§ 3568.4 Leases.

§ 3568.4-1 Qualifications.

Leases may issue to (a) citizens of the United States, (b) associations of such citizens, and (c) corporations organized under the laws of the United States or of any State thereof.

§ 3568.4-2 Leasing units.

Leasing units may not exceed 640 acres consisting, if the lands are surveyed, of legal subdivisions in reasonably compact form or, if the lands are not surveyed, of a square or rectangular area with north and south and east and west boundaries so as to approximate legal subdivisions described by metes and bounds connected to a corner of the public survey by courses and distances. The authorized officer of the Bureau of Land Management may prescribe a lesser area for any mineral deposit if the Geological Survey reports that such lesser area is adequate for an economic mining operation.

§ 3568.4-3 Royalties, rentals and minimum royalties.

Rentals and royalties will be determined on the basis of the fair market value. In no event shall the rentals or royalties be less than:

(a) Fifty cents per acre payable annually in advance until production is obtained.

(b) One dollar per acre after production is obtained as a minimum royalty payable annually in advance.

(c) Two percent of the amount or value of the minerals mined, the exact amount of royalty to be fixed prior to the issuance of the lease.

§ 3568.4-4 Terms and conditions.

Each lease will contain provisions for the following:

(a) Diligent development of the leased property except when operations are interrupted by strikes, the elements, or casualties not attributable to the lessee unless operations are suspended upon a showing that the lease cannot be operated except at a loss because of unfavorable market conditions;

(b) Occupation and use of the surface of the claim shall be restricted to

such as is reasonably necessary to the exploration, development and extraction of the leased minerals and subject to any special rules to protect the values of the recreation area;

(c) No vegetation will be destroyed or disturbed except where necessary to mine and remove the minerals;

(d) Lessee shall not conduct operations in such a manner as to adversely affect the purpose of the Central Valley project through dumping, drainage, or otherwise;

(e) Lessee shall not erect any structure or open or construct roads or vehicle trails without first obtaining written permission from an authorized officer or employee of the National Park Service. The permit for a road or trail may be conditioned upon the permittee's maintaining the road or trail in passable condition, satisfactory to the officer in charge of the area so long as it is used by the permittee or his successor;

(f) The right is reserved to insert other terms in the lease when deemed necessary for the protection of the surface, its resources and use for recreation.

§ 3568.4-5 Duration of lease.

Leases will be issued for a period of 5 years. Any lease in good standing upon which production in paying quantities has been obtained will be subject to renewal for successive 5 year terms on such reasonable terms as may be prescribed by the Secretary of the Interior. Application for renewal must be filed within 90 days prior to the termination of the lease term for which renewal is sought unless land has been withdrawn from the recreation area at the expiration of such term.

§ 3568.5 Lease by competitive bidding.

Leases may be offered competitively for any land applied for under this part without regard to the quantity or quality of the mineral deposit that may be present therein.

§ 3568.6 Disposal of materials.

Materials within the public lands covered by the regulations in this part which are not subject to the provisions of §§ 3568.2-1 and 3568.2-2 of this sec

(a) The Materials Act of July 31, 1947, amended by the acts of July 23, 1955 and September 25, 1962 (30 U.S.C. 601, 602), authorizes the disposal of mineral materials including, but not limited to, petrified wood and common varieties of sand, stone, gravel, pumice, pumicite, cinders and clay, in the public land of the United States (including the O&C lands as described in § 5040.0-3 of this chapter), if the disposal of such materials (1) is not otherwise expressly authorized by law, including, but not limited to the act of June 28, 1934, as amended (43

U.S.C. 315), and the United States mining laws, and (2) is not expressly prohibited by the laws of the United States, and (3) would not be detrimental to the public interest. Disposals of pumicite, within certain areas of the Katmai National Monument, Alaska, may also be made under this act, however, under appropriate contract conditions for the protection of the monument. Act of April 15, 1954 (68 Stat. 53) (expired April 15, 1969, but reference is retained for adjudication of pending applications).

(b) Where the lands have been withdrawn in aid of a function of a Federal department or agency other than the Department of the Interior, or of a State, county, municipality, water district or other local governmental subdivision or agency, the Secretary of the Interior may make disposals under the regulations in this part only, with the consent of such Federal department or agency or of such State or local governmental unit. The act provides that the Secretary of Agriculture shall dispose of materials from lands administered by him for national forest purposes or for purposes of title III of the Bankhead-Jones Farm Tenant Act or where withdrawn for any other function of the Department of Agriculture. See 36 CFR, Part 251 for Forest Service regulations relative to the disposal of materials in the national forests.

(c) Disposal of mineral materials under the act may not be made from any lands in any national park or national monument or from any Indian lands or lands set aside or held for the use or benefit of Indians including lands over which jurisdiction has been transferred to the Department of the Interior by Executive Order for the use of Indians.

(d) The Act authorizes the Secretary of the Interior in his discretion to permit free use of mineral materials by any Federal or State governmental agency unit or subdivision, including municipalities, or any association or corporation not organized for profit for use other than for commercial or industrial purposes or resale.

[35 FR 9727, June 13, 1970, as amended at 41 FR 29122, July 15, 1976]

(b) "Director" means the Director of the Bureau of Land Management.

(c) "Authorized officer" means the Government official who has been duly authorized to sign a contract for the sale of mineral materials from public lands or to supervise operations and take action under such contract.

(d) "Mineral materials” include, but are not limited to "common varieties" of sand, stone, gravel, pumice, pumicite, cinders, clay and other mineral materials, and petrified wood.

(e) The word "Act" when used in this part refers to the Act of July 31, 1947, as amended.

Subpart 3601-Limitations; Disposal of Mineral Materials

SOURCE: 35 FR 9728, June 13, 1970, unless otherwise noted.

§ 3601.1 Disposal when valid claims exist under public land laws or when certain unpatented mining claims exist.

Mineral material disposals may not be made under the Act from public lands on which: (1) There are valid, existing claims to the land by reason of settlement, entry, or similar rights obtained under the public land laws; (2) there are any unpatented mining claims located either before or after July 23, 1955, which have not been cancelled by appropriate legal proceedings; (3) there are valid unpatented mining claims located on or after July 23, 1955, for valuable minerals that are not a "common variety", occurring in, or associated with "common variety" minerals.

§ 3601.2 Damage to lands or to other re

sources.

No sale of material shall be made under this part where the authorized officer determines that the aggregate damages to public lands and resources will exceed the benefits derived from such disposal. Sound conservation practices shall be exercised by all permittees or purchasers in the removal

of materials under the provisions granted by this part.

§ 3601.3 Appropriation subject to material sale.

Any subsequent settlement, location, lease, sale, or other appropriation under the general land laws, including the mineral leasing and mining laws, of lands covered by a materials sale contract, shall be subject to the outstanding contract of sale. Unless otherwise provided by contract, the contract purchaser, notwithstanding any subsequent appropriation under other provisions of the general land laws, shall have the right to extract and remove the materials until the termination of the contract. During the term, the purchaser shall have the right to use and occupy so much of the described land as is reasonably incidental and necessary to the fulfillment of the contract. All contracts of sale shall be subject to the continuing rights of the United States to use the surface and to issue leases, permits, and licenses involving the use and occupancy of the surface, provided that such subsequently authorized use shall not endanger or materially interfere with the purchaser's production or removal of the materials under contract.

Subpart 3602-Trespass

§ 3602.1 Unauthorized removal of mineral

materials.

The extraction, severance, injury, or removal of timber or mineral materials from public lands under the jurisdiction of the Department of the Interior, except when authorized by law and the regulations of the Department, is an act of trespass. Trespassers will be liable in damages to the United States, and will be subject to prosecution for such unlawful acts. See Subpart 9239 of this chapter.

[35 FR 9728, June 13, 1970]

Subpart 3604-Community Pits

§ 3604.1 Non-exclusive disposals.

Non-exclusive disposals may be made under Subparts 3610 and 3621 from

§ 3610.2 Appraisal and measurements.

(a) No materials, other than that designated in the contract or permit, shall be extracted unless designated in advance and written permission given by the authorized officer and payment made therefor.

(b) All materials to be sold shall be appraised and in no case shall it be sold at less than the appraised value.

(c) Such mineral material shall be measured by volume, weight, or truck tally, or combination of these methods, or such other form of measurement as the authorized officer determines to be in the public interest.

§ 3610.3 Qualifications of applicants.

A bidder or purchaser for the sale of mineral materials must be (a) an individual who is a citizen of the United States; (b) a partnership; (c) an unincorporated association composed wholly of such citizens; or (d) a corporation authorized to transact business in the States in which the mineral material is located. A bidder must also have submitted a deposit in advance of the sale as required by § 3612.4.

§ 3610.4 Payments.

(a) Mineral materials shall not be removed unless advance payment has been made as provided in the contract.

(b) For sales of not more than $2,000 the full amount shall be paid at the execution of the contract.

(c) Fixed unit prices in excess of $2,000 may be paid by installments. Installments shall be at least 10 percent of the total purchase price or $1,000, whichever is less. As provided in § 3612.4, the first installment must be paid as a deposit when the bid is submitted. The second installment must be paid prior to the commencement of removal operations. Remaining installments shall be due and payable without notice whenever the value of the material removed shall equal the sum of the second and subsequent installments paid by the purchaser. The total amount of the purchase price must be paid prior to 60 days before the expiration date of the contract. The purchaser shall not be entitled to a refund on a fixed unit sale even though the amount of material re

moved or designated for removal may be less than the estimated total volume shown in the contract.

(d) Sales for the duration of production or sale of all the mineral materials in a specified area which exceed $2,000 shall be conditioned on the following terms of payment.

(1) A first installment of not less than $500 shall be paid upon the execution of the contract. Remaining installments in amounts to be specified shall be due and payable without notice whenever the value of the material removed shall equal the sum of the first and subsequent installments. Mineral materials shall not be removed unless the advance installment has been made as provided in the contract.

(2) All contracts for sale of material under this paragraph (d)(2) shall provide for periodic reappraisal of the mineral material. The frequency of the reappraisal shall be specified in the sale contract. If, upon termination, the total payments made under the contract exceed total value of the material removed, such excess shall be returned to the purchaser, except for payments made in lieu of minimum production pursuant to paragraph (d)(3) of this section.

(3) Annual production shall be required in an amount sufficient to return to the United States a sum of money equal to the first installment. In lieu of such minimum production there shall be an annual payment in the amount of the first installment which will nto be credited to future production. Payments for or in lieu of minimum annual production shall be due and payable and must be received by the authorized officer on or before the anniversary date of the execution of the contract, failing which the contract shall be considered breached and terminated, and all money paid pursuant to the contract shall be forfeited.

(e) The purchaser shall be required to make a report of operations under his contract with each installment payment, and to provide verification of the amount of material removed when called upon to do so by the authorized officer.

(4) Negotiable securities of the United States.

(b) Where the materials sale contract has required a bond in connection with construction of a road, the authorized officer may, upon satisfactory completion of the road construction, reduce the amount of the performance bond by the amount of all or a portion of the estimated road construction costs: Provided, however, That the total amount of the performance bond shall, in no event, be reduced below 20 percent of the total contract price.

§ 3610.6 Assignments.

(a) The purchaser may not assign the contract or any interest therein without the written approval of the authorized officer. An assignment shall contain all the terms and conditions agreed upon by the parties thereto.

(b) The authorized officer will not approve any proposed assignment involving contract performance unless the assignee (1) is authorized to transact business in the State in which the mineral material is located; (2) submits such information as is necessary to assure the authorized officer of his ability to fulfill the contract; and (3) furnishes a performance bond as required by § 3610.5 or obtains a commitment from the previous surety to be bound by the assignment when ap