H.B. No. 1920

	AN ACT
	relating to the remedies available in connection with certain
	disputes between producers of natural gas and persons who gather or
	transport the gas.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subchapter C, Chapter 85, Natural Resources
	Code, is amended by adding Section 85.065 to read as follows:
	Sec. 85.065.  INFORMAL COMPLAINT PROCESS REGARDING LOSS OF
	OR INABILITY TO ACCOUNT FOR NATURAL GAS GATHERED OR TRANSPORTED.
	(a)  A producer may submit a written request to a person who gathers
	or transports gas for the producer for an explanation of any loss of
	or inability to account for the gas tendered to the person by the
	producer. The request may ask the person to provide any or all of
	the information that would be required to be included in an
	accounting under Subsection (c). Not later than the 30th day after
	the date the person receives the request from the producer, the
	person must provide the producer a written explanation of any loss
	of or inability to account for the gas tendered to the person by the
	producer. The response must include any relevant information
	requested by the producer that is available to the person and that
	would be required to be included in an accounting under Subsection
	(c).
	(b)  If a producer submits a request under Subsection (a) to
	a person who gathers or transports gas for the producer and the
	person provides an inadequate explanation of any loss of or
	inability to account for the gas, or fails to provide any
	explanation of any loss of or inability to account for the gas by
	the deadline provided by that subsection, the producer may file
	with the commission an informal complaint against the person. An
	informal complaint may not be filed before the 30th day after the
	end of the production period covered by the complaint. An informal
	complaint must:
	(1)  specify the production period covered by the
	complaint;
	(2)  state that at least 30 days have elapsed since the
	end of the production period covered by the complaint; and
	(3)  if the producer metered the volume of gas tendered
	to the person who gathered or transported the gas:
	(A)  describe the type of meter used; and
	(B)  state the date the meter was last calibrated.
	(c)  Not later than the 14th day after the date the complaint
	is filed, the person who gathered or transported the gas shall
	provide to the producer and the commission an accounting of the gas
	tendered to the person by the producer for gathering or transport
	during the production period covered by the complaint. The
	accounting may be provided on a thousand cubic feet or a million
	British thermal unit basis, as applicable, and must include the
	information the commission determines to be necessary to resolve an
	informal complaint under this section, which may include:
	(1)  the amount of gas tendered by the producer from
	each well that has a meter;
	(2)  a laboratory analysis of the composition and
	heating value of the gas and other substances tendered by the
	producer, if such an analysis has been performed;
	(3)  if available, a schematic drawing of the person's
	system for gathering or transporting gas that shows:
	(A)  each meter type;
	(B)  the date each meter was last calibrated;
	(C)  the accuracy of each meter; and
	(D)  all equipment that alters, disposes of, or
	otherwise consumes any of the gas tendered to the person;
	(4)  the estimated amount of gas used for fuel, flared,
	or vented for construction, repair, maintenance, or other
	operational uses and, if the information is available, the location
	of that use;
	(5)  the estimated amount of contaminants or other
	impurities removed from the gas and the location at which the
	impurities were removed;
	(6)  the estimated amount of liquid hydrocarbons and
	condensate removed from the gas and the location at which the liquid
	hydrocarbons and condensate were removed;
	(7)  the estimated amount of gas lost and the location
	at which the gas was lost;
	(8)  the estimated amount of gas redelivered by the
	person, including the amount of gas sold that was allocated to the
	producer, and the location at which the redelivery of the gas
	occurred;
	(9)  any amount of gas received from the producer by the
	person that remains unaccounted for; and
	(10)  any other information the person who gathered or
	transported the gas considers relevant to the resolution of the
	complaint.
	(d)  The commission may grant an extension of time to the
	person who gathered or transported the gas to provide the
	accounting required by Subsection (c). An extension may not permit
	the accounting to be provided later than the 45th day after the date
	the informal complaint was filed.
	(e)  If the person who gathered or transported the gas does
	not have the information necessary to provide the accounting
	required by Subsection (c), the person must provide to the producer
	and to the commission a written explanation of the reason the person
	does not have the information.
	(f)  If the person who gathered or transported the gas fails
	to provide the accounting required by Subsection (c) or the
	explanation required by Subsection (e), the informal complaint
	filed by the producer is considered to be valid.
	(g)  If Subsection (f) applies or the commission determines
	that the person who gathered or transported the gas committed
	waste, the commission may take any action it considers appropriate,
	including issuing an order in a formal proceeding to prevent waste
	by the person who gathered or transported the gas.
	(h)  This subsection applies only to a producer and a person
	who gathers or transports gas for the producer under a contract
	between the producer and that person that is entered into or renewed
	on or after September 1, 2007. On written request, the producer is
	entitled to audit the books and records of the person that pertain
	to the contract between the producer and the person for the purpose
	of verifying whether any gas tendered to the person by the producer
	that the person has lost or is unable to account for has been
	allocated to the volume of gas tendered to the person by the
	producer as required by the contract.  A producer is not entitled to
	conduct an audit under this subsection more frequently than
	annually.
	SECTION 2.  Section 85.065, Natural Resources Code, as added
	by this Act, applies only to the loss of or inability to account for
	natural gas that is tendered by a producer to a gatherer or
	transporter of gas on or after the effective date of this Act. The
	loss of or inability to account for natural gas that is tendered by
	a producer to a gatherer or transporter of gas before the effective
	date of this Act is governed by the law in effect on the date the gas
	is tendered, and the former law remains in effect for that purpose.
	SECTION 3.  This Act takes effect September 1, 2007.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 1920 was passed by the House on May 8,
	2007, by the following vote:  Yeas 146, Nays 0, 2 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 1920 was passed by the Senate on May
	23, 2007, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor