TX NATURAL RESOURCES CODE

SUBTITLE B. SURVEYS AND SURVEYORS

CHAPTER 53. MINERALS

SUBCHAPTER B. PROSPECT AND LEASE ON STATE LAND



§ 53.011. LAND SUBJECT TO PROSPECT.
     Any tract of land that belongs to the state, including islands, salt and freshwater lakes, bays, inlets, marshes, and reefs owned by the state within tidewater limits, the part of the Gulf of Mexico within the state's jurisdiction, unsold surveyed public school land, rivers and channels that belong to the state, and land sold with a reservation of minerals to the state are subject to prospect by any person for those minerals which are not subject to lease or permit under any other statute. A person may not prospect from a location within 2,500 feet of a military base, but prospectors may, from a location more than 2,500 feet from a base, look for minerals within the 2,500-foot strip.

Acts 1977, 65th Leg., p. 2469, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1987, 70th Leg., ch. 912, § 4, eff. Aug. 31, 1987; Acts 1987, 70th Leg., ch. 1061, § 4, eff. Aug. 31, 1987; Acts 2003, 78th Leg., ch. 149, § 14, eff. May 27, 2003.

§ 53.012. APPLICATION FOR RIGHT TO PROSPECT.
     (a) A person who desires to prospect land covered by this subchapter shall file an application with the commissioner designating the area to be prospected.
     (b) Each area covered by an application may not be in excess of 640 acres with a 10 percent tolerance for tracts, sections, and surveys that include more than 640 acres.
     (c) The commissioner may determine the contents of an application.

Acts 1977, 65th Leg., p. 2469, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 46, eff. Sept. 1, 1993.

§ 53.013. CONDITIONS OF PERMIT.
     (a) The commissioner may issue to the first applicant a permit to prospect the area designated in the applicant's application for a period up to one year from the date the application is filed. If the commissioner elects to grant the application for a permit to prospect under the provisions of this subchapter, the permit shall not be issued until after the land office receives the rental payment set by the commissioner.
     (b) After receipt of an additional rental payment set by the commissioner, the commissioner may extend the permit for a period of one year.
     (c) No permit may be extended for a period of more than five consecutive years from the date of its issuance.

Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1985, 69th Leg., ch. 923, § 19, eff. Aug. 26, 1985; Acts 1993, 73rd Leg., ch. 897, § 47, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 354, § 4, eff. Aug. 28, 1995.

§ 53.015. APPLICATION FOR LEASE.
     (a) At any time during the term of the permit, the permittee may file an application to lease the area or a designated portion of the area covered by the permit for the purpose of mining or producing the minerals covered by the permit.
     (b) An application to lease must designate the specific minerals the permittee is applying to lease. The commissioner may determine any additional information an application must contain.
     (c) If the area designated for lease in the application is less than the area covered by the permit, the applicant shall include with the application field notes prepared by the county surveyor or by a licensed state land surveyor describing the land designated.

Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1993, 73rd Leg., ch. 897, § 48, eff. Sept. 1, 1993.

§ 53.016. ISSUANCE OF LEASE.
     (a) After receipt of the bonus payment set by the commissioner, the lease shall be issued by the commissioner under the provisions of this subchapter and shall be for a primary term not to exceed 20 years and as long after that time as the minerals are produced in paying quantities.
     (b) Any lease covering land adjacent to a military base shall require the lessee to forego the right to use the surface within 2,500 feet of the military base while exploiting the minerals. The commissioner may include in the lease any other provision the commissioner considers necessary for protection of the interests of the state.

Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1, 1977. Amended by Acts 1983, 68th Leg., p. 5248, ch. 965, § 11, eff. June 19, 1983; Acts 1993, 73rd Leg., ch. 897, § 49, eff. Sept. 1, 1993; Acts 2003, 78th Leg., ch. 149, § 15, eff. May 27, 2003.

§ 53.018. ROYALTY.
     The royalty under the lease shall not be less than one-sixteenth of the value of the minerals produced under the lease.

Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1, 1977.

§ 53.019. PAYMENTS.
     Lease payments and royalty shall be paid to the commissioner at Austin, and all payments shall be credited to the account of the permanent school fund.

Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1, 1977.

§ 53.020. ASSIGNMENT AND TRANSFER.
     A lease issued under this subchapter may be transferred or assigned at any time in the manner provided by Section 52.026 of this code.

Acts 1977, 65th Leg., p. 2470, ch. 871, art. I, § 1, eff. Sept. 1, 1977. . Amended by Acts 1983, 68th Leg., p. 405, ch. 81, § 21(l), eff. Sept. 1, 1983; Acts 1993, 73rd Leg., ch. 897, § 50, eff. Sept. 1, 1993.

§ 53.021. FORFEITURE OF LEASE.
     (a) A lease is subject to forfeiture by act of the commissioner if:
          (1) the lessee fails or refuses to pay any amount which is due either as a lease payment or royalty;
          (2) the lessee or his authorized agent knowingly makes any false return or false report concerning the lease;
          (3) the lessee or his agent refuses the commissioner or his authorized representative access to the records or other data relating to operations under the lease; or
          (4) a material term of the lease is violated.
     (b) Any area forfeited under this section is subject to application for a permit under the same terms as the original application.

Acts 1977, 65th Leg., p. 2471, ch. 871, art. I, § 1, eff. Sept. 1, 1977.

§ 53.022. EFFECT OF SUBCHAPTER.
     None of the provisions of this subchapter shall apply to, alter, or affect any rights existing on June 22, 1955, under a valid permit issued by the commissioner under the provisions of Section 12, Chapter 271, General Laws, Acts of the 42nd Legislature, Regular Session, 1931, as amended (Article 5421c, Vernon's Texas Civil Statutes), but if the permittee desires that his lease continue as long as production is obtained in paying quantities, he shall pay lease payments and royalty provided in this subchapter.

Acts 1977, 65th Leg., p. 2471, ch. 871, art. I, § 1, eff. Sept. 1, 1977.

§ 53.023. IMMEDIATE LEASE.
     If the commissioner determines that a certain mineral is located on a state tract subject to prospect under this subchapter, a lease for that mineral may be issued immediately on the application for the prospect permit if the applicant identifies the mineral in the application and requests the immediate issuance of the lease.

Added by Acts 1985, 69th Leg., ch. 923, § 20, eff. Aug. 26, 1985.

§ 53.024. PENALTY AND INTEREST.
     A lease issued under this subchapter shall be subject to Sections 52.131(e) through (j) of this code.

Added by Acts 1985, 69th Leg., ch. 923, § 20, eff. Aug. 26, 1985. Amended by Acts 1993, 73rd Leg., ch. 897, § 51, eff. Sept. 1, 1993.

§ 53.025. LEASE RELINQUISHMENT.
     A lease issued under this subchapter may be relinquished to the state at any time in the manner provided by Section 52.027 of this code.

Added by Acts 1993, 73rd Leg., ch. 897, § 52, eff. Sept. 1, 1993.

§ 53.026. IN KIND ROYALTY.
     (a) The commissioner or the commissioner acting on behalf of and at the direction of the board or a board for lease may negotiate and execute a contract or any other instrument or agreement necessary to dispose of or enhance their portion of the royalty taken in kind, including contracts for sale, purchase, transportation, or storage.
     (b) The commissioner or the commissioner acting on behalf of and at the direction of the board or a board for lease may negotiate and execute a contract or any other instrument or agreement necessary to convert that portion of the royalty taken in kind to other forms of energy, including electricity.
     (c) This section shall not be construed to surrender or in any way affect the right of the state under an existing or future lease to receive monetary royalty from its lessee.

Added by Acts 1993, 73rd Leg., ch. 897, § 52, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 405, § 50, eff. Sept. 1, 1999.

§ 53.027. CONTRACTS AND AGREEMENTS.
     On the land office's written request, mailed to the lessee's address as shown on its lease or otherwise properly changed in conformity with the terms of the lease, a copy of a contract for the sale or processing of minerals leased under this subchapter and any subsequent agreement or amendment to the contract shall be filed in the land office within 30 days after the date the land office mails the written request. The land office shall treat a contract, agreement, or amendment filed in the land office as confidential unless otherwise authorized by the lessee.

Added by Acts 1993, 73rd Leg., ch. 897, § 52, eff. Sept. 1, 1993.

§ 53.028. AUDIT INFORMATION CONFIDENTIAL.
     (a) All information secured, derived, or obtained during the course of an inspection or examination of books, accounts, reports, or other records as provided by this code, a rule, or a lease provision is confidential and may not be used publicly, opened for public inspection, or disclosed, except for information in a lien filed under this chapter and except as permitted under Subsection (d) of this section.
     (b) All information made confidential in this section is not subject to subpoena directed to the commissioner, the attorney general, or the governor except in a judicial or administrative proceeding to which this state is a party.
     (c) The commissioner or the attorney general may use information made confidential by this section and contracts made confidential by Section 53.027 of this code to enforce this chapter or may authorize their use in judicial or administrative proceedings to which this state is a party.
     (d) This section does not prohibit:
          (1) the delivery of information made confidential by this section to the lessee or its successor, receiver, executor, guarantor, administrator, assignee, or representative;
          (2) the publication of statistics classified to prevent the identification of a particular audit or items in a particular audit;
          (3) the release of information that is otherwise available to the public; or
          (4) the release of information concerning the amount of royalty assessed as a result of an examination conducted under this code, a rule, or a lease provision or the release of other information that would have been properly included in reports required under this code, a rule, or a lease provision.

Added by Acts 1993, 73rd Leg., ch. 897, § 52, eff. Sept. 1, 1993.