HOUSE BILL No. 5262


     October 9, 1997, Introduced by Reps. DeVuyst, DeHart, Voorhees, Wetters, Goschka, Bobier, Jellema, Lowe, Anthony, Brater, Raczkowski, Middleton, Gilmer, Cassis, Green, Bodem, Bogardus and Birkholz and referred to the Committee on Forestry and Mineral Rights.


        A bill to amend 1994 PA 451, entitled

   "Natural resources and environmental protection act,"

   (MCL 324.101 to 324.90106) by adding section 61503a.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         SEC. 61503A.  A PERSON WHO ENTERS INTO A GAS LEASE AS A

 2    LESSEE SHALL DO ALL OF THE FOLLOWING:

 3         (A) STARTING WHEN PRODUCTION BEGINS, PROVIDE THE LESSOR WITH

 4    MONTHLY REVENUE STATEMENTS WRITTEN IN PLAIN ENGLISH THAT PROVIDE

 5    ALL OF THE FOLLOWING:

 6         (i) UNDER THE HEADING "UNIT PRICE", THE PRICE RECEIVED BY

 7    THE LESSEE PER 1,000 CUBIC FEET OF GAS SOLD AND THE NAME OF THE

 8    PURCHASER.  THE VOLUME OF GAS SOLD SHALL BE MEASURED AT THE METER

 9    AT THE TAILGATE OF THE COMPRESSION DEHYDRATION PROCESSING PLANT.

10         (ii) A SPECIFIC ITEMIZED LIST OF ALL DEDUCTIONS TAKEN FROM

11    THE LESSOR'S ROYALTY.


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 1         (B) WHEN PRODUCTION BEGINS, CONTRACT WITH A CERTIFIED PUBLIC

 2    ACCOUNTANT FOR PREPARATION OF AN ANNUAL AUDIT.  THE AUDIT SHALL

 3    INCLUDE ANY TAX CREDITS OR OTHER TAX OR FINANCIAL BENEFITS

 4    RECEIVED BY THE LESSEE FOR OPERATIONS ON THE LEASED PROPERTY.

 5    THE AUDIT SHALL ALSO INCLUDE A LIST OF ALL PURCHASES AND PURCHASE

 6    PRICES OF GAS BY THE LESSEE OR BY A SUBSIDIARY OR AFFILIATE OF

 7    THE LESSEE AND THE NAME OF THE SELLER.  THE AUDIT PREPARED UNDER

 8    THIS SUBDIVISION SHALL BE PROVIDED TO ALL LESSORS OF THE AUDITED

 9    PROPERTY.






































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