| (a) Lands subject to lease.
(1) Any survey or portion of a survey of Relinquishment Act
land, as this term is uniquely defined in §155.40(a)(6) of this title
(relating to Definitions; Exploration and Development Guide), is subject to
lease under this section.
(2) All minerals are subject to lease by the surface owner
as agent for the state. For purposes of this section, minerals include all
substances commonly classified as minerals including geothermal energy and
related resources even though they may be extracted by methods that destroy
the surface. Minerals other than oil and gas may be leased together or separately.
Oil and gas must be leased under the terms of Chapter 9 of this title (relating
to Exploration and Leasing of State Oil and Gas).
(b) Authority and duties of agent. Authority and duties of
the owner of the soil are described in Texas Natural Resources Code §53.074
(Authority and Duties of Agent). The owner of the soil may lease Relinquishment
Act land pursuant to Texas Natural Resources Code §53.081.
(c) Lease negotiation procedure.
(1) The surface owner is authorized to act as the state's leasing
agent with any person, firm, or corporation desiring to develop PSF lands
for geothermal energy and related resources.
(2) The lease shall be negotiated by the surface owner and
the prospective lessee on a form prepared and furnished by the GLO, which
will incorporate the terms and conditions prescribed by the SLB.
(3) The proposed lease shall be submitted to the GLO for approval
prior to recording the lease in the county records.
(d) Approval and filing of lease.
(1) The SLB may reject or refuse for filing any lease deemed
not in the best interest of the state.
(2) Upon rejection of a proposed lease by the SLB, the prospective
lessee will be given written notice which will specify the reasons for the
rejection and any changes, deletions, or additions which would render the
lease acceptable.
(3) Upon receipt of approval of the lease, the prospective
lessee shall finalize the lease and have the lease recorded in the county
or counties in which the land lies and shall file a certified copy of the
lease with the GLO. Leases are not effective until approved and filed in the
GLO.
(4) The state's share of the approved bonus payment and the
filing fee prescribed by §1.3 of this title (relating to Fees) shall
be submitted along with the certified copy of the lease. Any lease is void
unless it recites the actual consideration paid or promised for the lease.
(5) A surface owner, as the state's agent, owes the state a
fiduciary duty. This fiduciary responsibility must be of paramount concern
when a surface owner enters lease negotiations.
(e) Lease terms and conditions.
(1) Lessee shall pay bonus, rentals, royalties, and other lease
considerations as follows.
(A) On leases executed before September 1, 1987, lessee shall
pay to the state 60% of all bonuses, rentals, and royalties and other considerations
agreed upon. Lessee shall pay to the surface owner 40% of all consideration
agreed upon.
(B) On leases executed on or after September 1, 1987, lessee
shall pay to the state 80% of all consideration agreed upon. Lessee shall
pay to the surface owner 20% of all consideration agreed upon.
(2) In the event of production, the state must receive not
less than one-sixteenth of the value of the geothermal energy and related
resources produced. The combined royalty payable to the surface owner and
the state will be expressly provided for in the lease negotiated by the surface
owner.
(3) All royalties and other payments accruing to the state
shall be paid to the state through the commissioner at Austin, and shall be
deposited to the PSF.
(f) Reports, assignments, releases, inspection, forfeitures,
and reinstatements. Leases issued under this section will be governed by all
general provisions found in §155.46 of this title (relating to Conduct
of Exploration and Mining Operations) and §155.47 of this title (relating
to Assignments, Releases, Reports, Royalty Payments, Inspections, Forfeitures,
and Reinstatements). However, a lease issued under this section cannot be
assigned to the surface owner who executed the lease.
(g) Leasing procedure when agent cannot be located. If a potential
lessee cannot locate a surface owner, such lessee can follow the procedures
set out in the Texas Natural Resources Code, §52.186. Once these procedures
have been followed, Relinquishment Act land will be leased for minerals other
than oil and gas through the prospect permit and leasing procedures found
in §155.41 of this title (relating to Prospect Permits on State Lands)
and §155.42 of this title (relating to Mining Leases on Properties Subject
to Prospect). The state will receive all the consideration paid under such
a lease.
(h) Leasing procedure when agent's rights are forfeited.
(1) When a surface owner's agency rights have been forfeited,
the land shall be subject to lease for minerals other than oil and gas under
the procedures set out in §155.40 of this title (relating to Definitions;
Exploration and Development Guide) and §155.41 of this title (relating
to Prospect Permits on State Lands).
(2) When a new lease is executed under subsection (h)(1) of
this section, the surface owner shall not be entitled to any share of the
revenue generated by such lease, but the surface owner's agency rights will
be ipso facto reinstated upon expiration of the new lease.
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