            TXEEA-~~OIKNEY               GENERAL
                           OP   vhcxAs


                                June 11, 1957



Honorable Earl Rudder
Commlasioner, Qeneral Lana Office
Austin 14, Texas
                     Opinion No. WW-155
                     Re:    Duties and responsibilities
                            of various departments and
                            agencies in the control and
                            disposition of 011 and gas
                            leases, and the proceeds
                            therefrom, of University
                            lands.
Dear Sir:
          Your letter of Hay 15, 1957 requested the opinion of
the Attorney Gneral upon the following matter:
          "It thus appears that there are at
     least five departments or agencies con-
     cerned with 011 and'gas leases covering
     University lands. In view of this fact
     and in view of the fact that there may be
     some area where responalblllty Is not
     clearly defined by statute, on behalf of
     the Board for Lease of University lands,
     I respectfully request that you give me
     your official opinion outlining In detail
     the specific duties and respo~elbllitles
     of the following departments or agencies
     particularly with regard to
            (a)   the filing of reports and ln-
                  strtimentsaffecting title to'
                  Unlveralty 011 and gas leases,

            (b)   receiving and accounting, ln-
                  eluding the Initial verification
                  of data, for royalty and other
                  payments made under the leases,
Honorable Earl Rudder, page 2 (No.NW-155)



          (c)    poet-auditing of the leasee,

          (d)    the adequacy of documents support-
                 ing 011 and gas payments, and

          (e)    amendment or extension of such leases:
                 1.   Commlaeioner of the ffeneral
                      Lana Office
                 2. Board for Leaee of University
                    lande

                 3.   Board of Regents of the Unl-
                      verslty of Texas under whose.
                      supervision the following of-
                      fices are operated
                           University Audit Section
                      ::   Midland Office- University
                           lands and geology.
                      C.   oil field supervision
                 4.   University Audit section

                 5.   State Auditor
          You mentioned Articles 2603a, 2603b, 5341e, 5382c,
44l%-13, V. A. C. S., and the Appropriations Act of 1955 as
having to do with these questions. None of the statutes you
referred to in your letter have received judicial lnterpre-
tatlon upon the points for which you requested Information.
          The Commissioner of the GenerallLand Office has the
following statutory duties:
          a.    He Is a member of the Board for Lease of
                University lands, Art. 2603a(l), V.A.C.S.
         b.     He Is authorized to,execute leases for
                the Board for Lease, Art. 2603a (8)(a),V.A.C.S.
          C.    He Is custodian for the surveys and data
                made under the powers granted the Board
                of Re ents of University of Texas, Art.
                2603b? l), .V.A.C.S.
          d.    He Is authorized to receive the full amount
                of bonus payments for leases, Art. 2603a(5)
                (S.B. 73, 55th Leg.) V.A.C.S.
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    Honorable Earl Rudder, page 3 (No. WW-155)



                   e.    He Is authorized to execute 011 and
                         gas leases and Is dirroted to keep
                         a cop thereof in his filee, Art.
                         2603a T 8) (a), V.A.C.S.
                    f.   He la’airectea   to extelicl leasee   under’
                        certain conditions, Art. 2603a (8)(b),
                        V.A.C.S.               \
                    g. He la directed to receive shut-in
                        gas paymenta, Art. 2603a (8b) (Id),V.A.C.S.
                    h. He Is directed to receive royalty'pay-
                        ments under leases and'may Inspect the
                        records of production of lessors, Art.
                        2603a(ll), V.A.C.S.
                    1. He Isdirected to receive surveys, re-
                        cords, etc., of University lands.
                    ii. He is directed to receive all moneys
                        paid under 011 and gas leases Art.
                        2603a(l4), V.A.C.S.
                    k. He Is directed to transmit all moneys
                        received, except the additional one
                        per cent special fee, to the State
                        Treasurer for deposit to the credit
                        of the Permanent University Fund.
                        Art. 2603a (14), V.A.C.S.
                    1. He is directed to transmit the addl-
                        tional one per cent special fee
                        herelnafter referred to as the 'special
                        fee", such "sp&clal fee" being pro-
                        vided for In Art. 2603a(l4),   which
                        statute directs that it be transmitted
                        to the Comptroller of the University
                        of Texas 'to be .dlsbursed according to
                        law, and especially according to the
                        provisions of Art. 2603a(5),   V.A.C.S.
                   The Board for Lease of University lands Is:
                    a.   Created by virtue of Art. 2603a(l),   V.A.C.S.
                    b.   Entitled to receive reports of 011 and
                         gas activities by the geologists hired
                         by the Board of Re ents of the Unlver-
                         slty, Art. 2603b(2's V.A.C.S.
                    C.   Confined to' roced&s     for lease by
                         Art.  2603a(4?, V.A.C.S.
                    d.   Empowered to~iease under the terms
                         and conditions set forth In Art.
                         2603a(7),   V.A.C.S.
                    e.   Allowed to prorate or reduce production
                         for limited period of time, Art. 2603a
                          (8) (c), V.A.C.S.
Honorable Earl Rudder, page 4 (No.WW-155).



      f.   Allowed to suspend the running of
           the term of a lease for limited
           periods of time under certain con-
           ditions, Art. 5341e, V.A.C.S.
           The Unlveralts Board of Renenta is given the following
powers:

     a.    It is given the duty to conduct
           surveys of University lands, corn-~
           pile records, etc., Art. 2603b(l),
           V.A.C.S.
     b.    It Is authorized to employ a geolo-
           gist and IS entitled to be kept.ln-
           formed of 011 and gas activities
           affecting University latidswhich
           this geologist discovers, A&. 2603b(2);
           V.A.C.S.
      C.   It is entitled to payment by the Com-
           missioner of the General Land Office
           of the "special fee" required In addi-
           tion to the bonus payments In oil and
           gas leases of University lands.,Art.
           2603a(5), V.A.C.S.
     d.    As members of the Board of Regents
           any member thereof may inspect pro-
           dixtlon records on oil and gas leases
           on production, Art. 2603a(ll),V.A.C.S.
     e.    It is entitled to receive the afore-
           mentioned one per cent from the Land
           Commlsaloner, Art. 2603a (lb), V.A.C.S.
          The University Audit Section is authorized by impli-
cat&   in Art. 2603b(3), V.A.C.S., and Ita services are paid
for out of the one p&&cent in addition to the bonus to be
collected as authorized by Art. 2603a(5), V.A.C.S. There ap-
pears to be no statutory provisions giving the University
Audit Section any special powers to dictate the type and
kinds of reports and instruments affecting title or records
of 011 and gas runs and It is submitted that Art. 2603a(l8)
would be controlling. This subsection qlves the Board for
Lease of University Lands the power to adopt such forms and
contracts and. " . promulgate such rules and regulations not
Inconsistent with the terms of this act, as In its judgment
will best effectuate the purpose of this act and best protect
the University, Its lands, and income therefrom." Thus, it
Is our opinion that the University Audit Section is rele-
gated to audit, rather than accounting duties.
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Honorable Earl Rudder, page 5 (No.WW-155)



          The State Au itor is authorized under Art. 4413a(13)
V.A.C.S., Art..&            A C S and Art 4413a(22) VA C-S.:,
to conduct audits, indep&d&C   if'the poweis illvested'in'tie
Land Commlsaloner, Board of Regents of the Univeralty df Texas,
or Board for Lease of University Lands.

                               SUMMARY
                         The duties and responsibilities
                 of the various State agencies with refer-
                 ence to the leasing of University lands
                 for 011 and gas, and the disposltlon of
                 the proceeds realized therefrom, are
                 governed by the provisions'of Art. 5341e,
                 V.A.C.S., Art. 5382c,V.A.C.S., Art.2603a,
                 V.A.C.S. Art. 2603b, V.A.C.S., and Art.
                 4413a(l3j, V.A.C.S.
                                         Yours very truly,
                                         WILL WILSON
                                         Attorney General of Texas




APPROVED:
    OPINION COMMITTEE
    H. Qrady Chandler, Chairman
    J. W. Wheeler
    Byron Fullerton
    Richard Wells
    REVIEWED FOR THE ATTORNEY
    caN.lqAL:
           Geo. P. Blackburn
