text:
(a) For purposes of this section, the following terms have the following meanings:

(1) “Decommission” means any activities up to and including the safe dismantling and removal of a production facility or related infrastructure and restoration of the site on which it was located as directed by the commission and in full compliance with state and local law.

(2) “Operator” means a person who has the right to drill, operate, maintain, or control a well or production facility.

(3) “Plugging and abandoning all wells and decommissioning all production facilities and related infrastructure” includes all of the following:

(A) Staffing and maintenance of all wells and production facilities.

(B) All refurbishments necessary to meet those obligations.

(C) Any and all other actions necessary to meet those obligations.

(4) “Plugging and abandonment” means the plugging and abandonment of a well in accordance with the specifications of the commission and the State Oil and Gas Supervisor and in full compliance with state and local law.

(5) “Production facilities and related infrastructure” includes, but is not limited to, platforms, pipelines, and improvements under the jurisdiction of the commission.

(6) “Well” means an oil or gas well.

(b) (1) On and after January 1, 2020, from the date on which a lessee, an assignee, a transferee, or a sublessee of a lease, or an operator of leased lands under this chapter, engages in an activity that is specified in paragraph (2), the lessee, assignee, transferee, sublessee, or operator shall become responsible and liable, until each obligation under this subdivision is met, for plugging and abandoning all wells and decommissioning all production facilities and related infrastructure that have been or may be left on the leased lands by the lessee and any past, present, or future assignee, transferee, or sublessee of the lease or operator of the leased lands.

(2) Obligations under paragraph (1) shall accrue when a lessee, assignee, transferee, sublessee, or operator does any of the following:

(A) Acquires or is assigned, transferred, or sublet the lease, including a pipeline right-of-way lease, if the leased lands contain either of the following:

(i) A well that is not permanently plugged.

(ii) A production facility or related infrastructure.

(B) Becomes the operator of either of the following:

(i) A well that is not permanently plugged.

(ii) A production facility or related infrastructure.

(C) Drills, redrills, or deepens a well, or permanently alters the casing of a well, on the leased lands.

(D) Installs a production facility or related infrastructure on the leased lands.

(c) Persons subject to subdivision (b) shall be jointly and severally liable for all obligations under that subdivision.

(d) (1) (A) The lessee, assignee, transferee, sublessee, or operator shall submit to the commission, in writing, a notarized affidavit of liability for the decommissioning of production facilities and related infrastructure under the jurisdiction of the commission within six months after the date on which a lease terminates or expires. The lessee, assignee, transferee, sublessee, or operator shall also covenant, in the notarized affidavit, to commence the process of decommissioning the production facilities and related infrastructure within one year after the date on which the lease terminates or expires.

(B) The decommissioning of the production facilities and related infrastructure shall be completed without undue delay, unless the delay is caused by conditions beyond the control of the lessee, assignee, transferee, sublessee, or operator.

(2) A lessee, assignee, transferee, sublessee, or operator that fails to comply with the deadlines specified in subparagraph (A) of paragraph (1) shall be guilty of a misdemeanor, punishable by a fine of up to ten thousand dollars ($10,000), by imprisonment in the county jail for up to one year, or by both that fine and imprisonment, for each offense.

(e) If the commission or another state agency, due to failure of a lessee, assignee, transferee, sublessee, or operator to meet its obligations for the plugging and abandonment of a well or the decommissioning of a production facility or related infrastructure, conducts those activities to preserve public health or protect the environment, those activities shall be deemed an exercise of the police power of the state.

(f) The commission may adopt rules and regulations as necessary to carry out the purposes of this section.

(g) (1) This section does not supersede or limit plugging and abandonment or decommissioning obligations under any other law.

(2) This section does not alter or limit the authority of the commission to approve the manner of decommissioning otherwise permitted by law.

history: (History: Added by Stats. 2019, Ch. 123, Sec. 2. (AB 585) Effective January 1, 2020.)


kind: section

code: PRC

citation: PRC § 6830

text: All oil and gas leases issued by the commission for lands under its jurisdiction as set forth in Chapters 3 and 4 of Part 1 and in Chapter 3 of Part 2 of Division 6 of this code shall contain a reservation to the commission of the right to determine the spacing of wells and the rate of drilling and rate of production of such wells so as to prevent the waste of oil and gas and promote the maximum economic recovery of oil and gas from, and the conservation of reservoir energy in, each zone or separate underground source of supply of oil or gas covered in whole or in part by leases issued under this chapter.

history: (History: Amended by Stats. 1957, Ch. 2166.)

division: 6. PUBLIC LANDS

chapter: 3. Oil and Gas and Mineral Leases

path: 6. PUBLIC LANDS > 3. Oil and Gas and Mineral Leases > 2. Provisions Relating to Oil and Gas Leases Generally


text:
It is hereby found and determined by the Legislature of the State of California as follows:

(a) That the people of the State of California have a direct and primary interest in assuring the production of the optimum quantities of oil and gas from lands owned by the state, and that a minimum of oil and gas be left wasted and unrecovered in such lands.

(b) That the state owns tide and submerged lands, which lands have been developed under oil and gas leases issued by the state to such extent that it is desirable that secondary operations be undertaken within such lands in an effort to obtain the maximum economic ultimate recovery of oil and gas from said lands; and that it is desirable that the carrying on of secondary recovery operations in such lands be encouraged, which operations the holders of such leases may otherwise not undertake because certain of the leases covering such lands provide for the payment of graduated royalties dependent upon daily per well rates of oil production (which, in the case of multiple completions, means the separately measured average daily production from each zone produced through a separate string of tubing or through casing which is not in communication with any other zone), which graduated royalties were established without contemplation of secondary recovery operations and the economics respecting such operations.

The definition relating to multiple completions set forth herein shall apply to leases executed on or after the effective date of the amendments made to this section at the 1966 Second Extraordinary Session of the Legislature and may, with the approval of the commission, apply to oil produced from leased lands with respect to which the commission and the holder of the lease shall, on or after the effective date of such amendments, enter into an amendatory agreement pursuant to Section 6830.2. It is not the intention of the Legislature in enacting this paragraph to declare the law relating to the computation of daily per well rates of oil production from multiple completions before the effective date of such amendments or in the absence of such an amendatory agreement.

history: (History: Amended by Stats. 1966, 2nd Ex. Sess., Ch. 7.)

article: 2. Provisions Relating to Oil and Gas Leases Generally


text:
Whenever the holder of an oil and gas lease of state-owned lands proposes to engage in secondary recovery operations within such lease, the commission and the holder of the lease may mutually agree to modifications of the lease in furtherance of such proposal and with the object of obtaining the maximum economic ultimate recovery of oil and gas from the lands included within such lease, so far as such is reasonably practicable.

Any such amendatory agreement shall contain provisions to assure, so far as reasonably practicable:

(a) That the total royalty production to which the state shall thereafter be entitled shall be no less than the total royalty production to which the state would thereafter have been entitled if such lease had continued to be operated under primary recovery methods, absent any secondary recovery operations, and (b) that the royalty production accruing to the state from the additional oil produced, if any, as a result of the conduct of secondary recovery operations shall be calculated and determined in such manner as to be at least as great in proportion to such additional oil as the royalty production agreed upon in conformance with subdivision (a) of this section is in proportion to the total remaining primary production agreed upon in conformance with subdivision (a).

As a basis for making a determination that it is in the best interests of the state that it enter into such an agreement, and before authorizing the execution thereof, and to determine the appropriate royalty rates on primary and on additional production, the commission shall, using all information available to it, make a calculated projection of the volume of primary royalty to which the state would be entitled under the existing royalty provisions of the lease for the zone or zones involved in the proposal, absent secondary recovery operations, and shall compare its determinations with those of the holder of the lease in an effort to arrive at a mutual agreement.


text:
In satisfaction of the requirements of subdivisions (a) and (b) of Section 6830.2, the commission may consider, use, apply or adopt any means, methods, formulas or data available to it in order to arrive, in accordance with generally recognized good engineering practice, at any provisions to be included in any agreement amendatory to the lease, mutually acceptable to the holder of the lease, including the rate or rates of royalty to be applied, and otherwise in conformity with the provisions of this section and Section 6830.2.

The royalty rate or rates to be applied during secondary recovery operations shall in no event be less than the minimum royalty provided by the lease prior to any amendment thereof entered into pursuant to this section and Section 6830.2, but nothing in this section and Section 6830.2 is intended to require that the holder of the lease shall account to the State for a guaranteed quantity of royalty production, but neither shall it prohibit the holder of the lease from guaranteeing to the State any given quantity of royalty production.

Amendatory agreements entered into pursuant to and in conformity with this section and Section 6830.2 may be made in conjunction with agreements entered into for the purpose of effecting a co-operative or unit plan of development pursuant to the provisions of this code, including Section 6832 thereof.

history: (History: Added by Stats. 1961, Ch. 979.)


citation: PRC § 6831

text: Rights of way through all State lands may be granted to any lessee by the commission under such regulations as to survey, location, application, and use as may be prescribed by the commission.

history: (History: Added by Stats. 1941, Ch. 548.)


citation: PRC § 6832

text: For the purpose of more properly conserving the natural resources of any oil or gas pool or field, or any part thereof, lessees hereunder and their representatives may unite with each other jointly or separately, or jointly or separately with others owning or operating lands not belonging to the State, including lands belonging to the United States, in collectively adopting and operating under a cooperative or unit plan of development or operation of the pool or field, or any part thereof, whenever it is determined by the commission to be necessary or advisable in the public interest. The commission may, with the consent of the holders of leases involved, establish, alter, change, and revoke any drilling and production requirements of such leases, permit apportionment of production and may make such regulations with reference to such leases, with like consent on the part of such lessees, in connection with the institution and operation of any such co-operative or unit plan, as the commission deems necessary or proper to secure the proper protection of the interests of the State.

history: (History: Amended by Stats. 1955, Ch. 1724.)


citation: PRC § 6833

text: The commission, upon such conditions as the commission shall prescribe, may approve operating, drilling or development contracts made by one or more lessees holding oil or gas leases on State lands with one or more persons, associations, or corporations, whenever in the discretion of the commission the conservation of natural products or the public convenience and necessity require it, or the interests of the State may be best subserved thereby.


citation: PRC § 6834

text:
Whenever the commission determines that lands shall be leased for oil and gas as provided in this chapter and when the form of lease therefor has been prepared by the commission, the commission shall give notice of intention to lease such lands. The notice shall be published in a newspaper of general circulation in the county in which the lands or the greater portion thereof are situated and shall state the time (which shall not be less than 14 days after the last date of publication of the notice) and place for receiving and opening bids, a description of the lands, either as a tract or by parcels, and that the form of lease for the purpose of bidding may be procured at the designated office of the commission.

If the notice is published in a weekly newspaper, it must appear therein on at least two different days of publication and if in a newspaper published oftener, there must be at least five days from the first to the last day of publication, both days included.


citation: PRC § 6835

text: Each bid (which shall be in the form of a lease prepared in accordance with this chapter) for an oil and gas lease shall be accompanied by a certified or cashier’s check of a responsible bank in California payable to the State of California in an amount to be fixed by the commission, which sum shall be deposited as evidence of good faith and except in the case of the successful bidder shall be returned to the bidder. Upon the execution of the lease the amount shall be applied upon the annual rental for the first year and the balance, if any, shall be returned to the lessee. If the successful bidder fails or refuses to execute the lease within 15 days after the award thereof, the amount of the check shall be forfeited to the State.

history: (History: Amended by Stats. 1941, Ch. 1241.)


citation: PRC § 6836

text: At the time and place specified in the notice, the commission shall publicly open the sealed bids and shall award the lease for each parcel to the highest qualified bidder, unless in the opinion of the commission, the acceptance of the highest bid for any parcel or parcels is not for the best interests of the State, in which event the commission may reject all the bids for such parcel or parcels. Thereupon new bids may be called for and the parcel or parcels for which the bids were rejected may be leased as herein provided.


citation: PRC § 6851

text: Lands owned by the State, or lands in which the oil and gas deposits are reserved to the State, other than tide and submerged lands, may be leased for the production of oil and gas in accordance with the provisions of this article and of this chapter in so far as not in conflict with the provisions of this article.

path: 6. PUBLIC LANDS > 3. Oil and Gas and Mineral Leases > 3. Oil and Gas Leases on Lands Other Than Tide and Submerged Lands


citation: PRC § 6852

text: Whenever it appears to the commission that it is for the best interests of the State to lease any such lands for the production of oil or gas therefrom, or whenever a person who possesses the qualifications provided in this chapter makes written request therefor, the commission may offer the same for bidding at such times and in such parcels as the commission shall determine to be in the best interests of the State.

history: (History: Amended by Stats. 1963, Ch. 1945.)

article: 3. Oil and Gas Leases on Lands Other Than Tide and Submerged Lands


citation: PRC § 6853

text: The commission may divide the lands within the tract proposed to be leased into parcels of convenient size and shape and shall prepare a form of lease therefor.


citation: PRC § 6854

text:
Lands, including the Tule Elk State Reserve located in Township 30 South, Range 24 East, MDB&M in Kern County, other than tide or submerged lands, belonging to the state and dedicated to a public use may be leased by the commission for the production of oil and gas in accordance with this article and this chapter insofar as not in conflict with this article.

Where those lands have been acquired for the use of a specific state agency, consent of this agency shall be obtained by the commission for occupation by a state lessee of the surface of the lands for drilling locations or producing facilities. The commission may lease those lands, including the Tule Elk State Reserve in Kern County, for the production of oil and gas without the consent of the state agency if development under the lease is made by slant drilling from surface locations on lands not under the control of the state agency. However, the commission shall consult with the Department of Parks and Recreation prior to approving a lease for the production of oil and gas underlying the Tule Elk State Reserve to ensure that the purposes for which the parklands were acquired are not adversely affected.

The commission may grant a subsurface oil and gas lease in accordance with subdivision (b) of Section 6815 covering all or any portion of the Tule Elk State Reserve in Kern County for the production of oil and gas underlying the reserve by means of slant or directional drilling from surface locations outside of the reserve.

history: (History: Amended by Stats. 1983, Ch. 1218, Sec. 2.)


citation: PRC § 6855

text: The proceeds of any lease for the extraction of any oil and gas from lands owned by the State, other than public lands or tide or submerged lands under the jurisdiction of the commission, property escheated to the State or held in trust, lands held by the State as tax-deeded property and lands acquired for state highway purposes, shall be paid into the General Fund in the State Treasury, regardless of whether such lease is executed pursuant to this chapter or any other provision of law.

history: (History: Added by Stats. 1951, Ch. 164.)


citation: PRC § 6870

text:
(a) Notwithstanding any other provision of law to the contrary, no leases shall be let for the extraction of oil and gas from coastal tidelands or submerged lands in state waters within the Santa Barbara Channel unless the commission determines that such a lease will not result in the seepage or spillage of oil (either by finding that the safety and containment devices to be used are sufficient to prevent such seepage or spillage or that no seepage or spillage would result in any event) or in the destruction of scenic or aesthetic values.

(b) As used in this section, the Santa Barbara Channel is the area described as follows:

Beginning at the point of intersection of the ordinary high-water mark of the Pacific Ocean with the westerly point of Point Conception; thence in a generally easterly and southeasterly direction along said ordinary high-water mark to the westerly point of Point Mugu; thence in a generally southwesterly direction to the southwest tip of Anacapa Island; thence along the inland sides of Anacapa, Santa Cruz, Santa Rosa and San Miguel Islands to the most westerly part of San Miguel Island; thence in a northerly direction to the point of beginning; excluding the area described in subdivision (b) of Section 6871.2.

history: (History: Added by Stats. 1970, Ch. 1530.)

path: 6. PUBLIC LANDS > 3. Oil and Gas and Mineral Leases > 4. Oil and Gas Leases on Tide and Submerged Lands and Beds of Navigable Rivers and Lakes


citation: PRC § 6871

text: Tide and submerged lands and beds of navigable rivers and lakes may be leased by the commission for the extraction of oil and gas in accordance with the provisions of this article and of this chapter insofar as not in conflict with the provisions of this article. No political subdivision of the State or any city or county or any official of either or any of them shall grant or issue any lease, license, easement, privilege, or permit vesting authority in any person to take or extract oil or gas from tide or submerged lands whether filled or unfilled of which the State is the owner or from which the State has the right to extract oil or gas, or both.

article: 4. Oil and Gas Leases on Tide and Submerged Lands and Beds of Navigable Rivers and Lakes


text: Whenever it appears to the commission that it is for the best interests of the State to lease lands subject to the provisions of Section 6871.1 or 6877 of this code for the production of oil or gas therefrom, or whenever a person who possesses the qualifications provided in this chapter makes written request therefor, the commission may, subject to the provisions of Section 6871.4, offer the same for bidding at such times and in such parcels as the commission shall determine to be in the best interests of the State.


text: The commission may divide the lands within the area proposed to be leased into parcels of convenient size and shape and shall prepare a form of lease or leases therefor embracing not to exceed 5,760 acres in any one lease.


citation: PRC § 6872

text:
(a) If an application for oil and gas development in state waters that is determined to be incomplete by the commission continues to remain incomplete one year after the date of the first incomplete notice sent to the applicant by the commission, the application shall be considered withdrawn.

(b) If an application has been withdrawn pursuant to subdivision (a), the applicant may submit a new application.

history: (History: Added by Stats. 2006, Ch. 298, Sec. 1. Effective January 1, 2007.)


text: Whenever it appears to the commission that oil and gas deposits are known or believed to be contained in any such lands as are described in Section 6871.2, subdivision (b), of this code or in tide and submerged lands along the coast of the Pacific Ocean south of the northerly city limits of the City of Newport Beach in Orange County to the southerly boundary of the state, and are being drained by means of wells upon adjacent lands owned by others than the state, the commission shall thereupon be authorized and empowered to lease state-owned tide and submerged lands adjacent to any such wells for the production of oil and gas therefrom, either as a tract or in parcels of such size and shape as the commission shall determine but only within an area and to an extent necessary to offset such drainage of state-owned tide and submerged lands by any such wells upon adjacent lands owned by others.

history: (History: Amended by Stats. 1969, Ch. 1238.)


text: If the commission determines that any tide and submerged lands belonging to the state in the area hereinafter referred to should be drilled pursuant to the terms of Section 6872.1 of this code, then, notwithstanding the provisions of Section 6874 of this code, in order to preserve and protect the highly developed recreational and residential area now referred to, the commission shall require that any well or wells drilled pursuant to the terms of any lease issued with respect to any part of the hereinafter described area be slant-drilled from an upland or littoral site to and into the subsurface of the tide or submerged lands covered by the lease. The area to which this section is applicable is the tide and submerged lands along the coast of the Pacific Ocean south of the northerly city limits of the City of Newport Beach in Orange County to the southerly boundary of the state.


text:
The commission may adjust the boundaries of existing leases to encompass all of a field partially contained within the existing lease subject to both of the following conditions:

(a) The commission makes all of the following findings:

(1) The adjustment will permit more efficient utilization of state resources.

(2) The number and size of existing offshore platforms will not be increased, except that modifications to a platform within the existing boundaries of a lease shall be permitted where the modifications are reasonably necessary for development of all of the resources within the reconfigured lease.

(3) The boundary adjustment will not require the construction or major modification of a refinery in this state to permit development of any increased production resulting from the boundary adjustment, unless that construction or major modification is to a field production facility servicing the lease.

(4) The boundary adjustment represents the environmentally least damaging feasible alternative for the extraction and production of affected resources.

(b) Those parts of the field within areas added to the existing lease may not be developed except from upland sites or from existing offshore facilities within the original lease boundaries.

history: (History: Amended by Stats. 1994, Ch. 970, Sec. 7. Effective January 1, 1995.)


citation: PRC § 6873

text:
When leasing tide or submerged lands or beds of navigable rivers or lakes, the commission shall prepare a form of lease which shall contain, in addition to other provisions deemed desirable and necessary by the commission, appropriate provisions contained in this chapter and the following:

(a) Each well drilled pursuant to the terms of the lease may be drilled or slant-drilled to and into the subsurface of the tide or submerged lands or beds of navigable rivers or lakes, covered by the lease from upland, riparian or littoral drill sites owned or controlled by the state or owned by or available, at any time, to the lessee, or from drill sites located upon any filled lands heretofore or hereafter filled, whether contiguous or noncontiguous to the riparian or littoral lands or uplands, or from any pier heretofore or hereafter constructed owned by or available to the lessee and available for such purpose, or from platforms or other fixed or floating structure in, on or over the tide or submerged lands or beds of navigable rivers or lakes, covered by the lease or otherwise available to the lessee.

(b) Such lease shall prohibit the pollution or contamination of the ocean, tidelands, or navigable rivers or lakes, and shall prohibit the impairment of and interference with bathing, fishing, or navigation in the waters of the ocean, any bay or inlet thereof, or any navigable river or lake, and shall prohibit the impairment of and interference with developed shoreline recreational or residential areas. In addition, no oil, tar, residuary product of oil, or any refuse of any kind from any well or works shall be permitted to be deposited on or pass into the waters of the ocean, any bay or inlet thereof, or any navigable river or lake.

This subdivision does not apply to the deposit on or passage into such waters of water not containing any hydrocarbons or vegetable or animal matter.

This subdivision does not prohibit the deposit on or passage into the waters of the ocean or any bay or inlet thereof of drill cuttings or drilling mud which are free of oil and materials that are deleterious to marine life if such activities are under authorization of a regional water quality control board.

(c) If the lessee, as disclosed by information submitted with his bid, proposes to drill one or more wells from filled lands, whether contiguous or noncontiguous to the riparian or littoral lands or uplands, or from any pier or from platforms or other fixed or floating structures to be constructed for such purpose, and if permission from any federal or state agency is legally required in order to construct any such filled land or structures, the lessee shall be allowed a reasonable time following the execution of the lease within which to secure the necessary permission from such federal and state agencies as shall be legally required, and, upon the securing of such permission, a further reasonable time, determined with regard to the nature of the filled lands or structure or structures to be constructed, within which to commence operations for the drilling of such well or wells. The drilling term of the lease shall be extended by the commission by a period equal to such reasonable time to secure such permission, and, if necessary, to the date to which the time to commence operations for the drilling of such well or wells has been extended.

(d) Any offshore filled lands or structure or structures constructed for the purpose of drilling pursuant to this section shall conform to the rules and regulations of the commission in effect at the time of invitation for bids in pursuance of which the lease is awarded. Drilling, whether from upland, riparian, littoral or offshore locations, shall be conducted in conformance with such rules and regulations in effect at the time of invitation for bids in pursuance of which the lease is awarded.

In the case of any existing lease of tide or submerged lands, the commission may, with the consent of the other party thereto, amend the same so as to contain or conform with subdivisions (a), (b), (c) and (d) hereof, or any of them, except that the provisions of said subdivision (d) when incorporated into such a lease by such an amendment shall refer to the rules and regulations in effect at the time such amendment is made rather than to those in effect at the time of invitation for bids in pursuance of which the lease is awarded and said subdivision (a) may not be incorporated into such a lease without also incorporating said subdivision (d) therein.

history: (History: Amended by Stats. 1979, Ch. 197.)


text: Filled lands shall include, but not be limited to, tide or submerged lands or beds of navigable rivers or lakes, reclaimed artificially through raising such lands above the highest probable elevation of the tides, or high water line on the river banks or shore, to form dry land, by placement of a fill or deposit of earth, rock, sand or other solid imperishable material. Such fill may be retained in place or protected by bulkheads, seawalls, revetments or similar enclosures and may be placed at any location approved by the commission under a lease heretofore or hereafter issued pursuant to this article.


text: In carrying out the requirements of subdivision (b) of Section 6873 and the California Environmental Quality Act (Division 13 (commencing with Section 21000)), the commission shall, prior to leasing tide and submerged lands or the beds of navigable rivers or lakes for oil and gas, hold at least one hearing on any draft environmental impact report prepared for the proposed lease. The hearing shall be held within a city or county near the area being considered for leasing. The commission shall give at least 30 days’ written notice regarding the public hearing to each city or county within or adjacent to the proposed lease area and shall publish the notice in the manner prescribed in Section 6834. The authority to hold hearings provided in this section may be delegated by the commission to its officers or employees.

history: (History: Repealed and added by Stats. 1985, Ch. 384, Sec. 2.)


text:
(a) In carrying out the requirements of subdivision (b) of Section 6873 and the California Environmental Quality Act, the commission shall, prior to the adoption of a form of lease for leasing offshore tide and submerged lands between the mean high tide line and the three-mile jurisdictional limit, consult with the Department of Fish and Game, the National Marine Fisheries Service, and representatives of the oil industry, representatives of fishermen operating within the area being considered for leasing. The commission shall hold at least one hearing on the draft environmental document prepared for the proposed lease in a jurisdiction of a local government within the coastal zone, as defined by Section 30103, near the area being considered for leasing. The commission shall give at least 30 days’ written notice regarding the public hearing to each city or county within or adjacent to the proposed lease area and shall publish the notice in the manner prescribed in Section 6834. The authority to hold hearings provided in this section may be delegated by the commission to its officers or employees.

(b) The commission shall consider the potential impacts of the proposed lease on the fisheries and marine habitat within the area being considered for leasing. The commission shall include in its consideration:

(1) The environmental document prepared for the proposed lease.

(2) Recommendations of the Department of Fish and Game, the National Marine Fisheries Service, the oil industry, and fishermen.

(3) The cooperative efforts of the oil industry and fishermen to develop plans to mitigate potential impacts.

(c) Fishery areas that should be considered for protection include established fishing grounds or critical spawning or nursery grounds as indicated by records of the Department of Fish and Game.

(d) The commission may impose terms, conditions, or operational requirements it deems necessary to protect fisheries, including, but not limited to, the exclusion of specified areas from development activities.

(e) This section shall not be construed as a limitation on slant or directional drilling under the excluded area from any location outside an excluded fishery area.

history: (History: Amended by Stats. 1985, Ch. 384, Sec. 3.)


citation: PRC § 6874

text: Each bid shall be accompanied by information giving a description of the location or locations, structure or structures, from which the bidder proposes to drill. In awarding a lease, the commission shall not discriminate between bidders by prohibiting drilling from upland, littoral or riparian drill sites, or drilling from sites upon filled lands, whether contiguous or noncontiguous to the riparian or littoral lands or uplands, or upon any pier or platform or other fixed or floating structure in, on or over tide and submerged lands or beds of navigable rivers or lakes, with respect to which the State or other owner thereof has consented, or may thereafter consent, to such use provided, however, that in the event state-owned tide or submerged lands or beds of navigable rivers or lakes are determined by the commission to contain oil or gas deposits which are being drained by wells owned by others upon adjacent lands, and such state-owned tide and submerged lands or beds of navigable rivers or lakes cannot be developed by a particular method of exploration, development or operation without interfering with or impairing developed riverbank or shoreline, recreational or residential areas, then the commission may offer and award an oil and gas lease on such lands with a prohibition against said particular method of exploration, development or operation.


citation: PRC § 6875

text:
If the Legislature has transferred to any city or county the administration of the trust, whether or not limited, under which tide or submerged lands or beds of navigable rivers and lakes are held by the State, the commission, pursuant to this chapter, may enter into agreements upon behalf of the State to compensate any such city or county for the use of surface drilling and operating sites upon such lands from the royalty or revenue to be derived by the State from oil and gas taken from such lands by lessees of the State.

Any such compensation shall include an amount sufficient reasonably to compensate any such city or county for any damage to or interference with the use or uses to which the surface of such lands are being or may be utilized by or upon behalf of such city or county. The consideration to the State in any such agreement shall include the right to a lessee of the State to carry on all operations on any such tidelands or beds of navigable rivers and lakes necessary to accomplish the purposes of this chapter and such terms and conditions as shall be determined by the commission to be in the interests of the State.

The consideration to the State in any such agreement shall also include a compromise, settlement and release of any and all claims and rights which such city or county has or may have against the State arising out of or in connection with the extraction and removal of oil and gas from such lands. All money paid to any city or county under this section shall be used by it solely in furtherance of the trust under which the administration of tide and submerged lands and beds of navigable rivers and lakes has been transferred to such city or county and for the purposes expressed in the act so transferring administration of such lands.


citation: PRC § 6876

text: Should it appear to the commission that any person, association of persons, or corporation, has drilled, or is making preparation to drill, wells upon or into tide or submerged lands of which the State is the owner, or from which the State has the right to extract oil or gas or both, for the extraction of oil or gas therefrom, other than pursuant to authority granted in accordance with this chapter, whether or not such person, association of persons, or corporation may be acting under purported authority, the commission shall cause an action to be instituted in the name of and upon behalf of the State in a court of appropriate jurisdiction, to enjoin the occupancy and operations upon or in such lands and to demand compensation for injury and damage, if any, to such lands; except that, should the drilling operations be conducted upon or in lands which have been filled and if such operations have been commenced prior to March 24, 1938, the commission, if it appears to be in the interests of the State, may, upon behalf of the State, issue a lease to any such person, association of persons, or corporation in accordance with the provisions of this chapter insofar as applicable, and upon a royalty basis, retrospective and prospective, which appears reasonable and just in the circumstances to the lessee and the State.


citation: PRC § 6877

text: All the beds of navigable rivers and lakes belonging to the State may be leased pursuant to Section 6871.3 of this code for the production of oil and gas, subject to the same limitations and conditions imposed by this article, and in accordance with the provisions of this chapter insofar as not in conflict with this article.


citation: PRC § 6878

text:
Nothing in this chapter limits the effect of any grant of tide or submerged lands made prior to June 11, 1938, to any city, county or other political subdivision, nor in any manner to prejudice whatever claim the state, on the one hand, or such city, county or political subdivision, on the other, may have in or to the right to extract or authorize the extraction of oil or gas or other minerals underlying such lands.

Notwithstanding any provision to the contrary herein, no city, county or political subdivision to which the state has granted tide or submerged lands without reserving minerals shall enter into any lease or agreement for the extraction of oil, gas or other hydrocarbons from such tide and submerged lands within any area described in subdivisions (a) though (e), inclusive, of Section 6871.2 of this code, or from tide and submerged lands along the coast of the Pacific Ocean south of the northerly city limits of the City of Newport Beach in Orange County to the southerly boundary of the state until the State Lands Commission has made findings in accordance with the provisions of Section 6872 of this code regarding any lands within any area described in subdivisions (a), (c), (d) and (e) of Section 6871.2 of this code, or has made findings in accordance with the provisions of Section 6872.1 of this code regarding any lands within the area described in subdivision (b) of Section 6871.2 of this code, or has made findings in accordance with the provisions of Section 6872 of this code regarding any tide or submerged lands along the coast of the Pacific Ocean south of the northerly city limits of the City of Newport Beach in Orange County to the southerly boundary of the state.

Provided further that any lease or agreement for the extraction of oil and gas or other hydrocarbons from such granted tide or submerged lands authorized to be entered into by a county, city or political subdivision after necessary findings are made by the State Lands Commission as heretofore provided shall be in accordance with the provisions of Section 6872.1 of this code in respect to any lands within the area described in subdivision (b) of Section 6871.2 of this code, and shall be in accordance with the provisions of Section 6872.2 of this code in respect to any tide or submerged lands along the coast of the Pacific Ocean south of the northerly city limits of the City of Newport Beach in Orange County to the southerly boundary of the state.

history: (History: Amended by Stats. 1965, Ch. 1793.)


citation: PRC § 6879

text:
Whenever tide and submerged lands of the State have been granted to a city, county or city and county by a grant which does not reserve to the State the right to produce oil and gas therefrom, and such grantee shall determine that it is in the interest of increasing the ultimate recovery of oil or gas from such lands, or of the protection of oil or gas in said lands from unreasonable waste, or that the subsidence or sinking of such lands and abutting lands may possibly be arrested or ameliorated thereby, such grantee may enter into agreements for the purpose of bringing about the cooperative development and operation of all or a part or parts of the oil and gas field in which such lands are located, or for the purpose of bringing about the development or operation of all or a part or parts of such field as a unit, or for the purpose of fixing the time, location, and manner of drilling and operating of wells for the production of oil or gas, or providing for the return or injection of gas, water or other substances into the subsurface of the earth for the purpose of storage or the repressuring of such oil or gas field.

Each such agreement shall provide that any impairment of the public trust for commerce, navigation or fisheries to which said granted lands are subject is prohibited, and shall be submitted to the State Lands Commission for approval. If the State Lands Commission shall find that said agreement so provides and that the entering into and the performance of such agreement is in the public interest, then the State Lands Commission may approve such agreement on behalf of the State.

The Legislature hereby finds and declares that the entering into and the performance of any such agreement which has been approved by the State Lands Commission will not impair the public trust for commerce, navigation and fisheries to which said granted lands are subject, and that any acts or things done pursuant to the terms thereof or resulting therefrom are consistent with and not in violation of the terms or conditions of any such grant or of any trust, restrictions and conditions appertaining thereto. No such agreement so approved by the State Lands Commission shall effect or result in, or be so construed as to effect or result in a revocation of or change in any trust pertaining to said lands, or in any grant, conveyance, alienation or transfer of said lands, or any part thereof, to any other individual, firm, or corporation, even though such agreement provides for the pooling of oil, gas or other hydrocarbon substances produced from said lands with oil, gas or other hydrocarbon substances produced from other lands, or results in the migration of any oil, gas or other hydrocarbon substances between said lands and other lands. Any trusts, restrictions or conditions pertaining to any production from said granted lands included in any such agreement, or to any proceeds from such production, shall apply only to that part of the production or that part of the proceeds therefrom which is allocated to such city, county or city and county on account of said lands under any such agreement, and shall not apply to any other production or the proceeds therefrom, whether or not the same may have been produced from said lands or other lands.

If approved by the State Lands Commission, any such agreement shall bind the State, and shall bind any of the following who execute the same:

(a) Such city, county or city and county; and

(b) Any operator of such tide and submerged lands under contract with such city, county or city and county, and such operators’ successors and assigns; and

(c) Any other party, and the successors and assigns of such other party.

Any such agreement shall be enforceable in an action for specific performance against the parties bound thereby.

No agreement executed pursuant to this section shall affect or determine the boundaries of the tide and submerged lands granted, in trust, to the City of Long Beach by Chapter 676, Statutes of 1911, Chapter 102, Statutes of 1925, Chapter 158, Statutes of 1955, as modified by Chapter 915, Statutes of 1951 and Chapter 29, Statutes of 1956, First Extraordinary Session.

history: (History: Added by Stats. 1957, Ch. 1151.)


citation: PRC § 6880

text:
(a) Contingent upon an appropriation of funds by the Legislature for this purpose, the commission shall develop, on or before December 31, 2024, a cost study that evaluates the fiscal impact of a voluntary relinquishment of any lease interests in actively producing state offshore oil and gas leases in state waters.

(b) The cost study shall consider at least all of the following factors:

(1) Expected duration of oil production at the time of leasing.

(2) State revenues received to date.

(3) Expected remaining life of the reservoir based on proven reserves.

(4) Reasonably anticipated unrealized lessee revenues and profits.

(5) Reasonably anticipated unrealized state revenues.

(6) Lessees’ decommissioning and restoration costs.

(c) (1) On or before December 31, 2023, the commission shall hold at least one public hearing at a properly noticed public commission meeting to discuss the cost study described in this section.

(2) After the hearing described in paragraph (1), on or before December 31, 2023, the commission shall provide a status update on the cost study to the Governor and the Legislature. The status update shall include, but not be limited to, all of the following:

(A) A proposed outline of the cost study elements.

(B) Identified data gaps.

(C) Preliminary analysis, conclusions, and recommendations.

(D) Any public comments received by the commission.

(d) (1) On or before December 31, 2024, the commission shall submit the cost study prepared pursuant to this section, including recommendations to advance the end of offshore oil and gas development consistent with the legislative findings and declarations of Section 1 of Assembly Bill 2257 of the 2021–22 Regular Session, to the Governor and the Legislature.

(2) The commission shall make the cost study available on its internet website.

(e) (1) The cost study submitted to the Legislature pursuant to paragraph (1) of subdivision (d) and the status update submitted to the Legislature pursuant to paragraph (2) of subdivision (c) shall be submitted in compliance with Section 9795 of the Government Code.

(2) (A) Pursuant to Section 10231.5 of the Government Code, the requirement to submit a report imposed pursuant to paragraph (1) of subdivision (d) shall become inoperative on December 31, 2028.

(B) Pursuant to Section 10231.5 of the Government Code, the requirement to submit a report imposed pursuant to paragraph (2) of subdivision (c) shall become inoperative on December 31, 2027.

history: (History: Added by Stats. 2022, Ch. 692, Sec. 2. (AB 2257) Effective January 1, 2023.)


citation: PRC § 6890

text:
(a) Prospecting permits and leases for the extraction and removal of minerals, other than oil and gas or other hydrocarbon substances, from lands, consistent with Section 6900, may be issued as provided in this article and in this chapter insofar as not in conflict with this article. No lease or permit shall be issued that results in any net adverse impact to wetlands or riparian habitat.

(b) Where lands, other than tide and submerged lands, belonging to the state have been dedicated to a public use, the commission may issue permits and leases for the exploration, extraction, and removal of minerals, other than oil and gas or other hydrocarbon substances and geothermal resources, in accordance with this article. Where the lands have been acquired for the use of a specific state agency, the state agency, before issuance, shall approve the work to be performed under the authority of the permit or lease and the state agency shall specify terms and conditions required to ensure that the work shall be performed in a manner that is not inconsistent with the purposes for which the land is owned or operated.

(c) If the property is a wildlife management area acquired pursuant to Section 1525 of the Fish and Game Code, the commission shall not issue any permit or lease under this section unless the Department of Fish and Game determines, and reports in writing to the commission, that the proposed activity will not cause a net loss of wildlife habitat value or acreage in that area because privately owned land of greater total wildlife habitat value and acreage, which has habitat values similar in type to the area to be permitted or leased, will be acquired and dedicated to the state to replace the land of that wildlife management area. The replacement land shall be located within 10 miles of the wildlife management area where the lease or permit is to be issued.

(d) The commission shall not issue a permit or lease under this section for any land under the jurisdiction of the Department of Parks and Recreation, for any refuge or other protected area, as described in Division 7 (commencing with Section 10500) of the Fish and Game Code, or for any ecological reserve, as described in Article 4 (commencing with Section 1580) of Chapter 5 of Division 2 of the Fish and Game Code.

(e) Notwithstanding Section 6217, as of June 30 of each year, a sum equal to 50 percent of the revenue received by the state for the fiscal year ending on June 30 pursuant to permits and leases for the development of minerals, other than oil, gas, or other hydrocarbon substances and geothermal resources, on lands that have been dedicated to a public use and are administered by a state agency other than the commission shall be available for appropriation by the Legislature for the support of, and apportionment and transfer by the Controller to, that state agency.

(f) If the state agency receives a majority of its funding from a special fund established for the general support of the agency, the revenue made available by subdivision (e) shall be deposited in that fund and shall be available, when appropriated, for the general purposes of the agency.

(g) Any person issued a permit or lease under subdivision (a) shall comply with all existing federal, state, and local government laws.

(h) The commission may grant nonexclusive geological or geophysical exploration permits for minerals, pursuant to this section, upon those terms and conditions as the commission may prescribe. A permit granted under this subdivision shall not give the permittee any preferential treatment.

history: (History: Amended by Stats. 2023, Ch. 120, Sec. 1. (AB 706) Effective January 1, 2024.)

article: 5. Minerals Other Than Oil and Gas

path: 6. PUBLIC LANDS > 3. Oil and Gas and Mineral Leases > 5. Minerals Other Than Oil and Gas


text: Notwithstanding any other law, when lands, other than tide and submerged lands, are owned by another state agency, the commission, when issuing permits and leases for the exploration, extraction, and removal of minerals, other than oil and gas or other hydrocarbon substances and geothermal resources, may agree that the state agency owning the land will receive additional lands or in-kind payments, the value of which shall be deducted from the money royalty, including land rental payments, or a percentage of the net profits from mineral extraction.

history: (History: Added by Stats. 1989, Ch. 770, Sec. 2.)

article: 5. Minerals Other Than Oil and Gas


citation: PRC § 6891

text:
The commission may issue a prospecting permit, under such rules and regulations as it may prescribe, for lands which are not known mineral lands, to any qualified applicant, upon the payment to the commission of a reasonable charge, as determined by the commission, of not less than one dollar ($1) per acre for each acre in area embraced within the boundaries of the lands described in the permit. No permit shall be issued for any lands which have been classified by the commission prior to the application as containing commercially valuable mineral deposits. Upon receipt of an application for a permit, the commission shall determine whether the lands described therein are known mineral lands. If the commission determines that the lands are known mineral lands, it shall thereupon so classify them and shall reject the application for a prospecting permit.

Subject to such terms and conditions as the commission may determine to be in the best interest of the state, a prospecting permit shall give to the permittee the exclusive right for a period not exceeding two years to prospect for minerals other than oil and gas or other hydrocarbon substances upon lands wherein the mineral deposits belong to the state.

The commission may, in its discretion, extend the term of any permit for a period not exceeding one year, but the term of any permit, including extensions, shall be limited to a total of three years.

history: (History: Amended by Stats. 1988, Ch. 649, Sec. 1.)

article: 5. Minerals Other Than Oil and Gas


citation: PRC § 6895

text:
(a) Upon establishing to the satisfaction of the commission that commercially valuable deposits of minerals have been discovered within the limits of any permit, the permittee shall receive priority for a mining lease over any other applicant seeking a lease for the land included in the prospecting permit. This priority shall expire after 365 days unless the permittee submits a complete lease application to mine the discovered minerals, in which case the priority shall expire upon the commission’s consideration or applicant’s withdrawal of the application. Mineral leases shall be limited to the minimum area required for mining. Nothing in this section shall be construed to require the commission to issue a mineral lease.

(b) The lease shall provide for the payment of an annual rental of not less than fair market value, as determined by the commission. The lease shall also provide for payment, which may be taken in kind, of either a royalty, to be taken in money or in kind, at the option of the commission, of not less than 10 percent of the gross value of all mineral production from the leased lands, less any charges approved by the commission that were made or incurred with respect to transporting or processing the state’s royalty share of production, or a percentage, to be determined by the commission, of the net profits derived from mineral extraction operations under the lease. Payment as a royalty or as a percentage of net profits shall be specified in the permit or lease.

(c) If the lands for which a lease is sought are tide and submerged lands, the commission, in accordance with Section 6900, may divide the lands into the size and number of parcels as the commission determines will not substantially impair the public rights to navigation and fishing or interfere with the trust upon which the lands are held.

history: (History: Amended by Stats. 2023, Ch. 120, Sec. 4. (AB 706) Effective January 1, 2024.)

article: 5. Minerals Other Than Oil and Gas


citation: PRC § 6896

text: Until the permittee applies for a lease as to that portion of the area described in the permit herein provided, the permittee shall pay to the state 20 percent of the gross value of the minerals secured from the lands embraced within the permit and sold or otherwise disposed of or held for sale or other disposition.

history: (History: Amended by Stats. 2023, Ch. 120, Sec. 5. (AB 706) Effective January 1, 2024.)

article: 5. Minerals Other Than Oil and Gas


citation: PRC § 6897

text:
(a) All deposits of minerals, other than oil, gas, and geothermal resources in lands belonging to the state, which have been classified by the commission as lands containing commercially valuable mineral deposits and all deposits of those minerals within lands embraced within a prospecting permit may be leased by the commission in either of the following ways:

(1) By competitive bidding to the highest qualified and responsible bidder. The bidding shall be on the basis of a cash bonus, royalty rate, net profit, or other single biddable factor, and shall be conducted under general regulations and in a form to be determined by the commission to be in the best interest of the state.

(2) By a negotiated lease or other agreement, if the lands are determined by the commission to be unsuitable for competitive bidding for reasons such as small size, irregular configuration, lack of access, or if a negotiated lease is in the best interest of the state.

(b) In addition to the payment of a royalty in money or in kind or a percentage of the net profits derived from mineral extraction operations provided therein, each bid and each lease shall also provide for an annual payment in advance of rent of not less than fair market value or a greater sum as the commission may specify.

history: (History: Amended by Stats. 2023, Ch. 120, Sec. 6. (AB 706) Effective January 1, 2024.)

article: 5. Minerals Other Than Oil and Gas


citation: PRC § 6898

text: Leases under this article shall be for terms not to exceed 20 years.

history: (History: Amended by Stats. 2023, Ch. 120, Sec. 7. (AB 706) Effective January 1, 2024.)

article: 5. Minerals Other Than Oil and Gas


text: Notwithstanding Section 6898, any lease in effect on July 1, 1991, of lands, within the bed of Owens Lake for the development of minerals other than oil and gas and geothermal resources may be immediately extended by the commission for an additional 20 years beyond its current expiration date, with the subsequent lease renewal in accordance with Section 6898.

history: (History: Added by Stats. 1991, Ch. 520, Sec. 6.)

article: 5. Minerals Other Than Oil and Gas


citation: PRC § 6899

text: The commission shall prescribe additional terms and conditions, consistent with the provisions of this chapter, of permits and leases issued under this article as will in its opinion effectually protect the interests of the state in the mineral deposits reserved to it by this chapter.

history: (History: Amended by Stats. 2023, Ch. 120, Sec. 8. (AB 706) Effective January 1, 2024.)

article: 5. Minerals Other Than Oil and Gas


citation: PRC § 6900

text:
(a) Notwithstanding Section 6890, the commission or a local trustee of granted public trust lands shall not grant leases or issue permits for the extraction or removal of hard minerals from state waters subject to tidal influence, except for waters situated east of the Carquinez Bridges on Interstate 80.

(b) (1) For purposes of this section, “hard minerals” means natural deposits of valuable minerals, including, but not limited to, metals and placer deposits of metals, nonmetallic minerals, gemstones, ores, gold, silver, copper, lead, iron, manganese, silica, chrome, platinum, tungsten, zirconium, titanium, garnet, and phosphorus.

(2) “Hard minerals” does not include rock, gravel, sand, silt, coal, oyster shells, or hydrocarbons.

(c) This section does not prohibit scientific research or collections conducted by, or on behalf of, an educational, scientific, or research institution or a governmental agency.

history: (History: Repealed and added by Stats. 2022, Ch. 433, Sec. 5. (AB 1832) Effective January 1, 2023.)

article: 5. Minerals Other Than Oil and Gas


citation: PRC § 6901

text: This article shall be known and may be cited as the Geothermal Resources Act.

history: (History: Added by renumbering Section 6902 by Stats. 1978, Ch. 1139.)

article: 5.5. Geothermal Resources

path: 6. PUBLIC LANDS > 3. Oil and Gas and Mineral Leases > 5.5. Geothermal Resources


citation: PRC § 6902

text: The Legislature hereby finds and declares that development of geothermal resources beneath state lands is an essential element in the development of additional energy sources for the State of California. It is further recognized by the Legislature that different parcels of state lands have varying degrees of potential for the successful development of geothermal resources. As some parcels display strong indications of geothermal resources and likelihood of commercially producible energy which could be let at competitive lease sale, and other parcels indicate potential but need additional exploration, and still other parcels have never been explored, the flexible leasing program established by this chapter is necessary to promote more rapid and extensive geothermal development on state lands.

history: (History: Added by Stats. 1978, Ch. 1139.)

article: 5.5. Geothermal Resources


citation: PRC § 6903

text: For the purposes of this chapter, “geothermal resources” shall mean the natural heat of the earth, the energy, in whatever form, below the surface of the earth present in, resulting from, or created by, or which may be extracted from, such natural heat, and all minerals in solution or other products obtained from naturally heated fluids, brines, associated gases, and steam, in whatever form, found below the surface of the earth, but excluding oil, hydrocarbon gas or other hydrocarbon substances.

history: (History: Added by Stats. 1967, Ch. 1398.)

article: 5.5. Geothermal Resources


citation: PRC § 6904

text: Permits and leases for exploration and development of geothermal resources on lands belonging to the state and leases for the development of geothermal resources reserved by the state may be issued by the commission as provided in this article. For purposes of this article, state lands shall be defined as all lands owned by the state, including school lands, lieu lands, proprietary lands, tidelands, submerged lands, swamp and overflowed lands, and beds of navigable rivers and lakes, and lands in which geothermal resources have been reserved to the state.

history: (History: Amended by Stats. 1978, Ch. 1139.)

article: 5.5. Geothermal Resources


citation: PRC § 6905

text: Permits and leases may be issued pursuant to this article only to those who qualify for permits and leases under Section 6801.

article: 5.5. Geothermal Resources


citation: PRC § 6906

text: Administration of this article shall be under the principle of multiple use of public lands and resources, and shall allow coexistence of other permits or leases of the same lands for deposits of other minerals under applicable laws, and the existence of permits or leases issued pursuant to the provisions of this article shall not preclude other uses of the areas covered thereby. However, operations under such other permits or leases or such other uses shall not unreasonably interfere with or endanger operations under any permit or lease issued pursuant to this article, nor shall operations under permits or leases issued pursuant to the provisions of this article unreasonably interfere with or endanger operations under any permit or lease issued pursuant to the provisions of any other act. Nor shall this article be construed as superseding the authority which the head of any state department or agency has with respect to the management, protection, and utilization of the state lands and resources under his jurisdiction. The commission may prescribe in its rules and regulations those conditions it deems to be necessary for the protection of other resources.

article: 5.5. Geothermal Resources


citation: PRC § 6907

text: Where it is determined by the commission that the production or use of geothermal resources is also susceptible of economically producing other of the geothermal resources in commercially valuable quantities, and a market therefor exists, production of such other geothermal resources may be required by the commission.

history: (History: Amended by Stats. 1983, Ch. 369, Sec. 18.)

article: 5.5. Geothermal Resources


citation: PRC § 6909

text: The commission may grant nonexclusive geological or geophysical exploration permits for geothermal resources upon such terms and conditions as the commission may prescribe, but any such permit shall not give the permittee any preferential right to a geothermal resources lease.

history: (History: Repealed and added by Stats. 1978, Ch. 1139.)

article: 5.5. Geothermal Resources


citation: PRC § 6910

text:
(a) Subject to the provisions of Section 6906, the commission may issue a prospecting permit to the first qualified applicant therefor under such rules and regulations as it may prescribe for lands which have not been selected by the commission for lease by competitive public bid. An application for a permit shall be denied if, prior to the issuance of the permit, the lands are selected by the commission for lease by competitive public bid.

The applicant shall submit for the commission’s approval a prospecting program, including a time schedule, which may include, but not be limited to, the conduct of surveys, tests, or experiments using geological, geophysical, or other exploratory methods, including exploration drilling. Such prospecting program shall be specified in the terms and conditions of the prospecting permit. At a minimum, each prospecting permit issued under this article shall provide that the permittee is required to drill a geothermal well during the term of the permit, and such term shall not be extended pursuant to subdivision (b) unless the permittee has commenced the drilling or applied for the necessary permits to drill such a well. Rental shall escalate each year until a well is drilled, whereupon the rental, royalties, and other terms shall be as specified in Section 6913. The escalating rental shall be one dollar ($1) per acre during the first year, not more than five dollars ($5) per acre during the second year, and not more than twenty-five dollars ($25) per acre during the third year and every year thereafter. In the event the permittee elects to quitclaim its interest in a permit prior to the expiration of the initial two-year term, its obligation to drill a geothermal well shall thereupon terminate.

(b) A prospecting permit shall give to the permittee the exclusive right for a term of two years to prospect for geothermal resources upon lands included within such prospecting permit. The commission may, in its discretion, extend the term of any prospecting permit for a period not exceeding two years; provided that the combination of the term and extension of any prospecting permit shall not exceed a total of four years. The commission may amend or terminate any permit issued by it within the term or within the extension, if any, with the consent of the permittee.

(c) Upon the discovery of geothermal resources in commercial quantities within the prospecting permit area, the permittee shall be entitled to a lease by the commission if provided as a term of the permit, for such lands within the permit area. The terms of such lease shall include the royalties and other terms contained in Section 6913.

(d) Obligations imposed by a prospecting permit or lease pursuant to this section may be suspended during such time as a lessee is prevented from complying therewith by wars, riots, acts of God, laws, rules and regulations from any federal, state, county or municipal agency, or by such other unusual conditions as are beyond the control of the lessee.

article: 5.5. Geothermal Resources


citation: PRC § 6911

text:
(a) Lands may be selected for lease by the commission and shall be leased by competitive bid on the basis of a cash bonus, net profit, or other single biddable factor.

(b) In leasing lands the commission may prescribe in the lease document an exploration and development program. The commission shall consider all applicable economic factors, including market conditions, and the cost of drilling for, producing, and utilizing geothermal resources.

(c) Lands so selected for lease by the commission shall be leased to the highest responsible qualified bidder under such rules and regulations as the commission may prescribe for notice to the public of terms and conditions of the sale, receipt of bid, and awarding of the lease.

article: 5.5. Geothermal Resources


citation: PRC § 6912

text:
(a) In case of an application for a permit or lease covering lands which have been sold by the state, subject to a reservation by the state of the geothermal resources thereof, by any person other than the owner of the surface of those lands, the owner may, within four months from the date of service of notice of the application, file an application for a permit or lease. The notice, with a copy of the application, shall be served by the commission, by registered mail. If the owner files an application and is a qualified person and the commission determines that the permitting or leasing of the lands is in the best interest of the state, the owner’s application shall be granted subject to all the provisions of this article. If the owner fails to exercise the rights granted by this section, those rights shall terminate and the applicant shall be permitted to proceed with the application.

(b) In the event of a competitive lease sale, after the commission has determined the highest competitive bid thereon, the owner of the surface of those lands may within 30 days after notification by the commission, by registered mail, submit a bid identical to the highest acceptable bid, in which case the commission shall issue a lease to the owner. If the owner fails to file a bid within that time, the commission may proceed with the award of the bid to other than the owner.

history: (History: Amended by Stats. 1983, Ch. 617, Sec. 1.)

article: 5.5. Geothermal Resources


citation: PRC § 6913

text:
Each prospecting permit and lease issued under this article shall provide for the following rentals and royalties with respect to geothermal resources produced, saved and sold from the lands included within said permit or lease:

(a) Prospecting permits and the leases which result therefrom shall include but not be limited to a royalty of not less than 10 percent of the gross revenue, exclusive of charges, approved by the commission, made or incurred with respect to transmission or other services or processes, received from the sale of steam, brines, from which no minerals have been extracted, and associated gases at the point of delivery to the purchaser thereof. Leases issued pursuant to a competitive lease sale may include in addition to the biddable factors a royalty of not more than 1623 percent of the gross revenue, exclusive of charges, approved by the commission, made or incurred with respect to transmission or other services or processes, received from the sale of steam, brines, from which no minerals have been extracted, and associated gases at the point of delivery to the purchaser thereof.

(b) A royalty of not less than 2 percent of the gross revenue received from the sale of mineral products or chemical compounds recovered from geothermal fluids in the first marketable form as to each such mineral product or chemical compound for the term of the lease.

(c) An annual rental payable in advance of not less than one dollar ($1) per acre or fraction thereof for each year of a lease. Annual rental for prospecting permits shall be subject to the provisions of subdivision (a) of Section 6910.

(d) If, after the discovery of geothermal resources in commercial quantities, the total royalties due to the state during any calendar year do not equal or exceed a sum equal to two dollars ($2) per acre for each acre or fraction thereof then included in the permit or lease, the permittee or the lessee shall, within 60 days after the end of the year, pay such sum as is necessary to equal a minimum royalty of two dollars ($2) per acre.

(e) For leases and prospecting permits which may be converted into a lease, in existence prior to January 1, 1979, the royalties specified herein shall be subject to renegotiation after 30 years from the effective date of the lease and at 10-year intervals thereafter. The first renegotiated royalty rate shall not exceed 30 percent royalty, and in subsequent renegotiations the royalty rate shall not increase by more than 50 percent over the royalty rate of the prior period. In no case shall the lessee’s liability for renegotiated royalties exceed 50 percent of its net profits, nor shall the lessee’s renegotiated royalty be less than the royalty rate under which the lease was issued except as provided for in Section 6916. Net profits for the purposes of this subdivision shall be calculated from the effective date of the negotiated royalties. For leases entered into on and after January 1, 1979, the royalties shall be subject to renegotiation not sooner than 20 years nor later than 30 years from the initial commercial operation, which shall be 30 days after the first generating unit has operated for a consecutive 24-hour period, and at 10-year intervals thereafter. Such renegotiations shall not increase by more than 50 percent the maximum royalties due during the immediately preceding period. The time of first renegotiation for leases entered into after January 1, 1979, shall reflect the Public Utility Commission’s policy on accelerating rates of amortization of facilities utilizing geothermal resources and approval of terms for producer-utility supply contracts.

(f) The commission may, in lieu of payment due the state, exercise the right to take its share of geothermal resources in kind as specified in a lease agreement. If additional facilities are necessary to enable the state to take its royalty share of geothermal resources in kind, the state or its purchaser of geothermal resources shall provide such additional facilities at its own expense, or if the lessee agrees to provide such additional facilities, the lessee shall be compensated for all direct labor and material costs in providing such additional facilities by the state’s purchaser or, if the state elects, by deduction from royalties due the state. Whenever the commission exercises the right to take geothermal resources in kind, the commission shall make and enter into contracts or agreements for the disposition and sale of such geothermal resources only with the highest responsible bidder upon competitive bidding, and in accordance with procedures set forth in rules and regulations adopted by the commission. All specifications and forms for the purpose of inviting bids in connection with such disposition and sale shall be adopted by the commission prior to publication of notice to bidders. Should no bids be received, or should the commission determine to reject any and all bids because of the insufficiency thereof, the commission may negotiate and enter into agreements for such disposition and sale under terms and conditions deemed by the commission to be in the best interests of the state.

(g) Royalty payments shall be made pursuant to the provisions of subdivisions (a) and (b). However, for all geothermal resources used by the permittee or lessee and not sold, the gross revenue therefrom shall be determined as though said geothermal resources had been sold to a third person at the then prevailing market price, in the same market area, and under the same marketing conditions; provided, however, that royalties shall not be payable for geothermal resources used by the permittee or lessee in prudent business operations associated with the development and utilization of the resource or in the production of any geothermal mineral products or chemical compounds recovered from geothermal fluids in first marketable form which are subject to the payment of royalties under subdivision (a) or (b).

article: 5.5. Geothermal Resources


citation: PRC § 6914

text: The holder of any geothermal resources permit or lease may quitclaim or relinquish his or her rights under that permit or lease pursuant to the provisions of Section 6804.1 of this code.

history: (History: Amended by Stats. 2018, Ch. 742, Sec. 12. (SB 1493) Effective January 1, 2019.)

article: 5.5. Geothermal Resources


citation: PRC § 6915

text: Subject to the other provisions of this article, the permittee or lessee shall be entitled to use so much of the surface as is reasonably necessary as determined by the commission for the production and conservation of geothermal resources.

article: 5.5. Geothermal Resources


citation: PRC § 6916

text:
(a) The commission may issue leases for direct heat application of geothermal resources for nonelectrical purposes for a royalty of less than 10 percent of gross revenue if it determines that such a royalty would be in the best interests of the state.

(b) The commission may also waive, suspend, or reduce the rental or minimum royalty for the lands included in any permit or lease, or any portion thereof, and waive, suspend, alter, or amend the operating requirements contained in the lease or regulations adopted pursuant to this section affecting operations of the lease or permit, in the interests of conservation, and to encourage the greatest ultimate recovery of geothermal resources if the commission determines that the action is necessary or beneficial to promote development or finds that the permit or lease cannot be successfully operated under the permit or lease terms or under the regulations.

history: (History: Amended by Stats. 2001, Ch. 745, Sec. 180. Effective October 12, 2001.)

article: 5.5. Geothermal Resources


citation: PRC § 6917

text: A permit or lease may be terminated by the commission only pursuant to the provisions of Section 6805 of this code.

article: 5.5. Geothermal Resources


citation: PRC § 6918

text: Leases under this article shall be for a primary term not to exceed 10 years and so long thereafter as geothermal resources are being or capable of being produced or utilized in commercial quantities, if the lessee is in compliance with the terms and conditions of an exploration and development program specified in the lease pursuant to Section 6911.

article: 5.5. Geothermal Resources


citation: PRC § 6919

text:
Notwithstanding any other provision of law to the contrary, the commission may negotiate and enter into agreements for compensation for drainage or geothermal leases of state-owned lands if any of the following conditions exist:

(a) Wells drilled upon private or public lands, including state-owned lands, are draining or may drain geothermal resources from state-owned lands; provided, that where wells are drilled on state-owned lands and other state-owned lands are or may be subject to drainage, the development is allowed only by drilling from already developed state lands.

(b) The lands are determined by the commission to be unsuitable for competitive bidding because of such factors as their small size or irregular configuration, or their inaccessibility from surface drill sites reasonably available or obtainable.

(c) The state owns a fractional interest in the lands.

(d) The lease or agreement is determined by the commission to be in the best interests of the state.

history: (History: Repealed and added by Stats. 1983, Ch. 1171, Sec. 7.)

article: 5.5. Geothermal Resources


citation: PRC § 6920

text: Any person engaged in the production of geothermal resources under a lease issued by the commission may commingle geothermal resources from any two or more wells without regard to whether such wells are located on the lands for which such lease was issued or elsewhere, provided, however, that said lessee shall install and maintain meters or other measuring devices satisfactory to the commission to measure the amount of geothermal resources produced from lands for which leases were issued by the commission.

article: 5.5. Geothermal Resources


citation: PRC § 6921

text: A permittee or lessee may, upon the approval of the commission and pursuant to the provisions of Chapter 4 (commencing with Section 3700) of Division 3, drill special wells, convert producing wells or reactivate and convert abandoned wells for the sole purpose of reinjecting geothermal resources or the residue thereof. If the lessee realizes a profit on such operations or if the geothermal resources proposed for reinjection are produced from other than state leased lands, then the commission may charge such consideration as is determined to be in the public interest, not to exceed the net profits or royalties payable under the lease.

article: 5.5. Geothermal Resources


citation: PRC § 6922

text: No prospecting permit or lease shall be made for less than 640 acres nor more than 5,760 acres and the permit or lease shall embrace a reasonably compact area. A prospecting permit or lease may be issued for a parcel less than 640 acres if the parcel is isolated from or not contiguous with other parcels of land available for a prospecting permit or lease hereunder or if the parcel would otherwise be subject to leasing rights as provided in subdivision (b) of Section 6912 by more than one surface owner. No person, association, or corporation shall take, hold, own, or control at one time, whether acquired directly from the commission under this article or otherwise, any direct or indirect interests in state geothermal leases or prospecting permits exceeding 25,600 acres. In computing acreage holdings or control, the accountable acreage of a party owning an undivided interest in a lease or prospecting permit shall be the party’s proportionate part of the total lease or prospecting permit acreage. Likewise, the accountable acreage of a party owning an interest in a corporation or association shall be his proportionate part of the corporation’s or association’s accountable acreage, except that no person shall be charged with his pro rata share of any acreage holdings of any association or corporation unless he is the beneficial owner of more than 10 percent of the stock or other instruments of ownership or control of the association or corporation. Parties owning a royalty or other interest determined by or payable out of a percentage of production from a lease or prospecting permit will be charged with a similar percentage of the total acreage. No limitation shall apply to the number of prospecting permits or leases granted under this article. In the unitizing of acreage by two or more lessees pursuant to a cooperative or unit plan of development or operation approved by the commission, accountable acreage of a party owning an interest shall be his pro rata share and any lease or portion so committed shall continue in force so long as committed to the plan beyond the expiration date of its primary term. Any lease eliminated from any approved cooperative plan of development shall continue in effect for the original term of the lease or for two years after its elimination from the plan or the termination thereof, whichever is longer, and so long thereafter as geothermal resources are being produced or utilized in commercial quantities. A purchaser of geothermal resources pursuant to a sales contract approved by the commission shall not be deemed to have a direct or indirect interest in geothermal leases or prospecting permits.

history: (History: Amended by Stats. 1983, Ch. 617, Sec. 2.)

article: 5.5. Geothermal Resources


citation: PRC § 6923

text: For the purpose of more properly conserving the natural resources of any geothermal resources areas, or any part thereof, the lessees thereof may unite with each other or with others in collectively adopting and operating under a cooperative or unit plan of development or operation of such geothermal resources lands, consistent with the provisions of Section 3756 of this code. The commission may, with the consent of the holders of leases involved, establish, alter, change, and revoke any drilling and production requirements of such leases, permit apportionment of production, and may make such regulations with reference to such leases, with like consent on the part of such lessees, in connection with the institution and operation of any such cooperative or unit plan, as the commission deems necessary or proper to secure the proper protection of the interests of the state.

article: 5.5. Geothermal Resources


citation: PRC § 6924

text:
Where the surface of state-owned lands sought for use or development of geothermal resources or the waters thereon are under the jurisdiction of a state department or agency other than the commission, the commission may issue permits or leases under this article only with the consent of and subject to such reasonable terms and conditions as may be prescribed by that other department or agency to ensure the adequate utilization of the surface of the lands or the waters thereon for the purposes for which they are then being administered or for which they were acquired. The other department or agency shall not prescribe any terms and provisions inconsistent with this article.

Notwithstanding Section 6217, as of June 30th of each year, a sum that is 50 percent of the revenue received by the state for the fiscal year ending on that June 30th, pursuant to leases for the development of geothermal resources on the surface of lands under the jurisdiction of that state department or agency, shall be available for appropriation by the Legislature solely for the programs of that state department or agency.

history: (History: Amended by Stats. 1989, Ch. 1017, Sec. 1.)

article: 5.5. Geothermal Resources


citation: PRC § 6925

text: A permit or lease under this article may be assigned, transferred, or sublet as provided for in Section 6804 of this code.

article: 5.5. Geothermal Resources


text: Whenever, as determined by the commission, any operation conducted under a geothermal exploration permit, prospecting permit, or lease pursuant to this article constitutes an unreasonable risk to the health, safety, or welfare of any human being or of pollution or contamination caused in any manner or resulting from such operations, the commission shall order an immediate suspension of any drilling and production operations, except those which are corrective, protective, or mitigative. Such operations shall not be resumed until the commission determines that adequate corrective measures have been taken. The commission may delegate the power to order a cessation of operations to its executive officer. Resumption of operations shall only be permitted by the commission.

article: 5.5. Geothermal Resources


text: Notwithstanding any other provision of this article, the commission may, at its discretion, issue a lease to the first qualified applicant for a parcel of less than 640 acres if the geothermal resources to be developed on this parcel are utilized entirely for purposes other than electricity generation. The terms, conditions, rentals, royalties, drilling requirements, and development programs of those leases shall be as determined by the commission. If there is an existing geothermal resources lease or permit for the land, the applicant shall obtain the permission of the lessee or permittee.

history: (History: Amended by Stats. 2006, Ch. 538, Sec. 573. Effective January 1, 2007.)

article: 5.5. Geothermal Resources


citation: PRC § 6926

text: Notwithstanding any other provision of this chapter, the right to extract sodium chloride, contained in any lands belonging to the State, or which may become the property of the State, situate in any of the townships described in Section 6931, which may be necessary or convenient for use in conditioning a public water supply owned, controlled, or operated by any metropolitan water district of the State, may be sold at a reasonable price or royalty, or both, to be fixed by the commission and conveyed to any such metropolitan water district.

history: (History: Added by Stats. 1941, Ch. 548.)

path: 6. PUBLIC LANDS > 3. Oil and Gas and Mineral Leases > 6. Extraction of Sodium Chloride From Specified Lands


citation: PRC § 6927

text: The terms so fixed shall be operative for 20 years from the date of the grant. Upon the expiration of such 20-year period and each succeeding period of 20 years the commission or other duly constituted authority, may prescribe for each ensuing period of 20 years a different royalty rate or rates to be paid as a condition of the continued exercise of the grant.

article: 6. Extraction of Sodium Chloride From Specified Lands


citation: PRC § 6928

text: The purchaser shall acquire no right to sell any such sodium chloride, but may extract it solely for public use in carrying out the public functions herein specifed.


citation: PRC § 6929

text: Any metropolitan water district may apply to the commission to purchase the right to extract sodium chloride from any such State lands. The application shall describe the lands and the proposed use to be made of the sodium chloride to be extracted therefrom, and shall be accompanied by a map or plat showing the location of the lands.


citation: PRC § 6930

text: If the sale is made, the right to extract from the lands, such sodium chloride as is found by the commission to be necessary or convenient for the purposes herein specified, together with the right to occupy and use so much of the land and to employ such methods as may be necessary or convenient for extracting and processing the sodium chloride, shall be conveyed to the applicant by patent. The patent shall provide for reversion to the State of any rights so patented in the event that any sodium chloride so extracted is sold by the patentee or used for any purpose other than the performance by the patentee of the functions herein specified.


citation: PRC § 6931

text: The provisions of this article shall apply only to lands belonging to the State, or which may become the property of the State, situate in one or more of the following townships, all of which are of the San Bernardino Base and Meridian: T. 5 N., in R. 11 E.; T. 1 N., 4 N. and 5 N., in R. 12 E.; T. 3 N. and 4 N., in R. 13 E.; T. 2 N. and 3 N., in R. 15 E.; and T. 2 N., in R. 17 E.


citation: PRC § 6932

text: Any right granted under this article to extract sodium chloride from State lands shall terminate upon the expiration of 99 years from the date of the issuance of the patent unless sooner terminated as herein otherwise provided.


citation: PRC § 6991

text: Leases for taking minerals from the waters of any stream or lake or from any lands withdrawn from sale by Section 6996 shall be issued only as provided by this chapter.

history: (History: Amended by Stats. 1959, Ch. 707.)

path: 6. PUBLIC LANDS > 4.1. Leases for Taking Minerals From Waters and Certain Lands


citation: PRC § 6992

text: Leases for any such lands and for the privilege of taking minerals from the waters of streams and lakes may be issued by the commission by competitive bidding to the highest responsible bidder, under general regulations adopted by the commission.

history: (History: Amended by Stats. 1968, Ch. 981.)

chapter: 4.1. Leases for Taking Minerals From Waters and Certain Lands


citation: PRC § 6993

text: The commission may, prior to the receipt of any bid for a lease under this chapter, withdraw any offer to receive bids therefor, and it may reject all bids therefor filed pursuant to invitation of the commission. At any time before the awarding of a lease thereon, all or any portion of a tract proposed to be leased may be withdrawn by the commission and eliminated from the proposal.

history: (History: Added by Stats. 1941, Ch. 1241.)


citation: PRC § 6994

text: Leases under this article shall be for terms not to exceed 20 years with the preferential right in the lessee to renew the lease for successive periods not to exceed 10 years upon such reasonable terms and conditions as may be prescribed by the commission.

history: (History: Amended by Stats. 1963, Ch. 705.)


citation: PRC § 6995

text: The commission shall prescribe such additional terms, covenants and conditions, consistent with the provisions of this chapter, of permits and leases issued under this article as will in its opinion effectually protect the interests of the State.


citation: PRC § 6996

text: All of the lands embraced within the original meander lines of streams and lakes belonging to the State, the waters of which contain minerals in commercial quantities, and all such lands which may hereafter inure to the State by virtue of its sovereignty, excepting such lands as have heretofore been contracted to be sold, are withdrawn from selection and sale.

history: (History: Added by Stats. 1959, Ch. 707.)


citation: PRC § 7051

text:
(a) The board of supervisors, boards of trustees, directors or other governing body of any county or other public or quasi-public corporation, body or agency authorized to acquire and hold real property pursuant to the statutory authority under which such county, corporation, body or agency is created may, under such limitations and restrictions as are prescribed by law, lease for the production of oil, gas and other hydrocarbons or for the mining of any other minerals whatsoever, any land owned by the county or such other public or quasi-public corporation, body or agency, or include such land in a community lease embracing adjoining lands, or enter into compensatory royalty agreements in lieu of making such lease, whenever, in the judgment of the governing body, the public use of such property shall not be substantially interfered with thereby. No land used, owned, dedicated, or acquired by purchase, condemnation, gift, or otherwise, as a public park, highway, street, walk, or public playground shall be so leased unless the use of such property for park, highway, street, walk or public playground purposes shall not be substantially interfered with thereby; provided, however, that if in the judgment of the governing body of any such park, highway, street, walk or public playground, drilling for oil or gas would not substantially interfere with the use of such property for park, highway, street, walk or playground purposes, then any such lease on any such property shall provide that drilling for oil or gas beneath the surface of such property shall be done by means of slant drilling from surface locations, outside the outer boundaries of any such property, or from designated locations inside the outer boundaries of such property, which inside locations have been approved by the county parks commission and will not interfere substantially with the use of such property for such park, highway, street, walk or playground purposes. No land owned or under the jurisdiction of the county or such other public or quasi-public corporation, body or agency lying within 300 feet above the line of high tide, or at any point below the line of high tide, of the Pacific Ocean, or any arm, bay, or inlet of the Pacific Ocean shall be leased for the drilling for and production of petroleum products or other minerals, unless the use of such property for public purposes shall not be substantially interfered with thereby; provided, however, that if in the judgment of the governing body of any such land, drilling for oil or gas would not substantially interfere with the use of such property for public purposes, then any such lease on any such property shall provide that drilling for oil or gas beneath the surface of such property shall be done by means of slant drilling from surface locations, outside the outer boundaries of any such property, or from designated locations inside the outer boundaries of such property, which inside locations have been approved by the governing body and will not interfere substantially with the use of such property for public purposes.

(b) Notwithstanding any other provision of this section, no tide or submerged lands owned or under the jurisdiction of the county or such other public or quasi-public corporation, body or agency shall be leased for the exploration for, drilling for or production of petroleum products within the boundaries of the areas of the County of Los Angeles described in subdivision (a) of Section 6871.2 unless such lands are within one nautical mile of the ordinary high water mark, the applicable conditions of the Public Resources Code and requirements of the State Lands Commission have been met, and the drilling for oil and gas deposits is to be done by means of slant drilling from an upland site.

history: (History: Amended by Stats. 1970, Ch. 1438.)

path: 6. PUBLIC LANDS > 5. Oil and Gas and Mineral Leases by Public Agencies


citation: PRC § 7052

text:
Lands may be leased in tracts of such size and shape as the governing body may determine. Before executing a lease of any such property, the governing body shall in open meeting, by not less than a two-thirds vote of its members, adopt a resolution declaring its intention to lease the property. The resolution shall describe the property proposed to be leased in such manner as to identify it, specify the minimum rental and term for which it will be leased, the form of the lease or agreement, and one variable, biddable factor, on which bids will be received, and fix a time not less than three weeks thereafter and place for a public meeting of said governing body, at which meeting sealed proposals to lease will be received and considered. The resolution shall, before the date of such meeting, be published once a week for three successive weeks in one or more newspapers of general circulation in the county where the property is situated.

This section shall not apply to the renewal or extension for a fixed term not exceeding the original term of leases or operating agreements initially issued for a fixed term.

The State Lands Commission may in its discretion exempt particular leases or operating agreements from the procedure required by this section and Section 7053 where by reason of the small size of the property or drainage, actual or imminent, such procedure would in the judgment of the State Lands Commission in the particular case be impractical.

history: (History: Amended by Stats. 1963, Ch. 1196.)

chapter: 5. Oil and Gas and Mineral Leases by Public Agencies