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A BILL TO BE ENTITLED
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AN ACT
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relating to the applicability of provisions governing payment of |
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the proceeds derived from the sale of oil or gas production to |
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nonparticipating royalty interest owners. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 91.401, Natural Resources Code, is |
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amended by adding Subdivision (5) to read as follows: |
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(5) "Nonparticipating royalty interest owner" means a |
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mineral interest owner whose interest was conveyed without the |
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right to negotiate lease terms or receive a bonus. |
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SECTION 2. Section 91.402, Natural Resources Code, is |
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amended by amending Subsection (a) and adding Subsection (a-1) to |
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read as follows: |
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(a) In this section, the term "payee" includes a |
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nonparticipating royalty interest owner. |
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(a-1) The proceeds derived from the sale of oil or gas |
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production from an oil or gas well located in this state must be |
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paid to each payee by payor on or before 120 days after the end of |
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the month of first sale of production from the well. After that |
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time, payments must be made to each payee on a timely basis |
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according to the frequency of payment specified in a lease or other |
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written agreement between payee and payor. If the lease or other |
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agreement does not specify the time for payment, subsequent |
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proceeds must be paid no later than: |
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(1) 60 days after the end of the calendar month in |
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which subsequent oil production is sold; or |
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(2) 90 days after the end of the calendar month in |
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which subsequent gas production is sold. |
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SECTION 3. Section 91.5001, Natural Resources Code, is |
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amended to read as follows: |
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Sec. 91.5001. DEFINITIONS [DEFINITION]. In this |
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subchapter: |
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(1) "Nonparticipating royalty interest owner" means a |
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mineral interest owner whose interest was conveyed without the |
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right to negotiate lease terms or receive a bonus. |
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(2) "Payor"[, "payor"] has the meaning assigned by |
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Section 91.401. |
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SECTION 4. Section 91.504, Natural Resources Code, is |
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amended by amending Subsection (a) and adding Subsection (a-1) to |
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read as follows: |
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(a) In this section, "royalty interest owner" includes a |
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nonparticipating royalty interest owner. |
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(a-1) If the payor does not explain on the check stub, |
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attachment to the payment form, or other remittance advice, or by a |
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separate mailing, deductions from or adjustments to payments, the |
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payor must provide an explanation by certified mail not later than |
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the 60th day after the date the payor receives a request from the |
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royalty interest owner. The royalty interest owner must send the |
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request by certified mail. |
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SECTION 5. Section 91.505, Natural Resources Code, is |
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amended to read as follows: |
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Sec. 91.505. PROVIDING OTHER INFORMATION. (a) In this |
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section, "royalty interest owner" includes a nonparticipating |
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royalty interest owner. |
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(b) If a royalty interest owner requests information or |
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answers to questions concerning a payment made pursuant to this |
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subchapter, other than information requested under Section 91.504, |
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and the request is made by certified mail, the payor must respond to |
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the request by certified mail not later than 30 days after the |
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request is received. |
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SECTION 6. The change in law made by this Act applies only |
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to a division order issued on or after the effective date of this |
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Act. A division order issued before the effective date of this Act |
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is governed by the law in effect on the date the division order was |
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issued, and the former law is continued in effect for that purpose. |
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SECTION 7. This Act takes effect September 1, 2021. |