MISSISSIPPI LEGISLATURE
2024 Regular Session
To: Education
By: Senator(s) Carter
AN ACT TO AMEND SECTION 29-3-99, MISSISSIPPI CODE OF 1972, TO REVISE AND MODERNIZE CERTAIN PROCEDURES FOR THE LEASING OF SIXTEENTH SECTION LAND FOR OIL, GAS, CLAY, DIRT, AND OTHER LIQUID AND GASEOUS MINERAL EXPLORATION; TO SET A MINIMUM PER ACRE PRICE FOR SUCH LEASES; TO SET A MINIMUM ROYALTY TO BE PAID FOR ANY OIL, GAS AND COAL THAT IS PRODUCED FROM SUCH LAND; TO REQUIRE CERTAIN NOTICE BE PUBLISHED IN THE NEWSPAPER IN THE COUNTY WHEREIN THE LAND IS SITUATED; TO REVISE CERTAIN BIDDING PROCEDURES; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 29-3-99, Mississippi Code of 1972, is amended as follows:
29-3-99. (1) The
board of education is hereby authorized and empowered, in its discretion, to
let, demise and lease sixteenth section lands, included in the Choctaw
Purchase, or the lands held in lieu of same whether located therein or
elsewhere, reserved for the support of township schools, for exploration,
mining, production and development * * *
via a bore hole of * * *
oil, gas, carbon dioxide and other gaseous or liquid substances, * * * upon such terms and
conditions and for such consideration as the board of education, in its
discretion, shall deem proper and advisable. * * * Said
school lands shall not be leased for oil, gas, and other gaseous or liquid substances * * *
exploration, * * * production, and development for a bonus
of less than One Dollar ($1.00) per acre and a paid-up delay rental bonus * * * of less than One Dollar ($1.00) per acre per annum
during the primary term. Such lands shall not be leased for oil, gas, and * * *
other gaseous or liquid substances for a primary term of more than five
(5) years and so long thereafter as oil, gas or other minerals are being
produced * * *
from said lands, or so long as the lease is being maintained by other lease
provisions, except that a lease shall in no event extend longer than permitted
by Section 211 of the Mississippi Constitution. * * * The royalties to be
paid shall not be less than (a) on oil, * * *
three-sixteenths (3/16) of that produced and saved from said lands; (b) on
gas, including casinghead gas or other gaseous substances produced from said
land and sold or used off the premises or in the manufacture of gasoline or
other products therefrom, the market value at the well of * * *
three-sixteenths (3/16) of the amount realized from such sale; (c) * * * on
all other * * * gaseous and liquid substances
produced * * *
and marketed, three-sixteenths (3/16) either in kind or value at the
well * * *
at lessor's election * * *. Lessee shall have
free use of oil, gas * * * and water from said land, except water from lessor's wells,
unless lessor shall agree in writing to the use of water from lessor's wells,
for all operations hereunder, and the royalty on oil * * * and gas * * * shall be computed after deducting
any so used.
(2) The board of education is hereby authorized and empowered, in its discretion, to let, demise and lease sixteenth section lands, included in the Choctaw Purchase, or the lands held in lieu of same located therein, reserved for the support of township schools, for exploration, production, and development via excavation or surface mining for (a) sulphur, salt, sand, gravel, fill dirt and clay, and (b) metals, compounds of metals, or metal-bearing ores, and their constituent components and products and minerals intermingled or associated therewith, upon such terms and conditions and for such consideration as the board of education, in its discretion, shall deem proper and advisable. Such lands shall not be leased for a primary term of more than five (5) years and so long thereafter as other minerals are being produced and mined from said lands, or so long as the lease is being maintained by other lease provisions, except that a lease shall in no event extend longer than permitted by Section 211 of the Mississippi Constitution. Any mine plan referred to in this paragraph shall not contain more than five thousand (5,000) acres. Said school lands shall not be leased for sulphur, salt, sand, gravel, fill dirt, and clay mining, including metals, compounds of metals, or metal-bearing ores, exploration, production, mining, and development for a bonus of less than One Dollar ($1.00) per acre and a renewal rental during the primary term. The royalties to be paid shall not be less than (a) on sulphur mined and marketed shall be not less than Fifty Cents (50˘) per long ton, and (b) on salt the royalty shall be not less than Five Cents (5˘) per ton mined. No clay shall be leased nor removed within the boundary of any incorporated municipality as such boundary existed on January 1, 1964, nor within one hundred fifty (150) feet of any dwelling house which is either occupied or has been vacant less than ninety (90) days, without the written consent of the leaseholder of the surface from which such clay is to be leased or removed, regardless of classification of such lands. In leasing said lands for the mining and removal of clay, sand, gravel and fill dirt, the bid shall be by the cubic yard truck measure and to the highest and best bidder, provided that these materials shall not be sold therefrom for less than the regular market price thereof, such price to include the value of the royalty provided for herein.
(3) The board of education is hereby authorized and empowered, in its discretion, to let, demise and lease sixteenth section lands, included in the Choctaw Purchase, or the lands held in lieu of same located therein, reserved for the support of township schools, for exploration, production, and development via excavation or surface mining for coal, including anthracite, bituminous, subbituminous, lignite and their constituent components and products and minerals intermingled or associated therewith, upon such terms and conditions and for such consideration as the board of education, in its discretion, shall deem proper and advisable. Such lands shall not be leased for coal for a primary term of more than twenty (20) years and so long thereafter as coal is being mined and sold or utilized by lessee from such lands or from adjoining lands within a mine plan which includes such lands or so long as mining operations are being prosecuted on such lands on a continuous basis or so long as the lease is being maintained by other lease provisions, except that a lease shall in no event extend longer than permitted by Section 211 of the Mississippi Constitution; provided, however, that any lease of coal may provide for one (1) renewal term of not more than twenty (20) years from and after expiration of the initial term upon payment by lessee of a renewal bonus of not less than One Dollar ($1.00) per acre. Any mine plan referred to in this paragraph shall not contain more than five thousand (5,000) acres. Said school lands shall not be leased for coal exploration, production, mining, and development for a bonus of less than One Dollar ($1.00) per acre and a renewal rental during the primary term. The royalties to be paid shall not be less than on coal mined on such land and sold or utilized by lessee, one-twentieth (1/20) of the market value at the mine of each ton of two thousand (2,000) pounds.
(4) The board of education shall not lease any sixteenth section land that was sold and conveyed in fee simple forever by a board of supervisors prior to 1890.
(5) (a) Notice to the public shall be given by advertisement published for at least three (3) weeks in a newspaper in the county wherein such lands are situated, or if no newspaper be published in said county then in a newspaper having general circulation therein. The managing board may also publish additional notices at school offices, in trade publications, online sites, or at any other location, in any other media, or by any other means it finds likely to result in competitive bids.
(b) The advertisement set forth above shall give an accurate legal description of the lands to be leased, inviting sealed proposals thereon to be filed with the superintendent of education. Before bids are requested, the board shall prescribe the form of the lease and shall prescribe the royalty to be retained by the lessor, the annual rental to be paid by the lessee during the primary term of the lease, and shall have as subject to bid only the bonus to be paid by lessee, and, for leases of coal, the bonus to be paid by lessee for any renewal term as hereinafter provided. The lease form and the terms so prescribed shall be on file and available for inspection in the office of the superintendent from and after the public notice by advertisement and until finally accepted by the board. The board of education shall award the lease to the highest bidder in the manner provided by law.
(c) It is further specifically provided that such leases shall not be let at a special meeting of the board of education.
(6) Leases for metals, coals, sand, gravel, fill dirt or clay may be executed covering land upon which leases are outstanding for the exploration, mining, and development of oil, gas, and other minerals, provided proper safeguards are incorporated in the lease for the protection of the other leaseholders. All such leases shall contain suitable provisions for adequate compensation to the surface lessee, if any, for any damage done to the leasehold estate in such lands and for the use of a substantial portion of the surface thereof for such mining and/or developing or processing purposes, and for rights of ingress and egress, and all such leases shall further contain suitable provisions for adequate compensation to the board of education for any permanent damage done to the surface of the land or any timber thereon. Any future lease of said land after expiration of the present lease thereon will be subject to the rights of any lessee under provisions hereof.
(7) If the lessor commits any error in the leasing procedure which renders the lease void or voidable, the lessee shall be entitled to recover the consideration paid to secure the lease.
(8) No clay shall be leased nor removed within the boundary of any incorporated municipality as such boundary existed on January 1, 1964, nor within one hundred fifty (150) feet of any dwelling house which is either occupied or has been vacant less than ninety (90) days, without the written consent of the leaseholder of the surface from which such clay is to be leased or removed, regardless of classification of such lands.
SECTION 2. This act shall take effect and be in force from and after July 1, 2024.