State representatives passed a bill Monday changing some requirements for royalty payments oil and gas companies must make to landowners.
Among the changes is removing a provision those payments earn compound interest if energy companies hold onto the money longer than they’re supposed to.
"That is nothing but a gift to the oil companies," said Rep. David Perryman. "Why should we give the oil company the benefit of using your constitutents’ and my constituents’ money? Why do we have to be their banker?"
The bill also lets them energy companies pay royalties interest-free to the Unclaimed Property Fund if mineral rights in dispute aren’t cleared up within two years.
Rep. Kevin Calvey said the 6 percent compound interest in current law for that situation is a very good return.
"And it gave an incentive for people to deliberately not clear up the title to their property so they would continue to get much higher interest than they could get going to CDs or any sort of locked-in type of interest rate," Calvey said.
Senate Bill 731 will likely come up in conference committee. It’s the legislative component of negotiations between oil and gas producers and landowners.
