withhold the payment of further rentals or royalties (except as to the portion due the Indian lessor while under restriction), until all of said parties shall agree upon and designate in writing and in a recordable instrument a trustee to receive all payments due hereunder on behalf of said parties and their respective successors in title. Payments to said trustee shall constitute lawful payments hereunder, and the sole risk of an improper or unlawful distribution of said funds by said trustee shall rest upon the parties naming said trustee and their respective successors in title.

These, or similar provisions, will be contained in all leases.

§ 172.30 Removal of restrictions upon part of acreage.

Should the removal of restrictions affect only part of the acreage covered by an oil and gas lease containing provisions to the effect that the royalties accruing under the lease, where the fee is divided into separate parcels, shall be paid to each owner in the proportion which his acreage bears to the entire acreage covered by the lease, the lessee or assignee of such unrestricted portion will be required to make the reports required by the regulations in this part and the operating regulations with respect to the beginning of drilling operations, completion of wells, and production, the same as if the restrictions had not been removed. In the event the unrestricted portion of the leased premises is producing, the owners of the lease thereon will be required to pay the portion of the royalties due the Indian lessor at the time and in the manner specified by the regulations in this part.

§ 172.31

ments may be leased by Indians to whom mineral rights have been so assigned, subject to the terms of the tribal constitution and subject to the approval of the Secretary of the Interior for such periods of time as are authorized by existing law. In the leasing of such lands preference will be given to Indian cooperative associations and to individual Indians.

(Secs. 16, 17, 48 Stat. 987, 988; 25 U. S. C. 476, 477)

PART 173-LEASING OF LANDS IN CROW INDIAN RESERVATION, MONT., FOR MINING

Fees.

173.19

173.20

The provisions of § 171.25 of this chapter, or as hereafter amended, are ap

173.21

173.22

plicable to this part.

173.23

173.25

The provisions of § 171.30 of this chapter, or as hereafter amended, are appli

173.26

173.27

Wasteful operations not permitted. Permission to start operations.

Penalties.

§ 172.33

Individual tribal assignments

excluded.

The reference in this part to "allottees" and "allotments" does not include assignments of tribal lands made pursuant to tribal constitutions for the use of individual Indians and assignees of such lands; but such tribal assign

AUTHORITY: The provisions of this Part 173 issued under sec. 6, 41 Stat. 753, sec. 6, 44 Stat. 659, unless otherwise noted.

SOURCE: The provisions of this Part 173 appear at 22 F.R. 10596, Dec. 24, 1957, unless otherwise noted.

CROSS REFERENCE: For regulations governing mining leases on tribal lands, Spokane Reservation, see Part 171 of this chapter.

(a) The term "superintendent" in this part refers to the superintendent or other officer of the Bureau of Indian Affairs or of the Government who may have jurisdiction over the Crow Reservation.

(b) The term "supervisor" in this part refers to a representative of the Secretary of the Interior, under direction of the Director of the United States Geological Survey, authorized and empowered to supervise and direct operations under oil and gas or other mining leases, to furnish scientific and technical information and advice, to ascertain and record the amount and value of production, and to determine and record rentals and royalties due and paid.

CROSS REFERENCE: For rules and regulations of the Geological Survey, see 30 CFR Chapter II.

§ 173.2 Employee restrictions.

No lease, assignment thereof, or interest therein will be approved to any employee or employees of the United States Government whether connected with the Bureau or otherwise, and no employee of the Interior Department shall be permitted to acquire any interest in such leases by ownership of stock in corporations having leases or in any other

manner.

(R. S. 2078; 25 U. S. C. 68)

§ 173.3 Requests for sales.

No oil and gas lease on the Crow Reservation will be offered until the Crow tribal council shall have passed a resolution requesting the Secretary of the Interior to lease the land for mining purposes. Should any person, firm, or corporation desire to have any particular tract of land offered for lease, written request to that effect should be submitted to the superintendent in order that such tract may, if deemed advisable, upon the request of the Crow tribal council, be included in the next advertisement of leases.

§ 173.4 Lease sales.

(a) At such times and in such manner as he may deem appropriate, the superintendent shall publish notices at least thirty days prior to the sale, unless a shorter period is authorized by the Commissioner of Indian Affairs, that mineral leases on specific tracts, each of which shall be in a reasonably compact body, will be offered to the highest responsible bidder for a bonus consideration, in addi

tion to stipulated rentals and royalties. Each bid must be accompanied by a cashier's check, certified check, or postal money order, payable to the payee designated in the invitation to bid, in an amount not less than 25 percent of the bonus bid. Within 30 days after notification of being the successful bidder, said bidder must remit the balance of the bonus, the first year's rental, and his share of the advertising costs, and shall file with the superintendent the lease in completed form. The superintendent may, for good and sufficient reasons, extend the time for the completion and submission of the lease form, but no extension shall be granted for remitting the balance of monies due. If the successful bidder fails to pay the full consideration within said period, or fails to file the completed lease within said period or extension thereof, or if the lease is disapproved through no fault of the lessor or the Department of the Interior, 25 percent of the bonus bid will be forfeited for the use and benefit of the Indian lessor.

(b) All notices or advertisements of sales of mineral leases shall reserve to the Secretary of the Interior the right to reject all bids when in his judgment the interests of the Indians will be best served by so doing, and that if no satisfactory bid is received, or if the accepted bidder fails to complete the lease, or if the Secretary of the Interior shall determine that it is unwise in the interests of the Indians to accept the highest bid, the Secretary may readvertise such lease for sale, or if deemed advisable, with the consent of the tribal council or other governing tribal authorities, a lease may be made by private negotiations. The successful bidder or bidders will be required to pay his or their share of the advertising costs. Amounts received from unsuccessful bidders will be returned; but when no bid is accepted on a tract, the costs of advertising will be assessed against the applicant who requested that said tract be advertised.

§ 173.5 Requirements of corporations.

If the applicant for a lease is a corporation, it shall file evidence of authority of its officers to execute papers; and with its first application it shall also file a certified copy of its articles of incorporation, and, if foreign to the State in which the lands are located, evidence

showing compliance with the corporation laws thereof.

The superintendent may at his discretion require a corporation applicant or lessee to file:

(a) Lists of officers, principal stockholders, and directors, with post-office addresses and number of shares held by each.

(b) A sworn statement of the proper officer showing:

(1) The total number of shares of the capital stock actually issued and the amount of cash paid into the treasury on each share sold; or, if paid in property, the kind, quantity, and value of the same paid per share.

(2) Of the stock sold, how much remains unpaid and subject to assessment. (3) The amount of cash the company has in its treasury and elsewhere.

(4) The property, exclusive of cash, owned by the company and its value.

(5) The total indebtedness of the company and the nature of its obligations.

(6) Whether the applicant or any person controlling, controlled by or under common control with the applicant has filed any registration statement, application for registration, prospectus or offering sheet with the Securities and Exchange Commission pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934 or said Commission's rules and regulations under said acts; if so, under what provision of said acts or rules and regulations; and what disposition of any such statement, application, prospectus or offering sheet has been made.

(c) Statements of changes in officers and stockholders.

(d) Affidavits of individual stockholders, setting forth in what corporations or with what persons, firms, or associations such individual stockholders are interested in mining leases on restricted lands within the State, and whether they hold such interests for themselves or in trust.

CROSS REFERENCE: For rules and regulations of the Securities and Exchange Commission, see 17 CFR Chapter II.

$173.6 Requirements of unincorporated

applicants.

Unincorporated applicants shall file such information relative to financial standing and ability to proceed with the development of a lease as the Department of the Interior, through the super

Leases shall be made for a period not longer than ten years, but lessees may have the right of renewal thereof for a further period of 10 years upon such terms and conditions as the Secretary of the Interior may prescribe and agreed to by the tribal council. Applications for renewals of leases shall be made not later than 60 days prior to the date of expiration of the original lease.

§ 173.10 Lease acreage.

The provisions of § 171.9 of this subchapter, or as hereafter amended, are applicable to leases under this part.

§ 173.11 Wells.

The lessee shall agree (a) to drill and produce all wells necessary to offset or protect the leased land from drainage by wells on adjoining lands not the property of the lessor, or in lieu thereof, compensate the lessor in full each month for the estimated loss of royalty through drainage: Provided, That during the period of supervision by the Secretary of the Interior, the necessity for offset wells shall be determined by the oil and gas supervisor and payment in lieu of drilling and producing shall be with the consent of, and in an amount determined by the Secretary of the Interior; (b) at the election of the lessee to drill and produce other wells: Provided, That the right to drill and produce such other wells shall be subject to any system of well spacing or production allotments authorized and approved under applicable law or regulations, approved by the Secretary of the Interior and affecting the field or area in which the leased lands are situated; and (c) if

the lessee elects not to drill and produce such other wells for any period the Secretary of the Interior may, within 10 days after due notice in writing, either require the drilling and production of such wells to the number necessary, in his opinion, to insure reasonable diligence in the development and operations of the property, or may in lieu of such additional diligent drilling and production require the payment on and after the first anniversary date of this lease of not to exceed $1 per acre per annum, which sum shall be in addition to any rental or royalty hereinafter specified: Provided, That in the event oil or gas is discovered on the leased premises, the lessee shall proceed with all reasonable diligence to develop said premises and extract the oil or gas therefrom and bring same into the market as speedily as possible, unless the extraction and sale thereof be withheld with the consent of the Crow Indian tribal council.

CROSS REFERENCE: For oil and gas operating regulations of the Geological Survey, see 30 CFR Part 221.

§ 173.12 Diligence and prevention of

waste.

The lessee shall exercise reasonable diligence in drilling and operating wells for oil and gas on the lands covered hereby, while such products can be secured in paying quantities; carry on all operations hereunder in a good and workmanlike manner in accordance with approved methods and practice, having due regard for the prevention of waste of oil or gas developed on the land, or the entrance of water through wells drilled by the lessee to the productive sands or oil or gas-bearing strata to the destruction or injury of the oil or gas deposits, the preservation and conservation of the property for future productive operations, and to the health and safety of workmen and employees; plug securely all wells before abandoning the same and to shut off effectually all water from the oil or gas-bearing strata; not drill any well within 200 feet of any house or barn on the premises without the lessor's written consent approved by the superintendent; carry out at his expense all reasonable orders and requirements of the oil and gas supervisor relative to prevention of waste, and preservation of the property and the health and safety of workmen; bury all pipe lines crossing tillable lands below plow depth unless other arrangements therefor are made with the superintendent;

(a) All payments due the lessor shall be made to the superintendent, for the benefit of the lessors, and no credit will be given any lessee for payments made otherwise. Payments of rentals and royalties under oil and gas leases, except the first year's rental which shall be paid to the superintendent as prescribed in § 173.4 shall be transmitted to the superintendent through the oil and gas supervisor. All such payments shall be accompanied by a statement, in triplicate, by the lessee, showing the specific items of royalty or rental that the remittance is intended to cover, and shall be made at such time or times as the lease provides.

(b) In the event of the discovery of minerals in paying quantities, all advance rental and royalty payments will be allowed as credit on stipulated royalties for the year for which the payment is made. In the event the royalty on production for any year is not sufficient to equal the advance rental and royalties for that year, no refund will be made; nor will any part of the moneys so paid be refunded because of any subsequent surrender or cancellation of the lease, nor shall the lessee be relieved, by reason of any subsequent surrender or cancellation of the lease, from the obligation to pay said advance rental and royalty. [22 F.R. 10596, Dec. 24, 1957, as amended at 24 F.R. 6342, Aug. 7, 1959]

§ 173.14 Royalty rates; oil and gas leases.

The lessee shall pay, beginning with the date of approval of oil and gas leases by the Secretary of the Interior, a rental of $1.25 per acre per annum in advance during the continuance thereof, together with a royalty of 122 percent of the value or amount of all oil, gas, and/or natural gasoline, and/or all other hydrocarbon substances produced and saved from the land leased, save and except oil, and/or gas used by the lessee for development and operation purposes on the lease, which oil and/or gas shall be royalty free. A higher rate of royalty may be fixed by the Secretary

of the Interior or his authorized representative, prior to the advertisement of land for oil and gas leases.

§ 173.15 Gas for use of lessor.

If the leased premises produce gas in excess of the lessee's requirements for the development and operation of said premises the lessor may use sufficient gas, free of charge, for any desired school or other building belonging to the tribe, by making his own connections to a regulator installed, connected to the well and maintained by the lessee, and the lessee shall not be required to pay royalty on gas so used. The use of such gas shall be as the lessor's risk at all times. § 173.16 Annual rentals and expenditures for development on mining leases other than oil and gas.

The provisions of § 171.14 of this subchapter, or as hereafter amended, are applicable to leases under this part. [24 F.R. 6342, Aug. 7, 1959]

§ 173.16a Suspension of operations and production on leases for minerals other than oil and gas.

The provisions of § 171.14a of this subchapter are applicable to leases under this part.

[24 F.R. 9511, Nov. 26, 1959]

§ 173.17 Royalty rates for minerals other than oil and gas.

Unless otherwise authorized by the Commissioner of Indian Affairs, the minimum rates for minerals other than oil and gas shall be as follows:

(a) For substances other than gold, silver, copper, lead, zinc, tungsten, coal, asphaltum and allied substances, oil, and gas, the lessee shall pay quarterly or as otherwise provided in the lease, a royalty of not less than 10 percent of the value, at the nearest shipping point, of all ores, metals, or minerals marketed.

(b) For gold and silver the lessee shall pay quarterly or as otherwise provided in the lease, a royalty of not less than 10 percent to be computed on the value of bullion as shown by mint returns after deducting forwarding charges to the point of sale; and for copper, lead, zinc, and tungsten, a royalty of not less than 10 percent to be computed on the value of ores and concentrates as shown by reduction returns after deducting freight charges to the point of sale. Duplicate returns shall be filed by the lessee with

the Superintendent within 10 days after the ending of the quarter or other period specified in the lease within which such returns are made: Provided, however, That the lessee shall pay a royalty of not less than 10 percent of the value of the ore or concentrates sold at the mine unless otherwise provided in the lease.

(c) For coal the lessee shall pay quarterly or as otherwise provided in the lease, a royalty of not less than 10 cents per ton of 2,000 pounds of mine run, or coal as taken from the mine, including what is commonly called "slack."

(d) For asphaltum and allied substances the lessee shall pay quarterly or as otherwise provided in the lease, a royalty of not less than 10 cents per ton of 2,000 pounds on crude material or not less than 60 cents per ton on refined substances.

§ 173.18

Books of sales and receipts open to inspection.

The lessee shall keep books of account showing the amount of ore shipped or oil or other mineral substance sold or treated, and showing also the amount of money received from the sale of ores, oil, etc. The books of the lessee shall be open to inspection, examination, and verification by any officer of the Interior Department assigned to such duty by the Secretary of the Interior, and it is distinctly understood that the duly authorized agents of the Government shall be permitted freely to make transcripts of all the accounts and other books of lessee.

§ 173.19 Manner of paying royalties.

All royalties or payments due under leases under the regulations in this part shall be made by check or draft drawn on a solvent bank, open for the transaction of business on the day the check or draft is issued, or by other form of suitable exchange, to the order of the superintendent. All such payments except advance rentals for the first year, which, as provided in the regulations in this part, are to be paid to the superintendent at the time the leases are filed, shall be transmitted through the oil and gas supervisor, shall be accompanied by a statement by the lessee, in triplicate, showing the specific terms of rentals or royalty that the remittance is intended to cover and shall be made at such times as the lease provides.