| 1 | 1 | | 87R8985 SLB-F |
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| 2 | 2 | | By: Bailes H.B. No. 2884 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to imposing on a payor of proceeds of production from an |
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| 8 | 8 | | oil or gas well a duty to notify a payee when payments to the payee |
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| 9 | 9 | | are suspended. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Subchapter J, Chapter 91, Natural Resources |
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| 12 | 12 | | Code, is amended by adding Section 91.409 to read as follows: |
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| 13 | 13 | | Sec. 91.409. NOTIFICATION OF SUSPENSION OF PAYMENTS. (a) |
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| 14 | 14 | | When a payor suspends a payment to a payee for a reason other than a |
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| 15 | 15 | | reason described by Section 91.402(f), the payor shall send to the |
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| 16 | 16 | | payee a written notice stating that payments have been suspended |
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| 17 | 17 | | and explaining in reasonable detail the reason for the suspension. |
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| 18 | 18 | | The notice must be sent not later than the 30th day after the date |
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| 19 | 19 | | the payment was suspended and must include the information required |
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| 20 | 20 | | by Section 91.502(1). |
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| 21 | 21 | | (b) A payor that suspends payment to a payee for a reason |
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| 22 | 22 | | other than a reason described by Section 91.402(f) without sending |
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| 23 | 23 | | to the payee notice of suspension as provided by Subsection (a) |
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| 24 | 24 | | shall pay to the payee interest on the amount of the suspended |
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| 25 | 25 | | payment for the period that begins on the 31st day after the date |
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| 26 | 26 | | the payment is suspended and ends on the date notice of the |
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| 27 | 27 | | suspension is delivered to the payee. The rate of interest to be |
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| 28 | 28 | | paid under this subsection is a rate two points higher than the rate |
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| 29 | 29 | | charged for that period on loans to depository institutions by the |
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| 30 | 30 | | New York Federal Reserve Bank, unless a different rate is specified |
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| 31 | 31 | | by a written agreement between the payor and payee. |
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| 32 | 32 | | SECTION 2. Section 91.409, Natural Resources Code, as added |
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| 33 | 33 | | by this Act, applies only to a suspension of a payment of proceeds |
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| 34 | 34 | | of production from an oil or gas well made on or after the effective |
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| 35 | 35 | | date of this Act. A suspension of a payment of proceeds of |
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| 36 | 36 | | production from an oil or gas well made before the effective date of |
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| 37 | 37 | | this Act is governed by the law in effect on the date the suspension |
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| 38 | 38 | | was made, and the former law is continued in effect for that |
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| 39 | 39 | | purpose. |
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| 40 | 40 | | SECTION 3. This Act takes effect September 1, 2021. |
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