HB 1371: Oil and gas; interest; remittance; escrow account; relief of liability; effective date. - Oklahoma

Floor (House) → Floor (Senate) · 6 edits

MODERATE

The bill was amended to clarify payment timelines for oil and gas royalties, establish minimum accumulation thresholds before payment, and explicitly state that the law does not create an express trust. It also added protections for payors who make good-faith payments to the wrong party and clarified interest accrual rules for delayed payments.

Scope change

The scope of the bill remains focused on the Production Revenue Standard Act, but the applicability of payment deadlines and accumulation rules was refined to distinguish between oil and gas production and to address specific scenarios like unmarketable title.

REQUIREMENT

Added a new provision stating that holding proceeds does not create an express trust, clarifying the legal relationship between payors and owners.

Introduced minimum payment thresholds, allowing proceeds under $100 to be accumulated until at least $10 is reached, with specific rules for amounts between $10 and $100.

Required payors to provide notice to owners of the option to receive monthly payments for amounts greater than $25.

TIMELINE

Changed the deadline for paying gas royalties from 'six months after the date of first sale' to 'six months after the date of first sale, and thereafter not later than the last day of the third succeeding month after the end of the month within which such production is sold'.

Extended the deadline for paying gas royalties when proceeds are received by the operator as a producing owner, allowing payment by the last day of the third succeeding month after the end of the month.

ENFORCEMENT

Added protections stating that a first purchaser or working interest owner who pays proceeds to the producing owner or operator is discharged from liability, preventing double liability.

Engrossed → HB1371 (4-14-26) (GREEN) FS FA1.PDF · 4 edits

MODERATE

This bill updates the rules for paying oil and gas royalties to owners, increasing the interest rate owed on late payments from 12% to 15%. It also clarifies payment timelines, adjusts thresholds for when owners can request monthly payments, and updates the interest rate calculation for unpaid funds to include a variable prime rate component after a specific date.

Scope change

The bill applies to all oil and gas production sales in Oklahoma but modifies specific financial obligations and payment schedules for operators and payors.

TIMELINE

Payment deadlines were extended for certain royalty interests, moving from the third succeeding month to the last day of the third succeeding month after the production is sold, providing operators more time to process payments.

FISCAL

The interest rate charged on unpaid or late royalty proceeds was increased from 12% to 15% per annum, and the calculation method was updated to include the Wall Street Journal prime rate for periods after November 1, 2018.

REQUIREMENT

Thresholds for accumulating unpaid proceeds before payment were adjusted, and notice requirements were clarified to ensure owners are informed of their right to request monthly payments.

DEFINITION

Minor wording changes were made to clarify who constitutes a 'payor' and how interest is calculated for different time periods.

Amended And Engrossed → Engrossed · 5 edits · Apr 16, 2026

MODERATE

The bill was re-engrossed with Senate amendments that updated the authorship credits and refined the payment timelines for oil and gas royalties. The most significant change is the adjustment of the deadline for paying gas royalties to operators, which was extended from the end of the second month to the end of the third month after the sale. Additionally, the bill clarifies liability rules for different types of owners when making payments and updates interest rate calculations for delayed payments based on specific dates.

Scope change

The bill's scope remains focused on oil and gas revenue standards, but the applicability of payment deadlines was modified for gas production remitted to operators.

TIMELINE

The deadline for paying gas royalties to operators was extended from the end of the second month to the end of the third month after the production is sold.

The deadline for paying gas royalties to operators when acting as a producing owner was extended from the end of the second month to the end of the third month after the production is sold.

ENFORCEMENT

New provisions clarify that first purchasers and working interest owners are discharged from liability if they pay royalties to the correct owners or the operator, and new rules establish liability for parties causing incorrect payments due to errors.

TECHNICAL

The bill header was updated to reflect the new Senate coauthor, Green, replacing the previous authorship credits.

Minor formatting and line break adjustments were made throughout the text to align with standard legislative formatting.

Enrolled (final version) → Amended And Engrossed · 3 edits · Apr 16, 2026

MINOR

The bill was amended to update authorship credits and correct the bill title to reflect a more comprehensive scope. The substantive legal text remains largely unchanged, though minor formatting adjustments were made to the page layout. No new policy requirements, funding changes, or eligibility criteria were introduced in this version.

Scope change

The bill's scope was clarified in the title to include provisions for interest caps, unclaimed property updates, and litigation reform, which were previously omitted from the enrolled version's title.

TECHNICAL

Updated the list of House and Senate co-authors and substituted the principal House author from Boles to Moore.

Corrected the bill title to accurately list all amendments covered by the legislation, including interest caps and unclaimed property updates.

Adjusted page numbering and formatting of the bill text to align with the engrossed version standards.

Introduced → Enrolled (final version) · 4 edits · Mar 27, 2025

MODERATE

The bill was transitioned from its initial introduction to its final enrolled version, incorporating significant substantive changes. The most critical policy shift is the increase in the interest rate on unpaid oil and gas proceeds from 12% to 15% per annum, a change intended to better compensate owners for delayed payments. Additionally, the bill's scope was expanded to include amendments to the Energy Litigation Reform Act and the Uniform Unclaimed Property Act, broadening its impact beyond just the Production Revenue Standards Act.

Scope change

The bill's scope expanded from solely amending the Production Revenue Standards Act to also include amendments to the Energy Litigation Reform Act and the Uniform Unclaimed Property Act.

REQUIREMENT

The interest rate charged on undeliverable or uncashed oil and gas proceeds was increased from 12% to 15% per annum.

Language regarding the accumulation of small proceeds was slightly refined to clarify the monthly accumulation period.

SCOPE

The bill now includes amendments to the Energy Litigation Reform Act and the Uniform Unclaimed Property Act, in addition to the Production Revenue Standards Act.

TIMELINE

Payment deadlines for gas royalties were adjusted to allow for a third succeeding month after the sale month in specific operator scenarios.

Oil and gas; interest; remittance; escrow account; relief of liability; effective date.

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