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February 13, 1964

has held for many years that mineral reservations to the United States under the act of July 17, 1914, apply not only to lands known to be valuable for a leasable mineral, but also to lands reported by the Geological Survey to be prospectively valuable for one of the named minerals. Solicitor's opinion, 65 I.D. 39, 41-42 (1958), and cases cited therein; State of New Mexico, 52 L.D. 741 (1929). None of the matters asserted on appeal provides a basis for modifying the rule.

It has already been pointed out that the acts of August 27, 1958, and September 14, 1960, allowing selection of mineral land as indemnity only if the base is mineral, require that both base and selected lands be classified as to their mineral character before an indemnity selection can be allowed. Arizona objects to the determination under these provisions that selected indemnity is mineral when it is classified by the Geological Survey merely as "prospectively" valuable for oil and gas. However, the same standard is applied in determining whether base lands are mineral in character. That is, they are classified as mineral upon a finding that they are prospectively valuable for oil and gas. State of Arizona, supra.

The appeals to the Director in these cases included reports by a consulting geologist for the State of Arizona which concluded that the classification of the selected and base lands as prospectively valuable for oil and gas was not reasonable. After consideration of these reports, the Geological Survey concluded that they presented no new geologic information or findings warranting a change in the classification of the lands as prospectively valuable for oil and gas.

Arizona objects primarily to the inexactness of the term "prospectively valuable" as used by the Geological Survey, to the breadth of the criteria used in determining what lands are within that category, and asserts, additionally, that the classification is almost impossible to prove or disprove even when the possibility of oil and gas in the land is scientifically remote. The appeal asserts further, in effect, that the records show situations where classification by the Geological Survey of selected and base lands are inconsistent, although the lands are identical in known geology.

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deposits on account of which the lands so patented were withdrawn or classified or reported as valuable, together with the right to prospect for, mine, and remove the same, such deposits to be subject to disposal by the United States only as shall be expressly directed by law. Any person qualified to acquire the reserved deposits may enter upon said lands with a view of prospecting for the same * *Provided, That nothing herein contained shall be held to deny or abridge the right to present and have prompt consideration of applications to locate, select, enter, or purchase, under the land laws of the United States, lands which have been withdrawn or classified as phosphate, nitrate, potash, oil, gas, or asphaltic mineral lands, with a view of disproving such classification and securing patent without reservation

Without specific instances of inconsistent classification, and the State has identified none, it is not possible to answer the last assertion except to say that, as a matter of course, the same criteria used in determining whether one section of land is prospectively valuable for oil and gas are presumably used in determining whether any other section is so valuable.

Arizona's remaining objections are directed against the classification policy of the Geological Survey. Arizona's opposition to the Survey's classification policy seems to be based on the incorrect assumption that the Survey's practice of classifying lands as prospectively valuable for oil and gas, if there is any possibiilty that the lands contain oil and gas, will almost preclude the patenting of indemnity lands to the State except with a reservation of minerals in the United States.

Arizona's assumption is mistaken because a reservation of minerals is required only if selected mineral land is indemnity for a numbered section (base) which is not mineral. Since the use by the Survey of a broad definition will also presumably increase the proportion of base which is classified as mineral, there should be no undue limitation in the amount of mineral lands which may be selected without a requirement for a mineral waiver.

A memorandum of November 16, 1960, from the Director of the Geological Survey to the Director of the Bureau of Land Management relating to these appeals, indicates that approximately two-thirds of Arizona may be regarded as prospectively valuable for oil and gas. It was pointed out in this memorandum that although Arizona might, when filing indemnity selections, have a problem anticipating what the Survey's classification of base and selected lands will be, the State may make adjustments after the Survey reports are made and attempt to match mineral base with mineral selections. If the selected and offered lands in a fairly large number of indemnity applications are considered at the same time, the State should be able to approximately balance mineral base lands with mineral selected lands so that reservations will not be required as to the selected lands. The memorandum of November 16, 1960, noted that in 78 recent Arizona indemnity selection applications, covering 37,000 acres of selected and base lands, 2,000 acres of the selected lands were classified as prospectively valuable for oil and gas, whereas 6,000 acres of the base lands were classified as prospectively valuable for oil and gas. Since the base included more mineral lands than did the selected lands, the State could substitute nonmineral base for all nonmineral selected lands and use the

February 13, 1964

excess mineral base only as base for selections classified as mineral. The practice of considering at one time a substantial number of indemnity selections after the selected and base lands have been classified by Survey should make it possible to match mineral base with mineral selections in a large proportion of applications.

For the reasons discussed herein, Arizona's objections to the classification of indemnity selections as mineral on the basis of a determination by the Geological Survey that the land is prospectively valuable for oil and gas do not appear to be substantial. Arizona may amend any of its selection applications and avoid the imposition of a mineral reservation by substituting mineral for nonmineral base to correspond to selected lands which are classified as mineral. For this reason, there appears at this time to be no reason to engage in an evaluation of the criteria employed by the Geological Survey to determine when lands are prospectively valuable for oil or gas.

As was said earlier, the foregoing discussion has been of the issues raised at the time of the Director's decisions and the filing of the appeal, and, except in the instances noted, it has been concluded that the Director properly required the State to file a mineral waiver at the time he issued his decisions. The requirement was imposed under the departmental regulation then in effect, 43 CFR, 1954 rev., 102.22. This regulation provided that where the Geological Survey reported that land embraced in a nonmineral entry or claim which had not been perfected was, in effect, prospectively valuable for oil or gas, the entryman or claimant would be allowed 30 days from notice (1) to furnish consent to a mineral reservation (mineral waiver) under the 1914 act, (2) to apply for reclassification of the land as nonmineral and for a hearing if reclassification were denied, or (3) to appeal. The regulation further provided that if he did not take one of the actions indicated, his entry or claim would be canceled.

This regulation was amended on December 12, 1961 (26 F.R. 12128), to eliminate alternative (1), the requirement for a mineral waiver. The regulation now provides that an entryman or claimant will be notified of the Geological Survey's determination and allowed a reasonable time to take steps (2) or (3) and that if he does not "his entry or claim and any patent issued pursuant thereto will be impressed with a reservation of oil and gas to the United States."

The amended regulation is deemed applicable to the State's selections in this case and the case will be processed as though the State had appealed from a notification under the amended regulation and the propriety of the notification had been affirmed. The State will

not be required to furnish mineral waivers in those cases in which it has selected lands determined to be prospectively valuable for oil and gas but has not offered mineral lands as base. However, if the State desires to maintain such selections and they are processed to approval, the certification or clear listing of the selections will be with a reservation to the United States of the oil and gas in the selected lands. See Milton H. Lichtenwalner et al., supra.

Therefore, pursuant to the authority delegated to the Solicitor by the Secretary of the Interior (sec. 210.2.2A (4) (a), Departmental Manual; 24 F.R. 1348), the decisions of the Director are set aside and the case is remanded for further proceedings consistent herewith.

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One who fails to submit satisfactory evidence of his ownership of contiguous land within 30 days after the date of a public sale loses his preference right to purchase the land.

Public Sales: Preference Rights

Where the owner of land contiguous to an isolated tract of public land offered for sale properly asserts a preference right to purchase the land, and then disposes of the contiguous land after the close of the period allowed for the assertion of preference-right claims and before he receives a cash certificate or patent for the isolated tract, he does not thereby lose his preference right to buy the isolated tract nor does his successor in title succeed to that preference right.

Public Sales: Preference Rights

Where preference-right claimants fail to reimburse the applicant for a public sale for the costs of publication within the 10-day period after they are declared the purchasers or to file statements of citizenship, as provided by the Department's regulations, their bid is properly rejected and the land is properly awarded to the applicant.

Rules of Practice: Appeals: Standing to Appeal

A person who is not a party to a decision by a land office has no standing to appeal to the Director of the Bureau of Land Management from that decision, and such an appeal is properly dismissed.

February 18, 1964

APPEAL FROM THE BUREAU OF LAND MANAGEMENT

Otto and Delena Delmoe and Charles Andreas have appealed to the Secretary of the Interior from a decision dated January 10, 1963, whereby the Division of Appeals, Bureau of Land Management, dismissed the appeal of Andreas from a decision of the Montana land office awarding a tract of land, offered at public sale pursuant to section 2455 of the Revised Statutes, as amended (43 U.S.C., 1958 ed., sec. 1171), to Pauline Graff Redmond and affirmed that decision.

On May 1, 1957, lots 10, 11, 12, 13, and 14, sec. 28, E2NE14 sec. 32, NW4NE1⁄44 and N2NW14 sec. 33, T. 3 N., R. 8 W., M.P.M., Montana, were offered for public sale pursuant to an application filed by Pauline Graff, now Pauline Graff Redmond. By a decision dated May 2, 1957, Mrs. Redmond was declared the high bidder at the sale. Within 30 days, Charles Andreas submitted a preference-right bid on the lands in behalf of Otto and Delena Delmoe and the Butte Ski Club. The preference-right claim was timely supported by certificates of ownership which showed that as of May 28, 1957, Otto and Delena Delmoe and the Butte Ski Club were the respective owners in fee simple of tracts of land contiguous to the offered lands. Final action on the public sale was thereafter suspended until determination could be made of the validity of a number of unpatented mining claims of Agnes Osenbrug, which were thereafter held invalid (United States v. Agnes Osenbrug et al., Contest No. 1721 (Montana) (October 20, 1961)).

On June 11, 1962, Otto and Delena Delmoe and the Butte Ski Club were declared to be preference-right purchasers of the offered lands, subject to their meeting the additional requirements set forth in 43 CFR 250.12 (a) and (b)(1).1 No evidence of compliance with those requirements was filed within the prescribed time, and on August 7, 1962, the decision of June 11, 1962, was reversed, and Mrs. Redmond was declared the purchaser.

In affirming the land office decision of August 7, 1962, the Bureau held that the Delmoes had not shown or attempted to show in what

143 CFR 250.12 provides in part that:

"(a) *** If the applicant for the sale is an unsuccessful bidder, the person awarded the land must reimburse and pay directly to him the amount expended for publication of notice and file evidence thereof in the district land office within 10 days from the date he is declared the purchaser. If the evidence is not furnished, the manager will reject the bid and will accept the bid next in order, subject to the same conditions. *

"(b) (1) Unless he has previously done so, the purchaser must, within 10 days after he has been so declared, file with the manager a statement of his citizenship, or if a partnership, a statement of the citizenship of its members. If the purchaser is an unincorporated association, a statement must be filed showing the citizenship of each member. *

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