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A BILL TO BE ENTITLED
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AN ACT
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relating to the foreclosure sale of property subject to oil or gas |
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lease. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subtitle B, Title 5, Property Code, is amended by |
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adding Chapter 66 to read as follows: |
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CHAPTER 66. SALE OF PROPERTY SUBJECT TO OIL OR GAS LEASE |
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Sec. 66.001. SALE OF PROPERTY SUBJECT TO OIL OR GAS LEASE. |
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(a) Notwithstanding any other law, an oil or gas lease covering |
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real property subject to a security interest that has been |
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foreclosed remains in effect after the foreclosure sale if the oil |
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or gas lease has not terminated or expired on its own terms and: |
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(1) was executed and recorded in the real property |
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records of the county before the date the security interest was |
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recorded; or |
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(2) was executed and recorded in the real property |
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records of the county after the date the security interest was |
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recorded but before the foreclosure sale. |
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(b) Any royalty payment due to the owner of the real |
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property under an oil or gas lease shall be paid to the purchaser of |
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the foreclosed real property. |
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(c) The lessee of the oil or gas lease shall indemnify the |
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purchaser and any mortgagee of the foreclosed real property from |
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actual damages resulting from the lessee's operations conducted |
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under the oil or gas lease. |
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(d) If an oil or gas lease is executed and recorded in the |
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real property records of the county after the date a security |
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interest in the affected real property is recorded and the affected |
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real property is subsequently sold in a foreclosure sale, the |
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foreclosure sale terminates and extinguishes the lessee's right to |
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use the surface of the real property under the oil or gas lease. |
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(e) A subordination agreement between a lessee of an oil or |
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gas lease and a mortgagee of real property controls over any |
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conflicting provision of this section. |
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SECTION 2. Chapter 66, Property Code, as added by this Act, |
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applies only with respect to a foreclosure sale for which the notice |
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of sale is given under Section 51.002, Property Code, on or after |
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the effective date of this Act or a judicial foreclosure for which |
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the judicial foreclosure action commenced on or after the effective |
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date of this Act. |
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SECTION 3. This Act takes effect January 1, 2016. |