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A BILL TO BE ENTITLED
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AN ACT
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relating to oil and gas operations in connection with certain state |
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land. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 32.002, Natural Resources Code, is |
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amended by amending Subsections (a) and (b) and adding Subsections |
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(a-1) and (f) to read as follows: |
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(a) This chapter does not apply to: |
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(1) land dedicated by the constitution or a law of this |
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state to The University of Texas System, land donated by a will or |
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instrument in writing or otherwise to The University of Texas |
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System, as trustee, for a scientific, educational, or other |
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charitable or public purpose, or any other land under the control of |
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the Board of Regents of The University of Texas System; |
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(2) land whose title is vested in the state for the use |
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and benefit of any part of The Texas A&M University System or land |
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under the control of the Board of Regents of The Texas A&M |
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University System; |
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(3) minerals subject to lease under Subchapter F, |
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Chapter 52, [of this code,] commonly known as the Relinquishment |
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Act, and Subchapters B and C, Chapter 53[, of this code]; |
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(4) [oil and gas underlying land owned by the state
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that was acquired to construct or maintain a highway, road, street,
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or alley, which is located in a producing area, unless the oil or
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gas is leased for the specific purpose of drilling a horizontal
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well;
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[(5)
oil and gas underlying land owned by the state
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that was acquired to construct or maintain a highway, road, street,
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or alley if the Texas Transportation Commission has determined that
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such right-of-way is no longer needed for use by citizens as a road
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pursuant to Section 202.021, Transportation Code;
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[(6)] land owned by the [Texas] Parks and Wildlife |
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Department; or |
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(5) [(7)] land owned by the Texas Board of Criminal |
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Justice. |
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(a-1) Oil and gas underlying land that is owned by this |
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state, was acquired to construct or maintain a highway, road, |
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street, or alley, is located in a producing area, and is subject to |
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an oil or gas lease may be pooled or unitized only prospectively and |
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is subject to Sections 32.201, 32.202, and 32.203. |
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(b) For purposes of Subsection (a-1) [Subsection (a)(4) of
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this section], land is located in a producing area if the closest |
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boundary line of the surface of such land is within 2,500 feet of a |
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well capable of producing oil or gas in paying quantities [as of
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January 1, 1985]. |
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(f) This chapter does not authorize drilling or other |
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operations on the surface of land during the period in which the |
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land is used by this state as a highway, road, street, or alley. |
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SECTION 2. Section 32.203, Natural Resources Code, is |
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amended to read as follows: |
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Sec. 32.203. COMPENSATORY ROYALTY. Compensatory royalty |
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shall be paid to the state on any lease offered and granted under |
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Section 32.201 of this code if the lease is not being held by |
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production on the tract, by production from a pooled unit, or by |
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payment of shut-in royalties in accordance with the terms of the |
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lease, and if oil or gas is sold and delivered in paying quantities |
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from a well located within 2,500 feet of the leased premises and |
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completed in a producible reservoir underlying the state lease or |
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in any case in which drainage is occurring. Such compensatory |
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royalty shall be paid at the royalty rate provided in the state |
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lease based on the value of production from the well as provided in |
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the lease on which such well is located. The compensatory royalty |
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shall be paid in the same proportion that the acreage of the state |
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lease has to the acreage of the state lease plus the acreage of a |
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standard [the] proration unit under statewide field rules or, if |
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applicable, the special field rules adopted by the Railroad |
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Commission of Texas for the field in which [surrounding] the |
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[draining] well has been completed. The compensatory royalty is to |
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be paid monthly to the commissioner on or before the last day of the |
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month next succeeding the month in which the oil or gas is sold and |
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delivered from the well [causing the drainage or from the well
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located within 2,500 feet of the leased premises and completed in a
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producible reservoir under the state lease]. Notwithstanding |
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anything herein to the contrary, compensatory royalty payable under |
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this section shall be no less than an amount equal to double the |
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annual rental payable under the state lease. Payment of |
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compensatory royalty shall maintain the state lease in force and |
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effect for so long as such payments are made as provided in this |
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section. |
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SECTION 3. Subchapter F, Chapter 32, Natural Resources |
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Code, is amended by adding Section 32.207 to read as follows: |
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Sec. 32.207. ADVERTISING FOR BIDS; POOLING. Section 52.076 |
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applies to oil and gas under land owned by this state that was |
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acquired to construct or maintain a highway, road, street, or alley |
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in the same manner as that section applies to oil and gas under a |
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riverbed or channel. |
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SECTION 4. The change in law made by this Act does not |
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authorize: |
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(1) any person, including this state or a local |
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government, to claim damages relating to production from a legally |
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permitted and legally producing well the drilling of which was |
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commenced before the effective date of this Act; or |
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(2) a state or local taxing authority to reallocate |
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liability for severance or ad valorem taxes or increase the amount |
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of those taxes imposed based on production from or the value |
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attributable to production from a legally permitted and legally |
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producing well the drilling of which was commenced before the |
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effective date of this Act. |
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SECTION 5. This Act takes effect September 1, 2009. |