SRC-MAX H.B. 2981 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 2981
By: Junell (Fraser)
Natural Resources
5-16-97
Engrossed


DIGEST 

Currently, Sections 91.401 et. seq., Natural Resources Code, requires
payors of oil and gas proceeds to make timely royalty payments.  These
provisions do not address the issue of notification of a change of  payor.
Often when a new payor is designated, the royalty owner is often left with
no notice and no one to contact if problems or questions arise. This bill
sets forth provisions regarding a notice to a payee of a change in the
payor of oil of gas proceeds.
PURPOSE

As proposed, H.B. 2981 sets forth provisions regarding a notice to a payee
of a change in the payor of oil of gas proceeds.   

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 91J, Natural Resources Code, by adding Section
91.407, as follows: 

Sec.  91.407.  NOTICE OF CHANGE OF PAYOR.  Requires a new payor to give
written notice to each payee to whom the payor is responsible for
distributing oil or gas proceeds. Requires the notice to be given to the
payee or the payee's designee at the payee's or designee's most recent
know address.  Requires the payor to provide the notice within the time
permitted for payment of proceeds and in accordance with the conditions
for payment provided by Section 91.402.  Requires the notice to include
certain information.  Authorizes the notice to be given by any writing,
including a division order, check stub, or attachment to a payment form.
Provides that the payor is obligated to pay interest to a payee under
Section 91.403, and that does not give the payee a notice required by this
section is liable to the payee for interest under that section at certain
rate. 

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.