Texas § NR.89.083 - FIRST LIEN ON EQUIPMENT

§ NR.89.083. FIRST LIEN ON EQUIPMENT

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 oil and gas regulation and 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, Sec. 1, eff. Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 5251, ch. 967, Sec. 1, eff. Sept. 1, 1983; Acts 1983, 68th Leg., p. 5407, ch. 1002, Sec. 2, eff. Aug. 29, 1983; Acts 1991, 72nd Leg., ch. 603, Sec. 6, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 515, Sec. 3, eff. Jan. 1, 1994; Acts 1999, 76th Leg., ch. 29, Sec. 2, eff. Aug. 30, 1999; Acts 1999, 76th Leg., ch. 57, Sec. 2, eff. May 10, 1999; Acts 2001, 77th Leg., ch. 1233, Sec. 14, eff. Sept. 1, 2001. Amended by: Acts 2011, 82nd Leg., 1st C.S., Ch. 4 (S.B. 1 ), Sec. 19.10, eff. September 28, 2011.