Texas 2021 - 87th Regular

Texas House Bill HB4218 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 4218
	1	+	By: Craddick (Senate Sponsor - Hughes) H.B. No. 4218
	2	+	(In the Senate - Received from the House April 21, 2021;
	3	+	May 4, 2021, read first time and referred to Committee on Natural
	4	+	Resources & Economic Development; May 19, 2021, reported favorably
	5	+	by the following vote: Yeas 7, Nays 0; May 19, 2021, sent to
	6	+	printer.)
	7	+	Click here to see the committee vote
2	8
3	9
	10	+	A BILL TO BE ENTITLED
4	11		AN ACT
5	12		relating to a cause of action for the bad faith washout of an
6	13		overriding royalty interest in an oil and gas lease.
7	14		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	15		SECTION 1. Title 4, Property Code, is amended by adding
9	16		Chapter 31 to read as follows:
10	17		CHAPTER 31. BAD FAITH WASHOUT OF OVERRIDING ROYALTY INTEREST IN OIL
11	18		AND GAS LEASE
12	19		Sec. 31.001. DEFINITIONS. In this chapter:
13	20		(1) "Bad faith" means the conscious taking of action
14	21		for the purpose of washing out all or part of an overriding royalty
15	22		interest.
16	23		(2) "Washout" means the elimination or reduction of an
17	24		overriding royalty interest in an oil and gas lease by the
18	25		forfeiture or surrender of the oil and gas lease by a lessee or the
19	26		lessee's successors or assigns and the subsequent reacquisition of
20	27		a lease, or all or part of the mineral estate associated with the
21	28		lease, by the lessee or the lessee's successors, assigns,
22	29		contractors, or subsidiaries on all or part of the same land, free
23	30		of the overriding royalty interest.
24	31		Sec. 31.002. CAUSE OF ACTION FOR BAD FAITH WASHOUT. A
25	32		person may bring a cause of action for a bad faith washout of the
26	33		person's overriding royalty interest in an oil and gas lease. The
27	34		person is entitled to a remedy under this chapter if the person
28	35		proves by a preponderance of the evidence that:
29	36		(1) the person owned or had a legal right to the
30	37		overriding royalty interest;
31	38		(2) the defendant had control over the oil and gas
32	39		lease burdened by the overriding royalty interest;
33	40		(3) the defendant caused a washout of the person's
34	41		overriding royalty interest; and
35	42		(4) the defendant acted in bad faith by knowingly or
36	43		intentionally causing the washout.
37	44		Sec. 31.003. VENUE. An owner of an overriding royalty
38	45		interest in an oil and gas lease may bring an action under this
39	46		chapter in a district court of a county in which any part of the
40	47		property subject to the oil and gas lease is located.
41	48		Sec. 31.004. REMEDIES; COSTS AND FEES. (a) An owner of an
42	49		overriding royalty interest who prevails in an action under this
43	50		chapter may recover:
44	51		(1) actual damages;
45	52		(2) enforcement of a constructive trust on the oil and
46	53		gas lease or mineral estate acquired to accomplish the washout of
47	54		the overriding royalty interest; and
48	55		(3) court costs and attorney's fees.
49	56		(b) The remedies provided by this chapter are cumulative of
50	57		other remedies provided by common law or statute.
51	58		Sec. 31.005. LIMITATION ON FILING ACTION. A person must
52	59		bring an action under this chapter not later than the second
53	60		anniversary of the date the person obtained actual knowledge that
54	61		the washout occurred.
55	62		SECTION 2. Chapter 31, Property Code, as added by this Act,
56	63		applies only to a washout that occurs on or after the effective date
57	64		of this Act. A washout that occurred before that date is governed
58	65		by the law in effect immediately before the effective date of this
59	66		Act, and that law is continued in effect for that purpose.
60	67		SECTION 3. This Act takes effect September 1, 2021.
61		-	______________________________ ______________________________
62		-	President of the Senate Speaker of the House
63		-	I certify that H.B. No. 4218 was passed by the House on April
64		-	21, 2021, by the following vote: Yeas 148, Nays 0, 1 present, not
65		-	voting.
66		-	______________________________
67		-	Chief Clerk of the House
68		-	I certify that H.B. No. 4218 was passed by the Senate on May
69		-	27, 2021, by the following vote: Yeas 31, Nays 0.
70		-	______________________________
71		-	Secretary of the Senate
72		-	APPROVED: _____________________
73		-	Date
74		-	_____________________
75		-	Governor
	68	+	* * * * *