State coal leases shall be issued for the following terms:

1. A. A primary of five (5) years;
2. B. If, at the end of the primary term, the lessee has submitted a mine plan, which is not subsequently disapproved by the commissioner within three (3) months after submission, and the lessee has either incorporated the leased land with adjacent land (if necessary) into a logical mining unit or has shown to the satisfaction of the commissioner that adjacent land, needed to form the logical mining unit, is federal land which has not been available for coal leasing but that the lessee has incurred substantial costs in developing the leased land, then the coal lease shall not expire at the end of the primary term but shall continue for a secondary term of an additional five (5) years; and

3. C. If, at the end of the secondary term, the lessee is producing coal at an average annual rate of either one percent (1%) of the estimated recoverable reserves from the leased lands or one percent (1%) of the estimated recoverable reserves from the logical mining unit, then the lease shall not expire but shall continue as long as the one percent (1%) production is maintained. Provided, that, for purposes of determining if the one percent (1%) annual production has been maintained during any year after the end of the second (2nd) year following the beginning of production, the annual production, averaged over the previous three (3) years, shall be used. For purposes of this provision, annual rates of production shall be measured from lease anniversary date to lease anniversary date.

   [12/31/1999; 19.2.6.14 NMAC - Rn, 19 NMAC 3. SLO 6.14, 9/30/2002]