36 CFR 228c

[Code of Federal Regulations]
[Title 36, Volume 2, Parts 200 to 299]
[Revised as of July 1, 1998]
From the U.S. Government Printing Office via GPO Access
[CITE: 36CFR228]

[Page 160-172]

TITLE 36--PARKS, FORESTS, AND PUBLIC PROPERTY

CHAPTER II--FOREST SERVICE, DEPARTMENT OF AGRICULTURE

PART 228--MINERALS--Table of Contents

Subpart C--Disposal of Mineral Materials

Source: 49 FR 29784, July 24, 1984, unless otherwise noted.

Sec. 228.40 Authority.

Authority for the disposal of mineral materials is provided by the
Materials Act of July 31, 1947 (30 U.S.C. 601 et seq.), as amended by
the Acts of August 31, 1950 (30 U.S.C. 603-604), July 23, 1955 (30
U.S.C. 601, 603), and September 25, 1962 (30 U.S.C. 602), and by the
following: the Act of June 4, 1897 (16 U.S.C. 477); the Act of March 4,
1917 (16 U.S.C. 520); the Bankhead-Jones Farm Tenant Act of July 22,
1937 (7 U.S.C. 1010); the Act of September 1, 1949 (section 3) (30
U.S.C. 192c); the Act of June 30, 1950 (16 U.S.C. 508b); the Act of June
28, 1952 (section 3) (66 Stat. 285); the Act of September 2, 1958 (16
U.S.C. 521a); the Act of June 11, 1960 (74 Stat. 205); the Federal
Highway Act of August 27, 1958 (23 U.S.C. 101 et seq.); and the Alaska
National Interest Lands Conservation Act of December 2, 1980 (section
502) (16 U.S.C. 539a).

Sec. 228.41 Scope.

(a) Lands to which this subpart applies. This subpart applies to all
National Forest System lands reserved from the public domain of the
United States, including public domain lands being administered under
the Bankhead-Jones Farm Tenant Act of July 22, 1937 (7 U.S.C. 1010); to
all National Forest System lands acquired pursuant to the Weeks Act of
March 1, 1911 (36 Stat. 961); to all National Forest System lands with
Weeks Act status as provided in the Act of September 2, 1958 (16 U.S.C.
521a); and to public lands within the Copper River addition to the
Chugach National Forest (16 U.S.C. 539a). For ease of reference and
convenience to the reader, these lands are referred to, throughout this
subpart, as National Forest lands.
(b) Restrictions. Disposal of mineral materials from the following
National Forest lands is subject to certain restrictions as described
below:
(1) Segregation or withdrawals in aid of other agencies. Disposal of
mineral materials from lands segregated or withdrawn in aid of a
function of another Federal agency, State, territory, county,
municipality, water district, or other governmental subdivision or
agency may be made only with the written consent of the governmental
entity.
(2) Segregated or withdrawn National Forest lands. Mineral materials
may not be removed from segregated or withdrawn lands where removal is
specifically prohibited by statute or by public land order. Where not
specifically prohibited, removal of mineral materials may be allowed if
the authorized officer determines that the removal is not detrimental to
the values for which the segregation or withdrawal was made, except as
provided in paragraph (b)(1) of this section. Where operations have been
established prior to the effective date of this Subpart and where not
prohibited by statute, they may be permitted to continue. Nothing in
this subparagraph is intended to prohibit the exercise of valid existing
rights.
(3) Unpatented mining claims. Provided that claimants are given
prior notice and it has been determined that removal will neither
endanger nor materially interfere with prospecting, mining, or
processing operations or uses reasonably incident thereto on the claims,
disposal of mineral materials may be allowed from:
(i) Unpatented mining claims located after July 23, 1955; and/or
(ii) Unpatented mining claims located before July 23, 1955, and on
which the United States has established the right to manage the
vegetative and other surface resources in accordance with the Multiple
Use Mining Act of July 23, 1955 (30 U.S.C. 601, 603, 611-615).
(4) Acquired Bankhead-Jones lands. Mineral materials on lands which
were acquired under the authority of the Bankhead-Jones Farm Tenant Act
of July 22, 1937 (7 U.S.C. 1010-1012), and which lie outside the
exterior boundaries of National Forests, or on acquired lands which are
being administered under the Act and which also lie outside the exterior
boundaries of National Forests, may be disposed of

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under these regulations only to public authorities and agencies, and
only on condition that the mineral materials are used for public
purposes (7 U.S.C. 1011(c)).
(c) Mineral materials to which this subpart applies. This subpart
applies to mineral materials which consist of petrified wood and common
varieties of sand, gravel, stone, pumice, pumicite, cinders, clay, and
other similar materials. Such mineral materials include deposits which,
although they have economic value, are used for agriculture, animal
husbandry, building, abrasion, construction, landscaping, and similar
uses. This subpart also applies to other materials which may not be
minerals but are produced using mining methods, such as peat. The
categories of these materials, including representative examples, are:
(1) Agricultural supply and animal husbandry materials. This
category includes, but is not limited to, minerals and vegetative
materials used as or for: Soil conditioners or amendments applied to
physically alter soil properties such as direct applications to the soil
of carbonate rocks, soil containing ``trace elements'' and peat; animal
feed supplements; and other animal care products.
(2) Building materials. Except for minerals identified as Uncommon
Varieties, this category includes, but is not limited to, minerals used
as or for: Paint fillers or extenders; flagstone, ashlar, rubble,
mortar, brick, tile, pipe, pottery, earthenware, stoneware, terrazzo,
and other nonstructural components in floors, walls, roofs, fireplaces,
and the like; and similar building uses.
(3) Abrasive materials. This category includes, but is not limited
to, minerals used for: Filing; scouring; polishing; sanding; and
sandblasting.
(4) Construction materials. This category includes, but is not
limited to, minerals such as sand, gravel, clay, crushed rock and
cinders used as or for fill; borrow; rip-rap; ballast (including all
ballast for railroad use); road base; road surfacing; concrete
aggregate; clay sealants; and similar construction uses.
(5) Landscaping materials: This category includes, but is not
limited to minerals and peat used as or for: Chips, granules, sand,
pebbles, scoria, cinders, cobbles, boulders, slabs, and other components
in retaining walls, walkways, patios, yards, gardens, and the like; and
similar landscaping uses.
(d) Minerals not covered by this subpart. Mineral materials do not
include any mineral used in manufacturing, industrial processing, or
chemical operations for which no other mineral can be substituted due to
unique properties giving the particular mineral a distinct and special
value; nor do they include block pumice which in nature occurs in pieces
having one dimension of two inches or more which is valuable and used
for some application that requires such dimensions. Disposal of minerals
not covered by this subpart is subject to the terms of the United States
Mining Laws, as amended (30 U.S.C. 22 et seq.), on those portions of the
National Forest System where those laws apply. Such minerals may
include:
(1) Mineral suitable and used as soil amendment because of a
constituent element other than calcium or magnesium carbonate that
chemically alters the soil;
(2) Limestone suitable and used, without substantial admixtures, for
cement manufacture, metallurgy, production of quicklime, sugar refining,
whiting, fillers, paper manufacture, and desulfurization of stack gases;
(3) Silica suitable and used for glass manufacture, production of
metallic silicon, flux, and rock wool;
(4) Alumino-silicates or clays having exceptional qualities suitable
and used for production of aluminum, ceramics, drilling mud, taconite
binder, foundry castings, and other purposes for which common clays
cannot be used;
(5) Gypsum suitable and used for wallboard, plaster, or cement.
(6) Block pumice which occurs in nature in pieces having one
dimension of two inches or more and which is valuable and used for some
application that requires such dimensions; and
(7) Stone recognized through marketing factors for its special and
distinct properties of strength and durability making it suitable for
structural support and used for that purpose.
(e) Limitations on applicability. (1) The provisions of paragraphs
(c) and (d) of

[[Page 162]]

this section shall not apply to any mining claims for which a Mineral
Entry Final Certificate was issued on or before January 16, 1991. Nor
shall these provisions apply to any mining claim located on or before
July 23, 1955, which has satisfied the marketability test for locatable
minerals from on or before July 23, 1955, until the present date.
(2) A use which qualifies a mineral as an uncommon variety under
paragraph (d) overrides classification of that mineral as a common
variety under paragraph (c) of this section.
[49 FR 29784, July 24, 1984, as amended at 55 FR 51706, Dec. 17, 1990]

Sec. 228.42 Definitions.

For the purposes of this subject, the following terms are defined:
Acquired National Forest lands. National Forest System lands
acquired under the Weeks Act of March 1, 1911 (36 Stat. 961), and
National Forest System lands with Weeks Act status as provided in the
Act of September 2, 1958 (16 U.S.C. 521a).
Authorized officer. Any Forest Service officer to whom authority for
disposal of mineral materials has been delegated.
Common-use area. Generally, a broad geographic area from which
nonexclusive disposals of mineral materials available on the surface may
be made to low volume and/or noncommercial users.
Community site. A site noted on appropriate Forest records and
posted on the ground from which nonexclusive disposals of mineral
materials may be made to low volume and/or noncommercial users.
Contract. A signed legal agreement between the Forest Service and a
purchaser of mineral materials, which specifies (among other things) the
conditions of a competitive, negotiated, or preference right sale of
mineral materials to the purchaser.
Mineral materials. A collective term used throughout this subpart to
describe petrified wood and common varieties of sand, gravel, stone,
pumice, pumicite, cinders, clay, and other similar materials. Common
varieties do not include deposits of those materials which are valuable
because of some property giving them distinct and special value, nor do
they include ``so-called `block pumice' '' which occurs in nature in
pieces having one dimension of two inches or more and which is valuable
and used for some application that requires such dimensions.
Permit. A signed legal document between the Forest Service and one
who is authorized to remove mineral materials free of charge, which
specifies (among other things) the conditions of removal by the
permittee.
Preference right negotiated sale. A negotiated sale which may be
awarded in response to the finding and demonstration of a suitable
deposit of mineral material on acquired National Forest lands as the
result of exploratory activity conducted under the authority of a
prospecting permit.
Prospecting permit. A written instrument issued by the Forest
Service which authorizes prospecting for a minerial material deposit on
acquired National Forest lands within specific areas, under stipulated
conditions, and for a specified period of time.
Single entry source. A source of mineral materials which is expected
to be depleted under a single contract or permit or which is reserved
for Forest Service use.
Unpatented mining claim. A lode or placer mining claim or a millsite
located under the General Mining Law of 1872, as amended (30 U.S.C. 21-
54), for which a patent under 30 U.S.C. 29 and regulations of the
Department of the Interior has not been issued.
Withdrawn National Forest lands. National Forest System lands
segregated or otherwise withheld from settlement, sale, location, or
entry under some or all of all of the general land laws (43 U.S.C.
1714).
[49 FR 29784, July 24, 1984, as amended at 55 FR 51706, Dec. 17, 1990]

Sec. 228.43 Policy governing disposal.

(a) General. Forest Service policy is to make mineral materials on
National Forest lands available to the public and to local, State, and
Federal government agencies where reasonable protection of, or
mitigation of effects on, other resources in assured, and where removal
is not prohibited.

[[Page 163]]

(1) A contract or permit limits processing of the mineral material
onsite to the first salable product.
(2) Additional onsite processing may be authorized by a separate
permit (36 CFR 251.50).
(3) The authorized officer must ensure that an environmental
analysis is conducted for all planned disposals of mineral materials.
(4) Decisions to authorize the disposal of mineral materials must
conform to approved land and resource management plans (36 CFR 219.22).
(b) Price. Mineral materials may not be sold for less than the
appraised value. The authorized officer may assess a fee to cover costs
of issuing and administering a contract or permit.
(c) Conservation. Adequate measures must be taken to protect, and
minimize damage to the environment. Mineral materials may be disposed of
only if the authorized officer determines that the disposal is not
detrimental to the public interest.
(d) Ownership. Title to the mineral materials vests in the purchaser
or permittee immediately before excavation, subject to the provisions of
Secs. 228.47 through 228.56 and other provisions of the contract or
permit. Title to excavated material not removed within the time provided
revests in the United States.
(e) Decisions. All decisions as to whether or not to grant disposals
proposed under this subpart shall be made in writing by the authorized
officer. Such decisions must specify their factual and legal basis.
(f) Option for mining claimants. All mining claimants holding mining
claims which are located for a mineral classified in accordance with
this subpart as a mineral material have the option of maintaining that
the mineral is locatable and filing for patent. All mining claimants
holding mining claims located in good faith on or before January 16,
1991, for a mineral classified in accordance with this subpart as a
mineral material may accept the classification and, if appropriate,
receive a sale by negotiated contract for that mineral material under 36
CFR 228.57(b)(2) of this subpart.
[49 FR 29784, July 24, 1984, as amended at 55 FR 51706, Dec. 17, 1990]

Sec. 228.44 Disposal on existing Federal leased areas.

Mineral material contracts or permits may be issued within existing
areas leased or under permit under the 1920 Mineral Leasing Act, as
amended (30 U.S.C. 181-187); section 402 of Reorganization Plan No. 3 of
1946 (5 U.S.C. Appendix); the 1947 Mineral Leasing Act for Acquired
Lands, as amended (30 U.S.C. 351 et seq.); and the 1970 Geothermal Steam
Act (30 U.S.C. 1001-1025), provided that it has been determined that
removal will neither endanger nor unreasonably interfere with lease
operations, and provided further that the lease terms do not prohibit
disposal.

Sec. 228.45 Qualifications of applicants.

The authorized officer may require applicants for prospecting
permits, negotiated contracts, or free-use permits or bidders for the
sale of mineral materials to furnish information necessary to determine
their ability to perform the obligations of the contract or permit.

Sec. 228.46 Application of other laws and regulations.

All mining operations for removal of mineral materials from National
Forest lands must meet or exceed applicable Federal standards for the
protection of public safety, health, and the environment, and must also
meet or exceed State and local standards for the protection of public
safety, health, and the environment, to the extent that such standards
are not in conflict with Federal purposes and functions.

General Provisions

Sec. 228.47 General terms and conditions of contracts and permits.

(a) Disposal of designated mineral materials. Only those specified
mineral materials found within the area designated in the contract or
permit may be extracted and removed.
(b) Unauthorized removal (trespass) of mineral materials. The
removal of mineral materials from National Forest lands, except when
authorized in accordance with applicable law and regulations of the
Department of Agriculture, is prohibited (36 CFR 261.9).

[[Page 164]]

(c) Conservation. Mineral material contracts and permits must
contain provisions to ensure the efficient removal and conservation of
the mineral material.
(d) Improvements. Contracts and permits must contain provisions for
removal or Government retention of improvements.
(e) Use of existing National Forest development roads. The
authorized officer may require purchasers and permittees to obtain
appropriate road-use permits, make deposits for or perform their
commensurate share of road maintenance, and comply with road-use rules
contained in 36 CFR part 212, depending upon their planned extent of
road use.
(f) Reclamation. Requirements for reclamation of areas disturbed by
mineral material operations must be included in contracts and permits,
except for disposals from community sites and common-use areas.

Sec. 228.48 Appraisal and measurement.

(a) Appraisal. All mineral materials for sale must be appraised to
determine fair market value. Appraisals must be based on knowledge of
the extent of the deposit, quality of material, and economic value. A
sale must not be made at less than the appraised value which may be
expressed as either price per cubic yard or weight equivalent. In all
cases the units of measurement must correspond to the units used in the
appraisal. The authorized officer must estimate and record the amount
and value of minerals to be disposed of by free-use permit.
(b) Measurement. The amount of mineral material actually removed may
be measured by volume, weight, truck tally, by combination of these
methods, or by such other form of measurement as the authorized officer
determines to be appropriate and in the public interest.

Sec. 228.49 Reappraisal.

If an extension of time is granted as provided in Sec. 228.53(b),
the authorized officer must reappraise or reestimate the mineral
materials covered by the contract or permit and which remain unexcavated
at the time of extension. The recalculated unit value becomes the new
unit value for the remaining unexcavated material; excavated and
stockpiled material is not subject to reappraisal.

Sec. 228.50 Production records.

At least annually, the purchaser or permittee must furnish a record
of the volume extracted, in cubic yards or weight equivalent, to the
authorized officer. The units of measurement must correspond to the
units used in the appraisal or estimate.

Sec. 228.51 Bonding.

(a) Bond requirements. Before operations may begin under any
contract or permit, a bond must be furnished to the authorized officer
to ensure performance of payment (as necessary), reclamation, and other
conditions of the contract or permit, except as noted in paragraphs (a)
(1) and (3) of this section, where the authorized officer may waive such
bonding. If an extension of time is granted as provided in
Sec. 228.53(b), the bond requirements must be recalculated and changed
accordingly.
(1) For advance payment contracts for 10,000 cubic yards or more in
volume (or weight equivalent), a bond of not less than 10 percent of the
total contract price or the value of the estimated annual production
(whichever is less), plus the reclamation cost for the area covered by
annual mining, is required. When the total volume is less than 10,000
cubic yards, bond requirements, if any, are at the discretion of the
authorized officer.
(2) For any defered payment contract, a bond equalling the value of
the estimated annual production plus the reclamation cost for the area
covered by annual mining is required.
(3) For free use, the authorized officer may require a reclamation
bond which must be sufficient to cover the cost of reclamation of the
anticipated annual work.
(b) Types of bonding. A bond must be one of the following:
(1) A bond of a corporate surety shown on the latest approved list
issued by the U.S. Treasury Department and executed on an approved
standard form;
(2) A cash bond;

[[Page 165]]

(3) Negotiable securities of the United States;
(4) An irrevocable letter of credit acceptable to the Forest
Service;
(5) A performance bond required by other Forest Service contracts or
permits, provided the bond covers the performance and reclamation
requirements related to the removal of mineral material from a
designated pit or area for use in the performance of the contract or
permit; or
(6) Any other types of bond specified in the Forest Service Manual.

Sec. 228.52 Assignments.

(a) Limitations. A purchaser or permittee may not assign the
contract or permit, or any interest therein, without the written
approval of the authorized officer.
(b) Requirements of assignee. The authorized officer will not
approve any proposed assignment involving contract or permit performance
unless the assignee:
(1) Submits information necessary to assure the authorized officer
of the assignee's ability to meet the same requirements as the original
purchaser or permittee (assignor); and
(2) Furnishes a bond or obtains a commitment from the previous
surety to be bound by the assignment when approved.
(c) Rights and obligations. Once the authorized officer approves an
assignment, the assignee is entitled to all the rights and is subject to
all of the obligations under the contract or permit, and the original
purchaser or permittee may be released from any further responsiblity
under the contract or permit.

Sec. 228.53 Term.

(a) Time allowed. Except as provided in Sec. 228.61(f),
Sec. 228.62(b), and elsewhere in this paragraph, a contract or permit
may not exceed 1 year from the effective date of the contract or permit
unless a written extension is obtained. For those mineral materials sold
under a duration of production contract or under a contract for the sale
of all mineral material within a specified area, or under a construction
contract where removal cannot reasonably take place before completion of
other work under the same contract, the authorized officer will
establish a reasonable time period for removal.
(b) Extension of time. If it is shown that a delay in removal was
due to causes beyond the control of the purchaser or permittee, the
authorized officer may grant an extension, not to exceed 1 year, upon
written request. Written requests for extensions of contracts must be
received between 30 and 90 days before the expiration date of the
contract. Written requests for extensions of permits must be received
between 15 and 90 days before the permit expiration date. The authorized
officer may grant a total of two extensions for contracts and permits.

Sec. 228.54 Single entry sales or permits.

The purchaser or permittee is required to reclaim a single entry
source in accordance with an approved operating plan which describes
operating procedures and reclamation measures, unless the requirement is
waived by the authorized officer.

Sec. 228.55 Cancellation or suspension.

The authorized officer may cancel or suspend a contract, permit, or
prospecting permit if the purchaser or permitte fails to comply with its
terms and conditions. If the noncompliance is unnecessarily or
unreasonably causing injury, loss, or damage to surface resources, the
authorized officer may cancel or suspend the contract, permit, or
prospecting permit immediately. In cases where noncompliance is of a
less serious nature, the authorized officer may cancel or suspend a
contract, permit, or prospecting permit it such noncompliance continues
for 30 days after service of written notice by the authorized officer.
If the noncompliance is not corrected, the authorized officer may attach
the bond to ensure compliance with the provisions of the contract,
permit, or prospecting permit.

Sec. 228.56 Operating plans.

Any surface-disturbing operation under a contract, permit, or
prospecting permit is subject to prior approval by the authorized
officer of an operating plan and to reasonable conditions as may be
required to ensure proper protection of the environment

[[Page 166]]

and improvements, including timely reclamation of disturbed lands.
Significant changes to operations require prior approval of an amended
operating plan. The operating plan must include, as a minimum, a map and
explanation of the nature of the access, anticipated activity, surface
disturbance, and intended reclamation including removal or retention of
structures and facilities. Operating plans must be submitted by the
purchaser, permittee, or prospecting permittee, except as noted in
Sec. 228.64(b).

Types and Methods of Disposal

Sec. 228.57 Types of disposal.

Except as provided in Sec. 228.41(b), disposal of mineral materials
may be made by:
(a) Competitive sale to the highest qualified bidder after formal
advertising and other appropriate public notice;
(b) Sale by negotiated contract. (1) For removal of materials to be
used in connection with a public works improvement program on behalf of
a Federal, State, or local government agency if the public exigency will
not permit delays incident to advertising, or
(2) For the removal of mineral materials for which it is
impracticable to obtain competition;
(c) Preference right negotiated sale to the holder of a Forest
Service-issued prospecting permit under which a suitable mineral
material deposit has been demonstrated on acquired National Forest
lands;
(d) Free use when a permit is issued to any nonprofit association,
corporation, individual, or others listed in Sec. 228.62(d), for other
than commercial purposes, resale, or barter, or to any Federal, State,
county, local unit, subdivision, municipality, or county road district
for use in public projects; or
(e) Forest Service force account or by contract where the material
is to be used to carry out various Forest Service programs involving
construction and maintenance of physical improvements.

Sec. 228.58 Competitive sales.

(a) Invitation for bid. Sales must be conducted as described below
after inviting competitive bids through publication and posting. The
authorized officer may not offer a competitive sale unless there is a
right-of-way or other access to the sale area which is available to
anyone qualified to bid.
(b) Advertising--(1) Sales over 25,000 cubic yards. Mineral material
sales offered by competitive bidding and which exceed 25,000 cubic yards
must be advertised on the same day once a week for two consecutive weeks
in a newspaper of general circulation in the area where the material is
located, and in a trade or industrial newspaper when considered
appropriate. Notice of the sale must be posted in a conspicuous place in
the office where bids are to be submitted. In addition, the authorized
officer may send the advertisement directly to known interested persons.
Bids may be received but not evaluated before the end of the advertising
period, which may be extended at the discretion of the authorized
officer.
(2) Content of advertising. The advertisement of sale must specify
the location by legal description of the tract or tracts or by any other
means identify the location of the mineral material deposit being
offered, the kind of material, estimated quantities, the unit of

measurement, appraised price (which sets the minimum acceptable bid),
time and place for receiving and opening of bids, minimum deposit
required, major special constraints due to environmental considerations,
available access, maintenance required over haul routes, traffic
controls, required use permits, required qualifications of bidders, the
method of bidding, bonding requirement, notice of the right to reject
any or all bids, the office where a copy of the contract and additional
information may be obtained, and additional information the authorized
officer deems necessary.
(3) Advertising smaller sales. Advertisement of mineral materials
amounting to 25,000 cubic yards in volume (or weight equivalent) or less
must be published and/or posted. The methods of advertisement are at the
discretion of the authorized officer.
(c) Conduct of sales. (1) Bidding at competitive sales may be
conducted by the submission of written sealed bids, oral bids, or a
combination of both as

[[Page 167]]

directed by the authorized officer. In the event of a tie in high sealed
bids, the highest bidder will be determined by oral auction among those
tied bidders; when no oral bid is higher that the sealed bids, the
selected bidder will be determined by lot, the purchase price being the
amount of the tied bid. For all oral auctions, including those used to
break sealed-bid ties, the high bidder must confirm the bid in writing
immediately upon being declared the high bidder. The authorized officer
must mail notification of the bidding results to all bidders within 10
days.
(2) The authorized officer may require bidders to furnish evidence
of qualification at the time of award or, if such evidence has already
been furnished and is still valid, make appropriate reference to the
record containing it.
(3) When it is in the interest of the United States to do so, the
authorized officer may reject any or all bids.
(d) Bid deposits and award of contract. Sealed bids must be
accompanied by a deposit. For mineral materials offered at oral auction,
bidders must make the deposit before opening of the bidding.
(1) Bid deposits must be equal to 10 percent of the appraised value
but not less than $100.00.
(2) Bid deposits must be in the form of cash, money order, bank
drafts, cashier's or certified checks made payable to the Forest
Service, or bonds acceptable to the Forest Service (Sec. 228.51(b)).
(3) Upon conclusion of the bidding, the authorized officer will
return the deposits of all unsuccessful bidders. The successful bidder's
deposit will be applied toward the purchase price. If the contract is
not awarded to the high bidder due to an inability to perform the
obligations of the contract, the deposit, less expenses and damages
incurred by the United States, may be returned. The return of a deposit
does not prejudice any other rights or remedies of the United States.
The contract may be offered and awarded to the next successive qualified
high bidder, or, at the discretion of the authorized officer, the sale
may be either readvertised or negotiated if it is determined that a
competitive sale is impracticable.
(4) Within 30 days after receipt of the contract, the successful
bidder must sign and return the contract, together with any required
bond, unless the authorized officer has granted an extension for an
additional 30 days. The bidder must apply for the extension in writing
within the first 30-day period. If the successful bidder fails to return
the contract within the first 30-day period or within an approved
extension, the bid deposit, less the costs of readvertising and damages,
may be returned without prejudice to any other rights or remedies of the
United States.
(5) All sales must be processed on Forest Service-approved contract
forms. The authorized officer may add provisions to the contract to
cover conditions peculiar to the sale area. Such additional provisions
must be made available for inspection by prospective bidders during the
advertising period.

Sec. 228.59 Negotiated or noncompetitive sales.

(a) Volume limitations. When it is determined by the authorized
officer to be in the public interest and when it is impracticable to
obtain competition, mineral materials not exceeding 100,000 cubic yards
in volume (or weight equivalent) may be sold in any one sale at not less
than the appraised value, without advertising or calling for bids,
except as provided in paragraphs (b) and (c) of this section. The
authorized officer may not approve noncompetitive sales that exceed the
total of 200,000 cubic yards (or weight equivalent) made in any one
State for the benefit of any applicant in any period of 12 consecutive
months.
(b) Government programs. In connection with a public works
improvement project on behalf of a Federal, State, or local governmental
agency, the authorized officer may sell to an applicant, at not less
than the appraised value, without advertising or calling for bids, a
volume of mineral materials not to exceed 200,000 cubic yards (or weight
equivalent) when the public exigency will not permit delays incident to
advertising (30 U.S.C. 602).
(c) Appropriation for highway purposes. For interstate and/or
Federal aid highways, the Secretary of Transportation

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may appropriate any volume in accordance with 23 U.S.C. 107 and 317.
(d) Use in development of Federal mineral leases. When it is
determined to be impracticable to obtain competition and the mineral
materials are to be used in connection with the development of mineral
leases issued by the United States (Sec. 228.44), the authorized officer
may sell to a leaseholder a volume of mineral material not to exceed
200,000 cubic yards (or weight equivalent) in one State in any period of
12 consecutive months. No charge will be made for materials which must
be moved in the process of extracting the mineral under lease, as long
as the materials remain stockpiled within the boundaries of the leased
area.
(e) Exceptions. (1) The Chief of the Forest Service may authorize
the noncompetitive sale of mineral materials in excess of the volume
limitations in paragraphs (a), (b), and (d) of this section when
necessary to:
(i) Respond to an emergency affecting public health, safety or
property;
(ii) Prevent the curtailment of operations conducted under the
United States mining laws of May 10, 1872, as amended (30 U.S.C. 22 et
seq.) which generate large volumes of mineral materials as a by-product;
or
(iii) Respond to a critical public need for the prompt development
of a mineral lease issued by the United States or a mining claim located
under the United States mining laws of May 10, 1872, as amended (30
U.S.C. 22 et seq.).
(2) Any noncompetitive sale of mineral materials in excess of the
volume limitations in paragraphs (a), (b), and (d) shall be subject to
such restrictions as the Chief of the Forest Service determines to be in
the public interest.
(3) Nothing in this paragraph shall otherwise alter the requirements
of paragraphs (a) through (d) of this section.
[49 FR 29784, July 24, 1984, as amended at 52 FR 10565, Apr. 2, 1987; 53
FR 43691, Oct. 28, 1988]

Sec. 228.60 Prospecting permits.

(a) Right conferred. On acquired National Forest lands, prospecting
permits may be issued which grant the permittee the exclusive right to
explore for and to demonstrate the existence of a suitable mineral
material deposit when existing information is insufficient. After the
demonstration of a suitable deposit and confirmation of this by the
authorized officer, the permittee will have a preference right to apply
for a negotiated sale.
(b) Limitations. Mineral material may be removed from lands under a
prospecting permit only to the extent necessary for testing and analysis
or for the demonstration of the existence of a suitable deposit.
(c) Environmental analysis. Prospecting permits will be issued only
after submission by applicant and approval by the authorized officer of
a detailed operating plan. The authorized officer may require a bond in
accordance with Sec. 228.51. The authorized officer must ensure
compliance with the National Environmental Policy Act (42 U.S.C. 4321 et
seq.).
(d) Acreage and permit limitations. A prospecting permit may not
cover more than 640 acres. No individual or group may have an interest
at any one time in more than three prospecting permits on Forest Service
lands administered by one Forest Supervisor.
(e) Duration and extension of permits. Prospecting permits may be
issued for a period not to exceed 24 months, but they may be extended
once for up to an additional 24 months if necessary to complete
prospecting. Any application for extension must be submitted no later
than 30 days before the expiration of the permit. The application for
extension must provide evidence of diligence and state the reasons why
additional time is considered necessary to complete prospecting work.
(f) Refusal to extend permits. The authorized officer may reject
applications for extension of prospecting permits for the following
reasons:
(1) Failure to perform. Failure of the permittee to perform
prospecting or exploration work without adequate justification may
result in the denial of an extension; or
(2) Failure to apply. If an application for extension is not
submitted within the specified period, the permit may expire without
notice to the permittee.
(3) Public interest. If the authorized officer determines that an
extension

[[Page 169]]

may not be in the public interest, the application may be rejected.

Sec. 228.61 Preference right negotiated sales.

(a) Qualification for sale. When applying for a preference right
negotiated sale, the permittee must demonstrate to the satisfaction of
the authorized officer that a suitable deposit of mineral material has
been discovered within the area covered by the prospecting permit.
Information concerning trade secrets and financial matters submitted by
the permittee and identified as confidential will not be available for
public examination except as otherwise agreed upon by the permittee.
(b) Application for sale. The application must be submitted to the
District Ranger's office on or before the expiration date of the
prospecting permit or its extension. The authorized officer may grant 30
additional days for submitting the application if requested in writing
by the permittee before expiration of the prospecting permit or its
extension.
(c) Terms and conditions of contract. The terms and conditions will
be evaluated on an individual case basis. Only those mineral materials
specified in the contract may be removed by the purchaser. Before a
preference right negotiated contract is awarded, the authorized officer
must ensure that an environmental analysis is conducted. All contracts
are subject to the conditions under Secs. 228.47 through 228.56.
(d) Acreage limitations. The authorized officer will determine the
amount of acreage in the preference right negotiated sale based on a
presentation of the permittee's needs. The maximum acreage allowable to
any individual or group must not exceed 320 acres on National Forest
lands administered by one Forest Supervisor. The allowable acreage may
be in one or more units which are not necessarily contiguous.
(e) Volume limitations. Preference right negotiated sales are exempt
from volume limitations.
(f) Contract time allowable. A contract or a renewal must not exceed
5 years; however, the purchaser may have renewal options at the end of
each contract or renewal period. The authorized officer may renew a
contract if it is determined that the renewal is not detrimental to the
public interest and that the purchaser has demonstrated diligence in
conducting operations. The authorized officer may cancel the contract,
or the purchaser may forfeit the contract, if no substantial commercial
production occurs during any continuous 2-year period after the award of
the contract or if the contract terms and conditions are breached.
However, if a delay is caused by conditions beyond the purchaser's
control, the authorized officer may grant an extension equal to the lost
time.
(g) Contract renewal reappraisal. At the time of contract renewal,
the authorized officer will reappraise the mineral material deposit in
accordance with Sec. 228.49.

Sec. 228.62 Free use.

(a) Application. An application for a free-use permit must be made
with the appropriate District Ranger's office.
(b) Term. Permits may be issued for periods not to exceed 1 year and
will terminate on the expiration date unless extended by the authorized
officer as in Sec. 228.53(b). However, the authorized officer may issue
permits to any local, State, Federal, or Territorial agency, unit or
subdivision, including municipalities and county road districts, for
periods up to 10 years.
(c) Removal by agent. A free-use permittee may extract the mineral
materials through a designated agent provided that the conditions of the
permit are not violated. No part of the material may be used as payment
for the services of an agent in obtaining or processing the material. A
permit may be issued in the name of a designated agent for those
entities listed in Sec. 228.62(d)(1), at the discretion of the
authorized officer, provided there is binding agreement in which the
entity retains responsibility for ensuring compliance with the
conditions of the permit.
(d) Conditions. Free-use permits may be issued for mineral materials
to settlers, miners, residents, and prospectors for uses other than
commercial purposes, resale, or barter (16 U.S.C. 477). Free-use permits
may be issued to local, State, Federal, or Territorial

[[Page 170]]

agencies, units, or subdivisions, including municipalities, or any
association or corporation not organized for profit, for other than
commercial or industrial purposes or resale (30 U.S.C. 601). Free-use
permits may not be issued when, in the judgment of the authorized
officer, the applicant owns or controls an adequate supply of mineral
material in the area of demand. The free-use permit, issued on a Forest
Service-approved form, must include the basis for the free-use as well
as the provisions governing the selection, removal, and use of the
mineral materials. No mineral material may be removed until the permit
is issued. The permittee must notify the authorized officer upon
completion of mineral material removal. The permittee must complete the
reclamation prescibed in the operating plan (Sec. 228.56).
(1) A free-use permit may be issued to any local, State, Federal, or
Territorial agency, unit, or subdivision, including municipalities and
county road districts, without limitation on the number of permits or on
the value of the mineral materials to be extracted or removed.
(2) A free-use permit issued to a nonprofit association,
corporation, or individual may not provide for the removal of mineral
materials having a volume exceeding 5,000 cubic yards (or weight
equivalent) during any period of 12 consecutive months.
(e) Petrified wood. A free-use permit may be issued to amateur
collectors and scientists to take limited quantities of petrified wood
for personal use. The material taken may not be bartered or sold. Free-
use areas may be designated within which a permit may not be required.
Removal of material from such areas must be in accord with rules issued
by the authorized officer and posted on the area. Such rules must also
be posted in the District Ranger's and Forest Supervisor's offices and
be available upon request. The rules may vary by area depending on the
quantity, quality, and accessibility of the material and the demand for
it.

Sec. 228.63 Removal under terms of a timber sale or other Forest
Service contract.

In carrying out programs such as timber sales that involve
construction and maintenance of various physical improvements, the
Forest Service may specify that mineral materials be mined,
manufactured, and/or processed for incorporation into the improvement.
Where the mineral material is located on National Forest lands and is
designated in the contract calling for its use, no permit is required as
long as an operating plan as described in Sec. 228.56 is required by the
contract provisions. Title to any excavated material in excess of that
needed to fulfill contract requirements revests in the United States
without reimbursement to the contract holder or to agents or
representatives of the contract holder. Such excess material may be
disposed of under Secs. 228.58, 228.59, or 228.62.

Sec. 228.64 Community sites and common-use areas.

(a) Designation. Nonexclusive disposals may be made from the same
deposit or areas designated by the authorized officer; the designation
of such an area and any reclamation requirements must be based on an
environmental analysis.
(b) Pit plans. The Forest Service must prepare operating plans
(Sec. 228.56) for the efficient removal of the material and for
appropriate reclamation of community sites and common-use areas.
(c) Reclamation. The Forest Service is responsible for reclamation
of community sites and common-use areas.

Sec. 228.65 Payment for sales.

(a) Conditions. Mineral materials may not be removed from the sale
area until all conditions of payment in the contract have been met.
(b) Advance payment. (1) For negotiated and competitive sales the
full amount may be paid before removal is begun under the contract or by
installment at the discretion of the authorized officer. Installment
payments must be based on the estimated removal rate specified in the
operating plan and must be, as a minimum, the

[[Page 171]]

value of 1 month's removal. The first installment must be paid before
removal operations are begun; remaining installments must be paid in
advance of removal of the remaining materials as billed by the
authorized officer. The total amount of the purchase price must be paid
at least 60 days before the expiration date of the contract.
(2) All advance payment contracts must provide for reappraisal of
the mineral material at the time of contract renewal or extension.
(3) Minimum annual production must be sufficient to return a payment
to the United States equal to the first installment. In lieu of minimum
production, there must be an annual payment in the amount of the first
installment which will not be credited to future years' production.
Payments for or in lieu of minimum annual production must be received by
the authorized officer on or before the anniversary of the effective
date of the contract.
(4) If the purchaser fails to make payments when due, the contract
will be considered breached; the authorized officer will terminate the
contract, and all previous payments will be forfeited without prejudice
to any other rights and remedies of the United States. Forfeiture will
not result when the purchaser is unable to meet the minimum annual
production (volume or value) for reasons beyond the purchaser's control.
(5) In order to determine payment amount, the purchaser must make a
report of operations. The report must include the amount of mineral
material removed, which must be verified by the authorized officer.
(c) Deferred payments. The authorized officer may approve deferred
payments for sales.
(1) The purchaser may make payments monthly or quarterly which must
be based on the in-place value (volume or weight equivalent) of material
removed during the contract period. The units of measurement must
correspond to the units used in the appraisal. The purchaser must make
all payments before contract renewal.
(2) The purchaser must deliver a bond which conforms to the
provisions of Sec. 228.51(a)(2) to the authorized officer before
operations are begun under the contract.

Sec. 228.66 Refunds.

Upon termination of any contract, payments in excess of $10 may be
refunded, less the costs incurred by the United States, under any of the
following conditions:
(a) Payment in excess of value. If the total payment exceeds the
value of the mineral material removed, unless it is the minimum annual
payment in lieu of production;
(b) Insufficiency of material. If insufficient mineral material
existed in the sale area to provide the quantity of material estimated
to have been available;
(c) Termination. (1) If the contract is terminated by the authorized
officer for reasons which are beyond the purchaser's control; or
(2) If the contract is terminated by mutual agreement. This refund
provision is not a warranty that a specific quantity of material exists
in the sale area.

Sec. 228.67 Information collection requirements.

(a) The following sections of this subpart contain information
collection requirements as defined in the Paperwork Reduction Act of
1980 (5 CFR part 1320): Sec. 228.45, Qualifications of applicants;
Sec. 228.51, Bonding; Sec. 228.52(b)(1), Requirements of assignee;
Sec. 228.53(b), Extension of time; Sec. 228.56, Operating plans;
Sec. 228.57(c), Conduct of sales; Sec. 228.60, Prospecting permits;
Sec. 228.61, Preference right negotiated sales; and Sec. 228.62, Free
use. These requirements have been approved by the Office of Management
and Budget and assigned clearance number 0596-0081.
(b) The public reporting burden for this collection of information
is estimated to vary from a few minutes to many hours per individual
response, with an average of 2 hours per individual response, including
time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing
the collection of information. Send comments regarding the burden
estimate or any other aspect of this collection of information,

[[Page 172]]

including suggestions for reducing this burden, to Chief (2800), Forest
Service, USDA, P.O. Box 96090, Washington, DC 20090-6090 and to the
Office of Information and Regulatory Affairs, Office of Management and
Budget, Washington, DC 20503.
[55 FR 51706, Dec. 17, 1990]