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 * * * * *