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A BILL TO BE ENTITLED
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AN ACT
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relating to the rights of an owner of the surface estate in land in |
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connection with oil and gas exploration and production operations; |
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providing administrative penalties. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. 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 OWNER PROTECTIONS |
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SUBCHAPTER A. GENERAL PROVISIONS |
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Sec. 93.001. DEFINITIONS. In this chapter: |
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(1) "Agricultural use" has the meaning assigned by |
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Section 23.51, Tax Code. |
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(2) "Commission" means the Railroad Commission of |
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Texas. |
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(3) "Mineral estate" means an estate in or ownership |
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of all or part of the minerals underlying a tract of land. |
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(4) "Oil and gas developer" means a person who |
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acquires a mineral estate or a mineral lease for the purpose of |
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extracting or using oil and gas from a tract of land. |
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(5) "Oil and gas operations" means the following |
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activities to the extent they require entry on the surface of a |
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tract of land: |
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(A) oil and gas exploration activities; and |
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(B) oil and gas drilling, production, and |
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completion operations. |
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(6) "Surface estate" means an estate in or ownership |
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of the surface of a tract of land. |
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(7) "Surface owner" means a person who holds record |
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title to the surface of a tract of land. |
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SUBCHAPTER B. NOTICE AND ENTRY REQUIREMENTS |
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Sec. 93.051. NOTICE OF SURVEYING OR INSPECTION. (a) An oil |
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and gas developer shall give each surface owner written notice that |
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the oil and gas developer plans to begin surveying or inspecting the |
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property not later than the fifth business day before the date the |
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surveying or inspecting begins. |
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(b) An oil and gas developer shall give each surface owner |
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written notice that the oil and gas developer plans to begin |
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constructing improvements or conducting oil and gas operations on |
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the property not later than the 30th day before the date the |
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construction or operations begin. The notice must: |
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(1) sufficiently describe the oil and gas operations |
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on the land, the schedule for conducting the operations, and the |
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land to be affected by the operations to enable the surface owner to |
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evaluate the effect of the operations on the surface owner's use of |
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the land; |
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(2) include a statement advising the surface owner of |
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the surface owner's rights under this chapter; |
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(3) include the name, address, telephone number, and, |
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if available, facsimile number and e-mail address of the developer |
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and the developer's authorized representatives; and |
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(4) include a proposed surface use agreement provided |
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under Section 93.104 that contains, to the extent known, |
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information relating to: |
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(A) the placement, specifications, and design of |
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well pads, gathering pipelines, and roads to be constructed for the |
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operations; |
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(B) the terms of ingress and egress on the land |
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for the operations; |
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(C) the placement, construction, and maintenance |
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of all pits and equipment to be used for the operations; |
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(D) the use and impoundment of water on the |
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surface of the land; |
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(E) the removal and restoration of plant life; |
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(F) changes to the drainage of surface water; |
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(G) any proposed measures to control erosion, |
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rainwater runoff, noise, dust, traffic, litter, trespass, and other |
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interference with the use of the surface estate; and |
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(H) measures proposed to restore the surface |
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estate to the condition in which it existed before the operations |
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began. |
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(c) Notice under this section: |
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(1) must be given by certified mail or hand delivery to |
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each surface owner at the surface owner's address as shown by the |
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records of the county clerk or county tax assessor-collector at the |
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time the notice is given; and |
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(2) is considered to have been received five days |
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after mailing and immediately on hand delivery. |
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Sec. 93.052. ENTRY ON LAND; SECURITY REQUIRED. (a) Except |
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as provided by Subsection (b), an oil and gas developer may not |
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enter the land to conduct oil and gas operations until the oil and |
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gas developer enters into a written agreement for the payment of |
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compensation for damages with each surface owner. |
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(b) An oil and gas developer may enter the land to begin |
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construction or oil and gas operations without entering into a |
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surface use agreement with each surface owner if: |
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(1) 30 days have passed since each surface owner |
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received notice as provided by Section 93.051(b); and |
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(2) the developer deposits in a banking institution |
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for the benefit of the surface owner: |
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(A) a surety bond or other equivalent security in |
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an amount of $10,000 for each well location on the land; or |
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(B) a blanket surety bond or other equivalent |
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security in an amount of $25,000 provided that: |
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(i) the bond or other security is readily |
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payable to a surface owner awarded damages under this chapter; and |
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(ii) if any portion of the bond or security |
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has been used to pay a surface owner, the developer shall post |
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additional security so that the total security posted is $25,000. |
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(c) A bond or security posted in accordance with Subsection |
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(b)(2)(A) may be released only when: |
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(1) the surface owner provides notice to the holder of |
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the bond or security that the developer has paid all required |
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compensation for damages; |
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(2) the surface owner and the developer have executed |
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a surface use agreement or otherwise agree that the security should |
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be released; |
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(3) all damages awarded under a nonappealable judgment |
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have been paid; or |
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(4) all wells on the land have been plugged and |
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abandoned for a period of at least six years and the developer has |
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not conducted oil and gas operations on the land during that period. |
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(d) A bond or security posted in accordance with Subsection |
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(b)(2)(B) may not be released until six years after the developer |
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files with the holder of the bond or security a statement certified |
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by the Railroad Commission of Texas that according to the |
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commission's records the developer does not conduct or hold permits |
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for oil and gas operations in this state. |
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Sec. 93.053. EXEMPTION FOR EMERGENCY. Notwithstanding any |
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other provision of this chapter, an oil and gas developer may enter |
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the land of a surface owner to protect human health, safety, or the |
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environment. |
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SUBCHAPTER C. DAMAGES |
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Sec. 93.101. APPLICABILITY. A surface owner is entitled to |
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damages as provided by this subchapter regardless of whether: |
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(1) the surface estate of the land has been severed |
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from the mineral estate; or |
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(2) the surface owner is the person who executed the |
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instrument that gave the oil and gas developer the right to conduct |
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oil and gas operations on the land. |
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Sec. 93.102. REMEDIES CUMULATIVE. The remedies provided by |
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this subchapter are in addition to any other remedies provided by |
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law. |
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Sec. 93.103. RIGHT TO PAYMENT FOR DAMAGES. (a) An oil and |
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gas developer shall pay each surface owner an amount equal to the |
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amount of anticipated and foreseeable damages sustained by the |
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surface owner for the following, to the extent the damages are |
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caused by oil and gas operations on the surface owner's land: |
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(1) loss of income derived from agricultural use of |
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the land; |
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(2) reduction in value of the land; |
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(3) reduction in value of improvements to the land; |
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(4) loss of access to the surface of the land; and |
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(5) loss of the use of the surface of the land. |
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(b) The amount of compensation for damages under Subsection |
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(a) may be determined by any formula agreed to by the oil and gas |
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developer and the surface owner. |
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(c) A surface owner may assign the surface owner's right to |
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compensation for damages described by Subsection (a) to a tenant of |
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the surface owner. |
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Sec. 93.104. SURFACE USE AGREEMENT FOR PAYMENT OF DAMAGES. |
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(a) At the time notice required by Section 93.051 is given to a |
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surface owner, the oil and gas developer shall give to the surface |
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owner a written offer to pay compensation for damages as provided by |
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Section 93.103. |
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(b) The surface owner may accept or reject the offer. An |
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acceptance of the offer must be in writing. A failure to accept a |
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proposed agreement within 20 days of receipt of the agreement is |
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deemed to be a rejection of the agreement by the surface owner. |
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SUBCHAPTER D. RESTORATION OF SURFACE REQUIRED |
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Sec. 93.151. RESTORATION OF SURFACE. After the cessation |
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of oil and gas operations, an oil and gas developer shall restore |
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the surface to a condition that is substantially the same as existed |
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before the developer began operations. |
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SUBCHAPTER E. ENFORCEMENT |
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Sec. 93.201. ADMINISTRATIVE PENALTY. The commission may |
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impose an administrative penalty in an amount and in the manner |
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provided by Sections 81.0531-81.0534 on a person who violates this |
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chapter. |
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Sec. 93.202. CALCULATION OF PENALTIES AND COSTS IN CIVIL |
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SUIT. In a civil action brought by a surface owner or oil and gas |
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developer alleging a violation of this chapter the prevailing party |
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may be awarded: |
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(1) attorney's fees and costs if: |
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(A) the oil and gas developer conducts oil and |
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gas operations that exceed the scope provided for by a surface use |
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agreement entered into with the surface owner or conducts oil and |
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gas operations without providing notice under Section 93.051 or |
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depositing a bond or other security under Section 93.052; or |
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(B) the surface owner does not exercise good |
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faith in complying with the terms of a surface use agreement entered |
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into with an oil and gas developer; or |
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(2) attorney's fees, costs, and treble damages if the |
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court finds that: |
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(A) either party wilfully and knowingly violates |
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a surface use agreement entered into by the parties; or |
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(B) the developer wilfully and knowingly |
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conducts oil and gas operations without providing notice under |
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Section 93.051 or depositing a bond or other security under Section |
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93.052. |
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SECTION 2. (a) Except as provided by Subsection (b) of this |
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section, the change in law made by this Act applies only to |
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liability for damage to the surface of land caused by the use of the |
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surface for oil and gas operations on or after the effective date of |
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this Act. Liability for damage to the surface of land caused by the |
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use of the surface for oil and gas operations before the effective |
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date of this Act is governed by the law in effect on the date the |
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damage was caused, and that law is continued in effect for that |
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purpose. |
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(b) Section 93.151, Natural Resources Code, as added by this |
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Act, applies to any well that is not plugged and abandoned on or |
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before the effective date of this Act. |
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SECTION 3. This Act takes effect September 1, 2013. |