New Mexico Administrative Code › Title 19 - NATURAL RESOURCES AND WILDLIFE › Chapter 2 - STATE TRUST LANDS PART 24 CULTURAL PROPERTIES PROTECTION › Part 100 - RELATING TO OIL AND GAS LEASES › Section 19.2.100.57 - CALCULATING AND REMITTING OIL AND GAS ROYALTIES

Current through Register Vol. 35, No. 13, July 16, 2024
A. Payment of royalties - appeal to
				commissioner: Payment shall be made in the time and in the manner described
				below:
(1) Each lessee whose average monthly
				state royalty payment for the twelve months ending with the latest March 31,
				was twenty-five thousand dollars ($25,000) or less shall pay royalties on or
				before the twenty-fifth day of the second month following the month for which
				royalties are due. Unless the remitter elects to pay royalties by means of
				electronic funds transfer, payment shall be made by check payable to the
				commissioner of public lands. Payment shall be mailed or delivered to the
				taxation and revenue department along with any paper report. If the remitter
				elects to pay royalties by means of electronic funds transfer, payment shall be
				made in accordance with Option 1 or Option 2 in Paragraph (4) of Subsection A
				of 19.2.100.57 NMAC and shall conform with the special instructions on
				electronic transmission of state royalty payments for separate oil and gas
				royalty reporting in the ONGARD system.
(2) Unless an election is timely made to pay
				royalties pursuant to Paragraph (3) of this Subsection, each lessee whose
				average monthly state royalty payment for the twelve months ending with the
				latest March 31, was greater than twenty-five thousand dollars ($25,000) shall
				pay royalties on or before the twentieth day of the month following the month
				for which the royalties are due. Payment shall be made in accordance with
				Paragraph (4) of this Subsection.
(3) In lieu of paying royalties within the
				time specified by Paragraph (2) of this Subsection, a lessee may submit to the
				lessor, in writing, an election to pay royalties within the time frames
				specified for state severance taxes. Royalties paid by any lessee making the
				election under this Paragraph shall be due on the twenty-fifth day of the
				second month following the month for which the royalties are due. However, on
				or before the twenty-fifth day of the month in which the election is made and
				on or before the twenty-fifth day of each month thereafter, the lessee shall
				also make an advance royalty payment. Beginning with royalties initially paid
				under this Paragraph and each month thereafter, the previous month's advance
				royalty payment shall be taken as a credit. The amount of the advance royalty
				payment shall be adjusted by July 25 of each year and shall equal the average
				monthly royalty paid during the twelve months ending with the latest March 31.
				Payment shall be made in accordance with Paragraph (4) of this
				Subsection.
(4) Lessees remitting
				royalties under the provisions of Paragraphs (2) and (3) of this Subsection
				shall make payments in accordance with one of the four options listed below.
				For payment to be considered timely, the state land office must have access to
				funds on the due date for royalty remittances. Payment shall be made in
				accordance with the instructions on special payment procedures. Such payment
				can only be utilized with the separate oil and gas royalty reporting in the new
				ONGARD system.
(a) Option 1: automated
				clearinghouse (ACH) deposit.
(b)
				Option 2: fedwire transfer.
(c)
				Option 3: check drawn on any New Mexico financial institution. Payment shall be
				made in the manner prescribed by the provisions of this rule.
(d) Option 4: check drawn on any domestic
				non-New Mexico financial institution. Payment shall be made in the manner
				prescribed by the provisions of this rule.
(e) "Financial institution" means any state-
				or nationally-chartered federally-insured financial institution.
(5) Irrespective of whether a
				lessee pays royalties pursuant to Paragraph (1), (2) or (3) of this Subsection,
				all royalty information shall be reported on forms prescribed by the lessor and
				shall be submitted on or before the twenty-fifth day of the second month
				following the month for which royalties are due. The lessee shall indicate in
				the space provided if payment accompanies the report or if payment is made by
				separate check, fedwire or ACH transfer.