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(1)
(a) Except as otherwise expressly provided by law, coal and mineral deposits in state-owned lands are reserved to the state. Each certificate of sale and patent issued shall contain such a reservation.
(b) The purchaser of any lands belonging to the state:
(i) acquires no right, title, or interest in coal or mineral deposits; and
(ii) is subject to the conditions and limitations prescribed by law providing for the state and any person authorized by it to:
(A) prospect or mine;
(B) remove the deposits; and
(C) occupy and use as much of the surface of the lands as may be required for any purpose reasonably incident to the mining and removal of the deposits.
(c) Improved farm lands acquired by the state through foreclosure proceedings or conveyed to the state by deed in satisfaction of farm loan mortgages may be sold by the state without mineral reservations.
(d) Coal and mineral deposits in state-owned lands may not be sold but may be leased on a rental and royalty basis.
(2) Except as otherwise prohibited by the Jones Act of January 25, 1927, 43 U.S.C. Sections 870-871, mineral interests in state-owned lands may be exchanged for mineral interests of comparable value or otherwise disposed of, if their retention would create a liability exceeding their value.
(3)
(a) Salts and other minerals in the waters of navigable lakes and streams are reserved to the state and may be sold by the division only upon a royalty basis.
(b) A contract for the recovery of salts or minerals from navigable waters shall be subject to the use of the waters for public purposes.
(c) Before a contract for the recovery of salts or minerals from navigable waters is executed, the applicant shall provide evidence that:
(i) an application for the appropriation of water for that purpose has been filed with the state engineer; and
(ii) the application is pending or accepted in that office.
(4) Common varieties of sand, gravel, and cinders are not considered to be minerals under this section. Common varieties do not include deposits which are valuable because the deposit contains other materials giving it distinct and special value.