By: Brown S.B. No. 946
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. Subsection (c), Section 89.043, Natural Resources
1-6 Code, is 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
1-25 reimburse the commission for the plugging costs; or
2-1 (B) may request the attorney general to file
2-2 suit against the operator to recover those costs; [and]
2-3 (4) the commission has a statutory lien on all
2-4 well-site equipment under Section 89.083; and
2-5 (5) the lien described by Subdivision (4) is
2-6 foreclosed by operation of law if the commission does not receive a
2-7 valid and timely request for a hearing before the 15th day after
2-8 the date the notice is mailed.
2-9 SECTION 2. Subsection (c), Section 89.083, Natural Resources
2-10 Code, is amended to read as follows:
2-11 (c) The lien may be foreclosed by judicial action or
2-12 commission order at any time after notice and an opportunity for a
2-13 hearing. If notice is mailed under Section 89.043 and if the lien
2-14 is not previously foreclosed, the lien is foreclosed by operation
2-15 of law on the 15th day after the date the notice is mailed unless
2-16 the commission has received a valid and timely request for a
2-17 hearing before that date. [The commission may foreclose on the
2-18 lien by entering into a plugging contract.] The commission is not
2-19 required to give notice or an opportunity for a hearing to
2-20 subordinate lienholders or nonoperators before foreclosing the lien
2-21 [entering into a plugging contract].
2-22 SECTION 3. Subsections (a), (g), and (h), Section 89.085,
2-23 Natural Resources Code, are amended to read as follows:
2-24 (a) When the commission forecloses its lien under Section
2-25 89.083 on [enters into a contract to plug] a delinquent inactive
2-26 well, well-site equipment and any amount of hydrocarbons from the
3-1 well that is stored on the lease are presumed to have been
3-2 abandoned and may be disposed of by the commission in a
3-3 commercially reasonable manner by either or both of the following
3-4 methods:
3-5 (1) entering into a plugging contract that provides
3-6 [may provide] that the person plugging or cleaning up pollution, or
3-7 both, will take title to well-site equipment, hydrocarbons from the
3-8 well that are stored on the lease, or hydrocarbons recovered during
3-9 the plugging operation in exchange for a sum of money deducted as a
3-10 credit from the contract price; or
3-11 (2) selling the well-site equipment, hydrocarbons from
3-12 the well that are stored on the lease, or hydrocarbons recovered
3-13 during the plugging operation [may be sold] at a public auction or
3-14 a public or private sale.
3-15 (g) The notice required by Subsection (f) of this section
3-16 must include [shall state]:
3-17 (1) the lease name;
3-18 (2) the well number;
3-19 (3) the county in which the well is located;
3-20 (4) the abstract number of the property on which the
3-21 lease is situated;
3-22 (5) the commission lease or gas well identification
3-23 number or drilling permit number;
3-24 (6) a list of the property disposed of under this
3-25 section; and
3-26 (7) a statement that any person who has a legal or
4-1 equitable ownership or security interest in the equipment or
4-2 hydrocarbons that was in existence on the date the commission
4-3 foreclosed its statutory lien [entered into a contract to plug or
4-4 clean up the well] may file a claim with the commission.
4-5 (h) Not later than the 180th day after the date the
4-6 well-site equipment or hydrocarbons are disposed of under this
4-7 section, the commission shall publish a notice that states:
4-8 (1) the lease name;
4-9 (2) the well number;
4-10 (3) the county in which the well is located;
4-11 (4) the commission lease or gas well identification
4-12 number or drilling permit number; and
4-13 (5) that equipment or hydrocarbons if applicable from
4-14 the well and lease were disposed of under this section and that any
4-15 person who has a legal or equitable ownership or security interest
4-16 in the equipment or hydrocarbons that was in existence on the date
4-17 the commission foreclosed its statutory lien [entered into a
4-18 contract to plug or clean up the well] may file a claim with the
4-19 commission.
4-20 SECTION 4. Subsections (a) and (c), Section 89.086, Natural
4-21 Resources Code, are amended to read as follows:
4-22 (a) A person with a legal or equitable ownership or security
4-23 interest in well-site equipment or hydrocarbons disposed of under
4-24 Section 89.085 of this code may make a claim against the oil-field
4-25 cleanup fund unless an element of the transaction giving rise to
4-26 the interest occurs after the commission forecloses its statutory
5-1 lien under Section 89.083 [enters into a plugging contract].
5-2 (c) A claimant must identify the well-site equipment or
5-3 hydrocarbons in which the claimant has an interest and state the
5-4 amount of the property interest as of the date the commission
5-5 foreclosed its statutory lien under Section 89.083 [entered into
5-6 the plugging contract].
5-7 SECTION 5. The changes in law made by this Act apply only to
5-8 liens on wells for which the Railroad Commission of Texas sends a
5-9 notice under Section 89.043, Natural Resources Code, on or after
5-10 the effective date of this Act. Liens on wells for which notice is
5-11 sent before the effective date of this Act are covered by the law
5-12 as it existed when the notice was sent, and that law is continued
5-13 in effect for that purpose.
5-14 SECTION 6. This Act takes effect immediately if it receives
5-15 a vote of two-thirds of all the members elected to each house, as
5-16 provided by Section 39, Article III, Texas Constitution. If this
5-17 Act does not receive the vote necessary for immediate effect, this
5-18 Act takes effect September 1, 2001.