83R26599 JAM-D
By: Keffer H.B. No. 2590
Substitute the following for H.B. No. 2590:
By: Burnam C.S.H.B. No. 2590
A BILL TO BE ENTITLED
AN ACT
relating to the foreclosure sale of property subject to oil or gas
lease.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 5, Property Code, is amended by
adding Chapter 66 to read as follows:
CHAPTER 66. SALE OF PROPERTY SUBJECT TO OIL OR GAS LEASE
Sec. 66.001. SALE OF PROPERTY SUBJECT TO OIL OR GAS LEASE.
(a) Notwithstanding any other law, an oil or gas lease covering
real property subject to a security interest that has been
foreclosed remains in effect after the foreclosure sale if the oil
or gas lease has not terminated or expired on its own terms and:
(1) was executed and recorded in the real property
records of the county before the date the security interest was
recorded; or
(2) was executed and recorded in the real property
records of the county after the date the security interest was
recorded but before the foreclosure sale.
(b) Any royalty payment due to the owner of the real
property under an oil or gas lease shall be paid to the purchaser of
the foreclosed real property.
(c) The lessee of the oil or gas lease shall indemnify the
purchaser and any mortgagee of the foreclosed real property from
actual damages resulting from the lessee's operations conducted
pursuant to the oil or gas lease.
(d) If an oil or gas lease is executed and recorded in the
real property records of the county after the date a security
interest in the affected real property is recorded and the affected
real property is subsequently sold in a foreclosure sale, the
foreclosure sale terminates and extinguishes the lessee's right to
use the surface of the real property pursuant to the oil or gas
lease.
(e) A subordination agreement between a lessee of an oil or
gas lease and a mortgagee of real property controls over any
conflicting provision of this section.
SECTION 2. Chapter 66, Property Code, as added by this Act,
applies only with respect to a foreclosure sale for which the notice
of sale is given under Section 51.002, Property Code, on or after
the effective date of this Act or a judicial foreclosure for which
the judicial foreclosure action commenced on or after the effective
date of this Act.
SECTION 3. This Act takes effect January 1, 2014.