Senate Bill 2008

AN ACT TO CREATE SECTION 89-5-22, MISSISSIPPI CODE OF 1972, TO REQUIRE THAT WHEN CARBON LEASES ARE CREATED, THAT THE LEASE MUST BE RECORDED IN THE LAND RECORD TO BE VALID AND ENFORCEABLE; TO AMEND SECTION 89-5-23, MISSISSIPPI CODE OF 1972, TO CONFORM THE LAND RECORD RECORDING REQUIREMENT FOR OIL, GAS AND MINERAL LEASES; AND FOR RELATED PURPOSES.

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

SECTION 1. The following shall be codified as Section 89-5-22, Mississippi Code of 1972:

89-5-22. (1) As used in this section, the following terms shall have the meanings ascribed in this subsection, unless context clearly requires otherwise:

(a) "Surface ownership" means an individual, company or entity that holds the legal rights to the surface of a piece of land, including the space, buildings and landscaping that are upon the top and the areas just beneath the surface of said land.

(b) "Carbon lease" means an agreement between a landowner and an individual, company or entity where the landowner is paid to store carbon on his or her property through practices like reforestation, soil conservation, reduced tillage or using a previously drilled oil well.

(2) Surface ownership shall include the right to use the land and any reservoirs lying underneath the land for storage purposes. When the right to access and utilize reservoirs underneath the land is contracted to a separate individual, company or entity, a carbon lease shall be formed, and must be timely filed in the land record pursuant to Section 89-5-1. A carbon lease that has not been filed in the land record shall be considered invalid and unenforceable.

SECTION 2. Section 89-5-23, Mississippi Code of 1972, is amended as follows:

89-5-23. (1) Whenever any oil, gas and mineral lease which * * * ~~is now or may hereafter~~ must be recorded in any county of this state shall expire or terminate, the holder of such oil, gas and mineral lease, or the last assignee of record thereof, as the case may be, shall be required to cancel of record such oil, gas and mineral lease by entering upon the margin of the record of such lease, a notation that said oil, gas and mineral lease has terminated and expired, which entry shall be attested by the clerk of the chancery court and shall discharge and release the lands therein described from said oil, gas and mineral lease; or the holder or last assignee of record, as the case may be, of an oil, gas and mineral lease may execute an instrument, duly recordable under the laws of this state, stating that the said oil, gas and mineral lease has expired and terminated and that no further rights or claims will be asserted thereunder.

The chancery clerk shall be allowed a fee of One Dollar ($1.00) for making such cancellation, and shall not be required to index same on sectional index but, shall be required to note the cancellation on the margin of the record where said lease is recorded and if said cancellation is by separate instrument he or she shall note the cancellation on the margin where lease is recorded showing book and page of said instrument of cancellation.

(2) If the holder of an oil, gas and mineral lease or the last assignee of record, as the case may be, shall not, within one (1) month after written request made by the lessor or his or her assigns, cancel on the record said oil, gas and mineral lease, or furnish proof, as above provided, that the same has expired and terminated, the lessee or the last assignee of record, as the case may be, of such oil, gas and mineral lease, shall forfeit the sum of One Hundred Dollars ($100.00), which may be recovered by suit on the part of the party aggrieved.

SECTION 3. This act shall take effect and be in force from and after July 1, 2025.