• • • A meetir.g of the S~ate ~ands Commission was called by the

Chairmcm at. 10 o'clock A. M!, April 4, 1941, in the office of the Director or Finance, State Capitol, Sacramento.

Present were:

Absent was:.

George. Killion, Chai-rm.an,. Harry B. Riley, Member.

Ellis E. Patterson, Member.

I-a· a-ct:omanc.e with. ear1ia~- dir·ectio·n of: the Oommissionj notiee was .given to grantees ·ot nine ag:r~emen~ for eaf}ements at Huntington :Se~ch who~e wells would probablt be within 200 tee~ of' t!:te .course of .,:he well prop9sed to be redr~l1~d by the gr~~!3e of Ag~eement for Easement N9. Z90, Huntirigton .. Be~c~ •. the ~ .. ~l.~ McCa:U.en 9orpgration,.. ·The -.Executive Officer reported to the 'Commission ~hat o~~ prot~st in writiug ha4 b.~n :eecei,ved., · t'o w~t.: the protest of Cent~lia OU Company, and J os~ph J. Rl£kind, Esq,., Attorn~y at Law,- repi:ese~t1.ng th~ trustee and others, ~a grantee· in .Agtie-3ment for EasE:lment. ·No. 309, Htintlng:ton- Beae:h.. Thomas ·• :Simmons, Pres::\:4ent ot ~he Bo1$a Chica O,il Corporation ~:ppeareti 'J;J.:pon -'.b:ehalt ·of the lt1. M •. Mc!lallen Gorporat .1n. ·

. · :Mr. Rifkinc;l objected to the a:pp~ovai of: the .proposal :to re• dr~ll i;he well described. in Agreem,ent !qr Easefm;lnt No,,. ·29t;t, Hunti:qgton Beach, upon the g;round tl;a-t; d~age _:would p~~bab-1y r.eS..ti"l.t to ·the· well-.: unde1;1 1.7he jf..xrisdietion or th~ t.rlistee llh~ · he. -repr.ese:atf?d, .. · .· In · suppO.rt or this position., }~. Rif'~d r~ad at le~t~ from ttr~il~t;ript which. he su'Qsequ~tly $tated ·he would .file with thi Commission 1;9r f~rth:er r~f'er~nce~.· ,

.and .at the conciusion or .his state~ent., filed, with the iiommis$i9n ce~tif'ied · ~Qpie~, of eertilica~& ·ft~ c<?ntempt, ~ th~ .. .ma:tter of' Jaek D1i' St~1ingi . . B~rupt1 Oi.at~i9t Court .oi' th$ Unlt~d Stat~s'" e·outlii.ir.}ri'.· Distr~ci! of· C:ali­fornia.1. Central Division N9. 2668'5•Y, and of'. amende4· :t:tiifiplaint. f'.or damages, Superior Court, .Ooun.~y of' Los A.ng~les, No. 456167, the matter 0£ H.ub-t.rt F ~ Laugharn~ the trustee, etc .. , Plaintiff 1 vs" Bolsa C-hica.,.. et al., def'-endants:. · · ·

· T·:fle Commission then hea:rd from members of' the staff, and follow-ing a general discussion., the Commission advised it would take the matter und.er consideration.

The· Exec.uti~e Of.fieer stated tltat two bills had been i.ntroduced­in the Legislature .... Sil> B * i;i aJ).d s .. B~ 420,, Q:esigned to enlarge grants heretQ:fo1<;t~ made by the State Legisla;:ture 0£ tide nnd subrq.erged land-s to municipalities and one county. Roland Thompson, Esq.j Attorney for the City of: Newport Beach, and Sana.tor Thomas H" Kuchel appeared to discuss

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the problems which br·!Utht~bout the introduction of' ·these bilJ ~. Xhe pl"'opon-ent.s of the pieasures stated the County of Orange ·and City of Ne~"l.port desired to straighten an arm of the ocean whioh projects some distance landward l'rom N.ewpo:rt Be~ch, and sough:t legislative authority either to sell t.he eJ.:i.sting, erumn~l for cash and with the proc~eds purchase land through whi~h a Straight chann~l could be dredged or as an alternativei

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to trade the e:-tisting :channel for 0th.er si.1itabl.e ianrls.. It was finally

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• • suggested to the Commission t.hat the Legislature eott1d authorize the State Lands Commission to dete:rniine when the lands in the exis-ting channel were :µo longer suitable for navigation o.r fishitig. Upon such determinatton, the State Lands Commission could approve the sale or trade 0£ such lands. Mr~ Thompson stated he would confer with the title company in his county and with of£icials of the City of Newport, and report to the Commission upon the suggested_ program.

At this point the Commission taok a recess until April $, 1941, at 10 o t clock A • 1{.

A rec~s~-ed meeting of the CQT(mrission was held in the of£ic_e of the l)epa:rtment of Financet State Gapf:tol; S~cr~Tllent.o,. at 10 0-',clock A. a-.; April 81_ 1941. - -

P't"esent were:.

C}eorg·e: Ktll;tQn, O.hairman _ . ~~ ~, Riley, ?-1ember 'f -

El'Iis E. Pattet{l.on, Member ·

The E:xeautive Ot.fieer asked, i;hat ~he minutes of trhe meeti~ held Fab~uary 17 and th~ recessed meet~ng of March 12 be confirmed and appreved~ Upon motion '9f ?J.lr. Riley, seconded by Y~~ Patters·on Gl.nd una:nimously carri-ed~ said minutes were approved as submitted.

· Sheiley J .,_ Higg~s, Esq~"' City_ Attorney fQr Coron.ad("), app~ar~d before the Gomnrissio:a to· discuss A«- B.. S9l by ~en~~or ?treant. T-his bill ¢onta.ins a d-eB'c-r:tpt:iori o:t th~ tf:<:Ieland·s ~nd ·subnter~d lands desire<$. hy the City_ of Coronado.. The act of 19i3 which 'P~PQ.~ed' t'O ~on1:ef such lands to this ·city eon.tai.Ds a vagua desc,riptie&.. ~n · 1939 a bi.11 pas.sed by the Legislature P\lrPOrting to corree.t the deseri:pt1on was· vet'Of!:d by the Go'ternor anQ. i11 -:tieu t.nereof anQther act was_ p~ssed. acnd approved by :the -G-ov;.ernor* This 1atter act directed: the State Lands Commission to correct. the description insofar as -possible but not--t:e inc-lud~ in any co~ected descript_ion 1.ands not already .granted tq the City of Coronad-q... During the interilll between 1939 and 1941 a study'made upon behal£ of the S~ate Land~ Commission_ showed tha~ the description_ contained in th~ g:ranting aet of 19"23 w.as :fundamentally faulty and incapabie or ~scribing a definite area as subject to the grant, thus the State Land& Commission was unable to act under the authority contained in the act of 1939~

· A.. B. 891 would grant a surfac~. easement to the City of Coronado and requi.t'e it to rec.onvey any _o:r the lands which-·the State conveyed_ to the city tn 192). Mr. Higgins took ~xception to t·ha proptlsal t0 transfer a .surfaee eas.eme-nt and to t:he reooweyance requirement-. At the suggestion of the CorrunissioJt), the matt~~ - d for consideration a;; a. subsequent meet ini:.r. r-:~ ',,;;:) ,.,.., ... ,

W. Rsg±n~ld Jones, Esq. 1 Attorney at Law, repree.e~ting the City of Oakland, appeared to discuss the provisions contained in S:,, B. 558 by Senator Breed. Thi$ measure would g1"'ant to the City of Oakland a parcel of sul:mierged real. property alo:ng the Oakland Estuary. Following discussi0n1-

·the Com.t11ission agreed that r .. Ir. Jones might proceed with the bill, reser1li:r~:J however,. to the Coro.mission the right to oppose the bill at any subssqne.nt time. -

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- •• • At this point the Commission took :a recess until Apri.l 9, 1941J

at 10 o'clock A"' I·l.

A recessed meeting of the Onmmi~sion was held in the office of the Department of Finance, State Capitol, ~acrrun.eht<;•, at J.O o'clock A. M., April 9, 1941.

Present were:

George Killion, Chairman, Harry ~t"' Riley 1 Membe~., Ellis E. Patter~oJt, Me~er.

Shelley J • I:figg~11s, Esq .• 1 again appeared bef'ore the CommissiQn for further diseussi9n with respect to A •. B .• , 8'91 by Assemblyman Stream .• Aft.er .considerable dlscussion the Commis~ion suggested that Mr. Higgins confer with-members or the s.taf'f of' t:lle· Oommis~i6n and to :endeavor to ·dra:ft legislation for further'-consideration of the Commi~aion.

At this pc~nt the Chainnan 6£: t:he Coll!Ifi:iS$ion withdrew and the other m~mgers of t.he ·-Commission prt;tc&ede.d wi.th ~- · .I;:! cal~nda~,

· 'fh•. Execl;ltiv~ Of.fie er advised t:fla.~ Dr. Edward· 0. Morgan, le$see of :Lease ?lo. 5·57; Fish C~nyon, requested the Commission t;o reeonsider its earlier action advan6ing the rental ~-o $30.-00 per year·., Aft~r discussion, Mr. Patterson metved,. )Ir~ Riley second·ed, and. wm:don w~s unanimously .e~ried, t.hat l:es.see b_e advised ·the rental would be $30..00 -~er year.

the' ·Executi:ve 0ffi~er requested ~onfirmat..io~ of t.}le assignment of Fish Canyon Lease N·o:jl -693 from E~. ~:ff McKinney to «Rob~rt M~ Sherwood. .

·Upon motion made by Mr. Riley; seeond:ad· by I"1r .. :Patt~rson, and unanimously carried1 the .resolution was adopted eonfirmi:ng sue~ adoption. . ·

The Exenutive "Off.icer advised t·hat ~rthur G .• 1indell, less-ee 0£ Fish' Canyon Lea~e No·~ 6g3 was more than si~ mont.hs delinquent • U~ _,..._ mot.ion made by 1'.~r. Riley, sttconded by 'Mr~ Patterson ~~ unanimously . _ . c-arried.,_ a resolution was adopted d.irect1.ng that ~mi.d lease be cancelled.,

. , Letter from. ·the Stat-a Controller date<! March llt 1941, was read, in which he advia.ed that the sum total 0£ $'45»000.00 should be t.:ransferred from the State Lands Act Fund to the General Fund and State Park Maint.en­ance and Acquisition Fund in percents of 70 and 30i respeetively~

Upon motion of Mr. Riley, seconded by I>Ir4 Patterson-11 and un­animously carried, a resolution was adopted directing the transfer from the State Lands Act Fund in accordance with the suggErStion of' the State C.ontroller. ·

The Executive Offi~er advised or an application of the Commanding Officert U. s. Naval Air Station, Alameda, for consent of the State Landa Com.~ission to utilize Abbot's Lagoon an indenture of the Pacific Ocean adjoiniri.g th~ 1:\a.ncho Punta de Los Reyes Sobrante f'or bombing practic.e. Execut:tve Of'fic~r further stated that records in the Public ~,;J.:g.ds Office

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•• • dis·closed the· State of California as the owner and recommended that con$ent be given. Upon xn.otion made by Mr. Patterson, seconded by Mr. Riley, and unanimously carried 1 a resolution was adopted au~hori~ing and directi1~ the Executive Officer to give such consent upon behalf of the State 0£ California.

The Executive Officer reported that th~ &tate Mineralog1st is now prepared to aseign a deputy to exa:m:j..ne Stc;te lands ~o d·etermine their mineral possibilities, but that t·he Ways and ]i1eans Committee of the Assembly, d~leted from the budget an appropriation to pay for such serv-ices. The Commission directed the Executive Officer to advise the State Miner~logist to go £orward with pe~forma.nce under the. contract,. ~otwithstanding such action by said committee,

The Commission directed the Executive Officer to subscribe for California Oil Wor-ld News Serviee a~ 0100.00 per annum. This sertri~~ was authorized at an earlie.r meeting, bUt ~t that t-l:me it was reported that the serv:ic·e could prob~bly be obtained ·f'or $59'.00; ·although the Commission autJ-iorizeQ. a ma~im:um Qf $~-OEl .. po.

According t.o the Execut·i ve Offio er, .E'qerett Mattoon, Esq", Assistant Attorney General.,. ;recommended that the Commissio11 inst.itute a conferenc.~ w±t·h the ;firpi o.f Me$s.rs. Athea~n . a11d Chand1er., San Francisco, in an endeavor ttr-establish a· more ·uni£orm flow of Owens River int:o Owens Lake. It appeared from the ·r~.9o~enda~ion bt M:r ~ Mattoon.,_ as reported to the Commj:ssion, thE,\t Mr. Chandler of this firm is counsel ~9 the Depattl1ient ot Wat.er and Power at Los Angele~ and ~hould oe in a position to 4iticuss the prc~blem · a11d recommepd eonstructi ve actionctt Upon motion mQ.-cle bf lvlr. ·Patterson·, $eC<?nded by Mr·, Rile!y, and unanimottsly carried., a r·esolution w~s- adopted a\;lthorirlng and direct·ing the Execu.1;ive Officer to proceed with such coD.ferences. _ · _

, Upon motion of 11r.. Patterson, sec·onded by Ii1r. Riley, and un"!" animously -carried, a resol-utioh was a.dopt-ed ai.it,horizing and direct:f:.r.g the Executive Officer ·to app:rove 'the ~pplication of the Depar.tment ·-of Pub:f_ic vlorks under Section 101,,.,5 of the Streets and Hignways Code., for cr<Jssings

o;;i:er pare els ~f submerged lands, Sections 23 and 24., T. 5 U.., , R." ·i, W. : H~ M.-t in accordanc.e with a map submit~ed by -the Departmen:t; of Public- ~'e:rks"tll:

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frhe Executive O~fieer made reterenca to an agreement ·made by t·hs S-tandard Oil Company of California. at the time of execution of" Agreement for Easement ·No .• 33"8, Hunt~ington Beach, in which the grantee agreed to matQh atiY hig~er royalties which the State might receive from any well or walls drllled. w~thin certain parcels of submerg.ed lar1ds ill .~ili.c·h one or more of the wells described in said eaFJement .. are located. Earlier the Commission approved the action. The Commi.ssion was advised that t·he amount of addit~onal royalty to the State of California on account of all production from P. E. Well No~ 1 amounts to approximately $50.00 per w.onth f'r9m October l, 194-0. Upon motion made by fiir. Patterson, seconded by Hr. Riley and tnianimously car·ried, a re~·olutio11 was adopt·ed aut.horizing the Executive 0.fficer to accept upon be.half of 1.Jle State of California the proposal -0£ the grantee 0£ Easement No. 338 to pay such amount a·nd such addit·ional r"Oyalty thereafter.

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I • • The Commission was advised that Paul Kraft and Harold Tripp to

whom leases were awarded for the extraction of manganese from State lands in Stanislaus County February 17, 1941, had not furnished the bonds a.nd other information as required by the law and rules of the Commission. Upon motion made by l·ir .. Rilt;:!y, seconded by Mr.., Pat.terson,. and unanimously carried, a re-sol:ution was adopt-ed ext·endlng the ~irae for the fll:ing of bonds ~nd other required inf'ormation for a period of thirty days fr~m April 9, 1941.

. At this point a recess was. taken until ten o'clock A. M .. , April

10, 191;.l.

A recessed meeting of the Commission was held in the 0£.fice of the-: D'epartment of Finance, State Capitol, Sacramento, at ten oteloek A~ M., · April 10, 1941ti . 1

Pres·ent were:

Georg.e Killion, Chairman, H~:...-.y l3 • Riley, Member, Ellis E,. Patterson, Member.

- Shelley J. Higgins, Esq., C-~ty Attorney of Coronado, again appeared befor~ the Commission to f'urther discuss· an amendment to A. B. B9l by Assembl~n Streami

-~· The prepas~l as ·-s.ttbm:t:tted would . o.Qrrect the description of the · :1 _lands conveyed to t-he Ctt.y of Co.ronado in 192:3 and ·wol;tld <;_ontrln a legis­lative declDration tha~ there.is not now anq wa~ not in 1923 or any subsequent time an intention of the Stat.e o-i' Ca.litornia to tra:r;isf er eith~r minerals 01" oil or gas to. the City of floronado.. After diseus-sion, the Commission ~ireet-ed the ~ecut~v-e·· Ofl'ie.er: .to· appear· ·before the appropria'te committee and pres·e11t all of the facts in ·connection with st.a.tut·es and proposed legislation.

Th~ ~eeutive 0f£icer presented, .for considru;ration to the Commission . -· ~he re1port prepared .by J .• S. Wat~on., Pe-trrole'iltl,l Produe:tion iiuqi~or Of the

· Oommis~li6n-~ with ;r.-espect t·o royalty upon mineral.s e>.."t:.;·a~ted fr9m Owens Lake. In this memorandum Mr ... Watson recommended that the royalty to t'he atate b~ set at ten percent of the reasonab1e val~e of the minerals extraeted a.s established by the Commis.sion., 'Phe Chairman directed. that Mr. Erne~ti Axonst.eln, Accountant in 't!he Department of Finance,_ give study to the memorat'.1.dum and report t·o the Commission at a subsequent meetirg.

A report was made to the Commission of a request of Charles McWaters, Globe, Psizona, that legislat.ion be introduced to authoriz~ the extraction of minerals from ~ubmerged lands of the State.. Ac~ording to Mr. Mcwaters, deposits of' chrome exist ir1 subme?"ged lands in San Luis Obispo County. ~he Executive Officer reported that the off'ice ~f Production Management, Wa~hitlgtont D. C., has s·uggestad Mr. Z~cWat$rS write to the· United States Geological Survey giv~ng a description ot' the deposits, but 'Mr. Mcl'laters questions whether he shnuld make this information generally available<! The Executive 0.f.ficer reported that Ai; B .... 2272 had been introduced by Assemblyman Carlson·.i which would empower t.he State 1.:ands

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• Commission to authorize the extraction of minerals ether than oil and gas from submerged lands. The Coro.mission instructed the Executive Officer not to oppose the bill and to advise the author the Co1nmission has no objection to it.

The Executive Officer reported receipt of a letter from the Port Director t City of San Diego 2 requesting the Corn.111ission to apply for an opinion from the Attorney General to determine whether the State of Calif.orni~ has jurisdiction o\rer certain lands upon which the· city would construct a recreational pier, and that the Port Director stated the city would not ~ree to be bound by any opinion of the Attorney General contrary to the position of the city.. The Commission Q.irec~ed th~ .$xecutiv:e Officer not to apply for the opinion and to ~o advise the C~ty: of San Diego~

A discussion w~s had of Assembly Bills 12~9,. 1327 .and 689, relatin.€ to the· ·establishment of agencies in vari.ous departments of the State to und·ert.a~e ·the constru~tion of' structures upon tide lands and eyubmerged land$ of the State. Because t·he State Lands Commissi'.Qn a~e~dy has jw~sdictioll. over c.onstrl.~:ction of structuret? upon ungranteq l~nds .of the St~t~t the Executive 0££icer was dire<..t.ed to oppose- A. B. 1249, 1327 am· 689. T:b:e Oornmission .al$o instructed the Exec.utive Off'ic·er to oppose s. B~ $59 by Senator Fletg'her designed to restore poltlers to t}?.e S-Gate Boar~. ·6f; Harbor Commissioners at Sap. Dieg(\ . The S-tate Lands Qpnunis$ion i~

. pres$.ntly engaged ~n cons·olidating under the Commission. all ·ungranted t~rl:e lan,q.s, and submerged lands and bas. caused to be int reduced A. R~ 952 by .&ssem.blyman Robertson· t.o repeal certain sections c£ the· Harbor and llavigation Code11

A: further discussion was had of the applicat :tO:n 9-f the grante·e in Agr~·em~nt for Easement No. 290.,. Huntington Bea.c·h,, to redrill the well

. described in that eas-ementA> Up0n motion of Mr. Patterson, .s·eco.nded .by 1~1r..,, Ril~y and unan¥aously carried, a resolution was adopted declini-ng approval of the _appli.catioQ. to red:rill said well f'or the reason that such redrflling operations would violate a rule adopted by the aonm1is.sion on Deeemb.er 30., 1938 •.

A report was made to the Commission tb!i.t 'the grantee of ~greement for Easement Noo 325 has refus-ed tQ pay i;o the State a minimum royalty . of ten percent based upon a rule of t.he Ch:tef of the division, which . required any grantee redrilltng a well or ~hanging liners to pay a.minimum royalty of ten per cent. The ·work on thld Tide Petroleum well c;-0nducted sometime ago consisted of perforatir1g the liner at a position higher in the ail sand. The State Land·s Commissior1 ·was <rite~d to appear be£ore the . Refer.ee to ~xplairt the basis of the demand. Appearance was m(J:de upon behalf of the Commission but an objectien was taken to the jurisdictrion of tha Referee to hear the m~tter a~d to oons~nue a contract to which the.State is a party. The Referr=e overru+,ed the objection and assumed iurisdiction ... It not-t appears that the R.9feree will d-ecide that the grant.ee of this easement i~ not required to pay t,he· minimqm ten per cent royalty., There is s·ome quest1on whether the chief of tlH~ division had the power to promulgate su.ch a ruling since the agreement specifically forbids the extraction or a higher royalty for red:r--illing. In the first place, this w6}s

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• not redrilling since the work was done in the hole and had it been redrilling, then, of course, provision of' the contract is cor1trary. Upon muti.on of Mr. Patterson~ second-ad by :Mr o Riley and unanimously carried, a'resolution was adopted directiv.g that the matter be brought to the attention of the Attorney General with the ~equ.est that he institute suit against the Tide Petroleum Company, if in his judgment such action is

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A. B. 1219 and A~ B. 1629, designed to empower the Director of Finance to sell abandoned river channels of Petaluma Creek and. the American River, were brought to the attention of the Com.~ission. The question before the Commis·sion ·was whether the sale shou:J.d be conducted by t·he Dire<;tor ·of Finance. witl"'- .the a.ppr~vai nf' the Cpm:.tlss.ien, or by the Commission with the approval of the Directror or Finance,. o~ by e-itQ,er'* After disQnss.ion, motion was made by Mr. P~t.t.erson~_ seco:µdeQ: by ?~ .. Riley, upon resolution as follows,: "That A. B. 1?19 and A .. B. 162-9 be amended to empow~r and authorize t~e State L~nds Com~ission to dispose Qf real properties therein mentioned aqd in accordance with t:he terms ctf the act." The ··v.ot; e waa as f.o llows:~ ·

Mr. Patt.ers·on - !':ye M~. Riley • Aye Mr:•· Killio~ - Mo"lf vot·ing.

Repart was made by Mr. Hortig upon a controversy which has arisen over title ~-o 9ert~in land9 the subj.act piatte-r of mineral T.1eases l1os. 420, 421, 422 an4 423-. of W. A. Leeper; Grace ~eeper, Margte. Wond a~d s .. .fi,!J Leeper, respee~.iv:ely. Mr. Ho+tig pointed out that J, tl. anQ. -J,., l•L., Dorr

, had filed m::ining .claims upon 'Ce·rtain of the premises· a-rid had removed. ate · . lea:~t two ~hipments ·or minera-1, and. that it would B.9, necessary to conduct· . a~ tnyestiga~ion to determi~e wheth~r, on account of the e~&tenc·e of mineral in· th~ lands, the State of California or the Feder&.l Gotrermttf:!nt .; 0 t:h·a O?Y·""'Ar 0.P theSA 1 ~"'dS ~I!'.,... J.,'1',.. . .,...+-.:;.,... - -~- .2+-.-,.~:n_Ai- ~~ ~ ~-~. - r:-,..,-.1t .... 4 """'.'i!!"t a·.,...._ --. ~ ·: .,ii.,~ '? 'Tu..i...... ;!. """ -~ -~ .!..'~ ·1' · -~:.:..;_,, ._.,......_5. ~.....,. ~ .... J> >,;;;·,§·¥""U- 1:J7« ·vuG:- .v..,.i,wu.r;;Q'"".J. i.w; •

to ~k,e sµ~h -investigation. ·

The J5xe'cuttve Officer repo1-tted receip~ or a let-Yer from the State Board of ContrQl requestj4:ng that J. s. Wat,son, Petroleu.m. Produotton Aud·itor of the Commission., be assigned to hear any addit fonal evidence which certain claimants., grant·ees o:f easements of Huntington Beaeh, ·might care to present.. The Exeguti-ve Officer reported that tn his op.inion th19se

claimants have no addi·vici1al evidences to add~ 1,;Ir. Ht?:rtig advised the Oollllllission that the amounts of the claims had been calculated on three different occasions. Ths Execut±ve Of.fie er added that deductions of approximate.iy ~6,000 might be made from the c.laims on· ae~ount of excessive gas ext.raction -costs charged against ti.he State. T.he Chairman dir*'lcted that Mr. Wa~son be not assigned to this work,

The Bxecuti~e Officer reported the Personnel Board ~ad approved a prom.ot ional .e~~minat ion for F.. J. Ho·rtig and had denied the same to

- t~lrs. Geneva. Har~ey-.

The E:-cecutive Offici.:..J: reported th:it the California Maritime Academy made application to the Commission for an easement to conetru.ct a

-'· ' .. MW'!.. t:r:nt · t ' 'a,',

• w-harf and two dolphins in Morrow Cove, in the vicinity of Carquinez. Bridge... Upon motion made by Mr. Riley, seconded by Mr. Patterson, and unanimously carried, a resolution was adopted directing the Executive Officer to issue consent of the State Lands Commission upon behalf of the State to the applicant and for the purpose fcH: which the application is made.

A report of J. 39 Watson, Petroleum Production Audi.tor of. the Commission, was read wit·h respect to gas production costa and· sales price of natural gasoline. Mr. Watson's report contains recommendations as follows:

nrt is recommendAd th~.t. t:.l1e State T.ands Com.'llission cata:blish t11e r~ilowing minililum prices and maximum costs for control of gas and gasoline under 't;he pertinent provision of the leases and eas.emeuts now in force as follows:

1. Pri.ce for. Ga·soline

The gasoline price shall be t.he aite:rag.~ of th~ cur~ent po·stings for like qu~lity gasoline in thn .field wh~re produced of the published schedules 0£ the Standard Oil 0?.,,, Union ~il Co •. , Gen~ral ~etrole.\l~ ~orp.,. Teocas Co .. , R1chfield 011 Co. , and :i.SSac·iated 01.l Co-: , or a.s many of th'0se compani~s as publish sc:hedule1) for· .natural. gasoline, ~hSllid no published schedule be av<;dlable in a particula~ field,1 t}!e avei.""'a~e of t.hose- a·ompani~s publishing prices for lik:e quality gasoline in. t.h~ nearest ,field :s:ha.11 be us~d ··. after malting due alloi.ance for Stat·e 'of' California Railroa.d Commission minimum rates from. the field in ~uestian to the ""'!:' ·'1 - h :i...1· - rt "' ;"} '- : . • .... ~ 1.1.e.J;.a w ere pu.µ ..l • .:7.i1e~ seneH .. !'.;u t~t: ~- ~~.].J....~trP~,.

,\ p!"c·c.es9~r:7~ maif~13.:.f'aet:ur.er 1 s i""ea.sonable -co~t .allowance · ·:.,1nal-It"~:·:·deuu'cit~d frQm the poat·ed ·pric::e as. -d"et-e·:rm.ined '

above not t9 ex.ceed 1 .. 75 cent-s per gallon ~n making settlement £or State's gasoline r:oyalty. This maximum co·st allowance sh~.1.11 bE· upon 100?:- of the gasoline produc~1d · fr-0m gas from S·t.~te 1 s land.

2. .r:ae=,..,or ~rl GaJ.

The pric~ for dry gas sold from gas production f:rom StC':te' s lands shall be the actual price received from sale of suc.h gas but in no event shall the ?:t:'ice be less than a minimum 0£ 7 ~ cents per r.1.c .F 11; _

From the actual sale price or minimum price, as the case may be, an .s.llowa.nce for sale or compres:sion ser~;ice, shall be allowed on lOOj~ of dry gas sold from State Land production consisting of the actual eost but not to exceed a maximum of 2 .5 cents per E.C.F. n

Mr. Aronstein expressed the opinion that the analysis made by Mr. Watson and his conclusions were correct in the circumstances. Upon motion of-.. M:r,.. Patterson seconded by nr. Riley and unanimously carried, a. resolution was adopted attthc•riztne and instru'Cting the Bxneutive Off:te·er

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• • to proceed in accordance with the recommendation of Mr. Watson.

From the foregoing, discussion arose as to an alternativ~ means for disposition of the State's royalty share of the wet gas produced from wells at Huntington Beach. Mr. Aronstein ment:ic~~d that the O. C. Field Company at Huntington Beac"h might be willing co take all of the State's royalty gas in Huntington Be.~lch field and ·:eturn :r.o the State an amount which would probably be substantially greater than the amount now being receivedg Procedures to obtain such a cont~act were discussed, a;:µong them be.t.ng direct negotiation and an invitc.tion to bid. On account of the lack cf time, it was deqided to have a later discu~sion upon ~he p~-oblem.

The Executive Officer mentioned that the Reclamation Board had advised that C?. .contract is now petng held in the Boarcl' s ofri.ce.,. e:x.ecuted upon behalf <.;£ the Reclamation Board1 to tr~nsfer 9-rilling s-it,es on 'the .Sacrau:ento R:i:ver to the State Lands uomi:niss:ion. The Chairman asked that Mr. Frank Clark and others be requested to attend· the next Jlleettng o.f the Commissio~ to discuss reasons ·far t~e issuance of consent to tl.Se d:ril.ling site9_ in 1941, when, a:ccording to representation. made to tpe Chairman, . drilling sites were need:ed by the GQmmiss:Lon in 1939 .and t:he Spring 0£ 194-Ct. :

At the last meeting the overage and underag~ clauses contained in the Agreement for Easement ~lo. 415, Rio Vista., were discussed.

. Engineers oft.he. Oommission explained that the Pacific Gas &. Eiec·tric Company had :ample ttme, prior tq th~ floods within which to lay the gas liz+e from the well· described in. this easem~nt., but that the Pacific Gas and Electric Company de.layed in doing this' work until floods prevented it. T.he ~ngin~ers ·als.o ·eJg1iain~d t,o the Commission that t~e ~as :from tl:le Stat.e well is less tha~ 4-100 B. T .u. content, and for that reason a further· delay has resulted in actual production of gas from · the State well.

The Commission decide4 that the grantee or' the easement s.hould be permitted t.o take credit only within the respective six months periQds.

There being no further busine·ss to come before the Oom.mission the meeting was adjourned.

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