1-1 By: Keffer (Senate Sponsor - Haywood) H.B. No. 3582
1-2 (In the Senate - Received from the House May 7, 1999;
1-3 May 10, 1999, read first time and referred to Committee on Natural
1-4 Resources; May 14, 1999, reported favorably by the following vote:
1-5 Yeas 4, Nays 0; May 14, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to receivers, payors, and lessees under certain mineral
1-9 leases.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Subchapter F, Chapter 64, Civil Practice and
1-12 Remedies Code, is amended by adding Section 64.093 to read as
1-13 follows:
1-14 Sec. 64.093. RECEIVER FOR ROYALTY INTERESTS OWNED BY
1-15 NONRESIDENT OR ABSENTEE. (a) A district court may appoint a
1-16 receiver for the royalty interest owned by a nonresident or absent
1-17 defendant in an action that:
1-18 (1) is brought by a person claiming or owning an
1-19 undivided mineral interest in land in this state or an undivided
1-20 leasehold interest under a mineral lease of land in the state; and
1-21 (2) has one or more defendants who have, claim, or own
1-22 an undivided royalty interest in that property.
1-23 (b) The defendant for whom the receiver is sought must:
1-24 (1) be a person whose residence or identity is unknown
1-25 or a nonresident; and
1-26 (2) not have paid taxes on the interest or rendered it
1-27 for taxes during the five-year period immediately preceding the
1-28 filing of the action.
1-29 (c) The plaintiff in the action must allege by verified
1-30 petition and prove that the plaintiff:
1-31 (1) has made a diligent but unsuccessful effort to
1-32 locate the defendant; and
1-33 (2) will suffer substantial damage or injury unless
1-34 the receiver is appointed.
1-35 (d) In an action under Subsection (a):
1-36 (1) the plaintiff, in the petition, must name the last
1-37 known owner or the last record owner of the interest as defendant;
1-38 (2) the plaintiff must serve notice on the defendant
1-39 by publication as provided by the Texas Rules of Civil Procedure;
1-40 (3) the court may appoint as receiver the county
1-41 judge, the county clerk, or any other resident of the county in
1-42 which the land is located;
1-43 (4) notwithstanding the Texas Rules of Civil
1-44 Procedure, the applicant is not required to post bond; and
1-45 (5) the receiver is not required to post bond.
1-46 (e) A receivership created under this section continues as
1-47 long as the defendant or the defendant's heirs, assigns, or
1-48 personal representatives fail to appear in court in person or by
1-49 agent or attorney to claim the defendant's interest.
1-50 (f) As ordered by the court, the receiver shall immediately:
1-51 (1) ratify a mineral lease executed by a person owning
1-52 an undivided mineral interest in the property;
1-53 (2) ratify a pooling agreement executed by a person
1-54 owning an undivided mineral interest in the property or an
1-55 undivided leasehold interest in the property; or
1-56 (3) enter into a unitization agreement authorized by
1-57 the Railroad Commission of Texas.
1-58 (g) A lease ratified by a receiver under this section may
1-59 authorize the lessee to pool and unitize land subject to the lease
1-60 with adjacent land into a unit not to exceed 160 acres for an oil
1-61 well or 640 acres for a gas well plus 10 percent tolerance or into
1-62 a unit that substantially conforms to a larger unit prescribed or
1-63 permitted by governmental rule. A pooling agreement ratified by a
1-64 receiver under this section may allow a pooled unit not to exceed
2-1 160 acres for an oil well or 640 acres for a gas well plus 10
2-2 percent tolerance or into a unit that substantially conforms to a
2-3 larger unit prescribed or permitted by governmental rule.
2-4 (h) The monetary consideration, if any, due for the
2-5 execution of a ratification, pooling agreement, or unitization
2-6 agreement by the receiver must be paid to the clerk of the court in
2-7 which the case is pending before the receiver executes the
2-8 instrument. It is, however, recognized that, because
2-9 ratifications, pooling agreements, and unitization agreements are
2-10 typically entered into in consideration of the future benefits
2-11 accruing to the grantor thereof, an initial monetary consideration
2-12 is not typically paid for the execution of such instruments. The
2-13 court shall apply the money to the costs accruing in the case and
2-14 retain any balance for the owner of the royalty interest. Payments
2-15 made at a later time under the lease, pooled unit, or unitization
2-16 agreement shall be paid into the registry of the court and
2-17 impounded for the owner of the royalty interest.
2-18 (i) This section is cumulative of other laws relating to
2-19 removal of a cloud from title or appointment of a receiver.
2-20 (j) In this section:
2-21 (1) "Mineral lease" includes any lease of oil, gas, or
2-22 other minerals that contains provisions necessary or incident to
2-23 the orderly exploration, development, and recovery of oil, gas, or
2-24 other minerals.
2-25 (2) "Leasehold interest" includes ownership created
2-26 under a mineral lease or carved out of a leasehold estate granted
2-27 under a mineral lease, including production payments, overriding
2-28 royalty interests, and working interests.
2-29 (3) "Pooling agreement" includes any agreement that
2-30 pools or unitizes land with adjacent land for production of oil,
2-31 gas, or other minerals.
2-32 (4) "Royalty interest" includes any interest in the
2-33 lands entitled to share in the production of oil, gas, or other
2-34 minerals that is not required to execute a mineral lease or any
2-35 other instrument in order to vest in the mineral interest owner or
2-36 mineral leasehold interest owner the right and power, as to that
2-37 interest, to develop oil, gas, or other minerals produced solely
2-38 from those lands.
2-39 (k) To the extent that Subsection (d)(2) conflicts with the
2-40 Texas Rules of Civil Procedure, Subsection (d)(2) controls.
2-41 Notwithstanding Section 22.004, Government Code, the supreme court
2-42 may not amend or adopt rules in conflict with Subsection (d)(2).
2-43 SECTION 2. Section 53.001, Natural Resources Code, is
2-44 amended by adding Subdivision (4) to read as follows:
2-45 (4) "Surface mining" means the mining of minerals by
2-46 removing the overburden lying above the natural deposit of minerals
2-47 and mining directly from the natural deposits that are exposed.
2-48 The term does not include in situ mining activities.
2-49 SECTION 3. Sections 53.065(b) and (c), Natural Resources
2-50 Code, are amended to read as follows:
2-51 (b) Except as provided by Subsection (c), under [Under] a
2-52 lease executed under this subchapter on or after September 1, 1987,
2-53 the lessee shall pay:
2-54 (1) to the state 80 percent of all bonuses agreed to
2-55 be paid for the lease and 80 percent of all rentals and royalties
2-56 that are payable under the lease; and
2-57 (2) [. The lessee shall pay] to the owner of the
2-58 surface 20 percent of all bonuses agreed to be paid for the lease
2-59 and 20 percent of all rentals and royalties payable under the
2-60 lease.
2-61 (c) Under a lease executed under this subchapter on or after
2-62 September 1, 1999, for the exploration and production by surface
2-63 mining of coal, lignite, potash, sulphur, thorium, or uranium, the
2-64 lessee shall pay:
2-65 (1) to the state 60 percent of all bonuses agreed to
2-66 be paid for the lease and 60 percent of all rentals and royalties
2-67 that are payable under the lease; and
2-68 (2) to the owner of the surface 40 percent of all
2-69 bonuses agreed to be paid for the lease and 40 percent of all
3-1 rentals and royalties payable under the lease.
3-2 (d) If production is obtained, the state shall receive not
3-3 less than one-sixteenth of the value of the minerals produced.
3-4 SECTION 4. Subchapter J, Chapter 91, Natural Resources Code,
3-5 is amended by adding Section 91.408 to read as follows:
3-6 Sec. 91.408. INFORMATION FOR PAYEES OF PROCEEDS OF
3-7 PRODUCTION FROM CERTAIN GAS WELLS. (a) A payor of proceeds from
3-8 the sale of gas produced from a tight formation as defined by
3-9 Section 29(c)(2)(B), Internal Revenue Code of 1986, annually shall
3-10 furnish the payee a statement providing the information necessary
3-11 to compute the federal income tax credit provided by that section
3-12 for the gas for which payment was made in the preceding year,
3-13 including:
3-14 (1) information as described in Section 91.502(1) of
3-15 this code; and
3-16 (2) the volume of the gas, measured in:
3-17 (A) thousands of cubic feet and heating value;
3-18 or
3-19 (B) millions of British thermal units for each
3-20 thousand cubic feet.
3-21 (b) A payor shall furnish a statement required by Subsection
3-22 (a) not later than March 15 each year.
3-23 SECTION 5. Section 4 of this Act takes effect September 1,
3-24 1999.
3-25 SECTION 6. The importance of this legislation and the
3-26 crowded condition of the calendars in both houses create an
3-27 emergency and an imperative public necessity that the
3-28 constitutional rule requiring bills to be read on three several
3-29 days in each house be suspended, and this rule is hereby suspended,
3-30 and that this Act take effect and be in force from and after its
3-31 passage, and it is so enacted.
3-32 * * * * *