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DEPARTMENT OF STATE LANDS

 

DIVISION 73

RULES GOVERNING THE RELEASE, SALE OR EXCHANGE OF
MINERAL RIGHTS HELD BY AGENCIES OF THE STATE OF OREGON
OTHER THAN THE DEPARTMENT OF STATE LANDS AND STATE LAND BOARD

141-073-0100

Purpose and Applicability

(1) These rules govern the release, sale or exchange of mineral rights held by agencies of the State of Oregon other than the State Land Board and the Department of State Lands.

(2) The procedures contained in these rules shall be used by the State Land Board and the Department to review proposed releases, sales or exchanges of properties by state agencies to determine if the state should release, sell or exchange the mineral rights that may be a part of these properties.

(3) These rules do not apply to the release, sale or exchange of mineral rights held by the State Land Board and administered by the Department. These activities are governed by the Rules Governing the Sale, Exchange and Purchase of Land (OAR 141-067).

Stat. Auth.: ORS 273.045, 273.551 & 273.775 - 273.790
Stats. Implemented: ORS 273.780 - 273.790
Hist.: LB 23, f. 4-18-75, ef. 5-11-75; DSL 1-2005, f. 2-11-05, cert. ef. 2-28-05

141-073-0105

Definitions

(1) "Agency" or "State Agency" as defined in ORS 291.002(9) means every state officer, board, commission, department, institution, branch or agency of the state government whose costs are paid wholly or in part from funds held in the State Treasury, except:

(a) The Legislative Assembly, the courts and their officers and committees;

(b) The Public Defense Services Commission; and

(c) The Secretary of State and the State Treasurer in the performance of the duties of their constitutional offices.

(2) "Department" means the Department of State Lands.

(3) "Director" means the Director of the Department of State Lands or designee.

(4) "Geothermal Resource" as defined in ORS 522.005(11) means the natural heat of the earth, the energy, in whatever form, below the surface of the earth present in, resulting from, or created by, or which may be extracted from the natural heat, and all minerals in solution or other products obtained from naturally heated fluids, brines, associated gases, and steam, in whatever form, found below the surface of the earth, exclusive of helium or oil, hydrocarbon gas or other hydrocarbon substances, but including, specifically:

(a) All products of geothermal processes, embracing indigenous steam, hot water and hot brines;

(b) Steam and other gases, hot water and hot brines resulting from water, gas, or other fluids artificially introduced into geothermal formations;

(c) Heat or other associated energy found in geothermal formations; and

(d) Any by-product derived from them.

(5) "In-Depth Evaluation" is a comprehensive review conducted by a mineral resource consultant of the economic geology of the area where a mineral right occurs. The purpose of this evaluation is to determine if significant mineral and/or geothermal resources exist in or proximate to the mineral right, and to establish a value for the mineral right. This evaluation involves a comprehensive review of geologic reports and maps as well as any publicly available exploration data. It may also involve a field visit to examine the geology of the area where the mineral right occurs; the taking and analysis of samples; and the performance of other mineral exploration field techniques. The mineral resource consultant will present the results of an in-depth evaluation to the Department in writing.

(6) "Mineral Reservation" is a clause in a deed that specifically retains all, or a portion of a mineral right.

(7) "Mineral Resource" refers to a concentration of naturally occurring solid, liquid, or gaseous material in or on the Earth's crust in such form and amount that economic extraction of a mineral commodity is currently or potentially feasible at some time in the future.

(8) "Mineral Resource Consultant" refers to the Oregon Department of Geology and Mineral Industries; a registered geologist with expertise in mineral resource appraisal or economic geology; or a state certified appraiser with expertise in mineral appraisal.

(9) "Mineral Right" is an ownership interest in the mineral and/or geothermal resources of a parcel of land. The owner of a mineral right may or may not be the owner of the surface of the parcel. A mineral right may include all metallic, non-metallic, and energy minerals (including oil and gas) as well as geothermal resources, or may specify/exclude some particular types of minerals (for example, limit mineral ownership to just the metallic and non-metallic minerals, or exclude ownership to the sand and gravel).

(10) "Non-Geothermal" refers to a parcel of land that is not known to contain geothermal resources based on geothermal exploration and other geologic information or is not located in a geologic setting that appears to be favorable for the occurrence of geothermal resources.

(11) "Non-Mineral" refers to a parcel of land that is not known to contain mineral resources based on mineral exploration and other geologic information, or is not located in a geologic setting that appears to be favorable for the occurrence of mineral resources.

(12) "Person" is an individual at least eighteen (18) years old; a political subdivision or public agency; or any corporation, association, firm, partnership, joint stock company; or quasi-public corporation registered to do business in the State of Oregon.

(13) "Preliminary Evaluation" is an initial, cursory review conducted by a mineral resource consultant of the economic geology/mineral potential of the area where a mineral right occurs. This evaluation involves a brief review of geologic reports and maps as well as what exploration data may be available. The purpose of this evaluation is to determine if potentially significant mineral and/or geothermal resources may exist in or proximate to the mineral right, and if an in-depth evaluation is warranted. The mineral resource consultant will present the results of a preliminary evaluation to the Department in writing.

(14) "Relative Value" is an estimate of the non-monetary value of a mineral and/or geothermal resource relative to another mineral or geothermal resource. A relative value may be expressed in terms of how closely the geologic characteristics of the mineral and geothermal resources of one mineral right compare to another.

(15) "Release" means the transfer of ownership of a mineral right to another person.

(16) "Significant Mineral or Geothermal Resources" means that the Department determines, based on a preliminary or in-depth evaluation, that mineral and/or geothermal resources could be economically developed in the future.

Stat. Auth.: ORS 273.045, 273.551 & 273.775 - 273.790
Stats. Implemented: ORS 273.780 - 273.790
Hist.: LB 23, f. 4-18-75, ef. 5-11-75; DSL 1-2005, f. 2-11-05, cert. ef. 2-28-05

141-073-0110

Policies

(1) ORS 273.780 requires that:

(a) The mineral rights in property owned by any agency of the State of Oregon, or retained by a state agency after the sale or exchange of such property, are the property of the State of Oregon.

(b) Except as provided in ORS 273.785:

(A) Proceeds from the mineral rights held by the state shall accrue to the Common School Fund, and

(B) The State Land Board shall act for the state in any transaction involving the exploration for, or development, sale or exchange of mineral rights belonging to the State of Oregon.

(C) All mineral rights owned by the State of Oregon shall be retained by the state unless the State Land Board determines that the sale or exchange of the rights is for the purpose of "..obtaining the greatest benefit for the people of this state consistent with the conservation of lands under its jurisdiction under sound techniques of land managemen.." as provided by Article 8, Section 5(2) of the Oregon State Constitution.

(2) The Department shall administer these rules to ensure to the greatest extent possible that agencies applying for a release of state-owned mineral rights receive timely, consistent, predictable and fair treatment.

(3) The Land Board will not authorize a release, sale or exchange of a mineral right without first making a finding that the release, sale or exchange is for the purpose of obtaining the greatest benefit for the people of this state, consistent with the conservation of lands under its jurisdiction under sound techniques of land management.

(4) No mineral right shall be released, sold or exchanged without Land Board review and approval.

(5) The evaluation of mineral and geothermal resources is often difficult and costly. The accuracy of an evaluation or determination of the value of a mineral right is highly contingent on how much geologic and exploration data are available for review. Unless the Department determines that:

(a) There is a good possibility based on a preliminary evaluation by a mineral resource consultant that significant mineral and/or geothermal resources could occur in the land bounded by a mineral right; and

(b) Significant revenue would be received by the Common School Fund from the sale of the mineral right, the Department will not spend its financial resources to retain the services of a mineral resource consultant to conduct a more in-depth evaluation of the value of the mineral right.

(6) The Department will proceed with the processing of applications for the release, sale, or exchange of mineral rights only to the extent that staff availability and budget permit.

Stat. Auth.: ORS 273.045, 273.551 & 273.775 - 273.790
Stats. Implemented: ORS 273.780 - 273.790
Hist.: LB 23, f. 4-18-75, ef. 5-11-75; DSL 1-2005, f. 2-11-05, cert. ef. 2-28-05

141-073-0115

Mineral Right Release, Sale and Exchange Application Process

(1) State agencies that want to release, sell or exchange mineral rights shall notify the Department in writing of the details of the proposed release, sale or exchange at least sixty days prior the date of the proposed transaction. This notification shall include:

(a) The legal description of the subject mineral rights to be conveyed as contained in the deed;

(b) A legal description of the property limits on which the subject mineral rights occur;

(c) A tax lot map on which the boundaries of the subject property and mineral rights are identified;

(d) A map showing the location of the subject property and mineral rights relative to urban growth boundaries;

(e) The zoning of the land on which the mineral right is located;

(f) Any appraisals that have been conducted of the property, particularly those that address the value of the subject mineral rights;

(g) Any geologic reports, mineral and geothermal resource evaluations, appraisals, and other relevant information concerning the subject mineral rights held by the agency requesting the release, sale or exchange of the mineral rights;

(h) The reason(s) the agency wants to release, sell or exchange the mineral rights;

(i) The name, address, and telephone number of the person who wants to acquire the subject state-owned mineral rights;

(j) The consideration being offered by the person requesting the release, sale or exchange of the state-owned mineral rights; and

(k) Documentation that the agency requesting the release, sale or exchange has completed the Department of Administrative Services' surplus property process (OAR 125-045).

(2) Upon receipt of the written notification, the Department will review it for completeness. If the notification is determined by the Department to be incomplete, the Department will contact the agency to advise it of what additional information is required.

(3) If the notification is determined by the Department to be complete, the Department shall process it in accordance with the procedures provided in OAR 141-073-0118 and 141-073-0119.

(4) The Department may, at its discretion, use any geologic reports or mineral and geothermal resource evaluations and appraisals provided by an agency requesting the release, sale or exchange of mineral rights instead of retaining a mineral resource consultant as provided in OAR 141-073-0118 through 141-073-0119.

Stat. Auth.: ORS 273.045, 273.551 & 273.775 - 273.790
Stats. Implemented: ORS 273.780 - 273.790
Hist.: LB 23, f. 4-18-75, ef. 5-11-75; DSL 1-2005, f. 2-11-05, cert. ef. 2-28-05

141-073-0118

Mineral Right Release or Sale Process

(1) If the subject mineral right proposed for release or sale is owned by an agency other than the Department:

(a) The Department shall request a mineral resource consultant to conduct a preliminary evaluation of the mineral right. This evaluation will be the opinion of the mineral resource consultant regarding the actual or possible presence, extent and grade of, and demand for the mineral resources within the mineral right, and will be presented in writing to the Department.

(b) If no significant mineral or geothermal resources are believed by the mineral resource consultant to exist, the Department will submit the request to the Land Board for its consideration. If Land Board approval is granted, the Department will release the state-owned mineral rights to the agency/person applying for them.

(2) If the mineral resource consultant's preliminary evaluation to the Department indicates that significant mineral and/or geothermal resources exist within the limits of the mineral right, and any revenue derived from the mineral right would:

(a) Not accrue to the Common School Fund, the agency submitting the request for release or sale of the mineral right shall, at their own cost, retain a mineral resource consultant to conduct an in-depth evaluation to determine a value for the mineral and geothermal resources.

(b) Accrue to the Common School Fund, the Department may either retain a mineral resource consultant to conduct an in-depth evaluation to determine a value for the mineral and geothermal resources, or advise the agency that it will not release the mineral right for sale or exchange.

(3) If the mineral resource consultant's in-depth evaluation indicates the presence of significant mineral and/or geothermal resources within the limits of the mineral right, the Department may either:

(a) Advise the agency that it will reserve the mineral right, or

(b) After receipt of Land Board approval, sell the mineral right at a value based on either the mineral resource consultant's in-depth evaluation plus any cost incurred by the Department to retain the consultant, or for a price negotiated by the Department.

(4) If the mineral consultant's in-depth evaluation determines that no significant mineral and/or geothermal resources exist within the limits of the mineral right, the Department shall submit the request to the Land Board for its consideration. If Land Board approval is granted, the Department will release the state-owned mineral rights to the agency/person applying for them.

(5) As provided in OAR 141-073-0115(4), the Department may, at its discretion, use information provided by the agency requesting the release or sale of mineral rights instead of using/requiring a mineral resource consultant for some or all of the reports and evaluations required.

Stat. Auth.: ORS 273.045, 273.775 - 273.79, Or. Const, Art. VIII, Sec. 5
Stats. Implemented: ORS 273.775 - 273.79
Hist.: DSL 1-2005, f. 2-11-05, cert. ef. 2-28-05

141-073-0119

Mineral Right Exchange Process

(1) If the subject mineral right proposed for exchange is owned by an agency other than the Department:

(a) The Department shall request a mineral resource consultant to conduct a preliminary evaluation of the state-owned mineral right(s) as well as the right(s) being offered for exchange. This preliminary evaluation will be the opinion of the mineral resource consultant regarding the actual or possible presence of mineral resources within the mineral rights, and will be presented in writing to the Department.

(b) If the mineral consultant's preliminary evaluation to the Department indicates that no significant mineral or geothermal resources exist within the mineral rights held by the state or those being offered for exchange, the Department will submit the request to the Land Board for its consideration. If Land Board approval is granted, the Department will release the state-owned mineral rights to the agency/person applying for them in exchange for their mineral rights.

(c) If the mineral resource consultant's preliminary evaluation to the Department indicates that significant mineral and/or geothermal resources may occur within the limits of any of the mineral rights proposed for exchange, the Department may either:

(A) Advise the agency proposing the exchange that it will reserve the state-owned mineral right; or

(B) Request that the agency retain at its own cost a mineral resource consultant to conduct an in-depth evaluation of each of the mineral rights proposed for exchange. The purpose of this evaluation will be for the mineral resource consultant to develop a relative value for each mineral right. To establish this relative value, the following factors, at a minimum, are to be considered:

(i) Types of minerals reserved;

(ii) Geologic setting and the likelihood that mineral or geothermal resources could occur in that setting;

(iii) The location of the mineral right relative to the infrastructure required to develop it; and

(iv) Possible markets for any mineral or geothermal resources. This in-depth evaluation will not be an appraisal of the monetary value of each mineral right, but rather the opinion of the mineral resource consultant regarding the actual or possible presence, extent and grade of, and demand for the mineral resources within each mineral right, and a comparison of one mineral right to another.

(d) If the mineral resource consultant's preliminary or in-depth evaluation indicates that the mineral rights of the parcels to be exchanged are of approximately equivalent relative value, the Department may either advise the agency that it will not exchange the mineral rights, or submit the request to the Land Board for its consideration. If the Land Board approves an exchange, the Department will authorize the exchange to proceed and release the state-owned mineral rights to the agency/person applying for them in exchange for their mineral rights.

(e) If the mineral resource consultant's preliminary or in-depth evaluation to the Department indicates that the value of one mineral right is substantially greater than the other, the Department will advise the agency proposing the exchange of this inequality and the possible need to make adjustments to the trade.

(f) The Department will not release state-owned mineral rights having a value that is greater than those being offered in exchange unless it finds that the greatest benefit for the people of this state is obtained through the exchange.

(2) As provided in OAR 141-073-0115(4), the Department may, at its discretion, use information provided by the agency requesting the release or sale of mineral rights instead of using/requiring a mineral resource consultant for some or all of the reports and evaluations required.

Stat. Auth.: ORS 273.045, 273.775 - 273.79, Or. Const, Art. VIII, Sec. 5
Stats. Implemented: ORS 273.775 - 273.79
Hist.: DSL 1-2005, f. 2-11-05, cert. ef. 2-28-05

141-073-0125

Form of Reservation

Whenever mineral or geothermal resources rights are retained in lands, the deed executed by the state agency selling or exchanging the surface rights shall contain the following reservation clause:

"Excepting and reserving to itself, its successors, and assigns all minerals as defined in ORS 273.775(1), including soil, clay, stone, sand, and gravel*, and all geothermal resources, as defined in ORS 273.775(2), together with the right to make such use of the surface as may be reasonably necessary for prospecting for, exploring for, mining, extracting, reinjecting, storing, drilling for, and removing, such minerals, materials*, and geothermal resources. In the event use of the premises by a surface rights owner would be damaged by one or more of the activities described above, then such owner shall be entitled to compensation from state's lessee to the extent of the diminution in value of the real property, based on the actual use by the surface rights owner at the time the state's lessee conducts any of the above activities."

NOTE: *To be deleted in the individual case, as approved by the State Land Board.

Stat. Auth.: ORS 273.045, 273.551 & 273.775 - 273.790
Stats. Implemented: ORS 273.780 - 273.790
Hist.: LB 23, f. 4-18-75, ef. 5-11-75; LB 45, f. & ef. 10-21-77; LB 2-1982(Temp), f. & ef.3-17-82; LB 8-1982, f. & ef. 8-25-82; LB 3-1984(Temp), f. & ef. 4-26-84; LB 5-1984, f. & ef. 10-10-84; DSL 1-2005, f. 2-11-05, cert. ef. 2-28-05

Minerals Registry

141-073-0215

Minerals Registry

(1) Pursuant to the provisions of ORS 273.790, the Department shall establish and maintain a registry of mineral and geothermal resource rights placed under the jurisdiction of the State Land Board.

(2) This registry shall be used by the Department, all state agencies, and the public to know:

(a) The location of mineral rights owned by the State of Oregon; and

(b) The availability of these rights for exploration and mineral leasing.

(3) The registry shall identify the surface owner wherever possible.

(4) State-owned mineral and geothermal resource rights in parcels of less than 40 acres shall not be listed in the registry.

(5) All state agencies owning mineral and geothermal resource rights shall report changes in the ownership status of those rights in writing to the Department within 30 days of such changes. Changes include, but are not limited to the purchase, sale or exchange of mineral rights or parcels containing mineral rights. The Department shall add data concerning such purchases, sales or exchanges of mineral rights or parcels containing mineral rights to the registry upon receipt of written notification.

(6) The Department shall maintain a record of the issuance, expiration, or cancellation of each mineral or geothermal resource lease.

Stat. Auth.: ORS 273.045, 273.551 & 273.775 - 273.790
Stats. Implemented: ORS 273.780 - 273.790
Hist.: LB 23, f. 4-18-75, ef. 5-11-75; Renumbered from 141-073-0225, 141-073-0230, 141-073-0240, 141-073-0250, DSL 1-2005, f. 2-11-05, cert. ef. 2-28-05

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