[Federal Register Volume 70, Number 194 (Friday, October 7, 2005)]
[Rules and Regulations]
[Pages 58854-58880]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-19851]
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Part IV
Department of the Interior
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Bureau of the Interior
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43 CFR Parts 3000, 3100 et al.
Oil and Gas Leasing; Geothermal Resources Leasing; Coal Management;
Management of Solid Minerals Other Than Coal; Mineral Materials
Disposal; and Mining Claims Under the General Mining Laws; Final Rule
Federal Register / Vol. 70, No. 194 / Friday, October 7, 2005 / Rules
and Regulations
[[Page 58854]]
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DEPARTMENT OF THE INTERIOR
Bureau of Land Management
43 CFR Parts 3000, 3100, 3110, 3120, 3130, 3200, 3470, 3500, 3600,
3800, 3830, 3833, 3835, 3836, 3860, and 3870
[WO-610-4111-02-24 1A]
RIN 1004-AC64
Oil and Gas Leasing; Geothermal Resources Leasing; Coal
Management; Management of Solid Minerals Other Than Coal; Mineral
Materials Disposal; and Mining Claims Under the General Mining Laws
AGENCY: Bureau of Land Management, Interior.
ACTION: Final rule.
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SUMMARY: The Bureau of Land Management (BLM) is issuing this final rule
to amend its mineral resources regulations to increase certain fees and
to impose new fees to cover BLM's costs of processing documents
relating to its minerals programs. The new fees include costs of
actions such as environmental studies performed by BLM, lease
applications, name changes, corporate mergers, lease consolidations and
reinstatements, and other processing-related costs. BLM established
some fixed fees and some fees on a case-by-case basis. BLM based these
fee changes on statutory authorities, which authorize us to charge for
our processing costs, and on policy guidance from the Office of
Management and Budget (OMB) and the Department of the Interior (DOI)
requiring BLM to charge these fees. This rule also responds to
recommendations issued in audit reports by the DOI's Office of
Inspector General (OIG). The final rule also reflects changes to the
proposed rule required by the Energy Policy Act of 2005.
DATES: This rule is effective November 7, 2005.
ADDRESSES: You may mail suggestions or inquiries to Bureau of Land
Management, Minerals Group, Room 501 LS 1849 C Street, NW., Washington,
DC 20240-0001.
FOR FURTHER INFORMATION CONTACT: Tim Spisak, Fluid Minerals Group
Manager (202) 452-5061 or Ted Murphy, Solid Minerals Group Manager
(202) 452-0351, for issues related to BLM's minerals programs, or
Cynthia Ellis, Regulatory Affairs Group (202) 452-5012, for regulatory
process issues. Persons who use a telecommunications device for the
deaf may contact these individuals through the Federal Information
Relay Service at 1-800-877-8339, 24 hours a day, 7 days a week.
SUPPLEMENTARY INFORMATION:
I. Background
A. Procedural Background
B. Authority for This Rule
C. Continuation of Rulemaking
II. How Does the Final Rule Differ From the Proposed Rule?
III. Responses to Comments on the December 2000 and July 2005
Proposed Rules
A. General Comments
B. Comments on Oil and Gas Leasing Cost Recovery
C. Comments on Geothermal Leasing Cost Recovery
D. Comments on Coal Leasing Cost Recovery
E. Comments on Cost Recovery for Leasing of Solid Minerals Other
Than Coal
F. Comments on Cost Recovery for Mineral Materials Sales
G. Comments on Cost Recovery for Mining Law Administration
IV. Procedural Matters
I. Background
A. Procedural Background
On December 15, 2000, BLM published a proposed rule to amend our
mineral resource regulations to increase many fees and to impose new
fees to cover our costs of processing certain documents relating to our
mineral programs (65 FR 78440). The fee changes were BLM's response to
recommendations made in a 1988 OIG report (No. 89-25). That report was
part of a 1980s Presidential initiative that called for all Federal
agencies to charge appropriate user fees, consistent with the law, for
agency services. The OIG recommended that BLM collect fees for
processing mineral-related documents whenever possible.
On July 19, 2005, BLM reissued the proposed rule (70 FR 41532), and
added the following fees that were not included in the 2000 proposed
rule:
1. A processing fee for oil and gas applications for permit to
drill (APDs),
2. A processing fee for geothermal permits to drill (GPDs),
3. A processing fee for geothermal exploration permits, and
4. A processing fee for renewing mineral materials competitive
contracts.
The 2005 proposed rule also included a fixed fee for the processing
of oil and gas geophysical exploration permits, instead of the case-by-
case fee that we proposed in 2000.
This final rule adopts many provisions of the July 19, 2005
proposal. We discuss below changes we have made from that proposal. The
rationale for most of this final rule was set forth in the July 2005
preamble and BLM continues to rely on the discussions contained
therein.
B. Authority for This Rule
Federal agencies are authorized to charge processing costs by the
Independent Offices Appropriation Act of 1952 (IOAA), 31 U.S.C. 9701.
BLM also has specific authority to charge fees for processing
applications and other documents relating to public lands under Section
304 of the Federal Land Policy and Management Act of 1976 (FLPMA), 43
U.S.C. 1734. This section was discussed in greater detail in the July
2005 preamble. In FLPMA, public land means all lands or interests in
land owned by the United States and administered by BLM, excluding
outer continental shelf lands and Native American lands (43 U.S.C.
1702(e)). This includes Federal mineral lands with private or state
surface as well as lands where the United States owns both the surface
and mineral rights. A mineral lease or mineral materials disposal
administered by BLM, and a mining claim (for which BLM determines
validity), even in land where another agency administers the surface,
are ``interests in land'' for the purposes of FLPMA.
The IOAA and Section 304 of FLPMA authorize BLM to charge
applicants for the cost of processing documents by issuing regulations,
which BLM is doing in this rule. The IOAA also states that these
charges should pay for the agency services, as much as possible.
Cost recovery policies are explained in OMB Circular No. A-25
(Revised) (Circular A-25), entitled ``User Charges.'' Part 346 of the
Departmental Manual (DM) also provides guidance. The general Federal
policy as stated in Circular A-25 is that a charge will be assessed
against each identifiable recipient for special benefits derived from
Federal activities beyond those received by the public. The Circular
establishes Federal policy regarding fees assessed for government
services and for sales or use of government goods or resources. It
provides information on the scope and types of activities subject to
user charges and the basis upon which agencies set user charges.
Finally, Circular A-25 guides agency implementation of charges and the
disposition of collections.
Section 365 of the Energy Policy Act of 2005 (Pub. L. 109-58)
authorized a pilot project to improve Federal permit coordination, and
directed in subsection (i) that ``the Secretary shall not implement a
rulemaking that would enable an increase in fees to recover additional
costs related to processing drilling-related permit applications and
use authorizations.'' The provisions of the proposed rule related to
drilling-
[[Page 58855]]
related permit applications and use authorizations are those that would
have required cost recovery for oil and gas and geothermal permits to
drill (APDs and GPDs), and geophysical and geothermal exploration
permits. Therefore, we have removed all provisions regarding APDs,
GPDs, and geophysical and geothermal exploration permits that appeared
in the proposed rule from this final rule. The remainder of the 2005
proposed rule was not affected by the Energy Policy Act and may be
finalized.
C. Continuation of Rulemaking
In the preamble to the July 19, 2005, proposed rule, we explained
that in the final rule we might provide that BLM would recover costs of
validity examinations and reports performed in connection with plan of
operations (PoO) applications submitted under parts of the Code of
Federal Regulations other than 43 CFR part 3800, such as those
submitted under 36 CFR part 9, which implements the Mining in the Parks
Act. (See 70 FR 41538.) The National Park Service (NPS) submitted a
comment urging BLM to include in the final rule recovery of such costs
for applications submitted pursuant to NPS regulations. At this time,
BLM has not made a final decision whether to extend the rule to cover
such other costs. Thus, BLM is including in this final rule the
provision as proposed, but is continuing the rulemaking on the issue of
whether it will revise the provision to include recovery of costs of
validity examinations and reports associated with PoOs submitted under
other parts of the CFR. BLM may issue a further final rule to address
this issue. If BLM decides to promulgate a final rule that would
recover such costs, the next final rule would likely contain conforming
amendments to such other parts to notify affected applicants of the
applicability of the cost recovery provisions of this rule.
II. How Does the Final Rule Differ From the Proposed Rule?
As stated earlier, in response to Congress's direction in the
Energy Policy Act, BLM is not implementing cost recovery fees for APDs,
GPDs, and geophysical and geothermal exploration permits.
Other changes we made are:
1. We adjusted the fees proposed in 2000 by using the Implicit
Price Deflator for 4th Quarter 2004 (110.077) (IPD), rounded to the
nearest $5.00. For example, for an oil and gas lease reinstatement, the
cost recovery fee proposed in 2000 was $60. Applying the IPD, the
equivalent cost recovery fee for the 4th Quarter 2004 would be $66.05.
For this final rule, we rounded this figure to $65.
2. We amended the coal lease by application regulations. The
proposed rule did not adequately account for case-by-case fee
situations where the successful bidder is an entity other than the
original applicant. The final coal leasing regulations at 43 CFR 3473.2
provide that the applicant who nominates a tract will pay BLM the
processing costs that we incur up to the publication of the competitive
lease sale notice. That fee amount will be included in the notice
itself, and the successful bidder, if someone other than the original
applicant, will be responsible for paying that amount to BLM. In such
circumstances, BLM will refund the fees the original applicant paid to
BLM. If there is no successful bidder, the applicant will remain
responsible for processing fees and there will be no refund. It should
be noted that an applicant will not be reimbursed for moneys the
applicant (and not BLM) may pay directly to third persons to perform
studies, because it is not clear that FLPMA Section 304 applies in that
situation.
Because persons other than the applicant could also be a successful
bidder under BLM's other programs, we have made similar changes to the
regulations at 43 CFR part 3500 applicable to the leasing of solid
minerals other than coal, and to the mineral materials sales
regulations at 43 CFR part 3600.
3. We amended the mining claim patent application adjudication fee
so that patent applications covering 10 or fewer claims will be charged
only half the cost recovery fee that applications with more than 10
claims will be charged. This change was made in response to comments
expressing concern that the proposed fee would be too burdensome on
claimants who submit patent applications for only a few claims. We
selected the 10-claim threshold because that is the number Congress
chose to define the class of miners who may perform assessment work in
lieu of paying the claim maintenance fee. The adjudication fee in the
proposed rule was a fixed fee based on a weighted average of BLM's
adjudication costs. We believe that the commenters may have a valid
concern and that it may be more reasonable to base the adjudication
fees on the per claim costs depending on how many claims are included
in an application. BLM plans to reassess its costs of adjudication and
may propose a revision to this fee in the future. In this final rule,
we decided that it was reasonable to phase in the adjudication fee for
patent applications that contain 10 or fewer claims. A discussion of
phasing in fees is contained in the preamble to the proposed rule. 70
FR 41533. This rule contains the first step of this phasing-in process.
4. The final rule adds language at section 3000.11 to clarify that
a decision of BLM to change a fixed fee to a case-by-case fee may be
appealed to the Interior Board of Land Appeals.
5. In response to comments objecting to the applicability of the
fee provisions to applications pending when this rule is made final, we
have revised the rule to make the fee provisions of the final rule
applicable only to documents BLM receives after the effective date of
this rule. Section 3000.10(d) has been restructured to clarify the
timing of the applicability of both fixed and case-by-case fees
established by this rule. Because both the new fixed and case-by-case
fee provisions apply only to documents received after the effective
date of this rule, proposed section 3000.11(c), which would have
addressed how to treat costs of pending documents, is not necessary and
has not been included in the final rule. Also, rather than include in
section 3000.10(a) a statement that required fees must be included with
documents that are filed, we moved the statement to section 3000.12(a)
of this chapter to make it clear that such a requirement applies only
to fixed fees. We have also amended paragraphs (d)(1) and (d)(2) of
section 3000.10 to make it clear that the documents for which BLM will
begin to charge the new fees are those that BLM receives on or after
November 7, 2005. The proposed rule referred to documents that BLM
``accepted.'' We have amended this language to avoid confusion. The
date of receipt may be easily evidenced by a log-in date on the
document or by a receipt given to an applicant by BLM.
6. We amended the language of section 3000.11(b)(4)(i) to clarify
that we will not stop ongoing processing if we re-estimate the costs
associated with a case-by-case document. (This issue is further
discussed in the preamble under III.A. General Comments.) We also moved
the last sentence of section 3000.11(b)(4)(ii) regarding refunds into a
new paragraph (b)(4)(iii) to make it clear that whenever money paid as
a case-by-case fee was not spent on processing costs, BLM will refund
that money once processing is complete.
We wish to make one further clarification with regard to section
3000.11, relating to the charging of processing fees on a case-by-case
basis. Under paragraph (a), if at any time BLM
[[Page 58856]]
decides that a particular document designated for a fixed fee will have
a unique processing cost, such as an Environmental Impact Statement, we
may set the fee under the case-by-case procedures. BLM intends to
recover on a case-by-case basis those costs that BLM incurs following
the decision that the document processing will have a unique processing
cost. BLM will not charge for costs that BLM incurred before that
decision was made. The applicant will receive a credit for any fixed
fee already paid against the case-by-case fees that are billed.
7. We have clarified the final regulatory text for section 3800.5
as it relates to the applicability of case-by-case cost processing for
validity examinations and common variety determinations associated with
mining notices, applications for PoOs, and applications for patents. We
divided proposed paragraph (b) into final paragraphs (b) and (c).
Revised paragraph (b) relates to mining notices and plans of operation
and redesignated paragraph (c) applies to patent applications.
Revised paragraph (b) makes it clear that a notice level operation
or an applicant for a plan of operations for which a mineral
examination, including a validity examination or a common variety
determination, and associated reports, are performed and prepared under
43 CFR 3809.100 or 3809.101, must pay a processing fee on a case-by-
case basis. It was not BLM's intent to include validity examinations
BLM may perform on its own volition that are not performed under
sections 3809.100 or 3809.101. This change is in response to comments
that the regulatory text contained in the July 2005 proposed rule was
confusing. It also should be noted that the cost recovery provisions
are not intended to modify BLM policy as to when mineral examinations
are performed.
Final paragraph (c) provides that an applicant for a mineral patent
under 43 CFR subpart 3860 must pay a processing fee on a case-by-case
basis as described in section 3000.11 for any validity examination and
report prepared in connection with the application. This includes any
analyses performed in connection with the validity examination and
report, such as common variety determinations. Although contained in a
new paragraph, this is not a substantive change from the July 2005
proposed rule. 43 CFR subpart 3860 applies to all mineral patent
applications that BLM processes, regardless of the agency with surface
management responsibility for the lands covered by the patent
applications. Thus, case-by-case cost recovery will occur for validity
examinations associated with BLM processing of mineral patent
applications, whether the surface is administered by BLM, the U.S.
Forest Service, NPS, or other agencies.
BLM wishes to make one further clarification with regard to section
3800.5(a), relating to the case-by-case cost recovery for the
processing of PoOs requiring the preparation of an environmental impact
statement. Under paragraph (a), an applicant for a PoO under 43 CFR
part 3800 must pay a processing fee on a case-by-case basis as
described in 43 CFR 3000.11 whenever BLM decides that consideration of
the PoO requires the preparation of an Environmental Impact Statement
(EIS). The costs that BLM intends to recover on a case-by-case basis
under the final rule are those costs BLM incurs following the decision
that an EIS is necessary, not costs that BLM may have incurred before
that decision.
8. As a conforming amendment, we added language revising section
3835.32(c) so that it refers to a processing fee rather than a non-
refundable service charge. Paragraph (c) includes a cross-reference to
the table in section 3830.21 on service charges and fees, which BLM
considered for amendment in the proposed rule. This conforming
amendment to section 3835.32 was inadvertently omitted in the proposed
rule.
The rule also contains other technical conforming and editorial
changes.
Today's rule adopts both fixed fees and case-by-case fees. The
table below sets forth the final fees that are imposed by this rule,
compared to the fees as proposed in 2000 and 2005.
Table 1.--Fees for FY 2006
[Note that fees will be adjusted annually for changes in the IPD-GDP, published in the Federal Register, and
posted on BLM's website. Revised fees are effective each October 1.]
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Proposed fee in Proposed fee in
Document/action Existing fee 2000 rule 2005 rule \1\ Final fee \2\
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Oil and Gas (Part 3100, 3110,
3120, 3130):
Noncompetitive lease $75............... $305.............. $324.............. $335
application.
Competitive lease $75............... $120.............. $127.............. $130
application.
Assignment and transfer..... $25............... $70............... $74............... $75
Overriding royalty transfer, $25............... $9................ $10............... $10
payment out of production.
Name change, corporate $0................ $160.............. $170.............. $175
merger or transfer to heir/
devisee.
Leases consolidation........ $0................ $335.............. $356.............. $370
Lease renewal or exchange... $75............... $305.............. $324.............. $335
Lease reinstatement, Class I $25............... $60............... $64............... $65
Leasing under right-of-way.. $75............... $305.............. $324.............. $335
Geophysical exploration $0................ Case-by-case...... $500.............. $0
notice of intent--outside
Alaska.
Geophysical exploration $25............... Case-by-case...... $500.............. $25
permit application--Alaska.
Application for Permit to $0................ Not included...... $1600............. $0
Drill (AP).
Geothermal (Group 3200):
Noncompetitive lease $75............... $305.............. $324.............. $335
application.
Competitive lease $0................ $120.............. $127.............. $130
application.
Assignment and transfer of $50............... $70............... $74............... $75
record title or operating
right.
Name change, corporate $0................ $160.............. $170.............. $175
merger or transfer to heir/
devisee.
Lease consolidation......... $0................ $335.............. $356.............. $370
[[Page 58857]]
Lease reinstatement......... $0................ $60............... $64............... $65
Exploration operations $0................ Not included...... $500.............. $0
permit application.
Geothermal Permit to Drill $0................ Not included...... $1600............. $0
(GPD).
Coal (Group 3400):
License to mine application. $10............... $10............... $11............... $10
Exploration license $250.............. $250.............. $266.............. $275
application.
Lease or lease interest $50............... $50............... $53............... $55
transfer.
Competitive coal lease...... $250.............. Case-by-case...... Case-by-case...... Case-by-case
Coal lease modification..... $250.............. Case-by-case...... Case-by-case...... Case-by-case
Logical mining unit $0................ Case-by-case...... Case-by-case...... Case-by-case
formation or modification.
Royalty reduction $0................ Case-by-case...... Case-by-case...... Case-by-case
application.
Nonenergy Leasable (Group 3500):
Applications other than $25............... $25............... $27............... $30
those listed below.
Prospecting permit $0................ $50............... $53............... $55
application amendment.
Extension of prospecting $25............... $80............... $85............... $90
permit.
Lease renewal............... $25............... $390.............. $414.............. $430
Prospecting permit $25............... Case-by-case...... Case-by-case...... Case-by-case
application.
Preference right lease $0................ Case-by-case...... Case-by-case...... Case-by-case
application.
Successful competitive lease $0................ Case-by-case...... Case-by-case...... Case-by-case
Application to suspend, $0................ Case-by-case...... Case-by-case...... Case-by-case
waive or reduce your
rental, minimum royalty,
production royalty or
royalty rate.
Future or fractional $25............... Case-by-case...... Case-by-case...... Case-by-case
interest lease application.
Mineral Materials Disposal
(Group 3600):
Noncompetitive sale $0................ Case-by-case...... Case-by-case...... Case-by-case
(excluding sales from
community pits or common
use areas).
Competitive sale............ $0................ Case-by-case...... Case-by-case...... Case-by-case
Competitive contract renewal $0................ N/A............... Case-by-case...... Case-by-case
Mining Law Administration (Group
3800):
Notice of Location \3\...... $10............... $15............... $16............... $15
Amendment of location....... $5................ $10............... $11............... $10
Transfer of mining claim/ $5................ $10............... $11............... $10
site.
Recording an annual FLPMA $5................ $10............... $11............... $10
filing Sec. 3835.30).
Deferment of Assessment..... $25............... $80............... $85............... $90
Mineral Patent Adjudication. 1st claim--$250 $2,290............ $2,433............ $2,520 (>10
Each additional claims)
claim $50. $1,260 \4\ (10 or
fewer claims)
Adverse claim............... $10............... $80............... $85............... $90
Protest..................... $10............... $50............... $53............... $55
Plan of Operations with EIS. $0................ Case-by-case...... Case-by-case...... Case-by-case
Validity and Mineral $0................ Case-by-case...... Case-by-case...... Case-by-case
Examinations and Reports
performed in connection
with a Patent Application,
43 CFR 3809.100 or 43 CFR
3809.101.
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\1\ The fees proposed in July 2005 adjusted the fees proposed in 2000 by using the Implicit Price Deflator 4th
Quarter 2003 (106.244) and rounding to the nearest dollar.
\2\ The fees in this final rule adjusted the fees proposed in 2000 by using the Implicit Price Deflator for 4th
Quarter 2004 (110.077), then rounding to the nearest $5.00.
\3\ The existing fee for recording a mining claim or site location (43 CFR 3833) is a total of $165. This
includes the initial maintenance fee of $125 and one time $30 location fee required by statute and the $10
service charge shown in the table. The service charge becomes a $15 processing fee in this final rule, making
the total fee $170.
\4\ In this final rule, the fixed fee for adjudication of mineral patents has been modified in response to
comments received. Applications with 10 or fewer claims will be charged a fixed fee of $1,260. Where the
mineral patent application includes more than 10 claims, the fee will be $2,520.
III. Responses to Comments on the December 2000 and July 2005 Proposed
Rules
In this section of the preamble, we respond to the substantive
comments that we received on the December 15, 2000, proposed rule (65
FR 78440) and on the proposed rule published in the Federal Register on
July 19, 2005 (70 FR 41532). In response to the December 15, 2000,
proposed rule (65 FR 78440), BLM received approximately 136 comments.
In response to the 2005 re-proposed rule (70 FR 41532), BLM received
approximately 43 comments.
A. General Comments
Although BLM received some comments in support of the rule, the
majority of comments generally opposed
[[Page 58858]]
any fee increases in BLM Mineral Programs. The commenters expressed
many reasons for opposing the rule. Some commenters said that BLM
appeared to have based the fee changes on out-of-date data from fiscal
years 1988 to 1990. Similarly, a commenter said that BLM used cost
recovery data from a period of low activity, resulting in an inaccurate
fee structure.
The commenters are incorrect in asserting that BLM based the fees
solely on data from fiscal years 1988 to 1990. In the mid-1990s, BLM
reanalyzed the data and conducted spot checks to verify their continued
validity as explained in more detail in the preamble to the proposed
rule (70 FR 41534). BLM's processes covered by this rule have not
changed significantly since that time. Moreover, we have adjusted the
fees using the Implicit Price Deflator for 4th Quarter 2004 to reflect
current costs. Accordingly, we believe that the fees in this final rule
are not out of date. Moreover, the period for which BLM collected data
was not a period of particularly low activity.
Some commenters asserted that the cost recovery fees are equivalent
to a tax on producers. The commenters also objected to the proposed
rule because operators already pay for the services provided by BLM
through taxes. They recommended that operators be given a tax incentive
or tax credit to offset the cost of these higher fees.
We disagree. The fees in this rule are not a tax. The fees are
charged for special benefits received by identifiable beneficiaries and
are intended to reimburse the agency for the costs of processing the
various energy and minerals related filings. Creating tax incentives
and tax credits to offset the cost to the operator of these fees is not
part of this rule, and it is outside BLM's or DOI's jurisdiction or
authority to initiate such a rule.
Some commenters asserted that the fees in this rule are unjustified
in light of the fact that the government receives other revenues such
as royalties, bonus bids, and rentals for the mineral activities
covered by these fees, which in their view should cover processing
costs. A commenter recommended that BLM deduct the costs of processing
minerals and energy documents from the royalties that BLM is already
paid. As an example, a commenter stated that the public receives ``the
vast portion of the revenues from the proceeds from the federal coal
lease'' but has no overhead costs or investment risks.
We disagree. Royalties, rents, and bonus bids reflect the value of
the resource to the lessor. Congress authorized BLM to recover
processing costs, and did so fully aware that BLM was already
collecting bonuses, rents, and royalties, so there cannot have been any
legislative intent that one fee should offset another.
BLM charges processing fees pursuant to its authorities under the
Independent Offices Appropriation Act, as amended, 31 U.S.C. 9701
(IOAA); Section 304(a) of FLPMA; Circular A-25; DOI Manual 346 DM 1.2
A; and case law (also see the preamble to the proposed rule at 70 FR
41533 and Solicitor's Opinion M-36987 (December 5, 1996)). Congress
clearly intended for agencies to recover processing costs in addition
to bonuses, rents, and royalties.
The IOAA states that Federal agencies should be ``self-sustaining
to the extent possible,'' and authorizes agency heads to ``prescribe
regulations establishing the charge for a service or thing of value
provided by the agency.'' Section 304(a) of FLPMA specifically
authorizes the Secretary of the Interior to ``establish reasonable
filing and service fees and reasonable charges and commissions with
respect to applications and other documents relating to the public
lands.'' Circular A-25 sets forth a general policy that a user charge
will be assessed against each identifiable recipient for special
benefits derived from Federal activities beyond those received by the
general public.
A commenter said that other public land users who do not pay
royalties should also pay processing costs.
BLM has implemented or is considering implementing cost recovery
for other programs that it administers.
One commenter stated that, because much of the processing fees go
toward satisfying other government regulations, as additional
regulatory requirements are imposed and become part of BLM's
processing, costs would continue to increase.
We appreciate the commenter's concern. In the short term, potential
new requirements would not affect BLM's fixed fees. Over the longer
term, BLM may have to reassess the fixed fees if our processing costs
change significantly. Although we do not foresee increased regulatory
burdens that would significantly affect processing costs, case-by-case
fees would include any such increases. It is important to note,
however, that as technology and automation improve, our document
processing costs may decrease, which will be reflected in reduced case-
by-case fees.
Some commenters asserted that case-by-case fees are open-ended and
contain no cap, which makes it difficult to plan for future costs. Some
of these commenters asked how an applicant would know in advance
whether they could afford to submit an application.
Although case-by-case fees do not contain a prescribed cap, the
process that BLM has established for case-by-case fees provides that
cost estimates be given to applicants before processing begins. In
advance of an application being submitted to BLM, an operator may also
discuss the project with BLM and ask for cost projections. We expect
that with time and experience, case-by-case fees will become more
predictable.
Some commenters are concerned that the rule provisions give BLM too
much authority to convert fixed fees into case-by-case fees under the
provision that allows BLM to change a document designated for a fixed
fee to a case-by-case fee if BLM decides that it will have a unique
processing cost. The commenters said that BLM might arbitrarily change
the designation during processing and set a higher fee under the case-
by-case procedures. A commenter requested that, if possible, BLM
identify fixed fees that will not be subject to case-by-case cost
recovery.
We do not agree that the rule gives BLM unlimited discretion to
convert fixed fees into case-by-case fees. By ``unique processing
costs,'' BLM means costs associated with a processing step that would
result in significantly higher costs than are customary for that fixed-
fee category. When applied to certain fixed-fee categories, costs of
efforts such as EISs, cultural resource surveys, or threatened or
endangered species consultations and studies, may be considered unique
because they are not usually required for actions in those categories.
Although most fixed fees are not of a type that could incur unique
processing costs, BLM cannot guarantee that any particular transaction
cannot give rise to unique circumstances that would warrant case-by-
case processing. However, BLM has guidelines for determining when it
takes actions such as those referenced above and will not decide that a
document will require such processing steps unless those guidelines are
satisfied. [FEDREG][VOL]*[/VOL][NO]*[/NO][DATE]*[/
DATE][RULES][RULE][PREAMB][AGENCY]*[/AGENCY][SUBJECT]*[/SUBJECT][/
PREAMB][SUPLINF][HED]*[/HED]
If the applicant disagrees with BLM's determination that the
application merits a case-by-case fee, the applicant may appeal that
determination to IBLA under BLM's appeals process at 43 CFR part 4,
subpart E, when it receives the cost estimate from BLM. In response to
the commenters' concern, we have added language to the rule text
clarifying that such a determination may be appealed. If the applicant
prevails, BLM will refund the disputed fee and charge only the fixed
fee.
A commenter stated that, although estimated processing costs can be
[[Page 58859]]
appealed, he has no confidence in the ability of IBLA to process those
cases expeditiously. The comment concluded that there is apparently no
motivation for BLM or IBLA to move quickly on any appeals.
With respect to appeals, there is little BLM can do to shorten the
period between when an appeal is filed and when an appeal is resolved.
However, the regulations provide that an applicant can ensure that BLM
will continue processing the document and issue a decision while an
appeal is pending by paying the disputed fee under protest.
Some commenters contended that the fees would have a negative
impact on small operators or miners. Some commenters said the proposed
rule would have a negative impact on the national and local economies,
especially as it relates to exploration, and will result in an increase
in the number of energy and mineral projects being abandoned. They
generally stated that higher fees would adversely affect mining
industry ability to compete.
The Record of Compliance that BLM prepared for the 2005 proposed
rule concluded that, when mineral industry revenues are compared with
the cost increases in this rule, the projected annual total for these
increases amounts to less than one percent of sales. Even if the entire
amount of the increases were to be borne by small business entities,
the effects would be minimal. For example, under this rule, we project
that small oil and gas operators will pay an additional $2 million
annually, approximately, while generating sales of about $1 billion
annually from operations on Federal lands. As a matter of prudence,
operators will factor these fees into their business decisions before
pursuing on-the-ground operations. In addition, for competitive
leasing, these higher costs may be reflected in the successful bid.
The increases in the fees paid by the applicants represent the
direct economic impact of complying with the final rule. We estimate
the cost of the rule, in the form of higher fees, will be approximately
$7 million annually. We do not anticipate any measurable reduction in
economic activity due to these fees.
Several commenters said that BLM did not adequately consider the
FLPMA factors when calculating the proposed fee increases, and
challenged BLM's statement that the projects for which fees are charged
in this rule usually provide little or no service to the public. A
commenter stated that developers are involved in tremendous financial
risks in producing minerals, and urged that the rule should consider
the financial risks involved and potential positive benefits to the
general public. Commenters stated that we did not consider various
benefits of mining, including improved grazing land, improved wildlife
habitat on reclaimed mine lands, and maintenance of trails that benefit
recreational and subsistence users. Some commenters asserted providing
heat and electricity to homes and businesses and other mineral uses are
an obvious service and benefit to the public. A few commented that BLM
should give applicants a credit for the data they produce, or reimburse
them for providing it. A commenter concluded that BLM should include
discussion of how these factors were considered in the final decision-
making process on the fee procedures.
A commenter also discussed the importance of coal production and
contended that because coal resources from Federal leases are vital to
supplying electricity at a reasonable price and in an environmentally
sound manner, BLM should not charge additional document processing
costs. The commenter contended that a FLPMA factor mandates that BLM
not impose additional processing costs for leasable minerals because
the public receives significant benefit from lease revenues.
BLM agrees that the domestic mining industry is vital to the
American economy and provides immense benefits to the public. However,
the FLPMA factor of ``service to the public'' concerns whether the
applicant's project itself provides some significant direct service or
benefit to the general public, not the fact that members of the public
are the ultimate consumers of mineral resources extracted from the
public lands (which is true of virtually all public land resources).
Companies extracting resources from the public lands do not necessarily
engage in extraction operations for the benefit of the public, but are
for-profit enterprises. There is thus no basis for using the public's
ultimate consumption of the resource as a reason for reducing
processing fees below BLM's actual processing costs.
BLM agrees that there are times when the applicant's project itself
does result in tangible benefits to the public, such as the
identification of cultural and archaeological sites in resource
surveys, trail maintenance, and others mentioned above. For documents
processed on a case-by-case fee basis, BLM will consider each of the
FLPMA factors as it relates to that individual project. For the fixed
fee documents, we considered the likelihood of activities in those
categories providing substantial direct benefits to the public. We
concluded that such potential benefits from transactions in the fixed
fee categories are too speculative to warrant charging less than BLM's
actual costs of processing, particularly when weighed against the
monetary value of the project to the applicant.
With regard to operators' financial risks, such investment risks
and overhead costs of a for-profit entity operating on public land are
normal costs of doing business and should not be a reason for BLM to
collect less than its actual processing costs under the FLPMA
reasonableness factors.
Some commenters asserted that BLM's processing activities provide
benefits to the general public such that BLM should charge less than
its actual costs of processing. Some commenters also objected that many
of BLM's processing activities benefit only the public and not the
applicant.
BLM disagrees. The processing fees charged in this rule are for the
documents that an applicant must submit to satisfy various statutory
and regulatory requirements pertaining to the various minerals programs
that BLM administers. The processing of an application necessarily
benefits the applicant. See 70 FR 41541. BLM considered the potential
benefits to the public of its processing of the fixed fee documents in
this rule and concluded that the monetary value to the applicant
outweighs the possible benefit to the public.
Several commenters were unclear how the fees relate to situations
where the applicant directly pays a third party to perform required
studies. Some commenters suggested that because they often pay third
party contractors to perform required environmental studies, BLM should
credit those costs by reducing the fees BLM charges.
A credit is inappropriate because the fees in this rule do not
include any costs that an applicant pays directly to a third party. For
third party contracts, BLM's cost recovery is restricted to recovering
the costs of its own activities, such as supervising the contractor,
reviewing and approving the final document. If BLM pays for
environmental studies in connection with its document processing, it
will include those costs in its fee.
Some commenters said that because the industry already pays for the
privilege of operating on public lands by performing many studies and
inventories, and compiling National Environmental Policy Act (NEPA)
documents, the Federal Government
[[Page 58860]]
should consider reimbursing industry for performing these undertakings.
BLM will not be reimbursing operators for studies they perform in
compliance with various laws, mandates, and policies. All such costs
are borne by the operator. The operator conducts these studies for
their own benefit because an operator cannot receive a permit or
authorization to extract resources from public lands until all required
studies are completed. The operator does have the option of paying a
BLM-permitted contractor to conduct these studies or they can ask BLM
to conduct them at a charge to the operator.
Some commenters contended that BLM must ensure efficient and timely
processing and provide time frames within which it will complete
processing. A commenter suggested that BLM undertake an independent
review of the processes that are funded by these increased fees before
they are implemented in the final rule.
BLM recognizes that we have a responsibility to administer our
programs in an efficient and effective manner, and review our
procedures for processing applications to ensure their efficiency on an
on-going basis. However, this is not a basis for delaying the
implementation of this rule. Setting time frames for BLM processing is
not part of this cost recovery rulemaking.
A few commenters asked BLM to hold public meetings before
finalizing any fee increases. Several commenters asked that we extend
the comment period. Another commenter asked BLM to develop regulations
governing minerals management programs with more industry involvement.
BLM believes that adequate public involvement has occurred with
respect to this rule. The original proposal, in December 2000, was very
similar to this final rule, and the comment period at that time was
open for over six months. We also provided a 30-day comment period for
the July 2005 proposal.
Some commenters said that BLM's current fees are much higher than
those charged by local governments and private industry for similar
services.
BLM bases its fees on its own processing costs in conjunction with
its consideration of the FLPMA reasonableness factors. Neither the
states nor private industry has the same statutory responsibilities, as
does BLM.
A commenter said that use of a weighted average creates a situation
where they are charged more than is necessary and that they should not
be penalized if a BLM office is less cost efficient than another one. A
commenter requested that BLM define ``weighted average'' and said that
this mathematical cost basing leads to unequal application under the
law and creates a cost structure slanted toward higher than necessary
fees. A commenter asked what authority gives BLM the means to use a
``weighted average'' instead of the actual or average cost.
BLM relied on its regulatory authority in FLPMA (43 U.S.C. 1740) to
determine the proper method of analysis. BLM used a weighted average
for fixed fees to incorporate economies of scale achieved by offices
that process many more documents than those with less active oil and
gas (or other mineral) programs. The processing cost fees in this rule
are based on a weighted average, rather than a simple average, of BLM-
wide processing costs for each type of document. This method gave
greater weight to the processing cost data from field offices having a
heavy workload, and thus more expertise, in processing a particular
type of document. Offices that process a greater number of a particular
type of document generally have a lower processing cost per document of
that type. We first estimated the actual cost for a type of document
and then considered each of the FLPMA factors to see if any of them
might cause a fee to be set at less than actual cost. We then decided
the amount of the fee, which cannot be more than our processing cost.
A commenter said that BLM failed to set reasonable ground rules
like limits on dollars per hour for BLM staff to work on administering
the project.
BLM will base case-by-case fees on the actual costs incurred in
processing the application. Before processing begins, BLM will provide
the applicant with an estimate of BLM's costs and its key components.
The applicant will have an opportunity to object if it believes the
estimated costs are excessive.
A commenter asked why there are differences in costs among BLM
State Offices for the same program elements and services. Another
commenter asked how BLM's processes can be ``reasonably efficient''
when BLM's preliminary review of the data showed large cost differences
among BLM offices for processing certain types of documents as well as
large numbers of documents filed and processed.
As stated in the proposed rule preamble, BLM determined that the
differences in costs cited by the commenters were attributable to site-
or sale-specific factors or economies of scale.
Some commenters said that BLM was attempting to circumvent the
budgeting process by burdening industry with additional fees and
increasing existing fees as much as 15 times the current fee.
BLM is not circumventing the budgeting process. Congress authorized
BLM to recover processing costs under the IOAA and FLPMA, and OMB
directives require us to do so. The IOAA states that Federal agencies
should be self-sustaining to the extent possible and authorizes agency
heads to ``prescribe regulations establishing the charge for a service
or thing of value provided by the agency.'' Section 304(a) of FLPMA
specifically authorizes the Secretary of the Interior to ``establish
reasonable filing and service fees and reasonable charges and
commissions with respect to applications and other documents related to
the public lands.'' The IOAA and FLPMA give BLM authority to charge
fees for processing applications. Moreover, Circular A-25 provides that
the general Federal policy is that a charge will be assessed against
each identifiable recipient for special benefits derived from Federal
activities beyond those received by the public.
A commenter stated that BLM went too far beyond what is reasonable
in setting the proposed fees beyond the fees established in previous
regulations.
BLM disagrees. The prior filing fees were more in the nature of a
recordation fee, and were not intended to recover BLM's processing
costs.
Several commenters argued that BLM's proposed cost recovery
regulations are flawed because they rely on an incorrect legal
conclusion in Solicitor's Opinion M-36987 (December 5, 1996) that cost
recovery is mandatory under FLPMA and the IOAA.
The commenters are mistaken. The Solicitor's Opinion did not
conclude that those statutes require cost recovery, nor did BLM's
preamble to the proposed rule characterize the Opinion's conclusion as
such. Solicitor's Opinion M-36987 concluded that ``BLM has authority
under applicable statutory and case law to recover costs of minerals
document processing * * *. Because it has this authority and because
the Departmental Manual and OMB policy require that costs be recovered
where possible, BLM should take steps to initiate cost recovery * *
*.''
Commenters also maintained that the Department mistakenly relies on
the BLM Manual to create a mandatory cost recovery obligation.
By ``BLM Manual,'' we assume the commenters meant to refer to the
Departmental Manual, which was cited in both the Solicitor's Opinion
and the proposed rule preamble. The commenters' objection that the
Manual does not have the force or effect of law
[[Page 58861]]
and cannot override a Federal statute misses the point. As explained in
the preamble to the proposed rule, Congress has authorized cost
recovery in both the IOAA and FLPMA. The executive branch, through
Circular A-25, has stated the general Federal policy to be that charges
will be assessed against identifiable recipients of special benefits.
The Secretary of the Interior, in the Departmental Manual, has
instructed bureaus and offices within DOI to recover costs that they
are authorized to recover. There is no issue here of a conflict between
the Departmental Manual and statutory authority--the Manual, the OMB
guidance, and the statutes are all in accord. Nor is there any issue,
as the commenters assert, of BLM interpreting the Manual as directing
it to disregard one of the FLPMA factors. As explained in the preamble
to the proposed rule, BLM carefully considered each of the FLPMA
factors in setting the proposed fees.
One commenter asserted that BLM appears to rid itself of its
responsibility to prepare any special studies as outlined in NEPA and
stated that BLM must maintain the necessary staff and resources to
perform NEPA requirements.
BLM recognizes that it has continuing responsibilities to satisfy
its requirements under NEPA. The provision in section 3000.11(b) simply
allows the applicant to ask BLM's approval to do studies or other
activities, under BLM supervision and to BLM standards, on a voluntary
basis. If the applicant chooses not to do the work, BLM will perform
the work and include the cost in the case-by-case fee. Nothing in these
regulations relieves BLM from fulfilling any of its statutory
responsibilities.
One commenter expressed concern that the fee increases will
adversely affect academic interests involved in fossil research.
The cost recovery provisions apply to applications for certain
commercial activities. Academic interests involved in fossil research,
including collectors of petrified wood under 43 CFR subpart 3622 and
other kinds of researchers under 43 CFR part 2930, will not be affected
by this rule.
A few commenters stated that BLM should not be pursuing a prior
administration's agenda or initiative.
The changes in this final rule do not represent the agenda of any
particular administration. BLM's efforts to recover costs were
initiated in response to recommendations from the OIG in 1988, as part
of a 1980s Presidential initiative calling for all Federal agencies to
charge appropriate user fees for agency services.
A commenter asked if BLM had considered implementing electronic
filings of ownership transfers before implementing a new fee schedule.
BLM intends ultimately to implement electronic filings for title
transfers. We will then review the processing costs and adjust them as
necessary. This is not a reason to delay implementation of this rule.
A commenter said that the rule could be abused in its
implementation by BLM offices seeking to delay or deny permit
applications, including those that state regulatory agencies handle
expeditiously.
The comment is speculative. We have carefully explained how the
fees will be implemented in accordance with applicable authority. These
fees will not be used to delay any BLM action unnecessarily.
A commenter said it is unclear what, if any, BLM costs other than
land use plan studies and programmatic environmental assessments (EAs)
were exempted from the rule.
BLM intends this rule to provide for the collection of document-
specific costs rather than programmatic costs.
A commenter said that if BLM proceeds with this rule, it must
ensure that all management overhead is excluded, citing Nevada Power
Co. v. Watt, 711 F.2d 913, 931 (10th Cir. 1983).
BLM's actual costs are the sum of both direct and indirect costs.
However, under FLPMA, BLM cannot recover the costs of management
overhead. We have interpreted this to mean the costs of BLM State
Directors and Washington Office staff, except when a member of this
group works on a specific authorization such as a lease. We have not
excluded the costs of Deputy State Directors or other supervisory staff
because they are typically involved in day-to-day decision making.
BLM's cost accounting system is intended to reflect this distinction.
One commenter noted that it appeared that BLM was attempting to
``double-dip'' by assessing both an application fee and a filing fee.
Another commenter noted that BLM was only assessing application and
filing fees for some actions and questioned why BLM was not collecting
the processing fee for those same actions.
Some commenters seem to have misunderstood how BLM structured the
fixed fees. Some fixed fees were already-existing, nominal filing fees
that we did not propose to change. Filing fees serve to limit filing to
serious applicants and are not intended to reimburse processing costs.
This rule adds certain fixed fees for other documents based on BLM's
processing costs. Each action for which this rule charges a fee has
either a filing fee or a processing fee. No action has both a filing
fee and a cost recovery processing fee. We may in the future change
some filing fees to processing fees. As explained in the preamble to
the proposed rule, BLM intends to continue to work on establishing and
collecting fees for other documents (70 FR 41533).
Some commenters stated that these provisions appear to create
further delays in an already time consuming set of procedures. A
commenter stated that at a minimum the final regulations should include
provisions to establish an escrow-type account that BLM can access. A
commenter recommended that BLM add the following language to proposed
section 3000.11: ``You may elect to establish a standing contingency
fund to be accessed and utilized by BLM in case of shortfall, to assure
that processing continues. Provisions for appeals and fees paid under
protest in subsection (c)(6) will apply equally to any funds utilized
from such an account.''
This rule does not provide for escrow or contingency accounts to
facilitate payments of case-by-case fees. However, based on these
comments, we have amended the language of section 3000.11(b)(4)(i) to
clarify that we will not stop ongoing processing if we re-estimate the
costs associated with a case-by-case document. This revision should
reduce potential delays associated with re-estimation of costs.
The commenter also asked BLM to consider that cost recovery should
be limited to the costs of the actual hours that BLM staff worked
directly on the project being charged and specifically should exclude
any staff training.
The preamble to the proposed rule explained what costs BLM includes
in determining its fees in this rule. Both direct and indirect costs
are included. Training is only included to the extent that it is
allowable as indirect costs.
One commenter asked that BLM consider dedicating funds collected
from increased fees to paying personnel who process the permits for
which the fees are levied. The commenter said that BLM staff that is
responsible for the minerals permitting process should not have other
assignments within their respective offices.
BLM intends to structure its budget processes to return fees
collected to the BLM office which processes the actions. BLM staff
workload is determined by the needs of individual BLM offices.
One commenter asked for further explanation of the relationship
between
[[Page 58862]]
existing Federal fees, assessments, and levies and the proposed
charges, asserting that existing fees already cover certain BLM
document processing costs. Specifically, the commenter contended that
net smelter royalties, other Mining Law Administration Program (MLAP)
funds, and bonus bid payments that cover document processing costs
should essentially be counted as document processing fees, and that BLM
should not seek additional revenue from applicants if double recovery
of such fees would occur.
As discussed earlier in this preamble, we have addressed the
relationship between royalties, bonus bids, rents, and the processing
fees in this rule. We address here the relationship between the
processing fees and Mining Law fees, such as the annual maintenance fee
on unpatented mining claims and the location fee on new claims.
Moneys that Congress has directed BLM to collect as location and
maintenance fees are deposited directly to the Treasury and are to be
used as an offset to BLM's appropriation, up to a certain ceiling. The
purpose for the maintenance fee is to replace the $100 assessment work
requirement in the Mining Law. The assessment work requirement was
intended to show a mining claimant's bona fides in exploring for or
developing minerals. Similarly, the location fee is intended to
discourage speculative filings of mining claims. Consequently, the
fundamental purpose for those fees is not for cost recovery.
The Interior Department's appropriation act specifies two purposes
for which BLM can use mining claim fees. First, Congress has directed
that a set amount of mining claim fees be used to cover the costs of
administering the mining claim fee program. The mining claim fee
program is the program under which BLM collects and processes the $125
claim maintenance fee and the location fee. We did not propose and have
not adopted any additional processing fee for collecting and processing
the statutory mining claim fees. Although the terminology may appear
similar (the word ``location'' is used in both), the fee this rule
imposes for processing location notices is intended to cover BLM's
processing costs related to the statutory filing requirement imposed by
FLPMA Section 314 (43 U.S.C. 1744), and is unrelated to the collection
of the statutorily imposed location fee.
Second, Congress has directed that the bulk of the appropriation
that is offset by mining claim fees be used for the MLAP generally This
appropriation has averaged approximately $34 million a year for the
past few years, and is used for the entire range of administrative
costs incurred by the MLAP; it has historically been inadequate to
operate all aspects of the program. In the past, BLM has used
appropriated funds to cover the processing costs of documents when no
processing fees were being charged. The fact that general Mining Law
Program funds were used to cover these costs in the past, however, does
not mean that these costs ``should'' be funded from those collections,
or that BLM cannot now exercise its statutory authority to charge a
specific processing fee to cover certain document processing costs.
When general Mining Law Program funds no longer have to be directed to
cover all processing costs, they can and will be directed to cover
other aspects of the program.
The commenter also stated that because claim maintenance fees and
location fees generate millions of dollars, which will increase as fees
are increased, BLM should re-evaluate the need to impose additional
processing fees.
As is the case with royalties, bonus bids, and rents, Congress
imposes claim maintenance and location fees for purposes different from
covering the costs of document processing. BLM cannot predict how much
money will be collected from these statutory fees or the size of future
Congressional appropriations for Mining Law administration. In the IOAA
and FLPMA, Congress has also separately authorized the collection of
fees to cover the costs of document processing. Those fees are the ones
that will be collected under this rule.
One commenter objected to BLM charging for pending documents where
processing has already begun. The commenter asserted that charging new
fees on pending documents would constitute an unlawful retroactive
application of new requirements. The commenter also asserted that
equitable concerns arise regarding such charges since the charges could
not have been anticipated and planned for in the planning phase of the
action. In addition, the commenter stated that often the applicant has
no control over the pace of document processing, and thus would be
unfairly punished due to BLM's processing backlogs.
As discussed earlier in this preamble, BLM will apply both fixed
and case-by-case fee provisions in this final rule to applications
submitted after the effective date of this rule, and not to
applications pending on that date. Although BLM disagrees with the
characterization of the proposed regulations as retroactive, BLM is
sensitive to practical concerns relating to applying this rule to
pending applications, as well as perceived inequities, and has revised
the rule accordingly.
Another commenter stated that any cost reimbursement policy should
prohibit the imposition of significant new processing fees upon the
lessee or operator of an existing lease, other than future minor filing
fees, for specific actions such as processing right-of-way
applications. The commenter asserted that at the time existing leases
were bid upon and issued, BLM represented by implication and conduct
that fees would be imposed under existing law and regulation only for
certain activities, such as rights-of-way, and that other
administrative costs associated with existing leases were reasonably
expected to be borne by BLM. The commenter concluded that lessees' bids
reflected those assumptions.
BLM rejects the comment. The commenter's assertions are based on
speculation, not fact. Existing lessees do not have any contractual or
other basis to be exempt from BLM cost recovery assessments. To the
contrary, BLM leases typically contain a condition that lessees must
comply with present and future BLM regulations. The recovery of
processing costs by government agencies is not a new phenomenon, and
BLM's doing so under existing authorities could have been anticipated
by lessees at the time of lease acquisition.
Some commenters stated that deadlines are particularly important
for documents where fees are collected on a case-by-case basis, and
should be established preliminarily through negotiations between the
applicant and BLM during the time period when they would be working
together on the cost estimate.
This rule does not establish mandatory timelines for processing
documents. BLM agrees, however, that it would be helpful to all persons
if BLM and an applicant reach a common understanding as to the
estimated time when various steps will be achieved.
B. Comments on Oil and Gas Leasing Cost Recovery
A commenter said that BLM's added costs do not address any
improvement in services to industry. The commenter stated that by
increasing fees BLM is attempting to drive up the cost of doing
business on Federal lands and discourage companies from exploration and
development of oil and gas.
A commenter said that poor customer service and long periods to
process documents by BLM have been long-
[[Page 58863]]
standing industry concerns, and that BLM's budget and staffing have not
kept up with increasing industry activity. The comment continued that
this has created delays and permit backlogs. The commenter said these
issues are more important than ``incremental cost recovery.''
Several commenters stated that if the price of energy decreases
they would still be required to pay higher fees for reduced service
from BLM and less commodity. Several commenters said they had concerns
with BLM's quality of ``customer service.'' Others stated that the
proposed cost recovery rule is contrary to the new National Energy
Plan; and an impediment to domestic oil and gas exploration and
development.
BLM takes seriously its customer service obligations, and is
constantly looking to improve the means by which it addresses permit
processing and its other program responsibilities. To the extent moneys
recovered from processing fees are directed back to the offices from
which they were collected, we hope this will serve to maintain or
enhance the level of service that BLM provides.
We disagree that processing fees should decrease if the price of
energy decreases. A processing fee covers the cost of a service that
provides a benefit to the applicant and should be considered by the
applicant as equivalent to any other cost of doing business. BLM's
costs to process documents submitted by an applicant are unrelated to
market fluctuations. Just as fees will not increase due to market
upswings, they will not decrease due to market declines. BLM's economic
analysis indicates that the new fees will not be an impediment to
domestic oil and gas or other mineral development. The fees are minor
in the context of the overall energy market.
Some commenters stated that these fee increases could result in
operators not filing assignments and transfers with BLM. Another
commenter said that the current fees are considerably higher when
compared to those charged by local governments and private industry for
similar services, and in order for operators to have good title to any
oil and gas lease, the leases and transfers must be recorded in the
county. The commenter continued that, because BLM requires a second set
of records on BLM-prescribed forms to be filed with field offices,
operators must undertake expensive curative title work when BLM records
do not match the county records.
BLM disagrees that an increase in fees would result in operators
not filing assignments and transfers with BLM. In accordance with
statutory requirements, including the MLA, BLM must approve title
transfers and, until they are approved, the transfer is not effective
regardless of any private agreements between parties. While we
appreciate the commenters' concern about a second set of title records,
this is required by statute. Earlier in this preamble we have addressed
the relationship between BLM fees and state and local fees.
A commenter said that BLM must set minimum fees that reflect the
lesser of the reasonable or actual BLM administrative costs to conduct
a pre-lease EA and promptly issue the lease. The commenter urged that
any cost recovery program provide the lessee with a schedule of maximum
fees and a time period for payment.
We agree that under FLPMA, BLM's fees must be based on the lesser
of reasonable or actual costs. The fees in this rule were determined
after a consideration of all of the FLPMA factors and reflect BLM's
reasonable costs. As explained in the preamble to the proposed rule (70
FR 41540), the fixed fees for oil and gas leasing in this rule do not
include the steps required to prepare an individual sale parcel before
preparing the sale notice, such as earlier NEPA costs, even though such
costs are recoverable. The fees are based on costs that BLM incurs from
the point of preparing the sale notice. Unless there is a unique cost
that would cause the conversion of the fixed fee to a case-by-case fee,
the fees are established in the schedule in this rule.
A commenter asked BLM to return a portion of all revenues back to
BLM districts based on the level of oil and gas activities in the
district.
BLM is establishing a procedure through which the fees collected
will go back to the office from which they were generated.
Some commenters asked BLM to abandon all case-by-case fees for oil
and gas operations on Federal land.
BLM proposed case-by-case fees for certain oil and gas transactions
in the 2000 proposed rule on cost recovery. However, they were not in
the 2005 proposed rule, and they are not in this final rule.
Another commenter stated that the fee increases would be acceptable
if the fees covered expenses that the operator has incurred. However,
according to the commenter, many environmental, social, and economic
issues have to be reviewed before land is listed in public auctions.
The commenter said that these reviews are for the benefit of the
public, and that it would be unfair to pass these costs on to the user
and accuse users of causing this expense.
The fees in this final rule for BLM's oil and gas program do not
include the environmental, social, and economic costs that BLM incurs
before land is listed in public auctions. As was stated in the
preambles to both the 2000 and 2005 proposed rules, we may propose in
future rulemaking to recover those costs. As explained earlier in this
preamble, these reviews are associated with a special benefit to an
identifiable beneficiary and are recoverable under FLPMA and the IOAA.
A commenter stated that BLM's authority to impose cost recovery is
discretionary, not required by statute. The commenter said that
previous administrations chose not to impose this cost recovery
proposal on oil and gas operators and lessees for sound public policy
reasons and urged BLM to continue this policy and reconsider the
proposed rule in its entirety.
Under the Administrative Procedure Act, an agency may change its
policy if such changes have a rational basis and are supported by law.
BLM has explained both its basis and purpose and the legal authority
supporting this rule.
A commenter said that the transfer-of-operating-rights fees are
inappropriate because the documents are not adjudicated, but only
filed.
While operating rights transfers do not involve the same
adjudicative processing steps as other documents, BLM must still review
these documents for legal adequacy, and the cost recovery fee is
appropriate.
C. Comments on Geothermal Leasing Cost Recovery
A commenter asked if we have considered fee increases from a
national strategic energy viewpoint. For example, according to the
comment, increased geothermal production from Federal lands would
address the local energy shortages in the West in an environmentally
benign way. The commenter therefore questions whether BLM should
increase such fees.
As mentioned earlier in this preamble, this final rule does not
include processing fees for geothermal permits to drill or geothermal
exploration permits. Any remaining geothermal fees established by this
rule will not hinder geothermal development.
D. Comments on Coal Leasing Cost Recovery
A commenter suggested that BLM offset the processing fees for a
competitive coal lease by an equivalent
[[Page 58864]]
reduction in the fair market value bid for the lease.
Prospective bidders independently determine what they consider the
fair market value of a coal lease to be. Companies will take all costs,
including processing costs, into account when bidding. BLM will do the
same when it makes its pre-lease determination of a minimum acceptable
bid. Fair market value cannot be further reduced by the amount of
processing costs, since those were already taken into account by the
market. Also, Congress authorized the recovery of both fair market
value and processing fees.
A commenter stated that BLM did not consider how the final rule
would determine fees when the same or similar activity has been
undertaken by another Federal or state agency with regard to the same
transaction. The commenter stated that BLM should withdraw the rule
until this issue is addressed.
To the greatest extent possible, BLM and other Federal agencies
make diligent efforts to reduce or eliminate duplicative Federal or
state requirements. This reduces the work burden for the agencies and
provides better service to our customers. BLM and the Office of Surface
Mining (OSM) have eliminated as many duplications of effort as
possible. Moreover, in determining the fixed fees in this rule, we
averaged our processing costs based on a survey of our actual costs
(which included only our review time) plus consideration of the
reasonableness factors. For the case-by-case fees, we will charge only
for the time it actually takes BLM to process the document.
The commenter raised an issue about Resource Recovery and
Protection Plans (R2P2). There are no fees currently assessed or
proposed to be assessed for BLM to process an R2P2 for a Federal lease.
As stated in the preamble to the 2005 proposed rule at 70 FR 41536,
at the time BLM was preparing the proposed rule for publication, BLM
became aware that the case-by-case procedures outlined in proposed
section 3000.11 were not appropriate for fees charged to the successful
bidder in a lease sale or mineral materials sale context. Because a
competitive sale requires BLM to perform work before conducting the
sale, and BLM has the ability to track associated processing costs, the
preamble to the 2005 proposed rule stated that it is our intent to
include in the final rule a different set of procedures for charging a
case-by-case fee to the successful bidder in the context of coal lease
sales, solid mineral lease sales, and competitive mineral materials
sales. Although the 2005 proposed rule contained revisions to sections
3473.2, 3508.21, and 3602.44, the proposed revisions did not address
procedures for charging case-by-case fees to successful bidders,
including situations in which the applicant is not the successful
bidder. The final rule provides more extensive revisions to those
sections as well as to related sections. These changes are described in
an earlier section of this preamble.
One commenter suggested that BLM provide a mechanism whereby an
unsuccessful bidder for a coal lease is not assessed any of the
processing fees for the lease sale.
BLM agrees. As described above, the final rule requires the
successful bidder to pay lease sale processing costs that BLM incurs.
A commenter asked BLM to clarify what happens when proprietary data
is collected through activities that are covered by cost recovery. The
commenter asked that BLM consider revising the regulation by
incorporating mechanisms to ensure that any baseline data or
information collected or contracted for collection by the applicant
that is in excess of that information specifically required for
applications would remain the property of the applicant, regardless of
the outcome of the application process.
BLM will protect proprietary information in its possession to the
extent provided under applicable law.
One commenter asserted that having an open-ended case-by-case cost
recovery determination with no cap could easily create a disincentive
to the coal lease modification process. The commenter stated that coal
lease modifications are designed to maximize the recovery of the coal
resources by allowing for a quick process and procedure to incorporate
coal that cannot or will not be mined by anyone else into an existing
coal lease. The commenter stated that BLM should encourage this
practice, and that, in most instances, the additional royalties and
bonus bids received more than offset the cost of processing these lease
modifications.
BLM disagrees with this comment. We do not view a case-by-case fee
as opposed to a fixed fee as a disincentive to filing an application
for a coal lease modification. A lease modification is intended to
provide the lessee an opportunity to obtain non-competitively adjoining
tracts of coal that would otherwise be bypassed and that are not
independently commercially viable. Other than not requiring a
competitive lease sale and related public hearings on fair market value
and maximum economic recovery, processing a lease modification
application mirrors the processing steps associated with a competitive
lease sale. The distinction between royalties and bonuses on the one
hand and processing costs on the other was discussed earlier in this
preamble. See also the earlier comment response in this preamble
regarding the amounts and procedures related to case-by-case fees.
One commenter stated that a royalty rate reduction is an important
component if a company reaches a critical financial or operational
stage of their operation, and that if an operation is losing money and
potentially facing closure of the property, then the Federal Government
is also at risk of losing Federal mineral royalty income. The commenter
stated that an open-ended case-by-case cost recovery process with no
cap could be a big disincentive for a struggling company to overcome.
BLM disagrees with this comment. The commenter speculates as to the
impact of the cost recovery process on a company requesting a royalty
rate reduction. If a company requesting a royalty rate reduction
objects to the cost estimate that BLM provides in a case-by-case cost
recovery situation, it may appeal. BLM will apply the FLPMA
reasonableness factors in setting cost recovery fees in case-by-case
situations, as it applied them in setting the fixed fees in this rule.
The authority for a royalty rate reduction (30 U.S.C. 209) does not
address processing the royalty rate reduction applications. The MLA
provides no authority to waive, suspend, or reduce recovery of
processing costs. BLM will, of course, in its application of the FLPMA
reasonableness factors, consider the facts that were presented in
support of a royalty rate reduction.
One commenter stated that the proposed rule fails to recognize that
applicants sometimes voluntarily pay for approved third-party
contractors to perform studies to avoid certain delays associated with
BLM processing of these documents. For example, the commenter stated,
many applicants operating under the MLA pay BLM-approved third-party
contractors to prepare the EISs associated with their leasing
application.
BLM acknowledges that applicants have voluntarily paid for the
preparation of an EIS for many actions to expedite the processing of
that action. We anticipate that a similar process may continue under
these regulations. Under this rule, if BLM pays for the preparation of
studies such as an EIS, BLM's preparation costs will be included in the
costs charged for case-by-case processing. If the coal lease
[[Page 58865]]
applicant pays a third party directly for the preparation of an EIS,
for instance, these regulations do not provide that the applicant will
be reimbursed if the applicant is not the successful bidder. The coal
lease applicant will have the choice whether to pay a third party
directly for the preparation of the environmental study or to have BLM
fund the study, the cost of which, including BLM contracting costs,
will be part of the fee charged to the successful bidder.
E. Comments on Cost Recovery for Leasing of Solid Minerals Other Than
Coal
Comments received regarding leasing solid minerals other than coal
were general in nature and have been addressed in the General Comments
section earlier in this preamble.
F. Comments on Cost Recovery for Mineral Materials Sales
Most comments received regarding mineral materials sales were
general in nature and have been addressed in the General Comments
section earlier in this preamble.
One commenter inquired as to whether mineral materials free use
permits will be subject to cost recovery fees.
Under this final rule, processing fees do not apply to free use
permits issued under 43 CFR subpart 3604.
G. Comments on Cost Recovery for Mining Law Administration
A commenter suggested that the fees under part 3860 be dropped in
the final rule and that if and when patents are allowed in the future
BLM should consider cost recovery fees at that time.
BLM has established the fees relating to mineral patent
applications so that they will be in place if Congress chooses to lift
the current moratorium on issuing mineral patents.
Some commenters said they opposed the proposed fee changes because
mining claimants have a stake in the patent process and, therefore,
those who have paid for the patent process should not be charged
additional fees.
BLM disagrees that steps that an applicant must take to qualify for
a patent can substitute for BLM's recovery of its processing costs.
A commenter said the proposed rule conflicts with BLM's published
policy on when and under what circumstances a validity or common
variety mineral examination will be required.
This rule does not change the existing published policy concerning
when mineral examinations are performed. It only requires that cost
recovery be initiated if a validity or common variety mineral
examination is performed under 43 CFR 3809.100 and 3809.101.
A commenter noted that BLM recently reported to Congress that BLM
processes most PoOs within six months, with some plans taking longer to
process. The commenter suggested that, because BLM thus processes most
PoOs in an efficient manner, it is not justified in imposing cost
recovery fees. It also suggested that if BLM had needed additional
funds to process PoOs, it would have mentioned that in its report. The
commenter suggested that because most PoOs are processed within six
months, it would be reasonable and more efficient for BLM to establish
a fixed processing fee for PoOs. Based on BLM's report that it
processes most PoOs within six months and the failure of the report to
express a need for additional funds, the commenter contended that it is
inappropriate for BLM to assert in the July 2005 proposed rule a need
to increase fees. Another commenter suggested that the BLM be required
to demonstrate that the currently available fee and other subsidies are
insufficient.
BLM disagrees with the commenters. The fact that BLM reported that
it processes most PoOs within six months has no bearing on whether BLM
recovers its processing costs. Whether or not a report to Congress
stated that BLM ``needs'' additional funds in order to efficiently
process PoOs is also not a determining factor in BLM's cost recovery
effort. The report was prepared in response to a Congressional
directive to create a PoO tracking system, report on how long it took
BLM to process PoOs, and describe ways in which BLM's processing time
could improve. It was not intended to address BLM's cost recovery
efforts. As explained in the preamble to the proposed rule, the
Department's OIG has determined that BLM should be recovering the costs
included in this rule, and both the OMB, in Circular A-25, and the
Secretary of the Interior, in the Departmental Manual, have directed
that BLM should assess charges against identifiable recipients for
special benefits. That is what BLM is doing in this rule. It needs to
be recognized that PoOs that are processed within six months are those
that require only an EA, not those that require an EIS. BLM agrees that
it may be reasonable and efficient to set a fixed fee for PoOs that are
authorized under an EA. However, in this rule BLM is not charging any
fee for PoOs that are authorized under an EA. The rule imposes a fee,
on a case-by-case basis, only for PoOs that require the preparation of
an EIS. Case-by-case fees are appropriate for PoOs that require an EIS
because of the significant variability in costs that may occur in the
preparation of EISs and associated studies. We will consider whether to
propose fees for PoOs that are authorized under an EA, and may propose
a future rule on the subject.
Commenters also asserted that applicants for PoOs and other types
of applications already typically pay significant costs by hiring
third-party contractors to prepare the NEPA documentation, and often
subsidize a BLM employee or retain a contractor to work as a project
coordinator. In light of these costs already often borne by applicants,
commenters contend that companies should not be required to subsidize
additional costs, and that any additional costs should be covered by
claim location and maintenance fees.
BLM recognizes that many companies have incurred financial
expenditures related to processing PoOs. Such payments to third parties
will not be included in BLM's case-by-case fees. The fee will only
include costs that BLM incurs. BLM statutory responsibilities require
that it independently review any analysis performed by an outside
contractor. This review is an integral part of the processing required
before BLM can act on an application. It is therefore reasonable and
necessary that BLM consider the review costs in calculating its costs
for processing a document, notwithstanding that a company may have
incurred other expenses related to processing. We have addressed
earlier in this preamble the relationship between claim location and
maintenance fees and processing costs.
Another commenter was concerned that the procedure in proposed
section 3000.11(b)(2) under which BLM will not process documents until
BLM gives the applicant a written estimate of costs will not work in
situations where BLM has to begin processing an application in order to
decide whether a case-by-case fee will be imposed. The commenter used
as an example that when BLM receives a mining PoO application, it must
begin processing to determine whether an EIS is required.
The estimate that BLM provides under section 3000.11(b) precedes
any case processing. However, if the initial estimate under section
3000.11(b)(4) needs to be revised, the rule provides that BLM will re-
estimate its reasonable processing costs under section
3000.11(b)(4)(i). There is no fee in this rule for BLM's processing of
a PoO that does not require an EIS. Therefore, the processing that BLM
performs up to the point where a decision is made that an EIS will or
will not be required is not
[[Page 58866]]
charged to the applicant. In response to this and other comments, we
have stated earlier in this preamble that when a determination is made
during the processing of a PoO that an EIS is required, the processing
costs will be tracked and charged to the applicant on a case-by-case
basis only from that point forward. This same principle applies when a
fixed fee is changed to a case-by-case fee under section 3000.11(a).
A commenter said that third parties should not be permitted to
appeal a BLM cost estimate because this could be used by opponents of
the project as a delaying tactic.
It is clear from the context of the regulatory text at section
3000.11(b)(7), and confirmed by the preamble discussion in the proposed
rule at 70 FR 41536-37, that only applicants may appeal a BLM cost
estimate made under section 3000.11(b)(4).
Several commenters expressed opposition to BLM's proposed case-by-
case fees because activities associated with case-by-case fee
processing will add costs, especially when BLM has to re-evaluate cost
estimates.
BLM appreciates the commenters' concern. However, we have not made
changes to the final rule based on this comment. Means exist to keep
costs down. For instance, an applicant should submit an application as
complete as possible to allow BLM to provide an accurate initial cost
estimate and to reduce BLM's processing costs. BLM already uses an
automatic accounting system to streamline this process.
Commenters stated that a paying party should be permitted to audit
BLM's accounting in case-by-case situations.
BLM disagrees that a paying party needs to audit BLM's accounting
in case-by-case situations. The process has been set up to provide
estimates as close as possible to actual costs, with re-estimates if
BLM encounters higher or lower costs than anticipated. The applicant
may appeal BLM's estimates. The process provides that the applicant may
comment on BLM's written estimate of costs before BLM provides a final
estimate.
A commenter stated that section 3800.5 contains provisions
requiring applicants to pay for EISs and validity examinations if the
Field Office requires them, and asserted that if the application is for
a simple PoO, BLM has enough control to prevent severe environmental
degradation.
It appears that this comment addresses PoOs that do not require an
EIS. This rule does not impose cost recovery for processing PoOs that
do not require an EIS. We note that validity examinations are not
directly related to preventing severe environmental degradation.
A commenter stated that the proposed rule is inconsistent with the
Mining and Mineral Policy Act of 1970, and that BLM should demonstrate
that the proposed rule is consistent with the Act.
The Mining and Mineral Policy Act of 1970 (30 U.S.C. 21a) is a
statement of Congressional policy relating to the benefits of mineral
production to our society. BLM continues to support a healthy domestic
mining industry. This rule is not expected to affect the nation's
domestic mining industry adversely.
A commenter raised the findings of a 2001 General Accounting Office
(now the Government Accountability Office--GAO) Report titled
``Improper Charges Made to the Mining Law Administration Program''
(GAO-010356), which stated BLM employees had improperly coded various
activities to the MLAP, potentially resulting in an overcharge of about
$1.2 million. The commenter asked BLM to withdraw the fee proposals
until BLM implements appropriate training programs and provides
detailed guidance.
BLM has remedied the problems the commenter identified. In fiscal
year 2002, BLM removed all pertinent moneys from the State Offices that
had miscoded the funds and placed these moneys into a central BLM
account. BLM modernized its computer system for the field offices to
use specifically for the surface management program and provided
additional training courses at BLM's National Training Center for its
mineral specialists that work in the surface management and mineral
examination programs. In the same manner, additional training courses
were held for BLM's adjudication staff that process mining claim
documents and files.
A commenter recommended that the GAO evaluate BLM's need for cost
recovery.
As explained in the preamble to the proposed rule, OIG reports in
the 1980s and 1990s examined BLM's need for cost recovery for
processing minerals-related documents. The OIG recommended that BLM
establish and collect processing fees for all non-exempt types of
documents. We believe this independent OIG report provides a sufficient
audit of BLM activities related to minerals cost recovery. We do not
believe any further audits are necessary before BLM goes forward with
this rule.
A commenter said that an $80.00 processing fee to file a petition
for deferment is inappropriate for the time required to determine
whether an application is valid.
We disagree with the commenter's view of the work involved in
determining whether a petition meets the regulatory requirements.
Processing a petition for a deferment is time-consuming, as there are
several steps involved in processing the document, including verifying
the reason for the deferment. BLM must issue a formal decision and
properly note the official records, costing the BLM both staff time and
expenditure of operations funds.
A commenter opposed the proposed fees for non-patent validity
exams, stating that these reports are being initiated by the agency to
challenge the validity of the claim.
It is BLM's responsibility under its regulations to confirm the
validity of a claim, including making a common variety determination,
before allowing operations to proceed on withdrawn or segregated land,
and in circumstances where the mineral claimed may not be locatable.
See 43 CFR sections 3809.100 and 3809.101. The mining claimant is the
beneficiary, as the examination enables BLM to act on the application.
A commenter expressed concern that the proposed rule indicates that
BLM is going to perform mineral validity exams for most PoOs and
Notices.
As discussed earlier in this preamble, we have clarified section
3800.5 to address this concern. Nothing in this rule changes BLM's
policies on when it conducts a mineral examination.
A commenter noted that DOI published new policies on NEPA recently.
They stated that in view of these policies and procedures, if BLM
proceeds with this proposal for case-by-case fees for processing PoOs
requiring preparation of an EIS, BLM needs to ensure that it will
comply with its own policies and procedures implementing NEPA.
This rule does not affect BLM's obligation to comply with NEPA.
BLM's policies concerning NEPA compliance are controlled by the
regulations and guidelines issued by the Council on Environmental
Quality, applicable Departmental policy, and other applicable law.
A commenter questioned the interplay between the proposed rule at
section 3800.5(b) and the current regulations at section 3809.101. The
commenter stated that under the proposed rule, if the applicant
believes that uncommon variety minerals exist on its claim, it must
first pay a case-by-case processing fee to conduct a validity
examination as well as pay a processing fee on a case-by-case basis for
processing a PoO. The commenter stated that discovery of minerals
falling outside the ``common variety mineral''
[[Page 58867]]
classification should exempt the claimant from the requirement of a
validity examination, and that the final rule should clarify this
situation.
This rule does not impose a fee for processing PoOs that do not
require an EIS. BLM would require the applicant to pay a case-by-case
fee for a common variety determination under 43 CFR 3809.101 only when
a question exists as to whether the mineral to be extracted is
locatable under the Mining Law of 1872. If the claimant submits
sufficient information to BLM that the mineral material is uncommon or
that there is clearly a discovery of a valuable mineral deposit upon
the claims, then the issue may be resolved without proceeding to a
formal mineral examination. In this instance, the case-by-case cost
will be minimal.
A commenter asked BLM to provide assurances that we will not decide
that all PoOs require an EIS merely to allow BLM to recoup all its
processing costs.
BLM is not revising the existing procedures and protocols for
determining if an EIS is needed. Existing Council on Environmental
Quality, DOI, and BLM guidance determines when an EIS is required.
A commenter stated that BLM might use these new fees as an
administrative tool to drive out holders of valid existing rights under
the Mining Law.
BLM does not believe this rule will adversely affect those who hold
valid existing rights to any significant degree. The rule is not
intended to deny or extinguish prior existing rights. These fees are
set at reasonable levels based on the FLPMA Section 304(b) factors as
explained in the preamble of the proposed rule. (70 FR 41537-41543).
For a discussion of the possible impact of this rule on the validity of
mining claims, see 70 FR 41538.
A commenter stated that imposing a mineral patent adjudication fee
of $2,290 where none had been required is not reasonable. Several other
commenters objected to the fee structure proposed for mineral patent
applications, saying that a fixed fee for a patent application
regardless of the number of claims is unfair to smaller operations
involving fewer than 40 claims. Likewise, they contended that it
unfairly benefits large operators that apply for patents on large claim
blocks. The comment concluded that BLM should retain the current
``sliding scale'' fee.
In response to these comments, we amended the mining claim patent
application adjudication fee so that patent applications covering 10 or
fewer claims will be charged only half the cost recovery fee that
applications with more than 10 claims will be charged. We selected the
10-claim threshold because that is the number Congress chose to define
the class of miners who may perform assessment work in lieu of paying
the claim maintenance fee. The adjudication fee in the proposed rule
was a fixed fee based on a weighted average of BLM's adjudication
costs. We believe that the commenters may have a valid concern and that
it may be more reasonable to base the adjudication fees on the per
claim costs depending on how many claims are included in an
application. BLM plans to reassess its costs of adjudication and may
propose a revision to this fee in the future. In this final rule, we
decided that it was reasonable to phase in the adjudication fee for
patent applications that contain 10 or fewer claims. A discussion of
phasing in fees is contained in the preamble to the proposed rule at 70
FR 41533. This rule contains the first step of this phased-in fee.
A commenter said the fact that acquiring a patent is voluntary and
not required by law does not justify imposing a fee.
We agree that the mere fact that acquiring a patent is voluntary is
not a justification for requiring a processing fee. All processing fees
in this rule, including those related to patent applications, are based
on special benefits to identifiable beneficiaries beyond those provided
to the general public. BLM's review of a patent application provides a
special benefit to the applicant.
The commenter asked that the final rule clarify whether subpart
3809 notices are exempt from fees because they are not Federal actions.
Under this final rule, we are not charging fees for reviewing
notices except where a validity examination is performed. As explained
in Solicitor's Opinion M-36987 (Dec. 5, 1996) at page 25, ``[f]iling a
notice under this section triggers agency review, which provides a
special benefit to an identifiable recipient. BLM thus has authority to
recover the agency costs of processing notices * * *.'' However, under
section 3800.5(b) of the final rule, we are only exercising this
authority in the limited context of validity examinations performed in
connection with notices.
A commenter said that BLM's proposed fixed fees, such as $2,290 for
Mineral Patent Adjudication, that are not appealable violate their
right to due process, and non-appealable fees must be set at a low and
reasonable amount.
BLM disagrees that the fixed fees violate due process. The fees
were published in a proposed rule that allowed for public comment, and
this final rule, including the fixed fees, is subject to challenge. The
fee for a mineral patent adjudication is based on BLM's average costs.
In the preamble to the proposed rule, we listed the processing steps
involved in a mineral patent adjudication (70 FR 41539). As explained
earlier in this preamble, in response to other comments, we have
revised the final rule to phase in the processing fee for mineral
patent adjudications that include 10 or fewer claims.
One commenter raised a question regarding how BLM should proceed in
a specific situation in which an escrow account was set up under 43 CFR
part 3809.
The comment addressed a hypothetical factual dispute following a
specific IBLA decision and was not directly related to the processing
fees imposed by this rule.
A commenter stated that the cost recovery regulations would result
in sanctions or penalties on persons who propose mining operations
rather than charging mineral claimants for special benefits.
The fees in this rule are not penalties. They are intended to
recover BLM's reasonable costs of processing associated with special
benefits to identifiable beneficiaries and are recoverable under FLPMA
and the IOAA.
A commenter stated that most of the costs the rule would recover
are the result of laws and regulations specifically created to protect
the public. Therefore, according to the commenter, the public should be
paying these costs with their tax dollars.
As discussed earlier in this preamble, the actions for which BLM
will recover costs under this rule are undertaken as a direct result of
an application that will provide a special benefit to the applicant.
Any incidental benefit that BLM's processing actions may also provide
to the public was considered as part of BLM's consideration of the
FLPMA reasonableness factors for the fixed fees, and will be considered
on an individual basis for the case-by-case fees.
One commenter supported fee increases, saying that taxpayers should
not subsidize mining and mineral companies. The commenter also asserted
that the 1872 Mining Law should be replaced with new provisions
requiring mining companies to pay the full cost of associated expenses
when they benefit from mining activity.
This rule implements recovery of some of the costs of processing
documents associated with mineral activities on the public lands. It is
not
[[Page 58868]]
necessary to change the 1872 Mining Law to implement these cost
recovery fees.
A commenter stated that BLM should remove section 3000.11,
asserting that the inadequacy of BLM's funding should not prevent an
applicant's document from being processed.
The commenter appears to have misinterpreted section
3000.11(b)(4)(ii), which provides that if BLM determines that a case-
by-case fee will be set at an amount less than BLM's actual costs due
to the FLPMA reasonableness factors, and BLM does not have sufficient
appropriated funds available to process the document immediately, an
applicant has the option of paying BLM's actual costs (unreduced by
FLPMA factor considerations), which would enable BLM to process the
document without waiting for additional appropriated funds. If an
applicant does not wish to pay actual costs, BLM will process the
document as soon as it is able. We do not expect that this situation
will arise often. Many companies now pay actual costs for the
preparation of environmental studies in connection with an application.
We included this option to allow applicants to continue that practice
if they wish to do so.
IV. Procedural Matters
Executive Order 12866, Regulatory Planning and Review
OMB has determined that this final rule is a significant regulatory
action under Executive Order 12866. BLM has determined that the rule
will not have an annual effect on the economy of $100 million or more.
It will not adversely affect in a material way the economy, a sector of
the economy, productivity, competition, jobs, the environment, public
health or safety, or state, local, or Tribal governments or
communities. This determination is based on the analysis that BLM
prepared in conjunction with this rule. For instructions on how to view
a copy of the analysis, please contact one of the persons list under
FOR FURTHER INFORMATION CONTACT.
This rule will not create inconsistencies or otherwise interfere
with an action taken or planned by another agency. This rule does not
change the relationships of the onshore minerals programs with other
agencies' actions. These relationships are included in agreements and
memoranda of understanding that would not change with this rule.
In addition, this final rule does not materially affect the
budgetary impact of entitlements, grants, loan programs, or the rights
and obligations of their recipients. However, this rule does propose to
increase existing fees, and create new fees, for processing documents
associated with the onshore minerals programs. This occurs because of
recommendations made by the OIG (Report Nos. 89-25, 92-I-828, 95-I-379,
and 97-I-1300) as well as the IOAA, 31 U.S.C. 9701, and FLPMA, 43
U.S.C. 1734. As stated earlier in this preamble, the IOAA and Section
304 of FLPMA authorize BLM to charge applicants the cost of processing
documents. In addition, the IOAA states that these charges should cover
the agency's costs for these services to the degree practicable.
The OIG reports documented the budgetary impact of delaying
collection of fees to reimburse agency costs, and strongly admonished
BLM to collect the fees in this final rule. Finally, this rule will not
raise novel legal issues. The minerals industry may object, but the
legal issues are not novel. Circular A-25 and the Departmental Manual
require the collection of processing fees. The rule does implement new
policy for the minerals programs.
A commenter stated that the proposed rule violates Executive Order
12866 by ignoring the ``costs and benefits'' of mineral development,
such as the huge financial risk to the developer and huge benefits
these minerals provide to society.
We disagree that BLM ignored the costs and benefits of this rule.
We have estimated the cost of the rule, in the form of higher fees, to
be approximately $7 million annually. BLM has also concluded that there
would be no measurable reduction in economic activity due to these
fees. BLM also noted that by instituting cost recovery, the rule
ensures that the applicants bear the cost of processing applications,
rather than the general public. The preamble to the proposed rule
explained that waiving or reducing these fees would simply mean that
United States taxpayers would bear the costs that the applicant who
directly benefits was not bearing. The benefits to the taxpaying public
that underlie the statutory authorizations and policy mandates for cost
recovery, weighed against the costs to the applicants who benefit from
the processing activities, in light of BLM's determination that the
fees would cause no measurable reduction in economic activity, support
this final rule.
Regulatory Flexibility Act
This rule will not have a significant economic effect on a
substantial number of small entities as defined under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.). A Regulatory Flexibility
Analysis was not required. Accordingly, a Small Entity Compliance Guide
is not required.
For the purposes of this discussion, a small entity is defined by
the Small Business Administration (SBA) for mining (broadly inclusive
of metal mining, coal mining, oil and gas extraction, and the mining
and quarrying of nonmetallic minerals) as an individual, limited
partnership, or small company considered to be at arm's length from the
control of any parent companies, with fewer than 500 employees. The SBA
defines a small entity differently, however, for leasing Federal land
for coal mining: a coal lessor is a small entity if it employs not more
than 250 people, including people working for its affiliates. The SBA
would consider most of the operators that BLM works with in the onshore
minerals programs to be small entities. BLM notes that this rule does
not apply to service industries, for which the SBA has a different
definition of ``small entity.''
BLM is aware that this rule will affect a large number of small
entities since nearly all of them will face fee increases for
activities on public lands. However, we have concluded that the effects
will not be significant. As presented in the analysis prepared by BLM,
and available as an attachment to the Record of Compliance for this
final rule, except for mineral materials, when the total fee increases
paid by these entities are expressed as a percentage of their sales
value, it is clear that the relative size and effect of the fees are
very small and that the increases will have no measurable effect on
these entities. We completed a threshold analysis, which is available
for public review at the address stated under ADDRESSES. The Threshold
Analysis BLM prepared for the proposed rule of July 19, 2005, has been
updated to reflect changes made in this final rule. These included
adjusting the fixed fees and estimated case-by-case costs for
inflation, and incorporating more current firm and receipt data
published by the U.S. Bureau of Census, U.S. Minerals Management
Service, and BLM into the analysis.
In the area of mineral materials, the fee increases only apply to
exclusive mineral materials sales. The fee increases do not apply to
nonexclusive sale applications (community pits and common use areas) or
to free use permit applications. The fee increases are estimated to be
12.82 percent of the reported production value for exclusive mineral
materials sales. (In the analysis conducted for the proposed rule, we
reported the fee increases for exclusive
[[Page 58869]]
mineral materials sales to be 25.65 percent of the reported production
data for 1997. For the revised analysis for the final rule, we were
able to obtain 2002 production data. This dramatic reduction to 12.82
percent is due to the significant increase in mineral materials
production value coming from Federal lands. In 1997, mineral material
production value from Federal lands was approximately $3.6 million. For
2002, the reported production value was over $7.4 million.) Without
further analysis, this percentage might suggest the potential of a
significant impact on operators, including small entities, operating on
Federal lands. However, a number of factors mitigate this potential
impact.
The most significant factor in mitigating the potential impact of
the fee increases is that mineral materials are sold for fair market
value. To the extent the fees in the final rule increases the cost of
obtaining mineral materials from BLM, the appraised value will reflect
these higher costs. Any fee increases will be offset by lower appraised
values potentially resulting in no effect on operators, including small
entities, on Federal lands.
We note that in all areas, most of the fees are charged only once
and, generally, the impact is spread over several years of industry
production. This has the effect of lessening the impact even further.
In addition, as with mineral materials, lease sales are for fair market
value, so we can expect bonus bids to reflect the new or increased
costs.
For many document types, BLM will establish charges on a case-by-
case basis. In these situations, the applicant/operator has the
opportunity to present data to BLM on the reasonableness of the fees
using the FLPMA factors. If, for example, the entity is small and has a
small operation, the monetary value factor may cause BLM to reduce the
fee(s).
One commenter asserted that BLM's Threshold Analysis should have
looked at Internal Revenue Service (IRS) data to determine the profit
margin for different mineral sectors, which could be used to determine
the ability of small entities to pay the new fees and thus whether the
rule would have a significant impact on small entities. The commenter
requested that BLM withdraw the proposed rule and re-conduct its
Threshold Analysis.
In response to this comment, between the publication of the
proposed rule and the publication of this final rule, BLM reviewed the
most recent IRS tax return information for corporations operating
within the mining sector. The IRS data was not broken down by number of
employees and thus could not be exactly correlated with the SBA
definition of small entities. The data could, however, be analyzed on
the basis of reported assets, and we therefore evaluated that data and
compared the fee increases to reported net income by groupings based on
dollar value of assets.
The analysis we originally performed, based on a comparison of fee
increases to receipts, showed that, for all minerals areas except
mineral materials, the fee increases in this rule are less than 1% of
receipts from Federal lands. The more recent review, based on similar
IRS data, corroborates our conclusion that fees will not have a
significant impact on a substantial number of small entities. The
complete Threshold Analysis is available for public review at the
address stated under ADDRESSES. Some commenters expressed their
opposition to the proposed rule because they asserted that it would
place an unfair regulatory and financial burden on small miners. Some
commenters asserted that BLM's conclusion that the proposed rule would
not have a significant economic impact on a substantial number of small
entities was based on an inadequate, incomplete, and flawed Threshold
Analysis, and therefore a Regulatory Flexibility Analysis is required.
We have analyzed the impact of this rule on small miners involved
in the exploration and development of energy and mineral resources on
Federal lands based on the Small Business Administration's (SBA)
guidance, including SBA's definition of small entities. In the analysis
we first identified number of firms and reported receipts by firm size
(based on number of employees) for entities involved in the exploration
and extraction of energy and mineral resources in the United States.
This data enabled us to identify the number of firms that qualify as
small entities under the SBA definition and the receipts of those
firms. This national data was obtained from the most recent industrial
statistical data available from the U.S. Census Bureau (http://www.census.gov/csd/susb).
Next, we identified receipts generated from energy and mineral
extraction from Federal lands. Receipt data for leasable resources
(oil, gas, geothermal, coal, and other non-energy resources) was
obtained from the U.S. Department of the Interior, Minerals Management
Service, Minerals Revenue 2000, Report of Receipts from Federal and
Indian Leases (http://www.mrm.mms.gov/Stats/mr.htm), and Reported
Royalty Revenue Statistics for Fiscal Years 2001 through 2004. Mineral
materials sales data was obtained from the U.S. Department of the
Interior, Bureau of Land Management, Public Land Statistics, 2002,
Disposition of Mineral Materials (http://www.blm.gov/natacq/pls02/).
BLM does not systematically collect production or production value
information for mining activity authorized under the Mining Law of
1872. Thus, we relied on estimates of production value for locatable
minerals in our analysis.
Based on the national numbers of entities involved in the mining
sector and the number of those that would be classified as small
entities by SBA, we projected the percentage of revenue that would be
attributable to small entities operating on Federal lands. To measure
the annual total fee increase of the fees we relied on the increases in
the fixed fees, estimated increases for the case-by-case fees, and
projections of the annual number of filings of each type of
application. Finally, we compared these total fee increases to the
receipt information for small mining entities operating on Federal
lands.
Based on this analysis, we concluded that the impact of this rule
will not be disproportionately borne by small entities, including small
miners, and the impact of fees on small entities, as defined by the
SBA, will not have a significant impact on a substantial number of
small businesses. In addition, the economic impact of the rule is not
expected to be significant. We estimate the cost of the rule, in the
form of higher fees, will be approximately $7 million annually. Because
BLM has determined and certified that the rule will not significantly
affect a substantial number of small entities, it is not necessary to
conduct a Regulatory Flexibility Analysis.
One commenter urged BLM to establish limits on fees based on the
size of the company.
BLM's Regulatory Flexibility Analysis examined the impact of fees
on small businesses as defined by the SBA and concluded that they will
not have a significant impact on a substantial number of small
businesses. Therefore, BLM sees no need to institute separate fees
based on the size of the company. However, the fees with the highest
increases are generally those determined on a case-by-case basis. If an
entity proposes an operation that will be subject to a case-by-case
fee, the applicant will have the opportunity to request that BLM
consider a lower fee based on the applicable FLPMA factors. In
addition, for fees established on a case-by-case basis, the applicant
may appeal BLM's decision concerning the
[[Page 58870]]
fee amount if the applicant thinks it is unreasonable.
A commenter opposed BLM's statement in the preamble that ``[t]he
smaller the entity, the more likely it is that the application will
seek to patent fewer mining claims, reducing the time needed for BLM's
mineral examination.'' (70 FR 41544) The comment stated that this
indicates that BLM still does not understand the requirements of the
RFA and SBRFA, and questioned the validity of the RFA.
The statement cited in the comment was not part of BLM's Regulatory
Flexibility Act Threshold Analysis, but was included in the preamble to
the 2005 proposed rule. The statement was intended to express the
logical assumption that patent applications containing fewer claims
will most likely require less time for BLM to conduct the mineral
examination, resulting in lower mineral examination costs.
A commenter observed that the Threshold Analysis states that
``significance must be determined on a case-by-case basis. Significance
should not be viewed in absolute terms, but should be seen as relative
to the size of the business, the size of the competitor's business, and
the impact the regulation has on larger competitors.'' The commenter
submitted that BLM ignored this statement in preparing its RFA
Threshold Analysis and reached the incorrect conclusion that a
Regulatory Flexibility Analysis is not required. The commenter believes
BLM's use of production value to measure ``significance'' leads to a
flawed analysis, because all the fees in the proposed rule would be
imposed and collected many years before a small entity would realize
production value from a mine. Thus, according to the commenter,
production value is an inappropriate measure of significance, and using
production value as a ``proxy'' for a small entity's ability to pay
skews the analysis toward a finding of ``no significant impact.''
The Threshold Analysis prepared by BLM to assess the significance
of the rule on small entities does not rely on absolute terms or
values. We did estimate the fee increases in absolute terms. However,
we also compared those absolute fee increases to the firms' reported
production values. By viewing the fee increases in relation to reported
production values, by entity size, we were able to arrive at a measure
of the relative significance of the effect of the fee increases on
different size business entities.
We believe that production value is a reasonable measure of the
significance of the impact on small miners. Revenue generated from the
production of discovered resources is ultimately the source of income
for any entity to cover all of its costs, including processing fees.
While the commenter is correct that many fees must be paid well in
advance of production, in this regard fees are no different from other
costs that an entity incurs well in advance of production, such as
exploration costs and many capital costs.
A commenter stated that many individual miners or companies have
significantly fewer than 500 employees, and that BLM did not analyze
the impact of its proposed rule on what amounts to a significant
population of the U.S. mining community.
As discussed above, the Threshold Analysis differentiated between
receipt information reported for entities with fewer than 500 employees
and those entities with 500 or more employees. This is the SBA
definition of a small entity, which is the definition that BLM is
required to use in its analysis. At the recommendation of a commenter,
we also reviewed IRS net income information in the revised analysis.
However, as discussed earlier, the additional analysis is based on
entities' assets, not number of employees as required by SBA, because
of the way the IRS data was broken down. However, the subgroup of
entities with less than $500,000 in assets is likely to be the smallest
of those entities that would be classified as small entities by SBA.
The analysis of this subgroup corroborated our conclusion that fees
will not have a significant impact on a substantial number of small
entities.
A commenter suggested that BLM needs to include copper, silver,
lead, zinc, bentonite, and other locatable minerals in its Threshold
Analysis.
In our analysis, we included all locatable minerals. We did not
differentiate between industrial locatable minerals and metallic
locatable minerals, or by specific mineral or commodity. The commenter
may have been confused because we used an example that mentioned gold.
All firms exploring and developing locatable minerals will be subject
to the same fees, regardless of the mineral located.
Small Business Regulatory Enforcement Fairness Act (SBREFA)
This final rule is not a ``major rule'' as defined at 5 U.S.C.
804(2). The rule:
Will not have an annual effect on the economy greater than
$100 million;
Will not result in major cost or price increases for
consumers, industries, government agencies, or regions;
Does not have a significant adverse effect on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises.
BLM completed a Threshold Analysis for this rule, which is
available for public review at the address stated under ADDRESSES.
Unfunded Mandates Reform Act
BLM has determined that this final rule is not significant under
the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532, because it
will not result in state, local, private sector, or Tribal government
expenditures of $100 million or more in any one year. This rule will
not significantly or uniquely affect small governments. Therefore, BLM
is not required to prepare a statement containing the information
required by the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.)
Executive Order 12630, Government Actions and Interference With
Constitutionally Protected Property Rights (Takings)
The final rule does not represent a government action capable of
interfering with constitutionally protected property rights. The rule
has no bearing on property rights, but only concerns recovery of
government processing costs for actions that benefit certain entities
that acquire rights and extract publicly owned resources. Therefore,
the DOI has determined that the rule would not cause a taking of
private property or require further discussion of takings implications
under this Executive Order.
Executive Order 13132, Federalism
In accordance with Executive Order 13132, the rule does not have
significant effects on federalism, and therefore a federalism
assessment is not required. The rule does not change the role or
responsibilities between Federal, state, and local government entities.
The rule does not relate to the structure and role of states and will
not have direct, substantive, or significant effects on states. It may
result in a slight decrease in bonus bids, which BLM shares with the
states and other revenue recipients. However, the effect would be
negligible over the life of a lease.
Executive Order 13175, Consultation and Coordination With Indian Tribal
Governments
In accordance with Executive Order 13175, BLM has determined that
this final rule does not include policies that have Tribal
implications. A key factor is whether the rule has substantial direct
[[Page 58871]]
effects on one or more Indian Tribes. BLM has not found any substantial
direct effects. Consequently, BLM did not utilize the consultation
process set forth in section 5 of the Executive Order.
Executive Order 12988, Civil Justice Reform
In accordance with Executive Order 12988, BLM finds that this rule
does not unduly burden the judicial system and meets the requirements
of sections 3(a) and 3(b)(2) of the Order.
A few commenters expressed concern that the rule will unduly burden
the judicial system contrary to Executive Order 12988. They said there
would be an increase in IBLA appeals based on the increased case-by-
case fees, such as fees associated with validity exams.
Executive Order 12988 does not apply to administrative appeals to
the IBLA. Moreover, BLM does not believe that the rule will result in a
significant increased burden on the judicial system. Although there is
the possibility that appeals to IBLA will increase, especially during
early implementation of the final rule, the potential number of
administrative appeals does not justify removing case-by-case fees from
the rule.
Paperwork Reduction Act
This rule does not contain information collection requirements that
OMB must approve at this time under the Paperwork Reduction Act of
1995, 44 U.S.C. 3501 et seq. This rule potentially affects the
following information requirements approved under the provisions of the
Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq.:
1004-0025, Mineral Surveys, Mineral Patent Applications, Adverse
Claims, Protests, and Contests;
1004-0034, Oil and Gas Lease Transfers;
1004-0073, Coal Management;
1004-0074, Oil and Gas and Geothermal Resources Leasing;
1004-0103, Mineral Materials Disposal;
1004-0114, Payment and Recordation of Location Notices and Annual
Filings for Mining Claims, Mill Sites, Tunnel Sites;
1004-0121, Leasing of Solid Minerals Other Than Coal and Oil Shale;
1004-0132, Geothermal Leasing Reports and Resources Leasing and
Drilling Operations;
1004-0137, Requirements for Operating Rights Owners and Operators;
1004-0169, Use and Occupancy;
1004-0185, Oil and Gas Exploration, Leasing, and Drainage
Operations; and
1004-0194, Surface Management Activities Under the General Mining
Law.
This rule affects the information collections just listed not by
decreasing or increasing the information requirements described in
these collections, but by establishing or changing the costs of filing
the applications and reports included in these collections. BLM will
file change notices with OMB to reflect the new or changed fees
established by the final rule.
National Environmental Policy Act
BLM has determined that this rule is administrative and involves
only procedural changes addressing fee requirements. Therefore, it is
categorically excluded from environmental review under Section
102(2)(C) of NEPA, pursuant to 516 Departmental Manual (DM) 2.3A and
516 DM 2, Appendix 1, Item 1.10.
In addition, the rule does not meet any of the 10 criteria for
exceptions to categorical exclusions listed in 516 DM 2, Appendix 2.
Pursuant to Council on Environmental Quality regulations (40 CFR
1508.4) and the environmental policies and procedures of DOI, the term
``categorical exclusions'' means categories of actions which do not
individually or cumulatively have a significant effect on the human
environment and which have been found to have no such effect in
procedures adopted by a Federal agency and therefore require neither an
EA nor an EIS.
Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
In accordance with Executive Order 13211, BLM finds that this final
rule is not likely to have a significant adverse effect on the supply,
distribution, or use of energy. The distribution of or use of energy
would not be unduly affected by this rule.
Several commenters asserted that the proposed regulation is
contrary to Executive Order 13211 because the added financial
disincentives could severely affect the supply and distribution of oil
and gas, coal, and other energy resources. Some commenters said the
proposed rule conflicts with E.O. 13211 because implementing these fee
increases would delay energy projects. Another commenter said that E.O.
13211 requires BLM to prepare statements of Adverse Energy Effects.
BLM disagrees. E.O. 13211 requires a Statement of Energy Effects
for those matters identified as significant energy actions. The Order
defines a significant energy action as one that is (1) both a
significant regulatory action under E.O. 12866 and likely to have a
significant adverse effect on the supply, distribution, or use of
energy, or (2) designated by the Administrator of the Office of
Information and Regulatory Affairs (OIRA) as a significant energy
action.
This rule meets neither of those criteria. It has not been
designated by OIRA as a significant energy action. Nor is it likely to
have a significant adverse effect on the supply, distribution, or use
of energy. As discussed earlier in this preamble and in greater detail
in the Regulatory Flexibility Act Threshold Analysis prepared in
connection with this rule, any financial disincentives from this rule
will be very small. Given the relatively high economic value associated
with the various energy and mineral filings affected by this rule, we
do not expect that the fees in this rule will cause an entity to cease
or significantly alter its operations. Nor do we expect the fees to
delay energy projects. The procedures in the rule for case-by-case fees
provide that projects can move forward even while a fee is being
revised or appealed.
Executive Order 13352, Facilitation of Cooperative Conservation
In accordance with E.O. 13352, BLM has determined that this rule is
purely administrative and does not affect cooperative conservation.
This rule takes appropriate account of and considers the interests of
persons with ownership or other legally recognized interests in land or
other natural resources because it does not interfere with such
interests. It is solely a Federal responsibility not involving state or
local participation, and has no impact on public health and safety.
Authors
The principal authors of this final rule are: William Gewecke,
Gordon Hansen, Paul McNutt, Roger Haskins, and Stephen Salzman of the
Fluid and Solid Minerals Groups, assisted by the Regulatory Affairs
Group, Bureau of Land Management, DOI, and the Office of the Solicitor,
DOI.
List of Subjects
43 CFR Part 3000
Public lands--mineral resources, Reporting and recordkeeping
requirements.
43 CFR Part 3100
Government contracts, Mineral royalties, Oil and gas exploration,
[[Page 58872]]
Public lands--mineral resources, Reporting and recordkeeping
requirements, Surety bonds.
43 CFR Part 3110
Government contracts, Oil and gas exploration, Public lands--
mineral resources, Reporting and recordkeeping requirements.
43 CFR Part 3120
Government contracts, Mineral royalties, Oil and gas exploration,
Public lands--mineral resources, Reporting and recordkeeping
requirements.
43 CFR Part 3130
Alaska, Government contracts, Oil and gas exploration, Oil and gas
reserves, Public lands--mineral resources, Reporting and recordkeeping
requirements, Surety bonds.
43 CFR Part 3200
Environmental protection, Geothermal energy, Government contracts,
Mineral royalties, Public lands--mineral resources, Reporting and
recordkeeping requirements, Surety bonds.
43 CFR Part 3470
Coal, Government contracts, Mineral royalties, Mines, Public
lands--mineral resources, Reporting and recordkeeping requirements,
Surety bonds.
43 CFR Part 3500
Government contracts, Hydrocarbons, Mineral royalties, Mines,
Phosphate, Potassium, Public lands--mineral resources, Reporting and
recordkeeping requirements, Sodium, Sulfur, Surety bonds.
43 CFR Part 3600
Public lands--mineral resources, Reporting and recordkeeping
requirements.
43 CFR Part 3800
Administrative practice and procedure, Environmental protection,
Intergovernmental relations, Mines, Public lands--mineral resources,
Reporting and recordkeeping requirements, Surety bonds, Wilderness
areas.
43 CFR Part 3830
Mineral royalties, Mines, Public lands--mineral resources,
Reporting and recordkeeping requirements.
43 CFR Part 3833
Mines, Public lands--mineral resources, Reporting and recordkeeping
requirements.
43 CFR Part 3835
Mines, Public lands--mineral resources, Reporting and recordkeeping
requirements.
43 CFR Part 3836
Mines, Public lands--mineral resources, Reporting and recordkeeping
requirements.
43 CFR Part 3860
Mines, Public lands--mineral resources, Reporting and recordkeeping
requirements.
43 CFR Part 3870
Public lands--mineral resources, Adverse claims, Reporting and
recordkeeping requirements.
Dated: September 15, 2005.
Chad Calvert,
Acting Assistant Secretary, Land and Minerals Management.
0
Accordingly, for the reasons stated in the preamble and the authorities
stated below BLM amends parts 3000, 3100, 3110, 3120, 3130, 3200, 3470,
3500, 3600, 3800, 3830, 3833, 3835, 3836, 3860, and 3870 of Title 43 of
the Code of Federal Regulations as set forth below:
Subchapter C--Minerals Management (3000)
PART 3000--MINERALS MANAGEMENT GENERAL
0
1. Revise the authority citation for part 3000 to read as follows:
Authority: 16 U.S.C. 3101 et seq.; 30 U.S.C. 181 et seq., 301-
306, 351-359, and 601 et seq.; 31 U.S.C. 9701; 40 U.S.C. 471 et
seq.; 42 U.S.C. 6508; 43 U.S.C. 1701 et seq.; and Pub. L. 97-35, 95
Stat. 357.
Subpart 3000--General
0
2. Add Sec. 3000.10 to read as follows:
Sec. 3000.10 What do I need to know about fees in general?
(a) Setting fees. Fees may be statutorily set fees, relatively
nominal filing fees, or processing fees intended to reimburse BLM for
its reasonable processing costs. For processing fees, BLM takes into
account the factors in Section 304 (b) of the Federal Land Policy and
Management Act of 1976 (FLPMA) (43 U.S.C. 1734(b)) before deciding a
fee. BLM considers the factors for each type of document when the
processing fee is a fixed fee and for each individual document when the
fee is decided on a case-by-case basis, as explained in Sec. 3000.11.
(b) Conditions for filing. BLM will not accept a document that you
submit without the proper filing or processing fee amounts except for
documents where BLM sets the fee on a case-by-case basis. Fees are not
refundable except as provided for case-by-case fees in Sec. 3000.11.
BLM will keep your fixed filing or processing fee as a service charge
even if we do not approve your application or you withdraw it
completely or partially.
(c) Periodic adjustment. We will periodically adjust fees
established in this subchapter according to change in the Implicit
Price Deflator for Gross Domestic Product, which is published annually
by the U.S. Department of Commerce for the previous year. Because the
fee recalculations are simply based on a mathematical formula, we will
change the fees in final rules without opportunity for notice and
comment.
(d) Timing of fee applicability. (1) For a document BLM receives
before November 7, 2005, we will not charge a fixed fee or a case-by-
case fee under this subchapter for processing that document, except for
fees applicable under then-existing regulations.
(2) For a document BLM receives on or after November 7, 2005, you
must include required fixed fees with documents you file, as provided
in Sec. 3000.12(a) of this chapter, and you are subject to case-by-
case processing fees as provided in Sec. 3000.11 of this chapter and
under other provisions of this chapter.
0
3. Add Sec. 3000.11 to read as follows:
Sec. 3000.11 When and how does BLM charge me processing fees on a
case-by-case basis?
(a) Fees in this subchapter are designated either as case-by-case
fees or as fixed fees. The fixed fees are established in this
subchapter for specified types of documents. However, if BLM decides at
any time that a particular document designated for a fixed fee will
have a unique processing cost, such as the preparation of an
Environmental Impact Statement, we may set the fee under the case-by-
case procedures in this section.
(b) For case-by-case fees, BLM measures the ongoing processing cost
for each individual document and considers the factors in Section
304(b) of FLPMA on a case-by-case basis according to the following
procedures:
(1) You may ask BLM's approval to do all or part of any study or
other activity according to standards BLM specifies, thereby reducing
BLM's costs for processing your document.
(2) Before performing any case processing, we will give you a
written estimate of the proposed fee for reasonable processing costs
after we
[[Page 58873]]
consider the FLPMA Section 304(b) factors.
(3) You may comment on the proposed fee.
(4) We will then give you the final estimate of the processing fee
amount after considering your comments and any BLM-approved work you
will do.
(i) If we encounter higher or lower processing costs than
anticipated, we will re-estimate our reasonable processing costs
following the procedure in paragraphs (b)(1), (b)(2), (b)(3) and (b)(4)
of this section, but we will not stop ongoing processing unless you do
not pay in accordance with paragraph (b)(5) of this section.
(ii) If the fee you would pay under this paragraph (b)(4) is less
than BLM's actual costs as a result of consideration of the FLPMA
Section 304(b) factors, and we are not able to process your document
promptly because of the unavailability of funding or other resources,
you will have the option to pay BLM's actual costs to process your
document. This will enable BLM to process your document sooner.
(iii) Once processing is complete, we will refund to you any money
that we did not spend on processing costs.
(5)(i) We will periodically estimate what our reasonable processing
costs will be for a specific period and will bill you for that period.
Payment is due to BLM 30 days after you receive your bill. BLM will
stop processing your document if you do not pay the bill by the date
payment is due.
(ii) If a periodic payment turns out to be more or less than BLM's
reasonable processing costs for the period, we will adjust the next
billing accordingly or make a refund. Do not deduct any amount from a
payment without our prior written approval.
(6) You must pay the entire fee before we will issue the final
document.
(7) You may appeal BLM's estimated processing costs in accordance
with the regulations in part 4, subpart E, of this title. You may also
appeal any determination BLM makes under paragraph (a) of this section
that a document designated for a fixed fee will be processed as a case-
by-case fee. We will not process the document further until the appeal
is resolved, in accordance with paragraph (b)(5)(i) of this section,
unless you pay the fee under protest while the appeal is pending. If
the appeal results in a decision changing the proposed fee, we will
adjust the fee in accordance with paragraph (b)(5)(ii) of this section.
0
4. Add Sec. 3000.12 to read as follows:
Sec. 3000.12 What is the fee schedule for fixed fees?
(a) The table in this section shows the fixed fees that you must
pay to BLM for the services listed for Fiscal Year 2006. These fees are
nonrefundable and must be included with documents you file under this
chapter. Fees will be adjusted annually according to the change in the
Implicit Price Deflator for Gross Domestic Product (IPD-GDP) by way of
publication of a final rule in the Federal Register, and will
subsequently be posted on the BLM Web site (http://www.blm.gov) before
October 1 each year. Revised fees are effective each year on October 1.
FY 2006 Processing Fee Table
------------------------------------------------------------------------
Document/action Fee
------------------------------------------------------------------------
Oil and Gas (Parts 3100, 3110, 3120, 3130):
Noncompetitive lease application....... $335
Competitive lease application.......... 130
Assignment and transfer................ 75
Overriding royalty transfer, payment 10
out of production.
Name change, corporate merger, or 175
transfer to heir/devisee.
Leases consolidation................... 370
Lease renewal or exchange.............. 335
Lease reinstatement, Class I........... 65
Leasing under right-of-way............. 335
Geothermal (Part 3200):
Noncompetitive lease application....... 335
Competitive lease application.......... 130
Assignment and transfer of record title 75
or operating right.
Name change, corporate merger or 175
transfer to heir/devisee.
Lease consolidation.................... 370
Lease reinstatement.................... 65
Coal (Parts 3400, 3470):
License to mine application............ 10
Exploration license application........ 275
Lease or lease interest transfer....... 55
Leasing of Solid Minerals Other Than Coal
and Oil Shale (Part 3500):
Applications other than those listed 30
below.
Prospecting permit application 55
amendment.
Extension of prospecting permit........ 90
Lease renewal.......................... 430
Mining Law Administration (Parts 3800,
3830, 3850, 3860, 3870)
Notice of Location *................... 15
Amendment of location.................. 10
Transfer of mining claim/site.......... 10
Recording an annual FLPMA filing (Sec. 10
3835.30).
Deferment of Assessment Work........... 90
Mineral Patent Adjudication............ 2,520 (more than 10 claims)
1,260 (10 or fewer claims)
Adverse claim.......................... 90
Protest................................ 55
------------------------------------------------------------------------
* The existing fee for recording a mining claim or site location (43 CFR
3833) is a total of $165. This includes the initial maintenance fee of
$125 and one-time $30 location fee required by Statute and a $10
service charge. The service charge would become a processing fee and
would increase to $15 under in the final rule making the total fee
$170.
[[Page 58874]]
(b) The amount of a fixed fee is not subject to appeal to the
Interior Board of Land Appeals pursuant to part 4, subpart E, of this
title.
PART 3100--OIL AND GAS LEASING
0
5. Revise the authority citation for part 3100 to read as follows:
Authority: 30 U.S.C. 181 et seq. and 351-359; and 43 U.S.C. 1701
et seq.
Subpart 3105--Cooperative Conservation Provisions
0
6. Amend Sec. 3105.6 by revising the first sentence and adding a new
sentence after the first sentence to read as follows:
Sec. 3105.6 Consolidation of leases.
BLM may approve consolidation of leases if we determine that there
is sufficient justification and it is in the public interest. Each
application for a consolidation of leases must include payment of the
processing fee found in the fee schedule in Sec. 3000.12 of this
chapter. * * *
Subpart 3106--Transfers by Assignment, Sublease, or Otherwise
0
7. Revise Sec. 3106.3 to read as follows:
Sec. 3106.3 Fees.
Each transfer of record title or of operating rights (sublease) for
each lease must include payment of the processing fee for assignments
and transfers found in the fee schedule in Sec. 3000.12 of this
chapter. Each request for a transfer to an heir or devisee, request for
a change of name, or notification of a corporate merger under Sec.
3106.8, must include payment of the processing fee for name changes,
corporate mergers or transfers to heir/devisee found in the fee
schedule in Sec. 3000.12 of this chapter. Each transfer of overriding
royalty or payment out of production must include payment of the
processing fee for overriding royalty transfers or payments out of
productions found in the fee schedule in Sec. 3000.12 of this chapter
for each lease to which it applies.
0
8. Amend Sec. 3106.4-3 by revising paragraph (d) to read as follows:
Sec. 3106.4-3 Mass transfers.
* * * * *
(d) Include with your mass transfer the processing fee for
assignments and transfers found in the fee schedule in Sec. 3000.12 of
this chapter for each such interest transferred for each lease.
0
9. Amend Sec. 3106.8-1(a) by removing the second sentence ``No filing
fee is required.'' and adding in its place a new sentence to read as
follows:
Sec. 3106.8-1 Heirs and devisees.
(a) * * * Include the processing fee for transfers to heir/devisee
found in the fee schedule in Sec. 3000.12 of this chapter with your
request to transfer lease rights. * * *
* * * * *
0
10. Amend Sec. 3106.8-2 by removing the second sentence ``No filing
fee is required.'' and adding in its place a new sentence to read as
follows:
Sec. 3106.8-2 Change of name.
* * * Include the processing fee for name change found in the fee
schedule in Sec. 3000.12 of this chapter with your notice of name
change. * * *
0
11. Amend Sec. 3106.8-3 by removing the third sentence ``No filing fee
is required.'' and adding in its place a new sentence to read as
follows:
Sec. 3106.8-3 Corporate merger.
* * * Include the processing fee for corporate merger found in the
fee schedule in Sec. 3000.12 of this chapter with your notification of
a corporate merger.* * *
Subpart 3107--Continuation, Extension or Renewal
0
12. Amend Sec. 3107.7 by removing the third sentence and adding in its
place two new sentences to read as follows:
Sec. 3107.7 Exchange leases: 20-year term.
* * * The lessee must file an application to exchange a lease for a
new lease, in triplicate, at the proper BLM office. The application
must show full compliance by the applicant with the terms of the lease
and applicable regulations, and must include payment of the processing
fee for lease renewal or exchange found in the fee schedule in Sec.
3000.12 of this chapter. * * *
0
13. Revise Sec. 3107.8-2 to read as follows:
Sec. 3107.8-2 Application.
File your application to renew your lease in triplicate in the
proper BLM office at least 90 days, but not more than 6 months, before
your lease expires. Include the processing fee for lease renewal or
exchange found in the fee schedule in Sec. 3000.12 of this chapter.
Subpart 3108--Relinquishment, Termination, Cancellation
0
14. Amend Sec. 3108.2-2(a) by revising the first sentence of paragraph
(a) (3) to read as follows:
Sec. 3108.2-2 Reinstatement at existing rental and royalty rates:
Class I reinstatements.
(a) * * *
(3) A petition for reinstatement, the processing fee for lease
reinstatement, Class I, found in the fee schedule in Sec. 3000.12 of
this chapter, and the required rental, including any back rental that
has accrued from the date of the termination of the lease, are filed
with the proper BLM office within 60 days after receipt of Notice of
Termination of Lease due to late payment of rental. * * *
* * * * *
Subpart 3109--Leasing Under Special Acts
0
15. Revise Sec. 3109.1-2 by removing the first three sentences and
adding in their place four new sentences to read as follows:
Sec. 3109.1-2 Application.
No approved form is required for an application to lease oil and
gas deposits underlying a right-of-way. The right-of-way owner or his/
her transferee must file the application in the proper BLM office.
Include the processing fee for leasing under right-of-way found in the
fee schedule in Sec. 3000.12 of this chapter. If the transferee files
an application, it must also include an executed transfer of the right
to obtain a lease. * * *
PART 3110--NONCOMPETITIVE LEASES
0
16. Revise the authority citation for part 3110 to read as follows:
Authority: 16 U.S.C. 3101 et seq.; 30 U.S.C. 181 et seq. and
351-359; 31 U.S.C. 9701; 43 U.S.C. 1701 et seq.; and Pub. L. 97-35,
95 Stat. 357.
Subpart 3110--Noncompetitive Leases
0
17. Amend Sec. 3110.4(a) by revising the fourth and sixth sentences to
read as follows:
Sec. 3110.4 Requirements for offer.
(a) * * * The original copy of each offer must be typed or printed
plainly in ink, signed in ink and dated by the offeror or an authorized
agent, and must include payment of the first year's rental and the
processing fee for noncompetitive lease applications found in the fee
schedule in Sec. 3000.12 of this chapter.
* * * A noncompetitive offer to lease a future interest applied for
under Sec. 3110.9 must include the processing fee for noncompetitive
lease applications found in the fee schedule in Sec. 3000.12 of this
chapter. * * *
* * * * *
PART 3120--COMPETITIVE LEASES
0
18. Revise the authority citation for part 3120 to read as follows:
[[Page 58875]]
Authority: 16 U.S.C. 3101 et seq.; 30 U.S.C. 181 et seq. and
351-359; 40 U.S.C. 471 et seq.; 43 U.S.C. 1701 et seq.; and the
Attorney General's Opinion of April 2, 1941 (40 Op. Atty. Gen. 41).
0
19. Amend Sec. 3120.5-2 by revising paragraph (b)(3) to read as
follows:
Sec. 3120.5-2 Payments required.
* * * * *
(b) * * *
(3) The processing fee for competitive lease applications found in
the fee schedule in Sec. 3000.12 of this chapter for each parcel.
* * * * *
PART 3130--OIL AND GAS LEASING; NATIONAL PETROLEUM RESERVE, ALASKA
0
20. Revise the authority citation for part 3130 to read as follows:
Authority: 42 U.S.C. 6508 and 43 U.S.C.1701 et seq.
0
21. Amend Sec. 3132.3(a) by revising the first sentence and adding a
new sentence after the first sentence to read as follows:
Sec. 3132.3 Payments.
(a) Make payments of bonuses, including deferred bonuses, first
year's rental, other payments due upon lease issuance, and fees, to
BLM's Alaska State Office. Before we issue a lease, the highest bidder
must pay the processing fee for competitive lease applications found in
the fee schedule in Sec. 3000.12 of this chapter in addition to other
remaining bonus and rental payments. * * *
* * * * *
Subpart 3135--Transfers, Extensions, Consolidations, and
Suspensions
0
22. Amend Sec. 3135.1-2(a) (2) by revising the first two sentences to
read as follows:
Sec. 3135.1-2 Requirements for filing of transfers.
* * * * *
(a)(1) * * *
(2) An application for approval of any instrument that the
regulations require you to file must include the processing fee for
assignments and transfers found in the fee schedule in Sec. 3000.12 of
this chapter. Any document that the regulations in this part do not
require you to file, but that you submit for record purposes, must also
include the processing fee for assignments and transfers found in the
fee schedule in Sec. 3000.12 of this chapter for each lease affected.
* * *
* * * * *
0
23. Amend Sec. 3135.1-6(a) by adding a sentence at the end to read as
follows:
Sec. 3135.1-6 Consolidation of leases.
(a) * * * Include with each request for a consolidation of leases
the processing fee found in the fee schedule in Sec. 3000.12 of this
chapter.
* * * * *
PART 3200--GEOTHERMAL RESOURCE LEASING
0
24. Revise the authority citation for part 3200 to read as follows:
Authority: 30 U.S.C. 1001-1028; and 43 U.S.C. 1701 et seq.
Subpart 3204--Noncompetitive Leasing
0
25. Amend Sec. 3204.12 by revising the first sentence to read as
follows:
Sec. 3204.12 What fees must I pay with my lease offer?
Submit the processing fee for noncompetitive lease applications
found in the fee schedule in Sec. 3000.12 of this chapter for each
lease offer, and an advance rent in the amount of $1 per acre (or
fraction of an acre). * * *
Subpart 3205--Competitive Leasing
0
26. Amend Sec. 3205.16(a) by removing the word ``and'' at the end of
paragraph (a)(3), redesignating paragraph (a)(4) as paragraph (a)(5),
and adding a new paragraph (a)(4) to read as follows:
Sec. 3205.16 How will I know whether my bid is accepted?
(a) * * *
(3) The first year's advance rent;
(4) The processing fee for competitive lease applications found in
the fee schedule in Sec. 3000.12 of this chapter; and
* * * * *
Subpart 3210--Additional Lease Information
0
27. Amend Sec. 3210.12 by adding a new sentence at the end of the
section to read as follows:
Sec. 3210.12 May I consolidate leases?
* * * You must include the processing fee for lease consolidations
found in the fee schedule in Sec. 3000.12 of this chapter with your
request to consolidate leases.
Subpart 3211--Fees, Rent, and Royalties
0
28. Amend Sec. 3211.10 by:
0
A. Revising the section heading;
0
B. Revising paragraph (b) introductory text;
0
C. Revising paragraph (b) table heading and entries (1) and (3);
0
D. In paragraph (b), redesignate the table entries (4) through (9) as
(5) through (10); and add a new table entry (4).
The revisions and addition read as follows:
Sec. 3211.10 What are the fees, rent, and minimum royalties for
leases?
* * * * *
(b) Use the following table to determine the fees, rents, and
minimum royalties owed for your lease:
Fees, Rent, and Royalties
------------------------------------------------------------------------
Noncompetitive
Type Competitive leases leases
------------------------------------------------------------------------
1. Lease Application As found in the the As found in the fee
Processing fee. fee schedule in schedule in Sec.
Sec. 3000.12 of 3000.12 of this
this chapter. chapter. (includes
future interest
leases)
* * * * * * *
3. Transfer of Record Title As found in the fee As found in the fee
or Operating Rights. schedule in Sec. schedule in Sec.
3000.12 of this 3000.12 of this
chapter. chapter.
4. Transfer of Interest to As found in the fee As found in the fee
Heir or Devisee, Name schedule in Sec. schedule in Sec.
Change, or Notification 3000.12 of this 3000.12 of this
Corporate Merger. chapter. chapter.
------------------------------------------------------------------------
[[Page 58876]]
* * * * *
Subpart 3213--Relinquishment, Termination, Cancellation, and
Expiration
0
29. Revise Sec. 3213.19 to read as follows:
Sec. 3213.19 What must I do to have my lease reinstated?
Send BLM a petition requesting reinstatement. Your petition must
include the serial number for each lease and an explanation of why the
delay in payment was justifiable. Lack of diligence on your part is not
a justification for delaying payment. In addition to your petition, you
must also include any past rent owed, any rent that has accrued from
the termination date, and the processing fee for lease reinstatement
found in the fee schedule in Sec. 3000.12 of this chapter.
Subpart 3216--Transfers
0
30. Revise Sec. 3216.14 to read as follows:
Sec. 3216.14 What fees and forms does a transfer require?
With each transfer request send us the correct form, if required,
and pay the transfer processing fee found in the fee schedule in Sec.
3000.12 of this chapter. When you calculate your fee, make sure it
covers the full amount. For example, if you are transferring record
title for three leases, submit 3 times the listed fee with the
application. Use the following chart to determine forms and fees:
----------------------------------------------------------------------------------------------------------------
Specific form Transfer fee (per
Type of form required Form No. Number of copies lease)
----------------------------------------------------------------------------------------------------------------
(a) Record title.................. Yes............... 3000-3 2 executed copies.... As found in the fee
schedule in Sec.
3000.12 of this
chapter.
(b) Operating rights.............. Yes............... 3000-3(a) 2 executed copies.... As found in the fee
schedule in Sec.
3000.12 of this
chapter.
(c) Estate transfers.............. No................ N/A 1 List of Leases..... As found in the fee
schedule in Sec.
3000.12 of this
chapter.
(d) Corporate mergers............. No................ N/A 1 List of Leases..... As found in the fee
schedule in Sec.
3000.12 of this
chapter.
(e) Name changes.................. No................ N/A 1 List of Leases..... As found in the fee
schedule in Sec.
3000.12 of this
chapter.
----------------------------------------------------------------------------------------------------------------
Group 3400--Coal Management
PART 3470--COAL MANAGEMENT PROVISIONS AND LIMITATIONS
0
31. Revise the authority citation for part 3470 to read as follows:
Authority: 30 U.S.C. 189 and 359; and 43 U.S.C. 1701 et seq.
Subpart 3473--Fees, Rentals, and Royalties
0
32. Revise Sec. 3473.2 to read as follows:
Sec. 3473.2 Fees.
(a) An application for a license to mine must include payment of
the filing fee found in the fee schedule in Sec. 3000.12 of this
chapter. BLM may waive the filing fee for applications filed by relief
agencies as provided in Sec. 3440.1-1(b) of this chapter.
(b) An application for an exploration license must include payment
of the filing fee found in the fee schedule in Sec. 3000.12 of this
chapter.
(c) An instrument of transfer of a lease or an interest in a lease
must include payment of the filing fee found in the fee schedule in
Sec. 3000.12 of this chapter.
(d) BLM will charge applicants for a royalty rate reduction a
processing fee on a case-by-case basis as described in Sec. 3000.11 of
this chapter.
(e) BLM will charge applicants for logical mining unit formation or
modification a processing fee on a case-by-case basis as described in
Sec. 3000.11 of this chapter.
(f) The applicant who nominates a tract for a competitive lease
sale must pay a processing fee on a case-by-case basis as described in
Sec. 3000.11 of this chapter as modified by the provisions below. BLM
will include in the sale notice under Sec. 3422.2(b)(9) of this
chapter a statement of the total cost recovery fee paid to BLM by the
applicant up to 30 days before the competitive lease sale. The cost
recovery process for a competitive coal lease follows:
(1) The applicant nominating the tract for competitive leasing must
pay the cost recovery amount before BLM will publish a notice of the
competitive lease sale;
(2) Before the lease is issued:
(i) The successful bidder, if someone other than the applicant,
must pay to BLM the cost recovery amount specified in the sale notice;
and
(ii) The successful bidder must pay all processing costs BLM incurs
after the date of the sale notice;
(3) If the successful bidder is someone other than the applicant,
BLM will refund to the applicant the amount paid under paragraph (f)(1)
of this section; and
(4) If there is no successful bidder, the applicant remains
responsible for all processing fees.
(g) BLM will charge applicants for modification of a coal lease a
processing fee on a case-by-case basis as described in Sec. 3000.11 of
this chapter.
Sec. Sec. 3473.2-1 and 3473.2-2 [Removed]
0
33. Remove Sec. Sec. 3473.2-1 and 3473.2-2.
PART 3500--LEASING OF SOLID MINERALS OTHER THAN COAL AND OIL SHALE
0
34. Revise the authority citation for part 3500 to read as follows:
Authority: 5 U.S.C. 552; 30 U.S.C. 189 and 192c; 43 U.S.C. 1701
et seq.; and sec. 402, Reorganization Plan No. 3 of 1946 (5 U.S.C.
appendix).
Subpart 3501--Leasing of Solid Minerals Other Than Coal and Oil
Shale: General
0
34. Amend Sec. 3501.1(e) by adding a new first sentence to read as
follows:
Sec. 3501.1 What is the authority for this part?
* * * * *
(e) * * * Section 304 of FLPMA (43 U.S.C. 1734) authorizes the
Secretary to establish reasonable filing and service fees for
applications and other documents relating to the public lands. * * *
* * * * *
Subpart 3504--Fees, Rental, Royalty, and Bonds
0
35. Add Sec. 3504.10 to read as follows:
[[Page 58877]]
Sec. 3504.10 What fees must I pay?
(a) Filing fees. Include the filing fee for ``applications other
than those listed below'' found in the fee schedule in Sec. 3000.12 of
this chapter with each application you submit to BLM that is not
charged a processing fee as described in paragraph (b) of this section
(for example, transfers, assignments, and subleases). Fees for
exploration licenses are not administered under this section, but are
administered under part 2920 of this chapter.
(b) Processing fees. The following table shows processing fees for
various documents.
------------------------------------------------------------------------
Document Processing fee
------------------------------------------------------------------------
(1) Prospecting permit application..... Case-by-case basis as described
in Sec. 3000.11 of this
chapter.
(2) Prospecting permit application As found in the fee schedule in
amendment. Sec. 3000.12 of this
chapter.
(3) Prospecting permit extension....... As found in the fee schedule in
Sec. 3000.12 of this
chapter.
(4) Preference rigth lease application. Case-by-case basis as described
in Sec. 3000.11 of this
chapter.
(5) Successful competitive lease Case-by-case basis as described
application. in Sec. 3000.11 of this
chapter, and modified by Sec.
Sec. 3508.14 and 3508.21.
(6) Lease renewal application.......... As found in the fee schedule in
Sec. 3000.12 of this
chapter.
(7) Application to waive, suspend, or Case-by-case basis as described
reduce your rental, minimum royalty, in Sec. 3000.11 of this
or royalty rate. chapter.
(8) Future or fractional interest lease Case-by-case basis as described
application. in Sec. 3000.11 of this
chapter.
------------------------------------------------------------------------
0
36. Amend Sec. 3504.12 by revising the heading and paragraph (a) to
read as follows:
Sec. 3504.12 What payments do I submit to BLM and what payments do I
submit to MMS?
(a) Fees and rentals. (1) Pay all filing and processing fees, all
first-year rentals, and all bonus bids for leases to the BLM State
Office that manages the lands you are interested in. Make your
instruments payable to the U.S. Department of the Interior--Bureau of
Land Management.
(2) Pay all second-year and subsequent rentals and all other
payments for leases to the Minerals Management Service (MMS). See 30
CFR part 218 for MMS's payment procedures.
* * * * *
Subpart 3505--Prospecting Permits
0
37. Revise Sec. 3505.12 to read as follows:
Sec. 3505.12 How do I obtain a prospecting permit?
Deliver 3 copies of the BLM application form to the BLM office with
jurisdiction over the lands you are interested in. Include the first
year's rental with your application. You will also be charged a
processing fee, which BLM will determine on a case-by-case basis as
described in Sec. 3000.11 of this chapter. For more information on
fees and rentals, see subpart 3504 of this part.
0
38. Amend Sec. 3505.30 by removing the last sentence and by revising
the third sentence to read as follows:
Sec. 3505.30 May I amend or change my application after I file it?
* * * You must include the rental for any added lands and the
processing fee for prospecting permit application amendments found in
the fee schedule in Sec. 3000.12 of this chapter with your amended
application.
0
39. Amend Sec. 3505.31 by revising the last sentence to read as
follows:
Sec. 3505.31 May I withdraw my application after I file it?
* * * BLM will retain any fees already paid for processing the
application.
0
40. Amend Sec. 3505.50 by redesignating paragraphs (a), (b), and (c)
as paragraphs (1), (2), and (3), respectively, redesignating the
introductory text as paragraph (a), and adding paragraph (b) to read as
follows:
Sec. 3505.50 How will I know if BLM has approved or rejected my
application?
* * * * *
(b) If we do not accept your application, we will refund your
rental payment. We will retain any fees already paid for processing the
application.
Sec. 3505.51 [Removed]
0
41. Section 3505.51 is removed.
0
42. Amend Sec. 3505.64 by revising the last sentence to read as
follows:
Sec. 3505.64 How do I apply for an extension?
* * * Include the processing fee for extensions of prospecting
permits found in the fee schedule in Sec. 3000.12 of this chapter and
the first year's rental in accordance with Sec. Sec. 3504.10, 3504.15,
and 3504.16 of this part.
Subpart 3507--Preference Right Lease Applications
0
43. Revise Sec. 3507.16 to read as follows:
Sec. 3507.16 Is there a fee or payment required with my application?
Yes. You must submit the first year's rental with your application
according to the provisions in Sec. 3504.15 of this part. BLM will
also charge a processing fee on a case-by-case basis as described in
Sec. 3000.11 of this chapter.
Subpart 3508--Competitive Lease Applications
0
44. Amend Sec. 3508.12 by redesignating paragraphs (b) and (c) as
paragraphs (c) and (d) and adding a new paragraph (b) as follows:
Sec. 3508.12 How do I get a competitive lease?
* * * * *
(b) Before BLM publishes a notice of lease sale, pay a processing
fee on a case-by-case basis as described in Sec. 3000.11 of this
chapter as modified by Sec. Sec. 3508.14 and 3508.21. If someone else
is the successful bidder, BLM will refund you the amount you paid under
this paragraph. If there is no successful bidder, you remain
responsible for all processing fees.
* * * * *
0
45. Amend Sec. 3508.14 by adding a new paragraph (b)(7) to read as
follows:
Sec. 3508.14 How will BLM publish the notice of lease sale?
* * * * *
(b) * * *
(7) If the tract being offered for competitive sale was nominated
by an applicant, a statement of the total cost recovery fee paid to BLM
by the applicant under Sec. 3508.12 up to 30 days before the
competitive lease sale.
0
46. Amend Sec. 3508.21 by removing the word ``and'' at the end of
paragraph (a)(4), by removing the period and adding in its place a
semi-colon at the end of paragraph (a)(5), and adding new paragraphs
(a)(6) and (a)(7) to read as follows:
[[Page 58878]]
Sec. 3508.21 What happens if I am the successful bidder?
(a) * * *
(6) If you were not the applicant, pay the cost recovery fee
specified in the lease sale notice; and
(7) Pay all processing costs BLM incurs after the date of the sale
notice.
* * * * *
Subpart 3509--Fractional and Future Interest Lease Applications
0
47. Amend Sec. 3509.16 by removing the second sentence and adding a
new sentence at the end to read as follows:
Sec. 3509.16 How do I apply for a future interest lease?
* * * BLM will charge you a processing fee on a case-by-case basis
as described in Sec. 3000.11 of this chapter.
0
48. Amend Sec. 3509.30 by revising the last sentence to read as
follows:
Sec. 3509.30 May I withdraw my application for a future interest
lease?
* * * BLM will retain any fees already paid for processing the
application.
0
49. Amend Sec. 3509.46 by removing the second sentence and adding a
new sentence at the end to read as follows:
Sec. 3509.46 How do I apply for a fractional interest prospecting
permit or lease?
* * * BLM will charge you a processing fee on a case-by-case basis
as described in Sec. 3000.11 of this chapter.
0
50. Amend Sec. 3509.51 by revising the last sentence to read as
follows:
Sec. 3509.51 May I withdraw my application for a fractional interest
prospecting permit or lease?
* * * BLM will retain any fees already paid for processing the
application.
Subpart 3511--Lease Terms and Conditions
0
51. Amend Sec. 3511.27 by revising the last sentence to read as
follows:
Sec. 3511.27 How do I renew my lease?
* * * Send us 3 copies of your application together with the
processing fee for lease renewal found in the fee schedule in Sec.
3000.12 of this chapter and an advance rental payment of $1 per acre or
fraction of an acre.
Subpart 3513--Waiver, Suspension or Reduction of Rental and Minimum
Royalties
0
52. Add Sec. 3513.16 to read as follows:
Sec. 3513.16 Do I have to pay a fee when I apply for a waiver,
suspension, or reduction of rental, minimum royalty, production
royalty, or minimum production?
Yes. BLM will charge you a processing fee on a case-by-case basis,
as described in Sec. 3000.11 of this chapter.
Group 3600--Mineral Materials Disposal
PART 3600--MINERAL MATERIALS DISPOSAL
0
53. Revise the authority citation for part 3600 to read as follows:
Authority: 30 U.S.C. 601 et seq.; 43 U.S.C. 1201, 1701 et seq.;
Sec. 2, Act of September 28, 1962 (Pub. L. 87-713, 76 Stat. 652).
0
54. Amend Sec. 3602.11 by adding paragraph (c) to read as follows:
Sec. 3602.11 How do I request a sale of mineral materials?
* * * * *
(c) You must pay a processing fee as provided in Sec. 3602.31(a)
and Sec. 3602.44(f). If the request is for mineral materials that are
from a community pit or common use area this requirement does not
apply.
0
55. Amend Sec. 3602.31 by:
0
A. Revising the section heading;
0
B. Redesignating paragraphs (b) through (d) as paragraphs (c) through
(e), respectively; and
0
C. Adding new paragraph (b) to read as follows:
Sec. 3602.31 What volume limitations and fees generally apply to
noncompetitive mineral materials sales?
* * * * *
(b) BLM will charge the purchaser a processing fee on a case-by-
case basis as described in Sec. 3000.11 of this chapter.
* * * * *
0
56. Amend Sec. 3602.42 by redesignating paragraphs (b)(8) through
(b)(15) as paragraphs (b)(9) through (b)(16), respectively, and adding
a new paragraph (b)(8) to read as follows:
Sec. 3602.42 How does BLM publicize competitive mineral materials
sales?
* * * * *
(b) * * *
(8) If the sale is by request, the total cost recovery fee paid to
BLM by the applicant up to 21 days before the sale;
* * * * *
0
57. Amend Sec. 3602.43 by redesignating paragraphs (a) and (b) as
paragraphs (b) and (c), respectively, and adding a new paragraph (a) to
read:
Sec. 3602.43 How does BLM conduct competitive mineral materials
sales?
(a) The applicant requesting a mineral materials sale must pay a
processing fee on a case-by-case basis as described in Sec. 3000.11 of
this chapter as modified by the provisions in this section and in Sec.
3602.42(b)(8). The cost recovery process for a competitive mineral
materials sale follows:
(1) The applicant requesting the sale must pay the cost recovery
fee amount before BLM will publish a sale notice.
(2) Before the contract is issued:
(i) The successful bidder, if someone other than the applicant,
must pay to BLM the cost recovery amount specified in the sale notice;
and
(ii) The successful bidder must pay all processing costs BLM incurs
after the date of the sale notice.
(3) If the successful bidder is someone other than the applicant,
BLM will refund to the applicant the amount paid under paragraph (a)(1)
of this section.
* * * * *
0
58. Amend Sec. 3602.44 by adding paragraph (f) to read as follows:
Sec. 3602.44 How do I make a bid deposit?
* * * * *
(f) BLM will charge the successful bidder a processing fee on a
case-by-case basis as described in Sec. 3000.11 of this chapter and
Sec. 3602.43.
0
59. Amend Sec. 3602.47 by revising the section heading and adding a
new paragraph (e) to read as follows:
Sec. 3602.47 When and how may I renew my competitive contract and
what is the fee?
* * * * *
(e) Fee. BLM will charge a processing fee on a case-by-case basis
as described in Sec. 3000.11 of this chapter.
Group 3800--Mining Claims Under the General Mining Laws
PART 3800--MINING CLAIMS UNDER THE GENERAL MINING LAWS
0
60. Revise the authority citation for part 3800 to read as follows:
Authority: 16 U.S.C. 351 and 460y-4; 30 U.S.C. 22 and 28k; 31
U.S.C. 9701; 43 U.S.C. 1201 and 43 U.S.C. 1701 et seq.
0
61. Add a new subpart 3800, consisting of Sec. 3800.5, to read as
follows:
Subpart 3800--General
Sec. 3800.5 Fees.
(a) An applicant for a plan of operations under this part must pay
a processing fee on a case-by-case basis as described in Sec. 3000.11
of this chapter whenever BLM determines that consideration of the plan
of operations requires the preparation of an Environmental Impact
Statement.
(b) An applicant for any action for which a mineral examination,
including
[[Page 58879]]
a validity examination or a common variety determination, and their
associated reports, is performed under Sec. 3809.100 or Sec. 3809.101
of this part must pay a processing fee on a case-by-case basis as
described in section 3000.11 of this chapter for such examination and
report.
(c) An applicant for a mineral patent under part 3860 of this
chapter must pay a processing fee on a case-by-case basis as described
in Sec. 3000.11 of this chapter for any validity examination and
report prepared in connection with the application.
(d) An applicant for a mineral patent also is required to pay a
processing fee under Sec. 3860.1 of this chapter.
PART 3830--LOCATING, RECORDING, AND MAINTAINING MINING CLAIMS OR
SITES; GENERAL PROVISIONS
0
62. Revise the authority citation for part 3830 to read as follows:
Authority: 18 U.S.C. 1001, 3571; 30 U.S.C. 22 et seq., 242, 611;
31 U.S.C. 9701; 43 U.S.C. 2, 1201, 1212, 1457, 1474, 1701 et seq.;
44 U.S.C. 3501 et seq.; 115 Stat. 414.
0
63. Revise entries (a), (b), (c), (e), and (f) in the table at Sec.
3830.21 to read as follows:
Sec. 3830.21 What are the different types of service charges and
fees?
* * * * *
----------------------------------------------------------------------------------------------------------------
Amount due per mining claim or
Transaction site Waiver available
----------------------------------------------------------------------------------------------------------------
(a) Recording a mining claim or site (1) A total sum which includes No.
location (part 3833). (i) the processing fee for
notices of location found in the
fee schedule in Sec. 3000.12
of this chapter.
(ii) A one-time $30 location fee. No.
(iii) An initial $125 maintenance No.
fee.
(b) Amending a mining claim or site The processing fee for amendment No.
location (Sec. 3833.20). of location found in the fee
schedule in Sec. 3000.12 of
this chapter.
(c) Transferring a mining claim or site The processing fee for transfer No.
(Sec. 3833.30). of mining claim/site found in
the fee schedule in Sec.
3000.12 of this chapter.
* * * * * * *
(e) Recording an annual FLPMA filing The processing fee for recording No.
(Sec. 3835.30). an annual FLPMA filing found in
the fee schedule in Sec.
3000.12 of this chapter.
(f) Submitting a petition for deferment The processing fee for deferment No.
of assessment work (Sec. 3836.20). of assessment work found in the
fee schedule in Sec. 3000.12
of this chapter.
* * * * * * *
----------------------------------------------------------------------------------------------------------------
PART 3833--RECORDING MINING CLAIMS AND SITES
0
64. Revise the authority citation for part 3833 to read as follows:
Authority: 30 U.S.C. 22 et seq., 621-625; 43 U.S.C. 2, 1201,
1457, 1701 et seq.; 62 Stat. 162; 115 Stat. 414.
0
65. Revise Sec. 3833.11(c) to read as follows:
Sec. 3833.11 How do I record mining claims and sites?
* * * * *
(c) When you record a notice or certificate of location, you must
pay a processing fee, location fee, and initial maintenance fee as
provided in Sec. 3830.21 of this chapter.
* * * * *
0
66. Revise Sec. 3833.22(b) to read as follows:
Sec. 3833.22 How do I amend my location?
* * * * *
(b) You must pay a processing fee for each claim or site you amend.
See the table of fees and service charges in Sec. 3830.21 of this
chapter.
* * * * *
0
67. Revise Sec. 3833.32(c) to read as follows:
Sec. 3833.32 How do I transfer a mining claim or site?
* * * * *
(c) For each mining claim or site transferred, each transferee must
pay the full processing fee specified in the table of service charges
and fees in Sec. 3830.21 of this chapter.
* * * * *
PART 3835--WAIVERS FROM ANNUAL MAINTENANCE FEES
0
68. Revise the authority citation for part 3835 to read as follows:
Authority: 30 U.S.C. 22, 28, 28f-28k; 43 U.S.C. 2, 1201, 1457,
1701 et seq.; 50 U.S.C. App. 501, 565; 115 Stat. 414.
0
69. Revise Sec. 3835.32(c) to read as follows:
Sec. 3835.32 What should I include when I submit an affidavit of
assessment work?
* * * * *
(c) A processing fee for each mining claim affected. (See the table
of service charges and fees in Sec. 3830.21 of this chapter); and
* * * * *
0
70. Revise Sec. 3835.33(e) to read as follows:
Sec. 3835.33 What should I include when I submit a notice of intent
to hold?
* * * * *
(e) A processing fee for each mining claim or site affected. (See
the table of service charges and fees in Sec. 3830.21 of this
chapter.)
PART 3836--ANNUAL ASSESSMENT WORK REQUIREMENTS FOR MINING CLAIMS
0
71. Revise the authority citation for part 3836 to read as follows:
Authority: 30 U.S.C. 22, 28, 28b-28e; 43 U.S.C. 2, 1201, 1457,
1701 et seq.; 50 U.S.C. App. 501, 565.
0
72. Amend Sec. 3836.23 by revising paragraph (g) to read as follows:
Sec. 3836.23 How do I petition for deferment of assessment work?
* * * * *
(g) You must pay a processing fee with each petition. (See the
table of service charges and fees in Sec. 3830.21 of this chapter.)
PART 3860--MINERAL PATENT APPLICATIONS
0
73. Revise the authority citation for part 3860 to read as follows:
Authority: 30 U.S.C. 22 et seq.; 31 U.S.C. 9701; 43 U.S.C. 1701
et seq.
0
74. Amend part 3860 by adding new subpart 3860, consisting of Sec.
3860.1, to read as follows:
[[Page 58880]]
Subpart 3860--General
Sec. 3860.1 Fees.
(a) Each mineral patent application must include the processing fee
found in the fee schedule in Sec. 3000.12 of this chapter to cover
BLM's adjudication costs for the application.
(b) As provided at Sec. 3800.5 of this chapter, BLM will charge a
separate processing fee on a case-by-case basis as described in Sec.
3000.11 of this chapter to cover its costs for conducting and preparing
the validity examination and report.
Subpart 3862--Lode Mining Claim Patent Applications
0
75. Revise Sec. 3862.1-2 to read as follows:
Sec. 3862.1-2 Fees.
An applicant for a lode mining claim patent must pay fees as
described in Sec. 3860.1.
Subpart 3863--Placer Mining Claim Patent Applications
0
76. Amend Sec. 3863.1 by adding new paragraph (c) to read as follows:
Sec. 3863.1 Placer mining claim patent applications: General.
* * * * *
(c) An applicant for a placer mining claim patent must pay fees as
described in Sec. 3860.1.
Subpart 3864--Millsite Patents
0
77. Add Sec. 3864.1-5 to read as follows:
Sec. 3864.1-5 Fees.
An applicant for a millsite patent must pay fees as described in
Sec. 3860.1.
PART 3870--ADVERSE CLAIMS, PROTESTS, AND CONFLICTS
0
78. Add an authority citation for part 3870 to read as follows:
Authority: 30 U.S.C. 30; 43 U.S.C. 1201, 1457, 1701 et seq.
Subpart 3871--Adverse Claims
0
79. Amend Sec. 3871.1 by revising paragraph (d) as follows:
Sec. 3871.1 Filing of claim.
* * * * *
(d) Each adverse claim filed must include the processing fee for
adverse claims found in the fee schedule in Sec. 3000.12 of this
chapter.
Subpart 3872--Protests, Contests, and Conflicts
0
80. Amend Sec. 3872.1 by revising paragraph (b) to read as follows:
Sec. 3872.1 Protest against mineral applications.
* * * * *
(b) A protest by any party, except a Federal agency, must include
the processing fee for protests found in the fee schedule in Sec.
3000.12 of this chapter.
[FR Doc. 05-19851 Filed 10-6-05; 8:45 am]
BILLING CODE 4310-84-P