By:  Ogden                                            S.B. No. 1545

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the payment for proceeds derived from the sale of oil

 1-2     or condensate from an oil or gas well located in this state.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subchapter J, Chapter 91, Natural Resources Code,

 1-5     is amended by adding Section 91.407 to read as follows:

 1-6           Sec. 91.407.  PAYMENT BY FIRST PURCHASER TO OPERATOR

 1-7     CONSIDERED PROCEEDS.  Absent a written notification between the

 1-8     operator and each payee, a payment by the first purchaser of crude

 1-9     oil or condensate to the operator is considered proceeds derived

1-10     from the sale of crude oil or condensate production; provided,

1-11     however, that the characterization given in the written

1-12     notification does not conclusively determine the character of the

1-13     payment by the first purchaser.

1-14           SECTION 2.  This Act takes effect September 1, 1997.

1-15           SECTION 3.  The importance of this legislation and the

1-16     crowded condition of the calendars in both houses create an

1-17     emergency and an imperative public necessity that the

1-18     constitutional rule requiring bills to be read on three several

1-19     days in each house be suspended, and this rule is hereby suspended.