Leasing of Solid Minerals Other Than Coal and Oil Shale

DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3500, 3510, 3520, 3530, 3540, 3550, 3560, and 3570

[WO-320-1990-01-24 A]

RIN 1004-AC49

Leasing of Solid Minerals Other Than Coal and Oil Shale

Agency: Bureau of Land Management, Interior.

Action: Proposed rule.

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SUMMARY: The Bureau of Land Management (BLM) proposes to amend its

regulations governing leasing of solid minerals other than coal and oil

shale. The purpose of the amendment is to comply with President

Clinton's Government-wide regulatory reform initiative to eliminate,

streamline, or rewrite regulations in plain English. The current rule

includes separate sections for all the solid minerals commodities, and

the resulting language is repetitive in many instances. The proposed

rule will reorganize these solid minerals regulations to eliminate

redundant language and streamline the regulations. The proposed rule

will also clarify the responsibilities of interested parties.

DATES: You must submit your comments by January 16, 1997. BLM may not

consider comments received after this date in developing the final

rule.

ADDRESSES: Commenters may hand-deliver comments to the Bureau of Land

Management, Administrative Record, Room 401, 1620 L Street, NW.,

Washington, DC; or mail comments to the Bureau of Land Management,

Administrative Record, Room 401LS, 1849 C Street, NW., Washington, DC

20240. Commenters may transmit comments electronically via the Internet

to WOC[email protected]. Please include ``AC49'' and your name and

address in your message. If you do not receive a confirmation from the

system that we have received your internet message, contact us directly

at (202) 452-5030. Comments will be available

[[Page 54385]]

for public review at the L Street address during regular business

hours, from 7:45 a.m. to 4:15 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Jim Horan, (202) 452-5023 (Commercial

or FTS).

SUPPLEMENTARY INFORMATION:

I. Public Comment Procedures

II. Background

III. Discussion of Proposed Rule

IV. Procedural Matters

I. Public Comment Procedures

Your written comments on the proposed rule should--

(a) Be specific;

(b) Be confined to issues about the proposed rule;

(c) Explain the reason for the recommended change; and

(d) Where possible, reference the specific section or paragraph of

the proposal which you are addressing.

BLM may not necessarily consider or include in the Administrative

Record or the final rule comments which BLM receives after the close of

the comment period (see DATES) or comments delivered to an address

other than those listed above (see ADDRESSES).

II. Background

On March 4, 1995, President Clinton issued a memorandum to all

Federal Departments and Agencies directing them to simplify their

regulations. In response to the President's directive, BLM analyzed 43

CFR part 3500 through 43 CFR part 3570 to determine whether the

regulations were current and written in clear and understandable terms.

As a result, BLM decided that we could reorganize the regulations to

achieve significant reductions in length while greatly improving the

clarity of the document.

Statutory Basis of BLM's Regulations

BLM's regulatory program relating to solid minerals is based on

several different statutes which give BLM authority to regulate mineral

leasing on the lands administered by the bureau.

Mineral Leasing Act of 1920

The Mineral Leasing Act of 1920 (the Act), as amended and

supplemented (30 U.S.C. 181 et seq.), provides for leasing of certain

deposits of phosphates, potassium, gilsonite, and sodium minerals on

public domain lands. The Act authorizes the Secretary of the Interior

to grant to any qualified applicant a permit or lease for certain

deposits of minerals on lands owned by the United States.

Reorganization Plan No. 3 of 1946

Reorganization Plan No. 3 of 1946 (5 U.S.C. Appendix) transferred

the responsibilities of the Secretary of Agriculture for the leasing or

other disposal of hardrock minerals to the Secretary of the Interior

for certain areas.

Mineral Leasing Act for Acquired Lands of 1947

The Mineral Leasing Act for Acquired Lands of 1947, as amended (30

U.S.C. 351-359), provides for the leasing of certain acquired lands.

This statute authorizes the Secretary of the Interior to establish

rules and regulations necessary to grant any qualified applicant a

permit or lease to promote mining of phosphate, sodium, potassium,

sulphur and gilsonite deposits on Federal acquired lands.

The Federal Land Policy and Management Act of 1976

The Federal Land Policy and Management Act of 1976 (43 U.S.C. 1701

et seq.) (FLPMA) authorizes the Secretary of the Interior to develop

guidelines for the administration and protection of the Federal lands

and their resources under the jurisdiction of BLM.

Other authorities which address programs related to specific

commodities and lands include the following:

(a) Certain lands added to the Shasta National Forest (30 U.S.C.

192c);

(b) Public domain lands in National Forests in Minnesota (6 U.S.C.

508(b));

(c) Gold, silver or quicksilver in confirmed private land grants

(30 U.S.C. 291-293);

(d) Reserved minerals in lands patented to the State of California

for parks or other purposes (47 Stat. 1487, as amended);

(e) National Park Service areas--

(i) Lake Mead National Recreation Area (16 U.S.C. 460n et seq.);

(ii) Whiskeytown Unit of the Whiskeytown-Shasta-Trinity National

Recreation Area (16 U.S.C. 460q et seq.);

(iii) Ross Lake and Lake Chelan National Recreation Areas (16

U.S.C. 90c et seq.);

(iv) Glen Canyon National Recreation Area (16 U.S.C. 460dd et

seq.);

(f) Shasta-Trinity Units of the Whiskeytown-Shasta Trinity National

Recreation Area (16 U.S.C. 460q et seq.); and

(g) White Mountains National Recreation Area (16 U.S.C. 460mm-2

through 460mm-4).

Development of BLM's Regulations

The last major revision of these solid leasable minerals

regulations was published in the Federal Register on April 22, 1986 (51

FR 15204). That revision included separate parts covering specific

mineral commodities. The commodity-by-commodity format completed an

attempt to clarify the regulations that began with amendments published

on April 25, 1984 (49 FR 17892).

Under the 1986 organization of the regulations, processes such as

issuance of exploration licenses and mineral leases were addressed in a

similar or identical manner under each commodity. This organization was

designed to allow parties interested in each commodity to look in only

one part of the regulations to find the provisions relating to their

commodity. However, not all of the leasing or permitting regulations

were included with the commodity, and the regulations were so extensive

that the complete body of solid mineral regulations occupied about 100

pages of the Code of Federal Regulations.

III. Discussion of Proposed Rule

As part of BLM's response to the administration's regulatory

initiatives, we reviewed this extensive body of material and decided to

consolidate and to eliminate the duplicative presentation of processes.

BLM understands that our readers want to be able to find particular

subject matter easily in our regulations. However, we believe that the

plain English approach, particularly the expanded table of contents,

will make it easy for readers to find material that is of concern to

them. The overall reduction in the volume of BLM's regulations achieved

by this revision should make it easier for the reader to find

particular subject matter.

BLM believes that a consolidated approach to these regulations

offers other advantages. If BLM revises its procedures relating to

solid minerals, we would need to undertake only one regulatory action

to conform the consolidated regulations to any new revisions in our

procedures. This reduces the time it would take BLM to keep its

regulations up to date and internally consistent. When several

different regulations address one process, as in the current version of

43 CFR part 3500, it is difficult for BLM to ensure that changes made

to one part get made in all relevant parts. As a result, parts that

should be identical diverge over time.

As a result of these considerations, BLM has determined that we can

eliminate the repetition represented by the current regulatory

structure, while enhancing our readers' ability to find

[[Page 54386]]

material of interest to them. We are particularly interested in

comments on whether it is easy to find particular subject matter in

this proposed rule. We would also welcome suggestions for further

consolidation and reorganization. We understand that a number of

different organizations of these regulations are reasonable, and are

interested in suggestions from the public as to the most readable and

logical arrangement of these rules. BLM also invites comments from

surface management agencies, surface owners, and other interested

persons as to whether any of the proposed changes would make

substantive changes not discussed in this preamble.

Most of the changes BLM is proposing today are for the purpose of

streamlining and clarifying the regulations. All parts and subparts of

what is currently Group 3500, Management of Solid Minerals Other Than

Coal, are affected, except parts 3580 and 3590. BLM is not proposing

any changes to these two parts at this time, but may propose changes to

these parts in the future for purposes of streamlining and

clarification. If BLM finalizes these proposed regulations, certain

changes will be made in those two parts to conform the cross references

to the new numbers.

The current proposed action eliminates the commodity-specific

provisions contained in parts 3510, 3520, 3530, 3540, 3550, 3560, and

3570. BLM proposes to expand the general material currently found in

part 3500 to incorporate all substantive provisions of those parts. As

a result, the new part would contain subparts 3501 through 3517.

Details of these proposed subparts can be found in the table of

contents.

In addition to rewriting the regulations for clarity, BLM is

proposing to:

1. Eliminate the requirement to describe the lands for which you

are making an application once you have properly described them and BLM

has issued a prospecting permit or lease. This would eliminate the need

for the applicant to submit a land description with his or her

application for a preference right lease or for assignments where the

land description duplicates that in the prospecting permit or original

lease. BLM would still require land descriptions for assignments of

parts of the land described in the original prospecting permit or

lease. Applicants would still need to identify the lease or permit by

serial number.

2. Increase the State acreage limitation for potassium leases.

Current 43 CFR 3530.3 specifies that there is a per-State acreage

limitation of 51,200 acres for holders of potassium leases or permits.

BLM proposes to increase this limitation to 80,000 acres. The acreage

limitation for potassium is regulatory, and is not based on any

statutory requirement. The statute limits the size of individual leases

to 2,560 acres per lease. As the potash industry has matured, many

mining operations are consolidating or closing. BLM believes that

increasing the size of the State acreage limitation would allow for

consolidation of mining properties and enhance development of marginal

Federal reserves, thereby ensuring the statutory goal of ultimate

maximum recovery. This proposed change would not create a situation

where one company could monopolize Federal resources. This proposed

change is reflected in the table in Sec. 3503.37.

3. Change a provision currently in 43 CFR 3513.1-2, proposed to be

in 43 CFR 3507.16, requiring the applicant for a preference right lease

to submit a map showing certain land features, to require three maps,

consistent with other provisions in these regulations, and with BLM's

need for documentation to facilitate the review of these applications.

While it is relatively easy for BLM to make duplicate copies of most

application material, it is often difficult to duplicate maps, and

obtaining additional maps from the applicant should facilitate BLM's

review.

4. Incorporate uniformly BLM's current practice of not issuing

leases covered by current Group 3500 to coal lessees and assignees not

in compliance with section 2(a)(2)(A) of the Mineral Leasing Act, as

amended. This means that BLM will not issue a lease under this part to

anyone not in compliance with the diligence requirements for coal

leases found in section 2(a)2(A). This change is the result of the

proposed reorganization and clarification of these regulations and is

reflected in proposed 43 CFR 3502.20 and 3511.11. Since this provision

is consistent with current practice it will not have any significant

impact on the industry. To date, BLM has denied fewer than 5 leases on

the basis of this statutory provision.

5. Add a provision at 43 CFR 3502.42 specifying, consistent with

the provisions of the Mineral Leasing Act, 30 U.S.C.184(g), that BLM

will allow unqualified heirs to hold ownership for not more than two

years, during which period the heir must either become qualified or

divest himself or herself of the interest.

6. Eliminate provisions authorizing issuance of future interest

prospecting permits currently in subpart 3507. BLM has rarely been

called upon to issue such permits. We believe that the period of time

available to current mineral interest holders, before the minerals vest

in the United States, should be sufficient to allow those interest

holders to determine whether there is a valuable mineral deposit

present. If the mineral holder does demonstrate the existence of a

valuable mineral deposit, BLM would continue, under this proposal, to

issue future interest leases to the interest holder for these minerals.

7. Clarify in proposed subpart 3515, particularly Sec. 3515.21,

that lands exchanged must be of equal, rather than comparable, value.

This change implements the provisions of the Federal Land Exchange

Facilitation Act of 1988, which amended section 206 of FLPMA. The same

Act also provided the government and any applicant greater flexibility

than did previous requirements in achieving equality in an exchange.

This flexibility is incorporated into the proposed regulation at

proposed Sec. 3515.22. Section 3515.12 clarifies that the exchange-

specific provisions of 43 CFR part 2200 apply.

8. Clarify in proposed on Sec. 3501.5 the definition of the term

``valuable deposit''. The current definition at 43 CFR 3500.0-5 is

circular in that it uses the phrase ``valuable mine'' in describing the

term ``valuable deposit''. The proposed rule would change ``valuable

mine'' to ``profitable mine'' and thus clarifies that the profitability

of mineral development is an important consideration in determining

whether a person of ordinary prudence would be justified in the further

expenditure of his or her labor and means with the reasonable prospect

of successfully developing the mineral deposit. Accordingly, the

proposed section on what information you have to provide to BLM to

prove that you have found a valuable deposit, proposed section 3507.26,

states that BLM may request supplemental data to determine, among other

things, mining and processing costs and the profitability of mineral

development.

9. Modify the requirements found in the current 43 CFR 3502.2-4(b)

on the disclosure of the identity and citizenship of major stockholders

to add disclosure of the percentage of their stock holdings. This

change would assist BLM to enforce acreage limitations against those

stockholders. The proposed rule would eliminate a requirement found in

the current 43 CFR 3502.2-4(e) to submit such information on the basis

of foreign residency. This information is not needed to enforce any

statutory limitations.

[[Page 54387]]

10. Clarify at proposed Sec. 3510.21 that BLM can issue

noncompetitive fringe acre leases to extract sodium chloride to persons

producing calcium chloride from an existing mine, under an

authorization issued under 43 CFR part 3800 for locatable minerals.

This addresses an issue restricted to a limited geographic area in

California, where these two minerals are commingled.

Additionally, BLM seeks comment particularly on the following two

proposals. These proposals are not reflected in the regulatory language

published today. BLM may decide to undertake these changes, based on

public comment.

11. Add a discussion of what makes lands ``compact.'' A similar

discussion appeared in the regulations prior to the 1986 revisions. We

are particularly interested in whether commenters perceive a need for

BLM to define this term.

12. Reduce the number of copies of applications required from three

copies to one in cases where there is no specified form, except for

copies of maps.

IV. Procedural Matters

National Environmental Policy Act

BLM has prepared an environmental assessment (EA), and has found

that the proposed rule would not constitute a major federal action

significantly affecting the quality of the human environment under

section 102(2)(C) of the National Environmental Policy Act of 1969

(NEPA), 42 U.S.C. 4332(2)(C). BLM has placed the EA and the Finding of

No Significant Impact (FONSI) on file in the BLM Administrative Record

at the address specified previously. BLM invites the public to review

these documents by contacting us at the addresses listed above (see

ADDRESSES), and suggests that anyone wishing to submit comments in

response to the EA and FONSI do so in accordance with the ``Written

Comments'' section above, or contact us directly.

Federal Paperwork Reduction Act

The Office of Management and Budget has approved the information

collection requirements in the rule proposed by this action, which

affects all the parts currently numbered as parts 3500, 3510, 3520,

3530, 3540, 3550, 3560, and 3570 of title 43, under 44 U.S.C. 3507 and

assigned clearance numbers 1004-0030, 1004-0121, and 1004-0142.

Existing information collection requirements have been consolidated

into part 3500 in this proposed rule. No new requirements have been

added as a result of this proposal. The information collected under

this part is used by BLM to determine if an applicant is qualified to

hold a lease, license or prospecting permit for solid leasable minerals

other than coal, oil and gas, geothermal, and oil shale on Federal

lands. The information is required for the applicant to receive the

benefit of a permit or lease from BLM.

BLM estimates the public reporting burden of these information

collection sections to average 3\1/2\ hours for each response. By

eliminating the requirement to describe the lands for many assignments

and leases, this burden should be reduced for those activities. This

estimate includes the time for reviewing instructions, searching

existing data sources, gathering and maintaining the data needed, and

completing and reviewing the collection of information. Send comments

regarding this burden estimate or any other aspect of this collection

of information, including suggestions for reducing the burden, to the

address listed above (see ADDRESSES) and the Office of Information and

Regulatory Affairs, Office of Management and Budget, Washington, DC

20503.

Regulatory Flexibility Act

Congress enacted the Regulatory Flexibility Act (RFA) to ensure

that Government regulations do not unnecessarily or disproportionately

burden small entities. The RFA requires a regulatory flexibility

analysis if a rule would have as significant economic impact, either

detrimental or beneficial, on a substantial number of small entities.

BLM has determined that this proposed rule would not have a significant

economic impact on a substantial number of small entities under the RFA

(5 U.S.C. 601 et seq.).

Unfunded Mandates Reform Act

These amendments to 43 CFR part 3500 will not result in any

unfunded mandate to state, local or tribal governments in the

aggregate, or to the private sector, of $100,000,000 or more in any one

year.

Executive Order 12630

The proposed rule does not represent a government action capable of

interfering with constitutionally protected property rights. Section

2(a)(1) of Executive Order 12630 specifically exempts actions

abolishing regulations or modifying regulations in a way that lessens

interference with private property use from the definition of

``policies that have takings implications.'' Since the function of this

regulatory action is to streamline regulations and eliminate

unnecessary provisions, there will be no private property rights

impaired as a result. Therefore, the Department of the Interior has

determined that the rule would not cause a taking of private property,

or require further discussion of takings implications under this

Executive Order.

Executive Order 12866

According to the criteria listed in section 3(f) of Executive Order

12866, BLM has determined that the proposed rule is not a significant

regulatory action. As such, the proposed rule is not subject to Office

of Management and Budget review under section 6(a)(3) of the order.

Executive Order 12988

The Department of the Interior has determined that this rule meets

the applicable standards provided in sections 3(a) and 3(b)(2) of

Executive Order 12988.

Author: The principal author of this rule is Jim Horan, Bureau

of Land Management, 1849 C Street, NW., Washington, DC 20240;

Telephone: (202) 452-5023 (Commercial or FTS).

List of Subjects

43 CFR Part 3500

Government contracts, Mineral royalties, Public lands--mineral

resources, Reporting and recordkeeping requirements, Bonds.

43 CFR Part 3510

Public lands--mineral resources, Reporting and recordkeeping

requirements.

43 CFR Part 3520

Government contracts, Public lands--mineral resources.

43 CFR Part 3540

Public lands--mineral resources.

43 CFR Part 3550

Public lands--mineral resources.

43 CFR Part 3560

Government contracts, Mineral royalties, Public lands--mineral

resources, Surety bonds.

43 CFR Part 3570

Environmental protection, Government contracts, Indians--lands,

Mines, Public lands--mineral resources, Reporting and recordkeeping

requirements.

[[Page 54388]]

Dated: September 27, 1996.

Sylvia V. Baca,

Acting Assistant Secretary of the Interior.

Accordingly, as discussed in the preamble, and under the authority

of 30 U.S.C. 181, 43 U.S.C. 1734, and section 402, Reorganization Plan

No. 3 of 1946 (5 U.S.C. Appendix), we propose to amend 43 CFR Chapter

II as follows:

PARTS 3510, 3520, 3530, 3540, 3550, 3560, AND 3570--[REMOVED]

1. Remove Parts 3510, 3520, 3530, 3540, 3550, 3560, and 3570.

2. Remove the heading, Group 3500--Leasing of Solid Minerals Other

Than Coal and Oil Shale.

3. Revise part 3500 to read as follows:

PART 3500--LEASING OF SOLID MINERALS OTHER THAN COAL AND OIL SHALE

Subpart 3501--Leasing of Solid Minerals Other Than Coal and Oil Shale-

General

Sec.

3501.1 What is the scope of this part?

3501.5 What terms do I need to know to understand this part?

3501.10 What types of mineral use authorizations are allowed under

this part?

3501.16 Does my permit or lease grant me an exclusive right to

develop the lands covered by the permit or lease?

3501.17 Are there any general planning or environmental

considerations that affect my permit or lease?

3501.20 If BLM approves my application for a use authorization

under this part, when does it become effective?

3501.30 Can I appeal BLM's decisions under this part?

Subpart 3502--Qualification Requirements

3502.10 Who may hold leases and permits?

3502.13 Can foreign citizens hold permits or leases?

3502.15 Are there any additional restrictions on holdings of leases

or interests in leases?

3502.20 Will BLM issue me a lease if I am not in compliance with

the diligence requirements of section 2(a)(2)(A) of the Mineral

Leasing Act, as amended?

3502.25 Where do I file evidence that I am qualified to obtain a

permit or lease?

3502.26 Can I supplement or update my qualifications statement?

3502.27 If I am filing as an individual, what information do I have

to provide?

3502.28 If I am an association or a partnership, what information

do I have to provide?

3502.29 If I am a guardian or trustee of a trust holding on behalf

of a beneficiary, what information do I have to provide?

3502.30 If I am a United States corporation, what information do I

have to provide?

3502.33 If I represent an applicant as an attorney-in-fact, do I

have to submit anything to BLM?

3502.34 What if there are other parties in interest?

3502.40 What happens if an applicant for a permit, an applicant for

a preference right lease, or a successful bidder to a competitive

lease dies before the permit or lease is issued?

3502.41 What happens to a permit or lease if a permittee or lessee

dies?

3502.42 What happens if the heir is not qualified?

Subpart 3503--Areas Available for Leasing

3503.10 What areas are not available for leasing of any of the

minerals covered by this part?

3503.11 Are there any other areas in which I cannot get a permit or

lease for the minerals covered by this part?

3503.12 For what areas can I receive a sulphur lease or permit?

3503.13 For what areas can I receive a hardrock lease or permit?

3503.14 For what areas can I get a lease or permit for asphalt?

3503.15 How can I lease the gold or silver reserved to the United

States on land I hold under a private land claim in New Mexico?

3503.16 May I obtain permits or leases for sand and gravel in

Nevada under the terms of this part?

3503.20 What if the lands I'm interested in are administered by an

agency other than BLM?

3503.21 What happens if the surface of the lands I'm interested in

belongs to a non-Federal political subdivision or charitable

organization?

3503.25 Can BLM issue permits and leases for Federal minerals

underlying private surface?

3503.28 Does BLM incorporate any special requirements to protect

the lands and resources?

3503.30 How should I describe the lands I'm applying for in my

application?

3503.31 What if the lands are in States that are part of the Public

Lands Survey System, but have not been surveyed on the ground, are

not shown on the records as protracted surveys, or do not conform to

the public land surveys?

3503.32 Are there any alternative methods of describing acquired

lands?

3503.33 Are there any size or shape limitations on the lands I can

apply for?

3503.36 Will BLM issue a lease for unsurveyed lands?

3503.37 Is there a limit to the acreage of lands I can hold under

permits and leases?

3503.38 How does BLM compute my acreage holdings?

3503.39 Where do I file my application and other necessary

documents?

3503.40 Will BLM make the information in my application available

to the public?

Subpart 3504--Fees, Rental, Royalty and Bonds

3504.11 What forms of payment will BLM and MMS accept?

3504.12 What payments do I send to BLM and what payments do I send

to MMS?

3504.15 What are the rental rates for the different commodities?

3504.16 When is my rental due after the first year of the lease?

3504.17 What happens if I do not pay my rental in a timely fashion?

3504.20 What are the requirements for paying royalties on

production?

3504.21 How does BLM determine the royalty rate?

3504.22 How will I know what the royalty rate is on my lease

production?

3504.25 Do I have to produce a certain amount per year?

3504.26 May I create overriding royalties on my Federal lease?

3504.50 Do I have to file a bond?

3504.51 How do I file my bond?

3504.55 What types of bonds are acceptable?

3504.56 If I have more than one lease or permit, may I combine bond

coverage?

3504.60 Under what circumstances might BLM elect to change the

amount of my bond?

3504.65 What happens to my bond should I fail to carry out my

obligations under a permit or lease?

3504.66 Will I be required to restore my bond to the full amount if

payment has been made from my bond?

3504.70 When will BLM terminate the period of liability of my bond?

3504.71 When will BLM release my bond?

Subpart 3505--Prospecting Permits

3505.10 What is a prospecting permit?

3505.11 How do I obtain a prospecting permit?

3505.12 How do I complete the application form?

3505.15 Is there an acreage limit for my application?

3505.20 Is there a fee or payment required with my application?

3505.25 How does BLM prioritize applications for prospecting

permits?

3505.30 Can I amend or change my application once filed?

3505.31 May I withdraw my application once filed?

3505.40 After submitting my application, do I need to submit

anything else?

3505.45 What is an exploration plan?

3505.50 How will I know if my application has been approved or

rejected?

3505.51 May I correct or refile my application if BLM rejects it?

3505.55 What are my obligations to BLM under an approved

prospecting permit?

3505.60 How long is my prospecting permit in effect?

3505.61 Can BLM extend the term of my prospecting permit?

3505.62 Under what conditions can I extend my prospecting permit?

3505.64 How do I apply for an extension?

3505.65 What information must I include in my request for

extension?

3505.66 If approved, when is my extension effective?

3505.70 May I relinquish my prospecting permit?

3505.75 What happens if I fail to pay the rental?

[[Page 54389]]

3505.80 What happens when my permit expires?

3505.85 Can BLM cancel my prospecting permit for reasons other than

failure to pay rental?

Subpart 3506--Exploration Licenses

3506.10 What is an exploration license?

3506.11 What must I do to obtain an exploration license?

3506.12 Who prepares and publishes the notice?

3506.13 What information must I provide to BLM for inclusion in my

Notice of Exploration?

3506.14 What happens after I publish the Notice of Exploration?

3506.15 Who resolves differences and approves the license and

participants?

3506.20 After my license is issued, may I modify my exploration

plan?

3506.25 Once I have a license, what are my responsibilities?

Subpart 3507--Preference Right Leases

3507.11 What do I have to do to be entitled to a preference right

lease?

3507.15 How do I apply for a preference right lease?

3507.16 What information must my application for a preference right

lease include?

3507.20 Is there a fee or payment required with my application?

3507.25 Under what circumstances will BLM reject my application?

3507.26 What do I need to submit to demonstrate that I've found a

valuable deposit?

3507.30 If I disagree with BLM's reasons for rejecting my

preference right lease, may I appeal?

Subpart 3508--Competitive Leases

3508.11 What lands are available for competitive leasing?

3508.12 How do I get a competitive lease?

3508.14 How much time does BLM allow for a bid to be submitted?

3508.15 What information will the notice of lease sale include?

3508.16 What information will the detailed statement include?

3508.20 How will BLM conduct the sale and handle bids?

3508.21 What happens if I am the successful bidder?

3508.22 What happens if my bid is rejected?

Subpart 3509--Fractional and Future Interest Leases

3509.10 What are future interest leases?

3509.11 For what lands will BLM issue future interest leases?

3509.12 What if I am a mining owner or operator, and I am applying

for a future interest lease as part of my existing operation?

3509.15 Who may apply for a future interest lease?

3509.16 How do I apply for a future interest lease?

3509.17 What information must I include in my application for a

future interest lease?

3509.20 When does my future interest lease take effect?

3509.25 Under what conditions would BLM reject my application for a

future interest lease?

3509.30 May I withdraw my application for a future interest lease?

Subpart 3510--Lease Terms and Conditions

3510.15 How long will my lease be in effect?

3510.20 Do certain leases allow me to mine other commodities as

well?

3510.21 If I am mining calcium chloride, can I obtain a

noncompetitive mineral lease to produce the commingled sodium

chloride?

3510.25 What is meant by lease readjustment and lease renewal?

3510.26 What if I object to the terms and conditions BLM proposes

for a readjusted lease?

3510.27 How will a lease renewal affect my priority as lessee?

3510.30 If I appeal BLM's proposed new terms, do I have to continue

paying royalties or rentals while my appeal is being considered?

3510.50 How do I renew my lease?

Subpart 3511--Assignments and Subleases

3511.11 Once I am issued a permit or lease, can I assign or

sublease it?

3511.12 Is there a fee for requesting an assignment or sublease?

3511.13 What do I submit to get BLM approval for an assignment of

record title?

3511.16 How do I assign or transfer a sublease or operating rights

to my lease or permit?

3511.18 Do I have to notify BLM if I intend to transfer an

overriding royalty to another party?

3511.20 Will BLM approve my assignment or sublease if I have

outstanding liabilities?

3511.25 If I assign my permit or lease, when do my obligations

under the permit or lease end?

3511.30 What are the responsibilities of a sublessor and a

sublessee?

3511.33 Does an assignment or sublease alter the permit or lease

terms?

Subpart 3512--Waiver, Suspension, or Reduction of Rental and Minimum

Royalties

3512.11 Can I be relieved of the lease requirements of rental,

minimum royalty, or production royalty?

3512.12 What criteria does BLM consider in approving a waiver,

suspension, or reduction in rental or minimum royalty, or a

reduction in the royalty rate?

3512.15 How do I apply for relief?

3512.20 What is a suspension of operations and production?

3512.21 What is the effect of a suspension of operations and

production?

3512.22 How do I apply for a suspension of operations and

production?

3512.25 When will my suspension of operations and production take

effect?

3512.26 When and how does my suspension of operations and

production expire or terminate?

3512.30 What is a suspension of operations?

3512.31 What is the effect of a suspension of operations?

3512.32 How do I apply for a suspension of operations?

3512.33 When will my suspension of operations take effect?

3512.34 When and how does my suspension of operations expire or

terminate?

Subpart 3513--Lease Relinquishments, Terminations, and Cancellations

3513.11 Can I relinquish my lease or any part of my lease?

3513.12 What should I include in a request for partial

relinquishment?

3513.15 Where do I file my relinquishment?

3513.20 When is my relinquishment effective?

3513.25 When does my lease expire?

3513.30 Can my lease be canceled?

3513.31 Can BLM waive cancellation or forfeiture?

3513.32 Will BLM give me an opportunity to remedy a violation of

the lease terms?

3513.50 What happens to a bona fide purchaser if the lease assigned

to him or her is subject to cancellation?

Subpart 3514--Noncompetitive Leasing--Fringe Acreage Leases and Lease

Modifications

3514.11 If I already have a Federal lease, or the mineral rights on

adjacent private lands, may I lease adjoining Federal land that

contains the same deposits without competitive bidding?

3514.12 What do I need to do to obtain a lease modification or

fringe acreage lease?

3514.15 What does BLM do with my application?

3514.20 Are there any fees required to modify my existing lease or

obtain a fringe acreage lease?

3514.21 What terms and conditions apply to fringe acreage leases

and lease modifications?

Subpart 3515--Mineral Lease Exchange

3515.10 May I exchange my lease or lease right for another mineral

lease or lease right?

3515.12 What regulatory provisions apply if I want to exchange a

lease or lease right?

3515.15 Under what circumstances will BLM consider initiating an

exchange?

3515.18 Will I be notified that BLM is considering an exchange?

3515.20 Can preference right lease rights be exchanged?

3515.21 What types of lands can be exchanged?

3515.22 What if the lands to be exchanged are not of equal value?

3515.23 Might I be required to submit additional information?

3515.25 If I agree on the lands to be leased in exchange, what

happens next?

3515.26 When will BLM make a decision on the exchange?

3515.27 Will BLM attach any special provisions to the exchange

lease?

[[Page 54390]]

Subpart 3516--Use Permits

3516.10 What are use permits?

3516.11 What commodities allow use permits?

3516.12 What activities can I conduct under a use permit?

3516.15 How do I apply for use permits?

3516.16 What must I include with my application?

3516.20 Is there an annual fee or charge for use of the lands?

3516.30 What happens if I fail to pay the annual rental on my use

permit?

Subpart 3517--Special Provisions Applying to Hardrock Minerals

3517.10 What are development contracts and processing and milling

arrangements?

3517.11 Are leases and permits covered by approved agreements

exempt from the acreage limitations?

3517.15 How do I apply for one of these agreements?

3517.16 How does BLM process my application?

3517.50 Can I collect mineral specimens for non-commercial

purposes?

Authority: 5 U.S.C. 552; 7 U.S.C. 1011(f); 16 U.S.C. 90c-1,

460n-5, 460q-1, 460dd-2, 460mm-3, 508b, and 520; 29 U.S.C. 49g; 30

U.S.C. 189, 192c, 293, and 359; 31 U.S.C. 9701; 43 U.S.C. 387, 1733,

and 1740; Sec. 402, Reorganization Plan No. 3 of 1946 (5 U.S.C.

appendix).

Subpart 3501--Leasing of Solid Minerals Other Than Coal and Oil

Shale-General

Sec. 3501.1 What is the scope of this part?

This part applies to certain minerals leased under the mineral

leasing acts and hardrock minerals leased under Reorganization Plan No.

3 of 1946 on any unclaimed, undeveloped area of available public domain

or acquired lands where leasing of these specific minerals is allowed

by law. Some areas allow only leases, not prospecting permits. Special

areas identified in 43 CFR part 3580 are leased under this parts. Check

that part to identify any special provisions that apply to those

special areas.

Sec. 3501.5 What terms do I need to know to understand this part?

You need to know the following terms, which are used frequently in

this part:

Act means one or more of the statutes referred to in the authority

citation of this regulation, as appropriate.

Chiefly valuable means that land is more valuable for the

development of sodium, sulphur or potassium than for any non-mineral

disposition, or there is not a significant conflict between mineral

extractions and any other disposition of lands.

Hardrock minerals means those locatable minerals for which a

mineral patent may be obtained under the Mining Law of 1872 (30 U.S.C.

22 et seq.) if the mineral resource is on public domain land. They do

not include leasable minerals, nor do they include oil, gas, coal and

oil shale or mineral materials covered by the regulations in 43 CFR

part 3600. Hardrock minerals do include, but are not limited to,

copper, lead, zinc, magnesium, nickel, tungsten, gold, silver,

bentonite, uranium, barite, feldspar and fluorspar.

Leasable minerals for this part means the chlorides, sulfates,

carbonates, borates, silicates or nitrates of potassium or sodium and

related products; sulphur on public lands in the States of Louisiana

and New Mexico and on all acquired lands; phosphate, including

associated and related minerals; asphalt in certain lands in Oklahoma;

and Gilsonite (including all vein-type solid hydrocarbons).

Leasing includes prospecting permits, unless the context otherwise

requires.

MMS means the Minerals Management Service.

Permit means prospecting permit, unless otherwise specified.

Valuable deposit means a mineral occurrence where minerals have

been found and the evidence is of such a character that a person of

ordinary prudence would be justified in the further expenditure of his

or her labor and means, with a reasonable prospect of success in

developing a profitable mine.

Sec. 3501.10 What types of mineral use authorizations are allowed

under this part?

BLM issues several types of mineral use authorizations to qualified

individuals. Certain types of authorizations do not apply to certain

commodities.

(a) ``Prospecting permits'' allow you to explore for leasable

mineral deposits on lands where BLM has determined that prospecting is

necessary to determine the existence of a valuable deposit. Any

qualified holder of a prospecting permit is entitled to a preference

right lease if he or she discovers a valuable deposit of the mineral or

determines the land to be chiefly valuable for sodium, sulfur or

potassium as a result of prospecting efforts under the permit.

(b) ``Exploration licenses'' allow you to explore in areas which

contain known deposits of a leasable mineral to obtain data. With an

exploration license, you do not obtain any preference or other right to

a lease.

(c) ``Preference right leases'' are issued to holders of

prospecting permits who during the term of the permit demonstrate the

discovery of a valuable deposit of the leasable mineral or hardrock

mineral for which BLM issued the permit; and, for sodium, potassium and

sulphur, prove that the lands are chiefly valuable for those minerals.

The lease allows you to mine the deposit in accordance with an approved

mine plan.

(d) ``Competitive leases'' are issued for known deposits of a

leasable mineral or hardrock mineral by competitive bidding. The lease

allows you to mine the deposit in accordance with an approved mine

plan.

(e) ``Fringe acreage leases'' are issued noncompetitively for known

deposits of a leasable mineral or hardrock mineral on Federal lands

adjacent to existing mines on non-Federal lands when the deposits can

only be mined as part of the existing mining operation.

(f) ``Lease modifications'' are used to add known deposits of the

subject leasable mineral or hardrock mineral to an adjacent Federal

lease which contains an existing mine provided the deposits can only be

mined as part of the existing mining operation.

Sec. 3501.16 Does my permit or lease grant me an exclusive right to

develop the lands covered by the permit or lease?

No. Your permit or lease gives you an exclusive right to the

mineral, but not to the lands. BLM may allow other uses or disposal of

the lands, including leasing of other minerals, as long as those uses

or disposal will not unreasonably interfere with your operation. Any

other permits or leases covering the lands contained within your permit

or lease will contain suitable stipulations based on consideration of

safety, environmental protection, conservation, maximum recovery of the

resource, and other such factors, for simultaneous operation. You must

also make all reasonable efforts to avoid interference with other

authorized uses.

Sec. 3501.17 Are there any general planning or environmental

considerations that affect my permit or lease?

(a) BLM will not issue a permit or lease that does not conform with

the decisions, terms and conditions of an applicable comprehensive land

use plan.

(b) BLM or the surface management agency will comply with NEPA

before issuing you a permit or lease.

(c) BLM will issue permits and leases only in a manner consistent

with any unsuitability designation made under 43 CFR part 1600.

[[Page 54391]]

Sec. 3501.20 If BLM approves my application for a use authorization

under this part, when does it become effective?

BLM will approve your use authorization effective the first day of

the month after BLM signs it, unless you request, in writing, that it

be effective the first day of the month in which it is approved. This

applies to all leases, licenses, permits, transfers and assignments in

this part, unless a specific regulation provides otherwise.

Sec. 3501.30 Can I appeal BLM's decisions under this part?

Any party adversely affected by a BLM decision under this part may

appeal the decision in accordance with 43 CFR parts 4 and 1840.

Subpart 3502--Qualification Requirements

Sec. 3502.10 Who may hold leases and permits?

You may hold an interest in leases and permits under this part only

if you are:

(a) An adult citizen of the United States;

(b) An association (including partnerships and trusts) of such

citizens;

(c) A corporation organized under the laws of the United States or

of any State or territory thereof; or

(d) A legal guardian or trustee of a minor.

Sec. 3502.13 Can foreign citizens hold permits or leases?

No. Individual foreign citizens cannot hold permits or leases.

Citizens of foreign countries may hold stock in United States

corporations that hold leases or permits so long as the laws, customs,

or regulations of their country do not deny similar privileges to

citizens or corporations of the United States. A list of the countries

which deny such privileges is available from any BLM State office.

Sec. 3502.15 Are there any additional restrictions on holding leases

or interests in leases?

Yes. If you are a member of, or delegate to, Congress, a Resident

Commissioner, or any employee of the Department of the Interior, except

as provided in part 20 of this title, you may not acquire or hold any

Federal lease, or interest therein. (Officer, agent or employee of the

Department-see 43 CFR part 20; Member of Congress-see R.S. 3741; 41

U.S.C. 22; 18 U.S.C. 431-433)

Sec. 3502.20 Will BLM issue me a lease if I am not in compliance with

the diligence requirements of section 2(a)(2)(A) of the Mineral Leasing

Act, as amended?

BLM will not issue, modify or renew a lease, or approve a transfer

of any lease or interest in a lease, for any of the minerals covered by

this part unless you are in compliance with section 2(a)(2)(A) of the

Mineral Leasing Act, as amended (compliance is determined for Federal

coal leases in accordance with 43 CFR 3462.1-2(e)). If BLM issues you a

lease when you are in violation, BLM will cancel your lease as outlined

in subpart 3513 of this part.

Sec. 3502.25 Where do I file evidence that I am qualified to obtain a

permit or lease?

You must file evidence with BLM that you meet the qualification

requirements. You may file this evidence separately from your

application for a permit or lease, but you should file it in the same

office where you filed your application.

Sec. 3502.26 Can I supplement or update my qualifications statement?

After BLM accepts your qualifications, you may submit additional

information to the same BLM office by referring to the serial number of

the record in which your evidence is filed. You must make any changes

to your qualifications statement in writing. It is your responsibility

to assure that such evidence is current, accurate and complete.

Sec. 3502.27 If I am filing as an individual, what information do I

have to provide?

If you are an individual, you must submit a signed statement

showing:

(a) You are a U.S. citizen; and

(b) Your acreage holdings, including any holding through a

corporation, association, or partnership in which you are the

beneficial owner of more than 10% of the stock or other instruments of

control, do not exceed the limit for the mineral concerned. (See

subpart 3503 of this part for a discussion of acreage holdings.)

Sec. 3502.28 If I am an association or a partnership, what

information do I have to provide?

If you are an association, such as a partnership, a member or

authorized attorney-in-fact must submit the following:

(a) A signed statement setting forth:

(1) The names, addresses, and citizenship of all members owning or

controlling 10 percent or more of the association or partnership;

(2) The names of the members authorized to act on behalf of the

association or partnership; and

(3) That the association or partnership's acreage holdings for the

particular mineral concerned do not exceed the allowable acreage

holdings for that mineral.

(b) A copy of the articles of the association or partnership.

Sec. 3502.29 If I am a guardian or trustee for a trust holding on

behalf of a beneficiary, what information do I have to provide?

If you are a guardian or trustee for a trust holding on behalf of a

beneficiary, you must submit the following:

(a) A signed statement setting forth:

(1) The citizenship of the beneficiary;

(2) Your citizenship;

(3) The grantor's citizenship, if the trust is revocable; and

(4) That the acreage holdings of the beneficiary, the guardian or

trustee, or the grantor, if the trust is revocable, do not exceed that

allowed.

(b) A copy of the court order or other document authorizing or

creating the trust or guardianship.

Sec. 3502.30 If I am a United States corporation, what information do

I have to provide?

If you are a corporation, an officer or authorized attorney-in-fact

must submit a signed statement setting forth:

(a) The State or territory in which the corporation is

incorporated;

(b) The name and citizenship, and percentage of stock owned, held,

or controlled by, of any stockholder owning, holding, or controlling

more than 10 percent of the stock of the corporation;

(c) The names of the officers authorized to act on behalf of the

corporation; and

(d) That the corporation's acreage holdings, and those of any

stockholder identified under paragraph (b) of this section, do not

exceed that allowed.

Sec. 3502.33 If I represent an applicant as an attorney-in-fact, do I

have to submit anything to BLM?

You must submit evidence of your authority to act on behalf of the

applicant. The applicant must also submit a separate statement as to

qualifications and acreage holdings unless the power of attorney

specifically authorizes and empowers you to make or to execute such

statements on his or her behalf.

Sec. 3502.34 What if there are other parties in interest?

If you are not the sole party in interest to a permit or lease, you

must submit with your application the names of all other parties who

hold or will hold any interest in the application or in the permit or

lease, when issued. All interested parties must furnish appropriate

evidence of their

[[Page 54392]]

qualifications to hold permit or lease interest.

Sec. 3502.40 What happens if an applicant for a permit, an applicant

for a preference right lease, or a successful bidder to a competitive

lease dies before the permit or lease is issued?

(a) If probate of the estate has been completed or is not required,

BLM will issue the permit or lease to the heirs or devisees, or their

guardian. BLM will recognize the heirs or devisees or their guardian as

the record title holders of the permit or lease. They must file the

following information with BLM:

(1) A certified copy of the will or decree of distribution, if any,

and if not, a statement signed by the heirs that they are the only

heirs and citing the provisions of the law of the deceased's last

domicile showing that no probate is required; and

(2) A statement signed by each of the heirs or devises with

reference to citizenship and holdings similar to that required by

Sec. 3502.27. If the heir or devisee is a minor, the statement must be

signed by the guardian or trustee.

(b) If probate is required but has not been completed, BLM will

issue the permit or lease to the executor or administrator of the

estate. BLM will consider the executor or administrator to be the

record title holder of the permit or lease. He or she must submit the

following information:

(1) Evidence that the person who, as executor or administrator

submits forms of lease and bond, has authority to act in that capacity

and to sign those forms;

(2) Evidence that the heirs or devisees are the only heirs or

devisees of the deceased; and

(3) A statement signed by each heir or devisee concerning

citizenship and holdings, as required by Sec. 3502.27.

Sec. 3502.41 What happens to a permit or lease if a permittee or

lessee dies?

If the permittee or lessee dies, BLM will recognize as the record

title holder of the permit or lease:

(a) The executor or administrator of the estate, if probate is

required but has not been completed and they have filed the evidence

required by Sec. 3502.40(b); or

(b) The heirs or devisees, if probate has been completed or is not

required, if they have filed evidence required by Sec. 3502.40(a).

Sec. 3502.42 What happens if the heir is not qualified?

Consistent with the provisions of the Mineral Leasing Act (30

U.S.C. 184(g)), BLM will allow unqualified heirs to hold ownership for

not more than two years. During that period, the heir must either

become qualified or divest himself or herself of the interest.

Subpart 3503--Areas Available for Leasing

Sec. 3503.10 What areas are not available for leasing of any of the

minerals covered by this part?

The Secretary of the Interior is prohibited from leasing lands on

any of the following Federal areas:

(a) Land recommended for wilderness allocation by the surface

managing agency;

(b) Lands within BLM wilderness study areas;

(c) Lands designated by Congress as wilderness study areas; and

(d) Lands within areas allocated for wilderness or further planning

in Executive Communication 1504, Ninety Sixth Congress (House Document

Number 96-119), unless such lands are allocated to uses other than

wilderness by a land and resource management plan or have been released

to uses other than wilderness by an act of Congress.

Sec. 3503.11 Are there any other areas in which I cannot get a permit

or lease for the minerals covered by this part?

You may not obtain a prospecting permit or lease for the solid

leasable and hardrock minerals in the following areas:

(a) Lands within the boundaries of any unit of the National Park

System, except as expressly authorized by law;

(b) Lands within Indian Reservations, except the Uintah and Ouray

Indian Reservation, Hillcreek Extension, State of Utah;

(c) Lands within incorporated cities, towns and villages;

(d) Lands within the National Petroleum Reserve-Alaska and oil

shale reserves and within the national petroleum reserves;

(e) Lands acquired by the United States for development of helium,

fissionable material deposits or other minerals, except leasable

minerals, essential to the defense of the country;

(f) Lands acquired by foreclosure or otherwise for resale;

(g) Acquired lands reported as surplus under the Federal Property

and Administrative Services Act of 1949 (40 U.S.C. 471 et seq.);

(h) Any tidelands or submerged coastal lands within the continental

shelf adjacent or littoral to any part of lands within the jurisdiction

of the United States; and

(i) Lands located adjacent to or within Searles Lake, California

are not available for potassium prospecting permits. BLM will lease

potassium in this area by competitive bidding.

Sec. 3503.12 For what areas can I receive a sulphur lease or permit?

BLM may issue sulphur leases and permits for any public domain

lands in the States of Louisiana and New Mexico. You can also obtain

sulphur leases or permits for Federal Acquired lands nationwide,

subject to the exceptions listed in 43 CFR 3503.10 and 3503.11.

Sec. 3503.13 For what areas can I receive a hardrock lease or permit?

Subject to the consent of the surface managing agency, you can

obtain hardrock leases and permits only in the following areas:

(a) Lands identified in the Reorganization Plan No. 3 of 1946, for

which jurisdiction for mineral leasing was transferred to the Secretary

of the Interior. These include lands originally acquired under the

following acts:

(1) 16 U.S.C. 520 (Weeks Act);

(2) Title II of the National Industrial Recovery Act (40 U.S.C.

401, 403a and 408;

(3) The 1935 Emergency Relief Appropriation Act (48 Stat. 115 and

118);

(4) Section 55 of Title I of the Act of August 24, 1935 (49 Stat.

750 and 781); and

(5) The Act of July 22, 1937 (7 U.S.C. 1011(c) and 1018)

[repealed];

(b) Lands added to the Shasta National Forest by Act of March 19,

1948 (62 Stat. 83);

(c) Public Domain Lands within the National Forests in Minnesota

(16 U.S.C. 508(b));

(d) Lands in New Mexico that are portions of Juan Jose Lobato Grant

(North Lobato) and Anton Chica Grant (El Pueblo) as described in

section 1 of the Act of June 28, 1952 (66 Stat. 285);

(e) Lands in the Shasta and Trinity Units of the Whiskeytown-

Shasta-Trinity National Recreation Areas;

(f) The following National Park Lands:

(1) Lake Mead National Recreation Area;

(2) Ross Lake and, in accordance with 16 U.S.C. 906-1(b), Lake

Chelan Recreation Area;

(3) Glen Canyon National Recreation Area; and

(4) Lands in the Whiskeytown Unit of the Whiskeytown-Shasta-Trinity

National Recreation Area;

(g) Lands patented to the State of California for park or other

purposes where minerals were reserved to the United States; and

(h) White Mountains National Recreation Area, Alaska.

[[Page 54393]]

Sec. 3503.14 For what areas can I get a lease or permit for asphalt?

You may obtain leases for asphalt only on certain Federal lands in

the State of Oklahoma. You may not obtain prospecting permits for

asphalt.

Sec. 3503.15 How can I lease the gold or silver reserved to the United

States on land I hold under a private land claim in New Mexico?

If you are the holder of the remaining record title interest or

operating rights interest in confirmed private land grants in the State

of New Mexico you can lease gold and silver reserved to the United

States. 43 CFR part 3580, subpart 3581 discusses the requirements for

leasing silver and gold.

Sec. 3503.16 May I obtain permits or leases for sand and gravel in

Nevada under the terms of this part?

You may not get new leases or permits. However, any sand and gravel

lease already issued for certain lands patented to the State of Nevada

can be renewed at the expiration of its initial term, for successive

additional terms of 5 years.

Sec. 3503.20 What if the lands I'm interested in are administered by

an agency other than BLM?

(a) BLM will lease or permit public domain lands administered by

other agencies only after consulting with the surface management

agency. When required by law, BLM will also obtain the consent of the

surface management agency.

(b) Before issuing leases or permits on acquired lands, BLM must

obtain written consent from the surface management agency. For

preference right lease applications, where the surface management

agency has consented to the prospecting permit, BLM will consult with

that agency before approving the lease. At that time, the surface

management agency may request supplemental data regarding surface

disturbance and reclamation.

(c) If a surface management agency requires special stipulations to

a lease or permit as a condition of granting its consent, or refuses to

consent to the issuance of the lease or permit, you may pursue any

administrative remedies provided by that agency. If you notify BLM

within 30 days of receipt of BLM's decision that you have requested the

surface management agency to reconsider its decision, BLM will suspend

the time for filing an appeal under 43 CFR part 4 until a decision is

reached by the surface management agency.

Sec. 3503.21 What happens if the surface of the lands I'm interested

in belongs to a non-Federal political subdivision or charitable

organization?

If the United States has conveyed or transferred the surface of the

lands included within your permit or lease application to any State or

political subdivision, agency or instrumentality thereof, or a college

or any other educational corporation or association, or a charitable or

religious corporation or association, BLM must notify them by certified

mail of your application for a permit or lease. BLM will give the

surface owner a reasonable time, not to exceed 90 days, to suggest any

lease stipulations necessary for the protection of existing surface

improvements or uses, provide reasons for the stipulations, or file any

objections to the issuance of the lease or permit. BLM will make the

final decision whether to issue or deny the lease and which, if any,

stipulations identified by the surface owner will be included within

the lease terms, based on how the interests of the United States would

best be served.

Sec. 3503.25 Can BLM issue permits and leases for Federal minerals

underlying private surface?

Yes. Where the United States has disposed of certain lands under

specific land disposal statutes, and those statutes reserved certain

leasable or hardrock minerals to the United States together with the

right to prospect for, mine, and remove the minerals under applicable

leasing laws and regulations, BLM will manage and dispose of those

minerals under this part.

Sec. 3503.28 Does BLM incorporate any special requirements to protect

the lands and resources?

BLM will specify stipulations, including those specified by the

surface management agency or private surface owner, to your permit or

lease to ensure adequate utilization and protection of the lands and

their resources. (See also 43 CFR part 3580.)

Sec. 3503.30 How should I describe the lands I'm applying for in my

application?

If the lands are in States that are part of the Public Land Survey

System and if those lands have been surveyed or are included within an

approved protracted survey, describe the lands by legal subdivision,

section, township, and range.

Sec. 3503.31 What if the lands are in States that are part of the

Public Lands Survey System, but have not been surveyed on the ground,

are not shown on the records as protracted surveys, or do not conform

to the public land surveys?

Describe such lands by metes and bounds in accordance with standard

survey practices. Connect your description by courses and distances

between successive angle points to an official corner of the public

land surveys or, for accreted lands, to an angle point that connects to

a point on an official corner of the public lands survey to which the

accretions belong.

Sec. 3503.32 Are there any alternative methods of describing acquired

lands?

Yes. You may describe acquired lands in the manner as discussed

above. You may instead use the description shown on the deed or other

document that conveyed title to the United States. If you are applying

for less than the entire tract acquired by the United States, you must

describe the land using courses and distances tied to a point on the

boundary of the requested tract. Where a tract number has been assigned

by the acquiring agency to the identical tract you wish to lease or

permit, you may describe those lands by the tract number, as long as

you include a map which clearly shows the location of the lands sought

with respect to the administrative unit or the project of which they

are a part. In States outside of the Public Lands Survey System, you

should describe the lands by tract number, and include a map.

Sec. 3503.33 Are there any size or shape limitations on the lands I

can apply for?

Generally, a quarter-quarter section or a lot is the smallest legal

subdivision for which you may apply. The lands must be in reasonably

compact form.

Sec. 3503.36 Will BLM issue a lease for unsurveyed lands?

All leased areas must be surveyed. If you are applying for a permit

or lease on lands for which BLM or the surface management agency

determines that a survey is needed, you will be required to pay for the

survey. If BLM intends to issue a lease by competitive bidding, BLM

will pay for surveying the lands.

Sec. 3503.37 Is there a limit to the acreage of lands I can hold under

permits and leases?

Yes. The limits are summarized in the table.

[[Page 54394]]

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Maximum

Nationwide acreage Maximum acreage in any one acreage for

Affected mineral limitation State a permit or

lease

----------------------------------------------------------------------------------------------------------------

Asphalt................................ (Applies to OK only)...... 2,560 acres................... 640

Gilsonite.............................. (Not applicable).......... 7,680 acres................... 5,120

Hardrock minerals...................... (Not applicable).......... 20,480 acres total, 10,240 2,560

acres in leases, unless

increased up to 20,480 for

orderly mine development.

Phosphate.............................. Not to exceed 20,480 acres (Not applicable).............. 2,560

in permits or leases.

Potassium.............................. (Not applicable).......... 80,000 acres (larger if 2,560

necessary for extraction of

sodium from concentrated

brines in connection with an

existing mining operation).

Sodium................................. (Not applicable).......... 5,120 acres (may be increased 2,560

to 15,360 acres to facilitate

an economic mine).

Sulphur................................ (Not applicable).......... 1,920 acres in 3 leases or 640

permits.

----------------------------------------------------------------------------------------------------------------

Sec. 3503.38 How does BLM compute my acreage holdings?

BLM computes acreage holdings as follows:

(a) The maximum acreage in any one State refers to either public

domain lands or acquired lands. Under a lease or permit for acquired

lands, you may not hold acreage for leasable minerals greater than the

public domain acreage for the same minerals allowed to be held under

the Act. BLM will not charge public domain lease holdings against

acquired lands lease holdings and vice versa; these holdings are not

interchangeable.

(b) Where the United States owns only a fractional interest in the

mineral resources of lands, BLM will charge only that part of the total

acreage involved in your lease or permit which is proportionate to the

United States' interest as acreage holdings. Example: If the United

States holds a 25% interest in 200 acres, you will be charged with 50

acres (200 x .25).

(c) BLM will not charge any acreage in a future interest lease

against your acreage limitations until the date the lease takes effect.

(d) Your acreage holdings for acreage limitation purposes will be

proportionate to your direct interest and your indirect interest

through stock or other instruments of ownership or control of the

association or corporation in the total lease and permit acreage. You

will not, however, be charged with your share of any acreage holdings

of a corporation or association unless you own 10 percent or more

interest through stock or other instruments of ownership or control of

the association or corporation in the association or corporation.

Sec. 3503.39 Where do I file my application and other necessary

documents?

BLM requires that your initial application be filed in the State

Office administering the lands for which you are applying or in the BLM

office specified in our correspondence with you. BLM considers a

document to be filed when it is received in that office.

Sec. 3503.40 Will BLM make the information in my application available

to the public?

All information that you submit under these regulations is subject

to disclosure upon request, unless the information is exempt from

disclosure under the regulations implementing the Freedom of

Information Act (5 U.S.C. 552) at 43 CFR part 2, or unless otherwise

provided in this part.

Subpart 3504--Fees, Rental, Royalty and Bonds

Sec. 3504.11 What forms of payment will BLM and MMS accept?

Any payment you submit must be by U.S. currency, postal money

order, or negotiable instrument payable in U.S. currency. Payments made

to MMS may also be made by electronic funds transfer.

Sec. 3504.12 What payments do I send to BLM and what payments do I

send to MMS?

(a) Filing fees and rentals.

(1) You should pay all filing fees and all first-year rentals and

all bonus bids for leases to the BLM State office with jurisdiction

over the lands you are interested in. Make your instruments payable to

the Department of the Interior-Bureau of Land Management. See 43 CFR

part 1800, subpart 1821 for a list of BLM addresses.

(2) You should pay all second-year and subsequent rentals and all

other payments for leases to the Department of the Interior-Minerals

Management Service.

(b) Royalties. You should pay all royalties on producing leases and

all payments under leases in their minimum production period to the

MMS.

Sec. 3504.15 What are the rental rates for the different commodities?

Rental rates for prospecting permits for all commodities are $.50

per acre. Rental rates for leases for each commodity are shown in the

table. The rental payment must be for the total acreage. Round up any

fractional acreage to the next highest acre. If you do not know the

exact acreage, compute the total acreage by assuming each of the

smallest subdivisions is 40 acres. Pay the minimum rental or the per-

acre rental, whichever is greater. The minimum rental is $20 per lease

or permit for all commodities except asphalt, which has no minimum

rental.

----------------------------------------------------------------------------------------------------------------

Sulphur/

Annual lease rental per acre Phosphate Sodium Gilsonite Asphalt Hardrock

----------------------------------------------------------------------------------------------------------------

1st year....................................... $.25 $.25 $.50 $.25 $1

2nd year....................................... .50 .50 .50 .50 1

3rd year....................................... .50 .50 .50 .50 1

4th year....................................... 1 .50 .50 .50 1

5th year....................................... 1 .50 .50 .50 1

6th year through lease end..................... 1 1 .50 1 1

----------------------------------------------------------------------------------------------------------------

[[Page 54395]]

Sec. 3504.16 When is my rental due after the first year of the lease?

Pay the rental in advance each year on or before the anniversary of

the effective date of the lease. You must pay rental for each acre or

fraction of an acre within your lease as long as the lease is in

effect. BLM will credit your rental for any year against the first

royalties as the royalties accrue under the lease during that year.

Sec. 3504.17 What happens if I do not pay my rental in a timely

fashion?

BLM will notify you that unless you pay within 30 days from receipt

of the notification, BLM will take action to cancel your lease.

Sec. 3504.20 What are the requirements for paying royalties on

production?

You must pay royalties on any production from your lease in

accordance with the terms specified in the lease. See Sec. 3504.25 for

minimum royalty amounts. You must pay royalty on a percentage of the

quantity or gross value of the output of the produced commodity at the

point of shipment to market.

Sec. 3504.21 How does BLM determine the royalty rate?

BLM determines the royalty rate on a case-by-case basis, subject to

certain minimum royalty rates:

(a) The royalty rate for phosphate and sulphur cannot be less than

5% of the gross value of the output of the commodity or related

mineral.

(b) The royalty rate for potassium and sodium cannot be less than

2% of the quantity or gross value of the output of the commodity or

related product at the point of shipment to market.

(c) There is no minimum royalty rate for gilsonite and hardrock

minerals.

(d) The royalty rate for asphalt cannot be less than 25 cents per

ton of 2,000 pounds of marketable production.

Sec. 3504.22 How will I know what the royalty rate is on my lease

production?

If BLM offered the lease competitively, the rates are in the notice

of lease sale. If you applied for a noncompetitive lease, BLM will send

you a royalty rate schedule for your concurrence and signature before

we issue the lease. BLM attaches production royalty rates to, and makes

them a part of, all leases. BLM determines the rate on an individual

case basis before we offer the lease.

Sec. 3504.25 Do I have to produce a certain amount per year?

You are required to produce a minimum amount or pay a minimum

royalty in lieu of production each lease year, beginning with the sixth

lease year or the first full year of a renewed or readjusted lease.

This requirement applies to all mineral leases described in part 3500

that BLM issues, reviews, or readjusts after April 22, 1996. The

minimum royalty payment is $3 per acre or fraction of an acre payable

in advance. BLM will credit this payment to your production royalties

for that year only. You are exempt from these minimum production and

royalty requirements if you have hardrock mineral leases or development

or operating agreements subject to escalating rentals.

Sec. 3504.26 May I create overriding royalties on my Federal lease?

Yes. However, if BLM determines that the overriding royalty

interest you created might cause premature abandonment of the property

or cause marginally economic or low grade deposits to not be mined, BLM

will issue a decision ordering you to reduce or suspend the overriding

royalty to as little as 1% of the gross value at point of royalty

assessment. Where more than one overriding royalty interest is

involved, BLM will apply any suspension or reduction to the respective

interests in the manner agreed upon by the interest holders. In the

absence of an agreement, BLM will apply the suspension or reduction in

inverse order of the dates the overriding interests were created.

Sec. 3504.50 Do I have to file a bond?

Yes. BLM will establish individual permit and lease bond amounts on

a case-by-case basis. In making this determination, BLM will consider

the estimated cost of reasonable stabilization and reclamation of the

areas to be disturbed and conformance with permit and lease terms. The

minimum bond requirement for prospecting permits is $1,000. The minimum

bond requirement for leases is $5,000.

Sec. 3504.51 How do I file my bond?

File your bond in the BLM State office where you applied for a

permit or lease. You must use an approved BLM form. File one copy,

executed by you as principal or, in the case of surety bonds, by both

you and an acceptable surety.

Sec. 3504.55 What types of bonds are acceptable?

You can file either a personal bond or a surety bond.

(a) Personal bonds may be in the form of:

(1) Cash;

(2) Cashier's check;

(3) Certified check; or

(4) Negotiable U.S. Treasury bonds of a value equal to the amount

of the bond. If you submit Treasury bonds, include a conveyance giving

the Secretary full authority to sell the securities in case you default

in your performance of the terms and conditions of your lease or

permit.

(b) Surety bonds must be issued by qualified surety companies

approved by the Department of the Treasury. A list of qualified

sureties is available from any BLM State Office.

Sec. 3504.56 If I have more than one lease or permit, may I combine

bond coverage?

Yes. In lieu of separate bonds for each lease or permit, you may

file a bond to cover all leases and permits for a specific mineral in

any one State, or nationwide. BLM establishes the amount of the bond;

however, the minimums are shown below:

(a) Statewide bonds will be no less than $25,000. File these bonds

in the BLM State Office for the State where your leases are located.

(b) Nationwide bonds will be no less than $75,000. File these bonds

in any BLM State Office.

Sec. 3504.60 Under what circumstances might BLM elect to change the

amount of my bond?

BLM may increase or decrease the amount of your bond when BLM

determines that a change in coverage is appropriate.

Sec. 3504.65 What happens to my bond should I fail to carry out my

obligations under a permit or lease?

BLM will take payment from your bond to cover any obligations on

which you default. Your bond will be reduced accordingly. If the surety

makes a payment, BLM will reduce the face amount of the surety bond and

the surety's liability by the amount of the payment.

Sec. 3504.66 Will I be required to restore my bond to the full amount

if payment has been made from my bond?

Yes. After any default, BLM will notify you of the amount needed to

bring your bond up to the required level. We will give you no more than

six months to post a new bond or increase the existing bond to its pre-

default level. You may elect to file separate or substitute bonds for

each lease or permit. If you do not replace your bond, BLM may cancel

the leases or permits covered by the bond.

Sec. 3504.70 When will BLM terminate the period of liability of my

bond?

BLM will terminate the period of liability of a surety or other

provider of

[[Page 54396]]

a bond at any time. The bond provider must provide 30 days notice to

BLM and to the principals whose obligations are secured. You may not

conduct any operations after a bond is terminated, without providing a

new bond satisfactory to BLM. BLM will also terminate the period of

liability on an old bond once a new bond has been filed and BLM accepts

it.

Sec. 3504.71 When will BLM release my bond?

BLM will release your bond when we have determined, after the

passage of a reasonable period of time, that you have paid all

royalties, rentals, penalties, and assessments, satisfied all permit or

lease obligations, reclaimed the site, and taken effective measures to

ensure that the mineral prospecting or development activities will not

have an adverse effect on surface or subsurface resources.

Subpart 3505--Prospecting Permits

Sec. 3505.10 What is a prospecting permit?

(a) A prospecting permit gives you, as the permittee, the exclusive

right to prospect on and explore lands available for leasing to

determine the existence of a valuable deposit of:

(1) Phosphate;

(2) Potassium;

(3) Sulphur;

(4) Sodium

(5) Gilsonite; or

(6) A hardrock mineral.

(b) You may remove only material needed to demonstrate the

existence of a valuable mineral deposit.

Sec. 3505.11 How do I obtain a prospecting permit?

You must provide three copies of the official BLM application form

and file it with the BLM office with jurisdiction over the lands you

are interested in.

Sec. 3505.12 How do I complete the application form?

Your application must be legible and dated. It must contain your or

your agent's original signature. Your application must also include:

(a) Your name and address;

(b) A statement of your qualifications and holdings (See subpart

3503 of this part);

(c) A complete and accurate land description in compliance with

subpart 3502 of this part;

(d) Three copies of any maps if needed to accompany the

description; and

(e) The name of the commodity or commodities for which you are

applying.

Sec. 3505.15 Is there an acreage limit for my application?

The acreage in your application must not exceed or cause your

holdings for that mineral to exceed the maximum allowed under the

permit. BLM cannot issue a permit or lease if it causes you to exceed

the State or nation-wide limits. See the table at Sec. 3503.37.

Sec. 3505.20 Is there a fee or payment required with my application?

Yes. You must include with your application:

(a) A nonrefundable filing fee of $25; and

(b) The first year's rental, as shown in Sec. 3504.15.

Sec. 3505.25 How does BLM prioritize applications for prospecting

permits?

BLM will prioritize applications based on the time of filing. Where

more than one application is filed at the same time for the same

commodity on the same lands, BLM will hold a public drawing in

accordance with 43 CFR part 1820, subpart 1821 to determine priority.

Sec. 3505.30 Can I amend or change my application once filed?

Yes. However, if your amendment adds lands, BLM will assign

priority to your amended application for such additional lands from the

date you filed the amended application. You must send the rental for

the added lands with your amended application. You do not need to

submit additional filing fees. You cannot exceed the acreage

limitations specified in Sec. 3503.37.

Sec. 3505.31 May I withdraw my application once filed?

Yes. If you withdraw your application in whole or in part before

BLM signs the permit, your rental payment will be refunded

proportionate to the extent of your withdrawal. BLM will retain the

filing fee.

Sec. 3505.40 After submitting my application, do I need to submit

anything else?

Yes. After initially reviewing your permit application, but before

issuing the prospecting permit, BLM will require you to submit three

copies of an exploration plan. You must also submit a bond. See subpart

3504 of this part, especially Sec. 3504.50, for information on bonds.

Sec. 3505.45 What is an exploration plan?

An exploration plan shows how you intend to determine the existence

and workability of a valuable deposit. Your exploration plan must,

insofar as possible, include the following:

(a) The names, addresses and telephone numbers of persons

responsible for operations under your plan and to whom BLM will deliver

notices and orders;

(b) A brief description, including maps, of geologic, water,

vegetation and other physical factors, and the distribution, abundance

and habitat of fish and wildlife, particularly threatened and

endangered species, that your proposed exploration may affect, and the

present land use in and adjacent to the area;

(c) A narrative description showing:

(1) The method of exploration and types of equipment you will use;

(2) The measures you will take to prevent or control fire, soil

erosion, pollution of surface and ground water, pollution of air,

damage to fish and wildlife or their habitat and other natural

resources and hazards to public health and safety, including specific

actions necessary to meet all applicable laws and regulations;

(3) The method for plugging drill holes; and

(4) The measures you will take for surface reclamation, which must

include as appropriate:

(i) A reclamation schedule;

(ii) The method of grading, backfilling, soil stabilization,

compacting and contouring;

(iii) The method of soil preparation and fertilizer application;

(iv) The type and mixture of shrubs, trees, grasses, forbs or other

vegetation to be planted; and

(v) The method of planting, including approximate quantity and

spacing;

(d) The estimated timetable for each phase of the work and for

final completion of the program;

(e) Suitable topographic maps or aerial photographs showing

existing bodies of surface water, topographic, cultural and drainage

features, and the proposed location of drill holes, trenches and roads;

and

(f) Other data which BLM may require.

Sec. 3505.50 How will I know if my application has been approved or

rejected?

If BLM accepts your application, we will issue your lease or

permit. If BLM rejects your application, we will issue a decision

document to you by certified mail (return receipt requested). In it BLM

will:

(a) Detail the reasons for rejecting your application;

(b) Identify any items you will need to correct in your

application; and

(c) Describe how you can appeal an adverse decision.

[[Page 54397]]

Sec. 3505.51 May I correct or refile my application if BLM rejects it?

If you file a new, corrected application for the same lands within

30 days of receipt of the rejection, BLM will apply the nonrefundable

filing fee and rental payment submitted with your original application

to the new application, provided the serial number of the original

application is shown on your new application. BLM will establish

priority for the permit as of the date the new application is filed. If

you do not file a new application within 30 days of rejection, only

your rental payment will be refunded.

Sec. 3505.55 What are my obligations to BLM under an approved

prospecting permit?

You must:

(a) Pay your annual rental in a timely fashion. See Secs. 3504.15

and 3504.16;

(b) Comply with all permit terms and stipulations attached to the

permit by the surface management agency;

(c) Conduct only those exploration activities approved as part of

your existing exploration plan; and

(d) Discontinue activities following expiration of the initial term

unless and until your permit has been extended by BLM.

Sec. 3505.60 How long is my prospecting permit in effect?

Your prospecting permit will be effective for an initial term of 2

years.

Sec. 3505.61 Can BLM extend the term of my prospecting permit?

BLM may extend prospecting permits for phosphate and hardrock for a

period not to exceed 4 years, and for potassium and Gilsonite a period

not to exceed 2 years. Sodium and sulphur prospecting permits cannot be

extended.

Sec. 3505.62 Under what conditions can I extend my prospecting permit?

Your permit may be extended if you can prove that:

(a) You have explored with reasonable diligence and been unable to

determine the existence and workability of a valuable deposit covered

by the permit. Reasonable diligence means that, in the opinion of BLM,

you have drilled a sufficient number of core holes or performed other

comparable prospecting to explore the permit area within the time

allowed; or

(b) Your failure to perform diligent prospecting activities was due

to conditions beyond your control.

Sec. 3505.64 How do I apply for an extension?

There is no application form. You must request an extension at

least 90 days prior to expiration of the permit. Accompany your request

with a nonrefundable filing fee of $25; and the first year's rental, in

accordance with Secs. 3504.15 and 3504.16.

Sec. 3505.65 What information must I include in my request for

extension?

Your request must:

(a) Demonstrate that you have met the conditions for extension set

out in 43 CFR 3505.62;

(b) Describe your previous diligent prospecting activities on the

permit; and

(c) Show how much additional time you need to complete prospecting

work.

Sec. 3505.66 If approved, when is my extension effective?

Your permit extension will become effective as of the date BLM

approves it, or on the expiration of the original permit, whichever is

later.

Sec. 3505.70 May I relinquish my prospecting permit?

Yes. You may relinquish the entire prospecting permit or any legal

subdivision thereof. A partial relinquishment must clearly describe the

exact acreage you want to relinquish. BLM will not accept a

relinquishment if you are not in compliance with the requirements of

your permit. Once BLM accepts the request, your relinquishment will be

effective as of the date you filed it with BLM. The lands you

relinquished, if otherwise available, will be open to any new

applications immediately after BLM notes the relinquishment on the

official status records. If you relinquish part or all of your permit,

you lose any right or entitlement to any preference right lease to the

lands covered by the relinquishment.

Sec. 3505.75 What happens if I fail to pay the rental?

Your prospecting permit will automatically terminate if you fail to

pay the rental on or before the anniversary date of the permit. BLM

will note the termination of your permit for failure to pay rental on

the official status records. Upon notation, BLM will make the lands

covered by the permit available for filing of new permit applications.

Sec. 3505.80 What happens when my permit expires?

Your permit will expire at the end of its initial or extended term,

as applicable, without notice. The lands will be available for new

applications 60 days after expiration, unless you timely file for an

extension, or you file an application for a preference right lease.

Sec. 3505.85 Can BLM cancel my prospecting permit for reasons other

than failure to pay rental?

Yes. BLM can cancel your permit if you fail to comply with the

Mineral Leasing Act, any of the other acts applicable to your specific

permit, these regulations, or any of the permit terms or stipulations.

BLM will provide you 30 days notice, within which you must correct your

default. If your default continues, BLM may cancel your permit. BLM's

waiver of one particular cause for cancellation will not prevent BLM

from canceling your permit for any other cause, or for the same cause

occurring at any other time. Unless you file an appeal, BLM will note

the cancellation of your permit on BLM's official status records, at

which time the lands covered by the permit will be available for filing

of new applications by any qualified applicant.

Subpart 3506--Exploration Licenses

Sec. 3506.10 What is an exploration license?

An exploration license allows you to explore known, unleased

mineral deposits to obtain geologic, environmental and other pertinent

data concerning such deposits.

Sec. 3506.11 What must I do to obtain an exploration license?

Apply by submitting an exploration plan as described in subpart

3505 of this part, along with your request for an exploration license.

No specific form is required. When BLM approves the exploration plan,

we will attach the approved plan to, and make it a part of, the

license. You must also publish a Notice of Exploration inviting others

to participate in exploration under the license on a pro-rata cost-

sharing basis.

Sec. 3506.12 Who prepares and publishes the notice?

BLM prepares the notice using your information and posts the notice

and your exploration plan in the BLM office for 30 days. You must

publish the Notice of Exploration once a week for three consecutive

weeks in at least one newspaper of general circulation in the area in

which the lands are located.

Sec. 3506.13 What information must I provide to BLM for inclusion in

my Notice of Exploration?

You must include:

(a) Your name and address;

(b) A description of the lands;

(c) The address of the Bureau office where your exploration plan

will be available for inspection; and

(d) An invitation to the public to participate in the exploration

under the license.

[[Page 54398]]

Sec. 3506.14 What happens after I publish the Notice of Exploration?

Any person who seeks to participate in the exploration program must

notify you and BLM in writing within 30 days after the final

publication and BLM posting.

Sec. 3506.15 Who resolves differences and approves the license and

participants?

BLM does, by issuing the license naming the participants and

acreage covered. BLM may also establish core hole spacing and resolve

any other issue necessary to minimize surface disturbance and

inconsistencies between proposed exploration plans.

Sec. 3506.20 After my license is issued, may I modify my exploration

plan?

Yes. BLM may approve modifications of your exploration plan upon

your request.

Sec. 3506.25 Once I have a license, what are my responsibilities?

You must provide to BLM all data obtained during exploration. BLM

will consider the data confidential and will not make the data public

until the earlier of the following occurs:

(a) The areas involved have been leased; or

(b) BLM determines that the data are not exempt from disclosure

under the Freedom of Information Act.

Subpart 3507--Preference Right Leases

Sec. 3507.11 What do I have to do to be entitled to a preference right

lease?

You must have a prospecting permit for the area you want to lease

and meet the following conditions:

(a) Phosphate, Gilsonite and hardrock minerals. You must

demonstrate that you have discovered a valuable deposit within the

period covered by your prospecting permit.

(b) Sodium, potassium, and sulphur. In addition to demonstrating

that you have discovered a valuable deposit, BLM must determine that

the lands are chiefly valuable for the subject minerals.

(c) Asphalt. You can get only a fringe acreage lease or a

competitive lease for asphalt, not a prospecting permit.

Sec. 3507.15 How do I apply for a preference right lease?

No specific form is required. You must submit three copies of your

application within 60 days after your prospecting permit expires.

Sec. 3507.16 What information must my application for a preference

right lease include?

Your application must contain:

(a) A statement of your qualifications and holdings as specified in

subpart 3503 of this part;

(b) Three maps showing utility systems, the location of any

proposed development or mining operations and facilities incidental

thereto, including the approximate locations and the extent of the

areas you will use for pits, overburden and tailings, and the location

of water sources or other resources which you may use in the proposed

operations or incidental facilities;

(c) A narrative statement addressing:

(1) The anticipated scope, method and schedule of development

operations, including the types of equipment to be used;

(2) The method of mining anticipated, including the best available

estimate of the mining sequence and production rate; and

(3) The relationship, if any, between the mining operations

anticipated on the lands applied for and existing or planned mining

operations, or facilities incidental thereto, on adjacent Federal or

non-Federal lands; and

(d) If your application is for less than the lands covered by your

prospecting permit, a complete and accurate description of the lands as

described and included in your prospecting permit.

Sec. 3507.20 Is there a fee or payment required with my application?

Yes. With your application, submit the first year's rent, according

to the provisions in 43 CFR 3504.15.

Sec. 3507.25 Under what circumstances will BLM reject my application?

BLM will reject your application for a preference right lease if:

(a) You did not discover a valuable deposit of mineral(s) covered

by the prospecting permit;

(b) You did not submit requested information in a timely manner;

(c) You did not otherwise comply with the requirements of this

subpart; or

(d) In the case of sodium, potassium and sulphur, BLM determines

that the lands are not chiefly valuable for the mineral commodity

specified in the permit.

Sec. 3507.26 What do I need to submit to demonstrate that I've found a

valuable deposit?

To prove you have found a valuable deposit, provide BLM the

information listed in 43 CFR 3593.1. You must have collected the data

during the life of the prospecting permit. BLM may request supplemental

data to determine the extent and character of the deposit, the

anticipated mining and processing methods and costs, the anticipated

location, kind and extent of necessary surface disturbance and measures

to be taken to reclaim that disturbance, and the profitability of

mineral development.

Sec. 3507.30 If I disagree with BLM's reasons for rejecting my

preference right lease, may I appeal?

Yes. If you believe that the facts in your application are

sufficient to show that you are entitled to a lease, you have a right

to a hearing before an Administrative Law Judge in the Office of

Hearings and Appeals, Department of Interior, under the procedures in

43 CFR parts 4 and 1840. At the hearing, you will have to show, by a

preponderance of the evidence, that you discovered a valuable deposit

of the mineral.

Subpart 3508--Competitive Leases

Sec. 3508.11 What lands are available for competitive leasing?

BLM issues a competitive lease on unleased lands where BLM knows

that a deposit of a valuable mineral deposit exists. In such areas, BLM

will issue you an exploration license, but not a prospecting permit.

You must compete with any other interested parties to get the lease.

(a) In general, BLM may offer competitive leases for lands where

prospecting or exploratory work is unnecessary to determine the

existence or workability of a valuable mineral deposit.

(b) Lands in and adjacent to Searles Lake, California, are

available for competitive potassium leases without regard to quality or

quantity of potassium deposits that may be present.

Sec. 3508.12 How do I get a competitive lease?

Notify BLM of areas in which you are interested. Additionally, BLM

may designate certain lands for competitive leasing. In both cases,

upon determining the lands are available for leasing, BLM publishes a

notice identifying the lands available, conditions under which bids

will be accepted, and the date and time bids will be opened. BLM awards

competitive leases only through sale to the qualified bidder who offers

the highest acceptable bonus bid.

Sec. 3508.14 How much time does BLM allow for a bid to be submitted?

Prior to offering a lease, BLM will publish a notice of lease sale

for at least three consecutive weeks in a newspaper of general

circulation in the area in which the lands are situated. BLM will also

post the notice of lease sale for 30 days in the public room of the BLM

[[Page 54399]]

office with jurisdiction over the lands being offered. The notice will

specify the date by which bids must be submitted.

Sec. 3508.15 What information will the notice of lease sale include?

The notice will include:

(a) The time and place of sale;

(b) The bidding method;

(c) A description of the tract being offered;

(d) A description of the mineral deposit being offered;

(e) The minimum bid BLM will consider; and

(f) Information on where a detailed statement of the terms and

conditions of the lease sale and of the proposed lease may be obtained.

Sec. 3508.16 What information will the detailed statement include?

The detailed statement will include:

(a) The proposed lease terms and conditions, including the rental,

royalty rates, bond amount, and special stipulations for the particular

tract;

(b) An explanation of how you may submit your bid;

(c) Notification that you must accompany your bid with a statement

of your qualifications (See subpart 3502 of this part) and a deposit of

one-fifth of your bid amount;

(d) Notification that, if you are the successful bidder, you must

pay, before BLM issues the lease, your proportionate share of the total

cost of the publication of the sale notice. Your share is based on the

number of tracts you bid on successfully, divided into the total number

of tracts offered for sale;

(e) A warning concerning 18 U.S.C. 1860 which prohibits unlawful

combination or intimidation of bidders;

(f) A statement that the Secretary reserves the right to reject any

and all bids, and the right to offer the lease to the next qualified

bidder if the successful bidder fails to obtain the lease for any

reason; and

(g) Any other information BLM deems appropriate.

Sec. 3508.20 How will BLM conduct the sale and handle bids?

BLM will open and announce all bids at the time and date specified

in the notice of lease sale, but will not accept or reject bids at that

time. BLM will not consider bids received after the time specified in

the notice of sale. You may withdraw or modify your bid prior to the

time specified in the notice of sale.

Sec. 3508.21 What happens if I am the successful bidder?

If you are the highest qualified bidder and your bid meets or

exceeds fair market value, as determined by BLM through appraisal or

other appropriate means, BLM will send you copies of the lease on the

form attached to the detailed statement. You must sign and return the

lease form, pay the balance of the bonus bid, pay the first year's

rental, pay the publication costs, and furnish the required lease bond,

within the time BLM specifies.

Sec. 3508.22 What happens if my bid is rejected?

(a) If your bid is the high bid and is rejected because you did not

sign the lease form and pay the balance of the bonus bid, or otherwise

comply with this subpart, you forfeit to the United States your deposit

of one-fifth of the bonus bid amount.

(b) If BLM determines that your high bid must be rejected for

reasons beyond your control, the deposit submitted with the bid will be

returned to you.

Subpart 3509--Fractional and Future Interest Leases

Sec. 3509.10 What are future interest leases?

BLM issues future interest leases to those holders of mineral

interests whose present interest will revert to the Federal government

at some future date. Future interest leases allow the present interest

holders to continue using their present mineral right once the Federal

government acquires it.

Sec. 3509.11 For what lands will BLM issue future interest leases?

BLM will issue noncompetitive leases for future interests in lands

on which there is an existing mining operation or in which the present

mineral interest holder has established the existence of a valuable

deposit, if BLM determines it is in the public interest.

Sec. 3509.12 What if I am a mining owner or operator, and I am

applying for a future interest lease as part of my existing operation?

You must meet the qualifications set forth in subpart 3502 of this

part, and you must pay fair market value for the mineral deposit when

title vests in the United States. BLM will not issue you a lease until

you meet those requirements.

Sec. 3509.15 Who may apply for a future interest lease?

Only the person who has a present interest in the minerals may

apply for a future interest lease. BLM may issue future interest leases

to applicants who own all or substantially all of the present mineral

interest (over 50%), regardless of whether that person owns as fee

owner, lessee, or holder of operating rights.

Sec. 3509.16 How do I apply for a future interest lease?

No specific form is required. Include a $25 filing fee with

application. Submit the application to the BLM office with jurisdiction

over the lands. You must file no less than 1 year before the mineral

interests vest with the United States.

Sec. 3509.17 What information must I include in my application for a

future interest lease?

Your application must include a description of the land and the

same information BLM requires when you apply for a present interest

Federal lease, including your certification that you meet the

qualifications requirements (see subpart 3502 of this part). You also

need to include evidence of your title and of the extent of your rights

to the present interest in the mineral deposits either by submitting a

certified abstract of title or a title certificate. You must submit the

names of the other owners of the mineral interests. If you are owner of

the operating rights to the mineral by means of a contract with the

owner, you need to submit three copies of the mineral contract or lease

also.

Sec. 3509.20 When does my future interest lease take effect?

Unlike other permits or leases, your future interest lease will be

effective on the date the minerals vest in the United States, as stated

in the lease.

Sec. 3509.25 Under what conditions would BLM reject my application for

a future interest lease?

BLM will reject your future interest application if you do not meet

the qualifications in Sec. 3509.15, or for any of the following

reasons:

(a) You filed your application less than one year before the

minerals vest in the United States. If, at the time the minerals vest

in the United States, BLM has on file an application for a future

interest lease that was filed less than one year earlier, BLM will

reject the application. After the mineral right vests in the United

States, BLM will accept only applications for present interest leases

or permits.

(b) If you as the lessee would have a total interest of less than

50% once the future interest lease becomes effective, BLM may reject

the application unless we determine it would be in the best interests

of the government to issue the lease.

Sec. 3509.30 May I withdraw my application for a future interest

lease?

Yes. You can withdraw your application as long as you file the

[[Page 54400]]

withdrawal before the lease is signed. BLM will retain the application

fee.

Subpart 3510--Lease Terms and Conditions

Sec. 3510.15 How long will my lease be in effect?

Your lease will be issued for the term specified in the table.

--------------------------------------------------------------------------------------------------------------------------------------------------------

Lease term Phosphate Sodium Potassium Sulphur/hardrock Gilsonite

--------------------------------------------------------------------------------------------------------------------------------------------------------

(a) Initial lease term (years)..... Indeterminate......... 10.................... Indeterminate........ 20................... 20 years, and as long

thereafter as

Gilsonite is

produced in paying

quantities.

(b) Periods of renewal or Readjustment at the Renewal for 10 year Readjustment at the Renewal for 10 year Readjustment at the

readjustment. end of each 20 year term at end of end of each 20 year term at end of end of each 20 year

period. initial term and each period. initial term and period.

10 year period. each 10 year period.

--------------------------------------------------------------------------------------------------------------------------------------------------------

Sec. 3510.20 Do certain leases allow me to mine other commodities as

well?

Yes. Sodium leases may authorize the mining of potassium compounds

as related products, and potassium leases may authorize the mining of

sodium compounds as related products. A phosphate lease allows you to

use deposits of silica, limestone or other rock on the lease in the

processing or refining of phosphate, phosphate rock, and associated

minerals mined from the leased lands. You must pay royalty for the use

of these materials as specified in your lease.

Sec. 3510.21 If I am mining calcium chloride, can I obtain a

noncompetitive mineral lease to produce the commingled sodium chloride?

If you are producing calcium chloride in paying quantities from an

existing mine which you control, you may apply to BLM for a fringe acre

lease to produce the commingled sodium chloride. You must already have

authorization, under 43 CFR part 3800, for the locatable minerals. You

must also meet the other requirements of this part for the commingled

leaseable minerals.

Sec. 3510.25 What is meant by lease readjustment and lease renewal?

(a) If your lease is issued subject to readjustment, BLM will

notify you of the readjusted terms at the end of each 20-year period.

If BLM does not notify you of readjusted terms, those leases continue

for another 20-year period under the same terms and conditions.

(b) If you have a lease that requires renewal, BLM will issue the

lease for an initial term as specified in the table in Sec. 3510.15.

You must apply for a renewal of the lease at least 90 days prior to the

end of its initial term in order to extend the lease for an additional

term. If you fail to renew these leases, they expire and the lands

become available for re-leasing by BLM.

Sec. 3510.26 What if I object to the terms and conditions BLM proposes

for a readjusted lease?

(a) You will be given 60 days after receiving the proposed

readjusted terms to file any objection. If BLM does not receive an

objection the proposed readjusted terms will be in effect. If you file

an objection, BLM will issue a decision responding to your objection.

If you consider the decision to be adverse to your interests, you will

have the right of appeal under 43 CFR parts 4 or 1840.

(b) Except as provided in the following section, the readjusted

lease terms and conditions will be effective pending the outcome of any

appeal provided for in paragraph (a) of this section unless BLM

provides otherwise.

Sec. 3510.27 How will a lease renewal affect my priority as lessee?

BLM bases your priority as a permittee or lessee, as related to

other permittees or lessees on the same lands, on the date we issued

your initial permit or lease. This applies regardless of the date of

any readjustments, extensions, or renewals.

Sec. 3510.30 If I appeal BLM's proposed new terms, do I have to

continue paying royalties or rentals while my appeal is being

considered?

You must continue to pay royalties or rentals at the original rate.

Your obligation to pay any increased readjusted royalties, minimum

royalties and rentals will be suspended while your objection or appeal

is considered. However, any increased charges accrue beginning with the

effective date of the readjustment, while final action on your appeal

is pending. If the increased charges are sustained by a decision on the

objection or on appeal, you must pay the accrued balance, plus interest

at the rate specified for late payment by the MMS (See 43 CFR part

3590).

Sec. 3510.50 How do I renew my lease?

To renew leases, you must file an application at least 90 days

prior to the expiration of the lease term. No specific form is

required. You must file three copies of your application with BLM

together with a nonrefundable $25 filing fee and an advance rental

payment of $1 per acre or fraction of an acre.

Subpart 3511--Assignments and Subleases

Sec. 3511.11 Once I am issued a permit or lease, can I assign or

sublease it?

You may assign or sublease your permit or lease in whole or in part

to any person, association, or corporation qualified to hold a permit

or lease.

Sec. 3511.12 Is there a fee for requesting an assignment or sublease?

Yes. When you submit your instrument for assignment of record title

or operating rights, or for overriding royalty assignment, you must pay

a nonrefundable filing fee of $25. BLM will not accept any instrument

not accompanied by the filing fee.

Sec. 3511.13 What do I submit to get BLM approval for an assignment of

record title?

Within 90 days of final execution of the assignment, you must

submit three copies of your instrument for assignment of each permit or

lease. The instrument must contain:

(a) The name and current address of the assignee;

(b) The interest held by you and the interest you plan to assign;

(c) The serial number of the affected permit or lease;

(d) The percentage of overriding royalties retained;

[[Page 54401]]

(e) The date and your original signature on each copy, as the

assignor; and

(f) The assignee must also send BLM a request for approval of the

assignment which must contain:

(1) A statement of the assignee's qualifications and holdings, as

required by subpart 3502 of this part;

(2) Date and signature of the assignee; and

(3) A $25 filing fee.

Sec. 3511.16 How do I assign or transfer a sublease or operating

rights to my lease or permit?

You must file one copy of the sublease or agreement to assign

operating rights between you and the operator within 90 days from the

date of final execution of these agreements. The assignee must also

file a signed and dated request for approval accompanied by a statement

of qualifications and holdings and a $25 fee. BLM will notify you with

a formal decision indicating approval or disapproval.

Sec. 3511.18 Do I have to notify BLM if I intend to transfer an

overriding royalty to another party?

Yes. Although BLM does not approve these transfers, you must file

all overriding royalty interest assignments with the BLM within 90 days

from the date of execution. Your filing must be accompanied by the

assignee's statement of qualifications as provided for in subpart 3503

of this part and the $25 filing fee.

Sec. 3511.20 Will BLM approve my assignment or sublease if I have

outstanding liabilities?

No. Before BLM will approve your assignment of a lease or permit,

your account must be in good standing or the assignee and his or her

surety must provide written acceptance of your outstanding liabilities

under the permit or lease. In addition, the assignee must either

furnish a new bond equivalent to your existing bond or obtain consent

of the surety on your bond to substitute the assignee as the principal.

Sec. 3511.25 If I assign my permit or lease, when do my obligations

under the permit or lease end?

You and your surety remain responsible for the performance of all

obligations under the permit or lease until BLM approves the

assignment. Even then, you will continue to be responsible for

obligations that accrued prior to BLM's approval of the assignment,

whether or not they were identified at the time of the transfer.

Sec. 3511.30 What are the responsibilities of a sublessor and a

sublessee?

After BLM's approval of a sublease becomes effective, the sublessor

and sublessee become jointly and severally liable for performance of

all obligations under the permit or lease.

Sec. 3511.33 Does an assignment or sublease alter the permit or lease

terms?

No. An assignment or sublease will not extend the life of the

permit or the readjustment or renewal periods of the lease, or alter

other terms or conditions of the permit or lease.

Subpart 3512--Waiver, Suspension, or Reduction of Rental and

Minimum Royalties

Sec. 3512.11 Can I be relieved of the lease requirements of rental,

minimum royalty, or production royalty?

Yes. BLM has a process which may allow you temporary relief from

the lease requirements of rental, minimum royalty, or production

royalty.

Sec. 3512.12 What criteria does BLM consider in approving a waiver,

suspension, or reduction in rental or minimum royalty, or a reduction

in the royalty rate?

BLM may approve an application for a waiver, suspension, or

reduction in rental or minimum royalty, or a reduction in the royalty

rate, if approval:

(a) Is in the interest of conservation;

(b) Will encourage the greatest ultimate recovery of the resource;

and

(c) Is necessary to promote development of the mineral resources or

the lease cannot be successfully operated under existing terms.

Sec. 12.15 How do I apply for relief?

You must file two copies of an application with BLM which contain

the following information for all leases in the application:

(a) The serial numbers;

(b) The name of the record title holder(s);

(c) The name of the operator if different from the record title

holder(s);

(d) A description of the lands by legal subdivision;

(e) A map showing the serial number and location of each mine or

excavation and the extent of the mining operations;

(f) A tabulated statement of the minerals mined and subject to

royalty for each month covering a period of not less than 12 months

immediately preceding the date of filing of your application, and the

average production mined per day for each month;

(g) If you are applying for relief from the minimum production

requirement, complete information as to why you did not attain the

minimum production;

(h) A detailed statement of expenses and costs of operating the

entire lease, and the income from the sale of any leased products;

(i) All facts showing why you cannot successfully operate the mines

under the royalty or rental fixed in the lease and other lease terms;

(j) For reductions in royalty, full information as to whether you

pay royalties or payments out of production to anyone other than the

United States, the amounts so paid and efforts made to reduce them;

(k) Agreements of the leaseholder(s) and the non-Federal royalty

holders to a permanent reduction which ensures that the non-Federal

royalty interests do not exceed one-half the proposed reduced royalties

paid to the United States; and

(l) Any other information needed by BLM to ascertain whether the

request satisfies the standards in Sec. 3512.12.

Sec. 3512.20 What is a suspension of operations and production?

A suspension of operations and production is an action by which BLM

orders or allows you to cease operations in the interest of

conservation.

Sec. 3512.21 What is the effect of a suspension of operations and

production?

BLM will extend the term of your lease by any periods of suspension

of operations and production. BLM will reduce the minimum annual

production requirements of your lease proportionately for that portion

of a lease year in which a suspension of operations and production is

effective. You do not have to pay rental and minimum annual production

royalties beginning the first day of the lease month if the suspension

becomes effective that day or beginning the first day of the following

lease month if the suspension becomes effective on any day other than

the first day of the lease month.

Sec. 3512.22 How do I apply for a suspension of operations and

production?

You must submit two copies of an application to BLM that explains

why it is in the interest of conservation to suspend your operations

and production.

Sec. 3512.25 When will my suspension of operations and production take

effect?

Your suspension takes effect on the date specified by BLM.

Sec. 3512.26 When and how does my suspension of operations and

production expire or terminate?

Your suspension will end on the first day of the lease month in

which you

[[Page 54402]]

resume operations or production, or upon expiration of the suspension,

whichever occurs first. All lease terms and obligations resume on this

date. If you have paid rentals in advance, BLM will allow credit on the

next rental or royalty due under the lease.

Sec. 3512.30 What is a suspension of operations?

A suspension of operations is an action by which BLM may, upon your

application, suspend operations on your lease when marketing conditions

are such that your leases cannot be operated except at a loss.

Sec. 3512.31 What is the effect of a suspension of operations?

A suspension of operations does not affect the term of the lease or

the annual rental payment. BLM will reduce the minimum annual

production requirements of your lease proportionate to that portion of

the lease year for which a suspension of operations is effective. You

do not have to pay minimum annual production beginning the first day of

the lease month if the suspension becomes effective that day or

beginning the first day of the following lease month if the suspension

becomes effective on any day other than the first day of the lease

month.

Sec. 3512.32 How do I apply for a suspension of operations?

You must submit an application in duplicate to BLM which contains

sufficient information to establish that your lease cannot be operated

except at a loss.

Sec. 3512.33 When will my suspension of operations take effect?

Your suspension will be effective on the date specified by the BLM.

Sec. 3512.34 When and how does my suspension of operations expire or

terminate?

The suspension of minimum annual production ends on the first day

of the lease month in which you resume operations, or upon expiration

of the suspension, whichever occurs first. Your obligation for minimum

annual production resumes at this time.

Subpart 3513--Lease Relinquishments, Terminations, and

Cancellations

Sec. 3513.11 Can I relinquish my lease or any part of my lease?

If you can show that the public interest will not be impaired, you

may relinquish your entire lease or any legal subdivision included in

your lease upon BLM's approval. Notify BLM in writing that you intend

to relinquish all or part of your lease. Include your signature and

date. If you relinquish your lease, you will be subject to a continued

obligation to make payment of all accrued rentals and royalties and to

provide for the preservation of any mines or productive works or

permanent improvements on the leased lands in accordance with the

regulations and terms of your lease.

Sec. 3513.12 What should I include in a request for partial

relinquishment?

Any partial relinquishment must clearly describe the lands you are

relinquishing and give the exact area involved.

Sec. 3513.15 Where do I file my relinquishment?

File the relinquishment in the BLM office that issued the lease.

Sec. 3513.20 When is my relinquishment effective?

When BLM accepts your relinquishment, it will be effective as of

the date you filed it.

Sec. 3513.25 When does my lease expire?

(a) Sodium, sulphur, asphalt, and hardrock mineral leases expire at

the end of the lease term, unless you file a timely application for

lease renewal, or at the time your application for renewal is rejected.

(b) Potassium, phosphate and gilsonite leases continue for so long

as you comply with the lease terms and conditions which are subject to

periodic readjustment.

Sec. 3513.30 Can my lease be canceled?

Yes. BLM may institute appropriate proceedings in a court of

competent jurisdiction to forfeit and cancel your lease if:

(a) You fail to comply with the provisions of the Act, or of

regulations in effect when your lease is issued or readjusted; or

(b) You default in the performance or observance of any of the

terms, covenants, and stipulations of the lease and continue to fail or

default for 30 days after BLM notifies you in writing of your default.

Sec. 3513.31 Can BLM waive cancellation or forfeiture?

Yes, but BLM's waiver of any particular cause of forfeiture will

not prevent BLM from canceling and forfeiting the lease for any other

cause or for the same cause occurring at any other time.

Sec. 3513.32 Will BLM give me an opportunity to remedy a violation of

the lease terms?

Yes. If you own or control, directly or indirectly, any interest in

any lease in violation of any of the provisions of the Act, BLM will

give you 30 days to remedy the violation or to show cause why the

Attorney General should not be requested to institute proceedings in a

court of competent jurisdiction to:

(a) Cancel the lease;

(b) Forfeit the interest so owned;

(c) Compel disposal of the interest so owned or controlled; or

(d) If a lease is issued improperly, and requires amending, it will

be subject to administrative cancellation and BLM will issue an amended

lease.

Sec. 3513.50 What happens to a bona fide purchaser if the lease

assigned to him or her is subject to cancellation?

(a) If you are a qualified bona fide purchaser, BLM will not cancel

your lease or your interest in a lease even if we had decided to cancel

your predecessor's lease. However, as purchaser, you are responsible

for ensuring that the lease is in compliance with the terms and

conditions required by BLM.

(b) BLM will promptly take action to dismiss any party who shows it

is a bona fide purchaser from any legal proceedings to cancel the

lease.

Subpart 3514--Noncompetitive Leasing--Fringe Acreage Leases and

Lease Modifications

Sec. 3514.11 If I already have a Federal lease, or the mineral rights

on adjacent private lands, may I lease adjoining Federal land that

contains the same deposits without competitive bidding?

Yes. If the adjoining Federal lands are available for leasing, you

can lease them noncompetitively, even if they are known to contain a

deposit of the mineral you are leasing. BLM will either issue a new

lease for these lands (fringe acreage) or add the lands to your

existing Federal lease (modification).

Sec. 3514.12 What do I need to do to obtain a lease modification or

fringe acreage lease?

(a) You must file three copies of your application with the BLM

office with jurisdiction over the lands. No specific application form

is required.

(b) Your application must be accompanied by a nonrefundable filing

fee of $25, and an advance rental payment in accordance with the rental

rate for the mineral commodity you are seeking. If you are seeking to

modify an existing lease, BLM will base the rental payment on the rate

in effect for the lease being modified.

[[Page 54403]]

(c) Your application must:

(1) Reference the serial number of the lease if the lands adjoin an

existing Federal lease;

(2) Contain a complete and accurate description of the lands

desired;

(3) Show that the mineral deposit specified in your application

extends from your adjoining lease or from private lands owned or

controlled by you; and

(4) Include proof that you own or control the mineral deposit in

the adjoining lands if they are not under a Federal lease.

Sec. 3514.15 What does BLM do with my application?

BLM can issue or modify a lease under this subpart only if we

determine that:

(a) The lands are contiguous to your existing Federal lease or to

non-federal lands owned or controlled by you;

(b) The new lease is not in excess of maximum size allowed in a

lease, as specified in Sec. 3503.37;

(c) The acreage of the modified lease, including additional lands,

is not in excess of the maximum size allowed for a lease, as specified

in Sec. 3503.37;

(d) The mineral deposit is not in an area of competitive interest;

(e) The lands applied for lack sufficient reserves of the mineral

resource to warrant independent development; and

(f) Leasing the lands will conserve natural resources and will

provide for economical and efficient recovery as part of a mining unit.

Sec. 3514.20 Are there any fees required to modify my existing lease

or obtain a fringe acreage lease?

Before BLM issues a new fringe acreage lease or modifies your

existing lease, you must pay a bonus bid in an amount determined by BLM

based on an appraisal or other appropriate means, but not less than $1

per acre or fraction of an acre.

Sec. 3514.21 What terms and conditions apply to fringe acreage leases

and lease modifications?

Your fringe acreage lease is a new lease. Therefore, BLM may impose

terms and conditions different from those in your original non-Federal

lease, if any. BLM will issue a modified lease subject to the same

terms and conditions as in the original lease.

Subpart 3515--Mineral Lease Exchange

Sec. 3515.10 May I exchange my lease or lease right for another

mineral lease or lease right?

Yes. If BLM concludes that operations on your preference right or

outstanding lease are not in the public interest, or that operations on

the lands to be leased in exchange would be in the public interest, you

may relinquish your current lease or preference right in exchange for a

mineral lease of other lands of equal value for any leasable or

hardrock mineral covered by this part.

Sec. 3515.12 What regulatory provisions apply if I want to exchange a

lease or lease right?

(a) Except as provided in paragraph (b) of this section, this

subpart and the relevant provisions of 43 CFR part 2200 apply to

exchanges.

(b) Exchanges involving the issuance of coal leases, coal lease

bidding rights or coal lease modifications are subject to the

regulations in 43 CFR part 3400, subpart 3435 rather than to the

regulations in this part.

Sec. 3515.15 Under what circumstances will BLM consider initiating an

exchange?

(a) BLM will notify you that we are prepared to consider exchange

of a mineral lease if you relinquish your existing leasing rights.

(b) BLM may seek to exchange any part or all of the lands under

your preference right lease application(s) or lease(s).

(c) BLM must find that the exchange is in the public interest under

both of the following criteria:

(1) The benefits of production from your existing lease or

preference right lease would not outweigh the adverse effects, or

threat of damage or destruction to agricultural production potential,

or scenic, biological, geologic, historic, or other public interest

values such as recreational use; archeological or historic values;

threatened or endangered species; proximity of residential or urban

areas; study for potential inclusion in the wilderness or wild and

scenic rivers systems; and value for public uses, including public

highways, airports, and rights-of-way from lease operations; and

(2) The lands proposed for exchange are free from hazardous waste

as defined under the authorities of the Clean Water Act (33 U.S.C.

1251), Resource Conservation and Recovery Act (42 U.S.C. 6901) and the

Comprehensive Environmental Response, Compensation and Liability Act

(42 U.S.C. 9601).

Sec. 3515.18 Will I be notified that BLM is considering an exchange?

Yes. The notice you receive will:

(a) State why BLM believes an exchange would be in the public

interest;

(b) Ask whether you are willing to negotiate for an exchange;

(c) Contain a description of the lands for which BLM would offer

exchange terms; and

(d) Allow you to describe the lands on which you would accept an

exchange lease.

Sec. 3515.20 Can preference right lease rights be exchanged?

Yes. In order to have a right that can be exchanged you must have

timely submitted a preference right lease application. If you have

demonstrated a right to a lease, BLM may, in lieu of issuing the

preference right lease, negotiate for the selection of appropriate land

to exchange and establish lease terms for those lands.

Sec. 3515.21 What types of lands can be exchanged?

The lands to be leased in exchange for your existing rights must

be:

(a) Subject to leasing under the authorities of this part; and

(b) Acceptable to both you and BLM as a lease tract containing a

deposit of leasable or hardrock minerals of equal value to your

existing rights.

Sec. 3515.22 What if the lands to be exchanged are not of equal

value?

If the lands are not equal in value the grantor or the Secretary,

as circumstances require, may equalize the value by making a monetary

payment to the party receiving the property of lesser value. Such

payments cannot exceed 25 percent of the total value of the land or

interest transferred out of Federal ownership. The parties may mutually

agree to waive the monetary payment, if the Secretary determines that:

(a) A waiver will expedite the exchange;

(b) The public interest will be better served by the waiver than by

the payment; and

(c) The amount to be waived is no more than 3 percent of the value

of the lands being transferred out of Federal ownership, or $15,000,

whichever is less.

Sec. 3515.23 Might I be required to submit additional information?

You must be willing to provide geologic and economic data to enable

BLM to determine the fair market value of your preference right or

lease to be relinquished.

[[Page 54404]]

Sec. 3515.25 If I agree on the lands to be leased in exchange, what

happens next?

After you and BLM agree on the lands to be leased in exchange, BLM

will publish a notice of the proposed exchange in the Federal Register

and in a newspaper(s) in the county(s) where both the preference right

or lease lands and the proposed exchange lease lands are located. The

notice will include:

(a) The time and place of a public hearing(s);

(b) BLM's preliminary findings that the exchange is in the public

interest; and

(c) A request for public comments on the merits of the proposed

exchange.

Sec. 3515.26 When will BLM make a decision on the exchange?

After the public hearing BLM will prepare a written decision that

issuance of the exchange lease is in the public interest. BLM will then

process the exchange lease.

Sec. 3515.27 Will BLM attach any special provisions to the exchange

lease?

The terms will contain:

(a) A statement that you quitclaim and relinquish any right or

interest in your preference right lease application or lease exchanged;

and

(b) A statement setting forth BLM's finding that the lease issuance

is in the public interest.

Subpart 3516--Use Permits

Sec. 3516.10 What are use permits?

Use permits allow you to use the surface of lands not included

within your lease for purposes associated with the proper development

of your mineral deposits. Use permits are not prospecting permits.

Sec. 3516.11 What commodities allow use permits?

Use permits are issued only in support of phosphate and sodium

leases. For phosphate leases, BLM may issue you a permit to use up to

80 acres on unappropriated and unentered lands. For sodium leases BLM

may issue you a permit to use up to 40 acres.

Sec. 3516.12 What activities can I conduct under a use permit?

Phosphate use permits authorize you to conduct activities to

properly extract, treat, or remove the mineral deposits. Sodium use

permits authorize you to occupy camp sites, develop refining works and

to use the surface for other purposes connected with and necessary to

the proper development and use of the deposits. BLM cannot grant use

permits on National Forest System lands.

Sec. 3516.15 How do I apply for use permits?

You must file three copies of your application in the BLM office

administering the lands you are interested in. There is no specific

form required. Include a nonrefundable $25 filing fee and the first

year's rental. Calculate the rental in accordance with Sec. 3504.15.

Sec. 3516.16 What must I include with my application?

Provide specific reasons why you need the additional lands,

describe the lands applied for, provide any information demonstrating

that the lands are suitable and appropriate for your needs, and provide

evidence that the lands are unoccupied and unappropriated. Your

application must also contain an agreement to pay the annual charge

identified in the permit.

Sec. 3516.20 Is there an annual fee or charge for use of the lands?

Yes. You must pay the annual $1 per acre rental, or $20, whichever

is greater, on or before the anniversary date of the permit.

Sec. 3516.30 What happens if I fail to pay the annual rental on my use

permit?

Your use permit will terminate automatically if you fail to pay the

required rental within 30 days after BLM serves you a written notice of

the rental requirement.

Subpart 3517--Special Provisions Applying to Hardrock Minerals

Sec. 3517.10 What are development contracts and processing and milling

arrangements?

Development contracts and processing and milling arrangements

involving hardrock minerals are agreements between one or more hardrock

mineral lessees and one or more other entities to justify large scale

operations for the discovery, development, production, or

transportation of ores.

Sec. 3517.11 Are leases and permits covered by approved agreements

exempt from the acreage limitations?

Yes. Hardrock mineral leases and permits committed to development

contracts or processing or milling arrangements approved by BLM are

exempt from acreage limitations.

Sec. 3517.15 How do I apply for one of these agreements?

No specific form is required. Submit three copies of your

application to the BLM office with jurisdiction over some or all of the

lands in which you are interested. Include the following information:

(a) Copies of the contract or other agreement affecting the Federal

hardrock mineral leases or permits, or both;

(b) A statement showing the nature and reason for your request;

(c) A statement showing all the interests held in the area of the

agreement by the designated contractor; and

(d) The proposed or agreed upon plan of operation for development

of the leased lands.

Sec. 3517.16 How does BLM process my application?

(a) BLM considers whether the agreement will conserve natural

resources and is in the public interest.

(b) Once the agreement is signed by all the parties, BLM will

approve it.

Sec. 3517.50 Can I collect mineral specimens for non-commercial

purposes?

You may collect mineral specimens for hobby, recreation,

scientific, research or similar purposes. You do not need a prospecting

permit from BLM for these activities. However, the surface management

agency, including BLM, may require a use permit. That agency will issue

the permit, subject to any fees, terms and conditions that the agency

may impose.

[FR Doc. 96-26398 Filed 10-17-96; 8:45 am]

BILLING CODE 4310-94-P