# Title 38 — Mining and Gas and Oil Production

## Chapter 38-12 — Regulation, Development, and Production of Subsurface Minerals

### § 38-12-01. Definitions.

(Retroactive application - See note)
As used in this chapter, unless the context otherwise requires:
1. "Commission" means the industrial commission of the state of North Dakota.
2. "Critical mineral" means a nonfuel mineral or 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, astatine, barite, bauxite,
beryllium, bismuth, cerium, cesium, chromium, cobalt, erbium, fluorspar, friezium,
gallium, germanium, graphite, hafnium, helium, indium, lithium, magnesium,
manganese, neodymium, niobium, platinum group metals, potash, the rare earth
elements group, rhenium, rubidium, samarium, scandium, stralium, strontium,
tantalum, tellurium, thulium, tin, titanium, tungsten, uranium, vanadium, and zirconium
which are chemically bound, embedded, commingled, included, or contained within a
coal seam or coal deposit.
3. "Extraction facility" means any well or mine or other extractive process operated for
the purpose of recovering subsurface minerals.
4. "Operator" means any person who, duly authorized, is in charge of the development of
a lease or the operation of a producing property.
5. "Owner" means the person who has the right to explore for, develop, and produce
subsurface minerals and to appropriate the subsurface minerals the owner produces
either for the owner or for the owner and others.
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. "Producer" means the owner of an extraction facility which is or has been capable of
producing subsurface minerals.
8. "Rare earth minerals" 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 chemically bound, embedded, commingled, included,
or contained within a coal seam or coal deposit.
9. "Subsurface minerals" means all naturally occurring elements and their compounds,
volcanic ash, precious metals, carbonates, and natural mineral salts of boron,
bromine, calcium, fluorine, iodine, lithium, magnesium, phosphorus, potassium,
sodium, thorium, uranium, and sulfur, and their compounds, but does not include sand
and gravel and rocks crushed for sand and gravel.
### § 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.
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.
### § 38-12-03. Permit required.

It is unlawful to commence operations for the exploration, development, or production of
subsurface minerals without first obtaining a permit from the director of mineral resources, under
such rules and regulations as may be prescribed by the commission and paying to the
commission a fee for each such permit in an amount to be prescribed by the commission.
### § 38-12-04. Procedure.

The administrative procedure involved in the adopting of any rules or regulations or the
issuance of any orders by the commission under the provisions of this chapter must be in
accordance with the provisions of chapter 38-08 governing the procedure in the administration
of the Oil and Gas Conservation Act; provided, however, that in the event an emergency is
found to exist by the commission which in its judgment requires the making, revoking, changing,
amending, modifying, altering, enlarging, renewal, or extension of a rule, regulation, or order
without first having a hearing, such emergency rule, regulation, or order has the same validity as
if a hearing with respect to the same had been held after due notice. The emergency rule,
regulation, or order permitted by this section may remain in force no longer than fifteen days
from its effective date, and in any event, it expires when the rule, regulation, or order made after
due notice and hearing with respect to the subject matter of such emergency rule, regulation, or
order becomes effective.

### § 38-12-05. Penalty - Injunction - Provisions applicable.

The provisions of sections 38-08-16 and 38-08-17 are applicable to the provisions of this
chapter and to the rules, regulations, and orders of the commission promulgated hereunder.
### § 38-12-06. Declaration of policy for critical minerals and rare earth minerals.

(Retroactive application - See note)
1. It is in the public interest of the state of North Dakota, its citizens, and the United
States to encourage, accelerate, and promote the development, production, and
utilization of critical minerals and rare earth minerals in a manner that prevents waste,
allows a greater ultimate recovery of these natural resources, and protects the rights of
owners so the greatest possible economic recovery of these resources may be
obtained in this state and landowners, producers, and the general public may enjoy
the greatest possible good from these resources.
2. The legislative assembly acknowledges the public interest to foster, encourage, and
promote the development, production, and utilization of all natural resources of coal,
and the public interest is served by the preservation of existing coal conversion
facilities, which significantly contribute to the state economy and general public.
3. Development of critical minerals and rare earth minerals also may lead to significant
economic benefits for owners, new jobs in mining, processing, and related industries,
and contributions to the state economy. Many critical minerals and rare earth minerals
are broadly and irregularly disseminated and chemically bound, embedded,
commingled, included, or contained within coal. Certain owners are unable to develop
critical minerals and rare earth minerals because the minerals are contained within the
coal seam or coal deposit, are covered by an existing mining permit, and are subject to
the prior legal rights of the coal producer.
4. As reflected in federal policy, the legislative assembly recognizes critical minerals and
rare earth minerals are fundamental to the economy, competitiveness, and security of
the United States. The United States relies on foreign nations to supply these critical
minerals and rare earth minerals to develop and manufacture medical devices,
information technology, and equipment and technology for national defense, energy
infrastructure, and other critical items. Domestic development and production of critical
minerals and rare earth minerals is inadequate to meet the nation's needs. The United
States must have a reliable, diversified, and affordable supply to drive medical
manufacturing, transportation, agriculture, and defense industries and to sustain
military preparedness, national security, and economic security.
5. This chapter provides potential for coal owners and critical mineral and rare earth
mineral owners to obtain added value from the development of critical minerals and
rare earth minerals extracted from coal. These critical minerals and rare earth minerals
are chemically bound, embedded, commingled, included, or contained within a coal
seam or coal deposit and cannot otherwise be produced on their own without infringing
on the working interests of the coal estate, without first mining the host mineral coal, or
in an economic manner.
6. To the maximum extent practicable, the critical mineral and rare earth mineral 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 all critical minerals and rare earth minerals chemically bound,
embedded, commingled, included, or contained within the coal unless specifically
excluded by the lease. A party is not obligated to mine, remove, or sell critical minerals
or rare earth minerals from coal. The legislative assembly finds that because critical
minerals and rare earth minerals are chemically bound, embedded, commingled,
included, or contained within a coal seam or coal deposit, and are not uniformly
disseminated, production must be commingled and a royalty rate must be applied only
if the minerals are extracted and sold. It is necessary to fulfill the public policy of this
state by clarifying law related to this policy and the development of critical minerals
and rare earth minerals.

7. Critical minerals and rare earth minerals occurring within or associated with coal-
bearing formations, coal seams, or coal combustion residuals are part of the coal
estate for purposes of ownership, leasing, taxation, and development unless expressly
severed by recorded conveyance. To help facilitate the extraction and processing of
critical minerals and rare earth minerals, the parties may amend an existing lease or
agree to new terms for any lease if agreed to by both parties.
8. Coal ash and any coal gasification product, including all minerals, substances,
compounds, byproducts, or elements contained therein which result from the
combustion or gasification of coal in a coal conversion facility are the property of the
owner or operator of the coal conversion facility. The owner or operator of a coal
conversion facility may not be held liable for waste, conversion, destruction, or
damages to any extent arising from the purchase, combustion, gasification, or sale of
any minerals, substances, compounds, byproducts, or elements contained within the
coal, coal ash, or products of coal.
9. For purposes of this section, "coal ash" includes fly ash, bottom ash, and boiler slag.
10. An operator shall pay any applicable mineral owner, according to each mineral owner's
respective undivided ownership of coal mined within the applicable permit area during
a calendar year, a royalty of no less than two and one-half percent of the gross
proceeds from all critical minerals and rare earth minerals mined, removed, and sold
during the extraction process. The royalty must be paid at least annually by March
thirty-first of the following year. For purposes of this section, "gross proceeds" means
the gross receipts received by an operator from any sale of critical minerals or rare
earth minerals which constitutes an arms-length transaction.
