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, lessee obligations regarding payments and reporting, and lessor rights to monitor operations and enforce compliance with lease terms.

Moreover, the bill emphasizes the necessity for lessees to conduct operations in good faith, with a maximum cessation period of twenty consecutive days before being deemed abandoned. It mandates compliance with all relevant laws and requires written notice to the lessor if operations resume after a cessation. The bill also details the procedures for public sales of oil and gas leases, including monthly sales by the commissioner, who can set minimum bonuses and reject 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