The commission may determine the value of products severed from a production unit when:
A. the operator and purchaser are affiliated persons; or when
B. the sale and purchase of products is not an arm's length transaction; or when
C. products are severed and removed from a production unit and a value as defined in this act is not established for such products.
The value determined by the commission shall be commensurate with the actual price received for products of like quality, character and use which are severed in the same field or area.
History: 1953 Comp., § 72-21-6, enacted by Laws 1959, ch. 54, § 6.
Cross references. — For meaning of "commission", see 7-31-2A NMSA 1978.
Compiler's notes. — The term "this act", referred to in Subsection C, means Laws 1959, ch. 54, compiled as 7-31-1, 7-31-2, and 7-31-4 to 7-31-11 NMSA 1978.
Determination of value. — The statute does not mandate the way in which the department must calculate processing costs, whether by a comparable value or by some other method. Rather, the final value of natural gas calculated by the department must be commensurate with similar products. Chevron U.S.A., Inc. v. State ex rel. Taxation and Revenue Dep't, 2006-NMCA-050, 139 N.M. 498, 134 P.3d 785, cert. denied, 2006-NMCERT-005, 139 N.M. 567, 136 P.3d 568.
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