1-1                                   AN ACT

 1-2     relating to notice to a payee of a change in the payor of oil or

 1-3     gas proceeds.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter J, Chapter 91, Natural Resources Code,

 1-6     is amended by adding Section 91.407 to read as follows:

 1-7           Sec. 91.407.  NOTICE OF CHANGE OF PAYOR.  (a) Following a

 1-8     change in payor, the new payor shall give written notice to each

 1-9     payee to whom the payor is responsible for distributing oil or gas

1-10     proceeds.  The notice must be given to the payee or the payee's

1-11     designee at the payee's or designee's most recent known address.

1-12           (b)  Upon receipt of payee's address from the operator or

1-13     lessee, the payor must provide the notice within the time permitted

1-14     for payment of proceeds and in accordance with the conditions for

1-15     payment provided by Section 91.402.  The notice must include:

1-16                 (1)  the information required by Sections 91.502(1),

1-17     (2), and (12) and Section 91.503; and

1-18                 (2)  the payor's telephone number.

1-19           (c)  The notice may be given by any writing, including a

1-20     division order, check stub, or attachment to a payment form.

1-21           (d)  A payor that is obligated to pay interest to a payee

1-22     under Section 91.403 and that does not give the payee a notice

1-23     required by this section is liable to the payee for interest under

1-24     that section at a rate that is two percent more than the rate

 2-1     provided by that section.

 2-2           SECTION 2.  This Act takes effect September 1, 1997.

 2-3           SECTION 3.  The importance of this legislation and the

 2-4     crowded condition of the calendars in both houses create an

 2-5     emergency and an imperative public necessity that the

 2-6     constitutional rule requiring bills to be read on three several

 2-7     days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I certify that H.B. No. 2981 was passed by the House on May

         15, 1997, by a non-record vote; that the House refused to concur in

         Senate amendments to H.B. No. 2981 on May 25, 1997, and requested

         the appointment of a conference committee to consider the

         differences between the two houses; and that the House adopted the

         conference committee report on H.B. No. 2981 on May 29, 1997, by a

         non-record vote.

                                             _______________________________

                                                 Chief Clerk of the House

               I certify that H.B. No. 2981 was passed by the Senate, with

         amendments, on May 23, 1997, by a viva-voce vote; at the request of

         the House, the Senate appointed a conference committee to consider

         the differences between the two houses; and that the Senate adopted

         the conference committee report on H.B. No. 2981 on May 31, 1997,

         by a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

         APPROVED:  _____________________

                            Date

                    _____________________

                          Governor