HBA-ATS H.B. 3482 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3482
By: King, Tracy
Civil Practices
3/22/1999
Introduced



BACKGROUND AND PURPOSE 

Under Texas law, the applicable statute of limitations in a contract action
is four years.  The cause in a breach of contract case accrues when the
breach occurs.  Discovering when a breach occurs is difficult in any case
where the factual circumstances may make it tough for the plaintiff to know
if the defendant has breached a contract.  This is the case for the lessors
and other royalty owners of mineral leases who do not reside on the leased
property.  Because they are away from the property, they may be unaware for
several years if a breach of the lease has occurred.  Consequently, these
parties may discover that the statute of limitations has run out on their
claim for breach of contract. H.B. 3482 provides that a cause of action
arising from an interest in an oil and gas lease does not accrue until the
facts giving rise to the cause of action are discovered or, by the exercise
of reasonable diligence, should have been discovered.  The trier of fact is
responsible for determining when the facts should have been discovered by
the exercise of reasonable diligence.  

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. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 16.004, Civil Practice and Remedies Code, by
adding Subsection 16.004(d), to provide that a cause of action arising from
an interest in an oil and gas lease does not accrue until the facts giving
rise to the cause of action are discovered or, by the exercise of
reasonable diligence, should have been discovered.  Requires a fact finder
to determine what should have been discovered in the exercise of reasonable
diligence in light of the circumstances of each particular case, regardless
of whether the facts giving rise to the cause of action are inherently
undiscoverable. 

SECTION 2.  Makes application of this Act prospective.

SECTION 3.Emergency clause.
  Effective date: 90 days after adjournment.