1-1 AN ACT
1-2 relating to receivers, payors, and lessees under certain mineral
1-3 leases.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter F, Chapter 64, Civil Practice and
1-6 Remedies Code, is amended by adding Section 64.093 to read as
1-7 follows:
1-8 Sec. 64.093. RECEIVER FOR ROYALTY INTERESTS OWNED BY
1-9 NONRESIDENT OR ABSENTEE. (a) A district court may appoint a
1-10 receiver for the royalty interest owned by a nonresident or absent
1-11 defendant in an action that:
1-12 (1) is brought by a person claiming or owning an
1-13 undivided mineral interest in land in this state or an undivided
1-14 leasehold interest under a mineral lease of land in the state; and
1-15 (2) has one or more defendants who have, claim, or own
1-16 an undivided royalty interest in that property.
1-17 (b) The defendant for whom the receiver is sought must:
1-18 (1) be a person whose residence or identity is unknown
1-19 or a nonresident; and
1-20 (2) not have paid taxes on the interest or rendered it
1-21 for taxes during the five-year period immediately preceding the
1-22 filing of the action.
1-23 (c) The plaintiff in the action must allege by verified
1-24 petition and prove that the plaintiff:
2-1 (1) has made a diligent but unsuccessful effort to
2-2 locate the defendant; and
2-3 (2) will suffer substantial damage or injury unless
2-4 the receiver is appointed.
2-5 (d) In an action under Subsection (a):
2-6 (1) the plaintiff, in the petition, must name the last
2-7 known owner or the last record owner of the interest as defendant;
2-8 (2) the plaintiff must serve notice on the defendant
2-9 by publication as provided by the Texas Rules of Civil Procedure;
2-10 (3) the court may appoint as receiver the county
2-11 judge, the county clerk, or any other resident of the county in
2-12 which the land is located;
2-13 (4) notwithstanding the Texas Rules of Civil
2-14 Procedure, the applicant is not required to post bond; and
2-15 (5) the receiver is not required to post bond.
2-16 (e) A receivership created under this section continues as
2-17 long as the defendant or the defendant's heirs, assigns, or
2-18 personal representatives fail to appear in court in person or by
2-19 agent or attorney to claim the defendant's interest.
2-20 (f) As ordered by the court, the receiver shall immediately:
2-21 (1) ratify a mineral lease executed by a person owning
2-22 an undivided mineral interest in the property;
2-23 (2) ratify a pooling agreement executed by a person
2-24 owning an undivided mineral interest in the property or an
2-25 undivided leasehold interest in the property; or
2-26 (3) enter into a unitization agreement authorized by
2-27 the Railroad Commission of Texas.
3-1 (g) A lease ratified by a receiver under this section may
3-2 authorize the lessee to pool and unitize land subject to the lease
3-3 with adjacent land into a unit not to exceed 160 acres for an oil
3-4 well or 640 acres for a gas well plus 10 percent tolerance or into
3-5 a unit that substantially conforms to a larger unit prescribed or
3-6 permitted by governmental rule. A pooling agreement ratified by a
3-7 receiver under this section may allow a pooled unit not to exceed
3-8 160 acres for an oil well or 640 acres for a gas well plus 10
3-9 percent tolerance or into a unit that substantially conforms to a
3-10 larger unit prescribed or permitted by governmental rule.
3-11 (h) The monetary consideration, if any, due for the
3-12 execution of a ratification, pooling agreement, or unitization
3-13 agreement by the receiver must be paid to the clerk of the court in
3-14 which the case is pending before the receiver executes the
3-15 instrument. It is, however, recognized that, because
3-16 ratifications, pooling agreements, and unitization agreements are
3-17 typically entered into in consideration of the future benefits
3-18 accruing to the grantor thereof, an initial monetary consideration
3-19 is not typically paid for the execution of such instruments. The
3-20 court shall apply the money to the costs accruing in the case and
3-21 retain any balance for the owner of the royalty interest. Payments
3-22 made at a later time under the lease, pooled unit, or unitization
3-23 agreement shall be paid into the registry of the court and
3-24 impounded for the owner of the royalty interest.
3-25 (i) This section is cumulative of other laws relating to
3-26 removal of a cloud from title or appointment of a receiver.
3-27 (j) In this section:
4-1 (1) "Mineral lease" includes any lease of oil, gas, or
4-2 other minerals that contains provisions necessary or incident to
4-3 the orderly exploration, development, and recovery of oil, gas, or
4-4 other minerals.
4-5 (2) "Leasehold interest" includes ownership created
4-6 under a mineral lease or carved out of a leasehold estate granted
4-7 under a mineral lease, including production payments, overriding
4-8 royalty interests, and working interests.
4-9 (3) "Pooling agreement" includes any agreement that
4-10 pools or unitizes land with adjacent land for production of oil,
4-11 gas, or other minerals.
4-12 (4) "Royalty interest" includes any interest in the
4-13 lands entitled to share in the production of oil, gas, or other
4-14 minerals that is not required to execute a mineral lease or any
4-15 other instrument in order to vest in the mineral interest owner or
4-16 mineral leasehold interest owner the right and power, as to that
4-17 interest, to develop oil, gas, or other minerals produced solely
4-18 from those lands.
4-19 (k) To the extent that Subsection (d)(2) conflicts with the
4-20 Texas Rules of Civil Procedure, Subsection (d)(2) controls.
4-21 Notwithstanding Section 22.004, Government Code, the supreme court
4-22 may not amend or adopt rules in conflict with Subsection (d)(2).
4-23 SECTION 2. Section 52.026, Natural Resources Code, is
4-24 amended by amending Subsection (a) and adding Subsection (e) to
4-25 read as follows:
4-26 (a) A lessee of an area under this subchapter may transfer
4-27 the [his] lease at any time. The liability of the transferor to
5-1 properly discharge its obligations under the lease, including
5-2 properly plugging abandoned wells, removing platforms or pipelines,
5-3 or remediation of contamination at drill sites shall pass to the
5-4 transferee upon prior written consent of the commissioner. The
5-5 commissioner may not withhold the consent unreasonably. The
5-6 commissioner may require the transferee to demonstrate that it has
5-7 the financial responsibility to properly discharge its obligations
5-8 under the lease and may require the transferee to post a bond or
5-9 provide other security to secure those obligations if the
5-10 transferee is unable to demonstrate such financial responsibility
5-11 to the satisfaction of the commissioner.
5-12 (e) This section does not relieve a person from the duty to
5-13 comply with a rule adopted or order issued by the Railroad
5-14 Commission of Texas under another provision of this code.
5-15 SECTION 3. Section 53.001, Natural Resources Code, is
5-16 amended by adding Subdivision (4) to read as follows:
5-17 (4) "Surface mining" means the mining of minerals by
5-18 removing the overburden lying above the natural deposit of minerals
5-19 and mining directly from the natural deposits that are exposed.
5-20 The term does not include in situ mining activities.
5-21 SECTION 4. Sections 53.065(b) and (c), Natural Resources
5-22 Code, are amended to read as follows:
5-23 (b) Except as provided by Subsection (c), under [Under] a
5-24 lease executed under this subchapter on or after September 1, 1987,
5-25 the lessee shall pay:
5-26 (1) to the state 80 percent of all bonuses agreed to
5-27 be paid for the lease and 80 percent of all rentals and royalties
6-1 that are payable under the lease; and
6-2 (2) [. The lessee shall pay] to the owner of the
6-3 surface 20 percent of all bonuses agreed to be paid for the lease
6-4 and 20 percent of all rentals and royalties payable under the
6-5 lease.
6-6 (c) Under a lease executed under this subchapter on or after
6-7 September 1, 1999, for the exploration and production by surface
6-8 mining of coal, lignite, potash, sulphur, thorium, or uranium, the
6-9 lessee shall pay:
6-10 (1) to the state 60 percent of all bonuses agreed to
6-11 be paid for the lease and 60 percent of all rentals and royalties
6-12 that are payable under the lease; and
6-13 (2) to the owner of the surface 40 percent of all
6-14 bonuses agreed to be paid for the lease and 40 percent of all
6-15 rentals and royalties payable under the lease.
6-16 (d) If production is obtained, the state shall receive not
6-17 less than one-sixteenth of the value of the minerals produced.
6-18 SECTION 5. Subchapter J, Chapter 91, Natural Resources Code,
6-19 is amended by adding Section 91.408 to read as follows:
6-20 Sec. 91.408. INFORMATION FOR PAYEES OF PROCEEDS OF
6-21 PRODUCTION FROM CERTAIN GAS WELLS. (a) A payor of proceeds from
6-22 the sale of gas produced from a tight formation as defined by
6-23 Section 29(c)(2)(B), Internal Revenue Code of 1986, annually shall
6-24 furnish the payee a statement providing the information necessary
6-25 to compute the federal income tax credit provided by that section
6-26 for the gas for which payment was made in the preceding year,
6-27 including:
7-1 (1) information as described in Section 91.502(1) of
7-2 this code; and
7-3 (2) the volume of the gas, measured in:
7-4 (A) thousands of cubic feet and heating value;
7-5 or
7-6 (B) millions of British thermal units for each
7-7 thousand cubic feet.
7-8 (b) A payor shall furnish a statement required by Subsection
7-9 (a) not later than March 15 each year.
7-10 SECTION 6. (a) Section 5 of this Act takes effect September
7-11 1, 1999.
7-12 (b) The changes in law made by this Act to Sections 53.001
7-13 and 53.065, Natural Resources Code, do not affect a lease for the
7-14 exploration and production by surface mining of coal, lignite,
7-15 potash, sulphur, thorium, or uranium that is not within all or part
7-16 of a survey previously sold with all minerals reserved to the
7-17 state.
7-18 SECTION 7. The importance of this legislation and the
7-19 crowded condition of the calendars in both houses create an
7-20 emergency and an imperative public necessity that the
7-21 constitutional rule requiring bills to be read on three several
7-22 days in each house be suspended, and this rule is hereby suspended,
7-23 and that this Act take effect and be in force from and after its
7-24 passage, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3582 was passed by the House on May
6, 1999, by the following vote: Yeas 141, Nays 0, 1 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 3582 on May 26, 1999, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 3582 on May 30, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 3582 was passed by the Senate, with
amendments, on May 21, 1999, by a viva-voce vote; at the request of
the House, the Senate appointed a conference committee to consider
the differences between the two houses; and that the Senate adopted
the conference committee report on H.B. No. 3582 on May 30, 1999,
by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor