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Texas Natural Resources Code - Section 52.131. Payment Of Royalty Generally

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§ 52.131. PAYMENT OF ROYALTY GENERALLY.  (a) Royalties 
due under a lease of state land or minerals that are required to be 
paid to the land office, including leases on land on which a free 
royalty is reserved pursuant to Section 51.201 or 51.054 of this 
title, shall be due and shall be paid as provided in this section.
	(b)  The commissioner shall by rule set the date for making 
royalty payments and for filing any reports, documents, or other 
records required to be filed by the commissioner.  However, the 
commissioner may not set the due date for royalty on oil before the 
5th day of the second month succeeding the month of production and 
may not set the due date for royalty on gas before the 15th day of 
the second month succeeding the month of production.
	(c)  Royalty payments shall be accompanied by:                                 
		(1)  an affidavit of the owner, manager, or other 
authorized agent, completed in the form and manner required by the 
land office and showing the gross amount and disposition of all oil 
and gas produced and the market value of the oil and gas;
		(2)  a copy of all documents, records, or reports 
required by the land office, confirming the gross production, 
disposition, and market value, including gas meter readings, 
pipeline receipts, gas line receipts, and other checks or memoranda 
of amount produced and put into pipelines, tanks, pools, and gas 
lines or gas storage;
		(3)  a check stub, schedule, summary, or other 
remittance advice showing by the assigned land office lease number 
the amount of royalty being paid on each lease;  and
		(4)  other reports or records that the land office may 
require to verify the gross production, disposition, and market 
value.
	(d)  The lessee has the responsibility for paying royalties 
or having royalties paid by the date provided for payment in this 
section.
	(e)  If any royalty is not paid when due but is paid before 
the 31st day after the date on which it is due, a penalty of five 
percent of the royalty due shall be added to the unpaid amount due.  
If the royalty is not paid before the 31st day after the date on 
which it is due, a penalty of an additional five percent of the 
royalty due shall be imposed.  The minimum penalty under this 
section is $25.  The penalty may not be imposed in cases of title 
dispute as to the state's portion of the royalty or to that portion 
of the royalty in dispute as to the market value of the production.
	(f)  The commissioner shall add a penalty of 25 percent to 
any delinquent royalty if a part of the delinquency is due to fraud 
or an intent to evade the provisions of this chapter.
	(g)  The annual interest rate on delinquent royalties is 12 
percent.  Interest accrues on delinquent royalties beginning 60 
days after the date on which the royalty is due.
	(h)  If any report, affidavit, supporting document, or any 
other instrument required to be filed under this chapter is not 
filed when due, the commissioner shall charge a reasonable penalty 
in an amount established by rule adopted by the commissioner.
	(i)  Interest charged under Subsection (g) of this section or 
penalties under Subsection (e), (f), or (h) of this section are in 
addition to any other right, including forfeiture, that the 
commissioner may exercise for failure to submit a report or other 
instrument.
	(j)  By rule, the board may provide procedures and standards 
for reduction of interest charged or penalties assessed under this 
section or any other interest or penalties assessed by the 
commissioner relating to unpaid or delinquent royalties.

Acts 1977, 65th Leg., p. 2455, ch. 871, art. I, § 1, eff. Sept. 1, 
1977.  Amended by Acts 1985, 69th Leg., ch. 624, § 42, 43, eff. 
Sept. 1, 1985;  Acts 1987, 70th Leg., ch. 948, § 23, 24, eff. 
Sept. 1, 1987;  Acts 1993, 73rd Leg., ch. 897, § 30, eff. Sept. 1, 
1993.

Last modified: August 10, 2007