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.