By Lewis of Orange H.B. No. 3218
77R7229 QS-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the statutory lien that arises when an abandoned well
1-3 has not been timely plugged.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 89.043(c), Natural Resources Code, is
1-6 amended to read as follows:
1-7 (c) Not later than [On or before] the 30th day before the
1-8 date the commission enters into a contract to plug a delinquent
1-9 inactive well, the commission shall send a notice by certified mail
1-10 to the operator of the well at the address last reported to the
1-11 commission as required by Section 91.142 and commission rules. The
1-12 notice shall direct the operator to plug the well and shall state
1-13 that:
1-14 (1) the commission may plug the well and foreclose its
1-15 statutory lien under Section 89.083 unless the operator requests a
1-16 hearing not later than the 10th day after the date the operator
1-17 receives the notice;
1-18 (2) if the commission forecloses its statutory lien
1-19 under Section 89.083 [plugs the well], all well-site equipment will
1-20 be presumed to have been abandoned and the commission may dispose
1-21 of the equipment and hydrocarbons from the well as provided by
1-22 Section 89.085;
1-23 (3) if the commission plugs the well, the commission:
1-24 (A) by order may require the operator to
2-1 reimburse the commission for the plugging costs; or
2-2 (B) may request the attorney general to file
2-3 suit against the operator to recover those costs; [and]
2-4 (4) the commission has a statutory lien on all
2-5 well-site equipment under Section 89.083; and
2-6 (5) the commission may foreclose the lien described by
2-7 Subdivision (4) if the commission does not receive a valid and
2-8 timely request for a hearing before the 15th day after the date the
2-9 notice is mailed.
2-10 SECTION 2. Section 89.083(c), Natural Resources Code, is
2-11 amended to read as follows:
2-12 (c) The lien may be foreclosed by judicial action,
2-13 commission order, or operation of law not earlier than the 15th day
2-14 after the date the notice is mailed under Section 89.043 unless the
2-15 commission has received a valid and timely request for a hearing
2-16 before that date. [The commission may foreclose on the lien by
2-17 entering into a plugging contract.] The commission is not required
2-18 to give notice or an opportunity for a hearing to subordinate
2-19 lienholders or nonoperators before foreclosing the lien [entering
2-20 into a plugging contract].
2-21 SECTION 3. Sections 89.085(a), (g), and (h), Natural
2-22 Resources Code, are amended to read as follows:
2-23 (a) When the commission forecloses its lien under Section
2-24 89.083 on [enters into a contract to plug] a delinquent inactive
2-25 well, well-site equipment and any amount of hydrocarbons from the
2-26 well that is stored on the lease are presumed to have been
2-27 abandoned and may be disposed of by the commission in a
3-1 commercially reasonable manner by either or both of the following
3-2 methods:
3-3 (1) entering into a plugging contract that provides
3-4 [may provide] that the person plugging or cleaning up pollution, or
3-5 both, will take title to well-site equipment, hydrocarbons from the
3-6 well that are stored on the lease, or hydrocarbons recovered during
3-7 the plugging operation in exchange for a sum of money deducted as a
3-8 credit from the contract price; or
3-9 (2) selling the well-site equipment, hydrocarbons from
3-10 the well that are stored on the lease, or hydrocarbons recovered
3-11 during the plugging operation [may be sold] at a public auction or
3-12 a public or private sale.
3-13 (g) The notice required by Subsection (f) of this section
3-14 must include [shall state]:
3-15 (1) the lease name;
3-16 (2) the well number;
3-17 (3) the county in which the well is located;
3-18 (4) the abstract number of the property on which the
3-19 lease is situated;
3-20 (5) the commission lease or gas well identification
3-21 number or drilling permit number;
3-22 (6) a list of the property disposed of under this
3-23 section; and
3-24 (7) a statement that any person who has a legal or
3-25 equitable ownership or security interest in the equipment or
3-26 hydrocarbons that was in existence on the date the commission
3-27 foreclosed its statutory lien [entered into a contract to plug or
4-1 clean up the well] may file a claim with the commission.
4-2 (h) Not later than the 180th day after the date the
4-3 well-site equipment or hydrocarbons are disposed of under this
4-4 section, the commission shall publish a notice that states:
4-5 (1) the lease name;
4-6 (2) the well number;
4-7 (3) the county in which the well is located;
4-8 (4) the commission lease or gas well identification
4-9 number or drilling permit number; and
4-10 (5) that equipment or hydrocarbons if applicable from
4-11 the well and lease were disposed of under this section and that any
4-12 person who has a legal or equitable ownership or security interest
4-13 in the equipment or hydrocarbons that was in existence on the date
4-14 the commission foreclosed its statutory lien [entered into a
4-15 contract to plug or clean up the well] may file a claim with the
4-16 commission.
4-17 SECTION 4. Sections 89.086(a) and (c), Natural Resources
4-18 Code, are amended to read as follows:
4-19 (a) A person with a legal or equitable ownership or security
4-20 interest in well-site equipment or hydrocarbons disposed of under
4-21 Section 89.085 of this code may make a claim against the oil-field
4-22 cleanup fund unless an element of the transaction giving rise to
4-23 the interest occurs after the commission forecloses its statutory
4-24 lien under Section 89.083 [enters into a plugging contract].
4-25 (c) A claimant must identify the well-site equipment or
4-26 hydrocarbons in which the claimant has an interest and state the
4-27 amount of the property interest as of the date the commission
5-1 foreclosed its statutory lien under Section 89.083 [entered into
5-2 the plugging contract].
5-3 SECTION 5. (a) This Act takes effect September 1, 2001.
5-4 (b) The changes in law made by this Act apply only to liens
5-5 on wells for which the Railroad Commission of Texas sends a notice
5-6 under Section 89.043, Natural Resources Code, on or after the
5-7 effective date of this Act. Liens on wells for which notice is
5-8 sent before the effective date of this Act are covered by the law
5-9 as it existed when the notice was sent, and that law is continued
5-10 in effect for that purpose.