§ 20A-24. Permittee's insurance and bond.

In the event a permit be issued by the city commission under the terms of this chapter for the drilling and operation of a well, no actual drilling operations shall be commenced until the permittee shall file with the city secretary a bond or a certificate of insurance, as follows:

(a)

A bond in the principal sum of such number of dollars as has been so determined by the city commission, but not to be less than five hundred thousand dollars ($500,000.00). Said bond to be executed by a reliable insurance company authorized to do business in the State of Texas, as surety, and with applicant as principal, running to the City of Marshall for the benefit of the city and all persons concerned, conditioned that the permittee will comply with the terms and conditions of this chapter in the drilling and operation of the well. Said bond shall become effective on or before the date the same is filed with the city secretary and remain in force and effect for at least a period of six (6) months subsequent to the expiration of the term of the permit issued, and in addition the bond will be conditioned that the permittee will promptly pay off fines, penalties and other assessments imposed upon permittee by reason of his breach of any of the terms, provisions and conditions of this chapter, and that the permittee will promptly restore the streets and sidewalks and other public property of the city, which may be disturbed or damaged in their operations, to their former condition; and that the permittee will promptly clear all premises of all litter, trash, waste, and other substances used, allowed, or occurring in the drilling or producing operations, and will, after abandonment, grade, level and restore said property to the same surface condition, as nearly as possible, as existed when operations for the drilling of the well or wells were first commenced; and that the permittee will indemnify and hold the City of Marshall harmless from any and all liability growing out of or attributable to the granting of such permit. If at any time the city commission shall deem any permittee's bond to be insufficient for any reason, it may require the permittee to file a new bond.

If, after completion of a well, permittee has complied with all of the provisions of this chapter, such as to removing derricks, clearing premises, etc., he may apply for the city commission to have said bond reduced to a sum of not less than fifty thousand dollars ($50,000.00) for the remainder of the time said well produced without reworking. During reworking operations the amount of the bond shall be increased to the original amount.

(b)

In lieu of the bond required in paragraph (a) of this section, the permittee may carry a policy or policies of standard comprehensive public liability insurance, including contractual liability covering bodily injuries and property damage, naming the permittee and the City of Marshall, in an insurance company authorized to do business within the State of Texas, and such policy or policies in the aggregate shall provide for the following minimum coverages:

(1)

Bodily injuries, one million dollars ($1,000,000.00) for one (1) person; and one million dollars ($1,000.000.00) for one (1) accident.

(2)

Property damages, one million dollars ($1,000,000.00).

 The permittee shall file with the city secretary certificates of such insurance as above stated, and shall obtain the written approval thereof by the city manager, who shall act thereon within ten (10) days from the date of such filing. Such insurance policy or policies shall not be cancelled without written notice to the city secretary at least ten (10) days prior to the effective date of such cancellation. In the event such insurance policy or policies are cancelled, the permit granted shall terminate and the permittee's rights to operate under such permit shall cease until the permittee files additional insurance, as provided herein, or otherwise complies with this section.

(c)

The city manager of the City of Marshall, as the agent for the city commission, in his sole discretion, may consider and accept evidence of financial responsibility of the applicant and if such evidence establishes to his satisfaction a degree of financial responsibility equivalent to or greater than that required in paragraphs (a) and (b) above, the city manager, as agent for the city commission, may accept such financial responsibility in lieu of requirements of paragraphs (a) and (b) above, or may accept a combination of such evidence of financial responsibility, bond or insurance.

(Ord. No. O-81-19, § 8, 7-23-81; Ord. No. O-81-46, § 1, 9-24-81; Ord. No. O-86-14, § 1, 3-27-86)