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


Office of House Bill AnalysisC.S.H.B. 3482
By: King, Tracy
Civil Practices
5/6/1999
Committee Report (Substituted)


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.  
C.S.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 required to examine the
circumstances of each particular case to determine what facts by the
exercise of reasonable diligence should have been discovered without regard
to whether the facts giving rise to the cause of action are inherently
undiscoverable. 

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 (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 the trier of fact to
examine the circumstances of each particular case to determine what facts
by the exercise of reasonable diligence should have been discovered without
regard to whether the facts giving rise to the cause of action are
inherently undiscoverable. 

SECTION 2.Effective date: September 1, 1999.
  Makes application of this Act prospective.

SECTION 3.Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 3482 differs from the original bill in the caption by making
nonsubstantive changes. 

C.S.H.B. 3482 differs from the original bill in SECTION 1 (proposed Section
16.004(d), Civil Practice and Remedies Code) by requiring the trier of fact
to examine the circumstances of each particular case to determine what
facts by the exercise of reasonable diligence should have been discovered
without regard to whether the facts giving rise to the cause of action are
inherently undiscoverable, rather than requiring the 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.  The substitute also makes nonsubstantive changes. 
 
C.S.H.B. 3482 differs from the original bill in SECTION 2 (prospective
clause) of the original by incorporating September 1, 1999, as the
effective date of this Act, and by conforming to Legislative Council
format.