MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Oil, Gas and Other Minerals

By: Representative Dedeaux

AN ACT TO PROVIDE AN ANNUAL ASSESSMENT ON NONPRODUCING MINERAL ESTATES THAT ARE OWNED BY SOMEONE OTHER THAN THE OWNER OF THE SURFACE RIGHTS OF THE LAND; TO PROVIDE THAT THE TITLE TO THE NONPRODUCING MINERAL ESTATE SHALL REVERT TO THE STATE OF MISSISSIPPI UPON FAILURE OF THE OWNER TO PAY THE ASSESSMENT FOR A PERIOD OF THREE YEARS; TO PROVIDE THAT THE OWNER OF THE SURFACE RIGHTS TO THE LAND MAY REDEEM THE NONPRODUCING MINERAL ESTATE; TO PROVIDE THE PROCEDURE FOR NOTICE AND REDEMPTION OF THE NONPRODUCING MINERAL ESTATE; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) There is levied an assessment of One Hundred Dollars ($100.00) to be collected annually on each nonproducing mineral estate that is located within the county that is owned by any person, firm, partnership, association or corporation other than the owner of the surface rights of the land. If the nonproducing mineral estate extends into more than one (1) county, the annual assessment shall be collected by each county wherein the nonproducing mineral estate is located.

(2) (a) Upon default of the payment of the assessment required in subsection (1) of this section, the tax collector shall give written notice to the owner of the nonproducing mineral estate demanding the payment of the assessment then remaining in default within twenty (20) days from the date of the delivery of the notice. The notice shall be sent by certified or registered mail to the owner of the nonproducing mineral estate or delivered by an employee of the tax collector either to the owner or someone of suitable age and discretion at the owner's place of business or residence. If any person liable for the payment of the assessment fails or refuses to pay the assessment after receiving the notice and demand as provided in this subsection, the tax collector may file a notice of a lien for such assessment with the circuit clerk of the county in which the nonproducing mineral estate is located.

(b) If the owner of the nonproducing mineral estate other than the owner of the land, as provided in subsection (1) of this section, fails or refuses to pay the assessment for a period of three (3) years, his interests in the land and the title to such nonproducing mineral estate shall revert to the State of Mississippi. The owner of such mineral estate shall have six (6) months from the date of reversion in which to redeem his property by payment of the delinquent assessment, interest, fees and costs. If the owner of the nonproducing mineral estate has not redeemed the nonproducing mineral estate within the six-month period, the owner or owners of the surface estate wherein the mineral estate lies may redeem the nonproducing mineral estate as provided in Section 2 of this act.

(3) For purposes of this section, the mineral estate is deemed to be nonproducing if there have been no bona fide drilling or production operations for minerals or no actual production of minerals for a period of ten (10) years. The period of ten (10) years may run continuously or be interrupted. If there are bona fide drilling or production operations for minerals or actual production of minerals, the period shall be interrupted and shall begin to run again on the last day that drilling or production operations are conducted or the last day of actual production. The period shall be interrupted in the case of contracts providing for shut-in rental payments in lieu of production, but if there is no production, the period shall begin to run again at the end of the period for which the last such rental payment was made. For purposes of this section, oil and gas are deemed to be not in production if, in the case of oil production, the well is not located on the regular governmental quarter-quarter section of surface estate where the severed mineral estate lies, or in the case of gas production, if the gas well is not located in the regular governmental one-half (1/2) section wherein the mineral estate lies.

SECTION 2. (1) In order to effectuate the redemption provided for in Section 1 of this act, the owner or owners of the surface estate each shall file a statement of claim with the chancery clerk of the county or counties in which the land within which the nonproducing mineral estate is located after the period of three (3) years has elapsed and the title to the mineral estate has reverted to the State of Mississippi. The owner or owners of the surface estate shall notify the owner or owners of the nonproducing mineral estate by personal service, if they can be found upon reasonable search and inquiry, that the nonproducing mineral estate is subject to redemption by the surface owner or owners. If the owner or owners of the nonproducing mineral estate cannot be found upon reasonable search and inquiry, the owner or owners of the surface estate shall give notice by publication for three (3) consecutive weeks in a newspaper having general circulation in the county or counties in which the land within which the nonproducing mineral estate is located, and, if the address of the owner or owners of the mineral estate is shown of record or can be determined upon reasonable inquiry, by mailing a copy of such notice to the owner or owners of the mineral estate not later than ten (10) days after the first publication. The notice shall state the name of the owner or owners of the mineral estate as shown of record, if known, a description of the land and the name of the person or persons giving such notice. If a copy of such notice, together with an affidavit of service thereof, is promptly filed with the chancery clerk of the county or counties in which the land within which the mineral estate is located, the record thereof shall be prima facie evidence in any legal proceeding that such notice was given.

(2) If, within thirty (30) days after personal service or the last publication of notice, no conclusive written evidence is presented to the chancery clerk that there have been bona fide drilling or production operations for minerals or actual production of minerals for a period of ten (10) years, the nonproducing mineral estate may be redeemed by the owner or owners of the surface estate, and the chancery clerk shall record the statement of claim and the redemption of the nonproducing mineral estate and shall indicate the redemption of the nonproducing mineral estate by marginal notation on the instrument creating the original mineral estate. If conclusive written evidence is presented to the chancery clerk within the stated period of time that there have been bona fide drilling or production operations for minerals or actual production of minerals within the period of ten (10) years, then the reverter to the State of Mississippi and the right of redemption by the surface owner or owners shall not take effect and the chancery clerk shall record the statement of claim but shall not record or indicate on the instrument creating the original mineral estate that there has been a reversion or redemption of the mineral estate.

SECTION 3. This act shall be in force from and after the date that Section _____ is inserted as a part of the Constitution by proclamation of the Secretary of State certifying that House Concurrent Resolution No. _____, 1999 Regular Session, received the majority vote required by the Constitution.