HB4292 S FIN AM #1 3-5
Johnson 7909
The Committee on Finance moved to amend the bill by striking out everything after the enacting clause and inserting in lieu thereof the following:
ARTICLE 4. COVENANTS.
(a) With regard to all conventional vertical oil, natural gas, or natural gas liquids, wells only, and coal extracted through underground mining and surface mining unless otherwise provided for in writing or unless there is a bona fide dispute between the parties, any lessee or operator of oil, natural gas, or natural gas liquids, or their successors or assigns, who fails to pay a royalty payment for mineral production to a lessor, or their successors and assigns, under the terms of a lease or other agreement within six months after the date payment is due under the terms of such lease or other agreement, shall be liable to such lessor or landowner, or their successors or assigns, in an amount equal to three times the market value of the extracted minerals for which payment is due, plus reasonable attorney's fees and costs in addition to and notwithstanding any other rights, remedies, and penalties otherwise provided by law all regular production payments or flat rate royalty payments due and owing to an interest owner shall be tendered in a timely manner, which shall not exceed 120 days from the first date of sale of oil, natural gas, or natural gas liquids and coal extracted through underground mining and surface mining is realized and within 60 days thereafter for each additional sale or the due date of a flat rate royalty payment, unless such failure to remit is due to lack of record title in the interest owner, a legal dispute concerning the interest, a missing or unlocatable owner of the interest, or due to conditions otherwise specified in this article; Provided, That regular production payments or flat rate royalty payments due and owing to an interest owner are not required to be paid more than once per calendar year when the aggregate total of such regular production payments or flat rate royalty due and owing is less than $100.00. Failure to remit timely payment for conventional wells or mined coal shall result in a mandatory additional payment of an interest penalty, to be set at the prime rate plus an additional two percent until such payment is made, to be compounded daily. The prime rate shall be the posted rate published on the day of the sale of oil, natural gas, and natural gas liquids and coal extracted through underground mining and surface mining in the Wall Street Journal.
(b) A lessor or landowner, or their successors or assigns, who does not receive royalty payments due under the terms of a lease or under the terms of this section in a timely manner may send a written request for the royalty payments by certified mail, return receipt requested, to the operator or producer from whom payment is due, or their successors or assigns. If the interest owner makes such written request for royalty payments under the terms of a lease or the terms of this section and the lessee, operator, producer, or their successors or assigns, does not provide the delinquent royalty payments within 60 days after receipt of the written request, the lessor or landowner, or their successors or assigns, may bring a civil action against the lessee, operator, producer or their successors or assigns, to enforce the terms of the lease or the terms of this section, whichever may apply. A court may award attorney fees on behalf of the lessor or landowner, or their successors or assigns, pursuant to the provisions of §46A-5-104 of this code.
(c) The amendments to this section during the 2024 Regular Session of the Legislature shall be effective July 1, 2024, and be prospective only.
Adopted
Rejected