CHAPTER 32. SCHOOL LAND BOARD
NATURAL RESOURCES CODE
TITLE 2. PUBLIC DOMAIN
SUBTITLE C. ADMINISTRATION
CHAPTER 32. SCHOOL LAND BOARD
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 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 or acquired on behalf of the permanent
school fund and the asylum funds under 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1985, 69th Leg., ch. 624, Sec. 4,
eff. Sept. 1, 1985; Acts 1991, 72nd Leg., ch. 642, Sec. 1, eff.
Aug. 26, 1991.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 1, eff. June 19, 2009.
Sec. 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,
commonly known as the Relinquishment Act, and Subchapters B and
C, Chapter 53;
(4) land owned by the Parks and Wildlife Department; or
(5) land owned by the Texas Board of Criminal Justice.
(a-1) Oil and gas underlying land that is owned by this state,
was acquired to construct or maintain a highway, road, street, or
alley, is located in a producing area, and is subject to an oil
or gas lease may be pooled or unitized only prospectively and is
subject to Sections 32.201, 32.202, and 32.203.
(b) For purposes of Subsection (a-1), 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.
(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.
(f) This chapter does not authorize drilling or other operations
on the surface of land during the period in which the land is
used by this state as a highway, road, street, or alley.
Added by Acts 1985, 69th Leg., ch. 624, Sec. 5, eff. Sept. 1,
1985. Amended by Acts 1987, 70th Leg., ch. 167, Sec. 6.05(e),
eff. Sept. 1, 1987; Acts 1991, 72nd Leg., ch. 642, Sec. 2, eff.
Aug. 26, 1991; Acts 1993, 73rd Leg., ch. 897, Sec. 1, eff. Sept.
1, 1993; Acts 1995, 74th Leg., ch. 165, Sec. 22(50), eff. Sept.
1, 1995.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 2, eff. June 19, 2009.
Sec. 32.003. APPLICATION OF SUNSET ACT. The School Land Board
is subject to Chapter 325, Government Code (Texas Sunset Act).
Unless continued in existence as provided by that chapter, the
board is abolished September 1, 2017.
Added by Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 3, eff. June 19, 2009.
SUBCHAPTER B. ADMINISTRATIVE PROVISIONS
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 7, eff. Sept. 1,
1985.
Sec. 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, Sec. 8, eff. Sept. 1,
1985. Amended by Acts 1987, 70th Leg., ch. 167, Sec. 2.19(20),
eff. Sept. 1, 1987.
Sec. 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, Sec. 9, eff. Sept. 1,
1985.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 32.014. CHAIRMAN OF THE BOARD. The commissioner serves as
chairman of the board.
Acts 1977, 65th Leg., p. 2377, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 32.016. BOARD MEETINGS. (a) When necessary, the board
shall meet on the first and third Tuesdays of each month at a
time and location to be designated by the board.
(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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1999, 76th Leg., ch. 139, Sec. 1,
eff. Sept. 1, 1999.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 4, eff. June 19, 2009.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 10, eff. Sept. 1,
1985.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1985, 69th Leg., ch. 624, Sec. 11,
eff. Sept. 1, 1985.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 12, eff. Sept. 1,
1985.
Sec. 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, Sec. 13, eff. Sept. 1,
1985. Amended by Acts 1989, 71st Leg., ch. 584, Sec. 6, eff.
Sept. 1, 1989.
Sec. 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, Sec. 14, eff. Sept. 1,
1985.
SUBCHAPTER C. POWERS AND DUTIES
Sec. 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 land,
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 and conditions under
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, Sec. 1, eff.
Sept. 1, 1977. Amended Acts 1985, 69th Leg., ch. 624, Sec. 15,
eff. Sept. 1, 1985; Acts 1993, 73rd Leg., ch. 897, Sec. 2, eff.
Sept. 1, 1993.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 5, eff. June 19, 2009.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1985, 69th Leg., ch. 624, Sec. 16,
eff. Sept. 1, 1985; Acts 1993, 73rd Leg., ch. 897, Sec. 3, eff.
Sept. 1, 1993.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 17, eff. Sept. 1,
1985. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 4, eff.
Sept. 1, 1993.
Sec. 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, Sec. 18, eff. Sept. 1,
1985. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 5, eff.
Sept. 1, 1993.
Sec. 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, Sec. 19, eff. Sept. 1,
1985. Amended by Acts 1995, 74th Leg., ch. 165, Sec. 22(51), eff.
Sept. 1, 1995.
Sec. 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, Sec. 1, eff. June 17,
1995. Amended by Acts 1999, 76th Leg., ch. 1300, Sec. 1, eff.
Sept. 1, 1999.
SUBCHAPTER D. SALE AND LEASE OF LAND
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 6,
eff. Sept. 1, 1993; Acts 2003, 78th Leg., ch. 149, Sec. 11, eff.
May 27, 2003.
Sec. 32.102. LIST OF LAND. From time to time as requested by
the board, 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, Sec. 1, eff.
Sept. 1, 1977.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 6, eff. June 19, 2009.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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:
(1) the first or third Tuesday of a month in which the board
meets; or
(2) any date on which the board has a special meeting.
Acts 1977, 65th Leg., p. 2379, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 7,
eff. Sept. 1, 1993.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 7, eff. June 19, 2009.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 8,
eff. Sept. 1, 1993.
Sec. 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 or other publications, two of which
may be Internet-based journals, trade publications, newsletters,
or similar news media, that are, in the opinion of the
commissioner, likely to reach the public interested in responding
to the notice of sale, lease, or commitment to a contract for
development.
(b) The notice shall be published at least 30 days before the
date the bids are due.
(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 of
how a person may obtain additional information concerning 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1985, 69th Leg., ch. 624, Sec. 20,
eff. Sept. 1, 1985; Acts 1993, 73rd Leg., ch. 897, Sec. 9, eff.
Sept. 1, 1993.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 8, eff. June 19, 2009.
Sec. 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, Sec. 21, eff. Sept. 1,
1985. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 10, eff.
Sept. 1, 1993.
Sec. 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, Sec. 22, eff. Sept. 1,
1985. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 11, eff.
Sept. 1, 1993.
Sec. 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, Sec. 23, eff. Sept. 1,
1985.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 12,
eff. Sept. 1, 1993.
Sec. 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 or sale amount payable to the commissioner as a
special fee. The board may waive the special fee on land sales
to any state agency, board, commission, political subdivision, or
other governmental entity.
(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 accepting the
bid and completing the transaction.
(d) Checks submitted by unsuccessful bidders shall be returned
to the bidders.
Acts 1977, 65th Leg., p. 2380, ch. 871, art. I, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 405, ch. 81,
Sec. 21(n), eff. Sept. 1, 1983; Acts 1993, 73rd Leg., ch. 897,
Sec. 13, eff. Sept. 1, 1993.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 9, eff. June 19, 2009.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 10, eff. Aug. 31,
1987. Amended by Acts 1993, 73rd Leg., ch. 991, Sec. 8, eff.
Sept. 1, 1993; Acts 1997, 75th Leg., ch. 861, Sec. 1, eff. June
18, 1997.
Sec. 32.113. EXEMPTION FROM CERTAIN REAL ESTATE TRANSACTION
LAWS. (a) Unless the statute specifically states that the
statute applies to the board, the following statutes do not apply
to the board:
(1) a statute that would require the board to provide a notice
or disclosure to a buyer of real property; and
(2) a statute relating to the sale, purchase, or financing of
real property by an executory contract, including a contract for
deed or other similar sale.
(b) This section does not affect the application of a statute
described by Subsection (a)(2) to a party involved in a
transaction with the board.
Added by Acts 2007, 80th Leg., R.S., Ch.
234, Sec. 2, eff. May 25, 2007.
SUBCHAPTER E. CONDITIONS OF LEASES
Sec. 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, Sec. 24, eff. Sept. 1,
1985. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 14, eff.
Sept. 1, 1993.
Sec. 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, Sec. 24, eff. Sept. 1,
1985.
Sec. 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, Sec. 24, eff. Sept. 1,
1985.
Sec. 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, Sec. 24, eff. Sept. 1,
1985.
Sec. 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, Sec. 24, eff. Sept. 1,
1985.
Sec. 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, Sec. 24, eff. Sept. 1,
1985.
Sec. 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, Sec. 50, eff. Sept. 1,
1985.
SUBCHAPTER F. LEASE OF HIGHWAY LANDS
Sec. 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, Sec. 2, eff. June 8,
1985. Amended by Acts 1987, 70th Leg., ch. 948, Sec. 16, eff.
Sept. 1, 1987. Renumbered from Sec. 34.0511 by Acts 1987, 70th
Leg., ch. 167, Sec. 6.05(a), eff. Sept. 1, 1987. Amended by Acts
1987, 70th Leg., ch. 167, Sec. 6.05(c), (f)(1), (2), (g), eff.
Sept. 1, 1987.
Sec. 32.202. POOLING. Any oil and gas lease offered under Sec.
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, Sec. 3, eff. June 8,
1985. Renumbered from Sec. 34.0512 by Acts 1987, 70th Leg., ch.
167, Sec. 6.05(a), eff. Sept. 1, 1987. Amended by Acts 1987, 70th
Leg., ch. 167, Sec. 6.05(b), eff. Sept. 1, 1987; Acts 1991, 72nd
Leg., ch. 642, Sec. 3, eff. Aug. 26, 1991.
Sec. 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 a standard proration unit under
statewide field rules or, if applicable, the special field rules
adopted by the Railroad Commission of Texas for the field in
which the well has been completed. 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. 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, Sec. 3, eff. June 8,
1985. Renumbered from Sec. 34.0513 by Acts 1987, 70th Leg., ch.
167, Sec. 6.05(a), eff. Sept. 1, 1987. Amended by Acts 1987, 70th
Leg., ch. 167, Sec. 6.05(b), eff. Sept. 1, 1987.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 10, eff. June 19, 2009.
Sec. 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, Sec. 3, eff. June 8,
1985. Renumbered from Sec. 34.0514 by Acts 1987, 70th Leg., ch.
167, Sec. 6.05(a), eff. Sept. 1, 1987. Amended by Acts 1987, 70th
Leg., ch. 167, Sec. 6.05(b), (f)(3), eff. Sept. 1, 1987.
Sec. 32.205. RULES. The board may adopt rules to carry out the
provisions of this chapter.
Added by Acts 1985, 69th Leg., ch. 327, Sec. 3, eff. June 8,
1985. Renumbered from Sec. 34.0515 by Acts 1987, 70th Leg., ch.
167, Sec. 6.05(a), eff. Sept. 1, 1987. Amended by Acts 1987, 70th
Leg., ch. 167, Sec. 6.05(f)(4), eff. Sept. 1, 1987.
Sec. 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, Sec. 15, eff. Sept. 1,
1993.
Sec. 32.207. ADVERTISING FOR BIDS; POOLING. Section 52.076
applies to oil and gas under land owned by this state that was
acquired to construct or maintain a highway, road, street, or
alley in the same manner as that section applies to oil and gas
under a riverbed or channel.
Added by Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 11, eff. June 19, 2009.
SUBCHAPTER G. TRADE OF LAND
Sec. 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, Sec. 13.001(a), eff.
Sept. 1, 2003.
Sec. 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, Sec. 13.001(a), eff.
Sept. 1, 2003.
Sec. 32.253. PURPOSE OF TRADE. Land dedicated to or acquired
for the use and benefit of 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;
(3) create a buffer zone for the enhancement of already existing
public land, facilities, or amenities; or
(4) acquire land for the use and benefit of the permanent school
fund as determined by the board to be in the best interest of the
fund.
Added by Acts 2003, 78th Leg., ch. 1276, Sec. 13.001(a), eff.
Sept. 1, 2003.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
1175, Sec. 12, eff. June 19, 2009.
Sec. 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, Sec. 13.001(a), eff.
Sept. 1, 2003.
Sec. 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, Sec. 13.001(a), eff.
Sept. 1, 2003.
Sec. 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, Sec. 13.001(a), eff.
Sept. 1, 2003.
Sec. 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, Sec. 13.001(a), eff.
Sept. 1, 2003.