2007 Regular Session
To: Banking and Financial Services
By: Representative Sullivan
AN ACT TO PROVIDE THAT IF MINERAL RIGHTS IN PROPERTY HAVE BEEN PLEDGED AS COLLATERAL FOR A LOAN, AND THERE IS A SHOWING OF PROOF THAT THE LOAN HAS BEEN REPAID, THEN THE FINANCIAL INSTITUTION OR PERSON ACCEPTING SUCH COLLATERAL SHALL REVEST IN THE BORROWER, OR HIS HEIRS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) If mineral rights in property have been pledged as collateral for a loan, and there is a showing of proof that the loan has been repaid, then the financial institution or person accepting such collateral shall revest the title to the mineral rights in the borrower or his heirs.
(2) Proof that the loan has been repaid may be rebutted by the lender if the lender provides the borrower or his heirs with:
(a) The original contract or agreement that contains the pledge of mineral rights as collateral for the loan; and
(b) Proof of failure of the borrower to repay the loan or to meet any conditions of the contract or agreement.
(3) This section shall not apply to security agreements executed under the Mississippi Uniform Commercial Code or to security interests created by such security agreements.
(4) This section shall not apply to a mortgage or deed of trust which states on its face that it secures a line of credit; or to one which secures a line of credit and, under prior law, was not required to state on its face that it secures a line of credit. As used in this section, the term "line of credit" means any loan, extension of credit or financing arrangement where the lender has agreed to make additional or future advances.
SECTION 2. This act shall take effect and be in force from and after July 1, 2007.