MISSISSIPPI LEGISLATURE

2006 Regular Session

To: Oil, Gas and Other Minerals

By: Representative Hudson

House Bill 1398

AN ACT TO PROVIDE THAT A CERTAIN PERCENTAGE OF THE ANNUAL YIELD FROM ALL MINERAL PRODUCTION SHALL BE REMITTED TO THE SURFACE OWNER OF REAL PROPERTY SOLD OR LEASED FOR MINERAL PRODUCTION IF THE SURFACE OWNER IS NOT OWNER OF MINERAL RIGHTS IN THE PROPERTY; AND FOR RELATED PURPOSES.

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

     SECTION 1.  (1)  The provisions of this section shall apply to a mineral estate separated from the surface estate after July 1, 2006, and to every surface owner who shall contract for the sale or lease of any real property for the purposes of mineral exploration and production, and for the entire term of the agreement unless otherwise stated in the agreement.  Five percent (5%) of the annual yield from all mineral production shall be remitted to the surface owner of the real property sold or leased for mineral production if the surface owner has no ownership of mineral rights in the property.  Upon the expiration of the agreement, mineral estates not separated from the property shall revert to the surface owner.  However, at the option of the lessee or the surface owner, the agreement may be extended for an additional term as agreed upon by the parties.

     (2)  For purposes of this section, oil and gas are deemed to be not in production if:  (a) in the case of oil production, the well is not located on the regular governmental quarter-quarter (1/4-1/4) section of surface estate where the severed mineral estate lies; or (b) in the case of gas production, the gas well is not located in the regular governmental one-half (1/2) section in which the mineral interest lies.

     SECTION 2.  This act shall take effect and be in force from and after July 1, 2006.