                       OFFICEOFTHEATTORNEYGENERALOFTEXAS
                                         AUSTIN
   eaOVEll        SCLLCRS
       ~lToa”cI    emlsmu




loa.       Oibb Ollohrlrt.
tmridant,             Agrioultural      and
~@ohwhi0al Oollrgr               0r   Texar
mllogo            Station,     Tour
mar sir:                                 OpinionPO.         O-7088

                                         RI:     Method  of mla
                                                 oil,  gas, rulphur and
                                                 loaror on land ownrd
                                                 Text38   r0r   the   wo   or




           c 4he&lk spaces
tqehed.lelbje
                        in -
                forn+hQuldId   bti4
                                         r~dgrapht, 2 and 3 and 5 of the at-
                                       led in prior      to edvertieezent     in ao-
oordeno\a w&h the’..   of$d’
                           r,   decisions.      In  this   oonneotlon,    the   maxl-
mm   "expkd     ory" $ erm,ie   five years, but the Boerd is authorized
t0 select “on3 \eh@ter,. ‘terr..     ?he rAnlmwz royalty      1s **1/8~of the gross
production    of oil,, g&s, sclphur and other mlneralsvl, but tLe loard
may place ads lease on t!!e mzrkat et e higher royalty.                 The ffilnlrmn
delay rental h’One      Doller      er aore, but a higher amount my be fixed
by the Board in advanoe of t he advertlse~~:rent.

                    The queetlons      asked in your opinion request will be
quoted and answered               below in the ‘order in whloh they appear in your
lqtter:
                Pl.          2a:. t!ze 3oerd    of llre2tors      of the -. ir !‘. Jolleee
          dslecate          to the Zuslnsss      :.ent;er  of    the 20113t:s 2~thC~lty
          to advertise          for   sale    (by tr;a &zrd;      ht zubL?c auction,    011,
                                                                                     ‘41.3
 uoooorable Clbb Gllohrlat            - iage    I!


           gas, aulptxr and other daerel  loasea on land under
           it. lxolualrr oootrol ovnod by tbr .-tit0 or Taxa8 ror
           fb0 us. OS toe Collegm sad itt dlrlalona?"
                   Tbo first     parecrrph     of reo.   S of Art.   36X50-3 roads
 lt r o l;wr :

                  “900. 3. Khenever, in the opinion 0r thr merd, there
            shell to ruch a demaz16for the purohaar of 011, g a s,         lulphur
            or other mlorral lraroa 0r1 .eny tract       or prt or any trrot or
           lmd    as will  rra@oBably laeuro      on laraatsgrour   sale   the
           Board shall     laoo luoh oil+ gac, rulphur or other &ore1
           lessor on ta8 d land on the market in auoh treot or trtota,             or
           lnl part tt..rreof,    ne tha Eoard mu deelgnatr.        lt  ahall oauaa
            to br edrertlaed    l brler   tloaorlpt I on of the lend rrom rhloh
            ~~~a~~l~, err    rulphur or other mlnrrala lo proporrd to ba
                       3uo& ldtrrtleemeat     shell be aede br insertlag       in two
           .or mori paparr or gonerel ~lr~uletloa~ln,f~lr         ,3*ata ent.la:~
           lddltlOn the Eoerd mey, la lt8~ dl66~~tlOn,: OrUa@,~ul.d.,rd~~rt~ar-
           moat to bo ptood           In l
                                         qIClJw,&
                                               OIr.cJoo~li~b~;irb'~a5~,-~i
           or-   thr   3trt0,0149 m.IJ.. 85 #Irr .or.:qmD,,p*jboa&,~;: cicZ$@*~’ :i,:
                                ana                                                 :
           OOunty jUdg@ Of tbr OOUxitywhan ahld b*lda ir&l66itOi$~';i'~~d':
           me11 aoplrr of suoh Froj;oralo to ruoh other prisons es the,Board
           tight think would bo p&twFetad thoro,la.J,,

 by tho      body, do8l#mtod.,by~ lar.eadk tb~-t.y~ ttoy:.:+,tiot- bo~,daSogato~~to
’othora.       Thlt la pertlouferly.~  t~um di .dtitlrr,whloh      oeil i’ rot ~Mio: ox-
 oro~ao      of roaaon or dlaorotlon.     Bowever; 8 kbard may. deleeet4. mln-
 latorlel   or ldalnlatretl+4    funot%Ons,nOt os:lln~     for th4' lxorol~a4
 0r  roe80n or dlaorrtlon     by lppolntlag  ego&r tO.pOrrOrm      dutlea.bf
 that oherector.     54 Tar. Jur. 439, ("iubllc     Cffloorv,     f40. 7Q):L'orne
 Loologioel   ,&ran4 Co. v. City of Dallas.    45 ':,.(ZdI     714, (Tcx. Clv.
 APF. 19313
               It wlll bi: noted from e res@?nc cf t>e st;t,it.a qaottd
 qbooe t?m t raacon or direration        lr Involve6     1~ t>a bcarG*r Ceter-
 mlnetlon that stick (I Ctznnd exist6        for tka ~urc~ese ;I le~fet          on ety
 tract or land or pi;t of ar.y trpot ~5          ::I11  rcczcnnbl::   izszr.c   sn  >d-
 Vent6Eecuc oole.        In our oplnlon    i.)?e bard    c.cnnot  ielc?erc     thl~
 discretion    of Ctterminlrt    rkan a& tract        or treats should be ,-laced
 OII the murkat for lrtain2.        ~onerer , once the 3osrd has mtde thie de-
 tsminr.tlon     and haar drtezmlned the nnnner of pJbllo~tlon             in scoord-
 6noe with the statute quoted, thoa tbe cclrrgln& aat sf theae decl4lona
 la marely a mlalsttrlsl       fxctlon,    v;hioh m&y be delegated.           Therefore,
 eubjcct    to the r8~ulrcnent :knt :*.a bcerd 1s to exercise'lt~;              OWI die-
 Cratlon In makIn 411 ~dec$eloz~s, '(t'r) rnswtr your ;centltx             zzbcr    cn4
 in the affirzctlve.
                                                                                                            414

    gonorable
            CIbb Cll&rlot                   - roe..,3


                     Cuootloa No. 28

                     -can the BOrSd       or Dlrootoro or th8 .i. & f:. cO1hgO
            60196otr, to      its     Sroeldont or to thr Errrldant or the
            CO11060ruthorltr
                           to8
                     (0) rolllt pub1108uotlon                    loereron 011,##a, oul-
             phur sod other mlrrrrlo
                                   on load rmdor lto lroluolro oostrol
            omod by the Stota or TOXOOror the POO or the Collese
                                                               -~ WY
            it. alli olono) ‘,
                     (b )   do to mlw        th a t l     ortlotaotory         bid     hor    boon roooir.d
            lab     makeon rword to tin blddor OWrrlag the hl&heot                                 prior,

                     (a)    rojoat        rll other bide,        md
                     (a)---
                          rxrautr a          loerroa thr         l     proved tora la favor of
                    biddW+fOTbI~             th. biC+t          Dt ip080". . ,;
                    The ‘ihad         ‘+a(riph’      ioi Eoo.     t,      Artldie       ,q6158-S, ,,pro-
““~+lboi~:ln:‘puf’.*r    i. ~o~~oujra,;;,,$,,;~:, ;;; ;
                  <-z4 .~~                                           - .... :,.‘, :,..,; i !’:;‘?Y.,
                                                                                                 ;i~    i
                  “Tb. Board ma: 'eel1tb. loarc or lrroro to tbo M&hoot
            blddar at publfo motion   ct   the   Agrioulturrl and :soohmlool
            Collrgr of Toxao.Colloge     Station,   Torso at any hour botwoen
            1O:OOa. sbaae ~;OO,p.m.Tha aoor4 old1 hare the right to
            njoot      all%ldr;~::~: .:, ':
                     Sro.   8 0r ih0 oa~co lrtlolo              protldii~‘ia           part’*0         r0ii0w0:
                    ‘Ii in th8 opinion of fho Board any one of the bltldoro
             ohall her8 oirrrad a rwoonablo~proper          prloa ror nay
             traot and aot lerr than tho.prloo    rlqd  by the board,     the
             lundo aO+ertiaod    may be Ieased ror 011, ear, sulpbur add/or
             other nlnoral purpoooa under the tern% or ttlc      ,:.ot, and suck
             rsgulrtlono.  ea t$r 50~~6 may preeoribr,  not lnooarlstant      with
             the prorlslona          cf    thir   ;tct:
                     5e.o. 3 of the aam artlolo                 ?rovldos          In >art as follo*s:
                   "lf thr tioard ehall detormlnr that l ~atlafoctory   bid
             hsc Non rroo~lor         raid 011, as,  Fulphur and/or other
             mlnrral lrndo it ohs11 ~rocopt" the camo an6 rojbot all Other
             bids en4 rllo orid aoo-ptod bid in tho Canoral Land Lfflco.*
                     subpare&raph          (a)    OS So.      7 of the oamo artlolr                    proTl6er
    ,a0 roiiowc:
                   “il :ht~?o*rd    Chbll drtor-2lr.s thst a %6tisf%c?.cry Sld
             hcs beal; receiveFl.3r    seld 011, nor, r;rl;Y.ur c3dlor tt'zer
             3lneralc,   It ~111 rinks an msrd to ‘hb tidder Ofrsr!Ef       tf?e
             hlghoct price thororor,      end CI loam ohell be illad    in the
             Seaera    Idnd -rrm.-
                                                                                               41.5

   goaoroblo      slbb Cllohrlrt      - ilgo”‘4~


              Tha gonoel     n~lo~rlt~ ro(ord to dolraatlon    O< duties
  by QUbliO OfYI~er8 lo ototod uador quootlon 1 above.         tlkowloo
  it is ma lloaoatory    rulo oi tho law or lg o a othat,
                                                      y      la tbo lb-
  los08 oi llthor oxprooo or Impllad wthorlty        th o p o wa r l
                                                                   ontr u~to a
  to  oa ogoat rannot bo ~ologotod,    aa& this do    IO portloularly
  lppllooblo whoa tbo oxoraloo of tho powor ooaforrod lnrolroo dla-
   orotlon.     2 Tax.   Jw.     471 (*A6eary-,      $00. 761
                   la the ‘oiro or Born. i~o1o~1o.1 ANU co. v. city or
   mlloo,      lugm,   it was hold that tto Cltv Park Bowa oould not
   dO1O~dO  t0 the filWtOt Of Frrkr    the QCWO?‘tO aoko ContraOto iOr
   tbo wwohooo ot lalmlo,    the oourt  ltoting la lto oplnlon that luoh
   0 board oa-not do~ogoto to other8   tbo dlrobwgo   or duties whloh aall
   ror roaooa or dloorotlon,  md uhlob are regard04 (8 a pert    or t&o
   pub110 trurt locumad by tbo umbrro or the board..
                  “Thi’ 8bOd'quot.d ~~o~l~Iono oi thr 8tatute 18 quortloa
   olurl       ooatrnploto    'that the (llrorotlon,lavol~trd      la orlllng   1000~0,
    4rto   rd al-   what  bid As aotiolooto~,~      gnpd roj~oofing othor bl&o
.‘-*itill.   b~exo?olrrd. br thc’Zom4;‘.ia&“Wogr            oplnloa tho Board ‘bar
    00 lutborlty     to ddO&NtO tho lxoroloo ot’that          -dloorotIoa    to tbo
    Prooldoat . So thorororo mowor hour question               Ro. e la tbo aogotlve.
                   ;;uretlo.n Ho. 8:
                  *:t tbo laowor tothi   above ~watl&o                 lr    in   tho   aogative,
            o a atho luotloa bo hold without the Ward                 of Z!lrootoro         bring
            la l08010a7           ,.
                 lfr 00, oui the luotioaoor      ray ‘aold* or oaa bids bo oo-
            ooptod oalr oubjoot to tho lpprotal of tbe Board of Dlrootoro
            on6 tho sale be doolwrd     *oloaed'   rubjoot to ouoh lpproral?”

                   Saotlon     1 of Art. 2613a-3       roads   in part      a8 follows:
                    -:oc.   1.  Thst thr 30&d of ?lreotors      or the kgrloult3rel
            and Eeohmloal       Collebq of Zexac 1s hereby autkorlzoC an4 en-
            Fowerod to leeec for 011 end/s           EF and/or 5ul>tmr sa:!/cr otktr
            nlneral devaloymnt         to t:@ hl@rat    bidder at public euotioE all
            lnnda ueed lor errerlmntsl         et*.tlono mC 811 other lends undsr
             itr   cxolueive   control or any part tkoreof now ownod by the
             :.tato of Iexao and loqvlrad ror the uee or the +.rloultu~sl           and
            lLeo~ealoa1 Collo~o of Fsu8 and ltr dlrlslonr          or th:.t may hera-
            after br aoqdrod        for the use of the ;~~rloulturrl    end Uecheni-
             oal Colla.gr of Ieras and its dlvl8lons.”
                   The aocond prapra+             of 7.00. . of the      fmme ~rtlcls          rsaCs
   f5 fcllo:~s:
nonoreblr     GIbb Ollobrlrt         - Sage 8
                                                            _.    .         ,.


              -‘Sea. 3.   The Eoerd may eel1 the lease or leeeee to
        the hlqheet bidder et pub110 luatlon et the Aerioulturel
        end 2eahealaal    Colbge of Toxee, Collage .~tetloa, Texee,
        et 607 hour botrrra 1O:OO ea.       cob b:OO pa.    The Poerd
        ehelf bate the right to rejrot lll bidr. Kowerer,        the
        hl~hoet bid&r lhell pet to the Board on the day of the
        eel6 twrnty-flrb    pm oent (&!a:) of the bonue bid ead the
        belenoe of the bid ah611 be mid to the Poerd rltbla         tnonty-
        four  (E4) hour6 lftrr bring aotlfled     that the bid be boon
        lOO6Dt.d.    Fwmaats ehell ba paid la 666h. eertlP.~d awok
        or 066hhr'6     oheok, le the 30erd aa dimOS8 DrmidOd; tha
        feiluro to Da7 tha    belenoo  of the amount bib will totfelt to
        tha Boer4 the Twentpflre      per oat   (ES{) *id.*
               Soo.   5 of the 8elcIe lrtlole           reede           In pnrt    le   follow@:
               “Se.0. 5.     If in     the   opinloa        or    thr      3oerd     an7 one ot the
         bidder8 ‘ihall Iwo   off4rrd e roaronablr                         and   proper    prloo for
         any troot aa4 .aot leer then the prior                         fixed by the Boerd,
         the lend6-6d+artir6b..ory.ba              lo6erb        for.oIl,        ~68    6UlDhUr end/
         or 'other mlnorrl. .$argoeee arbor the teN     .of ~thfe   Aot, end
         lt~ooh.ro&uletioae ‘aa thr board. may, proeorIba;~i sot ?InooaeIetoat
         with the protlelone    of t%le Aot. In the @tent        nq bid 18 eo-
         oegted by the Bocrd et pub110 luotion lny eubee~~uent grooodure
         for the eels of oil end/or tee lnd/or.solphur  end/or other
         rlnerel leeeee ehell be In the mconor above J;rovIGeQ.”
              St. 16 lpperont  i&e thi. ib&.    +oridloa~     pt. tbe etetute
.tlWt  th. method Ol.&lO ie~by’publlo      lNtlon    but t&t     the Board
 ohall ha+6 thr rlfht to rajaot all bid6 6ad IO not rogulrrd to ec-
 oept  6 bla that 16 no t   letideotory to the Board. fn our opinion,
 homvor,   trots the lenguege quoted,the    Legieleture    in wleotlrlg thle
 etetate did not oontoei~lete    th a tla luotloneer    should &etermlne
 the eooepteblllty         of the hl@est      bid end oloee the ecle.             ‘In06 tl-te
 rtrtote   ~.?oes tc the Fosrt t!m dleoratlon              of detcrr-,lnlny &ether
 any one of the bidderr. ht.6 offered           B *reoeon:tlc        and ;ro;cr      ;.r?cr.-
 6nd wbetker it lr a 'eat!sfsctory             bid“,    and since it turt!ssr gives
 the ?or;rC the right to reiect            all bids,    t.k:s ;wial?ture       Lust %vc
 conts~;~lstnd      :.c::t t’:o -c..:r? wx:C c:r,5ltier      the tlCc snC within II
 re-.FomSls      ti-e meiie 5te ~ec?elonr        tliere&n.      ‘rot 1k.e ;usliZic:itiont
 rtgfed,   it 1~ r.:F’.rer.t tht         the ::.flslsture 6!d cGt. intene           83 ':Uk-
 lit auction” in the ordjnsry eeone of :kst tern.                     ?te ra;nlrekent
 state0 la .eo. 2 quota! above t!xt             the hi@mr;t bidder         a!xll     ?a? to
 the I;oard on the dsv of eale .?5’ of th bonus bld cat2 the bslanoa
 of the bid ahall be-;e?C ts the FosrC *ltkln                  ?C Scum sfter         beln
 notified    t!-.at the bld !?*e tern aooe .tsd 1nCloata ttxt em8          -----Id
 of tlze wee oontezplated           .betreen tak5--oc fhe bids an6 t?.e %erC’e
 dec,l~ion PE to whether t”.r tj$.ke?t bid ~t.0~16 5:r? -cceF,ied.
Honoreble      FJibb Gilohriet     - Face a


the bl6e      without teklou   at17 notion thereon would be 6 mere mini-
gtertel      sot not lnvolrlng    4leoretlon,  we see DO objeotion to the
Board’s      4elegetlog   thie funotlon.
            Theroforr,    in lo ewer to your queetioa  No. S, It la
oar opinion that the suetion ban be he14 without tbr Board or Dlr-
leto r being
        e       In leeeion; but that the luotloaoer    oennot say weol4*
gad that bide oen bo iooepted only lubleot to tbo approval of the
mar4 of Dlnotors.       fn this   oonwotlon  it 18 IWther    our oplnlon
?&et the person deel~nsted by the Boer6 to reoel~e ,blee shell per-
form the aInleterlel    funotion of deternialng    the hlgheet bonus bid
end 60 InfOrarine the biddora in order that the highest bidder may
pa7 to the Boer4 25$ of thr bonus bid on the day of the lele In
eooordenoe with the statute.
                queotlon    No. 4:    ..
                     .,,,    _~ ~~ ;::i                     .,;
             *Can thorr,br more than on0 trrlrble      In-the (1) bonus,
       (8) royelt7 an4 (5) 4ele~e4 ranta> paymonte or.muet all but
        one be flsed~ b the .Eocird of ‘~Dlreotore {In ~4ienoe or thm
       ldrertleeaent  /WIthy a ~-midmum $ixee .bt 6614: Boasqror  the E
       m.*
                 Sec.   4 of the statute    ln~queetlon   reeds es followa:
                              ...z                                  _.
                  *Sea. 4. A reperete bid ahall be me&e for ieoh           treot      or
           lub4lrldon     thereof. ~1:~
                                    ~.,Nobide’ shell’ be;~‘eooepted whloh offer e
           Myelty OS leee’~tben one-righth        (1/8th)  of thc&oee      produotlon
           of oil     ear, lulphur and other    minerals in the la!14 bid upon
           end tbje minimum ro7eltv      me7 be iaoreeerd     et the dleoret~ion of
           the Board.     Every bld shell oerr       the obllgetlon    to pay en
           amount not leer then One Dollar T31.00) per sore ior delay in
           drilling    or derelopment;   euoh amount to be fixed by the Roar&
           in advanoe.of the advertisement        and shall be paid every year
           ror five (5) years unloae in the meantlme production  In pay-
           lng quantities  Is had upon the land or aald land la re-leased
           by the Ies:ee.*
             It ail1 be noted that the above provision     speclflce?ly
requires   that the delay rental be rlred by the 3oerd in sdvance Or
the edvertlalng.     AZ to the royalty,   the statute rlres a minimum of
one-eighth   of the grosa prcduotlon,   but   provides that thie wmlnlmJ~
royalty may be Increased    at the dlsoretlon    of the Eoard.*
               In Texas an 011 and &as lea66 amounts to e grant Of a
‘determinable    fee estate In the 011 and cae In plaoe.              That la, If
 the 1ea:e provides for a one-elgbth            royalty,  it Is a conveyance of
 en UndfpiCed seven-eii?te        ‘interest    in the 311 end. -s& in T~SCC,      p:b-
 jsct to reversion.       :!3refore,      if tie royalty    z.ere left lndefinito
 so tF.c;t bidders   cxld    iid on r;yaities,       the estate 2 interest       in
 the mlieralr     oTtered ror sale xould be lndefinlte,           an& the bidders
Honorrble                Clbb Cllotrl#t        - iaea   7


mould not bo orfrrlae  to buy the laa~o Interest.      ror lxomplo, fr
oa# pereon bid oao-•lubtb    royrlty,   8a4 8aothrr bid Oar-rourth royal-
ty, than uador our theory of ownership or 011 sad ear, th8 form-r
mu14 ba Otiorlnq. to buy on ua4l+lUod reT*n-sights intorrat,        where-
lc the latter would bc. offsring     to buy aa ua4irldod thr88-fourtha
laterrat.  fo our ogfaioa bldr or thin 6horootrr nrr not aoatm-
plated br thr Laglrloture.   In ddltion,  tbr pblrcor ‘MC of the
bonur bid” 8~4 *a rroronobla  sad prover prison ~~14  4~81 to contern-
plats oooh bonus bldo oalf.
                          Tberlfofb, in oa8war to your queotloa  No. 4,  It $8 our
O$dliOll              thrt both the dOlay raatal Fav@lit 8a4 the rOyoltJ muot bo
tired               by tbr so&r4 oi Mreetoto in ldto a o e of tho l5wr tlo la a .  ld
that               thr bonus blQ fr tho oall varirbla  prmitted   under the rtrtuta.
                            ~.ueotlonh’o. 8:
                            -%a~ un7  doyr ia rdtanaa 0S tk olaotloa                 rrlr   rhould   the
                   aotlae     of the rrlr be wbl$rhrb?”

                The #tatUte dOOi nOLOtptoT$d@ hoti uay dayi ik l4TOaeO OS
the motion rllr tha notloo of ralr shout4 be pubtlrhod.                       COO. 3 of
th    AytiOl@,~    Qu0t.d   U’?dW   yOUr  QWOtiOl3    NO.  1   FrOTid.0   tht   the 84.
rertlrezmtn        oboll bo nm4e by inorrtin& aon8 1n two or more pwrr
or gooar        olroulatlon     la. thir    teto 8~4, la the Poord*o dlroretloa,
lo. ln 011 aa far. journal,           8nb b7 molllag.ooploo       to the oountp judge,
8tvl luah other prrono          :.c :te Eorrd sl4ht tkiti        wouL6 bo laterootrd.
 ipporoatly     the Legislature       414 not   eonrldor tlw      to be *or the es-
leaoe”,     md   la our oplaloa       tho ltatutory    r~gulrm~at      io m8t when thr
ldtertirmaoatr       rhell &TO      broa iarrrtrd in two or non          wpora or gwi-
lr81 olrOuletiOn la tblo itotr.               mea this re~Arrmont        16 met, the
length ot tiao at! well OS ciy 844ltloaol              publfaitf    to br sirea th8
ado ore matter6 slthin            ths d!soretioa of t! 8 3oora of Llreators.

                            InletlnF   t?l*t   the state    witlsf?ctcrlly      snsrer~      y-ur
quettlonb,                  ~8 are,

                                                             Yours   Wry     tmly,



                          .
                       \A-.                              9..
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                            ----- ----,    .           - > / ,,srfstaat
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