Chapter 85. To promote the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain
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CHAP. 85.— An Act To promote the mining of coal, phosphate, oil, oil shale, gas, and sodium on the public domain. February 25, 1920. [[S. 2775](/us/bill/66/s/2775).] [[Public, No. 146](/us/pl/66/146).] *Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, * That deposits of coal, phosphate,Public lands.Nonmetallic mineral deposits on.Disposal of, to citizens, etc.Lands excluded.Vol. 36, p. 961. sodium, oil, oil shale, or gas, and lands containing such deposits owned by the United States, including those in national forests, but excluding lands acquired under the Act known as the Appa-438lachian Forest Act, approved March 1, 1911 (Thirty-sixth Statutes, page 961), and those in national parks, and in lands withdrawn or reserved for military or naval uses or purposes, except as hereinafter provided, shall be subject to disposition in the form and manner provided by this Act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 any Coal, etc., to municipalities.association of such persons, or to any corporation organized under the laws of the United States, or of any State or Territory thereof, *Provisos*.Helium production reserved.and in the case of coal, oil, oil shale, or gas, to municipalities: *Provided*, That the United States reserves the right to extract helium from all gas produced from lands permitted, 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:
Not to delay gas delivery.*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 Foreign interests restricted.thereof: *And provided further*, That 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 by stock ownership, stock holding, or stock control, own any interest in any lease acquired under the provisions of this Act. coal.Coal lands.
Sec. 2. Division of, into leasing tracts. 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 unclassified, Alaska excluded.Vol. 38, p. 741.owned by the United States, outside of 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 Offer to qualified applicants for leasing.in any one leasing tract, and thereafter the Secretary 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 *Provisos*.Rights of present claimants.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 and recognize equitable rights of such occupants or claimants: *Provided further*,Prospecting permits for undeveloped lands.
That 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 permits Lease on discovery.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*,Public notice to be given.
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*,Limitation on leases to railroads. That no company or corporation operating a common carrier railroad shall be given or hold a permit or lease under the provisions 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 company or corporation shall receive or hold more than one permit or lease for each two hundred miles of its railroad line within the State in which said property is situated, exclusive of 439spurs 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 precludeShort line roads. such a railroad of less than two hundred miles in length from securing and holding one permit or lease hereunder.
Sec. 3. That any person, association, or corporation holding aAdditional contiguous lands allowed lessees. lease of coal lands or coal deposits under this Act may, with the approval of the Secretary of the Interior, upon a finding by him that it will be for the advantage of the lessee and the United States, secure modifications of his or its original lease by including additional coal lands or coal deposits contiguous to those embraced in such lease, but in no event shall the total area embraced in suchLimit. modified lease exceed in the aggregate two thousand five hundred and sixty acres.
Sec. 4. That upon satisfactory showing by any lessee to the SecretaryAdditional tracts on exhaustion of deposits. of the Interior that all of the workable deposits of coal within a tract covered by his or its lease will be exhausted, worked out, or removed within three years thereafter, the Secretary of the Interior may, within his discretion, lease to such lessee an additional tract of land or coal deposits, which, including the coal area remaining in the existing lease, shall not exceed two thousand five hundred and sixtyLimit, etc. acres, through the same procedure 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,Consolidation permitted leaseholders. the public interest will be subserved thereby, lessees holding under lease areas not exceeding the maximum permitted under this Act may consolidate their leases through the surrender of the original leases 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 thousandOperation of noncontiguous coal or phosphate tracts. five hundred and sixty acres and subject to lease hereunder do not exist as contiguous areas, the Secretary of the Interior is authorized, if, in his opinion the interests of the public and of the lessee 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 for the privilege of mining or extracting the coal inRoyalties payable to be specified in lease. the lands covered by the lease the lessee shall pay to the United States such royalties as may be specified in the lease, which shall be fixed in advance of offering the same, and which shall not be less than 5 cents per ton of two thousand pounds, due and payable at the end of each third month succeeding that of the extraction of the coal from the mine, and an annual rental, payable at the date of such lease andAnnual rental. 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, not 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 continuanceCredited against royalties. 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 periods upon condition of diligent developmentPeriod indeterminate.Conditions. and continued operation of the mine or mines, except when such 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 theReadjustment of terms. Secretary of the Interior may determine, unless otherwise provided by law at the time of the expiration of such periods: *Provided*, That*Provisos*.Annual advance payment in lieu of continuous operation. the Secretary of the Interior may, if in his judgment the public inter-440est will be subserved thereby, in lieu of the provision 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 Suspension of operations, to avert loss.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 except at a loss.
Sec. 8. Limited licenses for mining for domestic uses, without royality. 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 public lands without payment of royalty for the coal mined or the land occupied, on such conditions not inconsistent with this Act *Provisos*.Corporations excluded.as in his opinion will safeguard the public interests: *Provided*, That Areas to municipalities for household use without profit.this privilege shall not extend to any corporations: *Provided further*, That in the case of municipal corporations the Secretary of the Interior may issue 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 municipality of one hundred and fifty thousand population or more, the land to be selected within the State wherein the 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 Allowed holders of other leases.use: *And provided further*, That the acquisition or holding of a lease under the preceding sections of this Act shall be no bar to the holding of such tract or operation of such mine under said limited license. phosphates.Phosphate deposits.
Sec. 9. Leases authorized of lands containing. That the Secretary of the Interior is hereby authorized to lease to any 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, through advertisement, competitive bidding, or such other methods as the Secretary of the Interior may by general regulation adopt. Sec. 10. Extent of area. That each lease shall be for not to exceed two thousand Payment for surveys.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 rules and 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 expense 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 *Proviso*.Form of holding.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. Royalties to be specified in the lease. That for the privilege of mining or extracting the phosphates or phosphate rock covered by the lease the lessee shall pay to 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 value of the output of phosphates or phosphate rock at the mine, Amount on output.due and payable at the end of each third month succeeding that of 441the sale or other disposition of the phosphates or phosphate rock, and an annual rental payable at the date of such lease and annuallyAnnual rental. 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 for the first year thereafter, 50 cents per acre for 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 anyRental credited against royalties. year shall be credited against the royalties as they accrue for that year.
Leases shall be for indeterminate periods upon condition of aPeriod indeterminate.Conditions. minimum annual production, except when 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 shall be made as the Secretary of the Interior shall determine unless otherwise provided by law at the time of the expiration of such periods: *Provided*, That the Secretary of the Interior*Proviso*.Temporary suspension of operations to avert loss. 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 any qualified applicant to whom the Secretary ofSurface lands for development works, etc., allowed. 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 of 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 prospectmg for or development, extraction, treatment, and removal of such mineral deposits. oil and gas.Oil and gas deposits.
Sec. 13. That the Secretary of the Interior is hereby authorized,Exclusive prospecting permits for, 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 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 conditionNot within known producing fields. 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 ofDrilling conditions. not less than five hundred feet each, unless valuable deposits of oil or gas shall be sooner discovered, and 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.
The Secretary of the Interior may, if heTime extension of permits. 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 inLocation.On surveyed lands. any such application and permit are surveyed or unsurveyed the applicant shall, prior to filing his application for permit, locate such lands in a reasonably compact form and according to the legal subdivisions of the public land surveys if the land be surveyed; and inNotice, etc., of application for unsurveyed lands. an approximately square or rectangular tract if the land fie an unsurveyed 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, 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 442name 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 Issue of permit.and permanent monuments as will reasonably identify the land, 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.
Corner marks, etc., on reserved tracts.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 on the ground, and shall post in a conspicuous place upon the lands a notice that such permit has been granted and a *Provisos*.Drilling periods, etc., in Alaska.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 date 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 Preference to first locators.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. Lease to permittee on discovery.Limit. 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 *Provisos*.Minimum.in the prospecting permit: *Provided*, That the permittee shall be granted a lease for as much as one hundred and sixty acres of said Selection of surveyed land.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 subdivisions of the public-land If unsurveyed, applicant to pay for surveying.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 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 Term, royalty, and rental.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 Renewal.*Post*, p. 443.Preference for remainder of prospected area.Minimum royalty, etc.rental of $1 per acre, 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 1212 per centum in amount or value of the production, and under such other conditions as are fixed for oil or gas leases in this Act, the royalty to be determined by competitive bidding or fixed by such other method *Proviso*.Bidding condition.as the Secretary may by regulations prescribe: *Provided*, That the Secretary shall have the right to reject any or all bids.
Sec. 15. Payment for product secured before applying for lease. That until the permittee shall apply for lease to the one quarter of the permit area heretofore provided for he shall pay to the United States 20 per centum of the gross value of all oil or gas 443secured by him from the lands embraced within his permit and sold or otherwise disposed of or held by him for sale or other disposition. Sec. 16. That all permits and leases of lands containing oil or gas,Drilling restrictions. 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 sectionForfeiture for violations. shall constitute grounds for the forfeiture of the permit or lease, to be enforced through appropriate proceedings in courts of competent j mis diction. Sec. 17. That all unappropriated deposits of oil or gas situatedLeases of unappropriated deposits in known producing fields. within the known geologic structure of a producing oil or gas field and the unentered lands containing the same, not subject to preferential Ibase, may be leased by the Secretary of the Interior to theCompetitive bidding. 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 twoAreas limited and one-half times their width, such leases to be conditioned upon the payment by the lessee of such bonus as may be accepted and of suchPayment of bonus, royalties, and rental. royalty as may be fixed in the lease, which shall not be less than 1212 per centum in amount or value of the production, and the payment m 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 preferentialPeriod of leases; renewals. 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 provided by law at the time of the expiration of such, periods. Whenever the average dailyReduction of royalty for small production. 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 the lease.
The provisions of thisApplicable to all leases. paragraph, shall apply to all oil and gas leases made under this Act. Sec. 18. That upon relinquishment to the United States, filed inWithdrawn oil or gas lands.Leases, on surrender of rights, etc., by claimants under mining laws having producing wells. the General Land Office within six months after the approval of this Act, of all right, title, and interest 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 bearing 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 navalPayment for oil produced. petroleum reserve, and upon payment as royalty to the United States of an amount equal to the value at the time of production of one-eighth, of all the oil or gas already produced except oil or gas used for production purposes on the claim, or unavoidably lost, from 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 entitledPeriod of lease; royalty. to a lease thereon from the United States for a period of twenty years, at a royalty of not less than 1212 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 not more than one-half*Proviso*.Area limited to one claimant. 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 444this section when the area of such geologic oil structure exceeds Selection allowed.six hundred and forty acres.
Any claimant or 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. Regulations, etc., to be prescribed.All such leases shall be made and the amount of royalty to be paid for oil and gas produced, except oil or gas used for production purposes on the claim, or unavoidably lost, after the execution of such lease shall be fixed by the Secretary of the Interior under *Provisos*.Naval petroleum reserve leasing restrictions.appropriate rules and regulations: *Provided, however*, That as to all like claims situate within any naval petroleum reserve 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 Lease of remainder of claim.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 Additional drilling permitted.have a preference right to such lease: *And provided further*, That he may permit the drilling of additional wells by the claimant or his successor within the limited area of six hundred and sixty feet theretofore provided for upon such terms and conditions as he may prescribe.
Benefits barred by fraud.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. Settlement of pending oil land suits on acceptance of leases.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 Vol. 38, p. 708.Vol. 36, p. 1015.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 shall have effected an actual discovery of oil or gas on the public lands of the United States, or their successors in interest,’ approved March 2, 1911,” approved August 25, Impounded moneys to be paid.Conflicting claimants.Effect of leases.1914 (Thirty-eighth Statutes at Large, page 708), shall be paid over to the parties entitled thereto.
In case of conflicting claimants for leases 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 leases hereunder shall inure to the benefit of the claimant and all persons claiming through or under him by lease, contract, or otherwise, as their interests may appear, subject, however, to the same limitation as to area and acreage as is provided for claimant in this *Provisos*.Restriction on interests acquired from claimants holding more than maximum area.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 Exception.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 to the exchange: *Provided further*,Area restricted.
That no lease or leases 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. Compromise of existing placer claims. That whenever the validity of any gas or petroleum placer claim under preexisting law to land embraced in the Executive 445order of withdrawal issued September 27, 1909, has been or may hereafter be drawn in question on behalf of the United States in any departmental or judicial proceedings, the President is hereby 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 carriedTerms and conditions. out by an exchange or division of land or division of the proceeds of operation.
Sec. 19. That any person who on October 1, 1919, was a bona fideOil or gas lands not withdrawn.Prospecting permits to valid claimants not making discovery. 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 benefitPrior work required. of such locations an amount equal in the aggregate of $250 for each location if application therefor 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 heretofore made such discovery, he shall be entitled to a leaseLease if discovery made. thereon under such terms as the Secretary of the Interior may prescribe unless otherwise provided for in section 18 hereof: *Provided*,*Provisos*.Royalty, if in producing fields.
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 1212 per centum of all the oil or gas produced except oil or gas used for production purposes on the claim, or unavoidably lost: *Provided, however*, That the provisions of thisNaval lands excluded. section shall not apply to lands reserved for the use of the Navy: *Provided, however*, That no claimant for a permit or lease who hasBenefits barred by fraud. been guilty of any fraud or who had knowledge or reasonable grounds to know of any fraud, or who has not acted honestly and m good faith, shall be entitled to any of the benefits of this section.
All permits or leases hereunder shall inure to the benefit of thePersons entitled to permits. claimant and all persons claiming through or under him by lease, contract, or otherwise, as their interests may appear. Sec. 20. In the case of lands bona fide entered as agricultural,Agricultural entrymen on reserved lands.Preference right to, for permit and lease, on discovery. 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 was 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 greaterCombinations permitted. 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 makingRoyalties. joint application.
Leases executed under this section and embracing only lands so entered shall provide for the payment of a royalty of not less than 1212 per centum as to such areas within the permit as may not be included within the discovery lease to which the permittee*Ante*, p. 442. is entitled under section 14 hereof. oil shale.Oil shale deposits. Sec. 21. That the Secretary of the Interior is hereby authorized toLeases authorized of lands containing. 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 adjacent thereto, as may be required for the extraction and reduction of the leased minerals, under such rules and regulations, not inconsistent with this 446Area limited.Act, as he may prescribe; that no lease hereunder shall exceed five thousand one hundred and twenty acres of land, to be described by the legal subdivisions of the public-land surveys, or if unsurveyed, to be surveyed by the United States, at the expense of the applicant, in accordance with regulations to be prescribed by the Secretary of Period and conditions of leases.the Interior.
Leases may be for indeterminate periods, upon such conditions as may be imposed by the Secretary of the Interior, including covenants relative to methods of mining, prevention of waste, and Royalties and rentals.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 United 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 *Provisos*.Discretionary waiving of royalties.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 Leases to claimants relinquishing former rights.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, 1919, shall, upon the relinquishment of such claim, be entitled to a lease under the provisions of this section for such area of the land relinquished as shall not exceed the maximum area authorized by this section to be leased to an individual or corporation: *Provided, however*,Benefits barred by fraud.
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, or who has not acted honestly and in good faith, shall be entitled to any Only one lease to any person, etc.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.Alaska oil deposits. Sec. 22. Prospecting permits to valid mining claimants not discovering oil or gas.
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 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 Former application to be relinquished.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 Number of permits allowed.of application for patent, to a prospecting permit or permits, lease or leases, under this Act covering such lands, not exceeding five permits or leases in number and not exceeding an aggregate of one thousand *Provisos*.Royalties, rentals, etc.two hundred and eighty acres in each: *Provided*, That leases in Alaska under this Act whether as a result of prospecting permits or otherwise 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*,Discretionary waiving of royalties.
That for the purpose of encouraging the production of petroleum products in Alaska the Secretary may, in his discretion, waive the payment of any rental or royalty not exceeding the first five years of any lease. Benefits barred by fraud.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. 447 sodium.Sodium deposits.
Sec. 23. That the Secretary of the Interior is hereby authorizedProspecting permits allowed for. 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 water, and accumulated by concentration, in lands belonging to the United States for a period of not exceeding two years: *Provided*,*Provisos*.Area limited.
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 this section shallLands excluded. not apply to lands in San Bernardino County, California. Sec. 24. That upon showing to the satisfaction of the Secretary ofLease to permittee of one-half of area in which discovery made. the Interior that valuable deposits of one of the substances enumerated in section 23 hereof has been discovered by the permittee within the area covered by his permit and that such land is chiefly valuable therefor 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 thanRoyalty. one-eighth of the amount or value of the production, to be taken and described by legal subdivisions of the public-land 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 be prescribed by the Secretary of the Interior.
The permittee shall also have the preferencePreference to lease remainder of land. right to lease the remainder of the lands embraced within the limits of his permit at a royalty of not less than one-eighth 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 areLand containing known deposits subject to lease.Conditions. 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 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 acres; all leases to be conditioned upon the payment by theRoyalties, rentals, etc. lessee of such royalty of not less than one-eighth 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 for the first calendar year or fraction thereof and $1 per acre per annum thereafter during the continuance of the lease, the rental paid for any one year to be credited on the royalty for that year.
Leases may be for indeterminatePeriods and conditions of leases. 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 production, and a lessee under this section may be lessee of the remaining lands in his permit.
Sec. 25. That in addition to areas of such mineral land which mayUse of unoccupied lands for development work, etc. 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 rightRental. 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 and necessary to the proper development and use of the deposits covered by the permit or lease. 448 general provisions applicable to coal, phosphate, sodium oil, oil shale, and gas leases.General provisions.
Sec. 26. Permits may be canceled for want of diligence. That the Secretary of the Interior shall reserve and may exercise the authority to cancel any prospecting permit upon failure 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 for its cancellation by him. Sec. 27. Holdings restricted.Coal, phosphate, and sodium.Oil or gas.
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, association, or corporation shall take or hold, at one time, more than three oil or gas leases granted hereunder in any one State, and not more than one lease within the geologic structure of the same Corporation interests.Interests in other leases.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 or corporation shall take or hold any interest or interests as a member of an association or associations 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 interests as a member of an association or associations or as a stockholder of a corporation or 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 Forfeiture of prohibited interests.to any one lessee 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, Temporary holding by descent, etc.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 *Provisos*.Exceptions.*Ante*, pp. 443–446.acquisition: *Provided*, That nothing herein contained shall be construed to limit sections 18, 18a, 19, and 22 or to prevent any number Combinations for refineries, pipe lines, etc., permitted.of lessees under the provisions of this Act from combining their several interests 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 Coal roads.from their several wells, or from the wells of other lessees under this Approval necessary.Act, or the transportation of coal: *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 Forfeiture for subleasing, etc., to combinations in restraint of trade, etc.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 whatsoever, so that they form 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 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. 449 Sec. 28.
That rights of way through the public lands, includingRights of way for pipe lines granted through public lands. 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,*Ante*, p. 437.Operating conditions, etc. to the extent of the ground occupied by the said pipe line 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 pipe lines shall be constructed, operated, and maintained as common carriers: *Provided*, That the Government shall in express terms reserve and*Provisos*.Express condition for conveyance of oil of other producers, etc. 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 pipe line 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 pipe line, operating a lease or purchasing gas or oil under the provisions of this Act: *Provided further*, That noApplicable to all future grants. 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 conditions of this section.
Failure toForfeiture for violations. comply with the provisions of this section or the 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 an appropriate proceeding. Sec. 29. That any permit, lease, occupation, or use permittedJoint use of easements, etc., reserved. 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 rights of way, including easements 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 purposes: *Provided*, That said Secretary, in his discretion, in making*Provisos*.Disposal of surface of lands leased. 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 embraced 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 suchDetermination before offering of lease. reservation is made it shall be so determined before the offering of such lease: *And provided further*, That the said Secretary, during theEasement periods. life of the lease, is authorized to issue such permits for easements herein provided to be reserved.
Sec. 30. That no lease issued under the authority of this Act shallAssignments, etc., of leases restricted. be assigned or sublet, except with the consent of the Secretary of the Interior. The lessee may, in the discretion of the Secretary ofRelinquishment allowed. 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 obligations 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 purposeRestrictive provisions, for diligence., safety, etc. 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 observed,Labor restrictions. including a restriction of the workday to not exceeding eight hours in any one day for underground workers except in cases of emergency; provisions prohibiting the employment of any boy under the age of 450sixteen, or the employment of any girl or woman, without regard to age, in any mine below the surface; provisions securing the workmen 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 insure the fair and just weighing or measurement of the coal mined by each miner, and Sale to the Government, antitrust protection, etc.such other provisions 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 interests of the United States, for the prevention of monopoly, and for the *Proviso*.State laws not impaired.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. Forfeiture of leases.Proceedings in district courts. That 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 Settlement of disputes, etc.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.
Sec. 32. Regulations, etc., to be prescribed. 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, *Proviso*.Rights of States, etc., not affected.or oil or gas field, for the purposes of this Act: *Provided*, That nothing in this Act shall be construed or held 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, output of mines, or other rights, property, or assets of any lessee of the United States.
Sec. 33. Sworn statements, etc. That all statements, representations, 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. Application of Act to all deposits on reserved lands. That the provisions of this Act shall also apply to all deposits of coal, 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. Disposal of receipts.To the Treasury. That 10 per centum of all money received from sales, bonuses, royalties, and rentals under the provisions of this Act, excepting those from Alaska, shall be paid into the Treasury of the To the reclamation fund.Vol. 32, p. 388.United States and credited to miscellaneous receipts; for past production 70 per centum, and for future production 5212 per centum of the amounts derived from such bonuses, royalties, and rentals shall be paid into, reserved, and appropriated as a part of the reclamationTo the States in which lands located, for roads, education, etc. 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 future production 3712 per centum of the amounts derived from such bonuses, royalties, and rentals shall be paid by the Secretary of the Treasury after the expiration of each fiscal year to the State within the boundaries of which the leased lands or deposits are or were 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 *Proviso*.From naval petroleum reserves to the Treasury.institutions, as the legislature of the State may direct: *Provided*, That all moneys which may accrue to the United States under the 451provisions 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 United States under anyOil or gas royalties payable in kind. 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 timeSales by competitive bidding. to time thereafter during said lease, the Secretary of the Interior shall, except whenever in his judgment it is desirable to retain the same for the use of the United States, offer for sale for such period as he may determine, upon notice and advertisement on sealed bids or at public auction, all royalty oil and gas accruing or reserved to the United States under such lease.
Such advertisement and saleAction on bids. 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 whereReadvertising, private sales, etc. the accepted bidder fails to complete the purchase, or where the Secretary of the Interior shall determine that it is unwise in 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*,*Provisos*.Disposal of current product at market price.
That pending the making of a permanent contract for the sale of any royalty, oil or gas as herein provided, the Secretary of the Interior may sell the current product at private sale, at not less than the market price: *And provided further*, That any royalty, oil, or gasSales to the Government. 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, oilProvisions applicable to all deposits of coal, etc. shale, and gas, herein referred to, in lands valuable for such minerals, including lands and deposits described in the joint resolution entitledOil Creek Coal Company included.Vol. 37, p. 1346.
“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 existentPerfection of valid claims allowed. 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 theLand office fees to be prescribed. 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.