NATURAL RESOURCES CODE
CHAPTER 53. MINERALS
SUBCHAPTER A. GENERAL PROVISIONS
§ 53.001. DEFINITIONS. In this chapter:
(1) "Commissioner" means the Commissioner of the
General Land Office.
(2) "Land office" means the General Land Office.
(3) "Board" means the School Land Board.
(4) "Surface mining" means the mining of minerals by
removing the overburden lying above the natural deposit of minerals
and mining directly from the natural deposits that are exposed. The
term does not include in situ mining activities.
Acts 1977, 65th Leg., p. 2469, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 45, eff. Sept.
1, 1993; Acts 1999, 76th Leg., ch. 1483, § 3, eff. Aug. 30, 1999.
SUBCHAPTER B. PROSPECT AND LEASE ON STATE LAND
§ 53.011. LAND SUBJECT TO PROSPECT. Any tract of land
that belongs to the state, including islands, salt and freshwater
lakes, bays, inlets, marshes, and reefs owned by the state within
tidewater limits, the part of the Gulf of Mexico within the state's
jurisdiction, unsold surveyed public school land, rivers and
channels that belong to the state, and land sold with a reservation
of minerals to the state are subject to prospect by any person for
those minerals which are not subject to lease or permit under any
other statute. A person may not prospect from a location within
2,500 feet of a military base, but prospectors may, from a location
more than 2,500 feet from a base, look for minerals within the
2,500-foot strip.
Acts 1977, 65th Leg., p. 2469, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1987, 70th Leg., ch. 912, § 4, eff. Aug.
31, 1987; Acts 1987, 70th Leg., ch. 1061, § 4, eff. Aug. 31,
1987; Acts 2003, 78th Leg., ch. 149, § 14, eff. May 27, 2003.
§ 53.012. APPLICATION FOR RIGHT TO PROSPECT. (a) A
person who desires to prospect land covered by this subchapter
shall file an application with the commissioner designating the
area to be prospected.
(b) Each area covered by an application may not be in excess
of 640 acres with a 10 percent tolerance for tracts, sections, and
surveys that include more than 640 acres.
(c) The commissioner may determine the contents of an
application.
Acts 1977, 65th Leg., p. 2469, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 46, eff. Sept.
1, 1993.
§ 53.013. CONDITIONS OF PERMIT. (a) The commissioner
may issue to the first applicant a permit to prospect the area
designated in the applicant's application for a period up to one
year from the date the application is filed. If the commissioner
elects to grant the application for a permit to prospect under the
provisions of this subchapter, the permit shall not be issued until
after the land office receives the rental payment set by the
commissioner.
(b) After receipt of an additional rental payment set by the
commissioner, the commissioner may extend the permit for a period
of one year.
(c) No permit may be extended for a period of more than five
consecutive years from the date of its issuance.
Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1985, 69th Leg., ch. 923, § 19, eff. Aug.
26, 1985; Acts 1993, 73rd Leg., ch. 897, § 47, eff. Sept. 1,
1993; Acts 1995, 74th Leg., ch. 354, § 4, eff. Aug. 28, 1995.
§ 53.015. APPLICATION FOR LEASE. (a) At any time
during the term of the permit, the permittee may file an application
to lease the area or a designated portion of the area covered by the
permit for the purpose of mining or producing the minerals covered
by the permit.
(b) An application to lease must designate the specific
minerals the permittee is applying to lease. The commissioner may
determine any additional information an application must contain.
(c) If the area designated for lease in the application is
less than the area covered by the permit, the applicant shall
include with the application field notes prepared by the county
surveyor or by a licensed state land surveyor describing the land
designated.
Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 48, eff. Sept.
1, 1993.
§ 53.016. ISSUANCE OF LEASE. (a) After receipt of the
bonus payment set by the commissioner, the lease shall be issued by
the commissioner under the provisions of this subchapter and shall
be for a primary term not to exceed 20 years and as long after that
time as the minerals are produced in paying quantities.
(b) Any lease covering land adjacent to a military base
shall require the lessee to forego the right to use the surface
within 2,500 feet of the military base while exploiting the
minerals. The commissioner may include in the lease any other
provision the commissioner considers necessary for protection of
the interests of the state.
Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1983, 68th Leg., p. 5248, ch. 965, § 11,
eff. June 19, 1983; Acts 1993, 73rd Leg., ch. 897, § 49, eff.
Sept. 1, 1993; Acts 2003, 78th Leg., ch. 149, § 15, eff. May 27,
2003.
§ 53.018. ROYALTY. The royalty under the lease shall
not be less than one-sixteenth of the value of the minerals produced
under the lease.
Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.019. PAYMENTS. Lease payments and royalty shall be
paid to the commissioner at Austin, and all payments shall be
credited to the account of the permanent school fund.
Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.020. ASSIGNMENT AND TRANSFER. A lease issued under
this subchapter may be transferred or assigned at any time in the
manner provided by Section 52.026 of this code.
Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1,
1977. . Amended by Acts 1983, 68th Leg., p. 405, ch. 81, § 21(l),
eff. Sept. 1, 1983; Acts 1993, 73rd Leg., ch. 897, § 50, eff.
Sept. 1, 1993.
§ 53.021. FORFEITURE OF LEASE. (a) A lease is subject
to forfeiture by act of the commissioner if:
(1) the lessee fails or refuses to pay any amount which
is due either as a lease payment or royalty;
(2) the lessee or his authorized agent knowingly makes
any false return or false report concerning the lease;
(3) the lessee or his agent refuses the commissioner
or his authorized representative access to the records or other
data relating to operations under the lease; or
(4) a material term of the lease is violated.
(b) Any area forfeited under this section is subject to
application for a permit under the same terms as the original
application.
Acts 1977, 65th Leg., p. 2471, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.022. EFFECT OF SUBCHAPTER. None of the provisions
of this subchapter shall apply to, alter, or affect any rights
existing on June 22, 1955, under a valid permit issued by the
commissioner under the provisions of Section 12, Chapter 271,
General Laws, Acts of the 42nd Legislature, Regular Session, 1931,
as amended (Article 5421c, Vernon's Texas Civil Statutes), but if
the permittee desires that his lease continue as long as production
is obtained in paying quantities, he shall pay lease payments and
royalty provided in this subchapter.
Acts 1977, 65th Leg., p. 2471, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.023. IMMEDIATE LEASE. If the commissioner
determines that a certain mineral is located on a state tract
subject to prospect under this subchapter, a lease for that mineral
may be issued immediately on the application for the prospect
permit if the applicant identifies the mineral in the application
and requests the immediate issuance of the lease.
Added by Acts 1985, 69th Leg., ch. 923, § 20, eff. Aug. 26, 1985.
§ 53.024. PENALTY AND INTEREST. A lease issued under
this subchapter shall be subject to Sections 52.131(e) through (j)
of this code.
Added by Acts 1985, 69th Leg., ch. 923, § 20, eff. Aug. 26, 1985.
Amended by Acts 1993, 73rd Leg., ch. 897, § 51, eff. Sept. 1,
1993.
§ 53.025. LEASE RELINQUISHMENT. A lease issued under
this subchapter may be relinquished to the state at any time in the
manner provided by Section 52.027 of this code.
Added by Acts 1993, 73rd Leg., ch. 897, § 52, eff. Sept. 1, 1993.
§ 53.026. IN KIND ROYALTY. (a) The commissioner or the
commissioner acting on behalf of and at the direction of the board
or a board for lease may negotiate and execute a contract or any
other instrument or agreement necessary to dispose of or enhance
their portion of the royalty taken in kind, including contracts for
sale, purchase, transportation, or storage.
(b) The commissioner or the commissioner acting on behalf of
and at the direction of the board or a board for lease may negotiate
and execute a contract or any other instrument or agreement
necessary to convert that portion of the royalty taken in kind to
other forms of energy, including electricity.
(c) This section shall not be construed to surrender or in
any way affect the right of the state under an existing or future
lease to receive monetary royalty from its lessee.
Added by Acts 1993, 73rd Leg., ch. 897, § 52, eff. Sept. 1, 1993.
Amended by Acts 1999, 76th Leg., ch. 405, § 50, eff. Sept. 1,
1999.
§ 53.027. CONTRACTS AND AGREEMENTS. On the land
office's written request, mailed to the lessee's address as shown on
its lease or otherwise properly changed in conformity with the
terms of the lease, a copy of a contract for the sale or processing
of minerals leased under this subchapter and any subsequent
agreement or amendment to the contract shall be filed in the land
office within 30 days after the date the land office mails the
written request. The land office shall treat a contract,
agreement, or amendment filed in the land office as confidential
unless otherwise authorized by the lessee.
Added by Acts 1993, 73rd Leg., ch. 897, § 52, eff. Sept. 1, 1993.
§ 53.028. AUDIT INFORMATION CONFIDENTIAL. (a) All
information secured, derived, or obtained during the course of an
inspection or examination of books, accounts, reports, or other
records as provided by this code, a rule, or a lease provision is
confidential and may not be used publicly, opened for public
inspection, or disclosed, except for information in a lien filed
under this chapter and except as permitted under Subsection (d) of
this section.
(b) All information made confidential in this section is not
subject to subpoena directed to the commissioner, the attorney
general, or the governor except in a judicial or administrative
proceeding to which this state is a party.
(c) The commissioner or the attorney general may use
information made confidential by this section and contracts made
confidential by Section 53.027 of this code to enforce this chapter
or may authorize their use in judicial or administrative
proceedings to which this state is a party.
(d) This section does not prohibit:
(1) the delivery of information made confidential by
this section to the lessee or its successor, receiver, executor,
guarantor, administrator, assignee, or representative;
(2) the publication of statistics classified to
prevent the identification of a particular audit or items in a
particular audit;
(3) the release of information that is otherwise
available to the public; or
(4) the release of information concerning the amount
of royalty assessed as a result of an examination conducted under
this code, a rule, or a lease provision or the release of other
information that would have been properly included in reports
required under this code, a rule, or a lease provision.
Added by Acts 1993, 73rd Leg., ch. 897, § 52, eff. Sept. 1, 1993.
SUBCHAPTER C. LEASE OF MINERALS BY SURFACE OWNER
§ 53.061. AUTHORITY TO LEASE CERTAIN
MINERALS. (a) The state constitutes the owner of the surface its
agent to lease to any person any mineral, except oil and gas, which
may be within all or part of a survey previously sold with all
minerals reserved to the state.
(b) The lease shall be made on terms and conditions that may
be prescribed by the school land board.
Acts 1977, 65th Leg., p. 2471, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1987, 70th Leg., ch. 1061, § 6, eff. Aug.
31, 1987.
§ 53.062. LEASE OF MINERALS SEPARATELY AND
TOGETHER. Minerals covered by the provisions of this subchapter
may be leased either separately or together.
Acts 1977, 65th Leg., p. 2471, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.063. FORMS. The owner of the surface may lease to
any person the minerals covered by this subchapter on lease forms
prepared by the land office.
Acts 1977, 65th Leg., p. 2471, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.064. PREREQUISITES FOR EFFECTIVENESS OF
LEASE. (a) No lease executed by the owner of the surface is
binding on the state unless it recites the actual consideration
paid or promised for the lease. A lease covering land adjacent to a
military base shall require the lessee to forego the right to use
the surface within 2,500 feet of the military base while exploiting
the minerals.
(b) No lease is effective until a certified copy is filed in
the land office and the bonus accruing to the state is paid to the
commissioner. The commissioner is entitled to reject for filing
any lease submitted to him that he feels is not in the best interest
of the state.
Acts 1977, 65th Leg., p. 2471, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 2003, 78th Leg., ch. 149, § 16, eff. May
27, 2003.
§ 53.065. PAYMENTS UNDER LEASE. (a) Under a lease
executed under this subchapter before September 1, 1987, the lessee
shall pay to the state 60 percent of all bonuses agreed to be paid
for the lease and 60 percent of all rentals and royalties that are
payable under the lease. The lessee shall pay to the owner of the
surface 40 percent of all bonuses agreed to be paid for the lease
and 40 percent of all rentals and royalties payable under the lease.
(b) Except as provided by Subsection (c), under a lease
executed under this subchapter on or after September 1, 1987, the
lessee shall pay:
(1) to the state 80 percent of all bonuses agreed to be
paid for the lease and 80 percent of all rentals and royalties that
are payable under the lease; and
(2) to the owner of the surface 20 percent of all
bonuses agreed to be paid for the lease and 20 percent of all
rentals and royalties payable under the lease.
(c) Under a lease executed under this subchapter on or after
September 1, 1999, for the exploration and production by surface
mining of coal, lignite, potash, sulphur, thorium, or uranium, the
lessee shall pay:
(1) to the state 60 percent of all bonuses agreed to be
paid for the lease and 60 percent of all rentals and royalties that
are payable under the lease; and
(2) to the owner of the surface 40 percent of all
bonuses agreed to be paid for the lease and 40 percent of all
rentals and royalties payable under the lease.
(d) If production is obtained, the state shall receive not
less than one-sixteenth of the value of the minerals produced.
Acts 1977, 65th Leg., p. 2472, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1987, 70th Leg., ch. 1061, § 7, eff. Aug.
31, 1987; Acts 1999, 76th Leg., ch. 1483, § 4, eff. Aug. 30,
1999.
§ 53.066. DAMAGES TO SURFACE. Payments made by the
lessee to the owner of the surface as provided in this subchapter
and acceptance of the payments by the owner of the surface are in
place of all damages to the soil.
Acts 1977, 65th Leg., p. 2472, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.067. PAYMENT PROCEDURE. Royalties and other
payments accruing to the state under this subchapter shall be paid
to the commissioner in Austin and shall be deposited in the fund to
which the minerals belong.
Acts 1977, 65th Leg., p. 2472, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.068. PRODUCTION REPORT AND RECORDS. (a) Each
payment shall be accompanied by an affidavit of the lessee or his
authorized agent indicating:
(1) the amount of minerals produced and marketed
during the month;
(2) the person to whom the minerals were sold; and
(3) the selling price for the minerals as shown by
copies of the smelter, mint, mill, refinery, or other returns or
documents attached to the affidavit.
(b) Books, accounts, weights, wage contracts,
correspondence, and other documents or papers relating to
production under this subchapter are open at all times to
inspection by the commissioner or his authorized representatives.
Acts 1977, 65th Leg., p. 2472, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.069. FORFEITURE OF LEASE. (a) A lease and all
rights under a lease are subject to forfeiture by action of the
commissioner if the lessee or his assignee, sublessee, receiver, or
other agent in control of the lease:
(1) fails or refuses to pay any royalty within 30 days
after it becomes due;
(2) fails or refuses to the proper authorities access
to the records relating to the operations; or
(3) knowingly fails or refuses to give correct
information to the proper authorities.
(b) The commissioner may declare the forfeiture when he is
sufficiently informed of the facts that authorize the forfeiture.
He shall write on the wrapper containing the papers relating to the
lease words declaring the forfeiture and shall sign it officially.
Then the lease and all rights under the lease together with payments
made under it are forfeited.
(c) Notice of the forfeiture shall be mailed to the person
shown by the records of the land office to be the owner of the
surface and the owner of the forfeited lease at their last known
addresses as shown in the land office records.
Acts 1977, 65th Leg., p. 2472, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.070. REINSTATEMENT OF LEASE. (a) If the owner of
the forfeited lease complies with the provisions of this subchapter
within 30 days after the declaration of forfeiture, the
commissioner may reinstate the lease under the terms of this
subchapter and other terms that he may prescribe.
(b) If the lease is not reinstated within the 30-day period,
the owner of the surface, as agent of the state, is entitled to
lease the minerals.
Acts 1977, 65th Leg., p. 2473, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.071. LIEN. The state has a first lien on all
minerals produced from any lease to secure the payment of unpaid
royalty or other amounts that are due under this subchapter.
Acts 1977, 65th Leg., p. 2473, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.072. EFFECT OF CERTAIN LAWS. Any rights acquired
under Articles 5388 through 5403, Revised Civil Statutes of Texas,
1925, before March 15, 1967, are not affected by the repeal of those
articles, and the rights, powers, duties, and obligations conferred
or imposed by those articles are governed by those repealed
articles.
Acts 1977, 65th Leg., p. 2473, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.073. CERTAIN MINERALS AND LAWS EXEMPT FROM
SUBCHAPTER. The provisions of this subchapter do not apply to or
affect oil and gas and do not affect the provisions of Subchapter F,
Chapter 52 of this code or Subchapter B of this chapter.
Acts 1977, 65th Leg., p. 2473, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.074. AUTHORITY AND DUTIES OF
AGENT. (a) Prohibition Against Self-Dealing. (1) The owner of
the soil may not lease, either directly or indirectly, to himself or
to a nominee, to any corporation or subsidiary in which he is a
principal stockholder or to an employee of such a corporation or
subsidiary, or to a partnership in which he is a partner or to an
employee of such a partnership. If the owner of the soil is a
corporation or a partnership, then the owner of the soil may not
lease, either directly or indirectly, to a principal stockholder of
the corporation or to a partner of the partnership, or any employee
of the corporation or partnership. The owner of the soil may not
lease, either directly or indirectly, to his fiduciary, including
but not limited to a guardian, trustee, executor, administrator,
receiver, or conservator.
(2) Except as provided by this section, the owner of
the soil may not lease, directly or indirectly, to a person related
to him within and including the second degree of consanguinity or
affinity, including a person related by adoption, or to a
corporation or subsidiary in which that person is a principal
stockholder, or to a partnership in which that person is a partner,
or to an employee of such a corporation or subsidiary or
partnership.
(3) An owner of the soil who wishes to lease to a
person, corporation, or partnership described in Subdivision (2)
may request the approval of the board for authority to execute such
a lease before its execution. The owner of the soil requesting
approval must also execute and file with the commissioner a sworn
affidavit stating that the owner of the soil will not receive any
benefit under a lease so approved by the board that will not be
shared with the permanent school fund in the proportion prescribed
by this subchapter.
(4) If an owner of the soil makes any material
misstatement of fact in connection with an application to the board
or affidavit made pursuant to Subdivision (3), then any lease
executed pursuant to the authority of the board shall be voidable at
the election of the commissioner. The election to void such a lease
shall be cumulative of and in addition to all other remedies
available to the commissioner or the state.
(b) Fiduciary Duty of Agent. An owner of the soil owes the
state a fiduciary duty and a duty of utmost good faith. An owner of
the soil must fully disclose any facts affecting the state's
interest and must act in the best interest of the state. Any
conflict of interest must be resolved by putting the interests of
the state before the interests of the owner of the soil. In
addition to these specific statutory duties, the owner of the soil
owes the state all the common-law duties of a holder of executive
rights.
(c) Consequences of a Breach of the Surface Owner's
Fiduciary Duty or a Violation of the Prohibition Against
Self-Dealing. When the commissioner determines that an owner of
the soil has breached any duty or obligation under this subchapter,
the commissioner may request that the attorney general file an
action or proceeding either to enforce the duties and obligations
of the owner of the soil or to forfeit the then applicable agency
rights of the surface owner. Such an action or proceeding shall be
filed in a district court in Travis County.
(d) Leasing Procedure When Surface Owner's Agency Rights
Have Been Forfeited. When the surface owner's agency rights have
been forfeited in accordance with Subsection (c) of this section,
the minerals subject to lease under this subchapter can then be
leased under the leasing procedure set out for the lease of oil and
gas under Section 52.175 of this code. The substantive provisions
of Subchapter E of this chapter and Subchapters D and E, Chapter
32, of this code shall apply to the lease.
(e) A penalty of 10 percent shall be imposed on any sums due
the state because a surface owner breaches a fiduciary duty. This
penalty shall be applied only to amounts owed as a result of
breaches occurring on and after the effective date of this section.
The imposition of this penalty will not limit the right of the state
to obtain punitive damages, exemplary damages, or interest. Any
punitive damages or exemplary damages assessed by a court shall be
offset by the 10 percent penalty imposed by this subsection.
Added by Acts 1987, 70th Leg., ch. 912, § 5, eff. Aug. 31, 1987.
Amended by Acts 1993, 73rd Leg., ch. 897, § 53, eff. Sept. 1,
1993; Acts 1995, 74th Leg., ch. 937, § 4, eff. Sept. 1, 1995.
§ 53.075. ASSIGNMENT AND TRANSFER. A lease issued under
this subchapter may be assigned or transferred at any time in the
manner provided by Section 52.026 of this code.
Added by Acts 1993, 73rd Leg., ch. 897, § 54, eff. Sept. 1, 1993.
§ 53.076. LEASE RELINQUISHMENT. A lease issued under
this subchapter may be relinquished to the state at any time in the
manner provided by Section 52.027 of this code.
Added by Acts 1993, 73rd Leg., ch. 897, § 54, eff. Sept. 1, 1993.
§ 53.077. IN KIND ROYALTY. (a) The commissioner, each
owner of the soil under this subchapter, or the commissioner acting
on the behalf of and at the direction of an owner of the soil under
this subchapter may negotiate and execute a contract or any other
instrument or agreement necessary to dispose of or enhance their
portion of the royalty taken in kind, including a contract for sale,
transportation, or storage.
(b) The commissioner, each owner of the soil under this
subchapter, or the commissioner acting on behalf of and at the
direction of the owner of the soil under this subchapter may
negotiate and execute a contract or any other instrument or
agreement necessary to convert that portion of the royalty taken in
kind to other forms of energy, including electricity.
(c) This section shall not be construed to surrender or in
any way affect the right of the state or the owner of the soil under
an existing or future lease to receive monetary royalty from its
lessee.
Added by Acts 1993, 73rd Leg., ch. 897, § 54, eff. Sept. 1, 1993.
Amended by Acts 1999, 76th Leg., ch. 405, § 51, eff. Sept. 1,
1999.
§ 53.078. PENALTY AND INTEREST. A lease issued under
this subchapter shall be subject to Sections 52.131(e) through (j)
of this code.
Added by Acts 1993, 73rd Leg., ch. 897, § 54, eff. Sept. 1, 1993.
§ 53.079. CONTRACTS AND AGREEMENTS. On the land
office's written request, mailed to the lessee's address as shown on
its lease or otherwise properly changed in conformity with the
terms of the lease, a copy of a contract for the sale or processing
of minerals leased under this subchapter and any subsequent
agreement or amendment to the contract shall be filed in the land
office within 30 days after the date the land office mails the
written request. The land office shall treat a contract,
agreement, or amendment filed in the land office as confidential
unless otherwise authorized by the lessee.
Added by Acts 1993, 73rd Leg., ch. 897, § 54, eff. Sept. 1,1993.
§ 53.080. AUDIT INFORMATION CONFIDENTIAL. (a) All
information secured, derived, or obtained during the course of an
inspection or examination of books, accounts, reports, or other
records as provided by Section 53.068 of this code, a rule, or a
lease provision is confidential and may not be used publicly,
opened for public inspection, or disclosed, except for information
in a lien filed under this chapter and except as permitted under
Subsection (d) of this section.
(b) All information made confidential by this section is not
subject to subpoena directed to the commissioner, the attorney
general, or the governor except in a judicial or administrative
proceeding to which this state is a party.
(c) The commissioner or the attorney general may use
information made confidential by this section and contracts made
confidential by Section 53.079 of this code to enforce this chapter
or may authorize their use in judicial or administrative
proceedings to which this state is a party.
(d) This section does not prohibit:
(1) the delivery of information made confidential by
this section to the lessee or its successor, receiver, executor,
guarantor, administrator, assignee, or representative;
(2) the publication of statistics classified to
prevent the identification of a particular audit or items in a
particular audit;
(3) the release of information that is otherwise
available to the public; or
(4) the release of information concerning the amount
of royalty assessed as a result of an examination conducted under
Section 53.068 of this code, a rule, or a lease provision or the
release of other information that would have been properly included
in reports required under Section 53.068 of this code, a rule, or a
lease provision.
Added by Acts 1993, 73rd Leg., ch. 897, § 54, eff. Sept. 1, 1993.
§ 53.081. LEASE BY OWNER OF THE SOIL. (a) An owner of
the soil of lands covered by this subchapter may lease those lands
for the purpose of exploring for and producing minerals other than
oil and gas in the manner provided by this section.
(b) An owner of the soil may apply in writing to the board
for a lease of a mineral or minerals other than oil and gas.
(c) The application shall contain the following:
(1) the name and address of the applicant;
(2) a complete legal description of the land the
applicant seeks to lease;
(3) the name and address of every owner of the soil of
the land the applicant seeks to lease, if the applicant is not the
sole owner of the soil;
(4) a brief letter opinion signed by an attorney
licensed in this state setting out the surface ownership of the land
sought to be leased;
(5) a statement of the applicant's experience in the
exploration for and production of minerals other than oil and gas,
including, without limitation, a list of any State of Texas or
federal mineral leases currently or previously held or operated by
the applicant or other entity in which the applicant has or had a
significant interest during the five-year period preceding the date
of the application;
(6) a statement that the applicant intends to explore
for and, if commercially reasonable, produce minerals other than
oil and gas or if the applicant plans that another person or firm
shall conduct exploration and production:
(A) the name and address of the person or firm;
(B) a description of such person's or firm's
experience in the exploration for and production of minerals other
than oil and gas, including, without limitation, a list of any State
of Texas or federal minerals other than oil and gas leases currently
or previously held or operated by the person or firm during the
five-year period preceding the date of the application; and
(C) a description of the applicant's intended
degree and type of participation in the exploration of and
production from the property and all consideration or benefits the
applicant expects to receive in connection with the exploration of
and production from the property; and
(7) the amount of bonus, rental, royalty, and other
lease terms that the applicant proposes to pay or offer or pay and
offer for the lease.
(d) The applicant shall provide geological, geophysical,
geochemical, and other data or copies of the data, including
interpretative data, pertinent to exploration for minerals other
than oil and gas on the lands for which the application is made, in
the applicant's possession or to which the applicant has reasonable
access and which the applicant has the ability to provide to the
land office. All such data shall be confidential and not subject to
the provisions of the open records law, Chapter 552, Government
Code, until one year after the expiration, termination, or
forfeiture of a lease granted pursuant to this section. After one
year after the expiration, termination, or forfeiture of such a
lease, the data shall remain confidential to the extent permitted
by Chapter 552, Government Code. If a lease is not issued, the data
shall be returned to the applicant.
(e) The board may prescribe the form of the application,
require additional information as it considers appropriate, and, by
rule, otherwise provide for the implementation of this section.
(f) The staff of the land office shall review the
information presented in the application, such other geological,
geophysical, and geochemical data reasonably available to it
relevant to the land proposed to be leased, and leasing information
reasonably available to it relevant to the land proposed to be
leased. The staff shall prepare a report to the board that
contains:
(1) a summary of bonus, rental, royalty, and other
lease terms then being offered and asked for leases of similar lands
in the area of the land proposed to be leased; and
(2) data considered by the staff to be relevant,
including, but not limited to, data concerning the land proposed to
be leased and its estimated value for minerals other than oil and
gas, recommended lease terms, and the applicant, including the
applicant's history of leasing State of Texas or federal lands for
minerals other than oil and gas.
(g) The board shall consider the application at a regular
meeting. It may, in its sole discretion, grant or deny the
application or grant the application subject to specified
conditions. Such conditions may include a requirement that if the
applicant does not materially participate in the exploration or
development of the leased premises, through labor performed, cash
or goods contributed, or supplying other enhancement in value, the
applicant must share equally with the permanent school fund any
benefit derived from the lease.
(h) After the board has approved an application, the
commissioner shall issue a lease to the applicant. The lease shall
conform, as nearly as is practicable, to the form of lease
prescribed by the commissioner under this chapter.
(i) The commissioner may not deliver a lease issued under
this section until the applicant has executed and delivered to the
commissioner a waiver of the applicant's right and duty to act as
agent for the state in leasing the leased premises and to receive
any part of the bonus, rental, royalty, and other consideration
accruing to the owner of the soil under this subchapter. The waiver
and the lease shall be effective as of the date the commissioner
executes the lease.
(j) Upon the expiration, termination, or forfeiture of a
lease issued under this section, the agency rights and duties of the
applicant as owner of the soil are reinstated without the necessity
for further action by the owner of the soil, the board, or the
commissioner.
(k) If an applicant is not the sole owner of the soil, the
applicant may secure leases from the other owners of the soil from
which the applicant is not prohibited from leasing under Section
53.074. If the applicant must obtain a lease from an owner of the
soil from whom the applicant would otherwise not be permitted to
lease in order reasonably to explore for or produce or explore for
and produce minerals other than oil or gas, the commissioner may
approve the lease on the condition that the applicant shall not
receive any benefit from the lease, and, if the applicant should
acquire by any method, including devise or inheritance, the right
to receive any rental, royalty, or other benefit accruing to the
owner of the soil's interest under the lease, the applicant shall
assign the benefit to the commissioner for the benefit of the
permanent school fund.
(l) The commissioner shall not approve any lease obtained by
an applicant from another owner of the soil if the lease contains
terms that are substantially inconsistent with or provide for a
lesser bonus, rental, or royalty than the lease approved by the
board. If the bonus, rental, or royalty in a lease obtained by an
applicant from another owner of the soil for a comparable interest
is greater than that approved by the board, then the lease approved
by the board shall be amended to provide for the greater bonus,
rental, or royalty, and the applicant shall be liable for all
greater sums due. In determining whether an interest is
comparable, the board shall consider the quantum of the interest,
the time at which the lease was taken, and any other aspects of the
lease transaction that the board considers to be relevant.
Added by Acts 1995, 74th Leg., ch. 937, § 3, eff. Sept. 1, 1995.
SUBCHAPTER D. UNITIZATION OF SULPHUR PRODUCTION
§ 53.111. AUTHORITY TO OPERATE AN AREA AS A UNIT FOR
PRODUCTION OF SULPHUR. The commissioner on behalf of the state or
any fund that belongs to the state may execute agreements that
provide for operating areas as a unit for the exploration,
development, and production of sulphur and may commit to the
agreements:
(1) the royalty interests in sulphur reserved to the
state or any fund of the state by law in a patent, award, mining
claim, or contract of sale or under the terms of any lease legally
executed by an official, board, agent, agency, or authority of the
state; or
(2) the free royalty interests, whether leased or
unleased, reserved to the state under Section 51.201 or 51.054 of
this code.
Acts 1977, 65th Leg., p. 2473, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 55, eff. Sept.
1, 1993.
§ 53.112. APPROVAL OF CERTAIN AGREEMENTS BY SCHOOL LAND
BOARD. (a) An agreement must be approved by the board and
executed by the commissioner to be effective if the agreement
commits:
(1) a royalty interest in land belonging to the
permanent school fund or the asylum funds, in riverbeds, inland
lakes, channels, or areas within tidewater limits, including
islands, lakes, bays, inlets, marshes, reefs, and the bed of the
sea; or
(2) the free royalty interests, whether leased or
unleased, reserved to the state under Section 51.201 or 51.054 of
this code.
(b) An owner of the soil who is subject to Subchapter C of
this chapter may grant to a lessee prior authority to pool or
unitize the interest of the owner in a lease executed under that
subchapter. For the agreement to bind the interest of an owner of
the soil who is subject to Subchapter C of this chapter and who has
not granted the lessee prior authorization to pool or unitize the
interest of the owner in a sulphur lease executed under that
subchapter, the agreement must be executed by the owner of the soil.
Acts 1977, 65th Leg., p. 2473, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 56, eff. Sept.
1, 1993.
§ 53.113. APPROVAL OF AGREEMENTS. An agreement that
commits the royalty interest in any land not listed in Section
53.112 of this code must be approved by the board, official, agent,
agency, or authority of the state which has the authority to lease
or to approve the lease of the land for sulphur and must be executed
by the commissioner to be effective.
Acts 1977, 65th Leg., p. 2473, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 57, eff. Sept.
1, 1993.
§ 53.114. COMMISSIONER'S APPROVAL. Before executing an
agreement authorized by Section 53.111 of this code, the
commissioner must find that the agreement is in the best interest of
the state.
Acts 1977, 65th Leg., p. 2474, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 58, eff. Sept.
1, 1993.
§ 53.115. PROVISIONS OF AGREEMENT. (a) An agreement
executed under this subchapter may include the following
provisions:
(1) that operations incident to drilling a well on any
portion of a unit shall be considered for all purposes to be conduct
of the operations on each tract in the unit;
(2) that production allocated by the agreement to each
tract included in the unit shall be considered for all purposes to
have been production from the tract;
(3) that the interest reserved to or provided for the
state or any of its funds on production from any tract included in
the unit shall be paid only on that portion of the production from
the unit that is allocated to the tract under the agreement; and
(4) that each lease included in the unit shall remain
in effect so long as the agreement remains in effect and that on
termination of the agreement each lease shall continue in effect
under the terms and conditions of the lease.
(b) The agreement may include any other terms and conditions
the commissioner or any board, official, agent, agency, or
authority of the state that has the authority to lease or to approve
a lease of the land for sulphur may consider to be in the best
interest of the state.
Acts 1977, 65th Leg., p. 2474, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 59, eff. Sept.
1, 1993.
§ 53.116. APPLICATION TO UNIVERSITY LAND. None of the
provisions of this subchapter apply to any land under the control
and management of the Board of Regents of The University of Texas
System.
Acts 1977, 65th Leg., p. 2474, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.117. CONSTRUCTION OF SUBCHAPTER. (a) Agreements
and operations under this subchapter are necessary to prevent waste
and conserve the natural resources of the state and are not a
violation of the provisions of Chapter 15, Business & Commerce
Code, as amended.
(b) If a court finds a conflict between the provisions of
this subchapter and the code cited in the previous subsection, this
subchapter is intended as a reasonable exception to those laws
which is necessary to prevent waste and conserve the natural
resources.
(c) If a court finds that a conflict exists between this
subchapter and the laws cited in Subsection (a) of this section and
that this subchapter is not a reasonable exception to those laws, it
is the intent of the legislature that this subchapter or any
conflicting portion of this subchapter be declared invalid and that
the previously cited laws remain valid.
Acts 1977, 65th Leg., p. 2474, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 53.118. 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 belonging to the permanent school fund or
the asylum funds.
(b) An agreement approved by the board under this section
must be executed by the commissioner to be effective.
(c) A ratification or other agreement that commits any of
the interests listed by Subsection (a) of this section in land not
belonging to the permanent school fund or the asylum funds must be
approved by the board, official, agent, agency, or authority of the
state that has the authority to lease or to approve the lease of the
land for sulphur and must be executed by the commissioner to be
effective.
Added by Acts 1993, 73rd Leg., ch. 897, § 60, eff. Sept. 1, 1993.
SUBCHAPTER E. LEASE OF PUBLIC SCHOOL AND GULF LAND FOR COAL,
LIGNITE, SULPHUR, SALT, AND POTASH
§ 53.151. LEASE OF CERTAIN AREAS. (a) Under the
provisions of this subchapter, the board may lease to any person for
the production of coal, lignite, sulphur, salt, and potash:
(1) islands, saltwater lakes, bays, inlets, marshes,
and reefs owned by the state within tidewater limits;
(2) the portion of the Gulf of Mexico within the
jurisdiction of the state;
(3) rivers and channels that belong to the state;
(4) all unsold surveyed and unsurveyed public school
land; and
(5) all land sold with a reservation of minerals to the
state under Section 51.054 or 51.086 of this code in which the state
has retained leasing rights.
(b) The lease may not be granted for any land within 2,500
feet of a military base.
Added by Acts 1979, 66th Leg., p. 49, ch. 29, § 1, eff. April 3,
1979. Amended by Acts 1983, 68th Leg., p. 5245, ch. 965, § 7,
eff. June 19, 1983; Acts 2003, 78th Leg., ch. 149, § 17, eff. May
27, 2003; Acts 2003, 78th Leg., ch. 1276, § 13.002(c), eff.
Sept. 1, 2003.
§ 53.152. LAWS APPLICABLE TO LEASES. Leases of land
described by Section 53.151 of this code shall be made in the same
procedural manner as leases of that land for oil and gas under
Chapter 52 of this code.
Added by Acts 1979, 66th Leg., p. 49, ch. 29, § 1, eff. April 3,
1979. Amended by Acts 1993, 73rd Leg., ch. 897, § 61, eff. Sept.
1, 1993.
§ 53.153. CONDITIONS OF LEASE. (a) Coal, lignite,
sulphur, salt, and potash may be leased together or separately.
(b) A lease granted under this subchapter shall be for a
primary term not to exceed 20 years and as long after that time as
the minerals are produced in paying quantities.
Added by Acts 1979, 66th Leg., p. 49, ch. 29, § 1, eff. April 3,
1979. Amended by Acts 1993, 73rd Leg., ch. 897, § 62, eff. Sept.
1, 1993.
§ 53.154. ROYALTY RATE. The board shall set the royalty
rate on production of sulphur, coal, lignite, salt, and potash from
land leased under this subchapter. The royalty rate set must be at
least one-eighth of the gross production or the market value of the
sulphur produced and at least one-sixteenth of the gross production
or the market value of the coal, lignite, salt, and potash produced.
Added by Acts 1979, 66th Leg., p. 49, ch. 29, § 1, eff. April 3,
1979. Amended by Acts 1993, 73rd Leg., ch. 897, § 63, eff. Sept.
1, 1993.
§ 53.155. COMPENSATION FOR DAMAGES FROM USE OF
SURFACE. (a) Leases issued under Subchapter B or E of this
chapter for unsold surveyed or unsurveyed school land, other than
land included in islands, saltwater lakes, bays, inlets, marshes,
and reefs owned by the state in tidewater limits and other than that
portion of the Gulf of Mexico within the jurisdiction of the state,
must include a provision requiring compensation for damages from
the use of the surface in prospecting for, exploring, developing,
or producing the leased minerals.
(b) The commissioner by rule shall set the procedure for
receiving compensation for damages to the surface of land dedicated
to the permanent school fund.
(c) Money collected for surface damages shall be deposited
in a special fund account in the State Treasury to be used for
conservation, reclamation, or constructing permanent improvements
on land that belongs to the permanent school fund.
(d) The special fund account must be an interest-bearing
account, and the interest received on the account shall be
deposited in the State Treasury to the credit of the permanent
school fund.
(e) Money collected under this section and designated for
the construction of permanent improvements as provided by this
section must be used not later than two years after the date on
which the money is collected.
(f) Any money that remains in the special fund account for
longer than two years shall be deposited in the State Treasury to
the credit of the permanent school fund.
(g) Compensation for damages under this section is in
addition to any bonus, rental, royalty, or other payment required
by the lease.
Added by Acts 1985, 69th Leg., ch. 624, § 48, eff. Sept. 1, 1985.
Amended by Acts 1987, 70th Leg., ch. 948, § 32, eff. Sept. 1,
1987; Acts 1993, 73rd Leg., ch. 897, § 64, eff. Sept. 1, 1993;
Acts 2003, 78th Leg., ch. 328, § 9, eff. Jan. 1, 2004.
§ 53.156. CONTRACTS AND AGREEMENTS. On the land
office's written request, mailed to the lessee's address as shown on
its lease or otherwise properly changed in conformity with the
terms of the lease, a copy of a contract for the sale or processing
of minerals leased under this subchapter and any subsequent
agreement or amendment to the contract shall be filed in the land
office within 30 days after the date the land office mails the
written request. The land office shall treat a contract,
agreement, or amendment filed in the land office as confidential
unless otherwise authorized by the lessee.
Added by Acts 1993, 73rd Leg., ch. 897, § 65, eff. Sept. 1, 1993.
SUBCHAPTER F. GEOPHYSICAL AND GEOCHEMICAL EXPLORATION PERMIT
§ 53.161. DEFINITIONS. In this subchapter:
(1) "Mineral(s)" means coal, lignite, sulphur, salt,
and potash.
(2) "Geophysical exploration" means a survey or
investigation conducted to discover or locate mineral prospects
using magnetic, gravity, seismic, and/or electrical techniques.
(3) "Geochemical exploration" means a survey or
investigation conducted to discover or locate mineral prospects
using techniques involving soil sampling and analysis.
(4) "Public school land" means land dedicated by the
constitution or laws of this state to the permanent free school
fund, but does not include land with a mineral classification
described in Section 53.061 of this chapter in which the state has
retained the minerals, nor does it include areas within tidewater
limits.
(5) "Permit" means a license issued by the
commissioner authorizing geophysical and/or geochemical
exploration on public school land.
(6) "Permittee" means the holder of a permit.
(7) "Areas within tidewater limits" means islands,
saltwater lakes, bays, inlets, marshes, and reefs within tidewater
limits and that portion of the Gulf of Mexico within the
jurisdiction of Texas.
Added by Acts 1981, 67th Leg., p. 2453, ch. 631, § 2, eff. Sept.
1, 1981. Amended by Acts 1993, 73rd Leg., ch. 897, § 66, eff.
Sept. 1, 1993.
§ 53.162. PERMIT REQUIRED FOR EXPLORATION. (a) Except
for a person who has a valid mineral lease on public school land
authorized by this chapter, a person may not conduct geophysical or
geochemical exploration on public school land unless the person
obtains a permit from the commissioner.
(b) Every person who is authorized to conduct a geophysical
or geochemical exploration on public school land shall comply with
the commissioner's rules relating to such exploration. A person
with a valid mineral lease on land subject to this chapter shall
comply with the commissioner's rules concerning exploration.
Added by Acts 1981, 67th Leg., p. 2453, ch. 631, § 2, eff. Sept.
1, 1981. Amended by Acts 1993, 73rd Leg., ch. 897, § 67, eff.
Sept. 1, 1993.
§ 53.163. LAWS APPLICABLE TO PERMITS. Permits for
geophysical and geochemical exploration under this subchapter
shall be issued in the same manner and under the same terms and
conditions as permits for oil and gas under Subchapter I of Chapter
52 of this code.
Added by Acts 1981, 67th Leg., p. 2453, ch. 631, § 2, eff. Sept.
1, 1981. Amended by Acts 1985, 69th Leg., ch. 624, § 49, eff.
Sept. 1, 1985.
§ 53.1631. GROUNDWATER. (a) Unless otherwise
expressly provided by statute, deed, patent, or other grant from
the State of Texas, groundwater shall not be considered a mineral in
any past or future reservation of title or rights to minerals by the
State of Texas.
(b) Notwithstanding Subsection (a), the State of Texas
shall retain any and all rights to reasonable use of the surface and
groundwater for mineral development and production purposes.
Added by Acts 2003, 78th Leg., ch. 1091, § 32, eff. June 20,
2003.
