30 U.S.C. § 223 — Leases; amount and survey of land; term of lease; royalties and annual rental

submitted 106 years ago by ch. 85 to r/title-30-MINERAL-LANDS-AND-MINING · 391 words · no verdicts yet

in plain englishAI-generated · not legal advice

This law lets someone who finds oil or gas on their prospecting permit lease one-fourth of that land, or up to 160 acres, at a 5% royalty and $1-per-acre rent. They also get first right to lease the rest of the land at a higher royalty, decided by competitive bidding or another method the Secretary sets, though the Secretary can reject any bid.

This section explains how a person who finds oil or gas on permitted land can get a lease. If a permit holder proves to the Secretary of the Interior that valuable oil or gas deposits exist within their prospecting permit's land, they are entitled to lease one-fourth of that land. If the permit covers at least 160 acres, they are guaranteed a lease for at least 160 acres. The permit holder picks which part of the land to lease. The chosen area must be reasonably compact. If the land has already been surveyed, the lease must follow the official legal subdivisions. If it has not been surveyed, the government surveys it, but the permit holder pays for that survey, following rules the Secretary sets. The leased land must then match the new survey's legal subdivisions. Money the applicant deposits to pay for the survey is considered spent for that purpose; any extra deposit gets refunded to the applicant or their legal representative. This first lease lasts 20 years. The royalty is 5% of the value or amount of production. The lease holder pays $1 per acre in rent each year, in advance, and that rent is credited against royalties owed for that year. The lease otherwise works the same way as leases issued under section 226 of this title before August 21, 1935. The permit holder also gets first right (a "preference right") to lease the rest of the land in their original permit. This second lease has a royalty of at least 12.5% of the value or amount of production, but no more than the royalty rate that was in the rules on January 1, 1935, for these kinds of secondary leases. It also follows the other conditions set for oil and gas leases under section 226 of this title. The exact royalty is set either through competitive bidding or another method the Secretary chooses by regulation. The Secretary always has the right to reject any or all bids.

the actual law source: uscode.house.gov ↗public domain

Upon establishing to the satisfaction of the Secretary of the Interior that valuable deposits of oil or gas have been discovered within the limits of the land embraced in any permit, the permittee shall be entitled to a lease for one-fourth of the land embraced in the prospecting permit: Provided, That the permittee shall be granted a lease for as much as one hundred and sixty acres of said lands, if there be that number of acres within the permit. The area to be selected by the permittee, shall be in reasonably compact form and, if surveyed, to be described by the legal subdivisions of the public-land surveys; if unsurveyed, to be surveyed by the Government at the expense of the applicant for lease in accordance with rules and regulations to be prescribed by the Secretary of the Interior, and the lands leased shall be conformed to and taken in accordance with the legal subdivisions of such surveys; deposits made to cover expense of surveys shall be deemed appropriated for that purpose, and any excess deposits may be repaid to the person or persons making such deposit or their legal representatives. Such leases shall be for a term of twenty years upon a royalty of 5 per centum in amount or value of the production and the annual payment in advance of a rental of $1 per acre, the rental paid for any one year to be credited against the royalties as they accrue for that year, and shall continue in force otherwise as prescribed in section 226 of this title for leases issued prior to August 21, 1935. The permittee shall also be entitled to a preference right to a lease for the remainder of the land in his prospecting permit at a royalty of not less than 12½ per centum in amount or value of the production nor more than the royalty rate prescribed by regulation in force on January 1, 1935, for secondary leases issued under this section, and under such other conditions as are fixed for oil or gas leases issued under section 226 of this title the royalty to be determined by competitive bidding or fixed by such other method as the Secretary may by regulations prescribe: Provided further, That the Secretary shall have the right to reject any or all bids.

Source credit: (Feb. 25, 1920, ch. 85, § 14, 41 Stat. 442; Aug. 21, 1935, ch. 599, § 1, 49 Stat. 676.)

history & why it existsrecord from the source credit

1920Enacted · Act of Feb. 25, 1920, ch. 85 · 41 Stat. 442
1935Amended · Act of Aug. 21, 1935, ch. 599 · 49 Stat. 676

A history note hasn’t been published yet. The record shows enactment by ch. 85 on 1920-02-25.

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