- February 19, 2013
- All Arkansas Issuing Offices
- UNDERWRITING - Inclusion of Sand and Gravel in Standard Mineral Exception
We have been asked to revise our inclusion of sand and gravel into our standard general mineral exception. We are unable to do so at this time because of the uncertainty of the law as to whether sand and gravel are part of the surface estate or part of the mineral estate. Neither the Arkansas Supreme Court nor the Legislature have clearly defined sand and gravel as surface or minerals. Cases seem to go both ways or at least are very fact specific. Accordingly we cannot make a blanket agreement to remove the sand and gravel portion of the general mineral exception.
Some background on the issue may be helpful:
Deposits of sand and gravel are widely distributed across all of Arkansas and are currently mined in about three-quarters of Arkansas’s seventy-five counties. Major deposits are present as sedimentary units, on talus slopes, and as alluvial deposits in the flood plains, beds, and terraces of rivers and streams. Most of these unconsolidated deposits may be mined from open pits (open cut methods). Certain areas of the state are particularly notable for the abundance of these resource materials. Some units of Early Cretaceous age in Pike, Howard, and Sevier counties contain significant beds of sand and gravel, especially the Pike Gravel and Ultima Thule Gravel members of the Trinity Formation, which range in thickness from twenty to 100 feet and zero to forty feet, respectively. Units of Late Cretaceous age that contain abundant sand and gravel are the Woodbine, Tokio, and Nacatoch formations. Sand and gravel deposits are present in the Woodbine Formation in Howard and Sevier counties. The Tokio contains recoverable sand and gravel in Clark, Pike, Howard, and Sevier counties. Sand beds are present in the Nacatoch Formation in Clark, Hempstead, and Howard counties. Quaternary gravel deposits are abundant in interstream divides of the Gulf Coastal Plain in southern Arkansas and on Crowley’s Ridge in northeast Arkansas.
Gravel and sand deposits on Crowley’s Ridge extend from St. Francis County northward to the Arkansas-Missouri state line. Extensive Quaternary alluvial deposits of sand and gravel are present in the major river systems in the state. Dredging operations in the rivers, especially the Arkansas River, recover significant amounts of sand and gravel. Also, deposits are present locally within or adjacent to the beds of the smaller rivers and streams in the state. Significant deposits of cherty clay and sandy regolith in north Arkansas are utilized for road and construction fill material. In these deposits, rock fragments vary from rounded to highly angular.
With the nationwide increase in fracking and mineral exploration, high quality sand is a valuable natural resource. Likewise, increase construction activity often entails the use of sand and gravel. Arkansas can be a source of such materials.
Despite the risks and the uncertainty, Stewart Title Guaranty is committed to being as responsive as possible in meeting the requests of our customers and agents to remove sand and gravel from the general mineral exception. To that extent, we have attached a map of Arkansas published in 2007 by the United State Geological Survey showing the counties (and approximate location with those counties) where sand and gravel mining is usual.
If you are asked to remove the words sand and gravel from a commitment or policy, please refer to this map. If the county in which the land is located is not in a county where there is sand or gravel shown, or is not listed in the highlighted paragraphs above, you may amend the exception to delete sand and gravel. If you are in a county listed above or in a county shown on the attached map as being susceptible to production of sand and gravel, additional steps are necessary.
These steps are required:
1. Review a survey to determine if any part of the property to be insured is located in a flood plain, bed, or terrace of a river or stream or is adjacent to a flood plain or bed or terrace of a river or stream. YES: do not amend the general mineral exception. NO: go to step 2 and comply with step 4.
2. Determine if the property is part of a recorded subdivision with at least 3 other residential or commercial buildings located within 500 feet of the primary structure located on the insured property. Are there deeds or other restrictions on mining operations in the subdivision? Yes: Comply with step 4 and you may amend the general mineral exception. No: go to step 3.
3. Can you obtain a certificate/affidavit from a disinterested, knowledgeable expert on the mineral and sand and gravel geology of the property to be insured opining that there is no sand or gravel on or under the property in paying quantities? The expert’s qualifications must be approved in advance by a Stewart underwriter. Yes: go to step 4. NO: do not amend the general mineral exception.
4. Review title to the property. Are there any reservations of minerals including sand and gravel? Are there any leases of rights to explore for, mine or sell sand and gravel? If yes, do not amend the exception. If no, you may amend the general mineral exception to remove the words “sand and gravel”.
For your convenience the amended exception would read as follows:
"Minerals of whatsoever kind, subsurface and surface substances, including but not limited to coal, lignite, oil, gas, uranium, clay, rock, in, on, under and that may be produced from the Land, together with all rights, privileges, and immunities relating thereto, whether or not appearing in the Public Records or listed in Schedule B. The Company makes no representation as to the present ownership of any such interests. There may be leases, grants, exceptions or reservations of interests that are not listed."
If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.
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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
- Bulletins Replaced:
- Related Bulletins:
- MU2012002 Mineral Exception
- Underwriting Manual:
- Exceptions Manual: