47.02.040 Exemptions from Tax

The following volume exemptions from severance tax are authorized:

(a) Volumes attributable to a landowner's royalty interest established in a lease or minerals agreement issued by the Tribe or by an Indian allottee mineral owner.

(b) Volumes attributable to an overriding royalty interest granted to or obtained by the Tribe or by an Indian allottee owner derived from working interests in leases or mineral s agreements issued by the Tribe or by an Indian allottee mineral owner.

(c) volumes used, for the benefit of operations on the leased premises from which such substances are produced, prior to removal therefrom or sale; provided , that volumes attributable to use off the lease from which such mineral s are produced are not exempt from severance tax except as set forth in Section 47.02.040(d) below:

(d) Volumes associated with cross-lease beneficial use or shrinkage volumes factored into allocations associated with a central delivery facility, if and only if the lessee or operator has obtained prior written approval from the Tribal Council or its authorized representative for such cross-lease beneficial use or for establishment of the central delivery facility and the formula for allocating volumes associated with such central delivery facility. In granting or denying exemptions for cross-lease beneficial use or for central delivery facilities, the Tribal Council or its authorized representative shall determine from the totality of the circumstances, including relative royalty rates, whether exempting such volumes from tax will adversely impact the best interests of the Tribe. A requested exemption for cross-lease beneficial use, but not for a central delivery facility, shall be deemed granted unless the Tribal Council or its authorized representative shall have taken action denying a written request within sixty (60) days of receipt of such request.