Sec. 107. Royalty
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Production of hardrock minerals, mineral concentrates, or products derived from hardrock minerals on Federal land under an operations permit from which valuable hardrock minerals were produced in commercial quantities before the effective date of this Act, other than production under a small miner’s lease, shall be subject to a royalty established by the Secretary of not less than 8 percent of the gross value of such production. Production of hardrock minerals, mineral concentrates, or products derived from hardrock minerals on Federal land added through a plan modification to an operations permit that is submitted after the effective date of this Act shall be subject to a royalty established by the Secretary for such lease of not less than 12.5 percent of the gross value such production.
The claim holder or lessee, or any operator to whom the claim holder or lessee has assigned the obligation to make royalty payments under the claim or lease and any person who controls such claim or lease holder or operator, shall be liable for payment of such royalties. Of the revenues collected under this title, including rents, royalties, claim maintenance fees, interest charges, fines, and penalties— 25 percent shall be paid to the State within the boundaries of which the leased, licensed, or claimed lands, or operations subject to such interest charges, fines, or penalties are or were located; and the remainder shall be made available to carry out, to remain available until expended without fiscal year limitation, the Abandoned Hardrock Mine Reclamation Program.
The Secretary shall issue regulations regarding the time and manner in which a person who is required to make a royalty payment under this section shall— make such payment; and notify the Secretary of any assignment that such person may have made of the obligation to make any royalty or other payment under a mining claim or lease under this title. Any person paying royalties under this section shall file a written instrument, together with the first royalty payment, affirming that such person is responsible for making proper payments for all amounts due for all time periods for which such person has a payment responsibility.
Such responsibility for the periods referred to in paragraph
(2)shall include any and all additional amounts billed by the Secretary and determined to be due by final agency or judicial action. Any person liable for royalty payments under this section who assigns any payment obligation shall remain jointly and severally liable for such royalty payments. A person conducting mineral activities shall— develop and comply with the site security provisions in the operations permit designed to protect from theft the hardrock minerals, concentrates, or products derived therefrom that are produced or stored on the area subject to a mining claim or lease, and such provisions shall conform with such minimum standards as the Secretary may issue by regulation, taking into account the variety of circumstances on areas subject to mining claims and leases; and not later than the fifth business day after production begins anywhere on an area subject to a mining claim or lease, or production resumes after more than 90 days after production was suspended, notify the Secretary, in the manner prescribed by the Secretary, of the date on which such production has begun or resumed. The Secretary may by regulation require any person engaged in transporting a hardrock mineral, concentrate, or product derived therefrom to carry on his or her person, in his or her vehicle, or in his or her immediate control, documentation showing, at a minimum, the amount, origin, and intended destination of the hardrock mineral, concentrate, or product derived therefrom in such circumstances as the Secretary determines appropriate. A claim holder or lessee, operator, or other person directly involved in developing, producing, processing, transporting, purchasing, or selling hardrock minerals, concentrates, or products derived therefrom, subject to this Act, through the point of royalty computation shall establish and maintain any records, make any reports, and provide any information that the Secretary may reasonably require for the purposes of implementing this section or determining compliance with regulations or orders under this section. Records described in subparagraph
(A)shall include periodic reports, records, documents, and other data. Reports described in subparagraph
(A)may include pertinent technical and financial data relating to the quantity, quality, composition volume, weight, and assay of all minerals extracted from the mining claim or lease. Upon the request of any officer or employee duly designated by the Secretary to conduct an audit or investigation pursuant to this section, the appropriate records, reports, or information that may be required by this section shall be made available for inspection and duplication by such officer or employee. Failure by a claim holder or lessee, operator, or other person referred to in paragraph (1)(A) to cooperate with an audit or investigation under paragraph (2), provide data required by the Secretary, or grant access to information may, at the discretion of the Secretary, result in involuntary forfeiture of the claim or lease. Records required by the Secretary under this section shall be maintained for 7 years after release of financial assurance under section 306 unless the Secretary notifies the operator that the Secretary has initiated an audit or investigation involving such records and that such records must be maintained for a longer period. In any case when an audit or investigation is underway, records shall be maintained until the Secretary releases the operator of the obligation to maintain such records. The Secretary is authorized to conduct such audits of all claim holders or lessees, operators, transporters, purchasers, processors, or other persons directly or indirectly involved in the production or sale of minerals covered by this Act, as the Secretary determines necessary for the purposes of ensuring compliance with the requirements of this section. For purposes of performing such audits, the Secretary shall, at reasonable times and upon request, have access to, and may copy, all books, papers, and other documents that relate to compliance with any provision of this section by any person. The Secretary is authorized to enter into cooperative agreements with the Secretary of Agriculture to share information concerning the royalty management of hardrock minerals, concentrates, or products derived therefrom to carry out inspection, auditing, investigation, or enforcement (not including the collection of royalties, civil or criminal penalties, or other payments) activities under this section, and to carry out any other activity described in this section. Except as provided in paragraph (3), and pursuant to a cooperative agreement entered into under paragraph (1), the Secretary of Agriculture shall, upon request, have access to all royalty accounting information in the possession of the Secretary with respect to the production, removal, or sale of hardrock minerals, concentrates, or products derived therefrom from claims or leases on land open to mineral exploration and production under this Act. Trade secrets, proprietary information, and other confidential information protected from disclosure under section 552 of title 5, United States Code, shall be made available by the Secretary to other Federal agencies as necessary to ensure compliance with this Act and other Federal laws. The Secretary, the Secretary of Agriculture, and other Federal officials shall ensure that the information described in subparagraph
(A)is provided protection in accordance with the requirements of that section. In the case of mining claims or leases where royalty payments are not received by the Secretary on the date that such payments are due, the Secretary shall charge interest on such underpayments at the same interest rate as the rate applicable under section 6621(a)(2) of the Internal Revenue Code of 1986. In the case of an underpayment, interest shall be computed and charged only on the amount of the deficiency and not on the total amount. If there is any underreporting of royalty owed on production from a claim or lease for any production month by any person liable for royalty payments under this section, the Secretary shall assess a penalty of not more than 25 percent of the amount of the underreporting. The Secretary may waive or reduce the assessment under paragraph
(2)if the person liable for royalty payments under this section corrects the underreporting before the later of— the date such person receives notice from the Secretary that an underreporting may have occurred; and the date that is 90 days after the effective date of this Act. The Secretary shall waive any portion of an assessment under paragraph
(2)attributable to that portion of the underreporting for which the person responsible for paying the royalty demonstrates that such person— had written authorization from the Secretary to report royalty on the value of the production on the basis on which it was reported; had substantial authority for reporting royalty on the value of the production on the basis on which it was reported; previously had notified the Secretary, in such manner as the Secretary may by regulation issue, of relevant reasons or facts affecting the royalty treatment of specific production which led to the underreporting; or meets any other exception which the Secretary may, by regulation, establish. All penalties collected under this subsection shall be shall be made available to carry out, to remain available until expended without fiscal year limitation, the Abandoned Hardrock Mine Reclamation Program. In this subsection, the term underreporting means the difference between the royalty on the value of the production that should have been reported and the royalty on the value of the production which was reported, if the value that should have been reported is greater than the value that was reported. Each person liable for royalty payments under this section shall be jointly and severally liable for royalty on all hardrock minerals, concentrates, or products derived therefrom that are lost or wasted from a mining claim or lease if such loss or waste is due to negligence on the part of any person or due to the failure to comply with this section. Any person who fails to comply with the requirements of this section shall be liable for a civil penalty under section 109 of the Federal Oil and Gas Royalty Management Act of 1982 ( 30 U.S.C. 1719 ) to the same extent as if the claim or lease maintained in compliance with this Act were a lease under such Act. In this section, for any hardrock mineral, the term gross income from mining has the meaning given the term gross income in section 613(c) of the Internal Revenue Code of 1986. Royalties under this Act shall take effect with respect to the production of hardrock minerals after the effective date of this Act, but any royalty payments attributable to production during the first 12 calendar months after the effective date of this Act shall be payable at the expiration of such 12-month period.
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