[Federal Register Volume 61, Number 154 (Thursday, August 8, 1996)]
[Proposed Rules]
[Pages 41365-41368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19339]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 61, No. 154 / Thursday, August 8, 1996 / 
Proposed Rules  

[[Page 41365]]



DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Part 214

RIN 1076-AD34


Leasing of Osage Reservation Lands, Oklahoma, for Mining, Except 
Oil and Gas

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Proposed rule.

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SUMMARY: We are revising the regulations for leasing land on the Osage 
Reservation for mining except oil and gas. The purpose of the revisions 
is to: make it easier to read and understand; to allow the use of 
arbitrators to settle damage claims; to make the information required 
from corporations consistent with parts 211 and 212; to give the Osage 
Tribe more control and flexibility in negotiating royalty rates for 
leases; to provide penalties for late reports and payments; and to 
allow us to order further development of leased land for the benefit of 
the landowner as is in part 226.
    This rule was identified for reinvention under the National 
Performance Review. It is written in plain English to make the rule 
easier to read and understand.

DATES: Comments by interested parties must be in writing and we must 
receive them on or before October 7, 1996.

ADDRESSES: Mail comments to Gordon Jackson, Bureau of Indian Affairs, 
Department of the Interior, P.O. Box 1539, Pawhuska, OK 74056.

FOR FURTHER INFORMATION CONTACT: Gordon Jackson, Bureau of Indian 
Affairs at telephone (918) 287-1032.

SUPPLEMENTARY INFORMATION: In addition to rewriting this rule in plain 
English, several significant changes are included in this proposed 
rule. A brief description of these changes follows. The information in 
existing Sec. 214.2 Sales of leases, is now found in new Sec. 214.3 How 
do I negotiate a lease for mineral mining? This provision has been 
changed to allow the Superintendent the discretion to extend the due 
date for the submission of documents, but not the due date for making 
payment. This change is consistent with 25 CFR part 226. The 
information in existing Sec. 214.3 Corporate Information, is now found 
in new Sec. 214.4 What if I am a corporation? The new provision would 
reduce significantly the amount of information collected from 
corporations. This new section is also consistent with the recently 
published 25 CFR Parts 211 and 212 which govern the leasing of the 
majority of Indian lands for mineral development. Existing Sec. 214.4 
Bonds would become Sec. 214.5 What bond must I file? This provision has 
been changed to allow the Superintendent the discretion to authorize 
bonds in different amounts than are set in paragraph (a) when 
circumstances warrant and the interests of the landowner are protected. 
Existing Sec. 214.10 Royalty rates, which sets specific rates for 
specific minerals is deleted to allow the Osage Tribal Council maximum 
flexibility in negotiating leases for their mineral resources in the 
proposed Sec. 214.9. Also late charges are provided for late payments 
and a penalty is allowed if reports are submitted late. Proposed 
Sec. 214.10 gives the Superintendent the authority to require increased 
development of leased land. This change is made to make this part 
compatible with 25 CFR part 226. Proposed Sec. 214.12 requires the use 
of arbitrators to settle claims when a claimant and lessee cannot reach 
a settlement agreement within a specified time period.
    We are publishing this proposed rule by the authority delegated by 
the Secretary of the Interior to the Assistant Secretary--Indian 
Affairs by 209 DM 8.
    Our policy is to give the public an opportunity to participate in 
the rulemaking process by submitting written comments regarding the 
proposed rules. We will consider all comments received during the 
public comment period. We will determine necessary revisions and issue 
the final rule. Please refer to this preamble's ADDRESSES section for 
where you must submit your written comments on this proposed rule.
    We certify to the Office of Management and Budget (OMB) that these 
proposed regulations meet the applicable standards provided in sections 
2(a) and 2(b)(2) of Executive Order 12778.
    This is not a significant rule under Executive Order 12866 and does 
not require review by the Office of Management and Budget.
    This rule imposes no unfunded mandates on any governmental or 
private entity and is in compliance with the provisions of the Unfunded 
Mandates Act of 1995.
    The information collection requirements in this part do not require 
approval by OMB under 44 U.S.C. 3501 et seq.
    We determined this proposed rule:
    (a) Will not have a significant economic impact on a substantial 
number of small entities under the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.).
    (b) Does not constitute a major Federal action significantly 
affecting the quality of the human environment and no detailed 
statement is needed under the National Environmental Policy Act of 
1969.
    (c) Does not have significant takings implications in accordance 
with Executive Order 12630.
    (d) Does not have significant federalism effects.
    This proposed rule was written by the Bureau of Indian Affairs' 
Regulatory Review Action Team.

List of Subjects in 25 CFR Part 214

    Indians--lands, Mining, Mineral resources.

    For the reasons given in the preamble, we propose to revise part 
214 of Title 25 of the Code of Federal Regulations, as follows:

PART 214--LEASING OF OSAGE RESERVATION LANDS, OKLAHOMA, FOR MINING, 
EXCEPT OIL AND GAS

Sec.
214.1  What definitions should I know?
214.2  How can these regulations be changed?
214.3  How do I negotiate a lease for mineral mining?
214.4  What if I am a corporation?
214.5  What bond must I file?
214.6  Must I appoint a local representative?
214.7  What are the restrictions on mining operations?
214.8  Do I have to establish exact locations of mines and 
buildings?

[[Page 41366]]

214.9  How and when do I pay rents and royalties?
214.10  What happens if I don't develop my leased land as much as 
possible?
214.11  How may I use surface lands?
214.12  How are damage claims handled?
214.13  How do I transfer or assign a lease?
214.14  What happens when I apply to cancel a lease?
214.15  Must I maintain records and file reports?
214.16  Who can inspect my books and records?
214.17  What are the minimum requirements for notices under this 
part?
214.18  Under what conditions may I forfeit a lease?
214.19  Under what conditions may I have to pay a fine?

    Authority: 92 Stat. 1660.


Sec. 214.1   What definitions should I know?

    These terms will help you understand sections in this part.
    Lease means any lease or permit authorizing production of any 
minerals other than oil and gas.
    Lessee means any person, firm, or corporation to whom a mining 
lease is made for other than oil and gas mining.
    Minerals means coal, limestone, dolomite, sandstone, shale, sand, 
gravel, clay, and any other minerals, except oil and gas.
    Osage Tribal Council means the duly elected governing body of the 
Osage Tribe of Oklahoma vested with authority to lease or take other 
actions relative to such mining operations.
    Secretary means the Secretary of the Interior or an authorized 
representative acting under delegated authority.
    Superintendent means the Superintendent of the Osage Agency, 
Pawhuska, Oklahoma, or an authorized representative acting under 
delegated authority.
    You means the lessee or lease applicant.


Sec. 214.2   How can these regulations be changed?

    The Secretary may change these regulations at any time through the 
rulemaking process.


Sec. 214.3   How do I negotiate a lease for mineral mining?

    (a) If the Secretary approves, you may negotiate a lease for 
minerals other than oil and gas with the Osage Tribal Council.
    (b) Within 30 days from the date of agreement between you and the 
tribe, you must submit to the Superintendent:
    (1) All money due to the Osage tribe;
    (2) The negotiated lease; and
    (3) Other required documents.
    (c) The Superintendent may extend the 30-day due date for the 
submission of the lease and other documents, but not the due date for 
payment of money due the Osage Tribe.
    (d) Leases and other documents must be on Departmental forms that 
the Superintendent furnishes you.
    (e) If you don't meet the requirements in this section, the 
Superintendent will disapprove your lease, and you will forfeit any 
money you paid to the Osage tribe.


Sec. 214.4   What if I am a corporation?

    (a) If you are a corporation, you must file:
    (1) Evidence of your corporate officers' authority to sign papers; 
and
    (2) With your first application, a certified copy of your Articles 
of Incorporation; or
    (3) If you are incorporated outside the State of Oklahoma, evidence 
showing that you follow the state's corporation laws.
    (b) The Superintendent may require more information to carry out 
the intent of this part. You must furnish this information within 90 
days from the date of the request. If you ask, the Superintendent may 
extend this deadline.


Sec. 214.5   What bond must I file?

    (a) With each lease you file, you must furnish a bond of:
    (1) $1,000 for less than 80 acres;
    (2) $1,500 for 80 acres up to less than 120 acres;
    (3) $2,000 for 120-160 acres;
    (4) $500 for each additional 40 acres above 160 acres.
    (b) With the Osage Tribal Council's consent, the Superintendent may 
authorize a bond for a different amount.
    (c) You may file a collective bond for $15,000 to cover all your 
leases. The Superintendent may change the amount of this bond, and the 
Secretary may require another bond, at any time.


Sec. 214.6   Must I appoint a local representative?

    Yes. Before you can start developing or drilling on leased land, 
you must appoint a representative who lives in Oklahoma and give the 
Superintendent your representative's name and post office address. The 
Superintendent or other authorized person in the Department will 
communicate with your representative to make sure you are following the 
requirements of this part.


Sec. 214.7  What are the restrictions on mining operations?

    (a) You may mine or prospect on your land only after the 
Superintendent approves the lease for that land and delivers it to you.
    (b) You may mine or prospect within or on any homestead selection 
only with the Superintendent's written consent.
    (c) You may abandon a well or mine only with the Superintendent's 
written approval.
    (d) If you disagree with the surface owner or other lessees about 
operations likely to cause injury to anyone, you must follow the 
Superintendent's decision, unless you file an appeal under 25 CFR part 
2.


Sec. 214.8  Do I have to establish exact locations of mines and 
buildings?

    Yes, if the Superintendent asks, you must file a plat of your 
leases showing the exact locations of all mines, proposed locations, 
power houses, etc. If you disagree with the surface owner or another 
mineral lessee about the locations of wells, mines, buildings, plants, 
etc., the Superintendent will determine them after investigating and 
taking into account that the person holding a lease with an earlier 
approval date has the first right to a location.


Sec. 214.9  How and when do I pay rents and royalties?

    (a) Before your lease is approved, the Osage Tribal Council must 
set royalties for all minerals other than oil and gas, and the 
Superintendent must approve them.
    (b) If any money is due under a lease contract or this part, you or 
the purchaser must pay it in cash or by a check made payable to the 
Bureau of Indian Affairs and delivered to the Osage Agency, P.O. Box 
1539 Pawhuska, Oklahoma 74056.
    (c) Any money you owe to the Bureau becomes a lien on all equipment 
and unsold minerals on your leased land.
    (d) You must prepare a sworn report from accurate records covering 
all exploration and mining operations and pay royalties for each month 
by the 25th day of the following month.
    (e) If you are late, you must pay a late charge of 1.5 percent for 
each month or part of a month until your payment is received unless the 
Osage Tribal Council, with the Superintendent's approval, waives your 
late charge.
    (f) If you don't pay or submit a report, the Superintendent may 
fine you $100 per day or cancel your lease.


Sec. 214.10  What happens if I don't develop my leased land as much as 
possible?

    The Superintendent may order increased development of any leased 
acreage if he or she believes a prudent operator would develop it 
further. If you don't follow this order, the Superintendent may 
consider your refusal a violation of the lease terms and cancel your 
lease.

[[Page 41367]]

Sec. 214.11  How may I use surface lands?

    (a) You may use as much of the surface of your leased land as you 
reasonably need for prospecting and mining operations, including 
buildings those operations require.
    (b) You have the right-of-way over and across the leased land to 
any point of prospecting or mining operations.
    (c) You may use timber from restricted land only if you have a 
written agreement with the owner and the Superintendent's approval.
    (d) In using surface land, you must cause the least possible injury 
and inconvenience to its allottee or owner. And you must pay for all 
reasonable damages you cause to the surface land or to growing crops or 
improvements on it, according to Sec. 214.12 of this part.


Sec. 214.12  How are damage claims handled?

    (a) The owners of surface land you are leasing must notify other 
lessees and tenants of the regulations in this part and of the 
procedure they must follow in all cases of alleged damages. If the 
surface owners authorize it in writing, those lessees or tenants may 
represent the owners.
    (b) Any person other than a lessee or an allottee or the heirs of a 
deceased allottee claiming an interest in any leased tract or in 
damages to it, must state that claim in writing to the Superintendent. 
Anyone who doesn't has waived notice and lost the right to claim any 
part of disbursed damages.
    (c) The Superintendent will apportion damages among those 
interested in the surface as owner, oil and gas lessee, or otherwise, 
as they may agree or as the percentage of their interests establishes. 
If these people are unable to agree, arbitration must determine how to 
apportion damages.
    (d) Anyone who suffers injury must, as soon as possible after 
discovering any damage, serve written notice to you or your authorized 
representative. This requirement doesn't limit the time for bringing an 
action to the courts to less than the 90-day period allowed by Section 
2 of the Act of March 2, 1929 (45 Stat. 1478, 1479). The written notice 
must contain:
    (1) The nature and location of the alleged damage;
    (2) The date this damage occurred;
    (3) The names of those who caused the damage; and
    (4) The amount claimed.
    (e) If you haven't already adjusted the alleged damages when you 
receive the notice, you or your representative must try to adjust the 
claim with the claimant within 20 working days from that date. If the 
claimant is the owner of restricted property and a settlement results, 
you must file a copy of the settlement agreement with the 
Superintendent for approval.
    (f) If the Superintendent approves the settlement agreement, you 
must pay damages to the Superintendent for the claimant's benefit. In 
settlement of damages on restricted land, you must pay all sums to the 
Superintendent for credit to the account of the Indian who is entitled 
to them. The Superintendent will apportion the money between the Indian 
surface owner or owners and the surface Lessee of record.
    (g) If you don't adjust the claim within 20 days of the written 
notice, you and the claimant each must appoint a disinterested 
arbitrator within 10 more days. All of a surface owner's other lessees 
may join in appointing the owner's arbitrator. The arbitrators must 
appoint a third disinterested arbitrator within 10 days. If they can't 
agree by this deadline, they must immediately notify the claimant and 
you. If you and the claimant can't agree on a third arbitrator within 
five days of their notice, the Superintendent will appoint the third 
arbitrator. You and the claimant each pay the fee and expenses of the 
arbitrator you appoint, but you both share equally the third 
arbitrator's fee and expenses.
    (h) As soon as the third arbitrator is appointed, the arbitrators 
must meet, hear evidence and arguments, and examine lands, crops, 
improvements, or other property alleged to have been injured. Within 10 
days they must decide how much damage money is due.
    (i) Any two arbitrators may decide the amount of damages due and 
present their written decision to you and the claimant. Either of you 
may file an action in a court of competent jurisdiction within 90 days 
of the date the decision is served. If no one files an action within 90 
days, and the award is against you or your representative, you must pay 
the award plus interest within 10 days after the filing deadline. 
Interest is at an annual rate established by the Internal Revenue 
Service.
    (j) You or your representative must file with the Superintendent a 
report on each settlement agreement, including the nature and location 
of the damage, date and amount of the settlement, and other pertinent 
information.


Sec. 214.13  How do I transfer or assign a lease?

    (a) You may transfer or assign a lease, or any interest in a lease, 
only with the Superintendent's approval. Otherwise, the transfer or 
assignment is void, and the Superintendent may cancel your lease.
    (b) The person who receives the transferred or assigned interest 
must--
    (1) Follow the terms and conditions of the original lease, the 
regulations under which that lease was approved, and any other 
requirements the Superintendent may prescribe; and
    (2) Furnish with the transfer or assignment a bond that meets the 
requirements in section Sec. 214.5.


Sec. 214.14  What happens when I apply to cancel a lease?

    When you apply to cancel all or part of a lease:
    (a) You must pay all royalties or rentals due;
    (b) You must surrender any part of the lease that was delivered to 
you;
    (c) If a new lease year has begun, you have to pay any required 
advance rentals for that year; and
    (d) If you have already paid advance rentals, you won't get any 
refund.


Sec. 214.15  Must I maintain records and file reports?

    Yes. If you hold a lease, transfer, or assignment for mineral 
mining, you must:
    (a) Keep records and file reports required by section Sec. 214.9; 
and
    (b) If you are a corporation:
    (1) Send a statement to the Superintendent on January 1 of each 
year or whenever else the Superintendent asks for one. The statement 
must contain the information required by Sec. 214.4 and show any 
changes in officers, as well as changes in or additions to 
stockholders; and
    (2) File any other information within a reasonable time, if the 
Superintendent considers it necessary to carry out the regulations in 
this part.


Sec. 214.16  Who can inspect my books and records?

    The Superintendent may enter your leased premises to inspect any 
part of your mining operation, and your books and records must be open 
at all times for the Superintendent's examination.


Sec. 214.17  What are the minimum requirements for notices under this 
part?

    A notice under this part meets requirements if it is mailed to the 
last known address of the person who must receive the notice. Deadline 
times begin running on the day after the mailing or from the date of 
delivery, unless the Superintendent increases the time allowed.


Sec. 214.18  Under what conditions may I forfeit a lease?

    As a lessee or assignee, you may forfeit a lease if you don't 
follow any regulation or any obligation in your

[[Page 41368]]

lease or assignment. The Superintendent may cancel and annul your lease 
without court action or any other proceeding. But the Superintendent 
must give you at least 30 days' notice to show why your lease shouldn't 
be canceled and annulled or why you shouldn't receive any other 
penalty.


Sec. 214.19  Under what conditions may I have to pay a fine?

    (a) If you violate any of your lease's terms and conditions or any 
regulations on leases, the Superintendent may:
    (1) Cancel your lease;
    (2) Fine you no more than $500 per day for every day you violate 
the terms of the lease or regulations or don't carry out the 
Superintendent's orders regarding your lease; or
    (3) Fine you and cancel your lease.
    (b) You are entitled to notice and a hearing on the terms of the 
lease or regulations that you have violated. The Superintendent will 
hold the hearing to reach a final decision. The Superintendent's 
findings are final, unless you appeal under 25 CFR part 2.

    Dated: July 23, 1996.
Ada E. Deer,
Assistant Secretary--Indian Affairs.
[FR Doc. 96-19339 Filed 8-7-96; 8:45 am]
BILLING CODE 4310-02-P