HBA-LJP, EDN H.B. 981 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 981 By: King, Tracy Energy Resources 2/16/2001 Introduced BACKGROUND 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. House Bill 981 provides that additional information be included with the monthly royalty check. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 981 amends the Natural Resources Code to provide that each check stub or attachment to a payment form to a royalty interest owner (owner) for proceeds derived from the sale of oil or gas production must include, in addition to existing requirements: _each county and the state in which the lease, property, or well is located; _the total number of gallons of each type of natural gas liquid sold; _the Btu factor for gas sold; _the price per gallon of each type of natural gas liquid sold; _the amount and purpose of any other deduction or adjustment, including any deduction for compression, dehydration, treatment, marketing, or transportation; and _the gross production during the month for which payment is being made, if more than one person makes payments. H.B. 981 requires that a person who made a payment to an owner during the preceding calendar year provide the owner a report, not later than January 31st of each year, listing each well for which the person made a payment to the owner during that year including the lease, property, unit and well identification number, the API number, and the legal description of the property on which the well is located. The bill does nor require a person to provide such a report if the person paid the owner less than $100 during the preceding calendar year. An owner is authorized to bring an action for an injunction to compel a person making a payment to comply with these provisions and is also authorized to recover court costs and reasonable attorney's fees. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.