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-25.1038.01000
-Sixty-ninth
+25.1038.01002
+Title.02000
+Adopted by the Energy and Natural
+Resources Committee
+Sixty-ninth
+February 6, 2025
 Legislative Assembly
 of North Dakota
 Introduced by
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 Senators Hogue, Marcellais, Patten
 A BILL for an Act to create and enact a new chapter to title 38 of the North Dakota Century
 Code, relating to regulations, development, and production of critical minerals and rare earth
-elements; to amend and reenact section 47-10-24 of the North Dakota Century Code, relating to
-descriptions and definitions of minerals in leases and conveyances; and to provide a penalty.
+elements; to amend and reenact sectionsections 38-12-02 and 47-10-24 of the North Dakota
+Century Code, relating to the authority of the industrial commission and descriptions and
+definitions of minerals in leases and conveyances; and to provide a penalty; and to declare an
+emergency.
 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
 SECTION 1. A new chapter to title 38 of the North Dakota Century Code is created and
 enacted as follows:
 Definitions.
 As used in this chapter:
-1. "Commission" means the public service commission.
+1. "Commission" means the   public service  industrial   commission.
 2. "Critical minerals" means a nonfuel mineral or mineral material essential to the
 economic or national security of the United States and which has a supply chain
 vulnerable to disruption. The term includes aluminum, antimony, arsenic, barite,
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 graphite, hafnium, helium, indium, lithium, magnesium, manganese, niobium, platinum
 group metals, potash, the rare earth elements group, rhenium, rubidium, scandium,
 strontium, tantalum, tellurium, tin, titanium, tungsten, uranium, vanadium, and
+Page No. 1 25.1038.01002
+ HOUSE BILL NO. 1459
+PROPOSED AMENDMENTS TO
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 zirconium, which are embedded, commingled, included, contained within, or in any
-way associated with any coal seam or deposit.
-3. "Extraction facility" means any well or mine or other extractive process operated with
-the purpose or intent of recovering critical minerals or rare earth elements.
-4. "Operator" means any person that is in charge of the development of a lease or the
-operation of a producing property, or is the owner of an extraction facility that is or has
-been capable of producing critical minerals or rare earth elements.
-Page No. 1 25.1038.01000
- HOUSE BILL NO. 1459
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-4. "Owner" means the person who owns the critical minerals or rare earth elements.
-5. "Rare earth elements" means any of a series of metallic elements of which the oxides
+way associated with any coal seam or   coal   deposit.
+3. "Extraction   facility  process  " means   any well or mine or other extractive process
+operated with   the purpose or intent of recovering critical minerals or rare earth
+elements  the process in which critical minerals or rare earth elements are extracted
+from coal produced in conjunction with coal mining operations which cannot otherwise
+be extracted without mining a coal seam or coal deposit  .
+4. "Operator" means any person that   is in charge of the development of a lease or the
+operation of a producing property, or   is the owner of   an extraction  a p  rocessing   facility
+that is or has   been capable of producing critical minerals or rare earth elements
+embedded, commingled, included, contained within, or in any way associated with a
+coal seam or coal deposit  .
+4.  5  .  "Owner" means the person who owns the critical minerals or rare earth elements.
+5.  6  .  "Person" means and includes any natural person, corporation, limited liability
+company, association, partnership, receiver, trustee, executor, administrator, guardian,
+fiduciary, or other representative of any kind, and includes any department, agency, or
+instrumentality of the state or of any governmental subdivision thereof; the masculine
+gender, in referring to a person, includes the feminine and the neuter genders.
+        7.        "Processing facility" means any equipment, processing plant, or other facility operated
+with the purpose or intent of extracting critical minerals or rare earth elements
+embedded, commingled, included, contained within, or in any way associated with a
+coal seam or coal deposit.
+      8.    "Rare earth elements" means any of a series of metallic elements of which the oxides
 are classed as rare earths and which include the elements of the lanthanide series,
 yttrium and scandium, which are embedded, commingled, included, contained within,
-or in any way associated with any coal seam or deposit.
+or in any way associated with any coal seam or   coal   deposit.
+        Public policy.
+        It is hereby declared to be in the public interest to foster, encourage, and promote the
+development, production and utilization of critical minerals and rare earth elements in a manner
+that will prevent waste and allow a greater ultimate recovery of these natural resources, and to
+protect the rights of all owners so that the greatest possible economic recovery of these
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+resources be obtained in the state, to the end that landowners, producers, and the general
+public realize and enjoy the greatest possible good from these vital natural resources. Critical
+minerals and rare earth elements are fundamental to the economy, competitiveness, and
+security of the United States. Many critical minerals and rare earth elements are broadly
+disseminated and can only be recovered when produced as part of another extractive activity of
+a host mineral which for purposes of this chapter is coal. To the maximum extent practicable,
+the critical minerals and rare earth elements needs of the United States should be satisfied by
+the vital natural resources responsibly produced in the United States.   The legislative assembly
+finds it necessary to declare that the mining of coal in this state, and a lease of coal in this state
+whenever granted must include   the right to mine all critical minerals and rare earth elements,
+unless specifically excluded by the lease.
 Jurisdiction of commission.
-The commission has jurisdiction and authority necessary to enforce this chapter. The
-commission may conduct investigations to determine whether facts   exist which justify action by
-the commission. The commission may:
+The commission has jurisdiction and authority necessary to enforce this chapter.   This
+section does not apply to   a   mine   under the jurisdiction and authority of the public service
+commission under chapter 38  -  14.1.   The   commission may conduct investigations to determine
+whether facts exist which justify action by   the commission. The commission may:
 1. Require an operator to:
 a. Furnish a reasonable bond with good and sufficient surety, conditioned upon the
 full compliance with this chapter, and the rules and orders of the commission
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 coal mining permit issued under chapter 38  -  14.1, the bond for the surface coal
 mining permit may be used to satisfy the bond required under this chapter.
 b. File production reports in the manner prescribed by the commission.
-c. Conduct all exploration, development, and production operations in a manner as
-to prevent pollution of freshwater supplies, to provide for the protection of the
-environment and public safety, and to ensure the optimum recovery of the
-mineral resource.
-d. Reclaim all land distributed by operations required by this chapter to a condition
+c. Conduct   all exploration, development, and production operations  an extraction
+process   in a manner as   to prevent pollution of freshwater supplies  ,   and   to provide
+Page No. 3 25.1038.01002
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+for the protection of the   environment and public safety  , and to ensure the
+optimum recovery of the   mineral resource  .
+              d.    Reclaim all land distributed by operations required by this chapter to a condition
 consistent with prior land use and productive capacity.
 2. Regulate the the drilling and abandonment of exploration test holes and producing
 wells and all other exploration, development, production, and reclamation operations.
-Page No. 2 25.1038.01000
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-3. Adopt and enforce rules and orders to effectuate this chapter, including rules requiring
+      3.    Adopt and enforce rules and orders to effectuate this chapter, including rules requiring
 an operator under permit with the commission to provide to the state geologist
 reasonable amounts of data collected during the extraction process for critical
 minerals or rare earth elements, and data necessary to evaluate the ongoing attributes
 of critical mineral or rare earth extraction in the state.
-4. Inspect all exploration, development, and production sites. The commission must have
-access to all exploration, development, or production installations for purposes of
-inspection and may require the operator's aid if necessary.
-5. At the request of an operator, approve the commingling of production for any
-extraction facility on land with diverse ownership. The commission shall establish a
-method to measure production from each parcel of land with diverse ownership.
+4.  3.  Inspect all   exploration, development, and production sites  processing facilities  . The
+commission must have   access to all   exploration, development, or production
+installations  processing facilities   for purposes of   inspection and may require the
+operator's aid if necessary   and requested  .
+5.  4.  At the request of an operator, approve the commingling of production for any
+extraction facility  processing facility   on land with diverse ownership. The commission
+shall establish a   method to measure production from each parcel of land with diverse
+ownership.
 Permit required.
-1. A person may not commence an operation for the exploration, development, or
-production of critical minerals or rare earth elements without first obtaining a permit
-from the commission and paying the permit fee set by the commission.
-2. An operator may obtain a permit in conjunction with a permit issued under chapter
-38  -  14.1.
+1. A person may not commence   an   operation   for  of a processing facility or   the
+exploration, development, or   production of critical minerals or rare earth elements
+without first obtaining a permit   from the commission and paying the permit fee set by
+the commission.
+2. An operator may obtain a permit in conjunction with a permit issued  This section does
+not apply to a mine under the jurisdiction and authority of the public service
+commission   under chapter 38  -  14.1.
 3. An operator shall pay any applicable owners, according to each owner's respective
 undivided ownership within the applicable permit area, a royalty of two and one  -  half
 percent of the net profits from all critical minerals and rare earth elements mined,
-removed, and sold during a coal mining operation. For purposes of this section, "net
-profits" means the gross receipts received by an operator from any sale of critical
-minerals or rare earth elements less costs incurred or expenditures attributed,
-including any expenditures related to the extraction, processing, milling, smelting,
-refining, and transportation of the critical minerals or rare earth elements.
-4. This section does not apply to any net profits, costs incurred, or expenditures relating
+removed, and sold during   a coal mining operation  the extraction   process  . For purposes
+Page No. 4 25.1038.01002
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+of this section, "net   profits" means the gross receipts received by an operator from any
+sale of critical   minerals or rare earth elements less costs incurred or expenditures
+attributed,   only   including any expenditures related to the extraction, processing,
+milling, smelting,   refining, and transportation of the critical minerals or rare earth
+elements.
+      4.        This section does not apply to any net profits, costs incurred, or expenditures relating
 the extraction, processing, milling, smelting, refining, and transportation of coal.
 Procedure.
 1. The adoption of rules or or the issuance of orders by the commission under this
-chapter must be in accordance with the provisions of chapter 49  -  22 governing the
-procedure in the siting of energy conversion and transmission facilities.
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+chapter must be in accordance with the provisions of chapter   49  -  22  3  8  -  08   governing
+the   procedure in the   siting of energy conversion and transmission
+facilities  administration of the   Oil and Gas Conservation Act  .
 2. An operator may elect to use the administrative procedures under chapter 38  -  14.1 for
 the purpose of obtaining a permit under this chapter in conjunction with a surface coal
-mining permit.
+mining permit  A surface coal mine permit must be issued under chapter 38  -  14.1  .
 3.  If an emergency is found to exist by the commission which in the judgment of the
 commission requires the making, revoking, changing, amending, modifying, altering,
 enlarging, renewal, or extension of a rule or order without first having a hearing, an
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 notice and hearing with respect to the subject matter of the emergency rule or order
 becomes effective, whichever occurs first.
 Penalty - Revocation - Provisions applicable.
-Sections 49  -  22  -  20 and 49  -  22  -  21 are applicable to the provisions of this chapter and to the
-rules and orders of the commission adopted under this chapter.
-SECTION 2. AMENDMENT. Section 47-10-24 of the North Dakota Century Code is
+Sections   49  -  22  -  20  38  -  08  -  16   and   49  -  22  -  21  38  -  08  -  17   are applicable to the provisions of this
+chapter and to the   rules and orders of the commission adopted under this chapter.
+SECTION 2. AMENDMENT. Section 38-12-02 of the North Dakota Century Code is
+amended and reenacted as follows:
+Page No. 5 25.1038.01002
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+38-12-02. Jurisdiction of commission.
+The commission has jurisdiction and authority over all persons and property, public and
+private, necessary to enforce effectively the provisions of this chapter. Subject to the provisions
+of section 38-08-21, the director of mineral resources shall act as a supervisor charged with the
+duty of enforcing the regulations and orders of the commission applicable to the subsurface
+mineral resources of this state and the provisions of this chapter. The commission has authority
+to make such investigations as it deems proper to determine whether facts exist which justify
+action by the commission. The commission acting through the director of mineral resources has
+the authority:
+1. To require:
+a. The furnishing of a reasonable bond with good and sufficient surety, conditioned
+upon the full compliance with the provisions of this chapter, and the rules and
+orders of the commission prescribed to govern the exploration, development, and
+production of subsurface minerals on state and private lands within the state of
+North Dakota. The person required to furnish the bond may elect to deposit a
+collateral bond, self-bond, cash, or any alternative form of security approved by
+the commission, or combination thereof, by which a permittee assures faithful
+performance of all requirements of this chapter and the rules and orders of the
+industrial commission.
+b. The delivery, free of charge, to the state geologist of the basic exploration data
+collected by the operator, within thirty days of field collection of such data. This
+data must include:
+(1) Sample cuts, core chips, or whole cores.
+(2) Sample logs, radioactivity logs, resistivity logs, or other types of electrical or
+mechanical logs.
+(3) Elevation and location information on the data collection points.
+(4) Other pertinent information as may be requested by the state geologist.
+The data so submitted is confidential for a period of one year when so requested
+by the operator and such period may be further extended upon approval by the
+commission.
+Page No. 6 25.1038.01002
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+c. The filing of monthly production reports in the manner prescribed by the
+commission and any other reports deemed necessary by the commission.
+d. The conducting of all exploration, development, and production operations in
+such a manner as to prevent pollution of freshwater supplies, to provide for the
+protection of the environment and public safety, and to ensure the optimum
+recovery of the mineral resource.
+e. The reclamation of all land disturbed by operations regulated by this chapter to a
+condition consistent with prior land use and productive capacity.
+2. To regulate the drilling and abandonment of exploration test holes and producing wells
+and all other exploration, development, production, and reclamation operations.
+3. To promulgate and to enforce rules, regulations, and orders to effectuate the purposes
+and the intent of this chapter.
+4. To inspect all exploration, development, and production sites. For the purposes of this
+subsection, the director of mineral resources or the director's representative shall have
+access to all exploration, development, or production installations for purposes of
+inspection and shall have the authority to require the operator's aid if it is necessary
+and is requested.
+      5.    To regulate the exploration of critical minerals embedded, commingled, included,
+contained within, or in any way associated with a coal seam or coal deposit located
+outside of any surface coal mine permit boundary approved by the public service
+commission.
+SECTION 3. AMENDMENT. Section 47-10-24 of the North Dakota Century Code is
 amended and reenacted as follows:
 47-10-24. Description and definition of minerals in leases and conveyances.
 1. All conveyances of mineral rights or royalties in real property in this state, excluding
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 deed, grant, or conveyance, and their compounds and byproducts, but shallmay not
 be construed to grant or convey to the grantee any interest in any gravel, clay, or
 scoria unless specifically included by name in the deed, grant, or conveyance.
-No2. Except as provided in subsection 3 regarding a lease for coal, a lease of mineral rights
+No
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+2. Except as provided in subsection 3 regarding a lease for coal, a lease of mineral rights
 in this state shallmay not be construed as passing any interest to any minerals except
 those minerals specifically included and set forth by name in the lease. For the
 purposes of this paragraphsection, the naming of either a specific metalliferous
 element, or nonmetalliferous element, and if so stated in lease, shall beis deemed to
 include all of its compounds and byproducts, and in the case of oil and gas, all
 associated hydrocarbons produced in a liquid or gaseous form so named shallmust be
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 deemed to be included in the mineral named. TheExcept as provided in subsection     3
-regarding a lease for coal, the use of the words "all other minerals" or similar words of
+regarding a lease for coal, the   use of the words "all other minerals" or similar words of
 an all-inclusive nature in any lease shallmay not be construed as leasing any minerals
 except those minerals specifically named in the lease and their compounds and
 byproducts.
-3. As provided under section     1 of this Act, a lease of coal in this state when granted is
-deemed to include all critical minerals and rare earth elements embedded,
+3. As provided under section     1 of this Act, a lease of coal in this state   when  whenever
+granted is   deemed to include all critical minerals and rare earth elements embedded,
 commingled, included, contained within, or in any way associated with any coal seam
-or deposit, unless specifically excluded from the lease of coal.
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+or   coal   deposit, unless specifically excluded from the lease of coal.
+SECTION 4. EMERGENCY. This Act is declared to be an emergency measure.
+Page No. 8 25.1038.01002
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