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ID S1100
Bill
Status
2/13/2017
Primary Sponsor
Resources and Environment Committee
Click for details
AI Summary
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Requires operators to include detailed information on royalty payment check stubs or attachments, including production volumes, prices, taxes, deductions, and operator contact information; royalty owners may request additional information with responses required within 30 days.
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Prohibits operators from deducting marketing, transportation, and processing costs from royalty payments and requires maintenance of production records available to lessors upon request; violations are misdemeanors punishable by up to $1,000 fines.
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Establishes comprehensive metering standards for oil and gas wells, including requirements for meter registration, testing frequency, and accuracy certification; allows variances only on basis of economic necessity without affecting measurement accuracy.
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Prohibits commingling of production from multiple wells prior to metering without prior department approval and establishes temporary spacing units (approximately 320 acres for gas wells, 40 acres for oil wells) pending final determinations.
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Modifies integration order procedures to require 55% mineral interest support and good faith contact efforts with uncommitted owners on at least two separate occasions within 60 days; increases civil penalty authority to $10,000 per violation with daily violations treated as separate offenses.
Legislative Description
Amends and adds to existing law to require that when payment is made to any owner of a royalty interest, certain information shall be included on the payor”s check stub or on an attachment; to provide that royalties shall not be reduced by costs; to revise confidentiality provisions; to provide for disclosure of certain records; to provide for metering of production and for custody transfer meters; to provide for the registration of all persons engaged in meter proving or testing and to provide for qualification; to provide for the testing of meters and to provide for variances; to provide requirements regarding the commingling of production; to provide for orders regarding spacing units and to provide for temporary spacing units; to revise application for integration order provisions; to remove an exception to requirements regarding good faith efforts to inform uncommitted owners of an intent to develop mineral resources in a proposed spacing unit; to remove certain redaction and mailing requirements; and to provide for civil penalties for violation of orders.
OIL AND GAS
Last Action
Reported Printed; referred to Resources & Environment
2/14/2017