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application, and otherwise meet the requirements of para-
graph (1).
(c) PAYMENT PLAN.—(1) Any owner grossing less
than $500,000 annually shall qualify for a payment plan.
Upon completion of the patent process, the owner of the
mining claim may purchase the surface estate under the
following conditions:
(A) Payment to be amortized over 5 years with
5 equal annual payments, including principal and in-
terest.
(B) Interest shall be calculated per annum at a
rate of 2 percent over the ‘‘Treasury Current Value
of Funds Rate’’ on the date of execution of the pay-
ment plan agreement.
(2) The purchaser shall be notified by certified mail
after 60 days of delinquent payments and have 90 days
from receipt of notification to correct the delinquency. Re-
possession shall be by and under the laws of repossession,
foreclosure, and replevin of the State wherein the land is
situated.
(d) REPEAL OF PATENTING MORATORIUM; PROCESS-
ING OF PATENT APPLICATIONS.—Sections ll and ll
of Public Law ll are hereby repealed. The Secretary
of the Interior shall diligently process all patent applica-
tions under the general mining laws pending on the date
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of enactment and shall make determinations for all such
applications regarding patent issuance within 2 years.
SEC. 9503. ROYALTY UNDER THE GENERAL MINING LAW.
(a) IN GENERAL.—The production and sale of
locatable minerals (including associated minerals) from
any unpatented mining claim (other than those from Fed-
eral lands to which subsection 9502(b) applies) or any
mining claim patented under section 9502(a) shall be sub-
ject to a royalty of 3.5 percent on the net proceeds from
such production mined and sold from such claim.
(b) ROYALTY EXCLUSION.—(1) The royalty payable
under this section shall be waived for any person or cor-
poration with annual net proceeds from mineral produc-
tion subject to subsection (a) of less than $50,000.
(2) Where mining operations subject to this section
are conducted in 2 or more places by 1 person or corpora-
tion, the operations shall be considered a single operation
the aggregate net proceeds from which shall be subject
to the $50,000 limitation set forth in this subsection.
(3) No royalty shall be payable under this section
with respect to minerals processed at a facility by the same
person or entity which extracted the minerals if an urban
development action grant has been made under section
119 of the Housing and Community Development Act of
1974 with respect to any portion of such facility.
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(4) The obligation to pay royalties under this section
shall accrue only upon the sale of locatable minerals or
mineral products produced from a mining claim subject
to such royalty, and not upon the stockpiling of the same
for future processing.
(c) DEFINITIONS.—For the purposes of this subtitle:
(1) The term ‘‘net proceeds’’ means gross yield,
less the sum of the following deductions for costs in-
curred prior to sale or value determination, and none
other:
(A) The actual cost of extracting the
locatable mineral.
(B) The actual cost of transporting the
locatable mineral from the claim to the place or
places of reduction, beneficiation, refining, and
sale.
(C) The actual cost of crushing, process-
ing, reduction, beneficiation, refining, and sale
of the locatable mineral.
(D) The actual cost of marketing and de-
livering the locatable mineral and the conver-
sion of the locatable mineral into money.
(E) The actual cost of maintenance and re-
pairs of—
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(i) all machinery, equipment, appara-
tus, and facilities used in the mine;
(ii) all crushing, milling, leaching, re-
fining, smelting, and reduction works,
plants, and facilities; and
(iii) all facilities and equipment for
transportation.
(F) The actual cost for support personnel
and support services at the mine site, including
without limitation, accounting, assaying, draft-
ing and mapping, computer services, surveying,
housing, camp, and office expenses, safety, and
security.
(G) The actual cost of engineering, sam-
pling, and assaying pertaining to development
and production.
(H) The actual cost of permitting, rec-
lamation, environmental compliance and mon-
itoring.
(I) The actual cost of fire and other insur-
ance on the machinery, equipment, apparatus,
works, plants, and facilities mentioned in sub-
paragraph (E).
(J) Depreciation of the original capitalized
cost of the machinery, equipment, apparatus,
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works, plants, and facilities listed in subpara-
graph (E). The annual depreciation charge shall
consist of amortization of the original cost in
the manner consistent with the Internal Reve-
nue Code of 1986, as amended from time to
time. The probable life of the property rep-
resented by the original cost must be considered
in computing the depreciation charge.
(K) All money expended for premiums for
industrial insurance, and the owner paid cost of
hospital and medical attention and accident
benefits and group insurance for all employees
engaged in the production or processing of
locatable minerals.
(L) All money paid as contributions or
payments under State unemployment com-
pensation law, all money paid as contributions
under the Federal Social Security Act, and all
money paid to State government in real prop-
erty taxes and severance or other taxes meas-
ured or levied on production, or Federal excise
tax payments and payments as fees or charges
for use of the Federal lands from which the
locatable minerals are produced.
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(M) The actual cost of the developmental
work in or about the mine or upon a group of
mines when operated as a unit.
(2) The term ‘‘gross yield’’ shall having the fol-
lowing meaning:
(A) In the case of sales of gold and silver
ore, concentrates or bullion, or the sales of
other locatable minerals in the form of ore or
concentrates, the term ‘‘gross yield’’ means the
actual proceeds of sale of such ore, concentrates
or bullion.
(B) In the case of sales of beneficiated
products from locatable minerals other than
those subject to subparagraph (A) (including
cathode, anode or copper rod or wire, or other
products fabricated from the locatable min-
erals), the term ‘‘gross yield’’ means the gross
income from mining derived from the first com-
mercially marketable product determined in the
same manner as under section 613 of the Inter-
nal Revenue Code of 1986.
(C) If ore, concentrates, beneficiated or
fabricated products, or locatable minerals are
used or consumed and are not sold in an arms
length transaction, the term ‘‘gross yield’’