By: McReynolds H.B. No. 2915
A BILL TO BE ENTITLED
AN ACT
relating to oil and gas operations in connection with certain state
land.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 32, Natural Resources
Code, is amended to read as follows:
SECTION 32.002. Application of Chapter.
(a) This chapter does not apply to:
(1) land dedicated by the constitution or a law of this
state to The University of Texas System, land donated by a will or
instrument in writing or otherwise to The University of Texas
System, as trustee, for a scientific, educational, or other
charitable or public purpose, or any other land under the control of
the Board of Regents of The University of Texas System;
(2) land whose title is vested in the state for the use
and benefit of any part of The Texas A&M University System or land
under the control of the Board of Regents of The Texas A&M
University System;
(3) minerals subject to lease under Subchapter F,
Chapter 52, of this code, commonly known as the Relinquishment Act,
and Subchapters B and C, Chapter 53, of this code;
(4) [oil and gas underlying land owned by the state
that was acquired to construct or maintain a highway, road, street,
or alley, which is located in a producing area, unless the oil or
gas is leased for the specific purpose of drilling a horizontal
well;
[(5)] oil and gas underlying land owned by the state
that was acquired to construct or maintain a highway, road, street,
or alley if the Texas Transportation Commission has determined that
such right-of-way is no longer needed for use by citizens as a road
pursuant to Section 202.021, Transportation Code.
(5) [(6)] land owned by the Texas Parks and Wildlife
Department; or
(6) [(7)] land owned by the Texas Board of Criminal
Justice.
SECTION 2. Subchapter F, Chapter 32, Natural Resources
Code, is amended to read as follows:
Sec. 32.203. COMPENSATORY ROYALTY. Compensatory royalty
shall be paid to the state on any lease offered and granted under
Section 32.201 of this code if the lease is not being held by
production on the tract, by production from a pooled unit, or by
payment of shut-in royalties in accordance with the terms of the
lease, and if oil or gas is sold and delivered in paying quantities
from a well located on a proration unit adjacent to [within 2,500
feet of] the leased premises and completed in a producible
reservoir underlying the state lease or in any case in which
drainage is occurring. Such compensatory royalty shall be paid at
the royalty rate provided in the state lease based on the value of
production from the well as provided in the lease on which such well
is located. The compensatory royalty shall be paid in the same
proportion that the acreage of the state lease has to the acreage of
the state lease plus the acreage of the standard proration unit
surrounding the draining well. The compensatory royalty is to be
paid monthly to the commissioner on or before the last day of the
month next succeeding the month in which the oil or gas is sold and
delivered from the well causing the drainage or from the well
located on a proration unit adjacent to [within 2,500 feet of] the
leased premises and completed in a producible reservoir under the
state lease. Notwithstanding anything herein to the contrary,
compensatory royalty payable under this section shall be no less
than an amount equal to double the annual rental payable under the
state lease. Payment of compensatory royalty shall maintain the
state lease in force and effect for so long as such payments are
made as provided in this section.
SECTION 3. Subchapter C, Chapter 52, Natural Resources Code
is amended to read as follows:
Section 52.076. DUTY TO ADVERTISE
(a) The board may:
(1) advertise for bids to lease riverbeds, [and]
channels, and highway, road, street, or alley rights-of-way for oil
and gas development;
(2) advertise for bids to contract to develop the oil
or gas under riverbeds, [and] channels, and highway, road, street,
or alley rights-of-way on consideration involving compensation
with oil and gas or money so that the state will receive a portion of
the oil and gas as it is produced or advanced royalties paid in
money;
(3) advertise for bids to purchase oil and gas in place
under riverbeds, [and] channels, and highway, road, street, or
alley rights-of-way without requiring mineral development; and
(4) pool or bring an action to force pool unleased
riverbeds, [and] channels, and highway, road, street, or alley
rights-of-way.
(b) The board shall advertise that the board will receive
bids and award the right to lease, develop, or purchase under this
section in the same manner as provided in Subchapter D, Chapter 32,
of this code and Subchapter B of this chapter.
SECTION 4. Sections 32.002(b) and (c), Natural Resources
Code, are repealed.
SECTION 5. This Act takes effect September 1, 2009.