Multi-national cement giant failed to pay Texas schoolchildren
Texas Insider Report: AUSTIN Texas The gist of this case is simple: You just cant take whats not yours without a fight in Texas" said Texas Land Commissioner Jerry Patterson. The schoolchildren of Texas today a won huge appeal against CEMEX over the ownership of building materials mined from Permanent School Fund (PSF) lands. Damages in the case could be worth more than half a billion dollars.
Patterson took CEMEX to court in 2009 alleging the Mexican-based multinational corporation failed to pay Texas schoolchildren for mining millions of tons of minerals from McKelligon Canyon located in the Franklin Mountains just north of downtown El Paso.
As Texas Land Commissioner its my job to look out for the school kids and to make sure they get their fair share. Im very pleased about todays outcome" Patterson said.
Since the 1940s CEMEX and its predecessors have mined and extracted the minerals in the McKelligon Canyon mine. The states Permanent School Fund owns all minerals in McKelligon Canyon. Texas never authorized CEMEX to take its minerals.
The Court of Appeals for the Eighth District in El Paso sent the case back to the trial court to determine just how much CEMEX owes to the school children of Texas. Justice Guadalupe Riveras opinion found that under the Mining Act of 1895 title to all deposits of granite limestone gravel sand and any other
mineral substances of whatever kind or character having commercial value located on the McKelligon Canyon lands as herein identified are reserved to the State of Texas.
Understanding the case requires understanding Texas history. When Texas won its independence from Mexico in 1836 the young republics constitution required that vacant or unappropriated land remain in the public domain.
When Texas joined the Union those vacant lands remained in the states public domain. The surface of most of the vacant lands was slowly sold off for nominal amounts and used by the original purchasers for grazing agricultural and related purposes.
The state however retained all valuable materials on in and under the states lands for the benefit of public education.
These Permanent School Fund lands in El Pasos McKelligon Canyon were sold under the Land Sales Acts of 1895 and 1907 which expressly state all mineral wealth on the land remained property of the school fund.
The roots of this Texas law trace back to Spanish law which allowed the King of Spain to issue land grants that essentially allowed the use of the land for
settlement grazing or farming but reserved any materials of value on or under the land to the sovereign. Mexico was under Spanish real estate law as was Texas when it was a Mexican territory.
The Texas Permanent School Fund worth about $25 billion is made up of stocks bonds and real estate investments. The Texas General Land Office leases surface acreage on behalf of the school fund and charges royalties for the right to produce its mineral wealth including oil gas and other minerals.
Earnings from the fund help Texas public schools from kindergarten through the 12th grade using non-tax revenues that help offset local property taxes.
