(a) Activities are exempt from the requirements of the Act if all of the following are satisfied:
  (1) The cumulative production of coal extracted from the mining area determined annually as described in this paragraph does not exceed 16 2/3% of the total cumulative production of coal and other minerals removed during such period for purposes of bona fide sale or reasonable commercial use.
  (2) Coal is produced from a geological stratum lying above or immediately below the deepest stratum from which other minerals are extracted for purposes of bona fide sale or reasonable commercial use.
  (3) The cumulative revenue derived from the coal extracted from the mining area determined annually shall not exceed 50% of the total cumulative revenue derived from the coal and other minerals removed for purposes of bona fide sale or reasonable commercial use. If the coal extracted or the minerals removed are used by the operator or transferred to a related entity for use instead of being sold in a bona fide sale, then the fair market value of the coal or other minerals shall be calculated at the time of use or transfer and shall be considered rather than revenue.
(b) Persons seeking or that have obtained an exemption from the requirements of the Act shall comply with the following:
  (1) Each other mineral upon which an exemption under §§12.25-12.28, this section, and §§12.30-12.33 of this title (relating to Exemption for Coal Extraction Incidental to the Extraction of Other Minerals) is based must be a commercially valuable mineral for which a market exists or which is mined in bona fide anticipation that a market will exist for the mineral in the reasonably foreseeable future, not to exceed 12 months from the end of the current period for which cumulative production is calculated. A legally binding agreement for the future sale of other minerals is sufficient to demonstrate the above standard.
  (2) If either coal or other minerals are transferred or sold by the operator to a related entity for its use or sale, the transaction must be made for legitimate business purposes.

Source Note: The provisions of this §12.29 adopted to be effective November 4, 1997, 22 TexReg 10640.