1-1 AN ACT
1-2 relating to oil and gas royalty reporting standards.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter L, Chapter 91, Natural Resources Code,
1-5 is amended by adding Section 91.5001 to read as follows:
1-6 Sec. 91.5001. DEFINITION. In this subchapter, "payor" has
1-7 the meaning assigned by Section 91.401.
1-8 SECTION 2. Sections 91.501-91.506, Natural Resources Code,
1-9 are amended to read as follows:
1-10 Sec. 91.501. INFORMATION REQUIRED. If payment is made to a
1-11 royalty interest owner from the proceeds derived from the sale of
1-12 oil or gas production pursuant to a division order, lease,
1-13 servitude, or other agreement, the payor [person making the
1-14 payment] shall include the information required by Section 91.502
1-15 [of this code] on the check stub, [or on] an attachment to the
1-16 payment form, or another remittance advice.
1-17 Sec. 91.502. TYPES OF INFORMATION PROVIDED. Each check
1-18 stub, [or] attachment to a payment form, or other remittance advice
1-19 must include:
1-20 (1) the lease, property, or well name, [or] any lease,
1-21 property, or well identification number used to identify the lease,
1-22 property, or well, and a county and state in which the lease,
1-23 property, or well is located;
1-24 (2) the month and year during which the sales occurred
2-1 for which payment is being made;
2-2 (3) the total number of barrels of oil or the total
2-3 amount of gas sold;
2-4 (4) the price per barrel or per MCF of oil or gas
2-5 sold;
2-6 (5) the total amount of state severance and other
2-7 production taxes paid;
2-8 (6) the windfall profit tax paid on the owner's
2-9 interest;
2-10 (7) any other deductions or adjustments;
2-11 (8) the net value of total sales after deductions;
2-12 (9) the owner's interest in sales from the lease,
2-13 property, or well expressed as a decimal;
2-14 (10) the owner's share of the total value of sales
2-15 before any tax deductions;
2-16 (11) the owner's share of the sales value less
2-17 deductions; and
2-18 (12) an address and telephone number at which
2-19 additional information regarding the payment may be obtained and
2-20 questions may be answered.
2-21 Sec. 91.503. LEASE, PROPERTY, OR WELL DESCRIPTION [NAME]. If
2-22 a division order is not provided that includes the information
2-23 required by Section 91.402(c)(1)(B) [lease, property, or well
2-24 identification number is used under Subdivision (1) of Section
2-25 91.502 of this code], the payor [person making the payment] must,
2-26 at a minimum, provide prior to or with the first payment to which
2-27 this subchapter applies the information required by Section
3-1 91.402(c)(1)(B) for the lease, property, or well for which payment
3-2 of proceeds is being reported [name to which the lease, property,
3-3 or well number refers].
3-4 Sec. 91.504. PROVIDING INFORMATION ABOUT [EXPLANATION OF
3-5 CERTAIN] PAYMENT DEDUCTIONS AND ADJUSTMENTS, HEATING VALUE, OR
3-6 LEASE IDENTIFICATION. (a) If the payor [person making a payment]
3-7 does not explain on the check stub, [or] attachment to the payment
3-8 form, or other remittance advice, or by a separate mailing,
3-9 deductions from or adjustments to payments, the payor [person
3-10 making the payment] must provide an explanation by certified mail
3-11 not later than the 60th day after the date the payor receives a
3-12 [on] request from [of] the royalty interest owner. The royalty
3-13 interest owner must send the request by certified mail.
3-14 (b) If a royalty interest owner requests information by
3-15 certified mail concerning the heating value of the gas produced or
3-16 sold from the lease, property, or well in which the owner has an
3-17 interest, the payor must, not later than the 60th day after the
3-18 date the payor receives the request, provide by certified mail:
3-19 (1) a copy of the Form G-1 filed with the commission;
3-20 or
3-21 (2) a check stub or separate statement that includes
3-22 the information.
3-23 (c) A royalty interest owner who received a payment from a
3-24 payor during the preceding calendar year may request in writing by
3-25 certified mail that the payor provide a report listing the
3-26 following information for the preceding year:
3-27 (1) each lease, property, or well identification
4-1 number;
4-2 (2) each lease, property, or well name;
4-3 (3) the field name;
4-4 (4) the county and state in which the property is
4-5 located; and
4-6 (5) the commission lease identification number or
4-7 commingling permit number or any other identification number under
4-8 which the production for the lease, property, or well is being
4-9 reported to the state.
4-10 (d) A payor who receives a request for information under
4-11 Subsection (c) shall provide the information by certified mail not
4-12 later than the 60th day after the date the payor receives the
4-13 request.
4-14 (e) At least once every 12 months, a payor shall provide the
4-15 following statement to each royalty interest owner to whom the
4-16 payor makes a payment:
4-17 Section 91.504, Texas Natural Resources Code, gives an
4-18 owner of a royalty interest in oil or gas produced in
4-19 Texas the right to request from a payor information
4-20 about itemized deductions, the heating value of the
4-21 gas, and the Railroad Commission of Texas
4-22 identification number for the lease, property, or well
4-23 that may not have been provided to the royalty interest
4-24 owner. The request must be in writing and must be made
4-25 by certified mail. A payor must respond to a request
4-26 regarding itemized deductions, the heating value of the
4-27 gas, or the Railroad Commission of Texas identification
5-1 number by certified mail not later than the 60th day
5-2 after the date the request is received. Additional
5-3 information regarding production and related
5-4 information may be obtained by contacting the Railroad
5-5 Commission of Texas' Office of Public Assistance or
5-6 accessing the commission's website.
5-7 Sec. 91.505. PROVIDING OTHER INFORMATION. If a royalty
5-8 interest owner requests information or answers to questions
5-9 concerning a payment made pursuant to this subchapter, other than
5-10 information requested under Section 91.504, and the request is made
5-11 by certified mail, the payor [person making the payment] must
5-12 respond to the request by certified mail not later than 30 days
5-13 after the request is received.
5-14 Sec. 91.506. EXEMPTION. If the information required by
5-15 Section 91.502 [of this code] is provided in some other manner on a
5-16 monthly basis, the payor [person making the payment] is not
5-17 required to include the information on the check stub, [or]
5-18 attachment to the payment form, or other remittance advice.
5-19 SECTION 3. Subchapter L, Chapter 91, Natural Resources Code,
5-20 is amended by adding Section 91.507 to read as follows:
5-21 Sec. 91.507. ENFORCEMENT. (a) A royalty interest owner who
5-22 does not receive the information required to be provided under
5-23 Section 91.502 or 91.503 in a timely manner may send a written
5-24 request for the information to the payor by certified mail.
5-25 (b) Not later than the 60th day after the date the payor
5-26 receives the written request for information under this section,
5-27 the payor shall provide the requested information by certified
6-1 mail.
6-2 (c) If a payor fails to provide the requested information
6-3 within the period specified by Subsection (b), either party may
6-4 request mediation.
6-5 (d) If the royalty interest owner makes a written request
6-6 for information under Section 91.504 or this section and the payor
6-7 does not provide the information within the 60-day period, the
6-8 royalty interest owner may bring a civil action against the payor
6-9 to enforce the provisions of Section 91.504 or this section, as
6-10 applicable. The prevailing party is entitled to recover reasonable
6-11 court costs and attorney's fees.
6-12 SECTION 4. This Act takes effect January 1, 2002, except
6-13 that Sections 91.501, 91.502, 91.504, and 91.506, Natural Resources
6-14 Code, as amended by this Act, and Section 91.507, Natural Resources
6-15 Code, as added by this Act, take effect September 1, 2002.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 981 was passed by the House on April
27, 2001, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 981 on May 25, 2001, 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. 981 on May 27, 2001, by a
non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 981 was passed by the Senate, with
amendments, on May 22, 2001, 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. 981 on May 27, 2001, by
a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: __________________________
Date
__________________________
Governor