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
Universal Citation: 19 NM Admin Code 19.2.100.57
Current through Register Vol. 35, No. 24, December 23, 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.
B. Effective date: The provisions of 19.2.100.57 NMAC shall be used to calculate, report and remit royalties for oil and gas produced on or after January 1, 1990.
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