By Holzheauser H.B. No. 3016 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to reporting ownership of mineral interest severed from 1-3 the surface estate and the vesting of title by judicial proceeding 1-4 to certain abandoned mineral interests. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Title 4, Property Code is amended by adding a new 1-7 Chapter 29 to read as follows: 1-8 Chapter 29. VESTING OF TITLE TO 1-9 ABANDONED MINERAL INTEREST IN SURFACE OWNER 1-10 Sec. 29.001. APPLICABILITY. This chapter does not apply to 1-11 a mineral interest owned by a governmental entity. 1-12 Sec. 29.002. DEFINITIONS. In this chapter: 1-13 (1) "Abandonment" means the termination of the use of 1-14 a mineral interest by the owner of the interest. 1-15 (2) "Interest in the surface" means a fee interest, 1-16 whether conditional or not, from which a mineral interest has been 1-17 severed. 1-18 (3) "Mineral interest" means an interest in oil, gas, 1-19 or other minerals in place that is severed from the ownership of an 1-20 interest in the surface and includes a fee interest, whether 1-21 conditional or not, life estate, estate for years, remainder 1-22 interest, reversion, possibility of reverter, right of entry, 1-23 executory interest, leasehold interest, royalty interest, executive 2-1 right, or other present possessory interest, future interest, 2-2 equitable interest, or concurrent ownership interest. 2-3 (4) "Surface owner" means a person, firm, partnership, 2-4 corporation, trust or other entity, who has concurrent or sole 2-5 legal right or title to a present interest in real property from 2-6 which a mineral interest has been severed, except the holder of a 2-7 leasehold interest or an estate for years. 2-8 (5) "Use of a mineral interest" means: 2-9 (A) production of minerals under the interest; 2-10 (B) conduct of operations for injection, 2-11 withdrawal, storage or disposal of water, gas, or other fluid 2-12 substances in connection with the interest; 2-13 (C) payment by the interest's owner of rentals 2-14 or royalties for the purpose of delaying or enjoying the use of the 2-15 interest; 2-16 (D) unitization or pooling of the interest for 2-17 production purposes with another tract on which the use is carried 2-18 out; 2-19 (E) production from a common vein or seam, in 2-20 the case of coal or other solid minerals, by the owners of two or 2-21 more mineral interests; 2-22 (F) payment of taxes on the interest by the 2-23 owner; or 2-24 (G) any other use authorized by the instrument 2-25 creating the interest. 3-1 (6) "Dormant mineral interest" means an interest that 3-2 is not used under any of the sections of Section 29.002(5). 3-3 Section 29.003. AFFIDAVIT OF OWNERSHIP OF MINERAL INTEREST. 3-4 (a) An entity who owns a dormant mineral interest on September 1, 3-5 1995, must, before September 1, 1997, file an affidavit with the 3-6 county clerk of each county in which part of the dormant mineral 3-7 interest is located. An entity who owns a mineral interest that 3-8 becomes a dormant mineral interest after September 1, 1997, must 3-9 file an affidavit with the county clerk of each county in which 3-10 part of the interest is located before the tenth anniversary of the 3-11 date the mineral interest becomes a dormant mineral interest. 3-12 (b) The affidavit must be a pre-printed affidavit in a form 3-13 prescribed by the Secretary of State. 3-14 (c) Nothing shall preclude a dormant mineral interest owner 3-15 from filing affidavits in the future. Any such affidavit filed 3-16 shall prevent the mineral interest from being abandoned for a 3-17 period of twenty years from the filing of such affidavit. 3-18 Section 29.004. RECORDING OF AFFIDAVITS. (a) A county 3-19 clerk may charge the same filing fee for recording an affidavit 3-20 under Section 29.003 as authorized for recording a deed. 3-21 (b) Each county clerk shall maintain a public record of 3-22 affidavits filed under Section 29.003 separately from other records 3-23 in the clerk's office. The clerk shall maintain the affidavit in 3-24 the same manner as required for deeds. 3-25 Section 29.005. PRESUMPTION OF ABANDONMENT ON FAILURE TO 4-1 REPORT. (a) An owner of a dormant mineral interest who fails to 4-2 file an affidavit as required by Section 29.004 is presumed to have 4-3 abandoned the interest, and title to the interest is presumed to 4-4 belong to the surface owner. 4-5 (b) A mineral interest is not abandoned if the owner of the 4-6 interest files an affidavit under Section 29.003 within a year 4-7 after the court determines that the interest is abandoned, but 4-8 before a judgment under Section 29.006 declaring the interest 4-9 abandoned has been made. 4-10 Section 29.006. JUDICIAL PROCEEDING. (a) A surface owner 4-11 may file a petition for declaratory judgment in the district court 4-12 of the county in which the real property is located, requesting: 4-13 (1) the court to determine that the mineral interest 4-14 is abandoned; and 4-15 (2) the court to declare a mineral interest abandoned. 4-16 (b) Except as provided by Section 29.005, the court may 4-17 declare a mineral interest abandoned only if: 4-18 (1) a year has passed since the court determined that 4-19 the mineral interest has been abandoned; and 4-20 (2) the abandonment has lasted for 10 years or more. 4-21 The 10 year period shall not begin to run before September 1, 1995. 4-22 Section 29.007. NOTICE OF PROCEEDING. In an action for 4-23 declaratory judgment under Section 29.006, citation shall be issued 4-24 to the last known owner or owners of the abandoned mineral interest 4-25 as shown by the official records of the county clerk of the county 5-1 in which the property is located and shall be served in accordance 5-2 with the Texas Rules of Civil Procedure. 5-3 Section 29.008. VESTING OF TITLE. (a) If a court declares 5-4 a mineral interest abandoned, title to the interest vests in the 5-5 owner or owners of the surface interest from which it was severed, 5-6 with each owner taking the same share and the same type of 5-7 ownership in the mineral interest as the person has in the surface. 5-8 (b) An entity who acquires title to a mineral interest in an 5-9 abandonment proceeding under this chapter may record, in the same 5-10 manner as a deed, a certified copy of the judgement as evidence of 5-11 title. 5-12 SECTION 2. This Act takes effect september 1, 1995. 5-13 SECTION 3. The importance of this legislation and the 5-14 crowded condition of the calendars in both houses create an 5-15 emergency and imperative public necessity that the constitutional 5-16 rule requiring bills to be read on three several days in each house 5-17 be suspended, and this rule is hereby suspended.