H.B. No. 3461
AN ACT
relating to the powers and duties of the School Land Board and the
commissioner of the General Land Office.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 32.001(4), Natural Resources Code, is
amended to read as follows:
(4) "Land" means:
(A) land dedicated to or acquired on behalf of
the permanent school fund and the asylum funds under [by] 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;
(C) the mineral estate in river beds and
channels; and
(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.
SECTION 2. Section 32.002, Natural Resources Code, is
amended by amending Subsections (a) and (b) and adding Subsections
(a-1) and (f) to read as follows:
(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, [of this code,] commonly known as the Relinquishment
Act, and Subchapters B and C, Chapter 53[, of this code];
(4) [oil and gas underlying land owned by the state
that was acquired to construct or maintain a highway, road, street,
or alley, which is located in a producing area, unless the oil or
gas is leased for the specific purpose of drilling a horizontal
well;
[(5) oil and gas underlying land owned by the state
that was acquired to construct or maintain a highway, road, street,
or alley if the Texas Transportation Commission has determined that
such right-of-way is no longer needed for use by citizens as a road
pursuant to Section 202.021, Transportation Code;
[(6)] land owned by the [Texas] Parks and Wildlife
Department; or
(5) [(7)] 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) [Subsection (a)(4) of
this section], 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 [as of
January 1, 1985].
(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.
SECTION 3. Subchapter A, Chapter 32, Natural Resources
Code, is amended by adding Section 32.003 to read as follows:
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.
SECTION 4. Section 32.016(a), Natural Resources Code, is
amended to read as follows:
(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 [in the land office].
SECTION 5. Section 32.061, Natural Resources Code, is
amended to read as follows:
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
[surveyed] land [dedicated to the permanent school fund], 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 [of the contract for] 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.
SECTION 6. Section 32.102, Natural Resources Code, is
amended to read as follows:
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.
SECTION 7. Section 32.105, Natural Resources Code, is
amended to read as follows:
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 [the] month in
which the board meets; or
(2) any date on which the board has a special meeting.
SECTION 8. Sections 32.107(a), (b), and (c), Natural
Resources Code, are amended to read as follows:
(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 [advertised to be opened].
(c) The notice shall state that land is to be offered for
sale, 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 [that] a person may obtain additional information
concerning [publications from the land office that describe] the
land offered for sale, lease, or commitment to a contract for
development.
SECTION 9. Sections 32.110(a) and (c), Natural Resources
Code, are amended to read as follows:
(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.
(c) Failure to pay the special fee shall not void a bid, but
the commissioner shall demand payment of the fee before accepting
the bid and completing the transaction [a lease is issued to the
best bidder. If the best bidder fails or refuses to make the
payment within 30 days after demand by the commissioner, the bidder
is not entitled to a sale of or a lease on the tract covered by that
bid and the cash bonus shall be automatically forfeited to be
deposited by the commissioner in the State Treasury to the credit of
the permanent school fund or the appropriate special mineral fund.
The board, at its option, may offer the tract for sale or lease to
the next best bidder under the same terms as submitted by and as
would have been granted to the best bidder].
SECTION 10. Section 32.203, Natural Resources Code, is
amended to read as follows:
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 [the] 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 [surrounding] the
[draining] 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 [causing the drainage or from the well
located within 2,500 feet of the leased premises and completed in a
producible reservoir under the state lease]. 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.
SECTION 11. Subchapter F, Chapter 32, Natural Resources
Code, is amended by adding Section 32.207 to read as follows:
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.
SECTION 12. Section 32.253, Natural Resources Code, is
amended to read as follows:
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; [or]
(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.
SECTION 13. Section 51.001, Natural Resources Code, is
amended by amending Subdivision (8) and adding Subdivision (12) to
read as follows:
(8) "Surveyed land" means all or part of any tract of
land surveyed either on the ground or by protraction and dedicated
to or acquired on behalf of the public school fund which is unsold
and for which field notes are on file in the land office or that may
be delineated on the maps of that office as such.
(12) "Sovereign land" means land that has not been
sold and severed by the sovereign.
SECTION 14. The heading to Section 51.013, Natural
Resources Code, is amended to read as follows:
Sec. 51.013. CLASSIFICATION [AND VALUATION] OF LAND.
SECTION 15. Section 51.013(b), Natural Resources Code, is
amended to read as follows:
(b) After the classification [and determination of market
value] is entered on the records of the land office, no further
action needs to be taken by the commissioner and no notice is
required to be given to the county clerk for the classification [and
determination of market value] to be effective.
SECTION 16. Section 51.014, Natural Resources Code, is
amended to read as follows:
Sec. 51.014. RULES. [(a)] The commissioner may adopt
rules necessary to carry out the provisions of this chapter and may
alter or amend the rules to protect the public interest.
[(b) Before rules are adopted under Subsection (a) of this
section, the commissioner shall submit the rules to the governor
for his approval.]
SECTION 17. Sections 51.052(e), (f), (g), (i), and (k),
Natural Resources Code, are amended to read as follows:
(e) The owner of land that surrounds [land in] a tract of
land approved for sale by the board shall have a preference right to
purchase the tract before the land is made available for sale to any
other person, provided the person having the preference right pays
not less than the market value for the land as determined by the
board and the board finds use of the preference to be in the best
interest of the state. The board shall adopt rules to implement
this preference right.
(f) If the surrounding land is owned by more than one
person, the owners of land with a common boundary with a tract of
land approved [1,200 acres or less that is] for sale by the board
shall have a preference right to purchase the tract before it is
made available to any other person, provided the person with the
preference right pays not less than the market value of the land as
determined by the board and the board finds use of the preference to
be in the best interest of the state. The board shall adopt rules to
implement this preference right.
(g) If land is located within the boundaries of or adjacent
to any state park, refuge, natural area, or historical site subject
to the management and control of the Parks and Wildlife Department,
the department has a preference right to purchase the land before it
is made available [for sale] to any other person. A sale to the
department under this section may not be for less than the market
value of the land, as determined by the board.
(i) If no bid meeting minimum requirements is received for a
tract of land offered at a sealed bid sale under Subchapter D of
Chapter 32, or if the transaction involves commercial real estate
and the board determines that it is in the best interest of the
permanent school fund, the asset management division of the land
office may solicit proposals or negotiate a sale, exchange, or
lease of the land to any person. [The asset management division
may contract for the services of a real estate broker or of a
private brokerage or real estate firm to assist in a transaction
under this subsection.] The board must approve any negotiated
sale, exchange, or lease of any land under this section.
(k) The [If an award of a bid under this section does not
result in a final transaction, the] asset management division of
the land office may contract for the services of a real estate
broker or of a private brokerage or real estate firm to assist in
any sale, lease, or exchange of land under this subchapter [the real
estate transaction].
SECTION 18. Section 51.056, Natural Resources Code, is
amended to read as follows:
Sec. 51.056. APPLICATION OR REQUEST TO PURCHASE LAND.
[(a)] A person who wants to purchase public school land shall
submit to the commissioner a [separate] written application or
request in a form designated by the commissioner [for each tract].
[(b) Each application shall:
[(1) designate the land to be purchased;
[(2) state the bid offered;
[(3) include an affidavit disclosing the names of all
persons or entities either directly or indirectly interested in the
purchase of the land.
[(c) The sale of the land is effective from the date of the
receipt and filing of the application, affidavit, obligation, and
the payment of the initial portion of the price offered.
[(d) The application to purchase and the notice of award
shall state that the land is sold without condition of settlement
and with a reservation of minerals, as determined by the board.]
SECTION 19. Section 51.066, Natural Resources Code, is
amended to read as follows:
Sec. 51.066. LAND [NOTICE OF] AWARD. (a) The commissioner
shall prepare and issue a land [notice of] award for each tract of
sovereign land sold.
(b) Each land [notice of] award shall be appropriately
numbered and shall be worded in a manner that will constitute a
receipt for the first or full payment after it is signed by the
commissioner.
(c) One copy of the land [notice of] award shall be retained
in the land office and the other copy shall be sent to the
purchaser.
SECTION 20. The heading to Section 51.070, Natural
Resources Code, is amended to read as follows:
Sec. 51.070. UNPAID PRINCIPAL [AND INTEREST] ON PUBLIC
SCHOOL LAND SALES.
SECTION 21. Sections 51.070(a) and (b), Natural Resources
Code, are amended to read as follows:
(a) Unpaid and delinquent principal [and interest] on sales
of public school land shall bear interest at a rate set by the
board, which principal and interest shall be payable at the times
and on such terms as are established by the board [by rule or by
contract].
(b) No patent may be issued for any public school land until
all [unpaid] principal, accrued [and compounded] interest, late
charges, and other fees and expenses are [is] paid in full [to the
time of issuing the patent].
SECTION 22. Section 51.071, Natural Resources Code, is
amended to read as follows:
Sec. 51.071. FORFEITURE OF LAND. (a) If principal,
accrued [and] interest, late charges, and other fees and expenses
on a sale of sovereign land are [is] not paid when due as required by
the terms set by the board, the land is subject to forfeiture by the
commissioner by entry on the file [wrapper] containing the papers
"Land Forfeited" or similar words, the date of the forfeiture, and
the official signature of the commissioner.
(b) After the entry is made on the file [wrapper], the land
and all payments that have been made for it are forfeited to the
state, and the land may be resold in accordance with the provisions
of this subchapter [offered for sale on a subsequent sale date].
SECTION 23. Section 51.073, Natural Resources Code, is
amended to read as follows:
Sec. 51.073. CLASSIFICATION AND SALE OF LEASED AND
FORFEITED LAND. [(a)] Before it is sold, the commissioner shall
classify and determine the market value of land on which leases have
expired and land forfeited to the state.
[(b) Except as provided in Section 51.064 of this code, no
land may be sold until it is advertised.]
SECTION 24. Section 51.086(a), Natural Resources Code, is
amended to read as follows:
(a) All sales of escheated land that is a part of the
permanent school fund must be made [to the highest bidder] at a
price that may not be less than [the greater of $2.50 an acre or] the
minimum price set by the court under Section 71.107, Property Code,
and in the same manner as the sale of public school land as provided
by this chapter.
SECTION 25. Sections 51.172(4) and (7), Natural Resources
Code, are amended to read as follows:
(4) "Necessary party" means:
(A) an applicant or good-faith claimant whose
present legal interest in the surface or mineral estate of the land
claimed to be vacant may be adversely affected by a vacancy
determination;
(B) a person who asserts a right to or who claims
an interest in land claimed to be vacant;
(C) a person who asserts a right to or who claims
an interest in [land claimed to be vacant or in] land adjoining land
claimed to be vacant as shown in the records of the land office or
the county records, including tax records, of any county in which
all or part of the land claimed to be vacant is located;
(D) a person whose name appears in the records
described by Paragraph (C); or
(E) an attorney ad litem appointed under Section
51.180.
(7) "Vacancy application" means a form submitted to
the commissioner by an applicant to:
(A) initiate a determination by the commissioner
whether land claimed to be vacant is vacant; and
(B) purchase [vacant land;] or
[(C)] lease vacant land.
SECTION 26. Section 51.177(a), Natural Resources Code, is
amended to read as follows:
(a) Not later than the 45th day after the date the
commissioner accepts [applicant files] the duplicate copies as
properly filed by the applicant [with the commissioner] as provided
by Section 51.176(f), the commissioner shall:
(1) determine whether the vacancy application is
administratively complete; and
(2) provide to the applicant the notice required by
this section.
SECTION 27. Section 51.180, Natural Resources Code, is
amended to read as follows:
Sec. 51.180. ATTORNEY AD LITEM. (a) If the [The]
applicant cannot [must] provide evidence to the commissioner to
establish the applicant's ownership of all interests as defined by
Section 51.172 in the land surrounding the land claimed to be
vacant, the commissioner shall investigate the ownership interests
of the land claimed to be vacant and the surrounding land to ensure
that all necessary parties have been identified and located.
(b) The investigation must conclude not later than the 60th
day after the application commencement date. If the investigation
yields any [applicant fails to provide sufficient] evidence that a
necessary party may not have been identified and located, as
determined by the commissioner, the commissioner shall, not later
than the 30th day after the conclusion of the investigation
[application commencement date], appoint an attorney ad litem to [:
[(1)] identify and locate all necessary parties
[; and
[(2) represent the interests of any necessary party
that has not been located].
(c) The commissioner shall provide the attorney ad litem
with all documents submitted by the applicant and the results of the
investigation to identify necessary parties, and the attorney ad
litem shall search public land records and other available records
to identify and locate necessary parties.
(d) If any necessary party cannot be located, the attorney
ad litem shall represent the interests of that necessary party.
SECTION 28. Sections 51.181(a) and (b), Natural Resources
Code, are amended to read as follows:
(a) Not later than the 30th day after the application
commencement date, and at any time after that date that the
commissioner considers it necessary to notify an identified
necessary party, the commissioner shall provide to each necessary
party identified and located as of that date a written notice that:
(1) informs the necessary party that a vacancy
application has been filed;
(2) states the application commencement date; and
(3) includes:
(A) a copy of the vacancy application and any
attachments; and
(B) a form for requesting subsequent notices
regarding the application.
(b) If the attorney ad litem is unable to locate an
identified [identify each] necessary party, the attorney ad litem
shall notify the commissioner in writing, and the commissioner
[applicant] shall provide notice required under this section by
publication in the same manner prescribed by the Texas Rules of
Civil Procedure.
SECTION 29. Section 51.187(a), Natural Resources Code, is
amended to read as follows:
(a) If the commissioner has not issued a final order with a
finding of "Not Vacant Land" on or before the first anniversary of
the application commencement date and one or more exceptions have
been filed under Section 51.182(a) or 51.186(b), the commissioner
shall order a hearing to determine if a vacancy exists. A hearing
under this subchapter:
(1) shall be held not later than the 60th day after the
date the hearing is ordered;
(2) shall be conducted as a contested case hearing
subject to Chapter 2001, Government Code; and
(3) may be waived by written agreement of all
necessary parties and the commissioner.
SECTION 30. Section 51.188(a), Natural Resources Code, is
amended to read as follows:
(a) At any time during or after an investigation of or
hearing regarding a vacancy application, the commissioner may
determine that land claimed to be vacant is not vacant and issue a
final order with a finding of "Not Vacant Land[.]" or an order
finding a vacancy if a hearing is not required under Section 51.187.
SECTION 31. Section 51.194, Natural Resources Code, is
amended by amending Subsection (a) and adding Subsections (a-1) and
(a-2) to read as follows:
(a) A good-faith claimant who has been notified by the
commissioner that a vacancy exists under this subchapter has a
preferential right to purchase or lease the interest claimed in the
land before the land was declared vacant. The preferential right
may be exercised after a final judicial determination or after the
commissioner's final order and the period for filing an appeal has
expired.
(a-1) If a good-faith claimant does not apply to purchase or
lease the interest before the later of the 121st day after the date
the commissioner's order becomes final or the 60th day after the
date of the final judicial determination of an appeal under this
subchapter, then the good-faith claimant's preferential right
expires.
(a-2) If a good-faith claimant does not close a transaction
to purchase or lease the interest before the 121st day after the
date the terms and conditions are determined by the board, then the
good-faith claimant's preferential right expires.
SECTION 32. Section 61.021, Natural Resources Code, is
amended by adding Subsection (c) to read as follows:
(c) Any requirement to keep a beach open for vehicular
traffic under this subchapter or rules adopted under this
subchapter does not apply to a beach or segment of a beach within
3,100 feet of a natural science laboratory in a county with a
population of 40,000 or less.
SECTION 33. The following provisions of the Natural
Resources Code are repealed:
(1) Section 32.103;
(2) Section 51.052(a);
(3) Section 51.057;
(4) Section 51.058;
(5) Section 51.059;
(6) Section 51.060;
(7) Section 51.061;
(8) Section 51.062;
(9) Section 51.063;
(10) Section 51.064;
(11) Section 51.068;
(12) Section 51.084; and
(13) Section 51.086(b).
SECTION 34. Sections 32.002 and 32.203, Natural Resources
Code, as amended by this Act, and Section 32.207, Natural Resources
Code, as added by this Act, do not authorize:
(1) any person, including this state or a local
government, to claim damages relating to production from a legally
permitted and legally producing well the drilling of which was
commenced before the effective date of this Act; or
(2) a state or local taxing authority to reallocate
liability for severance or ad valorem taxes or increase the amount
of those taxes imposed based on production from or the value
attributable to production from a legally permitted and legally
producing well the drilling of which was commenced before the
effective date of this Act.
SECTION 35. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3461 was passed by the House on April
30, 2009, by the following vote: Yeas 144, Nays 0, 1 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 3461 on May 29, 2009, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 3461 on May 31, 2009, by the following vote: Yeas 143,
Nays 1, 1 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3461 was passed by the Senate, with
amendments, on May 25, 2009, by the following vote: Yeas 30, Nays
1; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
3461 on May 31, 2009, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor