The Attorney General of Texas 

March 23, 1983 

JIM MATTOX 

Attorney General 

Supreme Court Building 

P. 0. BOX 12546 

Austin. TX. 78711.2548 

5121475.2501 

~46.~ 910/874.1367 

Telecopier 512/475-0266 

1607 Main St., Suite 1400 

Dallas. TX. 75201.4709 

2141742.8944 

4824 Alberta Ave., Suite 160 

El Paso. TX. 79905-2793 

9151533.3484 

T- 

,c20 Dallas Ave., suite 202 

Houston, TX. 77002.6986 

7131650-0666 

806 Broadway, Suite 312 

Lubbock, TX. 79401.3479 

8061747.5238 

4309 N. Tenth, Suite 6 

MCAII~~, TX. 78501.1685 

5121682.4547 

200 Main Plaza. Suite 400 

~3x7 Antonio. TX. 78205.2797 

5121225.4191 

An Equal Opportunltyl 

Affirmative Action Employer 

Honorable Joe C. Hanna 

Chairman 

Energy Resources Committee 

Texas House of Representatives 

P. 0. Box 2910, Capitol Station 

Austin, Texas 70769 

Opinion No. JM-18 

Re: Whether House Bill No. 226 

relating to reporting ownership 

of mineral interests severed 

from surface estate and to 

proceedings for abandonment of 

unreported mineral interests 

violates article I, section 19 

of the Texas Constitution 

Dear Representative Hanna: 

You have requested our opinion regarding the constitutionality of 

House Bill No. 226, presently pending before the Sixty-eighth 

Legislature. The bill provides: 

Section 1. Policy. The purpose of this Act is 

to assure that productive use of mineral reserves 

and natural resources will not be prevented by the 

existence of abandoned mineral interests. 

Section 2. Definitions. In this Act: 

(1) 'Abandonment' means actual and 

voluntary relinquishment of an interest in 

minerals that is intended to be permanent, by 

the owner of the interest. 

(2) 'Mineral interest' means an interest in 

minerals in place that is severed from the 

ownership of an interest in the surface, and 

includes a fee interest. whether conditional or 

not, executive right, royalty interest, life 

estate, estate for years, remainder, reverter, 

possibility of reverter, leasehold, or any 

other present possessory interest, future 

interest, equitable interest, or concurrent 

ownership interest. 

p. 76 
Honorable Joe C. Hanna - Page 2 (JM-18) 

(3) 'Interest in the surface' means a fee 

interest, whether conditional or not, from 

which a mineral interest has been severed. 

(4) 'Person' means a natural person, 

corporation, business trust, estate, trust, 

partnership, or association. 

(5) 'Surface owner' means a person who has 

concurrent or sole legal right or title, except 

the holder of a leasehold or an estate for 

years, to a present interest in real property 

from which a mineral interest has been severed. 

Section 3. Report of Ownership of Mineral 

Interest. (a) A person who owns a mineral 

interest on September 1, 1983. must file a report 

with the county clerk of each county in which part 

of the interest is located before September 1, 

1984. A person who acquires or creates a mineral 

interest after September 1, 1983, must file a 

report with the county clerk of each county in 

which part of the interest is located before the 

first anniversary of the date the person acquires 

or creates the interest. 

(b) The report must be subscribed and 

acknowledged in the same manner as is required for 

a deed and must contain: 

(1) the name and address of the person 

claiming the interest; 

(2) the date the person acquired or created 

the interest; 

(3) a legal description of the interest; and 

(4) a general description of the nature of the 

interest. 

Section 4. Recording of Reports. (a) A 

county clerk may charge the same filing fee for 

recording a report under this Act as is authorized 

for recording a deed. 

(b) Each county clerk shall maintain a public 

record of reports filed under this Act separately 

from other records in the clerk's office. The 

p. 77 
Honorable Joe C. Hanna - Page 3 (JM-18) 

clerk shall keep the record in the same manner as 

is required for deeds. 

Section 5. Effect of Failure to Report. An 

owner of a mineral interest who does not file the 

report required by this Act is presumed to have 

abandoned the interest, and title to the interest 

is presumed to belong to the surface owner. 

Section 6. Judicial Proceeding. A surface 

owner may file a petition for declaratory judgment 

in the district court of the county in which the 

real property is located, requesting the court to 

declare a mineral interest abandoned. 

Section 7. Notice of Proceeding. In an action 

for declaratory judgment under this Act, citation 

shall be issued to the last known owner or owners 

of the abandoned mineral interest as shown by the 

official records of the county clerk of the county 

where the property is located and shall be served 

in accordance with the Texas Rules of Civil 

Procedure. 

Section 8. Evidence of Nonabandonment. A 

mineral interest is not abandoned if the owner of 

the interest appears at the abandonment proceeding 

or if the owner files the report required by this 

Act before the court renders a judgment declaring 

the interest abandoned. 

Section 9. Vesting of Title. (a) If a court 

declares that a mineral interest is abandoned, 

title to the interest vests in the current owner 

or owners of the surface interest from which it 

was severed, with each owner taking the same share 

and the same type of ownership in the mineral 

interest as the person has in the surface. 

(b) A person who acquires title to a mineral 

interest in an abandonment proceeding under this 

Act may record in the same manner as a deed a 

certified copy of the judgment as evidence of 

title. 

Section 10. Applicability. This Act does not 

apply to a mineral interest owned by a 

governmental body or agency. 

p. 78 
Honorable Joe C. Hanna - Page 4 (JM-18) 

For the following reasons. we conclude that House Bill No. 226 is 

unconstitutional under the due process clauses of the United States 

and Texas Constitutions. We do not reach the question of whether the 

bill is unconstitutional in other respects. 

The fourteenth amendment to the United States Constitution 

provides that no state may "deprive any person of life, liberty, or 

property without due process of law." Article I, section 19 of the 

Texas Constitution provides that no citizen of Texas shall be deprived 

of life. libertv. or orooertv "exceut bv due course of the law of the 

land*” . . - - . . - . These guarantees are essentially synonymous. Mellinger v. 

City of Houston, 3 S.W. 249, 252 (Tex. 1887). 

Courts utilize a two-step analysis to determine whether a person 

has been deprived of life, liberty, or property without due process of 

law. First, the court decides whether a constitutionally cognizable 

life, liberty, or property interest exists. If it finds that such an 

interest does exist, it then decides what procedures constitute "due 

process of law" under the circumstances and whether those procedures 

have been followed. Ingraham v. Wright, 430 U.S. 651, 675 (1977); 

Sullivan v. University Interscholastic League, 599 S.W.2d 860, 863 

(Tex. Civ. App. - Austin 1980). aff'd in part, rev'd in part, 616 

S.W.2d 170 (Tex. 1981). 

In Texas, due process attaches to vested property rights in 

mineral estates. Brown v. Humble Oil and Refining Company, 83 S.W.2d 

935 (Tex. 1935). Therefore, our due process analysis of House Bill 

No. 226 must focus on the second step in the two-step process. The 

requirements of both procedural and substantive due process must be 

satisfied. Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 140 (Tex. 1977). 

At a minimum, procedural due process requires that a deprivation 

of life, liberty, or property by adjudication be preceded by notice 

and opportunity for a hearing appropriate to the nature of the case. 

Mullane v. Central Hanover Bank & Trust Company, 339 U.S. 306, 314 

(1950). "Due course of the law of the land" requires a law that hears 

before it condemns, oroceeds . uuon inauirv. I - and renders iudement onlv 

after trial. Union Central Life Insurance Company v. -Ch&nin&, 2k 

S.W. 982, 984 (Tex. 1894). The right to notice and sn opportunity to 

be heard must be granted at a meaningful time and in a meaningful 

manner. Fuentes v. Shevin, 407 U.S. 67, 80 (1972). The notice must 

be reasonably calculated to apprise interested parties of the pendency 

of the action and afford them an opportunity to present their 

objections. The notice must also afford a reasonable time for 

preparation. Constitutional requirements, however, are satisfied if, 

with due regard for the practicalities and peculiarities of the case, 

these conditions sre reasonably met. Mullane, supra, at 313-18. 

p. 79 
Honorable Joe C. Hanna - Page 5 (JM-18) 

Section 7 of House Bill No. 226 provides for notice to certain 

mineral interest owners that a declaratory judgment proceeding has 

been instituted by the owner of the surface estate to have the court 

declare the mineral interest abandoned. The notice is to be issued to 

the last known owner or owners of the mineral interest as shown by the 

official records of the county clerk where the property is located and 

is to be served in accordance with the Texas Rules of Civil Procedure. 

On the other hand, the notice procedure fails to provide for service 

of citation to known owners not of record and to unknown owners. 

- 

In Texaco, Inc. v. Short, 454 U.S. 516 (1982), the United States 

Supreme Court dealt with an Indiana statute which was somewhat similar 

to House Bill No. 226. This statute, the Indiana Dormant Mineral 

Interests Act, provided that a severed mineral interest not used for a 

period of twenty years automatically lapsed and reverted to the owners 

of the surface estate unless the mineral interest owner had filed a 

statement of claim in the local county recorder's office. The statute 

contained a two-year grace period in which owners of mineral interests 

subject to lapse might preserve those interests by filing the 

statement of claim. The purpose of the statute, as articulated by the 

Indiana Supreme Court, was to remove impediments to the development of 

mineral interests that arose because of the existence of unused, 

stale, and abandoned mineral interests. 

One of the arguments made in Short was that the statute's notice 

provisions were constitutionally infirm because they did not require 

that any specific notice be given to a mineral owner prior to a 

statutory lapse of a mineral estate. Relying on Mullane v. Central 

Hanover Bank and Trust Company, surpa, the appellants contended that 

the lack of adequate notice deprived them of due process of law. The 

Supreme Court disagreed, however, stating: 

The reasoning in Mullane is applicable to a 

judicial proceeding brought to determine whether a 

lapse of a mineral estate did or did not occur, 

but not to the self-executing feature of the 

MineralLapse Act. The due process standards of 

Mullane apply to an 'adjudication' that is 'to be 

accorded finality.' (Emphasis added). 

454 U.S. at 535. The Court concluded that because the lapse of a 

mineral estate resulted, not from a judicial proceeding, but from the 

application of a self-executing statute, the existence of which 

everyone was presumed to be aware, the notice provisions of the 

statute were not constitutionally deficient. 

,p 

The feature that distinguishes House Bill No. 226 from the 

Indiana statute is that, under the former, a mineral interest is lost 

& after a judicial proceeding. Even if one concedes that everyone 

p. 80 
Honorable Joe C. Hanna - Page 6 (JM-18) 

would, after House Bill No. 226 becomes effective, be presumed to be 

aware of its existence, one cannot conclude that everyone is presumed 

to be aware of the pendency of a judicial proceeding initiated under 

it. On the contrary, Mullane establishes that those who may be 

affected by the outcome of such a proceeding must be given such notice 

as is reasonably calculated to inform them of its pendency. 

We do not believe that the notice provisions of House Bill No. 

226 are reasonably calculated to apprise everyone who might be 

affected by a suit instituted thereunder of the pendency of that suit. 

As noted, these provisions fail to provide for any kind of notice, 

even notice by publication, to known owners not of record and to 

unknown owners. To take away the mineral interests of owners who are 

not served with any citation whatsoever would, in our opinion, clearly 

deprive those owners of due process of law. 

Although the lack of adequate notice provisions is sufficient to 

invalidate House Bill No. 226 on procedural grounds, we believe that 

the bill also violates substantive due process. In determining 

whether substantive due process requirements are met, courts balance 

the gain to the public welfare resulting from the legislation against 

the severity of its effect on personal and property rights. A law 

violates substantive due process when it is arbitrary or unreasonable, 

i.e., if the social necessity of the law is not a sufficient 

justification for restricting the rights involved. In the Interest of 

B-M-N, 570 S.W.2d 493, 503 (Tex. Civ. App. - Texarkana 1978, no writ). 

In Texaco, Inc. v. Short, supra, the United States Supreme Court 

held that the Indiana act met the constitutional requirements of due 

process. In reaching its conclusion, the Supreme Court stated: 

[J]ust as a State may create a property interest 

that is entitled to constitutional protection, the 

State has the power to condition the permanent 

retention of that property right on the 

performance of reasonable conditions that indicate 

a present intention to retain the interest. 

Id., at 526. The Court concluded that Indiana had not exercised this 

power in an arbitrary manner because each of the actions that the 

state required the mineral interest owner to take in order to avoid 

abandonment of his interest furthered a legitimate state goal. If the 

owner engaged in production, or collected rents or royalties from 

another person engaged in production. his interest was protected; this 

furthered the state's goal of developing mineral interests. If the 

mineral interest owner paid taxes, his interest was protected; this 

furthered the fiscal interests of the state. If the mineral interest 

owner filed a statement of claim, his interest was protected; this 

furthered the state's goal of developing mineral interests by 

p. 81 
Honorable Joe C. Hanna - Page 7 (~~-18) 

identifying and locating the owners of the mineral interests. "The 

State surely has the power to condition the ownership of property on 

compliance with conditions that impose such a slight burden on the 

owner while providing such clear benefits to the State." Id., at 

529-30. 

In our opinion, House Bill No. 226 is clearly distinguishable 

from the Indiana act. Under the latter, non-use for twenty years 

raises an irrebuttable presumption of abandonment, while House Bill 

No. 226 allows only a one-year period in which the mineral interest 

owner must file a statement of claim or suffer the institution of a 

judicial proceeding on the issue of abandonment can be instituted. It 

is conceivable that a court, when faced with a substantive due process 

challenge to House Bill No. 226, could rely on this time period 

difference to distinguish the holding in Short. More importantly, 

however, the two acts are distinguishable in terms of the conclusions 

that they permit. Under the Indiana act, it was the lack of 9 use 

of a mineral interest for a period of 20 years that resulted in the 

irrebuttable presumption of abandonment of the interest. Even if 

there were such lack of use, the owner of the interest could still 

retain it by filing a statement of claim. Under House Bill No. 226, 

on the other hand, it is only the failure to file a required report 

that creates the presumption that the interest has been abandoned. 

Whereas the Court in Short found, in effect, that it was not 

unreasonable to conclude that an owner of a mineral interest had 

abandoned that interest where he did nothing for a twenty-year period 

to indicate his intent to retain it, we believe that our courts would 

be loathe to find intent to abandon where the only evidence of such 

intent is the failure to file a particular report. 

The legislature may provide, as a rule of evidence for a judicial 

proceeding, that certain facts will raise a presumption of other 

facts, and such presumptions do not deny due process if there is a 

rational evidentiary relationship between the proven facts and those 

presumed. See Mobile, Jackson & Kansas City Railroad Company v. 

Turnipseed, 219 U.S. 35 (1910) (injury to persons by operation of 

railroad is prima facie evidence of negligence). Clem v. Evans, 291 

S.W. 871, 872 (Tex. Comm'n App. 1927, holding adopted) (presumption 

that promises to do future acts, made as inducement to enter into 

contract and not performed within reasonable time, were fraudulently 

made). In our opinion, a presumption of abandonment cannot rationally 

arise from the fact that a property owner fails to file a report 

within a one year period. Such a presumption disregards other 

evidence relevant to abandonment, such as payment of taxes or efforts 

to produce minerals occurring shortly before the one year period. 

Compare Attorney General Opinion M-821 (1971) (presumption of 

abandonment of mineral estate arises from failure for twenty years to 

pay taxes, transfer estate, or explore for or produce minerals). 

p. 82 
. . 

Honorable Joe C. Hanna - Page 8 (JM-18) 

In Lobley v. Gilbert, 236 S.W.2d 121 (Tex. 1951). the Texas 

Supreme Court stated: 

A presumption is a rule which 'draws a 

particular inference as to the existence of one 

fact, not actually known, arising from its usual 

connection with other particular facts which are 

known or proved.'. . . It is founded upon and 

must conform to the commonly accepted experiences 

of mankind. . . . It must be based upon an 

established fact and cannot rest upon a presumed 

fact. (Emphasis added). (Citations omitted). 

236 S.W.2d at 123, quoted in Beck v. Sheppard, 566 S.W.2d 569, 571 

(Tex. 1978). We do not believe that a valid presumption of intent to 

abandon a mineral interest may arise under this test where the only 

fact giving rise to the presumption is the failure to file a 

particular document. 

We therefore conclude that House Bill No. 226 is unconstitutional 

on substantive due process grounds. We believe, however, that there 

are methods of dealing with the problem of abandoned mineral interests 

which comport with the requirements of the constitution. See 

generally Texaco, Inc. v. Short, 454 U.S. 516 (1982). V.T.C.S. arz 

3272-3289 (escheat statutes). 

In closing, we note that either of these problems is sufficient 

to invalidate House Bill No. 226. Their impact in combination is even 

more offensive to the due process clause. To couple defective notice 

provisions with a defective presumption is. in our opinion, to produce 

too much weight for the scales of justice to withstand. 

SUMMARY 

House Bill No. 226 relating to proceedings for 

abandonment of unreported mineral interests is 

unconstitutional under the due process clauses of 

the United States and Texas Const tutions. 

dzh 

JIM MATTOX 

Attorney General of Texas 

TOM GREEN 

First Assistant Attorney General 

p. 83 
. 

Honorable Joe C. Hanna - Page 9 (JM-18) 

DAVID R. RICHARDS 

Executive Assistant Attorney General 

Prepared by Jon Bible 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Susan L. Garrison, Chairman 

Jon Bible 

Carl Glaze 

Jim Moellinger 

Bruce Youngblood 

p. 84