31 Tex. Admin. Code § 10.8 - Assignments, Releases, Reports, Royalty Payments, Inspections, Forfeitures, and Reinstatements
(a)
Assignments and releases.
(1) A lease or
permit issued under this chapter may be assigned at any time, unless otherwise
stated in the lease or permit, in the manner provided for by TNRC §52.026. The
liability of the transferor to properly discharge its obligations under the
lease shall pass to the transferee. The commissioner may require the transferee
to demonstrate that it has the financial responsibility to properly discharge
its obligations under the lease, and may require the transferee to post a bond
or provide other security to secure those obligations.
(2) After recordation, lessee or permittee
shall obtain a certified copy from the county clerk of each recorded assignment
covering the state lease or permit. Lessee or permittee shall send such
certified copies to GLO within 90 days of the date of recordation, accompanied
by the filing fee prescribed in §
3.31 of this title (relating to
Fees).
(3) An assignment of any
lease except a state agency or a Relinquishment Act lease is not effective
until a certified copy of such assignment has been filed by the GLO. Failure to
file a certified copy of an assignment of any lease, including a state agency
or a Relinquishment Act lease, shall subject the lease to forfeiture. An
assignment shall not have the effect of releasing the assignor from any
liability incurred or claim previously accrued in favor of the state.
(4) The lessee or permittee may release the
lease or permit back to the state at any time. To release a lease or permit, a
lessee or permittee must record the release in each county where the state
tract is located and mail a certified copy of each recorded release to GLO
accompanied by the filing fee prescribed in §
3.31 of this title (relating to
Fees).
(5) A release is not
effective until a certified copy of the release is filed by the GLO. A release
shall not have the effect of releasing lessee or permittee from any liability
incurred or claim previously accrued in favor of the state.
(b) Reports and payment of
royalties.
(1) A log, sample analysis, or
other information obtained from each test drilled on the area covered by the
lease or permit shall be filed with the GLO. Lessee or permittee shall furnish
annually on the anniversary date of the lease or permit a map or plat showing
all activities on the state lease or permit. In addition, an evaluation map or
plat shall be filed in the GLO within 90 days after any drilling program shall
have been completed or abandoned, and the correctness of such map shall be
sworn to by lessee or permittee or his representative. The map or plat shall
show geologic formations penetrated, the depth, thickness, grade, and mineral
character of all ore bodies, the water-bearing strata, the elevation and
location of all test holes, and other pertinent information.
(2) Unless the lease provides otherwise, on
or before the last day of the month after the month when production started,
the lessee shall file a production and royalty report showing production and
royalty for the calendar month when production started. Subsequently, a
production and royalty report shall be filed before the last day of each month
for production from the preceding calendar month. If more than one mineral is
produced under the lease, the GLO may require a production and royalty report
for each mineral. Such report shall be on a form prescribed and furnished by
the GLO and shall show:
(A) the type and
amount of each mineral produced during the preceding month;
(B) if any leased mineral has been sold
during the preceding month, then:
(i) the
type and amount of each mineral sold;
(ii) the purchaser for each type of mineral
sold and if the purchaser is in any way related to the lessee, the details of
such relationship or affiliation;
(iii) the selling price of each mineral as
shown by copies of smelter, mint, mill, or refinery, returns, sale receipts,
invoices, or other sale documents attached thereto; and
(iv) the method and figures used by lessee to
calculate the value of each mineral sold as shown by any relevant documents,
records, or schedules;
(C) if any leased mineral has been used as
permitted under the terms of the lease during the preceding month, then:
(i) the type and amount of each mineral used;
and
(ii) the method and figures
used by lessee to calculate the value of each mineral used as shown by any
relevant documents, records, or schedules.
(3) The commissioner may require the lessee
to install and use any reasonable method of measuring the amount of minerals
reported as mined or produced or sold from the leased premises.
(4) Unless otherwise provided by the lease,
royalty payments are to be received in the GLO on or before the last day of the
month following the month in which leased minerals are produced. However, for
the purposes of this paragraph only, "produced" shall mean actually sold or
used by lessee. Upon termination, forfeiture, or release of the lease, unpaid
royalty for any stockpiled leased minerals shall be due and payable within one
month of the effective date of said termination, forfeiture, or
release.
(5) Except when royalty is
taken in-kind, and subject to subparagraphs (A) - (F) of this paragraph,
relating to electronic funds transfer, lessees may pay royalties and other
monies due by cash or check, money order, or sight draft made payable to the
commissioner. Lessees may also pay by electronic funds transfer or in any
manner that may be lawfully made to the state comptroller. Information
regarding alternative payment methods may be obtained from the GLO Royalty
Management Division. Payors are required to make payments by electronic funds
transfer in compliance with 34 Texas Administrative Code Chapter 15 in the
following circumstances:
(A) For leases
executed or amended after May 11, 1989, but before September 1, 1991, payors
that have made over $500,000 in a category of payments, defined in subparagraph
(D) of this paragraph, to the GLO during the preceding state fiscal year shall
make payments of $10,000 or more in the current fiscal year for those leases
and in that category by electronic funds transfer.
(B) For leases executed or amended after
August 30, 1991, but before June 9, 1995, payors that have made over $250,000
in a category of payments, defined in subparagraph (D) of this paragraph, to
the GLO during the preceding state fiscal year shall make payments of $10,000
or more in the current fiscal year for those leases and in that category by
electronic funds transfer.
(C) For
leases executed or amended on or after June 9, 1995, payors that have made over
$25,000 in a category of payments, defined in subparagraph (D) of this
paragraph, to the GLO during the preceding state fiscal year shall make all
payments in the current fiscal year for those leases and in that category by
electronic funds transfer.
(D) For
purposes of subparagraphs (A) - (C) of this paragraph, each of the following is
a separate category of payments:
(i)
royalties (including shut-in and minimum royalties);
(ii) penalties and interest (A lease issued
under TNRC Chapter 53, Subchapter C, shall be subject to penalties and interest
as described in TNRC §52.131(e) - (j));
(iii) other payments to the state agency,
excluding interest and extraordinary payments such as payments made in
settlement of litigation.
(E) The GLO anticipates that those payors
that have exceeded the threshold sums set out in subparagraphs (A) - (C) of
this paragraph in the preceding state fiscal year will also exceed those sums
in the current state fiscal year. The application of subparagraphs (A) - (C) of
this paragraph to a specific payor may be waived at the commissioner's
discretion to the extent allowed by law, upon a showing that a payor will not
exceed the threshold sums set out in subparagraphs (A) - (C) of this paragraph
in the current fiscal year, or for other good cause.
(F) The GLO will notify each payor to whom
this paragraph applies in compliance with 34 Texas Administrative Code Chapter
15.
(c)
Inspections.
(1) The books, accounts, records,
contracts, and other documents pertaining to production, transportation, sale,
and marketing of minerals leased shall at all times be subject to inspection
and examination by the commissioner, or his authorized representative, and
copies of such records shall be furnished to the commissioner upon
request.
(2) All mining, milling,
and processing operations shall be subject at any time to inspection by the
commissioner or his authorized representative and copies of records or other
documents pertaining to these operations shall be furnished to the commissioner
upon written request.
(3) A
contract, agreement or amendment filed in the land office shall be treated as
confidential unless otherwise authorized by the lessee.
(d) Forfeiture and reinstatement.
(1) If the owner of a lease or permit shall
fail or refuse to make payment of any sum due, or if the owner or his
authorized agent should knowingly make any false return or false report
concerning the lease or permit, or if the owner or his agent should refuse the
commissioner or his authorized representative access to the records or other
data pertaining to operations under the lease or permit, or if any of the
material terms of the lease or permit should be violated, the lease or permit
shall be subject to forfeiture by the commissioner.
(2) A lease or permit shall be considered
forfeited when it has been endorsed "forfeited" and the endorsement signed by
the commissioner.
(3) Upon
forfeiture, the commissioner will give written notice to the lessee or
permittee stating the date of forfeiture and the reasons for the forfeiture.
The notice of forfeiture will be sufficient if mailed to the last known address
of the lessee or assignee shown of record in the GLO.
(4) A forfeiture may be set aside and all
rights under a lease or permit may be reinstated before the rights of another
party intervene, upon satisfactory evidence to the commissioner of future
compliance with the provisions of the law, of the lease or permit, and of any
rules adopted relative to the lease or permit, and any conditions placed upon
the reinstatement. Lessee or permittee shall offer the evidence required for
reinstatement within 30 days after the date the notice of forfeiture was mailed
and after such 30 days shall have no future right of reinstatement. If a lease
or permit issued under §
10.5 of this title (relating to
Mining Leases on Relinquishment Act Lands) is not reinstated within the 30-day
period, the surface owner is entitled to act as the state's agent for leasing
the minerals.
(e)
Reduction of penalty and/or interest. The School Land Board may reduce
penalties and/or interest assessed under the Texas Natural Resources Code, §
52.131, and/or
any other penalties or interest relating to delinquent or unpaid royalties that
have been assessed by the commissioner in the following circumstances:
(1) when a lessee brings a deficiency to the
General Land Office's attention voluntarily; and/or
(2) when a lessee and the General Land Office
have reached an agreement regarding the reduction as part of a resolution of an
outstanding audit issue.
Notes
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