2005 Texas Natural Resources Code CHAPTER 89. ABANDONED WELLS

NATURAL RESOURCES CODE

CHAPTER 89. ABANDONED WELLS

SUBCHAPTER A. GENERAL PROVISIONS


	§ 89.001. POLICY.  The conservation and development of 
all the natural resources of this state are declared to be a public 
right and duty.  It is also declared that the protection of water 
and land of the state against pollution or the escape of oil or gas 
is in the public interest.  In the exercise of the police power of 
the state, it is necessary and desirable to provide additional 
means so that wells that are drilled for the exploration, 
development, or production of oil or gas, or as injection or salt 
water disposal wells, and that have been abandoned and are leaking 
salt water, oil, gas, or other deleterious substances into 
freshwater formations or on the surface of the land, may be plugged, 
replugged, or repaired by or under the authority and direction of 
the commission.

Acts 1977, 65th Leg., p. 2552, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 89.002. DEFINITIONS.  (a) In this chapter:                                
		(1)  "Well" means a hole drilled for the purpose of:                          
			(A)  producing oil or gas;                                                   
			(B)  injecting fluid or gas in the ground in 
connection with the exploration or production of oil and gas;  
			(C)  obtaining geological information by taking 
cores or through seismic operations;  or
			(D)  producing geothermal energy and associated 
resources that are subject to the jurisdiction of the Railroad 
Commission of Texas.
		(2)  "Operator" means a person who assumes 
responsibility for the physical operation and control of a well as 
shown by a form the person files with the commission and the 
commission approves.  The commission may not require a person to 
assume responsibility for a well as a condition to being permitted 
to assume responsibility for another well.  In the event of a sale 
or conveyance of an unplugged well or the right to operate an 
unplugged well, a person ceases being the operator for the purpose 
of Section 89.011 only if the well was in compliance with commission 
rules relating to safety or the prevention or control of pollution 
at the time of sale or conveyance and once the person who acquires 
the well or right to operate the well:
			(A)  specifically identifies the well as a well 
for which the person assumes plugging responsibility on forms 
required and approved by the commission;
			(B)  has a commission-approved organization 
report as required by Section 91.142;
			(C)  has a commission-approved bond, letter of 
credit, or cash deposit under Sections 91.103-91. 107 covering the 
well;  and
			(D)  places the well in compliance with commission 
rules.                  
		(3)  "Nonoperator" means a person who owns a working 
interest in a well at the time the well is required to be plugged 
pursuant to commission rules and is not an operator as defined in 
Subdivision (2) of this subsection.
		(4)  "Commission" means the Railroad Commission of 
Texas.                   
		(5)  "Well-site equipment" means any 
production-related equipment or materials specific to the well 
being plugged, including motors, pumps, pump jacks, tanks, tank 
batteries, separators, compressors, casing, tubing, and rods.
		(6)  "Lease" means the lease on which a well made the 
subject of a plugging contract is located.
		(7)  "Delinquent inactive well" means an unplugged well 
that has had no reported production, disposal, injection, or other 
permitted activity for a period of greater than 12 months and for 
which, after notice and opportunity for a hearing, the commission 
has not extended the plugging deadline.
		(8)  "Plugging" includes replugging.                                          
	(b)  The terms operator and nonoperator as defined in this 
section do not mean a royalty interest owner or an overriding 
royalty interest owner.

Acts 1977, 65th Leg., p. 2552, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5255, ch. 967, § 4, 
eff. Sept. 1, 1983;  Acts 1983, 68th Leg., p. 5406, ch. 1002, § 1, 
eff. Aug. 29, 1983;  Acts 1993, 73rd Leg., ch. 882, § 1, eff. 
Sept. 1, 1993;  Acts 1993, 73rd Leg., ch. 515, § 1, eff. Jan. 1, 
1994;  Acts 1997, 75th Leg., ch. 89, § 1, eff. Sept. 1, 1997;  
Acts 2001, 77th Leg., ch. 1233, § 11, eff. Sept. 1, 2004.


	§ 89.003. APPLICABILITY.  The provisions of this chapter 
do not alter causes of action arising before August 30, 1965.

Acts 1977, 65th Leg., p. 2553, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 

SUBCHAPTER B. DUTY TO PLUG WELLS


	§ 89.011. DUTY OF OPERATOR.  (a) The operator of a well 
shall properly plug the well when required and in accordance with 
the commission's rules that are in effect at the time of the 
plugging.
	(b)  If useable quality water zones are present, the operator 
shall verify the placement of the plug at the base of the deepest 
fresh water zone required to be protected.  The well is considered 
to have been properly plugged only when the verification is 
satisfactory and meets commission requirements.
	(c)  If, for the use of the surface owner, the operator of the 
well plugs the well back to produced fresh water, the duty of the 
operator to properly plug the well ends only when:
		(1)  the well has been properly plugged in accordance 
with commission requirements;  and
		(2)  the surface owner has obtained a permit for the 
well from the groundwater conservation district, if applicable.
	(d)  Subsections (b) and (c) apply only to wells plugged on 
or after the effective date of this Act.
	(e)  The duty of a person to plug an unplugged well that has 
ceased operation ends only if the person's interest in the well is 
sold or conveyed while the well is in compliance with rules of the 
commission relating to safety or the prevention or control of 
pollution and the provisions of Sections 89.002(a)(2)(A)-(D) have 
been met.  The person acquiring the seller's interest through such a 
sale or conveyance succeeds the seller as the operator of the well 
for the purpose of plugging responsibility once the provisions of 
Sections 89.002(a)(2)(A)-(D) have been met.

Acts 1977, 65th Leg., p. 2553, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1993, 73rd Leg., ch. 882, § 2, eff. Sept. 
1, 1993;  Acts 1997, 75th Leg., ch. 89, § 2, eff. Sept. 1, 1997;  
Acts 2001, 77th Leg., ch. 1233, § 12, eff. Sept. 1, 2001.


	§ 89.012. DUTY OF NONOPERATOR.  If the operator of a well 
fails to comply with Section 89.011 of this code, each nonoperator 
is responsible for his proportionate share of the cost of the proper 
plugging of the well within a reasonable time, according to the 
rules of the commission in effect at the time the responsibility 
attaches.

Acts 1977, 65th Leg., p. 2553, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 

SUBCHAPTER C. POWERS AND DUTIES OF THE COMMISSION


	§ 89.041. DETERMINING PROPER PLUGGING.  If it comes to 
the attention of the commission that a well that has been abandoned 
or is not being operated is causing or is likely to cause pollution 
of fresh water above or below the ground or if gas or oil is escaping 
from the well, the commission may determine at a hearing, after due 
notice, whether or not the well was properly plugged as provided in 
Section 89.011 or Section 89.012 of this code.

Acts 1977, 65th Leg., p. 2553, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, 
eff. Sept. 1, 1983;  Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, 
eff. Aug. 29, 1983.


	§ 89.042. COMMISSION ORDER TO PLUG.  (a) If the 
commission finds that the well was not properly plugged, it shall 
order the operator to plug the well according to the rules of the 
commission in effect at the time the order is issued.
	(b)  If the operator cannot be found or is no longer in 
existence or has no assets with which to properly plug the well, the 
commission shall order the nonoperators to plug the well according 
to the rules of the commission in effect at the time the order is 
issued.
	(c)  Repealed by Acts 1983, 68th Leg., p. 5409, ch. 1002, 
§ 3, eff. Aug. 29,  1983.

Acts 1977, 65th Leg., p. 2553, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, 
eff. Sept. 1, 1983;  Acts 1983, 68th Leg., p. 5409, ch. 1002, § 3, 
eff. Aug. 29, 1983.


	§ 89.043. PLUGGING BY COMMISSION.  (a) If the commission 
determines at a hearing under Section 89.041 of this code that a 
well has not been properly plugged or needs replugging, the 
commission, through its employees or through a person acting as 
agent for the commission, may plug or replug the well if:
		(1)  the well was properly plugged according to rules 
in effect at the time the well was abandoned or ceased to be 
operated;  or
		(2)  neither the operator nor nonoperator properly 
plugged the well, and    
			(A)  neither the operator nor nonoperator can be 
found;  or                
			(B)  neither the operator nor nonoperator has 
assets with which to properly plug the well.
	(b)  If a well is leaking salt water, oil, or gas or is likely 
to leak salt water, oil, or gas, and the leakage will cause or is 
likely to cause a serious threat of pollution or injury to the 
public health, the commission, through its employees or agents, may 
direct the operator to take remedial action or to plug the well or 
may plug or replug the well without holding a hearing under Section 
89.041 of this code or giving notice under Subsection (c) of this 
section.
	(c)  Not later than the 30th day before the date the 
commission enters into a contract to plug a delinquent inactive 
well, the commission shall send a notice by certified mail to the 
operator of the well at the address last reported to the commission 
as required by Section 91.142 and commission rules.  The notice 
shall direct the operator to plug the well and shall state that:
		(1)  the commission may plug the well and foreclose its 
statutory lien under Section 89.083 unless the operator requests a 
hearing not later than the 10th day after the date the operator 
receives the notice;
		(2)  if the commission forecloses its statutory lien 
under Section 89.083, all well-site equipment will be presumed to 
have been abandoned and the commission may dispose of the equipment 
and hydrocarbons from the well as provided by Section 89.085;
		(3)  if the commission plugs the well, the commission:                        
			(A)  by order may require the operator to 
reimburse the commission for the plugging costs;  or
			(B)  may request the attorney general to file suit 
against the operator to recover those costs;
		(4)  the commission has a statutory lien on all 
well-site equipment under Section 89.083;  and
		(5)  the lien described by Subdivision (4) is 
foreclosed by operation of law if the commission does not receive a 
valid and timely request for a hearing before the 15th day after the 
date the notice is mailed.
	(d)  The operator of a well made the subject of a prior 
commission final order directing that it be plugged is not entitled 
to a second hearing under this section.
	(e)  The commission shall file for record a copy of the 
notice in the office of the county clerk of the county in which the 
well is located.  The notice filed with the county need not be 
acknowledged.  The copy of the notice filed in the office of the 
county clerk must contain the section, block, survey, and abstract 
number, when available to the commission, of the land on which the 
well is located.  The clerk shall record the notice in the real 
property records of the county.  The commission shall not be charged 
a fee for the filing or recording of the notice.  The commission 
shall furnish a copy of the notice to a holder of a lien on the well 
or a nonoperator on that person's request.  For purposes of title 
insurance policies issued under authority of Title 11, Insurance 
Code, this notice is not a notice of enforcement or violation of 
law, ordinance, or governmental regulation unless the notice 
contains a legally sufficient description of the specific land on 
which the well is located.
	(f)  At the request of the commission, the attorney general 
may file suit to enforce an order issued by the commission under 
Subsection (c)(3)(A).

Acts 1977, 65th Leg., p. 2554, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, 
eff. Sept. 1, 1983;  Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, 
eff. Aug. 29, 1983;  Acts 1993, 73rd Leg., ch. 515, § 2, eff. Jan. 
1, 1994;  Acts 1995, 74th Leg., ch. 928, § 1, eff. Aug. 28, 1995;  
Acts 1999, 76th Leg., ch. 29, § 1, eff. Aug. 30, 1999;  Acts 1999, 
76th Leg., ch. 57, § 1, eff. May 10, 1999;  Acts 2001, 77th Leg., 
ch. 1233, § 13, eff. Sept. 1, 2001;  Acts 2005, 79th Leg., ch. 
728, § 11.147, eff. Sept. 1, 2005.




	§ 89.044. RIGHT TO ENTER ON LAND.                                           

Text of section effective until January 1, 2006
	The commission or its employees or agents, the operator or 
the nonoperator, on proper identification, may enter the land of 
another for the purpose of plugging or replugging a well that has 
not been properly plugged.

Acts 1977, 65th Leg., p. 2554, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, 
eff. Sept. 1, 1983;  Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, 
eff. Aug. 29, 1983.

For text of section effective January 1, 2006, see § 89.044, post          




	§ 89.044. RIGHT TO ENTER ON LAND.                                           

Text of section effective January 1, 2006
	(a)  The commission or its employees or agents, the operator, 
or the nonoperator, on proper identification, may enter the land of 
another for the purpose of plugging or replugging a well that has 
not been properly plugged.
	(b)  A prospective operator who has been authorized under 
Section 89.047 to conduct a surface inspection of a well, on proper 
identification, may enter the land of another for the sole purpose 
of conducting the inspection.

Acts 1977, 65th Leg., p. 2554, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, 
eff. Sept. 1, 1983;  Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, 
eff. Aug. 29, 1983;  Acts 2005, 79th Leg., ch. 267, § 3, eff. Jan. 
1, 2006.

For text of section effective until January 1, 2006, see § 
89.044, ante  


	§ 89.045. LIABILITY FOR DAMAGES.  The commission and its 
employees and agents, the operator, and the nonoperator are not 
liable for any damages that may occur as a result of acts done or 
omitted to be done by them or each of them in a good-faith effort to 
carry out this chapter.

Acts 1977, 65th Leg., p. 2554, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, 
eff. Sept. 1, 1983;  Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, 
eff. Aug. 29, 1983.


	§ 89.046. PENALTIES AND OTHER RELIEF.  The plugging or 
replugging of a well by the commission does not prevent the 
commission from seeking penalties or other relief provided by law 
from any person who is required by law, rules adopted by the 
commission, or a valid order of the commission to plug the well.

Added by Acts 1983, 68th Leg., p. 5256, ch. 967, § 5, eff. Sept. 
1, 1983.


	§ 89.047. ORPHANED WELL REDUCTION PROGRAM.                                  

Text of section effective January 1, 2006
	(a)  In this section:                                                          
		(1)  "Depth of the well" means the vertical depth of a 
well as measured in linear feet from the surface to the lowest 
perforation of the casing of the well that is within the 
commission-designated correlative interval for the field for which 
the well is issued a permit.
		(2)  "Operator in good standing" means an operator who:                       
			(A)  has a commission-approved organization 
report;                        
			(B)  is the designated operator of at least one 
well within the jurisdiction of the commission;
			(C)  has filed with the commission under Section 
91.104 a bond, letter of credit, or cash deposit in an amount 
sufficient to qualify to operate one or more additional wells;  and
			(D)  is not the subject of a commission or court 
order regarding a violation of a commission rule with which the 
operator has not complied or a complaint that has been docketed by 
the commission alleging a violation of a commission rule.
		(3)  "Orphaned well" means a well:                                            
			(A)  for which the commission has issued a permit;                           
			(B)  for which production of oil or gas or another 
activity under the jurisdiction of the commission has not been 
reported to the commission for the preceding 12 months;  and
			(C)  whose operator's commission-approved 
organization report has lapsed.  
		(4)  "Producing well" means a well classified by the 
commission as an oil or gas well in accordance with commission 
rules.
		(5)  "Service well" means a well for which the 
commission has issued a permit that is not a producing well.  The 
term includes an injection, disposal, or brine mining well.
	(b)  A person who is considering assumption of operatorship 
and regulatory responsibility for an orphaned well may nominate the 
well under consideration by filing a request on a form prescribed by 
the commission notifying the commission that the person seeks 
authority to conduct a surface inspection of the well to determine 
whether the person desires to be designated by the commission as the 
operator of the well.
	(c)  If the person is an operator in good standing and the 
well is not already subject to a nomination, the commission shall 
accept the nomination and issue a written confirmation to the 
person of the person's authority to conduct a surface inspection of 
the nominated well for a stated period not to exceed 30 days.
	(d)  A person to whom a confirmation is issued under 
Subsection (c) may conduct a surface inspection of the well.  The 
person must deliver written notice to the owner of record of the 
surface estate and any occupant of the tract on which the well is 
located at least three days before the date of the inspection.  The 
notice must:
		(1)  identify the orphaned well;                                              
		(2)  state the name, address, and telephone number of 
the person;           
		(3)  state the date the person intends to conduct the 
surface inspection;   
		(4)  state the name of at least one representative of 
the person who will participate in the surface inspection;  and
		(5)  state that the person intends to inspect the 
orphaned well in accordance with this section for the purpose of 
assessing the current status and viability of the well.
	(e)  In conducting a surface inspection of the orphaned well, 
the person may visually inspect the well and all related equipment, 
tanks, and other facilities and may conduct noninvasive testing 
such as using a gauge to determine the pressure present at the 
wellhead but may not produce oil or gas from the well, reenter the 
well, pull tubing from or perform any other type of downhole work on 
the well, conduct a salvage operation on the well, or remove any 
tangible item from the well site.
	(f)  The commission shall designate the person as the 
operator of the well if the person files with the commission:
		(1)  a factually supported claim based on a recognized 
legal theory to a continuing possessory right in the mineral estate 
accessed by the well, such as evidence of a current oil and gas 
lease or a recorded deed conveying a fee interest in the mineral 
estate;
		(2)  a completed certificate of compliance;  and                              
		(3)  a nonrefundable fee in the amount of $250.                               
	(g)  A fee collected under Subsection (f) shall be deposited 
to the credit of the general revenue fund and may be appropriated 
only to the commission to be used to enforce the laws and rules 
concerning oil and gas conservation and waste and pollution 
prevention.
	(h)  A person who is designated as the operator of an 
orphaned well on or after January 1, 2006, and not later than 
December 31, 2007, is entitled to receive:
		(1)  a nontransferable exemption from severance taxes 
for all future production from the well as provided by Section 
202.060, Tax Code;
		(2)  a nontransferable exemption from the fees provided 
by Sections 81.116 and 81.117 for all future production from the 
well;  and
		(3)  a payment from the commission in an amount equal to 
the depth of the well multiplied by 50 cents for each foot of well 
depth if, not later than the third anniversary of the date the 
commission designates the person as the operator of the well, the 
person brings the well back into continuous active operation or 
plugs the well in accordance with commission rules.
	(i)  A well is considered to be in continuous active 
operation for purposes of Subsection (h)(3) if:
		(1)  the well is a producing well and the well has 
produced at least 10 barrels of oil or 100 mcf of gas per month for 
at least three consecutive months as shown in the records of the 
commission and as authorized by a permit issued by the commission;  
or
		(2)  the well is a service well and the well has been 
used for the disposal or injection of oil and gas wastes or another 
purpose related to the production of oil or gas for at least three 
consecutive months as shown in the records of the commission and as 
authorized by a permit issued by the commission.
	(j)  The commission shall make payments to operators under 
Subsection (h)(3) annually in the same order the commission 
determines the operators to be entitled to the payments.  The 
aggregate amount of payments in a state fiscal year under that 
subsection may not exceed $500,000.  An operator may not receive:
		(1)  more than one payment under that subsection for 
the same well;  or     
		(2)  cumulative payments in an amount that exceeds the 
amount of the bond, letter of credit, or cash deposit the operator 
has filed with the commission under Section 91.104.

Added by Acts 2005, 79th Leg., ch. 267, § 4, eff. Jan. 1, 2006.            


	§ 89.048. PLUGGING OF WELL BY SURFACE ESTATE OWNER.                         

Text of section effective January 1, 2006
	(a)  In this section, "orphaned well" has the meaning 
assigned by Section 89.047.
	(b)  The owner of an interest in the surface estate of a tract 
of land on which an orphaned well is located may contract with a 
commission-approved well plugger to plug the well.
	(c)  If the surface estate owner enters into a contract under 
Subsection (b), the well plugger shall:
		(1)  not later than the 30th day before the date the 
well is plugged, mail notice of its intent to plug the well to the 
operator of the well at the operator's address as shown by the 
records of the commission;
		(2)  assume responsibility for the physical operation 
and control of the well as shown by a form the person files with the 
commission and the commission approves;
		(3)  file a bond, letter of credit, or cash deposit 
covering the well as required by Section 91.107;  and
		(4)  plug the well in accordance with commission rules.                       
	(d)  On successful plugging of the well by the well plugger, 
the surface estate owner may submit documentation to the commission 
of the cost of the well-plugging operation.  The commission shall 
reimburse the surface estate owner from money in the oil-field 
cleanup fund in an amount not to exceed 50 percent of the lesser of:
		(1)  the documented well-plugging costs;  or                                  
		(2)  the average cost incurred by the commission in the 
preceding 24 months in plugging similar wells located in the same 
general area.
	(e)  The commission shall adopt any rules reasonably 
necessary to implement this section.

Added by Acts 2005, 79th Leg., ch. 267, § 4, eff. Jan. 1, 2006.            

SUBCHAPTER D. COSTS OF PLUGGING WELLS


	§ 89.081. CAUSE OF ACTION FOR DISPROPORTIONATE SHARE OF 
COST.  If an operator or nonoperator owns only a partial interest 
in the well or oil and gas and the operator or nonoperator pays a 
larger proportion of the cost of plugging the well than his 
proportionate interest in the well or oil and gas, he has a cause of 
action against the other operators and nonoperators for their 
proportionate shares of the cost of plugging.

Acts 1977, 65th Leg., p. 2554, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5251, ch. 967, § 1, 
eff. Sept. 1, 1983;  Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, 
eff. Aug. 29, 1983.


	§ 89.083. FIRST LIEN ON EQUIPMENT;  CAUSE OF ACTION IF 
COMMISSION PLUGS.  (a) If a well has not been plugged by the 
deadline for plugging established by commission rules, the state 
has a first lien, superior to all other preexisting and subsequent 
liens and security interests, on the operator's and nonoperator's 
interests in well-site equipment, in the amount of the total costs 
of removing well-site equipment from the well, plugging the well, 
and transporting, storing, and disposing of the well-site 
equipment.
	(b)  The lien arises on the date by which the well is required 
to be plugged under commission rules.
	(c)  The lien may be foreclosed by judicial action or 
commission order at any time after notice and an opportunity for a 
hearing.  If notice is mailed under Section 89.043 and if the lien 
is not previously foreclosed, the lien is foreclosed by operation 
of law on the 15th day after the date the notice is mailed unless the 
commission has received a valid and timely request for a hearing 
before that date. The commission is not required to give notice or 
an opportunity for a hearing to subordinate lienholders or 
nonoperators before foreclosing the lien.
	(d)  The lien is extinguished if the well is plugged or 
otherwise brought into compliance in accordance with commission 
rules by any person authorized to do so before the commission enters 
into a plugging contract.
	(e)  The lien is extinguished as to any item of well-site 
equipment that is lawfully removed by any person other than the 
operator or a nonoperator pursuant to a lien, lease, judgment, 
written contract, or security agreement before the commission sends 
notice under Section 89.043(c). A person may not remove from an 
inactive well site any equipment necessary to prevent the well from 
serving as a conduit for the passage of oil, gas, saltwater, oil and 
gas wastes, or freshwater from one stratum or formation to another 
or to the surface or from the surface downward except in the course 
of plugging in accordance with commission rules.
	(f)  If the commission plugs a well under Sections 89.043 
through 89.044 of this code, the state has a cause of action for all 
reasonable expenses incurred in plugging or replugging the well and 
not recovered under Section 89.085 of this code or through 
reimbursement to the commission.
	(g)  The cause of action is:                                                   
		(1)  first, against the operator, to be secured by a 
first lien, superior to all preexisting and subsequent liens and 
security interests, on the operator's interest in the oil and gas in 
the land and the fixtures, machinery, and equipment found or used on 
the land where the well is located;  and
		(2)  second, against a nonoperator at the time the well 
should have been plugged, to be secured by a lien on the 
nonoperator's interest in the oil and gas in the land.  A 
nonoperator may be made a party defendant in the suit against the 
operator.
	(h)  The commission:                                                           
		(1)  by order may require the operator and any 
nonoperator to reimburse the commission for all reasonable expenses 
incurred in plugging a well;  or
		(2)  may request the attorney general to file suit 
against the operator and any nonoperator to recover those expenses.
	(i)  At the request of the commission, the attorney general 
may file suit to enforce an order issued by the commission under 
Subsection (h)(1).
	(j)  Money collected in a suit under this section shall be 
deposited in the state oil-field cleanup fund.
	(k)  A civil action for reimbursement under this section may 
be brought in Travis County, the county in which the plugged well is 
located, or the county in which any defendant resides.

Acts 1977, 65th Leg., p. 2555, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5251, ch. 967, § 1, 
eff. Sept. 1, 1983;  Acts 1983, 68th Leg., p. 5407, ch. 1002, § 2, 
eff. Aug. 29, 1983;  Acts 1991, 72nd Leg., ch. 603, § 6, eff. 
Sept. 1, 1991;  Acts 1993, 73rd Leg., ch. 515, § 3, eff. Jan. 1, 
1994;  Acts 1999, 76th Leg., ch. 29, § 2, eff. Aug. 30, 1999;  
Acts 1999, 76th Leg., ch. 57, § 2, eff. May 10, 1999;  Acts 2001, 
77th Leg., ch. 1233, § 14, eff. Sept. 1, 2001.


	§ 89.084. MONEY PAID COMMISSION BY PRIVATE PERSON.  (a) 
The commission may accept money from private persons and use the 
money to plug or replug a well.
	(b)  Paying money to the commission is not an admission that 
the person paying the money is obligated to plug or replug the well.  
Evidence that a person has paid money to the commission is not 
admissible against the person in a suit in which the person's 
obligation to plug a well is an issue and introducing the evidence 
is a compulsory ground for mistrial.

Acts 1977, 65th Leg., p. 2555, ch. 871, art. I, § 1, eff. Sept. 1, 
1977. 


	§ 89.085. POSSESSION AND SALE OF EQUIPMENT TO COVER 
PLUGGING COSTS.  (a) When the commission forecloses its lien under 
Section 89.083 on a delinquent inactive well, well-site equipment 
and any amount of hydrocarbons from the well that is stored on the 
lease are presumed to have been abandoned and may be disposed of by 
the commission in a commercially reasonable manner by either or 
both of the following methods:
		(1)  entering into a plugging contract that provides 
that the person plugging or cleaning up pollution, or both, will 
take title to well-site equipment, hydrocarbons from the well that 
are stored on the lease, or hydrocarbons recovered during the 
plugging operation in exchange for a sum of money deducted as a 
credit from the contract price;  or
		(2)  selling the well-site equipment, hydrocarbons 
from the well that are stored on the lease, or hydrocarbons 
recovered during the plugging operation at a public auction or a 
public or private sale.
	(b)  The commission shall assign separate costs to:                            
		(1)  removing well-site equipment;                                            
		(2)  plugging the well;  and                                                  
		(3)  transporting, storing, and disposing of the 
well-site equipment.       
	(c)  The commission shall dispose of well-site equipment or 
hydrocarbons under this section at a price or value that reflects 
the generally recognized market value of the equipment or 
hydrocarbons, with allowances for physical condition.
	(d)  The commission shall deposit money received from the 
sale of well-site equipment or hydrocarbons under this section to 
the credit of the oil-field cleanup fund.  The commission shall 
separately account for money and credit received for each well.
	(e)  A person who acquires well-site equipment or 
hydrocarbons under this section by sale or contract receives a 
clear title, free of all prior legal or equitable claims of whatever 
nature, whether perfected or inchoate.
	(f)  Not later than the 30th day after the date well-site 
equipment or hydrocarbons are disposed of under this section, the 
commission shall mail a notice by first class mail to the operator 
of the well at the address last reported to the commission as 
required by Section 91.142 of this code and commission rules and, on 
request, to any lienholder or nonoperator.
	(g)  The notice required by Subsection (f) of this section 
must include:     
		(1)  the lease name;                                                          
		(2)  the well number;                                                         
		(3)  the county in which the well is located;                                 
		(4)  the abstract number of the property on which the 
lease is situated;    
		(5)  the commission lease or gas well identification 
number or drilling permit number;
		(6)  a list of the property disposed of under this 
section;  and            
		(7)  a statement that any person who has a legal or 
equitable ownership or security interest in the equipment or 
hydrocarbons that was in existence on the date the commission 
foreclosed its statutory lien may file a claim with the commission.
	(h)  Not later than the 180th day after the date the 
well-site equipment or hydrocarbons are disposed of under this 
section, the commission shall publish a notice that states:
		(1)  the lease name;                                                          
		(2)  the well number;                                                         
		(3)  the county in which the well is located;                                 
		(4)  the commission lease or gas well identification 
number or drilling permit number;  and
		(5)  that equipment or hydrocarbons if applicable from 
the well and lease were disposed of under this section and that any 
person who has a legal or equitable ownership or security interest 
in the equipment or hydrocarbons that was in existence on the date 
the commission foreclosed its statutory lien may file a claim with 
the commission.
	(i)  The commission shall publish the notice required under 
Subsection (h) of this section in a newspaper of general 
circulation in the county in which the lease is located.  A single 
notice may contain the information required for more than one well 
and lease.  A notice given under this section following the plugging 
of a well may be combined with a notice given under Section 91.115 
of this code following the cleanup of a site or facility.

Added by Acts 1985, 69th Leg., ch. 715, § 1, eff. Aug. 26, 1985.  
Amended by Acts 1989, 71st Leg., ch. 755, § 1, eff. Sept. 1, 
1989;  Acts 1993, 73rd Leg., ch. 515, § 4, eff. Jan. 1, 1994;  
Acts 2001, 77th Leg., ch. 1233, § 15, eff. Sept. 1, 2001.


	§ 89.086. CLAIMS AGAINST THE OIL-FIELD CLEANUP FUND.  (a) 
A person with a legal or equitable ownership or security interest in 
well-site equipment or hydrocarbons disposed of under Section 
89.085 of this code may make a claim against the oil-field cleanup 
fund unless an element of the transaction giving rise to the 
interest occurs after the commission forecloses its statutory lien 
under Section 89.083.
	(b)  The commission shall adopt a form on which a person may 
file a sworn claim with the commission.
	(c)  A claimant must identify the well-site equipment or 
hydrocarbons in which the claimant has an interest and state the 
amount of the property interest as of the date the commission 
foreclosed its statutory lien under Section 89.083.
	(d)  The commission may require a person to include with a 
claim documentation that substantiates the claim or to disclose 
whether the claimant was an operator or nonoperator of the well.
	(e)  The commission may set a hearing to receive evidence on 
a claim filed under this section.  The commission shall notify the 
claimant of the date, time, and place of a hearing.
	(f)  If the commission holds a hearing, the commission shall 
issue:          
		(1)  a decision on the claim;                                                 
		(2)  a statement of findings of fact that includes the 
substance of the evidence heard;  and
		(3)  the conclusions of law that support the decision.                        
	(g)  The commission shall consider the validity of claims in 
the order in which the claims are filed.
	(h)  The commission shall suspend an amount of money in the 
oil-field cleanup fund equal to the amount of the claim until the 
claim is finally resolved.  If the provisions of Subsection (k) of 
this section prevent suspension of the full amount of the claim, the 
commission shall treat the claim as two consecutively filed claims, 
one in the amount of funds available for suspension and the other in 
the remaining amount of the claim.
	(i)  A claim made by or on behalf of the operator or a 
nonoperator of a well or a successor to the rights of the operator 
or nonoperator is subject to a ratable deduction from the proceeds 
or credit received for the well-site equipment to cover the costs 
incurred by the commission in removing the equipment or 
hydrocarbons from the well or in transporting, storing, or 
disposing of the equipment or hydrocarbons.  A claim made by a 
person who is not an operator or nonoperator is subject to a ratable 
deduction for the costs incurred by the commission in removing the 
equipment from the well.  If a claimant is a person who is 
responsible under law or commission rules for plugging the well or 
cleaning up pollution originating on the lease or if the claimant 
owes a penalty assessed by the commission or a court for a violation 
of a commission rule or order, the commission may recoup from or 
offset against a valid claim an expense incurred by the oil-field 
cleanup fund that is not otherwise reimbursed or any penalties 
owed.  An amount recouped from, deducted from, or offset against a 
claim under this subsection shall be treated as an invalid portion 
of the claim and shall remain suspended in the oil-field cleanup 
fund in the manner provided by Subsection (j) of this section.
	(j)  If the commission finds that a claim is valid in whole or 
in part, the commission shall pay the valid portion of the claim 
from the suspended amount in the oil-field cleanup fund not later 
than the 30th day after the date of the commission's decision.  If 
the commission finds that a claim is invalid in whole or in part, 
the commission shall continue to suspend in the oil-field cleanup 
fund an amount equal to the invalid portion of the claim until the 
period during which the commission's decision may be appealed has 
expired or, if appealed, during the period the case is under 
judicial review.  If on appeal the district court finds the claim 
valid in whole or in part, the commission shall pay the valid 
portion of the claim from the suspended amount in the oil-field 
cleanup fund not later than 30 days after the date the court's 
judgment becomes unappealable.  On the date the commission's 
decision is not subject to judicial review, the commission shall 
release from the suspended amount in the oil-field cleanup fund the 
amount of the claim held to be invalid.
	(k)  If the aggregate of claims paid and money suspended that 
relates to well-site equipment or hydrocarbons from a particular 
well equals the total of the actual proceeds and credit realized 
from the disposition of that equipment or those hydrocarbons, the 
oil-field cleanup fund is not liable for any subsequently filed 
claims that relate to the same equipment or hydrocarbons unless and 
until the commission releases from the suspended amount money 
derived from the disposition of that equipment or those 
hydrocarbons.  If the commission releases money, then the 
commission shall suspend money in the amount of subsequently filed 
claims in the order of filing.
	(l)  A person who informs a potential claimant that the 
potential claimant may be entitled to file a claim under this 
section or who files a claim on behalf of a claimant may not 
contract for or receive from the claimant for services an amount 
greater than 10 percent of the paid claim.

Added by Acts 1993, 73rd Leg., ch. 515, § 5, eff. Jan. 1, 1994.  
Amended by Acts 2001, 77th Leg., ch. 1233, § 16, eff. Sept. 1, 
2001.


	§ 89.087. JUDICIAL REVIEW OF COMMISSION DECISIONS;  
IMMUNITY FROM SUIT AND LIABILITY.  (a) A claimant aggrieved by the 
commission's decision on a claim may appeal the decision in a 
district court of Travis County on or before the 60th day after the 
date the decision was issued.  If the commission does not decide a 
claim by the 90th day after the date it was filed, the claimant may 
appeal within the 60-day period beginning on the 91st day after the 
date of filing.
	(b)  Judicial review under this section is by trial de novo.                   
	(c)  No interest accrues on a claim before an appeal is filed 
under this section.
	(d)  Except to the extent permitted by this chapter, and 
notwithstanding any other provision of law, the commission, its 
employees or agents, and the State of Texas are immune from suit and 
from liability based on the disposition of well-site equipment or 
hydrocarbons in accordance with this chapter.

Added by Acts 1993, 73rd Leg., ch. 515, § 5, eff. Jan. 1, 1994.            


	§ 89.088. RECORD OF REQUEST FOR NOTICE BY LIENHOLDER OR 
NONOPERATOR;  FORM;  FEE.  (a) The commission shall maintain a 
record of a request for notice by a lienholder or nonoperator under 
Section 89.043(e) or 89.085(f) of this code for five years after the 
date on which the commission receives the request.
	(b)  The commission shall prepare a form for a request for 
notice.  The commission shall require a person who requests notice 
to include on the form information that identifies the lease 
covered by the request.
	(c)  The commission may charge a filing fee for a request for 
notice not to exceed $10 for each lease covered by the request.

Added by Acts 1993, 73rd Leg., ch. 515, § 5, eff. Jan. 1, 1994.            

SUBCHAPTER E. ENFORCEMENT;  JUDICIAL REVIEW


	§ 89.121. ENFORCEMENT BY COMMISSION.  (a) In addition to 
the powers specifically granted to the commission under this 
chapter, the commission may enforce this chapter or any rule or 
order of the commission adopted under this chapter in the same 
manner and on the same conditions as provided in the other chapters 
of Title 3 of this code.
	(b)  Civil penalties collected for violations of this 
chapter or of rules relating to plugging that are adopted under this 
code shall be deposited in the state oil-field cleanup fund.

Acts 1977, 65th Leg., p. 2555, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1983, 68th Leg., p. 5251, ch. 967, § 1, 
eff. Sept. 1, 1983;  Acts 1991, 72nd Leg., ch. 603, § 7, eff. 
Sept. 1, 1991.


	§ 89.122. APPEAL TO COURTS.  Any person affected by the 
provisions of this chapter may sue to test the validity of any order 
adopted by the commission under this chapter in the same manner, on 
the same conditions, and to the same court or courts as prescribed 
for suits testing the validity of orders of the commission adopted 
under the general oil conservation statutes of this state.

Acts 1977, 65th Leg., p. 2555, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.