81R23229 SMH-F
By: McReynolds H.B. No. 2915
Substitute the following for H.B. No. 2915:
By: Crownover C.S.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. Section 32.002, Natural Resources Code, is
amended by amending Subsections (a) and (b) and adding Subsections
(a-1) and (f) to read as follows:
(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;
[(6)] land owned by the [Texas] Parks and Wildlife
Department; or
(5) [(7)] land owned by the Texas Board of Criminal
Justice.
(a-1) Oil and gas underlying land that is owned by this
state, was acquired to construct or maintain a highway, road,
street, or alley, is located in a producing area, and is subject to
an oil or gas lease may be pooled or unitized only prospectively and
is subject to Sections 32.201, 32.202, and 32.203.
(b) For purposes of Subsection (a-1) [Subsection (a)(4) of
this section], land is located in a producing area if the closest
boundary line of the surface of such land is within 2,500 feet of a
well capable of producing oil or gas in paying quantities [as of
January 1, 1985].
(f) This chapter does not authorize drilling or other
operations on the surface of land during the period in which the
land is used by this state as a highway, road, street, or alley.
SECTION 2. Section 32.203, 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 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 a
standard [the] proration unit under statewide field rules or, if
applicable, the special field rules adopted by the Railroad
Commission of Texas for the field in which [surrounding] the
[draining] well has been completed. 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 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 F, Chapter 32, Natural Resources
Code, is amended by adding Section 32.207 to read as follows:
Sec. 32.207. ADVERTISING FOR BIDS; POOLING. Section 52.076
applies to oil and gas under land owned by this state that was
acquired to construct or maintain a highway, road, street, or alley
in the same manner as that section applies to oil and gas under a
riverbed or channel.
SECTION 4. The change in law made by this Act does not
authorize:
(1) any person, including this state or a local
government, to claim damages relating to production from a legally
permitted and legally producing well the drilling of which was
commenced before the effective date of this Act; or
(2) a state or local taxing authority to reallocate
liability for severance or ad valorem taxes or increase the amount
of those taxes imposed based on production from or the value
attributable to production from a legally permitted and legally
producing well the drilling of which was commenced before the
effective date of this Act.
SECTION 5. This Act takes effect September 1, 2009.