N.D. Admin. Code Title 85 — University and School Lands, Board of

Article 85-01 General Administration

Chapter 85-01-01 Definitions and General Provisions

N.D. Admin. Code 85-01-01-01 Definitions

The following definitions, in addition to the definitions in North Dakota Century Code chapters 15-05, 15-06, 15-07, 15-08, 15-08.1, 38-09, 47-06, 47-30.2, and 57-62, apply to this title:

1."Acquired lands" includes all property defined as "nongrant" and "other than original grant lands" in North Dakota Century Code section 15-07-01.

2."Arm's length transaction" means a transaction between parties with adverse economic interests in which each party to the transaction is in a position to distinguish its economic interest from that of the other party and does not mean a transaction made by a corporation or other entity with itself, or a parent, subsidiary, or interrelated corporation or entity, or between partners or co-joint venturers, or between corporations or other entities having interlocking directorships or close business relationships that may compromise their individual interests.

3."Agricultural use" includes the use of trust lands for the purpose of grazing, cropping, and haying.

4."Board" means the board of university and school lands.

5."Bonus" means the monetary consideration paid by a lessee for the execution of a lease by the board.

6."Certified appraiser" means a certified general appraiser or a certified residential appraiser who holds a valid permit issued by the North Dakota real estate appraiser qualifications and ethics board.

7."Coal" means a dark-colored compact and earthy organic rock with less than forty percent inorganic components, based on dry material, formed by the accumulation and decomposition of plant material. The term includes consolidated lignitic coal, in both oxidized and nonoxidized forms, and leonardite, having less than eight thousand three hundred British thermal units per pound [453.59 grams], moist and mineral matter free, whether or not the material is enriched in radioactive materials.

8."Coal lease" means a contract entered between the board and a third party for a coal mining operation on trust lands.

9."Coal leased premises" means the land subject to a given coal lease.

10."Coal mining operation" means any type of activity conducted to discover, or prospect for, the presence of coal, or to remove the coal so discovered from its original position on or in the land by any means whatsoever.

11."Commercial quantities" means whether:

a.The well yields a profit exceeding operating costs over a reasonable period of time; and

b.A reasonably prudent operator would continue operating a well in the manner being operated under the facts and circumstances.

12."Commissioner" means the commissioner of university and school lands.

13."Construction aggregate" means gravel, sand, scoria, road material, building stone, colloidal or other clays, and cement materials.

14."Construction aggregate lease" means a contract entered between the board and a third party for mining of construction aggregate on trust lands.

15."Construction aggregate leased premises" means the land area subject to a given construction aggregate lease.

16."Construction aggregate mining operation" means any type of activity conducted to discover, or prospect for, the presence of construction aggregate, or to remove the construction aggregate so discovered from its original position on or in the land by any means whatsoever.

17."Custodial agreement" means an agreement between the lessee and a third party in which the lessee agrees to take custody of livestock not owned by the lessee for a specified period of time and to provide day-to-day care for the livestock.

18."Delay rental" means the annual minimum payment given to maintain a lease in the absence of production in commercial quantities during the primary term.

19."Department" means the office of the commissioner and the department of trust lands.

20."Disturbed" means any alteration of the surface or subsurface of any lands subject to a lease or encumbrance with the board.

21."Encumbrance" means a right other than an ownership interest in real property. The term includes easements, permits, surface damage agreements and any other restrictions, encroachments, licenses, mortgages, and liens that relate to trust lands, and specifically excludes leases which are administered separately.

22."Fair market value" means the price set by the commissioner after an analysis of prices paid for similar products or services in the local area under article 85-04.

23."F.O.B." means free on board.

24."Gas" means all natural gas and all other gaseous or fluid hydrocarbons not defined as oil, but does not include coal, lignite, oil shale, or similar hydrocarbons.

25."Gas well" means a well producing gas or natural gas from a common source of gas supply as determined by the North Dakota industrial commission, other than from coalbed methane.

26."Gross proceeds" means the sum of all consideration in whatever form or forms, paid for the gas attributable to the lease.

27."Invasive species" means a species that is nonnative to the ecosystem under consideration and whose introduction causes or is likely to cause economic or environmental harm or harm to human health.

28."Market value" means the price a willing buyer would pay a willing seller in an arm's length transaction in which the buyer is not compelled to buy or the seller is not compelled to sell.

29."Net construction aggregate interest" means the undivided portions of the total construction aggregate estate on a given tract of land.

30."Nonpermanent improvement" means agricultural structures that can be readily removed from the land, including fences, creep feeders, and stock tanks.

31."Offset drainage" means the drainage of oil or gas to an adjoining tract of land on which a well is being drilled or is already in production.

32."Offset well" means any well drilled opposite another well on adjoining property with the specific purpose of preventing drainage to the adjoining property.

33."Oil" means crude petroleum oil and other hydrocarbons regardless of gravity produced in liquid form and the liquid hydrocarbons known as distillate or condensate recovered or extracted from gas, other than gas produced in association with oil and commonly known as casinghead gas.

34."Oil and gas lease" means a contract entered between the board and a third party for oil and gas production.

35."Oil and gas leased premises" means the land subject to a given oil and gas lease.

36."Oil well" means a well capable of producing oil and which is not a gas well as defined herein.

37."Original grant lands" means all those lands granted to the state of North Dakota by virtue of the Enabling Act of 1889, as further defined in North Dakota Century Code section 15-06-01.

38."Payor" means either the lessee or an entity other than the lessee who assumes, or agrees to perform, any of the lessee's rights and responsibilities under a lease.

39."Permanent improvement" means agricultural structures that are permanently affixed to the land, including well casings, dams, and dugouts.

40."Pest" means any insect, rodent, nematode, fungus, weed, any form of terrestrial or aquatic plant or animal life, viruses, bacteria, or other micro-organisms, except viruses, bacteria, or other micro-organisms, whose presence causes or is likely to cause economic or environmental harm or harm to human health.

41."Surface land lease" means a contract entered between the board and a third party for agricultural use on trust lands.

42."Surface land leased premises" means the land area subject to a given surface land lease.

43."Terminate," unless otherwise provided, has the same meaning as the word "cancel."

44."Trust lands" means any property owned by the state of North Dakota and managed by the board.

45."Trusts" means permanent trusts and other funds managed or controlled by the board.

46."Vertical oil and gas well" means a well, the wellbore of which is drilled on a vertical or directional plane into a non-shale formation and is not turned or curved horizontally to allow the wellbore additional access to the oil and gas reserves in the formation.

47."When run" means that point in the time when the production from a well is removed or sold from the leased premises and delivered to the purchaser or user of such production; for purposes of computing royalties, that point in time must be considered to be 7:00 a.m., on the day the production is delivered, using central standard time, to the purchaser or user regardless of the actual time delivered.

April 1, 2024; April 1, 2026.

History

• History: Effective January 1, 2019; amended effective January 1, 2020; January 1, 2021; April 1, 2022;
• General Authority: NDCC 15-01-02, 15-05-05, 15-05-09, 15-05-18, 15-07-02, 15-07-20, 15-08.1-06, 43-30.2-03, 61-33-06
• Law Implemented: NDCC 4.1-47-04, 15-01-02, 15-04, 15-05, 15-07, 15-08, 15-08.1

N.D. Admin. Code 85-01-01-02 Exception

The board may grant an exception to articles 85-03, 85-04, and 85-06, when such exception is in the best interests of the trusts.

History

• History: Effective January 1, 2019; amended effective January 1, 2020.
• General Authority: NDCC 28-32-02
• Law Implemented: NDCC 15-01-02

Article 85-02 Energy Infrastructure and Impact Grants

Chapter 85-02-01 Definitions

N.D. Admin. Code 85-02-01-01 Definitions

The following definitions, in addition to the definitions in North Dakota Century Code chapter 57-62, apply to this article:

1."Advisory committee" means the committee selected by the board to review grant applications and make recommendations to the board. Committee members must possess expertise and experience within a particular sector relevant to the grants being awarded.

2."Aged grant" means a grant that has not been fully expended, is past the expected completion date, and does not have written approval to extend the completion date.

3."Director" means the director of the energy infrastructure and impact office or director's designee.

History

• History: Effective January 1, 2019.
• General Authority: NDCC 28-32-02
• Law Implemented: NDCC 15-01-02, 57-62-05

Chapter 85-02-02 Grant Processing

N.D. Admin. Code 85-02-02-01 Grant announcement

All grant announcements must be posted on the energy impact webpage. Grant announcements may be sent either electronically or by postal mail to:

1.Media contacts;

2.Members of the North Dakota legislative assembly;

3.North Dakota league of cities or association of counties, whichever applies;

4.Other associations representing targeted grant sectors;

5.Board members;

6.All department contacts for the targeted grant sector; and

7.Anyone who requests a copy.

N.D. Admin. Code 85-02-02-02 Applications

1.An applicant shall complete and submit a grant application prescribed by the director along with supporting documentation, including engineer estimates, vendor bids or quotes, most recent audited financial statements, established budget for the political subdivision, mill levy and taxable valuation used to determine the mill levy, and any other supplemental information requested by the director or published in the grant announcement.

2.A grant application must be received by the energy infrastructure and impact office before the deadline listed in the grant announcement. For good cause shown, a grant application received after the deadline may be considered at the discretion of the advisory committee, board, or director.

N.D. Admin. Code 85-02-02-03 Signatures

1.For political subdivisions, a grant application must be signed by an appointed or elected government official and the primary fiscal officer assigned the duties of managing grant communications, reports, and reimbursement requests.

2.For an entity exempted from statutory political subdivision requirements, a grant application must be signed by the primary executive and the primary fiscal officer assigned the duties of managing grant communications, reports, and reimbursement requests.

3.An electronic signature is permissible.

History

• Law Implemented: NDCC 57-62-05, 57-62-06

N.D. Admin. Code 85-02-02-04 Scoring

The director has discretion not to score a substantially incomplete application, resulting in the disqualification of the substantially incomplete application. In reviewing a grant application, the following may be considered:

1.Objective;

2.Project readiness and timeline for completion;

3.Impact of energy activity;

4.Health, welfare, and safety of citizens where the project contributes to sustained economic development or activity;

5.Budget and other available funding;

6.Completeness of the application; and

7.Any other criteria deemed relevant by the advisory committee, board, or director.

History

• Law Implemented: NDCC 57-62-05, 57-62-06

N.D. Admin. Code 85-02-02-05 Assignment of funds

If an advisory committee is appointed, it shall review each application and assign a recommended amount to each grantee, the aggregate not to exceed that authorized by the board.

History

• Law Implemented: NDCC 15-01-02, 57-62-05

N.D. Admin. Code 85-02-02-06 Supplement

If approved in advance by the director, an applicant may supplement its application.

N.D. Admin. Code 85-02-02-07 Advisory committee recommendations

The advisory committee, if appointed, shall submit to the director its recommendations for funding, as well as a list of the applications not recommended for funding. The director shall submit the recommendations for the board's consideration and approval. The director may also submit the director's recommendations, if different from the advisory committee, for board consideration and approval.

History

• Law Implemented: NDCC 15-01-02, 57-62-05

Chapter 85-02-03 Grant Award

N.D. Admin. Code 85-02-03-01 Authority

The board retains final authority to award grant funds.

History

• Law Implemented: NDCC 15-01-02

N.D. Admin. Code 85-02-03-02 Signatures

All correspondence, grant extension requests, grant allocation change requests, or other presentations must be signed by the following:

1.A political subdivision--an appointed or elected government official.

2.An entity exempted from statutory political subdivision requirements--the primary executive or the primary fiscal officer assigned the duties of managing grant communications, reports, and reimbursement requests.

History

• Law Implemented: NDCC 57-62-05, 57-62-06

N.D. Admin. Code 85-02-03-03 Acceptance of grant

A grant recipient shall receive written notification of the grant awarded by the board from the director. The grant recipient shall acknowledge and return, within thirty days of the date of the notice, the recipient's acceptance or declination of funds on a form provided by the director. If a recipient fails to acknowledge acceptance of the grant funds within the thirty days, the board may declare the grant award void.

History

• Law Implemented: NDCC 15-01-02, 57-62-05

N.D. Admin. Code 85-02-03-04 Vendor registry

A grant recipient must be registered with the office of management and budget as an active participant to receive electronic payment transactions.

N.D. Admin. Code 85-02-03-05 Grant period

The length of a grant period is three years, unless otherwise adjusted by the board.

N.D. Admin. Code 85-02-03-06 Progress report

1.The grantee shall submit to the director a biannual progress report, prescribed by the energy infrastructure and impact office. The biannual progress report must be received by the energy infrastructure and impact office by the twentieth day of June and December of every year of the project.

2.The director may conduct onsite project status visits to review and document utilization of the grant. The director shall provide advance notice to the grantee of any project status visits. The grantee shall provide the director with any project documentation upon request by the director; assist with inspection of equipment purchased, completed construction, or review of any other project expenditures; and provide a description of the remaining budget and timeline for the project.

3.If a grantee is delinquent in submitting a progress report or does not comply with the project status visit, the director may delay grant reimbursements.

N.D. Admin. Code 85-02-03-07 Payment of grant

1.Grant funds are distributed based on documentation of either expenditures for project completion or asset acquisition, as approved by the director. Reimbursement may be authorized in phases or based on the incurrence of expenditures by the grantee. A grantee shall submit a request for reimbursement on forms prescribed by the energy infrastructure and impact office in order to receive reimbursement. A request for reimbursement must include:

a.A vendor invoice; and

b.Documentation of payment or formal meeting minutes, if authority is required by a governing body, which approves payment of project expenditures.

2.The director shall transmit the reimbursement electronically, if possible.

3.For final payment, the grantee shall submit a request for reimbursement no later than twenty days after the end of the grant period.

N.D. Admin. Code 85-02-03-08 Grant extension or retirement

1.The grantee may submit a written request to the director if a grant project will not be completed by expiration of the grant period. The request must be received by the director no later than seventy-five days prior to expiration of the grant period. The request must detail:

a.The necessity for the request and the specific reasons why the project cannot be completed by the end of the grant period;

b.The portion of the project completed since the grant was awarded;

c.The efforts the grantee has taken to complete the project prior to expiration of the grant period;

d.The timeline for completion of the project; and

e.Any additional information requested by the director.

2.The grantee shall submit written notice to the director of a project's completion and any remaining unused funds prior to the expiration of the grant period. If a project is not initiated, a grantee shall submit written notice of project retirement to the director. The board may retire the grant and return the remaining balance to the originating grant fund.

N.D. Admin. Code 85-02-03-09 Changes to purpose or scope of project

Funds must be used for the purpose or scope proposed in the grantee's application, unless a grantee makes a written request to the director for authorization to modify the purpose or scope of the project. The grantee must provide supporting documentation detailing the proposed modification.

Authorization for a modification may be granted, as follows:

1.A modification that does not change the overall project goals, as originally proposed, may be approved by the director.

2.A modification that changes the overall project goals, as originally proposed, or reallocates the funding to costs not included in the grantee's application may only be approved by the board.

History

• Law Implemented: NDCC 15-01-02, 57-62-05

Chapter 85-02-04 Aged Grants

N.D. Admin. Code 85-02-04-01 Aged grants

In the event of an aged grant, the director shall notify the grantee in writing that the board intends to cancel the grant and retire the remaining balance. Within fifteen days of the postmark of the notice, the grantee shall:

1.Submit a written response to the director indicating that the grantee concurs with cancellation of the grant; or

2.Submit a request for a grant extension.

History

• History: Effective January 1, 2019.
• General Authority: NDCC 28-32-02
• Law Implemented: NDCC 57-62-05

N.D. Admin. Code 85-02-04-02 Grant deemed unresponsive

A grantee that does not respond to the director's notice is deemed to concur with the cancellation of the grant. The board may cancel the grant immediately and retire the remaining balance to the originating grant fund. If an extension of an aged grant is not granted, the board may cancel the grant immediately and retire the remaining balance to the originating grant fund.

History

• History: Effective January 1, 2019.
• General Authority: NDCC 28-32-02
• Law Implemented: NDCC 15-01-02, 57-62-05

Article 85-03 Unclaimed Property

Chapter 85-03-01 Definitions

N.D. Admin. Code 85-03-01-01 Definitions

The following definitions, in addition to the definitions in North Dakota Century Code chapter 47-30.2, apply to this article:

1."Claim" means the formal filing that initiates the process of returning unclaimed property to the rightful owner.

2."Claimant" means the individual submitting the claim form for unclaimed property.

3."Claim form" means the form prescribed by the administrator by which a claim can be initiated.

4."Due diligence" means the holder's efforts to contact the owner prior to remitting property to the administrator, as required under North Dakota Century Code sections 47-30.2-26 and 47-30.2-27.

5."Heir finder" means an individual or business that assists owners in locating unclaimed property for a fee.

History

• History: Effective January 1, 2019; amended effective April 1, 2022.
• General Authority: NDCC 47-30.2-03
• Law Implemented: NDCC 47-30.2

Chapter 85-03-02 Reporting Abandoned Property

N.D. Admin. Code 85-03-02-01 Reporting of abandoned property

A holder shall report abandoned property to the administrator in the standard national association of unclaimed property administrators' format.

History

• Law Implemented: NDCC 47-30.2-21, 47-30.2-22, 47-30.2-23, 47-30.2-32, 47-30.2-37

N.D. Admin. Code 85-03-02-02 Information contained in reports

In addition to the requirements in North Dakota Century Code section 47-30.2-22, a holder shall submit the following information in the report, if available:

1.Identifying check, account, or policy number;

2.Owner date of birth; and

3.For mineral proceeds, a legal land description, well number, recording information, and any other information to adequately describe the lease.

History

• Law Implemented: NDCC 47-30.2-21, 47-30.2-22, 47-30.2-23

N.D. Admin. Code 85-03-02-03 Due diligence

Repealed effective April 1, 2022.

N.D. Admin. Code 85-03-02-04 Mineral proceeds

A holder shall accumulate mineral proceeds and submit an annual lump sum report to the administrator before November first for the amount due through June thirtieth.

History

• Law Implemented: NDCC 47-30.2-04, 47-30.2-21, 47-30.2-22, 47-30.2-23, 47-30.2-32

N.D. Admin. Code 85-03-02-05 Early reporting

Repealed effective April 1, 2022.

N.D. Admin. Code 85-03-02-06 Notice to apparent owner by holder of automatic reinvestment account

For accounts containing a security as defined in subsection 30 of North Dakota Century Code

section 47-30.2-01 that allow for automatic reinvestment of dividends or interest and where there is no record of indication of apparent owner interest in the property as defined in North Dakota Century Code

section 47-30.2-12, holders shall provide notice via certified mail to the apparent owner at a minimum of once every three years in a format substantially similar to that required in North Dakota Century Code section 47-30.2-27. A return of a certified mail return receipt signed by the apparent owner shall constitute evidence of indication of apparent owner interest in the subject property as required by North Dakota Century Code section 47-30.2-12. The holder shall retain all valid return receipts as records of indication of apparent owner interest. A return to sender as undeliverable or not signed by the apparent owner shall cause the property to be subject to due diligence procedures pursuant to North Dakota Century Code sections 47-30.2-26 and 47-30.2-27. A deceased individual cannot demonstrate an ownership interest in property.

History

• History: Effective April 1, 2022.
• Law Implemented: NDCC 47-30.2-12, 47-30.2-26, 47-30.2-27

Chapter 85-03-03 Claiming Property

N.D. Admin. Code 85-03-03-01 Claims

Repealed effective April 1, 2022.

N.D. Admin. Code 85-03-03-02 Required documentation

A claimant shall provide adequate documentation to establish ownership of the abandoned property, including photo identification and documentation of social security number.

1.The following additional documentation is required if a claim is submitted on behalf of:

a.Deceased individuals: Copy of death certificate and documentation providing legal claim

authority.

b.Business claims: Federal employer identification number and documentation providing legal claim authority.

c.Incapacitated individuals: Copy of documentation providing legal claim authority.

d.Minors: Documentation sufficient to establish legal authority to act on the owner's behalf, if the owner is under the age of eighteen.

2.If there are multiple owners, all reported owners or the legal representative shall submit a claim form.

3.The administrator may request additional documentation necessary to support a claim.

4.If a claimant chooses to donate the property to the common schools trust fund, required documentation remains the same.

History

• History: Effective January 1, 2019; amended effective April 1, 2026.
• General Authority: NDCC 15-01-02, 47-30.2-03
• Law Implemented: NDCC 47-30.2-50, 47-30.2-51, 47-30.2-52

N.D. Admin. Code 85-03-03-03 Payment of claim

Upon approval of a claim, payment must be issued:

1.In the name of the reported owner;

2.In accordance with a court order; or

3.In the name of the rightful owner, as determined by the administrator, based on the records of the holder and other information available to the administrator.

History

• Law Implemented: NDCC 47-30.-50, 47-30.2-51, 47-30.2-52

N.D. Admin. Code 85-03-03-04 Heir finder requests

1.An electronic list of owners must be provided upon request. The list includes:

a.Property held by the unclaimed property division as of the date of the request;

b.Owner's name;

c.Owner's last known address;

d.Holder information;

e.Date of last activity; and

f.Type of property.

2.A paper copy of the list must be provided upon request for a fee to be set by the administrator.

History

• Law Implemented: NDCC 47-30.2-03

N.D. Admin. Code 85-03-03-05 Claims submitted by heir finder

An approved claim submitted by an heir finder must be paid in the name of the original owner.

History

• Law Implemented: NDCC 47-30.2-50, 47-30.2-51, 47-30.2-52, 47-30.2-68, 47-30.2-69, 47-30.2-70

Chapter 85-03-04 Examinations

N.D. Admin. Code 85-03-04-01 Contract examiners

1.The administrator may contract with a person to conduct unclaimed property examinations to determine compliance with North Dakota Century Code chapter 47-30.2.

2.A contract to conduct an examination may provide for compensation of the person based on a fixed fee, hourly fee, or contingent fee.

3.An examiner may not engage in any unclaimed property examination to determine compliance with North Dakota Century Code chapter 47-30.2 without written authorization from the administrator.

4.An examiner shall report in writing to the administrator at least monthly on the status of all unclaimed property examinations the examiner has been authorized to perform by the administrator.

History

• Law Implemented: NDCC 47-30.2-55

N.D. Admin. Code 85-03-04-02 Notice of examination

1.All unclaimed property examinations begin with an official notice of examination.

2.The notice of examination must include:

a.An explanation that the administrator is authorized to examine the records of the person subject to examination pursuant to North Dakota Century Code chapter 47-30.2;

b.The identity of the assigned examiner; and

c.The examiner's contact information.

3.A notice of examination may either be sent directly to the person subject to examination by the administrator or to the examiner assigned to the examination for delivery to the person subject to examination.

History

• Law Implemented: NDCC 47-30.2-55

N.D. Admin. Code 85-03-04-03 Entrance conference

1.Once an examination is assigned and written notice of examination is provided to the person subject to examination, an entrance conference will be scheduled with the examiner and representatives of the person subject to examination. A representative of the administrator may participate in an entrance conference.

2.During the entrance conference, the examiner shall, to the extent practicable:

a.Identify the types of property that will be subject to the examination and the time period covered by the examination;

b.Discuss an examination work plan, a tentative schedule, and the scope of work;

c.Provide contact information for both the examiner and the administrator;

d.Notify the person subject to examination of the person's ability to request an informal conference with the administrator pursuant to North Dakota Century Code section 47-30.2-61;

e.Advise the person subject to examination that the administrator and not the examiner makes determinations concerning that person's liability under North Dakota Century Code chapter 47-30.2 and that interpretations of that chapter are made by the administrator;

f.Request records and materials necessary to proceed with the next steps of the examination;

g.Explain the requirement to provide a due diligence notice to the apparent owner of property presumed abandoned; and

h.Explain that, unless otherwise agreed to in writing by the administrator, the person subject to examination shall remit any unclaimed property identified during the examination that is owed to the state of North Dakota.

History

• History: Effective April 1, 2022; amended effective April 1, 2024.
• Law Implemented: NDCC 47-30.2-55, 47-30.2-57, 47-30.2-58, 47-30.2-61, 47-30.2-62

N.D. Admin. Code 85-03-04-04 Examination refusal

If the person subject to examination refuses to adhere to the rules and laws, the examiner shall inform the administrator of the refusal and the commissioner may bring action to enforce the rules and laws as outlined in North Dakota Century Code chapter 47-30.2, including issuing an administrative subpoena.

History

• Law Implemented: NDCC 47-30.2

N.D. Admin. Code 85-03-04-05 Examination guidelines

1.The examiner and the person subject to examination shall act in good faith to conduct the examination under the terms and within the time frame established in the entrance conference.

2.During the examination, the examiner may make subsequent requests, to the person subject to examination, for additional books and records required to complete the examination.

a.The examiner shall submit record requests to the person subject to examination in writing or, if the request is made verbally, shall follow up with written documentation of the request.

b.Record requests must have reasonable deadlines in order to move the examination forward and avoid unnecessary delays.

c.The examiner shall provide a reasonable time frame for the person subject to examination to respond to the request based on the type and extent of the information requested and other relevant facts and circumstances.

d.The examiner shall provide confirmation of receipt with reasonable projected response times to submissions received from the person subject to examination.

3.The examination must include access to the original books, records, and other supporting documentation deemed by the administrator to be necessary to ascertain compliance with North Dakota Century Code chapter 47-30.2.

4.The examiner shall properly document the examination and make the working papers gathered during the unclaimed property examination available for review by the administrator.

The working papers must include planning information and all related calculations, statistical analyses, and summarizations.

History

• Law Implemented: NDCC 47-30.2-55, 47-30.2-57, 47-30.2-58

N.D. Admin. Code 85-03-04-06 Estimation

Examinations carried out using estimation as set forth by North Dakota Century Code section 47-30.2-59 adhere to the following rules:

1.Estimation may only be used when the person subject to the examination failed to comply with North Dakota Century Code section 47-30.2-24, or when the person and the administrator mutually agree to the use of estimation. The ability of the administrator to use estimation is intended as a deterrent to the intentional or negligent destruction of records that would be used in an unclaimed property examination to identify unclaimed property.

2.A payment made based on estimation under this section does not relieve a person subject to an examination from an obligation to report and deliver property to a state in which the holder is domiciled.

3.An examiner may use estimation in an examination if:

a.The person subject to examination agrees in writing to the use of estimation as part of an examination resolution agreement; or

b.The administrator concludes that the person subject to an examination failed to comply with North Dakota Century Code section 47-30.2-24 and the administrator approves in writing the use of estimation in the examination.

4.Estimation by the administrator should reasonably approximate the amount of unclaimed property that should have been reported to North Dakota if all reports had been filed and records had been maintained as required by North Dakota Century Code chapter 47-30.2.

5.In circumstances where the administrator has concluded that the person subject to an examination failed to comply with North Dakota Century Code section 47-30.2-24 and the administrator has approved in writing the use of estimation in the examination, before the use of estimation in an examination, the administrator shall:

a.Notify the person subject to examination, in writing, that estimation is being considered because of a failure to maintain the records required by North Dakota Century Code

section 47-30.2-24;

b.After considering any evidence submitted by the examiner and the person subject to examination, make a written determination that the person subject to examination has failed to maintain the records required by North Dakota Century Code section 47-30.2-24;

c.Provide an opportunity for the person subject to examination to submit written objections, including:

(1)Submitting evidence that the person subject to examination has maintained sufficient records to perform the examination for some or all of the years during the time period covered by the examination; or (2)Proposing an estimation methodology;

d.Notify in writing the person subject to examination of:

(1)The estimation methodology to be used; and (2)For which years during the time period covered by the examination estimation will be used.

History

• Law Implemented: NDCC 47-30.2-24, 47-30.2-55, 47-30.2-59, 47-30.2-62

N.D. Admin. Code 85-03-04-07 Multistate examinations

1.The administrator may agree to participate in an examination of a person for compliance with unclaimed property laws of multiple states, including North Dakota Century Code chapter 47-30.2, when examiners perform examinations for more than one state.

2.As different states participating in a multistate examination will have different rules for examinations, there may be conflicts between the statutory or regulatory requirements for how the examiner should conduct the examination. When practicable, the examiner should comply with the requirements of this section when conducting a multistate examination. However, if there is a conflict between the requirements of this section and the requirements of one or more other states, the examiner may vary from the requirements of this section so long as the examiner:

a.Follows any requirements imposed by North Dakota Century Code chapters 44-04 and 47-30.2, including confidentiality requirements; and

b.Uses North Dakota Century Code chapter 47-30.2 with regards to any property for which the state of North Dakota has the superior claim.

History

• Law Implemented: NDCC 47-30.2-55, 47-30.2-57, 47-30.2-63, 47-30.2-64

N.D. Admin. Code 85-03-04-08 Bankruptcy

If, at any time before or during an examination, the person subject to examination files for bankruptcy, that person shall give notice of the filing to the examiner. The examiner shall, within seven calendar days after receiving notice or the discovery of the event, notify the administrator of the bankruptcy filing. If the administrator so elects, the examiner shall assist the administrator to ensure that a proper proof of claim is timely filed in the bankruptcy action.

History

• Law Implemented: NDCC 47-30.2-55, 47-30.2-58, 47-30.2-62

N.D. Admin. Code 85-03-04-09 Examination resolution agreements

1.The commissioner may resolve an examination via negotiation and settlement with the person subject to examination.

2.The commissioner may not agree in a settlement to provide indemnification beyond that provided in North Dakota Century Code chapter 47-30.2.

3.A mutually agreed upon settlement resolves a specific examination and does not create any precedent on specific legal issues.

History

• Law Implemented: NDCC 47-30.2-55, 47-30.2-58, 47-30.2-62

N.D. Admin. Code 85-03-04-10 Voluntary disclosure agreement program

1.The administrator may establish a voluntary disclosure agreement program for persons who are not in compliance with North Dakota Century Code chapter 47-30.2.

2.Under a voluntary disclosure agreement program, the commissioner may agree to waive, in whole or in part, interest and penalties for a person who voluntarily reports and remits to the administrator property that should have been previously reported, paid, or delivered to the administrator pursuant to North Dakota Century Code chapter 47-30.2. The voluntary disclosure agreement program includes property that is reportable pursuant to the transition provisions of North Dakota Century Code section 47-30.2-74. Property reportable under North Dakota Century Code chapter 47-30.2 or the previous Uniform Unclaimed Property Act may be eligible to be voluntarily reported and remitted under the voluntary disclosure agreement program.

3.A person who has been sent an official notice of examination may not participate in the voluntary disclosure agreement program.

4.Participation in the administrator's voluntary disclosure agreement program does not waive or otherwise limit the administrator's authority to order and conduct an unclaimed property examination pursuant to North Dakota Century Code section 47-30.2-55.

History

• General Authority: NDCC 47-30.2-21, 47-30.2-56
• Law Implemented: NDCC 47-30.2-22, 47-30.2-55, 47-30.2-58, 47-30.2-59, 47-30.2-62, 47-30.2-65, 47-30.2-66, 47-30.2-67, 47-30.2-74

Article 85-04 Surface Land Management

Chapter 85-04-01 Leasing Trust Lands for Agricultural Use

N.D. Admin. Code 85-04-01-01 Failure to pay or insufficient funds at auction

1.The commissioner may not issue a surface land lease for agricultural use until payment in full is received by the department.

2.A successful bidder who fails to pay for a surface land lease may be deemed ineligible to bid at subsequent surface land lease auctions administered by the board for the remainder of the current calendar year and a minimum of three additional calendar years after the current calendar year.

3.If a surface land lease payment made at auction fails to clear for any reason, the commissioner shall notify the bidder by mail addressed to the bidder's address on file with the department that payment by cashier's check or money order is required within ten business days from the date the letter is mailed.

History

• Law Implemented: NDCC 15-07-20, 54-30-17.1

N.D. Admin. Code 85-04-01-02 Annual surface land lease rental payment

1.The annual surface land lease rental payment for the second and each succeeding year of a surface land lease must be received by the department by the close of business on the last business day of January of the surface land lease year. If payment is not received, the surface land lease automatically terminates without notice.

2.If the annual surface land lease rental payment, for any reason, fails to clear after the close of business on the last business day of January of the surface land lease year in which it is due, the surface land lease automatically terminates and the commissioner may designate the lessee ineligible to bid at subsequent surface land lease auctions for the remainder of the current calendar year and a minimum of three full calendar years after the current calendar year.

N.D. Admin. Code 85-04-01-03 Assignment and use by a third party

1.A surface land lease or any part of the lease may not be assigned. The lessee may not allow the surface land leased premises or any part of the premises to be used in any manner by anyone other than the lessee without the written consent of the commissioner. A grazing permit issued by a grazing association to a member-permittee is authorized.

2.A lessee may request an assignment of a surface land lease from the department. The commissioner shall approve or deny an assignment based on the best interests of the trusts.

The following assignments may be approved:

a.An assignment without restriction to a close relative including the spouse, father, mother, son, daughter, brother, or sister for the same terms and conditions as the original surface land lease.

b.An assignment to a third party with the surface land lease expiring at the end of the current surface land lease year. The rent payable by the assignee must be at a rate consistent with the current year's fair market value minimum rent or the current surface land lease price, whichever is greater.

3.A lessee may request to add one or more additional lessees to a surface land lease. All such additional lessees must be bound by the full terms and conditions of the surface land lease.

4.A lessee may request to remove one or more lessees from a surface land lease. The removal of any lessee must be approved in writing by all current lessees named on the lease.

History

• General Authority: NDCC 15-01-02,15-07-20, 28-32-02

N.D. Admin. Code 85-04-01-04 Sale of surface land lease for agricultural use prohibited

A lessee is prohibited from selling a board-issued surface land lease for agricultural use and any attempt to do so may result in surface land lease termination in accordance with this chapter.

N.D. Admin. Code 85-04-01-05 Inspection by prospective lessee or purchaser

The surface land leased premises must be made available for inspection to a prospective lessee or purchaser. If the surface land leased premises contains an occupied farmstead, a prospective lessee or purchaser must provide the current resident with at least two days advance notice of the intended time and date to inspect the property.

N.D. Admin. Code 85-04-01-06 Custodial agreement

A custodial agreement may be permitted if a lessee does not own livestock or is understocked. The custodial agreement must be in writing and a copy furnished to the department or the arrangement will be treated as third-party use. Unless approval is given by the commissioner, a custodial agreement is not permitted for more than three years.

N.D. Admin. Code 85-04-01-07 Right of entry

The department may enter the land subject to the surface land lease at any time without notice for the purpose of inspecting the land and improvements.

N.D. Admin. Code 85-04-01-08 Surface land lease termination

1.Failure to comply with the surface land lease terms, board rules, board policies, or applicable laws, except as otherwise stated in this chapter, may result in surface land lease termination by the commissioner.

2.The commissioner may:

a.Waive any breach except those terms required under applicable laws;

b.Allow the lessee time to cure the breach; or

c.Terminate the surface land lease.

3.The procedure to terminate a surface land lease is as follows:

a.The department shall provide notice of intent to terminate the surface land lease with specific reasons for termination by certified mail to the lessee's last-known address on file with the department.

b.A lessee may file with the department a written request for review of the intent to terminate the surface land lease. The request for review must:

(1)Be received by the department within fifteen business days after service of notice to the lessee: and (2)Include a statement for reason of review.

c.The commissioner may terminate a surface land lease no earlier than fifteen business days after the date of notice of intent to terminate the surface land lease.

d.A notice of termination of a surface land lease must be sent by certified mail requiring a signed receipt or by overnight courier or delivery service requiring a signed receipt.

e.Termination of a construction aggregate lease is effective upon the date of notice of termination.

4.Termination of the surface land lease does not release the lessee from liability for any amounts or damages owed to the board.

5.If a surface land lease is terminated, the commissioner may deem the the former lessee is ineligible to bid at a surface land lease auction administered by the department for the remainder of the current calendar year and a minimum of three full calendar years after the current calendar year.

History

• Law Implemented: NDCC 15-04-01, 15-07-20, 15-07-21, 54-30-17.1

N.D. Admin. Code 85-04-01-09 Board review

Within thirty days of a decision under these rules, an aggrieved party may request the commissioner review the decision. The aggrieved party seeking review shall submit any information required by the commissioner as part of this request. Within thirty days of the commissioner's review, the aggrieved party may request board review and the commissioner shall determine if board review is warranted.

N.D. Admin. Code 85-04-01-10 Weed and pest cost-share on surface land leased premises

The lessee is responsible for noxious weed and invasive species and pest control on the surface land leased premises. The department may participate in weed and pest cost-share reimbursement for:

1.Payments for state-listed noxious weed control costs;

2.Payments for county-listed noxious weed control costs; or

3.Payments for other invasive species and pests as allowed by the department.

N.D. Admin. Code 85-04-01-11 Weed and pest cost-share application

A lessee may submit a request for weed and pest cost-share. The request must be submitted using the electronic cost-share application available on the department's website or a paper application provided upon request. A lessee shall provide all information specifically required by the application and any supplemental information requested by the department. The amount of the cost-share must be determined by the department consistent with the department's cost-share policy.

N.D. Admin. Code 85-04-01-12 Weed and pest cost-share on cropland

Noxious weeds and invasive species on cropland are not eligible for cost-share.

N.D. Admin. Code 85-04-01-13 Weed and pest cost-share payments

Cost-share payments may be made for allowable expenses related to weed and pest control.

N.D. Admin. Code 85-04-01-14 Biological control agents

Use of biological control agents to control noxious weeds is authorized in addition to the chemical control.

History

• General Authority: NDCC 28-32-02

N.D. Admin. Code 85-04-01-15 Record maintenance

A lessee shall furnish complete and accurate information concerning cultivated acres, hayland acres, noxious weed control, grazing, improvements, or any other information concerning the surface land leased premises when requested by the department.

Chapter 85-04-02 Construction Aggregate

N.D. Admin. Code 85-04-02-01 Application

An applicant shall submit a request for a construction aggregate lease, amendment, assignment, or extension using the electronic application available on the department's website or a paper application provided upon request.

1.An application fee may be charged as determined by the board.

2.An application is deemed filed and complete if the department receives the application, the application fee if applicable, and any supplemental information requested by the department.

3.An application for a construction aggregate lease must:

a.Designate the type of construction aggregate desired; and

b.Provide all information required by the application and any supplemental information requested by the department.

4.A lessee may submit a request for an amendment to a construction aggregate lease for a specific purpose.

5.A construction aggregate lease may be assigned upon prior written consent of the commissioner. 6.a.A lessee may submit an application for an extension of a construction aggregate lease for up to an additional five-year term to be granted at the discretion of the commissioner.

b.The department may adjust the royalty rate if an additional term is granted.

N.D. Admin. Code 85-04-02-02 Construction aggregate lease term

1.A construction aggregate lease term may not exceed five years.

2.If the lessee is a state agency or a political subdivision and the:

a.Lease term is one year or less, the royalty rate must be a fixed amount based on fair market value;

b.Lease term is greater than one year, the royalty rate must be based on fair market value.

The department may include an annual adjustment based on the current fair market value.

3.If the lessee is a private entity:

a.For leases with a term of one year or less:

(1)The royalty rate must be a fixed amount based on fair market value; and (2)The lease must be for less than five thousand cubic yards [3822.77 cubic meters] of construction aggregate.

b.For leases with a term greater than one year:

(1)The lease shall be offered at public auction; and (2)The royalty rate must be based on fair market value. The department may include an annual adjustment based on the current fair market value.

4.If construction aggregate is requested for an emergency, the term of the construction aggregate lease may not exceed one year.

5.A construction aggregate lease is limited to a maximum of one hundred sixty contiguous acres [64.75 contiguous hectares] of like net construction aggregate interest.

N.D. Admin. Code 85-04-02-03 Commissioner authorization

1.The commissioner is authorized to approve and issue a construction aggregate lease on the board's behalf in accordance with this chapter.

2.If an application does not comply with this chapter, or if the commissioner determines board review is desirable, the application may be brought before the board for its consideration.

N.D. Admin. Code 85-04-02-04 Notice of construction aggregate leasing

Upon receipt of an application for a construction aggregate lease and a determination that the application covers a tract the commissioner is willing to lease, the department shall post on the department's website a notice of the application for construction aggregate lease, any supporting documentation, and instructions for submitting public comments. Comments must be received by the department no later than five p.m. central standard time fourteen days after posting the notice of the application for a construction aggregate lease to be considered. All comments must be in writing and contain the following:

1.Name and address of the interested person;

2.The legal description of the proposed construction aggregate leased premises as shown on the published notice; and

3.A detailed statement as to whether the interested person supports or opposes the issuance of the construction aggregate lease.

N.D. Admin. Code 85-04-02-05 Auctioned construction aggregate leases

1.Notice of an auction must be published in the official newspaper of the county where the proposed construction aggregate leased premises is located and in the Bismarck Tribune.

2.The notice must be published once at least ten days prior to the day of the auction.

3.The notice must contain the legal description of the proposed construction aggregate leased premises, the construction aggregate lease term, and the time and place where the auction will be held.

N.D. Admin. Code 85-04-02-06 Use of construction aggregate leased premises

A lessee may use as much of the construction aggregate leased premises as necessary for prospecting, mining, removal of construction aggregate, and reclamation subject to the requirements of this chapter.

N.D. Admin. Code 85-04-02-07 Advance royalties

1.As consideration for a construction aggregate lease with a term greater than one year, the lessee shall pay on the date a construction aggregate lease is issued an advance on the yearly royalty, as determined by the commissioner, but not less than one thousand dollars.

2.The advance payment is due each year in which the construction aggregate lease is in force.

3.The advance payment may be credited against construction aggregate mined during the term of the construction aggregate lease. Advance royalty payments for which a credit is not claimed must be forfeited.

4.The commissioner may adjust the advance royalty payment amount.

5.The commissioner may require an advance royalty deposit for a construction aggregate lease with a term of one year or less. The deposit must be credited against construction aggregate mined during the term of the construction aggregate lease.

6.If payment is not received timely, a notice of intent to terminate the construction aggregate lease must be issued by the department.

N.D. Admin. Code 85-04-02-08 Royalties

1.Royalties must be received by the department by five p.m. central prevailing time on the last business day of the calendar year following sale, utilization, stockpiling, or removal from the construction aggregate leased premises of the construction aggregate mined.

2.Royalties must be paid in full on any stockpiled construction aggregate remaining on the construction aggregate leased premises ninety days prior to the expiration of the construction aggregate lease.

3.The commissioner may terminate a construction aggregate lease if payment is not received in accordance with this section.

N.D. Admin. Code 85-04-02-09 Testing

The department may require a lessee to conduct drilling tests on the construction aggregate leased premises prior to mining. The commissioner may terminate a lease for failure to conduct test drilling if required or failure to furnish the required information. If testing is required:

1.Sufficient test holes must be drilled to outline the boundaries, thickness, and depth of the construction aggregate deposit and estimate the quality, quantity, and type of construction aggregate located on the leased premises.

2.The lessee shall furnish the department a map of the leased premises showing the boundaries of the construction aggregate deposit and furnish the department a written report estimating the thickness, depth, quality, quantity, and type of construction aggregate.

3.All test holes must be reclaimed to the satisfaction of the department at the conclusion of testing.

N.D. Admin. Code 85-04-02-10 Mining and reclamation plan

1.Prior to issuance of a construction aggregate lease, the department, in consultation with the lessee, shall develop a mining and reclamation plan for the commissioner's approval. Mining must not begin on the construction aggregate leased premises unless the mining and reclamation plan is approved by the commissioner and a lease is issued.

2.The intent of the reclamation plan is to reclaim the construction aggregate leased premises to its previous potential use and productivity.

3.The commissioner may terminate the construction aggregate lease if the lessee fails to comply with the reclamation plan.

4.The reclamation plan must include:

a.Details describing the construction aggregate mining operation in relation to the construction aggregate deposit and a plan for reclamation after the construction aggregate has been removed.

b.The leveling of the disturbed surface at the close of the construction aggregate mining operations to as close to its original contour as is reasonably possible taking into consideration the amount of construction aggregate removed.

c.Details for the preservation and respreading of topsoil, and the revegetation of the surface with appropriate flora.

5.Special reclamation plans for the propagation of wildlife habitat, the creation of a nature preserve, or other alternate land use may be required by the commissioner, provided the costs of such reclamation do not unreasonably increase the cost of reclamation.

N.D. Admin. Code 85-04-02-11 Bond

1.To assure payment of royalties and satisfactory reclamation, the lessee shall obtain and retain in force a surety bond, in an amount determined by the commissioner.

2.Upon written request, the commissioner may waive the bonding requirement for a political subdivision or other state agency.

3.The commissioner shall set the initial surety bond amount at a minimum of five thousand dollars per acre for the initial mine area, with no initial surety bond amount being less than ten thousand dollars.

4.The commissioner may adjust the amount of the surety bond annually, with the adjustment based on the estimated cost to reclaim the remaining disturbed site and the amount of stockpiled construction aggregate. If the commissioner determines an additional surety bond or other security is required, the lessee shall submit the additional surety bond or other security within thirty days after request by the commissioner as required by this section.

5.In lieu of a surety bond, the lessee may file another form of security subject to the commissioner's approval.

6.The lessee may submit a written request for a full or partial release of the surety bond to the commissioner. At the commissioner's discretion, the surety bond may be released in whole or in part.

7.Upon the payment of all outstanding royalties and satisfactory completion of reclamation, the commissioner shall release the surety bond. The lessee may forfeit the surety bond to pay outstanding royalties or to complete reclamation. The commissioner shall give final approval of the reclamation before the surety bond is released.

N.D. Admin. Code 85-04-02-12 Theft of construction aggregate

The lessee shall be responsible for the loss or theft of any construction aggregate from the construction aggregate leased premises and such loss or theft does not relieve the lessee from the responsibility to pay royalties for the construction aggregate.

N.D. Admin. Code 85-04-02-13 Records and inspections

The lessee shall keep an accurate record of the quantity, quality, and type of construction aggregate mined. The department may audit, examine, and copy any records as may be necessary to assure the lessee is complying with all provisions of the construction aggregate lease, board rules and policies, and applicable laws, and may examine all samples, logs, assays, or cores. All construction aggregate mining operations and reclamation operations may be inspected by the department.

N.D. Admin. Code 85-04-02-14 Construction aggregate mining operations

The lessee shall conduct construction aggregate mining operations in a good and professional manner and in accordance with the construction aggregate lease terms, board rules and policies, and applicable laws. The lessee shall take reasonable steps to prevent construction aggregate mining operations from unnecessarily causing or increasing soil erosion or drainage and damage to crops, pasture, or trees.

N.D. Admin. Code 85-04-02-15 Termination of a construction aggregate lease

1.Failure to comply with construction aggregate lease terms, board rules, board policies, or applicable laws may result in construction aggregate lease termination by the commissioner.

The commissioner may:

a.Waive any breach except those terms required under applicable law;

b.Allow the lessee time to cure the breach; or

c.Terminate the construction aggregate lease.

2.The procedure to terminate a construction aggregate lease is as follows:

a.The department shall provide notice of intent to terminate the construction aggregate lease with specific reasons for termination by certified mail to the lessee's last-known address on file with the department.

b.The lessee may file with the department a written request for review of the intent to terminate the construction aggregate lease. The request for review must:

(1)Be received by the department within fifteen business days of the date of notice; and (2)Include a statement of reason why review is warranted.

c.The commissioner may terminate a construction aggregate lease no earlier than fifteen business days after the date of notice of intent to terminate the construction aggregate lease.

d.A notice of termination of a construction aggregate lease must be sent by certified mail requiring a signed receipt, or by overnight courier or delivery service requiring a signed receipt.

e.Termination of a construction aggregate lease is effective upon the date of notice of termination.

3.Termination does not release the lessee from liability for royalty owed to the board, for damages resulting from a breach of a construction aggregate lease term, or to reclaim the construction aggregate leased premises.

N.D. Admin. Code 85-04-02-16 Board review

Within thirty days of a decision under these rules, an aggrieved party may request the commissioner review the decision. The aggrieved party seeking review shall submit any information required by the commissioner as part of this request. Within thirty days of the commissioner's review, the aggrieved party may request board review and the commissioner shall determine whether board review is warranted.

N.D. Admin. Code 85-04-02-17 Surrender by lessee

The lessee may surrender a construction aggregate lease upon payment of all outstanding royalties and other debts owed the board. Surrender of a construction aggregate lease does not release the lessee from its responsibility to reclaim the construction aggregate leased premises in accordance with these rules and terms of the construction aggregate lease.

N.D. Admin. Code 85-04-02-18 Conditions on expiration, termination, or surrender

At the expiration, termination, or surrender of a construction aggregate lease and, upon the completion of reclamation, unless otherwise waived, the lessee shall remove its property from the construction aggregate leased premises within one hundred twenty days from the date of expiration, termination, surrender, or the date reclamation is completed. The lessee is liable to the board for the costs of removal of any property remaining on the construction aggregate leased premises after the deadline for removal. If the lessee does not remove all stockpiled construction aggregate from the construction aggregate leased premises by the construction aggregate lease expiration, termination, or surrender date, it is considered abandoned and becomes the property of the board unless otherwise approved in writing by the commissioner.

N.D. Admin. Code 85-04-02-19 Surface owner consent

Where the surface of the construction aggregate leased premises is not managed or owned by the board, the lessee shall give the surface owner a written description of the specific locations of any land disturbance contemplated by the lessee, accompanied by a map, at least one hundred twenty days prior to the commencement of any construction aggregate mining. The lessee shall provide the department with proof of consent to mine from the surface owner. If there is a change in the nature of the land disturbance contemplated, an updated written description must be provided to the surface owner as soon as possible.

N.D. Admin. Code 85-04-02-20 Surface lessee protection

If the surface of the construction aggregate leased premises is managed or owned by the board and is leased to a person other than the construction aggregate lessee, the construction aggregate lessee shall restore all fences and other improvements that have been damaged, moved, or removed as a result of construction aggregate mining operations and shall further compensate the surface lessee for any damage to or loss of other improvements owned by the surface lessee.

N.D. Admin. Code 85-04-02-21 Protection of cultural resources

1.If any historical, archaeological, paleontological, or other cultural artifacts, vestiges, or remains are found prior to, during, or after any exploration, testing, production, mining, or reclamation operations on the construction aggregate leased premises, the lessee shall:

a.Immediately notify the commissioner and the state historical society.

b.Protect the site and the materials from further disturbance until a professional examination can be made or until some other form of clearance to proceed is authorized by the commissioner.

2.If no further disturbance is allowed, the construction aggregate lease may be terminated.

3.The department and the state historical society may inspect the construction aggregate leased premises at all times to determine compliance with this section.

N.D. Admin. Code 85-04-02-22 Assignment of construction aggregate lease

1.The commissioner may refuse to consent to the assignment of a construction aggregate lease for good cause.

2.The assignor remains responsible for compliance of all construction aggregate lease terms, board rules and policies, and applicable laws until the assignment is approved by the commissioner.

History

• History: Effective April 1, 2026.

N.D. Admin. Code 85-04-02-23 Reserved rights

The board reserves the right to use, rent, lease, sell, or encumber the construction aggregate leased premises and reserves all historical, archaeological, and paleontological materials on or beneath the surface of the construction aggregate leased premises. Leases issued by the board for the production of coal, oil, gas, uranium, potash, or other minerals have priority over any lease for the mining of construction aggregate.

History

• History: Effective April 1, 2026.

Chapter 85-04-03 Permanent Improvements

N.D. Admin. Code 85-04-03-01 Permanent and nonpermanent improvements

1.Permanent improvements may not be placed on, removed from, or applied to any surface land leased premises without the written consent of the commissioner.

2.Permanent improvements placed on or implemented on any surface land leased premises are the property of the state of North Dakota.

3.A lessee may place nonpermanent improvements on any surface land leased premises without written consent of the commissioner.

4.Upon expiration or termination of the surface land lease, the lessee may remove the nonpermanent improvements within one hundred twenty days after the surface land lease expires or is terminated. The commissioner may, upon written request from the lessee before the end of the one-hundred-twenty-day period and for good cause, extend the period of time for removing nonpermanent improvements.

5.Any nonpermanent improvements not removed within one hundred twenty days become the property of the next lessee unless the commissioner deems the nonpermanent improvements to be a hindrance to the surface land leased premises.

6.Any nonpermanent improvements deemed to be a hindrance must be removed by the responsible party within one hundred twenty days after delivery of written notification from the department. If hindrances are not removed within one hundred twenty days, the department may remove the hindrance and require the responsible party to pay for the cost.

7.A lessee is responsible for any damage or improvements that remain on the leased premises and are deemed a hindrance by the commissioner.

N.D. Admin. Code 85-04-03-02 Application

A lessee shall submit a request for a permanent improvement, using the electronic application available on the department's website or a paper application provided upon request. The lessee shall provide all information specifically required by the application and any supplemental information requested by the department.

History

• History: Effective January 1, 2020.
• General Authority: NDCC 28-32-02

N.D. Admin. Code 85-04-03-03 Rent credit, cost-share, and depreciation

1.Rent credits, cost-share, and depreciation of project costs may be authorized at the sole discretion of the commissioner.

2.Rent credits or cost-share may not exceed the approved maximum project cost as determined by the commissioner or the actual project cost, less reimbursements from nondepartment sources, whichever is lower.

3.The commissioner may depreciate project costs less reimbursements to the lessee from nondepartment sources and rent credits or cost-share from the department for a period not to exceed ten years.

4.Any unexpired depreciation amount must be available from the department before the surface land lease auction and must be announced at the surface land lease auction.

5.If the former lessee is not the successful bidder at auction, the new lessee is required to compensate the former lessee for the undepreciated amount. The commissioner may cancel any undepreciated cost of constructing a permanent improvement if the lessee fails to offer the minimum bid for the land and the land is not leased at the next auction at which the land is offered, or if the lessee fails to comply with the conditions of the surface land lease.

History

• Law Implemented: NDCC 15-04-24, 15-08-26

N.D. Admin. Code 85-04-03-04 General standards for a permit for a permanent improvement

In reviewing an application for a permit for a permanent improvement, the commissioner may consider the following:

1.Financial benefit to the trusts;

2.Availability of alternate site or route;

3.The least environmentally damaging site or route;

4.Physical stability of the landscape;

5.Whether technical assistance was sought in planning the proposed permanent improvement;

6.Potential for mineral development, including oil, gas, coal, construction aggregate, sodium sulfate, chemical substances, metallic ore, or uranium ore;

7.Feasibility for reclamation;

8.Maintenance of existing wetlands and waterflows;

9.Any cultural, historical, archeological, and paleontological resources;

10.Habitat for federally listed threatened and endangered species;

11.Location of the proposed route or site in relation to section lines, quarter section lines, and corridors;

12.Potential liability to the trusts; and

13.Any other information relevant to the application which would assist in the commissioner's determination.

History

• History: Effective January 1, 2020.
• General Authority: NDCC 28-32-02

N.D. Admin. Code 85-04-03-05 Issuance of a permit for permanent improvement

The commissioner may determine whether to issue a permit for the construction of a permanent improvement and the maximum project cost, rent credit, cost-share, and depreciation amounts. The commissioner may impose such terms on a permit as the commissioner deems necessary. A permit must be issued prior to site preparation or construction.

Chapter 85-04-04 Encumbrances of Trust Lands

N.D. Admin. Code 85-04-04-01 Application

1.An applicant shall submit a request for an encumbrance, amendment, consent to assign, extension, or renewal using the electronic application form available on the department's website or a paper application provided upon request. An application submitted on any other form may not be accepted.

2.An application must be submitted for the following:

a.Encumbrance.

b.Amendment to an encumbrance.

c.Consent to assignment of an encumbrance.

d.Extension or renewal of an encumbrance.

e.Full or partial release of an encumbrance.

3.An application must state a specific purpose for which it is being submitted.

4.An application is deemed filed and complete if the department receives an application form, the application fee, and any supplemental information requested by the department.

5.An application for a consent to assign an encumbrance must be received by the department before execution of an assignment between applicable parties.

6.An application fee may be charged as determined by the board.

7.Compensation may be requested by the department.

History

• Law Implemented: NDCC 15-01-02, 15-05-01

N.D. Admin. Code 85-04-04-02 Surveying and planning requirements

1.Before accessing trust lands to conduct any surveys, including general surveys, metes-andbounds, centerline, cadastral, ocular reconnaissance cultural resource surveys, and habitat or wetland delineations, the following criteria must be met:

a.An application for an encumbrance for which the survey is being conducted must be filed with the department; and

b.Any person or entity conducting survey work on behalf of the applicant shall obtain a surveying and planning permit from the department.

2.The person or entity conducting the survey shall provide notice to the surface tenant of the need for access to trust lands for survey purposes no later than seven calendar days before the scheduled access date.

History

• Law Implemented: NDCC 15-01-02, 15-05-01

N.D. Admin. Code 85-04-04-03 General standards for an encumbrance

In reviewing an application for an encumbrance, the following may be considered:

1.Financial benefit to the trusts;

2.Availability of alternate encumbrance site or route;

3.The least environmentally damaging site or route regardless of property ownership;

4.Physical stability of the landscape;

5.Other potential future uses for the trust lands, including urban development;

6.Potential mineral and other material development, including oil, gas, coal, construction aggregate, sodium sulfate, chemical substances, metallic ore, or uranium ore;

7.Feasibility for reclamation;

8.Maintenance of existing wetlands and waterflows;

9.Any cultural, historical, archeological, and paleontological resources;

10.Habitat for federally listed threatened and endangered species;

11.Location of the proposed route or site in relation to section lines, quarter section lines, and corridors;

12.Potential liability to the trusts;

13.Applicant's past encumbrances on trust lands;

14.Applicant's financial stability; and

15.Any other information relevant to the application which would assist in the determination.

History

• History: Effective January 1, 2020.
• General Authority: NDCC 28-32-02

N.D. Admin. Code 85-04-04-04 Issuance of an encumbrance

1.The commissioner may approve and issue an encumbrance on the board's behalf in accordance with this chapter.

2.An encumbrance may not be approved or issued until all required payments and information are received by the department.

3.An encumbrance must be issued prior to site preparation or construction, except for surveying in accordance with a granted surveying and planning permit.

4.The commissioner may impose such terms to an encumbrance as the commissioner deems necessary.

5.If an application does not comply with this chapter, or if the commissioner determines board review is desirable, the commissioner may bring the application to the board for consideration.

N.D. Admin. Code 85-04-04-05 Right of entry and inspection

The department may enter the land at any time without notification for the purpose of inspecting the land, activity, or construction.

N.D. Admin. Code 85-04-04-06 Expiration of an encumbrance

1.Unless otherwise stated in the encumbrance, the encumbrance expires two years from the date of issuance if the activity or construction is not fully completed on trust lands in accordance with the terms of the encumbrance.

2.An encumbrance automatically terminates without notice at the end of its term or for failure to complete an activity or construction.

3.Before the expiration of the encumbrance, the holder may apply for an amendment or extension in accordance with this chapter.

N.D. Admin. Code 85-04-04-07 Assignment of an encumbrance

1.An encumbrance may not be assigned unless specifically authorized by the terms of the encumbrance or upon written consent of the commissioner.

2.If specifically authorized by the terms of the encumbrance:

a.The assignor is responsible for compliance with all terms of the encumbrance, this

chapter, and applicable laws until the department is notified of the assignment.

b.Upon the department's notification, the assignee is responsible for compliance with all terms of the encumbrance, this chapter, and applicable law. 3.a.A consent to assignment may not be deemed valid unless provided in writing by the commissioner.

b.The assignor remains responsible for compliance with all terms of the encumbrance and this chapter until consent to the assignment is provided by the commissioner. Upon approval, the assignee is responsible for compliance with all terms of the encumbrance, this chapter, and applicable law.

History

• History: Effective April 1, 2026.

Chapter 85-04-05 Public Access and Use [Repealed]

N.D. Admin. Code 85-04-05 Public Access and Use [Repealed]

CHAPTER 85-04-05

PUBLIC ACCESS AND USE [Repealed effective April 1, 2022]

Chapter 85-04-06 Land Exchange

N.D. Admin. Code 85-04-06-01 Approval of land exchange

The board may approve an exchange of trust lands which it determines is in the best interests of the trusts and complies with current law. Under North Dakota Century Code section 15-06-01, any land received under an exchange of original grant land maintains its status as "original grant lands".

History

• Law Implemented: N.D. Constitution article IX, § 6; NDCC 15-06-01, 15-06-19.1

N.D. Admin. Code 85-04-06-02 Criteria for land exchange

The department shall consider the criteria listed below in any land exchange. Land exchanges are not required to satisfy all criteria outlined below. Criteria must be considered in a cumulative manner.

Meeting certain criteria may not guarantee approval.

1.A land exchange must result in the board receiving equal or greater asset value to the trusts.

Any appraisals considered by the department must include appraised values for the trust lands' highest and best use as well as the current use. The department may consider features not reflected in the market price to which it is difficult to assign a monetary value, including location, proximity to public lands, recreational opportunities, scenery, other amenities, and results of cultural resources inventories in evaluating the relative value of trust lands to be exchanged.

2.A land exchange must result in the board receiving equal or greater income to the trusts. The projected income for the proposed exchange land must be estimated using the board's minimum lease rate. The minimum lease rate for the proposed exchange land must be compared to the present income received by the trusts from the trust lands to be exchanged, including all current and potential future revenue streams from surface leases, encumbrances, development of natural resources, and other sources, and any tax liability.

3.Land exchanges must result in the board receiving equal or greater acreage, except the board may consider receiving less acreage in return for one or more of the following:

a.Improved dedicated access;

b.Substantially higher value in relation to the amount of acres lost; or

c.Substantially higher income in relation to the amount of acres lost.

4.The proposed land exchange may not fragment trust land holdings by creating isolated parcels of trust land.

5.The proposed exchange land must have similar as or greater than income and value potential compared to the trust lands to be exchanged.

6.A land exchange may not diminish access to trust lands. Accessible trust lands must be exchanged with lands that offer equal or improved access.

7.In connection with any exchange of trust land, the department may consider all available information, including information provided by the applicant or the department's own knowledge, regarding lands and resources to estimate value for purposes of a preliminary evaluation, including completion of an environmental assessment.

8.In all exchanges, the board shall reserve all minerals underlying the trust lands to be exchanged pursuant to section 5 of article IX of the Constitution of North Dakota subject to applicable law.

History

• Law Implemented: NDCC 15-06-19.1, 15-06-22, 15-07-02

N.D. Admin. Code 85-04-06-03 Application for land exchange

An applicant shall submit a written letter of application to the commissioner to request a land exchange. The application must include:

1.Legal description of the trust lands to be exchanged;

2.Legal description of the proposed exchange land;

3.Applicant's estimated valuation of the proposed exchange land;

4.The most recent tax assessment for the proposed exchange land;

5.Statement of ownership of the proposed exchange land, including owners' names and ownership interest;

6.Purpose of exchange request; and

7.A nonrefundable application fee as determined by the board.

History

• History: Effective January 1, 2021.
• General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02

N.D. Admin. Code 85-04-06-04 Evaluation of application

The department shall evaluate the application and may request the applicant provide additional information. After the department's evaluation:

1.The commissioner may reject an application if the application:

a.Does not meet the requirements of subsections 1 and 2 of section 85-04-06-02; or

b.Fails to comply with North Dakota law.

2.If the commissioner determines an application meets the requirements of section 85-04-06-02, the commissioner shall present the application to the board to determine if the application reflects a tract the board is willing to exchange.

3.If the land is leased, the commissioner shall notify the lessee of the intent to exchange the property.

N.D. Admin. Code 85-04-06-05 Comments and notice

1.If the board determines the application covers a tract of land the board is willing to exchange, the department shall:

a.Post on the department's website a notice of the application for land exchange, any supporting documentation, and instructions for submitting public comments.

b.Publish notice of an application for land exchange in the official newspaper of the county where the proposed exchange land and proposed trust lands to be exchanged are located and in the Bismarck Tribune. The notice must:

(1)Be published once each week for three consecutive weeks prior to the deadline for comments; and (2)Contain the legal description of the proposed exchange land and proposed trust lands to be exchanged and the deadline for comments. If publication of any notice is omitted inadvertently by any newspaper or the notice contains typographical errors, the department may proceed with the scheduled comment period if it appears the omission or error is not prejudicial to the department's interest.

c.Solicit public comment regarding the proposed exchange. All comments must be in writing and include the following:

(1)Name and address of the interested person;

(2)The legal description of the proposed tract for exchange as shown on the published notice; and (3)A detailed statement as to whether the interested person supports or opposes the exchange.

2.The department shall give notice of the proposed exchange to any entity having a property interest in any portion of trust lands involved in the exchange as reflected in the records of the department and if the land is leased, the commissioner shall notify the lessee of the intent to exchange the property during the months of October through January.

N.D. Admin. Code 85-04-06-06 Exchange report

Following the department's application evaluation, the board's determination that the application covers a tract the board is willing to exchange, and expiration of the public comment period, the department shall prepare an exchange report to be presented to the board, which will include the following:

1.A summary discussion of how the exchange meets or exceeds any of the six criteria for land exchange under section 85-04-06-02;

2.A summary of public comments received on the proposed exchange;

3.The department's concerns or opinions of the merits of the proposed exchange;

4.The department's recommendations for board direction regarding further review, if needed, of the proposed exchange; and

5.The applicant's commitment to fund the costs of the department's detailed review, including appraisals, title examinations, advertising costs, recording fees, and other costs as may be necessary to complete an exchange as determined by the department. The applicant is responsible for payment of all costs, unless payment of the costs is otherwise waived by the board or shared by the parties to the exchange.

History

• History: Effective January 1, 2021.
• General Authority: N.D. Constitution article IX, § 6; NDCC 28-32-02

N.D. Admin. Code 85-04-06-07 Board authorization

The board shall review the exchange report, department recommendations, and public comments and determine whether to proceed with the exchange. The commissioner is authorized to complete all documents for the exchange on the board's behalf if the board approves the exchange. If the land is leased, the commissioner shall notify the lessee within the months of October through January of the intent to exchange the property.

Chapter 85-04-07 Land Sales under North Dakota Century Code Chapter 15-06

N.D. Admin. Code 85-04-07-01 Sale of original grant lands

The board shall retain and manage original grant lands to produce revenue consistent with the long-term maintenance of the original grant lands' income producing potential and ecological health.

The commissioner may propose the sale of original grant lands after the original grant lands have been evaluated for "highest and best use" as defined in North Dakota Century Code section 15-02-05.1 and the department considers the following criteria:

1.If the tract has been zoned or has high potential to be zoned residential, commercial, industrial, or similar zoning type;

2.If the tract has been a source of persistent management problems, resulting in the sale of the tract being prudent from a long-term financial point of view;

3.If the tract and adjacent trust land tracts total less than eighty acres [32.37 hectares] in size, more or less, for grassland and less than forty acres [16.19 hectares], more or less, for cropland or hayland, except those tracts which are severed by a highway, road, railroad, canal, river, or lake, which may be sold if the severed portion is less than these amounts; or

4.If the tract and adjacent trust land tracts exceed eighty acres [32.37 hectares] in size, more or less, for grassland or more than forty acres [16.19 hectares] in size, more or less, for cropland.

N.D. Admin. Code 85-04-07-02 Requirements of no net loss sale

A sale of original grant lands, excluding sale of of tracts listed in subsection 1, 2, or 3 of section 85-04-07-01 is subject to the following:

1.The proposed sale must result in no net loss of leasable original grant lands; and

2.The land provided as consideration must provide accessible and leasable land equal or greater in acres, unless otherwise provided in this section, and value to the trust from which the original grant lands were sold, for which the department then shall consider the criteria listed below for any no net loss sale. Land provided for a no net loss sale is not required to satisfy all criteria outlined below. Criteria must be considered in a cumulative manner and meeting certain criteria may not guarantee approval.

a.A no net loss sale must result in the board receiving equal or greater asset value to the trusts. Any appraisals considered by the department must include both the values for the trust lands' highest and best use and the current use.

b.The department may consider features not reflected in the market price to which it is difficult to assign a monetary value, including location, proximity to public lands, recreational opportunities, scenery, other amenities, and results of cultural resources inventories in evaluating the relative value of trust lands.

c.A no net loss sale must result in the board receiving equal or greater income to the trusts.

The projected income for the proposed no net loss sale land must be estimated using the board's minimum lease rate. The minimum lease rate for the proposed no net loss sale land must be compared to the present income received by the trusts from the trust lands, including all current and potential future revenue streams from surface leases, encumbrances, development of natural resources, and other sources, and any tax liability.

d.A no net loss sale must result in the board receiving equal or greater acreage, except the board may consider receiving less acreage in return for one or more of the following:

(1)Improved dedicated access;

(2)Substantially higher value in relation to the amount of acres lost; or (3)Substantially higher income in relation to the amount of acres lost.

e.The proposed no net loss sale may not fragment trust land holdings by creating isolated parcels of trust land.

f.The proposed no net loss sale land must have similar income and value potential as the trust lands.

g.A no net loss sale may not diminish access to trust lands. The no net loss land should provide equal or improved access.

3.In connection with any no net loss sale the department may use any available information, including information provided by the applicant or the department's own knowledge, regarding lands and resources to estimate value for purposes of a preliminary evaluation, including completion of an environmental assessment.

4.In all no net loss sales and subject to applicable law, the board shall reserve all minerals underlying the trust lands pursuant to section 5 of article IX of the Constitution of North Dakota.

N.D. Admin. Code 85-04-07-03 No net loss sale procedure

1.The department may recommend a tract of land that meets the criteria of section 85-04-07-02 to the commissioner for consideration for a no net loss sale.

2.If the commissioner determines to proceed with the sale, the commissioner shall present to the board the proposed no net loss land sale for preliminary review. Upon a determination that the board is willing to sell, the department shall:

a.Notify the lessee if the lands are leased.

b.Publish a notice of sale, that includes a request for bidders, pursuant North Dakota Century Code chapter 15-06. The notice of sale must contain:

(1)The legal description of the proposed trust land tract to be sold;

(2)Instructions on how to register to bid; and (3)Deadline for bidders to register.

c.Procure all appraisals from a certified appraiser for tracts to be sold and for lands provided for consideration as follows:

(1)Appraisals must be obtained in accordance with North Dakota Century Code sections 15-06-22 and 15-06-23.

(2)Appraisals for trust lands and the proposed no net loss sale land must be appraised by the same certified appraiser.

(3)If the commissioner is not satisfied with the appraisals, the commissioner may require additional appraisals by alternative certified appraisers.

d.Solicit public comment regarding the proposed sale. All comments must be in writing and include the following:

(1)Name and address of the interested person;

(2)The legal description of the proposed tract for sale as shown on the published notice; and (3)A detailed statement as to whether the interested person supports or opposes the sale. 3.a.To register, bidders shall provide the following:

(1)A nonrefundable application fee; and (2)A legal description of the lands to be provided for consideration.

b.Bidders shall agree to an offer to purchase that contains the following:

(1)Bidder is subject to all costs associated to the bidder review and sale process, including:

(a)Appraisal costs;

(b)Title examination; and (c)Legal survey, if deemed necessary by the commissioner.

(2)Bidder agrees to allow the department and its agents access to the lands offered for consideration or shall procure access on department's behalf.

c.The department shall review the lands proposed by each potential bidder to determine if they meet the criteria under section 85-04-07-02.

4.The board shall review all approved registered bidders, including appraisals and land offered for consideration, any public comments, other relevant information including title examinations, and determine whether to proceed with the sale. If the board decides to proceed with the sale, the board shall establish a minimum acceptable sale price and the following must be conducted:

a.If the land is leased, the commissioner shall notify the lessee within the months of October through January of the intent to sell the property.

b.The commissioner shall conduct an auction pursuant to North Dakota Century Code

chapter 15-06.

c.A purchase agreement shall be executed with the winning bidder at the closing of the sale. The purchase agreement must require:

(1)The purchaser to pay twenty percent of the purchase price at the time the purchase agreement is executed; and (2)The purchaser to convey the land used as consideration within sixty calendar days after execution of the agreement. The commissioner may extend the deadline to convey, at the commissioner's sole discretion, up to a maximum of one hundred eighty days after execution of the purchase agreement.

d.If no bids are received at auction, the tract may be sold for the board established minimum acceptable sale price to the first interested party at a private no net loss sale during the six months following the date of the auction.

N.D. Admin. Code 85-04-07-04 Payment of costs

The purchaser is responsible for payment of costs, including appraisals, title examinations, and other costs as may be necessary to complete the sale.

History

• History: Effective January 1, 2021; amended effective April 1. 2026.

N.D. Admin. Code 85-04-07-05 Board review

Within thirty days of a decision under these rules, an aggrieved party may request the commissioner review the decision. The aggrieved party seeking review shall submit any information required by the commissioner as part of this request. Within thirty days of the commissioner's review, the aggrieved party may request board review and the commissioner shall determine if board review is warranted.

Chapter 85-04-08 Land Sales under North Dakota Century Code Chapter 15-07

N.D. Admin. Code 85-04-08-01 Sale of acquired lands

The board shall retain and manage acquired lands to produce revenue consistent with the long-term maintenance of the acquired lands' income producing potential and ecological health until sold. The commissioner may propose the sale of acquired lands if the lands have been evaluated for "highest and best use" as defined in North Dakota Century Code section 15-02-05.1 and the department considers the following criteria:

1.If a tract is acquired through foreclosure or deed in lieu of foreclosure from the board's loan pool account, established under North Dakota Century Code section 15-03-04.1, after January 1, 2020;

2.If the tract has been zoned or has high potential to be zoned residential, commercial, industrial, or similar zoning type;

3. If the tract has been a source of persistent management problems, resulting in the sale of the tract being prudent from a long-term financial point of view;

4.If the tract and adjacent trust land tracts total less than eighty acres [32.37 hectares] in size, more or less, for grassland and less than forty acres [16.19 hectares], more or less, for cropland or hayland, except those tracts which are severed by a highway, road, railroad, canal, river, or lake, which may be sold if the severed portion is less than these amounts; or

5.If the tract and adjacent trust land tracts exceed eighty acres [32.37 hectares] in size, more or less, for grassland or more than forty acres [16.19 hectares] in size, more or less, for cropland.

N.D. Admin. Code 85-04-08-02 Requirements of no net loss sale

A sale of acquired lands, with the exception of tracts provided in subsections 1, 2, 3, and 4 of

section 85-04-08-01, is subject to the following:

1.The proposed sale must result in no net loss of leasable acquired lands; and

2.The land provided as consideration must provide accessible and leasable land equal or greater in acres, unless otherwise provided in this section, and value to the trust from which the acquired lands were sold, for which the department then shall consider the criteria listed below for any no net loss sale. Land provided for a no net loss sale is not required to satisfy all criteria outlined below. Criteria will be considered in a cumulative manner and meeting certain criteria may not guarantee approval.

a.A no net loss sale must result in the board receiving equal or greater asset value to the trusts. Any appraisals considered by the department must include appraised values for both the trust lands highest and best use as well as the current use.

b.The department may consider features not reflected in the market price to which it is difficult to assign a monetary value, including location, proximity to public lands, recreational opportunities, scenery, other amenities, and results of cultural resources inventories in evaluating the relative value of trust lands.

c.A no net loss sale must result in the board receiving equal or greater income to the trusts.

The projected agricultural income for the proposed no net loss sale land must be estimated using the board's minimum lease rate. The minimum lease rate for the proposed no net loss sale land must be compared to the present income received by the trusts from the trust lands, including all current and potential future revenue streams from surface leases, encumbrances, development of natural resources, and other sources, and any tax liability.

d.A no net loss sale must result in the board receiving equal or greater acreage, except the board may consider receiving less acreage in return for one or more of the following:

(1)Improved dedicated access;

(2)Substantially higher value in relation to the amount of acres lost; or (3)Substantially higher income in relation to the amount of acres lost.

e.The proposed no net loss sale may not fragment trust land holdings by creating isolated parcels of trust land.

f.The proposed no net loss sale land must have similar income and value potential as the trust lands.

g.A no net loss sale may not diminish access to trust lands. The no net loss land should provide equal or improved access.

3.In connection with any no net loss sale, the department may consider all available information, including information provided by the applicant or the department's own knowledge, regarding lands and resources to estimate value for purposes of a preliminary evaluation, including completion of an environmental assessment.

4.In all no net loss sales, the board shall reserve all minerals underlying the trust lands pursuant to section 5 of article IX of the Constitution of North Dakota subject to applicable law.

N.D. Admin. Code 85-04-08-03 No net loss sale procedure

1.The department may recommend a tract of land that meets the criteria of section 85-04-08-02 to the commissioner for consideration for a no net loss sale.

2.If the commissioner determines to proceed with the sale, the commissioner shall present to the board the proposed no net loss land sale for preliminary review. Upon a determination the board is willing to sell, the department shall:

a.Notify the lessee if the lands are leased.

b.Publish a notice of sale, that includes a request for bidders, in accordance with the procedures set out in North Dakota Century Code chapter 15-06. The notice of sale must contain:

(1)The legal description of the proposed trust land tract to be sold;

(2)Instructions on how to register to bid; and (3)Deadline for bidders to register.

c.Obtain all appraisals from a certified appraiser for tracts to be sold and for lands provided for consideration, as follows:

(1)Appraisals must be obtained in accordance with the procedures set out in North Dakota Century Code sections 15-06-22 and 15-06-23.

(2)Appraisals for trust lands and the proposed no net loss sale land must be appraised by the same certified appraiser.

(3)If the commissioner is not satisfied with the appraisals, the commissioner may require additional appraisals by alternative certified appraisers.

d.Solicit public comment regarding the proposed sale. All comments must be in writing and include the following:

(1)Name and address of the interested person;

(2)The legal description of the proposed tract for sale as shown on the published notice; and (3)A detailed statement as to whether the interested person supports or opposes the sale. 3.a.To register, bidders shall provide the following:

(1)A nonrefundable application fee; and (2)A legal description of the lands to be provided for consideration.

b.Bidders shall agree to an offer to purchase that contains the following:

(1)Bidder is subject to all costs associated to the bidder review and sale process, including:

(a)Appraisal costs;

(b)Title examination; and (c)Legal survey, if deemed necessary by the commissioner.

(2)Bidder agrees to allow the department and its agents access to the lands offered for consideration or shall obtain access on department's behalf.

c.The department shall review the lands proposed by each potential bidder to determine if they meet the criteria under section 85-04-07-02.

4.The board shall review all approved registered bidders, including appraisals, land offered as consideration, any public comments, other relevant information including title examinations, and determine whether to proceed with the sale. If the board decides to proceed with the sale, the board shall establish a minimum acceptable sale price and the following shall be conducted:

a.If the land is leased, the commissioner shall notify the lessee of the intent to sell the property.

b.The commissioner shall conduct an auction pursuant to North Dakota Century Code

chapter 15-07.

c.A purchase agreement must be executed with the winning bidder at the closing of the sale. The purchase agreement must require that the purchaser:

(1)Pay twenty percent of the purchase price at the time the purchase agreement is executed; and (2)Convey the land used as consideration within sixty calendar days after execution of the agreement. The commissioner may extend the deadline to convey, at the commissioner's sole discretion, up to a maximum of one hundred eighty days after execution of the purchase agreement.

d.If no bids are received at auction, the tract may be sold for the board-established minimum acceptable sale price to the first interested party at a private sale during the six months following the date of the auction.

5.Acquired lands acquired after January 1, 2020, may be sold to any mortgagor or a member of the mortgagor's immediate family under North Dakota Century Code section 15-07-10. The sale must be for cash only with twenty percent payment of the purchase price on the day of the sale, which may include earnest money paid, and the balance due within sixty calendar days. The balance due date may be extended at the commissioner's discretion, up to a maximum of one hundred eighty days from the date of the sale. Interest must be charged on any remaining balance, beginning sixty days after the date of sale, at the Bank of North Dakota base rate plus one percent.

N.D. Admin. Code 85-04-08-04 Payment of costs

The purchaser is responsible for payment of costs, including appraisals, title examinations, and other costs as may be necessary to complete the sale.

N.D. Admin. Code 85-04-08-05 Board review

Within thirty days of a decision under these rules, an aggrieved party may request the commissioner review the decision. The aggrieved party seeking review shall submit any information required by the commissioner as part of this request. Within thirty days of the commissioner's review, the aggrieved party may request board review and the commissioner shall determine if board review is warranted.

Chapter 85-04-09 Land Sales under North Dakota Century Code Chapter 15-09

N.D. Admin. Code 85-04-09-01 Sale of lands for public or quasi-public purpose

The department shall consider the following criteria when reviewing an application for sale under North Dakota Century Code chapter 15-09:

1.The tract is required for the purposes stated in the application and issuance of the patent or deed must not have a significant negative impact on the remainder of the trust lands;

2.Environmental impacts are minimal or are required to be mitigated in an acceptable manner;

3.Impacts on the value of the remainder of the trust lands are minimal or are required to be mitigated in an acceptable manner;

4.Impacts to significant archaeological and historical sites are minimal, or are required to be mitigated in an acceptable manner;

5.The sale must produce a positive financial return to the trusts;

6.There is no known formal challenge regarding the project;

7.The surface lessee has been notified of the project; and

8.If the application is for a sale of land for use as a landfill by a public entity, the following requirements must be met:

a.Applicants shall work with the department of environmental quality to ensure the operation of the proposed landfill is in accordance with state and federal laws, rules, and regulations.

b.Before final approval of a sale is given, the applicant shall submit evidence that the site meets appropriate geological, hydrological, and other requirements established by the department of environmental quality and the United States environmental protection agency. A permit for feasibility testing may be issued prior to final approval of a sale.

c.When determining the purchase price, the board shall consider the following additional factors:

(1)The unique geological and hydrological characteristics which make the site suitable for use as a landfill;

(2)The effect on the value of adjacent state properties caused by using the site as a landfill; and (3)The price paid by other purchasers for similar landfill sites.

N.D. Admin. Code 85-04-09-02 Sale procedure

1.The commissioner may accept an application to purchase land in accordance with North Dakota Century Code chapter 15-09.

2.An application must be submitted on a form prescribed by the department upon request.

3.The application must:

a.Be completed and signed by authorized personnel;

b.Include a nonrefundable application fee in an amount set by the board unless waived by the commissioner; and

c.Meet the requirements of North Dakota Century Code section 15-09-01.

4.The department may request additional supporting documents for the application.

5.If the land is leased, the commissioner shall notify the lessee of the intent to sell the property.

6.If the commissioner determines to proceed with the sale, the department shall:

a.Notify the lessee if the lands are leased.

b.Obtain all appraisals from a certified appraiser for tracts to be sold. The commissioner may require additional appraisals be conducted by different certified appraisers.

c.Obtain from the applicant a "metes and bounds" survey of the land to be purchased, including both a plat and written narrative of the survey. The narrative must include the distances and angles between points of intersection and points of entry and exit tied into the section corners, quarter section corners, or lot corners, and a breakdown of the acreage in the parcel for each separate quarter section or lot included in the purchase.

7.The commissioner shall present to the board the proposed land sale, including appraisals public comments and any other relevant information. Upon a determination by the board it is willing to sell:

a.The board shall set a minimum acceptable sale price.

b.The department shall:

(1)Publish a notice of sale that includes a request for bidders. The notice of sale must include:

(a)The legal description of the proposed trust land tract to be sold;

(b)Instructions on how to register to bid; and (c)The deadline for bidders to register.

(2)Notify the lessee of the intent to sell the property within the months of October through January if the land is leased.

(3)Conduct a hearing according to North Dakota Century Code section 15-09-03. Any comments made at the hearing must be brought to the board, along with recommendations regarding the comments.

8.If the applicant desires to purchase the property at the price set by the board and pays full purchase price, the commissioner may complete the sale on the board's behalf.

History

• History: Effective January 1, 2021; amended effective April 1, 2026.
• General Authority: N.D. Constitution article IX, § 6; NDCC 15-01-02, 28-32-02

N.D. Admin. Code 85-04-09-03 Payment of costs

The purchaser is responsible for payment of all costs, including appraisals, title examinations, and other costs as may be necessary to complete the sale.

N.D. Admin. Code 85-04-09-04 Fencing

A no-fencing clause may be added to the conveyance to keep trust lands from being severed.

N.D. Admin. Code 85-04-09-05 Reversion clause

Any conveyance must contain a reversion clause stipulating that if the property is at any time not used for its stated purpose at the time of purchase, the board may terminate the estate created by the conveyance and repossess the property. The power of termination and re-entry may be exercised by the board without reimbursement to the purchaser of any part of the purchase price, and without payment of any other consideration.

N.D. Admin. Code 85-04-09-06 Board review

Within thirty days of a decision under these rules, an aggrieved party may request the commissioner review the decision. The aggrieved party seeking review shall submit any information required by the commissioner as part of this request. Within thirty days of the commissioner's review, the aggrieved party may request board review, and the commissioner shall determine if board review is warranted.

History

• History: Effective January 1, 2021; amended effective April 1, 2026.
• General Authority: N.D. Constitution article IX, § 6; NDCC 15-01-02, 28-32-02

Article 85-05 Investments

Chapter 85-05-01 Investment of Fund Assets

N.D. Admin. Code 85-05-01-01 Investment of fund assets

The board shall invest the financial assets under its control in accordance with the prudent investor

rule as defined in North Dakota Century Code section 21-10-07.

History

• History: Effective January 1, 2020.
• General Authority: NDCC 28-32-02
• Law Implemented: NDCC 15-03-04

Article 85-06 Minerals Management

Chapter 85-06-01 Oil and Gas

N.D. Admin. Code 85-06-01-01 Oil and gas lease nomination

1.The department may accept an oil and gas lease nomination for a tract not already under an oil and gas lease as reflected in department records and may accept a nomination for a tract under an oil and gas lease which will expire prior to the date of the oil and gas lease sale. The first nomination received on a tract is considered an offer and determines the opening bid.

2.The department may accept a nomination for an oil or gas lease either electronically through the department's website or in writing. The nomination period for an oil and gas lease must be the period set by the commissioner during which the department may accept oil and gas lease nominations.

3.An oil and gas lease nomination must be limited to a maximum of one quarter section, unless otherwise authorized under subsection 3, or by the board.

4.A nomination for a tract containing a body of water may include up to a section of land if the tract cannot reasonably be subdivided by quarter section or half section. The tract acreage, including islands, may be offered and described as "more or less" and may be adjusted by the board within each quarter section.

History

• History: Effective January 1, 2020; amended effective April 1, 2024; April 1, 2026.
• Law Implemented: N.D. Constitution article IX, § 5; NDCC 15-01-02, 15-02-05, 15-05-09, 61-33-06, 61-33.1

N.D. Admin. Code 85-06-01-02 Advertisement for public auction

The department shall publish notice of an oil and gas lease auction on the department's website.

The notice must be published at least ten days prior to the day of the auction. The advertisement must specify the date, time, and place of the auction, and how an interested person may obtain a list of the tracts to be auctioned. If publication of any notice is inadvertently omitted by any newspaper or the notice contains typographical errors, the department may proceed with the scheduled leasing if it appears the omission or error is not prejudicial to the department's interest.

History

• Law Implemented: NDCC 15-05-09, 38-09-15

N.D. Admin. Code 85-06-01-03 Public auction

1.The board may issue an oil and gas lease by public auction. Public auctions may be hosted live or online at the discretion of the commissioner. Bidding is based on a bonus of not less than one dollar per acre, and an annual delay rental of not less than one dollar per acre per year based on the acreage shown in the records of the department at the time the oil and gas lease is issued.

2.The successful bidder at an auction shall pay the bonus, the rental payments for the primary term as defined by the oil and gas lease, the advertising fee, the lease auction administration fee, and any processing fees via automated clearing house or wire transfer, by five p.m. central prevailing time, ten days after the date the auction closed.

3.If no bids are received, the nominator is the successful bidder.

4.The board may not issue an oil and gas lease until receipt of the bonus, rental payments, and fees.

History

• History: Effective January 1, 2020; amended effective April 1, 2024; April 1, 2026.
• Law Implemented: N.D. Constitution article IX, § 5; NDCC 15-01-02, 15-02-05, 15-05-09, 15-05-10

N.D. Admin. Code 85-06-01-04 Rejection of nomination and bids

The commissioner, in the best interests of the trusts, may reject a nomination or a bid any time prior to the issuance of an oil and gas lease.

History

• General Authority: NDCC 15-05-09, 15-07-20, 15-08.1-06, 61-33-06
• Law Implemented: NDCC 15-05-09

N.D. Admin. Code 85-06-01-05 Form and term of oil and gas lease

An oil and gas lease must be issued on a form approved by the board. An oil and gas lease must be made for a term of not less than five years and continue in effect under such term and for as long as oil or gas may be produced from the oil and gas leased premises in commercial quantities or unless otherwise extended. An oil and gas lease must provide for a bonus of not less than one dollar per acre and an annual delay rental of not less than one dollar per acre per year based on the acreage shown in the records of the department at the time the oil and gas lease is issued. An oil and gas lease may contain such other terms and conditions as the board deems appropriate.

N.D. Admin. Code 85-06-01-06 Assignment, amendment, or extension

1.A lessee shall submit an application to the department for an assignment, amendment, or extension of an oil and gas lease, or a portion of the oil and gas leased premises, utilizing the form available on the department's website. The lessee shall provide any documents requested by the department. The lessee shall submit a fee, in an amount set by the board, to the department with the application.

2.All oil and gas lease obligations must be current at the time the assignment is approved. The lessee remains bound by the terms and conditions of the oil and gas lease, board rules and policies, and applicable laws until the assignment is approved by the department. Upon approval of the assignment, the assignee is bound by all the terms and conditions of the oil and gas lease, board rules and policies, and applicable laws. The assignor shall provide the department with a copy of the fully executed assignment within thirty days from the approval.

3.If, at the expiration of the primary term, production of oil or gas or both has not been obtained in commercial quantities on the leased premises but drilling, testing, completion, recompletion, reworking, deepening, plugging back, or repairing operations are being conducted on the premises in good faith, the lessee may, on or before the expiration of the primary term, file a written application with the department for a one hundred eighty day extension of the oil and gas lease, including a payment of ten dollars per acre, and the commissioner, in writing, shall extend the oil and gas lease for a period of one hundred eighty days beyond the expiration of the primary term and as long as oil or gas or both is produced in commercial quantities. The lessee may, as long as such drilling, testing, or completion operations are being conducted in good faith, make written application to the commissioner, on or before the expiration of the initial extended period of one hundred eighty days for an additional extension of one hundred eighty days, including a payment of twenty dollars per acre, and the commissioner, in writing, shall extend the oil and gas lease for an additional one hundred eighty day period from and after the expiration of the initial extended period of one hundred eighty days, and as long as oil or gas or both is produced in commercial quantities. The oil and gas lease may not be extended for more than a total of three hundred sixty days from and after the expiration of the primary term unless production in commercial quantities has been obtained or unless extended by some other provision of the lease.

4.A lessee may request an amendment to an oil and gas lease for a specific purpose. A request for an amendment must state the specific grounds for the request. Approval of a request is at the discretion of the commissioner and the department shall notify the lessee in writing whether or not the request is approved.

History

• Law Implemented: NDCC 15-05-09, 15-05-15

N.D. Admin. Code 85-06-01-07 Voluntary release

To request a voluntary release of an oil and gas lease, a lessee shall submit a written request to the department for the voluntary release of an oil and gas lease, or portion of an oil and gas leased premises, and shall provide all other documents requested by the department. Approval of a voluntary release is at the discretion of the commissioner and the department shall notify the lessee in writing whether the voluntary release is approved. All oil and gas lease obligations must be current at the time the voluntary release is approved. The lessee remains bound by the terms and conditions of the oil and gas lease, board rules and policies, and applicable laws until the voluntary release is approved by the commissioner.

History

• Law Implemented: NDCC 15-05-09

N.D. Admin. Code 85-06-01-08 Royalties

If a sale of gas, carbon black, sulfur, or any other products produced or manufactured from gas produced and marketed from the oil and gas leased premises, including liquid hydrocarbons recovered from such gas processed in a plant, does not constitute an arm's length transaction, the royalties due the lessor are as follows:

1.On any gas produced and marketed, except as provided herein with respect to gas processed in a plant for the extraction of gasoline, liquid hydrocarbons, or other products; the royalty, as determined by the board, is based on the gross production or the market value thereof, at the option of the lessor, such value to be based on the highest market price paid for gas of comparable quality and quantity under comparable conditions of sale for the area where produced and when run, or the gross proceeds of sale, whichever is greater; provided the maximum pressure base in measuring the gas under an oil and gas lease at any time may not exceed fourteen and seventy-three hundredths (14.73) pounds per square inch absolute, and the standard base temperature shall be sixty degrees Fahrenheit, correction to be made for pressure according to Boyle's Law, and for specific gravity according to a test made by the balance method or by the most approved method of testing being used by the industry at the time of testing.

2.On any gas processed in a gasoline plant or other plant for the recovery of gasoline or other liquid hydrocarbons, the royalty, as determined by the board, is based on the residue gas and the liquid hydrocarbons extracted or the market value thereof, at the option of the lessor. All royalties due herein is based on eighty percent or that percent accruing to the lessee, whichever is greater, of the total plant production of residue gas attributable to gas produced from the oil and gas leased premises, and on forty percent or that percent accruing to the lessee, whichever is greater, of the total plant production of liquid hydrocarbons attributable to the gas produced from the oil and gas leased premises; provided that if a third party or parties are processing gas through the same plant pursuant to arm's length transaction and one such transaction accounts for an annual average of ten percent or more, or all such transactions collectively account for an annual average of thirty percent or more of the gas being processed in such plant, the royalty is based on the gross proceeds of sale that would accrue to the lessee if the gas were processed under the terms of the most remunerative third-party transaction for processing gas in such plant. Respective royalties on residue gas and on liquid hydrocarbons for which the requirements for using third-party transactions cannot be met must be determined by the greater of:

a.The highest market price paid for any gas or liquid hydrocarbons of comparable quality and quantity under comparable conditions of sale in the general area F.O.B. at the plant after processing;

b.The gross proceeds of sale for such residue gas or the weighted average gross proceeds of sale for the respective grades of liquid hydrocarbons, F.O.B. at the plant after processing; or

c.The gross proceeds of sale paid to a third party processing gas through the plant. The lessee shall furnish copies of any and all third-party gas processing agreements pertaining to the plant upon lessor's request.

3.On carbon black, sulfur, or any other products produced or manufactured from gas, excepting liquid hydrocarbons, whether said gas be "casinghead", "dry", or any other gas, by fractionating, burning, or any other processing, is based on the gross production of such productions, or the market value thereof, at the option of the lessor. Such market value is to be the greater of:

a.The highest market price paid for each of the products of comparable quality and quantity under comparable conditions of sale in the general area during the same month in which such products are produced; or

b.The average gross proceeds of sale for each of the products for the same month in which such productions are produced, provided that if a third-party transaction is used to determine royalty in accordance with subsection 2, the royalty due under this subsection shall be determined in accordance with such transaction.

4.The lessee agrees all royalties accruing to the lessor under this rule are without deduction for the cost of producing, gathering, storing, separating, treating, dehydrating, vapor recovery, compressing, processing, transporting, conditioning, removing impurities, depreciation, risk capital, and otherwise making the oil, gas, and other products produced hereunder ready for sale or use.

History

• History: Effective January 1, 2020; amended effective April 1, 2024.
• Law Implemented: N.D. Constitution article IX, § 5; NDCC 15-01-02, 15-02-05, 15-05-09, 15-05-10

N.D. Admin. Code 85-06-01-09 Disputed title royalty escrow account

Any payor that proposes to withhold royalty payments based upon an ownership dispute shall establish an escrow deposit account and shall deposit the disputed payments into this account.

1.The account must be established at the Bank of North Dakota, or other state or national chartered insured financial institution approved by the commissioner, with the board as a party to the escrow agreement.

2.Prior to a final resolution of the dispute, a partial release of the disputed payments may be made upon written approval by the commissioner and the payor. Upon approval, the disputed payments must be distributed back to the payor for proper distribution to the rightful owner.

3.Upon final resolution of the ownership dispute, and with consent of the commissioner, the escrow agent is authorized to release all disputed payments held in the account to the payor for proper distribution to the rightful owner. The board is entitled to any interest income earned on the account attributable to North Dakota's ownership interest.

4.This section applies to matters where the amount of the disputed payments is twenty-five thousand dollars or more over a twelve-month period. The commissioner and the payor may agree this section applies to oil and gas leases executed prior to the effective date of this

section.

N.D. Admin. Code 85-06-01-10 Cancellation of oil and gas lease

1.Other than as provided in subsection 7, an oil and gas lease may be canceled for:

a.Nonpayment of any sum due under the oil and gas lease;

b.Breach of any oil and gas lease terms or conditions; or

c.A violation of applicable laws, rules, or board policies.

2.Before an oil and gas lease is canceled, the department shall send a notice of intention to cancel the lease specifying the reason for cancellation to the lessee listed in the records of the department by certified or registered mail to the lessee's address as shown in the records of the department.

3.A lessee may file with the commissioner a request for a waiver, or a request for the commissioner to review the notice of intention to cancel the oil and gas lease, which must include a statement of the specific grounds for the request. A request must be in writing and filed with the commissioner within thirty days after the date the notice of intention to cancel the oil and gas lease is postmarked. A request for a waiver or review is deemed filed when personally delivered or when received by the department. The commissioner may allow the lessee time to cure the breach, or may waive any breach, except a breach of oil and gas lease terms required under North Dakota Century Code. Any waiver must be limited to the particular breach waived and does not limit the board's right to cancel the oil and gas lease for any other breach. If, after review of the request, the commissioner determines cancellation of the lease is still warranted, the commissioner shall request board approval of the cancellation. An oil and gas lease cancellation under this section is exempt from the requirements of section 85-06-01-11.

4.If the lessee has not filed a release of the oil and gas lease with the applicable county recorder's office or requested a waiver or commissioner review within thirty days after the postmark date of a notice of intention to cancel the lease, the commissioner may cancel the lease.

5.Release of the oil and gas lease by the lessee or cancellation of the lease does not release the lessee from liability for any sum due to the board or from any damages caused by a breach of the lease.

6.Upon cancellation of the oil and gas lease, the department shall file a notice of cancellation of oil and gas lease with the applicable county recorder's office.

7.An oil and gas lease automatically terminates for failure to pay the annual delay rental by the date due without further notice by the department or opportunity for the lessee to remedy the default.

History

• History: Effective January 1, 2020; amended effective April 1, 2024; April 1, 2026.
• General Authority: NDCC 15-01-02, 15-05-09, 15-05-10, 15-07-20, 15-08.1-06, 61-33-06
• Law Implemented: N.D. Constitution article IX, § 5; NDCC 15-01-02, 15-02-05, 15-05-09, 15-05-10

N.D. Admin. Code 85-06-01-11 Board review

Within thirty days of a decision under these rules, an aggrieved party may request the commissioner review the decision. The aggrieved party seeking review shall submit any information required by the commissioner as part of this request. Within thirty days of the commissioner's review, the aggrieved party may request board review and the commissioner shall determine if a board review is warranted.

History

• General Authority: NDCC 15-01-02, 15-05-09, 15-05-10, 15-07-20, 15-08.1-06, 61-33-06

N.D. Admin. Code 85-06-01-12 Reports of lessee - Delinquency penalty

Royalty payment and reporting are due on forms prescribed by the department as follows:

1.For gas:

a.Within one hundred twenty-three days of the last day of the month in which initial production occurs, royalty payment and reporting are due for the first, second, and third months of production.

b.Successive royalty payments and reporting are due within sixty-one days of the last day of the month in which production occurs.

2.For oil:

a.Within ninety-two days of the last day of the month in which initial production occurs, royalty payment and reporting are due for the first, second, and third months of production.

b.Successive royalty payments and reporting are due within thirty days of the last day of the month in which production occurs.

3.The royalty payment and reporting deadline may be extended by the commissioner upon written request. An extension, if granted, only applies to future royalty payments and reporting.

4.Any sum, other than delay rentals, not paid when due is delinquent and is subject to a delinquency penalty of one percent of the sum for each thirty-day period of delinquency or fraction of delinquency period, unless a waiver or board review is requested under subsection 6. For leases issued after July 31, 2021, any penalty must be calculated pursuant to subsection 3 of North Dakota Century Code section 15-05-10.

5.Unpaid royalties bear interest under subsection 2 of North Dakota Century Code section 15-05-10 and the interest is due for each thirty-day period of delinquency or fraction of delinquency period, unless a waiver or board review is requested under subsection 6.

6.A lessee has thirty days from the date of the receipt of a notice of a penalty and interest assessment to pay the penalty and interest, request a waiver or reduction, or to request board review. A request for a waiver or reduction of the penalty or interest or a request for board review must be in writing and provide the grounds for the request. The following factors may be considered when deciding to waive or reduce the penalty or interest: the reason for the late payment; the degree of control the payor had over the late payment; any unusual or mitigating circumstances involved; the loss of interest earnings to the trust involved; and any other relevant factors. A waiver or reduction of penalty and interest does not constitute a waiver of the right to seek the full amount of both penalty and interest if the initial claim for royalty payment is not paid. If a claim for unpaid royalties, penalties, and interest is settled and payment received, the amount of penalties and interest not collected is deemed waived.

History

• History: Effective January 1, 2020; amended effective April 1, 2022; April 1, 2026.
• General Authority: NDCC 15-01-02, 15-05-09, 15-05-10, 15-07-20, 15-08.1-06, 61-33-06
• Law Implemented: NDCC 15-05-09, 15-05-10, 47-16-39.2

N.D. Admin. Code 85-06-01-13 Audit and examination

1.The department may audit and examine any records, including:

a.Books, accounts, and receipts; and

b.Contracts and other records pertaining to the production, transportation, sale, and marketing of the oil or gas or other products produced from the oil and gas leased premises.

2.The department shall serve by certified mail, a written request to the payor specifying the documents requested.

3.After audit and examination of the records set forth in subsection 1, the department shall notify the payor of the results, including the audit findings, the basis for that determination, and the date by which a response to the findings is due.

4.A payor has sixty days from the date of the receipt of the audit findings to comply, request an extension, respond to the findings, or request commissioner review. A request for an extension or for commissioner review must be made in writing. A request for commissioner review must include a statement of the reasons for disagreement with the audit findings. If a payor fails to comply with the audit findings, respond to the findings, or request commissioner review within sixty days, the oil and gas lease is subject to cancellation under section 85-06-01-10.

History

• General Authority: NDCC 15-05-09, 15-05-10, 15-07-20, 15-08.1-06, 47-16-39.1, 61-33-06
• Law Implemented: NDCC 15-05-09, 15-05-10, 47-16-39.2

N.D. Admin. Code 85-06-01-14 Request for shut-in status for oil or gas

1.A lessee requesting shut-in status of an oil or gas well, without canceling the lease, shall submit a written application to the department utilizing the form available on the department's website. The application must contain the following information:

a.The name and well file number assigned by the North Dakota department of mineral resources oil and gas division;

b.The township, range, and section of the surface location of the well;

c.The board's oil and gas lease number for the subject lease, the date of the oil and gas lease, the acreage covered by the oil and gas lease, and the current lessee;

d.The name and address of the operator of the well;

e.The cumulative production and the number of days of production for the three months immediately preceding the request;

f.The grounds for the request and the anticipated length of time the well will be shut-in; and

g.Any additional information requested by the department.

2.An application fee, in an amount set by the department, must be submitted with the application. Upon approval of the shut-in application, the applicant shall promptly submit to the department a shut-in well payment. The shut-in well payment must be the same amount for oil or gas wells and must be calculated on a per-lease, per-well basis.

3.An application is deemed filed when the department receives the application form, application fee, shut-in well payment, and any additional information requested by the department.

4.Within fifteen days of receipt of an application, the commissioner shall notify the applicant in writing if:

a.The application is approved and the terms of the shut-in approval;

b.The application is denied;

c.An additional fifteen day period is necessary to consider the application; or

d.The application requires board approval.

5.If an application is denied, a lessee may file with the department a written request for commissioner review, specifying the grounds for the request.

6.A shut-in approval is effective for one year from the date of approval unless the commissioner determines a shorter amount of time is appropriate.

7.The commissioner may revoke a shut-in approval if the commissioner determines the action is in the best interests of the trusts. If a shut-in approval is revoked prior to its expiration, the department shall provide notice to the lessee by certified mail. Within sixty days from the date of receipt of the notice, the lessee shall re-establish production. If the lessee fails to re-establish production, the oil and gas lease is subject to cancellation under section 85-06-01-10.

History

• History: Effective January 1, 2020; amended effective April 1, 2024; April 1, 2026.
• General Authority: NDCC 15-01-02, 15-05-09, 15-05-10, 15-07-20, 15-08.1-06, 61-33-06
• Law Implemented: N.D. Constitution article IX, § 5; NDCC 15-01-02, 15-02-05, 15-05-09, 15-05-10

N.D. Admin. Code 85-06-01-15 Offset obligations for vertical oil and gas wells

1.If a vertical oil and gas well has been drilled and is producing in commercial quantities from mineral acreage owned by another or from adjacent trust lands leased at a lesser royalty, which vertical oil and gas well is within one thousand feet [304.8 meters] of the trust lands, the lessee of the trust lands shall, within one hundred twenty days after completion of such vertical oil and gas well, exercise one of the following options:

a.Diligently begin in good faith the drilling of a corresponding offset well on the leased trust lands, or on lands pooled therewith;

b.Pay a compensatory royalty, as determined by the commissioner, in lieu of the drilling of an offset well. If a lessee elects to pay a compensatory royalty, the lessee shall submit to the commissioner, within thirty days of the date such election, a proposed compensatory royalty agreement based on the estimated drainage area of the vertical oil and gas well located within one thousand feet [304.8 meters] of the trust lands. Geological, engineering, or other evidence in the form of a narrative or maps, or both, which form the

basis for the offset drainage computation must be included with the proposed agreement;

c.Release the leased acreage to avoid the offset requisites; or

d.Submit a request to the commissioner for a waiver of the offset obligation as follows:

(1)A request for a waiver of the offset obligation must be in writing and provide the grounds for the request. If a request is made, the lessee shall submit to the commissioner, within thirty days of the request, geological, engineering, or other evidence in the form of a narrative or maps, or both, which, in the opinion of the lessee, indicates that an additional offset well need not be drilled to reasonably develop or protect the trust lands from offset drainage due to the vertical oil and gas well located within one thousand feet [304.8 meters] on trust land. After a review of the evidence required to be submitted, the commissioner may:

(a)Request that the lessee supply additional evidence to support: [1]The request for a waiver of the offset obligation; or [2]The proposed compensatory royalty agreement submitted by the lessee.

(b)Grant a waiver of the offset obligation;

(c)Approve the proposed compensatory royalty agreement of the lessee;

(d)Require the lessee to pay compensatory royalties as determined by the commissioner;

(e)Take such other action as the commissioner may deem appropriate, including the acceptance of a release either in whole or in part as to all or less than all strata included in the lease; or (f)Cancel the lease in accordance with section 85-06-01-10.

(2)A waiver of offset obligation is effective from the date of approval by commissioner.

The commissioner may revoke a waiver of offset obligation if the commissioner determines the action is in the best interests of the trusts. If a waiver of offset obligation is revoked, the department shall provide notice to the lessee by certified mail. In the event of revocation, the lessee shall have one hundred twenty days from the date of revocation to exercise one of the options under this section.

(3)Lessee shall submit a report as to the conditions regarding offset drainage from an offset well every five years from the date of approval of waiver of offset obligation. If there is a change of conditions regarding offset drainage from an offset well at any time, the lessee shall be required to submit a report notifying the department of the change within one hundred twenty days of the change of conditions.

(4)The commissioner shall notify the lessee of the commissioner's decision.

2.If the lessee fails to exercise any of the options in subsection 1 the oil and gas lease is subject to cancellation under section 85-06-01-10.

3.The commissioner may approve compensatory royalties on the board's behalf in accordance with this section.

4.If an application does not comply with this section, or if the commissioner determines board review is desirable, the application may be brought before the board for its consideration.

History

• History: Effective January 1, 2021.
• General Authority: NDCC 15-05-09, 15-07-20, 15-08.1-06, 61-33-06
• Law Implemented: NDCC 15-05-09, 61-33-06, 61-33.1

Chapter 85-06-02 Coal

N.D. Admin. Code 85-06-02-01 Prospecting permits

A request for a prospecting permit is issued in accordance with chapter 85-04-04.

N.D. Admin. Code 85-06-02-02 Lands subject to coal lease

A coal lease may be issued upon acreage not already under a coal lease as reflected in department records. A coal lease is limited to a maximum of one quarter section, unless otherwise authorized by the board.

N.D. Admin. Code 85-06-02-03 Application for coal lease

A written application for a coal lease must include:

1.Legal description of the lands to be leased;

2.Proposed terms for the coal lease, including the bonus, length, delay rental, and royalty;

3.Documentation showing that the bonus, term, delay rental, and royalty being offered are consistent with market rates; and

4.Nonrefundable application fee in an amount set by the board.

N.D. Admin. Code 85-06-02-04 Notice of coal leasing

1.Upon receipt of an application for a coal lease and a determination by the board that the application covers a tract the board is willing to lease, the department shall post on the department's website a notice of the application for coal lease, any supporting documentation, and instructions for submitting public comments. Comments must be received by the department no later than five p.m. central standard time fourteen days after posting the notice of the application for a coal lease to be considered. All comments must be in writing and contain the following:

a.Name and address of the interested person;

b.Applicant's name and address;

c.The legal description of the proposed coal leased premises as shown on the posted notice; and

d.A detailed statement as to whether the interested person supports or opposes the issuance of the coal lease.

2.Those comments must be brought to the board along with the department's recommendations.

N.D. Admin. Code 85-06-02-05 Negotiation of coal lease

The department may negotiate with the applicant the terms and conditions of a coal lease the department deems to be in the best interests of the trusts. If the board owns the surface estate of a coal leased premises, compensation for the surface damage must be negotiated separately. The applicant may propose modifications to the bonus, delay rental, royalty, or other terms of the coal lease application. The board may refuse to enter a coal lease for any reason. The board may not issue the coal lease until receipt of full payment of at least one year of delay rental, bonus payment, and any applicable fees.

History

• General Authority: NDCC 15-05-05, 15-05-09, 15-05-10, 15-07-20, 15-08.1-06, 61-33-06
• Law Implemented: NDCC 15-05-01, 15-05-04, 15-05-09, 15-05-10, 15-05-13

N.D. Admin. Code 85-06-02-06 Testing

The department may require a lessee to conduct drilling tests on the coal leased premises prior to the coal mining operations. If required, sufficient test holes must be drilled to outline the boundaries, thickness, and depth of the coal deposit and estimate the quality, quantity, and type of coal located on the coal leased premises. The lessee shall provide the department a map of the coal leased premises showing the boundaries of the coal deposit and a written report estimating the thickness, depth, quality, quantity, and type of coal. All test holes must be reclaimed to the satisfaction of the department at the conclusion of testing. Failure to conduct drilling tests when required or failure to provide the required documentation, may result in termination of the coal lease under section 85-06-02-08.

N.D. Admin. Code 85-06-02-07 Voluntary release

To request a voluntary release of a coal lease, or portion of a coal leased premises, a lessee shall submit a written request to the department utilizing the form available on the department's website and all other documents requested by the department. Approval of a voluntary release is at the discretion of the commissioner and the department shall notify the lessee in writing whether or not the voluntary release is approved. All coal lease obligations must be current at the time the voluntary release is approved. The lessee shall remain bound by the terms and conditions of the coal lease, board rules and policies, and applicable laws, until the voluntary release is approved by the commissioner.

N.D. Admin. Code 85-06-02-08 Breach of coal lease

1.A coal lease may be canceled for:

a.Nonpayment of any sum due under the coal lease;

b.Breach of any of the coal lease terms or conditions provided the cancellation does not release lessee from liability for any sum due lessor or from any damages due to the breach; or

c.Violation of the board rules and policies, and applicable laws.

2.Prior to cancellation of a coal lease, the department shall mail a notice of intention to cancel the coal lease specifying the reason for cancellation to the lessee by mail requiring a signed receipt at the address of the lessee as shown in the records of the department. If the notice of intention to cancel is returned undeliverable or refused, the notice must be published in the official newspaper of the county in which the coal leased premises is located.

3.A lessee may file with the commissioner a request for a waiver or a request for the commissioner to review the notice of intention to cancel the coal lease, which must include a statement of the specific grounds for the request. A request must be in writing and filed with the commissioner within twenty days after the date of notice of intention to cancel the coal lease is received or the date of publication. A request for a waiver or review is deemed filed when personally delivered or when received by the department. The commissioner may waive any breach except a breach of coal lease terms required under North Dakota Century Code, or the commissioner may allow the lessee time to cure the breach. Any waiver is limited to the particular breach waived and may not limit the board's right to cancel the coal lease for any other breach.

4.If the lessee has not remedied the default within twenty days after receipt of a notice of intention to cancel or the date of publication, the commissioner shall cancel the coal lease.

5.Cancellation of the coal lease does not release the lessee from liability for any sum due to the board or from any damages from a breach of the coal lease.

6.Upon cancellation of the coal lease, the department shall file a satisfaction of coal lease with the register of deeds' office in the county where the coal leased premises is located.

N.D. Admin. Code 85-06-02-09 Board review

Within thirty days of a decision under these rules, an aggrieved party may request the commissioner review the decision. The aggrieved party seeking review shall submit any information required by the commissioner as part of this request. Within thirty days of the commissioner's review, the aggrieved party may request board review and the commissioner shall recommend if board review is warranted.

N.D. Admin. Code 85-06-02-10 Minimum delay rentals

1.The minimum delay rental is five dollars per acre per year payable for as long as the coal lease is in full force and effect.

2.The first year of delay rental must be paid upon the issuance of a coal lease. The delay rental for each subsequent year of the coal lease is due and payable before the anniversary date of the coal lease.

N.D. Admin. Code 85-06-02-11 Royalty

Royalties are due to the lessor for coal mined or saved from the coal leased premises. If any other valuable substance is found or discovered during exploration or coal mining operations, the operator must notify the department prior to extraction.

N.D. Admin. Code 85-06-02-12 Assignments

A lessee shall submit a written request to the department for an assignment of coal lease utilizing the form available on the department's website. A request for assignment must include any documents requested by the department. The lessee shall submit a coal lease assignment fee, in an amount set by the board, to the department with the request. Approval of an assignment is at the discretion of the commissioner and the department shall notify the lessee in writing whether or not the assignment is approved. All coal lease obligations must be current at the time the assignment is approved. The lessee remains bound by the terms and conditions of the coal lease, board rules and policies, and applicable laws, until the assignment is approved by the commissioner. Upon approval of the assignment, the assignee is bound by all the terms and conditions of the coal lease, board rules and policies, and applicable laws. The assignor shall provide the department with a copy of the fully executed assignment within thirty days from the approval.

History

• Law Implemented: NDCC 15-05-01, 15-05-09, 15-05-15

N.D. Admin. Code 85-06-02-13 Surface owner protection

For a coal lease or prospecting permit for which the board is leasing or granting the right to explore for coal and has no interest in the surface estate, the lessee or permittee shall comply with North Dakota Century Code chapter 38-18.

N.D. Admin. Code 85-06-02-14 Financial obligation to reclaim

The lessee shall pay the entire cost of reclamation necessitated by the coal mining operation.

N.D. Admin. Code 85-06-02-15 Reports of lessee - Delinquency penalty

A statement and payment of royalty must be received by the department on or before the last day of the month following the mining and removal of coal from the premises.

1.The royalty payment and reporting deadline may be extended by the commissioner upon written request. An extension, if granted, only applies to future royalty payments and reporting.

2.Any sum, other than delay rentals, not paid when due is delinquent and is subject to a delinquency penalty of one percent of the sum for each thirty-day period of delinquency or fraction of delinquency period, unless a waiver is granted by the commissioner.

3.A lessee has thirty days from the date of the receipt of a notice of a penalty assessment to pay the penalty or request a waiver.

a.A request for a waiver of the penalty must be in writing and provide the grounds for the request.

b.The following factors may be considered when deciding to waive the penalty: the reason for the late payment; the degree of control the payor had over the late payment; any unusual or mitigating circumstances involved; the loss of interest earnings to the trust involved; and any other relevant factors.

c.The commissioner, for good cause, may waive up to twenty-five thousand dollars of the penalty initially sought. A request for penalty waiver in excess of twenty-five thousand dollars must be presented to the board, with the commissioner's recommendation, for review and decision.

d.A waiver of penalty does not constitute a waiver of the right to seek the full amount of the penalty if the initial claim for royalty payment is not paid. If a claim for unpaid royalties and penalties is settled and payment received, the amount of penalties not collected is deemed waived.

N.D. Admin. Code 85-06-02-16 Audit and examination

1.The department may audit and examine any records, including:

a.Cuttings, cores, logs, mine plans, and estimated tonnage in place from any coal leased premises;

b.Books, accounts, sales invoices, and receipts;

c.Contracts and other records pertaining to the production, transportation, sale, and marketing of the coal produced from the coal leased premises; and

d.Documents supporting the cost of the coal mining operation used for calculating the price per ton royalty.

2.The department shall serve by certified mail, a written request to the payor specifying the documents requested.

3.After audit and examination of the records set forth in subsection 1, the department shall notify the payor of the results, including the audit findings, any additional royalties due, the basis for that determination, and the date by which a response to the findings is due. If an exact amount of any delinquent royalties cannot be determined from the documents provided, the department shall request the payor make appropriate adjustments.

4.A payor has sixty days from the date of the receipt of the audit findings to comply, respond to the findings, or request commissioner review. A request for commissioner review must be made in writing and include a statement of the reasons for disagreement with the audit findings. If a payor fails to comply with the audit findings, respond to the findings, or request commissioner review within sixty days, the coal lease is subject to cancellation under section 85-06-02-08.

History

• General Authority: NDCC 15-05-05, 15-05-09, 15-05-10, 15-07-20, 15-08.1-06, 61-33-06