Hardrock Mining: State Regulation

Order Code RL32813

CRS Report for Congress

Received through the CRS Web

Hardrock Mining:

State Regulation

March 14, 2005

name redacted

Legislative Attorney

American Law Division

Congressional Research Service ˜ The Library of Congress

Hardrock Mining: State Regulation

Summary

Various state and federal laws play important roles in the regulation of mining

activities. Mining for hardrock minerals on federal public lands is governed

primarily by the General Mining Act of 1872. The General Mining Act authorizes

a prospector to locate and claim an area believed to contain a valuable mineral

deposit, subject to the payment of certain fees. The General Mining Act does not,

however, require payment of a production-related royalty, as is required for federal

oil, gas, and other minerals governed by more recently enacted laws. Critics of the

General Mining Act suggest that the lack of a royalty payment serves as an

unnecessary subsidization of the mining industry, while proponents of the current

system suggest that it encourages investment in the domestic mining industry.

Legislation has been introduced in previous Congresses that would have required

royalty payments, but such provisions have not been enacted into law.

Many states have enacted laws governing mineral rights and mineral

development on state-owned lands. Of these laws, those applicable to hardrock

minerals on state-owned lands vary considerably. Unlike the comparable federal law,

however, many states now provide for state-owned hardrock mineral leases and

authorize royalty and rental payment collection.

In addition to financial issues, environmental regulation of hardrock mining also

varies significantly under federal and state law. Significantly, the federal Surface

Mining Control and Reclamation Act, which requires certain environmental

remediation activities with respect to surface coal mining on federal and non-federal

lands, is not applicable to hardrock minerals. Legislative proposals to address

concerns related to hardrock mining environmental impacts and abandoned mine

reclamation have been introduced in past Congresses (e.g. H.R. 2141 and H.R. 504

in the 108th Congress), but none have been enacted into law. In addition to federal

regulation, states are authorized to implement surface mining reclamation laws and

many have chosen to regulate hardrock mining operations in addition to surface coal

mining. These laws vary from state to state, but most apply equally to federal, state,

and private lands.

This report provides a survey of state laws governing these above-mentioned

aspects of hardrock mining. It is not meant to serve as a comprehensive description

of each state’s regulatory program, but instead provides an overview of the regulation

of several specific activities associated with hardrock mineral development; focusing

on (1) state imposed royalty rates and rental charges for hardrock minerals on state

lands and (2) reclamation and bonding requirements for hardrock mining activities

applicable to all mining operations.

Contents

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

List of Tables

State-by-State Summaries of Hardrock Mining Regulation . . . . . . . . . . . . . . . . . 4

Hardrock Mining: State Regulation

Overview

Both federal and state laws play important roles in the regulation of the mining

activities. Mineral development rights on federal public lands are governed by

several statutes applicable to specific resources. The 1872 General Mining Act1

governs access to hardrock minerals2 on federal public lands. The General Mining

Act authorizes claimants to locate and patent lode and placer claims on federal public

lands.3 Briefly, to stake a legitimate claim a prospector must locate a valuable

mineral deposit4 on or underlying federal lands eligible for entry under the act,5 and

comply with the procedures set out in the regulations of the Bureau of Land

Management (BLM).6 The claimant may remove all minerals from the claim, subject

to the terms of the Mining Act, even without obtaining a patent (title) to the minerals

or lands.7 The Mining Act does require the payment of certain fees to insure that a

1

General Mining Act of 1872, Act of May 10 1872, ch. 152, 17 Stat. 91, codified at 30

U.S.C. §§ 21-54 (2003).

2

Hardrock minerals include most metals and non-fuel nonmetals, such as gold, silver,

copper, zinc, barite, and fluorspar.

3

A lode is a mineral deposit found in a continuous vein form that is reasonably

distinguishable from neighboring nonmineral rock. Common examples are gold, silver, or

tin. 30 U.S.C. § 23. A placer claim is defined as those mineral deposits which are not lodes,

and are usually widely dispersed, unconsolidated mineral deposits such as gypsum.

Location is the process by which a mining claim is found and its boundaries delineated.

Patenting is a method through which the federal government passes title to a private entity.

4

30 U.S.C. 22, 23; see United States v. Coleman, 390 U.S. 599 (1968).

5

30 U.S.C. §§ 23, 28, 35-36.

6

43 U.S.C. § 1744(a), (c).

7

The law also authorizes mineral claimants to patent — or acquire title to — the federal

lands or minerals encompassed within a mining claim, so long as established procedures are

satisfied and specified conditions are met. 30 U.S.C. §§ 29, 37. The availability of a patent

is often cited as a reasonable incentive to encourage domestic mining operations, or

conversely as an anachronistic windfall to industry. See Andrew P. Morriss, et al.,

Homesteading Rock: A Defense of Free Access Under the General Mining Law of 1872, 34

ENVTL. L. 745 (2004); Daphne Werth, Comment, Where Regulation and Property Rights

Collide: Reforming the Hardrock Act of 1872, 65 U. COLO. L. REV. 427, 443 (1994). It

should be noted that the minerals on a valid claim may be developed without a patent, and

Congress has imposed an annual moratorium on the processing of new patent applications,

most recently in Pub. L. No. 108-447.

CRS-2

claim is maintained;8 however, unlike the laws governing oil, gas, and several other

minerals, the Mining Act does not require payment of a production-related royalty.

Legislation has been introduced in previous Congresses to reform the General Mining

Act in a variety of ways, including provisions for royalty payments, although no such

legislation has been enacted into law.9

Most states also have statutes governing exploration and mining on state lands,

with laws ranging from single-paragraph authorizations to detailed regulation

applying different standards to different minerals and land classifications. This

makes it difficult to describe a common model for state mining regulation. Many

states, like the federal system outlined above, provide separate regulatory regimes for

hardrock minerals and oil, gas, and coal. Unlike current federal law, however, many

states now charge royalty fees associated with hardrock mineral production in

addition to land use rental fees. In some instances royalty and rental rates are

specified by statute, and, in others, such determinations are left to state administrative

agencies.

State and federal law also regulate certain aspects of the environmental impacts

caused by mining activities, often regardless of whether such activities take place on

federal, state, or private lands. At the federal level, multiple environmental laws will

generally impact mineral development, including the National Environmental Policy

Act,10 the Clean Air Act,11 the Federal Water Pollution Control Act (Clean Water

Act),12 the Safe Drinking Water Act,13 the Toxic Substance Control Act,14 the

Comprehensive Environmental Response Compensation and Liability Act,15 and the

Endangered Species Act.16

In addition, the federal Surface Mining Control and Reclamation Act

(SMCRA)17 was enacted to regulate the environmental impacts of surface coal

mining operations on federal, state, and private lands. SMCRA requires coal mine

operators to obtain a permit for surface mines or surface operations associated with

underground mines and provides specific reclamation standards for land and

8

30 U.S.C. § 28f(a).

9

See Robert J. Uram, Prospects for Mining Law Reform, 12 NAT. RESOURCES & ENV'T 191,

191-95 (1998) (providing an overview of attempts to reform the General Mining Act).

10

42 U.S.C. §§ 4321-4347.

11

42 U.S.C. §§ 7401-7671.

12

33 U.S.C. §§ 1251-1387.

13

42 U.S.C. §§ 300f-300j(25).

14

15 U.S.C. §§ 2601-2692.

15

42 U.S.C. §§ 9601-9675.

16

16 U.S.C. §§ 1531-1544.

17

30 U.S.C. §§ 1201-1338.

CRS-3

resources affected by these activities.18 In addition, operators must, among other

things, submit reclamation and operation plans and supply performance bonds and

financial guarantees sufficient to cover the costs of reclamation.19 The states are

authorized to implement SMCRA, and, while its provisions are not applicable to

hardrock mining operations, many states have enacted state laws with similar

reclamation requirements applicable to hardrock mining activities as well.20

This report provides a survey of state laws governing hardrock mining. It is not

meant to serve as a comprehensive description of each state’s regulatory program, but

instead provides an overview of the regulation of several specific activities associated

with hardrock mineral development. This report focuses on (1) state imposed royalty

rates and rental charges for hardrock minerals on state lands and (2) reclamation and

bonding requirements for hardrock mining activities. As mentioned above, state

reclamation and bonding requirements are typically applicable on federal state and

private lands. Variations from this scheme are specifically identified.

18

See id. §§ 1265(b)(1)-(25), 1291(28), 1266(b)(1)-(12).

19

See 30 U.S.C. § 1259(a), (b). The performance bond must cover the entire area of mining

operations and is “conditional upon faithful performance” of all SMCRA and permit

requirements. The exact amount is set by the regulatory authority, federal or state as

appropriate, and can be forfeited if the operator fails to adequately perform the requisite

reclamation. Several different types of bonds are permissible under the act and additional

alternative bonding programs may be implemented with approval by the Secretary of the

Interior. See also 43 C.F.R. §§ 3809.500 to 600(BLM bonding requirements for locatable

minerals; 43 C.F.R. § 3452.3(b) (bond required under the Mineral Leasing Act); 36 C.F.R.

§ 228.13 (U.S. Forest Service bonding requirements).

20

Id. § 1253(a).

CRS-4

State-by-State Summaries of Hardrock Mining Regulation

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Alabama

Ala. Code §§ 9-17-60 et seq. The Commissioner of

Conservation and Natural Resources (CNR) is authorized to

lease any lands under CNR jurisdiction for exploration,

development, and production of oil, gas and other minerals.

Lands of any other state agency may be leased for mineral

development by the Commissioner upon written request of

the head of such agency.

ALA. CODE §§ 9-16-1 et seq. The state requires a surface

mining permit that applies to hardrock mining operations.

Section 9-16-7 governs basic reclamation requirements.

A performance bond is required under section 9-16-8 for

surface mining. Bond form is to be determined by the

director of the state Department of Industrial Relations,

signed by the operator as principal and a state licensed

corporate surety. The bond amount is set by statute at $2,500

for each acre covered by the permit. In lieu of this bond, the

operator may deposit cash or negotiable U.S. bonds or AL

state or municipal bonds. AL law also provides for

increasing or reducing the total penalty of the bond (or

cash/securities) as land is added to or withdrawn from the

permit. (9-16-6). Bond substitution is required if the

corporate surety cancels the bond or loses its AL license.

When an operator has completed reclamation on a given tract

of land, the bond is to be released. Bonds may be forfeited

pursuant to civil action for violations of final director orders.

(9-16-11). Forfeited bonds are placed in the Surface Mining

Reclamation Fund and used for reclamation purposes. (9-1612).

Land is leased on the basis of competitive bids with leases

going to the highest bidder or otherwise most advantageous

offer. (9-17-65). State law does reference rentals,

royalties and other revenues, designating which state

agencies and state funds will receive which proportions of

accrued funds. (9-17-65). State statute does not, however,

appear to set a particular royalty or rental rate for stateowned hardrock minerals.

CRS-5

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Alaska

ALASKA STAT. §§ 38.05.135 et seq. State owned lands are

generally open to mineral development and may be obtained

by “permit or lease for the purpose of exploration,

development, and the extraction of minerals.”

ALASKA STAT. §§ 27.19.010 et seq. Minerals other than oil,

gas, and coal are subject to the following reclamation

standards. Mines are to be operated in a manner that prevents

“unnecessary and undue degradation” of land and waters, and

the operation must be reclaimed so as “to leave the site in a

stable condition.” (27.19.020). A reclamation plan must be

approved before mining can take place, and financial

assurance in an amount reasonably necessary to ensure

performance of the plan must be provided.

Financial assurance is generally capped at $750 per acre,

but there is no cap for lode claims. A bonding pool is also

provided for certain eligible mining operations where

participants pay a deposit and an annual fee not to exceed

15% and 5% of the otherwise required financial assurance

amount, respectively. (27.19.040).

Bonds may take the following forms: (1) a surety bond; (2) a

letter of credit; (3) a certificate of deposit; (4) a corporate

guarantee that meets certain financial tests; (5) payments into

the mine reclamation trust fund; or (6) any other form that

meets the above-referenced financial tests. (27.19.040).

Violation of reclamation requirements results in forfeiture of

the bond to the state pool. (27.19.040). Violators must pay

five times the normal bond amount for future operations.

(27.19.070).

Hardrock mineral royalty rates are set by statute at 3% of

net income as determined under section 43.65. (38.05.212).

They are also subject to the exploration incentive credit

authorized by section 27.30. Royalties may be taken in kind

when the commissioner of the Division of Lands

determines it to be in the best interests of the state.

(38.05.182). Interest on late royalty payments is also

provided for at the higher of 11% or “the rate of five

percentage points above the annual rate charged member

banks for advances by the 12th Federal Reserve District as

of the first day of that calendar quarter ....” in which the

royalty is deemed late. (38.05.135).

The holder of a mineral interest must pay a yearly rental fee

in advance for the right to continue to hold the mining right.

Rental fees are set at $200 for a two-year term for each site

and are thereafter determined by formula based on the

number of years since location and either the number of

lease acres or number of claims held. Rental amounts are

also credited against the production royalty. (38.05.211).

Failure to pay rent/royalty constitutes abandonment of

mining rights. (38.05.265).

CRS-6

State

Arizona

State Mineral Royalties and Rental Fees

ARIZ. REV. STAT. §§ 27-231 et seq. The state land

commissioner is authorized to lease state-owned metallic

ore and industrial minerals.

Rental: The commissioner must establish the annual land

rental for each lease prior to issuance. Rental fees are based

on an appraisal of the land not including the contributory

value of mining. The annual rental must also be (1) at least

the average rental assessed in Colorado, New Mexico and

Utah; and (2) payable in advance of lease agreement

execution and at the beginning of each annual period

thereafter. (27-234(A)). Royalty appraisal costs are added

to the amount due as rental. (27-234(E)).

Royalties must be at least 2% of the gross value of

produced minerals, and are to be paid monthly based on the

previous month. (27-234(B), (I)). The commissioner may

raise rates based on standard appraisal methods and market

rates to obtain fair market value. Royalty appraisal is

performed before the lease is issued and at each renewal.

Rates may be adjusted at any time if circumstances justify

changes. (27-234(C)). Gross value of minerals produced is

based on: (1) monthly average price as quoted by the

mineral commodities market/industry trade journals, as

determined by the commissioner and specified in the lease;

or (2) an appraisal that establishes the fair market price if

there is no published price quote. (27-234(B)).

Reclamation and Bonding

Financial Security for State Mineral Leases: ARIZ. REV.

STAT. § 27-235(E). The land commissioner may require

financial security to guarantee payment of royalties.

Financial security is also required for (1) surface reclamation

to a reasonable condition as described in the lease and (2)

losses to land caused by specified damages. Form: cash

deposit, a certificate of deposit, a surety bond or any other

form of financial assurance acceptable to the commissioner.

Metal Mine Reclamation: ARIZ. REV. STAT. §§ 27-901 et

seq., applicable to non-state lands only. Reclamation plan and

financial assurance required for surface disturbances over

five acres. (27-921, 27-923, 27-951). Plans must be renewed

annually and be accompanied by additional financial

assurance, if necessary. (27-955). Financial assurance must

be in a form provided for in 40 C.F.R.§ 264.143(f) or other

form acceptable to the inspector. (27-991, 27-931). Amount:

Inspector determines amount, assuming 3rd party will reclaim

land, unless operator can show financial ability to perform

reclamation; generally $2000 per acre of disturbance, unless

reduction based on rules or ability of operator to perform

reclamation is established. (27-992, 27-993). Operators may

apply for release for reclaimed areas and may provide

financial assurance incrementally. The Inspector must adopt

rules for forfeiture that provide for a hearing. (27-995 - 27997).

CRS-7

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Arkansas

ARK. CODE ANN. §§ 22-5-801 et seq. The Commissioner of

State Lands is authorized to lease oil, gas and “other

minerals” on state lands. A lease or permit is required

before “taking” any minerals. (22-5-805).

The Arkansas Open-Cut Land Reclamation Act: ARK.

CODE ANN. §§ 15-57-301 et seq. applicable to open-cut

mining for “materials for commercial purposes.”

Bond form: cash, securities, or other collateral, including

letters of credit and mortgages on real property, as prescribed

by Dep’t of Envtl. Quality. Bonds must be signed by the

operator and a licensed corporate surety. (15-37-316).

The bond amount shall be equal to the estimated reclamation

cost. The Dep’t may retain independent experts to establish

the amount. Bond amounts may be altered as necessary.

Bond and substituted security regulations must be

promulgated to ensure small operators will not be precluded

from developing mineral resources due to high bond

amounts. (15-57-316).

Forfeiture: Bonds are conditioned on compliance with all

statutory and regulatory requirements and are subject to

forfeiture until the affected area has been reclaimed,

approved, and released. (15-57-317). Operators with

substantial violations may not receive a new or renewed

permit unless a change of circumstances justifies an

exception. (15-57-316).

Bond release may be incremental and occurs on a Dep’t

determination that land has been reclaimed. (15-57-316).

Royalties: The Natural Resources Committee must establish

a schedule of minimum fees and royalties, as well as the

terms and conditions for various types of permits and leases.

No permit or lease can be granted for less than the

minimums prescribed in the schedule. (22-5-804).

Accurate accounting of produced minerals is required, and

lease/permit holders must pay monthly royalties based on

the amount of “actual consideration” for the minerals taken

under the lease or permit. The holder of lease/permit is

absolutely liable for all royalties, and the Commissioner

may require a corporate surety bond to guarantee the royalty

payment. (22-5-809).

CRS-8

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

California

State statutes do not appear to specify which minerals are

leasable; however, mineral leases are referenced in multiple

provisions, described below.

Reclamation: Surface mining operations require submission

and approval of a reclamation plan. (CAL. PUB. RES. CODE §

2770).

Financial Assurance is required of all operators until

reclamation is complete. Assurance must be approved by the

lead agency and resubmitted annually. (2770, 2207). Form:

surety bonds executed by an admitted surety insurer,

irrevocable letters of credit, trust funds, or other forms of

financial assurances specified by the Board, which are

determined to be adequate. The amount is to be adjusted

annually to account for new lands disturbed by surface

mining operations, inflation, and accomplished reclamation.

(2773.1).

To pursue forfeiture, the Board must hold a public hearing,

determine that operator is financially incapable of or has

abandoned reclamation, notify the operator that forfeiture

will be sought, and allow 60 days for reclamation to

commence. Upon forfeiture, use of the proceeds must be to

reclaim land. (2773.1).

Release occurs upon written notification by the lead agency

that reclamation has been completed in accordance with the

plan. (2773.1).

Rent: The lease must provide for an annual rental of not less

than $1 per acre, as determined by the State Lands

Commission. (CAL. PUB. RES. CODE § 6895).

Royalty: The lease must provide for a royalty, to be taken in

money or in kind, at the option of the Commission, of not

less than 10 percent of the gross value of all mineral

production from the leased lands. (6895).

Until a mining permittee applies for a lease for a mining

area, all minerals produced from the area that would be

covered by a permit are subject to a 20% royalty. (6896).

An annual reporting fee is also required and is to be

adopted by the Mining and Geology Board for each active

or idle surface mining operation. The maximum fee for any

single mining operation may not exceed $4,000 annually

and may not be less than $100 annually. In addition, the

board shall collect $5 per ounce of gold and ten cents per

ounce of silver. (2207).

CRS-9

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Colorado

The State Board of Land Commissioners may lease state

land for the removal of minerals. The Board must

determine a rent to be charged and a royalty amount to be

applied to produced minerals. (COLO. REV. STAT. § 36-1113).

Performance and financial warranties are required before a

mining permit may be issued. A performance warranty is a

written promise by the operator to meet reclamation

requirements. A financial warranty is a written promise to be

responsible for reclamation costs up to the amount specified

by the Board, together with proof of financial responsibility.

The Board must prescribe the amount and duration of

financial warranties and adjust amounts from time to time.

(COLO. REV. STAT. § 34-32.5-117).

Surety may be: (1) a surety bond issued by a corporate surety

licensed in CO; (2) a letter of credit issued by a U.S. licensed

bank; (3) a certificate of deposit; (4) a deed of trust or

security agreement encumbering real or personal property and

creating a first lien in favor of the state; (5) assurance that,

upon commencement of production, the operator will

establish a trust comprised of periodic payments representing

a fraction of receipts, (6) a lien on project fixtures and

equipment of sufficient value, (7) a certified financial

statement for the warrantor’s most recent fiscal year and a

certification by an independent auditor that the financial

warrantor is the issuer of one or more currently outstanding

senior credit obligations that have been rated “A” or better by

a nationally recognized rating organization and the

warrantor’s net worth is at least two times the amount of all

financial warranties; (8) a certified financial statement for the

financial warrantor’s most recent fiscal year

The Board has the authority to adjust rentals under any

existing, expired, or defaulted lease when, in its opinion,

conditions justify changes. (36-1-114).

All leases of state or school land are conditioned upon the

payment of rent in advance, and the violation of this

condition results in a forfeiture of the lease, at the option of

the Board. (36-1-117).

CRS-10

State

State Mineral Royalties and Rental Fees

Colorado (cont.)

Connecticut

Reclamation and Bonding

and a certification by an independent auditor that (a) the

warrantor’s net worth is at least ten million dollars and is at

least two times the amount of all financial warranties, (b) the

warrantor’s tangible fixed assets in the U.S. are worth at least

twenty million dollars, (c) the financial warrantor’s total

liabilities-to-net-worth ratio are not more than two to one;

and (d) the warrantor’s net income, excluding nonrecurring

items, is positive; (9) proof that the operator is a department

or division of state government or a unit of county or

municipal government.

Operators may file a written notice of reclamation

completion, and, subject to Board inspection, the Board must

release all applicable warranties. If the Board finds

noncompliance with reclamation requirements, then it must

notify the operator within 60 days of property inspection.

(34-32.5-117).

Forfeiture may be pursued when an operator has violated a

cease and desist order, an operator is in default under his

performance warranty, or a warrantor has failed to maintain

his financial warranty in good standing or no longer has the

financial ability to carry out his obligations. The Board must

notify the operator and all warrantors and provide opportunity

for a hearing. Forfeited funds must be used to reclaim lands.

(34-32-118).

State statutes do not appear to address leases, royalties, or

rental fees for state-owned hardrock minerals.

State statutes do not appear to address reclamation and

bonding requirements for hardrock mining operations.

CRS-11

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Delaware

The Department of Natural Resources and Environmental

Control may lease public lands for “the exclusive right of

mining, exploring by geophysical and other methods, and

operating for and producing therefrom, oil, gas, casing head

gas, casing head gasoline ....” It is not clear whether this

includes hardrock minerals. (DEL. CODE ANN. tit. 7 §

4511).

Submerged lands bonds: Sufficient bonding or insurance

requirements, as determined by the Secretary, are required to

secure performance and the faithful compliance by the lessee

with lease terms and to secure the public against damages

arising from operations. (DEL. CODE ANN. tit. 7 § 6115).

The Secretary may require, prior to any exploration or

exploitation of offshore minerals, that a bond in the amount

of at least $1,000,000 be posted to secure the State against

any damages or claims arising from the offshore operations.

(29 § 8003).

Rent payments associated with the lease of public lands are

to be deposited with the State Treasurer and placed in a

specified account. (7 § 4512).

Offshore and submerged land mineral (including hardrock

mineral) leases may be granted by the Governor and the

Secretary of the Dep’t of Nat. Res. and Envtl. Control. (7 §

6102).

Royalties for offshore production are set by statute at not

less than 12.5 % of production; however, it is unclear if this

is meant to apply to minerals other than oil. (7 § 6112).

Annual rental of submerged lands is to be at least 25 cents

per acre, as specified by the Secretary. (7 § 6114).

CRS-12

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Florida

Mineral Leases: The Board of Trustees of the Internal

Improvement Trust Fund may sell or lease any mineral or

similar substance in, on, or under state land “the title to

which is vested in the state, the Department of Management

Services, the Department of Environmental Protection, the

Fish and Wildlife Conservation Commission, the State

Board of Education, or any other state board, department, or

agency; provided that the board of trustees may not grant

such a sale or lease on the land of any other state board,

department, or agency without first obtaining approval

therefrom.” (FLA. STAT. ANN. § 253.45).

Reclamation: FLA. STAT. ANN. §§ 378.401 et seq. The

Department of Environmental Protection must require

operators to submit and abide by a reclamation plan with

baseline reclamation standards for various categories of

minerals established by law.

Financial Security: The Board of Trustees may require a

surety or property bond, an irrevocable letter of credit, or

other proof of financial responsibility from each lessee of

public land or mineral interest prior to any mineral

extraction. The surety bond or irrevocable letter of credit

must be from a surety company or bank authorized to do

business in FL. The surety bond, irrevocable letter of credit,

or other proof of financial responsibility serves as security

and is to be forfeited to the board to pay for any damages

caused by mining operations performed by the lessee.

(253.571).

Greater financial security amounts must be considered for

mining operations planned for the waters of the state or under

other particular circumstances that may pose the risk of

greater potential damages. (253.571).

Royalty and rent provisions do not directly address

hardrock minerals, stating: “[t]he board shall determine in

advance the amount of royalty, never less than one-eighth in

kind, or in value, and a definite rental, increasing annually

after the first two years, upon lands not developed for oil or

gas, or upon which no well has been commenced in good

faith to secure production in paying quantities of gas or oil.”

(253.53). Royalties are also to be reduced by deducting any

oil or gas used in production, but again the provision would

appear applicable only to oil and gas production. (253.57.)

CRS-13

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Georgia

The State Properties Commission is authorized to permit

exploration and to lease state lands for mineral development

upon such terms and conditions as the Commission shall

determine. (GA. CODE ANN. § 50-16-43).

Georgia Surface Mining Act: GA. CODE ANN. §§ 12-4-70 et

seq. apply to all hardrock mined lands. (12-4-72). A permit

to conduct surface mining operations is required and a

reclamation and land use plan must be approved.

Operators must file a bond, unless the director of the

Commission issues an exemption. If an operator is exempted

and subsequently violates rules/lease/plan terms, the director

may require bond submission. Bonds must be written by a

director-approved and GA-licensed surety. In determining

bond amount, the director must consider the character and

nature of the land reclamation requirements as approved in

the plan. Amount cannot exceed $2,500 per acre. Bonds are

conditioned upon the faithful performance of the

requirements law and regulations. Amount and reclamation

requirements are to be reviewed at least every five years and

adjusted according to circumstances. (12-4-75).

Form: bond, government securities, cash, or any combination

thereof. (12-4-75).

Release & Forfeiture: Release occurs upon the director’s

determination that reclamation has been completed. Upon

failure to complete reclamation requirements, the state may

pursue forfeiture and reclaim lands with recovered funds.

(12-4-75).

Rent and Royalties: Each lease must provide for a primary

term of not more than ten years. Oil and gas royalties are

specified, but not other minerals. The lease must provide for

delay rentals in the sum of at least 10¢ per net mineral acre

payable on or before the first anniversary date of the lease,

25¢ per net mineral acre payable on or before the second

anniversary date of the lease, 50¢ per net mineral acre

payable on or before the third anniversary date of the lease,

and at least $ 1.00 per net mineral acre payable on or before

each subsequent anniversary date during the primary term of

the lease. (50-16-43).

CRS-14

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Hawaii

Any minerals on state lands may be leased by the Board of

Land and Natural Resources. (HAW. REV. STAT. §§ 182-4,

182-5).

State Land Bond requirement: HAW. REV. STAT. §§ 182-1

et seq. Lessees must file with the Board a bond, in a form

and in an amount approved by the Board. The bond must be

conditioned upon the faithful performance by the lessee of all

the lease terms and statutory requirements, and also

conditioned upon the full payment by the lessee of all

damages suffered by the other land occupiers. (182-3).

Leases are awarded at public auction at which bidders may

be required to bid on the amount of annual rental (to be

paid in advance, price based on an upset price fixed by the

board), and royalty, based on the gross proceeds or net

profits. (182-4, 182-9).

Specific royalties are set for each “long dry ton” of bauxite,

bauxitic clay, gibbsite, diaspore, boehmite, and all ores of

aluminum at the higher amount of either (1) twenty-five

cents or (2) the equivalent of the price of one pound of

virgin pig aluminum. Royalties for ore processed into

aluminous oxide in the State are set at 80% of the rate of

royalty for ore processed outside the State. Royalties must

also be set at a rate to encourage establishment and

continuation of the HI mining industry. (182-7).

Strip Mine Reclamation: HAW. REV. STAT. §§ 181-1 et seq.

apply to all hardrock mined lands. The Board is empowered

to issue strip mine permits and to approve reclamation plans.

Permits are accompanied by an annual fee based on number

of acres mined ranging from $100 for less than ten acres to

$500 for one hundred acres. (181-4, 181-6).

A bond, conditioned on performance of reclamation

requirements, must be filed. It generally must be signed by

HI licensed corporate surety. The amount will be set by the

Board, but cannot exceed $300 an acre. The amount is to be

adjusted to reflect any additional mined land or completed

reclamation. A surety’s signature is not required if a cash

deposit in the amount of the bond is made. (181-5).

Release occurs upon showing that land has been reclaimed as

required by law/regulation/permit terms. (181-5).

CRS-15

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Idaho

State lands are open to hardrock mineral “casual”

exploration to the extent the Board of Land Commissioners

has not withdrawn lands. (IDAHO CODE §§ 47-702, 471403).

State Lands: Non-casual exploration requires a reclamation

plan and a bond in such form as prescribed by the Board.

The amount may not exceed $750 per affected acre. Bonds

are conditioned on the payment of all damages to the land

and resources thereon caused by the entry and/or exploration.

(IDAHO CODE § 47-703A).

The Board may lease tracts (not exceeding six hundred forty

acres) for prospecting and mining for an annual rental, not

less than $1 per acre per year, to be determined by the

Board. The Board may set a production royalty as the

Board deems fair and in the interest of the state. Rental

payments are deducted from royalties each year. (47-704,

47-710).

Violations of responsibilities under law/regulations/leases

may result in a legal action for an injunction and to forfeit the

operator’s bond and recover the cost of reasonable repair and

reclamation. (47-718)

Placer and Dredge Reclamation: IDAHO CODE §§ 47-1317

et seq. apply to all lands. Requires permit and bond in an

amount necessary to pay the estimated reasonable costs of

reclamation required under the permit for each acre of land to

be disturbed during the first season of operation plus 10%,

not to exceed $1,800 per acre. Bond amount must be

adjusted annually to reflect changes in conditions.

Exemption from bonding is possible if the applicant has

insured faithful performance of the requirements of the

reclamation act and regulations by having a current and valid

bond with the U.S. government, which equals or exceeds the

amount required by state law.

Form: surety, cash, certificate of deposit, or other bond

acceptable to the director. (47-1317).

CRS-16

State

Idaho (cont.)

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Release & Forfeiture: Release occurs upon termination of

mining operations and compliance with all reclamation

requirements. Failure to reclaim lands results in forfeiture

proceedings as required by sections 47-1318 and 47-1320.

Surface Mining Reclamation: IDAHO CODE §§ 47-1501 et

seq. apply to all lands. Requires approval of reclamation plan

and bond submission. Bond amount is to be determined by

Board (estimated reasonable costs of reclamation plus 10%).

Generally, bond amount may not exceed $2,500 per acre,

unless the Board holds a hearing, determines it is necessary,

and notifies operator. Bonds are not required if the operator

deposits cash and government securities in amounts equal to

that of the required bond. (47-1512.) The law also provides

for appropriate forfeiture proceedings. (47-1513).

CRS-17

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Illinois

State statutes do not appear to address leases, royalties, or

rental fees for state-owned hardrock minerals.

Abandoned Mined Lands and Water Reclamation Act: 20

ILL. COMP. STAT. 1920/1.01 et seq. generally apply to coal

mining, but contains non-coal reclamation provision. The

Department of Natural Resources is authorized and

empowered to fill or seal abandoned tunnels, shafts, and

entryways and remove equipment, structures, and facilities

which it determines could endanger life and property and

constitute a hazard. Annual expenditures cannot exceed 2%

of the Department’s annual budget for mine land reclamation

through 1999. All expenditures had to be made by 2001.

(1920/2.11)

Surface Mining Reclamation: 225 ILL. COMP. STAT. 715/1

et seq. Surface mining disturbing more than ten acres cannot

proceed without permit. (715/4). Financial security is

required, and must be adjusted in accordance with changes in

circumstances. (715/5). Bond amount must be between

$600 and $5,000 per acre as determined by the Director of the

Department. (715/8).

Form: as the Director prescribes or operator may deposit

cash, certificates of deposits, government securities, or

irrevocable letters of credit in an amount equal to bond

requirements. (715/8).

Forfeiture: procedures provided for by statute, forfeiture

fully satisfies reclamation obligations.

(715/11).

CRS-18

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Indiana

State may grant permits for extraction, removal, and

disposition of minerals on or under land or non-navigable

waters. (IND. CODE 14-35-1-1).

State Land Bond requirement: Permits must be

accompanied by sufficient bond in an amount to be

determined by the department for the restoration of land or

water disturbed by exploration and mining (IND. CODE 1435-1-10).

Commercial production and accompanying royalty

payments must be established by the end of the initial term.

(14-35-1-9).

Iowa

The state, counties, cities, and other political subdivisions

may lease public lands under their respective jurisdictions

for the purpose of metallic minerals exploration and

production.

Royalties are not specifically provided for; however, statutes

indicate that revenues derived from the leasing of stateowned lands are to be paid into the general fund of the state.

Revenues derived from the leasing of other public lands

shall be paid into the general fund of the respective lessor

political subdivision. (IOWA CODE § 458A.21).

Other reclamation statutes do not appear to apply to hardrock

mining operations.

Reclamation: State law provides for reclamation of all lands

affected by mining for gypsum, clay, stone, sand, gravel, or

other ores or mineral solids, except coal. (IOWA CODE §

208.1). Operations cannot begin without a license. (208.7).

Bond: Permit application shall be accompanied by a bond or

security. (208.14). Bonds must be in a form prescribed by

the state and conditioned on faithful performance by the

operator of all reclamation requirements. Bonds must be

signed by the operator as principal and by a IA licensed

corporate surety. In lieu of a bond, the operator may deposit

cash or certificates of deposit subject to the same bond

conditions. Bond amount must be equal to the cost of

reclaiming the site as required under section 208.17 and as

estimated by the Division. (208.23).

A bond may not be released until required reclamation work

has been performed. (208.17). Forfeiture procedures are

provided under § 208.28. If the proceeds from bond

forfeiture are insufficient to satisfy the cost of reclamation,

the operator shall be liable for remaining costs. (208.28).

CRS-19

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Kansas

Various governmental entities agencies are authorized to

lease state lands under their jurisdiction for mineral

production, including the Board of County Commissioners

of any county, the KS Board of Regents, and the Secretary

of the Department of Wildlife and Park Lands. (KAN. STAT.

ANN. §§ 19-110, 32-850, 75-52,136).

State Lease Liabilty: Lessee is liable for all surface damage

caused by any act or omission of the lessee. (KAN. STAT.

ANN. § 76-166).

Board of County Commissioner and Board of Regent issued

leases require a royalty of not less than one eighth part of

the produced minerals. County leases may provide for a

payment to the county of the market value of such royalty in

lieu of payment in kind. (19-110, 32-850, 75-52,136).

Surface-mining Land Conservation and Reclamation Act:

KAN. STAT. ANN. §§ 49-601 et seq. apply to surface mining

of hardrock minerals on all lands. Licensing is required and

must be renewed yearly. (49-605).

A bond or security is required. Form: as prescribed by the

state; bond shall be signed by the operator as principal and by

a corporate surety licensed to do business in KS. Operators

may deposit cash, certificates of deposit, or government

securities subject to the same conditions as bonds, in lieu

thereof. Minimum bond amount is $250 per acre, and the

maximum is $1,500 per acre. States may waive or reduce the

amount to the extent that the operator has a sufficient bond or

security on file with the city or county where the site or

affected land is located. (49-615).

Forfeiture proceedings are provided for by statute. Forfeiture

of the operator’s bond fully satisfies all obligations of the

operator to reclaim affected land covered by the bond. (49619, 49-620).

CRS-20

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Kentucky

State statutes do not appear to address leases, royalties, or

rental fees for state-owned hardrock minerals.

Surface Coal Mining Regulation: KY. REV. STAT. ANN. §

350.010 et seq. Although generally inapplicable to hardrock

minerals, the statute does authorize some regulation of “strip

mining,” which is defined in a manner that would appear to

include hardrock minerals. Certain provisions are arguably

applicable to noncoal strip mined land. (See 350.050,

350.152, 350.445).

CRS-21

State

State Mineral Royalties and Rental Fees

Louisiana

The State Mineral Board is authorized to lease minerals for

development and production on any lands belonging to the

state. (LA. REV. STAT. ANN. §§ 30:124, 30:152).

Minimum royalties must be stipulated in the lease, and

royalties for various minerals are specified. Hardrock

minerals are covered by the general provision requiring oneeighth of all minerals produced and saved; or if the lease is

on behalf of a School Board, one-sixth of all minerals

produced and saved. The state may choose to take any

royalty in kind. (30:127, 30:142). The state may remit 10%

of all royalties to the parish where production occurs.

(30:145).

Where a lease provides for delay rental, the annual rental

shall not be for less than one-half the cash bonus. (30:127).

Proceeds from mineral royalties, leases, and any bonuses

are to be paid into the Bond Security and Redemption Fund,

and when it is fully funded, into the Louisiana Investment

Fund for Enhancement. (30:136.1).

Reclamation and Bonding

State statutes do not appear to address reclamation for

hardrock mineral mines.

CRS-22

State

Maine

State Mineral Royalties and Rental Fees

The Bureau of Geology and Natural Areas and other

agencies with jurisdiction over state-owned lands have

jurisdiction for the purpose of mineral development and

mining on that land. (ME. REV. STAT. ANN. tit.12 § 549).

Exploration permits are required, at which point claims may

be located. Rental fees are levied when an exploration

claim is recorded, increasing each year as follows:

Reclamation and Bonding

State Lands Bond: Lessees are required to provide a bond in

an amount necessary to reclaim the area mined and to protect

against damage to any property located outside the leased

area caused by the mining operations. The amount is

determined by the director of the agency with jurisdiction

over the state lands. In lieu of a bond, other security may be

provided so long as determined by the relevant agency

director to provide the same protection as a bond. (ME. REV.

STAT. ANN. tit. 12 § 549-B).

First year $ .25 per acre

2nd year $ .75 per acre

3rd year $ 1.50 per acre

4th year $ 2.50 per acre

5th year $ 5.00 per acre

6th year $20.00 per acre

7th year $30.00 per acre

Leases are available to persons with a valid recorded

exploration claim. Lessees must make royalty payments

annually or more frequently as specified in the lease; the

amount of royalty payments is set jointly by the director

Bureau of Geology and Natural Areas and the director of the

agency having jurisdiction over the state lands. The royalty

rate set must reasonably relate to applicable royalty rates

generally prevailing. (549-B).

Reclamation: Applicable to all lands. Mining activities

require a reclamation plan for the maintenance of the mine

site during mining and for a period after termination of

mining. Security is required for metallic ore mining to

ensure reclamation, closure, and postclosure care

maintenance requirements are met. Form: a bond payable to

the State or other satisfactory forms, including a security

deposit with the State, an escrow account and agreement,

insurance, or an irrevocable trust. Amount is determined by

considering the character of the overburden, the future

suitable use of the land involved and the cost of grading and

reclamation to be required. Forfeited security must be

expended for the reclamation of the area subject to the bond.

(ME. REV. STAT. ANN. tit. 38 § 490).

CRS-23

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Maryland

State statutes do not appear to address leases, royalties, or

rental fees for state-owned hardrock minerals.

Surface Mining Reclamation: MD. CODE ANN., ENVIR. §§

15-801 et seq. apply to hardrock minerals on all lands. The

law establishes a Reclamation Fund for carrying out purposes

of the act and to reclaim lands affected prior to enactment of

the law. (15-805). A license and surface mining permit are

required before operations may begin. Applications for these

must be accompanied by submission of a reclamation plan

along with various fees based on the number of acres

affected. (15-807, 15-808).

Bonds must be filed prior to commencement of operations.

Amount: maximum of $1,250 per affected acre, but not less

than a total of $8,000. The Department of the Environment

may make adjustments if the bond fee is unreasonable and

excessive upon consideration of the size of the operation, the

amount of land to be mined, the acreage that is unreclaimed

at any one time, the proposed method of regrading and

revegetation of the site, the proposed use of the land after

reclamation, and any other relevant factors. Liability under

the bond extends throughout operations and for five years

after its expiration unless the bond is released. (15-823).

Release is authorized upon completion of operations and

reclamation and may be incremental. (15-824). Forfeiture

occurs on failure to perform reclamation in accordance with

plan under procedures provided for by statute. (15-825).

CRS-24

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Massachusetts

The Division of Mineral Resources, within the Department

of Environmental Protection, administers all laws and

regulations pertaining to hardrock mining on state lands.

The Division has authority to license exploration, lease

minerals for extraction, and set charges and fees for mining

operations. Leases may not be issued until the Dep’t has

received reliable information on the quantities, quality, and

location of the resources, as well as potential impacts on

natural resources. (MASS. GEN. LAWS ch. 21, § 54).

Bond: A licensee or lessee must keep the state indemnified

against all claims and costs in relation to the license or lease

by posting a bond satisfactory to the director. No extraction

can occur until the bond is posted. (MASS. GEN. LAWS ch.

21, § 54).

Additional reclamation laws are not applicable to noncoal

minerals. (MASS. GEN. LAWS ch. 21B, § 2).

CRS-25

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Michigan

There would not appear to be a generally applicable law

governing leasing on state-owned lands. However, stateowned unpatented overflowed lands, made lands, and lake

bottomlands are subject to lease for the removal of “metallic

minerals, marl, stone, rock, sand, gravel, earth, oil, and gas”

from or under the beds thereof. Leases may include such

consideration as may be considered fair and reasonable.

Special leasing rules apply to lands adjacent to and

underlying the Great Lakes. (MICH. COMP. LAWS §§

324.33936, 324.33938).

Ferrous Metallic Mine Reclamation: MICH. COMP. LAWS

§§ 324.63101 et seq. apply to all lands. A permit is required

before operations may begin. Permits require submission of

mining and reclamation plan. (324.63103a). Security may be

required if the supervisor of reclamation has reasonable

doubts about an operator’s ability to perform reclamation.

Security may be a performance bond or other satisfactory

form of financial assurance. (324.63107).

Nonferrous Metallic Mine Reclamation: MICH. COMP.

LAWS §§ 324.63201 et seq. apply to all lands. A permit is

required before operations may begin, as is an environmental

impact assessment for the proposed mining operation. These

require preparation of a mining, reclamation, and

environmental protection plan. Operators must maintain

financial assurance until the Dep’t determines reclamation is

complete. Form: a conformance bond, escrow, cash,

certificate of deposit, irrevocable letter of credit, or other

equivalent security, or any combination thereof, covering at

least 75% of the total required amount; the balance of the

required total amount, if any, shall consist of a statement of

financial responsibility. Assurance amount must be sufficient

to cover the cost to administer reclamation. Amounts shall be

adjusted every three years or as the Dep’t deems necessary.

CRS-26

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Minnesota

The commissioner of natural resources may designate state

lands as mining units and execute leases to prospect for

“iron ore and other ores.” Generally, leases may cover only

one mining unit. (MINN. STAT. §§ 93.14, 93.15).

Mined Land Reclamation: MINN. STAT. §§ 93.44 et seq.

apply to metallic minerals on all lands. A permit to mine for

metallic minerals is required prior to operations.

Applications must include a proposed plan for reclamation or

restoration, or both.

Lease form is provided by statute, and incorporates

minimum royalty rates. Increases to royalty rates are

provided for by equations referencing the Producer Price

Index for Iron Ores and the Iron and Steel Subgroup of the

Metals and Metal Products Group. Base royalty rates are set

for various categories of ores, ranging from $.11 to $.18 per

ton. (93.20)

Financial Assurance: A bond or other financial assurance

satisfactory to the commissioner is required and must be

reviewed annually. Operators must also supply a certificate

showing the applicant has a public liability insurance policy

in force for the mining operation or evidence that the

applicant has satisfied other state or federal self-insurance

requirements. Insurance must cover personal injury and

property damage. (93.481, 93.49).

Rental for state lands is $1,250 for the first year after the

date of the lease and $5,000 per year for the remainder of

the term; provided, that for a taconite iron ore mining lease

the rent is set at $400 per year for the first five years and

$1,600 per year thereafter. (93.20).

CRS-27

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Mississippi

The Mississippi Major Economic Impact Authority may

lease state owned lands for mineral development for such

consideration and upon such terms and conditions as it

deems just and proper. (MISS. CODE ANN. §§ 29-7-1 et

seq.) Certain types of lands, including designated offshore

tracts, are not subject to lease.

Mississippi Surface Mining and Reclamation Act: MISS.

CODE ANN. §§ 53-7-1 et seq. apply to surface mining on all

lands. The Mississippi Commission on Environmental

Quality Permit Board may issue surface mining permits. A

reclamation plan must also be submitted. Reclamation must

be consistent with local, physical, environmental, and

climatological conditions and current mining and reclamation

technology. The Board may, in its discretion, authorize the

reclamation of non-permit lands in lieu of the lands included

in the permit application. (53-7-31).

Royalties to the state must be at least three-sixteenths of oil

and gas or other minerals.

Operators must submit a performance bond in an amount

sufficient to properly reclaim the permit area, but not less

than $500 nor more than $2,500 per acre. No bond will be

required if mining is funded by Mississippi Department of

Transportation or the Division of State Aid Road

Construction and the operator has submitted a bond to one of

those entities. (53-7-23). Form: bonds must be executed by

the applicant and a state-licensed corporate surety; in lieu of

the surety bond cash, negotiable U.S./MS bonds, assignment

of real property, personal property, or savings account,

negotiable certificates of deposit, or a letter of credit of a

qualified bank are acceptable. Bond amount may be

adjusted to reflect changed circumstances. (53-7-37).

CRS-28

State

Mississippi (cont.)

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Forfeiture proceedings must be conducted in accordance

with section 49-17-31 through 49-17-41 and may be pursued

when the commission finds that (i) reclamation of the

affected area is not proceeding in accordance with the plan

and the operator fails to take the required corrective action, or

(ii) revegetation has not been completed in conformance with

the plan within two years or longer, or upon revocation of a

permit. (53-7-35).

Upon completion of operations, the operator may file for the

release of the performance bond or deposit. The application

must describe of the results achieved in accordance with the

operator’s reclamation plan. The Dep’t and state water

authorities must then inspect the site. Release may occur,

incrementally or in whole, upon Permit Board’s satisfaction

with reclamation performance. (53-7-67).

CRS-29

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Missouri

State statutes do not appear to address leases, royalties, or

rental fees for state-owned hardrock minerals.

Metallic Mineral Waste Management Act: MO. ANN.

STAT. §§ 444.350 et seq. apply to all lands. The director of

the Department of Natural Resources coordinates all

environmental regulation and oversees the permitting

process. Permitting requires submission of a closure plan and

inspection-maintenance plan that provide for compliance with

applicable water pollutant discharge permits, dam safety

registration requirements, waste management program

requirements, and air pollution control regulations. Plans

must be reviewed every five years and updated as necessary.

(444.362, 444.365).

Financial assurance is required before a permit will issue.

Form: bond, certificate of deposit, letter of credit, insurance,

company guarantee, escrow agreement or other form of

financial assurance as approved by the director. Amount:

generally $1,000 per acre or fraction thereof, subject to

director discretion, but not less than $20,000 per permit.

Once the director determines that reclamation has been

completed for any area, the financial assurance must be

released or reduced proportionately. Forfeiture procedures

are provided by law, requiring written notice of violations

and a 90-day period for corrective measures. (444.368,

444.378).

CRS-30

State

Missouri (cont.)

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Land Reclamation Act: MO. ANN. STAT. §§ 444.760 et seq.

apply on all lands to surface mining for minerals other than

iron, lead, zinc, gold, silver, coal, surface or subsurface water,

fill dirt, natural oil or gas together with other chemicals

recovered therewith. (444.765). Covered operations require

permit from the Land Reclamation Commission.

Bonds must be filed with the Commission and signed by a

surety. In lieu of surety bond, the operator may furnish a

bond secured by a personal certificate of deposit or

irrevocable letter of credit. Amount: $8,000 per permit up to

eight acres and $500 for each acre thereafter. An additional

bond of $4,500 per acre is required when topsoil will be

removed. (444.778). Bonds are retained until the

Commission is satisfied that operators have (1) complied

with applicable regulations and plans and (2) begun operation

of a sanitary land fill or solid waste disposal area. (444.770).

Release procedures are provided by statute (444.775).

CRS-31

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Montana

Mineral Leases on State Lands: MONT. CODE ANN. §§ 773-101 et seq. The board of Land Commissioners may lease

state lands, including submerged lands, for the purpose of

prospecting for or mining metalliferous minerals or gems.

The term of the lease and any applicable limitations are to

be determined by the Board. (77-3-102). Before issuance

of any lease, the department must investigate the character

of the lands and mineral deposits to determine if mining is

appropriate and to determine the royalty and rental amounts.

(77-3-112).

Hardrock Mining Impact Regulation: MONT. CODE ANN.

§§ 90-6-301 et seq. The Hardrock Mining Impact Board is

authorized to regulate certain aspects of hardrock mining on

all lands. Applicants for mining permits must submit an

impact plan describing economic effects of mining

operations. Upon approval of the plan, developers may make

payments as specified in the plan directly to a local

government unit or to the board to be deposited into an

impact fund for use in implementing the plan. Local

governments may also enter into agreements with developers

for the issuance of any special industrial local government

facility impact bonds to provide for the construction,

renovation, improvement, or acquisition of local government

facilities resulting from the large-scale mineral development.

(90-6-310).

The Board may require rental payment “in conjunction with

the work requirements” or “cash rentals as an alternative or

otherwise.” (77-3-115).

Leases are to specify applicable royalties. Royalties, along

with all other considerations, must constitute the “full

market value” of the conveyed leasehold. In no case will

royalties be less than 5% of the returns from or of the full

market value of the recovered metalliferous minerals or

gems. (77-3-106). Bonds to cover royalty payments or to

protect other state land lessees/purchasers may also be

required. (77-3-119, 77-3-120).

Metal Mine Reclamation: MONT. CODE ANN. §§ 82-4-301

et seq. apply to mines for any ore, rock, or substance, other

than oil, gas, bentonite, clay, coal, sand, gravel, peat, soil

materials, or uranium on all lands. General exemptions for

small miners are provided, although special bonding

requirements apply to placer or dredge mining (equal to state

estimate for reclamation, but not to exceed $10,000). (82-4305). Exemptions for small scale activities are also allowed,

although such operations cannot generally use mercury,

cyanide, or leaching chemicals. (82-4-310).

CRS-32

State

State Mineral Royalties and Rental Fees

Montana (cont.)

Reclamation and Bonding

Exploration licenses and operation permits are also required,

each of which must be accompanied by a reclamation plan. A

plan must be developed for each operation with specific

requirements regarding erosion control, water issues,

pollutants, vegetative cover, and other issues. (82-4-332).

Adequate performance bonds are also required. Form:

bond, cash deposit, an assignment of a certificate of deposit,

an irrevocable letter of credit, or other surety acceptable to

the department. Bond amount covering reclamation costs

must be filed, and may not be less than $200 per acre. The

amount is subject to review annually and extensive review

every five years. The Dep’t may modify bond amounts to

account for changed circumstances. (82-4-338).

Forfeiture of the bond may be had to abate public dangers at

the operation site. (82-4-338). Forfeiture for failure to reclaim

lands and release of bonds for successfully reclaimed lands

are provided for under § 82-4-341.

Nebraska

Development of Mineral Lands: NEB. REV. STAT. §§ 72301 et seq. All state owned lands are open to mineral

development. Lease terms shall not exceed three years.

(72-303).

The lease must provide for a royalty that is not less than 5%

of production. An additional rent may be charged as

determined by the Board of Educational Lands and Funds.

(72-308).

State statutes do not appear to address reclamation for

hardrock mineral mines.

CRS-33

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Nevada

State law provides for coal, oil, gas, and geothermal leases

of state lands, but does not appear to address hardrock

minerals specifically. General lease provisions authorize the

administrator of the Division of State Lands to lease lands

subject to terms and conditions deemed appropriate. (NEV.

REV. STAT. §§ 322.010-322.075).

State reclamation law is applicable to all minerals. A

permit is required before any mining operation can

commence. Reclamation plans must provide for vegetative

cover and land reclamation to an extent comparable to

adjacent areas. Reclamation should be performed

simultaneously with operations or promptly upon completion

or abandonment of operations. (NEV. REV. STAT. §§

519A.210, 519A.160).

An applicant must agree in writing to be responsible for all

reclamation and must file a bond or other surety in a form

and amount approved by the Division and as required by its

regulations. (519A.210, 519A.160).

Bond forfeiture procedures are provided for by statute.

(519A.270, 519A.280).

CRS-34

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

New Hampshire

The Commissioner of the Department of Resources and

Economic Development is directed to make

recommendations to the Long Range Capital Planning and

Utilization Committee in accordance with state law

requiring Committee and governor review prior to lease or

disposal of state land (N.H. REV. STAT. §§ 12-E:9, 4:40).

The Commissioner is authorized to issue mineral

prospecting permits and to determine lease terms, including

“the amount of acreage, duration of lease, rental cost,

royalties and any conditions concerning extraction of

minerals or reclamation of the leased land ....” (12-E:9).

Reclamation: The Commissioner is directed to review all

mining permits applications and may deny permits if the

operation will not comply with reclamation laws, the impact

will be too great or is in an area unsuitable for mining

because of historical, archaeological or environmental

reasons, or the reclamation plans or pollution prevention

measures are insufficient. (N.H. REV. STAT. § 12-E:2).

Permit applications must include a reclamation plan, and

permits may be modified and subjected to new conditions as

the Director deems necessary, consistent with promulgated

regulations.

Upon approval of a plan, a bond or other security satisfactory

to the commissioner must be filed with the state. Bond

amount is to be the estimated cost of reclamation based on

the future suitable use of the land, but in no case shall the

bond be less than $1,000 per acre. Amounts are to be

reviewed and adjusted at least every three years. Bonds may

be released, in whole or in part, upon reclamation

performance to the satisfaction of the Commissioner and in

no case sooner than three years from its filing. (12-E:6).

New Jersey

State statutes do not appear to address leases, royalties, or

rental fees for state-owned hardrock minerals.

State statutes do not appear to address reclamation for

hardrock mineral mines.

CRS-35

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

New Mexico

The Commissioner of Public Lands may issue leases for

hardrock minerals on state lands. (N. M. STAT. ANN. § 198-24).

Bonds for State Leases: Lessees may be required to file a

bond or undertaking of not less than $5,000 for the benefit of

any surface lessee, patentee or contract purchaser, to secure

against damage to livestock, water, crops or other tangible

land improvements. A blanket bond of not less than $10,000

for holders of multiple leases may be filed instead. Bond

requirement may be waived by holder of surface rights. (N.

M. STAT. ANN. § 19-8-24).

Annual rental is required for all leases, to be paid in

advance, in an amount fixed by the Commissioner. Rent

may not be less than five cents per acre for the primary term

nor less than fifty cents per acre for the secondary term; total

annual rental per lease may not be less than $10. (19-8-21).

Royalties are required for all leases and generally may not

be less than 2% of gross returns from all ores or materials

mined and extracted from the land. Additional royalties: not

less than 2% of premiums and bonuses received; not less

than 5% on production bonuses and premiums for deposits

of rare earths, precious or semi-precious stones, uranium,

thorium, plutonium or any other materials determined to be

needed for the production of fissionable materials; special

rental and royalty rates for nonproducing leases; and special

rates for potassium, sodium, phosphorus and “other minerals

of similar occurrence and their salts ....” (19-8-21, 19-8-24).

New Mexico Mining Act: N. M. STAT. ANN. §§ 69-36-1 et

seq. generally govern reclamation of all lands mined for

hardrock minerals and apply to all processes of obtaining

useful minerals “from the earth’s crust or from previously

disposed or abandoned mining wastes, including exploration,

open-cut mining and surface operation, the disposal of refuse

from underground and in situ mining, mineral transportation,

concentrating, milling, evaporation, leaching and other

processing.” (69-36-3). The State Mining Commission is

responsible for regulating mining operations under the act

and is required to establish permit and reclamation

requirements incorporating site-specific characteristics. (6936-12). Operations and reclamation requirements must (1)

use the most appropriate technology and the best

management practices; (2) assure protection of human health

and safety, the environment, wildlife and domestic animals;

CRS-36

State

New Mexico

(cont.)

State Mineral Royalties and Rental Fees

Reclamation and Bonding

(3) include backfilling or partial backfilling when necessary;

(4) generally require permit areas that will achieve a “selfsustaining ecosystem appropriate for the life zone of the

surrounding areas following closure”; (5) be designed to

reduce the formation of acid and other toxic drainage; (6)

require that nonpoint surface releases of toxic substances be

contained within the permit area; (7) require facilities to be

designed to facilitate contemporaneous reclamation; and (8)

preserve topsoil in a usable condition for sustaining

vegetation. (69-36-7).

The statute requires financial assurance. The amount must

be sufficient to assure completion of performance

requirements if the work must be performed by the state or a

third party contractor. Amount is subject to periodic review

to account for inflation or other reclamation cost changes.

Financial requirements must not duplicate nor be less

comprehensive than federal financial requirements. Financial

assurance cannot be any type or variety of self-guarantee or

self-insurance. (69-36-7).

Release will occur upon a permittee’s application and

commission inspection of the site, and may be incremental.

Release of amounts for revegetation is subject to additional

requirements. (69-36-7).

CRS-37

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

New York

The Commissioner of General Services may issue a permit,

consent, or lease to enter upon state lands to explore for

minerals, work mines, and extract minerals. For

appropriated state lands, the state entity with jurisdiction

over such lands is entitled to notice from the commissioner

of any mining application and shall have a period of not less

than thirty days to report in writing to the Commissioner.

(N.Y. PUB. LANDS LAW §§ 81, 83).

The New York State Mined Land Reclamtion Law: N.Y.

ENVTL. CONSERV. LAW §§ 23-2701 et seq. apply to all

minerals on all lands. The Department of Environmental

Conservation regulates reclamation and is authorized to

establish environmental standards and criteria for mining and

reclamation of the affected land and to permit mining and

reclamation activities. (23-2709.) A mining permit governs

certain aspects of operations and must be accompanied by a

“mined land-use plan,” which governs mining and

reclamation activities. (23-2713.)

Annual rental and royalties are to be set by the

Commissioner at a reasonable and proper rate. The

minimum royalty cannot be less than 2% of the market

value of all minerals. Royalty payments are made semiannually. (82).

Financial security in the form of a bond signed by a

qualified surety (or other form accepted by the Dep’t) is

required and must be sufficient to ensure performance of

applicable reclamation requirements. The Dep’t determines

the amount, conditions and terms of the security. It must

generally remain in force until reclamation is complete,

although incremental release is authorized. (23-2715.)

CRS-38

State

North Carolina

State Mineral Royalties and Rental Fees

The State, acting at the request of the Department of

Environment and Natural Resources, may sell, lease, or

otherwise dispose mineral deposits on submerged lands.

(N.C. GEN. STAT. § 146-8).

The Department of Administration may sell, lease, or

otherwise dispose of mineral rights or deposits in the vacant

and unappropriated lands, swamplands, and lands acquired

by the State by virtue of being sold for taxes (but not

submerged lands), for such consideration, in such portions,

and upon such terms as are deemed proper by the

Department and approved by the Governor and Council of

State. (146-9).

Reclamation and Bonding

The Mining Act of 1971: N.C. GEN. STAT. §§ 74-46 et seq.

govern reclamation of surface effects of hardrock mining

operations on all lands. A permit from the Department of

Environment and Natural Resources is required before

mining can commence. Permits require a reclamation plan,

with specific requirements as to erosion, revegetation, and

reclamation time frames. (74-49, 74-53).

Permits will not become effective until an applicant has

submitted an acceptable performance bond or other security

(74-50, 74-54). Bond amount must be set by the Dep’t and

is based on the area to be reclaimed under the approved

reclamation plan(s) to which the bond pertains, less any area

where reclamation has been completed and released, pursuant

to § 74-56. Alternative forms: cash deposit, an irrevocable

letter of credit, a guaranty of payment from an acceptable

bank, an assignment of a savings account in an acceptable

bank on an assignment form prescribed by the Department, or

other security acceptable to the Department. (74-56, 74-59).

Bond release and forfeiture procedures are also provided by

statute. (74-56, 74-59).

North Dakota

The state may issue prospecting permits or leases for the

purpose of prospecting for and mining minerals contained in

state lands. (N.D. CENT. CODE §§ 38-11-01, 38-11-02).

Abandoned Surface Mine Reclamation: N.D. CENT. CODE

§§ 38-14.2-01 et seq. apply to all lands mined for noncoal

minerals. The Public Service Commission is authorized to

develop a reclamation plan for abandoned mine sites. The

law creates an abandoned mine fund, from which moneys

may be used to reclaim lands to protect against subsidence,

erosion and sedimentation, and water pollution, among other

things. (38-14.2-04).

CRS-39

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Ohio

Various entities are authorized to issue mining permits and

leases for state lands. The director of natural resources is

responsible for the bed of Lake Erie. (OHIO REV. CODE

ANN. § 1505.07). The chief of the Division of Water is

responsible for canal lands. (1520.02). The chief Division

of Wildlife is responsible leasing of lands under the

division’s jurisdiction. (1531.06). Finally, counties,

townships, and boards of education are authorized to lease

minerals on lands under their authority. (307.11, 505.11,

3313.45).

Noncoal Surface Mining Regulation: OHIO REV. CODE

ANN. §§ 1514.01 et seq. apply to hardrock mining operations

on all lands. A permit from the Division of Mineral

Resources Management is required for surface mining

operations. Permit applications must include a plan of

reclamation, which must provide for various environmental

standards, including reclamation adequate for the land’s

intended future uses, soil stability and erosion protections,

revegetation, removal of unwanted structures, and prevention

of water contamination. (1514.02).

Consideration for such leases shall be on a royalty or rental

basis, as determined by the relevant entity.

Applicants must also provide proof of adequate liability

insurance, various filing fees, and a performance bond.

(1514.02). The performance bond may take the form of a

surety bond, cash, an irrevocable letter of credit, or

certificates of deposit. Amount: Unless otherwise provided

by rule, $10,000 plus $1,000 per acre. (1514.04).

CRS-40

State

Oklahoma

State Mineral Royalties and Rental Fees

The Commissioners of the Land Office are authorized to

offer mineral leases for sale through competitive bids.

(OKLA. STAT. tit. 64, § 454).

Leases require an annual rental of not less than $1 per acre,

or if minerals are produced, a royalty not less than 5% of

the gross receipts from sale of minerals produced. If the

minerals are not sold, a royalty of 5% of the market value of

the minerals produced may be elected by the

Commissioners. The Commissioners are to require a bond

sufficient for the faithful performance of all lease

requirements. (455).

The Department of Central Services is authorized to lease

minerals on lands under its jurisdiction upon a basis of a

retained royalty of not less than 1/8 of all minerals

produced and such additional cash bonus as may be

procured. (OKLA. STAT. tit. 74, § 107).

Reclamation and Bonding

The Mining Lands Reclamation Act: OKLA. STAT. tit. 45,

§§ 721 et seq. apply to all lands. Operators must obtain a

permit from the Department of Mines for each mining

operation. Permit applications are to be accompanied by a

plan of reclamation, which must, among other things, set

forth the proposed use to be made of the affected land, the

grading to be accomplished, the type of revegetation, and an

approximate time frame for such efforts.

A bond to cover reclamation requirements must be filed as

required by the Director of the Dep’t of Mines. Form: Bonds

shall be co-signed by the operator as principal and by a “good

and sufficient corporate surety,” or operators may deposit

cash government securities, certificates of deposit or an

irrevocable letter of credit, or by using existing reclaimed

areas in excess of cumulative reclamation requirements.

Bond amount is to be determined by the Dep’t based on

permit performance requirements and consideration of the

character and nature of the overburden, the future suitable

land use, and the cost of reclamation to be required.

Minimum: $2,000. Withdrawals of land from permit or

amendments to permit must be reflected in bond amount.

(724). Financial surety must remain in effect until the land

has been reclaimed and released by the Dept in accordance

with 45 Okl.St.Ann. §§ 728 and 729.

CRS-41

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Oregon

The Department of State Lands is authorized to issue

mineral leases and also appears to have authority to fix

terms, conditions, and royalties (as provided in § 274.530).

(OR. REV. STAT. §§ 273.225, 273.551).

Reclamation of Surface-Mined Lands: OR. REV. STAT. §§

517.702 to 517.951. apply to all lands. Operators cannot

engage in surface mining without a permit from the State

Department of Geology and Mineral Industries for each

operation. (517.790). Additional permit requirements and

more stringent review of certain reclamation issues are

applicable to nonaggregate mineral mines. (517.915).

Permits require a bond or security acceptable to the Dep’t.

The amount is to be determined by the Dep’t, but may not

exceed the total cost for reclamation (if performed by the

state) or, generally, $10,000 per acre. Amount is to be

calculated and adjusted based upon the total area expected to

be in a disturbed condition in the following year. (517.810).

Amount can be increased to the lower of actual cost of

reclamation or $100,000 per acre if specified threats may be

present. (517.950). The state must also provide a pooling

program to assist operators in complying with bonding

requirements. (517.815).

Release and adjustment are to be performed in accordance

with § 517.870.

CRS-42

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Pennsylvania

State statutes do not appear to address leases, rental fees, or

royalties for hardrock minerals on state lands.

Noncoal Surface Mining Conservation and Reclamation

Act: 52 PA. CONS. STAT. §§ 3301 et seq. apply to hardrock

mining on all lands. The Department of Environmental

Resources may issue an operating permit. Applicants must

also submit a complete and detailed plan for the reclamation

of the affected land. (3307).

Applicants must file a bond for the land affected by each

operation. The amount is to be the total estimated cost to the

state of completing the reclamation plan or an amount

established by the Dep’t under regulations for an alternate

bonding program. The minimum amount is $5,000 per

permit area. Liability under the bond is for the duration of

surface mining and a period of five years after reclamation

work, unless the bond is released. Alternative bond forms are

provided (e.g. irrevocable bank letters of credit, cash) and

self-bond may be accepted. Stricter bonding requirements are

applicable when overburden produced will exceed specified

levels.

Forfeiture proceedings are provided for by statute. (3309).

Rhode Island

State statutes do not appear to address leases, rental fees, or

royalties for hardrock minerals on state lands.

State statutes do not appear to address reclamation or bonding

requirements for hardrock mining operations.

CRS-43

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

South Carolina

The Public Service Authority may issue mineral leases on

lands owned by the Authority; the State Budget and Control

Board and county forfeited land commissions may, with the

approval of the Attorney General, issue leases on state

lands/waters under the ownership, management or control of

the Board or commissions, respectively. (S.C. CODE ANN.

§§ 10-9-10, 10-9-30)..

South Carolina Mining Act: S.C. CODE ANN. §§ 48-20-10

et seq. apply to all lands. South Carolina Department of

Health and Environmental Control may issue certificates of

exploration and operating permits. Both must be

accompanied by a reclamation plan. The basic objective of

reclamation is to “establish on a continuing basis the

vegetative cover, soil stability, water conditions, and safety

conditions appropriate to the area.” (48-20-50, 48-20-60, 4820-90).

Adequate bonding is also required. The Dep’t sets the

amount of the performance bond or other security within

statutory limits: for exploration, bonds must be $2,500; for

operations, bonds must be based on affected land. Less than

10 acres: $10,000. Between 10 and 15 acres: $15,000. 15

acres or more: $25,000. Over 25 acres: may be in excess of

$25,000. (48-20-70, 48-20-110). Bonds must be signed by a

surety approved by the Department of Insurance or be an

acceptable alternative form: cash deposit, registered securities

acceptable to the department, an assignment of a savings

account in a SC bank, or other securities acceptable to the

department. (48-20-110).

Release must be done pursuant to section 48-20-130.

Forfeiture is ordered pursuant to section 48-20-170.

CRS-44

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

South Dakota

The Commissioner of School and Public Lands may lease

mineral interests owned by the state, although for leases on

lands administered by the Department of Game, Fish and

Parks, the consent of the department is a prerequisite. (S.D.

CODIFIED LAWS § 5-7-1).

South Dakota Mined Land Reclamation Act: S.D.

CODIFIED LAWS §§ 45-6B-1 et seq. apply to noncoal minerals

on all lands. The Board of Minerals and Environment may

issue permits for operations. Permit applications must

include a reclamation plan and post-closure plan for mine

waste disposal facilities. (45-6B-7). Reclamation is to be

reasonably designed to minimize the disruption from the

mining operation and to rehabilitate affected plant cover, soil

stability, water and other resources.

Annual rentals are required. They must be paid in advance

in an amount to be fixed by the Commissioner. Rental may

not be less than $1 per acre for the primary term, nor less

than $2 per acre for the secondary term. The annual rental

for any one lease may not be less than $10. (5-7-54).

Royalties are required. They may not be less than 2% of the

gross returns from the sale of ores and mineral products, less

reasonable transportation, smelting, reduction, or other

customary charges, as determined by the Commissioner. An

additional royalty of not less than 2% of any premiums and

bonuses received in connection with the discovery,

production or marketing is also required. (5-7-55).

A bond to secure surface lessees, patentees, or contract

purchasers against damage to livestock, water, crops, or

other tangible land improvements caused by the mining

lessee may also be required. (5-7-57).

Bonding is required. Generally, the amount is to be set by

the Board based on a site inspection, the reclamation plan,

and “the magnitude, type, and costs of reclamation activities

planned for the affected land and the nature, extent, and

duration of the mining.” The amount must be sufficient to

cover reclamation costs and may be adjusted over time, as

necessary (45-6B-21, 45-6B-26, 45-6B-27). If cyanide or

another leaching agent is used, additional assurance (at least

$25,000 but not more than $500,000) may be required. (456B-20.1). Form may be as required by the Board; cash or

government securities are acceptable. (45-6B-20, 45-6B-23).

Additional assurance may be insurance, cash, company net

worth, or as required by the Board. (45-6B-20.1).

Forfeiture and Release proceedings are provided for. (456B-25, 45-6B-66 - 45-6B-68).

CRS-45

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Tennessee

The Governor of the state may lease any of the property

owned by the state at a reasonable rental or royalty in order

that mineral resources may be properly developed. (TENN.

CODE ANN. § 12-2-101).

Tennessee Mineral Surface Mining Law of 1972: TENN.

CODE ANN. §§ 59-8-201 et seq. apply to hardrock mining on

all lands. The Commissioner of Environment and

Conservation may issue operations permits. Permits are

conditioned upon approval of a bond as provided in § 59-8207 and a mining and reclamation plan as provided in § 59-8208.

Bonds must be executed by the operator and a qualified

corporate surety approved by the Commissioner. Additional

acceptable forms of security are: cash, negotiable U.S.

treasury bonds, or negotiable general obligation municipal or

corporate bonds with at least an “A” rating by Moodys and/or

Standard and Poors. (59-8-207). Bond amount shall not be

less than $600 per acre or fraction thereof. The amount shall

be increased or decreased to account for any change in the

acreage covered by the permit as provided in § 59-8205(a)(2).

Forfeiture procedures are provided by § 59-8-211.

CRS-46

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Texas

Any tract of land that belongs to the state, including

submerged lands, and land sold with a reservation of

minerals to the state are subject to prospect by any person

for those minerals. (TEX. NAT. RES. CODE ANN. § 53.011).

Texas Surface Coal Mining and Reclamation Act: TEX.

NAT. RES. CODE ANN. §§ 134.001 et seq. primarily address

coal mine regulation, but also govern “iron ore and iron ore

gravel mining and reclamation operations to the extent [they]

can be made applicable” on all lands. (134.012). The

Railroad Commission of Texas is given jurisdiction over

mining and reclamation. A reclamation plan is required for

surface mined land and for the surface effects of underground

mining. (134.015, 134.041).

The General Land Office may issue a prospecting permit for

a one year period. Rent at an amount set by the

Commissioner is required. Payment extends a permit for

one year; a permit cannot be extended for more than five

years. (53.013).

A prospecting permittee may file an application to lease an

area covered by its permit for mining purposes. (53.015).

The royalty under the lease may not be less than 1/16 of the

value of the minerals produced under the lease. (53.018).

A performance bond is required. The form is to be

determined by the Commission, although self-insurance or

compliance with an alternative system may be allowable.

Acceptable forms include cash, negotiable U.S./TX bonds, or

negotiable certificates of deposit. (134.123, 134.124,

134.126). The Commission is to determine the security

amount based on estimated reclamation needs; it may not be

less than $10,000 per permit area. Additional bonds may be

required to cover a succeeding increment of mining in the

permit area. (134.121, 134.122).

Release of Bond or Deposit is governed by section 134.131.

CRS-47

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Utah

Mineral leases of all state lands, except school and

institutional trust lands, are made through the Division of

Forestry, Fire and State Lands, with the consent of the state

agency with jurisdiction over the land. (UTAH CODE ANN.

§ 65A-4-3).

Utah Mined Land Reclamation Act: UTAH CODE ANN. §§

40-8-1 et seq. apply to exploration, development, and

extraction of hardrock minerals on all lands. Every operator

is obligated to conduct reclamation and is responsible for

reclamation costs and expenses. (40-8-12.5).

Mineral deposits in state-owned lands may be leased on a

rental and/or royalty basis. (65A-6-1). The Division is

directed to promulgate rules prescribing the annual rental

and royalty rates. (65A-6-2). Mineral leases must provide

for a minimum annual rental of not less than $1 per acre.

(65A-6-4, 65A-6-6).

After a notice of intention for mining operations has been

approved, the operator must provide surety, in a form and

amount determined by either the Division or the Board of Oil,

Gas and Mining, based on the type of reclamation needed.

The form of surety that the operator may provide includes,

but is not limited to: collateral, a bond or other form of

insured guarantee, deposited securities, or cash.

If any operator fails or refuses to carry out the necessary land

reclamation as outlined in the approved notice of intention,

the Board may, after notice and hearing, declare any surety

filed for this purpose forfeited. The state Attorney General is

to then proceed with the necessary legal actions to obtain

forfeiture. (40-8-14).

CRS-48

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Vermont

A U.S. citizen, after discovering a valuable mine on state

lands may file a notice of discovery and a bond and then

may work such mine or quarry. (VT. STAT. ANN. tit. 29, §

302; see also VT. STAT. ANN. tit. 10, § 2606 for leases on

parklands).

State statutes do not appear to address reclamation or bonding

requirements for hardrock mining operations.

A royalty of 2% of the market value of all mineral products

is required. Valuation for royalty determinations is made

when such products are first in a marketable form. (29, §

302).

Operators must also file a bond with the Commissioner of

Buildings and General Services in such sum and with such

sureties as the Commissioner requires. The bond is to

secure to the state all sums of money due as a result of

mineral production. (29, § 306).

CRS-49

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Virginia

State law authorizes several state agencies to lease the

minerals underlying state lands under their jurisdiction for

mineral production. Rental and/or royalty rates may be set

by these agencies as they see fit, except that leases on

certain submerged lands require a royalty. (VA. CODE ANN.

§§ 28.2-1208, 53.1-31).

Regulation of Mining Activity: VA. CODE ANN. §§ 45.1-181

et seq. apply to all lands. Operators must obtain a mining

permit accompanied by an operations plan. The operations

plan describes the specifications for surface grading and

restoration to a surface suitable for the proposed use of the

land after reclamation is completed. (45.1-182.1).

A bond is required in an amount that is based on the number

of acres of land which the operator estimates will be affected

by mining operations during the next year. The amount may

not be less than $200 nor more than $1,000 per acre. The

minimum amount of bond furnished shall be $1,000, except

in areas of five acres or less, which are subject only to the

general per acre amount requirements. Bonds must be

executed by the operator and a corporate licensed surety; in

lieu of this bond form, the operator may deposit cash or

collateral security acceptable to the Director. (59-8-207).

Bonds may be adjusted annually to reflect new disturbances

and work completed (45.1-185).

CRS-50

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Washington

The Department of Natural Resources may issue permits

and leases “for prospecting, and contracts for the mining of

valuable minerals and specified materials, except rock,

gravel, sand, silt, coal, or hydrocarbons, upon and from any

public lands belonging to or held in trust by the state ....”

(WASH. REV. CODE §§ 79.14.300, 79.14.310).

Surface Mining Reclamation: WASH. REV. CODE §§

78.44.010 et seq. apply to surface mining on all lands. The

Department of Natural Resources is given the exclusive

authority to regulate surface mine reclamation. (78.44.050).

The Dep’t is responsible for issuing reclamation permits.

An annual rental as set by the Board of Natural Resources

is required. (79.14.350). Royalties are required under all

mining contracts and mineral leases. The rate is to be set by

the Board. (79.14.410).

Permits cannot be issued until the applicant has deposited an

acceptable performance security. (78.44.087). Form: bank

letters of credit acceptable to the Dep’t; a cash deposit;

negotiable securities acceptable to the Dep’t; an assignment

of a savings account or interest in real property; a savings

certificate in a WA bank; or an adequate corporate surety

bond. (78.44.087). The Dep’t may determine the amount

using a standardized performance security formula developed

by the Dep’t. Adjustments to the bond amount may be made

at any time. (78.44.087).

Metals mining and milling operations are subject to

additional requirements. (WASH. REV. CODE 78.56.030 et

seq.). The Department of Ecology Metals Mining

Coordinator oversees the permitting, construction, operation,

and reclamation phases of a metals mine project. (78.56.060).

Additional performance security may be required

(78.56.110).

CRS-51

State

State Mineral Royalties and Rental Fees

West Virginia

The public land corporation, within the Department of

Natural Resources, is vested with the title of the state of

West Virginia in public lands and may enter into leases for

the development and extraction of minerals. (W. VA. CODE

§§ 20-1A-1, 20-1A-3, see also § 20-1-7 ).

Minerals may be leased “at not less than the fair market

value, as determined by an appraisal made by an

independent person or firm chosen by the corporation ....”

(20-1A-6). The corporation must also hire an independent

auditing firm to periodically review a lessee’s books and

accounts to ensure that the appropriate royalties are being

paid. (20-1A-6).

A lessee may is also required to provide a bond for the

proper performance of the lease. (20-1A-6).

Reclamation and Bonding

State statute does not appear to address reclamation and

bonding requirements for hardrock mining operations.

CRS-52

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Wisconsin

The Board of Commissioners of Public Lands may grant

leases on any public lands, except state park lands and state

forest lands, to prospect for and to extract ore, minerals and

other deposits. Leases may made be made only for a “full

and fair consideration paid or to be paid to the state, the

amount and terms whereof shall be fixed by said board ....”

(WIS. STAT. § 24.39).

Metallic Mining Regulation: WIS. STAT. §§ 293.01 et seq.

apply to all lands. The Department of Natural Resources may

issue prospecting and mining permits, both of which must be

accompanied by reclamation plans and bonds. It may also

issue exploration licenses, which also subject licensees to a

bonding requirement. (293.35, 293.37, 293.21).

State park and forest lands may be leased for mineral

development. Leases must contain “proper covenants to

guard against trespass and waste.” Any rents arising from

these leases are to be paid into the state treasury.

Prospecting licenses may also be granted. These require

“proper security” to ensure that licensees will fully report on

mineral discoveries and will restore the surface to its

“former condition and value” if no discovery is made.

(26.08).

Bonds must be signed by an adequate surety and conditioned

on faithful performance of reclamation requirements. In lieu

of a bond, the operator may deposit cash, certificates of

deposit, or government securities. The amount of the

security is to be equal to the estimated cost of reclamation “in

relation to that portion of the site that will be disturbed by the

end of the following year.” (293.51).

Exploration bonds: Applications for exploration licenses are

to be accompanied by a bond in the amount of $5,000

conditioned on faithful performance of the termination

requirements. (293.21). The amount can be adjusted upward

at any time.

Bond release is governed by § 293.63.

CRS-53

State

State Mineral Royalties and Rental Fees

Reclamation and Bonding

Wyoming

The Board of Land Commissioners may establish rules and

regulations governing the issuance of mineral leases and

covering the conduct of development and mining operations.

“Mineral leases may be issued upon such monthly or annual

minimum rental payment basis as shall be fixed by the

board, which payment shall be annually applied against such

royalty as shall accrue for the same lease.” (WYO. STAT.

ANN. § 36-6-101).

Surface Mining Reclamation: WYO. STAT. ANN. §§ 35-11401 et seq., applicable to surface mining on all lands. Mining

permits are required and establish that operators must comply

with mining and reclamation plans. Regulations establishing

specific reclamation standards must be promulgated. (35-11402).

Mining licenses and the filing of a bond are also required

before operations can begin. (35-11-410). The Administrator

of the Land Quality Division can fix the amount of, collect,

and maintain performance bond requirements. Minimum:

generally, $1,000 per acre of affected land, total amount may

not be less than $10,000, except for specified minerals or

small operations which must be at least $200 per acre.

Within 90 days after mining operations commence, an

additional bond of $100 per acre may be required if necessary

to insure reclamation. (35-11-401, 35-11-417). Form: All

bonds must be signed by the operator as principal, by a good

and sufficient corporate surety. A self-bonding program may

be created by regulation. (35-11-417).

Release of 75% of bond is authorized on completion of

reclamation plan, but remainder must be retained five years

after the date of reduction. (35-11-423). Forfeiture

procedures are set out in section 35-11-421.

EveryCRSReport.com

The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the

Library of Congress, charged with providing the United States Congress non-partisan advice on

issues that may come before Congress.

EveryCRSReport.com republishes CRS reports that are available to all Congressional staff. The

reports are not classified, and Members of Congress routinely make individual reports available to

the public.

Prior to our republication, we redacted names, phone numbers and email addresses of analysts

who produced the reports. We also added this page to the report. We have not intentionally made

any other changes to any report published on EveryCRSReport.com.

CRS reports, as a work of the United States government, are not subject to copyright protection in

the United States. Any CRS report may be reproduced and distributed in its entirety without

permission from CRS. However, as a CRS report may include copyrighted images or material from a

third party, you may need to obtain permission of the copyright holder if you wish to copy or

otherwise use copyrighted material.

Information in a CRS report should not be relied upon for purposes other than public

understanding of information that has been provided by CRS to members of Congress in

connection with CRS' institutional role.

EveryCRSReport.com is not a government website and is not affiliated with CRS. We do not claim

copyright on any CRS report we have republished.