By: Duncan S.B. No. 1574
 
 
A BILL TO BE ENTITLED
AN ACT
relating to the regulation by the Railroad Commission of Texas of
the use of the surface of land in connection with certain activities
associated with the exploration, development, or production of oil
or gas, including the gathering of oil or gas by pipeline.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  Chapter 91, Natural Resources Code, is amended
by adding Subchapter P to read as follows:
SUBCHAPTER P. MISCELLANEOUS PROVISIONS REGARDING USE OF SURFACE OF
LAND IN CONNECTION WITH OIL AND GAS-RELATED ACTIVITIES
       Sec. 91.701.  DEFINITIONS. In this subchapter:
             (1)  "Inactive well" means a well for which the
operator has not maintained regular and continuing activities
related to the production of oil and gas. A well that has been
inactive for 12 consecutive months or longer and that is not
permitted as a disposal or injection well is considered to remain an
inactive well, regardless of any minimal activity, until the
reported production for the well has been at least 10 barrels of
oil, if the well is an oil well, or 100,000 cubic feet of gas, if the
well is a gas well, each month for at least three consecutive
months.
             (2)  "Lessor" means an individual or individuals whose
aggregate ownership interest in a mineral estate is equal to or
greater than 10 percent of the total mineral estate.
             (3)  "Operator" means a person who assumes
responsibility for the physical operation and control of a well as
shown by a form the person files with the commission and the
commission approves.
             (4)  "Primary ranch road" means a road constructed and
maintained to travel on a ranch. The term does not include a well
service road installed by an operator and used by the operator or an
agent or contractor of the operator primarily to service wells or
other leasehold equipment.
             (5)  "Well" has the meaning assigned by Section 89.002.
             (6)  "Well-site equipment" means any
production-related equipment or materials specific to a well,
including motors, pumps, pump jacks, tanks, tank batteries,
separators, compressors, the operator's electric lines and poles,
pipes that exclusively serve an inactive well, or other equipment
located on the surface of an oil and gas leasehold estate, but does
not include lease identification signs, wellheads, tubing heads,
valves, or any other equipment used for well control or well
monitoring.
       Sec. 91.702.  TRANSFER OR REMOVAL OF WELL-SITE EQUIPMENT.
(a)  This section applies only to an inactive well.
       (b)  Unless the lease or another agreement with the lessor
provides otherwise, the operator shall transfer or remove well-site
equipment, in the manner provided by Subsection (c), from the site
of an inactive well that has been inactive for more than 60 months.
       (c)  Pursuant to Subsection (b), on written notice from the
lessor, as provided by Section 91.705, complaining of the failure
of the operator to remove well-site equipment from an inactive
well, the operator, not later than the 90th day after the date of
the written notice, shall:
             (1)  transfer the well-site equipment to another active
well site on the leased premises for use in connection with such
well; or
             (2)  remove the well-site equipment from the leased
premises.
       (d)  If the operator transfers the well-site equipment to
another well site on the leased premises for use in connection with
such active well as provided by Subsection (c)(1), the operator
must employ a substantial portion of the transferred equipment in
connection with the active well to which it has been transferred
within the next 12 months, or remove all transferred equipment from
the leased premises.
       Sec. 91.703.  STANDARDS FOR MAINTENANCE OF CERTAIN
PIPELINES. (a)  The commission by rule shall establish minimum
standards for maintaining pipelines on leased premises that lie on
or beneath established primary ranch roads located on the leased
premises.
       (b)  Rules that may be adopted under this section are limited
to rules establishing a required minimum soil depth above a
pipeline or requiring an alternative means of protection reasonably
necessary to protect the pipeline from damage from expected
vehicular traffic and to allow the maintenance of the surface of the
road on or beneath which the pipeline lies.
       Sec. 91.704.  STANDARDS FOR CONSTRUCTION, OPERATION, AND
MAINTENANCE OF ELECTRICAL POWER LINES. (a)  The operator shall
construct, operate, and maintain electrical power lines serving
well sites and other surface facilities employed in operations
incident to oil and gas development and production in accordance
with the National Electrical Code published by the National Fire
Protection Association and adopted by the Texas Commission of
Licensing and Regulation under Chapter 1305, Occupations Code.
       (b)  The operator shall de-energize lines to inactive wells
and other inactive well-site equipment.
       Sec. 91.705.  ACTION FOR INJUNCTION. (a)  If an operator
violates this subchapter, the lessor may give notice of the
violation to the operator and request that the operator remedy the
violation.  The notice must be mailed by certified mail to the
address of the operator as shown by the records of the commission
and must specifically describe the violation.
       (b)  If the operator fails to remedy the violation before the
90th day after the date the notice is mailed under Subsection (a),
the lessor may bring an action against the operator for injunctive
relief to require the operator to remedy the violation described in
the notice. The district court in the county in which the land
subject to the lease is located has jurisdiction to hear a suit
brought under this section. The trier of fact shall determine
whether the violation alleged by the lessor has occurred. After a
trial, if it is determined that the operator has violated this
subchapter in the manner described in the notice from the lessor,
the court may issue an injunction requiring the operator to comply,
within a reasonable time of the entry of the injunction, with the
particular provision or provisions of this subchapter that have
been found to have been violated. The general requirements for the
issuance of an injunction need not be satisfied for the lessor to be
entitled to injunctive relief. A bond may not be required of the
lessor as a condition to the issuance of an injunction. The trial
court may suspend the operation of the injunction pending appeal by
the operator conditioned on the operator posting bond in an amount
necessary to pay the costs of complying with this subchapter with
regard to the particular violation found.
       (c)  The trial court, absent a timely appeal by the operator,
on a complaint by the affected lessor, may remedy the failure by the
operator to comply with the terms of the injunction by requiring
that the operator post a bond payable to the lessor in an amount
sufficient to remedy the violation.  The bond is payable
conditioned on the lessor having remedied the violation at the
lessor's expense. The amount of any judgment rendered against the
bond must be only for those costs determined by the trial court to
have been reasonably necessary to remedy the violation. If
remedying the violation requires the removal of well-site
equipment, the court shall order the equipment forfeited and
authorize the lessor to sell the forfeited equipment and recover
the proceeds. The amount of any judgment rendered against the bond
must be reduced by the amount of proceeds received from the sale of
the equipment. Any proceeds received from the sale of the equipment
in excess of the reasonable and necessary cost of remedying the
violation are subject to further order of the court.
       Sec. 91.706.  ACTION FOR COSTS.  If the operator fails to
comply with an injunction under Section 91.705 and also fails to
post a bond as ordered by the trial court under that section, the
lessor may bring an action in the district court for the county in
which the land subject to the lease is located to recover from the
operator the reasonable and necessary costs incurred by the lessor
in remedying the violation. If remedying the violation requires
removal of well-site equipment, the court may order the equipment
forfeited and may authorize the lessor to sell the forfeited
equipment and recover the proceeds. The amount of any judgment
rendered against the operator must be reduced by the amount of
proceeds received from the sale of the equipment. Any proceeds
received from the sale of the equipment in excess of the reasonable
and necessary cost of remedying the violation are subject to
further order by the court.
       Sec. 91.707.  FEES AND COSTS.  The party who prevails in an
action under Section 91.705 or 91.706 shall be awarded its
reasonable attorneys' fees and court costs.
       Sec. 91.708.  MANDATORY MEDIATION.  (a)  For a suit that
arises from a violation of this subchapter, the court shall refer
the matter to mediation among all parties and by order shall set the
time and place of the mediation.
       (b)  The court shall appoint a mediator if the parties do not
agree on a mediator.
       (c)  Each party shall:
             (1)  participate in the mediation in good faith; and
             (2)  share the mediation fee equally.
       (d)  Except as provided by this section, the following apply
to the appointment of a mediator and the mediation process provided
by this section:
             (1)  Sections 154.023(a) and (b), Civil Practice and
Remedies Code; and
             (2)  Subchapters C and D, Chapter 154, Civil Practice
and Remedies Code.
       Sec. 91.709.  TRIAL.  The court may proceed with the trial on
the matter if the parties are unable to agree after participating in
the ordered mediation.
       SECTION 2.  The Railroad Commission of Texas shall adopt
rules to implement Subchapter P, Chapter 91, Natural Resources
Code, as added by this Act, not later than January 1, 2008.
       SECTION 3.  (a)  This Act may not be construed to revive any
cause of action barred under the law as it existed immediately
before the effective date of this Act brought by a lessor to require
removal of equipment from the leased premises based on a claim of
breach of contract arising out of the relationship between lessor
and lessee or a tort claim arising out of operations on the leased
premises by the operator or a predecessor of the operator.
       (b)  This Act does not impede a lessor from contracting with
a surface owner for enforcement of rights granted by this Act.
       (c)  This Act may not be construed to impose:
             (1)  a duty on a lessor or surface owner to enforce a
violation of this Act; or
             (2)  liability on a lessor or surface owner for failure
to enforce a violation or for agreeing not to enforce a violation.
       SECTION 4.  This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution.  If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2007.