By:  Nixon                                             S.B. No. 436
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to a disclosure required in certain offers by mail to
 1-2     purchase mineral or royalty interests.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Chapter 5, Property Code, is amended by adding
 1-5     Subchapter F to read as follows:
 1-6      SUBCHAPTER F.  REQUIREMENTS FOR CONVEYANCES OF MINERAL OR ROYALTY
 1-7                                  INTERESTS
 1-8           Sec. 5.151.  DISCLOSURE IN OFFER TO PURCHASE MINERAL
 1-9     INTEREST.  (a)  A person who mails to the owner of a mineral or
1-10     royalty interest an offer to purchase only the mineral or royalty
1-11     interest, it being understood that for the purpose of this section
1-12     the taking of an oil, gas, or mineral lease shall not be deemed a
1-13     purchase of a mineral or royalty interest, and encloses an
1-14     instrument of conveyance of only the mineral or royalty interest
1-15     and a draft or other instrument, as defined in Section 3.104,
1-16     Business & Commerce Code, providing for payment for that interest
1-17     shall include in the offer a conspicuous statement printed in a
1-18     type style that is approximately the same size as 14-point type
1-19     style or larger and is in substantially the following form:
1-20            BY EXECUTING AND DELIVERING THIS INSTRUMENT YOU ARE
1-21            SELLING ALL OR A PORTION OF YOUR MINERAL OR ROYALTY
1-22            INTEREST IN (DESCRIPTION OF PROPERTY BEING CONVEYED).
1-23           (b)  A person who conveys a mineral or royalty interest as
1-24     provided by Subsection (a) may bring suit against the purchaser of
 2-1     the interest if:
 2-2                 (1)  the purchaser did not give the notice required by
 2-3     Subsection (a); and
 2-4                 (2)  the person has given 30 days' written notice to
 2-5     the purchaser that a suit will be filed unless the matter is
 2-6     otherwise resolved.
 2-7           (c)  A plaintiff who prevails in a suit under Subsection (b)
 2-8     may recover from the initial purchaser of the mineral or royalty
 2-9     interest the greater of:
2-10                 (1)  $100; or
2-11                 (2)  an amount up to the difference between the amount
2-12     paid by the purchaser for the mineral or royalty interest and the
2-13     fair market value of the mineral or royalty interest at the time of
2-14     the sale.
2-15           (d)  The prevailing party in a suit under Subsection (b) may
2-16     recover:
2-17                 (1)  court costs; and
2-18                 (2)  reasonable attorney's fees.
2-19           (e)  A person must bring a suit under Subsection (b) not
2-20     later than the second anniversary of the date the person executed
2-21     the conveyance.
2-22           (f)  The remedy provided under this section shall be in
2-23     addition to any other remedies existing under law, excluding
2-24     rescission or other remedies that would make the conveyance of the
2-25     mineral or royalty interest void or of no force and effect.
2-26           SECTION 2.  This Act takes effect September 1, 1999, and
 3-1     applies only to an offer to purchase a mineral or royalty interest
 3-2     mailed on or after that date.  An offer to purchase a mineral or
 3-3     royalty interest mailed before that date is governed by the law in
 3-4     effect on the date the offer was mailed, and that law is continued
 3-5     in effect for that purpose.
 3-6           SECTION 3.  The importance of this legislation and the
 3-7     crowded condition of the calendars in both houses create an
 3-8     emergency and an imperative public necessity that the
 3-9     constitutional rule requiring bills to be read on three several
3-10     days in each house be suspended, and this rule is hereby suspended.