Act 509 of 1993 gave the Commissioner of State Lands office responsibility for
the leasing and permitting of minerals on state owned lands. The leasing process begins when a
company applies to our office for either a permit for sand and gravel removal or
a lease for oil and gas. From there
we research the parcel to insure it is on state owned land and that the agency
that owns it approves of the application.
The Commissioner then contacts the Natural Resources Committee who,
alongside the Commissioner, approves or denies the applications and set any
terms and conditions as well as the minimum bid amounts for prospective
This committee consists
of ten (10) state agencies including the Commissioner of State Lands who
presides as Committee Chairman: the Department of Finance and Administration,
the Oil and Gas Commission, Geological Survey, the Forestry Commission, the
Natural Resources Commission, the Game and Fish Commission, the Department of
Parks and Tourism, the Department of Environmental Quality and the Natural
Heritage Commission. If the
committee approves the application it then goes out to bid by being published in
the local and state newspapers and after twenty (20) days all bids that have
been received are opened and read aloud at the Commissioner of State Lands
office. The bid that meets the
requirements and is in the best interest of the State is declared the winning
bid and the company is notified. A
company who holds a lease on state owned land and is operating on that lease
must submit a monthly report along with the royalty check to the Commissioner of
State Lands office.
The funds that
the Commissioner collects are then sent to the State Treasury and from there are
dispersed to the appropriate agency.
In 2010 we received over 2.5 million dollars in royalties that were turned over
to the appropriate agencies and used to improve their services to the State. We currently have over 140 oil and
gas leases and over 30 sand and gravel permits.
If you would like more information on leasing minerals on state owned
lands please be sure and check out our leasing brochure,
Rules and Regulations for Leasing and
Permitting Natural Resources on State Owned Lands, or contact our Mineral
Leasing Division at 501-324-9422.