin (b) A gas well must not be constructed to interconnect aquifers separated by a confining
layer.
new text end

new text begin Subd. 11. new text end

new text begin Sealing gas wells. new text end

new text begin (a) A gas well contractor must file a notification under
section 103I.706, subdivision 8, with the fee under section 103I.706, subdivision 2, to the
commissioner.
new text end

new text begin (b) A gas well sealing notification is valid for 18 months.
new text end

new text begin (c) A new sealing notification must be filed with the commissioner if a gas well contractor
other than the one listed on the original notification will seal the gas well.
new text end

new text begin (d) The gas well contractor must notify the commissioner of health:
new text end

new text begin (1) after receiving authorization from the department of natural resources to decommission
a gas well; and
new text end

new text begin (2) at least 24 hours prior to the start of sealing the gas well.
new text end

new text begin (e) Materials, debris, and obstructions that may interfere with sealing must be removed
from the gas well.
new text end

new text begin (f) A gas well must be sealed by filling the gas well, including any open annular space,
with neat cement grout. The grout must be pumped through a tremie pipe or the casing from
the bottom of the gas well or annular space upward to within two feet of the established
ground surface. The bottom of the tremie pipe must remain submerged in grout while
grouting.
new text end

new text begin (g) Open annular space surrounding a casing must be grouted by:
new text end

new text begin (1) filling the annular space with grout according to clause (3);
new text end

new text begin (2) removing the casing and filling the well with grout. If casing is to be removed from
a collapsing formation, grout must be inserted so the bottom of the casing remains submerged
in grout;
new text end

new text begin (3) perforating the casing with a minimum of one 1/2-square-inch hole in each foot of
casing and forcing grout through the perforations; or
new text end

new text begin (4) ripping a minimum of five feet of casing for every 20 feet of casing and forcing grout
through the ripped casing, except that casing must be ripped through the entire length of a
confining layer.
new text end

new text begin (h) The gas resource development permittee must have a licensed gas well contractor
seal a gas well if:
new text end

new text begin (1) the gas well contributes to the spread of contamination;
new text end

new text begin (2) the gas well was attempted to be sealed but was not sealed according to the provisions
of this chapter; or
new text end

new text begin (3) the gas well is located, constructed, or maintained in a manner that its continued use
or existence endangers groundwater quality or is a safety or health hazard.
new text end

new text begin (i) The licensed gas well contractor must seal the gas well consistent with provisions of
this chapter.
new text end

new text begin Subd. 12. new text end

new text begin Rules. new text end

new text begin A person requesting to construct a gas well must comply with this
section until permanent rules for gas wells adopted by the commissioner are published in
the State Register.
new text end

new text begin Subd. 13. new text end

new text begin Expiration. new text end

new text begin This section expires on December 31 of the year that the permanent
rules are adopted pursuant to section 103I.706.
new text end

Sec. 13.

new text begin [103I.708] OIL WELLS.
new text end

new text begin Notwithstanding any provision of chapter 93, or the rules adopted thereunder, to the
contrary, a person shall not explore, prospect, or construct an oil well.
new text end

Sec. 14. new text begin APPROPRIATION; GAS WELL CONSTRUCTION AND SEALING
NOTIFICATION.
new text end

new text begin Subdivision 1. new text end

new text begin Programs; registration; licensing; rulemaking. new text end

new text begin $863,000 in fiscal year
2026 is appropriated from the general fund to the commissioner of health for the development
of a legislatively authorized gas well and sealing notification program, rig registration,
licensing program, inspection program, rulemaking, credentialing in an information
technology system for the electronic submission of gas well records, licensure, and
registration that accepts online fee payments, issues unique identifiers, has the ability to
retrieve records, and contains a searchable database. This is a onetime appropriation that is
available until December 31, 2027.
new text end

new text begin Subd. 2. new text end

new text begin Staffing. new text end

new text begin $395,000 in fiscal year 2026 and $395,000 in fiscal year 2027 are
appropriated from the general fund to the commissioner of health to hire staff who will
inspect, enforce, and manage oversight of a legislatively authorized gas well and sealing
notification, licensing, and inspection program in Minnesota. Staff will serve as subject
matter experts in gas well construction and sealing of Minnesota's newly discovered gas
reserves. The base appropriation for this subdivision in fiscal year 2028 and thereafter shall
be $........
new text end

Sec. 15. new text begin EFFECTIVE DATE.
new text end

new text begin This article is effective the day following final enactment.
new text end