A. Before any person commences development or operations of geothermal resources under a lease, including any prospecting activity on the leased land, the person holding the lease shall execute and file with the commissioner, a bond or undertaking in an amount fixed by the commissioner which shall not be less than five thousand dollars ($5,000) in favor of the state of New Mexico for the benefit of the state's contract purchaser, patentee or surface lessee. The purpose of the bond or undertaking shall be to secure payment for damages to the tangible improvements on the leased land as may be suffered by reason of the development and operations on the land by the person holding the lease.
B. The commissioner may, at any time, require a person holding a lease to furnish a bond in a reasonable amount to guarantee payment of royalties to become due the state if, in his judgment, such is necessary to protect the interest of the state.
C. The commissioner shall, by regulations, establish the standards and the forms for any bonds or undertakings required pursuant to this section.
History: 1953 Comp., § 7-15-18, enacted by Laws 1967, ch. 158, § 18.
Cross references. — For filing by mineral lessee of bond securing payment for damage to the surface, and bond guaranteeing payment of royalties, see 19-8-24 NMSA 1978.
For bond required of mineral lessee of lands sold on deferred payment plan with reservation of minerals, see 19-10-26 NMSA 1978.
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