CHAPTER 53. MINERALS
NATURAL RESOURCES CODE
TITLE 2. PUBLIC DOMAIN
SUBTITLE D. DISPOSITION OF THE PUBLIC DOMAIN
CHAPTER 53. MINERALS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 45,
eff. Sept. 1, 1993; Acts 1999, 76th Leg., ch. 1483, Sec. 3, eff.
Aug. 30, 1999.
SUBCHAPTER B. PROSPECT AND LEASE ON STATE LAND
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1987, 70th Leg., ch. 912, Sec. 4,
eff. Aug. 31, 1987; Acts 1987, 70th Leg., ch. 1061, Sec. 4, eff.
Aug. 31, 1987; Acts 2003, 78th Leg., ch. 149, Sec. 14, eff. May
27, 2003.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 46,
eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1985, 69th Leg., ch. 923, Sec. 19,
eff. Aug. 26, 1985; Acts 1993, 73rd Leg., ch. 897, Sec. 47, eff.
Sept. 1, 1993; Acts 1995, 74th Leg., ch. 354, Sec. 4, eff. Aug.
28, 1995.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 48,
eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 5248, ch. 965,
Sec. 11, eff. June 19, 1983; Acts 1993, 73rd Leg., ch. 897, Sec.
49, eff. Sept. 1, 1993; Acts 2003, 78th Leg., ch. 149, Sec. 15,
eff. May 27, 2003.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 405, ch. 81,
Sec. 21(l), eff. Sept. 1, 1983; Acts 1993, 73rd Leg., ch. 897,
Sec. 50, eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 20, eff. Aug. 26,
1985.
Sec. 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, Sec. 20, eff. Aug. 26,
1985. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 51, eff.
Sept. 1, 1993.
Sec. 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, Sec. 52, eff. Sept. 1,
1993.
Sec. 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, Sec. 52, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 50, eff.
Sept. 1, 1999.
Sec. 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, Sec. 52, eff. Sept. 1,
1993.
Sec. 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, Sec. 52, eff. Sept. 1,
1993.
SUBCHAPTER C. LEASE OF MINERALS BY SURFACE OWNER
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1987, 70th Leg., ch. 1061, Sec. 6,
eff. Aug. 31, 1987.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 2003, 78th Leg., ch. 149, Sec. 16,
eff. May 27, 2003.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1987, 70th Leg., ch. 1061, Sec. 7,
eff. Aug. 31, 1987; Acts 1999, 76th Leg., ch. 1483, Sec. 4, eff.
Aug. 30, 1999.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 5, eff. Aug. 31,
1987. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 53, eff.
Sept. 1, 1993; Acts 1995, 74th Leg., ch. 937, Sec. 4, eff. Sept.
1, 1995.
Sec. 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, Sec. 54, eff. Sept. 1,
1993.
Sec. 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, Sec. 54, eff. Sept. 1,
1993.
Sec. 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, Sec. 54, eff. Sept. 1,
1993. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 51, eff.
Sept. 1, 1999.
Sec. 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, Sec. 54, eff. Sept. 1,
1993.
Sec. 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, Sec. 54, eff. Sept. 1,
1993.
Sec. 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, Sec. 54, eff. Sept. 1,
1993.
Sec. 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, Sec. 3, eff. Sept. 1,
1995.
SUBCHAPTER D. UNITIZATION OF SULPHUR PRODUCTION
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 55,
eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 56,
eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 57,
eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 58,
eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 59,
eff. Sept. 1, 1993.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 1, eff.
Sept. 1, 1977.
Sec. 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, Sec. 60, eff. Sept. 1,
1993.
SUBCHAPTER E. LEASE OF PUBLIC SCHOOL AND GULF LAND FOR COAL,
LIGNITE, SULPHUR, SALT, AND POTASH
Sec. 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, Sec. 1, eff. April
3, 1979. Amended by Acts 1983, 68th Leg., p. 5245, ch. 965, Sec.
7, eff. June 19, 1983; Acts 2003, 78th Leg., ch. 149, Sec. 17,
eff. May 27, 2003; Acts 2003, 78th Leg., ch. 1276, Sec.
13.002(c), eff. Sept. 1, 2003.
Sec. 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, Sec. 1, eff. April
3, 1979. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 61, eff.
Sept. 1, 1993.
Sec. 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, Sec. 1, eff. April
3, 1979. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 62, eff.
Sept. 1, 1993.
Sec. 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, Sec. 1, eff. April
3, 1979. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 63, eff.
Sept. 1, 1993.
Sec. 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, Sec. 48, eff. Sept. 1,
1985. Amended by Acts 1987, 70th Leg., ch. 948, Sec. 32, eff.
Sept. 1, 1987; Acts 1993, 73rd Leg., ch. 897, Sec. 64, eff. Sept.
1, 1993; Acts 2003, 78th Leg., ch. 328, Sec. 9, eff. Jan. 1,
2004.
Sec. 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, Sec. 65, eff. Sept. 1,
1993.
SUBCHAPTER F. GEOPHYSICAL AND GEOCHEMICAL EXPLORATION PERMIT
Sec. 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, Sec. 2, eff.
Sept. 1, 1981. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 66,
eff. Sept. 1, 1993.
Sec. 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, Sec. 2, eff.
Sept. 1, 1981. Amended by Acts 1993, 73rd Leg., ch. 897, Sec. 67,
eff. Sept. 1, 1993.
Sec. 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, Sec. 2, eff.
Sept. 1, 1981. Amended by Acts 1985, 69th Leg., ch. 624, Sec. 49,
eff. Sept. 1, 1985.
Sec. 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, Sec. 32, eff. June 20,
2003.