27-566. Notice to lessee of election; storage

A. Not less than eleven weeks before the sale of royalty oil by the department, the department shall give the lessee written notice of the department's election to receive the quantity of royalty oil on the date specified by the department.

B. If the notice of election is pursuant to an application to purchase by an Arizona refining business, the quantity shall not be less than the amount applied for.

C. Written notice shall be served on the lessee at the lessee's business office address in this state on file with the department by certified mail or by personal service in the same manner as for a civil action in superior court. Service is deemed complete and notice given on the date of mailing the notice.

D. Upon receipt of the notice of election, the lessee shall immediately advise the department by certified mail of the location of the storage facility to which the lessee will deliver the royalty oil. The lessee shall deliver such quantity and quality at the time specified by the department into accessible storage and store it as the property of the department without storage cost to the department for not more than ten days after the date of sale. Within such time the lessee shall allow free and undisturbed access to the department's buyer to remove the stored royalty oil without cost to the buyer except for the costs of sale due to the department. For purposes of this section, " accessible storage" means whatever facilities are available to the lessee. Nothing in this section shall require the construction or maintenance by the lessee of additional facilities for the storage of or access to royalty oil.

E. Upon sale and payment by the buyer, the buyer is deemed to be the owner of the subject royalty oil for all purposes.