36.25.311    ASSIGNMENTS AND TRANSFERS

(1) A lessee may assign any lease, either in whole or as to subdivisions of land embracing not less than 40 acres covered thereby, to any assignee qualified to be a lessee as provided under the law and these regulations. Such assignment is not, however, binding upon the state until filed with the department, accompanied by the required fees, together with proof of qualifications of the assignee as a lessee, and until the assignment is approved by the department. For the purpose of this rule, any government surveyed lot whether it contains 40 acres or more shall be assignable. The approval of any assignment so filed and supported may not be withheld in any case where the rights or interests of the state in the premises assigned will not, in the judgment of the board, be prejudiced thereby, and the decision is subject to appeal as provided by law. Until such an assign- ment is approved by the department, the lessee of record shall continue fully liable and responsible for all of the requirements and obligations of the lease.

(2) In the case of a partial assignment, i.e., assignment of a full interest in only a portion of the leased premises, the department shall issue a new lease or new leases, with the same expiration date as the original lease for the assigned acreage. A new ledger sheet or sheets shall be prepared and the original lease adjusted accordingly. The original lessee and the assignee(s) assume full liability for their respective leases.

(3) The lessee may assign an undivided, fractional interest in any lease, either as to the whole of the leased premises or as to any portion thereof, by assigning title to the acreage in question to himself and the assignee. The assignment must show the respective shares of interest and may be approved by the director as a transfer of title only without recognition of any assignment of lease obligations and responsibilities.

(4) All other assignments of coal leases or interests therein are subject to approval by the board and are binding upon the state in the discretion of the board.

(5) Assignments involving reservations of overriding royalties or other interests by assignee are approved by the director as a transfer of title only and without recognition of such overriding royalties or interests. Such reservations do not affect the validity of the transfer of title.

(6) An assignment or transfer must be on the form currently approved by the board. Evidence of transfers by operation of law should be in the form of a certified copy of the appropriate court order or decree or similar document, such as letters of administration to personal representatives, decree of distribution, executor's deed or sheriff's deed.

(7) The board may recognize any transfer by operation of law to an unqualified lessee for a period of time no longer than one year and only for the purpose of the further transfer of the interest.

(8) The director shall notify the parties to any assignment or other transfer submitted of approval or non-approval thereof.

History: 77-3-303, MCA; IMP, 77-3-303, MCA; NEW, 1979 MAR p. 734, Eff. 7/12/79; TRANS, 1996 MAR p. 2384.