California Code, Public Resources Code - PRC § 6912

(a) In case of an application for a permit or lease covering lands which have been sold by the state, subject to a reservation by the state of the geothermal resources thereof, by any person other than the owner of the surface of those lands, the owner may, within four months from the date of service of notice of the application, file an application for a permit or lease.  The notice, with a copy of the application, shall be served by the commission, by registered mail.  If the owner files an application and is a qualified person and the commission determines that the permitting or leasing of the lands is in the best interest of the state, the owner's application shall be granted subject to all the provisions of this article.  If the owner fails to exercise the rights granted by this section, those rights shall terminate and the applicant shall be permitted to proceed with the application.

(b) In the event of a competitive lease sale, after the commission has determined the highest competitive bid thereon, the owner of the surface of those lands may within 30 days after notification by the commission, by registered mail, submit a bid identical to the highest acceptable bid, in which case the commission shall issue a lease to the owner.  If the owner fails to file a bid within that time, the commission may proceed with the award of the bid to other than the owner.