Bill Text: TX HB3838 | 2019-2020 | 86th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to a disclosure in certain offers to purchase a mineral or royalty interest.

Spectrum: Partisan Bill (Republican 3-0)

Status: (Passed) 2019-06-10 - Effective on 9/1/19 [HB3838 Detail]

Download: Texas-2019-HB3838-Engrossed.html
 
 
  By: Bailes, et al. H.B. No. 3838
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a disclosure in certain offers to purchase a mineral or
  royalty interest.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter F, Chapter 5, Property Code, is
  amended by adding Section 5.152 to read as follows:
         Sec. 5.152.  CERTAIN PURCHASES OF MINERAL OR ROYALTY
  INTERESTS VOID. (a) This section applies only to the conveyance of
  a mineral or royalty interest by an instrument that:
               (1)  is presented to the owner of the interest by the
  person acquiring the interest;
               (2)  is titled an oil and gas lease or an oil and gas
  royalty lease or has other words in the caption or other prominently
  displayed label that indicate that the transaction is a lease of a
  mineral or royalty interest; and
               (3)  has the effect of conveying, permanently or for a
  term, all or a portion of the owner's:
                     (A)  mineral interest in lands covered by an
  existing oil, gas, or mineral lease; or
                     (B)  royalty interest in production from an
  existing oil, gas, or mineral lease.
         (b)  This section does not apply to a conveyance of a mineral
  or royalty interest by an instrument that:
               (1)  is an oil, gas, or mineral lease;
               (2)  conveys a mineral or royalty interest for a term;
  and
               (3)  provides that the interest conveyed vests in
  possession after the expiration or termination of all or a portion
  of the interest conveyed by an existing oil, gas, or mineral lease
  in effect at the time of the execution of the instrument, commonly
  referred to as a top lease.
         (c)  A conveyance instrument described by Subsection (a)
  must include:
               (1)  a conspicuous statement printed at the top of the
  first page of the instrument below the caption, if any, in an
  approximate type size of at least 14 points and in substantially the
  following form:
  THIS IS NOT AN OIL AND GAS LEASE. YOU ARE SELLING ALL OR A PORTION OF
  YOUR MINERAL OR ROYALTY INTERESTS IN (DESCRIPTION OF PROPERTY BEING
  CONVEYED).
  ; and
               (2)  a conspicuous statement printed at the top of each
  subsequent page of the instrument and immediately above the
  signature of the person conveying the interest in an approximate
  type size of at least 14 points and in substantially the following
  form:
  THIS IS NOT AN OIL AND GAS LEASE. YOU ARE SELLING ALL OR A PORTION OF
  YOUR MINERAL OR ROYALTY INTERESTS.
         (d)  If the conveyance instrument does not include the
  statements required by Subsection (c), the conveyance is void.
         (e)  A person who has conveyed a royalty or mineral interest
  in a conveyance that is void under this section may bring suit
  against the purchaser of the interest to remove the conveyance as a
  cloud on title and may recover from the purchaser:
               (1)  all royalties and bonuses paid to the purchaser
  and any successor or assign of the purchaser;
               (2)  court costs; and
               (3)  reasonable attorney's fees.
         (f)  The remedies under this section are in addition to any
  other rights or remedies a person may have at law or pursuant to
  contract.
         
         SECTION 2.  The change in law made by this Act applies only
  to an agreement entered into on or after the effective date of this
  Act.  An agreement entered into before the effective date of this
  Act is governed by the law as it existed immediately before the
  effective date of this Act, and that law is continued in effect for
  that purpose.
         SECTION 3.  This Act takes effect September 1, 2019.
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