74R6934 SMH-F
By Craddick H.B. No. 1593
Substitute the following for H.B. No. 1593:
By Holzheauser C.S.H.B. No. 1593
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to payment for the proceeds of oil or gas production.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Sections 91.402(d) and (f), Natural Resources
1-5 Code, are amended to read as follows:
1-6 (d) In the alternative, the provisions of Subsection (c) of
1-7 this section may be satisfied by a division order for oil payments
1-8 in substantially the following form and content:
1-9 DIVISION ORDER
1-10 TO: (Payor) Property No.
1-11 ______________________________ ______________________________
1-12 ______________________________ ______________________________
1-13 ______________________________ Effective
1-14 (Date)
1-15 The undersigned severally and not jointly certifies it is the
1-16 legal owner of the interest set out below of all the oil and
1-17 related liquid hydrocarbons produced from the property described
1-18 below:
1-19 OPERATOR:
1-20 Property name:
1-21 County: State:
1-22 Legal Description:
1-23 ------------------------------------------------------------------
1-24 OWNER NO. TAX I.D./SOC. SEC. NO. PAYEE
2-1 DIVISION OF INTEREST
2-2 ------------------------------------------------------------------
2-3 ------------------------------------------------------------------
2-4 THIS AGREEMENT DOES NOT AMEND ANY LEASE OR OPERATING
2-5 AGREEMENT BETWEEN THE INTEREST OWNERS AND THE LESSEE OR OPERATOR OR
2-6 ANY OTHER CONTRACTS FOR THE PURCHASE OF OIL OR GAS.
2-7 The following provisions apply to each interest owner
2-8 ("owner") who executes this agreement:
2-9 TERMS OF SALE: The undersigned will be paid in accordance
2-10 with the division of interests set out above. The payor shall pay
2-11 all parties at the price agreed to by the operator for oil to be
2-12 sold pursuant to this division order. Purchaser shall compute
2-13 quantity and make corrections for gravity and temperature and make
2-14 deductions for impurities.
2-15 PAYMENT: From the effective date, payment is to be made
2-16 monthly by payor's check, based on this division of interest, for
2-17 oil run during the preceding calendar month from the property
2-18 listed above, less taxes required by law to be deducted and
2-19 remitted by payor as purchaser. Payments of less than $100 <$25>
2-20 may be accrued before disbursement until the total amount equals
2-21 $100 <$25> or more, or until 12 months' proceeds accumulate
2-22 <December 31 of each year>, whichever occurs first. However, the
2-23 payor may hold accumulated proceeds of less than $10 until
2-24 production ceases or the payor's responsibility for making payment
2-25 for production ceases, whichever occurs first. Payee agrees to
2-26 refund to payor any amounts attributable to an interest or part of
2-27 an interest that payee does not own.
3-1 INDEMNITY: The owner agrees to indemnify and hold payor
3-2 harmless from all liability resulting from payments made to the
3-3 owner in accordance with such division of interest, including but
3-4 not limited to attorney fees or judgments in connection with any
3-5 suit that affects the owner's interest to which payor is made a
3-6 party.
3-7 DISPUTE; WITHHOLDING OF FUNDS: If a suit is filed that
3-8 affects the interest of the owner, written notice shall be given to
3-9 payor by the owner together with a copy of the complaint or
3-10 petition filed.
3-11 In the event of a claim or dispute that affects title to the
3-12 division of interest credited herein, payor is authorized to
3-13 withhold payments accruing to such interest, without interest
3-14 unless otherwise required by applicable statute, until the claim or
3-15 dispute is settled.
3-16 TERMINATION: Termination of this agreement is effective on
3-17 the first day of the month that begins after the 30th day after the
3-18 date written notice of termination is received by either party.
3-19 NOTICES: The owner agrees to notify payor in writing of any
3-20 change in the division of interest, including changes of interest
3-21 contingent on payment of money or expiration of time.
3-22 No change of interest is binding on payor until the recorded
3-23 copy of the instrument of change or documents satisfactorily
3-24 evidencing such change are furnished to payor at the time the
3-25 change occurs.
3-26 Any change of interest shall be made effective on the first
3-27 day of the month following receipt of such notice by payor.
4-1 Any correspondence regarding this agreement shall be
4-2 furnished to the addresses listed unless otherwise advised by
4-3 either party.
4-4 In addition to the legal rights provided by the terms and
4-5 provisions of this division order, an owner may have certain
4-6 statutory rights under the laws of this state.
4-7 Signature of Social Security/
4-8 Witness Interest Owner Tax I.D. No. Address
4-9 _____________ ______________ ______________ ______________
4-10 _____________ ______________ ______________ ______________
4-11 _____________ ______________ ______________ ______________
4-12 Failure to furnish your Social Security/Tax I.D. number will
4-13 result in <20 percent> withholding tax in accordance with federal
4-14 law, and any tax withheld will not be refundable by payor.
4-15 (f) Payment <Payments> may be remitted to a payee <payees>
4-16 annually for the aggregate of up to 12 months' accumulation of
4-17 proceeds<,> if the payor owes the payee a total amount of $100
4-18 <owed is $25> or less for production from all oil or gas wells for
4-19 which the payor must pay the payee. However, the payor may hold
4-20 accumulated proceeds of less than $10 until production ceases or
4-21 the payor's responsibility for making payment for production
4-22 ceases, whichever occurs first. On the written request of the
4-23 payee, the payor shall remit payment of accumulated proceeds to the
4-24 payee annually if the payor owes the payee less than $10. On the
4-25 written request of the payee, the payor shall remit payment of
4-26 proceeds to the payee monthly if the payor owes the payee more than
4-27 $25 but less than $100.
5-1 SECTION 2. The importance of this legislation and the
5-2 crowded condition of the calendars in both houses create an
5-3 emergency and an imperative public necessity that the
5-4 constitutional rule requiring bills to be read on three several
5-5 days in each house be suspended, and this rule is hereby suspended,
5-6 and that this Act take effect and be in force from and after its
5-7 passage, and it is so enacted.