Section 85-06-01-12 - Reports of lessee - Delinquency penaltyRoyalty payment and reporting are due on forms prescribed by the department as follows:
1. For gas: a. Within one hundred twenty-three days of the last day of the month in which initial production occurs, royalty payment and reporting are due for the first, second, and third months of production.b. Successive royalty payments and reporting are due within sixty-one days of the last day of the month in which production occurs.2. For oil: a. Within ninety-two days of the last day of the month in which initial production occurs, royalty payment and reporting are due for the first, second, and third months of production.b. Successive royalty payments and reporting are due within thirty days of the last day of the month in which production occurs.3. The royalty payment and reporting deadline may be extended by the commissioner upon written request. An extension, if granted, only applies to future royalty payments and reporting.4. Any sum, other than delay rentals, not paid when due is delinquent and is subject to a delinquency penalty of one percent of the sum for each thirty day period of delinquency or fraction of delinquency period, unless a waiver or board review is requested under subsection 6. For leases issued after July 31, 2021, any penalty must be calculated pursuant to subsection 3 of North Dakota Century Code section 15-05-10.5. Unpaid royalties bear interest under subsection 2 of North Dakota Century Code section 15-05-10.6. A lessee has thirty days from the date of the receipt of a notice of a penalty and interest assessment to pay the penalty and interest, request a waiver or reduction, or to request board review.a. A request for a waiver or reduction of the penalty or interest or a request for board review must be in writing and provide the grounds for the request.b. The following factors may be considered when deciding to waive or reduce the penalty or interest: the reason for the late payment; the degree of control the payor had over the late payment; any unusual or mitigating circumstances involved; the loss of interest earnings to the trust involved; and any other relevant factors.c. A waiver or reduction of penalty and interest does not constitute a waiver of the right to seek the full amount of both penalty and interest if the initial claim for royalty payment is not paid. If a claim for unpaid royalties, penalties, and interest is settled and payment received, the amount of penalties and interest not collected is deemed waived. N.D. Admin Code 85-06-01-12
Adopted by Administrative Rules Supplement 375, January 2020, effective 1/1/2020.Amended by Administrative Rules Supplement 2022-384, April 2022, effective 4/1/2022.General Authority: NDCC 15-05-09, 15-05-10, 15-07-20, 15-08.1-06, 61-33-06
Law Implemented: NDCC 15-05-09, 15-05-10, 47-16-39.2