[Federal Register Volume 65, Number 179 (Thursday, September 14, 2000)]
[Proposed Rules]
[Pages 55864-55880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23590]



[[Page 55863]]

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Part VII





Department of the Interior





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Bureau of Land Management



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43 CFR Part 3600 et al.



Mineral Materials Disposal; Sales; Free Use; Proposed Rule

  Federal Register / Vol. 65, No. 179 / Thursday, September 14, 2000 / 
Proposed Rules  

[[Page 55864]]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3600, 3610, and 3620

[WO-620-1430-PB-24 1A]
RIN 1004-AD29


Mineral Materials Disposal; Sales; Free Use

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed rule.

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SUMMARY: The Bureau of Land Management (BLM) proposes to amend its 
mineral materials regulations by adding or amending provisions on 
inspection of operations, production verification, contract renewal, 
procedures for cancellation, bonding, and appeals. The proposed rule 
also addresses the rights of purchasers and permittees versus 
subsequent users of the same land. BLM proposes to amend the 
regulations in part because notices of intended sale of mineral 
materials have inspired speculative entries conflicting with the 
proposed sale, and because BLM has encountered difficulties in 
verifying production. These amendments are necessary to prevent entries 
and uses begun after a planned sale has been announced from interfering 
with the sale. BLM also proposes to reorganize and simplify the 
regulations on mineral materials disposal.

DATES: You must submit your comments to BLM at the appropriate address 
below on or before November 13, 2000. BLM will not necessarily consider 
any comments received after the above date in making its decisions on 
the final rule.

ADDRESSES:
    Mail: Director (630), Bureau of Land Management, Administrative 
Record, Room 401 LS, 1849 C Street, NW, Washington, DC 20240.
    Personal or messenger delivery: Room 401, 1620 L Street, NW, 
Washington, DC 20036.
    Internet e-mail: [email protected]. (Include ``Attn: AD29'').

FOR FURTHER INFORMATION CONTACT: Dr. Durga N. Rimal, Solid Minerals 
Group, at (202) 452-0350. Persons who use a telecommunications device 
for the deaf (TDD) may call the Federal Information Relay Service 
(FIRS) at 1-800-877-8339, 24 hours a day, 7 days a week.

SUPPLEMENTARY INFORMATION:

I. Public Comment Procedures
II. Background
III. The Rule as Proposed
IV. Section-by-Section Analysis
V. Procedural Matters

I. Public Comment Procedures

A. How Do I Comment on the Proposed Rule?

    If you wish to comment, you may submit your comments by any one of 
several methods.
     You may mail comments to Director (630), Bureau of Land 
Management, Administrative Record, Room 401 LS, 1849 C Street, NW, 
Washington, DC 20240.
     You may deliver comments to Room 401, 1620 L Street, NW, 
Washington, DC 20036.
     You may also comment via the Internet to 
[email protected]. Please submit Internet comments as an ASCII file 
avoiding the use of special characters and any form of encryption. 
Please also include ``Attn: AD29'' and your name and return address in 
your Internet message. If you do not receive a confirmation that we 
have received your Internet message, contact us directly at (202) 452-
5030.
    Please make your written comments on the proposed rule as specific 
as possible, confine them to issues pertinent to the proposed rule, and 
explain the reason for any changes you recommend. Where possible, your 
comments should reference the specific section or paragraph of the 
proposal that you are addressing.
    BLM may not necessarily consider or include in the Administrative 
Record for the final rule comments that BLM receives after the close of 
the comment period (see DATES) or comments delivered to an address 
other than those listed above (see ADDRESSES).

B. May I Review Comments Submitted by Others?

    Comments, including names and street addresses of respondents, will 
be available for public review at the address listed under ADDRESSES: 
Personal or messenger delivery'' during regular business hours (7:45 
a.m. to 4:15 p.m.), Monday through Friday, except holidays.
    Individual respondents may request confidentiality, which we will 
honor to the extent allowable by law. If you wish to withhold your name 
or address, except for the city or town, you must state this 
prominently at the beginning of your comment. We will make all 
submissions from organizations or businesses, and from individuals 
identifying themselves as representatives or officials of organizations 
or businesses, available for public inspection in their entirety.

II. Background

    Under the mineral materials program, BLM manages the exploration, 
development, and disposal of materials such as sand, stone, gravel, and 
other common rocks. Our primary goal is to make Federal mineral 
materials available by sale or free use permit when it will not be 
detrimental to the public interest. BLM is also responsible for the 
planning and inventory of mineral materials on the public lands, and 
prevention and abatement of their unauthorized use. BLM monitors sites, 
and inspects and verifies production to ensure compliance with the 
terms of the contract or permit. This proposal does not address 
vegetative materials, such as timber.

A. Authorities

    The general authority for the Mineral Materials Program is the Act 
of July 31, 1947, as amended (30 U.S.C. 601 et seq.), commonly referred 
to as the Materials Act. This Act authorizes the Secretary of the 
Interior to dispose of mineral and vegetative materials from public 
lands.

B. How Does BLM Dispose of Mineral Materials?

    BLM disposes of mineral materials from public lands by selling them 
and, under some circumstances, giving them away. We dispose of 
materials from exclusive sites used by one operator or nonexclusive 
sites (community pits or common use areas) used by more than one 
operator. Under current regulations in 43 CFR parts 3600, 3610, and 
3620, and BLM policies, disposal methods are as follows:
1. Negotiated Sales
    BLM will negotiate a sale contract for quantities of materials less 
than 100,000 cubic yards, with certain exceptions detailed in the 
regulations. The price will be fair market value of the minerals as BLM 
determines through an appraisal. Contracts have a maximum term of 5 
years, with a possible one-time, one-year extension.
2. Competitive Sales
    For quantities of materials greater than 100,000 cubic yards, or if 
BLM is aware that there is competitive interest in the materials site, 
we advertise the availability of the material at the particular site 
and sell it to the highest bidder. Contracts issued through this 
process have a term of no more than 10 years, but BLM may allow a one-
time, one-year extension.

[[Page 55865]]

3. Free Use Permits
    BLM issues free use permits for sand and gravel and other materials 
to government agencies and to non-profit organizations. A large part of 
mineral materials produced under the program is disposed of under free 
use permits to local, state, and other Federal Government agencies, 
including State and county highway departments, cities, and 
municipalities. As a government agency, you may obtain free use permits 
to extract specified quantities of material for public works projects. 
BLM may specify the amount you may extract under a government agency 
free use permit, and may allow your operation to continue for up to 10 
years. You may not barter or sell the material.
    BLM also issues free use permits to non-profit organizations for up 
to 5,000 cubic yards for any 12 consecutive months. These permits have 
a one-year term. If there is additional need, you must apply for a new 
permit. You also may not barter or sell this material.

C. Surface Management Operations

    BLM is responsible for monitoring the sites, inspection, and 
production verification to ensure compliance with the terms of the 
contract or permit. BLM seeks (1) accurate accounting for materials you 
remove, (2) proper compensation to the Federal Government, and (3) 
protection of the environment, public health, and safety. We may use 
field inspections and site surveys, or high-tech methods, such as 
aerial surveys or computer modeling, that quantify the volume of 
material removed. We generally base the frequency of inspections and 
the choice of verification method on the size and type of disposal.

III. The Rule as Proposed

    The proposed rule would substantially reorganize parts 3600, 3610, 
and 3620. We are reorganizing the regulations for two reasons: (1) To 
make them read more logically and clearly; and (2) to conform more 
closely to Office of the Federal Register numbering conventions. The 
following table shows how numbers would be changed from the existing 
regulations to the proposed rule.

                        Section Conversion Table
------------------------------------------------------------------------
                Old section                     Proposed new  section
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Group 3600................................  None.
Group 3600 Note...........................  Sec.  3601.9.
Part 3600.................................  Part 3600.
Subpart 3600..............................  Subpart 3601.
Sec.  3600.0-1............................  Sec.  3601.1.
Sec.  3600.0-3............................  Sec.  3601.3.
Sec.  3600.0-3(a)(3)......................  Sec.  3601.12.
Sec.  3600.0-4............................  Sec.  3601.6.
Sec.  3600.0-5............................  Sec.  3601.5.
Sec.  3600.0-8............................  Sec.  3601.8.
Subpart 3601..............................  None.
Sec.  3601.1..............................  Sec.  3601.10.
Sec.  3601.1-1(a)(1)......................  Sec.  3601.14.
Sec.  3601.1-1(a)(2)......................  Sec.  3601.12.
Sec.  3601.1-2(a), (c)....................  Sec.  3601.21.
Sec.  3601.1-2(b).........................  Sec.  3601.22.
Sec.  3600.0-3(a)(2)......................  Sec.  3601.13.
Sec.  3601.1-3............................  Sec.  3601.11.
Subpart 3602..............................  None.
Sec.  3602.1..............................  Sec.  3601.40.
Sec.  3602.1-1............................  Sec.  3601.41.
Sec.  3602.1-2............................  Sec.  3601.42.
Sec.  3602.1-3(a), (b)....................  Sec.  3601.43.
Sec.  3602.1-3(c), (d)....................  Sec.  3601.44.
Sec.  3602.2..............................  Sec.  3601.30.
Sec.  3602.3..............................  Sec.  3601.52.
None......................................  Sec.  3601.51.
None......................................  Sec.  3601.60.
None......................................  Sec.  3601.61.
None......................................  Sec.  3601.62.
Subpart 3603..............................  None.
Sec.  3603.1..............................  Secs.  3601.70 through
                                             3601.72.
None......................................  Sec.  3601.80.
Subpart 3604..............................  Subpart 3603.
Sec.  3604.1(a)...........................  Sec.  3603.10.
Sec.  3604.1(b)...........................  Sec.  3603.11.
Sec.  3604.1(c)...........................  Sec.  3603.12.
Sec.  3604.1(d) (first sentence)..........  Sec.  3603.13.
Sec.  3604.1(d) (second sentence).........  Sec.  3603.14.
Sec.  3604.2..............................  Sec.  3603.20.
Sec.  3604.2(a)...........................  Secs.  3603.21 and
                                             3603.22(b).
Sec.  3604.2(b)...........................  Sec.  3603.22(a).
Part 3610.................................  None.
Subpart 3610..............................  Subpart 3602.
Sec.  3610.1..............................  Sec.  3602.10.
Sec.  3610.1-1............................  Sec.  3602.11.
None......................................  Sec.  3602.12.
Sec.  3610.1-2............................  Sec.  3602.13.
Sec.  3610.1-3(a)(1)-(5)..................  Sec.  3602.21(a).
Sec.  3610.1-3(a)(6)......................  Secs.  3602.21(b),
                                             3602.22(a).
Sec.  3610.1-3(b).........................  Sec.  3602.22(b).
Sec.  3610.1-4............................  Sec.  3602.23.
Sec.  3610.1-5............................  Sec.  3602.14.
None......................................  Sec.  3602.15.
Sec.  3610.1-6(a), (b)....................  Sec.  3602.24.
Sec.  3610.1-6(c).........................  Secs.  3602.25, 3602.26.
Sec.  3610.1-7............................  Sec.  3602.27.
None......................................  Sec.  3602.28.
Sec.  3610.1-3(a)(7)......................  Sec.  3602.29.
Sec.  3610.2..............................  Sec.  3602.30.
Sec.  3610.2-1............................  Sec.  3602.31.
Sec.  3610.2-2............................  Sec.  3602.32.
Sec.  3610.2-3............................  Sec.  3602.33.
Sec.  3610.2-4............................  Sec.  3602.34.
Sec.  3610.3..............................  Sec.  3602.40.
Sec.  3610.3-1(a).........................  Sec.  3602.41.
Sec.  3610.3-1(b).........................  Sec.  3602.42(c).
Sec.  3610.3-2............................  Sec.  3602.42(a), (b).
Sec.  3610.3-3............................  Sec.  3602.43.
Sec.  3610.3-4............................  Sec.  3602.44.
Sec.  3610.3-5............................  Sec.  3602.45.
Sec.  3610.3-6............................  Sec.  3602.46.
None......................................  Sec.  3602.47.
None......................................  Sec.  3602.48.
None......................................  Sec.  3602.49.
Part 3620.................................  None.
Subpart 3621..............................  Subpart 3604.
Sec.  3621.1..............................  Sec.  3604.10.
Sec.  3621.1-1............................  Sec.  3604.11.
Sec.  3621.1-2............................  Sec.  3604.21.
Sec.  3621.1-3............................  Sec.  3604.23.
Sec.  3621.1-4(a), (c)-(d)................  Sec.  3604.22.
Sec.  3621.1-4(b).........................  Sec.  3604.13.
Sec.  3621.1-5............................  Sec.  3604.24.
Sec.  3621.1-6............................  Sec.  3604.25.
Sec.  3621.1-7............................  Sec.  3604.26.
Sec.  3621.2(a)...........................  Sec.  3604.12(a).
Sec.  3621.2(b)...........................  Sec.  3604.12(b.)
Sec.  3621.2(c)...........................  Sec.  3604.27.
Subpart 3622..............................  Subpart 3622.
------------------------------------------------------------------------

    This proposed rule also incorporates material from a proposed rule 
published August 2, 1996 (61 FR 40373). That rule proposed to amend the 
bonding requirements for mineral material sales by accepting qualified 
certificates of deposit as surety bonds, and by changing bonding 
requirements for sales of $2,000 or more. As in the earlier proposed 
rule, bonds would be set at more realistic levels, and would ensure 
that amounts needed to cover the cost of reclamation will be available.
    Other substantive changes in the proposed rule include the 
following:
    (1) The rule would strengthen and clarify provisions allowing BLM 
to require purchasers of mineral materials to keep records to verify 
production and to make them available to BLM. BLM would use these 
records to ascertain whether purchasers have complied with regulations 
and contract terms. To allow BLM to verify production, the rule would 
require purchasers to submit production reports at least annually. It 
would allow BLM to require purchasers to conduct volumetric surveys of 
the operation site as well. See Secs. 3602.28 and 3602.29.
    (2) The rule would require permittees and purchasers to allow BLM 
to inspect their operations, conduct surveys, and estimate the volume 
and type of production. See Sec. 3601.51.
    (3) The rule would allow BLM to cancel permits or sales contracts 
for failure of the purchaser or permittee to comply with the law, 
regulations, or contract or permit terms. It would require BLM to 
provide written notice of our intent to cancel, allowing time to 
correct performance problems, to request an extension, or to show why

[[Page 55866]]

the contract or permit should not be canceled. See Secs. 3601.61 and 
3601.62.
    (4) The rule would add a provision that when BLM designates a tract 
for sale of mineral materials, subsequent contracts or permits on that 
tract will have priority over any subsequent conflicting mining claim, 
entry, or other use of the land. See Sec. 3602.12.
    (5) The rule would provide that BLM may dispose of mineral 
materials from unpatented mining claims in accordance with Solicitor's 
Opinion No. M-36998, Disposal of Mineral Materials from Unpatented 
Mining Claims, June 9, 1999. See Sec. 3601.13.
    (6) The rule would make the provisions for reappraisal clearer. BLM 
would not reappraise sooner than 2 years after we issue the contract or 
complete a previous reappraisal. See Secs. 3602.13 and 3602.48.
    (7) The rule would reduce the percentage amount BLM requires for 
the first installment payment and in lieu of production payments under 
a material sales contract. See Sec. 3602.21.
    (8) The rule would provide that you must make monthly installment 
payments in an amount equal to the value of the materials removed the 
previous month. See Sec. 3602.21.
    (9) The rule would allow purchasers with contract terms of 90 days 
or less to request contract extensions no later than 15 days instead of 
30 days before the end of the contract. See Sec. 3602.27.
    (10) The rule would increase the volume limitation for 
noncompetitive sales from 100,000 to 200,000 cubic yards, and for 
noncompetitive sales in support of a public works improvement program 
from 200,000 to 400,000 cubic yards. See Secs. 3602.31 and 3602.32.
    (11) The rule would allow the successful bidder in a competitive 
sale 60 days instead of 30 days to ratify and execute the contract. See 
Sec. 3602.45.
    (12) The rule would add a provision for renewing contracts, under 
which a purchaser who has paid the full contract price for the 
purchased mineral material may apply for renewal of the contract to 
allow purchase of additional material from the same site. The maximum 
renewal term would be 10 years, but there would be no limit on the 
number of renewals allowed. However, each renewal would require a 
reappraisal, a new environmental analysis when we find it necessary, 
and a possible increase or decrease in the bond required. See 
Sec. 3602.47.
    (13) The rule would include a cross reference to the Department of 
the Interior appeals regulations in 43 CFR part 4. See Sec. 3601.80.
    These regulations would apply from the date of promulgation of the 
rule to all future contracts and permits. They would also apply to 
existing contracts and permits to the extent--
     The contract or permit incorporates future regulations, 
and
     The regulations are not inconsistent with the express 
terms of the contract or permit. We solicit comments regarding whether 
incorporating any of the provisions of this proposed rule into existing 
contracts or permits would cause hardship or otherwise be inadvisable.

III. Section-by-Section Analysis

    This portion of the preamble addresses only those parts of the 
regulations that we would reorganize or amend in a way that requires 
explanation.

Subpart 3601--Mineral Materials Disposal: General

    This subpart would replace and combine existing subparts 3600, 
3601, 3602, and 3603. It would contain the regulatory provisions common 
to both sales and free use of mineral materials, including definitions, 
limits on disposal of mineral materials, mining and reclamation plans, 
reclamation and removal of improvements, and unauthorized use. Part of 
the purpose of this rearrangement is to conform with Office of the 
Federal Register numbering conventions, which discourage use of 
``group''--which BLM has long used--as part of an organizational 
structure for regulations. The rearrangement also seeks to combine 
related functions within the same unit of the regulations.

Authority

    Section 3601.3 would describe briefly the statutory authorities for 
BLM to sell or otherwise dispose of mineral and other materials, to 
manage the public lands generally, and to collect fees and require 
reimbursement of administrative costs. It would not contain the 
repetition of the statutory provisions themselves that appear in the 
existing regulations. It is unnecessary to repeat the statute in the 
regulatory text.

Definitions

    While we have not proposed to amend the definition of ``public 
lands'' at this point, we are aware that the Department of Agriculture 
uses a definition that excludes acquired lands in its administration of 
the Materials Act. We are reviewing this issue and would welcome 
comments on whether we should amend our definition.
    We would add a definition for the term ``purchaser'' to distinguish 
a person holding a material sales contract from a free use permittee 
under these regulations, and revise the definition of the term 
``permittee'' to refer only to the holder of a free use permit. The 
rule would also revise the definitions of ``community pit'' and 
``common use area'' to explain better the difference between them.
    The proposed rule would also remove the definition of ``unnecessary 
or undue degradation'' because we found that reference to this standard 
is not needed in this rule. The Materials Act provides that the 
Secretary may dispose of mineral materials if the disposal is not 
otherwise expressly authorized or prohibited by law and would not be 
detrimental to the public interest. 30 U.S.C. 601. This standard gives 
the Secretary broad discretion, allowing him to consider not only 
whether a proposed disposal might cause unnecessary or undue 
degradation, but other factors that could affect the public interest as 
well. BLM's policy statement at proposed Sec. 3601.6(d) and the 
provision at proposed Sec. 3601.11 incorporate this standard by 
declaring that ``BLM will not dispose of mineral materials if we 
determine that the aggregate damage to public lands and resources would 
exceed the public benefits that BLM expects to be derived from the 
proposed sale or free use.'' Sections 3601.41(c) and 3602.48 also 
ensure that mineral materials operations will include measures to 
prevent hazards to public health and safety and to minimize and 
mitigate environmental damage. Accordingly, we would remove references 
in the rule to ``unnecessary or undue degradation'' as needless and 
possibly confusing.
    Finally, the proposed rule would remove the definition for 
``authorized officer'' in accordance with the now prevailing practice 
of using the term ``BLM'' instead of ``authorized officer,'' and 
rearrange the defined terms in alphabetical order.

Policy

    Section 3601.6 would be amended by adding a policy statement 
authorizing government agencies and non-profit organizations free use 
of mineral materials. This policy statement is new in this proposed 
rule, but reflects existing regulations and policy. We have included 
``Territorial'' government entities, as in the statute. 30 U.S.C. 601. 
We recognize that at the time the statute was enacted, Alaska was a 
Territory that could benefit from this provision. We invite comment on 
whether any current Territories could benefit and whether this 
inclusion is currently necessary or appropriate.

[[Page 55867]]

Public Availability of Information

    Section 3601.8 was added to the mineral material disposal 
regulations (as Sec. 3600.0-8) in a final rule published in the Federal 
Register on October 1, 1998 (63 FR 52946). It merely would be 
renumbered and not otherwise changed in this proposed rule.

Information Collection

    Section 3601.9 would codify the ``Note'' on information collection 
requirements that currently appears at the beginning of 43 CFR Group 
3600. The Note refers to information collection clearance numbers under 
the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The proposed rule 
would not amend this provision except to relocate it, conform the parts 
citation to the amendments in this proposed rule, and simplify the last 
sentence. This codification is in response to the style requirements of 
the Office of the Federal Register.

Limits on BLM's Discretion to Dispose of Mineral Materials

    The next group of sections, 3601.10 to 3601.14, would detail the 
effects of other uses and land designations on BLM's ability to dispose 
of mineral materials from public lands.

Section 3601.13  How Can I Obtain Mineral Materials From Federal Lands 
Managed By Other Agencies?

    Section 1 of the Materials Act (30 U.S.C. 601) allows the Secretary 
of the Interior to dispose of mineral materials from public lands. It 
also allows the Secretary to dispose of such materials from lands that 
have been withdrawn for the use of other Federal agencies and State and 
local government agencies, but only with the consent of that other 
governmental agency or unit. Under the proposed rule, BLM would dispose 
of mineral materials from such withdrawn lands only with the consent of 
the affected agency or governmental unit. BLM would not dispose of 
mineral materials from lands managed by the U.S. Forest Service or the 
National Park Service, or from Indian lands. This is not a change from 
current procedures, which are restated and relocated here from the 
Authority section of the existing regulations, 43 CFR 3600.0-3(a)(2) 
and (3).

Section 3601.14  When Can BLM Dispose of Mineral Materials From 
Unpatented Mining Claims?

    A substantive change in these provisions is that Sec. 3601.14 would 
recognize BLM's authority to dispose of mineral materials from 
unpatented mining claims, unlike current Sec. 3601.1-1, which restricts 
such disposal. This change is based on Solicitor's Opinion No. M-36998, 
issued on June 9, 1999, which sets out the authority for such disposal. 
Prior to issuance of this Opinion, the Department proposed language as 
part of the revision of 43 CFR subpart 3809 (64 FR 6421-6448 at 
proposed Sec. 3809.101(d)) that would have authorized BLM's disposal of 
mineral materials from unpatented mining claims where the mining 
claimant gave BLM a written waiver. Proposed Sec. 3601.14 would broaden 
that authority consistent with the Opinion, which makes clear that 
BLM's authority is not contingent on receiving a waiver from the 
claimant.

Rights of Parties

    The next 2 sections, 3601.21 and 3601.22, describe the rights of 
the parties to a mineral materials disposal contract or permit. Section 
3601.22 would be virtually unchanged from current Sec. 3601.1-2(b).
    Section 3601.21 would combine portions of 2 sections of the 
existing regulations, 3601.1-2(a) and (c), to explain the rights of the 
purchaser of a materials sales contract and the holder of a free use 
permit. These rights include the extraction, removal, processing, and 
stockpiling of material during the life of the contract or permit, and 
use and occupancy of the land if BLM determines it necessary for the 
operation. It would also state that subsequent authorized users of the 
land would have rights subordinate to the holder of the contract or 
permit. Except for the consolidation of sections, the proposed rule 
does not change this provision substantively.

Section 3601.30  Pre-Application Activities

    The only substantive change to this section from current 
Sec. 3602.2 would be new language limiting to 90 days the effectiveness 
of a letter from BLM authorizing sampling and testing. BLM may extend 
the 90-day authorization for another 90 days if we agree that extension 
is necessary. BLM believes a time limit on authorized activities is 
desirable to maintain control over the land. This 90-day period should 
be sufficient in most cases, and the possible extension would provide 
flexibility for cases requiring more time.

Section 3601.40  Mining and Reclamation Plans

    The next 5 sections address mining and reclamation plans, 
describing what they must contain, how to submit them, and how BLM 
reviews, modifies, and approves them. These sections are based on 
current Secs. 3602.1 through 3602.1-3. We would add language to 
Sec. 3601.43 explaining that mining and reclamation plans are part of 
the contract or permit. We invite comment on whether we should retain 
the language in the proposed rule in Sec. 3601.44 that would 
substantively amend the provision to allow BLM to require modification 
of a plan to adjust to changed conditions or to correct an oversight 
even if the purchaser or permittee does not agree.

Section 3601.50  Administration of Sales Contracts and Free Use Permits

    This heading would introduce 2 sections describing BLM's inspection 
rights and the purchaser's or permittee's obligation to remove 
improvements and equipment after finishing operations.

Section 3601.51  How Will BLM Inspect My Operation?

    This is a new section that would require purchasers and permittees 
to allow BLM to inspect the mine operation, conduct surveys, and verify 
production and compliance with contract or permit terms and regulatory 
requirements. The change is prompted by internal BLM reviews and 
reports from the Office of the Inspector General of the Department of 
the Interior that show that the United States has been losing revenues 
due to under-reporting of mineral materials produced from the public 
lands, and from other forms of theft. Adding these inspection 
provisions will strengthen BLM's ability to spot-check operations for 
compliance with regulations and with the terms of contracts and 
permits. BLM is not proposing constant monitoring, as the cost would be 
prohibitive.

Section 3601.52  When Must I Remove Improvements and Equipment After I 
Finish My Operations?

    This proposed section would be based on current Sec. 3602.3. The 
only substantive amendment proposed is to add that cancellation, as 
well as expiration, of a contract or permit, will cause BLM to set a 
deadline of no more than 90 days for you to remove improvements and 
equipment.

Section 3601.60  Cancellation

    Section 3601.60 introduces 2 new sections that would set forth the 
grounds and procedures for BLM to cancel permits and contracts. BLM may 
cancel a permit or contract if you fail to comply with the Materials 
Act or the applicable regulations, or default in performing any of the 
terms or stipulations of the contract or permit. Under the rule, BLM 
would give you written notice of performance problems

[[Page 55868]]

and 30 days to correct them or to request more time to correct them or 
to show why BLM should not cancel the contract or permit. If you fail 
to make the corrections or the required showing within the time limit 
(including any extension granted), BLM would be able to cancel the 
contract or permit.
    These additions are necessary to allow BLM to promote efficient and 
expeditious development of these resources, and to protect the 
environment.

Section 3601.80  Appeals

    Although this section is new in this proposed rule, it reflects 
existing appeals rights. Parties adversely affected by a BLM decision 
may appeal to the Interior Board of Land Appeals, Office of Hearings 
and Appeals. You must file your appeal in writing in the office of the 
BLM official who made the decision within 30 days after the date of 
receipt of the decision. This section would direct appellants to the 
regulations in 43 CFR part 4 for appeals procedures.

Subpart 3602  Mineral Materials Sales

    This subpart would replace existing part 3610 and subpart 3610. It 
would contain the requirements and procedures pertaining to sales of 
mineral materials, except those from community pits and common use 
areas, which are covered in the next subpart.

Section 3602.10  Applying for a Mineral Materials Sales Contract

    The first 4 sections under this heading explain the application, 
pricing, and bonding process, and the effect of tract designation. Most 
of these provisions are carried over from the existing regulations, but 
Sec. 3602.12 would be new in the proposed rule. It would explain the 
relative rights and priorities among BLM land users when BLM designates 
tracts for competitive or noncompetitive sale of mineral materials. 
Under this section, any contract or permit BLM authorizes within 2 
years after the date we designate the tract would convey a right to 
remove the materials superior to any subsequent claim, entry, or other 
conflicting use of the land. This right would not prevent other uses or 
segregate the land from the operation of the public land laws, 
including the mining and mineral leasing laws. However, the rule would 
not allow a subsequent use to interfere with the extraction of mineral 
materials. Notation of the tract designation in the public land records 
would establish this superior right. For good cause, BLM could extend 
the 2-year period for one additional year. The Secretary has broad 
authority under the Materials Act, 30 U.S.C. 601, to prescribe 
regulations to govern the disposal of mineral materials. The proposed 
provision is necessary to prevent other claims, especially speculative 
ones, from interfering with and raising the cost of planned development 
of mineral materials.

Section 3602.13  How Does BLM Measure and Establish the Price of 
Mineral Materials?

    The proposed rule would amend this section to make it clear that 
BLM may reappraise at intervals of 2 years or more in order to adjust 
the contract price. Paragraph (b) of the existing regulations at 
Sec. 3610.1-2, which was written with the intent of preventing BLM from 
reappraising any more often than every 2 years, can be read to require 
reappraisal every 2 years, whether circumstances suggest that an 
appraisal may be needed or not. This proposed rule is designed to avoid 
such a misinterpretation.

Section 3602.14  What Kind of Financial Security Does BLM Require?

    This section appeared as Sec. 3610.1-5 in a proposed rule published 
on August 2, 1996 (61 FR 40373). That proposed rule attracted no public 
comments. The proposed rule published today would not make any 
substantive changes in that provision. It would require, for materials 
sales contracts of $2,000 or more, a performance bond of at least 5 
percent of total contract value, plus sufficient funds, at least $500, 
to pay for the reclamation required in the contract. If the contract 
sale is from a community pit and the purchaser pays a reclamation fee, 
we will not require the reclamation portion of the performance bond.
    The section would also allow BLM to require a performance bond of 
not more than 20 percent of the total contract value for contract sales 
of less than $2,000. Finally, it would list the types of instruments 
that are acceptable as performance bonds.

Section 3602.15  What Will Happen to My Bond if I Transferred All of My 
Interests or Operations to Another Bonded Party?

    This section is new in this proposed rule. It provides that BLM 
will cancel your bond obligations following an assignment if the 
assignee assumes all of your existing liabilities.

Section 3602.20  Administration of Mineral Materials Sales

    Here begins a series of sections describing, first, the actions BLM 
may take, and second, the responsibilities of purchasers, during the 
course of operations under a mineral materials sales contract.

Section 3602.21  What Payment Terms Apply to My Mineral Materials Sales 
Contract?

    This section of the proposed rule is derived from portions of 
Sec. 3610.1-3 of the existing rule. The proposed rule would make a few 
substantive changes.
     It would establish the payment terms for mineral materials 
sales contracts. Small contracts of $2,000 or less would still require 
you to pay the full amount upon signing the contract. Upon signing the 
contract, for a noncompetitive sale, or upon submitting a bid, in a 
competitive sale, for contracts for more than $2,000, the rule would 
reduce the initial installment you must pay to the greater of $500 or 5 
percent (instead of 10 percent) of the purchase price. Experience shows 
that an initial payment of 5 percent on larger contracts is sufficient 
to protect the public interest.
     The rule would remove as unnecessary the requirement that 
you make an advance payment before removing materials: the requirement 
that you pay the first installment with the bid or upon signing the 
contract is equivalent to requiring such an advance payment.
     Until production begins, you would be obligated to make an 
annual payment equal to the first installment. Once production begins, 
the rule would require you to pay for the amount of material you 
produce each month, and either produce annually enough to pay an amount 
equal to the first installment on or before the contract anniversary 
or, in lieu of such production, make an annual payment in the amount of 
the first installment. The deadline for paying the entire amount of the 
contract would be 60 days before its expiration date. If you fail to 
make the required payments, you would forfeit all payments made to 
date. The only changes proposed in this portion of the section are to 
improve clarity.

Section 3602.22  When Will a Contract Terminate?

    This section is new in the proposed rule, although it would 
incorporate parts of current Sec. 3610.1-3. It would state that a 
contract can terminate in 3 ways:
    (1) When the contract term expires;
    (2) If BLM cancels the contract for cause under Sec. 3601.60; or
    (3) By mutual agreement of BLM and the purchaser.

[[Page 55869]]

Section 3602.23  When Will BLM Make Refunds or Allow Credits?

    Section 3602.23 merely restates and clarifies current Sec. 3610.1-4 
provisions regarding refunds and credits. The changes are not 
substantive.

Section 3602.24  When May I Assign My Materials Sales Contract?

and

Section 3602.25  What Rights and Responsibilities Does My Assignee 
Assume?

    These 2 sections of the proposed rule are based on paragraphs (a) 
and (b) and paragraph (c), respectively, of Sec. 3610.1-6 in the 
existing regulations. Except for presenting them more clearly, the 
proposed rule would make no change in these provisions.

Section 3602.26  If I Assign My Contract, When Do My Obligations Under 
the Contract End?

    This section would clarify current Sec. 3610.1-6. When BLM approves 
an assignment, the assignor is released from liability for actions the 
assignee subsequently takes, but continues to be responsible, along 
with the assignee, for obligations that accrued before the approval. 
This protects the public's interest by ensuring that obligations such 
as reclamation arising from actions taken by the assignor are 
fulfilled. For example, to the extent the assignor disturbed an area to 
create a pit, the assignor would remain liable for reclamation of that 
area if problems arose enforcing reclamation provisions against the 
assignee.

Section 3602.27  When Will BLM Extend the Term of a Contract?

    This section would amend Sec. 3610.1-7 of the current regulations 
only by adding a provision allowing BLM to extend contracts with terms 
of 90 days or less if the purchaser requests it in writing no later 
than 15 days (instead of 30 days) before the expiration. This change is 
made to provide a more reasonable deadline for letting BLM know that 
you cannot complete a short-term contract on time.

Section 3602.28  What Records Must I Maintain and How Long Must I Keep 
Them?

and

Section 3602.29  How Will BLM Verify My Production?

    These 2 sections are new in the proposed rule. They would allow 
BLM--
     To require purchasers to keep, and make available to BLM, 
records, maps, and surveys relating to production verification and 
valuation for 6 years;
     To require purchasers to submit a report annually (or more 
frequently if BLM requires) of the amount of mineral materials mined or 
removed under their contract of sale; and
     To require pre-operation, annual, and post-operation 
surveys of mine sites.
    These requirements would allow BLM to verify that you make required 
payments and check your compliance with statutes, regulations, and 
contract terms.

Section 3602.30  Noncompetitive Sales

    This section would apply the general provisions on sales in 
proposed Sec. 3602.11 through 3602.29 to noncompetitive sales of 
mineral materials, and lead into a series of sections discussing 
noncompetitive sales.

Section 3602.31  What Volume Limitations Generally Apply to 
Noncompetitive Mineral Materials Sales?

    This section is not substantively changed in the proposed rule from 
current Sec. 3610.2-1, except to increase the amount that BLM may sell 
noncompetitively. It would set a maximum quantity for noncompetitive 
sale of 200,000 cubic yards (or weight equivalent) in any one State for 
the benefit of any one purchaser, in any 12-month period. These limits 
do not apply to mineral material sales in Alaska that BLM determines 
are needed for construction, operation, maintenance, or termination of 
the Trans-Alaska Pipeline System or the Alaska Natural Gas 
Transportation System. The volume limitations also do not apply if BLM 
determines that competition would not be possible, or that there is 
insufficient time to invite competitive bids due to an emergency 
affecting public property, health, or safety.

Section 3602.32  What Volume and Other Limitations Pertain to 
Noncompetitive Sales Associated With Public Works Projects?

    This section would amend current Sec. 3610.2-2 by increasing the 
noncompetitive sale limit for urgent public works projects from 200,000 
cubic yards to 400,000 cubic yards. BLM may make such a sale if we find 
the sale to be in the public interest, and time is insufficient for a 
competitive sale.

Section 3602.33  How Will BLM Dispose of Mineral Materials for Use in 
Development of Federal Mineral Leases?

    This section, like current Sec. 3610.2-3, would allow BLM to sell 
up to 200,000 cubic yards of mineral materials in one State in any 12-
month period noncompetitively for use in connection with the 
development of a Federal mineral lease. It would make clear that BLM 
will not charge for mineral materials that a Federal lessee needs to 
move in order to extract minerals under a Federal lease, so long as the 
materials remain within the boundaries of the lease. It would amend the 
current section by allowing such materials to be used without charge 
whether or not the lessee uses them for lease development.

Section 3602.40  Competitive Sales

    Following this heading is a series of sections explaining the 
process for competitive sales of mineral materials. Although all of the 
sections would be renumbered from the current regulations, this 
preamble only addresses those sections substantively changed.

Section 3602.43  How does BLM Conduct Competitive Mineral Materials 
Sales?

    In paragraph (b) of this section we explain what is a minor 
deficiency in a bid that BLM might waive. Our intent is that a defect 
that would not change the outcome of the bidding would not invalidate 
your bid. An example might be if you inadvertently provide an incorrect 
telephone number or other item of personal data.

Section 3602.45  What Conditions Must I Meet Before BLM Will Issue Me a 
Contract?

    The principal substantive change in this section in the proposed 
rule from current Sec. 3610.3-5 would allow the successful bidder an 
additional 30 days to comply with BLM information requests and to sign 
and return the contract, performance bond, and mining and reclamation 
plan, if required. The section would continue to allow BLM to extend 
this period an additional 30 days upon request. This change would allow 
you more reasonable deadlines to meet. If you fail to sign and return 
the contract by the due date you would forfeit the bid deposit and BLM 
would offer the contract to the next highest bidder for the amount of 
the original high bid. The section would allow BLM to include 
additional provisions and stipulations for resource and environmental 
protection. It also makes clear that BLM may refuse to issue a contract 
to the highest bidder if we determine that the

[[Page 55870]]

bidder cannot fulfill the obligations of the contract.

Section 3602.46  What Is the Term of a Competitive Contract?

    This section would clarify current Sec. 3610.3-6. It confirms that 
the standard term for a mineral materials contract is 10 years, but 
would make it clear that contracts can be extended and renewed.

Section 3602.47  When and How May I Renew My Competitive Contract?

and

Section 3602.48  What May BLM Require When Renewing My Contract?

    These sections would be new in the proposed rule. They would 
explain when and how to apply for contract renewal and what BLM may 
require when renewing a contract. A prerequisite for renewal would be 
payment of the full contract price of the initial contract. BLM would 
allow you to renew your contract in order to extract additional 
materials, not to complete the initial contract. You would be required 
to apply for renewal 90 days before the expiration date. Renewal would 
be for a maximum term of 10 years, but the rule would not limit the 
number of renewals. The rule would require reappraisal for each 
renewal, and would allow BLM to adjust bond requirements and impose 
environmental protection measures. Renewals are a less costly and more 
efficient alternative to reapplying, when a purchaser wishes to 
continue extracting materials from a particular site. For competitive 
contracts offered after the effective date of this rule, the sale 
notice would specify whether the contract was renewable under proposed 
Sec. 3602.42(b)(14). For existing contracts, BLM would decide upon 
request by the purchaser whether that contract is renewable. The rule 
would allow you to make the request at any time, but not later than 90 
days before the contract expires.

Section 3602.49  When Will BLM Issue a Non-Renewable Contract?

    This section would be new in this proposed rule. It is occasionally 
desirable for BLM to conduct a competitive sale of mineral materials 
under which the purchaser is limited to a single term to remove the 
contracted materials. BLM would issue such a contract if, for example, 
we contemplate a second use of the land after the conclusion of the 
first term or expect that the site may be appropriate for future use by 
multiple operators or by the local community. For instance, BLM may 
sell gravel from a flood control area before construction of the flood 
control structure, or may sell valuable deposits before a land exchange 
or sale. This section would provide this option for limited-term 
contracts.

Subpart 3603--Community Pits and Common Use Areas

    This subpart would renumber, reorganize, and clarify, but not 
substantively amend, current subpart 3604. It contains regulations on 
the sale of mineral materials from community pits and common use areas, 
which is referred to as non-exclusive disposal in the existing 
regulations. This subpart addresses only sales from these areas. The 
next subpart covers free use. See the Section Conversion Table in part 
II of this Supplementary Information for the source of each of the 
renumbered sections.

Subpart 3604--Free Use of Mineral Materials

    Subpart 3604 on free use of mineral materials would replace subpart 
3621 in the existing regulations. There are no substantive changes in 
this subpart in the proposed rule. See the Section Conversion Table in 
part II of this Supplementary Information for the source of each of the 
renumbered sections.

Subpart 3622--Free Use of Petrified Wood

    BLM is planning to include revised regulations for the free use of 
petrified wood in a future proposed rule addressing the use of fossils 
on the public lands. We have therefore decided not to propose extensive 
changes to subpart 3622 at this time. We do propose to change cross-
references to conform to changes made in this rule, and to conform to 
current Federal Register cross-reference style. The only substantive 
change is to remove the phrase ``prevents unnecessary and undue 
degradation of lands'' in accordance with our explanation under the 
Definitions section of this preamble, above, and substitute language 
referring to the prevention of hazards and minimization and mitigation 
of environmental damage, to be consistent with the remainder of the 
proposed rule. We note that the wording of the standard as stated in 
the current rule is, in any event, in error: the correct phrase from 43 
U.S.C. 1732(b) would be ``unnecessary or undue degradation.''

IV. Procedural Matters

    The principal author of this proposed rule is Dr. Durga N. Rimal of 
the Solid Minerals Group, assisted by Ted Hudson of the Regulatory 
Affairs Group, Washington Office, Bureau of Land Management.

Regulatory Planning and Review (E.O. 12866)

    This document is not a significant rule and is not subject to 
review by the Office of Management and Budget under Executive Order 
12866.
    (1) This rule will not have an annual economic effect of $100 
million or adversely affect in a material way the economy, an economic 
sector, productivity, competition, jobs, the environment, public health 
or safety, or other units of government or communities. A cost-benefit 
and economic analysis is not required.
    During fiscal years 1996 through 1998, BLM annually issued an 
average of a little over 2,900 mineral materials free use permits and 
sales contracts, valued at a little less than $12 million over the life 
of the contracts. Of this value, about $4.2 million was disposed of 
under free-use permits, and about $1.3 million was sold in non-
exclusive sales from community pits, with an average sale of about 
$570. There were 395 exclusive sales in an average fiscal year during 
the period, valued at a little less than $6.5 million, with an average 
sale of a little over $16,400.
    Average annual production for these 3 years, under existing and new 
permits and contracts (some being multi-year contracts) , exclusive and 
non-exclusive, amounted to $8.75 million.
    The changes proposed in this rule are:
     Adding procedures for inspection, production verification, 
and cancellation of contracts;
     Protecting material sales from interference by subsequent 
land users and claimants;
     Allowing BLM to dispose of mineral materials from 
unpatented mining claims;
     Reducing the amount of required installment payments;
     Increasing the value threshold triggering the requirement 
for competitive bidding;
     Allowing additional time to prepare and submit mining and 
reclamation plans;
     Adding certificates of deposit as an acceptable financial 
instrument for bonds;
     Ensuring that bonding amounts for sales contracts of 
$2,000 or more are adequate to perform reclamation; and
     Adding provision for the renewal of competitive sales 
contracts.
    These changes should not have appreciable effects on the economy, 
and any effects certainly will not approach $100 million annually.
    (2) This rule will not create a serious inconsistency or otherwise 
interfere

[[Page 55871]]

with an action taken or planned by another agency. The proposed rule 
will have no effect on disposal of mineral materials from national 
forest lands. The rule will not be in conflict with State regulations 
or requirements. The rule will have no effect on lands over which 
States have jurisdiction, other than to require their consent before 
materials may be disposed of from public lands that are withdrawn for 
their use, as already required. The rule expressly does not apply to 
national park lands or to Indian lands.
    (3) This rule does not alter the budgetary effects of entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
their recipients. BLM sells mineral materials at not less than the fair 
market value of the materials extracted, except in the instance of free 
use. The proposed rule will not have an effect on user fees.
    (4) This rule does not raise novel legal or policy issues.

Regulatory Flexibility Act

    The Department of the Interior certifies that this rule will not 
have a significant economic effect on a substantial number of small 
entities as defined under the Regulatory Flexibility Act (5 U.S.C. 601 
et seq.). For the purpose of this section a ``small entity'', as 
defined by the Small Business Administration for mining and quarrying 
of nonmetallic minerals, except fuels, is considered to be an 
individual, limited partnership, or small company (together with its 
affiliates), with fewer than 500 employees. Most sand and gravel 
companies and other mineral material enterprises that purchase mineral 
materials from BLM are small businesses, employing fewer than 500 
persons, and many governmental units that may obtain free use permits 
are also small entities.
    Nationwide average production of crushed stone and sand and gravel 
used for construction for 1996-1998 was about $12.3 billion per year. 
The value of production from public lands is a small portion of this 
figure. For instance, the value of mineral materials produced from 
mineral material sales contracts averaged about $74 million or less 
than \2/3\ of 1 percent of the national production. (Note that this 
represents the value of the product free on board (fob) at the pit, not 
the fair market value of the in-place (in situ) material. Experience 
shows the average in-place value to be about 8% of the fob price.) Even 
when we add production from free use permits the total annual 
production averages about $119 million, still under 1% of the national 
total. The specific changes in this rule, including changes in bonding 
requirements for material sales contracts of $2,000 or more, should not 
have an appreciable effect on small business. For average operations 
(contracts of $57,000) the bond amount is expected to decrease from 
$11,400 to $7,850, a reduction of $3,550. Therefore, the impact of this 
rule on the entire industry, including small business entities, is 
expected to be minor, and neither an initial Regulatory Flexibility 
Analysis nor a Small Entity Compliance Guide is required.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    a. Will not have an annual effect on the economy of $100 million or 
more. See the discussion in the previous section of this preamble.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. The rule should have little or no 
effect on prices of mineral materials, which are determined under the 
regulations by fair market value. The changes in the rule, which are 
described in the previous section of the preamble, should have no 
appreciable effect on costs.
    c. Will not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. The 
rule should have marginal economic effects on a small segment of one 
industry. The mineral materials industry deals with materials that 
generally have high bulk and low unit value, and thus does not have 
appreciable foreign competition due to the high costs of 
transportation.

Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or 
tribal governments or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on State, 
local or tribal governments or the private sector. The existing and 
proposed regulations both allow local government agencies free use of 
mineral materials for public projects. Such governments must show that 
their proposed use is a public project, and meet certain other 
requirements stated in the regulations. The rule would not require 
anything of State or local governments other than an application for a 
free use permit. A statement containing the information required by the 
Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.) is not required.

Takings (E.O. 12630)

    In accordance with Executive Order 12630, BLM has found that the 
rule does not have significant takings implications. No takings of 
personal or real property will occur as a result of this rule. Although 
the rule does include new provisions for contract cancellation, a 
contract issued under these regulations does not convey a property 
interest protected by the Takings Clause. A takings implication 
assessment is not required.

Federalism (E.O. 13132)

    In accordance with Executive Order 13132, BLM finds that the rule 
does not have sufficient federalism implications to warrant the 
preparation of a federalism summary impact statement. The main 
connection the mineral materials program regulations have with other 
levels of government is in the context of free use of these resources. 
The rule does not place any new burdens on this use. The rule does not 
have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
The rule does not preempt State law.

Civil Justice Reform (E.O. 12988)

    In accordance with Executive Order 12988, BLM finds that this rule 
does not unduly burden the judicial system and meets the requirements 
of sections 3(a) and 3(b)(2) of the Order. BLM consulted with the 
Department of the Interior's Office of the Solicitor throughout the 
drafting process.

Government-to-Government Relationship With Tribes

    In accordance with the President's memorandum of April 29, 1994, 
``Government-to-Government Relations with Native American Tribal 
Governments'' (59 FR 22951) and 512 DM 2, we have evaluated possible 
effects on Federally recognized Indian tribes and have determined that 
there are no effects on the tribes. The Materials Act expressly 
excludes Indian lands and lands set aside or held for the benefit or 
use of Indians from the effects of the statute, and thereby from the 
effects of the implementing regulations. The regulations do not bar 
Indians or Tribes from buying mineral materials from public lands, 
although the abundance of these materials on Indian lands has made such 
purchases

[[Page 55872]]

unnecessary. We do not know of any instances of tribal use of mineral 
materials from public lands.

Paperwork Reduction Act

    This regulation requires an information collection from 10 or more 
parties and a submission under the Paperwork Reduction Act is required. 
An OMB form 83-I prepared by BLM has been reviewed by the Department 
and sent to the Office of Management and Budget (OMB) for approval as 
required by 44 U.S.C. 3501 et seq. The collection of this information 
will not be required until it has been approved by OMB.

National Environmental Policy Act

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. A detailed statement 
under section 102(2)(C) of the National Environmental Policy Act of 
1969 (NEPA), 42 U.S.C. 4332(2)(C) is not required.
    BLM has determined that any environmental effects that this 
proposed rule may have are too broad, speculative, or conjectural to 
lend themselves to meaningful analysis. Each sale of mineral materials 
other than from a community pit or common use area, each designation of 
the community pit or common use area itself, and each free use permit, 
will be subject to evaluation under NEPA. The proposed rule also 
provides that BLM will perform additional NEPA analyses as required 
before renewing mineral materials sales contracts. Therefore, the 
proposed rule is categorically excluded from environmental review under 
section 102(2)(C) of the National Environmental Policy Act, pursuant to 
516 Departmental Manual (DM) 2.3A and 516 DM 2, Appendix I, Item 1.10, 
and does not meet any of the 10 criteria for exceptions to categorical 
exclusion listed in 516 DM 2, Appendix 2. Pursuant to Council on 
Environmental Quality regulations (40 CFR 1508.4) and the environmental 
policies and procedures of the Department of the Interior, the term 
``categorical exclusion'' means a category of actions that do not 
individually or cumulatively have a significant effect on the human 
environment and that have been found to have no such effect in 
procedures adopted by a Federal agency and for which neither an 
environmental assessment nor an environmental impact statement is 
required.

Clarity of This Regulation

    Executive Order 12866 requires each agency to write regulations 
that are easy to understand. We invite your comments on how to make 
this proposed rule easier to understand, including answers to questions 
such as the following: (1) Are the requirements in the proposed rule 
clearly stated? (2) Does the proposed rule contain technical language 
or jargon that interferes with its clarity? (3) Does the format of the 
proposed rule (grouping and order of sections, use of headings, 
paragraphing, etc.) aid or reduce its clarity? (4) Would the rule be 
easier to understand if it were divided into more (but shorter) 
sections? (A ``section'' appears in bold type and is preceded by the 
symbol ``Sec. '' and a numbered heading; for example, ``Sec. 3601.21 
What rights does a person acquire under a materials sales contract or 
use permit?''.) (5) Is the description of the proposed rule in the 
``Supplementary Information'' section of this preamble helpful in 
understanding the proposed rule? What else could we do to make the 
proposed rule easier to understand?
    Send a copy of any comments that concern how we could make this 
proposed rule easier to understand to: Office of Regulatory Affairs, 
Department of the Interior, Room 7229, 1849 C Street NW, Washington, DC 
20240. You may also e-mail the comments to this address: 
[email protected].

List of Subjects

43 CFR Part 3600

    Governmental contracts, Public lands-mineral resources, Reporting 
and recordkeeping requirements, Surety bonds.

43 CFR part 3610

    Governmental contracts, Public lands-mineral resources, Reporting 
and recordkeeping requirements, Surety bonds.

43 CFR part 3620

    Public lands-mineral resources, Reporting and recordkeeping 
requirements.

    Dated: August 1, 2000.
Sylvia V. Baca,
Assistant Secretary of the Interior.

    Under the authorities cited below, and for the reasons stated in 
the Supplementary Information, BLM proposes to amend Subchapter C, 
Chapter II, Subtitle B of Title 43 of the Code of Federal Regulations, 
as follows:
    1. Part 3600 is revised to read as follows:

PART 3600--MINERAL MATERIALS DISPOSAL

Subpart 3601--Mineral Materials Disposal; General Provisions

Sec.

Fundamental Provisions

3601.1   Purpose.
3601.3   Authority.
3601.5   Definitions.
3601.6   Policy.
3601.8   Public availability of information.
3601.9   Information collection.

Limitations on Disposal of Mineral Materials

3601.10   Limitations on BLM's discretion to dispose of mineral 
materials.
3601.11   When will environmental considerations prevent BLM from 
disposing of mineral materials?
3601.12   What areas does BLM exclude from disposal of mineral 
materials?
3601.13   How can I obtain mineral materials from Federal lands 
managed by other agencies?
3601.14   When can BLM dispose of mineral materials from unpatented 
mining claims?

Rights of Purchasers and Permittees

3601.20   Rights of parties.
3601.21   What rights does a person acquire under a materials sales 
contract or use permit?
3601.22   What rights remain with the United States when BLM sells 
or issues a permit for mineral materials?

Pre-Application Sampling and Testing

3601.30   Pre-application activities--how and when may I sample and 
test mineral materials?

Mining and Reclamation Plans

3601.40   Mining and reclamation plans.
3601.41   What information must I include in my mining plan?
3601.42   What information must I include in my reclamation plan?
3601.43   How will I know when BLM approves my mining and 
reclamation plans?
3601.44   How and when may my mining or reclamation plan be 
modified?

Contract and Permit Administration

3601.50   Administration of sales contracts and free use permits.
3601.51   How will BLM inspect my operation?
3601.52   After I finish my operations, when must I remove 
improvements and equipment?

Contract and Permit Cancellation

3601.60   Cancellation.
3601.61   When may BLM cancel my contract or permit?
3601.62   Cancellation procedure.

Unauthorized Use

3601.70   Unauthorized use.
3601.71   What constitutes unauthorized use?
3601.72   What are the consequences of unauthorized use?

Appeals

3601.80   How do I appeal a final decision by BLM?

[[Page 55873]]

Subpart 3602--Mineral Materials Sales

Applications

3602.10   Applying for a mineral materials sales contract.
3602.11   How do I request a sale of mineral materials?
3602.12   How does the mineral materials sales process affect other 
users of public lands that are subject to a sale designation?
3602.13   How does BLM measure and establish the price of mineral 
materials?
3602.14   What kind of financial security does BLM require?
3602.15   What will happen to my bond if I transferred all of my 
interests or operations to another bonded party?

Administration of Sales

3602.20   Administration of mineral materials sales.
3602.21   What payment terms apply to my mineral materials sales 
contract?
3602.22   When will a contract terminate?
3602.23   When will BLM make refunds or allow credits?
3602.24   When may I assign my materials sales contract?
3602.25   What rights and responsibilities does my assignee assume?
3602.26   If I assign my contract, when do my obligations under the 
contract end?
3602.27   When will BLM extend the term of a contract?
3602.28   What records must I maintain and how long must I keep 
them?
3602.29   How will BLM verify my production?

Noncompetitive Sales

3602.30   Noncompetitive sales.
3602.31   What volume limitations generally apply to noncompetitive 
mineral materials sales?
3602.32   What volume and other limitations pertain to 
noncompetitive sales associated with public works projects?
3602.33   How will BLM dispose of mineral materials for use in 
developing Federal mineral leases?
3602.34   What is the term of a noncompetitive contract?

Competitive Sales

3602.40   Competitive sales.
3602.41   When will BLM sell mineral materials on a competitive 
basis?
3602.42   How does BLM publicize competitive mineral materials 
sales?
3602.43   How does BLM conduct competitive mineral materials sales?
3602.44   How do I make a bid deposit?
3602.45   What conditions must I meet before BLM will issue me a 
contract?
3602.46   What is the term of a competitive contract?
3602.47   When and how may I renew my competitive contract?
3602.48   What may BLM require when renewing my contract?
3602.49   When will BLM issue a non-renewable contract?

Subpart 3603--Community Pits and Common Use Areas

Disposal of Materials--Community Pits and Common Use Areas

3603.10   Disposal of mineral materials from community pits and 
common use areas.
3603.11   What rights pertain to users of community pits?
3603.12   What rights pertain to users of common use areas?
3603.13   What price does BLM charge under materials sales contracts 
for mineral materials from community pits and common use areas?
3603.14   What plans do I need to prepare to mine or remove mineral 
materials from a community pit or common use area?

Reclamation

3603.20   Reclamation.
3603.21   What reclamation requirements pertain to community pits 
and common use areas?
3603.22   What fees must I pay to cover the cost of reclamation of 
community pits and common use areas?

Subpart 3604--Free Use of Mineral Materials

Obtaining Free Use Permits

3604.10   Permits for free use of mineral materials.
3604.11   How do I apply for a free use permit?
3604.12   Who may obtain a free use permit?
3604.13   When will BLM decline to issue a free use permit to a 
qualified applicant?

Administration of Free Use

3604.20   Administration of free use permits.
3604.21   What is the term of a free use permit?
3604.22   What conditions and restrictions pertain to my free use 
permit?
3604.23   When and how may I assign my free use permit?
3604.24   Who may remove materials on my behalf?
3604.25   What bond requirements pertain to free use permits?
3604.26   When will BLM cancel my permit?
3604.27   What rights does a free use permit give me against other 
users of the land?

    Authority: 30 U.S.C. 601 et seq.; 43 U.S.C. 1201, 1732, 1733, 
1740; Sec. 2, Act of September 28, 1962 (Pub. L. 87-713, 76 Stat. 
652).

Subpart 3601--Mineral Materials Disposal; General Provisions

Fundamental Provisions


Sec. 3601.1  Purpose.

    The regulations in this part establish procedures for the 
exploration, development, and disposal of mineral material resources on 
the public lands, and for the protection of the resources and the 
environment. The regulations pertain to both permits for free use and 
contracts for sale.


Sec. 3601.3  Authority.

    (a) The authority for BLM to dispose of sand, gravel, and other 
mineral and vegetative materials that are not subject to mineral 
leasing or location under the mining laws is found in the Act of July 
31, 1947, as amended (30 U.S.C. 601 et seq.), commonly referred to as 
the Materials Act. This authority extends to sale and free use of these 
materials. The authority for BLM to allow limited quantities of 
petrified wood to be removed without charge from public lands is found 
in section 2 of the Act of September 28, 1962 (Pub. L. 87-713, 76 Stat. 
652).
    (b) Section 302 of the Federal Land Policy and Management Act of 
1976 (FLPMA) (43 U.S.C. 1732) provides the general authority for BLM to 
manage the use, occupancy, and development of the public lands under 
the principles of multiple use and sustained yield in accordance with 
the land use plans developed under FLPMA.
    (c) Section 304(b) of FLPMA (43 U.S.C. 1734) and the Independent 
Offices Appropriation Act of 1952 (31 U.S.C. 9701) authorize the U.S. 
Government to collect fees and to require reimbursement of its costs.


Sec. 3601.5  Definitions.

    As used in this part the term:
    Act means the Materials Act of July 31, 1947, as amended (30 U.S.C. 
601, et seq.).
    BLM means the Bureau of Land Management.
    Common use area means a generally broad geographic area from which 
BLM can make disposals of mineral materials to many persons, with only 
negligible surface disturbance. The use is dispersed throughout the 
area.
    Community pit means a relatively small, defined area from which BLM 
can make disposals of mineral materials to many persons. The surface 
disturbance is usually extensive in the confined area.
    Mineral materials include, but are not limited to, petrified wood 
and common varieties of sand, stone, gravel, pumice, pumicite, cinders, 
and clay.
    Performance bond means a bond to ensure compliance with the terms 
of the contract and reclamation of the site as BLM requires.
    Permittee means any Federal, State, or territorial agency, unit, or 
subdivision, including municipalities, or any non-profit organization, 
to which BLM has issued a free use permit for the removal of mineral 
materials from the public lands.
    Public lands means any lands and interest in lands owned by the 
United States and administered by the

[[Page 55874]]

Secretary of the Interior through the Bureau of Land Management without 
regard to how the United States acquired ownership, except lands held 
for the benefit of Indians, Aleuts, and Eskimos.
    Purchaser means any person, including a business or government 
entity, buying or holding a contract to purchase mineral materials on 
the public lands.


Sec. 3601.6  Policy.

    It is BLM's policy:
    (a) To sell mineral material resources under BLM's jurisdiction at 
not less than fair market value;
    (b) To prevent unauthorized removal of mineral materials;
    (c) To require that all removals of mineral materials be properly 
accounted for;
    (d) To permit free use of these materials by Federal, State, 
Territorial, and local government entities and non-profit organizations 
for qualified purposes;
    (e) To make mineral materials available when it will not be 
detrimental to the public interest; and
    (f) To protect public land resources and the environment and 
minimize damage to public health and safety during the authorized 
exploration for and the removal of such minerals.


Sec. 3601.8  Public availability of information.

    (a) All data and information concerning Federal and Indian minerals 
that you submit under this part 3600 are subject to part 2 of this 
title. Part 2 of this title includes the regulations of the Department 
of the Interior covering the public disclosure of data and information 
contained in Department of the Interior records. Certain mineral 
information not protected from disclosure under part 2 of this title 
may be made available for inspection without a Freedom of Information 
Act (FOIA)(5 U.S.C. 552) request.
    (b) When you submit data and information under this part 3600 that 
you believe to be exempt from disclosure to the public, you must 
clearly mark each page that you believe includes confidential 
information. BLM will keep all data and information confidential to the 
extent allowed by Sec. 2.13(c) of this title.


Sec. 3601.9  Information collection.

    The information collection requirements contained in part 3600 have 
been approved by the Office of Management and Budget under 44 U.S.C. 
3501 et seq. and assigned clearance number 1004-0103. BLM is collecting 
the information to allow us to determine if you are qualified to 
purchase or have free use of mineral materials on the public lands. You 
must respond to obtain a benefit.

Limitations on Disposal of Mineral Materials


Sec. 3601.10  Limitations on BLM's discretion to dispose of mineral 
materials.


Sec. 3601.11  When will environmental considerations prevent BLM from 
disposing of mineral materials?

    BLM will not dispose of mineral materials if we determine that the 
aggregate damage to public lands and resources would exceed the public 
benefits that BLM expects to be derived from the proposed disposition.


Sec. 3601.12  What areas does BLM exclude from disposal of mineral 
materials?

    BLM will not dispose of mineral materials from wilderness areas or 
other areas where it is expressly prohibited by law. This includes 
national parks and monuments. We also will not dispose of mineral 
materials from Indian lands and lands set aside or held for the use or 
benefit of Indians.


Sec. 3601.13  How can I obtain mineral materials from Federal lands 
managed by other agencies?

    If you wish to obtain mineral materials from lands managed by other 
Federal agencies or by State or local governments, you should apply to 
the appropriate representative of that agency. That office will either 
consent to or deny your application or suggest an alternative source. 
If the other agency consents to the disposal, it may instruct BLM to 
initiate the disposal under the regulations in this part, or conduct 
the disposal itself.


Sec. 3601.14  When can BLM dispose of mineral materials from unpatented 
mining claims?

    BLM has authority to dispose of mineral materials from unpatented 
mining claims if disposal does not endanger or materially interfere 
with prospecting, mining, or processing operations, or uses reasonably 
incident thereto. BLM will ask a claimant for a waiver before disposing 
of mineral materials from a claim. If the claimant refuses to sign a 
waiver, BLM will make sure that disposal will not be detrimental to the 
public interest and consult with the Solicitor's Office, if necessary, 
before proceeding with the disposal.

Rights of Purchasers and Permittees


Sec. 3601.20  Rights of parties.


Sec. 3601.21  What rights does a person acquire under a materials sales 
contract or use permit?

    (a) If you are a purchaser under a contract of sale or a permittee 
with a permit for free use, unless otherwise provided, you have the 
right to:
    (1) Extract, remove, process, and stockpile the material until the 
contract or permit terminates, regardless of any rights others acquire 
later under the provisions of the general land laws; and
    (2) Use and occupy the described lands to the extent necessary for 
fulfillment of the contract or permit.
    (b) Users of the lands covered by your materials sales contract or 
free use permit who acquire their rights later than you will be subject 
to your existing use authorization. This applies to uses due to any 
later settlement, location, lease, sale, or other appropriation under 
the general land laws, including the mineral leasing and mining laws.


Sec. 3601.22  What rights remain with the United States when BLM sells 
or issues a permit for mineral materials?

    Your sale contract or use permit is subject to the continuing right 
of the United States to issue leases, permits, and licenses for the use 
and occupancy of the lands, if this authorized use does not endanger or 
materially interfere with the production or removal of materials under 
contract or permit.

Pre-Application Sampling and Testing


Sec. 3601.30  Pre-application activities--how and when may I sample and 
test mineral materials?

    (a) You may sample and test mineral materials under a letter of 
authorization from BLM. The letter of authorization expires after 90 
days, but may be extended for an additional 90 days if you show BLM 
that an extension is necessary. BLM may authorize these activities 
before issuing a sales contract or free use permit.
    (b) You must submit your sampling and testing findings to BLM. All 
information you submit under this section is subject to part 2 of this 
title, which sets forth the rules of the Department of the Interior 
relating to public availability of information contained in 
Departmental records, as provided in Sec. 3601.8 of this part.
    (c) A letter from BLM authorizing you to sample and test mineral 
materials does not give you a preference right to a sales contract or 
free use permit.
    (d) BLM may impose bonding and reclamation requirements on sampling

[[Page 55875]]

and testing activities that you conduct under a letter of 
authorization.

Mining and Reclamation Plans


Sec. 3601.40  Mining and reclamation plans.

    BLM may require you to submit mining and reclamation plans before 
we begin any environmental review or issue a contract or permit. You 
may combine these plans in one document.


Sec. 3601.41  What information must I include in my mining plan?

    Your mining plan must include:
    (a) A map, sketch, or aerial photograph identifying the area for 
which you are applying, the area you plan to disturb, existing and 
proposed access, and the names and locations of major topographic and 
known cultural features;
    (b) A description of your proposed methods of operation and the 
periods during which you will operate;
    (c) A description of measures you will take to prevent hazards to 
public health and safety and to minimize and mitigate environmental 
damage; and
    (d) Such other information as BLM may require.


Sec. 3601.42  What information must I include in my reclamation plan?

    Your reclamation plan must include:
    (a) A statement of the proposed manner and time in which you will 
complete reclamation of the areas disturbed by your operations;
    (b) A map or sketch which delineates the area you will reclaim; and
    (c) Such other information as BLM may require.


Sec. 3601.43  How will I know when BLM approves my mining and 
reclamation plans?

    (a) After reviewing your mining and reclamation plans, BLM will 
notify you of any deficiencies in the plans and recommend the changes 
necessary. BLM will notify you when we approve your plan. Approved 
mining and reclamation plans are a part of the contract or permit.
    (b) Your operation must not deviate from the plan BLM approves, 
unless it is modified under Sec. 3601.44.


Sec. 3601.44  How and when may my mining or reclamation plan be 
modified?

    (a) Either you or BLM may initiate a modification of an approved 
mining or reclamation plan to adjust for changed conditions or to 
correct any oversight. If BLM notifies you that you must modify your 
plan, you will have 30 days to prepare the modification or explain why 
you need more time. If you fail to modify your plan to BLM's 
satisfaction, BLM may order you to stop all operations under your 
contract or permit.
    (b) When you ask to change an approved mining or reclamation plan, 
BLM will review the proposed modification and within 30 days will 
notify you of approval, any needed changes, or denial.

Contract and Permit Administration


Sec. 3601.50  Administration of sales contracts and free use permits.


Sec. 3601.51  How will BLM inspect my operation?

    You must allow BLM access at any reasonable time:
    (a) To inspect or investigate the mine condition;
    (b) To conduct surveys;
    (c) To estimate the volume, types, and composition of commodities 
mined or removed; and
    (d) To determine whether you comply with established requirements.


Sec. 3601.52  After I finish my operations, when must I remove 
improvements and equipment?

    After your contract or permit period expires, or after cancellation 
of your permit or contract, BLM may grant you up to 90 days, excluding 
periods of inclement weather, to remove the equipment, personal 
property, and any other improvements that you placed on the public 
lands. You may leave in place improvements such as roads, culverts, and 
bridges if BLM consents. If you fail to remove such equipment, personal 
property, or other improvement, it will become the property of the 
United States, but you will remain liable for the cost of its removal 
and for restoration of the site.

Contract and Permit Cancellation


Sec. 3601.60  Cancellation.


Sec. 3601.61  When may BLM cancel my contract or permit?

    BLM may cancel your contract or free use permit if you:
    (a) Fail to comply with the provisions of the Materials Act of 
1947, as amended (30 U.S.C. 601 et seq.);
    (b) Fail to comply with any applicable regulations, including the 
inspection requirements of Sec. 3601.51; or
    (c) Default in the performance of any of the terms, covenants, or 
stipulations of the contract.


Sec. 3601.62  Cancellation procedure.

    (a) BLM will give you written notice of any defaults, breach, or 
cause of forfeiture. You have 30 days after receipt of the notice:
    (1) To correct all defaults;
    (2) To request an extension of time in which to correct the 
defaults; or
    (3) To submit evidence showing to the satisfaction of BLM why we 
should not cancel your contract or free use permit.
    (b) If you fail to respond to the notice in one of the ways 
provided for in paragraph (a) of this section, BLM may cancel the 
contract or permit.
    (c) If you are adversely affected by a cancellation, you may appeal 
under Sec. 3601.80.

Unauthorized Use


Sec. 3601.70  Unauthorized use.


Sec. 3601.71  What constitutes unauthorized use?

    You must not extract, sever, or remove mineral materials from 
public lands under the jurisdiction of the Department of the Interior, 
unless BLM or another Federal agency with jurisdiction authorizes the 
removal by sale or permit. Violation of this prohibition is 
unauthorized use.


Sec. 3601.72  What are the consequences of unauthorized use?

    Unauthorized users are liable for damages to the United States, and 
are subject to prosecution for such unlawful acts (see subpart 9239 of 
this chapter).

Appeals


Sec. 3601.80  How do I appeal a final decision by BLM?

    If a BLM decision adversely affects you, you may appeal the 
decision in accordance with parts 4 and 1840 of this title.

Subpart 3602--Mineral Materials Sales

Applications


Sec. 3602.10  Applying for a mineral materials sales contract.


Sec. 3602.11  How do I request a sale of mineral materials?

    You may submit a written request for sale of mineral materials to 
the BLM office with jurisdiction over the site containing the 
materials. No particular form is required for this request. BLM may 
also initiate the sale without such a request.


Sec. 3602.12  How does the mineral materials sales process affect other 
users of public lands that are subject to a sale designation?

    When BLM designates tracts for competitive or noncompetitive sale 
of mineral materials, and notes the designation in the public land 
records, it creates a right to remove the materials superior to any 
subsequent claim, entry, or other conflicting use of the land. This 
right attaches to all contracts and permits BLM authorizes within 2 
years after the date we designate the tract.

[[Page 55876]]

    BLM may extend this 2-year period for one additional year for good 
cause. This right does not prevent other uses or segregate the land 
from the operation of the public lands laws, including the mining and 
mineral leasing laws. However, such subsequent uses must not interfere 
with the extraction of mineral materials.


Sec. 3602.13  How does BLM measure and establish the price of mineral 
materials?

    (a) BLM will not sell mineral materials at less than fair market 
value. BLM will determine fair market value by appraisal.
    (b) BLM may periodically reappraise the value of mineral materials 
yet to be removed under a contract, and adjust the contract price 
accordingly. BLM will not adjust the price during the first 2 years of 
the contract. BLM also will not adjust the contract price during the 2-
year period following any adjustment. However, BLM may adjust the price 
at the beginning of any contract renewal period.
    (c) BLM measures mineral materials by in-place volume or weight 
equivalent. When BLM requires you to measure materials, you may use 
either of these methods, and BLM will verify your results.


Sec. 3602.14  What kind of financial security does BLM require?

    (a) BLM will require, for contracts of $2,000 or more, a 
performance bond of:
    (1) At least 5 percent of total contract value; plus,
    (2) An amount large enough to meet the reclamation standards 
provided for in the contract, but at least $500. Where BLM makes 
contract sales from a community pit and you pay a reclamation fee as 
the purchaser, BLM will not require this portion of the performance 
bond.
    (b) BLM may require a performance bond for contract sales of less 
than $2,000, but will not require a bond for more than 20 percent of 
the total contract value.
    (c) A performance bond may be a:
    (1) Bond of a corporate surety shown on the approved list issued by 
the U.S. Treasury Department;
    (2) Certificate of deposit that:
    (i) Is issued by a financial institution whose deposits are 
Federally insured;
    (ii) Does not exceed the maximum insurable amount set by the 
Federal Deposit Insurance Corporation;
    (iii) Is made payable or assigned to the United States;
    (iv) Grants BLM authority to demand immediate payment if you fail 
to meet the terms and conditions of the contract;
    (v) States that no party may redeem it before BLM approves its 
redemption; and (vi) Otherwise conforms to BLM's instructions as found 
in the contract terms;
    (3) Cash bond, with a power of attorney to BLM to convert it upon 
the purchaser's failure to meet the terms and conditions of the 
contract; or
    (4) Negotiable Treasury bond of the United States of a par value 
equal to the amount of the required bond, together with a power of 
attorney to BLM to sell it upon the purchaser's failure to meet the 
terms and conditions of the contract.


Sec. 3602.15  What will happen to my bond if I transferred all of my 
interests or operations to another bonded party?

    BLM will cancel your bond obligations following approval of the 
transfer of your interests or operations if the party to whom you 
transferred provides a bond that assumes all of your existing 
liabilities.

Administration of Sales


Sec. 3602.20  Administration of mineral materials sales.


Sec. 3602.21  What payment terms apply to my mineral materials sales 
contract?

    (a) Under a contract of sale for mineral materials--
    (1) For contract sales of $2,000 or less, you must pay the full 
amount before BLM will sign the contract.
    (2) When the sale exceeds $2,000, you may make installment 
payments. The first installment payment must be the greater of $500 or 
5 percent of the total purchase price. If you elect to make installment 
payments--
    (i) For non-competitive sales, you must pay the first installment 
at or before the time the contract is awarded;
    (ii) For competitive sales, you must pay the first installment as a 
deposit at the time the bid is submitted; and
    (iii) For noncompetitive or competitive sales, once you have 
removed materials, you must make each subsequent installment payment 
monthly in an amount equal to the value of the minerals removed; 
however, you must pay the balance of the purchase price not later than 
60 days before the expiration date of the contract. BLM will credit 
your first installment payment to you at the time of your final 
payment.
    (3) You must annually produce an amount sufficient to pay to the 
United States a sum of money equal to the first installment, or in lieu 
of such production, you must make an annual payment in the amount of 
the first installment. If you make production payments that are less 
than the first installment, your annual ``in lieu'' payment must be the 
difference between the production payments and the amount of the first 
installment. These annual payments are due on or before the anniversary 
date of the contract.
    (b) If you fail to make the required payments under the terms and 
conditions of the contract and BLM cancels your contract under 
Sec. 3601.61, you will forfeit all moneys that you paid.


Sec. 3602.22  When will a contract terminate?

    (a) Your contract will terminate when--
    (1) Its term expires; or
    (2) BLM cancels your contract under Sec. 3601.60 et seq. of this 
part.
    (b) You and BLM may, by agreement, terminate the sales contract at 
any time.


Sec. 3602.23  When will BLM make refunds or allow credits?

    (a) BLM may make refunds or allow credits if--
    (1) Upon expiration of the contract your total payments exceed the 
total value of mineral materials covered by the contract;
    (2) BLM determines that insufficient mineral materials existed in 
the sales area to fulfill the terms of the contract; or
    (3) Materials paid for are unavailable as a result of termination 
of a contract by mutual agreement under Sec. 3602.22(b) of this part.
    (b) BLM will reduce the amount of the refund by the amount of the 
administrative cost of processing the disposal action. If these 
administrative costs exceed your total payments, BLM will not make a 
refund or allow a credit.
    (c) BLM may credit to future production, but not refund, payments 
that you make in lieu of production under Sec. 3602.21(a)(3). However, 
if, upon expiration of the contract, the total value of payments you 
have made exceeds the total value of mineral materials covered by your 
contract, BLM will refund the difference in accordance with paragraphs 
(a) and (b) of this section.


Sec. 3602.24  When may I assign my materials sales contract?

    (a) You may not assign the contract or any interest therein unless 
BLM approves the transfer in writing.
    (b) BLM will not approve your proposed assignment of contract, 
unless--
    (1) Your assignee--
    (i) Furnishes a performance bond as required by Sec. 3602.14 of 
this part; or
    (ii) Obtains a written commitment from the previous surety to be 
bound by the assignment when BLM approves it; and

[[Page 55877]]

    (2) The assignment contains all terms and conditions agreed upon in 
your contract.


Sec. 3602.25  What rights and responsibilities does my assignee assume?

    When BLM approves your assignment, your assignee will be entitled 
to all the rights and be subject to all the obligations under the 
contract.


Sec. 3602.26  If I assign my contract, when do my obligations under the 
contract end?

    When BLM approves your assignment, you are released from any 
further liability under the contract for actions the assignee may take 
after the effective date of the assignment. You continue to be 
responsible for obligations, such as reclamation, that accrued before 
the approval date, whether or not you knew of them at the time of the 
transfer.


Sec. 3602.27  When will BLM extend the term of a contract?

    BLM may grant a one-time extension of the contract not to exceed 1 
year, if:
    (a)(1) For contracts with terms over 90 days, BLM receives your 
written request between 30 and 90 days before the expiration of the 
contract; or
    (2) For contracts with terms of 90 days or less, BLM receives your 
written request not later than 15 days before the expiration of the 
contract; and
    (b) You show in writing that the delay in removal of the mineral 
materials was due to causes beyond your control and without fault or 
negligence on your part.


Sec. 3602.28  What records must I maintain and how long must I keep 
them?

    (a) BLM may, as necessary, require you to maintain and preserve for 
6 years records, maps, and surveys relating to production verification 
and valuation. These include, but are not limited to, detailed records 
of quantity, types, and value of commodities you moved, processed, 
sold, delivered, or used.
    (b) You must make such records available to BLM to allow us to 
determine whether you have complied with statutes, regulations, and the 
terms of the contract.


Sec. 3602.29  How will BLM verify my production?

    (a) You must submit an annual report of the amount of mineral 
materials you have mined or removed under your contract of sale, so BLM 
can verify that you have made the required payments. BLM may require 
more frequent reporting.
    (b) BLM may require you to conduct pre-operation, annual, and post-
operation volumetric surveys of the mine site.

Noncompetitive Sales


Sec. 3602.30  Noncompetitive sales.

    In addition to the following sections, Secs. 3602.31 through 
3602.35, the provisions of Secs. 3602.11 through 3602.29 of this part 
also apply to competitive sales.


Sec. 3602.31  What volume limitations generally apply to noncompetitive 
mineral materials sales?

    (a) BLM may sell, at not less than fair market value, and without 
advertising or calling for bids, mineral materials not greater than 
200,000 cubic yards (or weight equivalent) in any individual sale, when 
BLM determines it to be:
    (1) In the public interest; and
    (2) Impracticable to obtain competition.
    (b) BLM will not approve noncompetitive sales that exceed a total 
aggregate of 200,000 cubic yards (or weight equivalent) made in any one 
State for the benefit of any one purchaser, whether an individual, 
partnership, corporation, or other entity, in any period of 12 
consecutive months.
    (c) The volume limitations in paragraphs (a) and (b) of this 
section do not apply to sales in the State of Alaska that BLM 
determines are needed for construction, operation, maintenance, or 
termination of the Trans-Alaska Pipeline System or the Alaska Natural 
Gas Transportation System.
    (d) The volume limitations in paragraphs (a) and (b) of this 
section do not apply if:
    (1) The Director determines that circumstances make it impossible 
to obtain competition; or
    (2) There is insufficient time to invite competitive bids, because 
of an emergency situation affecting public property, health, or safety.


Sec. 3602.32  What volume and other limitations pertain to 
noncompetitive sales associated with public works projects?

    BLM may sell mineral materials not exceeding 400,000 cubic yards 
(or weight equivalent), at not less than fair market value, without 
advertising or calling for bids if:
    (a) BLM determines the sale to be in the public interest; and
    (b) The materials will be used in connection with an urgent public 
works improvement program on behalf of a Federal, State, or local 
governmental agency, and time does not permit advertising for a 
competitive sale.


Sec. 3602.33  How will BLM dispose of mineral materials for use in 
developing Federal mineral leases?

    (a) If you propose to use mineral materials in connection with 
developing a mineral lease issued by BLM, we may, without calling for 
competitive bids, sell you at fair market value a volume of mineral 
materials not exceeding 200,000 cubic yards (or weight equivalent) in 
one State in any period of 12 consecutive months.
    (b) BLM will not charge for mineral materials that you must move in 
order to extract minerals under a Federal lease, whether or not you use 
them for lease development, if the materials remain within the 
boundaries of the lease.


Sec. 3602.34  What is the term of a noncompetitive contract?

    BLM will not issue a noncompetitive contract for the sale of 
mineral materials for a term exceeding 5 years, excluding any contract 
extension under Sec. 3602.27 and any period for removal of equipment 
and improvements under Sec. 3601.52.

Competitive Sales


Sec. 3602.40  Competitive sales.

    In addition to the following sections, Secs. 3602.41 through 
3602.49, the provisions of Secs. 3602.11 through 3602.29 of this part 
also apply to competitive sales.


Sec. 3602.41  When will BLM sell mineral materials on a competitive 
basis?

    Except for sales from community pits and common use areas under 
subpart 3603, and noncompetitive sales under Sec. 3602.30 et seq., BLM 
will make sales only after inviting competitive bids through 
publication and posting under Sec. 3602.42.


Sec. 3602.42  How does BLM publicize competitive mineral materials 
sales?

    (a) When offering mineral materials for sale by competitive 
bidding, BLM:
    (1) Will advertise the sale by publishing a notice in a newspaper 
of general circulation in the area where the material is located, on 
the same day once a week for 2 consecutive weeks;
    (2) May extend, at BLM's discretion, the period of time for 
advertising; and
    (3) Will post a notice of sale in a conspicuous place in the office 
where you will submit bids.
    (b) In the advertisement of sale, BLM will state:
    (1) The location by legal description of the tract or tracts on 
which we are offering the materials;
    (2) The kind of materials we are offering;
    (3) The estimated quantities of materials we are offering;
    (4) The unit of measurement;
    (5) The appraised prices;
    (6) The time and place for receiving and opening of bids;

[[Page 55878]]

    (7) The minimum deposit we require;
    (8) The site access that will be available to the purchaser;
    (9) The method of bidding;
    (10) That the purchaser must file mining and reclamation plans and 
that we require reclamation, if applicable;
    (11) The bonding requirement;
    (12) The location for inspection of contract terms and proposed 
stipulations;
    (13) The office where you may obtain additional information;
    (14) Whether the contract will be renewable; and
    (15) Any additional information that BLM deems necessary.
    (c) BLM will not hold sales sooner than one week after the last 
advertisement inviting competitive bids.


Sec. 3602.43  How does BLM conduct competitive mineral materials sales?

    (a) To bid at a competitive sale you must submit a written sealed 
bid, make oral bids, or do both as BLM directs in the sale notice. If 2 
or more persons make identical high sealed bids, BLM will determine the 
highest bid by holding an oral auction among the persons making the 
high bids. If no oral bid is made higher than the sealed bids, BLM will 
pick the successful bidder by lot. If you are the high bidder at an 
oral auction, you must confirm that bid in writing immediately after 
BLM announces the high bid.
    (b) When BLM determines that it is in the public interest to do so, 
we may reject any or all bids, or may waive minor deficiencies in the 
bids that would not ordinarily affect the outcome of the bidding.


Sec. 3602.44  How do I make a bid deposit?

    (a) If you wish to make a bid to purchase mineral materials, you 
must submit a deposit in advance of the sale.
    (1) Your sealed bids must contain a deposit.
    (2) At an oral auction, you must make your deposit before the 
opening of the bidding.
    (b) Your deposit must be the greater of $500 or 10 percent of the 
appraised value as specified in the sale advertisement.
    (c) Your deposit may be in the form of cash, a money order, a bank 
draft, or a cashier's or certified check made payable to the Bureau of 
Land Management.
    (d) If you are not the successful bidder, BLM will return your bid 
deposit when the bidding concludes.
    (e) If you are the successful bidder, BLM will apply your deposit 
to the purchase price.


Sec. 3602.45  What conditions must I meet before BLM will issue me a 
contract?

    (a) BLM may require you to furnish information we find necessary to 
determine whether you are able to meet the obligations of the contract. 
We will award the contract to you if you made the highest bid, unless 
we determine that you are unable to meet the obligations of the 
contract, or you are unwilling to accept the terms of the contract, or 
BLM rejects all bids.
    (b) If BLM determines that you are unable to meet the obligations 
of the contract, we will refund your deposit. If BLM awards you the 
contract, you must, within 60 days after receiving it, sign and return 
the contract, together with a performance bond and mining and 
reclamation plan when BLM requires them. BLM may extend this period an 
additional 30 days if you request it in writing within the first 60-day 
period. If you fail to sign and return the contract within the first 
60-day period, or an approved 30-day extension period, you will forfeit 
the bid deposit. If BLM determines that you are unable to meet the 
obligations of the contract or if you fail to sign and return the 
contract within the time period specified, BLM may then offer and award 
the contract for the amount of the high bid to the person making the 
next highest complete bid who is qualified and willing to accept the 
contract, when that person redeposits the amount required under 
Sec. 3602.44(b).
    (c) BLM will make all sales on BLM standard contract forms approved 
by the Office of Management and Budget. We may include additional 
provisions and stipulations in the contract.


Sec. 3602.46  What is the term of a competitive contract?

    BLM will not issue a competitive contract for the sale of mineral 
materials for a term exceeding 10 years. However, the 10-year period 
does not include any contract extension under Sec. 3602.27, any 
contract renewal under Sec. 3602.47, and any periods for removal of 
equipment and improvements under Sec. 3601.52 of this part.


Sec. 3602.47  When and how may I renew my competitive contract?

    (a) Applying for competitive contract renewal. When you have paid 
the United States the full contract price for the mineral materials you 
have purchased, you may apply for renewal of the contract in order to 
purchase and extract additional material that may be available at the 
contract site. You must submit your request for renewal of the contract 
at least 90 days before its expiration date. You do not need to use a 
specific form.
    (b) BLM's response to the application. BLM will renew your contract 
if--
    (1) You meet all the requirements of this section;
    (2) Your contract is not limited under Sec. 3602.49; and
    (3) BLM determines that you are able to fulfill the obligations of 
a new contract.
    (c) Renewal term. BLM will renew your contract for a maximum term 
of 10 additional years. The renewal may be for less than 10 years if 
you do not request that much time, or if BLM finds that the quantity of 
material involved does not justify a 10-year term.
    (d) Number of times a contract may be renewed. There is no maximum 
number of times you may apply for renewal.


Sec. 3602.48  What may BLM require when renewing my contract?

    (a) Reappraisal. BLM will not grant a renewal without requiring a 
reappraisal under Sec. 3602.13.
    (b) Bond amount and terms. Before renewing your contract, BLM may 
require you to increase, or allow you to decrease, the amount of the 
performance bond you posted under Sec. 3602.14. BLM may also require 
other bond modifications to ensure coverage for the renewed contract.
    (c) Environmental protection requirements. Before renewing your 
contract, BLM will perform additional environmental analysis as 
required, and may require you to adopt additional measures to prevent 
hazards to public health and safety, and to minimize and mitigate 
environmental damage.
    (d) Other requirements. BLM may require additions or changes to 
other terms or conditions of your contract.


Sec. 3602.49  When will BLM issue a non-renewable contract?

    (a) BLM may restrict your contract to a single term or otherwise 
limit its duration. This restriction will be based on a finding that--
    (1) The land should be used for another, possibly conflicting, 
purpose after mineral materials are removed;
    (2) The deposit of mineral materials may be appropriate for future 
use by multiple operators or by the local community; or
    (3) Other circumstances make renewal inappropriate.
    (b) If a contract is to be limited under this section, the notice 
of sale under Sec. 3602.42 will include this information.
    (c) If your contract is in existence on [insert date 30 days after 
publication of final rule], BLM will decide whether that contract is 
renewable upon your

[[Page 55879]]

request not later than 90 days before the expiration of the contract.

Subpart 3603--Community Pits and Common Use Areas

Disposal of Materials--Community Pits and Common Use Areas


Sec. 3603.10  Disposal of mineral materials from community pits and 
common use areas.

    (a) BLM may make mineral material sales and allow free use under 
permit from the same deposit within areas that we designate for this 
purpose. These kinds of disposals must be consistent with other 
provisions of this part. These designated community pit sites or common 
use areas are not limited in size.
    (b) This subpart applies to both sales and free use from community 
pits and common use areas unless otherwise stated. Refer to subpart 
3604 for additional regulations applicable to the free use of mineral 
materials.


Sec. 3603.11  What rights pertain to users of community pits?

    BLM's designation of a community pit site, when noted on the 
appropriate BLM records or posted on the ground, establishes a right to 
remove the materials superior to any subsequent claim or entry of the 
lands.


Sec. 3603.12  What rights pertain to users of common use areas?

    (a) BLM's designation of a common use area does not establish a 
right to remove the materials superior to any subsequent claim or entry 
of the lands.
    (b) Once you have a permit or a sales contract to remove mineral 
materials from a common use area, your rights under that permit or 
contract are superior to any subsequent claim or entry on the lands.


Sec. 3603.13  What price does BLM charge under materials sales 
contracts for mineral materials from community pits and common use 
areas?

    BLM will sell mineral materials from community pits or common use 
areas under materials sales contracts for not less than fair market 
value.


Sec. 3603.14  What plans do I need to prepare to mine or remove mineral 
materials from a community pit or common use area?

    BLM will not require a mining or reclamation plan before you mine 
or remove mineral materials from a community pit or common use area, 
but you must comply with the terms of the contract or permit to protect 
health, safety, and the environment.

Reclamation


Sec. 3603.20  Reclamation.


Sec. 3603.21  What reclamation requirements pertain to community pits 
and common use areas?

    You do not generally need to perform reclamation after extracting 
mineral materials from community pits or common use areas under permits 
or sale contracts. However, you must pay a reclamation fee as provided 
in Sec. 3603.22.


Sec. 3603.22  What fees must I pay to cover the cost of reclamation of 
community pits and common use areas?

    (a) You must pay a reclamation fee based on the amount of mineral 
materials you extract from the community pit or common use area, unless 
you make an alternative arrangement under paragraph (b) of this 
section. The reclamation fee will be a proportionate share of the total 
estimated cost of reclamation, determined by using the ratio of the 
material that you extract under your permit or contract to the total 
volume of the material BLM estimates will be extracted from the site.
    (b) BLM may, at our discretion, allow purchasers and permittees to 
perform interim or final reclamation, where needed, in lieu of paying 
reclamation charges.

Subpart 3604--Free Use of Mineral Materials

Obtaining Free Use Permits


Sec. 3604.10  Permits for free use of mineral materials.


Sec. 3604.11  How do I apply for a free use permit?

    If you wish to apply for free use of mineral materials, you must 
file your application with BLM on a BLM standard form approved by the 
Office of Management and Budget.


Sec. 3604.12  Who may obtain a free use permit?

    Any Federal, State, or territorial agency, unit, or subdivision, 
including municipalities, or any non-profit organization, may apply for 
a free use permit to extract and use mineral materials.
    (a) BLM may issue free use permits to you as a government entity 
without limitation as to the number of permits or as to the value of 
the mineral materials to be extracted or removed, provided that you 
show that these materials will not be used for commercial or industrial 
purposes.
    (b) BLM may issue free use permits to you as a non-profit 
organization for not more than 5,000 cubic yards (or weight equivalent) 
in any period of 12 consecutive months, provided that you show that 
these materials will not be used for commercial or industrial purposes.


Sec. 3604.13  When will BLM decline to issue a free use permit to a 
qualified applicant?

    BLM will not issue a free use permit if we determine that you own 
or control an adequate supply of suitable mineral materials that:
    (a) Are readily available, and
    (b) Can be mined in a manner that is economically and 
environmentally acceptable.

Administration of Free Use


Sec. 3604.20  Administration of free use permits.


Sec. 3604.21  What is the term of a free use permit?

    (a) BLM will determine the appropriate length of your free use 
permit term.
    (1) BLM will not grant free use permits to government entities for 
terms exceeding 10 years.
    (2) BLM will not grant free use permits to non-profit organizations 
for terms exceeding one year.
    (b) BLM may extend any free use permit term for a single additional 
period not to exceed one year.


Sec. 3604.22  What conditions and restrictions pertain to my free use 
permit?

    (a) You must not barter or sell mineral materials that you obtain 
under a free use permit.
    (b) You must not remove mineral materials before BLM issues you a 
permit or after your permit has expired.
    (c) BLM may incorporate other conditions and restrictions into your 
free use permit.


Sec. 3604.23  When and how may I assign my free use permit?

    You may assign or transfer your free use permit to entities 
qualified under Sec. 3604.12. You must first obtain the written 
approval of BLM.


Sec. 3604.24  Who may remove materials on my behalf?

    (a) You may allow your agent to extract mineral materials under 
your free use permit.
    (b) Your agent may charge you only for extraction services and must 
not--
    (1) Charge you for the materials extracted, processed, or removed; 
or
    (2) Take mineral materials from the permit area as payment for 
services rendered to you, or as a donation or gift.

[[Page 55880]]

Sec. 3604.25  What bond requirements pertain to free use permits?

    BLM may require a bond as a guarantee of your faithful performance 
of the provisions of your permit and applicable regulations, including 
required reclamation. Your bond may be in any type of security provided 
for in Sec. 3602.14(c) of this part.


Sec. 3604.26  When will BLM cancel my permit?

    BLM may cancel your permit if you fail, after adequate notice, to 
follow its terms and conditions.


Sec. 3604.27  What rights does a free use permit give me against other 
users of the land?

    Permits that BLM issues under this subpart constitute a superior 
right to remove the materials in accordance with the permit terms and 
provisions, as against any subsequent claim to or entry of the lands.

PART 3610 [REMOVED]

    2. Part 3610 is removed.

PART 3620--FREE USE OF PETRIFIED WOOD

    3. The authority citation for part 3620 is revised to read as 
follows:

    Authority: 30 U.S.C. 601 et seq.; 43 U.S.C. 1201, 1732, 1733, 
1740; sec. 2, Act of September 28, 1962 (Pub. L. 87-713, 76 Stat. 
652).

    4. The heading of Part 3620 is revised to read as set forth above.

Subpart 3621 [Removed]

    5. Subpart 3621 is removed.

Subpart 3622--Free Use of Petrified Wood

    6. Section 3622.1 is amended by revising paragraph (b) to read as 
follows:


Sec. 3622.1  Program: General.

* * * * *
    (b) The purchase of petrified wood for commercial purposes is 
provided for in Sec. 3602.10 et seq. of this chapter.


Sec. 3622.2  [Amended]

    7. Section 3622.2 is amended by removing the phrase ``subpart 3621 
of this title'' from the second sentence and adding in its place the 
phrase ``subpart 3604 of this chapter.''


Sec. 3622.4  [Amended]

    8. Section 3622.4 is amended by:
    a. Removing the phrase ``subpart 3621 of this title'' from 
paragraph (a)(2) and adding in its place the phrase ``subpart 3604 of 
this chapter,''
    b. Removing the phrase ``unnecessary and undue degradation of 
lands'' from paragraph (a)(4) and adding in its place the phrase 
``hazards to public health and safety, and minimizes and mitigates 
environmental damage.''
    c. Removing the phrase ``in Sec. 3622.4(a) of this title'' at the 
end of paragraph (b), and adding in its place the phrase ``in paragraph 
(a) of this section.''

[FR Doc. 00-23590 Filed 9-13-00; 8:45 am]
BILLING CODE 4310-84-P