Royalty Compliance

The Royalty Compliance Section assures timely and accurate payment of royalties in return for the removal of minerals from Trust Lands. In addition, this section serves over 400 oil, gas, coal, sand & gravel and hard mineral companies by providing them with information for State reporting guidelines.

The Section processes royalty and production reports to ensure the trust receives full and fair value for the minerals that are extracted from State Trust Land.

What does this mean to the public?

Staff works in conjunction with companies to help maintain compliance.

The Section conducts audits to recover unpaid royalties. Penalties from these audits are deposited in the State General Fund for immediate appropriation by legislative action; and, interest from these audits is deposited to the assigned Permanent Income Fund for specific uses during the budget cycle.

By implementing the Leasing and Royalty Compliance System (LARCS) software, staff is now able to process funds in a more effective and efficient manner; and, reporters and payers of royalty information can use real time on-line report submission. This insures proper distribution of royalties received from Trust Lands.

The Division is currently working towards the creation of a new electronic auditing system which will allow staff to complete audits in a much shorter period of time. Past comprehensive audits took up to two years for completion. With this system, the length of time to complete an audit will be considerably less.