Texas House Bill HB2087

Texas 2009 - 81st Regular

• Out of House Committee: 5/4/09

Caption

Relating to the state's statutory and contractual liens to secure the payment of unpaid royalty and other amounts due under oil and gas leases of state land.

Impact

The amendments proposed by HB2087 enhance the state's ability to enforce its claims regarding unpaid royalties, thus reinforcing financial accountability among lessees operating on state land. Furthermore, the bill allows the commissioner to temporarily suspend the enforcement of these liens under specific extenuating circumstances where the lessee has not received payment from the initial purchaser of the produced oil or gas. This flexibility is intended to address issues causing payment delays without subjecting the lessee to undue penalties.

Summary

House Bill 2087 introduces significant amendments to the Texas Natural Resources Code specifically regarding the state's statutory and contractual liens related to oil and gas leases on state land. The bill establishes that by accepting a lease, the lessee grants the state an express contractual lien on all oil and gas extracted from the lease-area, as well as any proceeds derived from the sale of such resources. This provision ensures that the state has a secured interest in the assets produced under the lease, aimed at safeguarding the collection of unpaid royalties and other amounts due.

Contention

While the bill aims to strengthen the financial framework surrounding oil and gas leases, it could spark debate among stakeholders in the oil industry. Concerns may arise regarding the balance of power between the state and lessees, with allegations that stringent lien requirements may create an unwelcoming environment for potential investments in the sector. Critics may argue that the temporary suspension clause could lead to inconsistent enforcement, potentially impacting the state’s revenue stability.

Notable_points

Overall, HB2087 seeks to modernize the liens system for oil and gas operations on state land, ensuring that the state maximizes its returns from these leases while also providing some leeway for lessees facing unexpected financial challenges. Discussions around HB2087 will likely involve evaluations on its implications for the natural resources sector and its alignment with Texas's economic development goals.