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A BILL TO BE ENTITLED
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AN ACT
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relating to a disclosure in certain offers to purchase a mineral or |
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royalty interest. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter F, Chapter 5, Property Code, is |
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amended by adding Section 5.152 to read as follows: |
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Sec. 5.152. CERTAIN PURCHASES OF MINERAL OR ROYALTY |
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INTERESTS VOID. (a) This section applies only to the conveyance of |
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a mineral or royalty interest by an instrument that: |
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(1) is presented to the owner of the interest by the |
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person acquiring the interest; |
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(2) is titled an oil and gas lease or an oil and gas |
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royalty lease or has other words in the caption or other prominently |
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displayed label that indicate that the transaction is a lease of a |
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mineral or royalty interest; and |
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(3) has the effect of conveying, permanently or for a |
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term, all or a portion of the owner's: |
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(A) mineral interest in lands covered by an |
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existing oil, gas, or mineral lease; or |
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(B) royalty interest in production from an |
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existing oil, gas, or mineral lease. |
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(b) This section does not apply to a conveyance of a mineral |
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or royalty interest by an instrument that: |
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(1) is an oil, gas, or mineral lease; |
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(2) conveys a mineral or royalty interest for a term; |
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and |
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(3) provides that the interest conveyed vests in |
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possession after the expiration or termination of all or a portion |
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of the interest conveyed by an existing oil, gas, or mineral lease |
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in effect at the time of the execution of the instrument, commonly |
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referred to as a top lease. |
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(c) A conveyance instrument described by Subsection (a) |
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must include: |
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(1) a conspicuous statement printed at the top of the |
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first page of the instrument below the caption, if any, in an |
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approximate type size of at least 14 points and in substantially the |
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following form: |
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THIS IS NOT AN OIL AND GAS LEASE. YOU ARE SELLING ALL OR A PORTION OF |
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YOUR MINERAL OR ROYALTY INTERESTS IN (DESCRIPTION OF PROPERTY BEING |
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CONVEYED). |
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; and |
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(2) a conspicuous statement printed at the top of each |
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subsequent page of the instrument and immediately above the |
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signature of the person conveying the interest in an approximate |
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type size of at least 14 points and in substantially the following |
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form: |
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THIS IS NOT AN OIL AND GAS LEASE. YOU ARE SELLING ALL OR A PORTION OF |
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YOUR MINERAL OR ROYALTY INTERESTS. |
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(d) If the conveyance instrument does not include the |
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statements required by Subsection (c), the conveyance is void. |
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(e) A person who has conveyed a royalty or mineral interest |
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in a conveyance that is void under this section may bring suit |
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against the purchaser of the interest to remove the conveyance as a |
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cloud on title and may recover from the purchaser: |
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(1) all royalties and bonuses paid to the purchaser; |
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(2) court costs; |
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(3) reasonable attorney's fees; and |
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(4) exemplary damages if the trier of fact determines |
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the conduct of the purchaser is a violation of Section 27.01(c), |
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Business & Commerce Code. |
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(f) A person must bring suit under Subsection (e) not later |
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than the fourth anniversary of the date the person executed the |
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conveyance. |
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SECTION 2. The change in law made by this Act applies only |
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to an agreement entered into on or after the effective date of this |
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Act. An agreement entered into before the effective date of this |
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Act is governed by the law as it existed immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 3. This Act takes effect September 1, 2019. |