Untitled Texas Attorney General Opinion ( 1951 )

Hon. Joseph C. Ternus Opinion No. V-1323.
County Attorney
San Patricia County Re: Applicability of city
Sinton, Texas ordinance regulating
mineral development-
to county owned land
within city limits
leased or to be leased
for mineral develop-
Dear Sir: ment .
Your letter requesting the opinion of the
Attorney General advises that the City of Sinton has
In force an ordinance regulating oil and gas develop-
ment within the city limits. The ordinance regulates
in detail all phases of the drilling and operating
of oil and gas wells within the corporate limits. It
divides the city into “drilling blocks” and allows
only one well to be drilled on each such block. A
i;;y;tdmust be obtained from~the city before a well is
. If more than one oil or gas sand is encoun-
tered, one well may be drilled into each sand. go ap-
plicant will be granted a drilling permit unless he
holds 011 and gas leases or drilling contracts from
the owners of fifty-one per’ cent of the mineral lease-
hold estate in the drilling block. All owners of mln-
era1 estates in the block are to receive their propor-
tionate share of the proceeds from the well.
San Patricia County owns land within the
city limits, including that on which the courthouse is
located. You are concerned as to the effect of the
city~ordinance on the mineral development of this land.
Your specific questions are as follows:
“(A) Prior to the enactment of the
ordinance the county leased a small tract
of land situated within the city limits
and followed the procedure set forth in
your opinion V-582, and the well was
drilled prior to the ordinance. After en-
actment of the ordinance a different sand
Hon. Joseph C. Ternus, Page 2 (V-1323)
has been found and the question now
arises whether the city ordinance would
prevent the lessee of the county from
drilling into this new sand and paying
to the county its full one-eighth, or
must the county share with the other
owners of the drilling block on which the
land Is situated in production of this
new sand. The position of the county is
that this particular lease and the subse-
quent new sand is not bound by the city
ordinance, which was enacted subsequent
to the making of the lease.
‘Ii B) Concerning the block of land
upon which the Courthouse is situated
there has been no lease; is the county
bound by the city ordinance or may it
lease the Courthouse square following the
procedures set out in your opinion V-582.”
Cities may validly enact such ordinances
under their police power if the ordinance expresses
a substantial and definite purpose to serve the pub-
lic and the means prescribed bear a r asonable rela-
tlonshlvp ~otth~facc;~nllsbment of tha ! purpose.
H m-3 iY ox 4, 32 F.2d 134, 67 A.L.R. 1336
(:.C.A.‘8th, 1929, cert. den. 280 U.S. 573);
Qil Co, v. RalFiadi;oC, 12 F. Supp. 19!?%?;.
Tex. 1935); Ip3rc 0 Railroad C Sig
F. Su;p. 20; (S.D.Tex. 1935)'. Klenak vom&m~l~ 611
&R nlnrt Q 177 S.W.2d 215 (Tex.Civ:App. 1944
error ref. w.iZm.). The ordinance of the City of’
Sinton meets these requirements. sunder its police
power the city may not only regulate mineral develop-
ment within its limits, as here, but completely pro-
hibit mineral development within the city llmlts if
necessary to protect i;d serve the public. Marble-
bead L d Co Los bze e y+ 47 F.2d 528 (C.C.A. 9th
1931, t&t. de:: 284 U.S. 63’). For a complete dis-
cussion of the validity of city ordinances regulating
or prohibiting mineral develo ment within city limits,
see Annotation, 168 A.L.R. 11 E;8.
In Attorney General’s Opinion V-582 (1948)
it was held that Article 54OOa, Vernon’s Civil Stat-
utes, governs the leasing of county owned land for
mineral development and that this article does not au-
thorize the county to enter into pooling agreements.
Briefly, Article 54OOa provides that such land shall
,
Hon. Joseph C., Ternus, Page 3 (V-1323)
be leased by the governing body of the county at
public auction, after prescribed advertising, to
the highest and best bidder. At least a one-eighth
royalty is required to be retalned~ by the lessor.
The ordinance ‘in question controls and
regulates only those drilling or operating oil and
gas,.wells. The county does neither. ‘. Of course, the
county ls’affected by the ordinance in that its les-
see oannot obtain production without pooling the
land leased from the county with the other land In
the drilling block. It prevents the countyQs les-
see from developing the county”s land as a separate
tract, and forces him to unitize county and other
land in order to obtain :production.
we have found no State,statute with which
the ordinance conflicts. The ordinance in no way
prevents the county.from leasing its land in acoord-
ante with the .provisions’of Article 54OOa. It does
not prevent the county from ‘leasing its land at pub-
lic auction or from retaining at least a one-eighth
royalty. As pointed, out, it does require the lessee
to pool the land with others~ before drilling. It is
fundamental that all mineral leases are executed sub-
ject to the legitimat~e exercise of police power by
governing bodies. True, we held in Opinion V-582
that the county governing body was not authorized to
enter intb pooling agreements, but this in no way
constituted a holdfng that leases executed by such
body were not subject to ,a~legitimate exercise of po-
lice power, forthe protection of the public health
and safety.
.It is clear that the purpose of Article
54QOa is to insure that governing bodies of politi-
cal subdivisions shall secure``the best possible min-
eral lease on their lands, not to exempt mineral de-
velopment of such lands from valid police regulations.
It does not. entitle a county to have its .lands devel-
oped fn a manner found by the city to Injuriously af-
fect lives, property, and the public welfare. The
county’s land within the city limits is subject to
reasonable police regulations of the city, -
Llano v. Llano Counte 23 s 0w0 1008 (Tex Civ%$+
8 Citv of Vi&o&a v, Victorfa Count O94 s”,w.
36g3)($ex0~iv0~pp. 1906 reversed one other g;ounds,
100 Tex..438, 101 S.W,‘190).
Hon. Joseph C. Ternus, Page 4 (V-1323)
In answer to your first question you are
advised that the county’s lessee must comply with
the city ordinance in drilling a well into the newly
discovered sand. The fact that the lease was exe-
cuted prior to passage of the ordinance does not ex-
empt the lessee from the provisions thereof as all
parties are considered to contract subject 40 legiti-
mate exercise of police power by the city. Adhi
v. West js&&zL, 51 F. supp. 532 (E.D. 111. 19%;
30 Tex. Jur. 121 Municipal Corporations, Sec. 58;
Annotation, 168 A.L.R. 1188.
As to your second question, the ordinance
does not prevent the county from leasing its land in
accordance with the provisions of Article $OOa,
V.C.S. The fact that this statute does not authorize
the governing body of the county to enter into pool-
ing agreements in no way prevents the county’s land
from being pooled with others for mineral deve$;;m;enE
where required by a valid police regulation.
see of the county must fully comply with the city or-
dinance in developing land leased from the county,
and the county may accept its share of the royalty un-
der units pooled by reason of the city ordinance.
SUMMARY
The mineral lessee of county owned
lands located in ~a city must comply with
a city ordinance regulating mineral de-
velopment within Its limits, even though
the lease was executed prior to en&cement
of the ordinance.
An ordinance of the City of Sinton
regulating mineral development within its
limits, requiring pooling of county owned
lands with others for mineral development,
does not prevent the county from complying
with the provisions of Article %OOa, V.C.S.,
in leasing such lands.
Yours very truly,
APPROVED
: PRICE DANIEL
Attorney General
Jesse P. Luton, Jr.
Reviewing Assistant
B
Charles D. Mathews
First Assistant
CUZ:wb