MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Oil, Gas and Other Minerals

By: Representatives Bowles, Moak

AN ACT TO CREATE A NEW SECTION TO BE CODIFIED AS SECTION 85-7-132, MISSISSIPPI CODE OF 1972, TO PROVIDE A LIEN IN FAVOR OF THE OIL AND GAS BOARD TO ENFORCE VIOLATIONS RELATED TO OIL AND GAS PRODUCTION; TO AMEND SECTIONS 53-1-43 AND 53-1-47, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The following shall be codified as Section 85-7-132, Mississippi Code of 1972:

85-7-132. The Oil and Gas Board shall have a lien on any person violating any statute of this state with respect to the conservation of oil and gas, or any provision of Sections 53-1-1 to 53-1-47 and Sections 53-3-1 to 53-3-21 or any rule, regulation or order made by the board thereunder. The Oil and Gas Board may use the provisions of this chapter to enforce such lien. The Oil and Gas Board shall perfect such lien in the county or counties where the property or equipment involved in a lien is located.

SECTION 2. Section 53-1-43, Mississippi Code of 1972, is reenacted as follows:

53-1-43. (a) Whenever it shall appear that any person is violating or threatening to violate any statute of this state with respect to the conservation of oil and gas, or any provision of Sections 53-1-1 to 53-1-47, inclusive, and Sections 53-3-1 to 53-3-21, inclusive, or any rule, regulation or order made by the board thereunder, and fails or refuses to cease such violation or threats of violation on notice so to do, by the board or supervisor, the board may bring suit against such person in the chancery court in the county of the residence of the defendant, or in the county of the residence of any defendant, if there be more than one (1) defendant, or in the county where the violation is alleged to have occurred or is threatened, to restrain such person from continuing such violation or from carrying out the threat of violation. In such suit the board may obtain injunctions, prohibitory and mandatory, including temporary restraining orders and preliminary injunctions, as the facts may warrant, including, when appropriate, an injunction restraining any person from moving or disposing of any illegal oil, illegal gas, illegal condensate, or illegal product.

(b) In the event the board should fail to bring suit within ten (10) days to enjoin any actual or threatened violation of any statute of this state with respect to the conservation of oil and gas, or of any provision of Sections 53-1-1 to 53-1-47, inclusive, and Sections 53-3-1 to 53-3-21, inclusive, or of any rule, regulation or order made thereunder, then any person or party in interest adversely affected by such violation, and who has notified the board in writing of such violation, or threat thereof, and has requested the board to sue, may, to prevent any or further violation, bring suit for that purpose in the chancery court of any county in which the board could have brought suit, and the board shall be made a party to such suit.

(c) The board may utilize the provisions of Section 85-7-132, Mississippi Code of 1972, in prosecuting violations of Sections 53-1-1 to 53-1-47 and Sections 53-3-1 to 53-3-21 or any rule, regulation or order made by the board thereunder.

SECTION 3. Section 53-1-47, Mississippi Code of 1972, is reenacted as follows:

53-1-47. (a) (i) Any person, who, for the purpose of evading the provisions of Sections 53-1-1 through 53-1-47, inclusive, or any rule, regulation or order made thereunder, shall make or cause to be made any false entry, statement of fact or omission in any report required by such sections or by any rule, regulation or order thereunder or in any account, record or memorandum kept in connection with the provisions thereof or who, for such purpose, shall mutilate, alter, conceal or falsify any such report, account, record or memorandum, shall be subject to a penalty of not more than Ten Thousand Dollars ($10,000.00) per day for each day of such violation to be assessed by the board. In determining the amount of the penalty, the board shall consider the factors specified in subsection (d) of this section. Such penalties shall be assessed according to the procedures set forth in subsection (b) of this section.

(ii) Any person, who, for the purpose of evading the provisions of Sections 53-1-1 through 53-1-47, inclusive, or any rule, regulation or order made thereunder, shall intentionally make or cause to be made any false entry, statement of fact or omission in any report required by said sections or by any rule, regulation or order thereunder or in any account, record or memorandum kept in connection with the provisions thereof or who, for such purpose, shall mutilate, alter, conceal or falsify any such report, account, record or memorandum shall be deemed guilty of a misdemeanor and shall be subject, upon conviction in any court of competent jurisdiction, to a fine of not less than Five Hundred Dollars ($500.00) nor more than One Thousand Dollars ($1,000.00) or imprisonment for a term of not less than ten (10) days nor more than six (6) months for each such violation, or both such fine and imprisonment.

(b) Any person who violates any provision of Sections 53-1-1 through 53-1-47, inclusive, or Sections 53-3-1 through 53-3-33, and 53-3-39 through 53-3-165, or any lawful rule, regulation or order of the board made hereunder, shall, in addition to any penalty for such violation that is otherwise provided for herein, be subject to a penalty of not to exceed Ten Thousand Dollars ($10,000.00) per day for each day of such violation to be assessed by the board. When any charge is filed with the board charging any person with any such violation, the board shall issue an order directing such person to appear before the board at the time and place specified in such order, which date shall be not less than ten (10) days after the date of such order, and a copy of such order shall be mailed to the person charged by certified mail, return receipt requested, and a copy of such order and the return receipt evidencing delivery thereof shall be filed in the cause or a copy of such order may be served as process is served in the courts of this state, and at the time and place fixed by the board, or at such other time and place as the board may by proper order fix, the board shall hear and consider all proper and lawful proof and evidence offered and shall render its verdict according to the law and the evidence. Such hearings shall be held by not less than three (3) members of the board and a unanimous verdict of all members hearing such charge shall be necessary for conviction and in the event of a conviction all members of the board hearing such cause must agree on the penalty assessed.

The Attorney General, by his designated assistant, shall represent the board in all such proceedings and shall rule on any objection to proof or evidence offered. The Attorney General shall also designate a member of his staff to present evidence and proof of such violation in the event such charge is contested.

All penalties assessed by the board under the provisions of this section shall have the force and effect of a judgment of the circuit court and shall be enrolled in the office of the circuit clerk and execution may be issued thereon. All such penalties paid or collected shall be paid to the State Treasurer for credit to the Special Oil and Gas Board Fund.

Any person adjudged guilty of any such violation shall have the right of appeal in accordance with the provisions of Section 53-1-39.

The payment of any penalty as provided herein shall not have the effect of changing illegal oil into legal oil, illegal gas into legal gas or illegal product into legal product, nor shall such payment have the effect of authorizing the sale or purchase or acquisition or the transportation, refining, processing or handling in any other way of such illegal oil, illegal gas or illegal product.

(c) Any person who aids or abets any other person in the violation of any provision of Sections 53-1-1 through 53-1-47, inclusive, or Sections 53-3-1 through 53-3-21, inclusive, or any rule, regulation or order made thereunder, shall be subject to the same penalties as are prescribed herein for the violation by such other person.

(d) In determining the amount of the penalty under subsection (a), (b) or (c) of this section, the board shall consider at a minimum the following factors:

(i) The willfulness of the violation;

(ii) Any damage to water, land or other natural resources of the state or their users;

(iii) Any cost of restoration and abatement;

(iv) Any economic benefit to the violator as a result of noncompliance;

(v) The seriousness of the violation, including any harm to the environment and any harm to the health and safety of the public; and

(vi) Any prior violation by such violator.

(e) The board is authorized to utilize the provisions of Section 85-7-132 to enforce penalties provided by this section.

SECTION 4. This act shall take effect and be in force from and after its passage.