By:  Sims                                              S.B. No. 972
       73R735 MI-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to a penalty for the late payment of oil and gas
    1-3  royalties.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Section 91.403, Natural Resources Code, is
    1-6  amended to read as follows:
    1-7        Sec. 91.403.  Payment of Interest And Penalty on Late
    1-8  Payments.  (a)  If payment has not been made for any reason in the
    1-9  time limits specified in Section 91.402 of this code, the payor
   1-10  must pay interest to a payee beginning at the expiration of those
   1-11  time limits at two percentage points above the percentage rate
   1-12  charged on loans to depository institutions by the New York Federal
   1-13  Reserve Bank, unless a different rate of interest is specified in a
   1-14  written agreement between payor and payee.  For each royalty
   1-15  payment due and that is not timely paid, the payor must also pay
   1-16  the payee a penalty equal to 25 percent of the royalty due or $25,
   1-17  whichever amount is greater.
   1-18        (b)  Subsection (a) of this section does not apply where
   1-19  payments are withheld or suspended by a payor beyond the time
   1-20  limits specified in Section 91.402 of this code because of the
   1-21  conditions enumerated in Section 91.402 of this code.
   1-22        (c)  The payor's obligation to pay interest and the payee's
   1-23  right to receive interest and a penalty payment under Subsection
   1-24  (a) of this section terminate on delivery of the proceeds and
    2-1  accumulated interest to the State Treasurer as provided by Title 6,
    2-2  Property Code.
    2-3        SECTION 2.  Section 91.404(c), Natural Resources Code, is
    2-4  amended to read as follows:
    2-5        (c)  A payee has a cause of action for nonpayment of oil or
    2-6  gas proceeds or interest on those proceeds and a penalty as
    2-7  required in Section 91.402 or 91.403 of this code in any court of
    2-8  competent jurisdiction in the county in which the oil or gas well
    2-9  is located.
   2-10        SECTION 3.  The change in law made by this Act applies only
   2-11  to a payment that is due to be paid under Section 91.402, Natural
   2-12  Resources Code, on or after the effective date of this Act.
   2-13        SECTION 4.  This Act takes effect September 1, 1993.
   2-14        SECTION 5.  The importance of this legislation and the
   2-15  crowded condition of the calendars in both houses create an
   2-16  emergency   and   an   imperative   public   necessity   that   the
   2-17  constitutional rule requiring bills to be read on three several
   2-18  days in each house be suspended, and this rule is hereby suspended.