[Federal Register Volume 66, Number 226 (Friday, November 23, 2001)]
[Rules and Regulations]
[Pages 58892-58910]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29001]



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Part III





Department of the Interior





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Bureau of Land Management



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43 CFR Parts 3600, 3610, 3620 and 3800



Mineral Materials Disposal; Sales; Free Use; Final Rule

  Federal Register / Vol. 66, No. 226 / Friday, November 23, 2001 / 
Rules and Regulations  

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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 3600, 3610, 3620, and 3800

[WO-320-1430-PB-24 1A]
RIN 1004-AD29


Mineral Materials Disposal; Sales; Free Use

AGENCY: Bureau of Land Management, Interior.

ACTION: Final rule.

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SUMMARY: The Bureau of Land Management (BLM) is amending its mineral 
materials regulations by adding or amending provisions on inspection of 
operations, production verification, contract renewal, procedures for 
cancellation, bonding, and appeals. The final rule also addresses the 
rights of purchasers and permittees versus subsequent users of the same 
land. BLM is amending 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. The final rule also reorganizes and 
simplifies the regulations on mineral materials disposal, and makes a 
conforming amendment in BLM's regulations on Surface Management of 
mining claims.

EFFECTIVE DATE: December 24, 2001.

ADDRESSES: You may send inquiries or suggestions to Director (320), 
Bureau of Land Management, Room 501 LS, 1849 C Street, NW., Washington, 
DC 20240.

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. Background
II. Discussion of Comments
III. The Final Rule
IV. Procedural Matters

I. 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 final rule does not address 
vegetative materials, such as timber.
    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. This final rule revises the regulations on disposal of mineral 
materials, and makes two technical amendments and corrects cross-
references in the subpart on free use of petrified wood.
    The proposed rule was published on September 14, 2000 (65 FR 
55864). BLM received 10 comments on the proposed rule. We received 3 
comments from business interests, 1 from a private attorney, 1 from a 
State government agency, 4 from BLM field employees, and 1 from an 
individual without stated affiliation.

II. Discussion of Comments

    Most of the comments were generally favorable to the proposed rule, 
and 4 of the public comments specifically stated that the proposed rule 
represented an improvement over the previous regulations. However, one 
of the generally favorable comments, endorsed by 2 others, stated that 
the question and answer format followed in the proposed rule was 
confusing.
    Many studies have shown that comprehension of user manuals, 
regulations, and the like improves when they employ this question and 
answer format. Readers generally find them more user-friendly as well. 
Therefore, BLM will continue to use this format in most of its section 
headings. In a few instances, of course, single-word or short-phrase 
headings are more appropriate. This rule also use headline-type 
headings to mark major subject changes within subparts in the 
regulations. This should help you navigate the table of contents.
    In the remainder of this portion of the preamble we will discuss 
those comments that suggested changes in specific provisions in the 
regulatory text, in order by section number.

Subpart 3601--Mineral Materials Disposal; General Provisions

Section 3601.5  Definitions
    One comment stated that it should be made clear in the definition 
of ``public lands'' that ``any lands and interest in lands'' includes 
the mineral estate. The definition we used in the proposed rule is the 
standard definition, derived from the Federal Land Policy and 
Management Act of 1976 (FLPMA), which certainly intends to include the 
mineral estate. The public generally understands this.
    The same comment continued by discussing the issue of split estate 
lands where the United States owns the mineral interests but the 
surface is private or under the jurisdiction of State or local 
government. The comment suggested that we should clarify and expand the 
language in the definition and the regulations at Secs. 3601.1 and 
3601.13. Because the reasons for estates being split in this way are 
many, and the statutory authorities are varied, we have included this 
discussion in the BLM Manual (see BLM Manual 3600) rather than in the 
regulations.
    We asked in the preamble to the proposed rule for comments on the 
definition of ``public lands,'' noting that the Department of 
Agriculture uses a definition that excludes acquired lands in its 
administration of the Materials Act. We received no comments on this 
issue. We are continuing to review the definition of ``public lands'' 
under the Materials Act. As this review is still pending, we have 
retained for now the definition from the previous version of the rule. 
If we conclude that the definition should be changed, we will publish 
the proposed change in the Federal Register.
Section 3601.12  What Areas Does BLM Exclude From Disposal of Mineral 
Materials?
    One comment raised the question whether language should be added to 
state that materials will not be disposed of from lands identified as 
prohibiting disposal in an approved land use plan. This is addressed in 
BLM's planning regulations (see 43 CFR 1610.5-3(a)), which require that 
``All future resource management authorizations * * * conform to the 
approved plan.'' However, for the convenience of our customers, we have 
added a paragraph to this effect in this section.

[[Page 58893]]

Section 3601.13  How Can I Obtain Mineral Materials From Federal Lands 
That Have Been Withdrawn To Aid a Function of Another Federal Agency or 
of a State or Local Government Agency?
    We realized from the comments on this section that the wording of 
both the question and answer was confusing. We have revised the wording 
of the question to track more closely the language of the statute, 30 
U.S.C. 601. As required by the statute, this section gives veto power 
over mineral materials development to another Federal agency or State 
or local government for whose benefit the federal lands have been 
withdrawn. We have revised the answer to state simply the statutory 
requirement that if you wish to obtain mineral materials from such 
lands, the other agency must consent. This section does not address 
split estates, which, as stated above, are discussed in the BLM Manual 
rather than in the regulations.
    One comment stated that BLM appeared to be abdicating its 
responsibility in making mineral materials available to the public. The 
statute, 30 U.S.C. 601, does not allow BLM to dispose of the mineral 
materials in this instance without the consent of the other agency. The 
same comment stated that the process called for in this section was 
cumbersome, especially in the context of competitive sales, because an 
applicant who has gone through the expensive process of obtaining a 
surface use permit from a surface management agency has no assurance of 
winning the competitive contract. There is no need to obtain a surface 
use permit before ascertaining whether the other agency will consent to 
the mineral materials disposal. If the agency does consent, and BLM 
initiates the disposal, an applicant can bid on the contract without 
first obtaining a surface use permit.
Section 3601.14  When Can BLM Dispose of Mineral Materials From 
Unpatented Mining Claims?
    One comment, which was endorsed by two others, expressed strong 
support for this provision, saying that it will promote development of 
mineral resources while providing adequate safeguards for the mining 
claim owner, and would discourage speculation in questionable mining 
claims. The comment pointed out that purchasers of mineral materials 
would no longer face the cost of a mining claim contest.
    Another comment stated that the wording of this provision was too 
tentative and conditional. The respondent suggested that BLM should 
require a waiver from the mining claimant before disposing of mineral 
materials from an unpatented claim. The comment also recommended 
removing the final sentence from proposed Sec. 3601.14. This sentence 
provides that when a mining claimant refuses to sign a waiver, BLM will 
make sure that disposal would not be detrimental to the public 
interest, and will consult with the Solicitor's Office if necessary 
before proceeding with the disposal. We decided not to change the rule 
in response to this comment because the suggested changes do not 
address the situation where a mining claimant refuses to sign a waiver. 
We have retained the language in the proposed rule, which sets up an 
orderly process for BLM to follow to pursue the public interest.
    This change also requires that we amend 43 CFR 3809.101(d), which 
addresses sale of mineral materials from unpatented mining claims, to 
conform with this final rule. Therefore, we are amending that paragraph 
to allow sales of mineral materials absent a waiver from the mining 
claimant following the procedures in this section, 3601.14. This will 
allow BLM to dispose of materials if it is not detrimental to the 
public interest and if we find that disposal would not impair the 
rights of the mining claimant.
    One comment suggested the possibility of distinguishing between 
pre-1955 unpatented claims and later mining claims. We do not believe 
this distinction is necessary. Solicitor's Opinion No. M-36998, 
``Disposal of Mineral Materials from Unpatented Mining Claims,'' June 
9, 1999, concludes that BLM's authority to dispose of mineral materials 
from unpatented mining claims is based on the Materials Act of 1947, 
and that authority was left intact by the amendments of the Surface 
Resources Act of 1955, 30 U.S.C. 601 et seq. Id. at n.4 and 
accompanying text. BLM will proceed under the guidelines in 
Sec. 3601.14 for all unpatented mining claims, consulting with the 
Solicitor's Office when necessary.
    One comment asked whether BLM can establish a community pit on a 
mining claim. The regulations do not expressly prohibit the opening of 
a community pit over an unpatented mining claim. If such disposal were 
possible without endangering or materially interfering with 
prospecting, mining, or processing operations, or uses reasonably 
incident thereto, BLM would follow the procedures in Sec. 3601.14 
before deciding to proceed.
Section 3601.21  What Rights Does a Person Have Under a Materials Sales 
Contract or Use Permit?
    One comment addressed this section, recommending that BLM 
separately authorize under a right-of-way associated uses such as a hot 
mix plant or a concrete batch plant. The comment pointed out that this 
would provide the public with additional revenue, and stated that the 
matter can be a subject for the BLM Manual or a handbook. The comment 
asked whether such uses as an asphalt mix table would be included in a 
contract or free use permit area, or in a separate right-of-way 
authorization.
    In the aggregate business, mining, crushing, washing, screening, 
and separation of materials are processes integral to production of 
such value added items as asphalt concrete or ready-mix concrete. The 
regulations could separate the value-adding activities from the mining 
and extraction processes and require a separate authorization such as a 
right-of-way permit. However, ready-mix concrete or asphalt concrete 
batch plants are generally movable, not permanent features. Keeping all 
activities together and confined to a small area (generally already 
disturbed by mining) is desirable from an environmental point of view. 
We believe that contemplated use of concrete or asphalt mix plants 
should be included in the mining plan and considered in analysis under 
the National Environmental Policy Act during BLM's permitting process. 
No change is necessary in the final rule.
Section 3601.30  Pre-application Activities--How and When May I Sample 
and Test Mineral Materials?
    Comments asked what happens if someone with a letter authorizing 
exploration under this section fails to submit sampling and testing 
findings. Another comment stated that the rule should allow BLM to 
approve exploration under sales contracts or free use permits as well 
as before their issuance.
    Of course, it is possible that a person with an authorization to 
explore may choose not to explore. Aside from this, experience under 
the existing regulations, which contain a substantively identical 
provision, has not demonstrated a need for monetary penalties for 
failure to submit exploration findings. Furthermore, Sec. 3601.60 
allows BLM to cancel a contract or permit if the party fails to comply 
with any applicable regulation. This provides sufficient incentive for 
compliance with this requirement.

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    Sampling and testing are part of mineral material extraction that 
BLM authorizes under sales contracts or free use permits. Permittees or 
purchasers need no additional authorization within the permit or 
contract area.
Section 3601.41  What Information Must I Include In My Mining Plan?
    One comment stated that the information listed under this section 
only begins to address what is needed in a mining or reclamation plan, 
and that operators should closely coordinate with BLM in preparation of 
both mining and reclamation plans. The comment suggested that it would 
be helpful if BLM were to provide a proposed mining plan outline, a 
copy of the BLM reclamation handbook, and other agency requirements. We 
agree that applicants should coordinate closely with BLM when preparing 
mining plans. The information the respondent suggested we provide is 
available in BLM Field Offices, and we can provide copies of sample 
plans and instructions if you need them.
    Another comment suggested that we include ``depth'' of operations 
as one of the parameters that operators must include in a mining plan, 
and that we include ``the location of the soil/growth medium 
stockpile'' as an item in the reclamation plan. We have adopted the 
former suggestion in the final rule. However, we believe there is no 
need to pinpoint the location of the soil/growth medium stockpile, so 
long as the area it will disturb is indicated. That information is 
sufficiently covered in the description of information that you must 
include in the mining plan.
Section 3601.44  How and When May My Mining or Reclamation Plan Be 
Modified?
    One comment suggested that the regulations elaborate on stop orders 
that BLM could issue under this section if a purchaser fails to modify 
a plan to BLM's satisfaction. The comment also asked that the 
regulations provide for penalties for such failure. The comment pointed 
to the regulations on use and occupancy of mining claims in 43 CFR 
subpart 3715 as a model. The regulations in subpart 3715 address 
abatement of unauthorized use and occupancy of unpatented mining 
claims. Unauthorized use and occupancy is a much more widespread and 
serious problem in the mining industry than failure to modify mining 
plans is in the mineral materials industry. We believe the consequences 
of failure to comply with these regulations--possible cancellation or 
suspension of the contract or permit--are serious enough without 
bringing to bear the heavy artillery of criminal penalties.
    Another comment stated that this provision should direct BLM to 
provide justification before requiring a purchaser or permittee to 
modify an approved plan, and that the proposed rule would encourage BLM 
to act arbitrarily and abrogate terms of a binding contract. The rule 
limits BLM's discretion to require plan modification. We can do so only 
when we can point to changed conditions or an oversight that needs to 
be corrected. We believe that these limitations preclude arbitrary 
action. Each contract will state that it includes the requirements of 
all regulations, including this section, so operators are on notice 
that BLM can modify the plan if necessary. In the final rule we have 
added language providing for BLM to consult with the purchaser or 
permittee before requiring modifications.
Section 3601.51  How Will BLM Inspect My Operation?
    One respondent, endorsed by two others, supported the inspection 
provisions in this section, stating that they codify how BLM field 
offices have been operating in his area. Another comment suggested that 
the regulations should also allow BLM to inspect weight tickets, truck 
logs, and other records of this type. We have added such a provision to 
the final rule in order to improve our ability to account for 
production.
Section 3601.61  When May BLM Cancel My Contract or Permit?
and
Section 3601.62  Cancellation Procedures.
    One respondent, endorsed by two others, supported the cancellation 
provisions in these two sections, stating that the cancellation 
procedures give purchasers reasonable notice of BLM expectations. They 
agreed that a notice of intent to cancel with a period of time to 
rectify a problem or prove no wrongdoing is a common way of dealing 
with disputes in private mineral leases.
    We have simplified the wording of Sec. 3601.61(b), which in the 
proposed rule stated that BLM could cancel your contract or permit if 
you failed to comply with ``any applicable regulations, including the 
inspection requirements of Sec. 3601.51.'' Because ``any applicable 
regulations'' necessarily includes the inspection requirements of 
Sec. 3601.51, we determined that the reference to inspection 
requirements was superfluous, and we removed it.
Section 3601.71  What Constitutes Unauthorized Use?
    One comment asked how the prohibition of extracting, severing, or 
removing mineral materials from public lands applies to split estate 
lands, where the surface owner may use mineral materials for purposes 
of improving the surface, so long as the owner does not remove the 
materials off-site. We have added a paragraph to this section stating 
BLM's long-standing policy that without a contract or permit, or other 
express authorization, a surface estate owner may make only minimal 
personal use of federally reserved mineral materials within the 
boundaries of the surface estate. Minimal use would include, for 
example, moving mineral materials to dig a personal swimming pool and 
using those excavated materials for grading or landscaping on the 
property. It would not include large-scale use of mineral materials, 
even within the boundaries of the surface estate.

Subpart 3602--Mineral Materials Sales Applications

Section 3602.12  How Does the Mineral Materials Sales Process Affect 
Other Users of the Same Public Lands?
    Several comments addressed this section, supporting the language 
that provides that BLM's designation of a tract for a mineral materials 
sale establishes, for the ultimate purchaser, a superior right over 
subsequent third party entries or applications. These comments said 
that the provision gives the mineral producer certainty as to the 
status of its interest and protects its investment.
    One comment asked for clarification as to exactly what period of 
time the superior right pertains. We have amended this section in the 
final rule to make it clear that the superior right pertains to the 
entire term of the sales contract or permit, including any renewal 
periods, of a contract or permit issued within the 2-year period 
following the date BLM notes the designation in the public land 
records. We have further amended his section to provide that the 
superior right applies to subsequent contracts or permits that BLM 
authorizes within 2 years after the previous contract or permit expires 
or terminates. This provision would prevent other claimants from 
speculatively establishing claims when BLM designates tracts in the 
hope that BLM contracts or permits will terminate before the mineral 
materials are exhausted. It allows BLM the same time period to enter 
into another contract or issue a permit for the remaining mineral 
materials and gives subsequent

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purchasers or permittees the same certainty that the first purchaser or 
permittee enjoyed. This principle applies no matter how many successive 
contracts or permits there may be.
Section 3602.13  How Does BLM Measure and Establish the Price of 
Mineral Materials?
    One comment, endorsed by two others, supported this provision, 
saying that it follows private industry standards, and that the 
reappraisal provisions also track industry practices, which allow for 
changes in unit price over time. This comment said that the two-year 
window when the price is fixed is reasonable.
    One comment suggested that we amend paragraph (c), which allows the 
purchaser or permittee to choose between the two measurement methods: 
In-place volume or weight equivalent, to provide that BLM may designate 
the method of measurement that operators must use. We agree, and have 
amended the rule to allow BLM to choose the method. BLM will not always 
exercise this option, but will allow the operator to make the choice in 
many cases.
Section 3602.14  What Kind of Financial Security Does BLM Require?
    Several comments addressed this section. One comment stated that 
the bonding provision is cumbersome because it appears to set up a dual 
bond requirement--a performance bond of 5 percent, and a reclamation 
bond of at least $500. The intent of the proposed rule was not to 
require two bonds, but to set up a two-stage calculation to determine 
the required amount of the bond, which BLM could have used to enforce 
any part of the contract performance.
    BLM has determined that the two-stage calculation is unnecessary, 
and we have removed the requirement that the bond include 5 percent of 
the total contract price. A performance bond large enough to cover 
reclamation costs should be sufficient for environmental protection, 
and BLM can still use the bond amount to enforce any part of the 
contract performance. For average operations (contracts of $57,000) the 
bond amount under these new requirements is expected to decrease from 
$11,400 to $5,000, a reduction of $6,400. While on its face, this 
reduction might appear to afford less protection to the Federal 
Government, it actually only recognizes that the relatively high 
bonding requirements of the mineral materials program have been 
unnecessary. Moreover, we will also be holding the purchaser's cash 
deposit of 5 percent of the contract value, or $500, whichever is 
larger, which will further guarantee performance. These changes make 
the bonding system for mineral materials more consistent with bonding 
standards in other minerals programs, such as oil and gas, leaseable 
minerals, and the mining law. Further, if the purchaser removes excess 
materials, we can use trespass procedures under 43 CFR 9239.0-7 and 
9239.0-8 to recover damages.
    One comment recommended that BLM accept other forms of security 
besides performance bonds, and went on to suggest examples of types of 
security that other agencies accept. The comment suggested that we add 
language allowing ``any other form of financial security which is 
acceptable to the Secretary.'' We have adopted the suggestion that we 
accept other forms of security, and have added irrevocable letters of 
credit to the forms that BLM will accept. We have also made clear that 
surety bonds can be arranged or paid for by third parties. We have not 
adopted the broad language suggested by the comment because we have 
determined that the rules should not provide open-ended discretion in 
the bonding area.
    One comment urged that BLM not set a maximum bond of 20 percent of 
contract value for contract sales less than $2,000. The respondent 
raised two concerns: First, reclamation costs may exceed the bond in 
some circumstances, and second, the Federal upper limit may cause 
problems with State and local bonding requirements. BLM does not view 
these concerns as outweighing the reasons for the provision.
     This bonding provision is necessary to protect the 
interests of small purchasers. Many of our small sales are from 
community pits and common use areas, where bonds are generally not 
needed at all. For other small sales, BLM takes extra care to select 
sites with minimal possibility of environmental damage and therefore 
low reclamation costs.
     BLM bonding levels should have no effect on State or other 
agency bonding policies and requirements. It is quite common for 
different levels of government to have different bonding requirements.
    Finally, one comment pointed out that paragraph (a)(2) of this 
section as proposed would seem to require bonding for sales of $2,000 
or more from community pits, and said that this seems to be an 
unnecessary burden on business. BLM agrees, and, as stated above, in 
the final rule, we have removed the provision requiring a 5 percent 
bond.
Section 3602.21  What Payment Terms Apply to My Mineral Materials Sales 
Contract?
    Several comments addressed this section. Three comments, one of 
them endorsed by two others, stated general support for this section, 
pointing out that the procedure outlined in this section tracks the 
standard operating procedure in private sales.
    One comment suggested removing the requirement for payment in lieu 
of production in Sec. 3602.21(a)(3). The respondent thought the 
requirement in paragraph (a)(2)(iii) that the full contract amount be 
paid before contract expiration should sufficiently assure BLM that the 
purchaser will make full payment. BLM has not adopted this comment in 
the final rule. The provision for in lieu payments promotes diligent 
development and deters speculative holding of mineral deposits. Without 
it, purchasers may be tempted to obtain large contracts for speculative 
purposes or to reduce competition.
    One comment suggested that the regulation should allow an annual 
payment at the end of the year for mineral materials actually mined 
during the year. We have amended this section in the final rule to 
allow annual payments for the upcoming year based on the amount 
produced in the previous year or an estimate of production for the 
upcoming year. If you choose to make payments this way, you must 
reconcile the amount as the year progresses.
    The proposed rule provided, at Sec. 3602.21(a)(2)(iii)(A), that you 
must make installment payments monthly in an amount equal to the value 
of the mineral materials you removed that month. We have revised this 
section to specify that the payment must be made by the 15th day 
following the end of the month for which you are reporting, to give you 
time to determine the value of the materials removed.
Section 3602.22  When Will a Contract Terminate?
    Two comments addressed this section, stating that a contract should 
terminate when the purchaser has removed the contracted-for amount of 
mineral materials rather than when its term expires. Automatically 
terminating a contract when the amount of material contracted for has 
been removed would conflict with contract renewal provisions and could 
conflict with the purchaser's obligation to perform reclamation. 
However, we have added a provision that the contract or permit will 
terminate when the operator has completed both production and all 
required reclamation. Once an operator

[[Page 58896]]

completes all reclamation, there is no longer any reason to encumber 
the land with a contract or permit, as the operator has no interest in 
renewal, and BLM's interest in reclamation is satisfied.
Section 3602.23  When Will BLM Make Refunds or Allow Credits?
    The proposed rule provided that BLM would reduce the amount of any 
refund by the amount of the administrative cost of processing the 
disposal action. In the final rule, we have amended this language to 
provide that BLM will reduce the refund or credit due to administrative 
costs only when the refund or credit results from terminating the 
contract by mutual agreement. Our intention was not to withhold 
administrative costs when purchasers have simply overpaid or when our 
initial estimate of mineral materials available was mistaken.
Section 3602.24  When May I Assign My Materials Sales Contract?
    One comment stated that paragraph (b)(1) of this section seems not 
to require an assignee to provide a reclamation bond. This comment is 
related to the comment on Sec. 3602.14, and is based on the notion that 
that section required dual bonds. Our revision of Sec. 3602.14 to 
require a performance bond based only on estimated reclamation costs 
eliminates this confusion. Nevertheless, we have also amended this 
provision to require the assignee to provide a ``financial guarantee'' 
under Sec. 3602.14, rather than a ``performance bond.''
Section 3602.26  If I Assign My Contract, When Do My Obligations Under 
the Contract End?
    Two comments addressed this section. One respondent thought that 
the word ``accrual'' did not pertain to obligations and liabilities, 
but only to gains or additions, and suggested that the provision is 
unnecessary, because operators can negotiate responsibility for 
reclamation and similar matters at the time of assignment. The other 
comment suggested that this section conflicted with Sec. 3602.15, which 
provides for cancellation of the assignor's bond obligations when the 
assignee provides an appropriate bond. We have amended this provision 
in the final rule by removing the phrase ``such as reclamation.'' This 
phrase produced more confusion than clarification in the proposed rule. 
We believe that the term ``accrual'' is appropriate for obligations as 
well as benefits, and the assignor is responsible for all contract 
obligations that accrued before BLM approves the assignment, regardless 
of whether the assignor's bond obligations have been canceled.
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?
    The several comments addressing these sections all supported the 
production verification methods in the proposed rule. One comment 
recommended that BLM require monthly reporting. We have not adopted 
this comment in the final rule, but have revised this provision to say 
that you must submit at least one report per contract year. Both the 
proposed and final rules make it clear that BLM may require reporting 
more frequently than annually.
    Another comment recommended that we require volumetric surveys only 
in certain circumstances such as large volume commercial sales, saying 
that the cost of these surveys does not justify the public benefit. We 
agree, and this is how BLM will implement this section. It is not 
necessary to provide this degree of detail in the regulations, because 
BLM Manuals and handbooks will provide this instruction to production 
verification personnel.
Section 3602.31  What Volume Limitations Generally Apply to 
Noncompetitive Mineral Materials Sales?
and
Section 3602.32  What Volume and Other Limitations Pertain to 
Noncompetitive Sales Associated With Public Works Projects?
    Five comments supported the increased volume limitations in these 
sections of the proposed rule. One of them suggested further increases, 
or even eliminating the limits, on noncompetitive sales. In the final 
rule, BLM has raised the limit on the total aggregate amount of 
noncompetitive sales made in any one State for the benefit of any one 
purchaser, in any period of 12 consecutive months, to 300,000 cubic 
yards (or weight equivalent). We are not changing the provision for 
maximum volume limitation for individual noncompetitive sales. We will 
monitor the mineral materials program and consider raising the volume 
limit for noncompetitive sales in the future, if we find a need for 
that change.
Section 3602.34  What Is the Term of a Noncompetitive Contract?
    One comment recommended that non-competitive mineral materials 
purchasers be offered the same renewal options and terms as competitive 
purchasers. The comment cited a specific case, where a mineral trespass 
situation resulted in a settlement agreement containing a provision 
under which BLM allowed the offending company multiple sequential 
noncompetitive contracts during a 10-year period so that we could 
recover lost revenues from the trespass property. The comment went on 
to say that the local BLM office should allow other similar 
noncompetitive sales contracts until that settlement agreement 
terminates. BLM has not adopted this comment in the final rule. The 
instance described in the comment involved unique circumstances. The 
governing statute directs the Secretary to dispose of mineral materials 
by competitive bidding unless it is impracticable to obtain 
competition. 30 U.S.C. 602. Because the statute favors competitive 
contracts, the regulations do not provide for noncompetitive contracts 
to include the same terms as competitive contracts.
Section 3602.45  What Final Steps Will BLM Take Before Issuing Me a 
Contract?
    In the proposed rule, this section was entitled, ``What conditions 
must I meet before BLM will issue me a conract?'' Although no comments 
addressed this section, on review we have decided that the section 
heading was not completely descriptive. We have given the section a new 
heading, partially reorganized the section, and added paragraph 
headings to make its organization clearer. We have also revised 
paragraph (g) to explain that additional provisions and stipulations 
that BLM adds to the contract will be for the purpose of conforming to 
the provisions of the competitive sale notice and to address 
environmental or other site-specific issues. The standard contract form 
approved by the Office of Management and Budget is a basic form that 
can be used for any kind of sale. It is not all-inclusive and states 
that the contract will include the stipulations and the mining plan 
attached to it. Provisions that relate to mining on a specific tract of 
land must be added to the contract. We have not made substantive 
changes in this section.
Section 3602.47  When and How May I Renew My Competitive Contract?
    One comment, endorsed by two others, supported this provision as 
promoting mineral development

[[Page 58897]]

because it protects the initial purchaser. It pointed out that the life 
span of a mineral deposit can be decades, and said that the previous 
regulations provided no incentive for exploration and development 
because there was no guarantee that the purchaser would be in place for 
more than one contract term.
    Another comment recommended amending the section to allow renewals 
of noncompetitive contracts, saying that the noncompetitive purchaser 
has the same investment in the application process, site and access 
preparation, and, with some commodities, market development costs, as 
the competitive purchaser. BLM is not amending the final rule in 
response to this comment. First, most noncompetitive contracts are for 
minerals in community pits and common use areas, where site and access 
preparation are not economic factors. Second, the regulations provide 
for a one-year extension (see Sec. 3602.27) if the purchaser was unable 
to finish operations under the contract for reasons beyond his or her 
control and meets the appropriate procedural deadline described in 
Sec. 3602.27. Finally, as discussed above, the governing statute 
requires competitive contracts whenever competition is practicable, so 
BLM will not allow unlimited renewals when we did not award the initial 
contract on a competitive basis.
    One comment asked for assurance that renewals of competitive 
contracts would be done non-competitively. We amended this section to 
make it clear that once you have been awarded a contract through 
competitive bidding, you may apply for a renewal of that contract 
without further competitive bidding. BLM's experience with the mineral 
materials markets has shown that we need to offer competitive contracts 
with options for renewal to attract the competition that will bring the 
greatest economic benefit for the United States. In essence, we are 
offering for competitive bidding both a stated amount of mineral 
materials and options for additional amounts, in a process of two or 
more stages. Adding options for contract renewal at the time of 
competitive bidding allows BLM to improve the economic return to the 
United States.
    One comment stated that this section in the proposed rule, with its 
deadline for requesting a renewal 90 days before contract expiration, 
conflicted with section 3602.21(a)(2)(iii), which directs purchasers to 
pay the full amount of their contracts no later than 60 days before the 
contracts are to expire. There is no conflict between these two 
provisions. A purchaser who wants to renew a competitive contract must 
pay the full contract value before applying for renewal at least 90 
days before the contract expires. Others, for whom renewal is not of 
interest, must pay the full contract value no later than 60 days before 
contract expiration. Those who wish to renew simply have an earlier 
payment deadline.
Section 3602.48  What May BLM Require When Renewing My Contract?
    One comment, endorsed by two others, supported the reappraisal 
requirements in this section. The respondent said that his contracts 
commonly provide for a change in unit price over time.
Section 3602.49  When Will BLM Issue a Non-Renewable Contract?
    We received no comments on this section. We decided, however, to 
amend paragraph (c) to provide that if fewer than 120 days remain on 
your contract after the effective date of this rule, BLM may approve 
your renewal request submitted less than 90 days before the contract 
expires if we decide the contract qualifies for renewal and we have 
sufficient time to process your request before your contract is due to 
expire. We added this provision to give an opportunity for contract 
renewal to purchasers who have existing contracts on the effective date 
of this rule, but who would be unable to meet the 90-day deadline due 
to the short time remaining on the contracts after the effective date. 
(Since this paragraph is of strictly limited applicability, we will 
remove it from the regulations at the earliest opportunity in an 
administrative final rule.)
Section 3603.14  What Plans Do I Need to Prepare To Mine or Remove 
Mineral Materials From a Community Pit or Common Use Area?
    This section in the proposed rule provided that BLM would not 
require a mining or reclamation plan before authorizing mining or 
removing mineral materials from a community pit or common use area. One 
comment urged that BLM amend this section to give us discretion as to 
whether to require a mining plan in these instances. We have changed 
the final rule to state that BLM generally will not require a mining or 
reclamation plan in such cases, but may require a plan if we find that 
circumstances warrant it. Not all removals are of such a scale that we 
need a mining plan.
Section 3603.22  What Fees Must I Pay to Cover the Cost of Reclamation 
of Community Pits and Common Use Areas?
    One comment noted that the rule contained no bonding provision to 
cover reclamation of community pits. Although it was not clear, the 
comment appeared to say that the rule should provide for bonding of 
operations in community pits if the operator elects to perform 
reclamation in lieu of paying a reclamation fee. We have amended the 
rule in response to this comment, giving BLM discretion to require a 
bond in these circumstances, in either community pits or common use 
areas. However, our normal practice is to collect a reclamation fee and 
not require a bond. The reclamation fee is paid under Section 305 of 
FLPMA (43 U.S.C. 1735) into the Fund for Repair of Damaged Lands. BLM 
uses moneys from this fund to pay for reclamation of exhausted 
community pits.
Section 3604.11  How Do I Apply for a Free Use Permit?
    One comment suggested that this section require or allow a letter 
from the applicant to BLM in place of BLM Form 5510-1. It said that 
applicants often incorrectly fill it out and must resubmit it. The 
comment said that personal experience with letter transactions has been 
favorable. We have amended this provision in the final rule to allow 
letter applications for free use permits. You may send a letter or use 
BLM Form 5510-1.
Section 3604.22  What Conditions and Restrictions Pertain to My Free 
Use Permit?
    One comment asked what recourse BLM has if a free use permittee 
violates a permit restriction or condition, and suggested that it may 
be politically difficult to hold a local government in trespass. We 
have made no change in the final rule in this respect. We have the 
authority and responsibility to initiate trespass proceedings in any 
case where they are indicated. Of course, we would carry out such 
proceedings only as a last resort when persuasion fails.

III. The Final Rule

    The final rule substantially reorganizes 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 are changed from the previous regulations to 
the final rule.

[[Page 58898]]

Section Conversion Table

------------------------------------------------------------------------
                Old section                          New section
------------------------------------------------------------------------
Group 3600 heading........................  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
------------------------------------------------------------------------

A. How Does BLM Dispose of Mineral Materials? (See Sec. 3601.6.)

    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 the final rule and BLM policies, disposal methods are 
as follows:
1. Negotiated Sales (see Sec. 3602.30 et seq.).
    BLM will negotiate a sale contract for quantities of materials not 
greater than 200,000 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 extension not greater than one year.
2. Competitive Sales (see Sec. 3602.40 et seq.).
    For quantities of materials greater than 200,000 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 extension of up to one year and you may apply for renewal of the 
contract to purchase additional material at the site.
3. Free Use Permits (see subpart 3604).
    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 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 an additional need, you must apply for a 
new permit. You also may not barter or sell this material.

B. 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.
    Substantive changes in the final rule from the previous regulations 
include the following:
    (1) The rule provides 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. 3601.14.
    (2) The rule requires 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 adds a provision that when BLM designates a tract for 
sale of mineral materials, subsequent contracts or permits on that 
tract have priority over any subsequent conflicting mining claim, 
entry, or other use of the land. See Sec. 3602.12.
    (4) The rule allows 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 requires BLM to provide 
written notice of our intent to cancel,

[[Page 58899]]

allowing time to correct performance problems, to request an extension, 
or to show why the contract or permit should not be canceled. See 
Secs. 3601.61 and 3601.62.
    (5) The rule includes a cross reference to the Department of the 
Interior appeals regulations in 43 CFR part 4. See Sec. 3601.80.
    (6) The rule makes the provisions for reappraisal clearer. BLM will 
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 final rule amends the bonding requirements for mineral 
material sales by accepting qualified certificates of deposit and 
irrevocable letters of credit as surety bonds, and by changing bonding 
requirements for sales of $2,000 or more. We set bonds at more 
realistic levels, and they should ensure that amounts needed to cover 
the cost of reclamation will be available. See Sec. 3602.14.
    (8) The rule reduces the percentage amount BLM requires, under a 
material sales contract, for the first installment payment and in lieu 
of production payments. See Sec. 3602.21.
    (9) The rule provides that you must--
     Make monthly installment payments in an amount equal to 
the value of the materials removed the previous month, or
     Make an annual prepayment based on the previous year's 
production or a projection of the current year's production. See 
Sec. 3602.21(a)(2).
    (10) The rule allows 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.
    (11) The rule strengthens and clarifies provisions allowing BLM to 
require purchasers of mineral materials to keep records to verify 
production and to make them available to BLM. BLM uses these records to 
ascertain whether purchasers have complied with regulations and 
contract terms. To allow BLM to verify production, the rule requires 
purchasers to submit production reports at least annually. It allows 
BLM to require purchasers to conduct volumetric surveys of the 
operation site as well. See Sec. Sec. 3602.28 and 3602.29.
    (12) The rule increases the volume limitation for noncompetitive 
sales from 100,000 to 200,000 cubic yards. It also increases the limit 
for sales in any one State for the benefit of any one purchaser in a 
12-month period from 200,000 to 300,000 cubic yards. The rule also 
increases the volume limitation for noncompetitive sales in support of 
a public works improvement program from 200,000 to 400,000 cubic yards. 
See Sec. Sec. 3602.31 and 3602.32.
    (13) The rule allows the successful bidder in a competitive sale 60 
days instead of 30 days to ratify and execute the contract. See 
Sec. 3602.45.
    (14) The rule adds a provision for renewing contracts, allowing a 
purchaser who has paid the full contract price for the purchased 
mineral material to apply for renewal of the contract to allow purchase 
of additional material from the same site. The maximum renewal term is 
10 years, but there is no limit on the number of renewals BLM allows. 
However, each renewal requires a reappraisal, a new environmental 
analysis when we find it necessary, and a possible increase or decrease 
in the bond the purchaser must post. See Sec. 3602.47.
    These regulations apply from the effective date of the final rule 
to all future contracts and permits. They 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.

IV. Procedural Matters

    The principal author of this final 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.
    During the next two fiscal years, this approximate sale and permit 
disposal rate continued. In fiscal year 1999, BLM processed 2,887 sales 
contracts and free-use permits for 12.8 million cubic yards of mineral 
materials, valued at $9.4 million. Of these, 2,344 were non-exclusive 
sales, totaling nearly 1.28 million cubic yards, valued at $1.57 
million. Of the remainder, 332 were exclusive sales, totaling nearly 
4.58 million cubic yards, valued at $4.3 million, and 211 were free-use 
permits, totaling 6.95 million cubic yards, valued at $3.54 million. 
There was production on 3,307 contracts and permits, some of which 
carried over from previous years, amounting to 10.9 million cubic 
yards, valued at $8.9 million.
    In fiscal year 2000, BLM processed 3,542 sales contracts and free-
use permits for 18.7 million cubic yards of mineral materials, valued 
at $15 million. Of these, 2,755 were non-exclusive sales, totaling 
nearly 1.36 million cubic yards, valued at nearly $1.4 million. Of the 
remainder, 500 were exclusive sales, totaling 6.6 million cubic yards, 
valued at nearly $5.7 million, and 287 were free-use permits, totaling 
10.7 million cubic yards, valued at nearly $8 million. There was 
production on 4,801 contracts and permits, some of which carried over 
from previous years, amounting to 11.95 million cubic yards, valued at 
$9.8 million.
    Average annual production for these 5 years, under existing and new 
permits and contracts (some being multi-year contracts), exclusive and 
non-exclusive, amounted to just under $9 million.
    The changes proposed in this rule are:
    1. Adding procedures for inspection, production verification, and 
cancellation of contracts;
    2. Protecting material sales from interference by subsequent land 
users and claimants;
    3. Allowing BLM to dispose of mineral materials from unpatented 
mining claims;
    4. Reducing the amount of required installment payments;
    5. Increasing the value threshold triggering the requirement for 
competitive bidding;
    6. Allowing additional time to prepare and submit mining and 
reclamation plans;
    7. Adding certificates of deposit and irrevocable letters of credit 
as acceptable financial instruments for bonds;
    8. Ensuring that bonding amounts for sales contracts of $2,000 or 
more are adequate to perform reclamation; and

[[Page 58900]]

    9. 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 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 a State's consent 
before materials may be disposed of from public lands that are 
withdrawn for its 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 $5,000, a reduction of $6,400. 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.
    The Small Business Administration established the Small Business 
and Agricultural Regulatory Enforcement Ombudsman and ten Regional 
Fairness Boards to receive comments from small businesses about Federal 
agency enforcement actions. The Ombudsman annually evaluates these 
enforcement activities and rates each agency's responsiveness to small 
business. If you wish to comment on enforcement aspects of this rule, 
you may call 1-888-734-4247.

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 previous 
regulations and these final regulations both allow State and 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.

[[Page 58901]]

Consultation and Coordination With Indian Tribal Governments (E.O. 
13175)

    In accordance with E.O. 13175, we have found that this final rule 
does not include policies that have tribal implications. The Materials 
Act and these regulations expressly exclude Indian lands and lands set 
aside or held for the benefit or use of Indians from any effects of the 
statute or regulations (see Sec. 3601.12). 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 unnecessary. We do not know of any instances of tribal use of 
mineral materials from public lands.

Actions Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use (E.O. 13211)

    This rule is not a significant energy action. It will not have an 
adverse effect on energy supplies. The rule applies only to mineral 
materials like sand and gravel used in construction, not to energy 
minerals. To the extent that the rule relieves constraints on purchase 
and mining of construction materials that may be used in aid of 
developing energy minerals, it will have a marginally beneficial effect 
on energy supplies.

Paperwork Reduction Act

    The regulations in part 3600 require information collections from 
10 or more parties and submissions under the Paperwork Reduction Act. 
These information collection requirements 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.

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 final 
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 final rule also provides that 
BLM will perform additional NEPA analyses as required before renewing 
mineral materials sales contracts. Therefore, the final 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.

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: October 15, 2001.
J. Steven Griles,
Deputy Secretary of the Interior.

    Under the authorities cited below, and for the reasons stated in 
the Supplementary Information, BLM amends 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 that 
have been withdrawn to aid a function of another Federal agency or 
of a State or local government agency?
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 have 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  What is the process for BLM to approve 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 58902]]

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 the same public lands?
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 final steps will BLM take before issuing 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--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 apply to permits for free use and 
contracts for sale of mineral materials.


Sec. 3601.3  Authority.

    (a) BLM's authority 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 the Act of July 31, 1947, as amended 
(30 U.S.C. 601 et seq.), commonly referred to as the Materials Act. 
This authority applies to sale and free use of these materials. BLM's 
authority to allow removal of limited quantities of petrified wood from 
public lands without charge is 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 that BLM develops under FLPMA.
    (c) Section 304 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 means, but is 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 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 Secretary of the Interior through 
BLM

[[Page 58903]]

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 make mineral materials available unless it is detrimental to 
the public interest to do so;
    (b) To sell mineral material resources at not less than fair market 
value;
    (c) To permit Federal, State, Territorial, and local government 
entities and non-profit organizations free use of these materials for 
qualified purposes;
    (d) To protect public land resources and the environment and 
minimize damage to public health and safety during the exploration for 
and the removal of such minerals;
    (e) To prevent unauthorized removal of mineral materials; and
    (f) To require purchasers and permittees to account for all 
removals of mineral materials.


Sec. 3601.8  Public availability of information.

    (a) All data and information concerning Federal and Indian minerals 
that you submit under this part 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. BLM may make available 
for inspection certain mineral information not protected from 
disclosure under part 2 of this title without a Freedom of Information 
Act (FOIA) (5 U.S.C. 552) request.
    (b) When you submit data and information under this part that you 
believe to be exempt from public disclosure, and that you wish BLM to 
withhold from such disclosure, 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 Office of Management and Budget has approved the information 
collection requirements in part 3600 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 from the proposed disposition.


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

    (a) 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.
    (b) BLM will not dispose of mineral materials from Indian lands and 
lands set aside or held for the use or benefit of Indians.
    (c) BLM will not dispose of mineral materials from areas identified 
in land use plans as not appropriate for mineral materials disposal.


Sec. 3601.13  How can I obtain mineral materials from Federal lands 
that have been withdrawn to aid a function of another Federal agency or 
of a State or local government agency?

    If you wish to obtain mineral materials from lands withdrawn to aid 
a function of another Federal agency or of a State or local government 
agency, you may apply to BLM. BLM will dispose of the mineral materials 
only with the consent of that agency.


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

    (a) BLM may 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.
    (b) BLM will ask a mining claimant for a waiver before disposing of 
mineral materials from a claim. If the mining claimant refuses to sign 
a waiver, BLM will make sure that disposal of the mineral materials 
will not be detrimental to the public interest. We also will 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 have under a materials sales 
contract or use permit?

    (a) Unless otherwise provided, if you are a purchaser under a sales 
contract or a free use permittee, 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 the date BLM 
designated the tract for mineral materials disposal will be subject to 
your existing use authorization, as provided in Sec. 3602.12. 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 such use would 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) BLM may authorize you in writing to sample and test mineral 
materials. The authorization letter expires after 90 days, but BLM may 
extend it for an additional 90 days if you show us 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. That part sets forth the rules of the Department of the Interior 
relating to public availability of information contained in 
Departmental records. (See Sec. 3601.8.)
    (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.

[[Page 58904]]

    (d) BLM may impose bonding and reclamation requirements on sampling 
and testing that you conduct under an authorization letter.

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?

    If BLM requires you to submit a mining plan, it must include:
    (a) A map, sketch, or aerial photograph identifying the area for 
which you are applying, the area and depth 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?

    If BLM requires you to submit a reclamation plan, it 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  What is the process for BLM to approve 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 in writing when we approve your plan. 
You must follow BLM-approved mining and reclamation plans, which become 
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. BLM will consult with you before requiring a 
modification.
    (b) If BLM notifies you that you must modify your plan, you must 
prepare the modification, or explain why you need more time, within 30 
days. If you fail to modify your plan to BLM's satisfaction, BLM may 
order you to stop operations under your contract or permit.
    (c) When you ask to change an approved mining or reclamation plan 
for one of the reasons in paragraph (a) of this section, BLM will 
notify you in writing within 30 days whether we approve the 
modification, deny it, or require any changes in it.

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 
that you mine or remove;
    (d) To examine weight tickets, truck logs, and other records that 
BLM finds necessary to verify production; and
    (e) To determine whether you comply with contract, permit, 
statutory, or regulatory 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 will allow 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 equipment, personal 
property, or any other improvement, it becomes the property of the 
United States. However, you 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; or
    (c) Default in the performance of any material term, covenant, or 
stipulation in the contract.


Sec. 3601.62  Cancellation procedure.

    (a) BLM will give you written notice of any defaults, breach, or 
cause of forfeiture, either in person or by certified mail. You have 30 
days after receiving 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 BLM's satisfaction why we should 
not cancel your contract or free use permit.
    (b) If you fail to respond to the notice under paragraph (a) of 
this section, or if delivery of the notice is refused, or not completed 
as described in Sec. 1810.2 of this chapter, BLM may cancel the 
contract or permit.

Unauthorized Use


Sec. 3601.70  Unauthorized use.


Sec. 3601.71  What constitutes unauthorized use?

    (a) Except as provided in paragraph (b) of this section, 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 constitutes unauthorized use.
    (b) If you own the surface estate of lands with reserved Federal 
minerals, you may use mineral materials within the boundaries of your 
surface estate without a sales contract or permit only in the following 
circumstances:
    (1) You use a minimal amount of mineral materials for your own 
personal use;
    (2) You have statutory authority to use the mineral materials; or
    (3) You have other express authority to use the mineral materials.


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.

[[Page 58905]]

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?

    (a) 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.
    (b) BLM also may initiate a sale without a request under paragraph 
(a) of this section.


Sec. 3602.12  How does the mineral materials sales process affect other 
users of the same public lands?

    (a) 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, 
including subsequent mining claim locations.
    (b) The superior right under paragraph (a) of this section is part 
of all contracts and permits BLM authorizes within 2 years after the 
date we designate the tract. BLM may extend this 2-year period for one 
additional year for good cause. The right continues for the entire term 
of the contract or permit and any renewal term. The superior right 
under paragraph (a) of this section also applies to any subsequent 
contracts or permits that BLM authorizes within 2 years after the 
previous contract or permit expires or terminates.
    (c) 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 determines fair market value by appraisal.
    (b) BLM may periodically reappraise the value of mineral materials 
not yet removed, and adjust your 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, we may either 
designate the method you must use or allow you to choose either method. 
We will verify your results.


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

    (a) For contracts of $2,000 or more, BLM will require a performance 
bond of an amount sufficient to meet the reclamation standards provided 
for in the contract, but at least $500. If you have a sales contract 
from a community pit or common use area and you pay a reclamation fee, 
BLM will not require you to post a performance bond.
    (b) BLM may require a performance bond for contracts of less than 
$2,000. We will not require a bond amount greater 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 (Circular 
570) issued by the U.S. Treasury Department, including surety bonds 
arranged or paid for by third parties;
    (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 
your failure to meet the terms and conditions of the contract;
    (4) Irrevocable letter of credit from a bank or financial 
institution organized or authorized to transact business in the United 
States, with a power of attorney to BLM to redeem it upon your failure 
to meet the terms and conditions of the contract; or
    (5) 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 your 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 transferee provides a 
bond that assumes all of your existing liabilities as required in 
Sec. 3602.24. However, under Sec. 3602.26, you remain liable for any 
reclamation or other obligation that accrued during the time you held 
your interest.

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 sales contract for mineral materials--
    (1) For 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 BLM awards the contract;
    (ii) For competitive sales, you must pay the first installment as a 
deposit at the time you submit the bid; and
    (iii) For noncompetitive and competitive sales--
    (A) Once you have removed materials, you must make each subsequent 
installment payment monthly in an amount equal to the value of the 
minerals you remove each month. You must make the payment by the 15th 
day following the end of the month for which you are reporting. 
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 
unless we cancel your contract under Sec. 3601.61; or
    (B) You may make advance payment for your annual production based 
on the previous year's production or your projection of the current 
year's production, so long as you resume paying on a monthly basis as 
required in paragraph (a)(2)(iii)(A) of this section if your annual 
payment does not cover your actual production for the current year. You 
must resume monthly payments no later than the 15th day following the 
end of the month in which production exceeds the projected production 
on which payments were based.
    (3) You must annually (as provided in your contract) produce an 
amount sufficient to pay to the United States a sum of money equal to 
the first

[[Page 58906]]

installment determined under paragraph (a)(2) of this section. In lieu 
of such production, you may make an annual payment in the amount of the 
first installment. If in any contract year you make production payments 
that are less than the first installment, you must pay the difference 
between the production payments and the amount of the first 
installment. These annual payments are due on or before each 
anniversary date of the contract.
    (b) If you fail to comply with 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 terminates when--
    (1) Its term expires;
    (2) You have completed production under your contract or permit and 
any renewal, and completed required reclamation; or
    (3) 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) When your contract expires, your total payments exceed the 
total value of mineral materials included in the contract;
    (2) BLM determines that insufficient mineral materials existed in 
the sales area to fulfill the terms of the contract; or
    (3) Materials you paid for are unavailable as a result of 
terminating your contract by mutual agreement under Sec. 3602.22(b).
    (b) If your refund or credit is a result of terminating your 
contract by mutual agreement under Sec. 3602.22(b), BLM will reduce the 
amount of the refund or credit 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 on the same contract, 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 included in 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 financial guarantee as required by Sec. 3602.14; or
    (ii) Obtains a written commitment from the previous surety that it 
will be bound by the assignment when BLM approves it; and
    (2) The assignment contains all the terms and conditions in your 
contract.


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

    When BLM approves your assignment, your assignee is entitled to all 
the rights and is 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 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 contract expires; or
    (2) For contracts with terms of 90 days or less, BLM receives your 
written request not later than 15 days before the contract expires; and
    (b) You show in writing that the delay in removing the mineral 
materials was due to causes beyond your control and was not due to your 
fault or negligence.


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

    (a) BLM may 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 at least one report per contract year of the 
amount of mineral materials you have mined or removed under your sales 
contract so BLM can verify that you have made the required payments. 
BLM will specify the timing of the reports in your contract or permit.
    (b) BLM may require more frequent reporting if we find it 
necessary.
    (c) 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 also apply to 
noncompetitive 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 multiple noncompetitive sales that exceed 
a total of 300,000 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) BLM 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

[[Page 58907]]

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 a total of 200,000 cubic yards (or weight 
equivalent) in one State in any period of 12 consecutive months.
    (b) If the materials remain within the boundaries of the lease, 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.


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 that BLM may allow 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 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 of this part, 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 sale 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; and
    (2) Will post a sale notice in a conspicuous place in the office 
where you will submit bids.
    (b) In the sale notice, BLM will state:
    (1) By legal description, the location 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;
    (7) The minimum deposit we require;
    (8) The site access that will be available to the purchaser;
    (9) The method of bidding;
    (10) If applicable, that the purchaser must file mining or 
reclamation plans;
    (11) The bonding requirement;
    (12) The location for inspection of contract terms and proposed 
stipulations;
    (13) The address and telephone number of the office where you may 
obtain additional information;
    (14) Whether BLM will renew the contract; and
    (15) Any additional information that BLM deems necessary.
    (c) BLM may, in its discretion, extend the period of time for 
advertising;
    (d) BLM will not hold sales sooner than 1 week after the last 
advertisement.


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

    (a) In conducting a competitive sale, BLM may require submission of 
sealed written bids, oral bids, or a combination of both. The sale 
notice will state how you must submit your bid. 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 identical high 
bids. If no oral bid is made higher than the sealed bids, BLM will pick 
the successful bidder by lot. After BLM announces the high bid at an 
oral auction, if you are the high bidder you must confirm that bid in 
writing at least by the close of business on the date of the sale, or 
by such time as BLM may specify in the sale notice.
    (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 5 percent of the 
appraised value as we specify in the sale notice.
    (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 final steps will BLM take before issuing me a 
contract?

    (a) Ability to perform. BLM may require you to furnish information 
we find necessary to determine whether you are able to meet the 
obligations of the contract.
    (b) Reasons for denying a contract. We will deny you the contract, 
even if you made the highest bid, if--
    (1) We determine that you are unable to meet the obligations of the 
contract,
    (2) You are unwilling to accept the terms of the contract, or
    (3) BLM rejects all bids.
    (c) Refund of deposit. If BLM denies you a contract under paragraph 
(b)(1) or (b)(3) of this section, we will refund your deposit.
    (d) Awarding a contract. BLM will notify you of your contract award 
by presenting you with or sending you the contract.
    (e) Accepting a contract. 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.
    (f) Awarding the contract to the second-highest bidder. 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 offer and award the contract for the amount of the 
high bid to the person making the next highest complete bid. That 
person must be qualified and willing to accept the contract, and must 
redeposit the amount required under Sec. 3602.44(b).
    (g) Contract form. BLM will make all sales on BLM standard contract 
forms

[[Page 58908]]

approved by the Director, Bureau of Land Management. We will include as 
necessary additional provisions and stipulations in the contract to 
conform to the provisions of the competitive sale notice and to address 
environmental concerns or other site-specific issues.


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

    The term of the contract will be in the sales notice. 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 
purchased under a competitive contract, you may apply for renewal of 
the contract without further competitive bidding 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 it expires. 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 BLM may renew a contract. There is no maximum 
number of times BLM may renew a contract.


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 offer you a contract restricted to a single term or 
otherwise limited in its duration. We will base this restriction 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 BLM limits a contract under this section, the sale notice 
under Sec. 3602.42 will include this information.
    (c) If your contract is in existence on December 24, 2001, BLM will 
decide whether you may request renewal of that contract. You must ask 
BLM for this decision at least 90 days before the contract expires. If 
fewer than 120 days remain on your existing contract on December 24, 
2001, BLM may approve a renewal request that you submit less than 90 
days before the contract expires if we decide the contract qualifies 
for renewal and we have sufficient time to process your request before 
your contract is due to expire.

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 may be any 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 of this part 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 generally will not require a mining or reclamation plan before 
you mine or remove mineral materials from a community pit or common use 
area. We may require such a plan if we find that circumstances warrant 
it. In all cases, 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?

    Generally, you do not need to perform reclamation after extracting 
mineral materials from community pits or common use areas. 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 you pay is a proportionate share of the 
total estimated cost of reclamation, determined by using the ratio of 
the material that you extract under your

[[Page 58909]]

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. If BLM allows you to perform reclamation in lieu 
of paying a fee, we may also require you to post a bond under 
Sec. 3602.14.

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 may 
file a letter of request or a BLM standard application 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 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 the 
government entity shows that it will not use these materials for 
commercial or industrial purposes.
    (b) BLM may issue free use permits to a non-profit organization for 
not more than 5,000 cubic yards (or weight equivalent) in any period of 
12 consecutive months, provided that the organization shows that it 
will not use these materials 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) You can mine 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 expires.
    (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 BLM's written 
approval.


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.


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

    BLM may require a bond or other security as a guarantee of your 
faithful compliance with the provisions of your permit and applicable 
regulations, including reclamation. The type of security must be one of 
those 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 claim to or entry of the lands made after 
the date BLM designated the tract for mineral materials disposal. See 
Sec. 3602.12.

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.
    5. Subpart 3621 consisting of Secs. 3621.1 through 3621.7 and 
3621.2, 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.
    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.''
    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.''

PART 3800--MINING CLAIMS UNDER THE GENERAL MINING LAWS

Subpart 3809--Surface Management

    9. The authority citation for part 3800 continues to read as 
follows:


[[Page 58910]]


    Authority: 16 U.S.C. 1280; 30 U.S.C. 22; 30 U.S.C. 612; 43 
U.S.C.1201; and 43 U.S.C. 1732, 1733, 1740, 1781, and 1782.

    10. Section 3809.101 is amended by revising paragraph (d) to read 
as follows:


Sec. 3809.101  What special provisions apply to minerals that may be 
common variety minerals, such as sand, gravel, and building stone?

* * * * *
    (d) Disposal. BLM may dispose of common variety minerals from 
unpatented mining claims in accordance with the provisions of 
Sec. 3601.14 of this chapter.
[FR Doc. 01-29001 Filed 11-21-01; 8:45 am]
BILLING CODE 4310-84-P