SRC-JRN C.S.S.B. 1545 75(R)   BILL ANALYSIS


Senate Research Center   C.S.S.B. 1545
By: Ogden
Natural Resources
5-1-97
Committee Report (Substituted)


DIGEST 

Currently, Texas law limits the amount of money that may be received from
oil and gas proceeds by oil and gas operators.  However, the law does not
prohibit an oil or gas operator from assessing a general fee or any other
charge not authorized by the oil or gas lease.  This bill expands the
definition of oil and gas proceeds in order to protect royalty owners from
paying certain general fees. 

PURPOSE

As proposed, C.S.S.B. 1545 expands the definition of oil and gas proceeds
in order to protect royalty owners from paying certain general fees. 

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. PAYMENTS BY FIRST PURCHASER TO OPERATOR CONSIDERED PROCEEDS.
Provides that a payment by the first purchaser of crude oil or condensate
to the operator is considered proceeds derived from the sale of crude oil
or condensate production, absent a written notification between the
operator and each payee.  Provides that the characterization given in the
written notification does not conclusively determine the character of the
payment by the first purchaser. 

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.

SUMMARY OF COMMITTEE CHANGES

SECTION 1.

Deletes proposed definition for "proceeds."  Amends Chapter 91J, Natural
Resource Code, by adding Section 91.407, to provide that payment by first
purchaser to the operator is considered proceeds.