CHAPTER 15-05 LEASING COAL, OIL, GAS, AND OTHER RIGHTS 15-05-01. Coal lands or coal in tracts - Leases - Term

The board of university and school lands may lease any lands or coal in tracts that may be contained in lands sold with a reservation of coal deposits under its control for coal mining purposes. Any lease made under this chapter must be for a period of time as the board may determine. Lands or coal in tracts that may be contained in lands sold with a reservation of coal deposits must be leased for coal mining purposes for a royalty upon the coal as the board may deem fair and in the best interest of the state. The royalty applies only to coal actually mined and saved from the leased premises. If the board owns or controls a smaller interest than the entire and undivided coal estate, the royalty must be paid to it only in proportion to which its interest bears to the entire undivided fee. The board may lease land or coal in tracts for the purpose of prospecting for and mining coal for an annual rental of not less than one dollar per acre [.40 hectare] per year. The rental paid for any year may not be deducted from the royalties as they accrue. The board may adjust the royalty of existing coal leases as the board determines fair and in the best interest of the state

15-05-02. Rental for coal lands - Regulations governing

Repealed by S.L. 1975, ch. 135, ยง 3

15-05-03. Lease for coal mining purposes not to interfere with right to lease for pasture - Exception

Repealed by S.L. 1975, ch. 135, ยง 3

15-05-04. Lands containing coal leased for agricultural purposes - Contents of lease

When any lands containing coal are leased for agricultural purposes, the lease must contain a provision authorizing the board of university and school lands to lease the same land for coal mining purposes and must reserve to the board the right to use and occupy or to lease for use and occupancy so much of the surface of the land as the lessee of the land for coal mining purposes requires for the extracting, mining, and marketing of the coal

15-05-05. Board to make rules and regulations governing coal leasing

The board of university and school lands may make such rules and regulations consistent with the provisions of this code as it deems necessary to determine the amount of rent due under any coal lease, to fix the manner and time of payment thereof, and to regulate the leasing of coal lands

15-05-06. Valuable deposits found on school and public institution lands - Disposal

Any lands belonging to the state, or lands known as school lands and public institution lands, in which is discovered any valuable deposit of coal or minerals of any kind, clay, gravel, or stone, are and remain the property of the state until provision for the sale or leasing thereof is especially provided for by law

15-05-07. State geologist to determine lands on which coal exists

The board of university and school lands may request that the state geologist determine the quantity and description of all lands under its control on which coal exists

15-05-08. Penalty for mining and prospecting in violation of requirements governing

Any person who mines, removes, or causes to be mined or removed, from any lands subject to the control of the board of university and school lands, any coal, lignite, uranium, oil and gas, or potash, unless mined or removed pursuant to the provisions of this chapter, or any person who prospects or explores for coal, lignite, uranium, oil and gas, or potash without permission from the board of university and school lands, is guilty of theft as defined in chapter Page No. 1 12.1-23. The offense is a class C felony. In addition, such person is civilly liable for trespass pursuant to chapter 15-08

15-05-09. Leases for oil, gas, and other products

The board of university and school lands may lease any lands under its control believed to contain oil, gas, coal, cement materials, sodium sulfate, sand and gravel, road material, building stone, chemical substances, metallic ores, or colloidal or other clays and may make and establish rules and regulations for development and drilling operations

15-05-10. Royalties from oil leases - Rents from other leases - Rules

Oil leases must be made by the board of university and school lands at such annual minimum payments as are determined by the board, but the royalty shall be not less than twelve and one-half percent of the gross output of oil from the lands leased. Oil leases made by the board may authorize a royalty of less than twelve and one-half percent for production from stripper well properties or individual stripper wells and qualifying secondary recovery and qualifying tertiary recovery projects as defined in section 57-51.1-01. Leases for gas, coal, cement materials, sodium sulfate, sand and gravel, road material, building stone, chemical substances, metallic ores, or colloidal or other clays must be made by the board in such annual payments as are determined by the board. The board may adopt rules regarding annual payments and royalties under this section

15-05-11. Improvements defined

The word "improvements" must be construed to mean surface improvements, machinery, and other equipment used and necessary for the operation of drilling on the land for oil or gas and the extraction of coal, cement materials, sodium sulfate, sand and gravel, road materials, building stone, chemical substances, metallic ores, or colloidal or other clays, and work performed in the development of the property for such purposes when the development work is of practical value for future operation and drilling upon the land. Wells drilled for oil or gas which do not produce oil or gas in commercial quantities may not be considered improvements

15-05-12. Sale or lease of land on which improvements have been made - Right of owner of improvements

Repealed by S.L. 1977, ch. 141, ยง 3

15-05-12.1. Improvements made on lands by a mineral lessee

The board of university and school lands may provide by rule or lease term for the sale, disposal, removal, or acquisition of improvements placed on lands by a lessee

15-05-13. Oil, gas, and other leases separate from grazing and farming leases

All leases made for the purpose of obtaining and extracting oil, gas, coal, cement materials, sodium sulfate, sand and gravel, road material, building stone, chemical substances, metallic ores, or colloidal or other clays must be separate and distinct from any lease of the land for grazing and farming purposes and the regulations made by the board of university and school lands must provide for the use of the lands for grazing and farming purposes without interference on the part of the lessee for the purposes aforesaid

15-05-14. Bonds for rents and royalties

The board of university and school lands may require the lessee to execute a good and sufficient bond conditioned for the payment of all moneys, rentals, and royalties stipulated by the terms of the lease and for the full compliance with and observance of all rules and regulations established by the board and of all other terms set forth in the lease

15-05-15. Assignment of lease only with consent of board

Leases made for the purpose of obtaining or extracting oil, gas, coal, cement materials, sodium sulfate, sand and gravel, road material, building stone, chemical substances, metallic Page No. 2 ores, or colloidal or other clays may not be assigned nor transferred except with the written consent of the board of university and school lands

15-05-16. Reports - State geologist - State department of health - Department of environmental quality

The state geologist, state department of health, or department of environmental quality, on the request of the board of university and school lands, shall visit any land leased under section 15-05-09 and shall make a report of the visit to the board. The state geologist, state department of health, or department of environmental quality may not receive a fee for making the examination and report but must be paid necessary expenses incurred in connection with the examination

15-05-17. Lessee first establishing oil well has preference as to leasing of adjacent Repealed by S.L. 1977, ch. 322, ยง 9

lands

minerals

15-05-18. Leases of sand and gravel, construction aggregate, and other construction Notwithstanding the provisions of chapter 38-09, the board of university and school lands may enter into mineral leasing agreements for sand and gravel, road material, building stone, and construction aggregate or colloidal or other clays under rules adopted by the board. No lease under this section may be issued by the board for less than fair market value, nor may any lease under this section be issued for a period of more than five years

15-05-19. Appropriation for lease expenses - Continuing appropriation

There is appropriated annually the amounts necessary to pay expenses for minerals controlled by the board of university and school lands, including appraisal fees, consulting fees, refunds, and expenses determined by the board as necessary to manage, preserve, and enhance the value of the trust asset. Each payment must be made from the trust fund for which the land is held

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