Montana Code 77-3-316. Rental and royalty terms
77-3-316. Rental and royalty terms. (1) The compensation of the state under all coal mining leases must be upon a rental and royalty basis and must be fixed and determined by the board.
Terms Used In Montana Code 77-3-316
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- 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
- 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
(2)The rental and royalty terms of each lease must be subject to readjustment to reflect fair market value at the end of its primary term of 10 years and at the end of each 5-year period thereafter if the lease is producing coal in commercial quantities.
(3)The rental may be on a per-acre basis or per-ton basis but the rental may not be less than $2 per acre.
(4)(a) The amount of the royalty must be based upon:
(i)the kind, grade, and character of the coal in each particular mine;
(ii)the size, shape, and nature of the coal vein, strata, or body; and
(iii)the shipping and marketing facilities for the product.
(b)Consideration must also be given to every other known factor affecting the value of each particular coal mining lease, but the royalty for the coal mined may not be less than 10% of the f.o.b. mine price of a ton prepared for shipment.