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A BILL TO BE ENTITLED
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AN ACT
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relating to imposing on a payor of proceeds of production from an |
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oil or gas well a duty to notify a payee when payments to the payee |
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are suspended. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter J, Chapter 91, Natural Resources |
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Code, is amended by adding Section 91.409 to read as follows: |
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Sec. 91.409. NOTIFICATION OF SUSPENSION OF PAYMENTS. (a) |
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When a payor suspends a payment to a payee for a reason other than a |
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reason described by Section 91.402(f), the payor shall send to the |
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payee a written notice stating that payments have been suspended |
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and explaining in reasonable detail the reason for the suspension. |
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The notice must be sent not later than the 30th day after the date |
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the payment was suspended and must include the information required |
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by Section 91.502(1). |
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(b) A payor that suspends payment to a payee for a reason |
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other than a reason described by Section 91.402(f) without sending |
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to the payee notice of suspension as provided by Subsection (a) |
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shall pay to the payee interest on the amount of the suspended |
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payment for the period that begins on the 31st day after the date |
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the payment is suspended and ends on the date notice of the |
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suspension is delivered to the payee. The rate of interest to be |
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paid under this subsection is a rate two points higher than the rate |
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charged for that period on loans to depository institutions by the |
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New York Federal Reserve Bank, unless a different rate is specified |
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by a written agreement between the payor and payee. |
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SECTION 2. Section 91.409, Natural Resources Code, as added |
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by this Act, applies only to a suspension of a payment of proceeds |
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of production from an oil or gas well made on or after the effective |
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date of this Act. A suspension of a payment of proceeds of |
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production from an oil or gas well made before the effective date of |
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this Act is governed by the law in effect on the date the suspension |
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was made, and the former law is continued in effect for that |
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purpose. |
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SECTION 3. This Act takes effect September 1, 2021. |