80R9054 SMH-D

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) "Operator" and "well" have the meanings assigned by Section 89.002.

(2) "Well-site equipment" means any production-related equipment or materials specific to a well, including motors, pumps, pump jacks, tanks, tank batteries, separators, compressors, casing, tubing, and rods.

Sec. 91.702. TRANSFER OR REMOVAL OF WELL-SITE EQUIPMENT FOR INACTIVE WELL. (a) This section applies only to a well that has had no reported production, disposal, injection, or other permitted activity for a period of more than 12 months.

(b) Unless the lease provides otherwise, on notice from the lessor, the operator shall:

(1) transfer the well-site equipment to another well-site on the leased premises for use in connection with another well; or

(2) remove the well-site equipment from the leased premises.

(c) Notwithstanding Subsection (b), the operator is not required to transfer or remove the well-site equipment if the operator establishes to the satisfaction of the commission that the operator is reasonably likely to reactivate the well within the next 12 months.

(d) If the operator transfers the well-site equipment to another well-site on the leased premises for use in connection with another well as provided by Subsection (b)(1), the operator must begin using the equipment in connection with the well within the next 12 months.

Sec. 91.703. STANDARDS FOR CONSTRUCTION, OPERATION, AND MAINTENANCE OF CERTAIN GATHERING LINES. The commission shall adopt rules establishing minimum standards for the construction, operation, and maintenance of any gathering line on leased premises that lies beneath a road.

Sec. 91.704. STANDARDS FOR CONSTRUCTION, OPERATION, AND MAINTENANCE OF ELECTRICAL POWER LINES. The commission shall adopt rules establishing minimum standards for the construction, operation, and maintenance of any electrical power lines that are located or to be located on leased premises and are used or to be used by the operator in connection with oil and gas-related activities on the leased premises.

Sec. 91.705. ENFORCEMENT: ACTION FOR DAMAGES OR INJUNCTION; MEDIATION. (a) If an operator violates this subchapter, the lessor may give notice to the operator by certified mail of the violation and request that the operator remedy 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 damages or injunctive relief.

(c) Any damages awarded under Subsection (b) must be determined on the basis of the cost of remedying the violation.

(d) A lessor who prevails in an action under Subsection (b) shall be awarded the lessor's reasonable attorney's fees and court costs.

(e) 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.

(f) The court shall appoint a mediator if the parties do not agree on a mediator.

(g) Each party shall:

(1) participate in the mediation in good faith; and

(2) share the mediation fee equally.

(h) 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.

(i) 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. 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.