CHAPTER 32. SCHOOL LAND BOARD

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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;

(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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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