riousness of the violation according to the following schedules:

(i) Probability of occurrence. The probability of the occurrence of the event which a violated standard is designed to prevent may account for a maximum of 15 penalty points. (An example of the concept of the phrase "the event which a violated standard is designed to prevent" is as follows: Mishandling of topsoil is a violation of the topsoil standard in § 177.107 of this part; however, delay or failure in the revegetation and resulting environmental harm are the events which the topsoil standard in § 177.107 of this part is designed to prevent.) The Office shall use the following definitions and schedules

Probability of occurrence None or insignificant..... Unlikely

Likely

Occurred..

Points

0-5 5-10 10-15 15

(ii) Extent of potential or actual damage. The extent of the potential or actual damage in terms of area and impact on the public or environment may account for a maximum of 15 penalty points based on the following

(A) If the damage or impact which the violated standard is designed to prevent would remain within the permit area (or in the case of a deep mine, the area of surface structures), the Office shall assign zero to seven points depending on the duration and extent of the damage or impact.

(B) If the damage or impact against which the violated standard is designed to prevent would extend outside the permit area (or in the case of a deep mine, the area of surface structures), the Office shall assign eight to fifteen points depending on the duration and extent of the damage or impact.

(iii) In the case of a violation of a requirement of the Act, the regulations, or a permit to keep records, give notice, or conduct any measuring or monitoring, the Office may, as an alternative to the use of paragraphs (c) (3)(i) and (3)(ii) above assign up to 15 points for seriousness based upon the extent to

which enforcement is obstructed by the violation.

(4) Negligence. (i) The Office shall assign up to 25 points based on the degree of fault of the permittee, either through act or omission, in causing or failing to correct the condition or practice which is a violation. A violation which occurs through no negligence shall not be assigned penalty points for negligence. A violation which is caused by negligence shall be assigned 12 points or less depending on the degree of negligence. A violation which occurs through a greater degree of fault than negligence shall be assigned 13 through 25 penalty points depending on the degree of fault.

(ii) In determining the degree of negligence involved in a violation and the number of penalty points to be assigned, the following definitions apply

(A) No negligence means an inadvertent violation of the Act, regulations or permit conditions which was unavoidable by the exercise of reasonable care.

(B) Negligence means the failure of a permittee to prevent the occurrence of any violation of his permit or any requirement of the Act or the regulations due to indifference, lack of diligence, or lack of reasonable care, or the failure to correct any violation of such permit or the Act or the regulations due to indifference, lack of diligence or lack of reasonable care.

(C) Examples of greater degree of fault than negligence are reckless, knowing or intentional conduct.

(iii) In calculating points to be assigned for negligence, the actions of all persons working on the mine site shall be attributed to the permittee or operator.

(5) Good faith in attempting to achieve compliance. (i) The Office shall subtract or add points based on the degree of good faith of the permittee in attempting to achieve rapid compliance after notification of the violation. The points shall be assigned according to the following schedule

(ii) In determining the permittee's degree of good faith in attempting to achieve rapid compliance, the following definitions apply

(A) Rapid compliance means that the permittee took extraordinary measures to abate the violation in the shortest possible time and that abatement was achieved before the time set for abatement.

(B) Normal compliance means the permittee abated the violation within the time given for abatement.

(C) Lack of good faith means the permittee did not show diligence in attempting to abate the violation and the violation was not timely abated.

(iii) If the consideration of this criteria is impractical because of the length of the abatement period, the assesssment may be made without considering this criteria. Any such assessment may be reconsidered upon the permittee's request after abatement is completed.

(d) Determination of amount of penalty. The Office shall determine the amount of any civil penalty by converting the total number of points assigned under paragraph (c) of this section to a dollar amount according to the following schedule:

bated following expiration of the abatement period in the notice of violation. The daily penalty shall be the amount assessed for the violation or $750.00, whichever is greater. The daily assessment of a penalty shall not be made for any period that the obligation to abate is suspended.

(2) The Office may assess separately each day of any continuing violation. In making this determination, the Office may consider the factors listed in paragraph (b) of this section and any economic benefit to the permittee which resulted from a failure to comply.

(3) The Office shall separately assess a minimum of 2 days for any continuing violation which is assigned more than 70 points under paragraph (c) of this section.

(f) Waiver of use of formula to determine civil penalty. The Director, upon his own initiative or upon written request received within the time set in paragraph (g) of this section, may elect to waive in whole or in part the use of the formula contained in this part in determining the civil penalty for violation of the Act, if he determines that a waiver will further abatement of violations of the Act. A grant or denial of a waiver may be reversed by the Office of Hearings and Appeals, if such grant or denial is determined to be an abuse of discretion.

(g) Procedures for assessment of civil penalties. (1) Within 10 days of service of a notice or order, the permittee may submit information in writing pertaining to the violation involved to the Assessment Office and to the inspector who issued the notice or order. The Office shall consider any information so submitted in determining the facts surrounding the violation and the amount of the penalty.

(2) The Office shall serve the permittee by certified mail, return receipt requested within 30 days of the issuance of the notice or order, with a copy of the proposed assessment and of the worksheets showing the computation.

(h) Procedure for conference. (1) If a written request from the permittee is received within 15 days from receipt of a proposed assessment, the Office shall arrange for a conference to

review the assessment. The permittee may submit additional material for consideration during the conference. The Office may contact the permittee to discuss the assessment prior to the conference if necessary to expedite the review.

(2) The Office shall consider all relevant information on the violation in question presented by the permittee and may recalculate either up or down or vacate the proposed penalty. No information as to which the permittee claims confidentially shall be considered as a basis for reduction of a proposed assessment. When new facts warrant the imposition of a higher penalty, it shall be proposed in the manner provided in paragraph (f) of this section. Every change in a proposed assessment shall be fully documented in the file including a written explanation of the reason the penalty has changed.

(3) Notice of the time and place of the conference shall be posted at the Office of Surface Mining Reclamation and Enforcement field office with jurisdiction over the mine at least 5 days prior to the conference. Any person shall have a right to attend the conference and participate.

(4) If the issues are resolved, the agreement shall be in writing and signed by the party assessed and the representative of the Office. If payment is not received within 30 days the office may:

(i) Enter the agreed upon amount as a final order of the Secretary; or

(ii) Rescind the agreement and reinstate the original proposed assessment.

(5) A reduction of a proposed civil penalty assessment of more than 25 percent and more than $500 agreed to during a conference shall be approved by the Director or his designee before it is final and binding on the Secretary.

(i) Request for hearing. (1) Within 30 days from receipt of the proposed assessment, the permittee may request a hearing before the Office of Hearings and Appeals by filing a petition and tendering full payment of the proposed assessment to be held in escrow.

(2) The timely filing of a request for a conference under paragraph (h) of this section suspends the running of the 30-day period for requesting a hearing. The suspension shall continue until the completion of the conference, which shall be held within 60 days from the date of the request for the conference. The permittee shall have 15 days after completion of the conference or after any disapproval by the Director or his designee under of paragraph (h)(5) this section, whichever occurs later, to request a public hearing.

(3) The Office of Hearings and Appeals conducts the hearings and issues orders or otherwise terminates the petition pursuant to its procedures in 43 CFR Part 4. The Office of Hearings and Appeals may determine whether a violation occurred. When determining the amount of the penalty, the Office of Hearings and Appeals shall use the point system and conversion table contained in this Part, except in cases in which the Office has waived the use of the point system and conversion table pursuant to paragraph (f) of this section.

(j) Availability of records. All records and files created or used in the assessment process under this Part shall be available for public inspection.

(k) Notice to Tribe. Appropriate officials of the local governing Indian Tribe shall be notified of any hearings or conferences conducted pursuant to this section, and shall be invited to attend.

PART 183-LEASING OF OSAGE RESERVATION LANDS FOR OIL AND GAS MINING

Sec.

183.1 Definitions

LEASING PROCEDURE, RENTAL AND ROYALTY

183.2 Sale of leases.

183.3 Surrender of lease.

183.4 Form of payment.

183.5 Leases subject to current regulations. 183.6 Bonds.

183.7 Provisions of forms made a part of the regulations.

183.8 Corporation and corporate information.

183.9 Rental and drilling obligations.

183.10 Term of lease.

183.11 Royalty payments.

183.12 Government reserves right to purchase oil.

183.13 Time of royalty payments and reports.

183.14 Contracts and division orders. 183.15 Unit leases, assignments and related instruments.

OPERATIONS

183.16 Commencement of operations. 183.17 How to acquire permission to begin aloperations on a restricted homestead a lotment.

183.18 Information to be given surface owners prior to commencement of drilling operations.

Use of surface of land.

183.19 183.20 Settlement of damages claimed. 183.21 Procedure for settlement of damages claimed.

183.22 Prohibition of pollution.

183.23 Easements for wells off leased premises.

183.24 Lessee's use of water.

183.25 Gas well drilled by oil lessees and vice versa.

183.26 Determining cost of well. 183.27 Gas for operating purposes and tribal use.

CESSATION OF OPERATIONS

183.28 Shutdown, abandonment and plugging of wells.

183.29 Disposition of casings and other improvements.

REQUIREMENTS OF LESSEES

183.30 Lessees subject to Superintendent's orders; books and records open to inspection.

As used in this Part 183, terms shall have the meanings set forth in this section.

(a) "Secretary" means the Secretary of the Interior or his authorized representative acting under delegated authority.

(b) "Osage Tribal Council" means the duly elected governing body of the Osage Nation or Tribe of Indians of Oklahoma vested with authority to lease or take other actions on oil and gas mining pertaining to the Osage Mineral Estate.

(c) "Superintendent" means the Superintendent of the Osage Agency, Pawhuska, Oklahoma, or his authorized representative acting under delegated authority.

(d) "Oil lessee" means any person, firm, or corporation to whom an oil mining lease is made under the regulations in this part.

(e) "Gas lessee" means any person, firm, or corporation to whom a gas mining lease is made under the regulations in this part.

(f) "Oil and gas lessee" means any person, firm, or corporation to whom

an oil and gas mining lease is made under the regulations in this part.

(g) "Primary term" means the basic period of time for which a lease is issued during which the lease contract may be kept in force by payment of rentals.

(h) "Major purchaser" means any one of the minimum number of purchasers taking 80 percent of the oil in the Kansas-Oklahoma area.

(i) "Casinghead gas" means gas produced from an oil well as a consequence of oil production from the same formation.

(j) “Natural gas" means any fluid, either combustible or noncombustible, recovered at the surface in the gaseous phase and/or hydrocarbons recovered at the surface as liquids which are the result of condensation caused by reduction of pressure and temperature of hydrocarbons originally existing in a reservoir in the gaseous phase.

(k) "Authorized representative" of an oil lessee, gas lessee, or oil and gas lessee means any person, group, or groups of persons, partnership, association, company, corporation, organization or agent employed by or contracted with a lessee or any subcontractor to conduct oil and gas operations or provide facilities to market oil and gas. (1) "Oil well" means any well which produces one (1) barrel or more of crude petroleum oil for each 15,000 standard cubic feet of natural gas. (m) "Gas well" means which:

any well

(i) Produces natural gas not associated with crude petroleum oil at the time of production or

(ii) Produces more than 15,000 standard cubic feet of natural gas to each barrel of crude petroleum oil from the same producing formation.

[39 FR 22254, June 21, 1974, as amended at 41 FR 50648, Nov. 17, 1976; 43 FR 8135, Feb. 28, 1978]

LEASING PROCEDURE, RENTAL AND ROYALTY

§ 183.2 Sale of leases.

(a) Written application, together with any nomination fee, for tracts to be offered for lease shall be filed with the Superintendent.

(b) The Superintendent, with the consent of the Osage Tribal Council, shall publish notices for the sale of oil leases, gas leases, and oil and gas leases to the highest responsible bidder on specific tracts of the unleased Osage Mineral Estate. The Superintendent may require any bidder to submit satisfactory evidence of his good faith and ability to comply with all provisions of the notice of sale. Successful bidders must deposit with the Superintendent on day of sale a check or cash in an amount not less than 25 percent of the cash bonus offered as a guaranty of good faith. Any and all bids shall be subject to the acceptance of the Osage Tribal Council and approval of the Superintendent. Within 20 days after notification of being the successful bidder, and said bidder must submit to the Superintendent the balance of the cash bonus, a $10 filing fee, and the lease in completed form. The Superintendent may extend the time for the completion and submission of the lease form, but no extension shall be granted for remitting the balance of moneys due. If the bidder fails to pay the full cash consideration within said period or fails to file the completed lease within said period or extention thereof, or if the lease is rejected through no fault of the Osage Tribal Council or the Superintendent, 25 percent of the cash bonus bid will be forfeited for the use and benefits of the Osage Tribe. The Superintendent may reject a lease made on an accepted bid, upon evidence satisfactory to him of collusion, fraud, or other irregularity in connection with the notice of sale. The Superintendent may approve oil leases, gas leases, and oil and gas leases made by the Osage Tribal Council in conformity with the notice of sale, regulations in this part, bonds, and other instruments required.

(c) Each oil and/or gas lease and activities and installations associated therewith subject to these regulations shall be assessed and evaluated for its environmental impact prior to its approval by the Superintendent.

(d) Lessee shall accept a lease with the understanding that a mineral not