Montana Code 77-3-435. Payments due to state — audit — notice — action
77-3-435. Payments due to state — audit — notice — action. (1) The report under 77-3-431 must be accompanied by payment of the amount due the state as royalty for the month covered by the report unless the state’s royalty is being or has been paid directly by the purchaser. However, when the amount of royalty due from a lease is determined by the board to be so small as to make it uneconomical to collect monthly, the board may authorize royalty payments to be made semiannually.
Terms Used In Montana Code 77-3-435
- Knowingly: means only a knowledge that the facts exist which bring the act or omission within the provisions of this code. See Montana Code 1-1-204
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Montana Code 1-1-201
- Writing: includes printing. See Montana Code 1-1-203
(2)Oil and gas leases granted by the state must contain suitable provisions imposing upon all lessees the obligation to make payments due the state in the manner, at the time, and to the representative of the state that may be required by the board.
(3)Except as provided in subsection (4), the department may, within 7 years of the filing of a report pursuant to 77-3-431, commence an audit of a lessee’s or a former lessee’s operation to determine whether the report is complete and accurate and whether all royalties owed have been paid. The department shall notify the lessee in writing of the audit. The notice must describe the period for which the audit is being conducted. Upon conclusion of the audit, the department shall notify the lessee of the department’s conclusions and, if the department has determined that additional royalties are owed, the basis for that determination. An action to compel payment of royalties due must be commenced within 2 years of the date of mailing the notice.
(4)If a lessee or former lessee, with intent to evade payment of royalties, purposely or knowingly files a false report or purposely or knowingly fails to pay royalties owed, the department may conduct an audit and file an action to collect royalties at any time after the royalty is due.