TITLE 50 STATE GOVERNMENT

Section 16. Public Property, 50-16-1 through 50-16-183.

ARTICLE 2 STATE PROPERTIES CODE

50-16-43. Leasing of state owned lands for exploration and extraction of mineral resources.

1. The commission for and on behalf of and in the name of the state is authorized to enter into, without the necessity of prior public competitive bidding, a written contract with any person, whereby such person is permitted to explore any state owned lands for indications of mineral resources.
2. The commission for and on behalf of and in the name of the state is further authorized to lease to any person the mineral resources located on state owned lands and to execute, grant, and convey to such person a lease upon such terms and conditions and permitting such operations as the commission shall determine to be in the best interest of the state including, but not limited to:
   1. The exclusive right to drill, dredge, and mine on the leased premises for mineral resources and to produce and appropriate any and all of the same therefrom;
   2. The right to use, free of charge, mineral resources and water from the leased premises in conducting operations thereon and in treating to make marketable the products therefrom;
   3. The right to construct and use on the leased premises telephone and telegraph facilities, pipelines, and other facilities necessary for the transportation and storage of mineral resources produced therefrom;
   4. The right to construct and use such canals and roads as are necessary for lessee's operations under the lease; and
   5. The right to remove at any time from the leased premises any property placed thereon by lessee.
3. When any person shall desire to lease any state owned lands pursuant to this Code section, application therefor shall be made to the commission in writing. The application shall include an accurate legal description and a locational, dimensional, and directional sketch acceptable to the commission or a plat of survey of the land sought to be leased and such other information as the commission may require and shall further include a certified check for $50.00 which shall be deposited with the commission as evidence of the good faith of the applicant, which sum shall only be returned to an applicant who bids for but fails to secure a lease.
4. When the commission shall desire to lease state owned lands, or upon receipt of an application by any person desiring to lease any state owned lands, the commission shall make an inspection of the land sought to be leased and such geophysical and geological surveys thereof as the commission may deem necessary. The commission, after receiving a report as to the nature, character, surroundings, and mineral resource value of the land, may offer for lease, through public competitive bidding, all or any portion of the land described in the application. The commission shall cause to be published once a week for two consecutive weeks in the legal organ and in one or more newspapers of general circulation in the county or counties wherein is situated the land to be bid upon and in the legal organ of Fulton County an advertisement of an invitation for bids setting forth therein an accurate legal description of the land proposed to be leased; the date, time, and place when and where bids therefor will be received; and such other information as the commission may deem necessary. Prior to the advertising, the commission shall prepare a proposed form of lease and appropriate instructions which shall be furnished to prospective bidders under such conditions as the commission may prescribe. Sealed bids shall be submitted to the secretary of the commission and each bid shall be accompanied by a bid bond or such other security as may be prescribed by the commission.
5. All bids shall be opened in public on the date and at the time and place specified in the advertisement of the invitation for bids. The commission shall formally determine and announce which bid and bidder it considers to be most advantageous to the state. The commission shall have the right to reject any or all bids and bidders and the right to waive formalities in bidding.
6. The commission, acting for and on behalf of and in the name of the state, is authorized to execute, grant, and convey a lease pursuant to this Code section on any state owned land to any state agency without the necessity of complying with the public competitive bid procedure stated in this Code section; provided, however, the mineral resources so mined, dredged, and removed from the state owned land must be utilized on projects of the state agency.
7. Each lease granted under this Code section after competitive bidding shall provide for a primary term of not more than ten years and shall provide for a royalty on production therefrom of not less than one-eighth part of any oil produced and saved, or the value of same, and one-eighth part of the gas, or the value of same, that may be produced from and is sold or used off the premises. The lease shall provide for delay rentals in the sum of at least 10› per net mineral acre payable on or before the first anniversary date of the lease, 25› per net mineral acre payable on or before the second anniversary date of the lease, 50› per net mineral acre payable on or before the third anniversary date of the lease, and at least $1.00 per net mineral acre payable on or before each subsequent anniversary date during the primary term of the lease. The lease may contain such other provisions, including provisions for offset drilling, protection from drainage, pooling, and lease maintenance by resumption of interrupted delay rental payments, operations for drilling, production, and force majeure, as may be desired or determined appropriate by the commission.
8. An electric log of each development well shall be filed with the commission and with the Department of Natural Resources within 30 days after the well has been completed or abandoned. An electric log of each exploratory well shall be filed with the commission and with the director within six months after the completion or abandonment of the well; but, if the operator of the well requests that the log be treated as confidential, the request for confidentiality shall be honored strictly for an additional period of six months; provided, however, that nothing in this article shall be construed so as to repeal any requirement of Part 2 of Article 2 of Chapter 4 of Title 12.
9. The development and operation of oil and gas wells on state owned lands shall be done, so far as practicable, in such manner as to prevent the pollution of water; destruction of fish, oysters, and marine life; and the obstruction of navigation.
10. Notwithstanding any other provisions of this Code section to the contrary, when it is determined to be in the best interest of the state, the commission, acting for and on behalf of and in the name of the state, is further authorized and empowered to grant and convey to any person a lease which authorizes the person to dredge a portion of the bottom or bank of a state owned waterway or waters and to appropriate any and all products from such dredging, subject to the following conditions:
    1. A written request for a lease and a locational, dimensional, and directional sketch or a plat of survey of the proposed lease premises, prepared at the sole cost and expense of the person requesting the lease, in form and content acceptable to and approved by the commission, and showing and describing thereon the lease premises of the lease, must be received by the commission detailing therein the reason and all the particulars for the request and outlining the purpose and use to be made of any and all products derived from such dredging. If a sketch is submitted to and is approved and accepted by the commission, paragraph (3) of subsection (b) of Code Section 50-16-122, relating to the requirement of the filing with the Secretary of State of a plat of survey with a conveyance disposing of real property, shall be relaxed; and the Secretary of State in such a transaction shall accept in lieu of the required plat of survey the sketch which was approved and accepted by the commission;
    2. The executive director of the commission shall forward for comment and advice to the Department of Natural Resources and to the state agency, department, authority, commission (excluding the commission), official, or board (if other than the Department of Natural Resources) that has current custody and control of the proposed lease premises, the written request and sketch or plat of survey received by the commission;
    3. The commission shall investigate, require compliance with all conditions laid down by the commission, and determine the form and all of the terms, conditions, provisions, and considerations of, incorporations in, and attachments to each such lease negotiated, prepared, executed, and issued (granted and conveyed) by the commission; provided, however, that the term of any such lease shall not exceed a period of time of five years and provided, further, that any such lease shall contain a provision requiring that any activity undertaken pursuant to the lease be in compliance with the applicable provisions of all state environmental or natural resources laws administered or enforced by the Department of Natural Resources or its successor and with all applicable policies of the Georgia Coastal Management Board or its successor;
    4. Both the Department of Natural Resources and any state agency, department, authority, commission (excluding the commission), official, or board that has current custody and control of the proposed lease premises must execute the written grant and conveyance of lease, each indicating by the execution that it or he has no objection to the granting and conveying of the lease; and
11. Notwithstanding any other provisions of this Code section to the contrary, when it is determined by the commission to be in the best interests of the State of Georgia, the commission, acting for and on behalf of and in the name of the State of Georgia, is authorized to grant and convey to any eligible person, as defined herein, an oil and gas lease which authorizes such person to extract and remove from state owned lands all oil, gas, and affiliated hydrocarbons and gases without the necessity of complying with the public competitive bid procedure set forth in this Code section, subject to and upon the following conditions:
    1. "Eligible person" shall be defined as any person who is the owner of the oil and gas interests in lands adjoining the state owned land sought to be leased by said person such that at least 75 percent of the boundary of the state owned land sought to be leased is bordered by said adjoining lands. "Owner of the oil and gas interests in lands" shall mean the person or persons who have the right to drill for oil and gas on those lands and appropriate the production either for himself or themselves and another or others. "Oil and gas" shall include affiliated hydrocarbons and gases;
    2. Upon application by any interested person for an oil and gas lease pursuant to this subsection, the commission shall determine whether or not the applicant is an eligible person. If the commission determines that the applicant is an eligible person, then the commission is authorized to grant and convey to the applicant an oil and gas lease covering the state owned land sought to be leased and described in the application without the necessity of complying with the public competitive bid procedure set forth in this Code section. Nothing in this subsection shall prevent the commission from complying with the public competitive bid procedure set forth in this Code section when leasing the state owned land described in the application or any other state owned land if it finds such procedure to be in the best interests of the State of Georgia;
    3. The application for the oil and gas lease shall be in writing and shall contain a request for an oil and gas lease; a description of the state owned land sought to be leased; a locational, dimensional, and directional sketch in a form acceptable to the commission or a plat of survey of the state owned land sought to be leased; a true statement that the applicant is the owner of the oil and gas interests in lands adjoining the state owned land sought to be leased such that at least 75 percent of the boundary of the state owned land sought to be leased is bordered by said adjoining lands; copies of all oil and gas leases or deeds to the lands adjoining the state owned lands sought to be leased and by which the applicant claims the ownership of the oil and gas interests; and a list of the names and addresses of all owners of the oil and gas interests in the lands adjoining the state owned land sought to be leased describing the nature of their interest. The entire application must be in a form acceptable to the commission;
    4. Any lease granted to any person pursuant to this subsection shall be subject to subsection (g) of this Code section;
    5. Prior to the execution of any oil and gas lease pursuant to this subsection, the commission shall enter into an agreement with the department or agency which has legal title to or custody of the state owned lands sought to be leased. The agreement shall contain the department's or agency's certification that the state owned land is available for leasing and such other terms and provisions which the parties to the agreement deem necessary to protect the state owned land; and
    6. The form of execution by the commission, who is acting for and on behalf of and in the name of the State of Georgia, of each oil and gas lease shall be as set forth in paragraph (5) of subsection (j) of this Code section.

(5) The form of execution by the commission which is acting for and on behalf of and in the name of the state of each such lease shall be as follows:

STATE OF GEORGIA Acting By And Through The State Properties Commission By: ______________________________ (Seal) Name: ____________________ Title: Governor as chairperson of the State Properties Commission Attest: ____________________________ (Seal) Name: __________________________ Title: Secretary of State as secretary of the State Properties Commission (Commission Seal) (State Seal) Signed, sealed, and delivered (as to both the Governor as chairperson and the Secretary of State as secretary) in the presence of: ______________________________________ Witness ______________________________________ Notary public My commission expires ________________________. (Notary public seal impressed here)

(Code 1933, § 91-110a, enacted by Ga. L. 1973, p. 857, § 1; Ga. L. 1975, p. 1092, § 1; Ga. L. 1977, p. 762, §§ 1, 2; Ga. L. 1979, p. 1028, § 1; Ga. L. 1982, p. 3, § 50; Ga. L. 1982, p. 857, §§ 1-6; Ga. L. 1985, p. 149, § 50; Ga. L. 2005, p. 100, § 16A/SB 158; Ga. L. 2006, p. 72, § 50/SB 465.)