SRC-MWN H.B. 981 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 981
By: King, Tracy (Armbrister)
Natural Resources
5/6/2001
Engrossed


DIGEST AND PURPOSE 

Under current law, certain information must accompany monthly royalty
checks for proceeds derived from the sale of oil or gas production. This
information often does not contain enough detail and it is difficult for
royalty owners to determine whether or not they are being paid correctly.
H.B. 981 provides that additional information be included with the monthly
royalty check.  

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 91L, Natural Resources Code, by adding Section
91.5001, as follows: 

 Sec. 91.5001. DEFINITION. Defines "payor."

SECTION 2. Amends Sections 91.501-91.506, Natural Resources Code, as
follows: 

Sec. 91.501. INFORMATION REQUIRED. Requires the payor, rather than the
person making the payment, if payment is made to a royalty interest owner
from the proceeds derived from the sale of oil or gas production pursuant
to a division order, lease, servitude, or other agreement, to include the
information required by Section 91.502 on the check stub, an attachment to
the payment form, or another remittance advice. Makes a conforming and
nonsubstantive change. 

Sec. 91.502.  TYPES OF INFORMATION PROVIDED.  Requires each check stub,
attachment to a payment form, or other remittance advice to include certain
information. 

Sec. 91.503. New heading: LEASE, PROPERTY, OR WELL DESCRIPTION. Requires
the payor, rather than the person making the payment, if a division order
is not provided that included the information required by Section
91.402(c)(1)(B), to, at a minimum, provide prior to or with the first
payment to which this subchapter applies the information required by
Section 91.402(c)(1)(B) for the lease, property, or well for which payment
of proceeds is being reported. Deletes text regarding Subdivision (1) of
Section 91.502. Deletes reference to lease, property, or well. 
 
Sec. 91.504. New heading: PROVIDING INFORMATION ABOUT PAYMENT DEDUCTIONS
AND ADJUSTMENTS, HEATING VALUE, OR LEASE IDENTIFICATION. Sets forth
provisions regarding providing information about payment deductions and
adjustments, heating value, or lease identification. 

Sec. 91.505. New heading: PROVIDING OTHER INFORMATION. Requires the payor,
rather than person making the payment, if a royalty interest owner requests
information or  answers to questions concerning a payment made pursuant to
this subchapter, other than information requested under Section 91.504, and
the request is made by certified mail, to respond to the request by
certified mail not later than 30 days after the request is received. 

 Sec. 91.506. EXEMPTION. Makes conforming changes

SECTION 3. Amends Chapter 91L, Natural Resources Code, by adding Section
91.507, as follows: 

Sec. 91.507. ENFORCEMENT. Sets forth provisions regarding enforcement of
this subchapter. 

SECTION 4. Effective date: January 1, 2002, except that Sections 91.501,
91.502, 91.504, and 91.506, Natural Resources Code, as added by this Act,
take effect September 1, 2002.