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A BILL TO BE ENTITLED
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AN ACT
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relating to a disclosure in certain offers to purchase or lease a |
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mineral or royalty interest. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Section 5.151, Property Code, is |
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amended to read as follows: |
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Sec. 5.151. DISCLOSURE IN CERTAIN OFFERS [OFFER] TO |
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PURCHASE OR LEASE MINERAL OR ROYALTY INTEREST. |
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SECTION 2. Section 5.151, Property Code, is amended by |
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amending Subsections (a), (b), (c), (e), and (f) and adding |
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Subsections (a-1) and (c-1) to read as follows: |
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(a) A person who delivers [mails] to the owner of a mineral |
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or royalty interest an offer to purchase all or any portion of only |
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the mineral or royalty interest, it being understood that for the |
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purpose of this section the taking of an oil, gas, or mineral lease |
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other than a lease described by Subsection (a-1) shall not be deemed |
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a purchase of a mineral or royalty interest, and encloses an |
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instrument of conveyance of only the mineral or royalty interest |
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[and a draft or other instrument, as defined in Section 3.104,
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Business & Commerce Code, providing for payment for that interest] |
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shall include in the offer a conspicuous statement printed in a type |
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style that is approximately the same size as 14-point type style or |
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larger and is in substantially the following form: |
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BY EXECUTING AND DELIVERING THIS INSTRUMENT YOU |
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ARE SELLING ALL OR A PORTION OF YOUR MINERAL OR ROYALTY |
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INTEREST IN (DESCRIPTION OF PROPERTY BEING CONVEYED). |
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(a-1) An offer to lease an interest in oil and gas in a |
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property is considered an offer to purchase a mineral or royalty |
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interest and must include the statement described by Subsection (a) |
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if: |
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(1) the property is subject to an existing oil and gas |
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lease; and |
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(2) the lease being offered has the effect of |
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conveying all or a portion of the mineral or royalty owner's |
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interest in production from the underlying oil and gas lease. |
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(b) A person who conveys a mineral or royalty interest as |
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provided by Subsection (a) or (a-1) may bring suit against the |
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purchaser or lessor of the interest if: |
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(1) the purchaser or lessor did not give the notice |
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required by Subsection (a); and |
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(2) the person has given 30 days' written notice to the |
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purchaser or lessor that a suit will be filed unless the matter is |
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otherwise resolved. |
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(c) A plaintiff who prevails in a suit under Subsection (b) |
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may rescind the sale or lease agreement and recover from the |
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[initial] purchaser or lessor of the mineral or royalty interest |
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[the greater of]: |
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(1) exemplary damages if the purchaser's or lessor's |
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conduct constitutes fraud under Sections 27.01(a) and (c), Business & |
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Commerce Code, in addition to any damages awarded under that |
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section [$100]; and [or] |
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(2) an amount up to the difference between the amount |
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paid by the purchaser or lessor for the mineral or royalty interest |
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and the fair market value of the mineral or royalty interest at the |
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time of the sale or lease. |
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(c-1) Notwithstanding Section 41.004, Civil Practice and |
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Remedies Code, a court shall award exemplary damages as provided by |
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Subsection (c)(1) to a plaintiff who prevails in a suit under |
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Subsection (b) irrespective of whether the plaintiff is awarded |
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actual damages. |
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(e) A person must bring a suit under Subsection (b) not |
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later than the fourth [second] anniversary of the date the person |
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executed the conveyance. |
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(f) The remedy provided under this section shall be in |
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addition to any other remedies existing under law[, excluding
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rescission or other remedies that would make the conveyance of the
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mineral or royalty interest void or of no force and effect]. |
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SECTION 3. The change in law made by this Act applies only |
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to an offer to purchase or lease a mineral or royalty interest |
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delivered on or after the effective date of this Act. An offer to |
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purchase or lease a mineral or royalty interest delivered before |
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the effective date of this Act is governed by the law as it existed |
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immediately before the effective date of this Act, and that law is |
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continued in effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2019. |