By Keffer H.B. No. 3582
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the appointment of a receiver for a royalty interest.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 CHAPTER 64, Subchapter F, Civil Practice and Remedies Code,
1-5 is amended by the addition of new Sec. 64.093 to read as follows:
1-6 Sec. 64.093. Receiver for Royalty Interests Owned by
1-7 Nonresident or Absentee (a) The purpose of this section is to
1-8 encourage the exploration and development of mineral resources.
1-9 (b) In the following action, a district court may appoint a
1-10 receiver for the royalty interest owned by a nonresident or absent
1-11 defendant: an action that is brought by a person claiming or
1-12 owning an undivided mineral interest in land in this state or an
1-13 undivided leasehold interest under a mineral lease of land in the
1-14 state and that has one or more defendants who have, claim, or own
1-15 an undivided royalty interest in the same property;
1-16 (c) The defendant for whom the receiver is sought must:
1-17 (1) be a person whose residence or identity is unknown
1-18 or a nonresident; and
1-19 (2) have not paid taxes on the interest or rendered it
1-20 for taxes during the five year period immediately preceding the
1-21 filing of the action.
2-1 (d) The plaintiff in the action must allege by verified
2-2 petition and prove that he:
2-3 (1) has made a diligent but unsuccessful effort to
2-4 locate the defendant; and
2-5 (2) will suffer substantial damage or injury unless
2-6 the receiver is appointed.
2-7 (e) In an action under Subsection (b)(1):
2-8 (1) the plaintiff, in the verified petition, must name
2-9 the last known owner or the last record owner of the interest as
2-10 defendant:
2-11 (2) the plaintiff must serve notice on the defendant
2-12 by publication as provided by the Texas Rules of Civil Procedure;
2-13 (3) the court may appoint as receiver the county judge
2-14 and his successors, the county clerk and his successors, or any
2-15 other resident of the county in which the land is located;
2-16 (4) notwithstanding the Texas Rules of Civil
2-17 Procedure, the applicant is not required to post bond; and
2-18 (5) the receiver is not required to post bond.
2-19 (f) A receivership created under this subchapter continues
2-20 as long as the defendant or his heirs, assigns, or personal
2-21 representatives fail to appear in court in person or by agent or
2-22 attorney to claim the defendant's interest.
2-23 (g) As ordered by the court, the receiver shall immediately:
2-24 (1) ratify a mineral lease executed by a person owning
2-25 an undivided mineral interest in the same property;
3-1 (2) ratify a pooling agreement executed by a person
3-2 owning an undivided mineral interest in the same property or an
3-3 undivided leasehold interest in the same property;
3-4 (3) enter into a unitization agreement authorized by
3-5 the Railroad Commission of Texas.
3-6 (h) A lease ratified by a receiver under this section may
3-7 authorize the lessee to pool and unitize land subject to the lease
3-8 with adjacent land into a unit not to exceed 160 acres for an oil
3-9 well or 640 acres for a gas well plus 10 percent tolerance or into
3-10 a unit that substantially conforms to a larger unit prescribed or
3-11 permitted by governmental rule. Likewise, a pooling agreement
3-12 ratified by a receiver under this section may allow a pooled unit
3-13 not to exceed 160 acres for an oil well or 640 acres for a gas well
3-14 plus 10 percent tolerance or into a unit that substantially
3-15 conforms to a larger unit prescribed or permitted by governmental
3-16 rule.
3-17 (i) Money consideration, only if any is due, paid for the
3-18 execution of a ratification, pooling agreement, or unitization
3-19 agreement by the receiver must be paid to the clerk of the court in
3-20 which the case is pending before the receiver executes the
3-21 instrument. The court shall apply the money to the costs accruing
3-22 in the case and retain any balance for the use and benefit of the
3-23 nonresident or person of unknown residence who owns the royalty
3-24 interest. Payments made at a later time under the lease, pooled
3-25 unit, or unitization agreement shall be paid into the registry of
4-1 the court and impounded for the use and benefit of the owner of the
4-2 royalty interest.
4-3 (j) This section is cumulative of other laws relating to
4-4 removal of a cloud from title or appointment of a receiver.
4-5 (k) In this section:
4-6 (1) "Mineral lease" includes any lease of oil, gas, or
4-7 other minerals that contains provisions necessary or incident to
4-8 the orderly exploration, development, and recovery of oil, gas, or
4-9 other minerals.
4-10 (2) "Leasehold interest" includes ownership created
4-11 under a mineral lease or carved out of a leasehold estate granted
4-12 under a mineral lease, including production payments, overriding
4-13 royalty interests, and working interests.
4-14 (3) "Pooling agreement" includes any agreement which
4-15 pools or unitizes land with adjacent land for production of oil,
4-16 gas or other minerals.
4-17 (4) "Royalty interest" includes any interest in the
4-18 lands entitled to share in the production of oil, gas or other
4-19 minerals but which interest is not required to execute either a
4-20 mineral lease or any other instrument in order to vest in the
4-21 mineral interest owner or mineral leasehold interest owner the
4-22 right and power, as to such interest, to develop oil, gas or other
4-23 minerals produced solely from said lands.
4-24 (l) To the extent that Subsection (e)(2) conflicts with the
4-25 Texas Rules of Civil Procedure, Subsection (e)(2) controls.
5-1 Notwithstanding Section 22.004, Government Code, the supreme court
5-2 may not amend or adopt rules in conflict with Subsection (e)(2).