Cooperation with individuals, municipalities, etc.; contracts with owners; agreements as to prices

The Secretary of the Interior and the Secretary of Commerce jointly are hereby authorized, within their discretion, to cooperate under formal agreement with individuals, associations, corporations, States, and municipalities, educational institutions, or other bodies, for the purposes of this section: Provided , That before undertaking drilling operations upon any tract or tracts of land, the mineral deposits of which are not the property of the United States, the Secretary of the Interior and the Secretary of Commerce jointly shall enter into a contract or contracts with the owners or lessees, or both, of the mineral rights therein, and the aforesaid contract or contracts shall provide, among other things, that, if deposits of potash minerals or oil shall be discovered in pursuance of operations under said contract or contracts and if and when said mineral deposits shall be mined and sold, the owners or lessees, or both, of said mineral rights shall pay to the Government and its cooperators a royalty of not less than 2½ per centum of the sale value of any potash minerals and oil therefrom, said payments to continue until such time as the total amount derived from said royalty is equal to not more than the cost of the exploration, as may be determined by the Secretary of the Interior and the Secretary of Commerce jointly: Provided further , That all Federal claims for reimbursement under this section shall automatically expire twenty years from the date of approval of the contracts entered into, in accordance with the provisions thereof, unless sooner terminated by agreement between the owners or lessees of the potash mineral rights and oil and the Secretary of the Interior and the Secretary of Commerce jointly: Provided further , That said contract or contracts shall not restrict the Secretary of the Interior and the Secretary of Commerce jointly in the choice of drilling locations within the property or in the conduct of the exploratory operations, so long as such selection or conduct do not interfere unreasonably with the surface of the land or with the improvements thereof, and said contract or contracts shall provide that the United States shall not be liable for damages on account of such reasonable use of the surface as may be necessary in the proper conduct of the work.

( June 25, 1926, ch. 674, § 2 , 44 Stat. 768 ; Mar. 3, 1927, ch. 356 , 44 Stat. 1388 .)