MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Oil, Gas and Other Minerals

By: Senator(s) Hyde-Smith (By Request)

AN ACT TO AMEND SECTION 27-31-73, MISSISSIPPI CODE OF 1972, TO REQUIRE REGISTRATION WITH THE CHANCERY CLERK OF NONPRODUCING SEVERED MINERAL INTERESTS; TO CREATE NEW SECTION 27-31-74, MISSISSIPPI CODE OF 1972, TO ENACT REQUIREMENTS FOR SUCH REGISTRATION; TO AMEND SECTION 27-31-83, MISSISSIPPI CODE OF 1972, TO PROVIDE FOR REGISTRATION AT THE TIME OF PAYMENT OF MINERAL DOCUMENTARY TAX FOR NEWLY SEVERED INTERESTS; TO AMEND SECTION 9-5-137, MISSISSIPPI CODE OF 1972, TO CONFORM THE DUTIES OF CHANCERY CLERKS TO THIS ACT; TO REQUIRE THE SECRETARY OF STATE TO PUBLICIZE THE REQUIREMENTS OF THIS ACT NATIONWIDE; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 27-31-73, Mississippi Code of 1972, is amended as follows:

27-31-73. (1) (a) To encourage the purchase of leases upon and interests in oil, gas and other minerals in the State of Mississippi, to encourage drilling for and production of such minerals, and to relieve the taxing officials of the counties of the state of the onerous duties of assessment for, collection of and sale for ad valorem taxes for such interests (which the legislature finds are generally assessed at nominal values resulting in taxes not commensurate with the services required of such officers), all nonproducing leasehold interests upon all oil, gas and other minerals in, on or under lands lying within the State of Mississippi, created or assigned after the effective date of sections 27-31-71 to 27-31-87, and also all nonproducing interests in such oil, gas and other minerals (including royalty interests therein) hereafter conveyed to a grantee or purchaser or excepted or reserved to a grantor separately and apart from the surface, shall be exempt from all ad valorem taxes levied on or after January 1, 1947, by the State of Mississippi, or any county, municipality, levee district, road district, school district, drainage district or other taxing district within the state or becoming a lien on or after said date. Any sale for taxes of the surface or of the remainder of the fee shall not in any manner whatsoever affect the interest or interests hereby exempted.

(b) For the same purpose and with like effect there is hereby likewise exempted from such ad valorem taxation all such interests created prior to the passage of sections 27-31-71 to 27-31-87 which are owned separately and apart from the surface, provided that as a condition precedent to obtaining such exemption upon existing interests the then owner thereof shall make application for exemption of the interest then owned by him as hereinafter provided and pay, by the purchase of documentary tax stamps, a sum equivalent to the tax herein levied by section 27-31-77 on instruments hereafter executed creating, transferring or reserving corresponding or similar interests. If any such sum is paid after January 1, 1947, then such exemption shall apply only to taxes becoming a lien after such sum is thus paid.

(2) All nonproducing leasehold interests upon all oil, gas and other minerals in, on or under lands lying within the State of Mississippi, whether created or assigned before or after April 10, 1946, and also all nonproducing interests in such oil, gas and other minerals, including royalty interests therein, whether conveyed to a grantee or purchaser or excepted or reserved to a grantor separately and apart from the surface shall be registered by the owner or owners thereof with the chancery clerk of the county in which the land is located as provided in Section 72-31-74. The initial period in which the registration required under this section may be accomplished shall be for three (3) years or until June 30, 2003.

SECTION 2. The following shall be codified as Section 27-31-74, Mississippi Code of 1972:

27-31-74. Registration of all such existing interests shall be made to the chancery clerk of the county wherein the land lies in which such interest is owned, by registering with the said clerk, which registration shall contain the following information:

1. Name of registrant;

2. Address of registrant;

3. Description of land affected (including aggregate acreage);

4. Fractional interest which is being registered and the nature of such interest;

5. Recording data concerning the instrument creating the interest including grantor or lessor, grantee or lessee, date of instrument, book and page of record and date of filing;

6. Length of primary term, if any;

7. Recording data on instruments divesting original party of any interest in a portion of original interest therein conveyed;

8. Number of net mineral, royalty or lease acres on which exemption sought.

Upon receipt of such registration, the chancery clerk shall properly record and index in a journal of severed mineral interests the registration information.

SECTION 3. Section 27-31-83, Mississippi Code of 1972, is amended as follows:

27-31-83. (1) The mineral documentary tax shall be paid by the purchase of documentary tax stamps from the chancery clerk of the county in which the land affected by the sale, lease or reservation or other instrument of such oil, gas or other minerals is situate, and the said clerk shall cancel such stamps by stamping or writing the name of the county on the face thereof and affix same to the instrument when filed for recording and shall show upon the face or margin of the record thereof the amount of the said stamps so affixed by him.

SECTION 4. Section 9-5-137, Mississippi Code of 1972, is amended as follows:

9-5-137. It shall be the duty of the clerk to preserve and keep all records, files, papers and proceedings belonging to his office, and to record all last wills and testaments which may be probated; all letters testamentary, of administration, and guardianship; all accounts allowed; all inventories, appraisements, and reports duly returned; all instruments which are duly proved, and which by law are required to be recorded in his office, in well-bound books to be kept for that purpose, each class in a separate book or books, or by means of electronic filing or storage or both in addition to or in lieu of any such physical records as provided in Sections 9-1-51 through 9-1-57, as the clerk may elect; all severed mineral interest registrations required under Section 27-31-74; all records shall be properly indexed. He shall issue all process which may be required of him by law or by order of the court, or the chancellor in vacation; and shall discharge all other duties which may be required of him by law, or which properly appertain to the duties of his office. The clerk shall be under the direction of the court in termtime, and of the chancellor in vacation.

SECTION 5. The Secretary of State shall undertake to publicize the requirements of this act, including without limitation to publish in professional oil, gas and minerals journals and publications, in royalty owner organization magazines and publications, and in publications of wide national and international circulation such as USA Today, thereby informing those with a duty to register of the requirements of this act.

SECTION 6. This act shall take effect and be in force from and after July 1, 2000.