Hon. Joseph C. Ternus         Opinion No. V-1323.
County Attorney
San Patricia  County          Re:   Applicability  of city
Sinton, Texas                       ordinance regulating
                                    mineral development-
                                    to county owned land
                                    within city limits
                                    leased or to be leased
                                    for mineral develop-
Dear Sir:                           ment .
             Your letter  requesting the opinion of the
Attorney General advises that the City of Sinton has
In force an ordinance regulating        oil and gas develop-
ment within the city limits.       The ordinance regulates
in detail all phases of the drilling         and operating
of oil and gas wells within the corporate limits.            It
divides the city into “drilling       blocks” and allows
only one well to be drilled      on each such block.       A
i;;y;tdmust    be obtained from~the city before a well is
         . If more than one oil or gas sand is encoun-
tered, one well may be drilled       into each sand. go ap-
plicant will be granted a drilling         permit unless he
holds 011 and gas leases or drilling         contracts  from
the owners of fifty-one     per’ cent of the mineral lease-
hold estate in the drilling      block.     All owners of mln-
era1 estates in the block are to receive their propor-
tionate    share of the proceeds from the well.
            San Patricia  County owns land within the
city limits,   including that on which the courthouse is
located.    You are concerned as to the effect   of the
city~ordinance    on the mineral development of this land.
            Your specific   questions   are as follows:

             “(A)    Prior to the enactment of the
      ordinance the county leased a small tract
      of land situated within the city limits
      and followed the procedure set forth in
      your opinion V-582, and the well was
      drilled    prior to the ordinance.   After en-
      actment of the ordinance a different      sand
Hon. Joseph C. Ternus,      Page 2    (V-1323)


      has been found and the question now
      arises whether the city ordinance would
      prevent the lessee of the county from
      drilling  into this new sand and paying
      to the county its full one-eighth,    or
      must the county share with the other
      owners of the drilling    block on which the
      land Is situated in production of this
      new sand. The position     of the county is
      that this particular   lease and the subse-
      quent new sand is not bound by the city
      ordinance, which was enacted subsequent
      to the making of the lease.
            ‘Ii B) Concerning the block of land
      upon which the Courthouse is situated
      there has been no lease;   is the county
      bound by the city ordinance or may it
      lease the Courthouse square following    the
      procedures set out in your opinion V-582.”
             Cities may validly       enact such ordinances
under their police power if the ordinance expresses
a substantial     and definite     purpose to serve the pub-
lic and the means prescribed         bear a r asonable rela-
tlonshlvp ~otth~facc;~nllsbment         of tha ! purpose.
H m-3        iY       ox    4, 32 F.2d 134, 67 A.L.R. 1336
(:.C.A.‘8th,     1929, cert. den. 280 U.S. 573);
Qil Co, v. RalFiadi;oC,                  12 F. Supp. 19!?%?;.
Tex. 1935); Ip3rc 0                  Railroad C       Sig
F. Su;p. 20; (S.D.Tex. 1935)'. Klenak vom&m~l~ 611
&R      nlnrt Q 177 S.W.2d 215 (Tex.Civ:App.            1944
error ref. w.iZm.).       The ordinance of the City of’
Sinton meets these requirements.           sunder its police
power the city may not only regulate mineral develop-
ment within its limits,       as here, but completely pro-
hibit mineral development within the city llmlts if
necessary to protect i;d serve the public.             Marble-
bead L d Co           Los    bze e y+  47 F.2d  528  (C.C.A.  9th
1931, t&t.      de:: 284 U.S. 63’).       For a complete dis-
cussion of the validity        of city ordinances regulating
or prohibiting      mineral develo ment within city limits,
see Annotation,      168 A.L.R. 11 E;8.
           In Attorney General’s Opinion V-582 (1948)
it was held that Article   54OOa, Vernon’s Civil Stat-
utes, governs the leasing of county owned land for
mineral development and that this article   does not au-
thorize the county to enter into pooling agreements.
Briefly, Article   54OOa provides that such land shall
               ,
Hon. Joseph C., Ternus,   Page 3   (V-1323)


be leased by the governing body of the county at
public auction,  after prescribed   advertising,  to
the highest and best bidder.     At least a one-eighth
royalty is required to be retalned~ by the lessor.
             The ordinance ‘in question controls    and
regulates    only those drilling    or operating oil and
gas,.wells.    The county does neither. ‘. Of course, the
county ls’affected      by the ordinance in that its les-
see oannot obtain production without pooling the
land leased from the county with the other land In
the drilling     block.   It prevents the countyQs les-
see from developing the county”s land as a separate
tract,   and forces him to unitize     county and other
land in order to obtain :production.
            we have found no State,statute       with which
the ordinance conflicts.       The ordinance in no way
prevents the county.from leasing its land in acoord-
ante with the .provisions’of     Article   54OOa. It does
not prevent the county from ‘leasing its land at pub-
lic auction or from retaining      at least a one-eighth
royalty.    As pointed, out, it does require the lessee
to pool the land with others~ before drilling.         It is
fundamental that all mineral leases are executed sub-
ject to the legitimat~e exercise       of police power by
governing bodies.     True, we held in Opinion V-582
that the county governing body was not authorized to
enter intb pooling agreements, but this in no way
constituted   a holdfng that leases executed by such
body were not subject to ,a~legitimate        exercise of po-
lice power, forthe    protection   of the public health
and safety.
            .It is clear that the purpose of Article
54QOa is to insure that governing bodies of politi-
cal subdivisions     shall secure~~the best possible  min-
eral lease on their lands, not to exempt mineral de-
velopment of such lands from valid police regulations.
It does not. entitle     a county to have its .lands devel-
oped fn a manner found by the city to Injuriously       af-
fect lives,    property,   and the public welfare.   The
county’s land within the city limits is subject to
reasonable police regulations      of the city,   -
Llano v. Llano Counte 23 s 0w0 1008 (Tex Civ%$+
  8      Citv of Vi&o&a       v, Victorfa  Count O94 s”,w.
36g3)($ex0~iv0~pp. 1906 reversed one other g;ounds,
100 Tex..438,     101 S.W,‘190).
Hon. Joseph C. Ternus,   Page 4       (V-1323)


            In answer to your first   question     you are
advised that the county’s lessee must comply with
the city ordinance in drilling     a well into the newly
discovered   sand. The fact that the lease was exe-
cuted prior to passage of the ordinance does not ex-
empt the lessee from the provisions      thereof    as all
parties are considered to contract     subject 40 legiti-
mate exercise   of police power by the city.       Adhi
v. West js&&zL,       51 F. supp. 532 (E.D. 111. 19%;
30 Tex. Jur. 121 Municipal Corporations,         Sec. 58;
Annotation,   168 A.L.R. 1188.
           As to your second question,   the ordinance
does not prevent the county from leasing its land in
accordance with the provisions   of Article  $OOa,
V.C.S.   The fact that this statute does not authorize
the governing body of the county to enter into pool-
ing agreements in no way prevents the county’s land
from being pooled with others for mineral deve$;;m;enE
where required by a valid police regulation.
see of the county must fully comply with the city or-
dinance in developing land leased from the county,
and the county may accept its share of the royalty un-
der units pooled by reason of the city ordinance.
                            SUMMARY
           The mineral lessee of county owned
     lands located in ~a city must comply with
     a city ordinance regulating  mineral de-
     velopment within Its limits,  even though
     the lease was executed prior to en&cement
     of the ordinance.
            An ordinance of the City of Sinton
     regulating    mineral development within its
     limits,   requiring pooling of county owned
     lands with others for mineral development,
     does not prevent the county from complying
     with the provisions    of Article %OOa, V.C.S.,
     in leasing such lands.
                                  Yours very truly,
APPROVED
       :                            PRICE DANIEL
                                  Attorney General
Jesse P. Luton, Jr.
Reviewing Assistant
                                  B
Charles D. Mathews
First Assistant
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