By:  Sims                                              S.B. No. 973
       73R4367 MI-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to royalty reporting standards for gas wells.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section 91.501, Natural Resources Code, is
    1-5  amended to read as follows:
    1-6        Sec. 91.501.  Information Required.  (a)  If payment is made
    1-7  to a royalty interest owner from the proceeds derived from the sale
    1-8  of oil or gas production pursuant to a division order, lease,
    1-9  servitude, or other agreement, the person making the payment shall
   1-10  include the information required by Section 91.502 of this code on
   1-11  the check stub or on an attachment to the payment form.
   1-12        (b)  A person making payment to a royalty interest owner from
   1-13  the proceeds of the sale of gas production shall include for each
   1-14  gas well from which production was sold the information required by
   1-15  Section 91.502 of this code.  The person making payment shall
   1-16  specifically identify each deduction or adjustment reported under
   1-17  Section 91.502(8) of this code.
   1-18        SECTION 2.  Section 91.502, Natural Resources Code, is
   1-19  amended to read as follows:
   1-20        Sec. 91.502.  Types of Information Provided.  Each check stub
   1-21  or attachment to a payment form must include:
   1-22              (1)  the commission gas well identification number or
   1-23  the commission oil lease <lease, property, or well name or any
   1-24  lease, property, or well> identification number used to identify
    2-1  the lease, property, or well;
    2-2              (2)  the month and year during which the sales occurred
    2-3  for which payment is being made;
    2-4              (3)  the total number of barrels of oil sold or the
    2-5  total amount of gas sold from each gas well;
    2-6              (4)  the price per barrel <or per MCF> of oil <or gas>
    2-7  sold;
    2-8              (5)  the price per MCF or MMBTU of gas sold, with the
    2-9  pricing method identified;
   2-10              (6)  the total amount of state severance and other
   2-11  production taxes paid;
   2-12              (7) <(6)>  the windfall profit tax paid on the owner's
   2-13  interest;
   2-14              (8) <(7)>  any other deductions or adjustments;
   2-15              (9) <(8)>  the net value of total sales after
   2-16  deductions;
   2-17              (10) <(9)>  the owner's interest in sales from the
   2-18  lease, property, or well expressed as a decimal;
   2-19              (11) <(10)>  the owner's share of the total value of
   2-20  sales before any tax deductions;
   2-21              (12) <(11)>  the owner's share of the sales value less
   2-22  deductions; and
   2-23              (13) <(12)>  an address at which additional information
   2-24  may be obtained and questions may be answered.
   2-25        SECTION 3.  The changes made by this Act to Sections 91.501
   2-26  and 91.502, Natural Resources Code, apply only for a payment made
   2-27  to a royalty interest owner on or after the effective date of this
    3-1  Act.  A payment made before that date is governed by the law as it
    3-2  existed when the payment was made, and the former law is continued
    3-3  in effect for that purpose.
    3-4        SECTION 4.  This Act takes effect September 1, 1993.
    3-5        SECTION 5.  The importance of this legislation and the
    3-6  crowded condition of the calendars in both houses create an
    3-7  emergency and an imperative public necessity that the
    3-8  constitutional rule requiring bills to be read on three several
    3-9  days in each house be suspended, and this rule is hereby suspended.