The bill amends Section 19-10-4.3 of the New Mexico Statutes to establish a new royalty rate structure for oil and gas development leases on state trust lands, aiming to enhance revenue for beneficiaries. The new legal language specifies that the royalty rate will range from three-sixteenths to one-fifth, with alternative rates for certain restricted districts. Additionally, it requires lessees to provide detailed information about the leased land, including subdivision, section, township, range, acres, and institution. The bill also outlines conditions for lease cancellation, obligations for timely royalty payments, and procedures for drilling operations, emphasizing compliance to avoid lease termination.

Moreover, the bill details the responsibilities of lessees, including the requirement to file a written notice of intention to commence operations and to report the status of operations every thirty days. If operations cease for over twenty consecutive days, it will be deemed abandonment, resulting in lease termination. The bill also specifies the process for public sales of oil and gas leases, with the commissioner conducting sales monthly and having the authority to set minimum bonuses and reject non-compliant bids. The effective date for these provisions is July 1, 2025.

Statutes affected:
introduced version: 19-10-4.3
FC substitute: 19-10-4.3, 19-10-17
Final Version: 19-10-4.3, 19-10-17