1-1 By: Brown S.B. No. 946
1-2 (In the Senate - Filed February 26, 2001; February 28, 2001,
1-3 read first time and referred to Committee on Natural Resources;
1-4 March 26, 2001, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 6, Nays 0; March 26, 2001,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 946 By: Brown
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the statutory lien that arises when an abandoned well
1-11 has not been timely plugged.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Subsection (c), Section 89.043, Natural Resources
1-14 Code, is amended to read as follows:
1-15 (c) Not later than [On or before] the 30th day before the
1-16 date the commission enters into a contract to plug a delinquent
1-17 inactive well, the commission shall send a notice by certified mail
1-18 to the operator of the well at the address last reported to the
1-19 commission as required by Section 91.142 and commission rules. The
1-20 notice shall direct the operator to plug the well and shall state
1-21 that:
1-22 (1) the commission may plug the well and foreclose its
1-23 statutory lien under Section 89.083 unless the operator requests a
1-24 hearing not later than the 10th day after the date the operator
1-25 receives the notice;
1-26 (2) if the commission forecloses its statutory lien
1-27 under Section 89.083 [plugs the well], all well-site equipment will
1-28 be presumed to have been abandoned and the commission may dispose
1-29 of the equipment and hydrocarbons from the well as provided by
1-30 Section 89.085;
1-31 (3) if the commission plugs the well, the commission:
1-32 (A) by order may require the operator to
1-33 reimburse the commission for the plugging costs; or
1-34 (B) may request the attorney general to file
1-35 suit against the operator to recover those costs; [and]
1-36 (4) the commission has a statutory lien on all
1-37 well-site equipment under Section 89.083; and
1-38 (5) the lien described by Subdivision (4) is
1-39 foreclosed by operation of law if the commission does not receive a
1-40 valid and timely request for a hearing before the 15th day after
1-41 the date the notice is mailed.
1-42 SECTION 2. Subsection (c), Section 89.083, Natural Resources
1-43 Code, is amended to read as follows:
1-44 (c) The lien may be foreclosed by judicial action or
1-45 commission order at any time after notice and an opportunity for a
1-46 hearing. If notice is mailed under Section 89.043 and if the lien
1-47 is not previously foreclosed, the lien is foreclosed by operation
1-48 of law on the 15th day after the date the notice is mailed unless
1-49 the commission has received a valid and timely request for a
1-50 hearing before that date. [The commission may foreclose on the
1-51 lien by entering into a plugging contract.] The commission is not
1-52 required to give notice or an opportunity for a hearing to
1-53 subordinate lienholders or nonoperators before foreclosing the lien
1-54 [entering into a plugging contract].
1-55 SECTION 3. Subsections (a), (g), and (h), Section 89.085,
1-56 Natural Resources Code, are amended to read as follows:
1-57 (a) When the commission forecloses its lien under Section
1-58 89.083 on [enters into a contract to plug] a delinquent inactive
1-59 well, well-site equipment and any amount of hydrocarbons from the
1-60 well that is stored on the lease are presumed to have been
1-61 abandoned and may be disposed of by the commission in a
1-62 commercially reasonable manner by either or both of the following
1-63 methods:
1-64 (1) entering into a plugging contract that provides
2-1 [may provide] that the person plugging or cleaning up pollution, or
2-2 both, will take title to well-site equipment, hydrocarbons from the
2-3 well that are stored on the lease, or hydrocarbons recovered during
2-4 the plugging operation in exchange for a sum of money deducted as a
2-5 credit from the contract price; or
2-6 (2) selling the well-site equipment, hydrocarbons from
2-7 the well that are stored on the lease, or hydrocarbons recovered
2-8 during the plugging operation [may be sold] at a public auction or
2-9 a public or private sale.
2-10 (g) The notice required by Subsection (f) of this section
2-11 must include [shall state]:
2-12 (1) the lease name;
2-13 (2) the well number;
2-14 (3) the county in which the well is located;
2-15 (4) the abstract number of the property on which the
2-16 lease is situated;
2-17 (5) the commission lease or gas well identification
2-18 number or drilling permit number;
2-19 (6) a list of the property disposed of under this
2-20 section; and
2-21 (7) a statement that any person who has a legal or
2-22 equitable ownership or security interest in the equipment or
2-23 hydrocarbons that was in existence on the date the commission
2-24 foreclosed its statutory lien [entered into a contract to plug or
2-25 clean up the well] may file a claim with the commission.
2-26 (h) Not later than the 180th day after the date the
2-27 well-site equipment or hydrocarbons are disposed of under this
2-28 section, the commission shall publish a notice that states:
2-29 (1) the lease name;
2-30 (2) the well number;
2-31 (3) the county in which the well is located;
2-32 (4) the commission lease or gas well identification
2-33 number or drilling permit number; and
2-34 (5) that equipment or hydrocarbons if applicable from
2-35 the well and lease were disposed of under this section and that any
2-36 person who has a legal or equitable ownership or security interest
2-37 in the equipment or hydrocarbons that was in existence on the date
2-38 the commission foreclosed its statutory lien [entered into a
2-39 contract to plug or clean up the well] may file a claim with the
2-40 commission.
2-41 SECTION 4. Subsections (a) and (c), Section 89.086, Natural
2-42 Resources Code, are amended to read as follows:
2-43 (a) A person with a legal or equitable ownership or security
2-44 interest in well-site equipment or hydrocarbons disposed of under
2-45 Section 89.085 of this code may make a claim against the oil-field
2-46 cleanup fund unless an element of the transaction giving rise to
2-47 the interest occurs after the commission forecloses its statutory
2-48 lien under Section 89.083 [enters into a plugging contract].
2-49 (c) A claimant must identify the well-site equipment or
2-50 hydrocarbons in which the claimant has an interest and state the
2-51 amount of the property interest as of the date the commission
2-52 foreclosed its statutory lien under Section 89.083 [entered into
2-53 the plugging contract].
2-54 SECTION 5. The changes in law made by this Act apply only to
2-55 liens on wells for which the Railroad Commission of Texas sends a
2-56 notice under Section 89.043, Natural Resources Code, on or after
2-57 the effective date of this Act. Liens on wells for which notice is
2-58 sent before the effective date of this Act are covered by the law
2-59 as it existed when the notice was sent, and that law is continued
2-60 in effect for that purpose.
2-61 SECTION 6. This Act takes effect immediately if it receives
2-62 a vote of two-thirds of all the members elected to each house, as
2-63 provided by Section 39, Article III, Texas Constitution. If this
2-64 Act does not receive the vote necessary for immediate effect, this
2-65 Act takes effect September 1, 2001.
2-66 * * * * *