(a) Lands and minerals subject to prospecting. See §10.1 of this title (relating to Definitions; Exploration and Development Guide) to determine which lands and minerals are subject to prospect permit procedures. Generally, minerals other than coal, lignite, sulphur, salt, and potash, on PSF fee lands and land trade lands are subject to prospecting under this section.
(b) If the commissioner determines that a certain mineral is present on a state tract subject to prospect, and that it is in the best interest of the PSF to issue a prospect permit to the highest and best bidder pursuant to a competitive bidding process, the commissioner shall offer the tract for prospect in accordance with §10.4(c), (d) and (e) of this title pertaining to the procedure for competitive lease sales.
(c) Application requirements and procedures.
  (1) Any person, firm, or corporation desiring to apply for a prospect permit shall make written application upon the form prescribed by the commissioner and furnished by the GLO. The application to prospect shall include:
    (A) a description of the tract of land which identifies it by the section number, part of section or survey to be prospected, township number, and/or certificate number, if applicable, survey name, block number, number of acres to be prospected, and county or counties in which the land lies and, if land trade lands, the name and address of surface owner of record in the tax assessor's office; and
    (B) the name, address, phone number, and taxpayer ID number of the applicant. If the applicant is a corporation, the corporate name, address, phone number, Texas Comptroller's taxpayer ID number, and the name of the officer authorized to execute applications for permits and leases.
  (2) The application to prospect shall be for an area not in excess of 640 acres with a 10% tolerance for tracts, sections, and surveys that contain more than 640 acres.
  (3) The application to prospect may be for a part of a section if the part is described by field notes of record in the GLO or if the part can accurately be described as a part of the section such as the NE/4.
  (4) The application to prospect shall be accompanied by the filing fee prescribed by §3.31 of this title (relating to Fees) and, except as otherwise provided in §10.5(g)(7) of this title (relating to Mining Leases on Relinquishment Act Lands) the first year's rental payment of not less than $1.00 per acre.
  (5) Within 10 days of receipt of an application for permit on lands whose surface is owned or leased by TPWD or is subject to a conservation easement in favor of TPWD, the GLO shall notify the executive director of the TPWD that an application for permit has been received.
  (6) Permits or immediate lease applications issued under §10.3(b)(1) of this title (relating to Mining Leases on Properties Subject to Prospect) will be considered on the basis of the order in which applications to prospect are received unless the commissioner determines that it is in the best interest of the PSF to do otherwise. An application will be determined to be received on the date and time receipt is acknowledged by the staff of the GLO.
  (7) If an application to prospect is received for a tract of land encumbered by a previously received application or by a valid prospect permit, the application may be rejected. If so, the applicant will be notified and all monies tendered will be refunded.
  (8) An applicant may request that the application to prospect be withdrawn. If the request is received prior to processing of the prospect permit, all monies tendered will be refunded.
  (9) An applicant may be requested to supplement the application with information in order that the land office may determine whether issuance of the permit will be in the best interest of the PSF.
(d) Prospect permit issuance and requirements.
  (1) After the application requirements have been satisfied, a prospect permit, if granted, will be issued on a form prescribed and furnished by the GLO, unless an immediate lease is approved (See §10.3(b)(1) of this title), in which case no permit will be issued.
  (2) The prospect permit will be for a term of up to one year from the date of application and, will require an advance annual rental payment of not less than $1.00 per acre.
  (3) On the same day a permit is issued under this section on land whose surface is owned or leased by TPWD or is subject to a conservation easement in favor of TPWD, the GLO will notify TPWD of the issuance of the permit. The permit issued on such land will state that the surface of such land is owned or leased by TPWD or is subject to a conservation easement in favor of TPWD. Such permit will also state the name of the TPWD park or area manager responsible for the surface of such land.
  (4) On land trade lands, the GLO will notify the surface owner that a permit has been issued if the surface owner requests such notice in writing by furnishing the GLO with a current mailing address and a legal description of each tract on which he desires such notice. Notice will also be sent to the surface owner at the address supplied on the application form. Failure to receive notice will not affect the validity of a permit issued under this section.
(e) Prospect permit renewal.
  (1) Permittee may request a renewal of a permit by tendering the appropriate rental payment and filing fee before the expiration date of the current permit. Prospect permit renewals, if granted, will be issued on a form prescribed and furnished by the GLO and shall extend the term of the permit for up to one year from the expiration date.
  (2) Subject to the discretion of the commissioner, a prospect permit may be renewed up to and including four times, allowing the holder to retain the permit for five consecutive periods from the date of issuance of the original prospect permit. At the time a permittee requests renewal of a permit, a determination of whether the permittee has exhibited good faith in prospecting, whether the permittee has complied with all GLO rules and regulations and whether issuance of the permit is in the best interest of the PSF will be considered in the decision to grant or deny a renewal.
  (3) If the holder of a prospect permit allows the permit to expire without filing for renewal, a new application must be submitted. Priority of competing applications are governed by subsection (c)(7) of this section.
(f) Assignments and releases. Prospect permits may be assigned or released in accordance with §10.8 of this title (relating to Assignments, Releases, Reports, Royalty Payments, Inspections, Forfeitures, and Reinstatements). The assignment or release must be filed with GLO and must be accompanied by the filing fee prescribed by §3.31 of this title (relating to Fees).
(g) Reports and inspections.
  (1) Permittee must comply with all requirements of §10.7 of this title (relating to Conduct of Exploration and Mining Operations) and §10.8 of this title (relating to Assignments, Releases, Reports, Royalty Payments, Inspections, Forfeitures, and Reinstatements).
  (2) All prospecting operations shall be subject at any time to inspection by the commissioner or an authorized representative. Information or data pertaining to prospecting operations shall be furnished to the commissioner or an authorized representative upon request.

Source Note: The provisions of this §10.2 adopted to be effective March 22, 1989, 14 TexReg 1280; amended to be effective May 26, 1992, 17 TexReg 3473; amended to be effective July 11, 2004, 29 TexReg 6308; amended to be effective December 10, 2009, 34 TexReg 8776