to the national economy. Each item transferred to the Bureau of Mines shall be microfilmed by the agency having original custody of such files and records and such microfilm shall be delivered to The National Archives.

(c) Such portions of the aforesaid files and records as are not retained by the Bureau of Mines shall be subject to disposal in the manner prescribed by law.

(d) The National Archives shall reimburse the agencies for the out-of-pocket cost of microfilming. (Aug. 13, 1946, ch. 961, 60 Stat. 1057.)

§§ 29, 30, 33, 34, 39.

Transfer of functions.-United States Supervisor of Surveys and register of district land offices were abolished and their functions transferred to the Bureau of Land Management by 1946 Reorg. Plan. No. 3, § 403, eff. July 16, 1946, 11 F. R. 7876, 60 Stat. 1100, and regulations thereunder.

LEASES AND PROSPECTING PERMITS

1. GENERAL PROVISIONS

§ 181. Lands subject to disposition; persons not entitled to benefits; helium rights reserved.

Act of Aug. 8, 1946, § 1, amended section by excluding lands containing such enumerated deposits in cities, towns, villages, and national monuments, and such lands acquired under Acts subsequent to Feb. 25, 1920, from disposition in the form and manner provided by the 1920 Act.

Act Aug. 1946, § 11, amended section 5 of act Feb. 7, 1927, to exclude from the latter the incorporation, by reference of this section, this section having been amended by section 1 of said act Aug. 8, 1946 to include deposits of potassium.

Saving clause.-Section 15 of act Aug. 8, 1946, provided: "No repeal or amendment made by this act (secs. 181-184, 185-188, 189-194, 201, 202-209, 211–214, 223, 224–226, 226d, 226e, 227–229a, 241, 251, 261-263 of this title) shall affect any right acquired under the law as it existed prior to such repeal or amendment, and such right shall be governed by the law in effect at the time of its acquisition; but any person holding a lease on effective date of this act (Aug. 8, 1946) may, by filing a statement to that effect, elect to have his lease governed by the applicable provisions of this act instead of by the law in effect prior thereto."

§ 184. Limitation on number of leases to one person; combinations or unlawful trusts; options.

Act Aug. 8, 1946, amended section principally by doubling the amount of land that may be leased by any person or corporation in any one State and abolishing the former acreage limitation of 2,560 acres on one structure; by excluding operating contracts and leases held in common from the definition of "association"; by inserting the provisions relating to options; and by omitting the provisions relating to cooperative or unit plans and operating, drilling or development contracts.

Saving clause, see note under section 181 of this title.

Surrender of leases, see section 188a of this title.

§ 187a. Same; oil or gas leases; partial assignments.

Act Aug. 8, 1946, ch. 916, 60 Stat. 955, provided for assignment or sublease of all or part of lease subject to final approval of Secretary of the Interior.

§ 187b. Same; oil or gas leases; written relinquishment of rights; release of obligations.

Act Aug. 8, 1946, ch. 916, § 80, 60 Stat. 956, provided that lessee may relinquish his rights any time by filing relinquishment.

§ 188. Forfeiture or cancellation of leases.

Act Aug. 8, 1946, ch. 916, § 9, 60 Stat. 956, amended section by adding paragraph relating to cancellation of leases by Secretary of the Interior.

§ 188a. Surrender of leases.

Transfer of functions.-The General Land Office was abolished and its functions transferred to the Bureau of Land Management by 1946 Reorg. Plan No. 3, § 403, eff. July 16, 1946, 11 F. R. 7876, 60 Stat. 1100, and regulations thereunder.

§ 192. Payment of royalities in oil or gas; sale of such oil or gas. All royalty accruing to the United States under any oil or gas lease or permit under sections 181-194, 201, 202-208, 211-214, 223–229, 241, 251, and 261-263 of this title on demand of the Secretary of the Interior shall be paid in oil or gas.

Upon granting any oil or gas lease under said sections, and from time to time thereafter during said lease, the Secretary of the Interior shall, except whenever in his judgment it is desirable to retain the same for the use of the United States, offer for sale for such period as he may determine, upon notice and advertisement on sealed bids or at public auction, all royalty oil and gas accruing or reserved to the United States under such lease. Such advertisement and sale shall reserve to the Secretary of the Interior the right to reject all bids. whenever within his judgment the interest of the United States demands; and in cases where no satisfactory bid is received or where the accepted bidder fails to complete the purchase, or where the Secretary of the Interior shall determine that it is unwise in the public interest to accept the offer of the highest bidder, the Secretary of the Interior, within his discretion, may readvertise such royalty for sale, or sell at private sale at not less than the market price for such period, or accept the value thereof from the lessee: Provided, That inasmuch as the public interest will be served by the sale of royalty oil to refineries not having their own source of supply for crude oil, the Secretary of the Interior, when he determines that sufficient supplies of crude oil are not available in the open market to such refineries, is authorized and directed to grant preference to such refineries in the sale of oil under the provisions of this section, for processing or use in such refineries and not for resale in kind, and in so doing may sell to such refineries at private sale at not less than the market price any royalty oil accruing or reserved to the United States under leases issued pursuant to this Act, as amended: Provided further, That in selling such royalty oil the Secretary of the Interior may at his discretion prorate such oil among such refineries in the area in which the oil is produced: Provided further, That pending the making of a permanent contract for the sale of any royalty, oil or gas as herein provided, the Secretary of the Interior may sell the current product at private sale, at not less than the market price: And Provided further, That any royalty, oil, or gas may be sold at not less than the market price at private sale to any department or agency of the United States. (As amended July 13, 1946, ch. 574, 60 Stat. 533.)

Act July 13, 1946, amended section by inserting first two provisos which were enacted in order to assist small business enterprise by encouraging the operation of oil refineries not having an adequate supply of crude oil.

§ 194. Fees and commissions of registers.

Transfer of functions.-Registers of district land offices were abolished and their functions transferred to managers of district land offices under the Bureau of Land Management by 1945 Reorg. Plan. No. 3, § 403, eff. July 16, 1946, 11 F. R. 7876, 60 Stat. 1100, and regulations thereunder.

§ 209. Waiver, suspension or reduction of rentals or royalties; extension of lease on suspension of operations.

Act Aug. 8, 1946, ch. 916, § 10, 60 Stat. 957, amended section by inserting provision for Secretary of Interior to waive, suspend or reduce royalties or rentals, and providing for applicability to cooperative or unit plans.

§ 223a. Repealed. Aug. 8, 1946, ch. 916, § 14, 60 Stat. 958. Saving clause, see note under section 181 of this title.

§ 225. Condition of lease; forfeiture for violation.-All leases of lands containing oil or gas, made or issued under the provisions of sections 181-184, 185-188, 189-194, 201, 202-209, 211-214, 223, 224226, 226e, 227-229a, 241, 251, 261-263 of this title, shall be subject to the condition that the lessee will, in conducting his explorations and mining operations, use all reasonable precautions to prevent waste of oil or gas developed in the land, or the entrance of water through wells drilled by him to the oil sands or oil-bearing strata, to the destruction or injury of the oil deposits. Violations of the provisions of this section shall constitute grounds for the forfeiture of the lease, to be enforced as provided in said sections. (As amended Aug. 8, 1946, ch. 916, § 2, 60 Stat. 951.)

Act Aug. 8, 1946, cited to text amended section principally by omitting the condition that no wells should be drilled within two hundred feet of the boundaries of the leased lands.

Saving clause, see note under section 181 of this title.

§ 226. Lease of oil or gas lands; royalties and annual rentals; drainage agreements. All lands subject to disposition under sections 181-184, 185-188, 189-194, 201, 202-209, 211-214, 223, 224-226, 226d, 226e, 227-229, 241, 251, 261-263 of this title which are known or believed to contain oil or gas deposits may be leased by the Secretary of the Interior. When the lands to be leased are within any known geological structure of a producing oil or gas field, they shall be leased to the highest responsible qualified bidder by competitive bidding under general regulations, in units of not exceeding six hundred and forty acres, which shall be as nearly compact in form as possible, upon the payment by the lessee of such bonus as may be accepted by the Secretary and of such royalty as may be fixed in the lease which shall not be less than 121/2 per centum in amount or value of the production removed or sold from the lease. When the lands to be leased are not within any known geological structure of a producing oil or gas field, the person first making application for the lease who is qualified to hold a lease under said sections shall be entitled to a lease of such lands without competitive bidding. Such leases shall be conditioned upon the payment by the lessee of a royalty of 1212 per centum in amount or value of the production removed or sold from the lease. Leases issued under this section shall be for a primary term of five years and shall continue so long thereafter as oil or gas is produced in paying quantities.

Any lease issued under said sections upon which there is production during or after the primary term shall not terminate when such production ceases if diligent drilling operations are in progress on the land under lease during such period of nonproduction.

"Upon the expiration of the primary term of any noncompetitive lease maintained in accordance with applicable statutory requirements and regulations, the record titleholder thereof shall be entitled to a single extension of the lease, unless then otherwise provided by law, for such lands covered by it as are not on the expiration date of the lease within the known geological structure of a producing oil or gas field or withdrawn from leasing under this section. A withdrawal, however, shall not affect the right to an extension if actual drilling operations on such lands were commenced prior thereto and were being diligently prosecuted on such expiration date. No withdrawal shall be effective within the meaning of this section until ninety days after notice thereof shall be mailed, registered mail, to each lessee to be affected by such withdrawal. Such extension shall be for a period of five years and so long thereafter as oil and gas is produced in paying quantities and shall be subject to such rules and regulations as are in force at the expiration of the initial five-year term of the lease. No extension shall be granted unless an application therefor is filed by the record titleholder within a period of ninety days prior to such expiration date. Any noncompetitive lease which is not subject to such extension in whole or in part because the lands covered thereby are within the known geologic structure of a producing oil or gas field at the date of expiration of the primary term of the lease, and upon which drilling operations are being diligently prosecuted on such expiration date, shall continue in effect for a period of two years and so long thereafter as oil or gas is produced in paying quantities.

All leases issued under this section shall be conditioned upon the payment by the lessee in advance of a rental of not less than 25 cents per acre per annum. A minimum royalty of $1 per acre in lieu of rental shall be payable at the expiration of each lease year beginning on or after a discovery of oil and gas in paying quantities on the lands leased: Provided, That in the case of lands not within any known geological structure of a producing oil or gas field, the rentals for the second and third lease years shall be waived unless a valuable deposit of oil or gas be sooner discovered.

Whenever it appears to the Secretary of the Interior that lands. owned by the United States are being drained of oil or gas by wells drilled on adjacent lands, he is authorized and empowered to negotiate agreements whereby the United States, or the United States and its lessees, shall be compensated for such drainage, such agreements to be made with the consent of the lessees affected thereby and the primary term of any lease for which compensatory royalty is being paid shall be extended by adding thereto a period equal to the period during which such compensatory royalty is paid. (As amended Aug. 8, 1946, ch. 916, § 3, 60 Stat. 951.)

Act Aug. 8, 1946, cited to text, amended section principally by substituting, with respect to the leasing of lands not within a known geological structure of a producing oil or gas field, a royalty rate of 122 per cent without further provision as to lease terms or quantity of production; by substituting a minimum royalty of $1 per acre per annum after discovery for the advance rental

of not less than 25 cents per acre per annum required prior to discovery; by providing that all leases shall be for a primary term of 5 years which shall continue thereafter for so long as oil or gas is produced in paying quantities, and that leases, with certain exceptions, shall be subject to one renewal for 5 years, and, if not subject to renewal, shall extend for an additional 2 years if diligent operations are in progress at the lease expiration date. Saving clause, see note under section 181 of this title.

§ 226a. Repealed. Aug. 8, 1946, ch. 916, § 14, 60 Stat. 958. Provisions of section are now covered by section 226 of this title. Saving clause, see note under section 181 of this title.

§ 226b. Repealed. Aug. 8, 1946, ch. 916, § 14, 60 Stat. 958.

Section, act July 29, 1942, ch. 534, § 1, as amended by acts Dec. 22, 1943, ch. 376, 57 Stat. 608; Sept. 27, 1944, ch. 429, 58 Stat. 755; Nov. 30, 1945, ch. 495, 59 Stat. 587, related to preference right to new oil and gas lease upon expiration of fiveyear noncompetitive oil and gas lease, and is now covered by section 226 of this title.

Saving clause, set note under section 181 of this title.

§ 226c. Reduction of royalties under existing leases.-From and after August 8, 1946, the royalty obligation to the United States under all leases requiring payment of royalty in excess of 1212 per centum, except leases issued or to be issued upon competitive bidding, is reduced to 122 per centum in amount or value of production removed or sold from said leases as to (1) such leases, or such part of the lands subject thereto, and the deposits underlying the same, as are not believed to be within the productive limits of any oil or gas deposit, as such productive limits are bound by the Secretary to exist on August 8, 1946, and (2) any production on a lease from an oil or gas deposit which was discovered after May 27, 1941, by a well or wells drilled within the boundaries of the lease, and which is determined by the Secretary to be a new deposit; and (3) any production on or allocated to a lease pursuant to an approved unit or cooperative agreement from an oil or gas deposit which was discovered after May 27, 1941, on land committed to such agreement, and which is determined by the Secretary to be a new deposit, where such lease was included in such agreement at the time of discovery, or was included in a duly executed and filed application for the approval of such agreement at the time of discovery. (Aug. 8, 1946, ch. 916, § 12, 60 Stat. 957.)

Saving clause, see note under section 181 of this title.

§ 226d. Exchange of leases; royalties.-The Secretary of the Interior shall, upon timely application therefor, issue a new lease in exchange for any lease issued for a term of twenty years, or any renewal thereof, or any lease heretofore issued in exchange for a twentyyear lease, such new lease to be for a primary term of five years and so long thereafter as oil or gas is produced in paying quantities and at a royalty rate of not less than 1212 per centum in amount or value of the production removed or sold from such leases, except that the royalty rate shall be 122 per centum in amount or value of the production removed or sold from said leases, as to (1) such leases, or such part of the lands subject thereto, and the deposits underlying the same, as are not believed to be within the productive limits of any producing oil or gas deposit, as such productive limits are found by the Secretary to exist on the effective date of this section, and (2) any production on a lease from an oil or gas deposit which was discovered after May 27, 1941, by a well or wells drilled within the boundaries of the lease, and