Section 1 definition "net allowed cost" BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
"net allowed cost" means an amount, for a producer's interest, for a calendar month that is
(a) the first calendar month subsequent to the project approval month, determined by the following formula:
| A + B + C – D |
| where | |
| A | means the amount of allowed historical cost, |
| B | means the amount of allowed operating cost multiplied by a factor of 1.1, |
| C | means the amount of allowed capital cost multiplied by a factor of 1.01, and |
| D | means the amount of gross revenue, or |
(b) any calendar month after the project application month, other than the first calendar month after the project application month, determined by the following formula:
| A + B – C |
| where | |
| A | means the amount of allowed operating cost multiplied by a factor of 1.1, |
| B | means the amount of allowed capital cost multiplied by a factor of 1.01, and |
| C | means the amount of gross revenue; |
Section 1 (1) definition of "reporting facility" was added by BC Reg 327/2010, effective November 19, 2010.
Section 1 (1) definition of "reporting facility" BEFORE amended by BC Reg 194/2018, effective November 1, 2018.
"reporting facility" means
(a) a battery as defined in the Drilling and Production Regulation, or
(b) if there is no battery to receive the effluent from a net profit royalty well event, the surface equipment associated with that net profit royalty well event that measures the volume of effluent produced;
Section 1 (1) definitions of "invoice" and "operator of a reporting facility" were added by BC Reg 194/2018, effective November 1, 2018.
Section 5 (2) BEFORE amended by BC Reg 194/2018, effective November 1, 2018.
(2) Sales value amounts referred to in subsection (1) (a) are to be calculated as the sales volumes multiplied by the appropriate producer price.
Section 6 (2) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(2) The amount of net profit royalty payable by a producer's interest under subsection (1), for a calendar month that is a calendar month in
Section 7 (1) (d) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(d) if the collector has, under subsection (2), fixed a unit selling price for the oil or natural gas by-products disposed of in a producing month, the deemed value of the oil or natural gas by-products so disposed of, divided by the corresponding volume of the oil or natural gas by-products.
Section 8 (2) and (3) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(2) On or before the 25th day of the second calendar month following a producing month in which a net profit royalty well event produces oil or natural gas, a producer must pay to the collector an estimated monthly net profit royalty equal to an estimate of the net profit royalty due under section 6 (2) for the calendar month.
(3) On or before the later of the 25th day of the calendar month in which government invoices are delivered under section 16 and 15 days after the date on which the government invoices are delivered, a producer to whom government invoices are delivered, in respect of their producer's interest, must pay the total of those invoiced amounts less the estimated net profit royalty amounts paid for each production month in the calendar year under subsection (2).
Section 8 (3.1) was added by BC Reg 327/2010, effective November 19, 2010.
Section 8 (2) and (3) BEFORE amended by BC Reg 194/2018, effective November 1, 2018.
(2) On or before the 25th day of the second calendar month following a production month in which a net profit royalty well event produces oil or natural gas, a producer must pay to the collector an estimated monthly net profit royalty equal to an estimate of the net profit royalty due under section 6 for the production month.
(3) On or before the later of the 25th day of the calendar month in which invoices are delivered to a producer under section 16 (1) in respect of a production month and 15 days after the date on which the invoices are delivered, the producer must pay the total of those invoiced amounts less the estimated net profit royalty amounts paid in respect of the production month under subsection (2) of this section.
Section 8 (3.1) BEFORE repealed by BC Reg 194/2018, effective November 1, 2018.
(3.1) On or before the later of the 25th day of the calendar month in which invoices are delivered to a producer under section 16 (1.1) in respect of a production month and 15 days after the date on which the invoices are delivered, the producer must pay the total of those invoiced amounts less the amount paid in respect of the production month under subsections (2) and (3) of this section.
Section 9 (1), (2) and (3) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(1) A producer must, on or before the last day of the second calendar month following the end of each calendar month that is a production month, deliver to the collector, a report in the form and manner required by the collector, which includes a calculation of the amount of net profit royalty payable to the government under section 6 (2) for the calendar month.
(2) An operator of a project must, on or before the 20th day of the calendar month after the first calendar month in which a net profit royalty well event within the project produces oil or natural gas, file a report indicating each producer's interest in the project.
(3) A producer who has acquired an interest in a project must, on or before the 20th day after the second calendar month after the calendar month in which the closing date of the acquisition of interest occurs, file a report with the collector indicating the producer's interest in the project.
Section 9 (3.1) was added by BC Reg 327/2010, effective November 19, 2010.
Section 9 (4) (a) and (b) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(a) by producing month for net profit royalties,
(b) by producing month for estimated net profit royalties, and
Section 9 (4.1), (4.2) and (4.3) were added by BC Reg 327/2010, effective November 19, 2010.
Section 9 (5) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(5) Subject to subsection (6), a person may amend a report filed under subsection (1) by filing an amended report with the collector.
Section 9 (7) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(7) Every operator of a net profit royalty well event must, on or before the 20th day of the calendar month following the calendar month in which operations at the well event began or were suspended, file a report indicating the commencement or suspension of operations.
Section 9 (8) and (9) were added by BC Reg 327/2010, effective November 19, 2010.
Section 9 BEFORE re-enacted by BC Reg 194/2018, effective November 1, 2018.
Reporting
9 (1) The reports set out in subsections (2) to (4.3) and (7) to (9) must be filed with the collector in the form and manner required by the director.
(2) The operator of a reporting facility must, on or before the 25th day of the calendar month following each production month, file reports indicating the production and disposition in that production month of oil, condensate, natural gas and water obtained at the reporting facility.
(3) A producer of oil from a net profit royalty well event must, on or before the last day of the second calendar month following each production month, file a report indicating, for each reporting facility at which the producer had sales of oil produced from a net profit royalty well event in that production month,
(a) the volume of oil sold by the producer at that reporting facility in that production month,
(b) the sales value of oil sold by the producer at that reporting facility in that production month, and
(c) the eligible costs that, under section 7 (3), may be deducted for that production month.
(3.1) A producer of natural gas from a net profit royalty well event must, on or before the last day of the second calendar month following each production month, file a report indicating, for that production month,
(a) the producer's share of the volumes of marketable gas produced from each net profit royalty well event in which the producer has an interest,
(b) the producer's share of the sales volumes and values of natural gas by-products produced from each net profit royalty well event in which the producer has an interest, and
(c) the producer's share of the volume of natural gas produced from each net profit royalty well event in which the producer has an interest.
(4) A producer that, under section 8, makes a payment on account of a net profit royalty calculated under section 6 must, on or before the last day of the calendar month in which the payment is made, file a report respecting that payment indicating the amounts paid
(a) by production month for net profit royalties,
(b) by production month for estimated net profit royalties, and
(c) for penalties and interest.
(4.1) The operator of a reporting facility to which a net profit royalty well event is connected must, on or before the 20th day of the calendar month after the calendar month in which the net profit royalty well event is connected to the facility or in which a change in producers' interests in the net profit royalty well event is effective, file a report indicating the producers' interests or the change in producers' interests in the natural gas and oil produced from the net profit royalty well event.
(4.2) The operator of a unitized operation for which there is a unitization agreement under which net profit royalty is determined in relation to a tract according to production volumes allocated to that tract under the agreement must, on or before the 20th day of the second calendar month after the calendar month in which there is a change in producers' interests in the natural gas or oil allocated to a tract, file a report indicating the change in producers' interests in the tract.
(4.3) A person who operates a treating plant to recover clean oil or condensate produced from a net profit royalty well event must, on or before the 25th day of the calendar month following the calendar month in which oil, condensate or water is received, file a report that, for the month in which the oil, condensate and water is received, indicates the volumes of oil, condensate or water delivered to the treating plant and the reporting facility from which the product was delivered.
(5) Subject to subsection (6), a person may amend a report filed by that person under subsection (2), (3), (3.1), (4), (4.1), (4.2), (4.3), (7), (8) or (9) by filing an amended report with the collector.
(6) A person must not file an amended report under subsection (5) more than 72 months after the production month in relation to which the amended report is being filed.
(7) The operator of a net profit royalty well event must, on or before the 20th day of the calendar month following the calendar month in which operations at the net profit royalty well event began or were suspended, file a report indicating the commencement or suspension of operations.
(8) The operator of a project must, on or before the last day of the second calendar month following the project approval month, file a report indicating the allowed historical cost incurred by each producer in respect of the project.
(9) The operator of a project must, on or before the last day of the second calendar month following each production month, file a report indicating the allowed capital costs and the allowed operating costs incurred by each producer in respect of the project during the production month.
[am. B.C. Reg. 327/2010, s. 5.]
Section 11 (3) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(3) If, under subsection (2), interest is to be calculated on an amount, that interest must be calculated in accordance with the following formula:
 | D |  | ||||
| A | x | I | x | |||
| 365.25 |
| where | |
| A | means the amount on which interest is to be calculated, |
| I | means the applicable interest rate under subsection (1) or (2), and |
| D | means the number of days, from and excluding the 25th day of the calendar month at the end of which A is owing, to and including the 25th day of the following calendar month. |
Section 11 (4) (a) to (d) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(4) Interest on overpayments, penalties, interest and unpaid net profit royalties for a calendar month is to be calculated as follows:
(a) if, at the end of a calendar month, an amount is owing by a net profit royalty producer for net profit royalty, interest is to be calculated on the amount owing in accordance with subsection (3);
(b) if the amount of an estimate payment made on or before the end of a calendar month under section 8 (2) is greater than or less than the net profit royalty that is invoiced to the producer for that calendar month under section 15 (1), interest on the difference between the payment and the invoice amount is to be calculated in accordance with subsection (3);
(c) if an estimate payment is made after the due date for the estimated payment, interest is to be calculated, for each day that the estimate payment is late, in accordance with subsection (3);
(d) if net profit royalties are overpaid by a net profit royalty producer in a calendar month and the overpayment is not reimbursed or credited on or before the end of that calendar month, interest on that overpayment is to be calculated in accordance with subsection (3).
Section 11 (4) (e) and (f) were added by BC Reg 327/2010, effective November 19, 2010.
Section 11 (2) to (5) BEFORE amended by BC Reg 194/2018, effective November 1, 2018.
(2) The annual rate of interest during a quarterly period for overpayments is the prime lending rate of the principal banker to the government on the 15th day of the month immediately preceding the quarterly period commencing on January 1, April 1, July 1 and October 1 of each calendar year.
(3) If, under subsection (4), interest is to be calculated on an amount, that interest must be calculated in accordance with the following formula:
| D | | ||||
| A | x | I | x | |||
| 365.25 |
| where | |
| A | means the amount on which interest is to be calculated, |
| I | means the applicable interest rate under subsection (1) or (2), and |
| D | means the number of days, from and excluding the 25th day of the calendar month at the end of which A is owing, to and including the 25th day of the following calendar month. |
(4) Interest on overpayments and on unpaid net profit royalties is to be calculated as follows:
(a) if, at the end of a calendar month, an amount is owing by a producer for net profit royalty, interest is to be calculated on the amount owing in accordance with subsection (3);
(b) if the amount of an estimate payment made on or before the end of a calendar month under section 8 (2) is less than 90 percent of the net profit royalty that is invoiced to the producer for that calendar month under section 16 (1), interest on the difference between the payment and the invoice amount is to be calculated in accordance with subsection (3) of this section;
(c) if interest is payable under paragraph (a) or (b) on an amount and the whole or any part of the amount remains unpaid at the end of any calendar month following the calendar month in respect of which interest first became payable on that amount, interest is to be calculated on the unpaid portion of that amount in accordance with subsection (3);
(d) if net profit royalties are overpaid by a producer in a calendar month and the overpayment is not reimbursed or credited on or before the end of that calendar month, interest on that overpayment is to be calculated in accordance with subsection (3);
(e) if the amount of an estimate payment made on or before the end of a calendar month under section 8 (2) is greater than 110 percent of the net profit royalty that is invoiced to the producer for that calendar month under section 16 (1), interest on the difference between the payment and the invoice amount is to be calculated in accordance with subsection (3) of this section;
(f) if interest is payable under paragraph (d) or (e) on an amount and the whole or any part of the amount is not paid or credited on or before the end of any
calendar month following the calendar month in respect of which interest first became payable on that amount, interest is to be calculated on the unpaid portion of that amount in accordance with subsection (3).
(5) No charge is to be made if an interest charge is less than $5.
Section 11 (6) to (9) were added by BC Reg 194/2018, effective November 1, 2018.
Section 13 BEFORE re-enacted by BC Reg 327/2010, effective November 19, 2010.
Penalties
13 The penalty under section 74 (5) of the Act for failure to file a report required under section 9 within the required time is $100 for each day that the failure to file continues, or for any lesser number of days that the collector considers appropriate, up to a maximum amount payable under this section of $6 000 for each report.
Section 13 BEFORE re-enacted by BC Reg 194/2018, effective November 1, 2018.
Penalties
13 (1) The penalty under section 74 (5) of the Act for failure to file, within the required time, a report required under section 9 (4.1) of this regulation in relation to an interest in oil produced from a net profit royalty well event or a report required under section 9 (2), (3), (3.1), (4), (4.2) or (7) or section 16 (2) (a) of this regulation is $20 for each day that the failure to file continues, or for any lesser number of days that the collector considers appropriate, up to a maximum amount payable under this subsection of $6 000 for each report.
(2) The penalty under section 74 (5) of the Act for failure to file, within the required time, a report required under section 9 (4.1) of this regulation in relation to an interest in natural gas produced from a net profit royalty well event or a report required under section 9 (4.3) or (9) of this regulation is $100 for each calendar month or part of a calendar month that the failure continues, or for any lesser number of months that the collector considers appropriate, up to a maximum amount payable under this subsection of $6 000 for each report.
[en. B.C. Reg. 327/2010, s. 7.]
Section 16 (1) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(1) After receiving a report filed by a producer under section 9 (1) for a production month, the collector, on or about the 10th day of the third calendar month following the production month, is to deliver a Crown invoice to the producer for the amount of net profit royalty that is payable to the government by that producer.
Section 16 (1.1) was added by BC Reg 327/2010, effective November 19, 2010.
Section 16 (2) and (2) (a) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(2) If the collector, on examining a report filed under section 9 (1) or an amended report filed under section 9 (5), disagrees with the information or calculations in it, the collector may do either or both of the following:
(a) request the producer who filed the report or amended report to submit, within 60 days after the date of the request, a report based on the information the collector believes is correct;
Section 16 (3) (b) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(b) in any other case, not more than 72 months after the date of the receipt of the report on which the assessment or reassessment is based.
Section 16 (1), (1.1) and (2) BEFORE amended by BC Reg 194/2018, effective November 1, 2018.
(1) After receiving a report filed by a producer under section 9 (3) or (3.1) for a production month, the collector, on or about the 10th day of the third calendar month following the production month, is to deliver an invoice to the producer showing, for the production month, the amount of net profit royalty that is payable to the government by the producer in respect of the oil or marketable gas and natural gas by-products to which the report applies.
(1.1) After a producer files an amended report under section 9 (5) to amend a report filed under section 9 (3) or (3.1), the collector, on or about the 10th day of the second calendar month following the calendar month in which the amended report was filed, is to deliver an amended invoice to the producer showing, for the production month, the amount of net profit royalty that is payable to the government by the producer in respect of the oil or marketable gas and natural gas by-products to which the amended report applies.
(2) If the collector, on examining a report filed under section 9, disagrees with the information or calculations in it, the collector may do either or both of the following:
(a) request the person who filed the report or amended report to submit, within 60 days after the date of the request, a report based on the information the collector believes is correct;
(b) assess or reassess the producer for net profit royalty payable to the government based on the information the collector believes is correct.
Section 16 (3) (b) BEFORE amended by BC Reg 194/2018, effective November 1, 2018.
(b) in any other case, not more than 72 months after the last day of the production month to which the assessment or reassessment relates.
Section 16 (4), (5) and (6) BEFORE amended by BC Reg 194/2018, effective November 1, 2018.
(4) The notice of assessment must contain the determination made by the collector of the amount of net profit royalty and interest payable and the due date for payment of that amount.
(5) On assessing or reassessing the net profit royalty payable by a producer who has not filed a report or has filed a report containing information with which the collector disagrees, the collector must mail a notice of assessment to the producer.
(6) The producer assessed must pay to the collector the amount of net profit royalty owing as set out in the notice of assessment within 60 days after the date shown on the notice of assessment.
Section 18 (1) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(1) The collector may reconsider or vary an invoice or assessment of a net profit royalty, interest or penalty made under section 16 on the request of a producer who objects in writing to the amount assessed.
Section 18 (1) BEFORE amended by BC Reg 194/2018, effective November 1, 2018.
(1) The collector may reconsider or vary an invoice or assessment of a net profit royalty, interest or penalty made under section 3 (f) or 16 on the request of a producer who objects in writing to the amount assessed.
Section 19 (1), (3) and (4) BEFORE amended by BC Reg 4/2010, effective January 14, 2010.
(1) A producer may appeal a decision of the collector under 18 (1) or a decision of the administrator under section 18 (2) to the Minister of Small Business and Revenue by mailing by registered mail, within 60 days after the decision of the collector or administrator, a notice of appeal addressed to the Minister of Small Business and Revenue.
(3) On receipt of the notice of appeal and all relevant information from the office of the collector or administrator, the Minister of Small Business and Revenue, with or without a hearing, must confirm, vary or reverse the decision of the collector or administrator.
(4) The Minister of Small Business and Revenue must convey the decision to the collector who must mail to the person who made the appeal notification of that minister's decision and must include, if applicable, a notice of assessment reflecting that minister's decision.
Section 19 (2) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(2) The notice must state the name and address of the producer, the date of the collector's or administrator's decision and the amount of net profit royalty, interest or penalty assessed under section 16, if any, and must set out the reasons for the appeal and the facts on which it is based.
Section 19 BEFORE re-enacted by BC Reg 194/2018, effective November 1, 2018.
Appeals
19 (1) A producer may appeal a decision of the collector under 18 (1) or a decision of the administrator under section 18 (2) to the Minister of Finance by mailing by registered mail, within 60 days after the decision of the collector or administrator, a notice of appeal addressed to the Minister of Finance.
(2) The notice must state the name and address of the producer, the date of the collector's or administrator's decision and the amount of net profit royalty, interest or penalty assessed under section 3 (f) or 16, if any, and must set out the reasons for the appeal and the facts on which it is based.
(3) On receipt of the notice of appeal and all relevant information from the office of the collector or administrator, the Minister of Finance, with or without a hearing, must confirm, vary or reverse the decision of the collector or administrator.
(4) The Minister of Finance must convey the decision to the collector who must mail to the person who made the appeal notification of that minister's decision and must include, if applicable, a notice of assessment reflecting that minister's decision.
[am. B.C. Regs. 4/2010, s. 2; 327/2010, s. 10.]
Section 19 (2) BEFORE amended by BC Reg 211/2022, effective November 1, 2022.
(2) Written notice of the appeal must be served on the Minister of Finance within 90 days after the date of the decision.
Section 20 (3) BEFORE amended by BC Reg 327/2010, effective November 19, 2010.
(3) The transferor and transferee of an interest in a project are jointly and severally liable for net profit royalty payable under section 6 (2) as of the effective date of the transfer of an interest in a project and until that net profit royalty is paid.