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Section 1353. Federal purchase and disposition of oil and gas

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Laws: Cases and Codes : U.S. Code : Title 43 : Section 1353
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Title 43

United States Code
{ TITLE 43 - PUBLIC LANDS
„ CHAPTER 29 - SUBMERGED LANDS
„ SUBCHAPTER III - OUTER CONTINENTAL SHELF LANDS
U.S. Code as of: 01/22/02

Section 1353. Federal purchase and disposition of oil and gas
(a) Payment of royalties or net profit shares in oil and gas;
purchase of oil and gas by United States; transfer of title to
Federal agencies
(1) Except as may be necessary to comply with the provisions of
sections 1335 and 1336 of this title, all royalties or net profit
shares, or both, accruing to the United States under any oil and
gas lease issued or maintained in accordance with this subchapter,
shall, on demand of the Secretary, be paid in oil or gas.
(2) The United States shall have the right to purchase not to
exceed 16 2/3 per centum by volume of the oil and gas produced
pursuant to a lease issued or maintained in accordance with this
subchapter, at the regulated price, or, if no regulated price
applies, at the fair market value at the well head of the oil and
gas saved, removed, or sold, except that any oil or gas obtained by
the United States as royalty or net profit share shall be credited
against the amount that may be purchased under this subsection.
(3) Title to any royalty, net profit share, or purchased oil or
gas may be transferred, upon request, by the Secretary to the
Secretary of Defense, to the Administrator of the General Services
Administration, or to the Secretary of Energy, for disposal within
the Federal Government.
(b) Sale of oil by United States to public; disposition of oil to
small refiners; application of other laws
(1) The Secretary, except as provided in this subsection, may
offer to the public and sell by competitive bidding for not more
than its regulated price, or, if no regulated price applies, not
less than its fair market value, any part of the oil (A) obtained
by the United States pursuant to any lease as royalty or net profit
share, or (B) purchased by the United States pursuant to subsection
(a)(2) of this section.
(2) Whenever, after consultation with the Secretary of Energy,
the Secretary determines that small refiners do not have access to
adequate supplies of oil at equitable prices, the Secretary may
dispose of any oil which is taken as a royalty or net profit share
accruing or reserved to the United States pursuant to any lease
issued or maintained under this subchapter, or purchased by the
United States pursuant to subsection (a)(2) of this section, by
conducting a lottery for the sale of such oil, or may equitably
allocate such oil among the competitors for the purchase of such
oil, at the regulated price, or if no regulated price applies, at
its fair market value. The Secretary shall limit participation in
any allocation or lottery sale to assure such access and shall
publish notice of such allocation or sale, and the terms thereof,
at least thirty days in advance. Such notice shall include
qualifications for participation, the amount of oil to be sold, and
any limitation in the amount of oil which any participant may be
entitled to purchase.
(3) The Secretary may only sell or otherwise dispose of oil

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Section 1353. Federal purchase and disposition of oil and gas

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described in paragraph (1) of this subsection in accordance with
any provision of law, or regulations issued in accordance with such
provisions, which provide for the Secretary of Energy to allocate,
transfer, exchange, or sell oil in amounts or at prices determined
by such provision of law or regulations.
(c) Sale of gas by United States to public
(1) Except as provided in paragraph (2) of this subsection, the
Secretary, pursuant to such terms as he determines, many (FOOTNOTE
1) offer to the public and sell by competitive bidding for not more
than its regulated price, or, if no regulated price applies, not
less than its fair market value any part of the gas (A) obtained by
the United States pursuant to a lease as royalty or net profit
share, or (B) purchased by the United States pursuant to subsection
(a)(2) of this section.
(FOOTNOTE 1) So in original. Probably should be ''may''.
(2) Whenever, after consultation with and advice from the
Secretary of Energy, the Federal Energy Regulatory Commission
determines that an emergency shortage of natural gas is threatening
to cause severe economic or social dislocation in any region of the
United States and that such region can be serviced in a practical,
feasible, and efficient manner by royalty, net profit share, or
purchased gas obtained pursuant to the provisions of this section,
the Secretary of the Interior may allocate or conduct a lottery for
the sale of such gas, and shall limit participation in any
allocation or lottery sale of such gas to any person servicing such
region, but he shall not sell any such gas for more than its
regulated price, or, if no regulated price applies, less than its
fair market value. Prior to selling or allocating any gas pursuant
to this subsection, the Secretary shall consult with the Federal
Energy Regulatory Commission.
(d) Purchase by lessee of Federal oil or gas for which no bids
received
The lessee shall take any Federal oil or gas for which no
acceptable bids are received, as determined by the Secretary, and
which is not transferred pursuant to subsection (a)(3) of this
section, and shall pay to the United States a cash amount equal to
the regulated price, or, if no regulated price applies, the fair
market value of the oil or gas so obtained.
(e) Definitions
As used in this section (1) the term ''regulated price'' means the highest price (A) at which oil many (FOOTNOTE 2) be sold pursuant to the
Emergency Petroleum Allocation Act of 1973 (FOOTNOTE 3) (15
U.S.C. 751 et seq.) and any rule or order issued under such
Act;
(FOOTNOTE 2) So in original. Probably should be ''may''.
(FOOTNOTE 3) See References in Text note below.
(B) at which natural gas may be sold to natural-gas companies
pursuant to the Natural Gas Act (15 U.S.C. 717 et seq.), any
other Act, regulations governing natural gas pricing, or any
rule or order issued under any such Act or any such
regulations; or
(C) at which either Federal oil or gas may be sold under any
other provision of law or rule or order thereunder which sets a
price (or manner for determining a price) for oil or gas; and
(2) the term ''small refiner'' has the meaning given such term
by Small Business Administration Standards 128.3-8(d) and (g), as
in effect on September 18, 1978, or as there-after revised or
amended.
(f) Purchase of oil and gas in time of war
Nothing in this section shall prohibit the right of the United
States to purchase any oil or gas produced on the outer Continental
Shelf as provided by section 1341(b) of this title.

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OUTER CONTINENTAL SHELF LANDS ACT
THE ACT

OF

AUGUST 7, 1953, CHAPTER 345,

AS

AMENDED

[As Amended Through P.L. 106–580, Dec. 29, 2000]
AN ACT To provide for the jurisdiction of the United States over the submerged
lands of the outer Continental Shelf, and to authorize the Secretary of the Interior
to lease such lands for certain purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That this Act may
be cited as the ‘‘Outer Continental Shelf Lands Act’’.
[43 U.S.C. 1301 note]

SEC. 2. DEFINITIONS.—When used in this Act—
(a) The term ‘‘outer Continental Shelf’’ means all submerged
lands lying seaward and outside of the area of lands beneath navigable waters as defined in section 2 of the Submerged Lands Act
(Public Law 31, Eighty-third Congress, first session), and of which
the subsoil and seabed appertain to the United States and are subject to its jurisdiction and control;
(b) The term ‘‘Secretary’’ means the Secretary of the Interior,
except that with respect to functions under this Act transferred to,
or vested in, the Secretary of Energy or the Federal Energy Regulatory Commission by or pursuant to the Department of Energy Organization Act (42 U.S.C. 7101 et seq.), the term ‘‘Secretary’’ means
the Secretary of Energy, or the Federal Energy Regulatory Commission, as the case may be;
(c) The term ‘‘lease’’ means any form of authorization which is
issued under section 8 or maintained under section 6 of this Act
and which authorizes exploration for, and development and production of, minerals;
(d) The term ‘‘person’’ includes, in addition to a natural person,
an association, a State, a political subdivision of a State, or a private, public, or municipal corporation;
(e) The term ‘‘coastal zone’’ means the coastal waters (including the lands therein and thereunder) and the adjacent shorelands
(including the waters therein and thereunder), strongly influenced
by each other and in proximity to the shorelines of the several
coastal States, and includes islands, transition and intertidal areas,
salt marshes, wetlands, and beaches, which zone extends seaward
to the outer limit of the United States territorial sea and extends
inland from the shorelines to the extent necessary to control
shorelands, the uses of which have a direct and significant impact
on the coastal waters, and the inward boundaries of which may be
identified by the several coastal States, pursuant to the authority
of section 305(b)(1) of the Coastal Zone Management Act of 1972
(16 U.S.C. 1454(b)(1));
149
December 29, 2000

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OUTER CONTINENTAL SHELF LANDS ACT

Sec. 6

period or periods as provided in section 7 hereof or as may be
fixed from time to time by the Secretary;
(2) such lease was issued prior to December 21, 1948, and
would have been on June 5, 1950, in force and effect in accordance with its terms and provisions and the law of the State
issuing it had the State had authority to issue such lease;
(3) there is filed with the Secretary, within the period or
periods specified in paragraph (1) of this subsection, (A) a certificate issued by the State official or agency having jurisdiction over such lease stating that it would have been in force
and effect as required by the provisions of paragraph (2) of this
subsection, or (B) in the absence of such certificate, evidence
in the form of affidavits, receipts, canceled checks, or other documents that may be required by the Secretary, sufficient to
prove that such lease would have been so in force and effect;
(4) except as otherwise provided in section 7 hereof, all
rents, royalties, and other sums payable under such lease between June 5, 1950, and the effective date of this Act, which
have not been paid in accordance with the provisions thereof,
or to the Secretary or to the Secretary of the Navy, are paid
to the Secretary within the period or periods specified in paragraph (1) of this subsection, and all rents, royalties, and other
sums payable under such lease after the effective date of this
Act, are paid to the Secretary, who shall deposit such payments in the Treasury in accordance with section 9 of this Act;
(5) the holder of such lease certifies that such lease shall
continue to be subject to the overriding royalty obligations existing on the effective date of this Act;
(6) such lease was not obtained by fraud or misrepresentation;
(7) such lease, if issued on or after June 23, 1947, was
issued upon the basis of competitive bidding;
(8) such lease provides for a royalty to the lessor on oil and
gas of not less than 121⁄2 per centum and on sulphur of not less
than 5 per centum in amount or value of the production saved,
removed, or sold from the lease, or, in any case in which the
lease provides for a lesser royalty, the holder thereof consents
in writing, filed with the Secretary, to the increase of the royalty to the minimum herein specified;
(9) the holder thereof pays to the Secretary within the period or periods specified in paragraph (1) of this subsection an
amount equivalent to any severance, gross production, or occupation taxes imposed by the State issuing the lease on the production from the lease, less the State’s royalty interest in such
production, between June 5, 1950, and the effective date of this
Act and not heretofore paid to the State, and thereafter pays
to the Secretary as an additional royalty on the production
from the lease, less the United States’ royalty interest in such
production, a sum of money equal to the amount of the severance, gross production, or occupation taxes which would have
been payable on such production to the State issuing the lease
under its laws as they existed on the effective date of this Act;
(10) such lease will terminate within a period of not more
than five years from the effective date of this Act in the abDecember 29, 2000

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OUTER CONTINENTAL SHELF LANDS ACT

160

sence of production or operations for drilling, or, in any case
in which the lease provides for a longer period, the holder
thereof consents in writing, filed with the Secretary, to the reduction of such period so that it will not exceed the maximum
period herein specified; and
(11) the holder of such lease furnishes such surety bond,
if any, as the Secretary may require and complies with such
other reasonable requirements as the Secretary may deem necessary to protect the interests of the United States.
(b) Any person holding a mineral lease, which as determined
by the Secretary meets the requirements of subsection (a) of this
section, may continue to maintain such lease, and may conduct operations thereunder, in accordance with (1) its provisions as to the
area, the minerals covered, rentals and, subject to the provisions
of paragraphs (8), (9) and (10) of subsection (a) of this section, as
to royalties and as to the term thereof and of any extensions, renewals, or replacements authorized therein or heretofore authorized by the laws of the State issuing such lease, or, if oil or gas
was not being produced in paying quantities from such lease or or
before December 11, 1950, or if production in paying quantities has
ceased since June 5, 1950, or if the primary term of such lease has
expired since December 11, 1950, then for a term from the effective
date hereof equal to the term remaining unexpired on December
11, 1950, under the provisions of such lease or any extensions, renewals, or replacements authorized therein, or heretofore authorized by the laws of such State, and (2) such regulations as the Secretary may under section 5 of this Act prescribe within ninety days
after making his determination that such lease meets the requirements of subsection (a) of this section: Provided, however, That any
rights to sulphur under any lease maintained under the provisions
of this subsection shall not extend beyond the primary term of such
lease or any extension thereof under the provisions of such subsection (b) unless sulphur is being produced in paying quantities or
drilling, well reworking, plant construction, or other operations for
the production of sulphur, as approved by the Secretary, are being
conducted on the area covered by such lease on the date of expiration of such primary term or extension: Provided further, That if
sulphur is being produced in paying quantities on such date, then
such rights shall continue to be maintained in accordance with
such lease and the provisions of this Act: Provided further, That,
if the primary term of a lease being maintained under subsection
(b) hereof has expired prior to the effective date of this Act and oil
or gas is being produced in paying quantities on such date, then
such rights to sulphur as the lessee may have under such lease
shall continue for twenty-four months from the effective date of
this Act and as long thereafter as sulphur is produced in paying
quantities, or drilling, well working, plant construction, or other operations for the production of sulphur, as approved by the Secretary, are being conducted on the area covered by the lease.
(c) The permission granted in subsection (b) of this section
shall not be construed to be a waiver of such claims, if any, as the
United States may have against the lessor or the lessee or any
other person respecting sums payable or paid for or under the
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Sec. 8

lease, or respecting activities conducted under the lease, prior to
the effective date of this Act.
(d) Any person complaining of a negative determination by the
Secretary of the Interior under this section may have such determination reviewed by the United States District Court for the District of Columbia by filing a petition for review within sixty days
after receiving notice of such action by the Secretary.
(e) In the event any lease maintained under this section covers
lands beneath navigable waters, as that term is used in the Submerged Lands Act, as well as lands of the outer Continental Shelf,
the provisions of this section shall apply to such lease only insofar
as it covers lands of the outer Continental Shelf.
[43 U.S.C. 1335]

SEC. 7. CONTROVERSY OVER JURISDICTION.—In the event of a
controversy between the United States and a State as to whether
or not lands are subject to the provisions of this Act, the Secretary
is authorized, notwithstanding the provisions of subsections (a) and
(b) of section 6 of this Act, and with the concurrence of the Attorney General of the United States, to negotiate and enter into agreements with the State, its political subdivision or grantee or a lessee
thereof, respecting operations under existing mineral leases and
payment and impounding of rents, royalties, and other sums payable thereunder, or with the State, its political subdivision or
grantee, respecting the issuance or nonissuance of new mineral
leases pending the settlement or adjudication of the controversy.
The authorization contained in the preceding sentence of this section shall not be construed to be a limitation upon the authority
conferred on the Secretary in other sections of this Act. Payments
made pursuant to such agreement, or pursuant to any stipulation
between the United States and a State, shall be considered as compliance with section 6(a)(4) hereof. Upon the termination of such
agreement or stipulation by reason of the final settlement or adjudication of such controversy, if the lands subject to any mineral
lease are determined to be in whole or in part lands subject to the
provisions of this Act, the lessee, if he has not already done so,
shall comply with the requirements of section 6(a), and thereupon
the provisions of section 6(b) shall govern such lease. The notice
concerning ‘‘Oil and Gas Operations in the Submerged Coastal
Lands of the Gulf of Mexico’’ issued by the Secretary on December
11, 1950 (15 F. R. 8835), as amended by the notice dated January
26, 1951 (16 F. R. 953), and as supplemented by the notices dated
February 2, 1951 (16 F. R. 1203), March 5, 1951 (16 F. R. 2195),
April 23, 1951 (16 F. R. 3623), June 25, 1951 (16 F. R. 6404), August 22, 1951 (16 F. R. 8720), October 24, 1951 (16 F. R. 10998),
December 21, 1951 (17 F. R. 43), March 25, 1952 (17 F. R. 2821),
June 26, 1952 (17 F. R. 5833), and December 24, 1952 (18 F. R.
48), respectively, is hereby approved and confirmed.
[43 U.S.C. 1336]

SEC. 8. LEASING OF OUTER CONTINENTAL SHELF.—(a)(1) The
Secretary is authorized to grant to the highest responsible qualified
bidder or bidders by competitive bidding, under regulations promulgated in advance, any oil and gas lease on submerged lands of
December 29, 2000

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Sec. 8

OUTER CONTINENTAL SHELF LANDS ACT

162

the outer Continental Shelf which are not covered by leases meeting the requirements of subsection (a) of section 6 of this Act. Such
regulations may provide for the deposit of cash bids in an interestbearing account until the Secretary announces his decision on
whether to accept the bids, with the interest earned thereon to be
paid to the Treasury as to bids that are accepted and to the unsuccessful bidders as to bids that are rejected. The bidding shall be by
sealed bid and, at the discretion of the Secretary, on the basis of—
(A) cash bonus bid with a royalty at not less than 121⁄2 per
centum fixed by the Secretary in amount or value of the production saved, removed, or sold;
(B) variable royalty bid based on a per centum in amount
or value of the production saved, removed, or sold, with either
a fixed work commitment based on dollar amount for exploration or a fixed cash bonus as determined by the Secretary,
or both;
(C) cash bonus bid, or work commitment bid based on a
dollar amount for exploration with a fixed cash bonus, and a
diminishing or sliding royalty based on such formulae as the
Secretary shall determine as equitable to encourage continued
production from the lease area as resources diminish, but not
less than 121⁄2 per centum at the beginning of the lease period
in amount or value of the production saved, removed, or sold;
(D) cash bonus bid with a fixed share of the net profits of
no less than 30 per centum to be derived from the production
of oil and gas from the lease area;
(E) fixed cash bonus with the net profit share reserved as
the bid variable;
(F) cash bonus bid with a royalty at no less than 121⁄2 per
centum fixed by the Secretary in amount or value of the production saved, removed, or sold and a fixed per centum share
of net profits of no less than 30 per centum to be derived from
the production of oil and gas from the lease area;
(G) work commitment bid based on a dollar amount for exploration with a fixed cash bonus and a fixed royalty in
amount or value of the production saved, removed, or sold;
(H) cash bonus bid with royalty at no less than 12 and 1⁄2
per centum fixed by the Secretary in amount or value of production saved, removed, or sold, and with suspension of royalties for a period, volume, or value of production determined by
the Secretary, which suspensions may vary based on the price
of production from the lease; or
(I) subject to the requirements of paragraph (4) of this subsection, any modification of bidding systems authorized in subparagraphs (A) through (G), or any other systems of bid variables, terms, and conditions which the Secretary determines to
be useful to accomplish the purposes and policies of this Act,
except that no such bidding system or modification shall have
more than one bid variable.
(2) The Secretary may, in his discretion, defer any part of the
payment of the cash bonus, as authorized in paragraph (1) of this
subsection, according to a schedule announced at the time of the
announcement of the lease sale, but such payment shall be made
in total no later than five years after the date of the lease sale.
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OUTER CONTINENTAL SHELF LANDS ACT

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(3)(A) The Secretary may, in order to promote increased production on the lease area, through direct, secondary, or tertiary recovery means, reduce or eliminate any royalty or net profit share
set forth in the lease for such area.
(B) In the Western and Central Planning Areas of the Gulf of
Mexico and the portion of the Eastern Planning Area of the Gulf
of Mexico encompassing whole lease blocks lying west of 87 degrees, 30 minutes West longitude, the Secretary may, in order to—
(i) promote development or increased production on producing or non-producing leases; or
(ii) encourage production of marginal resources on producing or non-producing leases;
through 1 primary, secondary, or tertiary recovery means, reduce or eliminate any royalty or net profit share set forth in
the lease(s). With the lessee’s consent, the Secretary may make
other modifications to the royalty or net profit share terms of
the lease in order to achieve these purposes.
(C)(i) Notwithstanding the provisions of this Act other than
this subparagraph, with respect to any lease or unit in existence
on the date of enactment of the Outer Continental Shelf Deep
Water Royalty Relief Act meeting the requirements of this subparagraph, no royalty payments shall be due on new production, as defined in clause (iv) of this subparagraph, from any lease or unit located in water depths of 200 meters or greater in the Western and
Central Planning Areas of the Gulf of Mexico, including that portion of the Eastern Planning Area of the Gulf of Mexico encompassing whole lease blocks lying west of 87 degrees, 30 minutes
West longitude, until such volume of production as determined pursuant to clause (ii) has been produced by the lessee.
(ii) Upon submission of a complete application by the lessee,
the Secretary shall determine within 180 days of such application
whether new production from such lease or unit would be economic
in the absence of the relief from the requirement to pay royalties
provided for by clause (i) of this subparagraph. In making such determination, the Secretary shall consider the increased technological and financial risk of deep water development and all costs
associated with exploring, developing, and producing from the
lease. The lessee shall provide information required for a complete
application to the Secretary prior to such determination. The Secretary shall clearly define the information required for a complete
application under this section. Such application may be made on
the basis of an individual lease or unit. If the Secretary determines
that such new production would be economic in the absence of the
relief from the requirement to pay royalties provided for by clause
(i) of this subparagraph, the provisions of clause (i) shall not apply
to such production. If the Secretary determines that such new production would not be economic in the absence of the relief from the
requirement to pay royalties provided for by clause (i), the Secretary must determine the volume of production from the lease or
unit on which no royalties would be due in order to make such new
production economically viable; except that for new production as
defined in clause (iv)(I), in no case will that volume be less than
1 Indentation

December 29, 2000

so in original. Probably should be flush.

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17.5 million barrels of oil equivalent in water depths of 200 to 400
meters, 52.5 million barrels of oil equivalent in 400–800 meters of
water, and 87.5 million barrels of oil equivalent in water depths
greater than 800 meters. Redetermination of the applicability of
clause (i) shall be undertaken by the Secretary when requested by
the lessee prior to the commencement of the new production and
upon significant change in the factors upon which the original determination was made. The Secretary shall make such redetermination within 120 days of submission of a complete application.
The Secretary may extend the time period for making any determination or redetermination under this clause for 30 days, or
longer if agreed to by the applicant, if circumstances so warrant.
The lessee shall be notified in writing of any determination or redetermination and the reasons for and assumptions used for such determination. Any determination or redetermination under this
clause shall be a final agency action. The Secretary’s determination
or redetermination shall be judicially reviewable under section
10(a) of the Administrative Procedures Act (5 U.S.C. 702), only for
actions filed within 30 days of the Secretary’s determination or redetermination.
(iii) In the event that the Secretary fails to make the determination or redetermination called for in clause (ii) upon application by the lessee within the time period, together with any extension thereof, provided for by clause (ii), no royalty payments shall
be due on new production as follows:
(I) For new production, as defined in clause (iv)(I) of this
subparagraph, no royalty shall be due on such production according to the schedule of minimum volumes specified in clause
(ii) of this subparagraph.
(II) For new production, as defined in clause (iv)(II) of this
subparagraph, no royalty shall be due on such production for
one year following the start of such production.
(iv) For purposes of this subparagraph, the term ‘‘new production’’ is—
(I) any production from a lease from which no royalties are
due on production, other than test production, prior to the date
of enactment of the Outer Continental Shelf Deep Water Royalty Relief Act; or
(II) any production resulting from lease development activities pursuant to a Development Operations Coordination
Document, or supplement thereto that would expand production significantly beyond the level anticipated in the Development Operations Coordination Document, approved by the Secretary after the date of enactment of the Outer Continental
Shelf Deep Water Royalty Relief Act.
(v) During the production of volumes determined pursuant to
clauses (ii) or (iii) of this subparagraph, in any year during which
the arithmetic average of the closing prices on the New York Mercantile Exchange for light sweet crude oil exceeds $28.00 per barrel, any production of oil will be subject to royalties at the lease
stipulated royalty rate. Any production subject to this clause shall
be counted toward the production volume determined pursuant to
clause (ii) or (iii). Estimated royalty payments will be made if such
average of the closing prices for the previous year exceeds $28.00.
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After the end of the calendar year, when the new average price can
be calculated, lessees will pay any royalties due, with interest but
without penalty, or can apply for a refund, with interest, of any
overpayment.
(vi) During the production of volumes determined pursuant to
clause (ii) or (iii) of this subparagraph, in any year during which
the arithmetic average of the closing prices on the New York Mercantile Exchange for natural gas exceeds $3.50 per million British
thermal units, any production of natural gas will be subject to royalties at the lease stipulated royalty rate. Any production subject
to this clause shall be counted toward the production volume determined pursuant to clauses (ii) or (iii). Estimated royalty payments
will be made if such average of the closing prices for the previous
year exceeds $3.50. After the end of the calendar year, when the
new average price can be calculated, lessees will pay any royalties
due, with interest but without penalty, or can apply for a refund,
with interest, of any overpayment.
(vii) The prices referred to in clauses (v) and (vi) of this subparagraph shall be changed during any calendar year after 1994 by
the percentage, if any, by which the implicit price deflator for the
gross domestic product changed during the preceding calendar
year.
(4)(A) The Secretary of Energy shall submit any bidding system authorized in subparagraph (H) of paragraph (1) to the Senate
and House of Respresentatives. The Secretary may institute such
bidding system unless either the Senate or the House of Representatives passes a resolution of disapproval within thirty days after
receipt of the bidding system.
(B) Subparagraphs (C) through (J) of this paragraph are enacted by Congress—
(i) as an exercise of the rulemaking power of the Senate
and the House of Representatives, respectively, and as such
they are deemed a part of the rules of each House, respectively, but they are applicable only with respect to the procedures to be followed in that House in the case of resolutions
described by this paragraph, and they supersede other rules
only to the extent that they are inconsistent therewith; and
(ii) with full recognition of the constitutional right of either
House to change the rules (so far as relating to the procedure
of that House) at any time, in the same manner, and to the
same extent as in the case of any other rule of that House.
(C) A resolution disapproving a bidding system submitted pursuant to this paragraph shall immediately be referred to a committee (and all resolutions with respect to the same request shall
be referred to the same committee) by the President of the Senate
or the Speaker of the House of Representative, as the case may be.
(D) If the committee to which has been referred any resolution
disapproving the bidding system of the Secretary has not reported
the resolution at the end of ten calendar days after its referral, it
shall be in order to move either to discharge the committee from
further consideration of the resolution or to discharge the committee from further consideration of any other resolution with respect to the same bidding system which has been referred to the
committee.
December 29, 2000

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(E) A motion to discharge may be made only by an individual
favoring the resolution, shall be highly privileged (except that it
may not be made after the committee has reported a resolution
with respect to the same recommendation), and debate thereon
shall be limited to not more than one hour, to be divided equally
between those favoring and those opposing the resolution. An
amendment to the motion shall not be in order, and it shall not be
in order to move to reconsider the vote by which the motion is
agreed to or disagreed to.
(F) If the motion to discharge is agreed to or disagreed to, the
motion may not be renewed, nor may another motion to discharge
the committee be made with respect to any other resolution with
respect to the same bidding system.
(G) When the committee has reported, or has been discharged
from further consideration of, a resolution as provided in this paragraph, it shall be at any time thereafter in order (even though a
previous motion to the same effect has been disagreed to) to move
to proceed to the consideration of the resolution. The motion shall
be highly privileged and shall not be debatable. An amendment to
the motion shall not be in order, and it shall not be in order to
move to reconsider the vote by which the motion is agreed to or disagreed to.
(H) Debate on the resolution is limited to not more than two
hours, to be divided equally between those favoring and those opposing the resolution. A motion further to limit debate is not debatable. An amendment to, or motion to recommit, the resolution is
not in order, and it is not in order to move to reconsider the vote
by which the resolution is agreed to or disagreed to.
(I) Motions to postpone, made with respect to the discharge
from the committee, or the consideration of a resolution with respect to a bidding system, and motions to proceed to the consideration of other business, shall be decided without debate.
(J) Appeals from the decisions of the Chair relating to the application of the rules of the Senate or the House of Representatives,
as the case may be, to the procedure relating to a resolution with
respect to a bidding system shall be decided without debate.
(5)(A) During the five-year period commencing on the date of
enactment of this subsection, the Secretary may, in order to obtain
statistical information to determine which bidding alternatives will
best accomplish the purposes and policies of this Act, require, as
to no more than 10 per centum of the tracts offered each year, each
bidder to submit bids for any area of the outer Continental Shelf
in accordance with more than one of the bidding systems set forth
in paragraph (1) of this subsection. For such statistical purposes,
leases may be awarded using a bidding alternative selected at random for the acquisition of valid statistical data if such bidding alternative is otherwise consistent with the provisions of this Act.
(B) The bidding systems authorized by paragraph (1) of this
subsection, other than the system authorized by subparagraph (A),
shall be applied to not less than 20 per centum and not more than
60 per centum of the total area offered for leasing each year during
the five-year period beginning on the date of enactment of this subsection, unless the Secretary determines that the requirements set
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forth in this subparagraph are inconsistent with the purposes and
policies of this Act.
(6) At least ninety days prior to notice of any lease sale under
subparagraph (D), (E), (F), or, if appropriate, (H) of paragraph (1),
the Secretary shall by regulation establish rules to govern the calculation of net profits. In the event of any dispute between the
United States and a lessee concerning the calculation of the net
profits under the regulation issued pursuant to this paragraph, the
burden of proof shall be on the lessee.
(7) After an oil and gas lease is granted pursuant to any of the
work commitment options of paragraph (1) of this subsection—
(A) the lessee, at its option, shall deliver to the Secretary
upon issuance of the lease either (i) a cash deposit for the full
amount of the exploration work commitment, or (ii) a performance bond in form and substance and with a surety satisfactory
to the Secretary, in the principal amount of such exploration
work commitment assuring the Secretary that such commitment shall be faithfully discharged in accordance with this section, regulations, and the lease; and for purposes of this subparagraph, the principal amount of such cash deposit or bond
may, in accordance with regulations, be periodically reduced
upon proof, satisfactory to the Secretary, that a portion of the
exploration work commitment has been satisfied;
(B) 50 per centum of all exploration expenditures on, or directly related to, the lease, including, but not limited to (i) geological investigations and related activities, (ii) geophysical investigations including seismic, geomagnetic, and gravity surveys, data processing and interpretation, and (iii) exploratory
drilling, core drilling, redrilling, and well completion or abandonment, including the drilling of wells sufficient to determine
the size and area extent of any newly discovered field, and including the cost of mobilization and demobilization of drilling
equipment, shall be included in satisfaction of the commitment, except that the lessee’s general overhead cost shall not
be so included against the work commitment, but its cost (including employee benefits) of employees directly assigned to
such exploration work shall be so included; and
(C) if at the end of the primary term of the lease, including
any extension thereof, the full dollar amount of the exploration
work commitment has not been satisfied, the balance shall
then be paid in cash to the Secretary.
(8) Not later than thirty days before any lease sale, the Secretary shall submit to the Congress and publish in the Federal
Register a notice—
(A) identifying any bidding system which will be utilized
for such lease sale and the reasons for the utilization of such
bidding system; and
(B) designating the lease tracts selected which are to be offered in such sale under the bidding system authorized by subparagraph (A) of paragraph (1) and the lease tracts selected
which are to be offered under any one or more of the bidding
systems authorized by subparagraphs (B) through (H) of paragraph (1), and the reasons such lease tracts are to be offered
under a particular bidding system.
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(b) An oil and gas lease issued pursuant to this section shall—
(1) be for a tract consisting of a compact area not exceeding five thousand seven hundred and sixty acres, as the Secretary may determine, unless the Secretary finds that a larger
area is necessary to comprise a reasonable economic production
unit;
(2) be for an initial period of—
(A) five years; or
(B) not to exceed ten years where the Secretary finds
that such longer period is necessary to encourage exploration and development in areas because of unusually deep
water or other unusually adverse conditions,
and as long after such initial period as oil or gas is produced
from the area in paying quantities, or drilling or well reworking operations as approved by the Secretary are conducted
thereon;
(3) require the payment of amount or value as determined
by one of the bidding systems set forth in subsection (a) of this
section;
(4) entitle the lessee to explore, develop, and produce the
oil and gas contained within the lease area, conditioned upon
due diligence requirements and the approval of the development and production plan required by this Act;
(5) provide for suspension or cancellation of the lease during the initial lease term or thereafter pursuant to section 5
of this Act;
(6) contain such rental and other provisions as the Secretary may prescribe at the time of offering the area for lease;
and
(7) provide a requirement that the lessee offer 20 per centum of the crude oil, condensate, and natural gas liquids produced on such lease, at the market value and point of delivery
applicable to Federal royalty oil, to small or independent refiners as defined in the Emergency Petroleum Allocation Act of
1973.
(c)(1) Following each notice of a proposed lease sale and before
the acceptance of bids and the issuance of leases based on such
bids, the Secretary shall allow the Attorney General, in consultation with the Federal Trade Commission, thirty days to review the
results of such lease sale, except that the Attorney General, after
consultation with the Federal Trade Commission, may agree to a
shorter review period.
(2) The Attorney General may, in consultation with the Federal Trade Commission, conduct such antitrust review on the likely
effects the issuance of such leases would have on competition as
the Attorney General, after consultation with the Federal Trade
Commission, deems appropriate and shall advise the Secretary
with respect to such review. The Secretary shall provide such information as the Attorney General, after consultation with the Federal Trade Commission, may require in order to conduct any antitrust review pursuant to this paragraph and to make recommendations pursuant to paragraph (3) of this subsection.
(3) The Attorney General, after consultation with the Federal
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retary, including the nonacceptance of any bid, as may be appropriate to prevent any situation inconsistent with the antitrust laws.
If the Secretary determines, or if the Attorney General advises the
Secretary, after consultation with the Federal Trade Commission
and prior to the issuance of any lease, that such lease may create
or maintain a situation inconsistent with the antitrust laws, the
Secretary may—
(A) refuse (i) to accept an otherwise qualified bid for such
lease, or (ii) to issue such lease, notwithstanding subsection (a)
of this section; or
(B) issue such lease, and notify the lessee and the Attorney
General of the reason for such decision.
(4)(A) Nothing in this subsection shall restrict the power under
any other Act or the common law of the Attorney General, the Federal Trade Commission, or any other Federal department or agency
to secure information, conduct reviews, make recommendations, or
seek appropriate relief.
(B) Neither the issuance of a lease nor anything in this subsection shall modify or abridge any private right of action under
the antitrust laws.
(d) No bid for a lease may be submitted if the Secretary finds,
after notice and hearing, that the bidder is not meeting due diligence requirements on other leases.
(e) No lease issued under this Act may be sold, exchanged, assigned, or otherwise transferred except with the approval of the
Secretary. Prior to any such approval, the Secretary shall consult
with and give due consideration to the views of the Attorney General.
(f) Nothing in this Act shall be deemed to convey to any person, association, corporation, or other business organization immunity from civil or criminal liability, or to create defenses to actions,
under any antitrust law.
(g)(1) At the time of soliciting nominations for the leasing of
lands containing tracts wholly or partially within three nautical
miles of the seaward boundary of any coastal State, and subsequently as new information is obtained or developed by the Secretary, the Secretary, in addition to the information required by
section 26 of this Act, shall provide the Governor of such State—
(A) an identification and schedule of the areas and regions
proposed to be offered for leasing;
(B) at the request of the Governor of such State, all information from all sources concerning the geographical, geological, and ecological characteristics of such tracts;
(C) an estimate of the oil and gas reserves in the areas
proposed for leasing; and
(D) at the request of the Governor of such State, an identification of any field, geological structure, or trap located wholly
or partially within three nautical miles of the seaward boundary of such coastal State, including all information relating to
the entire field, geological structure, or trap.
The provisions of the first sentence of subsection (c) and the provisions of subsections (e)–(h) of section 26 of this Act shall be applicable to the release by the Secretary of any information to any coastal State under this paragraph. In addition, the provisions of subDecember 29, 2000

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sections (c) and (e)–(h) of section 26 of this Act shall apply in their
entirety to the release by the Secretary to any coastal State of any
information relating to Federal lands beyond three nautical miles
of the seaward boundary of such coastal State.
(2) Notwithstanding any other provision of this Act, the Secretary shall deposit into a separate account in the Treasury of the
United States all bonuses, rents, and royalties, and other revenues
(derived from any bidding system authorized under subsection
(a)(1), excluding Federal income and windfall profits taxes, and derived from any lease issued after September 18, 1978 of any Federal tract which lies wholly (or, in the case of Alaska, partially
until seven years from the date of settlement of any boundary dispute that is the subject of an agreement under section 7 of this Act
entered into prior to January 1, 1986 or until April 15, 1993 with
respect to any other tract) within three nautical miles of the seaward boundary of any coastal State, or, (except as provided above
for Alaska) in the case where a Federal tract lies partially within
three nautical miles of the seaward boundary, a percentage of bonuses, rents, royalties, and other revenues (derived from any bidding system authorized under subsection (a)(1), excluding Federal
income and windfall profits taxes, and derived from any lease
issued after September 18, 1978 of such tract equal to the percentage of surface acreage of the tract that lies within such three nautical miles. Except as provided in paragraph (5) of this subsection,
not later than the last business day of the month following the
month in which those revenues are deposited in the Treasury, the
Secretary shall transmit to such coastal State 27 percent of those
revenues, together with all accrued interest thereon. The remaining balance of such revenues shall be transmitted simultaneously
to the miscellaneous receipts account of the Treasury of the United
States.
(3) Whenever the Secretary or the Governor of a coastal State
determines that a common potentially hydrocarbon-bearing area
may underlie the Federal and State boundary, the Secretary or the
Governor shall notify the other party in writing of his determination and the Secretary shall provide to the Governor notice of the
current and projected status of the tract or tracts containing the
common potentially hydrocarbon-bearing area. If the Secretary has
leased or intends to lease such tract or tracts, the Secretary and
the Governor of the coastal State may enter into an agreement to
divide the revenues from production of any common potentially hydrocarbon-bearing area, by unitization or other royalty sharing
agreement, pursuant to existing law. If the Secretary and the Governor do not enter into an agreement, the Secretary may nevertheless proceed with the leasing of the tract or tracts. Any revenue received by the United States under such an agreement shall be subject to the requirements of paragraph (2).
(4) The deposits in the Treasury account described in this section shall be invested by the Secretary of the Treasury in securities
backed by the full faith and credit of the United States having maturities suitable to the needs of the account and yielding the highest reasonably available interest rates as determined by the Secretary of the Treasury.
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(5)(A) When there is a boundary dispute between the United
States and a State which is subject to an agreement under section
7 of this Act, the Secretary shall credit to the account established
pursuant to such agreement all bonuses, rents, and royalties, and
other revenues (derived from any bidding system authorized under
subsection (a)(1)), excluding Federal income and windfall profits
taxes, and derived from any lease issued after September 18, 1978
of any Federal tract which lies wholly or partially within three
nautical miles of the seaward boundary asserted by the State, if
that money has not otherwise been deposited in such account. Proceeds of an escrow account established pursuant to an agreement
under section 7 shall be distributed as follows:
(i) Twenty-seven percent of all bonuses, rents, and royalties, and other revenues (derived from any bidding system authorized under subsection (a)(1)), excluding Federal income and
windfall profits taxes, and derived from any lease issued after
September 18, 1978, of any tract which lies wholly within three
nautical miles of the seaward boundary asserted by the Federal Government in the boundary dispute, together with all accrued interest thereon, shall be paid to the State either—
(I) within thirty days of December 1, 1987, or
(II) by the last business day of the month following the
month in which those revenues are deposited in the Treasury, whichever date is later.
(ii) Upon the settlement of a boundary dispute which is
subject to a section 7 agreement between the United States
and a State, the Secretary shall pay to such State any additional moneys due such State from amounts deposited in or
credit to the escrow account. If there is insufficient money deposited in the escrow account, the Secretary shall transmit,
from any revenues derived from any lease of Federal lands
under this Act, the remaining balance due such State in accordance with the formula set forth in section 8004(b)(1)(B) of
the Outer Continental Shelf Lands Act Amendments of 1985.
(B) This paragraph applies to all Federal oil and gas lease
sales, under this Act, including joint lease sales, occurring after
September 18, 1978.
(6) This section shall be deemed to take effect on October 1,
1985, for purposes of determining the amounts to be deposited in
the separate account and the States’ shares described in paragraph
(2).
(7) When the Secretary leases any tract which lies wholly or
partially within three miles of the seaward boundary of two or
more States, the revenues from such tract shall be distributed as
otherwise provided by this section, except that the State’s share of
such revenues that would otherwise result under this section shall
be divided equally among such States.
(h) Nothing contained in this section shall be construed to
alter, limit, or modify any claim of any State to any jurisdiction
over, or any right, title or interest in, any submerged lands.
(i) In order to meet the urgent need for further exploration and
development of the sulphur deposits in the submerged lands of the
outer Continental Shelf, the Secretary is authorized to grant to the
qualified persons offering the highest cash bonuses on a basis of
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competitive bidding sulphur leases on submerged lands of the outer
Continental Shelf, which are not covered by leases which include
sulphur and meet the requirements of subsection (a) of section 6
of this Act, and which sulphur leases shall be offered for bid by
sealed bids and granted on separate leases from oil and gas leases,
and for a separate consideration, and without priority or preference
accorded to oil and gas lessees on the same area.
(j) A sulphur lease issued by the Secretary pursuant to this
section shall (1) cover an area of such size and dimensions as the
Secretary may determine, (2) be for a period of not more than ten
years and so long thereafter as sulphur may be produced from the
area in paying quantities or drilling, well reworking, plant construction, or other operations for the production of sulphur, as approved by the Secretary, are conducted thereon, (3) require the
payment to the United States of such royalty as may be specified
in the lease but not less than 5 per centum of the gross production
of value of the sulphur at the wellhead, and (4) contained such
rental provisions and such other terms and provisions as the Secretary may by regulation prescribe at the time of offering the area
for lease.
(k)(1) The Secretary is authorized to grant to the qualified persons offering the highest cash bonuses on a basis of competitive
bidding leases of any mineral other than oil, gas, and sulphur in
any area of the outer Continental Shelf not then under lease for
such mineral upon such royalty, rental, and other terms and conditions as the Secretary may prescribe at the time of offering the
area for lease.
(2)(A) Notwithstanding paragraph (1), the Secretary may negotiate with any person an agreement for the use of Outer Continental Shelf sand, gravel and shell resources—
(i) for use in a program of, or project for, shore protection,
beach restoration, or coastal wetlands restoration undertaken
by a Federal, State, or local government agency; or
(ii) for use in a construction project, other than a project
described in clause (i), that is funded in whole or in part by
or authorized by the Federal Government.
(B) In carrying out a negotiation under this paragraph, the
Secretary may assess a fee based on an assessment of the value of
the resources and the public interest served by promoting development of the resources. No fee shall be assessed directly or indirectly under this subparagraph against a Federal, State, or local
government agency.
(C) The Secretary may, through this paragraph and in consultation with the Secretary of Commerce, seek to facilitate
projects in the coastal zone, as such term is defined in section 304
of the Coastal Zone Management Act of 1972 (16 U.S.C. 1453), that
promote the policy set forth in section 303 of that Act (16 U.S.C.
1452).
(D) Any Federal agency which proposes to make use of sand,
gravel and shell resources subject to the provisions of this Act shall
enter into a Memorandum of Agreement with the Secretary concerning the potential use of those resources. The Secretary shall
notify the Committee on Merchant Marine and Fisheries and the
Committee on Natural Resources of the House of Representatives
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Sec. 11

and the Committee on Energy and Natural Resources of the Senate
on any proposed project for the use of those resources prior to the
use of those resources.
(l) Notices of sale of leases, and the terms of bidding authorized by this section shall be published at least thirty days before
the date of sale in accordance with rules and regulations promulgated by the Secretary.
(m) All moneys paid to the Secretary for or under leases granted pursuant to this section shall be deposited in the Treasury in
accordance with section 9 of this Act.
(n) The issuance of any lease by the Secretary pursuant to this
Act, or the making of any interim arrangements by the Secretary
pursuant to section 7 of this Act shall not prejudice the ultimate
settlement or adjudication of the question as to whether or not the
area involved is in the outer Continental Shelf.
(o) The Secretary may cancel any lease obtained by fraud or
misrepresentation.
[43 U.S.C. 1337]

SEC. 9. DISPOSITION OF REVENUES.—All rentals, royalties, and
other sums paid to the Secretary or the Secretary of the Navy
under any lease on the outer Continental Shelf for the period from
June 5, 1950, to date, and thereafter shall be deposited in the
Treasury of the United States and credited to miscellaneous receipts.
[43 U.S.C. 1338]

øSEC. 10. Repealed by section 8(b) of P.L. 104–185, 110 Stat.
1717.¿
SEC. 11. GEOLOGICAL AND GEOPHYSICAL EXPLORATIONS.—(a)(1)
Any agency of the United States and any person authorized by the
Secretary may conduct geological and geophysical explorations in
the outer Continental Shelf, which do not interfere with or endanger actual operations under any lease maintained or granted pursuant to this Act, and which are not unduly harmful to aquatic life
in such area.
(2) The provisions of paragraph (1) of this subsection shall not
apply to any person conducting explorations pursuant to an approved exploration plan on any area under lease to such person
pursuant to the provisions of this Act.
(b) Except as provided in subsection (f) of this section, beginning ninety days after the date of enactment of this subsection, no
exploration pursuant to any oil and gas lease issued or maintained
under this Act may be undertaken by the holder of such lease, except in accordance with the provisions of this section.
(c)(1) Except as otherwise provided in the Act, prior to commencing exploration pursuant to any oil and gas lease issued or
maintained under this Act, the holder thereof shall submit an exploration plan to the Secretary for approval. Such plan may apply
to more than one lease held by a lessee in any one region of the
outer Continental Shelf, or by a group of lessees acting under a
unitization, pooling, or drilling agreement, and shall be approved
by the Secretary if he finds that such plan is consistent with the
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provisions of this Act, regulations prescribed under this Act, including regulations prescribed by the Secretary pursuant to paragraph
(8) of section 5(a) of this Act, and the provisions of such lease. The
Secretary shall require such modifications of such plan as are necessary to achieve such consistency. The Secretary shall approve
such plan, as submitted or modified, within thirty days of its submission, except that the Secretary shall disapprove such plan if he
determines that (A) any proposed activity under such plan would
result in any condition described in section 5(a)(2)(A)(i) of this Act,
and (B) such proposed activity cannot be modified to avoid such
condition. If the Secretary disapproves a plan under the preceding
sentence, he may, subject to section 5(a)(2)(B) of this Act, cancel
such lease and the lessee shall be entitled to compensation in accordance with the regulations prescribed under section 5(a)(2)(C) (i)
or (ii) of this Act.
(2) The Secretary shall not grant any license or permit for any
activity described in detail in an exploration plan and affecting any
land use or water use in the coastal zone of a State with a coastal
zone management program approved pursuant to section 306 of the
Coastal Zone Management Act of 1972 (16 U.S.C. 1455), unless the
State concurs or is conclusively presumed to concur with the consistency certification accompanying such plan pursuant to section
307(c)(3)(B) (i) or (ii) of such Act, or the Secretary of Commerce
makes the finding authorized by section 307(c)(3)(B)(iii) of such
Act.
(3) An exploration plan submitted under this subsection shall
include, in the degree of detail which the Secretary may by regulation require—
(A) a schedule of anticipated exploration activities to be
undertaken;
(B) a description of equipment to be used for such activities;
(C) the general location of each well to be drilled; and
(D) such other information deemed pertinent by the Secretary.
(4) The Secretary may, by regulation, require that such plan be
accompanied by a general statement of development and production intentions which shall be for planning purposes only and
which shall not be binding on any party.
(d) The Secretary may, by regulation, require any lessee operating under an approved exploration plan to obtain a permit prior
to drilling any well in accordance with such plan.
(e)(1) If a significant revision of an exploration plan approved
under this subsection is submitted to the Secretary, the process to
be used for the approval of such revision shall be the same as set
forth in subsection (c) of this section.
(2) All exploration activities pursuant to any lease shall be conducted in accordance with an approved exploration plan or an approved revision of such plan.
(f)(1) Exploration activities pursuant to any lease for which a
drilling permit has been issued or for which an exploration plan
has been approved, prior to ninety days after the date of enactment
of this subsection, shall be considered in compliance with this section, except that the Secretary may, in accordance with section
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5(a)(1)(B) of this Act, order a suspension or temporary prohibition
of any exploration activities and require a revised exploration plan.
(2) The Secretary may require the holder of a lease described
in paragraph (1) of this subsection to supply a general statement
in accordance with subsection (c)(4) of this section, or to submit
other information.
(3) Nothing in this subsection shall be construed to amend the
terms of any permit or plan to which this subsection applies.
(g) Any permit for geological explorations authorized by this
section shall be issued only if the Secretary determines, in accordance with regulations issued by the Secretary that—
(1) the applicant for such permit is qualified;
(2) the exploration will not interfere with or endanger operations under any lease issued or maintained pursuant to this
Act; and
(3) such exploration will not be unduly harmful to aquatic
life in the area, result in pollution, create hazardous or unsafe
conditions, unreasonably interfere with other uses of the area,
or disturb any site, structure, or object of historical or archeological significance.
(h) The Secretary shall not issue a lease or permit for, or otherwise allow, exploration, development, or production activities within fifteen miles of the boundaries of the Point Reyes Wilderness as
depicted on a map entitled ‘‘Wilderness Plan, Point Reyes National
Seashore’’, numbered 612–90,000–B and dated September 1976,
unless the State of California issues a lease or permit for, or otherwise allows, exploration, development, or production activities on
lands beneath navigable waters (as such term is defined in section
2 of the Submerged Lands Act) of such State which are adjacent
to such Wilderness.
[43 U.S.C. 1340]

SEC. 12. RESERVATIONS.—(a) The President of the United
States may, from time to time, withdraw from disposition any of
the unleased lands of the outer Continental Shelf.
(b) In time of war, or when the President shall so prescribe,
the United States shall have the right of first refusal to purchase
at the market price all or any portion of any mineral produced from
the outer Continental Shelf.
(c) All leases issued under this Act, and leases, the maintenance and operation of which are authorized under this Act, shall
contain or be construed to contain a provision whereby authority
is vested in the Secretary, upon a recommendation of the Secretary
of Defense, during a state of war or national emergency declared
by the Congress or the President of the United States after the effective date of this Act, to suspend operations under any lease; and
all such leases shall contain or be construed to contain provisions
for the payment of just compensation to the lessee whose operations are thus suspended.
(d) The United States reserves and retains the right to designate by and through the Secretary of Defense, with the approval
of the President, as areas restricted from exploration and operation
that part of the outer Continental Shelf needed for national defense; and so long as such designation remains in effect no exploDecember 29, 2000

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ration or operations may be conducted on any part of the surface
of such area except with the concurrence of the Secretary of Defense; and if operations or production under any lease theretofore
issued on lands within any such restricted area shall be suspended,
any payment of rentals, minimum royalty, and royalty prescribed
by such lease likewise shall be suspended during such period of
suspension of operation and production, and the term of such lease
shall be extended by adding thereto any such suspension period,
and the United States shall be liable to the lessee for such compensation as is required to be paid under the Constitution of the
United States.
(e) All uranium, thorium, and all other materials determined
pursuant to paragraph (1) of subsection (b) of section 5 of the
Atomic Energy Act of 1946, as amended, to be peculiarly essential
to the production of fissionable material, contained, in whatever
concentration, in deposits in the subsoil or seabed of the outer Continental Shelf are hereby reserved for the use of the United States.
(f) The United States reserves and retains the ownership of
and the right to extract all helium, under such rules and regulations as shall be prescribed by the Secretary, contained in gas produced from any portion of the outer Continental Shelf which may
be subject to any lease maintained or granted pursuant to this Act,
but the helium shall be extracted from such gas so as to cause no
substantial delay in the delivery of gas produced to the purchaser
of such gas.
[43 U.S.C. 1341]

SEC. 13. NAVAL
PEALED.—Executive

PETROLEUM RESERVE EXECUTIVE ORDER REOrder Numbered 10426, dated January 16,
1953, entitled ‘‘Setting Aside Submerged Lands of the Continental
Shelf as a Naval Petroleum Reserve’’, is hereby revoked.

[43 U.S.C. 524 note]

SEC. 14. PRIOR CLAIMS NOT AFFECTED.—Nothing herein contained shall affect such rights, if any, as may have been acquired
under any law of the United States by any person in lands subject
to this Act and such rights, if any, shall be governed by the law
in effect at the time they may have been acquired: Provided, however, That nothing herein contained is intended or shall be construed as a finding, interpretation, or construction by the Congress
that the law under which such rights may be claimed in fact applies to the lands subject to this Act or authorizes or compels the
granting of such rights in such lands, and that the determination
of the applicability or effect of such law shall be unaffected by anything herein contained.
[43 U.S.C. 1342]

øSEC. 15. [Repealed.]¿
SEC. 16. APPROPRIATIONS.—There is hereby authorized to be
appropriated such sums as may be necessary to carry out the provisions of this Act.
[43 U.S.C. 1331 note]
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SEC. 17. SEPARABILITY.—If any provision of this Act, or any
section, subsection, sentence, clause, phrase or individual word, or
the application thereof to any person or circumstance is held invalid, the validity of the remainder of the Act and of the application of any such provision, section, subsection, sentence, clause,
phrase or individual word to other persons and circumstances shall
not be affected thereby.
[43 U.S.C. 1331 note]

SEC. 18. OUTER CONTINENTAL SHELF LEASING PROGRAM.—(a)
The Secretary, pursuant to procedures set forth in subsections (c)
and (d) of this section, shall prepare and periodically revise, and
maintain an oil and gas leasing program to implement the policies
of this Act. The leasing program shall consist of a schedule of proposed lease sales indicating, as precisely as possible, the size, timing, and location of leasing activity which he determines will best
meet national energy needs for the five-year period following its approval or reapproval. Such leasing program shall be prepared and
maintained in a manner consistent with the following principles:
(1) Management of the outer Continental Shelf shall be
conducted in a manner which considers economic, social, and
environmental values of the renewable and nonrenewable resources contained in the outer Continental Shelf, and the potential impact of oil and gas exploration on other resource values of the outer Continental Shelf and the marine, coastal, and
human environments.
(2) Timing and location of exploration, development, and
production of oil and gas among the oil- and gas-bearing
physiographic regions of the outer Continental Shelf shall be
based on a consideration of—
(A) existing information concerning the geographical,
geological, and ecological characteristics of such regions;
(B) an equitable sharing of developmental benefits and
environmental risks among the various regions;
(C) the location of such regions with respect to, and
the relative needs of, regional and national energy markets;
(D) the location of such regions with respect to other
uses of the sea and seabed, including fisheries, navigation,
existing or proposed sealanes, potential sites of deepwater
ports, and other anticipated uses of the resources and
space of the outer Continental Shelf;
(E) the interest of potential oil and gas producers in
the development of oil and gas resources as indicated by
exploration or nomination;
(F) laws, goals, and policies of affected States which
have been specifically identified by the Governors of such
States as relevant matters for the Secretary’s consideration;
(G) the relative environmental sensitivity and marine
productivity of different areas of the outer Continental
Shelf; and
(H) relevant environmental and predictive information
for different areas of the outer Continental Shelf.
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(3) The Secretary shall select the timing and location of
leasing, to the maximum extent practicable, so as to obtain a
proper balance between the potential for environmental damage, the potential for the discovery of oil and gas, and the potential for adverse impact on the coastal zone.
(4) Leasing activities shall be conducted to assure receipt
of fair market value for the lands leased and the rights conveyed by the Federal Government.
(b) The leasing program shall include estimates of the appropriations and staff required to—
(1) obtain resource information and any other information
needed to prepare the leasing program required by this section;
(2) analyze and interpret the exploratory data and any
other information which may be compiled under the authority
of this Act;
(3) conduct environmental studies and prepare any environmental impact statement required in accordance with this
Act and with section 102(2)(C) of the National Environmental
Policy Act of 1969 (42 U.S.C. 4332(2)(C)); and
(4) supervise operations conducted pursuant to each lease
in the manner necessary to assure due diligence in the exploration and development of the lease area and compliance with
the requirement of applicable laws and regulations, and with
the terms of the lease.
(c)(1) During the preparation of any proposed leasing program
under this section, the Secretary shall invite and consider suggestions for such program from any interested Federal agency, including the Attorney General, in consultation with the Federal Trade
Commission, and from the Governor of any State which may become an affected State under such proposed program. The Secretary may also invite or consider any suggestions from the executive of any affected local government in such an affected State,
which have been previously submitted to the Governor of such
State, and from any other person.
(2) After such preparation and at least sixty days prior to publication of a proposed leasing program in the Federal Register pursuant to paragraph (3) of this subsection, the Secretary shall submit a copy of such proposed program to the Governor of each affected State for review and comment. The Governor may solicit
comments from those executives of local governments in his State
which he, in his discretion, determines will be affected by the proposed program. If any comment by such Governor is received by
the Secretary at least fifteen days prior to submission to the Congress pursuant to such paragraph (3) and includes a request for
any modification of such proposed program, the Secretary shall
reply in writing, granting or denying such request in whole or in
part, or granting such request in such modified form as the Secretary considers appropriate, and stating his reasons therefor. All
such correspondence between the Secretary and Governor of any affected State, together with any additional information and data relating thereto, shall accompany such proposed program when it is
submitted to the Congress.
(3) Within nine months after the date of enactment of this section, the Secretary shall submit a proposed leasing program to the
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Congress, the Attorney General, and the Governors of affected
States, and shall publish such proposed program in the Federal
Register. Each Governor shall, upon request, submit a copy of the
proposed leasing program to the executive of any local government
affected by the proposed program.
(d)(1) Within ninety days after the date of publication of a proposed leasing program, the Attorney General may, after consultation with the Federal Trade Commission, submit comments on the
anticipated effects of such proposed program upon competition. Any
State, local government, or other person may submit comments and
recommendations as to any aspect of such proposed program.
(2) At least sixty days prior to approving a proposed leasing
program, the Secretary shall submit it to the President and the
Congress, together with any comments received. Such submission
shall indicate why any specific recommendation of the Attorney
General or a State or local government was not accepted.
(3) After the leasing program has been approved by the Secretary, or after eighteen months following the date of enactment of
this section, whichever first occurs, no lease shall be issued unless
it is for an area included in the approved leasing program and unless it contains provisions consistent with the approved leasing program, except that leasing shall be permitted to continue until such
program is approved and for so long thereafter as such program is
under judicial or administrative review pursuant to the provisions
of this Act.
(e) The Secretary shall review the leasing program approved
under this section at least once each year. He may revise and reapprove such program, at any time, and such revision and reapproval, except in the case of a revision which is not significant,
shall be in the same manner as originally developed.
(f) The Secretary shall, by regulation, establish procedures
for—
(1) receipt and consideration of nominations for any area
to be offered for lease or to be excluded from leasing;
(2) public notice of and participation in development of the
leasing program;
(3) review by State and local governments which may be
impacted by the proposed leasing;
(4) periodic consultation with State and local governments,
oil and gas lessees and permittees, and representatives of other
individuals or organizations engaged in activity in or on the
outer Continental Shelf, including those involved in fish and
shellfish recovery, and recreational activities; and
(5) consideration of the coastal zone management program
being developed or administered by an affected coastal State
pursuant to section 305 or section 306 of the Coastal Zone
Management Act of 1972 (16 U.S.C. 1454, 1455).
Such procedures shall be applicable to any significant revision or
reapproval of the leasing program.
(g) The Secretary may obtain from public sources, or purchase
from private sources, any survey, data, report, or other information
(including interpretations of such data, survey, report, or other information) which may be necessary to assist him in preparing any
environmental impact statement and in making other evaluations
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required by this Act. Data of a classified nature provided to the
Secretary under the provisions of this subsection shall remain confidential for such period of time as agreed to by the head of the department or agency from whom the information is requested. The
Secretary shall maintain the confidentiality of all privileged or proprietary data or information for such period of time as is provided
for in this Act, established by regulation, or agreed to by the parties.
(h) The heads of all Federal departments and agencies shall
provide the Secretary with any nonprivileged or nonproprietary information he requests to assist him in preparing the leasing program and may provide the Secretary with any privileged or proprietary information he requests to assist him in preparing the leasing program. Privileged or proprietary information provided to the
Secretary under the provisions of this subsection shall remain confidential for such period of time as agreed to by the head of the department or agency from whom the information is requested. In addition, the Secretary shall utilize the existing capabilities and resources of such Federal departments and agencies by appropriate
agreement.
[43 U.S.C. 1344]

SEC. 19. COORDINATION AND CONSULTATION WITH AFFECTED
STATES AND LOCAL GOVERNMENTS.—(a) Any Governor of any affected State or the executive of any affected local government in
such State may submit recommendations to the Secretary regarding the size, timing, or location of a proposed lease sale or with respect to a proposed development and production plan. Prior to submitting recommendations to the Secretary, the executive of any affected local government in any affected State must forward his recommendations to the Governor of such State.
(b) Such recommendations shall be submitted within sixty days
after notice of such proposed lease sale or after receipt of such development and production plan.
(c) The Secretary shall accept recommendations of the Governor and may accept recommendations of the executive of any affected local government if he determines, after having provided the
opportunity for consultation, that they provide for a reasonable balance between the national interest and the well-being of the citizens of the affected State. For purposes of this subsection, a determination of the national interest shall be based on the desirability
of obtaining oil and gas supplies in a balanced manner and on the
findings, purposes, and policies of this Act. The Secretary shall
communicate to the Governor, in writing, the reasons for his determination to accept or reject such Governor’s recommendations, or
to implement any alternative means identified in consultation with
the Governor to provide for a reasonable balance between the national interest and the well-being of the citizens of the affected
State.
(d) The Secretary’s determination that recommendations provide, or do not provide, for a reasonable balance between the national interest and the well-being of the citizens of the affected
State shall be final and shall not, alone, be a basis for invalidation
of a proposed lease sale or a proposed development and production
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Sec. 20

plan in any suit or judicial review pursuant to section 23 of this
Act, unless found to be arbitrary or capricious.
(e) The Secretary is authorized to enter into cooperative agreements with affected States for purposes which are consistent with
this Act and other applicable Federal law. Such agreements may
include, but need not be limited to, the sharing of information (in
accordance with the provisions of section 26 of this Act), the joint
utilization of available expertise, the facilitating of permitting procedures, joint planning and review, and the formation of joint surveillance and monitoring arrangements to carry out applicable Federal and State laws, regulations, and stipulations relevant to outer
Continental Shelf operations both onshore and offshore.
[43 U.S.C. 1345]

SEC. 20. ENVIRONMENTAL STUDIES.—(a)(1) The Secretary shall
conduct a study of any area or region included in any oil and gas
lease sale or other lease in order to establish information needed
for assessment and management of environmental impacts on the
human, marine, and coastal environments of the outer Continental
Shelf and the coastal areas which may be affected by oil and gas
or other mineral development in such area or region.
(2) Each study required by paragraph (1) of this subsection
shall be commenced not later than six months after the date of enactment of this section with respect to any area or region where a
lease sale has been held or announced by publication of a notice of
proposed lease sale before such date of enactment, and not later
than six months prior to the holding of a lease sale with respect
to any area or region where no lease sale has been held or scheduled before such date of enactment. In the case of an agreement
under section 8(k)(2), each study required by paragraph (1) of this
subsection shall be commenced not later than 6 months prior to
commencing negotiations for such agreement or the entering into
the memorandum of agreement as the case may be. The Secretary
may utilize information collected in any study prior to such date
of enactment.
(3) In addition to developing environmental information, any
study of an area or region, to the extent practicable, shall be designed to predict impacts on the marine biota which may result
from chronic low level pollution or large spills associated with outer
Continental Shelf production, from the introduction of drill cuttings
and drilling muds in the area, and from the laying of pipe to serve
the offshore production area, and the impacts of development offshore on the affected and coastal areas.
(b) Subsequent to the leasing and developing of any area or region, the Secretary shall conduct such additional studies to establish environmental information as he deems necessary and shall
monitor the human, marine, and coastal environments of such area
or region in a manner designed to provide time-series and data
trend information which can be used for comparison with any previously collected data for the purpose of identifying any significant
changes in the quality and productivity of such environments, for
establishing trends in the areas studied and monitored, and for designing experiments to identify the causes of such changes.
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(c) The Secretary shall, by regulation, establish procedures for
carrying out his duties under this section, and shall plan and carry
out such duties in full cooperation with affected States. To the extent that other Federal agencies have prepared environmental impact statements, are conducting studies, or are monitoring the affected human, marine, or coastal environment, the Secretary may
utilize the information derived therefrom in lieu of directly conducting such activities. The Secretary may also utilize information
obtained from any State of local government, or from any person,
for the purposes of this section. For the purpose of carrying out his
responsibilities under this section, the Secretary may by agreement
utilize, with or without reimbursement, the services, personnel, or
facilities of any Federal, State, or local government agency.
(d) The Secretary shall consider available relevant environmental information in making decisions (including those relating to
exploration plans, drilling permits, and development and production plans), in developing appropriate regulations and lease conditions, and in issuing operating orders.
(e) As soon as practicable after the end of every 3 fiscal years,
the Secretary shall submit to the Congress and make available to
the general public an assessment of the cumulative effect of activities conducted under this Act on the human, marine, and coastal
environments.
(f) In executing his responsibilities under this section, the Secretary shall, to the maximum extent practicable, enter into appropriate arrangements to utilize on a reimbursable basis the capabilities of the Department of Commerce. In carrying out such arrangements, the Secretary of Commerce is authorized to enter into contract or grants with any person, organization, or entity with funds
appropriated to the Secretary of the Interior pursuant to this Act.
[43 U.S.C. 1346]

SEC. 21. SAFETY REGULATIONS.—(a) Upon the date of enactment of this section, the Secretary and the Secretary of the Department in which the Coast Guard is operating shall, in consultation
with each other and, as appropriate, with the heads of other Federal departments and agencies, promptly commence a joint study
of the adequacy of existing safety and health regulations and of the
technology, equipment, and techniques available for the exploration, development, and production of the minerals of the outer
Continental Shelf. The results of such study shall be submitted to
the President who shall submit a plan to the Congress of his proposals to promote safety and health in the exploration, development, and production of the minerals of the outer Continental
Shelf.
(b) In exercising their respective responsibilities for the artificial islands, installations, and other devices referred to in section
4(a)(1) of this Act, the Secretary, and the Secretary of the Department in which the Coast Guard is operating, shall require, on all
new drilling and production operations and, wherever practicable,
on existing operations, the use of the best available and safest technologies which the Secretary determines to be economically feasible, wherever failure of equipment would have a significant effect
on safety, health, or the environment, except where the Secretary
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Sec. 22

determines that the incremental benefits are clearly insufficient to
justify the incremental costs of utilizing such technologies.
(c) The Secretary of the Department in which the Coast Guard
is operating shall promulgate regulations or standards applying to
unregulated hazardous working conditions related to activities on
the Outer Continental Shelf when he determines such regulations
or standards are necessary. The Secretary of the Department in
which the Coast Guard is operating may from time to time modify
any regulations, interim or final, dealing with hazardous working
conditions on the Outer Continental Shelf.
(d) Nothing in this Act shall affect the authority provided by
law to the Secretary of Labor for the protection of occupational
safety and health, the authority provided by law to the Administrator of the Environmental Protection Agency for the protection of
the environment, or the authority provided by law to the Secretary
of Transportation with respect to pipeline safety.
(e) The Secretary of Commerce, in cooperation with the Secretary of the Department in which the Coast Guard is operating,
and the Director of the National Institute of Occupational Safety
and Health, shall conduct studies of underwater diving techniques
and equipment suitable for protection of human safety and improvement of diver performance. Such studies shall include, but
need not be limited to, decompression and excursion table development and improvement and all aspects of diver physiological restraints and protective gear for exposure to hostile environments.
(f)(1) In administering the provisions of this section, the Secretary shall consult and coordinate with the heads of other appropriate Federal departments and agencies for purposes of assuring
that, to the maximum extent practicable, inconsistent or duplicative requirements are not imposed.
(2) The Secretary shall make available to any interested person
a compilation of all safety and other regulations which are prepared and promulgated by any Federal department or agency and
applicable to activities on the Outer Continental Shelf. Such compilation shall be revised and updated annually.
[43 U.S.C. 1347]

SEC. 22. ENFORCEMENT.—(a) The Secretary, the Secretary of
the Department in which the Coast Guard is operating, and the
Secretary of the Army shall enforce safety and environmental regulations promulgated pursuant to this Act. Each such Federal department may by agreement utilize, with or without reimbursement, the services, personnel, or facilities of other Federal departments and agencies for the enforcement of their respective regulations.
(b) It shall be the duty of any holder of a lease or permit under
this Act to—
(1) maintain all places of employment within the lease
area or within the area covered by such permit in compliance
with occupational safety and health standards and, in addition,
free from recognized hazards to employees of the lease holder
or permit holder or of any contractor or subcontractor operating within such lease area or within the area covered by
such permit on the outer Continental Shelf;
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(2) maintain all operations within such lease area or within the area covered by such permit in compliance with regulations intended to protect persons, property, and the environment on the outer Continental Shelf; and
(3) allow prompt access, at the site of any operation subject
to safety regulations, to any inspector, and to provide such documents and records which are pertinent to occupational or
public health, safety, or environmental protection, as may be
requested.
(c) The Secretary and the Secretary of the Department in
which the Coast Guard is operating shall individually, or jointly if
they so agree, promulgate regulations to provide for—
(1) scheduled onsite inspection, at least once a year, of
each facility on the outer Continental Shelf which is subject to
any environmental or safety regulation promulgated pursuant
to this Act, which inspection shall include all safety equipment
designed to prevent or ameliorate blowouts, fires, spillages, or
other major accidents; and
(2) periodic onsite inspection without advance notice to the
operator of such facility to assure compliance with such environmental or safety regulations.
(d)(1) The Secretary or the Secretary of the Department in
which the Coast Guard is operating shall make an investigation
and public report on each major fire and each major oil spillage occurring as a result of operations conducted pursuant to this Act,
and may, in his discretion, make an investigation and report of
lesser oil spillages. For purposes of this subsection, a major oil
spillage is any spillage in one instance of more than two hundred
barrels of oil during a period of thirty days. All holders of leases
or permits issued or maintained under this Act shall cooperate
with the appropriate Secretary in the course of any such investigation.
(2) The Secretary or the Secretary of the Department in which
the Coast Guard is operating shall make an investigation and public report on any death or serious injury occurring as a result of
operations conducted pursuant to this Act, and may, in his discretion, make an investigation and report of any injury. For purposes
of this subsection, a serious injury is one resulting in substantial
impairment of any bodily unit or function. All holders of leases or
permits issued or maintained under this Act shall cooperate with
the appropriate Secretary in the course of any such investigation.
(e) The Secretary, or, in the case of occupational safety and
health, the Secretary of the Department in which the Coast Guard
is operating, may review any allegation from any person of the existence of a violation of a safety regulation issued under this Act.
(f) In any investigation conducted pursuant to this section, the
Secretary or the Secretary of the Department in which the Coast
Guard is operating shall have power to summon witnesses and to
require the production of books, papers, documents, and any other
evidence. Attendance of witnesses or the production of books, papers, documents, or any other evidence shall be compelled by a
similar process, as in the district courts of the United States. Such
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Secretary, or his designee, shall administer all necessary oaths to
any witnesses summoned before such investigation.
[43 U.S.C. 1348]

SEC. 23. CITIZEN SUITS, COURT JURISDICTION, AND JUDICIAL
REVIEW.—(a)(1) Except as provided in this section, any person having a valid legal interest which is or may be adversely affected may
commence a civil action on his own behalf to compel compliance
with this Act against any person, including the United States, and
any other government instrumentality or agency (to the extent permitted by the eleventh amendment to the Constitution) for any alleged violation of any provision of this Act or any regulation promulgated under this Act, or of the terms of any permit or lease
issued by the Secretary under this Act.
(2) Except as provided in paragraph (3) of this subsection, no
action may be commenced under subsection (a)(1) of this section—
(A) prior to sixty days after the plaintiff has given notice
of the alleged violation, in writing under oath, to the Secretary
and any other appropriate Federal official, to the State in
which the violation allegedly occurred or is occurring, and to
any alleged violator; or
(B) if the Attorney General has commenced and is diligently prosecuting a civil action in a court of the United States
or a State with respect to such matter, but in any such action
in a court of the United States any person having a legal interest which is or may be adversely affected may intervene as a
matter of right.
(3) An action may be brought under this subsection immediately after notification of the alleged violation in any case in
which the alleged violation constitutes an imminent threat to the
public health or safety or would immediately affect a legal interest
of the plaintiff.
(4) In any action commenced pursuant to this section, the Attorney General, upon the request of the Secretary or any other appropriate Federal official, may intervene as a matter of right.
(5) A court, in issuing any final order in any action brought
pursuant to subsection (a)(1) or subsection (c) of this section, may
award costs of litigation, including reasonable attorney and expert
witness fees, to any party, whenever such court determines such
award is appropriate. The court may, if a temporary restraining
order or preliminary injunction is sought, require the filing of a
bond or equivalent security in a sufficient amount to compensate
for any loss or damage suffered, in accordance with the Federal
Rules of Civil Procedure.
(6) Except as provided in subsection (c) of this section, all suits
challenging actions or decisions allegedly in violation of, or seeking
enforcement of, the provisions of this Act, or any regulation promulgated under this Act, or the terms of any permit or lease issued
by the Secretary under this Act, shall be undertaken in accordance
with the procedures described in this subsection. Nothing in this
section shall restrict any right which any person or class of persons
may have under any other Act or common law to seek appropriate
relief.
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(b)(1) Except as provided in subsection (c) of this section, the
district courts of the United States shall have jurisdiction of cases
and controversies arising out of, or in connection with (A) any operation conducted on the outer Continental Shelf which involves exploration, development, or production of the minerals, of the subsoil
and seabed of the outer Continental Shelf, or which involves rights
to such minerals, or (B) the cancellation, suspension, or termination of a lease or permit under this Act. Proceedings with respect
to any such case or controversy may be instituted in the judicial
district in which any defendant resides or may be found, or in the
judicial district of the State nearest the place the cause of action
arose.
(2) Any resident of the United States who is injured in any
manner through the failure of any operator to comply with any
rule, regulation, order, or permit issued pursuant to this Act may
bring an action for damages (including reasonable attorney and expert witness fees) only in the judicial district having jurisdiction
under paragraph (1) of this subsection.
(c)(1) Any action of the Secretary to approve a leasing program
pursuant to section 18 of this Act shall be subject to judicial review
only in the United States Court of Appeal for the District of Columbia.
(2) Any action of the Secretary to approve, require modification
of, or disapprove any exploration plan or any development and production plan under this Act shall be subject to judicial review only
in a United States court of appeals for a circuit in which an affected State is located.
(3) The judicial review specified in paragraphs (1) and (2) of
this subsection shall be available only to a person who (A) participated in the administrative proceedings related to the actions specified in such paragraphs, (B) is adversely affected or aggrieved by
such action, (C) files a petition for review of the Secretary’s action
within sixty days after the date of such action, and (D) promptly
transmits copies of the petition to the Secretary and to the Attorney General.
(4) Any action of the Secretary specified in paragraph (1) or (2)
shall only be subject to review pursuant to the provisions of this
subsection, and shall be specifically excluded from citizen suits
which are permitted pursuant to subsection (a) of this section.
(5) The Secretary shall file in the appropriate court the record
of any public hearings required by this Act and any additional information upon which the Secretary based his decision, as required
by section 2112 of title 28, United States Code. Specific objections
to the action of the Secretary shall be considered by the court only
if the issues upon which such objections are based have been submitted to the Secretary during the administrative proceedings related to the actions involved.
(6) The court of appeals conducting a proceeding pursuant to
this subsection shall consider the matter under review solely on the
record made before the Secretary. The findings of the Secretary, if
supported by substantial evidence on the record considered as a
whole, shall be conclusive. The court may affirm, vacate, or modify
any order or decision or may remand the proceedings to the Secretary for such further action as it may direct.
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(7) Upon the filing of the record with the court, pursuant to
paragraph (5), the jurisdiction of the court shall be exclusive and
its judgment shall be final, except that such judgment shall be subject to review by the Supreme Court of the United States upon writ
of certiorari.
[43 U.S.C. 1349]

SEC. 24. REMEDIES AND PENALTIES.—(a) At the request of the
Secretary, the Secretary of the Army, or the Secretary of the Department in which the Coast Guard is operating, the Attorney General or a United States attorney shall institute a civil action in the
district court of the United States for the district in which the affected operation is located for a temporary restraining order, injunction, or other appropriate remedy to enforce any provision of
this Act, any regulation or order issued under this Act, or any term
of a lease, license, or permit issued pursuant to this Act.
(b)(1) Except as provided in paragraph (2), if any person fails
to comply with any provision of this Act, or any term of a lease,
or permit issued pursuant to this Act, or any regulation or order
issued under this Act, after notice of such failure and expiration of
any reasonable period allowed for corrective action, such person
shall be liable for a civil penalty of not more than $20,000 for each
day of the continuance of such failure. The Secretary may assess,
collect, and compromise any such penalty. No penalty shall be assessed until the person charged with a violation has been given an
opportunity for a hearing. The Secretary shall, by regulation at
least every 3 years, adjust the penalty specified in this paragraph
to reflect any increases in the Consumer Price Index (all items,
United States city average) as prepared by the Department of
Labor.
(2) If a failure described in paragraph (1) constitutes or constituted a threat of serious, irreparable, or immediate harm or
damage to life (including fish and other aquatic life), property, any
mineral deposit, or the marine, coastal, or human environment, a
civil penalty may be assessed without regard to the requirement of
expiration of a period allowed for corrective action.
(c) Any person who knowingly and willfully (1) violates any
provision of this Act, any term of a lease, license, or permit issued
pursuant to this Act, or any regulations or order issued under the
authority of this Act designed to protect health, safety, or the environment or conserve natural resources, (2) makes any false statement, representation, or certification in any application, record, report, or other document filed or required to be maintained under
this Act, (3) falsifies, tampers with, or renders inaccurate any monitoring device or method of record required to be maintained under
this Act, or (4) reveals any data or information required to be kept
confidential by this Act shall, upon conviction, be punished by a
fine of not more than $100,000, or by imprisonment for not more
than ten years, or both. Each day that a violation under clause (1)
of this subsection continues, or each day that any monitoring devise or data recorder remains inoperative or inaccurate because of
any activity described in clause (3) of this subsection, shall constitute a separate violation.
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(d) Whenever a corporation or other entity is subject to prosecution under subsection (c) of this section, any officer or agent of
such corporation or entity who knowingly and willfully authorized,
ordered, or carried out the proscribed activity shall be subject to
the same fines or imprisonment, or both, as provided for under subsection (c) of this section.
(e) The remedies and penalties prescribed in this Act shall be
concurrent and cumulative and the exercise of one shall not preclude the exercise of the others. Further, the remedies and penalties prescribed in this Act shall be in addition to any other remedies and penalties afforded by any other law or regulation.
[43 U.S.C. 1350]

SEC. 25. OIL AND GAS DEVELOPMENT AND PRODUCTION.—(a)(1)
Prior to development and production pursuant to an oil and gas
lease issued after the date of enactment of this section in any area
of the outer Continental Shelf, other than the Gulf of Mexico, or
issued or maintained prior to such date of enactment in any area
of the outer Continental Shelf, other than the Gulf of Mexico, with
respect to which no oil or gas has been discovered in paying quantities prior to such date of enactment, the lessee shall submit a development and production plan (hereinafter in this section referred
to as a ‘‘plan’’) to the Secretary, for approval pursuant to this section.
(2) A plan shall be accompanied by a statement describing all
facilities and operations, other than those on the outer Continental
Shelf, proposed by the lessee and known by him (whether or not
owned or operated by such lessee) which will be constructed or utilized in the development and production of oil or gas from the lease
area, including the location and site of such facilities and operations, the land, labor, material, and energy requirements associated with such facilities and operations, and all environmental and
safety safeguards to be implemented.
(3) Except for any privileged or proprietary information (as
such term is defined in regulations issued by the Secretary), the
Secretary, within ten days after receipt of a plan and statement,
shall (A) submit such plan and statement to the Governor of any
affected State, and, upon request, to the executive of any affected
local government, and (B) make such plan and statement available
to any appropriate interstate regional entity and the public.
(b) After the date of enactment of this section, no oil and gas
lease may be issued pursuant to this Act in any region of the outer
Continental Shelf, other than the Gulf of Mexico, unless such lease
requires that development and production activities be carried out
in accordance with a plan which complies with the requirements of
this section.
(c) A plan may apply to more than one oil and gas lease, and
shall set forth, in the degree of detail established by regulations
issued by the Secretary—
(1) the specific work to be performed;
(2) a description of all facilities and operations located on
the outer Continental Self which are proposed by the lessee of
known by him (whether or not owned or operated by such lessee) to be directly related to proposed development, including
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Sec. 25

the location and size of such facilities and operations, and the
land, labor, material, and energy requirements associated with
such facilities and operations;
(3) the environmental safeguards to be implemented on the
outer Continental Shelf and how much safeguards are to be
implemented;
(4) all safety standards to be met and how such standards
are to be met;
(5) an expected rate of development and production and a
time schedule for performance; and
(6) such other relevant information as the Secretary may
by regulation require.
(d) The Secretary shall not grant any license or permit for any
activity described in detail in a plan affecting any land use or
water use in the coastal zone of a State with a coastal zone management program approved pursuant to section 306 of the Coastal
Zone Management Act of 1972 (16 U.S.C. 1455), unless the State
concurs or is conclusively presumed to concur with the consistency
certification accompanying such plan pursuant to section
307(c)(3)(B) (i) or (ii) of such Act, or the Secretary of Commerce
makes the finding authorized by section 307(c)(3)(B)(iii) of such
Act.
(e)(1) At least once the Secretary shall declare the approval of
a development and production plan in any area or region (as defined by the Secretary) of the outer Continental Shelf, other than
the Gulf of Mexico, to be a major Federal action.
(2) The Secretary may require lessees of tracts for which development and production plans have not been approved, to submit
preliminary or final plans for their leases, prior to or immediately
after a determination by the Secretary that the procedures under
the National Environmental Policy Act of 1969 shall commence.
(f) If approval of a development and production plan is found
to be a major Federal action, the Secretary shall transmit the draft
environmental impact statement to the Governor of any affected
State, and upon request, to the executive of any local government,
and shall make such draft available to any appropriate interstate
regional entity and the public.
(g) If approval of a development and production plan is not
found to be a major Federal action, the Governor of any affected
State and the executive of any affected local government shall have
sixty days from the date of receipt of the plan from the Secretary
to submit comments and recommendations. Prior to submitting recommendations to the Secretary, the executive of any affected local
government must forward his recommendations to the Governor of
his State. Such comments and recommendations shall be made
available to the public upon request. In addition, any interested
person may submit comments and recommendations.
(h)(1) After reviewing the record of any public hearing held
with respect to the approval of a plan pursuant to the National Environmental Policy Act of 1969 or the comments and recommendations submitted under subsection (g) of this section, the Secretary
shall, within sixty days after the release of the final environmental
impact statement prepared pursuant to the National Environmental Policy Act of 1969 in accordance with subsection (e) of this
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section, or sixty days after the period provided for comment under
subsection (g) of this section, approve, disapprove, or require modifications of the plan. The Secretary shall require modification of a
plan if he determines that the lessee has failed to make adequate
provision in such plan for safe operations on the lease area or for
protection of the human, marine, or coastal environment, including
compliance with the regulations prescribed by the Secretary pursuant to paragraph (8) of section 5(a) of this Act. Any modification
required by the Secretary which involves activities for which a Federal license or permit is required and which affects any land use
or water use in the coastal zone of a State with a coastal zone management program approved pursuant to section 306 of the Coastal
Zone Management Act of 1972 (16 U.S.C. 1455) must receive concurrence by such State with respect to the consistency certification
accompanying such plan pursuant to section 307(c)(3)(B) (i) or (ii)
of such Act unless the Secretary of Commerce makes the finding
authorized by section 307(c)(3)(B)(iii) of such Act. The Secretary
shall disapprove a plan—
(A) if the lessee fails to demonstrate that he can comply
with the requirements of this Act or other applicable Federal
law, including the regulations prescribed by the Secretary pursuant to paragraph (8) of section 5(a) of this Act;
(B) if any of the activities described in detail in the plan
for which a Federal license or permit is required and which affects any land use or water use in the coastal zone of a State
with a coastal zone management program approved pursuant
to section 306 of the Coastal Zone Management Act of 1972 (16
U.S.C. 1455) do not receive concurrence by such State with respect to the consistency certification accompanying such plan
pursuant to section 307(c)(3)(B) (i) or (ii) of such Act and the
Secretary of Commerce does not make the finding authorized
by section 307(c)(3)(B)(iii) of such Act;
(C) if operations threaten national security or national defense; or
(D) if the Secretary determines, because of exceptional geological conditions in the lease areas, exceptional resource values in the marine or coastal environment, or other exceptional
circumstances, that (i) implementation of the plan would probably cause serious harm or damage to life (including fish and
other aquatic life), to property, to any mineral deposits (in
areas leased or not leased), to the national security or defense,
or to the marine, coastal or human environments, (ii) the
threat of harm or damage will not disappear or decrease to an
acceptable extent within a reasonable period of time, and (iii)
the advantages of disapproving the plan outweigh the advantages of development and production.
(2)(A) If a plan is disapproved—
(i) under subparagraph (A) of paragraph (1); or
(ii) under subparagraph (B) of paragraph (1) with respect
to a lease issued after approval of a coastal zone management
program pursuant to the Coastal Zone Management Act of
1972 (16 U.S.C. 1455),
the lessee shall not be entitled to compensation because of such disapproval.
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Sec. 25

(B) If a plan is disapproved—
(i) under subparagraph (C) or (D) of paragraph (1); or
(ii) under subparagraph (B) of paragraph (1) with respect
to a lease issued before approval of a coastal zone management
program pursuant to the Coastal Zone Management Act of
1972, and such approval occurs after the lessee has submitted
a plan to the Secretary,
the term of the lease shall be duly extended, and at any time within five years after such disapproval, the lessee may reapply for approval of the same or a modified plan, and the Secretary shall approve, disapprove, or require modifications of such plan in accordance with this subsection.
(C) Upon expiration of the five-year period described in subparagraph (B) of this paragraph, or, in the Secretary’s discretion,
at an earlier time upon request of a lessee, if the Secretary has not
approved a plan, the Secretary shall cancel the lease and the lessee
shall be entitled to receive compensation in accordance with section
5(a)(2)(C) of this Act. The Secretary may, at any time within the
five-year period described in subparagraph (B) of this paragraph,
require the lessee to submit a development and production plan for
approval, disapproval, or modification. If the lessee fails to submit
a required plan expeditiously and in good faith, the Secretary shall
find that the lessee has not been duly diligent in pursuing his obligations under the lease, and shall immediately initiate procedures
to cancel such lease, without compenation, under the provisions of
section 5(c) of this Act.
(3) The Secretary shall, from time to time, review each plan
approved under this section. Such review shall be based upon
changes in available information and other onshore or offshore conditions affecting or impacted by development and production pursuant to such plan. If the review indicates that the plan should be
revised to meet the requirements of this subsection, the Secretary
shall require such revision.
(i) The Secretary may approve any revision of an approved
plan proposed by the lessee if he determines that such revision will
lead to greater recovery of oil and natural gas, improve the efficiency, safety and environmental protection of the recovery operation, is the only means available to avoid substantial economic
hardship to the lessee, or is otherwise not inconsistent with the
provisions of this Act, to the extent such revision is consistent with
protection of the human, marine, and coastal environments. Any
revision of an approved plan which the Secretary determines is significant shall be reviewed in accordance with subsections (d)
through (f) of this section.
(j) Whenever the owner of any lease fails to submit a plan in
accordance with regulations issued under this section, or fails to
comply with an approved plan, the lease may be canceled in accordance with sections 5 (c) and (d). Termination of a lease because of
failure to comply with an approved plan, including required modifications or revisions, shall not entitle a lessee to any compensation.
(k) If any development and production plan submitted to the
Secretary pursuant to this section provides for the production and
transportation of natural gas, the lessee shall contemporaneously
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192

submit to the Federal Energy Regulatory Commission that portion
of such plan which relates to production of natural gas and the facilities for transportation of natural gas. The Secretary and the
Federal Energy Regulatory Commission shall agree as to which of
them shall prepare an environmental impact statement pursuant
to the National Environmental Policy Act of 1969 applicable to
such portion of such plan, or conduct studies as to the effect on the
environment of implementing it. Thereafter, the findings and recommendations by the agency preparing such environmental impact
statement or conducting such studies pursuant to such agreement
shall be adopted by the other agency, and such other agency shall
not independently prepare another environmental impact statement or duplicate such studies with respect to such portion of such
plan, but the Federal Energy Regulatory Commission, in connection with its review of an application for a certificate of public convenience and necessity applicable to such transportation facilities
pursuant to section 7 of the Natural Gas Act (15 U.S.C. 717), may
prepare such environmental studies or statement relevant to certification of such transportation facilities as have not been covered
by an environmental impact statement or studies prepared by the
Secretary. The Secretary, in consultation with the Federal Energy
Regulatory Commission, shall promulgate rules to implement this
subsection, but the Federal Energy Regulatory Commission shall
retain sole authority with respect to rules and procedures applicable to the filing of any application with the Commission and to all
aspects of the Commission’s review of, and action on, any such application.
(l) The Secretary may require the provisions of this section to
apply to an oil and gas lease issued or maintained under this Act,
which is located in that area of the Gulf of Mexico which is adjacent to the State of Florida, as determined pursuant to section
4(a)(2) of this Act.
[43 U.S.C. 1351]

SEC. 26. OUTER CONTINENTAL SHELF OIL AND GAS INFORMAPROGRAM.—(a)(1)(A) Any lessee or permittee conducting any
exploration for, or development or production of, oil or gas pursuant to this Act shall provide the Secretary access to all data and
information (including processed, analyzed, and interpreted information) obtained from such activity and shall provide copies of
such data and information as the Secretary may request. Such data
and information shall be provided in accordance with regulations
which the Secretary shall prescribed.
(B) If an interpretation provided pursuant to subparagraph (A)
of this paragraph is made in good faith by the lessee or permittee,
such lessee or permittee shall not be held responsible for any consequence of the use of or reliance upon such interpretation.
(C) Whenever any data and information is provided to the Secretary, pursuant to subparagraph (A) of this paragraph—
(i) by a lessee, in the form and manner of processing which
is utilized by such lessee in the normal conduct of his business,
the Secretary shall pay the reasonable cost of reproducing such
data and information;

TION

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Sec. 26

(ii) by a lessee, in such other form and manner of processing as the Secretary may request, the Secretary shall pay
the reasonable cost of processing and reproducing such data
and information;
(iii) by a permittee, in the form and manner of processing
which is utilized by such permittee in the normal conduct of
his business, the Secretary shall pay such permittee the reasonable cost of reproducing such data and information for the
Secretary and shall pay at the lowest rate available to any purchaser for processing such data and information the costs attributable to such processing; and
(iv) by the permittee, in such other form and manner of
processing as the Secretary may request, the Secretary shall
pay such permittee the reasonable cost of processing and reproducing such data and information for the Secretary,
pursuant to such regulations as he may prescribe.
(2) Each Federal department and agency shall provide the Secretary with any data obtained by such Federal department or agency pursuant to section 11 of this Act, and any other information
which may be necessary or useful to assist him in carrying out the
provisions of this Act.
(b)(1) Data and information provided to the Secretary pursuant
to subsection (a) of this section shall be processed, analyzed, and
interpreted by the Secretary for purposes of carrying out his duties
under this Act.
(2) As soon as practicable after information provided to the
Secretary pursuant to subsection (a) of this section is processed,
analyzed, and interpreted, the Secretary shall make available to
the affected States, and upon request, to any affected local government, a summary of data designed to assist them in planning for
the onshore impacts of possible oil and gas development and production. Such summary shall include estimates of (A) the oil and
gas reserves in areas leased or to be leased, (B) the size and timing
of development if and when oil or gas, or both, is found, (C) the location of pipelines, and (D) the general location and nature of onshore facilities.
(c) The Secretary shall prescribe regulations to (1) assure that
the confidentiality of privileged or proprietary information received
by the Secretary under this section will be maintained, and (2) set
forth the time periods and conditions which shall be applicable to
the release of such information. Such regulations shall include a
provision that no such information will be transmitted to any affected State unless the lessee, or the permittee and all persons to
whom such permittee has sold such information under promise of
confidentiality, agree to such transmittal.
(d)(1) The Secretary shall transmit to any affected State—
(A) an index, and upon request copies of, all relevant actual or proposed programs, plans, reports, environmental impact statements, tract nominations (including negative nominations) and other lease sale information, any similar type of relevant information, and all modifications and revisions thereof
and comments thereon, prepared or obtained by the Secretary
pursuant to this Act, but no information transmitted by the
Secretary under this subsection shall identify any particular
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194

tract with the name or names of any particular party so as not
to compromise the competitive position of any party or parties
participating in the nominations;
(B)(i) the summary of data prepared by the Secretary pursuant to subsection (b)(2) of this section, and (ii) any other
processed, analyzed, or interpreted data prepared by the Secretary pursuant to subsection (b)(1) of this section, unless the
Secretary determines that transmittal of such data prepared
pursuant to such subsection (b)(1) would unduly damage the
competitive position of the lessee or permittee who provided
the Secretary with the information which the Secretary had
processed, analyzed, or interpreted; and
(C) any relevant information received by the Secretary
pursuant to subsection (a) of this section, subject to any applicable requirements as to confidentiality which are set forth in
regulations prescribed under subsection (c) of this section.
(2) Notwithstanding the provisions of any regulation required
pursuant to the second sentence of subsection (c) of this section, the
Governor of any affected State may designate an appropriate State
official to inspect, at a regional location which the Secretary shall
designate, any privileged information received by the Secretary regarding any activity adjacent to such State, except that no such inspection shall take place prior to the sale of a lease covering the
area in which such activity was conducted. Knowledge obtained by
such State during such inspection shall be subject to applicable requirements as to confidentiality which are set forth in regulations
prescribed under subsection (c) of this section.
(e) Prior to transmitting any privileged information to any
State, or granting such State access to such information, the Secretary shall enter into a written agreement with the Governor of
such State in which such State agrees, as a condition precedent to
receiving or being granted access to such information, to waive the
defenses set forth in subsection (f)(2) of this section, and to hold the
United States harmless from any violations of the regulations prescribed pursuant to subsection (c) that the State or its employees
may commit.
(f)(1) Whenever any employee of the Federal Government or of
any State reveals information in violation of the regulations prescribed pursuant to subsection (c) of this section, the lessee or permittee who supplied such information to the Secretary or to any
other Federal official, and any person to whom such lessee or permittee has sold such information under promise of confidentiality,
may commence a civil action for damages in the appropriate district court of the United States against the Federal Government or
such State, as the case may be.
(2) In any action commenced against the Federal Government
or a State pursuant to paragraph (1) of this subsection, the Federal
Government or such State, as the case may be, may not raise as
a defense (A) any claim of sovereign immunity, or (B) any claim
that the employee who revealed the privileged information which
is the basis of such suit was acting outside the scope of his employment in revealing such information.
(g) Any provision of State or local law which provides for public
access to any privileged information received or obtained by any
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OUTER CONTINENTAL SHELF LANDS ACT

Sec. 27

person pursuant to this Act is expressly preempted by the provisions of this section, to the extent that it applies to such information.
(h) If the Secretary finds that any State cannot or does not
comply with the regulations issued under subsection (c) of this section, he shall thereafter withhold transmittal and deny inspection
of privileged information to such State until he finds that such
State can and will comply with such regulations.
[43 U.S.C. 1352]

SEC. 27. FEDERAL PURCHASE AND DISPOSITION OF OIL AND
GAS.—(a)(1) Except as may be necessary to comply with the provisions of sections 6 and 7 of this Act, all royalties or net profit
shares, or both accruing to the United States under any oil and gas
lease issued or maintained in accordance with this Act, shall, on
demand of the Secretary, be paid in oil or gas.
(2) The United States shall have the right to purchase not to
exceed 162⁄3 per centum by volume of the oil and gas produced pursuant to a lease issued or maintained in accordance with this Act,
at the regulated price, or, if no regulated price applies, at the fair
market value at the well head of the oil and gas saved, removed,
or sold, except that any oil or gas obtained by the United States
as royalty or net profit share shall be credited against the amount
that may be purchased under this subsection.
(3) Title to any royalty, net profit share, or purchased oil or gas
may be transferred, upon request, by the Secretary to the Secretary
of Defense, to the Administrator of the General Services Administration, or to the Secretary of Energy, for disposal within the Federal Government.
(b)(1) The Secretary, except as provided in this subsection, may
offer to the public and sell by competitive bidding for not more
than its regulated price, or, if no regulated price applies, not less
than its fair market value, any part of the oil (A) obtained by the
United States pursuant to any lease as royalty or net profit share,
or (B) purchased by the United States pursuant to subsection (a)(2)
of this section.
(2) Whenever, after consultation with the Secretary of Energy,
the Secretary determines that small refiners do not have access to
adequate supplies of oil at equitable prices, the Secretary may dispose of any oil which is taken as a royalty or net profit share accruing or reserved to the United States pursuant to any lease issued
or maintained under this Act, or purchased by the United States
pursuant to subsection (a)(2) of this section, by conducting a lottery
for the sale of such oil, or may equitably allocate such oil among
the competitors for the purchase of such oil, at the regulated price,
or if no regulated price applies, at its fair market value. The Secretary shall limit participation in any allocation or lottery sale to
assure such access and shall publish notice of such allocation or
sale, and the terms thereof, at least thirty days in advance. Such
notice shall include qualifications for participation, the amount of
oil to be sold, and any limitation in the amount of oil which any
participant may be entitled to purchase.
(3) The Secretary may only sell or otherwise dispose of oil described in paragraph (1) of this subsection in accordance with any
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provision of law, or regulations issued in accordance with such provisions, which provide for the Secretary of Energy to allocate,
transfer, exchange, or sell oil in amounts or at prices determined
by such provision of law or regulations.
(c)(1) Except as provided in paragraph (2) of this subsection,
the Secretary, pursuant to such terms as he determines, may offer
to the public and sell by competitive bidding for not more than its
regulated price, or, if no regulated price applies, not less than its
fair market value any part of the gas (A) obtained by the United
States pursuant to a lease as royalty or net profit share, or (B) purchased by the United States pursuant to subsection (a)(2) of this
section.
(2) Whenever, after consultation with and advice from the Secretary of Energy, the Federal Energy Regulatory Commission determines that an emergency shortage of natural gas is threatening
to cause severe economic or social dislocation in any region of the
United States and that such region can be serviced in a practical,
feasible, and efficient manner by royalty, net profit share, or purchased gas obtained pursuant to the provisions of this section, the
Secretary of the Interior may allocate or conduct a lottery for the
sale of such gas, and shall limit participation in any allocation or
lottery sale of such gas to any person servicing such region, but he
shall not sell any such gas for more than its regulated price, or,
if no regulated price applies, less than its fair market value. Prior
to selling or allocating any gas pursuant to this subsection, the Secretary shall consult with the Federal Energy Regulatory Commission.
(d) The lessee shall take any Federal oil or gas for which no
acceptable bids are received, as determined by the Secretary, and
which is not transferred pursuant to subsection (a)(3) of this section, and shall pay to the United States a cash amount equal to
the regulated price, or, if no regulated price applies, the fair market value of the oil or gas so obtained.
(e) As used in this section—
(1) the term ‘‘regulated price’’ means the highest price—
(A) at which oil may be sold pursuant to the Emergency Petroleum Allocation Act of 1973 and any rule or
order issued under such Act;
(B) at which natural gas Act, any other Act, regulations governing natural gas pricing, or any rule or order
issued under any such Act or any such regulations; or
(C) at which either Federal oil or gas may be sold
under any other provision of law or rule or order thereunder which sets a price (or manner for determining a
price) for oil or gas; and
(2) the term ‘‘small refiner’’ has the meaning given such
term by Small Business Administration Standards 128.3–8 (d)
and (g), as in effect on the date of enactment of this section or
as thereafter revised or amended.
(f) Nothing in this section shall prohit the right of the United
States to purchase any oil or gas produced on the outer Continental
Shelf as provided by section 12(b) of this Act.
[43 U.S.C. 1353]
December 29, 2000

MINERAL LANDS LEASING ACT OF FEBRUARY 25, 1920
(Mineral Leasing Act of 1920)
And Subsequent Amendments
Including the Federal Onshore Oil and Gas
Leasing Reform Act of 1987

Title of Act

Page

MINERAL LANDS LEASING ACT OF FEBRUARY 25. 1920. . . . . . . . . .
Sec. 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secs. 2 through 8 . . . . . . . . . . . . . . . . . Coal . . . . . . . . . . . . . . . . . . . . . . . .
Secs. 9 through 12 . . . . . . . . . . . . . . . . Phosphates . . . . . . . . . . . . . . . . . . .
Secs. 13 through 20. . . . . . . . . . . . . . . .Oil and Gas . . . . . . . . . . . . . . . . . .
Sec. 21 . . . . . . . . . . . . . . . . . . . . . . . . . . Oil Shale . . . . . . . . . . . . . . . . . . . .
Sec. 22. . . . . . . . . . . . . . . . . . . . . . . . . . .Alaska Oil Proviso . . . . . . . . . . . .
Sec. 23 through 25 . . . . . . . . . . . . . . . . Sodium . . . . . . . . . . . . . . . . . . . . .
Secs. 26 through 38 . . . . . . . . . . . . . . . General Provisions
Applicable to Coal, Phosphate, Sodium, Oil,
Oil Shale and Gas Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

l
1
1
4
5
10
11
11

ACT OF APRIL 30, 1926. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending section 27 of the Mineral Leasing Act

18

ACT OF FEBRUARY 7, 1927. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
POTASSIUM ACT OF FEBRUARY 7, 1927
promoting mining of potash on public domain.
Excerpts

19

ACT OF DECEMBER 11, 1928 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amending sections 23 and 24 of Mineral Leasing Act

20

ACT OF JUNE 27, 1930 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
repayment of excess lease rents and royalties

21

ACT OF JULY 3, 1930 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending sections 17 and 27 of Mineral Leasing Act

22

ACT OF MARCH 4, 1931 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending sections 17 and 27 of Mineral Leasing Act

22

ACT OF FEBRUARY 9, 1933 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
adding section 39 regarding suspension of operations/
production and suspension of rental payments

28

ACT OF JUNE 16, 1934 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending Mineral Leasing Act regarding oil- or gasprospecting permits and leases

29

13

Title of Act

Page

ACT OF AUGUST 21, 1935 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending Mineral Leasing Act secs. 13, 14, 17, and 28

30

ACT OF JULY 8, 1940 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
relating to rentals in certain oil and gas leases

37

ACT OF JULY 29, 1942. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
granting preference rights to certain oil and gas
leases

37

ACT OF DECEMBER 24, 1942. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
encouraging discovery of oil and gas on public domain
during continuance of present war

38

ACT OF NOVEMBER 28, 1943. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
authorizing Secretary of the Interior to settle certain
claims

39

ACT OF JULY 13, 1946 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
encouraging and protecting oil refineries not having
their own source of supply for crude oil by extending
preference in disposing of royalty oil

39

ACT OF AUGUST 8, 1946. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
promoting development of oil and gas on public domain

40

ACT OF MAY 27. 1947. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending section 35 of Mineral Leasing Act

49

ACT OF AUGUST 7, 1947. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MINERAL LEASING ACT FOR ACQUIRED LANDS
promoting mining on acquired lands

50

ACT OF JUNE 1, 1948. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
permitting exercise of certain options on or before
August 8, 1950

52

ACT OF JUNE 3, 1948. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending Mineral Leasing Act and the Potassium Act of
2/7/27 to promote development of certain minerals on
pub1ic domain

53

ACTOF AUGUST 3, 1950. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
providing biannual payments to States under Oil Land
Leasing Act of 1920

57

Title of Act

Page

ACT OF AUGUST 12, 1953. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending mineral leasing laws with respect to
application to pipe1ines passing through public domain

57

ACT OF AUGUST 2, 1954. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending section 27 of Mineral Leasing Act to promote
development of oil and gas on public domain

60

ACT OF JULY 10, 1957. . . . . . . . . . . . . . . . .section 2 only. . . . . . . . . . . . . . . . .
amending section 35 regarding Alaska

61

ACT OF JULY 3, 1958. . . . . . . . . . . . . . . . .sections 1, 2, 6, and 10 . . . . . . . . . .
providing for leasing of oil and gas deposits in
lands beneath nontidal navigable waters in Alaska

61

ACT OF AUGUST 21, 1958. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending section 27 to promote development of coal on
the public domain

63

ACT OF SEPTEMBER 9, 1959 . . . . . . . . . . . . . . . . section 2 only. . . . . . . . . . .
amending section 2 of the Mineral Leasing Act

64

ACT OF MARCH 18, 1960. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MINERAL LEASING ACT REVISION OF 1960
authorizing issuance of prospecting permits for
phosphate in lands belonging to United States

65

ACT OF JUNE 11, 1960. . . . . . . . . . . . . . . . .number 21 only. . . . . . . . . . . . . . .
amending section 17 to add “certified mail”

65

ACT OF JULY 14, 1960. . . . . . . . . . . . . . . . .sections 204(a) and 303. . . . . . . . .
repeals the Act of June 27, 1930

66

ACT OF SEPTEMBER 2, 1960. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending sections 17, 17 (a) , and 17 (b) of the
Mineral Leasing Act

67

ACT OF OCTOBER 15, 1962. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending section 31 of the Mineral Leasing Act

78

Title of Act

Page

ACT OF AUGUST 31. 1964. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending section 27 to promote development of coal
on public domain and for other purposes

79

ACT OF SEPTEMBER 6. 1966. . . . . . . . . . . . . .excerpt only . . . . . . . . . . . . . . .
repealing section 38 of the Mineral Leasing Act

79

ACT OF MAY 12. 1970. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
to prevent terminations of oil and gas leases in cases
of nominal deficiency in rental payment; or to
reinstate under some conditions

80

ACT OF DECEMBER 24. 1970. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GEOTHERMAL STEAM ACT OF 197 0
authorizing Secretary of the Interior to make
disposition of geothermal steam and associated
geothermal resources

81

ACT OF NOVEMBER 16. 1973. . . . . . . . . . . . . . . . .Title I only. . . . . . . . . . . . .
TRANS-ALASKA PIPELINE AUTHORIZATION ACT
amending section 28 of the Mineral Leasing Act and
authorizing a trans-Alaska oil pipeline. and other
purposes
Grant of Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inter-Agency Coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Width Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Temporary Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulatory Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pipeline Safety. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Environmental Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Technical and Financial Capability. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Public Hearings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reimbursement of Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Duration of Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Suspension or Termination of Right-of-Way. . . . . . . . . . . . . . . . . . . . .
Joint Use of Rights-of-Way. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common Carriers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right-of-Way Corridors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Existing Rights-of-Way. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Limitations on Export. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State Standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Antitrust Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

91

91
91
91
92
92
92
92
92
93
93
94
94
94
94
94
95
95
95
96
96
97
97
97
98
99

Title of Act

Page

ACT OF APRIL 21, 1976. . . . . . . . . . . . . . . . . . excerpt only. . . . . . . . . . . . . . .
amending section 35 of Mineral Leasing Law regarding
dates

100

ACT OF AUGUST 4, 1976. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FEDERAL COAL LEASING AMENDMENTS ACT OF 1975
Later amended to Act of "1976".

100

ACT OF SEPTEMBER 28, 1976. . . . . . . . . . . only Title III. . . . . . . . . . . . . . . .
amending section 35 of the Mineral Leasing Act

109

ACT OF OCTOBER 21, 1976. . . . . . . . . . . . . . Excerpts Title III. . . . . . . . . . .
FEDERAL LAND POLICY AND MANAGEMENT ACT (FLPMA)
Mineral Revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110
110

ACT OF OCTOBER 30, 1978. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
authorizing Secretary of the Interior to exchange
Federal coal leases and encourage recovery of
certain coal deposits

111

ACT OF NOVEMBER16, 1981. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
facilitating and encouraging production of oil from
 tar sand and other hydrocarbon deposits

114

ACT OF DECEMBER 30, 1982. . . . . . . . . . . . . excerpt from Title III. . . . . . . .
adding new subsections to section 21 of the Mineral
Leasing Act

117

ACT OF JANUARY 12, 1983. . . . . . . . . . . . . . Titles I and XV only. . . . . . . . . .
FEDERAL OIL AND GAS ROYALTY MANAGEMENT
ACT OF 1982 (FOGRMA)
Title I - Federal Royalty Management & Enforcement. . . . . . . . . . . . . . . . .
Duties of the Secretary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Duties of Lessees, Operators. and Motor
Vehicle Transporters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Required Recordkeeping. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prompt Disbursement of Royalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Explanation of Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities and Bonding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hearings and Investigations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inspections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Civil Penalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Criminal Penalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royalty Interest, Penalties and Payments. . . . . . . . . . . . . . . . . . . . . . . .
Injunction and Specific Enforcement Authority. . . . . . . . . . . . . . . . . . .
Rewards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncompetitive Oil and Gas Lease Royalty Rates. . . . . . . . . . . . . . . . .

119

119
119
120
121
121
122
122
122
123
124
125
125
126
127
127

Title of Act

ACT OF JANUARY 12, 1983. . . . . . . . . . . . . .Titles I and IV only
FEDERAL OIL AMD GAS ROYALTY MANAGEMENT.
ACT OF 1982 (FOGRMA) (continued)
Title IV - Reinstatement of Leases and Conversion
of Unpatented Oil Placer Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

128

ACT OF DECEMBER 21, 1987. . . . . . . . . . . . . . . Subtitle B only. . . . . . . . . .
FEDERAL ONSHORE OIL AND GAS LEASING REFORM
ACT OF 1987

132

ACT OF NOVEMBER 15, 1990. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
amending sections 14 and 31 of the Mineral Leasing
Act

140

Act of February 25, 1920

As Act To promote the mining of coal, phosphate, oil, oil shale,
gas and sodium on the public domain.
Be it enacted by the Senate and House of Representatives of the United States of
American in Congress assembled. That deposits of coal, phosphate, sodium, oil, oil shale
or gas, ands lands containing such deposits owned by the Unites States, including those in
national forests, but excluding lands acquired under the Act known as the Appalachian
Forest Act; approved March 1, 1991 (Thirty-sixth Statues, page 961); and those in
national parks, and in lands withdrawn or reserved form military or naval uses or
purposes, except as herein after provided, shall be subject to disposition in the form and
manner provided by this Act or citizens of the United States, or to any association of such
persons, or to any corporation organized under the laws of the United States, or of any
State or Territory thereof, and in the case of coal, oil, oil shale, or gas, to municipalities:
Provided, That the Unites States reserves the right to extract helium from all gas
produced of this Act, under such rules and regulations as shall be prescribed by the
Secretary of the Interior: Provided further, That in the extraction of helium from gas
produced from such lands, it shall be so extracted as to cause no substantial delay in the
delivery of gas produced from the well to the purchaser thereof : And provided further,
That citizens of another country, the laws, customs, or regulations of which, deny similar
or life privileges to citizens or corporations of this country, shall not by stock ownership,
stock holding, or stock control, own any interest in any lease acquired under the
provisions of this Act.

Federally Owned Mineral Lands
Sec. 1: See footnotes 1-4 for
amendments

Coal
Sec. 2. That the Secretary of the Interior is authorized to, and upon the petition of any
qualified applicant shall, divide any of the coal lands or the deposits of coal, classified
and un classified owned by the United States, outside the Territory of Alaska, into leasing
tracts of forty acres each, or multiples thereof, and in such form as, in the opinion of the
Secretary of the Interior, will permit the most economical mining of the coal in such
tracts, but in no case exceeding two thousand five hundred and sixty acres in any one
leasing tract, and thereafter the Secreatry of the Interior shall, in his discretion, upon the
request of any qualified applicant or on his own motion, from time to time, offer such
lands or deposits of coal for leasing, and shall award leases thereon by competitive
bidding or by such other methods as he may by general regulations adopt, to any
qualified applicant: Provided, That the Secretary is hereby authorized, in awarding leases
for coal lands heretofore improved and occupied or claimed in good faith, to consider
recognized equitable rights of such occupants or claimant: Provided further, that where
prospecting or exploratory work is necessary to determine the existence or workability of
coal deposits in any

1

COAL
COAL LEASES: LEASING
TRACTS. ACREAGE.
COMPETIVE BIDDING
Sec. 2: See footnotes 5-12
for amendments

unclaimed, undeveloped area, the Secretary of the Interior may issue, to applicants
qualified under this Act, prospecting permits for a term of two years, for not exceeding
two thousand five hundred and sixty acres; and if within said period of two years
thereafter the permittee shows to the Secretary that the land contains coal in commercial
quantities, the permittee shall be entitled to a lease under this Act for all or part of the
land in his permit: And provided further, That no lease of coal under this Act shall be
approved or issued until after notice of the proposed lease, or offering for lease, has been
given for thirty days in a newspaper of general circulation in the county in which the
lands or deposits are situated; and provided further, That no company or corporation
operating a common carrier railroad shall be given or hold a permit or lease under the
provisions of the Act for any coal deposits except for its own use for railroad purposed;
and such limitations of sue shall be expressed in all permits and leases issued to such
companies or corporations, and no such company or corporation shall receive or hold
more than one permit or lease for each two hundred miles of its railroad line within the
Stat in which said property is situated, exclusive of spurs or switches and exclusive of
branch lines built to connect the leased coal with the railroad, and also exclusive of parts
of the railroad operated mainly by power produced otherwise than by steam: And
provided further, That nothing herein shall preclude such a railroad of less then two
hundred miles in length from securing and holding one permit or lease hereunder.
Sec.3. That any person, association, or corporation holding a lease of coal lands or coal
MODIFY ORIGINAL COAL
deposits under this Act may, with the approval of the Secretary of the Interior, upon a
LEASE
finding by him that it will be for the advantage of the lessee and the United States, ensure
Sec 3: See footnotes
modifications of his or its original lease by including additional coal lands or coal
13-18 for amendments.
deposits contiguous to these embraced in such lease, but in no event shall the total area
embraced in such modified lease exceed in the aggregate two thousand five hundred and
sixty acres.
Sec.4. That upon satisfactory showing by any lessee to the Secretary of the Interior that
ADDITIONAL LEASING
all of the workable deposits of coal within a tract covered by his or its lease will be
Sec 4: See footnotes 19 for
exhausted, worked out, or removed within three years thereafter, the Secretary of the
amendments.
Interior may, within his discretion, lease to such lessee an additional tract of land or coal
deposits, which, including the coal area remaining the existing lease shall not exceed two
thousand five hundred and sixty acres, through the same procedures and under the same
conditions as in case of an original lease.
Sec.5. That if, in the judgment of the Secretary of the Interior, the public interest will
be subserved thereby, lessees holding under lease areas not exceeding the maximum
CONSOLIDATING LEASES
permitted under this Act may consolidate their leases through the surrender of the
original lease and the inclusion of such areas in a new lease of not to exceed two
thousand five hundred and sixty acres of contiguous lands.
Sec.6. That where coal or phosphate lands aggregating two thousand five hundred and
sixty area and subject to lease hereunder do
NONCONSOLIDATING LEASES

2

not exist as contiguous areas, the Secretary of the Interior is authorized, if, in his opinion
of the interest of the public and of the lease will be thereby subserved, to embrace in a
single lease noncontiguous tracts which can be operated as a single mine or unit.
Sec.7. That of the privileges of mining or extracting the coal in the lands covered by
the lease the lessee shall pay to the United States such royalties as may be specified in the
ROYALTIES
lease, which shall be fixed in advance of offering the same, and which shall not be less Sec.7: See footnotes 20
than 5 cents per ton of two thousand pounds, due and payable at the end of each third
for amendment
month succeeding that of the extraction of the coal from the mine, and an annual rental,
payable at the date of such lease and annually thereafter, on the lands or coal deposits
covered by such lease, at such rate as may be fixed by the Secretary of the Interior prior
to offering the same, which shall not be less than 25 cents per acre for the first year
thereafter, no less than 50 cents per acre for the second, third, fourth, and fifth years,
respectively, and not less than $1 per acre for each and every year thereafter during the
continuance of the lease, except that such rental for any year shall be credited against the
royalties as they accrue for that year. Leases shall be for indeterminate period upon
condition of diligent development and continued operation shall be interrupted by strikes,
the elements, or casualties not attributable to the lessee, and upon the further condition
that at the end of each twenty-year period succeeding the date of the lease such
readjustment of terms and conditions may be made as the Secretary of the Interior may
determine, unless otherwise provided by law at the time of the expiration of such periods:
Provided, That the Secretary of the Interior may, if in his judgment the public interest
will be subserved thereby, un lieu of the provisions herein contained requiring continuous
operation of the mine or mines, provide in the lease for the payment, of an annual
advance royalty upon a minimum number of tons of coal, which in no case shall
aggregate less than the amount of rentals herein provided for: Provided further, That the
Secretary of the Interior may permit suspension of operation under such lease for not to
exceed six months at any one time when market conditions are such that the lease can
not be operated expect at a loss.
Sec.8. That in order to provide for the supply of strictly local domestic needs for fuel,
the Secretary of the Interior may, under such rules and regulations as he may prescribe in
advance, issue limited licenses or permits to individuals or associations of individuals to
prospect for, mine, and take for their use but not for sale, coal from the land occupied, on
such conditions not inconsistent with the Act as in his opinion will safeguard the public
OWN USE PROVISIONS
interest: Provided, That this privilege shall not extend to any corporations: Provided
Sec.8: See footnotes
further, That in the case of municipal corporations the Secretary of the Interior may issue
21-22 for amendment
such limited license or permit, for not to exceed three hundred and twenty acres for a
municipality of less than one hundred thousand population, and not to exceed one
thousand two hundred and eighty acres for a municipality of not less than one hundred
thousand and not more than one hundred and fifty thousand population; and not to exceed
two thousand five hundred and sixty acres for a

3

municipality of one hundred and fifty thousand population or more, the land to be
selected within the State wherein municipal applicant may be located, upon condition that
such municipal corporations will mine the coal therein under proper conditions and
dispose of the same without profit to residents of such municipality for household use;
And provided further, that the acquisition of holding of a lease under the preceding
sections of the Act shall be no bar to the holding of such tract or operation of such mine
under said limited license.
Phosphates
Sec.9. That the Secretary of the Interior is hereby authorized to lease to nay applicant
qualified under this Act any lands belonging to the United States containing deposits of
phosphates, under such restrictions and upon such terms as are herein specified, though
advertisement, competitive bidding, or such other methods as the Secretary of the Interior
may be general regulation adopt.
Sec.10. That each lease shall be for not to exceed two thousand five hundred and sixty
acres of land to be described by the legal subdivisions of the public land surveys, if
surveyed; if unsurveyed, to be surveyed by the Government at the expense of the
applicant for lease, in accordance with rule sand regulations prescribed by the Secretary
of the Interior and the lands leased shall be conformed to and taken in accordance with
the legal subdivisions of such survey; deposits made to cover expenses of surveys shall
be deemed appropriated for that purpose; and any excess deposits shall be repaid to the
person, association, or corporation making such deposits or their legal representatives:
Provided, That the land embraced in any one lease shall be in compact form, the length of
which shall not exceed two and one half times its width.
Sec.11. That for the privilege of mining or extracting the phosphates or phosphate rock
covered by the lease the lessee shall pay the united States such royalties as may be
specified in-the lease, which shall be fixed by the Secretary of the Interior in advance of
offering the same, which shall be not less than 2 per centum of the gross values of the
output of phosphates of phosphate rock at the mine due and payable at then end of each
third month succeeding that of the sale of other disposition of the phosphates or
phosphate rock, and an annual rental payable at the date of such lease and annually
thereafter on the area covered by such lease at such rate as may be fixed by the Secretary
of the Interior prior to offering the lease, which shall be not less than 25 cents per acre of
the first year thereafter, 50 cents per acre of the second, third, fourth, and fifth years,
respectively, and $1 per acre for each and every year thereafter during the continuance of
the lease, except that such rental for any year shall be credited against the royalties as
they accrue for that year. Leases shall be fro indeterminate period upon condition of a
minimum annual production, except when operation shall be interrupted by strikes, the
element, or casualties not attributable to the lessee, and upon the further condition that at
the end of each twenty-year period succeeding the date of the lease such readjustment of

4

PHOSPHATES
LAND LEASING
Sec.9: See footnotes
23-24 for amendment

SIZE OF LEASE
Sec. 10: See footnote
25 for amendment.

ROYALTIES
Sec. 11: See footnote
26 for amendment.

terms and conditions shall be made as the Secretary of the Interior shall determine unless
otherwise provided by law at the time of the expiration for such periods: Provided, That
the Secretary of the Interior may permit suspension of operation under such lease for not
exceeding twelve months at any one time when market conditions are such that the lease
can not be operated except at a loss.
Sec.12. That nay qualified applicant to whom the Secretary of the Interior may grant a
lease to develop and extract phosphates, or phosphate rock, under the provisions of this
Act shall have the right to use so much for the surface of unappropriated and unentered
lands not exceeding forty acres, as may be determined by the secretary of the Interior to
be necessary for the proper prospecting for or development, extraction, treatment, and
removal of such mineral deposits.

SURFACE USE
Sec. 12: See footnote
27-28 for amendment.

OIL AND GAS.
Sec.13. That the Secretary of the Interior is hereby authorized, under such necessary
and proper rules and regulations as he may prescribe, to grant to any applicant qualified
under this Act a prospecting permit, which shall give the exclusive right, for a period not
exceeding two year, to prospect for oil or gas upon not to exceed two thousand five
hundred and sixty acres of land wherein such deposits belong to the United States and are
not within any known geological structure of the producing oil and gas field upon
condition that the permittee shall begin drilling operations within six months from the
date of the permit, and shall , within one year from and after the date of permit, drill one
or more wells for oil or gas to a depth not less than two thousand feet unless valuable
deposits of oil or gas shall be sooner discovered. The Secretary of the Interior may, if he
shall find that the permittee has been unable with the exercise of diligence to test the land
in the time granted by the permit, extend any such permit for such time, not exceeding
two years, and upon such conditions as he shall prescribe. Whether the lands sought in
any such application and permit are surveyed or unsurveyed the applicant shall, prior to
filling his application for permit, locate such lands in a reasonably compact form
according to the legal subdivisions of the public land surveys in the land be surveyed; and
in an approximately square or rectangular tract if the land be an usurveyed tract, the
length of which shall not exceed two and one-half times wits width, and if he shall cause
to be erected upon the land for which a permit is sought a monument not less than four
feet high, at some conspicuous place thereon, and shall post a notice in writing on or near
said monument, stating that an application for permit will be made within thirty days
after date of posting said notice, the names of the applicant, the date of the notice, and
such a general description of the land to be covered by such permit by reference to
courses and distances from such monument and such other natural objects and permanent
monuments as will reasonably identify the land,

5

OIL AND GASE
GRANTING LEASES
Sec. 13: See footnote
29-30 for amendment.

LOCATING LEASE

stating the amount thereof in acres, he shall during the period of thirty days following
such marking and posting, be entitled to a preference right over others to a permit for the
land so identified. The applicant shall, within ninety days after reviving a permit, mark
each of the corners of the tract described in the permit upon the ground with substantial
monuments, so that the boundaries can be readily traced on the ground and shall post on a
conspicuous place upon the lands a notice that such permit has been granted a description
of the lands covered thereby: Provided, That in the Territory of Alaska prospecting
permits not more than five in number may be granted to any qualified applicant for
periods not exceeding four years, actual drilling operations shall begin within two years
from date of permit, and oil and gas wells shall be drilled to a depth of not less than five
hundred feet, unless valuable deposits of oil or gas shall be sooner discovered within
three years from sate of the permit and to an aggregate depth of not less than two
thousand feet unless valuable deposits of oil or gas shall be sooner discovered, within
four years from date of permit: Provided further, That in said Territory the applicant shall
have a preference right over others to a permit for land identified by temporary
monuments and notice posted on or near the same for six months following such marking
and posting, and upon receiving a permit he shall mark the corners of the tract described
in the permit upon the ground with substantial monuments within one year after receiving
such permit.
Sec.14. That upon establishing to the satisfaction of the Secretary of the Interior that
valuable deposits of oil or gas have been discovered within the limits of the land
embraced in any permit, the permittee shall be entitled to a lease for one-fourth of the
land embraced in the prospecting permit: Provided, That the permittee shall be granted a
lease for as much as one hundred and sixty acres of said lands, if there be that number of
acres within the permit. The area to be selected by the permittee, shall be in compact
form and, if surveyed to be described by the legal subdivision of the public-land surveys;
if unsurveyed, to be surveyed by the Government at the expense of the applicant for lease
in accordance with rules and regulations to be prescribed by the Secretary of the Interior
and the lands leased shall be conformed to and taken in accordance with legal
subdivisions of such surveys; deposits made to cover expense of surveys shall be deemed
appropriated for that purpose, and any excess deposits may be repaid to the person or
persons making such deposits or their legal representatives. Such leases shall be for a
term of twenty years upon a royalty of 5 per centum in amount or value of the production
and the annual payment in advance of a rental for $1 per acres, the rental paid for any one
year to be credited against the royalties as they accrue for that year, with the right of
renewal as prescribed in section 17 hereof. The permittee shall also be entitled to a
preference right to a lease for the remainder of the land in his prospecting permit at a
royalty of not less than 12 ½ per centum in amount or value of the production, and under
such other conditions are fixed for oil or lease in this Act, the royalty to be determined by
competitive bidding or fixed by such other method as the Secretary may be regulations
prescribe: Provided, That the Secretary shall have the right to reject any or all bids.

REVIEING LEASE FOR
PERMITTED LAND
Sec. 14: See footnote
31 for amendment.

See footnote 99 for
Amendment.

ROYALTY

6

PERMITTEE FEES

Sec.15. That until the permittee shall apply for lease to the one quarter of the permit
are heretofore provided for he shall pay to the United States 20 per centum of the gross
value of all oil and gas secured by him from the lands embraces within his permit and
sold or otherwise disposed of or help by him for sale of other disposition.
Sec.16. That all permits and leases of lands containing oil or gas, made or issued under
the provisions of this Act, shall be subject to the condition that no wells shall be drilled
within two hundred feet of any of the outer boundaries of the lands so permitted or
leased, unless the adjoining lands have been patented or the title thereto otherwise vested
in private owners, and to the further condition that the permittee or lessee will, in
conducting his explorations and mining operations, use all reasonable precautions to
prevent waste of oil or gas developed in the land, or the entrance of water through wells
drilled by him to the oil sands or oil-bearing strata; to the destruction or injury of the oil
deposits. Violations of the provisions of this section shall constitute grounds for the
forfeiture of the permit or lease, to be enforced through appropriate proceeding in courts
of competent jurisdiction.
Sec.17. That all unappropriated deposits of oil or gas situated within the known
geologic structure of a producing oil or gas field and the unentered lands containing the
same, not subject to preferential lease, may be leased by the Secretary of the Interior to
the highest responsible bidder by competitive bidding under general regulations to
qualified applicants in areas not exceeding six hundred and forty acres and in tracts which
shall not exceed in length two and one-half times their width, such lease to be
conditioned upon the payment by the lessee of such bonus as may be accepted and of
such royalty as may be fixed in the lease, which shall not be less than 12 ½ per centum in
amount of values of the production, and the payment in advance of a rental of not less
than $1 per acre per annum thereafter during the continuance of the lease, the rental paid
for any one year to be credited against the royalties as they accrue for that year. Leases
shall be for a period of twenty years, with the preferential upon such reasonable terms
and conditions as may be prescribed by the Secretary of the Interior, unless otherwise
provided by law at the time of the expiration of such periods. Whenever the average
daily production of any oil well shall not exceed ten barrels per day, the Secretary of the
Interior is authorized to reduce the royalty on future production when in his judgment the
wells can not be successfully operated upon the royalty fixed in t6he lease. The
provisions of this paragraph shall apply to all oil and gas leases made under this Act.
Sec.18. That upon relinquishment to the United States, filed in the General Land office
within six months after the approval of this Act, of all right, title, and interest5 claimed
and possessed prior to July 3, 1910, and continuously since by the claimant or his
predecessor in interest under the preexisting placer mining law to any oil or gas gearing
land upon which there has been drilled one or more oil or gas wells to discovery
embraced in the Executive order of withdrawal issued September 27, 1909, and not
within any naval petroleum reserve, and upon payment as royalty to the Unites States.

7

WELL DRILLING NEAR
LANDBOUNDARIES
Sec.16 : See footnote 32
for amendment.

KGS. COMPETITIVE BIDDING
ROYALTY
Sec. 17: See footnotes
33-42 for amendments

PROIR TO JULY 3, 1910

Of an amount equal to the value at the time of production of one-eight of all the oil or
gas already produced expect oil or gas used for production purposes on the claim, or
unavoidably lost, form such land, the claimant, or his successor, if in possession of such
land, undisputed by any other claimant prior to July 1, 1919, shall be entitled to a lease
thereon from the United States for a period of twenty years, at a royalty of not less than
12 ½ per centum of all the oil or gas produced except oil or gas used for production
purposes on the claim, or unavoidably lost: Provided, That no more than one-half of the
area, but in no case to exceed three thousand two hundred acres, within the geologic oil
or gas structure of a producing oil or gas field shall be leased to any one claimant under
the provision of this section when the area of such geologic oil structure exceeds six
hundred and forty acres. Any claimant of his successor, subject to this limitation; shall,
however have the right to select and receive the lease as in this section provided for that
portion of his claim or claims equal to, but not in excess of, said one-half of the area of
such geologic oil structure, but not more than three thousand two hundred acres.
All such lease shall be made and the amount of royalty to be paid for oil and gas
produced, except oil or gas used for production purpose on the claim, or unavoidably lost,
after the execution of such lease shall be fixed by the Secretary of the Interior under
appropriate rule sand regulations: Provided, however, That as to all like claims situate
within any naval petroleum reserves the producing wells thereon only shall be leased,
together with an area of land sufficient for the operation thereof, upon the terms and
payment of royalties for past and future production as herein provided for in the leasing
of claims. No wells shall be drilled in the land subject to this provision within six
hundred and sixty feet of any such leased well without the consent of the lessee:
Provided, however, That the President may, in his discretion, lease the remainder or any
part of any such claim upon which such wells have been drilled and in the event of such
leasing said claimant or his successor shall have a preference right to such lease: And
provided further, that he may permit the drilling of additional wells by the claimant of his
successor within the limited area of six hundred and sixty feet theretofore provided for
upon such terms and conditions as he may prescribe.
No claimant for a lease who has been guilty of any fraud or who had knowledge of
reasonable grounds to know of any fraud, or who has not acted honestly and in good
faith, shall be entitled to any of the benefits of this section.
Upon the delivery and acceptance of the lease, as in this section provided, all suits
brought by the Government affecting such lands may be settled and adjusted in
accordance herewith and all moneys impounded in such suits or under the Act entitled
“An Act to amend an Act entitled’ An Act to protect the locators in good faith of oil and
gas lands who have shall have effected an actual discovery of oil or gas on the public
lands of the United States, or their successors in the interest,’ approved March 2, 19811,”
approved August 25, 1914 (thirty eight Statuettes at Large, page 708), shall be paid over

8

ROYALTY

To the parties entitled thereto. In case of conflicting claimants for lessee under this
section, the Secretary of the Interior is authorized to grant leases to one or more of them
as shall be deemed just. All lease hereunder shall unsure to the benefit of the claimant
and all persons claiming through or under him by lease, contract, or otherwise, as their
interest may appear, subject, however, to the same limitation as to area and acreage as is
provided for claimant in this section: Provided, That no claimant acquiring any interest in
such lands since September 1, 1919, from a claimant on or since said date claiming or
holding more than the maximum allowed claimant under this section shall secure a lease
thereon or any interest therein, but the inhibition of this proviso shall not apply to an
exchange of any interest in such lands made prior to the 1st day of January, 1920 which
did not increase or reduce the area or acreage held or claimed in excess of said maximum
by either party of the exchange: Provided further, That no lease or lease under this
section shall be granted, nor shall any interest therein, inure to any person, association, or
corporation for a greater aggregate area or acreage than the maximum in this section
provided for.
Sec.18a. That whenever the validity of any gas or petroleum place claim under
preexisting law to land embraced in the Executive order of withdrawal issued September
27, 1909, has been or may hereafter be drawn in question on behalf of the United States
in any departmental of judicial proceedings, the President is herby authorized at any time
within twelve months after the approval of this Act to direct the compromise and
settlement of any such controversy upon such terms and conditions as may be agreed
upon, to be carried out by an exchange or division of land or division of the proceeds of
operation.
Sec.19. That any person who on October 1,191, was a bona fide occupant or claimant
of oil or gas lands under a claim initiated while such lands were not withdrawn from oil
or gas location and entry, and who had previously performed all acts under then existing
laws necessary to valid locations thereof except to make discovery, and upon which
discovery had not been made prior to the passage of this Act, and who has performed
work or expended on or for the benefit of such locations an amount equal in the aggregate
of $250 for each location if application thereof shall be made within six months from the
passage of this Act shall be entitled to prospecting permits thereon upon the same terms
and conditions, and limitations as to acreage, as other permits provided for in this Act, or
where any such person has theretofore made such discovery, he shall be entitled to a lease
thereon under such terms as the Secretary of the Interior may prescribe unless other wise
provided for in section 18 hereof: Provided, That where such prospecting permit is
granted upon land within any known geologic structure of a producing oil or gas field, the
royalty to be fixed in any lease thereafter granted thereon or any portion thereof shall be
not less than 12 ½ per centum of all the oil or gas produced expect oil or gas used for
production purposes on the claim, or unavoidably lost: Provided, however, That the
provision of this section shall not apply to lands reserved for the use of the Navy:

9

VALIDITY OF OIL AND GAS
PLACER CLAIM

BONA FIDE OCCUPANT OR
CLAIMANT

Provided, however, That no claimant for a permit or lease who has been guilty of any
fraud or who have knowledge or reasonable grounds to know of any fraud, or who has
not acted honestly and in good faith, shall be entitled to any of the benefits of this section.
All permits or leases hereunder shall inure to the benefits of the claimant and all
persons claiming through or under him by lease, contract, or otherwise, as their interest
may appear.
PREFERENCE RIGHT
Sec.20. In the case of lands bona fide entered as agricultural, and not withdrawn or
classified as mineral at the time of entry, but not including lands claimed under any
railroad grant, the entryman or patentee, or assigns, where assignment were made prior to
January 1, 1918, if the entry has been patented with the mineral right reserved, shall be
entitled to a preference right to a permit and to a lease, as herein provided, in case of
discovery; and within an area not greater than a township such entryman and patentees,
or assigns holding restricted patents may combine their holdings, not to exceed two
thousand five hundred and sixty acres for the purpose of making joint application.
Leases executed under this section and embracing only lands to entered shall provide for
the payment of a royalty of not less than 12 ½ per centum as to such areas within the
permit as may not be included within the discovery lease to which the permittee is
entitled under section 14 hereof.
OIL SHALE
Sec.21. That the Secretary of the Interior is hereby authorized to lease to any person or
corporation qualified under this Act any deposits of oil shale belonging to the United
States and the surface of so much of the public lands containing such deposits, or land
adjecnt thereto, as may be required for the extraction and reduction of the leases minerals,
under such rules and regulations, not inconsistent with this Act, as he may prescribe; that
no lease bereunder shall exceed five thousand one hundred and twenty acres of land, to
be described by the surveyed by the United States, at the expense of the applicant, in
accordance with regulations to be prescribed by the Secretary of the Interior. Leases
may be for indeterminate periods, upon such conditions as may be imposed by the
Secretary of the Interior, including convents relative to methods of mining, prevention of
waste, and productive development. For the privilege of mining, extracting, and
disposing of the oil or other minerals covered by a lease under this section the lessee shall
pay to the Unites States such royalties as shall be specified in the lease and an annual
rental, payable at the beginning of each year, at the rate of 50 cents per acre per annum,
for the lands included in the lease, the rental paid for any one year to be credited against
the royalties accruing for that year; such royalties to be subject to readjustment at the end
of each twenty-year period by the Secretary of the Interior: Provided, That for the
purpose of encouraging the production of petroleum products from shales the Secretary
may, in his discretion, waive the payment of any royalty and rental during the first five
years of any lease: Provided, That any person having a valid claim to such minerals under
existing laws on January 1,

10

OIL SHALE
OIL SHALE LEASE
Sec.21 : See footnotes
43-45 for amendments.

1919, shall, upon the relinquishment of such claim, be entitled to a lease under the
provisions of this section of such area of the land relinquished as shall not exceed the
maximum area authorized by this section to be leases to an individual or corporation:
Provided, however, That no claimant for a lease who has been guilty of any fraud or who
had knowledge or reasonable grounds to know of any fraud, to who has not acted
honestly and in good faith, shall be entitled to any of the benefits of this section:
Provided further, That not more than one lease shall be granted under this section to any
one person, association, or corporation.
ALASKA OIL PROVISO.
Sec.22. That any bona fide occupant or claimant of oil or gas bearing lands in the
Territory of Alaska, who or whose predecessors in interest, prior to withdrawal had
complied otherwise with the requirements of the mining laws, but had made no discovery
of oil or improvements for the discovery of oil or gas on or for each location or had prior
to the passage of this Act expended not less than $250 in improvements on or for each
location shall be entitled, upon relinquishment or surrender to the United States within
one year from the date of this Act, or within six months after final denial or withdrawal of
application for patent, to a prospecting permit or permits, lease or leases, under this Act
covering such lands, not exceeding fiver permits or leases in number and not exceeding
an aggregate of one thousand two hundred and eighty acres in each: Provided, That
leases in Alaska shall be upon such rental and royalties as shall be fixed by the Secretary
of the Interior and specified in the lease, and be subject to readjustment at the end of each
twenty-year period of the lease: Provided further, That for the purpose of encouraging the
production of petroleum products of any rental or royalty not exceeding the first five
years of any lease
No claimant for a lease who has been guilty of any fraud or who had knowledge or
reasonable grounds to know of any fraud, or who has not acted honestly and in good
faith, shall be entitled to any of the benefits of this section.

ALASKA OIL PROVISO
BONA FIDE OCCUPAND OR
CLAIMANT
Sec.22 : See footnotes 46
for amendments.

SODIUM
Sec.23. That the Secretary of the Interior is hereby authorized and directed, under such
rules and regulations as he may prescribe, to grant to any qualified applicant a
prospecting permit which shall give the exclusive right to prospect for chlorides,
sulphates, carbonates, borates, silicates, or nitrates of sodium dissolved in and soluble in
waters, and accumulated by concentration, in lands belonging to the United States for a
period of not exceeding two years; Provided, That the area to be included in such a
permit shall be not exceeding two thousand five hundred and sixty acres of land in
reasonably compact form: Provided further, That the provisions of his section shall not
apply to lands in San Bernardino County, California.

11

SODIUM
PROSPECTING PERMITS
Sec.23 : See footnotes 47
for amendments.

QUALIFY FOR LEASE
Sec.24 : See footnotes 48
for amendments.

Sec.24. That upon showing to the satisfaction of the Secretary of the Interior that
valuable deposits of one of the substance enumerated in section 23 hereof has been
discovered by the permittee within the area covered by his permit and that such land is
chiefy valuable therefore the permittee shall be entitled to a lease for one-half of the land
embraced in the prospecting permit, at a royalty of not less than one-eight of the amount
or value of the production, to be taken and described by legal subdivision of the publicland surveys, or if the land be not surveyed by survey executed at the cost of the
permittee in accordance with the rules and regulations to the be prescribed by the
Secretary of the Interior. The permittee shall also have the preference right to lease the
remainder of the lands embraced within the limits of his permit at a royalty of not less
than one-eight of the amount or value of the production to be fixed by the Secretary of
the Interior. Lands known to contain such valuable deposits as are enumerated in
section 23 hereof and not covered by permits or leases, except such lands as are situated
in said county of San Bernardino, shall be held subject to lease, and may be leased y the
Secretary of the Interior through advertisement, competitive bidding, or such other
methods as he may be general regulations adopt, and in such areas as he shall fix, not
exceeding two thousand five hundred and sixty acres; all leases to be conditioned upon
the payment by the lessee of such royalty of not less than one-eight of the amount or
value of the production as may be fixed in the lease, and the payment in advance of a
rental of 50 cents per acre of the first calendar year or fraction thereof and $1 per acre per
anoum thereafter during the continuance of the lease, the rental paid for any one year to
be credited on the royalty of that year. Lease may be for indeterminate periods, subject
to readjustment at the end of each twenty-year period, upon such conditions not
inconsistent herewith as may be incorporated in each lease or prescribed in general
regulation theretofore issued by the Secretary of the Interior, including covenants relative
to mining methods, waste, period of preliminary development, and minimum
productions, and a lessee under this section may be lessee of the remaining lands in his
permit.
Sec.25. That in addition to area of such mineral land which may be included in any
such prospecting permits or leases, the Secretary of the Interior, in his discretion, may
grant to a permittee or lessee of lands containing sodium deposits, and subject to the
payment of an annual rental of not less than 25 cents per acre, the exclusive right to use,
during the life of the permit or lease, a tract of unoccupied nonmineral public land, not
exceeding forty acres in area, for camp sites, refining works and other purposes
connected with an necessary to the proper development and use the deposits covered by
the permit or lease.

12

EXCLUSIVE RIGHT OF USE

GENERAL PROVISIONS APPLICABLE TO COAL, PHOSPATE, SODIUM
OIL, OIL SHALE, AND GAS LEASES.
Sec.26. That the Secretary of the Interior shall reserve and may exercise the authority
to cancel any prospecting permit upon failures by the permittee to exercise due diligence
in the prosecution of the prospecting work in accordance with the terms and conditions
stated in the permit, and shall insert in every such permit issued under the provisions of
this Act appropriate provisions of its cancellation by him.
Sec.27. That no person, association, or corporation, except as herein provided, shall
take or hold more than one coal, phosphate, or sodium lease during the life of such lease
in any one State; no person, addiction, or corporation shall take or hold, at one time, more
than three oil or gas leases granted hereunder in any one Stat, and not more than one
lease, within the geologic structure of the same producing oil or gas field; no corporation
shall hold any interest as a stockholder of another corporation in more than such number
of leases; and no person corporation shall take or hold any interest or interest as a
member of an association or association or as a stockholder of a corporation or
corporations holding a lease under the provisions hereof, which together with the area
embraced in any direct holding of a lease under this Act, or which, together with any
other interest or interest as a member of an association or associations or as a stockholder
of a corporation of corporations holding a lease under the provisions hereof, for any kind
of mineral leased hereunder, exceeds in the aggregate an amount equivalent to the
maximum number of acres of the respective kinds of minerals allowed to any one lessee
under this Act. Any interests held in violation of this Act shall be forfeited to the united
States by appropriated proceedings instituted by the Attorney General for that purpose on
the United States district court for the district in which the property or some part thereof,
is located, except that any ownership or interest forbidden in this Act which may be
acquired by descent, will, judgment, or decree may be held for two years and not longer
after is acquisition: Provided, That nothing herein contained shall be constructed to limit
section 18, 18a, 19 and 22 or prevent any number of lessees under the provision of this
Act from combining their several interest so far as may be necessary for the purposes of
constructing and carrying on the business of a refinery, or of establishing and
constructing as a common carrier a pipe line or lines of railroads to be operated and used
by them jointly in the transportation of oil from their several wells, or from the wells off
other lessees under this Act, or the transportation of coal: Provided further, That any
combination for such purpose of purposes shall be subject to the approval of the
Secretary of the Interior on application to him for permission to form the same: And
provided further, That if any of the lands of deposits leased under the provisions of this
Act shall be subleased, trusted, possessed, or controlled by any device permanently,
temporarily, directly, indirectly, tacitly, or in any manner whatsoever, so that they form
part of , or are in anywise controlled by an combination i9n the form of an unlawful trust,
with consent of lessee, or

13

GENERAL PROVISIONS
DUE DILGENCE

NUMBER OF LEASES HELD
Sec.27 : See footnotes
49-62 for amendments.

form the subject of any contract or conspiracy in restraint of trade in the mining or selling
of coal, phosphate, oil, oil shale, gas or sodium entered into by the lessee, or any
agreement or understanding, written, verbal or otherwise to which such lessee shall be
party, of which his its output is to be or become the subject, to control the price or prices
thereof or of any holding of such lands by any individual, partnership, association,
corporation, or control, in excess of the amounts of lands provided in this Act, the lease
thereof shall be forfeited by appropriate court proceedings.
Sec.28. That rights of way through the public lands, including the forest reserves, of
the United States are hereby granted for pipeline purposes for the transportation of oil or
natural gas to any applicant possessing the qualifications provided in section 1 of this
Act, to the extent of the ground occupied by the said pipeline and twenty-five feet on
each side of the same under such regulations as to survey, location, application, and use
as may be prescribed by the Secretary of the Interior and upon the express condition that
such pipelines shall be constructed, operated, and maintained as common carriers:
Provided, That the Government shall in express terms reserve and shall provide in every
lease of oil lands hereunder that the lessee, assignee, or beneficiary, if owner, or operator
or owner of a controlling interest in any pipeline or of any company operating the same
which may be operated accessible to the oil derived from lands under such lease, shall at
reasonable rates and without discrimination accept and convey the oil of the government
or of any citizen or company not the owner of any pipeline, operating a lease or
purchasing gas or oil under the provision of his Act: Provided further, That no right of
way shall hereafter be granted over said lands for the transportation of oil or natural gas
except under the subject to the provision, limitations, and conditions of this section.
Failure to comply with the provisions of this section or regulations prescribed by the
Secretary of the Interior shall be ground for forfeiture of the grant by the United States
district court for the district in which the property, or some part thereof, is located in a
appropriate proceeding.
Sec.29. That any permit, lease, occupation, or use permitted under this Act shall
reserve to the Secretary of the Interior the right to permit upon such terms as he may
determine to be just, for joint or several use, such easements or right of way, including
casements in tunnels upon, through, or in the lands leased, occupied, or used as may be
necessary or appropriate to the working of the same, or of other lands containing the
deposits described in this Act, and the treatment and shipment of the products thereof by
or under authority of the Government, its lessees, or permittees, and for other public
purposed: Provided, That said Secretary , in his discretion, in making any lease under this
Act, may reserve to the United States the right to lease, sell, or otherwise dispose of the
surface of the lands embraces within such lease under existing law or laws hereafter
enacted, in so far as said surface is not necessary for use of the lessee in extracting and
removing the deposits therein: Provided further, That if such reservation is made it shall
be so determined before the offering of

14

PIPELINE
RIGHTS-OF-WAY
Sec.28 : See footnotes
63-65 for amendments.

EASEMENTS AND
RIGHT-OF-WAY

such leases: And provided further, That the said Secretary; during the life of the lease, is
authorized to issue such permits of easements herein provided to be reserved.
Sec.30. That no lease issued under the authority of this Act shall be assigned or sublet,
except with the consent of the Secretary of the Interior. The lease may in the discretion
of Secretary of the Interior, be permitted at any time to make written relinquishment of all
rights under such a lease, and upon acceptance thereof be thereby relieved of all future
obligation under said lease, and may with like consent surrender any legal subdivision of
the area included within the lease. Each lease shall contain provisions for the purpose of
insuring the exercise of reasonable diligence, skill, and care in the operation of said
property, a provision that such rules for the safety and welfare of the miners and for the
prevention of undue waste as may be prescribed by said Secretary shall be observe,
including a restriction of the workday to not exceeding eight hours in any one day for
underground workers expect in cases of emergency; provisions prohibiting the
employment of any boy under the age of sixteen or the employment of any girl or
woman, without regard to age, in any mind below the surface, provisions securing the
workman complete freedom of purchase; provision requiring the payment of wages at
least twice a month in lawful money of the united States, and providing proper rules and
regulations to unsure the fair and just weighing or measurement of the coal mined by
each miner, and such other provision as he may deem necessary to insure the sale of the
production of such leased lands to the united States and to the public at reasonable prices,
for the protection of the interest of the united States, for the prevention of monopoly, and
for the safeguarding of the public welfare: Provided, That none of such provisions shall
be in conflict with the laws of the State in which the leased property is situated.
Sec.31. That any lease issued under the provision of this Act may be forfeited and
canceled by an appropriate proceeding in the united States district court for the district in
which the property, or some part of thereof is located whenever the lessee fails to comply
with any of the provisions of this Act, of the lease, or of the general regulations
promulgated under this At and in force at the date of the lease; and the lease may provide
for resort to appropriate methods for the settlement of dispute or for remedies for breach
of specified conditions thereof.
Sec.32. That the Secretary of the interior is authorized to prescribe necessary and
proper rules and regulations and to do any and all things necessary to carry out and
accomplish the purposes of this Act, also to fix and determine the boundary lines of any
structure, or oil or gas flied, for the purposes of this Act: Provided, That nothing in this
Act shall be constructed or help to affect the rights of the States or other local authority to
exercise any rights which they may have including the right to levy and collect taxes
upon improvements, outputs of mines, or other rights, property, or assets of any lessee of
the United States.

15

ASSIGNED OR SUBLET LEASES
Sec.30: See footnotes
66-70 for amendment.

FORFEITURE OF CANCELLATION
FOR LEASES
Sec.31: See footnotes
71-77 for amendments.
FIX AND DETERMIN
BOUNDARY LINES

FORMS AND OATH

Sec.33. That all statements, representation, or reports required by the Secretary of the
Interior under this Act shall be upon oath, unless otherwise specified by him, and in such
form and upon such blanks as the Secretary of the Interior may require.
Sec.34. that the provisions of this Act shall also apply to all deposits of coal,
RESERVATION OF MINERALS
phosphate, sodium, oil, oil shale, or gas in the lands of the United States which lands may
have been or may be disposed of under laws reserving to the United States such deposits,
with the right to prospect for, mine, and remove the same, subject to such conditions as
are or may hereafter be provided by such laws reserving such deposits.
Sec.35. That 10 per centum of all money received from sales, bonuses, royalties, and
rentals under the provisions of this Act, expecting those from Alaska, shall be paid into
DISPOSTION OF RECEIPTS
the Treasury of the United States and credited to miscellaneous receipts; for the past
Sec.35: See footnotes
production 70 per centum, and for future production 52 ½ per centum for the amounts
79-89 for amendments.
derived from such bonuses, royalties, and rentals shall be paid into, reserve, and
appropriated as part of the reclamation fund created by the Act of Congress, known as the
Reclamation Act, approved June 17, 1902, and for past production 20 per centum, and for
such bonuses, royalties, and rentals shall be paid by the Secretary of the Treasury after
the expiration for each fiscal year to the State within the boundaries of which the leased
lands for deposits are or where located, said moneys to be used by such State or
subdivisions thereof for the construction and maintenance of public roads or for the
support of public schools or other public educational institutions, as they legislature of
the State may direct: Provided, That all moneys which may accrue to the unites States
under the provisions of this Act from lands within the naval petroleum reserves shall be
deposited in the Treasury as “ Miscellaneous receipts.”
Sec.36. That all royalty accruing to the unites States under any oil or gas lease or
permit under this Act on demand of the Secretary of the Interior shall be paid in oil or
gas.
Upon granting any oil or gas lease under this Act, and from time to time thereafter
ROYALTY PAID IN KIND
during said lease, the Secretary of the Interior shall ,except whenever in his judgment it is
ON DEMAND
desirable to retain the same for the use of the United States, offer for sale for such period
Sec.36 : See footnote 90
as he may determine, upon notice and advertisement on sealed bids or at public auction,
for amendment.
all royalty oil and gas accruing or reserved to the United states under lease. Such
advertisement and sale shall reserve to the Secretary of the Interior the right to reject all
bids whenever within his judgment the interest of the United States demands; and in
cases where no satisfactory bid is received or where the accepted bidder fails to complete
the purchase, or where the Secretary of the Interior shall determine that it is unwise on
the public interest to accept the offer of the highest bidder, the Secretary of the Interior,
within his discretion, may readvertise such royalty for sale, or sell at private sale at not
less than the market price for such period, or accept the value thereof from the lessee:
Provided, however, That pending the making of a permanent contract for the sale of any
royalty, oil or gas as herein provide, the Secretary of the Interior

16

may sell the current product at private sale, at not less than the market price: And
provided further, That any royalty, oil, or gas may be sold at not less than the market
price at private sale to any department or agency of the united States.
Sec.37. That the deposits of coal, phosphate, sodium, oil, oil shale, and gas, herein
referred to, in lands valuable for such minerals, including lands and deposits described in
the joint resolution entitled “Joint resolution authorizing the Secretary of the Interior to
permit the continuation of coal mining operations on certain lands in Wyoming,”
approved August 1, 1912 (Thirty-seventh statutes at large, page 1346), shall be subject to
disposition only in the form and manner provided in this Act, except as to valid claims
existent at date of the passage of this Act and thereafter maintained in compliance with
the laws under which initiated, which claims may be perfected under such laws, including
discovery.
Sec.38. That, until otherwise provided, the Secretary of the Interior shall be authorized
to prescribe fees and commissions to be paid registers and receivers of United States land
offices on account of business transacted under the provisions of this Act.
Approved, February 25, 1920.

DISPOSITION OF MINERAL
DEPOSITS SUBJECT TO
THIS ACT
Sec.37 : See footnote 91
for amendment.

FEES FOR TRANSACTION
UNDER ACT
Sec.38 : See footnote 92
for amendment.

NOTE:
Sec.39: See footnotes
93-98 for amendments.

Sec. 39: Added by this Act of 2/9/33
at p.28 this text.
Sec.40:

Added by this Act of 6/16/34
at p.29 this text.

Sec.41:

Added by this Act of 12/22/87
at p.136 this text

Sec.42:

Added by this Act of 9/2/60
at p.76 this text

Sec.43:

Added by this Act of 12/22/87
at p.139 this text

Sec.44:

Added by this Act of 12/22/87
at p.139 this text

17

ACT OF APRIL 30, 1926

ACT OF APRIL 30, 1926

An Act To amend section 27 of the general leasing Act approved
February 25, 1920 (Forty-first Statues at Large, page 437).
Be it enacted by the Senate and House of Representatives of the Unites States of
America in Congress assembled, That section 27 of the general leasing Act approved
February 25, 1920 (Forty-first Statues at Large, page 437), is hereby amend to read as
follows:
That no person, association, or corporation, except as herein provided, shall take or
hold coal, phosphate, or sodium leases or permits during the life of such leases or permits
in any on State exceeding in aggregate acreage 2,560 acres of each of said minerals; no
person, association, or corporation shall take or hold at one time oil or gas leases or
permits exceeding the in the aggregate 7,680 acres granted geologic structure of the same
producing oil or gas field; and no person, association, or corporation shall take or hold at
one time any interest or interests as a member of an association or associations or as a
stockholder of a corporation or corporations holding a lease or leases, permit or permits,
under the provisions hereof, which, together with the-are embraced in any direct holding
of a lease or leases, permit or permits, under this Act, or which, together with any other
interest or interests as a member of an association or associations or as a stockholder of a
corporation or corporations holding a lease or leases, permit or permits, under the
provisions hereof for any kind of mineral leases here under, exceeds in the aggregate an
amount equivalent to the maximum number of acres of the respective kinds of minerals
allowed to any one lessee or permittee under this Act. Any interest held in violation of
this Act shall be forfeited to the United States by appropriated proceedings instituted by
the Attorney General for that purpose in the united States district court for the district in
which the property, or some part thereof, is located, except that any ownership or interest
forbidden in this Act which may be acquired by descent, will, judgment, or decree may
be held for two years and not longer after its acquisition: Provided, that nothing herein
contained shall be construed to limit sections 18, 18a, 19, and 22 or to prevent any
number of lessees under the provisions of this Act from combining their several interest
so far as may be necessary for the purposes of constructing and carrying on the business
of a refinery, or of establishing and constructing as a common carrier a pipe line or lines
of railroads to be operated and used by them jointly in the transportation of oil from their
several wells, or from the wells of other lessees under this Act, or the transportation of
coal or to increase the acreage which may be acquired or held under section 17 of this
Act: Provided further, that any combination for such purpose or purposes shall be subject
to the approval of the Secretary of the Interior on application to him for permission to
form the same. And provided further, That if any of the lands or deposits leased under
the provisions of this Act shall be subleased, trusteed, possessed, or controlled by any
device permanently, temporarily, directly, indirectly, tacitly, or in any manner
NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed
under the section number to locate subsequent amendments of each section

18

Sec.27

ACREAGE HELD

FOR FEITURE OF INTEREST

Whatsoever, so that they from a part of, or are in wise controlled by any combination in
the form of an unlawful trust, with consent of lessee, or form the subject of any contract
or conspiracy in restraint of trade in the mining or selling of coal, phosphate, oil, oil
shale, gas or sodium entered into by the lessee, or any agreement of understanding,
written, verbal, or otherwise to which such lessee shall be a party, of which his or its
output is to be or become the subject, to control the price or prices thereof of any holding
of such lands by any individual, partnership, association, corporation, or control in excess
of the amounts of lands provided in this Act, the lease thereof shall be forfeited by
appropriated court proceedings.
Approved, April 30, 1926.

ACT OF FEBRUARY 7, 1927

ACT OF FEBRUARY 7, 1927
Excerpts
An Act To promote the mining of potash on the public domain.

Sec.4. that prospecting permits of leases may be issued under the provisions of this Act
for deposits of potassium in public lands, also containing deposits of coal or other
minerals, on condition that such other deposits be reserved to the United States for
disposal under appropriate laws: Provided, That if the interests of the Government and of
the lessee will be subserved thereby, potassium leases may include covenant providing
for the development by the lessee of chloride, sulphates, carbonates, borates, silicates, or
nitrates of sodium, magnesium, aluminum, or calcium, associated with the potassium
deposits leased, on terms and conditions not inconsistent with the sodium provision of the
Act of February 25, 1920 (Forty-first Statutes at Large, page 437) : Provided further,
That where valuable deposits of mineral now subject to disposition under the general
mining laws are found in fissure veins on any of the lands subject to permit or lease under
this Act, the valuable minerals so mining laws not with standing the presence of potash
therein.
Sec.5. That the general provisions of section 1 and 26 to 38, inclusive, of the Act of
February 25, 1920, entitled “An Act to promot the mining of coal, phosphate, oil, oil
shale, gas and sodium on the public domain,” are made applicable to permits and lease
under this Act, the first and thirty-seventh sections thereof being amended to included
deposits of potassium.

Note: Other sections are not included

19

SODIUM PROVISIONS

SECS. 1 and 26-38 MADE
APPLICABLE TO THIS ACT.

ACT OF DECEMBER 11, 1928

ACT OF DECEMBER 11, 1928

An Act To amend sections 23 and 24 of the General Leasing Act
approved February 25, 1920 (Forty-first Statues at Large, page 437)
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That sections 23 and 24 of the General Leasing Act
approved February 25, 1920 (Forty-first Statues at Large, page 437), are hereby amended
to read as follows:
“Sec.23. That the Secretary of the Interior is hereby authorized, under such rules and
regulations as he may prescribe, to grant to any qualified applicant a prospecting permit
which shall give the exclusive right to prospect for chlorides, sulphates, carbonates,
borates, silicates, or nitrates of sodium, in lands belonging to the United States for a
period of not exceeding two years: Provided, that the area to be included in such a permit
shall not exceed two thousand five hundred and sixty acres of land in reasonably compact
form.
Sec.24. that upon showing to the satisfaction of the Secretary of the Interior that
valuable deposits of one of the substances enumerated in section 23 hereof have been
discovered by the permittee within the area covered by his permit and that such lands is
chiefly or all of the land embraced in the prospecting permit at a royalty of not less than 2
per centum of the quantity or gross value of the output of sodium compounds and other
related products at the point of shipment to market; the lands in such lease to be taken in
if the land be not surveyed, by survey executed at the cost of the permittee in accordance
with regulations prescribed by the Secretary of the Interior. Lands known to contain
valuable deposits of one of the substances enumerated in section 23 hereof and not
covered by permits or leases shall be subject to lease by the Secretary of the Interior
through advertisement, competitive bidding, or such other methods as he may by general
regulations adopt and in such areas as he shall fix, not exceeding two thousand five
hundred and sixty areas. All leases under this section shall be conditioned upon the
payment by the lessee of such royalty as may be fixed in the lease, not less than 2 per
centum of the quantity or gross value of the output of sodium compounds and other
related products at the point of shipment to market , and the payment in advance of a
rental of 25 cents per acre of the first calendar year or fraction thereof, 50 cents per acre
for the second, third, fourth, and fifth calendar years respectively; and $1 per acre per
annum thereafter during the continuance of the lease, such rental for any one year to be
credited against royalties accruing for that year. Leases under this section shall be for a
period of twenty years, with preferential right in the lessee to renew for successive
periods of ten years upon such reasonable terms and conditions as may be prescribed by
the

NOTE: Regarding all Mineral Leasing Act Sections noted on this page: See footnotes listed
under the section number to locate subsequent amendments to each section.

20

Sec. 23
SODIUM LEASE ACREAGE

Sec. 24
QUALIFY FOR LEASE
ROYALTY

Secretary of the Interior unless otherwise provide by law at the expiration of such period:
Provided, That nothing in this Act shall prohibit the mining and sale of sodium
compounds under potassium leases issued pursuant to the Acts of October 2, 1917
(Fortieth Statues at Large, page 297), and February 7, 1927 (Forty-fourth Statues at
Large, page 1057), nor the mining and sale of potassium compounds as a by-product
from sodium leases taken under this section: Provided further, That on application by any
lessee the Secretary of the Interior is authorized to modify the rental and royalty
provisions stipulated in any existing sodium lease to conform to the provisions of this
section.”
Approved, December 11, 1928.

ACT OF JUNE 27, 1930

ACT OF JUNE 27, 1930

An Act Authorizing the repayment of rents and royalties is excess of
requirements made under lease executed in accordance with the General Leasing Act of
February
Be it enated by the Senate and House of Representatives of the United States of
America in Congress assembled, That the provisions of the Act of Congress approved
December 11, 1919 (41 Stat. L.366), entitled “An Act to amend an Act approved March
26, 1908, entitled ‘An Act to provide for the repayment of certain commissions, excess
payments, and purchases moneys paid under the public land laws,’” is hereby made
applicable to all payments in excess of lawful requirements made under the Act of
Congress approved February 25, 1920 (41 Stat. L. 437), and under any statue relating to
the sale, entry, lease, or other disposition of the public lands.
Approved, June 27, 1930.

NOTE: Repealed by Act of July 14, 1960.

21

REPAYMENT OF EXCESS
PAYMENTS

REPLEAED

ACT OF JULY 3, 1930

ACT OF JUNE 3, 1930

An Act To amend section 17 and 27 of the General Leasing Act of
February 25, 1920 (41 Stat, 437; U.S.C., title 30, sec. 226), as amended.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That sections 17 and 27 of the Act entitled “An Act to
promote the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public
domain,” approved February 25, 1920 (41 Stat. 437; U.S.C., titled 30, sec.226), as
amended, are amended to read as follows:
“Sec.17. That all unappropriated deposits of oil or gas situated within the known
Sec.17
geologic structure of a producing oil or gas field and the unentered lands containing the
KNOWN GEOLOGIC STRUCTURE
same, not subject to preferential lease, may be leased by the Secretary of the Interior to
the highest responsible bidder by competitive bidding under general regulations to
COMPETITIVE BIDDING
qualified applicants in areas not exceeding six hundred and forty acres and in tracts which
shall not exceed in length two and one-half times their width, such leases to be
conditioned upon the payment by the lessee of such onus as may be accepted and of such
royalty as may be fixed in the lease, which shall not be less than 12 ½ per centum in
amount or valued of the production, and the payment in advance of a rental of not less
than $1 per acre per annum thereafter during the continuance of the lease, the rental paid
for any one year to be credited against the royalties as they accrue for that year. Leases
shall be for a period of twenty years, with the preferential right in the lessee to renew the
same for successive periods of ten years upon such reasonable terms and conditions as
may be prescribed by the Secretary of the Interior, unless otherwise provide by law at the
time of the expiration of such periods: Provided, That any lease heretofore or hereafter
issued under this Act that has become the subject of a cooperative or unit plan of
development or operation of a single oil or gas pool, which plan has approval of the
Secretary of the Interior as necessary or convenient in the public interest, shall continue
in force beyond said period of 20 years until the termination of such plan: And provided
further, That the Secretary of the Interior shall report all leases so continued to Congress
at the beginning of its next regular session after the date of such continuance. Whenever
the average daily production of any oil well shall not exceed ten barrels per day the
Secretary of the Interior is authorized to reduce the royalty on future production when his
judgment the well can not be successfully operated upon the royalty on future production
when his judgment the wells can not be successfully operated upon the royalty fixed in
the lease. The provisions of this paragraph shall apply to all oil and gas leases made
under this Act.
“Sec.27. That no person, association, or corporation, except herein provided, shall take or
hold coal, phosphate, or sodium lease or permits during the life of such leases or permits
in any one State exceeding in aggregate acreage two thousand five hundred and sixty
acres for each of said minerals; no person, association, or corporation shall take or hold at
one time oil or gas leases or permits exceeding in the aggregate seven thousand six
hundred and eighty acres granted hereunder in any one State, and not more than two
thousand five
NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE
footnotes listed under the section number to locate subsequent amendments to each
section.

22

Sec. 17
ACREAGE LIMITATIONS

hundred and sixty acres within the geologic structure of the same producing oil or gas
field; and no person, association, or corporation shall take or hold at one time any interest
or interests as a member of an association or associations or as a stockholder of a
corporation or corporations holding a lease or leases, permit or permits, under this Act, or
which, together with any other interest or interest as a member of an association or
associations or as a stockholder of a corporation or corporations holding a lease or leases,
permit or permits, under the provisions hereof for any kind of mineral lease hereunder,
exceeds in the aggregate an amount equivalent to the maximum number of acres of the
respective kinds of minerals allowed to any one lessee or permittee under this Act. Any
interests held in violation of this Act shall be forfeited to the united States by appropriate
proceedings instituted by the Attorney General for that purpose in the united States
district court for the district in which the property, or some part thereof, is located, except
that any ownership or interest forbidden in this Act which may be acquired by descent,
will, judgment, or decree may be held for two years and not longer after its acquisition:
Provided, that nothing herein contained shall be construed to limit section 18, 18a, 19,
and 22 or to prevent any number of lessees under the provisions of this Act from
combining their several interests so far as many be necessary for the purpose of
constructing and carrying on the business of a refinery, or of establishing and
constructing as a common carrier a pipe line or lines of railroads to be operated and used
by them jointly in the transportation of oil from t heir several wells, or from the wells of
other lessees under this Act, or the transportation of coal or to increase the acreage which
be acquired or help under section 17 of this Act: Provided further, That any combination
for such purpose or purposes shall be subject to the approval of the Secretary of the
Interior on application to him for permission to form the same: And provided further,
That for the purpose of more properly conserving the natural resources of any single oil
or gas pool or field, permittees and lessees thereof and their representatives may unit with
each other or jointly or separately with others in collectively adopting and operating
under a cooperative or unit plan of development or operation of said pool or field,
whenever determined and certified by the Secretary of the Interior to be necessary of
advisable in the public interest, and the Secretary of the Interior is there unto authorized
to his discretion, with the consent of the holders of leases involved, to establish, alter,
change, or revoke drilling, producing, and royalty requirements of such lease, and to
make such regulations with reference to such leases with like consent on the part of the
lesee or lessees in connection with the institution and operation of any such cooperative
or unit plan as he may deem necessary or proper to secure the proper protection for such
public interest: And provided further, that except as herein provided, if any of the lands or
deposits leased under the provisions of this Act shall be subleased, trusted, possessed, or
controlled by any device permanently, temporarily,

23

directly, indirectly, tacitly, or in any manner whatsoever, so that they from a part of , or
are in anywise controlled by any combination in the form of an unlawful trust, with
consent of lessee, or form the subject of any contract or conspiracy in restraint of trade in
the mining or selling of coal, phosphate, oil, oil shale, gas, or sodium entered into by the
lessee, or any agreement or understanding, written, verbal, or otherwise to which such
lessee shall be a party, of which his or its output is to be or become the subject, to control
the price or prices thereof or of any holding of such lands by any of the amounts of lands
provided in this Act, the lease thereof shall be forfeited by appropriate court proceedings.
Sec.2. the amendments herein adopted to section 17 and 27 of the General Leasing Act THESE AMDENMENTS EXPIRE
of February 25, 1920, as amended, shall expire at midnight on the 31st day of January, JANURARY 31, 1931
1931.
Approved, July 3, 1930.

24

ACT OF MARCH 4, 1931

ACT OF MARCH 4, 1931

An Act To amend section 17 and 27 of the General Leasing Act
of February 25, 1920 (41 Stat. 347; U.S.C., title 30, secs. 154 and 266), as amended.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That sections 17 and 27 of the Act entitled “An Act to
promote the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public
domain,” approved February 25, 1920 (41 Stat. 347; U.S.C., title 30, secs. 184 and 226),
as amended, are amended and reenacted to read as follows:
“Sec.17. that all unappropriate deposits of oil or gas situated within the known
geologic structure of a producing oil or gas field and the unentered lands containing the
same, not subject to preferential lease, may be leased by the Secretary of the interior to
the highest responsible bidder by competitive bidding under general regulations to
qualified applicants in units reasonably compact of not exceeding sic hundred and forty
acres, such leased to be conditioned upon the payment by the lessee of such bonus as may
be accepted and such royalty as may be fixed in the lease, which shall not be less than 12
½ per centum in amount or value of the production and the payment in advance of a
rental of not less than $1 per acre per annum thereafter during the continuance of the
lease, the rental paid for any one year to be credited against the royalties as they accrue
for that year.
“Leases shall be for a period of twenty years with the preferential rights in the lessee to
renew the same for successive periods of ten years upon such reasonable terms and
conditions as may be prescribed by the Secretary of the department having jurisdiction
thereof, unless otherwise provided by law at the time of the expiration of such periods:
Provided, That any lease heretofore or hereafter issued under this Act that has become
the subject of a cooperative or unit plan of development or operation of a single oil or gas
pool, or area, or other plan for the conservation of the oil and gas of a single pool or are,
which plan has the approval of the Secretary of the department of departments having
jurisdiction of the Government lands included in said plan as necessary of convenient in
the public interest, shall continue in force beyond said period of twenty years until the
termination of such plan: And provided further, That said Secretary or Secretaries shall
repot all leases so continued to Congress at the beginning of its next regular session after
the date of such continuance.
“Any cooperative or unit plan of development or operation, which included land
owned by the United Stats, shall contain a provision whereby authority, limited as therein
provided, is vested in the Secretary of the department or departments having jurisdiction
over such land to alter or modify from time to time in his discretion the quantity the rate
of production under said plan. The Secretary of the interior is authorized whenever he
shall deem such action necessary or in the public interest, with the consent of lessee, by
order suspend or modify the drilling or producing requirements

Sec. 17
KNOWN GEOLOGIC
STURCTURES
COMPETITIVE BIDDING

LEASE TERMS

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed
under the section number to locate subsequent amendments to each section

25

of any oil and gas lease heretofore or hereafter issued, and no lease shall be demand to
expire by reason of the suspension of production pursuant to any such order. Whenever
the average daily production of any oil well shall not exceed ten barrels per day the
Secretary of the Interior is authorized to reduce the royalty on future production when in
his judgment the wall can not be successfully operated upon the royalty fixed in the lease.
The provisions of this section shall apply to all oil and gas leases made under this Act.
“Sec.27. That no person, association, or corporation, except as herein provided, shall
take of hold coal, phosphate, or sodium lease or permits during the life of such leases or
permits in any on State exceeding in aggregate acreage two thousand five hundred and
sixty acres for each of said minerals; no person, association, or corporation shall take or
hold at one time oil of gas leases or permits exceeding in the aggregate seven thousand
six hundred and eighty acres granted hereunder in any one State, and not more than two
thousand five hundred and sixty acres within the geologic structure of the same
producing oil or gas field and no person, association, or corporation shall take hold at one
time any interest or interests as a member of an association or associations or as a
stockholder of a corporation or corporations holding a lease or leases, permit or permits,
under the provisions hereof, which, together with the area embraced in any direct holding
of a lease or leases, permit or permits, under this Act, or which, together with any other
interest or interests as a member of an association or associations or as a stockholder of a
corporation or corporations holding a lease or leases, permit or permits, under the
provisions hereof for any kind of mineral leases hereunder, exceeds in the aggregate an
amount equivalent to the maximum number of acres of the respective kinds of mineral
allowed to any one lessee or permittee under this Act. Any interest held in violation of
this Act shall be forfeited to the united Stats by appropriate proceeding instituted by the
Attorney General for that purpose in the United Stats district court for the district in
ownership or interest forbidden in this Act which may be acquired be descent, will,
judgment, or decree may be held for two years and not longer after its acquisition:
Provided, That nothing herein contained shall be construed to limit section 18, 18a, 19,
and 22 or to prevent any number of lessees under the provisions of this Act from
combining their several interest so far as may be necessary for the purpose of
constructing and carrying on the business of refinery, or of establishing and constructing
as a common carrier a pipe line or lines of railroads to be operated and used by them
jointly in the transportation of oil from their several wells, or from the wells of other
lessees under this Act, or the transportation of coal or to increase the acreage which may
be acquired or held under section 17 of this Act: provided further, That any combination
for such purpose of purposes shall be subject to the approval of the Secretary of the
Interior on application to him for permission to form the same: And provided further,
That for the purpose for more

Sec. 17
ACREAGE

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

26

Properly conserving the natural resources of any single oil or gas pool or field, permittees
and lessees thereof and their representatives may unit with each other or jointly or
separately with others in collectively adopting and operating under a cooperative or unit
plan of development or operation of said pool or field, whenever determined and certified
by the Secretary of the Interior to be necessary or advisable in the public interest, and the
Secretary of the Interior is thereunto authorized in his discretion, with the consent of the
holder of leases or permits involved, to establish, alter, change or revoke drilling,
producing, and royalty requirements of such lease or permits, and to make such
regulations with reference to such lease and permits with like consent on the part of the
leases or lessees and permittees in connection with the institution and operation of any
such cooperative or unit plan as he may deem necessary or proper to secure the proper
protection of such public interest: And provided further, That when any permit has been
determined to be wholly or in part within the limits of a producing oil or gas field which
permit has been included, with the approval of the Secretary of the Interior, in a unit
operating agreement or other plan under this Act the Secretary of the Interior may issue a
lease for the area of the permit so included in said plan without further proof for
discovery: Provided further, That the Secretary of the Interior is hereby authorized on
such conditions as he may prescribe, to approve operating, drilling, or development
contracts made by one or more permittees or lessees in oil and gas leases or permits, with
one or more persons, associations, or corporations, whenever in his discretion and
regardless of acreage limitations, provided for in this Act, the conservation of natural
products or the public convenience or necessity may require it or the interest of the united
States may be best subserved thereby: And provided further, That except as herein
provided, if any of the lands or deposits leased under the provisions of this Act shall be
subleased, trusteed, possessed, or controlled by any device permanently, temporarily,
directly, indirectly, tacitly, or in any manner whatsoever, so that they form of an unlawful
trust, with consent of lessee, or form the subject of any contract or conspiracy in restraint
of trade in the mining or selling of coal, phosphate, oil, oil shale, gas, or sodium entered
into by the lessee, or any agreement or understanding, written, verbal, or otherwise, to
which such lessee shall be a party, of which his or its output is to be or become the
subject to control the price or prices thereof or of any holding for such lands by any
individual, partnership, association, corporation, or control thereof shall be forfeited by
appropriate court proceeding; And provided further, that nothing in this Act shall be
construed as affecting existing lease within the borders of the Naval Petroleum Reserves
or agreement concerning operations there under or in relation to the same, but the
Secretary of the Navy is hereby authorized, with the consent of the President, to enter
into agreement such as those provided for herein, which agreements shall not, unless
expressed therein, operate to extend the term of any lease affected thereby.”
Approved, March 4, 1931.

27

ACT OF FEBRUARY 9, 1933

ACT OF FEBRUARY 9, 1939

To further amend the Act approved February 25, 1920, entitled “An Act to promote the
mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain.”
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That the Act approved February 25, 1920 (41 Stat. L.
487), entitled “An Act to promote the mining of coal, phosphate, oil, oil shale, gas, and
sodium on the public domain,” be, and the same is hereby, further amended by adding
thereto the following section:
“Sec.39. In the event the Secretary of the interior , in the interest of conservation, shall Sec.39.: ADDED
direct or shall assent to the suspension of operations and production of coal, oil, and/or
SUSPENSION
gas under any lease granted under the terms of this Act, any payment of acreage rental
prescribed by such lease likewise shall be suspended during such period of suspension of
operations and production; and the term of such lease shall be extended by adding any
such suspension period thereto: Provided, That nothing in this Act shall be construed as
affecting existing leases within the borders of the naval petroleum reserves and naval oilshale reserves.”
Approved, February 9, 1933.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

28

ACT OF JUNE 16, 1934

ACT OF JUNE 16, 1934

To amend the Mineral Lands Leasing act of 1920 with reference to oil-or gasprospecting permits and leases
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That the Act entitled “AN Act to promote the mining of
coal, phosphate, oil, oil shale, gas and sodium on the public domain”, approved February
25, 1920, as amended, is amended by adding the following new section:
“Sec.40. (a) All prospecting permits and leases for oil or gas made of issued under the
provisions of this Act shall be subject to the condition that in case the permittee or lessee Sec. 40: added
strikes water while drilling instead of oil or gas, the Secretary of the Interior may, when
Water Wells
such water is of such quality and quantity as to be valuable and useable at a reasonable
cost for agricultural, domestic, or other purposes, purchase the casing in the well at the
reasonable value thereof to be fixed under rules and regulations to be prescribed by the
Secretary: Provided, that the land on which such well is situated shall be reserved as a
water hole under section 10 of the Act of December 29, 1916.
“(b) In cases where water wells producing such water have heretofore been or may
hereafter be drilled upon lands embraced in any prospecting permit or lease heretofore
issued under the Act of February 25, 1920, as amended, the Secretary may in like manner
purchase the casing in such wells.
“(c) The Secretary may make such purchase and may lease or operate such wells for
the purpose of producing water and of using the same on the public lands or of disposing
of such water for beneficial use on other lands, and where such wells have heretofore
been plugged or abandoned or where such wells have been drilled prior to the issuance to
any permit or lease by persons not in privity with the permittee, or lessee, the Secretary
may develop the same for the purposes of this section: Provided, That owners or
occupants of lands adjacent to those upon which such water wells may be developed shall
have a preference right to make beneficial use of such water.
“(d) The Secretary may use so much of any funds available for the plugging of wells,
as he may find necessary to start the program provided for by this section, and thereafter
he may use the proceeds from the sale or other disposition of such water as a revolving
fund appropriated for such purpose.
“(e) Nothing in this section shall be construed to restrict operations under any oil or
gas lease or permit under any other provisions of this Act.”
Approved, June 16, 1934.
NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

29

ACT OF AUGUST 21, 1935

ACT OF AUGUST 21, 1935

To amend an Act entitled “An Act to promote the mining of coal, phosphate, oil, oil
shale, gas, and sodium on the public domain”, approved February 25, 1920 (41 Stat, 437;
U.S.C., title 30, secs. 185, 221, 223, 226), as amended.
Be it enacted by the Senate and House of Representative of the United States of
America in Congress assembled, That sections 13, 14, 17, and 28 of the Act entitled “An
Act to promote the mining of coal, phosphate, oil, oil shale, gas, and sodium on the
public domain”, approved February 25, 1920 (41 Stat, 437; U.S.C., title 30, secs. 185,
221, 223, 226), as amended, are amended top read as follows:
“Sec.13. That the Secretary of the Interior is hereby authorized, and directed, under
Sec. 13
such necessary and proper rules and regulations as he may prescribe, to grant to any
TWO YEARS
applicant qualified under this Act a prospecting permit, which shall give the exclusive
ACREAGE
right, for a period not exceeding two years, to prospect for oil or gas upon not to exceed
two thousand five hundred and sixty acres of land wherein such deposits belong to the
United States and are not within any known geological structure of a producing oil or gas
field upon condition that are permittee shall begin drilling operations within six months
from the date of the permit, and shall, within one year from and after the date of permit,
drill one or more wells for oil or gas to a depth not less than five hundred feet each,
unless valuable deposits of oil or gas shall be sooner discovered mans shall, within two
years from date of the permit, drill for oil or gas to an aggregate depth of not less than
two thousand feet unless valuable deposits of oil or gas shall be sooner discovered:
Provided, That said application was filed ninety days prior to the effective sate of this
amendatory Act. IT being the intention of Congress that there shall be no discrimination
as between applicants for prospecting permits, the Secretary of the Interior is directed, in
every case where one or more permits have been issued, to issue permits to all other
applicants for prospecting permits on the same structure, even though one or more of the
permittees have developed the said structure into a producing oil or gas field, if said
application for permit was field prior to the development of such structure into a
producing oil or gas field, and said applicant has otherwise complied with the law:
Provided further, That when such permit is issued upon any structure after discovery, the
royalty to be paid upon the preferential lease provided for in section 14 hereof shall be 1per centum in amount or value of the production and annual payment of a rental as
provided in said section 14. No prospecting permit shall be granted upon any application
ROYALTY
field after ninety days prior to the effective sate of this amendatory Act. The Secretary of
the Interior may, if he shall find that the permittee shall been unable with the exercise of
diligence to test the land in the time granted by the permit, extend any such permit for
such time, not exceeding two years, and upon such conditions as he shall prescribe:
Provided, That all permits outstanding on the effective sate of this amendatory Act,
which on said date shall not be subject to cancellation for violation of the law or
operating regulations and which have theretofore been extended by the Secretary of the
Interior, shall be,
NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

30

LOCATIONS

and the same hereby, extended until December 31, 1937, subject to the applicable
conditions of such prior extension: Provided further, That the Secretary of the Interior is
hereby authorized, to extend for an additional period of not to exceed one year any permit
on which diligence has been exercised or on which drilling or prospecting has been
suspended at the direction of the Secretary during the extension period hereby granted,
but no extension of any permit beyond December 31, 1938, shall be granted under
authority of this Act, or any other Act. Whether the lands sought in any such application
and permit are surveyed or unsurveyed the applicant shall, prior to filling his application MONUMENTS
for permit, locate such lands in a reasonably compact form and according to the legal
subdivisions of the public-land surveys if the land to be surveyed; and in an
approximately square or rectangular tract if the land be an unsureveyed tract, the length
of which shall not exceed two and one-half times its width, and if he shall cause to be
erected upon the land for which a permit is sought a monument not less than four feet
high, at some conspicuous place thereon, not shall post a notice in writing on or near said
monument, stating that an application for permit will be made within thirty days after
date of posting said notice, the name of applicant, the date of notice, and such a general
description of the land to be covered by such permit by reference to courses and distances
from such monument and such other natural objects and permanent monuments as will
reasonably identify the lands, stating the amount thereof in acres, he shall during the
period of thirty days following such marking and posting, be entitled to a preference right
over others to a permit for the land so identified. The applicant shall, within ninety days
after receiving a permit, mark each of the corners of the tract described in the permit
upon the ground with substantial monuments, so that the boundaries can be readily traced PREFERENCE RIGHT
on the ground, and shall post in a conspicuous place upon the lands a notice that such
permit has been granted and a description of the lands covered thereby: Provided further,
That in the Territory of Alaska prospecting permits not more than five in number may be
granted to any qualified applicant for periods not exceeding four years, actual drilling
operations shall begin within two years from date of permit, and oil and gas wells shall be
drilled to a depth of not less than five hundred feet, unless valuable deposits of oil and
gas shall be sooner discovered, within four years from date of permit: provided further,
That in said Territory the applicant shall have preference right over others to a permit for
land identified by temporary monuments and notice posted on or near the same for six
months following such marking and posting, and upon receiving a permit he shall mark
the corners of the tract described in the permit upon the ground with substantial
monuments within one year after receiving such permit: Provided further, That any one
person holding a permit to prospect for oil or go as which not be

31

subject to cancellation for violation of the law or operating regulations or which shall
have been extended under the authority of this or any other Act, in force on or after the
effective date of this amendatory Act, or for which timely and acceptable application for
extension shall have been filed prior, to said date, shall have the right prior to the
termination for such permit to exchange the same for a lease to the area described in the
permit without proof of discovery, at a royalty of not less than 12 ½ per centum or value
of the production, to be determined by the Secretary of the Interior by general rule under
such other conditions as are fixed in section 17 of the Act: Provided further, That no such
lease shall e subject to the acreage limitations of section 27 of this Act, as mended, until
one year after the discovery of valuable deposits of oil or gas thereon: Provided further,
that any application for any prospecting permit field after ninety days prior to the
effective date of this amendatory Act shall be considered as an application for lease under
section 17 hereof: and provided further, That upon leases so granted in lieu of existing
permits of granted to applicants for permits, no rentals shall be payable for the first two
leases years, unless valuable deposits of oil or gas are sooner discovered within the
boundaries of such lease.
“Sec.14. That upon establishing to the satisfaction of the Secretary of the Interior that
valuable deposits of oil or gas have been discovered within the limits of the land
embraced in any permit, the permittee shall be entitled to a lease for one-fourth of the
land embraced in the prospecting permit: Provided, That the permittee shall be granted a
lease for as much as one hundred and sixty acres of said lands, if there be that number of
acres within the permit. The area to be selected by the permittee, shall be in reasonably
compact form and, if surveyed to be described by the legal subdivisions of the publicland surveys; if unsurveyed, to be surveyed by the Government at the expense of the
applicant for lease in accordance with rules and regulations to be prescribed by the
Secretary of the Interior, and the lands leased shall be conformed to and be taken in
accordance with the legal subdivisions of such surveys; deposits made to cover expense
of surveys shall be deemed appropriated for that purpose, and any excess deposits may be
repaid to the person or persons making such deposit or their legal representatives. Such
leases shall be for a term of twenty years upon a royalty of 5 per centum in amount or
value of the production and the annual payment in advance of a rental of $1 per acre, the
rental paid for any one year to be credited against the royalties as they accrue for that
year, and shall continue in force otherwise as prescribed in section 17 hereof for leases
issued prior to the effective date of this amendatory Act. The permittee shall also be
entitled to a preference right to a lease for the remainder of the land in his prospecting
permit at a royalty of not less than 12 ½ per centum in amount or value of the production
nor more than the royalty rate prescribed by regulation in force on January 1, 1935, for
secondary leases issued under this section, and under such other conditions as are fixed
for oil or gas leases issued under section 17 of this Act the royalty to be determined by
competitive bidding or fixed by such other method as

Sec. 14
VALUABLE DEPOSITS
LEASE ACREAGE

20 YEAR LEASE TERMS

PREFERENCE RIGHT
ROYALTY

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

32

the Secretary may by regulations prescribe: Provided further, That the Secretary shall
have the right to reject any or all bids.
“Sec.17. All lands subject to disposition under this Act which are known or believed to
contain oil or gas deposits, except as herein otherwise provided, may be leased by the
Secretary of the Interior after the effective date of this amendatory Act, to the highest
responsible qualified bidder by competitive bidding under general regulations. Such
lands shall be leased in unites of not exceeding six hundred and forty acres, which shall
be as nearly compact in form as possible. Such leases shall be conditioned upon the
payment by the lessee of such bonuses may be accepted and of such royalty as may be
fixed in the lease, which shall be not less than 12 ½ per centum in amount or value of the
production and the payment in advance of a rental to be fixed in the lease of not less than
25 cents per acre per annum, which rental except as otherwise herein provided shall not
be waived, suspended, or reduced unless and until a valuable deposit of oil or gas shall
have been discovered within the lands leased: Provided, That the rental paid for any one
year shall be credited against the royalties as they accrue for that year: Provided further,
That in the event the Secretary of the Interior shall direct or shall assent to the suspension
of operation or of production of oil or gas under any such lease, any payment of acreage
rental as herein provided shall likewise be suspended during such period of suspension of
operations or production: And provided further, That in the case of lease valuable only
for the production of gas the Secretary of the Interior upon showing by the lessee that the
lease cannot be successfully operated upon such rental or upon the royalty provided in the
lease, may ,waive, suspend, or reduce such rental or reduce such royalty.
“The Secretary of the Interior, for the purpose of more properly conserving the oil or
gas resources of any area, field, or pool, may require that leases hereafter issued under
any section of this Act be conditioned upon an agreement by the lessee to operate, under
such reasonable cooperative or unit plan for the development and operation of any such
area, field, or pool as Secretary may determine to be practicable and necessary or
advisable, which plan shall adequately protect the rights of all parties in interest,
including the United States: Provided, That all leases operated under such plan approved
or prescribed by said Secretary shall be excepted in determining holding or control under
the provisions of any section of this Act.
“Leases hereafter issued under this section shall be fore a period of five years and so
long thereafter as oil or gas in produced in paying quantities when the lands to be leased
are not within any know geological structure of a producing oil or gas field, and for a
period of ten years and so long thereafter as oil or gas is produced in paying quantities
when the lands to be leased are within any known geological structure of a producing oil
or gad field: Provided, that no such lease shall be deemed to expire by reason of
suspension of prospecting, drilling, or production pursuant to any order or consent of the
said Secretary: Provided further, That the person first making applications for the lease of
any lands not within any known geological structure of a producing oil or gas field who is
qualified to hold a lease under this Act, including applicants for permits whose

Sec. 17
COMPETITIVE BIDDING

UNIT PLAN

LANDS NOT WITHIN KGS

KGS

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

33

applications were filed after ninety days prior to the affective date of this amendatory Act
shall be entitled to a preference right over others to a lease of such lands without
competitive bidding at a royalty, in the case of oil, of 12 ½ per centum in amount of
value of the production when the said productions does not exceed fifty barrels per well
per day for the calendar month and of not less than 12 ½ per centum in amount or value
of the production when the said production exceeds fifty barrels per well per day for the
calendar month, and, in the case of gas, at a royalty of 12 ½ per centum in amount or
value of the production when the said production does not exceed five million cubic feet
per well per day for the calendar month and, when the said production exceeds five
million cubic feet per well per day for the calendar month, at a royalty of not less than 12
½ per centum in amount or value of the production.
“Leases issued prior to the effective date of this amendatory Act shall continue in force
and effect in accordance with the terms of such leases and the laws under which issued:
Provided, That any such lease that has become the subject of a cooperative or unit plan of
development or operation, or other plan for the conservation of the oil and gas of a single
area, field, or pool, which plan has the approval of the Secretary of the Department or
Departments having jurisdiction over the Government lands included in said plan as
necessary or convenient in the public interest, shall continue in force beyond said period
of twenty years until the termination of such plan: And provided further, That said
Secretary or Secretaries shall report all leases so continued to Congress at the beginning
of its next regular session after the date of such continuance.
“Any cooperative or unit plan of development and operation, which includes lands
UNIT PLAN
owned by the United States, shall contain a provision whereby authority, limited as
therein provided, is vest in the Secretary of the department or departments having
jurisdiction over such land to alter or modify from time to time in his discretion the rate
of prospecting and development and the quantity and rate of production under said plan.
The Secretary of the Interior is authorized whenever he shall deem such action necessary
or in the public interest, with the consent of lessee, by order to suspend or modify the
drilling or producing requirements of any oil and gas lease not subject to such a
cooperative or unit plan, and no lease shall be deemed to expire by reason of the
suspension of production pursuant to any such order.
“Whenever it appears to the Secretary of the Interior that wells drilled upon lands not
owned by the United States are draining oil or gas from lands or deposits owned in whole
or in part by the United States, the Secretary of the Interior is hereby authorized
DRAINAGE
empowered to negotiate agreements whereby the United States or the United States and
its permittees, lessees, or grantees shall be compensated for such drainage, such
agreements to be made with the consent of the permittees and the lessees affected
thereby.
“Whenever the acreage daily production of the oil wells on an entire leasehold or on
ROYALTY REDUCTION
any tract or portion thereof segregated for royalty purposes shall not exceed ten barrels
per well per day, or where the cost of production of oil or gas I such as to rent further

34

production economically impracticable the Secretary of Interior, for the purpose of
encouraging the greatest ultimate recovery of oil and in the interest of conservation of
natural resources, is authorized to reduce the royalty on future production when in his
judgment the wells cannot be successfully operated upon the royalty fixed in the lease.
The provision of this paragraph shall apply to all oil and gas leases issued under this Act,
including those within an approved cooperative or unit plan of development and
operation.
“Any lease issued after the effective date of this amendatory Act under the provisions
of his section, except those earned as a preference right as provided in section 14 hereof,
shall be subject to cancellation by the Secretary of the Interior after thirty days; notice
upon the failure of the lessee to comply with any of the provisions of the lease, unless or
until the land covered by any such lease is known to contain valuable deposits of oil or
gas. Such notice in advance of cancellation shall be sent the lease owner by registered
letter directed to the lease owner’s record post-office address, and in case such letter shall
be returned as undelivered, such notice shall also be posted for a period of thirty days in
the United States Land Office for the district in which the land covered by such lease is
situated, or in the event that there is no district land office of such leased land, then in the
post office nearest such land. Leases covering lands known to contain valuable deposits
of oil or gas shall be canceled only in the manner provided in section 31 of this Act.
“Sec.28. That right-of-way through the public lands, including the forest reserves of
the United States, may be granted by the Secretary of the Interior for pipe-line purposes
for the transportation of oil or natural gas to any applicant possessing the qualifications
provided in section 1 of this Act, to the extent of the ground occupied by the said pipe
Sec. 28
line and twenty-five feet on each side of the same under such regulations and conditions
as to survey, location, application, and use as may be prescribed by the Secretary of the
RIGHTS-OF-WAY
Interior and upon the express condition that such pipe lines shall be constructed,
operated, and maintained as common carriers and shall accept, convey, transport, or
purchase without discrimination, oil or natural gas produced from Government lands in
the vicinity of the pipe line in such proportionate amounts as the Secretary of the Interior
may, after a full hearing with due notice thereof to the interested parties and a proper
finding of facts, determine to be reasonable: Provided, That the Government shall in
expires terms reserve and shall provide in every lease of oil lands hereunder that lessee,
assignee, or beneficiary, if owner, or operator or owner of a controlling interest in any
pipe line or of any company operating the same which may be operated accessible rates
and without discrimination accept and convey the oil of the Government or of any citizen
or company not the owner of any pipe line, operating a lease or purchasing gas or oil
under the provisions of this Act: Provided further, That no right-of-way shall hereafter be
granted over said lands for the transportation of oil or natural gas except under and
subject to the provisions, limitations, and

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

35

conditions of this section. Failure to comply with the provisions of this section or the
regulations and conditions prescribed by the Secretary of the Interior shall b ground for
forfeiture of the grant by the United States district court for the district in which the
property, or some part thereof, is located in an appropriate proceedings.”
Sec. 2
Sec.2. (a) That the Secretary of the Interior is authorized to issue new lease to lessee
holding oil or gas lease under any of the provisions of this Act at the time this
amendatory Act becomes effective, such new leases to be in lieu of the lease then held by
ROYALTY
such lessees and to be at a royalty rate of not less than 12 ½ per centum in amount or
value of the production and upon such other terms and conditions as the Secretary of the
Interior shall be general rule prescribe: Provided, That no limitation of acreage not
provided for under the law or regulations under which any such old lease was issued shall
be applicable to any such new lease.
(b) Nothing contained in this amendatory Act shall be construed to affect the validity
of oil and gas prospecting permits of lease previously issued under the authority of said
Act of February 25, 1920, as amended, and in existence at the time this amendatory Act
becomes effective, or impair any rights or privileges which have accrued under such
permits or leases.
Sec. 3
Sec.3. That nothing in this amendatory Act shall be construed as affecting any lands
within the borders of the naval petroleum reserves and naval oil-shale reserves or
NAVAL PETROLEUM RESERVES
agreements concerning operations thereunder or in relations to the same, but the
Secretary of the Navy is hereby authorized, with the consent of the President, to enter
NAVAL OIL-SHALE RESERVES
into agreements such as those provided for under the Act of March 4, 1931 (46 Stat.
1526), which agreement shall not, unless expressed therein, operate to extend the terms of
any lease affected thereby.
Approved, August 21, 1935.
NOTE: Section 2 was REPEALED by the Act of 8/8/46.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE
footnotes listed under the section number to locate subsequent amendments to each
section.

36

ACT OF JULY 8, 1940

ACT OF JULY 8, 1940

Relating to rentals in certain oil and gas lease issued under authority of the Act of
February 25, 1920, as amended, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That the Secretary of the Interior, in the case of lands
not within any known geologic structure of a productive oil or gas field, shall waive the
rentals stipulated in oil and gas lease issued pursuant to section 17 of the Act of February
25, 1920, as amended by the Act of August 21, 1935 (49 Stat. 647), for the second and
third lease years, unless a valuable deposit of oil or gas be sooner discovered.
Approved, July 8, 1940.

Sec. 17
LANDS NOT WITHIN KGS

NOTE: REPLEAED by Act of 8/8/46

ACT OF JULY 29, 1940

ACT OF JULY 29, 1942

To grant a preference right to certain oil and gas lessees
NONCOMPETITIVE LEASES

Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That upon the expiration of the five-year term of any
noncompetitive oil and gas lease issued pursuant to the provisions of the Act of August
21, 1935 (49 Stat. 674), amending the Act of February 25, 1920m and maintained in
accordance with the applicable statutory requirements and regulations, the record title
holder shall be entitled to a preference right over others to a new lease for the same land
pursuant to the provisions of section 17 of the Act of February 25, 1920, as amended, and
under such rules and regulations as are then in force, if he shall file application therefore
Sec. 17
within ninety days prior to the date of the expiration of the lease. The preference right
herein granted shall not apply to lands which on the date of the expiration of a lease are
within the known geologic structure of a producing oil or gas field.
Sec.2. The Secretary if the Interior is authorized to make a compromise settlement of
any claim for accrued rental under a lease issued pursuant to the provisions of section 13 Sec. 13
of such Act of February 25, 1920, as amended, in any case in which he determines that it
RENTALS: SETTLEMENTS
would be financially beneficial to the United States to make such a collection of a full
amount of such accrued rental from the lessee is inadvisable because of the lessee’s
financial resources being limited.
Approved, July 29, 1942.

NOTE: Section 1 was REPLEAED by Act of 8/8/46.
NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

37

ACT OF DECEMBER 24, 1942

ACT OF DECEMBER 24, 1942

To encourage the discovery of oil and gas on the public domain during the
continuance of the present war
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That, during the period of the national emergency
proclaimed by the President May 27, 1941 (Proclamation Numbered 2487), upon a
determination by the Secretary of the Interior that a new oil or gas field or deposit has
been discovered by virtue of a well or wells drilled within the boundaries of any lease
issued pursuant to the provisions of the Act, approved February 25, 1920, as amended
(U.S.C., title 30, sec. 181-263), the royalty obligation of the lessee who drills such wells
or wells to the United States as to such new dposits shall be limited for a period of ten
years following the date of such discovery to a flat rate of 12 ½ per centum in amount or
value of all oil or gas produced from the lease.
Approved, December 24, 1942.

38

ROYALTY

ACT OF NOVEMBER 28, 1943

ACT OF NOVEMBER 28, 1944

To authorize the Secretary of the Interior to settle certain claims.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That the Secretary of the Interior is authorized to accept
the surrender of any lease issued pursuant to any of the provisions of the Act of February
25, 1920 (41 Stat, 437; 30 U.S.C., sec.181 and the following), or any amendment thereof,
where the surrender is filed in the General Land Office subsequent to the accrual but
prior to the payment of the yearly rental due under the lease, upon payment of the
accrued rental on a pro rate monthly basis for the portion of the lease year prior to the
filing of the surrender. The authority granted to the Secretary of the Interior by this Act
shall extend only to cases in which he finds that the failure of the lessee to file a timely
surrender of the lease prior to the accrual of the rental was not due to a lack of reasonable
diligence, but it shall not extend to claims or cases which have been referred to the
Department of Justice for purpose of suit.
Approved November 28, 1943.

SURRENDER OF LEASE

ACT OF JULY 13, 1946

ACT OF JULY 13, 1946

To encourage the protect oil refineries not having their own source of supply for
crude oil by extending preference to such refineries in disposing of royalty oil under
the Mineral Lands Leasing Act.
Be it enacted by the Senate and House of Representatives of the United States of America
in Congress assembled, That section 36 of the Act of February 25, 1920 (41 Stat. 451,
U.S.C., 1940 edition, title 30, sec. 192), is amended, in order to assist small business
enterprise by encouraging the operation of oil refineries not having an adequate supply of
crude oil, by adding before the first proviso in the second paragraph thereof the
following: “Provided, That inasmuch as the public interest will be served by the sale of
royalty oil to refineries not having their own source of supply for crude oil, the Secretary
of the Interior, when he determines that sufficient supplied of crude oil and not available
in the open market to such refineries in the sale of oil under the provisions of this section,
for processing or use in such refineries and not for resale in kind, and in so doing may
sell to such refineries at private sale at not less than the market price any royalty oil
accruing or reserved to the United States under leases issued pursuant to this Act, as
amended: Provided further, That in selling such royalty oil and Secretary of the Interior
may at his discretion prorate such oil amount such refineries in the area in which the oil is
produced.”
Approved July 13, 1946.

Sec. 36
OIL REDINERY PREFERENCES

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

39

ACT OF AUGUST 8, 1946

ACT OF AUGUST 8, 1946

To amend the Mineral Leasing Act of February 25, 1920, as amended, in order to.
Promote the development of oil and gas on the public domain, and for other purposes
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 1 of the Act of February 25, 1920 (41 Stat.
437; 30 U.S.C., sec. 181 and the following), as amended be amended to read as follows:
“That deposits of coal, phosphate, sodium, potassium, oil, oil shale, or gas, and lands
containing such deposits owned by the United States, including those in national forest,
but exluding lands acquired under the Act known as the Appalachian Forest Act,
approved March 1, 1911 (36 Stat. 961), and those in incorporated cities, towns, and
villages and in national parks and monuments, those acquired under other Acts
subsequent to February 25, 1920, and lands within the naval petroleum and oil-shale
reserves, except as hereinafter provided, shall be subject to disposition in the form and
manner provided by this Act to citizens of the United States, or to associations of such
citizens, or to any corporation organized under the laws of the United States, or of any
State or Territory thereof, or in the case of coal, oil, oil shale, or gas, to municipalities.
Citizens of another country, the laws, customs, or regulations of which deny similar or
like privileges to citizens or corporations of this country, shall not be stock ownership,
stock holding, or stock control, own any interest in any lease acquired under the
provisions of this Act.
“The United States reserves the ownership of and the right to extract helium from all
gas produced from lands leased or otherwise granted under the provisions of this Act,
under such rules and regulations as shall be prescribed by the Secretary of the Interior:
Provided further, That in the extraction of helium from gas produced from such lands it
shall be so extracted as to cause no substantial delay in the delivery of gas produced from
the well to the purchaser thereof.”
Sec.2. Section 16 of the Act is amended to read as follows:
“Sec.16. That all leases of lands containing oil or gas, made or issued under the
provisions of this Act, shall be subject to the condition that the lessee will, in conducting
his exploration and mining operations, use all reasonable precautions to prevent waste of
oil or gas developed in the land, or the entrance of water though wells drilled by him to
the oil sands or oil-bearing strata, to the destruction or injury of the oil deposits.
Violations of the provisions of this section shall constitute grounds for the forfeiture of
the lease, to be enforced as provided in this Act.”
Sec.3. Section 17 of the Act is amended to read as follows:
“Sec.17. All lands subject to disposition under this Act which are known or believed to
contain oil or gas deposits may be leased by the Secretary of the Interior. When the lands
to be leased are within any known geological structure of a producing oil or gas field,
they shall be leased to the highest responsible qualified bidder by competitive bidding
under general regulations, in unit of not exceeding six

Sec. 1

HELIUM

Sec. 16
PREVENTION OF WASTE

Sec. 17
KGS

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

40

Hundred and forty acres, which shall be as nearly compact in form as possible, upon the
LANDS NOT WITHIN KGS
payments by the lessee of such bonus as may be accepted by the Secretary and of such
royalty as may be fixed in the lease which shall be not less than 12 ½ per centum in
amount or value of the production removed or sold from the lease. When the lands to be
leased are not within any known geological structure of a producing oil or gas field, the
person first making applications for the lease who is qualified to hold a lease under this
Act shall be entitled to a lease of such lands without competitive bidding. Such lease
shall be conditioned upon the payment by the lessee of a royalty of 12 ½ per centum in
amount or value of the production removed or sold from the lease. Leases issued under
this section shall be for a primary term of five years and shall continue so long thereafter
as oil or gas is produced in paying quantities.
“Any lease issued under this Act upon which there is production during or after the
primary term shall not terminate when such production ceases if diligent drilling
operations are in progress on the land under lease during such period of nonproduciton.
“Upon the expiration of the primary term of any noncompetitive lease maintained in
NONCOMPETITIVE LEASE
accordance with applicable statutory requirements and regulations, the record titleholder
thereof shall be entitled to a single extension of a lease, unless then otherwise provided
by law, for such lands covered by it as are not on the expiration date of the lease within
the known geological structure of a producing oil or gas field or withdrawn from leasing
under this section. A withdrawal, however, shall not affect the right of an extension if
actual drilling operations on such lands were commenced prior thereto and were being
diligently prosecuted on such expiration date. No withdrawal shall be effective within
the meaning of this section until ninety days after notice thereof shall be mailed,
registered mail, to each lessee to be affected by such withdrawal. Such extension shall be
for a period of five years and so long thereafter as oil or gas is produced in paying
quantities and shall be subject to such rules and regulations as are in force at the
expiration of the initial five-year term of the lease. No extension shall be granted unless
an application therefore is filed by the record titleholder within a period of ninety days
prior to such expiration date. Any noncompetitive lease which is not subject to such
extension in whole or in part because the lands covered thereby are within the known
geologic structure of a producing oil or gas filed at the date of expiration of the primary
terms of the lease, and upon which firlling operations are being diligently prosecuted on
such expiration date, shall continue in effect for a period of two years and so long
thereafter as oil or gas is produced in paying quantities.
“All leases issued under this section shall be conditioned upon the payment by the
lessee in advance of a rental of not less than 25 cents per acre per annum. A minimum
royalty of $1 per acre in lieu of rental shall be payable at the expiration of each lease year
beginning on or after a discovery of oil or gas in paying quantities on the lands leased:
Provided, That in the case of lands not within any known geological structure of a
producing oil or gas field, the rentals for the second and third lease years shall be waived
unless a valuable deposit of oil or gas be sooner discovered.

41

“Whevenever it appears to the Secretary of the Interior that lands owned by the United
States are being drained of oil or gas by wells drilled on adjacent lands, he is hereby
authorized and empowered to negotiate agreements whereby the United States, or the
United States and its lessees, shall be compensated for such drainage, such agreements to
be made with the consent of the lessees affected thereby and the primary terms of any
lease for which compensatory-royalty is being paid shall be extended by adding thereto a
period equal to the period during which such compensatory royalty is paid.”
Sec.4. The Act is hereby amended by adding a new section to read as follows:
“Sec.17. (a) The secretary of the Interior shall, upon timely application therefore, issue
a new lease in exchange for a twenty-year lease, such new lease to be for a primary terms
of five years and so long thereafter as oil or gas is produced in paying quantities and at a
royalty rate of not less than 12 ½ per centum in amount of value of a production removed
or sold from such leases, except that the royalty rate shall be 12 ½ per centum in amount
or value of the production removed or sold from said leases, as to (1) such leases, or such
part of the lands subject thereto, and the deposits underlying the same, as are not believe
to be within the productive limits of any producing oil or gas deposits, as such productive
limits are found by the Secretary to exist on the effective date of this Act, and (2) any
production on a lease from an oil or gas deposit which was discovered after may 27,
1941, by a well mined by the Secretary to be a new deposit; and (3) any production on or
allocated to a lease pursuant to an approved unit or cooperative agreement from an oil or
gas deposit which was discovered after May 27, 1941, on land committed to such
agreement, and which is determined by the Secretary to be a new deposit, where such
lease, or a lease for which is exchanged, was included in such agreement at the time of
discovery, or was included in a duly executed and filed application for the approval of
such agreement at the time of discover.”
Sec.5. The Act is hereby amended by adding a new section to read as follows:
“Sec.17. (b) For the purpose of more properly conserving the natural resources of any
oil or gas pool, field, or like area, or any part thereof (whether or not any part of said oil
or gas pool, field, or like area, is then subject o any cooperative or unit plan of
development or operation), lessees thereof and their representatives may unite with each
other, or jointly or separately with others, in collectively adopting and operation under a
cooperative or unit plan of development or operation of such pool, field, or like area, or
any part thereof, whenever determined and certified by the Secretary of the Interior to be
necessary or advisable in the public interest. The Secretary is thereunto authorized, in his
discretion, with the consent of the holders of lease involved, to establish, alter, change, or
revoke frilling, producing, rental, minimum royalty, and royalty requirements of such

Sec. 17(a)
NEW LEASE
ROYALTY

Sec. 17(b)
UNIT PLAN

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

42

leases and to make such regulations with reference to such leases, with like consent on
the part of the lessees, in connection with the institution and operation of any such
cooperative or unit plan as hey may deem necessary or proper to secure the proper
protection of the public interest. The Secretary may provide that oil and gas leases
hereafter issued under this Act shall contain a provision requiring ht lessee to operate
under such a reasonable cooperative or unit plan, and he may prescribe such a plan under
which such lessee shall operate, which shall adequately protect the rights of all parties
interest, including the United States.
“Any plan authorized by the preceding paragraph, which includes lands owned by the
United States, may, in the discretion of the Secretary, contain a provision whereby
authority is vest in the Secretary of the Interior, or any such person, committee, or State
or Federal officer or agency as may be designated in the plan, to alter or modify from
time to time the rate of prospecting and development and the quantity and rate of
production under such plan. All leases operated under any such plan approved or
prescribed by the Secretary shall be excepted in determining holding or control under the
provisions of any section of this Act.
“When separate tracts cannot be independently developed and operated in conformity
with an established well-spacing or development program, any lease, or a portion thereof,
may be pooled with other lands, whether or not owned by the united States, under a
communitization or drilling agreement providing for an apportionment of production or
royalties among the separate tracts of land comprising the drilling or spacing unit when
determined by the Secretary of the Interior to be in the public interest, and operations or
production pursuant to such an agreement shall be deemed to be operations or production
as to each such lease committed thereto.
“Any lease issued for a term of twenty years, or any renewal thereof, or any portion of
such lease that has become the subject of a cooperative or unit plan of development or
operation of a pool, field or like area, which plan has the approval of the Secretary of the
Interior, shall continue in force until the termination of such plan. Any other lease issued
under any section of this Act which is committed to any such plan that contains a general
provision for allocation of oil or gas shall continue in force and effect as to the land
committed so long as the lease remains subject to the plan, provided oil or gas is
discovered under the plan prior to the expiration date of the primary term of such lease.
The minimum royalty or discovery rental under any lease that has becomes subject to any
cooperative or unit plan of development or operation, or other plan that contains a general
provisions for allocation of oil or gas, shall be payable only with respect to he lands
subject to such lease to which oil or gas shall be allocated under such plan. Any lease
which shall be eliminated from any such approved or prescribed plan, or from any
communitization of drilling agreement authorized by this section, and any lease which
shall be in effect at the termination of any such approved or prescribed plan, or at the
termination of any such communitization or drilling agreement, unless relinquished, shall
continue in effect for the original term thereof, but for not less than two year, and so long
thereafter as oil or gas is produced in paying quantities.

43

POOLING

WASTE AVOIDANCE

“The Secretary of the Interior is hereby authorized, on such conditions as he may
prescribe, to approve operating, drilling, or development contracts made by one or more
lessees of oil or gas leases, with one or more persons, associations, or corporations,
whenever, in his discretion and regardless or acreage limitations provided for in this Act,
the conservation of natural products or the public convenience or necessity may require it
or the interest of the United States may be best subserved thereby.
“The Secretary of the Interior, to avoid waste or to promote conservation of natural
resources, may authorize the subsurface storage of oil or gas, whether or not produced
from federally owned lands, in lands leased or subject to lease under this Act. Such
authorization may provide for the payment of a storage fee or rental on such stored oil or
gas, or, in lieu of such fee or rental, for a royalty other than that prescribed in the lease
when such stored oil or gas is produced in conjunction with oil or gas not previously
produced. Any lease on which storage is so authorized shall be extended at least for the
period of storage and so long thereafter as oil or gas not previously produced in produced
in paying quantities.”
Sec.6. Section 27 of the Act is amended to read as follows:
“Sec.27. No person, association, or corporation, except as herein provided, shall take
or hold coal, phosphate, or sodium lease or permits during the life of such leases in any
one State, exceeding in the aggregate acreage two thousand five hundred and sixty acres
for each of said minerals; and no person, association, or corporation, except as herein
provided, shall take or hold at one time oil or gas leases exceeding in the aggregate
fifteen thousand three hundred and sixty acres granted hereunder in any one State. No
person, association, or corporation shall take of hold at one time any interest or interest as
a member of an association or associations or as a stockholder of a corporation or
corporations holding a lease or leases, permit or permits, under the provisions hereof,
which, together with the area embraced in any direct holding of a lease of leases, permit
or permits, under this Act, or which, together with any other interest or interest as a
member of an association or associations or as a stockholder or a corporation or
corporations holding a lease or leases, permits or permits, under the provisions thereof for
any kind of minerals hereunder, exceeds in the aggregate an amount equivalent to the
maximum number of acres of the respective kinds of mineral allowed to any one lessee or
permittee under this Act. For the purpose of this Act, no contract for development and
operation for any lands leased hereunder, whether or not coupled with an interest in such
lease, nor any lease or leases owned in common by two or more persons, shall be deemed
to create a separate association under this section between or among such contracting
parties, or the person owning such lease or leases in common, but the proportionate inters
of each such person shall be charged against the total acreage permitted to be held by
such person under this Act: Provided, That the total acreage so held in common by two or
more persons shall not exceed, in the aggregate, an amount equivalent to the maximum
number of acres of the respective kind of minerals lowed to any

SUBSURFACE STORAGE OF
OIL AND GAS

Sec. 27
ACREAGE

MAXIMUM ACREAGE

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

44

one lessee or permittee under this Act. The interest of an options under a nonrenewable
option to purchase or otherwise acquire one or more oil or gas lease (whether then or
thereafter issued), or any interest therein, geophysical exploration, shall not, prior to the
exercise of such option, be a taking or holding or control under the acreage limitation
provisions of any section of this Act. No such option shall be entered unto after June 1,
1946, for a period of more than two years, without the prior approval of the Secretary of
the Interior, and no person, association, or corporation shall hold at one time such options
of more than one hundred thousand acres in any one State: Provided, however, That
nothing in this section shall be construed to invalidate options take prop to June 1, 1946,
and on which such geological or geophysical exploration has been actually made, and
which are exercised within two years after the passage of this Act. Each holder of any
such option shall file with the Secretary within ninety days after the 30th day of June and
the 31st day of December in each year a statement under oath showing as of said dates (1)
name of optionor and serial number of lease of application for lease, (2) date and
expiration date of each option, (3) number of acres covered by each option, and (4)
aggregate number of options held in each State and total acreage subject to said potions
in each State. If any interest in any lease is owned or controlled, directly or indirectly, by
means of stock or otherwise, in violation of any of the provisions of this Act, the lease
may be canceled, or the interest so owned may be forfeited, or the person so owning or
controlling the interest may be compelled to dispose of the interest, in any appropriate
proceeding instituted by the Attorney General. Such a proceeding shall be institued in
the United States district court for the district in which the leased property of some part
thereof is located or in which the lease owner may be found, except that any ownership or
interest forbidden in this Act which may be acquired by descent, will, judgment , or
decree may be held for two years and not longer after its acquisitions. Nothing herein
contained shall be construed to limit section 18, 18a, 19, and 22 or to prevent any number
of lessees under the provisions of this act from combining their several interests so far
may be necessary for the purposes of constructing and carrying on the business of a
refinery, or of establishing and constructing as a common carrier an pipe line or lines of
railroads to be operated and used by them jointly in the transportation of oil from their
several wells, or form the wells of other lessees under this Act, or the transportation of
coal or to increase the acreage which may be acquired of held under section 17 of this
Act: Provided, That any combination for such purpose or purposes shall be subject to the
approval Secretary of the Interior on application to him for permission to form the same.
Except as in this Act provided, if any of the lands or deposits leased under the provisions
of this Act shall be subleased, trusted, possessed, or controlled by any device
permanently, temporarily, directly, indirectly, tacitly, or in any manner whatsoever, so
that they form a part of or are in anywise controlled by an combination in the form of an
unlawful trust, with the consent of the lessee, or form the subject of any contract or
conspiracy in restraint

45

OPTIONS

of trade in the mining or selling of coal, phosphate, oil, oil shale, gas, or sodium entered
into by the lessee, or agreement or under standing, written, verbal, or otherwise, to which
such lessee shall be a party, of which his or its output is to be or become the subject, to
control the price or prices thereof or of any holding of such lands by any individual,
partnership, association, corporation, or control in excess of the amounts of lands
provided in this Act, the lease thereof shall be forfeited by appropriated court
proceedings.”
Sec.7. The Act is hereby amended by adding a new section to read as follows:
Sec. 30(a)
“Sec.30. (a) Notwithstanding anything to the contrary in section 30 hereof, any oil or
gas lease issued under the authority of this Act may be assigned or subleased, as to all or OIL AND GAS LEASES
part of the acreage included therein, subject to final approval by the secretary and as to
ASSIGNED OR SUBLEASED
either a divided or undivided interest therein, to any person or persons qualified to own a
lease under this Act, and any assignment or sublease shall take effect as of the first day of
the lease month following the date of filing in the proper land office of three original
executed counterparts thereof, together with any required bond and proof of the
qualification under this Act of the assignee or sublesse to take or hold such lease or
interest therein. Until such approval, however, the assignor or sublessor and his surety
shall continue to be responsible for the performance of any and all obligations as if no
assignment or sublease has been executed. The Secretary shall disapprove the
assignment or sublease only for the lack of qualification of the assignee or sublessee or
for lack of sufficient bond: Provided, however, That the Secretary may, in his discretion,
disapprove an assignment of a separate zone or deposit under any lease, or of a part of
legal subdivision. Upon approval of any assignment or sublease, the assignee or
sublessee shall be bound by the terms of the lease to the same extend as if such assignee
or sublessee where the original lessee, any conditions in the assignment or sublease to the
contrary notwithstanding. Any partial assignment of any lease shall segregate the
assigned and retained portion thereof, and as above provided, release and discharge the
assignor form all obligations thereafter accruing with respect to the assigned lands; and
such segregated leases shall continue in full force and effect for the primary term of the
original lease, but for not less than two years after the date of discovery of oil or gas in
paying quantities upon any other segregated portion of the lands originally subject to
such lease. Assignments under this section may also be made of parts of leases which are
in their extended term because o production, and the segregated lease of any undeveloped
lands shall continue in full force and effect for two years and so long thereafter as oil or
gas is produced in paying quantities.”
Sec.8. The Act is hereby amended by adding a new section to read as follows:
“Sec.30. (b) Notwithstanding any provisions to the contrary in section 30 hereof, a
Sec.30 (b)
lessee may at any time make and file in the appropriate land office a written
relinquishment of all rights under any oil or gas lese issued under the authority of this ActRELINQUISHMENTS
or of any legal subdivision of the area included within any such lease. Such

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

46

relinquishment shall be effective as of the date of its filing, subject to the continued
obligation of the lessee and his surety to make payment of all accrued rentals and
royalties and to place all wells on the lands to be relinquished in condition for suspension
or abandonment in accordance with the applicable lease terms and regulations; thereupon
the lessee shall be released to all obligations thereafter accruing under said lease with
respect to the lands relinquished, but no such relinquishment shall release such lessee, or
his bond, from any liability for breach of any obligation of the lease, other than an
obligation to drill, accrued at the date of the relinquishment.
Sec.9. Section 31 of the Act is amended to read as follows:
“Sec.31. Except as otherwise herein provided, any lease issued under the provisions of
this Act may be forfeited and canceled by an appropriate proceeding in the United States
district court for the district in which the property, or some part thereof, is located
whenever the lessee fails to comply with any of the provisions of this Act, of the lease, or
of the general regulations promulgated under this Act and in force at the date of the lease;
and the lease may provide for resort to appropriate methods for the settlement of disputes
or for remedies for breach of specified conditions thereof.
“Any lease issued after August 21, 1935, under the provisions of section 17 of this Act
shall be subject to cancellation by the Secretary of the Interior after thirty days’ notice
upon the failure of the lease to comply with any of the provision of the lease, unless or
until the land covered by any such lease is known to contained valuable deposits of oil or
gas. Such notice in advance of cancellation shall be sent the lease owner by registered
letter directed to the lease owner’s record post-office address, and in case such letter shall
be returned as undelivered, such notice shall also be posted for a period of thirty days in
the united States lands office for the district in which the land covered by such lease is
situated, or in the vent that there is no district land office for such district, then in the post
office nearest such lands.”
Sec.10. Section 39 which was added to the Act by the Act of February 9, 1933 (47
Stat.798; 30 U.S.C., sec. 209), is amended to read as follows;
“Sec.39. The Secretary of the Interior for the purpose of encouraging the greatest
ultimate recovery of coal, oil, or gas in the interest of conservation of natural resources is
authorized to waive, suspend, or reduce the rental, or minimum royalty, or reduce the
royalty on an entire leasehold, or on any tract or portion thereof segregated for royalty
purposes, whenever in his judgment it is necessary to do some in order to promote
development, or whenever in his judgment the lease cannot be successfully operated
under the terms provided therein. In the event the Secretary of the Interior, in the interest
of conservation, shall direct or shall assent to the suspension of operations and production
under any lease granted under the terms of this Act, any payment of acreage rental or of
minimum royalty prescribed by such lease likewise shall be suspended during such
period of suspension of operations and production; and the term of such lease shall be
extended by adding any such suspension period

Sec. 31
LEASE FORFEITURE AND
CANCELLATION

Sec. 39
RENTAL OR ROYALTY
REDUCTION OR
SUSPENSION

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

47

thereto. The previsions of this section shall apply to all oil and gas leases issued under
this Act, including those within an approved or prescribed plan for unit or cooperative
development and operation.”
Sec.11. Section 5 of the Act approved February 7, 1927 (44 Stat. 1057; 30 U.S.C., sec. Sec. 5
285), is amended to read as follow:
SECS. 26-38 ARE APPLICABLE
“Sec.5. That the general provisions of sections 26 to88, inclusive, of the Act of
February 25, 1920, entitled ‘ An Act to promote the mining of coal, phosphate, oil, oil
POTASSIUM
shale, gas and sodium on the public domain,’ and thirty-seventh section thereof begin
amended to include deposits of potassium.”
Sec.12. From and after the effective date of this Act, the royalty obligation to the
united States under all leases requiring payment of royalty in excess of 12 ½ per centum,
except leases issued or to be issued upon competitive bidding, is reduced to 12 ½ per
centum in amount or value of production removed or sold from said lease as to (1) such
leases, or such part of the lands subject thereto, and the deposits underlying the same, as
are not believed to be within the productive limits of any oil or gas deposit, as such
productive limits are found by the Secretary to exist on the effective date of this Act, and
(2) any production on a lease from an oil or gas deposit which was discovered after May
27, 1941, by a well or wells drilled within the boundaries of a lease, and which is
determined by the Secretary to be a new deposits; and (3) any production on or allocated
to a lease pursuant to an approved unit or cooperative agreement from an oil or gas
deposit which was discovered after May 27, 1941, on land committed to such
agreements. And which is determined by the Secretary to be a new deposits, where such
lease was included in such agreement at the time of discovery, or was included in a duly
executed and filed application for the approval of such agreement at the time of
discovery.
Sec.13. Nothing in this Act shall be construed as affecting existing leases within the
borders of the naval petroleum reserves, or agreements concerning operations thereunder
or in relation thereto, but the Secretary of the Navy is hereby authorized, with the consent
of the President, to enter into agreements such as those provided for in section 17 (b) of
the Act of February 25, 1920, as mended by this Act, which agreements shall not, unless
expressed therein, operate to extend the term of any lease affected thereby.
Sec.14. The Act of July 8, 1940 (54 Stat. 742; 30 U.S.C., sec. 220a); section 1 of the
Act of July 29, 1942 (56 Stat. 726; 30 U.S.C., sec. 226b), as amended; and section 2 of
REPEAL
the Act of August 21, 1935 (49 Stat. 679; U.S.C., sec 223a), are hereby repealed.
Sec.15. No repeal or amendments made by this Act shall affect any right acquired
under the law as it existed prior to such repeal or amendment, and such right shall be
governed by the law in effect at the time of its acquisition; but any person holding a lease
on the effective date of this Act may, by filing a statement to that effect, elect to have his
lease governed by the applicable provisions of this Act instead of by the law in effect
prior thereto.
Approved August 8, 1946.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

48

ACT OF MAY 27, 1947

ACT OF MAY 27, 1947

To amend section 35 of the Mineral Leasing Act of February 25, 1920 (41 Stat. 437; 30
U.S.C., sec 191), as amended
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 35 of the Act entitled “An Act to promote
the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain”,
approved February 25, 1920 (41 Stat. 437; 30 U.S.C., sec. 191), as amended, is amended
and reenacted to read as follows:
“Sec.35. All money received from sales, bonuses, royalties, and rentals of public lands
under the provisions of this Act shall be paid into the Treasury of the United States; 37 ½
pre centum thereof shall be paid by the Secretary of ht treasury after the expiration of
each fiscal year to the State or the Territory of Alaska within the boundaries of which the
leased lands or deposits are or were located; said moneys to be used by such State,
Territory, or subdivisions thereof for the construction and maintenance of public roads or
for the support of public schools or other public educational institutions, as the legislature
of the State or Territory may direct; and, excepting those from Alaska, 52 ½ per centum
thereof shall be paid into, reserved and appropriated, as a part of the reclamation fund
created by the Act of Congress known as the Reclamation Act; approved June 17, 1902:
Provided, That all moneys which may accrue to the United States under the provisions of
this Act from lands within the naval petroleum reserves shall be deposited in the Treasury
as “miscellaneous receipts”, as provided by the Act of June 4, 1920 (41 Stat. 813), as
amended June 30, 1938 (52 Stat. 1252.34 U.S.C.., sec. 524). All moneys received under
the provisions of this Act not otherwise disposed of by this section shall be credited to
miscellaneous receipts. Nothing herein contained shall be construed to affect the
disposition of proceeds or income derived by the United States from mineral school
sections in the Territory of Alaska as provided fro in the Act of March 4, 1915 (38 Stat.
1214, 1215; 48 U.S.C., sec. 353), as amended.”
Approved May 27, 1947.

Sec. 35
PUBLIC LAND MONEYS
PAYMENT TO STATES

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed under
the section number to locate subsequent amendments to each section.

49

Mineral Leasing Act for Acquired Lands
ACT OF AUGUST 7, 1949

MINERAL LEASING ACT FOR
ACQUIRED LANDS
ACT OF AUGUST 7, 1947

To promote the mining of coal, phosphate, sodium, potassium, oil, oil shale, gas, and
sulfur on lands acquired by the United States.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That this Act may be cited as the “Mineral Leasing Act
for Acquired Lands”.
Sec.2. AS used in this Act “United States” included Alaska. “Acquired lands” or
“lands acquired by the United States” includes all lands theretofore or hereafter acquired
by the United States to which the “mineral leasing laws” have not been extended,
including such lands acquired under the provisions of the Act of March 1, 1911 (88 Stat.
961, 16 U.S.C., sec. 552). “Secretary” mean the Secretary of the Interior. “Mineral
leasing laws” shall mean the Act of October 20, 1914 (38 Stat, 741, 48 U.S.C., sec. 432);
the Act of February 25, 1920 (41 Stat. 437, 30 U.S.C., sec.181); the Act of April 17, 1926
(44 Stat. 301, 30 U.S.C., sec. 271); the Act of February 7, 1927 (44 Stat. 1057, 30 U.S.C.,
sec 281), and all Acts heretofore or hereafter enacted which are amendatory or of
supplementary to any of the foregoing Acts. “Lease” include “prospecting permit” unless
the context otherwise requires.
Sec.3. Except where lands have been acquired by the United States for the
development of the miner deposits, by foreclosure or other-wise for resale, or report as
ACQUIRED LANDS LEASING
surplus pursuant to the provisions of the Surplus Property Act of October 3, 1944 (50
U.S.C., sec. 1611 and the following), all deposits of coal, phosphate, oil, oil shale, gas,
sodium, potassium, and sulfur which are owned or may hereafter be acquired by the
United States and which are within the lands acquired by the United States (exclusive of
such deposits in such acquired lands as are (a) situated within incorporated cities, towns
and villages, national parks or monuments, (b) set apart for military or naval purposes, or
(c) tidelands or submerged lands) may be leased by the Secretary under the same
conditions as contained in the leasing provisions of the mineral leasing laws, subject to
the provision hereof. The provision of the Act of April 17, 1926 (44 Stat. 301), as
heretofore or hereafter amended, shall apply to deposits of sulfur covered by this Act
wherever situated. No mineral deposits covered by this section shall be leased except
with the consent of the head of the executive department, independent establishment, or
instrumentality having jurisdiction over the lands containing such deposit, or holding a
mortgage or deed of trust secured by such lands which is unsatisfied of record, and
subject to such conditions as that official may prescribe of record, to insure the adequate
utilization of the lands for the primary purpose for which they have been acquired or are
being administered: Provided, That nothing in this Act is intended, or shall be construed,
to apply to or in any manner affect any mineral rights, exploration permits, leases or
conveyances nor minerals that are or may be in any tidelands; or submerged lands; or in
lands underlying the three mile zone or belt involved in the case of the United States of
America against the State of California now pending on application for rehearing in the
Supreme Court of the United States; or in lands underlying such three mile zone or belt,
or the continental shelf, adjacent or littoral to any part of the land within the jurisdiction
to of the United States of America.

50

Sec.4. Nothing herein contained shall be deemed or construed to (a) amend, modify, or
change any existing law authorizing or required the sale of acquired lands, or (b)
empower any commission, bureau, or agency of the Government to make a reservation of
the minerals in the sale of any acquired lands: Provided, That any such sale or
conveyance of lands shall be made by the agency having jurisdiction thereof, subject to
any lease theretofore made, covering the mineral deposits underlying such lands:
Provided further, That nothing in this Act is intended, or shall be construed to affect in
any manner any provision of the Act of June 30, 1938 (32Stat. 1252), amending the Act
of June 4, 1920 (41 Stat. 813).
Sec.5. Where the United States does not own all of the mineral deposits under any
MINERAL DEPOSIT OWNERSH
lands sought to be leased and which are affected by this Act, the Secretary is authorized
to lease the interest of the United States in any such mineral deposits when, in the
judgment of the Secretary, the public interest will be best served thereby: subject,
however to the provisions of section 3 hereof. Where the United States does not own any
interest or owns less than a full interest in the minerals that may be produced from any
lands sought to be leased, and which are or will be affected by this Act and where, under
the provisions of its acquisition, the United States is to acquire all or any part of such
mineral deposits in the future, the secretary may lease any interest of the United States
then owned or to be acquired in the future in the same manner as provided in the
preceding sentence.
Sec.6. All receipts derived from leases issued under the authority of this Act shall be
paid into the same funds or accounts in the Treasury and shall be distributed in the same RECEIPTS FROM LEASE
manner as prescribed for other receipts from the lands affected by the lease, the intention
of this provision being that this Act shall not affect the distribution of receipts pursuant to
legislation applicable to such lands: Provided, however, That receipts from leases or
permits for minerals in lands set apart for Indian use, including lands the jurisdiction of
which has been transferred to the Department of the Interior by the Executive order for
Indian use, shall be deposited in a special fund in the Treasury until final disposition
thereof by the Congress.
Sec.7. Upon request by the Secretary, the heads of all executive departments,
LEGAL DESCRIPTION OF
independent establishments, or instrumentalities having jurisdiction over any of the lands
ACQUIRED LANDS
referred to in section 2 of this Act shall furnish to the Secretary the legal description of all
of such lands, and all pertinent abstracts, title papers, and other documents in the
possession of such agencies concerning the status of the title of the United States to the
mineral deposits that may be found in such lands.
Abstracts, title papers, and other documents furnished to the Secretary under this
section shall be recorded promptly in the Bureau of Land Management in such form as
the Secretary shall deem adequate for their preservation and use in the administration of
this Act, whereupon the originals shall be returned promptly to the agency from which
they were received. Duly authenticated copied of any such abstract, title papers, or other
documents may, however, be furnished to the Secretary, in lieu of the originals, in the
discretion of the agency concerned.
Sec.8. Nothing contained in this Act shall be construed to affect the rights of the State
BLM RECORDATION
or other local authorities to exercise any right which they may have with respect to
properties covered by leases issued under this Act, including the right to levy and collect
taxes upon improvements, output of mines, or other rights, property, or assets of any
lessee of the United States.

51

RIGHTS PRIOR TO ACT

Sec.9. Nothing in this Act shall affect any rights acquired by any leases of lands
subject to this Act under the law as it existed prior to the effective date of this Act, and
such rights shall be governed by the law in effect at the time of their acquisition; but any
person qualified to hold a lease who, on the date of this Act, had pending an application
for an oil and gas lease for any lands subject to this Act which on the date the application
was filed was not situated within the known geologic structure of a producing oil or gas
filed, shall have a preference right over others to a lease of such lands without
competitive bidding. Any person holding a lease on lands subject hereto, which lease
was issued prior to the effective date of this Act, shall be entitled to exchange such lease
for a new lease issued under the provision of this Act, at any time prior to the expiration
of such existing lease.
Sec.10. The Secretary of the Interior is authorized to prescribe such rules and
regulations as are necessary and appropriate to carry out the purposes of this Act, which
rules and regulations shall be the same as those prescribed under the mineral leasing laws
to the extent that they are applicable.
Approved August 7, 1947.

ACT OF JUNE 1, 1948

ACT OF JUNE 1, 1948

To amend the Mineral Leasing Act of February 25, 1920. to permit the exercise of certain
options on or before August 8, 1950
Be it enacted by the Senate and House of Representatives of the United States of America
in Congress assembled, That the second proviso of section 27 of the Act entitled “An Act
to promote the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public
domain”, approved February 20, 1920, as amended (U.S.C., 1946 edition, title 30, sec.
184), is hereby amended by striking out “within two years after the passage of this Act”
and inserting in lieu thereof “on or before August 8, 1950.”
Approved June 1, 1948.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

52

Sec. 27
ON OR BEFORE AUG. 8, 1950

ACT OF JUNE 3, 1948

ACT OF JUNE 3, 1948

To amend the Mineral Leasing Act of February 25, 1920, and the Potassium Act
of February 7, 1927, in order to promote the development of certain minerals on
public domain; and for other purpose.

the

Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 2 of the Act entitled “An Act to promote
the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain”,
approved February 25, 1920, as amended (41 Stat. 438, 30 U.S.C., secs. 201 and 202), is
amended to read as follows:
“Sec.2. (a) The Secretary of the Interior is authorized to divide any of the coal lands or
Sec. 2
the deposits of coal, classified and unclassified, owned by the Untied States, outside of
COAL LEASING TRACTS
the Territory of Alaska, into leasing tracts of forty acres each, or multiples thereof, and in
such form as, in his opinion, will permit the most economical mining of the coal in such
ACREAGE
tracts, but in no case exceeding two thousand five hundred and sixty acres in any one
leasing tracts, and thereafter he shall, in his discretion, upon the request of any qualified
applicant or on his own motion, form time to time, offer such lands of deposits of coal for
leasing, and shall award leases thereon by competitive bidding or by such other methods
as he may be general regulations adopt, to any qualified applicant. He is hereby
authorized, in awarding leases for coal lands improved and occupied or claimed in good
faith, prior to February 25, 1920, to consider the recognized equitable rights of such
occupants of claimants. No completive lease of coal shall be approved of issued until
after the notice of the proposed offering for lease had been given in a newspaper of
general circulation in the county in which the lands are situated in accordance with
regulations prescribed by the Secretary.
“(b) Where prospecting or exploratory work is necessary to determine the existence or
workability of coal deposits in any unclaimed, undeveloped area, the Secretary of the
Interior may issue, to applicants qualified under this Act, prospecting permit for a term of
PROSPECTING PERMITS
two years, for not exceeding two thousand five hundred and sixty acres; and if within said
period of two periods thereafter the permittee shows to the Secretary that the Land
contains coal in commercial quantities, the permittee shall be entitled to a lease under this
Act for all or part of the land in his permit.
“Any coal prospecting permit issued under this section ma be extended by the
Secretary for a period of two years, if he shall find that the permittee shall been unable,
with the exercise of reasonable diligence, to determine the existence of workability of
coal deposits in the area covered by the permit and desire to prosecute further prospecting
or exploration, or for other reasons in the opinion of the Secretary warranting such
extension.
“(c) No company or corporation operating a common-carrier railroad shall be given or RAILROADS
hold a permit or lease under the provision of this Act for any coal deposits except for its
own use for railroad purposes and such limitations of use shall be expressed in all permits
and leases issued to such companies or corporations; and no such

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

53

company or corporation shall receive or hold under permit or lease more than ten
thousand two hundred and forty acres in the aggregate nor more than one permit or lease
for each two hundred mile so its railroad lines served or to be served from such coal
deposits exclusive of spurs or switches and exclusive of branch lines built to connect the
operated mainly by power produced otherwise than by steam.
“Nothing in this section shall preclude such a railroad of less than two hundred miles
in length from securing one permit or lease thereunder but no railroad shall hold a permit
or lease for lands in any State in which it does not operate main or branch lines.”
“Sec.9. The Secretary of the Interior is authorized to lease to any applicant qualified
under this Act, thought advertisement, competitive bidding, or such other methods as he Sec. 9
may be general regulations adopt, any phosphate deposits of the Untied States, and lands
PHOSPHATE
containing judgment the public interest will be best served thereby. The lands shall be
leased under such terms and conditions as are herein specified, in units reasonably
compact in form of not to exceed two thousand five hundred and sixty acres.”
Sec.3. Section 10 of the Act (41 Stat. 440, 30 U.S.C., sec. 212) is amended to read as
follows:
Sec.10
“Sec.10. Each lease shall describe the leased lands by the legal subdivisions of the
public-land surveys. All leases shall be conditioned upon the payment to the United
LEASE DESCRIPTIONS
States of such royalties as may be specified in the lease, which shall be sized by the
Secretary of the Interior in advance of offering the same, at to less than 5 per centum of
ROYALTY
the gross value of the output of the phosphates or phosphate tock associated or related
minerals. Royalties shall be due and payable as specified in the lease either monthly or
quarterly on the last day of the month next following the month or waurter in which the
minerals are sold or removed from the leased land. Each lease shall provide for the
payment of a rental payable at the date of the lease and annually thereafter which shall be
not less than 25 cents per acre for the first year, 50 cents per acre for the second and third
years, respectively, and $1 per acre thereafter, during the continuance of the lease. The
rental paid for any year shall be credited against the royalties for that year. Lease shall be
for a term of twenty years and so long thereafter as the lessee complied with the terms
and conditions of the lease and upon the further conditions thereof may be made therein
LEASE TERM
as may be prescribed by the Secretary of the Interior unless otherwise provided by law at
the expiration of such periods. Leases shall be conditioned upon a minimum annual
production of the payment of a minimum royalty in lieu thereof, except when production
is interrupted by strikes, the elements, or casualties not attributable to the lessee. The
Secretary of the Interior may

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

54

Permit suspension of operations under any such leases when marketing conditions are
such that the lease cannot be operated except at a loss.”
Sec.4. Section 11 of the Act (41 Stat. 440, 30 U.S.C., sec. 218) is hereby amended to
Sec. 11
read as follows:
“Sec.11. Any lease to develop and extract phosphates, phosphate rock, and associated
PHOSPHATE
or related minerals under the provisions of sections 9 to 12, inclusive, of this Act shall
provide that the lessee may use so much of any deposit of silica or limestone or other
rock situated on any public lands embraced in the lease as may be utilized, in the
processing or refining of the phosphates, phosphate rock, and associated or related
ROYALTY
minerals mined form the lease lands or form other lands upon payments of such royalty
as may be determined by the Secretary of the Interior, which royalty may be stated in the
lease or, as to the lease already issued, may be provided for in an attachment to the lease
to be duly executed by the lessor and the lessee.”
Sec.5. Section 12 of the Act (41 Stat. 441, 30 U.S.C., sec 214) is amended to read as
follows:
“Sec.12. the holder of any lease issued under the provisions of section 9 to 23,
Sec. 12
inclusive, of this Act shall have the right to use so much of the surface of inappropriate
SURFACE USE
and unentered public lands not a part of his lease, not exceeding eight acres in area, as
may be determined by the Secretary to be necessary or convenient for this extraction,
treatment, and removal of the mineral deposits, but this provision shall not be applicable
to national forest lands.”
Sec.6. the first sentence of section 27 of such Act, as amended (41 Stat. 448, 30
Sec. 27
U.S.C., sec 184), is amended to read as follows:
“No person, association, or corporation, except as herein provided, shall take or hold
COAL OR SODIUM
coal or sodium leases or permit during the life of such lease in any one State, exceeding
ACREAGE
in the aggregate acreage five thousand one hundred and twenty acres for each of said
SODIUM LEASE
minerals: Provided, That the Secretary of the Interior may, in his discretion where it is
necessary in order to secure the economic mining of sodium compounds leasable under
this Act, permit a person, association, or thousand three hundred and sixty acres in any
one State. No persons, association, or corporations, except as herein provided, shall take
or hold at one time oil or gas leases exceeding in the aggregate fifteen thousand three
hundred and sixty acres granted hereunder in any one State; and no person, association,
or corporation shall take or hold it one time phosphate leases or permits exceeding in the
aggregate five thousand one hundred and twenty acres in any one State, and exceeding in
the aggregate ten thousand two hundred and forty acres in the United States.”
Sec.7.The first sentence of section 39 of such Act of February 25, 1920, as amended
(47 Stat. 708, 30 U.S.C., sec. 209), is amended to read as follows:
“the Secretary of the Interior, for the purpose of encouraging the greatest ultimate
recovery of coal, oil, gas, oil shale, phosphate, sodium, potassium and sulfur, and In the
Sec. 39
interest of conservation of natural resources, is authorized to waive, suspend, or reduce
the rental, or
REDUCTION OF ROYALTY
NOTE: Regarding all Mineral Leasing Act Sections noted on this page: SEE footnoted
listed under the section umber to locate subsequent amendments to each section.

55

Minimum royalty, or reduce the royalty on an entire leasehold, or an any tract or
portion thereof aggregated for royalty purposes, whenever in his judgment it is necessary
to do so in order to promote development, or whenever in his judgment the leases cannot
be successfully operated under the terms provided therein.”
Sec.8. The Act entitled “an Act to grant extension of time under coal permits”,
approved March 9, 1928, as mended (45 Stat. 251, 30 U.S.C., sec. 201a), is hereby
repealed.
Sec.9. The second sentence of section 3 of the Act entitled “An Act to promote the
mining of potash on the public domain”, approved February 7, 1927, as mended (44
Stat.1057, 30 U.S.C., sec. 283), is amended to reads as follows: “Any lease issued under
this Act shall be for a term of twenty years and so long thereafter as the lessee complied
with the terms and conditions of the lease and upon the further condition that at the end
of each twenty-year period succeeding the date of the lease such reasonable adjustment of
the terms and conditions thereof may be made therein as may be prescribed by the
Secretary of the Interior unless otherwise provided by law at the expiration of such
periods. The Secretary of the Interior may permit suspension of operations under any
such leases when marketing conditions are such that the leases cannot be operated except
at a loss. The Secretary upon application by the lessee prior to the expiration of any
existing lease in good standing shall amend such lease to provide for the same tenure and
to contain the same conditions, including adjustments at the end of each twenty year
period succeeding the date of said lease, as provided for in this Act.”
Approved June 3, 1948.

NOTE: Regarding all Mineral Leasing Act section noted on this page: SEE footnoted
listed under the section number to locate subsequent amendments to each section.

56

Sec. 3
20 YEAR LEASE

ACT OF AUGUST 3, 1950

ACT OF AUGUST 3, 1950

To provide that payment to States under the Oil Land Leasing Act of 1920 shall be made
biannually.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 35 of the Act entitled “An Act to promote
the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain”,
approved February 25, 1920, as amended (30 U.S.C., sec. 191), is hereby amended by
striking out “after the expiration of each fiscal year” and inserting in lieu thereof “ as
soon as practicable after December 31 and June 30 of each year”.
Approved August 3, 1950.

Sec. 35
DATES

ACT OF AUGUST 12, 1953

ACT OF AUGUST 12, 1953

To amend the mineral leasing laws with respect to their application in the case of
pipelines passing through the public domain
Be it enacted by the Senate and House of Representatives of the United States of
American in Congress assembled, That section 28 of the Act entitled “An Act to promote Sec. 28
the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain”,
approved February 25, 1920, as amended (30 U.S.C., sec. 185), is amended by inserting COMMON CARRIER PROVISIONS
after “Provided,” the following: “That the common carrier provisions of this section shall
not apply to any natural gas pipeline operated by any person subject to regulation under
the Natural Gas Act or by any public utility subject to regulation by a State or municipal
regulatory agency having jurisdiction to regulate the rate and charges for the sale of
natural to consumer within the State or municipality: Provided further,”.
Approved August 12, 1953.

NOTE: regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section

57

ACT OF JULY 29, 1954

ACT OF JULY 29, 1954

To amend the Mineral Leasing Act of February 25, 1920, as amended.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That the Act of February 25, 1920, as amended (30
U.S.C., 226), is further amended as follows:
(1) Strike out the second paragraph of section 17 and insert the following language in
lieu thereof:
“Any leases issued under this Act while is subject to termination by reason of cessation
of production shall not terminate if within sixty days after production ceases, reworking
or drilling operating are commenced on the land under lease and are thereafter conducted
with reasonable diligence during such period of nonproduction. No lease issued under
the provision of this Act shall expire because operations or production is suspended under
any order, or with the consent, of the Secretary of the Interior. No leas issued under the
provisions of this Act covering lands on which there is a well capable of producing oil or
gas in paying quantities shall expire because the lessee fails to produce the same, unless
the lessee is allowed a reasonable time, but not less than sixty days after the notice by
registered mail, within which to place such well on a producing status: Provided, That
after such status is established production shall continue on the leases premises unless
and until suspension of production is allowed by the Secretary of the Interior under the
provisions of this Act.”
(2) Strike out the third paragraph of section 17 and insert in lieu thereof:
“Upon the expiration of the initial five-year term of any noncompetitive lease
maintained in accordance with applicable statutory requirements and regulations, the
record titleholder thereof shall be entitled to a single extension of the lease, unless then
otherwise provided by law, for such covered by it as are not on the expiration date of the
lease withdrawn from leasing under this section. A withdrawal, however, shall not affect
the right to an extension if actual drilling operations on such lands were commenced prior
to such withdrawal becoming effective and were being diligently prosecuted on such
expiration date. No withdrawal shall be effective within the meaning of this section until
ninety days after notice thereof shall be sent by registered mail to each lessee to be
affected by such withdrawal. A noncompetitive lease, as to lands not within the known
geologic structure of a producing oil or gas field, shall be extended for a period of two
years and so long thereafter as oil or gas is produced in paying quantities. Any
noncompetitive lease extended under this paragraph shall be subject to the rules and
regulations in force at the expiration of the initial fire-year terms of the lease. No
extension shall be granted, however, unless within a period

NOTE: Regarding all Mineral Leasing Act section noted on this page: SEE footnoted
listed under the section number to locate subsequent amendments to each section.

58

Sec. 17
LEASE TERMINATION
REASONABLE DILIGENCE

Sec. 17
NONCOMPETITVE LEASE
WITHDRAWAL

of ninety days prior to such expiration date an application therefore is filed by the record
titleholder or an assignee whose assignment has been filed for approval, or an operator
whose operating agreement has been filed for approval.”
(3) Strike out the fifth paragraph of section 17 and insert the following language in lieu
thereof:
“Whenever it appears to the Secretary of the Interior that the lands owned by the
Untied States are being drained of oil or gas by wells drilling on adjacent lands, he is
hereby authorized and empowered to negotiate agreements whereby the United States, or
the United States and its lessees, shall be compensated for such drainage, such
agreements to be made with the consent of the lessees affected thereby, and the primary
term including any extension thereof of any lease for which compensatory royalty is
being paid shall be extended for the period of one year from discontinuance of such
payment and so long thereafter as oil or gas is produced in paying quantities: Provided,
That the Secretary of the Interior shall report to Congress at the beginning of each regular
session all such agreements entered into during the previous year which involve
unleashed Government lands.”
(4) Strike out the second sentence of the fourth paragraph of section 17 (b) and insert
in lieu thereof the following language: “Any other lease issued under any section of this
Act which has heretofore or may hereafter be committed of any such plan that contains a
general provision for allocation of oil or gas, shall continue in force and affect as to the
land committed, so long as the lease remains subject to the plan: Provided, That
production is had in paying quantities under the plan prior to the expiration date of the
terms of such lease. Any lease hereafter committed to any such plan embracing lands
that are impart within an in part outside of the area covered by any such plan shall be
segregated into separate leases as to the lands committed and the lands not committed as
of the effective date of unitization: Provided, however, That nay such lease as to the
nonunitized portion shall continue in force and effect for the term thereof but for not less
than two years from the date of such segregation and so long thereafter as oil or gas is
produced in paying quantities.”
(5) Strike out the words “and regardless of acreage limitations provided for in this Act”
in the fifth paragraph of section 17 (b) and insert the following sentence at the end of the
paragraph: “All leases operated under such approved operating, drilling, or development
contract and interest thereunder, shall be excepted in determining holding or control
under the provisions of any section of this Act.”
(6) Strike out the least sentence of section 30 (a) and insert the following in lieu
thereof: “Assignments under this section may also be made of parts of leases which are in
their extended terms because of any provision of this Act. The segregated lease of any
underdeveloped lands shall continue in full force and effect for two years and so long
thereafter as oil or gas is produced in paying quantities.

NOTE: regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section

59

Sec. 17
DRAINAGE

Sec. 17 (b)
PLANS

PAYING QUANTITIED

LEASE
ON NONUNITIZED LANDS
Sec. 17 (b)
APPROVED CONTRACTS

Sec. 30 (a)
SEGREGATED LEASE

Sec. 31

(7) Insert the following sentence immediately after the second paragraph of section 31:
“Notwithstanding the provisions of this section, however upon failure of a lease to pay
rental on or before the anniversary date of the lease, for any lease on which there is not
well capable of producing oil or gas in paying quantities, the lease shall automatically
terminate by operating of law: Provided, however, That when the time for payment falls
upon any day in which the proper office for payment is not open, payment may be
received the net official working day and shall be considered as timely made.”
Approved July 20, 1954.

ACT OF AUGUST 2, 1954

FAILURE TO PAY RENTAL

PAYEMNT DUE DATE

ACT OF AUGUST 2, 1954

To amend section 27 of the Mineral Leasing Act of February 23, 1920, as amended, in
order to promote the development of oil and gas on the public domain.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 27 of the Act of February 25, 1920, as
amended (30 U.S.C. 184), is further amended as follows:
(1) Strike out all of the language preceding the semicolon of the second sentence of
section 27, and insert the following in lieu thereof: “No person, association, or
corporation, except as herein provided, shall take or hold at one time oil or gas leases
exceeding in the aggregate forty-six thousand and eighty acres granted hereunder in any
one State, except that in the Territory of Alaska no person, association, or corporation,
except as herein provided, shall take or hold at one time oil or gas leases exceeding in the
aggregate one hundred thousand acres granted hereunder;”.
(2) Strike out sentence 5 and 6 of section 27 and insert the following in lieu thereof:
“The interest of an optionce under a nonrenewable option to purchase or otherwise
acquire or more oil or gas leases (whether then or thereafter issued), or any interest
therein, shall not, prior to the exercise of such option, be a taking or holding or control
under the acreage limitations provisions of any section of this Act. No such option shall
be entered into for a period of more than three years, without the prior approval of the
Secretary fo the Interior, and no person, association, or corporation shall hold at one time
such options of more than two hundred thousand acres in any one State.”
Approved August 2, 1954.

NOTE: regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section

60

Sec. 27
ACREAGE
ALASKA ACREAGE

Sec. 27
NONRENEWABLE OPTIONS

ACT OF JULY 10, 1957

ACT OF JULY 10, 1957
Excerpts
Sec.2. Section 35 of the Act entitled “An Act to promote the mining of coal,
phosphate, oil, oil shale, gas, and sodium on the public domain”, approved February 25,
1920, as amended (30 U.S.C/ 191), is hereby amended by inserting immediately before
the colon preceding the fist proviso thereof the following: “, and of those from Alaska 52
½ per centum thereof shall be paid to the Territory of Alaska for disposition by the
Legislature of the Territory of Alaska”.
Approved July 10, 1957.

Sec. 35
ALASKA

NOTE: Other sections not included.

ACT OF JULY 3, 1958

ACT OF JULY 3, 1958

Excerpts
To provide for the leasing of oil and gas deposits in lands beneath nontidal navigable
waters in the Territory of Alaska, and for other purposes.
Be it enacted by the Senate and House of Representatives of the Untied States of
America in Congress assembled,

OIL AND GAS LEASING
NONTIDAL NAVIAGEL
WATERS IN ALASKA

DEFINITIONS
Section 1. That, when used in this Act—
(a) the term “lands beneath nontidal navigable waters in the Territory of Alaska”
means (1) all lands within the boundaries of the Territory of Alaska which are covered by
nontidal waters that are navigable under the laws of the United States , up to the ordinary
high-water mark as heretofore or hereafter modified by accretion, erosion, and reliction.
For the purposes of this definition and this Act, streams shall be “nontidal” at all points
upstream from a line connecting the headlands at the mouth or mouths of such streams.
(b) The term “Mineral Leasing Act” means the Act of February 25, 1920 (41 Stat. 437;
30 U.S.C. 181 et seq.), and all Acts heretofore or hereafter enacted which are amendatory
thereof or supplementary thereto:
(c) The term “Secretary” means the Secretary of the Interior.
Sec.2. All deposits of oil and gas owned or hereafter acquired by the United States in
lands beneath nontidal navigable waters in the Territory of Alaska, together with the
lands containing those deposits, may be leased and otherwise administered, treated and
dealt with by the Secretary under and pursuant to the provisions of the Mineral Leasing
Act which are applicable to oil and gas deposits generally and the lands containing such
deposits owned by the United States in the Territory of Alaska and all such provisions of
the Mineral Leasing Act shall be applicable to deposits of oil and gas owned to hereafter
acquired by the United States in lands beneath nontidal navigable waters in the Territory
of Alaska, except as otherwise provided in this Act.

NOTE:
regarding
Mineral
Leasing
Actfor
sections
on this page:
footnotes
Sec.6.
If any oilalland
gas leases
issued
publicnoted
land pursuant
to theSEE
Mineral
listed
under
number to
subsequent
amendments
to each
section.
Leasing
Actthe
(orsection
any application
orlocate
offer for
such a lease
of such land,
which
is
pending on the date of this Act and subsequently becomes effective), embraces
within the boundaries described in the lease (or application or offer) any lands
61

beneath nontidal navigable waters in the Territory of Alaska not within any known
geological structure of a producing oil or gas field on the date of the application or offer
for any such lease was filed with the Bureau of Land Management, the lessee (or
applicant or offeror) shall, upon application filed while such lease (or application or
offer) is still in effect but not more than one year after the date of approval of this Act and
under regulations to be prescribed by the Secretary, have a preference right to have
included within such lease (or application or offer) such lands beneath nontidal navigable
waters in the Territory of Alaska. For boundaries described in the lease (or application of
offer) even though it is excluded from such description by general terms which exclude
all described lands that are or may be situated beneath navigable waters.
Sec.10. Section 22 of the Act of February 25, 1920 (41 Stat, 440), is amended to read
as follows:
“Sec.22. That any bona fide occupant or claimant of oil or gas bearing lands in the
Territory of Alaska, who, or whose predecessors in interest, prior to withdrawal land
complied otherwise with the requirements of the mining laws, but had made no discovery
of oil or gas in wells and who prior to withdrawal had made substantial improvements for
the discovery of oil or gas on or for each location or had prior to the passage of this Act
expended not less than $250 in improvements on or for each location shall be entitled,
upon relinquishment or surrender to the United States within one year from the date of
this Act, or within six months after final denial or withdrawal of application for patent, to
a lease or leases, under this Act covering such lands, not exceeding five leases in number
and not exceeding an aggregate of one thousand two hundred and eighty acres in each:
Provided, That the annual lease rentals for lands in the Territory of Alaska not within any
known geological structure of a producing oil or gas sold or removed from such lands
shall be identical with those prescribed for such leases covering similar lands in the States
of the United States, except that leases which may issue pursuant to applications or offers
to lease such lands, which applications or offers were filed prior to and were pending on
May 3, 1958, shall require the payment of 25 cents per acre as lease rental for the first
year of such leases; but the aforesaid exception shall not apply in any way to royalties to
be required under leases which may issue pursuant to offers or application filed prior to
May 3, 1958.
“The Secretary of the Interior shall neither prescribe nor approve any cooperative or
unit plan of development or operation nor any operating, drilling, or development
contract establishing different royalty or rental rates for Alaska lands than for similar
lands within the sates of the United States.
“No claimant for a lease who has been guilty of any fraud or who had knowledge or
reasonable grounds to know of any fraud, or who has not acted honestly and in good
faith, shall be entitled to any of the benefits of this section.”
Approved July 3, 1958.

Sec. 22
BONA FIDE OCCUPANT OR
CLAIMANT. OIL AND GAS.
ALASKA.

RENTAL
ROYALTY

UNIT PLAN

FRAUD

NOTE: Other sections not included.

NOTE: regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

62

ACT OF AUGUST 21, 1958

To amend section 27 of the Mineral Leasing Act of February 25, 1920, as amended, in
order to promote the development of coal on the public domain.

ACT OF AUGUST 21, 1958

COAL

SEC. 27
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 27 of the Act of February 25, 1920, as
amended (41 Stat. 448, 30 U.S.C. 184), is further amended by deleting from the first
sentence thereof the words “coal or” and “for each of said minerals”, and by inserting at
the beginning of said section the following:
“No person, association, or corporation, except as herein provided, shall take or hold
ACREAGE
coal leases or permits during the life of such lease in any one States exceeding an
aggregate of ten thousand two hundred and forty acres: Provided, That a person,
association or corporation may apply for coal leases or permits for acreage in addition to
said ten thousand two hundred and forty acres, which application or applications shall be
in multiples of forty acres, not exceeding a total of five thousand one hundred twenty
additional acres in such State, and shall contain a statement that the granting of a lease for
such additional lands is necessary for the person, association, or corporation to carry on
business economically and is in the public interest. On the filing of said application, the
coal deposits in such lands covered thereby shall be temporarily set aside and withdrawn
from all terms of disposal under this Act. The Secretary of the Interior shall, after posting
notice of the pending application in the local land office, conduct public hearing on said
application or applications for additional acreage. After such public hearings, to such
PUBLIC HEARING
extend as he finds to be in the public interest and necessary for the applicant in order to
carry on business economically, the Secretary of the Interior may, under such regulations
as hey may prescribe, permit such persons, association, or corporation to take or hold
coal leases or permits for an additional aggregate acreage for not more than five thousand
one hundred and twenty acres in such State. The Secretary may, in his own discretion or
whenever sufficient public interest is manifested, reevaluate the lessee’s or permittee’s
need for all or any part of the land permit or permits covering all or any part of the
additional acreage, if he finds that such cancellation is in the public interest or that the
ADDITIONAL ACREAGE
coal deposits in the additional acreage are no longer necessary for the lessee or permittee
NEEDS EVALUATION
to carry on business economically or if the lessee or permittee had divested himself of all
or any part of the original ten thousand two hundred and forty acres or no longer had
CANCELLATION OF LEASES
facilities which in the Secretary’s opinion enable him to exploit the deposits under lease
OR PERMITS
or permit. No assignment, transfer, or sale of any part of the additional acreage may be
made without the approval of the Secretary.”
Approved August 21, 1958.

NOTE: regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

63

ACT OF SEPTEMBER 9, 1959

ACT OF SEPTEMBER 9, 1959
Excerpt
To repeal the Act of October 20, 1914 (38 Stat. 741), as amended (48 U.S.C., secs. 432452), and for other purposes.

Sec.2. The first sentence of section 2 of the Act of February 25, 1920 (41 Stat. 437,
438), as amended (30 U.S.C., sec. 201), is further amend by the deletion of words
“outside of the Territory of Alaska.”
Approved September 9, 1959.

Sec. 2
Alaska

NOTE: Section 1 not included.

ACT OF SEPTEMBER 21, 1959

ACT OF SEPTEMBER 21, 1959

CANCELLATION OR FORFEITURE

To amend the Mineral Leasing Act of February 25, 1920.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 27 of the Mineral Leasing Act of February
25, 1920 (41 Stat. 437, 448), as amended (30 U.S.C., sec. 184), is further amended by the
inserting, immediately after the sixteenth sentence, of the following: “ The right of
cancellation or forfeiture for violation of the provisions of this Act shall not apply so as to
affect adversely the title or interest of a bona fide purchaser in any lease, options for a
lease, or interest in a lease acquired in conformity with the acreage limitations of this Act
from any other person, association or corporation whose holding, or the holdings of a
predecessor in title, including the original lessee of the United Sates, may have been
canceled or forfeited, or may be subject to cancellation of forfeiture for any such
violations. Any person, associations or corporation who is a party to any proceedings
with respect to a violation of any provisions of this Act shall have the right to be
dismissed as such a party upon showing that the person, association or purchaser without
violating any provisions of this Act. If during any such proceedings with respect
violation of any provisions of this Act a party to those proceedings files with the
Secretary of the Interior thereunder or if such rights are suspended by order of the
Secretary pending a decisions in such proceedings, he shall, if he is found in such
proceedings not in violation of such provisions, have the right to have his interest
extended for a period of time equal to the period between the filing of the waiver or the
order of suspension by the Secretary and the final decisions, without the payment of
rental.”
Sec.2. The right granted by the second and third sentences of the amendment contained
within section 1 of this Act shall apply with respect to any proceeding now pending or
initiated after the date of enactment of this Act.
Approved September 21, 1959.

Sec. 27
CANCELLATION OR FIREFEITURE
BONA FIDE PURCHASER

RIGHT TO EXTEND INTEREST

Sec. 1 APPLIED TO
PENDING PROCEEDINGS

NOTE: regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

64

ACT OF MARCH 18, 1960

ACT OF MARCH 18, 1960
To authorize the issuance of prospecting permits for phosphate in lands belonging to the
Untied States.

PHOSPHATE

Sec. 9
Be it enacted by the Senate and House of Representatives of the United States of
American in Congress assembled, That (a) section 9 of the Mineral Leasing Act of
February 25, 1920 (41 Stat, 437, 440), as amended (30 U.S.C. 211), is further amended
by the insertion of an (a) at the beginning of the section and by the addition of the two
following subsections:
PHOSPHATE
“(b) Where prospecting or exploratory work is necessary to determine the existence or
workability of phosphate deposits in any unclaimed, undeveloped area, the Secretary of
PHOSPHATE PERMIT
the Interior is authorized to issue, to any applicant qualified under this Act, a prospecting
permit which shall give the exclusive right to prospect for phosphate deposits, including
associated minerals, for a period of two years, for not more than two thousand five
hundred and sixty acres; and if prior to the expiration of the permit the permittee shows to
the Secretary that valuable deposits of phosphate have been discovered within the area
covered by his permit, the permittee shall be entitled to a lease for any or all of the land
embraced in the prospecting permit.
“(c) Any phosphate permit issued under this section may be extended by the Secretary
for such an additional period, not in excess of four years, as he deems advisable, if he
EXTENSION OF PERMIT
finds that the permittee has been unable, with reasonable diligence, to determine the
existence or workability of phosphate deposits in the area covered by the permit and
desires to prosecute further prospecting or exploration, or for other reasons warranting
such an extension in the opinion of the Secretary.”
“(b) Section 12 of the Mineral Leasing Act (41 Stat, 437, 441), as amended (30 U.S.C.,
sec. 214), is further amended by the insertion of the words “or permit” immediately after
Sec. 12
the word “lease” wherever it appears.
“(c) The ninth sentence of section 27 of the Mineral Leasing Act (41 Stat. 437, 448), as
INCLUDES PERMITS
amended (30 U.S.C., sec. 184), is further amended by the insertion of the words “or
permits” immediately after the words “phosphate leases”.
Sec. 27
Approved March 18, 1960.
INCLUDES PERMITS

ACT OF JUNE 11, 1960

ACT OF JUNE 11, 1960

Number (21) Only

(21) The third sentence in the third paragraph of section 17 of the Mineral Lands
Leasing Act of February 25, 1920, as amended by the Act of July 20, 1954 (68 Stat, 584;
30 U.S.C. 226), is amended by inserting “or by certified mail,” immediately following
“registered mail,”.

NOTE: regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.
65

Sec. 17
CERTIFIED MAIL

ACT OF JULY 14, 1960

Sec.204. (a) In any case where it shall appear to the satisfaction of the Secretary of the
Interior that any person has made a payment under any statue relating to the sale, entry,
lease, use, or other deposition of the public lands which is not required, or is in excess of
the amount required, by applicable law and the regulations issued by the Secretary, the
Secretary, upon application or otherwise, may cause a refund to be made from applicable
funds.

Sec.303. Any moneys collected under this Act in connection with lands administered
under the Act of August 28, 1937 (50 Stat. 874; 43 U.S.C. 1181a, and the following),
shall be expended for the benefit of such land only. If any portion of a deposit or amount
forfeited under this Act is found by the Secretary to be in excess of the cost of doing the
work authorized under this, the mount in excess shall be transferred to miscellaneous
receipts.
Approved July 14, 1960.

66

ACT OF JULY 14, 1960

UNREQUIRED PAYMENTS

MONEY FORFEITED

MINERAL LEASING ACT REVISION OF 1960

MINERAL LEASING ACT REVISION
OF 1960 ACT OF SEPTEMBER 2,
1960

ACT OF SEPTEMBER 2, 1960

To amend the Mineral Leasing Act of February 25, 1920.
Be it enacted by the Senate and House of Representatives of the United States of
American in Congress assembled, That this Act may be cited as the “Mineral Leasing Act
Revision of 1960”.
Sec.2. Section 17, 17 (a), and 17 (b) of the Act entitled “An Act to promote the mining
of coal, phosphate, oil, oil shale, gas, and sodium on the public domain”, approved
February 25, 1920, as mended (30 U.S.C. 226, 226d, and 115e) are further amended to
read as follows:
“Sec.17. (a) All lands subject to disposition under this Act which are known or
believed to contain oil or gas deposits may be leased by the Secretary.
“(b) If the lands to be leased are within any known geological structure of a producing
oil or gas field, they shall be leased to the highest responsible qualified bidder by
competitive bidding under general regulations in units of not more than six hundred and
forty acres, which shall be as nearly compact in form as possible, upon the payment by
the lessee of such bonus as may be accepted by the Secretary and of such royalty as
maybe be fixed in the lease, which shall be not less than 12 ½ per centum in amount or
value of the production removed or sold from the lease.
“(c) If the lands to be leased are not within any known geological structure of a
producing oil or gas field, the person first making application for the lease who is
qualified to hold a lease under this Act shall be entitled to a lease of such lands without
competitive bidding. Such leases shall be conditioned upon the payment by the lessee of
a royalty of 12 ½ per centum in amount or value of the production removed or sold from
the lease.
“(d) All leases issued under this section shall be conditioned upon payment by the
lessee of a rental of not less than 50 cents per acres for each year of the lease. Each
year’s lease rental shall be paid in advance. A minimum royalty of $1 per acre in lieu of
rental shall be payable at the expiration of each lease year beginning on or after a
discovery of oil or gas in paying quantities on the lands leased.
“(e) Competitive leases issued under this section shall be for a primary term of five
years and noncompetitive leases for a primary term of ten years. Each such lease shall
continue so long after its primary terms as oil or gas is produced in paying quantities.
Any lease issued under this section for land on which, or for which under an approved
cooperative or unit plan of development or operations, actual drilling are being diligently
prosecuted at the time shall be extended for two years and so long thereafter as oil or gas
is produced in paying quantities.
“(f) No lease issued under this section which is subject to termination because of
cessation of production shall be terminated for this because so long as reworking or
drilling operations which were commenced on the land prior to or within sixty days after
cessation of production are conducted thereon with reasonable diligence, or so

Sec. 17, 17 (a), 17 (b)

KGS
COMPETITIVE BIDDING

NOT WITHIN KGS
FIRST QUALIFIED APPLICANT

RENTALS

COMPETITIVE LEASES:
5 YEARS
NONCOMPETITIVE LEASES:
10 YEARS

TERMINATION

60 DAYS

NOTE: regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

67

PAYING QUANTITES

long as oil or gas is produced in paying quantities as a result of such operations. No lease
issued under this section shall expire because operations or production is suspended
under any order or with the consent, of the Secretary. No lease issued under this section
covering lands on which there is a well capable of producing oil or gas is paying
quantities shall expire because the lease fails to produce the same unless the lessee is
allowed a reasonable time, which shall not be less than sixty days after notice by
registered or certified mail, within which to place such well in producing status or unless
after such status is establish, production is discontinued on the lease premises without
permission granted by the Secretary under the provisions of this Act.
“(g) Whenever it appears to the Secretary that lands owned by the United States are
being drained of oil or gas by wells drilled on adjacent lands, he may negotiate
agreements whereby the United States, or the United States and its lessees, shall be
compensated for such drainage. Such agreements shall be mad with the consent of the
lessees, if any, affected thereby. If such agreement is entered into, the primary term of
any lease for which compensatory royalty is being paid, or any extension of such primary
term, shall be extended for a period during which such compensatory royalty is paid and
for the period of one year from discontinuance of such payment and so long thereafter as
oil or gas is produced in paying quantities. The Secretary shall report to Congress at the
beginning of each regular session all such agreements entered into during the previous
year which involve unleased Government lands.
“(h) If, during the primary term or any extended term of any lease issued under this
section, a verified statement is filed by any mining claimant pursuant to subsection (c) of
section 7 of the Multiple Mineral Development Act of August 13, 1954 (68 Stat. 706), as
amended (30 U.S.C. 527), whether such filing occur prior to enactment of the Mineral
Leasing Act Revision of 1960 or thereafter, asserting the existence of a conflicting
unpatented mining claim or claims upon which diligent work is being prosecuted as to
any lands covered by the lease, the running of time under such lease shall be suspended
as to the lands involved from the first day of the month following the filing of such
verified statement until a final decision is rendered in the matter.
“(i) The Secretary of the Interior shall, upon timely application therefore, issue a new
lease in exchange for any lease issued for a term of twenty years, or any renewal thereof,
of any lease issued prior to August 8, 1946, in exchange for a twenty-year lease, such
new lease to be for a primary term of five years and so long thereafter as oil or gas is
produced in paying quantities and at a royalty rate of not less than 12 ½ per centum in
amount or value of a production removed or sold from such leases, except that the royalty
rate shall be 12 ½ per centum in amount or value of the production removed or sold from
said leases as to (1) such leases, or such parts of the lands subject thereto and the deposits
underlying the anme, as are not believed to be within the productive limits of any
producing oil or gas deposit, as such productive limits are found by the Secretary to have
existed on

68

60 DAYS

DRAINAGE

CONFLICTING UNPATENTED
MINING CLAIMS

SUSPENSION OF LEASE

ISSUANCE OF NEW LEASES
TERMS OF LEASES
ROYALTY

NEW DEPOSIT

August 8, 1946; and (2) any production on a lease form an oil or gas deposit which was
discovered after May 27, 1941, by a well or wells drilled within the boundaries of the
lease, and which is determined by the Secretary to a new deposit; and (3) any production
on or allocated to a lease pursuant to an approved cooperative or unit plan of
development or operation from an oil or gas deposits which was discovered after May 27,
1941, on land committed to such plan, and which is determined by the Secretary to be a
new deposit, where such lease, or a lease for which it is exchanged, was included in such
plan at the time of discover or was included in a duly executed and filed application for
the approval of such plan at the time of discovery.
“(j) For the purpose of more properly conserving the natural resources of any oil or gas
pool, field, or like area, or any part thereof (whether or not any part of said oil or gas
pool, field, or like area, is than subject to any cooperative or unit plan of development or
operation), lessees thereof and their representatives may unit with each other, or jointly or
separately with other, in collectively adopting and operating under a cooperative or unit
plan of development or operation of such pool, filed, or like area, or any part thereof,
whenever determined and certified by the Secretary of the Interior to be necessary of
advisable in the public interest. The Secretary is thereunto authorized, in his discretion,
with the consent of the holders of leases involved, to establish, after, changed, or revoke
drilling, producing, rental, minimum royalty, and royalty requirements of such leases and
to make such regulations with reference to such leases, with like consent on the part of
the lessees, in connection with the institution and operation of any such cooperative or
unit plan as he may deem necessary or proper to secure the proper protection of the
public interest. The Secretary may provided that oil and gas leases hereafter issued under
this Act shall contain a provision requiring the lessee to operate under such a reasonable
cooperative or unit plan, and he may prescribe such a plan under which such lessee shall
operate, which shall adequately protect the rights of all parties in interest, including the
United States.
“Any plan authorized by the proceeding paragraph which included lands owned by the
United States may, in the discretion of the Secretary, contain a provision whereby
authority is vested in the Secretary of the Interior, or any such person, committee, or State
or Federal officer or agency as may be designated in the plan, to alter or modify from
time to time the rate of prospecting and development and the quantity and rate of
production under such plan. All leases operated under any such plan approved or
prescribed by the Secretary shall be excepted in determining holdings or control under
the provision of any section of this Act.
“When separate tracts cannot be independently developed and operated in conformity
with an established well-spacing or development program, any lease, or a portion thereof,
may be pooled with other lands, whether or not owned by the United States, under a
communitization or drilling agreement providing for an apportionment of production or
royalties among the separate tracts of land comprising the drilling or spacing unit when
determined by the Secretary of the

69

UNIT PLAN

PLANS EXCEPTED IN
DETERMINATION OF HOLDINGS
OR CONTROL

POOLING

COMMUNITIZATION

Interior to be in the public interest, and operations or production pursuant to such an
LEASE CONTINUATION UNDER
agreement shall be deemed to be operations or production as each such lease committed
UNIT PLAN
thereto.
“Any lease issued for a term of twenty years, or any renewal thereof, or any portion of
such lease that has become the subject of a cooperative or unit plan of development or
operation of a pool, field, or like area, which plan ahs the approval of the Secretary of the
Interior, shall continue in force until the termination of such plan. Any other lease issued
under any section of this Act which has heretofore or may hereafter be committed to any
such plan that contains a general provision for allocation of oil or gas shall continue in
force and effect as to the land committed so long as the lease remains subject to the plan:
Provided, That production is had in paying quantities under the plan prior to the
expiration date of the term of such lease. Any lease heretofore or hereafter committed to
any such plan embracing lands that are in part within and in part outside of the area
PAYING QUANTITES
covered by any such plan shall be segregated into separate leases as to the lands
committed and the lands not committed as of the effective date of unitization: Provided,
however, That any such lease as to the nonunitized portion shall continue in force and
effect for the terms thereof but for not less than two years from the date fop such
segregation and so long thereafter as oil or gas is produced in paying quantities. The
NONUNITIZED LAND LEASES
minimum royalty or discovery rental under any lease that has become subject to any
cooperative or unit plan of development or operations, or other plan that contains a
general provision for allocation of oil or gas, shall be payable only with respect to the
lands subject to such lease to which oil or gas shall be allocated under such plan. Any
lease which shall be eliminated from any such approved or prescribed plan, or from any
communitization or drilling agreement authorized by this section, and any lease which
shall be in effect at the termination of any such approved or prescribed plan, or at the
termination of any such communitization or drilling agreement, unless relinquished, shall
be continue in effect for the original term thereof, but not less than two years, and so long
thereafter as oil or gas is produced in paying quantities.
“The Secretary of the Interior is hereby authorized, on such conditions as he may
SEC’Y. APPROVE CONTRACTS
prescribe, to approve operating, drilling, or development contracts made by one or more
lessees of oil or gas leases, with one or more person, association, or corporation
whenever, in his discretion, the conservation of natural products of the public
convenience or necessity may require it or the interest of the United States may be best
subserved thereby. All leases operated under such approved operation, frilling, or
development contracts, and interest, thereunder, shall be excepted in determining holding
or control under the provisions of this Act.
“The Secretary of the Interior, to avoid waste or to promote conservation of natural
SUBSURFACE STORAGE OF
resources, may authorized the subsurface storage of oil or gas, whether or not produced
OIL OR GAS
from federally owned lands, in lands leased or subject to lease under this Act. Such
authorization may provide for the payment of a storage fee or rental on such stored oil or
gas or, in lieu of such fee or rental, for a royalty other than that

70

prescribed in the lease when such stored oil or gas is produced in conjunction with oil or
gas not previously provided. Any lease on which storage is so authorized shall be
extended at least for the period of storage and so long thereafter as oil or gas not
previously produced in produced in paying quantities.”
Sec.3. Section 27 of said Act, as amended (30 U.S.C. 184), is further amended to read
as follows:
“Sec.27. (a) (1) no person, association, or corporation, except as otherwise provided in
the subsection, shall take, hold, own or control at one time, whether acquired directly
form the Secretary under this Act or otherwise, coal leases pr permits on an aggregate of
more than ten thousand two hundred and forty acres in any one State.
“(2) A person, association, or corporation may apply for coal leases or permits for
acreage in addition to that which is permissible under paragraph (1) of this subsection,
but the additional acreage shall not exceed five thousand one hundred and twenty acres,
in any one State. Each application shall be for forty acres or multiple thereof and shall
contain a statement that the granting of a lease or permit for the additional lands in
necessary to enable the applicant to carry on business economically and that it is believed
to be in the public interest. On the filing of such an application, the coal deposits in the
lands covered by it shall be temporarily set aside and withdrawn from all forms of
disposal under this Act. The Secretary shall, after posting notice of the pending
application in the local land office, conduct public hearing on it. After such hearing the
Secretary may, under such regulations as he may prescribe and to such extent as he finds
to be in the public interest and necessary to enable the applicant to carry on business
economically, permit the applicant to take and hold coal leases or permits for additional
acreage as hereinbefore provided. The Secretary may, in his own discretion or whenever
sufficient public interest is manifested, reevaluate the lessee’s or permittee’s need for all
or any part of the additional acreage and may cancel any lease or permit covering all or
any part of such acreage if he finds that cancellation in the public interest of that the coal
deposits in said acreage are not longer necessary for the lessee or permittee to carry on
business economically or that the lessee or permittee has divested himself of all or any
part of his first ten thousand two hundred and forty acres or no longer has facilities
which, in the Secretary’s opinion, enable him to exploit the deposits under lease or
permits. No assignment, transfer, or sale of any part of the additional acreage may be
made without the approval of the Secretary.
“(b) (1) No person, association, or corporation, except as otherwise provided in this
subsection, shall take, hold, own, or control at one time, whether acquired directly from
the Secretary under this Act or otherwise, sodium leases or permits on an aggregate of
more than five thousand one hundred and twenty acres in any one State.
(2) The Secretary may, in his discretion, where the same is necessary in order to secure
the economic mining of sodium compounds leasable under this Act, permit a person,
association, or corporation to take or hold sodium leases or permits on up to fifteen
thousand three hundred and sixty acres in any one State.

NOTE: regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

71

Sec. 27
ACREAGE

COAL LEASES ACREAGE

RE-EVALUATE NEED FOR
ADDITIONAL ACREAGE

CANCELLATIONS

SODIUM
LEASE ACREAGE
ACREAGE

“(c) No person, association, or corporation shall take, hold, own, or control at one time,
whether acquired directly from the Secretary under this Ac or otherwise, phosphate leases
or permits on an aggregate of more than ten thousand two hundred and forty acres in the
United States.
“(d) (1) No persona, association or corporation, except as otherwise provided in this
Act, shake take, hold, own or control at one time, whether acquired directly from the
Secretary under this Act or otherwise, oil or gas leases (including options for such leases
or interests therein) on land held under the provisions of this Act exceeding in the
aggregate two hundred forty-six thousand and eighty acres in any one State other than
Alaska. In the case of the State of Alaska, the limit shall be three hundred thousand acres
in the northern leasing district and three hundred thousand acres in the southern leasing
district, and the boundary between said two districts shall be the left limits of the Tanana
River from the Border between the United Sates and Canada to the confluence of the
Tanana and Yukon Rivers, and the left limit of the Yukon River from said confluence to
its principle southern mouth.
“(2) No person, association, or corporation shall take, hold, own, or control at one time
options to acquire interest in oil or gas leases under the provisions of this Act which
involve, in the aggregate, more than two hundred thousand acres of land in any one State
other than Alaska or, in the case of Alaska, more than two hundred thousand acres in
each of its two leasing districts, as hereinbefore described. No option to acquire any
interest in such an oil or gas lease shall be enforceable if entered into for a period of more
than three years (which three years shall be inclusive of any renewal period if a right to
renewal is reserved by any party to the option) without the prior approval of the
Secretary. In any case in which an option to acquire the optionor’s entire interest in the
whole or a part of the acreage under a lease is entered into, the acreage to which the
option is applicable shall be charged both to the optionor and to the optionee, but the
charge to the optionor shall cease when the options is exercised. In any case in which an
option to acquire a part of the optionor’s interest in the whole or a part of the acreage
under a lease is entered into, the acreage to which the option is applicable shall be fully
charged to the optionor and share a thereof shall also be charged to the optionee as his
interest may appear, but after the option is exercised said acreage shall be charged to the
parties pro rata as their interest may appear. In any case in which an assignment is made
of a part of a lessee’ interest in the whole or part of the acreage under a lease or an
application for a lease, the acreage shall be charged to the parties pro rata as their
interests may appear. No option or renewal thereof shall be enforcible until notice
thereof has been filed with the Secretary of an officer or employee of the Department of
the Interior designated by him to receive the same. Each such notice shall include, in
addition to any other matters prescribed by the Secretary, the names and addresses of the
parties thereto, the serial number of the lease or application for a lease to which the
option is applicable, and a statement of the number of acres covered thereby and of the

72

PHOSPHATE ACREAGE

ACREAGE

ALASKA ACREAGE

ACREAGE
ALASKA ACREAGE

OPTIONS

ASSIGNMENT OF INTEREST

OPTION NOT EXERCISED

interest and obligations of the parties thereto shall be subscribed by all parties to the
options of their duly authorized agents. An option which has not been exercised shall
FILING
remain charged as hereinbefore provided until notice of its relinquishment or surrender
has been filed, by either party, with the Secretary of any officer or employee of the
Department of the Interior designated by him to received the same. In addition, each
holder of any such option shall file with the Secretary or an officer or employee of the
Department of the Interior as a for said within ninety days after the 30th day of June and
the 31st day of December in each year a statement showing, in addition to any other
matter prescribed by the Secretary, him name, the name and address of each grantor of an
option held by him, the serial number of every lease or application for a lease to which
such an option is applicable, the number of acres covered by each such option, the total
acreage in each Sate to which such option are applicable, and his interest and obligations
under each such option. The failure of the holder of an option so to file shall render the
option unenforcible by him. The unenforcibility of any option under the provisions of
this paragraph shall not diminish the number of acres deemed to be held under option by
any person, association, or corporation in computing the amount chargeable under the
first sentence of this paragraph and shall not relieve any party thereto of any liability to
cancellation, forfeiture, forced disposition, or other sanction provided by law. The
Secretary may prescribe forms on which the notice and statements required by this
paragraph shall be made.
“(e) (1) No person, association, or corporation shall take, hold, own or control at one
INTEREST IN LEASES
time any interest as a member of an association or as a stockholder in a corporation
holding a lease, option, or permit under the provisions of this Act which, together with
the area embraced in any direct holding, ownership or control by him of such a lease,
option or permit or any other interest which he may have as a member of other
associations or as a stockholder in other corporations holding, owning or controlling such
lease, options, or permits for any kind of minerals, exceeds in aggregate an amount
equivalent to the maximum number of acres of the respective kinds of mineral allowed to
any one lessee optionee, or permittee under this Act, except that no person shall be
charged with his pro rata share of any acreage holding of any association or corporation
unless he is the beneficial owner of more than 10 per centum of the stock or other
instrument of ownership or control of such association or corporation, and except that
within three years after the enactment of the Mineral Leasing Act Revision of 1960 no
valid option in existence prior to the enactment of said Act held by a corporation or
association at the time of enactment of said Act shall be chargeable to any stockholder of
such corporation or to a member for such association so long as said option shall be so
held at such corporation or association under the provisions of this Act.

73

INTEREST IN LEASE

“(2) No contract for development and operation of any lands leased under this act,
whether or not coupled with an interest in such lease, and no lease held, owned, or
controlled in common by two or more persons, associations, or corporations shall be
deemed to create a separate association under the preceding paragraph of this subsection
between or among the contracting parties or those who hold, own or control the lease in
common, but the proportionate interest of each part shall be charged against the total
acreage permitted to be held, owned or controlled by such party under this Act. The total
acreage so held, owned, or controlled in common by two or more parties shall not exceed,
in the aggregate, an amount equivalent tot the maximum number of acres of the
respective kinds of mineral allowed to any one lessee, optionee, or permittee under this
Act.
“(f) Nothing contained in subsection (e) of this section shall be construed (i) to limit
section 18, 19, and 22 of this Act or (ii), subject to the approval of the Secretary, to
prevent any number of lessees under this Act from combining their several interest so far
as may be necessary for the purpose of constructing and carrying on the business of a
refinery or of establishing and constructing, as a common carrier, a pipeline or railroad to
be operated and use by them jointly in the transportation of oil from their several wells or
from the wells of other lessees under this Act or in the transportation of coal or (iii) to
increase the acreage which may be taken, held, owned, or controlled under section 27 of
this Act.
“(g) Any ownership or interest otherwise forbidden in this Act which may be acquired
by descent, will, judgment, or decree may be held for two years after its acquisition and
no longer.
“(h) (1) If any interest in any lease is owned, or controlled, directly or indirectly, by
means of stock or otherwise, in violation of any of the provisions of this Act, the lease
may be cancelled, or the interest so owned may be forfeited or the person so owning or
controlling the interest may be compelled to dispose of the interest, in any appropriate
proceeding instituted by Attorney General. Such a proceeding shall be instituted in the
United States district court for the district in which the leased property or some part
thereof is located or in which the defendant may be found.
“(2) The right to cancel or forfeit for violation of any of the provisions of this Act shall
not apply so as to affect adversely the title or interest of a bona fie purchaser of any lease,
interest in a lease, option to acquire a lease or an interest therein, or permit which lease,
interest, option or permit was acquired and is held by a qualified person, association, or
corporation in conformity with those provisions, even though the holding of a person,
association, or corporation from which the lease, interest, option, or permit was acquired,
or of his predecessor in title (including the original lessee of the United State) may have
been canceled for forfeited or may be or may have been subject to cancellation of
forfeiture for any such violation. If, in any such proceeding, an underlying lease, interest,
option, or permit is canceled or forfeited to the Government and there are valid interest
therein or valid options to acquire the lease or an interest therein which are not subject to
cancellation, forfeiture, or compulsory disposition the underlying lease, interest, option,
or permit shall be sold

74

COMBINIGN LEASE INTEREST

OWNERSHIP OR INTEREST
FORBIDEN
CANCELLATION OR FORFEITURE
FOR VIOLATION

BONA FIDE PURCHASER

SELL TO HIGHEST RESPONSIBLE
QUALFIED BIDDER

by the Secretary to the highest responsible qualified bidder by competitive bidding under
general regulations subject to all outstanding valid interest therein and valid options
pertaining thereto. Likewise if, in any such proceeding, less than the whole interest in a
lease, interest, options, or permit is canceled or forfeited to the Government, the partial
interest so canceled of forfeited shall be sold by the Secretary to the highest responsible
qualified bidder by competitive bidding under general regulations. If competitive bidding
fails to produce a satisfactory offer the Secretary may, in either of these cases, shell the
interest in question by such other method as he deems appropriate on terms not less
favorable to the Government than those of the best competitive bid received.
“(3) The commencement and conclusion of every proceeding under this subsection
shall be promptly noted on the appropriate public records of the Bureau of Land
Management.
“(i) Effective September 21, 1959, any person, association, or corporation who is a
party to any proceeding with respect to a violation of any provision of this Act, whether
imitated prior to said date or thereafter, shall have the right to be dismissed promptly as
such a party upon showing that he holds and acquired as a bona fide purchaser the
interest involving him as such a party without violating any provision of this Act. No
hearing upon nay such showing shall be required unless the Secretary present pram facie
evidence indicating a possible violation of the Mineral Leasing Act on the part of the
alleged bona fide purchaser.
“(j) If during any such proceeding, a part thereto files with the Secretary a waiver of
his rights under his leases (including particularly, where applicable, rights to drill and to
assign) or if such rights suspended by the Secretary pending a decision in the
proceedings, whether initiated prior to enactment of this Act or thereafter, payment of
rentals and running of time against the term of the lease or leases involved shall be
suspended as of the first day of the month following the filing of the waiver or suspension
of the rights until the first day of the month following the final decision in the proceeding
of the revocation of the waiver or suspension.
“(k) Except as otherwise provided in this Act, if any lands or deposits subject to the
provision of this Act shall be subleased, trusted, possessed, or controlled by any device
permanently, temporarily, directly, indirectly, tacitly, or in any manner whatsoever, so
that they form a part of or are in any wise controlled by any combination in the form of
an unlawful trust, with the consent of the lessees, optionee, or permittee, or from the
subject of any contract of conspiracy in restraint of trade in the mining or selling of coal,
phosphate, oil, oil shale, native asphalt, solid and semisolid bitumen, bituminous rock,
gas, sodium entered into by the lessee, optionee, or permittee or any agreement or
understanding, written, verbal, or otherwise, to which such lessee, optionee, or permittee
shale be part, of which his or its output is to be or become the subject, to control the price
or prices thereof or of any holding of such lands by any individual, partnership,
association, corporation, or control in excess of the amounts of lands provided in this Act,
the leases, options, or permit shall be forfeited by appropriate court proceedings.”

75

SELL BY APPROPRIATE
METHOD

HEARING
PRIMA FACIE EVIDENCE

PAYMENT SUSPENSION

UNLAWFUL TRUST

NONCOMPETITIVE LEASE
EXTENSION

Sec.4 (a) Upon the expiration of the initial five-year term of any noncompetitive oil or
gas lease which was issued prior to enactment of this Act and which has been maintained
in accordance with applicable statutory requirements and regulations, the record
titleholder thereof shall be entitled to a single extension of the lease, unless then
otherwise provided by law, for such lands covered by it as are not, on the expiration sate
of the lease, withdrawn from leasing. A withdrawal, however, shall not affect the right
an extension if actual drilling operations on such lands were commenced prior to the
effective date of the withdrawal and were being diligently prosecuted on the expiration
date of the lease. No withdrawal shall be effective within the meaning of this section
until ninety days after notice thereof has been sent by registered or certified mail to each
lessee to be affected by such withdrawal.
(b) As to lands not within the known geologic structure of a producing oil or gas filed,
a noncompetitive oil or gas lease to which this section is applicable shall be extended for
a period of five years and so long thereafter as oil or gas is produced in paying quantities.
(c) Any noncompetitive oil and gas lease extended under this section shall be subject to
the rules and regulations in force at the expiration of the initial five-year term of the
lease. No extension shall be granted, however, unless within a period of ninety days prior
to the expiration date of the lease an application therefore is filed by the record titleholder
or an assignee whose assignment has been filed for approval or an operator whose
operating agreement has been filed for approval.
(d) Any lease issued prior to the enactment of the Mineral Leasing Act revision of
1960 which has been maintained in accordance with applicable statutory requirements
and regulations and which pertains to land on which, or for which under an approved
cooperative or unit plan of development or operations, actual drilling operations were
commenced prior to the end of its primary term and are being diligently prosecuted at
that time shall be extended for two years and so long thereafter as oil or gas is produced
in paying quantities.
Sec.5. the Act of February 25, 1920, as amended (30 U.S.C. 181 and the following), is
amended by adding a section 42 thereto a read as follows:
“Sec.42. No action contesting a decision of the Secretary involving any oil and gas
lease shall be maintained unless such action is commenced or taken within ninety days
after the final decision of the Secretary relating to such matter. No such action contesting
such a decision of the Secretary rendered prior to enactment of the Mineral Leasing Act
Revision of 1960 shall be maintained unless the same be commenced or taken within
ninety days after such enactment.”
Sec.6. The last sentence of section 30(a) of the Act of February 25, 1920, as amended
(30 U.S.C. 187a), is amended to read as follows:

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

76

WITHDRAWAL

LANDS NOT WITHIN KGS
NONCOMPETITIVE LEASE
EXTENSION
SUBJECT TO RULES AND REGS.

UNIT PLAN

Sec.42 ADDED
ACTION CONTESTING
SEC’Y. DECISIONS

Sec. 30(a)

“Upon the segregation by an assignment of a lease issued after the effective date of the
Mineral Leasing Act Revision of 1960 and held beyond its primary terms by production,
actual or suspended, or the payment of compensatory royalty, the segregated lease of an
undeveloped, assigned, or retained part shall continue for two years, and so long
thereafter as oil or gas is produced in paying quantities.”
The provisions of this section 6 shall not be applicable to any lease issued prior to the
effective date of this Act.
Sec.7. (a) Section 1 of the Act of February 25, 1920, as amended (30 U.S.C. 181),
section 21 of said Act (30 U.S.C. 241), and section 34 of said Act (30 U.S.C. 182) are
amended by the insertion of the words “native asphalt, solid and semisolid bitumen, and
bituminous rock (including oil-impregnated rock or sand from which oil is recoverable
only by special treatment after the deposit is mined or quarried)’ immediately after the
words “oil shale,” in the first sentence of each section. Section 21 of said Act (30 U.S.C.
241) is further amended by striking out the period at the end of the last sentence and
adding these words “except that with respect to leases for native asphalt, solid and
semisolid bitumen, and bituminous rock (including oil-impregnated rock or sand from
which oil is recoverable only by special treatment after the deposit is mined or quarried)
no person, association, or corporation shall acquire or hold more than seven thousand six
hundred eighty acres in any one State without respect of the number of leases.”
(b) Section 21 of said Act is further amended by inserting the designation (a)
immediately after the term “section 21” and by adding two new subsections to read as
follows:
“(b) In an offer for a lease under the provision of this section for deposits other than oil
shale is bases upon a mineral location, the validity of which might be questioned because
the claim was based on a placer location rather than on a lode location, or vice versa, the
offeror shall have a preference right to a lease if the offer is filed not more than one year
after the enactment of the Mineral Leasing Act Revision of 1960.
“(c) With respect to native asphalt, solid and semisolid bitumen, and bituminous rock (
including oil-impregnated rock or sands from which oil is recoverable only by special
treatment after the deposit is mined or quarried) a lease under the multiple use principle
may issue not withstanding the existence of an outstanding lease issued under any other
provision of this Act.”
Sec.8. No amendment made by this Act shall affect any valid right in existence on the
effective date of the Mineral Leasing Act Revision of 1960.
Approved September 2, 1960.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnote
listed under the section number to locate subsequent amendments to each section.

77

SEGREGATION BY ASSIGNMENT
OF LEASE

Sec.1
COAL-RELATED PRODUCTS

ACREAGE
Sec.21
LEASE OFFER OTHER THAN
OIL SHALE

ACT OF OCTOBER 15, 1962

ACT OF OCTOBER 15, 1962

To amend the Mineral Leasing Act of February 25, 1920.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 31 of the Mineral Leasing Act of February
25, 1920 (41 Stat. 450), as amended (30 U.S.C. 188), is further amended by designating
the first paragraph thereof as subsection “(a)”, the second paragraph as subsection “(b)”,
and adding two new subsections to read as follows:
“(c) Where any lease has been terminated automatically by operation of law under this
section for failure to pay rental timely and it is shown to the satisfaction of the Secretary
of the Interior that the failure to pay timely the lease rental was justifiable or not due to a
lack of reasonable diligence, he in his judgment may reinstate the lease subject to the
following conditions:
“(1) A petition for reinstatement, together with the required rental, for any lease
(a) terminated prior to the effective date of this Act must be filed with the
Secretary of the Interior within one hundred and eighty days after the effective
date of this Act;
“(2) no valid lease has been issued affecting any of the lands in the terminated
lease prior to the filing of the petition for reinstatement.
“(d) Where, in his judgment of the Secretary of the Interior, drilling operations were
being diligently conducted on the last day if the primary terms of the lease, and, except
for nonpayment of rental, the lease would have been entitled to extension of his lease,
pursuant to section 4(d) of the Act of September 2, 1960 (74 Stat. 790), the Secretary of
the Interior may reinstate such lease not withstanding the failure of the lessee to have
made payment of the next year’s rental, provided the conditions of subparagraphs (1) and
(2) of section (c) are satisfied.”
Sec.2. nothing in this Act shall be construed as limiting the authority of the Secretary
of the Interior to issue, during the periods in which petitions for reinstatement may be
filed, oil and gas leases for any of the lands affected.
Approved October 15, 1962.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

78

Sec. 31

FAILURE TO PAY TIMELY

REINSTATMENT

EXTENSION EXCEPT FOR
RENTAL NONPAYMENT

ACT OF AUGUST 31, 1964
ACT OF AUGUST 31, 1964

To amend section 27 of the Mineral Leasing Act of February 25, 1920, as amended, in
order to promote the development of coal on the public domain and for other purposes.
COAL

Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That subsection (a) (1) of section 27 of the Act of
February 25, 1920, as amended (30 U.S.C. 184), is further amended to read as follows:
“(a) (1) No person, association, or corporation shall take, hold, own, or control at one
time, whether acquired directly from the Secretary under this act or otherwise, coal leases
or permits on an aggregate of more than forty-six thousand and eighty acres in any one
State.”
Sec.2. (a) Subsection (a) of section 2 of the Act of February 25, 1920, as amended (30
U.S.C. 201 (a)), is further amended by the deletion from the first sentence of the words
“but in no case exceeding two thousand five hundred and sixty acres in any one leasing
tract.”.
(b) Subsection (b) of section 2 of the Act of February 25, 1920, as amended (30 U.S.C.
201(b)), is further amended by changing the words “two thousand five hundred and sixty
acres” in the first sentence thereof to “five hundred one hundred and twenty acres”.
(c) For the purpose of more properly conserving the natural resources of any coalfield
or prospective coal area, or any part or zone thereof, lessees and permittees and their
representatives any enter into a contract with each other or others for collective
prospecting, development, or operation of such field or prospective coal area, or any part
or zone thereof, whenever determined and certified by the Secretary of the Interior to be
in the public interest. A contract approved hereunder shall not provide for an
apportionment of production or royalties among the separate tracts comprising the
contract area, but may provide for the commingling of production with appropriate
allocation to the tracts from which produced. No withstanding any provision of this
section to the contrary, the Secretary may, with the consent of the lessees or permittees
involved, establish, alter, change, or revoke mining, producing, rental, minimum royalty,
and royalty applicable to such leases or permits or contract. The Secretary I authorized to
enter into a contract with a single lessee or permittee embracing his leases or permits.
The Secretary may authorize the consolidation of separate Federal permits of leases into a
lesser number of permits or leases, or into a single permit or lease.
(d) Coal leases and permits operated under a contract approved or executed by the
Secretary pursuant to subsection (c) of this section may be excepted from limitations on
maximum holding or control imposed by this Act if the Secretary finds that such
exception is otherwise consistent with the public interest.
Approved August 31, 1964.

Sec. 27
ACREAGE
Sec. 2 (a)
ACREAGE

COLLECTIVE PROSPECTING
DEVELOPMENT OR OPERATION

CONTRACT

COMMINGLING OF PRODUCTION

EXCEPTIONS FROM LIMITATIONS

ACT OF SEPTEMBER 6, 1966
Schedule of Laws Repealed

ACT OF SEPTEMBER 6, 1966
Sec. 38 REPEALED

79

ACT OF MAY 12, 1970

ACT OF MAY 12, 1970

To authorize the Secretary of the Interior to prevent terminations of oil and gas
leases on causes where there is a nominal deficiency in the rental payment, and to
authorize him to relocate under some conditions oil and gas leases terminated by
operation of law for failure to pay rental timely.

OIL AND GAS

Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 31 (b) of the mineral Leasing Act of 1920
(41 Stat. 450), as amended (30 U.S.C. 188 (b)), is amended by changing the period at the
end thereof to a colon and adding the following: “Provided, That if the rental payment
due under a lease is paid on or before the anniversary date but either (1) the amount of the
payment has been or is hereafter deficient and the deficiency is nominal., as determined
by the Secretary by regulations, or (2) the payment was calculated in accordance with the
acreage figure stated in the lease, or in any decision affecting the lease, or made in
accordance with a bill or decision is found to be in error resulting in a deficiency sent to
him by the Secretary.”
Sec.2. Section 31 (c) of the Mineral Leasing Act of 1920 (41 Stat. 450), as amended
(30 U.S.C. 188 (c)), is amended to read as follows:
“(c) Where any lease has been or is hereafter terminated automatically by operation of
law under this section for failure to pay on or before the anniversary date the full amount
of rental due, but such rental was paid on or tendered within twenty days thereafter, and it
is shown to the satisfaction of the Secretary of the Interior that such failure was either
justifiable or not due to a lack of reasonable diligence on the part of the lessee, the
Secretary may reinstate the lease if —
“(1) a petition for reinstatement, together with the required rental, including back
rental accruing from the date of termination of the lease, is filed with the
Secretary; and
“(2) No valid lease has been issued affecting any of the lands covered by the
terminated lease prior to the filing of said petition. The Secretary shall not issue
any new lease affecting any of the lands covered by such terminated lease for a
reasonable period, as determined in accordance with regulations issued by him.
In any case where a reinstatement of a terminated lease is granted under this
subsection and the Secretary finds that the reinstatement of such lease will not
afford the lessee a reasonable opportunity to continue operations under the lease,
the Secretary may, at his discretion, extend the term of such lease for such period
as he deems reasonable: Provided, That (A) such extension shall not exceed a
period equivalent to the time beginning when the lessee knew or should have
known of the termination and ending on the date the Secretary grants such
petition; (B) such extension shall not exceed a period equal to the unexpired
portion of the lease or any extension thereof remaining at the date of
terminations; and (C) when the reinstatement occurs after the expiration of the
term or extension thereof the lease may be extended from the date the Secretary
grants the petition.”
Approve May 12, 1970.

Sec. 31(b)

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section

80

LEASE RENTAL PAYMENTS

Sec. 31 (c)
AUTOMATIC TERMINATIONS
PAYMENT WITHIN 20 DAYS
OF ANNIVERSARY DATE

REINSTATMENT

GEOTHERMAL STEAM ACT OF 1970

GEOTHERMAL STEAM ACT OF 1970
ACT OF DECEMBER 24, 1970

December 24, 1970

To authorize the Secretary of the Interior to make disposition of geothermal steam and
associated geothermal resources, and for other purposes.
GEOTHERMAL

Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That this Act may be cited as the “Geothermal Steam At
of 1970”.
Sec.2. As used in this Act, the term—
(a) “Secretary” means the Secretary of the Interior;
(b) “geothermal leases” means a lease issued under authority of this act;
(c) “geothermal steam and associated geothermal resources’ means (i) all
products of geothermal processes, embracing indigenous steam, hot water
and hot brines; (ii) steam and other gases, hot water and hot brines resulting
from water, gas, or other fluids artificially introduced into geothermal
formations; (iii) heat or other associated energy found in geothermal
formations; and (iv) any byproduct derived from them;
(d) “byproduct” means any mineral or minerals (exclusive of oil, hydrocarbon
gas, and helium) which are found in solution or in association with
geothermal steam and which have a valued of less than 75 per centum of the
value of the geothermal steam of are not, because of quantity, quality, or
technical difficulties in extraction and production, of sufficient value to
warrant extraction and production by themselves;
(e) “known geothermal resources area” means an area in which the geology,
nearby discoveries, competitive interest, or other indicia would, in the
opinion of the Secretary, engender a belief in men who are experienced in the
subject matter that the prospects for extraction of geothermal steam or
associated geothermal resources are good enough to warrant expenditures of
a money for that purpose.
Sec.3. Subject to the provisions of section 15 of this Act, the Secretary of the Interior
may issue leases for the development and utilization of the geothermal steam and
associated geothermal resources (1) in lands administered by him, including public,
withdrawn, and acquired lands, (2) in any national forest or other lands administered by
the Department of Agriculture through the Forest Service, including public, withdrawn,
and acquired lands, and (3) in lands which have been conveyed by the United States
subject to a reservation to the United States of the geothermal steam and associated
geothermal resources therein.
Sec.4. If lands to be leased under this Act are within any known geothermal resources
area, they shall be leased to the highest responsible qualified bidder by competitive
bidding under regulations formulated by the Secretary. If the lands to be leased are
within any known geothermal resources area, the qualified person first making
application for the lease shall be entitled to a lease of such lands without competitive
bidding. Notwithstanding the foregoing, at any time
NOTE: Regarding all Mineral Leasing Act section noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

81

ISSUANCE OF GEOTHERMAL
LEASES

KNOWN GEOTHERMAL REOUCES
AREA
COMPETITIVE BIDS
HIGHEST REPONSIBLE
QUALIFIED BIDDER

within one hundred and eighty days following the effective date of this Act:
(a) with respect to all lands which were on September 7, 1965, subject to valid
leases or permits issued under the Mineral Leasing Act of February 25, 1920, ad
amended (30 U.S.C. 181 et seq.), or under the Mineral Leasing Act of Acquired
Lands, as amended (30 U.S.C. 351, 358), or to existing mining claims located on
or prior to September 7, 1965, the lessees or permittees or claimants of their
successors in interest who are qualified to hold geothermal leases shall have the
right to convert such lease or permits or claims to geothermal leases covering the
same lands;
(b) where there are conflicting claims, leases, or permits therefore embracing
the same land, the person who first was issued a lease or permit, who first
recorded the mining claim shall be entitled to first consideration;
(c) with respect to all lands which were on September 7, 1965, the subject of
application for leases or permits under the above Act, the applicants may convert
their applications to applications for geothermal leases having priorities dating
from the time of filing of such applications under such Acts;
(d) no person all be permitted to convert mineral leases, permits, applications
therefore, or mining claims for more than 10, 240 acres; and
(e) the conversion of leases, permits, and mining claims and applications for
leases and permits shall be accomplished in accordance with regulations
prescribed by the Secretary. No right to conversion to a geothermal lease shall
accrue to any person under this section unless such person shows to the
reasonable satisfaction of the Secretary that substantial expenditures for the
explorations, development, or production of geothermal steam have been made
by the applicant who is seeking conversion, on the lands for which a lease is
sought on or adjoining, adjacent, or nearby Federal or non-Federal lands.
(f) with respect to land within any known geothermal resources area and which
are subject tot a right to conversion to a geothermal leases, such lands shall be
leased by competitive bidding: Provided, That, the competitive geothermal lease
shall be issued to the person owning the right to conversion to a geothermal lease
if he makes payment of an amount equal to the highest bona fide for the
competitive geothermal lease, plus the rental for the first year, within thirty days
after he received written notice from the Secretary of the amount of the highest
bid.
Sec.5. Geothermal leases shall provide for—
(a) a royalty of not more than 10 per centum or more than 15 per centum of the
amount of value of steam, or any other form of heat or energy derived from
production under the lease and sold or utilized by the lessee or reasonably
susceptible to sale or utilization by the lessee;
(b) a royalty of not more than 5 per centum of the value of any byproduct
derived from production under the lease and sold or utilized or reasonably
susceptible of sale or utilization by the

82

LEASE CONVERSION TO
GEOTHERMAL

lessee, except that as to any byproduct which is a mineral named in section 1 of
the Mineral Leasing Act of February 25, 1920, as amended (30 U.S.C. 181), the
rate of royalty for such mineral shall be the same as that provided in that Act and
the maximum rate of royalty for such mineral shall not exceed the maximum
royalty applicable under that Act;
(c) payment in advance of an annual rental of not less than $1 per acre or
fraction thereof for each year of the lease. If there is no well on the leased lands
capable of producing geothermal resources in commercial quantities, the failure
to pay rental on or before the anniversary date shall terminate the lease by
operation of law: Provided, however, That whenever the Secretary discovers that
the rental payment due under a lease is paid timely but the amount of the
payment is efficient because of an error or other reason and the deficiency is
nominal, as determined by the Secretary pursuant to regulations prescribed by
him, he shall notify the lessee of the deficiency and such lease shall not
automatically terminate unless the lessee fails to pay the deficiency within the
period prescribed in the notice: Provided further, That where any lease has been
terminated automatically by operation of law under this section for failure to pay
rental timely and it is shown to the satisfaction of the Secretary of the Interior
that the failure to pay timely the lease rental was justifiable or not due to a lack of
reasonable diligence, he in his judgment may reinstate the lease if –
(1) a petition for reinstatement together with the required rental, is filed
with the Secretary of the Interior; and
(2) no valid lease has been issued affecting any of the lands in the
terminated lease prior to the filing of the petition for reinstatement; and
(d) a minimum royalty of $2 per acre of fraction thereof in lieu of rental
payable at the expiration of each lease year for each producing lease,
commencing with the lease year beginning on or after the commencement of
production in commercial quantities. For the purpose of determining royalties
hereunder the value of any geothermal steam and byproduct used by the lessee
and not sold and reasonably susceptible of sale shall be determined by the
Secretary, who shall take into consideration the cost of exploration and
production and the economic value of the resource in terms of its ultimate
utilization.
Sec.6. (a) Geothermal leases shall be fore a primary term of ten years. If geothermal
steam is produced or utilized in commercial quantities within this term, such lease shall
continue for so long thereafter as geothermal steam is produced or utilized in commercial
quantities, but such continuation shall not exceed an additional forty years.
(b) If at the end of such forty years, steam is provided or utilized in commercial
quantities and the lands are not needed for other purposes, the lessee shall have a
preferential right to renewal of such lease for a second forty-year term in accordance with
such terms and conditions as the Secretary deems appropriate.
(c) Any lease for land on which, or for which under an approved cooperative or unit
plan of development or operation, actual drilling

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

83

Sec. 1

ROYALTY

TIMELY PAID BUT
DEFICIENT

MINIMUM ROYALTY

10 YEAR PRIMARY LEASE
COMMERICAL QUANTITIES
UNIT PLAN

operations were commenced prior to the end of its primary terms and are being diligently
prosecuted at the time shall be extended for five years and so long thereafter but no more
than thirty-five year, as geothermal steam is produced or utilized in commercial
quantities. If, at the end of such extended term, steam is being produced or utilized in
commercial quantities and the lands are not needed for other purposes, the lessee shall
have a preferential right to a renewal of such lease for a second term in accordance with
such terms and conditions as the Secretary deems appropriate.
(d) For purposes of subsection (a) of this section, production or utilization of
geothermal steam in commercial quantities shall be deemed to include the completion of
one or more wells producing or capable of producing geothermal steam in commercial
quantities and a bona fide sale of such geothermal steam for delivery to or utilization by a
facility or facilities not yet installed but schedule for installation not later than fifteen
years from the date of commencement of the primary term of the lease.
(e) Leases which have extended by reasons of production, or which have produced
geothermal steam, and have been determined by the Secretary to be incapable of further
commercial production and utilization of geothermal steam may be further extended for a
period of not more than five years from the date of such determination but only for so
long as one or more valuable byproducts are produced in commercial quantities. If such
byproducts are leasable under the Mineral Leasing Act for Acquired Lands (30 U.S.C.
351-358), and the leasehold is primarily valuable for the production thereof, the lessee
shall be entitled to convert his geothermal lease to a mineral lease under, a subject to all
the terms and conditions of, such appropriate Act upon application at any time before
expiration of the lease extension by reason of byproduct production. The lessee shall be
entitled to locate under the mining laws all minerals which are not leasable and which
would constitute a byproduct if commercial production or utilization of geothermal steam
continued. Any such converted lease or the surface of any mining claim located for
geothermal byproducts mineral affecting lands withdrawn or acquired in aid of a function
of a Federal department or agency, including the Department of the Interior, shall be
subject to such additional terms and conditions as may be prescribed by such department
or agency with respect to the additional operations or effects resulting from such
conversion upon adequate utilization of the lands for the purpose for which they are
administered.
(f) Minerals locatable under the mining laws of the united States in land subject to a
geothermal lease issued under the provisions of this Act which are not associated with the
geothermal steam and associated geothermal resources of such lands as defined in section
2 (c) herein shall be locatable under said mining laws in accordance with the principles of
the Multiple Mineral Development Act (68 Stat. 708; found in 30 U.S.C. 521 et seq.).

84

COMMERICAL QUANTITY

EXTENSIONS

CONVERSION TO
MINERAL LEASE

LOCATABLE MINERALS

Sec.7. A geothermal lease shall embrace a reasonably compact area of not more than
two thousand five hundred and sixty acres, except where a departure there from is
occasioned by an irregular subdivision or subdivisions. No person, association, or
corporation, except as otherwise provided in this Act, shall take, hold, own, or control at
one time, whether acquired directly from the Secretary under this Act or otherwise, any
direct or indirect interest in Federal geothermal leases in any one States exceeding twenty
thousand four hundred and eighty acres, including leases acquired under the provisions of
section 4 of this Act.
At any time after fifteen years from the effective date of this Act the Secretary, after
public hearings, may increase this maximum holding in any one State by regulations, not
to exceed fifty-one thousand two hundred acres.
Sec.8. (a) The Secretary may readjust the terms and conditions, except as otherwise
provided herein, of any geothermal lease issued under this Act at not less than ten-year
intervals beginning ten years after the date the geothermal steam is produced, as
determined by the Secretary. Each geothermal lease issued under this Act shall provide
for such readjustment. The Secretary shall give notice of any proposed readjustment of
terms and conditions, and, unless the lessee files with the Secretary objection to the
proposed terms or relinquishes the lease within thirty days after receipt of such notice, the
lessee shall conclusively be deemed to have agreed with such terms and conditions. If
the lessee files objections, and no agreement can be reached between the Secretary and
the lessee within a period of not less than sixty days, the lease may be terminated by
either part.
(b) The Secretary may readjust the rentals and royalties of any geothermal lease issued
under this Act at not less than twenty-year intervals beginning thirty-five years after the
date geothermal steam is produced, as determined by the Secretary. In the event of any
such readjustment neither the renal nor royalty may be increased by more than 50 per
centum. Each geothermal lease issued under this act shall provide for such readjustment.
The Secretary shall give notice of any proposed readjustment of rentals and royalties,
and, unless the lessee files with the Secretary objection to the proposed rentals and
royalties or relinquishes the lease within thirty days after receipts of such notice, the
lessee shall conclusively de deemed to have agreed with such terms and conditions. If
the lessee files objects, and no agreement can be reached between the Secretary and the
lessee within a period of not less than sixty days, the lease may be terminated by either
party.
(c) Any readjustment of the terms and conditions as to use, protection, or restoration
off the surface of any lease of lands withdrawn or acquired in aid of a function of a
Federal department or agency other than the Department of the Interior may be made
only upon notice to, and with the approval of, such department or agency.
Sec.9. If the production, use, or conversion of geothermal steam is susceptible of
producing a valuable byproduct or byproducts, including commercially demineralized
water for beneficial uses in accordance

85

ACREAGE

INCREASED ACREAGE

ADJUSTMENT OF LEASE TERMS
OR CONDITIONS

ADJUSTMENT OF RENTALS
OR ROYALTIES

SURFACE USE

BYPRODUCTS INCLUDING WATER

with applicable State water laws, the Secretary shall require substantial beneficial
production or use thereof unless, in individual circumstances he modifies or waives this
requirement in the interest of conservation of natural resources or for other reasons
satisfactory to him. However, the production or use of such byproducts shall be subject
to the rights of the holders of preexisting leases, claims, or permits covering the same
land or the same minerals, if any.
Sec.10. The holder of any geothermal lease at any time may make and file in the
appropriate land office a written relinquishment of all rights under such lease of any legal
subdivision of the area covered by such lease. Such relinquishment shall be effective as
of the date of its filing. Thereupon the lessee shall be released of all obligations
thereafter accruing under said lease with respect to the lands relinquished, but no such
relinquishment shall release such lessee, or his surety or bond, from any liability for
breach of any obligation of the lease, other than an obligation to drill, accrued at the date
of the relinquishment, or from the continued obligation, on accordance with the
applicable lease terms and regulations, (1) to make payment of all accrued rentals and
regulations, (2) to place all wells on the relinquished lands in conditions for suspension or
abandonment, and (3) to protect or restore substantially the surface and surface resources.
Sec.11. The Secretary, upon application by the lessee, may authorize the lessee to
suspend operations and producing lease and he may, on his own motion, in the interest of
conservation suspend operations on any lease but in either case he may extend the lease
term for the period of any suspension, and he may waive, suspend, or reduce the rental or
royalty required in such lease.
Sec.12. Leases may be terminated by the Secretary for any violation of the regulations
or lease terms after thirty days notice provided that such violation is not corrected within
the notice period, or in the event the violation is such that it cannot e corrected within the
notice period then provided that lessee had not commenced in good faith within said
notice period to correct such violation and thereafter to proceed diligently to correct such
violation. Lessee shall be entitled to a hearing on the matter of such claimed violation or
propose termination of lease if request for a hearing is made to the Secretary within the
thirty-day period after notice. The period for correction of violation or commencement to
correct such violation of regulations or of lease terms, as aforesaid, shall be extended to
thrity days after the Secretary decision after such hearing if the Secretary shall find that a
violation exists.
Sec.13. The Secretary may waive, suspend, or reduce the rental or royalty for any lease
or portion thereof in the interest of conservation and to encourage the greatest ultimate
recovery of geothermal resources, if he determines that this is necessary to promote
development or that the lease cannot be successfully operated under the lease terms.
Sec.14. Subject to the other provisions of this Act, a lessee shall be entitled to use so
much of the surface of the land covered by this geothermal lease as may be found by the
Secretary to be necessary for the production, utilization, and conservation of geothermal
resources.

86

RELINGQUISHMENT OF RIGHTS

SUSPENSION OF LEASES

TERMINATION OF LEASES

ROYALTY REDUCTION

SURFACE USE

Sec.15. (a) Geothermal leases for land withdrawn or acquired in aid of functions of the
Department of the Interior may be issued only under such terms and conditions as the
Secretary may prescribe to insure adequate utilization of the lands for the purposes for
which they were withdrawn or acquired.
(b) Geothermal leases for lands withdrawn or acquired in aid for functions of the
Department of Agriculture may be issued only with consent of, and subject to such terms
and conditions as may be prescribed by, the head of that Department to insure adequate
utilization of the lands for the purpose for which they were withdrawn or acquired.
Geothermal leases for lands to which section 234 of the Federal Power Act, as amended
(16 U.S.C. 818), is applicable, may be issued only with the consent of, and subject to,
such terms and conditions as the Federal Power Commission may prescribe to insure
adequate utilization of such lands for power and related purposes.
(c) Geothermal leases under this Act shall not be issued for lands administered in
accordance with (1) the Act of August 25, 1916 (39 Stat. 535), as amended or
supplemented, (2) for lands within a national recreation area, (3) for lands in a fish
hatchery administered by the Secretary, wildlife refuge, wildlife range, game range,
wildlife management area, waterfowl production area, or for lands acquired or reserved
for the protection and conservation of fish and wildlife that are threatened with
extinction, (4) for tribally of individually owned Indian trust or restricted lands, within or
without the boundaries of Indian reservations.
Sec.16. Leases under this Act may be issued only to citizens of the Untied States,
associations of such citizens, corporations organized under the laws of the Untied States
of any State or the District of Columbia, or governmental units, including, without
limitations, municipalities.
Sec.17. Administration of this Act shall be under the principles of multiple use of lands
and resources, and geothermal leases shall, insofar as feasible, allow for coexistence of
other leases of the same lands for deposits of minerals under the laws applicable to them,
for the location and production of claims under the mining laws, and for other uses of the
areas covered by them. Operations under such other leases or for such other uses,
however, shall not unreasonably interfere with or endanger operations under any leases
so issued unreasonably interfere with or endanger operations under any lease, license,
claim, or permit issued pursuant to the provisions of any other Act.
Sec.18. For the purpose of properly conserving the natural resources of any geothermal
pool, field, or like area, or any part thereof, lessees thereof and their representatives may
unite with each other, or jointly or separately with others, in collectively adopting and
operating under a cooperative or unit plan of development or operations of such pool,
field, or like area, or any part thereof, whenever this is determined and certified by the
Secretary to be necessary of advisable in the public interest. The Secretary may in his
discretion and with the consent of the holders of lease involved, establish, alter change,
revoke, and make such regulations with reference to such leases in connection with the
institution and operations of any such cooperative or unit plan as he may deem necessary
or proper to secure reasonable protection of the

87

WITHDRAWN OR ACQUIRED
LANDS

LANDS UNAVAILABLE FOR
GEOTHERMAL LEASING

OWNERS OF LEASES

MULTIPLE USE

UNIT PLAN

public interest. He may include in geothermal leases a provision requiring the lessee to
operate under such a reasonable cooperative or unit plan, and he may prescribe such a
plan under which such lessee shall operate, which shall adequately protect the rights of
all parties in interest, including the United States. Any such plan may, in the discretion
of the Secretary, provide for vesting in the Secretary or any other person, committee, of
Federal or State agency designated therein, authority to alter or modify from time to time
the rate of prospecting and development and the quantity and rate of production under
such plan. All leases operated under any such plan approved or prescribed by the
Secretary shall be excepted in determining holdings or control for the purposes of section
7 of this Act.
When separate tracts cannot be independently developed and operated in conformity
with an established well-spacing or development program, any lease, or a portion thereof,
may be pooled with other lands, whether or not owned by the United States, under a
communitization or drilling agreement providing for an apportionment of production or
royalties among the separate tracts of land comprising the drilling or spacing unit with
determined by the Secretary to being the public interest, and operations or production
pursuant to such an agreement shall be deemed to be operations or production as to each
lease committed thereto.
The Secretary is hereby authorizes, on such conditions as he may prescribe, to approve
operating, drilling, or development contracts made by one or more lessees of geothermal
leases, with one or more persons, associations, or corporations whenever, in his
discretion, the conservation of natural products or the public convenience or necessity
may require or the interests of the United States may be best served thereby. All leases
operated under such approved operating, drilling, or development contracts, and interest
thereunder, shall be excepted in determining holding or control under section 7 of this
Act.
Sec.19. Upon request of the Secretary, other Federal departments and agencies shall
furnish him with any relevant date then in their possession or knowledge concerning or
having bearing upon fair and adequate charges to be made for geothermal steam
produced or to be produced for conversion to electric power or other purposes. Data
given to any department or agency as confidential under law shall not be furnished in any
fashion which identifies or tends to identify the business entity whose activities are the
subject of such data or the person or persons who furnished such information.
Sec.20. All moneys received under this Act from public lands under this jurisdiction
of the Secretary shall be disposed of in the same manner as moneys received from the
sale of public lands. Moneys received under this Act from other lands shall be disposed
of in the same manner as other receipts from such lands.
Sec.21. (a) Within one hundred and twenty days after the effective date of this Act, the
Secretary shall cause to be published in the Federal Register a determination of all lands
which were included within any known geothermal resources area on the effective date of
the Act. He shall likewise publish in the Federal Register from time to time his
determination of other known geothermal resources areas

88

POOLING

CONTRACTS

FAIR AND ADEQUATE CHARGES

DISPERSAL OF MONEYS
RECEIVED

KNOWN GEOTHERMAL
RESOURCES AREA LSIT

specifying in each case the date the lands were included in such area and
(b) Geothermal resources in lands the surface of which has passed from Federal
ownership but in which the minerals have been reserved to the United States shall not be
developed or produced except under geothermal leases made pursuant to this Act. If the
Secretary of the Interior finds that such development is imminent, or that production from
a well heretofore drilled on such lands is imminent, he shall so report to the Attorney
General, and the Attorney General is authorized and directed to institute an appropriate
proceedings in the United States district court of the district in which such lands are
located, to quite the title of the United States in such resources, and if the court
determines that the reservation of minerals to the United States in the lands involved
included the geothermal resources, to enjoin their production otherwise than under the
terms of this Act: Provided, That upon an authoritative judicial determination that federal
mineral reservation does not include geothermal steam and associated geothermal
resources the duties of the Secretary of the Interior to report and of the Attorney General
to institute proceedings, as hereinbefore set forth shall cease.
Sec.22. Nothing in this Act shall constitute an express or implied claim or denial on the
part of the Federal Government as to its exemption from State water laws.
Sec.23. (a) All leases under this Act shall be subject to the condition that the lessee
will, in conducting his exploration, development, and producing operations, use all
reasonable precautions to prevent waste of geothermal steam and associated geothermal
resources developed in the lands leased.
(b) Rights to develop and utilize geothermal steam and associated geothermal
resources underlying lands owned by the Untied States may be acquired solely in
accordance with the provisions of this Act.
Sec.24. The Secretary shall prescribe such rules and regulations as he may deem
appropriate to carry out the provisions of this Act. Such regulations may include, without
limitation, provisions for (a) the prevention of waste, (b) development and conservation
of geothermal and other natural resources, (c) the protection of the public interest, (d)
assignment, segregation, extension of terms, relinquishment of leases, development
contracts, unitization, pooling, and frilling agreements, (e) compensatory royalty
agreements, suspension of operations or production, and suspension or reduction or
rentals or royalties, (f) the filing of surety bonds to assure compliance with the terms of
the lease and to protect surface use and resources, (g) use of the surface by a lessee of the
lands embraces in his lease, (h) the maintenance by the lessee of an active development
program, and (i) protection of water quality and other environmental qualities.
Sec.25. As to any land subject to geothermal leasing under section 3 of this Act, all
laws which either (a) provide for the disposal of land by patent or other form of
conveyance or by grant or by operations of law subject to a reservation of any mineral or
(b) prevent or restrict the disposal of such land because of the mineral character of the
land, shall hereafter be deemed to embrace geothermal steam and associated geothermal
resources as a substance which either must be reserved or

89

MINERAL RESERVATION

DISPERSAL OF MINERAL
LANDS

must prevent or restrict the disposal of such lands, as the case may be. This section shall
not be construed to affect grants, patents, or other forms of conveyances made prior to the
date of enactment of this Act.
Sec.26. The first two clauses in section 11 of the Act of August 13, 1954 (68 Stat. 708,
716), are amended to reads as follows:
“As used in this Act ‘mineral leasing laws’ shall mean the Act of February 25, 1920
(41 Stat. 437); the Act of April 17, 1926 (44 Stat. 301); the Act of February 7, 1927 ( 44
Stat. 1057); Geothermal Steam Act of 1970, and all Acts heretofore or hereafter enacted
which are amendatory of or supplementary to any of the foregoing Acts; “Leasing Act
minerals’ shall mean all minerals which, upon the effective date of this Act, are provided
in the mineral leasing laws to be disposed of thereunder and all geothermal steam and
associated geothermal resources which, upon the effective date of the Geothermal Steam
Act of 1970, are provided in that Act to be disposed of thereunder;”.
Sec.27
The United States reserves the ownership of and the right to extract under such rules and
regulations as the Secretary may prescribe oil, hydrocarbon gas and helium from all
geothermal steam and associated geothermal resources produced from lands leased under
this Act in accordance with presently applicable laws: Provided, That whenever the right
to extract oil, hydrocarbon gas, and helium from geothermal steam and associated
geothermal resources produced from such lands is exercised pursuant to this section, it
shall be exercised so as to cause no substantial interference with the production of
geothermal steam and associated geothermal resources from such lands.
Approved December 24, 1970.

90

INCLUDED GEOTHERMAL
RESOURVES IN THE ACT
OF 2/25/20

UNITED STATES RESERVATION

TRANS-ALASKA PIPELINE AUTHORIZATION ACT
November 16, 1973

TRANS-ALASKA PIPELINE
AUTHORIZATION ACT

ACT OF NOVEMBER 16, 1973

To amend section 28 of the Mineral Leasing Act of 1920, and to authorize a trans-Alaska
oil pipeline, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled,
TITLE I
Sec.101. Section 28 of the Mineral Leasing Act of 1920 (41 Stat. 449), as amended (30
U.S.C. 185), is further amended to read as follows:
“Grant of Authority

Sec. 28

GRANT OF AUTHORITY

“Sec.28. (a) Rights-of-way through any Federal lands may be granted by the Secretary
of the Interior or appropriate agency head for pipeline purposes for the transportation of
oil, natural gas, synthetic liquid or gaseous fuels, or any refined product produced
therefrom to any applicant possessing the qualifications provided in section 1 of this Act,
as amended, in accordance with the provisions of this section.
“Definitions
“(b) (1) For the purposes of this section ‘Federal lands’ means all lands owned by the
United States except lands in the National Park System, lands held in trust for the Indian
or Indian tribe, and lands on the Outer Continental Shelf. A right-of-way through a
Federal reservation shall not be granted if the Secretary or agency head determines that it
would be inconsistent with the purposes of the reservation.
“(2) ‘Secretary’ means the Secretary of the Interior.
“(3) ‘Agency head’ means the head of any Federal department or independent Federal
office or agency, other than the Secretary of the Interior, which has jurisdiction over
Federal lands.
“Inter-Agency Coordination
“(c) (1) Where the surface of all of the Federal lands involved in a proposed right-ofway or permit is under the jurisdiction of one Federal agency, the agency head, rather
than the Secretary, is authorized to grant or renew the right-of-way or permit for the
purposes set forth in this section.
“(2) Where the surface of the Federal lands involved is administered by the Secretary
or by two or more Federal agencies, the Secretary is authorized, after consultation with
the agencies involved, to grant or renew rights-of-way or permits through the Federal
lands involved. The Secretary may enter into interagency agreements with all other
Federal agencies having jurisdiction over Federal lands for the purpose of avoiding
duplications, assigning responsibility, expediting

NOTE: Regarding all Mineral Leasing Act section noted on this page: SEE
footnotes listed under the section number to locate subsequent amendments to
each section.
91

DEFINITIONS

INTER-AGENCY COORDINATION

review of rights-of-way or permit applications, issuing joint regulations, and assuring a
decision based upon the comprehensive review of all factors involved in any right-of-way
or permit applications. Each agency head shall administer and enforce the provisions of
this section, appropriate regulations, and the terms and conditions of rights-of-way or
permits insofar as they involve Federal lands under the agency head’s jurisdiction.
WIDTH LIMITATIONS

“Width Limitations
“(d) the width of right-of-ways shall not exceed fifty feet plus the ground occupied by
the pipeline (that is, the pipe and its related facilities) unless the Secretary or agency head
finds and records the reason for his finding, that in his judgment a wider right-of-way is
necessary for operations and maintenance after construction, or to protect the
environment or public safety. Related facilities include but are not limited to valves,
pump stations, supporting structures, bridges, monitoring and communication devices,
surge and storage tanks, terminals, roads, airstrips and campsites, and they need not
necessarily be connected or contiguous to the pipe and may be the subject of separate
rights-of-way.
“Temporary Permits
TEMPORARY PERMITS

“(e) A right-of-way may be supplemented by such temporary permits for the use of
Federal lands in the vicinity of the pipeline as the Secretary or agency head finds are
necessary in connection with construction, operations, maintenance, or termination of the
pipeline, or to protect the natural environment or public safety.
“Regulatory Authority

REGULATORY AUTHORITY

“(f) Rights-of-way or permits granted or renewed pursuant to this section shall be
subject to regulations promulgated in accord with the provisions of this section and shall
be subject to such terms and conditions as the Secretary or agency head may prescribe
regarding extent, duration, survey, location, construction, operations, maintenance, use,
and termination.
“Pipeline Safety

PIPELINE SAFETY

“(g) The Secretary or agency head shall impose requirements for the operations of the
pipeline and related facilities in a manner that will protect the safety of workers and
protect the public from sudden ruptures and slow degradation of the pipeline.
“Environmental Protection
“(h) (1) Nothing in this section shall be construed to amend, repeal, modify, or change
in any way the requirements of section 102 (2) (c) of any other provision of the National
Environmental Policy Act of 1969 (Public Law 91-190, 83 Stat, 852).

92

ENVIRONMENTAL PROTECTION

RIGHT-OF-WAY OR PERMIT
SUBMISSION OF PLAN

“(2) The Secretary or agency head, prior to granting a right-of-way or permit pursuant
to this section for a new project which may have a significant impact on the environment,
shall require the applicant to submit a plan of construction, operation, and rehabilitation
for such right-of-way or permit which shall comply with this section. The Secretary or
agency head shall issue regulations or impose stipulations which shall include, but shall
not be limited to: (A) requirements for restoration, revegetation, and curtailment of
erosion of the surface of the land; (B) requirements to insure that activities in connection
with the right-of-way or permit will not violate applicable air and water quality standards
nor related facility siting standards established by or pursuant to law; (C) requirements
designed to control or prevent (i) damage to the environment (including damage to fish
and wildlife habitat), (ii) damage to public or private property, and (iii) hazards to public
health and safety; and (D) requirements to protect the interests of individuals living in the
general area of the right-of-way or permit who rely on the fish, wildlife, and biotic
resources of the area for subsistence purposes. Such regulations shall be applicable to
every right-of-way or permit granted pursuant to this section, and may be made
applicable by the Secretary or agency head to existing rights-of-way or permits, or rightsof-way or permits to be renewed pursuant to this section.
“Disclosure

DISCLOSURE

“(i) If the applicant is a partnership, corporation, association, or other business entity,
the Secretary or agency head shall require the applicant to disclose the identity of the
participants in the entity. Such disclose shall include where applicable (1) the name and
address of each partner, (2) the name and address of each shareholder owning 3 per
centum or more of the shares, together with the number and percentage of any class of
voting shares of the entity which such shareholder is authorized to vote, and (3) the name
and address of each affiliate of the entity together with, the case of an affiliate controlled
by the entity, the number of shares and the percentage of any class of voting stock of that
affiliate owned, directly or indirectly, by that entity, and, in the case of an affiliate which
controls that entity, the number of shares and the percentage of any class of voting stock
of that entity owned, directly or indirectly, by the affiliate.
“Technical and Financial Capability
“(j) The Secretary or agency head shall grant or renew a right-of-way or permit under
this section only when he is satisfied that the applicant had the technical and financial
capability to construct, operate, maintain, and terminate the project for which the rightof-way of permit is requested in accordance with the requirements of this section.

93

TECHNICAL AND FINANCIAL
CAPABILITY

PUBLIC HEARINGS

“Public Hearings
“(k) The Secretary or agency head by regulation shall establish procedures, including
public hearing where appropriate, to give Federal, States, and local government agencies
the public adequate notice and an opportunity to comment upon right-of-way applications
filed after the date of enactment of this subsection.
“Reimbursement of Costs

REIMBURSMENT OF COSTS

“(l) The applicant for a right-of-way or permit shall reimburse the United States for
administrative and other cost incurred in processing the application, and the holder of a
right-of-way or permit shall reimburse the United States for the costs incurred in
monitoring the construction, operation, maintenance, and termination of any pipeline and
related facilities on such right-of-way or permit area and shall pay annually in advance
the fair market rental value of the right-of-way or permit as determined by the Secretary
or agency head.
“Bonding

BONDING

“(m) Where he deems it appropriate the Secretary or agency head may require a holder
of a right-of-way or permit to furnish a bond, or other security, satisfactory to the
Secretary or agency head to secure all or any of the obligations imposed by the terms and
conditions of the right-of-way or permit or by any rule or regulation of the Secretary or
agency head.
“Duration of Grant

DURATION OF GRANT

“(n) Each right-of-way or permit granted or renewed pursuant to this section shall be
limited to a reasonable term in light of all circumstances concerning the project, but in no
event more than thirty years. In determining the duration of a right-of-way the Secretary
or agency head shall, among other things, take into consideration the cost of the facility,
its useful life, and any public purposes it serves. The Secretary or agency head shall
renew any right-of-way, in accordance with the provisions of this section, so long as the
project is in commercial operation and is operated and maintained in accordance with all
of the provisions of this section.
“Suspension or Termination of Right-of-Way
“(o) (1) Abandonment of a right-of-way or noncompliance with any provision of this
section me be grounds for suspension or termination of the right-of-way if (A) after due
notice to the holder of the right-of-way, (B) a reasonable opportunity to comply with this
section, and (C) an appropriate administrative proceedings pursuant to title 5, United
States Code, section 554, the Secretary or agency head determines that any such ground
exists and that suspension or termination is justified. No administrative proceeding shall
be required where the right-of-way by its terms provided that it terminates on the
occurrence of a fixed or agreed upon conditions, event, or time,

94

SUSPENSION OR TERMINATION
OF RIGHT-OF-WAY

“(2) If the Secretary or agency head determines that an immediate temporary
suspension of activities within a right-of-way or permit area is necessary to protect public
health or safety or the environment, he may abate such activities prior to an
administrative proceeding.
“(3) Deliberate failure of the holder to use the right-of-way for the purpose for which it
was granted or renewed for any continuous two-year period shall constitute a rebuttable
presumption of abandonment of the right-of-way: Provided, That where the failure to use
the right-of-way is due to circumstances not within the holder’s control the Secretary or
agency head is not esquires to commence proceedings to suspend or terminate the rightof-way.
“Joint Use of Right-of-Way

JOINT USE OF
RIGHT-OF-WAYS

“(p) In order to minimize adverse environmental impacts and the proliferation of
separate rights-of-way across Federal lands, the utilization of rights-of-way in common
shall be requires to the extend practical, and each right-of-way or permit shall reserve to
the Secretary or agency head the right to grant additional rights-of-way or permits for
compatible uses on or adjacent to rights0ofway or permit area granted pursuant to this
section.
“Statutes

STATUTES

“(q) No rights-of-way for the purposes provided for in section shall be granted or
renewed across Federal lands except under and subject to the provisions, limitations, and
conditions of this section. Any application for a right-of-way filed under any other law
prior to the effective date of this provision may, at the applicant’s option, be considered
as an application under shit section. The Secretary or agency head any require the
applicant to submit any additional information he deems necessary to comply with the
requirements of this section.
“Common Carriers
“(r) (1) Pipeline and related facilities authorized under this section shall be constructed,
operated, and maintained as common carriers.
“(2) (A) The owners or operators of pipelines subject to this section shall accept,
convey, transport, or purchases without discrimination all oil or gas delivered to the
pipeline without regard to whether such oil or gas was produced on Federal or nonFederal lands.
“(B) In the case of oil or gas produced from Federal lands or from the resources on the
Federal lands in the vicinity of the pipeline, the Secretary may, after a full hearing with
due notice thereof to the interested parties and a proper finding of facts, determine the
proportionate amounts to be accepted, conveyed, transported or purchased.
“(3) (A) The common carrier provisions of this section shall not apply to any natural
gas pipeline operated by any person subject to regulations under the Natural Gas Act or
by any public utility subject to regulation by a State or municipal regulatory agency
having jurisdiction to regulate the rates and charges for the sale of natural gas to
consumers within the State or municipality.

95

COMMON CARRIERS

“(B) Where natural gas not subject to State regulatory or conservation laws governing
its purchases by pipelines is offered for sale, each such pipeline shall purchases, without
discrimination, any such natural gas produced in the vicinity of the pipeline.
“(4) The Government shall in express terms reserve and shall provide in every lease of
oil lands under this Act that the lessee, assignee, or beneficiary, if owner or operator of a
controlling interest in any pipeline or of any company operating the pipeline which may
be operated accessible to the oil derived from lands under such lease, the oil of the
Government or of any citizen or company not the owner of any pipeline operating a lease
or purchasing gas or oil under the provisions of this Act.
“(5) Whenever the Secretary has reason to believe that any owner or operator subject
to this section is not operating any oil or gas pipeline in complete accord with its
obligations as a common carrier hereunder, he may request the Attorney General to
prosecute an appropriate proceeding before the Interstate Commerce Commission or
Federal Power Commission or any appropriate State agency or the United States district
court for the district in which the pipeline or any part thereof is located, to enforce such
obligation or to impose any penalty provided therefore, or the Secretary may, by
proceeding as provided in this section, suspend, or terminate the said grant of right-ofway for noncompliance with the provisions of this section.
“(6) The Secretary or agency head shall require, prior to granting or renewing a rightof-way, that the applicant submit and disclose all plans, contracts, agreements, or other
information or material which he deems necessary to determine whether a right-of-way
shall be granted or renewed and the terms and conditions which should be included in the
right-of-way. Such information may included, but it not limited to: (A) conditions for,
and agreements among owners or operators, regarding the addition of pumping facilities,
looping, or otherwise increasing the pipeline or terminal’s throughout capacity in repose
to actual or anticipated increases in demand; (B) conditions for adding or abandoning
intake, offtake, or storage points for facilities; and (C) minimum shipment or purchases
tenders.
“Right-of-Way Corridors

RIGHT-OF-WAY CORRIDORS

“(s) In order to minimize adverse environmental impact and to prevent the proliferation
of separate rights-of-way across Federal lands, the Secretary shall, in consultation with
other Federal and State agencies, review the need for a national system of transportation
and utility corridors across Federal lands and submit a report of his finding and
recommendations to the Congress and the President by July 1, 1975.
“Existing Rights-of-Way
“(t) The Secretary or agency head may ratify and confirm any right-of-way or permit
for an oil or gas pipeline or related facility that was granted under any provision of law
before the effective date of this subsection, if it is modified by mutual agreement to
comply to

96

EXISTING RIGHTS-OF-WAY

the extent practical with the provisions of this section. Any action taken by the Secretary
or agency head pursuant to this subsection shall not be considered a major Federal action
requiring a detailed statement pursuant to section 102(2)(C) of the National
Environmental Policy Act of 1970 (Public Law 90-190; 42 U.S.C. 4321).
“Limitations on Export

LIMITATIONS ON EXPORTS

“(u) Any domestically produced crude oil transported by pipeline over rights-of-way
granted pursuant to section 28 of the Mineral Leasing Act of 1920, except such crude oil
which is either exchanged in similar quantity for convenience or increased efficiency of
transportation with persons or the government of an adjacent foreign state, or which is
temporarily exported for convenience or increased efficiency of transportation with
persons or the government of an adjacent foreign state, or which is temporarily exported
for convenience or increased efficiency of transportation across parts of an adjacent
foreign state and reenters the United States, shall be subject to all of the limitations and
licensing requirements of the Export Administration Act of 1969 (Act of December 30,
1960; 83 Stat, 841) and, in addition, before any crude oil subject to this section may be
exported under the limitations and licensing requirements and penalty and enforcement
provisions of the export Administration Act of 1969 the President must make and publish
an express finding that such exports will not diminish the total quantity or quality of
petroleum available to the untied States, and are in the national interest and are in accord
with the provisions of the Export Administration Act of 1969: Provided, That the
President shall submit reports to the Congress containing findings made under this
section, and after the date of receipt of such report Congress shall have a period of sixty
calendar day, thirty days of which Congress must have a been in session, to consider
whether exports under the terms of this section are in the national interest. If the
Congress within this time period passes a concurrent resolution of disapproval stating
disagreement with the President’s finding concerning the national interest, further exports
made pursuant to the aforementioned Presidential finding shall cease.
“State Standards

STATE STANDARDS

“(v) The Secretary or agency head shall take into consideration and to the extent
practical comply with State standards for right-of-way construction, operation, and
maintenance.
“Reports
“(w) (1) The secretary and other appropriate agency heads shall report to the House
and Senate Committees on Interior and Insular Affairs annually on the administration of
this section and on the safety and environmental requirements imposed pursuant thereto.
“(2) The Secretary or agency head shall notify the House and Senate Committees on
Interior and Insular Affairs promptly upon receipt of an application for a right-of-way for
a pipeline twenty-four inches or more in diameter, and no right-of-way for such a
pipeline shall be granted until sixty days (not counting days on which the

97

REPORTS

House or Representatives of the Senate has adjourned fro more than three days) after a
notice of intention to grant the right-of-way, together with the Secretary’s or agency
head’s detailed findings as to terms and conditions he proposes to impose, had been
submitted to such committees, unless each committee by resolution waives the waiting
period.
“(3) Periodically, but at least once a year, the Secretary of the Department of
Transportation shall cause the examination of all pipelines and associated facilities on
Federal lands and shall cause the prompt reporting of any potential leaks or safety
problems.
“(4) The Secretary of the Department of Transportation shall report annually to the
President, the Congress, the Secretary of the Interior, and the Interstate Commerce
Commission any potential dangers of or actual explosions, or potential or actual spillage
of Federal lands and shall include in such report a statement of corrective action take to
prevent such explosion or spillage.
“Liability
“(x) (1) The Secretary or agency head shall promulgate regulations and may impose
stipulations specifying the extent to which holders of rights-of-way and permits under
this Act shall be liable to the United States for damage or injury incurred by the united
States in connection with the right-of-way or permit. Where the right-of-way or permit
involved lands which are under the exclusive jurisdiction of the Federal Government, the
Secretary or agency head shall promulgate regulations specifying the extent to which
holders shall be liable to their parties for injuries incurred in connection with the right-ofway or permit.
“(2) The Secretary or agency head may, by regulation or stipulation, impose a standard
of strict liability to govern activities taking place on a right-of-way or permit area which
the Secretary or agency head determines, in his discretion, to present a foreseeable hazard
or risk of danger to the United States.
“(3) Regulations and stipulations pursuant to this subsection shall not impose strict
liability for damage or injury resulting from (A) an act or war, or (B) negligence of the
Untied States.
“(4) Any regulation or stipulation imposing liability without fault shall include a
maximum limitation on damages commensurate with the foresable risks or hazards
presented. Any liability for damage or injury in excess of this amount shall be
determined by ordinary rules of negligence.
“(5) The regulations and stipulations shall also specify the extent to which such holders
shall indemnify or hold harmless the Untied States for liability, damage, or claims arising
in connection with the right-of-way or permit.

98

LIABILITY

“(6) Any regulation or stipulation promulgated or impose pursuant to this section shall
provide that all owners of any interest in, and affiliates or subsidiaries of any holder of, a
right-of-way or permit shall be liable to the United States in the event that a claim for
damage or injury cannot be collected from the holder.
“(7) in any case where liability without fault is impose pursuant to this subsection and
the damage involved were caused by the negligence of a third party, the rules of
subrogation shall apply in accordance with the law of the jurisdiction where the damage
occurred.
“Antitrust Laws
“(y) The grant of a right-of-way or permit pursuant to this section shall grant no
immunity from the operation of the Federal antitrust laws.”

NOTE: Subsequent Titles are not included.

99

ANTITRUST LAWS

ACT OF APRIL 21, 1976

ACT OF APRIL 32, 1976
excerpt only
Sec.6. The following provisions of law are amended by deleting “December” and
“June”, wherever they appear, and inserting “March” and September”, respectively, in
lieu thereof—
(2) section 35 of the Act of February 25, 1920, as amended (30 U.S.C. 191); and

FEDERAL COAL LEASING
AMENDMENTS ACT OF 1975 **
August 4, 1976
To amend the Mineral Leasing Act of 1920, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That (a) this Act may be cited as the “Federal Coal
Leasing Amendments Act of 1975”.
(b) Excerpt as otherwise expressly provided, whenever this Act an amendment or
repeal is expressed in terms of an amendment to, or repeal of, a section or other provision
of the Mineral Land Leasing Act, the reference shall be considered to be made to a
section or other the mining of coal, phosphate, oil, oil shale, gas, and sodium on the
public domain” (41 Stat. 437).
Sec.2. The first sentence of section 2(a) of the Miner al Lands Leasing Act (30 U.S.C.
201(a)) is amended to read as follows:
“(1) The Secretary of the Interior is authorized to divide any lands subject to this Act
which have been classified for coal leasing into leasing tracts of such size as he finds
appropriate and in the public interest and which will permit the mining of all coal which
can be economically extracted in such tract and thereafter he shall, in his discretion, upon
NOTE: of
Regarding
all Mineral
Leasing
notedfrom
on this
SEEoffer such
the request
any qualified
applicant
or onAct
his sections
own motion,
timepage:
to time,
footnotes
listed
section
number
to locate
subsequent
amendments
lands
for leasing
andunder
shallthe
award
leases
thereon
by competitive
bidding.
No less than 50
each section.
per to
centum
of the total acreage offered for lease by the Secretary in any one year shall be
leased under a system of deferred bonus payment. Upon default or cancellation of any
coal lease for which bonus payment due, any unpaid remainder of the bid shall be
immediately payable to the Untied States. A reasonable number of leasing tracts shall be
reserved and offered for lease in accordance with this section to public bodies, including,
Federal agencies, rural electric cooperatives, or nonprofit corporations controlled by any
of such entities: Provided, That the coal so offered for lease shall be for use of such entity
or entities in implementing a definite plan to produce energy for the their own use or for
sale to their members or customers (except for short-term sales to others). No bid shall
be accepted which is less than the fair market value, as determined by the Secretary, of
the coal subject to the lease. Prior to his determination of the fair market value of the
coal subject to the lease, the Secretary shall give opportunity for the consideration to
public comments to the fair market value. Nothing in this section shall be construed
require the Secretary to make public his judgment as to the fair market value of the coal
to be leased, or the comments he received thereon prior to the issuance of the lease”.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE
footnotes listed under the section number to locate subsequent amendments
to each section.
100

Sec. 35
MONTH CHANGES
**Title changed to:
FEDERAL COAL LEASING
AMENDMENTS ACT OF 1976
By Act of 10/30/78 at p. 113 this text.

ACT OF AUGUST 4, 1976

Sec .2(a)
COAL LEASING TRACTS

COMPETITIVE BIDDING

PUBLIC BODIES

FAIR MARKET VALUE

Sec.3. The last sentence of section 2(a) of the Mineral Land Leasing Act (30 U.S.C.
201 (a)) is amended to read as follows:
“(2) (A) The Secretary shall not issue a lease or leases under the terms of this Act to
any person, association, or corporation, o any subsidiary, affiliate, or persons controlled
by or under common control with such person, association, or corporation, where any
such entity holds a lease or leases issued by the United States to coal deposits and has
held such lease or leases for a period of ten years when such entity is not, except as
provided for in section 7 (b) of this Act, producing coal from a lease deposits in
commercial quantities. In computing the ten-year period referred to in the proceeding
sentence, periods of time prior to the date or enactment of the Federal Cal Leasing
Amendments Act of 1975 shall not be counted.
“(B) Any lease proposal which permits surface coal mining within the boundaries of a
National Forest which the Secretary proposes to issue under this Act shall be submitted to
the Governor of each State within which the coal deposits subject to such lease are
located. No such lease may be issued under this Act before the expiration of the sixtyday period beginning on the date of such submission. If any Governor to whom a
proposed lease was submitted under this subparagraph objects to the issuance of such
lease, such lease shall not be issued before the expiration of the six-month period
beginning on the date the Secretary is notified by the Governor of such objection. During
such sex-month period, the Governor may submit to the Secretary a statement of reasons
why such lease should not be issued and the Secretary shall, on the basis of such
statement, reconsider the issuance of such lease.
“(3) (A) (i) No lease sale be held unless the lands containing the coal deposits have
been included in a comprehensive land-use plan and such sale is compatible with such
plan. The Secretary of the Interior shall prepare such land-use plans on lands under his
responsibility where such plans have not been previously prepared. The Secretary of the
Interior shall inform the Secretary of Agriculture of substantial development interest in
coal leasing on lands within the National Forest System. Upon receipt of such
notification from the Secretary of the Interior, the Secretary of Agriculture shall prepare a
comprehensive land-use plan for such areas where such plans have not been previously
prepared. The plan of the Secretary of Agriculture shall take into consideration the
proposed coal development in these lands: Provided, That where the Secretary of the
Interior finds that because of non-Federal interest in the surface or because the coal
resources are insufficient to justify the preparation cost of a Federal containing the coal
deposits have been included in either a comprehensive land-use plan prepared by the
State within which the lands are located or a land use analysis prepared by the Secretary
of the Interior.
“(ii) In preparing such lands-use plans, the Secretary of the Interior, in the case of
lands within the National Forest system, the Secretary of Agriculture, or in the case of a
finding by the Secretary of the Interior that because of non-Federal interests in the surface
of insufficient Federal coal, no Federal comprehensive land-use plans can be
appropriately prepared, the responsible State entity shall consult with appropriate State
agencies and local governments and the general proposed plans prior to their adoption, if
request by any person having an interest which is, or may be, adversely affected by the
adoption of such plans.
NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE
footnotes listed under the section number to locate subsequent amendments to each
section.

101

Sec. 2 (a)
LEASING ISSUING RESTRICTION

10 YEAR NON-PRODUCTION

PRIOR DATES NOT COUNTED
NATIONAL FOREST
GOVERNOR OBJECTIONS

LAND-USE PLAN

PUBLIC HEARINGS

FEDERAL AGENCY JURISICTION

“(iii) Leases covering lands the surface of which is under the jurisdiction of any
Federal agency other than the Department of the Interior may be issued only upon
consent of the other Federal agency and upon such conditions as it may prescribe with
respect to the use and protection of the nonmineral interest in those lands.
“(B) Each land-use plan prepared by the Secretary (or in the case of lands within the
National Forest System, the Secretary of Agriculture pursuant to subparagraph (A)(i))
shall include an assessment of the amount o coal deposits in such land, identifying the
amount of such coal which is recoverable by deep mining operations and the amount of
such coal which is recoverable by surface mining operations.
“(C) Prior to issuance of any coal lease, the Secretary shall consider effects which
mining of the proposed lease might have on an impacted community or area, including,
but not limited to, impacts on the environment, on agricultural and other economic
activities, and on public services. Prior to issuance of a lease, the Secretary shall evaluate
and compare the effects of recovering coal by deep mining, by surface mining, and by
nay other method to determine which method or methods or sequence of methods
achieves the maximum economic recovery of the coal within the proposed leasing tract.
This evaluation and comparison by the Secretary shall be in writing but shall not prohibit
the issuance of a lease; however, no mining operating plan shall be approved which is not
found to achieve the maximum economic recovery of the coal within the tract. Public
hearings in the area shall be held by the Secretary prior to the lease sale.
“(D) No lease sale shall be held until after the notice of the proposed offering for lease
has been given once a week for three consecutive weeks in a newspaper of general
circulation in the county in which the lands are situated in accordance with regulations
prescribed by the Secretary.
“(E) Each coal lease shall contain provisions requiring compliance with the Federal
Water pollution Control Act (33 U.S.C. 1151-1175) and the Clean Air Act (42 U.S.C.
1857 and following).”.
Sec.4. Subject to valid existing rights, section 2(b) of the Mineral Lands Leasing Act
(30 U.S.C. 201(b)) is amended to read as follows:
“(b) (1) The Secretary may, under such regulations as he may prescribe, issue to any
person an exploration license. No person may conduct coal exploration for commercial
purpose for any coal on lands subject to this Act without such an exploration license.
Each exploration license shall be for a term of not more than two years and shall be
subject to a reasonable fee. An exploration license shall confer no right to a lease under
this Act. The issuance of exploration licenses shall not preclude the Secretary from
issuing coal leases at such times and locations and to such persons as he deems
appropriate. No exploration license will be issued for any land on which a coal lease has
been issued. A separate exploration license will be required for exploration in each State.
An application for an exploration license shall identify general areas and probable
methods of exploration. Each exploration license shall contain such reasonable
conditions as the Secretary may require, including conditions to insure the protection of
the environment, and shall be subject to all applicable Federal, State, and local laws and
regulations. Upon violation of any such conditions or laws the Secretary may revoke the
exploration license.
“(2) A license may not cause substantial disturbance to the natural land surface. He
may not remove any coal for sale but may remove reasonable amount of coal from the

lands subject to this Act included under his license for analysis and study. A
license must comply with all applicable rules and regulations for the Federal
agency having jurisdiction over the surface of the lands subject to this Act.
NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE
footnotes listed under the section number to locate subsequent amendments
to each section.
102

DESCRIPTION OF LAND-USE
PALN

CONSIDERATION OF IMPACTED
AREA

NOTICE OF PROPOSED OFFERING
FOR LEASE
COMPLIANCE REQUIREMENTS

Sec. 2(b)
EXPLORATION LICENSE
TERM

NOT FOR LEASED LANDS

LICENSE RESTIRCTIONS

exploration licenses covering lands the surface of which is under the jurisdiction of any
federal agency other than the Department of the Interior may be issued only upon such
conditions as it may prescribe with respect to the use of protection of the nonmineral
interest in those lands.
“(3) The licenses shall furnish to the Secretary copies of all date (including, but not
limited, to geological, geophysical, and core drilling analyses) obtained during such
exploration. The Secretary shall maintain the confidentiality of all date so obtained until
after the area involved have been leased or until such time as he determines the making
the date available to the public would not damage the competitive position of the license,
whichever comes first.
“(4) Any person who willfully conducts coal exploration for commercial purposes on
lands subject to this Act without an exploration license issued hereunder shall be subject
to a fine of not more than $1,000 for each day of violation. All data collected by said
prison on any Federal lands as a result of such violation shall be made immediately
available to the Secretary, who hall make the data available to the public as soon as it is
practicable. No penalty under this subsection shall be assessed unless such person is
given notice and opportunity for a hearing with respect to such violation.”.
Sec.5. (a) Subject to valid existing rights, subsection 2(c) and 2(d) of the Act of August
31, 1964 (78 Stat. 710; 30 U.S.C. 2001-1) are hereby repealed.
(b) Section 2 of the Mineral Lands Leasing Act is amended by the addition of the
following new subsection at the end thereof:
“(d) (1) The Secretary, upon determining that maximum economic recovery of the coal
deposit or deposits is served thereby, may approve the consolidation of coal leases into a
logical mining unit. Such consolidation may only take place after a public hearing, if
request by any person whose interest is or may be adversely affected. A logical mining
unit is an area of land in which the coal resources can be developed in an efficient,
economical, and orderly manner as a unit with due regard to conservation of coal reserves
and other resources. A logical mining unit consist of one or more Federal leaseholds,
and may include interviewing or adjacent lands in which the untied States does not own
the coal resources, but all the land in a logical mining unit must be under the effective
control of a single operator, be able to be developed and operated as a single operation
and be contiguous.
“(2) After the Secretary has approved the establishment of a logical mining unit any
mining plan approved for that unit must require such diligent development, operation,
and production that the reserves of the entire unit will be mined within a period
established by the Secretary which shall not be more than forty years.
“(3) In approving a logical miming unit, the Secretary may provide, among other
things, that (i) diligent development continuous operations, and production on any
Federal lease or non-federal land in the lease in that logical mining unit, and (ii) the
rentals and royalties for all Federal leases in a logical miming unit may be combined, and
advanced royalties paid for any lease within a logical mining unit may be credited against
such combined royalties.
“(4) Leases issued before the sate of enactment of this act may be included with the
consent of all lessees in such logical mining unit, and if, so included, shall be subject to
the provisions of this section.
“(5) Leases issued before the date of enactment of this Act may be included with the
consent of all lessees in such logical mining unit, and, if so included shall be subject to
the provisions of this section.

“(6) By regulation the Secretary may require a lessee under this Act to form a
logical miming unit, and may provide for determination for participating acreage
within a unit.

103

CONFIDENTIAL DATE
SUBMISSION

VIOLATIONS

Sec. 2(c) REPEALED
Sec. 2(d) REPEALED

CONSOLIDATION INTO LOGICAL
MINING UNITES (LMU)
DESCRIPTION OF LMU

40 YEARS MINING PERIOD
ROYALTY

AMENDING LEASE
PRIOR LEASES

REQUIRING LMU
ACREAGE

“(7) No logical mining unit shall be approved by the Secretary if the total acreage
(both Federal and non-Federal) of the unit would exceed twenty-five thousand acres.
“(8) Nothing in this section shall be construed to waive the acreage limitations for coal
leases contained in section 27(a) of the Mineral Lands Leasing Act (30 U.S.C. 184 (a)).”.
Sec.6. Section 7 of the Mineral Lands Leasing Act (30 U.S.C. 207) is amended to read
as follows:
“Sec.7. (a) A coal lease shall be fore a term of twenty years and for so long thereafter
as coal is produced annually in commercial quantities from that lease. Any lease which is
not producing in commercial quantities at the end of ten years shall be terminated. The
Secretary shall be regulation prescribe annual rental on lease. A lease shall require
payment of a royalty in such amounts as the Secretary shall determine of not less than 12
½ per centum of the value of coal as defined by regulations, except the Secretary may
determine a lesser amount in the case of coal recovered by underground mining
operations. The lease shall include such other terms and conditions as the Secretary shall
determine. Such rentals and royalties and other terms and conditions of the lease will be
subject to readjustment at the end of its primary term of twenty years and at the end of
each ten-year period thereafter if the lease is extended.
“(b) Each lease shall be subject to the conditions of diligent development and
continued operation of the mine or mines, except where operations under the lease are
interrupted by strikes, the elements, or casualties not attributable to the lessee. The
Secretary of the Interior, upon determining that the public interest will be served thereby,
may suspend the condition of continued operation upon the payment of advance royalties.
Such advance royalties shall be no less than production royalty which would otherwise be
paid and shall be computed on a fixed reserve to production ration (determined by the
Secretary). The aggregate number of years during the period of any lease for which
advance royalties may be accepted in lieu of the condition of continued operation shall
not exceed ten. The amount of any production royalty paid for any year shall be reduced
(but not below 0) by the amount of any advance royalties paid under such lease to the
extent that such advance royalties have not been used to reduce production royalties for a
prior year. No advance royalty paid during the initial twenty-year term of a lease shall be
used to reduce a production royalty after the twentieth year of a lease. The Secretary
may, upon six months’ notification to the lessee cease to accept advance royalties in lieu
of the requirement of continued operation. Nothing in this subsection shall be construed
in affect the requirement contained in the second sentence of subsection (a) relating to
commencement of production at the end of ten years.
“(c) Prior to taking any action on a leasehold which might cause a significant
disturbance of the environment, and not later than three years after a lease is issued, the
lessee shall submit for the Secretary’s approval an operation and reclamation plan. The
Secretary shall approve or disapprove the plan or require that it be modified. Where the
land involved is under the surface jurisdiction of another Federal agency, that other
agencies must consent to the terms of such approval.”.
Sec.7. The Mineral Lands Leasing Act is amended by inserting after section 8 the
following new section 8A:

“Sec.8A. (a) The Secretary is authorized and direct to conduct a comprehensive
exploratory program designed to obtain sufficient sate and information to evaluate
the extent, location, and potential for developing the known recoverable coal
resources within the coal lands
NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE
footnotes listed under the section number to locate subsequent amendments
to each section.
104

Sec. 27(a) not waived
Sec. 7
LEASE TERM
RENTALS
ROYALTY

DILIGENT DEVLOPMENT
CONTINUED OPERATION

ROYALTY REDUCTIONS

SIGNIFICANT
ENVIORNMENTAL
Sec. 8A
DISTURBANCE

COMPREHENSIVE EXPLORATION
PROGRAM

subject to this Act. This program shall be signed to obtain the resource information
necessary for determining whether commercial quantities of coal are present and the
geographical extend to the coal fields and for estimating the amount of such coal which is
recoverable by deep mining operations in order to provide a basis for—
“(1) developing a comprehensive land use plan pursuant to section 2:
“(2) improving the information regarding the value of public resources and
revenues which should be expected from leasing;
“(3) increasing competition among producers of coal, or products derived from the
conversion of coal ,by providing data and information to all potential bidders equally and
equitably;
“(4) providing the public with information on the nature of the coal deposits and the
associated stratum and the value of the public resources being offered for sale; and
“(5) providing the basis for the assessment of the amount of coal deposits in those
lands subject to this Act under subparagraph (B) of section 2 (a) (3).
“(b) The Secretary, though the United States Geological Survey, is authorized to
conduct seismic, geophysical, geochemical, or stratigraphic drilling, or to contract for or
purchase the results of such exploratory activities from commercial or other sources
which may be needed to implement the provisions of this section.
“(c) Nothing in this section shall limit any person from conducting exploratory
geophysical surveys including seismic, geophysical, chemical surveys to the extent
permitted by section 2 (b). The information obtained from the exploratory frilling carried
out by a person not under contract with the Untied States Government for such drilling
prior to award of a lease shall be provided the confidentiality pursuant to subsection (d).
“(d) The Secretary shall make available to the public by appropriate means all date,
information, maps, interpretations, and surveys which are obtained directly by the
Department of the Interior or under a service contract pursuant to subsection (b). The
Secretary shall maintained a confidentiality of all proprietary date or information
purchased from commercial sources while not under contract with the United States
Government until after the areas involved have been leased.
“(e) All Federal departments or agencies are authorized and directed to provide the
Secretary with any information or data that may be deemed necessary to assist the
Secretary in implementing the exploratory program pursuant to this section. Proprietary
information or data provided to the Secretary under the provisions of this subsection shall
remain confidential for such period of time as agreed to by the head of the department or
agency from whom the information is requested. In addition, the Secretary is authorized
and directed to utilize the existing capabilities and resources of other Federal departments
and agencies by appropriate agreement.
“(f) The Secretary is directed to prepare, publish, and keep current a series of detailed
geological, and geophysical maps of, and reports concerning, all coal lands to be offered
for leasing under this Act based on data and information compiled pursuant to this
section. Such maps and reports shall be prepared and revised at reasonable intervals
beginning eighteen months after the date or enactment of this Act. Such maps and
reports shall be made available on a continuing basis to any person on request.

105

EXPLORATORY AVITVITIES

GEOPHYSICAL SURVEY

PUBLIC RECORDS

CONFIDENTIALITY

“(g) Within six months after the date of enactment of this Act, the Secretary shall
develop and transmit to Congress an implantation plan for the coal lands exploration
program authorized by this section, including producers for making the data and
information available to the public pursuant to subsection (d), and maps and reports
pursuant to subsection (f). The implementation plan shall include a projected schedule of
exploratory activities and identification of the regions and area which will be explored
under the coal lands exploration program during the first five years following the
enactment of this section. In addition, the implementation plan shall include estimates of
the appropriations and staffing required to implement the coal lands exploration program.
“(h) The stratigraphic drilling authorized in subsection (b) shall be carried out in such a
manner as to obtain information pertaining to all recoverable reserves. For the purposes
of complying with subsection (a), the Secretary shall require all those authorized to
conduct stratigraphic drilling pursuant to subsection (b) to supply a statement of the
results of test boring of core sampling including logs of the drill holes; the thickness of
the coal seams found; an analysis of the chemical properties of such coal; and an analysis
of the strata layers lying above all the seams of coal. All drilling activities shall be
conducted using the best current technology and practices.”.
Sec.8. The Mineral Lands Leasing Act is further amended by adding after section 8A
the following new section 8B:
“Sec.8B. Within six months after the end of each fiscal year, the Secretary shall submit
to the Congress a report on the leasing and production of coal lands subject to this Act
during such fiscal year; a recommendations to the Congress for improvements in
management, environmental safeguards, and amount of production in leasing and mining
operations on coal lands subject to this Act.
Each submission shall also contain a report by the Attorney General of the Untied States
on competition in the coal and energy industries, including an analysis of whether the
antitrust provisions of this act and the antitrust laws are effective in preserving or
promoting competition in the coal or energy industry.”.
Sec.9. (a) Section 35 of the Mineral Lands Leasing Act, as amended (30 U.S.C. 191) is
further amended by deleting “52 ½ per centum thereof shall be paid into, reserved” and
inserting in lieu thereof: “40 per centum thereof shall be paid into, reserved”, and is
further amended by striking the period at the end of the provision and inserting in lieu
thereof the following language: “: Provided further. That an additional 12 ½ per centum
of all moneys received from sales bonases, royalties, and rentals of public lands under the
provisions of this Act and the Geothermal Steam Act of 1970 shall be paid by the
Secretary of the Treasury as soon as practicable after December 30 and June 30 of each
year to the State within the boundaries of which the leased lands or deposits are or were
located; said additional 12 ½ per centum of all moneys paid to any State on or after
January 1, 1976, shall be used by such State and its subdivisions of the State socially or
economically impacted by development of minerals leased under this Act of (1) planning,
(2) construction and maintenance of public facilities, and (3) provisions of public
services: Provided farther, That such funds now held or to be received, by the State of
Colorado and Utah separately from the Department of the Interior oil shale test leases
known as ‘C-A’; ‘C-B’; ‘U-A’ and ‘U-B’ shall be used by such State and subdivision as
the legislature of each State may direct

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE
footnotes listed under the section number to locate subsequent amendments to
each section.

106

IMPLEMENTATION PLAN

Sec. 8B
REPORT

Sec. 35
DISPERSAL OF MONEY

giving priority to those subdivisions socially or economically impacted by the
development of mineral leased under this Act for (1) planning, (2) construction and
maintenance for public facilities, and (3) provision of public services.”.
(b) In the first sentence of section 35 of the Mineral Lands Leasing Act, before the
words “shall be paid into the Treasury of the United States” insert “and the Geothermal
Steam Act of 1970, not withstanding the provisious of section 20 thereof,”; before the
words “from lands within the naval petroleum reserves” insert “and the Geothermal
Steam Act of 1970”; and in, the second sentence, before the words “not otherwise
disposed of” insert “and the Geothermal Steam Act of 1970”.
Sec.10. The Director of the Office of Technology Assessment is authorized and
directed to conduct a complete study of coal leases entered into by the United States
under section 2 of this Act of February 25, 1920 (commonly known as the Mineral Lands
Leasing Act). Such study shall include an analysis of all mining activities, present and
potential value of said coal leases, receipts of the Federal Government from said leases,
and recommendations as to the feasibility of the use of deep mining technology in said
leased area. The Director shall submit the results of his study to the Congress within one
year after the date of enactment of this Act.
Sec.11. (a) Section 27 (a) (1) of the Mineral Lands Leasing Act (30 U.S.C. 184 (a) (1)),
is amended to read as follows:
“(1) No person, association, or corporation, or any subsidiary, affiliate, or person
controlled by or under common control with such person, association, or corporation
shall take, hold, own, or control at one time, whether acquired directly from t he
Secretary under this Act or otherwise, coal leases or permits on an aggregate of more than
forty-six thousand and eighty acres in any one State and in no case greater than an
aggregate of one hundred thousand acres in the United States: Provided. That in no case
shall such persons, association, or corporation be permitted to take, hold, own, or control
any further Federal coal leases or permits until such time as their holdings, ownership, or
control of Federal leases or permits has been reduced below an aggregate of one hundred
thousand acres within the United States.”.
(b) Subject to valid existing rights, sections 27 (a) (2) of the Mineral Lands Leasing
Act (30 U.S.C. 184 (a) (2)) is hereby repealed:
Sec. 12 (a) Section 3 of the Mineral Leasing Act for Acquired Lands (30 U.S.C. 352) is
amended by striking out “(h) set apart for military or naval purposes, or (c)” and insert in
lieu thereof “of (b)”.
(b) Such section 3 is further amended by inserting the following after the first sentence
thereof: ‘Coal or lignite under acquired lands set apart for military or naval purposes may
be leased by the Secretary with the concurrence of the Secretary of Defense, to a
governmental entity (including any corporation primarily acting as an agency or
instrumentality of a State) which produces electrical energy for sale to the public if such
governmental entity is located in the State in which such lands are located.”.
Sec.13. (a) Subject valid existing rights, section 4 of the Mineral Lands Leasing Act
(30 U.S.C. 204) is hereby repealed.
(b) Subject to valid existing rights, section 3 of the Mineral Lands Leasing Act (30
U.S.C. 203) is amended to read as follows:

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

107

Sec. 35
ADDING GEOTHERMAL

STUDY

Sec. 27 (a) (1)
ACREAGE

Sec. 27 (a) (2) REPEALED
Sec.3
LEASING MILITIARY OR NAVAL
LANDS

Sec. 4 REPEALED
Sec. 3

Sec. 3

“Sec.3. Any person, association, or corporation holding a lease of coal lands or coal
deposits under the provisions of this Act may with the approval of the Secretary of the
Interior, upon a finding by him that it would be in the interest of the United States, secure
modifications of the original coal lease by including additional coal lands or coal deposits
contiguous to those embraced in such lease, but in no event shall the total area added by
such modifications to an existing coal lease exceed one hundred sixty acres, or add
acreage larger than that in the original lease. The Secretary shall prescribe terms and
conditions which shall be consistent with this Act and applicable to all of the acreage in
such modified leases.”.
Sec.14. Section 39 of the Mineral Lands Leasing Act (30 U.S.C. 209) is amended by
adding the following sentence at the end thereof” “Nothing in this section shall be
construed as granting to the Secretary the authority to waive, suspend, or reduce advance
royalties.”.
Sec.15. Section 27 of the Mineral Lands Leasing Act of 1920 (30 U.S.C. 184) is
amended by adding at the end of thereof the following new subsection:
“(1)(1) AT each stage in the formulation of promulgation of rules and regulations
concerning coal leasing pursuant to this Act, and at each stage in the issuance, renewal,
and readjustment of coal leases under this Act, the Secretary of the Interior shall consult
with and give due consideration to the views and advice of the Attorney General of the
United States.
“(2) No coal lease may be issued, renewed, or readjusted under this Act until at least
thirty days after the Secretary of the Interior notifies the Attorney General of the
proposed issuance, renewal, or readjustment. Such notification shall contain such
information as the Attorney General may require in order to advice the Secretary of the
Interior as to whether such lease would create or maintain a situation inconsistent with
the antitrust laws. If the Attorney General advises the Secretary of the Interior that a
lease would create or maintain such situation, the Secretary of the Interior may not issue
such lease, nor may he renew or readjust such lease for a period not to exceed one year,
as the case may be, unless he thereafter conducts a public hearing on the record in
accordance with eh Administrative Procedures Act and finds therein that such issuance,
renewal, or readjustment is necessary to effectinate the purposes of this Act, that it is
consistent with the public interest, and that there are no reasonable alternatives consistent
with this Act, the antitrust laws, and the public interest.
“(3) Nothing in this Act shall be deemed to convey to any person, association,
corporation, or other business organization immunity from civil or criminal liability, or to
create defenses to actions, under any antitrust law.
“(4) As used in this subsection, the term ‘antirust law’ means—
“(A) the act entitled ‘An Act to protect trade and commerce against unlawful
restrains and monopolies’, approved July 2, 1800 (15 U.S.C. 1 et seq.), as
emended;
“(B) The Act entitled ‘An Act to supplement existing laws against unlawful
restraints and monopolies, and for other purposes’, approved October 15, 1914
(15 U.S.C. 12 et seq.), as amended;

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

108

MODIFYING COAL LEASES

Sec. 39
ROYALTY
Sec. 27

NOTIFYING ATTORNEY GENERAL
REGARDING LEASES

NO IMMUNITY

ANTITRUST LAW

“(C) the Federal Trade Commission Act (15 U.S.C. 41 et seq.), as amended;
“(D) section 73 and 74 of the Act entitled ‘An Act to reduce taxation to provide
revenue for the Government, and for other purposes’, approved August 27, 1894
(15 U.S.C. 8 and 9), as amended; or
“(E) the Act of June 19, 1936, chapter 592 ( 15 U.S.C. 13, 13a, 13b, and 21a).”.
Sec.16. Nothing in this Act, of the Mineral Lands Leasing Act and the Mineral Leasing
Act for Acquired Lands which are amended by this Act, shall be construed as authorizing
coal mining on nay area of the National Park System, the National Wildlife Refuge
System, the National Wilderness Preservation System, the National System of Trails, and
the Wild and Scenic Rivers System, including study rivers designated under scion 5 (a) of
the Wild and Scenic Rivers Act.

ACT OF SEPTEMBER 28, 1976

MINING RESTRICTIONS

ACT OF SEPTEMEBER 28, 1976

Title III

TITLE III- STATES OIL SHALE FUNDS
Sec.301. Section 35 of the Act of February 25, 1920 (41 Stat, 450), as amended by
striking the period at the end of the proviso and inserting in lieu thereof the language as
follows: “:And provided further, That all moneys paid to any State from sales, bonuses,
royalties, and rentals of oil shale in public lands may be used by such State and its
subdivision for planning construction, and maintenance of public facilities, and
provisions of public services, as the legislature of the State may direct giving priority to
those subdivisions of the States socially or economically impacted by the development of
the resource.”.
Approved September 28, 1976.
NOTE: Other titles not included.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

109

Sec. 35
STATE USE OF MONEY
OIL SHALE

FEDERAL LAND POLICY AND MANAGEMENT ACT
October 21, 1976

FEDERAL LAND POLICY AND
MANAGEMENT ACT
ACT OF OCTOBER 21, 1976

Excerpts from Title III

MINERAL REVENUES
Sec.317. (a) Section 35 of this Act of February 25, 1920 (41 Stat, 437, 450; 30 U.SC.
181, 191), as amended is further amended to read as follows: “All money received from
sales, bonuses, royalties, and rentals of the public lands under the provisions of this Act
and Geothermal Steam Act of 1970, not withstanding the provisions of section 20
thereof, shall be paid into the Treasury of the United States; 50 per centum thereof shall
be paid by the Secretary of the Treasury as soon as practicable after March 31 and
September 30 of each year to the State other than Alaska within the boundaries of which
the leased lands or deposits are or were located; said moneys paid to any of such States
on or after January 1, 1976, to be used by such State and its subdivisions, as the
legislature of the State may direct giving priority to those subdivisions of the State
socially or economically impacted by development of minerals leased under this act for
(i) planning, (ii) construction and maintenance of public facilities, and (iii) provision of
public service, and excepting those from Alaska, 40 per centum thereof shall be paid into,
reserved, appropriated, as part of the reclamation fund created by the Act of Congress
known as the Reclamation Act, approved June 17, 1902, and of those from Alaska as
soon as practicable after March 31 and September 30 of each year, 90 per centum thereof
shall be paid to the State of Alaska for disposition by the legislature thereof: Provided,
That all moneys which may accrue to the United States under the provisions of this Act
and the Geothermal Seam Act of 1970 from lands within the naval petroleum reserves
shall be deposited in the Treasury as ‘miscellaneous receipts’, as provided by the Act of
June 4, 1920 (41 Stat. 813), as amended June 30, 1938 (52 stat. 1252). All moneys
received under the provisions of this Act and the Geothermal Steam Act of 19970 not
otherwise disposed of by this section shall be credited to miscellaneous receipts.”.
(b) Funds now held pursuant to said section 35 by the States of Colorado and Utah
separately from the Department of the Interior oil shale test leases known as C-A; C-B;
U-A and U-B shall be used by such States and subdivisions as the legislature of each
State may direct giving priority to those subdivisions socially or economically impacted
by the development of minerals leased under this Act for (1) planning, (2) construction
and maintenance of public facilities, and (3) provisions of public services.
(c) (1) the Secretary is authorized to make loans to States and their political
subdivisions in order to relieve social or economic impacts occasioned by the
development of mineral leased in such States pursuant to the Act of February 25, 1920, as
amended. Such loans shall be confined to the uses specified for the 50 per centum of
mineral revenues to be received by such States and subdivisions pursuant to section 35 of
such Act. All loans shall bear interest at a

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

110

Sec. 35
DISPERSAL OF MONEY

COLORADO AND UTAH OIL
SHALE TEST LEASES

RELIEVING SOCAL OR
ECONOMIC IMPACT

rate not to exceed 3 per centum and shall be for such amounts and durations as the
Secretary shall determine. The Secretary shall limit the amounts of such loans to all
States except Alaska to the anticipated mineral revenues to be received by the recipients
of said lands and to Alaska to 55 per centum of anticipated mineral revenues to be
received by it pursuant to said section 35 for any prospective 10-year period. Such loans
shall be repaid by the loan recipients from mineral revenues to be derived from said
section 35 by such recipients, as the Secretary determines.
(2) The Secretary, after consultation with Governors of the affected Sates, shall
allocate such loans amount the States and their subdivisions in a fair and equitable
manner, giving priority to those States and subdivisions suffering the most severe
impacts.
(3) Loans under this subsection shall be subject to such terms and conditions as the
Secretary determines necessary to assure that the purpose of this subsection will be
achieved. The Secretary shall issue such regulations as may be necessary to carry our the
provisions of this section.

NOTE: Other Titles are not included.

ACT OF OCTOBER 30, 1978

ACT OF OCTOBER 30, 1978
To further amend the Mineral Leasing Act of 1920 (30 U.S.C. 201(a)), to authorize the
Secretary of the Interior to exchange Federal coal leases and to encourage recovery of
certain coal deposits, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That (a) notwithstanding any provisions of law to the
contrary and notwithstanding the provisions of section 2(a) (1) of the Mineral Leasing
Act of 1920, as amended (30 U.S.C. 201 (a) (1)), the Secretary of the Interior is
authorized to issue leases for coal on other Federal lands in the State of Utah to the lease
application manned in preference right lease applications serial numbers U1362, U1363,
U1375, U5233, U5235, U5269, and U5237 upon surrender and relinquishment by the
application of such preference right lease applications and all rights to lease the lands
covered by such applications such surrender and relinquishment to be made in exchange
for the lease or leases to be issued by the Secretary.
(b) Notwithstanding any provisions of law to the contrary and notwithstanding the
provisions of section 2(a) (1) of the Mineral Leasing Act of 1920, as amended (30 U.S.C.
201 (a)(1)), the Secretary of the Interior is authorized to issue leases for coal on other
Federal lands in the State of Wyoming to the owner or owners of Federal coal leases
serial numbers W0313666, W0111833, W073289, W0312311, and W0313668, B025369,
W0256663, W5035, W0322794 covering lands in the State of Wyoming upon the
surrender and relinquishment of such leases or portions thereof.
(c) The leases to be issued by the Secretary pursuant to the authority granted by
subsections (a) and (b) of this Act and the leases or portions thereof or rights to leases to
be exchanged therefore shall be of equal value. If such leases or portions thereof or
rights to leases are not of equal value, the Secretary is authorized to receive, or pay out of
funds available for that purpose, cash in an amount up to
111

COAL

UTAH PREFERENCE RIGHT
LEASE APPLICANTS

WYOMING SPECIFIC
PROVIDIONS

25 per centum of the value of the coal lease or leases to be issued by the Secretary in
order to equalize the value of the lease or leases rights to be exchanged.
(d) Any exchanged leases issued by the Secretary under the authority of this Act shall
contain the same terms and conditions as those leases surrendered, or in the case of
surrendered lease rights, the same terms and conditions as those to which the lease
applicant would be entitled.
(e) This subsection does not require or obligate the Secretary to take any action or to
make any commitment to a lessee or lease application with respect to issuance,
administration, or development of any lease.
Sec.2. Section 2(a) (1) of the Mineral Leasing Act of 1920, as amended (30 U.S.C. 201
(a) (1)), is further amended by striking the period at the end of the first sentence and
inserting in lieu thereof the following: “:Provided, That notwithstanding the competitive
bidding requirement of this section, the Secretary may, subject to the conditions which he
deems appropriate, negotiate the sale at fair market value of coal the removal of which is
necessary and incidental to the exercise of right-of-way permit issued pursuant to title V
of the Federal Land Policy and Management Act of 1976.”.
Sec.3. Section 3 of the Mineral Leasing Act of 1920, as amended (30 U.S.C. 203), is
further amended by adding after the word “contiguous”, and words “or concerning”, and
by deleting the period at the end for the second sentence thereof and adding the following
clause: “except that nothing in this section shall require the Secretary to apply the
production or mining plan requirements of the section 2(d) (2) and 7 (c) of this Act (30
U.S.C. 201 (d) (2) and 207 (c)). The minimum royalty provisions of section 7(a) of this
Act (30 U.S.C. 201(a)) shall not apply to any lands covered by this modified lease prior
to a modification until the term of the original lease or extension thereof which became
effective prior to the effective date of this Act has expired.”.
Sec.4. Section 37 of the Mineral Leasing Act of 190 (30 U.S.C. 193) is further
amended by the addition of the words “except as provided in sections 206 or 209 of the
Federal Land Policy and Management Act of 1976 (90 Stat. 2756, 2757-8), and” after
“only in form and manner provided in this act,” and before the word “except”.
Sec.5. Section 30 of the Mineral Leasing Act of 1920 (30 U.S.C. 187) is further
amended by striking the word “boy” and inserting in lieu thereof “child” and by striking
the phrase “or the employment of any girl or woman, without regard to age,”.
Sec.6. (a) The Secretary of the Interior is authorized and directed within nine months
of the date of enactment of this Act to evaluate and review the scenic, recreational fish
and wildlife, cultural, historic, and other public values of the reservoir if Johnson
Country, Wyoming, known as Lake DeSmet and the adjoining and adjacent coal
proprieties. The Secretary’s review and evaluation shall be for the purpose of
determining whether the Lake DeSmet property shall be acquired for public use and
enjoyment by exchanging for Federal coal lands.
(b) If the Secretary determines that the Lake DeSmet property shall be acquired, he is
authorized, with the agreement of the owners of the property, to acquire the Lake DeSmet
property by exchanging Federal coal lands, interest in Federal coal lands, or Federal coal
leases.
(c) The Exchange authorized by this section shall be for equal value. To the extent, if
any, the value of the lands or interest exchanged are not equal the difference may be
adjusted by the payment of money so long as the payment does not exceed 25 per centum
of the total value of the lands of interest transferred out of Federal ownership. In
determining the value of the Lake DeSmet property, the Secretary is authorized and
directed to included the fair market value of the property, considering the acquisition cost
of the lands, the value of the coal deposits, water rights and water resources
developments and capital and other appropriate improvements. The exchange of
NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.
112

Sec. 2 (a) (1)
FAIR MARKET VALUE

RIGHT-OF-WAY
PERMITS
Sec .3

ROYALTY

Sec. 37
FLPMA REFERENCE
Sec. 30

LAKE DE SMET

such properties shall be carried out expeditiously in accordance with the provisions of
this section and other Federal land exchange authority to the extent such authority is
applicable and consistent with this section.
(d) The Secretary is authorized to transfer any property acquired pursuant to this
section (1) to the appropriate agency in the Department of the Interior for management
and administration, of 92) to the State of Wyoming for recreational purposes and fish and
wildlife management. Any conveyance to the State of Wyoming shall contain a
reservation of all minerals to the United States and shall provided that, if the State ceases
to use the property conveyed for fish propagation and wildlife management, title to such
property shall revert to the Untied States.
Sec.7. Effective October 1, 1970, there are authorized to be appropriated to the
Secretary such sums as are necessary to carry out the purposes of this Act.
Sec.8. The title of the Federal Coal Leasing Amendments of 1975 (Public Law 94-377)
is hereby changed to the Federal Coal Leasing Amendments Act of 0976.
Approved October 30, 1978.

113

CHANG TITLE OF FEDERAL
COAL LEASING AMENDMENTS
ACT OF 1975 TO “1976”

ACT OF NOVEMBER 16, 1981

ACT OF NOVEMBER 16, 1981

To facilitate and encourage the production of oil from tar sand and other
hydrocarbon deposits.
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That (1) section 1 (30 U.S.C. 181 section 21 (a) and (c)
(30 U.S.C. 241 (a) and (c)), and section 34 (30 U.S.C. 182) of the Mineral Lands Leasing
Act of 1920, as amended, are amended by deleting “native asphalt, solid and semisolid
bitumen, and bituminous rock (including oil-impregnated rock or sands from which oil or
recoverable only by special treatment after the deposit is mined or quarried)” and by
inserting in lieu thereof “gilsonite (including all vein-type soil hydrocarbons”,”, except
that in the first sentence of section 21(a) the word “and: should be inserted before
“gilsonite” and the comma after the parentheses should be eliminated in section 21.
(2) Section 27 (k) of such Act (30 U.S.C. 184(k)) is amended by deleting “native
asphalt, solid and semisolid bitumen, bituminous rock,” and by inserting in lieu thereof
“gilsonite (including all vein-type solid hydrocarbons),”.
(3) Section 39 of such Act (30 U.S.C. 209) is amended by inserting “gilsonite
(including all vein-type solid hydrocarbons),” after “oil shale”.
(4) Section 1 of such Act (30 U.S.C. 181) is further amended by adding after the first
paragraph the following new paragraphs:
“The term ‘oil’ shall embrace all nongaseous hydrocarbon substance other than those
substances leasable as coal, oil shale, or gilsonite (including all vein-types solid
hydrocarbons).
“The term ‘combined hydrocarbon lease’ shall refer to a lease issued in a special tar
sand area pursuant to section 17 after the date of enactment of the Combined
Hydrocarbon Leasing Act of 1981.
“The term ‘special tar sand area’ means (1) an area designated by the Secretary of the
Interior’s orders of November 20, 1980 (45 FR 76800-76801) and January 21, 1981 (46
FR 6077-6078) as containing substantial deposits of tar sand.”.
(5) Section 27(d)(1) of such Act (30 U.S.C. 184(d)(1)) is amended by inserting before
the period at the end for the first sentence the following: “Provided, however, That
acreage held in special tar and sand areas shall not be chargeable against such State
limitations.”.
(6)(a) Section 17(b) of such Act (30 U.S.C. 184 (d)(1)) is amended by inserting “(1)”
after “(b)” and adding a new subsection to read as follows:
“(2) If the lands to be leased are within a special tar and sand area, they shall be leased
to the highest responsible qualified bidder by competitive bidding under general
regulation in units of not more than five thousand one hundred and twenty acres, which
shall be as nearly compact as possible, upon the payment by the lessee of such bonus as
may be accepted by the Secretary. Royalty shall be 12 ½ per centum in amount of value
of production removed or sold from the lease,

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

114

Sec. 21(a) and (c)
GILSONITE

Sec. 27(k)

Sec. 39

Sec. 1
DEFINITIONS

Sec. 27 (d) (1)
STATE ACREAGE LIMITATIONS
Sec. 17(b)

COMPETITIVE BIDDING
ACREAGE
ROYALTY

subject to section 17 (k)(1)(c). The Secretary may lease such additional lands in special
tar sand areas as may be required in support of any operations necessary for the recovery
of tar sands.”.
(b) Section 17 (c) of such Act (30 U.S.C. 226(c)) is amended by deleting “within any
known geological structure of a producing oil or gas field” and inserting in lieu thereof
“subject to leasing under subsection (b),”.
(c) Section 17(e) of such Act (30 U.S.C. 226(e)) is amended by inserting a period the
period at the end of the first sentence the follows: “: Provided, however, That competitive
leases issued in special tar sand areas shall be for a primary term of ten years.”.
(7) Section 39 of such Act (30 U.S.C. 209) is amended by adding after the period
following the first sentence: “Provided, however, That in order to promote development
and the maximum production of tar sand, at the request of the lessee, the Secretary shall
review, prior to commencement of commercial operations, the royalty rates established in
each combined hydrocarbon lease issued in special tar sand areas. For purposes of this
section, the term ‘tar sand’ means any consolidated or unconsolidated rock (other than
coal, oil shale, or gilsonite) that either: (1) contains a hydrocarbonaceous material with a
gas-free viscosity, at original reservoir temperature, greater than 10,000 centipoise, or (2)
contains a hydrocarbonaceous material and is produced by mining or quarrying.”.
(8) Section 17 of such Act (30 U.S.C. 226) is amended by adding at the end thereof the
following new subsection:
“(k)(1)(A) There owner of (1) an oil and gas lease issued prior to the date of enactment
of the Combined Hydrocarbon Leasing Act of 1981 or (2) a valid claim to any
hydrocarbon resources leasable under this section based on a mineral location made prior
to January 21, 1926, and located within a special tar sand area shall be entitled to convey
such lease of claim to a combined hydrocarbons lease for a primary term of ten years
upon the filing of an application within two years from the date of enactment of that Act
containing an acceptable plan of operations which assures reasonable protection of the
environment and diligent development of those resources requiring enhanced recovery
methods of development or mining. For purposes to conversion, no claim shall be
deemed invalid solely because it was located as a placer location rather than a lode
location or vice versa, notwithstanding any previous adjudication on that issue.
“(B) The Secretary shall issue final regulations to implement this section within six
months of the effective date of this Act. If any oil and gas lease eligible for conversion
under this section would otherwise expire after the date of this Act and before six months
following the issuance of implementing regulations, the lessee may preserve his
conversion right under such lease for a period ending six months after the issuance of
implementing regulations by filing with the Secretary, before the expiration of the lease,
notice of intent to file an application for conversion. Upon submission of a complete plan
of operations in substantial compliance with the regulations promulgated by the Secretary
for the filing of such plans, the Secretary shall suspend the running of the term of any oil
and gas lease proposed for conversion until the plan is finally approved of disapproved.
The Secretary shall act upon a proposed plan of operations within fifteen months of its
submittal.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

115

Sec. 17 (a)
KGS DELETED
Sec. 17 (e)
LEASE TERM
Sec. 39

ROYALTY

Sec. 17
CONVERSION OF LEASES

LEASE SUSPENSION

“(C) when an existing oil and gas lease is converted to a combined hydrocarbon lease,
the royalty shall be that provided for in the original oil and gas lease and for a converted
mining claim, 12 ½ per centum in amount of value of production removed or sold from
the lease.
“(2) Except as provided in this section, nothing in the Combined Hydrocarbon leasing
Act of 1981 shall be construed to diminish or increase the rights of any lessee under any
oil and gas lease issued prior to the enactment of such Act.”.
(9)(a) Section 2 of the Mineral Leasing Act of Acquired Lands (30 U.S.C. 851) is
amended by adding at the end thereof: “The term ‘oil’ shall embrace all nongaseous
hydrocarbon substance other than those leasable as coal, oil shale, or gilsonite (including
all vein-types solid hydrocarbons).”.
(b) Section 3 of such Act (30 U.S.C. 352) is amended by inserting “gilsonite (including
all vein-type solid hydrocarbons),” after “oil shale”.
(10) Nothing in this Act shall affect the taxable status of production from tar sand
under the Crude Oil Windfall Profit Tax Act of 1980 (Public Law 96-223), reduce the
depletion allowance for production from tar sand, or otherwise affect the existing tax
status applicable to such production.
(11) No provision of this Act shall apply to national parks, national monuments, or
other lands where mineral leasing is prohibited by law. The Secretary of the Interior shall
apply the provision of this Act to the Glen Canyon National Recreation Area, and to any
other units of the national park system where mineral leasing is permitted, in accordance
with any applicable minerals management plan if the Secretary finds that there will be no
resulting significant adverse impacts on t he administration of such area, or on other
contiguous units of the national park system.
Approved November 16, 1981.

NOTE: Regarding all Mineral Leasing Act section noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

116

ROYALTY

LESSEE RIGHTS

Sec. 2
DEFINE “OIL”
Sec. 3
GILSONITE

ACT OF DECEMBER 30, 1982

ACT OF DECEMBER 30, 1982
Excerpts from Title III

Sec.318 Section 21 of the Act entitled “An Act to promote the mining of coal,
phosphate, oil, oil shale, gas, and sodium on the public domain”, approved February 25,
1920 (41 Stat. 487, as amended; 80 U.S.C. 241), is further amended by adding the
following new subsections:
“(c)(1) The Secretary may within the Sate of Colorado lease to the holder of the
Federal oil shale lease known as the Federal Prototype Tract C-a additional lands
necessary for the disposal of oil shale wastes and the materials removed from mined
lands, and for the building of plants, reduction works, and other facilities connected with
oil shale operations (which lease shall be referred to hereinafter as an ‘offsite lease’).
The Secretary may only issue one offsite lease not to exceed six thousand four hundred
acres. An offsite lease may not serve more than one Federal oil shale lease and may not
be transferred except in conjunction with the transfer of the Federal oil shale lease that it
serves.
“(2) The Secretary may issue one offsite lease of not more than three hundred and
twenty acres to any person, association or corporation which has the right to develop oil
shale on non-Federal lands. An offsite lease serving non-Federal oil shale lands may not
serve more than one oil shale operation and may not be transferred except in conjunction
with the transfer of non-Federal oil shale land that it serves. Not more than two offsite
leases may be issued under this paragraph.
“(3) An offsite lease shall include no rights to any mineral deposits.
“(4) The Secretary may issue offsite leases after consideration of the need for such
lands, impacts on the environment and other resource values, and upon a determination
that the public interest will be served thereby.
“(5) An offsite lease for lands the surface of which is under the jurisdiction of a
Federal agency other than the Department of the Interior shall be issued only with the
consent of that other Federal agency and shall be subject to such terms and conditions as
it may prescribe.
“(6) An offsite leas shall be for such periods of time and shall include such lands,
subject to the acreage limitations contained in this subsection, as the Secretary determines
to be necessary to achieve the purposes of which the lease is issued, and shall contain
such provisions as he determines are needed for protection of environmental and other
resources values.
“(7) an offsite lease shall provide for the payment of an annual rental which shall
reflect the fair market value of the rights granted and which shall be subject to such
revisions as the Secretary, in his discretion, determines may be needed from time to time
to continue to reflect the fair market value.
“(8) An offsite lease may, at the option of the lessee, include provisions for payments
in any year which payments shall be credited against any portion of the annual rental for
a subsequent year to the extent that such payment is payable by the Secretary of the
Treasury under section 35 of this Act to the State within the

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section to locate subsequent amendments to each section.

117

Sec. 21

COLORADO OIL SHALE
FEDERAL PROTOTYPE
TRACT C-a

boundaries of which the leased lands are located. Such funds shall be paid by the
Secretary of the Treasury to the appropriate States in accordance with section 35, and
such funds shall be distributed by the State only to those counties, municipalities, or
jurisdictional subdivision impacted by oil shale development and/or where the lease is
sited.”; and
“(9) An offsite lease shall remain subject to leasing under the other provisions of this
Act where such leasing would not be incompatible with the offsite lease.
“(d) In recognition of the unique character of oil shale development:
“(1) In determining whether to offer or issue an offsite lease under subsection (c), the
Secretary shall consult with the Governor and appropriate State, local, and tribal officials
of the State where the lands to be leased are located, and of any additional State likely to
be affected significantly by the social, economic, or environmental effects of
development under such lease, in order to coordinate Federal and State planning
processes, minimize duplication of permits, avoid delays, and anticipate and mitigate
likely impacts of development.
“(2) The Secretary may issue an offsite lease under subsection (d) after consideration
of (A) the need for leasing, (B) impacts on the environment and other resources values,
(C) socioeconomic factors, and (D) information from consultations with the Governors of
the affected States.
“(3) Before determining whether to offer an offsite lease under subsection (c), the
Secretary shall seek the recommendation of the Governor of the State in which the lands
to be leased are located as to whether or not to lease such lands, what alternative actions
are available, and what special conditions could be added to the proposed lease to
mitigate impacts. The Secretary shall accept the recommendations of the Governor if he
determines that they provide for a reasonable balance between the national interest and
the State’s interest. The Secretary shall communicate to the Governor, in writing, and
publish in the Federal Register the reasons for his determination to accept or reject such
Governor’s recommendations.”.
Approved December 30, 1982.
NOTE: Other titles not included

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

118

FEDERAL OIL AND GAS ROYALTY
MANAGEMENT ACT OF 1982
January 12, 1983

FEDERAL OIL AND GAS
ROYALTY MANAGEMENT
ACT OF 1982
ACT OF JANUARY 12, 1983

Titles I and IV

To ensure that all oil and gas originated on the public lands and on the Outer Continental
Shelf are properly accounted for under the direction of the Secretary of the Interior, and
for other purposes.

OUTER CONTINENTIAL SHELF
AND OIL AND GAS ON PUBLIC
LANDS

Be it enacted by the Senate and House or Representatives of the United States of
America in Congress assembled,
Short Title
Section 1. This Act may be cited as the “Federal Oil and Gas Royalty Management Act
of 1982”
TITLE I- FEDERAL ROYALTY MANAGEMENT AND ENFORCEMENT
DUTIES OF THE SECRETARY

Sec.101. (a) The Secretary shall establish a comprehensive inspection, collection and
fiscal and production accounting and auditing system to provide the capability to
accurately determine oil and gas royalties, interest, fines, penalties, fees, deposits, and
other payments owned, and to collect and account for such amounts in a timely manner.
(b) The Secretary shall(1) establish procedures to ensure that authorized and properly identified
representatives of the Secretary will inspect at least once annually each lease site
producing or expected to produce significant quantities of oil or gas in any year
or which has history of noncompliance with applicable provision of law or
regulations; and
(2) establish and maintain adequate programs for the training of all such
authorized representatives in methods and techniques of inspection and
accounting that will be used in the implementation of this Act.
(cX1) The Secretary shall audit and reconcile, to the extent practicable, all current and
past lease accounts for leases of oil or gas and take appropriate actions to make additional
collections or refunds as warranted. The Secretary shall conduct audits and reconciliation
of lease accounts in conformity with the business practices and recordkeeping system
which were required of the lessee by the Secretary for the period covered by the audit.
The Secretary shall give priority to auditing those lease accounts identified by a State or
Indian tribe as having significant potential for underpayment. The Secretary may also
audit accounts and records of selected lessees and operators.

119

FEDERAL ROYALTY
MANAGEMENT AND
ENFORCEMENT
DUTIES OF THE SECRETARY

(2) The Secretary may enter into contracts or other appropriate arrangements with
independent certified public accountants to undertake audits of accounts and records of
any lessee or operator relating to the lease of oil or gas. Selection of such independent
certified public accountants shall be by competitive bidding in accordance with the
Federal Property and Administrative Services Act of 1974 (41 U.S.C. 252), except that
the Secretary may not enter into a contract or other arrangement with any independent
certified public accountant to audit any lessee or operator where such lessee or operator is
a primary audit client of such certified public accountant.
(3) All books, accounts, financial records, reports, files, and other papers of the
Secretary, or used by the Secretary, which are reasonably necessary to facilitate the audits
required under this section shall be made available to any period or governmental entity
conducting audits under this Act.
DUTIES OF LESSEES, OPERATORS, AND MOTOR VECHILE TRANSPORTERS
Sec.102. (a) A lessee—
(1)who is required to make any royalty or other payment under a lease or under
the mineral leasing laws, shall make such payments in the time and manner as
may be specified by the Secretary; and
(2) Shall notify the Secretary, in the time and manner as may be specified by the
Secretary, or any assignment the lessee may have made of the obligation to make
any royalty or other payment under a lease or under the mineral leasing laws.
(b ) An operator shall—
(1) develop and comply with a site security plan deigned to protect the oil or gas
produced or store on an onshore lease site from theft, which plan shall conform
with such minimum standards as the Secretary may prescribe by rule, taking into
account the variety of circumstances at lease sites;
(2) develop and comply with such minimum site security measures as the
Secretary deems appropriate to protect oil or gas produced or stored on a lease
site or on the Outer Continental Shelf from theft; and
(3) not later than the 5th business say after any well begins production anywhere
on a lease site or allocated to a lease site or resumes production in the case of a
well which has been off of production for more than 90 days, notify the
Secretary, in the manner prescribed by the Secretary, f the date on which such
production has begun or resumed.
(c)(1) Any person engaged in transporting by motor vehicle any oil from any lease site,
or allocated to any such lease site, shall carry, on his person, in his vehicle, or in his
immediate control, documentation showing, at a minimum, the amount, origin, and
intended first destination of the oil.
(2) Any person engaged in transporting any oil or gas by pipeline form any lease sire,
or allocated to any lease site, on Federal or Indian lands shall maintain documentation
showing, at a minimum, amount, origin, and intended first destination of such oil or gas.

120

DUTIES OF …
LESSEE

OPERATOR

TRANSPORTER

PIPELINE TRANSPORTER

REQUIRED RECORDKEEPING

REQUIRED RECORDKEEPING
Sec.103. (a) A lessee, operator, or other person directly involved in developing,
producing, transporting, purchasing, or selling oil or gas subject to this Act through the
point of first sale or the point or royalty computation, whichever is later, shall establish
and maintain nay records, make any reports, and provide any information that the
Secretary may, by rule, reasonably require for the purposes of implanting this Act or
determining compliance with rules or orders under this Act. Upon the request of any
officer or employee duly designated by the Secretary or any State or Indian tribe
conducting an audit or investigation pursuant to this Act, the appropriate records, reports,
of information which may be required by this section shall be made available for
inspection and duplication by such officer or employee, State or Indian tribe.
(b) Records required by the Secretary with respect to oil and gas leases from Federal or
Indian lands or the Outer Continental Shelf shall be maintained for 6 years after the
records are generated unless the Secretary notifies the record holder that he has initiated
an audit or investigation involving such records and that such records must be maintained
for a longer period. In nay case when an audit or investigation is under way, records
shall be maintained until the Secretary releases the record holder of the obligation to
maintain such records.
PROMPT DISBURSEMENT OF ROYALTIES
Sec104. (a) Section 35 of the Mineral Lands Leasing Act of 1920 (approved February
25, 1920; 41 Stat. 437; 30 U.S.C. 191) is amended by deleting “as soon as practicable
after March 31 and September 30 or each year” and by adding at the end thereof
“Payments to States under this section with respect to any moneys received by the United
States, shall be made out not later than the last business day of the month in which such
moneys are warranted by the United States Treasury to the Secretary as having a been
received, except for any portion of such moneys which is under challenge and placed in a
suspense account pending resolution if dispute. Such warrants shall be issued by the
United States Treasury not later than 10 day after receipts of such moneys by the
Treasury. Moneys places in a suspense account which are determined to be payable to a
State which is disputed is resolved. Any such amount places in suspense account
pending resolution shall bear interest until the dispute is resolved.”.
(b) Deposits of any royalty fund derived from the production of oil or gas from, or
allocated to, Indian lands shall be made by the Secretary to the appropriate Indian
account at the earliest practicable date after such funds are received by the Secretary but
in no case later than the last business day of the month in which such funds are received.
(c) The provisions of this section shall apply with respect to payments received by the
Secretary after October 1, 1983, unless the Secretary, by rule, prescribed an earlier
effective date.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

121

PROMPT DISBURSEMENT OF
ROYALTIES
Sec. 35
PAYMENT TO STATES

EXPLANATION OF PAYMENTS

EXPLANATION OF PAYMENTS
Sec.105. (a) When any payment (including amounts due from receipts of any royalty,
bonus, interest charge, fine, or rental) is made by the United States to a State with respect
to any oil or gas lease on Federal lands or is deposited in the appropriate Indian account
on behalf of an Indian tribe or Indian allottee with respect of any oil and gas lease on
Indian lands, there shall be proved, together with such payment a description of the type
of payment being made, the period covered by such payment, the sources of such
payment, production amounts, the royalty rate, unit value and such other information as
may be agreed upon by the Secretary and the recipient State, Indian tribe, or Indian
allottee.
(b) This section shall take effect with respect to payment made after October 1, 1983,
unless the Secretary, by rule, prescribes an earlier effective date.
LIABILITIES AND BONDING

LIABILITIES AND BONDING

Sec.106. A person (including any agency or employee of the United States and any
independent contractor) authorized to collect, receive, account for, or otherwise handle
any moneys payable to, or received by, the Department of the Interior which are derived
from the sale, lease, or other disposal of any oil or gas shall be—
(1) liable to the United States for any losses caused by any intentional or reckless
action or inaction of such individual with respect to such moneys; and
(2) in the case of an independent contractor, required as the Secretary deems
necessary to maintain a bond commensurate with the amount of money for
which such individual could be liable to the United States.
HEARING AND INVESTIGATIONS
Sec.107. (a) In carrying out his duties under this Act the Secretary may conduct any
investigation or other inquiry necessary and appropriate and may conduct, after notice,
any hearing or audit, necessary and appropriate to carrying out his duties under this Act.
In connection with any such hearings, inquiry, investigation, or audit, the Secretary is
also authorized where reasonably necessary—
(1) to require by special or general order, any person to submit in writing such
affidavits and answers to questions as the Secretary may reasonable
prescribe, which submission shall be made within such reasonable period and
under oath or otherwise, as may be necessary;
(2) to administer oaths;
(3) to require by subpoena the attendance and testimony of witnesses and the
production of all books, papers, production and financial records, documents,
matter, and materials, as the Secretary may request;

122

HEARINGS AND INVESTIGATIONS

(4) to order testimony to be taken by disposition before nay person who is
designated by the Secretary and who has the power to administer others, and
to compel testimony and the production of evidence in the same manner as
authorized under paragraph (3) of this subsection; and
(5) to pay witnesses the same fees and mileage as are paid in like circumstances
in the courts of the Untied States.
(b) In the case of refusal to obey a subpoena served upon any person under this section,
the district court of the United States for any district in which such person is found,
resides, or transacts business, upon application by the Attorney General at the request of
the Secretary and after notice to such person, shall have jurisdiction to issue an order
requiring such person to appear and give testimony before the Secretary or to appear and
produce documents before the Secretary. Any failure to obey such order of the court may
be punished by such court as contempt thereof and subject to a penalty of up to $10,000 a
day.
INSPECTIONS
Sec.108. (a)(1) On any lease site on Federal or Indian lands, any authorized and
properly identified representative of the Secretary may stop and inspect any motor
vehicle that he has probable cause to believe is carrying oil from a lease site on Federal or
Indian lands or allocated to such a lease site, for the purpose of determining whether the
drive or such vehicle has documentation related to such oil as required by law.
(2) Any authorized and properly identified representative of the Secretary,
accompanied by any appropriate law enforcement officer, or an appropriate law
enforcement officer alone, may stop and inspect any vehicle is not on a lease site if he has
probable cause to believe the vehicle is carrying oil from a leas site on Federal or Indian
lands or allocated to such a lease site. Such inspection shall be for the purpose of
determining whether the driver of such vehicle has the documentation required by law.
(b) Authorized and properly identified representatives of the Secretary may without
advance notice, enter upon, travel across and inspect lease site on Federal or Indian lands
and may obtain from the operate immediate access to secured facilities on such lease
sites, for the purpose of making any inspection or investigation for determining whether
there is compliance with the requirements of the mineral leasing laws and this Act. The
Secretary shall develop guidelines setting forth the coverage and the frequency of such
inspections.
(c) for the purpose of making any inspection or investigation under this Act, the
Secretayr shall have the same right to enter upon or travel across any lease site as the
lessee or operator has acquired by purchase, condemnation, or otherwise.

123

INSPECTIONS

CIVIL PENALTIES
Sec.109. (a) Any person who—
(1) after due notice of violation or after such violations has been reported under
subparagraph (A), fails or refuses to comply with any requirements of this
Act, or any mineral leasing law, any rule or regulation thereunder, or the
terms of any lease or permit issued thereunder; or
(2) fails to permit inspection authorized in section 108 or fails to notify the
Secretary of any assignment under section 102(a)92) shall be liable for a
penalty of up to $500 per violation for each day such violation continues,
dating from the date of such notice or report. A penalty under this subsection
may not be applied to any person who is otherwise liable for violation of a
paragraph (1) if:
(A) the violation was discovered and reported to the Secretary or his
authorized representative by the liable person and corrected within 20
days after such report or such longer time as the Secretary may agree to;
or
(B) after the dude notice of violation required in paragraph (1) has
been given to such person by the Secretary or his authorized
representative, such person has corrected the violation within 20 days of
such notification or such longer time as the Secretary may agree to.
(b) If corrective action is not taken within 40 days or a longer period as the Secretary
may agree to, after due notice or the report referred to in subsection (a)(1), such person
shall be liable for a civil penalty of not more than $5,000 per violation for each day such
violation continues, dating from the date of such notice or report.
(c) Any person who--(1) knowingly or willfully fails to make any royalty payment by the date as
specified by statue, regulation, order or terms of the lease;
(2) fails or refuses to permit lawful entry, inspection, or audit; or
(3) knowingly or willfully fails or refuses to comply with subsection 102(b)(3),
shall be liable for a penalty of up to $10,000 per violation for each day such
violation continues.
(d) Any person who—
(1) knowingly or willfully prepares, maintains, or submits false, inaccurate, or
misleading reports, notices, affidavits, records, data, or other written information;
(2) knowingly or willfully takes or removes, transport, uses or diverts any oil or
gas from any lease site without having valid legal authority to do so; or
(3) purchases, accepts, sells, transports or convey to another any oil or gas
knowing or having reason to know that such oil or gas was stolen or unlawfully
removed or diverted, shall be liable for a penalty of up to $25,000 per violation
for each day such violation continues.

124

CIVIL PENALTIES

(e) No penalty under this section shall be assessed until the person charged with a
violation has been given the opportunity for a hearing on the record.
(f) The amount of any penalty under this section, as finally determined may be
deducted from any sums owing by the United States to the person charged.
(g) On a case-by-case basis the Secretary may compromise or reduce civil penalties
under this section.
(h)Notice under this subsection (a) shall be by personal service by an authorized
representative of the Secretary or by registered mail. Any person may, in the manner
prescribed by the Secretary, designate a representative to receive any notice under this
subsection.
(i) In determining the amount of such penalty, or whether it should be remitted or
reduced, and in what amount, the Secretary shall state on the record the reasons for his
determinations.
(j) Any person who has requested a hearing in accordance with subsection (e) within
the time the Secretary has prescribed for such a hearing and who is aggrieved by a final
order of the Secretary under this section may seek review of such order in the United
States district court for the judicial district in which the violation allegedly took place.
Review by the district court shall be only on the administrative record and not de novo.
Such an action shall be barred unless filed within 90 days after the Secretary’s final order.
(k) If any person fails to pay an assessment of a civil penalty under this Act—
(1) after the order making the assessment has become a final order and if such
person does not file a petition for judicial review of the order in accordance with
subsection (j), or
(2) after a court in an action brought under subsection (j) has entered a final
judgment in favor of the Secretary, the court shall have jurisdiction to award the amount
assessed plus interest from the date of the expiration of the 90-day period referred to in
subsection (j). Judgment by the court shall include an order to pay.
(l) No person shall be liable for a civil penalty under subsection (a) or (b) for failure to
pay any rental for any lease automatically terminated pursuant to section 31 of the
Mineral Leasing Act of 1920.
CRIMINAL PENALTIES

CRIMINAL PENALTIES
Sec.110. Any person who commits an act for which a civil penalty is provided in
section 109(d) shall, upon conviction, be punished by a fine of not more than $50,000, or
by imprisonment for not more than 2 years, or both.
ROYALTY INTEREST, PENALTIES AND PAYMENTS
Sec.111. (a) In the case of oil and gas leases where royalty payments are not received
by the Secretary on the date that such payments are due, or are less than the amount due,
the Secretary shall charge interest of such late payments or underpayments at the rate
applicable under section 6621 of the Internal Revenue Code of 1954. In the case of any
underpayment of partial payment, interest shall be computed and charged only on the
amount of the deficiency and not on the total amount due.

125

ROYALTY INTEREST,
PENALTIES AND PYAMENTS

(b) Any payment made by the Secretary to a State under section 35 of the Mineral
Lands Leasing Act of 1920 (30 U.S.C. 191) and any other payment made by the
Secretary to a State from any oil or gas royalty, received by the Secretary which is not
paid on the date required under section 35 shall include an interest charge computed at
the rate applicable under section 6621 of the Internal Revenue Code of 1954.
(c) all interest charges collected under this Act of under other applicable laws because
of nonpayment, late payment or underpayment of royalties due and owing an Indian tribe
or an Indian allottee shall be deposit to the same account as the royalty with respect to
which such interest is paid.
(d) Any deposit of royalty fund made by the Secretary to any Indian account which is
not made by the date required under subsection 104(b) shall include an interest charge
computed at the rate applicable under section 6621 of the Internal Revenue Code of 1954.
(e) Notwithstanding any other provision of law, no State will be assessed for any
interest or penalties found to be due against the Secretary for failure to comply with the
Emergency Petroleum Allocation Act of 1973 or regulation of the Secretary of Energy
thereunder concerning crude oil certification or pricing with respect to crude oil taken by
the Secretary in kind as royalty. Any State share of an overcharge, resulting from such
failure to comply, shall be assessed against moneys found to be due and owing to such
State as a result of audits of royalty accounts for transaction which took place prior to the
date of the enactment of this Act except that if found due and owing to any State, the
State shall be assessed the balance of that State’s share of the overcharged.
(f) Interest shall be charged under this section only for the number of days a payment is
late.
(g) The first sentence of section 35 of the Act of February 25, 1920 is amended by
inserting “including interest charges collected under the Federal Oil and Gas Royalty
Management Act of 1982” between “royalties” and “and”.
INJUNCTION AND SPECIFIC ENFORCEMENT AUTHORITY
Sec.112. (a) In addition to any other remedy under this Act or nay mineral leasing law,
the Attorney General of the United States or his designee may bring a civil action in a
district court of the United States, which shall have jurisdiction over such actions—
(1) to restrain any violation of this Act; or
(2) to compel the taking of any action required by or under this Act or any
mineral leasing law of the United Sates
(b) A civil action described in subsection (a) may be brought only in the Untied States
district court for the judicial district wherein the act, omission, or transaction constituting
a violation under this Act or nay other mineral leasing law occurred, or wherein the
defendant is found or transact business.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

126

Sec. 35
INTEREST ON LATE
ROYALTY PAYMENT

Sec. 35
ADD FOGRMA
INJUNCTION AND SPECIFIC
ENFORCEMENT AUTHORITY

REWARDS

REWARDS

Sec.113. Where amounts representing royalty or other payments owed to the United
States with respect to any oil and gas lease on Federal lands or the Outer Continental
Shelf are recovered pursuant to any action taken by the Secretary under this Act as a
result of information provided to the Secretary by any person, the Secretary is authorized
to pay to such person an amount equal to not more than 10 percent of such recovered
amounts. The preceding sentence shall not apply to information provided by an officer or
employees of the United States, an officer or employee of a State or Indian tribe acting
pursuant to a cooperative agreement or delegation under this Act, or any person acting
pursuant to a contract authorized by this Act.
NONCOMPETITIVE OIL AND GAS LEASE TOYALTY RATES
Sec.114
The Secretary is directed to conduct a through study of the effects of a change in the
royalty rate under section 17(c) of the Mineral Leasing Act of 1920 on: (a) the
exploration, development, or production oil or gas; and (b) the overall revenues generated
by such change. Such study shall be completed and submitted to Congress within six
months after the date of enactment of this Act.

127

NONCOMPETITIVE OIL AND GAS
LEASE ROAYLTY RATES

TITLE IV— REINSTATMENT OF LEASES AND CONVERSION
OF UNPATENTED OIL PLACR CLAIMS
AMENDMENT OF MINERAL LANDS LEASING ACT OF 1920
Sec.401. Section 31 of the Mineral Lands Leasing Act of 1920 (30 U.S.C. 188) is
amended by redesignating subsection (d) as subsection (j) and by inserting after
subsection (c) the following new subsections:
“(d)(1) Where any oil and gas lease issued pursuant to section 17(b) or section 17(c) of
this Act or the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.) has been,
or is hereafter, terminated automatically by operation of law under this section for failure
to pay on or before the anniversary date the full amount of the rental due, and such rental
is not paid or tendered within twenty days thereafter, and it is shown to the satisfaction of
the Secretary of the Interior that such failure was justifiable or not due to lack of
reasonable diligence on the part of the lessee, or, no matter when the rental is paid after
termination, it is shown to the satisfaction of the Secretary that such failure was
inadvertent, the Secretary may reinstate the lease as of the date of termination for the
unexpired portion of the primary term of the original lease or any extension thereof
remaining at the date of termination, and so long thereafter as oil or gas is produce in
paying quantities. In any case where a lease is reinstated under this subsection and the
Secretary finds that the reinstatement of such else (A) occurs after the expiration of the
primary term of any extension thereof, or (B) will not afford the lessee a reasonable
opportunity to continue operations under the lease, the Secretary may, at his discretion,
extend the term of such lease for such period as he deems reasonable, but in no event for
more than two years from the date the Secretary authorizes reinstatement and so long
thereafter as oil or gas is produced in paying quantities.
“(2) No lease shall be reinstated under paragraph (1) of this subsection unless—
“(A) with respect to any lease that terminated under subsection (b) of this
section prior to enactment of the Federal Oil and Gas Royalty Management Act
of 1982:
“(i) the lessee tendered rental prior to enactment of such Act and the
final determination that the lease terminated was made by the Secretary
or court less than three years before enactment of such Act, and
“(ii) a petition for reinstatement together with the required back rental
and royalty accruing from the date of termination, is filed with the
Secretary on or before the one hundred and twentieth day after enactment
of such Act, or
“(B) with respect to any lease that terminated under subsection (b) of this
section on or after enactment of the Federal Oil and Gas Royalty Management
Act of 1982, a petition for reinstatement together with the required back rental
and royalty accruing from the date of termination is filed on or before the earlier
of—

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

128

AMENDMENT OF MINERAL
LANDS LEASING ACT OF 1920
Sec. 31
LEASE TERMINATION

“(i) sixty days after the lessee receives from the Secretary notice of
termination, whether by return of check or by any other form of actual
notice or
“(ii) fifteen months after termination of the lease.
“(e) Any reinstatement under subsection (d) of this section shall be made only if these
conditions are met:
“(1) no valid lease, whether still in existence or not, shall have been issued
affecting any of lands covered by the terminated lease prior to the filing of such
petition: Provided, however, That after receipts of a petition for reinstatement,
the Secretary shall not issue any new lease affecting any of the lanes covered by
such terminated lease for a reasonable period, as determined in accordance with
regulation issued by him;
“(2) payment of back rentals and either the inclusion in a reinstated lease
issued pursuant to the provisions of section 17(b) of this Act of requirement for
future rentals at a rate of not less than $10 per acre per year, or the inclusion in
reinstated lease issued pursuant to the provisions of section 17(c) of this Act of a
requirement that future rentals shall be at a rate not less than $5 per acre per year,
all as determined by the Secretary;
“(3)(A) payment of back royalties and the inclusion in a reinstated lease issued
pursuant to the provisions of section 17(b) of this Act of a requirement for future
royalties at a rate of not less than 16 2/3 percent computed on a sliding scale
based upon the average production per well per day, at a rate which shall not be
less than 4 percentage points greater than the competitive royalty schedule then
in force and used for royalty determination for competitive lease issued pursuant
to such section as determined by the Secretary: Provided, That royalty on such
reinstated lease shall be paid on all production removed or sold from such lease
subsequent to the termination of the original lease:
“(B) payment of back royalties and inclusion in a reinstated lease issued
pursuant to the provision of section 17(c) of this Act of a requirement for future
royalties at a rate not less than 16 2/3 percent: Provided, That royalty on such
reinstated lease shall be paid on all production removed or sold from such lease
subsequent to the cancellation or termination of the original lease; and
“(4) notice of the proposed reinstatement of a terminated lease, including the
terms and condition of reinstatement, shall be published in the Federal Register at
least thirty days in advance of the reinstatement.
A copy of said notice, together with information concerning rental, royalty, volume of
production, if any, and any other matter which the Secretary deemed significant in
making this determination to reinstate, shall be furnished to the committee on Interior and
Insular Affairs of the Hour of Representatives and the Committee of Energy and Natural
Resources of the Senate at least thirty days in advance of reinstatement. The lease or a
reinstated leas shall reimburse the Secretary for the administrative cost of reinstating the
lease, but not to exceed $500. In addition the lessee shall reimburse the Secretary for the
cost of publication in the Federal Register of the notice of proposed reinstatement.

129

LEASE REINSTATMENT

BACK RENTALS

BACK RENTALS

ROYALTY RATE

“(f) Where an unpatented oil placer mining claim validly located prior to February 24,
1920, which has been or is currently producing or is capable of producing oil or gas has
been or is hereafter deemed conclusively abandoned for failure to file timely the required
instruments or copies of instruments require by section 314 of the Federal Land Policy
and Management Act of 1976 (43 U.S.C. 1744), and it is shown to the satisfaction of the
Secretary that such failure was inadvertent, justifiable, or not due to a lack of reasonable
diligence on the part of the owner, the Secretary may issue, for the lands covered by the
abandoned unpatented oil placer mining claim, a noncompetitive oil and gas lease,
consistent with the provisions of section 17 (e) of this Act, to be effective from the
statutory date the claim was deemed conclusively abandoned. Issuance of such a lease
shall be conditioned upon:
“(1) a petition for issuance of noncompetitive oil and gas lease, together with
the required rental and royalty, including back rental and royalty accruing from
the statutory date of abandonment of the oil placer mining claim, being filed with
the Secretary—
“(A) with respect to any claim deemed conclusively abandoned on or
before the date of enactment of the Federal Oil and Gas Royalty
Management Act of 1982, on or before the one hundred and twentieth
day after such date of enactment, or
“(B) with respect to any claim deemed conclusively abandoned after
such date of enactment, on or before the one hundred and twentieth day
after final notification by the Secretary or a court of competent of the oil
placer mining claim;
“(2) a valid lease not having been issued affecting any of the lands covered by
the abandoned oil placer mining claim prior to the filing of such petition:
Provided, however, That after the filing of a petition for issuance of a lease under
this subsection, the Secretary shall not issue any new lease affecting any of the
lands covered by such abandoned oil placer mining claim for a reasonable period,
as determined in accordance with regulations issued by him;
“(3) a requirement in the lease for payment of rental, including back rentals
accruing from the statutory date of abandonment of the oil placer mining claim,
of not less than $5 per acre per year;
“(4) a requirement in the lease for payment of royalty on production removed
or sold from the oil placer mining claim. Including all royalty on production
made subsequent to the statutory date the claim was deemed conclusively
abandoned, of not less than 12 ½ percent; and
“(5) compliance with the notice and reimbursement of costs provisions of
paragraph (4) of subsection (e) but addressed to the petition covering the
conversion of an abandoned unpatented oil placer mining claim to a
noncompetitive oil and gas lease.

130

ABANDONED CLAIM

“(g)(1) Except as otherwise provided in this section, a reinstated lease shall be treated
as a competitive or noncompetitive oil and gas lease in the same manner as the original
lease issued pursuant to section 17(b) or 17(c) of this Act.
“(2) Except as otherwise provided in this section, the issuance of a lease in lieu of an
abandoned patented oil placer mining claim shall be treated as a noncompetitive oil and
gas lease issued pursuant to section 17(c) of this Act.
“(h) The minimum royalty provision of section 17(j) and the provisions of section 89
of this Act shall be applicable to leases issued pursuant to subsection (d) and (f) of this
section.
“(i)(1) In acting on a petition to issue a noncompetitive oil and gas lease, under
subsection (f) of this section or in response to a request riled after issuance of such a
lease, or both, the Secretary is authorized to reduce the royalty on such lease if in his
judgment it is equitable to do so or the circumstances warrant such relief due to
uneconomic or other circumstances which could cause undue hardship or premature
termination of production.
“(2) In acting on a petition for reinstatement pursuant to subsection (d) of this section
or in response to a request filed after reinstatement, or both, the Secretary is authorized to
reduce the royalty on that reinstated lease on the entire leasehold or any tract or portion
thereof segregated for royalty purposes if, in his judgment, there are uneconomic or other
circumstance which could cause undue hardship or premature termination of production;
or because of any written action of the United States, its agent or employees, which
preceded, and was a major consideration in, the lessee’s expenditure of funds to develop
the property under the lease after the rent had become due and had not been paid; or if in
the judgment of the Secretary it is equitable to do so for any reason.”.
Approved January 12, 1983.

131

REINSTATED LEASE

SUBTITLE B—FEDERAL ONSHORE OIL AND GAS
LEASING REFORM ACT OF 1987
Sec.5101. SHORT TITLE; REFERENCE
(a)SHORT TITLE.—This subtitle may be cited as the “Federal Onshore Oil and Gas
Leasing Reform Act of 1987”
(b)REFERENCE—Any reference in this subtitle to the “Act of February 25, 1920,” is
a reference to the Act of February 25, 1920, entitled “An Act to promote the mining of
coal, phosphate, oil, oil shale, gas, and sodium on the public domain” (30 U.S.C. 181
and following).
Sec.5102. OIL AND GAS LEASING SYSTEM.
(a) COMPETITIVE BIDDING—Section 17(b)(1) of the Act of February 25, 1920 (30
U.S.C. 226(b)(1)), is amended to read as follows:
“(b)(1)(A) All lands to be leased which are not subject to leasing under paragraph (2)
of this subsection shall be leased as provided in this paragraph to the highest responsible
qualified bigger by competitive bidding under general regulations in units of not more
than 2,560 acres, except in Alaska, where units shall be not more than 5,760 acres. Such
units shall be as nearly compact as possible. Lease sales shall be conducted by oral
bidding. Leas sales shall be held for each State where eligible lands are available at
least quarterly and more frequently if the Secretary of the Interior determines such sales
are necessary. A lease shall be conditioned upon the payment of a royalty at a rate of not
less than 12.5 percent in amount or value of the production removed or sold from the
lease. The Secretary shall accept the highest bid from a responsible qualified bidder
which is equal to or greater than the national minimum acceptable bid, without
evaluation of the value of the lands proposed for lease. Leases shall be issued within 60
days following payment by the successful bidder of the remainder of the bonus bid, if any,
and the annual rental for the first lease year. All bids for less than the national minimum
acceptable bid shall be rejected. Lands for which no bids are received or for which the
highest bid is less than the national minimum acceptable bid shall be offered promptly
within 30 days for leasing under subsection (c) of this section and shall remain available
for leasing for a period of 2 years after the competitive lease sale.
“(B)The national minimum acceptable bid shall be $2 per acre for a period of 2 years
from the date of enactment of the Federal Onshore Oil and Gas Leasing Reform Act of
1987. Thereafter, the Secretary may establish by regulation a higher national minimum
acceptable bid for all leases based upon a finding that such actions is necessary: (i)to
enhance financial returns to the united States; and (ii)to promote more efficient
management of oil and gas resources on Federal lands. Ninety days before the Secretary
makes any change in the national minimum acceptable bid, the Secretary shall notify the
Committee on Interior and Insular Affairs of the United States House of Representatives
and Committee on
NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

132

FEDERAL ONSHORE OIL AND
GAS LEASING REFORM ACT
OF 1987

ACT OF DECEMBER 22, 1987

Sec. 17 (b) (1)
COMPETIVE BIDDING
ACREAGE

ORAL BIDDING

ROYALTY

LEASE ISSUANCE

NATIONAL MINIMUM
ACCEPTABLE BID

Energy and Natural Resources of the untied States Senate. The proposal or
promulgation of any regulation to establish a national minimum acceptable bid shall not
be considered a major Federal action subject to the requirements of section 102(2)(C) of
the National Environmental Policy Act of 1969.”.
(b) NONCOMPETITIVE LEASING—Section 17(c) of the Act of February 25, 1920 (30
U.S.C. 226(c)), is amended to read as follows:
“(c)(1) If the lands to be leased are not leased under subsection (b)(1) of this section
or are not subject to competitive leasing under subsection (b)(2) of this section, the
person first making application for the lease who is qualified to hold a lease under this
Act shall be entitled to a lease of such lands without competitive bidding, upon payment
of a non0refundable application fee of at least $75. A lease under this subsection shall
be conditioned upon the payment of a royalty at a rate of 12.5 percent in amount or value
of the production removed or sold from the lease. Leases shall be issued within 60 days
of the date on which the Secretary identifies the first responsible qualified applicant.
“(2)(A) Lands (i) which were posted for sale under subsection (b)(1) of this section but
for which no bids were received or for which the highest bid was less than the national
minimum acceptable bid and (ii) for which, at the end of the period referred to in
subsection (b)(1) of this section no lease has been issued and no lease application is
pending under paragraph 91) of this subsection, shall again be available for leasing only
in accordance with subsection (b)(1) of this section.
“(B) The land in any lease which is issued under paragraph (1) of this subsection or
under subsection (b)(1) of this section which lease terminates, expires, is cancelled or is
relinquished shall again be available for leasing only in accordance with subsection
(b)(1) of this section.”.
(c) RENTALS—Section 17(d) of the Act of February 25, 1920 (30 U.S.C. 226(d)), is
amended to read follows:
“(d) All leases issued under this section, as amended by the Federal Onshore Oil and
Gas Leasing Reform Act of 1987, shall be conditioned upon payment by the lessee of a
rental of not less than $1.50 per acre per year for the first through fifth years of the lease
and not less than $2 per acre per year for each year thereafter. A minimum royalty in
lieu of rental of not less than the rental which otherwise would be required for that lease
year shall be payable at the expiration of each lease year beginning on or after a
discovery of oil or gas in paying quantities on the land leased.”.
(d) NOTICE AND RECLAMATION—(1) Section 17 of the Act of February 25, 1920
(30 U.S.C. 226), is amended by redesignating subsections (f) through (k) as subsections
(i) through (n) and by adding the following new subsections (f) through (h):
“(f) At least 45 days before offering lands for lease under this section, and at least 30
days before approving applications for permits to drill under provisions of a lease or
substantially modifying the terms of any lease issued under this section, the Secretary
shall provide notice pf the proposed action. Such notice shall be posted in

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

133

Sec. 17 (c)
NON-COMPETITIVE BIDDING

ROYALTY

NO BIDS RECIEVED

Sec. 17 (c)
RENTAL

ROYALTY

REDESIGNATE Sec. 17 (f)
through (k) as
(i) through (n)

NOTICE OF LEASE
MODIFICATION

the appropriate local office of the leasing and land management agencies. Such notice
shall include the terms of modified lease terms and maps or a narrative description of the
affected lands. Where the inclusion of maps in such notice is not practicable, maps, of
the affected lands shall be made available to the public for review. Such maps shall show
the location of all tracts to be leased, and of all leases already issue din the general area.
The requirements of this subsection are in addition to any public notice required by other
law.
“(g) The Secretary of the Interior, or for National Forest lands, the Secretary of
Agriculture, shall regulate all surface- disturbing activities conducted pursuant to any
lease issued under this Act, and shall determine reclamation and other actions as
required in the interest of conservation of surface resources. No permit to drill on an oil
and gas lease issued under this Act may be granted without the analysis and approval by
the Secretary converted of a plan of operations covering proposed surface-disturbing
activities within the lese area. The Secretary concerned shall, by rule or regulations,
establish such standards as may be necessary to ensure that an adequate bond, surety, or
other financial arrangement will be established prior to the commencement of surfacedisturbing activities on any lease, to ensure the complete and timely reclamation of the
lease tract, and the restoration of any lands or surface waters adversely affected by lease
operations after the abandonment of cessation of oil and gas operations on the lease.
The Secretary shall not issue a lease or leases or approve the assignment of any lease or
leases under the terms of this section to any person, association, or corporation, during
any period in which, as determined by the Secretary of the Interior or Secretary of
Agriculture, such entity has failed or request to comply in any material respect with the
reclamation requirements and other standards established under this section for any
prior lease to which such requirements and standards applied. Prior to making such
determination with respect to any such entity the concerned Secretary shall provide
which entity with adequate notification and an opportunity to comply with such
reclamation requirements and other standards and shall consider whether any
administrative or judicial appeal is pending. Once the entity has complied with the
reclamation requirement or other standard concerned an oil or gas lease may be issued
to such entity under this Act.
“(h) The Secretary of the Interior may not issue any lease on National Forest System
Lands reserved from the public domain over the objection of the Secretary of
Agriculture.”.
(2) Section 31(h) of the Act of February 25, 21920 (30 U.S.C. 188(h)), is amended by
striking out “section 17(j)” and substituting “section 17(m)”.
Sec.5103. assignments.
Sections 30(a) and 30(b) of the Act of February 25, 1920 (30 U.S.C. 187a, 187b), are
redesignated as sections 30A and 30B, respectively, and the third sentence of section
30A, as so redesignated, is amended to read as follows: “The Secretary shall disapprove
the assignment

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes
listed under the section number to locate subsequent amendments to each section.

134

Sec. 17(g) added
SURFACE DISTUBANCE

Sec. 31(h) changed

Sec. 30(a) and (b)
DISPPROVAL OF ASSIGNEMNT
OR SUBLEASE

or sublease only for lack of qualification of the assignee or sublessee or far lack of
sufficient bond: Provided, however, That the Secretary may, in his discretion, disapprove
an assignment of nay of the following, unless the assignments constitutes the entire lease
or is demonstrated to further the development of oil and gas:
“(1) A separate zone or deposit under any lease.
“(2) A part of a legal subdivision.
“(3) Less than 640 acres outside Alaska or of less than 2,560 acres within
Alaska.
Request for approval of assignment or sublease shall be processed promptly by the
Secretary. Except where the assignment or sublease is not in accordance with applicable
law, the approval shall be given within 60 days of the date of receipt by the Secretary of a
requires for such approval.”.
Sec.5104. LEASE CANCELLATION.
The first sentence of section 31(b)of the Act of February 25, 1920 (30 U.S.C. 188(b)) is
amended to read as follows: “Any lease issued after August 21, 1935, under the
provisions of section 17 of this Act shall be subject to cancellation by the Secretary of the
Interior after 30 days notice upon the failure of the lessee to comply with any of the
provisions of the lease, unless or until the leasehold contains a well capable of
production of oil or gas in paying quantities, of the lease is committed to an approved
cooperative or unit plan or communitization agreement under section 17(m) of this Act
which contains a well capable of production of unitized substances in paying
quantities.”.
Sec.5105. ALASKA NATIONRAL INTEREST LANDS CONSERVATION ACT.
Section 1008 of the Alaska National Interest Lands Conservation Act (16 U.S.C. 3148)
is amended as follows:
(1) Subsections (c) and (e) are deleted in their entirety.
(2) The second sentence of subsection 1008(d) is deleted.
SEC.516. PENDING APPLICATIONS, OFFERES, AND BIDS.
(a) Not withstanding any other provision of this subtitle and except as provided in
subsection (b) of this section, all noncompetitive oil and gas lease applications and offers
and competitive oil and gas bids pending on the date of enactment of this subtitle shall be
processed, and leases shall be issued under the provisions of the Act of February 25,
1920, as in effect before its amendment by this subtitle, except where the issuance of any
such lease would not be lawful under such provisions or other applicable laws.
(b) No noncompetitive lease applications or offers pending on the date of enactment of
this subtitle for lands within the Shawnee National Forest, Illinois; the Ouachita National
Forest, Arkansas; Fort Chaffee Arkansas; or Eglin Air Force Base, Florida; shall be
processed until these lands are posted for competitive bidding in accordance with section
5102 of this subtitle. IF any such tract does not receive a bid equal to or greater than the
national minimum acceptable bid from a responsible qualified bidder than the
noncompetitive applications of offers pending for such a tract shall be reinstated

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listed under the section number to locate subsequent amendments to each section.

135

Sec. 31(b)
CANCELLATION

PENDING LEASES

and noncompetitive leases issued under the Act of February 25, 1920, as in effect before
its amendment by this subtitle, except where the issuance of any such lease would not be
lawful under such provisions or other applicable law. If competitive leases are issued for
any such tract, then the pending noncompetitive application or offer shall be rejected.
(c) Except as provided in subsections (a) and (b) of this section, all oil and gas leasing
pursuant to the Act of February 25, 1920, after the date of enactment of this subtitle shall
be conducted in accordance with the provisions of this subtitle.
Sec.5107. REGULATIONS; TEST SALE.
(a) REGULATIONS.—The Secretary shall issue final regulations to implement this
subtitle within 180 days after the enactment of this subtitle. The regulations shall be
effective when published in the Federal Register.
(b) TREATMENT UNDER OTHER LAW.—The proposal or promulgation of such
regulations shall not be considered a major Federal action subject to the requirements of
section 102(2)(c) of the National Environmental Policy Act of 1969.
(c) TEST SALE.—The Secretary may hold one or more lease sale conducted in
accordance with the amendments made by this subtitle before promulgation of
regulations referred to in subsection (a). Sale procedures for such sale shall be
established in the notice of sale.
Sec.5108. ENFORCEMENT.
The Act of February 25, 1920, is amended by inserting after section 40 of the following
new section:
“Sec.41. ENFORCEMENT.
“(a) VIOLATIONS.—It shall be unlawful for any person:
“(1) to organize or participate in any scheme, arrangement, plan, or
agreement to circumvent or defeat the provisions of this Act or its implementing
regulations, or
“(2) to seek to obtain or to obtain any money or property by means of false
statements of material facts of by failing to state material facts concerning:
“(A) the value of any lease or portion thereof issued or to be issued
under this Act
“(B) the availability of any land for leasing under this Act;
“(C)the ability of any person to obtain lease under this Act; or
“(D) the provisions of this Act and its implementing regulations.
“(b)PENALTY.—Any person who knowingly violates the provisions of subsection (a)
of this section shall be punished by a fine of not more than $500,000, imprisonment for
not more than five years, or both.

136

Sec. 41 added
VIOLATIONS

PENALTY

“(c) CIVIL ACTIONS.—Whenever it shall appear that nay person is engaged, or is
about to engage, in any act which constitutes or will constitute a violation of subsection
(a) of this section, the Attorney General may institute a civil action in the district court of
the untied States for the judicial district in which the defendant resides or in which the
violations occurred or in which the lease or lands involved is located, for a temporary
restraining order, injunction, civil penalty of not more than $100,000 for each violations,
or other appropriate remedy, including but not limited to, a prohibition from
participation in exploration, leasing, or development of any Federal mineral, or any
combination of the foregoing.
“(d) CORPORATIONS.—(1) Whenever a corporation or other entity is subject to civil
or criminal action under this section, o any officer, employee, or agent of such
corporation or entity who knowingly authorized, ordered, or carried out the proscribed
activities shall be subject to the same action.
“(2) Whenever any officer, employee, or agent of a corporation or other entity is
subject to civil or criminal action under this section for activity conducted on behalf of
the corporation or other entity, the corporation or other entity shall be subject to the
same action unless it is shown that the officer, employee, or agent was acting without the
knowledge or consent of the corporation or other entity.
“(e) REMEDIES, FINES, AND IMPRISONMENT.—the remedies, penalties, fines, and
imprisonment prescribed in this section shall be concurrent and cumulative and the
exercise of one shall not recluse the exercise of others. Further, the remedies, penalties,
fines, and imprisonment prescribed in this section shall be in addition to any other
remedies, penalties, fines, and imprisonment afforded by any other law or regulations.
“(f) STATE CIVIL ACTIONS.—(1) A State may commence a civil action under
subsection (c) of this section against any person conducing activity within the State in
violation of this section. Civil actions brought by a State shall only be brought in the
United States district court for the judicial district in which the defendant resides or in
which the violation occurred or in which the lease or lands involved is located. The
district court shall have jurisdiction, without regard to the amount in controversy or the
citizenship of the parties, to order appropriate remedies and penalties as described in
subsection (c) of this section.
“(2) A State shall notify the Attorney General o the United States of any civil action
filed by the State under this subsection within 30 days of filing of the action. The
Attorney General of the Untied States shall notify a State of any civil action arising from
activity conducted with the State filed by the Attorney General under this subsection
within 30 day of filing of the action.
“(3) Any civil penalties recovered by a State under this subsection shall be retained by
the Sate and may be expended in such manner and for such purposes as the State deems
appropriate. If a civil action is jointly brought by the Attorney General and a State, by
more than one State or by the Attorney General and more than one State, any civil
penalties recovered as a result of the joint action shall be shared by the parties bringing
the action in the manner determined by the court rendering judgment in such action.

137

CIVIL ACTION

CORPORATIONS

REMEDIES, FINES, AND
IMPRISONMENT

STATE CIVIL ACTIONS

“(4) If a State has commenced a civil action against a person conducting activity
within the State in violation of this section, the Attorney General may join in such action
but may not institute a separate action arising from the same activity under this section.
If the Attorney General has commenced a civil action against a person conducting
activity within a State in violation of this section, that State may join in such action but
may not institute a separate action arising from the same activity under this section.
“(5) Nothing in this section shall deprive a State of jurisdiction to enforce its own civil
and criminal laws against any person who may also be subject to a civil and criminal
action under this section.”.
Sec.5109. PAYMENTS TO STATES.
Section 35 of this Act of February 25, 1920 (30 U.S.C. 191) is amended by adding the
following at the end thereof: “In determining the amount of payments to States under this
section, the amount of such payments shall not be reduced by any administrative or other
costs incurred by the United States.”.
Sec.5110. REPORT.
The Secretary shall submit annually for 5 years after enactment of this subtitle to the
Congress a report containing appropriate information to facilitate congressional
monitoring of this subtitle. Such report shall include, but not be limited to—
(1) the number of acres leased, and the number of leases issued, competitively
and noncompetitively;
(2) the amount of revenue received from bonus bids, filing fees, rentals, and
royalties;
(3) the amount of production from competitive and non competitive leases; and
(4) such other data and information as will facilitate—
(A) an assessment of the onshore oil and gas leasing system, and
(B) a comparison of the system as revived by this subtitle with the
system in operations prior to the enactment of this subtitle
Sec.5111.LAND USE STUDY.
The National Academy of Science and the Comptroller General of the Untied States
shall conduct a study of the manner in which oil and gas resources are considered in the
land use plans developed by the Secretary of the Interior in accordance with provision of
the Federal Land Policy and Management Act of 1976 (90 Stat. 2743) and the Secretary
of Agriculture in accordance with the Forest and Rangeland Renewable Resource
Planning Act of 1974 (88 Stat. 476), as amended by the National Forest Management Act
of 1976(90 Stat. 2949),

138

Sec. 35
PAYMENTS TO STATES

REPORTS

And recommend any improvements and that may be necessary to ensure that—
(1) potential oil and gas resources are adequately addressed in planning
documents;
(2) the social, economic, and environmental consequence of exploration and
development of oil and gas resources are determined; and
(3) any stipulations to be applied to oil and gas leases are clearly identified.
Sec.5112. LANDS NOT SUBJECT TO OIL AND GAS LEASING.
The Act of February 25, 1920, is amended by adding the following at the end thereof;
“SEC.43. LANDS NOT SUBJECT TO OIL AND GAS LEASING.
“(a) PROHIBTION.—the Secretary shall not issue any oil and gas lease under this Act
on any of the following Federal lands;
“(1) Lands recommended for wilderness allocation by the surface managing
agency.
“(2) Lands within Bureau of Land Management wilderness study areas.
“(3) Lands designated by Congress as wilderness study areas, except where
oil and gas leasing is specifically allowed to continue by the statue designating
the study area.
“(4) Lands within area allocated for wilderness or further planning in
Executive Communication 1504. Ninety-Sixth Congress (House Document
numbered 96-119), unless such lands are allocated to uses other than wilderness
by a land and resources management plan or have been released to use other
than wilderness by an act of Congress.
“(b) EXPLORATION.—In the case of any area of National Forest or public lands
subject to this section, nothing in this section shall affect any authority of the Secretary of
the Interior (or for National Forest Lands reserved from the public domain, the Secretary
of Agriculture) to issue permits for exploration for oil and gas by means not requiring
construction of roads or improvement of existing roads if such activity is conducted in a
manner compatible with the preservation of the wilderness environment.”.
Sec.5113. SHORT TITLE.
The Act of February 25, 1920, is amended by inserting after section 43 the following
new section:
“Sec.44. SHORT TITLE.
“This Act may be cited as the ‘Mineral Leasing Act.”.

139

Sec. 43 added

Sec. 44 added

ACT OF NOVEMBER 15, 1990
To authorize the Secretary of the Interior to reinstate oil and gas lease LA 033164.
Be it enacted by the Senate and House of Representatives of the United States of America in
Congress assembled, That subsection 31(g) of the Mineral Leasing Act, as amended (30 V.S.C.
188(g)), is amended by adding the following:
"(3) Notwithstanding any other provision of law, any lease issued pursuant to section 14 of this
Act shall be eligible for reinstatement under the terms and conditions set forth in subsections (c),
(d), and (e) of this section, applicable to leases issued' under .subsection 17(c) of this Act (30
V.S.C. 226(c)) except, that, upon reinstatement, such
lease shall continue for twenty years and so long thereafter as oil or gas is produced in paying
quantities.
"(4) Notwithstanding any other provision of law, any lease issued pursuant to section 14 of the
Act shall, upon renewal on or after enactment of this paragraph, continue for twenty years and so
long thereafter as oil or gas is produced in paying quantities.".
Sec. 2. (a) Notwithstanding any other provision of law, United States oil and gas leases CALA
033164, CAS 019746C, and CAS 021009B shall be eligible for reinstatement under the terms and
conditions set forth in subsections 31(c), (d), and (e) of the Mineral
Leasing Act, as amended (30 V.S.C. 188 (c), (d), and (e) applicable to leases issued under section
17(c) of the Mineral Leasing Act (30 U.S.C. 226(c)) except, that, upon reinstatement, such lease
shall continue for twenty years and so long thereafter as oil or gas is produced in paying
quantities.
(b) Within thirty days after the enactment of this Act, the Secretary of the Interior shall give
written notice by registered mail to the last lessees of record for the leases listed in subsection (a)
of this section that said lessees may petition for reinstatement in accordance with the procedures
and conditions in subsections 31 (c), (d), and (e) of the Mineral Leasing Act, as amended (30
U.S.C. 188(c), (d), and (e)). The lessee shall have sixty days from the date of the Secretary's
notice to file such petition. If the Secretary
determines that the leases listed in subsection (a) of this section qualify for reinstatement pursuant
to subsection 31(d) (30 U.S.C.118(d)), in all respects except for compliance with the deadlines
imposed by that provision, the Secretary shall reinstate such leases.
Approved November 15, 1990.

NOTE: Regarding all Mineral Leasing Act sections noted on this page: SEE footnotes listed
under the section number to locate subsequent amendments in each section.

140

FOOTNOTES FOR THE MINERAL LEASING ACT OF 1920
and SUBSEQUENT AMENDMENTS

FOOTNOTES FOR SECTION 1: MINERAL LEASING ACT OF 1920:
1. Sec. 1 is made applicable to the Act of 2/7/27, at p. 19 this text.
2. Sec. 1 is amended by the Act of 8/8/46, at p. 40 this text.
3. Sec. 1 is amended by the Act of 9/2/60, at p. 77 this text.
4. Sec. 1 is further amended by the Act of 11/16/81, at p. 114 this text.
FOOTNOTES FOR SECTION 2: MINERAL LEASING ACT OF 1920
5. Sec. 2 is amended by the Act of 6/3/48, at p. 53-54 this text.
6. Sec. 2 (a)-(b) are amended by the Act of 8/31/64, at p. 79 this text.
7. Sec. 2 (a) is amended by the Act of 8/4/76, at p. 100-102 this text.
8. Sec. 2(b) is amended by the Act of 8/4/76, at p. 102-103 this text.
9. Sec. 2(c)-(d) are REPEALED by Act of 8/4/76, at p. 103 this text.
10. Sec. 2 is amended by adding new subsection, 2(d)(1)-(8), by Act of 8/4/76, at
p. 103-104 this text.
11. Sec. 2(a) (1) is further amended by 10/30/78, at p. 112 this text.
12. Sec. 2 is amended by addition by the Act of 11/16/81, at p. 116 this text.
FOOTNOTES FOR SECTION 3:
MINERAL LEASING ACT OF 1920
13. Sec. 3 is further amended by the Act of 10/30/78, at p. 112 this text.
14. Sec. 3 is amended by the Act of 6/3/48, at p. 56 this text.
15. Sec. 3 is further amended by the Act of 4/21/76, at p. 107-108 this text.
16. Sec. 3 is amended by the Act of 4/21/76, at p. 107-8, this text. NOTE: There are
three references to Sec. 3 on page 107.
17. Sec. 3 is amended by the Act of 10/30/78 at p. 112 this text.
18. Sec. 3 is amended by the Act of 11/16/81, at p. 116 this text.
FOOTNOTES FOR SECTION 4: MINERAL LEASING ACT OF 1920
19. Sec. 4 is REPEALED by 4/21/76, at p. 107 this text.
FOOTNOTES FOR SECTION 7:
MINERAL LEASING ACT OF 1920
20. Sec. 7 is amended by the Act of 4/21/76, at p. 104 this text.
FOOTNOTES FOR SECTION 8: MINERAL LEASING ACT OF 1920
21. Sec. 8A is inserted after sec. 8 by the Act of 4/21/76, at p. 104-106 this text.
22. Sec. 8B is inserted after sec. 8A by the Act of 4/21/76, at p. 106 this text.

141

FOOTNOTES FOR SECTION 9: MINERAL LEASING ACT OF 1920
23. Sec. 9 is amended by the Act of 6/3/48, at p. 54 this text.
24. Sec. 9 is amended and new subsections are added by the Act of 3/18/60, at p. 65
this text.
FOOTNOTES FOR SECTION 10: MINERAL LEASING ACT OF 1920
25. Sec. 10 is amended by the Act of 6/3/48, at p. 54-55 this text.
FOOTNOTBS FOR SECTION 11: MINERAL LEASING ACT OF 1920
26. Sec. 11 is amended by the Act of 6/3/48, at p. 55 this text.
FOOTNOTES FOR SECTION 12: MINERAL LEASING ACT OF 1920
27. Sec. 12 is amended by the Act of 6/3/48, at p. 55 this text.
28. Sec. 12 is amended by the Act of 3/18/60, at p. 65 this text.
FOOTNOTES FOR SECTION 13: MINERAL LEASING ACT or 1920
29. Sec. 13 is amended by the Act of 8/21/35, at p. 30-32 this text.
30. Sec. 13 is made applicable to the Act of 7/29/42, at p. 37 this text.
FOOTNOTES FOR SECTION 14: MINERAL LEASING ACT OF 1920
31. Sec. 14 is amended by the Act of 8/21/35, at p. 32-33 this text.
FOOTNOTES FOR SECTION 16: MINERAL LEASING ACT OF 1920
32. Sec. 16 is amended by the Act of 8/8/46, at p. 40 this text.
FOOTNOTES FOR SECTION 17: MINERAL LEASING ACT OF 1920
33. Sec. 17 is amended by the Act of 7/3/30, at p. 22 this text. NOTE: This amendment
EXPIRES 1/31/31. See p. 24 this text.
34. Sec. 17 is amended and reenacted by the Act of 3/4/31, at p. 25-26 this text. 33. Sec.
17 is amended by the Act of 8/21/35, at p. 33-35 this text.
35. Sec. 17 as amended in the Act of 8/21/35 (pages 33-35 this text) is applicable to the
Act of 1/8/40, at p. 37 this text.
35. Sec. 17 provisions are applied to the Act of 7/29/42, at p. 37 this text.
36. Sec. 17 is amended and new sections, 17(a) and (b) are added, by the Act of 8/8/46,
at p. 40-44 this text.
31. Sec. 17 is amended by the Act of 7/29/54, at p. 58-59 this text. NOTE: There are
five references to Sec. 17 at these pages.
38. Sec. 17 is amended by the Act of 6/11/60, at p. 65 this text.
39. Sec. 17, 17(a), and 17(b) are amended by the Act of 9/2/60, at p. 67-71 this text.
40. Sec. 17(b), (c), and (e) are amended by the Act of 11/16/81, at p. 114-115 this text.
41. Sec. 17 is amended by adding sec. 17(k) by the Act of 11/16/81, at p. 115-116 this
text.
42. Sec. 17(b) (1), (c), and (d) are amended by the Act of 12/21/87, at p. 132-134 this
text.

142

FOOTNOTES FOR SECTION 21: MINERAL LEASING ACT OF 1920
43. Sec. 21 is amended and secs. 21(a) and (b) are added by the Act of 9/2/60, at p. 77
this text. NOTE: There are two references to Sec. 21 on this page.
44. Sec. 21(a) and (c) are amended by the Act of 11/16/81, at p. 114 this text.
45. Sec. 21 is amended by the Act of 12/30/82, at p. 117-118 this text.
FOOTNOTES FOR SECTION 22: MINERAL LEASING ACT OF 1920
46. Sec. 22 is amended by the Act of 7/3/58, at p. 62 this text.
FOOTNOTES FOR SECTION 23: MINERAL LEASING ACT OF 1920
47. Sec. 23 is amended by the Act of 12/11/28, at p. 20 this text.
FOOTNOTES FOR SECTION 24: MINERAL LEASING ACT OF 1920
48. Sec. 24 is amended by the Act of 12/11/28, at p. 20-21 this text.
FOOTNOTES FOR SECTION 27: MINERAL LEASING ACT OF 1920
49. Sec. 27 is amended by the Act of 4/30/26, at p. 18-19 this text.
50. Sec. 27 is amended by the Act of 7/3/30, at p. 22-24 this text.
NOTE: This amendment EXPIRES 1/31/31. See p. 24 this text.
51. Sec. 27 is amended by the Act of 8/8/46, at p. 44-46 this text.
52. Sec. 27 is amended by the Act of 6/3/48, at p. 55 this text.
53. Sec. 27 is amended by the Act of 8/2/54, at p. 60 this text.
54. Sec. 27 is amended by the Act of 8/21/58, at p. 63 this text.
55. Sec. 27 is amended by the Act of 3/18/60, at p. 65 this text.
56. Sec. 27 is amended by the Act of 9/2/60, at p. 71-75 this text.
57. Sec. 27 is amended by the Act of 8/31/64, at p. 79 this text.
58. Sec. 27(a) (1) is amended by the Act of 4/21/76, at p. 107 this text.
59. Sec. 27(a) (2) was REPEALED by the Act of 4/21/76, at p. 107 this text.
60. Sec. 27 is amended by the Act of 4/21/76, at p. 108 this text.
61. Sec. 27(k) is amended by the Act of 11/16/81, see p. 114 this text.
62. Sec. 27(d) (1) is amended by the Act of 11/16/81, see p. 114 this text.

FOOTNOTES FOR SECTION 28: MINERAL LEASING ACT OF 1920
63. Sec. 28 is amended by the Act of 8/21/35, at p. 35-36 this text.
64. Sec. 28 is amended by the Act of 8/12/53, at p. 57 this text.
65. Sec. 28 is amended by the Act of 11/16/73, at p. 91-99 this text.

143

FOOTNOTES FOR SECTION 30: MINERAL LEASING ACT OF 1920
66. Sec. 30(a) and (b) were added by the Act of 8/8/46, at p. 46-47 this text.
67. Sec. 30(a) is amended by the Act of 7/29/54, at p. 59 this index.
68. Sec. 30(a) is amended by the Act of 9/2/60, at p. 76-77 this text.
69. Sec. 30 is amended by Act of 10/30/78, at p. 112 this index.
70. Sec. 30(a) and (b) are amended by the Act of 12/21/87, at p. 134-135 this text.
FOOTNOTES FOR SECTION 31: MINERAL LEASING ACT OF 1920
71. Sec. 31 is amended by the Act of 8/8/46, at p. 47 this text.
72. Sec. 31 is amended by the Act of 7/29/54, at p. 60 this text.
73. Sec. 31 is amended by the Act of 10/15/62, at p. 78 this text.
74. Sec. 31(c) and (d) are added by 10/15/62, at p. 78 this text.
75. Sec. 31(b) and (0) are amended by Act of 5/12/70, at p. 80 this text.
76. Sec. 31 is amended by Act of 1/12/83, at p. 128 this text.
77. Sec. 31(b) is amended by the Act of 12/21/87, at p. 135 this text.
FOOTNOTES FOR SECTION 34: MINERAL LEASING ACT OF 1920
78. Sec. 34 is amended by the Act of 9/2/60, at p. 77 this text.
FOOTNOTES FOR SECTION 35: MINERAL LEASING ACT OF 1920
79. Sec. 35 is amended and reenacted .by the Act of 5/27/47 at p. 49 this text.
80. Sec. 35 is amended by the Act of 8/3/50, at p. 57 this text.
81. Sec. 35 is amended by the Act of 7/10/57, at p. 61 this text.
82. Sec. 35 is amended by the Act of 4/21/76, at p. 100 this text.
83. Sec. 35 is amended by the Act of 4/21/76, at p. 106 this text.
84. Sec. 35 is amended by the Act of B/4/76, at p. 107 this text.
85. Sec. 35 is amended by tit1e III, 9/28/76, at p. 109 this text.
86. Sec. 35 is amended by the Act of 10/21/76, at p. 110 this text.
87. Sec. 35 is amended by the Act of 1/12/83, at p. 121 this text.
88. Sec. 35 is amended by the Act of 1/12/83, at p. 126 this text.
NOTE: There are two references to Sec. 35 on this page.
89. Sec. 35 is amended by the Act of 12/22/87, at p. 138 this text.
FOOTNOTES FOR SECTION 36: MINERAL LEASING ACT OF 1920
90. Sec. 36 is amended by the Act of 7/13/46, at p. 39 this text.
FOOTNOTES FOR SECTION 37: MINERAL LEASING ACT OF 1920
91. Sec. 37 is amended by the Act of 10/30/78, at p. 112 this text.
FOOTNOTES FOR SECTION 38: MINERAL LEASING ACT OF 1920
92. Sec. 38 was REPEALED by the Act of 9/6/66, at p. 79 this text.
FOOTNOTES FOR SECTION 39: MINERAL LEASING ACT OF 1920
93. Sec. 39 was added by the Act of 2/9/33, at p. 28 this text.
94. Sec. 39 was added by the Act of 2/9/33, at p. 28 this text.
95. Sec. 39 is amended by the Act of 8/8/46, at p. 47-48 this text.
144

96.
97.
98.

Sec. 39 is amended by the Act of 6/3/48, at p. 55-56 this text.
Sec. 39 is amended by the Act of 4/21/76, at p. 108 this text.
Sec. 39 is amended by the Act of 11/16/81, at p. 114 this text.

FOOTNOTES FOR SECTION 14 (cont'd): MINERAL LEASING ACT OF 1920
99. Sec. 14 is amended by the Act of 11/15/90, at p. 140 this text.
FOOTNOTES FOR SECTION 31 (cont'd): MINERAL LEASING ACT OF 1920
100. Sec. 31 is amended by the Act of 11/15/90, at p. 140 this text.
SECTION 40:
Added by Act of 6/16/34, at p. 29 this text.
SECTION 41;
Added by Act of 12/21/87, at p. 136 this text.
SECTION 42:
Added by Act of 9/2/60, at p. 76 this text.
SECTION 43:
Added by Act of 12/21/87, at p. 139 this text.
SECTION 44:
Added by Act of 12/21/87, at p. 139 this text.

145

PUBLIC LAW 104–185—AUG. 13, 1996

FEDERAL OIL AND GAS ROYALTY
SIMPLIFICATION AND FAIRNESS ACT OF 1996

110 STAT. 1700

PUBLIC LAW 104–185—AUG. 13, 1996

Public Law 104–185
104th Congress
An Act
Aug. 13, 1996
[H.R. 1975]
Federal Oil and
Gas Royalty
Simplification
and Fairness Act
of 1996.
30 USC 1701
note.
30 USC 1702.

To improve the management of royalties from Federal and Outer Continental Shelf
oil and gas leases, and for other purposes.

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Federal Oil and Gas Royalty
Simplification and Fairness Act of 1996’’.
SEC. 2. DEFINITIONS.

Section 3 of the Federal Oil and Gas Royalty Management
Act of 1982 (30 U.S.C. 1701 et seq.) is amended—
(1) by amending paragraph (7) to read as follows:
‘‘(7) ‘lessee’ means any person to whom the United States
issues an oil and gas lease or any person to whom operating
rights in a lease have been assigned;’’; and
(2) by striking ‘‘and’’ at the end of paragraph (15), by
striking the period at the end of paragraph (16) and inserting
a semicolon, and by adding at the end the following:
‘‘(17) ‘adjustment’ means an amendment to a previously
filed report on an obligation, and any additional payment or
credit, if any, applicable thereto, to rectify an underpayment
or overpayment on an obligation;
‘‘(18) ‘administrative proceeding’ means any Department
of the Interior agency process in which a demand, decision
or order issued by the Secretary or a delegated State is subject
to appeal or has been appealed;
‘‘(19) ‘assessment’ means any fee or charge levied or
imposed by the Secretary or a delegated State other than—
‘‘(A) the principal amount of any royalty, minimum
royalty, rental bonus, net profit share or proceed of sale;
‘‘(B) any interest; or
‘‘(C) any civil or criminal penalty;
‘‘(20) ‘commence’ means—
‘‘(A) with respect to a judicial proceeding, the service
of a complaint, petition, counterclaim, cross claim, or other
pleading seeking affirmative relief or seeking credit or
recoupment: Provided, That if the Secretary commences
a judicial proceeding against a designee, the Secretary
shall give notice of that commencement to the lessee who
designated the designee, but the Secretary is not required
to give notice to other lessees who may be liable pursuant
to section 102(a) of this Act, for the obligation that is
the subject of the judicial proceeding; or

PUBLIC LAW 104–185—AUG. 13, 1996

110 STAT. 1701

‘‘(B) with respect to a demand, the receipt by the
Secretary or a delegated State or a lessee or its designee
(with written notice to the lessee who designated the designee) of the demand;
‘‘(21) ‘credit’ means the application of an overpayment (in
whole or in part) against an obligation which has become due
to discharge, cancel or reduce the obligation;
‘‘(22) ‘delegated State’ means a State which, pursuant to
an agreement or agreements under section 205 of this Act,
performs authorities, duties, responsibilities, or activities of
the Secretary;
‘‘(23) ‘demand’ means—
‘‘(A) an order to pay issued by the Secretary or the
applicable delegated State to a lessee or its designee (with
written notice to the lessee who designated the designee)
that has a reasonable basis to conclude that the obligation
in the amount of the demand is due and owing; or
‘‘(B) a separate written request by a lessee or its designee which asserts an obligation due the lessee or its
designee that provides a reasonable basis to conclude that
the obligation in the amount of the demand is due and
owing, but does not mean any royalty or production report,
or any information contained therein, required by the Secretary or a delegated State;
‘‘(24) ‘designee’ means the person designated by a lessee
pursuant to section 102(a) of this Act, with such written designation effective on the date such designation is received by
the Secretary and remaining in effect until the Secretary
receives notice in writing that the designation is modified or
terminated;
‘‘(25) ‘obligation’ means—
‘‘(A) any duty of the Secretary or, if applicable, a delegated State—
‘‘(i) to take oil or gas royalty in kind; or
‘‘(ii) to pay, refund, offset, or credit monies including (but not limited to)—
‘‘(I) the principal amount of any royalty, minimum royalty, rental, bonus, net profit share or
proceed of sale; or
‘‘(II) any interest; and
‘‘(B) any duty of a lessee or its designee (subject to
the provision of section 102(a) of this Act)—
‘‘(i) to deliver oil or gas royalty in kind; or
‘‘(ii) to pay, offset or credit monies including (but
not limited to)—
‘‘(I) the principal amount of any royalty, minimum royalty, rental, bonus, net profit share or
proceed of sale;
‘‘(II) any interest;
‘‘(III) any penalty; or
‘‘(IV) any assessment,
which arises from or relates to any lease administered
by the Secretary for, or any mineral leasing law related
to, the exploration, production and development of oil
or gas on Federal lands or the Outer Continental Shelf;
‘‘(26) ‘order to pay’ means a written order issued by the
Secretary or the applicable delegated State to a lessee or its

110 STAT. 1702

PUBLIC LAW 104–185—AUG. 13, 1996
designee (with notice to the lessee who designated the designee)
which—
‘‘(A) asserts a specific, definite, and quantified obligation claimed to be due, and
‘‘(B) specifically identifies the obligation by lease,
production month and monetary amount of such obligation
claimed to be due and ordered to be paid, as well as
the reason or reasons such obligation is claimed to be
due, but such term does not include any other communication or action by or on behalf of the Secretary or a delegated
State;
‘‘(27) ‘overpayment’ means any payment by a lessee or
its designee in excess of an amount legally required to be
paid on an obligation and includes the portion of any estimated
payment for a production month that is in excess of the royalties
due for that month;
‘‘(28) ‘payment’ means satisfaction, in whole or in part,
of an obligation;
‘‘(29) ‘penalty’ means a statutorily authorized civil fine
levied or imposed for a violation of this Act, any mineral leasing
law, or a term or provision of a lease administered by the
Secretary;
‘‘(30) ‘refund’ means the return of an overpayment;
‘‘(31) ‘State concerned’ means, with respect to a lease, a
State which receives a portion of royalties or other payments
under the mineral leasing laws from such lease;
‘‘(32) ‘underpayment’ means any payment or nonpayment
by a lessee or its designee that is less than the amount legally
required to be paid on an obligation; and
‘‘(33) ‘United States’ means the United States Government
and any department, agency, or instrumentality thereof, the
several States, the District of Columbia, and the territories
of the United States.’’.

SEC. 3. DELEGATION OF ROYALTY COLLECTIONS AND RELATED
ACTIVITIES.

(a) GENERAL AUTHORITY.—Section 205 of the Federal Oil and
Gas Royalty Management Act of 1982 (30 U.S.C. 1735) is amended
to read as follows:
30 USC 1735.

‘‘SEC. 205. DELEGATION OF ROYALTY COLLECTIONS AND RELATED
ACTIVITIES.

‘‘(a) Upon written request of any State, the Secretary is
authorized to delegate, in accordance with the provisions of
this section, all or part of the authorities and responsibilities
of the Secretary under this Act to:
‘‘(1) conduct inspections, audits, and investigations;
‘‘(2) receive and process production and financial reports;
‘‘(3) correct erroneous report data;
‘‘(4) perform automated verification; and
‘‘(5) issue demands, subpoenas, and orders to perform
restructured accounting, for royalty management enforcement
purposes,
to any State with respect to all Federal land within the State.
‘‘(b) After notice and opportunity for a hearing, the Secretary
is authorized to delegate such authorities and responsibilities
granted under this section as the State has requested, if the Secretary finds that—

PUBLIC LAW 104–185—AUG. 13, 1996

110 STAT. 1703

‘‘(1) it is likely that the State will provide adequate
resources to achieve the purposes of this Act;
‘‘(2) the State has demonstrated that it will effectively
and faithfully administer the rules and regulations of the Secretary under this Act in accordance with the requirements
of subsections (c) and (d) of this section;
‘‘(3) such delegation will not create an unreasonable burden
on any lessee;
‘‘(4) the State agrees to adopt standardized reporting procedures prescribed by the Secretary for royalty and production
accounting purposes, unless the State and all affected parties
(including the Secretary) otherwise agree;
‘‘(5) the State agrees to follow and adhere to regulations
and guidelines issued by the Secretary pursuant to the mineral
leasing laws regarding valuation of production; and
‘‘(6) where necessary for a State to have authority to carry
out and enforce a delegated activity, the State agrees to enact
such laws and promulgate such regulations as are consistent
with relevant Federal laws and regulations
with respect to the Federal lands within the State.
‘‘(c) After notice and opportunity for hearing, the Secretary
shall issue a ruling as to the consistency of a State’s proposal
with the provisions of this section and regulations under subsection
(d) within 90 days after submission of such proposal. In any unfavorable ruling, the Secretary shall set forth the reasons therefor and
state whether the Secretary will agree to delegate to the State
if the State meets the conditions set forth in such ruling.
‘‘(d) After consultation with State authorities, the Secretary
shall by rule promulgate, within 12 months after the date of enactment of this section, standards and regulations pertaining to the
authorities and responsibilities to be delegated under subsection
(a), including standards and regulations pertaining to—
‘‘(1) audits to be performed;
‘‘(2) records and accounts to be maintained;
‘‘(3) reporting procedures to be required by States under
this section;
‘‘(4) receipt and processing of production and financial
reports;
‘‘(5) correction of erroneous report data;
‘‘(6) performance of automated verification;
‘‘(7) issuance of standards and guidelines in order to avoid
duplication of effort;
‘‘(8) transmission of report data to the Secretary; and
‘‘(9) issuance of demands, subpoenas, and orders to perform
restructured accounting, for royalty management enforcement
purposes.
Such standards and regulations shall be designed to provide reasonable assurance that a uniform and effective royalty management
system will prevail among the States. The records and accounts
under paragraph (2) shall be sufficient to allow the Secretary to
monitor the performance of any State under this section.
‘‘(e) If, after notice and opportunity for a hearing, the Secretary
finds that any State to which any authority or responsibility of
the Secretary has been delegated under this section is in violation
of any requirement of this section or any rule thereunder, or that
an affirmative finding by the Secretary under subsection (b) can
no longer be made, the Secretary may revoke such delegation.

Regulations.

110 STAT. 1704

PUBLIC LAW 104–185—AUG. 13, 1996

If, after providing written notice to a delegated State and a reasonable opportunity to take corrective action requested by the Secretary, the Secretary determines that the State has failed to issue
a demand or order to a Federal lessee within the State, that
such failure may result in an underpayment of an obligation due
the United States by such lessee, and that such underpayment
may be uncollected without Secretarial intervention, the Secretary
may issue such demand or order in accordance with the provisions
of this Act prior to or absent the withdrawal of delegated authority.
‘‘(f) Subject to appropriations, the Secretary shall compensate
any State for those costs which may be necessary to carry out
the delegated activities under this Section. Payment shall be made
no less than every quarter during the fiscal year. Compensation
to a State may not exceed the Secretary’s reasonably anticipated
expenditure for performance of such delegated activities by the
Secretary. Such costs shall be allocable for the purposes of section
35(b) of the Act entitled ‘An act to promote the mining of coal,
phosphate, oil, oil shale, gas and sodium on the public domain’,
approved February 25, 1920 (commonly known as the Mineral Leasing Act) (30 U.S.C. 191 (b)) to the administration and enforcement
of laws providing for the leasing of any onshore lands or interests
in land owned by the United States. Any further allocation of
costs under section 35(b) made by the Secretary for oil and gas
activities, other than those costs to compensate States for delegated
activities under this Act, shall be only those costs associated with
onshore oil and gas activities and may not include any duplication
of costs allocated pursuant to the previous sentence. Nothing in
this section affects the Secretary’s authority to make allocations
under section 35(b) for non-oil and gas mineral activities. All moneys
received from sales, bonuses, rentals, royalties, assessments and
interest, including money claimed to be due and owing pursuant
to a delegation under this section, shall be payable and paid to
the Treasury of the United States.
‘‘(g) Any action of the Secretary to approve or disapprove a
proposal submitted by a State under this section shall be subject
to judicial review in the United States district court which includes
the capital of the State submitting the proposal.
‘‘(h) Any State operating pursuant to a delegation existing
on the date of enactment of this Act may continue to operate
under the terms and conditions of the delegation, except to the
extent that a revision of the existing agreement is adopted pursuant
to this section.’’.
(b) CLERICAL AMENDMENT.—The item relating to section 205
in the table of contents in section 1 of the Federal Oil and Gas
Royalty Management Act of 1982 (30 U.S.C. 1701) is amended
to read as follows:
‘‘Sec. 205. Delegation of royalty collections and related activities.’’.
SEC. 4. SECRETARIAL AND DELEGATED STATES’ ACTIONS AND LIMITATION PERIODS.

(a) IN GENERAL.—The Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1701 et seq.) is amended by adding
after section 114 the following new section:

PUBLIC LAW 104–185—AUG. 13, 1996

110 STAT. 1705

‘‘SEC. 115. SECRETARIAL AND DELEGATED STATES’ ACTIONS AND
LIMITATION PERIODS.

‘‘(a) IN GENERAL.—The respective duties, responsibilities, and
activities with respect to a lease shall be performed by the Secretary, delegated States, and lessees or their designees in a timely
manner.
‘‘(b) LIMITATION PERIOD.—
‘‘(1) IN GENERAL.—A judicial proceeding or demand which
arises from, or relates to an obligation, shall be commenced
within seven years from the date on which the obligation
becomes due and if not so commenced shall be barred. If
commencement of a judicial proceeding or demand for an obligation is barred by this section, the Secretary, a delegated State,
or a lessee or its designee (A) shall not take any other or
further action regarding that obligation, including (but not
limited to) the issuance of any order, request, demand or other
communication seeking any document, accounting, determination, calculation, recalculation, payment, principal, interest,
assessment, or penalty or the initiation, pursuit or completion
of an audit with respect to that obligation; and (B) shall not
pursue any other equitable or legal remedy, whether under
statute or common law, with respect to an action on or an
enforcement of said obligation.
‘‘(2) RULE OF CONSTRUCTION.—A judicial proceeding or
demand that is timely commenced under paragraph (1) against
a designee shall be considered timely commenced as to any
lessee who is liable pursuant to section 102(a) of this Act
for the obligation that is the subject of the judicial proceeding
or demand.
‘‘(3) APPLICATION OF CERTAIN LIMITATIONS.—The limitations
set forth in sections 2401, 2415, 2416, and 2462 of title 28,
United States Code, and section 42 of the Mineral Leasing
Act (30 U.S.C. 226–2) shall not apply to any obligation to
which this Act applies. Section 3716 of title 31, United States
Code, may be applied to an obligation the enforcement of which
is not barred by this Act, but may not be applied to any
obligation the enforcement of which is barred by this Act.
‘‘(c) OBLIGATION BECOMES DUE.—
‘‘(1) IN GENERAL.—For purposes of this Act, an obligation
becomes due when the right to enforce the obligation is fixed.
‘‘(2) ROYALTY OBLIGATIONS.—The right to enforce any royalty obligation for any given production month for a lease
is fixed for purposes of this Act on the last day of the calendar
month following the month in which oil or gas is produced.
‘‘(d) TOLLING OF LIMITATION PERIOD.—The running of the
limitation period under subsection (b) shall not be suspended, tolled,
extended, or enlarged for any obligation for any reason by any
action, including an action by the Secretary or a delegated State,
other than the following:
‘‘(1) TOLLING AGREEMENT.—A written agreement executed
during the limitation period between the Secretary or a delegated State and a lessee or its designee (with notice to the
lessee who designated the designee) shall toll the limitation
period for the amount of time during which the agreement
is in effect.
‘‘(2) SUBPOENA.—

30 USC 1724.

110 STAT. 1706

PUBLIC LAW 104–185—AUG. 13, 1996
‘‘(A) The issuance of a subpoena to a lessee or its
designee (with notice to the lessee who designated the
designee, which notice shall not constitute a subpoena to
the lessee) in accordance with the provisions of subparagraph (B)(i) shall toll the limitation period with respect
to the obligation which is the subject of a subpoena only
for the period beginning on the date the lessee or its
designee receives the subpoena and ending on the date
on which (i) the lessee or its designee has produced such
subpoenaed records for the subject obligation, (ii) the Secretary or a delegated State receives written notice that
the subpoenaed records for the subject obligation are not
in existence or are not in the lessee’s or its designee’s
possession or control, or (iii) a court has determined in
a final decision that such records are not required to be
produced, whichever occurs first.
‘‘(B)(i) A subpoena for the purposes of this section
which requires a lessee or its designee to produce records
necessary to determine the proper reporting and payment
of an obligation due the Secretary may be issued only
by an Assistant Secretary of the Interior or an Acting
Assistant Secretary of the Interior who is a schedule C
employee (as defined by section 213.3301 of title 5, Code
of Federal Regulations), or the Director or Acting Director
of the respective bureau or agency, and may not be delegated to any other person. If a State has been delegated
authority pursuant to section 205, the State, acting through
the highest State official having ultimate authority over
the collection of royalties from leases on Federal lands
within the State, may issue such subpoena, but may not
delegate such authority to any other person.
‘‘(ii) A subpoena described in clause (i) may only be
issued against a lessee or its designee during the limitation
period provided in this section and only after the Secretary
or a delegated State has in writing requested the records
from the lessee or its designee related to the obligation
which is the subject of the subpoena and has determined
that—
‘‘(I) the lessee or its designee has failed to respond
within a reasonable period of time to the Secretary’s
or the applicable delegated State’s written request for
such records necessary for an audit, investigation or
other inquiry made in accordance with the Secretary’s
or such delegated State’s responsibilities under this
Act; or
‘‘(II) the lessee or its designee has in writing denied
the Secretary’s or the applicable delegated State’s written request to produce such records in the lessee’s
or its designee’s possession or control necessary for
an audit, investigation or other inquiry made in accordance with the Secretary’s or such delegated State’s
responsibilities under this Act; or
‘‘(III) the lessee or its designee has unreasonably
delayed in producing records necessary for an audit,
investigation or other inquiry made in accordance with
the Secretary’s or the applicable delegated State’s

PUBLIC LAW 104–185—AUG. 13, 1996

110 STAT. 1707

responsibilities under this Act after the Secretary’s
or delegated State’s written request.
‘‘(C) In seeking records, the Secretary or the applicable
delegated State shall afford the lessee or its designee a
reasonable period of time after a written request by the
Secretary or such delegated State in which to provide such
records prior to the issuance of any subpoena.
‘‘(3) MISREPRESENTATION OR CONCEALMENT.—The intentional misrepresentation or concealment of a material fact for
the purpose of evading the payment of an obligation in which
case the limitation period shall be tolled for the period of
such misrepresentation or such concealment.
‘‘(4) ORDER TO PERFORM RESTRUCTURED ACCOUNTING.—A)(i)
The issuance of a notice under subparagraph (D) that the
lessee or its designee has not substantially complied with the
requirement to perform a restructured accounting shall toll
the limitation period with respect to the obligation which is
the subject of the notice only for the period beginning on the
date the lessee or its designee receives the notice and ending
120 days after the date on which (I) the Secretary or the
applicable delegated State receives written notice that the
accounting or other requirement has been performed, or (II)
a court has determined in a final decision that the lessee
is not required to perform the accounting, whichever occurs
first.
‘‘(ii) If the lessee or its designee initiates an administrative
appeal or judicial proceeding to contest an order to perform
a restructured accounting issued under subparagraph (B)(i),
the limitation period in subsection (b) shall be tolled from
the date the lessee or its designee received the order until
a final, nonappealable decision is issued in any such proceeding.
‘‘(B)(i) The Secretary or the applicable delegated State may
issue an order to perform a restructured accounting to a lessee
or its designee when the Secretary or such delegated State
determines during an audit of a lessee or its designee that
the lessee or its designee should recalculate royalty due on
an obligation based upon the Secretary’s or the delegated State’s
finding that the lessee or its designee has made identified
underpayments or overpayments which are demonstrated by
the Secretary or the delegated State to be based upon repeated,
systemic reporting errors for a significant number of leases
or a single lease for a significant number of reporting months
with the same type of error which constitutes a pattern of
violations and which are likely to result in either significant
underpayments or overpayments.
‘‘(ii) The power of the Secretary to issue an order to perform
a restructured accounting may not be delegated below the most
senior career professional position having responsibility for the
royalty management program, which position is currently designated as the ‘Associate Director for Royalty Management’,
and may not be delegated to any other person. If a State
has been delegated authority pursuant to section 205 of this
Act, the State, acting through the highest ranking State official
having ultimate authority over the collection of royalties from
leases on Federal lands within the State, may issue such order
to perform, which may not be delegated to any other person.
An order to perform a restructured accounting shall—

110 STAT. 1708

Notice.

PUBLIC LAW 104–185—AUG. 13, 1996

‘‘(I) be issued within a reasonable period of time from
when the audit identifies the systemic, reporting errors;
‘‘(II) specify the reasons and factual bases for such
order;
‘‘(III) be specifically identified as an ‘order to perform
a restructured accounting’;
‘‘(IV) provide the lessee or its designee a reasonable
period of time (but not less than 60 days) within which
to perform the restructured accounting; and
‘‘(V) provide the lessee or its designee 60 days within
which to file an administrative appeal of the order to
perform a restructured accounting.
‘‘(C) An order to perform a restructured accounting shall
not mean or be construed to include any other action by or
on behalf of the Secretary or a delegated State.
‘‘(D) If a lessee or its designee fails to substantially comply
with the requirement to perform a restructured accounting
pursuant to this subsection, a notice shall be issued to the
lessee or its designee that the lessee or its designee has not
substantially complied with the requirements to perform a
restructured accounting. A lessee or its designee shall be given
a reasonable time within which to perform the restructured
accounting. Such notice may be issued under this section only
by an Assistant Secretary of the Interior or an acting Assistant
Secretary of the Interior who is a schedule C employee (as
defined by section 213.3301 of title 5, Code of Federal Regulations) and may not be delegated to any other person. If a
State has been delegated authority pursuant to section 205,
the State, acting through the highest State official having ultimate authority over the collection of royalties from leases on
Federal lands within the State, may issue such notice, which
may not be delegated to any other person.
‘‘(e) TERMINATION OF LIMITATIONS PERIOD.—An action or an
enforcement of an obligation by the Secretary or delegated State
or a lessee or its designee shall be barred under this section prior
to the running of the seven-year period provided in subsection
(b) in the event—
‘‘(1) the Secretary or a delegated State has notified the
lessee or its designee in writing that a time period is closed
to further audit; or
‘‘(2) the Secretary or a delegated State and a lessee or
its designee have so agreed in writing.
For purposes of this subsection, notice to, or an agreement by,
the designee shall be binding on any lessee who is liable pursuant
to section 102(a) for obligations that are the subject of the notice
or agreement.
‘‘(f) RECORDS REQUIRED FOR DETERMINING COLLECTIONS.—
Records required pursuant to section 103 of this Act by the Secretary or any delegated State for the purpose of determining obligations due and compliance with any applicable mineral leasing law,
lease provision, regulation or order with respect to oil and gas
leases from Federal lands or the Outer Continental Shelf shall
be maintained for the same period of time during which a judicial
proceeding or demand may be commenced under subsection (b).
If a judicial proceeding or demand is timely commenced, the record
holder shall maintain such records until the final nonappealable
decision in such judicial proceeding is made, or with respect to

PUBLIC LAW 104–185—AUG. 13, 1996

110 STAT. 1709

that demand is rendered, unless the Secretary or the applicable
delegated State authorizes in writing an earlier release of the
requirement to maintain such records. Notwithstanding anything
herein to the contrary, under no circumstance shall a record holder
be required to maintain or produce any record relating to an obligation for any time period which is barred by the applicable limitation
in this section. In connection with any hearing, administrative
proceeding, inquiry, investigation, or audit by the Secretary or
a delegated State under this Act, the Secretary or the delegated
State shall minimize the submission of multiple or redundant
information and make a good faith effort to locate records previously
submitted by a lessee or a designee to the Secretary or the delegated
State, prior to requiring the lessee or the designee to provide
such records.
‘‘(g) TIMELY COLLECTIONS.—In order to most effectively utilize
resources available to the Secretary to maximize the collection
of oil and gas receipts from lease obligations to the Treasury within
the seven-year period of limitations, and consequently to maximize
the State share of such receipts, the Secretary should not perform
or require accounting, reporting, or audit activities if the Secretary
and the State concerned determine that the cost of conducting
or requiring the activity exceeds the expected amount to be collected
by the activity, based on the most current 12 months of activity.
This subsection shall not provide a defense to a demand or an
order to perform a restructured accounting. To the maximum extent
possible, the Secretary and delegated States shall reduce costs
to the United States Treasury and the States by discontinuing
requirements for unnecessary or duplicative data and other information, such as separate allowances and payor information, relating
to obligations due. If the Secretary and the State concerned determine that collection will result sooner, the Secretary or the
applicable delegated State may waive or forego interest in whole
or in part.
‘‘(h) APPEALS AND FINAL AGENCY ACTION.—
‘‘(1) 33-MONTH PERIOD.—Demands or orders issued by the
Secretary or a delegated State are subject to administrative
appeal in accordance with the regulations of the Secretary.
No State shall impose any conditions which would hinder a
lessee’s or its designee’s immediate appeal of an order to the
Secretary or the Secretary’s designee. The Secretary shall issue
a final decision in any administrative proceeding, including
any administrative proceedings pending on the date of enactment of this section, within 33 months from the date such
proceeding was commenced or 33 months from the date of
such enactment, whichever is later. The 33-month period may
be extended by any period of time agreed upon in writing
by the Secretary and the appellant.
‘‘(2) EFFECT OF FAILURE TO ISSUE DECISION.—If no such
decision has been issued by the Secretary within the 33-month
period referred to in paragraph (1)—
‘‘(A) the Secretary shall be deemed to have issued
and granted a decision in favor of the appellant as to
any nonmonetary obligation and any monetary obligation
the principal amount of which is less than $10,000; and
‘‘(B) the Secretary shall be deemed to have issued
a final decision in favor of the Secretary, which decision
shall be deemed to affirm those issues for which the agency

110 STAT. 1710

PUBLIC LAW 104–185—AUG. 13, 1996

rendered a decision prior to the end of such period, as
to any monetary obligation the principal amount of which
is $10,000 or more, and the appellant shall have a right
to judicial review of such deemed final decision in accordance with title 5 of the United States Code.
‘‘(i) COLLECTIONS OF DISPUTED AMOUNTS DUE.—To expedite
collections relating to disputed obligations due within the sevenyear period beginning on the date the obligation became due, the
parties shall hold not less than one settlement consultation and
the Secretary and the State concerned may take such action as
is appropriate to compromise and settle a disputed obligation,
including waiving or reducing interest and allowing offsetting of
obligations among leases.
‘‘(j) ENFORCEMENT OF A CLAIM FOR JUDICIAL REVIEW.—In the
event a demand subject to this section is properly and timely
commenced, the obligation which is the subject of the demand
may be enforced beyond the seven-year limitations period without
being barred by this statute of limitations. In the event a demand
subject to this section is properly and timely commenced, a judicial
proceeding challenging the final agency action with respect to such
demand shall be deemed timely so long as such judicial proceeding
is commenced within 180 days from receipt of notice by the lessee
or its designee of the final agency action.
‘‘(k) IMPLEMENTATION OF FINAL DECISION.—In the event a
judicial proceeding or demand subject to this section is timely
commenced and thereafter the limitation period in this section
lapses during the pendency of such proceeding, any party to such
proceeding shall not be barred from taking such action as is required
or necessary to implement a final unappealable judicial or administrative decision, including any action required or necessary to implement such decision by the recovery or recoupment of an underpayment or overpayment by means of refund or credit.
‘‘(l) STAY OF PAYMENT OBLIGATION PENDING REVIEW.—Any person ordered by the Secretary or a delegated State to pay any
obligation (other than an assessment) shall be entitled to a stay
of such payment without bond or other surety instrument pending
an administrative or judicial proceeding if the person periodically
demonstrates to the satisfaction of the Secretary that such person
is financially solvent or otherwise able to pay the obligation. In
the event the person is not able to demonstrate, the Secretary
may require a bond or other surety instrument satisfactory to
cover the obligation. Any person ordered by the Secretary or a
delegated State to pay an assessment shall be entitled to a stay
without bond or other surety instrument.’’.
(b) CLERICAL AMENDMENT.—The table of contents in section
1 of the Federal Oil and Gas Royalty Management Act of 1982
(30 U.S.C. 1701) is amended by inserting after the item relating
to section 114 the following new item:
‘‘Sec.

115.

Secretarial and delegated States’ actions and limitation periods.’’.

SEC. 5. ADJUSTMENT AND REFUNDS.

(a) IN GENERAL.—The Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1701 et seq.) is amended by inserting
after section 111 the following:

PUBLIC LAW 104–185—AUG. 13, 1996

110 STAT. 1711

‘‘SEC. 111A. ADJUSTMENTS AND REFUNDS.
A

‘‘(a) ADJUSTMENTS TO ROYALTIES PAID TO THE SECRETARY OR
DELEGATED STATE.—
‘‘(1) If, during the adjustment period, a lessee or its designee determines that an adjustment or refund request is necessary to correct an underpayment or overpayment of an obligation, the lessee or its designee shall make such adjustment
or request a refund within a reasonable period of time and
only during the adjustment period. The filing of a royalty
report which reflects the underpayment or overpayment of an
obligation shall constitute prior written notice to the Secretary
or the applicable delegated State of an adjustment.
‘‘(2)(A) For any adjustment, the lessee or its designee shall
calculate and report the interest due attributable to such adjustment at the same time the lessee or its designee adjusts the
principle amount of the subject obligation, except as provided
by subparagraph (B).
‘‘(B) In the case of a lessee or its designee who determines
that subparagraph (A) would impose a hardship, the Secretary
or such delegated State shall calculate the interest due and
notify the lessee or its designee within a reasonable time of
the amount of interest due, unless such lessee or its designee
elects to calculate and report interest in accordance with
subparagraph (A).
‘‘(3) An adjustment or a request for a refund for an obligation may be made after the adjustment period only upon written
notice to and approval by the Secretary or the applicable delegated State, as appropriate, during an audit of the period
which includes the production month for which the adjustment
is being made. If an overpayment is identified during an audit,
then the Secretary or the applicable delegated State, as appropriate, shall allow a credit or refund in the amount of the
overpayment.
‘‘(4) For purposes of this section, the adjustment period
for any obligation shall be the six-year period following the
date on which an obligation became due. The adjustment period
shall be suspended, tolled, extended, enlarged, or terminated
by the same actions as the limitation period in section 115.
‘‘(b) REFUNDS.—
‘‘(1) IN GENERAL.—A request for refund is sufficient if it—
‘‘(A) is made in writing to the Secretary and, for purposes of section 115, is specifically identified as a demand;
‘‘(B) identifies the person entitled to such refund;
‘‘(C) provides the Secretary information that reasonably
enables the Secretary to identify the overpayment for which
such refund is sought; and
‘‘(D) provides the reasons why the payment was an
overpayment.
‘‘(2) PAYMENT BY SECRETARY OF THE TREASURY.—The Secretary shall certify the amount of the refund to be paid under
paragraph (1) to the Secretary of the Treasury who shall make
such refund. Such refund shall be paid from amounts received
as current receipts from sales, bonuses, royalties (including
interest charges collected under this section) and rentals of
the public lands and the Outer Continental Shelf under the
provisions of the Mineral Leasing Act and the Outer Continental Shelf Lands Act, which are not payable to a State or

30 USC 1721a.

110 STAT. 1712

PUBLIC LAW 104–185—AUG. 13, 1996

the Reclamation Fund. The portion of any such refund attributable to any amounts previously disbursed to a State, the
Reclamation Fund, or any recipient prescribed by law shall
be deducted from the next disbursements to that recipient
made under the applicable law. Such amounts deducted from
subsequent disbursements shall be credited to miscellaneous
receipts in the Treasury.
‘‘(3) PAYMENT PERIOD.—A refund under this subsection
shall be paid or denied (with an explanation of the reasons
for the denial) within 120 days of the date on which the request
for refund is received by the Secretary. Such refund shall
be subject to later audit by the Secretary or the applicable
delegated State and subject to the provisions of this Act.
‘‘(4) PROHIBITION AGAINST REDUCTION OF REFUNDS OR CREDITS.—In no event shall the Secretary or any delegated State
directly or indirectly claim or offset any amount or amounts
against, or reduce any refund or credit (or interest accrued
thereon) by the amount of any obligation the enforcement of
which is barred by section 115 of this Act.’’.
(b) CLERICAL AMENDMENT.—The table of contents in section
1 of the Federal Oil and Gas Royalty Management Act of 1982
(30 U.S.C. 1701) is amended by inserting after the item relating
to section 111 the following new item:
‘‘Sec. 111A. Adjustments and refunds.’’.
SEC.

6.

ROYALTY TERMS
PENALTIES.

AND

CONDITIONS,

INTEREST,

AND

(a) LESSEE OR DESIGNEE INTEREST.—Section 111 of the Federal
Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1721)
is amended by adding after subsection (g) the following:
‘‘(h) Interest shall be allowed and paid or credited on any
overpayment, with such interest to accrue from the date such overpayment was made, at the rate obtained by applying the provisions
of subparagraphs (A) and (B) of section 6621(a)(1) of the Internal
Revenue Code of 1986, but determined without regard to the sentence following subparagraph (B) of section 6621(a)(1). Interest
which has accrued on any overpayment may be applied to reduce
an underpayment. This subsection applies to overpayments made
later than six months after the date of enactment of this subsection
or September 1, 1996, whichever is later. Such interest shall be
paid from amounts received as current receipts from sales, bonuses,
royalties (including interest charges collected under this section)
and rentals of the public lands and the Outer Continental Shelf
under the provisions of the Mineral Leasing Act, and the Outer
Continental Shelf Lands Act, which are not payable to a State
or the Reclamation Fund. The portion of any such interest payment
attributable to any amounts previously disbursed to a State, the
Reclamation Fund, or any other recipient designated by law shall
be deducted from the next disbursements to that recipient made
under the applicable law. Such amounts deducted from subsequent
disbursements shall be credited to miscellaneous receipts in the
Treasury.’’.
(b) LIMITATION ON INTEREST.—Section 111 of the Federal Oil
and Gas Royalty Management Act of 1982, as amended by subsection (a), is further amended by adding at the end the following:
‘‘(i) Upon a determination by the Secretary that an excessive
overpayment (based upon all obligations of a lessee or its designee

PUBLIC LAW 104–185—AUG. 13, 1996

110 STAT. 1713

for a given reporting month) was made for the sole purpose of
receiving interest, interest shall be paid on the excessive amount
of such overpayment. For purposes of this Act, an ‘excessive overpayment’ shall be the amount that any overpayment a lessee or
its designee pays for a given reporting month (excluding payments
for demands for obligations determined to be due as a result of
judicial or administrative proceedings or agreed to be paid pursuant
to settlement agreements) for the aggregate of all of its Federal
leases exceeds 10 percent of the total royalties paid that month
for those leases.’’.
(c) ESTIMATED PAYMENT.—Section 111 of the Federal Oil and
Gas Royalty Management Act of 1982 (30 U.S.C. 1721), as amended
by subsections (a) and (b), is further amended by adding at the
end the following:
‘‘(j) A lessee or its designee may make a payment for the
approximate amount of royalties (hereinafter in this subsection
‘estimated payment’) that would otherwise be due for such lease
by the rate royalties are due for that lease. When an estimated
payment is made, actual royalties are payable at the end of the
month following the month in which the estimated payment is
made. If the estimated payment was less than the amount of
actual royalties due, interest is owned on the underpaid amount.
If the estimated payment exceeds the actual royalties due, interest
is owned on the overpayment. If the lessee or its designee makes
a payment for such actual royalties, the lessee or its designee
may apply the estimated payment to future royalties. Any estimated
payment may be adjusted, recouped, or reinstated at any time
by the lessee or its designee.’’.
(d) VOLUME ALLOCATION OF OIL AND GAS PRODUCTION.—Section
111 of the Federal Oil and Gas Royalty Management Act of 1982
(30 U.S.C. 1721), as amended by subsections (a) through (c), is
amended by adding at the end the following:
‘‘(k)(1) Except as otherwise provided by this subsection—
‘‘(A) a lessee or its designee of a lease in a unit or
communitization agreement which contains only Federal leases
with the same royalty rate and funds distribution shall report
and pay royalties on oil and gas production for each production
month based on the actual volume of production sold by or
on behalf of that lessee;
‘‘(B) a lessee or its designee of a lease in any other unit
or communitization agreement shall report and pay royalties
on oil and gas production for each production month based
on the volume of oil and gas produced from such agreement
and allocated to the lease in accordance with the terms of
the agreement; and
‘‘(C) a lessee or its designee of a lease that is not contained
in a unit or communitization agreement shall report and pay
royalties on oil and gas production for each production month
based on the actual volume of production sold by or on behalf
of that lessee.
‘‘(2) This subsection applies only to requirements for reporting
and paying royalties. Nothing in this subsection is intended to
alter a lessee’s liability for royalties on oil or gas production based
on the share of production allocated to the lease in accordance
with the terms of the lease, a unit or communitization agreement,
or any other agreement.

110 STAT. 1714

PUBLIC LAW 104–185—AUG. 13, 1996

‘‘(3) For any unit or communitization agreement if all lessees
contractually agree to an alternative method of royalty reporting
and payment, the lessees may submit such alternative method
to the Secretary or the delegated State for approval and make
payments in accordance with such approved alternative method
so long as such alternative method does not reduce the amount
of the royalty obligation.
‘‘(4) The Secretary or the delegated State shall grant an exception from the reporting and payment requirements for marginal
properties by allowing for any calendar year or portion thereof
royalties to be paid each month based on the volume of production
sold. Interest shall not accrue on the difference for the entire
calendar year or portion thereof between the amount of oil and
gas actually sold and the share of production allocated to the
lease until the beginning of the month following such calendar
year or portion thereof. Any additional royalties dues or overpaid
royalties and associated interest shall be paid, refunded, or credited
within six months after the end of each calendar year in which
royalties are paid based on volumes of production sold. For the
purpose of this subsection, the term ‘marginal property’ means
a lease that produces on average the combined equivalent of less
than 15 barrels of oil per well per day or 90 thousand cubic feet
of gas per well per day, or a combination thereof, determined
by dividing the average daily production of crude oil and natural
gas from producing wells on such lease by the number of such
wells, unless the Secretary, together with the State concerned,
determines that a different production is more appropriate.
‘‘(5) Not later than two years after the date of the enactment
of this subsection, the Secretary shall issue any appropriate demand
for all outstanding royalty payment disputes regarding who is
required to report and pay royalties on production from units and
communitization agreements outstanding on the date of the enactment of this subsection, and collect royalty amounts owed on such
production.’’.
(e) PRODUCTION ALLOCATION.—Section 111 of the Federal Oil
and Gas Royalty Management Act of 1982 (30 U.S.C. 1721), as
amended by subsections (a) through (d), is amended by adding
at the end the following:
‘‘(l) The Secretary shall issue all determinations of allocations
of production for units and communitization agreements within
120 days of a request for determination. If the Secretary fails
to issue a determination within such 120-day period, the Secretary
shall waive interest due on obligations subject to the determination
until the end of the month following the month in which the
determination is made.’’.
(f) NEW ASSESSMENT TO ENCOURAGE PROPER ROYALTY PAYMENTS.—
(1) IN GENERAL.—The Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1721), as amended by section
4(a), is further amended by adding at the end the following:
30 USC 1725.

‘‘SEC. 116. ASSESSMENTS.

‘‘Beginning eighteen months after the date of enactment of
this section, to encourage proper royalty payment the Secretary
or the delegated State shall impose assessments on a person who
chronically submits erroneous reports under this Act. Assessments
under this Act may only be issued as provided for in this section.’’.

PUBLIC LAW 104–185—AUG. 13, 1996

110 STAT. 1715

(2) CLERICAL AMENDMENT.—The table of contents in section
1 of such Act (30 U.S.C. 1701) is amended by adding after
the item relating to section 115 the following new item:
‘‘Sec. 116. Assessments.’’.

(g) LIABILITY FOR ROYALTY PAYMENTS.—Section 102(a) of the
Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C.
1712(a)) is amended to read as follows:
‘‘(a) In order to increase receipts and achieve effective collections
of royalty and other payments, a lessee who is required to make
any royalty or other payment under a lease or under the mineral
leasing laws, shall make such payments in the time and manner
as may be specified by the Secretary or the applicable delegated
State. A lessee may designate a person to make all or part of
the payments due under a lease on the lessee’s behalf and shall
notify the Secretary or the applicable delegated State in writing
of such designation, in which event said designated person may,
in its own name, pay, offset or credit monies, make adjustments,
request and receive refunds and submit reports with respect to
payments required by the lessee. Notwithstanding any other provision of this Act to the contrary, a designee shall not be liable
for any payment obligation under the lease. The person owning
operating rights in a lease shall be primarily liable for its pro
rata share of payment obligations under the lease. If the person
owning the legal record title in a lease is other than the operating
rights owner, the person owning the legal record title shall be
secondarily liable for its pro rata share of such payment obligations
under the lease.’’.
(h) CLERICAL AMENDMENTS.—(1) The heading of section 111
of the Federal Oil and Gas Royalty management Act of 1982 (30
U.S.C. 1721) is amended to read as follows:
‘‘ROYALTY

TERMS AND CONDITIONS, INTEREST, AND PENALTIES’’.

(2) The item relating to section 111 in the table of contents
in section 1 of such Act (30 U.S.C. 1701) is amended to read
as follows:
‘‘Sec. 111. Royalty terms and conditions, interest, and penalties.’’.
SEC. 7. ALTERNATIVES FOR MARGINAL PROPERTIES.

(a) IN GENERAL.—The Federal Oil and Gas Royalty Management Act of 1982 (30 U.S.C. 1701 et seq.), as amended by section
6 of this Act, is further amended by adding at the end the following:
‘‘SEC. 117. ALTERNATIVES FOR MARGINAL PROPERTIES.

‘‘(a) DETERMINATION OF BEST INTERESTS OF STATE CONCERNED
AND THE UNITED STATES.—The Secretary and the State concerned,
acting in the best interests of the United States and the State
concerned to promote production, reduce administrative costs, and
increase net receipts to the United States and the States, shall
jointly determine, on a case by case basis, the amount of what
marginal production from a lease or leases or well or wells, or
parts thereof, shall be subject to a prepayment under subsection
(b) or regulatory relief under subsection (c). If the State concerned
does not consent, such prepayments or regulatory relief shall not
be made available under this section for such marginal production:
Provided, That if royalty payments from a lease or leases, or well
or wells are not shared with any State, such determination shall
be made solely by the Secretary.

30 USC 1726.

110 STAT. 1716

PUBLIC LAW 104–185—AUG. 13, 1996

‘‘(b) PREPAYMENT OF ROYALTY.—
‘‘(1) IN GENERAL.—Notwithstanding the provisions of any
lease to the contrary, for any lease or leases or well or wells
identified by the Secretary and the State concerned pursuant
to subsection (a), the Secretary is authorized to accept a prepayment for royalties in lieu of monthly royalty payments under
the lease for the remainder of the lease term if the affected
lessee so agrees. Any prepayment agreed to by the Secretary,
State concerned and lessee which is less than an average $500
per month in total royalties shall be effectuated under this
section not earlier than two years after the date of enactment
of this section and, any prepayment which is greater than
an average $500 per month in total royalties shall be effectuated under this section not earlier than three years after
the date of enactment of this section. The Secretary and the
State concerned may condition their acceptance of the prepayment authorized under this section on the lessee’s agreeing
to such terms and conditions as the Secretary and the State
concerned deem appropriate and consistent with the purposes
of this Act. Such terms may—
‘‘(A) provide for prepayment that does not result in
a loss of revenue to the United States in present value
terms;
‘‘(B) include provisions for receiving additional prepayments or royalties for developments in the lease or leases
or well or wells that deviate significantly from the assumptions and facts on which the valuation is determined; and
‘‘(C) require the lessee or it designee to provide such
periodic production reports as may be necessary to allow
the Secretary and the State concerned to monitor production for the purposes of subparagraph (B).
‘‘(2) STATE SHARE.—A prepayment under this section shall
be shared by the Secretary with any State or other recipient
to the same extent as any royalty payment for such lease.
‘‘(3) SATISFACTION OF OBLIGATION.—Except as may be provided in the terms and conditions established by the Secretary
under subsection (b), a lessee or its designee who makes a
prepayment under this section shall have satisfied in full the
lessee’s obligation to pay royalty on the production stream
sold from the lease or leases or well or wells.
‘‘(c) ALTERNATIVE ACCOUNTING AND AUDITING REQUIREMENTS.—
Within one year after the date of the enactment of this section,
the Secretary or the delegated State shall provide accounting,
reporting, and auditing relief that will encourage lessees to continue
to produce and develop properties subject to subsection (a): Provided, That such relief will only be available to lessees in a State
that concurs, which concurrence is not required if royalty payments
from the lease or leases or well or wells are not shared with
any State. Prior to granting such relief, the Secretary and, if appropriate, the State concerned shall agree that the type of marginal
wells and relief provided under this paragraph is in the best interest
of the United States and, if appropriate, the State concerned.’’.

PUBLIC LAW 104–185—AUG. 13, 1996

110 STAT. 1717

(b) CLERICAL AMENDMENT.—The table of contents in section
1 of such Act (30 U.S.C. 1701) is amended by adding after the
item relating to section 116 the following new item:
‘‘Sec. 117. Alternatives for marginal properties.’’.
SEC. 8. APPLICABILITY.

(a) FOGRMA.—With respect to Federal lands, sections 202
and 307 of the Federal Oil and Gas Royalty Management Act
of 1982 (30 U.S.C. 1732 and 1755), are no longer applicable. The
applicability of those sections to Indian leases is not affected.
(b) OCSLA.—Effective on the date of the enactment of this
Act, section 10 of the Outer Continental Shelf Lands Act (43 U.S.C.
1339) is repealed.

30 USC 1732
note.

SEC. 9. INDIAN LANDS.

30 USC 1701
note.

The amendments made by this Act shall not apply with respect
to Indian lands, and the provisions of the Federal Oil and Gas
Royalty Management Act of 1982 as in effect on the day before
the date of enactment of this Act shall continue to apply after
such date with respect to Indian lands.
SEC. 10. PRIVATE LANDS.

This Act shall not apply to any privately owned minerals.
SEC. 11. EFFECTIVE DATE.

Except as provided by section 115(h), section 111(h), section
111(k)(5), and section 117 of the Federal Oil and Gas Royalty
Management Act of 1982 (as added by this Act), this Act, and
the amendments made by this Act, shall apply with respect to
the production of oil and gas after the first day of the month
following the date of the enactment of this Act.
SEC. 12. SAVINGS CLAUSE.

Nothing in this Act shall be construed to give a State a property
right or interest in any Federal lease or land.
Approved August 13, 1996.

LEGISLATIVE HISTORY—H.R. 1975:
HOUSE REPORTS: No. 104–667 (Comm. on Resources).
CONGRESSIONAL RECORD, Vol. 142 (1996):
July 16, considered and passed House.
Aug. 2, considered and passed Senate.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 32 (1996):
Aug. 13, Presidential remarks and statement.

Æ

30 USC 1701
note.
30 USC 1701
note.

30 USC 1701
note.