§ 642. — Exploration contracts.
[Laws in effect as of January 7, 2003]
[Document not affected by Public Laws enacted between
January 7, 2003 and December 19, 2003]
[CITE: 30USC642]
TITLE 30--MINERAL LANDS AND MINING
CHAPTER 17--EXPLORATION PROGRAM FOR DISCOVERY OF MINERALS
Sec. 642. Exploration contracts
(a) Terms and conditions; interest rates
In order to carry out the purposes of this chapter, and subject to
the provisions of this section, the Secretary is authorized to enter
into exploration contracts with individuals, partnerships, corporations,
or other legal entities which shall provide for such Federal financial
participation as he deems in the national interest. Such contracts shall
contain terms and conditions as the Secretary deems necessary and
appropriate, including terms and conditions for the repayment of the
Federal funds made available under any contract together with interest
thereon, as a royalty on the value of the production from the area
described in the contract. Interest shall be calculated from the date of
the loan. Such interest shall be at rates which (1) are not less than
the rates of interest which the Secretary of the Treasury shall
determine the Department of the Interior would have to pay if it
borrowed such funds from the Treasury of the United States, taking into
consideration current average yields on outstanding marketable
obligations of the United States with maturities comparable to the terms
of the particular contracts involved and (2) plus 2 per centum per annum
in lieu of recovering the cost of administering the particular
contracts.
(b) Deposit of royalty payments
Royalty payments received under subsection (a) of this section shall
be covered into the miscellaneous receipts of the Treasury.
(c) Certification of exploration projects; payment of royalties; time
limitation on payment; royalty agreements
When in the opinion of the Secretary an analysis and evaluation of
the results of the exploration project disclose that mineral production
from the area covered by the contract may be possible he shall so
certify within the time specified in the contract. Upon certification,
payment of royalties shall be a charge against production for the full
period specified in the contract or until the obligation has been
discharged, but in no event shall such royalty payments continue for a
period of more than twenty-five years from the date of contract. When
the Secretary determines not to certify he shall promptly notify the
contractor. When the Secretary deems it necessary and in the public
interest, he may enter into royalty agreements to provide for royalty
payments in the same manner as though the project had been certified.
(d) Production
No provision of this chapter, nor any rule or regulation which may
be issued by the Secretary shall be construed to require any production
from the area described in the contract.
(e) Rules and regulations; adjustment of contracts
The Secretary shall establish and promulgate such rules and
regulations as may be necessary to carry out the purposes of this
chapter: Provided, however, That he may modify and adjust the terms and
conditions of any contract to reduce the amount and term of any royalty
payment when he shall determine that such action is necessary and in the
public interest: Provided further, That no such single contract shall
authorize Government participation in excess of $250,000.
(f) Availability of funds
No funds shall be made available under this chapter unless the
applicant shall furnish evidence that funds from commercial sources are
unavailable on reasonable terms.
(Pub. L. 85-701, Sec. 2, Aug. 21, 1958, 72 Stat. 700.)
