HBA-SEP H.B. 3410 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3410
By: McReynolds
Land & Resource Management
4/18/2001
Introduced



BACKGROUND AND PURPOSE 

Vacant land is land that has never been surveyed and patented out of the
State of Texas.  As a result of antiquated technology and human error, some
patents from the Republic or the State of Texas were inaccurately surveyed
or the surveys did not describe the land to sufficiently locate it.  In
addition, the corners of some original surveys are marked by natural
objects such as trees or streams that have either disappeared or
significantly changed which makes it difficult to reconstruct original
patent lines.  Today, a vacancy finding generally disrupts what some view
as long established chains of title.  Several recent cases at the General
Land Office have involved individuals whose chain of title at the county
courthouse date back over 75 years, but because the land was never patented
out of the state the land is considered vacant. The current vacancy process
is lengthy, and expensive, and allows no time lines for action at the
beginning of the process.  House Bill 3410 simplifies and expedites the
vacancy determination process.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of the General Land
Office in SECTION 1 (Section 51.173, Natural Resources Code)  and the
School Land Board in SECTION 1 (Section 51.174, Natural Resources Code) of
this bill. 

ANALYSIS

House Bill 3410 amends the Natural Resources Code to repeal current law
regarding the sale and lease of vacant and unsurveyed public school land.
The bill sets forth provisions regarding the general powers and duties of
the commissioner of the General Land Office (commissioner) and the School
Land Board (board).  The commissioner is authorized to promulgate rules
necessary and convenient to the administration of these provisions.  The
board is required to adopt rules governing the terms and conditions for the
sale and lease of vacant land and authorized to adopt rules governing
mineral classification, royalty reservations, and awards of royalty
reservations and preferential rights to an applicant or good-faith claimant
(Secs. 51.173 and 51.174).   

The bill sets forth procedures for and content requirements of an
application to purchase or lease land claimed to be vacant and provides
that the commissioner set a filing fee in an amount not less than $100
(Sec. 51.175).  The commissioner is required to assign a file number to and
mark the date of filing on the application, accept any application that is
in compliance with this subchapter, and notify the applicant on acceptance
or rejection.  A rejected application is terminated (Sec. 51.176).    

Any person is authorized to apply for good-faith claimant status at the
time of filing or within 60 days after publication of required notices.
The bill stipulates that a declaration of good-faith claimant status is
solely within the discretion of the commissioner.  Such an application is
required to include certified copies of applicable county records
supporting such status.  The commissioner is required to declare whether
any person is a good-faith claimant and is authorized to consider any
relevant information. .  The declaration of good-faith claimant status
bestows a preferential right to purchase or lease the land (Sec. 51.177).
The bill provides that the applicant is required to identify necessary
parties and sets forth notification procedures (Sec. 51.178).  
 
The commissioner is authorized to recover state funds expended in
investigations and hearings held in regard to the sale and lease of
vacancies.  The commissioner is authorized to require the applicant to
submit a deposit, which must be tendered within 30 days, in an amount
sufficient to pay the costs of any required survey and investigation.  If
the amount deposited becomes insufficient, the commissioner may to make a
written request for a reasonably necessary supplemental deposit.  An
applicant is prohibited from challenging or appealing the amount of the
required deposits and refusal or failure to make the required deposits
terminates the application (Sec. 51.179).  After proceedings on an
application are concluded and all expenditures authorized are paid, the
commissioner is required to provide the applicant a complete statement of
all deposits and expenditures and is required to remit to the applicant any
balance remaining from the deposits made by the applicant (Sec. 51.180). 

The commissioner is authorized to appoint the county surveyor of the county
in which the alleged vacant land is located or a licensed state land
surveyor to investigate the applicant's claim, but the appointment of a
surveyor is not required. At least 30 days prior to initiation of the
appointed surveyor's on the ground work, the commissioner is required to
mail a notice of intention to survey to all necessary parties.  When the
fees and expenses are not provided by law, the commissioner is also
required to contract for fees and expenses reasonably necessary.  The
commissioner is authorized to rely on any survey conducted by a licensed
state land surveyor or a county surveyor and any documents or public
records required to determine whether a vacancy exists (Sec. 51.181).  

The appointed surveyor is required to file a written report of the survey
within 120 days after the appointment unless the commissioner extends the
time for filing the report (Sec. 51.182).  The commissioner is required to
serve a true copy of the survey report filed by the appointed surveyor on
each necessary party not later than the tenth business day after the survey
report is filed with the land office.  Any necessary party is authorized to
file exceptions to the appointed surveyor's report within 30 days of
receipt of the notice of completion.  If the commissioner does not appoint
a surveyor, the necessary parties are authorized to file exceptions to a
survey report filed by the applicant during a time established by the
commissioner.  Any exceptions are required to be filed with the land office
and a copy sent to each necessary party (Sec. 51.183).  The commissioner is
required to conduct an investigation into the applicant's claim that a
vacancy exists and is authorized to conduct a hearing.  The bill sets forth
provisions regarding notice and the scope of a hearing, scope of an
investigation, and the record of the investigation (Sec. 51.184).   

The commissioner is required to notify all necessary parties of the vacancy
determination and sets forth the contents of a vacancy determination order.
In determining the boundaries and size of a vacancy, the commissioner is
not restricted to any description of the land claimed to be vacant and is
required to adopt the description of a vacancy that best describes the
vacancy and is consistent with an applicable investigation.   Such a
determination is a final order and may be appealed within 90 days in the
district court in the county where the majority of the vacant land is
located.  The district court is authorized to allow an appeal after 90 days
by an interested person who did not receive any notice of a proceeding
(Secs. 51.185 and 51.186).   

The district court is required to conduct a de novo review of the
commissioner's final order determining that a vacancy exists.  The bill
authorizes the court to review the commissioner's declaration of good-faith
claimant status only in conjunction with review of a final order
determining that a vacancy exists.  A person who has a present legal
interest in the surface or mineral estate at the time of the filing of the
application or who acquires such interest prior to the commissioner's final
order is authorized to appeal the final order. A good-faith claimant who
has been notified by the commissioner that a vacancy has been found is
required to have a preferential right to purchase or lease the vacancy at
the price set by the board and subject to the royalty reservations provided
by the board.  The preferential right is authorized to be exercised after
final judicial determination or after the commissioner's final order when
the period for filing an appeal has expired.  If the good-faith claimant
does not apply for purchase or lease of the land within 120 days after the
preferential right can be exercised, then the preferential right expires.
If no good-faith claimant exercises the claimant's preferential right
within the time allowed, the applicant is required to have a preferential
right for 30 days thereafter to purchase or lease the vacancy.  The board
is required to award an applicant, other  than a good-faith claimant, a
perpetual nonparticipating royalty of not less than 1/32 nor more than 1/16
of the value of oil, gas, and sulphur and one percent of the value of all
geothermal and other minerals produced (Secs. 51.187-51.191).  

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001.