30 U.S.C. § 223 — Leases; amount and survey of land; term of

Page 72 TITLE 30—MINERAL LANDS AND MINING §§ 221 to 222i moval of the mineral deposits, but this provision shall not be applicable to national forest lands. (Feb. 25, 1920, ch. 85, § 12, 41 Stat. 441; June 3, 1948, ch. 379, § 5, 62 Stat. 291; Pub. L. 86–391, § 1(b), Mar. 18, 1960, 74 Stat. 8.) Editorial Notes AMENDMENTS 1960—Pub. L. 86–391 substituted ‘‘lease or permit’’ for ‘‘lease’’ in two places. 1948—Act June 3, 1948, increased lands to be used from 40 to 80 acres, excepted national forest lands from its provisions, and substituted ‘‘The holder of any lease issued under the provisions of sections 211 to 214 of this title’’, ‘‘public lands not a part of his lease’’, and ‘‘or convenient for the extraction’’ for ‘‘Any qualified ap- plicant to whom the Secretary of the Interior may grant a lease to develop and extract phosphates, or phosphate rock, under the provisions of this chapter’’, ‘‘lands’’, and ‘‘for the proper prospecting for or develop- ment, extraction’’, respectively. SUBCHAPTER IV—OIL AND GAS §§ 221 to 222i. Omitted Editorial Notes CODIFICATION Sections expired by their own terms. They provided as follows: Section 221, acts Feb. 25, 1920, ch. 85, § 13, 41 Stat. 441; Aug. 21, 1935, ch. 599, § 1, 49 Stat. 674, provided for prospecting permits, their terms and conditions, exten- sion, location of lands, marking land, notice of applica- tion for permits, permits in Alaska, exchanging per- mits for leases, and limited extensions to Dec. 31, 1938. Section 222, act Jan. 11, 1922, ch. 28, 42 Stat. 356, au- thorized Secretary of the Interior to extend time for drilling not to exceed three years. Section 222a, act Apr. 5, 1926, ch. 107, § 1, 44 Stat. 236, authorized a further extension of two years for drilling. Section 222b, act Apr. 5, 1926, ch. 107, § 2, 44 Stat. 236, provided for extension of expired permits for a period of two years from Apr. 5, 1926. Section 222c, act Mar. 9, 1928, ch. 168, § 1, 45 Stat. 252, authorized a two year extension for permits. Section 222d, act Mar. 9, 1928, ch. 168, § 2, 45 Stat. 252, authorized a two year extension of permits already ex- pired. Section 222e, act Jan. 23, 1930, ch. 25, § 1, 46 Stat. 58, provided that permits issued or extended for three years might be further for three years. Section 222f, act Jan. 23, 1930, ch. 25, § 2, 46 Stat. 59, provided for an extension of permits already expired for a period of three years from Jan. 23, 1930. Section 222g, act June 30, 1932, ch. 319, § 1, 47 Stat. 445, provided for a further extension of three years. Section 222h, act June 30, 1932, ch. 319, § 2, 47 Stat. 446, authorized an extension, for permits already expired, of three years from June 30, 1932. Section 222i, acts Aug. 26, 1937, ch. 828, 50 Stat. 842; Aug. 11, 1939, ch. 716, 53 Stat. 1418, provided for final ex- tension of prospecting permits, outstanding on Dec. 31, 1937, to Dec. 31, 1939. Statutory Notes and Related Subsidiaries COMPROMISE OF CLAIMS FOR ACCRUED RENTAL Act July 29, 1942, ch. 534, § 2, 56 Stat. 726, authorized Secretary of the Interior to make a compromise settle- ment of any claim for accrued rental under a lease issued pursuant to the provisions of section 221 of this title, in any case in which he determined that it would be financially beneficial to the United States to make such a compromise settlement or in any case in which he determined that collection of the full amount of such accrued rental from the lessee was inadvisable be- cause of the lessee’s financial resources being limited. § 223. Leases; amount and survey of land; term of lease; royalties and annual rental 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 se- lected by the permittee, shall be in reasonably compact form and, if surveyed, to be described by the legal subdivisions of the public-land sur- veys; if unsurveyed, to be surveyed by the Gov- ernment 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 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 produc- tion 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 226 of this title for leases issued prior to August 21, 1935. The permittee shall also be entitled to a pref- erence right to a lease for the remainder of the land in his prospecting permit at a royalty of not less than 121⁄2 per centum in amount or value of the production nor more than the royalty rate prescribed by regulation in force on Janu- ary 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 226 of this title the royalty to be determined by competitive bidding or fixed by such other method as the Secretary may by regulations prescribe: Provided further, That the Secretary shall have the right to reject any or all bids. (Feb. 25, 1920, ch. 85, § 14, 41 Stat. 442; Aug. 21, 1935, ch. 599, § 1, 49 Stat. 676.) Editorial Notes AMENDMENTS 1935—Act Aug. 21, 1935, inserted ‘‘reasonably’’ before ‘‘compact form’’ and substituted ‘‘and shall continue in force otherwise as prescribed in section 226 of this title for leases issued prior to August 21, 1935’’ and ‘‘oil or gas leases issued under section 226 of this title’’ for ‘‘with the right of renewal as prescribed in section 226 of this title’’ and ‘‘oil or gas leases in this chapter’’, re- spectively. Statutory Notes and Related Subsidiaries LIMITATION OF ROYALTY ON DISCOVERIES DURING WAR PERIOD Act Dec. 24, 1942, ch. 812, 56 Stat. 1080, limiting roy- alty obligation of oil or gas lessee who drills well re- Page 73 TITLE 30—MINERAL LANDS AND MINING § 226 sulting in discovery of new deposit on public domain during the national emergency was repealed by Joint Res. July 25, 1947, ch. 327, § 1, 61 Stat. 449. OUTER CONTINENTAL SHELF; LEASES Grant by Secretary of the Interior of oil, gas, and other mineral leases on submerged lands of outer Con- tinental Shelf, see section 1331 et seq. of Title 43, Public Lands. § 223a. Repealed. Aug. 8, 1946, ch. 916, § 14, 60 Stat. 958 Section, act Aug. 21, 1935, ch. 599, § 2, 49 Stat. 679, re- lated to new oil and gas leases in lieu of old. Statutory Notes and Related Subsidiaries SAVINGS PROVISION See note set out under section 181 of this title. § 224. Payments for oil or gas taken prior to ap- plication for lease Until the permittee shall apply for lease to the one quarter of the permit area heretofore pro- vided for he shall pay to the United States 20 per centum of the gross value of all oil or gas se- cured by him from the lands embraced within his permit and sold or otherwise disposed of or held by him for sale or other disposition. (Feb. 25, 1920, ch. 85, § 15, 41 Stat. 442.) § 225. Condition of lease, forfeiture for violation All leases of lands containing oil or gas, made or issued under the provisions of this chapter, shall be subject to the condition that the lessee will, in conducting his explorations and mining operations, use all reasonable precautions to prevent waste of oil or gas developed in the land, or the entrance of water through wells drilled by him to the oil sands or oil-bearing strata, to the destruction or injury of the oil deposits. Viola- tions of the provisions of this section shall con- stitute grounds for the forfeiture of the lease, to be enforced as provided in this chapter. (Feb. 25, 1920, ch. 85, § 16, 41 Stat. 443; Aug. 8, 1946, ch. 916, § 2, 60 Stat. 951.) Editorial Notes AMENDMENTS 1946—Act Aug. 8, 1946, omitted condition that no wells should be drilled within two hundred feet of boundaries of leased lands. Statutory Notes and Related Subsidiaries SAVINGS PROVISION See note set out under section 181 of this title. OUTER CONTINENTAL SHELF; TERMS AND CONDITIONS OF LEASES Terms and conditions of mineral leases on submerged lands of outer Continental Shelf, see section 1337 of Title 43, Public Lands. § 226. Lease of oil and gas lands (a) Authority of Secretary All lands subject to disposition under this chapter which are known or believed to contain oil or gas deposits may be leased by the Sec- retary. (b) Lands within known geologic structure of a producing oil or gas field; lands within spe- cial tar sand areas; competitive bidding; roy- alties (1)(A) All lands to be leased which are not sub- ject to leasing under paragraph (2) shall be leased as provided in this paragraph to the high- est responsible qualified bidder 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, except as provided in subparagraph (C). Lease sales shall be held for each State where eligible lands are available at least quarterly and more frequently if the Secretary of the Interior deter- mines such sales are necessary. A lease shall be conditioned upon the payment of a royalty at a rate of not less than 162⁄3 percent in amount or value of the production removed or sold from the lease or, in the case of a lease issued during the 10-year period beginning on August 16, 2022, 162⁄3 percent in amount or value of the produc- tion removed or sold from the lease. The Sec- retary shall accept the highest bid from a re- sponsible 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 bid- der 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 accept- able bid shall be rejected. (B) The national minimum acceptable bid shall be $10 per acre during the 10-year period beginning on August 16, 2022. Thereafter, the Secretary, subject to paragraph (2)(B), may es- tablish by regulation a higher national min- imum acceptable bid for all leases based upon a finding that such action is necessary: (i) to en- hance 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 Sec- retary shall notify the Committee on Natural Resources of the United States House of Rep- resentatives and the Committee on Energy and Natural Resources of the United 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 4332(2)(C) of title 42. (C) In order to diversify and expand the Na- tion’s onshore leasing program to ensure the best return to the Federal taxpayer, reduce fraud, and secure the leasing process, the Sec- retary may conduct onshore lease sales through Internet-based bidding methods. Each individual Internet-based lease sale shall conclude within 7 days. (2)(A)(i) If the lands to be leased are within a special tar sand area, they shall be leased to the highest responsible qualified bidder by competi- tive bidding under general regulations in units of not more than 5,760 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.