Senate committee advances bill to define ‘net proceeds’ for Arkansas oil and gas royalties after lengthy debate

The Senate Agriculture, Forestry & Economic Development Committee voted to advance House Bill 16‑56, which would define “net proceeds” in Arkansas Code § 15‑72‑305 and change how gas royalties are accounted for going forward. The bill drew extensive testimony from royalty owners, oil and gas lawyers and county officials before the committee approved a motion to pass.

Supporters said the bill would remove legal uncertainty created by recent federal litigation and conflicting interpretations of state law. “Net proceeds has no statutory definition,” oil and gas attorney Mark Robinette told the committee, adding that the change is intended to “put a definition on net proceeds” that restores the treatment royalty owners and operators understood before 2019.

The bill’s backers said the change is limited in scope. Robinette told the committee the measure “does not purport to be retroactive. It does not purport to…