Relating to the imposition on a payor of proceeds of production from an oil or gas well of a duty to notify a payee when payments to the payee are suspended.

89(R) HB 5105 - Introduced version - Bill Text

By: Rosenthal

H.B. No. 5105

A BILL TO BE ENTITLED

AN ACT

relating to the imposition on a payor of proceeds of production from

an oil or gas well of a duty to notify a payee when payments to the

payee are suspended.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter J, Chapter 91, Natural Resources

Code, is amended by adding Section 91.409 to read as follows:

Sec.

91.409.

NOTIFICATION OF SUSPENSION OF PAYMENTS. (a)

When a payor suspends a payment to a payee for a reason other than a

reason described by Section 91.402(f), the payor shall send to the

payee a written notice stating that payments have been suspended

and explaining in reasonable detail the reason for the suspension.

The notice must be sent not later than the 30th day after the date

the payment was suspended and must include the information required

by Section 91.502(1).

(b)

A payor that suspends payment to a payee for a reason

other than a reason described by Section 91.402(f) without sending

to the payee notice of suspension as provided by Subsection (a)

shall pay to the payee interest on the amount of the suspended

payment for the period that begins on the 31st day after the date

the payment is suspended and ends on the date notice of the

suspension is delivered to the payee. The rate of interest to be

paid under this subsection is a rate two points higher than the rate

charged for that period on loans to depository institutions by the

New York Federal Reserve Bank, unless a different rate is specified

by a written agreement between the payor and payee.

SECTION 2. Section 91.409, Natural Resources Code, as added

by this Act, applies only to a suspension of a payment of proceeds

of production from an oil or gas well made on or after the effective

date of this Act. A suspension of a payment of proceeds of

production from an oil or gas well made before the effective date of

this Act is governed by the law in effect on the date the suspension

was made, and the former law is continued in effect for that

purpose.

SECTION 3. This Act takes effect September 1, 2025.