shall be paid in accordance with the lease provisions. § 3473.2 Fees. § 3473.2-1 General fee provisions. a (a) (1) A filing fee of $250.00 shall accompany each application for lease, exploration license or lease modification. (2) Each original application or any renewal application for a license to mine shall be accompanied by a $10.00 filing fee. (3) A filing fee of $50.00 shall accompany each application for approval of any transfer of a lease or an interest therein. (b) The fee shall be retained as a service charge even if the application is rejected or withdrawn in whole or in part. An application not accompanied by the filing fee will not be accepted for filing; it will be returned to the applicant without action. (a) The annual rental per acre or fraction thereof on any lease issued or readjusted after the promulgation of this subpart shall not be less than $3. The amount of the rental will be specified in the lease. (b) Until a lease issued before August 4, 1976, is readjusted, the rental paid for any year shall be credited against the production or advance royalties for that year. (c) On leases issued or readjusted after August 4, 1976, rental payments shall not be credited against royalties. § 3473.3-2 Royalties. (a) (1) Royalty rates shall be determined on an individual case basis prior to lease issuance. For competitive leases, initial royalty rates shall be set out in the notice of lease sale. (4) The value of coal removed from a mine is defined for royalty purposes in 30 CFR 211.63. (b) (1) The Mining Supervisor shall have the discretion, upon the request of the lessee, to authorize the payment of an advance royalty in lieu of continued operation for any particular year. (2) The advance royalty for each lease shall be based on a percentage of the value of a minimum number of tons of coal, and the percentage shall not be less than the percentage prescribed in that lease for the production royalty. For any lease issued after August 4, 1976, the minimum number of tons shall be determined on a schedule sufficient to exhaust the leased reserves in 40 years from the approval date of the mining plan for the LMU of which the lease is a part; for any lease issued before August 4, 1976, the minimum number of tons shall be determined on a schedule sufficient to exhaust the leased reserves in 40 years from June 1, 1976. (3) The use of advance royalties in lieu of continued operation shall not be permitted for more than a total of 10 years during the life of any lease, including the life of the lease after readjustment. The amount of any advance royalties paid on a lease issued or readjusted after August 4, 1976, shall be credited against production royalties, except that no payment of an advance royalty during the first 20 years of a lease issued after August 4, 1976, may be used as credit against production royalty due after the 20th year of that lease. (4) The Mining Supervisor may, upon notifying the lessee six months in advance, cease to accept advance royalties in lieu of the requirement of continued operation. (c) An overriding royalty interest or production payment shall not be created by a lease transfer, surface owner consent, or otherwise (1) that exceeds 50 percent of the rate of royalty first payable to the United States under the lease or (2) that, when added to any other overriding royalty interest, exceeds that percentage. Where an interest in the leasehold or operating agreement is transferred, the transferor may retain an overriding royalty in excess of the above limitation if he shows to the satisfaction of the Bureau of Land Management that he has made substantial investments for improvements on the land covered by the transfer that would justify a higher payment. (d) (1) In order to encourage the greatest ultimate recovery of coal, and in the interest of conservation, the Secretary, whenever he determines it necessary to promote development or finds that the lease cannot be successfully operated under its terms may waive, suspend, or reduce the rental, or reduce the royalty but not advance royalty, on an entire leasehold, or on any deposit, tract, or portion thereof, except that in no case shall the royalty be reduced below 5 percent for underground coal. (2) An application for any of the above benefits shall be filed in triplicate in the office of the Mining Supervisor. The application shall contain the serial number of the lease, the Bureau of Land Management State Office, the name of the record title holder and any operator or sublessee, and the description of the lands in the manner provided by § 3471.1 of this title. (i) Each application shall include the number and location of the mine, a map showing the extent of the mining operations, a tabulated statement of the coal mined and subject to royalty for each month covering a period of not less than 12 months immediately prior to the date of filing of the application, and the average production per day mined for each month, with complete information as to why the minimum production or continued operation requirement was not met. (ii) Each application shall contain a detailed statement of expenses and costs of operating the entire lease, the income from the sale of coal, and all facts indicating whether the mines can be successfully operated upon the royalty or rental fixed in the lease. Where the application is for a reduction in royalty, full information shall be furnished as to whether royalties or payments out of production are paid to parties other than the United States, the amounts so paid, and efforts made to reduce them, if any. (iii) The applicant shall also file a copy of agreements between the lessee and the holders of any royalty interests to a permanent reduction of all other royalties from the leasehold so that the total royalties owed the holders of royalty interests will not be in excess of one-half of the Government royalties, should the royalty reduction be granted. § 3473.4 Suspension of operations, production, and payment obligations. (a) Application by a lessee for relief from any operating and producing requirements of a lease; shall be filed in triplicate in the office of the Mining Supervisor. The Mining Supervisor is authorized to act on applications for suspension of operations or production, or both, filed pursuant to this section and to terminate suspensions of this kind which have been or may be granted. (b) The term of any lease shall be extended by adding thereto any period of suspension of all operations and production during such term in accordance with any direction or assent of the Mining Supervisor. (c) A suspension shall take effect as of the time specified in the direction or assent of the Mining Supervisor. Rental and minimum royalty payments will be suspended during such period of suspension of all operations and production, beginning with the first day of the lease month on which the suspension of operations and production becomes effective. If the suspension of operations and production becomes effective on any date other than the first day of the lease month, rental and minimum royalty payments shall be suspended beginning with the first day of the lease month following such effective date. The suspension of rental and minimum royalty payments shall end on the first day of the lease month in which operations or production is resumed. Where rentals are creditable against royalties and have been paid in advance, proper credit shall be allowed on the next rental or royalty due under the lease. (d) The minimum annual production requirements of a lease shall be proportionately reduced for that portion of a lease year for which suspension of operations and production is directed or granted by the Secretary in the interest of conservation. (e) A suspension under this section affects only the operating and producing requirements of the lease; it does not suspend the permit and the lessee's reclamation obligations under it. Subpart 3474—Bonds § 3474.1 Bonding requirements. (a) Before a lease may be issued, one of the following forms of lease bond shall be furnished: (1) Corporate surety bonds; (2) Cash; or (3) Personal lease bonds secured by negotiable U.S. bonds of a par value equal to the amount of the required surety bond, together with a power of attorney executed on a form approved by the Director. (b) The applicant or bidder shall file the lease bond in the proper office within 30 days of receiving notice. The lease bond shall be furnished on a form approved by the Director. (c) The bonding obligation for a new lease may be met by an adjustment to an existing bond covering another lease within the same logical mining unit. § 3474.2 Type of bond required. (a) A lease bond for each lease, conditioned upon compliance with all terms and conditions of the lease, except reclamation within a permit area, shall be furnished in the amount determined by the authorized officer. The amount of the bond may be changed if the authorized officer considers such a change to be proper and necessary. (a) The authorized officer shall notify those leaseholders who have nationwide or statewide bonds at the time of issuance of this subpart of the requirement to secure a separate lease bond for each lease in the amount determined by the authorized officer to be proper and necessary. (b) The authorized officer may release that amount of any outstanding lease bond which relates to the performance of mining and reclamation plan permit obligations. (c) Upon approval of a logical unit mining including more than one Federal lease, the lease bonds shall be consolidated into a single bond for the leases in the LMU. § 3474.4 Qualified sureties. A list of companies holding certificates of authority from the Secretary of the Treasury under the Act of July 30, 1947 (6 U.S.C. 6-14) as acceptable sureties on Federal bonds is published annually in the FEDERAL REGISTER. § 3474.5 Default. When the surety makes payment to the Government of any indebtedness due under a lease, the face amount of the surety bond and the surety's liability thereunder shall be reduced by the amount of such payment. § 3474.6 Termination of the period of liability. The authorized officer shall not consent to termination of the period of liability under the lease bond unless an acceptable substitute bond has been filed or until all terms and conditions of the lease have been fulfilled. Subpart 3475-Lease Terms § 3475.1 Duration of leases. Leases shall be issued for a period of 20 years and so long thereafter as the condition of continued operation is met. If the condition of continued op eration is not met the lease shall be cancelled as provided in § 3452.2 of this title. § 3475.2 Dating of leases. (a) Leases will be dated and made effective the first day of the month following the date signed by the authorized officer. However, upon receipt of a prior written request, the authorized officer may date a lease to be effective on the first day of the month in which it is signed. (b) Future interest leases shall become effective on the date of vesting of title to the minerals in the United States as stated in the lease. § 3475.3 Land description. Compliance with § 3471.1 of this title is required. § 3475.4 Diligent development and continued operation. (a) Each lease shall require (1) diligent development, and (2) either (i) continued operation except when operations under the lease are interrupted by strikes, the elements, or casualties not attributable to the lessee, or (ii) in lieu thereof, when the Secretary determines that the public interest will be served, payment of an advance royalty as described in § 3473.3-2(b) of this title. (b) For coal leases issued before August 4, 1976, the 10 lease-year period for achieving diligent development may be increased as follows: (1) Upon application by the lessee, the 10 lease-year period shall be extended by an amount of time equal to the period during which diligent development is, in the opinion of the Secretary, significantly impaired by (i) a strike, the elements, or casualties not attributable to the lessee, (ii) an administrative delay in the Department which is not caused by the lessee's action, and (iii) extraordinary circumstances not attributable to the lessee and not foreseeable by a reasonably prudent operator. In determining whether any of the conditions listed in paragraph (b)(1) (i), (ii), or (iii) of this section occurred and whether one or more of those conditions did, in fact, significantly impair diligent development, the Secretary's finding shall be final. The Secretary shall, however, not find to be an extraordinary circumstance under paragraph (b)(1)(iii) of this section any condition arising out of normally foreseeable business risks such as: fluctuations in prices, sales, or costs, including foreseeable costs of compliance with requirements for environmental protection; commonly experienced delays in delivery of supplies or equipment; or inability to obtain sufficient sales. (2) Upon application by the lessee, the Secretary may grant one extension, not exceeding five years, of the 10 lease-year period because of (i) time needed to complete development of advanced technology, e.g., in situ, gasification or liquefaction processes; (ii) the magnitude of the project (ordinarily magnitude means a mine in which the production in the first year after the end of the extended period for diligent development is expected to be at least two million tons if an underground mining operation or five million tons if a surface mining operation); or (iii) a contract which is a firm commitment for the sale or use of the first one-fortieth of the LMU reserves after the 10-year period. Regardless of the reason for granting an extension, the lessee shall produce the first one-fortieth of the LMU reserves before the end of the extended term. (c) At the time when the Secretary grants an extension under paragraphs (a) and (b) of this section, the lessee shall be notified of the revised date by which coal shall be produced in commercial quantities. § 3475.5 Logical mining unit. (a) Criteria for approving or directing establishment of an LMU containing more than a single Federal lease shall be established and applied by the Geological Survey. Each lease shall automatically be considered to constitute an LMU on the effective date of the lease or June 1, 1976, whichever is later. The lease LMU may, at a later date, be enlarged by the addition of other Federal leases or with interests in non-Federal coal deposits, or both. An LMU containing any interest other than a single Federal lease shall become effective only at the direction of the Mining Supervisor, or by designation during the normal tract delineation phase of the coal activity planning process, or upon its approval by the Mining Supervisor when requested by the lessee. The Mining Supervisor shall not direct or approve the establishment of such an LMU unless it is determined that the maximum economic recovery of all Federal coal deposits in the LMU will be achieved. The boundaries of an LMU may later be changed either upon application by the lessee and with the approval of the Mining Supervisor after consultation with the authorized officer, or by direction of the Mining Supervisor after consultation with the authorized officer. (b) When a lease is included in an ILMU with other Federal leases or with interests in non-Federal coal deposits, the terms and conditions of the Federal lease or leases shall be amended so that they are consistent with the requirements imposed on the LMU of which it has become a part. In particular, diligent development, continued operation, and production in commercial quantities anywhere within the LMU, with respect to either Federal or non-Federal coal deposits, shall be considered to have occurred on each Federal lease in the LMU. The rental and royalty payments of all Federal leases in an LMU shall be combined, and advance royalties paid on any Federal lease in that LMU may, at the request of the lessee, be credited against those combined royalties. (c) If, under the provisions of § 3452.1, the authorized officer accepts the relinquishment of any coal deposits in a lease, the LMU reserves shall be adjusted. When the Mining Supervisor is determining the LMU reserves, the lessee shall be consulted about any coal deposits subject to the lease which the lessee does not intend to mine. The lessee shall also be consulted about the rights the lessee is prepared to surrender to decrease the LMU reserves upon which the requirements of diligent development, continued operation, and production in commercial quantities will be based. Subpart 3501-Lands Subject to Leasing 3501.1 Public Domain. 3501.1-1 Protection of preexisting rights. 3501.1-2 Unsurveyed lands, General. 3501.1-3 Description of lands in offer. 3501.1-6 Rejections. 3501.2 Acquired lands. 3501.2-1 Lands and deposits not subject to leasing. 3501.2-2 Sale or conveyance of lands. 3501.2-3 Outstanding permits and leases. 3501.2-4 Description of lands in application. 3501.2-5 Acreage limitations. 3501.2-6 Consent of administering agency. 3501.2-7 Lands subject to leasing. 3501.3 Withdrawn, reserved or segregated. 3501.3-1 Lands and deposits not subject to leasing. 3501.3-2 Consent of administrator. 3501.3-3 Transfer of surface control. 3501.4 Special leasing acts. 3501.4-1 Lands and deposits subject to prospecting and leases. 3501.4-2 Consent of administrator. |