2007 Regular Session
To: Oil, Gas and Other Minerals; Ways and Means
By: Representative Reeves
AN ACT TO AMEND SECTION 53-1-73, MISSISSIPPI CODE OF 1972, TO CLARIFY THE PAYMENT OF ADMINISTRATIVE TAX ON OIL PRODUCED AND SOLD IN THE STATE; TO AMEND SECTION 53-1-75, MISSISSIPPI CODE OF 1972, TO CLARIFY THE BASIS BY WHICH SUCH ASSESSMENTS ARE PAID BY PERSONS LIABLE; TO AMEND SECTION 53-3-13, MISSISSIPPI CODE OF 1972, TO INCREASE THE FEE CHARGED FOR PERMITS TO DRILL OIL WELLS; TO AMEND SECTION 53-3-25, MISSISSIPPI CODE OF 1972, TO INCREASE THE APPLICATION FEE FOR ISSUANCE OF SUCH PERMIT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 53-1-73, Mississippi Code of 1972, is amended as follows:
53-1-73. For the purposes of paying the costs and expenses incurred in connection with the administration and enforcement of the oil and gas conservation laws of the State of Mississippi and of the rules, regulations and orders of the State Oil and Gas Board, all oil and gas captured in the State of Mississippi shall be assessed the requisite administrative tax, there is hereby levied and assessed against each barrel of oil produced and sold in the State of Mississippi a charge not to exceed sixty (60) mills on each barrel of such oil, and against each one thousand (1,000) cubic feet of gas produced * * * and sold a charge not to exceed six (6) mills on each one thousand (1,000) cubic feet of gas. The State Oil and Gas Board shall fix the amount of such charge in the first instances, and may, from time to time, change, reduce or increase the amount thereof, as in its judgment the charges against the fund may require, but the amounts fixed by said board shall not exceed the limits hereinabove prescribed; and it shall be the duty of the board to make collection of such assessments. All monies so collected shall be used exclusively to pay the expenses and other costs in connection with the functioning of the State Oil and Gas Board and the administration of the oil and gas conservation laws of the State of Mississippi now in force or hereafter enacted and the rules, regulations and orders of said board.
SECTION 2. Section 53-1-75, Mississippi Code of 1972, is amended as follows:
53-1-75. The persons owning an interest (working interest, royalty interest, payments out of production or any other interest) in the oil or gas subject to the charge provided for in Section 53-1-73 shall be liable for such charge in proportion to their ownership at the time of production. The charge so assessed and fixed in Section 53-1-73 shall be payable monthly on a well-by-well basis and the persons hereinafter required to remit such charge shall remit the sum so due to the board on or before the twenty-fifth day of the month next following the month in which the production is sold out of which the assessment arises; such remittance to comply with any rules and regulations which may be adopted by the board in regard thereto.
Such remittances with respect to all production against which any assessment hereunder is levied shall be made by the following persons:
(a) With respect to assessments against oil or gas purchased in this state at the well, under any contract or agreement requiring payment for such production to the respective persons owning any interest therein (including working interests, royalty interests, payments out of production or any other interests in such production), by the person purchasing such production.
(b) With respect to any oil, or gas purchased in this state at the well without any contract or agreement requiring payment for such production to respective persons owning an interest therein, and with respect to any oil or gas produced from any well but not sold at said well, by the operator of the well from which the production is obtained.
The persons remitting the charge as herein provided are hereby authorized, empowered and required to deduct from any amounts due the persons owning an interest in the oil or gas at the time of production the proportionate amount of such charge before making payment to such owners.
SECTION 3. Section 53-3-13, Mississippi Code of 1972, is amended as follows:
53-3-13. (1) Any person securing a permit to drill a well in search of oil or gas under the provisions of Section 53-3-11 shall pay to the Oil and Gas Supervisor a fee of Six Hundred Dollars ($600.00) upon and for the issuance of such permit. A lesser sum may be paid if the State Oil and Gas Board shall adopt a rule fixing the amount to be paid at a sum less than Six Hundred Dollars ($600.00). Any such permit, when issued and the fee paid thereon, shall be good for a period of twelve (12) months from the date thereof; and in the event drilling has commenced within the said twelve (12) months, the permit shall be good for the life of the well so commenced, unless during the course of drilling or production the operator is changed. In the event a change of operators from that listed in the drilling permit is desired, the operator so listed and the proposed new operator shall apply to the State Oil and Gas Board for authority to change operators on forms to be prescribed by order of the State Oil and Gas Board. The fee for such change of operators shall be One Hundred Dollars ($100.00) per change, or some lesser sum as may be fixed by order of the board.
(2) The State Oil and Gas Supervisor, as ex officio Secretary of the State Oil and Gas Board, shall remit to the State Treasurer all monies collected by reason of the assessments made, fixed and authorized under the provisions of the first paragraph of this section, and the State Treasurer shall deposit all such monies in a special fund known as the "Oil and Gas Conservation Fund."
SECTION 4. Section 53-3-25, Mississippi Code of 1972, is amended as follows:
53-3-25. Before any person shall commence the drilling of any well in search of oil or gas, such person shall file with the board his application for a permit to drill, accompanied by a certified plat and by a fee of Six Hundred Dollars ($600.00), payable to the State Oil and Gas Board. When two (2) or more separately owned tracts of land are embraced within the unit for which the permit is sought, the application shall affirmatively state whether or not there are separately owned tracts in the drilling unit for which the permit is sought, and if so, whether or not the person owning the drilling rights therein and the rights to share in the production therefrom have agreed to develop their lands as a drilling unit and to the drilling of the well, as contemplated by Section 53-3-7. If drilling operations have not commenced within twelve (12) months after date of issuance, the permit shall become void. If the application complies in all respects with the rules and regulations of the board relating thereto, a permit shall be issued promptly by the supervisor. The issuance of said permit shall constitute the establishment of the drilling unit as designated in said application and shall likewise constitute the approval of the well location set out in said permit. On good cause shown, the unit may be altered by the board after notice and hearing.
If the application for permit does not comply in all respects with the rules and regulations of the board relating thereto, said application shall be disallowed, and the supervisor shall promptly notify the applicant of the reason or reasons for said disallowance.
SECTION 5. This act shall take effect and be in force from and after July 1, 2007.