27-234. Rent; royalty; appeal; interest; penalty; lien
A. Before issuing a mineral lease the state land commissioner shall establish the annual land rental for the mineral lease. The rental shall be based on an appraisal of the land that, for purposes of establishing the rent, shall not include the contributory value of mining. The annual rental:
1. Shall be at least the average rental assessed per acre by the states of Colorado, New Mexico and Utah. If a state assesses a range of rental rates rather than a single rental rate, the median of the range of rental rates assessed by that state shall be used in calculating the average under this paragraph.
2. Is payable in advance of executing the mineral lease agreement by the commissioner and at the beginning of each annual period thereafter.
B. In addition to the annual rental, a production royalty of at least two per cent is assessed against the gross value of all minerals produced and sold from the mineral lease. Where processing is performed after the mineral is extracted, the mineral shall be deemed produced and sold when the concentrate or cathode results from that processing. The royalty rate for each mineral lease shall be based on an appraisal of this state's interest as a lessor in the mineral and shall be established according to the appraisal standard prescribed by subsection C of this section. The gross value shall be based on the monthly average price of the mineral as quoted by the mineral commodities market and industry trade journals as determined by the commissioner and specified in the lease. If a mineral does not have a published price quotation, the gross value shall be based on an appraisal that establishes the fair market price of the mineral. The royalty shall not be based on any hedging or price protection arrangements that may be entered into by the lessee and any of these arrangements shall not be considered in any appraisal that established the fair market price of the mineral.
C. The commissioner shall appraise this state's interest as a lessor in the mineral according to standard appraisal methodology and, to the extent feasible, shall base the appraisal on market royalty rates. The appraisal shall be completed in order to determine whether a royalty rate greater than two per cent of the gross value is required in order to obtain a fair market value for this state's interests as a lessor in the mineral. The appraisal shall be completed before issuing a mineral lease, at the end of the first year of commercial production and again for each renewal of the lease. If, during the term of the lease, new minerals are produced and sold from the mineral lease, or changes in technology substantially affect the value of this state's interest as a lessor, the commissioner at that time may reappraise that interest and, if appropriate, adjust the royalty rate.
D. For mines existing on state lands on June 8, 1989, the royalty paid under this section shall not be less than the royalty which would have been paid under statutes in effect immediately before June 8, 1989.
E. The costs of all appraisals conducted under this section shall be assessed against the lessee and added to the amount due as rental under this section.
F. The department shall review all property tax assessment information relevant to the mineral lease. The department shall maintain that information on a confidential basis as prescribed by title 42, chapter 2, article 1.
G. Every mineral lease of state land shall require the lessee to make the following records available on an annual basis:
1. Itemized statements of mineral production.
2. Relevant tax records.
3. Additional relevant records pertinent to appraisal, compliance with the lease and mineral production deemed necessary by the commissioner.
H. The information obtained under subsection G, paragraph 2 of this section and any trade secrets are confidential. For purposes of this subsection, trade secrets are information to which all of the following apply:
1. A person has taken reasonable measures to protect the information from disclosure and the person intends to continue to take those measures.
2. The information is not and has not been reasonably obtainable by legitimate means by other persons without the person's consent, other than by governmental entities and other than in discovery based on a showing of special need in a judicial or quasi-judicial proceeding.
3. A statute does not specifically require disclosure of the information to the public.
4. The person has satisfactorily shown that disclosure of the information is likely to cause substantial harm to the person's competitive position.
I. Mineral lessees shall make monthly royalty payments based on the mineral production activity of the previous month.
J. Appeals of the appraisal decision of the commissioner may be taken pursuant to section 37-215 to the board of appeals, established by section 37-213, which shall affirm, modify or reverse the decision of the commissioner within one hundred eighty days. Except as provided in section 41-1092.08, subsection H, decisions of the board of appeals under this subsection are subject to judicial review pursuant to title 12, chapter 7, article 6. As a condition of the appeal, the lessee must continue to make all rental and royalty payments due based on the commissioner's final appraisal decision, and the court shall not stay the commissioner's decision, in whole or in part, pending a final disposition of the case. The state shall segregate rents and royalties paid while an appeal is pending and shall not distribute such monies to the state general fund or to the trust beneficiaries until the appeal is completed.
K. If a lessee fails to pay rent or royalty, including appraisal costs under subsection C of this section, on or before the date the payment is due, the amount due accrues interest at the rate and in the manner determined pursuant to section 42-1123. In addition, if it is determined that the failure to pay is not due to reasonable cause, a penalty of five per cent of the amount found to be remaining due shall be added to the rent or royalty for each month or fraction of a month elapsing between the due date and the date on which it is paid. The total penalty shall not exceed one-third of the rent or royalty remaining due. The penalty so added to the rent or royalty is due and payable on notice and demand from the commissioner.
L. If any rent, royalty, appraisal assessment, interest or penalty is not paid by the lessee when due, the unpaid amounts constitute a lien from the date the amounts become due on all property and rights to property that belong to the lessee and that are located on state land.