By King of Uvalde H.B. No. 981
77R1693 QS-D
A BILL TO BE ENTITLED
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. Sections 91.502 and 91.506, Natural Resources
1-5 Code, are amended to read as follows:
1-6 Sec. 91.502. TYPES OF INFORMATION PROVIDED. (a) Each check
1-7 stub or attachment to a payment form must include:
1-8 (1) the lease, property, or well name or any lease,
1-9 property, or well identification number used to identify the lease,
1-10 property, or well and each county and the state in which the lease,
1-11 property, or well is located;
1-12 (2) the month and year during which the sales occurred
1-13 for which payment is being made;
1-14 (3) the total number of barrels of oil or the total
1-15 amount of gas sold and the total number of gallons of each type of
1-16 natural gas liquid sold;
1-17 (4) the Btu factor for gas sold;
1-18 (5) the price per barrel or per MCF of oil or gas sold
1-19 and the price per gallon of each type of natural gas liquid sold;
1-20 (6) [(5)] the total amount of state severance and
1-21 other production taxes paid;
1-22 (7) [(6)] the windfall profit tax paid on the owner's
1-23 interest;
1-24 (8) the amount and purpose of [(7)] any other
2-1 deduction [deductions] or adjustment, including any deduction for
2-2 compression, dehydration, treatment, marketing, or transportation
2-3 [adjustments];
2-4 (9) [(8)] the net value of total sales after
2-5 deductions;
2-6 (10) [(9)] the owner's interest in sales from the
2-7 lease, property, or well expressed as a decimal;
2-8 (11) [(10)] the owner's share of the total value of
2-9 sales before any tax deductions;
2-10 (12) [(11)] the owner's share of the sales value less
2-11 deductions; and
2-12 (13) [(12)] an address at which additional information
2-13 may be obtained and questions may be answered.
2-14 (b) If more than one person makes payments to royalty
2-15 interest owners from the proceeds derived from the sale of oil,
2-16 gas, and natural gas liquids produced from a lease, property, or
2-17 well, each check stub or attachment to a payment form must also
2-18 include the gross production during the month for which payment is
2-19 being made.
2-20 (c) Not later than January 31 of each year, a person who
2-21 made a payment to a royalty interest owner during the preceding
2-22 calendar year shall provide the owner a report listing each well
2-23 for which the person made a payment to the owner during that year,
2-24 including:
2-25 (1) the lease, property, unit and well identification
2-26 number, and API number, as shown by the records of the commission;
2-27 and
3-1 (2) the legal description of the property on which the
3-2 well is located.
3-3 Sec. 91.506. EXEMPTION. (a) If the information required by
3-4 Sections 91.502(a) and (b) [Section 91.502 of this code] is
3-5 provided in some other manner on a monthly basis, the person making
3-6 the payment is not required to include the information on the check
3-7 stub or attachment to the payment form.
3-8 (b) A person is not required to provide a royalty interest
3-9 owner a report under Section 91.502(c) if the person paid the owner
3-10 less than $100 during the preceding calendar year.
3-11 SECTION 2. Subchapter L, Chapter 91, Natural Resources Code,
3-12 is amended by adding Section 91.507 to read as follows:
3-13 Sec. 91.507. INJUNCTION. A royalty interest owner may bring
3-14 an action for an injunction to compel a person making a payment to
3-15 comply with this subchapter. A royalty interest owner who prevails
3-16 in an action under this section may recover court costs and
3-17 reasonable attorney's fees.
3-18 SECTION 3. Section 91.407(b), Natural Resources Code, is
3-19 amended to read as follows:
3-20 (b) Upon receipt of payee's address from the operator or
3-21 lessee, the payor must provide the notice within the time permitted
3-22 for payment of proceeds and in accordance with the conditions for
3-23 payment provided by Section 91.402. The notice must include:
3-24 (1) the information required by Sections 91.502(a)(1),
3-25 (2), and (13) [91.502(1), (2), and (12)] and Section 91.503; and
3-26 (2) the payor's telephone number.
3-27 SECTION 4. Section 91.408(a), Natural Resources Code, is
4-1 amended to read as follows:
4-2 (a) A payor of proceeds from the sale of gas produced from a
4-3 tight formation as defined by Section 29(c)(2)(B), Internal Revenue
4-4 Code of 1986, annually shall furnish the payee a statement
4-5 providing the information necessary to compute the federal income
4-6 tax credit provided by that section for the gas for which payment
4-7 was made in the preceding year, including:
4-8 (1) information as described in Section 91.502(a)(1)
4-9 [91.502(1) of this code]; and
4-10 (2) the volume of the gas, measured in:
4-11 (A) thousands of cubic feet and heating value;
4-12 or
4-13 (B) millions of British thermal units for each
4-14 thousand cubic feet.
4-15 SECTION 5. Section 91.503, Natural Resources Code, is
4-16 amended to read as follows:
4-17 Sec. 91.503. LEASE, PROPERTY, OR WELL NAME. If a lease,
4-18 property, or well identification number is used under [Subdivision
4-19 (1) of] Section 91.502(a)(1) [91.502 of this code], the person
4-20 making the payment must provide prior to or with the first payment
4-21 to which this subchapter applies the lease, property, or well name
4-22 to which the lease, property, or well number refers.
4-23 SECTION 6. This Act takes effect immediately if it receives
4-24 a vote of two-thirds of all the members elected to each house, as
4-25 provided by Section 39, Article III, Texas Constitution. If this
4-26 Act does not receive the vote necessary for immediate effect, this
4-27 Act takes effect September 1, 2001.