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A BILL TO BE ENTITLED
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AN ACT
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relating to establishing certain rights of an owner of the surface |
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estate in land who does not own any interest in the mineral estate |
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in the land in connection with the exploration for and production of |
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the minerals. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. |
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(a) The legislature determines that: |
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(1) tracts in which the surface and minerals have not |
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been severed are becoming scarce; |
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(2) it has become difficult for an owner of the surface |
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estate in land to locate all of the owners of the mineral estate in |
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the land in order to negotiate contracts for surface use |
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restrictions; |
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(3) the surface of land is often harmed by the |
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development of the mineral estate in the land, and the surface |
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estate owner is not required to be compensated for the damage to the |
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surface; |
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(4) there is no statutory requirement that mineral |
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development equipment and related improvements be removed and that |
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the surface of land be restored after mineral development |
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operations have ceased; |
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(5) the circumstances described by this subsection |
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impede the development of land in this state to its fullest and most |
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efficient use; and |
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(6) it is necessary for the legislature to exercise |
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its authority under Section 59, Article XVI, Texas Constitution, to |
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ensure the proper and orderly development of the surface and |
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mineral estates in land in this state. |
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(c) For the reasons stated in Subsection (a) of this |
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section, the legislature intends that: |
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(1) each owner of the surface estate in land who does |
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not own any interest in the mineral estate in the land receive |
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compensation for damages to the surface and the use of the surface |
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in connection with mineral exploration and development; and |
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(2) mineral development equipment and related |
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improvements be removed and the surface tract be restored after |
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mineral development operations in, on or under the surface tract |
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have ceased. |
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SECTION 2. Subtitle B, Title 3, Natural Resources Code, is |
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amended by adding Chapter 93 to read as follows: |
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CHAPTER 93. SURFACE PROTECTIONS |
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Sec. 93.001. DEFINITIONS. In this chapter: |
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(1) "Commission" means the Railroad Commission of |
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Texas. |
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(2) "Damage fee" means a one-time fee paid to a surface |
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tract owner by a mineral interest user as provided under this |
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chapter for all anticipated damages to the surface tract caused by |
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the actions of the mineral interest user in developing the minerals |
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in, on, or under the surface tract other than damages resulting from |
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actions that are grossly negligent or intentional. |
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(3) "Mineral development improvements" means |
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equipment and improvements installed or constructed by or on behalf |
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of a mineral interest user on a surface tract, including drilling |
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pad sites, pipelines, compressor stations, roads to drilling pad |
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sites, tanks, and other incidental equipment and improvements that |
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a mineral interest user may use to explore for and produce minerals |
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in, on, or under a surface tract. |
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(4) "Mineral development site" means a surface area on |
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a surface tract where mineral development improvements are located |
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that a mineral interest user may use to explore for and produce |
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minerals in, on, or under a surface tract. |
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(5) "Mineral interest user" means a person holding a |
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possessory mineral interest who engages in exploration for or the |
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development of minerals in, on, or under a surface tract. |
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(6) "Possessory mineral interest" means a mineral |
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interest that includes the right to use a surface tract for the |
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exploration for and production of minerals. |
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(7) "Surface tract" means the surface estate of a |
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tract of land owned by a surface tract owner on which a mineral |
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development site has been or may be located. |
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(8) "Surface tract owner" means an owner of a surface |
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tract who does not own an interest in the minerals in, on, or under |
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the land from which the surface tract has been severed. |
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(9) "Use fee" means an annual fee paid to a surface |
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tract owner by a mineral interest user as provided under this |
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chapter for the use of the surface tract and the placement of |
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mineral development improvements on the tract until any well |
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drilled on a mineral development site on the surface tract is |
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plugged and abandoned. |
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Sec. 93.002. APPLICABILITY. (a) This chapter applies only |
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to a surface tract. |
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(b) This chapter does not apply to land in which the |
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minerals are owned by this state. |
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Sec. 93.003. RULES. The commission shall adopt rules as |
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necessary for the implementation of this chapter, including rules |
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governing: |
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(1) the contents of an application under Section |
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93.005(b); |
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(2) the procedure for conducting a hearing under |
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Section 93.005(d); |
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(3) the method for determining the appropriate amount |
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of a damage fee and a use fee under Section 93.005(e); and |
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(4) the contents of an affidavit under Section |
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93.007(d). |
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Sec. 93.004. NOTICE OF INTENT TO ENTER SURFACE TRACT. Not |
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later than the 20th day before the date a mineral interest user |
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begins using a surface tract, the mineral interest user must mail |
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notice to each surface tract owner at the surface tract owner's last |
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known mailing address of the mineral interest user's intention to |
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enter the surface tract in order to explore for and produce minerals |
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in, on, or under the surface tract. The notice must include the |
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proposed location of any mineral development site. |
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Sec. 93.005. DETERMINATION OF AMOUNT OF DAMAGE FEE AND USE |
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FEE. (a) After the mineral interest user provides the notice |
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required by Section 93.004 to a surface tract owner, the mineral |
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interest user and the surface tract owner shall make a good faith |
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attempt to agree to the amount of a damage fee and a use fee to be |
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paid to the surface tract owner by the mineral interest user. |
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(b) If the mineral interest user and the surface tract owner |
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are unable to reach an agreement under Subsection (a), the mineral |
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interest user or the surface tract owner may file an application |
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with the commission requesting that the commission determine the |
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amount of the damage fee and the use fee. |
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(c) An application under Subsection (b) must be accompanied |
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by: |
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(1) an application fee set by the commission in an |
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amount sufficient to cover the cost of administering this chapter; |
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(2) a survey showing the boundaries of the surface |
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tract and the proposed location of any mineral development site; |
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and |
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(3) if the application is filed by the mineral |
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interest user, a description of all anticipated mineral development |
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improvements to be installed or constructed on the surface tract. |
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(d) The commission shall, on notice to the surface tract |
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owner and the mineral interest user, conduct a hearing on the |
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application. The surface tract owner and the mineral interest user |
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may present evidence at the hearing. |
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(e) Following the hearing on the application, the |
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commission shall issue an order determining: |
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(1) the amount of the damage fee and the use fee to be |
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paid to the surface tract owner by the mineral interest user; and |
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(2) any other matter the commission considers |
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necessary or appropriate in connection with the determination of |
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the amount of the fees. |
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(f) In determining the amount of the damage fee, the |
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commission shall consider the actual and anticipated damages to the |
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surface tract from the date of the filing of the application under |
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Subsection (b). In determining the amount of the use fee, the |
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commission shall consider the past and current use of the surface |
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tract and the surface tract owner's interest in the surface tract. |
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(g) The surface tract owner or the mineral interest user may |
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appeal the determination of the commission as provided by law. |
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(h) Either the surface tract owner or the mineral interest |
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user may file a certified copy of the commission's order issued |
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under Subsection (e) with the clerk of the county in which the |
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surface tract is located. |
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(i) The mineral interest user must pay each surface tract |
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owner a separate damage fee and use fee in connection with each oil |
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or gas well drilled or other mineral development operation |
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conducted on the surface tract. |
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Sec. 93.006. USE OF SURFACE TRACT. (a) The mineral |
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interest user may enter the surface tract and use it for the |
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exploration for and production of minerals in accordance with the |
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mineral interest user's contractual rights and applicable law |
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following: |
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(1) the payment by the mineral interest user to each |
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surface tract owner of the amount of the damage fee and the use fee |
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agreed to by the mineral interest user and the surface tract owner |
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under Section 93.005(a), if applicable; or |
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(2) the filing of an application under Section |
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93.005(b), if applicable. |
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(b) Notwithstanding Subsection (a)(2), on the issuance of |
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an order by the commission under Section 93.005(e) determining the |
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amount of the damage fee and the use fee, the mineral interest user |
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must suspend operations on the surface tract until the mineral |
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interest user pays each surface tract owner the amount of the damage |
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fee and the use fee as determined by the commission. |
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(c) If the mineral interest user fails to pay a surface |
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tract owner the amount of the damage fee or the use fee on or before |
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the 10th day after the date the mineral interest user and the |
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surface tract owner enter into an agreement under Section 93.005(a) |
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or the commission issues an order with respect to the surface tract |
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owner under Section 93.005(e), the surface tract owner may: |
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(1) prohibit the mineral interest user from using the |
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surface tract; and |
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(2) charge the mineral interest user interest on the |
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unpaid amount of the damage fee or use fee at an annual rate of 10 |
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percent per annum. |
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(d) Not later than the 30th day after the date the mineral |
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interest user ceases mineral development operations on a mineral |
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development site, the mineral interest user shall: |
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(1) remove all mineral development improvements in |
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connection with the mineral development site; and |
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(2) restore the mineral development site to |
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substantially the condition it was in before the mineral interest |
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user began using the site. |
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(e) If the mineral interest user fails to comply with |
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Subsection (d), a surface tract owner may: |
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(1) remove the mineral development improvements from |
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the mineral development site and restore the site as provided by |
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Subsection (d); and |
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(2) charge the mineral interest user for all costs |
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incurred in connection with the actions described by Subdivision |
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(1). |
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(f) The mineral interest user shall pay the amount charged |
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under Subsection (e)(2) not later than the 10th day after the date |
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the mineral interest user receives the surface tract owner's |
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invoice. If the mineral interest user fails to pay the amount |
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charged by the deadline prescribed by this subsection, the unpaid |
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amount incurs interest at an annual rate of 10 percent per annum |
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until paid. |
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(g) The mineral interest user may not use any groundwater |
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under or surface water on the surface tract in connection with a |
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mineral development site or mineral development improvements |
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without the express prior written consent of the surface tract |
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owner. |
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(h) The mineral interest user's use of the surface tract in |
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connection with the exploration for and production of minerals must |
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be reasonable, taking into consideration the use of the surface |
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tract by each surface tract owner. The mineral interest user must |
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reasonably accommodate any use of the surface tract by a surface |
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tract owner. |
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Sec. 93.007. LIEN. (a) A surface tract owner has the right |
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to claim a lien to secure the payment of the damage fee, the use fee, |
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and all costs incurred by the surface tract owner in taking the |
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actions described by Section 93.006(e)(1). The inception of the |
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lien occurs on the 10th day after (i) the date the damage fee and/or |
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use fee are due under Section 93.006(c), or (ii) the date of the |
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surface tract owner's invoice to the mineral interest user under |
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Section 93.006(f) regarding the costs incurred by the surface tract |
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owner in taking the actions described by Section 93.006(e)(1). |
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(b) The following property is subject to the lien: |
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(1) any lease of the minerals in, on, or under the |
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surface tract in which the mineral interest user has an interest; |
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(2) the mineral development improvements placed on the |
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surface tract by the mineral interest user; and |
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(3) any other material, machinery, or supplies used |
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for mineral activities on the surface tract and owned by the mineral |
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interest user. |
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(c) The lien does not: |
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(1) attach to the fee title to the surface tract or the |
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minerals in, on, or under the surface tract; or |
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(2) affect any encumbrance or voluntary or involuntary |
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lien that attached to any lease of the minerals in, on, or under the |
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surface tract before the lien's inception. |
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(d) To claim the lien, a surface tract owner must file an |
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affidavit with the county clerk of the county in which the surface |
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tract is located not later than the 180th day after the date the |
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mineral interest user fails to timely pay the surface tract owner |
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the damage fee or use fee or take the actions described by Section |
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93.006(d). |
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(e) A mineral interest user may not sell property, including |
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mineral development improvements, to which the lien has attached or |
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remove the property from the surface tract unless the surface tract |
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owner consents in writing. |
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(f) The surface tract owner must enforce the lien by a suit |
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to foreclose the lien, which must be filed on or before two (2) |
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years after the date the affidavit described in Section 93.007(d) |
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is filed for record with the county clerk in the county where the |
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surface tract is located. |
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(g) A holder of a prior encumbrance or lien on a lease of the |
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minerals in, on, or under the surface tract is not a necessary party |
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to a suit to foreclose the lien. |
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(h) On the foreclosure of the lien, the surface tract owner: |
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(1) is entitled to possession of the property subject |
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to the lien regardless of where it is found; and |
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(2) may sell the property subject to the lien to |
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satisfy the debt secured by the lien. |
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(i) Termination of a lease owned by the mineral interest |
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user of the minerals in, on, or under the surface tract does not |
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affect a lien created hereunder that attached to mineral |
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development improvements located on the surface tract before the |
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lease terminated. |
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(j) If a surface tract owner brings a suit to foreclose a |
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lien under this section, the court may include in any final judgment |
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in favor of the surface tract owner an award of costs and reasonable |
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and necessary attorney's fees. |
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SECTION 3. The Railroad Commission of Texas shall adopt |
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rules under Chapter 93, Natural Resources Code, as added by this |
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Act, not later than December 1, 2011. |
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SECTION 4. This Act takes effect September 1, 2011. |