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85th Legislature – Legislation of Interest to Land and Mineral Owners

The Texas legislative session recently ended without any major reforms of the Texas Railroad Commission. Bills to reform the Commission failed in the previous two legislative sessions, after Sunset Commission reports recommending significant changes in the structure of the RRC. This session, the Legislature had no heart for tackling those reforms and instead gave the RRC renewed life through September 1, 2029.

The bill authorizing continuance of the RRC, HB 1818, includes a provision requiring the RRC to track its oil and gas monitoring and enforcement activities and publish an annual report on its website. But a bill (HB 247 by Anchia) to require the RRC to publish on its website details of violations and enforcement actions by operators, searchable by county, operator and well, failed to pass. As did a bill to change the RRC’s name to the Texas Energy Commission. Another bill by Anchia, HB 464, restricting the time periods when Commissioners could accept political contributions and prohibiting contributions by companies with contested cases before the RRC, also died. HB 567, which would have increased penalties for operator violations of RRC rules and required the RRC to allow public input on its penalty guidelines, failed to get out of committee.

The Legislature’s budget bill includes an appropriation of $38.2 million from the state’s rainy day fund for plugging of orphaned oil and gas wells.  The RRC website lists more than 5800 orphaned wells in Texas – wells for which no operator can be found who can be made responsible for plugging the well.

Two bills sought by the Texas Land & Mineral Owners’ Association were enacted:

Some operators have recently insisted that royalty owners obtain their check details – the information on production and revenues that is required by statute to accompany royalty payments – by downloading that information from a website, using a password. HB 129, by Craddick, prohibits companies from providing that information only by website access unless the royalty owner consents.

Some appraisal districts have recently sought to revoke open-space and agricultural use valuations on land included in well pad sites and other oil and gas facilities. HB 3198 was enacted to prohibit such re-appraisals.

Once again, a forced-unitization bill was defeated. SB 177, by Van Taylor, would have authorized the RRC to force-unitize tracts into a tertiary recovery unit for CO2 floods and CO2 sequestration projects. This bill is pushed every year by Denbury Resources, a company that has a substantial stake in CO2 pipelines and tertiary recovery projects in South Texas.

Several bills were introduced in an effort to reform eminent domain law and how pipelines and other companies with the right to condemn land for a “public purpose” must exercise their authority. Two bills, HB 2684 and SB 740, were crafted by the Texans for Property Rights, a coalition of twenty organizations including the Texas Land & Mineral Owners Association, Texas Farm Bureau and Southwestern Cattle Raisers Association. Both bills failed. The bills contain common-sense reforms on the way property being condemned is valued in the condemnation process. Expect this effort to be revived in the next legislative session.

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