By Salinas H.B. No. 3089
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 requiring notice of intent to drill, requirement for
1-3 surety deposit and negotiation of surface damages.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 52, Natural Resources Code is amended to
1-6 read as follows:
1-7 Sec. 52.298. NOTICE OF INTENT TO DRILL. Before entering
1-8 upon a site for oil or gas drilling, except in instances where
1-9 there are non-state resident surface owners, non-state resident
1-10 surface tenants, unknown heirs, imperfect titles, surface owners,
1-11 or surface tenants whose whereabouts cannot be ascertained with
1-12 reasonable diligence, the operator shall give to the surface owner
1-13 a written notice of his intent to drill containing a designation of
1-14 the proposed location and the approximate date that the operator
1-15 proposes to commence drilling. Such notice shall be given in
1-16 writing by certified mail to the surface owner. If the operator
1-17 makes an affidavit that he has conducted a search with reasonable
1-18 diligence and the whereabouts of the surface owner cannot be
1-19 ascertained or such notice cannot be delivered, then constructive
1-20 notice of the intent to drill may be given in the same manner as
1-21 provided for the notice of proceedings to appoint appraisers.
1-22 Within five (5) days of the date of delivery or service of the
1-23 notice of intent to drill, it shall be the duty of the operator and
2-1 the surface owner to enter into good faith negotiations to
2-2 determine the surface damages.
2-3 Sec. 52.299. UNDERTAKINGS WHICH MAY BE POSTED AS DAMAGE
2-4 DEPOSIT. A. Every operator doing business in this state shall
2-5 file a corporate surety bond, letter of credit from a banking
2-6 institution, cash, or a certificate of deposit with the Secretary
2-7 of State in the sum of Twenty-five Thousand Dollars ($25,000.00)
2-8 conditioned upon compliance with Sections 318.2 through 318.9 of
2-9 this title for payment of any location damages due which the
2-10 operator cannot otherwise pay. The Secretary of State shall hold
2-11 such corporate surety bond, letter of credit from a banking
2-12 institution, cash or certificate of deposit for the benefit of the
2-13 surface owners of this state and shall ensure that such security is
2-14 in a form readily payable to a surface owner awarded damages in an
2-15 action brought pursuant to this act. Each corporate surety bond,
2-16 letter of credit, cash, or certificate of deposit filed with the
2-17 Secretary of State shall be accompanied by a filing fee of Ten
2-18 Dollars ($10.00).
2-19 B. The bonding company or banking institution shall file,
2-20 for such fee as is provided for by law, a certificate that said
2-21 bond or letter of credit is in effect or has been canceled, or that
2-22 a claim has been made against it in the office of the court clerk
2-23 in each county in which the operator is drilling or planning to
2-24 drill. Said bond or letter of credit must remain in full force and
2-25 effect as long as the operator continues drilling operations in
2-26 this state. Each such filing shall be accompanied by a filing fee
3-1 of Ten Dollars ($10.00).
3-2 C. Upon deposit of the bond, letter of credit, cash, or
3-3 certificate of deposit, the operator shall be permitted entry upon
3-4 the property and shall be permitted to commence drilling of a well
3-5 in accordance with the terms and conditions of any lease or other
3-6 existing contractual or lawful right.
3-7 D. If the damages agreed to by the parties or awarded by the
3-8 court are greater than the bond, letter of credit, cash, or
3-9 certificate of deposit posted, the operator shall pay the damages
3-10 immediately or post an additional bond, letter of credit, cash, or
3-11 certificate of deposit sufficient to cover the damages. Said
3-12 increase in bond, letter of credit, cash, or certificate of deposit
3-13 shall comply with the requirements of this section.
3-14 Sec. 52.300. NEGOTIATING SURFACE DAMAGES-APPRAISERS-REPORT
3-15 AND EXCEPTION THERETO-JURY TRIAL. A. Prior to entering the site
3-16 with heavy equipment, the operator shall negotiate with the surface
3-17 owner for the payment of any damages which may be caused by the
3-18 drilling operation. If the parties agree, and a written contract
3-19 is signed, the operator may enter the site to drill. If agreement
3-20 is not reached, or if the operator is not able to contact all
3-21 parties, the operator shall petition the district court in the
3-22 county in which the drilling site is located for appointment of
3-23 appraisers to make recommendations to the parties and to the court
3-24 concerning the amount of damages, if any. Once the operator has
3-25 petitioned for appointment of appraisers, he may enter the site to
3-26 drill.
4-1 B. Ten (10) days' notice of the petition to appoint
4-2 appraisers shall be given to the opposite party, either by personal
4-3 service or by leaving a copy thereof at his usual place of
4-4 residence with some member of his family over fifteen (15) years of
4-5 age, or, in the case of nonresidents, unknown heirs or other
4-6 persons whose whereabouts cannot be ascertained, by publication in
4-7 one issue of a newspaper qualified to publish legal notices in said
4-8 county, said ten-day period to begin with the first publication.
4-9 C. The operator shall select one appraiser, the surface
4-10 owner shall select one appraiser, and the two selected appraisers
4-11 shall select a third appraiser for appointment by the court.
4-12 Unless for good cause shown, additional time is allowed by the
4-13 district court, the three (3) appraisers shall be selected within
4-14 twenty (20) days of service of the notice of the petition to
4-15 appoint appraisers or within twenty (20) days of the first date of
4-16 publication of the notice as specified in subsection B of this
4-17 section. If either of the parties fails to appoint an appraiser or
4-18 if the two appraisers cannot agree on the selection of the third
4-19 appraiser within the required time period, the remaining required
4-20 appraisers shall be selected by the district court upon application
4-21 of either party. Before entering upon their duties, such
4-22 appraisers shall take and subscribe an oath, before a notary public
4-23 or some other person authorized to administer oaths, that they will
4-24 perform their duties faithfully and impartially to the best of
4-25 their ability. They shall inspect the real property and consider
4-26 the surface damages which the owner has sustained or will sustain
5-1 by reason of entry upon the subject land and by reason of drilling
5-2 or maintenance of oil or gas production on the subject tract of
5-3 land. The appraisers shall then file a written report within
5-4 thirty (30) days of the date of their appointment with the clerk of
5-5 the court. The report shall set forth the quantity, boundaries and
5-6 value of the property entered on or to be utilized in said oil or
5-7 gas drilling, and the amount of surface damages done or to be done
5-8 to the property. The appraisers shall make a valuation and
5-9 determine the amount of compensation to be paid by the operator to
5-10 the surface owner and the manner in which the amount shall be paid.
5-11 Said appraisers shall then make a report of their proceedings to
5-12 the court. The compensation of the appraisers shall be fixed and
5-13 determined by the court. The operator and the surface owner shall
5-14 share equally in the payment of the appraisers' fees and court
5-15 costs.
5-16 D. Within ten (10) days after the report of the appraisers
5-17 is filed, the clerk of the court shall forward to each attorney of
5-18 record, each party, and interested party of record, a copy of the
5-19 report of the appraisers and a notice stating the time limits for
5-20 filing an exception or a demand for jury trial as provided for in
5-21 this section.
5-22 1. This notice shall be on a form supplied to all
5-23 district court clerks.
5-24 2. If a party has been served by publication, the
5-25 clerk shall forward a copy of the report of the appraisers and the
5-26 notice of time limits for filing either an exception or a demand
6-1 for jury trial to the last-known mailing address of each party, if
6-2 any, and shall cause a copy of the notice of time limits to be
6-3 published in one issue of a newspaper qualified to public legal
6-4 notices.
6-5 3. After issuing the notice provided herein, the clerk
6-6 shall endorse on the notice form filed in the case the date that a
6-7 copy of the report and the notice form was forwarded to each
6-8 attorney of record, each party, and each interested party of
6-9 record, or the date the notice was published.
6-10 E. The time for filing an exception to the report or a
6-11 demand for jury trial shall be calculated as commencing from the
6-12 date the report of the appraisers is filed with the court. Upon
6-13 failure of the clerk to give notice within the time prescribed, the
6-14 court, upon application by any interested party, may extend the
6-15 time for filing an exception to the report or filing a demand for
6-16 trial by jury for a reasonable period of time not less than twenty
6-17 (20) days from the date the application is heard by the court.
6-18 Appraisers' fees and court costs may be the subject of an
6-19 exception, may be included in an action by the petitioner, and may
6-20 be set and allowed by the court.
6-21 F. The report of the appraisers may be reviewed by the
6-22 court, upon written exceptions filed with the court by either party
6-23 within thirty (30) days after the filing of the report. After the
6-24 hearing the court shall enter the appropriate order either by
6-25 confirmation, rejection, modification, or order of a new appraisal
6-26 for good cause shown. Provided, that in the event a new appraisal
7-1 is ordered, the operator shall have continuing right of entry
7-2 subject to the continuance of the bond required herein. Either
7-3 party may, within sixty (60) days after the filing of such report,
7-4 file with the clerk a written demand for a trial by jury, in which
7-5 case the amount of damages shall be assessed by a jury. The trial
7-6 shall be conducted and judgment entered in the same manner as
7-7 railroad condemnation actions tried in the court. If the party
7-8 demanding the jury trial does not recover a verdict more favorable
7-9 to him than the assessment award of the appraisers, all court costs
7-10 including reasonable attorney fees shall be assessed against him.