A bill for an act
relating to natural resources; facilitating carbon sequestration and oil and gas
exploration and production leases on state-owned land; authorizing rulemaking;
appropriating money; amending Minnesota Statutes 2022, sections 92.50,
subdivision 1; 93.25, subdivisions 1, 2; proposing coding for new law in Minnesota
Statutes, chapters 92; 93.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Minnesota Statutes 2022, section 92.50, subdivision 1, is amended to read:
(a) The commissioner of natural resources may lease land
under the commissioner's jurisdiction and control:
(1) to remove sand, gravel, clay, rock, marl, peat, and black dirt;
(2) to store ore, waste materials from mines, or rock and tailings from ore milling plants;
(3) for roads or railroads;
(4) to compensate the permanent school fund according to section 92.122; deleted text begin or
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(5) for geologic carbon sequestration; or
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deleted text begin (5)deleted text end new text begin (6)new text end for other uses consistent with the interests of the state.
(b) The commissioner shall offer the lease at public or private sale for an amount and
under terms and conditions prescribed by the commissioner. Commercial leases for more
than ten years and leases for removal of peat that cover 320 or more acres must be approved
by the Executive Council.
(c) The lease term may not exceed 21 years except:
(1) leases of lands for storage sites for ore, waste materials from mines, or rock and
tailings from ore milling plants or for the removal of peat for nonagricultural purposes may
not exceed a term of 25 years; and
(2) leases for commercial purposes, including major resort, convention center, or
recreational area purposes, may not exceed a term of 40 years.
(d) Leases must be subject to sale and leasing of the land for mineral purposes and
contain a provision for cancellation for just cause at any time by the commissioner upon
six months' written notice. A longer notice period, not exceeding three years, may be provided
in leases for storing ore, waste materials from mines, or rock or tailings from ore milling
plants. The commissioner may determine the terms and conditions, including the notice
period, for cancellation of a lease for the removal of peat and commercial leases.
(e) Money received from leases under this section must be credited to the fund to which
the land belongs.
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This section is effective the day following final enactment.
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With the approval of the Executive Council, the
commissioner of natural resources may enter into leases for geologic carbon sequestration
on lands belonging to the state or in which the state has an interest.
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An application for a lease under this section must be submitted
to the commissioner of natural resources. The commissioner must prescribe the information
to be included in the application. The applicant must submit with the application a certified
check, cashier's check, or bank money order payable to the Department of Natural Resources
in the sum of $100 as a fee for filing the application. The application fee must not be refunded
under any circumstances. The right is reserved to the state to reject any or all applications
for a lease.
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The commissioner must negotiate the terms of each lease entered
into under this section on a case-by-case basis, taking into account the unique geological
and environmental aspects of each proposal. The commissioner may require an applicant
to provide financial assurance to ensure payment of any damages resulting from geologic
carbon sequestration.
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This section is effective the day following final enactment.
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Minnesota Statutes 2022, section 93.25, subdivision 1, is amended to read:
The commissioner may issue leases to prospect for, mine, and
remove new text begin or extract gas, oil, and new text end minerals other than iron ore deleted text begin upondeleted text end new text begin fromnew text end any lands owned by
the state, including trust fund lands, lands forfeited for nonpayment of taxes whether held
in trust or otherwise, and lands otherwise acquired, and the beds of any waters belonging
to the state. For purposes of this section, iron ore means iron-bearing material where the
primary product is iron metal.new text begin For purposes of this section, "gas" includes both hydrocarbon
and nonhydrocarbon gases.
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This section is effective the day following final enactment.
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Minnesota Statutes 2022, section 93.25, subdivision 2, is amended to read:
All leases for nonferrous metallic minerals deleted text begin or petroleumdeleted text end new text begin ,
gas, or oilnew text end must be approved by the Executive Council, and any other mineral lease issued
pursuant to this section that covers 160 or more acres must be approved by the Executive
Council. The rents, royalties, terms, conditions, and covenants of all such leases shall be
fixed by the commissioner according to rules adopted by the commissioner, but no lease
shall be for a longer term than 50 years, and all rents, royalties, terms, conditions, and
covenants shall be fully set forth in each lease issued. No lease shall be canceled by the
state for failure to meet production requirements prior to the 36th year of the lease. The
rents and royalties shall be credited to the funds as provided in section 93.22.new text begin For purposes
of this section, "gas" includes both hydrocarbon and nonhydrocarbon gases.
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This section is effective the day following final enactment.
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Except as provided in section 103I.681, a person must not engage in or carry out
commercial extraction of gas or oil from consolidated or unconsolidated formations in the
state unless the person has first obtained a permit for the commercial extraction of gas or
oil from the commissioner of natural resources. Any permit under this section must be
protective of natural resources and require a demonstration of control of the proposed
extraction area through ownership, lease, or agreement. For purposes of this section, "gas"
includes both hydrocarbon and nonhydrocarbon gases.
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This section is effective the day following final enactment.
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(a) The following agencies may adopt rules governing geologic carbon sequestration,
gas, or oil exploration or production, as applicable:
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(1) the commissioner of the Pollution Control Agency may adopt or amend rules
pertaining to both geologic carbon sequestration and gas production;
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(2) the commissioner of health may adopt or amend rules pertaining to both geologic
carbon sequestration and exploration of gas or oil;
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(3) the Environmental Quality Board must consider whether new or amended rules are
needed pertaining to environmental review for both geologic carbon sequestration and gas
production;
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(4) the commissioner of revenue may adopt rules pertaining to the taxation of both
geologic carbon sequestration and gas production; and
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(5) the commissioner of natural resources must adopt or amend rules pertaining to
permitting and reclamation for geologic carbon sequestration and production of gas or oil.
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(b) An agency adopting rules under this section must publish the notice of intent to adopt
rules within 36 months of the effective date of this section. The 18-month time limit under
section 14.125 does not apply to rules adopted under this section. For purposes of this
section, "gas" includes both hydrocarbon and nonhydrocarbon gases.
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