HBA-SEP C.S.H.B. 3410 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 3410
By: McReynolds
Land & Resource Management
4/25/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Vacant land is land that has never been surveyed and patented out of the
State of Texas.  As a result of antiquated technology and human error, some
patents from the Republic or the State of Texas were inaccurately surveyed
or the surveys did not describe the land to sufficiently locate it.  In
addition, the corners of some original surveys are marked by natural
objects such as trees or streams that have either disappeared or
significantly changed which makes it difficult to reconstruct original
patent lines.  Today, a vacancy finding generally disrupts what some view
as long established chains of title.  Several recent cases at the General
Land Office have involved individuals whose chain of title at the county
courthouse date back over 75 years, but because the land was never patented
out of the state the land is considered vacant. The current vacancy process
is lengthy, and expensive, and allows no time lines for action at the
beginning of the process.  C.S.H.B. 3410 simplifies and expedites the
vacancy determination process.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the commissioner of the General Land
Office in SECTION 1 (Section 51.174, Natural Resources Code)  and the
School Land Board in SECTION 1 (Section 51.175, Natural Resources Code) of
this bill. 

ANALYSIS

C.S.H.B. 3410 amends the Natural Resources Code to repeal current law
regarding the sale and lease of vacant and unsurveyed public school land.
The bill sets forth provisions regarding the general powers and duties of
the commissioner of the General Land Office (commissioner) and the School
Land Board (board). The commissioner is required to adopt rules necessary
and convenient to administrate these provisions. The board is required to
adopt rules governing the terms and conditions for the sale and lease of a
vacancy and is authorized to adopt rules governing mineral classification,
royalty reservations, and awards of royalty reservations and preferential
rights to an applicant or good-faith claimant (Secs. 51.174 and 51.175).   

The bill sets forth procedures for and content requirements of an
application to purchase or lease land claimed to be vacant and provides
that the commissioner set a filing fee in an amount not less than $100
(Sec. 51.176).  The commissioner is required to assign a file number to and
mark the date of filing on the application, accept any application that is
in compliance with this subchapter, and notify the applicant on acceptance
or rejection.  A rejected application is terminated (Sec. 51.177).    

A person is authorized to apply for good-faith claimant status at the time
of filing or not later than the 60th day after publication of required
notices.  The commissioner has sole discretion to declare a person a
goodfaith claimant.  Such an application must include certified copies of
applicable county records supporting such status.  The commissioner is
required to declare whether a person is a good-faith claimant and is
authorized to consider any relevant information. The declaration of
good-faith claimant status grants a preferential right to purchase or lease
the land (Sec. 51.178).  The bill provides that the applicant is required
to identify and provide notice to necessary parties and sets forth
notification procedures (Sec. 51.179).  

 The commissioner is authorized to recover state funds expended in
investigations and hearings held in regard to the sale and lease of
vacancies.  The commissioner is authorized to require the applicant to
submit a deposit within a specified time period and in an amount sufficient
to pay the costs of any required survey and investigation.  If the amount
deposited is insufficient, the commissioner may  make a written request for
a reasonably necessary supplemental deposit.  An applicant is prohibited
from challenging or appealing the amount of the required deposits and
refusal or failure to make the required deposits terminates the application
(Sec. 51.180).  After proceedings on an application are concluded and all
expenditures authorized are paid, the commissioner is required to provide
the applicant a complete statement of all deposits and expenditures and is
required to remit to the applicant any balance remaining from the deposits
made by the applicant (Sec. 51.181). 

The commissioner is authorized to appoint a licensed state land surveyor,
or the county surveyor of the county in which the land claimed to be vacant
or part of the land is located, to investigate the applicant's claim.  The
commissioner is required to mail a notice of intention to survey to each
necessary party not later than the 30th day before the date the surveyor
begins work.  When the fees and expenses are not provided by law, the
commissioner is also required to contract for fees and expenses reasonably
necessary.  The commissioner is authorized to rely on any survey conducted
by a licensed state land surveyor or a county surveyor and any documents or
public records required to determine whether a vacancy exists (Sec.
51.182).  

Not later than the 120th day after the date the surveyor is appointed, the
surveyor is required to file a written report of the survey unless the
commissioner extends the time for filing the report (Sec. 51.183). The
commissioner is required to serve a true copy of the survey report filed by
the surveyor on each necessary party not later than the tenth business day
after the date the survey report is filed with the land office.  Any
necessary party is authorized to file exceptions to the surveyor's report
not later than the 30th day after the date the notice of completion is
received.  If the commissioner does not appoint a surveyor, a  necessary
party is authorized to file exceptions to a survey report filed by the
applicant during a time established by the commissioner.  Any exceptions
must be filed with the land office and a copy sent to each necessary party
(Sec. 51.184).  The commissioner is required to conduct an investigation
into the applicant's claim that a vacancy exists and is authorized to
conduct a hearing.  The bill sets forth provisions regarding notice and the
scope of a hearing, scope of an investigation, and the record of the
investigation (Sec. 51.185).   

The bill requires the commissioner to notify each necessary party of the
vacancy determination and sets forth the contents of a vacancy
determination order.  In determining the boundaries and size of a vacancy,
the commissioner is not restricted to any description of the land claimed
to be vacant and is required to adopt the description of a vacancy that
best describes the vacancy and is consistent with an applicable
investigation.   Such a determination is a final order and may be appealed
within 90 days in the district court in the county where the majority of
the vacant land is located.  The district court is authorized to allow an
appeal after 90 days by an interested person who did not receive notice of
a proceeding (Secs. 51.186 and 51.187).   

The district court is required to conduct a de novo review of the
commissioner's final order determining that a vacancy exists (Sec. 51.188).
The bill authorizes the court to review the commissioner's declaration of
good-faith claimant status only in conjunction with review of a final order
determining that a vacancy exists (Sec. 51.189).  A person who has a
present legal interest in the surface or mineral estate at the time an
application is filed or who acquires an interest before the date of the
commissioner's final order is authorized to appeal the final order (Sec.
51.190).  A good-faith claimant who has been notified by the commissioner
that a vacancy has been found has a preferential right to purchase or lease
the vacancy at the price set by the board and subject to the royalty
reservations provided by the board.  The preferential right is authorized
to be exercised after final judicial determination or after the
commissioner's final order when the period for filing an appeal has
expired.  If the good-faith claimant does not apply for purchase or lease
of the land before the 121st day after the date the preferential right may
be exercised, then the preferential right expires (Sec. 51.191).  If no
good-faith claimant exercises the claimant's preferential right within the
applicable period, the applicant has a preferential right for 30 days to
purchase or lease the  vacancy.  The board is required to award an
applicant, other than a good-faith claimant, a perpetual nonparticipating
royalty of not less than 1/32 nor more than 1/16 of the value of oil, gas,
and sulphur and one percent of the value of all geothermal and other
minerals produced (Sec. 51.192).  

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 3410 modifies the original to specify that, except for provisions
regarding identification of and notice to necessary parties, a necessary
party is not entitled to subsequent notices unless the party so requests
(Sec. 51.179).  The substitute authorizes the commissioner and applicant to
agree to alternative payment methods to recover state funds expended in
investigations and hearings (Sec 51.180).  The substitute sets forth
provisions regarding a surveyor contract (Sec. 51.182).  The substitute
provides that if the commissioner has not issued a final order on or before
the first anniversary of the date the application was accepted, the
applicant is authorized to file an action in district court to determine
whether a vacancy exists.  Such an action terminates the application with
the General Land Office (Sec. 51.187).