Designation and distribution of earnings owed to owners of mineral rights who are unknown or unlocated.

(1) In the event that the operator of a well cannot locate the owner of a minority mineral interest within a drilling unit or the identity of the minority mineral interest owner remains unknown to the operator after reasonable and diligent attempts to locate said owner, the operator may request that the department act in a receivership capacity for these rights. These rights shall be administratively assigned to the operator and designated as “leased to the operator” by an oil and gas order of the department for the economic life of the well after satisfying the following conditions:

(a) The oil and gas administrator has been provided a legal description and a current title opinion for the mineral rights or interests at issue.

(b) The operator has attempted to locate the owner of the mineral rights and has provided the oil and gas administrator documentation that the attempt was in a diligent manner. For purposes of this subsection, a diligent attempt to notify shall be an attempt to contact the owner by registered mail at the owner’s last known address.

(c) The oil and gas administrator has prepared and the department has adopted an order that describes: the mineral interest, the record of the attempt to locate the owner, the pro rata share of the earnings from the well owed to this mineral owner, and the method by which the pro rata share was determined. The order shall designate the operator as “lessee” for revenue and accounting purposes. The order shall remain in effect for the economic life of the well but must contain a provision that allows for direct payment by the operator to the mineral owner of the pro rata share in the event that the mineral owner is identified. A single order issued by the department may apply to one or more unknown or unlocated mineral owners in a single unit or more than one unit in a single field.

(d) The department has established an accounting procedure so that funds can be allocated to mineral rights parcels owned by unknown or unlocated persons within the drilling unit.

(e) The operator has deposited a sum equal to the bonus determined in paragraph (2)(a) into the Minerals Trust Fund.

(f) The operator has filed the order as a public record in the county where the unit is located.

(g) The operator has paid a filing fee equivalent to the application fee for a permit to drill an oil and gas well.

(2) The pro rata share due the unknown or unlocated mineral owner shall be the total of the bonus and royalty amounts designated by the oil and gas administrator as established in the following manner:

(a) The amount of $25 per acre shall be paid as a one-time, per-acre bonus providing that from October 1, 1994, this figure shall be increased annually by a percentage equal to the increase in the cost-of-living index published by the United States Department of Commerce.

(b) The amount of royalty shall be the value of one-eighth of the produced oil and gas for the unit.

(3) Once the department has issued the order and on an annual basis, within 30 days after the anniversary date of the order, the operator shall forward funds to the oil and gas administrator in the amount of the pro rata share of royalty identified as belonging to an unknown or unlocated mineral owner. The operator may elect to pay these funds in a lump sum, annually, for one or more drilling units so long as they are accompanied by an accounting for each entity as established under paragraph (1)(d). The funds shall be deposited in the Minerals Trust Fund on account for and on behalf of the unknown or unlocated mineral owner. The department shall require an annual statement from an independent certified public accountant verifying the accuracy of the royalty accounting. Annually, the oil and gas administrator shall cause to have published at the expense of the operator a notice of the value of pro rata shares on deposit in the Minerals Trust Fund for all unknown or unlocated mineral owners in a newspaper of record for the county in which the producing unit is located. The published notice shall provide any information that would help to identify or locate the owner. The royalties shall continue to be sent to the oil and gas administrator for the economic life of the well unless the owner is identified.

(4) Should a previously unidentified or unknown person come forward to claim a pro rata share, the department shall disburse the amount of principal and interest on account after verification of the authenticity of the claim. The name of the person shall then be given to the operator so that continuing royalty payments can be made directly to the person through the remaining economic life of the well.

(5) Upon issuance of the order, the operator who is now administratively designated as “lessee” shall be entitled to seven-eighths of the value of the produced minerals, and the unknown or unlocated owner shall be entitled to the pro rata share of the one-eighth of the value of the produced minerals for the economic life of the well. The operator is prohibited from causing any tax lien on the mineral rights by operator’s failure to pay applicable state and county taxes.

(6) If the funds on deposit remain unclaimed, after a period of 5 years from the date of first production from the well, the funds are presumed abandoned and shall be disposed of pursuant to chapter 717.

(7) For purposes of this section, the term “unit” shall also mean “unit operation” as used in s. 377.28.