2012 North Dakota Century Code Title 15 Education Chapter 15-05 Leasing Coal, Oil, Gas, and Other Rights
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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 such 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 such royalty upon the coal as the board
may deem fair and in the best interest of the state; provided, that the minimum royalty may not
be less than fifteen cents per ton [907.18 kilograms], or six percent of the price per ton [907.18
kilograms] of coal, whichever is greater. 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.
15-05-02. Rental for coal lands - Regulations governing.
Repealed by S.L. 1975, ch. 135, § 3.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Repealed by S.L. 1975, ch. 135, § 3.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
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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 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, § 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
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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.
The state geologist or the state department of health, 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 or the state department of health may not
receive a fee for making the examination and report but must be paid necessary expenses
incurred in connection therewith.
15-05-17. Lessee first establishing oil well has preference as to leasing of adjacent
lands.
Repealed by S.L. 1977, ch. 322, § 9.
15-05-18. Leases of sand and gravel, construction aggregate, and other construction
minerals.
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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