1-1     By:  Nixon                                             S.B. No. 436
 1-2           (In the Senate - Filed February 8, 1999; February 10, 1999,
 1-3     read first time and referred to Committee on Jurisprudence;
 1-4     April 15, 1999, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 3, Nays 0; April 15, 1999,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 436                    By:  Brown
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to a disclosure required in certain offers by mail to
1-11     purchase mineral or royalty interests.
1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13           SECTION 1.  Chapter 5, Property Code, is amended by adding
1-14     Subchapter F to read as follows:
1-15      SUBCHAPTER F.  REQUIREMENTS FOR CONVEYANCES OF MINERAL OR ROYALTY
1-16                                  INTERESTS
1-17           Sec. 5.151.  DISCLOSURE IN OFFER TO PURCHASE MINERAL
1-18     INTEREST.  (a)  A person who mails to the owner of a mineral or
1-19     royalty interest an offer to purchase only the mineral or royalty
1-20     interest, it being understood that for the purpose of this section
1-21     the taking of an oil, gas, or mineral lease shall not be deemed a
1-22     purchase of a mineral or royalty interest, and encloses an
1-23     instrument of conveyance of only the mineral or royalty interest
1-24     and a draft or other instrument, as defined in Section 3.104,
1-25     Business & Commerce Code, providing for payment for that interest
1-26     shall include in the offer a conspicuous statement printed in a
1-27     type style that is approximately the same size as 14-point type
1-28     style or larger and is in substantially the following form:
1-29            BY EXECUTING AND DELIVERING THIS INSTRUMENT YOU ARE
1-30            SELLING ALL OR A PORTION OF YOUR MINERAL OR ROYALTY
1-31            INTEREST IN (DESCRIPTION OF PROPERTY BEING CONVEYED).
1-32           (b)  A person who conveys a mineral or royalty interest as
1-33     provided by Subsection (a) may bring suit against the purchaser of
1-34     the interest if:
1-35                 (1)  the purchaser did not give the notice required by
1-36     Subsection (a); and
1-37                 (2)  the person has given 30 days' written notice to
1-38     the purchaser that a suit will be filed unless the matter is
1-39     otherwise resolved.
1-40           (c)  A plaintiff who prevails in a suit under Subsection (b)
1-41     may recover from the initial purchaser of the mineral or royalty
1-42     interest the greater of:
1-43                 (1)  $100; or
1-44                 (2)  an amount up to the difference between the amount
1-45     paid by the purchaser for the mineral or royalty interest and the
1-46     fair market value of the mineral or royalty interest at the time of
1-47     the sale.
1-48           (d)  The prevailing party in a suit under Subsection (b) may
1-49     recover:
1-50                 (1)  court costs; and
1-51                 (2)  reasonable attorney's fees.
1-52           (e)  A person must bring a suit under Subsection (b) not
1-53     later than the second anniversary of the date the person executed
1-54     the conveyance.
1-55           (f)  The remedy provided under this section shall be in
1-56     addition to any other remedies existing under law, excluding
1-57     rescission or other remedies that would make the conveyance of the
1-58     mineral or royalty interest void or of no force and effect.
1-59           SECTION 2.  This Act takes effect September 1, 1999, and
1-60     applies only to an offer to purchase a mineral or royalty interest
1-61     mailed on or after that date.  An offer to purchase a mineral or
1-62     royalty interest mailed before that date is governed by the law in
1-63     effect on the date the offer was mailed, and that law is continued
1-64     in effect for that purpose.
 2-1           SECTION 3.  The importance of this legislation and the
 2-2     crowded condition of the calendars in both houses create an
 2-3     emergency and an imperative public necessity that the
 2-4     constitutional rule requiring bills to be read on three several
 2-5     days in each house be suspended, and this rule is hereby suspended.
 2-6                                  * * * * *