30 U.S.C. § 642 : US Code - Section 642: Exploration contracts

Search 30 U.S.C. § 642 : US Code - Section 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.