1-1     By:  Junell (Senate Sponsor - Fraser)                 H.B. No. 2981

 1-2           (In the Senate - Received from the House May 16, 1997;

 1-3     May 16, 1997, read first time and referred to Committee on Natural

 1-4     Resources; May 18, 1997, reported favorably by the following vote:

 1-5     Yeas 10, Nays 0; May 18, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to notice to a payee of a change in the payor of oil or

 1-9     gas proceeds.

1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-11           SECTION 1.  Subchapter J, Chapter 91, Natural Resources Code,

1-12     is amended by adding Section 91.407 to read as follows:

1-13           Sec. 91.407.  NOTICE OF CHANGE OF PAYOR.  (a) Following a

1-14     change in payor, the new payor shall give written notice to each

1-15     payee to whom the payor is responsible for distributing oil or gas

1-16     proceeds.  The notice must be given to the payee or the payee's

1-17     designee at the payee's or designee's most recent known address.

1-18           (b)  Upon receipt of payee's address from the operator or

1-19     lessee, the payor must provide the notice within the time permitted

1-20     for payment of proceeds and in accordance with the conditions for

1-21     payment provided by Section 91.402.  The notice must include:

1-22                 (1)  the information required by Sections 91.502(1),

1-23     (2), and (12) and Section 91.503; and

1-24                 (2)  the payor's telephone number.

1-25           (c)  The notice may be given by any writing, including a

1-26     division order, check stub, or attachment to a payment form.

1-27           (d)  A payor that is obligated to pay interest to a payee

1-28     under Section 91.403 and that does not give the payee a notice

1-29     required by this section is liable to the payee for interest under

1-30     that section at a rate that is two percent more than the rate

1-31     provided by that section.

1-32           SECTION 2.  This Act takes effect September 1, 1997.

1-33           SECTION 3.  The importance of this legislation and the

1-34     crowded condition of the calendars in both houses create an

1-35     emergency and an imperative public necessity that the

1-36     constitutional rule requiring bills to be read on three several

1-37     days in each house be suspended, and this rule is hereby suspended.

1-38                                  * * * * *