1.
Rentals. The Division is obligated to receive full value for the resources
leased to persons of profit. This obligation includes obtaining a fair rental
for the lands being used for mineral extraction.
(a) Rental rates are established in the
Division fee schedule Rental due dates shall be on or before the annual
anniversary date of the effective date of the lease, the effective date of the
lease being the first day of the month following the date on which the lease is
issued.
(b) Any overpayment of
advance rental occurring from mineral lease applicant's incorrect listing of
acreage of lands described in the application may be credited toward the
applicant's rental account.
(c)
Minimum annual rental on any mineral lease is $20.
(d) The division shall accept lease payments
made by any party, but the acceptance of lease payments shall not be deemed to
be a recognition of any interest of the payee in the lease.
(e) Effective January 1, 2010, rental credits
will be phased out over a four year period. For the calendar year beginning
January 1, 2010, 75% of rentals due can be credited against royalties for those
leases that allow rental credits. For the calendar year beginning January 1,
2011, 50% of rentals due can be credited against royalties for those leases
that allow rental credits. For the calendar year beginning January 1, 2012, 25%
of rentals can be credited against royalties for those leases that allow rental
credits. Effective January 1, 2013, rental credits will no longer be allowed on
any mineral leases.
2.
Royalty Provisions
The following production royalty rates shall apply to all
classified mineral leases, as listed in
R652-20-200, issued on or after
the effective date of the applicable adjusted royalty rate. Mineral leases
entered into prior to the effective date of adjusted royalty rates shall retain
the royalty rate as specified in the lease agreement.
(a) Royalty rates on substances under oil,
gas, and hydrocarbon leases.
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TABLE
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Oil
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16-2/3%
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-
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Sulfur
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12-1/2%
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Gas
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16-2/3%
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-
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Other hydrocarbon substances
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6-1/4%(1)
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(1) For leases that allow rental credits, the
rental paid for the lease year shall be credited against production royalties
as they accrue for that lease year, but not against advance or minimum
royalties unless allowed by the mineral lease.
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(b)
Royalty rates on mineral commodities, coal, and solid hydrocarbons.
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TABLE
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Coal
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8%
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Phosphate
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5%
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Oil Shale (1)
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5%
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Potash and Associated Minerals
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5%
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Asphaltic/Bituminous
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Gypsum
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5%
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Sands (2)
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7%
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Gilsonite
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10%
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Clay
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5%
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Met. Minerals:
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Geothermal Resources
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10%
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Fissionable
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8%
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Building Stone/Limestone
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5%
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Non-Fissionable
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4%
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(except 2% for calcined lime)
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Gemstone/Fossil(3)
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10%
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Volcanic Materials
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5%
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Magnesium
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1-1/2%
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Industrial sands
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5%
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Salt (Sodium chloride) (4) $0.50/dry ton
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(1) 5% during the first five years of production
and increasing annually thereafter at the rate of 1% to a maximum of
12-1/2%.
(2) May be escalated after the first five years of
production at the rate of 1% per annum to maximum of 12-1/2%.
(3) Requires payment of annual minimum royalty of
$5 per acre.
(4) Beginning January 1, 2001, the royalty rate per
ton will be adjusted annually by the Producer Price Index for Industrial
Commodities as provided under
R652-20-1000(e)
using 1997 as the base year.
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(c)
Notwithstanding the terms of oil, gas, and hydrocarbon lease agreements, gas
and natural gas liquid reports, and their required royalty payments, are
required to be received by the division on or before the last day of the second
month succeeding the month of production. This extension of payment and
reporting time for gas and NGL does not alter the payment and reporting time
for oil and condensate royalty which must be received by the division on or
before the last day of the calendar month succeeding the month of production,
as currently provided in the lease form.
(d) Readjustment of salt royalties on royalty
agreements negotiated before July 9, 1992.
i)
The division is obligated to receive full value for the public trust resources
leased to persons for profit. This obligation includes obtaining a fair royalty
for salt produced from the waters of Great Salt Lake. The division shall
readjust the royalty rate for sodium chloride on all royalty agreements
negotiated prior to July 9, 1992. The royalty rate will be readjusted in
accordance with analysis done by the Utah Bureau of Economic and Business
Research, Office of Energy and Resource Planning and division staff and with a
rule change approved by the Board of State Lands and Forestry on July 9, 1992
to increase the royalty on salt from $0.10 per ton to a rate per ton
approximately equivalent to three percent of gross value of dry salt. The
division has determined this rate to be $0.50 per dry ton. The royalty rate
shall be phased in as provided in Subsections (ii) and (iii).
ii) Effective January 1, 1997, the royalty
rate for sodium chloride shall be $0.20 per dry ton. Effective January 1, 1998
and on each January 1 thereafter, the royalty rate for sodium chloride shall be
increased by the lesser of $0.10 per dry ton or $0.10 per dry ton times the
percent of salt in brine by weight at the point of intake for each lessee
divided by the percent of salt by weight derived from samples at sampling point
LVG4 as measured by the Utah Geological Survey for the current year. The method
for calculating the percent salt in brine from Utah Geological Survey and
company data shall be determined by the division, but shall include a weighted
average of samples taken at low and high water and of samples taken at
different depths at the sampling point. The point of sampling for each producer
shall be determined by the division after considering factors including the
location of the intake canal, point of diversion for water rights, and
placement of intake pumps.
iii) The
annual adjustment under Subsection(ii) shall continue until the royalty rate
for a lessee is $0.50 per dry ton or an amount per ton as determined under
Subsection (e), whichever is greater, at which time subsequent annual
adjustments shall be determined in accordance with Subsection (e).
(e) Effective January 1, 2001 or
the date on which the royalty paid by a lessee reaches $0.50 per dry ton,
whichever is later, the royalty rate for sodium chloride will be adjusted
annually by the Producer Price Index for Industrial Commodities using the
following formula: $.50 times the Producer price index for Industrial
Commodities for the current year divided by the Producer Price Index for
Industrial Commodities for 1997.
