NATURAL RESOURCES CODE
CHAPTER 32. SCHOOL LAND BOARD
SUBCHAPTER A. GENERAL PROVISIONS
§ 32.001. DEFINITIONS. In this chapter:
(1) "Board" means the School Land Board.
(2) "Commissioner" means the Commissioner of the
General Land Office.
(3) "Land office" means the General Land Office.
(4) "Land" means:
(A) land dedicated to the permanent school fund
and the asylum funds by the constitution and laws of this state;
(B) the mineral estate in areas within tidewater
limits, including islands, lakes, bays, and the bed of the sea which
belong to the state;
(C) the mineral estate in river beds and
channels; and
(D) land owned by the state or held in trust for
the use and benefit of the state or of a department, board, or
agency of the state.
Acts 1977, 65th Leg., p. 2377, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1985, 69th Leg., ch. 624, § 4, eff. Sept.
1, 1985; Acts 1991, 72nd Leg., ch. 642, § 1, eff. Aug. 26, 1991.
§ 32.002. APPLICATION OF CHAPTER. (a) This chapter
does not apply to:
(1) land dedicated by the constitution or a law of this
state to The University of Texas System, land donated by a will or
instrument in writing or otherwise to The University of Texas
System, as trustee, for a scientific, educational, or other
charitable or public purpose, or any other land under the control of
the Board of Regents of The University of Texas System;
(2) land whose title is vested in the state for the use
and benefit of any part of The Texas A&M University System or land
under the control of the Board of Regents of The Texas A&M
University System;
(3) minerals subject to lease under Subchapter F,
Chapter 52, of this code, commonly known as the Relinquishment Act,
and Subchapters B and C, Chapter 53, of this code;
(4) oil and gas underlying land owned by the state that
was acquired to construct or maintain a highway, road, street, or
alley, which is located in a producing area, unless the oil or gas
is leased for the specific purpose of drilling a horizontal well;
(5) oil and gas underlying land owned by the state that
was acquired to construct or maintain a highway, road, street, or
alley if the Texas Transportation Commission has determined that
such right-of-way is no longer needed for use by citizens as a road
pursuant to Section 202.021, Transportation Code;
(6) land owned by the Texas Parks and Wildlife
Department; or
(7) land owned by the Texas Board of Criminal Justice.
(b) For purposes of Subsection (a)(4) of this section, land
is located in a producing area if the closest boundary line of the
surface of such land is within 2,500 feet of a well capable of
producing oil or gas in paying quantities as of January 1, 1985.
(c) Oil and gas underlying land not located within a
producing area or that is leased for the specific purpose of
drilling a horizontal well may be leased under the provisions of
Section 32.201 of this code.
(d) If title to land subject to Subchapter F, Chapter 52 of
this code, commonly known as the Relinquishment Act, is acquired by
a department, board, or agency of the state, the land shall be
leased as provided by Chapter 52 of this code for the leasing of
unsold public school land.
(e) If title to land subject to Subchapter C, Chapter 53, of
this code is acquired by a department, board, or agency of the
state, the land shall be leased as provided by Chapter 53 of this
code for the leasing of unsold surveyed public school lands.
Added by Acts 1985, 69th Leg., ch. 624, § 5, eff. Sept. 1, 1985.
Amended by Acts 1987, 70th Leg., ch. 167, § 6.05(e), eff. Sept.
1, 1987; Acts 1991, 72nd Leg., ch. 642, § 2, eff. Aug. 26, 1991;
Acts 1993, 73rd Leg., ch. 897, § 1, eff. Sept. 1, 1993; Acts
1995, 74th Leg., ch. 165, § 22(50), eff. Sept. 1, 1995.
SUBCHAPTER B. ADMINISTRATIVE PROVISIONS
§ 32.011. CREATION OF BOARD. There is created a board
to be known as the School Land Board.
Acts 1977, 65th Leg., p. 2377, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.012. MEMBERS OF THE BOARD. (a) The board is
composed of:
(1) the commissioner;
(2) a citizen of the state appointed by the governor
with the advice and consent of the senate; and
(3) a citizen of the state appointed by the attorney
general with the advice and consent of the senate.
(b) The authority of the attorney general to appoint one of
the members of the board, including the authority to make
appointments during the recess of the senate, is the same as the
authority of the governor to fill vacancies in state offices under
the Texas Constitution.
(c) Each appointment made by the governor and the attorney
general shall be made in accordance with and subject to the
provisions of the Texas Constitution authorizing the filling of
vacancies in state offices by appointment of the governor.
Acts 1977, 65th Leg., p. 2377, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.0121. APPOINTMENTS WITHOUT
DISCRIMINATION. Appointments to the board shall be made without
regard to the race, color, handicap, sex, religion, age, or
national origin of the appointees.
Added by Acts 1985, 69th Leg., ch. 624, § 7, eff. Sept. 1, 1985.
§ 32.0122. DISQUALIFICATION OF LOBBYISTS. A person who
is required to register as a lobbyist under Chapter 305 of the
Government Code, by virtue of his activities for compensation in or
on behalf of a profession related to the operation of the board, may
not serve as a member of the board or act as the general counsel to
the board.
Added by Acts 1985, 69th Leg., ch. 624, § 8, eff. Sept. 1, 1985.
Amended by Acts 1987, 70th Leg., ch. 167, § 2.19(20), eff. Sept.
1, 1987.
§ 32.0123. CONFLICTS OF INTEREST PROHIBITED. An
officer, employee, or paid consultant of a statewide or national
trade association in the oil and gas or mining industry may not be a
member or employee of the board, nor may a person who cohabits with
or is the spouse of an officer, managerial employee, or paid
consultant of a statewide or national trade association in the oil
and gas or mining industry be a member of the board or an employee of
the board grade 17 and over, including exempt employees, according
to the position classification schedule under the General
Appropriations Act.
Added by Acts 1985, 69th Leg., ch. 624, § 9, eff. Sept. 1, 1985.
§ 32.013. TERMS OF APPOINTED MEMBERS. The members
appointed to the board by the governor and the attorney general
serve for terms of two years.
Acts 1977, 65th Leg., p. 2377, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.014. CHAIRMAN OF THE BOARD. The commissioner
serves as chairman of the board.
Acts 1977, 65th Leg., p. 2377, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.015. PER DIEM AND REIMBURSEMENT. Each citizen
member of the board is entitled to receive a per diem allowance for
each day spent in performing his duties and as reimbursement for
actual and necessary travel expenses incurred in performing his
duties the amount provided in the General Appropriations Act.
Acts 1977, 65th Leg., p. 2377, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.016. BOARD MEETINGS. (a) When necessary, the
board shall meet on the first and third Tuesdays of each month in
the land office.
(b) Subject to recesses at the discretion of the board,
meetings of the board shall continue until the board has completed
its docket.
(c) The chairman of the board may call special meetings of
the board at any time the chairman thinks necessary by giving the
other members notice.
Acts 1977, 65th Leg., p. 2378, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1999, 76th Leg., ch. 139, § 1, eff. Sept.
1, 1999.
§ 32.017. SECRETARY OF THE BOARD. (a) The board shall
select a secretary from persons nominated by the commissioner.
(b) The person selected as secretary shall be approved by a
majority of the board.
Acts 1977, 65th Leg., p. 2378, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.0171. REMOVAL OF BOARD MEMBER. (a) It is a ground
for removal from the board if a member:
(1) does not have at the time of appointment the
qualifications required by Subsection (a) of Section 32.012 of this
code for appointment to the board;
(2) does not maintain during the service on the board
the qualifications required by Subsection (a) of Section 32.012 of
this code for appointment to the board;
(3) violates a prohibition established by Section
32.0122 or 32.0123 of this code;
(4) is unable to discharge his duties for a
substantial portion of the term for which he was appointed because
of illness or disability; or
(5) is absent from more than one-half of the regularly
scheduled board meetings which the member is eligible to attend
during each calendar year, except when the absence is excused by
majority vote of the board.
(b) The validity of an action of the board is not affected by
the fact that it was taken when a ground for removal of a member of
the board existed.
(c) If the commissioner has knowledge that a potential
ground for removal exists, he shall notify the governor that a
potential ground for removal exists.
Added by Acts 1985, 69th Leg., ch. 624, § 10, eff. Sept. 1, 1985.
§ 32.018. EMPLOYMENT OF GEOLOGIST AND
MINERALOGIST. The commissioner may employ a geologist and a
mineralogist who shall be informed about minerals on land under the
board's jurisdiction and activities under pending applications and
previous leases and sales. The geologist and mineralogist shall
report to the board any information relating to these subjects.
Acts 1977, 65th Leg., p. 2378, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1985, 69th Leg., ch. 624, § 11, eff. Sept.
1, 1985.
§ 32.019. BOARD EMPLOYEES. (a) The commissioner may
employ additional employees necessary for the discharge of the
duties of the board.
(b) Employees of the board shall be considered employees of
the land office, and civil and criminal laws regulating the conduct
and relations of employees of the land office apply to employees of
the board.
Acts 1977, 65th Leg., p. 2378, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.020. MINUTES OF BOARD. The board shall keep
minutes which shall include a record of its proceedings and a docket
on which the secretary shall enter matters to be considered by the
board.
Acts 1977, 65th Leg., p. 2378, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.021. RECORDS AND PROCEEDINGS AS ARCHIVES. The
records and proceedings of the board shall be records and archives
of the land office.
Acts 1977, 65th Leg., p. 2378, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.022. INSPECTION OF MINUTES AND DOCKET. (a) On
payment of the fees prescribed by law for examination of other land
office records, the minutes and docket shall be subject to
inspection by any citizen of the state who desires to make the
examination.
(b) An examination made under this section shall be made in
the presence of the secretary of the board or a clerk designated by
law.
Acts 1977, 65th Leg., p. 2378, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.024. FINANCIAL REPORT REQUIRED. The board shall
prepare annually a complete and detailed written report accounting
for all funds received and disbursed by the board during the
preceding year. The commissioner shall include the report as part
of the report required by Section 31.060 of this code.
Added by Acts 1985, 69th Leg., ch. 624, § 12, eff. Sept. 1, 1985.
§ 32.025. AUDIT. The financial transactions of the
board are subject to audit by the state auditor in accordance with
Chapter 321, Government Code.
Added by Acts 1985, 69th Leg., ch. 624, § 13, eff. Sept. 1, 1985.
Amended by Acts 1989, 71st Leg., ch. 584, § 6, eff. Sept. 1,
1989.
§ 32.026. POLICIES ON PUBLIC HEARINGS. The board shall
develop and implement policies that will provide the public with a
reasonable opportunity to appear before the board and to speak on
any issue under the jurisdiction of the board.
Added by Acts 1985, 69th Leg., ch. 624, § 14, eff. Sept. 1, 1985.
SUBCHAPTER C. POWERS AND DUTIES
§ 32.061. BOARD'S GENERAL DUTIES. Except as provided by
Subchapter G, Chapter 51, of this code, the board shall:
(1) set the dates to open received bids for the sale of
surveyed land dedicated to the permanent school fund, for the lease
of land for prospecting or exploring for, mining, producing,
storing, caring for, transporting, preserving, selling, or
disposing of oil, gas, or other minerals leased under this chapter,
and for the commitment of land to a contract for development;
(2) determine the prices and set the terms of the
contract for which land shall be sold, leased, or committed to a
contract for development;
(3) consult with the president, chairman, or other
head of the department, board, or agency, as applicable, or with the
representative of the head, on each matter before the board that
affects land owned or held in trust for the use and benefit of a
department, board, or agency of the state; and
(4) perform any other duties which may be required by
law.
Acts 1977, 65th Leg., p. 2378, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended Acts 1985, 69th Leg., ch. 624, § 15, eff. Sept. 1,
1985; Acts 1993, 73rd Leg., ch. 897, § 2, eff. Sept. 1, 1993.
§ 32.062. ADOPTION OF RULES AND COLLECTION OF
FEES. (a) The board shall adopt rules of procedure and rules for
the sale, lease, and commitment to a contract for development of
land as provided by this chapter.
(b) The board by rule shall adopt and shall collect
reasonable fees necessary to carry out this chapter.
Acts 1977, 65th Leg., p. 2379, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1985, 69th Leg., ch. 624, § 16, eff. Sept.
1, 1985; Acts 1993, 73rd Leg., ch. 897, § 3, eff. Sept. 1, 1993.
§ 32.063. DUTY TO ADVISE COMMISSIONER. The board shall
advise the commissioner regarding any matters submitted to it for
that purpose.
Acts 1977, 65th Leg., p. 2379, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.064. SURVEY OR SUBDIVISION OF LAND. The board may
have land surveyed or subdivided into tracts, lots, or blocks based
on its determination of which method will be most conducive and
convenient to facilitate the advantageous sale of land, the lease
of land for oil, gas, or other minerals, or the commitment of land
to a contract for development.
Added by Acts 1985, 69th Leg., ch. 624, § 17, eff. Sept. 1, 1985.
Amended by Acts 1993, 73rd Leg., ch. 897, § 4, eff. Sept. 1,
1993.
§ 32.065. PERMITS FOR SURVEYS OR INVESTIGATIONS. If
land other than public school land is not under a valid lease or
committed to a contract for development, the board may issue a
permit for a geological, geophysical, or other survey or
investigation of that land that will encourage the development of
the land for oil, gas, or other minerals. The permit may be issued
for the consideration and under the terms and conditions the board
considers to be in the best interest of the state.
Added by Acts 1985, 69th Leg., ch. 624, § 18, eff. Sept. 1, 1985.
Amended by Acts 1993, 73rd Leg., ch. 897, § 5, eff. Sept. 1,
1993.
§ 32.066. EASEMENTS. (a) The board may grant
easements of right-of-way on any land except:
(1) unsold public school land;
(2) the portion of the Gulf of Mexico within the
jurisdiction of the state; and
(3) islands, saltwater lakes, bays, inlets, marshes,
and reefs owned by the state within tidewater limits.
(b) The easements may be granted on terms and conditions the
board considers to be in the best interest of the state.
(c) This section shall not apply to land owned by the Texas
Department of Transportation.
Added by Acts 1985, 69th Leg., ch. 624, § 19, eff. Sept. 1, 1985.
Amended by Acts 1995, 74th Leg., ch. 165, § 22(51), eff. Sept. 1,
1995.
§ 32.067. MARGINAL PROPERTY ROYALTY RATES. (a) In
this section:
(1) "Barrel of oil equivalent" means 6,000 cubic feet
of natural gas for each 42-gallon barrel of crude oil or a volume of
gas with a minimum heating value of 6,000,000 British thermal units
(6,000 Mbtu), whichever is greater.
(2) "Qualifying Gulf of Mexico property" means land
described in Section 52.011(2) that is subject to a lease issued
under Subchapter B, Chapter 52.
(3) "Qualifying Gulf of Mexico reservoir" means a
reservoir that:
(A) during a period established by board rule has
an average daily per well production equal to or less than 50
barrels of oil or barrels of oil equivalent; and
(B) underlies:
(i) a qualifying Gulf of Mexico property;
or
(ii) a pooled unit that includes a
qualifying Gulf of Mexico property.
(4) "Qualifying property" means land subject to a
lease issued under this chapter, under Subchapter E, Chapter 51, or
under Chapter 52.
(5) "Qualifying reservoir" means a reservoir that:
(A) during a period established by board rule has
an average daily per well production equal to or less than 15
barrels of oil or barrels of oil equivalent; and
(B) underlies:
(i) a qualifying property; or
(ii) a pooled unit that includes a
qualifying property.
(6) "Reservoir" has the same meaning as "common
reservoir" as that term is defined in Section 86.002.
(b) The board by rule may provide for the reduction of
royalty rates as provided by this section.
(c) The royalty rate for oil and gas produced from a
qualifying reservoir may be reduced to not less than one-sixteenth
(6.25 percent) for a term prescribed by the board. In determining
whether to grant a reduction in the royalty rate, the board may
consider whether the qualifying property is being operated
efficiently, including whether the property is pooled or has
reasonable potential for the application of secondary or tertiary
recovery techniques.
(d) The royalty rate for the state's share under a lease
issued under Subchapter F, Chapter 52, or Sections 51.195(c)(2) and
(d) may be reduced under this section to not less than
one-thirty-second (3.125 percent) for a term prescribed by the
board. The state's royalty rate may be reduced under this
subsection only if the royalty rate for the owner of the soil is
reduced in the same proportion.
(e) The royalty rate under a lease issued under Subchapter
C, Chapter 52, may not be reduced to a rate that is lower than the
rate under lease of land that:
(1) adjoins the land leased under Subchapter C; and
(2) is held or operated by, or under the significant
control of, the state's lessee.
(f) The royalty rate under a lease issued under Subchapter F
of this chapter may not be reduced to a rate that is lower than the
rate under a lease of land that adjoins the land leased under
Subchapter F.
(g) If a qualifying reservoir for which a royalty rate
reduction is sought under this section is included in a unit subject
to the board's authority, the board may modify the terms and
conditions for the unit as a condition of approving the requested
reduction in the royalty rate.
(h) This section does not apply to the free royalty reserved
by the state under Section 51.054.
Added by Acts 1995, 74th Leg., ch. 1007, § 1, eff. June 17, 1995.
Amended by Acts 1999, 76th Leg., ch. 1300, § 1, eff. Sept. 1,
1999.
SUBCHAPTER D. SALE AND LEASE OF LAND
§ 32.101. APPLICABLE LAW. Land shall be offered for
sale, lease, or commitment to a contract for development subject to
the terms and conditions provided by law. Sales and leases of
upland within 2,500 feet of a military base may not be made unless
the commissioner or the commissioner's designee, after
consultation with appropriate military authorities, determines
that the sale or lease will not adversely affect the mission of the
military base.
Acts 1977, 65th Leg., p. 2379, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 6, eff. Sept.
1, 1993; Acts 2003, 78th Leg., ch. 149, § 11, eff. May 27, 2003.
§ 32.102. LIST OF LAND. From time to time the
commissioner shall furnish the board a list of land areas subject to
the provisions of this chapter.
Acts 1977, 65th Leg., p. 2379, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.103. APPRAISED VALUE OF LAND. (a) Except as
provided in Subsection (b) of this section, no land may be appraised
at less than $2 an acre.
(b) Land located west of the Pecos River may be appraised at
not less than $1 an acre.
Acts 1977, 65th Leg., p. 2379, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.104. APPRAISAL FEE. (a) The board shall charge
applicants for the purchase of excess acreage and unsurveyed public
school land an appraisal fee for appraising the acreage and land to
determine the price at which it is to be sold by the state.
(b) The appraisal fee shall be in an amount set by the board,
and any part of the fee which in the opinion of the board is unused
shall be refunded to the applicant.
(c) The appraisal fee shall be paid to the commissioner who
shall deposit all fees that are not refunded in the State Treasury
in the fund provided under Section 32.110 of this code.
(d) The money deposited in the fund to the extent necessary
is appropriated to the land office to pay salaries, travel
expenses, and other expenses of personnel necessary to accomplish
the appraisals or other work of the board.
(e) The provisions of this section are cumulative of other
laws which are not in conflict, but if a conflict exists, this
section is controlling.
Acts 1977, 65th Leg., p. 2379, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.105. DATE FOR OPENING BIDS. The date for opening
bids for the sale, lease, or commitment to a contract for
development of land shall be the first or third Tuesday of the
month.
Acts 1977, 65th Leg., p. 2379, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 7, eff. Sept.
1, 1993.
§ 32.106. DESCRIPTION OF LAND. The description of
public school land offered for sale, lease, or commitment to a
contract for development shall be in accord with the description
which may be found in the School Land Registry in the land office.
Acts 1977, 65th Leg., p. 2379, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 8, eff. Sept.
1, 1993.
§ 32.107. NOTICE OF SALE, LEASE, AND CONTRACT FOR
DEVELOPMENT. (a) The board shall publish notice that the board
will receive bids for the sale, lease, or commitment to a contract
for development of land in at least three issues of at least four
daily newspapers.
(b) The notice shall be published at least 30 days before
the date the bids are advertised to be opened.
(c) The notice shall state that land is to be offered for
sale, lease, or commitment to a contract for development on a
certain date and at a certain time and the method of the sale,
lease, or commitment to a contract for development and shall give
notice that a person may obtain publications from the land office
that describe the land offered for sale, lease, or commitment to a
contract for development.
(d) The land office may solicit and include advertising in
its publications. The commissioner shall deposit fees paid for
advertising in land office publications in a separate account in
the state treasury.
Acts 1977, 65th Leg., p. 2380, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1985, 69th Leg., ch. 624, § 20, eff. Sept.
1, 1985; Acts 1993, 73rd Leg., ch. 897, § 9, eff. Sept. 1, 1993.
§ 32.1071. LEASE SALES. (a) The sale of oil, gas, or
other mineral leases shall be by sealed bid or at public auction or
through a combination of public auction and sealed bid, as the board
elects.
(b) Sections 52.015 through 52.020 of this code apply to the
sale of leases by sealed bid.
(c) The leases shall be made on terms and conditions that
may be prescribed by the board.
Added by Acts 1985, 69th Leg., ch. 624, § 21, eff. Sept. 1, 1985.
Amended by Acts 1993, 73rd Leg., ch. 897, § 10, eff. Sept. 1,
1993.
§ 32.1072. MINIMUM ROYALTY, BONUS, AND RENTAL. The
board may not accept a bid on an oil and gas lease that offers:
(1) a royalty of less than one-eighth of the gross
production of oil and gas; or
(2) a cash bonus of less than $10 an acre.
Added by Acts 1985, 69th Leg., ch. 624, § 22, eff. Sept. 1, 1985.
Amended by Acts 1993, 73rd Leg., ch. 897, § 11, eff. Sept. 1,
1993.
§ 32.1073. FIXING ROYALTY, BONUS, AND RENTAL. In
offering land for lease under this subchapter, the board may:
(1) set the royalty and rental and provide for bidding
on a basis of the highest cash bonus offered; or
(2) set the cash bonus and rental and provide for
bidding on the basis of the highest royalty offered.
Added by Acts 1985, 69th Leg., ch. 624, § 23, eff. Sept. 1, 1985.
§ 32.109. ACCEPTANCE AND REJECTION OF BIDS. (a) For
each tract offered for sale, lease, or commitment to a contract for
development, the board must accept the best bid submitted that
meets the minimum requirements set by the board or by law or reject
all bids.
(b) The minutes of the board shall reflect the acceptance or
rejection of a bid.
Acts 1977, 65th Leg., p. 2380, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 12, eff. Sept.
1, 1993.
§ 32.110. SPECIAL SALE FEE. (a) On land sales and
mineral leases made by the board, the purchaser or bidder is
required to pay by separate check an amount equal to one and
one-half percent of the bid payable to the commissioner as a special
fee.
(b) If the sale is by bid, only the special fees paid on the
bids accepted by the board shall be deposited by the commissioner in
the State Treasury as a special fund.
(c) Failure to pay the special fee shall not void a bid, but
the commissioner shall demand payment of the fee before a lease is
issued to the best bidder. If the best bidder fails or refuses to
make the payment within 30 days after demand by the commissioner,
the bidder is not entitled to a sale of or a lease on the tract
covered by that bid and the cash bonus shall be automatically
forfeited to be deposited by the commissioner in the State Treasury
to the credit of the permanent school fund or the appropriate
special mineral fund. The board, at its option, may offer the tract
for sale or lease to the next best bidder under the same terms as
submitted by and as would have been granted to the best bidder.
(d) Checks submitted by unsuccessful bidders shall be
returned to the bidders.
Acts 1977, 65th Leg., p. 2380, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1983, 68th Leg., p. 405, ch. 81, § 21(n),
eff. Sept. 1, 1983; Acts 1993, 73rd Leg., ch. 897, § 13, eff.
Sept. 1, 1993.
§ 32.111. ISSUANCE OF AWARD OR LEASE. Each award or
lease shall be issued by the commissioner according to the minutes
approved by the board.
Acts 1977, 65th Leg., p. 2380, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 32.112. SALE OF TAX FORECLOSURE PROPERTY. (a) All
real property or any interest in real property placed in the name of
the state as a result of foreclosure of a tax lien, whether the
property was sold, bid off, or otherwise transferred to the state,
may be sold or leased by the board in the same manner as provided for
the sale or lease of land under Chapter 51, free of any lien of a
taxing unit that was a party to the judgment in the delinquent tax
suit involving the property for taxes imposed on the property,
penalties, or interest that are due the taxing unit.
(b) A sale of property by the board under this section vests
in the purchaser of the property good and perfect title to the
interest in the property owned by the person liable for the
delinquent taxes. The purchaser has the right to the use and
possession of the property, subject only to the person's right of
redemption, a recorded restrictive covenant running with the land,
and a valid easement of record as of the date the property was
placed in the name of the state, if the covenant or easement was
recorded before January 1 of the year in which the tax lien attached
to the property.
(c) The board may retain from the proceeds of a sale or lease
conducted under this section the cost of conducting the
transaction, including advertising, appraisal, and administrative
costs. The balance of the proceeds shall be deposited in the State
Treasury to the credit of the Texas capital trust fund. The board
is not required to pay any portion of the proceeds to a taxing unit
that was a party to the judgment in the delinquent tax suit
involving the property in satisfaction of any taxes imposed on the
property, penalties, or interest that are due the taxing unit.
Added by Acts 1987, 70th Leg., ch. 208, § 10, eff. Aug. 31, 1987.
Amended by Acts 1993, 73rd Leg., ch. 991, § 8, eff. Sept. 1,
1993; Acts 1997, 75th Leg., ch. 861, § 1, eff. June 18, 1997.
SUBCHAPTER E. CONDITIONS OF LEASES
§ 32.151. TERM OF LEASE. Each oil and gas lease shall be
for a primary term not to exceed 10 years and for as long thereafter
as oil or gas is produced in paying quantities.
Added by Acts 1985, 69th Leg., ch. 624, § 24, eff. Sept. 1, 1985.
Amended by Acts 1993, 73rd Leg., ch. 897, § 14, eff. Sept. 1,
1993.
§ 32.152. ASSIGNMENT AND TRANSFER. A lessee may
transfer or assign his lease at any time in the manner provided by
Section 52.026 of this code.
Added by Acts 1985, 69th Leg., ch. 624, § 24, eff. Sept. 1, 1985.
§ 32.153. LEASE RELINQUISHMENT. A lessee may
relinquish his lease to the state at any time in the manner provided
by Section 52.027 of this code.
Added by Acts 1985, 69th Leg., ch. 624, § 24, eff. Sept. 1, 1985.
§ 32.154. LEASES SUBJECT TO LAWS, ORDERS, AND
RULES. Drilling or mining operations for oil, gas, or other
minerals and the production of oil, gas, or other minerals under a
lease issued under this chapter are subject to:
(1) the laws of this state;
(2) valid orders made by the Railroad Commission of
Texas or any other regulatory authority controlling the development
of leases for the production of oil, gas, or other minerals; and
(3) rules the board adopts.
Added by Acts 1985, 69th Leg., ch. 624, § 24, eff. Sept. 1, 1985.
§ 32.155. RENTAL AND ROYALTY PAYMENTS. (a) Each
lessee or his assigns shall pay annual rentals and royalties as
specified by the board.
(b) Subchapter D, Chapter 52 of this code applies to a lease
issued under this chapter.
Added by Acts 1985, 69th Leg., ch. 624, § 24, eff. Sept. 1, 1985.
§ 32.156. FORFEITURE. Each lease is subject to
forfeiture by the commissioner under the conditions and in the
manner provided by Section 52.176 of this code.
Added by Acts 1985, 69th Leg., ch. 624, § 24, eff. Sept. 1, 1985.
§ 32.157. SPECIAL ACCOUNTS. (a) Special funds are
created in the State Treasury to be known as the Parks and Wildlife
Department and the Texas Department of Corrections special mineral
funds.
(b) All money collected as bonus, royalty, rental, payments
for easements, and permit fees attributable to land covered by this
chapter, other than land dedicated to the permanent school fund,
shall be deposited in the special mineral fund of the department,
board, or agency owning the land.
(c) To offset the costs of leasing and administering mineral
leasing, all fees collected relating to leasing lands owned by
boards, departments, or agencies, including the sales fee and any
penalties collected shall be credited to the same fund account in
the treasury as those similar fees collected in the leasing of land
dedicated to the permanent school fund.
Added by Acts 1985, 69th Leg., ch. 624, § 50, eff. Sept. 1, 1985.
SUBCHAPTER F. LEASE OF HIGHWAY LANDS
§ 32.201. PREFERENTIAL RIGHT TO LEASE CERTAIN LAND BY
ADJOINING MINERAL OWNER. (a) In this section, "mineral owner"
means any person who owns the right to explore for, develop, and
produce oil and gas from a tract of land adjoining lands owned by
the state that were or may be acquired to construct or maintain a
highway, road, street, alley, or other right-of-way.
(b) Oil and gas under lands owned by the state that were or
may be acquired to construct or maintain a highway, road, street,
alley, or other right-of-way may be offered for lease under this
chapter only after the oil and gas are first offered for lease to
the mineral owner of the land adjoining the length of the land to be
leased. The board shall set the terms and conditions of the lease
as follows:
(1) In instances where the adjoining land is covered
by an existing oil and gas lease currently in effect, the royalty,
bonus, and rental shall be identical to those amounts contained in
the lease covering the adjoining land or, in the event there is more
than one lease covering adjoining land, shall be no less favorable
to the state than the most favorable of such leases.
(2) In instances where the adjoining land is not
covered by an existing oil and gas lease, the royalty, bonus, and
rental for the lease shall be as provided in Sections 32.1072 and
32.1073 of this code.
(c) The preferential right of the mineral owner created by
Subsection (b) of this section is subject to the following
limitations:
(1) the lease of the oil and gas extends only to the
center of the width of the particular highway, road, street, alley,
or other right-of-way adjacent to the property in which the lessee
is the mineral owner; and
(2) the preferential right to lease must be exercised
by the mineral owner within 120 days of actual notice of the
intention to lease as provided by Subsection (d) of this section.
(d) Actual notice, describing the land as required by
Section 32.204 of this code, has occurred upon mailing of the notice
of the intention to lease by registered mail to the last known
address of the affected mineral owner or owners, if more than one,
as determined from records of the county clerk for the county in
which the land to be leased is located. If the identity or address
of a mineral owner is not known, and cannot be located after a
diligent search of the records of the county clerk and tax
assessor-collector for the county in which the land is located, the
actual notice required by Subsection (c) of this section shall be
provided by publication. The notice shall be published in the
manner provided in the Texas Rules of Civil Procedure for citation
by publication in actions against unknown owners or claimants of
interest in the land. Actual notice has occurred on completion of
all procedures required by the Rules of Civil Procedure.
(e) To exercise the preferential right under this section,
the mineral owner must tender to the commissioner the bonus set by
the board, together with the appropriate statutory sales fee. The
tender to the commissioner must be made on or before the end of the
120-day period provided by Subsection (c)(2) of this section.
(f) At any time during the 120-day period a mineral owner
may waive his preferential right to lease by providing the General
Land Office with a written waiver. Failure by the mineral owner to
exercise his preferential right to lease the land within the
120-day period provided by Subsection (c)(2) of this section, or
the filing of a written waiver, results in forfeiture of the
preferential right to lease the land.
(g) If a mineral owner's preferential right is forfeited
under this section, the land may be offered for lease by the board
directly to an applicant or by sealed bid as provided by this
chapter. The board shall not offer nor accept a price or terms
which are less than that offered to the adjoining mineral owner
under this section. If not leased at a public offering within 18
months from the date the lease was offered to the adjoining mineral
owner, it shall be reoffered to the mineral owner prior to public
offering in accordance with the provisions of this section.
(h) An adjoining mineral owner shall have the right to seek
a judicial determination of the state's title to minerals beneath
the adjoining highway right-of-way, and legislative consent to sue
the state is hereby granted. Within 60 days of a final
nonappealable judgment finding the state did not have title, or
only had partial title, the state shall refund all or the
proportionate part of any bonus, rental, royalty, and other
consideration to the lessee. The state's lessee shall pay to the
lawful mineral owner the value of any oil and gas produced from or
allocated to the minerals upon which the state's title failed.
Added by Acts 1985, 69th Leg., ch. 327, § 2, eff. June 8, 1985.
Amended by Acts 1987, 70th Leg., ch. 948, § 16, eff. Sept. 1,
1987. Renumbered from § 34.0511 by Acts 1987, 70th Leg., ch.
167, § 6.05(a), eff. Sept. 1, 1987. Amended by Acts 1987, 70th
Leg., ch. 167, § 6.05(c), (f)(1), (2), (g), eff. Sept. 1, 1987.
§ 32.202. POOLING. Any oil and gas lease offered under
§ 32.201 of this code shall provide:
(1) authority for pooling all of the leased area into
units of no more than 160 acres for an oil well or 640 acres for a
gas well plus a 10 percent tolerance or of a unit size allowed under
or prescribed by rules of the Railroad Commission of Texas;
(2) that the production allocable to the state lease
shall be based upon the surface acreage of the state lease included
in the unit;
(3) that the unit operations, production from any
portion of the unit or payment of shut-in gas well royalty on a
lease or unit well shall be considered for all purposes to be the
conduct of operations and production on the state lease; and
(4) that neither unit production of oil or gas, nor
unit operations, nor payment of shut-in royalties from a unit gas
well, shall serve to hold the lease in force as to any area outside
the unit, regardless of whether the production, maintenance of a
shut-in gas well, or operations are actually located on the state
tract or not.
Added by Acts 1985, 69th Leg., ch. 327, § 3, eff. June 8, 1985.
Renumbered from § 34.0512 by Acts 1987, 70th Leg., ch. 167, §
6.05(a), eff. Sept. 1, 1987. Amended by Acts 1987, 70th Leg., ch.
167, § 6.05(b), eff. Sept. 1, 1987; Acts 1991, 72nd Leg., ch.
642, § 3, eff. Aug. 26, 1991.
§ 32.203. COMPENSATORY ROYALTY. Compensatory royalty
shall be paid to the state on any lease offered and granted under
Section 32.201 of this code if the lease is not being held by
production on the tract, by production from a pooled unit, or by
payment of shut-in royalties in accordance with the terms of the
lease, and if oil or gas is sold and delivered in paying quantities
from a well located within 2,500 feet of the leased premises and
completed in a producible reservoir underlying the state lease or
in any case in which drainage is occurring. Such compensatory
royalty shall be paid at the royalty rate provided in the state
lease based on the value of production from the well as provided in
the lease on which such well is located. The compensatory royalty
shall be paid in the same proportion that the acreage of the state
lease has to the acreage of the state lease plus the acreage of the
proration unit surrounding the draining well. The compensatory
royalty is to be paid monthly to the commissioner on or before the
last day of the month next succeeding the month in which the oil or
gas is sold and delivered from the well causing the drainage or from
the well located within 2,500 feet of the leased premises and
completed in a producible reservoir under the state lease.
Notwithstanding anything herein to the contrary, compensatory
royalty payable under this section shall be no less than an amount
equal to double the annual rental payable under the state lease.
Payment of compensatory royalty shall maintain the state lease in
force and effect for so long as such payments are made as provided
in this section.
Added by Acts 1985, 69th Leg., ch. 327, § 3, eff. June 8, 1985.
Renumbered from § 34.0513 by Acts 1987, 70th Leg., ch. 167, §
6.05(a), eff. Sept. 1, 1987. Amended by Acts 1987, 70th Leg., ch.
167, § 6.05(b), eff. Sept. 1, 1987.
§ 32.204. LEASE PROVISIONS. Any lease offered under
Section 32.201 of this code shall contain a sufficient description
of the land to be leased to enable the tract to be located on the
ground. All other terms and conditions of the lease shall be
identical to those contained in the lease covering such adjacent
land, provided the terms and conditions are not inconsistent with
any laws of this state. In the event there is more than one lease
covering such land, the terms and conditions of the lease shall be
no less favorable to the state than the most favorable of such
leases. In those instances where the adjoining land is not covered
by an existing oil and gas lease, all other terms and conditions of
the lease shall be set by the board.
Added by Acts 1985, 69th Leg., ch. 327, § 3, eff. June 8, 1985.
Renumbered from § 34.0514 by Acts 1987, 70th Leg., ch. 167, §
6.05(a), eff. Sept. 1, 1987. Amended by Acts 1987, 70th Leg., ch.
167, § 6.05(b), (f)(3), eff. Sept. 1, 1987.
§ 32.205. RULES. The board may adopt rules to carry out
the provisions of this chapter.
Added by Acts 1985, 69th Leg., ch. 327, § 3, eff. June 8, 1985.
Renumbered from § 34.0515 by Acts 1987, 70th Leg., ch. 167, §
6.05(a), eff. Sept. 1, 1987. Amended by Acts 1987, 70th Leg., ch.
167, § 6.05(f)(4), eff. Sept. 1, 1987.
§ 32.206. RATIFICATIONS AND OTHER AGREEMENTS. (a) The
board may approve by rule or order a ratification or other agreement
that includes in the benefits of production a mineral or royalty
interest in land owned by the state that was acquired to construct
or maintain a highway, road, street, or alley.
(b) An agreement approved by the board under this section
must be executed by the commissioner to be effective.
(c) This section does not apply to an interest subject to
pooling or unitization by a lessee under a lease issued under this
subchapter.
Added by Acts 1993, 73rd Leg., ch. 897, § 15, eff. Sept. 1, 1993.
SUBCHAPTER G. TRADE OF LAND
§ 32.251. AUTHORITY OF BOARD, IN CONJUNCTION WITH LAND
OFFICE, TO TRADE LAND. The Board, in conjunction with the land
office, may trade fee and lesser interests in land dedicated to the
permanent school fund for fee and lesser interests in land not
dedicated to that fund if the board and the commissioner determine
that the trade is in the best public interest of the people of this
state.
Added by Acts 2003, 78th Leg., ch. 1276, § 13.001(a), eff. Sept.
1, 2003.
§ 32.252. AUTHORITY OF STATE AGENCY OR POLITICAL
SUBDIVISION TO SELL OR EXCHANGE REAL PROPERTY. (a) A State Agency
Or Political subdivision may directly sell or exchange real
property belonging to the state agency or political subdivision
with the board for land dedicated to the permanent school fund if
the exchange is for fair market value.
(b) Section 272.001, Local Government Code, does not apply
to an exchange under this section.
Added by Acts 2003, 78th Leg., ch. 1276, § 13.001(a), eff. Sept.
1, 2003.
§ 32.253. PURPOSE OF TRADE. Land dedicated to the
permanent school fund may be traded to:
(1) aggregate sufficient acreage of contiguous land to
create a manageable unit;
(2) acquire land having unique biological,
geological, cultural, or recreational value; or
(3) create a buffer zone for the enhancement of
already existing public land, facilities, or amenities.
Added by Acts 2003, 78th Leg., ch. 1276, § 13.001(a), eff. Sept.
1, 2003.
§ 32.254. LAND TO BE TRADED FOR LAND OF AT LEAST EQUAL
VALUE. (a) A trade of land dedicated to the permanent school fund
may be made only on an appraised value basis. The appraisal must be
made by appraisers of the land office, and the board must concur in
the appraisal. The appraisal is conclusive proof of the value of
the land.
(b) A trade of land dedicated to the permanent school fund
may be made only for land of at least equal value.
Added by Acts 2003, 78th Leg., ch. 1276, § 13.001(a), eff. Sept.
1, 2003.
§ 32.255. DEED REQUIRED. (a) A trade of land dedicated
to the permanent school fund may be made only by a deed signed
jointly by the commissioner and the governor.
(b) The governor's failure to sign the deed is a veto of the
proposed trade.
Added by Acts 2003, 78th Leg., ch. 1276, § 13.001(a), eff. Sept.
1, 2003.
§ 32.256. DEDICATION OF ACQUIRED LAND TO FUND. Land
acquired by the board by trade under this subchapter is dedicated to
the permanent school fund.
Added by Acts 2003, 78th Leg., ch. 1276, § 13.001(a), eff. Sept.
1, 2003.
§ 32.257. SUBSURFACE MINERAL RIGHTS. (a) If this
state retains the subsurface mineral rights to the oil, gas, and
other minerals in permanent school fund land traded under this
subchapter, an unrestricted right of ingress to and egress from the
land by this state and its lessees shall be retained for the purpose
of exploration, development, and production of the oil, gas, and
other minerals to which the rights are retained by this state.
(b) This state is entitled to lease the subsurface mineral
rights retained under this section in the same manner and under the
same conditions as subsurface mineral rights are leased in
permanent school fund land in which this state owns the surface
title and the subsurface mineral rights.
(c) A lessee of the subsurface mineral rights retained under
this section is liable to the owner of the land for actual damages
to the land that may occur as a result of exploration for and
development and production of the oil, gas, and other minerals to
which rights are retained under this section.
(d) Notwithstanding anything to the contrary in this
subchapter, the board, to complete a trade of equal value, may
convey the surface estate and reserve the oil, gas, and other
minerals, with the surface owner acting as agent for the state
under:
(1) Subchapter F, Chapter 52, in leasing the land for
oil and gas and receiving one-half the bonus, rental, and royalty
for acting as agent for the state in leasing the land and as
compensation for surface damages; or
(2) Subchapter C, Chapter 53, in leasing the land for
sulphur, coal, lignite, uranium, or potash and receiving 40 percent
of the bonus, rental, and royalty for acting as agent for the state
in leasing the land and as compensation for surface damages.
Added by Acts 2003, 78th Leg., ch. 1276, § 13.001(a), eff. Sept.
1, 2003.
§ 32.258. REPORT TO LEGISLATURE. (a) The board shall
report to the legislature a trade of land dedicated to the permanent
school fund. The board shall report the trade at:
(1) the first regular session of the legislature
occurring after the trade if the legislature is not meeting in
regular session at the time the trade is made; or
(2) the regular session of the legislature occurring
at the time of the trade if the legislature is meeting in regular
session at the time the trade is made.
(b) The report must state the facts that warranted the
trade.
Added by Acts 2003, 78th Leg., ch. 1276, § 13.001(a), eff. Sept.
1, 2003.
