By Turner of Coleman H.B. No. 2477
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to authorizing the School Land Board to allow owners of
1-3 the soil to waive agency rights and to lease oil, gas, and other
1-4 minerals in, on, and under mineral classified lands.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. The Natural Resources Code is amended by adding
1-7 Section 52.190 to read as follows:
1-8 Sec. 52.190. LEASE BY OWNER OF THE SOIL. (a) An owner of
1-9 the soil of lands covered by this subchapter may lease such lands
1-10 for the purpose of exploring for and producing oil and gas in the
1-11 manner provided by this section.
1-12 (b) An owner of the soil may apply in writing to the board
1-13 for an oil and gas lease.
1-14 (c) The application shall contain the following:
1-15 (1) the name and address of the applicant;
1-16 (2) a complete legal description of the land applicant
1-17 seeks to lease;
1-18 (3) the name and address of every owner of the soil of
1-19 the land applicant seeks to lease, if the applicant is not the sole
1-20 owner of the soil;
1-21 (4) a brief letter opinion signed by an attorney
1-22 licensed in Texas setting out the surface ownership of the land
1-23 sought to be leased;
2-1 (5) a statement of the applicant's experience in oil
2-2 and gas exploration and production, including, without limitation,
2-3 the applicant's Railroad Commission operator number and a list of
2-4 any State of Texas or federal oil and gas leases held or operated
2-5 by the applicant or other entity in which applicant has or had a
2-6 significant interest during the five year period preceding the date
2-7 of the application; and
2-8 (6) a statement that applicant intends to explore for
2-9 and, if commercially reasonable, produce oil and gas, or, if
2-10 applicant plans that another person or firm shall conduct
2-11 exploration and production:
2-12 (A) the name and address of such person or firm;
2-13 (B) a description of such person or firm's
2-14 experience in oil and gas exploration and production, including,
2-15 without limitation, such person or firm's Railroad Commission
2-16 operator number and a list of any State of Texas or federal oil and
2-17 gas leases held or operated by such person or firm during the
2-18 five-year period preceding the date of the application;
2-19 (C) a description of applicant's intended degree
2-20 and type of participation in the exploration of and production from
2-21 the property, and all consideration or benefits the applicant
2-22 expects to receive in connection with the exploration of and
2-23 production from the property; and
2-24 (7) the amount of bonus, rental, royalty, and other
2-25 lease terms that applicant proposes to pay and/or offer for the
3-1 lease.
3-2 (d) The applicant shall provide geological, geophysical,
3-3 geochemical, and other data, or copies thereof, including
3-4 interpretative data, pertinent to mineral exploration on the lands
3-5 for which the application is made in applicant's possession or to
3-6 which applicant has reasonable access and which applicant has the
3-7 ability to provide. All such data shall be confidential and not
3-8 subject to the provisions of the Open Records Act, Government Code,
3-9 Ch. 552 until one year after the expiration, termination, or
3-10 forfeiture of a lease granted pursuant to this section. If a lease
3-11 is not issued the data shall be returned to the applicant.
3-12 (e) The board may prescribe the form of the application,
3-13 specify information required to be submitted in support of an
3-14 application, and, by rule, otherwise provide for the implementation
3-15 of this section.
3-16 (f) The staff of the General Land Office shall review the
3-17 information presented in the application, such other geological,
3-18 geophysical, and geochemical data reasonably available to it
3-19 relevant to the land proposed to be leased, and leasing information
3-20 reasonably available to it relevant to the land proposed to be
3-21 leased. The staff shall prepare a report to the board that
3-22 contains:
3-23 (1) a summary of bonus, rentals, royalties, and other
3-24 lease terms then being offered and asked for leases of similar
3-25 lands in the area of the land proposed to be leased;
4-1 (2) any factual data considered by the staff to be
4-2 relevant, including, but not limited to, data concerning the land
4-3 proposed to be leased and its estimated value for oil and gas
4-4 exploration and production, recommended lease terms, and the
4-5 applicant, including applicant's history of leasing State of Texas
4-6 or federal lands for oil and gas.
4-7 (g) The board shall consider the application at a regular
4-8 meeting. It may, in its sole discretion, grant or deny the
4-9 application, or grant the application subject to specified
4-10 conditions. Such conditions may include a requirement that if the
4-11 applicant does not materially participate in the exploration or
4-12 development of the leased premises, through labor performed, cash
4-13 or goods contributed, or supplying other enhancement in value, the
4-14 applicant must share equally with the permanent school fund any
4-15 benefit derived from the lease.
4-16 (h) After the board has approved an application, the
4-17 commissioner shall issue a lease to the applicant. The lease shall
4-18 conform, as nearly as is practicable, to the form of lease
4-19 prescribed by the board under Section 32.1071.
4-20 (i) The commissioner may not deliver a lease issued under
4-21 this section until the applicant has executed and delivered to the
4-22 commissioner a waiver of the applicant's right and duty to act as
4-23 agent for the state in leasing the leased premises, and to receive
4-24 any part of the bonus, rental, royalty, and other consideration
4-25 accruing to the owner of the soil under this subchapter. The
5-1 waiver and the lease shall be effective as of the date the
5-2 commissioner executes the lease.
5-3 (j) Upon the expiration, termination, or forfeiture of a
5-4 lease issued under this subsection, the agency rights and duties of
5-5 the applicant as owner of the soil are reinstated without the
5-6 necessity for further action by the owner of the soil, the board,
5-7 or the commissioner.
5-8 (k) If an applicant is not the sole owner of the soil, the
5-9 applicant may secure leases from the other owners of the soil from
5-10 which the applicant is not prohibited from leasing under Section
5-11 52.189 of this Code. If the applicant must obtain a lease from an
5-12 owner of the soil from whom the applicant would otherwise not be
5-13 permitted to lease in order reasonably to explore for and/or
5-14 produce oil or gas, the commissioner may approve such lease on the
5-15 condition that the applicant shall not receive any benefit
5-16 therefrom, and, if applicant should acquire by any method,
5-17 including devise or inheritance, the right to receive any rental,
5-18 royalty, or other benefit accruing to the owner of the soil's
5-19 interest under such lease, applicant shall assign such benefit to
5-20 the commissioner for the benefit of the permanent school fund.
5-21 (l) The commissioner shall not approve any lease obtained by
5-22 an applicant from another owner of the soil if the lease contains
5-23 terms that are substantially inconsistent with or provide for a
5-24 lesser bonus, rental, or royalty than the lease approved by the
5-25 board. If the bonus, rental, or royalty in a lease obtained by an
6-1 applicant from another owner of the soil for a comparable interest
6-2 is greater than that approved by the board, then the lease approved
6-3 by the board shall be amended to provide for such greater bonus,
6-4 rental, or royalty, and the applicant shall be liable for all such
6-5 greater sums due. In determining whether an interest is
6-6 comparable, the board shall consider the quantum of the interest,
6-7 the time at which the lease was taken, and any other aspects of the
6-8 lease transaction that the board considers to be relevant.
6-9 SECTION 2. The Natural Resources Code is amended by adding
6-10 Section 53.081 to read as follows:
6-11 Sec. 53.081. LEASE BY OWNER OF THE SOIL. (a) An owner of
6-12 the soil of lands covered by this subchapter may lease such lands
6-13 for the purpose of exploring for and producing minerals other than
6-14 oil and gas in the manner provided by this section.
6-15 (b) An owner of the soil may apply in writing to the board
6-16 for a lease of a mineral or minerals other than oil and gas.
6-17 (c) The application shall contain the following:
6-18 (1) the name and address of the applicant;
6-19 (2) a complete legal description of the land applicant
6-20 seeks to lease;
6-21 (3) the name and address of every owner of the soil of
6-22 the land applicant seeks to lease, if the applicant is not the sole
6-23 owner of the soil;
6-24 (4) a brief letter opinion signed by an attorney
6-25 licensed in Texas setting out the surface ownership of the land
7-1 sought to be leased;
7-2 (5) a statement of the applicant's experience in the
7-3 exploration for and production of minerals other than oil and gas,
7-4 including, without limitation, a list of any State of Texas or
7-5 federal mineral leases currently or previously held or operated by
7-6 the applicant or other entity in which applicant has or had a
7-7 significant interest during the five year period preceding the date
7-8 of the application;
7-9 (6) a statement that applicant intends to explore for
7-10 and, if commercially reasonable, produce minerals other than oil
7-11 and gas, or, if applicant plans that another person or firm shall
7-12 conduct exploration and production:
7-13 (A) the name and address of such person or firm
7-14 (B) a description of such person or firm's
7-15 experience in the exploration for and production of minerals other
7-16 than oil and gas, including, without limitation, a list of any
7-17 State of Texas or federal minerals other than oil and gas leases
7-18 currently or previously held or operated by such person or firm
7-19 during the five year period preceding the date of the application;
7-20 (C) a description of applicant's intended degree
7-21 and type of participation in the exploration of and production from
7-22 the property, and all consideration or benefits the applicant
7-23 expects to receive in connection with the exploration of and
7-24 production from the property; and
7-25 (7) the amount of bonus, rental, royalty, and other
8-1 lease terms that applicant proposes to pay and/or offer for the
8-2 lease.
8-3 (d) The applicant shall provide geological, geophysical,
8-4 geochemical, and other data, or copies thereof, including
8-5 interpretative data, pertinent to exploration for minerals other
8-6 than oil and gas on the lands for which the application is made in
8-7 applicant's possession or to which applicant has reasonable access
8-8 and which the applicant has the ability to provide. All such data
8-9 shall be confidential and not subject to the provisions of the Open
8-10 Records Act, Government Code, Ch. 552 until one year after the
8-11 expiration, termination, or forfeiture of a lease granted pursuant
8-12 to this section. If a lease is not issued, the data shall be
8-13 returned to the applicant.
8-14 (e) The board may prescribe the form of the application,
8-15 require such additional information as it considers appropriate, by
8-16 rule, and otherwise provide for the implementation of this section.
8-17 (f) The staff of the General Land Office shall review the
8-18 information presented in the application, such other geological,
8-19 geophysical, and geochemical data reasonably available to it
8-20 relevant to the land proposed to be leased, and leasing information
8-21 reasonably available to it relevant to the land proposed to be
8-22 leased. The staff shall prepare a report to the board that
8-23 contains:
8-24 (1) a summary of bonus, rentals, royalties, and other
8-25 lease terms then being offered and asked for leases of similar
9-1 lands in the area of the land proposed to be leased;
9-2 (2) any factual data considered by the staff to be
9-3 relevant, including, but not limited to, data concerning the land
9-4 proposed to be leased and its estimated value for minerals other
9-5 than oil and gas, recommended lease terms, and the applicant,
9-6 including applicant's history of leasing State of Texas or federal
9-7 lands for minerals other than oil and gas.
9-8 (g) The board shall consider the application at a regular
9-9 meeting. It may, in its sole discretion, grant or deny the
9-10 application, or grant the application subject to specified
9-11 conditions. Such conditions may include a requirement that if the
9-12 applicant does not materially participate in the exploration or
9-13 development of the leased premises, through labor performed, cash
9-14 or goods contributed, or supplying other enhancement in value, the
9-15 applicant must share equally with the permanent school fund any
9-16 benefit derived from the lease.
9-17 (h) After the board has approved an application, the
9-18 commissioner shall issue a lease to the applicant. The lease shall
9-19 conform, as nearly as is practicable, to the form of lease
9-20 prescribed by the commissioner under this chapter.
9-21 (i) The commissioner may not deliver a lease issued under
9-22 this section until the applicant has executed and delivered to the
9-23 commissioner a waiver of the applicant's right and duty to act as
9-24 agent for the state in leasing the leased premises, and to receive
9-25 any part of the bonus, rental, royalty, and other consideration
10-1 accruing to the owner of the soil under this subchapter. The
10-2 waiver and the lease shall be effective as of the date the
10-3 commissioner executes the lease.
10-4 (j) Upon the expiration, termination, or forfeiture of a
10-5 lease issued under this subsection, the agency rights and duties of
10-6 the applicant as owner of the soil are reinstated without the
10-7 necessity for further action by the owner of the soil, the board,
10-8 or the commissioner.
10-9 (k) If an applicant is not the sole owner of the soil, the
10-10 applicant may secure leases from the other owners of the soil from
10-11 which the applicant is not prohibited from leasing under Section
10-12 53.074 of this code. If the applicant must obtain a lease from an
10-13 owner of the soil from whom the applicant would otherwise not be
10-14 permitted to lease in order reasonably to explore for and/or
10-15 produce minerals other than oil or gas, the commissioner may
10-16 approve such lease on the condition that the applicant shall not
10-17 receive any benefit therefrom, and, if applicant should acquire by
10-18 any method, including devise or inheritance, the right to receive
10-19 any rental, royalty, or other benefit accruing to the owner of the
10-20 soil's interest under such lease, applicant shall assign such
10-21 benefit to the commissioner for the benefit of the permanent school
10-22 fund.
10-23 (l) The commissioner shall not approve any lease obtained by
10-24 an applicant from another owner of the soil if the lease contains
10-25 terms that are substantially inconsistent with or provide for a
11-1 lesser bonus, rental, or royalty than the lease approved by the
11-2 board. If the bonus, rental, or royalty in a lease obtained by an
11-3 applicant from another owner of the soil for a comparable interest
11-4 is greater than that approved by the board, then the lease approved
11-5 by the board shall be amended to provide for such greater bonus,
11-6 rental, or royalty, and the applicant shall be liable for all such
11-7 greater sums due. In determining whether an interest is
11-8 comparable, the board shall consider the quantum of the interest,
11-9 the time at which the lease was taken, and any other aspects of the
11-10 lease transaction that the board considers to be relevant.
11-11 SECTION 3. An owner of the soil may obtain a lease under the
11-12 provisions of this Act only after the effective date hereof, and
11-13 this Act shall not be construed to ratify or approve in any way the
11-14 acquisition by an owner of the soil, acting as agent for the State
11-15 of Texas, any interest not shared with the State of Texas, except
11-16 as expressly permitted by statute, in any lease covering or
11-17 purporting to cover any land subject to Subchapter F, Chapter 52,
11-18 Natural Resources Code.
11-19 SECTION 4. EMERGENCY. The importance of this legislation
11-20 and the crowded condition of the calendars in both houses create an
11-21 emergency and an imperative public necessity that the
11-22 constitutional rule requiring bills to be read on three several
11-23 days in each house be suspended, and this rule is hereby suspended.
11-24 SECTION 5. This Act shall be effective on and after
11-25 September 1, 1995.