SECTION 155.43. Exploration and Mining Leases for Minerals Subject to Sealed Bid

(a) Lands subject to lease. PSF lands are subject to lease by sealed bid for the development of geothermal energy and related resources. See §155.40 of this title (relating to Definitions; Exploration and Development Guide) for lands that are subject to lease under these sealed bid procedures.

(b) Nomination, advertising, and award of tracts.

(1) Nominations, setting of terms and conditions, evaluation of sealed bids, advertising, and awards are administered by the SLB under Chapter 151 of this title (relating to Operations of the School Land Board).

(2) On land trade lands, the GLO will notify the surface owner that a lease has been issued if the surface owner requests such notice in writing by furnishing the GLO with a current mailing address and a legal description of each tract on which he desires such notice. Failure to receive notice will not affect the validity of a lease issued under this section.

(3) TPWD may review the leasing of lands whose minerals are subject to lease under this section but whose surface is owned or leased by TPWD or is subject to a conservation easement in favor of TPWD. If such lands are nominated for lease, the GLO shall notify the executive director of TPWD of such nomination. On the same day as a lease is issued on such lands, the TPWD will be notified of the issuance of the lease. Such lease will state that the surface of such land is owned or leased by TPWD or is subject to a conservation easement in favor of TPWD.

(c) Minimum terms and conditions.

(1) Terms and conditions of leases will be set by the SLB for each lease sale and will be included in the notice for bids.

(2) The royalty reserved to the state shall be not less than one-sixteenth of the value of the geothermal energy and related resources that may be produced.

(3) Upland leases issued under this section must include a provision requiring the payment of damages for the use of the surface in prospecting for, exploring, developing, or producing the leased minerals. The amount of damages for use of the surface will be included in the notice for bids and incorporated in each lease form.

(4) Lessee shall conduct all mining operations and reporting requirements in compliance with state and federal laws and §155.46 of this title (relating to Conduct of Exploration and Mining Operations).

(d) Assignments, releases, reports, inspections, forfeitures, and reinstatements. Leases issued under this section are subject to all general provisions covered in §155.47 of this title (relating to Assignments, Releases, Reports, Royalty Payments, Inspections, Forfeitures, and Reinstatements).

Source Note: The provisions of this §155.43 adopted to be effective November 15, 2000, 25 TexReg 11290