Legislation aimed at addressing mineral owners’ concerns about royalty deductions passed the North Dakota Senate on Friday after a compromise was worked out with the oil industry to rewrite the bill.
Senate Bill 2217 aims to address deductions oil and gas companies sometimes take from royalty checks to cover expenses associated with transporting oil and gas, as well as processing the gas. Supporters say those deductions can eat up as much as two-thirds of mineral owners’ monthly royalties.
The original legislation would have prohibited that practice unless a lease explicitly allows for it. It also would have given mineral owners the right to audit the records of oil and gas companies paying them royalties.
The version of the bill the Senate approved Friday was rewritten and left out those components.
Bill sponsor Sen. Brad Bekkedahl, R-Williston, said the most important part of the new version is that it would prompt a study of the issue with input from mineral owners, the oil and gas industry, and state agencies.