Appendix A 



State Management of Seabed Minerals 



State Mining Laws 



All States bordering the territorial sea have statutes 

 governing exploration and mining on State lands, in- 

 cluding offshore areas under State jurisdiction. The stat- 

 utes range from single-paragraph general authoriza- 

 tions, equally applicable on land or water, to detailed 

 rules specifically aimed at marine exploration and min- 

 ing. Some States provide separate rules for petroleum 

 and hard minerals. These laws are oudined in table A-1 , 

 which only includes laws affecting mining activities. The 

 States also have water quality, wildlife, coastal zone 

 management, administrative procedure, and other laws 

 that might affect seabed resource development. 



There are large differences among the State mining 

 laws, making a typical or model mining law difficult to 

 describe. A review of the coastal States' mining laws 

 does reveal some common characteristics that suggest 

 different ways to achieve each objective. 



Scope: 



Many States do not separate onshore from offshore 

 development, thus providing a single administrative 

 process for all mineral resources. At least four States 

 (California, Oregon, Texas, and Washington) distin- 

 guish oil and gas from hard minerals. 



Exploration: 



Most States have general research programs, carried 

 out by geological survey offices or academic institutions. 

 Some States provide for more detailed state prospect- 

 ing in areas proposed for leasing. Private exploration 

 generally requires a permit. 



Area limits are unspecified in most statutes. Land- 

 oriented statutes tend to require smaller tracts. Alaska 

 limits permits to 2,560 acres but allows a person to hold 

 multiple permits totalling up to 300,000 acres. 



Prospecting permits may be general or for designated 

 tracts. Alaska, California, Texas, and Washington grant 

 exclusive permits whUe Delaware, Florida, and Oregon 

 do not. Permits may also specify the type of mineral be- 

 ing sought. 



California and Washington grant a preference-right 

 lease to prospectors making a discovery. Delaware and 

 Oregon do not. Other States, including Alaska, Maine, 

 New Hampshire, and Texas, allow all or part of the ex- 

 plored area to be converted to a mining lease upon dis- 

 covery of commercial deposits. 



Exploration results must be reported to the State but 

 their confidentiality is protected for the duration of the 

 prospecting permit and any subsequent lease. Massa- 

 chusetts requires survey results to be made public prior 

 to the hearing concerning the granting of a lease. 



The duration of prospecting permits is generally 1 or 

 2 years with renewal terms ranging from 1 year to in- 

 definite. Alaska provides a 10-year prospecting term. 



Annual rents range from $0.25 per acre in Texas and 

 Washington, to $2.00 per acre in California, and $3.00 

 per acre in Alaska. Maine has a sliding scale, increas- 

 ing from $0.25 per acre in the first year to $5.00 per 

 acre in the fifth. 



Mining Lease or Permit: 



Some States grant preference-right leases or allow 

 conversion. Competitive bidding is the general basis for 

 awarding leases with a cash bonus, or royalty, or both 

 being the bid variable. California also allows bidding 

 on "net profit or other single biddable factor." Some 

 States grant leases noncompetitively, conducting an 

 administrative review of individual lease applications. 

 Public hearings are usually required under all of these 

 systems. 



Most States do not specify area limits for mineral 

 leases. Where conversion is allowed, a prospector may 

 only convert as much land as is shown to contain work- 

 able mineral deposits or as much as he can show him- 

 self capable of developing. Where limits are specified, 

 they range from 640 acres (Washington) to 6,000 acres 

 (Mississippi). States limiting the acreage covered by 

 each lease generally do not limit the number of leases 

 that a single person may hold. 



Lease terms range from 5 years (Virginia) to 10 years 

 (Delaware, Georgia, North Carolina, Oregon) to 20 

 years (Alaska, California, Texas, Washington). Renewal 

 is available, usually for as long as minerals are produced 

 in paying quantities. Leases are generally assignable in 

 whole or in part, subject to State approval. 



Most States require a minimum rent, credited toward 

 a royalty based on production. Minimum annual rents 

 range from $0.25 per acre in Delaware to $3.00 per acre 

 in Alaska. Minimum royalties vary from 1/16 of pro- 

 duction in Texas to 3/16 in Mississippi. Louisiana pro- 

 vides different royalties for different minerals, ranging 

 from 1/20 to 1/6 of production. Some States provide for 

 payment in kind. 



The use of leasing income varies greatly. Among 

 other purposes, it may be allocated to the general fund. 



281 



72-672 - 87 ~ 10 



