Opinion ID: 2458767
Heading Depth: 1
Heading Rank: 5

Heading: reimbursement for withheld conservation fees

Text: Hockett also complains about the reduction of his royalty payments by a proportionate share of the conservation fee assessed by the KCC. Hockett's basis for this claim differs from that relied upon in the severance tax claim. Unlike his challenge to the KDR's statutory authority to assess a severance tax on helium, Hockett does not contest the KCC's statutory authority to assess a conservation fee. Rather, Hockett's claim is that Oil Company owes the entire fee and that he, as a royalty owner, has no legal obligation to share in that operational expense. Accordingly, if Hockett is correct, then Oil Company's royalty payments effectively allocated 1/8 of the conservation fee to Hockett and, in that case, Oil Company would possess the money that Hockett now seeks to recoup. In other words, Oil Company is the proper defendant for this issue. Our task is to determine whether the conservation fee, like the severance tax, is to be borne ratably by all persons with a beneficial interest in the gas.