| (5) Gross receipts that a gas producer realizes from
litigation awards for a breach of contract, reimbursements for litigation-related
expenses (e.g., documented attorney's fees or court costs), or interest
(upon which the parties have agreed, that the records of the producer
reflects, or in an amount that a court has ordered) are sourced to
the location of the payor.
(6) Gross receipts that a gas producer realizes from
a judgment, compromise, or settlement relating to the recovery of
a contract price of gas produced are sourced to Texas to the extent
the contract specified delivery to a location in Texas. Gross receipts
that a gas producer realizes from a judgment, compromise, or settlement
that relates to several claims or causes of action shall be prorated
based upon the documented amounts due under the contract for each
claim or cause of action according to the records of the producer.
For example, a settlement sum of $100,000 for a pricing dispute of
$25,000 and for failure to pay for gas not taken in the amount of
$225,000, would result in receipts of $10,000 from gas sales (100,000
X 25,000/250,000) and receipts from other business of $90,000 (100,000
X 225,000/250,000). Records of the producer shall include, but are
not limited to the following: contracts, settlement agreements, accounting
records and entries, court pleadings and worksheets, including calculations
reflecting settlement amounts.
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| Source Note: The provisions of this §3.591 adopted to be effective January 1, 2008, 32 TexReg 10044; amended to be effective December 31, 2009, 34 TexReg 9472; amended to be effective January 24, 2021, 46 TexReg 460 |
