1. (a) Permanent Improvements.

   1. (1) On permanent school fund land leased for grazing or agricultural purposes, the commissioner of the General Land Office may:

      1. (A) grant money from a special account funded from surface damage fees to the lessee to make permanent improvements to the land; or
      2. (B) allow the lessee credit against the rent for all or part of the cost of making permanent improvements to the land.
   2. (2) The amount of a grant under this subsection may not exceed the amount by which the improvement increases the value of the land, as determined by land office appraisers.
   3. (3) Permanent improvements are in the nature of a fixture or an appurtenance to the land, and include conservation or reclamation projects (see subsection (b)(2) of this section). With the exception of the latter, the improvement must become part of the realty rather than being something easily removed. Examples of fixtures include, among other things fences, gates, cattleguards, barns, windmills, water wells, and pipelines, tanks, embankments, terraces, etc. Examples that are not fixtures include deer blinds, trailers, feeders, moveable pumps, generators, and other equipment.

2. (b) Conservation and Reclamation.

   1. (1) The commissioner may grant or expend money from a special account funded from surface damage fees for conservation or reclamation projects on permanent school fund land.
   2. (2) Conservation or reclamation projects are those designed to preserve or increase the quality of land or natural resources by affecting natural conditions. Examples of conservation or reclamation projects include among other things, terracing, erosion control, establishing perennial and other grasses, creation of wildlife habitats, and brush clearing. Examples that are not conservation or reclamation projects include: architectural landscaping, landfills, construction of buildings, fences, etc.
   3. (3) A grant or credit will not be given for conservation or reclamation of land subject to damage by mineral exploration or development where the mineral lessee has the duty to conserve or reclaim the land.

3. (c) Application.

   1. (1) A person desiring a grant or credit must submit a written application to the commissioner. (A person applying to lease the surface estate of permanent school fund land may apply for a grant or credit pending award of the lease.) The application shall include:

      1. (A) a description of the land where the improvement or project will be located, including a map showing the proposed location of the improvement or project;
      2. (B) a detailed description of the improvement or project;

      3. (C) estimates made in cooperation with the General Land Office, of the following:

         1. (i) how the improvement or project will benefit the land;
         2. (ii) the amount in which the improvement or project will increase the value of the land;
         3. (iii) the cost to construct the improvement or complete the project;
         4. (iv) the length of time required to complete the improvement or project; and
         5. (v) a sworn statement by the applicant as to whether he is receiving or has applied for any other credit, reimbursement, or grant for construction of improvements or for conservation or reclamation projects on the land.

   2. (2) In deciding whether to make a grant or allow a credit the commissioner may consider:

      1. (A) whether the improvement or project will enhance the quality, productivity, or manageability of the land to an extent justifying the amount of the grant or credit;
      2. (B) whether the applicant has or should be required to implement or modify soil and water conservation, wildlife management, livestock management, or other plans on the land;
      3. (C) whether the grant or credit applied for is in the best interest of the permanent school fund; and
      4. (D) any other matter which the commissioner considers appropriate in determining the best interests of the permanent school fund.

4. (d) Terms.

   1. (1) All grants and credits will be made on the following terms and conditions:

      1. (A) Any improvement, structure, or other thing placed on the land pursuant to a grant or credit is the property of the permanent school fund.
      2. (B) The recipient must properly maintain all improvements, structures, or other things placed on the land.
      3. (C) No improvement, structures, or other thing placed on the land may be removed, altered or modified without the prior express written consent of the commissioner.
      4. (D) The commissioner may also include whatever additional terms and conditions he considers appropriate or necessary.
   2. (2) The terms of a grant or credit to a lessee shall become part of the original lease.
   3. (3) If, at any time, the recipient fails to comply with this section or the terms of the grant or credit, the commissioner may revoke the grant or credit, forfeit the lease, or both. If the grant or credit is revoked, the recipient must repay any money granted or pay rent for which credit was given. In addition, the recipient is liable for any actual damages to the land or to the improvement.

5. (e) Copies and Inspection.

   1. (1) Before the recipient may receive money or credit against the rent, the recipient must submit to the commissioner copies of all receipts, vouchers, invoices, cancelled checks, and other evidence of the costs of the improvement or project. Upon request, the recipient must also submit copies of documentation for other credit, reimbursement, or grants for improvements or projects on the land.
   2. (2) Except as provided in subsection (f)(2) of this section, a grant may be made or credit given only after the conservation or reclamation plan or construction of the improvement is completed and a land office employee has made an inspection and certified to its satisfactory completion.

6. (f) Payment.

   1. (1) The amount disbursed or credited shall be the lesser of the recipient's actual authorized costs or the amount of the grant or credit previously set by the commissioner, provided that:

      1. (A) no money may be disbursed or credit given for costs covered by other credit or money under this section or received from any other private or public agency, program, or source; and
      2. (B) actual costs are limited to costs of material and services specifically required to construct an improvement or for a conservation and reclamation project, and no money may be disbursed or credit given for administrative costs, overhead, mileage, purchase of tools or equipment, or other incidental expenses.
   2. (2) If construction of the improvement or completion of the plan takes more than one year, money may be disbursed or credit given in installments upon satisfactory completion of each stage of the plan or construction, if payment by this method is necessary and is justified by the increase in value, productivity, or manageability of the land.

Source Note:The provisions of this §13.3 adopted to be effective January 7, 1988, 12 TexReg 4917.