Kansas Statutes 55-1614. Interest payments on payments from oil or gas production; definitions
As used in this act:
(a) “Payee” means any person or persons, or a court of competent jurisdiction, to whom payment of revenues accrued from the first sale of oil or gas from an oil or gas well located in Kansas should be made, whether the same arises from ownership of the proceeds or an interest in the producing property or a contract right to receive or disburse the payment.
Terms Used In Kansas Statutes 55-1614
- Act: means the provisions of Kan. See Kansas Statutes 55-1626
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Excluded payments: means :
(1) Payments which in the aggregate of 12 months' accumulation of oil or gas proceeds to one payee do not exceed $100, provided such excluded payments are disbursed annually if exceeding $10, and provided that upon written request of the payee, such excluded payments are disbursed monthly if exceeding $25; or
(2) payments which in the aggregate of the accumulation of oil or gas proceeds to one payee do not exceed $10, provided such excluded payments are disbursed when production from the relevant well or wells ceases or when the payor's responsibility for making payment for production ceases, whichever occurs first, and provided that upon written request of the payee, such excluded payments are disbursed annually. See Kansas Statutes 55-1614
- First purchaser: means the owner of the oil or gas after consummation of a first sale. See Kansas Statutes 55-1614
- First sale: means the transfer of ownership of oil or gas first occurring after its severance from the ground. See Kansas Statutes 55-1614
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Irrevocable trust: A trust arrangement that cannot be revoked, rescinded, or repealed by the grantor.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Month: means a calendar month, unless otherwise expressed. See Kansas Statutes 77-201
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Payee: means any person or persons, or a court of competent jurisdiction, to whom payment of revenues accrued from the first sale of oil or gas from an oil or gas well located in Kansas should be made, whether the same arises from ownership of the proceeds or an interest in the producing property or a contract right to receive or disburse the payment. See Kansas Statutes 55-1614
- Payment: means the sum to be paid to a payee by a payor arising from payee's interest in a first sale of oil or gas occurring on or after the effective date of this act. See Kansas Statutes 55-1614
- Payor: means :
(1) The first purchaser of production of oil or gas from an oil or gas well. See Kansas Statutes 55-1614
- Person: means any individual, corporation, limited partnership, partnership, association, joint stock company, living trust, irrevocable trust, trust where the interest of the beneficiaries are evidenced by a security, an unincorporated organization, a government, a political subdivision of government, or any combination thereof. See Kansas Statutes 55-1614
- Property: includes personal and real property. See Kansas Statutes 77-201
(b) “Payment” means the sum to be paid to a payee by a payor arising from payee’s interest in a first sale of oil or gas occurring on or after the effective date of this act.
(c) “Payor” means:
(1) The first purchaser of production of oil or gas from an oil or gas well. If the first purchaser makes payment to a third party for distribution to payee, the first purchaser is a payor as to the third party to whom payment is made, or
(2) any person who has entered into an agreement with the first purchaser to make payment to payee and receives moneys from the first purchaser for distribution pursuant to such agreement.
(d) “First sale” means the transfer of ownership of oil or gas first occurring after its severance from the ground.
(e) “First purchaser” means the owner of the oil or gas after consummation of a first sale.
(f) “Initial sale” means that first sale first made in time after a well commences initial oil or gas production, excluding any sale of frac oil or swab oil.
(g) “Person” means any individual, corporation, limited partnership, partnership, association, joint stock company, living trust, irrevocable trust, trust where the interest of the beneficiaries are evidenced by a security, an unincorporated organization, a government, a political subdivision of government, or any combination thereof.
(h) “Interest rate provided herein” means that rate equal to one and one-half percentage points above the interest rate charged on loans to depository institutions by the New York Federal Reserve Bank at the start of business on the first business day of each month, unless the payor segregates the payment from its operating funds and deposits the same in a demand deposit account with a federally insured bank or savings and loan institution that earns interest at the highest rate being offered by that institution for the amount due payee by payor in such account, in which case the “interest rate provided herein” means the interest rate actually earned by payor on that account.
(i) “Excluded payments” means:
(1) Payments which in the aggregate of 12 months’ accumulation of oil or gas proceeds to one payee do not exceed $100, provided such excluded payments are disbursed annually if exceeding $10, and provided that upon written request of the payee, such excluded payments are disbursed monthly if exceeding $25; or
(2) payments which in the aggregate of the accumulation of oil or gas proceeds to one payee do not exceed $10, provided such excluded payments are disbursed when production from the relevant well or wells ceases or when the payor’s responsibility for making payment for production ceases, whichever occurs first, and provided that upon written request of the payee, such excluded payments are disbursed annually.
Before proceeds greater than $25 may be accumulated, the payor shall provide notice to the payee that there is an option to be paid monthly for proceeds greater than $25. Such notice to the person shall also provide directions for requesting monthly payment and constitutes notice to all heirs, successors, representatives and assigns of the payee.