HBA-LJP, EDN H.B. 981 77(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 981
By: King, Tracy
Energy Resources
7/2/2001
Enrolled



BACKGROUND AND PURPOSE 

Prior to the 77th Legislature, state law provided that certain information
must accompany monthly royalty checks for proceeds derived from the sale of
oil or gas production.  This information often did not contain enough
detail and it was difficult for royalty owners to determine whether or not
they were 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, attachment to a payment form, or other remittance advice to a royalty
interest owner (owner) for proceeds derived from the sale of oil or gas
production must include, in addition to existing requirements: 

_a county and state in which the lease, property, or well is located; and

_a telephone number at which additional information regarding the payment
may be obtained and questions may be answered. 

H.B. 981 provides that a payor must, at a minimum, provide a description of
property from which oil or gas is being produced and the type of production
for the lease, property, or well for which payment of proceeds is being
reported if such information has not been provided in a division order.
The bill sets forth provisions regarding information about payment
deductions and adjustments, heating value, lease identification, and other
information that an owner requests.  

The bill authorizes an owner who does not receive the required information
in a timely manner to send a written request for information to the payor
by certified mail.  The bill requires the payor to provide such information
not later than the 60th day after the request is received and authorizes an
owner to bring a civil action against the payor if the information is not
received within 60 days. 

EFFECTIVE DATE

January 1, 2002.  Provisions regarding required information take effect
September 1, 2002.