Unless the context otherwise requires, the following terms shall have the following meanings:

(1) BOARD. The State Oil and Gas Board created by this article.

(2) DEVELOPED AREA or DEVELOPED UNIT. A drainage unit having a well completed thereon which is capable of producing oil or gas in paying quantities; however, in the event it is shown and the board finds that a part of any unit is nonproductive, then the developed part of the unit shall include only that part found to be productive.

(3) DRAINAGE UNIT. The area in a pool which may be drained efficiently and economically by one well.

(4) FIELD. The general area which is underlain or appears to be underlain by at least one pool, and such term shall include the underground reservoir or reservoirs containing crude oil or natural gas or both. The words 'field' and 'pool' have the same meaning when only one underground reservoir is involved; however, the word 'field,' unlike 'pool,' may relate to two or more pools.

(5) GAS. All natural gas, including casinghead gas, and all other hydrocarbons not defined as oil in subdivision (9) of this section.

(6) ILLEGAL GAS. Gas which has been produced within the State of Alabama from any well or wells in excess of the amount allowed by any rule, regulation, or order of the board, as distinguished from gas produced within the State of Alabama not in excess of the amount so allowed, which is 'legal gas.'

(7) ILLEGAL OIL. Oil which has been produced within the State of Alabama from any well or wells in excess of the amount allowed by any rule, regulation, or order of the board, as distinguished from oil produced within the State of Alabama not in excess of the amount so allowed, which is 'legal oil.'

(8) ILLEGAL PRODUCT. Any product of oil or gas, any part of which was processed or derived in whole or in part from illegal oil or illegal gas or from any product thereof, as distinguished from 'legal product,' which is a product processed or derived to no extent from illegal oil or illegal gas.

(9) OIL. Crude petroleum oil and other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods and which are not the result of a condensation of gas after it leaves the pool.

(10) OPERATOR. The person who is authorized by the board to operate an oil, gas, or Class II injection well, or production facility, or processing facility, or engages in the transportation of hydrocarbons by pipeline, including the handling and disposal of wastes that may be generated during operation of a well, or production facility, or processing facility.

(11) OWNER. The person who has the right to drill into and to produce from any pool and to appropriate the production either for himself or herself or for himself or herself and another or others.

(12) PERSONS. Any natural person, firm, corporation, association, partnership, joint venture, receiver, trustee, guardian, executor, administrator, fiduciary, representative of any kind or any other group acting as a unit.

(13) POOL. An underground reservoir containing a common accumulation of crude petroleum oil or natural gas or both and each zone of a general structure which is completely separated from any other zone in the structure.

(14) PRODUCER. The owner of a well or wells capable of producing oil or gas or both; provided, however, that the word 'producer' as used in Section 9-17-25 shall also include any person receiving money or other valuable consideration as royalty or rental for oil or gas produced or because of oil or gas produced, whether produced by him or her or by some other person on his or her behalf, either by lease, contract or otherwise, and whether the royalty consists of a portion of the oil or gas produced being run to his or her account or a payment in money or other valuable consideration.

(15) PRODUCT. Any commodity made from oil or gas and shall include refined crude oil, crude tops, topped crude, processed crude petroleum, residue from crude petroleum, cracking stock, uncracked fuel oil, fuel oil, treated crude oil, residuum, gas oil, casinghead gasoline, natural gas gasoline, naphtha, distillate, gasoline, kerosene, benzine, wash oil, waste oil, blended gasoline, lubricating oil, blends or mixtures of oil with one or more liquid products or byproducts derived from oil or gas and blends or mixtures of two or more liquid products or byproducts derived from oil or gas, whether hereinabove enumerated or not.

(16) REASONABLE MARKET DEMAND. As to oil, the amount of oil reasonably needed for current consumption and use, together with a reasonable amount of oil for storage and working stock and, as to gas, the amount of gas of any type reasonably needed to supply the current consumption and use of such type of gas.

(17) TENDER. A permit or certificate of clearance, approved and issued or registered under the authority of the board, for the transportation of oil, gas, or products.

(18) WASTE. In addition to its ordinary meaning, such term shall mean 'physical waste' as that term is generally understood in the oil and gas industry. It shall include any of the following:

a. The inefficient, excessive or improper use or dissipation of reservoir energy and the locating, spacing, drilling, equipping, operating, or producing of any oil or gas well or wells in a manner which results or tends to result in reducing the quantity of oil or gas ultimately to be recovered from any pool in this state.

b. The inefficient storing of oil and the locating, spacing, drilling, equipping, operating, or producing of any oil or gas well or wells in a manner causing or tending to cause unnecessary or excessive surface loss or destruction of oil or gas.

c. Abuse of the correlative rights and opportunities of each owner of oil and gas in a common reservoir due to nonuniform, disproportionate and unratable withdrawals causing undue drainage between tracts of land.

d. Producing oil or gas in such manner as to cause unnecessary water channeling or coning.

e. The operation of any oil well or wells with an inefficient gas-oil ratio.

f. The drowning with water of any stratum or part thereof capable of producing oil or gas.

g. Underground waste however caused and whether or not defined.

h. The creation of unnecessary fire hazards.

i. The escape into the open air, from a well producing both oil and gas, of gas in excess of the amount which is necessary in the efficient drilling or operation of the well.

j. The use of gas, except sour gas, for the manufacture of carbon black.

k. The escape of gas into the open air, from a well producing gas, in excess of the amount which is necessary for safety reasons or for the efficient drilling, testing, and operation of the well.

l. Production of oil and gas in excess of reasonable market demand.

(a) The Oil and Gas Supervisor, with the concurrence of the board, shall have the authority and it shall be his duty to employ all personnel necessary to carry out the provisions of this article. Such personnel shall be employed under and shall be subject to the provisions of the Merit System Act.

(b) The State Oil and Gas Board is prohibited from discriminating against blacks in its employment practices.

As used in this article, the following words and phrases shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) AUTHORITY HAVING JURISDICTION. Alabama Liquefied Petroleum Gas Board.

(2) BOARD. The Alabama Liquefied Petroleum Gas Board.

(3) BRANCH. A local unit of an LP-gas business that is one or more of the following: a division or subdivision or a person doing business under a name other than the Class A permit holder's name; a place where the day-to-day retail operations of an LP-gas business are conducted and at which at least three of the following activities occur or conditions exist: sales of appliances, orders are taken for LP-gas repair and service; orders are taken to refill LP-gas systems either by phone or in person; employees are present during a normal workday; or a place that requires a city or county license to conduct business.

(4) LP. Liquefied petroleum gas.

(5) LPG. Liquefied petroleum gas.

(6) LP-GAS. Liquefied petroleum gas.

(7) LIQUEFIED PETROLEUM GAS. Any material having vapor pressure not exceeding that allowed for commercial propane composed predominantly of the following hydrocarbons, either by themselves or as mixtures: propane, propylene, butanes (normal butane or isobutane), and butylenes.

(8) LIQUEFIED PETROLEUM GAS RECOVERY FUND. A cash surety fund designated to ensure compliance of LP-gas laws, rules, and regulations adopted by the LP-Gas Board.

(9) LIQUEFIED PETROLEUM GAS RESEARCH AND EDUCATION FUND. A fund created to finance activities relating to research, development, and the implementation of marketing, advertising, and informational programs relating to LP-gas directed toward the consumer as well as for the education of industrial members and employees.

(10) LIQUEFIED PETROLEUM GAS SYSTEM. Any assembly consisting of one or more containers with a means for conveying LP-gas from the container(s) to dispensing or consuming devices (either continuously or intermittently) and which incorporates components intended to achieve control of quality, flow, pressure, or state (either liquid or vapor).

(11) PERSON. Every natural person, firm, copartnership, association, or corporation.

(12) RED TAG. A red card or device containing an official printed notice of the condemnation of a liquefied petroleum gas system or any connected or disconnected LP-gas component, LP-gas storage container, LP-gas container appurtenance, or LP-gas motor vehicle, transport, or delivery unit placed as a result of a violation of the liquefied petroleum gas safety code provisions and regulations, or as a result of a mechanical defect found on the LP-gas motor vehicle, transport, or delivery unit that could cause a danger to the public if allowed to continue to operate. When attached to a system or to any connected or disconnected LP-gas component, LP-gas storage container, LP-gas appurtenances, motor vehicle, transport, or delivery unit a red tag is official notice of condemnation and of the prohibition of further use, so long as the red tag remains affixed by law.

(a) There is created and established the Alabama Liquefied Petroleum Gas Board. The board shall be composed of eight members: The State Fire Marshal; the state Director of Public Safety; the President of the Alabama Public Service Commission; four members who are representatives of the liquefied petroleum gas retail Class A permit holders; and one member of the general public who shall be appointed by the Governor.

(b) Members of the board who are representatives of the liquefied petroleum gas retail permit holders shall have been legal residents of the State of Alabama for at least five years next preceding the date of appointment and shall have been actively engaged in the retail distribution of liquefied petroleum gas in this state for a period of at least five years. No retail Class A permit holder shall have more than one representative on the board at any one time. It is the legislative intent that no single corporation or partnership comprised of separate entities within the state, whether or not separately licensed, be represented on the board by more than one representative at any one time.

(c) From each of four substantially equal geographical areas of the state, designated as the southeast, the northeast, the northwest, and the southwest, the Governor shall appoint one retail permit holder member of the board. Such member shall be appointed from a list of at least three nominees receiving the largest number of votes according to written ballots executed by representatives of retail Class A permit holders.

(d) In the event the Governor has not appointed a board member at the end of 90 days after the list of retail permit holders has been submitted to him or her, the person on the list having the most votes shall become the board member. In the event of a tie for the most votes, a majority vote of the board members shall determine which person of those tied shall become the board member.

(e) In the event a vacancy occurs during the term of a board member, the administrator shall call an election to fill the vacancy and the election shall be held and conducted pursuant to subsection (f). When an elected board member sells his or her LP-gas business or for any reason is no longer actively engaged in the day-to-day operation of an LP-gas business, his or her seat on the board shall be automatically vacated by the completion of the next regularly scheduled board meeting.

(f) The balloting for board members, successor members, and filling vacancies for an unexpired term of office shall be conducted by the administrator of the board under the direction and supervision of the board. For appointments and vacancies, the administrator shall forward by registered or certified mail an official ballot to each retail permit holder or his or her duly designated representative with instructions for executing the ballot and returning it to the board. The terms of all board members shall be for six years, including the consumer member and members serving on March 20, 1992, but no member shall be denied the right to succeed himself or herself and no member shall serve more than two consecutive terms of office.

(g) The board shall elect its own chairman and vice-chairman at its first regular meeting each calendar year. All meetings of the board shall be held at Montgomery, Alabama, and shall be on a prescribed date, at least quarterly, and at such time as a majority of the board members may request in writing to the board chairman. Each ex officio member of the board may appoint a designee to represent him or her at all board meetings. Any four members, or their designees, shall constitute a quorum for the transaction of any business which may come before the board. The board may adopt bylaws and rules of administrative procedure, pursuant to the Alabama Administrative Procedure Act.

(h) The board may promulgate rules and regulations having the force and effect of law to carry out this article.

Board members shall receive travel expenses and per diem based at the rate that is currently prescribed by the state for its state employees, while attending official meetings of the board or while attending to official board business. Except that per diem paid to board members shall be no less than one full day's per diem, and payment shall be based on attendance at a board meeting rather than the time of arrival and departure. No member of the board shall receive per diem and expense allowance for more than 30 days in any one calendar year.

The board shall have the power to make and enforce rules and regulations governing the design, construction, location, installation and operation of containers, tanks, systems and equipment for storing, utilizing, handling and transporting liquefied petroleum gases and rules to secure the substantial accuracy of all meters, safety devices and regulators generally used in connection with such gases. No person shall be permitted to certify the accuracy of their own company owned meters. Said rules and regulations shall be such as are reasonably necessary for the protection of the health and safety of the public and persons using such gases, and shall be adopted pursuant to the state administrative procedure statutes. All rules and regulations shall be printed in pamphlet form and shall be mailed to all liquefied petroleum gas dealers registered with the board, and to any person upon request.

In order that the administrator of the board and inspectors may determine whether or not a danger to the public or to a liquefied petroleum gas user exists, and there is reasonable cause to believe that such danger does exist, the said administrator and inspectors may enter any building or upon any premises connected to a liquefied petroleum gas system for the sole purpose of conducting an inspection or an investigation of such system. If a violation is found in conducting such inspection which is determined to be a hazard and a danger to the public or to a liquefied petroleum gas user, said administrator and inspectors shall have the power, duty and authority to shut off the liquefied petroleum gas system and to condemn the system from further use for purposes of safety until the gas system has been certified as back in compliance with adopted liquefied petroleum gas safety code standards and until the red tag is removed, or authorized to be removed, by a board appointee or employee. When a system is condemned, it shall be 'red-tagged.'

(a) The board shall appoint, prescribe the duties of, and fix the compensation of an administrator. Before entering upon the duties of office, the administrator shall make and file with the Secretary of State an official bond in an amount to be fixed by the board. Premiums of the bond shall be paid out of funds of the board. The bond shall be payable to the State of Alabama and shall be written by an approved insurance company qualified to do business in the State of Alabama. The board may dismiss an administrator at its discretion. The board shall adopt a seal, which shall be in the care and custody of the administrator. The board may, subject to the Merit System, employ and prescribe the duties of assistants and inspectors necessary to carry out this article. The board may, without regard to the Merit System Act, engage and employ consultants and technical advisors considered necessary in carrying out its responsibilities.

(b) The administrator and inspectors are constituted peace officers of the State of Alabama and are clothed with the powers of peace officers and deputy sheriffs, and may exercise such powers anywhere within the state. They may issue a warning ticket or a uniform traffic citation to or arrest violators of Sections 40-17-160 to 40-17-166, inclusive, and any state or federal law or regulation adopted by the board relating to the transportation of liquefied petroleum gas and carry such violators before the district court in the county in which the violation is committed.

(c) All fees and penalties collected under this article or otherwise inuring to the credit of the board shall be deposited in the State Treasury in a fund designated the 'Liquefied Petroleum Gas Board Fund,' which is established by this subsection. All expenditures from the fund shall be subject to the terms, conditions, provisions, and limitations of Title 41, Chapter 4, Article 4.

(d) All balances in the fund in excess of $200,000 at the end of each fiscal year shall be transferred to the Liquefied Petroleum Gas Research and Education Fund established in the State Treasury. The monies in the Liquefied Petroleum Gas Research and Education Fund shall be paid out only by warrant of the Comptroller upon the Treasurer, upon itemized vouchers, approved by the administrator; provided, that no funds shall be withdrawn or expended except as budgeted and allotted according to the provisions of Sections 41-4-80 through 41-4-96 and Sections 41-19-1 through 41-19-12, and only in amounts as stipulated in the general appropriation or other appropriation bills each new fiscal year for research, development, and training and the implementation of marketing, advertising, and information programs relating to LP-gas. Any other appropriations, grants, or other sources of funding made available for the purpose of LP-gas research and education shall be deposited in the LP-Gas Research and Education Fund.

(a) The board may issue permits to any person to engage in or continue the business of selling, distributing, storing, or transporting liquefied petroleum gases and to engage in or continue the business of selling, installing, servicing, repairing, removing, or adjusting liquefied petroleum gas containers, tanks, or systems or to perform magnetic, hydrostatic, visual, or X-ray inspections of liquefied petroleum gas storage containers, cargo tanks, motor fuel containers, and cylinders in the State of Alabama; and to prescribe the requirements of any person to obtain the permits. The board may revoke any permit issued, for cause, in the opinion of the board.

(b) The permits shall be of 10 types:

(1) PERMIT A. Shall give the holder a right to engage in or continue the business of selling, distributing, storing, or transporting liquefied petroleum gases and to engage in or continue the business of selling, installing, servicing, repairing, or adjusting liquefied petroleum gas containers, tanks, or systems at retail or installing, repairing, servicing, removing, or adjusting liquefied petroleum carburetion equipment, or to perform magnetic, hydrostatic, visual, or X-ray inspections of liquefied petroleum gas storage containers, cargo tanks, motor fuel containers, and cylinders. Before any person engages in or continues the business of selling, distributing, storing, or transporting liquefied petroleum gases, except where the liquefied petroleum gas so handled is in quantities of less than one gallon U.S. water capacity and is an integral part of a device for its utilization, or before any person engages in the business of selling, installing, servicing, removing, repairing, or adjusting liquefied petroleum gas containers, tanks, or systems at retail or installing, repairing, servicing, removing, or adjusting liquefied petroleum carburetion equipment, or to perform magnetic, hydrostatic, visual, or X-ray inspections of liquefied petroleum gas storage containers, cargo tanks, motor fuel containers, and cylinders in the State of Alabama, the person shall first obtain from the board a Permit A and shall execute and file with the board the insurance and a surety in cash as herein required.

The board shall require every applicant for Permit A to present evidence to the board that the applicant has a bona fide contract or a letter of intent to sell, from a reputable supplier of liquefied petroleum gas for an amount of the gases sufficient to supply the customers the applicant has estimated that will be served. In addition to the requirement of possessing a Class A permit, persons doing business as or in a name other than the name listed on the Class A permit shall be required to have a separate Class B-1 permit unless the person doing business as or in another name has a separate Class A permit for each business.

(2) PERMIT B. Shall give the holder a right to engage in or continue the business of transporting, storing, distributing and/or selling liquefied petroleum gas at wholesale or in unit quantities of 5,000 gallons or more at retail to end users or act as wholesale distributors, suppliers, or agents thereof or act as a consignor or shipper that delivers or causes LP-gas to be delivered in the State of Alabama. Before any person engages in or continues the business of transporting, storing, distributing, and/or selling liquefied petroleum gas at wholesale in any quantity to retailers or retail to end users in unit quantities of 5,000 gallons or more or to other wholesaler distributors, suppliers, or agents thereof in the State of Alabama and not being a holder of a Permit A, the person shall first obtain from the board a Permit B and shall execute and file the insurance and surety in cash as required herein, except that those wholesale distributors, suppliers, consignors, shippers, or agents thereof who only sell liquefied petroleum gas at wholesale and transport no gas in the state shall not be required to file a motor vehicle or general liability certificate of insurance with the board. Class B permit holders shall keep records and shall report monthly, and at all other times as the board shall deem necessary, all sales of liquefied petroleum gas made to retailers, end users, and to other wholesale distributors, suppliers, or agents in this state. Failure to make timely reports and pay required fees shall cause interest and penalties to be assessed as described in Section 9-17-109. Any person possessing a valid Class A permit shall not be required to obtain a Class B permit.

(3) PERMIT B-1. Shall give the holder a right to operate an individual branch, division, or subdivision or to act as an agent of a Class A permit holder to engage in or continue the business of selling, storing, or transporting liquefied petroleum gases at retail and to engage in or continue the business of selling, installing, servicing, repairing, removing, or adjusting liquefied petroleum gas containers, tanks, or systems at retail or to install, repair, remove, service, or adjust liquefied petroleum carburetion equipment, or to perform magnetic, hydrostatic, visual, or X-ray inspections of liquefied or petroleum gas storage containers and cylinders. Authorized agents of Class B-1 permit holders who only operate off-premises cylinder filling stations shall not be required to obtain a Class B-1 permit.

The board or the board administrator may authorize any person to act as an agent of a Class A or B-1 permit holder to install, service, repair, adjust, or inspect liquefied petroleum gas containers, tanks, and systems without obtaining a Class B-1 permit; provided that the authorized agents have completed the board's certification requirements and the permit holder has provided the board with proof that the agents have met the insurance and surety, in cash, consistent with the requirements of this section. The authorized agents shall not be required to meet the storage requirements of Section 9-17-107.

Before any person engages in or continues in the operation of an individual branch, division, or subdivision or acts as an agent of a valid Class A permit holder to sell, store, or transport liquefied petroleum gas and to sell, install, service, repair, or adjust liquefied petroleum gas containers, tanks and systems at retail, or to install, repair, service, remove, or adjust liquefied petroleum carburetion equipment, or to perform magnetic, hydrostatic, visual, or X-ray inspections of liquefied petroleum gas storage containers, cargo tanks, motor fuel containers and cylinders, the person shall first obtain from the board a Permit B-1, meet the minimum storage requirements set out in Section 9-17-107, and shall execute and file with the board the insurance and surety in cash as herein required. Branches that were in operation when this article became law shall not be required to meet the storage requirement of Section 9-17-107. A Class B-1 permit holder shall not be required to file or maintain separate or additional insurance or surety in cash as specified by this section provided that the Class B-1 permit holder is included in the parent company's Class A permit insurance and surety in cash on file with the board.

(4) PERMIT C. Shall give the holder a right to engage in or continue the business of installing, servicing, repairing, removing, or adjusting liquefied petroleum gas piping and installing, servicing, repairing, removing, or adjusting liquefied petroleum gas appliances on the down stream side of the tank outlet valves only. Before any person engages in or continues the business of installing, servicing, repairing, removing, or adjusting liquefied petroleum gas piping, and installing, servicing, repairing, removing, or adjusting liquefied petroleum gas appliances on the down stream side of the tank outlet valves only, and not being a holder of a Permit A and B-1, the person shall first obtain from the board a Permit C and execute and file with the board the insurance and a surety in cash as herein required. A separate permit shall be required for each business location.

(5) PERMIT C-1. Shall give the holder a right to engage in or continue the business of installing, servicing, repairing, removing, or adjusting any liquefied petroleum gas motor fuel carburetion equipment, the repair of appurtenances on motor fuel containers, cylinders, or carburetion components. Before any person engages in or continues the business of installing, servicing, repairing, removing, or adjusting liquefied petroleum gas motor fuel carburetion equipment, the repair of appurtenances on motor fuel containers, cylinders, or carburetion components in the State of Alabama, the person shall execute with the board the insurance and surety in cash herein required. A or B-1 permit holders shall not be required to obtain a Permit C-1. A separate permit shall be required for each business location.

(6) PERMIT C-2. Shall give the holder a right to engage in or continue the business of performing magnetic, hydrostatic, visual or X-ray inspections of liquefied petroleum gas storage containers, cargo tanks, motor fuel containers and cylinders. Before any person engages in or continues the business of performing magnetic, hydrostatic, visual, or X-ray inspection of liquefied petroleum gas storage containers, cargo tanks, motor fuel containers, and cylinders in the State of Alabama and not being a holder of a Permit A or B-1 the person shall obtain a Class C-2 Permit and execute with the board the insurance and surety in cash herein required. A separate permit shall be required for each business location.

(7) PERMIT D. Shall give the holder a right to engage in or continue the business of installing and/or repairing, or removal, of bulk storage systems of 5,000 gallons water capacity or more in single containers or in an aggregate of 5,000 gallons water capacity of a multi-container installation only. Before any person engages in or continues the business of installing bulk storage systems of 5,000 gallons water capacity or more in single containers or in a multi-container installation of an aggregate of 5,000 gallons water capacity, in the State of Alabama and not being a holder of a Permit A, the person shall first obtain from the board a Permit D and shall execute and file with the board the insurance and surety in cash as herein required.

The board shall require holders of a Permit D to submit plans for any proposed installation of any liquefied petroleum gas storage facility they are planning to install that is authorized under the terms of their permit. They shall obtain approval for the location and for the plans from the administrator of the board before construction is begun. All facilities shall be constructed according to rules and regulations of the board and the completed unit shall have board approval before being used. A minimum fee of two hundred dollars ($200) shall be paid to the board at the time the plans for each facility are presented for approval. This fee of two hundred dollars ($200) will cover examination of the plans and one site inspection. An additional fee of fifty dollars ($50) for each inspection trip to the site that is required shall be paid to the board before final approval is given for the facility to be used. These fees may be changed by action of the board.

(8) PERMIT E. Shall give the holder a right to engage in or continue the business of calibration and/or repair of liquefied petroleum gas liquid meters.

Before any person engages in or continues the business of calibration and/or repair of liquefied petroleum gas liquid meters, in the State of Alabama and not being a holder of a Permit A, that person shall first obtain from the board a Permit E and shall execute and file with the board the insurance and surety in cash as herein required.

(9) PERMIT F. Shall give the holder the right to engage in or continue the business of filling LP-gas cylinders and/or LP-gas motor fuel containers of less than 351 pounds water capacity from a stationary filling station. Before any person engages in or continues in the business of filling LP-gas cylinders and/or LP-gas motor fuel containers and not being a holder or an agent of a Permit A or Permit B-1, the person shall first obtain from the board a Permit F and shall execute and file with the board the insurance and surety in cash as herein required. Owners of businesses that hold a Permit F shall ensure that only trained, qualified personnel fill cylinders that contain LP-gas. Permit F holders shall not hold a Class F-1 permit. A separate permit, surety in cash and insurance certificate shall be required for each filling station

(10) PERMIT F-1. Shall give the holder the right to engage in or continue in the business of selling or filling welding or cutting gases as defined in subdivision (7) of Section 9-17-100 or selling or filling LP-gas cylinders and/or LP-gas motor fuel containers of less than 351 pounds water capacity from a stationary filling station and to transport welding or cutting gases, LP-gas cylinders, and/or LP-gas motor fuel containers. To qualify for a Class F-1 permit, the applicant shall be in the business of selling welding or cutting gas supplies and shall meet all state and federal regulations for the transportation of LP-gas. Holders of a Permit F-1 shall not sell more than 40,000 gallons of LP-gas each calendar year to be verified by purchases received in the previous 12 months in a sworn affidavit at time of renewal of the Permit F-1. Permit holders whose gallons exceed 40,000 gallons for the preceding 12 months shall meet the requirements of either the Permit A or Permit B-1, whichever permit is applicable. Permit holders who exceed 40,000 gallons in a calendar year shall be authorized to continue in the business of selling, filling, and transporting welding or cutting gases, LP-gas cylinders, and/or motor fuel containers under their Permit F-1, while the applicant is completing the requirements to obtain the proper permit provided that the permit holder has filed a completed application for the proper permit with the board. Failure to file an application for the proper permit and/or provide the required affidavit by the 31st of January after the Permit F-1 expiration date shall cause cancellation of the Permit F-1. Holders of a Permit F-1 shall not transport LP-gas in any bulk quantity. Holders of a Permit F-1 shall not operate off-premise cylinder exchanges or off-premise filling stations. Owners of businesses that hold a Permit F-1 shall ensure that only trained, qualified personnel fill or transport containers or cylinders that contain LP-gas. Before any person engages in or continues in the business of selling, transporting, or filling welding or cutting gases, LP-gas cylinders, and/or LP-gas motor fuel containers when the person is not an agent of or a holder of either a Permit A or Permit B-1, the person shall first obtain from the board a Permit F-1 and shall execute and file with the board on a form provided by the board the insurance and surety in cash as herein required. No person shall act as an agent of any Permit F-1 holder. Permit F-1 holders shall not hold a Class F permit. A separate permit, surety in cash, and insurance certificate shall be required for each filling station location.

(11) The administrator may issue temporary Class B, B-1, C, C-1, C-2, D, E, F, and F-1 permits as soon as all requirements have been met. The temporary permit shall remain in effect until the next regular board meeting, unless the board extends the effective date of any such temporary permit by official action.

(c) The board shall establish and maintain a LP-Gas Recovery Fund conditioned on full compliance with this article and the rules and regulations of the board. When the administrator has determined that there are claims against the LP-Gas Recovery Fund, there shall be a third party hearing by an administrative law judge from the office of the Attorney General to adjudicate the matter. When the appeal time has lapsed after an administrative hearing where the cash surety is determined to be in default, the administrator shall initiate action to recover the five thousand dollars ($5,000) cash surety from the person found to be in violation of this article and transfer the cash surety into the LP-Gas Research and Education Fund. After the conclusion of the appeal time, payment shall be received in the board office within 10 days. Interest on the payment shall begin to accrue on the eleventh day at the rate of one percent per month or any fraction thereof provided that the board, for good cause shown, may waive the interest or any fraction thereof. Failure to remit payment and interest within 30 days after the expiration of the time to appeal, may result in the suspension or revocation of the person's permit and cause the administrator to transfer five thousand dollars ($5,000) out of the LP-Gas Recovery Fund into the LP-Gas Research and Education Fund.

(1) Initial payment to the LP-Gas Recovery Fund by all permit holders, except those not required to file a cash surety shall be one hundred dollars ($100) payable as prescribed by this article. Class C, C-1, and C-2 permit holders shall only be required to file a surety in cash for the company's initial permit. Thereafter, payment made to the LP-Gas Recovery Fund by a permit holder shall be made upon application to the board for the initial permit. Payment shall be one hundred dollars ($100) and shall be refundable only if the application is denied or cancelled by the board.

(2) When the balance in the LP-Gas Recovery Fund is less than twenty-five thousand dollars ($25,000), each permit holder shall, on order of the board, make a non-refundable payment to the LP-Gas Recovery Fund. The payment will be determined by the board to return the LP-Gas Recovery Fund balance to forty thousand dollars ($40,000). Notwithstanding the foregoing, the payment shall not exceed one hundred dollars ($100) and shall not be levied more than once in any fiscal year.

(3) If the balance in the LP-Gas Recovery Fund exceeds fifty thousand dollars ($50,000) at the end of any fiscal year, the administrator shall transfer the amount in excess of fifty thousand dollars ($50,000) to the LP-Gas Research and Education Fund.

(4) If the balance in the LP-Gas Recovery Fund is insufficient to satisfy a duly authorized claim or portion of a claim, the board shall, when sufficient money has been deposited into the LP-Gas Recovery Fund, satisfy the unpaid claims or portions thereof.

(5) The sums received by the board pursuant to this section shall be deposited into the State Treasury and held in a special fund to be known as the 'Liquefied Petroleum Gas Recovery Fund', and shall be held by the board in trust for carrying out the purposes of the LP-Gas Recovery Fund. These funds may be invested by the State Treasurer in any investments which are legal under the laws of this state. From time to time, the administrator of the board may cause the withdrawal of cash to be made from the LP-Gas Recovery Fund to carry out the purposes of the LP-Gas Recovery Fund. Any interest or other income from investments of the LP-Gas Recovery Fund shall be credited to the LP-Gas Recovery Fund.

(d) An applicant for any of the 10 permits shall also file with the board evidence that he or she has in force the listed insurance coverage written on standard contract forms by an insurance company or companies qualified to do business in the State of Alabama based upon those activities listed below in which he or she is engaged. Proof of insurance shall only be accepted on a form provided by the board. Proof of liability insurance for all LP-gas cargo vehicles shall be filed on a MCS.90 form or on a form acceptable to the board.

For Class A, B and B-1 Permits; E Permits for performing calibration, and inspections of L.P.-gas meters on site:

For Permit C-1 LP-gas motor fuel carburetion only:

(e) In lieu of filing with the board evidence that the insurance coverage, as outlined above, is in force, the holder of or applicant for a permit described herein may file with the board a good and sufficient surety bond executed by an insurance company qualified to do business in this state, in an amount sufficient to satisfy the requirements of subsection (d). The bond shall be payable to the State of Alabama and shall be conditioned to guarantee the payment of all damages which proximately result from any act of negligence on the part of any person or his or her agents, servants, or employees while engaging in any of the activities specified in this section. In lieu of the surety bond, any person may execute and file a good and sufficient personal bond, in the amount and conditioned as above specified, which personal bond shall be secured by bonds or other obligations of the State of Alabama or the United States government of equal value. Evidence of required insurance issued by an insurance company shall be filed on a form provided by the board. When a surety bond, personal bond, or other obligations of equal value is used in lieu of evidence of the required insurance coverage, the surety bond, personal bond, or other obligation of equal value shall remain on deposit in the State Treasury in the Liquefied Petroleum Gas Board Personal Bond Fund until at least 365 days have lapsed and there are no claims against the bonds or obligations of equal value. The administrator may issue a refund of the bonds or obligations of equal value from the bond fund after proper application has been submitted. When the administrator has notice of a claim filed against the monies or other obligations of equal value held in lieu of an insurance contract, the administrator shall deliver to the court, interplead and deposit with the court the amount of money or obligations held, the administrator and the Liquefied Petroleum Gas Board shall be discharged from liability as to any claim, and the action shall continue as between the claimants of the monies or properties. If the matter is adjudicated before 365 days have lapsed, the court shall return any balance of any money or obligation to the Liquefied Petroleum Gas Board Personal Bond Fund.

(f) Any state, county, or any incorporated municipality or agency, or instrumentality thereof and any industrial user who makes application and possesses a Class C permit shall not be required to file with the board a surety in cash, provided that all of the servicing, repairing, adjusting, removing, and installing of LP-gas equipment, appliances, and systems is only being accomplished on their own LP-gas equipment, appliances and systems.

(g) There is hereby created in the State Treasury a fund to be designated as the 'Liquefied Petroleum Gas Board Personal Bond Fund' into which cash bonds or other obligations shall be deposited and from which the bonds shall be removed or refunded by the administrator at the appropriate time. The monies or other obligations in the bond fund shall not revert to the General Fund at the end of each state fiscal year, but shall be carried over into each subsequent state fiscal year and disbursed as provided in this section.

(h) Whenever a Class A, B or B-1 permit holder's company name has changed, all vehicles and equipment assigned to the company shall be relettered with the new company name as follows: by the annual renewal of the company permit or within 180 days of the name change, whichever is greater, provided, for good cause shown the board may extend the date by official action. Unmarked LP-gas delivery cargo vehicles or equipment placed in operation shall be lettered and placarded as required by the applicable section of the Code of Federal Regulations, Title 49, within 90 days of the date the vehicle was first placed into operation within this state. Vehicles and equipment not lettered with the company name within the described period shall be removed from service until the proper company name is affixed to the vehicle or equipment by the owner.

(i) Counties, municipalities, or other local entities are prohibited from requiring any further local testing or other requirements of LP-gas servicemen, certified by the LP-Gas Board, subject to the payment of any applicable local privilege, license, or business fees or charges.

(a) Fees for Permit A and Permit B. Every applicant for a Permit A or a Permit B, at the time of issuance, shall pay to the board a fee of three hundred dollars ($300) and annually thereafter pay to the board a fee of two hundred dollars ($200). Permits and fees shall be due on October 1 and delinquent after October 31 of each year.

Every person required to renew permits and pay fees who fails to do so by the delinquent date shall incur a penalty of ten dollars ($10) for each day he or she is delinquent in complying with this section, and the penalty shall be paid to the board before the issuance of the permit. Delinquency shall be determined by the United States Postal Service postmark when the date on the postmark falls on a later date than the delinquent date.

(b) Fees for Permit B-1. Every applicant at the time of issuance, shall pay to the board a fee of one hundred dollars ($100) and annually thereafter pay to the board a fee of one hundred dollars ($100). The permits and fees shall be due on October 1 and delinquent after October 31 of each year.

Every person who is required to renew permits and who fails to pay the fees by the delinquent date, shall have the permit automatically cancelled. The permit may be reinstated within six months if the holder can show reasonable cause for the delinquency and submits payment of the regular fee of one hundred dollars ($100) plus a penalty of fifty dollars ($50). The fees and penalties shall be paid to the board before the permit shall be reissued. Delinquency shall be determined by the United States Postal Service postmark when the date on the postmark falls on a later date than the delinquent date. After a permit has been cancelled for six months, the permit shall be applied for in the manner previously set by the board.

(c) Fees for Permit C. Every applicant for a Permit C shall at the time of issuance of the permit by the board, and annually thereafter, pay to the board a permit fee of fifty dollars ($50). The permit and fees shall be due January 1 and delinquent after January 31 of each year.

Every person required to renew a permit and who fails to do so by the delinquent date shall have the permit automatically cancelled. The permit may be reinstated within six months if the holder can show reasonable cause for delinquency and submits payment of the regular fee of fifty dollars ($50) and penalty of twenty-five dollars ($25). After six months the person may reapply in the manner previously set by the board.

(d) Fees for Permit C-1. Every applicant for a Permit C-1 shall, at the time of issuance of the permit by the board, and each year subsequently, pay to the board a permit fee of fifty dollars ($50). The permit and fees shall be due January 1 and delinquent after January 31 of each year.

Every person required to renew a permit, and who fails to do so by the delinquent date, shall have the permit automatically cancelled. The permit may be reinstated within six months if the holder can show reasonable cause for the delinquency and submits payment of the regular fifty dollar ($50) fee and penalty of twenty-five dollars ($25). After six months the person may reapply in the manner previously set by the board.

(e) Fees for Permit C-2. Every applicant for a Permit C-2 shall, at the time of issuance of the permit by the board, and each year subsequently, pay to the board a permit fee of one hundred dollars ($100). The permit and fees shall be due January 1 and delinquent after January 31 of each year.

Every person required to renew a permit, and who fails to do so by the delinquent date, shall have the permit automatically cancelled. The permit may be reinstated within six months if the holder can show reasonable cause for the delinquency and submits payment of the regular fee of one hundred dollars ($100) and a penalty of twenty-five dollars ($25). After six months, the person may reapply in the manner previously set by the board.

(f) Fees for Permit D. Every applicant for a Permit D shall at the time of issuance of the permit by the board, and annually thereafter, pay to the board a permit fee of two hundred fifty dollars ($250). The permit and fees shall be due January 1 and delinquent after January 31 of each year.

Every person required to renew a permit and who fails to do so by the delinquent date shall have the permit automatically cancelled. The permit may be reinstated within six months if the holder can show reasonable cause for delinquency and submits payment of the regular fee of two hundred fifty dollars ($250) and a penalty of fifty dollars ($50). After six months the person may reapply in the manner previously set by the board.

(g) Fees for Permit E. Every applicant for a Permit E shall at the time of issuance of the permit by the board, and annually thereafter, pay a permit fee of fifty dollars ($50). The permit fees shall be due on January 1 and delinquent after January 31 of each year.

Any person required to renew a permit and who fails to do so by the delinquent date shall have the permit automatically cancelled. The permit may be reinstated within six months if the holder can show reasonable cause for delinquency and submits a payment of the regular fee and a penalty of twenty-five dollars ($25). After six months the person may reapply in the manner previously set by the board.

(h) Fees for Permit F and F-1. Every applicant for a Permit F and F-1 shall at the time of issuance of the permit by the board, and annually thereafter, pay a permit fee of one hundred dollars ($100). The permit fees shall be due January 1 and delinquent after January 31 of each year. Filling stations that are owned by Class A or Class B-1 permit holders or operated by agents of Class A or Class B-1 permit holders are exempt from obtaining a Class F Permit.

Every person required to renew a permit and who fails to do so by the delinquent date shall have the permit automatically cancelled. The permit may be reinstated within six months if the holder can show reasonable cause for delinquency and submits payment of the regular fee of one hundred dollars ($100) and a penalty of fifty dollars ($50). After six months the person may reapply in the manner previously set by the board. Class F and F-1 permit holders shall keep records, report monthly sales of out-of-state motor fuel, and remit required fees by the twentieth of the months following the sales. Failure to make timely reports and pay required fees shall require interest and penalties to be assessed as described in Section 9-17-109.

(i) In the event that an end user located within the State of Alabama purchases or obtains liquefied petroleum gas on which the permit fees required by this article have not been paid, the end user shall be required to report to the board the cost of any liquefied petroleum gas purchased during each period from October 1 to September 30 each year and shall pay to the board any fees that are due.

All end users who purchase liquefied petroleum gas in unit quantities of 5,000 gallons or more shall furnish the board with written information concerning any purchases as may be requested by the board.

(j) Any supplier who sells liquefied petroleum gas to any marketer or any end user in the state or who delivers or causes to be delivered liquefied petroleum gas to any point in the state, shall report to the board all sales by the twentieth of the month following the month in which the sales are made. Each supplier shall add to each individual sales invoice an LP-gas fee not to exceed one-half of one cent per gallon. This fee shall be assessed only once per gallon. Each supplier shall remit to the board all money collected with the required monthly report.

The board may, from year to year, lower or raise the LP-gas fee imposed by this article.

At no time may the board raise the LP-gas fee imposed by this article above the rate of one-half of one cent per gallon.

(k) Any permit holder who sells or otherwise exchanges liquefied petroleum gas in the State of Alabama not otherwise covered under this article shall report to the board the number of gallons sold or exchanges by the twentieth of the month following the month such sales or exchanges were made. The permit holder shall submit to the board the LP-gas fee as specified by the board not to exceed one-half of one cent per gallon.

(l) Where a Class A or B-1 permit holder buys liquefied petroleum gas in the State of Alabama and pays the required fees on the liquefied petroleum gas and the Class A or B-1 permit holder sells the gas to end users outside the State of Alabama, the board may issue a credit or refund of the amount of the fee upon proper application to the board; provided, that the liquefied petroleum gas delivered to the out-of-state end user shall be transferred from the permit holder's storage facilities located within the State of Alabama. The application shall be submitted to the board no later than 30 days following the end of each fiscal quarter. Failure to make a timely application shall result in forfeiture of the fee.

(m) Class A, B, B-1, C, and D permit holders who are licensed by this board to install gas piping shall be exempt from the requirement of Section 40-12-84 if they only install gas piping.

(a) The board shall require that every applicant for a Permit A have located within the State of Alabama a minimum of 30,000 (water gallon capacity) gallons storage capacity for liquefied petroleum gases. Class B-1 permit holders shall be required to have a minimum of 18,000 (water gallon capacity) gallons storage capacity of liquefied petroleum gas. However, persons who are valid agents of a Class A permit holder who sell only welding gases that qualify as liquid petroleum gas under Section 9-17-100, shall be exempt from the minimum storage requirements under this section.

(b) If the 30,000 gallon (water capacity) storage consists of more than one container, then no storage container in any installation used to meet this requirement of the law shall be a size less than 6,000 gallon (water capacity) and the storage capacity required by this section of the law shall be within close proximity to the area serviced and used by the applicant to service his customers in the State of Alabama.

(c) The board shall require that such person shall submit plans for the proposed bulk storage facility to the office of the board and obtain approval by the administrator of such plans before construction is begun. All such facilities must be constructed according to rules and regulations of the board and the completed unit must have board approval before being used.

(d) If the holder of a Permit A or Permit B-1 submits plans to the board for a storage plant that shall remain his property even though the plant be at a customer's site or if the plant to be built is to be used as part of his own distribution system, then there will be no additional fees for approval and inspection of this facility; however, if this permit holder undertakes to install a bulk storage system of 5,000 gallons water capacity or more in single containers or in multi-container installation of an aggregate of 5,000 gallons water capacity, he must obtain approval for the location and for the plans from the administrator of the board before construction is begun. When plans for the bulk storage plant described above are submitted to the board for approval, a fee of $200.00 must be paid at the same time. This fee of $200.00 will cover examination of the plans and one site inspection. An additional fee of $50.00 for each inspection trip to the site, that is required, shall be paid to the board before final approval is given for the facility to be used. These fees may be changed by the board.

(a) Due to the inherent nature of liquefied petroleum gas which could cause a danger to the public or to a liquefied petroleum gas user, the board or the board administrator shall have the administrative authority to issue a written directive order requiring any person who violates any of the provisions of this article as amended from time to time or any rule or regulation promulgated by the board to discontinue the operation of any LP-gas business or LP-gas system immediately and prohibit such person from commencing operations until said violations have been corrected. When a written directive is issued by the board or the board administrator, it shall be immediately complied with by the recipient. When a directive order has been issued against a person, the recipient may, within five days, appeal to the circuit court of the county in which the said violations occurred. The circuit court shall within 10 days review such written directive and file a decision thereon and unless, by the authority of said court, the directive is revoked or modified, it shall remain in full force and be complied with within the time fixed in the said directive or by decision of the circuit court. Any person who feels himself aggrieved by the decision of the circuit court may, within the time provided by law after the issuance of the decision of the circuit court, file an appeal with the Court of Civil Appeals to review such decision or judgment. Such parties as shall file an appeal shall file a bond in the amount fixed by the court or by law and unless said directive is revoked or modified by the Court of Civil Appeals the directive shall be complied with in the time fixed by said directive or by decision of the Court of Civil Appeals.

(b) Any person engaging in the State of Alabama in any of the businesses defined in Section 9-17-105, without first having secured a permit as provided by Section 9-17-105 or who shall have been convicted of a second or subsequent offense of violating any of the provisions of this article or any rule, order or regulation promulgated pursuant hereto may be enjoined from engaging in such business in the State of Alabama for a period of not less than one nor more than five years, and the board, through the district attorneys or Attorney General, may institute such action in courts of competent jurisdiction of this state without the necessity of posting bond.

(c) The board is authorized to hold hearings, call witnesses, administer oaths, take testimony and obtain evidence in the conduct of its business. It is further authorized to impose monetary penalties and take such disciplinary actions as are authorized.

(a) Any person violating this article or any rule, order, or regulation promulgated pursuant to this article shall, on conviction thereof, be fined not more than $1,000 and may also be imprisoned in the county jail or sentenced to hard labor for the county for not more than six months. Every violation of this article or any rule, order, or regulation promulgated pursuant to this article shall constitute a separate offense.

(b) Every person subject to the fees imposed by Section 9-17-106 shall keep and preserve suitable records of all liquefied petroleum gas transactions subject to fees and any other books or accounts necessary to determine the amount of fees for which the person is liable under this article. Those records shall be retained for a period of not less than three years, and shall include the name, address of buyer, date of sale, amount of gallons purchased, cost per gallon, total amount of sale, and the amount of fees collected under Section 9-17-106. The board, the board administrator, or employees of the board may inspect, review, and copy or detain any original records, notes, or documents either written or electronically transcribed that are required to be kept by this article or that relate to the selling, storing, transporting, installing, servicing, testing, inspecting, repairing, adjusting, and calibrating of LP-gas meters, containers, tanks, or systems. Those records, notes, or documents shall be turned over to the board at a location designated by the board within 24 hours of the notice or within a reasonable time in excess of 24 hours set by the board or board administrator in cases of hardship.

(1) If any person fails to report and remit fees required in Section 9-17-106, the board shall issue a written order by registered or certified mail to the person to report and remit those fees. If the person fails or refuses to make the report and remittance within 30 days following the order, the board shall make the report based upon any information it reasonably obtains, shall assess the fees due thereon, and shall add a penalty of 25 percent of the fees due, as assessed by the board, and interest at the rate of one and one-half percent per month, or fraction thereof, from the date the fees were originally due. If a good and sufficient reason is shown for the delinquency, the board may waive or remit the 25 percent penalty or a portion thereof.

(2) Any person who reports but fails to pay the fees levied in Section 9-17-106 within the time required by this article shall pay, in addition to the fees, a penalty of 10 percent of the amount of the fees due, together with interest thereon at the rate of one and one-half percent per month or fraction thereof from the date at which the fees levied in this section became due and payable. The penalty and interest shall be assessed and collected as part of the fee. The board, for good cause shown, may waive or remit the 10 percent penalty or any portion thereof.

(3) As soon as practicable after the report is filed, the board shall examine and ascertain the proper amount of the fee as shown by the report. Any excess shall be refunded to the person who filed the report or credited on any deficiency previously due. If the amount paid is deficient, as shown by the report, the board shall immediately notify the persons of the deficiency and shall add a penalty of 10 percent of the amount due. If the deficiency is not paid within 30 days from the date of notice, interest shall accrue on the deficiency at the rate of one and one-half percent per month or fraction thereof, from the date the fee was due and shall be collected as part of the fee. The board, for good cause shown, may waive or remit the penalty or any portion thereof.

(4) When the board ascertains from examining and auditing the records of a person who collects the fee or from other information that the amount or amounts previously paid by the person for any period or periods is incorrect, the board shall compute the correct amount of fees due. If it appears that the amount paid is excessive, the excess shall be refunded or credited on any deficiency previously due by the person as required by this article. If it appears that the amount paid is deficient, the board shall notify the person, and shall demand payment. If payment is not paid within 15 days from date of demand, the board shall add a penalty of one and one-half percent per month from the date the fees, or any part thereof, becomes due. If the board finds a willful or fraudulent intent to evade the fees due, it may assess a penalty of 25 percent of the fees. The penalty shall be reviewable on appeal.

(c) When the board makes an assessment as provided in Section 9-17-106, the board shall notify the person by registered or certified mail of the amount of the assessment and shall notify the person to appear at a hearing of the board at the board office on a day named not less than 20 days from date of the notice to show cause why the assessment should not be final. The appearance may be by an agent or attorney. If no response is made on or before the date of the hearing, or if the response is not sufficient in the judgment of the board, the assessment shall be made final in the amount originally fixed or in any amount determined by the board to be correct. The board shall notify the person of the final assessment. A notice by the United States mail, addressed to the last known place of business, shall be sufficient.

Any person who has duly appeared and protested an assessment may appeal the final assessment of the board. A hearing on the appeal shall be held at a time and place designated by the board. No appeal shall lie in cases if the person has failed to appear and protest.

Any assessment made by the board shall be deemed correct, prima facie, on appeal.

(d) Liquefied petroleum gas containers may be filled only by the owner or upon the owner's authorization. The owner of a liquefied petroleum gas container is responsible for its suitability for continual service. Any person who fills or refills any LP-gas container or who, without authorization, turns any liquefied petroleum gas system on after it has been inspected, shut down, and condemned for safety violations, or operates an LP-gas motor vehicle, transport, or delivery unit that has been condemned for safety purposes or mechanical defects and red-tagged under authority of the Liquefied Petroleum Gas Board, or removes any red tag without authorization from the board administrator, or any person who authorizes an unqualified person to install or replace gas piping or install, connect, repair, or service any LP-gas equipment is guilty of a Class B misdemeanor as defined in Title 13A, and, upon conviction, shall be punished as provided by law.

(e) To ensure safety to the consumer, any person who authorizes any person other than his or her servicing LP-gas supplier to perform maintenance, or repair, install, adjust, or service any liquefied petroleum gas appliance, including but not limited to, ranges, heat producing devices, hot water heaters, containers, tanks, or any LP-gas system, shall notify the LP-gas dealer who regularly supplies the system with LP-gas that one or more of the aforementioned actions have been performed on his or her LP-gas system within five work days after the maintenance, installation, or work has been performed, or before the LP-gas system is next filled with LP-gas, whichever occurs first.

Waste of oil or gas as defined in this article is hereby prohibited.

(a) The Liquefied Petroleum Gas Research and Education Advisory Committee is created. The committee shall consist of five members as follows: Two members shall be industrial members of the LP-Gas Board appointed by the board chair; two members shall be either a dealer or a dealer's manager who is a member of the Alabama Propane Gas Association appointed by the association's board of directors; the fifth member shall be the Chair of the LP-Gas Board who shall serve as chair of the committee. The board administrator shall serve as the executive director of the committee.

(b) The term of office of the appointed committee members shall be one year. Members may serve successive terms. Appointed members of the committee shall take office on the date of the July board meeting each year.

(c) No member of the committee shall receive per diem or expense allowance.

(d) The committee may adopt all necessary rules relating to research and education of the public as well as industrial members and employees regarding the use of LP-gas.

(e) No single corporation or partnership comprised of separate entities within the state, whether or not separately licensed, may be represented on the committee by more than one representative at any one time.

(f) The Liquefied Petroleum Gas Research and Education Fund may be used by the committee and administered by the LP-Gas Board administrator to pay for activities relating to LP-gas, including the following direct and indirect costs:

(1) Research of all possible uses of LP-gas to enhance air quality.

(2) Research, development, and implementation of marketing, advertising, and informational programs relating to LP-gas to make LP-gas more understandable and readily available to consumers.

(3) Development of conservation and distribution plans to minimize the frequency and severity of disruptions in the supply of LP-gas.

(4) Development of a public information plan to provide advisory services relating to LP-gas to consumers.

(5) Development of voluntary participation plans to promote the use of LP-gas by federal, state, and local agencies.

(6) Development and administration of educational programs relating to LP-gas safety, research, and other related programs directed towards the consumer, industrial members, and employees.

(7) Other functions the committee determines are necessary to add to a program established by the committee for the purpose of promoting the use of LP-gas.

(8) The administrative costs incurred by the committee under this section.

(9) The making of grants, contracts, and appropriations as approved by the committee to fund comprehensive LP-gas research and education programs, seminars, and workshops and for providing rebates for the purpose of promoting the use of LP-gas.

(a) Whether or not the total production from a pool is limited or prorated, no rule, regulation, or order of the board shall be such in terms or effect that it will do the following:

(1) That it shall be necessary at any time for the producer from or the owner of, a tract of land in the pool, or an interest associated therewith or derived therefrom, in order that he or she may obtain the tract's just and equitable share or the just and equitable share of the interest of the production of such pool, as the share is set forth in this section, to drill and operate any well or wells on such tract in addition to the well or wells as can without waste produce the share.

(2) As to occasion net drainage from a tract or any interest associated therewith or derived therefrom, unless there is drilled and operated upon the tract a well or wells in addition to such well or wells thereon as can without waste produce the tract's just and equitable share or the just and equitable share of interest, as set forth in this section, of the production of the pool.

(b) For the prevention of waste, to protect and enforce the correlative rights of the owners and producers in a pool and to avoid the augmenting and accumulation of risks arising from the drilling of an excessive number of wells, the board shall, after a hearing, establish a drilling or production unit or units for each pool. A drilling or production unit, as contemplated in this subsection, means the maximum area which may be efficiently and economically drained by one well, and the unit shall constitute a developed unit as long as a well is located thereon, which is capable of producing oil or gas in paying quantities, or until the board shall determine and order otherwise after notice and hearing. It is provided, however, that the board shall have no authority to fix a drilling or production unit in excess of either 160 acres or one governmental quarter section plus 10 percent tolerance for any pool deemed by the board to be an oil reservoir or in excess of either 640 acres or one governmental section plus 10 percent tolerance, for any pool, deemed by the board to be a gas reservoir, the said 10 percent tolerance provided for so as to allow for irregular sections; provided, however, that the board may, at its discretion, after notice and hearing, establish drilling or production units for oil and gas in excess of the aforesaid limitations when it is affirmatively demonstrated that one well can efficiently and economically drain the proposed area and that a larger unit is justified because of technical, economic, environmental or safety considerations, or other reasons deemed valid by the board. To insure protection of coequal and correlative rights, the board may, after notice and hearing, establish units for oil and gas pools by a quantum not to exceed 50 percent greater than the aforesaid limitation provided such action is justified by sufficient technical data, indicating that the acreage or land in excess of the aforesaid maximum limitations is being drained or is in imminent danger of being drained and that the owners of the excess acreage or lands that the persons owning any interest or combination of interests in the excess acreage or lands cannot otherwise receive their just and equitable share of production from the pool being so drained; provided, however, in the event the excess lands or interests are integrated or pooled by order of the board, then the provisions of Section 9-17-13 shall be applicable to the owners of tracts or interests in the acreage or land in excess of the aforesaid maximum limitations so that the operator of the drilling or production unit in which the tracts or interests are included shall have the right to charge against the interest of each other owner in the production from the wells drilled by the designated operator the actual expenditures required for that purpose, not in excess of what are reasonable, including a reasonable charge for supervision; and the operator shall have the right to receive the first production from the wells drilled thereon which otherwise would be delivered or paid to the other parties jointly interested in the drilling of the well so that the amount due by each of them for his or her share of the expense of drilling, equipping, and operating the well may be paid to the operator of the well out of production, with the value of production calculated at the market price in the field at the time production is received by the operator or placed to his or her credit.

Notwithstanding the provisions of this section, all persons entitled to share in the production of oil or gas from a tract or interest or tracts or interests in land may voluntarily agree to the creation or establishment of a drilling or production unit, or may authorize one or more of the persons entitled to share in such production to create or establish a drilling or production unit, containing as much or more acreage or land than drilling units established by the board for the same pool, but not in excess of 160 acres or one governmental quarter section, plus 10 percent tolerance, in the case of oil and 640 acres or one governmental section, plus 10 percent tolerance, in the case of gas; subject to the aforementioned qualifications in this section and up to 50 percent greater, as provided hereinabove; a drilling unit so created or established shall, subject to the approval of the board, be valid and binding for all purposes even though the drilling or production unit contains more acreage or land than the board has included, or is authorized by this section to include in a drilling or production unit established by it for the same pool; provided, however, the spacing limitations set forth herein shall not apply to offshore wells and the size and configuration of drilling and production units of offshore wells shall be as is determined proper by the board.

(c) Each well permitted to be drilled upon any drilling or production unit to a pool in a field with respect to which the board has promulgated special rules shall be drilled at a location on the unit authorized by the special rules, and each well permitted to be drilled upon any drilling or production unit where the location thereof is not prescribed by special rules shall be drilled at a location on the unit authorized by rules of statewide application promulgated by the board, with the exceptions as may be reasonably necessary, where it is shown, after notice and hearing, and the board finds, that the unit is partly outside the pool, or, for some other reason, that a well located in accordance with applicable rules would be nonproductive, would not be at the optimum position in the drilling or production unit for the most efficient and economic drainage of the unit, or where topographical conditions are such as to make the drilling at an authorized location on the unit unduly burdensome or where an exception is necessary to prevent the confiscation of property. Whenever an exception is granted, the board shall take such action as will offset any advantage which the person securing the exception may have over other producers by reason of the drilling of the well as an exception, and so that drainage from developed units to the tract with respect to which the exception is granted will be prevented or minimized and the producer of the well drilled as an exception will be allowed to produce no more than his or her just and equitable share of the oil and gas in the pool, as such share is set forth in this section.

(d) Subject to the reasonable requirements for prevention of waste and to the reasonable adjustment because of structural position, a producer's just and equitable share of the oil and gas in the pool (also sometimes referred to as a tract's just and equitable share) is that part of the authorized production for the pool (whether it be the total which could be produced without any restriction on the amount of production or whether it be an amount less than that which the pool could produce if no restriction on amount were imposed) which is substantially in the proportion that the quantity of recoverable oil and gas in the developed area of his or her tract or interest or tracts or interests in the pool bear or bears to the recoverable oil and gas in the total developed area of the pool, insofar as these amounts can be practically ascertained; and to that end, the rules, regulations, permits, and orders of the board shall be such as will prevent or minimize reasonably avoidable net drainage from each developed unit (that is, drainage which is not equalized by counterdrainage), and will give to each producer the opportunity to use his or her just and equitable share of the reservoir energy. In determining each producer's just and equitable share of the authorized production for the pool, the board is authorized to give due consideration to the productivity of the well or wells located thereon, as determined by flow tests, bottom hole pressure tests, or any other practical method of testing wells and producing structures, and to consider such other factors and geological or engineering tests and data as may be determined by the supervisor to be pertinent or relevant to ascertaining each producer's just and equitable share of the production and reservoir energy of the field or pool.

For the purposes of this article, the following words shall have the following meanings:

(1) LP-GAS. Liquefied petroleum gas as defined in Section 9-17-100.

(2) USED MANUFACTURED HOME. A manufactured home which is not being sold or offered for sale as new and is used for residential purposes.

The following LP-gas room heaters may be installed in a residence that is a one- or two-family dwelling and that is not a manufactured home (mobile home) or a modular home as provided in this section:

(1) One listed wall-mounted LP-gas unvented room heater equipped with an oxygen depletion safety shut-off system may be installed in the bathroom of a residential one- or two-family dwelling provided that the input rating shall not exceed 6000 BTU per hour and combustion and ventilation air is provided in accordance with paragraph 6.1(b) of the National Fuel Gas Code, NFPA 54.

(2) One listed wall-mounted LP-gas unvented room heater equipped with an oxygen depletion safety shut-off system may be installed in the bedroom of a residential one- or two-family dwelling provided that the input rating shall not exceed 10,000 BTU per hour and combustion and ventilation air is provided as specified in paragraph 6.1(b) of the National Fuel Gas Code, NFPA 54.

The following LP-gas room heaters may be installed in a used manufactured home as follows:

LP-gas listed vented room heaters equipped with a 100 percent safety pilot and a vent spill switch or LP-gas listed unvented room heaters equipped with factory equipped oxygen depletion safety shut-off systems may be installed in a used stationary manufactured home (mobile home) but not in sleeping quarters or bathrooms in the manufactured home (mobile home) when the installation of the heater is not prohibited by the appliance manufacturer and when the input rating of the room heater does not exceed 20 BTU per hour per cubic foot of space and combustion and ventilation air is provided as specified in Section 5.3 of the National Fuel Gas Code, NFPA 54. All room heaters installed pursuant to this section shall be securely anchored to the wall or floor.

This article shall be enforced by the Liquefied Petroleum Gas Board.

Any reference to the National Fuel Gas Code, NFPA 54, shall include any future changes to the code when adopted by the Liquefied Petroleum Gas Board.

This article shall preempt any local law or any ordinance or authority of any local governing body to regulate the subject matter of this article and no local law or ordinance or authority of any local governing body shall supersede this article.

(a) When any mineral or other related interests deriving from two or more separately owned tracts of land are embraced within an established or a proposed drilling or production unit, or when there are separately owned interests in all or a part of an established or proposed drilling or production unit, or any combination of such, the persons owning the interests therein may validly agree to integrate or pool the interests and to develop the interests and associated lands as a drilling or production unit. Where, however, the owners have not agreed to so integrate or pool the interests, the board shall, for the prevention of waste or to avoid the drilling of unnecessary wells, require the persons owning such interests to do so and to develop their interests and the associated lands as a drilling or production unit.

(b) The board, in order to prevent waste and avoid the drilling of unnecessary wells, may permit or require the cycling of gas in any pool or portion thereof and is also authorized to permit or require the introduction of gas or other substance into an oil or gas reservoir for the purpose of repressuring the reservoir, maintaining pressure or carrying on enhanced recovery operations. The board may require pooling or integration of all the interests in or associated with the tracts, when reasonably necessary in connection with cycling operations.

(c) All orders requiring integration, pooling, cycling, repressuring, pressure maintenance or enhanced recovery operations shall be made after notice and hearing and shall be upon terms and conditions that are just and reasonable and which will afford to the person owning each such interest associated with each tract the opportunity to recover or receive his or her just and equitable share of the oil and gas in the pool without unnecessary expense and will prevent or minimize reasonably avoidable drainage from each developed unit which is not equalized by counterdrainage. The portion of the production allocated to each tract or interest included in an integrated or pooled unit formed by an integration or pooling order shall, when produced, be considered as if it had been produced from the tract or interest by a well drilled thereon; and any operations conducted within or with respect to the pooled or integrated unit pursuant to the pooling or integration order shall be deemed for all purposes to be the conduct of operations for the production of oil or gas or both from each tract or interest within the unit. All orders requiring pooling or integration shall, among other things, provide all of the following:

(1) That the actual and reasonable costs of developing and operating the pooled integrated unit (including a reasonable charge for supervision) and, if applicable, a risk compensation fee (as hereinafter provided) shall be charged to the separately owned tracts or interests in the unit in the same proportion that such tracts or interests share in production from the unit.

(2) That such costs and fee (if any) chargeable to a tract or interest shall be paid by the person or persons not entitled to share in production free of development and operating costs and who, in the absence of the pooling or integration order, would be responsible for the expense of developing and operating the tract or interest and that person's or persons' interest in the separately owned tract or interest shall be primarily responsible therefor.

(3) That, if any nonconsenting owner shall fail or refuse to pay the costs and/or fee (if any) chargeable to his or her tract or interest, the costs and/or fee shall be recoverable solely out of the production allocable to the tract or interest, provided, however, that this limitation shall not apply to a nonconsenting owner who has furnished the operator with a notarized statement agreeing to pay his or her proportionate share of the drilling and completion costs for a unit well as hereinafter provided.

(4) That, when the full amount of any charge made against a separately owned tract or interest is not paid when due by the person or persons primarily responsible therefor, as provided above, then 13/16ths (or if said tract or interest is leased, the working interest fraction or percent if it is greater) of the oil and gas production allocated to the separately owned tract or interest may be appropriated by the operator and marketed and sold for the payment of the charge, but that a 3/16ths part (or the actual landowner royalty if it is less) of the unit production allocated to each separately owned tract or interest shall in all events be regarded as royalty and shall, if there be no reasonable question as to good and merchantable title, be distributed to and among, or the proceeds thereof paid to, the person or persons owning royalty or unleased mineral interests (as the case may be) in the tract or interest free and clear of the development and operating costs and of any risk compensation fee and free and clear of any lien for the payment of the costs and fee.

(5) That any person owning any overriding royalty, oil and gas payment, royalty in excess of 3/16ths of production, or other interests, who is not primarily responsible for payment of the development and operating costs or risk compensation fee (if any), shall, to the extent of any payment or deduction therefor from his or her share, be subrogated to all the rights of the operator with respect to the interest or interests primarily responsible for the payment.

Additionally, if the operator, or the operator together with the consenting owners, shall own a majority in interest of the drilling and operating rights in the integrated or pooled unit, and the operator has made a good faith effort to (i) negotiate with each nonconsenting owner to have the owner's interest voluntarily integrated or pooled into the unit, (ii) notify each nonconsenting owner of record of the names of all owners of drilling rights who have agreed to integrate or pool any interests in the unit, (iii) ascertain the address of each nonconsenting owner, (iv) give each nonconsenting owner written notice of the proposed operation, specifying the work to be performed, the proposed location, proposed depth, objective formation and the estimated cost of the proposed operation, and (v) to offer each nonconsenting owner the opportunity to lease or farm out on reasonable terms or participate in the cost and risk of developing and operating the unit well involved on reasonable terms, then the pooling or integration order shall, if the operator so requests, also provide that, if any nonconsenting owner (a) does not pay his or her proportionate share of the drilling and completion costs for any unit well within 30 days after commencement of actual drilling operations, or prior to reaching total depth, whichever is earlier, or at such other time as may be contracted between the parties, or, alternatively, (b) does not, on or before commencement of actual drilling operations, provide the operator with a notarized statement agreeing to pay the costs, then there shall be charged to the tract or interest of the nonconsenting owner a risk compensation fee equal to 150 percent of the tract's or interest's share of the actual and reasonable costs of drilling, reworking (prior to initial commercial production), testing, plugging back, deepening (but not below that depth specified in the permit for the well), and completing (through the wellhead) said well; provided, however, that no risk compensation fee shall be chargeable against the tract or interest of any nonconsenting owner who owned of record a tract or interest in the unit prior to the time notice was given unless, at the pooling or integration hearing, it is shown, by a United States mail certified mail return receipt card or by other evidence deemed sufficient by the board, that the nonconsenting owner was given actual notice of the pooling or integration hearing and unless it is also shown that the notice given to the owner specifically stated that the operator was requesting that the board impose a risk compensation fee in accordance with the provisions of this section. In the event that a nonconsenting owner who has provided the operator with a notarized statement agreeing to pay his or her proportionate share of the drilling and completion costs for a unit well does not fully pay the costs within 30 days after commencement of actual drilling operations or prior to reaching total depth, whichever is earlier, or on or before such other time as may be contracted between the parties, then any unpaid balance of the costs shall bear interest at the rate of one and one-half percent per month, and the nonconsenting owner shall be personally liable for the unpaid balance together with interest thereon and also for any attorney's fees, court costs, or other expenses incurred by the operator in attempting to collect the unpaid balance and interest thereon; and, additionally, the operator shall have the right, if the well is a producer, to appropriate, market, and sell the nonconsenting owner's share of production for the payment of the amounts due by that owner. The value of any production appropriated by the operator under the authority of any integration or pooling order shall be calculated at the market price in the field (after deduction for taxes and for cleansing, transportation, compression, and processing costs) at the time such production is received by the operator or placed to his or her credit. Unless the pooling or integration order (or an amendment thereto) shall specify otherwise or unless the affected parties shall agree otherwise, production from any pooled or integrated unit formed by a pooling or integration order shall be allocated to each separately owned tract or interest in the unit in the proportion that the acreage of each tract or interest bears to the total acreage of the unit; and under the circumstances allocation of production on this basis shall be considered as a just and reasonable allocation which will afford to each person owning each tract or interest within the unit the opportunity to recover or receive his or her just and equitable share of the oil and gas produced from the unit. Nothing herein or in any order issued pursuant hereto shall be construed to subject any nonconsenting owner who is subject to a risk compensation fee, as hereinabove provided, to any personal liability for any damages caused by or resulting from any negligent act or other tort committed by the operator or by any consenting owner in the course of developing and operating a pooled or integrated unit; nor shall anything herein or in any order issued pursuant hereto prevent the operator and any other owner or owners in the unit from entering into any agreement that contains provisions respecting the pooling, integration, or development of their tracts or interests in the pooled or integrated unit that differ from the above provisions or from the provisions contained in any pooling or integration order. As used herein, the term 'operator' shall mean the person designated by the board to be in charge of developing and operating a drilling or production unit; the term 'nonconsenting owner' shall mean an owner who owns a tract or interest in a drilling or production unit and who has not, on or before the date a pooling or integration order is entered with respect to such unit, reached an agreement with the operator relative to the terms and conditions which will govern the manner in which his or her said tract or interest shall be developed and operated; the term 'consenting owner' shall mean an owner who has so reached such an agreement with the operator; the term 'owner' shall mean a person who, if a pooling or integration order had not been entered, would be an owner as that term is defined elsewhere in this article; the terms 'costs of developing' and 'development costs' shall include, among other things, the costs of drilling, equipping, reworking, testing, plugging back, deepening, and completing the initial unit well and any subsequent unit well but shall not include any costs incurred in connection with the acquisition of any oil and gas leases covering tracts or interests in the unit; and the term 'actual and reasonable costs' means actual expenditures not in excess of what are reasonable.

Subsection (c) shall apply only to unitization of interests within a drilling unit and shall not apply to fieldwide or poolwide units, which are authorized and governed under the provisions of Article 3 of this chapter.

(d) Should the owners of separate tracts or interests embraced within a drilling or production unit fail to agree upon the integration or pooling of the tracts or interests associated with the tracts and the drilling of a well on that unit, and should it be established that the board is without authority to require integration or pooling as provided for in this section, then subject to all other applicable provisions of this article, the owner of the interest or interests associated with each tract embraced within the drilling or production unit may drill on his or her tract; but the allowable production from that tract or interest shall be such proportion of the allowable production for the full drilling or production unit as the area of the separately owned tract associated with the separately owned interest bears to the full drilling or production unit.

(e) Agreements made in the interest of conservation of oil or gas, or both, or for the prevention of waste, between and among owners or operators, or both, owning separate interests in the same oil or gas pool, or in any area that appears from geological or other data to be underlain by a common accumulation of oil or gas, or both, and agreements between and among the owners or operators, or both, and royalty owners therein of the pool or area or any part thereof as a unit for establishing and carrying out a plan for the cooperative development and operation thereof, when the agreements are approved by the board, are hereby authorized and shall not be held or construed to violate any of the statutes of this state relating to trusts, monopolies, or contracts and combinations in restraint of trade.

The Legislature of the State of Alabama finds and declares that the protection of Alabama's environment is vital to the economy of this state; that coalbed methane gas wells are an important source of natural gas for use in industry and by consumers thereof in Alabama and are becoming increasingly common in Alabama as the technology for such wells advances; that the broadest possible promotion of public and private interests requires that coalbed methane gas wells be properly plugged when abandoned; that delays therein may affect the environment or public health, safety and welfare; that adequate financial resources be readily available to provide for the expeditious plugging of such wells and to provide a means for doing so without delay; that the Legislature has heretofore authorized the State Oil and Gas Board of Alabama to require that operators of such wells provide evidence of financial responsibility to cover the costs of plugging such wells; that performance bonds so required and obtained for such purpose may not be adequate in amount or even obtainable in the present insurance market; and that the health, safety, and welfare of the citizens of the State of Alabama will be enhanced and protected by the provisions of this article.

This article may be cited as the 'Alabama Coalbed Methane Gas Well Plugging Fund Act.'

For the purposes of this article, unless otherwise indicated, the following terms shall have the meanings respectively ascribed to them by this section:

(1) BOARD. The State Oil and Gas Board created in Section 9-17-3.

(2) FUND. The Alabama Coalbed Methane Gas Well Plugging Fund established in Section 9-17-133.

(3) COALBED METHANE GAS WELL. A well capable of producing occluded natural gas from a coalbed or coalbeds.

(4) PLUGGING FEE. The fee authorized by Section 9-17-137.

(5) OPERATOR. Any person who notifies the supervisor pursuant to Section 9-17-24 of such person's desire or proposal to drill a coalbed methane gas well.

(6) PERSON. Any natural person, firm, corporation, association, partnership, joint venture, receiver, trustee, guardian, executor, administrator, fiduciary, representative of any kind or any other group acting as a unit.

(7) SUPERVISOR. The state oil and gas supervisor.

There is hereby created the Alabama Coalbed Methane Gas Well Plugging Fund to be held by the State Treasurer and administered by the supervisor. The fund shall be used for carrying out the purposes of this article. To the fund shall be credited all the plugging fee revenues levied, collected and credited thereto pursuant to Section 9-17-137. Charges against and disbursements from the fund shall be made only in accordance with the provisions of this article.

Whenever, in the determination of the board, after reasonable notice to the operator of a coalbed methane gas well and a hearing held by the board and pursuant to such notice:

(1) The failure of the operator of a coalbed methane gas well to plug such well may pose a threat to the environment or to the public health, safety or welfare,

(2) The operator of said well shall have failed or refused to plug such coalbed methane gas well within a period deemed reasonable by the board, and

(3) The bond or other security filed by such operator under Section 9-17-6(c)(5) is or is expected to be inadequate to provide for the payment of the costs of plugging said well, the board shall undertake to provide for the proper plugging of said well through the use of moneys in the fund, provided that moneys adequate for such purpose, taking into account the aforesaid bond or other surety, shall then be on deposit in the fund.

Upon making the determination described in Section 9-17-134, the board shall first collect the proceeds of the bond or bonds or the blanket bond of the operator filed as security under Section 9-17-6(c)(5), and shall forthwith apply the proceeds of such bond or bonds to the expense of causing such well or wells with respect to which such determination shall have been made to be plugged, which action the board is hereby authorized to take either directly or through contracts therefor entered into by the board with private persons or with other governmental agencies. Should the board determine that the proceeds of such bond or bonds are in fact insufficient to cover the entire expense of causing such well or wells to be plugged, the supervisor shall be authorized to execute and verify itemized vouchers to be submitted to the state Comptroller for the withdrawal from the fund of amounts equal to such expenses as may be incurred by the board in connection therewith in excess of bond coverage. Upon the presentation of such vouchers, there is hereby appropriated from moneys in the fund such amount as shall be necessary for the payment of such expenses, and the state Comptroller is authorized to issue appropriate warrants on the State Treasurer for reimbursement to the board of such expenses incurred by it in taking the aforesaid action to plug coalbed methane gas wells or for payment of such private persons or governmental agencies as shall have been engaged by the board to take such action pursuant to the provisions hereof.

Whenever costs of plugging a coalbed methane gas well shall have been incurred by the board pursuant to this article and the board shall have authorized the expenditure of moneys from the fund pursuant to Section 9-17-135 for the purpose of plugging a coalbed methane gas well, the operator thereof and each and every owner of a working interest in the well bore of such well shall be jointly and severally liable to the state for repayment of the amount of such moneys, and the board is authorized to institute appropriate civil actions in the courts in the name of the state to recover such amounts. Any amounts so recovered shall be paid into the fund. Further, nothing in this article shall be construed to relieve any operator or owner of a working interest in the well bore of any coalbed methane gas well of any liability to any third party for damages incurred because of failure to plug any coalbed methane gas well.

(a) In addition to the requirements and fees provided for in Section 9-17-24(a), any person desiring, after April 25, 1990, to drill any coalbed methane gas well in this state shall pay to the state a plugging fee of $150.00 respecting each such well desired to be drilled, such plugging fees to be deposited with the State Treasurer in the fund; provided, however, that no plugging fees shall be required to be paid during any time when the unobligated balance of the fund shall exceed the sum of $1,000,000. Any provisions of law to the contrary notwithstanding, no permit for the drilling of any coalbed methane gas well shall be issued by the board until the fee provided for in this section shall be paid, if due.

(b) The moneys in the fund shall be invested by the State Treasurer of Alabama in the same manner as state funds generally; provided, however, that only 50 percent of all interest and earnings accruing thereon shall be credited to the State General Fund and the remainder shall be credited to the fund; said moneys and the interest and earnings credited to the fund shall be used only for the purposes set forth in this article and for no other purposes, and no portion thereof shall be available for loan to any agency or branch of state government, it being the intent of the Legislature that the fund shall remain intact and inviolate for the purposes set out in this article or until terminated as provided herein.

(c) Moneys in the fund shall be paid out only by warrant of the state Comptroller upon the State Treasurer, upon itemized vouchers executed by the supervisor as provided in Section 9-17-135, and in the event of termination of the fund as provided herein.

Should the board determine that all coalbed methane gas wells in the State of Alabama have been plugged and abandoned, or should the board determine, after notice and hearing, that the fund is no longer necessary in order to carry out the purposes of this article, then the supervisor shall so certify this determination to the state Comptroller and the State Treasurer and all moneys in the fund shall, promptly following the filing with the state Comptroller and the State Treasurer of such certification, be disbursed and are hereby appropriated to all counties in the State of Alabama where coalbed methane gas wells shall have been permitted pursuant to the provisions of this chapter, to be divided among such counties based on the number of coalbed methane gas wells permitted in each such county, for deposit into the general funds of such counties, and to be used for those purposes for which said general funds were established.

Nothing in this article shall establish or create any liability or responsibility on the part of the board, the supervisor or the State of Alabama to pay any costs incurred or damages incurred or damages suffered by any person or to pay any third party claims from any source arising from the failure of any coalbed methane gas well to be properly plugged, nor shall moneys in the fund be used to make any payments of such costs or damages.

(a) Whenever the board limits the total amount of oil or gas which may be produced in this state, the limit so fixed shall not be less than the aggregate of the allowables fixed for each separate pool in this state for the prevention of waste in accordance with the foregoing definition of waste, plus the production from unrestricted pools, and it shall allocate or distribute the allowable so fixed among the separate pools. Such allocation or distribution among the pools of the state shall be made on a reasonable basis, giving to each pool with small wells of settled production an allowable production which will not accelerate or encourage a general premature abandonment of the wells in the pool.

(b) Whenever the board limits the total amount of oil or gas which may be produced in any pool in this state to an amount less than that amount which the pool could produce if no restriction were imposed (which limitation may be imposed either incidentally to or without a limitation of the total amount of oil or gas which may be produced in the state), the board shall prorate or distribute the allowable production among the producers in the pool on a reasonable basis so as to prevent or minimize reasonably avoidable drainage from each developed unit which is not equalized by counterdrainage and so that each producer will have the opportunity to produce or receive his just and equitable share, as set forth in this article, subject to the reasonable requirements for the prevention of waste.

(c) After the effective date of any rule, regulation or order of the board fixing the allowable production of oil or gas or both for any pool, no person shall produce from any well, lease or property more than the allowable production which is applicable, nor shall such amount be produced in a different manner than that which may be authorized.

Any interested person aggrieved by any rule, regulation or order made or promulgated by the board under this article and who may be dissatisfied therewith shall, within 30 days from the date said order, rule or regulation was promulgated, have the right, regardless of the amount involved, to institute a civil action by filing a complaint in the circuit court of the county in which all or part of the aggrieved person's property affected by any such rule, regulation or order is situated to test the validity of said rule, regulation or order promulgated by the board. Such civil action shall be advanced for trial and be determined as expeditiously as feasible, and no postponement or continuance thereof shall be granted except for reasons deemed imperative by the court. In such trials the validity of any rule, regulation or order made or promulgated under this article shall be deemed prima facie valid, and the court shall be limited in its consideration to a review of the record of the proceedings before the board, and no new or additional evidence shall be received.

The reviewing court shall limit its consideration to the following:

(1) Whether the rule, regulation or order is constitutional;

(2) Whether the rule, regulation or order was without or in excess of jurisdiction;

(3) Whether the rule, regulation or order was procured by fraud;

(4) Whether the rule, regulation or order is reasonable; and

(5) Whether the rule, regulation or order is unsupported by the evidence.

Unless the context otherwise requires, the words and terms defined in this section shall have the following meanings when found in this article:

(1) UNDERGROUND STORAGE. Storage in an underground reservoir.

(2) GAS. All natural gas, casinghead gas, and occluded natural gas found in coal beds, and all other hydrocarbons not defined as oil in Section 9-17-1(3), except and not including liquid petroleum gas.

(3) UNDERGROUND RESERVOIR. Any subsurface sand, stratum, formation, aquifer, or cavity, cavern or void (whether natural or artificially created), suitable for or capable of being made suitable for the injection and storage of gas therein and the withdrawal of gas therefrom.

(4) STORAGE FACILITY. Any underground reservoir used or to be used for the underground storage of gas and all surface and subsurface rights and appurtenances necessary or useful in the operation of the facility for the underground storage of gas, including any necessary or reasonable buffer zone as designated by the board for the purpose of insuring the safe operation of the storage of gas and to protect the storage facility against pollution, invasion, and escape or migration of gas therefrom, together with any and all subsequent extensions thereof.

(5) STORAGE OPERATOR. Any company, person, corporation, partnership, limited partnership, association of persons, municipality, association of municipalities, public utility, gas district, or other entity, authorized by the State Oil and Gas Board pursuant to Section 9-17-152 to operate any storage facility as defined in this section.

(6) STATE OIL AND GAS BOARD or BOARD. The State Oil and Gas Board of Alabama; and

(7) CODE. The Code of Alabama 1975, as amended.

(a) The underground storage of gas which promotes the conservation thereof, which permits the accumulation of large quantities of gas in reserve for orderly withdrawal in periods of peak demand, making gas more readily available to commercial, industrial or residential consumers, or which provides more uniform withdrawal from various gas or oil fields, is in the public interest and welfare of this state and is for a public purpose.

(b) The State Oil and Gas Board shall have jurisdiction and authority over all persons and property necessary to administer and enforce effectively the provisions of this article concerning the underground storage of gas. In exercising such jurisdiction and authority, the board shall have and may exercise all powers and authorities granted to it pursuant to Article 1 of this chapter with respect to holding hearings and promulgating and enforcing rules, regulations, and orders.

(a) The use of an underground reservoir as a storage facility for gas is hereby authorized, provided that the board shall first enter an order, after notice and hearing pursuant to the provisions of Sections 9-17-3 to 9-17-8, inclusive, approving such proposed underground storage of gas and designating the horizontal and vertical boundaries of the storage facility, such boundaries to include within them any necessary or reasonable buffer zone for the purpose of insuring the safe operation of the storage facility and to protect the storage facility against pollution, invasion, and escape or migration of gas therefrom, upon finding as follows:

(1) That the storage facility is suitable and feasible for the injection, storage and withdrawal of gas and has a greater value or utility for the storage of gas than for the production of any remaining volumes of presently commercially recoverable hydrocarbons and its use for such purpose is in the public interest;

(2) That the underground reservoir to be used for underground storage of gas does not contain proven commercially producible accumulations of oil or gas or both; or, in the alternative, if the underground reservoir to be used for underground storage of gas includes any pool (or portion thereof) that contains proven commercially producible accumulations of oil or gas or both, that a majority in interest, as calculated on a surface acre basis, of all owners (as owner is defined in Section 9-17-1(7), to be 'The person who has the right to drill into and to produce from any pool and to appropriate the production either for himself or for himself and another or others.') in the pool has or have consented to such use in writing;

(3) That the use of the storage facility for the underground storage of gas will not contaminate other formations containing fresh water or containing oil, gas or other commercial mineral deposits; and

(4) That the proposed storage will not unduly endanger lives or property.

(b) Upon the board's issuing an order of approval as set forth above, said order, or a certified copy thereof, shall be filed for record in the probate court of the county or counties in which the storage facility is to be located.

(c) Prior to commencing injection of gas, the storage operator shall file for record in the probate court of the county or counties in which the storage facility is located, and with the board, a certificate, entitled a certificate of effectiveness, which shall contain a statement that the storage operator has acquired by eminent domain or otherwise all necessary ownership rights with respect to the storage facility, and the date upon which the storage facility shall be effective.

(d) If any pool (or portion thereof) for any previously established field(s) or producing unit(s) is contained within the boundaries of the storage facility, the board's order of approval for such storage facility shall provide that such field(s) or unit(s) shall be dissolved as to such pool(s) as of the effective date of the storage facility (as set forth in the certificate of effectiveness).

(e) If an underground reservoir that contains commercially recoverable oil and/or gas has been approved, as hereinabove provided, for use as a storage facility, the board shall, after notice and hearing pursuant to the provisions of Sections 9-17-3 through 9-17-8, inclusive, determine the amount of remaining commercially recoverable oil and/or gas in said reservoir and shall set forth its determination in an order supplemental to its order of approval. As a part of the board's determination contained in such supplemental order, the board shall determine a period of time which encompasses the remaining natural production capability of the underground reservoir to produce such commercially recoverable gas and then determine an apportionment of the total volume of such gas withdrawn from the storage facility between (i) injected gas withdrawn from storage and (ii) production of said remaining commercially recoverable gas in said reservoir. All volumes of such gas deemed production under clause (ii) herein shall be subject to the levy of applicable severance taxes under Article I, Chapter 20 of Title 40.

(f) Nothing herein shall be construed to limit or restrict the right of anyone to create, for the purpose of later use as an underground reservoir for underground storage of gas, a cavity in a salt dome even though the board has not issued an order of approval under subsection (a) above for the storage of gas in said cavity, provided that actual injection of gas in said cavity shall not be commenced until such an order of approval shall have been issued by the board and provided further that such cavity and the operations for the creation thereof do not violate the provisions of any rule, regulation, or order issued by the board under Section 9-17-153(a) for the protection of any previously approved storage facility.

(a) The board shall issue such orders, rules and regulations as may be necessary for the purpose of protecting any such storage facility against pollution, invasion, and the escape or migration of gas therefrom, including such necessary orders, rules and regulations as may pertain to the drilling into or through such storage facility.

(b) Any and all hydrocarbons which are within the storage facility on May 21, 1992 and at all times thereafter and which have been acquired by the storage operator by condemnation or otherwise and any and all gas injected into said facility by the storage operator shall be deemed the property of the storage operator, his heirs, successors and assigns, and in no event shall such hydrocarbons or injected gas be subject to the right of the owner of the surface of the lands or of any mineral interest therein under which such storage facility shall lie or be adjacent to or of any person other than the storage operator, his heirs, successors and assigns, to produce, take, reduce to possession, waste or otherwise interfere with or exercise any control thereover.

(a) Any storage operator is hereby empowered, after obtaining approval of the board as herein required, to exercise the right of eminent domain in the manner provided by law, to acquire all surface and subsurface rights and interests necessary or useful for the purpose of operating the storage facility (including easements and rights-of-way across lands for transporting, by pipeline or otherwise, gas to and from said facility) and to exercise eminent domain rights to acquire any hydrocarbons therein, pursuant to the provisions hereof. Such power shall be exercised under the procedure provided by Chapter 1A, Title 18.

(b) No rights or interests in storage facilities acquired for the injection, storage and withdrawal of gas by a party who has eminent domain rights under this act and who has obtained an order from the board under the provisions of Section 9-17-152, shall be subject to the exercise of any eminent domain rights; and no portion of any salt dome (including any cavity therein) and no portion of any lands within a radial distance of 1500 feet from the outer wall of a salt dome may be acquired, by exercise of the eminent domain rights granted hereunder, for use as an underground reservoir for storage of gas unless the storage operator has first obtained the consent, in writing, to such use from: (a) at least a 75% in interest (as calculated on a surface acre basis) of the owners of the salt in that portion of the salt dome that is to be acquired or that is within a radial distance of 1500 feet of the proposed underground reservoir, and (b) if said portion of the salt dome is subject to a salt lease, at least 75% in interest (as calculated on a surface acre basis) of the owners of the lessee's rights under said lease.

The right of eminent domain granted by Section 9-17-154 shall be without prejudice to the right of the owner of said land or of other rights or interests therein to drill or bore through the storage facility so appropriated in such manner as shall comply with orders, rules and regulations of the board issued for the purpose of protecting the storage facility against pollution or invasion and against the escape or migration of gas therefrom, and shall be without prejudice to the rights of the owners of said lands or other rights or interests therein as to all other uses not acquired for the storage facility.

No storage operator shall be subject to any privilege or other tax on production, severance, extraction or withdrawal of gas that has been injected into a storage facility when such gas is extracted or withdrawn from such storage facility, and, specifically, no such gas shall be subject to taxation under the provisions of Sections 9-17-25 through 9-17-31 or under the provisions of Article 1, Chapter 20 of Title 40. All hydrocarbons extracted or withdrawn from the underground reservoir which were not injected, including any oil, condensate or natural gas liquids, shall be subject to applicable severance taxes under Sections 9-17-25 through 9-17-31 and under Article I, Chapter 20 of Title 40.

Nothing in this article shall apply to the conduct of gas storage operations as a part of or in conjunction with any secondary or tertiary recovery methods being utilized with respect to a unit pool in a unit area heretofore or hereafter established by the board pursuant to Article 3 of this chapter; and the board shall not allow the creation or operation of a storage facility pursuant to this article within any underground reservoir where such secondary or tertiary recovery methods are being utilized.

(a) No temporary restraining order or injunction of any kind shall be granted against the board or the members thereof or against the Attorney General or any district attorney or against any agent, employee or representative of the board restraining the board or any of its members or any of its agents, employees or representatives or the Attorney General or any district attorney, from enforcing any of the provisions of this article or any rule, regulation or order made under this article, except after due notice to the members of the board and to all other defendants and after a hearing at which it shall be clearly shown to the court that the act done or threatened is without sanction of law and, if enforced against the complaining party, will cause an irreparable injury. The judgment or order of the court granting temporary injunctive relief shall state the nature and extent of the probable invalidity of any provision of this article or of any rule, regulation or order made under this article involved in such suit and shall also contain a clear statement of the probable damage relied upon by the court as justifying the temporary relief.

(b) No temporary injunctive relief of any kind, including a temporary restraining order, against the board or the members thereof or its agents, employees or representatives or the Attorney General or any district attorney shall become effective until the plaintiff shall execute a bond to the state with sufficient surety in an amount to be fixed by the court, reasonably sufficient to indemnify all persons who may suffer damage by reason of the violation pendente lite by the complaining party of the provisions of this article or of any rule, regulation or order complained of. Such bond shall be approved by the judge of the court in which the civil action is pending, and the court may, from time to time on motion and with notice to the parties, increase or decrease the amount of the bond and may require new or additional sureties as the facts may warrant. Such bond shall be for the use and benefit of all persons who may suffer damage by reason of the violation pendente lite of this article or of any provision, rule, regulation or order complained of in such civil action, and any person so suffering damage may bring a civil action on such bond before the expiration of six months after any provision of this article or of any rule, regulation or order complained of shall be finally held to be valid in whole or in part or such civil action against the board or the members thereof shall be finally disposed of.

Whenever it shall appear that any person is violating or threatening to violate any provision of this article or any rule, regulation or order made under this article and unless the board without litigation can effectively prevent further violation or threat of violation, then the board, through the Attorney General, who may call to his assistance the district attorney of the circuit in which civil action is instituted, shall bring in the name of the State of Alabama against such person in the circuit court in the county of the residence of the defendant or, if there is more than one defendant, in the circuit court of the county of the residence of any of them or in the circuit court of the county in which such violation is alleged to have occurred, a civil action to restrain such person from continuing such violation or from carrying out the threat of violation. In such civil action the board, in the name of the State of Alabama, may obtain such injunctions, prohibitory and mandatory, including temporary restraining orders and preliminary injunctions, as the facts may warrant, including, when appropriate, an injunction restraining any person from moving or disposing of illegal oil, illegal gas or illegal product, and any or all such commodities may be ordered to be impounded or placed under the control of an agent appointed by the court if, in the judgment of the court, such action is advisable.

In any civil action where the board, in the name of the state, seeks enforcement of this article or of any rule, regulation or order issued under this article, as provided in Section 9-17-17 or in any civil action where an interested party seeks to test the validity of or enjoin the enforcement of this article or any rule, regulation or order issued under this article as provided in Section 9-17-16, either party shall have the right of an immediate appeal to the Supreme Court from any judgment or order therein granting or refusing an injunction, whether temporary restraining order, preliminary injunction or permanent injunction, or other character of injunctive relief, or from any order granting or overruling a motion to dissolve such injunction. The manner of presenting any appeal as provided for in this section shall be governed by the provisions of the rules and laws of the State of Alabama regulating appeals in injunction proceedings.

(a) Nothing contained or authorized in this article and no civil action by or against the board and no penalties imposed or claimed against any person for violating any provision of this article or any rule, regulation or order issued under this article and no forfeiture shall impair or abridge or delay any cause of action for damages which any person may have or assert against any person violating any provision of this article or any rule, regulation or order issued under this article. Any person so damaged by the violation may institute a civil action for and recover such damages as he may show that he is entitled to receive.

(b) In the event the board should fail to bring a civil action to enjoin any actual or threatened violation of any provision of this article or of any rule, regulation or order made under this article, then any person or party in interest adversely affected by such violation or threat thereof and who has requested the board to institute a civil action in the name of the state may, to prevent any or further violation, bring a civil action for that purpose in any court in which the board could have brought a civil action. If, in such civil action, the court holds that injunctive relief should be granted, then the state shall be made a party and shall be substituted by order of the court for the person who brought the action, and the injunction shall be issued as if the state had at all times been the complaining party.

The prevention of waste of oil and gas and the protection of correlative rights are declared to be in the public interest. The purpose of this article is to prevent such waste and to protect correlative rights.

(a) The sale, purchase or acquisition or the transportation, refining, processing or handling in any other way of illegal oil, illegal gas or illegal product is hereby prohibited.

(b) Unless and until the board provides for certificates of clearance or tenders or some other method so that any person may have an opportunity to determine whether any contemplated transaction of sale, purchase or acquisition or of transportation, refining, processing or handling in any other way involves illegal oil, illegal gas or illegal product, no penalty shall be imposed for the sale, purchase or acquisition or the transportation, refining, processing or handling in any other way of illegal oil, illegal gas or illegal product, except under circumstances stated in this section.

Penalties shall be imposed by the board for each transaction prohibited in this section when the person committing the same knows that illegal oil, illegal gas or illegal product is involved in such transaction or when such person could have known or determined such fact by the exercise of reasonable diligence or from facts within his knowledge. However, regardless of lack of actual notice or knowledge, penalties as provided in this article shall apply to any sale, purchase or acquisition and to the transportation, refining, processing or handling in any other way of illegal oil, illegal gas or illegal product where administrative provision is made for identifying the character of the commodity as to its legality. It shall likewise be a violation for which penalties shall be imposed for any person to sell, purchase or acquire or to transport, refine, process or handle in any other way any oil, gas or any product without complying with any rule, regulation or order of the board relating thereto.

Apart from and in addition to any other remedy or procedure which may be available to the board or any penalty which may be sought against or imposed upon any person with respect to violations relating to illegal oil, illegal gas or illegal product, all illegal oil, illegal gas and illegal products shall, except under such circumstances as are stated in this section, be contraband, forfeited to the State of Alabama and shall be seized and sold and the proceeds applied as provided in this section. When any such seizure shall have been made, it shall be the duty of the Attorney General of the state to institute at once condemnation proceedings in the circuit court of the county in which such property is seized by filing a complaint in the name of the state against the property seized, describing the same, or against the person or persons in possession of such illegal property, if known, to obtain a judgment enforcing the forfeiture. Any party claiming a superior right may intervene in said action by filing a complaint and have his claim adjudicated. The judge presiding in said circuit court may superintend and make all proper orders as to the method and manner of notice to be given to any party claiming any right in the property so seized to come in and assert his right thereto. The said court shall have authority to frame all orders of procedure so as to regulate the proceedings whereby persons may have an opportunity to come in and propound their claim to the seized property sought to be condemned.

The proceeds of the sale of any such property forfeited to the state shall, after paying all expenses of seizing, holding and selling such property, including the costs of court, be paid into the Oil and Gas Fund. The property sold shall be treated as legal oil, legal gas or legal product, as the case may be, in the hands of the purchaser, but the purchaser and the commodity shall be subject to all applicable laws, rules, regulations and orders with respect to further sale or purchase or acquisition and with respect to the transportation, refining, processing or handling in any other way of the commodity purchased. Nothing in this section shall deny or abridge any cause of action which a royalty owner or a lien holder or any other claimant may have because of the forfeiture of the illegal oil, illegal gas or illegal product against the person whose act resulted in such forfeiture.

In order to protect further the natural gas fields and oil fields in this state, it is hereby declared to be unlawful for any owner to allow a well to go wild or to get out of control. The owner of any such well shall, after 24 hours written notice by the board given to him or to the person in possession of such well, make reasonable effort to control such well. In the event of the failure of the owner of such well within 24 hours after service of the notice above provided for to control the same, if such can be done within the period, or to begin in good faith, upon service of such notice, operations to control such well or upon failure to prosecute diligently such operations, then the board shall have the right to take charge of the work of controlling such well, and it shall have the right to proceed, through its own agents or by contract with a responsible contractor, to control the well or otherwise to prevent the escape or loss of gas or oil from such well, all at the reasonable expense of the owner of the well. In order to secure to the board in the payment the reasonable cost and expense of controlling or plugging such well, the board shall retain the possession of the same and shall be entitled to receive and retain the rents, revenues and incomes therefrom until the costs and expenses incurred by the board shall be repaid. When all such costs and expenses have been repaid, the board shall restore possession of such well to the owner; provided, that in the event the income received by the board shall not be sufficient to reimburse the board as provided for in this section, the board shall have a lien or privilege upon all of the property of the owner of such well, except such as is exempt by law, and the board shall proceed to enforce such lien or privilege by a civil action brought in any court of competent jurisdiction, the same as any other like civil action, and the judgment so obtained shall be executed in the same manner now provided by law for execution of judgments. Any excess over the amount due the board which the property seized and sold may bring, after payment of court costs, shall be paid over to the owner of such well.

(a) Any person desiring or proposing to drill any well in search of oil or gas or any person proposing to drill a Class II injection well as defined in the Federal Safe Drinking Water Act, 42 U.S.C. 300f et seq., before commencing the drilling of any such well, shall notify the State Oil and Gas Supervisor upon the form as the State Oil and Gas Supervisor may prescribe and shall pay to the State Treasurer a fee of three hundred dollars ($300) for each well. The drilling of any well is hereby prohibited until notice is given and the fee has been paid as herein provided. The State Oil and Gas Supervisor shall have the power and authority to prescribe that the form indicate the exact location of the well, the name and address of the owner, operator, contractor, driller, and any other person responsible for the conduct of drilling operations, the proposed depth of the well, the elevation of the well above sea level and such other relevant information as the State Oil and Gas Supervisor may deem necessary or convenient to effectuate the purposes of this article.

(b) Any person filing a petition or notice of such petition with the State Oil and Gas Board requesting a public hearing before the State Oil and Gas Board shall pay to the State Treasurer a fee of one hundred fifty dollars ($150) for filing the petition. Any person who desires to file a petition with the board in forma pauperis shall file with the board a motion for leave so to proceed together with an affidavit, showing his or her inability to pay the filing fee therefor and his or her belief that he or she is entitled to redress before the board. If the motion is granted, the person may proceed without payment of the filing fee. If the motion is denied, the board shall state in writing the reasons for the denial.

(c) Any person proposing to fracture a coal group shall notify the State Oil and Gas Supervisor. The notification shall be in a form prescribed by the State Oil and Gas Supervisor and shall be accompanied by a fee paid to the State Treasurer not to exceed two hundred fifty dollars ($250) for each coal group to be fractured. All fees for a proposal to fracture a coal group paid pursuant to this section shall be deposited into the State Oil and Gas Board Special Fund and disbursed by the State Treasurer upon warrants drawn by the state Comptroller for the purpose of defraying the expenses incurred by the State Oil and Gas Board in the performance of its duties pursuant to this subsection.

(d) All well permit fees, filing fees for petitions, and other fees paid to the State Treasurer pursuant to this section shall be paid into the Alabama State Oil and Gas Board Special Fund and disbursed by the State Treasurer upon warrants drawn by the state Comptroller for the purpose of defraying expenses incurred by the State Oil and Gas Board in the performance of its duties.

(e) There is hereby created a separate fund in the State Treasury to be known as the Alabama State Oil and Gas Board Special Fund. This fund shall consist of well permit fees, filing fees for petitions, and other fees. All moneys deposited in this fund shall be used for the purpose of defraying expenses incurred by the State Oil and Gas Board in the performance of its duties. The fund shall be paid out only by warrant of the Comptroller upon the Treasurer, upon itemized vouchers, approved by the State Oil and Gas Supervisor; provided, that no funds shall be withdrawn or expended except as budgeted and allotted according to the provisions of Sections 41-4-80 through 41-4-96 and Sections 41-19-1 through 41-19-12, and only in amounts as stipulated in the general appropriation or other appropriation bills, provided further, that any funds unspent and unencumbered at the end of any state fiscal year shall not be transferred into the General Fund.

(a) For the purpose of defraying the expenses connected with the administration and enforcement of this article, including the expense of the inspections, tests, analyses and all other expenses connected with the supervision and protection of crude petroleum oil and natural gas in the State of Alabama, there is hereby levied on the producer a tax equal in amount to two percent of the gross value, at the point of production, of the crude petroleum oil or natural gas produced for sale, transport, storage, profit or for use from any well or wells in the State of Alabama. Provided, however, that natural gas lawfully injected into oil or gas pools or reservoirs in the soil or beneath the soil or waters of the State of Alabama is exempt from this tax. Provided, further, that natural gas lawfully injected into the earth for the purpose of lifting oil or gas in the State of Alabama is exempt from this tax. However, if any gas so injected into the earth is sold for such purposes or injected into underground storage facilities as defined in Section 9-17-150 et seq., then the gas so sold or injected shall not be exempt from this tax. Natural gas lawfully vented or flared in connection with the production, treatment, or processing of oil or gas is exempt from the tax. The tax shall be paid to the Department of Revenue directly by the purchaser when authorized in writing by the producer, and, when so paid, the producer or person in charge of production shall be relieved of any further liability.

(b) For any well for which the initial permit issued by the Oil and Gas Board is dated on or after July 1, 1996, and before July 1, 2002, except a replacement well for a well for which the initial permit was issued by the Oil and Gas Board is dated before July 1, 1996, the applicable rate of tax levied pursuant to subsection (a) shall be one percent for a period of five years commencing with commercial production, after which subsection (a) shall apply.

(a) It shall be the duty of every person producing or in charge of production of crude petroleum or natural gas from any well or wells in the State of Alabama for sale, transport, storage, profit or for use to keep and preserve such records of the amount of all such crude petroleum oil or natural gas produced for sale, transport, storage, profit or for use as may be necessary to determine the amount of the tax for which he is liable under the provisions of Section 9-17-25.

(b) It shall be the further duty of every such person to file with the Department of Revenue, not later than the fifteenth day of the second calendar month following the month of production, a return, subscribed by the person who completes such return, which must contain a printed declaration that it is made under the penalty of perjury, showing the amount of crude petroleum oil or natural gas produced for sale, transport, storage, profit or for use during the second preceding month, to compute on the return the amount of tax charged against him in accordance with the provisions of Section 9-17-25 and to transmit to the Department of Revenue with such return a remittance covering the tax chargeable against him. The return shall contain such other information and shall be in such form as the Department of Revenue shall designate.

(c) The Department of Revenue is authorized to determine the gross value at the point of production in accordance with customary practice.

(d) The Department of Revenue is hereby authorized to promulgate reasonable rules and regulations relating to the administration and enforcement of this article provided, however, that no rule or regulation adopted or promulgated by the department shall alter, limit, extend or be out of harmony with any of the provisions of this article.

In the event that any collection of tax is improperly made in an effort to enforce the provisions of Section 9-17-25, either as a result of a mistake of law or fact, the amount so paid may be recovered in the same manner as is provided by law for the recovery of other taxes erroneously paid directly to the Department of Revenue.

(a) There is hereby created and established a board, to be known as the State Oil and Gas Board, to be composed of three members to be appointed by the Governor for terms of the following duration: one member for a term of two years; one member for a term of four years; and one member for a term of six years. At the expiration of the term for which each of the original appointments is made, each successor member shall be appointed for a term of six years; and, in the event of a vacancy, the Governor shall by appointment fill such unexpired term. Each member shall be eligible for reappointment at the discretion of the Governor. Each member of the board shall be a resident of the State of Alabama and shall be a qualified voter therein. Each member shall qualify by taking an oath of office and shall hold office until his successor is appointed and qualified. The board shall elect from its number a chairman. The board shall meet or hold hearings at such times and places as may be found by the board to be necessary to carry out its duties. Each member of the board shall receive as compensation for his services an annual salary of $3,600.00 and, in addition thereto, each member shall be entitled to a travel and office expense allowance of $500.00 per month. The compensation and travel and office expense allowance as above set forth shall be paid from the Oil and Gas Fund.

(b) Any person who has served 19 or more years continuously on the board shall be a nonvoting member emeritus of the board. A member emeritus shall receive no compensation, salary, or travel or expense allowance or reimbursement for his or her service on the board.

All funds collected pursuant to the two percent tax levied on the producer of crude petroleum oil or natural gas produced for sale, transport, storage, profit or for use, from any well or wells in the State of Alabama, as is provided in Section 9-17-25, shall be deposited in the State Treasury to the credit of the General Fund and shall be expended only in the manner provided by appropriation by the Legislature.

(a) Any person who knowingly and willfully violates any provision of this article, or any rule, regulation or order of the board made under this article shall, in the event a penalty for such violation is not otherwise provided for in this article, be subject to a fine not to exceed $10,000.00 a day for each and every day of such violation and for each and every act of violation, such fine to be recovered by a civil action in the circuit court of the county where the defendant resides, or in the county of the residence of any defendant if there is more than one defendant, or in the circuit court of the county where the violation took place. The place of the civil action shall be selected by the board, and such civil action, by direction of the board, shall be instituted and conducted in the name of the board by the attorney for the board or by the Attorney General or under his direction by the district attorney for the county where the civil action is instituted.

(b) The payment of any fine as provided for in this section shall not have the effect of changing illegal oil into legal oil, illegal gas into legal gas or illegal product into legal product; nor shall such payment have the effect of authorizing the sale, purchase or acquisition or the transportation, refining, processing or handling in any other way of such illegal oil, illegal gas or illegal product, but, to the contrary, the fine shall be imposed for each prohibited transaction relating to such illegal oil, illegal gas or illegal product.

(c) Any person knowingly and willfully aiding or abetting any other person in the violation of any statute of this state relating to the conservation of oil or gas or the violation of any provision of this article or any rule, regulation or order made under this article shall be subject to the same penalty prescribed in subsection (a) of this section for the violation by such other person.

(d) The payment of any fine shall not impair or abridge any cause of action which any person may have against the person violating a rule, regulation or order by reason of an injury resulting from such violation.

(a) As used in this section, the following terms shall have the following meanings:

(1) CHECK STUB. The financial record attached to a check, included with a check, or mailed separately at or near the time the check is mailed.

(2) DIVISION ORDER. A contract between the interest owner and the purchaser, operator, or the owner of the right to drill and to produce, directing the distribution of the value from the sale of the oil, gas, and other liquid hydrocarbons in the proportions set out in the division order, which division order is prepared by the purchaser, operator, and/or the owner of the right to drill and to produce on the basis of the ownership shown in a title opinion prepared after examination of abstracts or based on other generally acceptable legal ownership documentation and which is executed by the interest owners or others having an interest in the production.

(3) INTEREST OWNER. A person owning a royalty interest or a working interest in an oil or gas well or unit.

(b) Whenever payment is made for oil or gas production to an interest owner, whether pursuant to a division order, lease, servitude, or other agreement, all of the following information shall be included on or ascertainable from the check stub or on an attachment to the form of payment, unless the information is otherwise provided on a regular basis:

(1) Lease, property, or well identification number, if any, or reference to appropriate agreement with identification of the well or unit from which production is attributed.

(2) Month and year of sales or purchases included in the payment.

(3) Total barrels of crude oil or MCF of gas purchased or sold.

(4) Owner's final realizable price per barrel MCF, long ton, or other appropriate measurement.

(5) Total amount of severance and other production taxes, with the exception of windfall profit tax.

(6) Net value of total sales from the property after taxes are deducted.

(7) Interest owner's interest, expressed as a decimal fraction, in production from subdivision (1) above.

(8) Interest owner's share of the total value of sales prior to any tax deductions.

(9) Interest owner's share of the sales value less the share of the production and severance taxes, as applicable.

(c) The proceeds derived from the sale of oil or gas production from any oil or gas well shall be paid to persons legally entitled thereto, commencing no later than six months after the date of the first sale, and thereafter no later than 60 days after the end of the calendar month within which subsequent production is sold. The payment shall be made to persons legally entitled thereto by the first purchasers of the production by tender to the person's designated agents or at their last known address. The purchasers may remit to the persons entitled to the proceeds from production annually where the aggregate of one year's accumulation of monthly proceeds does not exceed one hundred dollars ($100). However, the purchaser may hold accumulated proceeds of less than ten dollars ($10) until production ceases or the purchaser's responsibility for making payment for production ceases, whichever occurs first. On the request of the person legally entitled to the proceeds, the purchaser shall remit payment of accumulated proceeds annually to the person if the purchaser owes the person less than ten dollars ($10). On the request of the person legally entitled to the proceeds, the purchaser shall remit payment of the proceeds to the person monthly if the purchaser owes the person more than twenty-five dollars ($25), but less than one hundred dollars ($100). In addition, before the purchaser accumulates proceeds greater than twenty-five dollars ($25), the purchaser shall provide notice to the persons entitled to the proceeds that there is an option to be paid monthly for proceeds greater than twenty-five dollars ($25). The notice to the person entitled to the proceeds shall also provide directions for requesting monthly payment and shall constitute notice to all heirs, successors, representatives, and assigns of the person entitled to the proceeds. As used herein, 'first purchase' shall mean the first commercial purchaser of production after completion of the well and shall not include purchasers of oil or gas during initial testing prior to completion of the well; further provided, that any delay in determining the persons legally entitled to an interest in the proceeds from production caused by unmarketable title to the interest shall not affect payment to persons whose title is marketable. In those instances where the proceeds derived from oil or gas produced and sold after May 4, 1982, cannot be paid within the time allowed by this section because the title thereto is not marketable, the purchasers of the production shall remit to the parties ultimately determined to be the legal owners of the production, the full amount of the proceeds plus interest at the rate on a per annum basis equal to the Federal Reserve Discount Rate in effect as of the first day of each month during which interest on the proceeds is payable, the interest to accrue from the date that proceeds were due to persons with marketable title as hereinabove specified. Marketability of title shall be determined in accordance with the then current legally recognized real property law governing title to oil and gas interest. The first purchaser shall be exempt from this subsection and the operator and/or the owner of the right to drill and to produce under an oil and/or gas lease shall be substituted for the first purchaser therein where the operator and/or the owner and purchaser have entered into an arrangement where the proceeds are paid by the purchaser to the operator and/or the owner who assumes responsibility of paying the proceeds to persons legally entitled thereto. Where the operator and/or the owner of the drilling rights are substituted herein for the purchaser, the period of time set forth herein under which the parties must account to persons entitled to the production shall be determined as of the date of receipt of the proceeds for the production as opposed to the date of first sale applicable to the purchaser.

(d) Any first purchaser of production or operator and/or owner of the right to drill substituted for the first commercial purchaser as provided herein, that violates this section shall be liable to the persons legally entitled to the proceeds from production for the unpaid amount of the proceeds plus interest at the rate of 12 percent per annum, the interest accruing from the date at which the proceeds were due as specified herein.

(e) The circuit court for the county or counties in which the oil or gas well is located shall have jurisdiction over all proceedings brought pursuant to this section.

Two members of the board shall constitute a quorum, but two affirmative votes shall be necessary for the adoption or promulgation of any rule, regulation or order of the board.

The Attorney General shall be attorney for the board; provided, that in cases of emergency the board may call upon the district attorney of the circuit where the action is to be brought or defended to represent the board until such time as the Attorney General may take charge of the litigation. Any member of the board, or the secretary thereof, shall have power to administer oaths to any witness in any hearing, investigation or proceeding contemplated by this article or by any other law of this state relating to the conservation of oil and gas.

(a) Whenever by reason of the termination of the full period within which an optional gas and oil lease which is of record may be kept alive by the payments of rentals or by reason of the termination of any of the options in such lease by reason of failure on the part of the lessee to comply with the condition therein for the prevention of forfeiture such lease shall lapse, the lessee must, on request in writing by the lessor, mark same cancelled on the records or must furnish the lessor with an instrument, duly acknowledged, directing the cancellation of such lease on the records.

(b) Any lessee failing or refusing to supply the lessor with such an instrument or failing or refusing to cancel any lease on the records within 30 days after receiving written demand as above shall be liable to such lessor for a reasonable attorney's fee incurred by the lessor in bringing suit to have such forfeiture and cancellation adjudged and, in addition thereto, shall be liable to the lessor for all damages suffered by the lessor by reason of his inability to make any lease on account of the first lease not having been cancelled.

(a) The board shall have jurisdiction and authority over all persons and property necessary to administer and enforce effectively the provisions of this article and all other articles relating to the conservation of oil and gas.

(b) The board shall have the authority and it shall be its duty to make such inquiries as it may think proper to determine whether or not waste, over which it has jurisdiction, exists or is imminent. In the exercise of such power the board shall have the authority to perform the following:

(1) Collect data.

(2) Make investigation and inspection.

(3) Examine properties, leases, papers, books and records, including drilling records, logs, and other geological and geophysical data.

(4) Examine, check, test and gauge oil and gas wells, tanks, plants, processing facilities, structures, natural gas pipelines and gathering lines, and storage and transportation equipment and facilities, and other modes of transportation.

(5) Hold hearings.

(6) Appoint a hearing officer for the purpose of conducting public hearings on behalf of the board and making recommendations to the board.

(7) Require the keeping of records and making of reports.

(8) Take such action as may be reasonably necessary to enforce this article.

(c) The board shall have the authority to make, after hearing and notice as provided in this article, such reasonable rules, regulations, and orders as may be necessary from time to time in the proper administration and enforcement of this article, including rules, regulations, and orders for the following purposes:

(1) To require the drilling, casing, and plugging of wells to be done in such a manner as to prevent the escape of oil or gas out of one stratum to another.

(2) To prevent the intrusion of water into an oil or gas stratum from a separate stratum.

(3) To prevent the pollution of fresh water supplies by oil, gas, salt water, or other contaminants resulting from oil and gas operations.

(4) To require the making of reports showing the location of oil and gas wells and to require the filing of logs, including electrical logs, and drilling records and the lodgment in the office of the State Oil and Gas Supervisor of typical drill cuttings or cores, if cores are taken, within six months from the time of the completion of any well.

(5) To require reasonable bond, with good and sufficient surety, or other financial security approved by the board, conditioned for the performance of the duties outlined in subdivisions (1), (2), (3), and (4) of this subsection, including the duty to plug each dry or abandoned well and to restore the well site for each dry or abandoned well and associated production and processing facility and plant upon the abandonment of such well, facility, or plant.

(6) To prevent wells from being drilled, operated, or produced in such a manner as to cause injury to neighboring leases or property.

(7) To prevent the drowning by water of any stratum or part thereof capable of producing oil or gas in paying quantities and to prevent the premature and irregular encroachment of water which reduces or tends to reduce the total ultimate recovery of oil or gas from any pool.

(8) To require the operation of wells with efficient gas-oil ratios and to fix such ratios.

(9) To prevent 'blowouts,' 'caving' and 'seepage' in the sense that conditions indicated by such terms are generally understood in the oil and gas business.

(10) To prevent fires.

(11) To identify the ownership of all oil and gas wells, producing leases, tanks, plants, processing facilities, structures, natural gas pipelines and gathering lines, and storage and transportation equipment and facilities.

(12) To regulate the 'shooting,' perforating, and chemical treatment of wells.

(13) To regulate enhanced recovery methods, which include Class II injection wells as defined in the Federal Safe Drinking Water Act, 42 U.S.C. 300f et seq.

(14) To regulate the spacing of wells and to establish drilling units.

(15) To limit and prorate the production of oil or gas or both from any pool or field for the prevention of waste as defined in this article.

(16) To require, either generally or in or from particular areas, certificates of clearance or tenders in connection with the transportation of oil, gas or any product.

(17) To prevent, so far as is practical, reasonably avoidable drainage from each developed unit which is not equalized by counterdrainage.

(18) To require the placing of meters of a type approved by the board wherever the board may designate in plants and processing facilities on all pipelines, gathering systems, barge terminals, loading racks, or other places deemed necessary or proper to prevent waste and the transportation of illegally produced oil or gas. Such meters at all times shall be under the supervision and control of the board; and it shall be a violation of this article, subject to the penalties provided in this article, for any person to refuse to attach or install such meter when ordered to do so by the board or in any way to tamper with such meter so as to produce a false or inaccurate reading or to have any bypass at such a place where the oil or gas can be passed around such meter, unless expressly authorized by written permit of the board.

The Commissioner of Conservation and Natural Resources, on behalf of the state, is hereby authorized to lease any lands or interest therein under the jurisdiction of the Department of Conservation and Natural Resources for the exploration, development and production of oil, gas and other minerals or any one or more of them, on, in and under such lands.

The Commissioner of Conservation and Natural Resources, on behalf of the state, is hereby authorized, upon the written request of the head of any state department, institution or agency, to lease any land or interest therein owned by such department, institution or agency or in which such department, institution or agency has the beneficial interest for the exploration, development and production of oil, gas and other minerals or any one or more of them, on, in and under such lands.

The Commissioner of Conservation and Natural Resources, on behalf of the state, is hereby authorized to lease, upon such terms as he may approve, any lands or any right or any interest therein under any navigable streams or navigable waters, bays, estuaries, lagoons, bayous or lakes and the shores along any navigable waters to high tide mark and submerged lands in the Gulf of Mexico within the historic seaward boundary of this state, which is hereby declared to extend seaward six leagues from the land bordering the gulf, for the exploration, development and production of oil, gas and other minerals or any one or more of them, on, in and under such lands, and such lands or interests therein for such purposes shall be supervised and managed by the Department of Conservation and Natural Resources.

Any lease executed under the provisions of this division may authorize the lessee to pool or unitize the lease, the lands or minerals covered thereby or any part thereof with other lands, leases or mineral estates or parts thereof upon such terms as the Commissioner of Conservation and Natural Resources may approve.

The Commissioner of Conservation and Natural Resources is hereby authorized to execute upon such terms as he may approve:

(1) Pooling or unitization agreements affecting oil, gas and other minerals or any one or more of them, on, in or under lands within the jurisdiction of the Department of Conservation and Natural Resources so as to pool or unitize such interests in oil, gas and other minerals or any one of them with similar interests in other lands; and

(2) Agreements with lessees amending existing leases so as to authorize lessees to pool or unitize the leases, the lands or minerals covered thereby or any part thereof with other leases, lands or mineral estates or parts thereof, and to add to or change any other provisions thereof in order to make such existing lease(s) similar on those points with the lease form then being used by the Commissioner of Conservation and Natural Resources in making leases of similar state-owned property, except that no such change or addition may be made which changes the number of years stated as the primary term, or the lease bonuses, delay rentals, royalties, or any other compensation to be paid under the terms of such existing leases.

All pooling or unitization agreements or agreements amending existing leases or any part thereof executed under the provisions of this section by the Commissioner of Conservation and Natural Resources must be approved in writing by the Governor.

All lands proposed to be leased under the provisions of this division shall be leased only upon the basis of competitive bids. The Commissioner of Conservation and Natural Resources shall obtain written, sealed competitive bids on every proposed lease of each tract of such land. Invitations for bids shall be published in The Montgomery Advertiser, Montgomery, Alabama, at least 25 days before the final date for submitting bids. Invitations for bids shall contain a statement as to the final date for submitting bids; the time and place at which the bids will be opened; and a legal description of the location and the approximate acreage of the tract of land proposed to be leased. Publication of the invitations for bids shall also be placed in a newspaper published in the county or counties in which the land is located; however, if a typographical error appears in such ad or ads, same shall not invalidate the sale; provided, that no tract of land containing more than 5,200 acres shall be leased or advertised for lease under the provisions of this division.

Bids shall be opened publicly in the office of the Commissioner of Conservation and Natural Resources at the time stated in the invitations for bids.

The lease of any tract of land shall be awarded to the highest responsible bidder making the most advantageous offer to the state, and the Commissioner of Conservation and Natural Resources must either accept the most advantageous offer or reject all bids within five days from the date said bids were opened. The Commissioner of Conservation and Natural Resources may reject all bids on any tract of land when, in his opinion, the public interest will be served thereby, but such tract of land shall not thereafter be leased except in accordance with the provisions of this division.

All persons requesting the Commissioner of Conservation and Natural Resources to advertise state lands for oil and gas lease purposes shall be required to pay for the necessary legal advertisements for such sales.

The Department of Conservation and Natural Resources is hereby authorized to provide for a reasonable charge for its oil and gas lease tract charts, such charge to be based upon the cost of printing, handling and mailing by the Department of Conservation and Natural Resources.

The revenues that shall accrue under the provisions of this division from rentals, royalties and all other sources subject to the cost of administration shall be the property of the department or institution to which said lands belong or in which said department or institution shall own the beneficial interest. All revenue accruing from the lease of the bed of any navigable streams, waterways, bays, estuaries, lagoons, bayous, lakes and any submerged lands in the Gulf of Mexico within the historic seaward boundary of this state, subject to the cost of administration, shall be paid by the Commissioner of Conservation and Natural Resources to the State Treasurer to become a part of the General Funds of the State of Alabama. The Division of Lands of the Department of Conservation and Natural Resources shall be entitled to 10 percent of all revenues, including royalty, bonus and rentals, derived under the provisions of this division as cost of administration. Such cost of administration shall be covered into the State Treasury by the Commissioner of Conservation and Natural Resources to the credit of the State Lands Fund.

No such revenues shall be expended from such funds unless and to the extent appropriated by law.

(a) The board shall prescribe its rules of order or procedure in hearings or other proceedings before it under this article.

(b) No rule, regulation or order, including any change, renewal or extension thereof, shall, in the absence of an emergency, be made by the board under the provisions of this article except after a public hearing upon at least 10 days notice, given in the manner and form as may be prescribed by the board. Such public hearing shall be held at such time and place and in such manner as may be prescribed by the board, and any person having any interest in the subject matter of the hearing shall be entitled to be heard.

(c) In the event an emergency is found to exist by the board which in its judgment requires the making, changing, renewal or extension of a rule, regulation or order without first having a hearing, such emergency rule, regulation or order shall have the same validity as if a hearing with respect to the same had been held after due notice. The emergency rule, regulation or order permitted by this subsection shall remain in force no longer than 45 days from its effective date and, in any event, it shall expire when the rule, regulation or order made after due notice and hearing with respect to the subject matter of such emergency rule, regulation or order becomes effective.

(d) Should the board elect to give notice by personal service, such service may be made by any officer authorized to serve process or by any agent of the board in the same manner as is provided by law for the service of summons in civil actions in the circuit courts of this state. Proof of the service by such agent shall be by the affidavit of the person making personal service.

(e) All rules, regulations and orders made by the board shall be in writing and shall be entered in full by the secretary of the board in a book to be kept for such purpose by the board, which shall be a public record and open to inspection at all times during reasonable office hours. A copy of any rule, regulation or order, certified by the secretary of the board, shall be received in evidence in all courts of this state with the same effect as the original.

(f) Any interested person shall have the right to have the board call a hearing for the purpose of taking action in respect to any matter within the jurisdiction of the board by making a request therefor in writing. Upon the receipt of any such request, the board promptly shall call a hearing thereon and, after such hearing and with all convenient speed and in any event within 30 days after the conclusion of such hearing, shall take such action with regard to the subject matter thereof as it may deem appropriate.

(a) The board or any member thereof is hereby empowered to issue subpoenas for witnesses, to require their attendance and the giving of testimony before it and to require the production of such books, papers and records in any proceeding before the board as may be material upon questions lawfully before the board. Such subpoenas shall be served by the sheriff or any other officer authorized by law to serve process in this state. No person shall be excused from attending and testifying or from producing books, papers and records before the board or a court or from obedience to the subpoena of the board or a court on the ground or for the reason that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to a penalty or forfeiture; provided, that nothing contained in this section shall be construed as requiring any person to produce any books, papers or records or to testify in response to any inquiry not pertinent to some question lawfully before such board or court for determination. No natural person shall be subjected to criminal prosecution or to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which he may be required to testify or produce evidence, documentary or otherwise, before the board or court or in obedience to its subpoena; provided, that no person testifying shall be exempt from prosecution and punishment for perjury committed in so testifying.

(b) In case of failure or refusal on the part of any person to comply with any subpoena issued by the board or any member thereof or in case of the refusal of any witness to testify or answer to any matter regarding which he may be lawfully interrogated, any circuit court in this state, on application of the board, may, in term time or vacation, issue an attachment for such person and compel him to comply with such subpoena and to attend before the board and produce such documents and give his testimony upon such matters as may be lawfully required, and such court have the power to punish for contempt as in case of disobedience of like subpoenas issued by or from such court or for a refusal to testify therein.

The phrase 'enhanced recovery methods' as used herein shall mean the increased recovery from a pool of oil or gas achieved by artificial means or by the application of energy extrinsic to the pool, including repressuring, cycling, pressure maintenance, injection, or any other enhanced recovery methods of producing hydrocarbons recognized by the oil and gas industry and approved by the board.

In order to promote the conservation of oil and gas resources, prevent waste, avoid the drilling of unnecessary wells, allow the drilling of wells at optimum geologic locations, and protect correlative rights, the State Oil and Gas Board of Alabama upon its own motion may, or upon the petition of any interested person shall, hold a hearing to consider the need for the operation as a unit of an entire field or of any pool or pools or of any portion of a pool or combinations thereof within a field for the production of oil or gas or both in order to increase the ultimate recovery by enhanced recovery methods or any other method of cooperative development and operation calculated to increase the ultimate recovery of oil or gas.

The board shall issue an order requiring such unit operation if it finds that:

(1) Unit operation of the field or of any pool or pools or of any portion of a pool or combinations thereof within the field is reasonably necessary to prevent waste, to increase the ultimate recovery of oil or gas, to avoid the drilling of unnecessary wells, to allow the drilling of wells at optimum geologic locations, and to protect the correlative rights of interested parties.

(2) The proposed plan for unit operations will increase the ultimate recovery of oil or gas by enhanced recovery methods or any other method of cooperative development and operation calculated to increase the ultimate recovery of oil or gas.

(3) The estimated additional cost incident to conduction of such operation will not exceed the value of the estimated additional recovery of oil or gas.

The order shall be fair and reasonable under all the circumstances, shall protect the rights of interested parties and shall include:

(1) A description of the area embraced, termed the unit area, and a description of the pool or pools or portions thereof affected and lying within the unit area, termed the unit pool.

(2) A statement of the nature of the operations contemplated.

(3) An allocation among the separately owned interests derived from or associated with tracts in the unit area of all the oil or gas, or both, produced from the unit pool within the unit area, and not required in the conduct of such operation or unavoidably lost, such allocation to be based on the relative contribution which each such tract or interest is expected to make during the course of such operation, to the total production of oil or gas, or both, so allocated.

(4) A provision for adjustment among the owners of the unit area (not including royalty owners, except as otherwise hereinafter provided) of their respective investment in wells, tanks, pumps, machinery, materials, equipment and other things and services of value attributable to the unit operations. The amount to be charged unit operations for any such items shall be determined by the owners of the unit area (not including royalty owners, except as otherwise hereinafter provided); provided, that, if said owners of the unit area are not able to agree upon the amount of such charges, or to agree upon the correctness thereof, the board shall determine them after due notice and hearing thereon, upon the application of any interested party. The net amount charged against the owner of a separately owned tract or separately owned interest derived from or associated with a tract within the unit shall be considered expense of unit operation chargeable against such tract or interest. The adjustments provided for in this subdivision may be treated separately and handled by agreements separate from the unitization agreement.

(5) A provision that the costs and expenses of unit operation, including investment, past and prospective be charged to the separately owned tracts or interests in the same proportions that such tracts or interests share in unit production, as provided in subdivision (3) of this section. The expenses chargeable to a tract or interest shall be paid by the person or persons not entitled to share in production free of operating costs and who, in the absence of unit operation, would be responsible for the expense of developing and operating such tract or interest, and such person or person's interest in the separately owned tract or interest shall be primarily responsible therefor.

(6) The designation of, or a provision for the selection of, a unit operator. The conduct of all unit operations by the unit operator and the selection of a successor to the unit operator designated by the board shall be governed by the terms and provisions of the unitization agreement.

(7) A provision that when the full amount of any charge made against a separately owned tract or interest is not paid when due by the person or persons primarily responsible therefor, as provided in subdivision (5) of this section, then seven-eighths of the oil and gas production allocated to such separately owned tract or interest may be appropriated by the unit operator and marketed and sold for the payment of such charge, together with interest at the rate of five percent per annum thereon. A one-eighth part of the unit production allocated to each separately owned tract or interest shall in all events be regarded as royalty to be distributed to and among, or the proceeds thereof paid to, the royalty owners, free and clear of all unit expense and free and clear of any lien therefor. The owner of any overriding royalty, oil and gas payment, royalty in excess of one-eighth of production, or other interests, who is not primarily responsible therefor shall, to the extent of such payment or deduction from his share, be subrogated to all the rights of the unit operator with respect to the interest or interests primarily responsible for such payment; provided, however, such right of subrogation shall not apply, inure to or exist for the benefit of the owner of any overriding royalty, oil and gas payment, royalty in excess of one-eighth of production, or other interest, who is not primarily responsible therefor, in any oil production unit from the lower cretaceous geological formation between depths of 10,500 feet and 11,500 feet subsea in which tertiary recovery methods are utilized. The owner of such overriding royalty, oil and gas payment, royalty in excess of one-eighth of production, or other interest in any oil production unit from the lower cretaceous geological formation between depths of 10,500 feet and 11,500 feet subsea in which tertiary recovery methods are utilized shall bear his fair share of all capital and operating costs incurred by a unit operator from the first day of the month next succeeding the month during which such tertiary recovery methods are initiated and implemented in the production unit, and the owner of such interest shall continue to bear his share of both capital and operating cost so long as such unit is producing oil or gas utilizing tertiary recovery methods. The term 'tertiary recovery methods' as used herein shall include, but shall not be limited to, the maintenance or partial maintenance of reservoir pressures by any method recognized by the industry as a tertiary method of recovery and approved by the board, recycling, injecting or flooding a pool, or pools, or parts thereof, with air, gas, water, hydrocarbons, carbon dioxide (CO2) or any other substance, or any combination or combinations thereof, the use of polymers, steam flooding or fire flooding, or any other tertiary method of producing hydrocarbons recognized by the industry and approved by the board. Any surplus received by the operator from any such sale of production shall be credited to the person or persons from whom it was deducted in the proportion of their respective interest.

(8) The time the unit operation shall become effective and the manner in which and the circumstances under which the unit operation shall terminate.

An order requiring unit operation shall not become effective unless and until agreements incorporating the provisions of Section 9-17-83 have been signed or in writing ratified or approved by the owners of at least 66 2/3 percent in interest as costs are shared under the terms of the allocation formula established by the board in the order pursuant to Section 9-17-83(3) and by 66 2/3 percent in interest of the royalty owners in the unit area as revenues are distributed under the terms of the allocation formula established by the board in the order pursuant to Section 9-17-83(3), and the board has made a finding to that effect either in the order or in a supplemental order. In the event the required percentage interests have not signed, ratified, or approved the order or agreements within six months from and after the date of the order it shall be automatically revoked.

(a) The board, by entry of new or amending orders, may from time to time add to unit operations portions of pools not theretofore included and may add to unit operations new pools or portions thereof and may extend the unit area as required. Any such order, in providing for allocation of production from the unit pool of the unit area, shall first allocate to the pool or pools or portion thereof so added a portion of the total production of oil or gas or both from all pools affected within the unit area as enlarged, (and not required in the conduct of unit operations or unavoidably lost), the allocation to be based on the relative contribution which such added pool or pools or portion thereof is expected to make during the remaining course of unit operations to the total production of oil or gas or both so allocated. The production so allocated to the added pool or pools or portions thereof shall be allocated to the separately owned tracts which participate in the production on the basis of the relative contribution of each tract as provided in subdivision (3) of Section 9-17-83. The remaining portion of unit production shall be allocated among the separately owned tracts within the previously established unit area in the same proportions as those specified in the previous order. Orders promulgated under this paragraph shall become operative at 7:00 A.M. on the first day of the month next following the day on which the order becomes effective under the provisions of subsection (b) of this section.

(b) An order promulgated by the board under subsection (a) of this section shall not become effective unless and until the following occur:

(1) All of the terms and provisions of the unitization agreement relating to the extension or enlargement of the unit area or to the addition of pools or portions thereof to unit operations have been fulfilled and satisfied and evidence thereof has been submitted to the board.

(2) The extension or addition effected by the order has been agreed to in writing by the owners of at least 66 2/3 percent in interest as costs are shared under the terms of the allocation formula established by the board in the area or pools or portions thereof to be added to the unit operation by the order and by 66 2/3 percent in interest of the royalty owners as revenues are distributed under the terms of the allocation formula established by the board in the area or pools or portions thereof to be added to the unit operations by such order, and evidence thereof has been submitted to the board.

In the event both of the above requirements are not fulfilled within six months from and after the date of such order, it shall be automatically revoked.

(c) After the operative date of an order promulgated under this section, costs and expenses of operation of the unit as enlarged shall be governed by subdivision (5) of Section 9-17-83. Adjustment among the owners of the unit area as enlarged (not including royalty owners) of their respective investments in wells, tanks, pumps, machinery, materials, equipment and other things and services of value attributable to the operation of the unit as enlarged shall be governed by subdivision (4) of Section 9-17-83.

When the contribution of a separately owned tract with respect to any unit pool has been established pursuant to subdivision (3) of Section 9-17-83, such contribution shall not be subsequently altered, unless the board shall find, after notice and hearing, that such contribution was erroneous because shown to be erroneous by subsequently discovered data or by subsequently discovered errors in the data upon which the original contribution was established. No change or correction of the contribution of any separately owned tract shall be given retroactive effect; provided, that appropriate adjustment shall be made for the investment charges as provided for in subdivision (4) of Section 9-17-83.

The portion of unit production allocated to a separately owned tract within the unit area shall be deemed for all purposes to have been actually produced from such tract, and operations with respect to any unit pool within the unit area shall be deemed for all purposes to be the conduct of operations for the production of oil or gas or both from each separately owned tract in the unit area.

This article shall apply only to field or pool units and shall not apply to the unitization of interests within a drilling unit as may be authorized and governed under the provisions of Article 1 of this chapter.

The State Geologist shall be, ex officio, the State Oil and Gas Supervisor and shall perform all of the duties of and is hereby vested with all the powers imposed upon and vested in the State Oil and Gas Supervisor under and by the terms and provisions of this article. The State Oil and Gas Supervisor shall be charged with the duty of enforcing this article and all rules, regulations and orders promulgated by the board. The State Oil and Gas Supervisor shall be, ex officio, secretary of the board and shall keep all minutes and records of the board. He shall, as secretary, give bond in such sum as the board may direct with corporate surety to be approved by the board, conditioned that he will well and truly account for any funds coming into his hands. The State Geologist shall receive $3,600.00 per annum for the performance of his duty under this article.